B2Gold Reports Strong Fourth Quarter and Full-Year 2017 Results; 2018 Outlook Provides for Very Strong Production Growth with Forecast Gold Production of Between 910,000 and 950,000 Ounces
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News Release
B2Gold Reports Strong Fourth Quarter and Full-Year 2017 Results;
2018 Outlook Provides for Very Strong Production Growth with Forecast Gold Production of
Between 910,000 and 950,000 Ounces
Vancouver, March 15, 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 fourth
quarter and year-end December 31, 2017. The Compa ny previously released its gold production and gold
revenue results for the fourth quarter and full-year 2017, in addition to its production and cash cost
guidance for 2018 (see news release dated 1/11/18) . All dollar figures are in United States dollars unless
otherwise indicated.
2017 Full-Year Highlights
• Record annual consolidated gold production, for the ninth consecutive year, of 630,565 ounces of
gold (including 79,243 ounces of pre-commercial production 1 from Fekola), exceeding the upper end
of the revised guidance range (of 580,000 to 625,000 ounces) and well above the upper end of the
original guidance range (of 545,000 to 595,000 ounces)
• Annual consolidated gold revenue of $638.7 million (or an annual record of $739.5 million, including
$100.9 million of pre-commercial production sales from Fekola)
• Fekola Mine construction successfully completed in late September 2017, more than three months
ahead of the original schedule
• Fekola Mine achieved commercial production on November 30, 2017, one month ahead of the
revised schedule and four months ahead of the original schedule
• Fekola Mine gold production was 111,450 ounces in 2017 (including pre-commercial production), far
surpassing the upper end of its original guidance range (of 45,000 to 55,000 ounces)
• Fekola Mine achieves cash operating costs (see “Non-IFRS Measures” ) of $277 per ounce and all-in
sustaining costs (“AISC”) (see “Non-IFRS Measures” ) of $419 per ounce (including pre-commercial
results)
• Masbate Mine achieves near-record annual gold production of 202,468 ounces and Otjikoto Mine
achieves record annual gold production of 191,534 ounces
• B2Gold’s full-year consolidated cash operating costs of $542 per ounce (including Fekola’s pre-
commercial production results) were well below guidance of between $610 and $650 per ounce
1 Basis of presentation: The Fekola Mine commenced operat ion on September 24, 2017 and re ached commercial production on
November 30, 2017. In accordance with the Company's accounting policy, revenues and costs related to ounces produced in the
pre-commercial operating period up to Novemb er 30, 2017, were not recorded in the c onsolidated statement of operations but
were capitalized and treated as part of the net cost of construction of the Fekola Mine.
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• B2Gold’s full-year consolidated AISC of $860 per ounce (including Fekola’s pre-commercial
production results) were well below guidance of between $940 and $970 per ounce
• Cash flow from operating activities (after non-cash working capital changes) of $155.0 million ($0.16
per share); additionally, sales of pre-commercia l production from Fekola, which were included in
investing activities rather than cash flow from ope rating activities, generated net proceeds of $73.4
million ($100.9 million of sales revenue net of related production costs of $27.5 million)
• Strong cash position of $147.5 million at year-end
• With the planned first full year of production from the Fekola Mine, the Company’s outlook for 2018
provides for dramatic production growth, with co nsolidated production expected to be between
910,000 and 950,000 ounces of gold; cash operating costs and AISC are expected to remain low and
be between $505 and $550 per ounce and between $780 and $830 per ounce, respectively
• Beginning in 2018, on average over the next three years, the Company is projecting per annum gold
sales revenues of approximately $1.2 billion, cash fl ow from operations of close to $0.5 billion and a
significant increase in free cash flow (operating cash flows less investing cash flows)
• In 2018, B2Gold’s strategy will focus on organic gr owth through the expansion of its existing mines
and further brownfields exploration and grassroots exploration
2017 Fourth-Quarter Highlights
• Record quarterly consolidated gol d production of 240,75 3 ounces (including 72,903 ounces of pre-
commercial production from Fekola), 71% (or 100,102 ounces) greater than the same period in 2016
• Consolidated gold revenue of $17 4.0 million (or a quarterly record of $274.9 million, including
$100.9 million of pre-commercial production sales from Fekola)
• Consolidated cash operating costs of $473 per ounce and AISC of $754 per ounce (including Fekola’s
pre-commercial production results)
2017 Full Year and Fourth-Quarter Operational Results
For B2Gold, 2017 was an outstanding year of perform ance with the achievement of another record year
of consolidated gold pro duction (for the ninth straight year), and the successful construction and
commissioning of its flagship Fekola Mine, in southwest Mali, which achieved commercial production on
November 30, 2017, one month ahead of the revised schedule and four months ahead of the original
schedule. With the large, low-cost Fekola Mine no w in production, B2Gold is on target to achieve
transformational growth in 2018. In 2018, with the planned first full year of production from the Fekola
Mine, consolidated gold production is forecast to be between 910,000 and 95 0,000 ounces (see “2018
Production Outlook and Cost Guidance” section). This represents an increase in annual consolidated gold
production of approximately 300, 000 ounces in 2018 from 2017. The Company’s forecast consolidated
cash operating costs are expected to remain low in 2018 and be between $505 and $550 per ounce and
AISC are expected to decrease by approximately 6% from 2017 and be between $780 and $830 per
ounce.
