B2Gold Reports Q2 2024 Results and Updated 2024 Guidance
News Release B2Gold Reports Q2 2024 Results and Updated 2024 Guidance
Vancouver, BC, August 8, 2024 – B2Gold Corp. (TSX: BTO, NYSE AMERICAN: BTG, NSX: B2G) (“B2Gold” or the “Company”) announces its operational and financial results for the second quarter of 2024. All dollar figures are in United States dollars unless otherwise indicated.
2024 Second Quarter Highlights
| Total gold production of 212,508 ounces: Total gold | production in the second quarter of 2024 was |
| 212,508 ounces, including 8,267 ounces of attributable production from Calibre Mining Corp. | |
| (“Calibre”). Production at the Fekola Mine in the second quarter of 2024 was below expectations | |
| as a result of damage to an excavator and the delay in receiving replacement equipment which | |
| impacted equipment availability for the second quarter of 2024, reducing tonnes mined. These | |
| equipment availability issues are being addressed and mining rates are expected to improve by the | |
| end of the third quarter of 2024. |
•
| • Total consolidated cash operating costs of | $839 | per gold ounce produced, at the low end of | |||
| the annual guidance range: Total consolidated cash operating costs (see “Non-IFRS Measures”) | |||||
| (including estimated attributable results for Calibre) of | $839 | per gold ounce produced during the | |||
| second quarter of 2024 with consolidated cash operating costs from the Company’s three operating | |||||
| mines of $808 per gold ounce produced. |
| • Total consolidated all-in sustaining costs of $1,267 per gold ounce sold, below the annual | ||
| guidance range: Total consolidated all-in sustaining costs (see “Non-IFRS Measures”) (including | ||
| estimated attributable | results for Calibre) of $1,267 per gold ounce sold for the second quarter of |
2024 with consolidated all-in sustaining costs from the Company’s three operating mines of $1,244 per gold ounce sold.
- Total gold production for 2024 now expected to be between 800,000 and 870,000 ounces (including 20,000 ounces of attributable production from Calibre): Total gold production for 2024 is expected to be impacted by the delay in mining higher-grade ore from Phase 7 of the Fekola pit due to equipment availability issues, resulting in an expected decrease of approximately 50,000 ounces in Fekola production for full year 2024. Mining and processing of these ounces is now expected in the first half of 2025. Lower anticipated Fekola production is partially offset by
increased gold production guidance at Masbate and Otjikoto, by 10,000 ounces combined. In addition, following the sale of a portion of the Company's equity interest in Calibre in June 2024, the Company will stop reporting its share of attributable Calibre production going forward. In 2024, B2Gold now expects total gold production to be between 800,000 and 870,000 ounces (including 20,000 ounces of attributable production from Calibre). The previous 2024 total gold production range of between 860,000 and 940,000 ounces included 40,000 to 50,000 ounces of attributable production from Calibre.
- Total consolidated all-in sustaining costs (including attributable results for Calibre) for 2024 now expected to be between $1,420 and $1,480 per ounce: Total consolidated all-in sustaining costs (including attributable results for Calibre) for 2024 are now forecast to be between $1,420 and $1,480 per ounce (original guidance range of between $1,360 and $1,420 per ounce).
- Attributable net loss of $0.02 per share; adjusted attributable net income of $0.06 per share: Net loss attributable to the shareholders of the Company in the second quarter of 2024 of $24 million ($0.02 per share), primarily the result of a non-cash impairment of the Fekola Complex; adjusted net income (see “Non-IFRS Measures”) attributable to the shareholders of the Company of $78 million ($0.06 per share).
