AMN - MALI: State to increase Fekola interest to 20%

The Malian Council of Ministers and the President of Mali have approved the purchase by the state of an additional 10% interest in B2Gold's Fekola Gold Project. This will take the country's interest in Fekola SA, a subsidiary of B2Gold, to 20%.

Now that the State’s interest has been formally authorised, the company will transfer ownership of 20% of Fekola SA to the State of Mali.

The first non-participating 10% of the State of Mali's ownership will entitle it to an annual priority dividend equivalent to 10% of calendar net income of Fekola SA. The second fully participating 10% of the State of Mali's interest will entitle it to ordinary dividends payable on the same basis as any ordinary dividends declared and payable to the company for its 80% interest.

Ordinary dividends are not payable by Fekola SA until the Fekola SA intercompany loans totalling around $700 million, plus accrued interest, have been repaid to B2Gold in full.

These loans include historical exploration loans, early works costs, funds advanced for the Fekola mine construction and expansion, 2017 accelerated pre-stripping and fleet purchases plus accrued interest.

In addition to assuming the obligations of ordinary shareholders to repay the Fekola SA intercompany loans and interest prior to the payment of any ordinary dividends, the State has also agreed to make additional payments totaling $47 million with respect to the acquisition of the additional 10% interest.

B2Gold has developed an excellent relationship over the past four years with the Government of Mali. All negotiations between the company's senior representatives and the Malian government ministries have been conducted and concluded in an environment of mutual fairness, respect and transparency.

B2Gold looks forward to working with the Malian government as partners in the mutually beneficial world-class Fekola mine.

Fekola is B2Gold’s largest mine, representing about 45% of the company’s projected consolidated 2018 gold production.

For the first half of 2018, Fekola produced 226,786 ounces of gold, above budget by 11% with cash operating costs of $293 per ounce, $71 per ounce below budget, and all-in sustaining costs of $466 per ounce, $138 per ounce below budget.

Exploration drilling at the Fekola North Extension zone indicates that the potential exists, subject to further drilling, to significantly increase open-pit resources and reserves, north of the current Fekola open-pit reserve. The Fekola North Extension remains open to the north.

B2Gold intends to release additional drill results in September 2018, followed by an updated mineral resource calculation in October 2018.

Based on the positive exploration results to date, the company’s in-house technical team is conducting engineering and other technical studies to ascertain the potential to expand mine and mill facilities and increase tonnage throughput.

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