Good afternoon. My name is Jason, and I will be your conference operator today. At this time, I would like to welcome everyone to the B2Gold First Quarter 2021 Financial Results Conference Call. All lines have been placed on mute to prevent any background noise. Quarter.
After the speakers' remarks, there will be a question and answer session. Then the number one on your telephone keypad. Thank you. I would now like to turn the call over to Clive Johnson's President and CEO. Mr.
Johnson, you may begin your conference.
Thanks, Jason. Welcome to the conference call to discuss the financial results for the Q1 2021. Thanks for attending. We quarter. Had another very strong quarter as you're going to hear from Mike Shirley as I've been and as laid out in the news release, very good financial performance again driven by strong operating performance at the mines, which allowed us a significant beat on our operating and all sustaining costs.
And all of this, as everyone is still aware, is quarter. So once again, it speaks to the tremendous leadership and the tremendous management and the employees we have on all of our sites, everyone on the same page, which is committed to continuing to mine during COVID if we could do it safely and responsibly. We've had great relations with the governments in the countries that we mine. Question. And I think we've earned a lot of trust there.
I think over time with our the cultural approach that we bring to the business, treating people with fairness, quarter. I think that pays off in a time of crisis or in a situation like COVID because we established a mutual trust. So the government, our employees quarter. And the company all wanted to do the same thing, is to keep mining, but do it safely and recognizing the impact of COVID. So we took many steps that we've talked about before to assist the areas we're in opposite COVID, as we do with all sorts of aspects of their lives.
But I think it's been a great success in a very difficult scenario. All around, these companies don't have a safety yet. So the fact that quarter. We can continue to mine and pay taxes and keep these good paying jobs going and keep our communities as safe as possible. One.
I think it's been a good thing for the industry. I think there's a positive going forward potentially in the mining phase because I think post COVID many governments will look at who were the good performers, what were the good businesses to have in your country during COVID. And I think quarter. The results of miners, not just others as well, have shown governments that gold mining can be very positive thing in a time of crisis. Quarter.
So just in general, we're going to review the results of the quarter and then we're going to talk a little bit about Gramalofi. And as everyone sees in the news release, We delayed the completion of our final feasibility study and then Gramalote about everything that will be about a year. And the economics are positive from piece of the work that we've done so far. But we feel there's a much better project there or sorry, potentially better project there with an optimization for the drilling and other things that we can do. So while the economics are positive, we want to make it a better project and we're going to take the time to do that.
I think it's important to know that also quarter. We were going to be looking at we'd originally hoped to potentially have boots on the ground in September of this year if there was a positive development decision. There was going to be some delay in that anyway because the government had quarter. I was interested in our idea of doing resettlement in stages instead of altogether waiting 2.5 years to do all the resettlement and then start construction. So we've had conversations with the government where they've been interested in hearing more about that idea, but they did ask us to go and then do some public consultation, understandably, and also to have a government review call, which will take some time.
So we probably would have been looking at a 6 month delay to poops on the ground, regardless of the economics and whether we've had our positive development quarter. So now we're talking about the feasibility study of the year. And Bill will give you some detail as to what we think and why we think more drilling and some of the other things are important. People talk about optimization sometimes question to perhaps try and negate some negative. But in this case, there's a number of things you'll hear from Bill that we identified in the project some time ago that we thought were things we may have liked to have optimized.
But at the time, we were trying not to change the footprint because AGA and the prefeasibility study had realized a construction permit. So we are trying to stay within the bounds of that. Now we can open that up and look at the authorization. You'll hear more about that in Bill. We remain very positive on the project.
We've had good conversations with AG, our partner, and we're looking to briefly to shortly finalize budget over the next year, an increase in budget, and we should be able to hopefully announce that soon. But conversations we've had, we're on the same page. We're disappointed that we didn't have the robust economics we saw in the PEA. We'll talk to some of the things that changed, but they I I think along with ourselves, we remain positive that this can become a good asset and a good project for us. So we'll go and do all that work.
I think it's really important to note as well the government relations remain very good and at YOKI and within the federal government, we had a meeting yesterday. Call. I had a call with the representative of the Ministry of Mines in Colombia, and they've been very supportive, and they're disappointed to hear that it's not going to happen in a later way, but very supportive of our desire to build the best project for everyone, including the Colombian people and the government as well. So very supportive there. And there's a lot of activity going to be happening, as you'll hear, on-site in terms of working towards the resettlement program.
All of our social programs we're doing there, working with the government, with small miners. There's a lot of good things that are going to happen addition to the optimization to bring us keep this project moving forward. Generally, corporately, I think I'll just touch on strategy briefly. We remained pretty quarter. We've been on the same page as far as you've been up for some time, which is to continue to optimize production at around our sites, at the sites as we've seen.
Quarter. We're going to continue to pursue our development opportunities to see where we're going with those including Gramalote, and also looking at the potential for additional production of Fekola from the Anaconda area. As we announced in the news release, we apply for an extension of the Minicola license, which is part of Anaconda with the government. We fulfilled all the requirements and obligations to legally do that. And we are in discussions with the government as we speak about remedying the situation, and we hope to have a positive resolution of that.
But we will take whatever legal means. We have to us if required because we think legally we were we should have been awarded that extension to the license. So we're working to eliminate any confusion on that also working with the government on that. Quarter. It's an important project for us.
And in fact, as you'll hear from Bill, we have been planning to be trucking ore from quarter, Minakonda down to the Separate ore down to the Fekola Mill as early as early next year. Quarter. Obviously, that's subject to the getting the license issue sorted out. And once again, we think there's tremendous potential in Anaconda, not only for the saprolite, which which we've seen in resource about 8 100,000 so far, but much greater potential in the saprolite and underneath the sulfide, some very good drilling results. So it's an important project to us.
I think it's a very important project quarter to the people in the government of Maui as well, and we're uniquely suited to produce from their 2 at once benefit given the proximity to the Fekola well. Quarter. Other than that, we're going to continue to focus on another thing we've done extremely well, which is exploration. We had great results around quarter. I've asked Tom to say a few words today because we traditionally had great results around the mines, turning resources into reserves, increasing mine like that work continues and this quarter.
It continues to go very well. But also we were born in exploration twice and being on B2Gold, we're very good at grassroots exploration as well as brownfields. We've got a very good exploration budget this year, a large budget, which I think is a good thing. If you look at the return on investment over, let's say, the last 3 years or so, I think somebody worked out that it's about $19 an ounce of our exploration spend to discover ounces of gold. Our cost is remarkably low.
So as I always say, the cheapest ounces will be the ones that you find. So Tom will talk about some of the exciting grassroots projects that we're doing quarter. Adam will touch on the brownfields as well. In addition, we're always looking at opportunities to grow. M and A has been top of these days.
We've said repeatedly that for us quarter. To go into that area would have to be something that we could find value for our shareholders on an accretive basis, not anticipating higher gold prices exploration success. That's the discipline we've had for decades and that will continue. So we're looking at if anything, if you can act as anything, it's quarter. There's an opportunity for us to add shareholder value.
We're not likely to be thinking of any bidding wars on a few decent deposits that are out there quarter because we won't overpay and we did some of the heavy lifting before in the sense of building Ojikoto and acquiring a building Ojikoto on Fekola when it was very unpopular quarter. But we continue to look at things that make sense to drill the value through from an acquisition point of view. Quarter. So that is an overview. I'll pass it over to Mike, and he's going to give us some of the financial highlights for the quarter and discuss financial position and then we'll be hearing from Dylan and then Tom.
What would you like? Quarter.
