B2Gold Reports Strong Second Quarter 2019 Results; Record Quarterly Gold Production of 246,000 oz, 8% Above Budget; Beat Against Budget for Cash Operating Costs and AISC
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News Release
B2Gold Reports Strong Second Quarter 2019 Results;
Record Quarterly Gold Production of 246,000 oz, 8% Above Budget;
Beat Against Budget for Cash Operating Costs and AISC
Vancouver, August 6 , 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 second
quarter and first-half of 2019. All dollar figures are in United States dollars unless otherwise indicated.
On July 2, 2019, B2Gold and Calibre Mining Corp. ("Calibre") announced that they had entered into an
agreement for B2Gold to restructure its interests in, and for Calibre to acquire, El Limon and La Libertad
mines (see “B2Gold and Calibre Join Forces in Nicaragua” section below). The Company expects the sale
to be completed early in the fourth quarter of 2019. Accordingly, the Company has classified its El Limon
and La Libertad mines as discontinued operations for the three and six months ended June 30, 2 019 and
2018 for financial reporting purposes.
2019 Second Quarter Highlights
• Record quarterly consolidated gold production of 246,020 ounces (including El Limon and La Libertad)
well-above budget by 8% (17,194 ounces) and 2% (5,927 ounces) over the same period last year with
solid performances from all the Company’s operations
• Consolidated gold revenue s from continuing operations of $267 million on sales of 203,700 ounces
(5% or 9,591 ounces above budget); consolidated gold revenues of $310 million on sales of 236,282
ounces, including gold sales from El Limon and La Libertad
• Consolidated cash operating costs (see “Non-IFRS Measures”) from continuing operations of $456
per ounce produced ($468 per ounce sold), below budget by $42 per ounce (8%); including El Limon
and La Libertad, consolidated cash operating costs of $529 per ounce produced ($543 per ounce
sold), below budget by $37 per ounce (7%)
• Consolidated all-in sustaining costs (“AISC”) (see “Non-IFRS Measures”) from continuing
operations of $807 per ounce sold, well-below budget by $87 per ounce (10%); including El Limon
and La Libertad, consolidated AISC of $914 per ounce sold, below budget by $37 per ounce (4%)
• Consolidated cash flow provided by operating activities of $93 million ($0.09 per share) (including $9
million from discontinued operations) compared to $86 million ($0.09 per share) (including $6 million
from discontinued operations) in the prior-year quarter
• Net income from continuing operations of $ 45 million ($0.04 per share); net income of $ 41 million
($0.04 per share); adjusted net income (see “Non-IFRS Measures”) of $52 million ($0.05 per share)
• New large-scale off-grid Fekola Solar Plant Project approved by the B2Gold Board, scheduled for
completion in August 2020 ; expected to provide significant operating cost reductions (estimated to
reduce Fekola’s processing costs by approximately 7%)
• Otjikoto Mine continued its remarkable safety performance, extending the number of days without a
lost-time-injury (“LTI”) to 488 days (3.8 million man-hours) at the end of the second quarter of 2019
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• On July 2, 2019, B2Gold and Calibre announced that they have agreed to join forces in Nicaragua and
have entered into an agreement for B2Gold to restructure its interests in, and for Calibre to acquire, El
Limon and La Libertad gold mines for aggregate consideration of $100 million
2019 First-Half Highlights
• Consolidated gold production of 476,879 ounces (including El Limon and La Libertad) , 7% (29,898
ounces) above budget
• Consolidated gold revenue s from continuing operations of $531 million on sales of 407,100 ounces
(7% or 27,581 ounces above budget); consolidated gold revenues of $612 million on sales of 468,358
ounces, including gold sales from El Limon and La Libertad
• Consolidated cash operating costs from continuing operations of $455 per ounce produced ($462 per
ounce sold), below budget by $43 per ounce (9%); including El Limon and La Libertad, consolidated
cash operating costs of $538 per ounce produced ($544 per ounce sold), below budget by $31 per
ounce (5%)
• Consolidated AISC from continuing operations of $775 per ounce sold, significantly below budget by
$103 per ounce (12%); including El Limon and La Libertad, consolidated AISC of $882 per ounce
sold, well-below budget by $83 per ounce (9%)
• Consolidated cash flow provided by operating activities of $179 million ($0.18 per share) (including
$11 million from discontinued operations)
• Net income from continuing operations of $80 million ($0.0 7 per share); net income of $68 million
($0.06 per share); adjusted net income of $90 million ($0.09 per share)
• On March 26, 2019, the Company announced 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 assumed base rate of 6 Mtpa
• For full-year 2019, B2Gold remains well posi tioned 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 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 ; if the anticipated sale of the Company's
Nicaraguan operations to Calibre is completed early in the fourth quarter of 2019, and the Company
maintains a 31% interest in Calibre post transaction thereafter, as anticipated, the Company anticipates
that it will still meet the low end of the Company's consolidated production guidance ranges for 2019
2019 Second Quarter and First-Half Operational Results
Including El Limon and La Libertad, c onsolidated gold production in the second quarter of 2019 was a
quarterly record of 246,020 ounces , well-above budget by 8% (17,194 ounces) with solid performances
from all the Company’s operations. Gold production from the Company’s Fekola, Masbate, Otjikoto and
La Libertad mines all exceeded their targeted production, with El Limon’s production in-line with budget.
