B2Gold Announces that the Malian Government Has Approved the Purchase of an Additional 10% Interest in the Fekola Mine (Fekola SA)
News Release
B2Gold Announces that the Malian Government Has Approved the Purchase
of an Additional 10% Interest in the Fekola Mine (Fekola SA)
Vancouver, August 14, 2018 - B2Gold Corp. (TSX: BTO, NYSE AMERICAN: BTG, NSX: B2G)
(“B2Gold” or the “Company”) is pleased to annou nce that the Malian Council of Ministers and the
President of Mali have approved the participation of the State in Fekola SA for a total interest of 20%.
Fekola SA is a 100% owned subsidiary of B2Gold which holds the Company’s interest in the Fekola
Mine. All dollar figures are in United States dollars unless otherwise indicated.
In 2016, pursuant to applicable mining law, the Company formed a new 100% owned subsidiary
company, Fekola SA, which now holds the Company's interest in the Fekola Mine. Following signing of a
shareholder's agreement in Augus t 2017, between the Company and the State of Mali (the "Fekola
Shareholder Agreement"), the Company confirmed th e basis under which it was to contribute a 10% free
carried interest in Fekola SA to the State of Mali. In addition, the State of Mali also had the option to
purchase an additional 10% of Fekola SA which it elect ed to exercise. The terms and conditions of the
acquisition of this additional 10% interest were agr eed between the Company and the State of Mali in a
share purchase agreement (the “Share Purchase Agreement”) dated August 2017.
In March 2017, the Company signed a mining conven tion in the form required under the 2012 Mining
Code (the "Fekola Mining Conven tion") that relates to, among other things, the ownership, permitting,
reclamation bond requirements, develo pment, operation and taxation applicable to the Fekola Mine with
the State of Mali. In August 2017, the Company finalized an amendment to the Fekola Mining
Convention with the State of Mali to address and clarify certain issues under the 2012 Mining Code. The
Fekola Mining Convention, as amended, governs the procedural and economic parameters pursuant to
which the Company operates the Fekola Mine.
On August 8, 2018, the Company was informed that the Malian Council of Ministers approved the
participation of the State in Fekola SA for a total of 20% (being the 10% free carried interest plus the
additional 10% interest), through an ordinance and a decree of the Council of Ministers, signed by the
President.
Now that the State of Mali’s inter est into Fekola SA has been fo rmally authorized by the Malian
authorities, the Company will transfer ownership of 20% of Fekola SA to the State of Mali. The first non-
participating 10% of the State of Mali's ownership w ill entitle it to an annual priority dividend equivalent
to 10% of calendar net income of Fekola SA (the “Priority Dividend”). The second fully participating
10% of the State of Mali's interest will entitle it to ordinary dividends payable on the same basis as any
ordinary dividends declared and payable to the Comp any for its 80% interest. Ordinary dividends are not
payable by Fekola SA until the Fekola SA intercompa ny loans totaling approximately $700 million, plus
accrued interest, have been repaid to B2Gold in full. The intercompany loans include historical
exploration loans, early works costs, funds advanced for the Fekola Mine c onstruction and expansion,
2017 accelerated pre-stripping and fleet purchases plus accrued interest. The intercompany loans bear
interest at a rate of the prime lending rate of the Central Bank of West African States (currently 4.5%)
plus 2%.
In addition to assuming the obligations of ordinary shareholders to repay the Fekola SA intercompany
loans and interest prior to the payment of any ordina ry dividends, the State of Mali has also agreed to
make additional payments totaling $47 million with respect to the acquisition of the additional 10%
interest. This valuation was primarily based on the op timized Fekola Mine feasibility study filed with the
State of Mali in July 2016. The underlying valuation studies were prepared by two separate international
valuation firms, one acting for each of the Company and the State of Mali, respectively, using a
discounted cash flow methodology. The final $47 million valuation reflects the point at which the
valuation ranges prepared by the two independent valuation firms overlapped.
The $47 million obligation of the State of Mali will be set up as a loan from B2Gold to the State of Mali.
