B2Gold Reports Record 2018 Annual Gold Production of 953,504 Oz & Gold Revenues of $1.2 B; Forecast Annual Cash Flows from Operations of $450 M; 2019 Forecast Gold Production of 935,000 - 975,000 Oz
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News Release
B2Gold Reports Record 2018 Annual Gold Production of 953,504 Oz & Gold Revenues of $1.2 B;
Forecast Annual Cash Flows from Operations of $450 M;
2019 Forecast Gold Production of 935,000 - 975,000 Oz
Vancouver, January 16, 2019 – B2Gold Corp. (TSX: BTO, NYSE AMERICAN: BTG, NSX: B2G )
(“B2Gold” or the “Company”) is pleased to announce record annual gold production and gold revenues for
2018, gold production and gold revenues for the fourth quarter of 2018 , and 2019 annual production and
cost guidance. 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 of 92% ($586 million)
over 2017
• Annual c onsolidated cash flows from operating activities projected to increase to a record of
approximately $450 million in 2018 (2017 - $155 million)
• 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)
• 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)
• On October 1, 2018, t he Company repaid in full its $259 million aggregate principal amount of
convertible senior subordinated notes on maturity; and 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 f inancial
performance with production guidance of between 935,000 and 975,000 ounces of gold for 2019 with
forecast cash operating costs (see “Non-IFRS Measures”) of between $5 20 and $560 per ounce and
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all-in sustaining costs (“AISC”) (see “Non-IFRS Measures”) of between $835 and $875 per ounce (a
budgeted increase in AISC of 6% over 2018 guidance); In addition, the Company will focus on organic
growth through the expansion potential at existing mines , and at its exploration and development
projects
2018 Operating 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 had 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 Namibia had another solid year in 2018,
producing 167,346 ounces of gold, above the mid -point of its production gui dance 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
have been negatively affected by consequences related to 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.
For full-year 2018, the Company expects to be at the lower end of its cost guidance ranges for consolidated
cash operating costs of between $505 and $550 per ounce and consolidated AISC of between $780 and
$830 per ounce . B2Gold will release its 2018 year-end consolidated financial statements after the North
American markets close on March 12, 2019. Details of the consolidated cash operating costs per ounce and
AISC per ounce will also be released at that time.
With the first full-year of gold production in 2018 from the Fekola Mine and the continued out-performance
of the Masbate Mine, the resulting significant increase in gold production levels combined with low
operating 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
full-year 2018, the Company is projecting cash flow from operations of approximately $4 50 million. In
2017, cash flow from operations was $155 million.
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Based on its strong financial results, 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 million
(comprised of the drawn portion of the Revolving Credit Facility, convertible notes and equipment loans
and leases). 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.
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
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 o f 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 ov er a broad range
of ore types. 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
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(including 79,243 ounces of pre -commercial production) , exceeding original budget by 22% (99,995
ounces).
For full-year 2018, Fekola’s cash operating costs are forecast to be at or below the low end of its guidance
range of between $345 and $390 per ounce and AISC are expected to be at or below the low -end of its
guidance range of between $575 and $625 per ounce.
Masbate Gold Mine – the Philippines
The Masbate Mine in the Philippines achieved another year of out-performance 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 production 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.
Based on Masbate’s strong performance, 2018 cost guidance was favourably revised lower in the third
quarter of 2018. For full-year 2018, Masbate’s cash operating costs are now expected to be at the low end
of the reforecast guidance range of between $545 and $595 per ounce (original guidance was between $675
to $720 per ounce) and AISC are also expected to be at the low end of the reforecast guidance range of
between $780 and $830 per ounce (original guidance was between $875 to $925 per ounce).
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. 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.
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For full-year 2018, Otjikoto’s cash operating costs are forecast to be within its guidance range of between
$480 and $525 per ounce and AISC are forecast to be at the upper end of the guidance range of between
$700 and $750 per ounce.
La Libertad Gold Mine - Nicaragua
During 2018 , consequences of the political and social unrest in Nicaragua negatively impacted the
Company’s Nicaraguan operations in a number of ways. In 2018, La Libertad Mine produced 80,963 ounces
of gold (Q4 2018 – 18,193 ounces), below the low end of its revised guidance range (of between 90,000
and 95,000 ounces). La Libertad’s 2018 production of 80,963 ounces of gold represents 8% of the
Company’s 2018 consolidated gold production.
