Otjikoto in 2.4m litres HFO savings …as solar reduces power generation fuel costs by 10%

Changing its power plant to an HFO solar hybrid plant reduced B2 Gold’s Otjikoto gold mine’s HFO consumption by approximately 2.4 million litres and reduced associated power generation fuel costs by approximately 10 percent in 2018, the company has said. 

This is subsequent to the mine having inaugurated a new Solar Plant on May 29, 2018.

“The plant is now providing approximately 13 percent of the electricity consumed on site,” Clive Johnson, President and Chief Executive Officer of B2 Gold said. 

Johnson further highlighted that the Otjikoto mine had another solid year in 2018, producing 167,346 ounces of gold, above the mid-point of its guidance range (of between 160,000 and 170,000 ounces). 

Otjikoto’s production for the year resulted from processing 3.4 million tonnes (compared to budget of 3.3 million tonnes and 3.5 million tonnes in 2017) at an average grade of 1.53 g/t (compared to budget of 1.57 g/t and 1.73 g/t in 2017) and average gold recoveries of 98.7 percent (compared to budget of 98.0 percent and 98.6 percent in 2017). 

Compared to the prior-year, gold production was lower by 13 percent (24,188 ounces), as planned, due to a negligible amount of Wolfshag ore being mined in 2018 while Phase 2 of the Wolfshag Pit is being developed. 

“Higher grade ore production is planned to resume from the Wolfshag Pit in late 2019,” further stated Johnson. 

For the fourth quarter 2018, the Otjikoto mine produced 44,766 ounces of gold, approximately in-line with budget. A higher-grade zone in the Otjikoto pit originally scheduled for the fourth quarter of 2018 was not mined due to lower than planned fleet availability. 

“This zone will be mined and processed in the first quarter of 2019 using a mining contractor to augment the current fleet. Compared to the prior-year quarter, gold production was lower by 15 percent (7,680 ounces), as planned, due to a negligible amount of Wolfshag ore being mined in 2018.”

For the full-year 2018, Otjikoto’s cash operating costs were US$502 per ounce and AISC were $719 per ounce, both were near the mid-point of their guidance range.

In the fourth quarter of 2018, Otjikoto’s cash operating costs were US$471 per ounce and AISC were $642 per ounce. Capital expenditures totalled US$51 million in 2018 and included pre-stripping costs of US$27 million, mobile equipment rebuilds of US$12 million and US$4 million for the installation of the Otjikoto solar power plant. Capital expenditures in the fourth quarter of 2018 totaled US$9 million and included US$6 million for prestripping costs and US$2 million for mobile equipment rebuilds.

For 2019, the Otjikoto Mine is forecast to produce between 165,000 and 175,000 ounces of gold, primarily from the Otjikoto Pit, at cash operating costs of between $520 and $560 per ounce and AISC of between $905 and $945 per ounce. 

Gold production is scheduled to be significantly weighted towards the second-half of the year (as a higher-grade zone of the Otjikoto Pit is forecast to be processed in the third quarter of 2019 and high-grade ore production from Phase 2 of the Wolfshag Pit is scheduled to begin in late 2019). 

The budgeted 28 percent increase in AISC over 2018 guidance, mainly reflects higher budgeted HFO and diesel prices, increased budgeted mining tonnage and higher expected pre-stripping sustaining capital costs (for the Wolfshag Pit). 

Consistent with the World Gold Council’s updated AISC guidance, all budgeted pre-stripping costs have been included in the AISC calculation, even though the 2019 pre-stripping activity at Wolfshag is expected to benefit Otjikoto’s operations for several years beyond 2019. 

Otjikoto’s AISC per ounce are forecast to significantly decrease in the second-half of 2019 compared to the first-half of the year, mainly due to higher expected gold production in the second-half and the timing of budgeted pre-stripping costs and equipment rebuilds which are expected to be incurred mostly in the first-half of 2019.