B2Gold Corp.

Thank you for standing by. This is the conference operator. Welcome to B2Gold Corporation's second quarter 2024 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 questions 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.

Thank you, operator. Welcome, everyone, to the conference call to discuss the results, Q2 results, or financial results for B2Gold. We had some very positive results from the quarter, financial results from Mike Sinema and Our CFO is going to walk us through that. We're also going to talk about some of the other issues that we cover in the news release. We're going to get an update from Bill on the operational update from both the situation in Mali in terms of production. Then we'll talk about an update on Goose. Just a couple of points maybe to start us off. We have had an excellent track record as everyone I think is aware of operational performance for many years now. We did have An excavator tip over on the side, which is very unusual, that happened, and Bill will talk in more detail about that. That was unfortunate. That's caused us to re-guide production for this year, down about 50,000 ounces. That has not gone away. It's simply moved into next year, so that's why we've re-guided, and you will hear more about that. Bill will tell you what happened and the excavator and how we've taken steps to ensure that that that very unusual occurrence cannot happen again. We'll talk about that. To get back to our excellent operational performance, we'll talk about how we're already starting to see tenders come back with the replacement excavators, et cetera. In terms of just a quick update on Mali, and we'll get a chance to talk about this with answering your questions, I'm sure. We are in the, believe to be in the final stages, we believe, of discussions with the government of Mali to understand the, the full implementation of the 2023 mining code. So we are, as I said, final stages of those discussions. I hope very shortly to be able to come out and announce. What that will do is that will trigger the, we hope, the rapid receipt of a permit, an exploitation permit, for the regional areas where we want to begin trucking more down. As you've heard before, we've already built the roads. We're ready to go in terms of trucking more down, and that could add 8,200,000 ounces a year. That would be reaching an agreement with the government that will trigger that permitting process. The government's assured us that they want to see this happen. They very much want to see Focola expanded. So we're looking to get, hopefully, a rapid response to getting an exploitation permit. No blasting, no trucking. We're going to slowly sac that material into trucks and haul it 20 kilometers or less down to the Focola mill. The other thing to... make sure people are still aware of us. There's tremendous exploration upside in the Ficola complex. With the agreement with the government, we will immediately go back to an aggressive drilling program around $7 million of exploration drilling up and down the complex. There's a rigs turning right now at 90 on the Ficola license. So tremendous exploration upside. We did take an impairment charge, and Michael talked to us about that. But it's very important to note that the ultimate final value of the Ficola complex is very open. uh, with, with further exploration successes. And we're not talking about brand new, there probably will be some new discoveries, but also expansions of known sources of mineralization that we could so far. So the full story, the life, the ultimate life of mine will continue, hopefully to add to the reserves and the ultimate life of mine and the ultimate value. Therefore, of the Focola complex, um, we see that to grow in value from, from, from that asset. Um, I think with that, I'll turn it over to Mike to give us a review of the financial results. But maybe before I do that, I'll just talk a little bit about on the positive side. You know, we've had a great track record in this company for a long time, including from before that, as being good operators, good extraction, exploration, and then managing things like political risk, et cetera. So we've had a great track record. And one thing we're very good at is taking on challenges. So yes, we have some challenges in front of We said this would be a transitional year. We knew production would be lower. We have a lot of capital expenditures, as we talked about before, including, of course, the Goose construction. But this is very much still a transitional year. We remain in a very strong financial position. And as we look forward, we're looking forward to continuing to grow this company based on developing our existing assets, such as the expansion of coal through trucking. The Goose mine coming on at mid... Bill will talk about how well construction is going. Coming on mid... Next year, we're producing on an annualized basis about 320,000 ounces a year. And then you look at the growth profile a little bit more. We've had a positive PEA. We're doing infusibility, which will be done by the middle of next year. We're getting quite encouraged by that project. And if that turns into the next mine, it fits in nicely after goose potentially. And the infusibility is as positive as we're hoping, as the PEA was. then that ultimately could add another 240,000 ounces a year. So there's about 650,000 ounces of growth in this company from existing assets. We don't have to go and buy another mine. We don't have to go and make big discoveries. So that's a great growth profile, and we'll continue. As we get through the challenges this year, we'll continue very much to focus on the opportunity to continue to grow the company through existing assets and putting them into production. With that, I'll turn it over to Mike to give us some financial results. And then, Bill, can you give us an update on that side of the action?

