ASX-listed gold developer Papillon Resources expects to complete its definitive feasibility study and start mine construction on the Fekola gold project, in Mali, this quarter, the company reported at the Paydirt 2014 Africa Down Under conference, which took place from September 2 to 4 in Perth, Australia.

Work at the Fekola project is planned to begin towards the end of this year, and will have a full contingent of people on the ground in 2015.

Papillon has also bedded down a $650-million merger with TSX-listed Canadian miner B2Gold Corp.

Delivering his address at Africa Down Under, Papillon MD Mark Connelly said the merger would derisk the Fekola project and bring the development schedule forward – a point supported by the Mali government.

The Fekola project is a $350- million mining investment, which Connelly indicated Papillon was ready to get under way. “Our team is well advanced in terms of engineering studies and we will be in production within a short period – less than 18 months,” he said.

“The merged entity is on track for an overall production rate of between 900 000 oz and a million ounces by 2017, and will be one of the few companies in the gold industry with a development profile producing on a profitable basis,” he added.

Australian shareholders in Papillon voted on the merger on September 15, with the successful completion of the merger on October 3, through which B2Gold has acquired all the issued ordinary shares of Papillon Resources.

Connelly said timing had been fortuitous for the merger, based on where the company was with Fekola’s engineering works.

“We have not lost any momentum with the schedule, despite the merger, and will start construction towards the end of this year with a full contingent on the ground early in 2015 to move Fekola along at rapid speed,” he said.

The merger proposes 0.661 B2Gold ordinary shares per Papillon share. It will be implemented by way of a scheme of arrangement.

Existing B2Gold shareholders and former Papillon shareholders will own about 74% and 26% respectively of the combined company. Connelly will remain with the combined entity as a nonexecutive director.

He said the combination of B2Gold and Papillon will result in a company with a significant growth profile beyond its three operating mines, which collectively produced 366 000 oz of gold in 2013 at a cash cost of C$681/oz and an all-in sustaining cost of C$1 064/oz.

B2Gold’s production is projected to increase significantly as its low-cost Otjikoto mine, in Namibia, is expected to begin gold production late this year.

The combined company will be focused on furthering the development of Fekola.