B2Gold Corp. (BTO) Earnings Call Transcript & Summary

Thank you for standing by. This is the conference operator. Welcome to BT Gold Corporation's Q4 2023 Production and 2024 Guidance Conference Call. As a reminder, being recorded [ Operator Instructions]. I would now like to turn hand the conference over to Clive Johnson, President and CEO of B2Gold. Please go ahead.

Thank you, operator. Welcome, everyone. We're pleased to be here today to talk to you about the fourth quarter -- earnings fourth quarter we have in 2023 and also the year's production unless we're going to do the update on what we see as guidance for 2024 and can be in the window of, let's say, into 2025 for B2Gold. So a very strong quarter, gold production, again, in 2023 in the fourth quarter, reducing just under 290,000 ounces gold. And for the year, we achieved an upper half of our 2023 production guidance with just over a little [ 11 ] million ounces of gold production, including 68,000 ounces [ traded gold ] production from [ LTFIR ]. This is the 8th consecutive year for the company for meeting -- exceding in our guidance [indiscernible] approach that we've made. So 2024, just as a year of some -- transition year for our company [indiscernible], which was a producing company that is growing as well. So in 2024, production will be a bit lower than we had seen in 2023 and there's a number of different leases to that. Bill is going to go into some detail. And Michael will talk to us about where we are from the financial perspective, continuing to be very strong position. So for 2024, production will be lower primarily due to the delay in getting an exploitation permit from the government of Mali to proceed with the tracking of high decent grade in [indiscernible] material from the north of the [ Fekola ] complex, Anaconda region which we were set to go on the [indiscernible] and all the sites are basically in place to start -- we hope to start that in 2024. The government decided to do mining and in the mining companies and it also came out [indiscernible] coals. So we've had that they delayed the be issuing [indiscernible] in terms of rotation is turn that period of time. So we have some very, I think, positive conversations with the government a couple of weeks ago in Mali, making progress towards understanding the locations of the 2023 code. The mining code form Mali [indiscernible] FEKOLA by itself is still under the 2012 Mining Code, and has certain factors locked into that in terms of the ownership of the project, et cetera. So the commissions we have with the in Valliant 2023 code applies to the rest of the Fekola region. So we think there's a good economic case to start tracking more file a club are on [indiscernible] in the near term, and we'll continue that conversations with the government to find out what that means in terms of finding a way that it is profitable for the shows in our company, but also something we'll recover about the [indiscernible] being their fair share. So we're looking to complete our discussion with the government of Mali and be in a position to start tracking our from the [indiscernible] area and elsewhere down to the Fekola mill and that could add 200,000 ounces a year of gold production. So we're hoping to see that expectation go later in the year, are looking to see the additional production lead in 2024 and into 2025. So it that could be [ 185,000 ] the year. Those are going to give us a little breakdown on the costs associated with Fekola in terms of -- this is a year where we have a certain amount of capital spend, which was planned in the life of mine. We have a bit more grade than we've seen some of the years before we donate an ounce, as I mentioned, because of the lack of truck we have to expand in terms of tailings [indiscernible], which is going very well in telling spark construction. And also, we're expanding the [indiscernible] plant so some pre-stripping. So those are some of the issues that are hitting this year in 2024 in terms of our cost all sustaining costs, still mystery to us why the accounting rules suggest that if you spend a lot of money on a tailings [indiscernible], which is going to be [indiscernible] facilities when we spend that money in the year and we're going to use it for 10 years, why someone decided that you cannot link that off over 10 years. You have to do [indiscernible] end of the year. That's what [indiscernible], all the sustaining costs which will set it out, I guess, with the roots and the other hours to be that determine or to be not for number of years versus 1 year. So we're looking forward to a very strong 2025. We will see below the things for being this year such as [indiscernible] facility and [indiscernible] and Central we are looking for in 2025 will be undergrounded for coal at this will, of course, come online and those kind of give us a ability to reduce [indiscernible] and where we are in the progressive infrastructure. The [indiscernible] was always completed, we'll start tracking along as road in the second week of February, by the month as scheduled and the project overall on schedule. Full first gold production in the quarter of 2025. The other things will uplift and impact on 2025 in fact that goose will be underwriting in the first quarter. Obviously, we will be operate and we're looking at increasing gold production. Additionally, the Gramalote project will come into view with a study that comes in the first part of the year -- sorry the first half of the year. Moving on to the second quarter, which we're looking to a lot team for the first time as one company owning it and looking at maybe user a better, smaller project for Gramalote. We always push that because we had two roving companies in the joint venture. We always push is a large [indiscernible] production we need to produce somewhere around 350 [indiscernible] a year Gramalote. For the first time now, we're looking at as maybe a lower capital cost, smaller project with a high grade core of the deposit that seems to makes sense to maybe produce [indiscernible] Gramalote. So that's going to come to you as well. So the combination of boost production coming online for Sensor starting in the first quarter of 2025 and the potential Gramalote gives us a good growth profile from the existing assets. We will continue, of course, to look at other opportunities. We've got based on the exploration budget again this year. And we look at M&A, but we're not really looking to add development projects to the portfolio, we have these that were developing and also the potential Gramalote. So we're not going to be likely to go out in this market to look at M&A activity. We'll continue to focus on creating a exploration opportunities, such as what we've done in terms of investing in [indiscernible] looking to joint venture with gene on the exploration side. So with that, I think I'll hand it over to Bill, and Bill going to give us a summary of what I said in our detail the capital expenditures for this year at Fekola and talk about [indiscernible] and the capital cost of [indiscernible], as you'll see on the new release are a little bit higher than we had originally projected. Bill will talk to you about the reasons why that is what we believe that we're on track with this new budgeted asset of around $1 billion to complete construction. And as I said earlier, we're definitely feeling very comfortable with that schedule producing goal for us in the first quarter of 2025. So with that, I'll hand it over to Bill and Mike is going to talk through the prepaids. We decided to tap into the prepaid market to maintain our very strong financial position in the year where we have a lot of capital spend coming up. This is something that we pioneered when [indiscernible] for gold in 2016. And that was to tap into the prepaid gold markets, some great source of Chief Financing to allow us to then to complete the construction of the Fekola mill and acquired facilities. You might remember that we were on schedule our budget at Fekola because of a drop in -- dramatic drop in the gold price in 2016 and '17. So we do kind of sufficient funds. We did about $125 million, [indiscernible] will be selling the building in the miles on beans. So we were the first company to a new gold prepaid support financing and it's a great price at the time for us because people anticipated that we would do an equity issue to complete construction of Fekola. And our stock was down at $0.80 a share and anticipation of a large allusion equity offering. We didn't do that within the prepaid set to a small percentage of our gold production. And we use it to fund -- the necessary funds to complete Fekola. A lot of companies copying that now this credit carbon type of financing, and Michael will walk you through why we do that, why it's very beneficial to the company in the long term to leave us in a very strong financial position as both to a transition year in 2024 with since transitioning at Fekola and also transitioning in the context of building the [ Goose ]. So this company remains very focused on being a responsible gold producer but also a growth company. And we're well on track with our growth projects to continue that journey. So we're not -- I think we'll have really both give you a little more color on Fekola capital spend and also talk about the Goose project now.

