B2Gold Q3 2023 Earnings Call Transcript

Quartr
Provided by Quartr
November 9, 2023

There are 10 speakers on the call.

Operator

Welcome to B2Gold Corporation's Third Quarter 2023 Earnings Results Conference Call. As a reminder, all participants are in listen only mode and the conference is being recorded. After the presentation, There will be an opportunity for analysts to ask questions. I would now like to turn the conference over to Clive Johnson, President and CEO of B2Gold. Please go ahead.

Speaker 1

Thanks, Asia. Welcome everyone As Ayesha said to our conference call to discuss the results of the Q3 of 2023. I want to say a few introductory words and then I'm going to pass it on. We have Good morning, here in Vancouver, most of our executive team and you're going to hear from me and then Mike will walk us through and like our So my CFO will walk us through the financial results for the quarter and then Bill Vital, COO, will walk us through an update on Brief update on projects around the mines, but also on the development projects, what we're doing and Bruce update and also and Becker also Talk about the way forward and potential for Vale expansion and give you a good update on that. And many of you have seen the results, of course, Through the news release and filing that was done yesterday, we're pleased with the results for the Q3.

Speaker 1

We had another solid quarter And so good costs and well that are well run core by our extremely Good operating teams on all of the sites. Michael will take you through some of that. But as importantly as the results for the quarter are, I think We're feeling very comfortable about being on track for our guidance for 2023. So we'll update you on that And tell you why, obviously, we're looking for Fekola's schedules for a good quarter coming up in the Q4. We'll talk more detail about that.

Speaker 1

In terms of where we are and our focus, I'll talk about looking forward a bit and some strategy. We're the key We just always just to continue to be a responsible miner and optimize to build production from our existing mines to Continue our great work that we do on the ESG front in so many different places. Obviously, the focus now going forward on the development side is the Goose, which You'll hear more about going extremely well, the construction at Goose and we're on schedule, on track I was expecting 1st gold production in the Q1 of 2025 as we'll hear more from Bill. But that's going extremely well. We'll be pleased with that.

Speaker 1

We've also had quite a bit of exploration. Shortly going on, up at Goose and St. George and they're starting to get asset rolls back We're pleased with what we're seeing, both in looking at some of the We're doing, but also some of the step outs looking to see if the potential is for more mineralization beyond what had been drilled By Sabina, remember they have a very small exploration budget, which is appropriate for a single asset company trying to finance and We'll have a news release out next week, update on the goose drills for you next week. We're feeling quite excited about We're also of course going forward looking at the alternatives and timing to potentially expand Fekola by production by trucking ore from the north and also there was some talk about maybe one day down the road building A second bill to further increase production from the Fekola complex. We've had some way for approval from the government.

Speaker 1

The government, as everyone Probably aware it's come out with a new mining code. We're looking how that works and Bill and Randall is here as well to walk us through some of what we're expecting there, we're looking for meetings with the government in the near term to try and discuss the implementation of the new code and how that might look for terms of expansion And I'll talk about everything we're doing down there with the government. So we're looking forward to having a positive result there. We do have heard repeatedly from the government, including recently, the government's ongoing commitment to gold mining and forward investment in gold mining and we definitely had some Nice compliments recently about the way Beech and Gold has operated in Mali. And we're confident that we can continue to work with the government as we always have To find the best way forward for all stakeholders.

Speaker 1

So I'll talk more about that. Obviously, as you know, as exploration And M and A looking at opportunities is always very important thing of what we do. I would say that in the exploration point of view, we're still have another significant budget For next year, you can answer some questions about that if you like. But I have another significant looking at brownfields exploration, which we've always And also additional regional exploration, but also again some new opportunities over Finland. We established a new company, an exploration company in the Philippines to look at other potential opportunities we see in the Philippine.

Speaker 1

Philippines is a good place to be in the mining industry, but it's largely been unexplored for decades. We share ourselves as one of the real success stories there and the government agrees. The new government we think The new government has shown that they are quite open to forward investment, including in the mining sector. So we see an opportunity there. So we have a 100% Peach Gold owned Philippine exploration companies look at further opportunities in the archipelago, but it's the Philippines.

Speaker 1

In addition to that, we will continue to look at investing in junior companies Where they have what we feel as good exploration people and good exploration prospects, we know our the market is Gold equities today as producers, let alone us as exploration companies. So companies like Snowline where we're at 9.9% in Vester and Marathon, etcetera.

