B2Gold, CGA Mining sign $1bn merger deal

19 September 2012 (Last Updated September 19th, 2012 18:30)

Canadia's B2Gold has signed a C$1.1bn ($1.12bn) merger implementation agreement with CGA Mining, a gold producer with assets in the Philippines.

Canadia's B2Gold has signed a C$1.1bn ($1.12bn) merger implementation agreement with CGA Mining, a gold producer with assets in the Philippines.

B2Gold has made an offer of C$3.18 per share, representing a premium of 20% to CGA's Tuesday closing price on the Toronto Stock Exchange.

CGA shareholders will receive 0.74 shares of B2Gold for each share they hold, the companies said.

On completion of the merger, B2Gold shareholders will own 62% of the combined entity with the remaining 38% held by the existing shareholders of CGA.

CGA expects its flagship mine on the island of Masbate to produce 200,000 ounces of gold in the year ending June 2013, but B2Golf expects the deal to increase production to 350,000 ounces this year.

The deal will expand the footprint of both entities with the new partnership owning and operating the Masbate mine, as well as B2Gold's Limon and La Libertad gold mines in Nicaragua.

B2Gold president and CEO Clive Johnson said, "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," Johnson said.

CGA president and CEO Michael Carrick added, "B2Gold has a remarkable development profile ahead, and Masbate will play a key role in bringing those projects to fruition."