The Fekola Mine is projected to be a large, low-co st producer. The resulting increase in production levels
combined with low costs are expected to dramatical ly 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 approxi mately $1.2 billion, cash flow from operations of
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close to $0.5 billion and a significant increase in fre e cash flow (operating cash flows less investing cash
flows).
For full-year 2017, consolidated gold production was an annual record of 630,565 ounces (including
79,243 ounces of pre-commercial production from Fe kola), exceeding the upper end of its revised
guidance range (of 580,000 to 625,000 ounces) and was well above the uppe r end of its original guidance
range (of 545,000 to 595,000 ounces) . Consolidated gold production for the year also increased by 15%
(or 80,142 ounces) over 2016. B2Gold ’s record performance in 2017 reflected the early start-up and
strong ramp-up performance of the new Fekola Mine and the continued, very strong operational
performances of both the Masbate Mine in the Philippines and the Otjikoto Mine in Namibia.
In the fourth quarter of 2017, consolidated gold pr oduction was a quarterly record of 240,753 ounces
(including 72,903 ounces of pre-commercial production from Fekola), exceeding reforecast production by
5% (or 10,473 ounces) and significantly exceeding budget by 28% (or 52,141 ounces). Consolidated gold
production for the quarter also increased by 71% (or 100,102 ounces) over the same quarter in 2016.
The Company’s full-year 2017 consolidated cash operating costs of $542 per ounce (including Fekola’s
pre-commercial production results) came in well below the guidance range of between $610 and $650 per
ounce, as a result of the Company’s strong operating pe rformance. In addition, the Company’s full-year
2017 consolidated AISC of $860 per ounce (including Fekola’s pre-commercial production results) also
came in well below the guidance range of between $940 and $970 per ounce.
In the fourth quarter of 2017 (including Fekola’s pre-commercial production results), consolidated cash
operating costs were $473 per ounce (Q4 2016 – $546 per ounce) and AISC were $754 per ounce (Q4
2016 – $877 per ounce).
2017 Full Year and Fourth-Quarter Financial Results
The Fekola Mine commenced operation on September 24, 2017, and reached commercial production on
November 30, 2017 (see “Operations, Fekola Gold Mine – Mali” section). In accordance with the
Company's accounting policy, revenues and costs related to ounces produced in the pre-commercial
operating period up to November 30, 2017, were not reco rded in the consolidated statement of operations
but were capitalized and treated as part of the net cost of construction of the Fekola Mine. Consistent with
the exclusion of these pre-commercial production re venues and costs from the determination of net
income for the period, the related net cash flows we re not reflected as part of cash flow from operating
activities in the Company’s 2017 consolidated statement of cash flows (but instead were reflected in the
investing activities section). For full-year 2017, th e Fekola Mine produced a total of 111,450 ounces
(from September 24 to December 31). A total of 84,000 ou nces were sold in the fourth quarter of 2017,
with the remaining 27,450 ounces being recorded in inventory at December 31, 2017. Of the ounces sold,
79,243 ounces related to pre-comme rcial production. Consequently, only 4,757 of the ounces sold (for
revenue of $6.1 million) related to Fekola Mine commercial production and were recorded in the
Company’s 2017 consolidated statement of opera tions. Proceeds from the sale of the 79,243 pre-
commercial production ounces totaled $100.9 million and t ogether with related production costs of $27.5
million for a total net credit of $73.4 million were capit alized and offset against Fekola Mine construction
costs.
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For the full-year 2017, consolidated gold revenue was $638.7 million (or an annual record of $739.5
million, including $100.9 million of pre-commercia l production sales from Fekola) on sales of 510,966
ounces (or an annual record of 590,209 ounces in cluding 79,243 ounces of pre-commercial production
sales from Fekola) at an average price of $1,25 0 per ounce compared to $683.3 million on sales of
548,281 ounces at an average price of $1,246 per ounce in 2016.
