B2Gold Corp. (TSX: BTO) (NYSE MKT: BTG) (NSX: B2G) entered into a $1.1 billion all-stock purchase agreement with Sabina Gold & Silver Corp. (TSX: SBB) (OTC: SGSVF and now owns the Back River Gold district in Nunavut.
The Back River Gold District contains five mineral claims blocks along an 80-kilometre belt. Its most advanced project, Goose, is construction-ready, has all the permits and has been de-risked.
The company announced Monday that B2Gold will issue 0.3867 of a common share of B2Gold for each Sabina share held for a consideration of $1.87 per Sabina share. Upon completion, existing B2Gold shareholders and Sabina shareholders will own approximately 83 per cent and 17 per cent of the outstanding B2Gold shares.
“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,” said B2Gold CEO Clive Johnson.
After the acquisition, the attributable proven and probable mineral reserves have increased by 66 per cent to 9.0 million gold ounces.
Additionally, the attributable measured and indicated mineral resources have increased by 52 per cent to 18.5 million gold ounces. The attributable inferred mineral resources have also seen a 63 per cent increase to 7.4 million gold ounces.
B2Gold stock dropped by 3.21 per cent to $4.68 on the Toronto Securities Exchange.
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Goose project aims to produce an average of 223,000 oz of gold annually
The Goose project’s updated feasibility study, released in March 2021, unveiled a 15-year life-of-mine plan. The project aims to produce an average of 223,000 ounces of gold per year, with an annual production of 287,000 ounces over the first five years. The plan involves extracting 3.6 million ounces of mineral reserves with an average gold content of 5.97 grams per tonne (g/t).
Significant progress has been made in reducing the risk associated with the Goose project. The Echo pit pre-stripping has already commenced, and 97 per cent of the procurement is complete. The project’s plant site civil works are entirely finished.
The project will benefit from B2Gold’s construction and global logistics teams, who have expertise in cold-weather environments, including winter ice road construction and operation.
This experience was acquired from the construction of the Julietta and Kupol mines in Russia, which were developed as part of B2Gold’s predecessor company, Bema Gold.
Significant untapped exploration potential across the 80-kilometre belt
At the Goose project, all deposits including Goose, Echo, Umwelt, Llama, and Nuvuyak deposits are open along eight kilometres of iron formation. This provides the opportunity for considerable mine life extension, according to the company.
The George project, which is approximately 50 kilometres from the Goose project, has over 20 kilometres of iron formation, nearly triple the length of the iron formation at the Goose project. This makes the area highly prospective for expanding existing mineral resources. Furthermore, over 40 targets have been identified at the George project for follow-up drilling.
To exploit the significant exploration potential in the district, B2Gold is planning a significant exploration campaign over the next few years.
Goose is expected to start commercial production in 2025. The other two mines in the area are run by Agnico Eagle Mines Limited (TSE:AEM).