- Achieves Record 2015 Gold Production and Beats 2015 Cost Guidance, Resulting in Record Operating Cash Flows
- Announces Financing Arrangements to Fully Fund the Fekola Mine Construction on March 15, 2016
VANCOUVER, BRITISH COLUMBIA--(Marketwired - March 16, 2016) - B2Gold Corp. (TSX:BTO)(NYSE MKT:BTG)(NAMIBIAN:B2G) ("B2Gold" or the "Company") reports its operational and financial results for the fourth quarter and year-end December 31, 2015. The Company previously released its gold production and revenue for the fourth quarter of 2015 (see news release dated 01/14/16). All dollar figures are in United States dollars unless otherwise indicated.
2015 Fourth Quarter Highlights
Record quarterly consolidated gold production of 131,469 ounces, 18% greater than in the same period in 2014
Gold revenue of $139 million on record sales of 127,482 ounces at an average price of $1,090 per ounce
Consolidated cash operating costs of $527 per ounce, $119 per ounce (18%) lower compared with the fourth quarter of 2014
All-in sustaining costs of $807 per ounce, $139 per ounce (15%) lower than in the same period last year
Cash flow from operating activities of $48.5 million ($0.05 per share), an increase of $7.4 million (18%) compared with the fourth quarter of 2014
Subsequent to December 31, 2015, the Company received approvals for gold prepaid sales financing arrangements of up to $120 million and signed a commitment letter for a Euro equivalent $80.9 million Fekola Mining Equipment Loan Facility to fully fund the Fekola Mine Construction (based on current assumptions)
2016 outlook provides for forecast annual consolidated gold production of between 510,000 to 550,000 ounces, forecast cash operating costs of between $560 to $595 per ounce and forecast all-in sustaining costs of between $895 and $925 per ounce
2015 Full-Year Highlights
Record annual consolidated gold production for the seventh straight year of 493,265 ounces (including 18,815 ounces of pre-commercial production from Otjikoto) in 2015, an increase of 26% over 2014
Record annual consolidated gold revenue of $553.7 million (or consolidated gold revenue of $576.8 million including $23.1 million of pre-commercial sales from Otjikoto)
Record annual gold sales of 481,185 ounces (or 499,651 ounces including 18,466 ounces of pre-commercial sales from Otjikoto)
Consolidated cash operating costs of $616 per ounce, below the lower-end of the Company's 2015 guidance (of $630 to $660 per ounce), and $64 per ounce (9%) lower than in 2014
All-in sustaining costs of $947 per ounce, below the lower-end of the Company's 2015 guidance (of $950 to $1,025 per ounce), and $154 per ounce (14%) lower than in 2014
Record cash flow from operating activities of $175.4 million ($0.19 per share), an increase of $58.2 million (50%) compared with 2014
Successful transition from construction to commercial production at the new Otjikoto Mine
Otjikoto mill expansion from 2.5 million tonnes per year to 3.0 million tonnes per year completed on time and budget in September
New $350 million corporate revolving credit facility finalized
Robust results from the new optimized feasibility study for the Fekola Project in Mali announced on June 11, 2015
Early works construction activities at Fekola Project commenced in February 2015; mine construction commenced in the fourth quarter of 2015 and remains on budget and schedule
2015 Fourth Quarter and Full-Year Operational Results
B2Gold achieved another record year of consolidated gold production in 2015 (for the seventh straight year) producing 493,265 ounces of gold (including 18,815 ounces of pre-commercial production from Otjikoto), an increase of 26% compared to 2014, but slightly below (1%) the lower-end of the Company's 2015 production guidance range. The significant increase in annual gold production over 2014 was attributable to the successful production start and strong ramp-up in production at the new Otjikoto Mine in Namibia. On February 28, 2015, the Otjikoto Mine achieved commercial production, one month ahead of schedule, after a strong start-up following its first gold pour on December 11, 2014. Consolidated gold production was slightly below (1%) the Company's 2015 full-year guidance range as production from La Libertad Mine continued to be affected by permitting/resettlement delays at its new higher grade Jabali Antenna Pit. In addition, Limon's gold production was also impacted by an illegal blockade from September 28, 2015 to October 18, 2015 and by several operational issues encountered upon resumption of operations later in the fourth quarter of 2015. In the fourth quarter of 2015, consolidated gold production was also another quarterly record of 131,469 ounces, representing an increase of 18% over the same period last year.
