B2Gold Reports Positive 2018 Fourth Quarter/Annual Results; Record Annual Gold Production of 953,504 Oz, Revenue of $1.2 B & Operating Cash Flows of $451 M ($0.46/share); Cash Operating Costs of $495/oz & AISC of $758/oz
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News Release
B2Gold Reports Positive 2018 Fourth Quarter/Annual Results;
Record Annual Gold Production of 953,504 Oz, Revenue of $1.2 B & Operating Cash Flows of $451 M
($0.46/share);
Cash Operating Costs of $495/oz & AISC of $758/oz
Vancouver, March 12, 2019 – B2Gold Corp. (TSX: BTO, NYSE AMERICAN: BTG, NSX: B2G )
(“B2Gold” or the “Company”) is pleased to announce its operational and financial results for the fourth
quarter and year-end December 31, 2018. The Company previously released its gold production and gold
revenue results for the fourth quarter and full-year 2018, in addition to its production and cash cost guidance
for 2019 (see news release dated 1/16/19). All dollar figures are in United States dollars unless otherwise
indicated.
2018 Full-Year Highlights
• Record annual consolidated gold production, of 953,504 ounces of gold, near the top end of the revised
guidance range (of between 920,000 and 960,000 ounces) and exceeding the upper end of the original
guidance range (of between 910,000 and 950,000 ounces) , a significant increase of 322,939 ounces
(51%) over the prior -year; marking the tenth consecutive year that B2Gold achieved record annual
consolidated gold production
• Record annual consolidated gold revenue of $1.2 billion, a dramatic increase over 2017
• Consolidated cash operating costs (see “Non-IFRS Measures”) of $495 per ounce, beating guidance
(of between $505 and $550 per ounce) and well below the prior year of $542 per ounce
• Consolidated all-in sustaining costs (“AISC”) (see “Non-IFRS Measures”) of $758 per ounce, well
below its guidance range (of between $780 to $830 per ounce) and significantly below the prior year
of $860 per ounce
• Record annual consolidated cash flows from operating activities of $451 million ($0.46 per share), a
dramatic increase of 191% ($296 million) over 2017
• Net income of $45 million ($0.03 per share) and adjusted net income (see “Non-IFRS Measures”) of
$162 million ($0.16 per share)
• The new Fekola Mine in Mali, in its first full-year of commercial production, continued to significantly
outperform expectations, with gold production of 439,068 ounces, exceeding the upper limit of its
already increased guidance range (of between 420,000 and 430,000 ounces), coupled with AISC of
$533 per ounce, well below the low end of its guidance range (of between $575 to $625 per ounce)
• The Masbate Mine in the Philippines achieved record annual gold production of 216,498 ounces,
exceeding the upper limit of its already increased guidance range (of between 200,000 and 210,000
ounces), with AISC of $744 per ounce, beating the low end of its reduced guidance range (of between
$780 to $830 per ounce)
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• On October 1, 2018, t he Company repaid in full its $259 million aggregate principal amount of
convertible senior subordinated notes (the “Notes”) on maturity; by year-end the Company had reduced
its total debt outstanding to approximately $480 million from $700 million at the beginning of the year
• On October 25, 2018, the Company a nnounced a substantial increase in the gold mineral resource
estimate for the Fekola Mine and positive results from the ongoing Fekola Mill Expansion Study
• In October 2018, the Company was granted the mine permit for the Limon Central Pit in Nicaragua and
announced positive results from the Expansion Study at El Limon Mine
• Looking forward, B2Gold remains well positioned for continued strong operational and financial
performance with production guidance of between 935,000 and 975,000 ounces of gold for 2019 with
forecast cash operating costs of between $520 and $560 per ounce and AISC of between $835 and $875
per ounce; in addition, the Company will focus on organic growth through both expansion potential at
its existing mines and through its exploration and development projects
2018 Full-Year and Fourth Quarter Operational Results
For B2Gold, 2018 was a year of transformational growth, highlighted by the first full -year of commercial
production from its new large, low -cost Fekola Mine in Mali (which achieved commercial production on
November 30, 2017) and record annual production from its Masbate Mine in the Philippines. For the tenth
straight consecutive year, B2Gold achieved record annual consolidated gold production.
