B2Gold Reports 2016 Fourth Quarter and Full-Year Results

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Overig advies 16/03/2017 11:36
Vancouver, British Columbia--(Newsfile Corp. - March 16, 2017) - B2Gold Corp. (TSX: BTO) (NYSE MKT: BTG) (NSX: B2G) ("B2Gold" or the "Company") is pleased to announce its operational and financial results for the fourth quarter and year-end December 31, 2016. The Company previously released its gold production and gold revenue for the fourth quarter and full-year 2016, as well as its production and cash cost guidance for 2017 (see news release dated 02/05/17). All dollar figures are in United States dollars unless otherwise indicated.

2016 Fourth Quarter Highlights

•Consolidated gold production of 140,651 ounces, 7% (or 9,182 ounces) greater than the same period in 2015


•Consolidated gold revenue of $181.2 million on record sales of 151,524 ounces at an average price of $1,196 per ounce, an increase in revenue of 30% (or $42.2 million) over the same period in 2015


•Consolidated cash operating costs (see "Non-IFRS Measures") of $546 per ounce (Q4 2015 - $527 per ounce) and consolidated AISC (see "Non-IFRS Measures") of $877 per ounce (Q4 2015 - $807)


•Cash flow from operating activities of $82.3 million ($0.09 per share), an increase of $33.8 million (or 70%) compared with the fourth quarter of 2015


•Strong cash position of $144.7 million at year-end


•Fekola Project mine construction is 3 months ahead of schedule for an anticipated October 1, 2017 production start and remains on budget


•Subsequent to December 31, 2016, on March 14, 2017, the Company received a binding letter of commitment from the Canadian Imperial Bank of Commerce to participate in the Company's revolving credit facility, thereby increasing the aggregate amount of the facility from $350 million to $425 million


2016 Full-Year Highlights

•Record annual consolidated gold production of 550,423 ounces of gold, achieving revised production guidance (of 535,000 to 575,000 ounces) and surpassing initial guidance (of 510,000 to 550,000 ounces)


•Masbate Mine achieved record annual gold production of 206,224 ounces, 17% (or 30,421 ounces) higher than 2015


•Otjikoto Mine achieved record annual gold production of 166,285 ounces, 14% (or 20,562 ounces) higher than 2015


•Record annual consolidated gold revenue of $683.3 million on record sales of 548,281 ounces at an average price of $1,246 per ounce


•Consolidated cash operating costs an annual record low of $508 per ounce, at the low end of the Company's reduced cost guidance range (of between $500 and $535 per ounce) and well below initial guidance (of between $560 and $595 per ounce)


•Consolidated AISC of $794 per ounce, near the mid-point of the Company's reduced cost guidance range (of between $780 and $810 per ounce) and well below initial guidance (of between $895 and $925 per ounce)


•Cash flow from operating activities (including $120 million of proceeds received from Prepaid Sales transactions) an annual record of $411.8 million ($0.44 per share), an increase of $236.4 million (or 135%) compared with 2015


•Net income of $38.6 million ($0.04 earnings per share) and adjusted net income (see "Non-IFRS Measures") of $99.0 million ($0.11 adjusted earnings per share) for full-year 2016


•Signed a Euro 71.4 million Equipment Facility with Caterpillar Financial SARL for the Fekola Project


•Additional positive exploration drill results reported for the Company's Mali and Burkina Faso greenfield targets


•2017 outlook provides for forecast annual consolidated gold production of between 545,000 and 595,000 ounces (including estimated Fekola pre-commercial production of between 45,000 and 55,000 ounces) with expected higher forecast cash operating costs and AISC (as compared to 2016) of between $610 and $650 per ounce and between $940 and $970 per ounce, respectively


•2018 outlook provides for very strong production growth, with the planned first full-year of production from the Fekola Project, consolidated annual gold production is expected to increase significantly and be between 900,000 and 950,000 ounces (including estimated Fekola production of between 365,000 to 375,000 ounces) with cash operating costs and AISC expected to approximate the Company's 2016 revised cost guidance ranges (of $500 to $535 per ounce for cash operating costs and $780 to $810 per ounce for AISC)


2016 Full-Year and Fourth Quarter Operational Results

B2Gold achieved another record year of consolidated gold production in 2016 (for the eighth straight year) producing 550,423 ounces of gold, near the mid-point of its revised production guidance range (of 535,000 to 575,000 ounces) and surpassing its initial guidance range (of 510,000 to 550,000 ounces). Gold production for the year also increased by 12% (or 57,158 ounces) over 2015. The record performance in 2016 reflects the record performances from the Company's Masbate and Otjikoto mines, both setting new annual production records in 2016. The Company's La Libertad Mine also met its production guidance, with 2016 production near the high end of its production guidance range. In the fourth quarter of 2016, consolidated gold production was 140,651 ounces, an increase of 7% (or 9,182 ounces) over the same period last year.