Thanks, Clive. Yes, I think I can run through the results of the quarter fairly quickly. It was a good clean quarter and some nice results. So just starting firstly with revenues. Quarter with revenue of $362,000,000 on the sale of 257,000 ounces and realized an average price of $17.91 an ounce.
And overall, we sold 14,000 ounces more than we'd originally budgeted, and that's really a function quarter. So total production in the quarter, including our share of caliber, quarter was 221,000 ounces, basically 19,000 ounces ahead of budget. Total production from our 3 sites operating mines was 206,000 ounces, which was 18,000 ounces ahead of budget. So looking at those individually, Fekola, we produced 125,000 ounces, which is about 8,000 ounces higher than budgeted, and that's quarter, primarily a function of Fekola processing facilities, just continuing to outperform. We had originally expanded Fekola Mill to a notional annual throughput rate of 7,500,000 tons.
We did budget 7,750,000 tons for 2021, but quarter. In the Q1 of 2021, we had quarterly record of almost 2,100,000 tonnes or an annualized rate of well above 8,000,000. So quarter. Kola Mills outperforming and we're seeing more production as a result. Masbate was 58,000 ounces, 7,000 ounces ahead of budget and that's function mainly of higher than budgeted mill recoveries.
We got if you look at the ore feed that was processed in the period, we had quarter, better recoveries from the high grade sulfide ore that we mined from Main Vein in the period and also better recoveries from the low grade stockpile quarter. We ran through the mill and that was originally mined from Colorado, but both of them had better recoveries. Quarter. In Ojikoto, production was 23,000 ounces, 2,000 ounces higher than budget, and that was really just slightly better on all fronts, processed tons, grade and recoveries. Quarter.
Looking at that in the context of cash costs per ounce produced, consolidated cash cost per ounce just for the quarter was $609 per ounce, that $54 lower than budget and from our 3 operating mines, 5.81 dollars per ounce, and that was $60 less than budgeted. And if you look at the individual components, Fekola, dollars 5.03 Crowns, dollars 55 less than budget. And the bid on budget in terms of cash cost per ounce is a function of a few things. It's higher than budgeted production, as I and lower than budgeted mining and processing costs. We had lower maintenance costs at the mill in terms of sorry, lower budget maintenance costs for the mining fleet and then we had lower budgeted processing costs at the mill, higher mill throughput and lower cyanide use.
Quarter. Also to note, the new Focal power facility actually came online in the quarter slightly earlier than we thought, and we think that probably benefited quarter cash cost by approximately $4 per ounce in the period against budget. Masbate, 608 quarter earnings cash cost $80 less than budget, and that's almost exclusively higher production in the period. We did have some savings in mining cost that's mainly driven by higher production. Ojikoto was $9.40 and that was $56 per ounce lower than budget quarter, and that again is primarily a function of the higher production.
Then turning to all in sustaining costs per ounce sold. Consolidated, including Caliber, dollars 9.32 an ounce, which was $146 lower than budget. And if you look at our 3 operating mines, it was 9.19 $18 per ounce or $159 per ounce lower than budget. And that's a function of a few things. Obviously, the lower cash cost as described second ago.
And also the higher than budgeted ounces sold, we produced more and sold more, and that has a positive impact on the sort of fixed capital element when you look at it in terms of all in sustaining cost per ounce. And also, we had lower CapEx quarter. That's mainly lower sustaining capital for it's really the timing of fleet maintenance and rebuilds. Quarter. So that's really those are really the primary drivers.
The capital costs, we think, are just timing, and we think they'll reverse later in the year. Just quarter. Just to give you the individual components of the all in class, Fekola was $7.70 per ounce, that was $128 lower than budget quarter. Ms. Batty with $818, dollars 194 lower than budget and Ojikoto, dollars 14.75 which is a larger number, but it's still $2.40 less than budget.
Quarter. Just a reminder for everyone on the line, the production from Mojiqua was very significantly weighted to the second half of the year. In the first half of the year, we're processing almost exclusively from stockpiles at site, while we continue to strip the Ojikoto and Wolfshag pits. And when we get into quarter. Those pits later in the year, especially the higher grade components of Wolfshag in the second half of the year, we'll see that production level significantly increase.
Quarter. Overall, production wise, cash cost wise, we still think we're quarter. We expect to continue to be on target for our guidance for the year. Guidance has maintained. Again, reminder, it's significantly weighted to the second half of the year.
Our production for the first half quarter is between 390,000 and 415,000 ounces, and the second half is 580,000 to 615,000 ounces, and that reflects quarter. We are pleased with the progress we made in the second half of the year, both Fekola and at Otjikoto. Quarter. It's fairly consistent as it goes all the way through the year. A couple of other comments on the operations.
I know Bill is going to give quarter. I had Fekola. What's not included in the budget of that guidance quarter. For Fekola, is any new material from the cardinal area? We're currently looking at that now and what we can pull into the 2021 minutee plan, quarter.
But that wasn't included in our budget or guidance. For Kola Solar, I mentioned that, that came online. We did I think we've now managed to source of the remaining solar panels and get them on the way to site. They were on the ship at one point waiting to go through the Suez Canal, but quarter. Fortunately, that's resolved, and so we're still on track to finish the solar plant by the end of the second quarter.
But in the meantime, we did bring it online, the first part of it online earlier than quarter. Just a couple of comments, I think, on really income statement, good results, nothing quarter. The earnings for the period, dollars 99,000,000 earnings attributable to shareholders of the company, dollars 91,000,000 quarter or $0.09 per share and adjusted EPS was also $0.09 per share. Then a few few things to highlight on the cash flow statement. So cash provided by operating activities was $146,000,000 So that's pretty close to our budget in the end.
So we did have a beat, quarter. As I mentioned on the cash cost side, so the cost of our operations were lower. But offsetting that, we had some working capital movements really related quarter and the timing of that and certain tax payments that offset that. So we ended up pretty much right on budget for the quarter for operating cash flow. Quarter.
And assuming a gold price of $1800 for the full year, we're still on track, we think, for that guided operating cash flow number of somewhere around 630,000,000 quarter. Approximately $500,000,000 that will come in the second half of the year as we get into that higher grade material and Higher Production, Higher Sales and just to remind everyone that the second quarter's operating cash flow will be impacted by payment of those outstanding 2020 tax liabilities. There's about $140,000,000 worth of 20.20 tax obligations that will quarter, the largest part of which is for Fekola, about $125,000,000 of that total relates to either Fekola taxes or priority dividend payments, which are triggered as a tax. And we'll also have, in addition to that $140,000,000 we'll also have some other withholding tax payments we'll make quarter for monies that we're going to pay remit up from sites as dividends to pull the cash up from sites. Quarter.
Couple of things to highlight in the cash flow statement. Dividend to shareholders during the quarter, US42 $1,000,000 or US0.04 dollars per share. Quarter. We're pretty comfortable with our dividend level right now. Annualized, it would be USD 170,000,000 We are paying 1 of the highest dividend yields right now in the gold sector.
Quarter, and it's a significant component of our 2021 free cash flows. So we will look at it again in the second half of the year, but quarter. As I mentioned, I think we're pretty comfortable with that level just now. The only other couple of items I'd highlight on the cash flow statement, investing activities just under $60,000,000 for the period. That's about $18,000,000 less than budget.
And as I mentioned in the all in sustaining cost discussion, some of that's timing on CapEx for mobile fleet and rebuilds at sites. We think that will reverse later in the year. And on the non sustaining side, quarter. We were under fairly significantly. Gramalote was under $6,000,000 It's under budget.
