VANCOUVER, March 12, 2019
/PRNewswire/ - B2Gold Corp. (TSX: BTO, NYSE AMERICAN: BTG,
NSX: B2G) ("B2Gold" or the "Company") is pleased to announce its
operational and financial results for the fourth quarter and
year-end December 31, 2018. The
Company previously released its gold production and gold revenue
results for the fourth quarter and full-year 2018, in addition to
its production and cash cost guidance for 2019 (see news release
dated 1/16/19). All dollar figures
are in United States dollars
unless otherwise indicated.
2018 Full-Year Highlights
- Record annual consolidated gold production, of 953,504 ounces
of gold, near the top end of the revised guidance range (of between
920,000 and 960,000 ounces) and exceeding the upper end of the
original guidance range (of between 910,000 and 950,000 ounces), a
significant increase of 322,939 ounces (51%) over the prior-year;
marking the tenth consecutive year that B2Gold achieved record
annual consolidated gold production
- Record annual consolidated gold revenue of $1.2 billion, a dramatic increase over 2017
- Consolidated cash operating costs (see "Non-IFRS
Measures") of $495 per ounce,
beating guidance (of between $505 and
$550 per ounce) and well below the
prior year of $542 per ounce
- Consolidated all-in sustaining costs ("AISC") (see "Non-IFRS
Measures") of $758 per ounce,
well below its guidance range (of between $780 to $830 per
ounce) and significantly below the prior year of $860 per ounce
- Record annual consolidated cash flows from operating activities
of $451 million ($0.46 per share), a dramatic increase of 191%
($296 million) over 2017
- Net income of $45 million
($0.03 per share) and adjusted net
income (see "Non-IFRS Measures") of $162 million ($0.16
per share)
- The new Fekola Mine in Mali,
in its first full-year of commercial production, continued to
significantly outperform expectations, with gold production of
439,068 ounces, exceeding the upper limit of its already increased
guidance range (of between 420,000 and 430,000 ounces), coupled
with AISC of $533 per ounce, well
below the low end of its guidance range (of between $575 to $625 per
ounce)
- The Masbate Mine in the
Philippines achieved record annual gold production of
216,498 ounces, exceeding the upper limit of its already increased
guidance range (of between 200,000 and 210,000 ounces), with AISC
of $744 per ounce, beating the low
end of its reduced guidance range (of between $780 to $830 per
ounce)
- On October 1, 2018, the Company
repaid in full its $259 million
aggregate principal amount of convertible senior subordinated notes
(the "Notes") on maturity; by year-end the Company had reduced its
total debt outstanding to approximately $480
million from $700 million at
the beginning of the year
- On October 25, 2018, the Company
announced a substantial increase in the gold mineral resource
estimate for the Fekola Mine and positive results from the ongoing
Fekola Mill Expansion Study
- In October 2018, the Company was
granted the mine permit for the Limon Central Pit in Nicaragua and announced positive results from
the Expansion Study at El Limon Mine
- Looking forward, B2Gold remains well positioned for continued
strong operational and financial performance with production
guidance of between 935,000 and 975,000 ounces of gold for 2019
with forecast cash operating costs of between $520 and $560 per
ounce and AISC of between $835 and
$875 per ounce; in addition, the
Company will focus on organic growth through both expansion
potential at its existing mines and through its exploration and
development projects
2018 Full-Year and Fourth Quarter
Operational Results
For B2Gold, 2018 was a year of transformational growth,
highlighted by the first full-year of commercial production from
its new large, low-cost Fekola Mine in Mali (which achieved commercial production on
November 30, 2017) and record annual
production from its Masbate Mine in the
Philippines. For the tenth straight consecutive year, B2Gold
achieved record annual consolidated gold production.
For full-year 2018, B2Gold's consolidated production was an
annual record of 953,504 ounces of gold, near the top end of the
revised guidance range (of between 920,000 and 960,000 ounces) and
exceeding the upper end of the original guidance range (of between
910,000 and 950,000 ounces). Consolidated gold production for the
year dramatically increased by 322,939 ounces (51%) compared to
2017. The new Fekola Mine continued to outperform expectations and
exceeded the upper limit of its already increased production
guidance range (of between 420,000 and 430,000 ounces) with gold
production of 439,068 ounces in 2018. The Masbate Mine achieved
another very strong year in 2018, producing an annual record
216,498 ounces of gold, and also exceeded the upper limit of its
already increased production guidance range (of between 200,000 to
210,000 ounces). In addition, the Otjikoto Mine in Namibia had another solid year in 2018,
producing 167,346 ounces of gold, above the mid-point of its
production guidance range (of between 160,000 and 170,000 ounces).
The strong operational performances by the Fekola, Masbate and
Otjikoto mines more than offset production shortfalls relating to
the Company's La Libertad and El Limon mines in Nicaragua (which represent 14% of the
Company's 2018 consolidated gold production), whose operations in
2018 were negatively affected by consequences of the national
political unrest in that country.
In the fourth quarter of 2018, B2Gold's consolidated gold
production was 231,687 ounces, slightly exceeding reforecast
production and approximately in-line with the original budget. In
the fourth quarter of 2017, including 72,903 ounces of
pre-commercial production from Fekola, consolidated gold production
was 240,753 ounces.
The Company's full-year 2018 consolidated cash operating costs
were $495 per ounce, beating guidance
(of between $505 and $550 per ounce) and well below the prior year of
$542 per ounce (including Fekola's
pre-commercial production results). Consolidated AISC were
$758 per ounce, well below the
guidance range (of between $780 to
$830 per ounce) and significantly
below the prior year of $860 per
ounce (including Fekola's pre-commercial production results),
reflecting the positive impact of the first-full year contribution
of low-cost production from the Fekola Mine and Masbate's very
strong operational performance.
In the fourth quarter of 2018, consolidated cash operating costs
were $523 per ounce (Q4 2017 -
$473 per ounce, including Fekola's
pre-commercial production results) and AISC were $814 per ounce (Q4 2017 - $754 per ounce, including Fekola's pre-commercial
production results).
2018 Full-Year and Fourth Quarter
Financial Results
For the full-year 2018, consolidated gold revenue was a record
$1.2 billion on record sales of
970,409 ounces at an average price of $1,262 per ounce compared to $639 million (excluding $101 million of pre-commercial sales from Fekola)
on sales of 510,966 ounces at an average price of $1,250 per ounce in 2017. This significant
increase in gold revenue was attributable to the higher gold
production and timing of gold sales, relating to the sale of gold
bullion and in-circuit inventories included in opening inventories
at the beginning of the year. In 2017, for accounting purposes,
gold revenue earned net of related production costs from the sale
of pre-commercial production were credited to Fekola's mineral
property development costs.
For the fourth quarter of 2018, consolidated gold revenue was
$272 million on sales of 221,307
ounces at an average price of $1,230
per ounce compared to $174 million on
sales of 137,695 ounces at an average price of $1,264 per ounce in the fourth quarter of 2017.
The 2017 results exclude $101 million
of revenue from the sale of 79,243 ounces of pre-commercial
production from Fekola.
For the full-year 2018, consolidated cash flows from operating
activities significantly increased by $296
million (191%) to $451 million
($0.46 per share) from $155 million ($0.16
per share) in 2017. In 2017, for accounting purposes, gold sales
proceeds earned net of related production costs from the sale of
pre-commercial production were credited to Fekola's mineral
property development costs. For the fourth quarter of 2018,
consolidated cash flows from operating activities were $74 million ($0.07
per share), almost tripling from $26
million ($0.03 per share) in
fourth quarter of 2017.
For the year ended December 31,
2018, the Company recorded net income of $45 million ($0.03
per share) compared to net income of $62
million ($0.06 per share) for
2017. During 2018, the Company recorded a net impairment charge of
$55 million, mainly relating to
impairment charges for La Libertad Mine in the third and fourth
quarters of 2018 and the sale of the Mocoa porphyry
copper-molybdenum deposit in the second quarter of 2018. In the
fourth quarter of 2018, the Company recorded a loss of $50 million ($(0.06) per share) compared to net income of
$34 million ($0.03 per share) in the fourth quarter of 2017,
mainly as a result of impairment charges and mineral property
write-offs.
Adjusted net income was $162
million ($0.16 per share) for
2018 compared to $52 million
($0.05 per share) for 2017. Adjusted
net income for the fourth quarter of 2018 was $14 million ($0.01
per share) compared to adjusted net income of $6 million ($0.01
per share) in the fourth quarter of 2017.
