Projects

Masbate Mine – The Philippines (1)

Open Pit

Property Location and Access:

The Masbate Gold Project (MGP) is located in Masbate Island in the Republic of the Philippines. The mine is situated about 360 kilometres (“km”) southeast of Manila, the capital of the Philippines, within the municipality of Aroroy, Masbate Province, Region V. The mine site can be accessed by a commercial airline service, which flies daily to Masbate City; from there it is a 70 km drive on a partially-sealed road to the mine site. Alternate access to the site from Masbate City is via a one hour boat ride. A registered light air strip and helipad are located close to the mine. The mine is equipped with a barge loading jetty where heavy equipment and consumables are delivered and offloaded. 

Second Quarter 2017:

The Masbate Mine continued to exceed expectations, producing 49,930 ounces of gold in the second quarter of 2017, 13% (or 5,675 ounces) above budget. Gold production exceeded budget due to better than expected throughput and recoveries mainly driven by higher than budgeted oxide ore from the Colorado Pit. As mining advances in the Colorado Pit, the trend of more oxide ore than modelled has continued. Oxide feed material accounted for 67% of the total milled tonnes compared to budget of 22%. As expected, compared to the prior-year quarter, gold production was 13% (or 7,258 ounces) lower as the prior-year quarter had benefitted from the higher grade ore sourced from the Main Vein Stage 1 Pit which is no longer active (and had resulted in the second highest quarterly production ever for the mine). The Masbate Mine continued its strong safety performance, extending the number of days without a lost time injury to 626 days at the end of the second quarter of 2017.

Mill throughput in the quarter was 1,824,714 tonnes compared to budget of 1,717,168 tonnes and 1,699,705 tonnes in the second quarter of 2016. Mill throughput exceeded budget as a result of the softer ore conditions (from the softer oxide blend) as well as improved plant availability. Mill recoveries averaged 75.9% which was better than budget of 72.9% and 75.0% in the second quarter of 2016. The average grade processed was 1.12 g/t compared to budget of 1.10 g/t and 1.40 g/t in the second quarter of 2016. The first part of the replacement and expansion load and haul fleet was commissioned and brought into operation during the quarter. The new drill fleet is scheduled to arrive in the third quarter of 2017 and the final nine haul trucks are scheduled to arrive in the second half of the year. 

Masbate’s second quarter cash operating costs(2) were $516 per ounce, significantly below budget by $184 per ounce (or 26%). This favourable variance was mainly the result of higher than expected production and lower than expected production costs (due to cost savings in most areas) and stockpile adjustments. Compared to the prior-year quarter, cash operating costs were $120 per ounce higher due to near-record levels of gold production as well as lower fuel costs in the prior-year quarter. Masbate’s all-in sustaining costs (“AISC”)(2) in the second quarter were $869 per ounce, below budget by $106 per ounce (or 11%). Compared to the prior-year quarter, AISC were $313 per ounce higher mainly due to the planned 2017 mine fleet and expansion costs and higher per ounce cash operating costs. Masbate’s mine equipment purchases are planned to significantly decrease in 2018.

First-Half (“FH”) 2017:

For the first half of 2017, the Masbate Mine produced 102,492 ounces of gold (FH 2016 – 109,915 ounces), above budget by 9% (or 8,244 ounces).

Masbate’s cash costs remained significantly below budget in the first half of the year with cash operating costs of $520 per ounce (FH 2016 – $425 per ounce), $145 per ounce (or 22%) below budget, and AISC of $838 per ounce (FH 2016 – $595 per ounce), $218 per ounce (or 21%) below budget. 

2017 Guidance:

Due to the continued strong first-half 2017 performance, the Company now expects full-year Masbate production to be at the top end of its original production guidance range, and has revised its annual guidance range to be between 180,000 to 185,000 ounces of gold (original guidance was 175,000 to 185,000 ounces). Masbate’s full-year cash operating costs are now expected to be below its original guidance range and be between $595 and $635 per ounce (original guidance was $690 to $730 per ounce) and AISC are also expected to be lower at between $935 and $975 per ounce (original guidance was $1,020 to $1,050 per ounce).

Department of Environment and Natural Resources Update:

As reported by the Company on February 2, 2017, the Department of Natural Resources (the “DENR”) announced further results of its mining audits of metallic mines in the Philippines, and the Masbate Mine was not among the mines announced to be suspended or closed. To date, the Company has not received any updated formal written response from the DENR confirming the final results of the audit in respect of Masbate and as such, the final outcome of the audit has not been determined. The Company believes that it continues to be in compliance with Philippine laws and regulations. Resolution of the audit will occur when the Mining Industry Coordinating Council (which is the oversight committee for the DENR) conducts a technical review of mines in the Philippines in order to address the DENR audit conclusions. No time frame has yet been provided for this review, which is expected to bring finality to this year-old review process.

The Masbate operations were recently presented with the DENR’s Saringaya Award for its contribution to environmental protection, conservation and management in the regions surrounding the Masbate Mine. The Saringaya Award is considered the DENR’s most prestigious regional environmental award.

Recent News Releases:

Please click here for the full news release "B2Gold Corp. Reports Second Quarter 2017 Results; Achieves Both Higher Gold Production and Lower Costs than Budget; Fekola Project Mine Construction Remains on Target for an October 1, 2017, Production Start", dated August 9, 2017.

MGP_0116

Click here for details on the Masbate “Exploration” section.

Footnotes (Click to expand)

  1. The disclosure contains forward-looking statements. Refer to the Legal section of the website (click here) for caution regarding forward-looking statements and the basis for presentation of Mineral Reserves, Mineral Resources and other technical disclosures
  2. Refer to “Non-IFRS measures” in B2Gold's most recently filed Management’s Discussion and Analysis (“MD&A”). Click here for MD&A

Certain portions of the information provided herein are derived from and based on the technical report entitled “Masbate Gold Operation, Republic of the Philippines, NI 43-101 Technical Report on Operations” that has an effective date of December 31, 2016, and was prepared by Tom Garagan, P. Geo., Ken Jones, P.E., Kevin Pemberton, P.E. and John Rajala, P.E. and from our most recently filed Annual Information Form (“AIF”) – click here for AIF, and are based on the assumptions, qualifications and procedures set out therein. For a more detailed overview of the Masbate Gold Project, please refer to the documents noted above, which are available on SEDAR www.sedar.com and on the U.S. Securities and Exchange Commission’s website at www.sec.gov

Note: For more details on B2Gold’s Masbate Mine, click here for the Company’s Annual Information Form 2017 and click here for the Company's Management’s Discussion and Analysis (these are also available on SEDAR at www.sedar.com and on the U.S. Securities and Exchange Commission’s website at www.sec.gov).

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