But we're continuing to work on feasibility studies, so we expect that will reverse. Quarter. In fact, as we noted in the news release, we are currently in discussions with AGA about increasing the feasibility study budget quarter by approximately $34,000,000 So our share would be $17,000,000 higher than we've currently budgeted, and that would take us through to quarter at the end of the Q1 of 2022 when we expect to finish the feasibility study. Also under on the CapEx side, we were about $5,000,000 under in the quarter in exploration. That's just quarter.
And we expect that to reverse later in the year. And so overall, we finished Q1 $512,000,000 in the bank $600,000,000 undrawn. We've got the full amount of our revolving credit facility available and available to draw. And quarter. So we're in good shape, cash flow wise, liquidity wise, and it was a good solid production quarter and results quarter.
Quarter. Those are the main things I was going to highlight there. So thanks.
Thanks, Mike. Call. Bill, over to you, who gives an overview of operations and an overview and a bit of an outlook for highlights from operations and what we're looking at going forward.
Yes, sure. Thanks, Clive. You hear me all right?
I do.
Quarter. Okay. Well, thanks. A lot of the stuff certainly was either hinted at by Clive or by Mike. Maybe I can just provide a little more color commentary to the ancillary operations.
If you look overall, obviously, we're quite happy with how everybody did quarter at all three operations for the quarter, every site exceeded its budget. And we really didn't see any downsides as far as working forward into Q2 and into the second half of the year. Kind of going mind by mind, if you look at Fekola, great quarter. Quarter. As far as development, I think everyone's aware we previously said that our budget was running at 7.75 1,000,000 tons per annum.
We put out in the press release that obviously the mill is running much better than that. We're still holding at kind of what we're saying quarter is $8,000,000 plus, but our life of mines are due here in the middle of the year. So we're going to take a good hard look at what we think that number is going forward. We certainly believe that we've got some potential to add quite a bit of saprolite from both Cardinal and from the Menencoder, the Anaconda area. Discussing Cardinal specifically.
We did receive our bulk sample approval, so we are right now out there starting to strip it and or will be heading to the mill or already has started heading to the mill, I think, or if not, it's imminent. So we certainly see going through the rest of Q2 and into Q3, we will be developing that. And of course, as Mike insinuated or discussed, we see in 20222023 the potential for additional ounces to come from Cardinal, which are not in our current life of mine. And the same story kind of holds true for Meninikoto. We from the operations perspective, we're assuming that the current situation is resolved.
And we believe if when it gets resolved that we're going to see truck saprolite into the Fekola Mill in 2022. And given the fact that we have a large additional capacity for the mill. Those numbers could be quite significant as far as changing the life of mines. So once that's resolved, I think in Q3, we're talking about coming out with what we want to do there and putting it into production in 2022. And it's also I think it's important to note while we're talking about Trucking to Fekola.
We see that as like Phase 1 of the project. Tom's group continues to drill out there, quarter, and we continue to have some success as far as looking at the hard rock. And so once we get the Phase 1 studies complete and get it all set up for trucking. We really want to take a hard look at is there the potential to put another mill up in that area. And so that's kind of that will be the emphasis once we finish the trucking study and get that all put to bed.
We'll move on to what does the trade off look like trucking versus putting a mill up there. Real quickly on the solar side, Mike hinted at it, but solar plant is up and operating really well. I think we've been publicly stating that we're kind of at 75% completion, but the reality is, is we're probably higher now. We've seen great returns on that solar as far as reducing our power costs. And we believe that quarter in Q2.
We're going to finalize that and we'll have the full benefit starting in Q3. Going to Ochikoto. Ochikoto once again had a really nice quarter. No issues as far as mining or milling, right on schedule. The development, as Mike pointed out, the key is the second half of the year.
The development for getting into Wolfshag III remains on schedule. We don't see any issues there for meeting our targets. The underground remains, while it's a little bit behind, we still see gold coming out as projected in Q1 of 2022. So overall, no issues at all at Otjikoto. Maybe one of the things to talk about is we are in the process of connecting up our overhead power line.
Facility, the power facility at Otjikoto operates in standalone configuration. It's an island. We believe by connecting to the overhead power line, that we'll be able to continue to reduce power costs there significantly throughout the rest of the life of mine by taking the off peak power prices, which quarter. I saw something. I think it reduces almost $0.04 a kilowatt hour for those hours that were on the off peak hours.
Quarter. Looking at Masbate. Masbate, once again, great quarter. That's the I continue to say that's a project that is probably just day in and day out just performs as designed. We continue to see better recoveries and better grade at Masbate, as we say every quarter, and that certainly contributes towards the over production for the quarter.
The rest of the year there is kind of business as usual. We're in the process of developing another lift for our tailings that remains on schedule. So overall, on the operational side, everything completely as advertised and as predicted. Quarter, maybe talking a little bit, as Clive asked, a little bit about Gramalote. I think it's important to talk to start out talking about what the feasibility was trying to do and really get our head around why we've now talked about unhandcuffing maybe the project design from what the pre feasibility was.
When we took over the project, we agreed with AngloGold quarter that we were going to basically hold the design and the reason was as they had already pulled a construction permit. So the footprint had to be had to remain the same quarter, and we basically had to just try and optimize within the existing footprint. What we found very early on is that there was a lot of things that we wanted to do, and some of these things were quite significant, things like, diverting rivers in a different direction, moving infrastructure facilities, taking a look at the tailings pond. And in order to do that, we would have been required to open up the permit. So we've decided to go ahead and maintain the same footprint, but keep a log of where we were going and what we could change.
And so when the feasibility was done, remember there was one of the key things was quarter, upgrading the resource from inferred to indicated, and that was very successful. And then updating the cost, quarter. When that was all said and done, we looked at it and we said, while this project is positive, we certainly think that there's a better project here. Quarter. And so we presented it to AngloGold.
Anglo agreed with our concept. And basically, what we decided is that we were going to do some additional drilling because we thought there was some further potential for to increase the resource up to indicated. We were going to take a look at the engineering design as far as take hand cuffs off and moving things around. And we thought it was still critical because we do think this is a project and we do think this is something that we can move forward quite rapidly once we get what we're now considering kind of the updated feasibility. We wanted to make sure that the social aspects continue to move forward.
So things like resettlement, we've been talking with Anglo, we've been talking to the government about how we can make sure that, that stays on track. There we are the Colombian government is in the process of formalizing some artisanal mining within the region. That's a very positive development. So we wanted to continue to support that. And we wanted to make sure some of the critical path items, things like bringing a power line into the region, continue to move forward.
So all of these things we put together as a packet for AngloGold. Conceptually, they agree with the concept quarter and we provided a budget to them. They're in the process of having a look at that. And we think very shortly, we will continue to move this project forward. We see the updated feasibility study coming out at the end of Q1.
And obviously, if it's positive, we would mobilize shortly thereafter. And I think it was Clive that talked a little bit. It's really important to remember quarter. The difference between our proposed new schedule and what the actual schedule was, was not that different because when we talked about kind of doing the B2 way when we were going to do concurrent resettlement. The government came back to us and asked for us to do some additional stakeholder engagement and to have them review the results of that stakeholder engagement.
So we saw the potential for a 6 month delay in any case. So we're not really that far off of that schedule. Talking moving maybe now to Keyaka. I'm not going to spend too much time on that. As we've said and we continue to message, we do believe by the end of Q2, the results will be out and we'll be discussing that.
Clive, is there anything else that you want me to talk about?
