B2Gold confident of meeting full-year output guidance at lower cash operating cost

On the back of a strong operational and financial performance for the first nine months of this year, international gold producer B2Gold expects to meet its production guidance of one-million to 1.08-million ounces for the full 2023 financial year.

It notes that cash operating costs for the year are expected to be slightly below the original guidance of between $670/oz and $730/oz, while all-in sustaining costs (AISC) are likely to be at the low end of guidance of between $1 195/oz and $1 255/oz.

B2Gold, which is headquartered in Vancouver, Canada, produced 242 838 oz of gold in the third quarter ended September 30, with the Masbate mine, in the Philippines, and the Otjikoto mine, in Namibia, having exceeded expected production.

That was offset, however, by lower-than-expected production from the Fekola mine, in Mali, owing to a slightly lower grade and lower mill feed grade as a result of ore production delays out of Phase 6 of the Fekola pit.

Mining of the higher-grade ore in Fekola Phase 6 resumed in October and fourth-quarter production at Fekola is expected to be significantly higher than in the third quarter.

B2Gold’s production for the nine months to September 30 reached 772 395 oz, compared with the 660 004 oz produced in the first nine months of 2022.

The company sold 787 805 oz of gold for the nine months to September 30, including 241 558 oz sold in the third quarter.

Total cash operating costs per gold ounce sold for the quarter were $706/oz, compared with $824/oz in the third quarter of 2022, while AISC per gold ounce sold were $1 272/oz, compared with $1 169/oz in the third quarter of 2022.

The gold producer posted an attributable net loss a share of $0.03, mainly as a result of a $112-million noncash impairment on the Gramalote project, in Colombia, as a result of acquiring AngloGold Ashanti’s 50% interest in the project.

The company, nevertheless, maintained a robust financial position, with cash and cash equivalents of $310-million and working capital of $383-million as at September 30.

Meanwhile, B2Gold has appointed Kelvin Dushnisky as chairperson.

He joined the B2Gold board as director in June.

Dushnisky served as CEO of AngloGold from 2018 to 2020 and, prior to that, had a 16-year career with Barrick Gold Corporation, where he served as president from 2015 to 2018.

GROWTH PROJECTS
The company reiterates that it will continue to strive to maximise profitable production from its existing mines, while advancing its pipeline of development and exploration projects and evaluating new exploration, development and production opportunities.

Its exploration budget for 2023 is $84-million, with a significant proportion allocated to growth exploration.

As part of its growth plans, B2Gold in April acquired Sabina Gold & Silver Corp, which holds the Back River gold district in Nunavut, Canada. The most advanced project in the Back River gold district is the fully permitted and under construction Goose project.

The project has an estimated two-year construction period, which is expected to be completed in the first quarter of 2025.

B2Gold in June announced an initial capital expenditure (capex) of C$800-million for the Goose project, but has since updated the construction budget to accelerate underground mining development to increase gold production over the first five years of the mine plan. That has added about C$90-million to the expected capex.

Sabina had already incurred about C$340-million in capex up to April, leaving about C$550-million to be invested by B2Gold.

B2Gold says the project remains on track.

In Mali, the preliminary results of an optimisation study for the Fekola Complex indicated that there was an opportunity to either extend the processing life of the Fekola mill or to increase gold production through the construction of a new oxide processing plant.

B2Gold is progressing an engineering study, to be released in the first quarter of 2024, that will outline the two development options to process gold from Fekola Regional.

In addition, Fekola Complex optimisation work continues to maximise project value from all the various oxide and sulphide material sources including the Fekola Pit, Fekola Underground, the Cardinal Pit and the Bantako North, Menankoto, Bakolobi and Dandoko permits.

Extending the oxide and sulphide processing life of the Fekola mill or construction of a new oxide processing plant is subject to delineation of additional mineral resources and development, completion of feasibility studies and the receipt of all necessary regulatory approvals and permits, the gold producer states.

At Gramalote, B2Gold has started work on smaller-scale project development plans with the goal of identifying a higher-return project than the previous development plan compiled by AngloGold and B2Gold.

Based on the results of a 2022 feasibility study, the contemplated larger-scale project did not meet the combined investment return thresholds for development by both B2Gold and AngloGold.

B2Gold plans to undertake a detailed review of the project, including the facility size and location, power supply, mining and processing options, tailings design, resettlement, potential construction sequencing and camp design to identify potential cost savings to develop a smaller-scale project.

B2Gold says the results of the review will allow it to determine the optimal parameters and assumptions for a formal study, to start in the fourth quarter of this year, with the goal of completing an initial assessment by the second quarter of 2024.