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, 2017. The
Company previously released its gold production and gold revenue
results for the fourth quarter and full-year 2017, in addition to
its production and cash cost guidance for 2018 (see news release
dated 1/11/18). All dollar figures are in United States dollars
unless otherwise indicated.
2017 Full-Year Highlights
- Record annual consolidated gold production, for the ninth
consecutive year, of 630,565 ounces of gold (including 79,243
ounces of pre-commercial production1 from Fekola), exceeding the
upper end of the revised guidance range (of 580,000 to 625,000
ounces) and well above the upper end of the original guidance range
(of 545,000 to 595,000 ounces)
- Annual consolidated gold revenue of $638.7 million (or an
annual record of $739.5 million, including $100.9 million of
pre-commercial production sales from Fekola)
- Fekola Mine construction successfully completed in late
September 2017, more than three months ahead of the original
schedule
- Fekola Mine achieved commercial production on November 30,
2017, one month ahead of the revised schedule and four months ahead
of the original schedule
- Fekola Mine gold production was 111,450 ounces in 2017
(including pre-commercial production), far surpassing the upper end
of its original guidance range (of 45,000 to 55,000 ounces)
- Fekola Mine achieves cash operating costs (see “Non-IFRS
Measures”) of $277 per ounce and all-in sustaining costs (“AISC”)
(see “Non-IFRS Measures”) of $419 per ounce (including
pre-commercial results)
- Masbate Mine achieves near-record annual gold production of
202,468 ounces and Otjikoto Mine achieves record annual gold
production of 191,534 ounces
- B2Gold’s full-year consolidated cash operating costs of $542
per ounce (including Fekola’s pre-commercial production results)
were well below guidance of between $610 and $650 per ounce
- B2Gold’s full-year consolidated AISC of $860 per ounce
(including Fekola’s pre-commercial production results) were well
below guidance of between $940 and $970 per ounce
- Cash flow from operating activities (after non-cash working
capital changes) of $155.0 million ($0.16 per share); additionally,
sales of pre-commercial production from Fekola, which were included
in investing activities rather than cash flow from operating
activities, generated net proceeds of $73.4 million ($100.9 million
of sales revenue net of related production costs of $27.5
million)
- Strong cash position of $147.5 million at year-end
- With the planned first full year of production from the Fekola
Mine, the Company’s outlook for 2018 provides for dramatic
production growth, with consolidated production expected to be
between 910,000 and 950,000 ounces of gold; cash operating costs
and AISC are expected to remain low and be between $505 and $550
per ounce and between $780 and $830 per ounce, respectively
- Beginning in 2018, on average over the next three years, the
Company is projecting per annum gold sales revenues of
approximately $1.2 billion, cash flow from operations of close to
$0.5 billion and a significant increase in free cash flow
(operating cash flows less investing cash flows)
- In 2018, B2Gold’s strategy will focus on organic growth through
the expansion of its existing mines and further brownfields
exploration and grassroots exploration
1 Basis of presentation: The Fekola Mine
commenced operation on September 24, 2017 and reached commercial
production on November 30, 2017. In accordance with the Company's
accounting policy, revenues and costs related to ounces produced in
the pre-commercial operating period up to November 30, 2017, were
not recorded in the consolidated statement of operations but were
capitalized and treated as part of the net cost of construction of
the Fekola Mine.
2017 Fourth-Quarter
Highlights
- Record quarterly consolidated gold production of 240,753 ounces
(including 72,903 ounces of pre-commercial production from Fekola),
71% (or 100,102 ounces) greater than the same period in 2016
- Consolidated gold revenue of $174.0 million (or a quarterly
record of $274.9 million, including $100.9 million of
pre-commercial production sales from Fekola)
- Consolidated cash operating costs of $473 per ounce and AISC of
$754 per ounce (including Fekola’s pre-commercial production
results)
2017 Full Year and Fourth-Quarter Operational
Results
For B2Gold, 2017 was an outstanding year of
performance with the achievement of another record year of
consolidated gold production (for the ninth straight year), and the
successful construction and commissioning of its flagship Fekola
Mine, in southwest Mali, which achieved commercial production on
November 30, 2017, one month ahead of the revised schedule and four
months ahead of the original schedule. With the large, low-cost
Fekola Mine now in production, B2Gold is on target to achieve
transformational growth in 2018. In 2018, with the planned first
full year of production from the Fekola Mine, consolidated gold
production is forecast to be between 910,000 and 950,000 ounces
(see “2018 Production Outlook and Cost Guidance” section). This
represents an increase in annual consolidated gold production of
approximately 300,000 ounces in 2018 from 2017. The Company’s
forecast consolidated cash operating costs are expected to remain
low in 2018 and be between $505 and $550 per ounce and AISC are
expected to decrease by approximately 6% from 2017 and be between
$780 and $830 per ounce.
The Fekola Mine is projected to be a large,
low-cost producer. The resulting increase in production levels
combined with low costs are expected to dramatically increase
B2Gold’s production, revenues, cash from operations and cash flow
for many years, based on current assumptions (including a gold
price assumption of $1,300 per ounce). On average over the next
three years, beginning in 2018, the Company is projecting per annum
gold sales revenues of approximately $1.2 billion, cash flow from
operations of close to $0.5 billion and a significant increase in
free cash flow (operating cash flows less investing cash flows).
For full-year 2017, consolidated gold production
was an annual record of 630,565 ounces (including 79,243 ounces of
pre-commercial production from Fekola), exceeding the upper end of
its revised guidance range (of 580,000 to 625,000 ounces) and was
well above the upper end of its original guidance range (of 545,000
to 595,000 ounces). Consolidated gold production for the year also
increased by 15% (or 80,142 ounces) over 2016. B2Gold’s record
performance in 2017 reflected the early start-up and strong ramp-up
performance of the new Fekola Mine and the continued, very strong
operational performances of both the Masbate Mine in the
Philippines and the Otjikoto Mine in Namibia.
In the fourth quarter of 2017, consolidated gold
production was a quarterly record of 240,753 ounces (including
72,903 ounces of pre-commercial production from Fekola), exceeding
reforecast production by 5% (or 10,473 ounces) and significantly
exceeding budget by 28% (or 52,141 ounces). Consolidated gold
production for the quarter also increased by 71% (or 100,102
ounces) over the same quarter in 2016.
The Company’s full-year 2017 consolidated cash
operating costs of $542 per ounce (including Fekola’s
pre-commercial production results) came in well below the guidance
range of between $610 and $650 per ounce, as a result of the
Company’s strong operating performance. In addition, the Company’s
full-year 2017 consolidated AISC of $860 per ounce (including
Fekola’s pre-commercial production results) also came in well below
the guidance range of between $940 and $970 per
ounce.
In the fourth quarter of 2017 (including
Fekola’s pre-commercial production results), consolidated cash
operating costs were $473 per ounce (Q4 2016 – $546 per ounce) and
AISC were $754 per ounce (Q4 2016 – $877 per ounce).
2017 Full Year and Fourth-Quarter
Financial Results
The Fekola Mine commenced operation on September
24, 2017, and reached commercial production on November 30, 2017
(see “Operations, Fekola Gold Mine – Mali” section). In accordance
with the Company's accounting policy, revenues and costs related to
ounces produced in the pre-commercial operating period up to
November 30, 2017, were not recorded in the consolidated statement
of operations but were capitalized and treated as part of the net
cost of construction of the Fekola Mine. Consistent with the
exclusion of these pre-commercial production revenues and costs
from the determination of net income for the period, the related
net cash flows were not reflected as part of cash flow from
operating activities in the Company’s 2017 consolidated statement
of cash flows (but instead were reflected in the investing
activities section). For full-year 2017, the Fekola Mine produced a
total of 111,450 ounces (from September 24 to December 31). A total
of 84,000 ounces were sold in the fourth quarter of 2017, with the
remaining 27,450 ounces being recorded in inventory at December 31,
2017. Of the ounces sold, 79,243 ounces related to pre-commercial
production. Consequently, only 4,757 of the ounces sold (for
revenue of $6.1 million) related to Fekola Mine commercial
production and were recorded in the Company’s 2017 consolidated
statement of operations. Proceeds from the sale of the 79,243
pre-commercial production ounces totaled $100.9 million and
together with related production costs of $27.5 million for a total
net credit of $73.4 million were capitalized and offset against
Fekola Mine construction costs.
