Good morning, ladies and gentlemen. Welcome to B2Goldcorp's Second Quarter And First Half Twenty Nineteen Financial Results Conference Call.
I would
now like to turn the call over to Mr. Clive Johnson, President and CEO. You may proceed, Mr. Johnson.
Thank you, operator. Thanks to all of you on the phone for, joining us. As you saw, it came out last night, our results from the financial results and operating and financial results for the second quarter of 2019, and we had some very strong results with record quarterly gold production. Of 246,000 ounces, which is 8% above budget. And we have some good beats in terms of our costs.
Etcetera. So another very strong order. I'm gonna have to hand it over shortly to invite the CFO to give you some detail on that, and then we will part of that, we'll be updating you based on what was initially some of the things you're working on. I guess I'll talk just a little bit on the front end about the strategy. Obviously, it's very nice to see the gold price, up substantially in the next to see our share price reflecting that.
And, of course, the the quarterly results, as well. I think really for us, the strategy going forward doesn't change a whole lot in the sense of with the colds being higher, colds difficult to stay higher. You know, we we try not to get too carried away when colds us up and we don't get too suicidal when the colds down. So at the end of the day, we'd like to try and keep it even peeled. This company was never built on the assumption that gold has to go higher, to make money or to or to see our shareholders benefit, and that's been a discipline at Vida and teach you both, and we will continue with that discipline.
But I think it's really one of the things that we're pleased about, of course, the South Wales strategy has worked for many years, and that is a disciplined acquisition of projects, accretive acquisitions and then responsible quality construction, and and operating up the mines in addition, of course, a tremendous exhibition success amount of nines and they actually have success in their own way. So now we're still focused on our pipeline. And, we're have a lot in the pipeline. And as we've said before, we we don't see ourselves chasing M and A, and I would suggest that with this movement of Bowface, if it's if the last We're gonna see other companies that the the Negroes that that didn't do the heavy lifting while we were doing it with building on Chicago and and, Fekola and other things. So, but we think it's gonna be more expensive to more biopsies.
We don't need the biopsies. We have a lot. We have a lot potential in the pipeline to realize more. So the pipeline very much is, of course, Fekola expansion, is, underway on schedule for temperature mapping impact on Fekola production starting to I think that looks like a very good strategic decision. Now, not only
of course, you're a clerical with no competition,
some 4 years ago, for half a $1,000,000,000, but then what we've done to instruction and exploration. A great job. We've done an operating of the mine. It's shown to be what we thought, a world class goal line. Stand the, of many companies out there.
But also the credit rating for decision was, a little outside the box was over a year and a half ago to to start a study to see that what would it cost to expand Fekola and doing ministry drilling. To facilitate in order to see if that expense was appropriate, while we record our 1st year, actually, still in construction and in our 1st year of Fekola. So that leaves us and it gives us this amazing opportunity to benefit from coal and seeing it based on the current projection is producing around 600,000 ounces starting next year. And averaging 500 plus for, for, for the 1st 5 years from now. The other, and the other thing is, of course, if we call it in the pipeline is all of this exploration we're we're doing there.
Tom's going to talk about that, looking to extend the size of the existing Fekola deposit, also other targets, including Anaconda area to the north, 20 kilometers to the north. We see huge insulation upside potential in Fekola and heavy area around Fekola. Another important thing, I guess, that's coming up in the in in the pipeline that's obviously customer intriguing if gold prices are stayed higher. That, of course, is Carmelata. We're meeting next week with AngloGold Chantee in part to discuss the next way forward of Gramalote.
We're supposed to get off today, whether it's in large, potentially open pitbull deposit in the the company that we've been working on for many, many years. In the last little while, I think about, you know, with a updated model. We always have to distinguish what the models through a theater model late last year, which certainly showed potentially much better economics for, Gramalote. There's a ton of work they've done. It's ready to go to feasibility.
Need to use some drill drilling because about 45 percent of it doesn't now turns out. It's the inferred category. So, the MPANX step forward will be to go and drill for about $29 total cost who dredge has been formed, drove revolting, and then, going to be some political property.
We think
it looks interesting in a 15 hour long hold. Clear vehicle is higher than that, and it's more interest. But beneath these voting study, and it's subject to infill drilling, but, we're looking forward to getting all of that. So that's another project that we own. We're on 300% of.
And, it becomes quite potentially quite an asset if the same field drilling, proves up I think that'd be in a year or so. We'll, for us, we'll have a view of how that might go drilling this step. Other things in the pipeline, you know, Kiaka, which is 4,000,000 ounce flow grade deposit, which we acquired. Some years ago, we, when we acquired it, it was a Jeep acquisition because it didn't need a higher gold price. In our view to the economic or exploration success.
We have an exploration success of some 50, 60 kilometers in Tonica, which doesn't perhaps directly impact the but we have been doing some exploration around yacking as well. And obviously, the gold price, they do make factors in yacking people gold price and power. So we're looking at things like solar power and other things in terms of power generation. And, of course, this hard roll base will make it interesting to look at as another potential asset on the pipeline. It might, in fact, have shots become a mine and a significant size mine.
