B2Gold to buy AngloGold out of Gramalote
B2Gold has agreed to buy a 50% take in the Gramalote gold project in Antioquia, Colombia from AngloGold Ashanti for up to US$60 million to consolidate its ownership of the whole project.
The company will pay $20 million upon closing the transaction, an additional $10 million upon B2Gold announcing a Gramalote construction decision, $10 million upon commercial production beginning within five years of closing, $10 million on the first anniversary of commercial production and $10 million on the second anniversary of commercial production.
Gramalote hosts 2.11Moz of indicated resources and 740,000oz of inferred resources.
B2Gold, as project operator, said in August 2022 that the project does not currently meet investment thresholds for development due to cost inflation and the inability to define a higher-grade starter pit. The partners shelved a feasibility study with the project believed to have an after-tax internal rate of return of less than 20%.
The company envisioned production of 281,000ozpa over a 10.6-year mine life at an all-in sustaining cost of $744/oz following a capex of $925 million.
B2Gold said consolidating the project under one owner provides additional optionality to analyse lower capital intensity and higher return development opportunities. Its in-house projects team will now commence work on various smaller-scale project development plans to identify a higher-return project.
A review will include the facility size and location, power supply, mining and processing options, tailings design, resettlement, potential construction sequencing and camp design to identify potential cost savings to develop a smaller-scale project.
The results will allow the company to determine the optimal parameters and assumptions for a formal study to commence in the December quarter to complete an initial assessment by the end of the June quarter of 2024.
AngloGold
The deal concludes another disappointing chapter for AngloGold Ashanti in Colombia, a country where it was an exploration pioneer in the 2000s. Despite the company defining several multi-million-ounce deposits, its efforts to permit a mine have so far met with frustration.
The company suspended its 28Moz La Colosa gold project in Tolima in 2017 following a referendum in which the local population voted overwhelmingly to reject the project.
It has also battled permitting headwinds for its Quebradona copper-gold project in Antioquia, where environmental authorities shelved its environmental permitting process in October 2021. The US$1.2 billion project was slated to produce 137 Mlbpa of copper concentrate over a 22-year phase one mine life.
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