The Company recorded a net current income tax expense of
$109 million for the year ended
December 31, 2018 compared to
$27 million in 2017 consisting of
current income tax of $77 million
(2017 - $15 million), the 10%
priority dividend to the State of
Mali of $18 million (2017 -
$2 million), withholding tax (on
intercompany interest/management fees) of $9
million (2017 - $5 million),
and Nicaraguan ad valorem and alternative minimum tax of
$5 million (2017 - $5 million). For full-year 2018, consolidated net
income before taxes totaled $193
million. For accounting purposes, this amount was net of
$217 million of unrecognized and
non-deductible tax losses. These unrecognized and non-deductible
tax losses of $217 million, mainly
consisted of accounting depreciation expense of $69 million (relating to consolidated purchase
price adjustments), mineral property impairments and write-downs of
$65 million, share-based compensation
expense of $22 million, head office
general & administrative and interest expenses of $34 million (net of derivative gains), and other
unrecognized tax losses of $27
million relating to the Nicaraguan operations. Excluding
these non-deductible and unrecognized tax losses, adjusted pre-tax
net income was $410 million,
resulting in a consolidated effective income tax rate for the
Company's mining operations of 19% ($77
million/$410 million).
Liquidity and Capital Resources
With the Fekola Mine in production, the resulting increase in
gold production levels combined with low costs have dramatically
increased B2Gold's production, revenues, cash from operations and
free cash flows with ongoing benefits expected to continue for many
years, based on current assumptions. For the full-year 2018,
consolidated cash flows from operating activities significantly
increased by $296 million (191%) to
$451 million ($0.46 per share) from $155
million ($0.16 per share) in
2017.
At December 31, 2018, the Company
had cash and cash equivalents of $103
million compared to cash and cash equivalents of
$147 million at December 31, 2017. Working capital at
December 31, 2018 was $156 million compared to a working capital
deficit of $99 million at
December 31, 2017. On October 1, 2018, the Company repaid in full its
$259 million aggregate principal
amount of the Notes (plus accrued interest) upon maturity. The
repayment of all outstanding principal and accrued interest under
the Notes amounted to approximately $263
million. The working capital deficit at December 31, 2017 resulted from the
classification of the Company's Notes to current liabilities since
they were due on October 1, 2018.
Repayment of the Notes reflects the ongoing second phase of
B2Gold's strategy to fund construction of the Fekola Mine in
Mali without using equity
financing. The Company funded construction of Fekola using a
combination of operating cashflows from existing mines, debt
facilities and prepaid gold contract sales. Following the
successful achievement of commercial production at the Fekola Mine
in late 2017, the Company has been reducing its total debt
outstanding throughout the course of 2018. The Company started 2018
with total debt outstanding of approximately $700 million (comprised of the drawn portion of
the Revolving Credit Facility ("RCF"), Notes and equipment loans).
The Company has reduced its total debt outstanding to approximately
$480 million by December 31, 2018 (including approximately
$80 million in equipment loan
financing), a reduction of $220
million for the year.
At December 31, 2018, the Company
had drawn $400 million under the
$500 million RCF, leaving an undrawn
and available balance under the existing facility of $100 million.
At December 31, 2018, the Company
had $67 million of accrued taxes
payable. The increase in accrued taxes over 2017 relates mainly to
the start-up of the Fekola Mine in September
2017. On a cash basis, the majority balance of these accrued
taxes become due and will be paid in the second quarter of 2019 (in
conjunction with the filing of the related 2018 corporate income
tax returns). In addition, the Company expects to make 2019
corporate income tax installment payments of approximately
$65 million in 2019.
Operations
Mine-by-mine gold production in the fourth quarter and full-year
2018 was as follows (presented on a 100% basis):
Mine
|
Q4
2018
Gold
Production
(ounces)
|
Full-year
2018
Gold
Production
(ounces)
|
Revised
Annual
Guidance
Gold
Production
(ounces)
|
Original
Annual
Guidance
Gold
Production
(ounces)
|
Fekola
|
105,280
|
439,068
|
420,000 -
430,000
|
400,000 -
410,000
|
Masbate
|
51,555
|
216,498
|
200,000 -
210,000
|
180,000 -
190,000
|
Otjikoto
|
44,766
|
167,346
|
160,000 -
170,000
|
160,000 -
170,000
|
La
Libertad
|
18,193
|
80,963
|
90,000 -
95,000
|
115,000 -
120,000
|
El Limon
|
11,893
|
49,629
|
50,000 -
55,000
|
55,000 -
60,000
|
|
|
|
|
|
B2Gold
Consolidated
|
231,687
|
953,504
|
920,000 -
960,000
|
910,000 -
950,000
|
Mine-by-mine cash operating costs and AISC per ounce in the
fourth quarter and full-year 2018 were as follows (based on the
total production at the mines B2Gold operates):
Mine
|
Q4
2018
Cash
Operating
Costs
($ per
ounce)
|
Full-year
2018
Cash
Operating
Costs
($ per
ounce)
|
Revised
Annual
Guidance
Cash
Operating
Costs
($ per
ounce)
|
Original
Annual
Guidance
Cash
Operating
Costs
($ per
ounce)
|
Fekola
|
$386
|
$337
|
$345 -
$390
|
$345 -
$390
|
Masbate
|
$594
|
$548
|
$545 -
$595
|
$675 -
$720
|
Otjikoto
|
$471
|
$502
|
$480 -
$525
|
$480 -
$525
|
La
Libertad
|
$986
|
$934
|
$855 -
$905
|
$745 -
$790
|
El Limon
|
$920
|
$926
|
$850 -
$900
|
$700 -
$750
|
|
|
|
|
|
B2Gold
Consolidated
|
$523
|
$495
|
$505 -
$550
|
$505 -
$550
|
Mine
|
Q4
2018
AISC
($ per
ounce)
|
Full-year
2018
AISC
($ per
ounce)
|
Revised
Annual
Guidance
AISC
($ per
ounce)
|
Original
Annual
Guidance
AISC
($ per
ounce)
|
Fekola
|
$600
|
$533
|
$575 -
$625
|
$575 -
$625
|
Masbate
|
$832
|
$744
|
$780 -
$830
|
$875 -
$925
|
Otjikoto
|
$642
|
$719
|
$700 -
$750
|
$700 -
$750
|
La
Libertad
|
$1,225
|
$1,192
|
$1,160 -
$1,210
|
$1,050 -
$1,100
|
El Limon
|
$1,358
|
$1,466
|
$1,385 -
$1,435
|
$1,135 -
$1,185
|
|
|
|
|
|
B2Gold
Consolidated
|
$814
|
$758
|
$780 -
$830
|
$780 -
$830
|
Fekola Gold Mine – Mali
In its first full-year of commercial production (after achieving
commercial production on November 30,
2017), the new Fekola Mine in Mali continued to significantly outperform
expectations, running above plan on mill throughput and recoveries.
This resulted in Fekola exceeding the upper limit of its already
increased guidance range (of between 420,000 and 430,000 ounces)
with gold production of 439,068 ounces in 2018. Mill throughput was
5.6 million tonnes for the full-year, 12% above the budget of 5.0
million tonnes per annum ("Mtpa"). The mill began running higher
throughput during the second-half of the year after determining
additional capacity of up to 6 million Mtpa was available from a
detailed plant study. Mill gold recoveries averaged 94.7% (compared
to budget of 92.7%) and continue to remain above design predictions
over a broad range of ore types. It is expected that the
recoveries will continue to be within the range of design (92.7%)
and observed (94.7%) recoveries. The average grade processed
was 2.58 grams per tonne ("g/t"), below budget of 2.69 g/t as the
higher than budgeted tonnage processed consisted of medium and
low-grade ore. Completion of limited medium and low-grade ore
campaigns in the third and fourth quarter, confirmed that the
Fekola mill recoveries continue to remain above design predictions.
The resource model continues to perform as expected compared to
actual mined grade and tonnage.
For the fourth quarter 2018, the Fekola Mine produced 105,280
ounces of gold, 16% (14,509 ounces) above original budget. In the
fourth quarter of 2017, the Fekola Mine produced 105,110 ounces of
gold (including 72,903 ounces of pre-commercial production).
To-date (since the commencement of ore processing began in
September 2017 to December 31, 2018), gold production from the
Fekola Mine totaled 550,518 ounces (including 79,243 ounces of
pre-commercial production), exceeding original budget by 22%
(99,995 ounces).
For the full-year 2018, Fekola's cash operating costs were
$337 per ounce (guidance was between
$345 to $390 per ounce) and AISC were $533 per ounce (guidance was between $575 to $625 per
ounce), both beating the low end of their respective guidance
range, mainly as a result of higher gold production. In the fourth
quarter of 2018, Fekola's cash operating costs were $386 per ounce and AISC were $600 per ounce.
