A CHANGE-OUT of the SAG mill at B2Gold’s Masbate Gold Project has been successfully completed with the new mill now in operation and performing its function flawlessly after a short period of commissioning. The project was completed on time in late June with no safety incidents.
The shutdown of the SAG mill from May 29 to June 28 resulted in second quarter production falling by around 4% from the corresponding period of 2013 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.
Overall, production guidance for 2014 remains unchanged. The Masbate mine is projected to produce approximately 190,000 to 200,000 ounces of gold in 2014, at an operating cash cost of approximately $765 to $800 per ounce.
Transition from contract mining to self-mining is proceeding smoothly at Masbate 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.
Last year, B2Gold began a metallurgical sampling and analysis program in order to assess the potential for a mill expansion at Masbate. That preliminary work continues, with conclusions expected in the fourth quarter of 2014. A proposed mill expansion would allow the company to take advantage of opportunities to process additional ore, allow for the full utilization of the new SAG mill and optimize process plant gold recoveries.