B2GOLD and Calibre Mining Join Forces IN Nicaragua Calibre Mining to Acquire El Limon and LA Libertad GOLD Mines B2GOLD to Become Calibre’S Largest Shareholder Calibre Announces Concurrent CDN$100 Million Equity Financing
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NEWS RELEASE
B2GOLD AND CALIBRE MINING JOIN FORCES IN NICARAGUA
CALIBRE MINING TO ACQUIRE EL LIMON AND LA LIBERTAD GOLD MINES
B2GOLD TO BECOME CALIBRE’S LARGEST SHAREHOLDER
CALIBRE ANNOUNCES CONCURRENT CDN$100 MILLION EQUITY FINANCING
Not for distribution to United States newswire services or for dissemination in the United States
July 2, 2019
Vancouver, British Columbia : B2Gold Corp. (TSX.BTO . NYSE AMERICAN: BTG. NSX:
B2G) ( “B2Gold”) and Calibre Mining Corp. (TSX -V: CXB) (the “Company” or “Calibre”)
(jointly the “Partners”) are pleased to announce that on July 2, 2019, the Partners entered into a
binding agreement (the “Agreement”) for B2Gold to restructure its interests in , and for Calibre
to acquire, the producing El Limon and La Libertad Gold Mines (the “Nicaragua Mines”), the
Pavon Gold Project and additional mineral concessions in Nicaragua (collectively, the
“Nicaragua Assets”) held by B2Gold for aggregate consideration of US $100 million (the
“Purchase Price ”), which Purchase Price will be paid with a combination of cash, common
shares and a convertible debenture (the “Transaction”). Following the completion of the
Transaction, B2Gold will own an approximat e 31% direct equity interest in Calibre . B2Gold’s
ongoing commitment to continuing involvement with the Nicaraguan operations will be secured
by its significant equity interest in Calibre, its right to appoint one director to the Board of
Calibre and its participation in an Advisory Board to the main Board of Calibre
The El Limon and La Libertad Mines have produced in excess of 1.4 million ounces of gold
since 2010. Their combined 2019 gold production is projected to be between 150,000 and
160,000 ounces (see: B2Gold MD&A for period ended March 31, 2019 filed on B2Gold’s profile
on SEDAR).
In connection with the Transaction, Calibre has entered into an agreement with Canaccord
Genuity Corp. and Sprott Capital Partners LP (together, the “Lead Agents ”) in re spect of a
private placement of up to 1 67,000,000 subscription receipts (the “Subscription Receipts”) for
gross proceeds of up to CDN$100 million (the “Concurrent Private Placement”).
The c losing of the Transaction will be subject to certain conditions i ncluding majority of
minority shareholder approval, the successful negotiation and execution of a definitive
agreement (the “Definitive Agreement”) by B2Gold and Calibre, the closing of the Concurrent
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Private Placement by Calibre and satisfactory due dilig ence by Calibre. In connection with the
closing of the Transaction, Calibre intends to apply to graduate to the Toronto Stock Exchange
(subject to Toronto Stock Exchange approval and meeting the initial listing requirements of the
Toronto Stock Exchange).
Clive Johnson, President and Chief Executive Officer of B2Gold stated: “We are pleased to join
forces with Calibre in Nicaragua to continue our legacy of 10 years of responsible exploration,
development and gold production . We are pleased to be come a large shareholder of Calibre and
through our roles on their Advisor y Board and Board of Directors, we look forward to assisting
Calibre’s experienced executive team and the combined B2Gold /Calibre management team in
Nicaragua.
With Calibre and the combined Nicaraguan management team focussing on the El Limon and La
Libertad Mines and other opportunities, B2Gold will focus on continuing to optimize responsible
production at our other existing mines in Mali, Namibia and the Philippines as well as advancing
our impressive pipeline of development and exploration projects. In addition, B2Gold will
continue to pursue additional greenfield and advanced exploration opportunities.”