Okay. Thanks, Clive. I guess I want to start a little bit with just once again reiterating that 2023, even though kind of at the halfway point, we were down a little bit on ounces. We managed to make everything up and had an excellent year across all three sites. And if you look at Fekola in particular, fourth quarter was a very good quarter for Fekola, and it really led us into setting up for 2024. If you go back and think about what was in the feasibility study or the technical study that we put out related to kind of a life of mine production, you would see that 2024 was always a bit of a down year as we basically worked our way through Phase 7, some of the lower grade in the higher zones of Phase 7 and then into the grid power. So what we have is we're now we'll be taking out the bottom of Phase 6, which is high grade and at the same time, bringing Phase 7 down so the second half of the year will be in [indiscernible] Phase 7. Additionally, at Fekola as Clive said, we've got a few kind of one-off projects, which are raising up the all-in sustaining cost. We have the [Payon] facility. The [ Pavon ] facility was -- had been compressed a little bit. Originally, that is designed to be in 2023 and 2024 over the course of both those years. They were a little late. I'm getting as a permanent, so we've condensed the construction period a little bit. That's going to be approximately $45 million to complete with most of that occurring in 2024 with the intent to bring that online in the second quarter of 2025. Additionally, there is the solar plant, once again late delivering the permit. So we were delayed a little bit. But that project will come online in 2024, that project has an approximately $19 million left, and that project is on schedule. We've also got the underground. Everyone's aware, I think that the underground is designed to replace some of the lower grade ounces out of Phase 8 in the early years with higher grade ounces. We have a plan to develop that the underground mine really by the end of 2024, we're going to be at the face of the [indiscernible]. So our intent really is this year to develop a study and get it to the government to get approvals to start mining in the first half of 2025. That's an additional $64 million to completion. So overall, all those things should really set us up nicely going into 2025. And just talking a little bit about the regional stuff and how it plays in. So the regional stuff, everyone is aware that we have, in fact, completed almost all of the infrastructure for the regional stuff, the [indiscernible] in all of the facilities up at [indiscernible] we're in. And really, basically, what we're talking about now is just finishing and up closing out buildings and then getting a permit and then pre-stripping. So if you think about what the original plan was that we announced in kind of late 2022, all of that was supposed to happen in 2023. So really, if you just take the program and shifts into 2024, what you're going to see is that there's the potential in 2024 to develop those 18,000 ounces that would be way out in Q4. And what that assumes is that assumes we're able to get a permit in -- by the first half of the year. And then we have 3 months of pre-stripping. And then, of course, we'd be hauling or in Q4 of 2024. That's the same schedule that we would have had in 2023. And what that allows us to do is that allows us to push that 80,000 to 100,000 ounces, which we had originally come on in 2024. Those ounces will now come on in 2025. So really, we see that we're right on schedule if, in fact, you assume that we start in Q1 of 2024 for developing the regional stuff. Clive, anything else you'd like me to talk about for Fekola [indiscernible].

