B2Gold Corp. (TSX: BTO) (NYSE AMERICAN: BTG) (NSX: B2G) is set to become the sole owner of the Gramalote Project after acquiring 50 per cent stake of the project from AngloGold Ashanti (JSE: ANG)(NYSE: AU)(ASX: AGG).
On Monday, the company announced the agreement to buy the project located in Antioquia, Colombia. The project is 124 kilometres northeast of Medellin and was put on hold last August because it did not meet the junior venture’s investment thresholds for development.
B2Gold said that the consolidation will make it easier to analyze lower capital intensity and will look into smaller-scale, cost-saving development options. With the transaction, B2Gold will add 2.11 million gold ounces of Indicated Mineral Resources and 740,000 Inferred Mineral Resources to its mineral resource base.
“This sale will help increase our focus on our operating assets and the projects we intend to develop,” AngloGold Ashanti CEO Alberto Calderon said in a separate statement.
“AngloGold Ashanti remains a committed, long-term investor in Colombia with our exciting Quebradona copper and gold project and we look forward to playing a key role in developing of a modern, responsible mining sector in the country.”
Gramalote marked B2Gold’s initial venture as an exploration company during its early stages. Back in 2015, it achieved a significant milestone by obtaining Colombia’s first environmental license in 35 years.
This permit granted the company a three-year window to address various social aspects associated with its open pit project, such as the relocation of artisanal miners and nearby residents. However, this period also saw Gramalote embroiled in a mining rights dispute with Zonte Metals (TSX.V: ZON), a matter that continues to be unresolved.
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The total transaction amount is USD$60 million which will be paid in cash and through payments over time contingent upon certain milestones. Upon closing, AngloGold is set to receive USD$20 million followed by an additional USD$10 million will be paid when B2Gold makes a construction decision at the Gramalote Project.
There will be another USD$10 million payment when commercial production begins at the Gramalote Project, provided it starts within five years of the transaction’s closing. If commercial production doesn’t start within this timeframe, no payment will be made. USD$10 million will be paid on the first anniversary of commercial production and an additional USD$10 million on the year.
B2Gold also gave an update on the construction of its Goose Project in the Back River Gold District in Nunavut, Canada which was acquired after buying Sabina Gold & Silver. The project is on schedule for the first gold pour of Q1 2025 and expenses remain in line with the estimate of CAD$800 million.
The company has operations in Mali, Namibia and the Phillipines. It also has a mine under construction in Canada and other development and exploration projects in Finland and Colombia. B2Gold forecasts total consolidated gold production of between 1,000,000 and 1,080,000 ounces in 2023.
After the announcement, B2Gold stock stayed flat at $4.32 on the Toronto Stock Exchange.
