B2Gold Corp. Reports Strong First Quarter 2017 Results Exceeding its Budget Guidance; Fekola Project Mine Construction Remains on Target for an
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News Release
B2Gold Corp. Reports Strong First Quarter 2017 Results Exceeding its Budget Guidance;
Fekola Project Mine Construction Remains on Target for an October 1, 2017 Production Start
Vancouver, May 3, 2017 – B2Gold Corp. (TSX: BTO, NYSE MKT: BTG, NSX: B2G) (“B2Gold” or
the “Company”) is pleased to announce its operational a nd financial results for the first quarter of 2017.
The Company previously released its gold productio n and gold revenue for the first quarter of 2017 ( see
news release dated 04/19/17). All dollar figures are in United States dollars unless otherwise indicated.
2017 First Quarter Highlights
• Consolidated gold production of 132,736 ounces, 6% (or 7,955 ounces) above budget and 4% (or
4,892 ounces) higher than the same period in 2016
• Consolidated gold revenue of $146.3 million on sales of 119,937 ounces at an average price of $1,219
per ounce
• Consolidated cash operating costs (see “Non-IFRS Measures”) of $564 per ounce, $80 per ounce (or
12%) below budget
• Consolidated all-in sustaining costs (“AISC”) (see “Non-IFRS Measures”) of $889 per ounce, $262
per ounce (or 23%) below budget
• Cash flow from operating activities (after non-cash working capital changes) of $39.6 million ($0.04
per share)
• Strong cash position of $103.2 million at quarter-end
• Company is on track to meet its 2017 annual guidance of between 545,000 to 595,000 ounces of gold
production
• Fekola Project mine construction remains 3 months ahead of schedule for an anticipated October 1,
2017 production start and remains on budget
• On March 29, 2017, received the 2016 Award for “Friend of the Environment” and the 2016 Award
for “Exporter of the Year” in Nicaragua
2017 First Quarter Operational Results
Consolidated gold production in the first quarter of 2017 was 132,736 oun ces, 6% (or 7,955 ounces)
above budget and 4% (or 4, 892 ounces) higher than the first quart er of 2016. Gold production from the
Company’s Masbate, Otjikoto and La Libertad mines all exceeded expectations. The Otjikoto Mine had a
very strong start to the year with first quarter gold production of 42,774 ounces, significantly above
budget by 20% (or 7,082 ounces) and also 20% (or 7,07 1 ounces) greater than the first quarter of 2016.
The Masbate Mine also continued its very stro ng operational performance producing 52,562 ounces of
gold, 5% (or 2,569 ounces) above budget and comparable with the prior-year quarter.
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Consolidated cash operating costs in the quarter were $564 per ounce, $80 per ounce (or 12%) below
budget. This was mainly the result of higher-than- budgeted gold production combined with lower-than-
budgeted operating costs (see “Operations” section be low). Consolidated cash operating costs in the
quarter were $65 per ounce higher compared with the fi rst quarter of 2016, as the prior-year quarter had
benefited from lower fuel prices and a significantly w eaker Namibian dollar/US dollar foreign exchange
rate.
Consolidated AISC in the quarter were $889 pe r ounce, $262 per ounce (or 23%) below budget and
comparable with the prior-year quarter. The favourable variance against budget reflects the lower cash
operating costs per ounce as well as lower-than-budgete d sustaining capital expenditures (mainly due to
the timing of equipment purchases at Masbate and lower pre-stripping costs at Otjikoto).
For full-year 2017, B2Gold is projecting another y ear of growth with consolidated gold production
expected to be in the range of between 545,000 a nd 595,000 ounces (including estimated pre-commercial
production from Fekola of between 45,000 and 55,000 oun ces). Consolidated cash operating costs are
expected to be between $610 and $650 per ounce and consolidated AISC are expected to be between
$940 and $970 per ounce. In comparison to 2016, 2017 forecast sustaining capital expenditures are
anomalously high as a result of Masbate’s planned mining fleet replacement/expansion and anticipated
higher average strip ratios at Otjikoto (which are expected to be lower in 2018 and 2019).
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 signifi cantly and to be between 900,000 and 950,000 ounces.
The Fekola Project is expected to be a large lo w-cost producer and should enable the Company to
significantly reduce its forecast longer term cash operating costs per ounce and AISC per ounce. 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 comparab le 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).
