Snowline Gold (SGD.C) has confirmed B2Gold (BTG, BTO.TO) will be at the back end of a flow-through financing whereby the company will raise just over C$19M at a price of C$4.86 per flow through share. This is a double win for Snowline: it is able to raise money at a substantial premium to the current share price thanks to the classical flow-through structure. At the same time, it is attracting a cash flowing mid-tier producer which undoubtedly will have done its due diligence on Snowlines flagship project. The announcement of the strategic investment also mentioned B2Gold has already built a position of approximately 3 million shares through open market purchases.
And of course, for B2Gold this could be a welcome additional diversification from being a pure African operator. B2Gold is already in the final stages of completing the acquisition of Sabina Gold and Silver (SBB.TO) and gaining exposure to this Yukon-based project will help to diversify away from Africa. The continent has served B2Gold well, but perhaps it’s time to move on.
Disclosure: The author has no position in Snowline Gold or B2Gold. Please read our disclaimer.