For full-year 2018, B2Gold’s consolidated production was an annual record of 953,504 ounces of gold,
near the top end of the revised guidance range (of between 920,000 and 960,000 ounces) and exceeding the
upper end of the original guidance range (of between 910,000 and 950,000 ounces). Consolidated gold
production for the year dramatically increased by 322,939 ounces (51%) compared to 2017. The new Fekola
Mine continued to outperform expectations and exceeded the upper limit of its already increased production
guidance range (of between 420,000 and 430,000 ounces) with gold production of 439,068 ounces in 2018.
The Masbate Mine achieved another very strong year in 2018, producing an annual record 216,498 ounces
of gold, and also exceeded the upper limit of its already increased production guidance range (of between
200,000 to 210,000 ounces). In addition, t he Otjikoto Mine in N amibia had another solid year in 2018,
producing 167,346 ounces of gold, above the mid -point of its production guidance range (of between
160,000 and 170,000 ounces). The strong operational performances by the Fekola, Masbate and Otjikoto
mines more than offset production shortfalls relating to the Company’s La Libertad and El Limon mines in
Nicaragua (which represent 14% of the Company’s 2018 consolidated gold production), whose operations
in 2018 were negatively affected by consequences of the national political unrest in that country.
In the fourth quarter of 2018, B2Gold’s consolidated gold production was 231,687 ounces, slightly
exceeding reforecast production and approximately in-line with the original budget. In the fourth quarter of
2017, including 72,903 ounces of pre -commercial production from Fekola, c onsolidated gold production
was 240,753 ounces.
The Company’s full-year 2018 consolidated cash operating costs were $ 495 per ounce, beating guidance
(of between $505 and $550 per ounce) and well below the prior year of $542 per ounce (including Fekola’s
pre-commercial production results). Consolidated AISC were $758 per ounce, well below the guidance
range (of between $780 to $830 pe r ounce) and significantly below the prior year of $860 per ounce
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(including Fekola’s pre-commercial production results), reflecting the positive impact of the first-full year
contribution of low -cost production from the Fekola Mine and Masbate’s very stro ng operational
performance.
In the fourth quarter of 2018, consolidated cash operating costs were $523 per ounce (Q4 2017 - $473 per
ounce, including Fekola’s pre-commercial production results) and AISC were $814 per ounce (Q4 2017 -
$754 per ounce, including Fekola’s pre-commercial production results).
2018 Full-Year and Fourth Quarter Financial Results
For the full -year 2018, consolidated gold revenue was a record $1.2 billion on record sales of 970,409
ounces at an average price of $1,262 per ounce compared to $639 million (excluding $101 million of pre-
commercial sales from Fekola) on sales of 510,966 ounces at an average price of $1,250 per ounce in 2017.
This significant increase in gold revenue was attributable to the higher gold production and timing of gold
sales, relating to the sale of gold bullion and in -circuit inventories included in opening inventories at the
beginning of the year. In 2017, for accounting purposes, gold revenue earned net of related production costs
from the sale of pre-commercial production were credited to Fekola’s mineral property development costs.
For the fourth quarter of 2018, consolidated gold revenue was $272 million on sales of 221,307 ounces at
an average price of $1,230 per ounce compared to $174 million on sales of 137,695 ounces at an average
price of $1,264 per ounce in the fourth quarter of 2017. The 2017 results exclude $101 million of revenue
from the sale of 79,243 ounces of pre-commercial production from Fekola.
For the full-year 2018, consolidated cash flows from operating activities significantly increased by $296
million (191%) to $451 million ($0.46 per share) from $155 million ($0.16 per share) in 2017. In 2017, for
accounting purposes, gold sal es proceeds earned net of related production costs from the sale of pre -
commercial production were credited to Fekola’s mineral property development costs. For the fourth
quarter of 2018 , consolidated cash flow s from operating activities were $74 million ($0.07 per share),
almost tripling from $26 million ($0.03 per share) in fourth quarter of 2017.
