B2Gold (BTG) Inks Deal to Acquire Sabina Gold for $820M
B2Gold Corp. BTG announced that it entered an agreement to acquire Sabina Gold & Silver Corp in a deal valued at C$1.1 billion ($820 million). The agreement will give B2Gold its first mining assets in Canada.
In exchange for each Sabina share, B2Gold is offering 0.3867 of its share, valued at C$1.87 per share based on Feb 10 closing prices. That offer is at a 45% premium to the closing price of Sabina on the Toronto Stock Exchange on Feb 2, 2023. On the same date, the parties signed the non-binding letter of intent. Upon completion, existing B2Gold shareholders and former Sabina shareholders will own roughly 83% and 17% of outstanding B2Gold Shares, respectively.
The transaction is expected to close in the second quarter, subject to regulatory approvals.
Under the agreement, B2Gold will receive full ownership of Sabina’s Back River Gold District, which includes five mineral claims spanning 80 km. Among these, the Goose project is the most advanced, and is fully permitted and construction ready. It has been de-risked with substantial infrastructure already in place. BTG intends to increase production in the first five years of the mine life by accelerating the development of the Goose project's underground mine.
By combining B2Gold's stable production base with a high-grade, advanced development asset in a Tier-1 mining jurisdiction, the transaction will boost operational and geographic diversification. B2Gold plans to develop the Back River Gold District following the completion of the transaction.
B2Gold’s total gold production for 2022 was 1,027,874 ounces (including 54,871 ounces of attributable production from Calibre), down 1.8% from the 2021 level. However, the reported figure was above the mid-point of the company’s 2022 guidance. This is the seventh year in a row that annual production guidance has been met or exceeded.
Annual consolidated gold revenues for 2022 were $1.73 billion. This compares to 2021 annual consolidated gold revenues of $1.76 billion. BTG sold 969,155 ounces of gold in 2022 at an average realized gold price of $1,788 per ounce. In 2021, the company sold 981,401 ounces at an average realized gold price of $1,796 per ounce.
Price Performance
B2Gold’s shares have lost 14.9% in the past year compared with the industry’s fall of 3.2%.
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Zacks Rank & Stocks to Consider
B2Gold currently carries a Zacks Rank #3 (Hold).
Some better-ranked stocks from the basic materials space are CalMaine Foods, Inc. CALM, Reliance Steel & Aluminum Co. RS and Teck Resources Limited TECK. CALM and RS currently flaunt a Zacks Rank #1 (Strong Buy), and TECK carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for CalMaine Foods’ fiscal 2023 earnings per share is pegged at $16.75, suggesting 515.8% growth from the year-ago reported figure. Earnings estimates have moved 106.8% north in the past 60 days. CALM has a trailing four-quarter earnings surprise of 15.3%, on average. Its shares have gained 27.9% in the past year.
The Zacks Consensus Estimate for Reliance Steel’s earnings per share is pegged at $28.65 for 2022, indicating a year-over-year growth rate of 29.5%. Earnings estimates have been revised 0.2% upward in the past 60 days. RS has a trailing four-quarter average surprise of 13.6%, on average. The company has gained 42.7% in a year.
The Zacks Consensus Estimate for Teck Resources Limited’s 2022 earnings per share is pegged at $7.06, suggesting 56.1% growth from the year-ago reported figure. Earnings estimates have moved 3.4% north in the past 60 days. TECK has a trailing four-quarter earnings surprise of 3.7%, on average. Its shares have gained 16.3% in the past year.
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