B2Gold Reports Strong First Quarter 2019 Results; Quarterly Gold Production of 231,000 oz, 6% Above Budget; AISC of $848/oz sold, significantly below budget by $133/oz
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News Release
B2Gold Reports Strong First Quarter 2019 Results;
Quarterly Gold Production of 231,000 oz, 6% Above Budget;
AISC of $848/oz sold, significantly below budget by $133/oz
Vancouver, May 7, 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 first quarter of 2019.
The Company previously released its gold production and gold revenue for the first quart er of 2019 (see
news release dated 04/17/19). All dollar figures are in United States dollars unless otherwise indicated.
2019 First Quarter Highlights
• Consolidated gold production of 230,859 ounces, 6% (12,704 ounces) above budget
• Consolidated gold revenue of $ 302 million on sales of 232,076 ounces (6% or 13,564 ounces above
budget)
• Consolidated cash operating costs (see “Non-IFRS Measures”) of $545 per ounce sold, below budget
by $27 per ounce (5%)
• Consolidated all-in sustaining costs (“AISC”) (see “Non-IFRS Measures”) of $848 per ounce sold,
significantly below budget by $133 per ounce (14%)
• Consolidated cash flows from operating activities of $86 million ($0.09 per share); for full-year 2019,
if a gold price assumption of $1, 300 per ounce is used, the Company expects to generate cash flows
from operations of approximately $400 million for the year
• Strong cash position of $142 million at quarter-end
• On March 26, 2019, the Company announced very positive results from the Expansion Study
Preliminary Economic Assessment (“PEA”) for the Fekola Mine , including significant estimated
increases in average annual gold production to over 550,000 ounces per year during the five-year period
2020-2024, and is proceeding with an expansion project to increase Fekola’s processing throughput by
1.5 million tonnes per annum (“Mtpa”) to 7.5 Mtpa from the current base rate of 6 Mtpa; the Company
will issue an updated Fekola Expansion Technical Report pursuant to the requirements of NI 43 -101
by May 10, 2019
• In May 2019, the Company received commitments from its existing syndicate of banks plus one new
lender, to upsize the revolving credit facility (“RCF”) capacity from $500 million to $600 million and
to increase the accordion feature from $100 million to $200 million ; the upsized RCF is expected to
close by mid-May 2019
• For full-year 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
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975,000 ounces with cash operating costs forecast to be between $520 and $560 per ounce sold and
AISC forecast to be between $835 and $875 per ounce sold
2019 First Quarter Operational Results
Consolidated gold production in the first quarter of 201 9 was 230,859 ounces, 6% (12,704 ounces) above
budget. Gold production from the Company’s Fekola, Masbate, Otjikoto and El Limon mines all exceeded
their targeted production. The Fekola Mine in Mali and the Masbate Mine in the Philippines continued their
very strong operational performances, with both well-above their budgeted production for the quarter. For
the first quarter of 2019, t he Fekola Mine produced 110,349 ounces of gold, well-above budget by 6%
(6,724 ounces), and the Masbate Mine produced 57,481 ounces of gold, significantly above budget by 15%
(7,490 ounces). Compared to the prior-year quarter, gold production was marginally lower by 8,825 ounces.
Consolidated cash operating costs in the quarter were $545 per ounce sold, below budget by $27 per ounce
(5%). The favourable budget variance (on a per ounce of gold sold basis) was mainly attributable to
Masbate’s above-budget gold production and significantly lower -than-budgeted mining costs (see
“Operations” section below). Also contributing to the favourable budget variance were Otjikoto’s sales of
lower cost gold ounces from its opening inventory and higher ore tonnage than budgeted from its Otjikoto
and Wolfshag pits. Compared to the prior-year quarter, consolidated cash operating costs (on a per ounce
of gold sold basis) were $74 per ounce higher (16%) , primarily due to the lower grade stockpile material
processed during the first quarter of 2019 at Fekola (as a result of Fekola’s significantly higher-than-
budgeted mill throughput) as well as to lower gold sales (the comparative quarter benefitted from additional
sales of 20,153 lower cost ounces generated from the net drawdown of opening January 1, 2018 gold
inventories, built-up in late 2017 in part as a result of Fekola ramping up to full steady state production).
Consolidated AISC in the first quarter were $ 848 per ounce sold (Q1 201 8 – $719 per ounce sold),
significantly below budget by $1 33 per ounce (14%), reflecting the lower per ounce cash operating costs
noted above and lower than planned capital expenditures which were $24 million lower than budget (this
reflects mainly timing differences as the majority of the capital underspend is expected to be incurred later
in 2019).