For the full-year 2015, the Company's per ounce consolidated cash operating costs and all-in sustaining costs were both below the lower-end of the Company's 2015 guidance range and also significantly lower than in the prior-year. Consolidated cash operating costs were $616 per ounce in 2015, below guidance (of $630 to $660 per ounce) and $64 per ounce (9%) lower than in 2014. All-in sustaining costs were $947 per ounce in 2015, below guidance (of $950 to $1,025 per ounce) and $154 per ounce (14%) lower than in 2014. The favourable variances against both budgeted and prior-year costs reflect the inclusion of new gold production from the low-cost Otjikoto Mine, including the benefit of a weakening Namibian dollar/US dollar exchange rate, lower fuel and energy costs across all operations and continued efforts to enhance productivity and cost efficiencies. In the fourth quarter of 2015, consolidated cash operating costs and all-in sustaining costs were $527 per ounce and $807 per ounce, respectively, a decrease of $119 per ounce (18%) and $139 per ounce (15%), respectively, compared to the same period last year.
For 2016, consolidated gold production at B2Gold is expected to increase to between 510,000 and 550,000 ounces, compared to 493,265 ounces produced in 2015. The expected higher production relates mainly to increased throughput at the Otjikoto Mine, following the completion of its mill expansion project in September 2015. Gold production in 2016 is anticipated to be slightly weighted towards the second-half of the year (53%).
Consolidated cash operating costs are projected to further decrease in 2016 and be in the range of $560 to $595 per ounce. The favourable reduction reflects the positive impact of greater production from the low-cost Otjikoto Mine, including the benefit of an anticipated weaker Namibian dollar, lower projected fuel and energy costs across all operations, and continued efforts to enhance productivity and cost efficiencies. The Company's consolidated all-in sustaining costs are also expected to be lower and be in the range of $895 and $925 per ounce. Due to the anticipated timing of budgeted capital expenditures, all-in sustaining costs are expected to be higher in the first half of 2016 than in the second-half.
2015 Fourth Quarter and Full-Year Financial Results
For the full-year 2015, consolidated gold revenue was a record $553.7 million (or $576.8 million including $23.1 million of pre-commercial sales from Otjikoto) on record year-to-date 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 compared to $486.6 million on sales of 386,219 ounces at an average price of $1,260 per ounce in the prior-year. The 14% increase in annual gold revenue was mainly attributable to a 25% increase in gold sales volume, partially offset by a 9% decline in the average realized gold price. In the fourth quarter of 2015, consolidated gold revenue was $139 million on record sales of 127,482 ounces at an average price of $1,090 per ounce compared to $122.4 million on sales of 102,612 ounces at an average price of $1,193 per ounce in the fourth quarter of 2014.
Cash flow from operating activities was a record $175.4 million ($0.19 per share) for the year, an increase of $58.2 million (50%) over 2014, despite lower realized gold prices. The increase was mainly attributable to higher gold sales following the commencement of commercial production at the Otjikoto Mine, positive working capital changes of $10.5 million and a reduction in VAT costs of $6.4 million. In the fourth quarter of 2015, cash flow from operating activities increased to $48.5 million ($0.05 per share) compared with $41.1 million ($0.04 per share) in the fourth quarter of 2014.
For the full-year 2015, adjusted net income was $13.3 million ($0.01 per share) compared with $6.7 million ($0.01 per share) in 2014. In the fourth quarter of 2015, adjusted net income was $1.6 million ($0.00 per share) compared to an adjusted net loss of $8.4 million (negative $0.01 per share) in the prior-year quarter.
For the full-year 2015, reported net loss was $145.1 million (negative $0.16 per share) compared with a loss of $666.4 million (negative $0.90 per share) in 2014. In the fourth quarter of 2015, reported net loss was $115.1 million (negative $0.13 per share) compared with a loss of $356.8 million (negative $0.39 per share) in the fourth quarter of 2014. 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 (pre-tax $108 million less $21.3 million of deferred income tax recoveries). The non-cash pre-tax impairment charges consisted mainly of a La Libertad Mine long-lived assets impairment charge of $48.9 million, an El Limon Mine long-lived assets impairment charge of $22.9 million and an investment in the Gramalote joint venture impairment charge of $36.2 million. In addition, during the year ended December 31, 2015, the Company wrote-off a total of $16.1 million of mineral property costs, of which $8 million was written off in the fourth quarter of 2015 that related to its Masbate undeveloped mineral interests based on drilling and exploration results.
