Good evening, everybody. This is the conference operator. Welcome to B2Gold's first quarter 2025 financial results conference call. As a reminder, all participants are in listen-only mode, and the conference is being recorded. After the presentation, there will be an opportunity for analysts to ask questions. To join the question queue, you may press star then one on your telephone keypad. Should you need assistance during the conference call, you may signal an operator by pressing star then zero. I would now like to turn the conference over to Clive Johnson, President and CEO of B2Gold. Please go ahead.
Welcome, everyone. Today, we're here to talk primarily about the first quarter results. Then we're going to talk a little bit about the Goose construction update, a touch on where we're going with the Lonki project, and talk a little bit about some of the other developments and catalysts going forward for us. Nice to see a good first quarter. As everyone is aware, we had a difficult 2024, really primarily based on Fekola having to re-guide Fekola's production. That was due to a seed funding overload to an operations issue with equipment issues, so we pushed some of the better-grade production into this year. That's the first time we've had to re-guide, as we have eight years in a row without re-guiding. Obviously, we're disappointed having to do that. We protected, we recovered, we'll have a good 2025.
We started off with a pretty quarter with all of the lines performing well. I think it's worth pointing out that Fekola was the one that had issues in operations. The other two lines, West Bank and Otjikoto, did well, and the paragons, the guidance rights for those two lines. The issues were really about Fekola, which is where you're going to hear more about how they've been resolved. We've just received some positives in Mali from the government, including in terms of the MOU that we signed in September last year. Randall will speak to that. The report stepped forward. The Goose construction continues. Those are going to talk to them about that, and talk to them about how and when we're going to transition from the construction project into operations. We're in the final stages, so as you'll hear further clearance production in Goose.
I want to talk a little bit about catalysts going forward this year. There's a number of them. Obviously, the biggest one is the completion of construction to commence with the production at the Goose Project, but also Fekola. A priority there is we've heard one step yesterday from the government to promote the idea they were to continue to work with the government and get the permits required from the government to commence trucking work for the regional area. Now, that could add 180,000 oz per year on an annualized basis. So that's obviously a priority combined with the 300,000 oz from Goose. That's a pretty good growth profile. This year, there's a couple of important studies coming up. The feasibility study of Gramalote in Colombia will be completed by the end of June. There will be an opposition to announce that.
If it's as positive as we're hoping for, then we'd be moving towards a development decision not that long after, later on this year, to decide if we're going to go forward with starting to prepare for construction. We're at Gramalote. We already have a permit in place from the previous days at Gramalote. We've got some strong support there from local governments and also at the federal level. We're ahead of the curve there in terms of permitting requirements. In addition to that, we'll continue to review opportunities. They'll be focused primarily on exploration. We've got a CAD 64 million budget for this year corporately, and we've got half of that, CAD 32 million, focused on Back River. Take us here, CIBC, expectation to answer any questions you might have about on exploration.
The fact that half of our budget is focused on Back River gives you an indication of what we think will be exploring some new targets as well as doing some infill drilling. You can see how it's focused going forward. We're going to continue, if we have the opportunities, our trend of investing into the exploration companies. We're looking for companies that are well-run and have good assets that they are going to advance so we can access. We did in Snowline and a few others. We'll continue to be good shareholders, and at the end of the day, we'll see what comes out of those deals down the road. If anybody needs assistance in construction, on how to operate a mine, all those things that we've read, we're open to the possibilities of some of these deals that we mentioned too.
I think that's primarily what I wanted to. One additional point. We've had a lot of questions about M&A as I'm sure we're saying. Please don't surprise us. When we get a big warning, it seems like a big deal. We're not interested in, I think we can say virtually categorically, we're not interested in acquiring another development company or development project and taking over a company. That is because of the growth profile that we have, both obviously the Goose and the headline moving Fekola towards starting to truck more. We'll hear more about it. I think Gramalote feasibility study. If you were to add all that up, we use about 720,000 oz of annual new production with those three potentially giving us a strong profile. Clearly, our share prices don't reflect.
I don't think the production and other things are half the way up according to 15 or so mining analysts. The other big thing is we're going to touch on non-specific value or growth first. We need to rely on the value for our shareholders by advancing all of these development opportunities that we have. We're going to be open for questions after we hear from the heel of the bike, the heel of the band on the value bills on the line. Anyone else in the heel of the bills on the line? The fees for running the construction project at Goose. We're very happy with the quarter. We're happy operationally that we're back on track, and we're back on track to go to source of production.