For the full-year 2017, consolidated gold
revenue was $638.7 million (or an annual record of $739.5 million,
including $100.9 million of pre-commercial production sales from
Fekola) on sales of 510,966 ounces (or an annual record of 590,209
ounces including 79,243 ounces of pre-commercial production sales
from Fekola) at an average price of $1,250 per ounce compared to
$683.3 million on sales of 548,281 ounces at an average price of
$1,246 per ounce in 2016.
Consolidated gold revenue in the fourth quarter
of 2017 was $174.0 million (or a quarterly record of $274.9 million
including $100.9 million of pre-commercial production sales from
Fekola) on sales of 137,695 ounces (or a quarterly record of
216,938 ounces, including 79,243 ounces of pre-commercial
production sales from Fekola) at an average price of $1,264 per
ounce compared to $181.2 million on sales of 151,524 ounces at an
average price of $1,196 per ounce in the fourth quarter of
2016.
Consolidated gold revenue for the fourth quarter
and year ended December 31, 2017, included $15 million and $60
million, respectively, relating to the delivery of gold into the
Company's Prepaid Sales contracts (accounted for as deferred
revenue) entered into in March 2016. Proceeds from the Prepaid
Sales transactions, used to fund a portion of the Fekola Mine
construction rather than a potentially dilutive equity financing,
were originally received in March 2016 and are being recognized in
revenue as the underlying Prepaid Sales contracts are delivered
into. During the fourth quarter and year ended December 31, 2017,
12,909 ounces and 51,633 ounces, respectively, were delivered under
these contracts.
For the full-year 2017, cash flow from operating
activities (after non-cash working capital changes) was $155.0
million ($0.16 per share) compared with $411.8 million ($0.44 per
share) in 2016. In addition, sales of pre-commercial production
from Fekola in the fourth quarter of 2017, which were included in
investing activities rather than cash flow from operating
activities, generated net proceeds of $73.4 million ($100.9 million
of sales revenue net of related production costs of $27.5 million).
Cash flow from operating activities for the year ended December 31,
2017, included a negative $39.7 million adjustment for changes in
non-cash working capital (compared to a positive $2 million
adjustment for changes in non-cash working capital in 2016), mainly
relating to an increase in inventories at the Fekola Mine. Cash
flow from operating activities for the year ended December 31,
2016, included $120 million of proceeds which were received from
the Company’s Prepaid Sales transactions in March 2016. In the
fourth quarter of 2017, cash flow from operating activities was
$25.6 million ($0.03 per share) compared with $82.3 million ($0.09
per share) in the fourth quarter of 2016.
For the year ended December 31, 2017, the
Company recorded net income of $61.6 million ($0.06 per share)
compared to net income of $38.6 million ($0.04 per share) for 2016.
Adjusted net income (see “Non-IFRS Measures”) was $51.8 million
($0.05 per share) for 2017 compared to $99.0 million ($0.11 per
share) for 2016. As discussed above, for the year ended December
31, 2017, proceeds from the sales of pre-commercial production from
Fekola ($100.9 million) and related production costs ($27.5
million), for a net amount of $73.4 million, were netted against
Fekola Mine construction costs and not recorded as part of net
income.
For the fourth quarter of 2017, the Company
recorded net income of $34.5 million ($0.03 per share) compared to
net income of $8.1 million ($0.01 per share) in the fourth quarter
of 2016. Adjusted net income was $5.7 million ($0.01 per share) in
the fourth quarter of 2017 compared to $2.5 million ($0.00 per
share) in the fourth quarter of 2016. As discussed above, for the
year ended December 31, 2017, proceeds from the sales of
pre-commercial production from Fekola ($100.9 million) and related
production costs ($27.5 million), for a net amount of $73.4
million, were netted against Fekola Mine construction costs and not
recorded as part of net income.
Liquidity and Capital Resources
At December 31, 2017, the Company had cash and
cash equivalents of $147.5 million compared to cash and cash
equivalents of $144.7 million at December 31, 2016. The Company had
a working capital deficit at December 31, 2017 of $98.7 million
compared to a working capital of $101.0 million at December 31,
2016. The working capital deficit resulted from the
reclassification of the Company's convertible senior subordinated
notes to current liabilities, as they are due on October 1,
2018.
In 2016, the Company made a strategic decision
to fund the construction of the Fekola Mine without using any
equity to fund part of the construction cost. With the successful
and earlier than anticipated ramp-up of the Fekola Mine in 2017,
the Company is well positioned to execute the second part of its
debt funding strategy and has started to reduce its overall
consolidated debt levels. This planned repayment of debt balances
includes the anticipated repayment of the Company's $259 million
convertible notes which mature on October 1, 2018, unless the notes
are converted into shares prior to that date. While current
convertible market conditions remain attractive, the Company has
allowed the notes to fall under amounts due within one year on the
basis that the Company projects that it will have sufficient
liquidity from 2018 operating cash flows and existing credit
facilities to repay the notes in full and maintain a strong cash
position. This position mirrors the Company's current strategy to
focus on developing its budgeted organic growth opportunities in
the short to mid-term using a portion of its projected ongoing cash
flow from existing operations, as well as its amended Revolving
Credit Facility (“RCF”) without the need for additional new
external debt or equity financing.
At December 31, 2017, the Company had drawn down
$350 million under the $500 million amended RCF, leaving an undrawn
and available balance under the existing facility at that time of
$150 million. Subsequently, the Company repaid $50 million under
the amended RCF leaving an undrawn and available balance of $200
million. At December 31, 2017, the Company also had Euro 22 million
($26.4 million equivalent) of undrawn capacity on its Fekola
equipment loan facility and $9.1 million of undrawn capacity on its
Masbate equipment loan facility.
Operations
Mine-by-mine gold production in the fourth
quarter and full-year 2017 was as follows:
Mine |
Q4
2017GoldProduction(ounces)
(1) |
Full-year
2017GoldProduction(ounces)
(1) |
2017RevisedAnnual
ProductionGuidance(ounces) (1) |
2017OriginalAnnual
ProductionGuidance(ounces) (1) |
Fekola |
105,110 (2) |
111,450 (2) |
100,000 - 110,000 |
45,000 - 55,000 |
Masbate |
53,419 |
202,468 |
180,000 - 185,000 |
175,000 - 185,000 |
Otjikoto |
52,446 |
191,534 |
170,000 - 180,000 |
165,000 - 175,000 |
La Libertad |
14,696 |
82,337 |
90,000 - 100,000 |
110,000 - 120,000 |
El Limon |
15,082 |
42,776 |
40,000 - 50,000 |
50,000 - 60,000 |
|
|
|
|
|
B2Gold Consolidated |
240,753 (2) |
630,565 (2) |
580,000 - 625,000 |
545,000 - 595,000 |
(1) B2Gold’s production results and guidance are presented
on a 100% basis.(2) Fekola’s fourth quarter and full-year
2017 gold production includes 72,903 ounces and 79,243 ounces,
respectively, of gold produced during its pre-commercial production
period.
Mine-by-mine cash operating costs and AISC per
ounce in the fourth quarter and full-year 2017 were as follows:
Mine |
Q4 2017Cash
OperatingCosts($ per ounce) |
Full-year 2017Cash
OperatingCosts($ per ounce) |
2017RevisedAnnual
CashOperating CostsGuidance($ per
ounce) |
2017OriginalAnnual
CashOperating CostsGuidance($ per
ounce) |
Fekola |
$277 (1) |
$277 (1) |
$580 - $620 |
$580 - $620 |
Masbate |
$587 |
$543 |
$595 - $635 |
$690 - $730 |
Otjikoto |
$490 |
$468 |
$480 - $520 |
$510 - $550 |
La Libertad |
$1,094 |
$836 |
$795 - $835 |
$625 - $665 |
El Limon |
$778 |
$954 |
$815 - $855 |
$655 - $695 |
|
|
|
|
|
B2Gold Consolidated |
$473 |
$542 |
$610 - $650 |
$610 - $650 |
(1) Includes Fekola’s pre-commercial results.