Consolidated gold revenue in the fourth quarter of 2017 was $174.0 million (or a quarterly record of
$274.9 million including $100.9 million of pre-comme rcial production sales from Fekola) on sales of
137,695 ounces (or a quarterly record of 216,938 oun ces, including 79,243 ounces of pre-commercial
production sales from Fekola) at an average price of $1,264 per ounce compared to $181.2 million on
sales of 151,524 ounces at an average price of $1,196 per ounce in the fourth quarter of 2016.
Consolidated gold revenue for the fourth quarter and year ended December 31, 2017, included $15
million and $60 million, respectively, relating to the delivery of gold into the Company's Prepaid Sales
contracts (accounted for as deferred revenue) entere d into in March 2016. Proceeds from the Prepaid
Sales transactions, used to fund a portion of the Fekola Mine construction rather than a potentially
dilutive equity financing, were originally received in March 2016 and are being recognized in revenue as
the underlying Prepaid Sales contracts are delivered into. During the fourth quarter and year ended
December 31, 2017, 12,909 ounces and 51,633 ounces, respectively, were delivered under these contracts.
For the full-year 2017, cash flow from operating activ ities (after non-cash working capital changes) was
$155.0 million ($0.16 per share) compared with $411. 8 million ($0.44 per share) in 2016. In addition,
sales of pre-commercial production from Fekola in the fourth quarter of 2017, which were included in
investing activities rather than cash flow from opera ting activities, generate d net proceeds of $73.4
million ($100.9 million of sales revenue net of related production costs of $27.5 million). Cash flow from
operating activities for the year ended December 31, 2017, included a negative $39.7 million adjustment
for changes in non-cash working capital (compared to a positive $2 million adjustment for changes in
non-cash working capital in 2016), mainly relating to an increase in inventories at the Fekola Mine. Cash
flow from operating activities for the year ended De cember 31, 2016, included $120 million of proceeds
which were received from the Company’s Prepaid Sales transactions in March 2016. In the fourth quarter
of 2017, cash flow from operating activities was $25.6 million ($0.03 per share) compared with $82.3
million ($0.09 per share) in the fourth quarter of 2016.
For the year ended December 31, 2017, the Company recorded net income of $61.6 million ($0.06 per
share) compared to net income of $38.6 million ($0.04 per share) for 2016. Adjusted net income ( see
“Non-IFRS Measures” ) was $51.8 million ($0.05 per share) for 2017 compared to $99.0 million ($0.11
per share) for 2016. As discussed above, for the y ear ended December 31, 2017, proceeds from the sales
of pre-commercial production from Fekola ($100.9 m illion) and related produc tion costs ($27.5 million),
for a net amount of $73.4 million, were netted against Fekola Mine construction costs and not recorded as
part of net income.
For the fourth quarter of 2017, the Company record ed net income of $34.5 million ($0.03 per share)
compared to net income of $8.1 million ($0.01 per sh are) in the fourth quarter of 2016. Adjusted net
income was $5.7 million ($0.01 per share) in the four th quarter of 2017 compared to $2.5 million ($0.00
per share) in the fourth quarter of 2016. As di scussed above, for the year ended December 31, 2017,
proceeds from the sales of pre-commercial prod uction from Fekola ($100. 9 million) and related
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production costs ($27.5 million), for a net amount of $73.4 million, were netted against Fekola Mine
construction costs and not recorded as part of net income.
Liquidity and Capital Resources
At December 31, 2017, the Company had cash and cash equivalents of $147.5 million compared to cash
and cash equivalents of $144.7 million at December 31, 2016. The Company had a working capital deficit
at December 31, 2017 of $98.7 million compared to a working capital of $101.0 million at December 31,
2016. The working capital deficit resulted from the recl assification of the Company's convertible senior
subordinated notes to current liabilities, as they are due on October 1, 2018.
In 2016, the Company made a strategic decision to fund the construction of the Fekola Mine without
using any equity to fund part of the construction co st. With the successful a nd earlier than anticipated
ramp-up of the Fekola Mine in 2017, the Company is well positioned to execute the second part of its
debt funding strategy and has started to reduce its overall consolidated debt levels. This planned
repayment of debt balances 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.
While current convertible market c onditions remain attractive, the Comp any has allowed the notes to fall
under amounts due within one year on the basis that the Company projects 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. This position mirrors the Company's current strategy to focus on
developing its budgeted organic growth opportunities in the short to mid-term using a portion of its
projected ongoing cash flow from existing operations , as well as its amended Revolving Credit Facility
(“RCF”) without the need for additional new external debt or equity financing.
