B2GOLD is undertaking a metallurgical sampling and analysis program in order to assess the potential for a mill expansion at the Masbate Gold Project with conclusions expected in the fourth quarter of 2014. A mill expansion would allow the company to take advantage of opportunities to process additional ore, allow for full utilization of a new SAG mill and optimize process plant gold recoveries.

The company expects to gain about 300,000 tonnes of annual operating capacity from replacement of the SAG mill at Masbate. Change-out of the mill was expected to occur during June with mill motors and gear boxes upgraded to handle the additional capacity.

March quarter production at Masbate was 42,576 ounces compared to budget of 51,892 ounces. Overall, production guidance for the year remains unchanged at 190,000 to 200,000 ounces at operating cash cost of $765-$800 per ounce.

Gold production was lower than budget, due to a number of factors. At the end of 2013 mine development at Colorado Pit had advanced more slowly than planned. As a result, mill feed in the first quarter contained transitional and primary ore from the HMBE and Main Vein Pits, which have a lower predicted recovery than the oxide ore from the Colorado Pit.

As the Colorado Pit development is expected to catch up to budget in coming months, the high grade oxide ore from Colorado which had been scheduled to be processed in the quarter will be mined and processed later in the year.

In the first quarter of 2013, gold production at Masbate was 43,554 ounces of which 36,467 ounces were included in the consolidated results of B2Gold. The difference related to production from January 1 to January 15, 2013, prior to the acquisition of the Mine by the Company on January 16.

Cash operating costs for the first quarter of 2014 were $723 per ounce, about 4% lower than budget, as a result of less than budgeted waste being mined and high grade ore stockpiling which provided a positive stockpile adjustment against mining costs. Mining of ore was ahead of schedule in the quarter.

High grade ore production significantly exceeded both budget (2,105,576 tonnes compared to budget of 1,530,575 tonnes) and ore tonnes milled, resulting in a stockpile increase. High grade ore production was below budget in terms of grade but significantly above budget in terms of tonnes and ounces. This predominately reflects differences in mining location versus budget schedule.

Total capital expenditures in the first quarter of 2014 totalled $9.5 million, consisting mainly of a tailings dam expansion, construction of a water treatment plant and additions to mining equipment.

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