As a result of national political unrest in 2018, development of the Jabali Antenna underground project had
been temporarily suspended , resulting in flooding of the underground workings . The subsequent
underground mine dewatering was completed in mid-August and ramp development recommenced. Mine
development in the fourth quarter of 2018 extended access to three mining areas, Zones 1, 2 and 3 in the
central and eastern areas of the mine. Ore production from Jabali Antenna underground consisted only of
development ore in the fourth quarter, with ore production from stopes in Zone 1 and Zone 2 anticipated in
the first quarter of 2019. In addition, the mine permit for the new Jabali Antenna Pit continues to be delayed
(production had been budgeted to start from the Jabali Antenna Pit in the third quarter of 2018). However,
progress has been made in key step s toward achieving a mine permit. The Company now anticipates
receiving the permit in time to start production from the pit in the second-half of 2019. Mine permits are
now in place for all other open pit and underground operations at La Libertad.
As a result of the Jabali Antenna delays discussed above, the planned mill feed for the year of higher grade
open-pit and underground ore was replaced with lower -grade spent ore. The resulting head grade for the
year was 1.19 g/t versus a budget of 1.76 g/t.
In light of La Libertad’s underperformance, its 2018 cost guidance was revised higher in the third quarter
of 2018. For full-year 2018, La Libertad’s cash operating costs were reforecast to be between $855 and
$905 per ounce (original guidance was between $745 to $790 per ounce) and AISC were reforecast to be
between $1,160 and $1,210 per ounce (original guidance was between $1,050 to $1,100 per ounce). As a
result of the lower than expected production in the fourth quarter of 2018, the Company now expects that
La Libertad will be at or slightly above the upper end of its cost guidance ranges.
El Limon Gold Mine - Nicaragua
El Limon Mine in Nicaragua produced 49,629 ounces of gold in 2018 (Q4 2018 – 11,893 ounces), near the
low end of its revised guidance range (of between 50,000 and 55,000 ounces). El Limon’s 2018 production
of 49,629 ounces of gold represents 5% of the Company’s 2018 consolidated gold production. Gold
production at El Limon was also affected by the national political unrest, resulting in delays for the receipt
of required permits fo r explosives and other shipments. However, in the fourth quarter of 2018, mining
operations at El Limon returned to budgeted (normal) production rates, and development of the new Limon
Central pit commenced. In June 2018 , El Limon’s gold production was also impacted by illegal road
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blockades. The blockades were related to local employment issues for the community and were resolved
through dialogue with a newly developed community stakeholder committee to ensure local concerns were
addressed.
In light of El Limon’s underperformance, its 2018 cost guidance was revised higher in the third quarter of
2018. For full-year 2018, El Limon’s cash operating costs are reforecast to be at or slightly above the upper
end of the guidance range of between $850 to $900 per ounce (original guidance was between $700 to $750
per ounce) and AISC are also reforecast to be at the upper end of the revised guidance range of between
$1,385 to $1,435 per ounce (original guidance was between $1,135 to $1,185 per ounce).
Gold Revenue
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 $1,250 per ounce in 2017.
This significant increase in gold revenue of 92% ($ 586 million) 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.
2019 Production Outlook and Cost Guidance
In 2019, B2Gold remains well positioned for continued strong operational and financial performance with
consolidated gold production forecast to be in the range of between 935,000 and 975,000 ounces.
Consolidated c ash costs are projected to remain low in 2019 with cash operating costs forecast to be
between $520 and $5 60 per ounce (2018 guidance was between $505 and $550 per ounce) and AISC
forecast to be between $835 and $875 per ounce (2018 guidance was between $780 and $830 per ounce) .
The budgeted 6% increase in AISC per ounce over 2018 guidance, mainly relates to slightly higher forecast
cash operating costs and higher expected pre-stripping sustaining capital costs at Otjikoto.
If a gold price assumption of $1,250 per ounce is used, the Company expects to generate cash flow from
operations of approximately $360 million in 2019.
Mine-by-mine 2019 ranges for forecast gold production, cash operating costs per ounce and AISC per ounce
are presented in the following tables below (presented on a 100% basis ). Consolidated gold production,
cash operating costs per ounce and AISC per ounce are all forecast to vary through the year. Consolidated
gold production is expected to be weighted towards the second -half of 2019 (approximately 14% higher
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than the first-half), reflecting the development of open pits in the first-half of the year and subsequent ore
production from those pits in the second -half. Consolidated c ash operating costs are expected to be
approximately 9% lower and AISC are expected to be approximately 21% lower, respectively, in the
second-half of 2019 versus the first-half of the year.