At December 31, 2017, the Company had draw n down $350 million under the $500 million amended
RCF, leaving an undrawn and availabl e balance under the existing facility at that time of $150 million.
Subsequently, the Company repaid $50 million u nder the amended RCF leaving an undrawn and
available balance of $200 million. At December 31, 2017, the Company also had Euro 22 million ($26.4
million equivalent) of undrawn capac ity on its Fekola equipment loan facility and $9.1 million of
undrawn capacity on its Masbate equipment loan facility.
Operations
Mine-by-mine gold production in the fourth quarter and full-year 2017 was as follows:
Mine
Q4 2017
Gold
Production
(ounces) (1)
Full-year 2017
Gold
Production
(ounces) (1)
2017
Revised
Annual Production
Guidance
(ounces) (1)
2017
Original
Annual Production
Guidance
(ounces) (1)
Fekola 105,110 (2) 111,450 (2) 100,000 - 110,000 45,000 - 55,000
Masbate 53,419 202,468 180,000 - 185,000 175,000 - 185,000
Otjikoto 52,446 191,534 170,000 - 180,000 165,000 - 175,000
La Libertad 14,696 82,337 90,000 - 100,000 110,000 - 120,000
El Limon 15,082 42,776 40,000 - 50,000 50,000 - 60,000
B2Gold 240,753 (2) 630,565 (2) 580,000 - 625,000 545,000 - 595,000
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Consolidated
(1) B2Gold’s production results and guidance are presented on a 100% basis.
(2) Fekola’s fourth quarter and full-year 2017 gold production includes 72,903 ounces and 79,243 ounces, respectively, of
gold produced during its pre-commercial production period.
Mine-by-mine cash operating costs and AISC per ounce in the fourth quarter and full-year 2017 were as
follows:
Mine
Q4 2017
Cash Operating
Costs
($ per ounce)
Full-year 2017
Cash Operating
Costs
($ per ounce)
2017
Revised
Annual Cash
Operating Costs
Guidance
($ per ounce)
2017
Original
Annual Cash
Operating Costs
Guidance
($ per ounce)
Fekola $277 (1) $277 (1) $580 - $620 $580 - $620
Masbate $587 $543 $595 - $635 $690 - $730
Otjikoto $490 $468 $480 - $520 $510 - $550
La Libertad $1,094 $836 $795 - $835 $625 - $665
El Limon $778 $954 $815 - $855 $655 - $695
B2Gold
Consolidated
$473 $542 $610 - $650 $610 - $650
(1) Includes Fekola’s pre-commercial results.
Mine
Q4 2017
AISC
($ per ounce)
Full-year 2017
AISC
($ per ounce)
2017
Revised
Annual AISC
Guidance
($ per ounce)
2017
Original
Annual AISC
Guidance
($ per ounce)
Fekola $419 (1) $419 (1) $700 - $730 $700 - $730
Masbate $963 $843 $935 - $975 $1,020 - $1,050
Otjikoto $606 $715 $725 - $765 $855 - $885
La Libertad $1,504 $1,106 $1,075 - $1,115 $785 - $815
El Limon $1,231 $1,469 $1,415 - $1,455 $1,065 - $1,095
B2Gold
Consolidated
$754 $860 $940 - $970 $940 - $970
(1) Includes Fekola’s pre-commercial results.
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Fekola Gold Mine – Mali
Fekola Mine
Fekola Pre-
Commercial
Production
(September 24 to
November 30)
Fekola
Commercial
Production
(December)
Total
2017
(September 24 to
December 31)
Operating and Financial Information (1):
Gold Production (ounces) 79,243 32,207 111,450
Gold Sold (ounces) (2) 79,243 4,757 84,000
Inventory at Dec 31, 2017
- In-circuit Inventory (ounces) 3,343 3,343
- Finished Gold Inventory (ounces) 24,107 24,107
Gold Sales Revenues (2)
($ in thousands) 100,864 6,064 106,928
Average realized selling price ($ per
ounce) 1,273 1,275 1,273
Cash Operating Costs ($ per ounce) 311 277
AISC ($ per ounce) 446 419
(1) Fekola Mine’s operating and financial information are presented on a 100% basis.
(2) During the pre-commercial production period, a total of 79,243 ounces of gold were sold resulting in pre-commercial
production revenues of $100.9 million. Included in these sa les are 42,243 ounces (related gold sales revenues of $53.3
million) that were physically sold in December but were produced during the pre-commercial production period.
