B2Gold shares positive El Limon expansion study results

The expansion study was conducted to evaluate the life-of-mine (LoM) options for combining the remaining underground Inferred Mineral Resources with the new El Limon Central zone opencast Inferred Mineral Resource. The results of this study recommend the expansion of the existing plant from 485 000 tpy to 600 000 tpy and addition of a third stage of milling to achieve a fine grind. The result would be a much longer mine life with significantly higher gold production and lower cash operating costs (see non-IFRS measures) and all-in sustaining costs (AISC) (see non-IFRS measures). The third stage of milling also allows for the reprocessing of old tailings at the end of the mine life.

Project size trade-off studies

El Limon expansion study was evaluated at throughput rates ranging from 500 000 tpy - 1 100 000 tpy. Metallurgical test results indicate that the existing plant could be expanded to a production level of 600 000 tpy by upgrading the crushing system, adding a pebble crusher, adding a new thickener, and upgrading the cyclones and leach circuit. Expansion to 1 100 000 tpy would require an upgrade of the existing plant as well as the construction of a new 500 000 tpy plant. 

Metallurgical testing was also completed to evaluate the optimum grind size for both El Limon Central ore and the Santa Pancha underground ore sources. Results indicate that there would be a significant improvement in recovery for El Limon central pit ore and also an improvement for the Santa Pancha recoveries at finer grind sizes (80% passing 30 microns). The finer grind would be achieved by adding a third stage of grinding to the milling circuit. The fine grind capability would also allow for the retreatment of old tailings at the end of the mine life with only minor plant modifications. High level production scenarios, capital cost estimates and operating cost estimates were developed for various cases ranging from 500 000 tpy to 1 100 000 tpy with both coarse and fine grinding. 

 

According to the study, the 600 000 tpy fine grind case with the processing of old tailings (600FwT) would result in the best current project economics. The significant additional capital costs associated with building a second new plant for the 1 million + tpy cases are not justifiable based on the existing Inferred Mineral Resource. However, these cases may become viable as future further expansion opportunities if the

The mineral resource is expanded by further positive drilling results. El Limon Central zone mineralisation continues to be extended to the north by drilling, and remains open to the north and at depth.

The 600FwT expansion would consist of upgrading the crushing system, installing a pebble crusher in the SAG mill circuit, adding a third stage of grinding, replacing the pre-leach thickener, adding power generating capacity and making improvements to the gold recovery circuits. The initial capital cost estimates for these improvements would be approximately US$35 million. It has been assumed that open-pit mining will be done by contract mining using established contactors. The study assumes the processing of old tailings will begin after the underground and opencast resources have been depleted.

Basis of the study

In February 2018, the company announced a positive initial open-pit Inferred Mineral Resource at the newly-discovered El Limon Central zone at El Limon property in Nicaragua of 5 130 000 t at a grade of 4.92 g/t of gold containing 812 000 oz of gold. This resource has provided the opencast resources for the expansion study. Total Inferred Mineral Resources from underground and open-pit sources included in this study consist of approximately 6.0 million t at a grade of 4.3 g/t, containing approximately 829 000 oz. Mineral Resources that are not Mineral Reserves do not have demonstrated economic viability. 

A consistent mix of underground and opencast ore feeding the plant has always provided the optimum operating conditions for El Limon mine, and the new Mineral Resources at El Limon Central zone will provide long term, opencast feed to blend with the underground ore. Approximately 60% of the plant feed is planned to come from open pits which have an overall strip ratio in the range of 16 t of waste to 1 t of mill feed. At the end of the mine life, plant feed is expected to come from the old tailings at a rate of 600 000 tpy.  

Processing of historic tailings is based on an Indicated Mineral Resource estimate containing 7.3 million t of historic tailings at average grades of 1.12 g/t gold and 4.17 g/t silver, containing approximately 263 000 oz of gold and 982 000 oz of silver. Of that resource, approximately 6.9 million t was included in the study at gold and silver grades of 1.15 g/t and 4.11 g/t respectively, containing approximately 255 000 oz of gold and 916 000 oz of silver. Annual production rates during the processing of the tailings from historic high-grade mining are estimated to average over 18 000 oz of gold and 64 000 oz of silver. Cash operating costs per ounce and AISC per ounce for the processing of the old tailings are forecast to be slightly lower compared to processing the opencast and underground ore resources. 

Upside potential

Positive drilling results continue to expand El Limon Central zone to the north, indicating the potential to expand the Mineral Resources. The zone is also open to depth, indicating the potential to produce ore from underground in El Limon Central area once opencast mining is completed.

B2Gold's technical team is currently updating El Limon Inferred Mineral Resource to include recent additional drilling results and conducting mine optimisation studies with a view to potentially improve the positive economics for El Limon expansion. These studies are expected to be completed in 1Q19.    

 

Renewed collective agreement

Yesterday, representatives of B2Gold Management and the Labour Unions at El Limon mine renewed the existing collective agreement for two years. The renewal ensures the continuance of stable labour relations and coincides with the positive news regarding the long-term prospects of El Limon mine.

Read the article online at: https://www.globalminingreview.com/exploration-development/23102018/b2gold-shares-positive-el-limon-expansion-study-results/