Canada’s B2Gold Corp has announced very positive results from the Expansion Study Preliminary Economic Assessment (PEA) for its Fekola mine in Mali and says it is proceeding with the expansion project, which will see processing throughput increased by 1,5 Mt/a.
The Expansion Study PEA was conducted to evaluate the life-of-mine (LoM) options for expanded mining and processing to maximise the value of the substantially increased indicated and inferred mineral resource at the Fekola mine, announced in October last year.
The Fekola processing plant.
The study recommends an expansion of the existing plant to process an additional 1,5 Mt/a, resulting in a baseline capacity of 7,5 Mt/a without requiring an additional ball mill or additional power generation capacity. Based on the new optimised mine plan, the mining rate at Fekola will also be increased, along with additional mining equipment to accelerate the supply of higher-grade ore to the expanded processing facilities.
As a result of the project and mineral resource expansion, Fekola will – says B2Gold – produce more gold over a longer life, with more robust economics and higher average annual gold production, revenues and cash flows, than the previous LoM.
Assuming an effective date of 1 January 2019, a gold price of US$1 300/oz and a discount rate of 5 %, highlights from the Expansion Study PEA include an estimated optimised LoM through to 2030. The project will result in an increase in average annual gold production to over 550 000 ounces per year during the five-year period 2020-2024 and over 400 000 ounces per year over the LoM (2019-2030).
The forecast LoM pre-tax net cash flow is estimated at approximately US$2,8 billion while the forecast LoM pre-tax net present value is over US$2,2 billion.
Revised projected LoM cash operating cash costs and all-in-sustaining-costs (AISC) remain low at below US$500 and US$700 per ounce respectively, despite mining a larger open pit at slightly lower gold grade. This is due to economies of scale arising from increased mining and processing rates and the new optimised mining schedule.
The capital cost of the plant expansion is estimated at approximately US$50 million over a period of approximately 18 months. Half of this capital is expected to be spent in 2019 with the remaining half in 2020. It is anticipated that this will be financed from existing Fekola mine cash flows.
The projected annual mining rate will increase to a baseline of approximately 54 Mt/a and will subsequently be stepped up to approximately 76 Mt/a to support the increased processing and stockpiling necessary to maintain plant feed grade.
Staged mining fleet additions totalling approximately US$56 million over the LoM are expected to be equipment loans/lease financed over respective five-year periods, on terms similar to the existing Fekola fleet loan/lease terms.
The current mining fleet consists of four Caterpillar 6020B excavators with haul trucks, drills, and support equipment to match, and mines an average of 36 Mt/a. Increased production will be achieved with the addition of two to four excavators with corresponding trucks, drills and support equipment. Large front-end loaders would also be included to maintain fleet flexibility.
During the expansion study, other upside opportunities were identified and are currently under review. These will be incorporated into an updated Fekola LoM plan when related studies are complete and if they show an increase in overall project value. Upside opportunities identified to date include renewable energy (focused on a solar plant), alternative tailings storage (co-disposal, paste, dry stack and others), waste mining (various fleet options vs in-pit crushing and conveying) and the potential incorporation of material from the nearby Anaconda mineral resource.