BTO.TO · 2017-03-16

B2Gold Reports 2016 Fourth Quarter and Full-Year Results; Achieves 2016 Record Gold Production, Record Low Cash Operating Costs & Record Operating Cash Flow; Outlook Provides for Very Strong Gold Production Growth Profile by 2018

Production Results Financials

News Release B2Gold Reports 2016 Fourth Quarter and Full-Year Results;

Achieves 2016 Record Gold Production, Record Low Cash Operating Costs & Record Operating Cash Flow; Outlook Provides for Very Strong Gold Production Growth Profile by 2018

Vancouver, March 16, 2017 – B2Gold Corp. (TSX: BTO, NYSE MKT: BTG, NSX: B2G) (“B2Gold” or the “Company”) is pleased to announce its operational and financial results for the fourth quarter and year-end December 31, 2016. The Company previously released its gold production and gold revenue for the fourth quarter and full-year 2016, as well as its production and cash cost guidance for 2017 (see news release dated 02/05/17). All dollar figures are in United States dollars unless otherwise indicated.

2016 Fourth Quarter Highlights

Consolidated gold production of 140,651 ounces, 7% (or 9,182 ounces) greater than the same period in 2015
Consolidated gold revenue of $181.2 million on record sales of 151,524 ounces at an average price of $1,196 per ounce, an increase in revenue of 30% (or $42.2 million) over the same period in 2015
Consolidated cash operating costs (see “Non-IFRS Measures”) of $546 per ounce (Q4 2015 - $527 per ounce) and consolidated AISC (see “Non-IFRS Measures”) of $877 per ounce (Q4 2015 - $807)
Cash flow from operating activities of $82.3 million ($0.09 per share), an increase of $33.8 million (or 70%) compared with the fourth quarter of 2015
Strong cash position of $144.7 million at year-end
Fekola Project mine construction is 3 months ahead of schedule for an anticipated October 1, 2017 production start and remains on budget
Subsequent to December 31, 2016, on March 14, 2017, the Company received a binding letter of commitment from the Canadian Imperial Bank of Commerce to participate in the Company’s revolving credit facility, thereby increasing the aggregate amount of the facility from $350 million to $425 million

2016 Full-Year Highlights

Record annual consolidated gold production of 550,423 ounces of gold, achieving revised production guidance (of 535,000 to 575,000 ounces) and surpassing initial guidance (of 510,000 to 550,000 ounces)
Masbate Mine achieved record annual gold production of 206,224 ounces, 17% (or 30,421 ounces) higher than 2015
Otjikoto Mine achieved record annual gold production of 166,285 ounces, 14% (or 20,562 ounces) higher than 2015
Record annual consolidated gold revenue of $683.3 million on record sales of 548,281 ounces at an average price of $1,246 per ounce
Consolidated cash operating costs an annual record low of $508 per ounce, at the low end of the Company’s reduced cost guidance range (of between $500 and $535 per ounce) and well below initial guidance (of between $560 and $595 per ounce)
Consolidated AISC of $794 per ounce, near the mid-point of the Company’s reduced cost guidance range (of between $780 and $810 per ounce) and well below initial guidance (of between $895 and $925 per ounce)
Cash flow from operating activities (including $120 million of proceeds received from Prepaid Sales transactions) an annual record of $411.8 million ($0.44 per share), an increase of $236.4 million (or 135%) compared with 2015
Net income of $38.6 million ($0.04 earnings per share) and adjusted net income (see “Non-IFRS Measures”) of $99.0 million ($0.11 adjusted earnings per share) for full-year 2016
Signed a Euro 71.4 million Equipment Facility with Caterpillar Financial SARL for the Fekola Project
Additional positive exploration drill results reported for the Company’s Mali and Burkina Faso greenfield targets
2017 outlook provides for forecast annual consolidated gold production of between 545,000 and 595,000 ounces (including estimated Fekola pre-commercial production of between 45,000 and 55,000 ounces) with expected higher forecast cash operating costs and AISC (as compared to 2016) of between $610 and $650 per ounce and between $940 and $970 per ounce, respectively
2018 outlook provides for very strong production growth, with the planned first full-year of production from the Fekola Project, consolidated annual gold production is expected to increase significantly and be between 900,000 and 950,000 ounces (including estimated Fekola production of between 365,000 to 375,000 ounces) with cash operating costs and AISC expected to approximate the Company’s 2016 revised cost guidance ranges (of $500 to $535 per ounce for cash operating costs and $780 to $810 per ounce for AISC)

