Q2 2013 B2Gold Corp Earnings Conference Call

Aug 14, 2013 AM EDT
BTO.TO - B2Gold Corp
Q2 2013 B2Gold Corp Earnings Conference Call
Aug 14, 2013 / 05:00PM GMT 

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Corporate Participants
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   *  Clive Johnson
      B2Gold Corp - President and CEO
   *  Mark Corra
      B2Gold Corp - SVP of Finance and CFO
   *  Dale Craig
      B2Gold Corp - Vice President of Operations
   *  Ian MacLean
      B2Gold Corp - VP of IR
   *  Bill Lytle
      B2Gold Corp - Vice President, Country Manager Namibia
   *  Tom Garagan
      B2Gold Corp - SVP of Exploration

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Conference Call Participants
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   *  Gabriel Gonzales
      Canaccord Genuity  - Analyst
   *  Paolo   Lostritto  
      National Bank Financial  - Analyst
   *  Ovais Habib
      Scotiabank - Analyst
   *  Jeff Killeen
       CIBC World Markets   - Analyst
   *  Kerry Smith
      Haywood Securities - Analyst
   *  Chris Thompson
      Raymond James - Analyst

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Presentation
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Operator   [1]
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 Good morning, ladies and gentlemen. Welcome to the B2Gold second-quarter 2013 conference call.

 I would now like to turn the meeting over to Mr. Clive Johnson, President and CEO. Please go ahead, Mr. Johnson.

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 Clive Johnson,  B2Gold Corp - President and CEO   [2]
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 Thanks, Marcus.

 Welcome to the second-quarter 2013 conference call to discuss our results. A lot of the information that you saw today -- there's some new numbers there, of course, on earnings and other numbers, but a lot of it we pre-released, as many of you are aware, a week ago in terms of the production and some new guidance and also production for the quarter. So, we're going to do a brief summary here of the results, and we're going to keep that short and brief and talk about some of the things that are going on in our world. But then, really try and leave it open to questions because I think there's a lot of information we've put out there in the last little while.

 In terms of overview, we had another solid quarter. The results we're going to talk about, showing some positive numbers that Mark will take you through and showing ourselves in a very strong cash position at the end of the quarter with $95.7 million in the bank. In terms of overall corporately, we're pleased with that. I think that you'll hear and you've seen that we had a short-term shutdown at the Masbate mine to fix a pipeline. And, that was handled very well on site, and it was handled quickly. We are rapidly recovering from that, and the quarter was surprisingly good to us especially in terms of the operating costs given that. We came up with new guidance which we're very happy about. I think your CEO -- you all probably realize now why we felt Masbate was a good acquisition for the Company. We've had the six months that we told you we needed to get on the ground and put our stamp on it, and we'll hear more about that. We're very pleased with that corporately.

 We are also going to talk about looking forward in terms of production. We did guide last week that our -- we're upgrading our guidance to 2013 to 360,000 to 380,000 ounces of gold at $675 to $690. Dale will talk a little bit about the significantly lower projected costs in the second half of the year especially from Masbate. 2014, we are now projecting a range of 395,000 to 420,000 ounces. That's up from what we were projecting before, and costs somewhere around $685 to $700, in that range. In 2015, with Masbate coming online in early '15, we see -- for now, we're just saying somewhere around the 560,000 ounce mark, and we haven't put operating costs to that yet. We will do that over the next little. We'll give you a little bit more guidance on what we're seeing. Obviously, based on the feasibility study, we think that the costs are pretty attractive at Ojtikoto. We see no reason that those won't be realized, and in fact, that there's some interesting ideas about maybe expansion potential, et cetera, which we'll touch on a little bit.

 So, everything is going quite well in our world. We will continue to look at accretive acquisitions. This is the time -- an interesting time in this sector, as you all know, where there's a lot of sellers of projects out there including the majors, and there aren't all that many buyers. So, we've been extremely selective in the deals we've done in the past. We think all of our acquisitions have been accretive and are all looking very good from our perspective for our shareholders. We think we can be even more selective today. So, we will be looking for other alternatives and other ways to build shareholder value through exploration and acquisitions.

 That's mostly what I wanted to tell you as an introduction. Just an introduction to the people that are on the call from our side. We've got the executive team here. Tom Garagan, Roger Richer, George Johnson. Ian MacLean, Dennis Stansbury, Dale Craig, Mike Cinnamond, Mark Corra, myself. On the phone from [Windhoek] in Namibia is Bill Lytle. So, we've got the whole team here. Hence the wanting to leave some good time for questions. I'm sure someone around the table or on the phone can answer your questions accurately.

 So with that, I'll pass it over to Mark to give us a quick summary of the financial results, and then Dale will give us an operations summary.

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 Mark Corra,  B2Gold Corp - SVP of Finance and CFO   [3]
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 Thanks, Clive.

 Operations performed very well during the second quarter. As Clive mentioned, Masbate did lose about 7,000 ounces in production as they had to repair a pipeline and were shut down for about 17 days. But, despite that, they came in with surprisingly low cash costs of around just under $800 an ounce which just shows how well the crew down there did in managing their expenditures during that shutdown period and keeping the cap on what they were doing. So, very impressive numbers. Production came in at 82,000 ounces in the second quarter. More than double the 37,000 ounces produced last year in the same quarter. Cash costs came in at $732 which was about $13 lower than our consolidated budget cash cost number, and total cash costs were $782.

 On a year-to-date basis, we produced close to 162,000 ounces of gold at a $727 cash cost and $776 total cash cost. That compares to 71,400 ounces produced last year. The cash costs last year were lower at $585 and total cash costs of $640. The reason for the increase in the cash costs mainly relates to the addition of Masbate which is a slightly higher cash cost producer than our two Nicaraguan operations and also some of the cost pressures that most mining companies have seen.

 Revenues came in at $122.6 million. Again, more than double last year's revenue number. Average price received was about $1,420, compared to close to $1,600 last year. And, on a year-to-date basis, we had revenue of $277.5 million compared to $121 million last year. Average price received was $1,531 versus $1,644 last year.

 Just like to point out on under royalty and production taxes, if you're looking at the P&L, you'll notice that last year's royalty number is in the second quarter considerably lower than this year's. The main reason for that is at Libertad, they are under the old mining law in Nicaragua, and we had been in discussions with the DGI tax department there for quite a while. And, they finally agreed with the treatment of the ad-valorem tax there, which is a 3% royalty tax. That it's actually considered to be like a minimum tax on income. So, we were able to change the treatment of that. Instead of a royalty, we changed it to pre-payment of income taxes and made that adjustment in the second quarter. That's why that number looks a little odd on the comparison number.

 We came in with gross profit of close to $36 million for the quarter compared to $28.5 million last year. On a year-to-date basis, we were close to $70 million of gross profit versus $60 million last year. People probably noticed that G&A costs were considerably higher in the second quarter than last year. There's two reasons for that. One reason was that we paid cash bonuses to senior staff here in Vancouver as well as some of the overseas people that amounted to about $3.2 million. There was also with the acquisition of Masbate, there's more corporate and G&A expenses of about $1.3 million a quarter now, now that we have that operation as well. We do expect that G&A will probably come in around $7 million in the third quarter and be closer to what it was in the first going forward.

 Operating income, again, very strong at $62 million for the second quarter compared to $15 million last year. The big difference there of course is the sale of the Brucejack royalty for $45 million. And, on a year-to-date basis, operating income was $77 million versus $38 million last year.

