Canada-based B2Gold has agreed to sell 100% of the issued and outstanding shares of Volta Resources (Cayman) to West African Resources (WAF).
Volta Resources holds an 81% interest in the Kiaka gold project in Burkina Faso. It is claimed to be one of the largest undeveloped gold resources in West Africa.
According to the binding agreement, WAF will acquire Volta Resources by paying $450,000 in cash to B2Gold upon execution of the agreement.
Upon completion of the transaction, B2Gold will also receive $45m in equal amounts of cash and WAF shares.
The company will receive a further $45m either in cash or WAF shares either at the start of project construction or completion of a positive feasibility study at the project.
B2Gold will also get a 2.7% net smelter return (NSR) royalty interest on the first 2.5 million ounces (Moz) of gold produced at the project.
On the next 1.5Moz production, B2Gold is eligible to receive a 0.45% NSR royalty interest.
The transaction is subject to certain customary conditions and is expected to complete by the end of November 2021.
B2Gold has also signed an amended and restated agreement with WAF and GAMS-Mining F&I.
According to this agreement, B2Gold will sell its full stake in Kiaka Gold, the holder of the Toega Project, to WAF.
B2Gold holds 90% of the Toega Project, with GAMS owning the remaining stake.
GAMS will also sell its 10% interest in Toega Project to WAF.
B2Gold will be paid $18m in cash on the first 1.5Moz produced at the Toega Project in Burkina Faso.
It would also get a 2.7% NSR until the royalty payments come to a total of $22.5m. Following this, the NSR royalty interest would be reduced to 0.45%.
B2Gold president and CEO Clive Johnson said: “We are pleased to have reached an agreement with WAF relating to the sale of the Kiaka Project, building on a strong relationship that we have formed with WAF over the past several years following the initial agreement relating to the Toega Project.
“WAF has a strong reputation of being a solid operator in Burkina Faso and with its existing local infrastructure and operating experience is well-positioned to move the Kiaka Project forward in a timely and cost-effective manner.
“B2Gold, through the WAF shares it will receive as part of the consideration, and royalties on both the Kiaka and Toega projects, will continue to benefit from the future development of the projects.”