So between that and all the other things we're doing in exploration, you can see once again why we're even probably even we're just as good as not to have an H state as we would have been for 4 years. Because of not getting value for assets, but now, of course, it's also, the argument now is what's in the pipeline. Said it many, many times, the cheapest balances are the ones you find. We have a tracker for defining the money that these great projects in the pipeline and lots of transmission coming up. Alright.
Focus as well as that's not, it's going to be a debt reduction. And obviously, we'll we'll just have a gold price with you, then we can dramatically accelerate our our debt reduction. We have a very low debt to issue one of the lowest in the sector already. Obviously, these kind of gold prices will help us peer to get that wrapped me. Am I talking a little bit more to that?
So that's the focus. Stay stay stay very focused on, responsible mining and running operations very well and look at the pipeline. We're going to talk, Mike's going to talk a little bit about Nicaragua. We need to do a caliber and we'll touch on that as well. Think it's a win win deal.
It's good for everyone. And we think they've been a good management team and that they can work with our people in Nicaragua and with our assistance and training the initial period of time can make those projects. They are training the corner and make those purchase more successful. So perhaps, you know, consolidate other opportunities in Nicaragua, perhaps you can get involved in that.
So that's our overall approach and strategy.
I'm gonna pass it over to Mike now to give, a rundown on the results and then, talking if there's a little talk on expiration. And, we will, we have, we have the entire executive team here. So we'll, jump in and, and invite you guys questions after that and, and, answer your questions. So we'll see you, Mike.
Thanks, Clive. Just before I start running through the results, just to comment on the the presentation that we have in the financials on the MD and A. Because we've announced the proposed sale of, Nicaragua operations that clearly bring. We've we've presented in the financial statements to Nicaragua and results as discontinued operations. It's showing as a one liner in the P and L, and there is one line items in the balance sheet.
So the the discussion of the results we'll focus on continuing operations, which is our remaining 3 core mines, Fekola Mestadino Chikoto, and then also on Nicaragua, the operations that we're proposing So with that, I'll move to the results. Firstly, on the revenue side, from continuing operations, revenues returned $67,000,000, and overall, including Nicaragua,000,000, and the increase there was, 25,000,000 was was based on an 8% increase announced So plus 2 percentage increase in the realized gold price. And also to complete the savings quite favorable experience, it's also on goal of 1500 dollars this morning that it's long lived continuing. Okay. On the operating side, I I think it's College mentioned that total production, including continuing a discontinued ops of 246,000 ounces.
That's a quarterly record for 2 goals. Very pleased to see us And it's really driven similar, consideration to previous quarters. It's outperformers by Nicolea. Is 10,000 ounces ahead of budget and 30, which is 4000 ounces ahead, energy code, which is 1000 ounces ahead. On on the Nicaragua side, overall, they were 2000 ounces ahead of budget.
Just to discuss that in a little more detail, Fekola, about a 114,000 ounce production in the quarter, 10,000 over budget. And that's really driven, again, by the higher throughput, 34% higher than budget. We actually put about 1,800,000 tons through the bill in this single quarter. And because of that, as we discussed in Q1, we made a deliberate decision to feed more of the low grade stockpile through the mill because the mill could consume it. And we've shown that we can do that without reducing recoveries.
The mill feed also included more of saprolite fire as an expected ore feed from the Permian crusher. So overall, because we touched on that low grade stockpile material through a grade was lower than budget, but, we had much higher production. Masbate was 58,000 ounces, 4000 ounces higher than budget. Higher throughput, 3% of our budget, and higher grade. Production in the quarter focused, on Main Main.
And also on budgeted backfill areas, Eric, that we didn't have in the in the mine plan, but we found that they they had decent grades and and we put it through the mill. Ojikoto 37,000 ounces, just 1000 ounces of budget basically in line, marginally higher through equipment recoveries there and slings being on budget. And to remind you as well, as we've said before, Otjikoto production this year is still significantly weighted to the second half of twenty nineteen as we get I agree. Material coming in the mic line now from Otjikoto phase 3 in Q in the 3rd quarter and then from Walshek phase 2 in the 4th quarter. And Nicaragua, a little 11,000 ounces, just one thousand miles forward, but just approximately in line, Santa Pancha underground, they didn't Nueva Underground development continued, plus we had rapid advancement of the Centrel open pit, which produced early in in Q2.
In in the back of the quarter. Then delivered to that slide, 26 West ounces, that's, 3000 ounces higher than budget due to higher grade. Just say it more, but we did we did some work in the first asset in the quarter where we caught up on some of the deferred stuff at the time line and performed, but that had that we haven't been able to complete at the end of last year. Also significantly positive for Libertide, we now have the Jabali Antenna open pit permit. We started development there, and 1st production is expected in October, early in the 4th quarter.
And and so overall, like the production production wise at at Nicaragua, we've turned the corner of this, but I said, both ops are performing well.
This is
Carmen in the cost side.
