B2Gold ups its presence in Nicaragua

B2Gold (BTO-T) is increasing its foothold in Nicaragua by agreeing to take full ownership of two of its joint-venture gold properties, and earning into two more projects in the country.

The junior inked an agreement with joint-venture partner Radius Gold (RDU-V) to hike its 60%-stake in the Trebol and El Pavon gold properties to 100% by paying $20 million in shares.

It also plans to pay Radius US$10 per oz. gold on 40% of any reserves in excess of 500,000 oz. on the properties. So far, the partners have not tallied any resources or reserves for the projects.

B2Gold had previously earned a 60% interest in the two properties by spending US$4 million in exploration. Roughly half of that amount was spent in a drill program last year, which indentified that the Trebol property in northeastern Nicaragua could potentially be amenable to open-pit mining. This possibility likely played a part in B2Gold’s decision to increase its ownership.

The company carried out a US$2.1-million program in 2011 to drill over 3,000 metres at Trebol. The program focused on three zones of low sulphidation gold mineralization in altered volcanic rocks striking more than 5 km.

In May 2011, B2Gold reported that the project could possibly “host, at or near surface, shallow dipping gold mineralization that could potentially be mined with very low strip ratios.”

Some highlights from that program include: 11.4 metres grading 8.39 grams, including 7 metres of 13.08 grams gram; 28.5 metres of 1.96 grams gold; and 7.7 metres of 8.86 grams gold, including 4 metres of 15.82 grams gold.

In August, trench sampling on the Trebol East zone produced interesting results, outlining a new north-south trending mineralized zone at least 1.5-km long. Surface samples returned 18 metres grading 2.56 grams, and 1 km north of that cut 19 metres at 2.56 grams.

In February 2012, Radius said that B2Gold is planning a 2,000-metre program to test the new Trebol East targets.

For the Pavon property, B2Gold had slated US$300,000 last year to conduct 1,000 metres of drilling. Located in central Nicaragua, the project hosts several veins extending 6 km in strike length. Last year’s drill program was designed to test the viability of open-pit mining portion of the veins to provide more feed for the mill at the Limon mine.

Limon is one of B2Gold’s two producing assets in the country, the other being the flagship Libertad mine.

B2Gold has also agreed to continue its partnership with Radius, by agreeing to earn a 60% stake in Radius’ San Jose and La Magnolia properties in the country.

For 2012, Libertad is forecast to produce 102,000 to 110,000 oz. at an operating cash cost of US$550 to US$575 per oz., while Limon is expected to churn out 48,000 to 50,000 oz. at a cash cost of US$700 to US$725 per oz.