Given the gold production outperformance in the first quarter of 2019, B2Gold remains well positioned for
continued strong operational and financial performance with consolidated gold production for full-year
2019 forecast to be in the range of between 935,000 and 97 5,000 ounces . For the first -half of 2019,
consolidated gold production is forecast to be between 436,000 and 456,000 ounces of gold before
significantly increasing to between 499,000 and 519,000 ounces in the second-half of 2019. Consolidated
cash costs are projected to remain low in 2019 with cash operating costs forecast to be between $520 and
$560 per ounce sold and AISC forecast to be between $835 and $875 per ounce sold. As previously released,
consolidated gold production for full-year 2019 is expected to be weighted towards the second-half of 2019,
due to the planned development of open pits in the first-half of the year and subsequent ore production from
those pits in the second-half.
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2019 First Quarter Financial Results
Consolidated gold revenue in the first quarter of 2019 was $302 million on sales of 232,076 ounces at an
average price of $1,300 per ounce compared to $344 million on sales of 259,837 ounces at an average price
of $1,325 per ounce in the first quarter of 201 8. Gold sales of 232,076 ounces in the first quarter of 2019
were 6% (13,564 ounces) above budget. Compared to the prior-year quarter, the decrease in revenue related
mainly to the timing of gold shipments (as the prior-year quarter benefitted from additional sales of 20,153
ounces generated from the net drawdown of opening January 1, 2018 gold inventories, built-up in late 2017
in part as a result of Fekola ramping up to full steady state production).
Cash flow provided by operating activities was $86 million ($0.09 per share) in the first quarter of 2019
compared to $147 million ($0.15 per share) in the first quarter of 2018. The decrease mainly reflects lower
gold revenue as the comparative quarter benefitted from the sale of its opening gold inventories. For full-
year 2019, if a gold price assumption of $1, 300 per ounce is used, the Company expects to generate cash
flows from operations of approximately $400 million for the year.
For the first quarter of 2019, the Company generated net income of $27 million ($0.02 per share) compared
to net income of $57 million ($0.06 per share) in the first quarter of 2018. Adjusted net income (see “Non-
IFRS Measures”) for the first quarter of 2019 was $38 million ($0.04 per share) compared to adjusted net
income of $57 million ($0.06 per share) in the first quarter of 2018.
Liquidity and Capital Resources
At March 31, 2019, the Company had cash and cash equivalents of $142 million compared to cash and cash
equivalents of $103 million at December 31, 2018. Working capital at March 31, 2019 was $206 million
compared to $156 million at December 31, 2018.
At March 31, 2019, the Company had drawn $400 million under the $500 million RCF, leaving an undrawn
and available balance under the existing facility of $100 million. In May 2019, the Company received
commitments from its existing syndicate of banks plus one new lender, to upsize its RCF capacity from
$500 million to $600 million and to increase the accordion feature from $100 million to $200 million. In
addition, as a reflection of B2Gold's financial strength, the upsized RCF is expected to include increased
flexibility for permitted borrowings and equipment financings, coupled with less onerous financial
covenants and lower pricing. The upsized RCF is expected to close by mid-May 2019 and will be for a term
of four years to mid-2023. Final closing of the facility and the availability of funds under it remains subject
to completion of customary closing conditions. The upsized RCF, coupled with strong operating cash flows
from the Company's existing mine operations, is expected to provide the Company with continued financial
flexibility to advance existing assets and pursue exploration opportunities.
The Company’s current strategy is to continue to reduce debt, expand the Fekola Mine throughput and
annual production, further advance its pipeline of developme nt and exploration projects and evaluate
exploration opportunities.
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Operations
Mine-by-mine gold production and gold sales in the first quarter 2019 were as follows (presented on a
100% basis):
Mine Q1 2019
Gold Production
(ounces)
Q1 2019
Gold Sold
(ounces)
2019 Annual
Guidance
Gold Production
(ounces)
Fekola 110,349 115,800 420,000 - 430,000
Masbate 57,481 50,400 200,000 - 210,000
Otjikoto 32,712 37,200 165,000 - 175,000
La Libertad 18,086 17,272 95,000 - 100,000
El Limon 12,231 11,404 55,000 - 60,000
B2Gold Consolidated 230,859 232,076 935,000 - 975,000
Mine-by-mine cash operating costs and AISC per ounce (on a per ounce of gold sold basis) in the f irst
quarter of 2019 were as follows (based on the total production at the mines B2Gold operates):
Mine
Q1 2019
Cash Operating
Costs
($ per ounce
sold)
2019 Annual
Guidance
Cash Operating
Costs
($ per ounce
sold)
Q1 2019
AISC
($ per ounce
sold)
2019 Annual
Guidance
AISC
($ per ounce
sold)
Fekola $397 $370 - $410 $614 $625 - $665
Masbate $546 $625 - $665 $743 $860 - $900
Otjikoto $519 $520 - $560 $829 $905 - $945
La Libertad $1,295 $840 - $880 $1,647 $1,150 - $1,190
El Limon $991 $720 - $760 $1,524 $1,005 - $1,045
B2Gold Consolidated $545 $520 - $560 $848 $835 - $875
Fekola Gold Mine – Mali
The Fekola Mine in Mali had a very strong start to the year with first quarter gold production of 110,349
ounces, well-above budget by 6% ( 6,724 ounces), as the processing facilities continued to outperform.
