Good afternoon, ladies and gentlemen. Welcome to B2Gold Corp.’s First Quarter 2018 Financial Results Conference Call. I would now like to turn the call over to Mr. Clive Johnson, President and CEO. You may proceed, Mr. Johnson.

Hello. Thank you, operator. Welcome everyone to B2Gold conference call to discuss the results from the first quarter of 2018 company’s financial results. I’m speaking to you from London. And over here I’m seeing some shareholders, et cetera, and so a little jet lagged and a little tired. So maybe to all of your benefit, I may be a little less long-winded in – sometimes in the past. But a great quarter. We’re going to get into that very shortly here and the details of the quarter and talk about – answer any questions, et cetera, but just a couple of things perhaps I wanted to touch on first of all. Just want to talk a little bit about strategy and where we sit and where we see ourselves sitting today. We’ve been talking about that with a lot of people here in London. At the end of the day, I think, the news release makes quite clear. But the strategy and the near-term strategy here definitely is we’re not in the M&A mode. We did our heavy lifting when very few were doing it in Otjikoto and Fekola, et cetera, and we are now at this very important new point in production and also the cash flow from operations. We’ll see that in the numbers, dramatic projected increase from 2018 of somewhere around averaging $0.5 billion cash from operations this year and over the next couple of years after 2018 with – approaching 1 million ounces this year and $800 an ounce all-in sustaining costs. So we’re looking at that increase of around $0.5 billion from $155 million of cash from operations from last year, so a pretty dramatic impact. So the focus now is not M&A, not – I think it’s going to get more competitive. We cannot…

Thanks, Clive. I think Clive did a good work there for the quarter. It’s transformative, but compared to the prior year quarter and very transformative and the result mirrored and reflect the first full commercial production quarter from Fekola included in the company’s results. So I’ll run briefly down the income statement, the cash flow statement and give some thoughts. So firstly, on the revenue side. Revenue is $344 million for the quarter, so increase in the revenue of 135%, which is based on 117% increase in ounces sold, a lot of that from Fekola – most of that from Fekola and also a 9% increase in the gold price. If you look at the difference between production and sales, we sold approximately 20,000 ounces more than we produced and mainly that represents us drawing down and selling 27,000 ounces of that Fekola inventory that we built up in the last quarter, last year, and it was on the balance sheet. And we drew it down and sold it this quarter. We saw the benefit of it in this quarter. Production side, a very good quarter. Consolidated basis, 239,000, which was 16,000 higher than budget. 11,000 of those came from Fekola and another 6,000 of that came from Masbate. And Fekola was 114,000 ounces and it was 11,000 ounces higher than budget really through the trifecta, which is higher throughput, higher grade and higher recovery. Those are all the things that you. want. Fekola came out of the gate very well in the last quarter, last year and continue to do so as we look forward this year. Otjikoto 39,000 ounces, 2,000 ounces over budget, slightly higher grade and higher throughput in the period. Masbate 53,000 ounces against a budget of 40,000 ounces. And Masbate has higher recoveries and higher…

[Operator Instructions]

I’m sorry, operator. I think that we should probably just leave questions in the end. So maybe we can leave them at the end, we’ll go through the rest of the materials. So, Clive, I guess, we turn it back to you now. And is there anything else you want to – anyone else who wants to comment on anything, who is here?

No, I mean, I – we can go on and talk about some different things. But I think, at this point in time, I think the news release is quite detailed. And we’ve laid out some of the strategy and things going forward. I guess, the only other things that spring to mind are what’s happening, for example, in Nicaragua. We seem to have lots of things in the world change with political change or potential change. The Nicaragua scenario for us is we still have the support of the government and the local communities and local governments in what we’re doing in the mines and the benefit that we have and all sorts of different ways in Nicaragua, jobs and taxes and community programs and education and CSR and health and all the other things that we do. We’re seeing a transition perhaps to some push for more democracy and other changes within Nicaragua. But this is a wide-based movement from many different groups in society working together and wanting to work together peacefully with government. So we see the – we do not see the prospects of that being negative from our perspective or from, I guess, a more global perspective and to presume a country moving in a – a country that’s had some good success moving in a good direction. So I think that’s most of it. I think we should turn over – we should turn it over to questions, Mike, unless there’s anything else or anything else you guys think that I’ve forgotten that’s compelling to say now or whether we should let the questions go.

[Operator Instructions] Your first question comes from the line of Rahul Paul with Canaccord Genuity. Your line is open.

Hi, everyone, congratulations on another great quarter. I’m wondering if you could go into a bit more detail on the HFO solar hybrid plant at Otjikoto. You mentioned that you expect to lower power generation fuel costs by 10% in 2018. Is there an opportunity to lower HFO consumption even further by maybe moving to a greater reliance on solar or other some constraints or technical limitations at this point?

