Vancouver, British Columbia--(Newsfile Corp. - April 11, 2018) - B2Gold Corp. (TSX: BTO) (NYSE AMERICAN: BTG) (NSX: B2G) ("B2Gold" or the "Company") is pleased to announce its gold production and gold revenue for the first quarter of 2018. All dollar figures are in United States dollars unless otherwise indicated.
First Quarter 2018 Highlights
Record quarterly consolidated gold production of 239,684 ounces, a significant increase of 81% (or 106,948 ounces) over the same period last year, and 7% (or 16,252 ounces) above budget, due to the continued strong performances of the Fekola Mine in Mali, Masbate Mine in the Philippines and the Otjikoto Mine in Namibia
Record quarterly consolidated gold revenue of $344.3 million, a significant increase of 135% (or $198.0 million) over the same period last year
Fekola Mine continued to operate above plan since achieving commercial production on November 30, 2017, producing 114,142 ounces of gold in the quarter, 11% (or 11,228 ounces) above budget
B2Gold is well on target to achieve transformational growth in 2018 and meet its annual guidance of between 910,000 and 950,000 ounces of gold production in 2018 at cash operating costs (see “Non-IFRS Measures”) of between $505 and $550 per ounce and all-in sustaining costs (“AISC”) (see “Non-IFRS Measures”) of between $780 and $830 per ounce
With the large, low-cost Fekola Mine now in production, consolidated gold production in the first quarter of 2018 was a quarterly record of 239,684 ounces, a significant increase of 81% (or 106,948 ounces) over the same period last year, and 7% (or 16,252 ounces) above budget. In its first full quarter of operations (after achieving commercial production on November 30, 2017, within only 60 days from start-up), the new Fekola Mine continued to operate above plan, producing 114,142 ounces of gold in the first quarter of 2018, 11% (or 11,228 ounces) above budget. The Masbate Mine and Otjikoto Mine also had a solid start to the year with both mines exceeding their targeted production levels for the quarter.
B2Gold is well on target to achieve transformational growth in 2018. For full-year 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 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 the Company's largest and lowest-cost producer. The resulting increase in production levels combined with low costs are projected 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 approximately $0.5 billion and a significant increase in free cash flow (operating cash flows less investing cash flows).
Consolidated gold revenue in the first quarter of 2018 was a quarterly record of $344.3 million on record sales of 259,837 ounces at an average price of $1,325 per ounce compared to $146.3 million on sales of 119,937 ounces at an average price of $1,219 per ounce in the first quarter of 2017. This significant increase in revenue of 135% (or $198.0 million) was attributable to the new production from the Fekola Mine, as well as a 9% increase in the average realized gold price and the timing of gold shipments (including 27,450 ounces sold in the quarter which related to Fekola's December 31, 2017, finished gold inventory).
Consolidated gold revenue for the first quarter of 2018 included $15 million relating to the delivery of gold into the Company's Prepaid Sales contracts (accounted for as deferred revenue). During the quarter, 12,908 ounces of gold were delivered under these contracts.
Mine-by-mine gold production in the first quarter of 2018 was as follows:
Mine Q1 2018
Gold Production (ounces) (1) 2018 Annual Production Guidance
Fekola 114,142 400,000 - 410,000
Masbate 53,147 180,000 - 190,000
Otjikoto 39,499 160,000 - 170,000
La Libertad 19,367 115,000 - 120,000
El Limon 13,529 55,000 - 60,000
B2Gold Consolidated 239,684 910,000 - 950,000
(1) B2Gold's Q1 2018 production results and 2018 annual production guidance are presented on a 100% basis
Fekola Gold Mine — Mali
In its first full quarter of operations (after achieving commercial production on November 30, 2017, within only 60 days from start-up), the new Fekola Mine in Mali continued to demonstrate strong, sustained operational performance by running above plan on mill feed grade, throughput and recoveries. This resulted in the Fekola Mine producing 114,142 ounces of gold in the first quarter of 2018, 11% (or 11,228 ounces) above budget. Mill feed grade, throughput and recoveries were 2.84 grams per tonne ("g/t") (compared to budget of 2.76 g/t), 1,316,818 tonnes (compared to budget of 1,249,474 tonnes) and 94.8% (compared to budget of 92.7%), respectively. Throughout the quarter, the operation continued to improve with many construction personnel making the transition to operations, together with training and skills development in all departments. Currently, there are approximately 1,848 employees on site and, of these, approximately 93% are Malian. The Fekola Mine also continued its outstanding safety performance, achieving 694 days without a Lost-Time-Injury by quarter-end.
Fekola's very rapid and successful ramp-up has surpassed the Company's expectations. On September 25, 2017, the Company announced that its in-house construction team 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 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. Gold production from the Fekola Mine in 2017 was 111,450 ounces (including 79,243 ounces of pre-commercial production), more than doubling the upper end of its original 2017 guidance range (of 55,000 ounces) due to its early start-up, high-quality construction and faster than expected ramp-up.
For full-year 2018, the Fekola Mine is forecast to produce between 400,000 and 410,000 ounces of gold at cash operating costs of between $345 and $390 per ounce and AISC between $575 and $625 per ounce.
Positive drill results from the Company's 2017 exploration program at the Fekola area (see news release dated 11/9/2017) indicated that the main Fekola deposit, with additional drilling, could extend significantly to the north. In addition, drilling below the extensive saprolite resource at the Anaconda zones has discovered four, well-mineralized bedrock (sulphide) zones, indicating the potential for large, Fekola-style mineralized zones.