| • Operating cash flow before working capital adjustments of $192 million: Cash flow provided | |
| by operating activities before working capital adjustments was $192 million in the second quarter | |
| of 2024. |
| • Strong financial position and liquidity: At June 30, 2024, the Company had cash and cash | |
| equivalents of $467 million and working capital (defined as current assets less assets classified as | |
| held for sale and current liabilities) of $600 million. |
| • Q3 2024 dividend of $0.04 per share declared: On August 8, 2024, B2Gold's Board of Directors | |
| declared a cash dividend for the third quarter of 2024 of $0.04 per common share (or an expected | |
| $0.16 per share on an annualized basis), payable on September 23, 2024, to shareholders of record | |
| as of September 10, 2024. |
- All planned construction for the first half of 2024 necessary to produce gold at the Goose
Project by the end of Q2 2025 now complete and project development remains on schedule: B2Gold successfully completed the 2024 Winter Ice Road (“WIR”) campaign in the second quarter of 2024 and has delivered all necessary items from the Marine Laydown Area (“MLA”) to complete the construction of the Goose Project in the second quarter of 2025. The key construction items completed in the second quarter included the construction of three additional fuel storage tanks at the MLA to increase fuel storage capacity to more than 80 million liters of fuel, which are anticipated to begin to receive fuel in August 2024; the construction of three additional fuel storage tanks at the Goose Project site to increase fuel storage capacity to more than 80 million liters of fuel, of which two of the three tanks have been completed with the third tank expected to be completed in the third quarter of 2024; and the purchase of materials necessary to complete construction and the staging of those materials for shipment to the MLA during the 2024 sealift.
- Positive Preliminary Economic Assessment (“PEA”) results for the Gramalote Project; feasibility work has commenced: On June 18, 2024, the Company released the results of a positive PEA on its 100% owned Gramalote Project located in the Department of Antioquia, Colombia. Highlights of the PEA include a significant production profile with average annual gold production of 185,000 ounces over a 12.5 year project life and strong project economics with an after-tax net present value discounted at 5% (“NPV5%”) of $778 million and an after-tax internal rate of return (“IRR”) of 20.6%. B2Gold has commenced feasibility work with the goal of completing a feasibility study by mid-2025.
- Initial Inferred Mineral Resource Estimate announced for the Springbok Zone of the Antelope deposit at the Otjikoto Mine: On June 20, 2024, the Company released an initial Inferred Mineral Resource Estimate for the Springbok Zone, the southernmost shoot of the recently discovered Antelope deposit, located approximately three kilometers (“km”) south of the Otjikoto Phase 5 open pit at the Otjikoto Mine in Namibia. The Company determined that the initial Inferred Mineral Resource Estimate was sufficient to initiate a PEA on development of the deposit by underground mining methods, similar to the Wolfshag deposit. Subject to the receipt of a positive PEA and permit, mining of the Springbok Zone, coupled with the exploration potential of the greater Antelope deposit, could begin to contribute to gold production at Otjikoto in 2026.
- Partnered with Sandbox Royalties Corp. (“Sandbox”) to create Versamet Royalties
Corporation (“Versamet”); B2Gold expected to receive $90 million equity interest in Versamet: On June 5, 2024, B2Gold entered into a purchase and sale agreement to sell a portfolio of 10 precious and base metals royalties to Sandbox, a private returns-focused metals royalty company, for consideration of 153.2 million common shares at a price of C$0.80 per share, representing an equity ownership interest in Versamet of 33.0% valued at approximately $90 million.
Second Quarter 2024 Results
Three months ended Six months ended June 30, June 30, 2024 2023 2024 2023
| Gold revenue ($ in thousands) | 492,569 | 470,854 | 954,013 | 944,410 |
| Net (loss) income ($ in thousands) | (34,777) | 91,850 | 13,704 | 193,754 |
| (Loss) earnings per share – basic(1) ($/ share) | (0.02) | 0.06 | 0.01 | 0.14 |
| (Loss) earnings per share – diluted(1) ($/ share) | (0.02) | 0.06 | 0.01 | 0.14 |
| Cash provided by operating activities ($ thousands) | 62,432 | 194,983 | 773,159 | 398,806 |
| Average realized gold price ($/ ounce) | 2,343 | 1,969 | 2,202 | 1,934 |
| Adjusted net income(1)(2) ($ in thousands) | 78,449 | 85,804 | 159,952 | 191,666 |
| Adjusted earnings per share(1)(2) – basic ($) | 0.06 | 0.07 | 0.12 | 0.16 |
| Consolidated operations results: | ||||
| Gold sold (ounces) | 210,228 | 239,100 | 433,206 | 488,250 |
| Gold produced (ounces) | 204,241 | 245,961 | 418,580 | 496,680 |
| Production costs ($ in thousands) | 151,299 | 152,762 | 308,044 | 280,366 |
| Cash operating costs(2) ($/ gold ounce sold) | 720 | 639 | 711 | 574 |
| Cash operating costs(2) ($/ gold ounce produced) | 808 | 607 | 762 | 591 |
| Total cash costs(2) ($/ gold ounce sold) | 877 | 777 | 857 | 714 |
| All-in sustaining costs(2) ($/ gold ounce sold) | 1,244 | 1,210 | 1,296 | 1,128 |
| Operations results including equity investment in Calibre: | ||||
| Gold sold (ounces) | 218,495 | 255,897 | 452,850 | 521,189 |
| Gold produced (ounces) | 212,508 | 262,701 | 438,224 | 529,557 |
| Production costs ($ in thousands) | 164,520 | 170,577 | 333,170 | 313,946 |
| Cash operating costs(2) ($/ gold ounce sold) | 753 | 667 | 736 | 602 |
| Cash operating costs(2) ($/ gold ounce produced) | 839 | 636 | 785 | 618 |
| Total cash costs(2) ($/ gold ounce sold) | 908 | 800 | 879 | 738 |
| All-in sustaining costs(2) ($/ gold ounce sold) | 1,267 | 1,214 | 1,308 | 1,135 |
(1) Attributable to the shareholders of the Company.
