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Canadian bullion miner B2Gold will sell its Kiaka project, in Burkina Faso, to Australia-listed West Africa Resources (WAF) for cash and shares, the company announced on Monday.

B2Gold will sell 100% of Volta Resources, the holder of an 81% interest in the Kiaka gold project, for $450 000 in cash paid upon execution of the agreement, $45-million (50:50 split between cash and shares) on closing, and $45-million (in cash or shares) on the earlier of the start of construction at the project or completion of a positive feasibility study.

B2Gold would also receive a 2.7% net smelter return (NSR) royalty interest on the first 2.5-million ounces of gold produced, reducing to 0.45% on the next 1.5-million ounces.

WAF has a strong reputation of being a solid operator in Burkina Faso, said B2Gold CEO Clive Johnson.

“With its existing local infrastructure and operating experience, [WAF] is well positioned to move the Kiaka project forward in a timely and cost-effective manner,” he said, noting that through its shareholding in WAF and royalties, B2Gold would continue to benefit from the future development of Kiaka and Toega.

B2Gold has entered into an amended and restated agreement with WAF and GAMS-Mining F&I, pursuant to which it had agreed to sell to WAF 100% of the shares of Kiaka Gold, the holder of the Toega project.

B2Gold would receive a cash payment of $18-million, half of which had been received, on the first 1.5-million ounces produced at Toega, a 2.7% NSR until such time as the royalty payments total $22.5-million and thereafter a 0.45% NSR royalty interest.