B2Gold Corp., the Canadian miner that prides itself on mining for gold in lesser-travelled geographies, has announced a $1.1-billion deal to acquire Australia’s CGA Mining Ltd., owner of the largest operating gold project in the Philippines.
The all-stock deal, a 26-per-cent premium to CGA’s closing price as of Sept. 17, offers 0.74 B2Gold shares for each share of CGA, a company that is listed on the Australia and Toronto stock exchanges.
The deal comes at a time when takeovers have been few and far between in the mining sector, where companies are nervous about global economic turbulence and a slowdown in China, which has powered the global economy since the 2008/09 credit crisis spread around the world.
It also comes as gold prices are surging back toward record levels of a year ago, and could mark the start of a wave of opportunistic dealmaking.
Vancouver-based B2Gold is the largest gold producer in Nicaragua, where it has two operating gold mines, La Libertad and Limon. The company is run by the former management of Bema Gold Corp., which was acquired by Kinross Gold Corp. for $3.5– billion in 2007.
CGA owns the Masbate gold mine in the Philippines. The mine has production capacity of 200,000 ounces of gold per year. B2Gold has capacity to produce close to 150,000 ounces of gold per year out of Nicaragua. It has exploration projects in Nicaragua, Colombia and Uruguay.
“With this transaction, B2Gold has taken a major step towards cementing itself as a leading gold sector consolidator,” said B2Gold president and chief executive officer Clive Johnson, who worked in Chile during the regime of former dictator Augusto Pinochet.
CGA’s financial advisors on the deal were BMO Capital Markets and Haywood Securities Inc. B2Gold was advised by Canaccord Genuity Corp.