B2Gold Corp. (TSX:BTO) (NYSE MKT:BTG) (NSX:B2G) (“B2Gold” or the
“Company”) is pleased to announce fourth quarter and full-year 2016
gold production and revenue as well as production and cash cost
guidance for 2017. All dollar figures are in United States dollars
unless otherwise indicated.
2016
Fourth Quarter
Highlights
- Consolidated gold production of 140,651 ounces, 7% (or 9,182
ounces) greater than the same period in 2015
- Gold revenue of $181.2 million on record sales of 151,524
ounces at an average price of $1,196 per ounce, an increase in
revenue of 30% (or $42.2 million) over the same period in 2015
- Fekola project mine construction is ahead of schedule for an
October 2017 production start and remains on budget
2016 Full-Year Highlights
- Record annual consolidated gold production of 550,423 ounces of
gold, achieving revised production guidance (of 535,000 to 575,000
ounces) and surpassing initial guidance (of 510,000 to 550,000
ounces)
- Masbate Mine achieved record annual gold production of 206,224
ounces, 17% (or 30,421 ounces) higher than 2015
- Otjikoto Mine achieved record annual gold production of 166,285
ounces, 14% (or 20,562 ounces) higher than 2015
- Record annual consolidated gold revenue of $683.3 million on
record sales of 548,281 ounces at an average price of $1,246 per
ounce
- Full-year consolidated cash operating costs are expected to be
near the low end of the reduced cost guidance range of between $500
and $535 per ounce (initial guidance range was between $560 and
$595 per ounce)
- Full-year AISC are expected to be near the low end of the
reduced guidance range of between $780 and $810 per ounce (initial
guidance range was between $895 and $925 per ounce)
- Signed a Euro 71.4 million Equipment Facility with Caterpillar
Financial SARL for the Fekola project (funding subject to
satisfaction of conditions precedent)
- Additional positive exploration drill results reported for the
Company’s Mali and Burkina Faso greenfield targets
- 2017 outlook provides for forecast annual consolidated gold
production of between 545,000 and 595,000 ounces, forecast cash
operating costs of between $610 and $650 per ounce and forecast
AISC of between $940 and $970 per ounce (including expected Fekola
pre-commercial production of between 45,000 and 55,000 ounces)
- 2018 outlook provides for very strong production growth, with
the planned first full-year of production from the Fekola project,
consolidated annual gold production is expected to increase
significantly and be between 900,000 and 950,000 ounces with cash
operating costs and AISC expected to approximate the Company’s 2016
revised cost guidance ranges (of $500 to $535 per ounce for cash
operating costs and $780 to $810 per ounce for
AISC)
2016 Operating Results
B2Gold achieved another record year of
consolidated gold production in 2016 (for the eighth straight year)
producing 550,423 ounces of gold, near the mid-point of its revised
production guidance range (of 535,000 to 575,000 ounces) and
surpassing its initial guidance range (of 510,000 to 550,000
ounces). Gold production for the year also increased by 12% (or
57,158 ounces) over 2015. The record performance in 2016 reflects
the record performances from the Company’s Masbate and Otjikoto
mines, both setting new annual production records in 2016. The
Company’s La Libertad Mine also met its production guidance, with
2016 production near the high end of its production guidance
range.
The Company’s 2016 year-end consolidated
financial statements will be released on March 16, 2017. Details of
the consolidated cash operating costs per ounce and all-in
sustaining costs (“AISC”) per ounce will also be released at that
time. However, the Company expects its full-year consolidated cash
operating costs per ounce to be near the low end of its revised
cost guidance range of between $500 and $535 per ounce (reduced
from the original guidance range of $560 to $595 per ounce).
Full-year consolidated AISC per ounce are also expected to be near
the low end of its revised cost guidance range of between $780 and
$810 per ounce (reduced from the original guidance range of $895 to
$925 per ounce).
In the fourth quarter of 2016, consolidated gold
production was 140,651 ounces, an increase of 7% (or 9,182 ounces)
over the same period last year.
Mine-by-mine gold production in the fourth
quarter and full-year 2016 was as follows:
Mine |
Q4 2016 Production
(ounces) |
Full-year 2016
Production(ounces) |
2016 UpdatedGuidance
(ounces) |
2016 Original
Guidance(ounces) |
Masbate |
48,633 |
206,224 |
200,000 – 210,000 |
175,000 – 185,000 |
Otjikoto |
46,846 |
166,285 |
160,000 – 170,000 |
160,000 – 170,000 |
La Libertad |
35,165 |
132,431 |
125,000 – 135,000 |
125,000 – 135,000 |
El Limon |
10,007 |
45,483 |
50,000 – 60,000 |
50,000 – 60,000 |
|
|
|
|
|
B2Gold Consolidated |
140,651 |
550,423 |
535,000 – 575,000 |
510,000 – 550,000 |
The Masbate Mine in the Philippines achieved a
very strong year in 2016, producing an annual record 206,224 ounces
of gold, above the mid-point of its revised production guidance
range (of 200,000 to 210,000 ounces) and significantly exceeding
its initial guidance range (of 175,000 to 185,000 ounces). Gold
production for the year also increased by 17% (or 30,421 ounces)
over 2015. Masbate’s strong operational performance was driven by
better-than-expected grades from the Main Vein Stage 1 pit and
higher recoveries arising from higher-than-budgeted oxide ore
tonnage from the Colorado pit. In addition, recoveries were
positively impacted by the newly completed process plant upgrades
(adding residence time and additional oxygen to the CIL circuit to
achieve optimum leach performance). The Masbate Mine also continued
its strong safety performance, completing 2016 without a
“Lost-Time-Injury” and extending the number of days without a
“Lost-Time-Injury” to 445 days.
