B2Gold Corp (BTG) Q4 2022 Earnings Call Transcript

B2Gold Corp (NYSE: BTG) Q4 2022 earnings call dated Feb. 23, 2023

Corporate Participants:

Clive T. Johnson — President, Chief Executive Officer and Director

Mike Cinnamond — Senior Vice President, Finance and Chief Financial Officer

Randall Chatwin — Senior Vice President, Legal and Corporate Communications

William Lytle — Senior Vice President and Chief Operating Officer

Victor King — Senior Vice President, Exploration

Analysts:

Ovais Habib — Scotiabank — Analyst

Carey MacRury — Canaccord Genuity — Analyst

Harmen Puri — Bank of America Corporation — Analyst

Presentation:

Operator

My name is Shari and I will be your conference operator today. I would like to welcome everyone to the B2Gold Fourth Quarter and Full Year Conference Call. [Operator Instructions] Please be advised that today’s conference is being recorded. I would now like to hand the conference over to your speaker, Mr. Clive Johnson, President, CEO and Director. You may begin your conference, sir.

Clive T. Johnson — President, Chief Executive Officer and Director

Thank you, Shari. Well, welcome, everyone. As the operator said, we’re here to discuss the year end financial results for 2022. We had a very good year again and achieved our production and consolidated cost guidance and we’ve even reached our financial position for the year and also — We also declared another dividend of $0.04 a share for the quarter.

I’m going to pass it over to Mike Cinnamond now, CFO, who’s going to walk you through the highlights of the financial results. I think our news release is quite extensive with other disclosure material. Mike will give the highlights and then we can answer your questions. He’s doing a lot of marketing in the last couple of weeks since the announcement of the Sabina deal and we’re — we can answer or update you a little bit on that and answer some questions after we finish discussing the financial results.

So with that, over to you Mike.

Mike Cinnamond — Senior Vice President, Finance and Chief Financial Officer

Thanks, Clive. So I’ll start with the quarter and then comment a little bit on the full year results. So for the quarter, I think the story for Q4 is that our operations came through and delivered on the sort of forecast that we were going to have a big Q4. I think if you may recall, by the end of Q3, we were close to budget, but we — there were some delays in production at both Fekola because of water in the pit that was dewatered and then resolved at the start of the fourth quarter. And then some delays in Otjikoto just with accessing the Wolfshag underground. So that led to a big forecast of Q4 to catch up on some of the high-grade that we weren’t able to mine in Q3 as originally scheduled.

So good news is we delivered on it. In terms of results that that delivered, gold revenues were $592 million. So that was based on the sale of 339,000 ounces. It’s a bit higher than we budgeted to sell and that’s really a function of how high the production was. So if you look at production for the Q from our three operating mines, 335 — 353,000 ounces. 35,000 ounces higher than budget and it’s a quarterly record for our operations. And if you include our share of Calibre results, we had 368,000 ounces, which is almost 40,000 ounces higher than budget. The leader in that outperformance was Fekola, 244,000 ounces in the quarter, 37,000 ounces higher than budget. Quarterly record, and like I said, it came mainly from processing the higher-grade material out of Phase 6 of the Fekola Pit that we — some of which we plan to process in Q3.

But Fekola basically continued to outperform all around. The processing facilities are still putting more material through them than I guess the nameplate. And the mill feed grade was higher. So positive on all aspects of the gold production. This value of 459,000 ounces is pretty much right on budget. There were slightly lower gold recoveries during the quarter due to the nature of the higher ratio of sulfide and transitional ore versus budget, but that was offset by higher than expected feed grade. So came in right on budget.

Otjikoto 60,000 ounces, a little below budget and that’s really just a function of the timing of getting in the Wolfshag underground. We got into the Wolfshag underground and start producing ore there and gold there little later in Q4. So that’s running well now, but we are slightly under budget in the Q.

How does that factor into the operating results? For the consolidated cash costs from all operations, including our share of Calibre $468 per ounce, very close to budget overall. Fekola was pretty much in line with budget. That’s had slightly higher cost, but also record production, so it came in on budget. Masbate was a bit higher. Masbate cash cost for the Q were $872 versus a budget of $752. And that’s — production was online, so it’s really just a factor of inflation-driven higher costs almost — Not almost exclusively, but mainly driven by fuel costs, which were higher from Masbate in the period. And Otjikoto was $465 an ounce, which is $46 below budget. And that’s really just a function of the timing of getting into the underground that were lower underground mining costs because we’re little later getting into that than originally forecast.