Capital expenditures totaled $69
million in 2018, mainly consisting of $21 million for pre-stripping, $14 million in construction carryover for the
completion of the powerhouse and other projects, $11 million for Fadougou relocation costs,
$9 million for mobile equipment
purchases and rebuilds and $6 million
for the construction of stages 2 and 3 of the tailings storage
facility. Capital expenditures in the fourth quarter of 2018
totaled $15 million mainly consisting
of $6 million for pre-stripping,
$4 million for Fadougou relocation
costs and $1 million for mobile
equipment purchases and rebuilds.
For 2019, the Fekola Mine is expected to produce between 420,000
and 430,000 ounces of gold at cash operating costs of between
$370 and $410 per ounce and AISC of between $625 and $665 per
ounce (see "2019 Production Outlook and Cost Guidance" section).
Gold production is scheduled to be weighted towards the second-half
of the year (as new high-grade ore production from Phase 4 of the
Fekola Pit is scheduled to begin in the second-half of 2019). The
budgeted 7% increase in AISC over 2018 revised guidance, mainly
reflects both higher labour costs (as workers transition to
permanent positions) and capital expenditures for mobile equipment
rebuilds/purchases. Fekola's AISC per ounce are forecast to
decrease in the second-half of 2019 compared to the first-half of
the year, mainly due to higher expected gold production in the
second-half and the timing of budgeted capital
expenditures.
Masbate Gold Mine – the
Philippines
The Masbate Mine in the
Philippines also continued to outperform in 2018, producing
an annual record 216,498 ounces of gold, exceeding the upper limit
of its already increased guidance range (of between 200,000 to
210,000 ounces). Gold production for the year also increased by 7%
(14,030 ounces) over 2017. Gold production was significantly higher
than original budget (by 20% or 35,510 ounces) as mill throughput,
recoveries and grade all exceeded budget. This resulted mainly from
higher than expected oxide ore tonnage and grade from the Colorado
Pit. Oxide ore represented 58% of the processed tonnage for the
year versus budget of 29%. Mill throughput was 7.0 million tonnes
(compared to budget of 6.8 million tonnes and 7.0 million tonnes in
2017) and gold recoveries averaged 75.2% (compared to budget of
65.9% and 76.0% in 2017). The average grade processed was 1.29 g/t
(compared to budget of 1.26 g/t and 1.19 g/t in 2017). For the
fourth quarter 2018, the Masbate Mine produced 51,555 ounces of
gold, 13% (5,871 ounces) above original budget.
For the full-year 2018, Masbate's cash operating costs were
$548 per ounce (2017 - $543 per ounce), at the lower end of its already
reduced guidance range (of between $545 to $595 per
ounce) and significantly below initial guidance (of between
$675 to $720 per ounce). Cash operating costs were
significantly lower than originally budgeted as a result of higher
than expected production as well as lower than budgeted mining
costs (with cost savings in drilling, blasting and grade control)
and higher deferred stripping costs which were capitalized (as
compared to budget). In the fourth quarter of 2018, Masbate's cash
operating costs were $594 per ounce
(Q4 2017 - $587 per ounce).
Masbate's AISC for the year were $744 per ounce (2017 - $843 per ounce), well below the low end of its
already reduced guidance range (of between $780 and $830 per
ounce) and significantly below initial guidance (of between
$875 to $925 per ounce). This was mainly attributable to
higher than budgeted production and the lower than budgeted cash
operating costs as discussed above. In the fourth quarter of 2018,
Masbate's AISC were $832 per ounce
(Q4 2017 - $963 per ounce).
Capital expenditures totaled $48
million in 2018, mainly including Masbate processing plant
upgrade costs of $19 million, mobile
equipment purchases and rebuilds of $8
million, pre-stripping costs of $8
million and tailings storage facility costs of $4 million. Capital expenditures in the fourth
quarter of 2018 totaled $14 million,
mainly including Masbate processing plant upgrade costs of
$6 million, mobile equipment
purchases and rebuilds of $3 million,
and pre-stripping costs of $3
million.
The Masbate expansion project for the upgrade of the processing
plant to 8.0 Mtpa was completed in early 2019. With the expansion
now fully commissioned and online, Masbate's annual gold production
is projected to average approximately 200,000 ounces per year
during the mining phase and above 100,000 ounces per year when the
low-grade stockpiles are processed at the end of the open-pit mine
life.
For 2019, the Masbate Mine is expected to produce between
200,000 and 210,000 ounces of gold, primarily from the Main Vein
Pit, at cash operating costs of between $625 and $665 per
ounce and AISC of between $860 and
$900 per ounce (see "2019 Production
Outlook and Cost Guidance" section). The budgeted 9% increase in
AISC over 2018 revised guidance, mainly reflects higher forecast
heavy fuel oil ("HFO") prices and the anticipated processing of
lower grade ore in 2019. Masbate's AISC per ounce are forecast to
decrease in the second-half of 2019 compared to the first-half of
the year, mainly due to the timing of budgeted capital
expenditures.
Otjikoto Gold Mine – Namibia
The Otjikoto Mine in Namibia
also had another solid year in 2018, producing 167,346 ounces of
gold, above the mid-point of its guidance range (of between 160,000
and 170,000 ounces). Otjikoto's production for the year resulted
from processing 3.4 million tonnes (compared to budget of 3.3
million tonnes and 3.5 million tonnes in 2017) at an average grade
of 1.53 g/t (compared to budget of 1.57 g/t and 1.73 g/t in 2017)
and average gold recoveries of 98.7% (compared to budget of 98.0%
and 98.6% in 2017). Compared to the prior-year, gold production was
lower by 13% (24,188 ounces), as planned, due to a negligible
amount of Wolfshag ore being mined in 2018 while Phase 2 of the
Wolfshag Pit is being developed. Higher grade ore production is
planned to resume from the Wolfshag Pit in late
2019.
For the fourth quarter 2018, the Otjikoto Mine produced 44,766
ounces of gold, approximately in-line with budget. A higher grade
zone in the Otjikoto pit originally scheduled for the fourth
quarter of 2018 was not mined due to lower than planned fleet
availability. This zone will be mined and processed in the
first quarter of 2019 using a mining contractor to augment the
current fleet. Compared to the prior-year quarter, gold
production was lower by 15% (7,680 ounces), as planned, due to a
negligible amount of Wolfshag ore being mined in 2018.
For the full-year 2018, Otjikoto's cash operating costs were
$502 per ounce (2017 - $468 per ounce) and AISC were $719 per ounce (2017 - $715 per ounce), both were near the mid-point of
their guidance range. In the fourth quarter of 2018, Otjikoto's
cash operating costs were $471 per
ounce (Q4 2017 - $490 per ounce) and
AISC were $642 per ounce (Q4 2017 -
$606 per ounce).
Capital expenditures totaled $51
million in 2018 and included pre-stripping costs of
$27 million, mobile equipment
rebuilds of $12 million and
$4 million for the installation of
the Otjikoto solar power plant. Capital expenditures in the fourth
quarter of 2018 totaled $9 million
and included $6 million for
pre-stripping costs and $2 million
for mobile equipment rebuilds.
The grand opening for Otjikoto's new Solar Plant was held on
May 29, 2018 and is now providing
approximately 13% of the electricity consumed on site. Changing the
power plant to an HFO solar hybrid plant reduced Otjikoto's HFO
consumption by approximately 2.4 million litres and reduced
associated power generation fuel costs by approximately 10% in
2018.
For 2019, the Otjikoto Mine is forecast to produce between
165,000 and 175,000 ounces of gold, primarily from the Otjikoto
Pit, at cash operating costs of between $520 and $560 per
ounce and AISC of between $905 and
$945 per ounce (see "2019 Production
Outlook and Cost Guidance" section). Gold production is scheduled
to be significantly weighted towards the second-half of the year
(as a higher-grade zone of the Otjikoto Pit is forecast to be
processed in the third quarter of 2019 and high-grade ore
production from Phase 2 of the Wolfshag Pit is scheduled to begin
in late 2019). The budgeted 28% increase in AISC over 2018
guidance, mainly reflects higher budgeted HFO and diesel prices,
increased budgeted mining tonnage and higher expected pre-stripping
sustaining capital costs (for the Wolfshag Pit). Consistent with
the World Gold Council's updated AISC guidance, all budgeted
pre-stripping costs have been included in the AISC calculation,
even though the 2019 pre-stripping activity at Wolfshag is expected
to benefit Otjikoto's operations for several years beyond
2019. Otjikoto's AISC per ounce are forecast to significantly
decrease in the second-half of 2019 compared to the first-half of
the year, mainly due to higher expected gold production in the
second-half and the timing of budgeted pre-stripping costs and
equipment rebuilds which are expected to be incurred mostly in the
first-half of 2019.
La Libertad Gold Mine –
Nicaragua
During 2018, consequences of the political and social unrest in
Nicaragua negatively impacted the
Company's Nicaraguan operations in a number of ways. La Libertad
Mine produced 80,963 ounces of gold (Q4 2018 – 18,193 ounces) in
2018, below the low end of its revised guidance range (of between
90,000 and 95,000 ounces). La Libertad's 2018 production of 80,963
ounces of gold represented 8% of the Company's 2018 consolidated
gold production.