2017 First Quarter Financial Results
Consolidated gold revenue in the first quarter of 2017 was $146.3 million on sales of 119,937 ounces at
an average price of $1,219 per ounce compared to $144.3 million on sales of 120,899 ounces at an
average price of $1,193 per ounce in the first quart er of 2016. The 1% increase in gold revenue was
mainly attributable to a 2% increase in the average realized gold price, partially offset by a 1% decrease
in gold sales volume. The decrease in gold sales volume was due to the timing of gold shipments.
Consolidated gold revenue in the first quarter of 2017 included $15.0 million related to the delivery of
gold into the Company’s prepaid sales contracts (d eferred revenue) associated with the Company’s
prepaid sales transactions entered into in March 2016. During the quarter, 12,908 ounces of gold were
delivered under these contracts.
In the first quarter of 2017, as expected, the Co mpany’s cash flow from operating activities (after non-
cash working capital changes) was $39.6 million ($0.04 per share) compared with $171.6 million ($0.19
per share) in the first quarter of 2016. Operating cash flows in the prior-year quarter were higher mainly
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due to the Company’s Prepaid Sales transactions in March 2016 of $120 million and to non-cash working
capital adjustments. Non-cash working capital chang es in the current quarter were negative $17.0 million
compared with negative $6.1 million in the first quart er of 2016. The main changes in non-cash working
capital in the quarter related to a $7.5 million in crease in inventory as a result of higher gold bullion
inventory balances at all mine sites (due to the timing of gold shipments) and a $6.3 million decrease in
taxes payable. In 2018, the Company’s cash flows fro m operations are forecast to significantly increase
with the first full-year of production from Fekola.
Adjusted net income (see “Non-IFRS Measures”) w as $19.4 million ($0.02 per share) in the quarter
compared to $18.9 million ($0.02 per share) in the prio r-year quarter. Adjusted net income in the first
quarter of 2017 mainly excluded various unrealized ma rk-to-market adjustments (totaling a net loss of
$19.8 million). The Company generated a net loss of $4.6 million (negative $0.01 per share) in the quarter
compared to net income of $6.7 million ($0.01 per share) in the same quarter last year.
Liquidity and Capital Resources
At March 31, 2017 the Company had cash and cash e quivalents of $103.2 million compared to cash and
cash equivalents of $144.7 million at December 31, 2016. Working capital at March 31, 2017 was $62.1
million compared to working capital of $101.0 million at December 31, 2016. In addition, the Company
had $150 million of undrawn capac ity on its $350 million revolving cr edit facility (“RCF”). On March
14, 2017, the Company received a binding letter of commitment from the Canadian Imperial Bank of
Commerce to participate in its RCF. Upon completion of loan documentation, the aggregate amount of
the RCF will be increased from $350 million to $425 million. The Company also has a Euro 71.4 million
term Fekola equipment loan facility with Caterpilla r Financial SARL of whic h Euro 46.7 million was
available for future drawdowns at quarter-end. The Company believes that this liquidity coupled with
continued strong operating cash flows from its existin g mine operations, will provi de adequate resources
both to maintain operations and fund the constructi on 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 e quity 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 prospectus supplement filed under its
base shelf prospectus and registration statement (the “ATM Offering”). The ATM Offering runs until the
earlier of (i) common shares with aggregate gross proceeds of $100 million being 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 issu ed 14.8 million common shares for net proceeds of
$44.2 million, under the ATM Offering. No common sh ares were issued under the ATM Agreement in
the first quarter of 2017.
Operations
Mine-by-mine gold production in the first quarter of 2017 was as follows:
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Mine
Q1 2017
Gold Production
(ounces)
2017
Guidance
(ounces)
Masbate 52,562 175,000 – 185,000
Otjikoto 42,774 165,000 – 175,000
La Libertad 28,539 110,000 – 120,000
El Limon 8,861 50,000 – 60,000
Subtotal 132,736 500,000 – 540,000
Fekola (pre-commercial) - 45,000 – 55,000
B2Gold Consolidated 132,736 545,000 – 595,000
Mine-by-mine cash operating costs and AISC per ounce in the first quarter of 2017 were as follows:
Mine
Q1 2017
Cash
Operating
Costs
($ per ounce)
2017
Guidance
($ per ounce)
Q1 2017
AISC
($ per ounce)
2017
Guidance
($ per ounce)
Masbate $524 $690 - $730 $808 $1,020 - $1,050
Otjikoto $413 $510 - $550 $771 $855 - $885
La Libertad $728 $625 - $665 $866 $785 - $815
El Limon $994 $655 - $695 $1,572 $1,065 - $1,095
Subtotal $564 $615 - $655 $889 $ 960 - $990
Fekola (pre-
commercial) - $580 - $620 - $700 - $730
B2Gold
Consolidated $564 $610 - $650 $889 $940 - $970
Masbate Gold Mine - Philippines
The Masbate Mine in the Philippines continued its ve ry strong operational performance into the first
quarter of 2017 producing 52,562 ounces of gold, 5% (or 2,569 ounces) above budget and comparable
with the prior-year quarter. Gold production improved against budget mainly due to higher-than-expected
throughput and recoveries mainly driven by highe r-than-budgeted oxide ore from the Colorado Pit. As
mining advances in the Colorado Pit, the trend of mo re oxide ore than modelled has continued. As a
result, oxide feed material accounted for 42% of the to tal milled tonnes in the quarter compared to budget
of 20% (with the remaining amount consisting of tr ansitional to sulfide material). The higher mill
recoveries in the quarter also reflected the ongoing benefits from the recent CIL circuit upgrade, tracking
slightly ahead of expectations. The Masbate Mine also continued its strong safety performance, extending
the number of days without a “Lost-Time-Injury” to 535 days at the end of the first quarter of 2017.
