B2Gold Corp. Reports Record 2016 Gold Production; Fekola project mine construction ahead of schedule & now on target for an October 2017 production start
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News Release
B2Gold Corp. Reports Record 2016 Gold Production;
Fekola project mine construction ahead of schedule & now on target for an October 2017 production start
Vancouver, February 5, 2017 – B2Gold Corp. (TSX: BTO, NYSE MK T: BTG, NSX: B2G) (“B2Gold”
or the “Company”) is pleased to announce fourth qu arter and full-year 2016 gold production and revenue
as well as production and cash cost guidance for 2017. 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
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
Fekola project mine construction is ahead of sch edule for an October 2017 production start and
remains on budget
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 produc tion 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
Full-year consolidated cash operating costs are expect ed to be near the low end of the reduced cost
guidance range of between $500 and $535 per ounce (initial guida nce range was between $560 and
$595 per ounce)
Full-year AISC are expected to be near the low end of the reduced guidance range of between $780
and $810 per ounce (initial guidance range was between $895 and $925 per ounce)
Signed a Euro 71.4 million Equipment Facility w ith Caterpillar Financial SARL for the Fekola
project (funding subject to satisfaction of conditions precedent)
Additional positive exploration drill results re ported 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, forecast cash operating costs of between $610 and $650 per ounce and forecast AISC
of between $940 and $970 per ounce (including expected Fekola pre-commercial production of
between 45,000 and 55,000 ounces)
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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 950,00 0 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 Operating Results
B2Gold achieved another record year of consolidat ed gold production in 2016 (for the eighth straight
year) producing 550,423 ounces of gold, near the mi d-point of its revised production guidance range (of
535,000 to 575,000 ounces) and su rpassing 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 performance s from the Company’s Masbate and Otjikoto mines,
both setting new annual production records in 2016. Th e Company’s La Libertad Mine also met its
production guidance, with 2016 production near the high end of its production guidance range.
The Company’s 2016 year-end consolidated financia l statements will be re leased on March 16, 2017.
Details of the consolidated cash operating costs per ounce and all-in sustaining costs (“AISC”) per ounce
will also be released at that time. However, the Co mpany expects its full-year consolidated cash operating
costs per ounce to be near the low end of its revised cost guidance range of between $500 and $535 per
ounce (reduced from the original guidance range of $560 to $595 per ounce). Full-year consolidated
AISC per ounce are also expected to be near the lo w end of its revised cost guidance range of between
$780 and $810 per ounce (reduced from the original guidance range of $895 to $925 per ounce).
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.
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
Updated
Guidance (ounces)
2016
Original Guidance
(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
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 guidan ce range (of 200,000 to
210,000 ounces) and significantly exceeding its initia l guidance range (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 ach ieve 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.
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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 optim ize 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 commenci ng site preparations for later Main Vein stages. In addition, the
lower grade (but higher recovery) Colorado pit ore w as prioritized as mill feed ahead of the higher grade
Main Vein ore, largely due to the higher than b udgeted 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 planned to be
processed in 2017.
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 gui dance range (of 160,000 to 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 a quart erly record 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, La Libertad Mine in Nicara gua produced 132,431 ounces of gold, near the high
end of its production guidance range (of 125,000 to 135,000 ounces) a nd 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 thir d quarter of 2017, pending comple tion of permitting and relocation
activities. In the fourth quarter of 2016, gold produc tion at La Libertad was 35,165 ounces, consistent
with the fourth quarter of 2015.
For the full-year 2016, El Limon Mine in Nicar agua 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 pr oduction at Limon was 10,007 ounces (Q4 2015 – 8,903
ounces). In 2016, Limon’s production was negatively a ffected by mine fleet availability limitations and
water control issues which reduced ore flow from Sant a Pancha. As a result, mill feed was supplemented
with lower grade ore from surface stockpiles. To im prove overall mine performance, the operations and
maintenance areas have been reorganized and a dditional mining equipment has been purchased. The
underground pumping system has also been overhaule d and the dewatering wells are currently being
improved.
2016 Gold Revenue
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 oun ces (or 499,651 ounces
including 18,466 ounces of pre-commercial sales from Otji koto) at an average price of $1,151 per ounce
in 2015. The 23% (or $129.6 million) increase in annua l gold revenue was mainly attributable to a 14%
increase in gold sales volume and a 8% increase in the average realized gold price.
Consolidated gold revenue in the fourth quarter of 2016 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. The 30% (or $42.2 million) increase in
gold revenue was mainly attributable to a 19% increase in gold sales volume and a 10% increase in the
average realized gold price.