I think that's good Bill.

Okay. So [indiscernible] is probably one which is deferring the most attention on this call, I'll start out with all of the positives. So the project remains fully on schedule. The mill is actually ahead of schedule. When the last time we talked, we had been shipping stuff up to the MLA and getting ready for the winter ice road. The winter ice road construction is fully under construction right now. We are in the process, as you know, doing something a little different what we've been doing from kind of working not only from the ends, but also from the middle hour And so we are talking about at the end -- or during the second week of February opening up the ISO. We are anticipating with fuel that we're going to be bringing 3,000 loads approximately plus/minus down the ice road. As we previously indicated, we have plenty of time for that. We've got the additional trucks on site or at the MLA. And we don't see any reason that, that shouldn't happen. That still remains on a critical path, but that's in very good shape. On the additional construction side, the underground is going very well. the ventilation raise is in. The team is working very good and trying to get down to that crown pillar. The open pit is going very well. We've got all of the trucks operating on schedule. That is obviously, once again, something is very critical over the bet tailings or that open pit has to be mined out by kind of Q1 2020 but that will be the tailings facility from day 1. Regarding the costs, this is one I'm trying to give a lot of on what is necessarily the best way to say this. But basically, the situation is as we took over the project kind of midstream from Sabina. So Sabina has done their feasibility study, [indiscernible] had ordered the first stuff which was coming up [indiscernible] in 2023 and have put together the schedule. We obviously did extensive new diligence to get through that, but a lot of the things were either in snow or you couldn't really identify how it all fit together once you started putting it together. So our guys got on site, and we started working through it. And we identified things which B2 wanted to do different to improve productivity, but also reliability. And a lot of that really relates to kind of some big buckets, not just run through some of these. The underground -- the initial underground that was done by Sabina really didn't have a lot of capital spending on it, things like some of the consumables for underground and a lot of the actual support which is needed for developing the underground. So that -- when you talk about the difference between kind of that $90 million and $120 million difference, most of that comes in equipment and support equipment from the underground, which was never just ordered. And I have to -- I'm going to come back to this several times, it's not just the cost of the equipment that you're really talking about because -- it had been discussed and agreed that we were going to fast track the underground. A lot of this stuff had very heavy logistics cost with it, ordering it as quickly as possible and then putting it on C-130s to bring it into site. So expensive transportation costs associated with that. And it's the same thing with some of the other things, which were outstanding. We found that we had a major redesign of some of the mill structures to include a lot of the piping and a lot of the vending. All of that stuff had to be reordered. And it's not just that we're paying for now and then paying for the logistics to go with it. Remember, we already bought at once, shipped at the site, and now we're doing the whole thing again on a schedule. So you're paying at least double, but we felt that it was really important to make sure that the guys have the equipment and the necessary facilities in order to build it in time for the Q1 2025 season. So what we're talking about is really mail infrastructure, underground infrastructure. Another big one is the -- is labor. And I saw one of the questions from one of the analysts this morning related to is that something that's going to carry on? Well, the answer is no. What happened was when Sabina did their feasibility study they didn't include the requisite number of hours for people working on site. And so we've obviously taken the operational stuff and turned it into a B2 model. But when we went back and looked the construction model, what we noticed is they didn't have enough hours, not the actual day rates, but the hours per day that people would be working in. So that was a big miss on their part, and we're in the process of correcting that. And then the last big 1 really is the Powerhouse. The Powerhouse was undersized and definitely undersized when you include the additional underground. So we're in the process right now of ordering additional power supplies. And once again, all that stuff has to be flowed in. So that will be an expensive proposition as well. And all that adds up to the large overrun it you see. But most of it really are things that will not be carried on into operation. And once we get it going, what we are hoping for is a more reliable and in a better running facility. Anything else there, Clive, you like to talk about?

