B2Gold Corp. (TSX:BTO) has announced that it is acquiring Sabina Gold and Silver Corp (TSX:SBB), adding Sabina’s 100% owned Back River Gold District located in Nunavut, Canada, to its portfolio.
In a joint statement, the two companies noted that the most advanced project in the Back River Gold District, Goose, was fully permitted, construction ready, and has been de-risked with significant infrastructure currently in place.
B2Gold CEO Clive Johnson said the acquisition of Sabina represents an exciting opportunity to develop the significant gold resource endowment at the Back River Gold District into a large, long-life mining complex.
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“B2Gold has strong construction expertise and experience to successfully develop the fully permitted Goose project and unlock considerable value for the shareholders of both Sabina and B2Gold,” Johnson said.
“The Back River Gold District has multiple high-potential mineralized zones which remain open, and we are confident that the district has strong untapped upside with numerous avenues for resource growth.”
Sabina CEO Bruce McLeod added: “With a two-year construction period until first gold production [at the Goose project], we believe that additional value can be unlocked by participating as shareholders of a major gold producer with the northern experience and financial resources to optimize the Goose project and this prolific belt.”
“Shareholders will also benefit from exposure to B2Gold’s continued growth and healthy dividends,” he said.
Transaction details
The companies said that the acquisition will be implemented by way of a court-approved Plan of Arrangement.
B2Gold will issue 0.3867 of a share of the company for each Sabina share held. This represents consideration of C$1.87 per Sabina share on a fully-diluted basis and a total equity value for Sabina of approximately C$1.1 billion based on the closing price of B2Gold on the Toronto Stock Exchange as of February 10, 2023.
Upon completion of the arrangement, existing B2Gold shareholders and former Sabina shareholders will own approximately 83% and 17% respectively of the outstanding B2Gold shares.
Sabina’s shares jumped 11.4% on the news at C$1.76, while B2Gold’s stock price fell 4.4% to C$4.62.
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