Throughout the quarter, the operation continued to demonstrate sustained high processing throughput
without reduced recoveries.
For the first quarter of 2019, mill throughput was 1.73 million tonnes, exceeding budget by 25% and the
prior-year quarter by 31%. Overall mill throughput increased during the quarter from past quarters due to
a combination of factors. Metallurgy was favourable and excellent recoveries were achieved with a grind
coarser than planned (approximately 12% of the feed came from weathered saprolite ore which requires
little grinding), low -grade ore f eed during the quarter (coming mostly from upper elevations in the pit )
appears to have been softer than anticipated, and overall feed size to the plant was finer than budgeted. In
addition, fine-tuning of the plant circuit by the operators also played a role in the positive plant performance.
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Given the plant’s ability to process significantly higher-than-budgeted throughput during this period, the
Company took the decision to add lower grade material from the stockpiles to the plant feed. This resulted
in higher gold production at a lower average grade, and, as expected, in marginally higher per ounce cash
operating costs for the quarter. The average grade processed was 2.11 grams per tonne (“g/t”) (compared
to budget of 2.48 g/t). Gold grades from the mine continue to reconcile closely to the block model. Gold
recoveries in the quarter averaged 94.1% (compared to budget of 94.0% and 94.8% in the first quarter of
2018).
Fekola’s first quarter cash operating costs were $397 per ounce sold, marginally above budget (by $28 per
ounce or 8%) and higher than the prior -year quarter of $270 per ounce sold (by $127 per ounce or 47%).
The increase over budget and the comparative quarter was mainly due to the lower grade stockpile material
being processed during the quarter (as discussed above). Fekola’s AISC for the first quarter were $614 per
ounce sold (Q1 2018 – $474 per ounce sold), slightly below budget (by $31 per ounce).
Capital expenditures in the first quarter of 2019 totaled $21 million , mainly consisting of $7 million for
mobile equipment purchases and rebuilds, $5 million for pre-stripping and $5 million for Fadougou Village
relocation costs.
For full-year 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 sold and AISC of between $625 and $665 per
ounce sold. 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). For
the first-half of 2019, the Fekola Mine is forecast to produce between 205,000 and 210,000 ounces of gold
before increasing to between 215,000 and 220,000 ounces in the second-half of 2019.
On March 26, 2019, the Company announced very positive results from the Expansion Study PEA for the
Fekola Mine. As a result, the Company is proceeding with an expansion project to increase processing
throughput by 1.5 Mtpa to 7.5 Mtpa from the current base r ate of 6 Mtpa. The PEA took into account the
significant increase in the Fekola Mineral Resource announced on October 25, 2018. Based on the PEA,
once this expansion is complete, the Fekola Mine is expected to produce more gold over a longer life, with
more robust economics and higher average annual gold production, revenues and cash flows than the
previous life-of-mine (“LoM”). Project economic highlights from the PEA include : estimated optimized
LoM extended into 2030, including significant estimated increases in average annual gold production to
over 550,000 ounces per year during the five-year period 2020-2024 and over 400,000 ounces per year over
the LoM (2019 -2030), projected gold production of ap proximately 5,000,000 ounces over the new mine
life of 12 years of mining and processing (including 2019), an increase in project pre-tax net present value
of approximately $500 million versus the comparable amounts in the Company’s latest AIF Mineral
Reserve LoM model (filed on SEDAR on March 20, 2019) (assuming an effective date of January 1, 2019,
a gold price of $1,300 per ounce and a discount rate of 5%) and forecast LoM pre-tax net present value of
over $2.2 billion. The processing upgrade will focus on increased ball mill power, with upgrades to other
components including a new cyclone classification system, pebble crushers, and additional leach capacity
to support the higher throughput and increase operability. The capital costs of this mill expansio n are
estimated to be less than $50 million, with spending evenly split between 2019 and 2020. Critical path items
include ball mill motors and the lime slaker, both of which are expected to b e commissioned in the third
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quarter of 2020. With public release of the PEA results, B2Gold has filed a Material Change Report and
will issue an updated Fekola Expansion Technical Report pursuant to the requirements of NI 43 -101 by
May 10, 2019.
