In addition to Namibia, B2Gold is developing new assets in Mali.
What role will B2Gold’s Otjikoto mine in Namibia play in the company’s production forecast for 2015, and how will 2014’s exciting discovery of the Wolfshag zone contribute towards the success at Otjikoto?
Clive Johnson (CJ): With overall company forecasts for 2015 at 500,000 oz gold to 540,000 oz gold, B2Gold is predicting yet another record year. Production at Otjikoto will play a big part in B2Gold’s overall portfolio and will be a significant contributing factor towards B2Gold’s projected 35% increase in production for 2015.
In 2014, a high-grade deposit coined the Wolfshag zone was found near to the original point of discovery (now ideally located close to the mill) at Otjikoto. This deposit has a higher grade at 8 grams per metric ton (g/mt) gold compared to 1.4 g/mt gold within the main Otjikoto open-pit ore body. Timing could not have been better and with the Wolfshag zone discovery in mind, the Otjikoto mill was designed with the capacity to expand. By investing an additional $15 million into the construction of the mill and by installing, at little cost, two additional tanks and pebble-crushing facilities, the mill will be able to accommodate a 25% to 30% increase in production, thereby increasing the plant’s capacity from 2.5 metric tons per year (mt/y) to 3 mt/y. The mill expansion will be completed by Q3 2015. Wolfshag will be incorporated in late 2016, meaning more gold will be produced from the same tonnage as the grade is higher. Therefore, production at Otjikoto this year will be 150,000 oz gold, rising in 2016 to 200,000 oz gold. With low operating costs of approximately $540 per ounce of gold, higher grades also result in lower operating costs so Wolfshag is set tofurther boost B2Gold’s profit.
Can you please outline the reasons behind Otjikoto’s accomplished milestones thus far?
CJ: In December 2014, Otjikoto’s first gold bar was poured ahead of schedule (and on budget). Otjikoto continues to exceed company expectations and the mine has already declared commercial production ahead of schedule. Construction was carried out so well that ramp up was brief and in the first month B2Gold exceeded the 1,600 mt/d mill forecast. B2Gold’s ramp up estimation for Otjikoto is now at 6,100 mt/d. Results from Q1 2015 surpassed production and operating cost estimates.
The key to B2Gold’s success is the discipline the company brings to mine construction by not sub-contracting construction management and being fully responsible for construction, controlling its process and schedule. B2Gold is currently one of the few intermediate gold mining companies that is delivering on promises, and is profitable and growing.
With the acquisition of Papillion Resources in October 2014, can you please outline how the Fekola project in Mali will assist in B2Gold’s growth?
CJ: B2Gold’s Fekola property was acquired from Papillion Resources in October 2014, and is set to become one of B2Gold’s chief flagship assets. With its history of mining activity and established world-class deposits, Mali is a good country to operate in. B2Gold has received considerable support from Mali’s minister of mines to build the mine.
Initial road construction has been completed, and the feasibility study will be finalized by June 2015. Fekola is anticipated to be up-and-running by late 2017 or early 2018. The capital costs will range from $400 million to $500 million and will be funded by operating cash flow generated through worldwide production over the next three years, along with a $200 million (possibly $400 million) in revolving bank debt credit.
The estimated operating costs will be an attractive $550/oz gold range, with annual production projected to be over 300,000 ounces. With Fekola and B2Gold’s other assets combined, the company’s annual production will be 900,000 oz gold, complemented by diminishing operating costs.
B2Gold’s success can be attributed to the company’s commitment to corporate social responsibility (CSR). What have been the defining moments of B2Gold’s CSR achievements?
CJ: When B2Gold went to Nicaragua, there was an anti-mining lobby, as the local perception was that mining was detrimental to the environment. B2Gold allayed these fears by explaining how a modern mine is con-structed, operates and creates local jobs, and assuring that it would safeguard the environment. Based on this commitment to CSR in Nicaragua, B2Gold was recently presented an “Economic Empowerment and Community Impact” National CSR Award. B2Gold’s CSR policy in Nicaragua soon formed a company blueprint for CSR initiatives worldwide. For example, B2Gold are actively involved with the two towns, Otjiwarongo and Otavi, near Otjikoto, where it is conducting several community programs, including a housing program to ensure workers have the opportunity to acquire a local home.
One of B2Gold’s principal CSR initiatives is to employ local people. At Otjikoto, B2Gold has employed 1,000 local people, which 90% of all employees. Similarly, B2Gold will employ the local population near the Fekola property in Mali to construct a self-sufficient camp, including airstrip and road, and the mine facilities.
This interview was part of research being conducted by GBR for its upcoming Mining in Africa Country Investment Guide (MACIG) 2016. To participate in this report, please contact Molly Concannon at email@example.com or +243(0)826300684.