 We did write down some long-term investments. When we acquired CGA, they had some large shareholdings in Saint Augustine and Sierra Mining. With obviously the decrease in gold prices and the problems that most of the gold market -- or, gold market stocks have seen in the quarter, we wrote them down to their carrying value, and that caused a non-cash write-down of about $15 million. You also noticed that we had unrealized loss on derivative instruments of about $4 million in the quarter and $6.5 million-year to date. Just point something out there, that we have about $67 million worth of rand hedges for this year and next year at about nine rands per dollar. Right now, the rand is about 10, so it is in a negative position. But, the reason we've done that is on our Ojtikoto budget, we budgeted a rand rate of 8.5 to 1 so we're actually wanted to lock in the foreign exchange fluctuations there. And, we're able to do so at a rate that's higher than our budgeted rate so that should help in the end with our construction costs at Ojtikoto.

 We also put on some gold hedges earlier in the quarter for the Ojtikoto project. We've hedged about 118,000 ounces over four years from 2015 to 2018. Based on the 10 to 1 rand exchange rate, those hedges are valued at just under $1,500 per ounce. Our philosophy here is that when you're taking on debt to build a project, we believe it's prudent to try and lock in some of your profits so that you can guarantee a payback on the project. On an overall basis, the hedging is less than 10% of our annual production going forward, and only about 20% of Ojtikoto's production going forward for those four years. So, it's very minimal, but it does help us guarantee some of our costs going forward there and paying back some of the investment.

 Current income taxes in the quarter of $3 million compared to an actual credit to taxes in the last quarter of just under $400,000. The reason for this second quarter of 2012 having a credit again relates to this ad-valorem tax that we were previously booking as a royalty, but we refiled our 2011 tax return and we were able to get it as a credit against income taxes. We booked that credit in the second quarter of 2012. That's why that number's a bit different.

 Adjusted earnings came in at $7.7 million versus $20.8 million last year. And, on a year-to-date basis, $47.7 million, $0.08 a share versus $41.6 million last year, $0.11 a share. Adjusted earnings really takes out one-time items and other non-cash numbers. I would recommend that since it's quite complicated, as to those adjustments that we've had to do this year, that you look at the news release or the MD&A to get an exact breakdown of how we did that calculation.

 Turning to the statement of cash flows. Despite lower gold prices and the 17-day shutdown at Masbate, we still managed to generate $31.5 million in cash flow for the quarter of $0.05 a share, slightly higher than the $28 million we generated last year. On a year-to-date basis, we've generated $76.7 million in cash flow, about $0.12 a share, compared to $55 million last year. Under financing activities, you'll notice that we did draw down on the $25 million of our revolving credit facility. We still have $100 million left under that credit facility. And, along with our cash-ending balance of $95 million gives us close to $200 million in available cash and credit towards our future construction of Ojtikoto. We did pay back the Masbate project loan in the second quarter, so now the debt there has been fully repaid which allows us to more freely move money from that project back to the parent Company if needed.

 The other thing I'd like to point out, you'll notice that Ojtikoto mine construction and mobile equipment, we spent close to $58 million in the quarter. Substantially higher than the $7 million we spent in the first quarter. Things there are progressing well, and I'm sure Dale -- or, probably Bill actually, will give you an update on that.

 If you turn to the balance sheet just a couple comments there, our inventories are actually about $5 million down from the first quarter. The reason is since we've taken over Masbate, we found that they tended to have a fair bit of gold bullion sitting in their vaults at any one time, and we've just tweaked that so that we are maximizing our shipments from there so that we can increase our gold sales. The other thing, under accounts payable, you'll notice that has increased from the first quarter by about $8 million. And, that relates to again Ojtikoto. Now that construction is progressing quite rapidly there, we're finding that our AP expenditures are -- have increased. The other increases in those numbers from the 2012 numbers relates to Masbate being included now.

 I'll turn it back to Clive.

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 Clive Johnson,  B2Gold Corp - President and CEO   [4]
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 Thanks, Mark. I'm going to turn it right over to Dale to give us an operations update from the three months.

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 Dale Craig,  B2Gold Corp - Vice President of Operations   [5]
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 Thank you, Clive.

 Overall, we see a solid second-quarter of results in the B2Gold operations on track for our 2013 guidance range of 360,000 to 380,000 ounces with improved cash costs. Consolidated cash operating costs are projected to be $675 to $690 per ounce. For the second half, consolidated cash costs will move down by about $55 per ounce. Prior range was $685 to $730 per ounce so that will now be $630 to $660 per ounce. B2Gold expects to produce from 191,000 to 211,000 ounces in the remainder of 2013. So, of course this will be a record year for B2Gold.

 For the Masbate operations, gold production was 38,323 ounces in the second quarter for a total of 74,790 ounces since B2Gold acquired Masbate Mines on January 16 of the year. We've previously released information about a temporary suspension of milling operations during June to replace a process pipeline. And, we have also indicated that we will postpone our SAG mill change out until 2014. At Masbate, nevertheless, it is clear that we've come through a very challenging period in really good shape. Cash operating costs for the quarter and for the half-year were $809 and $827.

 So, if we look at a little more detail in the first two months of the second quarter, cash cost in that quarter were in the range of $750 per ounce when we came into June. So, we came into June with low cash costs and well ahead of budget per ounces. Consequently, when we took the decision to shut down the mill in June for pipeline work, we closed down nonessential mine contract work. We focused on capitalized projects in the mine. We've focused on maintenance and pipeline building in the plant. The plant and the mine have both been performing very well since the hiatus. And, in fact, in July, you can see we recovered more than one-third of our June shortfall. So, we're really pleased with the way the operations have come along.

 Overall, good performance through April and May. Effective cost management measures during the period of plant interruption. A change in mill feed to focus on Colorado pit and subsequent improved rates in recoveries through the remainder of the year. We hope to ensure that Masbate Mine will complete -- will comply with our guidance from 175,000 to 185,000 ounces in 2013.

 In the second half of 2013 it is anticipated that the mine will produce gold at a cash operating cost about $95 less than we had originally anticipated. So, the range will be $725 to $760 per ounce compared to prior indications of $820 to $875 per ounce, very significant. It's worth mentioning that Masbate has had no lost time accidents this year. Year-to-date capital expenditures totaled about $10.8 million, primarily for tailings [down] expansion, major overhauls to mining equipment, pipeline replacement, and completion of the new workshop.

 For the Nicaraguan operations, overall gold production from La Libertad and Limon mines were within forecast for guidance totaling 43,760 ounces for the quarter. Now, Nicaraguan guidance for the first half of the year was 82,000 to 87,000 ounces, and we came in at the other upper end of that at 86,954 ounces. The La Libertad mine continued to perform well, finishing the first half of 2013 with gold production in the upper range of the Company's 2013 forecast, and with cash operating costs in the lower range of its guidance. So, gold production for the second quarter in 2013 was 29,582 ounces, slightly lower than budget by about 2.5%. Nonetheless, 18% better than the second quarter in 2012.

 In the second quarter of 2013, La Libertad mine produced 29,582 ounces of gold at a cash operating cost of $659, and that compares to the budget of 30,355 ounces at a cash operating cost of $607 per ounce. So, gold production in the second quarter was slightly lower than budget due to lower grades from Santa Maria early in the second quarter and lower throughput related to harder rock from Crimea and Mojon pits and wet season or muddy operating conditions and as well some mill maintenance. Lower throughput was offset by excellent recoveries for the period at 95.1% against the budget of 92%.