2016 Full-Year and Fourth Quarter Operational Results

B2Gold achieved another record year of consolidated gold production in 2016 (for the eighth straight year) producing 550,423 ounces of gold, near the mid-point of its revised production guidance range (of 535,000 to 575,000 ounces) and surpassing its initial guidance range (of 510,000 to 550,000 ounces). Gold production for the year also increased by 12% (or 57,158 ounces) over 2015. The record performance in 2016 reflects the record performances from the Company’s Masbate and Otjikoto mines, both setting new annual production records in 2016. The Company’s La Libertad Mine also met its production guidance, with 2016 production near the high end of its production guidance range. In the fourth quarter of 2016, consolidated gold production was 140,651 ounces, an increase of 7% (or 9,182 ounces) over the same period last year.

For the full-year 2016, consolidated cash operating costs were an annual record low of $508 per ounce, at the low end of the Company’s reduced cost guidance range (of between $500 and $535 per ounce) and well below initial guidance (of between $560 and $595 per ounce). Consolidated cash operating costs also decreased by $108 per ounce (or 18%) compared to the prior-year. This significant improvement reflects higher gold production, lower fuel prices/consumption, and ongoing cost optimization efforts. In the fourth quarter of 2016, consolidated cash operating costs were $546 per ounce (Q4 2015 - $527 per ounce).

Full-year consolidated all-in sustaining costs (“AISC”) were $794 per ounce, near the mid-point of the Company’s reduced cost guidance range (of between $780 and $810 per ounce) and well below initial guidance (of between $895 and $925 per ounce). Consolidated AISC also decreased by $153 per ounce (or 16%) compared to the prior-year. The lower consolidated AISC were primarily driven by the same factors impacting the reduction in cash operating costs per ounce as well as lower than budgeted capital expenditures at several mine sites due to the timing of pre-stripping and underground development activities and land purchases. In the fourth quarter of 2016, consolidated AISC were $877 per ounce (Q4 2015 - $807 per ounce).

2016 Full-Year and Fourth Quarter Financial Results

For the full-year 2016, consolidated gold revenue was a record $683.3 million on record sales of 548,281 ounces at an average price of $1,246 per ounce compared to $553.7 million (or $576.8 million including $23.1 million of pre-commercial sales from Otjikoto) on sales of 481,185 ounces (or 499,651 ounces including 18,466 ounces of pre-commercial sales from Otjikoto) at an average price of $1,151 per ounce in 2015. The 23% (or $129.6 million) increase in annual gold revenue was mainly attributable to a 14% increase in gold sales volume and a 8% increase in the average realized gold price. In the fourth quarter of 2016, consolidated gold revenue was $181.2 million on record sales of 151,524 ounces at an average price of $1,196 per ounce compared to $139 million on sales of 127,482 ounces at an average price of $1,090 per ounce in the fourth quarter of 2015.

For the full-year 2016, cash flow from operating activities was an annual record of $411.8 million ($0.44 per share) compared with $175.4 million ($0.19 per share) in 2015, an increase of $236.4 million (or 135%). This increase was mainly due to a $129.6 million increase in gold revenue, $120 million of proceeds received from the Prepaid Sales transactions (see “Liquidity and Capital Resources” section below) and a $23.9 million reduction in production costs which were partially offset by a $15.9 million increase in income tax expense and an $18.6 million negative change in non-cash working capital. In the fourth quarter of 2016, cash flow from operating activities was $82.3 million ($0.09 per share), an increase of $33.8 million (or 70%) compared with the fourth quarter of 2015.

Adjusted net income was $99.0 million ($0.11 adjusted earnings per share) for the year compared to $13.3 million ($0.01 earnings per share) in 2015. Adjusted net income in 2016 mainly excluded various unrealized mark-to-market adjustments (totaling a net loss of $24.0 million), non-cash mineral property write-offs of $15.0 million and non-cash share based payments of $13.7 million. In the fourth quarter of 2016, adjusted net income was $2.5 million ($0.00 per share) compared to $1.6 million ($0.00 per share) in the fourth quarter of 2015.