I'm going to, on the cash cost side, I'm going
to talk about cost based on ounces produced, words on the all in, said we're we're mandated to talk about it based on how to solve, but I I feel like it's easier to understand if we talk about cash cost in the end of this case. Overall, consulting and consulting for all operations. Are you still there? Sorry? No?
So cash balance enrolled consolidated $129 now. $3700 lower than budget, which is basically based on the higher production and most of the sites there. And so lower on budget total operating costs. They were a bit higher than the prior year quarter, which was $474 an ounce, and that due aiding to the deliberate decision to to to process the low grade Stockholm material at Fekola in this quarter. We did have budgeted and expected labor and refuel increases.
And then also we shouldn't forget that Fekola had an excellent startup quarter in our set up an initial run-in 2018. Monday were processing higher grade stockpile materials, and that stuff wasn't repeated this year as we get into steady state operations at Fekola. Overall in detail. Fekola is $367.33 less than budget, and That was due to the higher production as discussed earlier. Total cost of production were on budget.
And, basically, Things are running very nicely there. Miss Annie, $570 an ounce, $64 low in the budget. Cash operating costs were below budget, mainly due to the higher gold production and also lower the budget of mining costs. We experienced cost savings in a number of areas including drilling and blasting. So the backfill areas, which have been required blasting.
And we also had blast down spacing, which was an increase resulting in savings in in Joel Myers and and glass basins. Also, because we focused on concentrating on production in the main grain area, we also had lower, trucking costs and lower strip ratio. Kozhikoto was $554 an ounce 25 lower than budget. Again, due to slightly higher production, also a lower strip ratio than model at Wilshay. And just comment on the total from continuing operations, it was $5.29 per ounce consolidated.
All operations from the 3 containing operations based cash costs for the quarter for $456, which was each budget by just over 40 bucks. On the Nicaragua side, Lumo, $997 lower than budget. It was mainly lower budget due to greater activity in the Central State has been sort of advancing production near the Central. So it'd be faster than we'd anticipated. And that, as I said, was was offset a little bit by a catch up development at Santa Ranch underground, for some early time.
Libertad was $9.36 an ounce and slightly over budget. The higher cost per ounce mainly resulted from, processing higher cost of land rebalances. And they're also hired due to some higher mining staff related to budget and waste dumps moved at San Diego and San Juan as part of that development, catch up. But overall, if you comment as well, you know, the the the cost for for Nicaragua, and I'll almost look at them in a second, the online site, it's definitely more weighted to the first half of the year as we did some of that catch up activity. And now that we're getting into some of the better resources and we have Natalie coming online, and the loan central coming online.
We see the cost the the the 2nd half cross 12 bumper next arrival is definitely lower than the first half. And overall we're maintaining guidance for both operations. Finally, just to comment on all ends for the quarter and as I said, these are based on analysis. So $914 consolidated, $37 under budget, and mainly mirroring the the the reduction in cash cost is discussed earlier. And also there were some CapEx timing differences there.
We have seen lower pre strip. I I I spoke with the colon and Otjikoto lower than we had anticipated in some of them, some of those pre strip costs. There'll be timing differences of reversal. We think it's about 11,000,000 a a budgeted prescript year to date that won't reverse, but we'll see as a saving against budget. Individually, for call it 625 bucks
an ounce, 80 bucks lower than
budget, lower lower cash costs and also some of that pre ship costs. Which was partially offset by some higher mobile, fleet costs that had been budgeted for earlier quarter was caught up in this quarter. It's only $749 an ounce, over a $100 an ounce lower. The budget, again, reflects that lower cash operating cost and timing of of some land purchasing. Ocado, it was $174 an ounce, which is still under budget and and it didn't reflect effective.
We we had budgeted higher costs for Otjikoto in the first half of the year. Otjikoto is another one of our persons that that definitely has production later the second half, and that will impact this cost in the second half of the year. So the total from continuing operations, so those three mines would just $807, which was nearly $90 under budget. Now on the lower and Libertad site, overall Nicaragua operations were were $1589 all in for for the period which was higher than budget. And that was mainly due to, the timing of CapEx and some of that catch up CapEx timing.
And like I said, as we move forward, we expect to see a reduction in those, all in sustaining costs in the second half of the year. Maybe just a reminder, overall in production guidance, for the year. Fekola, we've got between 420,431,000 ounces. We we see a based on the on the excellent, production profile today, we see ourselves coming in at the high end of our guidance overall for the year. And, also, we don't we no longer see the significant waiting in in Fekola between half 1 and half 2 just based on the fact that we're already so far ahead of the game in in the first half.
Is that still guiding between 202110,000,000 tons a year primarily crushing for May Bank. Otjikoto, They do rate of 165 to 175. And like I say, that is weighted to the second half of the year in terms of production profile. And then, Lumon still maintaining guides 55 to 60,000 ounces weighted to the second half based on the timing of central or processing. And Libertad, 95,100,000 ounces, thanks for the year.
Game waves in 2nd half based on the the timing of process in Jabali Antenna. Open test underground or, sources. Overall, our guidance range contain as $9.35 to $9.75. We had originally guided that it would be, fairly significantly weighted to the second half of the year versus the first half due to the stripping activity in the first half. We're now seeing that we don't we don't see such a significant weight in the second half.
