B2Gold’s Masbate Gold Project in the Philippines continues to exceed expectations, producing 46,557 ounces of gold in the third quarter of 2017. This was 20%, or 7799 ounces, above both original budget and reforecast production, and comparable with the prior-year quarter.
Gold production was higher due to better than expected throughput and recoveries mainly driven by significantly higher than budgeted oxide ore from the Colorado Pit. As mining advances in the Colorado Pit, the trend of more oxide ore than modelled has continued.
The Masbate mine has continued its outstanding safety performance, achieving two years without a ‘Lost-Time-Injury’ on October 12, 2017.
Mill throughput in the quarter was 1,704,723 tonnes compared to budget of 1,619,060 tonnes and 1,604,176 tonnes in the third quarter of 2016. Mill recoveries averaged 77.4% which was better than budget of 68.9% and 77.2% in the third quarter of 2016.
The average grade processed was 1.10 g/t compared to budget of 1.08 g/t and 1.20 g/t in the third quarter of 2016. As expected, grades were higher in the prior-year quarter attributable to the high-grade ore from the Main Vein Stage 1 Pit, which is no longer active.
Masbate’s third quarter cash operating costs were $541 per ounce, significantly below budget by $203 per ounce, or 27%. This variance was mainly the result of higher than expected production and lower than expected production costs due to cost savings in most areas and stockpile adjustments.
Masbate’s AISC in the third quarter were $717 per ounce, significantly below budget by $339 per ounce, or 32%. This was as a result of lower cash operating costs and sustaining capital expenditures due to the timing of mobile equipment purchases which were expected in the third quarter of 2017 but are now expected to occur in the fourth quarter.
Year-to-date, gold production at Masbate was 149,049 ounces, significantly above original budget by 12%, or 16,043 ounces, and 6%, or 7799 ounces, more than reforecast production.
Masbate’s cash costs remained significantly below budget in the first nine months with cash operating costs of $527 per ounce, $161 per ounce, or 23%, below budget, and AISC of $800 per ounce, $256 per ounce, or 24%, below budget.
Compared to the prior-year period, Masbate’s AISC increased, reflecting higher fuel costs as well as its 2017 planned mine fleet replacement and expansion program. However, in 2018, Masbate’s mine equipment purchases are planned to significantly decrease relative to 2017.
For 2017, the mine is well on track to meet or exceed the high end of its previously increased production guidance range of between 180,000 to 185,000 ounces. The original guidance was 175,000 to 185,000 ounces. The operation is expected to meet the low end of its guidance range for cash operating costs of between $595 to $635 per ounce and AISC of between $935 and $975 per ounce.
The Masbate operations were recently presented with the Department of Environment and Natural Resources’ (DENR) Saringaya Award for its contribution to environmental protection, conservation and management in the regions surrounding the Masbate Mine. The Saringaya Award is considered the DENR’s most prestigious regional environmental award.