Issue link: http://resourceworld.uberflip.com/i/882975
O C T O B E R / N O V E M B E R 2 0 1 7 www.resourceworld.com 11 ther's mining company is the transparency, fairness and respect. We think we're on the leading edge of becoming better at what the mining industry does. RW: What is your outlook on gold? CJ: It's nice to see some interesting gold prices but my short answer is that gold is cyclical. At the end of the day, we're not going to acquire a project dependent on gold going higher or exploration success. We can't control the gold price but we can control our growth. We're in the enviable position of not needing gold to go higher to be profitable and grow. If gold stays where it is, then according to many mining ana- lysts, they think that within the next year we will see a substantial re-rating in our share value due to the addition of Fekola production. Their target price for B2Gold averages around $5.20 a share. Today, we're trading at around $3.52 a share. If the gold price goes up, that's a bonus. We intend to continue to grow, as we have, regardless of the gold price. That's one of our funda- mental strategies. RW: Your latest financial results show consolidated cash operating costs were 11% below budget and all-in sustaining costs (AISC) were 16% below budget. How was this accomplished? CJ: Higher production for Q2 compared to budget was due to higher production at Masbate and Otjikoto. Consolidated cash operating costs were positively impacted by the strong performance of Otjikoto and Masbate which more than offset any underperformance in Nicaragua. The higher production at Masbate exceeded budget due to better than expected throughput and recoveries mainly driven by higher than budgeted oxide ore. For Otjikoto, the increase over bud- get was mainly the result of better than expected grade and tonnage from the new Wolfshag Phase 1 Pit and higher than expected mill throughput. Production costs were less than budget due to lower fuel and reagent prices. The AISC benefitted from improved cash operating costs and from the timing of lower than budgeted sustaining capital expenditures at several mine sites in Q2 which are expected to be incurred later in the year. Overall, the company's 2017 guidance for consolidated cash operating costs of between $610 and $650 per ounce and consolidated AISC of between $940 and $970 per ounce remains unchanged. RW: At El Limon Mine, the First Half AISC costs increased from $1,124 (FH 2016) to $1,727/oz (FH 2017) year-over- year. Why did this occur? CJ: This increase is due to lower pro- duction than budgeted in Q2. El Limon's production was negatively affected by water control issues which reduced high-grade ore flow from Santa Pancha underground. As a result, mill feed was supplemented with lower grade ore from surface. At the end of Q2, improved con- trol of underground water was achieved, now enabling the development of the lower levels of Santa Pancha 1 to proceed. Although production is expected to return to more normal levels by the Q4 2017 and beyond, the shortfall to date is not expected to be fully recovered in the sec- ond-half of the year. As a result, El Limon's production guidance has been revised lower and for the full-year 2017, El Limon is forecast to produce 40,000 to 50,000 ounces. First half 2017 consolidated cash oper- ating costs were $596/oz, or $81/oz (12%) below budget. The company's 2017 con- solidated production and cost guidelines remain unchanged. n PRODUCING GOLD MINES MINE 2017 FH PROD. (oz) AISC ($/oz) Masbate 102,492 838 La Libertad 51,154 965 El Limon 16,601 1,727 Otjikoto 83,937 721 Consolidated 254,184 929