Speaker 2

Vaster, Vaster,

Speaker 1

Vaster, we just gave Marathon a plug there. Okay. Vaster, sorry, It's going to happen once in the call. Yes, so we like their expansion upside at Matador and we will be closely following along The other thing to maintain going forward is our fiscal and financial discipline, which I've shown for a long time. At the end of the day, we're in a very strong financial position, still paying the industry leading dividend that's over 5% yield At the moment and we're basically debt free, so extraordinarily strong financial position and sitting on a substantial cash balance.

Speaker 1

So we'll have some money to spend next year, of course, with Goose and some of the other capital expenditures that we have. So our commitment going forward is to maintain at all times a very strong Financial position. So in terms of additional M and A, we've made it clear, I think that we continue to do that. We're not out there looking Development projects, we're very focused on what we have. We have reduced construction and then also with expansion potential expansion of And then Gramalote, we did acquire the other half of Gramalote.

Speaker 1

And at the end of the day, we've never really looked at it as a project owned by 1 company And what size and scale should it be? We were always pushing because it was a 50 JV and that would go to Jenny to actually make it big enough for So we were looking at 350,000 or 400,000 ounces a year. Now there is a higher grade core apparently of the government deposit. Can we significantly reduce the capital costs and make it a better project? It was close before.

Speaker 1

Can we make it an economically attractive approach to move forward to with us doing it our way And building something maybe that could produce 200,000 to 250,000 ounces a year with significantly lower capital costs. So we're kind of intrigued by that and we'll do a study Next year, probably a PEA and come out and see. So that's obviously down the road, but we do think That Tioga is a good place to be in Colombia and there's lots of local support government and local citizens and even federal government assume that they want some gold mining to go ahead in the country of Colombia. So I think with that, I'll pass it over to Mike to give you some more details on the results.

Speaker 3

Good. Thank you, Clive. So going to report the quarter and give you also an overview of how we see it out turning for the year and the guidance we've given for full year. So solid quarter starting in the revenue side, we sold 249,000 ounces at an average price of $19.20 For revenues of $478,000,000 And I should say overall, sales were a bit higher than budget and we're about 16,000 ounces ahead probably on the budget side where we thought we were in sales and we think we'll see that all throughout those were sales that were sold out from opening inventory. We think for the year we'll see us maintain that as well.

Speaker 3

So we should be slightly ahead sales wise versus production for the year. On the production side, for the Q, total coal produced from our 3 operating mines, 125,000 ounces, which is just slightly 8,000 ounces less than budget and that's the tale of some offsets I think. On the Fekola side, Fekola was about 13,000 ounces under budget and it was impacted really by the grade and lower mill feed grade that was going through. Fekola was hit by significant precipitation in the Q3 that didn't allow us to mine some of the Phase 6 higher grade materials quickly as we thought. So Supplemented with stockpile low grade lower grade stockpile material.

Speaker 3

We do expect that we are now in the Phase 6 and wetting that material And we expect that we'll more than catch up in Q4. We actually expect to be budget for Fekola in Q4. So that was a temporary rain induced I think that you'll see us catch up as we go through into Q4. At Masbate and Otjikoto, both of those operations are actually ahead of budget production wise. So Masbate, 1,000 ounces, 5,000 ounces ahead of budget.

Speaker 3

Otjikoto, 45,000 ounces, 2,000 ounces ahead of budget. And They both benefited from grade and slightly higher mill throughput at West Valley. At Otjikoto, the better grade is Definitely, at least partially is not significantly impacted by the Wolfshag material. We're mining material from Wolfshag underground It has an average of about 5.5 grams per ton. And I think just to put in context, I think year to date we've taken a mine approximately 50,000 ounces for And we expect both shag material to continue underground material continue to be mined at least until 2026 as we continue to look at underground potential there.

Speaker 3

On the cost side, taken into account those production Results, overall total cash operating cost from all of our operating mines, we were $7.41 per ounce Including our share caliber $7.55 per ounce, so approximately $50 lower than budget. And that's good result again for the Q. Fekola was a little over budget. It was $6.88 or just under $40 an ounce, Higher than budget and that's a function of the lower gold production we saw from Fekola in the Q3. And like I say that a lot of that was weather driven and we expect to see them catch up in Q4.