It sounds like a Bill or John answer to me. Over to you guys.

Yes. Thanks, Rahul. Good question. It’s certainly something we’re very proud of. So the solar plant was commissioned in the – at the beginning of the – at the end of March, beginning in the second quarter. We’re ramping up now and we’re seeing great solar penetration at 6.8 megawatts DC power fully online. Basically, if you figure in all the various iterations of how we can – how we think we’re going to be able to match the solar to our existing operation, it basically cuts $0.02 per kilowatt hour off of our power costs about 10%. So the answer is, yes. We certainly think that we can increase that. They’re actually currently working maybe on several other strategies. Without going into too much detail, one of them is potentially hooking up with the overhead power line that Namibia has and then buying some off-peak power as well. So the answer is, yes. We do believe there are potential for significant savings going forward on power.

Thanks, Bill. And then a little bit further on that, at what point do you think you could adopt this – the technology on a bigger scale at maybe Fekola, perhaps even look at this as an attractive power solution for Toega, or is it just too early to say at this point?

Yes. It’s really early. I think, if you talk to the operations guys or people like John that are doing the design, of course, it’s attractive for sure. But it is – it’s a technology that we’re still getting comfortable with. So certainly, we want to see some more reliability before we start talking about putting something like Fekola on solar. So it’s – I think we kick it around for something maybe in the future, but as of right now we just want to see this testing.

Perfect. Thanks, Bill. That’s all that I had for now.

Your next question comes from the line of Michael Gray with Macquarie. Your line is open.

Hey, good morning. Thank you very much for taking the call. At Fekola, the unit costs are tracking better than feasibility study. Can you provide a breakdown of your unit costs for mining, processing and G&A in Q1? And maybe a little bit of color on the reasons and opportunities for the improvement versus the feasibility?

Bill, I don’t know if you want to tackle all that right now, or do you want to give some of that and then invite a separate conversation or information that come from that? But go ahead.

Yes. Let me – for some reason, I actually wrote that down. Let me just find it here.

That’s supposed to be off the top of your head, no?

Yes, I wish.

Mike, I’ll – on the processing, the reagent consumption – some of the reagent consumption in grinding media, particularly in ball mill have been less than feasibility projections, so that’s helped to reduce the processing costs.

I think overall basically, so for Fekola in Q1, we saw lower mining costs, as Mike mentioned, significantly lower $1.34 versus $1.94, that’s a cost per tonne. And the primary reason was that we’ve had lower cost on the front-end as far as the materials, the hardness of material and the actual amount of blasting we had to do. So we think – and of course, the maintenance is below. So we think those are probably going to track back towards our original numbers and then, of course, the site G&A track very nicely with the budget estimate. So the main thing was on the mining side.

Okay. So lower costs in Q1 maybe not sustainable, tracking back to the feasibility eventually, is that fair to say?

Oh, yes, that’s what we’re saying. Of course, once again, you have to remember, we’re still early on in the cycle itself for…

Yes.

…us to say that. What we can say is that, we have been pleasantly surprised versus what the budget is.

Yes, okay fair enough. And then just second question, with oil prices rising noted in the MD&A, the $11.4 million in fuel oil, $11 million – $8 million in gas or hedged as of March 31. Just want to know what percentage of the energy consumption that is?

The hedges right now represent just under 50% for 2018 and approximately 20% or 30% for 2019, that’s roughly where our hedge right now might be.

Okay. Thanks very much, guys.

Thanks.

Your next question comes from line of Chris Thompson with PI Financial. Your line is open.

Hey, good morning, guys. Congratulations on a stunning quarter. Two quick questions. One on Masbate. Obviously, continued surprise by way of processing more oxide ore than anticipated. I’m cognizant that you have the expansion, obviously, that you’re working on, my understanding, that’s going to come online first quarter of next year. Do we see a possibility of sort of stretching out the favorable, I guess, ratio oxide to fresh to marry with that expansion the remainder of this year?

Our initial plans with Colorado Pit were to finish off in the final quarter of this year. And we took a recent look at that and really we don’t see any change there. We know that final cuts in Colorado will be narrow and we want to make sure that we optimize our mining – our mining efficiency in that pit ahead of dealing with wet weather. So no change currently in Colorado mining. Certainly, with the capacity of the fleet that we have, we can look at some alternatives in terms of development, which provides some carryover. We’re still looking at those now, but we’re well positioned to do so.

Thanks for that, Bill. Thanks. Just quickly on Fekola. Obviously, great results you had on grade, tonnes and recoveries as far as budget. I mean, are we – do we expect, I guess, these grade tonnes and budgets to normalize to budget for the remainder of this year, or are we seeing surprise that you weren’t anticipating?

So we’re seeing some surprise like even on recoveries But once again, we’re still early on in the process. It’s really too early to say anything about what’s happening there other than it’s a great quarter.

