As B2Gold Corp (TSE: BTO) puts the finishing touches on its mining project in Nunavut’s Back River Gold District, the company now expects to incur about 23 per cent more expenses than previously estimated.
The international gold producer revealed this week that the Goose project will cost C$290 million more than anticipated. Remaining construction and mine development combined with sustaining costs are estimated to total just over C$1.5 billion.
Primary causes of the rising expenditures include a one-quarter delay in getting the site into production mode and increased shipping costs associated with materials needed for the project.
The site’s first gold pour is scheduled for Q2 next year while commercial production is expected to commence in the third quarter of 2025. Goose will then produce about 310,000 gold ounces for its initial five years. Despite increased costs, many analysts have predicted that the spot price of gold will continue rising to historic heights in the new year.
Goose to become territory’s third major gold asset
Gold mining in Nunavut is a relatively new trend. Significant exploration activity in the territory was non-existent until the 1980s and the region’s first major gold operation didn’t open until 2010. The Meadowbank Gold Mine run by Agnico Eagle Mines Ltd (Ontario) (TSE: AEM) was operational for nine years. Production ceased in 2019.
Now, Agnico Eagle runs Nunavut’s only two producing gold mines: the Amaruq and Meliadine operations. Once Goose enters production it will become the third. Amaruq churned out over 431,000 ounces last year while Meliadine produced over 364,000.
Amaruq sits 50 kilometres from the former Meadowbank mine. However, because Meadowbank’s mill is still functioning and receiving ore from Amaruq, Agnico says the broader Meadowbank Complex’s life has been extended until 2028.
B2Gold $BTO.TO having its 13th best day in 9 years time. Start of the New Bull? pic.twitter.com/SfeUUvg6gG
— GoldDiscovery.com (@GoldDiscovery1) September 12, 2024
Read more: Calibre Mining strikes gold: new high-grade discovery at Nicaragua’s Limon Mine
Read more: Calibre Mining shows analysts the ropes at the Valentine gold project
B2Gold downsizes Calibre stake significantly
A sale of 79 million shares valued at C$139 million was completed by B2Gold in June, thereby reducing the company’s stake in Calibre Mining Corp (TSE: CXB) (OTCMKTS: CXBMF) from 14.1 per cent to about 4 per cent. B2Gold previously held approximately 111 million shares.
This was part of a series of financial optimization measures recently completed by the company. Through reducing its stake below 10 per cent, B2Gold is no longer considered a reporting insider for Calibre and has thereby reduced its shareholder responsibilities.
This has helped enable B2Gold to hone its focus on other assets like Goose.
However, B2Gold remains a supportive Calibre shareholder. In recent years, Calibre has benefitted immensely from the Nicaraguan assets it acquired from B2Gold in 2019.
Calibre just identified a promising new gold target at the Central American nation’s Limon Mine Complex. One recent core assay from the San Jose discovery returned 13.26 grams per tonne gold over 4.9 metres.
Calibre Mining is a sponsor of Mugglehead news coverage
rowan@mugglehead.com
