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B2Gold

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September 16, 2024 at 10:00 AM (MDT)|Broadmoor Hotel & Resort

Clive Johnson

President, Chief Executive Officer & Director

Clive Johnson has served as a Founding Director and the President of B2Gold since December 2006 and Chief Executive Officer since March 2007. Mr. Johnson oversees our long-term strategy and development and leads the executive team of B2Gold. Previously, Mr. Johnson was involved with Bema Gold and its predecessor companies since 1977. Mr. Johnson was appointed the President and Chief Executive Officer of Bema after it was created by the amalgamation of three Bema group companies in 1988. He was a driving force in Bema’s transition from a junior exploration company to an international intermediate gold producer. Mr. Johnson received the 2004 Viola MacMillan Developer’s Award from the Prospectors and Developers Association of Canada and in 2013 he received the Pacific Entrepreneur of the Year Award for Mining and Metals.

This is an automatically generated transcript. Denver Gold Group cannot accept responsibility for mistakes, errors, omissions, or any action taken in reliance thereon. Use of this transcript is governed by Denver Gold Group’s Terms of Use.

Thanks Andrew. Good morning everyone. Today, I'm gonna be saying some things that will be forward looking and therefore may be subject to change. Hence this cautionary statements. So this is a good timing for B two gold to be back here at this conference. This is a real turnaround time for us. I'm going to spend most of my time today talking about what's changed in the last week, which has been the resolution with the Malian government on the way forward. Not only to continue successful production at for Colum, I look to expand operations there as well. Additionally, we just come out with a capital cost estimate to complete construction at the Goose mine in Nunavut. The costs are a bit higher, but I'll talk to you, walk you through that and tell you why we have such a high degree of confidence, being able to bring this great Canadian mine online on the current schedule and the new budget. So many of you will know us if you don't. There's a great website and there's we're around lots of information we can give you, but I'm gonna really focus today on those key elements of change. And what I think is a, a real classic turnaround story here. So the two, the three producing minds right now or the Fola mine in Mali, the OD Cota mine in Namibia and the Mas Masti gold mine in the Philippines. In addition, we have development projects goose, of course and construction the Gramma Latte project in Chile which is starting sorry in Chile and in Colombia which is starting to come into focus as another really good growth opportunity for as well. We're also very committed to exploration worldwide. We've had a great track record being back in the day and B two at at finding lots of gold at existing sites are making their own discoveries that continues in earnest, especially in this current market where junior exploration companies are struggling so much. We see ourselves as a friendly big brother that can come in and invest in what they're doing and play an important role. There was some debate whether you, whether you show this slide or not, but actually no, I won't but no, I won't. Actually, at the end of the day, this slide tells you about what we, how we got here, but also tells you that this has been a challenging year in 24. We see ourselves coming out of that in 2025. So basically, what you're seeing is a history of accretive acquisitions over 16 years ago, we started B two Gold at zero after a great success at at be A Gold and we had a great track record of doing a creative acquisitions, often of junior companies and doing a great job of building our own gold mines on budget on schedule in various challenging parts of the world. with, with great success. We've also always had great exploration upside to unlock the full value of the projects we've acquired. So in terms of 2024 seeing about 53% of our production was coming from the the F Cola mine and then 23% from Maba in the Philippines and 22% from the Ojo coal mine. So we knew that 2024 was going to be a challenging year. There's a corporate term for it, I think it's Yeah, yeah, shit year. That's what 2024 has been very challenging. Now, some of the challenges we knew we were facing, there are certain things at Fola that were in the mine plan. We knew we had a higher strip ratio. We knew we had some lower grade during the year as per the mine plan. And we knew we had some big capital expenditures. So we had a big capital spend to dramatically increase the solar power. There also major capital spend on tailings, processing and storage facilities and some, I don't know who but some brilliant accountant decided that if you're going to spend a huge amount of capital cost to build something like a solar plant or Tailings facility, it's gonna, you're gonna use for 10 years that for some reason you're supposed to take the entire capital costs hit of that big investment in the year you