B2Gold Reports Strong Q2 2021 Results with Continued Strong Total Gold Production of 211,612 oz, 5% Above Budget; On Track to Meet or Exceed the Upper End of its Annual Production Guidance Range of 970,000 to 1,030,000 oz
News Release B2Gold Reports Strong Q2 2021 Results with Continued Strong Total Gold Production of 211,612 oz, 5% Above Budget;
On Track to Meet or Exceed the Upper End of its Annual Production Guidance Range of 970,000 to 1,030,000 oz
Vancouver, BC, August 4, 2021 – B2Gold Corp. (TSX: BTO, NYSE AMERICAN: BTG, NSX: B2G) (“B2Gold” or the “Company”) is pleased to announce its operational and financial results for the second quarter and first half of 2021. The Company previously released its gold production and gold revenue results for the second quarter and first half of 2021. All dollar figures are in United States dollars unless otherwise indicated.
2021 Second Quarter Highlights
- Total gold production of 211,612 ounces (including 14,232 ounces of attributable production from Calibre Mining Corp. (“Calibre”), well above budget by 5% (10,269 ounces), and consolidated gold production of 197,380 ounces from the Company’s three operating mines, well above budget by 5% (9,787 ounces)
- Consolidated gold revenue of $363 million on sales of 200,071 ounces at an average price of $1,814 per ounce
- Fekola’s mill throughput `was a quarterly record of 2.29 million tonnes, 16% above budget and 47% higher than the second quarter of 2020, following the successful completion of the Fekola mill expansion in September 2020
- Total cash operating costs (see “Non-IFRS Measures”) (including estimated attributable results for Calibre) of $664 per ounce produced and consolidated cash operating costs from the Company’s three operating mines of $649 per ounce produced, both approximately in-line with budget
- Total all-in sustaining costs (“AISC”) (see “Non-IFRS Measures”) (including estimated attributable results for Calibre) of $1,016 per ounce sold and consolidated AISC from the Company’s three operating mines of $1,011 per ounce sold, both below budget by 3%
- Net income attributable to the shareholders of the Company of $68 million ($0.07 per share); adjusted net income (see “Non-IFRS Measures”) attributable to the shareholders of the Company of $52 million ($0.05 per share)
- B2Gold maintains a strong financial position and liquidity with cash and cash equivalents of $382 million as at June 30, 2021, and its $600 million Revolving Credit Facility remains fully undrawn and available
2021 First Half Highlights
- Total gold production of 432,256 ounces (including 29,233 ounces of attributable production from Calibre), well above budget by 7% (28,811 ounces), and consolidated gold production of 403,023 ounces from the Company’s three operating mines, well above budget by 7% (27,078 ounces)
- Consolidated gold revenue of $725 million on sales of 402,401 ounces at an average price of $1,802 per ounce
- Total cash operating costs (including estimated attributable results for Calibre) of $636 per ounce produced and consolidated cash operating costs from the Company’s three operating mines of $615 per ounce produced, both below budget by 4%
- Total AISC (including estimated attributable results for Calibre) of $974 per ounce sold, below budget by 8%, and consolidated AISC from the Company’s three operating mines of $965 per ounce sold, below budget by 9%
- Net income attributable to the shareholders of the Company of $160 million ($0.15 per share); adjusted net income attributable to the shareholders of the Company of $149 million ($0.14 per share)
- Construction of the Fekola solar plant now complete and 100% online; Fekola’s solar production to date indicates that the plant will exceed initial power production estimates
- Selected as the recipient of five mining industry awards in the Philippines and Mali
- For full-year 2021, B2Gold remains well positioned for continued strong operational and financial performance and is on track to meet or exceed the upper end of its total gold production forecast of between 970,000 - 1,030,000 ounces (including 50,000 – 60,000 attributable ounces projected from Calibre) with forecast total cash operating costs of between $500 - $540 per ounce and total AISC of between $870 - $910 per ounce
- Based on current assumptions, including a gold price of $1,800 per ounce, the Company expects to generate cashflows from operating activities of approximately $630 million for the full-year 2021 (approximately $500 million of cashflows from operating activities are expected to be generated in the second half of 2021)
Second Quarter and First Half of 2021 Operational Results
Total gold production in the second quarter of 2021 was 211,612 ounces (including 14,232 ounces of attributable production from Calibre), well above budget by 5% (10,269 ounces), and consolidated gold production of 197,380 ounces from the Company’s three operating mines, well above budget by 5% (9,787 ounces).
