B2Gold to invest $50 million in Fekola mine expansion

Fekola is located near Mali’s border with Senegal, and about 520 km from the country’s capital, Bamako. (Image courtesy of B2Gold Corp.)

Mid-tier Canadian miner B2Gold (TSX:BTO)(NYSE: BTG) will invest $50 million into expanding its 80%-owned Fekola mine in southwestern Mali, which could take the operation’s processing throughput to 7.5-million tonnes a year, up from the current 6-million tonne throughput.

The decision comes as the results of a preliminary expansion assessment (PEA), published on Wednesday, recommended an expansion of the existing plant to process an additional 1.5-million tonnes a year, without requiring an extra ball mill or additional power generation capacity.

Vancouver-based B2Gold, which poured first gold at Fekola in late 2017, said that as result of the expansion the mine will produce more gold over a longer life. It will also have “more robust economics and higher average annual gold production, revenues and cash flows than the previous life of mine,” the company said in a statement.

In 2018, its first full year of commercial production, Fekola exceeded expectations, churning out 439,068 ounces of gold, while B2Gold expected a maximum of 430,000 ounces.

Utilizing additional resources discovered in October, the mine could produce 550,000 ounces a year between 2020 and 2024 and 400,000 ounces between now and 2030, B2Gold said.

The PEA also predicts an increase in the net present value of Fekola of some $500 million and forecasts life of mine pre-tax net cash flow of about $2.8 billion. The revised life of mine operating cash cost and all-in sustaining cost (AISC) would be between $500 and $700 per ounce respectively.

B2Gold  said it was also assessing various optimization alternatives, including processing gold-bearing ore from the company’s Anaconda project, which is situated north of Fekola, as well as installing solar power at the Fekola premises and “… various tailings and waste disposal strategies”.

This process would continue through the second quarter of this year and would be incorporated into a revised Fekola life of mine plan, which is expected to be available early next year.

Fekola is located near Mali’s border with Senegal, and about 520 km from the country’s capital, Bamako. The country’s government owns the reminding 20%.