Mineral Resources which are not Mineral Reserves do not have demonstrated economic viability. The
Expansion Study PEA is preliminary in nature and includes Indicated and Inferred Mineral Resources.
Inferred Mineral Resources are considered too speculative geologically to have economic considerations
applied to them that would enable them to be categorized as Mineral Reserves. Consequently, there is no
certainty that the Expansion Study PEA will be realized.
Fekola Exploration
For 2019, exploration on the licenses in Mali is budgeted to total $18 million. The Company continues its
drilling program to convert Fekola’s Inferred Resources to Indicated and plans to further drill the potential
to the north of Fekola, which remains open, the new Cardinal target, located west of the Fekola Pit, and the
Anaconda zones.
Masbate Gold Mine – the Philippines
The Masbate Mine in the Philippines continued its very strong operational performance into the first quarter
of 2019, producing 57,481 ounces of gold, 15% (7,490 ounces) above budget and 8% (4,334 ounces) higher
compared to the prior -year quarter. Gold production was significantly above budget due to both higher-
than-expected head grade and recovery, as ore grade, oxide ore tonnage and total ore tonnage mined from
the Main Vein Pit were all better than modelled.
Masbate’s gold production for the quarter resulted from processing 1.83 million tonnes (compared to budget
of 1.85 million tonnes and 1.79 million tonnes in the first quarter of 2018) at an average grade of 1.32 g/t
(compared to budget of 1.20 g/t and 1.17 g/t in the first quarter of 2018) and average gold recoveries of
73.8% (compared to budget of 69.7% and 78.5% in the first quarter of 2018). Oxide ore represented 31%
of the processed tonnage for the quarter (versus budget of 8% and 78% in the first quarter of 20 18). As
planned, compared to the first quarter of 2018, gold grades increased while recoveries decreased, as higher-
grade transition/fresh ore was mainly mined from the Main Vein Pit in the first quarter of 2019 ( whereas
the prior-year quarter included lower-grade oxide ore mined from the Colorado Pit).
Masbate’s first quarter cash operating costs were $546 per ounce sold, significantly below budget by $123
per ounce (18%) and comparable with the prior -year quarter. The favourable budget variance (on a per
ounce of gold sold basis) was driven by the above-budget gold production and Masbate’s mining costs
which were well below budget for the quarter (by 24%) . Cost savings were mainly in the areas of:
drilling/blasting (mining locations included backfill areas which did not require blasting, and blast pattern
spacing was increased resulting in savings for drill meters and blast agents), loading/hauling (mainly due
to lower fuel and maintenance costs) and fewer total tonnes of waste moved (which was a result of fleet
activity focused in Main Vein area, resulting in a lower-than-budgeted strip ratio). Masbate’s AISC for the
quarter were $743 per ounce sold, significantly below budget by $222 per ounce (23%), mainly due to the
lower-than-budgeted mining costs, and comparable with the prior-year quarter.
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Capital expenditures in the first quarter of 201 9 totaled $8 million which mainly consisted of Masbate
processing plant upgrades of $4 million , mobile equipment purchases and rebuilds of $1 million, pre -
stripping costs of $1 million and tailings storage facility costs of $1 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 in the subsequent period after open-pit mining
activities have ceased.
For full-year 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 sold and
AISC of between $860 and $900 per ounce sold.
Otjikoto Gold Mine – Namibia
The Otjikoto Mine in Namibia also had a solid first quarter, producing 32,712 ounces of gold (Q1 2018 –
39,499 ounces), 4% (1,275 ounces) above budget. This was attributable to above budget mining tonnage
from the Otjikoto Pit and higher-than-budgeted processed grade. As previously released, Otjikoto’s full-
year 2019 gold production is scheduled to be significantly weighted towards the second-half of the year, as
a higher-grade zone of the Otjikoto Pit is forecast to be processed in the third quarter of 2019 and high -
grade ore production from Phase 2 of the Wolfshag Pit is scheduled to begin in late 2019.
During the first quarter of 2019, the Otjikoto Mine processed 0.8 million tonnes (comparable to budget and
the prior-year quarter) at an average grade of 1. 29 g/t (compared to budget of 1.19 g/t and 1.51 g/t in the
first quarter of 2018) and average gold recoveries of 98. 6% (compared to budget of 98.0% and 98.7% in
the first quarter of 2018).