Put that altogether, we pretty much came in in line with budget for the Q on the cash cost side. On the all-in sustaining cost side, the total all-in sustaining cost per ounce, including our share at Calibre was $892 an ounce. That’s about $130 an ounce higher than budget and that’s a function of broadly in line cash costs as I described, but impacted by higher royalties due to higher gold price. And also the main factor influencing it was the catch-up of budgeted sustaining capex. So as we reported to the end of Q3, some of the capex since it was originally scheduled for earlier in the year was forecast to be caught up in Q4. And overall, we did catch up in the Q. So that’s why for the quarter we get higher than budgeted all-in sustaining costs.

When you put everything together on the cost side — well, firstly, on the production side, just to comment, including our share of Calibre, we came in at 1.28 million ounces, slightly above the upper half or slightly above the midpoint of our guidance range consolidated of 990,000 ounces to 1,050,000 ounces. So good news, right in the range or in the upper half of it. Individually, Fekola came in 599,000 ounces. Couldn’t quite get it to that 600,000 mark. I’ll have to talk to Bill about that later. That was right at the top end of its annual guidance range of 570,000 ounces to 600,000 ounces. Masbate came in 213,000 ounces, slightly below the revised guidance range we had of 250,000 ounces to 225,000 ounces, but remember, it was at the upper end of our original guidance range of 205,000 ounces to 215,000 ounces. And Otjikoto 162,000 ounces, slightly below our revised guidance range of 165,000 ounces to 175,000 ounces. And that again was just a function of the timing of getting into the Wolfshag underground material and the ramp up of operations there. But overall, very pleased that we came in above the midpoint of our guidance range for the year.

On the cash cost all-in sustaining cost side, as guided, I think we came in for the cash costs consolidated from all ops including Calibre, $660 per ounce. So right at the top end of our original guidance range of $620 to $660. So I’d stress that that was the original guidance range. We didn’t reguide on the cash costs overall consolidated basis. So we’re pleased that even in a period of higher inflation, higher costs, and definitely higher fuel costs that all mining companies have seen, we still managed to come in at the upper end of our original range.

And similar story for the all-in sustaining cost side. There we came in consolidated all operations including Calibre $1,033 an ounce. So pretty much within our range of $1,010 to $1,050 per ounce. And what we saw there was cash costs at the higher end of the range, good sold production, and then the benefit of some offsets from fuel derivatives that allowed us to come in overall within the all-in sustaining cost range.

So the operating results. We’re pleased to report that we hit our guidance basically and on all measures, so that was good. Few comments on the operations overall. First of all, I’d like to just throw out there how we’re going to be describing reporting the results from our Malian operations. So there will be the Fekola mine, so we’ll report that separately. That’ll be Fekola Mine, which is everything from the Medinandi permit, which includes Fekola Pit right now in Cardinal. And then, we’re going to separately Fekola Regional. And that Fekola Regional will be the production from all of their licenses, so Bantako, Menankoto, Bakolobi, and Dandoko. And collectively, we’re calling the Fekola Mine and Fekola Regional, the Fekola Complex. So if you’re getting confused about the different pieces, that’s the way it’s going to go. So, just wanted to throw that out there for you.

At Fekola, you can see in our budget — We put our budget out earlier in January and you can see that we’re already in Phase I of Fekola Regional development, which is developing the infrastructure and the roads and some of the facilities so that we can start trucking material from the first of those Fekola Regional licenses, in this case Bantako, later in 2023. So that’s ongoing. Then, you will see in our recently announced Sabina acquisition, so what we’re going to do is in addition to Fekola Regional Phase I, there will be Fekola Regional Phase II. Fekola Regional Phase II will be a report that we think will be out by midyear when we’re doing a study to see if it makes sense which we think it does to build a second mill somewhere in those other licenses probably in the Menankoto license. And that mill will process saprolite oxide material, which we have in abundance in those other licenses.

