09:07 AM EDT, 10/25/2021 (MT Newswires) -- B2Gold Corp. (BTO.TO) said Monday that it entered into a binding agreement to sell subsidiary Volta Resources (Cayman) Inc., which owns 81% of the Kiaka gold project located in Burkina Faso, to West African Resources Ltd.
B2Gold, which was up 2.1% at last look in US pre-market trading after gaining 2.3% in Canada on Friday, said it will receive US$450,000 on the execution of the agreement and US$45 million in cash and shares, payable on deal's close.
The company will receive another US$45 million in cash or shares payable either on the start of construction, provided that it will be at least six months from the agreement; completion of a feasibility study; and Oct. 25, 2022, whichever is earlier.
B2Gold is also entitled to a 2.7% net smelter return on the first 2.5 million ounces of gold produced from the project, and a 0.45% NSR on the next 1.5 million ounces of gold produced.
Deal close is subject to certain conditions including the completion of West African Resources' acquisition of a 9% stake in Kiaka from GAMS-Mining F&I Ltd.
In addition, B2Gold signed an agreement to sell Kiaka Gold SARL, holder of the Toega gold project in Burkina Faso to West African Resources. As part of the deal, GAMS will sell its 10% stake in Toega. B2Gold currently holds a 90% stake in Toega and GAMS holds the rest.
Under the terms of, B2Gold will receive US$18 million and a 2.7% NSR on the first 1.5 million ounces of gold produced at Toega. The royalty will decline to 0.45% NSR after royalty payments totaled US$22.4 million.
The transactions are expected to close by the end of November.