Yes. Okay, great. Okay, guys, congrats.

Thanks.

Your next question comes from the line of Don DeMarco with National Bank Financial. Your line is open.

Hey, guys, thanks for taking my call. This question maybe is more of a strategic nature. So you mentioned that the focus is not on M&A. And so I’m just wondering is that because you just don’t see good value in the M&A phase. And I’m also wondering if maybe you feel that you’ve reached the optimal sustainable size for a gold producer?

Yes, good question. We don’t think we’ve reached the optimal sustainable size for a gold producer. I mean, we don’t set kind of numbers and then decide when we should do acquisitions to try and meet them in terms of numbers of lost production and timing of all of that. We were – we’ve always been opportunity-driven. If you look back at our successful 10 years, it looks very systematic in terms of the growth with accretive acquisitions and good mine building or good improvement in production in things like Masbate and exploration success in all of those things. But at the end of the day, the M&A attraction or lack thereof right now is for a number of different reasons. We think we have a great pipeline, including Fekola immediately north, as we discussed, and the snake zones, anacondas, et cetera, we’ve touched before, elephant country looking for additional Fekolas, Toega, et cetera, upsizing Masbate, Nicaragua turning around, Otjikoto doing well. So we feel that the best way for us to look at growing the company for the next while is look at organic growth. But let’s see what we have for free, let’s see what we already have in our pipeline of projects that we didn’t pay for when we did acquisitions, because we don’t pay for accounts that might be there, that’s a lot of the driving force. We’re obviously not in a situation where we would feel that we would be able to find an accretive deal or an acquisition, given our lack of performance or lack of value based on the new cash flows and it’s all new we get that, but the – if we look at the target prices of the 17 mining analysts, they – there are some good analysts out there…

Oh okay, okay thanks for that, that’s a – that provides some good insight into the strategy and clarification. And maybe as a follow-up then, you mentioned a dividend and like from a capital structure point of view, what’s the debt that level you’d be happy with? Obviously you have a capability paying down all of your debt even within a couple years, but do you have a long-term sort of capital structure target?

Well, to be honest, we don’t right now. I mean I think that this is for us a – this is a new stage after 10 years of aggressive and successful growth where we are taking cash from operations and putting it back into building the next mine, with mostly debt financing, not equity to – for the rest of money. So we’re having, we’re really looking at that now. We’re in the – we are in discussions internally and getting some outside input from our shareholders et cetera about what level of – what level of dividend would you start on if you started a dividend policy. What level of debt make sense to have some debt along with that and also what percentage of your cash from operations are free cash flow should you be looking to dividend out versus what you are going to keep aside combined with cheap debt financing facilities to grow additional things whether it’s organic growth or whether it’s something down the road, that is an M&A scenario, so that – I think you’ll hear more from us from that kind of thing over the next quarter I would say.

Okay, thanks for that, that’s all for me.

Okay, good questions, thanks.

[Operator Instructions] Your next question comes from the line of Steven Butler with GMP Securities. Your line is open.

Thank you operator. Guys Fekola, just back to that asset here for a second. Obviously you’re – Mike, you earned a lot of soft ore in the first quarter, I’m just asking here about whether that was about in line expectations, the level of soft ore that you were mining and how that will trend throughout the balance of the year? Are you going to get into any hard rock anytime soon this year or is it wait for later years?

It sounds like we needed to clarify that one, Bill, you want to talk about the hardness or John the harness of the rock we’re in now and what we started up in, because I think there is a misunderstanding there perhaps.

Yes. So I’ll talk a little bit from the mining side and then John you can start to talk about how we started the mill on the hard rock. But when I say soft ore, it’s – the Fekola ore is very hard. Just we had anticipated on the mining side, which go through a lot more of our where –wears parts much quicker due to the hardness of the ore, but the reality is we just haven’t seen that. But we did start up, I mean we have more than 3.3 million ton stock pile right now of hard rock and so we have been mining hard rock from day one. John?

Okay.

Yes, I’ll just add that the majority of the ore that we have been processing has been harder rock, it’s fresh ore from the pit. We have been blending in some saprolite, which has had some higher grades and that we need to get into the process, but the majority of the feed has been harder ore, so the mill has been performing well on hard materials.

Okay. I just saw the reference in the MD&A to a proportion of soft ore, free ore digging, that’s – that was a reference. I guess that was a waste, waste tonnes mined, because it is soft material, not requiring drilling and blasting, maybe there was a lot of that being waste I guess.

That’s correct.

Those waste, yes, he pointed there that was waste.

Okay thanks Clive. Uh, guys, and Clive, maybe just a comment, because you guys give us very extensive disclosure on your pre-financial reporting, you give us very good disclosure on production tons, grade recoveries, while we don’t have our cost per ton. So you did a great job in the first quarter for sharing cost per ton at several of your assets, including Fekola as you described earlier. So, $0.06 comes about from a consensus with gold price being actually realized et cetera, et cetera, $0.06 comes about from all the good work you guys gave us in advance with respect to all this good production numbers. So, that’s why we are probably somewhat accurate this quarter, I’ll leave it there.

