Good afternoon, ladies and gentlemen, and welcome to the B2Gold Corporation's fourth quarter and full year 2018 financial results conference call. I'd now like to turn the call over to Mr. Clive Johnson, President and CEO. You may proceed, Mr. Johnson.
Thank you, operator. Welcome, everyone. Thanks for joining us to talk about the year-end results for 2018, and the fourth quarter. We had a tremendous year in 2018, a little disappointing today to see some of the comments that focus on the fourth quarter. We did extremely well on the year and then did very well for three quarters. The fourth quarter probably shouldn't have been a complete surprise, perhaps. Maybe we have to do things like update models every once in a while to get accuracy. At the end of the day, let's talk about the positives. We will talk about the fourth quarter as well.
In terms of looking at our 2018 year, we've had a great couple of months here to start 2019 in terms of performance, but also in terms of marketing and talking to a lot of our shareholders at Indaba and BMO and PDAC. I think we had a tremendous board of directors meeting yesterday where I can say that a lot of our shareholders are very happy with the performance of the company in 2018, as has our board of directors. They seem able to see the forest, not just one tree. When you look at 2018 and see what we actually accomplished in that year, it was really quite transformative and a remarkable year, and I guess it's worth reminding people when we use words like miss in analyst headlines, that triggers algorithms, which is a disservice to both your clients, the company, and the shareholders.
In 2018, a few of the things we did was increase our gold production by 51% to 950,000 ounces. We almost doubled revenue. We did double revenue to $1.2 billion in 2018. We almost tripled our cash from operations from $155 million in 2017 to $450 million in 2018. We also repaid $220 million of debt, bringing our debt down to $480 million, which gives us one of the lowest debt-to-EBITDA ratios in the mining space. We also, because we continued to drill Fekola while we're building it, which is a bit unusual in our space, we were able to come up with a new resource in October that dramatically increased the size of the Fekola resource to 5.7 million ounces indicated and 1.3 million ounces of inferred open, and that's still going. We'll talk about 2019 in a little bit.
We also, because of the way we fast-track things here, we were able to also complete an internal initial Fekola expansion study by the end of the year, which we are now optimizing. We'll release by the end of this month. It looks like it has very robust economics and pretty much a no-brainer that we'll go ahead and expand Fekola, we'll be talking about that. Overall, a tremendous year, and it was nice to see it starting to get reflected in the marketplace it did in the fourth quarter and into the first quarter as we outperformed the gold index and many of our competitors. I think I'll leave it there. I'm going to pass it on to Mike to give you a little more detail on some of our numbers.
He will talk about the fourth quarter and also the year, then we're going to talk a little bit about operations. Also, we'll talk about what we're doing in 2019 and our strategy beyond that. Mike?
Hey, thanks, Clive. I'm going to take a walk through, I guess, the quarterly and year-to-date statements that are attached to the back of the press release. Firstly, just touching revenues for the fourth quarter, $272 million, almost $100 million higher than prior year quarter. Of course, that is mainly due to having Fekola on and running full steam with commercial production for a full quarter in Q4 2018. It came online, as you recall, commercial production started December last year. On the production side, very close to budget. Consolidated basis, 232,000 ounces against a budget of 237,000. It's really the same story that we saw in the first three quarters. Fekola continued to bring it, 105,000 ounces against a budget of 91,000. Fekola continues to have higher throughput. I think Bill can talk to that a little bit later on.
Higher recoveries, 94% against a budget of under 93%. Slightly lower grade because we have higher throughput going through the mill. We were sourcing some of that extra material over budget from lower grade stockpiles, that's why we get slightly lower grade overall. In total, Fekola just continued to outperform. Otjikoto, 45,000 ounces, almost on budget of 47,000. Masbate, 52,000 ounces. That's 6,000 ounces higher than budget. In Masbate, even though we mined out Colorado vein at the end of Q3, we had some material in stockpile there, we continued to see the benefit of that. Just more ore than we had originally anticipated and more oxide content, which improved our recoveries there. Offsetting those positives were Libertad and Limon continued to underperform in the fourth quarter.
Libertad, the main reason in Q4 is that we didn't get into the Jabali Antenna open pit area as we budgeted. We have been chasing that permit for a while, and pleased to say that we have made some very positive developments there. We've been out to public consultation now, and that process is completed, and now we're confident that we'll see the permit for Jabali Antenna being granted in time for us to bring it into the mine plan for the second half of 2019, which is what we budgeted. Limon, 12,000 ounces against a budget of 15,000, so 3,000 under. Limon continued to be impacted, just a knock-on effect from some of those blockades that were in the country earlier in the year. The impact of some of the supplies and getting the permits impacted Limon's production as it went into Q4.
By the end of the quarter, Limon's up and running as we anticipated, so it's come sort of back to steady state. Again, I think Bill or Dale can talk a little bit more about the impact of Limon Central on 2019 and beyond as we look forward. If you take that and you translate it into cash costs, the consolidated cash costs for the quarter were $523, just almost exactly on budget of $519 per ounce. Same outperformance with Fekola, $386 an ounce, almost $30 lower than budget, again, just due to that higher production in the period. Otjikoto, $471 an ounce, which was a little above budget, and that's mainly due to higher than budgeted fuel and explosive and tire costs in Q4.
