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B2Gold pipeline filling after exploration success

B2Gold expects its growth trajectory to continue as its exploration teams keep delivering the goods, president and CEO Clive Johnson has told Mining Journal.

The company had a record 2020, a year in which it produced more than 1 million ounces of gold for the first time, crowning 12 consecutive years of production growth, paid off its debt, began paying dividends which it increased to an industry-leading 3% yield and completed an expansion at its Fekola mine in Mali.

With the company's mine building team having completed eight developments it is increasingly turning its eyes on the Gramalote joint venture project with AngloGold Ashanti (AGA) in Antioquia, Colombia, where it is due to deliver a feasibility in April, Johnson said the company's pipeline was again starting to fill. Gramalote is due to produce about 400,000oz/y, with half attributable to B2Gold and construction possibly starting later this year.

Johnson is ready to build Gramalote and expects a quick decision to proceed from its partner, but failing that would happily buy AngloGold's stake. "I think we are on the same page. AGA is very keen as is the local and national government, to see Gramalote built as quickly as possible. If for some reason we presented a development plan and AGA didn't want to participate there is a mechanism in the agreement where we could buyout their interest based on the value in the feasibility study. I don't see that happening as this is a very important project for both companies to build the biggest open pit gold mine in Colombia and do it well," said Johnson.

Africa, where B2Gold has two of its three principal assets, looks like it will continue to provide growth opportunity for the company. "We clearly have great potential to continue our growth. At Kiaka in Burkina Faso, the economics are starting to look very interesting to be another large open pit gold mine. It has around 4Moz and we are doing an updated feasibility study there by middle of the year. The biggest change there is the potential for much lower fuel costs and power costs. We have become experts in solar power for mining: we do it in Namibia and just a few weeks ago we started producting power from solar at Fekola as well," said Johnson.

Fekola in Mali, where the company completed an expansion in 2020 to lift its baseline capacity from 6 million tonnes per year to 7.5Mtpa, also looks like it has more to give.

"Fekola started with 3Moz of reserves and now it has 7-8Moz of resources. There is a lot of potential there. 20km to the north is Anaconda where we have 800,000oz in saprolite and it continues to grow with a Fekola-type structure underneath, so we think we have the potential for another Fekola-like discovery," said Johnson.

The company is also investing in grassroots exploration in new jurisdictions such as Finland and Uzbekistan, and despite having made some telling acquisitions in the past to grow the company, M&A does not appear to be within the company's current game plan. "There is not a lot of great development projects out there that are valued at a level that we would want to acquire. The cheapest ounces are always the ones you find," said Johnson.

Shares in B2Gold are trading at C$6.04, valuing the company at $6.35 billion.