This loan will bear interest at a rate of the prime lending rate of the Central Bank of West African States
(currently 4.5%) plus 3%. The loan will be satisfied by netting it o ff against any ordinary dividends
receivable by the State of Mali for its second 10% partic ipating interest in Fekola SA until such time as
the full amount of any principal and accrued interest outstanding under the loan are extinguished.
B2Gold has developed an excellent relationship over the past four years with the Government of Mali. All
negotiations between the Company's senior represe ntatives and the Malian government ministries have
been conducted and concluded in an environment of mutual fairness, respect and transparency. B2Gold
looks forward to working with the Malian government as partners in the mutually beneficial world-class
Fekola Mine.
Fekola Mine
Fekola is B2Gold’s largest mine, representing a pproximately 45% of the Company’s projected
consolidated 2018 gold production. For the first ha lf of 2018, Fekola produced 226,786 ounces of gold,
above budget by 11% with cash operating costs (see “Non-IFRS Measures below”) of $293 per ounce,
$71 per ounce below budget, and all-in sustaining cost s (“AISC”) (see “Non-IFRS Measures below”) of
$466 per ounce, $138 per ounce below budget.
Exploration drilling at the Fekola North Extension zone indicates that the potential exists, subject to
further drilling, to significantly increase open-pit resources and reserves, north of the current Fekola open-
pit reserve. The Fekola North Extension remains open to the north. B2Gold intends to release additional
drill results in September 2018, followed by an updated mineral resource calculation in October 2018.
Based on the positive exploration results to date, th e Company’s in-house technical team is conducting
engineering and other technical studies to ascertain th e potential to expand the current Fekola Mine and
mill facilities, and increase tonnage throughput, thereby increasing annual gold production, if, as
expected, a larger open-pit resource is confirmed by the current exploration and in-fill drilling. Results of
these studies are projected to be available by year-end 2018.
About B2Gold Corp.
Headquartered in Vancouver, Canada, B2Gold Corp. is the world's new senior gold producer. Founded in
2007, today, B2Gold has five operating gold mines, and numerous exploration and development projects
in various countries including Nicaragua, the Philippin es, Namibia, Mali, Burkina Faso, Colombia and
Finland.
With the first full year of production from the large, new Fekola Mine, B2Gold is achieving
transformational growth in 2018. Consolidated gold production is forecast to be between 920,000 and
960,000 ounces, representing an increase in annual c onsolidated gold production of approximately
300,000 ounces in 2018 versus 2017. Based on current assu mptions, in 2018, consolidated cash operating
costs are projected to be between $505 and $550 per oun ce, and consolidated AISC are projected to be
between $780 and $830 per ounce.
ON BEHALF OF B2GOLD CORP.
“Clive T. Johnson”
President & Chief Executive Officer
For more information on B2Gold please visit the Company website at www.b2gold.com or contact:
Ian MacLean Katie Bromley
Vice President, Investor Relations Manage r, Investor Relations & Public Relations
604-681-8371 604-681-8371
[email protected] [email protected]
The Toronto Stock Exchange and the NYSE American LLC neither approve nor disapprove the information
contained in this news release.
Production results and production guidance presented in this news release reflect the total production at the mines
B2Gold operates on a 100% basis.