In the fourth quarter of 2016, gold production
at Masbate was 48,633 ounces, 13% (or 5,734 ounces) above budget
and 1% (or 675 ounces) higher than the fourth quarter of 2015.
Commencing in August 2016, Masbate’s mine plan was adjusted to
optimize the mine’s development sequence/gold production through to
2017 and beyond. These adjustments included accelerated mining in
the Main Vein Stage 1 pit, expanding the Colorado pit and
commencing site preparations for later Main Vein stages. In
addition, the lower grade (but higher recovery) Colorado pit ore
was prioritized as mill feed ahead of the higher grade Main Vein
ore, largely due to the higher than budgeted oxide ore content
being sourced from the larger Colorado pit. The excess higher grade
ore from Main Vein Stage 1 pit was stockpiled and is planned to be
processed in 2017.
The Otjikoto Mine in Namibia also had a record
year in 2016, producing an annual record 166,285 ounces of gold,
above the mid-point of its production guidance range (of 160,000 to
170,000 ounces) and 14% (or 20,562 ounces) higher than 2015
(including 18,815 ounces of pre-commercial production from
Otjikoto). Otjikoto’s 2016 production benefitted from higher
throughput due to the successful completion of its mill expansion
project in September 2015 (which increased plant capacity from 2.5
million tonnes per annum to 3.0 million tonnes per annum) and also
due to overall process optimizations. In the fourth quarter of
2016, the Otjikoto Mine produced a quarterly record 46,846 ounces
of gold, slightly above budget and 19% (or 7,472 ounces) higher
than the fourth quarter of 2015.
For the full-year 2016, La Libertad Mine in
Nicaragua produced 132,431 ounces of gold, near the high end of its
production guidance range (of 125,000 to 135,000 ounces) and 11%
(or 12,956 ounces) higher than 2015. Better grade and higher
recoveries contributed to the successful production year. During
the third quarter of 2016, La Libertad’s mine schedule was adjusted
to mine additional high grade ore from the Jabali Central pit to
offset permitting delays at the Jabali Antenna pit. The Jabali
Antenna pit is now planned for production in the third quarter of
2017, pending completion of permitting and relocation activities.
In the fourth quarter of 2016, gold production at La Libertad was
35,165 ounces, consistent with the fourth quarter of 2015.
For the full-year 2016, El Limon Mine in
Nicaragua produced 45,483 ounces of gold, below its production
guidance range (of 50,000 to 60,000 ounces) and 13% (or 6,781
ounces) lower compared to 2015. In the fourth quarter of 2016, gold
production at Limon was 10,007 ounces (Q4 2015 – 8,903 ounces). In
2016, Limon’s production was negatively affected by mine fleet
availability limitations and water control issues which reduced ore
flow from Santa Pancha. As a result, mill feed was supplemented
with lower grade ore from surface stockpiles. To improve overall
mine performance, the operations and maintenance areas have been
reorganized and additional mining equipment has been purchased. The
underground pumping system has also been overhauled and the
dewatering wells are currently being improved.
2016 Gold
Revenue
For the full-year 2016, consolidated gold
revenue was a record $683.3 million on record sales of 548,281
ounces at an average price of $1,246 per ounce compared to $553.7
million (or $576.8 million including $23.1 million of
pre-commercial sales from Otjikoto) on sales of 481,185 ounces (or
499,651 ounces including 18,466 ounces of pre-commercial sales from
Otjikoto) at an average price of $1,151 per ounce in 2015. The 23%
(or $129.6 million) increase in annual gold revenue was mainly
attributable to a 14% increase in gold sales volume and a 8%
increase in the average realized gold price.
Consolidated gold revenue in the fourth quarter
of 2016 was $181.2 million on record sales of 151,524 ounces at an
average price of $1,196 per ounce compared to $139 million on sales
of 127,482 ounces at an average price of $1,090 per ounce in the
fourth quarter of 2015. The 30% (or $42.2 million) increase in gold
revenue was mainly attributable to a 19% increase in gold sales
volume and a 10% increase in the average realized gold price.
Production Outlook and Cost
Guidance
For 2017, B2Gold is projecting another solid
year with consolidated gold production expected to be in the range
of between 545,000 and 595,000 ounces (including estimated
pre-commercial production from Fekola of between 45,000 and 55,000
ounces). Based on Fekola’s current mine construction progress, the
Fekola project is ahead of schedule and is planning for an October
2017 production start. Looking forward to 2018, with the planned
first full-year of production from the Fekola project (based on
current assumptions and updates to the Company’s long-term mine
plans), the Company is projecting its consolidated gold production
to increase significantly and be between 900,000 to 950,000 ounces.
The Fekola project is expected to be a large low-cost producer and
should enable the Company to significantly reduce its forecast
longer term cash operating costs per ounce and AISC per ounce.
In 2017, consolidated cash operating costs
(including the Fekola pre-commercial production period) are
expected to be between $610 and $650 per ounce (2016 revised
guidance range was between $500 and $535 per ounce). The expected
increase reflects the impact of higher projected operating strip
ratios at Masbate and Otjikoto, higher projected fuel prices, and
lower production from Masbate.