B2Gold’s History and Continuing Legacy of Success in Nicaragua
B2Gold was created in 2007 by the previous management of Bema Gold Corp. In 2009 , B2Gold
acquired the El Limon and La Libertad Mines in Nicaragua. B2Gold significantly improved the
operations and economics of the El Limon Mine and , in addition, constructed a mill facility and
commenced profitable gold production at the La Libertad Mine and realized significant
exploration success around both mines. Over the last 10 years the Nicaragua Mines have
produced in excess of 1.4 million ounces of gold, with B2Gold investing more than $56 0 million
in capital and exploration in Nicaragua over that period.
Since 2010, the La Libertad and El Limon Mines have been an important contributor to the local
and national economies, responsible for a large percentage of the country’s gold exports. Gold
now ranks third in the country’s main exports.
In addition to being Nicaragua’s largest exporters of gold, the La Libertad and El Limon Mines
are collectively also the largest individual exporting operations in the country.
B2Gold Nicaragua is a major employer in Nicaragua with La Libertad and El Limon mines
generating over 2,800 direct and contract jobs. Approximately 90% of B2Gold Nicaragua’s
direct employees are from the local communities around La Libertad and El Limon mines and
fewer than 1% of direct employees are expatriates.
Russell Ball, Executive Chairman of Calibre stated : “We are delighted to be able to partner with
B2Gold on the acquisition of the El Limon and La Libertad Mines and welcome B2Gold as a
significant shareholder of Calibre. We see continuing the ongoing commitment to the current
management team and many long -term employees as fundamental to the future success of our
company and are grateful to have B2Gold’s unwaverin g guidance and involvement in carrying
out this responsibility.
Calibre has been actively exploring in Nicaragua for the past ten years and has enjoyed excellent
support from our employees, suppliers and the Nicaraguan government . Calibre is fully
committed to maintaining B2Gold’s high standards of responsible mining, government relations,
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health, safety and environment and corpora te social responsibility that B2Gold established at its
Nicaraguan operations in partnership with its management team, employees and contractors.
Maintaining these high standards is an essential benefit for all stakeholders.”
Transaction Highlights
B2Gold has disclosed 2019 consolidated production guidance for the Nicaragua Mines of
150,000 to 160,000 ounces of gold ( see: B2Gold MD&A for period ended March 31, 2019 filed
on B2Gold ’s profile on SEDAR ). The Nicaragua Mines also contain exploration potential,
particularly at El Limon , where B2Gold recently discovered the high -grade El Limon Central
Gold Zone, which hosts a high -grade open-pit inferred mineral resource of 5.1 Mt grading 4.92
g/t gold conta ining approximately 812,000 oz of gold ( see: B2Gold News Release dated
February 23, 2018 filed on B2Gold’s profile on SEDAR).
Other potential benefits of the Transaction for Calibre include:
• Immediate gold production and cash flow : The acquisition est ablishes Calibre as a
gold producer with exceptional exploration potential in a jurisdiction that Calib re and
B2Gold have been successfully operating in for over 10 years.
• Near-term growth potential : There is p otential for near-term low capital e xpansion at
El Limon in order to reduce costs , increase production to 75,000 ounces of gold per year
for an initial 10 years and extend the mine life by an additional 11 years with the
inclusion of historical tailings re -treatment. Once expanded, El Limon is estimated to
generate over US$235M of after -tax free cash flow (using US$1,300/oz gold price) (see
B2Gold News Release dated October 22, 2018 filed on B2Gold’s profile on SEDAR).
• Substantial increase in Calibre’s resource base : The acquisition will a dd measured
and indicated resources of 1, 135,000 ounces of gold (for details of resource category,
tonnages and grade see Tables 1 and 2 below) and inferred resources of 1,473,000 ounces
of gold (for details of tonnages and grade se e Tables 1 and 2 below) to Calibre’s current
inferred resources of 2,400,000 gold -equivalent ounces (see: Iamgold Corporation and
Calibre Mining Corp. Technical Report on the Eastern Borosi Project, Nicaragua dated
May 11, 2018, Primavera Project Resource Estimate dated January 31, 2017, Calibre
Mining NI 43 -101 Technical Report and Resource Estimation on the Cerro Aeropu erto
and La Luna Deposits, Borosi Concessions, Nicaragua dated April 11, 2011 filed on
Calibre’s profile on SEDAR) (see: Table 1 below).