Speaker 3

Ms. Batty and Otjikoto were both significantly under budget. That's been a story that's Maintain as we've gone through the year and it continues. And that their beats on budget are a function of more production at each site and also Lower fuel costs, particularly at Masbate, Masbate has seen both HFO and diesel cost be approximately 20% less than budget. Ojikoto has also seen lower diesel cost, but again, because it's on the grid now, it's not impacted by HFO anymore.

Speaker 3

We don't run the mill Power is not using HFO generators anymore, we take that power off the grid. So, but diesel did have an impact there. And then when we take that and we look at the all in sustaining costs for the Q, total from all of our operating mines, dollars 12.73 Pronounced approximately $90 less than budget. And again, that's firstly a function of the lower cash costs, So we've seen lower than budget cash costs and higher than budgeted sales. As I mentioned, we are a little bit ahead on sales and all in sustaining costs are measured On per ounce sold and then also some lower CapEx than we thought, certainly at Masbate or Chikoto.

Speaker 3

So some of the CapEx is lower than budgeted and we think it will actually be a permanent beat for the year. So I think we guided for As you call it, we probably have a first stripping somewhere in the region of $10,000,000 that we're not going to incur through the balance of the year. And from Masbate, Probably somewhere to reach the $4,000,000 for the balance of the year will be permanent beats against budget. Fekola did see some higher CapEx. We did see some Higher than budget sustaining CapEx really a lot of that related to fleet either new fleet or fleet rebuilds.

Speaker 3

And as we look forward for the full year, maybe it's just a comment that, so where are we year to date? Production wise, we're very close to budget. We're at 3,000 ounces from our mines, lower than budget. Like I say, we are expecting to do some catch up with Fekola in Q So we're confident of being in our budget guidance range for production. I should mention as well that we didn't have any Fekola regional production this year.

Speaker 3

We had forecast that we would see a start in Fekola regional production. However, as we've mentioned in other calls, There are delays within the mining on Simmeli and the new mining code being issued. There were delays in getting new mining permits granted. So we haven't been able to get Fekola Regional production up and running this year and Bill will talk a little bit more about that and what the plans are for next year. But notwithstanding the fact that we didn't have Fekola Regional with what we see Fekola do in Q4, we still expected Fekola production for the Fekola complex, which included regional and our original guidance, we do expect that we'll be able to meet our guidance range, which was 580,610 ounces.

Speaker 3

Then on the Mesvadi and Ochocotas side, Confident, I think that we can maintain the beats that we've seen so far this year. And so overall, we think Masbate will come in somewhere at the high end of its guidance range of 170 1,000 ounces and Otjikoto will come in its range of 190,000 to 210,000 ounces. And overall, we reiterate our consolidated guidance For the year, no change over the whole year. When you look at the cost performance year to date, it's Fekola is Pretty close to budget on the cash cost side year to date and its value in Otjikoto are still significantly under. So on the cash cost side, for the full year guidance, we said we expect to be within range for Fekola, but we have re guided costs down, downwards for both Mesbati and Otjikoto.

Speaker 3

We haven't re guided overall consolidated range when you blend all that through, but we do we have guided that we expect So we're below the low end of our consolidated guidance range for cash costs. On the all in sustaining costs side, similar story. Otjikodim is batting significantly under budget year to date. So we have re guided their all in sustaining cost guidance down. So with Fekola, as I mentioned in the Q, we saw some higher sustaining CapEx and we've also improved some additional sustaining CapEx again, Most significantly related to new fleet and fleet rebuilds for the Fekola mine and some additional solar plant costs.

Speaker 3

And with those, We see that the Fekola sustaining CapEx could be somewhere around $50,000,000 higher for the full year than budgeted. And so with that in mind, we've re guided Fekola's all in sustaining cash cost Guidance upwards for the period. But when you marry that up with the reguide down for the Masvadino and Otjikoto overall, Our consolidated guidance range is unchanged. Again and again, we expect to come in at the low end of that guidance range. And just another commentary on the CapEx.

Speaker 3

So although we have the highest Fekola sustaining CapEx upwards, there are other Fekola, non sustaining CapEx expenditures that haven't all been incurred this year are unlikely to be, so we think they're offset. And when you look at the total CapEx For the year that was budgeted and where we see the forecast coming, that total CapEx including sustaining and non sustaining for both All the mines, we think we're going to come in very close to right on budget. So there's no overall change, but there is a bit of a Change between the sustaining and non sustaining mix. That's the operating results. A few other comments And where we are, as I mentioned, we've got regional delays until we get into next year and understand how the new 2023 minuteing quota we applied and get The study for regional, but we'll talk to that.

