Back River - Canada
Following the acquisition of Sabina Gold & Silver in April 2023, B2Gold acquired Sabina’s 100% owned Back River Gold District located in Nunavut, Canada. The Back River Gold District consists of 5 mineral claims blocks along an 80km belt. Construction is underway at the most advanced project in the district, the Goose Project, and is on schedule for first gold pour in the first quarter of 2025.
At US$1,600 gold, a March 2021 Updated Feasibility Study on the Goose Project delivers an after-tax NPV5% of C$1.1 billion and an after-tax IRR of 27.7%. At 6 g/t Au, these are the highest grade undeveloped open pits in the world.
B2Gold recognizes that respect and collaboration with the Kitikmeot Inuit Association is central to the license to operate in the Back River Gold District and will continue to prioritize developing the project in a manner that recognizes Inuit priorities, addresses concerns and brings long-term socio-economic benefits to the Kitikmeot Region. B2Gold looks forward to continuing to build on its strong collaboration with the Kitikmeot Inuit Association and Kitikmeot Communities.
Construction at the Goose Project continues to progress on track, with the project remaining on schedule to pour first gold in the first quarter of 2025. Concrete and steel works in the mill area continue to progress ahead of schedule. Exterior cladding of the mill building and truck shop is complete and cladding of the power house will commence in the first quarter of 2024. Enclosure of these buildings has allowed for work to continue through the colder months and remain on schedule. Additionally, the ball mill will be set in place in the first quarter of 2024, approximately four months ahead of schedule, and the focus will switch to piping, electrical, and mechanical systems as materials begin to arrive via the winter ice road (“WIR”) from the Marine Laydown Area (“MLA”). Crews for installation of piping, electrical, and mechanical systems have been mobilized and will work within the enclosed workshops and buildings as the site ramps up to peak 2024 construction season. Progress to date has considerably de-risked the Goose Project as the site ramps up to the peak 2024 construction season.
Following the successful completion of the 2023 sealift, construction of the 163 km WIR between the MLA and the Goose Project is being finalized. The WIR is scheduled to be fully operational by February 23, 2024, transporting all required materials from the MLA to the Goose Project site by the end of April 2024, keeping the Goose Project on schedule to pour first gold in the first quarter of 2025.
After completing a detailed review of the Goose Project design, materials, and construction schedule as part of the 2024 budgeting process, the Company has revised the total construction capital estimate from C$800 million to C$1,050 million. Most of the increase in the construction capital estimate relates to underestimated labour and site operating costs in the feasibility study, along with additional general inflationary impacts on construction materials, consumables, and transportation costs. In addition, a detailed review of the project design has identified deficiencies in project components including power generation and distribution, laboratory, piping, and controls and instrumentation, which are being corrected to deliver a reliable operation. In 2024, B2Gold expects to incur approximately C$280 million in construction capital costs. Future construction cost variance is expected to be minimal as over half of the construction capital costs to be incurred in 2024 are related to labour in order to bring the project close to commissioning by the end of the year, and all major components have been purchased or are under contract. In the fourth quarter of 2023 and post-acquisition to December 31, 2023, the Company incurred $126 million (C$171 million) and $282 million (C$381 million), respectively for construction activities at the Goose Project.
In addition, the net cost of open pit and underground development, deferred stripping, and sustaining capital expenditures to be incurred prior to first gold production is estimated at approximately C$200 million (including approximately C$125 million of direct mining costs related to open pit and underground development). The cost of these initiatives is primarily related to optimization changes in the underground mine plan as a result of switching the underground mining method to long-hole stoping and prioritizing ore from the Umwelt crown pillar area ahead of the zones below. It is anticipated that the increase in underground development costs will be offset during operations through lower sustainable operating costs than could be achieved with the cut-and-fill underground mining method. Additionally, B2Gold has elected to advance open pit mining of the Echo Pit, which is underway and will produce construction fill, stockpile ore, and provide tailings storage capacity. Open pit mining of the Umwelt Pit is expected to commence later in the first quarter of 2024 and will produce much of the commissioning ore as well as future tailings storage. In 2024, B2Gold expects to incur approximately C$170 million in open pit and underground development, deferred stripping, and sustaining capital expenditures.