(2) Non-IFRS measure. For a description of how these measures are calculated and a reconciliation of these measures to the most directly comparable measures
specified, defined or determined under IFRS and presented in the Company’s financial statements, refer to “Non-IFRS Measures”.
Liquidity and Capital Resources
B2Gold continues to maintain a strong financial position and liquidity. At June 30, 2024, the Company had cash and cash equivalents of $467 million (December 31, 2023 - $307 million) and working capital (defined as current assets less assets classified as held for sale and current liabilities) of $600 million (December 31, 2023 - $397 million). At June 30, 2024, the full amount of the Company's $700 million revolving credit facility was undrawn and available.
Third Quarter 2024 Dividend
On August 8, 2024, B2Gold’s Board of Directors (the “Board”) declared a cash dividend for the third quarter of 2024 (the “Q3 2024 Dividend”) of $0.04 per common share (or an expected $0.16 per share on an annualized basis), payable on September 23, 2024, to shareholders of record as of September 10, 2024.
In 2023, the Company implemented a Dividend Reinvestment Plan (“DRIP”). For the purposes of the Q3 2024 Dividend, the Company is pleased to announce that a discount of 3% will be applied to calculate the Average Market Price (as defined in the DRIP) of its common shares issued from treasury. However, the Company may, from time to time, in its discretion, change or eliminate any applicable discount, which would be publicly announced, all in accordance with the terms and conditions of the DRIP. Participation in the DRIP is optional. In order to participate in the DRIP in time for the Q3 2024 Dividend, registered shareholders must deliver a properly completed enrollment form to Computershare Trust Company of Canada by no later than 4:00 p.m. (Toronto time) on September 16, 2024. Beneficial shareholders who wish to participate in the DRIP should contact their financial advisor, broker, investment dealer, bank, financial institution, or other intermediary through which they hold common shares well in advance of the above date for instructions on how to enroll in the DRIP.
This dividend is designated as an "eligible dividend" for the purposes of the Income Tax Act (Canada). Dividends paid by B2Gold to shareholders outside Canada (non-resident investors) will be subject to Canadian non-resident withholding taxes.
The declaration and payment of future dividends and the amount of any such dividends will be subject to the determination of the Board, in its sole and absolute discretion, taking into account, among other things, economic conditions, business performance, financial condition, growth plans, expected capital requirements, compliance with B2Gold's constating documents, all applicable laws, including the rules and policies of any applicable stock exchange, as well as any contractual restrictions on such dividends, including any agreements entered into with lenders to the Company, and any other factors that the Board deems appropriate at the relevant time. There can be no assurance that any dividends will be paid at the intended rate or at all in the future.
For more information regarding the DRIP and enrollment in the DRIP, please refer to the Company's website at https://www.b2gold.com/investors/stock_info/.
| This news release does not constitute an offer to sell or the solicitation of an offer to buy securities in any | |
|---|---|
| jurisdiction nor will there be any sale of these securities in any province, state or jurisdiction in which such | |
| offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws | |
| of any such province, state or jurisdiction | . |
The Company has filed a registration statement relating to the DRIP with the U.S. Securities and Exchange Commission that may be obtained under the Company's profile on the U.S. Securities and Exchange Commission's website at http://www.sec.gov/EDGAR or by contacting the Company using the contact information at the end of this news release.