Speaker 3

In Gramalote, as you saw and as we announced last period, we did The second half AGAs, half of the JV, so we now own the Gramalote project entity 100%. That purchase was used as a measurement trigger to measure the cost that we had on the balance sheet for Gramalote. So we did trigger an impairment Graham, I'll ask you for accounting purposes. Non cash impact of $112,000,000 hit the earnings related to that impairment. But the rationale for the transaction was that we now own the Gramalote 100%.

Speaker 3

And we're now able to look, we think as a single owner, we can analyze maybe a lower skill operation, lower capital intensity, higher, Hopefully higher return, lower production, but overall higher grade operations. So that's the goal. The goal is to look at that and think our internal goal is here is to have an internal study available with our first look at that by the end of the first half of twenty twenty four. Goose, again, I think Bill will leave out with Bill to give you the update with Goose. That's our most exciting new project and it's Big one for V2 as we go forward.

Speaker 3

Still on track to bring it online Q1 2025. Year to date, From a V2 point of view, we spent $157,000,000 in cash on Goose capital expenditures and we started funding Hi, good morning, capital. As an Arctic operation that has limited shipping season, We need to make sure that we actually get the right raw materials, our consumables up there

Speaker 4

that we need to de

Speaker 3

risk that operation and keep our money. So Year to date in 2024, we spent just over $40,000,000 on those inventories. And we are working on a plan to look at exactly what we think we need As we go through the next year, the next shipping season, so the plan we bring to us up and running in early 2025 will significantly derisk it and get So I think we'll come up with a new estimate for that when we get into the 2024 budgeting release. Ojikoto, just last couple of comments to make, I did mention, so we've had 50,000 ounces from Wolfshag year to date. We have also disclosed that we are we can see the end of the Otjikoto open pit operations coming.

Speaker 3

So there are There will be retrenchment of those operations in 2024 completed in 2025. And in the income statement, there was in total A charge of $12,000,000 in the current year related to recognition of upcoming severance costs for the Ojikoto operations. Those are the

Speaker 2

main

Speaker 3

initial charges for those severance costs. You won't see some other additional steps as we go forward, but they'll really Because of passage of time and amortization purposes, but those the initial recognition has now occurred. Just to comment a couple of things, I think, on the earnings income statement. I think just to highlight what The main impact that we saw other than good operating results was the Gramalote impairment of $112,000,000 that does of course get adjusted out in adjusted earnings. And so when you look at the bottom line for the year, income attributable to shareholders of the company was $43,000,000 and net income was Our $43,000,000 loss or $0.03 per share EPS, but if you adjust out the non cash items including that Gramalote impairment, Adjusted income, net income was $65,000,000 adjusted EPS was $0.05 per share.

Speaker 3

And then on the cash flow side, operating cash flow from operations after working capital, dollars 110,000,000 for the Q, Approximately $0.08 per share. And as I mentioned that, that did get impacted by buildup of some consumables and inventory items at Back River to $40,000,000 and also a little bit more of a longer delay in getting some of the tax receivables refunded. Financing side, nothing too significant that's new to comment on, although that we did pay dividends, the normal part of the rate that we have paid over By a few quarters now, dollars 0.04 per share. And then for the year, for the period we had up $309,000,000 in the bank, as Clive mentioned, then so Pretty much debt free. At the end of the quarter, we did draw $50,000,000 on the line of the revolver in early Q4 as disclosed.

Speaker 3

And we do expect that we'll be drawing on that line as we go through the significant CapEx build up for Ghost for the next year. And I think that really summarizes everything I wanted to comment about in the Results of the operations.

Speaker 1

Thanks, Mike. Just maybe a note on Otjikoto, as we said, we're going we're seeing the end of Well, we've been mining, but we do have some great stockpiles in the future and we've had some encouraging results of potentially continuing underground mining. Further, we'll learn more about that as we keep drilling. But so there's significant potential to produce beyond when they open pit. And whether it's low grade stockpiles or whether it's low grade stockpiles complemented by some underground better underground grade materials.