spend it. Which is why our costs. One of the reasons why our costs are higher this year, $1400 sustaining costs a big jump up. Part of that is because of higher oil sustaining costs because of the good things we're doing. And part of that, as I said, as we've seen some expected lower grade and a higher strip ratio. We did suffer some equipment availability issues which is disappointing over the year, which we've resolved those as well. So we came up with a new guidance for the year based on all these factors. The other major factor was we didn't get the permit from the government of Mali in time to start trucking ore from the Fola regional trucking ore down to the Fola mill that was supposed to give us another 100,000 ounces or thereabouts a year that was delayed as the Malian government tried to figure out what they were going to do with the new mining code. Fortunately, that's all resolved and behind us now. So lots of reasons why 2024 had its challenges. The good news is this is the turning point. We've seen it in our stock up 20% in the last week. People are realizing we've dealt with malle good, positive story going forward again, it's always been, but again, reiterating that and also Goose is coming into focus is a great successful mind. So next year, we're looking at a little over a million ounces of production projected for 2025. After all, sustaining costs will start dropping down to the kind of levels that we're used to and are projecting in the future somewhere around $1100 an ounce. So this is sort of the the money slide, I guess because what this all means with the changes in the last week, the mali resolution with the government and also the new goose budget and update on the schedule. It's all about growth. We have this extraordinary opportunity in seeing growth from existing assets. So in the first quarter of next year, we'll start trucking or to the Fola mill from the FLA regional that can add up to 100,000 ounces of gold production a year in the very short term. In addition, we'll be going underground in F Cola in the middle of the year and also the big capital spends I mentioned are behind us. So there's 100,000 ounces of growth potential in the near term for F Cola that goose it's on the new schedule to start producing gold in the middle of 2025. Construction is actually on schedule and the bill could be ready to receive or the first quarter of 2025 on schedule were delayed because of development delays and, and not getting ore ready to go. And I'll talk about that a little bit later in the first quarter. So first pour in the 2025. So there's 310,000 ounces a year for at least the first five years and a 14 year my life low-cost operation extremely high grade, a huge exploration belt of 80 kilometers abandoned iron formations in Nunavut and a really solid strong project that we're fully on top of. We're looking forward, we'll talk more about that. And finally, if we wave our arms a little bit more, we have the Gramma project in Colombia and the Gram Lati has been around for a long time. We've been involved in it, but it's never had one owner until now. It was Anglo, go to Shanen ourselves. It had to be big and it was car gonna require a huge amount of capital cost to put this open pit coal mine in production in Colombia. We bought Anglo out last year and have for the first time looked at it as a stand alone project. We have a PE A L which is a very high quality P A and we have a full feasibility study in the middle of next year. It has the potential for a long my life from producing 230,000 ounces out of the first for the first five years or so. subject to getting a permit, we've had a permit to mind. We need to re to rework the permit. We're having a smaller footprint, smaller production and a much more robust project economically that had been envisaged before with the two partners needing a very big operation. So that's a little further down the road. But if you add that all up 600,000 plus ounces of production growth in this company from existing assets, we own these assets. We don't need to go buy anything. This is the growth we need to realize for our shareholders. And that's the way forward of unlocking the value of these assets for our shareholders. So clearly, we've been mentioned, it being a, you know, a tough year in 2024 and preceding that, the problems in Mali are not to be underestimated the perception of political risk and what we've been through over the last two years or so. The market doesn't like uncertainty. We actually lost about $5 billion in market cap in this company from September of 2020 to earlier this year in February. That's a hell of a hit. And I think it's been overdone the reaction of the market obviously swings. So we've had, we've got hammered in the market because mainly because of the uncertainty about the future of Mali, we're pleased to be able to put meat on the bones and tell you how we've resolved that. And already we've seen in the last week, our share is starting to reflect the fact that we now have a clear way forward in Mali, a clear, clear way forward in, in growth and the assets that we're talking about. So the mallee agreement simply put a