Thank you, Clive. Personally, I'd say financially it was a strong quarter. On the earnings side, after adjusting for one-time items, the company generated $0.06 per share of adjusted earnings. And definitely, as you can see, it benefited from stronger average call prices in the period. Operating cash flow, bottom line was $62 million after changes in working capital or $192 million before changes in working capital. Again, very strong results for the operations. As Clyde mentioned or alluded to, we did lower production guidance at FACOLA due to equipment availability issues in the pit. And so with that, we guide in production for the second half and for full year 24. We also looked at the cash cost null and sustained cost. for HOA operations. And overall, at a consolidated level, we ended up with no change to our consolidated cash cost operating guidance. We maintain that range of between $835 and $895 per ounce. And that has benefited, for one thing for sure, through the year with lower fuel prices than we budgeted. And then for consolidated all-in sustaining costs, the reduction in overall production plus higher royalties through the year as we enjoy a higher gold price, resulted in a re-guide upwards for the consolidated oil and sustaining cost range up to between $14.20 and $14.80 per ounce. Collide did mention that we did take a non-cash impairment charge on the FACOLA operations. That's based on our best estimates. with the issue of some implementation of freeze by the state, some ongoing discussions with the state. Then as expected, spending in the goose project picked up with the completion of the 2024 winter ice road and transport of all the required materials to site to complete construction. And balance sheet wise, we continue to remain in a very strong financial position leases we do have the full amount 700 million uh amount for the available on our revolving credit facility line and as previously indicated we will be drawing some of that line as we roll into the final stages of completion of this year's capex program across all our sites and then completion of the goose project and so we we feel we've got lots of good amount of financial flexibility to do that and i maintain our other growth initiatives around our portfolio and continue to fund healthy exploration programs to extend our mine lights at all sites. And that's what I was going to say on the financial side. So with that, I guess I'll pass it over to Bill. Sure.

Thanks, Mike. All right. Thanks, Mike. Yeah, so on the operational side, I'll do the easy stuff first. So looking at Mazbate, Mazbate continues to perform at a world-class level. I think everyone's aware. Still more than 2,000 days without an LTI and very strong cash flows. Ochocoto continues to also perform very well. Probably the excitement there is that we are preparing a PEA study that would come out in kind of the middle of next year, which has the potential to expand the ounce profile through the existing life of mine through the early 2030s and add ounces to the existing stockpiles. At FECOLA, let's see here. So FECOLA is down, as you heard Mike say and Mike and Clive talked about. One of the things we do need to point out is FECOLA has historically had an excellent track record for producing ounces. In this particular case, there was, as Clive mentioned, an operator error where an operator tipped over an excavator, which cracked the frame for the excavator. That is something that has been rectified. Certainly, we've given extensive training, retraining to all the employees on use of equipment. We see that as a one-off, an unlikely event. That, with the confluence of not really being able to get into some of the regional stuff, really is the cause for the delay. As Clive indicated, we haven't lost any ounces. They've just been pushed back. We're going to see currently we've mined out the high-grade ounces in Phase 6. And we're going to see the high grade ounces from Phase 7 starting to show up in Q4 of next year, or Q4 of this year. So you'll see most of those ounces transferred into next year. Just the mine plan shifts for FACOA by about a quarter. Let's see. At Goose. So at Goose, we are having operationally a very good run there. Last time we talked, we were working on the Winter Ice Road. The 2024 Winter Ice Road was successfully completed. We brought down all of the materials necessary to complete the project. We expanded the camp to more than 600 people, which allows us to really get on top of making sure we can bring this in on time. The tanks, which are necessary at the MLA, are complete. We'll be starting to fill them up this month. The tanks on site will be done in kind of Q3, Q4. We don't see an issue there. The concrete, which is critical to get poured during the summer season, we've got currently more than 75% of the concrete done. And certainly by Q3, we'll be well over 90% on the concrete. All the steel is going up very well. We're currently working on electrical. And really, the takeaway is for most disciplines, we are either at where we need to be or ahead of schedule. which allows us really to produce gold in Q2 2025. So relating to the cost estimate, I know that we had talked about putting it out in June of this year. Maybe that was a bit ambitious, probably on my side, when you think about what the actual schedule was for seeing what had come down the road. So as you know, the winter ice road ended in May. We've now got everything opened up and we're taking a look at what the previous owner had actually purchased. I think everyone's aware that they were cash strapped and what we're doing now is just making sure that what has been ordered meets what we need to run kind of a B2Gold world class project. You know, typically this is not our standard fare. What we like to do is take over a project during either pre-feasibility or at feasibility level, have a look at it, redesign it, and go ahead and make sure that we've ordered everything initially to the B2 standard. So we certainly see, we've got our head around what is there. We're working on what that means financially. And there's a lot of moving parts, but we certainly see by the first part of September, we'll be able to deliver a concrete number into the market. And then I guess maybe the last thing is Gramalote. We are continuing to work on a feasibility, which will come out the middle of next year. We're currently staffing up all of our teams and beginning to work on that. Clive, I don't know if there's anything else you'd like me to talk about.