The Fekola Mine in Mali continued its strong operational performance through the second quarter of 2021, producing 113,611 ounces of gold, 3% (3,611 ounces) above budget, as the Fekola processing facilities continued to outperform following the successful completion of the Fekola mill expansion in September 2020. In the second quarter of 2021, Fekola’s mill throughput was a quarterly record of 2.29 million tonnes, 16% above budget and 47% higher than the second quarter of 2020. The Masbate Mine in the Philippines also continued its strong operational performance with second quarter of 2021 gold production of 56,878 ounces, well above budget by 8% (4,390 ounces), as processed grade (8% above budget) and recoveries (10% above budget) both exceeded budget which more than offset lower than budgeted throughput (8% below budget). The Otjikoto Mine in Namibia performed well during the second quarter of 2021, producing 26,891 ounces of gold, well above budget by 7% (1,786 ounces), mainly due to higher than budgeted processed grade (5% above budget) as the grade of ore sourced from the medium grade stockpile was slightly higher than anticipated during the second quarter. As expected, compared to the second quarter of 2020, total gold production was lower by 12% (29,981 ounces) due to planned significant waste stripping campaigns at both the Fekola and Otjikoto mines, which were largely completed in the first half of 2021 (for Phase 5 and Phase 6 of the Fekola Pit, and Phase 3 of the Wolfshag and Otjikoto pits). Gold production is expected to significantly increase in the second half of 2021, when mining at Fekola reaches the highergrade zones of the Fekola Pit and mining at Otjikoto reaches the higher-grade zone at the base of the Wolfshag Pit.
For the second quarter of 2021, total cash operating costs (including estimated attributable results for Calibre) were $664 per ounce produced ($675 per ounce sold) and consolidated cash operating costs from the Company’s three operating mines were $649 per ounce produced ($661 per ounce sold). Consolidated cash operating costs were approximately in-line with budget in the second quarter of 2021, as above budgeted gold production largely offset higher than budgeted realized fuel prices and processing costs. As expected, consolidated cash operating costs were higher in the second quarter of 2021 compared to $385 per ounce produced ($377 per ounce sold) in the second quarter of 2020, mainly due to the planned lower gold production and higher period stripping activities (described above). Total AISC (including estimated attributable results for Calibre) for the second quarter of 2021 were $1,016 per ounce sold (Q2 2020 - $712 per ounce sold) and consolidated AISC from the Company’s three operating mines were $1,011 per ounce sold (Q2 2020 - $714 per ounce sold). Consolidated AISC were $32 per ounce sold (3%) below budget in the second quarter of 2021, reflecting higher than budgeted gold ounces sold, higher than budgeted gains on settled fuel derivatives and lower than budgeted sustaining capital expenditures partially offset by higher than budgeted royalties resulting from a higher average gold price realized than budgeted. The lower sustaining capital expenditures were mainly a result of timing of expenditures and are expected to be incurred later in 2021.
For the first half of 2021, total gold production was 432,256 ounces (including 29,233 ounces of attributable production from Calibre), well above budget by 7% (28,811 ounces), and 15% (74,199 ounces) lower than the first half of 2020 (for the same reasons outlined above). Consolidated gold production from the Company’s three operating mines was 403,023 ounces in the first half of 2021.
For the first half of 2021, total cash operating costs (including estimated attributable results for Calibre) were $636 per ounce produced ($628 per ounce sold) (first half of 2020 - $390 per ounce produced and $394 per ounce sold) and consolidated cash operating costs from the Company’s three operating mines were $615 per ounce produced ($606 per ounce sold) (first half of 2020 - $376 per ounce produced and $380 per ounce sold). Consolidated cash operating costs were $25 per ounce produced (4%) below budget in the first half of 2021, mainly attributable to higher than budgeted gold production. Total AISC (including estimated attributable results for Calibre) for the first half of 2021 were $974 per ounce sold (first half of 2020 - $717 per ounce sold) and consolidated AISC from the Company’s three operating mines were $965 per ounce sold (first half of 2020 - $705 per ounce sold). Consolidated AISC were $95 per ounce sold (9%) below budget in the first half of 2021, reflecting higher than budgeted gold ounces sold, higher than budgeted gains on settled fuel derivatives and lower than budgeted sustaining capital expenditures partially offset by higher than budgeted royalties resulting from a higher average gold price realized than budgeted.