Speaker 1

So just so people are aware of that, We could still be there for a significant amount of time, perhaps more around 100,000 ounces a year than the 200,000 ounces we're at right now. So I will see how that develops. With that, I'll pass it over to Bill Valentin.

Speaker 2

Yes. Thanks, Clive. I think a lot of the things I was going to talk about have been hinted at or even talked about a little bit. I just want to provide some more color to some of the issues. And I'll start operationally, Mike did a great job explaining everything.

Speaker 2

I think the key really there Just to really highlight that we as far as Q4, we see everything on track. We're going to have a really good quarter in particular At Fekola, getting out the bottom of A6 and at Ochocotah, we're going to have a big quarter as well. So as Mike said, we're on track to meet our guidance. Looking at Fekola Regional a little bit, I just put a little bit of history in place so everyone remembers. We originally Ed, internally last year, come out with a preliminary economic assessment and then did a feasibility study, which we were presenting to the government When they halted us to kind of take a look at this new mining code and this new local content law.

Speaker 2

But the key thing is you need to know is that study was done and it was economic. And as part of that, The government actually let us start to build all the infrastructure. So the infrastructure for mining in that area is actually complete. And the reason I tell you that It's important to understand kind of the process as we go forward. Now that they've got these laws in place, They have to create an implementation decree for both of them.

Speaker 2

We were down there, I guess it was a couple of weeks ago talking to our team down there about the local content And how does that impact what we're doing? And basically, we saw a path forward on how we were going to resolve any outstanding issues on local content. And so Right now, what we're waiting for is that those implementation decrees to come out, whether it be at the end of this year or the beginning of next year when we can sit down with the government. And assuming that those are all finalized, we will be able to quickly submit our documentation based on the new Laws and if it's still economic, which we believe will be, look at putting this into production. We probably need a quarter, 3 months, once we get our licenses and our conventions in place.

Speaker 2

So what we're talking about internally is that we're talking about in the second half of the year. So if you assume Kind of Q1, you do all the negotiations, get all your permits in place. Q2, we do all of our pre stripping and finalize all of our infrastructure. We could be ready in the second half of the year to go. And so that's the way we're looking at that for the regional stuff.

Speaker 2

As far as Goose is concerned, We did have it we had an analyst trip up there not too long ago and that went very well. I think we're very pleased with the work that's been done up there and We continue to say that we remain on schedule for that. But if you remember, we always talk about kind of some key areas that had to be done. The camp was done. That opened up in early summer.

Speaker 2

We had to get 3 major buildings up, that being the mill building, the workshop and the powerhouse. All of those buildings are now stood up with the concrete. We're busy cladding them. And quite frankly, with 3 quarters of the mill has been cladded And we'll have that closed up here in the very near future. So much so, we've moved installation of the mill ahead of schedule.

Speaker 2

So that is actually going to happen this month as the team is on-site. The cranes have been installed to help us there. And so that's in regards to the Construction of the mill were ahead of schedule. So really what remains outstanding is and is on the critical path is logistics. All the procurement for the 2024 construction season was done.

Speaker 2

Everything was shipped, everything arrived at the MLA. So we're sitting there with more than 3,000 containers ready to be dragged up the Winter Road. The Winter Road construction team is on-site now. All of the equipment has been run through as far as a maintenance check and really now we're just waiting for cold weather. So the plan really is to start in December On that, work our way through the 1st couple of months and then start trucking things up the road in early February.

Speaker 2

So that would give us a nice long window to the 1st part of May To make sure that we get everything in. So we really remain on track. I guess one of the questions which has been asked a couple of times is The updated mine plan, we've always said that that's it's going to come out at the end of this year and certainly it will form part of our budget that we release for next year. But we don't see any issues there. That's going kind of as we had expected and kind of forecasted before.

Speaker 2

And then I guess maybe the last thing I'll talk about is Gramalote and Mike hinted a little bit. So Gramalote It is a project that we've looked at a couple of times already, but we've always looked at it with a lens that it has to be bigger and it has to be within the confines of the permit that we already had. We now have taken full control of this project on 100% of it. And so it really allows us to take the blinders off or take the directional Engineering off and really focus on what is the best design for this project. And so we're looking at a smaller project That a single company could operate and we're really looking at consolidating some of the infrastructure into some of the basins Altogether and that would allow us to cut down on some of the high capital costs of resettlement and some of the other issues of the infrastructure that had to be built.

