B2Gold Corp. to acquire Sabina Gold & Silver Corp
On the heels of Newmont’s announced plans to acquire Newcrest Mining another gold merger is in the works as B2Gold Corp. announced that it will acquire Sabina Gold & Silver Corp. in an all-stock transaction worth $824 million (C$1.1 billion).
B2Gold will acquire Sabina’s 100 percent owned Back River Gold District located in Nunavut, Canada. The Back River Gold District consists of five mineral claims blocks along an 80 km (50 mile) belt. “The most advanced project in the district, Goose, is fully permitted, construction ready, and has been de-risked with significant infrastructure currently in place. B2Gold has strong northern construction expertise and experience to deliver the fully permitted Goose project and the financial resources to develop the significant gold resource endowment at the Back River Gold District into a large, long life mining complex,” B2Gold wrote in a release.
Under the terms of the transaction, B2Gold will issue 0.3867 of a common share of B2Gold for each Sabina common share held, representing consideration of C$1.87 per Sabina Share on a fully-diluted basis and a total equity value for Sabina of approximately C$1.1 billion based on the closing price of B2Gold on the Toronto Stock Exchange as of Feb. 10, 2023. The consideration implies a premium of 45 percent to the 20-day volume weighted average prices of each of B2Gold and Sabina on the TSX as of Feb. 10, 2023. Furthermore, the consideration implies a premium of 45 percent to the closing price of Sabina on the TSX as of Feb. 2, 2023, the date the non-binding letter of intent was signed.
“The acquisition of Sabina represents an exciting opportunity to develop the significant gold resource endowment at the Back River Gold District into a large, long life mining complex. B2Gold has strong construction expertise and experience to successfully develop the fully permitted Goose project and unlock considerable value for the shareholders of both Sabina and B2Gold,” Clive Johnson, President and Chief Executive Officer of B2Gold said. “The Back River Gold District has multiple high-potential mineralized zones which remain open, and we are confident that the district has strong untapped upside with numerous avenues for resource growth.
“Our extensive due diligence reinforced the scarcity of a gold district of the quality of Back River, as well as the excellent work that the Sabina team has completed to date in taking the asset from an exploration project to a near-term operating mine. We have great respect for what Sabina has achieved at Back River and look forward to working with their exceptional team moving forward,” Johnson said. “We also look forward to building strong relationships with the Kitikmeot Inuit Association and commit to ensuring that the development of the gold district delivers sustainable benefits to the Kitikmeot communities and Nunavut, as B2Gold has done all over the world in the communities and jurisdictions in which we operate in.”
Bruce McLeod, President and Chief Executive Officer of Sabina said, “We are tremendously proud of the work we have done to advance the first mine on what we believe will be a multi-generational mining district at Back River. The execution of the Goose project by Sabina did not come without risk to Sabina as a single asset, junior development company with capital constraints. With a two-year construction period until first gold production, we believe that additional value can be unlocked by participating as shareholders of a major gold producer with the northern experience and financial resources to optimize the Goose project and this prolific belt. Shareholders will also benefit from exposure to B2Gold’s continued growth and healthy dividends.
“We would like to thank our land-owners, the Kitikmeot Inuit Association and the constituents of the Kitikmeot Region for all their support in advancing this project. I am confident that, when completed, this agreement means an ever-brighter future for the Back River Gold District. B2Gold will bring to Nunavut a wealth of international mining experience built upon a proven track record of project success.”
The Back River Gold District is located in southwestern Nunavut, Canada, approximately 520 km (323 miles) northeast of Yellowknife. The district comprises mining leases and claims covering approximately 58,374 hectares. There are five mineral claim blocks on the 80 km (50 miles) belt. The most advanced is the Goose project. The second most advanced is the George project, situated approximately 60 km (37 miles) northwest from the Goose project. There are three other underexplored claim blocks named Boot, Boulder, and Del. Significant infrastructure exists at the Goose project site along with the port facility at Bathurst Inlet.