For the full-year 2016, the Company generated net income of $38.6 million ($0.04 per share) compared to a net loss of $145.1 million (negative $0.16 per share) in 2015. In the fourth quarter of 2016, the Company generated net income of $8.1 million ($0.01 per share) compared to a net loss of $115.1 million (negative $0.13 per share) in the fourth quarter of 2015. During the fourth quarter of 2015, the Company revised its long-term gold price assumption from $1,300 per ounce to $1,250 per ounce resulting in the Company recording non-cash net impairment charges totaling $86.7 million.

Liquidity and Capital Resources

As at December 31, 2016, the Company remained in a strong financial position with cash and cash equivalents of $144.7 million compared to cash and cash equivalents of $85.1 million at December 31, 2015. Working capital at December 31, 2016 was $101.0 million compared to working capital of $104.7 million at December 31, 2015. In addition, the Company has $150 million of undrawn capacity on its $350 million revolving credit facility (“RCF”) and a Euro 71.4 million term Equipment Facility with Caterpillar Financial SARL. Subsequent to December 31, 2016, on March 14, 2017, the Company received a binding letter of commitment from the Canadian Imperial Bank of Commerce to participate in the Company’s RCF, thereby increasing the aggregate amount of the facility from $350 million to $425 million. The Company believes that this liquidity coupled with continued strong operating cash flows from its existing mine operations, will provide adequate resources both to maintain operations and fund the construction of the Fekola Project through completion (forecast to be October 1, 2017) based on current assumptions, including current gold prices and life-of-mine plans.

On August 11, 2016, the Company entered into an equity distribution agreement (the “ATM Agreement”) with two placement agents for the sale of common shares for aggregate gross proceeds of up to $100 million through “at the market” distributions under the Company’s shelf prospectus and “at the market” prospectus supplement (the “ATM Offering”). The ATM Offering runs until the earlier of (i) shares with aggregate gross proceeds of $100 million have been issued, (ii) February 11, 2018, or (iii) termination by one of the parties in accordance with the ATM Agreement. The placement agents, collectively, receive a placement fee of 2% of the gross proceeds from each placement. During the year ended December 31, 2016, the Company issued 14.8 million shares for net proceeds for $44.2 million, under the ATM Offering.

In March 2016, the Company entered into a series of Prepaid Sales transactions totalling $120 million with its revolving credit facility bank syndicate. The Prepaid Sales transactions, in the form of metal sales forward contracts, allow the Company to deliver predetermined volumes of gold on agreed future delivery dates in exchange for upfront cash pre-payment. The Prepaid Sales transactions have a term of 33 months, which commenced in March 2016, and settlement will be in the form of physical deliveries of 103,266 ounces of unallocated gold from any of the Company’s mines in 24 equal monthly installments during 2017 and 2018 (estimated to represent approximately 9% and 6%, respectively, of the forecast production in those years).

Operations

Mine-by-mine gold production in the fourth quarter and full-year 2016 was as follows:

Mine	Q4 2016 Production (ounces)	Full-year 2016 Production (ounces)		2016		2016
				Updated		Original
				Production		Production
				Guidance		Guidance
				(ounces)		(ounces)
Masbate	48,633	206,224	200,000 – 210,000		175,000 – 185,000
Otjikoto	46,846	166,285	160,000 – 170,000		160,000 – 170,000

La Libertad	35,165	132,431	125,000 – 135,000	125,000 – 135,000
El Limon	10,007	45,483	50,000 – 60,000	50,000 – 60,000
B2Gold Consolidated	140,651	550,423	535,000 – 575,000	510,000 – 550,000

Mine-by-mine cash operating costs in the fourth quarter and full-year 2016 was as follows:

Mine		Q4 2016		Full-year 2016	2016 Updated Cost Guidance ($ per ounce)	2016 Original Cost Guidance ($ per ounce)
		Cash		Cash
		Operating		Operating
		Costs		Costs
		($ per ounce)		($ per ounce)
Masbate	$547		$463		$465 – $505	$620 – $660
Otjikoto	$367		$368		$365 – $405	$400 – $440
La Libertad	$661		$659		$650 – $680	$650 – $680
El Limon	$982		$781		$690 – $730	$610 – $650
B2Gold Consolidated	$546		$508		$500 – $535	$560 – $595

Masbate Gold Mine – Philippines

The Masbate Mine in the Philippines achieved a very strong year in 2016, producing an annual record 206,224 ounces of gold, above the mid-point of its revised production guidance range (of 200,000 to 210,000 ounces) and significantly exceeding initial guidance (of 175,000 to 185,000 ounces). Gold production for the year also increased by 17% (or 30,421 ounces) over 2015. Masbate’s strong operational performance was driven by better-than-expected grades from the Main Vein Stage 1 pit and higher recoveries arising from higher-than-budgeted oxide ore tonnage from the Colorado pit. In addition, recoveries were positively impacted by the newly completed process plant upgrades (adding residence time and additional oxygen to the CIL circuit to achieve optimum leach performance). The Masbate Mine also continued its strong safety performance, completing 2016 without a “Lost-Time-Injury” and extending the number of days without a “Lost-Time-Injury” to 445 days.