Most of the newest companies have done very well since its inception, and that's the growth, in this case, from existing assets. That's going to be something to be the catalyst for the annual report. With that, I'll pass the notes tonight. The financial detail, we'll talk about what if from that point of view, then we're going to have an update from Bill in terms of operational, as we said. In some of the rolling out that was in the touch base. Maybe between the two of them, touch base on the development with the government, positive development with the government, moving towards permitting in Valley. Mike, over to you.
Thanks, Clive. Financially, it was a strong quarter. After adjusting for one-time items, the company generated the CAD 0.09 per share of adjusted earnings. In that, we benefited, obviously, from the strong average gold by sales price. Basic earnings per share were CAD 0.04 per share, and they included non-cash mark-to-market adjustments for the Goose gold stream that we inherited when we bought Sabina, and also from the zero-cost collars that we put in place at the end of last year in conjunction with Lee Hue and Arbor Volver. Operating cash flow before working capital adjustments for the quarter was CAD 244 million. Another strong result, and I think again highlights the cash generation potential of our operating assets in this strong gold price environment. On the CapEx side, spending in the Goose project remains in line with our latest budget during the quarter.
Construction mine development activity spent was CAD 136 million during the first quarter of 2025. I would comment, in late 2024 and early 2025, we accelerated approximately CAD 60 million in plant equipment purchases, including deposits from some longer lead items that were pulled forward from the second half of 2025 or subsequent years. Factoring these into account, including them from the total, Goose cash expenditures to first gold pour remained in line with budget. Balance sheet-wise, we continue to remain in a strong financial position. Cash and cash equivalents, CAD 330 million at the end of the first quarter. During the quarter, I think as we discussed in the last call, we repaid the outstanding balance in our revolving credit facility to proceed to the convertible note that we issued in January 2025. At the end of the quarter, we had CAD 800 million, so full capacity undrawn on our revolving credit facility.
With good financial flexibility to be able to complete the Goose construction very shortly, to fully repay the obligation under the gold prepays as we deliver into them over the course of a year from July 2025 to June 2026, and to complete other savings and growth initiatives across the portfolio, and to continue to fund very healthy exploration programs, which will hopefully extend mine life. That is the financial update. I guess the key points, and with that, I'll turn the call over to Bill for an operation and project update.
All right. I'll start out with probably what people are most interested in. At Goose, it was a very successful winter ice road season. We did start one month earlier than we have previously and completed one month earlier than expected, and that was based on the additional capital we put in last year in our new ice road building plan. It was a great result. Everything came up the road. That's 4,000 container units and almost 80 million liters of fuel. On the construction side, progress was significant in the first quarter. All activities are nearly complete and ready for first gold and subsequent ramp-up to commercial production in Q3. On the open pit mining side, mining of the Echo pit was recently completed and is now being set up to receive tailings.
When the mill turns on, the open pit mine of the Umwelt open pit will be mining and will be depositing tails in the echo. On the underground mining side, mining rates at Umwelt underground are hitting new records, and we're confident that the high-grade soap ore production, as in our current life of mine, will begin in the third quarter of this year. Looking at Mali, Mali had a strong start to the year, exceeded gold production expectations, had lower all-in sustaining costs than we anticipated. The mill feed grade over the course of the year, as we get through phase seven, was steadily increased, and we remain very confident in our 2025 production guidance. Of course, this will be highlighted by the contributions from the Fekola underground and if we get all our permits from Fekola regional later in 2025.
At Masbate, the operations continue to perform well. World-class safety record, I just want to call that out. They are now coming up on 2,300 days without an LTI. We anticipate another strong year of consistent production at Masbate with strong margins. At Otjikoto, the open pit and underground went very well in the first quarter, and currently, we are focused on advancing the Antelope deposit to a development decision in the third quarter of this year. Finally, and maybe not lastly, Gramalote, we are getting close to the finalization of the feasibility study. We want to release it over the next couple of months. With that, I will turn it back to you, Clive.
Okay. Thanks, Scott. Randall, can you update on the recent developments at Fekola Underground over the last couple of days?
