B2Gold Reports Strong First Quarter 2018 Results; Significant Beat Against Budget for Cash Operating Costs and AISC and Dramatic Increase in Cash Flows from Operating Activities to $147 Million; Record Quarterly Gold Production of 240,000 ounces and Record Quarterly Revenues of $344 Million
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News Release
B2Gold Reports Strong First Quarter 2018 Results;
Significant Beat Against Budget for Cash Operating Costs and AISC and Dramatic Increase in
Cash Flows from Operating Activities to $147 Million;
Record Quarterly Gold Production of 240,000 ounces and Record Quarterly Revenues of $344 Million
Vancouver, May 9, 2018 – B2Gold Corp. (TSX: BTO, NYSE AMERICAN: BTG, NSX: B2G) (“B2Gold”
or the “Company”) is pleased to announce its operational and financial results for the first quarter of 2018.
The Company previously released its gold production and gold revenue for the first quarter of 2018 (see
news release dated 04/11/18). All dollar figures are in United States dollars unless otherwise indicated.
2018 First Quarter Highlights
• Record quarterly consolidated (commercial) gold production of 239,684 ounces, a significant increase
of 81% (106,948 ounces) over the same period last year and 7% (16,252 ounces) above budget, due to
the continued strong performances of the Fekola Mine in Mali, the Masbate Mine in the Philippines
and the Otjikoto Mine in Namibia
• Record quarterly consolidated gold revenue of $344 million , a significant increase of 135% ($198
million) over the same period last year
• Fekola Mine continued to operate above plan since achieving commercial production on November 30,
2017, producing 114,142 ounces of gold in the quarter, 11% (11,228 ounces) above budget
• Consolidated cash operating costs (see “Non-IFRS Measures”) of $481 per ounce, well below budget
by $67 per ounce (12%) and $83 per ounce (15%) lower than the prior-year quarter
• Consolidated all-in sustaining costs (“AISC”) (see “Non-IFRS Measures”) of $750 per ounce,
significantly below budget by $147 per ounce (16%) and $139 per ounce (16%) lower than the prior-
year quarter
• Consolidated cash flows from operating activities of $147 million ($0.15 per share), significantly
increasing by $107 million (272%) from $40 million ($0.04 per share) in the prior-year quarter
• Strong cash position of $168 million at quarter-end
• B2Gold is well on target to achieve transformational growth in 2018 and meet its annual guidance of
between 910,000 and 950,000 ounces of gold production in 2018 at cash operating costs of between
$505 and $550 per ounce and AISC of between $780 and $830 per ounce
• B2Gold is projecting a dramatic increase in its annual consolidated cash flows from operating activities,
expected, over the next three years, beginning in 2018, to average approximately $0.5 billion per year
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2018 First Quarter Operational Results
With the Fekola Mine, the Company’s largest and lowest cost mine, now in production, consolidated gold
production in the first quarter of 201 8 was a quarterly record of 239,684 ounces, a significant increase of
81% (106,948 ounces) over the same period last year and 7% (16,252 ounces) above budget. In its first full-
quarter of operations (after achieving commercial production on November 30, 2017 within only 60 days
from start-up), the new Fekola Mine continued to operate above plan, producing 114,142 ounces of gold in
the first quarter of 2018, 11% (11,228 ounces) above budget. The Masbate Mine and Otjikoto Mine also
had a solid start to the year with both mines exceeding their targeted production levels for the quarter.
Consolidated cash operating costs in the quarter were $481 per ounce, well below budget by $67 per ounce
(12%) and $83 per ounce (15%) lower than the prior-year quarter. The favourable budget variance was
attributable to the higher than budgeted production at the Fekola, Otjikoto and Masbate mines combined
with lower than budgeted production costs at these mines. Consolidated AISC in the first quarter were $750
per ounce, significantly below budget by $147 per ounce (16%) and $139 per ounce (16%) lower than the
prior-year quarter, reflecting the lower cash operating costs noted above a nd lower than planned capital
expenditures mainly at La Libertad Mine which are expected to be incurred later in 2018.
