Vancouver, July 23, 2015 – B2Gold Corp. (TSX: BTO, NYSE MKT: BTG, NSX: B2G) (“B2Gold” or the “Company”) is pleased to announce its gold production and revenue for the second quarter and firsthalf of 2015. All dollar figures are in United States dollars unless otherwise indicated.
2015 Second Quarter Highlights
Record quarterly consolidated gold production of 121,566 ounces, 42% greater than in the same period in 2014
Gold revenue of $136.5 million on sales of 114,423 ounces at an average price of $1,193 per ounce
Otjikoto mill expansion from 2.5 million tonnes per year to 3.0 million tonnes per year remains on schedule, expected to increase gold production even further starting in September 2015
Company is on track to meet its 2015 annual guidance of 500,000 to 540,000 ounces of gold production at cash operating costs between $630 to $660 per ounce and all-in sustaining costs between $950 and $1,025 per ounce
New $350 million corporate revolving credit facility finalized
Robust results from the new optimized feasibility study for the Fekola Project in Mali announced on June 11, 2015
2015 First-Half Highlights
Record half-year consolidated gold production of 237,425 ounces (including 18,815 ounces of precommercial
production from Otjikoto), an increase of 30% over the same period in 2014
Consolidated gold revenue of $275.4 million (or record half-year consolidated gold revenue of $298.5 million including $23.1 million of pre-commercial sales from Otjikoto)
Record half-year gold sales of 229,222 ounces (or 247,688 ounces including 18,466 ounces of precommercial sales from Otjikoto)
Successful transition from construction to commercial production at the new Otjikoto Mine
Gold Production
Consolidated gold production in the second quarter of 2015 was another quarterly record of 121,566 ounces, representing an increase of 42% over the same period last year and 3,437 ounces above budget.
The increased gold production was primarily attributable to the successful production start and strong ramp-up in production at the new Otjikoto Mine, as well as increased production from both the Masbate
and Limon mines. On February 28, 2015, the new Otjikoto Mine in Namibia achieved commercial production, one month ahead of schedule, after a strong start-up following its first gold pour on December 11, 2014. For accounting purposes, gold revenue earned and related production costs from the sale of pre- commercial production were credited to Otjikoto’s mineral property development costs prior to
commercial production.
Consolidated gold production for the half-year was a record 237,425 ounces (including 18,815 ounces of pre-commercial production from Otjikoto), an increase of 30% over the same period in 2014 and 4,191 ounces greater than budget. As previously reported, 2015 consolidated gold production is anticipated to be weighted to the second-half of the year, due to a number of factors including the continued ramp-up of
gold production at Otjikoto. The Company is on track to meet its 2015 annual production guidance.
B2Gold is projecting another record year for gold production in 2015. Company-wide production in 2015 from the newly constructed Otjikoto Mine, and the Masbate, La Libertad and Limon Mines is expected to be in the range of 500,000 to 540,000 ounces of gold (including pre-commercial production from Otjikoto), an increase of approximately 35% over 2014 production. Consolidated cash operating costs are expected to be between $630 to $660 per ounce, compared to $680 per ounce in 2014, and all-in sustaining costs are expected to be between $950 to $1,025 per ounce. The substantial increase in the Company’s consolidated gold production and reduction in consolidated cash operating costs per ounce reflect the positive impact of new production from the Company’s low-cost Otjikoto Mine. For the second-half of 2015, consolidated gold production is expected to be in the range of 275,000 to 295,000
ounces.
Gold Revenue
Consolidated gold revenue in the second quarter of 2015 was $136.5 million on sales of 114,423 ounces at an average price of $1,193 per ounce compared to $120.3 million on sales of 93,330 ounces at an average price of $1,289 per ounce in the second quarter of 2014. The 14% increase in gold revenue was mainly attributable to an approximately 22% increase in gold sales volume, partially offset by an approximately 8% decline in the average realized gold price.
Consolidated gold revenue for the half-year was $275.4 million (or a half-year record of $298.5 million including $23.1 million of pre-commercial sales from Otjikoto) on record half-year sales of 229,222 ounces (or 247,688 ounces including 18,466 ounces of pre-commercial sales from Otjikoto) at an average price of $1,201 per ounce compared to $249.3 million on sales of 192,325 ounces at an average price of $1,296 per ounce in the first-half of 2014.
