Vancouver-based B2Gold (TSX:BTO) has reached an agreement with the Mali Government regarding the continued operation and governance of its Fekola Complex.
The company, which has a market capitalisation of C$5.5 million ($6 million), says the exploitation permits for the Fekola Regional area and approval of the exploitation phase of the Fekola underground will be expedited under the new agreement.
In 2022, the government issued a moratorium on the administration of all new licences, permits, and approvals while it audited mining operations and undertook a comprehensive review of the 2019 Mining Code.
In August 2023, Mali issued a new mining code and later that year established a commission to negotiate certain aspects of existing mining conventions and clarify the application of the new mining code to both existing and new mining projects.
In July 2024, Mali finalised and issued the Implementation Decree for the new mining code, which included certain details relating to economic parameters not previously included in the 2023 Mining Code.
The aim of the updated legislation is to increase Mali’s share of revenues generated from the mining sector by raising the ownership interest the government and local community can acquire in projects.
This, in turn, is expected to increase the sector’s contribution to gross domestic product up to 20%.
The Mali Government has now determined B2Gold’s Fekola Mine will continue to operate under the previous 2012 Mining Code, with the Fekola Mining Convention remaining in place until 2040.
B2Gold says the agreement enables continued stability of the ownership, income tax and customs regimes, and the company’s dispute resolution rights under the Fekola Mining Convention.
The agreement contemplates the distribution of all retained earnings currently attributable to Mali’s 10% ordinary share interest and conversion of that interest to a 10% preferred share interest with priority dividends going forward.
It also settles any and all existing tax assessments, customs disputes, and other assessments currently outstanding.
Meanwhile, the Fekola Regional development will fall under the new 2023 Mining Code.
Once the exploitation permit for Fekola Regional is granted, mining operations will begin, with initial gold production expected to commence in early 2025.
This has the potential to generate about 80,000 to 100,000 ounces of additional gold production each year from Fekola Regional sources through the trucking of open pit ore to the Fekola mill.
The development of Fekola Regional is expected to yield positive economics through the enhancement of the overall production profile, and the extension of mine life of the Fekola Complex.
Construction of the haul road to the mill, along with the mining infrastructure, was completed in 2023.
Initial gold production from the Fekola underground mine is expected to start in mid-2025.
The Fekola Complex comprises the Fekola and Cardinal open pits and Fekola underground (Medinandi permit), as well as the regional Anaconda Area (Bantako, Menankoto, and Bakolobi permits) and Dandoko permit, which is located about 20km from the Fekola Mine.
B2Gold expects the operation to produce 420,000 to 450,000 ounces of gold this year at all-in sustaining costs of US$1,510 ($2,246) to US$1,570 an ounce.
The company has allocated US$10 million to the 2024 exploration program, which is aimed at uncovering additional high-grade mineralisation across the Fekola Complex to supplement feed to the mill.
B2Gold says “significant exploration potential” remains across the Fekola Complex to further extend the mine life. A total of 20,000m of diamond and reverse circulation drilling is planned this year.
B2Gold acquired the Fekola Complex through a merger with Papillon Resources in October 2014.
Write to Angela East at Mining.com.au
Images: B2Gold