B2Gold is well on target to achieve transformational growth in 2018. For full-year 2018, with the planned
first full year of production from the Fekola Mine, consolidated gold production is f orecast to be between
910,000 and 950,000 ounces. This represents an increase in annual consolidated gold production of
approximately 300,000 ounces in 2018 from 2017. For full-year 2018, the Company’s forecast consolidated
cash operating costs range is between $505 and $550 per ounce and AISC are expected to decrease by
approximately 6% from 2017 to between $780 and $830 per ounce.
This increase in production levels combined with low costs are projected to dramatically increase B2Gold’s
production, revenues, cash from operations and cash flow for many years . Based on current assumptions
(including a gold price assumption of $1,300 per ounce) , on average over the next three years, beginning
in 2018, the Company is projecting per annum gold sales revenues of approximately $1.2 billion, cash flows
from operating activities of approximately $0.5 billion and a significant increase in free cash flow
(operating cash flows less investing cash flows).
2018 First Quarter Financial Results
Consolidated gold revenue in the first quarter of 201 8 was a quarterly record of $344 million on record
sales of 259,837 ounces at an average price of $1, 325 per ounce compared to $14 6 million on sales of
119,937 ounces at an average price of $1,219 per ounce in the first quarter of 2017. This significant increase
in revenue of 135% ($198 million) was attributable to the new production from the Fekola Mine, as well as
a 9% increase in the average realized gold price and the timing of gold shipments (including 27,450 ounces
sold in the quarter which related to Fekola’s December 31, 2017 bullion and in-circuit gold inventories).
Consolidated gold revenue for the first quarter of 2018 included $15 million relating to the delivery of gold
into the Company’s Prepaid Sales contracts (accounted for as deferred revenue). During the quarter, 12,908
ounces of gold were delivered under these contracts.
For the first quarter of 2018, consolidated c ash flows from operating activities increased by $107 million
(272%) to $147 million ($0.15 per share) from $40 million ($0.04 per share) in the prior-year quarter. This
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significant increase was driven by the record quarterly consolidated gold sales (as discussed above)
combined with lower per ounce production costs.
For the first quarter of 2018, the Company generated net income of $57 million ($0.06 per share) compared
to a net loss of $5 million (negative $0.01 per share) in the first quarter of 2017. Adjusted net income (see
“Non-IFRS Measures”) for the first quarter of 2018 was $57 million ($0.06 per share) compared to adjusted
net income of $19 million ($0.02 per share) in the first quarter of 2017.
Liquidity and Capital Resources
At March 31, 2018, the Company had cash and cash equivalents of $168 million compared to cash and cash
equivalents of $147 million at December 31, 2017. The Company had a working capital deficit at March
31, 2018 of $88 million compared to a working capital deficit of $99 million at December 31, 2017. The
working capital deficit is a result of the clas sification of the Company ’s convertible senior subordinated
notes to current liabilities since they mature on October 1, 2018.
At March 31, 2018, the Company had drawn $275 million under its $500 million Revolving Credit Facility
(“RCF”), leaving an undrawn and available balance under the existing facility of $225 million. Subsequent
to March 31, 2018, the Company repaid an additional net $25 million under the RCF leaving an undrawn
and available balance under the RCF of $250 million. With the successful and earlier than anticipated ramp-
up of the Fekola Mine in 2017, the Company has begun to reduce its overall consolidated debt levels,
including making $75 million of repayments on its RCF in the first quarter of 2018. The planned repayment
of debt in 2018 includes the anticipated repayment of the Company’s $259 million convertible notes which
mature on October 1, 2018, unless the notes are converted into shares prior to that date (conversion price
of $3.93 per share) . The Company projects (based on current assumptions, including a $1,300 per ounce
gold price) that it will have sufficient liquidity from 2018 operating cash flows and existing credit facilities
to repay the notes in full and maintain a strong cash position.
