B2GOLD has forecast similar 2016 production from Masbate Gold Project than the 175,803 ounces produced last year. The guidance is between 175,000 and 185,000 ounces, slightly higher than the 2015 guidance of 170,000 to 180,000 ounces.

The 2015 total was about 6% lower than the previous year, due mainly to lower grades. In the second-half of 2014, production benefited from mining of a high grade area within the Colorado Pit with significantly higher grades than typically encountered through that pit.

2016 cash operating costs are forecast to be between $620 to $660 per ounce, a significant decrease of approximately 16% compared to the 2015 cost guidance of $740 to $775 per ounce, mainly attributable to lower projected prices for diesel fuel, heavy fuel oil (used for power generation) and explosives.

Masbate is budgeted to process an average of 18,360 tonnes of ore per day for a total of approximately 6.7 million tonnes of ore for 2016, reflecting an optimal throughput level while maximizing gold recoveries. Gold grades processed are expected to average 1.15 grams/tonne and gold recoveries are anticipated to average 72.1%. Mill feed is budgeted to consist of transitional and fresh (primary) ore sourced predominantly from the Main Vein Stage 1 Pit (81%) and oxide ore from the Colorado Pit (19%).

For the plant upgrade project, the installation of additional process tanks is expected to be completed in the second quarter and the remaining work of cyclones, screens, pre-aeration systems and carbon regeneration systems is expected to be commissioned late in the third quarter. Additional electrical generating capacity will also be installed.

The purpose of the upgrade is to promote improved gold recovery and higher throughput by the addition of pre-aeration, cyclone modifications (among other grinding circuit modifications) and longer retention time (increased tank capacity) for coarser material, thereby optimizing economics of the existing facility without the large capital investment associated with a third ball mill.

Sustaining capital costs are budgeted to total $24.6 million, consisting primarily of capitalized stripping costs ($6.5 million), land purchases ($6.4 million), equipment purchases for both mine and process operations ($5 million) and mine infrastructure development and facilities improvements ($3.9 million). Non-sustaining capital costs related to the plant upgrade project are budgeted to total $22.2 million.

The exploration budget for 2016 is approximately $4.9 million including 18,000 metres of drilling. The program includes further drilling in the Pajo area and on several other targets.


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