Mine |
Q4 2017AISC($
per ounce) |
Full-year
2017AISC($ per
ounce) |
2017RevisedAnnual
AISCGuidance($ per ounce) |
2017OriginalAnnual
AISCGuidance($ per ounce) |
Fekola |
$419 (1) |
$419 (1) |
$700 - $730 |
$700 - $730 |
Masbate |
$963 |
$843 |
$935 - $975 |
$1,020 - $1,050 |
Otjikoto |
$606 |
$715 |
$725 - $765 |
$855 - $885 |
La Libertad |
$1,504 |
$1,106 |
$1,075 - $1,115 |
$785 - $815 |
El Limon |
$1,231 |
$1,469 |
$1,415 - $1,455 |
$1,065 - $1,095 |
|
|
|
|
|
B2Gold Consolidated |
$754 |
$860 |
$940 - $970 |
$940 - $970 |
(1) Includes Fekola’s pre-commercial results.
Fekola Gold Mine – Mali
Fekola Mine |
Fekola Pre-CommercialProduction(September 24 toNovember
30) |
FekolaCommercialProduction(December) |
Total2017(September 24
toDecember 31) |
Operating and Financial Information (1): |
|
|
|
Gold Production (ounces) |
79,243 |
32,207 |
111,450 |
Gold Sold (ounces) (2) |
79,243 |
4,757 |
84,000 |
Inventory at Dec 31, 2017 |
|
|
|
- In-circuit Inventory (ounces) |
|
3,343 |
3,343 |
- Finished Gold Inventory (ounces) |
|
24,107 |
24,107 |
|
|
|
|
Gold Sales Revenues (2) ($ in thousands) |
100,864 |
6,064 |
106,928 |
Average realized selling price ($ per ounce) |
1,273 |
1,275 |
1,273 |
|
|
|
|
Cash Operating Costs ($ per ounce) |
|
311 |
277 |
AISC ($ per ounce) |
|
446 |
419 |
(1) Fekola Mine’s operating and financial
information are presented on a 100% basis.(2) During the
pre-commercial production period, a total of 79,243 ounces of gold
were sold resulting in pre-commercial production revenues of $100.9
million. Included in these sales are 42,243 ounces (related gold
sales revenues of $53.3 million) that were physically sold in
December but were produced during the pre-commercial production
period.
On September 25, 2017, the Company announced
that it had completed construction of the Fekola mill on budget and
commenced ore processing at the Fekola Mine, more than three months
ahead of the original schedule. The Fekola mill started processing
ore on September 24, 2017, and the first gold pour at the Fekola
Mine was achieved on October 7, 2017. On November 30, 2017, the
Fekola Mine achieved commercial production, one month ahead of the
revised schedule and four months ahead of the original schedule.
Throughput ran above nameplate capacity during the 30-day test
period (on average) with significantly better than expected plant
availability, mill feed grades and recoveries.
Gold production from the Fekola Mine in 2017 was
111,450 ounces (including 79,243 ounces of pre-commercial
production), far surpassing the upper end of its original guidance
range (of 45,000 to 55,000 ounces) due to its early start-up and
strong ramp-up performance. In the fourth quarter of 2017, the
Fekola Mine produced 105,110 ounces of gold (including 72,903
ounces of pre-commercial production).
In the fourth quarter of 2017 (including
Fekola’s pre-commercial production results), Fekola’s cash
operating costs were $277 per ounce (compared to guidance of
between $580 and $620 per ounce) and AISC were $419 per ounce
(compared to guidance of between $700 and $730 per ounce). Both
were significantly below guidance (by approximately 50%),
attributable to Fekola’s very strong ramp-up performance which
resulted in much higher than budgeted gold production and lower
than budgeted production costs.
Total capital expenditures for Fekola for the
year ended December 31, 2017, totaled $222.4 million versus a total
budget of $231.0 million. Cumulative expenditures on the Fekola
Project, to date, are $596.8 million including $41.0 million of
pre-construction expenditures compared with a total budget to date
of $599.0 million. The final $15 million costs, related to the
Fadougou village relocation, are expected to be incurred in
2018.
For 2018, the Fekola Mine is expected to produce
between 400,000 and 410,000 ounces of gold (see “2018 Production
Outlook and Cost Guidance” section), the first full year of
production. Cash operating costs are expected to be between $345
and $390 per ounce, and AISC between $575 and $625 per ounce.
Based on the new life of mine (“LoM”) plan (see
news release dated 9/25/2017), the Fekola Mine is projected to
produce approximately 400,000 ounces of gold annually for the first
three years at cash operating costs of $357 per ounce and AISC of
$604 per ounce. For the first seven years, the Fekola Mine is
projected to produce approximately 374,000 ounces of gold annually
with cash operating costs of $391 per ounce and AISC of $643 per
ounce. Over the initial ten-year LoM, Fekola is projected to
produce an average of 345,000 ounces per annum at cash operating
costs of $428 per ounce and AISC of $664 per ounce.
The Fekola Shareholders' Agreement and the Share
Purchase Agreement for the purchase of the additional 10% of Fekola
have recently been finalized and signed by the relevant Malian
government ministers and the Malian Council of Ministers. The
agreements are now subject only to ratification by the Mali
National Assembly which is expected at their next scheduled sitting
in April 2018. Upon such ratification, the Company will transfer
ownership of 20% of Fekola SA (the Company’s indirect subsidiary
which owns the mine) to the State of Mali (consisting of a 10% free
carried non-participating interest plus an additional 10%
participating interest purchased by the State of Mali). The first
non-participating 10% of the State of Mali's ownership will entitle
it to an annual priority dividend equivalent to 10% of calendar net
income of Fekola SA. The second fully participating 10% of the
State of Mali's interest will entitle it to ordinary dividends
payable (on the same basis as any ordinary dividends declared and
payable to the Company for its 80% interest).
Masbate Gold Mine – The Philippines
The Masbate Mine in the Philippines achieved
another very strong year in 2017, producing 202,468 ounces of gold,
the second-highest annual production ever for the mine (only
slightly below its annual production record of 206,224 ounces of
gold achieved in the prior year). Masbate’s 2017 gold production
exceeded the upper end of both its revised and original guidance
ranges by 9% (or 17,468 ounces). The higher production was due to
better than expected recoveries and grades, mainly driven by
significantly higher than budgeted oxide ore tonnage from the
Colorado Pit. The Masbate Mine also continued its outstanding
safety performance, achieving over two years (810 days) without a
Lost-Time-Injury at year-end. In the fourth quarter of 2017, the
Masbate Mine produced 53,419 ounces of gold, significantly above
both budgeted and reforecast production by 24% (or 10,498
ounces).
In July 2017, the Masbate operations were
presented with the Philippine Department of Environment and Natural
Resources’ prestigious Saringaya Award for its contribution to
environmental protection, conservation and management in the
regions surrounding the Masbate Mine.
For the full-year 2017, Masbate’s cash operating
costs were $543 per ounce, well below the low end of its reduced
guidance range (of between $595 and $635 per ounce), previously
lowered by $95 per ounce in the second quarter of 2017. This was
mainly the result of higher than expected production and lower than
expected production costs (due to cost savings in most areas) and
stockpile adjustments. In the fourth quarter of 2017, Masbate’s
cash operating costs were $587 per ounce (Q4 2016 – $547 per
ounce).
Masbate’s AISC for the year were $843 per ounce,
significantly below the low end of its reduced guidance range (of
between $935 and $975 per ounce), previously lowered by $85 per
ounce in the second quarter of 2017. In the fourth quarter of 2017,
Masbate’s AISC were $963 per ounce (Q4 2016 – $788 per
ounce).
Capital expenditures totaled $52.6 million in
2017, consisting mainly of mobile equipment costs of $27.5 million,
pre-stripping costs of $8.9 million, powerhouse upgrade costs of
$3.6 million and processing plant upgrades of $3.1 million. In the
fourth quarter of 2017, capital expenditures totaled $16.1 million
which included mobile equipment costs of $10.3 million and
pre-stripping costs of $2.8 million.
For 2018, the Masbate Mine is expected to
produce between 180,000 and 190,000 ounces of gold, primarily from
the higher-grade Main Vein Pit, at cash operating costs of between
$675 and $720 per ounce and AISC of between $875 and $925 per ounce
(see “2018 Production Outlook and Cost Guidance”
section).
