As gold has been prized down through the ages, it is even more so now, with price levels around the $1,770 U.S. level per ounce this week, and some experts even projecting that figure to go as high as $2,000!
There still is money to be made from the precious metal, and a Canadian company announced some exciting news this week by going merger. Vancouver-based B2Gold Corp. (T.BTO) announced plans to acquire CGA Mining Ltd. and its mine in the Philippines through a friendly all-stock deal they value at $1.1 billion.
The combined company will have operating mines in Nicaragua and the Philippines and other properties at the development or exploration stage in Latin America and Africa, if the proposed deal gets the required approvals.
CGA, an Australian company that lists its shares in Canada as well, had a market value of $895 million prior to the announcement.
According to the Globe and Mail piece on this week’s announcement, "the deal comes at a time when takeovers have been few and far between in the mining sector, where companies are nervous about global economic turbulence and a slowdown in China, which has powered the global economy since the 2008/09 credit crisis spread around the world."
B2Gold already has two mines in Nicaragua and a strong portfolio of development and exploration assets in Nicaragua, Colombia, Uruguay and Namibia. B2Gold was founded in 2007 by the former executive and management team of Bema Gold Corporation. Bema grew from a junior explorer to an international gold producer that was acquired by Kinross Gold Corporation (T.K) through a $3.5-billion transaction in February 2007.
B2Gold's offer was for 0.74 shares for each CGA share.
The combined 2012 production of the two companies is expected to be 350,000 ounces, including 200,000 ounces from CGA's mine in the Philippines.
B2Gold stock closed around $4.23 on Friday, up 36 cents, or 9.3% from Thursday, as investors provided muscle to the overall gold sector. It’s still well below April’s 52-week high of $4.55, which plummeted to a gully of $2.64 in mid-May. The progress of the stock since the merger announcement provides ample proof that there is still strength to spare in the gold sector.