No. Just based on the outperformance in the first half of the year. And then also to comment if if the name wrong one, the sales does go through as we think early in in Q4, when will we be picking up 31% of those operations thereafter, but we still think if that happens today at the end of October, for example, that will still meet the lower end of our overall budgeted, guidance range. So in total, no no change to that overall range. And there was no change to the overall, forecast cash cost and all in sustaining cost guidance ranges.
Couple of comments on the on the income statements, just for your information, mainly on the taxes. I know sometimes, disconfusion as to what what the tax breakdown is particularly in Mali. So $24,000,000 in tax expense for the for the year or for the quarter. And that's made up of Fekola contacts of 13,000,000 Fekola, government's dividend, which is accounted for as a tax, 4,000,000 and withholding taxes of 2,000,000. And then we also have another 5,000,000 in there from Masbate.
And that's because Masbate is now fully taxable. No tax only there anymore. Remember, we did guide a 120,000,000 in cash tax payments for the year, including selling 2018 liabilities and also make in 2019 had tax installments, and we've got just under $60,000,000 of escrow for the balance of the year. On this income, for the period, 41,000,000, adjusted income was 52,000,000. So basic earnings per share, 0.04 dollars, adjusted earnings per share, 0.05 dollars, and year's date, basic earnings 68,000,000 or 7¢ a share, adjusted income, 89,000,000 or 9¢ a share.
I'm gonna comment also on a a few items on the cash flow statement. Firstly, on the on the operating cash flow side, we generated just under $92,000,000, for the quarter or $0.09 a share operating cash flow, 180,000,000 a year to date. We had guided at the start of the year that that based on a gold price of $1300 per ounce, we generate somewhere around 400,000,000 operating cash flow. Obviously, cash flows are significantly higher and a little higher gold price. And and we know, yourselves and then sort of around maybe around the 480,000,000 or closer to about 500,000,000 operating cash flow for the year.
And just to give you an idea, every $100 change in the gold price after royalty and taxes, translates to about $70,000,000 in additional operating cash flows
of for you was just seeing 1400 for 1400.
Yep. Looking at this just in the financing section, we did repay $25,000,000 on the revolver in the quarter, and we expect as we go through the year, those higher cash we pay more debt as we go through the year. On the investing activities section, business as usual at all the sites, like I say, we probably got about $1,000,000 in deferred strip that we expected to incur. Over the year to date, I'm wondering if we don't expect to incur now for the balance of the year. Just a reminder, there'll be various additions to CapEx that have gone through since the original budget results were predominantly to discuss them on prior calls and news releases.
So just to give you a reminder, those are made up of, mainly related to Fekola. So Fekola expansion was subsequently approved. We expect to be $50,000,000 in total for the the mill expansion 25 this year, 25 next year. For coal fleet, in total now, we think that the larger trucks, larger sized trucks, total anticipated fleet costs be $86,000,000, which $26,000,000 is expected to be incurred this year, including some pulling some other fleet forward from, 20 into 19. After solar plan also approved, we think it's gonna be the the largest off grid hybrid solar hit your toll plan in the world.
We think that will reduce processing cost by about 7% and be able to take up to 3 gens a better out of operations at any point in the day. The CapEx for that's $38,000,000, of which, 20,000,000 is budgeted for this year over the balance of 'eighteen and twenty twenty. In addition, we also increased Fekola's expiration budget by $3,000,000 earlier in the year. Just to fast track some more drilling than some of the targets that we've got there in Turfums and talk to you in a bit. So overall, we were able all that's being built into the budget are into the the reforecast cash flows for this year.
I'm pleased to say that, you know, with the increased operating cash flows that we have, And the the data's invited to production. It looks like we're able to absorb all those and more. And so forecast that we'll be able to pay up more debt as we go through the down of the year. And in addition, it's a glibri tilt, goes through as expected early in Q4. There should be another 40,000,000 in, cash proceeds, but the first tranche of cash proceeds will come in, in the 4th quarter.
So again, not a less as the billable cash and and our ability to pay down debt. And my problem is that it's based on, how we see 2020 unfolding right now on on our current mine plan. We'll update the mine plans later in the year, but based on current mine plan, particularly including the expanded Fekola operation book expanded fleet and so later in the year, the expanded mill, we expect significant cash flow generation actions, so we chose to be debt free and pay the revolver down. We think we could by year end. That's not, I don't know, 2020 as as the 13 or 1400 logo.
So the way we see it right now, we have $375,000,000 on the revolver, $1400 old. We certainly think we can pay that off. Over the balance of this year and the end of next year. I think those are the main items I wanted to talk about on the results. Okay.
Thanks, Mike. Just to look 1, the clarification of 1, to add to that, the $85,000,000 for the the large expanded fleet for the Coca Cola expansion would be, we were just defining that with equipment loans. So just that's definitely Okay. Yeah, I guess, we've asked Doctor Thomas to give us a overview of, which, you know, obviously with major exploration budgets, in the number of locations, the the biggest chunk of course being, of the colon and area around the call. So we can talk.