For the year ended December 31, 2018, the Company recorded net income of $45 million ($0.03 per share)
compared to net income of $62 million ($0.06 per share) for 2017. During 2018, the Company recorded a
net impairment charge of $55 million, mainly relating to impairment charges for La Libertad Mine in the
third and fourth quarters of 2018 and the sale of the Mocoa porphyry copper-molybdenum deposit in the
second quarter of 2018. In the fourth quarter of 2018, the Company recorded a loss of $50 million ($(0.06)
per share) compared to net income of $34 million ($0.03 per share) in the fourth quarter of 2017, mainly as
a result of impairment charges and mineral property write-offs.
Adjusted net income was $162 million ($0.16 per share) for 2018 compared to $52 million ($0.05 per share)
for 2017. Adjusted net income for the fourth quarter of 2018 was $1 4 million ($0.01 per share) compared
to adjusted net income of $6 million ($0.01 per share) in the fourth quarter of 2017.
The Company recorded a net current income tax expense of $109 million for the year ended December 31,
2018 compared to $27 million in 2017 consisting of current income tax of $77 million (2017 - $15 million),
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the 10% priority dividend to the State of Mali of $1 8 million (2017 - $2 million), withholding tax (on
intercompany interest/management fees) of $9 million (2017 - $5 million), and Nicaraguan ad valorem and
alternative minimum tax of $5 million (2017 - $5 million). For full-year 2018, consolidated net income
before taxes totaled $193 million. For accounting purposes, t his amount was net of $217 million of
unrecognized and non -deductible tax losses. These unrecognized and non -deductible tax losses of $217
million, mainly consisted of accounting depreciation expense of $69 million (relating to consolidated
purchase price adjustments), mineral property impairments and write -downs of $65 million, share -based
compensation expense of $22 million, head office general & administrative and interest expenses of $34
million (net of derivative gains), and other unrecognized tax losses of $27 million relating to the Nicaraguan
operations. Excluding these non-deductible and unrecognized tax losses, adjusted pre-tax net income was
$410 million, resulting in a consolidated effective income tax rate for the Company's mining operations of
19% ($77 million/$410 million).
Liquidity and Capital Resources
With the Fekola Mine in production, the res ulting increase in gold production levels combined with low
costs have dramatically increased B2Gold’s production, revenues, cash from operations and free cash flows
with ongoing benefits expected to continue for many years, based on current assumptions. For the full-year
2018, consolidated cash flows from operating activities significantly increased by $296 million (191%) to
$451 million ($0.46 per share) from $155 million ($0.16 per share) in 2017.
At December 31, 2018, the Company had cash and cash equivalents of $103 million compared to cash and
cash equivalents of $147 million at December 31, 2017. Working capital at December 31, 2018 was $156
million compared to a working capital deficit of $99 million a t December 31, 2017. On October 1, 2018,
the Company repaid in full its $259 million aggregate principal amount of the Notes (plus accrued interest)
upon maturity. The repayment of all outstanding principal and accrued interest under the Notes amounted
to approximately $263 million. The working capital deficit at December 31, 2017 resulted from the
classification of the Company's Notes to current liabilities since they were due on October 1, 2018.
Repayment of the Notes reflects the ongoing second phase of B2Gold’s strategy to fund construction of the
Fekola Mine in Mali without using equity financing. The Company funded construction of Fekola using a
combination of operating cashflows from existing mines, debt facilities and prepaid gold contract sales.
Following the successful achievement of commercial production at the Fekola Mine in late 2017, the
Company has been reducing its total debt outstanding throughout the course of 2018. The Company started
2018 with total debt outstanding of approximately $700 m illion (comprised of the drawn portion of the
Revolving Credit Facility (“RCF”), Notes and equipment loans). The Company has reduced its total debt
outstanding to approximately $480 million by December 31, 2018 (including approximately $80 million in
equipment loan financing), a reduction of $220 million for the year.
At December 31, 2018, the Company had drawn $400 million under the $500 million RCF, leaving an
undrawn and available balance under the existing facility of $100 million.
