B2Gold plans merger with CGA Mining in all-stock deal valued at $1.1 billion

Written By empapat on Rabu, 19 September 2012 | 05.04

Gold bullion bars are displayed in Hong Kong Oct. 17, 2011. THE CANADIAN PRESS/AP

Gold bullion bars are displayed in Hong Kong Oct. 17, 2011. THE CANADIAN PRESS/AP

VANCOUVER - B2Gold Corp. (TSX:BTO) plans to acquire CGA Mining Ltd. (TSX:CGA) and its producing Masbate mine in a friendly all-stock deal they value at $1.1 billion.

The combined company will have operating mines in Nicaragua and the Philippines and less developed properties in Latin America and Africa, if the proposed deal gets the required approvals,

Shareholders of B2Gold — which had a market value of nearly $1.7 billion before the announcement — will own about 62 per cent of the combined company, which is projected to produce 700,000 ounces of gold by 2016.

CGA had a market value of $895 million prior to the announcement, based on a Tuesday closing stock price of $2.65 per share at the Toronto Stock Exchange.

B2Gold's offer of 0.74 share for each CGA share was worth about $3.18 when announced. B2Gold shares closed Tuesday at $4.30 on the TSX.

"We believe CGA and its flagship Masbate mine offers B2Gold shareholders immediate leverage to a significantly larger combined production profile," B2Gold chief executive Clive Johnson said in a statement.

"With this transaction, B2Gold has taken a major step towards cementing itself as a leading gold sector consolidator, providing for geographic and operational diversity while contributing significant cash and future cash flow towards B2Gold's exciting development projects."

Michael Carrick, CGA's chief executive, said provides the opportunity to join a management team with a demonstrated track record of creating value for shareholders.

"B2Gold has a remarkable development profile ahead, and Masbate will play a key role in bringing those projects to fruition. We are pleased to be a part of B2Gold's platform of growth, discovery and superior performance," Carrick said in the companies' joint statement.

The combined 2012 production of the two companies is expected to be 350,000 ounces, including 200,000 ounces from CGA's mine in the Philippines.

The share-swap arrangement values each CGA share at about C$3.18, based on market prices before the announcement.

B2Gold has with two mines in Nicaragua and a portfolio of development or exploration properties in Nicaragua, Colombia, Uruguay as well as in Namibia.

CGA's main asset is the Masbate gold mine, which the companies say is the largest gold project in the Philippines. It has 3.2 million ounces of proven and probable gold reserves.

© The Canadian Press, 2012

19 Sep, 2012


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Source: http://www.globalnews.ca/Money/b2gold+plans+merger+with+cga+mining+in+all-stock+deal+valued+at+11+billion/6442717935/story.html
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