He's on mute, of course. Bill yes, thanks, Bill. I think that's a good survey. Maybe quarter. For the interest of the people on the line, maybe you should talk a little bit about some of the issues between the PEA and the feasibility work.
Now the study when it comes on will not be an updated feasibility study. It will be the feasibility study. So now we've done the feasibility work that's given us some economic indicators, but we have not completed the study. Quarter. I think it's an important point, but can you maybe talk a little bit about some of the differences between the PEA and what we're seeing now and the feasibility work that we've done, question.
Yes, sure. I mean, some of the key ones relate to the resource, as I said. Obviously, for a 40three-1 101 feasibility study, we can only use indicated. And we did quarter, the modeling only on Gramalote Ridge and didn't include the oxides in that. The pit design itself has changed a little bit based on some geotech issues related to the pit design.
But the mining itself, the mining rate and the mining design remained exactly the same. On the milling side, we believe that we have a more elegant and more efficient milling process. Quarter. We have looked at it certainly was cheaper. We've included some additional equipment that weren't that wasn't in the pre fees and that's just due to level of detail.
The tailings facility remained exactly the same. Power overhead power lines come in. Some of the key cost drivers which had changed, things like quarter. The power cost was slightly different. We had updated some of the costs due to inflation.
And then one of the key ones, as you talked about already, is resettlement. We wanted to move people out sooner instead of the way that the prefeasibility had the resettlement was that it had a really long period quarter where you had to complete fully complete resettlement before you could start construction. As I said, we were looking for concurrent resettlement. The issue there currently is a river that flows right through where the existing pit or where the future pit would be. There's a big tunnel where they diverted that.
We think that there's a potential to make that a better project. So some of these issues, those are the key differences.
Question. Okay. Thanks. Yes, I guess just maybe on a from a strategic and a corporate point of view, we're quite well known for being aggressive and there's a big difference between being aggressive and being reckless, I was pointed out to people. But in terms of the way we approach projects, the way we do it very safely and responsibly quarter.
I think this is perhaps an example and some people recognize it of our discipline. We have a project that has some positive economic indications, albeit not as robust as it was before. But we took a look at it and said, well, what's the best thing to do here? Well, the best thing to do here because we're famous for building quality projects based on quality work and attractive economics. Quarter.
So that continues. So this is an indication perhaps if anybody needed to know it. I don't think they should have needed to know given our history, but in the example of our financial and corporate discipline, where we think we can make it a better project and our partners and ourselves are prepared to believe in that concept as well. We're prepared to spend some money to do it. Quarter.
So at the end of the day, the delay is appropriate to do a lot of very good work and then have a look at what comes out. We're hoping we're going to have significant improvement from the economic indicators that while positive, we're not going to be about leave our threshold, given the fact that we see so much upside quarter, significant upside potential in the work that we're going to be doing. So thanks, Bill, for that. And I'd like to pass on to Tom Garrigan now to quarter. Sorry, a little bit about some of the things he's excited about, about our large exploration budget this year and some exciting new countries and targets for us.
Thank you, Clive. Quarter. Hello, everybody. As you know, we have an exploration budget this year of some $66,000,000 to be spent not only on our main projects, but also in grassroots exploration. In fact, in grassroots exploration, we're looking at just over $27,000,000 Just brief comment on the exploration around the mines at Masbate.
We're continuing to drill quarter. The pit edges and the gaper portions of the pits, where the pits get bigger with the better gold prices that we're seeing now. Quarter in Mali. We're continuing to do exploration down plunge on Cardinal. It remains open, and we'll continue to do exploration in the Anaconda area as that area remains open.
In Namibia, our exploration is almost exclusively focused right now on what we call the OTG 23 zone, which is about 100 meters away from Wolfshag. We'll have more on that later as our work continues, quarter, but we view that as a positive sign for Ojikoto. Just in the grassroots exploration, we're talking about significant budget. Within that budget, we're talking about over 30,000 meters of diamond and RC drilling on some of our newer targets. Quarter.
I'll mention specifically, I'll start with Uzbekistan. It's an area we've been looking at. I hate to say this because it kind of quarter. We're probably close to 15 years dating back to the BINA days. It was an area we had visited back then and we continue to work on relationships with government and geologists in that country.
And that led to us a few years ago being awarded some licenses in the country. Quarter. The licenses we have are right near 3 world class ore bodies. Myrntal, which is quarter. There's a large variety of numbers related to that, but it basically is the world's largest gold mine at over 2,000,000 ounces of production per year.
And then there's 2 other 10,000,000 ounces deposits in the immediate area. Our work in the area today has been trenching, auger drilling and question. And we're just about to start a 10,000 meter RC program this week. This will be followed later in the year with diamond drilling. Quarter.
This is an area of world class deposits that has not seen a lot of exploration outside the exploration being done by local government combinats. We're very excited about this area. In addition to that, in Finland, quarter. We have almost 8,000 meters of diamond drill planted on our property. We're currently earning 51% from Orion, and we're quarter.
We're getting close to having earned our 70% on this project. We're excited about the area. It's quarter. We have a new discovery called Ikari and the geology of Ikari continues on to our ground and we have quarter, some decent gold anomalies in our overburden drilling and our till drilling and then also some of our sales sampling and certainly rock sampling. So we're excited about the potential for that.
We think that holds something. It's something new that's just come up. Just recently, we've been awarded licenses in Egypt in a historic mining area. Those licenses are just being papered right now. So I don't have too much detail on that at this time.
We'll have more later, but it's an area we've been quarter, again, been focused on for several years doing grassroots exploration and evaluating the potential of that area. So we are excited about it. Quarter and then we'll continue doing grassroots exploration in other targets that in other areas of the world that hopefully will
call. Thanks, Tom. Appreciate it. Call. I think, operator, I think we're ready to open up for questions now.
Your first question comes from the line of Tyler Langton from JPMorgan. Your line is open.
Good afternoon. Thanks for taking my question. Quarter. Just to start with, I guess, Gramalote, can you talk a little bit about to kind of make the economics more attractive, just the importance of either Sure. Increasing production at the project or kind of lowering operating costs or capital costs.
Just trying to get a sense of question and maybe kind of what's sort of the most important or a bigger focus.
Sure, Bill?
Yes, sure. So certainly, we see some potential for capital reductions. That's one of the big ones. Another one of the big ones relates to increasing the ounces that we can generate over the life of the project. And this includes kind of a drilling program within the existing design pit.
There were a few ounces left within the existing pit, which were in the inferred category and then just outside of the Post pit, which would be in the measured indicated and inferred category. So we see those two things really as some of the key economic drivers. And in particular, if you look at the CapEx, as I said, there are some mostly related infrastructure projects where we think we can bring the cost down, things where maybe the the project has been going have been designed for like 10 years now where people kind of lose focus on if you had a blank sheet of paper, could you optimize things? And that also relates to certainly the constructability of the project. And so those are some of the things that we're looking at.
As far as the OpEx, we don't see a lot of changes between what we have now versus what we would have a year from now.
Got you. Okay. That's helpful. And then quarter. Just switching to Fekola, with the cardinal, I think maybe last quarter you talked about that mine potentially contributing I think 20,000 to 25,000 ounces quarter.
Kind of in Q2 and that'd be kind of the main contribution for the year. Is that kind of still what you're thinking? I think maybe I heard some comments you're talking about maybe quarter. Contributing in Q2 and Q3. If you could just provide some more color there, that would be great.
Yes. I think what I said was hopefully what I said was 20,000 to 25,000 ounces over 2021, starting in Q2 from the bulk sample, right? So we're talking about 20,000, 25,000 ounces out of that bulk sample. But I will say that it looks to me like we're while we do not have it yet, and I must stress that, and I should also stress that is an inferred resource that we see starting really right now through the end of the year, we're going to start mining at Cardone. So there is potential that it could be a little bit more than that.
