Increased production at the Masbate Gold Project in the Philippines contributed to record June quarter production for B2 Gold. The company produced a record 121.566 ounces across its four mines, which was 42% greater than in the same period of 2014.
The increased production was primarily attributable to the successful production start and strong ramp-up at the new Otjikoto mine in Namibia, as well as increased production from Masbate and the Limon mine in Nicaragua.
Masbate produced 41,236 ounces in the June quarter, which was about 8% above budget and 12% higher compared to the same period of 2014. This was mainly due to better than expected mill throughput of 1,768,928 tonnes compared to budget of 1,641,150 tonnes and mill recoveries of 75.8% compared to budget of 72.6%.
The variance for gold recoveries arose from higher than budgeted oxide ore being processed from the Colorado Pit and improvements in mill processing related to the installation of a lead nitrate dosing system. Production in the prior-year quarter had been negatively impacted by the change-out of the old Masbate SAG mill with a new SAG mill.
Masbate’s cash operating costs in the second quarter of 2015 were $782 per ounce, significantly below budget by $218 per ounce and $62 per ounce lower than in the prior year quarter. Cash operating costs per ounce in the second quarter of 2015 benefitted from higher recoveries, lower fuel and energy costs and reduced small fleet use in constricted areas of the Colorado and Panique pits.
First half of 2015 production at Masbate was 87,477 ounces, 2% above budget and 10% higher than in the first-half of 2014. Cash operating costs for the six months ended June 30, 2015 were $725 per ounce, a reduction of $54 per ounce from the prior year and $132 per ounce under budget. Cost improvements for the six month period were driven by higher than budgeted throughput and reductions in fuel and energy costs.
Capital expenditures in the second quarter of 2015 totalled $11.9 million which consisted mainly of pre-stripping ($3.7 million), mine infrastructure projects ($2.4 million), mine equipment ($2.3 million), land purchases ($0.7 million), plant initiatives such as the installation of a lead nitrate dosing system and gold room modifications ($0.5 million) and tailings line upgrades ($0.4 million).
For the full-year 2015, Masbate is projected to produce approximately 170,000 to 180,000 ounces of gold at a cash operating cost of approximately $740 to $775 per ounce.