The mining newspaper for Alaska and Canada's North
The mining newspaper for Alaska and Canada's North
North of 60 Mining News - January 26, 2024
Crews are currently working on a 163-kilometer (101 miles) winter ice road that will allow delivery of equipment, fuel, and supplies shipped this summer to the Bathurst Inlet port to B2Gold's Goose gold mine development project in Nunavut.
With construction ahead of schedule, B2Gold Corp. says its Back River gold project in Nunavut remains on track to pour its first gold early in 2025. Costs, however, are tracking approximately 30% higher than was estimated, which is expected to push the final price tag for mine development north of C$1 billion (US$750 million).
Last April, B2Gold closed an all-shares deal valued at around C$1.1 billion (US$820 million) to acquire Sabina Gold & Silver Corp., which had completed much of the predevelopment work for Goose gold mine, the advanced project on its district-scale Back River project.
According to a feasibility study published while Sabina still owned Back River, the Goose Mine is slated to produce 3.34 million oz of gold over 15 years of mining 18.7 million metric tons of proven and probable reserves averaging 5.97 grams per metric ton (3.6 million oz) gold.
With the goal of having this mine put into production around the first quarter of 2025, B2Gold immediately went to work finishing the development.
In June, B2Gold made an initial investment of C$800 million (US$593 million) to get the Goose Mine ready, plus C$90 million (US$66.7 million) to accelerate underground development to increase average annual gold production over the first five years to above 300,000 oz.
Upon completing a detailed review of the mine design, materials, and construction schedule, B2Gold has raised the estimate for completion to C$1.05 billion.
The company attributes much of this increase to underestimated labor and site operating costs in the feasibility study, along with inflationary impacts on materials and transportation.
In addition, B2Gold says a detailed review of the project design has identified deficiencies in power generation and distribution, laboratory, piping, and other project components. The company is rectifying these missing pieces to deliver a reliable operation.
Considering that Sabina and B2Gold have already invested a combined C$715 million (US$530 million) on Goose's development, and all the major components and materials for the mine have already been purchased or under contract, B2Gold does not expect much variance from its revised estimate.
This year, B2Gold expects to spend approximately C$280 million (US$207 million) to finish construction at Goose.
In addition, the company is investing roughly C$200 million (US$148 million) into open-pit and underground mine development initiatives aimed at increasing gold production over the first five years compared to what was outlined in the feasibility study, as well as lowering production costs due to optimizing underground mining.
"It is anticipated that the increase in underground development costs will be offset during operations through lower sustainable operating costs than could be achieved with the cut-and-fill underground mining method," B2Gold penned in its fourth quarter operations update.
The company says Goose Mine remains on track to pour its first gold in the first quarter of 2025 and is expected to be ramped up to its full 4,000-metric-ton-per-day nameplate capacity by the end of the second quarter.
If these milestones are achieved, Nunavut's newest gold mine is forecast to produce somewhere between 220,000 and 260,000 ounces of gold in 2025 and 1.5 million ounces over the first five years of operation.
An updated Goose project life-of-mine plan that includes the accelerated mine development and optimizations is slated to be finalized by the end of March.
CORRECTION: This article was updated on May 8, 2024 to correct a date typo.
Over his more than 16 years of covering mining and mineral exploration, Shane has become renowned for his ability to report on the sector in a way that is technically sound enough to inform industry insiders while being easy to understand by a wider audience.
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