• Proven management team and board: The new management team and board of
directors have extensive experience in the mining industry with a long history of
substantial s takeholder value creation and proven capabilities in financing, acquiring,
discovering, developing and operating open-pit and underground mines.
• Compelling value proposition : Calibre will be well -positioned with leading leverage
among junior gold producer equities with significant exploration potential and an
attractive valuation on net asset value, cash flow, resource, and production multiples.
• Establishes a Strategic Partnership wi th B2Gold: Following the restructuring of
B2Gold’s investment in its Nicaraguan operations, B2Gold will own a direct approximate
31% equity interest in Calibre. B2Gold’s ongoing commitment to continuing
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involvement with the Nicaraguan operations will be secured by its significant equity
interest in Calibre, its right to appoint one director to the Board of Calibre and its
participation in an Advisory Board to the main Board of Calibre. B2Gold’s exceptional
track record and expertise in finding, acquiring , building and operating mines will be of
significant benefit to Calibre as Calibre seeks to expand its gold production and resource
base.
• Execution of a gold consolidation strategy: The acquisition establishes a producing
platform to continue to acquire quality gold production assets and development
opportunities. Shareholders will be well -positioned to participate in future value creation
and growth opportunities.
Cautionary Statement
The reader is advised that the El Limon Central results summarized in this news release are
intended to provide only an initial, high -level review of the project potential and expansion
options. The initial mine plans and economic models include numer ous assumptions and the use
of Inferred Mineral Resources. The El Limon Central expansion study is preliminary in nature,
and it includes Inferred Mineral Resources that are considered too speculative geologically to
have the economic considerations applie d to them that would enable them to be categorized as
Mineral Reserves. There is no guarantee that Inferred Mineral Resources can be converted to
Indicated or Measured Mineral Resources and, consequently, there is no guarantee the
production estimates or project economics described herein will be achieved.
Management Team and Board of Directors
In connection with the Transaction, Calibre intends to make amendments and supplements to its
management team and board of directors . Calibre anticipates it will benefit from the proven and
experienced board and executive management team , focused on stakeholder value creation . The
management team of Calibre is expected to include:
• Russell Ball: Chief Executive Officer
• Darren Hall: SVP and Chief Operating Officer
• John Seaberg: SVP and Chief Financial Officer
• Greg Smith: VP Exploration
• Ryan King: VP Corporate Development & IR
The Calibre management team will be supported by an experienced Board of Directors including
the former Newmarket Gold founders Blayne Johnson, Douglas Forster, Raymond Threlkeld,
Doug Hurst and Ed ward Farrauto, and a B2Gold nominee . Blayne Johnson will act as Non -
Executive Chairman upon closing of the Transaction and an Advisory B oard will be established
that includes two representatives each from B2Gold and Calibre.
The relevant experience of the proposed Calibre management team is included in Appendix A.
El Limon
B2Gold owns a 100% interest in El Limon , which is an open pit and underground gold mine
located approximately 100 km northwest of Managua, the capital of Nicaragua. A major new
high-grade gold discovery at El Limon was announced by B2Gold in February 2018 at Limon
Central where open -pit mining h as commenced with an initial Inferred Resource of 5.1Mt
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grading 4.92 g/t Au containing 812,000 ounces of gold. With the deposit open along strike and
at depth, significant exploration potential remains across the property.
In 2018, El Limon processed 447,961 tonnes grading 3.64 g/t gold with a recovery rate of 94.9%
and produced 49,629 ounces.
