By Hilary Mare
LIFE-of-mine production plans for the B2 gold Otjikoto project, incorporating the Wolfshag open pit and underground mines, have been completed for various options, the mine has announced.
Clive Johnson, B2 Gold’s president and Chief Executive Officer reiterated that the plans will be further refined as the detailed geotechnical, hydrogeological, and design studies are completed in the first quarter of 2017 (open pit) and first half of 2017 (underground).
The Wolfshag open pit will continue to produce higher than average grade ore for three to five years, depending on the transition to underground mining.
“On-going studies are leading the company to re-evaluate the open pit and underground interface,” said Johnson. Essentially, the Otjikoto mine produced a quarterly record 47 564 ounces of gold in the third quarter of 2016, 10 percent (or 4 191 ounces) above budget and 24 percent (or 9 312 ounces) higher than the third quarter of 2015.
“The increased production was mainly due to higher mill throughput. Mill throughput exceeded budgeted and the same quarter in 2015 primarily due to the completion of Otjikoto’s mill expansion project in September 2015 (which has increased plant capacity from 2.5 million tonnes per annum to 3.0 million tonnes per annum). Head grade and recoveries in the quarter were 1.66 g/t (Q3 2015 – 1.71 g/t) and 98.0 percent (Q3 2015 – 99.1 percent), respectively, and were both approximately in-line with budget,” the mine recently announced.
In the third quarter of 2016, ore was mined from the Otjikoto Phase 1 pit which was reopened after the new access ramp was completed in June 2016. In the fourth quarter of 2016, it is expected that the majority of ore produced will continue to be sourced from the Otjikoto Phase 1 pit, with minor ore tonnage from the Otjikoto Phase 2 pit and the new WolfZ“Development of the Wolfshag pit is progressing on schedule, with the first ore expected before the end of 2016,” Johnson extended.
Otjikoto’s third quarter cash operating costs were a record low $344 per ounce, $20 per ounce (or five percent) below budget and $49 per ounce (or 12 percent) below the prior-year quarter. This was mainly the result of higher gold production, lower fuel prices and lower fuel/reagent consumption. All-in sustaining costs in the quarter were $474 per ounce, below both budget of $486 per ounce and $510 per ounce in the prior-year quarter, mainly reflecting lower cash operating costs.
During the first nine months of 2016, the Otjikoto Mine produced 119 439 ounces of gold, three percent (or 2 987 ounces) above budget and 12 percent higher compared to 106 349 ounces (including 18 815 ounces of pre-commercial production) produced in the same period last year. Otjikoto’s cash operating costs for the first nine months of 2016 were a year-to-date record low of $368 per ounce, $61 per ounce (or 14 percent) below budget and $76 per ounce (or 17 percent) lower than in the same period last year (following commercial production on February 28, 2015). All-in sustaining costs for the first nine months of 2016 were $611 per ounce compared to budget of $695 per ounce and $569 per ounce in the same period last year (following commercial production on February 28, 2015). Capital expenditures in the third quarter of 2016 totalled $7.5 million and included pre-stripping costs of $5.1 million and mobile equipment costs of $1.0 million. Capital expenditures for the nine months ended September 30, 2016 totalled $33.8 million and included pre-stripping costs of $14.6 million and mobile equipment costs of $16.1 million.
The Otjikoto Mine is on track to meet its annual production guidance of between 160,000 to 170,000 ounces of gold in 2016. Gold grade is expected to increase slightly during the fourth quarter of 2016, as the higher grade ore near the bottom of the Otjikoto Phase 1 pit is mined out and the first ore from the Wolfshag starter pit is produced. B2Gold updated its 2016 cost guidance for the Otjikoto Mine and the company now expects Otjikoto’ s full-year cash operating costs to be lower than original guidance, with revised cash operating cost range of $365 to $405 per ounce (original guidance was $400 to $440 per ounce). Revised all-in sustaining costs are expected to be in the range of $600 to $640 per ounce for the year.
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