Overall, when we talk about Otjikoto for the year, you'll see that we were right on track in terms of our guidance there, but slightly higher in Q4. Masbate, $594 an ounce. That was almost $50 lower than budget, and it just continues to benefit from that higher production. It had higher production with operating costs, which were pretty much flat compared to budget. The benefit of that is lower cost per ounce. Libertad and Limon were both over budget, and that's a function of them underperforming on the production side for the period. On the all-in sustaining cost side, consolidated for the period was $814 against the budget of $752. I think you've got to remember there that we were under or we were pretty much on budget, sorry, consolidated basis for operating cash costs.
The remainder of that difference really is timing and CapEx. Some of the CapEx that we hadn't incurred earlier in the year, we incurred in Q4. So when that all rolls through, we were slightly over budget for the quarter, but again, I'll talk to the year performance for the year, and you'll see we actually beat our all-in sustaining cost guidance. That's the ops for the quarter. Just walking through the statement of operations to highlight a few other things. G&A costs for the quarter were about $2 million higher than last year, and that's mainly salaries, just higher staff costs across the organization, a little bit of bonus, and then just some additional bodies through the whole organization, especially with Fekola now being online fully for the full year.
We did have an impairment loss on $34 million, a charge that we took in the quarter. That relates to Nicaragua, Libertad. We did take a smaller impairment earlier in the year for Libertad and once we completed the budgets for the year-end, and also were able to assess the impact of that delay in getting into Jabali on time, we flowed that through in a new mine plan and we took a further impairment of $34 million. We got just under $9 million as well for some write-offs of some exploration properties that related to both Nicaragua and Namibia. Further down the income statement, just talk a little bit about realized gains and losses on derivatives. We had realized gains of just over $1 million. That's fuel gains of $3 million realized for the quarter, offset by some Namibian gold forward losses of $2 million.
Those Namibian gold forwards have all been delivered into now, so we won't be seeing those again. They related to an older version of our revolving credit facility. On the unrealized losses, we had $13 million, and that is mainly on outstanding fuel contracts. That's really just a reversal of previous gains that we've booked. Those fuel contracts are pretty flat overall. The current mark-to-market are pretty close to the current pricing that we have on those contracts is pretty close to the current forward price. They're pretty flat overall, but some of the gains that we picked up over the course of the last 18 months reversed out of Q4 as the fuel prices fell. The other thing I commented on are taxes, mainly current.
Just a reminder, I know there was a little bit of confusion for some people as to the amount of taxes, what's in them, and what the cash payment timing of those taxes are. Firstly, on the current income taxes, $20 million for the period, mainly Fekola. $11 million is current income taxes for Fekola, but remember that we're also treating that priority dividend for Fekola as a tax because it's a payment that's due to government, and it's a right that's conveyed by law. It's similar in nature to a tax, so that's how we account for it. That's $3 million. Just for your models, just remind you to build that into your tax expense as you look forward. Masbate also had $3 million current taxes in the period.
Remember, Masbate wasn't a tax until the middle of last year but is now taxable. Also in Nicaragua, there's $1 million of current taxes there, even though we didn't generate taxable income per se in the country during the quarter. There are alternate minimum taxes that must be paid. There's always a small component of Nicaragua in the current taxes. I'd ask you as well, you can ask questions later, but in the MD&A, we also laid out what the components of the tax charge are and what our expected payment timing is for cash taxes for 2019. Remember that Fekola, it's our first full year commercial production for Fekola, and most of those taxes are only accrued during the year but won't be paid until the end of the first quarter, start of second quarter 2019.
In addition, we'll have to pay our 2019 cash tax installments. We've laid it out in the MD&A. The accrued taxes at year-end 2018 were $67 million, most of which will get paid at the end of Q1, start of Q2. In addition, our cash tax installments for 2019. Above and beyond paying off those accruals will be about $65 million. Hopefully, that helps you with your models, and if you've got any questions, please ask them later. Overall, factor in some of those numbers, we came in with net loss for the period of just under $50 million. Once you adjust out the significant non-cash items, adjusted earnings of $13.6 million or $0.01 per share adjusted EPS. I think consensus was $0.02 per share. Remind you that, as I said, Nicaragua underperformed a bit in the quarter, so we saw some of that impact earnings.
We had budgeted slightly higher cash costs per ounce for Q4 than for earlier in the year. That would have impacted some people's view of earnings. Just remind you as well that those Fekola priority dividends are included in taxes and hit the income statement. They were $3 million for the period. Just to comment maybe on performance year to date. First, on the revenue side, the reported revenues of just over $1.2 billion were almost double the reported revenues last year, I think Clive mentioned that already. On the outside, I think we had great performance there, 953,000 ounces, so 26,000 ounces higher than our budget. It came in above our original guidance of 910,000 to 950,000 ounces and still at the high end of our re-guided range of 920,000 to 960,000 ounces. The standard performance in there, Fekola, 439,000. Our original budget was 401,000.
We guided 400,000 to 410,000 ounces, it came in almost 10% higher. Otjikoto, 167,000 ounces, came in right in the middle of its range or mid to higher end of its 160,000 to 170,000 range that we'd given. Masbate, 216,000 ounces. It just had a standard year, as we've talked about a number of times. The trifecta of higher recoveries, higher grades, and higher throughput. I just wanted to say trifecta before Bill said it, just even though he made it up. Masbate, we originally guided well below 200,000, then we re-guided between 200,000 and 210,000, and we came in even above the high end of that re-guidance range. Fekola is a standard operation for us and Otjikoto continues to perform well, but we can't forget how well for a lower grade operation Masbate's run over the last few years.
