B2Gold's Directors have approved the
Expansion
VANCOUVER, March 26, 2019 /PRNewswire/ - B2Gold
Corp. (TSX: BTO, NYSE AMERICAN: BTG, NSX: B2G) ("B2Gold" or the
"Company") is pleased to announce very positive results from the
Expansion Study Preliminary Economic Assessment ("PEA") for the
Fekola Mine located in Mali and
that the Company is proceeding with an expansion project to
increase processing throughput by 1.5 million tonnes per annum
("Mtpa") to 7.5 Mtpa from the current base rate of 6 Mtpa. All
dollar figures are in United
States dollars unless otherwise indicated.
The Expansion Study PEA was conducted to evaluate the
life-of-mine ("LoM") options for expanded mining and processing to
maximize the value of the substantially increased Indicated and
Inferred Mineral Resource at the Fekola Mine (see news release
dated October 25, 2018) (see also the
Company's current AIF, filed on SEDAR on March 20, 2019, which reflects 2018 gold
production). Results of this study recommend an expansion of the
existing plant to process an additional 1.5 Mtpa, resulting in a
baseline capacity of 7.5 Mtpa without requiring an additional ball
mill or additional power generation capacity. Based on the new
optimized mine plan, the mining rate at Fekola will also be
increased, along with additional mining equipment to accelerate the
supply of higher-grade ore to the expanded processing facilities.
As a result of the project and Mineral Resource expansion, the
Fekola Mine will produce more gold over a longer life, with more
robust economics and higher average annual gold production,
revenues and cash flows than the previous LoM.
Mineral Resources which are not Mineral Reserves do not have
demonstrated economic viability. The Expansion Study PEA is
preliminary in nature and includes Indicated and Inferred Mineral
Resources. Inferred Mineral Resources are considered too
speculative geologically to have economic considerations applied to
them that would enable them to be categorized as Mineral Reserves.
Consequently, there is no certainty that the Expansion Study
Preliminary Economic Assessment will be realized.
Highlights of Fekola Expansion Study PEA
- Assuming an effective date of January 1,
2019, a gold price of $1,300
per ounce and a discount rate of 5%, Project Economics highlights
from the Expansion Study PEA include:
-
- Estimated optimized LoM extended into 2030, including
significant estimated increases in average annual gold production
to over 550,000 ounces per year during the five-year period
2020-2024 and over 400,000 ounces per year over the LoM
(2019-2030).
- Projected gold production of approximately five million ounces
over the new mine life of 12 years of mining and processing
(including 2019). Prior to 2019, the Fekola Mine produced more than
550,000 ounces. The Fekola Mineral Resource remains open to the
north.
- An increase in project NPV of approximately $500 million versus the comparable amounts in the
Company's latest AIF Mineral Reserve LoM model (filed on SEDAR on
March 20, 2019).
- Forecast LoM pre-tax net cash flow of approximately
$2.8 billion.
- Forecast LoM pre-tax net present value of over $2.2 billion.
- Revised projected LoM cash operating cash costs (see Non-IFRS
Measures) and all-in-sustaining-costs ("AISC") (see Non-IFRS
Measures) remain low, below $500 and
$700 per ounce respectively despite
mining a larger open pit at slightly lower gold grade. This is due
to economies of scale arising from increased mining and processing
rates and the new optimized mining schedule. During the five-year
period 2020-2024 under the new optimized LoM, AISC are expected to
average approximately $630 per
ounce.
- Forecast expansion capital payback period of less than one
year.
- Estimated processing plant expansion capital cost of
approximately $50 million over a
period of approximately 18 months for processing expansion and
upgrades (through Q3 2020). Half of this capital is expected to be
spent in 2019 with the remaining half in 2020. It is anticipated
that this will be financed from existing Fekola Mine cash
flows.
- Projected annual mining rate increased to a baseline of
approximately 54 Mtpa and subsequently stepped up to approximately
76 Mtpa to support the increased processing and stockpiling
necessary to maintain plant feed grade.