 So, we expect that La Libertad will deliver on our guidance of 131,000 to 137,000 ounces this year. Gold production in the last half of 2013 should be in the range of 75,000 to 78,000 ounces, an improvement compared to the first six months of the year. And, we have some positive influences to consider in the next six months. One is a 10% increase in mill throughput as a result of the addition of a pebble mill which is now completed. Second is higher grade ore from Santa Maria and Jabali pits. Jabali pit is now operational although order deliveries may be intermittent in the short-term as we work through the first few ore benches, and that's typical for a new pit.

 And, number three, higher gold recoveries. We've added new tankage as part of our plant expansion. So, our budget for 2013 is to process an average of 5,743 tons per day for a total of approximately 2.1 million tons of ore at an average grade of 2.19 grams per ton. Cash operating costs for the second half have been revised downwards by $15 per ounce to -- for a range of $500 to $530 per ounce compared to our previous guidance of $515 to $545 per ounce.

 On the capital side, key projects are well advancing, most significantly our mill expansion is complete. And, year-to-date capital expenditures totaled about $20.2 million, which includes deferred stripping, primarily including Santa Maria's $7.1 million, Jabali capital costs, $8.1 million, improvements to the process plant, $1.9 million, and equipment purchases of just under $1 million. Our team has also been to work on our capital and operating costs. Capital costs at La Libertad are now forecast to be approximately $38.5 million which is a reduction from the original plan of $45.6 million. And, we're also focusing on managing our operating costs, reducing the use of consumables such as cyanide. We've since installed and improved cyanide dosing system in our plant and reducing consumption of mill liners, which we now can see once the pebble crusher is installed, and that will push our cash operating costs down about $12 per ounce.

 Limon mine, open pit and underground mine, have had another really strong quarter, and it has achieved its second-highest quarterly output since B2Gold completed the business combination with Central Sun on March 26, 2009. In Q2, Limon mine produced 14,178 ounces of gold in the second quarter of 2013 compared to 11,668 ounces in the second quarter of 2012. That's a 22% increase. Gold production at Limon mine exceeded budget in both the three-month and six-month periods ending June 30 at a lower than budgeted operating -- cash operating cost. Cash operating cost was $675 compared to the budget of $709 per ounce.

 [Brown's] cash costs was better than budget mainly due to higher gold production from better surface and underground grades, and as in the first quarter, we had a break on consumable costs including energy. That had a slightly positive impact on our cash operating costs. For the full year of 2013, gold production at the Limon mine is expected to be at the top end of the Company's previously announced guidance of 54,000 to 58,000 ounces, and the highlights are -- cash operating cost are now forecast to decrease about $95 to a range of $635 to $655 per ounce compared to our previous guidance of $700 to $750 per ounce, higher grade ore out of both Santa Pancha underground -- and that's at Nueva open pit, and improved throughput and recovery at the process plant by expanding our leach tank capacity, and moving to new, low-volume SAG mill liners which allows us more throughput. Capital expenditures totaled $3.9 million for the quarter including underground development, $1.1 million, deferred strip, $1 million, and other purchases including equipment and plant automation.

 On the cost control side for 2013, the capital expenditures at Limon were originally budgeted to be $21.7 million. We'll reduce that slightly to $20.4 million, but our operating costs have been favorably influenced by better grade, better throughput, and a series of initiatives with our contractors. Overall, the result is a significant decrease in cash operating costs. So, in sum, we see each operation has been able to respond to operational challenges and change in gold price in different ways, but all with good results. Thank you.

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 Clive Johnson,  B2Gold Corp - President and CEO   [6]
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 Thanks, Dale.

 I think now we'll pass it over to Bill Lytle to give us an update from Namibia. There is quite a lot of information in the news release, but perhaps Bill can touch on some of the highlights, some of the activities that are going on down there. We are looking at a trip down to the site just prior to the [Endava] conference. When is that, Ian? Endava is late January?

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 Ian MacLean,  B2Gold Corp - VP of IR   [7]
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 The week of January 27.

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 Clive Johnson,  B2Gold Corp - President and CEO   [8]
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 Would be the trip?

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 Ian MacLean,  B2Gold Corp - VP of IR   [9]
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 Yes.

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 Clive Johnson,  B2Gold Corp - President and CEO   [10]
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 Okay. Just so everyone knows, there is an opportunity there. The analysts who -- those that haven't been to Namibia and perhaps some others as well. So, Bill, if you can give us a quick overview of what's happening there? And, how we're doing opposite moving this thing through construction?

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 Bill Lytle,  B2Gold Corp - Vice President, Country Manager Namibia   [11]
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 Absolutely. Thank you, Clive.

 So, in general, the message which needs to be delivered is on time, on budget still. We still plan to produce gold in Q4, 2014. All of the preliminary construction activities are basically complete. This includes development of all the internal roads, all the Bush clearing which is required for all the service facilities. The mining equipment has arrived at site, and it's being used. We've actually started mining in Q2.

 The mill is moving forward. All of the infrastructure necessary for constructing the mill is complete to include offices, warehouses, shops. At the tailings facility, all of the topsoil has been removed. We are currently in the process of installing liner in the under drain system. We've installed more than 100,000 meters of liner already.

 With the construction camp, the construction camp will be completed this month. The construction camp is built to house as many as 650 people. And, currently, we have just under 200 people working with more than 80% of them being Namibian. And so, in a nutshell, that's where we're at on the Namibian project.

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 Clive Johnson,  B2Gold Corp - President and CEO   [12]
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 Okay. Thanks, Bill.

 Maybe a quick update on Gramalote. We talked about it in the news release, and that's our joint venture with AngloGold Ashanti in Columbia. Anglo is the manager of the project, and it's a good joint venture, and we're coming to a very important milestone in the joint venture. We're finally going to get a view of the economics of Gramalote in the prefeasibility study that will now be completed in the fourth quarter of this year. I think that's very important. We've recently reached agreement with Anglo on a couple very important things. And, that is the strength of our joint venture. We have to unanimously agree programs and budgets in this joint venture, which is a bit unusual for a 51%-49% venture, but that's the nature of the venture. So, we've finally reached agreement on redoing a geological model that is reflective of both Companies' technical views of geology. And, that's been successfully completed and agreed, and we now can use the new geologic model in the prefeasibility study which was a critical part of it.

 Very importantly, we've also agreed to look at three different cases of throughput. In other words, three different capital costs, three different cases of throughput, three different cases of production from Gramalote. We were always of the view that the size of the mill should reflect the size of the reserves. We therefore wanted to make sure we were looking at cases in case some of the hope for exploration success that Anglo seemed to be seeing didn't occur. We didn't want to be stuck with a prefeasibility study that had a very large throughput on a very short mine life. So, we're now getting -- now at an important decision point there. And, in this kind of gold market environment, I think you clearly want to make sure you're looking at various cases in a project to see what the best economics are.

 I know there has been some negativity out there from some shareholders and some analysts perhaps worrying about Gramalote. Is it going to be of high capital cost? It's low-grade. Is it going to be a drain for B2Gold? Is it a good thing? I think those are valid things to ask in this gold market environment, but I think it's very important to point out here that we have invested the [same] amount of money in the project as has Anglo. There are some very positive signs here about metallurgy recently, about coarser grinds. We think we'll probably going to get up back to where we were before which was a better grade and somewhat smaller, but let's wait and see what the economics look like. We're absolutely prepared, as I'm sure Anglo is, to put this project on hold after prefeasibility study if it doesn't make the economic sense in the current gold environment. That's the bottom line. There may be better places for us to expend capital through acquisitions of other opportunities that may be more attractive.