For the full-year 2016, consolidated cash operating costs were an annual record low of $508 per ounce, at the low end of the Company's reduced cost guidance range (of between $500 and $535 per ounce) and well below initial guidance (of between $560 and $595 per ounce). Consolidated cash operating costs also decreased by $108 per ounce (or 18%) compared to the prior-year. This significant improvement reflects higher gold production, lower fuel prices/consumption, and ongoing cost optimization efforts. In the fourth quarter of 2016, consolidated cash operating costs were $546 per ounce (Q4 2015 - $527 per ounce).

Full-year consolidated all-in sustaining costs ("AISC") were $794 per ounce, near the mid-point of the Company's reduced cost guidance range (of between $780 and $810 per ounce) and well below initial guidance (of between $895 and $925 per ounce). Consolidated AISC also decreased by $153 per ounce (or 16%) compared to the prior-year. The lower consolidated AISC were primarily driven by the same factors impacting the reduction in cash operating costs per ounce as well as lower than budgeted capital expenditures at several mine sites due to the timing of pre-stripping and underground development activities and land purchases. In the fourth quarter of 2016, consolidated AISC were $877 per ounce (Q4 2015 - $807 per ounce).

2016 Full-Year and Fourth Quarter Financial Results

For the full-year 2016, consolidated gold revenue was a record $683.3 million on record sales of 548,281 ounces at an average price of $1,246 per ounce compared to $553.7 million (or $576.8 million including $23.1 million of pre-commercial sales from Otjikoto) on sales of 481,185 ounces (or 499,651 ounces including 18,466 ounces of pre-commercial sales from Otjikoto) at an average price of $1,151 per ounce in 2015. The 23% (or $129.6 million) increase in annual gold revenue was mainly attributable to a 14% increase in gold sales volume and a 8% increase in the average realized gold price. In the fourth quarter of 2016, consolidated gold revenue was $181.2 million on record sales of 151,524 ounces at an average price of $1,196 per ounce compared to $139 million on sales of 127,482 ounces at an average price of $1,090 per ounce in the fourth quarter of 2015.

For the full-year 2016, cash flow from operating activities was an annual record of $411.8 million ($0.44 per share) compared with $175.4 million ($0.19 per share) in 2015, an increase of $236.4 million (or 135%). This increase was mainly due to a $129.6 million increase in gold revenue, $120 million of proceeds received from the Prepaid Sales transactions (see "Liquidity and Capital Resources" section below) and a $23.9 million reduction in production costs which were partially offset by a $15.9 million increase in income tax expense and an $18.6 million negative change in non-cash working capital. In the fourth quarter of 2016, cash flow from operating activities was $82.3 million ($0.09 per share), an increase of $33.8 million (or 70%) compared with the fourth quarter of 2015.

Adjusted net income was $99.0 million ($0.11 adjusted earnings per share) for the year compared to $13.3 million ($0.01 earnings per share) in 2015. Adjusted net income in 2016 mainly excluded various unrealized mark-to-market adjustments (totaling a net loss of $24.0 million), non-cash mineral property write-offs of $15.0 million and non-cash share based payments of $13.7 million. In the fourth quarter of 2016, adjusted net income was $2.5 million ($0.00 per share) compared to $1.6 million ($0.00 per share) in the fourth quarter of 2015.

For the full-year 2016, the Company generated net income of $38.6 million ($0.04 per share) compared to a net loss of $145.1 million (negative $0.16 per share) in 2015. In the fourth quarter of 2016, the Company generated net income of $8.1 million ($0.01 per share) compared to a net loss of $115.1 million (negative $0.13 per share) in the fourth quarter of 2015. During the fourth quarter of 2015, the Company revised its long-term gold price assumption from $1,300 per ounce to $1,250 per ounce resulting in the Company recording non-cash net impairment charges totaling $86.7 million.