This news release includes certain “forward-looking information” and “forward-looking statements” (collectively
“forward-looking statements”) within the meaning of applicable Canadian and United States securities legislation,
including projections, outlook, guidance, forecasts, estimates and other statements regarding future financial and
operational performance, events, growth, production, mine life, revenues and cash flows, cost s, including projected
cash operating costs and AISC, capital expenditures, budgets, production estimates and guidance, including
B2Gold’s projected increase of gold production to between 920,000 and 960,000 ounces in 2018 and such reflecting
a production growth of approximately 300,000 ounces in 2018 from 2017; project-specific projections of gold
production and costs; and statements regarding anticipated exploration, drilling, developme nt, construction,
production, permitting and other activities and achievements of B2Gold, including but not limited to: the anticipated
transfer of 20% ownership of Fekola SA to the State of Mali and the resulting entitlement of the State of Mali to
annual priority dividends and ordinary dividends; the agreement by the State of Mali to make certain payments,
including the repayment of the Fekola SA intercompany loans and interest prior to the payment of any ordinary
dividends, and additional payments totaling $47 millio n; the expected structurin g of the additional payments
totaling $47 million by the State of Mali as a loan from B2Gold to the State of Mali; the potential to significantly
increase open-pit resources and reserves , north of the current Fekola open-pit reserve; the timing of the release of
exploration results and the updated resource calculation relating to the Fekola Mine; the potential to expand the
current Fekola Mine and mill facilities and increase tonnage throughput, thereby increasing annual gold production
and the results and timing of B2Gold’s study thereof; and a larger open-pit resource at the Fekola Mine being
confirmed by the current exploration and in-fill drilling. Estimates of mineral resources and reserves are also
forward-looking statements because they constitute projections regarding the amount of minerals that may be
encountered in the future and/or the anticipated economics of production, should a production decision be made. All
statements in this news release that address events or developments that we expect to occur in the future are
forward-looking statements. Forward-looking statements are statements that are not historical facts and are
generally, although not always, identified by words such as “expect”, “plan”, “anticipate”, “project”, “target”,
“potential”, “schedule”, “forecast”, “b udget”, “estimate”, “intend” or “beli eve” and similar expr essions or their
negative connotations, or that events or conditions “will”, “would”, “may”, “c ould”, “should” or “might” occur.
All such forward-looking statements are based on the opinions and estimates of management as of the date such
statements are made.
Forward-looking statements necessarily involve assumptio ns, risks and uncertainties, certain of which are beyond
B2Gold’s control, including risks associated with or related to: the volatility of metal prices and B2Gold’s common
shares; the dangers inherent in explo ration, development and mining activitie s; the uncertainty of reserve and
resource estimates; not achievi ng production, cost or othe r estimates; actual produc tion, development plans and
costs differing materially from the estimates in B2Gold’s feasibility studies; the ability to obtain and maintain any
necessary permits, consents or authorizations required for mining activities; the current ongoing instability in
Nicaragua; the uncertainty about the outcome of negotiations with the Government of Mali; environmental
regulations or hazards and compliance with complex regulations associated with mining activities; the ability to
replace mineral reserves and identify acquisition opportun ities; the unknown liabilities of companies acquired by
B2Gold; the ability to successf ully integrate new acquisiti ons; fluctuations in exchange ra tes; the availability of
financing; financing and debt activities, including potential restrictions imposed on B2Gold’s operations as a result
thereof and the ability to ge nerate sufficient cash flows ; operations in fo reign and developing countries and the
compliance with foreign laws, including those associated with operations in Mali, Namibia, the Philippines,
Nicaragua and Burkina Faso and including risks related to changes in foreign laws and changing policies related to
mining and local ownership requirements; remote operations and the availability of adequate infrastructure;
fluctuations in price and availability of energy and other inputs necessary for mining operations; shortages or cost
increases in necessary equipment, supplies and labour; regulatory, political and country risks, including local
instability or acts of terrorism and the effects thereof; th e reliance upon contractors, third parties and joint venture
partners; the lack of sole decision-making authority related to Filminera Resources Corporation, which owns the
Masbate Project; challenges to title or surface rights; the dependence on key personnel and the ability to attract and
retain skilled personnel; the risk of an uninsurable or uninsured loss; adverse climate and weather conditions;
litigation risk; competition with other mining companies; changes in tax laws; community support for B2Gold’s
operations, including risks related to strikes and the haltin g of such operations from time to time; conflicts with
small scale miners; failures of information systems or information security threats; the final outcome of the audit by
the Philippines Department of Environment and Natural Resources in relation to the Masbate Project; the ability to
maintain adequate internal controls over financial reporting as required by law, including Section 404 of the
Sarbanes-Oxley Act; compliance with anti-corruption laws; as well as other factors identified and as described in
more detail under the heading “Risk Factors” in B2Gold’s most recent Annual Information Form, B2Gold’s current
Form 40-F Annual Report and B2Gold’s other filings with Canadian securities regulators and the U.S. Securities
and Exchange Commission (the “SEC”), which may be viewed at www.sedar.com and www.sec.gov, respectively
(the “Websites”). The list is not exhaustive of the factor s that may affect B2Gold’s forward-looking statements.
