Otjikoto gold mine on schedule
International mid-tier gold company B2 Gold has announced that construction of its Otjikoto Gold Mine near Otavi is on schedule and on budget.
Construction of the mine started in January this year and will continue into the fourth quarter of 2014. It is anticipated that gold will be produced during the fourth quarter of 2014 with a ramp up to full production in early 2015. Average annual production is estimated at 141,000 ounces of gold per year for the first five years at an average operating cash cost of US$524 per ounce.
Upon completion, the mine will become the country’s second gold mine after AngloGold Ashanti’s Navachab mine which was recently put up for sale.
Last week Wednesday, B2Gold said that bush clearing at the Otjikoto site had been completed and all necessary internal roads had been roughed in, adding that all mining equipment for the initial stages of mine development had arrived on site and mining had commenced.
“More than 95% of the topsoil has been removed from the tailings basin and liner installation will commence in the third quarter of 2013. The man-camp (capable of housing up to 600 people) is nearing completion and is expected to be commissioned in the third quarter,” the company said.
B2Gold Namibia currently employs more than 150 people, but the number is expected to increase to more than 600 later this year.
In April the company announced the closing of a new senior secured revolving credit facility with a syndicate of banks. The Senior Credit Facility, which comprises three tranches of US$50 million each for a total of US$150 million, replaced the previous US$25 million revolving credit facility with Macquarie Bank Limited.
The credit facility is being used to fund construction and development costs related to the Otjikoto Project and for general corporate purposes. Figures for the first half of the year shows that pre-production expenditure stood at about US$65.8 million, including mobile equipment purchases of US$22.9 million.
The 2013 construction and development budget for the Otjikoto project is estimated at around US$134.4 million while total pre-production capital costs are estimated to be US$244.2 million excluding finance lease equipment purchases and pre-production stripping costs.
A further US$7 million has been budgeted in 2013 for exploration to fund 24,145 metres of infill and regional exploration drilling. The company’s geology team believes there is significant potential for further exploration at the current project which could lead to the expansion of through-put capacity and increase annual average gold production.
The Otjikoto gold project is 92% owned by B2Gold, a Vancouver based company, and 8 % by EVI Gold (Pty) Ltd, a Namibian black empowerment group. B2Gold is listed on the Namibia Stock exchange and on the Toronto Stock Exchange.