B2Gold Corp. has shared its gold production and gold revenue for the fourth quarter and full-year 2017 in addition to its production and cash cost guidance for 2018.
2017 Operating Results
2017 was an outstanding year of performance for B2Gold, with the achievement of another record year of consolidated gold production (for the ninth straight year), and the successful construction and commissioning of its flagship Fekola Mine in southwest Mali which achieved commercial production on 30 November 2017, one month ahead of the revised schedule and four months ahead of the original schedule. With the large, low-cost Fekola Mine now in production, B2Gold is well positioned in achieving transformational growth in 2018. In 2018, with the planned first full year of production from the Fekola Mine, consolidated gold production is forecast to be between 910 000 oz and 950 000 oz. This represents an increase in annual consolidated gold production of approximately 300 000 ounces for B2Gold in 2018 versus 2017.For the full year of 2017, B2Gold's consolidated gold production was an annual record of 630 565 oz (including 79 243 oz of pre-commercial production from Fekola), exceeding the upper end of its revised guidance range (of 580 000 oz – 625 000 oz) and surpassing the top end of its original guidance range (of 545 000 oz – 595 000 oz). Consolidated gold production for the year also increased by 15% over 2016.
B2Gold's record performance in 2017 reflected the early start-up and strong ramp-up performance of the new Fekola Mine and the continued, strong operational performances of both the Masbate Mine in the Philippines and Otjikoto Mine in Namibia.
The company expects its full-year 2017 consolidated cash operating costs per ounce and AISC per ounce to be at, or below, the low end of their cost guidance ranges of US$610 – US$650/oz and US$940 – US$970/oz, respectively.
B2Gold will release its 2017 year-end consolidated financial statements before the North American markets open on 15 March 2018. Details of the consolidated cash operating costs per ounce and AISC per ounce will also be released at that time.
In the fourth quarter of 2017, B2Gold's consolidated gold production was a quarterly record of 240 753 oz (including 72 903 ounces of pre-commercial production from Fekola), exceeding reforecast production by 5% and significantly exceeding budget by 28%. Consolidated gold production for the quarter also increased by 71% (or 100 102 oz) over the same quarter in 2016.
For 2017, consolidated gold revenue was US$638.7 million on sales of 510 966 oz at an average price of US$1250/oz compared to US$683.3 million on sales of 548 281 oz at an average price of US$1246/oz in 2016. The decrease in annual gold revenue (excluding pre-commercial sales from Fekola) was attributable to a 7% decrease in gold sales volume due to the timing of gold shipments.
Consolidated gold revenue in 4Q17 was US$174.0 million on sales of 137 695 oz at an average price of US$1264/oz compared to US$181.2 million on sales of 151 524 oz at an average price of US$1196/oz in the fourth quarter of 2016.
Consolidated gold revenue for the fourth quarter and year ended 31 December 2017, included US$15 million and US$60 million, respectively, relating to the delivery of gold into the company's Prepaid Sales contracts (deferred revenue) associated with the company's Prepaid Sales transactions entered into in March 2016.
2018 Production Outlook and Cost Guidance
In 2018, with the planned first full year of production from the Fekola Mine, consolidated gold production is forecast to be between 910 000 oz and 950 000 oz. This represents an increase in annual consolidated gold production of approximately 300,000 oz for B2Gold in 2018 versus 2017. The Fekola Mine is projected to be a large, low-cost producer that will also result in a significant reduction in the company's forecast cash operating costs per ounce and AISC per ounce. The company's forecast consolidated cash operating costs per ounce and AISC per ounce are both expected to decrease in 2018 by approximately 15% compared to 2017 and be between US$505 – US$550/oz and US$780 – US$830/oz, respectively.
These increased production levels and low costs are expected to dramatically increase B2Gold's production, revenues, cash from operations and cash flow for many years, based on current assumptions (including a gold price assumption of $1300 per ounce). On average over the next three years, beginning in 2018, the company is projecting per annum gold sales revenues of approximately US$1.2 billion, cash flow from operations of approximately US$0.5 billion and a significant increase in free cash flow.