Consolidated AISC (including the Fekola
pre-commercial production period) are expected to be between $940
and $970 per ounce (2016 revised guidance range was $780 to $810
per ounce). The expected increase reflects higher anticipated cash
operating costs per ounce as well as higher expected capitalized
pre-stripping costs and other capital expenditures. In 2017,
forecast sustaining capital expenditures are anomalously high as a
result of Masbate’s planned fleet replacement and expansion (see
“Masbate Mine - Philippines” section below) and higher average
strip ratios at Otjikoto which are expected to decline in 2018 and
2019.
For 2018, with the planned first full-year of
production from the Fekola project (based on current assumptions
and updates to the Company’s long-term mine plans), the Company’s
forecast consolidated cash operating costs per ounce and AISC per
ounce are expected to decrease in 2018 (compared to 2017) and be
comparable to the Company’s 2016 cost guidance ranges (of $500 to
$535 per ounce for cash operating costs and $780 to $810 per ounce
for AISC).
Mine-by-mine 2017 ranges for forecast gold
production, cash operating costs per ounce and AISC per ounce are
as follows:
|
2017 ForecastGold
Production(ounces) |
2017 Forecast Cash Operating
Costs($ per ounce) |
2017 ForecastAISC ($ per
ounce) |
Masbate |
175,000 – 185,000 |
$690 - $730 |
$1,020 - $1,050 |
Otjikoto |
165,000 – 175,000 |
$510 - $550 |
$855 - $885 |
La Libertad |
110,000 – 120,000 |
$625 - $665 |
$785 - $815 |
El Limon |
50,000 – 60,000 |
$655 - $695 |
$1,065 - $1,095 |
Subtotal |
500,000 – 540,000 |
$615 - $655 |
$960 - $990 |
Fekola (pre-commercial)(1) |
45,000 – 55,000 |
$580 - $620 |
$700 - $730 |
|
|
|
|
B2Gold Consolidated(2) |
545,000 – 595,000 |
$610 - $650 |
$940 - $970 |
(1) Fekola’s 2017 forecasts include estimated gold production
and operating costs during the pre-commercial production period.
For accounting purposes, Fekola’s revenue and cash operating costs
during the pre-commercial production period will be capitalized to
mineral property development costs. For 2018, with the planned
first full-year of production from the Fekola project, Fekola’s
gold production is expected to be approximately 375,000 to 400,000
ounces.
(2) Consistent with prior years, 2017 consolidated gold
production is not scheduled to be evenly distributed across the
four quarters. Gold production in 2017 is anticipated to be
weighted towards the second half of the year (57%) due to the
anticipated start-up of Fekola in October 2017 combined with lower
expected average strip ratios in the second-half. Cash operating
costs per ounce and AISC per ounce are expected to be lower in the
second-half of 2017 compared to the first-half, reflecting higher
expected gold production, lower expected average strip ratios, and
lower capital expenditures in the second-half.
Masbate Mine, Philippines
For the Masbate Mine, 2017 gold production is
expected to be between 175,000 and 185,000 ounces. Masbate’s 2016
production had benefited from better-than-expected grades from the
Main Vein Stage 1 pit and higher recoveries arising from
higher-than-budgeted oxide ore from the Colorado pit.
Cash operating costs per ounce are expected to
be between $690 and $730. The expected increase over 2016 is mainly
attributable to lower forecast production and higher projected
strip ratios at the new Main Vein Stage 3 pit and expanded Colorado
pit, as well as higher projected prices for diesel fuel/heavy fuel
oil.
AISC are expected to be between $1,020 and
$1,050 per ounce. The expected increase over 2016 reflects higher
anticipated cash operating costs per ounce, higher forecast
capitalized pre-stripping costs and the planned mine fleet
replacement and expansion. In the first-half of 2017, the Company
has elected to replace a significant portion of Masbate’s mine
fleet with new equipment purchases, rather than rebuilding major
components over several years, to optimize its fleet performance
and reduce both operating and capital costs in future years. In
addition, to be able to meet the additional haulage requirements in
2017 to 2021, Masbate’s mine fleet is also planned to be expanded
in 2017. Since the new fleet will commence utilization in 2017, all
of the related purchase costs have been included in Masbate’s 2017
AISC (sustaining costs) even though the equipment will benefit
Masbate operations in future years as well. Masbate’s mine
equipment purchases are subsequently planned to decrease
significantly over the next several years.
In 2017, the Masbate Mine is budgeted to process
an average of 18,630 tonnes of ore per day for a total of 6.8
million tonnes of ore for the year. Gold grades processed are
expected to average 1.13 g/t and gold recoveries are anticipated to
average 71.4%. Mill feed is budgeted to consist of 78%
transitional/fresh ore and 22% oxide ore. Mining activity is
expected to focus on the continued development of the newly widened
Colorado pit, development of Main Vein Stage 3 pit and continued
operations in Main Vein Stage 2 pit. The Main Vein Stage 1 pit has
now been completed.
Sustaining capital costs in 2017 at the Masbate
Mine are budgeted to total $39.5 million, including $25.4 million
for new mining equipment (consisting of $18 million for fleet
replacement and $7.4 million to expand the mining fleet) and
pre-stripping costs ($4.6 million) in Main Vein Stage 3
pit/Colorado pit. The Company expects approximately $20 million of
the Masbate fleet replacement and expansion purchases to be lease
financed. Non-sustaining capital costs are budgeted to total $18
million, primarily for the powerhouse generator ($7.7 million) for
the Masbate tank project and land purchases ($7.2 million).