During the national political unrest, roadblocks on major
transport routes restricted the supply of key consumables in
June 2018, resulting in higher grade
open-pit ore being replaced with lower-grade spent ore to reduce
lime and fuel consumption. In addition, development of the Jabali
Antenna underground project was temporarily suspended, resulting in
flooding of the underground workings. The subsequent underground
mine dewatering was completed in mid-August and ramp development
recommenced. Mine development in the fourth quarter of 2018
extended access to three mining areas, Zones 1, 2 and 3 in the
central and eastern areas of the mine. Ore production from Jabali
Antenna underground consisted only of development ore in the fourth
quarter, with ore production from stopes in Zone 1 and Zone 2
commencing in the first quarter of 2019. The mine permit for the
new Jabali Antenna Pit was also delayed (production had been
budgeted to start from the Jabali Antenna Pit in the third quarter
of 2018). However, progress has been made in key steps toward
achieving a mine permit. On February 28,
2019, public consultation was successfully completed for
Jabali Antenna. The Company now anticipates receiving the permit in
time to start production from the pit in the second-half of 2019.
Mine permits are now in place for all other open pit and
underground operations at La Libertad.
Due to the Jabali Antenna delays discussed above, the planned
mill feed for the year of higher grade open-pit and underground ore
from Jabali Antenna was replaced with lower-grade spent ore. As a
result, the head grade for the year was 1.19 g/t versus a budget of
1.76 g/t.
For full-year 2018, La Libertad's cash operating costs were
$934 per ounce, above the revised
guidance range (of between $855 to
$905 per ounce) as a result of lower
production during the year, including the fourth quarter, and AISC
were $1,192 per ounce, within the
revised guidance range (of between $1,160 to $1,210
per ounce). The AISC reflect lower than budget pre-stripping costs
for the San Juan pit ($6 million) and capital costs for the development
of the Jabali Antenna mines due to delays in obtaining the mine
permit ($10 million), partially
offset by the higher cash operating costs. In the fourth quarter of
2018, La Libertad's cash operating costs were $986 per ounce and AISC were $1,225 per ounce.
Capital expenditures totaled $16
million in 2018, consisting primarily of $6 million for underground development,
$5 million for pre-stripping and
$1 million for tailings storage
facilities. Total capital expenditures in the fourth quarter of
2018 were $4 million, consisting
primarily of underground development costs of $2 million and tailings storage facilities of
$1 million.
La Libertad Mine is expected to produce between 95,000 and
100,000 ounces of gold in 2019 at cash operating costs of between
$840 and $880 per ounce and AISC of between $1,150 and $1,190
per ounce (see "2019 Production Outlook and Cost Guidance"
section). La Libertad's production forecast assumes that production
will start from the new Jabali Antenna Pit in the second-half of
2019 (dependent upon the successful completion of resettlement
activities and receipt of the Jabali Antenna open pit permit).
Consequently, La Libertad's gold production is forecast to be
weighted towards the second-half of the year. La Libertad's AISC
per ounce are forecast to significantly decrease in the second-half
of 2019 compared to the first-half of the year, mainly due to
higher expected gold production in the second-half and the timing
of capital expenditures relating to the tailings storage facility
lift ($11 million) which are all
expected to be incurred in the first-half of
2019.
El Limon Gold Mine – Nicaragua
El Limon Mine in Nicaragua
produced 49,629 ounces of gold in 2018 (Q4 2018 – 11,893 ounces),
near the low end of its revised guidance range (of between 50,000
and 55,000 ounces). El Limon's 2018 production of 49,629 ounces of
gold represents 5% of the Company's 2018 consolidated gold
production. Gold production at El Limon was also affected by the
national political unrest, resulting in delays for the receipt of
required permits for explosives and other shipments. However, later
in the fourth quarter of 2018, mining operations at El Limon
returned to budgeted (normal) production rates, and development of
the new Limon Central pit commenced in October 2018 after receipt of the mine
permit. In June 2018, El Limon's
gold production was also impacted by illegal road blockades. The
blockades were related to local employment issues for the community
and were resolved through dialogue with a newly developed community
stakeholder committee to ensure local concerns were
addressed.
For full-year 2018, El Limon's cash operating costs were
$926 per ounce and AISC were
$1,466 per ounce, both marginally
exceeding the top end of their revised guidance range, mainly
attributable to lower production. In the fourth quarter of 2018, El
Limon's cash operating costs were $920 per ounce and AISC were $1,358 per ounce.
Capital expenditures totaled $22
million in 2018, consisting primarily of $8 million of underground development costs for
Santa Pancha, $3 million of tailing storage facility costs and
$2 million for mobile equipment
purchases. Capital expenditures in the fourth quarter of 2018
totaled $5 million which consisted
mainly of underground development costs for Santa Pancha of $2
million.
For 2019, El Limon is expected to produce between 55,000 and
60,000 ounces of gold at cash operating costs of between
$720 and $760 per ounce and AISC of between $1,005 and $1,045
per ounce (see "2019 Production Outlook and Cost Guidance"
section). Gold production is scheduled to be weighted towards the
second-half of the year, as high-grade ore production from the new
Limon Central Pit is scheduled to commence at the beginning of the
second-half of 2019. El Limon's AISC per ounce are forecast to
significantly decrease in the second-half of 2019 compared to the
first-half of the year, mainly due to higher expected gold
production in the second-half and the timing of capital
expenditures.
2019 Production Outlook and Cost Guidance
In 2019, B2Gold remains well positioned for continued strong
operational and financial performance with consolidated gold
production forecast to be in the range of between 935,000 and
975,000 ounces.
Consolidated cash costs are projected to remain low in 2019 with
cash operating costs forecast to be between $520 and $560 per
ounce (2018 guidance was between $505
and $550 per ounce) and AISC forecast
to be between $835 and $875 per ounce (2018 guidance was between
$780 and $830 per ounce). The budgeted 6% increase in AISC
per ounce over 2018 guidance, mainly relates to slightly higher
forecast cash operating costs and higher expected pre-stripping
sustaining capital costs at Otjikoto.
If a gold price assumption of $1,300 per ounce is used, the Company expects to
generate cash flow from operations of approximately $410 million in 2019 (if a gold price assumption
of $1,250 per ounce is used for 2019,
the Company expects to generate cash flow from operations of
approximately $370 million).
Mine-by-mine 2019 ranges for forecast gold production, cash
operating costs per ounce and AISC per ounce are presented in the
following tables below (presented on a 100% basis). Consolidated
gold production, cash operating costs per ounce and AISC per ounce
are all forecast to vary through the year. Consolidated gold
production is expected to be weighted towards the second-half of
2019 (approximately 14% higher than the first-half), reflecting the
development of open pits in the first-half of the year and
subsequent ore production from those pits in the second-half.
Consolidated cash operating costs are expected to be approximately
9% lower and AISC are expected to be approximately 21% lower,
respectively, in the second-half of 2019 versus the first-half of
the year.
Mine
|
H1
2019
Forecast
Gold
Production
(ounces)
|
H2
2019
Forecast
Gold
Production
(ounces)
|
Full-year
2019
Forecast
Gold
Production
(ounces)
|
Fekola
|
205,000 -
210,000
|
215,000 -
220,000
|
420,000 -
430,000
|
Masbate
|
100,000 -
105,000
|
100,000 -
105,000
|
200,000 -
210,000
|
Otjikoto
|
66,000 -
71,000
|
99,000 -
104,000
|
165,000 -
175,000
|
La
Libertad
|
43,000 -
45,000
|
52,000 -
55,000
|
95,000 -
100,000
|
El Limon
|
22,000 -
25,000
|
33,000 -
35,000
|
55,000 -
60,000
|
|
|
|
|
B2Gold
Consolidated
|
436,000 -
456,000
|
499,000 -
519,000
|
935,000 -
975,000
|
Mine
|
Full-year
2019
Forecast
Cash
Operating
Costs
($ per
ounce)
|
Full-year
2019
Forecast
AISC
($ per
ounce)
|
Fekola
|
$370 -
$410
|
$625 -
$665
|
Masbate
|
$625 -
$665
|
$860 -
$900
|
Otjikoto
|
$520 -
$560
|
$905 -
$945
|
La
Libertad
|
$840 -
$880
|
$1,150 -
$1,190
|
El Limon
|
$720 -
$760
|
$1,005 -
$1,045
|
|
|
|
B2Gold
Consolidated
|
$520 -
$560
|
$835 -
$875
|
Exploration and Development
Following a very successful year for exploration in 2018, B2Gold
is planning another year of aggressive exploration in 2019 with a
budget of approximately $43 million.