Mine H1 2019
Forecast
Gold Production
(ounces)
H2 2019
Forecast
Gold Production
(ounces)
Full-year 2019
Forecast
Gold Production
(ounces)
Fekola 205,000 - 210,000 215,000 - 220,000 420,000 - 430,000
Masbate 100,000 - 105,000 100,000 - 105,000 200,000 - 210,000
Otjikoto 66,000 - 71,000 99,000 - 104,000 165,000 - 175,000
La Libertad 43,000 - 45,000 52,000 - 55,000 95,000 - 100,000
El Limon 22,000 - 25,000 33,000 - 35,000 55,000 - 60,000
B2Gold Consolidated 436,000 - 456,000 499,000 - 519,000 935,000 - 975,000
Mine Full-year 2019
Forecast
Cash Operating
Costs
($ per ounce)
Full-year 2019
Forecast
AISC
($ per ounce)
Fekola $370 - $410 $625 - $665
Masbate $625 - $665 $860 - $900
Otjikoto $520 - $560 $905 - $945
La Libertad $840 - $880 $1,150 - $1,190
El Limon $720 - $760 $1,005 - $1,045
B2Gold Consolidated $520 - $560 $835 - $875
Fekola Gold Mine - Mali
In 2019, t he Fekola Mine is expected to produce between 4 20,000 and 4 30,000 ounces of gold at cash
operating costs of between $370 and $410 per ounce and AISC of between $625 and $665 per ounce. Gold
production is scheduled to be weighted to wards 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.
In 2019, the Fekola Mine is budgeted to process a total of 5.75 million tonnes of ore at an average grade of
2.44 g/t and process gold recovery of 94%.
Sustaining capital costs in 2019 at the Fekola Mine are budgeted to total $48 million, including $27 million
for pre-stripping, $12 million for mobile equipment rebuilds and $5 million for processing improvements.
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Non-sustaining capital costs total $ 10 million, including $5 million to complete the relocation of the
Fadougou village.
In October 2018, B2Gold announced (see news release dated 10/25/2018) a substantial increase in the
Mineral Resource estimate for the Fekola Mine and positive results from the ongoing Fekola mill expansion
study. The new increased Mineral Resource and the positive results, to date, from the Fekola mill expansion
study indicate the potential to increase mill throughput tonnage and increase annual gold production from
Fekola with moderate capital expenditure. Based on approximately 192,000 metres of exploration drilling
in 928 drill holes (including 70,877 metres in 294 holes drilled by B2Gold since June 2014), B2Gold
reported an updated Indicated Mineral Resource estimate of 92,810,000 tonnes at 1.92 g/t gold, for a total
of 5,730,000 ounces of gold, and an I nferred Mineral Resource estimate of 26,500,000 tonnes at 1.61 g/t
gold, for a total of 1,370,000 ounces of gold, for the Fekola Mine. Mineral Resources were reported within
a pit shell using a $1,400 per ounce gold price and above a cut-off of 0.6 g/t gold. Probable Reserves at the
start of production at Fekola were 49.2 million tonnes at 2.35 g/t gold containing 3.7 million ounces. These
initial reserves (less material mined to December 31, 2017) are contained within the updated resource. In
addition, pit shells were run using a gold price of $1,250 per ounce and demonstrate Fekola’s resiliency to
lower gold prices. The Indicated Mineral Resource contains 90,670,000 tonnes at 1.94 g/t gold for a total
of 5,667,000 ounces of gold, and the Inferred Mineral R esource of 16,620,000 tonnes at 1.58 g/t gold
containing 844,000 ounces of gold.
The new Mineral Resource is contiguous to the north of the current Fekola reserve pit boundary and extends
the resource pit boundary 1.2 km to the north. Exploration drill results further north of the new resource pit
boundary demonstrate that gold mineralization continues to the north, and remains open, indicating the
potential to further expand Mineral Resources with additional drilling. As outlined in the exploration section
below, infill drilling of approximately 25,000 metres of diamond drilling has commenced in 2019 w ith a
goal to convert inferred resources to indicated resources. These and previous drill results will be utilized to
calculate new probable mineral reserves for the extended Fekola deposit.
The Company recently completed a preliminary Fekola expansion study to evaluate the potential to expand
the Fekola mine and mi ll from the base case of 6 Mtpa of ore throughput to 7.5 Mtpa. The results of the
preliminary study indicate robust economics for the 7.5 Mtpa expansion case with estimated process capital
costs of $50 million. Given the additional capacity of the Fekola primary crusher and SAG mill and other
process systems, the study demonstrated that the 7.5 Mtpa upside can be achieved with an upgrade of the
ball mill circuit as well as other equipment upgrades.
Based on the positive results of the preliminary Fekola expansion study the Company has contracted Whittle
Consulting to work together with the Company’s technical teams to conduct a study to optimize the Fekola
expansion. The study will evaluate many aspects of potential optimization including mining productio n
rates, pit and phase scheduling, dynamic cut-off grades, ore stockpiling, blending, and dynamic processing
throughput and recovery. In addition, the study will examine various processing throughput scenarios to
maximize project net present value, and the results will guide mining equipment, mill expansion, and
project schedule decisions. The results of the optimized Fekola expansion study are expected to be released
by the end of the first quarter of 2019. Additionally, the Company will commence work on the Front End
Engineering and Design (FEED) for the expansion.