Capital injections for the third quarter of 2022 into B2 Gold’s Otjikoto gold mine totalled US$20 million (about N$347 million), the miner said last week while releasing its operational and financial results for the third quarter of 2022.
This expenditure primarily consisted of N$139 million for Wolfshag underground mine development, N$121 million for prestripping in the Otjikoto pit, N$52 million for mobile equipment purchases and rebuilds and $17 million to complete the national power grid connection line.
In the same quarter however, the Otjikoto, in which the Company holds a 90% interest, produced 35,068 ounces in the third quarter of 2022, lower than expected due to delays in bringing the Wolfshag Underground mine into production.
“Project delays were due to issues achieving development rates in prior periods, which have been addressed through the appointment of a new underground development contractor in April 2022. Development rates in the Wolfshag Underground mine have improved and are in line with budget, with access to initial development ore achieved in the third quarter of 2022 and stope ore production having commenced in the fourth quarter of 2022.
Mined ore tonnage and grade continue to reconcile well with Otjikoto’s resource model, with production anticipated to significantly increase in the fourth quarter of 2022 when mining reaches a higher-grade zone in the Otjikoto pit and with stope ore production from the Wolfshag Underground mine,” Clive Johnson, B2Gold’s President and Chief Executive Officer said. .
B2Gold further expressed that cash operating costs for the third quarter of 2022 were US$958 per gold ounce produced.
“Cash operating costs per ounce produced for the third quarter of 2022 were higher than expected as a result of lower production due to delays in accessing Wolfshag Underground production (which has commenced in the fourth quarter of 2022) and higher fuel costs partially offset by a weaker than expected Namibian dollar.
All-in sustaining costs for the third quarter of 2022 were US$1,625 per gold ounce sold. All-in sustaining costs for the third quarter of 2022 were higher than expected as a result of the higher cash operating costs described above and lower gold ounces sold, partially offset by lower sustaining capital expenditures and realized gains on the settlement of fuel derivatives. The lower sustaining capital expenditures are mainly a result of delays in underground development resulting in underground development costs being classified as non-sustaining instead of sustaining as budgeted,” explained Johnson.
The Otjikoto mine is expected to produce towards the lower end of its previously revised guidance range of between 165,000 and 175,000 ounces of gold in 2022 (original guidance range of 175,000 to 185,000 ounces). Overall and after factoring in the operating results for the first nine months of 2022, Otjikoto’s costs guidance ranges for full-year 2022 remain unchanged.
“For full-year 2022, cash operating costs are expected to be within the Company’s guidance range of between US$740 and US$780 per gold ounce and all-in sustaining costs are expected to be within its guidance range of between US$1,120 and US$1,160 per gold ounce,” Johnson further revealed.
Overall, the miner said that strong production is anticipated in the fourth quarter of 2022 at both operations. As a result, the Company re-affirms its total gold production guidance for 2022 of between 990,000 and 1,050,000 ounces of gold (including 40,000 and 50,000 attributable ounces projected from Calibre).
“The Company’s operations continue to be impacted by global cost inflation with fuel costs reflecting the most significant increases. However, despite these on-going cost pressures, drawdowns of existing inventories, proactive management and the revised sequencing of certain mining and capital costs, and gains realized from the Company’s fuel hedging program, the Company’s consolidated cash operating costs and all-in sustaining costs in the first nine months of 2022 were in line with budget.
“For full-year 2022, the Company expects to be at the upper end of its original total consolidated cash operating cost guidance range and within its original total consolidated all-in sustaining cost guidance range. The Company will continue to closely monitor the levels of cost inflation over the remainder of 2022. B2Gold’s projects and operations continue to target long-term cash flow and value at industry leading costs per ounce of gold produced,” said Johnson adding that the Company’s on-going strategy is to continue to maximize profitable production from its mines, further advance its pipeline of remaining development and exploration projects, evaluate new exploration, development and production opportunities and continue to pay an industry leading dividend yield.