Operations
Mine-by-mine gold production in the first quarter of 2018 was as follows:
Mine Q1 2018
Gold Production
(ounces) (1)
2018 Annual
Production Guidance
(ounces) (1)
Fekola 114,142 400,000 - 410,000
Masbate 53,147 180,000 - 190,000
Otjikoto 39,499 160,000 - 170,000
La Libertad 19,367 115,000 - 120,000
El Limon 13,529 55,000 - 60,000
B2Gold Consolidated 239,684 910,000 - 950,000
(1) B2Gold’s Q1 2018 production results and 2018 annual production guidance are presented on a 100% basis.
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Mine-by-mine cash operating costs and AISC per ounce in the first quarter of 2018 were as follows:
Mine
Q1 2018
Cash Operating
Costs
($ per ounce)
2018 Annual
Cash Operating
Costs
Guidance
($ per ounce)
Q1 2018
AISC
($ per ounce)
2018 Annual
AISC
Guidance
($ per ounce)
Fekola $268 $345 - $390 $486 $575 - $625
Masbate $542 $675 - $720 $751 $875 - $925
Otjikoto $569 $480 - $525 $758 $700 - $750
La Libertad $1,023 $745 - $790 $1,330 $1,050 - $1,100
El Limon $1,007 $700 - $750 $1,586 $1,135 - $1,185
B2Gold Consolidated $481 $505 - $550 $750 $780 - $830
Fekola Gold Mine - Mali
In its first full-quarter of operations (after achieving commercial production on November 30, 2017 within
only 60 days from start -up), the new Fekola Mine in Mali continued to demonstrate strong sustained
operational performance by running above plan on mill feed grade, throughput and recoveries. This resulted
in the Fekola Mine producing 114,142 ounc es of gold in the first quarter of 2018, 11% (11,228 ounces)
above budget. Mill feed grade, throughput and recoveries were 2.84 grams per tonne (“g/t”) (compared to
budget of 2.76 g/t), 1,316,818 tonnes (compared to budget of 1, 249,474 tonnes) and 94.8% (compared to
budget of 9 2.7%), respectively. Throughout the quarter , the operation continued to improve with many
construction personnel making the transition to operations, together with training and skills development
in all departments . Currently there ar e approximately 1,848 employees on site, of which approximately
93% are Malian. The Fekola Mine also continued its outstanding safety performance, achieving 694 days
without a Lost-Time-Injury by quarter-end.
Fekola’s first quarter cash operating costs were $268 per ounce, well below budget by $70 per ounce (21%).
This was mainly the result of higher than expected production combined with lower than expected mining
costs (as a larger percentage of the waste tonnes mined consisted of soft material, not requiring drilling and
blasting, and lowering the operational and maintenance costs of the mining equipment). Fekola’s AISC for
the quarter were $486 per ounce, also well below budget by $116 per ounce (19%), reflecting the lower
cash operating costs noted above.
Capital expenditures in the first quarter of 2018 totaled $21 million , mainly consisting of $7 million in
construction carryover for the completion of the powerhouse and other projects, $2 million for Fadougou
village relocation costs, $6 million for pre-stripping of phases 3 and 4 of the Fekola Pit and $4 million for
the construction of stages 2 and 3 of the tailings storage facility.
Fekola’s rapid and successful ramp-up has surpassed the Company’s expectations. On September 25, 2017,
the Company announced that its in-house construction team had completed construction of the Fekola mill
on budget and commenced ore processing at the Fekola Mine, more than three months ahead of the original
schedule. The first gold pour at the Fekola Mine was achieved on October 7, 2017. On November 30, 2017,
the Fekola Mine achieved commercial production, one month ahead of the revised schedule and four
months ahead of the original schedule. Gold production from the Fekola Mine in 2017 was 111,450 ounces
(including 79,243 ounces of pre -commercial production), more than double the upper end of its original
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2017 guidance range (of 55,000 ounces) due to its early start-up, high-quality construction and faster than
expected ramp-up.
For full-year 2018, the Fekola Mine is forecast to produce between 400,000 and 410,000 ounces of gold at
cash operating costs of between $345 and $390 per ounce and AISC between $575 and $625 per ounce.
