Triple-listed B2Gold is well on target to achieve transformational growth in 2018 and has revised its annual gold production guidance higher to between 920,000 and 960,000 oz in 2018 at cash operating costs of between $780 and $830 per oz.
With the new large, low-cost Fekola Mine now in full production, consolidated gold production in the second quarter of 2018 was a quarterly record of 240,093 oz, a significant increase of 98% (or 118,645 oz) over the same period last year and 7% above budget.
In its second full-quarter of commercial operations, the new Fekola Mine continued to operate above plan, producing 112,644 oz of gold in the second quarter of 2018, 11% above budget.
Based on Fekola's strong year-to-date performance, B2Gold has revised Fekola's annual 2018 production guidance range higher to be between 420,000 to 430,000 oz.
Otjikoto Mine also had another solid quarter with both mines exceeding their targeted production levels for the quarter.
Consolidated gold production in the first-half of 2018 was 479,777 oz, 7% above budget and 89% higher than the first-half of 2017.
B2Gold remains 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 production is forecast to be between 920,000 and 960,000 oz.
This represents an increase in annual consolidated gold production of approximately 300,000 oz 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 oz and AISC are expected to decrease by approximately 6% from 2017 and be between $780 and $830 per oz.
With the Fekola Mine in production, the resulting 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.
On average over the next three years, beginning in 2018, B2Gold is projecting per annum gold sales revenues of approximately $1.2 billion, cash flow from operations of approximately $0.5 billion and a significant increase in free cash flow.
Consolidated gold revenue in the second quarter of 2018 was $285 million on sales of 220,738 oz at an average price of $1,290 per oz compared to $164 million on sales of 131,737 oz at an average price of $1,247 per oz in the second quarter of 2017.
This significant increase in revenue of 73% was attributable to the new production from the Fekola Mine and a 3% increase in the average realized gold price, partially offset by lower sales volumes due to the timing of gold shipments from the Otjikoto and Masbate mines.
For the first-half of 2018, consolidated gold revenue was a record $629 million on record sales of 480,575 oz at an average price of $1,309 per oz compared to $311 million on sales of 251,674 oz at an average price of $1,234 per oz in the first-half of 2017.
This significant increase in revenue of 103% was attributable to the new production from the Fekola Mine, a 7% increase in the average realized gold price and the positive impact from the timing of gold shipments.
Consolidated gold revenue in the three and six months ended June 30, 2018 included $15 million and $30 million, respectively, related to the delivery of gold into the company's prepaid sales contracts.
During the three and six months ended June 30, 2018, 12,908 oz and 25,816 oz, respectively, were delivered under these contracts.
Fekola gold mine - Mali
In its second full-quarter of commercial operations the new Fekola Mine in Mali continued to outperform budget, running above plan on mill feed grade, throughput and recoveries.
This resulted in the Fekola Mine producing 112,644 oz of gold in the second quarter of 2018, 11% above budget.
Mill feed grade, throughput and recoveries were 2.77 grams per ton ("g/t"), 1,330,038 tons and 95.3% respectively.
The mining fleet has also performed well throughout the first-half of the year with total mined tonnage nearly 20% above budget.
This added mining production allows for flexibility in developing the Fekola open-pit phases and managing stockpiles.
Current ore stockpiles, including both high and low-grade ore, contain approximately 3.9 Mt averaging 2.0 g/t of gold.
The low-grade ore stockpile is currently scheduled to be processed near the end of the mine life.
The Fekola Mine also continued its outstanding safety performance, achieving 785 days without a Lost-Time-Injury by the end of the second quarter.
For the first-half of 2018, the Fekola Mine produced 226,786 oz of gold, above budget by 11% (or 22,453 oz).
To date, gold production from the Fekola Mine totaled 338,236 oz (including 79,243 oz of pre-commercial production).
Based on Fekola's strong year-to-date performance, B2Gold has revised Fekola's production guidance range higher to be between 420,000 to 430,000 oz of gold at cash operating costs of between $345 and $390 per oz and AISC between $575 and $625 per oz.
As recently announced, the 2018 Mali exploration budget has been increased by $4 million to accelerate the current Fekola North Extension zone drill program, which is extending and infilling mineral resources to the north of the main Fekola deposit.
B2Gold is increasing the number of diamond drills from the current five rigs to eight rigs, as well as one reverse circulation rig and one aircore rig.
Exploration drilling of the Fekola North Extension has now extended gold mineralization over one kilometre north of the Fekola reserve pit boundary.
The drilling to date has indicated that the high-grade mineralized shoot in the Fekola reserve deposit not only continues to be well mineralized over one kilometre to the north, but the shoot has now been intersected higher up, closer to surface than originally projected in the Fekola North Extension zone.
These results and previous drill results indicate that the potential exists, subject to further drilling, to significantly increase open-pit resources and reserves, north of the current Fekola open-pit reserve.
The Fekola North Extension remains open to the north.
Due to the increasing size of the mineralized area, B2Gold now intends to release a new mineral resource for the Fekola deposit including a portion of the Fekola North Extension early in the fourth quarter of 2018.
In addition, based on the positive exploration results to date, B2Gold 's in-house technical team is conducting engineering and other technical studies to ascertain the potential to expand the current Fekola Mine and mill facilities, and increase tonnage throughput, thereby increasing annual gold production, if, as expected, a larger open-pit resource is confirmed by the current exploration and in-fill drilling.
Results of these studies are projected to be available by year-end 2018.
Otjikoto gold mine - Namibia
The Otjikoto Mine in Namibia built on its strong first quarter performance with a similarly successful second quarter, producing 40,678 oz of gold, approximately in-line with budget and comparable with the first quarter of 2017.
The average grade processed in the quarter was 1.49 g/t, compared to budget of 1.56 g/t and 1.50 g/t in the second quarter of 2017.
Mill throughput for the quarter was 860,474 tons compared to budget of 822,740 tons and 867,170 tons in the second quarter of 2017.
Mill recoveries remained high and averaged 98.7%, exceeding budget of 98.0% and 98.6% in the second quarter of 2017.
The grand opening for Otjikoto's new Solar Plant was held on May 29, 2018, and is now providing approximately 13% of the electricity consumed onsite.
For the first-half of 2018, the Otjikoto Mine produced 80,177 oz, above budget by 3% and 4% lower than the first-half of 2017.
In 2018, nearly all of the processed ore will be sourced from the Otjikoto Pit.
Development of the second phase of the Wolfshag Pit continues, from which higher-grade ore production is expected in 2019.
For full-year 2018, the Otjikoto Mine is expected to produce between 160,000 and 170,000 oz, primarily from the Otjikoto Pit, at cash operating costs of between $480 and $525 per oz and AISC of between $700 and $750 per oz.
Looking forward, B2Gold will remain focused on continuing its impressive operational and financial performance from existing mines, paying down debt, pursuing expansion opportunities at existing operations and continuing with aggressive exploration and development programs to unlock the potential of its existing portfolio of properties.