So our goal with Fekola Phase I to continue as we have now in the budget, then to be able to absorb the continued construction of the Goose Project with the Sabina acquisition with the goal of bringing that online by the first quarter of 2025. And then once we have this Fekola Phase II study, the regional study for that second mill and if we decide it’s a go decision, then to schedule that around making sure that we get the Goose Project completed and up and running by the first quarter of ’25. So you’ll see us move into that Phase II Fekola construction a bit later in the process. And Bill, I think to talk a bit more about the overall scheduling and timing.

Couple of other comments. Gramalote project as we announced before. We decided and jointly with our partners, AGA, To begin the sales process on Gramalote. And so that process has been started, so it’s underway. So we will provide updates on that due course.

Then, really just to comment on couple other things in the results. So net income for the period attributable to shareholders of the company at $157 million or $0.15 per share EPS. Adjusted EPS was $0.11 a share based on adjusted net income of $121 million. And for the full year, earnings attributable to shareholders of the company $253 million or $0.24 per share EPS and adjusted EPS of $0.25 per share based on adjusted net income of $264 billion.

I will just comment on the cash flows. For the three months, you can see it was a big cash flow generator for us because of the weighting of that higher grade and the production that we had. So cash flow from operations, $270 million for the Q was $0.25 per share. And then for the year, cash flow from operations just under $600 million, $596 million or $0.56 per share. So we’re pleased with that result.

On the — or on the financing side, if you look through the year, $170 million outflow for dividends. So, maintaining that dividend of $0.04 per share U.S. per quarter or $0.16 per share annualized. And what I would comment on it at this point on the dividend, it’s our intention. Even as we absorbed the capex requirements for Fekola Regional Phase I completing Goose with the Sabina acquisition, the construction there, and then Fekola Phase II, it’s our intent to keep paying dividend at the current rate if gold prices stay where they are to keep — maintain our current dividend rate and work our way around those capex needs.

Looking at investing activities for the year, $389 million, pretty close to budget overall. On the operating sustaining side, we found that although there was a big catch up of sustaining capex in Q4, overall for the year we came pretty close to budget. We finished the year $651 million in the bank. We’re pretty much debt free, we have some outstanding project equipment loans and leases and some office leases, but we’re pretty much debt free overall. So we’ve got $600 million undrawn on our line of credit. We got another $200 million available in the accordion feature, that’s $800 million available on that line. And so if you combine that with the $651 million cash we finished the year with, we’ve got total liquidity of the balance sheet date of somewhere between $1.4 billion and $1.5 billion. So it’s that kind of liquidity. We got great syndicate of banks that we deal with, then we’ve got great partner with Caterpillar as it was — it’s been involved in all of our projects in the last few years, and lots of tools in the toolbox to be able to see our way through funding those major capex items that I mentioned, Fekola Regional Phase I, Sabina acquisition, getting that completed, and getting the Goose Project built on time as scheduled by the first quarter of ’25, and then also funding Fekola Regional Phase II. So I think we’re in great shape overall cash flow-wise and, like I said, to also maintain that dividend at the current rates.

So I think those were the main items I was going to focus on or comment on as part of the overall results. So with that, I’ll hand it back to Clive.

Clive T. Johnson — President, Chief Executive Officer and Director

Thanks, Mike. Obviously, we’re very pleased with the — with those results. I’m going to talk a little bit about the Sabina acquisition and I think everyone is aware of it. Now this was a — this was separately all share offer to Sabina which represented at the time of signing the deal was 45% premium to the Sabina share price at the time. And we’re very pleased with the market response obviously so far. Both sets of shareholders of B2Gold and also the Sabina shareholders responded very well to this deal. And we do think it’s a win-win deal, which is what we’ve done and accomplished in many more transactions in the past, where we can bring our strengths to bear to an actual project what Sabina represents with Goose, very high-graded, fully permitted project with very attractive economics, very attractive exploration upside, but also, ready to go with an excellent team.

I think that we continue to be very impressed with the work that was done by Sabina and their close relationship with work they’ve been doing with our very Inuit partner and the line owner in the Back River region. We look forward very much to working with both Sabina and our new partners in terms of what they’ve already built out, which is a great platform to launch this project. It’s into construction already. We’ve talked about that a lot on our conference calls before and some of the research has picked up on that but we are comfortable with the schedule, we’re comfortable with the projected capital cost and this is going to be a team effort working to — work with our well-regarded, very successful construction exploration development and production teams working with this very strong team at Sabina that Bruce McLeod has done a very good job of getting the project to — in construction at this point.