Operations
Fekola Complex - Mali
Three months ended Six months ended June 30, June 30, 2024 2023 2024 2023
| Gold revenue ($ in thousands) | 270,592 | 281,672 | 526,910 | 595,897 |
| Gold sold (ounces) | 115,288 | 142,850 | 239,116 | 307,900 |
| Average realized gold price ($/ ounce) | 2,347 | 1,972 | 2,204 | 1,935 |
| Tonnes of ore milled | 2,520,377 | 2,324,043 | 4,983,240 | 4,595,934 |
| Grade (grams/ tonne) | 1.51 | 2.24 | 1.57 | 2.36 |
| Recovery (%) | 92.8 | 91.8 | 92.7 | 91.9 |
| Gold production (ounces) | 111,583 | 152,427 | 230,724 | 318,291 |
| Production costs ($ in thousands) | 81,481 | 79,245 | 166,586 | 156,906 |
| Cash operating costs(1) ($/ gold ounce sold) | 707 | 555 | 697 | 510 |
| Cash operating costs(1) ($/ gold ounce produced) | 839 | 538 | 766 | 509 |
| Total cash costs(1) ($/ gold ounce sold) | 895 | 721 | 873 | 673 |
| All-in sustaining costs(1) ($/ gold ounce sold) | 1,258 | 1,165 | 1,351 | 1,057 |
| Capital expenditures ($ in thousands) | 53,179 | 74,151 | 133,741 | 127,946 |
| Exploration ($ in thousands) | 838 | — | 2,140 | 1,706 |
(1) Non-IFRS measure. For a description of how these measures are calculated and a reconciliation of these measures to the most directly comparable measures
specified, defined or determined under IFRS and presented in the Company’s financial statements, refer to “Non-IFRS Measures”.
The Fekola Mine in Mali (owned 80% by the Company and 20% by the State of Mali) produced 111,583 ounces of gold in the second quarter of 2024, slightly below expectations due to the delayed timing of mining of high-grade ore as compared to expectations, resulting in less high-grade ore processed during the second quarter of 2024. For the second quarter of 2024, mill feed grade was 1.51 grams per tonne (“g/t”), mill throughput was 2.52 million tonnes, and gold recovery averaged 92.8%. Damage to an excavator and the subsequent need for replacement equipment impacted equipment availability for the second quarter of 2024, reducing tonnes mined. These equipment availability issues are being addressed through the delivery of a new excavator, and mining rates are expected to improve by the end of the third quarter of 2024. The reduction in mining rate capacity experienced in 2024 is anticipated to impact the availability of highergrade ore from Phase 7 of the Fekola pit during the second half of 2024 resulting in an expected decrease of approximately 50,000 ounces in Fekola production for full year 2024. Mining and processing of these ounces is now expected in the first half of 2025. Ore volumes and grades continue to reconcile well with modeled values.
The Fekola Mine’s cash operating costs (see “Non-IFRS Measures”) for the second quarter of 2024 were $839 per gold ounce produced ($707 per gold ounce sold). Cash operating costs per gold ounce produced for the second quarter of 2024 were lower than expected as a result of lower fuel costs, higher mill throughput, higher gold recovery and lower mining costs as a result of lower than anticipated mined tonnage due to equipment availability.
ounce sold. All-in sustaining costs were lower than expected as a result of lower than anticipated production costs per gold ounce sold and lower than expected sustaining capital expenditures partially offset by higher gold royalties resulting from a higher than anticipated average realized gold price. The lower sustaining capital expenditures were mainly due to timing of expenditures and are expected to be incurred later in 2024.
Capital expenditures in the second quarter of 2024 totalled $53 million primarily consisting of $13 million for deferred stripping, $9 million for mobile equipment purchases and rebuilds, $9 million for the construction of a new tailings storage facility, $15 million for Fekola underground development, $4 million for solar plant expansion and $2 million for power generation.
As a result of the delay in accessing higher-grade ounces from Phase 7 of the Fekola pit, the Fekola Mine is now expected to produce between 420,000 and 450,000 ounces of gold in 2024 (original guidance of between 470,000 and 500,000 ounces) at cash operating costs of between $870 and $930 per ounce (original guidance of between $835 and $895 per ounce) and all-in sustaining costs of between $1,510 and $1,570 per ounce (original guidance of between $1,420 and $1,480 per ounce).