Operations
Mine-by-mine gold production in the second quarter and first-half of 2015 was as follows:
Mine Q2 2015 Production (ounces) First-Half 2015 Production (ounces) 2015 Guidance (ounces)
Masbate 41,236 87,477 170,000 – 180,000
Otjikoto 36,963 68,097 140,000 – 150,000
La Libertad 27,681 53,007 135,000 – 145,000
Limon 15,686 28,844 55,000 – 65,000
B2Gold Consolidated 121,566 237,425 500,000 – 540,000
Otjikoto Mine, Namibia
In the second quarter of 2015, the first full quarter of commercial production, Otjikoto produced 36,963
ounces of gold compared to its budget of 35,106 ounces and 31,134 ounces (including 18,815 ounces of
pre-commercial production) in the first quarter of 2015. Higher than budgeted gold production was
mainly the result of better than expected mill throughput (711,462 tonnes processed versus 624,112
tonnes budgeted) and mill recoveries (98.7% versus 95.6% budgeted). During the quarter, the average
daily mill throughput was approximately 7,900 tonnes of ore per day exceeding the design capacity of
approximately 6,800 tonnes of ore per day. The average gold grade processed was 1.63 grams per tonne
("g/t") compared to budget of 1.83 g/t. The processed gold grade continues to increase towards budget as
the mine optimizes mining grade control to reduce ore loss and dilution and continues to fine-tune the
new on-site assay lab. This improvement is expected to continue as the mine gets below the complex
upper oxide portion of the orebody and reaches primary ore. A new resource model incorporating 2014
drilling, grade control data, and in pit mapping is expected in August.
During the first-half of 2015, Otjikoto produced 68,097 ounces of gold (including 18,815 ounces of precommercial
production) compared to budget of 64,201 ounces.
Expansion of the Otjikoto mill from 2.5 million tonnes per year to 3.0 million tonnes per year continues
on schedule and is expected to be completed by the end of September 2015. The planned two additional
leach tanks have now been erected and installation of the mechanical equipment has begun. Arrival of the
pebble crusher and other mechanical equipment is expected during July with the installation thereof to
commence immediately.
For the full-year 2015, the Otjikoto Mine is expected to produce between 140,000 to 150,000 ounces of
gold (including pre-commercial production) at a cash operating cost in the $500 to $525 per ounce range.
All ore in 2015 will come from the existing Otjikoto Pit. Once the planned mill expansion is completed in
the third quarter of 2015, the Company expects that annual gold production from the main Otjikoto Pit
will increase significantly to approximately 200,000 ounces in 2016 and 2017. Otjikoto’s gold production
is also expected to be enhanced by the development of its Wolfshag zone, adjacent to the main Otjikoto
Pit.
Masbate Gold Mine - Philippines
The Masbate Mine also continued to perform well, producing 41,236 ounces of gold in the second quarter
of 2015, approximately 8% above budget and 12% higher compared to the second quarter of 2014. Gold
production exceeded budget mainly due to better than expected mill throughput (1,768,928 tonnes
compared to budget of 1,641,150 tonnes) and mill recoveries (75.8% compared to budget of 72.6%). The
favourable variance for gold recoveries was mainly due to more oxide ore from the Colorado Pit being
processed. Gold production in the prior-year quarter had been impacted by the change-out of the old
Masbate SAG mill with a new SAG mill during the month of June 2014.
Year-to-date gold production at Masbate was 87,477 ounces, 2% above budget and 10% higher than in
the first-half of 2014.
For the full-year 2015, the Masbate Mine is projected to produce approximately 170,000 to 180,000
ounces of gold at a cash operating cost of approximately $740 to $775 per ounce.
La Libertad Gold Mine - Nicaragua
In the second quarter of 2015, La Libertad Mine produced 27,681 ounces of gold compared to budget of
29,085 ounces. Gold production in the quarter was affected by short-term operating delays at the new
higher grade Los Angeles and Jabali Antenna Pits. As a result, head grades were lower than anticipated (1.6 g/t compared to budget of 1.73 g/t). Production at the new Los Angeles Pit commenced in June 2015,
one month later than anticipated. The Jabali Antenna Pit is now anticipated to enter the production stream
sometime later in 2015, upon completion of permitting and resettlement activities. As expected, gold
production in the second quarter of 2015 was lower compared to 37,681 ounces produced in the second
quarter of 2014, as the prior-year quarter had benefited from higher grade ore being processed from the
Crimea and Santa Maria Pits which are no longer active. Gold production in 2015 from La Libertad is
expected to be weighted to the second-half of the year, as the higher grade ore from the new Los Angeles
and Jabali Antenna Pits is mined and processed. The plant continues to operate well processing 573,807
tonnes (Q2 2014 – 549,270 tonnes) in the quarter with gold recoveries averaging 94.5% (Q2 2014 –
94.7%).
For the first-half of the year, La Libertad produced 53,007 ounces of gold (2014 – 76,277 ounces),
slightly below budget of 53,903 ounces.