A detailed capital cost estimate of $25.5
million was recently completed by Lycopodium, working with the
Company’s engineering team, for the expansion of the Masbate
processing plant to 8 million tonnes per year ($23 million in 2018
and $2.5 million in 2019). The expansion primarily consists of
adding a third ball mill and upgrading the existing crushing
circuit. No addition to the mining fleet is required as the
additional feed will come from the lower-grade material that is
currently in the mine plan and scheduled to be stockpiled. When the
expansion is on line (expected in early 2019), it is expected to
keep Masbate’s annual gold production near 200,000 ounces per year
during the mining phase, and is expected to keep gold production
above 100,000 ounces per year when the low-grade stockpiles are
processed at the end of the project life.
Otjikoto Gold Mine – Namibia
The Otjikoto Mine in Namibia had a record year
in 2017, producing an annual record of 191,534 ounces of gold which
exceeded the upper end of its revised guidance range by 6% (or
11,534 ounces) and the top end of its original guidance range by 9%
(or 16,534 ounces). Gold production was also 15% (or 25,249 ounces)
higher versus 2016. Otjikoto’s outperformance in 2017 was mainly
the result of better than expected high-grade ore tonnage from the
Wolfshag Phase 1 Pit and higher than expected mill throughput. In
the fourth quarter of 2017, the Otjikoto Mine produced 52,446
ounces of gold, exceeding both budgeted and reforecast production
by 10% (or 4,655 ounces).
For the full-year 2017, Otjikoto’s cash
operating costs were $468 per ounce, beating the low end of its
revised guidance range (of between $480 and $520 per ounce),
previously reduced by $30 per ounce in the second quarter of 2017.
This was mainly the result of higher production and lower
production costs (due to effective cost management throughout the
year through supply contract review and renegotiation, and design
changes to pit phases to reduce waste tonnage mined). In the fourth
quarter of 2017, Otjikoto’s cash operating costs were $490 per
ounce (Q4 2016 – $367 per ounce).
Otjikoto’s AISC for the year were $715 per
ounce, also beating the low end of its revised guidance range (of
between $725 and $765 per ounce), previously reduced by $130 per
ounce in the second quarter of 2017. The lower AISC reflect the
reduction in cash operating costs noted above as well as lower than
planned sustaining capital expenditures (pre-stripping costs were
$9.8 million lower than budget due to lower mining costs and lower
than expected strip ratios). In the fourth quarter of 2017,
Otjikoto’s AISC were $606 per ounce (Q4 2016 – $587 per
ounce).
Capital expenditures totaled $41.2 million in
2017 and included mobile equipment purchases of $12.2 million,
pre-stripping costs of $11.4 million, $6.6 million for capitalized
equipment rebuilds and $4.9 million for installation of a solar
power plant. Capital expenditures in the fourth quarter of 2017
totaled $5.1 million and included $1.9 million for pre-stripping
costs and $0.4 million for mobile equipment costs.
For 2018, the Otjikoto Mine is expected to
produce between 160,000 and 170,000 ounces of gold, primarily from
the Otjikoto Pit, at cash operating costs of between $480 and $525
per ounce and AISC of between $700 and $750 per ounce (see “2018
Production Outlook and Cost Guidance” section).
Geotechnical, hydrogeological and design studies
for Wolfshag have been completed, based on an updated resource
model, resulting in a larger open pit than previously reported.
Updated Wolfshag mineral reserves and resources will be reported in
the Company's 2018 Annual Information Form which is scheduled to be
filed by March 29, 2018. In addition, the Wolfshag mineral
resource remains open down-plunge and may be exploitable in the
future by underground mining.
La Libertad Gold Mine – Nicaragua
For the full-year 2017, La Libertad Mine in
Nicaragua produced 82,337 ounces of gold, 9% (or 7,663 ounces)
below the low end of its revised guidance range. During 2017, gold
production at La Libertad was negatively impacted by permitting
delays for new mining areas. However, significant progress has been
made in advancing the mine permits. The Company received the San
Juan mining permit in September 2017 and the San Diego mining
permit in February 2018. As a result, mining has now commenced in
both pits. For the Jabali Antenna Pit, the Company is expecting to
receive its permit in time to start production from the pit in the
third quarter of 2018. Jabali Antenna Underground remains under
development with the planned ventilation raise now complete. Access
ramp development has advanced approximately two months ahead of
original schedule for 2018, as a result of an early start by the
underground mining contractor. In the fourth quarter of 2017, La
Libertad Mine produced 14,696 ounces of gold (Q4 2016 – 35,165
ounces).
La Libertad’s cash operating costs and AISC for
the year were $836 per ounce and $1,106 per ounce, respectively.
Both were within their revised guidance ranges. On a total basis
(versus per ounce) mining, processing and site general costs were
all less than budget due to lower than budgeted mined tonnage, haul
distance and reagent consumption, as well as aggressive cost
management. In the fourth quarter of 2017, La Libertad’s cash
operating costs and AISC were $1,094 per ounce and $1,504 per
ounce, respectively.
Capital expenditures totaled $23.8 million in
2017, consisting primarily of project development costs of $7.2
million, underground development costs of $5.8 million, La
Esperanza tailings dam expansion of $4.8 million and land
acquisitions of $3.1 million. Capital expenditures in the fourth
quarter of 2017 totaled $5.7 million and included $2.9 million in
project development costs related to the new San Juan and San Diego
open pits and underground development costs of $2.1 million at
Jabali Antenna Underground.
For 2018, La Libertad Mine is expected to
produce between 115,000 and 120,000 ounces of gold at cash
operating costs of between $745 and $790 per ounce and AISC of
between $1,050 and $1,100 per ounce (see “2018 Production Outlook
and Cost Guidance” section). La Libertad’s production forecast
assumes that production will start from the Jabali Antenna Pit in
the third quarter of 2018 (dependent upon the successful completion
of resettlement activities and receipt of the remaining mining
permits). Current plans at La Libertad include mining and
processing into 2020 with a combination of mineral reserves and
mineral resources. The Company has a successful track record of
converting its mineral resources to reserves, and exploration for
additional mineral targets continues. Mineral resources that are
not mineral reserves do not have demonstrated economic
viability.
El Limon Gold Mine – Nicaragua
For the full-year 2017, El Limon Mine in
Nicaragua produced 42,776 ounces of gold, which was within its
revised guidance range (of between 40,000 and 50,000 ounces).
During 2017, El Limon’s production was affected by water pumping
issues which had reduced high-grade ore flow from Santa Pancha
Underground. In the fourth quarter of 2017, mining operations at El
Limon returned to budgeted (normal) production rates with the
successful rehabilitation of the Santa Pancha 1 dewatering well. In
the fourth quarter of 2017, El Limon Mine produced 15,082 ounces of
gold (Q4 2016 – 10,007 ounces). The mining permit for the Mercedes
Pit was recently received, and development of the pit has
commenced.
El Limon’s cash operating costs for the year
were $954 per ounce (revised guidance was between $815 and $855 per
ounce) and AISC were $1,469 per ounce (revised guidance was between
$1,415 and $1,455 per ounce). In the fourth quarter of 2017, El
Limon’s cash operating costs and AISC were $778 per ounce and
$1,231 per ounce, respectively.
Capital expenditures totaled $16.0 million in
2017, consisting mainly of underground development of $8.9 million,
mining development/project costs of $3.5 million and mining
equipment of $2.5 million. Capital expenditures in the fourth
quarter of 2017 totaled $5.1 million which consisted mainly of
underground development of $2.9 million and mining
development/project costs of $1.2 million.
For 2018, El Limon is expected to produce
between 55,000 and 60,000 ounces of gold at cash operating costs of
between $700 and $750 per ounce and AISC of between $1,135 and
$1,185 per ounce (see “2018 Production Outlook and Cost Guidance”
section).
On February 23, 2018, the Company announced a
positive initial open-pit Inferred Mineral Resource at the
newly-discovered El Limon Central zone of 5,130,000 tonnes at a
grade of 4.92 grams per tonne (“g/t”) of gold containing 812,000
ounces of gold (100% basis) (see news release dated 2/23/18). This
large, good grade, new zone has the potential to decrease El
Limon’s cash operating costs per ounce and AISC per ounce, and
significantly increase its mine life. El Limon Central zone, at its
closest location, is approximately 150 metres from El Limon mill
facility, extending southeast and northwest, adjacent to existing
plant and administrative infrastructure. Historical records
indicate that parts of the Central zone had been mined underground
in past decades. The Company’s recent exploration work indicates
that underground mining was much more limited than previously
thought. The Company is currently conducting additional
metallurgical testing on El Limon Central ore and a study to
evaluate the potential to expand El Limon throughput to
significantly increase annual gold production and reduce cash
operating costs. The study results are expected by mid-2018.
