B2GOLD, the Toronto-listed gold miner, said it was “engaged in ongoing discussions” with the Government of Mali after an application to renew a permit to prospective ground north of its Fekola gold mine was denied.
A permit for the one-year renewal of the Menankoto Permit was submitted in February. The prospect is situated about 20 kilometres of the Fekola Mine licence area in the Anaconda area about which B2Gold has expressed excitement. No reason was given for the failure of the application.
“The company strongly believes that Menankoto is entitled to a renewal of the permit under applicable law and is engaged in ongoing discussions with the Malian Government to clarify the situation,” said B2Gold in a statement on Monday.
B2Gold bought Fekola in 2014 when it assumed control of Australia’s Papillon Resources in a share deal worth $500m. The transaction was criticised at the time, but Fekola has proved to be a jewel: it comprises about half of B2Gold’s annual one million ounces a year production.
Fekola is expected to produce an average of 400,000 oz of gold annually over a 12-year lifespan with production during the first five years averaging 550,000 oz annually.
Potential reserves and resources in the Menankoto permit were not part of Fekola’s current life of mine or production estimates – forecast to be 530,000 to 560,000 oz in 2021 – but failure to access the property could dent Fekola’s mineral potential.
Clive Johnson, CEO of B2Gold, said in February he expected further production growth from Fekola as a result of exploration work north of the mine.
“When we bought Fekola we believed there was significant potential for more Fekola-style mineralisation in an area about 20km to the north called Anaconda which had already been identified by Papillon,” he told delegates at the Investment in Africa Mining Indaba.
“Last year, drilling operations there hit some significant sulphide intercepts below the mineralised saprolite zone and those intercepts are giving us the same kind of grades as the ones we saw in the early days on the main Fekola deposit when Papillon was drilling it.
“It’s early days, but we are spending $20m on exploration in Mali this year to extensively drill multiple targets in that area. We are clearly in elephant country here when it comes to new gold mines and we are looking aggressively.”
“Since the company commenced its investment in Mali, B2Gold has enjoyed a positive and mutually beneficial relationship with the Government of Mali, including the ongoing grant and renewal of several exploration and other permits in the country,” the company said.