B2Gold Corp. (TSX: BTO) (NYSE AMERICAN: BTG) (NSX: B2G) is pleased to announce positive results from the Updated Preliminary Economic Assessment for the Gramalote Ridge deposit at the Gramalote gold project in Colombia, a joint venture between B2Gold and AngloGold Ashanti Ltd. B2Gold assumed the role of manager of the Gramalote joint venture on January 1, 2020. All dollar figures are in United States dollars unless otherwise stated.
The PEA is preliminary in nature and includes Inferred Mineral Resources that are considered too speculative geologically to have the economic considerations applied to them that would enable them to be categorized as Mineral Reserves, and there is no certainty that the PEA based on these Mineral Resources will be realized. Mineral Resources that are not Mineral Reserves do not have demonstrated economic viability.
B2Gold is currently completing approximately 42,500 metres of infill drilling at Gramalote Ridge to convert existing Inferred Mineral Resources to an Indicated category, and 7,645 metres of geotechnical drilling for site infrastructure.
Gramalote Project Mineral Resource Estimate
The Mineral Resource estimate for the overall Gramalote Project (100% basis), effective December 31, 2019, within a pit shell run at a gold price of $1,500 per ounce includes:
Indicated Mineral Resource Estimate
|Total Indicated Resources||78,200,000||0.85||2,140,000|
Inferred Mineral Resource Estimate
|Subtotal Oxide Inferred||9,100,000||0.59||170,000|
|Subtotal Sulphide Inferred||120,100,000||0.69||2,660,000|
|Total Inferred Resources||129,200,000||0.68||2,830,000|
|1. Mineral Resources have been classified using the CIM Standards.|
|2. Mineral Resources that are not Mineral Reserves do not have demonstrated economic viability.|
|3. The Qualified Person for the Mineral Resource estimate is Tom Garagan, P.Geo., B2Gold’s Senior Vice President, Exploration.|
|4. Mineral Resources are reported on a 100% project basis (B2Gold currently holds a 48.3% attributable interest with the remaining 51.7% interest held by AGA).|
|5. Mineral Resources for Gramalote assume metallurgical recoveries of 83.9% for oxide and 95% for sulphide, and operating cost estimates of an average mining cost of $2.13/t mined, processing cost of $3.35/t processed for oxide and $6.58/t processed for sulphide, general and administrative cost of $1.89/t processed and selling cost of $50.52/oz produced.|
|6. Mineral Resources for Trinidad assume metallurgical recoveries of 81.7% for oxide and 90.9% for sulphide, and operating cost estimates of an average mining cost of $1.82/t mined, processing cost of $3.35/t processed for oxide and $6.58/t processed for sulphide, general and administrative cost of $1.89/t processed and selling cost of $50.52/oz produced.|
|7. Mineral Resources for Gramalote and Trinidad are reported at cut-offs of 0.15 g/t gold for oxide and 0.20 g/t gold for sulphide.|
|8. All tonnage, grade and contained metal content estimates have been rounded; rounding may result in apparent summation differences between tonnes, grade and contained metal content.|
The Gramalote Project is located in central Colombia, approximately 230 kilometres (“km“) northwest of Bogota and 120 km northeast of Medellin, in the Province of Antioquia which has expressed a positive attitude towards the development of responsible mining projects in the region. The PEA was prepared by B2Gold and evaluates recovery of gold from a an open-pit mining operation that will move up to 143,000 tonnes per day (50.0 Mtpa), with a 30,137 tpd (11.0 Mtpa) processing plant that includes crushing, grinding, flotation, with fine grinding of the flotation concentrate and agitated leaching of both the flotation concentrate and the flotation tails, followed by a carbon-in-pulp recovery process to produce doré bullion. The PEA is based solely on production from the Gramalote Ridge deposit and does not include potential production from the nearby Trinidad deposit, which has a current Inferred Mineral Resource estimate (see above), and the Monjas West zone. The Mineral Resource estimate for Gramalote Ridge that forms the basis for the PEA includes Indicated Mineral Resources of 70,110,000 tonnes grading 0.92 g/t gold for a total of 2,070,000 ounces of gold and Inferred Mineral Resources of 79,030,000 tonnes grading 0.79 g/t gold for a total of 2,010,000 ounces of gold.
The PEA updates and enhances the previous studies on the Gramalote Project in several areas, including:
Accelerated mining is planned in the early years of production to provide higher grade feed to the plant while stockpiling lower grade material. The final four years of plant feed are from low-grade stockpiles and oxide ore. Oxide ore, which only makes up about 3% of the plant feed, will be stockpiled and processed at the very end of the project life as blending this material with the fresh ore does not yield optimal gold recoveries.