In 2019, B2Gold ’s production guidance for El Limon is 55,000 to 60,000 ounces with cash
operating cost guidance of between US$720 and US$760 per ounce and All -In Sustaining Costs
(AISC) guidance of US$1,005 to US$1,045 per ounce, with the second half anticipated to benefit
from increased production and lower costs.
La Libertad
B2Gold owns a 100% interest in La Libertad , which is an open pit and underground gold mine
located in the La Libertad -Santo Domingo Region of the Department of Chontales in Central
Nicaragua, approximately 110 km east of Managua. The annual mill throughput is
approximately 2,250,000 tonnes and current gold recoveries are approximately 94% to 95%.
In 2018, La Libertad mine processed 2,250,687 tonnes grading 1.19 g/t gold with a recovery rate
of 94.4% and produced 80,963 ounces of gold.
Most recently, and significantly, the environmental permit for the Jabali Antena Open Pit was
received in June 2019, and as of June 28, 2019, all resettlement, artisanal miner and land
possession issues have been resolved and development of the Jabali Antena Open Pit has
commenced.
B2Gold’s 2019 guidance for La Libertad is 95,000 to 100,000 ounces at cash operating costs of
between US$840 and US$880 per ounce and AISC of US$1,150 to US$1,190 per ounce. The La
Libertad project including the surrounding exploration concessions has numerous excellent
exploration targets that can expand the current resource base on the 155.37 km2 property.
Table 1: El Limon and La Libertad Reserve and Resource Estimates
Description
Tonnes
Gold Grade
(g/t)
Contained Gold
Ounces
La Libertad – Probable 1,100,000 2.01 70,000
El Limon – Probable 600,000 3.97 70,000
Total Probable Mineral Reserves 140,000
La Libertad – Indicated 2,000,000 2.61 170,000
El Limon – Indicated 11,700,000 2.40 910,000
Total Indicated Mineral Resources 1,080,000
La Libertad – Inferred 3,200,000 4.37 450,000
El Limon – Inferred 5,600,000 5.53 1,000,000
Total Inferred Resources 1,450,000
The information concerning El Limon and La Libertad is derived from for period ended March 31, 2019 and filed
on B2Gold’s SEDAR profile on May 7, 2019 , MD&A for the period ended March 31, 2018 and filed on B2Gold’s
SEDAR profile on May 9, 2018, B2Gold’s press release dated February 23, 2018, and t echnical report entitled NI
43-101 Technical Rep ort, La Libertad Mine, La Libertad Region, Nicaragua dated March 27, 2015 and filed on
B2Gold’s SEDAR profile on March 30, 2015. To the best knowledge, information and belief of Calibre, there is no
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new material scientific or technical information that wou ld make the disclosure of the mineral resource or reserves
inaccurate or misleading. Mineral Resources are not mineral reserves and do not have demonstrated economic
viability.
Pavon Gold Project
B2Gold owns 100% of the Pavon Gold Project, which is located approximately 150 km north of
La Libertad. Gold mineralization is characterized as a low -sulphidation, quartz epithermal vein
system. Gold mineralization is hosted in quartz vein and quartz vein breccia units with locally
high grade in stockwork zones. Gold Mineralization is currently hosted in two zones , El Pavon
Norte and El Pavon Central. Calibre believes that there remains significant exploration potential
at the Pavon Gold Project.
Table 2: Pavon Gold Resource Estimate
Description
Tonnes Gold Grade
(g/t)
Contained Gold
Ounces
Indicated Resources 290,000 5.82 55,000
Inferred Resources 130,000 5.50 23,000
All technical information related to the Pavon Gold Project is based on the B2Gold Annual Information Form dated
March 27, 2015, a copy of which is available under B2Gold’s profile on SEDAR.
