B2Gold (BTO-T) has delivered a flurry of good news to the market, and investors have responded accordingly.
The company announced solid results from a feasibility study on its Otjikoto gold project in Namibia, where it is building a mine, and revealed that it has secured a US$150-million loan.
The study on Otjikoto details an open-pit gold mine with a 12-year mine life, based on probable reserves. B2Gold has a 92% stake in Otjikoto, located 300 km north of the Namibian capital of Windhoek, while EVI Gold, a Namibian black empowerment group, holds the remaining 8%.
B2Gold expects the mine will average 141,000 oz. gold per year in its first five years at an operating cost of US$524 per oz. gold, with production over the mine’s life averaging 112,000 oz. per year at an operating cash cost of US$689 per oz. gold.
The company anticipates a US$244.2-million pre-production capital expenditure, which would build a mine with a US$413-million net cash flow over its life.
The after-tax net present value was US$243.4 million using a 5% discount rate, while the internal rate of return came in at 23.6%.
The company plans to bolster production from the initial design capacity of 2.5 million tonnes per year to 3 million tonnes per year, and says it can do so with minimal additional capital requirements.
B2Gold also updated its open-pittable probable reserves, which stand at 29.4 million tonnes grading 1.42 grams per tonne gold for 1.34 million oz., with a strip ratio of 5.59 to 1.
Metallurgical studies show average gold recoveries increasing to 95.6%.
Also boding well for the project are recent high-grade discoveries on the property that B2Gold says could expand reserves and mill-throughput capacity, which could increase annual gold production.
The company can proceed with construction, having received all of the required government permits and licences.
On Jan. 10 — the day the news was released — the company’s shares were up 5%, or 20¢, to $3.85, on 5.6 million shares traded.
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