TORONTO-listed B2Gold is looking for new takeover targets and expects to do a deal fairly soon, said the firm’s CEO Clive Johnson
“There’s lot of opportunities for us to do friendly takeovers as we have done all along in our history. Let’s watch this space for the next three months or so,” he said in an interview with Miningmx on the sidelines of the Mining Indaba conference.
Johnson formed B2Gold in 2007 and has grown aggressively through deal-making. The company currently produces just over one million ounces of gold annually of which some 570,000 oz comes from the Fekola mine in Mali which B2Gold acquired when it took over Papillon Resources in 2014. Its other operations include the Otjikoto mine in Namibia and the Masbate mine in the Philippines.
Said Johnson: “Because we are actually producing gold and making good money, we tend to get a better rating in the market than development companies which are trying to build or finance a project.
“We are always looking and we are looking for some more geographical diversification. We are a Canadian-based company and we would love to do something in North America.
“We have so far not found the right opportunity at a reasonable price. Part of the problem is that other companies have been prepared to overpay for projects but we just won’t do that”.
He added: “We have shown time and again the ability to go to someone who cannot raise money on reasonable terms to build their mine or has never built a mine before. Their shares are often not performing well as a result.
“That provides the opportunity to pay them a premium. Sometimes people in the M&A space get obsessed over paying premiums. I don’t care about premiums, I care about value”.
Johnson said he was “excited” about “a few potential opportunities” such as single asset companies that investors are unconvinced will be able to finance their projects on “reasonable terms”, especially in an inflationary environment, he said.
But could B2Gold itself become a takeover target in the current market environment where M&A activity seems to be picking up dramatically judging by recent deals like Gold Fields play for Yamana which was trumped by Agnico Eagle and Newmont’s current $16.9bn offer for Australian major Newcrest?
“It’s up to shareholders if someone makes an offer,” Johnson replied. “It’s possible for any public company to get taken over but in our case I think it would be unlikely.
“I don’t tend to worry about B2Gold being a takeover candidate. I think we have a very loyal shareholder base which is paying attention to what we do,” he said.
Johnson thinks another owner would struggle to replicate his success while accepting the shares of a larger predator would take away the potential growth in B2Gold.
“I think we have a lot of very happy shareholders who believe in our ability to keep increasing the value of the company not just because gold is going to go higher but because of the projects we have,” he said.