In the fourth quarter of 2016, gold production at Masbate was 48,633 ounces, 13% (or 5,734 ounces) above budget and 1% (or 675 ounces) higher than the fourth quarter of 2015. Commencing in August 2016, Masbate’s mine plan was adjusted to optimize the mine’s development sequence/gold production through to 2017 and beyond. These adjustments included accelerated mining in the Main Vein Stage 1 pit, expanding the Colorado pit and commencing site preparations for later Main Vein stages. In addition, the lower grade (but higher recovery) Colorado pit ore was prioritized as mill feed ahead of the higher grade Main Vein ore, largely due to the higher than budgeted oxide ore content being sourced from the larger Colorado pit. The excess higher grade ore from Main Vein Stage 1 pit was stockpiled and is budgeted to be processed in 2017.

For the full-year 2016, Masbate’s cash operating costs were an annual record low of $463 per ounce, and were even below the reduced cost guidance range (of between $465 and $505 per ounce) and significantly below initial guidance (of between $620 and $660 per ounce). Cash operating costs also decreased by $194 per ounce (or 30%) compared to the prior-year. This significant improvement reflects higher gold production and lower fuel/energy costs. In the fourth quarter of 2016, Masbate’s cash operating costs were $547 per ounce (Q4 2015 - $512 per ounce).

Masbate’s AISC for the year were $653 per ounce, significantly below both budget of $899 per ounce and $965 per ounce in the prior-year, reflecting the favourable cash operating costs as well as lower capital expenditures. The lower capital expenditures resulted from lower than budgeted pre-stripping costs driven by lower mining costs and a lower strip ratio for the Colorado pit. Timing delays in land acquisition costs also contributed to the lower than budgeted capital costs. In the fourth quarter of 2016, Masbate’s AISC were $788 per ounce (Q4 2015 - $795 per ounce).

Capital expenditures totaled $31.9 million in 2016 which consisted mainly of $14 million for plant upgrades, $4.5 million for pre-stripping costs, $3.9 million for powerhouse upgrades and $2.3 million in mobile equipment purchases. In the fourth quarter of 2016, capital expenditures totaled $9.6 million, consisting mainly of $3.1 million for powerhouse upgrades, $2.7 million in pre-stripping costs and $1.5 million for plant upgrades.

Otjikoto Gold Mine, Namibia

The Otjikoto Mine in Namibia also had a record year in 2016, producing an annual record 166,285 ounces of gold, above the mid-point of its production guidance range (of between 160,000 and 170,000 ounces) and 14% (or 20,562 ounces) higher than 2015 (including 18,815 ounces of pre-commercial production from Otjikoto). Otjikoto’s 2016 production benefitted from higher throughput due to the successful completion of its mill expansion project in September 2015 (which increased plant capacity from 2.5 million tonnes per annum to 3.0 million tonnes per annum) and also due to overall process optimizations. In the fourth quarter of 2016, the Otjikoto Mine produced 46,846 ounces of gold, slightly above budget and 19% (or 7,472 ounces) higher than the fourth quarter of 2015.

For the full-year 2016, Otjikoto’s cash operating costs were an annual record low of $368 per ounce, at the low end of its reduced cost guidance range (of between $365 and $405 per ounce) and significantly beating initial guidance (of between $400 and $440 per ounce). Cash operating costs also decreased by $57 per ounce (or 13%) compared to the prior-year (following commercial production on February 28, 2015). The lower cash operating costs reflect lower fuel prices and the reduced consumption of fuel and reagents. Cash operating costs were also lower in 2016 compared to 2015 as a result of a weaker Namibian dollar/US dollar foreign exchange rate. In the fourth quarter of 2016, Otjikoto’s cash operating costs were $367 per ounce (Q4 2015 - $385 per ounce).

