B2Gold Corp. (TSX: BTO, NYSE AMERICAN: BTG, NSX: B2G) (“B2Gold” or
the “Company”) is pleased to announce that the Malian Council of
Ministers and the President of Mali have approved the participation
of the State in Fekola SA for a total interest of 20%. Fekola SA is
a 100% owned subsidiary of B2Gold which holds the Company’s
interest in the Fekola Mine. All dollar figures are in United
States dollars unless otherwise indicated.
In 2016, pursuant to applicable mining law, the
Company formed a new 100% owned subsidiary company, Fekola SA,
which now holds the Company's interest in the Fekola Mine.
Following signing of a shareholder's agreement in August 2017,
between the Company and the State of Mali (the "Fekola Shareholder
Agreement"), the Company confirmed the basis under which it was to
contribute a 10% free carried interest in Fekola SA to the State of
Mali. In addition, the State of Mali also had the option to
purchase an additional 10% of Fekola SA which it elected to
exercise. The terms and conditions of the acquisition of this
additional 10% interest were agreed between the Company and the
State of Mali in a share purchase agreement (the “Share Purchase
Agreement”) dated August 2017.
In March 2017, the Company signed a mining
convention in the form required under the 2012 Mining Code (the
"Fekola Mining Convention") that relates to, among other things,
the ownership, permitting, reclamation bond requirements,
development, operation and taxation applicable to the Fekola Mine
with the State of Mali. In August 2017, the Company finalized an
amendment to the Fekola Mining Convention with the State of Mali to
address and clarify certain issues under the 2012 Mining Code. The
Fekola Mining Convention, as amended, governs the procedural and
economic parameters pursuant to which the Company operates the
Fekola Mine.
On August 8, 2018, the Company was informed that
the Malian Council of Ministers approved the participation of the
State in Fekola SA for a total of 20% (being the 10% free carried
interest plus the additional 10% interest), through an ordinance
and a decree of the Council of Ministers, signed by the
President.
Now that the State of Mali’s interest into
Fekola SA has been formally authorized by the Malian authorities,
the Company will transfer ownership of 20% of Fekola SA to the
State of Mali. The first non-participating 10% of the State of
Mali's ownership will entitle it to an annual priority dividend
equivalent to 10% of calendar net income of Fekola SA (the
“Priority Dividend”). The second fully participating 10% of the
State of Mali's interest will entitle it to ordinary dividends
payable on the same basis as any ordinary dividends declared and
payable to the Company for its 80% interest. Ordinary dividends are
not payable by Fekola SA until the Fekola SA intercompany loans
totaling approximately $700 million, plus accrued interest, have
been repaid to B2Gold in full. The intercompany loans include
historical exploration loans, early works costs, funds advanced for
the Fekola Mine construction and expansion, 2017 accelerated
pre-stripping and fleet purchases plus accrued interest. The
intercompany loans bear interest at a rate of the prime lending
rate of the Central Bank of West African States (currently 4.5%)
plus 2%.
In addition to assuming the obligations of
ordinary shareholders to repay the Fekola SA intercompany loans and
interest prior to the payment of any ordinary dividends, the State
of Mali has also agreed to make additional payments totaling $47
million with respect to the acquisition of the additional 10%
interest. This valuation was primarily based on the optimized
Fekola Mine feasibility study filed with the State of Mali in July
2016. The underlying valuation studies were prepared by two
separate international valuation firms, one acting for each of the
Company and the State of Mali, respectively, using a discounted
cash flow methodology. The final $47 million valuation reflects the
point at which the valuation ranges prepared by the two independent
valuation firms overlapped.
The $47 million obligation of the State of Mali
will be set up as a loan from B2Gold to the State of Mali. This
loan will bear interest at a rate of the prime lending rate of the
Central Bank of West African States (currently 4.5%) plus 3%. The
loan will be satisfied by netting it off against any ordinary
dividends receivable by the State of Mali for its second 10%
participating interest in Fekola SA until such time as the full
amount of any principal and accrued interest outstanding under the
loan are extinguished.