Exploration will focus mainly on West
Africa and around the Company's mines. The Company has also
allocated approximately $8 million
for other grass roots exploration programs.
Fekola Gold Mine – Mali
For 2019, exploration on the licenses in Mali is budgeted to total $18 million. The Company plans to continue its
successful drilling to convert Fekola's Inferred Resources to
Indicated, and further explore through drilling the potential to
the north and west of Fekola. Infill drilling of approximately
25,000 metres of diamond drilling has begun. These and previous
drill results will be utilized to calculate new probable mineral
reserves for the extended Fekola deposit. The new Cardinal target,
located less than 1 km west of the Fekola Pit, will also be further
drill-tested.
In October 2018, B2Gold announced
(see news release dated 10/25/2018) a substantial increase
in the Mineral Resource estimate for the Fekola Mine and positive
results from the ongoing Fekola mill expansion study. The new
increased Mineral Resource and the positive results, to date, from
the Fekola mill expansion study indicate the potential to increase
mill throughput tonnage and increase annual gold production from
Fekola with moderate capital expenditure. Based on approximately
192,000 metres of exploration drilling in 928 drill holes
(including 70,877 metres in 294 holes drilled by B2Gold since
June 2014), B2Gold reported an
updated Indicated Mineral Resource estimate of 92,810,000 tonnes at
1.92 g/t gold, for a total of 5,730,000 ounces of gold, and an
Inferred Mineral Resource estimate of 26,500,000 tonnes at 1.61 g/t
gold, for a total of 1,370,000 ounces of gold, for the Fekola Mine.
Mineral Resources were reported within a pit shell using a
$1,400 per ounce gold price and above
a cut-off of 0.6 g/t gold. Probable Reserves at the start of
production at Fekola were 49.2 million tonnes at 2.35 g/t gold
containing 3.7 million ounces. These initial reserves (less
material mined to December 31, 2017)
are contained within the updated resource. In addition, pit shells
were run using a gold price of $1,250
per ounce and demonstrate Fekola's resiliency to lower gold prices.
The Indicated Mineral Resource contains 90,670,000 tonnes at 1.94
g/t gold for a total of 5,667,000 ounces of gold, and the Inferred
Mineral Resource of 16,620,000 tonnes at 1.58 g/t gold containing
844,000 ounces of gold. The new Mineral Resource is contiguous to
the north of the current Fekola reserve pit boundary and extends
the resource pit boundary 1.2 km to the north.
The Company recently completed a preliminary Fekola expansion
study to evaluate the potential to expand the Fekola mine and mill
from the base case of 6 Mtpa of ore throughput to 7.5 Mtpa. The
results of the preliminary study indicate robust economics for the
7.5 Mtpa expansion case with estimated process capital costs of
$50 million. Given the additional
capacity of the Fekola primary crusher and SAG mill and other
process systems, the study demonstrated that the 7.5 Mtpa upside
can be achieved with an upgrade of the ball mill circuit as well as
other equipment upgrades.
Based on the positive results of the preliminary Fekola
expansion study the Company has contracted Whittle Consulting to
work together with the Company's technical teams to conduct a study
to optimize the Fekola expansion. The study will evaluate many
aspects of potential optimization including mining production
rates, pit and phase scheduling, dynamic cut-off grades, ore
stockpiling, blending, and dynamic processing throughput and
recovery. In addition, the study will examine various processing
throughput scenarios to maximize project net present value, and the
results will guide mining equipment, mill expansion, and project
schedule decisions. Initial results of the optimized Fekola
expansion study are expected to be released by the end of
March 2019. Additionally, the Company
will commence work on the Front-End Engineering and Design (FEED)
for the expansion.
Included in Mali's 2019
exploration budget is $3 million for
14,000 metres of planned RC and diamond drilling on the Anaconda
zones, located approximately 20 km from Fekola, to further drill
mineralized sulphide targets, below the shallow oxidized saprolite
zones where previous drilling has intersected good grade
mineralization. In June 2017 (see
news release dated 06/15/2017), the Company released an
Inferred Mineral Resource estimate containing 767,000 ounces of
gold at 1.1 g/t at Anaconda in the saprolite
mineralization. Additional metallurgical testwork and
engineering studies are being carried out on Anaconda towards
evaluating the potential for a stand-alone oxide mine.
El Limon Gold Mine – Nicaragua
For 2019, El Limon's exploration budget is $3 million for a total of 3,300 metres of planned
diamond drilling. The program will focus on drilling the northern
extension of the El Limon Central zone and other targets identified
on the property. The El Limon Central zone is also open at depth,
indicating the potential to mine ore from underground in El Limon
Central area once open-pit mining is completed.
In February 2018, the Company
announced a positive initial open-pit Inferred Mineral Resource at
the newly discovered El Limon Central zone at El Limon property in
Nicaragua of 5,130,000 tonnes at a
grade of 4.92 g/t of gold containing 812,000 ounces of gold (see
news release dated 02/23/2018). This resource has provided the
open-pit resources for the expansion study. Total Inferred Mineral
Resources from underground and open-pit sources included in this
study consist of approximately 6.0 million tonnes at a grade of 4.3
g/t, containing approximately 829,000 ounces. Mineral Resources
that are not Mineral Reserves do not have demonstrated economic
viability.
In October 2018, the Company
announced (see news release dated 10/22/2018) positive
results of an expansion study for El Limon Mine and that the
Company had signed a renewed two-year Collective Agreement with the
labour unions. The expansion study was conducted as a preliminary
economic assessment to evaluate the life-of-mine options for
combining the remaining underground Inferred Mineral Resources with
the new El Limon Central zone open-pit Inferred Mineral Resource.
The results of this study recommend the expansion of the existing
plant from 485,000 tonnes per annum ("tpa") to 600,000 tpa and
addition of a third stage of milling to achieve a fine grind. The
result would be a much longer mine life with significantly higher
gold production and lower cash operating costs and AISC than
included in the current life-of-mine plan. The third stage of
milling also allows for the reprocessing of old tailings at the end
of the mine life. Estimated expansion capital costs over a period
of approximately 16 months for plant upgrades and expansions were
reported as approximately $35
million.
B2Gold's technical team is currently updating El Limon Inferred
Mineral Resource to include recent additional drilling results and
conducting mine optimization studies with a view to potentially
further improve the positive economics for El Limon expansion.
These studies are expected to be completed by the end of the first
quarter of 2019. Current plans for 2019 are to complete upgrades of
the grinding circuit at a capital cost of approximately
$2 million. This work is underway and
is scheduled to be completed by October
2019. This upgrade will assure that the El Limon plant will
be able to maintain grind size and a throughput rate of 500,000 tpa
when the harder Limon Central ore is fed to the mill.
Gramalote Joint Venture Update – Colombia
The Gramalote property is an AngloGold Ashanti Ltd. ("AngloGold
Ashanti") - B2Gold joint venture, with AngloGold Ashanti as the
operator. The Mineral Resource model for Gramalote Ridge was
recently redone by AngloGold Ashanti using additional information
and some key reinterpretations. This new model indicated the
potential for a resource with improved gold grades and contained
ounces that could result in improved project economics. B2Gold has
reviewed this new model and a third-party audit was completed in
February 2019. As part of this review, B2Gold also completed
its own internal model. Based on the recommendations of the
third-party audit, additional block models are being completed for
the Gramalote deposit. The economics of the project are currently
being re-evaluated, and budgets, schedules and work plans for
advancing Gramalote will be developed once this evaluation has been
completed.
Summary and Outlook
For B2Gold, 2018 was a year of transformational growth, as
outlined above, driven by the first full-year of commercial
production from its new large, low-cost Fekola Mine in Mali and record annual production from its
Masbate Mine in the Philippines.
For the tenth straight consecutive year, the Company achieved
record annual consolidated gold production. As a result of 2018
gold production of over 950,000 ounces, a 51% increase over 2017,
B2Gold nearly doubled its reported gold revenues for the year
in 2018 to $1.2 billion. Due to the
increase in low-cost production from Fekola and the Company's
ongoing disciplined cost control, at all projects, reported cash
flows from operations nearly tripled from $155 million in 2017 to $451 million in 2018. B2Gold utilized this
additional cash flow to reduce debt by $220
million, from approximately $700
million at the beginning of the year to $480 million by year-end. B2Gold ended 2018 with
cash of $103 million.