- Staged mining fleet additions totalling approximately
$56 million over the LoM are expected
to be equipment loans/lease financed over respective 5-year
periods, on terms similar to the existing Fekola fleet loan/lease
terms.
- Projected annual processing rate increased to a baseline of 7.5
Mtpa (current capacity of 6 Mtpa plus 1.5 Mtpa).
- Ongoing drilling continues to infill the existing Inferred
Mineral Resources to Indicated Mineral Resources. Mineralization
remains open to the north and down plunge, indicating the potential
to further increase Fekola Mineral Resources and Reserves. A large
exploration drilling program will commence in Q3 2019 to further
test the Fekola North, Cardinal and Anaconda zones.
During the expansion study other upside opportunities were
identified and are currently under review. These will be
incorporated into an updated Fekola LoM plan when related studies
are complete and if they show an increase in overall project
value. Upside opportunities identified to date include
renewable energy (focused on a solar plant), alternative tailings
storage (co-disposal, paste, dry stack, and others), waste mining
(various fleet options vs. in-pit crushing and conveying) and the
potential incorporation of material from the Anaconda Mineral
Resource.
Basis of the Study
On October 25, 2018, the Company
announced a substantial increase in the Mineral Resource for the
Fekola Mine, and positive results from the conceptual stage of the
expansion study. B2Gold reported an Indicated Mineral Resource of
92.8 million tonnes at a grade of 1.92 grams per tonne ("g/t")
containing 5.73 million ounces and an Inferred Mineral Resource of
26.5 million tonnes at a grade of 1.61 g/t containing 1.37 million
ounces (see news release dated 10/25/2018) (see also the
Company's current AIF, filed on SEDAR on March 20, 2019, which reflects 2018 gold
production). This expanded resource, coupled with positive results
of an internal conceptual study, formed the basis of, and
motivation for, the Expansion Study PEA. Mineral Resources that are
not Mineral Reserves do not have demonstrated economic
viability.
Based on positive results of the conceptual Fekola expansion
study the Company continued testing and design with the same
Lycopodium-Brisbane team which performed engineering and design
work for the current Fekola mill and infrastructure, and contracted
Whittle Consulting ("Whittle") to work together with the Company's
technical team to conduct an Enterprise Optimization study of the
Fekola Project. Results have confirmed the value of the processing
expansion and recommend a corresponding increase in mining
capacity. Whittle evaluated mining production rates, pit and
phase scheduling, dynamic cut-off grades, ore stockpiling,
blending, and dynamic processing throughput and recovery to
maximize project NPV. These parameters will continue to be
optimized during the next phases of project design and
implementation. In the meantime, the Company is nearing completion
on Front-End Engineering and Design ("FEED") for the expansion with
a focus on long lead items. The project schedule indicates that the
processing expansion will be fully operational by Q4 2020. B2Gold
is currently investigating the potential to accelerate this
schedule based on the availability of long lead items.
As currently envisioned, the processing upgrade will focus on
increased ball mill power, with upgrades to other components
including a new cyclone classification system, pebble crushers, and
additional leach capacity to support the higher throughput and
increase operability. The capital costs of this mill expansion are
estimated to be less than $50
million, with spending evenly split between 2019 and
2020. Critical path items include ball mill motors and the
lime slaker, both of which will be commissioned in Q3 2020. In
parallel with the expansion, B2Gold is studying the addition of a
solar power plant, which would reduce operating costs and
greenhouse gas emissions. The current on-site power plant has
sufficient capacity to support the expanded processing throughput,
with or without the solar plant.
The current mining fleet consists of four Caterpillar
6020B excavators with haul trucks,
drills, and support equipment to match, and mines an average of 36
Mtpa. The Whittle results currently indicate that mining production
rates ranging from 54 Mtpa to 76 Mtpa are optimal to support the
expanded processing rates over the LoM and optimize head grade
during the period 2020-2024. Increased production will be achieved
with the addition of two to four excavators with corresponding
trucks, drills, and support equipment. Large front-end loaders
would also be included to maintain fleet flexibility. Mine fleet
expansion timing and scale will be optimized during Q2 2019 and
will generally be equipment loan/lease financed over a five-year
period. The study has included $28
million for expansion to 54 Mtpa and an additional
$28 million (for a total of
$56 million) to go to 76 Mtpa. In
parallel with the Whittle study, B2Gold is reviewing in-pit
crushing and conveying as a means to reduce operating costs and
potentially implement tailings and waste co-disposal at the Fekola
Mine. B2Gold is also considering the option of transporting the
nearby Anaconda saprolite material to Fekola for processing (see
news release dated 06/15/2017).