Libertad came in 81,000 ounces, it was below our re-guided range of 90,000 to 100,000 ounces for the reasons I gave earlier. Limon came in just under 50,000 ounces. Really right at the low end of our re-guided range of between 50,000 and 60,000 ounces for the year. Cash cost, consolidated basis, $495 an ounce. That we made the low end. We guided $505 to $550 with the excellent crush performance at Fekola and Masbate and right in the middle of range for Otjikoto. We more than offset any downside in Nicaragua to come in below the low end of our consolidated guidance range. All-in sustaining cost, same story, $758 an ounce. Again, below, we guided $780 to $830, well below that range, reflecting mainly the outperformance on the cash cost side and a little bit of some timing differences, I think, on CapEx.
The main one being at La Libertad, where we didn't incur as much CapEx on Jabali and San Juan open pit as we thought we would because of the permit delays. Just translating that, if you look at earnings for the year, maybe I'll just touch on a couple of things from the 12-month P&L. Again, G&A, it's about $12 million higher than the prior year. Remember, Fekola is in there now. G&A cluster Fekola, $4 million. Last year, all those Fekola G&A costs were capitalized when we were building the mine. Now that hits the P&L. We had some differences in salaries and bonus timing of about $3 million in there. Prior year, we also had some accrual reversals of about $2 million that hit that account that don't hit it this year.
Just about $3 million in extra salaries across the group because we just have more bodies in some places and then some salary differentials across our expanded group with five mines in four countries. Moving down the income statement, again, the taxes, $109 million, most of that's Fekola, $77 million, $59 million of that's current, $18 million of that is priority dividends, just to remind you of that again. Masbate was $18 million and La Libertad was $5 million. Overall, GAAP earnings of $45 million on $0.03 a share. When you take out those non-cash items, adjusted earnings of $162 million or $0.16 a share, which I think is right on consensus. Although we previously reported our three quarters and some of the analysts here have reported a miss on Q4 earnings per share adjusted, we did hit consensus for the year.
I'd like to move on and talk a little bit about some of the items in the cash flow statement. Just to comment on the quarter, $74 million for operating cash flows. The operating cash flows in the quarter impacted a little bit, as mentioned before, by slightly higher budgeted operating costs for Q4 than for the prior three quarters of the year. Some underperformance on the Nicaragua site that didn't generate as much cash flow as we expected, particularly from La Libertad. Also to point out in Q4, we made a voluntary prepayment of our Fekola taxes of $20 million. All of those taxes for Fekola, most of them weren't due until Q1 or Q2 of 2019, but we made a $20 million prepayment because we've already generated the liability in country, at the request of the Revenue Authorities, we made that payment.
That impacted operating cash flow for the quarter. For the year, operating cash flow was $451 million, almost triple what we reported in the prior year. On a per share basis for the quarter, it's $0.07 a share. For the 12 months, it's $0.46 a share, which I think is, again, is right in consensus. On the financing side, just a couple of things to comment on in the queue. On October 1, we did repay the convertible notes that were outstanding at $258 million, that's really the main component of our debt reduction for the year. We started the year with total debt, $700 million, including revolver, converts, and various equipment loans and leases. We finished the year with approximately $480 million, a reduction of $220 million overall, most of which is reflected in that convert repayment.
On the investing side, $60 million for the quarter and $273 million for the year, that's almost exactly on budget overall. We're about $3 million under our total budget, including all CapEx and sites and exploration costs. The item where we were under on the budget was that we were under by just under $12 million for La Libertad related to Jabali Antenna. As I mentioned, we expect those costs to be incurred now in 2019 as we get the permit for antenna and start mining there. I should also mention Gramalote project. There was $6 million expended for the full year at Gramalote. That was basically a whole budget, our share of a whole budget for 2018 as we continue to evaluate what we're going to do there now.
With subsequent developments by year-end in Gramalote and new models being developed in early 2019, we haven't put anything other than a whole budget in 2019's budget at this point in time. By the end of March or certainly end of the second quarter, we expect to be able to come out with potentially a revised economic model or our thoughts on what Gramalote might look like going forward with some new geological interpretation built into the model. You may see us increase our budget for Gramalote in 2019 as I think we'll likely look to do some more drilling to further define the resource there. I have a couple other comments on looking forward on capital for 2019. We put our budgeted results out earlier in January, just to remind people what's not in that budget.
Firstly, on the Fekola mine, we're waiting for the sort of initial results from our optimized Fekola expansion study by the end of the quarter, first quarter of 2019. Those expansion costs aren't built into the budget. We were waiting to see what we thought they were and the timing of them before we reflected those in our cash flows going forward. We have already commented, we think the CapEx is somewhere sort of $50 million or slightly less for the whole project, not all of those would be incurred in 2019. We do expect to make that expansion decision and move forward certainly by the end of the first quarter into the second quarter of 2019. There should be some news flow on that fairly shortly.
On the El Limon mine, just to remind you as well in the budget there, we released the results of El Limon Central expansion case earlier in the year in 2018. The total CapEx for El Limon expansion to sort of optimize the development and processing of the new Central discovery is $37 million, we didn't commit to making that full expansion yet in the 2019 budget. What we did put in the budget was $2 million for El Limon to make some amendments to the current mill so it could process the slightly harder ore that we expect from Central. That is in the budget, the further $35 million to expand the mill from 500,000 tons a year to 600,000 tons a year is not in the current budget. With that in mind, just look at the cash at the end of the year.
