By Hilary Mare
B2 Gold’s Otjikoto Mine in Namibia had a strong start to the year, following a record year of gold production in 2017, with first quarter gold production of 39,499 ounces which was above budget by 6 percent (2,174 ounces).
Mill throughput, recoveries and processed grade were all slightly above budget, as the mine continues to incrementally optimize its operations.
Compared to the prior-year quarter, gold production was lower by 8 percent (3,275 ounces), as planned, due to a negligible amount of Wolfshag ore being mined in 2018 while Phase 2 of the Wolfshag Pit is being developed.
“Ore production is planned to resume again from the Wolfshag Pit in 2019 when it is projected to provide higher grade open-pit mill feed,” Rick Howes, President and Chief Executive Officer of B2 Gold said in a statement last week.
The Otjikoto mill continued to operate well, processing 827,227 tonnes (Q1 2017 – 832,805 tonnes) in the quarter at an average grade of 1.51 g/t (Q1 2017 – 1.62 g/t) with gold recoveries averaging 98.7 percent (Q1 2017 – 98.6 percent).
Capital expenditures in the first quarter of 2018 totalled US$11 million, mainly consisting of US$6 million for pre-stripping, US$3 million for installation of a solar power plant and US$1 million for mobile equipment rebuilds.
“Otjikoto’s solar plant commenced full commissioning in early April 2018 and by changing the power plant to an HFO solar hybrid plant is expected to reduce Otjikoto’s HFO consumption by approximately 2.3 million litres and reduce associated power generation fuel costs by approximately 10 percent in 2018,” added Howes.
For full-year 2018, the Otjikoto Mine is expected to produce between 160,000 and 170,000 ounces of gold, primarily from the Otjikoto Pit, at cash operating costs of between US$480 and US$525 per ounce and AISC of between US$700 and US$750 per ounce.
“Geotechnical, hydrogeological, and design studies for Wolfshag have been completed, based on an updated resource model, resulting in a larger open pit than previously reported.”
Mining at Wolfshag commenced in late 2016 and Wolfshag ore provided a significant component of the Otjikoto mill feed in 2017. Updated Wolfshag mineral reserves and resources were reported in the Company’s recent Annual Information Form, dated March 23, 2018, with 372,000 ounces of Probable Mineral Reserves remaining in the Wolfshag open pit as at December 31, 2017.
This updated reserve, based on the larger Wolfshag open-pit design, includes an additional 132,000 ounces of Probable Mineral Reserves within Wolfshag Phase 4. In addition, the Wolfshag mineral resource remains open down-plunge and may be exploitable in the future by underground mining.
The Company’s total exploration budget for Namibia in 2018 is approximately US$5 million. Exploration in 2018 will include 17,000 metres of diamond drilling and 4,000 metres of RAB drilling split between the Otjikoto Project and the Ondundu joint venture.
For first quarter 2018, Otjikoto’s cash operating costs were US$569 per ounce, US$57 per ounce (9 percent) below budget, and AISC were US$758 per ounce, US$50 per ounce (6 percent) below budget.
“These favourable budget variances mainly resulted from higher than expected production combined with lower than expected processing and site general costs. Compared to the prior-year quarter, cash operating costs were higher (as planned) by US$156 per ounce, as the prior-year quarter had benefitted from higher production, lower fuel costs and a weaker Namibian dollar. However, compared to the prior-year quarter, AISC in the first quarter of 2018 were lower by US$13 per ounce as a result of lower sustaining capital expenditures (mainly for mobile equipment) which offset the higher cash operating costs,” explained Howes.
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