The Fekola Shareholders’ Agreement and the Share Purchase Agreement for the purchase of the additional
10% of Fekola have been finalized and signed by the relevant Malian government ministers and the Malian
Council of Ministers. The agreements are now subject only to ratification by the Mali National Assembly.
The Company expects t hat ratification of the agreements will now be concluded during the National
Assembly’s session in June 2018. Upon such ratification, the Company will transfer ownership of 20% of
Fekola SA (the Company’s indirect subsidiary which owns the mine) to the State of Mali (consisting of a
10% free carried non-participating interest plus an additional 10% participating interest purchased by the
State of Mali).
The Company recently announced (see news release dated 04/18/2018) positive exploration drill results
from the Fekola North Extension zone. A total of approximately 10,000 metres of diamond drilling have
now been completed this year in the Fekola North Extension zone. These drill results, combined with
previous results, c ontinue to convert resources to reserves within the resource pit boundary and further
expand the Fekola North Extension zone mineralization to now at least one k ilometre north of the Fekola
reserve pit boundary. Along with previous results , these drill res ults confirm the potential for the Fekola
deposit to increase in size significantly to the north, and indicate the potential, with further drilling , for a
larger open-pittable resource and reserve. Drilling continues, and will be ongoing through the rest of 2018,
to further define the Fekola North Extension zone and further infill drill the Fekola resource. The Company
will continue to release material drill results, as they become available and expects to release an updated
Fekola mineral resource before year-end.
In addition to Fekola, the 2018 Mali exploration budget includes approximately $8 million for further
drilling on the Anaconda zones approximately 25 kilometres from Fekola. The drill program is well
underway and is returning positive additional results from the near-surface saprolite zones and the recently-
discovered good gold grade bedrock zones, beneath the saprolite (indicating the potential for large, Fekola-
style mineralized zones). Further results will be released later in the year.
Masbate Gold Mine - The Philippines
The Masbate Mine in the Philippines continued its strong operational performance into the first quarter of
2018, producing 53,147 ounces of gold, 12% (5,854 ounces) above budget and 1% (585 ounces) higher
compared to the prior-year quarter. The increase was mainly due to higher than expected oxide ore tonnage
from Vein 5 of the Colorado Pit which positively impact ed processing recoveries and throughput. Oxide
ore represented 78% of the processed tonnage for the quar ter versus a budget of 50%. The Masbate Mine
also continued its outstanding safety performance, achieving almost two and a half years (898 days) without
a Lost-Time-Injury by quarter-end.
For the quarter, m ill throughput was 1,792,579 tonnes (compared t o budget of 1, 706,064 tonnes and
1,704,001 tonnes in the first quarter of 2017) and gold recoveries averaged 78.5% (compared to budget of
72.1% and 74.8% in the first quarter of 2017 ). The average grade processed was 1.17 g/t compared to
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budget of 1.20 g/t and 1.28 g/t in the first quarter of 2017. As expected, grades were higher in the prior -
year quarter which was attributable to the high-grade ore from the Main Vein Stage 1 Pit which is no longer
in production.
Masbate’s first quarter cash operating costs were $542 per ounce, significantly below budget by $152 per
ounce (22%) and comparable with the prior -year quarter. Cash operating costs were below budget due to
higher production combined with lower mining costs ( with cost savings in drilling, blasting and grade
control) and lower stockpile and deferred stripping adjustments (as compared to budget). Masbate’s AISC
for the quarter were $751 per ounce, significantly below budget by $139 per ounce (16%) which refle cts
the lower cash operating costs noted above and were also $57 per ounce (7%) lower compared with the first
quarter of 2017.
Capital expenditures in the first quarter of 2018 totaled $ 12 million which mainly consisted of Masbate
processing plant upgrades of $4 million, mobile equipment purchases of $2 million and deferred stripping
costs of $2 million.
For full-year 2018, the Masbate Mine is expected to produce between 180,000 and 190,000 ounces of gold
at cash operating costs of between $675 and $720 per ounce and AISC of between $875 and $925 per ounce.
