B2Gold Corp achieved record quarterly gold production of 62,972 ounces at the Masbate mine. This was approximately 34%, or almost 16,000 ounces, higher than both budget and production in the fourth quarter of 2013.
Masbate’s new SAG mill, which was installed as planned in the second quarter of 2014, is now running consistently and performing well.
In the fourth quarter of 2014, higher grade oxide material from the Colorado pit was processed with mill feed of approximately 72% oxide and gold grades averaging 1.36 grams/tonne.
Annual gold production increased by approximately 6% in 2014 compared to 2013, even though the Masbate SAG mill was shut down during change-out throughout June 2014. For the full-year the mine produced 186,195 ounces of gold compared to 176,483 ounces in 2013.
The mine is projected to produce approximately 170,000 to 180,000 ounces of gold in 2015 at a cash operating cost of approximately $740 to $775 per ounce. Operating cash costs are expected to decrease, mainly due to lower budgeted prices for consumables (fuel, cyanide and grinding media material) and the change (in mid-2014) from contract mining to self-mining.
Masbate is budgeted to process an average of 17,800 tonnes of ore per day for a total of approximately 6.5 million tonnes for the year, which reflects an optimal throughput level while maximizing gold recoveries. Gold grades processed in 2015 are expected to average 1.13 grams/tonne and gold recoveries are anticipated to average 74.2%. Approximately 34% of the mill feed is budgeted to contain oxide material (with higher gold recoveries) from the Colorado pit.
B2Gold continues with its evaluation of the potential Masbate expansion with additional metallurgical testing. Initial metallurgical results indicate that the optimum grind size should be coarser, and economics are also improved if leach retention time is in excess of 24 hours. Tests to determine the optimum retention time are in progress, and all results will be verified with variability testing.
As a result of test work to date, the company is planning to install additional leach tanks in 2015 to increase leach retention time, and the plant is being operated at a coarser grind size with higher throughput rates. The final throughput evaluation will be completed before the end of the first quarter.
Sustaining capital costs at Masbate are budgeted to total $24.3 million in 2015, consisting of capitalized stripping costs ($8.9 million), land purchases ($3.6 million) and continued mine infrastructure development for low grade and waste placement ($4.3 million) with the balance being general mine infrastructure and equipment. In addition, the company has budgeted non-sustaining/development capital costs of approximately $10 million in 2015 for additional leach tanks to optimize gold recoveries.
The exploration budget for 2015 is approximately $5.4 million including 13,100 metres of drilling. The program includes further drilling in the Pajo area and in the Dabu underground target.
Overall in the fourth quarter B2Gold had record consolidated gold production of 111,804 ounces, or 118,963 ounces including 7159 ounces of pre-commercial production from the Otjikoto mine in December. It had gold revenue of US$122.4 million on sales of 102,612 ounces at an average price of $1193 per ounce.
Company-wide production in 2015 from the newly constructed Otjikoto mine, and the Masbate, La Libertad and Limon mines is expected to be in the range of 500,000 to 540,000 ounces of gold, an increase of approximately 35% over 2014 production. Consolidated cash operating costs are expected to be in the range of $630 to $660 per ounce (2014 guidance range was $667 to $695 per ounce). The substantial increase in consolidated gold production and the reduction in consolidated cash operating costs per ounce reflect the positive impact of new production from the low-cost Otjikoto mine.
For the first half of 2015, gold production is expected to be in the range of 225,000 to 245,000 ounces which will be lower than the gold production in the second half of the year of 275,000 to 295,000 ounces, due to a number of factors including the continued ramp-up at Otjikoto.