B2Gold expects that Masbate Mine will meet the lower end of its 2014 production guidance range of 190,000 to 200,000 ounces of gold at an operating cash cost of approximately $765 to $800 per ounce. This forecast follows a change-out of the SAG mill during June which resulted in second quarter production falling by around 4%.
The change-out was successfully completed on time in late June with the new mill now in operation and performing its function flawlessly after a short period of commissioning.
The shutdown of the mill from May 29 to June 28 resulted in second quarter production falling to 36,901 ounces, which was 2920 ounces below budget. During this period mill throughput was reduced by 54%, which was slightly more than expected.
Gold production in the first half of 2014 was 79,477 ounces compared to the budgeted amount of 91,713 ounces. This was slightly lower than the 81,877 ounces produced at Masbate in the first half of 2013, which included 7087 non-attributable ounces for the pre-acquisition period from January 1, 2013 to January 15, 2013.
First half production was lower than budget, due to a number of factors. At the end of 2013, mine development at the Colorado Pit had advanced more slowly than planned. As a result, mill feed in the first-half of 2014 contained transitional and primary ore from the HMBE and Main Vein Pits not anticipated in the budget, 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 the second half of 2014, the high grade oxide ore from Colorado which had been scheduled to be processed will be mined and processed throughout the second half of the year.
B2Gold says the transition from contract mining to self-mining is proceeding smoothly with mining equipment being transferred at the end of the second quarter. Remaining changes include employee movements in the third quarter and transfer of maintenance functions at year-end. www.b2gold.com