2018 Production Outlook and Cost
Guidance
In 2018, with the planned first full year of
production from the Fekola Mine, consolidated gold production is
forecast to be between 910,000 and 950,000 ounces. This represents
an increase in annual consolidated gold production of approximately
300,000 ounces for B2Gold in 2018 from 2017. The Company’s forecast
consolidated cash operating costs are expected to remain low in
2018 and be between $505 and $550 per ounce, and AISC are expected
to decrease by approximately 6% from 2017 and be between $780 and
$830 per ounce, respectively.
The Fekola Mine is projected to be a large,
low-cost producer. The resulting increase in production levels,
combined with low costs, are expected to dramatically increase
B2Gold’s production, revenues, cash from operations and cash flow
for many years, based on current assumptions (including a gold
price assumption of $1,300 per ounce). On average over the next
three years, beginning in 2018, the Company is projecting per annum
gold sales revenues of approximately $1.2 billion, cash flow from
operations of close to $0.5 billion and a significant increase in
free cash flow (operating cash flows less investing cash flows).
Mine-by-mine 2018 ranges for forecast gold
production, cash operating costs per ounce and AISC per ounce are
as follows:
Mine |
2018 ForecastGold
Production(ounces) (1) |
2018 Forecast Cash OperatingCosts
($ per ounce) |
2018 ForecastAISC ($ per
ounce) |
Fekola |
400,000 - 410,000 |
$345 - $390 |
$575 - $625 |
Masbate |
180,000 - 190,000 |
$675 - $720 |
$875 - $925 |
Otjikoto |
160,000 - 170,000 |
$480 - $525 |
$700 - $750 |
La Libertad |
115,000 - 120,000 |
$745 - $790 |
$1,050 - $1,100 |
El Limon |
55,000 - 60,000 |
$700 - $750 |
$1,135 - $1,185 |
|
|
|
|
B2Gold Consolidated |
910,000 - 950,000 |
$505 - $550 |
$780 - $830 |
(1) B2Gold’s production guidance is presented on a 100%
basis.
B2Gold has a 2018 exploration budget of
approximately $52.4 million. West Africa and Nicaragua will be the
primary areas of focus in 2018.
Positive drill results from the Company’s 2017
exploration program at the Fekola area indicated that the main
Fekola deposit, with additional drilling, could extend
significantly to the north (see news release dated 11/9/2017). In
addition, drilling below the extensive saprolite resource at the
Anaconda, Adder and Mamba zones has discovered three,
well-mineralized bedrock (sulphide) zones, indicating the potential
for large, Fekola-style mineralized zones. Exploration results from
the 2018 drill program at the Fekola area are expected by mid-year
2018.
On February 22, 2018, the Company also announced
a positive Initial Inferred Mineral Resource at the Toega Project
of 17,530,000 tonnes at a grade of 2.01 g/t of gold containing
1,130,000 ounces of gold which has the potential to be an
open-pittable deposit (see news release dated 2/22/18). The Toega
mineralized zone now extends 1,200 metres along strike and is 430
metres wide and up to 400 metres deep. The Toega mineralized zone
remains open along strike to the north-northeast and down-dip.
Recent drilling has intersected good grade in a potential new
mineralized zone. Drilling is ongoing to infill and determine the
ultimate size of the Toega zone, and to further test the new
mineralized zone. Exploration results from the 2018 drill program
for Toega are expected in the latter part of 2018.
Outlook and Strategy
2017 was an important and transformative year
for B2Gold. The Company delivered another record year of profitable
gold production, beating production and cost projections. From its
five mines, B2Gold produced 630,565 ounces of gold with cash
operating costs of $542 per ounce of gold and AISC of $860 per
ounce of gold (including Fekola’s pre-commercial production
results), and completed construction, with our in-house
construction team, of the low-cost, flagship Fekola Mine, in Mali,
in late September, three months ahead of schedule and on
budget.
In addition to the Fekola construction success
in 2017, the Company’s Masbate Mine in the Philippines and Otjikoto
Mine in Namibia had record, or near-record, gold production years
with higher than budgeted gold production and lower cash operating
costs and AISC per ounce.
While the Company’s El Limon and La Libertad
mines struggled in 2017, B2Gold and the Nicaragua management team
have, as planned at El Limon, made operational improvements and
accessed open-pit ore that has resulted in production returning to
more normal levels. The significant discovery of the large,
high-grade, open-pit Inferred Mineral Resource at El Limon Central
has the potential to increase its mine life and annual production,
as well as lower its production costs.
At La Libertad, gold production and costs are
expected to improve now that the Company has received mining
permits for and commenced mining new open-pit deposits. Based on
the anticipated receipt of additional mining permits in 2018, the
Company expects gold production and costs to continue to improve.
In addition, exploration continues at a number of open-pit targets
at La Libertad.
The Fekola construction success was followed by
an impressive production ramp-up in the fourth quarter of 2017
which resulted in B2Gold declaring the commencement of commercial
production on November 30, 2017. Based on the typical ramp-up of a
new mine and plant facility, the Company had projected gold
production from Fekola, in the fourth quarter of 2017, of between
45,000 to 55,000 ounces of gold (approximately 50% of projected
full quarterly gold production in 2018).
The Fekola Mine produced almost 112,000 ounces
of gold in the ramp-up period based on higher than projected gold
grades, better recoveries and the rapid ramp-up of mill tonnage
throughput. This success was largely due to the performance of the
experienced B2Gold in-house technical teams, including geology,
mine construction, mill commissioning and mining. Due to this
success, the Fekola Mine delivered cash operating costs and AISC
for the fourth quarter of 2017 of $277 and $419 per ounce of gold,
respectively, approximately 50% below budget.
In 2018, the Fekola Mine is projected to produce
between 400,000 and 410,000 ounces of gold, with cash operating
costs and AISC ranges of approximately $345 to $390 per ounce and
$575 to $625 per ounce, respectively.
Based on current projections, inclusion of a
full year’s production from the Fekola Mine will increase B2Gold’s
consolidated gold production by 300,000 ounces to between 910,000
and 950,000 ounces of consolidated gold production in 2018, with
projected AISC of between $780 to $830 per ounce. Based on a $1,300
gold price, and other current assumptions, the Company expects cash
from mining operations to increase from approximately $155 million
in 2017 to an average of close to $0.5 billion per year over the
next three years, including 2018.
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
the projected 2018 production of between 910,000 to 950,000 ounces
gold from the Company’s five gold mines.
This remarkable growth has been driven by:
the Company’s disciplined approach to acquisitions, based on
detailed due diligence by B2Gold’s internationally experienced,
technical, legal and financial teams; the outstanding performance
of our in-house construction team that built the Company’s La
Libertad Mine and mill in Nicaragua, the Otjikoto Mine and mill in
Namibia and, most recently, the Fekola Mine and mill in Mali;
B2Gold’s highly-experienced exploration team that has realized
significant exploration success at the Company’s mine properties;
and our remarkable dedicated country and mine management teams and
their dedicated employees, who are supported and empowered by our
corporate executive and management teams.
This dramatic growth and the Company’s historic
and ongoing commitment to international acquisitions and
exploration has resulted in the Company generating numerous
exciting growth opportunities from existing assets.
Looking Forward
In 2018, B2Gold plans to: continue to optimize
production from its existing gold mines; strive to maintain its
outstanding health and safety records; continue commitment to
Corporate Social Responsibility; remain in a strong financial
position while reducing debt levels; and pursue further growth
through the exploration and development of our impressive pipeline
of existing properties and new exploration initiatives.
Between late 2011 and late 2014, the Company
completed two accretive acquisitions by issuing shares in friendly
takeovers to the shareholders of Auryx Gold and Papillon Resources,
the owners of the Otjikoto Project in Namibia and the Fekola
Project in Mali, respectively. At the time of the transactions, and
during the successful construction of these mines, growth in the
gold mining sector had fallen largely out of favor with many
investors and, therefore, many gold mining companies. B2Gold
remained committed to its successful, long-term strategy of growth
through accretive acquisitions and exploration, irrespective of
both the gold price and short-term market trends.