The Fekola Mine in Mali and the Masbate Mine in the Philippines continued their very strong operational
performances, with both significantly above their budgeted production for the quarter. For the second
quarter of 2019, the Fekola Mine produced 113,897 ounces of gold, exceeding budget by 10% (10,272
ounces), and the Masbate Mine produced 57,572 ounces of gold, exceeding budget by 7% (3,587 ounces).
Compared to the prior -year quarter, gold production increased by 2% (5,927 ounces). Consolidated gold
production from continuing operations totaled 208,890 ounces in the second quarter of 2019.
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Consolidated cash operating costs from continuing operations in the quarter were $456 per ounce produced
($468 per ounce sold) (Q2 2018 - $410 per ounce produced) , below budget by $ 42 per ounce (8%). The
favourable budget variance was mainly attributable to higher-than-budgeted production. Compared to the
prior-year quarter, consolidated cash operating costs were higher mainly due to the lower grade ore tonnage
processed at Fekola (as a result of Fekola's significantly higher -than-budgeted mill throughput) and lower
operating costs incurred by Fekola during the start -up phase in the second quarter of 2018. In additi on,
operating costs at the other locations were higher in the second quarter of 2019, as anticipated, due to higher
fuel costs and labour cost increases. Including El Limon and La Libertad, consolidated cash operating costs
for the quarter were $529 per ounce produced ($543 per ounce sold).
Consolidated AISC from continuing operations in the quarter were $807 per ounce sold (Q2 2018 - $654
per ounce sold), well-below budget by $87 per ounce (10%), primarily resulting from lower-than-budgeted
cash operating costs noted above together with lower-than-planned sustaining capital expenditures .
Compared to the prior year quarter, consolidated AISC were higher as a result of the increased cash
operating costs noted above and the timing of Otjikoto’s pre-stripping activities, weighted towards the first-
half of the year. I ncluding El Limon and La Libertad , consolidated AISC for the quarter were $ 914 per
ounce sold.
Consolidated gold production from continuing operations totaled 409,432 ounces in the first-half of 2019.
Including El Limon and La Libertad, c onsolidated gold production in the first -half of 201 9 was 476,879
ounces, 7% (29,898 ounces) above budget and comparable with the first-half of 2018.
For the first -half of 201 9, consolidated cash operating costs from continuing operations were $455 per
ounce produced ($462 per ounce sold) (Q2 2018 - $403 per ounce produced) , below budget by $ 43 per
ounce (9%). Including El Limon and La Libertad mines, consolidated cash operating costs for the first-half
of 2019 were $538 per ounce produced ($544 per ounce sold).
Year-to-date, consolidated AISC from continuing operations were $775 per ounce sold (YTD 2018 - $637
per ounce sold), significantly below budget by $103 per ounce (12%). Including El Limon and La Libertad
mines, consolidated AISC for the first-half of 2019 were $882 per ounce sold. AISC were lower-than-
budget as a result of higher gold ounces sold than budgeted and lower -than-budgeted sustaining capital
expenditures resulting from a combination of timing differences and lower than expected pre-stripping costs
of which $11 million is not expected to be incurred as previously budgeted.