Got it. Great. Thanks so much. Thanks.
Question. Your next question comes from the line of Ovais Hambib from Scotiabank. Your line is open.
Quarter. Thanks, operator. Hi, Clive and B2 team. Congrats on a good quarter and thanks for taking my questions.
Thanks, Luis.
First couple of questions, Clive, are on Gramalote. And this, I guess, I can direct to the bill. You've already answered a lot of the questions I quarter. Good overview on that front. But in regards to the additional, I guess, extended resettlement, just to make sure that I understand correctly, quarter.
Was this due to additional footprint needed to be added or is this resettlement always in the plans on the website?
No, Ovais, it was always even back in the AGA days, there was quite a big resettlement, which went along with it. We certainly have provided now more detail around that, and we're in the process of really working through our resettlement action plan. So a wrap has been developed. And the difference really was, As I said, there was a condition precedent for the construction permit, which basically said you had to do all of the resettlement. So everywhere in every region, you had to move everybody out.
And what we realized is that there was a big chunk of it, which we could do, and then we could start construction and there were some people on periphery that we could then deal with as we got to that area. And so that's really the difference, but the overall line is basically the same. There are some people that are saying that they're in there, some people saying they're out. But in general, the quantum is pretty close to the same.
Got it. Okay. Thanks for that, Will. And just kind of talking about the optimizations that I expected, is the plan basically to get close to the economics shown in the PEA before giving green light to the proxy. What I'm trying to ask is, is there a point where you would kind of walk away from Gramalote?
Or question. Is this kind of what is the point where you
would make a decision essentially when I'm trying to ask?
Yes. That's Clive probably answer that. From an engineering standpoint, I mean, all we want to do is we want to make sure that it's got the best economics possible and that it's most easy for us to build.
Question. Yes. I think we are going to spend a significant amount of money in addition With our partner, we're expecting to agree and re budget as we've talked about in the news release. So quarter. So we definitely are doing that for the reason.
The reason is because we think we're seeing enough indicators, as Bill says, when you start taking the handcuffs off the engineering side, design side of things that we see significant potential to make it a project that we would want to go forward with. So the economics quarter. Today are positive. I mean, I guess, some companies might use mechanisms like hedging, etcetera, to maybe look at making those things better potentially, but that's not where we are in the sense of me looking at it from a technical point of view, saying we think we can have more ounces, quarter. We think we can lower the capital.
If you look at the all in sustaining cost based on the current economics from the feasibility work, I think it was somewhere around close to the mid-7s. So it attracts a project from that perspective. Can you add more ounces? Can you lower that? Can you lower some of that capital and add to that 15% IRR?
So quarter. We wouldn't be I mean, ourselves and AGA are companies, I believe, I can't speak for them, but I believe that we are not companies that would continue to pursue something. If we thought we were sort of flogging a dead horse or just giving false hope, we very much see an opportunity here to make this a project that we would want to develop. Call.
Perfect. Thanks, Clive and Bill. And I'll I have a couple of more questions, but I'll let others ask questions and then jump back in the queue.
Call. Okay. Thanks, Luis.
Your next question comes from the line of Geordie Mark from Haywood Securities. Your line is open.
Quarter. Yes, good morning, everyone. Thanks for
the time today. Good quarter. Maybe if I can expand on some of the Novase's questions, Just in terms of the change in budget, is that largely drilling expense related in addition to the 18,000 meters of drilling that was already planned this year. Call.
You want me to answer that, Clyde?
Yes.
Yes. So Jordy, there's kind of 3 components there for sure. You're right, there is a big chunk of drilling which goes along with that, and I can let Tom or Brian kind of maybe give more clarity there. But there's also the engineering component, which is more just the actual consulting and engineering aspect of it. And then if there's a social component.
And like I said, we do want to push forward some of the key social issues. And so we have put some money in there for things like basically preventing some sort of inflation happening with resettlement, purchasing land packages now, making sure that we've got the right areas available for resettlement. Those types of things also will take up a chunk of the budget.
Okay, brilliant. And then there's also mention of the power line. Is there is that in terms of you're trying to bring that online to basically move the project forward or the project timing forward and your progress with optimization.
Well, what we know is the power line is absolutely on the critical path regardless of what happens, right? So we've been in negotiations with a couple of power companies down there and have picked a group that we'd like to do the studies for. So they have to go out now and do a full ESIA. They have to do all the engineering and basically they have to design the route on the site. And so they're talking about something like a 28 to 30 month schedule to do that.
So we decided at this point that we're going to put a little bit of money at risk to get those studies going. And so that's what that is.
Okay. That's excellent. And in terms of if we stay on power and move over to Fekola, obviously Fekola at 2 thirds solar panels is heading beyond capacity. Is that right at the moment or a nominal baseline at least? And with additional quarter.
With the final 25 percent of panels in place, do you expect any linear sort of capacity increase there? Or are you kind of met with Battery storage sort of limitations there for delivering more power into local groups. Yes.
So I'm super bullish on this. So I'm going to pass that on to probably John Rachala, who's really more qualified to answer that.
Yes. We'll plan on trying to maximize our solar power usage. Only 75% of the capacity is online right now. Quarter. So because of the loss and panels, about 25% in the fire and they're going to be on-site very soon and then installed.
We plan on having that in operation by around quarter. The end of June or so, so it will be up to 100% of capacity and hopefully increase we should be able to increase the amount of solar power contribution from that. Does that cover it?
Okay. I was just wondering if it's going to be beyond the original expectations given the performance there. Quarter. We think we
have a good shot at it. We've been exceeding expectations just with 75% capacity in operations. So quarter. Hopefully, we'll be able to continue that with the additional solar panels installations.
Okay. That's great. And if I can just indulge one more. Moving over to Keyaka, obviously, experience on solar power quarter. And looking at a dual LNG solar source there.
And what sort of capacity are you thinking for that power plant?
Dennis, you want to talk to that?
Yes. The power plant we're looking at for Tiaka it will be a combined LNG solar plant. We're currently looking at about 30 megawatt plant, very similar to Fekola quarter for that right now. In optimization, you might want to kick that up a little bit, but it's in that magnitude. Call.
Okay. Thank you for that. I'll pop back in the line for questions. Thank you.
Great. Thanks, Randy.
Your next question comes from the line of Josh Wolfson from RBC Capital Markets. Your line is open.
Thanks. Bill, earlier on the
call, you mentioned that the Anaconda trucking study was going to be continuing on this year. Could you clarify what the permitting challenges there relate to? And I guess it sounds like you're still able proceed with any condo or if not, what the sort of implications are in advancing that opportunity?
Call.
Yes. So I'll talk as I said, so I think Clive was pretty clear that we're kind of working through what our permitting issues are right now. But what we've always said is it is a separate license, right? So it would have to go through full permitting, and we're working on those studies right now. So obviously, for permitting, you would need a fully SIA, which we're in the process of completing right now.
You would need some sort of feasibility study, and what we're calling that is kind of the Phase 1 aspect of the Anaconda project. All of those, it is our intent to kind of complete those in Q3 and then you would have to go and look at what the license conditions would be for actually bringing the project up, how it would be for tolling it through Fekola. All of those things would need to be discussed. So that's why we're talking about really you're probably with the exception of maybe a bulk sample, you're probably not going to see any ounces, best case, probably in the second half of twenty twenty two via truck.
