Bema Gold management returns to market with B2Gold

Vancouver – The former management team from Bema Gold is back with a new company that has one of the biggest exploration budgets in the junior mining industry.

B2Gold (BTO-V) completed an initial purchase offering of 40 million shares at $2.50 a share and, with $100 million in the coffers, debuted on the Venture Exchange on Dec. 6. Company president and CEO Clive Johnson is excited to be again at the head of a junior explorer.

“We’re back, we’re public, and we’re ready to hit the ground running,” Johnson says. Johnson was the CEO of Bema Gold, a junior explorer that grew into an international gold producer before being bought by Kinross Gold (K-T, KGC-N) for $3.5 billion in February. The management team from Bema decided to stay together as a group and try to replicate their success in a new company.

At B2Gold Johnson is joined by Roger Richer as vice president, Mark Corra as vice president of finance and CFO, Tom Garagan as vice president of exploration, and Dennis Stansbury and Ian MacLean as vice presidents.

For a nascent company B2Gold has an impressive project portfolio, stemming from partnerships with Kinross and AngloGold Ashanti (AU-N, AGG-A, ANGJ-J).

AngloGold holds the largest mineral rights land package in Columbia. The major’s goal in prospecting the under-explored country is to conduct a first-pass exploration program at each of its 500 anomalies to see if the anomaly has the potential to be a large-scale deposit. But the major did not want to simply desert the anomalies that showed smaller-scale potential, so it looked for an exploration partner.

“The way our arrangement with Anglo works, it they see something that’s interesting but that’s not their size, they send to us,” says Johnson. By ‘send it to us’, Johnson means B2Gold is required to complete 5,000 metres of drilling on the target, at which point Anglo has the right to back in for a 50% interest. If Anglo chooses not to exercise its right, B2Gold holds the property outright.

“It’s a creative joint venture agreement that means we can move ahead quickly and productively with Anglo’s enormous land package,” says Johnson. “And from our perspective, this isn’t roll-the-dice grassroots exploration a lot of these projects have seen rill holes already so essentially we get a lot of the upside of exploration without so much of the downside.”

At present, B2Gold has three projects underway in Columbia. The Gramalote gold property is 230 km northwest of Bogata. Exploration work has identified three target types on the property, including a ridge area that has seen 43 drill holes. Johnson thinks Gramalote has the potential to become a significant, open-pittable gold porphyry system, and the company is carrying the project to feasibility as project operator. B2Gold currently holds a 25% interest in the site, with a memorandum of understanding (MOU) with AngloGold to increase the interest to 51%.

The MiraFlores gold property has seen exploration attention from various groups over the past 20 years. Limited diamond drilling combined with metallurgical testwork indicate a medium-tonnage, low-grade gold occurrence amenable to bulk-tonnage mining and mineral extraction. B2Gold has the right to earn 51% in MiraFlores but has signed a MOU with AngloGold to increase its interest to 100%.

And the Quebradona property 220 km northwest of Bogata hosts five early-phase gold or gold-copper porphyry-type exploration targets. Again, B2Gold has an option to earn a 51% interest by completing 5,000 metres of drilling.

“Not only are we walking into some fantastic geologic opportunities but we’re also working with people who have a huge amount of experience in dealing with the political and permitting side of things,” Johnson says, in response to a question on the difficulties of working in Columbia. AngloGold has been working in Columbia for six years.

B2Gold plans to spend $50 million on exploration in Columbia over the next 12 months. The company plans to spend a further $10 million on exploring its other projects, which are in eastern Russia.

As part of the Bema takeover, Kinross acquired 54% of the Kupol East and West projects in Chukotka state, Russia. The licenses cover land adjacent to the high-grade gold and silver Kupol Mine that Bema had been developing since 2003. The Kupol Mine is schedule to being production in the second half of 2008.

Previous work by Bema and more recently by B2Gold on the Kupol East and West licenses outlined several prospective targets. Kupol West, which surrounds the original Kupol project area and represents an expansion of the existing property from 18 sq. km to 230 sq. km, covers the potential northern and southern extensions of the main Kupol vein. Kupol East lies 3.5 km east of Kupol West and covers an additional 194 sq. km of ground hosting five gold-silver prospects.

On its first day of trading, B2Gold traded 6.5 million shares. The debut share price of $2.50 fell 10.