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B2Gold has revealed that its decrease in 2021’s production forecast is attributable to lower expected production from Fekola in 2021 (as Phase 5 and 6 of the Fekola Pit are developed in the first half of 2021), partially offset by an expected overall 16% increase in production from Otjikoto.
The Company’s total gold production is forecast to be between 970,000 – 1,030,000 oz (including 50,000– 60,000 oz attributable oz projected from Calibre) in 2021 (compared to the total production of 1,040,737 ounces in 2020).
For 2021, the Company’s consolidated gold production from its three operating mines is forecast to be between 920,000 – 970,000 oz, lower than 2020 consolidated production of 995,258 oz by approximately 5%.
Fekola’s 2021 production forecast (of between 530,000 – 560,000 oz), however, does not include the potential upside to increase Fekola’s gold production in 2021 from additional mining areas and processing capacity currently being investigated.
Gold production at the Masbate Mine is forecast to be comparable to 2020.
For 2021, the Company’s total consolidated cash operating costs (including forecast cash operating costs from B2Gold’s attributable 33% share of Calibre production) are forecast to be between $500 – $540 per oz (compared to 2020 guidance of between $415 – $455 per oz) and total consolidated AISC are forecast to be between $870 – $910 per oz (compared to 2020 guidance of between $780 – $820 per oz).
The Company’s consolidated cash operating costs from its three operating mines are forecast to be between $480 – $520 per oz (compared to 2020 guidance of between $395 – $440 per oz) and consolidated AISC are forecast to be between $860 – $900 per oz (compared to 2020 guidance of between $765 – $805 per oz).
Consolidated AISC per ounce is expected to increase by approximately 12% in 2021, mainly due to the planned lower production and higher period stripping activities at Fekola (partially offset by higher production at Otjikoto), higher forecast fuel costs, import duties and ongoing COVID-19 related labour and medical costs in Mali, and the drawdown of ore stockpiles at Otjikoto.
The Company’s consolidated gold production from its three operating mines is expected to be significantly weighted to the second half of 2021, due to the planned significant waste stripping at both the Fekola and Otjikoto Mines in the first half of 2021 (for Phase 5 and Phase 6 of the Fekola Pit, and Phase 3 of the Wolfshag and Otjikoto Pits).
For the first half of 2021, consolidated gold production is expected to be between 365,000 – 385,000 oz, which is expected to increase significantly to between 555,000 – 585,000 oz during the second half of 2021 (when mining reaches the higher-grade portion of Phase 5 of the Fekola Pit and Phase 3 of the Wolfshag Pit).
Based mainly on the weighting of production and timing of stripping, consolidated cash operating costs are expected to be between $620 – $660 per oz in the first half of 2021, before significantly improving to between $380 – $420 per oz during the second half of 2021.
In addition, consolidated AISC is expected to be between $1,040 – $1,080 per oz in the first half of 2021, before significantly improving to between $745 – $785 per oz during the second half of 2021.
Fekola gold mine – Mali
The low-cost Fekola Mine in Mali is expected to produce between 530,000 – 560,000 oz of gold in 2021 at cash operating costs of between $405 – $445 per oz and AISC of between $745 – $785 per oz.
Fekola’s gold production is forecast to be lower in 2021, due to waste stripping and lower mined ore grades expected in the first half of 2021, as Phase 5 and 6 of the Fekola Pit are developed.
However, additional mining areas and processing capacity are currently being investigated, with the potential to increase Fekola’s budgeted 2021 and long-term gold production.
The nearby Cardinal (located within 500 metres of the current Fekola resource pit) and Anaconda area (located 20 kilometres north of Fekola) include both saprolite and hard-rock gold mineralization, with the potential to begin mining in 2021, subject to obtaining all necessary permits. Grade control drilling is already underway at a portion of the Cardinal deposit to enable ore to be mined for processing at the Fekola mill in the second quarter of 2021.
In addition, mill processing trials conducted in the fourth quarter of 2020 demonstrate the potential to optimize the grind-throughput capacity of the expanded facility and increase hard-rock throughput to approximately 8.0 Mtpa, and support the addition of saprolite ore tonnage in excess of the hard-rock capacity.
Fekola’s AISC per ounce are expected to increase in 2021 (compared to 2020 guidance of $555 – $595 per oz), mainly due to the planned lower production and higher period stripping activities at Fekola, and higher forecast fuel costs, import duties and ongoing COVID-19 related labour and medical costs.
For 2021, the Fekola Mine is budgeted to process a total of 7.75 Mt of ore, at an average grade of 2.32 g/t and process gold recovery of 94%. With Phase 4 of the Fekola Pit completed in 2020, the ore is scheduled to be sourced from Phase 5 and 6 of the Fekola Pit in 2021 together with existing stockpiles.
As a result of the planned waste stripping and lower mined ore grades in the first half of 2021, as Phase 5 and 6 of the Fekola Pit are developed, production is expected to be significantly weighted to the second half of 2021 (when mining reaches the higher-grade portion of Phase 5 of the Fekola Pit).
For the first half of 2021, Fekola’s gold production is expected to be between 220,000 – 230,000 oz, which is expected to increase significantly to between 310,000 – 330,000 oz during the second half of 2021.
Based mainly on the weighting of production and timing of waste stripping, Fekola’s cash operating costs are expected to be between $530 – $570 per oz in the first half of 2021, before significantly improving to between $315 – $355 per oz during the second half of 2021.