Liquidity and Capital Resources

As at December 31, 2016, the Company remained in a strong financial position with cash and cash equivalents of $144.7 million compared to cash and cash equivalents of $85.1 million at December 31, 2015. Working capital at December 31, 2016 was $101.0 million compared to working capital of $104.7 million at December 31, 2015. In addition, the Company has $150 million of undrawn capacity on its $350 million revolving credit facility ("RCF") and a Euro 71.4 million term Equipment Facility with Caterpillar Financial SARL. Subsequent to December 31, 2016, on March 14, 2017, the Company received a binding letter of commitment from the Canadian Imperial Bank of Commerce to participate in the Company's RCF, thereby increasing the aggregate amount of the facility from $350 million to $425 million. The Company believes that this liquidity coupled with continued strong operating cash flows from its existing mine operations, will provide adequate resources both to maintain operations and fund the construction of the Fekola Project through completion (forecast to be October 1, 2017) based on current assumptions, including current gold prices and life-of-mine plans.

On August 11, 2016, the Company entered into an equity distribution agreement (the "ATM Agreement") with two placement agents for the sale of common shares for aggregate gross proceeds of up to $100 million through "at the market" distributions under the Company's shelf prospectus and "at the market" prospectus supplement (the "ATM Offering"). The ATM Offering runs until the earlier of (i) shares with aggregate gross proceeds of $100 million have been issued, (ii) February 11, 2018, or (iii) termination by one of the parties in accordance with the ATM Agreement. The placement agents, collectively, receive a placement fee of 2% of the gross proceeds from each placement. During the year ended December 31, 2016, the Company issued 14.8 million shares for net proceeds for $44.2 million, under the ATM Offering.

In March 2016, the Company entered into a series of Prepaid Sales transactions totalling $120 million with its revolving credit facility bank syndicate. The Prepaid Sales transactions, in the form of metal sales forward contracts, allow the Company to deliver predetermined volumes of gold on agreed future delivery dates in exchange for upfront cash pre-payment. The Prepaid Sales transactions have a term of 33 months, which commenced in March 2016, and settlement will be in the form of physical deliveries of 103,266 ounces of unallocated gold from any of the Company's mines in 24 equal monthly installments during 2017 and 2018 (estimated to represent approximately 9% and 6%, respectively, of the forecast production in those years).

Outlook

The core activities of the Company remain its current mining operations and the construction of its Fekola Project. Based on Fekola's current mine construction progress, the Fekola Project is approximately three months ahead of schedule and is planning for an October 1, 2017 production start. In 2016, the Company approved an $18 million budget for the expansion of the Fekola mill from 4 million tonnes per year to 5 million tonnes per year which is expected to be brought on-line in the fourth quarter of 2017 in conjunction with the main plant commissioning. Fekola is expected to be another low-cost mine and should help enable the Company to significantly increase its production base while at the same time reduce its longer term forecast consolidated cash operating costs per gold ounce and all-in sustaining costs per gold ounce.

For 2017, B2Gold is projecting another growth year with consolidated gold production expected to be in the range of between 545,000 and 595,000 ounces (including estimated pre-commercial production from Fekola of between 45,000 and 55,000 ounces). Looking forward to 2018, with the planned first full-year of production from the Fekola Project (based on current assumptions and updates to the Company's long-term mine plans), the Company is projecting its consolidated gold production to increase significantly and be between 900,000 to 950,000 ounces.

For 2018, with the planned first full-year of production from the Fekola Project (based on current assumptions and updates to the Company's long-term mine plans), the Company's forecast consolidated cash operating costs per ounce and all-in sustaining costs per ounce are expected to decrease in 2018 (compared to 2017) and be comparable to the Company's 2016 revised cost guidance ranges (of $500 to $535 per ounce for cash operating costs and $780 to $810 per ounce for all-in sustaining costs).

In 2016, the Company put several new attractive funding measures in place, while minimizing equity dilution. In addition, higher realized gold prices and better operating cost performance from the Company's mines continue to significantly improve operating cash flows. The Company expects that the combination of the new funding measures and continued strong performance from operations will provide sufficient liquidity and resources to maintain operations and ensure that, based on current assumptions including the current gold price and life-of-mine plans, construction of the Fekola Project is fully funded through to completion (forecast to be October 1, 2017).

In addition to its development of Fekola, the Company continues to pursue its organic growth strategy. Sustainable organic growth also requires a continued focus on exploration, permitting and feasibility programs at the Company's existing projects. Exploration will also focus on drilling additional greenfield opportunities. The Company has a significant exploration budget for 2017 totaling $46 million. The most significant areas of exploration focus for the Company are in West Africa where the Company expects to complete initial resource estimates for its new Anaconda and Toega prospects.

With its existing growth profile, B2Gold remains one of the fastest growing gold producers in the world. The Company's objective is to continue growing as a profitable and responsible gold producer through ongoing exploration of its existing projects and accretive acquisitions, irrespective of the gold price.

For more information on B2Gold please visit the Company website at www.b2gold.com



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