The Company's 2018 exploration budget for Mali is approximately $15.1 million, focusing on the Fekola North Extension zone and sulphide targets below the Anaconda saprolite zones. The Company expects to release the results from a series of additional drill holes from its Mali exploration program before the end of April 2018. In addition, the Company anticipates releasing more drill results for the Fekola North Extension zone and Anaconda zones around mid-year.
Masbate Gold Mine — Philippines
The Masbate Mine in the Philippines continued its strong operational performance into the first quarter of 2018, producing 53,147 ounces of gold, 12% (or 5,854 ounces) above budget and 1% (or 585 ounces) higher compared to the prior-year quarter. The increase was mainly due to higher than expected oxide ore tonnage from Vein 5 of the Colorado Pit which positively impacted processing recoveries and throughput. Oxide ore represented 78% of the processed tonnage for the quarter versus budget of 50%. The Masbate Mine also continued its outstanding safety performance, achieving almost two and a half years (898 days) without a Lost-Time-Injury by quarter-end.
For the quarter, mill throughput was 1,792,579 tonnes (compared to budget of 1,706,064 tonnes and 1,704,001 tonnes in the first quarter of 2017) and gold recoveries averaged 78.5% (compared to budget of 72.1% and 74.8% in the first quarter of 2017). The average grade processed was 1.17 g/t compared to budget of 1.20 g/t and 1.28 g/t in the first quarter of 2017. As expected, grades were higher in the prior-year quarter which was attributable to the high-grade ore from the Main Vein Stage 1 Pit which is no longer in production as scheduled.
For full-year 2018, the Masbate Mine is expected to produce between 180,000 and 190,000 ounces of gold at cash operating costs of between $675 and $720 per ounce and AISC of between $875 and $925 per ounce.
A detailed capital cost estimate of $25.5 million was recently completed by Lycopodium Ltd., 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, which is being conducted by B2Gold's in-house team, primarily consists of adding a third ball mill and upgrading the existing crushing circuit. The ball mill is currently on site, with preliminary works planned to commence in the second quarter of 2018. No addition to the mining fleet is required as the additional feed will come from the lower-grade material that was in the original mine plan but was scheduled to be stockpiled. When the expansion is online (expected in early 2019), it is projected 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 open-pit mine life.
The Company has a successful track record of adding reserves and resources at its operations (and thereby extending mine life) through exploration. The Masbate exploration budget for 2018 is approximately $5.1 million, including 12,000 metres of diamond drilling. The drilling is divided into brownfields drilling to upgrade resources within the mine licence and on regional targets.
Otjikoto Gold Mine — Namibia
The Otjikoto Mine in Namibia also had a strong start to the year (following a record year of gold production in 2017) with first quarter gold production of 39,499 ounces which was above budget by 6% (or 2,174 ounces). Mill throughput, recoveries and processed grade were all slightly above budget, as the mine continues to incrementally optimize its operations. Compared to the prior-year quarter, gold production was lower by 8% (or 3,275 ounces), as planned, due to a negligible amount of Wolfshag ore being mined in 2018 while Phase 2 of the Wolfshag Pit is being developed. Ore production is planned to resume again from the Wolfshag Pit in 2019 which is projected to provide higher grade open-pit mill feed. The Otjikoto mill continued to operate well, processing 827,227 tonnes (Q1 2017 — 832,805 tonnes) in the quarter at an average grade of 1.51 g/t (Q1 2017 — 1.62 g/t) with gold recoveries averaging 98.7% (Q1 2017 — 98.6%).
For full-year 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.
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. Mining at Wolfshag commenced in late 2016 and Wolfshag ore provided a significant component of the Otjikoto mill feed in 2017. Updated Wolfshag mineral reserves and resources were reported in the Company's recent Annual Information Form, dated March 23, 2018, with 372,000 ounces of Probable Mineral Reserves (4.29 million tonnes at an average grade of 2.70 g/t, on a 90% attributable basis) remaining in the Wolfshag open pit, as at December 31, 2017. This updated reserve, based on the larger Wolfshag open-pit design, includes an additional 132,000 ounces of Probable Mineral Reserves (1.42 million tonnes at an average grade of 2.88 g/t, on a 90% attributable basis) within Wolfshag Phase 4. In addition, the Wolfshag mineral resource remains open down-plunge and may be exploitable in the future by underground mining.
The Company's total exploration budget for Namibia in 2018 is $5.1 million. Exploration in 2018 will include 17,000 metres of diamond drilling and 4,000 metres of RAB drilling, split between the Otjikoto Project and the Ondundu joint venture.
La Libertad Gold Mine — Nicaragua
La Libertad Mine in Nicaragua produced 19,367 ounces of gold in the first quarter of 2018, 10% (or 2,128 ounces) below budget and 32% (or 9,172 ounces) lower than the first quarter of 2017. Gold production at La Libertad has been affected by permitting delays for new mining areas. However, mine permits are now in place for all open pit and underground operations with the exception of the Jabali Antenna Pit. The San Diego mining permit was received in February 2018 and the pit is now fully operational. Gold production at La Libertad was slightly above budget for the month of March, as the mill benefitted from increased sources and volume of open-pit ore. 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. The Company expects to begin processing ore from Jabali Antenna Underground in July.
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For more information on B2Gold, please visit the Company website at www.b2gold.com
11 apr. 2018
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