Given the gold production outperformance in the fir st-half 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 . With the gold production
outperformance experienced in the first -half of 2019, the Company now expects that consolidated
production will be less significantly weighted towards the second-half of the year. Consolidated cash costs
are projected to remain low in 2019 with cash operating costs forecast to be between $520 and $560 per
ounce and AISC forecast to be between $835 and $875 per ounce. If the anticipated sale of the Company's
Nicaraguan operations to Calibre is completed early in the fourth quarter of 2019, and the Company
maintains a 31% interest in Calibre post transaction thereafter, as anticipated, the Company expects that it
will meet the low end of the Company's consolidated production guidance range for 2019. In addition, the
Company anticipates that it will meet its 2019 consolidated cash cost and AISC guidance ranges.
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B2Gold and Calibre Join Forces in Nicaragua
On July 2, 2019 (see news release dated 7/2/2019), B2Gold and Calibre announced that they had entered
into an agreement for B2Gold to restructure its interests in, and for Calibre to acquire, El Limon and La
Libertad gold mines, the Pavon gold project, and additional mineral concessions in Nicaragua (collectively,
the “Nicaraguan Assets”) held by B2Gold for aggregate consideration of $100 million, which will be paid
with a combination of cash, common shares and a convertible debenture. Following the completion of the
transaction, B2Gold will own an approx imate 31% direct equity interest in Calibre. B2Gold's ongoing
commitment to continuing involvement with the Nicaraguan operations will be secured by its significant
equity interest in Calibre, its right to appoint one director to the Board of Calibre and its participation in an
Advisory Board to the main Board of Calibre . The closing of th is transaction will be subject to certain
conditions including majority of minority shareholder approval, the closing of the concurrent private
placement by Calibre (for gross proceeds of up to CDN$100 million) and other customary closing
conditions. The Company expects the sale to be completed early in the fourth quarter of 2019.
2019 Second Quarter and First-Half Financial Results
Consolidated gold revenue from continuing operations for the second quarter of 2019 was $267 million on
sales of 203,700 ounces at an average price of $1,312 per ounce compared to $242 million on sales of
188,029 ounces at an average price of $1,289 per ounce in the second quarter of 2018. The increase in gold
revenue of $25 million (10%) was attributable to an 8% increase in the gold ounces sold and a 2% increase
in the average realized gold price. Including gold sales from El Limon and La Libertad, consolidated gold
revenue totaled $310 million in the quarter on sales of 236,282 ounces at an average realized price of $1,313
per ounce.
Cash flow provided by operating activities in the second quarter of 2019 totaled $93 million ($0.09 per
share) (including $9 million from discontinued operations ) compared to $86 million ($0.09 per share)
(including $6 million from discontinued operations) in the prior-year quarter. The increase mainly reflects
higher gold revenue, partially offset by higher income tax installment payments for Fekola.
Net income from continuing operations in the quarter was $45 million ($0.04 per share) compared to $28
million ($0.03 per share) in the same period last year. For the second quarter of 2019, the Company
generated net income of $41 million ($0.04 per share) (including Nicaragua) compared to $21 million
($0.02 per share) in the second quarter of 2018. Adjusted net income for the second quarter of 2019 was
$52 million ($0.05 per share) compared to $46 million ($0.05 per share) in the second quarter of 2018.
For the first-half of 2019, consolidated gold revenue from continuing operations was $531 million on sales
of 407,100 ounces at an average price of $1,305 per ounce compared to $540 million on sales of 413,458
ounces at an average price of $1,307 per ounce in the first-half of 2018. The decrease in gold revenue was
attributable to a 2% decrease in the gold ounces sold. Including gold sales from El Limon and La Libertad,
consolidated gold revenue totaled $612 million in the first-half of 2019 on sales of 468,358 ounces at an
average realized price of $1,307 per ounce.
Cash flow provided by operating activities in the first-half of 2019 totaled $179 million ($0.18 per share)
(including $11 million from discontinued operations) compared to $233 million ($0.24 per share) (including
$15 million from discontinued operations ) in the first -half of 2018 . The decrease mainly reflects higher
income tax installment payments for Fekola, as well as lower gold revenue and higher production costs.
