Otjikoto 2017 production guidance up on that of stellar year

24th February 2017


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Canadian midtier gold producer B2Gold expects its Otjikoto gold mine, in Namibia, to produce between 165 000 oz and 175 000 oz of gold this year, compared with 166 285 oz produced in 2016, a record year for the mine, when its production guidance range was 160 000 oz to 170 000 oz.

In achieving its annual gold production record in 2016, the mine exceeded the midpoint of its guidance range, as well as beating its 2015 output by 14% (or 20 562 oz) including 18 815 oz of precommercial production.

The mine’s 2016 production benefited from higher throughput, owing to the successful completion of its mill expansion project in September 2015, which increased plant capacity from 2.5-million tonnes a year to three-million tonnes a year, and as a result of overall process optimisations, says B2Gold.

In the fourth quarter of 2016, the mine produced a quarterly record of 46 846 oz of gold, slightly above budget and 19% (or 7 472 oz) higher than the fourth quarter of 2015.

Otjikoto’s cash operating costs for 2017 are expected to be between $510/oz and $550/oz, higher than that of 2016, at $368/oz.

This increase is mainly owing to higher projected strip ratios at the new Otjikoto Phase 2 and Wolfshag Phase 1 pits, while fuel prices are also expected to be higher than that of 2016.

The average strip ratios at Otjikoto are, however, expected to decrease in 2018 and 2019.

All-in sustaining costs are expected to be between $855/oz and $885/oz in 2017, reflecting higher expected cash operating costs per ounce and capital expenditures for this year.

The mine is projected to process 3.3-million tonnes of ore in 2017, with an average grade of 1.59 g/t and a recovery rate of 98%.

“Mill feed is expected to consist of high-grade ore from the Otjikoto Phase 2 pit (35%) and the Wolfshag Phase 1 pit (25%).

High- and medium-grade stockpile ore is expected to account for the remainder of the mill feed (40%), as the Otjikoto Phase 2 pit is developed,” explains B2Gold.

Life-of-mine production plans for the Otjikoto mine, incorporating preliminary projections for the Wolfshag openpit and underground mines, have been completed for various options and will be further refined as the detailed geotechnical, hydrogeological and design studies are completed in this year.

Sustaining capital costs at the mine for 2017 are estimated to be $37.1-million, including $15-million for capitalised prestripping costs, $10.4-million for mine fleet additions and $6-million for major equipment rebuilds.

The company expects $10-million of the Otjikoto mine fleet expansion purchases to be lease financed.

To advance stripping at both the Otjikoto and Wolfshag pits, the mining fleet will be expanded to include a 250 t excavator along with added service trucks and support equipment. Ongoing studies are leading B2Gold to re-evaluate the openpit and underground interface.

Nonsustaining capital costs are budgeted to be $12.7-million, including $8.5-million for the first phase of construction of a solar power plant, which is expected to reduce fuel consumption and serve as protection against rising oil prices.

B2Gold’s total exploration budget for Namibia in 2017 is $5.1-million, mainly for 5 000 m of diamond drilling on the Otjikoto licence area, and 12 000 m of diamond drilling and 5 000 m of rotary air blast drilling on the Ondundu joint venture project, in West-Central Namibia.

Drilling at Ondundu in 2016 defined a distinct North-South zone of mineralisation with holes containing up to 3.10 g/t gold over 68.4 m drilled in hole ON-16-092 and 2.58 g/t over 52.1 m (true width about 50% of drilled width) drilled in hole ON-16-96. An additional 5 000 m of diamond and reverse circulation drilling has been committed to new targets in and around the Otjikoto area.

Edited by Tracy Hancock
Creamer Media Contributing Editor



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