Yeah, absolutely. As most of you know, we've been working with the government of Mali to follow the 2023 mining code on the Fekola regional project. A part of the MOU was that they finally allowed a company to consolidate a large land package, which we are using to combine the Menankoto, Bantako, and Bakolobi permits for the first time. The 2023 mining code now allows for a larger overall land area under one consolidated land package. We've been working with them since September on what has really been a novel process for them. It came through just yesterday where the capital administrators approved the decree to go ahead with that consolidated land package. What that does is really a catalyst for us to be able to now submit our application for exploitation permit, which will then just be one license currently named Menankoto.
It will be, and that will find its way into a new operating company. With that, application for exploitation permits should go in within the week. We are looking at the standard turnaround time, which has been around 30-60 days for us to be able to see an exploitation license. They have lived up to another obligation in the MOU, one of the more important ones for us. Now it is a matter of continuing to work with that government to show them and demonstrate the value that the Fekola regional will have for all stakeholders, them being a 35% holder in Fekola regional, and look towards later on this year of getting into production.
Okay. Thanks, Randall. So that's 35% under the 2023 code for the regional area. And obviously, we were the other 65% of that. I think that's a good summary of where we sit today. As we've discussed today, as we said, some of the catalysts moving forward, very happy with the first quarter, excited to continue that good performance for the rest of the year and significantly advance the catalysts that we've talked about today. You have got the entire executive team here, Vancouver, with the exception of Mills, Goose. I think with that, we'll open it up to any questions.
We will now begin the analyst question and answer session. To join the question queue, you may press star, then one on your telephone keypad. You'll hear a tone acknowledging your request. If you are using a speakerphone, please pick up your handset before pressing any keys. To withdraw your question, please press star, then two. We will pause for a moment as callers join the queue. Our first question comes from Francesco Costanzo from Scotiabank. Please go ahead.
Hi, good morning, guys. Thanks a lot for taking my question. This is Francesco calling on behalf of Ovais Habib. I just want to start with Goose, so maybe a question for Bill. Construction development is tracking to plan, and you've noted in the release that mining of the Echo pit and completion of the tailing slurry pipeline are some of the critical path items that are needed before first gold pour. Can you speak to any of the other critical path items to highlight ahead of first gold pour or before achieving commercial production that we should look for?
Yeah, obviously, everything's going to be happening all very rapidly now. We're currently in the process of commissioning the powerhouse, right? That's a key thing, obviously, for the mill. That is basically complete at this time. We have enough to run the mill. In the very near future, we're going to start commissioning through the mill, and then it's just working through the circuits, obviously trying to get ore in there and then producing gold by the end of Q2.
Okay, great. Then just on the capital budget, you have reiterated the CAD 1.54 billion budget with CAD 136 million spent in Q1, although the initial 2025 guidance published earlier in the year outlined a little bit more non-sustaining capital in the first half of 2025 than was implied by the total Goose budget. I am just wondering if you can clarify your expectation of sustaining and non-sustaining capital spending ahead of first gold, ahead of commercial production, and through the balance of the year.
In terms of the total CapEx, the items that we'd identified that we did expend some of this on sustaining CapEx that pulled forward, I mentioned this summary narration of CAD 60 million. Some of that was expended right at the end of 2024, with another component of it done in Q1 2025 and some of the things like powerhouse enhancements that we're planning for next year, actually, some of the deposits there. We've accelerated some equipment purchases from purchase of CAT 777 loaders and some Volvo trucks. Those are things that we had originally in the second half of 2025. We've also got some fuel on hand that we purchased for construction, so it's purchased, but hasn't been consumed yet.
You pull all those things together, you get something in the region of CAD 60 million plus that we think are really things that are either accelerated and will be consumed in Q2 or that are pulled forward from subsequent periods or years.
Okay. Thanks, Mike. And just my final question for Randall or whoever wants to take it. I mean, great to see progress, meaningful progress on the Fekola regional permit. I guess expected within the next 60 days or so. Just wanted to clarify, do you still expect to need around three months or so to prepare the site before we can actually see ore production start to come from Anaconda?
I'll leave that to Bill.
Yes, we do. There's three months of pre-stripping there.
Okay, great. Thanks for clarifying. That's all for my questions.
The next question comes from Anita Soni from CIBC World Markets. Please go ahead.