lot of time negotiating with the Governor Mallee. The Governor Maley wanted more revenue from gold mining and anything else they could get. So it was a protracted discussion centering around the fact that the FEC Cola mine is actually protected under the 2012 Malian Mining Co and Convention. And that's very important to realize. So we, that is good until 2040 our convention there on F Cola itself. So F Cola is protected under the 12 code for things like ownership. It's 80% of us, 20% of the government for things like offshore international arbitration, income taxes, et cetera. There's a lot of protections in the 12 code that continue to go forward that the, the regional or the regional project will we see 20 kilometers to the north? That's under the 2023 mining code, which is, you know, quite prohibitive to be frank, a significant increase in royalties, et cetera. But because, and ownership of the government up to 30% but because of the fact that we're just trucking or there, the economics make sense to us. So we're looking at the roads already built, we're ready to go. We just need the exploitation permit from the government which they have committed to giving us. Now, in the very short term, we've had something in common with the governor of Mali for some time during negotiations, one they continue to want foreign investment, responsible foreign investment in mining, they want for Cola to continue and they want expansion. So we've had that in common with them, the ability to expand to their benefit into ours. I think that's helped in negotiations. I also think what's helped us in negotiation with the Governor Malley is that we are very good corporate citizens. We're famous for worldwide fairness, respect and transparency is how we look to treat people. And we've had a good resolution with the government. There weren't a lot of back taxes or penalty payments the government could attribute to us. We didn't have some big cash settlement from the government of new money to, to pay the way forward. In fact, we reach a settlement, the government and out of the payments we'll make to the government over the rest of the year, 75% of those payments are from funds that are already allocated to the government, such as dividends, they've already been earned. So the money we're giving, the government is giving it a little earlier than they would have gotten it under the normal course of business. But at the end of the day, we've reached a, a very good solution going forward and it allows us most importantly to get on with the business of expanding for Cola. But I want to make a point that because it gets so much lost in the media and the bigger picture of things. I understand that we felt the brunt of it, not the first time of, of uncertainty in the investment community and how much it is disliked. But Maui has been a good place to be in gold mining for 40 years. You know, ask Mark Bristow, asked Ringold Barack and others. It's been a very good place for gold mining. They've, they've honored their laws time and time again. The laws, no matter what convention you're under, they've honored their law. They know it goes to international arbitration if they don't, but they've honored their laws. It's been a good success story. So I just want to point that out because people seem to think and believe some of the rumors about the government wants to take over gold mines and, and give them to somebody who's not democratic, maybe at the end of the day. But that's just not true at all. The government with this resolution for us and other companies are, are negotiating this shows that Mallie wants gold mining wants foreign investment. And we've always, even this last couple of years, we've had great government relations in running the mine and dealing with everything we've dealt with. We've done so nothing has really changed in the sense that they've been a good place to be in business. Now, there's certainty going forward. I think that's a very important point for us. The other thing that will recommence now that we're in the government is exploration in the region to the north. We've had great success there. That's why we're tracking ore down, but there's lots more potential there at the end of the day, what's the ultimate value of F Cola the Fola region? We got $10 million exploration budget this year. That's going to help us and much more in the future. Unlock the true value of what Fola is. Remember, we started for Cola in 2014 as a 4 million ton a year operation, we subsequently expanded 9 million tons and increased production from 300,000 ounces a year to 600,000 ounces a year. This is a great success story for Cola, not only for Beach of Gold and its shoulders but for Mali as well. So the growth comes from underground. I mentioned that Fola coming in the middle of next year and also trucking ore from 20 kilometers away. Let's talk about the Back River. This was an acquisition we made last April very high grade, very attractive project in northern Canada. Why did we do it? Well, this is right in our wheelhouse. Be two gold is be a gold are well known for taking on challenging projects. And the beam a days we built two mines