B2Gold (TSX: BTO; NYSE-AM: BTG) is selling its 81% stake in the Kiaka gold project in Burkina Faso to Australia’s West African Resources (ASX: WAF) for cash and shares.
Kiaka is within 40 km of West African Resources' Sanbrado gold mine, which poured its first gold in March 2020.
"West Africa continues to be a hot bed of M&A," Craig Stanley of Raymond James commented in a research note. "In less than three years, we count eight producers/mines and ten pre-production companies/projects that have been acquired in the region." Stanley,a mining analyst who covers Orezone Gold (TSXV: ORE), also noted that Kiaka is 50 km south of Orezone's Bombore gold project.
In May, B2Gold said it was updating Kiaka’s existing feasibility study due to the potential for improved economics resulting from lower fuel prices, alternative power options and a higher gold price, and said it expected to complete the updated feasibility study by mid-2021. In a corporate presentation in September, B2Gold stated it was continuing “to review optimization opportunities and ways to unlock the value of the project for its shareholders.”
Under the sales agreement for Kiaka with West African Resources for Kiaka, B2Gold will receive US$450,000 in cash, and once the transaction closes, a further US$45 million—50% in cash and 50% in shares of West African Resources.
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