B2Gold grabs AngloGold’s stake in Colombian project

Canada’s B2Gold (TSX: BTO; NYSE: BTO) will become the sole owner of the Gramalote gold project in Colombia after acquiring the 50% stake held by South Africa’s AngloGold Ashanti (NYSE: AU; ASX: AGG), its partner in the venture, for US$60 million.

The gold project, located 124 km northeast of Medellin, was put on hold in August last year, as preliminary results from an optimized feasibility study suggested that Gramalote did not meet the JV’s investment thresholds for mine development.

A few months later, the partners decided that selling Gramalote was the best option for both companies, but failed to find a third party to take over the project.

B2Gold said the consolidation of Gramalote under one owner would make it possible to analyze lower capital intensity, higher-return development opportunities for the project. It noted that so far, Gramalote was looked at as a larger scale project to provide meaningful production growth to both companies.

The Vancouver-based gold producer will now examine various smaller-scale development options to identify cost savings. It will also start a new study in the fourth quarter of this year, with the goal of completing an initial assessment by the end of the second quarter of 2024.

The acquisition of Gramalote will add 2.1 million gold oz. of indicated mineral resources and 740,000 gold oz. of inferred mineral resources to B2Gold’s resource base.

For AngloGold, the sale will help increase its focus on operating assets and projects it intends to develop, the company said in a separate statement.

“AngloGold Ashanti remains a committed, long-term investor in Colombia with our exciting Quebradona copper and gold project and we look forward to playing a key role in developing a modern, responsible mining sector in the country,” CEO Alberto Calderon said.

In a separate announcement, B2Gold said it was on track for first production at its Goose gold mine in Nunavut in early 2025. B2Gold acquired Sabina Gold & Silver for the asset earlier this year. The mine is expected to produce 223,000 oz. of gold per year over a 15-year mine life. B2Gold pegged capital costs for the development at $800 million.

Gramalote details

AngloGold will receive the US$60 million from B2Gold in stages, with US$20 million due on closing of the transaction and the remainder in tranches, depending on the achievement of certain milestones. If commercial production does not begin within five years of the transaction closing date, no payment will be made, B2Gold said.

Gramalote was B2Gold’s first project when it started out as an exploration company. In 2015, it received the first environmental licence awarded in Colombia in 35 years. 

The permit gave it three years to work through social aspects related to the open pit project, including relocating artisanal miners and some nearby residents.

During that time, Gramalote became the centre of a mining rights dispute with Canada’s Zonte Metals, which remains active.