Maybe just a quick update. It's in the news list about where we are right now in terms of shipping and stuff for getting everything on site for next year.

Yeah, that's actually a very valid point. So right now we're in the middle of commencing the C-LIFT for 2024. Currently, with 11 ships, we'll be sent to the MLA. That includes more than 85 million liters of fuel and enough cargo to basically get us through the 2025 season. So everything remains on track. The B2O logistics team is performing beautifully, and we don't see any issues with the sea lift. We'll start receiving cargo in about 10 days.

And people want to get a visual view of all this. On our website, there's a link to go to to look at some great drone footage of showing the progress of construction. It's been essentially remarkable the pace at which our construction team can build things. So that's going extremely well. Thanks, Bill. I think with that, I'm sure you have lots of questions for us. So we'll open up to questions.

We will now begin the analyst question and session. Sorry, question and answer session. To join the question queue, you may press star then one on your telephone keypad. You'll share your tone and knowledge in your request. If you're using a speakerphone, please pick up your handset before pressing any keys. To withdraw your questions, please press star then two. We'll pause for a moment as callers join the queue. The first question comes from Wayne Lamb with RBC. Please go ahead.

Yeah, thanks, guys. Just wondering, just on the impairment charge taken this quarter, this is the second impairment taken now in relation to Focola over the past year for almost the same amount. Outside of the increase in the discount rate, can you just talk about some of the factors involved in taking those two impairments in succession and the additional concessions being made in the negotiations? And then just with the implementation decree having been finalized now, are you guys pretty confident that a deal is imminent and are you able to provide a more definitive timeline now for completion?

Well, I would say we're We're very confident in the near term here of reaching an agreement that's satisfactory to all stakeholders. Of course, as you probably understand, we can't go into details about negotiations, et cetera. That wouldn't be appropriate or useful. So in terms of the impairment, Mike, do you want to talk a little bit about that?

Yeah, I think we'll really keep it to the level that we're required to look at the They did put out some new clarification and their implementation decrees, and we've had ongoing discussion. So I think we're close. We think we've reflected those items that we believe would impact the carrying value and what we booked this time around. But we don't want to discuss in detail, I think, until we finally start discussions.

I think it's probably maybe quite clear that the fact that we actually looked at it and took the impairment

um charge would suggest to you how close we are to reach we think we're how close we are to reaching a final agreement okay got it fair enough um and then maybe just wondering um on the update asic guidance that's a cola uh does that include stripping planned for the regional announces next year or is that going to fall under non-sustaining capex and then Do you still anticipate costs coming down next year as per the 2024 mine plan? Or should we be thinking about something in a similar range to this year, given the amount of capitalized stripping and underground development need to be done?

Well, I can comment certainly for starters on the stripping for regional. There is no regional for actions. or any costs related to them for this year. So that, the re-guide number doesn't assume the stripping campaign. And then, you know, as we look forward, I don't know if Bill wants to talk about the money plan for COLA. We haven't put out any guidance for next year yet on the cost side.

Yeah, we haven't put out any guidance for costs, but I certainly think that we've been very open that the underground will come in in Q2 of 2025 and we are expecting regional ounces next year. You know, as Clive said, it looks like an agreement is imminent. So we are ramping up as we've been very open. All of the work necessary to develop that regional project is already done. The road's in, the infrastructure's in. All we need to do is we'll have a quarter of pre-stripping and we'll go into production.

Okay, got it. And then maybe at Back River, Can you just talk about what the remaining large CapEx items are outstanding that's been driving the delay in the review? And is it still the case that most of the large capital items have already been spent and most of the increase with the update is going to be driven by labor and logistics? Or are there still equipment items that need to be replaced in relation to Bill's comment on sorting through some of the historic Sabina stuff?

Yeah, so the answer is it's tough really to say exactly. I don't want to come out and say really kind of where the numbers are exactly because I don't want to lie. I don't want to mislead anybody. We're in the middle of checking through that right now. What I will tell you is that most of the major things are purchased and on site, right? So it is really a question of kind of Picking around the edges, don't forget we've got that extra quarter now, which does have an impact. And we're just working through that. So you got to give me like 30 days.

Okay. Got it. Looking forward to the update. Thanks for answering my questions. Thanks.

The next question comes from John DeMarco with National Bank Financial. Please go ahead.

Thank you, operator, and good morning, Clive and team. First question, Bill, can you give a little more color on the guidance increase, or rather the 2025 outlook? Of the $90K that's added, how much is from FACOLA deferrals from 2024, the truck deep regional ore, and also the FACOLA underground, those three different buckets? How did that move the needle on 2025?

