VANCOUVER, Jan. 16, 2019
/CNW/ - B2Gold Corp. (TSX: BTO, NYSE AMERICAN: BTG, NSX: B2G)
("B2Gold" or the "Company") is pleased to announce record annual
gold production and gold revenues for 2018, gold production and
gold revenues for the fourth quarter of 2018, and 2019 annual
production and cost guidance. 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 of 92%
($586 million) over 2017
- Annual consolidated cash flows from operating activities
projected to increase to a record of approximately $450 million in 2018 (2017 - $155 million)
- 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)
- 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)
- On October 1, 2018, the Company
repaid in full its $259 million
aggregate principal amount of convertible senior subordinated notes
on maturity; and 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 (see "Non-IFRS Measures")
of between $520 and $560 per ounce and all-in sustaining costs
("AISC") (see "Non-IFRS Measures") of between $835 and $875 per
ounce (a budgeted increase in AISC of 6% over 2018 guidance); In
addition, the Company will focus on organic growth through the
expansion potential at existing mines, and at its exploration and
development projects
2018 Operating 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 had 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 have
been negatively affected by consequences related to 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.
For full-year 2018, the Company expects to be at the lower end
of its cost guidance ranges for consolidated cash operating costs
of between $505 and $550 per ounce and consolidated AISC of between
$780 and $830 per ounce. B2Gold will release its 2018
year-end consolidated financial statements after the North American
markets close on March 12, 2019.
Details of the consolidated cash operating costs per ounce and AISC
per ounce will also be released at that time.
With the first full-year of gold production in 2018 from the
Fekola Mine and the continued out-performance of the Masbate Mine,
the resulting significant increase in gold production levels
combined with low operating 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 full-year 2018, the Company is
projecting cash flow from operations of approximately $450 million. In 2017, cash flow from operations
was $155 million.
Based on its strong financial results, 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, convertible
notes and equipment loans and leases). 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.
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
|
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
over a broad range of ore types. 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 full-year 2018, Fekola's cash operating costs are forecast
to be at or below the low end of its guidance range of between
$345 and $390 per ounce and AISC are expected to be at or
below the low-end of its guidance range of between $575 and $625 per
ounce.
Masbate Gold Mine – the
Philippines
The Masbate Mine in the
Philippines achieved another year of out-performance 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.
Based on Masbate's strong performance, 2018 cost guidance was
favourably revised lower in the third quarter of 2018. For
full-year 2018, Masbate's cash operating costs are now expected to
be at the low end of the reforecast guidance range of between
$545 and $595 per ounce (original guidance was between
$675 to $720 per ounce) and AISC are also expected to be
at the low end of the reforecast guidance range of between
$780 and $830 per ounce (original guidance was between
$875 to $925 per ounce).
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. 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 full-year 2018, Otjikoto's cash operating costs are forecast
to be within its guidance range of between $480 and $525 per
ounce and AISC are forecast to be at the upper end of the guidance
range of between $700 and
$750 per ounce.
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. In 2018, La
Libertad Mine produced 80,963 ounces of gold (Q4 2018 – 18,193
ounces), 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 represents 8% of the Company's 2018
consolidated gold production.
As a result of national political unrest in 2018, development of
the Jabali Antenna underground project had been 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 anticipated in the first quarter of
2019. In addition, the mine permit for the new Jabali Antenna Pit
continues to be 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.
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.
As a result of the Jabali Antenna delays discussed above, the
planned mill feed for the year of higher grade open-pit and
underground ore was replaced with lower-grade spent ore. The
resulting head grade for the year was 1.19 g/t versus a budget of
1.76 g/t.
In light of La Libertad's underperformance, its 2018 cost
guidance was revised higher in the third quarter of 2018. For
full-year 2018, La Libertad's cash operating costs were reforecast
to be between $855 and $905 per ounce (original guidance was between
$745 to $790 per ounce) and AISC were reforecast to be
between $1,160 and $1,210 per ounce (original guidance was between
$1,050 to $1,100 per ounce). As a result of the lower than
expected production in the fourth quarter of 2018, the Company now
expects that La Libertad will be at or slightly above the upper end
of its cost guidance ranges.
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, 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 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.
In light of El Limon's underperformance, its 2018 cost guidance
was revised higher in the third quarter of 2018. For full-year
2018, El Limon's cash operating costs are reforecast to be at or
slightly above the upper end of the guidance range of between
$850 to $900 per ounce (original guidance was between
$700 to $750 per ounce) and AISC are also reforecast to
be at the upper end of the revised guidance range of between
$1,385 to $1,435 per ounce (original guidance was between
$1,135 to $1,185 per ounce).