Well, I think that some people are probably curious to think what is the risk factor going forward with the additional capital spent and also how much money have we spent so far, both in terms of between a Sabina some of the useful [indiscernible] and also what we've spent what's left to spend and so the construction capital to get the line up and running.

Yes, sure. So let's start with the risk one. We think that really the risk of additional overruns is low, given the fact that, once again, we've now ordered really everything which is in the MLA, obviously, that stuff is coming up the winter row. We're in a process now of putting in orders for the ice roll, and we're not seeing -- basically, all of that has been included in the budget and yet increases in price. The labor issues have been addressed in the updated budget. So we don't see that as an issue. So overall, we see the additional cost overrun is a low-risk proposition. To date, we spent a little bit more than $700 million on the these project. And so basically, with more than 70% of the budget already spent and committed for 2024 and Q1 2025, we really believe that the risk of exceeding that budget is kind of low risk.

I think it's important to point out that I think Bill and the team has done an extraordinary job when you look at the fact that this is not the way we normally like to build and grow the company be to gold because normally, we like to find projects that are at the feasibility stage and we can design and know we can design we love to build and do it our way. In this situation, we have a company -- a single asset company who own the asset who is interested in trying to build a mine, and they are very much obviously, a very extremely tight budget, and they will -- the only alternative for them to be able to pass the project, which, unfortunately, to rely on private equity and streamers to the point where we're giving up a lot of the value of the project upfront to try and get it on production and external type budget. So we took it over when it was partway into construction. And that's one of the reasons why we're obviously disappointed with an increase in the capital cost because we provide ourselves for years of being on B2Gold [indiscernible] on schedule. In this case, I think we did an extra job to pick up the pieces and what was going to be a very challenged project with the since company with not a lot of construction experience and with financing, a very painful and extremely expensive financing with private equity, we should think everyone knows that I'm not a [indiscernible]. I think it's really structured in our industry, the cost of these financings. So we managed to -- there's a lot of pressure in the -- on this deal to get the deal closed to be honest in April last year before they drew down the financing from Orion and all the other [indiscernible] that came in. To finance the project, which probably could cost something $200 million actually just to finance the project. If you add up all the [indiscernible] and the prepayment on [indiscernible] others things that were required because traditional fasting was not available to the previous [indiscernible] project because of the [indiscernible] of about building a mine in the north [indiscernible] company and with the backlog experience in terms of building projects. So we've done a remarkable job this last year. We picked up the [indiscernible] on the flying partway construction in last year. Sabina plant 2 ships to go from Montreal to the [indiscernible], the top base and then Bill [indiscernible] I'd say, well, we actually were able to send ships up to drive everything we need to complete construction and then all the fuel essentially needed for the future of the project. So Sabina have a lot of good things and tented things in terms of exploration, permitting, [indiscernible] relationships with a great relationship, the [indiscernible] association and new association on our partners, and we just had some great meetings we had this week. And we're -- and so there's a lot of things that Sabina did well in those areas. And along this Sabina team that the critical people, in our view, wanted to stay with this quick project in terms of permitting and in terms of indigenous relations. And some of the technical people in the general exploration team joined our team. And I think that's one of the only reasons that we were able to actually rescue or keep to the schedule school pressure in the first quarter of 2021. So just to give you a little bit of background. So Sabina did a good job and they did, for sure, now [indiscernible] did a great team for the shareholders by accepting an offer to allow me to go through -- to complete a friendly takeover of the significant premium to build the mine and do it well. So we remain extremely optimistic about [indiscernible] as a major asset. And Mike is now going to walk us through why we did choose to take our financial now in a non-net prepayment of gold production to make sure that we maintain a very strong financial position as we go through this transitional year of the capital spends we need at Fekola, et cetera, which were planned and expected, but also finish off the project and maintaining our dividend, but we attaining [indiscernible] cash position. So I think with that, I'll pass it over to Mike to talk about the prepayment finance and then we'll open it up for questions.