A detailed capital cost estimate of $26 million was recently completed by Lycopodium Ltd., working with
the Company’s engineering team, for the expansion of the Masbate processing plant to 8 million tonnes per
year ($23 million in 2018 and $ 3 million in 2019). The expansion which is being conducted by B2Gold’s
in-house team primarily consists of adding a third ball mill and upgrading the existing crushing circuit. The
ball mill is currently on site, with preliminary works planned to commence in the second quarter of 2018.
No addition to the mining fleet is required as the additional feed will come from the lower -grade material
that was in the original mine plan but was scheduled to be stockpiled. When the expansion is online
(expected in early 2019), it is projected to keep Masbate’s annual gold production near 200,000 ounces per
year during the mining phase, and is expected to keep gold production above 100,000 ounces per year when
the low-grade stockpiles are processed at the end of the open-pit mine life.
The Company has a successful track record of adding reserves and resources at its operations (and thereby
extending mine life) through exploration. The Masbate exploration budget for 2018 is approximately $5
million including 12,000 metres of diamond drilling. The drilling is divided into brownfields drilling to
upgrade resources within the mine licence and on regional targets.
Otjikoto Gold Mine - Namibia
The Otjikoto Mine in Namibia also had a strong start to the year, following a record year of gold production
in 2017, with first quarter gold production of 39,499 ounces which was above budget by 6% (2,174 ounces).
Mill throughput, recoveries and processed grade were all slightly above budget , as the mine continues to
incrementally optimize its operations. Compared to the prior -year quarter, gold production was lower by
8% (3,275 ounces), as planned, due to a negligible amount of Wolfshag ore bein g mined in 2018 while
Phase 2 of the Wolfshag Pit is being developed. Ore production is planned to resume again from the
Wolfshag Pit in 2019 when it is projected to provide higher grade open -pit mill feed. The Otjikoto mill
continued to operate well, processing 827,227 tonnes (Q1 201 7 – 832,805 tonnes) in the quarter at an
average grade of 1.51 g/t (Q1 2017 – 1.62 g/t) with gold recoveries averaging 98.7% (Q1 2017 - 98.6%).
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For first quarter 2018, Otjikoto’s cash operat ing costs were $ 569 per ounce, $57 per ounce (9%) below
budget, and AISC were $758 per ounce , $50 per ounce (6%) below budget. These favourable budget
variances mainly resulted from higher than expected production combined with lower than expected
processing and site general costs. Compared to the prior-year quarter, cash operating costs were higher (as
planned) by $156 per ounce, as the prior -year quarter had benefitted from higher production , lower fuel
costs and a weaker Namibian dollar. However, compared to the prior-year quarter, AISC in the first quarter
of 2018 were lower by $13 per ounce as a result of lower sustaining capital expenditures (mainly for mobile
equipment) which offset the higher cash operating costs.
Capital expenditures in the first quarter of 2018 totaled $11 million, mainly consisting of $6 million for
pre-stripping, $3 million for installation of a solar power plant and $1 million for mobile equipment
rebuilds. Otjikoto’s solar plant commenced full commissioning in early April 2018 and by changing the
power plant to an HFO solar hybrid plant is expected to reduce Otjikoto’s HFO consumption by
approximately 2.3 million litres and reduce associated power generation fuel costs by approximately 10%
in 2018.
For full-year 2018, the Otjikoto Mine is expected to produce between 160,000 and 170,000 ounces of gold,
primarily from the Otjikoto Pit, at cash operating costs of between $480 and $525 per ounce and AISC of
between $700 and $750 per ounce.
Geotechnical, hydrogeological, and design studies for Wolfshag have been completed, based on an updated
resource model, resulting in a larger open pit than previously reported. Mining at Wolfshag commenced in
late 2016 and Wolfshag ore provided a significant com ponent of the Otjikoto mill feed in 2017. Updated
Wolfshag mineral reserves and resources were reported in the Company’s recent Annual Information Form,
dated March 23, 2018, with 372,000 ounces of Probable Mineral Reserves (4.29 million tonnes at an
average grade of 2.70 g/t, on a 90% attributable basis) remaining in the Wolfshag open pit as at December
31, 2017. This updated reserve, based on the larger Wolfshag open -pit design, includes an additional
132,000 ounces of Probable Mineral Reserves (1.42 mill ion tonnes at an average grade of 2.88 g/t, on a
90% attributable basis) within Wolfshag Phase 4. In addition, the Wolfshag mineral resource remains open
down-plunge and may be exploitable in the future by underground mining.