At December 31, 2018, the Company had $6 7 million of accrued taxes payable. The increase in accrued
taxes over 2017 relates mainly to the start-up of the Fekola Mine in September 2017. On a cash basis, the
majority balance of these accrued taxes become due and will be paid in the second quarter of 2019 (in
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conjunction with the filing of the related 2018 corporate income tax returns). In addition, the Company
expects to make 2019 corporate income tax installment payments of approximately $65 million in 2019.
Operations
Mine-by-mine gold production in the fourth quarter and full-year 2018 was as follows (presented on a 100%
basis):
Mine Q4 2018
Gold
Production
(ounces)
Full-year 2018
Gold
Production
(ounces)
Revised
Annual Guidance
Gold Production
(ounces)
Original
Annual Guidance
Gold Production
(ounces)
Fekola 105,280 439,068 420,000 - 430,000 400,000 - 410,000
Masbate 51,555 216,498 200,000 - 210,000 180,000 - 190,000
Otjikoto 44,766 167,346 160,000 - 170,000 160,000 - 170,000
La Libertad 18,193 80,963 90,000 - 95,000 115,000 - 120,000
El Limon 11,893 49,629 50,000 - 55,000 55,000 - 60,000
B2Gold
Consolidated 231,687 953,504 920,000 - 960,000 910,000 - 950,000
Mine-by-mine cash operating costs and AISC per ounce in the fourth quarter and full -year 2018 were as
follows (based on the total production at the mines B2Gold operates):
Mine Q4 2018
Cash Operating
Costs
($ per ounce)
Full-year 2018
Cash Operating
Costs
($ per ounce)
Revised
Annual Guidance
Cash Operating
Costs
($ per ounce)
Original
Annual Guidance
Cash Operating
Costs
($ per ounce)
Fekola $386 $337 $345 - $390 $345 - $390
Masbate $594 $548 $545 - $595 $675 - $720
Otjikoto $471 $502 $480 - $525 $480 - $525
La Libertad $986 $934 $855 - $905 $745 - $790
El Limon $920 $926 $850 - $900 $700 - $750
B2Gold
Consolidated $523 $495 $505 - $550 $505 - $550
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Mine Q4 2018
AISC
($ per ounce)
Full-year 2018
AISC
($ per ounce)
Revised
Annual Guidance
AISC
($ per ounce)
Original
Annual Guidance
AISC
($ per ounce)
Fekola $600 $533 $575 - $625 $575 - $625
Masbate $832 $744 $780 - $830 $875 - $925
Otjikoto $642 $719 $700 - $750 $700 - $750
La Libertad $1,225 $1,192 $1,160 - $1,210 $1,050 - $1,100
El Limon $1,358 $1,466 $1,385 - $1,435 $1,135 - $1,185
B2Gold
Consolidated $814 $758 $780 - $830 $780 - $830
Fekola Gold Mine - Mali
In its first full -year of commercial production (after achieving commercial production on November 30,
2017), the new Fekola Mine in Mali continued to significantly outperform expectations, running above plan
on mill throughput and recoveries. This resulted in Fekola exceeding the upper limit of its already increased
guidance range (of between 420,000 and 430,000 ounces) with gold production of 439,068 ounces in 2018.
Mill throughput was 5.6 million tonnes for the full -year, 12% above the budget of 5.0 million tonnes per
annum (“ Mtpa”). The mill began running higher throughput during the second -half of the year after
determining additional capacity of up to 6 million Mtpa was available from a detailed plant study. Mill gold
recoveries averaged 94.7% (compared to budget of 92.7%) and continue to remain above design predictions
over a broad range of ore types. It is expected that the recoveries will continue to be within the range of
design (92.7%) and observed (94.7%) recoveries. The average grade processed was 2.58 grams per tonne
(“g/t”), below budget of 2.69 g/t as the higher than budgeted tonnage processed consisted of medium and
low-grade ore. Completion of limited medium and low-grade ore campaigns in the third and fourth quarter,
confirmed that the Fekola mill recoveries continue to remain above design predictions. The resource model
continues to perform as expected compared to actual mined grade and tonnage.