Well, okay, but not really because at the end of the day and once again we can talk about this more, but because we do think it’s worthwhile for have the narrowing of or a realistic expectations out there. If you look at what we did in the quarter and we obviously announced the production numbers before, but you add the, what we just announced today in terms of the beat on costs, on sustaining costs and all that. It’s hard for us to understand in a way when we beat that much from what must’ve been your expectations in cost unless you have wildly optimistic expectations which you guys don’t tend to do, you tend to be at the lower end or in costs you tend somewhere near the higher end of our guided projection. How we can beat that much in cost and have you guys come out and say we’re in line on earnings, there is a miss there somewhere and it’s not criticism here. But there is something happening there, which I can’t imagine you guys were all projecting the kind of operating costs that we’ve come in with an all sustaining, you’ve said yourselves that we beat on that, how can we be then within expectations on earnings? So, I’m not saying anything wrong, but there has to be some way that’s in all of our interest probably to get the shareholder, shareholders to get closer to the fact we’re – because that’s what puzzles us a bit.

Yes, I hear you Clive. The only thing that for me personally that happened was that the taxes ended up coming through a bit higher to offset all these EBITDA improvements or cost benefits, my taxes were a bit light that’s all, so therefore earnings came through. So I’ll leave it there, but I look forward to seeing the site here in next few weeks.

Yes, and as I said, you know Steve this isn’t a take a shot at the analyst, but apart from it, you guys are doing a lot of really good work and I think we’re just real curious, because we like to try and be transparent as always with our disclosure, how come – what can we disclose more, they can get us more on the same page where we don’t come out with a dramatically better financial quarter that we expected and a bunch of you guys come out and say we have expectations on earnings, so you know what I mean just a bidding in congress.

Yes, I hear you, okay thanks a lot.

Your next question comes from the line of Geordie Mark with Haywood Securities. Your line is open.

Yes, thank you. hello everyone. Just – perhaps to belabor on Mali here and maybe move over to Burkina thereafter. Just looking at, and obviously the very, very good 3-foot rates coming out of the mill there at Fekola. Well and truly above nameplate in the first full quarter there for commercial production. Just wondering in your years projection, are you projecting to hold at rate to meet your guidance is your sort of guidance sort of set it to sort of a 5 MTPA rates going forward.

Mike, do you want to handle that?

Well, I think a bit – on the [indiscernible] here about whether they want to be able to make 3 to 5.5 million.

The question was, is our guidance set 5 million tons per annum, the answer is, yes.

Yes, so Geordie our guidance still for the rest of the year is still 5 million tons a year is the guidance, so we’re obviously ahead of that. We are not prepared to say will that, because we are in the – this is the first quarter, we’re not prepared to yet say that that 10% higher throughput than we had guided, where we don’t – we don’t have reason to us, I doubt that this is going to have for the full year, we are just not prepared to go out and re-guide that. That’s probably we remain cautious, because it’s random mining and it’s going very well and it been to make sure people realize we are in hard rock. But so we’re hopeful that that kind of thing continues and as we go through perhaps at the end of the second quarter, we’ll probably look at that and see if it’s time to perhaps re-guide if appropriate.

Okay, very good, it makes sense. And perhaps moving over to Toega if I can. Just trying to get a – maybe some further detail in terms of the expiration that’s been carried out thus far this year within that $9 million budget. And the planned scope of that all of drilling within the defined volume and then the targeting outside looking for the new zone I guess, mineralization, just trying to get a further update on that, given the ore systems of your sort of focus on organic value?

Sure, Tom, you want to talk about that?

Sure. The drilling right now at Toega, looking at the edges of Toega, it still remains open down on to the depth. We are out looking at potentially down at depth, maybe there is an underground potential as a result keeps ongoing. And then we are looking at other areas in and around Toega area. We are not doing infill at this time, we still feel that Toega needs to get bigger before it’s a project, but it’s something going in a positive direction.

[indiscernible] cheers.

Cheers Geordie, thank you.

As we have no further time for question, I will now turn the conference back over to Clive Johnson.

Okay, well, thank you very much for your time and attention and good questions. Obviously from our point of view and the company, we are very pleased with the progress we’ve made in the quarter, not just Fekola, but the other operations running well and we’re set up to have a great year. So we’ll be reporting back on you on that to you and also more of our strategy opposite dividend policy and other things like that. So thank you very much for your attention. If you think you may have questions, feel free to reach out and email us as and we will look to answer them with hopefully our ongoing transparency. So thanks all very much.

This concludes today’s conference call. You may now disconnect.