Gold Revenue
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 of 92% ($586
million) 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.
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 $1,250 per ounce is used, the Company expects to
generate cash flow from operations of approximately $360 million in 2019.
Mine-by-mine 2019 ranges for forecast gold
production, cash operating costs per ounce and AISC per ounce
are presented in the following tables below (presented on a 100%
basis). Consolidated gold production, cash operating costs per
ounce and AISC per ounce are all forecast to vary through the year.
Consolidated gold production is expected to be weighted towards the
second-half of 2019 (approximately 14% higher than the first-half),
reflecting the development of open pits in the first-half of the
year and subsequent ore production from those pits in the
second-half. Consolidated cash operating costs are expected to be
approximately 9% lower and AISC are expected to be approximately
21% lower, respectively, in the second-half of 2019 versus the
first-half of the year.
Mine
|
H1
2019 Forecast Gold Production (ounces)
|
H2
2019 Forecast Gold Production (ounces)
|
Full-year 2019
Forecast Gold
Production (ounces)
|
Fekola
|
205,000 -
210,000
|
215,000 -
220,000
|
420,000 -
430,000
|
Masbate
|
100,000 -
105,000
|
100,000 -
105,000
|
200,000 -
210,000
|
Otjikoto
|
66,000 -
71,000
|
99,000 -
104,000
|
165,000 -
175,000
|
La
Libertad
|
43,000 -
45,000
|
52,000 -
55,000
|
95,000 -
100,000
|
El Limon
|
22,000 -
25,000
|
33,000 -
35,000
|
55,000 -
60,000
|
|
|
|
|
B2Gold
Consolidated
|
436,000 -
456,000
|
499,000 -
519,000
|
935,000 -
975,000
|
Mine
|
Full-year 2019
Forecast Cash
Operating
Costs ($ 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
|
Fekola Gold Mine - Mali
In 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. 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.
In 2019, the Fekola Mine is budgeted to process a total of 5.75
million tonnes of ore at an average grade of 2.44 g/t and process
gold recovery of 94%.
Sustaining capital costs in 2019 at the Fekola Mine are budgeted
to total $48 million, including $27 million for
pre-stripping, $12 million for mobile
equipment rebuilds and $5 million for processing improvements.
Non-sustaining capital costs total $10 million, including
$5 million to complete the
relocation of the Fadougou village.
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. Exploration drill results further
north of the new resource pit boundary demonstrate that gold
mineralization continues to the north, and remains open, indicating
the potential to further expand Mineral Resources with additional
drilling. As outlined in the exploration section below, infill
drilling of approximately 25,000 metres of diamond drilling has
commenced in 2019 with a goal to convert inferred resources to
indicated resources. These and previous drill results will be
utilized to calculate new probable mineral reserves for the
extended Fekola deposit.
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. The results of the optimized Fekola expansion
study are expected to be released by the end of the first quarter
of 2019. Additionally, the Company will commence work on the Front
End Engineering and Design (FEED) for the expansion.
Masbate Gold Mine - the
Philippines
In 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. 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.
In 2019, Masbate is budgeted to process a total of 8.0 million
tonnes of ore at an average grade of 1.07 g/t and process gold
recovery of 75.2%.
Sustaining capital costs in 2019 at the Masbate Mine are
budgeted to total $29 million, including $9 million
for pre-stripping, $6 million for
processing spares and improvements, and $2 million for mobile
fleet rebuilds. Non-sustaining capital costs are budgeted to total
$9 million.
The Masbate expansion project for the upgrade of the processing
plant to 8.0 million tonnes per year remains on track for
completion in early 2019. The upgrade, which is being conducted by
B2Gold's in-house team, primarily consists of adding a third ball
mill and upgrading the existing crushing circuit. Construction is
now basically complete, dry commissioning has commenced and feed
through the new mill is expected before the end of January 2019 (approximately 3 months ahead of
schedule). With the expansion online, Masbate's annual gold
production is projected to be near 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.
Otjikoto Gold Mine - Namibia
The Otjikoto Mine is forecast to produce between 165,000 and
175,000 ounces of gold in 2019, 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. 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. 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.
In 2019, Otjikoto is budgeted to process a total of 3.4 million
tonnes of ore at an average grade of 1.57 g/t and process gold
recovery of 98%.