There can be no assurance that such statements will pro ve to be accurate, and actual results, performance or
achievements could differ materially from those expresse d in, or implied by, these forward-looking statements.
Accordingly, no assurance can be given that any events anticipated by the forward-looking statements will transpire
or occur, or if any of them do, what benefits or liabilitie s B2Gold will derive therefrom. B2Gold’s forward-looking
statements reflect current expectations regarding future events and operating performance and speak only as of the
date hereof and B2Gold does not assume any obligation to update forward-looking statements if circumstances or
management’s beliefs, expectations or opinions should change other than as required by applicable law.
B2Gold’s forward-looking statements are based on the applicable assumptions and factors management considers
reasonable as of the date hereof, based on the information available to management at such time. These
assumptions and factors include, but are not limited to, assumptions and factors related to B2Gold’s ability to carry
on current and future operations, including: development and exploration activities; the timing, extent, duration and
economic viability of such operations, including any minera l resources or reserves identified thereby; the accuracy
and reliability of estimates, projections, forecasts, studies and assessments; B2Gold’s ability to meet or achieve
estimates, projections and forecasts; th e availability and cost of inputs; the price and market for outputs, including
gold; the timely receipt of necessary approvals or permits ; the ability to meet current and future ob ligations; the
ability to obtain timely financing on reasonable terms when required; the current and future social, economic and
political conditions; and other assumptions and factors generally associated with the mining industry. For the
reasons set forth above, undue reliance should not be placed on forward-looking statements.
Non-IFRS Measures
This news release includes certain terms or performance measures commonly used in the mining industry that are
not defined under International Financial Reporting Standards (“IFRS”), including “cash operating costs” and
“all-in sustaining costs” (or “AISC”). Non-IFRS measures do not have any standardized meaning prescribed under
IFRS, and therefore they may not be comparable to similar measures employed by other companies. The data
presented is intended to provide additional information and sh ould not be considered in isolation or as a substitute
for measures of performance prepared in accordance with IFRS and should be read in conjunction with B2Gold’s
consolidated financial statements. Readers should refer to B2Gold’s management discussion and analysis, available
on the Websites, under the heading “Non-IFRS Measures” for a more detailed discussion of how B2Gold calculates
certain measures and reconciliation of certain measures to IFRS terms.
Cautionary Note to United States Investors
The disclosure in this news release was prepared in accordance with Canadian National Instrument 43-101 (“NI
43-101”), which differs significantly from the requirements of the SEC set out in Industry Guide 7. Accordingly,
such disclosure may not be comparable to similar inform ation made public by companies that report in accordance
with U.S. standards. In particular, this news release may refer to “mineral resources” or “inferred mineral
resources”. While these categories of mineralization are recognized and required by Canadian securities laws, they
are not recognized by the SEC and are not normally permitted to be disclosed in SEC filings by U.S. companies.
U.S. investors are cautioned not to assume that any part of a “mineral resource” or “inferred mineral resource”
will ever be converted into a “reserve.” In additio n, “reserves” reported by the Company under Canadian
standards may not qualify as reserves under SEC standar ds. Under SEC standards, mineralization may not be
classified as a “reserve” unless the mineralization can be economically and legally extracted or produced at the
time the “reserve” determination is made. Accordingly, information contained or referenced in this news release
containing descriptions of the Company’s mineral deposits may not be compatible to similar information made
public by U.S. companies subject to the reporting and disclo sure requirements of U.S. federal securities laws, rules
and regulations. “Inferred mineral resources” have a great amount of uncertainty as to their existence and great
uncertainty as to their economic and legal feasibility. It cannot be assumed that all or any part of an inferred
mineral resource will ever be upgraded to a higher cate gory. Disclosure of “containe d ounces” in a resource is
permitted disclosure under Canadian re porting standards; however, the SEC no rmally only permits issuers to
report mineralization that does not constitute “reserves” by SEC standards as in-place tonnage and grade without
reference to unit measures. Historical results or feasibility models presented herein are not guarantees or
expectations of future performance.