The lower sustaining capital expenditures were mainly a result of timing of expenditures and are expected to be incurred later in 2021.
For full-year 2021, the Company remains on track to meet or exceed the upper end of its total gold production forecast range of between 970,000 - 1,030,000 ounces (including 50,000 - 60,000 attributable ounces projected from Calibre) with total consolidated cash operating costs forecast to be between $500 - $540 per ounce and total consolidated AISC forecast to be between $870 - $910 per ounce. The Company’s 2021 production guidance does not currently include the potential upside to increase Fekola’s gold production in 2021 from the nearby Cardinal inferred resource area, where production is now expected to commence in the third quarter of 2021 and the higher than budgeted processing capacity realized to date at the expanded Fekola mill.
For full-year 2021, as budgeted, the Company’s consolidated gold production from its three operating mines is expected to be significantly weighted to the second half of 2021 due to the planned higher waste stripping campaigns at both the Fekola and Otjikoto mines which were largely completed in the first half of 2021. For the second half of 2021, consolidated gold production is expected to significantly increase over the first half of 2021 to between 555,000 – 585,000 ounces when mining reaches the higher grade portion of Phase 5 of the Fekola Pit and Phase 3 of the Wolfshag Pit. Based mainly on the weighting of production and timing of stripping, consolidated cash operating costs are expected to significantly improve to between $380 - $420 per ounce and consolidated AISC to between $745 - $785 per ounce during the second half of 2021.
Second Quarter and First Half of 2021 Financial Results
For the second quarter of 2021, consolidated gold revenue was $363 million on sales of 200,071 ounces at an average price of $1,814 per ounce, compared to $442 million on sales of 257,100 ounces at an average price of $1,719 per ounce in the second quarter of 2020. The decrease in gold revenue of 18% ($79 million) was 22% attributable to the decrease in gold ounces sold (mainly due to the lower gold production and timing of gold shipments), partially offset by a 4% impact from the increase in the average realized gold price.
As expected, cash flow used by operating activities was $8 million in the second quarter of 2021 compared to cash flow generated of $238 million in the second quarter of 2020. The decrease was in-line with budget and was mainly due to lower revenues of $80 million, higher production costs of $35 million and higher working capital outflows in the second quarter of 2021 for value-added and other tax receivables and current income and other taxes payables. Current income tax payments in the second quarter of 2021 included approximately $140 million related to 2020 outstanding tax liability obligations (comprised mainly of Fekola outstanding 2020 tax liabilities of $75 million and Fekola 2020 priority dividend obligations of $46 million). Based on current assumptions, including a gold price of $1,800 per ounce for 2021, the Company is forecasting to make total cash income tax payments in 2021 of approximately $380 million (including the $140 million related to 2020 outstanding tax liability obligations discussed above).
Net income for the second quarter of 2021 was $74 million compared to $138 million for the second quarter of 2020. Net income attributable to the shareholders of the Company was $68 million ($0.07 per share)
compared to $124 million ($0.12 per share) for the second quarter of 2020. Adjusted net income attributable to the shareholders of the Company (see “Non-IFRS Measures”) was $52 million ($0.05 per share) compared to adjusted net income of $112 million ($0.11 per share) for the second quarter of 2020.
For the first half of 2021, consolidated gold revenue was $725 million on sales of 402,401 ounces at an average price of $1,802 per ounce compared to $822 million on sales of 496,600 ounces at an average price of $1,656 per ounce in the first half of 2020. The decrease in gold revenue of 12% ($97 million) was 19% attributable to the decrease in gold ounces sold (mainly due to the lower gold production and timing of gold shipments), partially offset by a 7% impact from the increase in the average realized gold price.
Cash flow provided by operating activities was $138 million in the first half of 2021 compared to $454 million in the first half of 2020. The decrease was mainly due to lower revenues of $97 million, higher production costs of $55 million and higher working capital outflows in the first half of 2021 for valueadded and other tax receivables and current income and other taxes payables (including current income tax payments in the first half of 2021 of approximately $140 million relating to 2020 outstanding tax liability obligations).
For the first half of 2021, net income was $173 million compared to $221 million for the first half of 2020. Net income attributable to the shareholders of the Company was $160 million ($0.15 per share) compared to $197 million ($0.19 per share) for the first half of 2020. Adjusted net income attributable to the shareholders of the Company was $149 million ($0.14 per share) compared to adjusted net income of $207 million ($0.20 per share) for the first half of 2020.
