B2GOLD registered a 15% year-on-year increase in second quarter gold production taking its first half output a fifth higher than in 2019.
Production of 239,574 ounces for the three months ended June included 147,424 oz from the firm’s Fekola mine in Mali. B2Gold, which is listed in Toronto, also produces gold from the Otjikoto mine in Namibia and Masbate in the Philippines.
Production for the six months ended June was 506,455 oz and 490,206 oz excluding its equity interest in a mine it sold to investment company Calibre last year.
Assuming a gold price of $1,700 per oz, B2Gold forecast an operating cash flow for the year of $850m up from a previous estimate of $700m for the year. Gold production guidance for the year was unchanged at one million to 1.01 million oz.
Given that Fekola comprises just over 61% of total second quarter gold production, a fresh wave of protests in Mali, which saw four people killed on Friday, would be a reason for concern. However, the company said there was no operational impact from the civil unrest.
“The recent political unrest in Mali has not had a material impact on B2Gold’s operations,” the company said today. “The Fekola Mine continues to operate as normal and the company is maintaining both quarterly budgeted production and annual production guidance.”
Based on current expectations, Fekola was forecast to produce 590,000 and 620,000 oz at cash operating costs of between $285 and $325 per ounce and AISC of between $555 and $595/oz.
Mali President, Ibrahim Boubacar Keïta, announced last week the dissolution of the country’s constitutional court in an attempt to calm unrest. “This de facto dissolution of the court will enable us, from next week, to ask relevant authorities to nominate new members so that the reformed court can quickly help us find solutions to the disputes arising from the legislative elections,” Keïta is quoted to have said in a BBC report.
Protests started after the opposition coalition rejected previous concessions from Keïta designed to end a political stand-off over a disputed legislative election in March. Keïta secured a second five-year term in 2018, but has faced increased opposition over a rise in jihadist violence and an economic crisis, said the BBC.
“B2Gold will continue to monitor the situation to ensure that its mining operations continue normally, providing important economic benefits both to the communities around the mine, and to regional and national governments,” the company said.
An expansion of Fekola was forecast to be completed in the third quarter, said B2Gold. Based on a feasibility study last year, an expanded Fekola could see the mine produce some 550,000 oz per year between 2020 and 2024, and 400,000 oz/year between now and 2030.
In June, B2Gold declared a second quarter cash dividend of $0.02 US cents a share which will take its full-year payout to $0.08c/share. This doubles the maiden dividend declaration in November of $0.04/share annually which was to be paid out quarterly.
The move is an indication of the strength of the world’s gold producers generally notwithstanding the effects of the COVID-19 pandemic.
