Gold and silver deposits in eastern Russia continue paying off for one team of Vancouver miners.
B2Gold Corp. (TSX:BTO), which is fronted by the former heads of Bema Gold Corp., announced Friday an agreement to sell its right to acquire an interest in two prospective Russian precious metals deposits to Kinross Gold Corp. (TSX:K).
The deal is worth US$33 million in cash up front, plus contingent payments of US$15 million for each million ounces of gold Kinross finds at the Kupol East and West license areas up to a maximum of nine million ounces.
B2Gold will also receive payments equal to 1.5% of net smelter returns if and when production begins at the properties. Kinross holds the right to repurchase that royalty for US$30 million. In total, the deal could be worth as much as $198 million for B2.
B2Gold president and CEO Clive Johnson said: “The structure of this agreement with both an upfront payment and the contingent payments and royalty interest ensures that B2Gold will benefit immediately from a significant gain on its investment in this property.”
The deal marks the second time the company’s management team has struck it rich in Eastern Russia.
In 2007, the B2 team sold their former venture, Bema Gold, to Kinross for $3.5 billion.
Through that deal Kinross acquired the Kupol gold and silver mine, which contains approximately 2.5 million ounces of gold in proven and probable categories.
“These properties are immediately adjacent to our Kupol mine … and we’ve seen some encouraging drill results there and we like it,” Kinross spokesman Steve Mitchell said of the latest deal.
B2 also operates two mines in Nicaragua.
During the last week the company’s shares were valued between: $1.44 and $1.47; 52-week high: $1.92; 52-week low: $0.63.