Liquidity and Capital Resources
At December 31, 2015, the Company remained in a strong financial position with cash and cash equivalents of $85.1 million and working capital of $104.7 million.
For the three and twelve months ended December 31, 2015, resource property expenditures totaled $91.2 million and $285.8 million, respectively, with the most significant components being the Fekola Project with expenditures of $52.1 million and $129.3 million, respectively, the Masbate Mine with capital expenditures of $9.8 million and $37.7 million, respectively, and the Otjikoto Mine with net capital expenditures of $7 million and $34.8 million, respectively.
On May 20, 2015, as amended March 11, 2016, the Company signed a credit agreement with a syndicate of international banks for a new Revolving Credit Facility (the "New RCF") for an aggregate amount of $350 million. The New RCF also allows for an accordion feature whereby upon receipt of additional binding commitments, the facility may be increased to $450 million any time prior to the maturity date. On June 11, 2015, the Company drew down $150 million under the New RCF. The amount drawn was used to repay the cumulative amount drawn under the Company's previous revolving credit facility. During the second half of 2015, the Company drew down an additional $75 million under the New RCF leaving an undrawn balance of $125 million at December 31, 2015.
Subsequent to December 31, 2015, on March 14, 2016, the Company received approvals for Gold Prepaid Sales Financing Arrangements of up to $120 million from its New RCF Bank Syndicate, which was led by HSBC Bank USA, N.A. and included the Bank of Nova Scotia, Société Générale and ING Bank N.V. The Prepaid Sales, in the form of metal sales forward contracts, allow the Company to deliver pre-determined volumes of gold on agreed future delivery dates in exchange for an upfront cash prepayment ("Prepaid Amount"). Initial Prepaid Sales contracts have been entered into for the delivery of approximately 43,100 ounces of gold in each of 2017 and 2018, for total cash Prepaid Amount proceeds of $100 million. The ounces to be delivered represent approximately 7% and 5% of forecast consolidated gold production in 2017 and 2018 respectively. Proceeds from the Prepaid Sales will be used for the construction of the Company's Fekola Project in Mali. The Company expects to enter into additional Prepaid Sales Arrangements totaling $20 million. The Company believes that with the receipt of cumulative cash Prepaid Sales funds of $120 million, closing of the $80.9 million Fekola Equipment Facility discussed below, and based on current assumptions, that the construction of the Fekola Project is fully funded and remains on schedule to commence gold production in late 2017. In addition to this funding, the Company also intends to fill the accordion feature of the New RCF later in 2016, to provide additional liquidity resources.
Subsequent to December 31, 2015, on March 14, 2016, the Company signed a commitment letter to enter into a Euro equivalent of $80.9 million term Equipment Facility with Caterpillar Financial SARL, as Mandated Lead Arranger, and Caterpillar Financial Services Corporation, as original lender. The aggregate principal amount is to be made available to the Company's majority-owned subsidiary, Fekola S.A. to finance or refinance the mining fleet and other mining equipment at the Company's Fekola Project in Mali. Completion and funding under the facility are subject to normal conditions precedent, including the preparation and execution of definitive documentation, due diligence and receipt of any necessary regulatory approvals.
Subsequent to December 31, 2015, the Otjikoto Equipment Loan Facility, entered into on December 4, 2013 between B2Gold Namibia Minerals (Proprietary) Limited ("B2Gold Namibia"), a subsidiary of The Company, and Caterpillar Financial SARL as Mandated Lead Arranger, and Caterpillar Financial Services Corporation, as original lender, was increased by $4.5 million to $45.4 million. This will allow B2Gold Namibia to finance or refinance 2016 mining fleet and equipment at the Company's Otjikoto Mine in Namibia. Completion and funding under the facility are subject to conditions precedent, including the preparation and execution of definitive documentation and due diligence.

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