Dual-listed B2Gold on Thursday said it remains well positioned for a continued strong operational and financial performance, with consolidated gold production for the 2020 financial year expected to be between 955 000 oz and just over one-million ounces.

If the company's 34% share of attributable ounces projected to be produced at Calibre Mining's El Limon and La Libertad mines, in Nicaragua, is included, the company's total gold production is expected to be between one-million and 1.06-million ounces.

Output is likely to be marginally weighted towards the second half of the year.   

B2Gold on Thursday reported consolidated gold production of 234 416 oz, including 6 010 oz from discontinued operations, for the fourth quarter ended December 31.

Fourth-quarter consolidated gold revenues from continuing operations were $314-million, with 211 800 oz sold.

Full-year consolidated gold production amounted to 969 495 oz. The Fekola, Masbate and Otjikoto mines, in Mali, the Philippines and Namibia, respectively, all exceeded the upper end of their 2019 production guidance ranges.

In December 2019, the Fekola mine exceeded one-million ounces of gold production since ore processing began in September 2017, achieving this milestone a full year ahead of the original production schedule.

The Fekola mine expansion project, which is scheduled to be completed by the end of the third quarter of this year, is expected to increase processing throughput by 1.5-million tonnes a year to 7.5-million tonnes a year from an assumed base rate of six-million tonnes a year.

A new large-scale off-grid Fekola solar plant project is scheduled for completion in August and is expected to provide significant operating cost reductions.

B2Gold also plans to complete a final feasibility study for the joint venture (JV) Gramalote gold project, in Colombia by December 31, this year.

Following a very successful year for exploration in 2019, B2Gold is planning another year of aggressive exploration, with a budget of about $51-million.

Based on current assumptions, including a gold price of $1 500/oz, the company expects to generate cash flows from operating activities of about $700-million this year and to repay the remaining outstanding balance of its revolving credit facility of $200-million during the year.

Further, with higher gold production forecast for 2020, continued cost controls and the sale of the company's higher-cost Nicaraguan mines completed, the company's consolidated cash operating costs per ounce and all-in sustaining costs per ounce are both projected to further decrease this year.

The company's consolidated cash operating costs are expected to decrease significantly in 2020 to between $415/oz and $455/oz, which is about 19% lower than the company's 2019 guidance range of between $520/oz and $560/oz.

PROJECT UPDATE
B2Gold’s low-cost Fekola mine is forecast to produce between 590 000 oz and 620 000 oz of gold this year, a significant increase of 33% over 2019.

Gold production is forecast to be marginally weighted to the second half of the year and to be relatively consistent throughout the year, even though the expansion of the Fekola processing plant is not scheduled to be completed until the end of the third quarter.

“The consistent production throughout the year is mainly owing to the expansion of the Fekola mining fleet and optimisation of the mining sequence early in the year, which will provide access to higher-grade portions of the deposit earlier on in the sequence,” the company explained.

It added that, when the mill expansion comes into service, lower-grade ore is expected to be processed, rather than being stockpiled, during the second half of the year.

In 2020, the Masbate mine is expected to produce between 200 000 oz and 210 000 oz of gold. Gold production is scheduled to be weighted towards the second half of the year, as mined grade from the new Montana pit is expected to be higher in the second half of the year.

Masbate's cash operating costs are forecast to be between $665/oz and $705/oz, about 6% higher than its 2019 guidance of between $625/oz and $665/oz.

In 2020, Masbate is budgeted to process a total of 8.2-million tonnes of ore at an average grade of 1.01 g/t and process gold recovery of 76.3%.

The Otjikoto mine is forecast to produce between 165 000 oz and 175 000 oz of gold from the Otjikoto and Wolfshag pits.

Gold production is scheduled to be consistent throughout the year, as high-grade ore from the Wolfshag pit is blended with medium-grade ore from the Otjikoto pit. The mine’s cash operating costs are forecast to be between $480/oz and $520/oz, a reduction of about 7% compared with the 2019 guidance of between $520/oz and $560/oz.

In December 2019, the B2Gold board of directors approved the development of the Wolfshag Underground mine, which will bring forward production of high-grade ore from the Wolfshag orebody and reduce production costs.

The mine development will also provide access for down-plunge and parallel exploration and has been designed to support future expansions. Project spending is currently estimated to total $57-million, of which $18-million is budgeted to be incurred this year, from completion of an internal study to produce stope ore.

Portal development is expected to begin in the third quarter of this year, with initial stope ore production expected in the first quarter of 2022.

Regarding the 2020 Gramalote JV budget, based on an amended and restated shareholders agreement with AngloGold Ashanti on January 1, B2Gold became the operator of the JV for the Gramalote project.

Under the terms of the agreement, B2Gold will sole fund the first $13.9-million of expenditures on the Gramalote project, following which B2Gold will hold a 50% ownership interest in the JV.

It currently has a 48.3% interest.

The JV partners will continue to have equal representation on the management committee and, following the expenditure of the sole fund amount, each JV partner will fund its share of expenditures pro rata.

B2Gold plans to announce the results of a preliminary economic assessment for the Gramalote project later this month, and intends to complete a final feasibility study by December 31, this year.

EXPLORATION GUIDANCE
Following a very successful year for exploration in 2019, B2Gold is planning another year of aggressive exploration, with a budget of about $33-million. This excludes the drilling at Gramalote.

Exploration will again focus predominantly on West Africa, as well as the other operating mine sites in Namibia and the Philippines.

B2Gold has also allocated an additional $18-million for its grassroots exploration programmes, taking the total exploration budget to $51-million for this year.

In 2020, about $18-million is budgeted to be spent on exploration in Mali, where the company plans to focus on expanding the main Fekola deposit to the north and test several near-mine potential openpit targets, such as Fekola South, Cardinal, FNZ and Kingfisher structures, with an allocation of about 20 000 m of drilling.

Drilling is restarting in Mali in January.

B2Gold has also budgeted about 41 000 m of diamond and reverse circulation (RC) drilling on several zones in the Anaconda area, located about 20 km from Fekola.

Exploration will focus on increasing the known saprolite resources at the Adder and Mamba zones and further testing the underlying sulphide mineralisation at the Mamba zone.

The Masbate exploration budget for 2020 is about $8-million, including about 25 000 m of diamond and RC drilling.

The 2020 exploration programme will focus on drill testing the most prospective inferred mineral resources below existing design pits to determine if existing openpits can be expanded.

Several grassroot greenfield targets that have seen variable exploration and drilling will be further tested with mapping, trenching and drilling.

Meanwhile, the total exploration budget for Namibia this year is $4-million, where exploration will include 19 500 m of diamond drilling and 3 300 m of rotary air blast drilling split between the Otjikoto project and the Ondundu JV, located about 200 km southwest of Otjikoto.

The majority of the diamond drilling will be allocated towards testing the Wolfshag zone and near the Wolfshag openpit and underground targets.