In a significant move bolstering their joint venture, Aurion Resources (TSXV: AU) (OTCQX: AIRFF) has announced that B2Gold Corp. (TSX: BTO) will contribute €3.5 million towards the repurchase of a 3 per cent net smelter return royalty in the Finnish Kutuvuoma project.
The company announced the project on Monday.
Aurion signed an option agreement with Dragon Mining Ltd. (Dragon) (HKG: 1712) in May that gave Aurion the choice to acquire and remove all restrictions on the Kutuvuoma and Silasselkä projects. This includes the Kutuvuoma Royalty and a 3 per cent net smelter return royalty on the Silasselkä project.
To exercise this option, Aurion would need to pay €5 million ($7.2 million) and provide Dragon with 37,500 common shares of Aurion. To help fund the exercise of the option, B2Gold has agreed to help fund the option by contributing €3.5 million in cash.
As a result, Aurion will only need to contribute €1.5 million ($2.1 million) in cash, shares, or a combination of both. However, if Shares are issued, the total number of shares given to Dragon cannot exceed 9.9 per cent of all shares issued by Aurion. This choice can be made by Aurion at any point until late September, 2023.
Together, the two companies have a land area of approximately 331 square kilometers, situated along the major crustal scale Sirkka Shear Zone in the Central Lapland Greenstone Belt. B2Gold operates the mine.
B2Gold shares rose 1 per cent to $4.59 on Monday on the Toronto Stock Exchange.
Shares of Aurion Resources rose 1.8 per cent to $0.57 on Monday on the TSX Venture Exchange.
Read more: Calibre Mining reports 32% sequential cash balance increase to US$77M
Read more: Gobsmacked by Calibre Mining’s high grades from Palomino, Nevada: Haywood Securities
B2Gold investment in Calibre Mining pays off
Earlier this month, Calibre Mining Corp. (TSX: CXB) (OTCQX: CXBMF) made a series of high-grade gold discoveries during its 2023 exploration drill program along the Panteon VTEM corridor. These included intersections of 15.64 g/t gold over 2.5 metres and 31.30 g/t gold over 1.4 metres.
B2Gold owns approximately 28 per cent of Calibre Mining’s issued and outstanding shares courtesy of a deal struck in 2019, wherein Calibre purchased El Limon and La Libertad Gold Mines, the Pavon Gold Project and additional mineral concessions in Nicaragua from B2Gold for approximately USD$100 million.
Recent reports from the Bank of Montreal Financial Group (TSX: BMO) and Bank of Nova Scotia (TSX: BNS) suggest that the commencement of open-pit mining at Eastern Borosi and Pavon Central has been a positive influence on the company’s production performance. Additionally, according to a separate report by Haywood Securities Inc., Calibre’s drill results at the Palomino target have been impressive to analysts due to the discovery of high-grade numbers.
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