Liquidity and Capital Resources
B2Gold continues to maintain a strong financial position and liquidity. At June 30, 2021, the Company had cash and cash equivalents of $382 million (December 31, 2020 - $480 million) and working capital of $558 million (December 31, 2020 - $465 million). In addition, the Company’s $600 million Revolving Credit Facility remains fully undrawn and available.
Due to the Company's strong net positive cash position, strong operating results and the current higher gold price environment, B2Gold’s quarterly dividend rate is expected to be maintained at $0.04 per common share (or an annualized rate of $0.16 per common share), one of the highest dividend yields in the gold sector.
In 2021, the Company expects to generate cashflows from operating activities of approximately $630 million, based on current assumptions including an average gold price of $1,800 per ounce. Approximately $500 million of this total is expected to be generated in the second half of 2021, when the Company starts mining from the higher-grade areas of the Fekola Pit and mining at Otjikoto reaches the higher-grade zone at the base of the Wolfshag Pit.
Operations
Mine-by-mine gold production in the second quarter and first half of 2021 (including the Company’s estimated 33% share of Calibre’s production) was as follows:
| Mine | Q2 2021 Gold Production (ounces) | First-Half 2021 Gold Production (ounces) | First-Half | Second-Half | Full-year | |||
|---|---|---|---|---|---|---|---|---|
| 2021 | 2021 | 2021 | ||||||
| Guidance | Guidance | Guidance | ||||||
| Gold | Gold | Gold | ||||||
| Production | Production | Production | ||||||
| (ounces) | (ounces) | (ounces) | ||||||
| Fekola | 113,611 | 238,699 | 220,000 - 230,000 | 310,000 - 330,000 | 530,000 - 560,000 | |||
| Masbate | 56,878 | 114,391 | 100,000 - 105,000 | 100,000 - 105,000 | 200,000 - 210,000 | |||
| Otjikoto | 26,891 | 49,933 | 45,000 - 50,000 | 145,000 - 150,000 | 190,000 - 200,000 | |||
| B2Gold Consolidated (1) | 197,380 | 403,023 | 365,000 - 385,000 | 555,000 - 585,000 | 920,000 - 970,000 | |||
| Equity interest in Calibre (2) | 14,232 | 29,233 | 25,000 - 30,000 | 25,000 - 30,000 | 50,000 - 60,000 | |||
| Total | 211,612 | 432,256 | 390,000 - 415,000 | 580,000 - 615,000 | 970,000 - 1,030,000 |
(1) “B2Gold Consolidated” - gold production is presented on a 100% basis, as B2Gold fully consolidates the results of its Fekola, Masbate and Otjikoto mines in its consolidated financial statements (even though it does not own 100% of these operations).
(2) “Equity interest in Calibre” - represents the Company’s approximate 33% indirect share of the operations of Calibre’s El Limon and La Libertad mines. B2Gold applies the equity method of accounting for its 33% ownership interest in Calibre.
Mine-by-mine cash operating costs per ounce (on a per ounce of gold produced basis) in the second quarter and first half of 2021 were as follows (presented on a 100% basis):
| Mine | Q2 2021 Cash Operating Costs ($ per ounce produced) | First-Half 2021 Cash Operating Costs ($ per ounce produced) | First-Half | Second-Half | Full-year | |||
|---|---|---|---|---|---|---|---|---|
| 2021 | 2021 | 2021 | ||||||
| Guidance | Guidance | Guidance | ||||||
| Cash | Cash | Cash | ||||||
| Operating | Operating | Operating | ||||||
| Costs | Costs | Costs | ||||||
| ($ per ounce | ($ per ounce | ($ per ounce | ||||||
| produced) | produced) | produced) | ||||||
| Fekola | $617 | $557 | $530 - $570 | $315 - $355 | $405 - $445 | |||
| Masbate | $616 | $612 | $670 - $710 | $630 - $670 | $650 - $690 | |||
| Otjikoto | $854 | $893 | $940 - $980 | $330 - $370 | $480 - $520 | |||
| B2Gold Consolidated | $649 | $615 | $620 - $660 | $380 - $420 | $480 - $520 | |||
| Equity interest in Calibre (1) | $864 | $929 | $920 - $1,020 | $920 - $1,020 | $920 - $1,020 | |||
| Total | $664 | $636 | $640 - $680 | $400 - $440 | $500 - $540 |
(1) Calibre’s 2021 forecast cash operating costs are assumed to be consistent throughout the second half of 2021.
