In a separate announcement, B2 Gold said it has struck a deal to acquire AngloGold Ashanti Ltd.’s [AU-NYSE, ANG-JSE, AGG-ASX] 50% stake in the Gramalote project in Colombia, boosting B2Gold’s interest in the project to 100% and adding 2.1 million gold equivalent announces of indicated resources to its resource base.
B2 gained control of the Nunavut asset via its acquisition of Sabina Gold & Silver Corp. in April, 2023.
The Back River Gold District, an 80-kilometr- long belt containing a series of gold deposits in banded formation, located in southwestern Nunavut, approximately 520 kilometres northwest of Yellowknife.
Goose will be the first mine in the district. An updated feasibility study completed by Sabina envisaged a project that will produce 223,000 ounces of gold annually for 15 years, including 287,000 ounces per year in the first five years, and 312,000 ounces annually at peak production. Sabina pegged the capital expenditure for the project at US$466 million.
The project received its final major authorizations in June, 2020, and is now in receipt of all major permits, and authorizations for construction and operations.
However, in June, 2023, B2 Gold announced an initial capital spending estimate for $800 million. The company has since updated the construction budget to de-risk the project and construct a reliable and low operating cost mine in the arctic.
In addition, the company has decided to accelerate underground mining development to increase annual gold production to 300,000 ounces per year over the first five years of the mine plan, which entails mining the complete Umwelt crown pillar.
The cost to accelerate underground mining is estimated at an additional $90 million, bringing the total project expenditure to $890 million.
Meanwhile, the company said the first gold pour is scheduled for the first quarter of 2025. It said all long lead items for the 2024 construction season have been received at B2 Gold’s freight consolidation points, prepped for ship transport and currently the 2023 sealift is underway, which includes delivery of 24 million litres of diesel fuel.
Meanwhile, Phase 1.0 of the accommodation complex includes 310 beds at the permanent site locations, which together with 160 beds located at the existing exploration camp, provide the necessary accommodation to support accelerated construction, mining and exploration activities.
Under the terms of a US$125 million gold stream and US$20 million Sabina share purchase arrangement, Wheaton Precious Metals Corp. (WPM-TSX, WPM-NYSE), will receive 4.15% of the gold production from the project, dropping to 2.15% after delivery of 130,000 ounces and dropping to 1.5% following the delivery of 200,000 ounces.
On September 15, 2023, B2 Gold shares closed at $4.35 and currently trade in a 52-week range of $5.87 and $3.86.