Good morning, Clive and team. I just had a question on the Gramalote study that's coming up soon. Could you just give us an idea of some of the, I guess, parameters that you'd be looking at? Obviously, we know you're looking for a smaller footprint at that asset, but just wondering what kind of gold price that you would be expecting to use in that study.
I'll give it over to Bill to tell you. I mean, we should talk a little bit about what was in the PEA before and previous studies. I think it's quite a lot of lines of PEA. We're hoping to meet similar or even improve upon that. That was, as you said, a smaller footprint, which is good from the updated permit point of view. Basically, looking at, because it's one order now, you're looking at a potential difference of 240,000 oz a year for the first five years of the development. There's a small deal by way. The call in the previous study of PEA was a bit misleading because it actually had some returning requirements for the piece of building, and there's a lot of engineering work that went into that PEA. A lot of work was happened since then.
We're on track with the piece of building study for the middle of the year. That's what we've got as we're on track to be able to release the rest of the studies.
Yeah, Clive, I don't mean to walk on you there, but you're absolutely right. The PEA is the absolute best reference for what we're looking at for the feasibility study. Everything is tracking very nicely against that. I'll leave it for Mike on what the gold price we're going to use.
Yeah, I think gold price, Anita, you'll see us look there's going to be some scenarios running there, but I think you'll see us look at consensus as a base just to see where we are. If you look at where CIBC's latest consensus came out, obviously, it's higher in the short term, but those would be Bill's years anyway. Then long term, you're looking at somewhere CAD 2,300-CAD 2,400. That's current consensus.
I think that Gramalote, potentially, if we have a positive study, we make a development decision to go forward. It gets slotted very nicely after Goose's retrospective profile, and as everyone's aware, we don't try and build two lives at the same time. Also, when you look at funding Gramalote, there's a number of sources of funding from existing cash flow we're generating from existing facilities we have, some access to premature debt facilities. Also, of course, this is not one that we would necessarily be afraid of hedging a bit of gold in terms of spending a fair amount of capital. The pre-PEA estimate was around CAD 800 million. There are numerous ways to finance that, numerous avenues to do that. Also, we would be looking at one option, which would be to perhaps protect the company and the project for the construction period.
That would be, I expect that would be a small percentage of our gold production as a company. I hope that answers your questions.
It does. And then just the last question on the timing was, as you mentioned, not wanting to build Goose or building too many things at the same time, but you're coming to the tail end of Goose now. Would it be right to think about Gramalote potentially coming on stream just at the end of the decade?
Bill, you want to touch a bit so that obviously we don't know.
Sure. Yeah. So Anita, really, it comes down to the feasibility study is really, remember, we're going to have to make some minor modifications because there is a construction permit to it right now. That construction permit has to be modified for whatever we've changed in the PEA. We're kind of estimating a 12 month-15 month period on that. Your answer is absolutely correct. It could be earlier if the government wants to play. You're right, kind of that 2028, 2029 is probably right.
Okay. That's it for my questions. Thank you.
Thanks.
Again, if you have a question, please press star, then one. Our next question comes from Carey MacRury from Canaccord Genuity. Please go ahead.
Hey, good morning, guys. Just another question on Goose. What kind of stockpile do you expect to have and grade ahead of the mill startup?
I can tell you that we've got significant stockpile already prepared from the open pit. I was just looking at it this morning. What I'll tell you for the mill, we're talking about as we start up, once we get kind of the low-grade stuff through, we're going to run at least 20,000 and maybe more, maybe as much as 35,000 tons at plus 10 grams through right away. We are looking good for meeting our projections. Certainly, this kind of 120 at this point, 120-130 is not really an issue. We can see that for sure in 2025.
We've got it in 120-130.
I'm sorry. I'm trying not to explain it. 120-150 is right.
Yeah. Okay. Just in terms of the ore mix with the underground coming on more so in Q3, I'm assuming most of the ore mix for the first half of the year is really the stockpiles and the open pit. Is that correct? What is the mix? Okay.
What is the mix between open pit and underground? I don't have that at my fingertips right now. Certainly, in 2025, a lot of the material is coming from the open pit.
Yeah. I have a comment on that, Bill. So, Carey, it's about 40% from the Echo open pit for the feed that we give through the year, 40% of material from the Umwelt open pit, and then about 20% of material from Umwelt underground is the mix throughout the balance of the year.
Okay. Great. Thanks, Mike.
The question comes from Ovais Habib from Scotiabank. Please go ahead.