The deal itself to us was a very accretive deal and we had the opportunity of we were trading at 1 times net and they were trading at 24 times net asset value. So we were able to pay a significant premium yet stay within our parameters of an accretive deal. I don’t want to — I wanted to just talk a little bit about that because I think that there’s been a lot of criticism for work to consider to be large premiums in the deals such as this. At the end of the day, we don’t get too determined or obsessed with the premiums, we’re above value. So in this project, we assessed the value that we were prepared to offer to the Sabina shareholders of CAD1.1 million of our shares. As I said, that represents a significant premium to the deal, but the fact of the matter is the premium was significant because of the fact that we’re going to start with the trading, and obviously very difficult for the gold market, generally for equities isn’t great right now, but it’s also particularly difficult for single asset development companies or exploration companies.

So we were able to offer and what we think was a fair value of the deal for — in terms of Sabina and also stay within our parameters of what is an accretive deal to us. So market response so far suggests that the market seems to understand that, but as I said, there’s good — some good widespread approval for the deal.

I’m going to pass it over to Randall Chatwin right now just to talk a little bit about the timing of the deal through that perspective.

Randall Chatwin — Senior Vice President, Legal and Corporate Communications

Yeah. Thanks, Clive. As you know, we signed the deal last week. The parties are working hard towards a schedule and it currently looks like we were going to the Sabina Shareholder Meeting middle of April. The interim court hearing would be just prior to that time. Working backwards from there that would be the circular going out probably around the middle of March. And that would get us to a completion date about the third week of April. So expect — our new ordinary course of a BC plan of arrangement. We would be done by the end of April, for sure.

Clive T. Johnson — President, Chief Executive Officer and Director

And in the meantime, we’ve got lots of conversations with Bruce and then we have — we’re very much on the same page, B2Gold and Sabina, which is maintaining the schedule and draw them out. A lot of important things are coming up now with the winter road and all of — all those initiatives. So the idea from both sides is to maintain the schedule, do the work required as we move to close this deal to make sure that Bruce and his team are continuing on with the development they’ve been doing and whatever we can do to support and help. This is also a great exploration opportunity as we will say as well as this project has a tremendous potential to Back River district, very large property and some excellent geology and excellent drill results suggesting that normally as Goose opened down plunge of the surrounding and nearby zone called George which is a significant resource so far.

I think that’s several thousand ounces and pretty much open, but also our challengers’ ties really line up as I know Bruce’s team feels the same way. When you think about the potential of this whole district, there’s been some very good drill intercepts quite a long distance away from Goose and various sections have not had extensive drilling. So one of the things that we do bring to the party is the — our approach to exploration and our ability to fund the exploration. So as part of our plan, we would be able to crank up exploration starting as soon as we can to test not only the doubtless potential of Goose and George, probably the second, but also these other targets.

So, understandably when I’ve been where — we’ve been where Bruce and Sabina are before in our careers. You’re trying to get a mine financed to built on a typical circumstance, so your focus is obviously on everything you can do to continue to invest the project, and they’ve done a great job with that. Exploration is on the high priority list of spend at that stage, so I think that’s a real advantage and of course as Sabina shows — As the deal closes, getting our shares we’ll get — we’ll see the benefits of B2Gold shares and of this project as we work together to make that a great mine.

The exploration upside, also, of course, some — this industry-leading dividend that we’re paying but also we distribute shareholders unless they become B2Gold’s shareholders. So strategically this is a very good fit. We believe — a very good fit for B2Gold going forward. But you heard Mike talk about our plans to expand Fekola, the potential levers in two stages, work that’s underway. We trucked them separately or gathered the Fekola mill and the next stage that we just reported in June is positive which we expect will be the second mill of Fekola. That could be somewhere in $250 million, $300 million of capital investment for that. But the potential there between those two phases would be to add 200,000 ounces of gold production.

