Otjikoto sitting on a gold mine

B2Gold in 2020 pumped nearly N$1 billion into the development of the Otjikoto mine.

04 March 2021 | Business

Jo-Maré Duddy – B2Gold’s Otjikoto mine is expected to reach record-level production this year and through to 2024, the Canada-based low-cost international senior gold producer said on the Namibian Stock Exchange (NSX).

The mine, about 300 km north of Windhoek, will produce between 190 000 and 200 000 ounces of gold in 2021, about 16% more than last year. This falls in the range of Otjikoto’s annual production record of 191 534 ounces achieved in 2017, B2Gold said in its latest full-year annual results.

B2Gold, which is also listed on the Overall Index of the NSX, owns 90% of Otjikoto through its subsidiary, B2Gold Namibia (Pty) Ltd. The local empowerment company, EVI Mining, owns the rest.

B2Gold attributed the expected increased production in 2021 to high-grade ore which is scheduled to be sourced from Phase 3 of the Wolfshag Pit in the second half of this year.

Commenting on higher expected production through to 2024, B2Gold said: “Production from Wolfshag underground is expected to commence in early 2022 and will supplement ore from the Otjikoto pit, as well as existing medium and low-grade stockpiles for approximately three years based on current estimates.”

B2Gold’s capital expenditure at Otjikoto last year totalled US$67 million, or nearly N$1 billion.

The group’s exploration budget for 2021 is about US$66 million. “Exploration will focus predominantly in Mali, other operating mine sites in Namibia and the Philippines and grassroots exploration programmes around the world,” B2Gold said.

ECONOMIC CONTRIBUTION

The Bank of Namibia’s (BoN) economic growth forecasts reflect B2Gold’s projections. In its latest Economic Outlook, released last week, the central bank forecast growth of 0.1% for metal ores this year, followed by 3.7% in 2022.

Metal ores are projected to have grown by -12.4% last year, followed by a contraction of 0.1% in 2019, based on 2015 constant prices. In 2018, the subsector grew by 0.8%. In 2017 and 2018, it grew by -26.3% and -34.3% respectively.

At current prices, the BoN expects metal ores to contribute nearly N$5.4 billion to the gross domestic product (GDP) in 2021, followed by about N$5.84 bilion next year.

“Growth in metal ores is to be supported by higher output from the gold subsector, which is expected to offset lost production in zinc and copper subsectors,” the BoN said.

Gold carries the biggest weight in metal ores.

Besides B2Gold, the Navachab mine near Karibib also produces gold. QKR Namibia Mineral Holdings, a subsidiary of UK-based QKR Corp Limited, owns 92.5% of Navachab, while JG Investments owns the rest. JG Investments is a subsidiary of Epangelo Mining Company, owned by the Namibian government.

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