Otjikoto’s AISC for the year were $604 per ounce compared to budget of $629 per ounce and $550 per ounce in 2015 (following commercial production on February 28, 2015). In the fourth quarter of 2016, Otjikoto’s AISC were $587 per ounce (Q4 2015 - $509 per ounce).

Capital expenditures totaled $39.2 million in 2016 and included pre-stripping costs of $18.3 million and mobile equipment purchases of $17.7 million. In the fourth quarter of 2016, capital expenditures totaled $5.4 million mainly for pre-stripping costs of $3.2 million, mobile equipment purchases of $1.2 million and $0.6 million for the Wolfshag underground study.

La Libertad Gold Mine - Nicaragua

For the full-year 2016, La Libertad Mine in Nicaragua produced 132,431 ounces of gold, near the high end of its production guidance range (of 125,000 to 135,000 ounces) and 11% (or 12,956 ounces) higher than 2015. Better grade and higher recoveries contributed to the successful production year. During the third quarter of 2016, La Libertad’s mine schedule was adjusted to mine additional high grade ore from the Jabali Central pit to offset permitting delays at the Jabali Antenna pit. The Jabali Antenna pit is now planned for production in the third quarter of 2017, pending completion of permitting and relocation activities. In the fourth quarter of 2016, gold production at La Libertad was 35,165 ounces, consistent with the fourth quarter of 2015.

La Libertad’s cash operating costs were $659 per ounce in 2016, near the low end of its cost guidance range (of between $650 and $680 per ounce), and also $57 per ounce (or 8%) lower compared to the prior-year. The reduction compared to the prior-year was mainly due to higher gold production. In the fourth quarter of 2016, La Libertad’s cash operating costs were $661 per ounce (Q4 2015 - $601 per ounce).

La Libertad’s AISC were $904 per ounce in 2016, below both budget of $1,036 per ounce and $988 per ounce in the prior-year, reflecting lower capital expenditures (primarily driven by lower pre-stripping costs resulting from permitting delays at Jabali Antenna) and lower cash operating costs. In the fourth quarter of 2016, La Libertad’s AISC were $878 per ounce (Q4 2015 - $877 per ounce).

Capital expenditures totaled $18.5 million for the year, consisting primarily of La Esperanza tailings dam costs ($5.1 million), land acquisition costs ($4.6 million), pre-stripping costs ($2.8 million), underground development costs ($2.6 million) and Jabali Central development costs ($2.2 million). In the fourth quarter of 2016, capital expenditures totaled $4.6 million which consisted primarily of land acquisition costs ($1.8 million) and underground development costs ($1.4 million).

El Limon Gold Mine - Nicaragua

For the full-year 2016, El Limon Mine in Nicaragua produced 45,483 ounces of gold, below its production guidance range (of 50,000 to 60,000 ounces) and 13% (or 6,781 ounces) lower compared to 2015. In the fourth quarter of 2016, gold production at Limon was 10,007 ounces (Q4 2015 – 8,903 ounces). In 2016, Limon’s production was negatively affected by mine fleet availability limitations and water control issues which reduced ore flow from Santa Pancha. As a result, mill feed was supplemented with lower grade ore from surface stockpiles. To improve overall mine performance, the operations and maintenance areas have been reorganized and additional mining equipment has been purchased. The underground pumping system has also been overhauled and the dewatering wells are currently being improved.

El Limon’s cash operating costs were $781 per ounce for the year, above the high end of its revised cost guidance range (of $690 to $730 per ounce) and $68 per ounce (or 10%) higher compared to the prioryear. The increase was mainly due to lower gold production. In the fourth quarter of 2016, El Limon’s cash operating costs were $982 per ounce (Q4 2015 - $958 per ounce).

El Limon’s AISC were $1,189 per ounce in 2016 compared to budget of $1,008 per ounce and $1,279 per ounce in the prior-year. In the fourth quarter of 2016, El Limon’s AISC were $1,501 per ounce (Q4 2015

$1,466 per ounce).

Capital expenditures totaled $7.7 million in 2016 which consisted mainly of underground development costs ($4.4 million) and mining equipment purchases ($1.0 million). In the fourth quarter of 2016, capital expenditures totaled $2.5 million, consisting mainly of underground development costs ($1.6 million).

