B2Gold (BTO-T) is increasing its foothold in Nicaragua by taking full ownership of its joint-venture gold properties, and earning into two more projects.
The junior inked an agreement with joint-venture partner Radius Gold (RDU-V) to increase its 60% stake in the Trebol and El Pavon gold properties to 100%, by paying $20 million in shares.
Radius’ shares jumped 19% to close the day of the news at 34¢.
B2Gold also plans to pay Radius US$10 per oz. gold on 40% of any reserves in excess of 500,000 oz. on the properties. So far, the partners have not tallied any resources or reserves for the projects.
B2Gold earned a 60% interest in the two properties by spending US$4 million in exploration. Roughly half of the money was spent in a drill program last year, which indentified that the Trebol property in Nicaragua’s northeast could be amenable to open-pit mining.
This likely played a part in B2Gold’s decision to boost up its ownership stake.
The company carried out a US$2.1-million program in 2011 to drill over 3,000 metres at Trebol. The program focused on three zones of low sulphidation gold mineralization in altered volcanic rocks striking more than 5 km.
In May 2011, B2Gold said the project could “host, at or near surface, shallow-dipping gold mineralization that could potentially be mined with very low strip ratios.”
Program highlights include 11 metres grading 8.39 grams with 7 metres of 13.08 grams, and 29 metres of 1.96 grams gold.
In August, trench sampling on the Trebol East zone outlined a north- to south-trending mineralized zone at least 1.5 km long.
In February Radius said B2Gold is planning a 2,000-metre program for the new Trebol East targets.
For Pavon, B2Gold slated US$300,000 last year to drill 1,000 metres. The project hosts several veins extending 6 km in strike length. The drill program was designed to test the viability of open-pit mining a portion of the veins to provide feed for the mill at B2Gold’s Limon mine. The flagship Libertad mine is B2Gold’s only other mine in the country.
B2Gold has also agreed to earn a 60% stake in Radius’ San Jose and La Magnolia properties.
For 2012, Libertad is forecast to produce 102,000 to 110,000 oz. at an operating cash cost of US$550 to US$575 per oz., while Limon is expected to churn out 48,000 to 50,000 oz. at a cash cost of US$700 to US$725 per oz.