Yeah, I think, Peter, you're in the room, right? It's probably better for you to answer this question.

Yeah, thanks, Bill. Yeah, as far as 2025 goes with the deferral of the ounces, basically it's just sliding the high-grade zone from Phase 7 back. So, you know, we're still revising those line plans now to see exactly what it is, but we're looking more at a replacement, not really an upshift in 2025.

Okay, I see. So you're just kind of replacing with higher grades. But what you have for the FACOLA Regional or for FACOLA Underground, as Bill mentioned, starting in Q2, that just remains unchanged? That's right.

Yeah, we're not changing anything as far as those goes. On a development basis, those projects remain unscathed.

Okay, perfect. And there was no regional truck door in 2024 guidance. Is that correct?

Correct.

That's correct. Thank you. Ben, just to this equipment availability issue, it's good to hear this being addressed, but when do you expect it to fully be addressed, and is there any risk to that timeline? We saw Focola costs actually improve in Q2, so I guess the read-through here is it's probably going to take a few weeks to get addressed. Maybe we're going to see higher costs at Focola in Q3. Is that fair to say?

Sure. Right, so the first part of the question is, it already has been addressed. Basically, we brought forward, we replaced the excavator. Of course, it took time to get it in. And we brought forth another excavator from 2025. So what we've seen kind of in Q3 so far is we have met or exceeded our production targets for most, for both the months so far. And so it already has been addressed. Now it's just a question of how quickly we can catch up. And so, you know, I'll let Mike talk about the cost.

Yeah, I think the key thing on the cost side, Don, to remember, there's two key components. One was we moved less tons because we had less equipment capacity. So we're going to see a catch-up. You're right there. As capacity comes back on, we higher gross costs. But we also enjoyed close to 25% lower fuel costs at Focola, and we see that continuing right now. So there are some offsetting factors, too. starting to pick up some more of those tons. So it'll be a catch-up, but definitely the fuel reduction is a locked-in benefit versus what we originally budgeted.

Okay, great. Well, that's all for me. Thanks for taking my questions. Good luck with Q3. Thank you. Thanks.

Once again, if you have a question, please press start, then 1. The next question comes from Francisco Constanzo with Scotiabank. Please go ahead.

Hi, Clive and team. Thanks for taking my question. Just asking here on behalf of Obis Habib. I think most of the pertinent questions have already been asked and answered, but if I could just ask one for Mike. Given the challenges in Mali leading to the lower guide, can you speak to the integrity of the dividend given the review of the budget and the

uh maybe speak to the liquidity as well um how you plan to um to fund the project and you know the cadence of the boring on the liquidity and stuff like that thanks well i can certainly speak to uh liquidity you know like i said we've got we've got 700 million on the line there available and we've got close to half a billion in cash sitting there at the balance sheet date so we feel comfortable um And, you know, it's certainly our goal to maintain a dividend. We will look at the components of our capital return from time to time as we look also at our capital outlay. So I think it's something that we'll monitor as we have like some of the, get to near close on the end of some of our larger capital projects. But we certainly feel comfortable with our sort of level of liquidity that we have. Clive, I don't know if you want to add anything to that.

Okay, I think that's helpful. That's all for me.

This concludes the question and answer session. I would like to turn the conference back over to Clive Johnson for any closing remarks.

Okay, thanks, Alfred. Well, thank you, everyone, for joining us on the call. We always like to end these calls, I guess, with a bit of a discussion of what's coming up in terms of a reminder of the catalyst coming up Some of them we expect in the near term, so we're looking forward to including our discussions with the governor of Mali and reaching an agreement on the way forward, which will include, of course, receiving an exploitation license to start trucking more down the Fagola Mill from the regional targets. In addition, that will trigger significant exploration starting up again in the regional to fully define the value of Fagola Mill. We will have an updated, detailed, updated budget for you on the goose construction capital costs for this week in September. And we continue to work our way on Gramalata, as we mentioned, on the feasibility study. Goose exploration, we have been doing on silicon exploration. for existing targets, etc. by sometime in November. I look forward to putting out some more results. So in the meantime, we've explained, I hope, how we have recovered in Focola from a rare event, the unacceptable tipping over of a conveyor, and how we're recovering from that, as Bill pointed out. And those are our ounces that are lost, those are ounces that move, those 50,000 ounces in the So with that, a transitional year, a challenging year for Beach and Gold, as we've signaled before. It's got fewer challenges here at the end of the day. Solving problems and dealing with challenges head-on is throughout the company's portfolio. So with that, I would thank you all for your time. If you have any follow-up questions, get in touch with a student through Michael McDonald. And thanks for your time. Thank you.

This brings to an end today's conference call. You may disconnect your line. Thank you for participating and have a pleasant day.