Fekola, which would take us 300,000 ounce a year level. That will be continue — to expect to be low cost production. So that’s a great asset and it’s far from over in terms of the amount of exploration we’re continuing to do now. It not only separates but as we had the spectacular recent results deeper in the sulphide particularly in November from the result until to the north. So that fits in very well strategically and that Goose river — Now the Goose lake mine rather there’s some potential as we’ve seen in the disclosure to produce 300,000 ounces of gold a year starting — currently scheduled for the first quarter of 2025. So if you put those two together, there’s 0.5 million ounces of production — annual production growth in the not too distant future here with the current existing assets as the deal closes for B2Gold.

That’s a great growth profile plus all the exploration and other things that we’re doing. We’re very focused on that as we’ve always been when we acquired the project. And in this case, you won’t see us doing any significant mergers and acquisitions for the foreseeable future. We really like the growth profile. Obviously, this is some geographic diversification for us as well, which we were keen on and I know our shareholders were as well. So this is part of the strategy that’s been going on for 12 to 13 years now, accretive acquisitions with some good exploration upside, building the mines, very good construction work to be done, and in this case, in conjunction with the Sabina team. And it’s illustrated in our wheelhouse with our Northern experience as well of course with two projects from the Bema days in the North of Russia and a lot of the construction team was some of the key members that are available to assist and move forward. So strategically, it’s a very good fit and our strategy going forward will be to maintain our extraordinary financial strength, which allows us to resist, frankly continue for the company, but be very focused on the assets we have in-house. And as I said, the growth profile to us looks very exciting. We’re very pleased with this new opportunity.

With that, I think we’ll open up to questions.

Questions and Answers:

Operator

Thank you. [Operator Instructions] Today’s first question will come from the line of Ovais Habib with Scotiabank. Your line is open.

Ovais Habib — Scotiabank — Analyst

Thanks, operator. Congrats, Clive and B2 team on ending 2022 on a strong note. Clive, just a couple of questions from me. Starting off with the Fekola Complex. In the press release and I think Mike Cinnamond has also talked about the company is expecting the construction timeline for Fekola Regional stand-alone oxide mill will be scheduled to allow for completion of the project in, I guess, Q1 of 2025. So am I thinking of this correctly that Anaconda stand-alone mill construction then would commence in early 2025? And does Fekola Complex production still achieve 800,000 ounces in 2026?

Clive T. Johnson — President, Chief Executive Officer and Director

Yeah. I think I’ll pass it over to Bill to respond to that but before I do that was in my notes, but I missed one of the things I wanted to really emphasize because I think it’s been — some people have missed it. We’re not going to try and build two significant mills at the same time. We never have in our history, we’re not going to start now. That’s part of the focus that we talked about. So the way the schedule looks out and Bill can respond. The whole idea is to schedule it this year, so we can do both and we can be very focused on both phases of expansion in Fekola, but in between those spaces, the construction in that Goose. So, what do you think, Bill?

William Lytle — Senior Vice President and Chief Operating Officer

Yeah. Thanks, bud. So Ovais, I think it’s important really to understand where we’re at in the permitting schedule for all this stuff. So if you think about the Anaconda Phase I, that’s been permitted, that’s in construction. We see that coming online really in Q3 of this year. So let’s assume that that won’t happen. We just took the executive out there and everyone was quite impressed with where we’re at. So that one’s done. We think that one’s a given. Now you’ve got the Back River project, which is fully permitted, all of their equipment is coming to site and basically a lot of the foundational work, the groundwork has already been done. So when the ice road opens up here, they’ll start dragging material down the road and they’re going to start doing rebar, concrete work, all the stuff, try and get the mill weathered in this year. So basically they’re quite a bit ahead of where Anaconda is at.

So you can imagine a scenario where they — we stand up to set up the mills or set up the buildings with all the concrete and rebar and steel. that then — that’s what happens in ’23. Now in ’24, there will be building, there will be installing the mills and everything into the buildings for Q1 2025 commissioning. So you can imagine with the Phase II Anaconda stuff, what we’re proposing is there will be a study completed in Q — at the end of Q2, which is on schedule. That will allow us really to kind of sequence what happens in 2024. So you could see that the rebar people, the concrete people, they’re going to be available in 2024. So I don’t say that we’re going to move away from it and that it won’t happen in ’26. You can see a path where those guys could get into the Anaconda regional mill in 2024 and 2025, a two-year build and hit the schedule right in 2026. So you’ll see ’23 Phase I coming on, ’25 Q1 Back River coming on, ’26 between — sometime between ’26 and ’27, still yet to be defined because the study is not out yet, but the Phase II Anaconda mill coming on. That’s how we see it.