The Masbate exploration budget for 2017 is
approximately $5 million including 27,000 meters of drilling. The
drilling is divided into brownfields drilling to upgrade resources
within the mine licence area, totalling 16,000 metres of
diamond drilling, and another 11,000 metres on regional targets.
New targets such as Montana SE will be further tested. Drill
results from the 2016 program in the Montana SE area contained up
to 2.39 g/t gold over 22.2 metres true width in hole MONRC141 and
1.23 g/t gold over 17.3 metres true width in hole MONRC 139.
As previously reported by the Company on
September 27, 2016, October 18, 2016 and in its MD&A for the
period ended September 30, 2016, the Philippine Department of
Environment and Natural Resources (the “DENR”) announced the
preliminary results of mining audits carried out by the DENR in
respect of all metallic mines in the Philippines and issued the
Masbate Mine audit report which contains the detailed findings from
the audit and directed the Company to provide explanations and
comments in response to the audit findings as described in its
previous disclosures. The Company provided a comprehensive response
to the findings and recommendations in the audit, which the Company
believes addresses the issues raised. As reported by the Company on
February 2, 2017, the DENR has announced the results of its mining
audit and the Masbate Mine is not among the mines announced to be
suspended or closed. The Company will continue to work closely with
the DENR to maintain compliance with regulations and continue to
promote improved quality of life in the communities where it
operates. The Company will continue to provide updates of its
progress with the DENR. Operations remain uninterrupted at the mine
and the projections and guidance for the Masbate Mine and the
Company on a consolidated basis are provided on this basis.
Otjikoto Mine, Namibia
The Otjikoto Mine is forecast to produce between
165,000 and 175,000 ounces of gold in 2017, compared to 166,285
ounces produced in 2016. Cash operating costs are expected to be
between $510 and $550 per ounce. The expected cost increase over
2016 is mainly due to higher projected strip ratios at the new
Otjikoto Phase 2 pit and Wolfshag Phase 1 pit. In addition, fuel
prices are also projected to be higher than 2016. The average strip
ratios at Otjikoto are expected to decrease in 2018 and 2019. AISC
are expected to be between $855 and $885 per ounce in 2017,
reflecting higher expected cash operating costs per ounce and
capital expenditures. The Otjikoto Mine is projected
to process 3.3 million tonnes of ore in 2017, with an average grade
of 1.59 g/t and recovery of 98%. Mill feed is expected to consist
of high grade ore from the Otjikoto Phase 2 pit (35%) and Wolfshag
Phase 1 pit (25%). High and medium grade stockpile ore is expected
to account for the remainder of the mill feed (40%), as the
Otjikoto Phase 2 pit is developed.
Life-of-mine production plans for the Otjikoto
Mine, incorporating preliminary projections for the Wolfshag open
pit and underground mines, have been completed for various options
and will be further refined as the detailed geotechnical,
hydrogeological, and design studies are completed in 2017. Ongoing
studies are leading the Company to re-evaluate the open pit and
underground interface.
For 2017, sustaining capital costs at the
Otjikoto Mine are estimated to be $37.1 million, including $15
million for capitalized pre-stripping costs, $10.4 million for mine
fleet additions, and $6 million for major equipment rebuilds. The
Company expects $10 million of the Otjikoto mine fleet expansion
purchases to be lease financed. To advance stripping at both the
Otjikoto and Wolfshag pits the mining fleet will be increased by an
additional 250-tonne excavator along with additional haul trucks
and support equipment. Non-sustaining capital costs are budgeted to
be $12.7 million which includes $8.5 million for phase one of the
construction of a solar power plant. The solar power plant is
expected to reduce fuel consumption and protect against rising oil
prices.
The total exploration budget for Namibia in 2017
is $5.1 million mainly for 5,000 metres of diamond drilling on the
Otjikoto licence area, and 12,000 metres of diamond drilling and
5,000 metres of RAB drilling on the Ondundu joint venture project.
Drilling at Ondundu in 2016 has defined a distinct North South zone
of mineralization with holes containing up to 3.10 g/t gold over
68.4 metres drilled in hole ON-16-092 and 2.58 g/t over 52.1 metres
(true width approximately 50% of drilled width) drilled in hole
ON-16-96. An additional 5,000 metres of diamond and RC drilling are
committed to new targets in and around the Otjikoto area.
La Libertad Mine, Nicaragua
La Libertad Mine is expected to produce between
110,000 and 120,000 ounces of gold in 2017 (compared to 132,431
ounces produced in 2016) at cash operating costs of between $625
and $665 per ounce and AISC of between $785 and $815 per ounce.
La Libertad’s production forecast assumes that
mining from the higher grade Jabali Antenna pit will now enter the
production stream in the third quarter of 2017 (dependent upon the
successful completion of resettlement activities and receipt of the
remaining mining permits). However, as in 2016, La Libertad retains
some flexibility in sourcing its ore while the Jabali Antena
permitting and relocation activities are being completed. La
Libertad’s cash operating costs per ounce are expected to remain
in-line with 2016, as the decrease in planned production is
expected to be offset by lower mining costs (as a result of less
waste being moved at the Jabali Central pit).
