B2Gold’s Masbate Gold Project has continued its strong operational performance into the first quarter, after setting a quarterly production record in the fourth quarter of 2014. First quarter gold production of 46,241 ounces was approximately in-line with budget and an increase of approximately 9% or 3665 ounces over the same period last year.

Masbate’s new SAG mill is running consistently and performing well. Mill throughput in the quarter was 1,756,234 tonnes, approximately 10% higher than in the first quarter of 2014. The average gold grade processed was 1.05 grams/tonne, up from 1.03 and mill recoveries averaged 78.5%. Gold recoveries decreased slightly in the quarter due to the lower proportion of oxide ore in the material processed.

Masbate’s cash operating costs in the first quarter of 2015 were $674 per ounce, $67 per ounce below budget and $49 per ounce lower than in the prior-year quarter. Mining costs were 9% less than budget mainly due to savings in fuel costs and slightly lower material movement than planned.

Processing costs were also less than budget due to lower power generation costs and lower costs for consumables, such as lime and consumables used for tailings treatment.

Capital expenditures in the first quarter of 2015 totalled $4.1 million, mainly consisting of land purchases of $800,000, water treatment plant improvements of $700,000, pre-stripping costs of $600,000 million and tailings pond development of $300,000.

The Masbate mine is projected to produce approximately 170,000 to 180,000 ounces of gold in 2015 at a cash operating cost of approximately $740 to $775 per ounce.

Operating cash costs in the second quarter of 2015 are budgeted to be higher than the first quarter of 2015 as a result of budgeted lower grade and recoveries and related increased mining costs. However, grade is budgeted to improve in the second half of 2015 resulting in lower cash operating costs.

In the first quarter of 2015, the extension of Masbate’s income tax holiday was approved by the Philippine Board of Investments for an additional year to June 30, 2016. The company is in the process of applying for a second extension to June 30, 2017.

Masbate contributed to B2Gold’s record consolidated gold production in the first quarter of 115,859 ounces. This included 18,815 ounces of pre-commercial production from the new Otjikoto operation in Namibia. The total exceeded budget by 754 ounces and was 20% greater than in the same period last year.

With the successful transition from construction to commercial production at Otjikoto, the company is projecting another record year of gold production in 2015. Company-wide production in 2015 from Otjikoto and the Masbate, La Libertad and Limon mines is expected to be in the range of 500,000 to 540,000 ounces of gold, an increase of approximately 35% over 2014 production.

With the commencement of production at Otjikoto and the robust Fekola project in Mali on the horizon, the company continues to pursue its strong growth profile and low-cost gold production base. Based on current assumptions, B2Gold expects consolidated gold production to grow from 380,000 ounces in 2014 to approximately 900,000 ounces in 2018.