Ovais Habib — Scotiabank — Analyst

Got it. Bill, thanks for that clarification. And just — my second question just relates to that Fekola Complex study that you just talked about, that’s expected in Q2. Will the study specifically look at the stand-alone mill at Anaconda only or this includes Fekola Underground as well? And then kind of general optimization of the Fekola Complex.

William Lytle — Senior Vice President and Chief Operating Officer

All right. So the — we were just talking about it this morning. The Anaconda, the Phase II study really looks at the Anaconda mill as part of the overall complex. It doesn’t include the underground stuff for sure because that’s within the Fekola Complex, but we are looking at additional sources of saprolite, right. Do you bring in Dandoko? What happens with Bakolobi? All that stuff, we’re starting to figure out where it all goes. So it really is a regional look and of course there is the zero alternative where you wouldn’t do it. We don’t see that as real, but that is part of the study.

Ovais Habib — Scotiabank — Analyst

Got it. Thanks for that, Bill. And just my last question. Just switching gears to Masbate. Now, Masbate is expected to produce about 180,000 ounces this year. Bill, how should we be looking at Masbate kind of near and long-term? Should we be expecting production to remain at current levels over the next three to five years? And maybe if you can give just — give us a little bit color on the exploration opportunity there kind of to improve increase the current mine life.

William Lytle — Senior Vice President and Chief Operating Officer

Yeah. So I’ll do the first part and then, I guess, Vic, you probably do the second part. So what we did is we took a look at really the capital cost of replacing the fleet and that’s how we went from that — we had kind of a real short — high output mine life and then instead we went as you just said as three to five years at kind of that 175,000 ounces, 185,000 ounces. And that’s what we’re going to see for sure. We’ve kind of normalized it by bringing back or reducing some of the capital cost for the fleet, which brought it down from 200,000 ounces, but of course, extended that period. And then, you see, I think, it’s six or seven years on the low-grade stockpile after that kind of in the 100,000 ounces.

So as far as — what we see as far as exploration, Vic, I don’t know.

Victor King — Senior Vice President, Exploration

Yeah. Ovais, the bulk of the exploration drilling at Masbate is essentially beneath the existing pits. The — It’s in Ireland and the regional potential around Masbate itself, it’s not that we don’t have any targets, but they’re not as prolific as we have said for Fekola or Back River. It’s a fairly advanced mine site. What we are doing in the Philippines is this year we have — setting up a 100% owned Philippine exploration entity and we are looking at other opportunities within the Philippines, leveraging off our position and our presence in the country. So that’s something that is seeing a lot more attention in the Philippines.

Clive T. Johnson — President, Chief Executive Officer and Director

We’ve seen a really positive response from them — we were making progress before with the previous government that shows that the gold mining gold pit mining could be responsible. Get response with the Philippines on our success and some others and that’s gotten even more positive with the recent elections with a government that is very much keen on foreign investment and very, very keen on more investment in mining, mining exploration, mining development. So we’re very pleased with that and have been encouraged by the government to do — look at more development and exploration opportunities going forward. So who better to build another gold mine that is continue to really help one in. So that’s going to be — that’s a new focus for us and this was partly a reflection of the opportunities in the Philippines that we see on an extremely mineralized set of per ounce. It’s not all the minerals, I suppose. But also that combined with a government that’s really encouraging successful for divestitures like ours to increase our vessel, which we’re open to initially starting out through exploration.

Ovais Habib — Scotiabank — Analyst

Okay. That’s for me — that’s it for me, guys. And thanks for taking my questions.

Mike Cinnamond — Senior Vice President, Finance and Chief Financial Officer

Thanks, Ovais.

Operator

Thank you. [Operator Instructions] And that will come from the line of Carey MacRury with Canaccord Genuity. Your line is open.

Carey MacRury — Canaccord Genuity — Analyst

Hi. Good morning, guys. Just a couple of follow-ups on Anaconda. Can you just remind me what’s required from a permitting standpoint for the Anaconda Phase II and sort of what timeline is around that?