We had $102 million in the bank and $400 million drawn on a revolving credit facility. That leaves us with a further $100 million of liquidity on the current revolver plus $100 million in the accordion feature that hasn't currently been taken up yet. We think we're in good shape liquidity-wise and cash flow-wise. We're confident as well that as we move to the Q1, we budgeted at $1,200 an ounce for revenues for budget purposes for 2019. We've already seen in this quarter that our realized gold price for sales that we have made is over $1,300 an ounce. We're already ahead in where we thought we'd be on the cash side, $50 million plus, I would say. That's positive and helps liquidity.
The goal going into 2019 with this positive generation of cash flow would be, I guess, to balance repaying the revolver, which I think the intention is to do, continue to pay down debt as we did in 2018, and balance that with whatever expansion needs that we think we have. As I just mentioned, we have potential additional costs that we may want to fund for Fekola expansion, potentially for Limon, and also see what we might want for 2019 for Gramalote. Finally, just a reminder what our guidance was for 2019 on a production basis of 935,000-975,000 ounces. Very close to, I think where we came in this year.
On the operating side, cash costs were $520-$560 and slightly higher than our range, marginally higher than our range for 2018, and that's really due to slightly higher fuel prices than the budget and slightly higher labor costs at a couple of locations. On the all-in cost side, we give a range for 2019 of between $835 and $875 an ounce. When comparing that to the range of $780-$830 that we had for 2018, there's probably two main differences. One is the slightly higher cash costs, which I just mentioned. The second one is just the difference in treatment of all-in sustaining costs. The World Gold Council put out some new guidelines just before the year-end, really clarifying the sort of broader guidelines, guidance that they had before on how to view or determine what is sustaining capital versus non-sustaining capital.
The main item that impacted us was the new guidance that they had on the first strip. Previously, if we were stripping an ore body and there were no ounces coming from that ore body into the current year's production, we'd have treated that as non-sustaining. However, the new guidance now lays out that if you want to treat it as non-sustaining, firstly, the strip has to take more than a year to complete, and secondly, that strip has to benefit at least five years of future production. In our case, the main area we were impacted was Otjikoto. At the Otjikoto mine, we're currently pre-stripping the Wolfshag pit for phases 2 and phase 3 of Wolfshag production. That will benefit, we think between two and three years into the future, but it doesn't benefit five.
Under the new guidance, which we'll adopt effective January 1st, 2019, we don't treat that as non-sustaining. That had an impact of about $35 an ounce overall on our total All-in Sustaining guidance. If you sort of adjusted the guidance for that, we'd be in a very similar range to the guidance we gave last year for All-in Sustaining costs. I think with that, those are the main financial and operating items I wanted to highlight.
Sure. Next slide. We're going to turn it over to Bill to give us an update on just where operationally, how we've started off the year quite well, talk about that, and then going to ask Tom to talk a little bit about the exploration budget specifically for Fekola, what our plans are there. Although I'll talk about 2019 as well before we open up for questions. Bill, thanks.
Yeah, sure. Thanks, Mike. I'll just run through the operations real quick. Obviously, on the last call, we went into a bit more detail on the operational side. Starting with Fekola, I just want everyone to remember that we've been operating now for basically five quarters, one quarter of commercial production, and then four quarters of operation. At which time, over that period, we've put up an additional 90,000 ounces versus what we'd had in our budget. We have continued to outperform on the mill side. We've continued to outperform on recovery versus what we'd originally discussed, and we see that it is already happening in January. Through February, we're already up approximately 10,000 ounces at Fekola, and that's primarily related to throughput.
At Otjikoto, I think in the press release, we talked about the fact that right at the end of the year, we had two high-grade blocks that we didn't get to. We got to one, didn't get to the second one. We did end up, as Mike said, above the midpoint of our guidance. That high-grade block we've already seen come through in January. At Otjikoto, through February, we're up more than 2,400 ounces. That's related to the higher grade block and basically throughput and recovery remains as projected. Masbate, everyone's aware that we expanded the mill. That was commissioned early in 2019. We're currently running at the design throughput or higher at eight million tons per annum. We have seen that expansion operate beautifully. We have seen higher grade and higher recoveries coming out of the Masbate mine.
As of the end of February, we're up approximately 4,000 ounces. In Nicaragua at La Libertad, Mike has already discussed the fact that we have in fact now gone through public consultation for the Jabali Antenna zone. While in January we were down slightly, we're starting to catch up. The throughput remains very good and the grade is for February, basically on track. We see we're moving in the right direction there in the second half of the year. With Jabali Antenna, we don't see any issues. Limon, the Limon mine, with Limon Central coming on right at the end of last year, we're in a pre-strip mode right now for Limon Central, but we are pulling some ounces out of some small pits there.
We basically remain on budget at this point, slightly under budget, but materially on budget for that project, with both throughput, grades, and recoveries. Those are the five major operations slides.
Okay, thanks, Bill. Tom, can you talk a little bit about, I know a lot of people are very interested in exploration and understandably so, particularly with us and what we've been doing, not just at Fekola, but other places. Maybe you could talk a little bit about the 2019 Fekola exploration budget. I mentioned before that the dramatic increase in the resource, and then Tom could talk about what's happening, and then filling that and also where else we're going to be drilling and why at the Fekola property.
Absolutely. The plan for Mali and Fekola in general is to spend $17.5 million in exploration, which will include about 46,000 meters of RC drilling and 28,000 meters of diamond drilling. There's also a significant amount of air core RAB drilling going to be done this year also. The main focus of that exploration, certainly for the first half of the year, is to complete the infill drilling on the portion of the resource that we believe is going to be within a pit as part of this expansion study that's going on right now. That drilling will be done sometime in June. Additional targets that we will be working on in Fekola for the back half of the year will be the extension of Fekola's structure to the north. It remains open.
