B2Gold Corp has completed construction of the Fekola mill and commenced ore processing, more than three months ahead of schedule and on budget, at the Fekola mine. Gold is now in the circuit and the first gold pour is anticipated by mid-October 2017. The company expects to achieve commercial production and produce between 50,000 and 55,000 oz of gold by the end of 2017. In addition, it has completed a new Life of Mine (LoM) plan for the Fekola deposit that projects higher mill throughput and annual gold production, and lower projected operating costs per ounce and all-in sustaining costs (AISC) per ounce of gold than the original (4 Mt/y) plan in the Optimised Feasibility Study (OFS). The new LoM plan was completed based on the expanded 5 Mt/y mill throughput and takes into account an early start-up, increased processing throughput, and improved open-pit design and scheduling versus the OFS.
A comparison of the OFS and LoM is as follows:
|Parameters1||OFS — 4 Mt/y (June 2015)||New LoM — 5 Mt/y (September 2017)|
|LoM Gold Production (million ounces)||3.45||3.45|
|Gold Production: LoM (‘000 ounces)||276||345|
|Gold Production: Years 1-3 (‘000 ounces)||333||400|
|Gold Production: Years 1-7 (‘000 ounces)||350||374|
|Operating Cash Cost: LoM (US$/oz)||552||428|
|Operating Cash Cost: Years 1-3 (US$/oz)||464||357|
|Operating Cash Cost: Years 1-7 (US$/oz)||418||391|
|AISC: LoM (US$/oz)||752||664|
|AISC: Years 1-3 (US$/oz)||717||604|
|AISC: Years 1-7 (US$/oz)||661||643|
- No material change to feasibility Mineral Reserves with the new resource model, pit and phase designs, and production plan. The contained Mineral Reserve remains 3.34 Moz contained in 43.8 Mt at an average grade of 2.37g/t
- No material change to mining production or fleet size
- Processing throughput increased to 5 Mt/y vs. 4 Mt/y in the OFS
- Significant upside in mine life and ounces produced exists within current resource, with further potential as adjacent and other targets are developed
The Fekola project has been built using the same construction team that had previously completed four gold mines, on schedule and on budget, for B2Gold’s predecessor company (Bema Gold Corp) and B2Gold. Prior to construction, the company recognized the exploration potential beyond the initial reserves and decided to build the Fekola mill with a 25% design capacity to allow for future expansion of the mill throughput from 4 to 5 Mt/y for an additional expenditure of approximately $18 million. Due to the success of the Fekola mine construction (more than three months ahead of schedule and on budget) and further exploration success at Fekola, the company decided to expedite the expansion and complete it during the construction phase rather than post construction. The Fekola project remains on budget; total cumulative forecast construction costs for the project (from inception to completion) include pre-construction sunk costs of approximately $41 million, feasibility study construction costs of $462 million and $18 million additional costs for the mill expansion to 5 Mt/y. Additionally, another $20 million is expected to be spent on relocating the village of Fadougou.
In 2018, the Fekola mine is now projected to produce between 400,000 and 410,000 oz of gold at an operating cost of approximately $354 and AISC of $609/oz of gold.
B2Gold’s exploration team believes the expansive Fekola property has the potential to host additional large Fekola-style gold deposits. Surface exploration, regional drilling and geophysics to date have identified numerous targets.