Sustaining capital costs in 2019 at the Otjikoto Mine are
budgeted to total $51 million,
including $33 million for
pre-stripping (relating to Phase 2 and 3 of the Wolfshag Pit),
$7 million for mobile equipment
rebuilds, and $4 million to rebuild
power plant equipment. There is no non-sustaining capital budgeted
for Otjikoto in 2019.
La Libertad Gold Mine -
Nicaragua
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. 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 remaining mining
permits). 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 capital expenditures relating to the tailings storage facility
lift which are all expected to be incurred in the first-half of
2019.
In 2019, La Libertad is budgeted to process a total of 2.3
million tonnes of ore at an average grade of 1.42 g/t and process
gold recovery of 94%.
Sustaining capital costs for La Libertad are
planned to total $24 million,
including $11 million for the last
raise of the tailings storage facility and $4 million for underground development. There is
no non-sustaining capital budgeted for Libertad in 2019.
El Limon Gold Mine -
Nicaragua
In 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. 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.
El Limon Mine is budgeted to process 0.5 million tonnes of ore
at an average grade of 4.04 g/t gold with gold recoveries averaging
90.9%.
Sustaining capital costs for El Limon are budgeted to total
$8 million in 2019, including
$6 million in underground development
and $1 million in processing spares
and equipment. Non-sustaining capital is budgeted to total
$23 million, including $20 million for pre-stripping costs for the Limon
Central Pit and $2 million for
processing plant improvements.
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. 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.
Positive drilling results continue to expand El Limon Central
zone to the north, indicating the potential to expand the Mineral
Resources. The zone is also open to depth, indicating the potential
to mine ore from underground in El Limon Central area once open-pit
mining is completed.
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 in the first quarter of
2019. In the meantime, B2Gold has allocated approximately
$2 million of capital in the 2019
budget towards the expansion to ensure that the mill can continue
to process 500,000 tonnes per annum with the harder Limon Central
ore included.
2019 Exploration Guidance
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 mines. The Company has also allocated
approximately $7 million for other
grass roots exploration programs.
West African Exploration
2019 will see approximately $21
million being spent on exploration in Mali, Burkina
Faso and Ghana.
Exploration on the licenses in Mali will see expenditures of $18 million. In 2019, 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. In addition, the new
Cardinal target, located less than 1 km west of the Fekola Pit,
will also be further drill-tested.
In 2019, the Company has also budgeted $3
million for 14,000 metres of 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, 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.
In Burkina Faso, the 2019
exploration budget is $3 million for
the Toega prospect and the Kiaka Regional district. Continued
exploration drilling of 6,000 metres of RC drilling will be focused
on expanding the Toega resource and test regional targets around
the Toega and Kiaka deposits. An initial Inferred Resource estimate
for Toega, released in early 2018, totaled 17.53 million tonnes at
2.01 g/t containing 1.13 million ounces.
Nicaragua Exploration
El Limon's exploration budget for 2019 is approximately
$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.
La Libertad's exploration budget for 2019 is approximately
$3 million for a total of 3,400
metres of planned diamond drilling, to test several identified
regional surface targets.
Masbate Gold Mine - the
Philippines
The Masbate exploration budget for 2019 is approximately
$4 million including 12,400 metres of
diamond drilling. The program will include brownfields drilling to
upgrade resources within the mine license and drilling on
identified exploration targets within the mine area.
Namibia Exploration
The total exploration budget for Namibia in 2019 is $5
million. Exploration in 2019 will include 17,000 metres of
diamond drilling and 4,000 metres of RAB drilling split between the
Otjikoto Project and the Ondundu joint venture, located
approximately 200 km southwest of Otjikoto. The majority of the
diamond drilling will be testing down plunge of the Otjikoto and
Wolfshag open pits.
Other Greenfield Exploration
Given B2Gold's exploration teams successful discovery history,
the Company has budgeted $7 million
for greenfield exploration opportunities internationally in 2019,
as it continues to pursue grass roots exploration discoveries
through property acquisitions and joint ventures with junior
exploration companies.
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 has
recently been redone by AngloGold Ashanti using additional
information and some key reinterpretations. The new model
indicates the potential for a better grade resource that could
result in improved project economics. B2Gold is in the process of
reviewing this new model, and a third-party audit has commenced and
is scheduled to be completed before the end of February
2019. Final budgets, schedules and work plans for advancing
Gramalote will be developed once the Mineral Resource has been
finalized and the updated audited project economics are
available.
