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B2Gold and Sandbox Royalties to Form Versamet Royalties

Senior gold miner B2Gold (TSX:BTO,NYSEAMERICAN:BTG) and Sandbox Royalties announced on June 6 that they have entered into a purchase and sale agreement to create Versamet Royalties.

As part of the transaction, B2Gold will sell 10 precious and base metals royalties to Sandbox, which will be renamed Versamet Royalties. Versamet will acquire ownership of the royalties by issuing 153.2 million common shares to B2Gold at a price of C$0.80 per share, giving B2Gold a 33 percent equity stake in Versamet.

The royalties include 2.7 percent net smelter return (NSR) royalties on West African Resources' (ASX:WAF,OTC Pink:WFRSF) Kiaka gold project and Toega gold deposit. Also in the package are:

  • A 2 percent net profit royalty on AngloGold Ashanti's (NYSE:AU,JSE:ANG) Quebradona project.
  • A 2 percent NSR royalty on the Mocoa project, owned by Libero Copper & Gold (TSXV:LBC,OTCQB:LBCMF).
  • A 1.5 percent NSR royalty on the Primavera project, owned by Calibre Mining (TSX:CXB,OTCQX:CXBMF).

Versamet will also hold five other exploration-stage royalties.

B2Gold will retain ownership of its 22.5 percent silver royalty on Glencore's (LSE:GLEN,OTC Pink:GLCNF) Hackett River project; the company's press release notes that Versamet separately owns a 2 percent NSR royalty on the same project. B2Gold currently plans to explore value-maximizing alternatives for its retained silver royalty.

"This strategic partnership provides B2Gold with an attractive opportunity to unlock the value of our royalties, which have gone largely unrecognized by the market and were not a core part of our business,” said Clive Johnson, president and CEO of B2Gold in a press release outlining the deal. “As a significant shareholder, B2Gold is pleased to retain meaningful upside exposure and leverage to Versamet as its experienced management team stewards its strengthened asset base and continues executing on its growth strategy to create future shareholder value."

B2Gold's stake in Versamet is valued at about US$90 million.

The first phase of the transaction closed on June 5, and included the royalties on Kiaka, Toega and Primavera projects; two exploration-stage royalties were also included in this segment of the deal.

B2Gold received 122 million shares of Versamet valued at approximately US$72 million for this phase.

The remaining royalties are subject to various rights of first refusal or right of first offer provisions. These are expected to be resolved within 60 days, at which point the second phase of the transaction can happen.

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Securities Disclosure: I, Giann Liguid, hold no direct investment interest in any company mentioned in this article.


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