B2Gold Corp. signs Merger Implementation Agreement with Papillon Resources Limited

— Photo courtesy Proactive Investor Australia

Vancouver-based B2Gold Corp. (TSX: BTO, NYSE MKT: BTG, NSX: B2G) (“B2Gold”) has announced that it has entered into a definitive Merger Implementation Agreement (“Merger Agreement”) with Papillon Resources Limited (“Papillon”), pursuant to which B2Gold and Papillon have agreed to combine the two companies at the agreed exchange ratio of 0.661 B2Gold common shares for each Papillon ordinary share held (“Merger Consideration”).

The Merger Consideration represents a purchase price of approximately A$1.72 per Papillon share and values the transaction at approximately US$570 million. Papillon has been in a trading halt (which has extended into a suspension of trading on ASX) since May 26, 2014, following receipt of an indicative non-binding proposal from B2Gold on May 24, 2014, which included a proposed merger ratio. While the Papillon shares have not been trading since May 23, 2014, the B2Gold share price has fallen since that date due to a combination of the gold price volatility and media speculation surrounding this transaction.

The combination of B2Gold and Papillon will result in a company with a significant growth profile beyond its three operating mines, which collectively produced 366,000 ounces of gold in 2013 at a cash cost of US$681 per ounce and an all in sustaining cost of US$1,064 per ounce. B2Gold’s production is projected to increase to approximately 550,000 ounces by 2015 as the low cost Otjikoto mine in Namibia is scheduled to commence gold production in late 2014.

The combined company will be focussed on furthering the development of the Fekola project in Mali, and continuing to operate B2Gold’s existing Masbate gold mine in the Philippines and Limon and La Libertad gold mines in Nicaragua. Further, B2Gold will possess a strong growth profile through its Otjikoto project, the Kiaka project in Burkina Faso and its Gramalote project (51% AngloGold Ashanti/49% B2Gold joint venture) in Colombia. B2Gold will have the management, development, construction, operational and in-country experience combined with the funding capacity to optimise the development of Fekola for the benefit of all shareholders.

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. In addition, B2Gold has a highly regarded and experienced exploration team that sees significant exploration potential at the Fekola project, in addition to B2Gold’s existing assets.
“At B2Gold, we are excited about the merger with Papillon as it will add the high grade Fekola project to our rapid growth as a profitable gold producer. We believe this merger will bring great value to all shareholders and we congratulate Papillon’s strong technical team on advancing the impressive Fekola project to a robust prefeasibility study and look forward to working together to advance the project to production” said Clive Johnson, President and Chief Executive Officer of B2Gold.

“The combination of Papillon and B2Gold provides Papillon shareholders with the opportunity to gain immediate exposure to a significant, growth orientated and profitable producer with diversified operations whilst still retaining material exposure to the upside potential of Fekola. B2Gold’s track record of successful mine development and operation, coupled with its balance sheet, cashflows and funding capacity will de-risk the development of Fekola and should maximize the value of the project for both Papillon and B2Gold shareholders,” commented Mark Connelly, Managing Director and Chief Executive Officer of Papillon.