CGA/B2Gold

Documents
(SEDAR filing: 23 November 2012) Scheme Booklet of CGA Mining Limited ("CGA") for its acquisition by B2Gold Corp. ("B2Gold") (7132 K).
Summaries
Summary Under
Tax Topics - Public Transactions - Mergers & Acquisitions - Cross-Border Acquisitions - Outbound - Other
CGA acquisition by B2Gold for B2Gold shares
Overview

TSX-listed B2Gold will acquire all the shares of ASX-listed CGA under an Australian Scheme of Arrangement. Accordingly, CGA will become a wholly-owned subsidiary of B2Gold. The Scheme of Arrangement values the equity of CGA at approximately Cdn.$1.1 billion, representing approximately a 26% premium.

Scheme of Arrangement

Under the Scheme of Arrangement, B2Gold will acquire all the outstanding CGA shares on the basis of 0.74 B2Gold common shares for each CGA ordinary share. However, CGA shareholders resident in an "Ineligible Jurisdiction" (such as the UK or Netherlands) instead will receive the net proceeds of disposition of B2Gold which are issued to a CGA Nominee. Moreover, B2Gold shares issuable to CGA shareholders resident in Australia who otherwise would receive 1,000 or fewer B2Gold shares and elect to have such shares sold ("Electing Small Scheme Participants") will have those B2Gold shares issued to the CGA Nominee and sold by it, with the net proceeds paid (in Australian dollars) to them.

CGA options

It is a condition precedent to the Scheme of Arrangement becoming effective that by the final (second) court approval, all (29) holders of (5.4M) CGA options have agreed, subject to the Scheme of Arrangement becoming effective, that their options will be cancelled for cash consideration equal to their in-the-money value two trading days before the announcement date.

Canadian tax consequences

A Canadian-resident CGA shareholder who does not make a valid s. 85 election with B2Gold will recognize fair market value proceeds (no s. 85.1 rollover). An eligible holder (i.e., resident and non-exempt) generally must have provided a completed s. 85 election to B2Gold by 90 days after the effective date of the Scheme of Arrangement in order for B2Gold to jointly elect.

US tax consequences

While not free from doubt, US-resident holders generally will receive rollover treatment under the Code. B2Gold believes that it is not a PFIC, and CGA believes that it has not been a PFIC for its taxation years subsequent to 2009.