B2Gold (TSX: BTO; NYSE-AM: BTG) is reporting the Malian government intends to buy an additional 10% stake in B2Gold’s Fekola gold mine in western Mali.
Pursuant to Malian mining law, the Malian government already had a 10% free carried interest in B2Gold’s operating Malian subsidiary, Fekola SA.
The Malian government will now obtain an additional 10% ordinary equity interest in Fekola SA for US$47 million. B2Gold will loan the Malian government the money to buy the stake, and withhold dividends on the government’s 10% free carried interest to pay off that loan.
The 10% free carried interest entitles the government to a “priority dividend” equivalent to 10% of Fekola’s annual net income. The newly acquired interest will entitle the government to ordinary dividends payable on the same basis as any ordinary dividends declared and payable to B2Gold for its 80% interest in the mine.
B2Gold began commercial production at Fekola last November. In the first half of 2018, the mine produced 227,000 oz. gold at all-in sustaining costs of US$446 per ounce.
B2Gold operates four other gold mines: two in Nicaragua, one in the Philippines and another in Namibia. Altogether, the company expects to produce 930,000 oz. gold at all-in sustaining costs of US$805 per oz. gold in 2018.
Shares of B2Gold are currently valued at $3.03 with a 52-week range of $3.03 to $4.04. The company has a $483-million market capitalization.
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