In 2017, La Libertad is budgeted to process 2.3
million tonnes of ore at an average grade of 1.73 g/t with gold
recoveries averaging 94%. Mill feed is expected to consist mainly
of high grade ore from Jabali Central pit (37%), Mojon underground
(8%), and Jabali Antenna pit (5%), which will be blended with lower
grade spent ore (50%). Jabali West underground mine development is
expected to commence in 2017, with production expected to commence
in 2018.
Sustaining capital costs for La
Libertad are planned to total $3.6 million, including Mojon
underground mine development ($1.2 million). Non-sustaining capital
costs are budgeted to total $23 million, including underground
development/infrastructure at San Juan and Jabali West ($12
million) and land purchases/resettlement ($6.2 million).
La Libertad’s exploration budget for 2017 is
approximately $6.7 million for a total of 15,000 metres of planned
diamond drilling. The program is comprised of 7,000 metres of
brownfields (near mine) drilling and 8,000 metres of drilling
planned on several regional targets. Most of the drilling in 2017
will be detailed drilling related to underground mine planning.
El Limon Mine, Nicaragua
In 2017, El Limon is expected to produce between
50,000 and 60,000 ounces of gold (compared to 45,483 ounces
produced in 2016) at cash operating costs of between $655 and $695
per ounce. AISC are expected to be between $1,065 and $1,095 per
ounce.
El Limon Mine is budgeted to process 0.5 million
tonnes of ore at an average grade of 3.58 g/t gold with gold
recoveries averaging 93.5%. Approximately 10% of the process ore is
expected to be sourced from the Mercedes open pit, with the
remainder from underground operations at Santa Pancha 1 and Santa
Pancha 2.
The Company plans to undertake sustaining
capital expenditures at El Limon totaling $9.7 million in 2017, of
which $5.9 million relates to underground development at Santa
Pancha. Non-sustaining capital costs are budgeted to total $3.3
million, primarily for underground development/infrastructure at a
new underground operation, Veta Nueva. Veta Nueva is not expected
to produce ore until 2018.
The Limon exploration budget for 2017 is
approximately $5 million for a total of 11,000 metres of planned
diamond drilling focusing on extending the mine life. The program
will focus on the Las Mercedes and Pozo Bono/Limon Central area.
Drill holes from late 2016 contained up to 9.93 g/t gold over 15.5
metres (true width) in hole LIM16-4035 of Limon Central and 8.92
g/t gold over 14.9 metres (true width) in hole LIM16-4026 on Pozo
Bono.
Development update
Fekola Development Project - Mali
The Company is pleased to announce that the
Fekola project mine construction is ahead of schedule and is now on
target for an October 2017 production start. In addition, the
Fekola project remains on budget and expected to be completed on
budget. The Fekola project is expected to be a large low-cost
producer and should enable the Company to significantly reduce its
longer term cash operating costs per ounce and AISC per
ounce.
In the fourth quarter of 2016, B2Gold’s
construction team continued to develop the Fekola project in Mali.
Significant activities during the quarter included:
- Overall the construction is approximately 60% complete;
- A total of 4,000,000 m3 of material has been moved at
site;
- Construction of TSF and water embankments is 100%
complete;
- Lining of the tailings facility commenced in December
2016;
- Installation of mechanical components is on-going with gyratory
crusher, pebble crusher, conveyors, reclaim tunnel, leach and CIP
tanks. Commencement of mill installation will start in
January 2017;
- Goldroom and reagent storage area construction is well
underway;
- Powerhouse construction remains on schedule for a June 2016
commencement of commissioning;
- Pit pre-stripping has commenced ahead of schedule and over
800,000 m3 of material has been removed to date;
- Grade control for the ore zones has commenced and the lab on
site is under construction (expected to start up in Q2, 2017);
- Commissioning team has arrived at site and begun hiring and
training the mill/lab operators;
On June 11, 2015, the Company announced robust
results from the optimized Feasibility Study at the Fekola Gold
Project in Mali. According to the Feasibility Study, the current
average annual gold production for the first seven years is
estimated at approximately 350,000 ounces per year at an average
operating cash cost of $418 per ounce and for the life of mine plan
approximately 276,000 ounces per year at an average operating cash
cost of $552 per ounce. The total pre-production capital costs are
estimated to be $395 million plus $67 million of anticipated mine
fleet and power generator costs which are expected to be lease
financed. Sunk costs related to early works (including access
roads, construction aggregate stockpiling, airstrip construction,
and land clearing) of approximately $41 million are not included in
the total pre-production capital estimate.
On June 29, 2016, the Company announced an
exploration update for its Fekola project. Based on the positive
drill results to date (at both near surface and underground below
the main Fekola pit) and exploration potential, the Company is
expanding the throughput at the Fekola mine to 5 million tonnes per
year. The optimized Feasibility Study and Environmental and Social
Impact Study were both prepared to accommodate an uplift in
throughput from 4 million tonnes per year to 5 million tonnes per
year. The design factors built into the original design included 5
million tonnes per year assumptions for plant design, general
infrastructure and tailings dam design and location. This means
that the capacity for throughput of ore at the Fekola mine could
reach up to 5 million tonnes per year in the initial years of
production, beyond the optimized Feasibility Study’s originally
modelled 4 million tonnes per year, for relatively low additional
capital cost. On August 2, 2016, the Company decided to proceed
with the mill expansion and approved an $18 million expansion
budget for additional items including a pebble crusher, one
additional leach tank and an additional generator. With this
additional capital investment, the Fekola mill expansion is
expected to be completed in the fourth quarter of 2017 and
commissioned in conjunction with the main plant commissioning.
