B2Gold sells Nicaraguan mines to Calibre for $100m

B2Gold Corp. (TSX:BTO) announced Tuesday that it has joined forces with Calibre Mining Corp. (TSXV:CXB) in Nicaragua by handing off all its gold assets in the country to Calibre.

B2Gold has agreed to sell its producing El Limon and La Libertad gold mines, the Pavon gold project, and additional mineral concessions in Nicaragua to Calibre for $100 million. B2Gold will then become Calibre’s biggest shareholder, with an approximate 31% direct equity interest.

The El Limon and La Libertad mines have produced more than 1.4 million ounces of gold since 2010. They are responsible for a large percentage of Nicaragua’s gold exports, and collectively they are the largest individual exporting operations in the country. Combined production from the two mines is projected to be between 150,000 and 160,000 ounces this year.

The Pavon project, 150 km to the north of La Libertad, has indicated resources of 290,000 tonnes grading 5.82 g/t gold for 55,000 contained ounces.

Over the last decade, B2Gold has invested more than C$560 million in capital and exploration in Nicaragua.

Following the sale, B2Gold will focus on optimizing responsible production at its other existing mines, as well as advancing the company’s pipeline of development and exploration projects, said president and CEO Clive Johnson.

B2Gold currently owns three other producing mines, including the Fekola mine in Mali — one of the world’s largest gold mines.

Earlier this year, Johnson said during a telephone interview that “a wave of consolidation is coming in the gold mining industry, but don’t count on buyers overspending on assets.” The CEO added that his company isn’t interested in making deals beyond “great exploration opportunities.”

Like B2Gold, Calibre Mining has been actively exploring in Nicaragua for the past ten years. Aside from its 100% interest in the Borosi gold project in northeastern Nicaragua, the company is also involved in a joint venture with Iamgold on the Eastern Borosi project.

To fund the B2Gold asset purchase, Calibre has arranged a C$100 million financing. It also plans to apply for a move to the Toronto Stock Exchange.

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