And that just so I understand that those ounces that would be produced, the Minnequoto permits, The issues there do not affect the ability to truck the ore to Piccolo?
All that stuff has to
be resolved before we could do it for sure.
Call. There's a few different licenses there though. There's Medicola and there's other licenses that are not impacted by the secured discussion going on with the government about the medical license. So but yes, clearly, I mean, we should be very clear about that. We need to resolve this issue with the government about our right to the extension of the license and are hoping to resolve that shortly.
Okay. And then looking at Atiaka, any update that's going to be coming out, quarter. I guess we won't have the updated Gramalote numbers until early 2022. What's the potential for We have a team to look to advance that project in the second half of this year, either in lieu of Gramalote or even alongside it,
quarter. Yes, that's I mean, we haven't got too far into that yet because we're waiting to see the results of feasibility study in Keyakka to see whether it meets the threshold for us to go forward. We're going to know that by the I have to say, number of the middle of the year. But yes, conceptually, if it was a positive development decision there, we can look at we talked before about the potential for if they were both positive, quarter. We'll never build 2 gold mines at the same time.
That's one of our rules. It's been key to our success. We've got one great team, but GP and also look at potentially using the team for Earthworks Initially, let's say, it's been a loss of Oratek and then moving that team to the next one, whatever one you do it in. And then similarly, the mill construction team, when the B2-one project quarter. So all of that, of course, is based on the final feasibility of Gramalote and also the feasibility study, updated piece of study that we're working on right now that will be we expect to be prepared to release in the middle of the year at Kiara.
Understood. And one sort of final one, just in the language in the release, the comments about Gremelote and the I I guess the expanded footprint that could require the permit modifications, that not affecting the license, but that quarter. Potentially affecting the implementation schedule, is that just for, I guess, the project as it was if it was advanced this year? Or does the potential footprint change and the permitting changes affect the implementation schedule If it was advanced next year as well.
Bill, you want to
make sure?
Yes. The language maybe is not quite as clear as it could be. So what we're really talking about the way it works in Gramalote or in Colombia They kind of have three levels of permit modifications, right? So this is kind of insignificant. And these are things like when the resolution of your topography gets better and your road is shifted just a little bit, right?
And there's no real kind of major social or environmental impact change. And those are kind of you do on the fly. And then there's these minor modifications where it might be where you're moving something around just a little bit. And once again, there's no significant environmental or social impacts or potentially positive social or environmental impacts. And those have a small review process, and you can kind of do those on the fly.
And so those are the things that we've always been talking about inside of the existing permit we can do. Now what we're talking about is kind of, as I said, taking the handcuffs off and looking at what we're calling potentially major permit modifications where you're actually taking structures and maybe moving them into a different valley or moving an access road somewhere else, which have real impacts, which have to be investigated. So as we go along for the engineering process now, we've got to start looking at, question. Okay. This is really optimal.
This is how much money it could save us. Is it worth trying to get a permit modification to do that? If it is, then you start talking with the government. What would it take as far as updating your impact assessment? So all of those things are now going to be in play as opposed to us just saying, okay, we're going to keep it to kind of these non consequential or minors.
Now we're talking about let's talk about majors. I don't like the phrase that we're increasing the footprint because that's not necessarily the case. What we're actually doing is we're kind of modifying the footprint. And in that modification, we may be changing the potential social environmental impacts, and those need to be evaluated.
Call. Okay. That's a lot more clear.
Thank you.
I think it's important to note there, we talked a bit about it earlier on, but the relation to the Colombian government is very strong. Quarter. There's a very strong Canada Columbia relationship with the Minister of Mines and the government the government are very quarter of responsible mining as an important part of their economy. So we've always said Gramalote is in a great location and they're mining just in Ethiopia. If you flew over to Colombia, so where's the best place to build the 1st large open gold mine in the country, you'd probably pick Uintraf Gramalote.
Tremendous local support, the community, and there's some disappointment now because they thought this was going to crank up pretty quickly. But once again, quarter. If we are successful, what we're looking at doing, this is a really important source of jobs and there's lots of people working there now and that continues. All that work 2 years as we talked about the settlement, working with the government of small miners and other things. So between ourselves and AGA, there's been a lot of good work done here over the years.
It's actually important to note that on our building lease, working with the local community and the federal government and all governments. And there's a lot of support for this project. Quarter. So we think it makes a lot of sense. The government gets that, and I think they're highly motivated to work with us to see Gramalote quarter to become the best project it can be and to get it built for them for all sorts of positive reasons for the economy, local economy, quarter, but also the overall benefits to the government and the people of Colombia.
So there's a lot of support for this program. It's really important to keep that in mind.
Okay. And then sorry, final question. I know I'm taking a lot of time here. When you think about these potential changes and modifications in the footprint, quarter. Are there permitting elements that you're able to accelerate before that Q1 2022 target date?
Or does that sort of date then start the permitting process for these modifications?
Question. That's a really good question. And the answer is, we have to look at that. That's really what literally what we're doing right now. As I said, it's a huge trade off study in our mind on the potential delays quarter as far as permitting versus the potential economic benefits.
As Clive has indicated and I said already, we have a positive project now, but can we make it that much? Can we make it even better? Those are the things that we're looking at. What I will tell you is, you have to remember that resettlement still kind of is on that critical path. And so we're now working through that resettlement action plan.
And that's really going to push us out into Q1 2022 in any case. And so how do you play around with that? That's what we're looking at right now. Call.
Okay. That's great. Thank you very much.
Thanks for the questions.
Your next question comes from the line of Don DeMarco from National Bank Financial. Your line is open.
Thanks a lot for taking my call, guys. Quarter. Just building on one of the last questions. There was mention of comparing Chiaca to Gramalote. Maybe I'll take this a bit further.
And question. Is there a chance for some of the projects that Tom talked about to take priority over Gramalote, say, in the next 12 months? I mean, you've been in Egypt and Finland and Uzbekistan for a few years now. Which of these projects is most advanced, maybe even closest to a PEA?
Yes. No, I think, no, we haven't been working on in Egypt or Uzbekistan quarter. For a couple of years now, we've done some work in the spec of this development. This is relatively new. This is pretty early stage stuff where we've done some auger drilling and things like that and some as well.
We're doing some reverse circulation drilling and heading towards diamond drilling as well and into both. So they're all pretty early stage. They're really big attractive targets, but we don't want to oversell them. They're at an early stage. So we're a long way away from talking about a PEA and any of these things, but we're in elephant country and that Supertest, we're looking at them.
That's the reason why we're there. Tom, did you want to comment on that further?
I think that's pretty accurate, Tyler. We're still early on in the game, but as Clive says, these are all elephant country targets. It's why we chose them. But quarter. No, I don't know that within a year well, for sure not within a year, we're going to be replacing the other development projects with these.
Okay, great. Then given the Gramalote NPV is in the 500,000,000 range at this point. And obviously, as you mentioned, there's visibility for it to grow. But is this project perhaps of a magnitude now that's better suited to one owner? And Maybe if you believe in the project, is now a time to increase ownership?
What are your thoughts on that? We know from your previous comments that Anglo likes the project as much as you do.
Yes. I think that I can't speak for AGA, but we've had lots of calls recently, of course, talking about the question, being very transparent in a mid joint venture. And from what they quarter. So, I mean, we'll be coming out shortly with their quarter and their thoughts on new development projects. But we're both disappointed that it wasn't as robust as the economics we saw in the PEA, but see the opportunity, as we said, on the time sheet to make that better.
