Fekola project - Mali
B2Gold acquired the Fekola project through a merger with Papillon Resources in October 2014. Following on from the preliminary economic (“PEA”) assessment that Papillon had completed, the Company filed an optimized feasibility study (“OFS”) in June 2015 (click here for highlights).
One of B2Gold’s core mining activities is the construction of its Fekola mine. Construction at Fekola has advanced significantly, and is now estimated to commence production in October 2017, three months ahead of the original two-and-a-half year construction schedule. Furthermore, Fekola remains on budget and is expected to be completed on budget.
Fekola is expected to be a large low-cost producer and should enable B2Gold to significantly increase its gold production base while at the same time reduce its longer-term consolidated cash operating costs and all-in sustaining costs (“AISC”) per ounce.
Key Highlights 2016:
In March 2016, B2Gold put several new funding measures in place. A total of $120 million was received from Prepaid Sales arrangements with the Company’s Revolving Credit Facility (“RCF”) syndicate, and the Company signed a commitment letter for Euro 71.4 million Equipment Facility with Caterpillar Financial SARL (subject to financing conditions). In the form of metal sales forward contracts, the Prepaid Sales transactions allow the Company to deliver predetermined volumes of gold on agreed future delivery dates in exchange for upfront cash prepayment. Settlement will be in the form of physical deliveries in 2017 and 2018 of approximately 9% and 6% of projected production (approximately 51,600 ounces), respectively.
On June 29, 2016, B2Gold announced an exploration update for its Fekola project. Based on the positive drill results to date (at both near surface and underground below the main Fekola pit) and exploration potential, a mill expansion was approved on August 2, 2016. The Company is constructing the Fekola mine with a +25% design factor, which is expected to be completed in October 2017. The mill expansion will be commissioned in conjunction with the main plant commissioning. This will allow throughput capacity to be increased to 5 million tonnes per year, beyond the optimized feasibility study’s estimated throughput of 4 million tonnes per year. Based on updated mine production plans (an updated life-of-mine plan based on 5 million tonnes per year is expected to be completed in the first quarter of 2017(1)), Fekola is projected to produce an average of 375,000 to 400,000 ounces of gold per year for the first five years of production, and 365,000 to 390,000 ounces per year for the first seven years of production.
In January 2017, B2Gold’s construction team continued to develop Fekola. Significant activities included:
- Tailings Storage Facility (TSF) embankment - 100% complete;
- Plant reclaim and event pond - 100% complete;
- High-density Polyethylene (HDPE) liner installation at TSF - 22% complete;
- Phase 1b and 2 diversion channel east of pit - 100% complete, Phase 1a diversion channel - 100% complete;
- Stage 1 pit overburden removal continues, 800,000 m3 of waste stripped, 5,000 tonne of ore stockpiled;
- Concrete production site wide - 88% complete (24,739 m3), structural steel site wide - 69% complete;
- Structural steel at mill is 87% complete, mill cyclone cluster and trash screens installed;
- Piping and cable tray installation continues site wide, switchgear installation and terminations in progress at MCCs;
- Power plant concrete pours and steel erection continue, engines received and installed.
B2Gold has also approved a plan to relocate the village of Fadougou, located adjacent to the main Fekola pit. This decision was not made based on a requirement in the Construction Permit but on extensive stakeholder engagement with the local population and a voluntary Company election. It is anticipated that the relocation process will take two years to complete.
Please click here for the full news release “B2Gold Corp. Reports Record 2016 Gold Production; Fekola Project Mine Construction Ahead of Schedule and Now on Target for an October 2017 Production Start”, dated February 5, 2017.
(1) Based on current assumptions.
Certain portions of the above information are derived from and based on the assumptions, qualifications and procedures set out in the technical report entitled “NI 43-101 Technical Report Feasibility Study on the Fekola Gold Project in Mali” dated effective June 30, 2015 prepared by Tom Garagan, P.Geo, BSc., William Lytle, P.E., M.Sc., B.Sc., Peter Montano, P.E., Ken Jones, P.E., Sandy Hunter, MAusIMM(CP), and David J. T. Morgan, MIEAust CPEng (the “Fekola Feasibility Study”). For a more detailed overview of the Fekola project, please refer to the Fekola feasibility study, which is available on SEDAR at www.sedar.com.