Speaker 2

So the plan really is to start in Q1 of next year or just after the 1st year and to have a PEA By the middle of the year, but I caution once again Clive always says that all PAAs are not the same. The fact of the matter is, is we have a very Good resource there of indicated material. And so at the end of the day, while we'll just be putting let's just be laying out the infrastructure, We could move very quickly if it was positive after that. Okay, anything else you'd like me to talk about?

Speaker 1

No, I think that's Good update. So I think with that, we'll open it up to questions. Operator?

Operator

Thank you. We will now begin the analyst question and answer session. The first question comes from Ovais Habib with Scotiabank. Please go ahead.

Speaker 5

Thanks, operator. Hi, Clive and Biju team. Congrats on a good quarter. Again, this is despite the rainy season in West Africa and great to see the development of Goose progressing well. Actually also great to see costs coming in below guidance as well.

Speaker 5

So just a couple of questions from me. My first question is regarding the new mining code in Mali. So from what I understand, once the decree has been provided to B2, B2 then applies for the permit or the exploitation permit And then kind of moves forward with some sort of a trucking option. Does that Negotiation that you're having with the Malayan government right now, does that impact How you're looking at the stand on operation as well? Can you provide a little bit more color on that?

Speaker 2

So I'll have to take it. Of course, Ovais, I mean everything has to be on the table now. Certainly the new 23 code Does apply to anything regional. And quite frankly, without the decree, we can't really say which way we're going to go, but we have to look at Both of them within the lens of the new decree for sure.

Speaker 6

And what I'm trying

Speaker 5

to ask Bill is, if you do get The decree, I mean, and you go do go forward with the trucking option. Is there a chance that, that negotiation could Continue and then you get a better kind of understanding and better economics for the standalone mill or is that kind of set in stone once you get At the degree for let's say the initial start of Anaconda?

Speaker 2

Yes. So I think conceptually what you're saying is right, but we just don't know at Because the decree hasn't come out, we haven't had the discussion sit down with the government. I mean Clive, he hinted at it, But when we were down there just recently talking about local content, we did meet with the Mr. Mines. And the one thing he did say is, he likes what B2 does and they do want mining in the country.

Speaker 2

How that all plays itself out is yet to be seen, but that will all come out of the discussions after the decree.

Speaker 1

I think one of the The things there on this was the fact that Bill touched on it was that even though we were delaying it in the permit because of the Mining audit, the new code, etcetera, the government encouraged us to go ahead and build the infrastructure for trucking ore. So most of that infrastructure is in place ready to go. So therefore, the governor was anticipating by encouraging us to go ahead and build the infrastructure, even though we didn't have the permit to actually Tremorg was a signal from the government that they clearly want to see that happen for sure. Obviously, everyone knows that O'Malley is looking for Increased revenue, everyone, I mean, it's difficult times, etcetera, in many ways. So clearly, Gold mining and the 20% ownership or whatever is going to be more than that under the new code Of the area, of the potential expansion area, not Fekola, but the potential expansion areas of the Fekola complex in the North Our great interest to the government in terms of increasing revenue, so they should be highly motivated to get permit in our hands and get mining as soon as possible.

Speaker 1

So we're encouraged by that and we'll see how the discussions go.

Speaker 5

Okay, sounds good. Thanks for the color and from both yourself and Bill. Just switching gears, I guess, to the Goose project. You guys were doing a lot of exploration work drilling In the area, when do we expect some results and how are kind of preliminary results looking so far?

Speaker 1

Yes, I think we touched on that earlier, but we are doing a lot of drilling spend going on. We're starting to get assay results in and We're going to have the news results for you next week giving you detailed updates on what we're seeing from the Gushchulin, including some assays. So We're very encouraged by what we're seeing so far once again in replicating some of the grades before, but also looking further down plunge and further So I think you know our view of the exploration potential there. And of course, as I said earlier, Sabina was understandably is a single asset company trying to build finance and build I did not spend a lot of money on exploration. It was $5,000,000 a year and we had over Canadian, we had over $20,000,000 this year and even more looking forward into next year.