In terms of ownership, I think that what I've heard is that AGA is prepared to spend a lot of money along with us to see if we can we are with those operating to see if we can make it a better project. So I'd be a little surprised if we will be considering changing our ownership in it now. We've invested a lot into it, quarter. And believe in the path that we're on the potential. I once again, you can ask HJ that question in their quarter, which I think comes out quarter in the middle of May.
But the indications for the base of choice is they want to be a player in Colombia. They've got other projects, Cape Verdoner, etcetera that they're pretty excited about. So what they think, Panalote, what they've said to me is an important part of what they look to do in Columbia. And yes, they were hoping to with us as operator to showcase what we could do together through the fun endeavor. And we still hope to be able to do that just on a little bit delay as we've said here.
Sure. We've always said that if opportunity came to a pre sell initiative, we'd consider that. From what I've seen so far, I don't see that There's going to be a willing seller. I think we'll go forward fifty-fifty. That's so once again, I can't speak for A.
J, but that's what I've
quarter.
Okay. Thanks for that. And just finally, you guys have a strong development team to build Fekola, finish the Fekola expansion. With Gramalote delayed, is there any motivation to deploy your development team onto some type of an interim project?
Quarter. Well, I think that I think we have some areas within the company of things that we're working on, whether it be looking at expansion opportunities and other things like that where you might use some of the team or some of the senior team to input. But I we're We're not going to go and acquire something and build something because we have a tremendous construction team that we need to keep busy. That's just not the way to run this business in our opinion. Well, we have a great team and the team is I think this team has been together for so long or come back together is a better way to put it.
Quarter. So back in the beta days, Juliana, then Koopel, and then, of course, Kinross takeover, they some of the work for Kinross for a period of time. But as soon as they call to come back to the culture of B2 and the vast majority came back. So 2nd owned sort of rock band in a way where they take some time off and then they decided to do another tour and so the whole band gets back together or most of the band and they're able to attract other high quality people because of it. And I think they really do mutual respect here and trust.
Our construction guys are really feel valued in the company as they are quarter and they love doing stuff for us. So if we find the right opportunity in a situation of acquiring and deposit in November. Of course, we'd be looking at that, not to keep the team busy. I believe the team will be available when we're ready to go
Yes, I would like to add to that just a little bit. One thing that people don't realize, clearly, a lot of these guys in the construction realm are very good at all of the civil type stuff. And so some of these guys are deployed right now within at Fekola or maybe they're doing a quick project at Masvate, but they were actually working on the operational side. One of the key secrets is this whole core team like logistics team, the procurement team, the warehousing team. Those people sit down on a site and so right now they're at Fekola bringing up the next group, but we haven't lost them, right?
They're still there. Obviously, the exciting part of mine running is the construction aspect. So everybody wants to go on construction projects, but they understand if there's not a project that they'll sit down and wait for the next one.
Okay. Okay. Thanks so much, Aaron. Thanks for your time, guys.
Quarter. Thanks, Bill. Good explanation.
Your next question comes from the line of Lawson Winder from Bank of America. Your line is open.
One. Hi, good morning and good afternoon. Thank you for the update. Just question on, obviously, acknowledging the political risk management being a core competency for B2Gold. Could location of Gramalote and Keyaka feature into which you might ultimately prefer developing?
Sorry, can you just say that again?
Could the location of Keyaka and Gramalote factor into which of the 2 projects you might have a preference to develop first.
Yes, that's an interesting question. I think that I'll go first here, but I think that we think they're both in good locations in the country that they're in. Kakus in an area with significant mine operations and the relatively safer part of the country. In the sense of Gramalote, I think I touched on earlier, Anita, we're in Antioquia, a historic mining district. Local people understand that.
We've worked hard to show them what it would look like and what we're trying to do, a lot of support there and it's a great location within Colombia for sure. So I would say, I know somebody else can chime in here, Bill, whoever, but I don't know. I think they're both in attractive areas in the country. Quarter. So I don't know that one would be decided over the other on that basis.
So Bill, what do you think about that?
Yes. No, you're absolutely right, Clive. For sure. I mean, we just like the good projects. I will tell you, most of the guys, if I'm being honest from a construction standpoint, we've spent the last 3 or 4 years in West Africa building that project.
So they'd like a new venue and of course the fishing is much better in Colombia, so they do have a preference.
I think a few things are better.
Okay. That's a good one. Also on Kayaka, Clive, you mentioned in the past that It could be developed with a partner. Have there been any discussions in that direction?
No. I think the key thing, of course, now is question. Get the feasibility and see what it looks like. The alternatives have always been to bring a partner in, sell the asset if we don't think it's for us or we just don't want We don't take too much on. There's always an alternative.
So I think the key now is going to be getting the results of the feasibility study, see if it meets our criteria. If not, then there's somebody else interested in it potentially. All those options are still on the table, but it's hard to have those discussions until you really know the economics of the project.
Share. And if I might, can I just ask a question on the Meninikoto permit? Question. In terms of what's going on the ground there, has this 3rd party that now has a license already started exploring? And and follow-up to that, are you able to share with us who the 3rd party is just in terms of like are they a junior?
Are they a local company? Are they a major mining company? Call. Maybe you can't share
that, but it could be helpful. Yes. I think, obviously, we're in the process and have been for some weeks of having extensive conversations with the government. And we feel we've had some positive indicators from those discussions. It's a small Volley and Company.
In fact, you have not a history of mining construction expertise quarter financial strength. So at the end of the day, we just feel that I do want to point out, and I think I meant to say it earlier, but quarter. The history of Vale and gold mining, it's been a really good place to do business. I mean, I've said this many, many times. If you go back to our mine opening, not many years ago and listen to the speech of the President time.
It was tremendous and the government support was really great. We're in a mutual trust relationship. We delivered on the promises we made, which we this is what we try to do always. We're transparent with the government and very respectful, really good relationships. And I think they if you look at talk to Mark Ristel, I look at the Randgold experience and now the Barrick experience, he's argued for decades and he got it right.
He got there early and was contrarian and it paid off really well for the Randgold show. He says the same thing, but it's one of the better it's a really good company to work for with the government. They understand the importance of gold mining for their economy, hugely important never more than today when you look at COVID, etcetera. And they've always honored their loss. There aren't that many countries in the world where you actually have a mining convention as we do in Mali, but marks in your taxes for the duration of your project, the tax regime.
And back in the early days, Rangel had attractive tax deals. They were chippable in the industry at the time, but they had things like 5 year tax holidays, relative to low royalties, but the government never ever attempted to change tax structure in those mining conventions. And those mining conventions are backed up. And if you have issues, you end up in Paris to deal with them. So So the government has never gone there.
So and this new government, we've had success in working with this new government within the Ministry of Mines, the civil service there, who many of them are the same and getting things like permits for So this is one that we feel, as we said in the news release, we feel we have a right to the extension of the medical license. That's what should have happened and we're working with the government to really show our side of that story and that argument. We spent $27,000,000 there. And the really logical thing for menopolda for everyone, including the government that will own 20% of menopolda and owns 20 percent of Fekola,
the clear better thing for
the best thing for the people of we believe of Mali and our shareholders is and the government with their ownership is to see that Minnekoa or truck down to Fekola and we think we have a legal right to that license. So we will take we will working in cooperative with the government, respectfully, just to resolve this situation. But we will take the steps to defend our rights as required as we go through the process. So our hope is to resolve it through discussion and get back to work. We had scheduled at least $8,000,000 work in the Anaconda area, some of that's ongoing into the north of the Anaconda license, so we're still going.
