B2Gold (TSX: BTO; NYSE-AM: BTG) began the year in Nicaragua with an open-pit resource on its Central Zone gold discovery at the El Limon mine.
The Central Zone has 5.13 million inferred tonnes grading 4.92 grams gold per tonne for 812,000 contained oz. gold, is open along strike and at depth, and comes as close as 150 metres to El Limon’s mill.
The new zone extends southeast and northwest, and the resource is based on 35,900 metres in 248 holes — 75% of which were drilled by B2Gold, and the rest by previous owners in the late 1990s and early 2000s.
So far B2Gold has drill tested the Central Zone vein structure along a 2.2 km strike length.
Drill results from inside the pit include 19.7 metres grading 24.24 grams gold, 24.8 metres of 11.65 grams gold, 5.7 metres of 64.76 grams gold and 15.7 metres of 20.04 grams gold. North of the resource’s pit limits, drill highlights include 2 metres of 13.43 grams gold and 20.4 metres of 3 grams gold, including 4.1 metres of 6.85 grams gold.
Drilling is ongoing to infill the Central Zone and explore the structure along strike and at depth.
This year B2Gold has set aside US$7 million for a 24,900-metre, 132-hole drill program for the El Limon vein.
Clive Johnson, B2Gold’s president and CEO, was unavailable for comment before the company’s annual general meeting. But in a press release the company said the Central Zone can lower El Limon’s cash-operating costs and all-in sustaining costs (AISCs), extend the mine life, and expand the mill to a higher throughput rate, which could double annual gold production.
Last year El Limon produced 42,776 oz. gold at cash-operating costs of US$954 per oz. gold, and AISCs of US$1,469 per oz. gold.
This year El Limon could make between 55,000 and 60,000 oz. gold at cash costs of US$700 to $750 per oz. gold, and AISCs of US$1,135 to US$1,185 per oz. gold.
Based on its exploration success in the new Central Zone, B2Gold is undertaking metallurgical and engineering studies to evaluate expansion of the El Limon mill. The results of the study should be out shortly.
Last year the company finished an initial study to reprocess old tailings at the mine. Based on historic mill and drilling records, the tailings contain up to 11 million tonnes, with a potential grade of 0.80 to 1 gram gold per tonne.
Drilling is ongoing as part of a feasibility study on the tailings project that will confirm the resource and grades, optimum grind size, capital costs and project economics.
Based on last year’s work, the company says the tailings project could produce 20,000 to 25,000 oz. gold and 70,000 to 80,000 oz. silver a year for between nine and 11 years.
The concept envisions regrinding the old tailings to a finer grind size, processing them through a new carbon-in-pulp plant, and putting the tailings in a new, lined tailings storage facility.
The El Limon mine has produced over 3 million oz. gold since 1941, mainly from the veins of El Limon, Talavera and Santa Pancha, where B2Gold is producing. B2Gold acquired the mine in 2009.
El Limon is in northwestern Nicaragua, 100 km northwest of Managua, the country’s capital.
B2Gold’s La Libertad mine in central Nicaragua — 100 km east of Managua — produced 82,337 oz. gold in 2017 at cash-operating costs of US$836 per oz. gold, and AISCs of US$1,106 per oz. gold.
The company forecasts La Libertad will produce 115,000 to 120,000 oz. gold this year at cash costs of US$745 to US$790 per oz. gold, and AISCs of US$1,050 to US$1,100 per oz. gold.
La Libertad’s per-ounce cash-operating costs and AISCs could improve in the second half of the year, along with higher production.
B2Gold’s 2018 guidance assumes that production will start from the Jabali Antenna pit in this year’s third quarter (“dependent upon the successful completion of resettlement activities and receipt of the remaining mining permit”).
Jabali Antenna underground is under development and B2Gold could process ore there in July.
In a May press release, the company noted that gold production at La Libertad had been affected by permit delays for new mining areas, but said the mine permits are in place for all open-pit and underground operations, except for the Jabali Antenna pit.
The company continues to work with local residents, the mayor and senior government officials to permit the Jabali Antenna pit, but has drawn up contingency plans to produce more via other operations if permitting and resettlement at the Jabali Antenna Pit is delayed.
Plans at La Libertad include mining and processing into 2020, exploiting a current combination of reserves and resources.
B2Gold’s exploration budget for La Libertad this year is $5 million for 9,000 metres of drilling. The program is split between near-mine infill drilling and drilling on several regional targets.
In addition to El Limon and El Libertad, B2Gold owns three other producing gold mines: Masbate in the Philippines, Otjikoto in Namibia and Fekola in Mali.
B2Gold forecasts its total gold production this year at between 910,000 and 950,000 oz. gold — an increase of 300,000 oz. gold from 2017.
In addition to its five mines, the company has two projects in its pipeline: Kiaka in Burkina Faso, and Gramalote, a joint venture with AngloGold Ashanti (NYSE: AU) in Colombia.