B2Gold has developed an excellent relationship
over the past four years with the Government of Mali. All
negotiations between the Company's senior representatives and the
Malian government ministries have been conducted and concluded in
an environment of mutual fairness, respect and transparency. B2Gold
looks forward to working with the Malian government as partners in
the mutually beneficial world-class Fekola Mine.
Fekola Mine
Fekola is B2Gold’s largest mine, representing
approximately 45% of the Company’s projected consolidated 2018 gold
production. For the first half of 2018, Fekola produced 226,786
ounces of gold, above budget by 11% with cash operating costs (see
“Non-IFRS Measures below”) of $293 per ounce, $71 per ounce below
budget, and all-in sustaining costs (“AISC”) (see “Non-IFRS
Measures below”) of $466 per ounce, $138 per ounce below
budget.
Exploration drilling at the Fekola North
Extension zone indicates that the potential exists, subject to
further drilling, to significantly increase open-pit resources and
reserves, north of the current Fekola open-pit reserve. The Fekola
North Extension remains open to the north. B2Gold intends to
release additional drill results in September 2018, followed by an
updated mineral resource calculation in October 2018.
Based on the positive exploration results to
date, the Company’s in-house technical team is conducting
engineering and other technical studies to ascertain the potential
to expand the current Fekola Mine and mill facilities, and increase
tonnage throughput, thereby increasing annual gold production, if,
as expected, a larger open-pit resource is confirmed by the current
exploration and in-fill drilling. Results of these studies are
projected to be available by year-end 2018.
About B2Gold Corp.
Headquartered in Vancouver, Canada, B2Gold Corp.
is the world's new senior gold producer. Founded in 2007, today,
B2Gold has five operating gold mines, and numerous exploration and
development projects in various countries including Nicaragua, the
Philippines, Namibia, Mali, Burkina Faso, Colombia and Finland.
With the first full year of production from the
large, new Fekola Mine, B2Gold is achieving transformational growth
in 2018. Consolidated gold production is forecast to be between
920,000 and 960,000 ounces, representing an increase in annual
consolidated gold production of approximately 300,000 ounces in
2018 versus 2017. Based on current assumptions, in 2018,
consolidated cash operating costs are projected to be between $505
and $550 per ounce, and consolidated AISC are projected to be
between $780 and $830 per ounce.
On Behalf of B2GOLD
CORP.“Clive T. Johnson”President
& Chief Executive Officer
For more information on B2Gold please visit the
Company website at www.b2gold.com or contact:
Ian MacLean |
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Katie Bromley |
Vice President,
Investor Relations |
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Manager, Investor
Relations & Public Relations |
604-681-8371 |
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604-681-8371 |
imaclean@b2gold.com |
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kbromley@b2gold.com |
The Toronto Stock Exchange and the NYSE American
LLC neither approve nor disapprove the information contained in
this news release.
Production results and production guidance
presented in this news release reflect the total production at the
mines B2Gold operates on a 100% basis.
