B2Gold releases PEA for scaled down Gramalote project in Colombia

The project is given an after-tax net present value of $778 million and an after-tax internal rate of return of 20.6%.

B2Gold (TSX: BTO) has outlined the economic potential of the now 100% owned Gramalote project in Antioquia department, Colombia, that would be developed into a medium-scale, low-cost gold mine operating for at least a decade.

The project was previously held under a 50/50 partnership with AngloGold Ashanti, but its development was halted by the joint venture in late 2022. B2Gold then took over the project and became its sole owner for the first time in recent history.

Following its detailed review of the Gramalote project, including the 270,000 metres of historical drilling, B2Gold released on Wednesday an NI 43-101-compliant preliminary economic assessment (PEA) on a potential open-pit operation smaller than the one contemplated by the JV.

Assuming a discount rate of 5%, the project is given an after-tax net present value of $778 million and an after-tax internal rate of return of 20.6%, with a project payback on pre-production capital of 3.1 years. Life of mine after-tax free cash flow is expected to total $1.38 billion, while estimated pre-production capital cost is pegged at $807 million.

Over the course of the initial 10-year mine life, it would produce 185,000 oz. of gold per year. Production for the first five years could average 234,000 oz. of gold per year, with an average processing grade of 1.26 grams per tonne owing to the higher-grade core at Gramalote.

The mineral resource estimate that forms the basis for the PEA includes 192.2 million tonnes of indicated material grading 0.68 g/t gold for a total of 4.21 million oz. of gold and 85.4 million tonnes inferred grading 0.54 g/t gold for a total of 1.48 million oz.

The project currently has an existing mining permit in place for a larger-scale project; this permit will require modification to reflect the new medium-scale project contemplated in the PEA, B2 Gold said.

With the PEA release, the Canadian-based miner plans to commence work on a feasibility study with the goal of completion by mid-2025. Due to work already completed on previous studies, the remaining work to finalize a feasibility study for the updated medium-scale project is not extensive, it noted.

The main work programs for the FS include geotechnical and environmental site investigations for the processing plant and waste dump footprints, as well as capital and operating cost estimates.