With the combination of the increased Indicated and Inferred
Mineral Resource, and implementation of the processing expansion
and mining expansion, the Fekola Mine will see a substantial
increase in annual and LoM gold production and revenues. Revised
LoM cash operating cash costs and AISC are estimated at below
$500 and $700 per ounce respectively despite mining a
larger open pit at slightly lower gold grade. Under the PEA, low
costs are forecast to be maintained through the new extended Fekola
mine life due to economies of scale arising from increased mining
and processing rates, and the optimized mining schedule. During the
five-year period 2020-2024 under the new optimized LoM, AISC are
expected to average approximately $630 per ounce.
Current PEA expansion estimates indicate approximate annual gold
production averaging over 400,000 ounces per year over the
new LoM (including 2019) with over 550,000 ounces per year
over the five-year period 2020-2024. Total processed tonnage
currently included in the Expansion Study PEA consists of
approximately 84 million tonnes processed over the LoM period
2019-2030 at a grade of 1.9 g/t, producing approximately 5.0
million ounces (prior to 2019, the Fekola Mine produced more than
550,000 ounces from its operations since inception. The Fekola
Resources remain open to the north and down plunge). Head grade may
be optimized to an average of up to 2.3 g/t over the period
2020-2024 with an increased mining rate and ore
stockpiling. Under the current Expansion Study PEA
assumptions, mine life extends to 12 years including 2019
(into 2030) even with the increased processing rate of 7.5 Mtpa.
Mineral Resources which are not Mineral Reserves do not have
demonstrated economic viability.
Upside Potential
B2Gold's technical team, along with Lycopodium, Whittle
Consulting, and others, continues to study and optimize several
components of the Fekola Mine. Ongoing studies include
optimizing the mine production schedule and stockpile strategy,
adding solar power, reviewing various tailings and waste disposal
strategies and the potential to process material from the Anaconda
Project, located to the north, through the Fekola plant.
These studies will continue through Q2 2019 and will be
incorporated into a revised Fekola LoM plan which is expected to be
available by the end of Q1 2020.
Since January 2019, up
to seven drill rigs have completed 27 drill holes focussed on
infill drilling the inferred portion of the new Fekola Mineral
Resource (21%) to Indicated so that an updated geologic and grade
model can be completed in late 2019. This will allow the
engineering group to complete an updated design pit and new Mineral
Reserves, along with an updated Fekola LoM plan by the end
of Q1 2020.
Once infill drilling is completed at the end of Q2
2019, B2Gold plans to immediately dedicate exploration drill
rigs to test several targets with the potential to expand the
Mineral Resources. These targets include the Fekola North area
beyond the current resource boundary that remains open along strike
and down plunge, the Cardinal structures west of the operating mine
and the Fekola South area where previous wide spaced drilling has
shown potential for additional mineralization below the main Fekola
orebody.
In addition, in early Q3, drill rigs will be mobilized to the
Anaconda region to continue efforts to expand the previously
announced shallow saprolite resource as well as further tests for
hard rock mineralization targets below the saprolite resource.
About B2Gold Corp.
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 and Colombia.
B2Gold will maintain a strong and profitable production profile
in 2019 with consolidated gold production forecast to be between
935,000 and 975,000 ounces. Based on current assumptions,
consolidated cash operating costs are projected to be between
$520 and $560 per ounce and consolidated AISC
are projected to
be between $835 and $875 per ounce. The
Company continues to maximize cash flows by
optimizing 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. Also,
B2Gold will remain focussed on adding shareholder value
through growth driven by the exploration, development and expansion
of its impressive pipeline of existing projects. Potential
acquisitions will focus on exploration opportunities.
