By Hilary Mare
ACCORDING to the B2Gold 2016 fourth quarter and full-year results released last week, the Otjikoto Mine had a record year in 2016, producing an annual record 166 285 ounces of gold, above the mid-point of its production guidance range (of between 160 000 and 170 000 ounces).
This also meant 14 percent (or 20 562 ounces) higher than 2015 (including 18 815 ounces of pre-commercial production from Otjikoto).
“Otjikoto’s 2016 production benefited from higher throughput due to the successful completion of its mill expansion project in September 2015 (which increased plant capacity from 2.5 million tonnes per annum to 3.0 million tonnes per annum) and also due to overall process optimisations. In the fourth quarter of 2016, the Otjikoto Mine produced 46 846 ounces of gold, slightly above budget and 19 percent (or 7 472 ounces) higher than the fourth quarter of 2015,” said Clive Johnson, president and CEO of the mine.
For the full-year 2016, Otjikoto’s cash operating costs were an annual record low of $368 per ounce, at the low end of its reduced cost guidance range (of between $365 and $405 per ounce) and significantly beating initial guidance (of between $400 and $440 per ounce).
Cash operating costs also decreased by $57 per ounce (or 13 percent) compared to the prior-year (following commercial production on February 28, 2015). The lower cash operating costs reflect lower fuel prices and the reduced consumption of fuel and reagents.
“Cash operating costs were also lower in 2016 compared to 2015 as a result of a weaker Namibian dollar/US dollar foreign exchange rate. In the fourth quarter of 2016, Otjikoto’s cash operating costs were $367 per ounce (Q4 2015 – $385 per ounce)”.
Otjikoto’s AISC for the year were $604 per ounce compared to budget of $629 per ounce and $550 per ounce in 2015 (following commercial production on February 28, 2015). In the fourth quarter of 2016, Otjikoto’s AISC were $587 per ounce (Q4 2015 – $509 per ounce).
Capital expenditures totalled $39.2 million in 2016 and included pre-stripping costs of $18.3 million and mobile equipment purchases of $17.7 million. In the fourth quarter of 2016, capital expenditures totalled $5.4 million mainly for pre-stripping costs of $3.2 million, mobile equipment purchases of $1.2 million and $0.6 million for the Wolfshag underground study.
For the full-year 2016, consolidated gold revenue was a record $683.3 million on record sales of 548,281 ounces at an average price of $1,246 per ounce compared to $553.7 million (or $576.8 million including $23.1 million of pre-commercial sales from Otjikoto) on sales of 481,185 ounces (or 499,651 ounces including 18,466 ounces of pre-commercial sales from Otjikoto) at an average price of $1,151 per ounce in 2015.
The 23 percent (or $129.6 million) increase in annual gold revenue was mainly attributable to a 14 percent increase in gold sales volume and an eight percent increase in the average realized gold price. In the fourth quarter of 2016, consolidated gold revenue was $181.2 million on record sales of 151,524 ounces at an average price of $1,196 per ounce compared to $139 million on sales of 127 482 ounces at an average price of $1,090 per ounce in the fourth quarter of 2015.
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