Gold
Fekola project in Mali
B2Gold expects to hit commercial production at Fekola by end-November – four months ahead of the original schedule and one month ahead of its revised schedule.

Triple-listed B2Gold had completed construction of the Fekola mill on budget and commenced ore processing at the Fekola mine more than three months ahead of schedule – achieving first gold pour on 7 October.

The Fekola mill started processing ore on 24 September and treated 57 695 t of ore at a grade of 3.54 g/t over the remainder of the month of September with a gold recovery of 96.6%, producing 6 340 oz of in-circuit gold inventory. Commissioning of the mill is ongoing and is expected to ramp up quickly to achieve commercial production.

During October, the first full month of ramp up and pre-commercial production, the Fekola mill treated 324 525 t of ore (budgeted – 225 804 t) at an average grade of 3.40 g/t (budgeted – 2.33 g/t) with a gold recovery of 95.4% (budgeted – 90.0%), producing a total of 33 946 oz of gold in the month (budget of 15 100 oz) surpassing all but one of its budgeted figures.

Mill availability was 75% (budgeted – 50%) and the mill was operating at design throughput of 607 tph during the latter half of the month.

Gold production forecasts

For 2017, B2Gold is projecting gold production from Fekola to exceed its reforecast production guidance range of between 50 000 and 55 000 ounces (at an expected cash operating cost of US$580 to $620/oz).

2018 is scheduled to be the first full year of gold production at Fekola, yielding 400 000 to 410 000 oz for the year at a cash operating cost of approximately $354/oz of gold and AISC of $609/oz of gold.

Updated LoM production plan

Based on the new LoM plan, the Fekola mine is projected to produce approximately 400 000 ozpa of gold for the first three years at cash operating costs of $357/oz and AISC of $604/oz.

For the first seven years, the Fekola mine is projected to produce approximately 374 000 ozpa of gold 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 ozpa at cash operating costs of $428/oz and AISC of $664/oz.

These impressive production levels and low costs will 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 $1 275/oz). 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.

Well within budget

The Fekola project’s capital expenditures for the three and nine months ended 31 September 2017 totalled $65.3 million and $208.1 million, respectively, versus a total budget of $64.7 million and $210.6 million, respectively.

Expenditures for the Fekola project to date were $579.2 million, including construction costs, Fekola mill expansion, Fadougou relocation, pre-stripping, additional mine fleet purchases and $41 million of preconstruction expenditures.

The total Fekola project costs to date of $579.2 million are approximately $8 million less than the project budget to date of $587 million.

Ongoing Fekola exploration

Based on exploration to date, B2Gold’s exploration team believes there is significant potential to increase the mine life of Fekola through further exploration drilling.

The $15 million 2017 exploration drill programme is ongoing at the Fekola property and regional area. The drilling is focused on testing the potential extension of the Fekola deposit to the north and the mineralized bedrock zones beneath the Anaconda saprolite resource on the Fekola project area.

Infill drilling continues on the resources outlined immediately below the Fekola reserve boundary, immediately to the north of the boundary and the near-surface portion of the Kiwi zone (to the north, now part of Fekola).

The company estimates that it could add up to 900 000 oz of gold, consisting of 720 000 oz from the existing indicated category and 180 000 oz from the existing inferred category to the Fekola mine plan with further infill drilling.

Outlook

For the foreseeable future, B2Gold’s strategy will be to focus on the Fekola mine, ramp up to full production, aggressive exploration to determine the ultimate size of the Fekola deposit, test other exploration targets in the Fekola area, and exploration and development studies at its other mines and identified targets. Positive results from the aggressive 2017 exploration drilling programms at Fekola will be released in due course.

Feature image credit: B2Gold