A revised geological resource model was
completed in the third quarter of 2016, followed by updates to the
open pit mine designs and production plans in the fourth quarter of
2016, reflecting the mill capacity increase to 5 million tonnes per
year. Based on the updated production plans, Fekola is projected to
produce an average of 375,000 to 400,000 ounces per year for the
first five years of production (2018 to 2022) and 365,000 to
390,000 ounces per year over the first seven years of production
(2018 to 2024). Mining rates will not materially change to supply
the 5 million tonne per year plant, as the additional material will
be diverted from planned stockpiles. The mining schedule has been
adjusted to ensure sufficient feed for the October 2017 start
date.
The Company has also approved a plan to relocate
the village of Fadougou, located adjacent to the main Fekola pit.
This decision was not made based on a requirement in the
Construction Permit but on extensive stakeholder engagement with
the local population. Relocation of the village will be completed
in accordance with a Resettlement Action Plan (“RAP”) that was
completed by an independent consultant in consultation with all
stakeholders. The RAP has been submitted to the appropriate Malian
authorities and the Company is currently in the process of
acquiring the land necessary for relocation. It is anticipated that
the relocation process will take 2 years to complete. Total
estimated relocation costs are approximately $20 million to be
incurred in 2016 and 2017.
The 2017 construction and development budget for
the Fekola Project totals approximately $173 million, including $18
million for the Fekola mill expansion and $10 million for
relocating the village of Fadougou. In addition, as a result of the
Fekola mill expansion and October 2017 production start date, open
pit pre-stripping and mine fleet purchases have been advanced by
six months (and have now been included in the 2017 budget) to
secure ore stockpiles, budgeted at approximately $25 million and
$22 million, respectively. Post-construction and operational
capital costs are budgeted at $11 million, including $4 million for
aircraft purchases. The Company has signed a Euro 71.4 million
Equipment Facility with Caterpillar Financial SARL for the Fekola
project (funding subject to satisfaction of conditions precedent)
which it expects to draw upon commencing in February 2017. The
Fekola project remains on budget and expected to be completed on
budget. In 2017, the Company will complete construction and
commissioning of the Fekola project and begin the transition from
construction to steady-state operations. Primary project areas will
include the power house, processing mechanical and electrical
installation, tailing storage facility lining, and pre-stripping in
stage one of the Fekola open pit.
Anaconda Project - Mali
A conceptual engineering study is underway for
the Anaconda Project. This work is being done by Lycopodium in
their Brisbane office, and Fekola capital and operating cost
information is being used as a basis for the cost estimates. A base
case of 4 million tonnes per year will be developed, and then
larger and smaller cases will be factored depending on the
estimated mineral resource. Metallurgical test programs have been
completed and will form the basis of the design criteria for the
processing plant. Environmental and social baseline studies
are underway and will continue throughout 2017. The development
budget for the Anaconda Project is approximately $2.2 million for
2017.
Anaconda has the potential to be an extremely
low cost operation due to shared infrastructure and services from
the nearby Fekola Mine, soft “free digging” ore requiring no
drilling and blasting, an unusually low strip ratio and very low
milling requirements due to the large percentage of fines in the
highly-weathered material. Preliminary in-house estimates indicate
that Anaconda could potentially produce between 80,000 to 100,000
ounces per year.
Kiaka Development Project – Burkina Faso
Engineering evaluations were completed in 2016
to access the optimum throughput rate for the Kiaka Project. As
part of that in-house study, both operating and capital costs were
updated, with capital costs increasing and operating costs
decreasing from the previous published study. Results indicated
that higher throughput rates improve project results, and the
optimum throughput rate was 10 million tonnes per year based on the
cost assumptions used. The current plan is to update the mineral
resource block model later this year, and then use that model as
the basis for additional project evaluations, including an
optimized feasibility study if economics indicate this is
warranted. The 2017 development budget for Kiaka is approximately
$2.7 million which includes funds for completing an optimized
feasibility study in the second-half of the year.
Toega Project – Burkina Faso
Exploration drilling continued to expand ore
zones at Toega during 2016. Drill results at Toega are up to 3.09
g/t gold over 84 metres (approximate true width) in NKDD014 and
1.61 g/t over 131 metres in NKDD017. The zone remains open and
drilling is ongoing.
When mineral resource estimates become
available, in-house evaluations will be completed to determine if
Toega should be a stand-alone project, or a potential source of
higher grade feed for Kiaka. Environmental and social baseline
studies were initiated at Toega in 2016, and these programs are
planned to continue through 2017. The 2017 development budget for
Toega is approximately $0.9 million.
2017 Exploration Guidance
B2Gold has a 2017 exploration budget totalling
$46 million. Approximately $22 million of the 2017 budget will be
used to support brownfields exploration at the producing mines
(which for accounting purposes will be capitalized and included in
the mine’s sustaining and non-sustaining capital costs). In
addition, a significant portion of the 2017 exploration budget will
be used at all sites to drill several targets that exhibit
potential based on surface mapping, geochemical sampling and
drilling completed in 2016. West Africa will be a primary
focus of 2017 exploration expenditures as will Nicaragua.
In 2017, approximately $20 million will be spent
on exploration in Mali, Burkina Faso and Ghana. Exploration on the
licences in Mali will total $11.6 million focusing on 15 targets
close to the Fekola deposit. The 2017 budget for West Africa
envisions completing 16,500 metres of diamond drilling, 41,000
metres of RC drilling, 22,000 metres of air-core drilling and 8,500
metres of auger drilling.