William Lytle — Senior Vice President and Chief Operating Officer

Yes. So I’ll certainly answer it from the operational side. And Mike if you want to talk about it from a financial stability side, but — So on the permitting side, we’re currently working through a feasibility document which will be submitted. That’s what is coming out at the end of Q2. Based on that, of course, and the ESIA, we assume that we’ll get a construction permit. And I just want to reiterate the desire of the government to make this project go. We were just down there where we met with the Minister of Mines, and that was really one of the first questions out of his mouth was how quickly can you guys put this into operation, we will support it. And I’ll go as fast as the law allows. So we don’t see any issues. With getting the permit for that and certainly, the government is interested in us doing this as quickly as possible.

Victor King — Senior Vice President, Exploration

Yeah, on the. I guess on the on. The various agreements sites, so each of the licenses we’ve got four other licenses there each of them needs to have the mining license granted and then we put in place the mining convention and the shareholder’s agreement with the state. So the things we’ve done for Fekola. We’re working on that right now. The first one being Bantako, so that we can bring some that Bantako material into the plan this year. So I think we will use that as a template they’re going to be under the 2019 mining code, we believe. And once we get Bantako then we’ll kind of have the template for the others.

And the one thing that’s different for these licenses, then when we did Fekola, we’re also going to have tolling agreements, because we’re going to have potentially five licenses and up to two mills to process material from those licenses. So we’ll have to have a little bit of interaction between the licenses as well, but same as usual, under the 2019 code, we’ll get mining convention that will stabilize the taxes, the tax regime, and I guess the overall operating regime of those will be built and operated under and it’s — this business is just that we learned a lot from doing it for Fekola, so I think we’ll find out a quicker process this time around.

Carey MacRury — Canaccord Genuity — Analyst

So at Fekola, Mali, the government owns 20%. I think at Anaconda they own 10% currently with the option for 10% are those discussions, point to happened as well this year as part of this feasibility process?

Clive T. Johnson — President, Chief Executive Officer and Director

Yeah. They will happen as they in conjunction of the feasibility the Mining Code lays out that each party will have a valuation done and then they will negotiate what they think. At the valuation, they can agree between themselves, which is exactly what we did for Fekola and then the state. We expect the state will take the second 10% as before, so within the only 20%. So all licenses will end up being 80%, 20% for Fekola, and the others, that’s what we expect to see. But that happens with each feasibility is filed at the valuations agreed.

William Lytle — Senior Vice President and Chief Operating Officer

Okay. Great and then maybe just one more on Sabina. And I know this is probably a moving target, but like, can you talk about how much Sabina has funded of the capex to date and sort of high-level — what sort of capex number should we be thinking about for B2 at Sabina for the rest of this year. I can’t say how much they funded, we haven’t, we haven’t seen their latest numbers. Remember, right now the ground is opening up. So that number is changing on a daily basis, what I will tell you is that when we did the due diligence and we look at this thing we kind of — we looked at what they are doing and we looked at the potential to move the underground for which they obviously had looked at as well, and we — I think they had CAD640 in their study.

We think the number is CAD800 is what we through in ours. So we think the number is somewhere between CAD750 and CAD850 but we, in our study, we put CAD800.

Clive T. Johnson — President, Chief Executive Officer and Director

Yeah, there’s a lot of updates that will come out with centers of updated from that original feasibility study numbers. So a lot of — some things went into that, but that goes back to the feasibility study, don’t forget the initial capital estimate. So we’ve done a lot of work on due diligence, we’re working with them to come up with the number that we feel comfortable with.

Mike Cinnamond — Senior Vice President, Finance and Chief Financial Officer

I’m certain of the here of that CAD800 however roughly 35% has been spent. Kind of estimate as of the end of the year and then 65% funded and committed. So that’s kind of where we sit based on what we’ve probably seen from Sabina so far.

Clive T. Johnson — President, Chief Executive Officer and Director

And this is advancing the underground is about $65 million. That is the — this and the that CAD800 estimate that was not in the CAD640 estimate there in this

One or two instance.

Mike Cinnamond — Senior Vice President, Finance and Chief Financial Officer

That’s right. The difference there it’s not just inflation, there is also some optimizations and improvements that included in the $65 million project that mining.