Goose Project Construction Updates:
Marine Laydown Area
Following the acquisition of Sabina, the MLA located on Bathurst Inlet, Nunavut was reorganized to maximize space for the 2023 sealift. Additionally, the fuel tank containment area at the MLA was enlarged to facilitate increased storage. The MLA has an approximately 70 person camp, a 3,000 foot gravel airstrip and heliport, and over 65,000 meters2 of outdoor storage area. The purchasing of materials and supplies needed to support the 2024 construction campaign has been completed and all materials provided to the ports for the 2023 sealift, which was successfully completed in mid-October 2023 with a total shipping volume of 90,000 cubic meters of dry cargo and 24,000,000 liters of arctic grade diesel fuel. This includes all planned material sealift materials required for the successful construction, commissioning, and mining of the Goose Project. Current activities at the MLA include maintenance and preparation of the WIR construction and haulage fleet and staging all materials for shipment on the WIR to the Goose Project site. Additional materials identified will need to be flown to site on an as-needed basis.
Accommodation Complex
Phase 1 of the accommodation complex opened in July 2023, including sleeping quarters, office area, medical center, gymnasium, kitchen and water treatment. Phase 1 of the accommodation complex includes 310 beds at the permanent site location, which together with the 160 beds located at the existing exploration camp, provide the necessary accommodations to support accelerated construction, mining and exploration activities to ensure an on-time project completion. Phase 2 of the accommodation complex will further expand the permanent camp. Phase 2 materials are at the MLA and are ready for transport to the Goose Project site and will be integrated into the complex prior to the 2024 summer construction season.
Concrete and Steel Work
Over 2,000,000 kilograms of structural steel and approximately 500,000 kilograms of steel has arrived at site. Erection of the structural steel for the mill area, power house and truck shop is well underway, and exterior cladding of the mill and reagent areas and the truck shop are complete. Enclosure of these buildings has allowed for work to continue through the colder months and remain on schedule. The first concrete pour was completed in July 2023, with approximately 40% of the 2023 concrete foundations and pads complete within the mill area, powerhouse and truck shop as of September 30, 2023. Concrete and steel installations in the fourth quarter of 2023 focused on detailed mill plinths and structural supports in preparation for mill installation. Mill sole plates have been installed and grouted and the mill will be set in the first quarter of 2024, approximately four months ahead of schedule. Crews for installation of piping, electrical, and mechanical systems have been mobilized and will work within the enclosed workshops and buildings as the site ramps up to the peak 2024 construction season.
Airstrip
Earthworks necessary to extend the airstrip were completed in September 2023. The extension of the airstrip to 5,000 feet allows large, capacity, fully loaded passenger planes to land at the Goose Project during the 2024 construction campaign. B2Gold expects that this will make employee and contractor rotations and supplying the project site from Edmonton significant easier and will further de-risk the project.
Nunavut: Canada's Newest Mining Friendly Territory
On April 1, 1999, the Territory of Nunavut was formed. The groundwork was laid by the signing of the Nunavut Agreement (the “Agreement”) in 1993 between Inuit of the Nunavut Settlement Area and Her Majesty the Queen in right of Canada. As a result of the Agreement, Inuit are the largest landowners in the Territory and a process of environmental assessment and permitting was established. Mineral resource development remains an important economic driver in the Territory. The development of mining projects in the West Kitikmeot region has far reaching impacts, not only for our shareholders but also for the government and residents of the Territory. The Territory has a well established and sophisticated environmental review process allowing all parties to participate in open and transparent review processes. The first project at Back River, the Goose Project, has progressed through this process and is now fully authorized for construction and operations. The development of the Goose Project opens the Back River Gold District for opportunities yet to be discovered.
Additionally, a 20-year renewable land use agreement (Framework Agreement) has been signed with the Kitikmeot Inuit Association which includes an Inuit Impact and Benefit Agreement. Strong support for the Project has been shown by Kitikmeot communities who contribute to the ongoing development of the Project in an environmentally and socially responsible manner.
Supporting documents:
For the latest details and news releases pertaining to Back River:
- Click here for B2Gold’s Q4 and Full Year 2023 Earnings (dated February 21, 2024)
- Click here for B2Gold's news release: B2Gold Announces Positive Exploration Drilling Results from its Inaugural Drilling Campaign at the Back River Gold District in Nunavut and Provides an Update on Construction and Mining at the Goose Project (dated November 21, 2023)
- Click here for B2Gold’s news release: B2Gold Provides Construction Update for the Goose Project in Nunavut, Canada; Construction on Budget and on Track to Pour First Gold in Q1 2025 (dated September 18, 2023)
- Click here for B2Gold’s news release: B2Gold Provides Construction Update for the Goose Project in Nunavut, Canada (dated June 23, 2023)
For a more detailed overview of the Back River Gold District, please refer to the following most recent company documents:
- Click here for B2Gold’s 2024 Annual Information Form (dated March 14, 2024)
- Click here for B2Gold’s Q4 and Full Year 2023 Management Discussion & Analysis (dated December 31, 2023)
- Click here for B2Gold’s Q4 and Full Year 2023 Financial Statements (dated December 31, 2023)