For the fourth quarter 2018, the Fekola Mine produced 105,280 ounces of gold, 16% (14,509 ounces) above
original budget. In the fourth quarter of 2017, the Fekola Mine produced 105,110 ounces of gold (including
72,903 ounces of pre-commercial production). To-date (since the commencement of ore processing began
in September 2017 to December 31, 2018), gold production from the Fekola Mine totaled 550,518 ounces
(including 79,243 ounces of pre -commercial production) , exceeding original budget by 22% (99,995
ounces).
For the full-year 2018, Fekola’s cash operating costs were $337 per ounce (guidance was between $345 to
$390 per ounce) and AISC were $533 per ounce (guidance was between $575 to $625 per ounce), both
beating the low end of their respective guidance range, mainly as a result of higher gold production. In the
fourth quarter of 2018, Fekola’s cash operating costs were $386 per ounce and AISC were $600 per ounce.
Capital expenditures totaled $69 million in 2018, mainly consisting of $21 million for pre -stripping, $14
million in construction carryover for the completion of the powerhouse and other projects, $11 million for
Fadougou relocation costs, $9 million for mobile equipment purchases and rebuilds and $6 million for the
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construction of stages 2 and 3 of the tailings storage facility. Capital expenditures in the fourth quarter of
2018 totaled $15 million mainly consisting of $6 million for pre -stripping, $4 million for Fadougou
relocation costs and $1 million for mobile equipment purchases and rebuilds.
For 2019, the Fekola Mine is expected to produce between 420,000 and 430 ,000 ounces of gold at cash
operating costs of between $370 and $410 per ounce and AISC of between $625 and $665 per ounce (see
“2019 Production Outlook and Cost Guidance” section) . Gold production is scheduled to be weighted
towards the second-half of the year (as new high -grade ore production from Phase 4 of the Fekola Pit is
scheduled to begin in the second -half of 2019). The budgeted 7% increase in AISC over 2018 revised
guidance, mainly reflects both higher labour costs (as workers transition to permanent positions) and capital
expenditures for mobile equipment rebuilds/purchases. Fekola’s AISC per ounce are forecast to decrease
in the second -half of 2019 compared to the first -half of the year, mainly due to higher expected gold
production in the second-half and the timing of budgeted capital expenditures.
Masbate Gold Mine – the Philippines
The Masbate Mine in the Philippines also continued to outperform in 2018, producing an annual record
216,498 ounces of gold, exceeding the upper limit of its already increased guidance range (of between
200,000 to 210,000 ounces). Gold production for the year also increased by 7% (14,030 ounces) over 2017.
Gold producti on was significantly higher than original budget (by 20% or 35,510 ounces) as mill
throughput, recoveries and grade all exceeded budget. This resulted mainly from higher than expected oxide
ore tonnage and grade from the Colorado Pit. Oxide ore represented 58% of the processed tonnage for the
year versus budget of 29%. Mill throughput was 7.0 million tonnes (compared to budget of 6.8 million
tonnes and 7.0 million tonnes in 2017) and gold recoveries averaged 75.2% (compared to budget of 65.9%
and 76.0% in 2017). The average grade processed was 1.29 g/t (compared to budget of 1.26 g/t and 1.19 g/t
in 2017). For the fourth quarter 2018, the Masbate Mine produced 51,555 ounces of gold, 13% (5,871
ounces) above original budget.
For the full-year 2018, Masbate’s cash operating costs were $548 per ounce (2017 - $543 per ounce), at the
lower end of its already reduced guidance range (of between $545 to $595 per ounce ) and significantly
below initial guidance (of between $675 to $720 per ounce). Cash operating costs were significantly lower
than originally budgeted as a result of higher than expected production as well as lower than budgeted
mining costs (with cost savings in drilling, blasting and grade control) and higher deferred stripping costs
which were capitalized (as compared to budget). In the fourth quarter of 201 8, Masbate’s cash operating
costs were $594 per ounce (Q4 2017 - $587 per ounce).