If you recall, I certainly talked to this about to some people, our 1,400 resource pit actually went to the edge of the data. We actually don't know how big our resource pit could get, because it took basically everything that was in the resource model. The exploration will continue to the north. In addition to that, if you were at the PDAC, you saw in a long section that the boys are developing a theory on some shoots that are just below the main Fekola shoot that surface to the south of the pit, some of which is already within our resource and is in a mine plant for later in the life. We'll be doing more drilling on these proposed shoots that are just underneath the main Fekola shoot that surface to the south end of Fekola.
In addition to that, immediately west of Fekola pit, late last year, we hit on three separate vein structures. Certainly not as big as Fekola, but of interest given they're right beside the Fekola pit. We had drill intersections of up to 24 meters at two and a half grams, 10 meters of 4.8 grams in separate structures out west of Fekola. That's the Cardinal zone. We'll be doing exploration work on that. Our Anaconda or Snake zones, we didn't do a lot of exploration drilling on it last year, largely because we were focused on expanding the resource to the north of Fekola. We'll get back at that fairly hard later in the year to follow up some sulfide hits that we have below the Fekola, or sorry, below the Snakes satellite resource.
We're looking at expanding the satellite resource, we just picked up a new license that adjoins the Snakes to the north, we'll be following that up with exploration, mainly auger and air core drilling to see if the satellite resource and the underlying sulfide style mineralization extends to the north. That'll be the plan for Fekola. You can see from my discussion from the different targets, there's a heck of a lot going on there outside the Fekola deposit, we're still very optimistic that the potential to expand resources at Fekola property or the Fekola property in the region is very good.
Great. Thanks, Tom. Looking forward to what other milestones and things are going to happen in 2019. Obviously, we're going to continue to optimize our production at all sites, we've got a good start to the year already. We're going to focus on our pipeline of internal growth. As we've talked about quite a bit in the release and touched on today, we've already completed or an initial Fekola expansion study by the end of the year, that was extremely positive. The initial view of the economics of that, very robust. We will come out with details on that by the end of March talking about the impact on production.
Based on our conversation with our board yesterday, we're very confident that we will make a decision to go ahead and expand Fekola starting at the end of March with expansion program that could probably take somewhere around 12-15 months. In terms of Gramalote, there's been some interesting potential positives there. Late last year, AngloGold Ashanti, our joint venture partner, came to us with some new modeling that they'd done on their old pre-feasibility model from some years ago, and they seem to be coming out with some better grade potentially and some better economics on the project. They asked us to review that. We have. We ran our own model, which wasn't quite as rosy as theirs, but still quite interesting, and now we're applying some economics. We're working well with AGA to try and come up with a model that everyone agrees.
We've had a bit of a difference of view for some years because we felt there was more drilling required on the resource to really understand Gramalote. They didn't share the same view. The point now is over the next number of weeks is to get with AGA, look, see if we can come up with a model that everyone agrees, then decide what we're going to do going forward. The next steps would be, if we want to proceed to final feasibility, would be to do some, in our view, some infill drilling to infill the 35% or whatever it is of the resource that is in the inferred category, infill drill that. Also, there's very little engineering to be done. There's really no metallurgy to be done to do a final feasibility study.
We'll be discussing that with AGA, we'll be able to come out probably sometime in April with our view and probably announcing a preliminary economic assessment from our point of view. They may announce a pre-feasibility study because they're under a different jurisdiction of regulations than we are at the end of the day. We'll see. Gramalote, these new economics that we've seen, it's very early, but they seem to be more encouraging than what we had before. We'll keep posted on that. Colin talked about exploration, our focus will be continue to maintain our financial discipline and look to repay debt as we move along, as we did extremely successfully in 2018. We get asked a lot recently about M&A. Maybe there'll be a question on that, but I'll probably hit it. I'll just give you our thoughts now about that.
Clearly, we want to find out what's in our pipeline. We think that it will be open to our shareholders to get out the news that we're going to expand Fekola, and also if we're going to move forward on something like Gramalote. We're very focused over the next few months on what's in our pipeline. I think the market's changed quite a bit with the Barrick Randgold deal, the 0% premium, and the 17% short-lived premium for the Newmont Goldcorp deal. It seems that the goalposts have changed, that the big boys aren't going to do any of the 30%-40% premium deals that got them in so much trouble over the last several years by overpaying for assets that turned out to be inferior. At the end of the day, I think that there's a couple of positives for us out of all that, frankly.
We're very keen to keep running this company, and I think the vast majority of our shareholders are happy with management. I don't think any big company is going to come and pay a 30%-40% premium for anybody these days, and I don't think they're going to pay that for B2Gold. I think most of our shareholders aren't very happy with management. I don't think anybody offering a no premium offer for B2Gold, I can't imagine that would be of interest to our shareholders. We want to continue to grow this company and continue to do what we've done very well for 10 years. In terms of looking at it the other way of M&A, what about us doing M&A? I've said for four years that we were unlikely to do any major M&A until we were getting credit for Fekola.