The PEA assumptions include revenues using a gold price of $1,350 per ounce and current prices for fuel, reagents, labour, power and other consumables. The key parameters of the PEA are presented in the following table (100% basis):
|Contained gold ounces processed (Moz)||4.082|
|Gold recovery (%)||94.3|
|Average gold grade (g/t)||0.85|
|Gold ounces produced (Moz)||3.85|
|Average gold production for the first five years (oz)||416,600|
|Average annual gold production (oz)||283,990|
|Mine life (years)||13.6|
|Ore tonnes processed (Mt)||149|
|Waste material mined (Mt)||288|
|Waste to ore strip ratio||1.93|
|Project Economics – $1,350 /oz gold price|
|Construction capital ($M)||901|
|Sustaining capital ($M)||103|
|Gross gold revenue ($M)||5,198|
|Net cash flow (pre-tax) ($M)||1,827|
|Net cash flow (after tax) ($M)||1,283|
|NPV5.0% (pre-tax) ($M)||1,027|
|NPV5.0% (after tax) ($M)||671|
|IRR (after tax) (%)||18.1|
|Unit Operating Costs|
|LoM cash operating costs (mining, processing and site G&A) ($/oz gold)||544|
|LoM AISC (cash operating costs + royalties, corporate G&A, selling costs and
silver credits and excluding pre-production capital costs) ($/oz gold)
|LoM all-in costs (AISC and pre-production capital costs) ($/oz gold)||882|
|Average LoM mining cost ($/t mined)||2.16|
|Average LoM processing cost ($/t processed)||5.61|
Based on the positive results from the PEA, B2Gold believes that the Gramalote Project has the potential to become a large, low-cost open-pit gold mine, subject to completion of ongoing infill drilling and the results of a final feasibility study expected by the end of 2020. The Gramalote Project has several key infrastructure advantages, including:
In addition, B2Gold expects the Gramalote Project to benefit from several key operational advantages, including:
The PEA is subject to a number of assumptions and risks, including among others, that a Modified Environment Impact Study and a Modified Project Implementation plan will be approved within the required timeline, all required permits and other rights will be obtained in a timely manner, the Gramalote Project will have the support of the local government and community, the regulatory environment will remain consistent and no material increase will have occurred to the estimated costs.
Gramalote is a large, low-grade, low-cost project and sensitive to the gold price, as demonstrated in the following table:
|After Tax IRR
Project Next Steps
B2Gold and AGA have agreed on a budget for the feasibility study on the Gramalote Project of approximately $37 million through the end of 2020. This budget will fund 42,500 metres of infill drilling to convert existing Inferred Mineral Resources to the Indicated category, and 7,645 metres of geotechnical drilling for site infrastructure. The Company currently expects to complete all drilling by the end of May 2020. In addition, the budget will fund feasibility work including an updated Mineral Resource estimate, detailed mine planning, ongoing environmental studies, additional metallurgical test work, engineering and detailed economic analysis.
The Gramalote joint venture will continue to advance resettlement programs, establish coexistence programs for small miners, work on health, safety and environmental projects and continue to work with government and local communities on social programs. B2Gold, as manager, plans to continue the feasibility work with the goal of B2Gold completing a final feasibility study by December 31, 2020. Due to the amount of work completed by AGA over the past several years, including extensive testing programs, the work with local communities and small miners, and the high level of engineering performed in 2017 for an internal study, the work remaining to reach final feasibility is not extensive. The main work program for feasibility is infill drilling to confirm and upgrade the Inferred Mineral Resources to the Indicated category.
The Environmental Impact Study and Project Implementation Plans for the Gramalote Project have been fully approved by the National Authority of Environmental Licenses of Colombia. Due to the desired modifications to the processing plant and infrastructure locations, a Modified Environment Impact Study and a Modified Project Implementation plan were submitted and are currently in the final approval process. If the final economics of the feasibility study are positive and the joint venture makes the decision to develop Gramalote as an open-pit gold mine, B2Gold would utilize its proven internal mine construction team to build the mine and mill facilities and operate the mine on behalf of the joint venture.
Tom Garagan, Senior Vice President, Exploration at B2Gold, a qualified person under NI 43-101, has approved the scientific and technical information regarding exploration matters and the Mineral Resource estimate contained in this news release.
Bill Lytle, Senior Vice President, Operations at B2Gold, a qualified person under NI 43-101, has approved the scientific and technical information related to operations matters contained in this news release. Mr. Lytle has visited the Gramalote Project several times since 2009 and has reviewed the mining operations and has reviewed the technical aspects of the PEA that form the basis for this news release.
About B2Gold Corp.
B2Gold is a low-cost senior gold producer headquartered in Vancouver, Canada. Founded in 2007, today, B2Gold has three operating gold mines and numerous exploration and development projects in various countries including the Philippines, Namibia, Mali and Colombia. In 2020, B2Gold forecasts consolidated gold production of between 1,000,000 and 1,055,000 ounces.
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