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
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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 MK T: BTG, NSX: B2G) (“B2Gold”
or the “Company”) is pleased to announce its operationa l 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 r ecord 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 milli on ($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 Compan y 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 a ggregate 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 pro duction 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
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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 activitie s (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 w ith Caterpillar Financial SARL for the Fekola
Project
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 (including estimated Fekola pre- commercial production of between 45,000 and
55,000 ounces) with expected higher forecast cash op erating 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 900,0 00 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 (o f $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 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. In the
fourth quarter of 2016, consolid ated gold production was 140,651 oun ces, an increase of 7% (or 9,182
ounces) over the same period last year.
For the full-year 2016, consolidated cash operating cost s were an annual record low of $508 per ounce, at
the low end of the Company’s reduced cost guidan ce 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
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fourth quarter of 2016, consolidated cash opera ting costs were $546 per ounce (Q4 2015 - $527 per
ounce).
Full-year consolidated all-in sustaining costs (“AI SC”) were $794 per ounce, near the mid-point of the
Company’s reduced cost guidance range (of between $780 and $810 pe r ounce) and well below initial
guidance (of between $895 and $925 per ounce). Consolidated AISC al so decreased by $153 per ounce
(or 16%) compared to the prior-year. The lower cons olidated 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 an d 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 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. 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 milli on 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 activ ities 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 ne gative 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. Adju sted 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 paym ents 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 pe r ounce resulting in the
Company recording non-cash net impairment charges totaling $86.7 million.
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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 a nd 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 Eu ro 71.4 million term Equipment Facility with
Caterpillar Financial SARL. Subsequent to Decemb er 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, w ill provide adequate resources both to maintain operations and fund
the construction of the Fekola Project through comp letion (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 th e Company’s shelf prospectus and “at the market”
prospectus supplement (the “ATM Offering”). The AT M 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 Agreem ent. 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 $120 million
with its revolving credit facility bank syndicate. The Prep aid Sales transactions, in the form of metal sales
forward contracts, allow the Company to deliver predetermined volumes of gold on agreed future delivery
dates in exchange for upfront cash pre-payment. The Prepaid Sales transactions have a term of 33 months,
which commenced in March 2016, and settlement will be in the form of physical deliveries of 103,266
ounces of unallocated gold from any of the Company’ s mines in 24 equal monthly installments during
2017 and 2018 (estimated to represent approximately 9% and 6%, respectively, of the forecast production
in those years).
Operations
Mine-by-mine gold production in the fourth quarter and full-year 2016 was as follows:
Mine
Q4 2016
Production
(ounces)
Full-year 2016
Production
(ounces)
2016
Updated
Production
Guidance
(ounces)
2016
Original
Production
Guidance
(ounces)
Masbate 48,633 206,224 200,000 – 210,000 175,000 – 185,000
Otjikoto 46,846 166,285 160,000 – 170,000 160,000 – 170,000
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La Libertad 35,165 132,431 125,000 – 135,000 125,000 – 135,000
El Limon 10,007 45,483 50,000 – 60,000 50,000 – 60,000
B2Gold
Consolidated
140,651 550,423 535,000 – 575,000 510,000 – 550,000
Mine-by-mine cash operating costs in the fourth quarter and full-year 2016 was as follows:
Mine
Q4 2016
Cash
Operating
Costs
($ per ounce)
Full-year 2016
Cash
Operating
Costs
($ per ounce)
2016
Updated
Cost Guidance
($ per ounce)
2016
Original
Cost Guidance
($ 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 guidan ce range (of 200,000 to
210,000 ounces) and significantly exceeding initial gui dance (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.
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 budgeted to
be processed in 2017.
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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 four th 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 favoura ble 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 cost s. 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 upgr ades, $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) highe r than 2015 (including 18,815 ounces of pre-commercial production
from Otjikoto). Otjikoto’s 2016 pr oduction benefitted from higher th roughput due to the successful
completion of its mill expansion project in Sept ember 2015 (which increased plant capacity from 2.5
million tonnes per annum to 3.0 million tonnes per a nnum) 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-y ear (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 Februa ry 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 a nd included pre-stripping costs of $18.3 million and
mobile equipment purchases of $17.7 million. In the f ourth quarter of 2016, cap ital expenditures totaled
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$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 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.
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 ope rating 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 expe nditures (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 m illion), 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 m illion which consisted prim arily 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 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.
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 prior-
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year. The increase was mainly due to lower gold produc tion. 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 m illion in 2016 which consisted ma inly 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 grow th with consolidated gold production expected to be
in the range of between 545,000 and 595,000 ounces (including est imated 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 produc tion to increase significantly and be between 900,000
to 950,000 ounces. The Fekola Project is expected to be a large low-cost produ cer 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-commerc ial 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 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 revised cost guidance ranges (of $500 to $535 per ounce for
cash operating costs and $780 to $810 per ounce for AISC).