Fekola Regional Development
The Fekola Complex is comprised of the Fekola Mine (Medinandi permit hosting the Fekola and Cardinal pits and Fekola underground) and Fekola Regional (Anaconda Area (Bantako, Menankoto, and Bakolobi permits) and the Dandoko permit).
The development of Fekola Regional is expected to demonstrate positive economics through the enhancement of the overall production profile and the extension of mine life of the Fekola Complex. Based on B2Gold's preliminary planning, Fekola Regional could provide selective higher-grade saprolite material (average annual grade of up to 2.2 g/t gold) to be trucked approximately 20 km and fed into the Fekola mill at a rate of up to 1.5 million tonnes per annum (“Mtpa”). Trucking of selective higher grade saprolite material from the Anaconda Area to the Fekola mill will increase the ore processed and has the potential to generate approximately 80,000 to 100,000 ounces of additional gold production per year from Fekola Regional sources.
Receipt of a mining permit for the Fekola Regional licenses remains outstanding. The Company expects to apply for such a permit in the third quarter of 2024 following the finalization of the implementation decree for the new 2023 Mining Code by the State of Mali in July 2024. Throughout the first half of 2024, B2Gold has continued to hold meetings with the representatives of the Government of Mali regarding the 2023 Mining Code and the parties are close to finalizing an agreement that will cover the future operation of the Fekola Complex. The Government of Mali has expressed their desire for B2Gold to rapidly progress the development of Fekola Regional and committed to assisting the Company in such development. Importantly, the haul road from Fekola Regional to the Fekola Mine is operational as construction of the haul roads and mining infrastructure (warehouse, workshop, fuel depot and offices) was completed on schedule in 2023.
The known and estimated changes to the financial framework of the Fekola Complex as impacted by the 2023 Mining Code and the ongoing discussions with the State of Mali as to its application are considered to be updated indicators of impairment for the Fekola Complex assets. The Company’s analysis concluded that the Fekola Complex was impaired resulting in a non-cash net impairment charge of $194 million in Q2 2024 and a corresponding reduction in the carrying value of the Fekola Complex assets at the balance sheet date. As of June 30, 2024, the carrying value of the Fekola Complex’s mining interests was $985 million. Significant exploration potential remains across the Fekola Complex to further extend the mine life. It is anticipated that exploration drilling will recommence in Mali in the second half of 2024.
Masbate Mine – The Philippines
Three months ended Six months ended June 30, June 30, 2024 2023 2024 2023
| Gold revenue ($ in thousands) | 109,083 | 111,291 | 208,050 | 168,283 |
| Gold sold (ounces) | 46,600 | 56,700 | 94,300 | 86,350 |
| Average realized gold price ($/ ounce) | 2,341 | 1,963 | 2,206 | 1,949 |
| Tonnes of ore milled | 2,043,057 | 2,000,360 | 4,212,519 | 4,069,402 |
| Grade (grams/ tonne) | 0.94 | 1.03 | 0.96 | 0.99 |
| Recovery (%) | 72.4 | 74.3 | 72.4 | 73.9 |
| Gold production (ounces) | 44,515 | 49,478 | 94,297 | 95,842 |
| Production costs ($ in thousands) | 37,602 | 48,170 | 80,373 | 73,163 |
| Cash operating costs(1) ($/ gold ounce sold) | 807 | 850 | 852 | 847 |
| Cash operating costs(1) ($/ gold ounce produced) | 876 | 817 | 854 | 849 |
| Total cash costs(1) ($/ gold ounce sold) | 955 | 960 | 983 | 971 |
| All-in sustaining costs(1) ($/ gold ounce sold) | 1,135 | 1,091 | 1,177 | 1,169 |
| Capital expenditures ($ in thousands) | 6,507 | 6,098 | 15,037 | 15,051 |
| Exploration ($ in thousands) | 928 | 1,008 | 1,749 | 1,967 |
(1) Non-IFRS measure. For a description of how these measures are calculated and a reconciliation of these measures to the most directly comparable measures
specified, defined or determined under IFRS and presented in the Company’s financial statements, refer to “Non-IFRS Measures”.