But this is an important part of the potential to even further improve Fekola, but also is there another Fekola there? We see a lot of potential there. So Yes, the history of O'Malley has been very good and I've been very strong in my view of saying to shareholders and people don't, as my father used to say, all people that generalize are wrong, don't generalize about quarter or even West Africa, look at the situations and where they are. Mali has had a history of centuries of gold mining. They get it.
Governments have always gotten it. We're looking for this government to continue the tradition that the Malian governments have, which is arming the laws quarter and seeing the importance of gold mining and future gold mining investment in the country. So that's our position today. And
quarter. Okay. Thanks, Clive. And I just realized it's a quarter past the hour. So I had one more, but I'll try to ask it really quick.
I think this is for Mike. Basically, in January, you guys guidance of much higher H1 unit cost and Q1 came in well below the low end of what your guidance was. Is it fair then to expect a very material increase in, like all in sustaining costs in Q2? Call.
Well, on the operating side, we just we did better, right? If you look at the factors impacting quarter. There are better recoveries that we just didn't model, right? So expect that we'll keep those, the benefit of those as we run through. Quarter and then like lower improved capacity at Fekola for things like cyanide.
So again, we expect to keep the benefit of that. So I think some stuff will roll forward and quarter. You shouldn't just push it all in the second half of the year. The guidance we gave the second half of the year, we think, is still good. Quarter.
And then on the all in site, it was the benefit of those lower cost, higher production, which quarter. We think we'll need some benefit of that higher production as we roll through the year. And then some of it was that CapEx, it was just timing. So you will see that quarter. Well, we don't spend H1, we still expect to spend H2.
So on the CapEx side, yes, those costs will just roll over into the second half. Quarter. On the OpEx side, most of those benefits we should keep.
Okay. Thank you. Call. That's it for me guys. Thank you very much.
Thanks for your questions.
Your next question comes from the line of Carey Curry from Canaccord. Your line is open.
Hey, good morning, everyone. Maybe just one
more question on Gramalote. I think the all in sustaining costs were 15% higher than the PEA. How much of that is underlying cost inflation versus maybe just fewer ounces in the plan? Or question. Is there some other factors driving that change?
Would you
like to say Bill or Mike?
Quarter. So the all in sustaining cost will be up a little bit because of some inflation for sure, particularly related to, as I think I've mentioned, labor, power and fuel prices versus what the PFSPA had.
Is there any context maybe on like what the dollar per ton difference is or
Maybe I can dig that up, Brad. I don't have it right here at my fingertips.
Okay, fair enough. Thank you.
Question. Your next question comes from the line of Anita Soni from CIBC. Your line is open.
Question. Hey, good morning, guys. I love how Jalen sneaks in a question there. I only have one question left, and that's with regards to question. Graham Mulate, I know it's a broad question, but can you give me an idea of the timing, how long it takes for permits in Colombia?
I'm not as familiar with Colombia.
Yes. So as I said, there's kind of three levels, and we've had some pretty in-depth discussions with the government on these particular issues. And so you're kind of looking, as I said, for the insignificant ones. Those are on the fly. The minor ones might be kind of in that 3 to 4 month range for review and approval.
And I think it's 6 to 9 months on the majors from the time you submit.
Okay. And the last question, I know also very early stage, but as you think about a construction decision, what are you looking at for a construction timeline
one. Well, I'll just say, we were always talking in that 30 to 36 month range. I don't I can't think of any reason why that would change.
All right. Okay. Thank you very much.
Your next question comes from the line of Jared Hoover from Morgan Stanley. Your line is open.
Question. Good morning, guys. Thanks for the call. I know there have been a number of questions asked in Camelotty, but I just wanted to get 2 more in, please.
And it seems from a
lot of the commentary that the two main points that are going to result in potentially better economics on this project But if I look at the 2 pits, Monniers West and the Trinidad pits, it looks to me like those are lower grade pits. So if you have to bring it into life of mine, it seems like it would automatically increase your costs. So is it more a case of, question. Yes, you potentially bring that into life of mine, but it's more a case of you having to look at the recoveries around that project and that potentially enhancing the economics. If you could just chat to that, please.
And then my second question is just around your partner, AngloGold. Question. If for some reason it doesn't meet their particular hurdle rate and they were wanted to be sellers of the project, are there any mechanisms that would allow them to call in your agreement with them that could allow you to potentially be pick the project up, like, is it 4%, 50% or would
So the second part to your second question, where you were saying I didn't quite get that. Are you asking whether you think AGA would be amenable to us purchasing some of their interest in stages? Is that the question?
Question. And is there a mechanism for that?
Yes. Yes.
All is just a case of ending or a one off
Right. There's a mechanism yes, can you not answer the first one, but I'll answer that one maybe first or second part. Yes, there's a mechanism in the agreement where if you make a if you put forward development plan, has operator an ETA, has a limited period of time. I think it's 30 days to respond both parties to respond to deciding to fund that development plan quarter. Well, there's an mechanism whereby you can purchase the other 50% either party can based on fair market value, based on the feasibility study question that the development decision would be based on.
In addition, though, there is a provision that either party can go down to 30%. Quarter. It's a mechanism where they can go to 30%. If they want to stay involved, the project would not have the full 50%. So there is those mechanisms that we're both facing the agreement.
Bill, you want
to say first? Yes, sure. So you are correct that monos in Trinidad. Currently, their resources are lower grade. And I guess internally, at this point, we see those as potential out near the end of life of mine is kind of upside to extend the life of mine for sure and that really wouldn't do a lot for your NPV.
But what I was talking about when I was talking about drilling is we're talking within the Gramalote Ridge area, just outside of the existing design pit and even outside of that, in the measures indicated and inferred, we see some potential to increase the NPV and the IRR by bringing inferred ounces into the indicator, which of course then allows us to put them in the 43,101. And as far as the infrastructure, you're correct. That was the other issue.
Your final question comes from the line of Charles Rhyee, a shareholder. Your line is open.
Call. Thank you for taking the call. Much of what I was going to ask about has to do with the problem with Malaya Mali, I guess. So that's been answered. The only thing I would ask you to do is, I've been asking for a copy of your annual, quarter, what do you call it, your annual information form.
And the last thing I've got was shareholder relations. You put something in the mail to me week of April 6. I still haven't received it. So if you could just remind your shareholder people, I'm still waiting Okay. For the annual information form.
Okay. That's not good.
No, it isn't. Quarter. And I'm obviously following what's going on with in Mali because so much of the company's interests are there. But again, without the annual information, I'm kind of winging. I've got 40,000 shares,
which are very small compared
to the corporate people, but so small.
No, no, that's important. We pride ourselves in our transparency and delivering on what we promised. So obviously, something slipped through the cracks there. So It's very important, Charles. And you can send an e mail if you'd like to.
Ian McClain, I'm mcclainb2gold.com or to me, question. Cjohnsonb2gold.com, and I will get on it and make sure that you get that not in place via a mechanism that gets it to you quickly. Thanks for being here and thanks for your support as a shareholder.
Okay. Good luck to us
all. Question.
Thanks a lot. Thank you. Appreciate it.
There are no further questions. I now turn back over for closing comments.
Well, Well, I think we've thrown a lot of ground here and thank you for your time and your interest in some very good and interesting questions. We're really pleased with the quarter obviously and looking forward to another very good productive year, profitable production and lots of global exploration and development opportunities that we see. So question. Thanks everybody for your time. And obviously, if you have follow-up questions, you can reach out to Ian McClain to put you into the person you want to or if you know question.
So thanks for your time everybody and stay safe. Call. Thank you, operator.
That concludes today's conference call. You may now