130,000 oz of Gold / year - Q4 2009
Exploration & production. Properties in Nicaragua, Colombia, Panama & Russia
Message: B2Gold and Central Sun Sign Binding Agreement
| February 2, 2009 | |
| B2Gold and Central Sun Sign Binding Agreement | |
|
VANCOUVER, BRITISH COLUMBIA and TORONTO, ONTARIO--(Marketwire - Feb. 2, 2009) - B2Gold Corp. (TSX:BTO) ("B2Gold" or the "Company") and Central Sun Mining Inc. (TSX:CSM)(NYSE Alternext US:SMC) ("Central Sun" or "CSM") announce that they have signed a binding agreement (the "B2Gold Transaction") to combine the two companies at the agreed exchange ratio of 1.28 B2Gold shares per Central Sun share, which represented a purchase price of approximately Cdn$0.65 per Central Sun share using closing share prices on January 26, 2009 and represented a 45% premium over the CSM closing price on January 26, 2009. Based on the January 30, 2009 closing price of B2Gold on the TSX of Cdn$0.83 per share, the transaction was valued at approximately Cdn$1.06 per CSM share for a total transaction value of Cdn$66.8 million. The combination of B2Gold and Central Sun will result in B2Gold commencing with initial production of approximately 45,000 ounces of gold per year and a planned production of approximately 130,000 ounces of gold per year following completion of the Orosi Mill Project scheduled for the fourth quarter of 2009. The Central Sun Board of Directors has unanimously recommended that Central Sun shareholders vote in favour of the B2Gold Transaction. Further, CSM officers, directors and shareholders who hold approximately 13.5% of the outstanding shares have entered into lock-up agreements with B2Gold, pursuant to which they will vote their shares in favour of the B2Gold Transaction. In connection with the B2Gold Transaction, B2Gold and CSM will enter into a convertible debenture agreement, pursuant to which CSM will issue to B2Gold a convertible debenture in the amount of up to Cdn$10 million on a subordinated basis. CSM will use the proceeds of the debenture to fund immediate working capital requirements and development expenditures at the Orosi Mine to permit commissioning of the mill and restart of operations in the fourth quarter of 2009. The debenture will be repayable 30 days after any termination of the agreement to effect the B2Gold Transaction. A portion of the Cdn$10 million debenture is convertible at the option of B2Gold at any time at an exercise price of Cdn$0.60 per share for up to 9.9% of the issued and outstanding shares of CSM at the time of conversion. Completion of the convertible debenture agreement is subject to the satisfaction of certain regulatory requirements. Clive Johnson, President and Chief Executive Officer of B2Gold, stated, "We are pleased to have signed this agreement, which has received enthusiastic market support and upon completion will immediately transform B2Gold into a producing gold company and allow our team's financial and technical resources to combine with Central Sun's strong team and add value to Central Sun's operations and projects." Peter Tagliamonte, President and Chief Executive Officer, stated, "The market's reaction to the B2 Transaction has been overwhelmingly positive for both groups of shareholders. B2Gold has an exceptional foundation of exploration and mining professionals and is led by one of the most entrepreneurial and experienced management teams in the junior gold producer space. This is an exciting period and represents a great opportunity for CSM shareholders who will own a significant stake in B2Gold." Conference Call A conference call will be held on Tuesday, February 3rd, 2009, 11 a.m. (Toronto)/8:00 a.m. (Vancouver) to discuss the B2Gold Transaction. Please use the following information to access the call: In Vancouver: 604-899-4201 In Toronto: 416-883-7132 Toll Free: 888-205-4499 Pass code: 56742# B2Gold Transaction Highlights - Approximately Cdn$55 million in Cash and Cash Equivalents at January 25, 2009, which is sufficient to fund the capital expenditures required to achieve and sustain gold production of 130,000 ounces per year; - Management from B2Gold and Central Sun with their combined extensive mine exploration, development, financing and operating experience; and - Strategic position and management experience to leverage continued consolidation in the gold industry. - A strong portfolio of mining, development and exploration assets. Upon completion of the B2Gold Transaction, B2Gold will have approximately 245 million common shares issued and outstanding, with former Central Sun shareholders holding approximately 33% of the issued and outstanding common shares of the combined company. B2Gold Transaction Details - Update The B2Gold Transaction is subject to, among other things, the parties entering into a definitive agreement by February 6, 2009, the receipt of all necessary regulatory and court approvals and obtaining shareholder approval of the B2Gold Transaction at special meeting of the Central Sun shareholders to be held no later than April 30, 2009. Closing of the B2Gold Transaction is set to occur by no later than April 30, 2009. B2Gold's financial advisor is Genuity Capital Markets and its legal counsel is Lawson Lundell LLP. Central Sun's financial advisor is Macquarie Capital Markets Canada Ltd and its legal counsel is Cassels Brock & Blackwell LLP. The December 24, 2008 letter agreement between Central Sun and Linear Gold Corp. regarding their previously proposed business combination has been terminated in accordance with its terms and Central Sun will be making a Cdn$1,000,000 termination payment to Linear Gold. |
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