Due to the unpopularity of growth with so many
gold sector investors, there was little or no competition to
acquire these accretive development projects.
With some investors, and therefore gold mining
companies' renewed interest in growth, B2Gold believes that
competition for the acquisition of development assets has returned
and will likely continue to increase. Given this new
competitive environment and our successful strategy of contrarian
opportunistic acquisitions that have been successfully developed,
B2Gold’s current strategy does not include pursuing growth through
significant mergers or acquisitions of development-stage companies
or projects. Instead, B2Gold intends to focus on organic growth,
unlocking potential value through the possible expansion of
B2Gold’s existing mines, development of opportunities at current
projects and further brownfields and grassroots exploration around
the mines and existing properties. In addition, B2Gold will
continue to acquire and explore exploration opportunities directly
and consider potential growth through joint-ventures and
investments in junior companies with high-quality exploration
projects.
As part of this strategy to pursue organic
growth, the Company has budgeted a total of $53 million for
exploration in 2018. Brownfields exploration will make up
approximately 80% of this budget, focusing on drilling campaigns on
existing projects.
In Mali, a total of $15 million is budgeted for
Fekola exploration, with half of the budget dedicated to the Fekola
North extension drilling, which is ongoing with four drill rigs,
following up on the positive drill results for 2017 with infill
drilling and to test the ultimate size potential of the Fekola
deposit. The second half of the budget is planned for ongoing
exploration drilling of the Anaconda zones where four drill rigs
are following up with further drilling on the four, good gold-grade
bedrock zones discovered in 2017 and to test additional
targets.
In addition, the Company’s Nicaragua exploration
team will continue drilling to infill and determine the ultimate
size of the recently-announced El Limon Central large, good-grade,
open-pit Inferred Mineral Resource, located near El Limon mill, and
test other targets on the property. At La Libertad Mine, also in
Nicaragua, exploration work, including drilling, is ongoing on a
number of near-surface and underground targets on the large
property.
In Burkina Faso, B2Gold’s exploration team will
continue drilling on a significant new discovery, called the Toega
zone, where an impressive, initial, good-grade, open-pit Inferred
Mineral Resource was recently completed and announced. Drilling in
2018 will focus on determining the ultimate size of the main Toega
zone, which is open to depth, in good gold grade material, and test
what the potential is for additional mineralized zones parallel to
the Toega zone.
In conclusion, 2018 will be another
transformative, record-setting year of low-cost gold production for
B2Gold as the newest senior gold producer. With the Company’s
projected dramatic increase in gold production and cash from
operations in 2018, and commitment to the pursuit of continued
growth through the exploration and development of the Company's
existing pipeline of assets, B2Gold is looking forward to a
successful 2018.
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.
John Rajala, Vice President of Metallurgy of
B2Gold, a qualified person under NI 43-101, has approved El Limon
development information contained in this news release.
Fourth Quarter and Year-End 2017
Financial Results – Conference Call Details
B2Gold will release its fourth quarter and
year-end 2017 results before the North American markets open on
Thursday, March 15, 2018.
B2Gold executives will host a conference call to
discuss the results on Thursday, March 15, 2018,
at 10:00 am PDT / 1:00 pm EDT. You may access the
call by dialing the operator at +1 647-788-4965 (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 http://www.investorcalendar.com/event/23943. A playback
version of the call 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 7278809).
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 MacLeanVice President, Investor
Relations604-681-8371imaclean@b2gold.com
Katie BromleyManager, Investor Relations & Public
Relations604-681-8371 kbromley@b2gold.com
The Toronto Stock Exchange and the NYSE American
LLC neither approve nor disapprove the information contained in
this news release.
Production results and the Company’s guidance
presented in this news release reflect total production at the
mines the Company operates on a 100% 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, guidance, forecasts, estimates and other
statements regarding future financial and operational performance,
events, production, mine life, revenue, cash flows, costs,
including projected cash operating costs and AISC and expected
decrease of forecast consolidated cash operating costs and AISC in
2018, capital expenditures, budgets, ore grades, sources and types
of ore, stripping ratios, throughput, ore processing, cash flows
and growth; production estimates and guidance, including the
Company’s projected increase of gold production to between 910,000
and 950,000 ounces in 2018, reflecting production growth of
approximately 300,000 ounces from 2017; project-specific
projections of gold production and costs; the increased production
and low costs increasing the Company’s production, revenues, cash
from operations and cash flow for many years; and statements
regarding anticipated exploration, drilling, development,
construction, production, permitting and other activities and
achievements of the Company, including but not limited to: expected
grades and sources of ore to be processed in 2018; the anticipated
repayment of the convertible notes maturing on October 1, 2018;
having sufficient liquidity from 2018 operating cash flows and
existing credit facilities to repay the notes in full; the expected
repayment of equipment loans and delivery of ounces under the
Prepaid Sales Arrangements; the Fekola Mine being a low cost
producer; the incurrence of costs for, and timing of, the Fadougou
village relocation; the estimates, assumptions and forecasts
included in the Fekola Mine’s new LoM plan; negotiations with the
State of Mali and the potential outcomes thereof, including the
ratification by the Mali National Assembly of the Shareholders
Agreement and the final ownership of Fekola SA; further drilling at
Fekola extending the main Fekola deposit to the north and having
the potential for large, Fekola-style mineralized zones; the
potential to identify additional Fekola-type structures in the
underlying sulphide zones; the potential to extend the LoM at La
Libertad for up to an additional 2 years; the Jabali Underground
zone producing ore in the latter part of 2018; El Limon Central
Zone potentially decreasing El Limon’s cash operating costs and
AISC per ounce, increasing mine life and potentially expanding El
Limon mill to a higher throughput, doubling annual gold production;
timing of further drill testing at El Limon; the ongoing drilling
program as part of a feasibility study which will confirm resources
and grades, the optimum grind size, capital costs and final project
economics; the potential production of gold and silver ounces
through reprocessing of old tailings of El Limon, based on the
results of an initial study completed in 2017; the completion of an
engineering study, including an expansion study for the Limon mill,
to determine potential accelerated development of El Limon Central
Zone and bringing it into the mine plan as early as 2019; West
Africa and Nicaragua being the primary areas of focus in 2018; the
timing of expansion of the Masbate processing plant to 8 million
tonnes per year, and the resulting expected annual production at
Masbate of near 200,000 ounces per year during the mining phase and
above 100,000 ounces per year when low grade stockpiles are
processed; evaluations for Toega and the potential to be an
open-pittable deposit; Toega having the potential to grow and
achieve the kind of scale of resource that might meet the Company’s
guideline criteria and the potential to enhance resources and
increase production at existing operations as well as greenfield
targets. 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 and assumptions associated with
the volatility of metal prices and our common shares; risks and
dangers inherent in exploration, development and mining activities;
uncertainty of reserve and resource estimates; risk of not
achieving production, cost or other estimates; risk that actual
production, development plans and costs differ materially from the
estimates in our feasibility studies; risks related to hedging
activities and ore purchase commitments; the ability to obtain and
maintain any necessary permits, consents or authorizations required
for mining activities; uncertainty about the outcome of
negotiations with the Government of Mali; risks related to
environmental regulations or hazards and compliance with complex
regulations associated with mining activities; the ability to
replace mineral reserves and identify acquisition opportunities;
unknown liabilities of companies acquired by B2Gold; ability to
successfully integrate new acquisitions; fluctuations in exchange
rates; availability of financing; risks relating to financing and
debt; risks related to operations in foreign and developing
countries and compliance with foreign laws; risks related to 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 instability or acts of terrorism; risks
related to reliance upon contractors, third parties and joint
venture partners; challenges to title or surface rights; dependence
on key personnel and 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
our operations including risks related to strikes and the halting
of such operations from time to time; risks related to failures of
information systems or information security threats; ability
to maintain adequate internal control over financial reporting as
required by law; risks relating to 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, the Company’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 the Company’s forward-looking statements.