Thanks, Clive. On the prepaid financing, I think Clive touched on really to call, it's just to strength and maintain our balance sheet, but clearly keeps in great shape as we get through '24 and beyond, frankly. So prepaids -- we looked at the coal market. We've got both near record highs, and it's been over 2,000 [indiscernible] over for 2 quarters now is -- it's basically the first time ever, I think that's happened. So you know it at the gold price, so this is a good gold market. So it's a very attractive gold pace. And with the prepaid, you have the -- when you're blessed with production, so it's a great financing for an operating company. I think just because if you have production, you we're able to price some using a forward price just under $2,200, [ $21.19 ] was the average across the banks. And for a total of 265,000 ounces. And we're going to deliver those ounces in the second half of '22 once [indiscernible] is up and running in the first half of '26. I'd stress that these are [indiscernible] prepaid, we can source the production from anywhere. And when you look at this as a financing, if you look at the number of ounces, we've got to deliver and the forward price that we're able to use. And that's if you assume today's gold price, it's a net [indiscernible] financing costs around 2.7%. So when I look at that compared to the revolver, which is probably 8% plus in that region, it's an attractive financing. And so where we are, as a I'd like to give a shout out with 4 syndicate banks, we're in there, CIBC, ING, National [indiscernible] I want to say thank you as always for their support. They were there like method we didn't we did prepay before our syndicate took part of that and part missed again. So just to give you a snapshot of where we are -- we had approximately $300 million in the bank cash. And I'd like to kind of $250 million to $300 million, that's to me, that's a decent level of liquidity for a group our size, doing the kind of things we're doing. We haven't drawn the line at the end of Q3. But as we indicated, we were starting to drop in Q4. So by the end of the year, we've done $150 million. So we're still -- I think you'll see -- we haven't put our year-end results yet, but like I said, I'd like to keep that cash somewhere around $300 million. we had the line drawn 150, so we're still a strong net cash position. And our objective with the BPs, first of all, we'll pay down the line with the portion of the prepaid and then we'll have the balance of the prepaid plus a full undrawn line to finance ourselves as we go through and fund all the kinds of things that we want to do. And to give you a picture, I think, of what are the use of those funds. It's to really maintain our flexibility, like I say, both through '24 and beyond. You've heard there is some significant capital development in Mali and Fekola. And some of those are multiyear projects, right? So they've gone on that the tailings, the underground, solar, we started those prior year. Most of them will be completed or near completion by the end of 2014. And then, of course, also for [indiscernible] Regional. We've got some spend in there just to get that ready. And so when we get those licenses we're ready to go. We want to maintain our aggressive exploration program was $63 million in the budget for exploration both at brownfield land for greenfield and I could certainly give more details at [indiscernible] And you probably know big project for us is good just to keep that running through smoothly and get ourselves into first all for in 2025 -- Q1 '25 and maintain our '24 dividend at the current rate as we've indicated before it. And also to give ourselves capacity and flexibility for maybe some investment decisions that might come later in '24, right, in the budget right now, but Clive's touched on them. So first one would be Gramalote. How do we see Gramalote. By the half year, we'll have a picture of what we think that newer streamlined [indiscernible] operation could look like. So if we want to move forward, we have given as prepays now helps us have that sort of flexibility to make some decisions. And also, I don't actually think both talk to Namibia so far about we're looking at the [indiscernible] on our [indiscernible] some burden of like bouncy [indiscernible] at Dakota, which we think is an exciting underground prospect. It could help supplement mill feed in those stockpiles Dakota where if this pans out, we can bring the underground at [indiscernible]. We can look at putting some kind of model on and perhaps adding some higher grade ounces in those stockpile years. So those kind of things give ourselves flexibility, let us look forward past the end of '24. And really, the prepays in the end, it's an opportunistic financing what the gold price the way it is. And I think it's a chief financing for a company like ourselves when we have -- like I say, we're blessed with production.