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Production Outlook and Cost Guidance
For 2017, B2Gold is projecting another solid year with consolidated gold production expected to be in the
range of between 545,000 and 595,000 ounces (inc luding 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 ahead of schedule and is plan ning for an October 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-ter m 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 ( 2016 revised guidance range was between $500 and
$535 per ounce). The expected increase 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-commerc ial production period) are expected to be between
$940 and $970 per ounce (2016 revised guidance range was $780 to $810 per ounce). The expected
increase reflects higher anticipated cash operating co sts per ounce as well as higher expected capitalized
pre-stripping costs and other capital expenditures. In 2017, forecast sustaining capital expenditures are
anomalously high as a result of Masbate’s planned fleet replacement and expansion (see “Masbate Mine -
Philippines” section below) and higher average strip ratio s at Otjikoto which are expected to decline in
2018 and 2019.
For 2018, with the planned firs t full-year of production from th e Fekola project (based on current
assumptions and updates to the Company’s long-term mi ne 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 cost guidance ranges (of $500 to $535 per ounce for cash
operating costs and $780 to $810 per ounce for AISC).
Mine-by-mine 2017 ranges for forecast gold production, cash operating costs per ounce and AISC per
ounce are as follows:
2017 Forecast
Gold Production
(ounces)
2017 Forecast
Cash Operating
Costs
($ per ounce)
2017 Forecast
AISC
($ 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) 545,000 – 595,000 $610 - $650 $940 - $970
(1) Fekola’s 2017 forecasts include estimated gold production and operating costs during the pre-
commercial production period. For accounting pu rposes, Fekola’s revenue and cash operating
costs during the pre-commercia l production period will be capita lized to mineral property
development costs. For 2018, with the planne d first full-year of production from the Fekola
project, Fekola’s gold production is expected to be approximately 375,000 to 400,000 ounces.
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(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 in October
2017 combined with lower expected average strip ratios in the second-half. 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 pro duction, lower expected average strip ratios, and
lower capital expenditures in the second-half.
Masbate Mine, Philippines
For the Masbate Mine, 2017 gold production is exp ected to be between 175,000 and 185,000 ounces.
Masbate’s 2016 production had benefited from better-tha n-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. 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 $1,0 50 per ounce. The expected increase over 2016 reflects
higher anticipated cash operating costs per ounce, highe r 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 add ition, 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 re lated purchase costs have been included in Masbate’s
2017 AISC (sustaining costs) even though the equipmen t 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.
In 2017, the Masbate Mine is budgeted to process an average of 18,630 tonnes of ore per day for a total of
6.8 million tonnes of ore for the year. Gold grades pr ocessed are expected to average 1.13 g/t and gold
recoveries are anticipated to average 71.4%. Mill feed is budgeted to consist of 78% transitional/fresh ore
and 22% oxide ore. Mining activity is expected to focus on the continued development of the newly
widened Colorado pit, development of Main Vein St age 3 pit and continued operations in Main Vein
Stage 2 pit. The Main Vein Stage 1 pit has now been completed.
Sustaining capital costs in 2017 at the Masbate Mine are budgeted to total $39.5 million, including $25.4
million for new mining equipment (consisting of $18 million for fleet replacement and $7.4 million to
expand the mining fleet) and pre-stripping costs ($4.6 million) in Main Vein Stage 3 pit/Colorado pit. The
Company expects approximately $20 million of the M asbate fleet replacement and expansion purchases
to be lease financed. Non-sustai ning capital costs are budgeted to total $18 million, primarily for the
powerhouse generator ($7.7 million) for the Masbate tank project and land purchases ($7.2 million).
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 progr am 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.
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As previously reported by the Company on September 27, 2016, October 18, 2016 and in its MD&A for
the period ended September 30, 2016, the Philippine Department of Environment and Natural Resources
(the “DENR”) announced the preliminary results of mini ng audits carried out by the DENR in respect of
all metallic mines in the Philippines and issued the Ma sbate 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 th e audit, which the Company believes addresses the
issues raised. As reported by the Company on February 2, 2017, the DENR has announced the results of
its mining audit and the Masbate Mine is not among th e mines announced to be suspended or closed. The
Company will continue to work cl osely with the DENR to maintain compliance with regulations and
continue to promote improved quality of life in th e 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 Mi ne 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 cost s 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 additi on, fuel prices are also projected to be higher than
2016. The average strip ratios at Otjikoto are expected to decrease in 2018 and 2019. AISC are expected
to be between $855 and $885 per ou nce in 2017, reflecting higher expected cash operating costs per
ounce and capital expenditures.
The Otjikoto Mine is projected to process 3.3 million tonnes of ore in 2017, with an average grade of 1.59
g/t and recovery of 98%. Mill feed is expected to consist of high grade ore from the Otjikoto Phase 2 pit
(35%) and Wolfshag Phase 1 pit (25%). High and medium grade stockpile ore is expected to account for
the remainder of the mill feed (40%), as the Otjikoto Phase 2 pit is developed.
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.
For 2017, sustaining capital costs at the Otjikoto Mine are estimated to be $37.1 million, including $15
million for capitalized pre-stripping costs, $10.4 million for mine fleet additions, and $6 million for major
equipment rebuilds. The Company expects $10 million of the Otjikoto mine fleet expansion purchases to
be lease financed. To advance strippi ng at both the Otjikoto and Wolfshag pits the mining fleet will be
increased by an additional 250-tonne excavator along with additional haul trucks and support equipment.
