By Hilary Mare
B2 Gold has confirmed that the Otjikoto Mine will receive a total exploration budget in 2017 of US$5.1 million (N$68million)
Clive Johnson, president and chief executive officer of the mine explained that this money is mainly for 5 000 metres of diamond drilling on the Otjikoto licence area, 12 000 metres of diamond drilling and 5 000 metres of RAB drilling on the Ondundu joint venture project.
“Drilling at Ondundu in 2016 has defined a distinct North South zone of mineralisation with holes containing up to 3.10 g/t gold over 68.4 metres drilled in hole ON-16-092 and 2.58 g/t over 52.1 metres (true width approximately 50 percent of drilled width) drilled in hole ON-16-96. An additional 5 000 metres of diamond and RC drilling are committed to new targets in and around the Otjikoto area,” he said.
Life-of-mine production plans for the Otjikoto Mine, incorporating preliminary projections for the Wolfshag open pit and underground mines, have been completed for various options and will be further refined as the detailed geotechnical, hydrogeological, and design studies are completed in 2017.
Ongoing studies are leading the company to re-evaluate the open pit and underground interface.
For 2017, sustaining capital costs at the Otjikoto Mine are estimated to be US$37.1 million, including US$15 million for capitalised pre-stripping costs, US$10.4 million for mine fleet additions, and US$6 million for major equipment rebuild.
The company expects US$10 million of the Otjikoto mine fleet expansion purchases to be lease financed. To advance stripping at both the Otjikoto and Wolfshag pits the mining fleet will be increased by an additional 250-tonne excavator along with additional haul trucks and support equipment. Non-sustaining capital costs are budgeted to be US$12.7 million which includes US$8.5 million for phase one of the construction of a solar power plant. The solar power plant is expected to reduce fuel consumption and protect against rising oil prices.
In total, for 2017, B2Gold is projecting another solid year with consolidated gold production expected to be in the range of between 545 000 and 595 000 ounces (including estimated pre-commercial production from Fekola of between 45 000 and 55 000 ounces).
In 2017, consolidated cash operating costs (including the Fekola pre-commercial production period) are expected to be between US$610 and US$650 per ounce (2016 revised guidance range was between US$500 and US$535 per ounce). The expected increase reflects the impact of higher projected operating strip ratios at Masbate and Otjikoto, higher projected fuel prices, and lower production from Masbate.
Consolidated AISC (including the Fekola pre-commercial production period) are expected to be between US$940 and US$970 per ounce (2016 revised guidance range was US$780 to US$810 per ounce). The expected increase reflects higher anticipated cash operating costs per ounce as well as higher expected capitalised pre-stripping costs and other capital expenditures. In 2017, forecast sustaining capital expenditures are anomalously high as a result of Masbate’s planned fleet replacement and expansion and higher average strip ratios at Otjikoto which are expected to decline in 2018 and 2019.
For 2018, with the planned first full-year of production from the Fekola project (based on current assumptions and updates to the company’s long-term mine plans), the company’s forecast consolidated cash operating costs per ounce and AISC per ounce are expected to decrease in 2018 (compared to 2017) and be comparable to the company’s 2016 cost guidance ranges (of US$500 to US$535 per ounce for cash operating costs and US$780 to US$810 per ounce for AISC).
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