B2Gold Corp. (TSX: BTO) (NYSE AMERICAN: BTG) has updated the budget and construction plan for its project in Nunavut and plans to accelerate underground development at the remote northern site.
The company announced Friday that it expects to have the Goose Project’s mill completed by 2025 and that its enhanced focus on underground mining is intended to increase gold production from the operation to 300,000 ounces annually in the first five years following its acquisition in April.
B2Gold has estimated an initial $800 million budget for the Back River Gold District project intended to help construct a reliable low-cost mining operation and an additional $90 million that will be allocated to its underground development.
Currently, generators are being installed at Goose, the camp is being constructed and construction workshops are being built there as well. Steel, concrete and other consumables were successfully brought in on the ice road this year and staged at the site.
The company says the successful completion of the project’s winter ice road this year has de-risked the development of future ice roads.
Mining is currently underway in the Echo open pit which B2Gold says will be mined out prior to process commissioning to offer tailings storage capacity. Underground mining at Goose has exceeded 1,500 metres of horizontal development and the initial ventilation raise is expected to reach the surface in the near future.
The project’s development is being led by Kieran Loughran, B2Gold’s General Manager of Plant & Infrastructure Construction in Africa. Loughran successfully led the construction of Namibia’s Otjikoto mine, Mali’s Fekola mine, the Julietta and Kupol mining operations in Russia and Nicaragua’s La Libertad mine acquired by Calibre Mining (TSX: CXB) (OTCQX: CXBMF) in 2019 — a company that B2Gold has a 25 per cent stake in.
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B2Gold says the crown pillar zone at Goose contains more than 150,000 ounces of gold, which will be a primary initial focus during the early development of the project.
The company will be purchasing and storing an increasing amount of diesel fuel to prepare for the operational requirements at Goose in 2025 along with other inventory and consumables to avoid the need for frequent air transport of those goods.
Following the acquisition of Sabina Gold & Silver in April, B2Gold has been actively integrating its in-house construction team with Sabina’s team. They have also reevaluated the external contractors involved in the Goose Project.
By combining these teams and leveraging their prior experience, B2Gold anticipates cost savings and improved outcomes by transitioning from a fixed-priced engineering, procurement and construction contract to an owner-operated construction model for the process plant.
This shift is expected to result in a mill that is more readily available and requires less sustaining capital. An owner-operated approach offers flexibility in construction and the ability to adjust construction activities accordingly.
B2Gold’s in-house purchasing team has identified significant cost reductions by purchasing specific mobile equipment instead of utilizing the “lease to own” purchase model utilized by Sabina. They have also negotiated lower prices for certain consumables required for project construction and commissioning. These measures all contribute to overall savings for the company.
Core shack at the Goose Project. Photo via B2Gold
B2Gold has identified several design changes to enhance the construction phase and maximize the long-term value of the Goose Project. These changes include the addition of an emulsion explosives plant, an expanded mining support fleet, increased power generation capacity and improved site power distribution.
Additionally, the project will incorporate secondary steel structures, platforms, grating and handrails to meet safety requirements. Information technology and enterprise resource planning systems will be improved, along with an upgraded on-site assay lab. Additional fuel tanks will be installed at Goose to provide extended on-site operating reserves and support potential future expansions.
B2Gold has considered current market pricing to estimate the costs of various consumables required during the construction phase, with a focus on diesel and other fuels. These pricing considerations aim to ensure accurate cost projections and effective management of resources.
By implementing these design changes and considering market pricing for consumables, B2Gold aims to mitigate risks, optimize construction operations, and maximize the overall value of the Goose Project.
The company’s community liaison officer for the Back River Gold District was recently interviewed.
For #NIHM2023, John Kaiyogana, Community Liaison Officer for B2Gold's Back River Gold District in Nunavut, shares with us his personal perspectives and experiences regarding Inuit identity, culture and community. Read the full interview here: https://t.co/QR613RI5tH pic.twitter.com/VphGkc46xN
— Back River Project (@B2G_BackRiver) June 23, 2023
Other gold mining companies in Nunavut include Fury Gold Mines (TSX: FURY) (NYSE American: FURY), owner of the territory’s Committee Bay gold project and Blue Star Gold Corp. (TSX-V: BAU) (OTCQB: BAUFF) (FSE: 5WP0), which recently received the Nunavut Mining Symposium Corporate Award for its economic and social development work.
B2Gold shares rose by 2.06 per cent Friday to $4.70 on the Toronto Stock Exchange.
rowan@mugglehead.com