Mill throughput in the quarter was 1,704,001 tonn es compared to budget of 1,645,473 tonnes and
1,785,891 tonnes in the first quarter of 2016. Mill throughput exceeded budget as a result of the softer ore
conditions (due to the higher-tha n-budgeted oxide blend) and a re duction in planned downtime. In
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February, a planned plant maintenance shutdown was co mpleted more quickly than anticipated (in 8 days
instead of the estimated 10 days). Mill throughput w as lower compared with the prior-year quarter as a
result of the February maintenance shutdown. Mill recoveries averaged 74.8% which was better than
budget of 73.3% and 72.9% in the first quarter of 2 016. The improved recoveries in the quarter reflect
both the higher-than-budgeted oxide blend and the bene fit of the process improvements as part of the
Masbate plant upgrade which came on line on June 29, 2016. The average grade processed was 1.28 g/t,
comparable to budget and slightly higher compared to 1.26 g/t in the first quarter of 2016.
Masbate’s first quarter cash operating costs were $524 per ounce, significantly below budget by $110 per
ounce (or 17%). This was mainly the result of both higher-than-budgeted gold production and lower-than-
budgeted operating costs. Operating costs in the quart er benefited from higher silver by-product credits
and lower maintenance costs and stockpile adjustment s (as compared to budget). Masbate’s first quarter
cash operating costs were $68 per ounce higher compared with the first quarter of 2016 (but substantially
below budget), mainly as a result of higher fuel prices and maintenance costs (attributable to the February
2017 maintenance shutdown). AISC in the quarter were $808 per ounce compared to budget of $1,127 per
ounce and $638 per ounce in the prior-year quarter. AISC were below budget as a result of lower cash
operating costs and sustaining capital expenditures due to the timing of mobile equipment purchases
which are now expected to occur later in 2017.
Capital expenditures in the first qua rter of 2017 totaled $15.0 million wh ich mainly consisted of mobile
equipment costs of $6.6 million, deferred stripping costs of $2.7 million, power plant upgrades of $2.4
million and processing plant upgrades of $0.9 million.
For full-year 2017, the Masbate Mine is forecast to produce between 175,000 to 185,000 ounces of gold
at cash operating costs of between $690 to $730 per ounce and AISC of between $1,020 and $1,050 per
ounce. Masbate’s forecast 2017 AISC includes the planned mine fleet replacement and expansion costs.
Since the new fleet will commence utilization in 2017, all of the related equipment purchase costs have
been included in Masbate’s 2017 forecast AISC (even though the equipment will benefit Masbate
operations in future years as well). Masbate’s mi ne equipment purchases are planned to significantly
decrease in 2018.
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 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 the Company’ s previous disclosures. The Company provided a
comprehensive response to the findings and recommenda tions in the audit, which the Company believes
addresses the issues raised. As repor ted by the Company on February 2, 2017, the DENR has announced
further results of its mining audit and the Masb ate 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 continues to work closely with the DENR to maintain compliance
with regulations and continues 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
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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 Gold Mine - Namibia
The Otjikoto Mine in Namibia also had a very strong start to the year with first quarter gold production of
42,774 ounces, significantly above budget by 20% (o r 7,082 ounces) and also 20% (or 7,071 ounces)
greater than the first quarter of 2016. The increase over both budget and the prior-year quarter was mainly
due to better-than-expected grade and ore tonnage fr om the new Wolfshag Phase 1 Pit and increased high
grade ore tonnage from the bottom of the Otjikot o Phase 1 Pit, accompanied by smaller gains from
improved plant performance.
