B2Gold Corp. said Aug. 14 that the Malian government elected to acquire an additional 10% stake in the Fekola gold mine for US$47 million.
The August 2017 shareholder agreement gave the state a 10% free-carried interest in B2Gold's local Fekola SA subsidiary, which wholly controls the mine, as well as the option to acquire a further 10%. The option has now been exercised.
Mali's free-carried interest receives a priority dividend of 10% of Fekola SA's calendar net income, while the additional stake will be treated like that of regular B2Gold shareholders. Ordinary dividends are not payable by Fekola SA until intercompany loans totaling approximately US$700 million plus accrued interest have been repaid to B2Gold in full.
The US$47 million obligation of the state will be set up as a loan from B2Gold to the state. This loan will be satisfied by netting it off against any ordinary dividends receivable by the state for its second 10% stake in Fekola SA until the principal and interest are repaid.
Fekola accounts for 45% of B2Gold's projected 2018 gold production and produced 226,786 ounces of gold in the first half.