Calibre’s Borosi Gold Project
Calibre has been operating in Nicaragua for 10 years and owns a 100% interest in o ver 518 km 2
of mineral concessions in the Borosi Gold Project in the Mining Triangle of Northeast Nicaragua
including the Primavera Gold-Copper Project. Calibre also has a Joint Venture with IAMGOLD
(currently Calibre 49%: IAMGOLD 51%) on the 176 km2 Eastern Borosi Gold Project where the
Joint Venture has outlined an inferred gold resource of 4.42Mt grading 5.72 g/t AuEq containing
812,000 oz AuEq (see: Calibre News Release, dated April 3, 2018 and filed on Calibre’s profile
on SEDAR ). Including Cali bre’s 49% interest in the IAMGOLD JV, Calibre ’s inferred
resources on the Borosi Gold Project total 2.44 mil lion oz AuEq in four deposits (see: Iamgold
Corporation and Calibre Mining Corp. Technical Report on the Eastern Borosi Project,
Nicaragua dated May 11, 2018, Primavera Project Resource Estimate dated January 31, 2017,
Calibre Mining NI 43 -101 Technical Report and Resource Estimation on the Cerro Aeropuerto
and La Luna Deposits, Borosi Concessions, Nicaragua dated April 11, 2011 filed on Calibre’s
profile on SEDAR).
Transaction Summary
Under the terms of the Transaction, Calibre is expected to acquire all of the outstanding
intercompany loans and shares of or amalgamate with, as the case may be, the following B2Gold
subsidiaries: Triton Minera S.A.; Desarrollo Minero de Nicaragua S.A. ( which in turn owns
100% of Cerro Quiros Gold S.A. ); Minera Glencairn S.A., and Minesa (Cayman) Inc. (which in
turn owns 100% of Minerales Nueva Esparanza S.A. ) (together, the “Nicaragua Subsidiaries”)
for aggregate consideration of US$100 million on a cash -free, debt -free basis. The Nicaragua
Subsidiaries are the registered and beneficial owners of the Nicaragua Assets.
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The Purchase Price under the Transaction will be payable as follows:
• On closing of the Transaction : US$40 million in cash; US$40 million in common shares
of Calibre (“Calibre Shares”) priced at CDN$0.60 per Calibre Share (such shares being
the “Upfront Consideration Shares”), provided that if the Concurrent Private Placement
or any other financing completed by Calibre concurrently with or prior to closing raises
funds at an offering p rice of less than CDN$0.60 per Subscri ption R eceipt or Calibre
Share, then such Upfront Consideration Shares to be issued to B2Gold shall be at such
lower price); and (iii); and a US$10 million convertible debenture (t he “Debenture”);
and
• 12 months from the closing of the Transaction: US$10 million in cash.
The principal amount owing under the Debenture will bear interest at 2% and will be payable in
cash on that date which is two years from closing of the Transaction (the “Maturity Date ”)
provided that (i) at any time pri or to the close of business on the last business day immediately
preceding the Maturity Date, the Debenture will be convertible at the option of B2Gold at a
conversion price equal to a price that is 25% above the price of the Upfront Consideration Shares
to be issued to B2Gold; and (ii) in the event that prior to the Maturity Date the volume weighted
average price of the C alibre Shares is equal to or greater than a 35% premium to the price per
share of the Concurrent Private Placement for 10 consecutive trading days on a recognized North
American stock exchange on which the majority of Calibre’s trading occurs, Calibre can force
conversion of the Debenture. The Debenture will be a direct, unsecured obligation of Calibre,
ranking equally with all other existing and future unsecured indebtedness of Calibre and will be a
non-voting security.
Shareholder Approval and Other Conditions of Closing
At present, B2Gold holds approximately 11.9% of the issued and outstanding Calibre Shares and
as such is considere d a “related party ” of Calibre under Multilateral Instrument 61 -101 –
Protection of Minority Security Holders in Special Transactions (“MI 61 -101”). Upon the
completion of the Transaction, B2Gold will hold approximately 31% of the issued and
outstanding Calibre Shares and assuming the conversion of the Convertible Debenture, will hold
approximately 35% of the issued and outstanding Calibre Shares. As such, the Transaction will
result in the creation of a “control person” of Calibre for the purposes of applicable securities
laws and will be considered a “Non-Arms Length Reverse Takeover ” of Calibre under TSX
Venture Exchange ( “TSXV”) Policy 5.2 – Changes of Business and Reverse Takeovers.