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Net income from continuing operations in the first-half of 2019 was $80 million ($0.07 per share) compared
to $94 million ($0.09 per share) in the same period last year. For the first -half of 2019, the Company
generated net income of $68 million ($0.06 per share) (including Nicaragua) compared to $79 million
($0.08 per share) in the first -half of 2018. Adjusted net income for the first -half of 2019 was $90 million
($0.09 per share) compared to adjusted net income of $104 million ($0.11 per share) in the first -half of
2018.
Liquidity and Capital Resources
At June 30, 2019, the Company had cash and cash equivalents of $114 million ($124 million including $10
million of cash associated with discontinued operations) compared to cash and cash equivalents of $103
million at December 31, 2018. Working capital at June 30, 2019 was $192 million ($227 million including
$35 million of working capital associated with discontinued operations) compared to $156 million at
December 31, 2018.
During the six months ended June 30, 2019, the Company made repayments of $25 million on the revolving
credit facility (“RCF”). At June 30, 2019, the Company had drawn $375 million under the $600 million
RCF, leaving an undrawn and available balance under the existing facility of $225 million.
On May 10, 2019, the Company entered into a revised RCF agreement with 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 included increased flexibility for permitted borrowings and equipment
financings, coupled with less onerous financial covenants and lower pricing. The revised RCF bears interest
on a sliding scale of between LIBOR plus 2.125% to 2.75% based on the Company’s consolidated net
leverage ratio. Commitment fees for the undrawn portion of the facility are also on a similar sliding scale
basis of between 0.48% and 0.62%. The term of the revised RCF is four years, maturing on May 9, 2023.
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 an d
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 development and exploration projects and evaluate
exploration opportunities.
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Operations
Mine-by-mine gold production (ounces) and gold sales (ounces) in the second quarter and first-half of 2019
were as follows (presented on a 100% basis):
Mine Q2 2019
Gold
Production
(ounces)
Q2 2019
Gold
Sales
(ounces)
First-Half
2019
Gold
Production
(ounces)
First-Half
2019
Gold
Sales
(ounces)
Full-year 2019
Forecast Gold
Production
(ounces)
Fekola 113,897 106,200 224,246 222,000 420,000 -
430,000
Masbate 57,572 62,100 115,053 112,500 200,000 -
210,000
Otjikoto 37,421 35,400 70,133 72,600 165,000 -
175,000
From
Continuing
Operations
208,890 203,700 409,432 407,100 785,000 -
815,000
La Libertad 25,672 22,791 43,758 40,063 95,000 -
100,000
El Limon 11,458 9,791 23,689 21,195 55,000 -
60,000
From
Discontinued
Operations
37,130 32,582 67,447 61,258 150,000 -
160,000
B2Gold
Consolidated 246,020 236,282 476,879 468,358 935,000 -
975,000
Mine-by-mine cash operating costs (on a per ounce of gold sold basis) in the second quarter and first-half
of 2019 were as follows (based on the total operations at the mines B2Gold operates):
Mine Q2 2019
Cash Operating Costs
($ per ounce sold)
First-Half 2019
Cash Operating Costs
($ per ounce sold)
2019 Annual Guidance
Cash Operating Costs
($ per ounce sold)
Fekola $373 $386 $370 - $410
Masbate $566 $557 $625 - $665
Otjikoto $582 $549 $520 - $560
From Continuing
Operations $468 $462 $465- $505
La Libertad $1,030 $1,144 $840 - $880
El Limon $973 $983 $720 - $760
From Discontinued
Operations $1,013 $1,088 $795 - $835
B2Gold Consolidated $543 $544 $520 - $560
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Mine-by-mine cash operating costs (on a per ounce of gold produced basis), in the second quarter and first-
half of 2019 were as follows (based on the total operations at the mines B2Gold operates):
Mine Q2 2019
Cash Operating Costs
($ per ounce produced)
First-Half 2019
Cash Operating Costs
($ per ounce produced)
Fekola $367 $375
Masbate $570 $538
Otjikoto $554 $576
From Continuing
Operations $456 $455
La Libertad $936 $1,110
El Limon $953 $916
From Discontinued
Operations $941 $1,042
B2Gold Consolidated $529 $538
Mine-by-mine AISC per ounce (on a per ounce of gold sold basis) in the second quarter and first -half of