Mine-by-mine cash operating costs per ounce (on a per ounce of gold sold basis) in the second quarter and first half of 2021 were as follows (presented on a 100% basis):
| Mine | Q2 2021 Cash Operating Costs ($ per ounce sold) | First-Half 2021 Cash Operating Costs ($ per ounce sold) | First-Half | Second-Half | Full-year | |||
|---|---|---|---|---|---|---|---|---|
| 2021 | 2021 | 2021 | ||||||
| Guidance | Guidance | Guidance | ||||||
| Cash | Cash | Cash | ||||||
| Operating | Operating | Operating | ||||||
| Costs | Costs | Costs | ||||||
| ($ per ounce | ($ per ounce | ($ per ounce | ||||||
| sold) | sold) | sold) | ||||||
| Fekola | $606 | $541 | $530 - $570 | $315 - $355 | $405 - $445 | |||
| Masbate | $673 | $627 | $670 - $710 | $630 - $670 | $650 - $690 | |||
| Otjikoto | $885 | $853 | $940 - $980 | $330 - $370 | $480 - $520 | |||
| B2Gold Consolidated | $661 | $606 | $620 - $660 | $380 - $420 | $480 - $520 | |||
| Equity interest in Calibre (1) | $861 | $923 | $920 - $1,020 | $920 - $1,020 | $920 - $1,020 | |||
| Total | $675 | $628 | $640 - $680 | $400 - $440 | $500 - $540 |
(1) Calibre’s 2021 forecast cash operating costs are assumed to be consistent throughout the second half of 2021.
Mine-by-mine AISC (on a per ounce of gold sold basis) in the second quarter and first half of 2021 were as follows (presented on a 100% basis):
| Mine | Q2 2021 AISC ($ per ounce sold) | First-Half 2021 AISC ($ per ounce sold) | First-Half | Second-Half | Full-year | |||
|---|---|---|---|---|---|---|---|---|
| 2021 | 2021 | 2021 | ||||||
| Guidance | Guidance | Guidance | ||||||
| AISC | AISC | AISC | ||||||
| ($ per ounce | ($ per ounce | ($ per ounce | ||||||
| sold) | sold) | sold) | ||||||
| Fekola | $854 | $811 | $850 - $890 | $670 - $710 | $745 - $785 | |||
| Masbate | $899 | $860 | $980 - $1,020 | $940 - $980 | $955 - $995 | |||
| Otjikoto | $1,613 | $1,542 | $1,600 - $1,640 | $580 - $620 | $830 - $870 | |||
| B2Gold Consolidated | $1,011 | $965 | $1,040 - $1,080 | $745 - $785 | $860 - $900 | |||
| Equity interest in Calibre (1) | $1,082 | $1,090 | $1,040 - $1,140 | $1,040 - $1,140 | $1,040 - $1,140 | |||
| Total | $1,016 | $974 | $1,040 - $1,080 | $760 - $800 | $870 - $910 |
(1) Calibre’s 2021 forecast AISC are assumed to be consistent throughout the second half of 2021.
Fekola Gold Mine - Mali
The Fekola Mine in Mali continued its strong operational performance through the second quarter of 2021, producing 113,611 ounces of gold, 3% (3,611 ounces) above budget, as the Fekola processing facilities continued to outperform following the successful completion of the Fekola mill expansion in September 2020. In the second quarter of 2021, Fekola’s mill throughput was a quarterly record of 2.29 million tonnes, 16% above budget and 47% higher than the second quarter of 2020. The higher than budgeted mill throughput was due to favourable ore fragmentation and hardness, as well as optimization of the grinding circuit, partially offset by mill feed grade which was 10% below budget in the second quarter of 2021, as Fekola’s low-grade stockpiles were used to provide additional unbudgeted mill feed required as a result of the higher than budgeted processed tonnes. As expected, compared to the second quarter of 2020, gold production was lower by 23% (33,813 ounces) as a result of the higher waste stripping and lower mined ore grades in the second quarter of 2021, as Phases 5 and 6 of the Fekola Pit were developed during the first half of 2021.
