TORONTO (miningweekly.com) – Vancouver-based exploration firm Radius Gold found itself 20% more valuable on Monday, after it announced B2Gold Corp agreed to buy the 40% of two gold joint ventures in Nicaragua the larger peer did not already own, for $20-million in stock.
To be fair, Radius’ market capitalisation on the TSX-V is as a result just under C$29-million, and the stock worth C$0.34 at Monday’s close.
B2Gold had already earned a 60% interest in the Trebol and El Pavon properties, located in central and north-east Nicaragua, by spending $4-million on exploration.
Under the binding agreement, the company will pay Radius $20-million in shares and $10/oz of gold that end up in proven and probable reserves at the properties beyond 500 000 oz, but only for 40%.
According to Radius’ website, Trebol has the potential to host, at or near surface, shallow-dipping gold mineralization that might be mined at low strip ratios.
Work that the previous owner of the Pavon property had conducted had outlined a conceptual, noncompliant resource of 340 000 oz to 350 000 oz. Under the previous agreement, B2Gold would have taken full ownership of El Pavon once production began, and paid Radius on a sliding scale, according to the gold price.
At an average price between $1 600/oz and $1 699/oz, Radius would have received $300/oz in cash.
The companies meanwhile agreed to form a new 60:40 joint venture, over the San Jose and La Magnolia properties, also in the Central American nation.
Shares in B2Gold eased slightly to end the day at C$4.01, in line with a broader market sell-off.
The Vancouver-based company already operates two mines in Nicaragua, and has projects in Uruguay, Colombia and Namibia.