 So, we're not going to get pushed into building Gramalote. That doesn't happen in our joint venture, but we're not going to do it because we invested money into it. I think it's really important our shareholders understand that. We're going to look at it like every other project, and say, is it worth taking this to the next step which would be a feasibility study? Potentially by the end of '14? And then, making a decision whether we go forward. So, we're very keen to see what the economics look like of Gramalote, and we're not yet convinced that it can't be a good solid project. We are about to find out.

 The next thing I'd like to do is to get -- after we finish this part, Dennis is also here and Tom to ask specific questions on Gramalote, if there are more. We gave you some detail in the news release about what's happening there. One thing Mark didn't mention that I did mention in an interview on BNN Today. I don't think he mentioned our all-in sustainable cost per ounce. It's approximately $1,000 per ounce this year is what we are looking at. And, we're looking going forward especially as Ojtikoto comes online and seeing that number come down. So, that's become one of the new import numbers in the industry. Issue of sustainable, and we think ours is good and we intend over time to improve on that number.

 I'm now going to ask Tom to give us a brief summary on what we're doing in exploration. We are responding to the current gold price, as everyone I think is, and Dale talked about some of our responses. We're definitely going to be looking at, where we can, reducing capital expenditures going forward. Obviously, we don't want to do anything that negatively affects the operations, but we have spent a lot of money in the last three years -- well-spent money to increase throughput, as Dale said, increase recoveries, and otherwise improve the operations. We're starting to see the benefit of those expenditures. So, clearly every mine will have sustaining capital. We're going to continue to look at measures to reduce those capital numbers.

 In addition to that, of course, we're looking at exploration and saying, what's the most important exploration to do while we are in this phase of building Ojtikoto? We've always believed in exploration -- everyone knows that. And, had a great track record from Tom and his team. We remain committed to exploration. The cheapest ounces will always be the ones you find. And, for now, we're moving our focus more to exploration around the mine sites for now as we go through this new period of time in the gold price.

 So, I'll just get Tom to hit some of the highlights in what we're doing, and when we can see -- expect to see more results out from some of these exciting projects we're looking at such as Wolfshag and Ojtikoto and some of the stuff at Masbate.

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 Tom Garagan,  B2Gold Corp - SVP of Exploration   [13]
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 Thank you, Clive.

 As you can see in the news release here, we've cut approximately $4 million in the exploration for the rest of the year. This doesn't mean that we aren't going to be busy for the rest of the year with our programs. At Masbate, we are just completing now the Met drilling that we've been doing for the last two months. Collecting samples for further met sampling, specifically on testing the sulfide material and the transition material to see what recoveries we can get out of those and what things we can do to improve recoveries on those.

 In addition to that, once that Met drilling is done, what would be advancing the Montana higher grade deposit to indicated so that we can bring it into the mine plan as -- I'm not saying mine it next year. But, bring it into the long-term mine plan next year. And, we're continuing to advance from a surface point of view, several of the other targets on the properties as people aware, we've got several very good streams set up at [Nanalmize] in the southern half of the property. We're bringing them up to a point where we're actually trenching some new targets as we speak. The results from this work in drilling will probably be available, I would say, in a couple more months.

 At Libertad, all the drilling for underground targets are completed. We're still waiting on results. We drilled down plunge on Jabali antenna, and we drilled down plunge on Montana -- and sorry, not Montana -- Mojon. I'm getting projects mixed up. Senility is setting in. Those results haven't been in yet. We'll release those as they come.

 In addition to that, there are numerous other targets on the Libertad property that we've -- as a result of this discovery at Jabali -- have not really had a chance to advance. The crews have turned their efforts on surface work, advancing a lot of other targets on the property to a point that when we're able to drill them, be it next year or the year after, we're ready to advance those properties to a resource. At Limon, the infill drilling at [Pozol] four and five has now been completed. We're still waiting on results. When the results of those are done, we'll do a new resource model -- indicated resource model for that. And then, turn it over to the engineers that put it into the mine plan. That's the new discovery we made last year.

 Infill drilling was, as expected, for Pozol four and for Pozol five area, we found a lot more unmined material than we expected to find. So, we expect some good news there. In addition to that, we are now drilling mine-related issues at Limon, and that will continue for the next month or so. Again, as in Libertad, there are other targets on the property that have not been advanced as a result of the drilling work, and the crews will be turning their attention to surface work advancing other targets on the property to a point of being able to be drilled again either next year or the following year.

 At Ojtikoto, the infill drilling for Wolfshag is now done. We're waiting for assays in approximately 30 holes. When those assays are in, one, we'll release them to the public, but two, we will start work on completing and inferred model for Wolfshag which is going to be critical to the advancing of Ojtikoto. We think internally that Wolfshag will make a big difference in the mining of Ojtikoto and possibly the sequencing of the Ojtikoto mine. So, the sooner we get that inferred resource done, the sooner we can have a hard look at it. And then, the decision will be made to advance at indicated next year and bring it into the real mine plan.

 In addition to this work, just so you know that I'm not sleeping here, with the cutbacks we're spending a fair bit of time on evaluations. As Clive says, this is an opportune time, and there's three of us here spending almost 100% of our time looking at new acquisitions. Thank you.

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 Clive Johnson,  B2Gold Corp - President and CEO   [14]
------------------------------
 And, part of that acquisitions that we're looking at are exploration opportunities. We remain committed, as I said earlier, to exploration, and our hope is to always have a couple of grassroots projects of high quality. And, that's an interesting opportunity in the industry today because there's a lot of Junior exploration companies that will remain junior exploration companies, or will not make it. But, there's some Junior exploration companies that actually have good projects. And, they need some help.

 And don't forget, we were juniors twice. Bema and B2Gold. So, we understand that, and we could be a very good partner to some juniors as we go through this period of time here and we judge our financial requirements. We do want to be looking for gold in some of the best places in the world. There has never been a better opportunity, in my mind, to do that through joint ventures with juniors. There's clearly opportunities. That's an important part of what we're looking at in acquisitions. Obviously, we're looking at our producers. We're looking at development projects, and we're looking at exploration as well.

 Just another comment. We remain very focused in this Company on our corporate social responsibility programs. We have again had a very successful quarter in terms of our focus, which is on health, education, and sustainable development in all the communities that we work in. Yes, this is a time where everyone's watching all their dollars, but it's important to point out that we think this is a very important part of what we do, and we will continue to work with the communities that have had such great results and I think great relationships in the community as a result. That will be ongoing. We will always have a budget for that type of work. I think it's very important for the industry.

 So, I think that's most of what we wanted to tell you. The bottom line, I guess, is we feel we're well-positioned. The second quarter, we mentioned that we had a few issues to deal with which I think we dealt with extremely well. And, we're responding to the market going forward. We're responding to changing conditions. Focus is to maintain a strong cash position, fund what we're doing, get Ojtikoto built, continue to build a profitable gold mining Company -- which those two words haven't been put together very often lately. A profitable gold mining Company and continue to explore growth through accretive acquisitions and excellent exploration and development work. So, we feel we're on track for doing that.

 And, we'll open it up now for questions.

==============================
Questions and Answers
------------------------------
Operator   [1]
------------------------------
 (Operator Instructions)

 Our first question comes from [Gabriel Gonzales] from Canaccord Genuity. Please go ahead. Your line is now open.

