B2Gold expects lower Q2 output from Goose mine after fire damage

B2Gold (TSX: BTO, NYSE-A: BTG) says it is expecting lower output from its Goose mine in Nunavut after a fire broke out around the crushing circuit, resulting in a temporary reduction in its throughput.

The incident took place on the evening of April 16, the company said last week, adding that emergency responders were immediately deployed to put out the fire, which caused no injuries.

In a follow-up statement on Monday, the gold miner reconfirmed that no injuries were reported, nor were medical treatments required. An initial assessment determined that the fire damage was localized to the crushing circuit area, and there was no impact to the mill or power facility.

In response, B2Gold said it has devised a preliminary revised mill processing plan based on the use of mobile crushers it has available on site while the crushing circuit is being repaired. Additional temporary crushing capacity has also been sourced, it added.

The repair work, meanwhile, is expected to cost around C$10 million and be completed in the third quarter, coinciding with the previously announced addition of a run-of-mine bin and apron feeder.

Lower throughput

Nevertheless, this new plan would still lead to lower throughput rates for the second quarter, and the company now expects output from the mine to be between 18,000 and 20,000 oz., down from the 29,000 oz. it previously forecasted.

For the full year, B2Gold reiterated its guidance of 170,000 to 230,000 oz. for the Goose mine, highlighting that the damage would only be limited to the current quarter, and in the previous quarter, the operation had already exceeded its internal forecast with production of 42,876 oz.

Goose — part of the Back River gold district — entered commercial production about six months ago. With a design capacity of 4,000 tonnes per day, the mine is expected to operate for nine years and produce more than 2.3 million oz. over that span.

Shares of B2Gold fell 1.6% on the latest update, giving the company a market capitalization of nearly C$9 billion ($6.6 billion).