On September 25, 2017, the Company announced that it 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 Fekola mill started processing ore on September 24, 2017, and 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. Throughput ran above nameplate capacity during the 30-day test period (on average) with
significantly better than expected plant availability, mill feed grades and recoveries.
Gold production from the Fekola Mine in 2017 was 111,450 ounces (includi ng 79,243 ounces of pre-
commercial production), far surpassing the upper end of its original guidance range (of 45,000 to 55,000
ounces) due to its early start-up and strong ramp-up performance. In the fourth quarter of 2017, the
Fekola Mine produced 105,110 ounces of gold (including 72,903 ounces of pre-commercial production).
In the fourth quarter of 2017 (including Fekola’s pre-commercial production results), Fekola’s cash
operating costs were $277 per ounce (compared to guidance of between $580 and $620 per ounce) and
AISC were $419 per ounce (compared to guidance of between $700 and $730 per ounce). Both were
significantly below guidance (by approximately 50%) , attributable to Fekola’s very strong ramp-up
performance which resulted in much higher than b udgeted gold production and lower than budgeted
production costs.
Total capital expenditures for Fekola for the year ended December 31, 2017, totaled $222.4 million versus
a total budget of $231.0 million. Cumulative expend itures on the Fekola Project, to date, are $596.8
million including $41.0 million of pre- construction expenditures compared with a total budget to date of
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$599.0 million. The final $15 million costs, related to the Fadougou village relocation, are expected to be
incurred in 2018.
For 2018, the Fekola Mine is expected to produc e between 400,000 and 410,000 ounces of gold (see
“2018 Production Outlook and Cost Guidance” section), the first full year of production. Cash operating
costs are expected to be between $345 and $390 per ounce, and AISC between $575 and $625 per ounce.
Based on the new life of mine (“LoM”) plan ( see news release dated 9/25/2017 ), the Fekola Mine is
projected to produce approximately 400,000 ounces of gold annually for the first three years at cash
operating costs of $357 per ounce and AISC of $604 per ounce. For the first seven years, the Fekola Mine
is projected to produce approximately 374,000 ounces of gold annually with cash operating costs of $391
per ounce and AISC of $643 per ounce. Over the initial ten-year LoM, Fekola is projected to produce an
average of 345,000 ounces per annum at cash operati ng costs of $428 per ounce and AISC of $664 per
ounce.
The Fekola Shareholders' Agreement and the Shar e Purchase Agreement for the purchase of the
additional 10% of Fekola have recently been finali zed and signed by the relevant Malian government
ministers and the Malian Council of Ministers. The agre ements are now subject only to ratification by the
Mali National Assembly which is expected at thei r next scheduled sitting in April 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% fre e carried non-participating
interest plus an additional 10% participating inte rest purchased by the State of Mali). The first non-
participating 10% of the State of Mali's ownership w ill entitle it to an annual priority dividend equivalent
to 10% of calendar net income of Fekola SA. The sec ond fully participating 10% of the State of Mali's
interest will entitle it to ordinary dividends payable (o n the same basis as any ordinary dividends declared
and payable to the Company for its 80% interest).
Masbate Gold Mine – The Philippines
The Masbate Mine in the Philippines achieved anot her very strong year in 2017, producing 202,468
ounces of gold, the second-highest annual production ever for the mine (only slightly below its annual
production record of 206,224 ounces of gold achieved in the prior year). Masbate’s 2017 gold production
exceeded the upper end of both its revised and orig inal guidance ranges by 9% (or 17,468 ounces). The
higher production was due to better than expected r ecoveries and grades, mainly driven by significantly
higher than budgeted oxide ore tonnage from the Colo rado Pit. The Masbate Mine also continued its
outstanding safety performance, achieving over two year s (810 days) without a Lost-Time-Injury at year-
end. In the fourth quarter of 2017, the Masbate Mi ne produced 53,419 ounces of gold, significantly above
both budgeted and reforecast production by 24% (or 10,498 ounces).
In July 2017, the Masbate operations were presented with the Philippine Department of Environment and
Natural Resources’ prestigious Saringaya Award fo r its contribution to environmental protection,
conservation and management in the regions surrounding the Masbate Mine.
For the full-year 2017, Masbate’s cash operating costs were $543 per ounce, well below the low end of its
reduced guidance range (of between $595 and $635 pe r ounce), previously lowered by $95 per ounce in
the second quarter of 2017. This was mainly the result of higher than expected production and lower than