------------------------------
 Gabriel Gonzales,  Canaccord Genuity  - Analyst   [2]
------------------------------
 Hi, good afternoon, good morning. Just wondering when do you expect a dedicated haul road for Jabali to be completed?

------------------------------
 Dale Craig,  B2Gold Corp - Vice President of Operations   [3]
------------------------------
 Yes, the haul road is complete. We are finishing one bridge. That is the sole remaining item to complete on the haul road, and we are expecting that to be done by the end of this month. We have some delays on the civil engineering with that specific bridge. It is an easy detour around it, but it's proceeding nicely now.

------------------------------
 Gabriel Gonzales,  Canaccord Genuity  - Analyst   [4]
------------------------------
 Okay. So would you be able to give us an idea as to what your mining costs including haulage are currently running at La Libertad?

------------------------------
 Dale Craig,  B2Gold Corp - Vice President of Operations   [5]
------------------------------
 Yes. Drop me an e-mail, and I will review that with you. Not a problem.

------------------------------
 Gabriel Gonzales,  Canaccord Genuity  - Analyst   [6]
------------------------------
 Sure. Would you be able to give us a clue as to whether or not you believe there is a material decline expected in cost, once that infrastructure is all in place, relative to what has been reported?

------------------------------
 Dale Craig,  B2Gold Corp - Vice President of Operations   [7]
------------------------------
 Not from the impact specifically at Jabali. If we look at the amount that we are mining out of Jabali in the back half of this year, it runs about 10% of our mill feed, and just under 2 grams per ton. So we have deliberately conservatively planned the development of Jabali and that's reflected in our mine costs. We know though, that our mine costs in the back half of the year at La Libertad as we have indicated will decline slightly.

------------------------------
 Gabriel Gonzales,  Canaccord Genuity  - Analyst   [8]
------------------------------
 Okay. And just one last question. As more high grade material from Santa Maria and Jabali comes online, are you seeing any impact on overall recoveries as well, or are they going up?

------------------------------
 Dale Craig,  B2Gold Corp - Vice President of Operations   [9]
------------------------------
 Yes. Our recovery has been great. The quarter recovery was just over 95%. Looking forward, we haven't modeled all of that high recovery into our projections, but certainly we are taking it into account. We are most happy about Santa Maria. It took a little while for us to get there. With the flow out of the pit and with the grade spread, it has certainly --the finish of July was -- in fact the grade coming out of Santa Maria were nothing short of dramatic.

------------------------------
 Clive Johnson,  B2Gold Corp - President and CEO   [10]
------------------------------
 Just to clarify, do we have a sense of what the percentage at Jabali is going to do, as we go get it to next year?

------------------------------
 Dale Craig,  B2Gold Corp - Vice President of Operations   [11]
------------------------------
 Yes, we are running up to about 17% on Jabali. We will, of course, see how the mine develops and what we can carry on the road there. Obviously, the sooner we bring it on stream, the higher proportion, the better for us.

------------------------------
 Gabriel Gonzales,  Canaccord Genuity  - Analyst   [12]
------------------------------
 Okay. Perfect. Thanks very much for your time, gentlemen.

------------------------------
Operator   [13]
------------------------------
 Thank you. Our following question comes from Paolo Lostritto from National Bank. Please go ahead, your line is now open.

------------------------------
 Paolo   Lostritto  ,  National Bank Financial  - Analyst   [14]
------------------------------
 Good afternoon. Thanks for hosting the call. Mark, I think with regards to your G&A, is that including the stock-based compensation or is that just straight cash?

------------------------------
 Mark Corra,  B2Gold Corp - SVP of Finance and CFO   [15]
------------------------------
 The $3.2 million was straight cash.

------------------------------
 Paolo   Lostritto  ,  National Bank Financial  - Analyst   [16]
------------------------------
 No, no, I meant the guidance that you provided earlier regarding --

------------------------------
 Mark Corra,  B2Gold Corp - SVP of Finance and CFO   [17]
------------------------------
 Oh, on the $7 million? Yes, that is just on a cash basis. There will be some share-based accruals I guess, as we amortize that.

------------------------------
 Paolo   Lostritto  ,  National Bank Financial  - Analyst   [18]
------------------------------
 Okay. And then with regards to the hedges you put in place with the South African rand. If I am doing my math correctly, that should equates to somewhere between $20 million and $30 million in savings on your CapEx relative to the budget. When would you be able to update the market on that -- the progress on the CapEx relative to the current budget? It would be something that you would look to sometime next year?

------------------------------
 Mark Corra,  B2Gold Corp - SVP of Finance and CFO   [19]
------------------------------
 That is correct. We actually just discussed that the other day. And we are really just in the early stages of the project. So I don't think until early next year will we be able to do an update. And I don't think the savings is quite as large as what you are thinking it may be on the rand Hedge.

------------------------------
 Paolo   Lostritto  ,  National Bank Financial  - Analyst   [20]
------------------------------
 And lastly, with regards to the remainder, the $100 million, can you kind of discuss what some of the other requirements, in order to be able to draw down the $400 million left?

------------------------------
 Mark Corra,  B2Gold Corp - SVP of Finance and CFO   [21]
------------------------------
 Yes. We have just one outstanding requirement really, and that is perfecting the security over the Limon mine. It is close to being done, but it is kind of an odd situation where Royal Gold has a royalty on that project. And we need to complete that as well.

------------------------------
 Clive Johnson,  B2Gold Corp - President and CEO   [22]
------------------------------
 But we are expecting the banks to be open to a waiver as required.

------------------------------
 Paolo   Lostritto  ,  National Bank Financial  - Analyst   [23]
------------------------------
 Thank you.

------------------------------
 Mark Corra,  B2Gold Corp - SVP of Finance and CFO   [24]
------------------------------
 All the other securities is in place.

------------------------------
 Clive Johnson,  B2Gold Corp - President and CEO   [25]
------------------------------
 We have got tons of securities. They have got way too much security, actually. (Laughter)

------------------------------
 Paolo   Lostritto  ,  National Bank Financial  - Analyst   [26]
------------------------------
 Thanks, gents.

------------------------------
Operator   [27]
------------------------------
 Thank you. The following question comes from [Ovais Habib] from Scotiabank. Please proceed, your line is now open.

------------------------------
 Ovais Habib,  Scotiabank - Analyst   [28]
------------------------------
 Congratulations on a great quarter.

------------------------------
 Clive Johnson,  B2Gold Corp - President and CEO   [29]
------------------------------
 Thanks, Ovais.

------------------------------
 Ovais Habib,  Scotiabank - Analyst   [30]
------------------------------
 Just a -- first question, in terms of exploration front, you have budgeted $40 million for the -- for 2013. And I believe you spent or you are going to be spending on the four core projects approximately $25 million to $30 million. I am wondering if the rest, the $10 million, is that for other projects for the rest of the year, or is that more towards a spend on Gramalote?

------------------------------
 Dale Craig,  B2Gold Corp - Vice President of Operations   [31]
------------------------------
 Some of that is on Gramalote, but the bulk of that is the other projects. I think the $40 million is a misnomer, in that part of that is second phase projects that we believe we are looking at also cutting.

------------------------------
 Ovais Habib,  Scotiabank - Analyst   [32]
------------------------------
 All right. Thanks. And just on a question on Masbate. Now Masbate, you -- the grade came in at 1.17, which is considerably higher than what we were expecting. Is that something that you see continuing going forward? Is that tapering off in the remainder of the year? How do you see grade gram moving forward from here?