Non-sustaining capital costs are budgeted to be $12 .7 million which includes $8.5 million for phase one
of the construction of a solar power plant. The solar power plant is expected to reduce fuel consumption
and protect against rising oil prices.
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 me tres 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 a pproximately 50% of drilled width) drilled in hole
ON-16-96. An additional 5,000 metres of diamond a nd RC drilling are committed to new targets in and
around the Otjikoto area.
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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 ope rating 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 while th e Jabali Antena permitting a nd relocation activities are
being completed. La Libertad’s cash operating costs pe r 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).
In 2017, La Libertad is budgeted to process 2.3 million tonnes of ore at an average grade of 1.73 g/t with
gold recoveries averaging 94%. Mill feed is expected to consist mainly of high grade ore from Jabali
Central pit (37%), Mojon undergro und (8%), and Jabali Antenna pit (5 %), which will be blended with
lower grade spent ore (50%). Jabali West underground mine development is expected to commence in
2017, with production expected to commence in 2018.
Sustaining capital costs for La Libertad are planne d to total $3.6 million, including Mojon underground
mine development ($1.2 million). Non-sustaining capital costs are budgeted to total $23 million,
including underground development/infrastructure at San Juan and Jabali West ($12 million) and land
purchases/resettlement ($6.2 million).
La Libertad’s exploration budget fo r 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 regi onal targets. Most of the drilling in 2017 will be
detailed drilling related to underground mine planning.
El Limon Mine, Nicaragua
In 2017, El Limon is expected to produce betw een 50,000 and 60,000 ounces of gold (compared to
45,483 ounces produced in 2016) at cash operating cost s of between $655 and $695 per ounce. AISC are
expected to be between $1,065 and $1,095 per ounce.
El Limon Mine is budgeted to process 0.5 million tonnes of ore at an average grade of 3.58 g/t gold with
gold recoveries averaging 93.5%. Appr oximately 10% of the process ore is expected to be sourced from
the Mercedes open pit, with the remainder from unde rground operations at Santa Pancha 1 and Santa
Pancha 2.
The Company plans to undertake sustaining capital e xpenditures at El Limon totaling $9.7 million in
2017, of which $5.9 million relates to underground development at Sant a Pancha. Non-sustaining capital
costs are budgeted to total $3.3 million, primarily for underground development/infrastructure at a new
underground operation, Veta Nueva. Veta Nueva is not expected to produce ore until 2018.
The Limon exploration budget for 2017 is approximately $5 million fo r 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. Dr ill 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.
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Development update
Fekola Development Project - Mali
The Company is pleased to announce that the Fekola pr oject mine construction is ahead of schedule and
is now on target for an October 2017 production start. In addition, the Fekola project remains on budget
and expected to be completed on budget. The Fekola pr oject is expected to be a large low-cost producer
and should enable the Company to significantly redu ce its longer term cash operating costs per ounce and
AISC per ounce.
In the fourth quarter of 2016, B2Gold’s constructio n team continued to develop the Fekola project in
Mali. Significant activities during the quarter included:
• Overall the construction is approximately 60% complete;
• A total of 4,000,000 m3 of material has been moved at site;
• Construction of TSF and water embankments is 100% complete;
• Lining of the tailings facility commenced in December 2016;
• Installation of mechanical components is on-going w ith gyratory crusher, pebble crusher, conveyors,
reclaim tunnel, leach and CIP tanks. Commencement of mill installation will start in January 2017;
• Goldroom and reagent storage area construction is well underway;
• Powerhouse construction remains on schedule for a June 2016 commencement of commissioning;
• Pit pre-stripping has commenced ahead of schedule and over 800,000 m 3 of material has been
removed to date;
• Grade control for the ore zones h as commenced and the lab on site is under construction (expected to
start up in Q2, 2017);
• Commissioning team has arrived at site and begun hiring and training the mill/lab operators;
On June 11, 2015, the Company an nounced 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 li fe of mine plan approximately 276,000 ounces per
year at an average operating cash cost of $552 per ounce. The total pre-production capital costs are
estimated to be $395 million plus $67 million of antici pated mine fleet and power generator costs which
are expected to be lease financed. Sunk costs relate d to early works (including access roads, construction
aggregate stockpiling, airstrip construction, and land clearing) of approximately $41 million are not
included in the total pre-production capital estimate.
On June 29, 2016, the Company announced an explor ation update for its Fekola project. Based on the
positive drill results to date (at both near surfa ce and underground below the main Fekola pit) and
exploration potential, the Company is expanding th e 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 include d 5 million tonnes per year assumptions for plant
design, general infrastructure and tailings dam desi gn 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 or iginally 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 milli on expansion budget for additional ite ms including a pebble crusher,
one additional leach tank and an add itional generator. With this additi onal capital investment, the Fekola
mill expansion is expected to be completed in the fourth quarter of 2017 and commissioned in
conjunction with the main plant commissioning.