The average grade processed in the quarter was 1.62 g/t, compared to budget of 1.39 g/t and 1.37 g/t in
the first quarter of 2016. To date there has been a positive reconciliation in te rms of both grade and ore
tonnage from the oxide portion of the Wolfshag Phase 1 Pit versus the resource model. As a result,
processed ore from Wolfshag was approximately 230,000 tonnes at a grade of 1.90 g/t versus a budget of
84,000 tonnes at a grade of 1.41 g/t. In addition, high grade ore from the bottom of the Otjikoto Phase 1
Pit (carried over from the fourth quarter of 2016 and into the first quarter of 2017, both from stockpiles
and pit production) also exceeded expectations. Processed high grade ore from the Otjikoto Phase 1 Pit
was approximately 380,000 tonnes at a grade of 1.90 g/t versus a budget of 355,000 tonnes at a grade of
1.70 g/t. The Otjikoto Phase 1 Pit was completed by mid-January. Mill throughput for the quarter was
832,805 tonnes compared to a budget of 814,680 tonnes and 822,602 tonnes in the first quarter of 2016.
Mill recoveries remained high and averaged 98.6%, ex ceeding the budget of 98.0% and 98.5% in the first
quarter of 2016.
Otjikoto’s first quarter cash operating costs were $413 per ounce, significantly below budget by $121 per
ounce (or 23%). This was mainly the result of higher-than-budgeted gold production combined with
lower-than-budgeted fuel prices, fuel/r eagent consumption and labour cost s. Otjikoto’s first quarter cash
operating costs were $32 per ounce higher compared w ith the first quarter of 2016, as the prior-year
quarter had benefited from a significantly weaker Nami bian dollar/US dollar foreign exchange rate and
lower fuel prices. AISC in the quarter were $771 per ounce, below both budge t of $1,049 per ounce and
$835 per ounce in the prior-year quarter reflecti ng lower cash operating costs and sustaining capital
expenditures. Pre-stripping costs in the quarter we re $1.8 million below budget mainly due to lower-than-
expected mining costs and strip ratios.
Capital expenditures in the first quarter of 2017 totaled $12.6 million and included $6.5 million for
deferred stripping and $4.4 million for mobile equipment.
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, a nd design studies are completed, expected at the
end of the third quarter of 2017. Studies are ongoing to determine the optimum interface between open pit
and underground mining to maximize project economics.
For full-year 2017, the Otjikoto Mine is forecast to produce between 165,000 and 175,000 ounces of gold
at cash operating costs of between $510 and $550 pe r ounce. Forecast gold production at Otjikoto is
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expected to be weighted towards the second-half of the year as Wolfshag Phase 1 and Otjikoto Phase 2
pits reach higher grade and lower st rip ratio benches. Otjikoto’s forecast 2017 AISC are expected to be
between $855 and $885 per ounce, refl ecting higher projected strip ratios at the new Otjikoto Phase 2 and
Wolfshag Phase 1 pits. The average strip ratios at Otjikoto are expected to be lower in 2018 and 2019.
La Libertad Gold Mine - Nicaragua
Gold production at La Libertad Mine in Nicaragua was 28,539 ounces in the first quarter of 2017, slightly
above budget (by 550 ounces) and comparable with th e prior-year quarter. Mill throughput, recoveries
and processed grade were all slightly above budget . The mill continued to operate well, processing
561,152 tonnes (Q1 2016 – 576,487 tonnes) in the quarter at an average grade of 1.67 g/t (Q1 2016 – 1.66
g/t) with gold recoveries averaging 94.5% (Q1 2016 - 94.7%). The Jabali Central open pit continues to be
the primary source of ore for La Libertad, as Mojon Underground continues to ramp up.
Resettlement and permitting activities continue at th e high grade Jabali Antenna Pit. However, the
Company has recently changed its planned sequencing for bringing the Jabali Antenna Pit into the mine
plan (originally forecast to enter the production stream in the third quarter of 2017). Given the delays in
resettlement at Jabali Antenna (which have been ou t of the Company’s control), the Company is now
focused on bringing the San Juan Pit into production earlier than planned and ahead of Jabali Antenna. An
internal study was recently completed that deemed San Juan to be a viable open pit operation. As a result,
mine plans for San Juan have been reconfigured fo r open pit mining, allowing it to advance to production
as early as the third quarter of 2017 (subject to the r eceipt of mine permits). Development and related
permitting activities also continue for other areas. Road access to a small pit, El Salto, located west of
Mojon, is currently under construction. Work continues on permitting for an additional small pit in the El
Tope area which the Company anticipates will be ava ilable in the third quarter of 2017. Jabali Antenna
underground development is also underway with the portal established and the ramp work now
advancing. Permitting for the western area of this mine is now in process.