The Fekola Mine success is the latest in a series of accretive
acquisitions, construction and exploration successes that have
resulted in a steady rise in profitable production over the last 11
years, from 2007, when B2Gold was created as a junior exploration
company with no gold production, to over 950,000 ounces of gold
from the Company's five gold mines in four countries in 2018. The
Company's dramatic growth has been driven by a number of key
factors. Amongst them are: the Company's disciplined approach to
acquisitions, based on detailed due diligence by B2Gold's
experienced, technical, legal and financial teams; the Company's
demonstrated track record of success in operating in numerous
countries worldwide, the outstanding performance of our in-house
construction team; B2Gold's highly-experienced exploration team
that has realized significant exploration success at the Company's
properties; and our dedicated country and mine management teams and
employees, who are supported and empowered by our corporate
executive and management teams.
Given the Company's successful history of gold exploration and
mine expansion and our fast track strategy, our exploration team
continued drilling to expand the Fekola deposit to the north during
construction. In October 2018, the
Company announced the success of this exploration drill program,
realizing a dramatic increase in indicated and inferred gold
resources at Fekola. Based on this dramatic exploration success,
the Company's engineers began an expansion study for the Fekola
mill in January 2018, to conduct
various tests to establish the capital costs, economics, and
schedule to expand the Fekola throughput from the current 6 Mtpa to
7.5 Mtpa. This preliminary study indicates robust economics from
the proposed expansion, with low projected capital expenditures of
approximately $50 million for
processing facilities. The expansion study is currently being
optimized with initial results expected to be released by the end
of March 2019.
The Company is also assessing the potential to advance the
Gramalote Project. The Mineral Resource model for Gramalote Ridge
was recently redone (by AngloGold Ashanti) which indicates the
potential for a resource with improved gold grades and contained
ounces that could result in improved project economics. The
economics of the project are currently being re-evaluated, and the
Company expects to release the results of the new Gramalote
economic study in the second quarter of 2019.
As we continue to grow, we remain grounded in our commitment to
our Health and Safety, Environment and Social Performance Standards
as detailed above. In 2018, we achieved our best safety year yet –
reducing our Lost-Time Injury Frequency Rate (LTIFR) rate to
0.28. This included reaching over 3 years and approximately
17.8 million hours without a lost time injury (LTI) at Masbate and
4 of our mines achieving a record of three or fewer LTIs in
2018.
Looking forward, B2Gold will continue in 2019 to maximize cash
flows and maintain a strong financial position by continuing our
impressive operational and financial performance from existing
mines, continue debt repayments, pursue internal growth through
further exploration, development and expansion of existing
projects, pursue greenfield exploration projects alone and in joint
ventures, and evaluate accretive development and production
acquisition opportunities. In April
2019, the Company expects to commence the mill expansion at
the Fekola Mine and also in the second quarter of 2019 complete an
updated Preliminary Economic Assessment ("PEA") for the 49% owned
Gramalote project in Colombia. If
the Gramalote updated PEA is positive, the Company will consider,
with its joint venture partner AngloGold Ashanti, whether to
proceed to a final feasibility study. In addition, in 2019 B2Gold's
exploration team will continue exploration at Fekola, further
defining the Fekola North extension zone which remains open and
drill beneath the shallow Anaconda saprolite zone, and also further
test other targets on the Fekola property.
After such a transformative year by many measures in 2018,
management is excited about continuing our success in 2019 and
beyond.
Qualified Persons
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 matters contained in
this news release.
Tom Garagan, Senior Vice
President of Exploration of B2Gold, a qualified person under NI
43-101, has approved the scientific and technical information
regarding exploration matters contained in this news release.
Dale Craig, Vice President of
Operations at B2Gold, a qualified person under NI 43-101, has
approved the scientific and technical information regarding
engineering matters related to El Limon development contained in
this news release.
John Rajala, Vice President of
Metallurgy at B2Gold, a qualified person under NI 43-101, has
approved the scientific and technical information regarding
engineering matters related to Fekola expansion studies.
Fourth Quarter and Year-End 2018 Financial Results –
Conference Call/Webcast Details
B2Gold executives will host a conference call to discuss the
results on Wednesday, March 13,
2019, at 10:00 am
PDT/1:00 pm EDT. You may
access the call by dialing the operator at +1 647-788-4919 (local
or international) or toll free at +1 877-291-4570 prior to the
scheduled start time, or you may listen to the call via webcast by
clicking here:
https://www.investornetwork.com/event/presentation/42081. A
playback version will be available for two weeks after the call at
+1 416-621-4642 (local or international) or toll free at +1
800-585-8367 (passcode 2594969).
ON BEHALF OF B2GOLD CORP.
"Clive T. Johnson"
President and Chief
Executive Officer
For more information on B2Gold please visit the Company website
at www.b2gold.com or contact:
Ian MacLean
Vice President, Investor Relations
604-681-8371
imaclean@b2gold.com
|
Katie Bromley
Manager, Investor Relations & Public Relations
604-681-8371
kbromley@b2gold.com
|
The Toronto Stock Exchange and NYSE American LLC
neither approve nor disapprove the information
contained in this news release.
Production results and production guidance presented in this
news release reflect total production at the mines B2Gold operates
on a 100% project basis.
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; outlook; guidance;
forecasts; estimates; and other
statements regarding future or estimated financial
and operational performance events, gold
production and sales, revenues and cash flows,
capital and operating costs, including projected cash
operating costs and AISC, and budgets;
statements regarding future or estimated mine life,
metal price assumptions, ore grades or
sources, stripping ratios, throughput, ore
processing; statements regarding anticipated
exploration, drilling, development, construction, permitting and
other activities or achievements of B2Gold;
and including, without limitation: B2Gold remaining well positioned
for continued strong operational and financial performance; gold
production at the Fekola Mine being scheduled to be weighted in the
second-half of 2019 (as new high-grade ore production from Phase 4
of the Fekola Pit is scheduled to begin in the second-half 2019);
the Fekola expansion study, the focus and subject thereof, and the
anticipated timing of release of such study; B2Gold commencing work
on the FEED for such expansion; the anticipated timing of B2Gold
making an expansion decision with respect to the optimal mill size
and mine plan for Fekola going forward; production at the Masbate
Mine being projected to average approximately 200,000 ounces per
year during the mining phase and above 100,000 ounces per year when
the low-grade stockpiles are processed at the end of the open-pit
mine life; HFO prices being projected to increase in 2019; lower
than expected mining tonnage at the Otjikoto Mine being resolved in
2019 with the use of a budgeted mining contractor; gold production
at the Otjikoto Mine being weighted towards the second half of
2019; higher-grade zone of the Otjikoto Pit being forecast to be
processed in the third quarter of 2019; high-grade ore production
from Phase 2 of the Wolfshag Pit being scheduled to begin in late
2019; pre-stripping and equipment rebuild costs being expected to
be incurred mostly in the first-half of 2019; the anticipated
timing of receipt of the Jabali Antenna Pit and the start of
production therefrom; gold production at La Libertad being weighted
towards the second-half of 2019; capital expenditures relating to
the tailing storage facility lift being expected to be incurred in
the first half of 2019; gold production being scheduled to be
weighted towards the second half of 2019 at El Limon; high-grade
ore production from the new Limon Central Pit being scheduled to
commence at the beginning of the second-half of 2019; the El Limon
mine optimization studies and the timing of completion thereof; the
timing of release the results of new economics at Gramalote in the
second quarter of 2019; budgets, schedules and works plans for
advancing Gramalote being developed once the re-evaluation of the
project's economics has been completed; B2Gold and AngloGold
Ashanti making a decision whether to advance the Gramalote Project
to the feasibility stage, and the timing thereof; B2Gold's
consolidated gold production being expected to be weighted towards
the second-half of 2019 and the anticipated reduction in related
costs; B2Gold planning another year of aggressive exploration
(including the areas of focus thereof) and development programs for
2019 to unlock the ultimate potential of its existing portfolio of
properties and to pursue grass roots explorations through property
acquisitions and joint ventures; and B2Gold remaining focused on
maximizing cash flows by continuing its impressive operational and
financial performance from existing mines as well as pursuing its
own internal organic growth projects.. Estimates of mineral
resources and reserves are also forward-looking statements because
they constitute projections 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 risks associated with or related to: the
volatility of metal prices and B2Gold's common shares; the dangers
inherent in exploration, development and mining activities; the
uncertainty of reserve and resource estimates; not achieving
production, cost or other estimates; actual production, development
plans and costs differing materially from the estimates in B2Gold's
feasibility studies; the ability to obtain and maintain any
necessary permits, consents or authorizations required for mining
activities; the current ongoing instability in Nicaragua and the ramifications
thereof; environmental regulations or hazards and compliance
with complex regulations associated with mining activities; the
ability to replace mineral reserves and identify acquisition
opportunities; the unknown liabilities of companies acquired by
B2Gold; the ability to successfully integrate new acquisitions;
fluctuations in exchange rates; the availability of financing;
financing and debt activities, including potential restrictions
imposed on B2Gold's operations as a result thereof and the ability
to generate sufficient cash flows; operations in foreign and
developing countries and the compliance with foreign laws,
including those associated with operations in Mali, Namibia, the
Philippines, Nicaragua and
Burkina Faso and including risks
related to changes in foreign laws and changing policies related to
mining and local ownership requirements; remote operations and the
availability of adequate infrastructure; fluctuations in price and
availability of energy and other inputs necessary for mining
operations; shortages or cost increases in necessary equipment,
supplies and labour; regulatory, political and country risks,
including local instability or acts of terrorism and the effects
thereof; the reliance upon contractors, third parties and joint
venture partners; the lack of sole decision-making authority
related to Filminera Resources Corporation, which owns the Masbate
Project; challenges to title or surface rights; the dependence on
key personnel and the ability to attract and retain skilled
personnel; the risk of an uninsurable or uninsured loss; adverse
climate and weather conditions; litigation risk; competition with
other mining companies; 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; conflicts with small
scale miners; failures of information systems or information
security threats; the final outcome of the audit by the Philippines
Department of Environment and Natural Resources in relation to the
Masbate Project; the ability to maintain adequate internal controls
over financial reporting as required by law, including Section 404
of the Sarbanes-Oxley Act; compliance with anti-corruption laws; 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, B2Gold's current Form 40-F Annual Report 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
"Websites"). The list is not exhaustive of the
factors that may affect B2Gold's forward-looking
statements.