Hi, Clive. And B2 team, sorry, got a bit delayed coming on the call. I just bounced in between some conference calls. Just a lot of questions have been answered, but just one question on maybe on the Otjikoto side. In terms of any sort of expansions on the Antelope side, you're looking to make a construction decision, I believe, in Q3 of this year. What's pending in terms of making that decision? A PEA was released. You need to do further studies or more drilling? Or can you give us a little bit more color on that?
Yeah. Thanks for raising it. We didn't really talk much in detail about that. I guess that will be a Bill answer.
Yeah. The only thing that's really kind of outstanding, Ovais, is the geotech. Overall, we have the mining method locked down. We're currently looking at what is the surface infrastructure layout, basic kind of supporting-type questions. Do we want to have extra facilities? We're right now going through third-party review of what we've done.
Okay. So you guys should be in a good position then just based on that for that construction decision in Q3 then.
100%.
Okay. Sounds good. Just, you may have already touched upon this during the call, so I apologize if I'm asking again. Just in terms of the permits on Mali, specifically on the Fekola Underground. Now, the Fekola Underground, from what I understand, is an amendment to your permit. Is that expected sooner than the regional? I mean, is that separate? Is that together now? From what I understand, the Malian government or the regulators had combined the two. Any color on that, please?
I'm passing over to Randall, but what you just really recall, we realize you've got a bunch of different calls to go back and forth on with the significant development of tourism moving the curtain north of the Gulf of Mali, just in the last day. We've already covered it, but we'll give you Ovais's highlight view of that and also the other government.
Yeah. Let me answer your first question. They are not connected, Ovais. I'm not sure where that one came from, but they are two distinct processes, the underground and the regional. We talk about them together in our press releases just because that's kind of the future and some of the catalysts at Fekola. Certainly, everything that needs to be submitted for the underground, the approvals, has been submitted, and that process is underway. We expect that we'll be up and producing early in the second half. I don't see any issues there with the underground. That one is well in hand. With the regional, we did receive the Council of Ministers' decree yesterday for the combination of the three permits, the three-permit area, which is 200+ square kilometers to the north, covering continuous north of the Medinandi, of the Fekola permit.
That really is the catalyst that allows us to now submit the exploitation application. It's been completed. It's translated. It's ready to go. We need a little bit of time to include all of the details that come out of that consolidated permit and flow those through the application. We expect kind of that the turnaround time has been historically about 30-60 days in this instance.
Perfect. Thanks for the color on that, Randall. Really good to hear on the progress on the permitting. That's it for me, guys, and thanks for taking my questions.
Absolutely.
The next question is a follow-up from Carey MacRury from Canaccord Genuity. Please go ahead.
Yeah. Just a question for Mike. Obviously, the balance sheet's in great shape. Just asking about the prepay, given that it'll be ramping up in Q3. Is there any thought of deferring that to later, or you're comfortable just settling in that in the quarter?
We can defer it. We could roll them if we want to. Our goal is not to. If you look at what the rationale for pulling in the convert, putting a bit of longer-term money on the balance sheet there to free up the line, we are going to use the line to help us maneuver through the prepay and to do some of these other capital, early-stage Antelope, whatever we might do at Gramalote, finishing Fekola regional, all those things. We are also going to use the line just to maneuver through. We set them up for a one-year delivery period so that they are done pretty quickly. We have got them. We use them. Goose will be built. Goose will be running. We will deliver into the prepay, and we are done with them behind us.
Tried to have a lecture meeting. So we can be closed.
Bill, the CAD 800 million is really available to us. Like I said, we'll use parts of that as we move forward and apply this to another piece.
Yeah. There's lots of room. I mean, gold things are eventually. We won't be touching them facility. But you don't plan and record gold prices all the time. You plan and manage and think. So we're in good shape to do it, Carey. That's the bottom line.
All right. Great. Thanks. Thanks, guys.
Again, if you have a question, please press star, then one. This concludes our question and answer session. I would like to turn the conference back over to Clive Johnson for any closing remarks.
Yeah. Thanks for looking through this conference. We can always follow up whenever there's any additional questions that occur to you after. Good quarter. Looking forward to the great developments in 2025. Thanks for getting on the call.
This brings to an end today's conference call. You may disconnect your lines. Thank you for participating, and have a pleasant day.