For first quarter 2019, Otjikoto’s cash operating costs were $519 per ounce sold, significantly below budget
by $136 per ounce (21%) and $30 per ounce below the first quarter of 2018. The favourable budget variance
(on a per ounce of gold sold basis) was mainly due to lower cost gold ounces sold from opening inventory
and from higher-than-budgeted ore stockpile additions. In the first quarter of 2019, more ore tonnes were
stockpiled than budgeted as a result of higher ore tonnage than budgeted from Phase 2 of the Otjikoto Pit
and Phase 2 of the Wolfshag Pit. These positive ore tonnage reconciliations decreased the strip r atio and
increased stockpiled tonnage for the first quarter of 2019. On a total cost basis , Otjikoto’s mining,
processing and site general costs were approximately as budgeted for the quarter. Otjikoto’s AISC for the
quarter were $829 per ounce sold (Q1 2018 – $723 per ounce sold), significantly below budget by $293 per
ounce (26%) , mainly due to higher-than-budgeted sales . Also, sustaining capital expenditures were $4
million below budget (mainly relating to lower capitalized stripping which is expected to be an overall
capital expenditure saving for the year).
Capital expenditures for the first quarter of 2019 totaled $ 7 million, consisting of $4 million for pre -
stripping and $3 million for new mobile equipment and mobile equipment rebuilds.
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For full-year 2019, the Otjikoto Mine is forecast to produce between 165,000 and 175,000 ounces of gold,
primarily from the Otjikoto Pit, at cash operating costs of between $520 and $560 per ounce and AISC of
between $905 and $945 per ounce. For the first -half of 2019, the Otjikoto Mine is forecast to produce
between 66,000 and 71,000 ounces of gold before significantly increasing to between 99,000 and 104,000
ounces in the second-half of 2019 (as a higher-grade zone of the Otjikoto Pit is forecast to be processed in
the third quarter of 2019 and high -grade ore production from Phase 2 of the Wolfshag Pit is scheduled to
begin in late 2019).
El Limon Gold Mine – Nicaragua
El Limon Mine in Nicaragua produced 12,231 ounces of gold (Q1 2018 – 13,529 ounces) in the first quarter
of 201 9, slightly above budget. During the quarter , ore production from the new Limon Central Pit
commenced with 49,000 tonnes mined at an average grade of 3.43 g/t. Development of the Limon Central
Pit remains the focus of surface operations at El Limon Mine, the Santa Pancha underground mine continues
to operate normally and development of the Veta Nueva underground mine is proceeding as planned. As
previously released, El Limon’s full -year 2019 g old production is scheduled to be weighted towards the
second-half of the year, as high-grade ore production from the new Limon Central Pit is scheduled to fully
come on line at the beginning of the second-half of 2019.
For first quarter 2019, El Limon’s cash operating costs were $991 per ounce sold (compared to budget of
$876 per ounce sold) and AISC were $1,524 per ounce sold (compared to budget of $1,400 per ounce sold),
both above budget primarily due to lower-than-budgeted gold sales (El Limon’s gold sales were 6% below
budget in the quarter due to the timing of gold shipments). Production costs were on budget on a total basis.
Capital expenditures in the first quarter of 2019 totaled $7 million which mainly consisted of underground
development costs for Santa Pancha and Veta Nueva of $4 million and Limon Central pre-stripping costs
of $3 million.
For full-year 2019, El Limon is expected to produce between 55,000 and 60,000 ounces of gold at cash
operating costs of between $720 and $760 per ounce sold and AISC of between $1,005 and $1,045 per
ounce sold. For the first-half of 2019, El Limon Mine is forecast to pr oduce between 22,000 and 25,000
ounces of gold before increasing to between 33,000 and 35,000 ounces in the second-half of 2019.
La Libertad Gold Mine – Nicaragua
La Libertad Mine in Nicaragua produced 18,086 ounces of gold (Q1 2018 – 19,367 ounces) in the first
quarter of 2019, 14% (2,899 ounces) below budget. Gold production at La Libertad was affected by lower-
than-planned grade from the San Diego Pit, which w as partly offset by higher -than-planned ore tonnage
and grade from the San Juan Pit. As previously released, La Libertad’s full -year 2019 gold production is
scheduled to be weighted towards the second-half of the year, as La Libertad’s production forecast assumes
that production will start from the new Jabali Antenna Pit in the second -half of 2019 (dependent upon the
successful completion of resettlement activities and receipt of the Jabali Antenna open-pit permit).