Carey MacRury — Canaccord Genuity — Analyst

All right. Great. Thanks, guys.

Operator

Thank you. [Operator Instructions] And that will come from the line of Harmen Puri with Bank of America. Your line is open.

Harmen Puri — Bank of America Corporation — Analyst

Hi. Good morning. Thanks for taking my question. Sir, my questions have actually already been asked and answered, but maybe just one final one from me on on Gramalote can you please provide us with some sense for how advanced the sales process is right now or any sort of color you can provide on maybe the interest you’re seeing?

Clive T. Johnson — President, Chief Executive Officer and Director

All right. I think just a high-level summary, we’ve appointed an advisor and we’re about to commence the actual Phase 1 of the process. We’re just prepping everything, so that’s where we’re at and it’s hard to say for sure, but we expect that will be somewhere within a six-month timeline, I think for a process to be actioned and completed, hopefully. There’s nothing in our grid…

Harmen Puri — Bank of America Corporation — Analyst

Okay. Fair enough.

Clive T. Johnson — President, Chief Executive Officer and Director

Yes. They’re sending in a current fashion…

Harmen Puri — Bank of America Corporation — Analyst

Yeah.

Clive T. Johnson — President, Chief Executive Officer and Director

For cash forecast Q4 that includes the seal of Gramalote, there’s nothing in it from that, the split.

Mike Cinnamond — Senior Vice President, Finance and Chief Financial Officer

That’s correct.

Harmen Puri — Bank of America Corporation — Analyst

All right. And just on your stake in Calibre, do you still view that as something maybe non-core and something that can also be divested over the next year or two?

Clive T. Johnson — President, Chief Executive Officer and Director

We have no plans for that. We think they’re doing, they’re doing a good job and that’s been a good transaction for all included for our employees. As they move from B2Gold to Calibre and that’s been the success it comes up a lot from the environment, the social and financial things that we’ve done. We’re happy to show ourselves and then we have no reason or need to sell that block and then loans since you brought that up just, I’m talking a little bit of our other projects. People have wondered with the speed at Fekola drills — are we considering selling other assets? The answer is no. We just got back from a great Africa tour. We had a great trip to Fekola and the meetings in Mali and they were all down to — and then we had similarly a great tour of the mine and throughout

Did cover meetings.

We’re very happy with those jurisdictions we just mentioned the Philippines. We’re very happy when we’re doing the Philippines expect all jurisdictions we’re committed of course potential significant further investment in Mali with the second mill and ongoing exploration work. So we’re not interested in this we’d like — really like to just sitting about the existing mines, the potential to expense the core of course would be with the successful closing this Sabina deal we laid that out somewhere.

We’re not looking to sell additional assets. We haven’t unfortunately we tried that, unfortunately, we want to be able to upgrade financially to be at the point of investment opportunity that we — for us and fit with us, now it’s 4 million ounces in there. The good part Colombia to be in and that’s okay with a permanent center and then we’re confident that some of — I was going to take that on and maybe have some returns to our shareholders.

Harmen Puri — Bank of America Corporation — Analyst

Perfect, thank you for that color. That’s very helpful. That’s it from me.

Operator

Thank you. And speakers, I’m showing no further questions in the queue at this time. I would now like to turn the call back over to Mr. Clive Johnson for any closing remarks.

Clive T. Johnson — President, Chief Executive Officer and Director

Thanks, operator. Yeah. I guess in summary, closing, I’m very pleased with the year end results and it’s a real attributable I think to our teams coming off of the effort the tour recently here at being at the Philippines some time long ago, it really strictly just now how extraordinarily talented people are and 5,000 employees that we have at the B2Gold, we’re very proud of our ESG track record and sort of information on our website and our responsible mining report about our commitment to that as well known establishment. We sit a great position in the company today, we’re very strong in operations, extraordinarily strong in health and safety with elements of our business go past debt-free now has the opportunity for dramatic growth over the next three to four years. We like where we sit and we look forward to growing our pursuits and working the Bruce’s team at Sabina on this great project with profitability to announce that deal on budget for closing. So I think that’s all we have for now. Thank you. We’ll be updating you shortly. I’m sure we’ll talk to some of people on the line at BMO Conference next week. So, thank you for your time. [Operator Closing Remarks]