Masbate’s AISC for the year were $744 per ounce (2017 - $843 per ounce), well below the low end of its
already reduced guidance range (of between $780 and $830 per ounce) and significantly below initial
guidance (of between $ 875 to $925 per ounce) . This was mainly attributable to higher than budgeted
production and the lower than budgeted cash operatin g costs as discussed above. In the fourth quarter of
2018, Masbate’s AISC were $832 per ounce (Q4 2017 - $963 per ounce).
Capital expenditures totaled $48 million in 2018, mainly including Masbate processing plant upgrade costs
of $19 million, mobile equipment purchases and rebuilds of $8 million, pre -stripping costs of $8 million
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and tailings storage facility costs of $4 million. Capital expenditures in the fourth quarter of 2018 totaled
$14 million, mainly including Masbate processing plant upgrade costs of $ 6 million, mobile equipment
purchases and rebuilds of $3 million, and pre-stripping costs of $3 million.
The Masbate expansion project for the upgrade of the processing plant to 8.0 Mtpa was completed in early
2019. With the expansion now fully commissioned and online, Masbate's annual gold production is
projected to average approximately 200,000 ounces per year during the mining phase and above 100,000
ounces per year when the low-grade stockpiles are processed at the end of the open-pit mine life.
For 2019, the Masbate Mine is expected to produce between 200,000 and 210,000 ounces of gold, primarily
from the Main Vein Pit, at cash operating costs of between $625 and $665 per ounce and AISC of between
$860 and $900 per ounce (see “2019 Production Outlook and Cost Guidance” section). The budgeted 9%
increase in AISC over 2018 revised guidance, mainly reflects higher forecast heavy fuel oil (“HFO”) prices
and the anticipa ted processing of lower grade ore in 2019. Masbate’s AISC per ounce are forecast to
decrease in the second -half of 2019 compared to the first -half of the year, mainly due to the timing of
budgeted capital expenditures.
Otjikoto Gold Mine - Namibia
The Otjikoto Mine in Namibia also had another solid year in 2018, producing 167,346 ounces of gold,
above the mid-point of its guidance range (of between 160,000 and 170,000 ounces). Otjikoto’s production
for the year resulted from processing 3.4 million tonnes (compared to budget of 3.3 million tonnes and 3.5
million tonnes in 2017) at an average grade of 1.53 g/t (compared to budget of 1.57 g/t and 1.73 g/t in 2017)
and average gold recoveries of 98.7% (compared to budget of 98.0% and 98.6% in 2017). Compared to the
prior-year, gold production was lower by 13% (24,188 ounces), as planned, due to a negligible amount of
Wolfshag ore being mined in 2018 while Phase 2 of the Wolfshag Pit is being developed. Higher grade ore
production is planned to resume from the Wolfshag Pit in late 2019.
For the fourth quarter 2018, the Otjikoto Mine produced 44,766 ounces of gold, approximately in-line with
budget. A higher-grade zone in the Otjikoto pit originally scheduled for the fourth quarter of 2018 was not
mined due to lower than planned fleet availability. This zone will be mined and processed in the first quarter
of 2019 using a mining contractor to augment the current fleet. Compared to the prior -year quarter, gold
production was lower by 15% (7,680 ounces), as planned, due to a negligible amount of Wolfshag ore being
mined in 2018.
For the full-year 2018, Otjikoto’s cash operating costs were $502 per ounce (2017 - $468 per ounce) and
AISC were $719 per ounce (2017 - $715 per ounce), both were near the mid-point of their guidance range.
In the fourth quarter of 201 8, Otjikoto’s cash operating costs were $ 471 per ounce (Q4 201 7 - $490 per
ounce) and AISC were $642 per ounce (Q4 2017 - $606 per ounce).
Capital expenditures totaled $ 51 million in 2018 and included pre-stripping costs of $ 27 million, mobile
equipment rebuilds of $12 million and $4 million for the installation of the Otjikoto solar power plant .
Capital expenditures in the fourth quarter of 201 8 totaled $ 9 million and included $6 million for pre -
stripping costs and $2 million for mobile equipment rebuilds.