16 Mar 2014 15:50pm
WINDHOEK, 16 MAR (NAMPA) - Vancouver-based gold producer B2Gold says it is fully funded to complete its mine-site capital expenditure, exploration, and the construction of the Otjikoto mine, and finish 2014 with a strong cash balance.
In its 2013 fourth quarter and year-end results issued on Friday, B2Gold indicated that during 2015, the company's cash from operations will increase significantly due to gold production from the Otjikoto mine.
Due to its strong cash position and cash flow from operations, the company is fully-funded to complete its mine site capital expenditures, exploration, and the construction of the Otjikoto mine, and finish 2014 with a strong cash balance. In 2015, the company's cash from operations will increase significantly due to gold production from the Otjikoto mine, it noted.
The report said construction at the open pit at the mine remains on time and on budget. Construction is expected to be completed and production is scheduled to commence in the fourth quarter of 2014.
Pre-development cost estimates of US dollars 244 million (about N.dollars 2,4 billion) and deferred stripping estimates of US dollars 33 million (about N.dollars 3,3 billion) remain in line with original pre-feasibility study estimates. In addition to these costs, the company planned to finance a total of US dollars 60 million (about N.dollars 6 billion) for mobile mining equipment and power plant construction costs.
However, based on the positive drill results from the Wolfshag zone to date, the company announced in January 2014 plans to expand the Otjikoto mine in 2015, increasing ore throughput from 2,5 million tonnes per year to three million tonnes.
The Wolfshag zone is situated directly adjacent to the east and northeast portion of the planned Otjikoto deposit open pit.
Once the expansion is completed at the end of 2015, the company expects that the annual gold production from the main Otjikoto pit would increase to approximately 170 000 ounces, according to the report.
The 2014 Otjikoto exploration programme is budgeted at US dollars 8 million (about N.dollars 80 million). The exploration drilling programme will focus primarily on infill drilling on the northern portion of the Wolfshag zone and will further test the extension of the Wolfshag zone to the south. The company anticipates being in a position to upgrade the mineral resource classification to the indicated category by the end of 2014. The 2014 programme will also include metallurgical and geotechnical test work for the Wolfshag zone.
The production forecast for 2014 does not include any estimated gold production from the Otjikoto development project in Namibia as revenue earned from the sale of pre-commercial production will be credited to mineral property development costs prior to commercial production. With the first full year of gold production from the Otjikoto gold project in Namibia scheduled for 2015, the company is projecting 2015 gold production of 555 000 ounces, based on current assumptions, it added.
B2Gold has three operating mines - two in Nicaragua and one in the Philippines - and a strong portfolio of development and exploration assets in Nicaragua, Colombia, Namibia and Uruguay.