Production Outlook and Cost Guidance

For 2017, B2Gold is projecting another year of growth with consolidated gold production expected to be in the range of between 545,000 and 595,000 ounces (including estimated pre-commercial production from Fekola of between 45,000 and 55,000 ounces). Based on Fekola’s current mine construction progress, the Fekola Project is 3 months ahead of schedule and is planning for an October 1, 2017 production start. Looking forward to 2018, with the planned first full-year of production from the Fekola Project (based on current assumptions and updates to the Company’s long-term mine plans), the Company is projecting its consolidated gold production to increase significantly and be between 900,000 to 950,000 ounces. The Fekola Project is expected to be a large low-cost producer and should enable the Company to significantly reduce its forecast longer term cash operating costs per ounce and AISC per ounce.

In 2017, consolidated cash operating costs (including the Fekola pre-commercial production period) are expected to be between $610 and $650 per ounce. The expected increase over 2016 reflects the impact of higher projected operating strip ratios at Masbate and Otjikoto, higher projected fuel prices, and lower production from Masbate.

Consolidated AISC (including the Fekola pre-commercial production period) are expected to be between $940 and $970 per ounce for 2017. The expected increase over 2016 reflects higher anticipated cash operating costs per ounce as well as higher expected capitalized pre-stripping costs and other capital expenditures. In comparison to 2016, 2017 forecast sustaining capital expenditures are anomalously high as a result of Masbate’s planned mining fleet replacement and expansion (see “Masbate Mine - Philippines” section below) and as a result of anticipated higher average strip ratios at Otjikoto (which are expected to be lower in 2018 and 2019).

For 2018, with the planned first full-year of production from the Fekola Project (based on current assumptions and updates to the Company’s long-term mine plans), the Company’s forecast consolidated cash operating costs per ounce and AISC per ounce are expected to decrease in 2018 (compared to 2017) and be comparable to the Company’s 2016 revised cost guidance ranges (of $500 to $535 per ounce for cash operating costs and $780 to $810 per ounce for AISC).

Mine-by-mine 2017 ranges for forecast gold production, cash operating costs per ounce and AISC per ounce are as follows:

	2017 Forecast Gold Production (ounces)		2017 Forecast	2017 Forecast AISC ($ per ounce)
			Cash Operating
			Costs
			($ per ounce)
Masbate	175,000 – 185,000	$690 - $730		$1,020 - $1,050
Otjikoto	165,000 – 175,000	$510 - $550		$855 - $885
La Libertad	110,000 – 120,000	$625 - $665		$785 - $815
El Limon	50,000 – 60,000	$655 - $695		$1,065 - $1,095
Subtotal	500,000 – 540,000	$615 - $655		$960 - $990
Fekola (pre-commercial)(1)	45,000 – 55,000	$580 - $620		$700 - $730
B2Gold Consolidated(2)(3)	545,000 – 595,000	$610 - $650		$940 - $970

(1) Fekola’s 2017 forecasts include estimated gold production and operating costs during the precommercial production period. For accounting purposes, Fekola’s revenue and cash operating costs during the pre-commercial production period will be capitalized to mineral property development costs. For 2018, with the planned first full-year of production from the Fekola Project, Fekola’s gold production is expected to be approximately 365,000 to 375,000 ounces.

(2) Consistent with prior years, 2017 consolidated gold production is not scheduled to be evenly distributed across the four quarters. Gold production in 2017 is anticipated to be weighted towards the second half of the year (57%) due to the anticipated start-up of Fekola on October 1, 2017 combined with lower expected average strip ratios in the second-half.

(3) Consolidated cash operating costs per ounce and AISC per ounce are expected to be lower in the second-half of 2017 compared to the first-half, reflecting higher expected gold production, lower expected average strip ratios, and lower capital expenditures in the second-half. Consistent with the forecast production weighting between the first-half and second-half, consolidated cash operating costs are expected to be in the range of between $670 and $690 per ounce in the firsthalf of 2017 and are then expected to decrease in the second-half of 2017 to between $584 and $604 per ounce. Consolidated AISC are expected to be in the range of between $1,148 and $1,168 per ounce in the first-half of 2017 and are then expected to decrease in the second-half of 2017 to between $795 and $815 per ounce.

Masbate Mine, Philippines

For the Masbate Mine, 2017 gold production is expected to be between 175,000 and 185,000 ounces. Masbate’s 2016 production had benefited from better-than-expected grades from the Main Vein Stage 1 pit and higher recoveries arising from higher-than-budgeted oxide ore from the Colorado pit.

