B2Gold releases Wolfshag inferred mineral resource

2014-01-22 06:03 ET - News Release

Mr. Tom Garagan reports

B2GOLD CORP. ANNOUNCES INITIAL RESOURCE FOR WOLFSHAG ZONE AT OTJIKOTO PROJECT IN NAMIBIA

B2Gold Corp. has released an initial inferred resource estimate for the recently discovered Wolfshag zone at the Otjikoto gold project in Namibia of 6.8 million tonnes at 3.2 grams per tonne gold containing 703,000 ounces gold. The Wolfshag zone occurs directly adjacent to the east and northeast portion of the planned Otjikoto deposit open pit which has an average grade of 1.42 grams per tonne gold. The initial high-grade inferred resource estimate for the Wolfshag zone indicates the potential for future expansion of gold production and/or increase in the mine life of the Otjikoto gold project. The Otjikoto mine construction is on budget and on schedule to commence production in the fourth quarter of 2014.

Wolfshag zone mineral resource

The Wolfshag zone comprises a series of en-echelon stacked, shallow easterly dipping mineralized shoots which plunge at 10 to 15 degrees to the southwest. The shoots subcrop below calcrete cover to the north and have been traced to the south down plunge for 1,600 metres strike length. Mineralization consists of pyrite-magnetite-calcite in veins, steep tension gashes and replacement zones hosted within albite plus calcite plus clay altered metasediments and marble lenses. The Wolfshag mineralized zone is bounded by folded, recrystallized and sheared marbles within a sheared thrust ramp duplex. The highest grades occur in the western and central portion of the WA shoot, the uppermost mineralized shoot within the Wolfshag zone. The WA shoot ranges in thickness from 10 to 35 metres over widths of 70 to 110 metres. The WB shoot is situated five to 15 metres below the WA shoot and varies from three to 15 metres thickness over 50 to 75 metres widths. Several additional stacked shoots occur below the WA and WB shoots but are not as well defined at the present.

The initial inferred mineral resource of the Wolfshag zone is reported within an optimized Whittle pit shell of $1,550 (U.S.) per ounce gold above a cut-off grade of 0.5 gram per tonne gold. The estimated inferred mineral resource for the Wolfshag zone is 6.8 million tonnes at 3.2 grams per tonne gold containing 703,000 ounces of gold.

        WOLFSHAG INFERRED MINERAL RESOURCE AS AT DEC. 31, 2013 (1,2,3)
                           
                    Cut-off                     Inferred                    
Gold price       grade (g/t)        Tonnes    Gold grade (g/t)  Gold (ounces)

$1,550                  0.5      6,800,000               3.20        703,000

1. Economic assumption parameters used for pit optimization include: exchange 
rate $8 (Namibian) to $1 (U.S.), plant throughput of 2.4 million tonnes per 
year, mining cost of $2.10 (U.S.) per tonne, processing cost of $15.18 (U.S.) 
per tonne, general and administrative cost of $9-million (U.S.) per year, 
gold recovery of 95.6 per cent, mining recovery of 98 per cent, royalties of 
3 per cent, and pit slope of 40 degrees in weathered material and 50 degrees 
in fresh rock. 
2. The estimate represents 100 per cent of the inferred resource, of which 
B2Gold's attributable share is 90 per cent.
3. Mineral resources that are not mineral reserves do not have a demonstrated 
economic viability.

The Wolfshag zone is located immediately east and northeast of the Otjikoto deposit pit with the Wolfshag preliminary pit outline contiguous with the Otjikoto pit. The average grade of the Otjikoto deposit probable reserve is 1.42 grams per tonne gold (see news release dated Jan. 10, 2013). With the average grade of the Wolfshag zone inferred resource estimate being considerably higher, the potential exists for future expansion of the production and/or an increase in the mine life of the Otjikoto project.

With the completion of the initial inferred resource from the Wolfshag zone, B2Gold engineers will develop conceptual mine plans to determine when Wolfshag material could be fed to the Otjikoto mills.