For the second quarter of 2021, mill feed grade was 1.65 grams per tonne (“g/t”) compared to budget of 1.84 g/t and 3.11 g/t in the second quarter of 2020; mill throughput was 2.29 million tonnes compared to budget of 1.98 million tonnes and 1.56 million tonnes in the second quarter of 2020; and gold recovery averaged 93.2% compared to budget of 94.0% and 94.8% in the second quarter of 2020. Mined ore tonnage and grade continue to reconcile well with the Fekola resource model, and ore production is expected to significantly increase in the second half of 2021 when mining reaches the higher-grade zones of the Fekola Pit.
The Fekola mill has the potential to sustain an annualized throughput rate which is higher than the original assumed mill expansion throughput rate of 7.5 million tonnes per annum (“Mtpa”). Mill processing trials conducted in the fourth quarter of 2020 demonstrated the potential to optimize the grind-throughput capacity of the expanded facility and increase hard-rock throughput and support the addition of saprolite ore tonnage in excess of the hard-rock capacity. Based on the positive results noted to date through to the second quarter of 2021, Fekola's annualized throughput rate is now expected to average 8.3 Mtpa for 2021 and average approximately 8.5 Mtpa (over the long-term), based on an ore blend including fresh rock and saprolite. For 2021 budgeting purposes, the Company assumed a throughput rate of 7.75 Mtpa.
Production planning for the nearby Cardinal inferred resource area, located within 500 metres of the current Fekola resource pit, is currently underway (the initial Inferred Mineral Resource estimate for Cardinal is 640,000 ounces of gold in 13.0 million tonnes of ore at 1.54 g/t gold). Grade control drilling at Cardinal was completed in the second quarter of 2021, and a 10,000-tonne bulk sample was mined and processed. Results indicate that the Cardinal material can be processed at Fekola. An Environmental and Social Impact Assessment has been completed and submitted to the Malian authorities. The Company is in the process of updating the Fekola Mine Plan to include production from Cardinal which is expected to commence in the third quarter of 2021.
For the second quarter of 2021, Fekola’s cash operating costs were $617 per ounce produced ($606 per ounce sold), above budget by $73 per ounce produced (13%), due to higher than budgeted processing costs (related to the unbudgeted mill throughput of low-grade stockpile material) and fuel prices, and increased operational waste (due to lower than budgeted strip ratios). In addition, camp and medical costs were also higher than budget as the Company continues to manage COVID-19 related risks and maintain safe operations. As expected, Fekola’s cash operating costs were higher in the second quarter of 2021 compared to $300 per ounce produced ($271 per ounce sold) in the second quarter of 2020, mainly due to the planned lower gold production and higher period stripping activities (as discussed above). Fekola’s AISC for the second quarter of 2021 were $854 per ounce sold (Q2 2020 - $562 per ounce sold), in-line with budget, as higher than budgeted realized gains on fuel derivatives, lower than budgeted sustaining capital expenditures (mainly due to lower than budgeted pre-stripping costs) and higher than budgeted gold ounces sold offset higher than budgeted cash operating costs as discussed above.
For the first half of 2021, the Fekola Mine produced 238,699 ounces of gold, well above budget by 5% (11,699 ounces), and 23% (72,736 ounces) lower than the first half of 2020 (for the reasons outlined above).
For the first half of 2021, Fekola’s cash operating costs were $557 per ounce produced ($541 per gold ounce sold), in-line with budget and higher than $274 per ounce produced ($278 per ounce sold) in the first half of 2020 (for the reasons outlined above). Fekola’s AISC for the first half of 2021 were $811 per ounce sold (first half of 2020 - $542 per ounce sold), well below budget by $61 per ounce sold (7%), as a result of higher than budgeted gold ounces sold, higher than budgeted realized gains on fuel derivatives, lower than budgeted sustaining capital expenditures (mainly due to lower than budgeted pre-stripping costs and mobile equipment rebuilds) and lower than budgeted community relations costs, partially offset by higher than budgeted royalties. The lower than budgeted sustaining capital expenditures are mainly a result of timing of expenditures and are expected to be incurred later in 2021.
Capital expenditures in the second quarter of 2021 totaled $9 million, primarily consisting of $2 million for the solar plant, $2 million for pre-stripping, $1 million for mine infrastructure and $1 million for the development of Cardinal. Capital expenditures in the first half of 2021 totaled $26 million, primarily consisting of $8 million for the solar plant, $7 million for pre-stripping, $4 million for mine infrastructure and $2 million for the development of Cardinal.
