TSX-listed B2Gold exceeded its first-quarter production and sales guidance by 6%, producing 230 859 oz and selling 232 076 oz of gold.
The Fekola, Masbate, Otjikoto and El Limon mines all exceeded their targeted production, with the Mali-based Fekola and the Philippines-based Masbate mines, having produced 6% and 15% above guidance, respectively.
The consolidated gold revenue of $302-million generated for the sale of 232 076 oz of gold at an average price of $1 300/oz was lower than the $344-million in revenue generated from the sale of 259 837 oz at an average price of $1 325/oz in the first quarter of 2018.
B2Gold explained that the year-on-year dip in first-quarter revenue related mainly to the timing of gold shipments, as last year’s first quarter benefitted from the additional sale of about 20 000 oz generated from the net drawdown of gold inventories that built up in late 2017.
Given the quarter’s gold production outperformance at Fekola and Masbate, B2Gold anticipates full-year consolidated gold production in the range of 935 000 oz to 975 000 oz, with cash operating costs forecast to be between $520/oz and $560/oz and all-in sustaining costs (AISC) forecast at between $835/oz and $875/oz.
Production will be weighted toward the second half of the year, with several openpit operations expected to start producing from the third quarter onwards.
“If a gold price assumption of $1 300/oz is used, B2Gold expects to generate cash flows from operations of around $410-million for the full year.”
The mine produced 110 349 oz based on the performance of its processing facilities.
Mill throughput was 1.73-million tonnes – up 31% year-on-year and exceeding budget by 25%.
Overall mill throughput increased as a result of a combination of factors, including favourable metallurgy and “excellent recoveries” using a coarser than planned grind. Low-grade ore feed during the quarter was softer than anticipated and overall feed size to the plant was finer than budgeted.
Additionally, fine-tuning of the plant circuit played a role in the positive plant performance.
Given the plant's ability to process higher-than-anticipated throughput, B2Gold decided to add lower-grade material from the stockpiles to the plant feed, resulting in higher gold production at a lower average grade, with marginally higher cash operating costs per ounce for the quarter.
Last month, B2Gold announced “very positive” results from the preliminary economic assessment (PEA) of a possible expansion. The PEA set out significant estimated increases in average gold production to over 550 000 oz/y between 2020 and 2024.
B2Gold will issue an updated expansion technical report by May 10.
The mine produced 57 481 oz – an 8% year-on-year increase.
Gold production was significantly above guidance owing to both higher-than-expected head grade and recovery, with ore grade, oxide ore tonnage and total ore tonnage mined all better than modelled.
The expansion project to upgrade the processing plant to eight-million tonnes a year was completed early this year.
As a result, the mine’s output is projected to average around 200 000 oz/y during the mining phase and above 100 000 oz/y when the low-grade stockpiles are processed.
The Namibian mine produced 32 712 oz – exceeding guidance by 4%.
B2Gold attributed the increase to higher-than-anticipated mining tonnage from the Otjikoto pit and higher processed grade.
The higher-grade zone of the Otjikoto pit is forecast to be processed in the third quarter and high-grade ore production from Phase 2 of the Wolfshag pit is scheduled to begin late this year.
The La Libertad mine, in Nicaragua, was the only mine that did not exceed its first-quarter guidance, producing 14% less than anticipated, at 18 086 oz.
B2Gold said production was affected by lower-than-planned grade from the San Diego pit, which was partially offset by higher-than-planned ore tonnage and grade from the San Juan pit.
Production from the new Jabali Antenna pit is expected to start in the second half of 2019, subject to the successful completion of B2Gold’s resettlement activities and receipt of the Jabali Antenna openpit permit.
B2Gold’s other Nicaraguan mine, El Limon, produced 12 231 oz of gold, as ore production from the new Limon Central pit came on line during the quarter.
B2Gold said the development of the Limon Central pit remains the focus of El Limon’s surface operations.
The Santa Pancha underground mine should continue to operate normally, while development of the Veta Nueva underground mine remains on schedule.
B2Gold will continue to maximise cash flows and maintain a strong financial position by reducing overall debt levels, pursuing internal growth through further exploration, as well as the development and expansion of existing projects.
In the second quarter, B2Gold expects to complete an updated PEA for its 49%-owned Gramalote project, in Colombia.
If positive, the company will consider – with its joint venture partner AngloGold Ashanti – whether to proceed to a final feasibility study.