The Masbate Mine in the Philippines continued its strong performance with second quarter of 2024 gold production of 44,515 ounces, slightly above expectations. For the second quarter of 2024, mill feed grade was 0.94 g/t, mill throughput was 2.04 million tonnes, and gold recovery averaged 72.4%, lower than expected. Lower gold recovery was a result of mining additional lower recovery high-grade sulphide ore during the second quarter of 2024. Actual gold recovery for the second quarter of 2024 remained in line with modeled recovery values for the ore mined.
The Masbate Mine's cash operating costs (see “Non-IFRS Measures”) for the second quarter of 2024 were $876 per gold ounce produced ($807 per gold ounce sold). Cash operating costs per gold ounce produced for the second quarter of 2024 were lower than expected as a result of higher gold production and lower than anticipated mining and processing costs due to higher productivity and lower diesel and heavy fuel oil costs.
sold. All-in sustaining costs for the second quarter of 2024 were lower than expected as a result of lower than anticipated production costs per gold ounce sold.
Capital expenditures in the second quarter of 2024 totalled $7 million, primarily consisting of $2 million for mobile equipment purchases and rebuilds, $2 million for process plant maintenance, $1 million for expansion of the existing tailings storage facility and $1 million for deferred stripping.
The Masbate Mine is now expected to produce between 175,000 and 195,000 ounces of gold in 2024 (original guidance of between 170,000 and 190,000 ounces) at cash operating costs of between $910 and $970 per ounce (original guidance of between $945 and $1,005 per ounce) and all-in sustaining costs of between $1,260 and $1,320 per ounce (original guidance of between $1,300 and $1,360 per ounce). Gold production is scheduled to be relatively consistent throughout 2024. For 2024, Masbate is expected to process 7.9 million tonnes of ore at an average grade of 0.93 g/t with a process gold recovery of 76.0%. Mill feed will be a blend of mined fresh ore and low-grade ore stockpiles.
Otjikoto Mine - Namibia
Three months ended Six months ended June 30, June 30, 2024 2023 2024 2023
| Gold revenue ($ in thousands) | 112,894 | 77,891 | 219,053 | 180,230 |
| Gold sold (ounces) | 48,340 | 39,550 | 99,790 | 94,000 |
| Average realized gold price ($/ ounce) | 2,335 | 1,969 | 2,195 | 1,917 |
| Tonnes of ore milled | 850,649 | 875,055 | 1,677,126 | 1,699,007 |
| Grade (grams/ tonne) | 1.79 | 1.59 | 1.76 | 1.53 |
| Recovery (%) | 98.6 | 98.7 | 98.5 | 98.7 |
| Gold production (ounces) | 48,143 | 44,056 | 93,559 | 82,547 |
| Production costs ($ in thousands) | 32,216 | 25,347 | 61,085 | 50,297 |
| Cash operating costs(1) ($/ gold ounce sold) | 666 | 641 | 612 | 535 |
| Cash operating costs(1) ($/ gold ounce produced) | 673 | 611 | 658 | 609 |
| Total cash costs(1) ($/ gold ounce sold) | 760 | 720 | 700 | 612 |
| All-in sustaining costs(1) ($/ gold ounce sold) | 1,044 | 1,187 | 1,000 | 1,024 |
| Capital expenditures ($ in thousands) | 11,706 | 15,630 | 25,519 | 32,976 |
| Exploration ($ in thousands) | 1,514 | 996 | 3,303 | 1,490 |
(1) Non-IFRS measure. For a description of how these measures are calculated and a reconciliation of these measures to the most directly comparable measures
specified, defined or determined under IFRS and presented in the Company’s financial statements, refer to “Non-IFRS Measures”.
The Otjikoto Mine in Namibia, in which the Company holds a 90% interest, continued to outperform during the second quarter of 2024, producing 48,143 ounces of gold, above expectations as a result of higher than anticipated mill feed grade. For the second quarter of 2024, mill feed grade was 1.79 g/t, mill throughput was 0.85 million tonnes, and gold recovery averaged 98.6%.
Ore production from the Wolfshag underground mine for the second quarter of 2024 averaged over 1,500 tonnes per day at an average grade of 4.69 g/t gold. As of the beginning of 2024, the Probable Mineral Reserve estimate for the Wolfshag deposit included 100,000 ounces of gold in 0.6 million tonnes of ore at an average grade of 5.02 g/t gold. Open pit mining operations at the Otjikoto Mine will continue to ramp down in 2024 and conclude in 2025, while processing operations are expected to continue until economically viable stockpiles are exhausted in 2031. Underground operations are currently projected to continue until 2026 with potential to extend underground operations if the ongoing underground exploration program is successful in identifying more underground mineral deposits.