In addition, Fekola’s AISC are expected to be between $850 – $890 per oz in the first half of 2021, before significantly improving to between $670 – $710 per oz during the second half of 2021.
Sustaining capital costs in 2021 at the Fekola Mine are budgeted to total $86 million, including $58 million for pre-stripping (development of Phase 5 and 6 of the Fekola Pit), $15 million for mobile equipment rebuilds and $4 million for pit dewatering infrastructure and equipment.
Non-sustaining capital costs are budgeted to total $8 million to complete the solar power plant (excluding the damages related to the fire).
Otjikoto gold mine – Namibia
The Otjikoto Mine in Namibia is expected to produce between 190,000 – 200,000 oz of gold in 2021, a significant increase of approximately 16% (compared to 168,041 oz produced in 2020), and is in the range of Otjikoto’s annual production record (of 191,534 oz achieved in 2017), as high-grade ore is scheduled to be sourced from Phase 3 of the Wolfshag Pit in the second half of 2021.
Otjikoto’s cash operating costs are forecast to be between $480 – $520 per oz and AISC to be between $830 – $870 per oz. Otjikoto’s AISC per ounce are expected to decrease in 2021 (compared to 2020 guidance of between $1,010 – $1,050 per oz), mainly due to higher production and lower capitalized pre-stripping costs forecast at Otjikoto in 2021, partially offset by the cost of ore stockpiles drawn in the year.
For 2021, Otjikoto is budgeted to process a total of 3.4 million tonnes of ore at an average grade of 1.77 g/t with process gold recovery of 98%. Mining activities are scheduled to focus on waste stripping in Phase 3 of the Wolfshag Pit and Phase 3 of the Otjikoto Pit in the first half of 2021.
In the first half of 2021, the ore is scheduled to be sourced mainly from medium grade stockpiles, resulting in an average head grade of approximately 0.87 g/t in the first half of 2021, compared to a head grade of approximately 2.67 g/t in the second half of 2021 when high-grade ore from Phase 3 of the Wolfshag Pit is available.
The Wolfshag ore zone is narrow and high grade, with pit and phase strip ratios that result in a highly variable gold production profile. Approximately 70% of the gold produced in 2021 is expected to be mined from Phase 3 of the Wolfshag Pit, (with material ore production starting early in the third quarter of 2020 following the waste stripping campaign).
As a result of the timing of this high-grade ore mining, Otjikoto’s production is expected to be significantly weighted to the second half of 2021. For the first half of 2021, Otjikoto’s gold production is expected to be between 45,000 – 50,000 oz, which is expected to increase significantly to between 145,000 – 150,000 oz during the second half of 2021.
Based mainly on the weighting of the planned production and timing of higher waste stripping, Otjikoto’s cash operating costs are expected to be between $940 – $980 per oz in the first half of 2021, before significantly improving to between $330 – $370 per oz during the second half of 2021.
In addition, Otjikoto’s AISC are expected to be between $1,600 – $1,640 per oz in the first half of 2021, before significantly improving to between $580 – $620 per oz during the second half of 2021.
In the first quarter of 2021, forecast gold production at Otjikoto is lower and forecast costs are higher than the second quarter of 2021, due to the significant amount of waste stripping and lower stockpile grades processed early in the year.
Otjikoto’s higher 2021 gold production level of between 190,000 – 200,000 oz is expected to continue through to 2024, as production from Wolfshag underground is expected to commence in early 2022 and will supplement ore from the Otjikoto Pit as well as existing medium and low-grade stockpiles for approximately three years based on current estimates.
Sustaining capital costs in 2021 at the Otjikoto Mine are budgeted to total $44 million, including $36 million for capitalized pre-stripping and $7 million for mobile equipment rebuilds and equipment purchases.
Non-sustaining capital costs are budgeted to total $33 million, including $26 million for development of the Wolfshag underground project and $7 million for a connection to the national power grid, originally planned for 2020, and delayed due to COVID-19.
The delay in connecting to the national power grid to 2021 is not expected to impact the targeted commissioning date of the Wolfshag underground mine.
Development of the Wolfshag underground mine continues to progress well and on schedule.
This project is expected to bring forward production of high-grade ore from the Wolfshag deposit and reduce production costs. The mine development will also provide access for down-plunge and parallel exploration and has been designed to support future expansions.
Project spending is currently estimated to total $57 million (of which $26 million is budgeted to be incurred in 2021) from completion of the internal study to the production of stope ore.
Portal development was completed in 2020, and activities in 2021 will focus on horizontal and vertical development to produce stope ore in the first quarter of 2022.
The current Wolfshag underground Mineral Reserve estimate includes 1.2 million tonnes of ore at an average grade of 5.57 g/t, for a total of 210,000 contained ounces of gold.
Kiaka project budget – Burkina Faso
The Company is currently updating the existing feasibility study for the Kiaka Project in Burkina Faso, due to the potential for improved economics resulting from lower fuel prices, alternative power options and a higher gold price.
An updated resource model was completed in December 2019, providing the basis for detailed mining and processing schedules. Initial evaluations have indicated an optimal processing rate of 12 Mtpa.
Engineering of the plant, infrastructure, open pit, dumps, stockpiles, and the tailing storage facility are underway. The Company expects to have completed an updated economic assessment of the project for internal review completed by the end of the first quarter of 2021, followed by the updated feasibility study by mid-year 2021.
The 2021 budget for the Kiaka Project is $5.4 million.