Outlook
Looking forward, the Company will remain focused on maximizing
cash flows by continuing its impressive operational and financial
performance from existing mines. In addition, the Company will
balance its ongoing program of debt reduction with pursuing
expansion opportunities at existing operations. The Company will
continue with aggressive exploration and development programs to
unlock the ultimate potential of its existing portfolio of
properties. In 2019, B2Gold will also continue to pursue grass
roots exploration targets through property acquisitions and joint
ventures.
About B2Gold
Headquartered in Vancouver,
Canada, B2Gold Corp. is the world's new senior gold
producer. Founded in 2007, today, B2Gold has five operating gold
mines and numerous exploration and development projects in various
countries including Nicaragua,
the Philippines, Namibia, Mali, Burkina
Faso, Colombia and
Finland.
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 Details
B2Gold will release its fourth quarter and year-end 2018
financial results after the North American markets close on
Tuesday, March 12, 2019.
B2Gold executives will host a conference call to discuss the
results on Wednesday, March 13,
2019, at 10:00 am
PST/1:00 pm EST. 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
|
Katie Bromley
|
Vice President,
Investor Relations
|
Manager,
Investor Relations & Public Relations
|
604-681-8371
|
604-681-8371
|
imaclean@b2gold.com
|
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 the total production at the
mines B2Gold operates on a 100% basis. Please
see in conjunction our Annual Information Form, dated March 23, 2018, and our
Management Discussion and Analysis
dated November 6, 2018
for a discussion of our ownership interest in the mines B2Gold
operates.
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 performance; the ongoing benefits of the
significant increase in gold production levels combined with low
operating costs being expected continue for many years, based on
current assumptions; the range of expected recoveries at the Fekola
Gold Mine; high grade stockpiles being scheduled for processing in
2019 at the Fekola Gold Mine; higher grade production being planned
to resume from the Wolfshag Pit at the Otjikoto Gold Mine in late
2019; ore production from stopes in Zone 1 and Zone 2 at La
Libertad Gold Mine being anticipated in the first quarter of 2019;
B2Gold anticipating receiving the permit in time to start
production from the Jabali Antenna Pit in the second-half of 2019;
a higher proportion of low-grade ore being expected to be processed
as a result of the Masbate plant expansion and a higher throughout
being expected at Fekola; consolidated gold production being
expected to be weighted towards the second-half of 2019; new
high-grade ore production from Phase 4 of the Fekola Pit being
scheduled to begin in the second-half of 2019; the Fekola expansion
study being focused on expanding mill throughput to 7.5 Mtpa, and
the economics of such case being compared to a baseline throughput
of 6.0 Mtpa; the 7.5 Mtpa throughput being achieved with an upgrade
of the existing ball mill circuit; additional process equipment
upgrades being required at Fekola, and such being determined in the
expansion study along with capital and operating cost estimates;
the optimization of the operating configuration of milling
throughput at the Fekola Gold Mine by Whittle Consulting including
a revision of the mine scheduling, an evaluation of dynamic cut-off
grades, stockpiling, blending, processing and logistics; Whittle
Consulting analyzing various scenarios between 6.0 Mtpa and 7.5
Mtpa and identifying bottlenecks in order to maximize net present
value; the timing and release of such study, and that such study is
anticipated to include recommendations on fleet sizing, mill
expansion and tailings placement strategies; the expansion project
at the Masbate Gold Mine, and the timing and the effects thereof;
feed through the new mill being expected before the end of
January 2019 and such being
approximately three months ahead of schedule; a higher-grade zone
of the Otjikoto Pit being forecast to be processed in the third
quarter of 2019; mine optimization studies at El Limon being
expected to be completed in the first quarter of 2019; the mill at
El Limon continuing to process 500,000 tonnes per annum;
West Africa being the primary area
of focus for exploration in 2019; B2Gold continuing to pursue grass
roots exploration targets through acquisitions and joint ventures;
a third party audit at the Gramalote property, the timing thereof
and that final budgets, schedules and work plans for advancing
Gramalote being developed once the Mineral Resource has been
finalized and the updated project economics are available; B2Gold
remaining focused on maximizing cash flows by continuing its
impressive operational and financial performance from existing
mines; B2Gold balancing its ongoing program of debt-reduction with
pursuing expansion opportunities at existing operations; and B2Gold
continuing with aggressive exploration and development programs to
unlock the ultimate potential of its existing portfolio of
properties. 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" 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," "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," "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.
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SOURCE B2Gold Corp.