On January 31, 2024, the Company announced positive exploration drilling results from the Antelope deposit at the Otjikoto Mine. The Antelope deposit, which comprises the Springbok Zone, the Oryx Zone, and a possible third structure, Impala, subject to further confirmatory drilling, is located approximately three km south of the Otjikoto open pit. On June 20, 2024, the Company announced an initial Inferred Mineral Resource estimate for the Springbok Zone, the southernmost shoot of the recently discovered Antelope deposit. Over 36,000 meters have been drilled into the Springbok Zone to date, with 33 holes totaling 16,950 meters completed in 2024, to establish the 50 x 50 meter spacing that informs this initial Inferred Mineral Resource estimate. Recent drilling at the Springbok Zone remains open southward, indicating additional exploration potential beyond the currently defined resource. The Company determined that the initial Inferred Mineral Resource estimate of 1.75 million tonnes grading 6.91 g/t gold for a total of 390,000 ounces of gold was sufficient to initiate a PEA on development of the deposit by underground mining methods, similar to the Wolfshag deposit. Subject to receipt of a positive PEA and permit, mining of the Springbok Zone, coupled with the exploration potential of the greater Antelope deposit, could begin to contribute to gold production at Otjikoto in 2026. The Antelope deposit has the potential to be developed as an underground mining operation, which could complement the expected processing of low-grade stockpiles at the Otjikoto mill from 2026 to 2031. Mineral Resources that are not Mineral Reserves do not have demonstrated economic viability. There is no guarantee that all or any part of the Mineral Resource will be converted into a Mineral Reserve. Inferred Mineral Resources are considered too geologically speculative to have mining and economic considerations applied to them that would enable them to be categorized as Mineral Reserves.
The Otjikoto Mine's cash operating costs (see “Non-IFRS Measures”) for the second quarter of 2024 were $673 per gold ounce produced ($666 per ounce gold sold). Cash operating costs per gold ounce produced for the second quarter of 2024 were higher than anticipated due to lower than expected credits for deferred stripping resulting from more ore being mined than anticipated and lower capitalized underground development credits for the second quarter of 2024.
All-in sustaining costs (see “Non-IFRS Measures”) for the second quarter of 2024 were $1,044 per gold ounce sold. All-in sustaining costs for the second quarter of 2024 were slightly higher than expected as a result of higher than expected cash operating costs and higher gold royalties due to a higher than anticipated average realized gold price, partially offset by lower than expected sustaining capital expenditures and higher than anticipated gold ounces sold.
Capital expenditures for the second quarter of 2024 totalled $12 million, consisting of $9 million for deferred stripping in the Otjikoto pit, $2 million for Wolfshag underground mine development and $1 million for mining equipment rebuilds.
The Otjikoto Mine is now expected to produce between 185,000 and 205,000 ounces of gold in 2024 (original guidance of between 180,000 and 200,000 ounces) at cash operating costs in the upper end of its guidance range of between $685 and $745 per ounce and all-in sustaining costs of between $960 and $1,020 per ounce. Gold production at Otjikoto is expected to be relatively consistent throughout 2024. For 2024, Otjikoto is expected to process a total of 3.4 million tonnes of ore at an average grade of 1.77 g/t gold with a process gold recovery of 98.0%. Processed ore will be sourced from the Otjikoto pit and the Wolfshag underground mine, supplemented by existing medium and high-grade ore stockpiles.
Goose Project Development
The Back River Gold District consists of five mineral claims blocks along an 80 km belt. Construction is underway at the most advanced project in the district, the Goose Project, and has been de-risked with significant infrastructure currently in place.
B2Gold recognizes that respect and collaboration with the Kitikmeot Inuit Association (“KIA”) is central to the license to operate in the Back River Gold District and will continue to prioritize developing the project in a manner that recognizes Inuit priorities, addresses concerns, and brings long-term socioeconomic benefits to the Kitikmeot Region. B2Gold looks forward to continuing to build on its strong collaboration with the KIA and Kitikmeot Communities.