For full-year 2021, the Fekola Mine remains on track to meet or exceed the upper end of its forecast production range of between 530,000 - 560,000 ounces of gold at cash operating costs of between $405 - $445 per ounce and AISC of between $745 - $785 per ounce. Additional mining from the Cardinal inferred resource area and the higher than budgeted processing capacity experienced to date at the Fekola mill (as discussed above) have the potential to increase Fekola's budgeted 2021 and longer-term gold production. No adjustment to Fekola’s 2021 guidance range has currently been made while the Company continues to evaluate the potential upside impact of these factors for the balance of 2021.
As a result of the planned higher waste stripping completed and lower mined ore grades realized in the first half of 2021 (as Phase 5 and 6 of the Fekola Pit were being developed), production is expected to be significantly weighted to the second half of 2021 (when mining reaches the higher grade portion of Phase 5 of the Fekola Pit). For the second half of 2021, Fekola’s gold production is expected to increase significantly to between 310,000 – 330,000 ounces and cash operating costs are expected to significantly improve to between $315 - $355 per ounce and AISC to between $670 - $710 per ounce (based mainly on the weighting of the planned production and timing of higher waste stripping).
Fekola Solar Plant
Following the temporary suspension of the solar plant construction activities in April 2020 due to COVID- 19 restrictions, and a fire in the solar storage yard in January 2021, construction of the Fekola solar plant is now complete. A small crew will remain on site until mid-August 2021 to ensure that all final commissioning tasks and warranty issues are properly executed. With the solar plant now 100% online, it is expected to reduce Fekola’s HFO consumption by over 13 million litres per year and lower carbon dioxide emissions by an estimated 39,000 tonnes per year. Solar production to date indicates that the plant will exceed initial power production estimates.
Menankoto Permit and Bantako North Permit
The Company, through its Malian subsidiary Menankoto SARL (“Menankoto”), is currently involved in a dispute with the Malian Government related to renewal of the Menankoto exploration permit (the “Menankoto Permit”) which forms part of the Anaconda Area and is located 20 km north of the Fekola Mine licence area. The Company strongly believes that Menankoto is entitled to a one-year renewal of the Menankoto Permit under applicable law. After ongoing discussions with the Malian Government were not ultimately successful in resolving the situation, on June 24, 2021 the Company announced that it had formally commenced arbitration proceedings against the Republic of Mali. The arbitration has been commenced pursuant to the arbitration clause set out in the Menankoto mining convention (the “Convention”) governed by the 2012 Malian Mining Code (“2012 Mining Code”), on the basis that the Republic of Mali breached its obligations under the Convention and under the 2012 Mining Code. Based on the terms of the Convention, the arbitration will be conducted by the International Centre for Settlement of Investment Disputes in Paris, France. In addition to pursuing arbitration under the Convention, the Company may pursue, as required, all other available legal remedies.
Notwithstanding the commencement of arbitration proceedings, the Company is committed to continuing its ongoing discussions with the Malian Government to resolve the issue. Since the Company commenced its investment in Mali, B2Gold has always enjoyed a positive and mutually beneficial relationship with the Government of Mali. Most recently, B2Gold partnered with the Government of Mali to assist the people of Mali facing challenges created by the COVID- 19 pandemic, as well as its impact on the mining sector. B2Gold continues to explore additional ways in which it might help the Government and local communities deal with the impact of the pandemic.
The operations at the Fekola Mine, which is situated on a separate mining license 20 kilometres from the Menankoto Permit and projected to produce 530,000 to 560,000 ounces of gold in 2021, continue normally and have not been impacted by the dispute relating to the Menankoto Permit. In addition, the Fekola Mine has not included the Mineral Resources from the Anaconda area (comprised of the Menankoto Permit and the Bantako North permit) in the current Fekola life of mine plan. The Bantako North permit area (wholly owned and in good standing) contains a significant portion of the Mamba deposit saprolite material and remains open. Preliminary planning by the Company has demonstrated that a pit situated on the Bantako North permit area could provide saprolite material for at least 1.5 to 2 years to feed the Fekola mill commencing in 2022 subject to obtaining all necessary permits and completion of a final mine plan. This additional feed to the Fekola mill would benefit all stakeholders, including the State of Mali, B2Gold’s 20% partner at the Fekola Mine.
The Company has conducted extensive exploration on the Menankoto deposit part of the Anaconda Area over the past seven years, with a considerable investment to date of approximately $27 million. The Company had planned a 2021 exploration budget for the Menankoto deposit of $8.3 million, out of a total Mali exploration budget of $26.4 million. B2Gold is one of the largest Canadian investors in Mali and the Fekola Mine is a flagship investment in the country’s mining sector.