Thanks, Mike. Maybe I think one of the topics that's on a lot of people's mind is Mali and the government of Mali and [indiscernible], I'd like to get your comments about that from our recent trip down there and negotiations with the government. So I think it's really important to keep it in context. Mali's been for decades a very good country in terms of investment in building gold mines, successful gold mines with the history of Ramco, now Barrick and other companies, including ourselves. It is a country that has been successful. We're working with the various covenants we've been through in terms of understanding that gold is in very -- 20% of the GDP of the country, and I think was a large taxpayer in the country, and they paid over $1.3 billion in taxes and benefits to the people Valley. So we put up all the risk we need to build Fekola [indiscernible] [ $60 ] million. And the people and the government of Mali have released a little over 50% of the economic value of the Fekola mine. But I think that's a pretty good deal. We think on a risk, I think at 50% economic benefits. So the new government or the government in place today, that feels that they want more of a high and molecule volumes and self-determination and those [indiscernible] I think are great things to aspire to over time, they don't happen overnight. So at the end of the day, we're in conversations with the government. A lot of the parameters that govern Fekola unlocked in [indiscernible] the 2012 mining code, and the government clearly recognized just as recently as a couple of weeks ago when we were down there with Fekolas under the 2012 code. The 2023 code is looking basically to increase the government's interest significantly in gold mining projects in Mali. And that was the regional areas that we won't truck ore from our government of 2023 code. So the conversations with the government have been understanding the [ '23 ] and frankly, respectively, great relation [indiscernible] showed a couple of weeks ago when they consider each of all, and they mentioned to us that they consider me to [indiscernible] should not the best and for an investor in their country and they recognize the value of gold production. And then clearly are on the same page with us in the sense that they want to see trucking of ore in the near term. to increase production of Fekola as we messaged potentially 80,000 to 100,000 ounces a year by trucking ore down to the mill. So that's the conversations that are going out to understand the [indiscernible] code and understand the economic implications. And that doesn't make economic sense to truck it. So we're going to govern now, we think there's a path forward for [indiscernible] and the government and the people of Mali to continue to increase production for Fekola by trucking more. We talked to the government about the fact that we have 2 potential stages of go the Fekola complex, the first was trucker as we've talked about, which is very low cost [indiscernible] spend most of the capital at standup, but we think can be quite profitable. The second was to potentially build on an additional mill Indiana Colombia area, perhaps something like $250 million capital investment to actually build the second mill based on some of the exploration results we've seen and not only in the oxidizer but also in the sulfide as well. Frankly, those plans are very much on hold on trying to understand the implications of the 2023 mining code. So at the end of the day, there is a competition for our investment dollars around the world and where we're going to spend our investment dollars. So Mali has been a good place to be invested with a reasonable tax regime and many companies, including ours, were importing to people that male benefits from that. So the question becomes as of the new mining code is Mali still an attractive place to build mills and additional gold mix. And we're trying to understand that a little bit better and trying to work with the government to understand the implications of some of the proposed tax and other increases that the government is looking for. So at the end of the day, we have the capital dollars we are prepared to spend around the world as we've done so successfully competition. Do we want to spend our money potentially in Colombia as the study that's going to come out in the first half of this year indicates that we can build a mine there and invest significantly in New mode Colombia or do we build a second mill in the Fekola complex, et cetera, et cetera, or other opportunities. So at the end of the day, gold production has been a very important part historically for centuries, actually. If you look at the history of Mali, the Malian economy. And this day. So we'll encourage you in the government to work with us. I think we have the relationship we have [indiscernible] with as they talked to us a couple of weeks ago about being sort of a [indiscernible] of the gold standard for investment in the country. So I think there's a level of understanding between us in the level of commonality to see what works for because of the people of Mali and what works for a profitable gold mining company is looking to grow responsibly as we've done. So I'm optimistic that we're going to the next month or so, continue to conversations with the government and with the business of trucking ore from the rest of the Fekola [indiscernible]. So there's a lot of rumors out there. There's a lot of people getting half the story. Unfortunately, the facts of the matters the government of Mali understands the importance of gold production in the country. This government, previous government, and I'm sure future governments understand that. We're confident that we can that other companies continue to work with them to -- for the betterment of Mali. So I think we are bottom line as we've done it. We've done it around the world between B1 and B2Gold. We've been with the most successful companies, I think, in [indiscernible] that we have been in managing the risk and understanding them. And the best way to manage both the risk is complete process in these countries and these [indiscernible]. So we're confident that we're going to be able to continue to work successfully with the government of Mali for Fekola, but also growing for. So I think with that, we'll open it up for questions. So operator, if you can [indiscernible] people to ask these questions.