We're getting some credit for Fekola yet. As we said, let's see what's in the pipeline and expansion, et cetera. If the same thing applies looking down as looking up, where the big guys aren't going to be spending the big premiums anymore, I don't think the shareholders of smaller companies than ours can expect the big premiums as well. Certainly, there may be opportunities out there over the next later in the year or whatever. We'll always look to acquire something with little or no premium because there may be shareholders of smaller companies that would like to have B2Gold shares. We'll be looking at that. Our rules of engagement have never changed. Acquisitions, we'll never buy anything that needs a higher gold price and/or exploration success to justify the purchase price.
We've always said the cheapest ounce are the ones you find, and we have an extraordinary track record with Tom and his team, and we'll continue to focus on exploration, both on our own and around our own mines and brownfields, but also greenfields on our own, but also greenfields in joint venture partnership with junior exploration companies who have assets we like. We want to be the operator. Our team is that good. We want to spot the drill holes, but we think there's some interesting opportunities potentially in that regard as well. We'll keep an eye on M&A, and we'll continue to be very disciplined in due diligence as we always are. There's nothing on the front burner at the moment. I must say also that we did the heavy lifting here when very few were doing it.
We're one of the very few gold mine companies to grow over the last five years. With that and what we have in our pipeline, we don't feel any sense of urgency to go out and do a deal. I think this might become a buyer's market as we go through this year. There are some assets that are going to come out clearly of Newmont and Barrick, then we'll look at them, but frankly speaking, there's other companies that need growth much more than we do, and we're not going to overpay, and those companies aren't going to give away assets. We'll see what's out there. At the end of the day, we may end up looking down a little more than up. Down looking at other opportunities in smaller companies than ours and see how those pan out.
That's really most of what we wanted to tell you. We'll answer some questions now. We had a fantastic year in 2018, thank you for those of you who have supported us and those of you that got it. We're very excited about 2019. I'll open it up now for questions.
Thank you. At this time, if you would like to ask a question, simply press star, then the number one on your telephone keypad. If you do want to remove yourself from the question queue, just press the pound key. Your first question comes from Mick Zroba from Macquarie Capital. Mick, your line's open.
Morning, Clive and team. Just a couple of questions in terms of the financials going forward. You've successfully paid off a large portion of the debt in 2018. Are you able to give us an idea of what to expect in a couple of years in terms of the magnitude of the debt repayments?
Sure, Mick. You want to start?
Well, Mick, I guess like I said before, we'll balance off the speed at which we pay off the facility with what we'll self-fund, I guess, for expansion activities, particularly at Fekola. I think you've got to look at it like that. In terms of becoming debt free, if we wanted to, I guess, next couple of years, give or take, or certainly in early 2021, I think we could be debt free if we chose to be. That's really a question of did you actually want to be completely debt free or do you want to use those facilities to fund some other activities? Looking forward, we haven't got any numbers in there for, like I said, for Fekola expansion or for anything beyond the whole budget in Gramalote, so you've got to balance those off.
Certainly at $1,300 gold, current gold prices, very strong cash generation, certainly have the ability to pay down that facility rapidly if we want to.
The focus is going to be, as Mick said, to continue to grow the company, looking first and foremost at our pipeline of projects. In the longer term, what we aspire to be in the future is a company that takes some of its cash flow and spends it on growth and some of the cash flow, and ultimately pays a dividend to our shareholders. That's the longer term view. For now, we think our shareholders want to see us focused on what we've done pretty dramatically and very well for the last 10 years, which is grow profitable gold production.
Okay, fantastic. Thank you. Just on the G&A, do you foresee similar total G&A going forward given the Malian office and some of the additional costs that were incurred in late 4Q?
Yeah. I think G&A for 2019 should be somewhere in the ballpark of 2018. That's right. You'll see Fekola's already in there in 2018, so it'll be in there in 2019.
We have hired up a little bit in the latter part of 2018 in some areas, so might be slight increase on the salary side. Generally speaking, ballpark would be roughly in the same ballpark.
Okay, excellent. Okay, that's all for me. Thank you.
Cheers. Thanks.
Your next question comes from Geordie Mark of Haywood Securities. Geordie, your line's open.
Thank you. Morning and, I guess, evening to those out there. Yeah. Thanks for the update. Just to maybe jumping the gun a little bit ahead of the optimized study coming out for Fekola. In terms of some of the details that'll come out soon, just thinking about more holistically about timing of investment decisions, if it comes out positive, which I'm sure it will, when you could hope to implement that expansion and expect the completion of expansion through to seven and a half million tons per annum.
The detail's going to come out, I guess, but what we're looking at so far was spending John, you want to say about what we're going to spend this year and next year if we decide to pull the trigger on the expansion that we received today?
Yes, Clive. We're looking at spending about half the amount this year, so $24 million, $25 million this year, $24 million, $25 million next year, as far as the cash flow outlay. Right now, the expected completion is in September 2020. We're trying to move that date up if possible. As we tend to do, we're going to look at fast-tracking that process, and a lot more detail will come out of this by the end of the month.
Okay, great. Thanks. If I could add one more question there and stay close to home at Fekola and moving north up to Anaconda. Just thinking, obviously, you've got a program there for 14,000 meters of work around there. Just thinking about what the scope of work is there in terms of infill versus expansion, what you're expecting on a footprint basis, how much you might expand it by. What are the considerations on the trade-off studies for a standalone versus tracking that back down to Fekola to further increase production?
Are you talking about the step out on the saprolite resource or the footprint of the sulfide resource?
No, just saprolite at the moment because I think you have a better idea of continuity there at the moment. Yeah.
