Reporting on its operational and financial results for the fourth quarter and the year ending December 31, 2016, Canada’s B2Gold Corp says that its Otjikoto mine in Namibia enjoyed a record year in 2016, producing 166 285 ounces of gold, above the mid-point of its production guidance range (of between 160 000 and 170 000 ounces) and 14 % (or 20 562 ounces) higher than 2015.
Aerial view of Namibia’s Otjikoto gold mine (photo: B2Gold Namibia).
Otjikoto’s 2016 production benefitted from higher throughput due to the successful completion of its mill expansion project in September 2015 (which increased plant capacity from 2,5 Mt/a to 3,0 Mt/a) and also due to overall process optimisations. In the fourth quarter of 2016, the mine produced 46 846 ounces of gold, slightly above budget and 19 % (or 7 472 ounces) higher than the fourth quarter of 2015.
For the full-year 2016, Otjikoto's cash operating costs were an annual record low of US$368 per ounce, at the low end of its reduced cost guidance range (of between US$365 and US$405 per ounce) and significantly beating initial guidance (of between US$400 and US$440 per ounce).
Otjikoto's AISC for the year was US$604 per ounce compared to budget of US$629 per ounce and US$550 per ounce in 2015 (following commercial production on February 28, 2015). In the fourth quarter of 2016, Otjikoto's AISC was US$587 per ounce (Q4 2015 – US$509 per ounce).
Otjikoto is forecast to produce between 165 000 and 175 000 ounces of gold in 2017, compared to 166 285 ounces produced in 2016. Cash operating costs are expected to be between US$510 and US$550 per ounce. The expected cost increase over 2016 is mainly due to higher projected strip ratios at the new Otjikoto Phase 2 pit and Wolfshag Phase 1 pit. In addition, fuel prices are also projected to be higher than 2016. The average strip ratios at Otjikoto are anticipated to be lower in 2018 and 2019. AISC is expected to be between US$855 and US$885 per ounce in 2017, reflecting higher expected cash operating costs per ounce and capital expenditures.
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.
The total exploration budget for Namibia in 2017 is US$5,1 million mainly for 5 000 m of diamond drilling on the Otjikoto licence area, and 12 000 m of diamond drilling and 5 000 m of RAB drilling on the Ondundu joint venture project.