For the full-year 2015, gold production at La Libertad is now projected to be near the low end of its fullyear
guidance range of approximately 135,000 to 145,000 ounces of gold at a cash operating cost of
approximately $605 to $635 per ounce.
El Limon Gold Mine - Nicaragua
The Limon Mine produced 15,686 ounces of gold in the second quarter of 2015, slightly above budget
and 41% higher than in the same quarter last year. Gold production in the prior-year quarter had been
affected by installation delays for a dewatering system at Santa Pancha 1 which impeded access to higher
grade zones. The installation was successfully completed in early November 2014 and access to the
higher grade stopes at Santa Pancha 1 commenced in December 2014. The process plant performed well
in the second quarter of 2015 with mill throughput of 125,079 tonnes (Q2 2014 – 121,119 tonnes) and
mill recoveries averaging 94.4% (Q2 2014 – 91.4%). The mill performance reflects ongoing
improvements in downstream tank circuitry and cyclone improvements. The average gold grade
processed was 4.13 g/t (Q2 2014 – 3.11 g/t).
For the first-half of 2015, the Limon Mine produced 28,844 ounces of gold compared to 26,253 ounces in
the first six months of 2014 and to budget of 29,580 ounces.
For the full-year 2015, the Limon Mine is projected to produce approximately 55,000 to 65,000 ounces of
gold at a cash operating cost of approximately $680 to $710 per ounce.
Development
Fekola Development Project - Mali
On June 11, 2015, the Company announced the results of an optimized Feasibility Study for the Fekola
Project in Mali which indicated robust economics. Highlights of the optimized Feasibility Study include:
• An open pit gold mine with an initial production life of mine (“LOM”) of 12.5 years based on the
probable mineral reserves;
• Average annual gold production for years one through seven of 350,000 ounces per year at a
$418 operating cash cost per ounce;
• Average annual LOM gold production of 276,000 ounces per year at an operating cash cost of
$552 per ounce;
• New open pit probable mineral reserves of 49.2 million tonnes at a grade of 2.35 g/t gold
containing 3.72 million ounces of gold at a stripping ratio of 4.5:1;
• Average LOM gold recovery of 92.8% resulting in a total of 3.45 million ounces produced over the 12.5 year LOM;
• Estimated pre-production capital cost of $395 million plus $67 million of equipment financing.
This does not include approximately $30 million of early works, on schedule to be completed by
the end of June 2015;
• At an indicated gold price of $1,300 and $1,200 per ounce, cumulative LOM pre-tax net cashflow
of $1.66 billion and $1.34 billion, respectively; and,
• At an indicated gold price of $1,300 and $1,200 per ounce, a net present value pre-tax of $1.01
billion and $0.8 billion, respectively, at a 5% discount rate generating a pre-tax internal rate of
return of 35% and 30%, respectively.
For additional details regarding the Feasibility Study, please refer to the Company’s press release dated
June 11, 2015 or the technical report in respect of the Feasibility Study expected to be filed on or about
July 24, 2015, each of which may be found under B2Gold’s corporate profile on SEDAR at
www.sedar.com.
Initial construction activities at Fekola began in February 2015 led by core team members of the Otjikoto
construction team. Early works included the assessment of construction equipment needs, purchasing and
mobilization of required equipment and materials, hiring of local contractors and mobilization of key
personnel. Early works construction included:
• improving the existing access road between Kenieba and the site (complete);
• construction of a new site access road (materially complete);
• construction of an on-site airstrip designed to allow personnel to fly directly in and out of the site
(30% complete); and
• commencement of construction of the camp pad and commencement of excavations within the
mill footprint.
All critical tasks have been completed to allow the Company to continue with the development of the
project through the 2015 rainy season which runs from late June to September. Additionally, a permanent
camp has been ordered and is scheduled to arrive in Mali in October 2015. The construction schedule in
the optimized Feasibility Study plans for gold production to commence at the end of the fourth quarter of
2017.
With the commencement of production at Otjikoto and the robust Fekola Project on the horizon, the
Company is on track to continue its strong production growth and low-cost gold production base. Based
on current assumptions, B2Gold expects consolidated gold production to grow from 380,000 ounces in
2014 to well over 900,000 ounces in 2018. With Otjikoto’s low cash operating costs per ounce and
Fekola’s projected low cash operating costs of $418 per ounce in its first seven years of production, the
Company’s consolidated cash operating costs are expected to continue to significantly decrease.
Qualified Persons for Feasibility Study
Tom Garagan, B2Gold
Peter Montano, B2Gold
Sandy Hunter, Lycopodium
Bill Lytle, B2Gold
David Morgan, Knight Piesold
Second Quarter 2015 Financial Results - Conference Call Details
B2Gold Corp. will release its second quarter results before the North American markets open on Friday
August 14, 2015. |