As announced in May 2024, development of the open pit and underground was slightly behind schedule due to equipment availability (commissioning and availability of the open pit equipment), adverse weather conditions and the prioritization of critical path construction activities. An additional three months of mining was added to the schedule to ensure that the Umwelt open pit, underground development and crown pillar activities align and that there is significant tailings storage capacity in the Echo open pit. With the schedule change, the mill is expected to start wet commissioning in the second quarter of 2025 with ramp up to full production in the third quarter of 2025. This does not impact the other facets of the project and staffing tables have been adjusted to ensure that capital is conserved. The Company continues to estimate that gold production in calendar year 2025 will be between 120,000 ounces and 150,000 ounces (previously estimated to be between 220,000 ounces and 260,000 ounces). Importantly, the updated mining schedule does not impact the total number of gold ounces the Company expects to produce over the life of mine of the Goose Project. The updated production profile has resulted in the Company estimating that average annual gold production from 2026 to 2030 will increase to be in excess of 310,000 ounces per year (previously estimated at 300,000 ounces per year).
B2Gold successfully completed the 2024 WIR campaign in the second quarter of 2024 and has delivered all necessary materials from the MLA to complete the construction of the Goose Project. All planned construction for the first half of 2024 that is necessary to produce gold by the end of the second quarter of 2025 has been completed and project development remains on schedule. The key construction items that were completed in the second quarter included the installation of Phase 2 of the Goose Project accommodation complex, which expanded camp capacity to more than 600 beds; the construction of three additional fuel storage tanks at the MLA to increase fuel storage capacity to more than 80 million liters of fuel, which are anticipated to begin to receive fuel in August 2024; the construction of three additional fuel storage tanks at the Goose Project site to increase fuel storage capacity to more than 80 million liters of fuel, of which two of the three tanks have been completed with the third tank expected to be completed in the third quarter of 2024; the purchase of materials necessary to complete construction and the staging of those materials for shipment to the MLA, with ten ships and one barge having been scheduled (seven ships with dry cargo of more than 120,000m3 and three ships with more than 80 million liters of fuel) and prepared to depart for the MLA during the 2024 sealift in August and September; the purchase of additional trucks for the 2025 WIR campaign, with a total of 105 trucks now available; the placement of more than 75% of the concrete, with more than 90% of the concrete expected to be placed by the end of the third quarter of 2024; the placement of all E-houses on the mill pad with electricians now working on connecting power to various components; piping work focused on the fuel storage tanks and the final Heavy Mechanical Equipment workshop; and the development of access for placement of piping and barge for fresh water system, with installation expected in the third quarter of 2024.
Development of the open pit and underground remain on the critical path to ensure that adequate material is available for start up and that the Echo pit is available for tailings placement. The open pit started slowly, but showed good progress in the second quarter of 2024, meeting production targets, and is anticipated to be ready to receive tailings when the mill starts. The underground mine remains on schedule for commencement of production by the end of the second quarter of 2025. B2Gold is currently reviewing final options for mining of the crown pillar and maximizing volumes of the Echo pit.
After completing a detailed design review of the Goose Project, B2Gold announced in January 2024 a revised construction capital estimate to C$1,050 million. In addition, before wet commissioning the Company estimated it will spend an additional C$200 million on underground development, deferred stripping and sustaining capital, as well as an additional C$205 million for fuels, reagents, and other working capital items necessary to build up site inventory levels due to the seasonality of the project logistics. In the second quarter of 2024, the Company incurred cash expenditures of $128 million (C$175 million) for the Goose Project on construction and mine development activities and $43 million (C$58 million) on supplies inventory. After successful completion of the 2024 WIR, it is anticipated that cash expenditures on construction and mine development activities will be lower in the second half of 2024 compared to the cash expenditures incurred in the first half of 2024.
B2Gold is currently updating the total construction capital estimate to incorporate the (previously announced) three month delay in commencement of operations and additional costs associated with logistics of shipping materials to the Goose Project site via air transport. A final updated budget is expected to be released in early September 2024.
Gramalote Project Development
On June 18, 2024, the Company announced positive PEA results on its 100% owned Gramalote Project located in the Department of Antioquia, Colombia. Based on the preliminary results completed in 2022, the contemplated larger-scale project with AngloGold Ashanti Ltd. did not meet the combined investment