Masbate Gold Mine - the Philippines
The Masbate Mine in the Philippines also continued its strong operational performance with second quarter of 2021 gold production of 56,878 ounces, well above budget by 8% (4,390 ounces), as processed grade (8% above budget) and recoveries (10% above budget) both exceeded budget which more than offset lower than budgeted throughput (8% below budget). Continuing the positive trend set in the first quarter of 2021, Masbate’s mill recoveries continued to outperform the recovery model. To improve Masbate’s gold recovery (and production) forecasts, a series of unbudgeted metallurgical test campaigns were performed in the second quarter of 2021, temporarily reducing Masbate’s throughput for the quarter. Processed grade was above budget, as ore mined from both the Main Vein and Montana pits in the second quarter produced higher tonnage and grade compared to the reserve model. In addition, the metallurgical test campaigns completed also contributed to the higher than budgeted processed grade in the quarter (as one test campaign involved high grade ore from the Main Vein Pit which was originally budgeted to have been blended through the course of the full year). Gold production in the second quarter of 2021 was higher by 17% (8,224 ounces), compared to the second quarter of 2020, mainly due to higher mined ore grades, as a result of mining through higher-grade zones of the Main Vein and Montana pits in the second quarter of 2021.
For the second quarter of 2021, mill feed grade was 1.17 g/t compared to budget of 1.08 g/t and 0.94 g/t in the second quarter of 2020; mill throughput was 1.86 million tonnes compared to budget of 2.02 million tonnes and 1.99 million tonnes in the second quarter of 2020; and gold recovery averaged 81.5% compared to budget of 74.3% and 81.0% in the second quarter of 2020.
For the second quarter of 2021, Masbate’s cash operating costs were $616 per ounce produced ($673 per ounce sold), well below budget by $83 per ounce produced (12%), mainly attributable to higher than budgeted gold production, and comparable with the second quarter of 2020. Masbate’s AISC for the second quarter of 2021 were $899 per ounce sold, well below budget by $89 per ounce sold (9%), reflecting lower than budgeted cash operating costs, higher than budgeted gold ounces sold, higher than budgeted realized gains on fuel derivatives and lower than budgeted sustaining capital expenditures (mainly due to the timing of pre-stripping and mining-related capital expenditures). The lower than budgeted sustaining capital expenditures were mainly a result of timing of expenditures and are expected to be incurred later in 2021. Compared to the second quarter of 2020, Masbate’s AISC were significantly lower by $161 per ounce sold (15%), mainly attributable to higher gold production.
For the first half of 2021, the Masbate Mine produced 114,391 ounces of gold, well above budget by 11% (11,242 ounces), and 22% (20,865 ounces) higher than the first half of 2020 (mainly due to higher mined ore grades and higher recoveries as outlined above).
For the first half of 2021, Masbate’s cash operating costs were $612 per ounce produced ($627 per ounce sold), well below both budget by $82 per ounce produced (12%) and the first half of 2020 by $52 per ounce produced (8%). Masbate’s AISC for the first half of 2021 were $860 per ounce sold, significantly below both budget by $140 per ounce sold (14%) and the first half of 2020 by $121 per ounce sold (12%).
Capital expenditures in the second quarter of 2021 totaled $7 million, primarily consisting of $2 million for mobile equipment acquisition costs and rebuilds, $2 million for tailings storage facility projects and $1 million for pre-stripping. Capital expenditures in the first half of 2021 totaled $13 million, primarily consisting of $4 million for mobile equipment acquisition costs and rebuilds, $4 million for tailings storage facility projects and $2 million for pre-stripping.
For full-year 2021, the Masbate Mine remains on track to produce between 200,000 - 210,000 ounces of gold at cash operating costs of between $650 - $690 per ounce and AISC of between $955 - $995 per ounce. Masbate’s gold production is scheduled to be relatively consistent throughout each of the remaining quarters of 2021.
Otjikoto Gold Mine - Namibia
The Otjikoto Mine in Namibia performed well during the second quarter of 2021, producing 26,891 ounces of gold, well above budget by 7% (1,786 ounces), mainly due to higher than budgeted processed grade (5% above budget) as the grade of ore sourced from the medium grade stockpile was slightly higher than anticipated during the second quarter. As expected, compared to the second quarter of 2020, gold