------------------------------
 Dale Craig,  B2Gold Corp - Vice President of Operations   [33]
------------------------------
 Especially over the next three months, we will probably have pretty strong grade in Masbate. Overall for the year, what we would forecast average grade would be about 1.13 grams per ton against our prior anticipation of just over 1.1 grams per ton.

------------------------------
 Ovais Habib,  Scotiabank - Analyst   [34]
------------------------------
 Okay. And going into 2013 -- or 2014, would you see that around the 1.1 gram then going back to 1.1?

------------------------------
 Dale Craig,  B2Gold Corp - Vice President of Operations   [35]
------------------------------
 Actually, our forecast, and I will stress the word forecast at this point, because we are going through our budgeted duration right now, our forecast is for continued good grade through the year of 2014, and we are carrying 1.18 grams. So significantly better.

------------------------------
 Ovais Habib,  Scotiabank - Analyst   [36]
------------------------------
 Okay. Sounds good. Thank you very much. That's it for me.

------------------------------
 Clive Johnson,  B2Gold Corp - President and CEO   [37]
------------------------------
 Thanks, Ovais.

------------------------------
Operator   [38]
------------------------------
 Thank you. Our following question comes from Jeff Killeen from CIBC. Please go ahead, your line is now open.

------------------------------
 Jeff Killeen,   CIBC World Markets   - Analyst   [39]
------------------------------
 Good afternoon. Thanks for taking my question. First off, you had mentioned that you would be assessing Gramalote, once you have some of the assessment work done. Just wondering if you have sort of a benchmark return on that project that you would need to see, in order to go forward with it at current prices?

------------------------------
 Mark Corra,  B2Gold Corp - SVP of Finance and CFO   [40]
------------------------------
 Well, we haven't really talked about that a whole lot, to be honest with you. And truly we are waiting for the numbers, and then we will look at it from the point of view of our view of a long-term gold price, which is pretty conservative. And we will look at it from the point of view of country risk, all the other things we evaluate. So let's get the numbers first, and then we will evaluate that a bit more.

------------------------------
 Jeff Killeen,   CIBC World Markets   - Analyst   [41]
------------------------------
 And on that, would you still be using $1350 for your long-term price assumption for Gramalote?

------------------------------
 Clive Johnson,  B2Gold Corp - President and CEO   [42]
------------------------------
 Yes. (Multiple Speakers).

------------------------------
 Mark Corra,  B2Gold Corp - SVP of Finance and CFO   [43]
------------------------------
 Currently, we would continue with that assumption. I mean, it depends on what happens for the rest of the year, and what other people such as yourself would be forecasting for the future price.

------------------------------
 Jeff Killeen,   CIBC World Markets   - Analyst   [44]
------------------------------
 Okay. Thanks. And you had mentioned in terms of M&A or potential joint ventures. Do you have -- have your ring-circled particular geographies that you would be sticking to for that consideration?

------------------------------
 Tom Garagan,  B2Gold Corp - SVP of Exploration   [45]
------------------------------
 Yes. We just look for good projects. The geography is -- as long as you don't get anybody killed, and we can make money, and get the money out of the country, we will look anywhere. Number one, it is a good project. So no, there is no particular geography. We have never done it. Never did it at [Bema], and we won't be doing it at B2 either.

------------------------------
 Clive Johnson,  B2Gold Corp - President and CEO   [46]
------------------------------
 Having said that, there is a few places that we won't go, but we won't say that in the conference call. (Laughter).

------------------------------
 Jeff Killeen,   CIBC World Markets   - Analyst   [47]
------------------------------
 Okay. Fair enough. And you indicated that you would be willing to go to fairly early stage projects. How early a stage of a project would you be looking for? Something just in its infancy? Would it have to have at least a preliminary resource complete? Can you give us a sense on that?

------------------------------
 Tom Garagan,  B2Gold Corp - SVP of Exploration   [48]
------------------------------
 The project we are looking at are at all stages. The number one is obviously a producer. And the next thing we are looking at is, projects that we can -- the development team or the team is building Ojtikoto, at the end of next year has finished their job. So we are going to be -- one of the things we are all looking at is something for them to do one that's done. Sounds like a weird way to put it, but essentially we are looking at development projects that we can take that team, and put them to good use right afterwards.

 Then in terms of earlier stage projects, they just have to be a good project, whether it has got a resource on it, whether it has got one drill hole on it, or it has got just really good geology. It has got to be something that has got an indication of a sizable deposit, which we think is -- will have a great potential to be a good mine. And I will use it as an example, when we picked up [Kupla], it had 15, 16 drill holes on it. That was it. So it really depends on the project. Just follow-up a little bit on Tom's comment. We -- you mentioned the development team. That development team at Ojtikoto, they may very well move over, and do an expansion on Masbate as one alternative. There is lots of different things. But we would like to see another -- if the right deal comes along, we would like to have another project in the pipeline. This is what we do. So if we find something now that is an accretive acquisition and meets the feasibility study. And subsequent to that, it would be ready to be developed once the team is finished Ojtikoto, that's great. We don't feel the pressure to do another deal, that is when you usually do a bad deal. We are very selective, we will be even more selective.

 But if we can have another project in the pipeline -- there is a misunderstanding sometimes about us, when people look at the geography, and where we are in the world. And some people say, well, you are strung all over the place, how do you do that? Should I be worried about it? It is a valid question. If you are talking to someone who has got two mines in Ontario, and suddenly they are in Namibia, you have -- I think it is valid to say, how you are going do this? We are doing several international projects. It is not only our ability to do it, as demonstrated in the past, it is the stage of projects.

 We acquired Masbate which was largely de-risked. It was well-built mine with good people. And we are making that -- we are improving it as we go. Ojtikoto has got the team that built the Libertad. The team that built [Kupla], that built [Jiliad], are building it. We are very comfortable that. And the Nicaraguan mines with great leadership there and from here, are doing a great job. So we don't feel spread thin. We feel busy. And that's why I think support that people realize this is what we do. And we are more than capable of taking on one or two additional projects over the next number of years, if and when they become available or accretive and are finance-able.

------------------------------
 Jeff Killeen,   CIBC World Markets   - Analyst   [49]
------------------------------
 Great. And then final question then, in regards to potential projects, would you still be focused solely on gold? Would you consider polymetallic? What's your thought there?

------------------------------
 Clive Johnson,  B2Gold Corp - President and CEO   [50]
------------------------------
 We are a precious metals company. If there is a major gold project with a copper kicker, that is fine. But our focus at B2Gold will be precious metals, as the primary metals we produce.

------------------------------
 Jeff Killeen,   CIBC World Markets   - Analyst   [51]
------------------------------
 Great. Thanks very much.

------------------------------
Operator   [52]
------------------------------
 Thank you.

 (Operator Instructions)

 The following question is from Kerry Smith from Haywood Securities. Please go ahead, your line is now open.

------------------------------
 Kerry Smith,  Haywood Securities - Analyst   [53]
------------------------------
 Thank you. Mark, you made a comment in your opening discussion about the 118,000 ounces of hedging. Is that the same hedging that is related to the calls that you sold to the credit facility at [$1733] an ounce? Is that the actual number?

------------------------------
 Mark Corra,  B2Gold Corp - SVP of Finance and CFO   [54]
------------------------------
 No. That is forward that I am talking about there.

------------------------------
 Kerry Smith,  Haywood Securities - Analyst   [55]
------------------------------
 Those are forwards? Okay.

