Windhoek-B2Gold’s Otjikoto Mine north of Otjiwarongo is forecast to increase production in 2017. The mining company is predicted produce between 165 000 and 175 000 ounces of gold in 2017, compared to 166 285 ounces produced in 2016. Cash operating costs are expected to be between US$510 and US$550 per ounce. The Otjikoto Mine achieved a record annual gold production of 166 285 ounces, 14 percent (or 20 562 ounces) higher than 2015.
The expected cost increase during 2016 is mainly due to higher projected strip ratios at the new Otjikoto Phase 2 pit and the Wolfshag Phase 1 pit. In addition, fuel prices in 2017 are also projected to be higher than 2016. The average strip ratios at Otjikoto are expected to decrease in 2018 and 2019. The All-In Sustaining Cost (AISC), which is an important measure for comparing costs per payable metal unit sold, is expected to be between US$855 and US$885 per ounce in 2017, reflecting higher expected cash operating costs per ounce and capital expenditure.
According to the latest report by B2Gold, the Otjikoto Mine is projected to process 3.3 million tonnes of ore in 2017, with an average grade of 1.59 g/t and recovery of 98 percent. Mill feed is expected to consist of high grade ore from the Otjikoto Phase 2 pit (35 percent) and Wolfshag Phase 1 pit (25 percent). High and medium grade stockpile ore is expected to account for the remainder of the mill feed (40 percent), as the Otjikoto Phase 2 pit is developed.
“Life-of-mine production plans for the Otjikoto Mine, incorporating preliminary projections for the Wolfshag open pit and underground mines, have been completed for various options and will be further refined as the detailed geotechnical, hydrogeological, and design studies are completed in 2017. Ongoing studies are leading the company to re-evaluate the open pit and underground interface,” reads the report.
B2Gold says that for 2017, sustaining capital costs at the Otjikoto Mine are estimated to be US$37.1 million, including US$15 million for capitalised pre-stripping costs, US$10.4 million for mine fleet additions and US$6 million for major equipment rebuilds. The company expects US$10 million of the Otjikoto mine fleet expansion purchases to be lease financed.
“To advance stripping at both the Otjikoto and Wolfshag pits the mining fleet will be increased by an additional 250-tonne excavator along with additional haul trucks and support equipment. Non-sustaining capital costs are budgeted to be US$12.7 million which includes US$8.5 million for phase one of the construction of a solar power plant.
The solar power plant is expected to reduce fuel consumption and protect against rising oil prices,” the report states.
B2Gold’s total exploration budget for Namibia in 2017 is US$5.1 million mainly for 5 000 metres of diamond drilling on the Otjikoto licence area, 12 000 metres of diamond drilling and 5 000 metres of RAB drilling on the Ondundu joint venture project. Drilling at Ondundu in 2016 defined a distinct North South zone of mineralisation with holes containing up to 3.10 g/t gold over 68.4 metres drilled. An additional 5 000 metres of diamond and RC drilling are committed to new targets in and around the Otjikoto area.
The report further shows that B2Gold’s overall operations, including mines elsewhere in the world, produced a record annual consolidated gold revenue of US$683.3 million on record sales of 548 281 ounces at an average price of US$1 246 per ounce in 2016. Full-year consolidated cash operating costs are expected to be near the low end of the reduced cost guidance range of between US$500 and US$535 per ounce while the initial guidance range was between US$560 and US$595 per ounce.
The full-year’s AISC is also expected to be near the low-end of the reduced guidance range of between US$780 and US$810 per ounce while the initial guidance range was between US$895 and US$925 per ounce.
“B2Gold achieved another record year of consolidated gold production in 2016 (for the eighth straight year) producing 550 423 ounces of gold, near the mid-point of its revised production guidance range (of 535 000 to 575 000 ounces) and surpassing its initial guidance range (of 510 000 to 550 000 ounces). Gold production for the year also increased by 12 percent (or 57 158 ounces) over 2015. The record performance in 2016 reflects the record performances from the company’s Masbate (Philippines) and Otjikoto mines, both setting new annual production records in 2016. The Company’s La Libertad Mine (Nicaragua) also met its production guidance, with 2016 production near the high end of its production guidance range,” the report reads.
For 2017, B2Gold is projecting another solid year with consolidated gold production expected to be in the range of between 545 000 and 595 000 ounces (including estimated pre-commercial production from Fekola in the Philippines of between 45 000 and 55 000 ounces).