The Wolfshag zone remains open down plunge to the southwest but insufficient drilling has been completed to date to allow for classification within a resource. Wide-spaced drilling to the south of section line 7700N, including, for example, diamond drill hole OT13-376, on section line 7300N, which intersected 16.30 metres at 9.37 grams per tonne gold (3.45 grams per tonne cut with individual assays cut to 45 grams per tonne gold) (see news release dated Nov. 5, 2013), indicates that there is potential to outline additional mineral resources in the Wolfshag zone.

The 2014 Otjikoto exploration program is budgeted for $8-million (U.S.). The exploration drilling program will focus primarily on infill drilling on the northern portion of the Wolfshag zone to increase the drilling density to 50 by 25 metres, and will further test the extension of the Wolfshag zone to the south. The company anticipates being in a position to upgrade the mineral resource classification to the indicated category by the end of 2014. The 2014 program will also include metallurgical and geotechnical testwork for the Wolfshag zone.

Construction of the Otjikoto mine continues on schedule and on budget. The Otjikoto mine is scheduled to commence production in the fourth quarter of 2014. The current mine plan is based on probable open-pit mineral reserves of 29.4 million tonnes at a grade of 1.42 grams per tonne gold containing 1.34 million ounces of gold (see news release dated Jan. 10, 2013). The life of the mine, based on the probable reserves, is estimated to be 12 years, with annual forecast gold production of approximately 141,000 ounces gold per year for the first five years at an average operating cash cost of $524 per ounce of gold and for the life of mine approximately 112,000 ounces of gold per year at an average operating cash cost of $689 per ounce. Based on the positive drill results from the Wolfshag zone to date, the company plans to expand the Otjikoto mine in 2015, increasing ore throughput from 2.5 million tonnes per year to three million tonnes. The increased throughput will be achieved through the installation of a pebble crusher, additional leach tanks and mining equipment at a total cost of approximately $15-million. Once the expansion is completed at the end of 2015, annual gold production from the main Otjikoto pit alone would increase to approximately 170,000 ounces.

The mineral resource estimate was prepared under the supervision of Tom Garagan, PGeo, a qualified person under National Instrument 43-101. The qualified person reviewed and approved the contents of this news release.

Resource estimation notes

The resource estimate is based on 119 diamond drill holes (33,015 metres) which intersected the Wolfshag zone mineralized stratigraphy within a preliminary open pit as defined by Whittle pit optimization software and based on mining parameters similar to the Otjikoto deposit open pit, immediately adjacent to the zone. Drill holes were completed on 100-metre-spaced sections with 25-metre spacing on section lines with the inferred resource defined between sections 7650N and 8800N. Wire frames were created for high- and low-grade domains with these domains based on a combination of mineralization and gold grade (approximately 0.3 gram per tonne gold for low-grade shell and one to two grams per tonne gold for high-grade shell). Individual assays were capped at 13 to 32 grams per tonne gold in the high-grade domains 3.5 to 10 grams per tonne gold in the low-grade domains depending on mineralized zone. Grade shells were filled with parent blocks with a dimension of 12.5 by 25 by five metres. Smaller subblocks were created along the margins of the zones as needed. Grade was estimated with two-metre composites into parent blocks using ID3. Limited initial metallurgical testwork indicates the Wolfshag style of mineralization is compatible with the Otjikoto process plant design.

A database of 1,699 wax immersion specific gravity measurements was used to estimate tonnages within the four waste and two mineralized zones. The specific gravity measurement program uses a set of glass standards to monitor quality control.

B2Gold's quality assurance/quality control

Quality assurance and quality control procedures include the systematic insertion of blanks, standards and duplicates into the core sample strings. The primary laboratories for the Otjikoto gold project are ALS Minerals in Vancouver and Johannesburg, South Africa, where samples are analyzed by metallic screen fire assay and/or fire assay with atomic absorption finish and/or gravimetric finish using one assay tonne. Samples were prepared at Intertek Genalysis in Walvis Bay and ALS Minerals in Swakopmund, Namibia. Bureau Vertitas, Swakopmund, Namibia, is the umpire laboratory. All results stated in this announcement have passed B2Gold's quality assurance and quality control protocols. Mr. Garagan is the qualified person as defined under National Instrument 43-101.

The Otjikoto gold project is located approximately 300 kilometres north of Windhoek, the capital of Namibia, and is owned 90 per cent by B2Gold and 10 per cent by EVI Gold Pty. Ltd., a Namibian empowerment group.