B2Gold's forward-looking statements are based on the
applicable assumptions and factors management considers reasonable
as of the date hereof, based on the information available to
management at such time. These assumptions and factors include, but
are not limited to, assumptions and factors related to B2Gold's
ability to carry on current and future operations, including:
development and exploration activities; the timing, extent,
duration and economic viability of such operations, including any
mineral resources or reserves identified thereby; the accuracy and
reliability of estimates, projections, forecasts, studies and
assessments; B2Gold's ability to meet or achieve estimates,
projections and forecasts; the availability and cost of inputs; the
price and market for outputs, including gold; the timely receipt of
necessary approvals or permits; the ability to meet current and
future obligations; the ability to obtain timely financing on
reasonable terms when required; the current and future social,
economic and political conditions; and other assumptions and
factors generally associated with the mining industry.
B2Gold's forward-looking statements are based on the opinions
and estimates of management and reflect their current expectations
regarding future events and operating performance and speak only as
of the date hereof. B2Gold 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. There can be no assurance
that forward-looking 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. For the reasons set forth
above, undue reliance should not be placed on forward-looking
statements.
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", "adjusted net income"
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 on the
Websites, under the heading "Non-IFRS Measures" for a
more detailed discussion of how B2Gold calculates certain of
such measures and a reconciliation of certain
measures to IFRS terms.
Cautionary Note to United States
Investors
The disclosure in this news release
was prepared in accordance with Canadian National Instrument 43-101
("NI 43-101"), which differs significantly from the current
requirements of the SEC set out in Industry Guide 7. Accordingly,
such disclosure may not be comparable to similar information made
public by companies that report in accordance with Industry Guide
7. In particular, this news release may refer to "mineral
resources," "measured mineral resources," "indicated mineral
resources" or "inferred mineral resources". While these categories
of mineralization are recognized and required by Canadian
securities laws, they are not recognized by Industry Guide 7 and
are not normally permitted to be disclosed in SEC filings by U.S.
companies. U.S. investors are cautioned not to assume that any part
of a "mineral resource," "measured mineral resource," "indicated
mineral resource" or "inferred mineral resource" will ever be
converted into a "reserve." In addition, this news release uses the
terms "reserves" and "probable mineral reserves" which are reported
by the Company under Canadian standards and may not qualify as
reserves under Industry Guide 7. Under Industry Guide 7,
mineralization may not be classified as a "reserve" unless the
mineralization can be economically and legally extracted or
produced at the time the "reserve" determination is made.
Accordingly, information contained or referenced in this news
release containing descriptions of the Company's mineral deposits
may not be compatible to similar information made public by U.S.
companies subject to the reporting and disclosure requirements of
Industry Guide 7. "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 will ever be upgraded
to a higher category. Disclosure of "contained ounces" in a
resource is permitted disclosure under Canadian reporting
standards; however, Industry Guide 7 normally only permits issuers
to report mineralization that does not constitute "reserves" by
Industry Guide 7 standards as in-place tonnage and grade without
reference to unit measures. Historical results or feasibility
models presented herein are not guarantees or expectations of
future performance.
B2GOLD CORP.
CONSOLIDATED STATEMENTS OF
OPERATIONS
(Expressed in thousands of United States dollars, except per share
amounts)
(Unaudited)
|
For the
three
months ended
Dec. 31, 2018
|
|
For the three
months ended
Dec. 31, 2017
|
|
For the
twelve
months ended
Dec. 31, 2018
|
|
For the twelve
months ended
Dec. 31, 2017
|
|
|
|
|
|
|
|
|
Gold
revenue
|
$
|
272,122
|
|
$
|
173,990
|
|
$
|
1,225,061
|
|
$
|
638,677
|
|
|
|
|
|
|
|
|
Cost of
sales
|
|
|
|
|
|
|
|
Production
costs
|
(112,295)
|
|
(81,772)
|
|
(475,702)
|
|
(302,394)
|
Depreciation and
depletion
|
(74,591)
|
|
(41,523)
|
|
(306,429)
|
|
(160,469)
|
Royalties and
production taxes
|
(18,232)
|
|
(7,576)
|
|
(78,274)
|
|
(25,530)
|
Total cost of
sales
|
(205,118)
|
|
(130,871)
|
|
(860,405)
|
|
(488,393)
|
|
|
|
|
|
|
|
|
Gross
profit
|
66,994
|
|
43,119
|
|
364,656
|
|
150,284
|
|
|
|
|
|
|
|
|
General and
administrative
|
(20,960)
|
|
(18,384)
|
|
(56,138)
|
|
(43,613)
|
Share-based
payments
|
(5,311)
|
|
(4,875)
|
|
(21,693)
|
|
(18,127)
|
Impairment of
long-lived assets, net
|
(34,207)
|
|
—
|
|
(55,353)
|
|
—
|
Gain on sale of Lynn
Lake royalty
|
—
|
|
—
|
|
—
|
|
6,593
|
Write-down of mineral
property interests
|
(8,899)
|
|
(665)
|
|
(9,398)
|
|
(4,150)
|
Provision for
non-recoverable input taxes
|
(1,312)
|
|
(840)
|
|
(1,646)
|
|
(2,180)
|
Foreign exchange
(losses) gains
|
(186)
|
|
1,868
|
|
4,065
|
|
(1,012)
|
Other
|
(2,773)
|
|
398
|
|
(4,979)
|
|
(1,145)
|
Operating
income
|
(6,654)
|
|
20,621
|
|
219,514
|
|
86,650
|
|
|
|
|
|
|
|
|
Unrealized (loss)
gain on fair value of convertible notes
|
—
|
|
(7,212)
|
|
10,651
|
|
(11,144)
|
Community
relations
|
(2,538)
|
|
(1,183)
|
|
(6,855)
|
|
(5,512)
|
Interest and
financing expense
|
(7,379)
|
|
(5,495)
|
|
(31,754)
|
|
(12,906)
|
Realized gains
(losses) on derivative instruments
|
1,318
|
|
(680)
|
|
5,169
|
|
(3,364)
|
Unrealized (losses)
gains on derivative instruments
|
(13,026)
|
|
9,700
|
|
(4,757)
|
|
9,684
|
Write-down of
long-term investments
|
—
|
|
—
|
|
—
|
|
(1,613)
|
Other
|
466
|
|
8,522
|
|
745
|
|
7,101
|
Income before
taxes
|
(27,813)
|
|
24,273
|
|
192,713
|
|
68,896
|
|
|
|
|
|
|
|
|
Current income tax,
withholding and other taxes
|
(20,020)
|
|
(13,267)
|
|
(109,200)
|
|
(27,500)
|
Deferred income tax
(expense) recovery
|
(1,843)
|
|
23,460
|
|
(38,392)
|
|
20,170
|
Net (loss) income
for the period
|
$
|
(49,676)
|
|
$
|
34,466
|
|
$
|
45,121
|
|
$
|
61,566
|
|
|
|
|
|
|
|
|
Attributable
to:
|
|
|
|
|
|
|
|
|
Shareholders of the
Company
|
$
|
(58,948)
|
|
$
|
29,879
|
|
$
|
28,938
|
|
$
|
56,852
|
Non-controlling
interests
|
9,272
|
|
4,587
|
|
16,183
|
|
4,714
|
Net (loss) income
for the period
|
$
|
(49,676)
|
|
$
|
34,466
|
|
$
|
45,121
|
|
$
|
61,566
|
|
|
|
|
|
|
|
|
Earnings (loss)
per share (attributable to shareholders of the
Company)
|
|
|
|
|
|
|
|
Basic
|
$
|
(0.06)
|
|
$
|
0.03
|
|
$
|
0.03
|
|
$
|
0.06
|
Diluted
|
$
|
(0.06)
|
|
$
|
0.04
|
|
$
|
0.02
|
|
$
|
0.06
|
|
|
|
|
|
|
|
|
Weighted average
number of common shares outstanding (in
thousands)
|
|
|
|
|
|
|
|
Basic
|
991,293
|
|
979,691
|
|
986,755
|
|
976,366
|
Diluted
|
991,293
|
|
993,848
|
|
1,047,368
|
|
991,413
|
B2GOLD CORP.