2019 were as follows (based on the total operations at the mines B2Gold operates):
Mine Q2 2019
AISC
($ per ounce sold)
First-Half 2019
AISC
($ per ounce sold)
2019 Annual Guidance
AISC
($ per ounce sold)
Fekola $625 $619 $625 - $665
Masbate $749 $746 $860 - $900
Otjikoto $1,174 $997 $905 - $945
From Continuing
Operations $807 $775 $745 - $785
La Libertad $1,577 $1,607 $1,150 - $1,190
El Limon $1,617 $1,567 $1,005 - $1,045
From Discontinued
Operations $1,589 $1,593 $1,095 - $1,135
B2Gold Consolidated $914 $882 $835 - $875
Fekola Gold Mine - Mali
The Fekola Mine in Mali continued its very strong operational performance with second quarter gold
production of 113,897 ounces (Q2 2018 - 112,644 ounces), well-above budget by 10% (10,272 ounces) as
the Fekola processing facilities continued to outperform. The operation continued to demonstrate sustained
high processing throughput without reduced recoveries.
For the second quarter of 2019, mill throughput was 1.8 million tonnes, exceeding budget by 34% and the
prior-year quarter by 37%. The average grade processed was 2.07 grams per tonne ("g/t") together with
average gold recoveries of 94.4%. Continuing the trends set in the first quarter of the year, processing of
ore with favourable metallurgical characteris tics (including oxidized saprolite ore ) combined with finer
than budgeted feed size from the primary crusher (due to a combination of better ore fragmentation in the
pit and softer low-grade ore) has allowed for the processing of additional lower grade ore from stockpile
and run -of-mine sources, beyond what was originally budgeted. This has resulted in a lower average
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processed grade, but also a significant increase in gold production along with marginally increased cash
operating costs per ounce. Gold tonnage and grade continue to reconcile well with the resource model.
Fekola’s second quarter cash operating costs were $367 per ounce produced ($373 per gold ounce sold)
(Q2 2018 - $318 per ounce produced), below budget by $33 per ounce (8%). This was mainly the result of
higher-than-budgeted gold production partially offset by higher costs per ounce for the additional higher-
than-budgeted lower grade ore tonnage processed during the quarter as discussed ab ove. Total costs of
production were on budget. Compared to the prior-year quarter, cash operating costs were higher due to the
additional higher -than-budgeted lower grade material being processed during the quarter and lower
operating costs incurred by Fekola during the start-up phase in the second quarter of 2018. Fekola’s AISC
for the quarter were $625 per ounce sold (Q2 2018 - $453 per ounce sold), well-below budget by $82 per
ounce (12%).
For the first-half of 2019, the Fekola Mine produced 224,246 ounces of gold, above budget by 8% (16,996
ounces) and comparable with the first-half of 2018.
Fekola’s cash costs remained below budget in the first -half of the year with cash operating costs of $375
per ounce produced ($386 per gold ounce sold) (YTD 2018 - $293 per ounce produced), $9 per ounce below
budget, and AISC of $619 per ounce sold (YTD 2018 - $464 per ounce sold), $57 per ounce (8%) below
budget.
Capital expenditures in the second quarter of 2019 totaled $13 million, mainly consisting of $4 million for
pre-stripping, $4 million in costs related to the processing and mining expansions, $2 million for Fadougou
Village relocation costs and $1 million for capitalized mobile equipment rebuilds. Capital expenditures in
the first-half of 2019 totaled $34 million mainly consisting of $9 million for pre -stripping, $7 million to
complete relocation of Fadougou Village, $5 million for mining equipment, $5 million related to the
processing and mining expansions and $3 million for capitalized equipment rebuilds.
For full-year 2019, the Fekola Mine production is expected to be at the high end of its guidance range of
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.
Fekola Mine Expansion
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 an assumed base rate 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 in creases 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 approximately five million 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,