Well, thank you, Clive. As as Clive says, we've had a pretty major expiration by the this year for all our projects. But at this point, we build over 100,000 meters, in all our exploration projects. In Fekola, at this point, we drilled 3000 meters of diamond drilling in 100 holes, over 100 holes and 22,000 meters of RC drilling in over 200 holes. The focus of that has been in several areas.
Initially, it was to do the infill drilling on the PEA pit, and then we do exploration without funds on, Fekola and to the south of Fekola and also up in the snake's areas to the north end and to a new license we retired to the north of that. So just, we've completed the infill drilling on the PDA kit, but without changing the oil prices, it's forced us to look at going further down plunge as everybody has known or talked about several times, our $1400 resource pit that we came up with was really, although it was $1400, it was at the age of our data. So which really says, you know, we don't know where the $1400 has new vehicles. And so we started doing some infill drilling within that 1400 dollar pit, and now down plunge of that 1400 dollar pit. And realization still continues.
For example, we just hit a full, full 4, 4, 13. We had, almost four grams with our fifty nine meters at the bottom of our $100 pit. So at the edge of our current resource, and at the edge of the PEA pit, we hit some holes. We had, 6 grams over 20 meters, 4.5 grams over 24 meters. And we had, almost four times over 56 meters at the edge of the PEA.
So that that suggests that, you know, your body is still continuing strong at that edge and continues strong within the $1400 offering. So we'll be We'll continue to exploration further down plunge, John. We are studying, you know, we're talking internally about what our new gold price will be for reserve, but So we suggest that, you know, Fekola, although it's kinda one hell of a large ore body still continues, to the north end as potentially get larger again. In addition to that, we've started a, a satellite drilling, extending the satellite mineralization in the Atlantic Honda to the north of the tanker license, it was as we recently acquired. We did satellite mineralization over a kilometer North, the current resource with some very significant mineralization within five hundred meters of the current Amazon.
With that mineralization, we're now, doing not only the saprolite, RC drilling, bolster and diamond drilling, in the sulfide mineralization down plunge, which is the zones of separating mineralization of profit modeling, So in summary, you know, although we've expanded the pull on, and it sort of looks like a really big pit, it remains significantly open to the mark. And now with the satellite mineralization, we're seeing a large displaces of that mineralization beyond our current resource And, we'll continue with exploration throughout the year aggressively on those, in those two areas. And, we'll have results to release, and call me a month or 2 time.
Thanks, Ralph. Before we open for questions, just maybe a couple of comments. I do wanna just shout out to our Nicaragua employees. We had a tremendous group down there, led by Neil Creek. Was with it from the beginning.
And, just a tremendous, team of people who've done an excellent job over many years, you know, we really put Nicaragua on the map for more money, in a big way and it attracted lots of other people to go underground, including Calipers some years ago, it is they have experience in the country. Expiration perspective as well. But I just wanted to thank our employees and part of our, those, you know, and much we care about our people. All over the the Nicaragua deal was a really good fit for us because, and when you look at it, evaluate what we got or didn't get for, it opened up. We didn't sell it Oh, right.
We didn't look for something to get out of Nicaragua and sell the assets. We we did restructuring a deal with what our people, our legacy, to continue there. By combining it with Caliber, and they've had a very good strong executive team. Our management team and our employees stay in place, so their legacy continues. And you'll now have With the closing of the deal, Tyler, we're very focused on growing, with the Nicaragua, but I'm sure other things potentially in Central America, etcetera.
So the deals, was great talking about win win for us, but we were happy to beat there's no percent of shareholders of color. Are you seeing you to to, combine the caliber to see them before the the assets in the ground was not based on politics. This was not a decision based political activity. We are, we really are great believers in Nicaragua. It's people, wonderful people.
It's a great success. People forget that sometimes what's happening recently with some of the rhetoric coming from people that we were talking about. At the end of the day, Nicole has been a great success story, and it's been see what has transpired over the last year. We believe in the country as people know the future, and we believe that they will be successful. And part of the reason to recognize our people down there is just a remarkable job beginning of the last year, very difficult circumstances in keeping the minds running One thing that everyone in the crowd just seems to almost everyone in the crowd just seems to have a converse.
They want these lines to continue. So they want these shots to continue. These are some of the best paying jobs in the country. We're very safe, modest, responsible, environmentally into huge social programs that have a great benefit. Drug has been good for us and we've been very good for Nicaragua.
And that continues. If that's expected, the deal closes, it continues for legacy with Caliber and our people and also going forward with their help and along the way in
a way that we can.
I think now we'll, we'll put it up, for any questions that you might have.
Jordy Mark with Haywood Securities. Your line is open.
Yeah. Good morning afternoon, guys. Have a great quarter. And thanks for hosting the call today. Just one question in several parts, I guess.