Speaker 1

So

Speaker 5

Okay. Sounds good. And then just in terms of the drilling that you're doing, I mean, you guys had when we were at that site, you guys gave us an update on the underground development that had already been completed. Is there any drilling that's going from

Speaker 4

The plan is certainly first half of the year, the priority is actually to develop towards the ore. So that's the priority. So we'll continue drilling from surface. As soon as we have cubbies opened up for us Drill from underground will be added. There is already an underground rig on-site.

Speaker 4

So as soon as we can, we'll Replace that surface drilling with underground drilling, Oves.

Speaker 5

Sounds good. Thanks, Vik. Clive, that's it for me and thanks for taking my questions.

Operator

The next question comes from Anita Soni with CIBC World Markets. Please go ahead.

Speaker 4

Hi, good afternoon guys. I just wanted to go a

Speaker 7

little bit further To the options for Fekola, and I know you touched upon it a little bit, but could you just sort of reiterate what you think Like where you think additional ore sources would come from should you not get your permits for the satellite deposits?

Speaker 2

Well, if we don't get the so if we don't get any approvals for the satellite deposit, you would have to stay outside inside of The Mid Andi Permit. So that's Fekola, that's Cardinal, and that's continued to develop the Fekola underground, but we wouldn't see any ore in 24 there.

Speaker 7

Okay. So basic like I know you mentioned that you were looking at ways to mitigate the 18,000 ounces that you had expected this year by accelerating Cardinal. I was just wondering if that could extend this to 2024 or not?

Speaker 2

Absolutely. Okay.

Speaker 7

Right. So you do have opportunities. Could you just quantify like what Cardinal could potentially add to the fold?

Speaker 2

I can't really quantify because we're right in

Speaker 3

the middle of doing that as far

Speaker 2

as our budget season. So it'd be a bit premature. But I will tell you that We are looking at how does Cardinal fit in? Are there additional ways to mine Cardinal in an advanced rate while we wait? All those things are on the table.

Speaker 7

Okay. And then I just wanted to ask about, Ojikoto. Could you just tell me what the levels of the stock I don't think I have that anywhere. So that you will be processing once the underground and the open pit are mined out in tons and grade

Speaker 2

Yes, I don't have it in tons and grade. Dennis, maybe you know, but now I'm speaking just from memory and I'll correct myself if it's wrong. But I know we have more than 10,000,000 tons on the stockpile and I believe it's at 0.4 grams,

Speaker 1

Sorry, we have another answer to your question.

Speaker 7

Yes, I was just wondering on the mill, did you want to continue to run it at the current levels

Speaker 3

Before we get to that,

Speaker 1

Anita, Brian has an answer on the creative and answer.

Speaker 8

I think at the end of the mine, Anita, I think there'll be close to 20,000,000 tonnes of low grade, sort of in the 0.44 to 0.48 It's kind of a blend of low grade and mid grade. So That's kind of where we'll be at the end of the mine life. So definitely 6 to 7 years of throughput available there to supplement with underground

Speaker 1

At the end of the open pit of My Life, can we talk about the mill? I think Adit is asking about what would be too much.

Speaker 2

Yes. So we have looked at would we in fact Bringing the mill back down and the answer is we can, but we don't necessarily have to. Right now, The current life of mine shows us continuing to operate in that kind of 2,500,000 to 3,000,000 tons per annum and making a profit. It does require us, As you heard Clive indicate or Mike indicate, we're going to have to retrench all of the open pit workers and we're going to have to bring our cost down, But it is profitable at those grades and that's what the economics show for the next through 2,031.

Speaker 7

Okay. And can

Speaker 4

you just remind me what

Speaker 7

the closure liability on it is in 10 years from now or 7 years out?

Speaker 3

Well, I guess we've recorded $12,000,000 but it will probably I The exact number probably will probably inflate itself up to somewhere more like $20,000,000 by the time we're done.

Speaker 2

Okay. And remembering that because the open pit is closing next year, we've already started concurrent reclamation. So lot of the waste dumps are already under reclamation right now.

Speaker 7

Okay.

Speaker 5

All right.

Speaker 7

Thank you. That's it for my questions.

Speaker 1

Okay. Thanks to you.

Operator

The next question comes from Carey MacRury with Canaccord Genuity. Please go ahead.

Speaker 2

Hi, good morning guys. Maybe just

Speaker 9

a follow-up on Fekola. Was the original plan before the delays on the regional for Fekola to kind of be In that 600,000 ounce range next year, I guess my question is, without the regional, should we be expecting production to be down at Fekola or was that expected to be growth at Fekola?