[Operator Instructions] Our first question is from Ovais Habib with Scotiabank.

Congrats on a strong end of the year and for 2024, it seems like, like you mentioned, is a transitional year with remaining CapEx spend at Goose and sustaining projects in 2024. So just a couple of questions from me. Number one, Bill gave us a good overview of, again, why the [indiscernible] CapEx increase. And I'm actually glad that you are making these changes now rather than having issues at start-up. But is there anything in this new guidance or plans that you're looking to do in 2024, though, that's still worrying your team? Or is there anything that's still outstanding that you want to change now rather than kind of have in place at the startup? .

I'll comment on that briefly and then go to Bill. I mean the history of B1, B2Gold is we build mills with the expectation that they're going to ramp up very quickly. We don't build a mill will produce a goal to fix the mill and fix all the other problems in the mine. We build them to start up start well, and we're anticipating that, especially with a very high good stockpile, we're going to have a [indiscernible]. I'll pass it over to Bill.

Yes. Thanks,. That's a very valid point. We don't anticipate start-up issues. I would tell you, your question was almost like what's still keeping you up at night after changing the capital costs. And I would say we're still looking at the power issue, right? They really -- they missed it on the power. And if you followed us, we are looking very closely at wind plant up there, which we think is going to help us offset that. That will -- that's probably -- that's not a CapEx issue for us. That's something that hopefully we get somebody to sell power across the fence. What that allows us to do is really reduce the amount of fuel that we can bring in, that we have to bring in each year and cut down on the tankage because that's really -- that was 1 of the big misses on the Sabina side. So -- that's probably the 1 thing is fuel I'd say, but it's not an additional capital cost and it certainly is not going to impact start-up.

Okay. And just that kind of segue way to my next question. In terms of the ramp-up at Goose in 2025, production guidance was kind of around that 250,000 ounce mark in 2025. it was below our expectations and kind of below the latest tech report, which was calling for production around the 300,000 ounce mark. Are you just being kind of conservative going into this ramp-up in 2025? Or has something else changed in how you see production in the first year.

No. I mean, once again, the previous technical report started kind of at month 0. So I think if you look at -- we're still saying approximately 300,000 ounces a year at a minimum over the first 5 years on average, right?

So nothing changes there. But if you start on let's say we used March 31 is at the end of Q1 and then you have a land bulk of 3 months, it's not that hard to get to get to the mid-200. So I don't -- I was actually kind of surprised that, that came out in the market that was a bit below expectations. We see that as really kind of exactly what the mine plan on. .

Okay. And just switching gears on Fekola, Fekola regional, I guess, you kind of give us a very good overview in terms of how great the relationships are with the Malian government, how kind of talks are progressing. Is there any kind of kind of point that you guys are stuck on? Or is there anything kind of color that you could provide as to -- is that Malian government kind of serious about you guys moving forward? Is that are they kind of going around giving you that permit, I mean, where is things stuck at right now? .