Yeah. No, certainly the saprolite is open going north into the new license that we've picked up. It's actually wide open. We know that there's small minor activity up there, so we'll be following that to the north. As far as size potential of the expansion, I have no idea yet. We'll get some work on that. Then within the main snake areas itself, we picked up a new area of saprolite mineralization last year in the Boomslang area. We plan to follow that up. Those would be the main expansion areas of the saprolite resource. Drilling below it. Yeah, obviously, as Clive says, drilling below it. Dennis, do you want to talk about what we're doing in terms of potentially at least looking at whether standalone makes any sense at the saprolite? I think that's part of Geordie's question as well.
Yeah, we're updating a study that we did earlier where we've done some additional metallurgical work on it to what's the easiest and best way to process just the saprolite material, ignoring the hard rock that's under it. We're doing a plant design on that right now, which our goal here is to reduce both capital costs and operating costs from what we had in a previous version of that study, looking at the tailings disposal, getting those costs down, things like that. We're doing that right now, and we hope to have some numbers out on that. Our goal is to have that wrapped up by the end of May.
Right. Okay. Do you think there's any trade-offs to come back to Fekola for an expansion there, or are you thinking more just a self-standing satellite?
We'll look at bringing some of that material to Fekola. We're going to look at haulage costs, and we're going to look at what is the cost of actually putting that thing through the Fekola mill because that saprolite goes through there pretty easy, actually. We can't get the blend too high at Fekola. It starts stuffing things up there, too. We have to be careful with that. We will look at that as a trade-off to the standalone plant. We'll look at those considerations.
Okay. Thank you very much.
Thanks. Thanks, Geordie.
Your next question comes from Lawson Winder of Bank of America Merrill Lynch. Lawson, your line's open.
Great. Thank you for taking the questions. First of all, Mike, thanks so much for the tax guidance for 2019. It's very helpful. When you mentioned the corporate income tax installment payments totaling $65 million, are those just income tax, or does that also include the priority dividend and the ad valorem tax from El Limon?
No, just income tax.
Okay.
The ad valorem, but not the priority dividend.
Okay. Great. With regards to the fully participating 10% interest, right now, obviously, you guys have no need to pay a dividend to the Malian government at this point. The intercompany loan has to be paid off before that happens. One thing I wasn't clear on is that loan can also be used for the Malian government's share of CapEx. I'm wondering if you can provide any guidance around when you think that loan might be paid off, and then you would then start paying the fully participating dividend to the Malian government.
Well, yeah, you're correct. It's a loan. The deal we have is that we get to recoup our capital invested before any payments are made or any dividends are due. I didn't quite follow your question on if that loan could be used to pay the government's share of CapEx. We can self-fund Fekola going forward. We can cover any required further capital at Fekola from Fekola's cash generation. That loan, the original capital loan that was put in for construction purposes, is being paid down. We did disclose in the MD&A, if you look on page 14. At the end of December, we had approximately just over $400 million outstanding on those loans. Remember, those loans included the original loans we inherited when we bought Papillon.
It includes the capital to build Fekola, it includes the fleet cost, it includes the early works, it includes the Fadougou relocation, all those things, and an interest charge. Right at the end of 2018, it was about $400 million. If you want to plug that into your model, I guess you can figure out when you think that'll be paid down.
Okay. Does the $400 million also include the $47 million for the purchase of the additional 10% interest?
No. Remember, that additional 10% is a loan, is a payable that's due to us, B2Gold, by the State of Mali. It's not an intercompany loan with Fekola.
Oh, okay.
Right? It's due to the holder of Fekola. That's over and above the $417.
Okay. Got you. Okay. That's very helpful. On Jabali Antenna, I was just curious. Now it looks like it should be going ahead in the second half of this year, and I'm just curious, when you guys did the impairment, were you assuming a second half 2019 startup of Jabali Antenna, or is this something now that could lead to a potential reversal in the future? I'm not sure if you're able to speculate on that.
No, we don't need to speculate. I can tell you it did include Jabali Antenna from the second half of 2019. Remember, the impairment was based on the timing of Antenna coming in. The previous life mindset assumed that Antenna would be in much earlier and that the benefit of those cash flows would've been recognized earlier. That had a positive NPV impact. With the delays in country and the delay in some development, particularly with Antenna and with the delays in getting to the ore face at Jabali Underground, that had an NPV impact. We are anticipating mining an Antenna, open pit, and underground, but the timing delays caused by the unrest in the current 2018 year did have an impact on the NPV overall.
Pavon may be a positive development.
Yeah. With positive developments at Jabali Antenna, there's also now new engagement on Pavon. Historically, we had looked at Pavon potentially as being mill feed for Limon, but I think it's probably equidistant almost, Bill can comment on it more, between Limon or Libertad. It could be a possible future source. The benefits of Pavon aren't built into the model because we don't have any indicator of what any potential permitting timeline might be.
Okay, got you.
Bill, do you want to comment, sorry, on Pavon?
Yeah. Very interesting development. The difference being that as we look at that property now, we've been around the community. We're a known neighbor. We've been invited to participate in development in the community. Our orientation is completely different. You may recall, Pavon, we had on our plans roughly 50,000-ounce pit to be mined. The grades are good, five grams, mine development only, and the thought was always that we would transport that to one of our operations for processing.
Okay. Any sort of timeline on that?
No. We will see how this proceeds.
Okay. Maybe just one last one for me, if I might. Clive, you mentioned, with any acquisition, B2Gold wants to be the operator. That to me relates well to Gramalote where, based on the current agreement, AGA is the current operator. I'm just curious, for Gramalote to go forward, is there any sort of impediment there given that B2Gold is not the current operator?