This news release includes certain
“forward-looking information” and “forward-looking statements”
(collectively “forward-looking statements”) within the meaning of
applicable Canadian and United States securities legislation,
including projections, outlook, guidance, forecasts, estimates and
other statements regarding future financial and operational
performance, events, growth, production, mine life, revenues and
cash flows, costs, including projected cash operating costs and
AISC, capital expenditures, budgets, production estimates and
guidance, including B2Gold’s projected increase of gold production
to between 920,000 and 960,000 ounces in 2018 and such reflecting a
production growth of approximately 300,000 ounces in 2018 from
2017; project-specific projections of gold production and costs;
and statements regarding anticipated exploration, drilling,
development, construction, production, permitting and other
activities and achievements of B2Gold, including but not limited
to: the anticipated transfer of 20% ownership of Fekola SA to the
State of Mali and the resulting entitlement of the State of Mali to
annual priority dividends and ordinary dividends; the agreement by
the State of Mali to make certain payments, including the repayment
of the Fekola SA intercompany loans and interest prior to the
payment of any ordinary dividends, and additional payments totaling
$47 million; the expected structuring of the additional payments
totaling $47 million by the State of Mali as a loan from B2Gold to
the State of Mali; the potential to significantly increase open-pit
resources and reserves, north of the current Fekola open-pit
reserve; the timing of the release of exploration results and the
updated resource calculation relating to the Fekola Mine; the
potential to expand the current Fekola Mine and mill facilities and
increase tonnage throughput, thereby increasing annual gold
production and the results and timing of B2Gold’s study thereof;
and a larger open-pit resource at the Fekola Mine being confirmed
by the current exploration and in-fill drilling. Estimates of
mineral resources and reserves are also forward-looking statements
because they constitute projections regarding the amount of
minerals that may be encountered in the future and/or the
anticipated economics of production, should a production decision
be made. All statements in this news release that address events or
developments that we expect to occur in the future are
forward-looking statements. Forward-looking statements are
statements that are not historical facts and are generally,
although not always, identified by words such as “expect”, “plan”,
“anticipate”, “project”, “target”, “potential”, “schedule”,
“forecast”, “budget”, “estimate”, “intend” or “believe” and similar
expressions or their negative connotations, or that events or
conditions “will”, “would”, “may”, “could”, “should” or “might”
occur. All such forward-looking statements are based on the
opinions and estimates of management as of the date such statements
are made.
Forward-looking statements necessarily involve
assumptions, risks and uncertainties, certain of which are beyond
B2Gold’s control, including risks associated with or related to:
the volatility of metal prices and B2Gold’s common shares; the
dangers inherent in exploration, development and mining activities;
the uncertainty of reserve and resource estimates; not achieving
production, cost or other estimates; actual production, development
plans and costs differing materially from the estimates in B2Gold’s
feasibility studies; the ability to obtain and maintain any
necessary permits, consents or authorizations required for mining
activities; the current ongoing instability in Nicaragua; the
uncertainty about the outcome of negotiations with the Government
of Mali; environmental regulations or hazards and compliance with
complex regulations associated with mining activities; the ability
to replace mineral reserves and identify acquisition opportunities;
the unknown liabilities of companies acquired by B2Gold; the
ability to successfully integrate new acquisitions; fluctuations in
exchange rates; the availability of financing; financing and debt
activities, including potential restrictions imposed on B2Gold’s
operations as a result thereof and the ability to generate
sufficient cash flows; operations in foreign and developing
countries and the compliance with foreign laws, including those
associated with operations in Mali, Namibia, the Philippines,
Nicaragua and Burkina Faso and including risks related to changes
in foreign laws and changing policies related to mining and local
ownership requirements; remote operations and the availability of
adequate infrastructure; fluctuations in price and availability of
energy and other inputs necessary for mining operations; shortages
or cost increases in necessary equipment, supplies and labour;
regulatory, political and country risks, including local
instability or acts of terrorism and the effects thereof; the
reliance upon contractors, third parties and joint venture
partners; the lack of sole decision-making authority related to
Filminera Resources Corporation, which owns the Masbate Project;
challenges to title or surface rights; the dependence on key
personnel and the ability to attract and retain skilled personnel;
the risk of an uninsurable or uninsured loss; adverse climate and
weather conditions; litigation risk; competition with other mining
companies; changes in tax laws; community support for B2Gold’s
operations, including risks related to strikes and the halting of
such operations from time to time; conflicts with small scale
miners; failures of information systems or information security
threats; the final outcome of the audit by the Philippines
Department of Environment and Natural Resources in relation to the
Masbate Project; the ability to maintain adequate internal controls
over financial reporting as required by law, including Section 404
of the Sarbanes-Oxley Act; compliance with anti-corruption laws; as
well as other factors identified and as described in more detail
under the heading “Risk Factors” in B2Gold’s most recent Annual
Information Form, B2Gold’s current Form 40-F Annual Report and
B2Gold’s other filings with Canadian securities regulators and the
U.S. Securities and Exchange Commission (the “SEC”), which may be
viewed at www.sedar.com and www.sec.gov, respectively (the
“Websites”). The list is not exhaustive of the factors that may
affect B2Gold’s forward-looking statements. There can be no
assurance that such statements will prove to be accurate, and
actual results, performance or achievements could differ materially
from those expressed in, or implied by, these forward-looking
statements. Accordingly, no assurance can be given that any events
anticipated by the forward-looking statements will transpire or
occur, or if any of them do, what benefits or liabilities B2Gold
will derive therefrom. B2Gold’s forward-looking statements reflect
current expectations regarding future events and operating
performance and speak only as of the date hereof and B2Gold does
not assume any obligation to update forward-looking statements if
circumstances or management’s beliefs, expectations or opinions
should change other than as required by applicable law.