On Well, I guess the the main cause is for Cola. So let's let's start there. Obviously, doing very well through plant, at 7.3 the in turn run rate for the for the quarter. Can you give us an idea given that you're sort of going above the original name played using using that capacity, you know, we're available to to put in stockpiles. Hey, how you foresee the sort of balance of 9 tons in H2 versus stockpile?
Or how many, for another way, how many how many tons are coming from from the, from being mined in H2? In in the in the current plan.
Ready? Is
it either ready?
Yeah. Maybe
I'll take a shot.
Yeah. So so, Jorne, we we see, I mean, certainly, it's not just the second half of twenty nineteen we gotta compare. As we build up our stockpiles and outlook at what we're doing in 2020 as well, you know, as we put out the PDA with some pretty aggressive numbers, if you want to
make sure that that we don't that we don't
move too many ounces out of our high grade and medium grade stockpiles that we would have in 2020. So I think you'll the short answer is we're managing it to be kind of what the first half looks like.
Okay. Great. And and I guess, ultimately, the, I guess, the the performance well above, I get a nominal nameplate. Could be expected, concurrent with the, up rate to 7a half. You'd expect 7a half could be 8 and a half to 9 in the right conditions.
Well,
do you guys wanna talk about the softer rock and the rock's gonna get harder? So the the higher throughput now is, is the result of the, the satellite that's in the mill feed as well as the rock that's, from the low grade that we're processing through the mill. So, with all fresh rock coming in the future of higher grade, those hired. We wouldn't have a giant throughputs now. We had to hire great fresh rocks.
So,
and that's what the, the expansion is designed to to process and buy a great part of Rock.
Yeah. And maybe just to add something to that, Jordy, one of the things that we're looking at right now don't forget with this expansion we've got a tie in. And tie in obviously means shut down time. So when you're talking about $7,500,000 or $8,000,000 or $9,000,000 over the course of 2020, you better factor in, certainly, we're going to have quarters where we're knocking the over index will be will be shut down for our guidance.
Yep. Okay. Great. Well, thanks for that. And maybe just some some housekeeping on the, living had, I see you obviously haven't really internal mining activities have started there, and expecting or, I guess, from September onwards.
Can you give us an idea kind of great distribution, q3, q4, and perhaps expectations on on CapEx there in the current plane.
Yes, I can respond to that. I agree. CapEx really the major items in CapEx have been taken care of in the front end of the year. That was the land acquisition and, down construction. So we're expecting CapEx to sell off the back half of the year.
And in terms of rate projections coming out of heavily, expecting it to run, just under programs for funds and, contribution to the, Milpied would be in the 10% to 15% range. So a bunch is above the trade off rate. And our advance, production will, really depend how much. Halifax we are in operating. So that's our starting point.
That's our plan.
Fabulous. Thanks. And maybe one last one, if I can, for Tom, or anyone else, I guess. In terms of drilling at Fekola has been done very well, in terms of the Hypergene at depth. Obviously, that's done well.
It looks like you've doubled your budget there to have another $3,000,000. I guess that that bodes well in terms of some success on grade. And you're quoting Fekola style mineralization there, but from memory. The other target, Cardinal is is something different again?
Yeah. Cardinal is something different again. We don't have a lot of drilling on now we just have to be seen getting tied up everywhere else. But cargo seems to be, quite a bit tighter than, Fekola. So I don't expect if the goal of target at Cardinal, I might expect that that may be something small, but at one point in the future,
they'll carve out there's a time for a reason.
Craig was only less than less than 500 meters from the kid.
Okay. Great. Thank you for answering that question.
Lawson Winder with Merrill Lynch. Your line is open.
Great. Thanks for taking the question. Guys. I I actually just wanted to look at the Masbate. I mean, it's it's, an asset that certainly seems hard to sort of pin down, which I mean, is actually good because it's always surprising to the upside.
But maybe just a couple of questions on what the second half looks like and So in your original budget, you, or your guidance, you said 69.7% would be the average recovery for the year. Mazadi. And, so based on that, that would imply that the budget for H2 would be something over 80 per sense. Is that correct? And if so, what's kind of driving that expectation?
Thanks.
Yes, the original budget content had a significant Montana component, which is high recovery. The gun will depend on the arrival of that component and our recoveries protected through the back half of the year. Will run, between 59%, 70% in Q3, up to 80% unpaid percent in the fourth quarter. So it's likely below our original projections.
Okay, that's great. And then you also spoke about the Montana pit expansion. Are you able to give us an idea of, how many ounces we're talking about there and at what grade? And then are you looking to publish an updated technical
report on that?
Nope.
I'll have to get back and get another quick charge to check here.
Oh, okay. No problem.
I got some other questions on Masati as well. Just, on the oxide, I mean, it it's always surprising to the upside in terms of the percent of oxide. So, I mean, I guess, first off, Your budget for the 1st half was 1%. In terms of oxide, what is the budget for the 2nd half in terms of the oxide percentage? And then, and then maybe you just speak to your understanding as to what's kind of driving that that huge variation in the percent oxide versus the budget.
And particularly if the, the previously mined out areas have anything to do with that.