CONSOLIDATED STATEMENTS OF CASH
FLOWS
(Expressed in thousands of United States dollars)
(Unaudited)
|
For the
three
months ended
Dec. 31, 2018
|
|
For the three
months ended
Dec. 31, 2017
|
|
For the
twelve
months ended
Dec. 31, 2018
|
|
For the twelve
months ended
Dec. 31, 2017
|
Operating
activities
|
|
|
|
|
|
|
|
Net (loss) income for
the period
|
$
|
(49,676)
|
|
$
|
34,466
|
|
$
|
45,121
|
|
$
|
61,566
|
Mine restoration
provisions settled
|
(714)
|
|
(65)
|
|
(1,040)
|
|
(320)
|
Non-cash charges,
net
|
131,366
|
|
8,440
|
|
396,263
|
|
109,818
|
Changes in non-cash
working capital
|
(7,450)
|
|
(16,867)
|
|
8,630
|
|
(39,681)
|
Proceeds from prepaid
sales
|
—
|
|
—
|
|
—
|
|
30,000
|
Changes in long-term
value added tax receivables
|
619
|
|
(368)
|
|
1,893
|
|
(6,383)
|
Cash provided by
operating activities
|
74,145
|
|
25,606
|
|
450,867
|
|
155,000
|
|
|
|
|
|
|
|
|
Financing
activities
|
|
|
|
|
|
|
|
Repayment of
convertible notes
|
(258,750)
|
|
—
|
|
(258,750)
|
|
—
|
Revolving credit
facility, drawdowns net of transaction costs
|
25,000
|
|
25,000
|
|
250,000
|
|
145,341
|
Repayment of revolving
credit facility
|
(25,000)
|
|
—
|
|
(200,000)
|
|
—
|
Equipment loan
facilities, drawdowns net of transaction costs
|
3,269
|
|
16,893
|
|
32,117
|
|
68,224
|
Repayment of equipment
loan facilities
|
(7,207)
|
|
(7,668)
|
|
(27,670)
|
|
(16,782)
|
Common shares issued
for cash on exercise of stock options
|
7,348
|
|
1,435
|
|
22,805
|
|
26,503
|
Interest and
commitment fees paid
|
(10,684)
|
|
(9,590)
|
|
(36,878)
|
|
(20,623)
|
Restricted cash
movement
|
758
|
|
(1,137)
|
|
(621)
|
|
(8,085)
|
Other
|
(354)
|
|
(421)
|
|
(1,512)
|
|
(1,556)
|
Cash (used)
provided by financing activities
|
(265,620)
|
|
24,512
|
|
(220,509)
|
|
193,022
|
|
|
|
|
|
|
|
|
Investing
activities
|
|
|
|
|
|
|
|
Expenditures on mining
interests:
|
|
|
|
|
|
|
|
Fekola Mine, including
sales proceeds net of pre-production costs
|
(14,983)
|
|
54,678
|
|
(68,520)
|
|
(153,431)
|
Otjikoto
Mine
|
(9,452)
|
|
(5,084)
|
|
(50,831)
|
|
(41,172)
|
Masbate
Mine
|
(14,412)
|
|
(16,107)
|
|
(47,905)
|
|
(52,587)
|
Libertad
Mine
|
(3,535)
|
|
(5,669)
|
|
(16,143)
|
|
(23,806)
|
Limon Mine
|
(4,723)
|
|
(5,072)
|
|
(22,008)
|
|
(16,048)
|
Gramalote
Project
|
(9)
|
|
(3,275)
|
|
(6,049)
|
|
(11,967)
|
Other exploration and
development
|
(13,081)
|
|
(13,058)
|
|
(60,138)
|
|
(53,673)
|
Purchase of
non-controlling interest
|
—
|
|
(1,500)
|
|
(2,500)
|
|
(1,500)
|
Cash proceeds from
sale of Lynn Lake royalty, net of transaction costs
|
—
|
|
—
|
|
—
|
|
6,593
|
Other
|
(182)
|
|
949
|
|
626
|
|
748
|
Cash (used)
provided by investing activities
|
(60,377)
|
|
5,862
|
|
(273,468)
|
|
(346,843)
|
|
|
|
|
|
|
|
|
(Decrease)
increase in cash and cash equivalents
|
(251,852)
|
|
55,980
|
|
(43,110)
|
|
1,179
|
|
|
|
|
|
|
|
|
Effect of exchange
rate changes on cash and cash equivalents
|
(237)
|
|
1,779
|
|
(1,606)
|
|
1,618
|
Cash and cash
equivalents, beginning of period
|
354,841
|
|
89,709
|
|
147,468
|
|
144,671
|
Cash and cash
equivalents, end of period
|
$
|
102,752
|
|
$
|
147,486
|
|
$
|
102,752
|
|
$
|
147,468
|
B2GOLD CORP.
CONSOLIDATED BALANCE
SHEETS
(Expressed in thousands of United States dollars)
|
As
at
|
|
As
at
|
|
December
31,
|
|
December
31,
|
|
2018
|
|
2017
|
Assets
|
|
|
|
Current
|
|
|
|
Cash and cash
equivalents
|
$
|
102,752
|
|
$
|
147,468
|
Accounts receivable,
prepaids and other
|
12,651
|
|
20,603
|
Value-added and other
tax receivables
|
13,657
|
|
21,335
|
Inventories
|
233,971
|
|
206,445
|
|
363,031
|
|
395,851
|
Long-term
investments
|
4,155
|
|
9,744
|
Value-added tax
receivables
|
22,185
|
|
22,318
|
Mining
interests
|
|
|
|
- Owned by
subsidiaries
|
2,035,097
|
|
2,124,133
|
- Investments in joint
ventures
|
72,078
|
|
65,830
|
Other
assets
|
40,351
|
|
39,848
|
Deferred income
taxes
|
10,907
|
|
27,433
|
|
$
|
2,547,804
|
|
$
|
2,685,157
|
Liabilities
|
|
|
|
Current
|
|
|
|
Accounts payable and
accrued liabilities
|
$
|
80,318
|
|
$
|
95,092
|
Current income and
other taxes payable
|
66,904
|
|
26,448
|
Current portion of
derivative instruments at fair value
|
360
|
|
4,952
|
Current portion of
long-term debt
|
25,008
|
|
302,630
|
Current portion of
prepaid sales
|
30,000
|
|
60,000
|
Current portion of
mine restoration provisions
|
3,170
|
|
1,819
|
Other current
liabilities
|
1,490
|
|
3,603
|
|
207,250
|
|
494,544
|
Derivative
instruments at fair value
|
1,477
|
|
—
|
Long-term
debt
|
454,527
|
|
399,551
|
Prepaid
sales
|
—
|
|
30,000
|
Mine restoration
provisions
|
114,051
|
|
96,627
|
Deferred income
taxes
|
103,384
|
|
81,518
|
Employee benefits
obligation
|
12,063
|
|
14,708
|
Other long-term
liabilities
|
2,199
|
|
1,816
|
|
894,951
|
|
1,118,764
|
Equity
|
|
|
|
Shareholders'
equity
|
|
|
|
Share
capital
|
|
|
|
Issued:
994,621,917 common shares (Dec 31, 2017 –
980,932,908)
|
2,234,050
|
|
2,197,267
|
Contributed
surplus
|
70,889
|
|
60,039
|
Accumulated other
comprehensive loss
|
(146,153)
|
|
(94,294)
|
Deficit
|
(547,839)
|
|
(610,908)
|
|
1,610,947
|
|
1,552,104
|
Non-controlling
interests
|
41,906
|
|
14,289
|
|
1,652,853
|
|
1,566,393
|
|
$
|
2,547,804
|
|
$
|
2,685,157
|
View original
content:http://www.prnewswire.com/news-releases/b2gold-reports-positive-2018-fourth-quarterannual-results-record-annual-gold-production-of-953-504-oz-revenue-of-1-2-b--operating-cash-flows-of-451-m-0-46share-cash-operating-costs-of-495oz--aisc-of-758oz-300811400.html
SOURCE B2Gold Corp.