Speaker 2

Yes. So the answer is yes. Production will have to be less. But if you go back, I think you really need to go back to kind of the technical studies we had, when we put out our last, technical report. It did show 24% as a down year, Right.

Speaker 2

So we always projected maybe less than 600, but it will be whatever we're going to produce And whenever we get into regional stuff for 2024. So it will be down.

Speaker 9

Okay. Thank you. And Now that you're back in the high grade, can you give a sense of what sort of grades we should be expecting for Q4 at Fekola?

Speaker 2

You could yes, it's I think it's plus 2 grams. But Gary, you could calculate it if you just look at what our range was and where we're at You could do the calculation because we're saying we're going to be kind of at the lower end of our range.

Speaker 9

Okay, fair enough. Thank you.

Speaker 2

Go ahead.

Operator

The next question comes from Don DeMarco with National Bank Financial. Please go ahead.

Speaker 6

Well, hi. Thank you, operator, and good morning, Clive and team. Maybe we'll start off with Goose. Bill, you talked about the ice road. And so the X-ray is going to start in early September.

Speaker 6

You're waiting for it to be cold enough. Can you give us an idea of what specifically what kind of temperatures or sustained temperatures you're looking for before you

Speaker 2

No. What I can tell you is that we're looking for ice thicknesses, right? So basically, I think once again, I hear Up there, you want to start out with like a meter thick of ice, then you can start dragging some of your containers up. And then as you get as it continues to freeze, it gets to sometimes in excess So 2 meters, that's when you can bring your heavier loads up. And you said September, but it's actually we'll probably start in December on the Tundra, which freezes first And work our way out towards the water sources.

Speaker 6

Okay. So, I mean, it sounds like the team is ready to go right now on And so you're just basically measuring ice thicknesses or kind of waiting for the sort of green light to go ahead. You said you're targeting early December, just to clarify? Yes.

Speaker 2

Well, that's right. So basically, the team will be Put into place early December that they've obviously got to make sure that all the equipment is operating. As I said, we've already done a full maintenance on it, We've got to identify right now in the process of identifying which containers are going to come up first, loads, weights, all that stuff is happening in MLA right now. So that's kind of the early step we're working on right now.

Speaker 6

Okay. And the total distance of the road is about 163 kilometers. If you build that over 2 months, 60 days, I guess your target is roughly 3 kilometers per day, but you're building it from maybe 3 different fronts, right, from the middle and then from both endpoints. Is that it?

Speaker 2

Yes, that's correct. And the key really is, remember, we're going to do the sea ice last. And so that's really where I think there's 20 or 30 kilometers of sea ice, maybe 40, if I remember correctly. That's really the key stuff that has to freeze up, picking up before we can go.

Speaker 6

Okay, great. Maybe just shifting then to questions on Fekola have been answered. But on Calibre, Can you share what your strategic intentions are with this with your 24% share in this? I mean, I see from the financials ASICs Still attractive, it's running around $1200 an ounce. But what are your thoughts medium or longer term with the Colibre?

Speaker 1

Yes. Those guys have done a good job. I think there was a great deal that everybody won. Our Nicaraguan employees So the B2 types stayed almost completely in place and Caliper's got some good technical people who've done a good job of what they've done and they continue to grow their production profile. So we're happy shareholders and they're good guys, well friends, they're doing a good job.

Speaker 1

We're happy with our investment. As they go forward, I've always said to the Caliber guys, if you are going in whatever you're doing going forward as things go along looking for To bring a spend of the shareholder in, we would consider selling a question of our position, but we're not in any rush to do that and we're not We'll work with them. If that were to come about, we like what they're doing and we're happy to be shareholders.

Speaker 6

Okay. Great. Well, thanks for that and

Operator

This concludes the question and answer session. I would like to turn the conference back over to Clive Johnson for any closing remarks. Please go ahead.

Speaker 1

Okay. Thanks all for your participation and your good questions. And We look forward to continuing to update you. As I said, next thing up in terms of news would be the Updated and exploration in Back River on the on some of the Goose and George trucks. So thanks for your attention.

Operator

This concludes today's conference call. You may disconnect your lines. Thank you for participating and have a pleasant day.

Powered by Quartr
Earnings Conference Call
B2Gold Q3 2023
00:00 / 00:00