Hey, Martin. It's, has a lot to do
with our current mining choices. I'm anticipating through, Q3 will run about 20% off-site in our most recent forecast, but that declines to, above 2% in the final quarter of the year. Really, the blending, the original blending strategy through Q3, Q4, as, while we developed our budget, included a a nice blend of, low grade, or coming from stockpiles and high recovery materials coming from Bing Bay and Montana. So that blend in our forecast is trending slightly, and that's why you see the difference heading towards more oxide. And less price work in order not to make a point.
So from the history of that, the overall auction history, Tom, Brian, if somebody from Jones, you wanna talk about what you want, please? What do you think we're seeing so much locks at the store if you really thought you would?
I'll give her give her a shot. Do you think we've been studying this a lot? I mean, couple of things. First of all, that that's sulfide material or the the stockpiles. Most of those stockpiles are getting off-site.
They're sitting out there between 10 30 years with salt, saltwater re incoming on them. So they've had some oxidation themselves. So there's a bit of a surprise, positive surprise in the stockpiles. Second, you know, and I'm I'm guessing a little bit, but, you know, we have looked at this a lot. The the the interpretation of sulfa within the rocks is largely based on RC drilling, rather than some diamond drilling.
And what happens with RC drilling, The mineralization itself, which occurs in veins and crackers, is getting oxidized, but they're quite narrow and hard to see when you drill RC drilling, across the the alteration halo around these veins have a lot of sulfide for them, and they don't get oxidized. So I think there's a little bit of misclassification going on. I don't know how much, and we really can't unless we redrill the whole thing with diamond drilling, we really can't change our vision of our models. So I think we can expect some positive changes, but I wouldn't put too much on it. I think the bigger change is is a lot of stockpiles were classified as sulfide.
And I think they're being oxidized.
Probably in the previous owner, the they didn't spend as much time in differentiating. Is is that right between the government? We we
certainly spend it a lot more than they have for sure. So
that's part of why there's more it would further analysis. There is one option I have to pay in file. Yes.
Okay. That's that's great. That's a very helpful explanation. And then just on the on the backfilled prior workings in the main vein, I mean, obviously, you had expected to encounter those, but have they ever been drilled out? And, like, to to what extent can you expect that to continue where you're actually getting grades worth processing out of those old workings?
Again, the same thing applies that we talk about with the oxidation state. You know, you go drill a a great chunk of your body with RC as as what has done here may be. It's very difficult to pick out all the workings. So there there's going to be some conservatism applied to the modeling of the workings certainly when you're drilling RC and you go through a pit that's, a opening that's been backfilled with, with rock and, in a bit of paste, you don't really pick it out in RCO. So I think what's happened is we've had we've been conservative in our modeling of some of these workings is turning out to our benefit.
I'd say it's something to do that and have the office have happened.
Lumberation of conservative forecasting and our recovery issues going through backlogs are to recover an asset.
I can send you
a Montana question as well. Montana's got about 225,000 ounces at about 2 grams.
What period of time would that be like?
Over 2 years approximately. Yeah. We see it, holding in at about 12% of our are healthy. The grades in the coming 6 to 8 months were ranging from 1.4 to just over 2 grams per ton, active recovery. I would
invite you to reach out to the guys for any more detailed technical questions. Maybe other people in the queue that want to ask questions as well. So thanks for your good questions and your interest.
Yeah. No problem. Thank you
Your next question comes from Chris Thompson with PI Financial. Your line is open.
Yeah, good morning guys. Congratulations on a great quarter again. Three quick questions. Just a point of clarification, I guess the discussions are from the previous caller on Masbate. So what I'm hearing here is that you're you're planning on pushing more oxide through the plant towards the back end of this year.
To increase the recovery. Is that right?
No. We will be sending more low grade through the flat non oxide in the back end of the year final quarter.
Okay. And then I think
you were mentioning close to 80% in the 4th quarters. Is that right?
No. Closer to 2% in the 4th quarter, approximately 20% oxide in the 3rd quarter.
Sorry. But recovery is 80%. The road, I'm just looking at the recoveries, what we should be modeling, I guess, in the 4th quarter?
Yeah. Recovery 3rd quarter, sits around 70%, eighty percent in the 5th quarter of the year.
Thank you very much. Thank you. Just moving on to Eduardo quickly. Obviously, you've been guiding for a stronger second half. I guess, grade driven, I would imagine, the Phase 2 Wolfshag.
Can you give us a sense of the sort of, the head grade profiles should be putting in our model for this?
Yeah. I'll look it up a lot. Yeah. May maybe Chris call me outside this call, and I'll let you know.
Yep. Fine. Sorry. Sorry for asking the details here. Final question, guys.
Obviously, for Cola, fantastic performance from the asset here. I think you mentioned earlier on that you're going to be managing the second half tons, ah, mill tons, very much like what we saw in the first half of this year. Would the same be for the for the head grade as well?
Yeah. I think you could I think you could assume that once again, we are managing the hit grade as well. And so what we're really trying to do is target announced profile as opposed to a grade for it to come through. But
Got it, guys. Alright. Thanks. Good quarter. Thank you.