I think there's going to be some discussions. There's already been some preliminary discussions with Kelvin Dushnisky, the new CEO of AGA. We've got a good relationship. I think if this project looks like it's of economic interest, I'm sure that both companies would be keen to see it move forward. Kelvin said publicly that he's very impressed with our ability to build mines. I think there will be some interesting discussion around that. My comment on operatorship was mainly, that was when I think when I was talking about exploration. Also, though, we do want to build our own mines and run our own mines as well.
I think with new economics and/or a better gold price or whatever it is with Gramalote, if you've got an asset of that size with a mining permit already in hand in Colombia, I'm pretty sure between two sensible groups there's going to be a way to advance it. We'd be willing to go. Our team's ready to go.
Great. Thank you, guys. That's it for me.
As a reminder, if you do want to ask a question, simply press star, then the number one on your telephone keypad. Your next question comes from Chris Thompson of PI Financial. Chris, your line's open
Good morning, guys. I actually thought you did a great job in the fourth quarter. Just one quick question for Fekola. You've spoken about, I guess, low-grade stockpile supplementing mill feed. Can you give us a sense of % of mill feed from mined ore versus low-grade stockpiles, as well as the grade of each?
Yeah. What period are you talking about? Are you talking about going forward? You talking about Q4?
Yeah, maybe just going forward.
It's just funny that you asked that question because we were just talking about it before the call. It's going to be like 50/50 for Q1 and Q2. We have approximately 4 million tons of low to medium-grade stockpiles left at an average grade of 1.77 grams. Right now we're hastily beating down stage 4 to get into the high-grade zones where we want to be in the second half of the year. I don't know if you remember, we're actually weighted second half ounce-wise for Fekola because of that.
Yep. Great. Perfect, guys. Thanks.
Thanks, Chris. Appreciate it.
Your next question comes from John Bridges of J.P. Morgan. John, your line's open.
Good morning, Clive, everybody. Congratulations on the results. I think I did have to say miss, but I didn't really mean that it was a bad miss. I just wondered with Gramalote, what's changed? Could you give us a little comment on the security situation around Gramalote?
Sure. Well, I'll talk about what's changed. Well, we're not really sure yet what's changed, John. I think that I mentioned that in November, there seemed to have been a change in AGA. There was some personnel changes. Perhaps it was a more receptive audience to hearing the ideas that maybe they hurt the grade a lot by trying to make it bigger. We had some issues with their model for some time and felt there needed to be more drilling because the model can swing so much that what that told us that we need more data points, so more drilling. For some reason, some people within AGA didn't believe it needed more drilling. That seems to be changing now. They came with a new model, which showed some potential improved economics, but they said, "Look, this is a work in progress. Can you guys check it?
Can you run a model yourselves? Let's get an independent to do it." All very positive things from a joint venture partner. We're working very well with them. I think we're closing in right now on coming up with some economics for the new models that we've run, and they're doing the same thing. We'll try to come together with one model, or at least very close, over the next month or so. What's changed is the potentially better economics than we were seeing before. The economics were quite poor. They had a grade of, I guess, like 0.66 or something at one point a while ago, making it bigger, and the economics were not attractive to us. We actually took the decision to start diluting rather than spend money.
We're not as big as they are, and we don't just spend money and spend money and spend money for long periods of time. We took the decision to start diluting. All of a sudden, this new model comes out, or potential new model, that got our attention to say, "Okay, well, they seem to have had a change within AGA in terms of their approach to Gramalote, so let's work closely with them to try and understand it better." We can't say today whether it's going to be something that's attractive at this gold price, but I think we're going to have a lot better idea in a month or so. If that's positive, then we'll be suggesting that we go ahead and do some more drilling together and probably move to a final feasibility study.
All that's going to come out of what comes out of the next 6 weeks or so, and working with them. We're working very well as a joint venture, and as I said earlier, I think Kelvin's keen on growing AGA, and we're keen on growing. We've got a lot of work to do. We definitely can't say it's in the project for us yet, but it's definitely more interesting.
Security?
Security, yeah. Dennis, to you. Dennis has spent more time there than I have, Gramalote is located in an excellent place to build a large open pit gold mine in Colombia. As I said, we have a permit and tremendous local government support as well. Dennis can talk about security. Thanks.
Yeah, it's a mining district, too. That's why the permitting there, the people want the mine, everything. In all the years, we've been there quite a while now, as the operator originally, then now Anglo is operator, security has never been a major issue there. We do have a military contingent in the area that helps secure that, it's always been a very, very stable area in that part of Colombia. No issues, really.
All right. You say the original grade was 0.6. The new model is pointing to what? 0.8-1?
Too early to say, John. We're looking at a bunch of different models and cases, et cetera. We're not ready to answer that question yet. There are some models, some runs that are showing an improvement in grade and maybe some less ounces, but an improvement in grade.
More ounces.
Sorry?
More ounces.
More ounces and potentially an improvement in grade. Once again, we don't have a number for you yet in terms of where it's going to go, but we'll have a much better idea in the next six weeks or so.
Okay. Interesting. Well done, guys. Thanks.
Sorry?
Yep. Thanks a lot, guys.
Cool. Thanks, John. Appreciate it.
We've come to the end of our Q&A session for today, so I'll turn the call back over to Mr. Clive Johnson for closing remarks.
Okay. Well, thank you all for joining us, and thank you for your interest and your support and your questions. Have a good day.
This concludes today's conference call. You may now disconnect.