Cash operating costs per ounce are expected to be between $690 and $730 per ounce. The expected increase over 2016 is mainly attributable to lower forecast production and higher projected strip ratios at the new Main Vein Stage 3 pit and expanded Colorado pit, as well as higher projected prices for diesel fuel/heavy fuel oil.

AISC are expected to be between $1,020 and $1,050 per ounce. The expected increase over 2016 reflects higher anticipated cash operating costs per ounce, higher forecast capitalized pre-stripping costs and the planned mine fleet replacement and expansion. In the first-half of 2017, the Company has elected to replace a significant portion of Masbate’s mine fleet with new equipment purchases, rather than rebuilding major components over several years, to optimize its fleet performance and reduce both operating and capital costs in future years. In addition, to be able to meet the additional haulage requirements in 2017 to 2021, Masbate’s mine fleet is also planned to be expanded in 2017. Since the new fleet will commence utilization in 2017, all of the related purchase costs have been included in Masbate’s 2017 AISC even though the equipment will benefit Masbate operations in future years as well. Masbate’s mine equipment purchases are subsequently planned to decrease significantly over the next several years.

The Masbate exploration budget for 2017 is approximately $5 million including 27,000 meters of drilling. The drilling is divided into brownfields drilling to upgrade resources within the mine licence area, totalling 16,000 metres of diamond drilling, and another 11,000 metres on regional targets. New targets such as Montana SE will be further tested. Drill results from the 2016 program in the Montana SE area contained up to 2.39 g/t gold over 22.2 metres true width in hole MONRC141 and 1.23 g/t gold over 17.3 metres true width in hole MONRC 139.

As previously reported by the Company on September 27, 2016, October 18, 2016 and in its MD&A for the year ended December 31, 2016, the Philippine Department of Environment and Natural Resources (the “DENR”) announced the preliminary results of mining audits carried out by the DENR in respect of all metallic mines in the Philippines and subsequently issued the Masbate Mine audit report which contains the detailed findings from the audit and directed the Company to provide explanations and comments in response to the audit findings as described in its previous disclosures. The Company provided a comprehensive response to the findings and recommendations in the audit, which the Company believes addresses the issues raised. As reported by the Company on February 2, 2017, the DENR has announced further results of its mining audit and the Masbate Mine was not among the mines announced to be suspended or closed. To-date the Company has not received any updated formal written response from the DENR confirming the results of the audit in respect of Masbate and as such, the final outcome of the audit has not been determined. The Company believes that it continues to be in compliance with Philippine’s laws and regulations. The Company will continue to work closely with the DENR to maintain compliance with regulations and continue to promote improved quality of life in the communities where it operates. The Company will continue to provide updates of its progress with the DENR. Operations remain uninterrupted at the mine and the projections and guidance for the Masbate Mine and the Company on a consolidated basis are provided on this basis.

Otjikoto Mine, Namibia

The Otjikoto Mine is forecast to produce between 165,000 and 175,000 ounces of gold in 2017, compared to 166,285 ounces produced in 2016. Cash operating costs are expected to be between $510 and $550 per ounce. The expected cost increase over 2016 is mainly due to higher projected strip ratios at the new Otjikoto Phase 2 pit and Wolfshag Phase 1 pit. In addition, fuel prices are also projected to be higher than 2016. The average strip ratios at Otjikoto are expected to be lower in 2018 and 2019. AISC are expected to be between $855 and $885 per ounce in 2017, reflecting higher expected cash operating costs per ounce and capital expenditures.

Life-of-mine production plans for the Otjikoto Mine, incorporating preliminary projections for the Wolfshag open pit 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 2017. Ongoing studies are leading the Company to re-evaluate the open pit and underground interface.

The total exploration budget for Namibia in 2017 is $5.1 million mainly for 5,000 metres of diamond drilling on the Otjikoto licence area, and 12,000 metres of diamond drilling and 5,000 metres of RAB drilling on the Ondundu joint venture project. Drilling at Ondundu in 2016 has defined a distinct North South zone of mineralization with holes containing up to 3.10 g/t gold over 68.4 metres drilled in hole ON-16-092 and 2.58 g/t over 52.1 metres (true width approximately 50% of drilled width) drilled in hole ON-16-96. An additional 5,000 metres of diamond and RC drilling are committed to new targets in and around the Otjikoto area.

La Libertad Mine, Nicaragua

La Libertad Mine is expected to produce between 110,000 and 120,000 ounces of gold in 2017 (compared to 132,431 ounces produced in 2016) at cash operating costs of between $625 and $665 per ounce and AISC of between $785 and $815 per ounce.