Qualified Person
Peter D. Montano, P.E., the Project Director of
B2Gold, a qualified person under NI 43-101, has approved the
scientific and technical information related to operations and
development matters contained in this news release.
Tom Garagan, Senior Vice President of
Exploration, a qualified person under NI 43-101, has approved the
scientific and technical information related to exploration matters
contained in this news release.
Fourth Quarter and Year End 2016 Financial Results -
Conference Call Details
B2Gold Corp. will release its fourth quarter and
year end 2016 results before the North American markets open on
March 16, 2017.
B2Gold executives will host a conference call to
discuss the results on Thursday, March 16, 2017 at 10:00 am
PST/1:00 pm EST. You may access the call by dialing the
operator at 416-406-0743 or toll free at 800-806-5484 prior to the
scheduled start time or, you may listen to the call via webcast by
clicking http://www.investorcalendar.com/IC/CEPage.asp?ID=175618. A
playback version of the call will be available for one week after
the call at 905-694-9451 or toll free at 800-408-3053 (pass code:
7435166).
ON BEHALF OF B2GOLD CORP.
“Clive T.
Johnson”President and Chief Executive
Officer
For more information on B2Gold please visit the
Company web site at www.b2gold.com or contact:
Ian MacLeanVice President, Investor
Relations604-681-8371
The Toronto Stock Exchange neither approves nor
disapproves the information contained in this News Release.
This news release includes certain
“forward-looking information” and “forward-looking statements”
(collectively, “forward-looking statements”) within the meaning of
applicable Canadian and United States securities legislation,
including projections of future financial and operational
performance, statements with respect to future events, estimated
future performance, revenue estimates and guidance, production
estimates and guidance, anticipated operating, production and
capital costs and expenditures, future demand for and prices of
commodities and currencies; and statements regarding anticipated
exploration, development, construction, production, permitting and
other activities on the Company’s properties, including the
projections included in existing technical reports, economic
assessments, feasibility studies and geological models and the
completion of new studies including the new life of mine plan for
the Otjikoto Pit and studies relating to the Anaconda, Kiaka and
Toega projects; the potential for expansion of mineral resources
and reserves; the potential for expansion of production capacity,
including the expansion of gold production, the potential
construction and production from the Fekola gold project and Fekola
being a low-cost producer, enabling the Company to reduce its
longer term cash operating costs per ounce and AISC per ounce;
construction of the Fekola project being ahead of schedule and on
target for production commencing in October 2017; completion of the
Fekola mill expansion in Q4 2017, the estimated capital
expenditures required to do so, and the related potential increase
in projected annual production; the projections and estimates
contained in the Feasibility Study and the Company’s updated
geological resource model and production plans for Fekola;
completion of permitting and the relocation of Fadougou according
to the RAP; the modified mine plan for Masbate resulting in strong
gold production and optimized production in 2017 and beyond;
continued development of the Colorado pit, development of the Main
Vein Stage 3 pit and continued operations at the Main Vein Stage 1
pit at Masbate; the completion of the plant upgrades at Masbate and
the upgrades improving gold recoveries and sustaining throughput;
the expected resolution of the issues raised in the DENR audit
report, the final outcome of the DENR audit in relation to the
Masbate Mine and operations continuing uninterrupted at Masbate;
completion of permitting and relocation activities and the planned
production at the Jabali Antenna pit at La Libertad in Q3 2017;
underground development at Santa Pancha at El Limon; underground
development and infrastructure at Veta Nueva at El Limon and
expected production in 2018; development of the Wolfshag zone and
underground studies of Wolfshag; completion of studies at Otjikoto
and including Wolfshag in 2017; construction of a solar power
plant; completion of an optimized feasibility study for Kiaka in
the second half of 2017; Toega becoming a stand-alone project or a
potential source of higher-grade feed for Kiaka; the potential to
identify mineral resources at Anaconda and Toega; the potential for
developing a mining operation at Anaconda and the potential
attributes of such an operation; funding under the Euro 71.4
million Equipment Facility with Caterpillar Financial SARL;
expected ore sources, ratios and grades; expected processing of
stockpiles; expected strip ratios, fuel prices, pre-stripping costs
and capital expenditures and budgets, including the replacement of
a significant portion of the Masbate fleet in the first half of
2017 and the expansion of the Masbate fleet; $30 million of the
Masbate and Otjikoto mine fleet replacement and expansion being
lease financed; West Africa and Nicaragua being a primary focus of
exploration expenditures in 2017; the forecast that gold production
will be weighted to the second half of 2017; the adequacy of
capital for continued operations; and preliminary year-end
financial disclosures that are subject to finalization. Estimates
of mineral resources and reserves are also forward looking
statements because they constitute projections, based on certain
estimates and assumptions, regarding the amount of minerals that
may be encountered in the future and/or the anticipated economics
of production, should a production decision be made. All statements
in this news release that address events or developments that we
expect to occur in the future are forward-looking statements.