There can be no assurance that such statements will prove to be
accurate, and actual results, performance or achievements could
differ materially from those expressed in, or implied by, these
forward-looking statements. Accordingly, no assurance can be given
that any events anticipated by the forward-looking statements will
transpire or occur, or if any of them do, what benefits or
liabilities B2Gold will derive therefrom. The Company’s
forward-looking statements reflect current expectations regarding
future events and operating performance and speak only as of the
date hereof and the Company does not assume any obligation to
update forward-looking statements if circumstances or management's
beliefs, expectations or opinions should change other than as
required by applicable law. The Company’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 the Company'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; the Company’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. 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 such measures and reconciliation of certain measures to
IFRS terms.
Cautionary Note to United States
InvestorsThe disclosure in this news release and in the
documents described in this news release regarding mineral
properties was prepared in accordance with Canadian National
Instrument 43-101 (“NI 43-101”), which differs significantly from
the 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
U.S. standards.
The Company has prepared its public disclosures
in accordance with Canadian securities laws, which differ in
certain respects from U.S. securities laws. 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 the SEC 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,
“reserves” reported by the Company under Canadian standards may not
qualify as reserves under SEC standards. Under SEC standards,
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. Among
other things, all necessary permits would be required to be in hand
or issuance imminent in order to classify mineralized material as
reserves under the SEC standards. 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 U.S.
federal securities laws, rules and regulations. “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. 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,
2017 |
|
For the three months ended Dec. 31, 2016 |
|
For the twelve months ended Dec. 31,
2017 |
|
For the twelve months ended Dec. 31, 2016 |
|
|
|
|
|
|
|
|
|
Gold
revenue |
|
$ |
173,990 |
|
|
$ |
181,189 |
|
|
$ |
638,677 |
|
|
$ |
683,293 |
|
|
|
|
|
|
|
|
|
|
Cost of
sales |
|
|
|
|
|
|
|
|
Production costs |
|
(81,772 |
) |
|
(77,668 |
) |
|
(302,394 |
) |
|
(275,400 |
) |
Depreciation and
depletion |
|
(41,523 |
) |
|
(54,839 |
) |
|
(160,469 |
) |
|
(172,324 |
) |
Royalties and
production taxes |
|
(7,576 |
) |
|
(6,232 |
) |
|
(25,530 |
) |
|
(25,493 |
) |
Total cost of
sales |
|
(130,871 |
) |
|
(138,739 |
) |
|
(488,393 |
) |
|
(473,217 |
) |
|
|
|
|
|
|
|
|
|
Gross
profit |
|
43,119 |
|
|
42,450 |
|
|
150,284 |
|
|
210,076 |
|
|
|
|
|
|
|
|
|
|
General and
administrative |
|
(18,384 |
) |
|
(17,119 |
) |
|
(43,613 |
) |
|
(40,918 |
) |
Share-based
payments |
|
(4,875 |
) |
|
(2,216 |
) |
|
(18,127 |
) |
|
(13,651 |
) |
Gain on sale of Lynn
Lake royalty |
|
— |
|
|
— |
|
|
6,593 |
|
|
— |
|
Write-down of mineral
property interests |
|
(665 |
) |
|
— |
|
|
(4,150 |
) |
|
(5,068 |
) |
Loss on sale of mineral
properties |
|
— |
|
|
(1,338 |
) |
|
— |
|
|
(9,886 |
) |
Provision for
non-recoverable input taxes |
|
(840 |
) |
|
(1,259 |
) |
|
(2,180 |
) |
|
(2,767 |
) |
Foreign exchange gains
(losses) |
|
1,868 |
|
|
(847 |
) |
|
(1,012 |
) |
|
(2,737 |
) |
Other |
|
398 |
|
|
(4,493 |
) |
|
(1,145 |
) |
|
(8,791 |
) |
Operating
income |
|
20,621 |
|
|
15,178 |
|
|
86,650 |
|
|
126,258 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Unrealized (loss) gain
on fair value of convertible notes |
|
(7,212 |
) |
|
5,927 |
|
|
(11,144 |
) |
|
(46,742 |
) |
Community
relations |
|
(1,183 |
) |
|
(2,529 |
) |
|
(5,512 |
) |
|
(5,051 |
) |
Interest and financing
expense |
|
(5,495 |
) |
|
(1,959 |
) |
|
(12,906 |
) |
|
(10,184 |
) |
Realized loss on
derivative instruments |
|
(680 |
) |
|
(1,451 |
) |
|
(3,364 |
) |
|
(13,962 |
) |
Unrealized gain on
derivative instruments |
|
9,700 |
|
|
20,265 |
|
|
9,684 |
|
|
22,697 |
|
Write-down of long-term
investments |
|
— |
|
|
(2,671 |
) |
|
(1,613 |
) |
|
(2,856 |
) |
Other |
|
8,522 |
|
|
(222 |
) |
|
7,101 |
|
|
(1,630 |
) |
Income before
taxes |
|
24,273 |
|
|
32,538 |
|
|
68,896 |
|
|
68,530 |
|
|
|
|
|
|
|
|
|
|
Current income tax,
withholding and other taxes |
|
(13,267 |
) |
|
(10,065 |
) |
|
(27,500 |
) |
|
(25,064 |
) |
Deferred income tax
recovery (expense) |
|
23,460 |
|
|
(14,396 |
) |
|
20,170 |
|
|
(4,866 |
) |
Net income for
the period |
|
$ |
34,466 |
|
|
$ |
8,077 |
|
|
$ |
61,566 |
|
|
$ |
38,600 |
|
|
|
|
|
|
|
|
|
|
Attributable
to: |
|
|
|
|
|
|
|
|
Shareholders of the
Company |
|
$ |
29,879 |
|
|
$ |
6,221 |
|
|
$ |
56,852 |
|
|
$ |
39,131 |
|
Non-controlling
interests |
|
4,587 |
|
|
1,856 |
|
|
4,714 |
|
|
(531 |
) |
Net income for
the period |
|
$ |
34,466 |
|
|
$ |
8,077 |
|
|
$ |
61,566 |
|
|
$ |
38,600 |
|
|
|
|
|
|
|
|
|
|
Earnings per
share (attributable to shareholders of the Company) |
|
|
|
|
|
|
|
|
Basic |
|
$ |
0.03 |
|
|
$ |
0.01 |
|
|
$ |
0.06 |
|
|
$ |
0.04 |
|
Diluted |
|
$ |
0.03 |
|
|
$ |
0.00 |
|
|
$ |
0.06 |
|
|
$ |
0.04 |
|
|
|
|
|
|
|
|
|
|
Weighted
average number of common shares outstanding (in
thousands) |
|
|
|
|
|
|
|
|
Basic |
|
979,691 |
|
|
960,976 |
|
|
976,366 |
|
|
941,737 |
|
Diluted |
|
993,848 |
|
|
1,044,461 |
|
|
991,413 |
|
|
955,145 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
B2GOLD CORP. |
CONSOLIDATED STATEMENTS OF CASH FLOWS |
(Expressed
in thousands of United States dollars, except per share
amounts) |
(Unaudited) |
|
|
|
For the three months ended Dec. 31,
2017 |
|
For the three months ended Dec. 31, 2016 |
|
For the twelve months ended Dec. 31,
2017 |
|
For the twelve months ended Dec. 31, 2016 |
Operating
activities |
|
|
|
|
|
|
|
|
Net
income for the year |
|
$ |
34,466 |
|
|
$ |
8,077 |
|
|
$ |
61,566 |
|
|
$ |
38,600 |
|
Mine
restoration provisions settled |
