Mining
Thursday, June 6th, 2024 3:11 pm EDT
Key Points
- B2Gold Corp. has sold a portfolio of 10 precious and base metals royalties to Sandbox Royalties Corp., which has been renamed Versamet Royalties Corp., in exchange for 153.2 million common shares valued at approximately $90 million.
- The strategic partnership allows B2Gold to unlock the value of its royalties while retaining a significant equity interest (33%) in Versamet, providing ongoing exposure and potential upside as Versamet manages and grows its asset base.
- The first phase of the transaction closed on June 5, 2024, with B2Gold receiving 122 million shares of Versamet. The second phase, involving the remaining royalties, is expected to close within 60 days, subject to various provisions.
B2GOLD AND SANDBOX ROYALTIES PARTNER TO CREATE VERSAMET ROYALTIES; B2GOLD RECEIVES $90 MILLION EQUITY INTEREST IN VERSAMET
B2Gold Corp. has entered into a purchase and sale agreement to sell a portfolio of 10 precious and base metals royalties to Sandbox Royalties Corp., a private, returns-focused metals royalty company. In connection with the transaction, Sandbox has been renamed Versamet Royalties Corp. All dollar figures are in United States dollars unless otherwise indicated.
Under the terms of the agreement, Versamet will acquire ownership of the royalties and as consideration will issue 153.2 million common shares to B2Gold at a price of 80 Canadian cents per share, representing an equity ownership interest in Versamet of 33 per cent valued at approximately $90-million. The royalties comprise the following:
- 2.7-per-cent net smelter return (NSR) royalty on the Kiaka gold project, owned by West African Resources Ltd.;
- 2.7-per-cent NSR royalty on the Toega gold deposit, owned by West African Resources;
- 2-per-cent net profit royalty on the Quebradona project, owned by AngloGold Ashanti Ltd.;
- 2-per-cent NSR royalty on the Mocoa project, owned by Libero Copper & Gold Corp.;
- 1.5-per-cent NSR royalty on the Primavera project, owned by Calibre Mining Corp.;
- Five additional exploration-stage royalties.
B2Gold has retained ownership of the 22.5-per-cent silver royalty on Glencore’s Hackett River project. Separately, Versamet owns a 2-per-cent NSR royalty on Glencore’s Hackett River project. B2Gold will continue to explore value maximizing alternatives for the B2Gold Hackett River royalty.
“This strategic partnership provides B2Gold with an attractive opportunity to unlock the value of our royalties which have gone largely unrecognized by the market and were not a core part of our business,” said Clive Johnson, president and chief executive officer of B2Gold. “As a significant shareholder, B2Gold is pleased to retain meaningful upside exposure and leverage to Versamet as its experienced management team stewards its strengthened asset base and continues executing on its growth strategy to create future shareholder value.”
The closing of the first phase of the transaction occurred on June 5, 2024, and included the royalties on the Kiaka gold project, the Toega gold deposit, the Primavera project and two exploration-stage royalties. In connection with the first phase closing, B2Gold received 122 million shares of Versamet valued at approximately $72-million. The remaining royalties are subject to various right of first refusal or right of first offer provisions, which are expected to lapse or be exercised within the next 60 days, at which time the closing of the second phase of the transaction is expected to occur.
In connection with the closing of the first phase of the transaction, the parties have entered into an investor rights agreement which, among other customary terms and conditions, entitles B2Gold to nominate one member to Versamet’s board of directors and pro rata participation rights with respect to future capital raises. B2Gold’s strategic partnership will provide continuing exposure to Versamet’s royalty portfolio, which now includes 28 royalties, two of which are currently cash flowing, and several of which are expected to be cash flowing in the near term.
B2Gold’s financial adviser in connection with the transaction is RBC Capital Markets, and its legal counsel is McCarthy Tetrault LLP.
About B2Gold Corp.
B2Gold is a low-cost international senior gold producer headquartered in Vancouver, Canada. Founded in 2007, today, B2Gold has operating gold mines in Mali, Namibia and the Philippines, the Goose project under construction in northern Canada, and numerous development and exploration projects in various countries, including Mali, Colombia and Finland. B2Gold forecasts total consolidated gold production of between 860,000 and 940,000 ounces in 2024.
We seek Safe Harbor.
