B2Gold (TSX:BTO), a Canadian gold producer, has finalized a deal to obtain full ownership of the Gramalote gold project in Colombia. This acquisition involves purchasing the 50% stake of the project previously held by AngloGold Ashanti (NYSE:AU) with the transaction priced at $60 million.

The Gramalote gold project, located  124km to the northeast of Medellin, underwent a pause in development during August of the previous year. This decision was due to preliminary outcomes from an optimized feasibility study, indicating that the project wasn’t meeting the joint venture’s criteria for mine development. Following this, the partnered companies debated over the project’s future. They eventually settled on selling Gramalote as the most suitable choice for both. However, they were unable to locate a third-party buyer.

B2Gold has clarified its intentions post-acquisition, emphasizing the advantages of bringing Gramalote under a singular ownership. This move is expected to pave the way for examining more affordable and higher-yielding developmental opportunities. The company highlighted that until now, the approach towards Gramalote was viewing it as a large-scale project with the potential to significantly increase production for both partnering entities. With this consolidation, B2Gold, headquartered in Vancouver, is set to delve into exploring diverse, smaller-scale developmental options in pursuit of cost-efficiency. Furthermore, a fresh study is on the horizon, scheduled to commence in the year’s last quarter, aiming for a preliminary assessment by mid-2024.

In terms of resource augmentation, B2Gold’s possession of Gramalote will incorporate an additional 2.11 million gold ounces of indicated mineral resources and 0.74 million gold ounces of inferred mineral resources.

AngloGold Ashanti, on the other hand, perceives this sale as an opportunity to sharpen its concentration on operational assets and potential projects ripe for development. The company shared these sentiments in a distinct announcement. Alberto Calderon, the Chief Executive Officer, expressed the company’s enduring dedication to Colombia, especially in light of their promising Quebradona copper and gold project. He stated, “AngloGold Ashanti remains a committed, long-term investor in Colombia with our exciting Quebradona copper and gold project and we look forward to playing a key role in developing of a modern, responsible mining sector in the country.”

The payment structure for the transaction has been broken down, with B2Gold scheduled to remit $20 million upon finalizing the deal. The remaining amount will be disbursed in segments, contingent on the attainment of specified milestones. An intriguing clause specifies that if the commercial production doesn’t kick off within half a decade post-transaction, B2Gold will owe nothing.

Gramalote holds a special place for B2Gold as its inaugural project during its exploration company phase. It made headlines in 2015 when it secured the first environmental permit in Colombia after a long hiatus of 35 years. This authorization presented a three-year window to address socio-environmental concerns, notably the relocation of artisanal miners and certain locals. Gramalote has also been dealing with a mining rights conflict with Canada’s Zonte Metals, which is still ongoing.