Accordingly, for Calibre, the Transaction will require the approval of a majority of the minority
of the votes cast on the resolution by Calibre shareholders present in person or represented by
proxy at the Calibre shareholder meeting.
Calibre will be exempt from the formal valuation requirement in section 5.4 of MI 61 -101 in
reliance on sections 5.5(b) of MI 61 -101 as no securities of the Company are listed or quoted for
trading on prescribed stock exchanges or stock markets.
In addition to shareholder approval, the Transaction is subject to satisfactory due diligence,
applicable regulatory approvals, the execution of a definitive agreement and the satisfaction of
other closing conditions customary in transactions of this nature, including the approval of the
TSXV. It is anticipated that the shareholder meeting will be held in September 2019.
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Investor Rights Agreement
Concurrently with the closing of the Transaction, Calibre and B2Gold will enter into an investor
rights agreement which will provide, among other things, that for so long as B2Gold holds at
least 10% of the issued and outstanding Calibre Shares, it will have pro rata participation rights
and piggyback registration rights. Further, until such time as B2Gold no longer holds 10% or
more of the issued and outstanding Calibre Shares , B2Gold must give Calibre prior written
notice of its intention to sell more tha n 1% of the then issued and outstanding Calibre Shares in
any 30-day period. Upon receipt of such notice, Calibre will have five business days to designate
the purchase of all or any portion of such shares, failing which, B2Gold will have the right to sell
any remaining shares for an additional 30 days. Additionally, for so long as B2Gold holds at
least 5% of the issued and outstanding Calibre shares, it will have the right to nominate one
director to the Calibre board of directors.
In connection with the closing and implementation of the Transaction, an Advisory Board will be
established and be comprised of two representatives from B2Gold and two representatives from
Calibre.
Private Placement Subscription Receipt Financing
In connection with the Transaction, the Lead Agents have entered into an agreement with Calibre
to complete a private placement , on a best efforts basis, of up to 1 67,000,000 Subscription
Receipts for gross proceeds of up to CDN$100 million. Each Subscription Receipts will be
issued at a price per Subscription Receipt of CDN$0.60 (the “Offering Price”).
In addition, Calibre has granted the Lead Agents an option (the “ Agent’s Option”) to increase
the size of the Of fering by up to an additional C DN$15 million of Subscription Receipts, at the
Offering Price. The Agent ’s Option shall be exercisable at any time up to 48 hours prior to the
closing of the Concurrent Private Placement.
It is anticipated that pursuant to the terms of a subscription receipt agreement (the “Subscription
Receipt Agreement ”) to be entered into among the Lead Agents, Calibre and a licensed
Canadian trust company or other escrow agent mutually acceptable to the Lead Agents and
Calibre (the “Escrow Agent”), the gross proceeds from the Concurrent Private Placement will be
delivered to and held by the Escrow Agent until such time as the release conditions set out in the
Subscription Receipt Agreement (the “Release Conditions ”) have been met. The Release
Conditions will include the completion, satisfaction or waiver of all conditions precedent to the
completion of the Transaction.
Upon the satisfaction of the Release Conditions, each Subscription Receipt will be automatically
converted, with out payment of any additional consideration into one Calibre Share. Of the
proceeds from the Concurrent Private Placement, US$40 million will be used to satisfy the cash
component of the Purchase Price payable on closing and the remaining proceeds of up to US$36
million will be used for mine operations , exploration, working capital, and general corporate
purposes.
If the Release Conditions are not satisfied on or before November 15, 2019, or prior to such date,
Calibre advises the Lead Agents or announces to the public that it does not intend to satisfy the
Release Conditions, the Subscription Receipt holders will be entitled to a return of the aggregate