Clive-Johnson

Clive Johnson, CEO (B2Gold)

After two weeks of speculation, Clive Johnson’s B2Gold Corp has finally said it would buy Australia’s Papillon Resources Ltd for $570 million in B2Gold shares.

The offer price of A$1.72 ($1.59) per share represents a 21 percent premium to Papillon’s close on May 23, the last day the stock traded, or a 40% premium using the 20 day volume weighted average price of each of B2Gold (TSX) and Papillon (ASX). The difference reflects the fact that B2Gold shares have taken a hit in recent weeks since rumours since rumours began circling they were Papillon’s suitor.

Papillon owns the high grade Fekola gold project in Western Mali with measured and indicated (“M&I”) resources of 4.18 million ounces grading 2.40 g/t gold and inferred resources of 459,000 ounces grading 1.91 g/t gold.

Economic geologist Brent Cook has been covering the Fekola deposit and owns Papillon shares in his Exploration Insights newsletter. Mr. Cook said that Fekola was the best undeveloped gold project in West Africa.

“Papillon shares aren’t cheap but I’ll happily pay up for the best,” Mr. Cook commented to CEO.CA in a recent interview.

“B2Gold is one of the few mining companies with a proven in-house construction team with a track record of building high quality plants and infrastructure while reducing capital costs,” the company said in today’s news release.

B2Gold expects to grow from roughly 400,000 ounces of gold production this year to 900,000 ounces of production from 5 mines by 2017 based on current assumptions.

More: B2Gold Corp. Signs Merger Implementation Agreement with Papillon Resources Limited