Why the focus is on M&A in the gold sector - B2Gold's Clive Johnson
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(Kitco News) - B2Gold CEO Clive Johnson said mergers and acquisitions will continue.
Johnson spoke to Kitco Mining correspondent Paul Harris at PDAC in March.
In February B2Gold (BTO.TO) announced that it would acquire Sabina Gold & Silver Corp for C$1.1 billion ($823.66 million). The deal is expected to close in April. Sabina was advancing its Back River Gold Project in Nunavut, Canada.
Johnson said Sabina was a good fit within his B2Gold. Johnson admitted that Sabina may have preferred not to do the deal but may have lacked the means to see the project through, and the number of companies that could take on the project were limited.
"I'm sure it was a bittersweet decision for them," said Johnson. "In some ways I've been there before...when you're a single asset company trying to finance a gold mine, the financing terms can be challenging or at least relatively expensive. With our strong balance sheet, we were able to come in and basically take over."
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Looking at the gold sector overall, Johnson said there is a change.
"It's definitely a bit of a transition," said Johnson. "There's several gold producers today that don't have a CEO, for example. I think there's going to be continued focus on M&A and that's a good thing."
After Sabina Johnson said B2Gold won't be doing that many deals.
"You won't see us do a lot of M&A from here for a period of time as we digest what we're doing."
Coverage of PDAC 2023 sponsored by Uranium Energy and GoldMining.