, Stock Forum
) shares fell 6% on heaving volume Monday on news that it has entered into a definitive merger implementation agreement with Papillon Resources Ltd., an emerging West African gold developer with assets in Mali.
After tumbling to $2.46 in early afternoon trading on volume of over 17.5 million shares, B2Gold has a market cap of $1.7 billion, based on 676 million shares outstanding. The 52-week range is $3.69 and $1.87.
B2Gold was the most actively traded stock on the TSX Tuesday.
Under the agreement, B2Gold and Australia Stock Exchange-listed Papillon have decided to combine the two companies at an agreed exchange rate of 0.661 B2Gold common share for each Papillon ordinary share held.
The merger consideration represents a purchase price of approximately A$1.72 per Papillon share and values the transaction at approximately US$570 million.
The combination of B2Gold and Papillon will result in a company with a significant growth profile beyond its three operating mines, which collectively produce 366,000 ounces of gold in 2013 at a cash cost of US$681 per ounce, and an all-in sustaining cost of US$1,064 per ounce.
B2Gold’s production is projected to increase to approximately 550,000 ounces by 2015 as the low cost Otjikoto mine in Namibia is scheduled to start producing gold in late 2014.
The combined company will be focused on furthering the development of the Fekola project in Mali, and continuing to operate B2Gold’s existing Masbate gold mine in the Philippines and Limon and La Libertad gold mines in Nicaragua.
The merger will be implemented by way of a plan of arrangement. Upon its completion, existing B2Gold shareholders and former Papillon shareholders will own approximately 74% and 26% respectively, of the issued common shares of the combined company.