La Libertad’s cash operating costs were $728 per ounce in the first quarter of 2017, approximately in-line
with budget. Cash operating costs were $105 per ounce hi gher compared with the first quarter of 2016, as
the prior-year quarter had benefited from lower mining costs mainly attributable to the Los Angeles Pit
(which had shorter haul distances to the mill/landfills and a lower strip ratio than compared to Jabali
Central). The Los Angeles Pit was completed in April 2016. However, for the full-year 2017, La
Libertad’s cash operating costs are forecast to be between $625 and $665 per ounce and be comparable to
its 2016 annual cash operating costs (of $659 per ounce). AISC in the quarter were $866 per ounce
compared to budget of $952 per ounce and $1,043 per ounce in the prior year quarter. The lower than
budgeted AISC mainly resulted from the timing of sust aining capital expenditures which are expected to
occur later in 2017.
Total capital expenditures in the first quarter of 2017 were $3.6 million, mainly consisting of La
Esperanza Tailings Dam expansion of $2.2 million and deferred development costs of $0.9 million.
On March 29, 2017, the Company was presented with 2 awards from the Association of Producers and
Exporters of Nicaragua with respect to its La Libertad operations. The Company received the 2016 Award
for “Friend of the Environment”, related to environmental stewards hip in water management, and the
2016 Award for “Exporter of the Year”, for being the largest single exporting company in Nicaragua.
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For full-year 2017, La Libertad Mine is forecast to produce between 110,000 and 120,000 ounces of gold
at cash operating costs of between $625 and $665 per ounce and AISC of between $785 and $815 per
ounce.
El Limon Gold Mine - Nicaragua
El Limon Mine in Nicaragua continued to underperform in the first quarter with gold production of 8,861
ounces, 2,246 ounces below budget and 1, 355 ounces lower than the same quarter last year. The primary
cause of the shortfall was lower pr ocessed grade which was 2.41 g/t versus a budget of 2.99 g/t and 2.92
g/t in the first quarter of 2016. El Limon’s productio n continued to be negativel y affected by mine fleet
availability limitations and water control issues wh ich reduced high grade ore flow from Santa Pancha
Underground. As a result, mill feed was supplemented with smaller volumes of lower grade ore recovered
from surface stockpiles and purchased (small miner) high grade ore. To improve overall mine
performance, additional mining equipment has been purchased and delivered, and the mine development
contractor has accelerated operations. For Santa Pa ncha 1 Mine, the deep well is being reamed and
relined, and is expected to be operational in Ma y 2017. The auxiliary dewatering system has been
improved but the deep well is essential in order to develop the higher grade stopes. Tonnage milled for
the quarter was 122,856 tonnes compared to budget of 123,701 tonnes and 116,481 tonnes in the first
quarter of 2016. Mill recoveries averaged 92.9% co mpared to budget of 93.5% and 93.6% in the first
quarter of 2016.
Surface development for the Mercedes Pit is advanc ing, and the Environmental Impact Assessment
(“EIA”) is ready for submission. The EIA for Veta Nueva, the next underground mine, is also ready for
submission. An underground contractor has been selected and surface preparations started.
El Limon’s cash operating costs were $994 per ounce in the first quarter of 2017, $112 per ounce higher
than budget and $219 per ounce higher than the prior-year quarter. The increase was mainly attributable
to the limited access to higher grade ore at Santa Pa ncha Underground. AISC in the quarter were $1,572
per ounce compared to budget of $1,459 per ounce and $1,127 per ounce in the prior-year quarter.
Capital expenditures in the first quarter of 2017 totaled $3.3 million which consisted mainly of
underground development costs for Santa Pancha of $1.9 million and mobile equipment costs of $0.7
million. The Company has a $5 million exploration budget for El Limon in 2017 and to date exploration
drilling results have been encouraging around El Limon.
For full-year 2017, El Limon is expected to produ ce between 50,000 and 60,000 ounces of gold at cash
operating costs of between $655 and $695 per ounce a nd AISC between $1,065 and $1,095 per ounce. As
a result of the operational improvements being impl emented (as discussed above), the Company believes
that El Limon Mine remains on track to meet its full-year 2017 production guidance.
Development
Fekola Development Project - Mali