B2Gold’s forward-looking statements are based on
the applicable assumptions and factors management considers
reasonable as of the date hereof, based on the information
available to management at such time. These assumptions and factors
include, but are not limited to, assumptions and factors related to
B2Gold’s ability to carry on current and future operations,
including: development and exploration activities; the timing,
extent, duration and economic viability of such operations,
including any mineral resources or reserves identified thereby; the
accuracy and reliability of estimates, projections, forecasts,
studies and assessments; B2Gold’s ability to meet or achieve
estimates, projections and forecasts; the availability and cost of
inputs; the price and market for outputs, including gold; the
timely receipt of necessary approvals or permits; the ability to
meet current and future obligations; the ability to obtain timely
financing on reasonable terms when required; the current and future
social, economic and political conditions; and other assumptions
and factors generally associated with the mining industry. For the
reasons set forth above, undue reliance should not be placed on
forward-looking statements.
Non-IFRS Measures This news
release includes certain terms or performance measures commonly
used in the mining industry that are not defined under
International Financial Reporting Standards (“IFRS”), including
“cash operating costs” and “all-in sustaining costs” (or “AISC”).
Non-IFRS measures do not have any standardized meaning prescribed
under IFRS, and therefore they may not be comparable to similar
measures employed by other companies. The data presented is
intended to provide additional information and should not be
considered in isolation or as a substitute for measures of
performance prepared in accordance with IFRS and should be read in
conjunction with B2Gold’s consolidated financial statements.
Readers should refer to B2Gold’s management discussion and
analysis, available on the Websites, under the heading “Non-IFRS
Measures” for a more detailed discussion of how B2Gold calculates
certain measures and reconciliation of certain measures to IFRS
terms.
Cautionary Note to United States
InvestorsThe disclosure in this news release was prepared
in accordance with Canadian National Instrument 43-101 (“NI
43-101”), which differs significantly from the requirements of the
SEC set out in Industry Guide 7. Accordingly, such disclosure may
not be comparable to similar information made public by companies
that report in accordance with U.S. standards. In particular, this
news release may refer to “mineral resources” or “inferred mineral
resources”. While these categories of mineralization are recognized
and required by Canadian securities laws, they are not recognized
by the SEC and are not normally permitted to be disclosed in SEC
filings by U.S. companies. U.S. investors are cautioned not to
assume that any part of a “mineral resource” or “inferred mineral
resource” will ever be converted into a “reserve.” In addition,
“reserves” reported by the Company under Canadian standards may not
qualify as reserves under SEC standards. Under SEC standards,
mineralization may not be classified as a “reserve” unless the
mineralization can be economically and legally extracted or
produced at the time the “reserve” determination is made.
Accordingly, information contained or referenced in this news
release containing descriptions of the Company’s mineral deposits
may not be compatible to similar information made public by U.S.
companies subject to the reporting and disclosure requirements of
U.S. federal securities laws, rules and regulations. “Inferred
mineral resources” have a great amount of uncertainty as to their
existence and great uncertainty as to their economic and legal
feasibility. It cannot be assumed that all or any part of an
inferred mineral resource will ever be upgraded to a higher
category. Disclosure of “contained ounces” in a resource is
permitted disclosure under Canadian reporting standards; however,
the SEC normally only permits issuers to report mineralization that
does not constitute “reserves” by SEC standards as in-place tonnage
and grade without reference to unit measures. Historical results or
feasibility models presented herein are not guarantees or
expectations of future performance.