La Libertad’s production forecast assumes that mining from the higher grade Jabali Antenna pit will now enter the production stream in the third quarter of 2017 (dependent upon the successful completion of resettlement activities and receipt of the remaining mining permits). However, as in 2016, La Libertad retains some flexibility in sourcing its ore from alternate open pit resources and mineralized zones (subject to permitting) within close proximity of La Libertad mill while the Jabali Antenna permitting and relocation activities are being completed. La Libertad’s cash operating costs per ounce are expected to remain in-line with 2016, as the decrease in planned production is expected to be offset by lower mining costs (as a result of less waste being moved at the Jabali Central pit). Based on current assumptions, La Libertad Mine has an approximate mine life of 3 years, subject to further exploration success.

La Libertad’s exploration budget for 2017 is approximately $6.7 million for a total of 15,000 metres of planned diamond drilling. The program is comprised of 7,000 metres of brownfields (near mine) drilling and 8,000 metres of drilling planned on several regional targets. Most of the drilling in 2017 is expected to be detailed drilling related to underground mine planning.

El Limon Mine, Nicaragua

In 2017, El Limon is expected to produce between 50,000 and 60,000 ounces of gold (compared to 45,483 ounces produced in 2016) at cash operating costs of between $655 and $695 per ounce. AISC are expected to be between $1,065 and $1,095 per ounce.

The Limon exploration budget for 2017 is approximately $5 million for a total of 11,000 metres of planned diamond drilling focusing on extending the mine life. The program will focus on the Las Mercedes and Pozo Bono/Limon Central area. Drill holes from late 2016 contained up to 9.93 g/t gold over 15.5 metres (true width) in hole LIM16-4035 of Limon Central and 8.92 g/t gold over 14.9 metres (true width) in hole LIM16-4026 on Pozo Bono.

Development update

Fekola Development Project - Mali

The Company is pleased to announce that the Fekola Project mine construction is approximately 3 months ahead of schedule and is now on target for an October 1, 2017 production start. The Fekola Project remains on budget and is expected to be a large low-cost producer and should enable the Company to significantly reduce its longer term cash operating costs per ounce and AISC per ounce. On June 11, 2015, the Company announced robust results from the optimized Feasibility Study at the Fekola Gold Project in Mali. According to the Feasibility Study, the current average annual gold production for the first seven years is estimated at approximately 350,000 ounces per year at an average operating cash cost of $418 per ounce and for the life of mine plan approximately 276,000 ounces per year at an average operating cash cost of $552 per ounce.

In the fourth quarter of 2016, B2Gold’s construction team continued to develop the Fekola Project in Mali. Significant activities during the quarter included:

A total of 4,000,000 m³of material has been moved at site;
Construction of tailings storage facility and water embankments is 100% complete;
Lining of the tailings facility commenced in December 2016;
Installation of mechanical components is on-going with gyratory crusher, pebble crusher, conveyors, reclaim tunnel, leach and CIP tanks. Commencement of mill installation started in January 2017;
Goldroom and reagent storage area construction is well underway;
Powerhouse construction remains on schedule for a June 2017 commencement of commissioning;
Pit pre-stripping has commenced ahead of schedule and over 800,000 m³ of material has been removed to-date;
Grade control for the ore zones has commenced and the lab on site is under construction (expected to start up in the second quarter of 2017); and
Commissioning team has arrived at site and begun hiring and training the mill/lab operators.

On June 29, 2016, the Company announced an exploration update for its Fekola Project. Based on the positive drill results to-date (at both near surface targets and deeper along strike below the main Fekola pit) and exploration potential, the Company is expanding the throughput at the Fekola mine to 5 million tonnes per year. The optimized Feasibility Study and Environmental and Social Impact Study were both prepared to accommodate an uplift in throughput from 4 million tonnes per year to 5 million tonnes per year. The design factors built into the original design included 5 million tonnes per year assumptions for plant design, general infrastructure and tailings dam design and location. This means that the capacity for throughput of ore at the Fekola mine could reach up to 5 million tonnes per year in the initial years of production, beyond the optimized Feasibility Study’s originally modelled 4 million tonnes per year, for relatively low additional capital cost. On August 2, 2016, the Company decided to proceed with the mill expansion and approved an $18 million expansion budget for additional items including a pebble crusher, one additional leach tank and an additional generator. With this additional capital investment, the Fekola

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