10:17 AM EDT, 06/06/2024 (MT Newswires) -- B2Gold Corp. ( BTG ) was at last look down near 1% in Canada as it entered Thursday into a purchase and sale agreement to sell a portfolio of 10 precious and base metals royalties to Sandbox Royalties Corp, a private, returns-focused metals royalty company. In connection with this, Sandbox has been renamed Versamet Royalties Corporation.

On impact, National Bank said it would have preferred cash consideration, but it noted BTO retains exposure to the upside through Versamet and the move "helps unlock value of royalties gone unrecognized by market". Overall the bank ascribes a neutral bias. National maintained an Outperform and C$6.00 target

Under the terms of the agreement, a statement noted, Versamet will acquire ownership of the royalties and as consideration will issue 153.2 million common shares to B2Gold ( BTG ) at a price of C$0.80 per share, representing an equity ownership interest in Versamet of 33.0% valued at approximately US$90 million.

The royalties are comprised of the following: 2.7% net smelter return royalty on the Kiaka Gold Project, owned by West African Resources Ltd.; and 2.7% NSR royalty on the Toega Gold Deposit, owned by West African Resources Ltd.; and 2.0% net profit royalty on the Quebradona Project, owned by AngloGold Ashanti Ltd.; and 2.0% NSR royalty on the Mocoa Project, owned by Libero Copper & Gold Corp. ( LBCMF ); and 1.5% NSR royalty on the Primavera Project, owned by Calibre Mining Corp. ( CXBMF ); and five additional exploration stage royalties.

Thursday's statement noted B2Gold ( BTG ) has retained ownership of the 22.5% silver royalty on Glencore's Hackett River project. Separately, Versamet owns a 2.0% NSR royalty on Glencore's Hackett River project. B2Gold ( BTG ) said it will "continue to explore value maximizing alternatives" for the B2Gold Hackett River Royalty.

"This strategic partnership provides B2Gold ( BTG ) with an attractive opportunity to unlock the value of our royalties which have gone largely unrecognized by the market and were not a core part of our business," said Clive Johnson, President and CEO of B2Gold ( BTG ). "As a significant shareholder, B2Gold ( BTG ) is pleased to retain meaningful upside exposure and leverage to Versamet as its experienced management team stewards its strengthened asset base and continues executing on its growth strategy to create future shareholder value."

Thursday's statement noted the closing of the first phase of the transaction occurred on June 5, 2024, and included the royalties on the Kiaka Gold Project, the Toega Gold Deposit, the Primavera Project, and two exploration stage royalties. In connection with the first phase closing, B2Gold ( BTG ) received 122.0 million shares of Versamet valued at approximately $72 million. The remaining royalties are subject to various right of first refusal or right of first offer provisions, which are expected to lapse or be exercised within the next 60 days, at which time the closing of the second phase of the transaction is expected to occur.

In connection with the closing of the first phase of the transaction, the parties have entered into an Investor Rights Agreement which, among other customary terms and conditions, entitles B2Gold ( BTG ) to nominate one member to Versamet's Board of Directors and pro rata participation rights with respect to future capital raises. B2Gold's ( BTG ) strategic partnership will provide ongoing exposure to Versamet's royalty portfolio, which now includes 28 royalties, two of which are currently cash flowing, and several of which are expected to be cash flowing in the near term.

Price: 3.72, Change: -0.04, Percent Change: -0.93