Forward-looking statements are statements that are not historical
facts and are generally, although not always, identified by words
such as “expect”, “plan”, “anticipate”, “project”, “target”,
“potential”, “schedule”, “forecast”, “budget”, “estimate”, “intend”
or “believe” and similar expressions or their negative
connotations, or that events or conditions “will”, “would”, “may”,
“could”, “should” or “might” occur. All such forward-looking
statements are based on the opinions and estimates of management as
of the date such statements are made. Forward-looking statements
necessarily involve assumptions, risks and uncertainties, certain
of which are beyond B2Gold’s control, including the uncertainty of
estimates regarding the costs of construction and the timing and
amount of production; the audit by the DENR in relation to the
Masbate mine and the final outcome thereof; risks associated with
the volatility of metal prices and currencies; risks and dangers
inherent in exploration, development and mining activities;
uncertainty of reserve and resource estimates; availability of
financing and financing risks; risks related to hedging activities;
the ability to obtain and maintain any necessary permits, consents
or authorizations required for its activities; shortages or cost
increases in necessary equipment, supplies and labour; regulatory,
political and country risks; litigation risk; risks related to
environmental regulations or hazards and compliance with complex
regulations associated with mining activities; the ability to
replace mineral reserves and identify acquisition opportunities;
unknown liabilities of companies acquired by B2Gold; fluctuations
in exchange rates; risks related to operations in foreign countries
and compliance with foreign laws; risks related to remote
operations and the availability adequate infrastructure;
fluctuations in price and availability of energy and other inputs
necessary for mining operations; risks related to reliance upon
contractors, third parties and joint venture partners; challenges
to title or surface rights; dependence on key personnel; the risk
of an uninsurable or uninsured loss; changes in tax laws; community
support for B2Gold’s operations including risks related to strikes
and the halting of such operations from time to time; as well as
other factors identified and as described in more detail under the
heading “Risk Factors” in B2Gold’s most recent Annual Information
Form and B2Gold’s other filings with Canadian securities regulators
and the U.S. Securities and Exchange Commission (the “SEC”), which
may be viewed at www.sedar.com and www.sec.gov, respectively.
The list is not exhaustive of the factors that may affect the
Company’s forward-looking statements. There can be no assurance
that such statements will prove to be accurate, and actual results,
performance or achievements could differ materially from those
expressed in, or implied by, these forward-looking statements.
Accordingly, no assurance can be given that any events anticipated
by the forward-looking statements will transpire or occur, or if
any of them do, what benefits or liabilities B2Gold will derive
therefrom. The Company’s forward looking statements reflect current
expectations regarding future events and operating performance and
speak only as of the date hereof and the Company does not assume
any obligation to update forward-looking statements if
circumstances or management's beliefs, expectations or opinions
should change other than as required by applicable law. For the
reasons set forth above, you should not place undue reliance on
forward-looking statements.
The disclosure in this news release and in the
documents described in this news release regarding mineral
properties was prepared in accordance with Canadian National
Instrument 43-101 (“NI 43-101”), which differs significantly from
the mineral reserve disclosure requirements of the SEC set out in
Industry Guide 7. In particular, NI 43-101 permits companies to use
the term “resources”, which are not “reserves”. Under U.S.
standards, companies are not normally permitted to disclose
mineralization that does not constitute “reserves” in filings with
the SEC. Accordingly, while mineral resources are recognized and
required to be disclosed by NI 43-101, the SEC’s disclosure
standards normally do not permit companies to disclose mineral
resources in their filings with the SEC. In addition, the
definitions of “reserves” and related terms under NI 43-101 and the
SEC’s Industry Guide 7 differ significantly. Under SEC standards,
mineralization may not be classified as a “reserve” unless the
determination has been made that the mineralization could be
economically and legally produced or extracted at the time the
reserve determination is made. Among other things, all necessary
permits would be required to be in hand or issuance imminent in
order to classify mineralized material as reserves under the SEC
standards. Investors are specifically cautioned not to assume that
any part or all of “measured mineral resources”, “indicated mineral
resources” or “inferred mineral resources” will ever be converted
into a higher category, including SEC defined mineral reserves.
Investors should also understand that “inferred mineral resources”
have a great amount of uncertainty as to their existence and great
uncertainty as to their economic and legal feasibility. It cannot
be assumed that all or any part of an “inferred mineral resource”
exists or is economically or legally mineable. Further, while NI
43-101 permits companies to disclose economic projections contained
in preliminary economic assessments and pre-feasibility studies,
which are not based on “reserves”, U.S. companies are not normally
permitted to disclose economic projections for a mineral property
in their SEC filings prior to the establishment of “reserves”. For
the above reasons, information contained in this news release that
describes the Company’s mineral reserve and resource estimates or
that describes the results of feasibility or other studies is not
comparable to similar information made public by companies that
report in accordance with U.S. standards.
Non-IFRS Measures This news
release includes certain terms or performance measures commonly
used in the mining industry that are not defined under
International Financial Reporting Standards (“IFRS”), including
“cash operating costs” and “all-in sustaining costs” or “AISC”.
Non-IFRS measures do not have any standardized meaning prescribed
under IFRS, and therefore they may not be comparable to similar
measures employed by other companies. The data presented is
intended to provide additional information and should not be
considered in isolation or as a substitute for measures of
performance prepared in accordance with IFRS and should be read in
conjunction with B2Gold’s consolidated financial statements.
Readers should refer to B2Gold’s management discussion and
analysis, available under B2Gold’s corporate profile at
www.sedar.com or on its website at www.b2gold.com, under the
heading “Non-IFRS Measures” for a more detailed discussion of how
B2Gold calculates such measures.
B2Gold (TSX:BTO)
Historical Stock Chart
From Aug 2024 to Sep 2024
B2Gold (TSX:BTO)
Historical Stock Chart
From Sep 2023 to Sep 2024