|
(65 |
) |
|
(31 |
) |
|
(320 |
) |
|
(153 |
) |
Non-cash
charges |
|
8,440 |
|
|
55,390 |
|
|
109,818 |
|
|
245,434 |
|
Changes
in non-cash working capital |
|
(16,867 |
) |
|
12,612 |
|
|
(39,681 |
) |
|
2,011 |
|
Proceeds
from prepaid sales |
|
— |
|
|
— |
|
|
30,000 |
|
|
120,000 |
|
Changes
in long-term value added tax receivables |
|
(368 |
) |
|
6,290 |
|
|
(6,383 |
) |
|
5,919 |
|
Cash provided by operating activities |
|
25,606 |
|
|
82,338 |
|
|
155,000 |
|
|
411,811 |
|
|
|
|
|
|
|
|
|
|
Financing
activities |
|
|
|
|
|
|
|
|
Revolving
credit facility, drawdowns net of transaction costs |
|
25,000 |
|
|
50,000 |
|
|
145,341 |
|
|
100,000 |
|
Repayment
of revolving credit facility |
|
— |
|
|
— |
|
|
— |
|
|
(125,000 |
) |
Fekola
equipment loan facility, drawdowns net of transaction costs |
|
16,893 |
|
|
— |
|
|
54,025 |
|
|
— |
|
Repayment
of Fekola equipment loan facility |
|
(4,651 |
) |
|
— |
|
|
(6,648 |
) |
|
— |
|
Otjikoto
equipment loan facility, drawdowns net of transaction costs |
|
— |
|
|
— |
|
|
6,085 |
|
|
11,043 |
|
Repayment
of Otjikoto equipment loan facility |
|
(2,580 |
) |
|
(4,537 |
) |
|
(9,697 |
) |
|
(8,360 |
) |
Masbate
equipment loan facility, drawdowns net of transaction costs |
|
— |
|
|
— |
|
|
8,114 |
|
|
— |
|
Repayment
of Masbate equipment loan facility |
|
(437 |
) |
|
— |
|
|
(437 |
) |
|
— |
|
Repayment
of Nicaraguan equipment loans |
|
(421 |
) |
|
(428 |
) |
|
(1,556 |
) |
|
(1,783 |
) |
Common
shares issued for cash on exercise of stock options |
|
1,435 |
|
|
2,729 |
|
|
26,503 |
|
|
39,758 |
|
Common
shares issued under At-The-Market offering, net of issuance
costs |
|
— |
|
|
19,504 |
|
|
— |
|
|
44,467 |
|
Interest
and commitment fees paid |
|
(9,590 |
) |
|
(6,235 |
) |
|
(20,623 |
) |
|
(18,336 |
) |
Restricted cash movement |
|
(1,137 |
) |
|
53 |
|
|
(8,085 |
) |
|
(1,319 |
) |
Cash provided by financing activities |
|
24,512 |
|
|
61,086 |
|
|
193,022 |
|
|
40,470 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Investing
activities |
|
|
|
|
|
|
|
|
|
|
|
|
Expenditures on mining interests: |
|
|
|
|
|
|
|
|
|
|
|
|
Fekola
Mine, construction capital |
|
(14,286 |
) |
|
(80,120 |
) |
|
(222,395 |
) |
|
(241,739 |
) |
Fekola
Mine, sales proceeds net of pre-production costs |
|
73,387 |
|
|
— |
|
|
73,387 |
|
|
— |
|
Fekola
Mine, development and sustaining capital |
|
(4,423 |
) |
|
— |
|
|
(4,423 |
) |
|
— |
|
Otjikoto
Mine, development and sustaining capital |
|
(5,084 |
) |
|
(5,392 |
) |
|
(41,172 |
) |
|
(39,241 |
) |
Masbate
Mine, development and sustaining capital |
|
(16,107 |
) |
|
(9,631 |
) |
|
(52,587 |
) |
|
(31,892 |
) |
Libertad
Mine, development and sustaining capital |
|
(5,669 |
) |
|
(4,556 |
) |
|
(23,806 |
) |
|
(18,543 |
) |
Limon
Mine, development and sustaining capital |
|
(5,072 |
) |
|
(2,460 |
) |
|
(16,048 |
) |
|
(7,749 |
) |
Gramalote
Project, prefeasibility and exploration |
|
(3,275 |
) |
|
(6,978 |
) |
|
(11,967 |
) |
|
(11,784 |
) |
Other
exploration and development |
|
(13,058 |
) |
|
(13,664 |
) |
|
(53,673 |
) |
|
(37,036 |
) |
Purchase
of non-controlling interest |
|
(1,500 |
) |
|
— |
|
|
(1,500 |
) |
|
(6,000 |
) |
Cash
proceeds from sale of Lynn Lake royalty, net of transaction
costs |
|
— |
|
|
— |
|
|
6,593 |
|
|
— |
|
Other |
|
949 |
|
|
1,330 |
|
|
748 |
|
|
2,137 |
|
Cash used by investing activities |
|
5,862 |
|
|
(121,471 |
) |
|
(346,843 |
) |
|
(391,847 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
Increase in
cash and cash equivalents |
|
55,980 |
|
|
21,953 |
|
|
1,179 |
|
|
60,434 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Effect of exchange rate
changes on cash and cash equivalents |
|
1,779 |
|
|
(1,040 |
) |
|
1,618 |
|
|
(906 |
) |
Cash and cash
equivalents, beginning of period |
|
89,709 |
|
|
123,758 |
|
|
144,671 |
|
|
85,143 |
|
Cash and cash
equivalents, end of period |
|
$ |
147,468 |
|
|
$ |
144,671 |
|
|
$ |
147,468 |
|
|
$ |
144,671 |
|
|
|
|
|
|
|
|
|
|
|
B2GOLD CORP. |
CONSOLIDATED BALANCE SHEETS |
(Expressed in thousands of United States dollars) |
|
|
|
As at |
|
|
As at |
|
|
|
December 31, |
|
|
December 31, |
|
|
|
2017 |
|
|
2016 |
|
Assets |
|
|
|
|
Current |
|
|
|
|
Cash and
cash equivalents |
|
$ |
147,468 |
|
|
$ |
144,671 |
|
Accounts
receivable, prepaids and other |
|
20,603 |
|
|
10,723 |
|
Value-added and other tax receivables |
|
21,335 |
|
|
16,984 |
|
Inventories |
|
206,445 |
|
|
104,691 |
|
|
|
395,851 |
|
|
277,069 |
|
Long-term
investments |
|
9,744 |
|
|
10,028 |
|
Value-added tax
receivables |
|
22,318 |
|
|
18,024 |
|
Mining
interests |
|
|
|
|
- Owned
by subsidiaries |
|
2,124,133 |
|
|
1,950,356 |
|
-
Investments in joint ventures |
|
65,830 |
|
|
53,724 |
|
Other
assets |
|
39,848 |
|
|
26,934 |
|
Deferred income
taxes |
|
27,433 |
|
|
— |
|
|
|
$ |
2,685,157 |
|
|
$ |
2,336,135 |
|
Liabilities |
|
|
|
|
Current |
|
|
|
|
Accounts
payable and accrued liabilities |
|
$ |
95,092 |
|
|
$ |
78,037 |
|
Current
income and other taxes payable |
|
26,448 |
|
|
16,865 |
|
Current
portion of derivative instruments at fair value |
|
4,952 |
|
|
3,466 |
|
Current
portion of long-term debt |
|
302,630 |
|
|
13,935 |
|
Current
portion of prepaid sales |
|
60,000 |
|
|
57,450 |
|
Current
portion of mine restoration provisions |
|
1,819 |
|
|
— |
|
Other
current liabilities |
|
3,603 |
|
|
6,288 |
|
|
|
494,544 |
|
|
176,041 |
|
Derivative
instruments at fair value |
|
— |
|
|
6,439 |
|
Long-term
debt |
|
399,551 |
|
|
472,845 |
|
Prepaid
sales |
|
30,000 |
|
|
62,550 |
|
Mine
restoration provisions |
|
96,627 |
|
|
81,162 |
|
Deferred income
taxes |
|
81,518 |
|
|
74,072 |
|
Employee
benefits obligation |
|
14,708 |
|
|
7,860 |
|
Other long-term
liabilities |
|
1,816 |
|
|
602 |
|
|
|
1,118,764 |
|
|
881,571 |
|
Equity |
|
|
|
|
Shareholders’
equity |
|
|
|
|
Share
capital |
|
|
|
|
Issued:
980,932,908 common shares (Dec 31, 2016 – 964,892,433) |
|
2,197,267 |
|
|
2,151,993 |
|
Contributed surplus |
|
60,039 |
|
|
56,191 |
|
Accumulated other comprehensive loss |
|
(94,294 |
) |
|
(95,435 |
) |
Deficit |
|
(610,908 |
) |
|
(667,760 |
) |
|
|
1,552,104 |
|
|
1,444,989 |
|
Non-controlling
interests |
|
14,289 |
|
|
9,575 |
|
|
|
1,566,393 |
|
|
1,454,564 |
|
|
|
$ |
2,685,157 |
|
|
$ |
2,336,135 |
|