------------------------------
 Mark Corra,  B2Gold Corp - SVP of Finance and CFO   [56]
------------------------------
 I didn't mention the collars.

------------------------------
 Kerry Smith,  Haywood Securities - Analyst   [57]
------------------------------
 So how many ounces have been sold through the calls at [$1733] then?

------------------------------
 Mark Corra,  B2Gold Corp - SVP of Finance and CFO   [58]
------------------------------
 Just give me a second. I think it's about 60,000.

------------------------------
 Kerry Smith,  Haywood Securities - Analyst   [59]
------------------------------
 And then, just while you are looking for that, the forwards that you have sold, they are at approximately [$1500] an ounce I think you said?

------------------------------
 Mark Corra,  B2Gold Corp - SVP of Finance and CFO   [60]
------------------------------
 Yes. Based on a 10 to 1 exchange rate.

------------------------------
 Kerry Smith,  Haywood Securities - Analyst   [61]
------------------------------
 Okay. At 10 to 1. And would we just assume that those -- are those hedges -- specifically dedicated to Ojtikoto, or can you use them at corporately or how are they set up?

------------------------------
 Mark Corra,  B2Gold Corp - SVP of Finance and CFO   [62]
------------------------------
 They are specifically dedicated to Ojtikoto, as is the collars. It's actually 54,000 ounces on the calls.

------------------------------
 Kerry Smith,  Haywood Securities - Analyst   [63]
------------------------------
 Okay. So 54,000 ounces sold forward at [$1733]? And are they sold over the same -- ?

------------------------------
 Mark Corra,  B2Gold Corp - SVP of Finance and CFO   [64]
------------------------------
 Sorry, 36,000. I looked at the wrong number, 36,000.

------------------------------
 Kerry Smith,  Haywood Securities - Analyst   [65]
------------------------------
 Okay. (Multiple Speakers). And those are for three years. So when do they start then?

------------------------------
 Mark Corra,  B2Gold Corp - SVP of Finance and CFO   [66]
------------------------------
 2015 to 2017. (Multiple Speakers).

------------------------------
 Kerry Smith,  Haywood Securities - Analyst   [67]
------------------------------
 So 20 -- (Multiple Speakers).

------------------------------
 Mark Corra,  B2Gold Corp - SVP of Finance and CFO   [68]
------------------------------
 In a year. And I hope I get called away.

------------------------------
 Kerry Smith,  Haywood Securities - Analyst   [69]
------------------------------
 Okay. Yes. They are evenly split, like by year, like --

------------------------------
 Mark Corra,  B2Gold Corp - SVP of Finance and CFO   [70]
------------------------------
 Correct.

------------------------------
 Kerry Smith,  Haywood Securities - Analyst   [71]
------------------------------
 And would that be the same for the 118,000 ounces, that' is 2015 to 2018, I guess, is it?

------------------------------
 Mark Corra,  B2Gold Corp - SVP of Finance and CFO   [72]
------------------------------
 Yes. They are 25,000 in 2018, and the remainder is evenly split. It is actually detailed, if you look at our financial statements under Note 15.

------------------------------
 Kerry Smith,  Haywood Securities - Analyst   [73]
------------------------------
 Oh is it? Okay. So I will see it there. Okay, fine. (Multiple Speakers). I didn't see that. Okay, so note 15. Okay, that helps. And then, second question, I am not sure who can answer this, but maybe it is Clive. Are you planning to actually report all-in sustaining costs, like formerly in your MD&A? I know you didn't do it this quarter, but a lot of guys are doing it. Will you do that on a go forward basis?

------------------------------
 Clive Johnson,  B2Gold Corp - President and CEO   [74]
------------------------------
 We are looking at it, Kerry. There still seems to be a lot of differences on the way people are reporting that number. We have been looking at, I guess some of the different companies that have come out with it. And they are not consistent.

------------------------------
 Kerry Smith,  Haywood Securities - Analyst   [75]
------------------------------
 Right.

------------------------------
 Dale Craig,  B2Gold Corp - Vice President of Operations   [76]
------------------------------
 So we are on the fence on that one.

------------------------------
 Clive Johnson,  B2Gold Corp - President and CEO   [77]
------------------------------
 Well, I think the answer is yes. We think it is valid to report that and appropriate. We just want to figure out the best way, and to try and find the right way to do it. We are comfortable with this, with the number we gave out here, and the sustainable number of approximately $1000. And we are looking at how we want to release that going forward.

------------------------------
 Kerry Smith,  Haywood Securities - Analyst   [78]
------------------------------
 Right. Just remind me, are you a member of the Royal Gold (inaudible). I can't remember, Clive?

------------------------------
 Clive Johnson,  B2Gold Corp - President and CEO   [79]
------------------------------
 No. Not as of yet. But --

------------------------------
 Kerry Smith,  Haywood Securities - Analyst   [80]
------------------------------
 So you are not tied into using their definition if you didn't want to? And --

------------------------------
 Mark Corra,  B2Gold Corp - SVP of Finance and CFO   [81]
------------------------------
 We did base our number on their definition, though, Kerry.

------------------------------
 Kerry Smith,  Haywood Securities - Analyst   [82]
------------------------------
 Right. Okay. So that $1000 is based on that? Okay. And what is the status of the SAG mill insurance claim now, Mark?

------------------------------
 Mark Corra,  B2Gold Corp - SVP of Finance and CFO   [83]
------------------------------
 Or -- (Multiple Speakers).

------------------------------
 Dale Craig,  B2Gold Corp - Vice President of Operations   [84]
------------------------------
 The SAG mill claim, we are exploring our options going forward.

------------------------------
 Clive Johnson,  B2Gold Corp - President and CEO   [85]
------------------------------
 That's a very good way to --

------------------------------
 Dale Craig,  B2Gold Corp - Vice President of Operations   [86]
------------------------------
 To not answer the question?

------------------------------
 Clive Johnson,  B2Gold Corp - President and CEO   [87]
------------------------------
 Yes. That is a good way to answer the question.

------------------------------
 Dale Craig,  B2Gold Corp - Vice President of Operations   [88]
------------------------------
 I just think more directly -- well, we think that there is a significant potential claim there. And we are just deciding how to pursue it. But we think that that's what you are supposed have insurance is for things like this when the SAG mill went down and business interruption. So I think we are inclined to pursue it. We think there could be -- there is a lot of money at stake here. So I think is it fair to say, now we are saying would be inclined to pursue it?

------------------------------
 Clive Johnson,  B2Gold Corp - President and CEO   [89]
------------------------------
 I think we are inclined to pursue it. I think there is issues over jurisdictional issues, multi-party causation issues, all that stuff is being analyzed and examined.

------------------------------
 Kerry Smith,  Haywood Securities - Analyst   [90]
------------------------------
 Okay. Okay. Fine. And Tom, just under regional exploration on Masbate, have you done enough work regionally now that you have had a project for I guess almost six months to kind of get a better sense as to what you think the regional potential is? Or what can you tell me regionally about what you think there now?

------------------------------
 Tom Garagan,  B2Gold Corp - SVP of Exploration   [91]
------------------------------
 Well, regionally, Kerry, you were at Masbate weren't you?

------------------------------
 Kerry Smith,  Haywood Securities - Analyst   [92]
------------------------------
 Yes. Not when owned it, before that though.