Thanks. Thank you.
Carrie McCurry with Canaccord Genuity. Your line is open.
Hi. Good morning, guys. Just had a question on Anaconda. It looks like you pushed out the scoping study as you're you're continuing to drill there. Just wondering from what you're seeing there, are you still contemplating a stand alone operation, or is it still potentially that we mix in with the, difficult and ill And then finally, do you anticipate, I was wondering about the timeline in terms of, you know, coming up with for releasing details around the plan around Endecost.
Tom, yes. I mean, Tom, do you wanna talk to? I mean, you just mentioned hoping to the north and we're getting to pursue good results there. So getting bigger, of course, makes us stand a little more trusting to get us with that judgment. Yeah.
It gets bigger and,
and, and some of the things
saying separate right now. It's a bit higher grade, which is the the
real hit on this thing for making
a standalone saprolite plant, Well, we're we're, we're just kinda waiting and seeing a bit right now on the Comcast. We're just really getting into the, drilling this thing up further to the north. I'd like to give a little more definition on what we really think we've got there for 2 things. Saprolite, the saprolite cell both tons and grade. I mean, how big can the same get and what is the grade really?
As soon as we have a better understanding of that, we'll drop it into our our models and we'll we'll take another look at there and how that plant looks. And and is there, is there a hard rock component of this thing of of north that we need to consider also? So when
we build a different style of plants. So,
all the success, with, with the success, the exploration guys are having comes a whole new list of questions for us. You did talk a little. You mentioned about when you're gonna be going below, miss Safeway?
Yeah. So I think Dennis's point is a really good point, in terms of timing of knowing things. I mean, the satellite is getting bigger, so we're spending the satellite. And we have started we actually had a first, you know, whole number 1, wanting to to remember some by hearted at the north end of it. So we're still early stages on the sulfide targets, but, initially, we had several targets in the sulfide.
We had one of the adder Anaconda. We had 2 in Mamba and
now we're doing one of
our best sulfide targets in Lambda, and below this athletic. To to talk about timing on when we would know what we have there, you know, even catch this as good as mine. And phone number 1, Turns out, a monster intersection. And, we'll hit it really, really aggressively. And if it's hole number 50, well, we'll be working at it for a while.
So I it won't be all 50, but that would be my best. But, that is early stage expiration. So your guess is as good as mine as when we'll have a feasibility on it. But I think in some of it, I think what Dennis says and John said yesterday is, is, you know, let's find out what we have there in the sulfide before you decide what plan you want to build there.
So it could be potentially a standalone if the satellite continues to bigger and the grade looks like there are additional areas that I think got a grade. But then again, it may be the applicant's mind in a bigger mill. If it's on top of another, you know, large deposit in the state of the sulfides. Can I answer the basic question?
So the other question, second half
of your q3 grape through
the mail, 1.73 grams, q4 is 2 grams for 10.
So just to follow-up on any kind of conduct, based on the drilling today,
do you think you'll be in
a position to at least expand the resource at the end of the year?
I don't think so.
Yep.
And, just because we haven't found the edges yet. So here's, you know, August already, unless we find edges, I don't know how we'll have a new resource by the end of the year.
Oh, we might be able to do an updated resource at some point in the next year or so. And even if it's still open, we can be pulled up for
we'll, you know, maybe sometime next year we'll get it come up with a new resource.
There are no further questions at this time. I would now like to turn the call back over to Mr. Clive Johnson for final remarks.
Hey, thank you, Will, for getting on the call and for your interest. And I said, yeah, for the follow-up questions, reach out to through Ian to, to get you in talking to the right person here. You know, I think we're obviously very pleased with the results that we've seen for the quarter. Again, and, you know, I think based on our successful growth strategy over 10 years, you know, remember we had double production 10 years ago, but based on the successful growth strategy to perhaps look on trade, and I really do believe we're almost, if not uniquely positioned to, you know, to continue to generate strong cash flow operations, but also to continue as a real growth engine by focusing on what we have in the pipeline. So we were going to change lots of cash flow.
We were looking good on a cash flow point of $1300 hold and then debt repayment obviously will be higher that makes even better. Our long term goal, maybe not too long term anymore, is to continue to be a responsible producer but also helps to continue to grow. A lot of that from existing assets is through the drill bit. But also ultimately, we'd like to be a company that takes a portion of our cash regenerated and used it to grow the company's production further. But also I wanted to look at that dividend strategy, in the future.
I can't tell you what gold price would have to be first to proceed with this with the dividend and
when yet, but we're gonna
be looking at that. And that's part of our our goal as a company. We think it'll have to be a very attractive company for lots of investors, generalists, and bold investors to look at a company that's will cost profitable. Moved out, can grow from assisting assets and then, and then drill bit based on our externally track record of what we've accomplished so far, but also become a dividend paying company as well. Once again, thank you all for for your interest.
And, we'll look forward to talking to you soon.
Have a good day.
This concludes B2Goldcorp's second quarter and first half twenty nineteen financial results conference call. Thank you for your participation. You may now disconnect.