The Company’s total exploration budget for Namibia in 2018 is approximately $5 million. Exploration in
2018 will include 17,000 metres of diamond drilling and 4,000 metres of RAB drilling split between the
Otjikoto Project and the Ondundu joint venture.
La Libertad Gold Mine - Nicaragua
La Libertad Mine in Nicaragua produced 19,367 ounces of gold in the first quarter of 2018, 10% (2,128
ounces) below budget and 32% (9,172 ounces) lower than the first quarter of 2017. Gold production at La
Libertad has been affected by delays in receiving mine permits for new mining areas. However, mine
permits are now in place for all open pit and underground operations with the exception of the Jabali
Antenna Pit. The San Diego mining permit was received in February 2018 (later than expected) but the new
pit is now fully operational. Gold production at La Libertad was slightly above budget for the month of
March, as the mill benefitted from increased sources and volume of open-pit ore with the new San Juan and
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San Diego pits coming fully on -stream, and through April 2018 the operation has continued to track to
budgeted monthly production.
Jabali Antenna Underground remains under development with the planned ventilation raise now complete.
Access ramp development has advanced approximately two months ahead of original schedule for 2018, as
a result of an early start by the underground mining contractor. The Company expects to begin processing
ore from Jabali Antenna Underground in July.
La Libertad’s cash operating costs in the quarter were $1,023 per ounce, $89 per ounce (10%) above budget,
due to the lower than budgeted production discussed above. La Libertad’s AISC were $1,330 per ounce,
below budget by $419 per ounce (24%) , due to the timing of sustaining capital expendi tures (mainly for
land acquisition and resettlement costs) which are now forecast to occur later in the year. La Libertad’s per
ounce cash operating costs and AISC are budgeted to improve significantly in the second half of the year
along with higher forecast production.
Total capital expenditures in the first quarter of 2018 were $5 million, mainly consisting of pre-stripping
costs of $2 million and underground development costs of $2 million.
For full-year 2018, La Libertad Mine is expected to produce between 115,000 and 120,000 ounces of gold
at cash operating costs of between $745 and $790 per ounce and AISC of between $1,050 and $1,100 per
ounce. La Libertad’s production forecast assumes that production will start from the Jabali Antenna Pit in
the third quarter of 2018 (dependent upon the successful completion of resettlement activities and receipt
of the remaining mining permit). The Company continues to work with local residents, the mayor, and
senior government officials to advance the permit status for the Jabali Antenna Pit, and contingency plans
to increase production from other current operations are in place to meet guidance should permitting and
resettlement of the Jabali Antenna Pit be delayed.
Current plans at La Libertad include mining and processing into 2020 with a combination of mineral
reserves and mineral resources. The Company has a successful track record of converting its mineral
resources to reserves, and exploration of additional mineral targets continues. Mineral resources that are
not mineral reserves do not yet have demonstrated economic viability.
La Libertad’s exploration budget for 2018 is approximately $5 million for a total of 9,000 metres of planned
diamond drilling. The program is split between infill (near -mine) drilling and drilling on several regional
targets.
El Limon Gold Mine - Nicaragua
El Limon Mine in Nicaragua produced 13,529 ounces of gold in the first quarter of 2018, slightly below
budget (of 14,405 ounces) and 53% (4,668 ounces) higher than the first quarter of 2017. During 2017, El
Limon’s production was affected by operational issues, including underground water pumping breakdowns,
which had delayed high-grade ore flow from Santa Pancha Underg round. Management and operational
changes were made at El Limon and mining operations returned to budgeted (normal) production rates in
the fourth quarter of 2017 with operational improvements, including the successful rehabilitation of the
Santa Pancha 1 dewatering well. The mining permit for the new Mercedes Pit was recently received in