------------------------------
 Tom Garagan,  B2Gold Corp - SVP of Exploration   [93]
------------------------------
 So as you go south from Masbate to the southern deposits, and you cross through the tailings pond, south of that, that whole area is covered by -- very similar to Libertad actually -- by late volcanic cover that is incised by some streams. And those streams are quite in almost engulfed. There is fair bit of small mine activity in there. And then, as you get to the south end of the property, you no longer have that cover again. In that area, the volcanics, the mineralization is hosted within there is also exposed there. And we have been -- our surface work has been focused in that area. There's a very strong stream sediment in all of these. And we have recently made a -- well, I won't say discovery yet because we are just trenching it, but we have found other veins in the area that have the size potential to be mined. So if you asked me, honestly, I would say that I think the potential for Masbate to grow its resource now is greater than I thought, when we first picked up the project.

------------------------------
 Kerry Smith,  Haywood Securities - Analyst   [94]
------------------------------
 Okay.

------------------------------
 Clive Johnson,  B2Gold Corp - President and CEO   [95]
------------------------------
 Good question, Kerry because I haven't heard that yet. So that's great.

------------------------------
 Kerry Smith,  Haywood Securities - Analyst   [96]
------------------------------
 (Laughter). Are you using your next marketing campaign, Clive? (Laughter). And just I think -- the only other question I had if I could, maybe Mark can answer. Just gold sales versus the production at Masbate for the six-months, there was quite a big difference -- is that the inventory issue that you were alluding to earlier, where they had bullion just basically stored on-site, and you just kind of cleaned that up? Is that why that number is like that?

------------------------------
 Mark Corra,  B2Gold Corp - SVP of Finance and CFO   [97]
------------------------------
 No. The big difference was that our acquisition date officially was January 16. And they didn't sell any gold since about late December, so they had about I think 30,000 ounces available for sale. No not quite that much, but 20,000 or something available for sale when we did acquire them.

------------------------------
 Kerry Smith,  Haywood Securities - Analyst   [98]
------------------------------
 Okay. So they just had a lot of gold in inventory that had not been sold then?

------------------------------
 Mark Corra,  B2Gold Corp - SVP of Finance and CFO   [99]
------------------------------
 Correct.

------------------------------
 Kerry Smith,  Haywood Securities - Analyst   [100]
------------------------------
 Okay.

------------------------------
 Mark Corra,  B2Gold Corp - SVP of Finance and CFO   [101]
------------------------------
 A lot of that was at the refinery.

------------------------------
 Kerry Smith,  Haywood Securities - Analyst   [102]
------------------------------
 Okay. Great. Okay. That's great. Thanks a lot.

------------------------------
Operator   [103]
------------------------------
 Thank you. Our following question comes from Chris Thompson with Raymond James. Please go ahead, your line is now open.

------------------------------
 Chris Thompson,  Raymond James - Analyst   [104]
------------------------------
 Thank you. Good quarter. Congratulations. One quick question relating to Jabali, the Antenna zone. Can you give us an update as far as the permitting is going?

------------------------------
 Dale Craig,  B2Gold Corp - Vice President of Operations   [105]
------------------------------
 Yes. We have not begun permitting yet in country, although we are doing the groundwork for it now with the population inventory. So we are starting to put the wheels in motion, but we haven't become active with the permitting process with the government yet.

------------------------------
 Clive Johnson,  B2Gold Corp - President and CEO   [106]
------------------------------
 We are looking that the -- (Multiple Speakers).

------------------------------
 Dale Craig,  B2Gold Corp - Vice President of Operations   [107]
------------------------------
 I would like to move that forward coming into mid-2014. We have some good indications of what we'd like to do in that area. We have some really good ideas. And all of those points to moving forward with Jabali Antenna as quickly as possible.

------------------------------
 Chris Thompson,  Raymond James - Analyst   [108]
------------------------------
 Is there a chance we might see it middle towards the end of next year? Production that is from Antenna?

------------------------------
 Dale Craig,  B2Gold Corp - Vice President of Operations   [109]
------------------------------
 I think it be really premature to put a timeline on that now, because as you know, we are adjacent to a community there. But I would certainly like to see us moving forward say, in the back half of 2014. The reason our interest is in Jabali Antenna is that we have had a really good results back from our [capability] studies. Which means the zone of the influence from the pit is significantly reduced, which in turn reduces the social impact in the area. So suddenly this pit becomes a whole lot more achievable. And that is what is spurring our interest.

------------------------------
 Clive Johnson,  B2Gold Corp - President and CEO   [110]
------------------------------
 And then obviously underground is a distinct possibility for Antenna in the future.

------------------------------
 Chris Thompson,  Raymond James - Analyst   [111]
------------------------------
 Perfect. Thank you very much.

------------------------------
Operator   [112]
------------------------------
 Our next question comes from Kerry Smith with Haywood Securities. Please go ahead.

------------------------------
 Kerry Smith,  Haywood Securities - Analyst   [113]
------------------------------
 Okay. Thanks for taking another follow-up. One other question, Mark, just on your G&A going forward, what would the G&A look like for 2014?

------------------------------
 Mark Corra,  B2Gold Corp - SVP of Finance and CFO   [114]
------------------------------
 Our projections are that it would be similar to this year, which is around -- I think we are estimating around $24 million, $25 million? That excludes the share-based payments.

------------------------------
 Kerry Smith,  Haywood Securities - Analyst   [115]
------------------------------
 Right. Right. And so that is kind of a steady-state go forward number, at least in for the next couple of years then?

------------------------------
 Mark Corra,  B2Gold Corp - SVP of Finance and CFO   [116]
------------------------------
 Unless we do another acquisition, yes.

------------------------------
 Kerry Smith,  Haywood Securities - Analyst   [117]
------------------------------
 (Laughter). All right. Okay. But I think you were suggesting in your comments that it is going to be around $7 million in Q3. Was that right?

------------------------------
 Mark Corra,  B2Gold Corp - SVP of Finance and CFO   [118]
------------------------------
 Yes.

------------------------------
 Kerry Smith,  Haywood Securities - Analyst   [119]
------------------------------
 Yes, okay. Great. Thanks a lot.

------------------------------
 Clive Johnson,  B2Gold Corp - President and CEO   [120]
------------------------------
 Kerry, we are going to have to invoke our three question maximum next time -- you got away with a couple extra there so.

------------------------------
 Kerry Smith,  Haywood Securities - Analyst   [121]
------------------------------
 That's what I dialed in at the end, to see if I could get in again. Thanks. (Laughter).

------------------------------
 Clive Johnson,  B2Gold Corp - President and CEO   [122]
------------------------------
 Maximum three questions, minimum two.

------------------------------
 Dale Craig,  B2Gold Corp - Vice President of Operations   [123]
------------------------------
 Just change your name.

------------------------------
 Kerry Smith,  Haywood Securities - Analyst   [124]
------------------------------
 (Laughter).

------------------------------
Operator   [125]
------------------------------
 Thank you. We have no further questions registered at this time. I would now like to turn the meeting over to Mr. Johnson.

------------------------------
 Clive Johnson,  B2Gold Corp - President and CEO   [126]
------------------------------
 Okay. Well, thanks. It is (inaudible) of summer, but thanks for you -- for those that called in. And hopefully, we have given you a very good recounting of the quarter. And hopefully a good overview of where we are going forward. So thank you very much for your time, and enjoy the rest of the summer. Thank you, Marcus.

------------------------------
Operator   [127]
------------------------------
 Thank you. The conference has now ended. Please disconnect your lines at this time, and we thank you for your participation.




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