Well, in the 2023 mining code is relatively new. In fact, I just came the implementation decrees that very recently in the last couple of weeks, and we're going through that with them. I think that I was optimist, I suppose, but we have to be in this business so much coated I think that we had good productive meetings with the government to really understand the stance the implementation of it and what it really means not for -- as we said, not for focal what it means for regional production. So it's very important like many other governments around the world in the gold mining industry developing countries they don't kill [indiscernible] that last [indiscernible]. And that's the balance the need to strike between attracting investment of companies like ourselves to build the next gold mine in Mali, et cetera. So we're in an unusual position there because we're the ones in the country that have near-term scenario of tracking [indiscernible] is just going to be very beneficial to B2Gold and as all of the stakeholders, including the government and the people of Mali because we don't have to blast across the ore, we seem to do other we've already built the road. So we can quite economically hopefully, my an additional order. But in terms of the second mill or under foreign investors coming in and building coal lines in May, as I mentioned earlier, is a competitive situation for our investment dollars. So we're really working with the Malian government from a respectful position and it so success we've achieved in the past to understand the limits and implications. So not only for Malians self-determination is something that we all aspire to at the end of the day, I think that it happens over time. There is not a main company that I know of or the government is going to spend $600 million to go to my like Fekola at the end of the day. They need for an investment, they do responsible respectful for investment like other companies in methods an important part of the economy. So we're confident that with good consultation as we're having with the garment and we'll find the balance to continue to attract for investment in gold mining in Mali.

The next question is from Don DeMarco with National Bank Financial. .

So Bill, you mentioned that the mill is ahead of schedule. Is there any chance for first quarter earlier than Q1 '25 in light of this? .

Sorry, I ask you to say that question?

I'll answer that quickly and then I'll it over to Bill. Well, I'll let, of course, let Bill answer that, and then I'll give you my view.

So the answer is, really, it's almost a foot race now between can we mine out the Eco pit fast enough versus building the mill. So really, I don't see it happening much faster. If it's -- I would say it's immaterial. .

Okay. I was betting that and we were in this industry, you're sort of making tens every day, but the [indiscernible] that, I would think that given the track record of Bill's team and John Rajala are [indiscernible] in the mills that he builds, I think we're going to have a really good ramp-up and startup and I'll just leave it at that.

Okay. So my next question is sticking with the -- there was some messaging in the release that some of the extra spend might reduce OpEx, particularly the underground development, so on. But we do recognize that the Goose project life of mine plan is going to be finalized in the first quarter of 2024. But does any of this additional spend potentially lead to higher production than might have been forecast in the feasibility study? .

Well, once again, that's that. But unfortunately, we didn't get to choose the mill Sabina it's a good mill we can work with but doesn't really have the expansion potential of our B2Gold mill would normally have when you look at Fekola where we started and where we are today, dramatic expansion of the bill because we've built into the deal expansion. So we don't really have the benefit of that, that those with the bill that we have and [indiscernible].

Yes. So I don't -- in the short term, the answer is no. I mean what we've done really, the mill is kind of, as Clive said, is not a design mill kind of with that 25% design factor able to get bigger. And so what you're really talking about is can we bring higher ounces forward. And that's really what we've done in our current mine plans. Sabina kind of conceptually talked about without putting your numbers on it. And at the end of the day, that's had by taking the crown pillar kind of in the early years. That's exactly what we're doing. And so unless we have some success with some down entire grade exploration. I don't see that in the short term. .

But I won't say we're spending -- we have a large exploration budget to is this year [ $28 ] million. So we have a large expansion budget a dose and why is that, well, because there's tremendous exploration potential. And if you wave arms a little bit down the road, if we have continued success in 1 of the holes we drilled Meet deposit is 100 miles below the previous extent of the drilling we have 20 meters of 8 grams. Clearly, there's numerous on this 80-kilometer long trend of panini formation. So we're spending that money in exploration because we believe the potential is trends there. And once again, I'm just not going to add ourselves, that's bogus the mill and building well with the potential for additional mills on that property in the future is probably not a real estate goal objective.