Qualified Persons
Tom Garagan, Senior Vice
President of Exploration at B2Gold, a qualified person under NI
43-101, has approved the scientific and technical information
regarding exploration matters and the Mineral Resource estimate
contained in this news release. Mr Garagan has visited the Fekola
mine site a number of times since 2015 and has reviewed and
approved the exploration practices that B2Gold conducts on
site.
John Rajala P.E., Vice President
of Metallurgy at B2Gold, a qualified person under NI 43-101, has
approved the scientific and technical information regarding mineral
processing related to Fekola expansion studies. Mr Rajala has
visited the Fekola mine site multiple times since 2017 and has
reviewed the technical aspects of the Expansion Study that form the
basis for this release.
Peter D. Montano P.E., Project
Director at B2Gold, a qualified person under NI 43-101, has
approved the scientific and technical information related to
operations matters contained in this news release. Mr Montano has
visited the Fekola mine site several times since 2015 and has
reviewed the mining operations and has reviewed the technical
aspects of the Expansion Study that form the basis for this
release.
ON BEHALF OF B2GOLD CORP.
"Clive T.
Johnson"
President & 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 our Annual Information Form dated March
20, 2019 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: the Expansion PEA, the timing
and effects thereof; mining production being expanded, along with
associated mining fleet increases, to accelerate the supply of high
grade ore at the Fekola Mine; the Fekola Mine producing more gold
over a longer life, with greatly improved annual gold production,
revenues and cash flows; an increase in project net present value
being approximately $500 million;
forecast pre-tax net cash flow being approximately $2.8 billion; forecast pre-tax net present value
being over $2.2 billion; forecast
expansion capital payback period being less than one year;
estimated processing plant expansion capital costs and the timing
thereof; the source of financing of capital to satisfy such capital
costs; projected annual mining and processing rate increases; low
costs being forecast to be maintained through the new extended
Fekola Mine life; staged mining fleet additions being expected to
be lease financed over respective 5 year periods and the projected
cost thereof; estimated LoM being extended into 2030; exploration
drilling commencing in Q3/2019 to test the Fekola North, Cardinal
and Anaconda zones; upside opportunities identified during the
expansion study being incorporated into an updated Fekola LoM when
related studies are complete and if they show and increase in
overall project value; the timing of availability of such studies;
the processing expansion being fully operational by Q4 2020; the
processing upgrade focusing on increased ball mill power; the
timing of commissioning of the ball mill motors and the lime
slaker; increased production being achieved with the addition of
two to four excavators with corresponding trucks, drills, and
support equipment; large front-end loaders also being included to
maintain fleet flexibility; mine fleet expansion timing and scale
being optimized during Q2 2019; an updated geologic and grade model
of the new Fekola Mineral Resource being able to be completed in
late 2019; such allowing the B2Gold engineering group to complete
an updated design pit and new Mineral Reserves, along with an
updated Fekola LoM plan by the end of Q1 2020; once infill drilling
is completed at the end of Q2 2019, B2Gold planning to immediately
dedicate exploration rigs to test several targets with the
potential to expand the Mineral Resource; drill rigs being
mobilized to the Anaconda region and the timing thereof; B2Gold
maintaining a strong and profitable production profile in 2019;
B2Gold remaining focused on adding shareholder value through growth
driven by the exploration, development and expansion of its
impressive pipeline of existing projects; and potential acquisition
being focussed on exploration opportunities. 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; changes in tax laws; 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; climate change and climate change
regulations; 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 or resource
nationalization generally; 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; 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, and sanctions or other similar
measures; social media and B2Gold's
reputation; 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 "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. Further, while NI 43-101 permits companies to
disclose economic projections contained in preliminary economic
assessments and pre-feasibility studies, which are not based on
"reserves", U.S. companies have not generally been permitted to
disclose economic projections for a mineral property in their SEC
filings prior to the establishment of "reserves." 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.