in northern Russia. One of them was Cupel, a spectacular high grade mine that subsequently Kross paid $3.5 billion to take over our company, which we didn't want, but we don't believe in a trench management. We built 470 kilometers of ice roads every year and, and the coupel project in Russia, shipping material up the ocean north of Russia and the building 470 kilometers of ice roads. We know ice roads. We do it ourselves. We've done it twice in Russia. We're now doing it and I've done it here successfully. So this is a really good project for us. Geograph with locations for sure, but it adds a lot and the upside potential is, is dramatic. This is the slide on the right hand side just shows you the property and some of the existing targets that have been successfully drilled into resources and reserves, but all the zones are open. They can go down great depth here. Also, in addition to that, we have, we have come up with a new schedule. So first production is now first quarter of 2025 I mentioned construction is actually on schedule at the mill and the mill could be up and running at the end of the first quarter of 2025. Why are we behind budget? What's been the challenge here? Why do we have a new budget? We pride ourselves in delivering projects on budget on schedule, building them ourselves. This was a bit different outside of what we normally do. It would be to, to gold and be a gold because we normally acquire a project at the feasibility stage and a friendly takeover. We redo the feasibility study to our standards. We then design the mill ourselves, we build the mill ourselves, we do everything ourselves. That's why we've been so good at construction being on a budget on schedule. Here was a different story. We came in and did a deal here on a company with single asset company that decided they would try actually to build a mine in remote the part of Canada without a lot of construction experience and also without a strong balance sheet because it's a single asset company with a challenging project. So they, they decided they were gonna try and build this mine using various forms of alternate financing. I'll call it private equity streams, et cetera. At the end of the day, we had to make a decision in April last year. After doing the due diligence, we could to go ahead, we added additional capital cost and we had to pull the trigger because if the previous owner had drawn down $1 of the financing, they were contemplating on private equity, the streams offtake agreements. We would have walked away forever because that financing in our estimation was going to cost something around $200 million of the NPP of the project to get the mind financed. This is something that's a real threat to our industry. As far as I'm concerned, explorers who are fortunate to find something, don't try and build it, don't try and finance it be taken over by hopefully at a profit as we've done time and time again to the show has to be taken over by a company that has the financial firepower and the technical capability to build these mines. This is not good for our industry. So the revised capital costs were up about 23%. A couple of reasons. One of them, unfortunately, given the seasonality of this project, we were not able to get on site during our due diligence period and look at the material that was on site, the mining equipment, et cetera that was supposed to be ready to go. It was used equipment, it was junk and we had to take a consumed amount of money to replace that equipment. That's caused us a three month delay in having or available in the first quarter of next year. So Sabina did some good things and they did a very good job of some exploration, some permitting and government relations with nude it. We have an excellent partner with the kick in association. They did some very good things that way. Not so much in terms of getting into construction. So we inherited a mill they ordered which we're ok with. But other aspects we had to train dramatically and react very quickly as a test market construction team that we've been able to stay on the same construction with a new budget. We're highly confident of this budget. 66% of it has been spent already and the rest of it we're very, we've got a very good budget, realistic budget. Today, we fully expect to meet that on the new budget and on schedule great progress in construction. This is very challenging logistical project which is right up our alley. As I mentioned, every year you have to see if I have a map here that every year we have to take, you get everything to Montreal. And this year 10 ships left Montreal up the Arctic Ocean and came down Bathurst Inlet where we have a marine landing area, we offload everything in a marine landing area and wait for the freeze, get the ships out and then we build 100 and 60 kilometers of ice roads. We just successfully did that this last year. The ice road lasts for about 1012 weeks. So you better get it right and we got it right, just like we got it right in Russia. So everything needed to finish. Construction is on site right now at goose everything needed is on site. The mining crew has come in. We are actually catching up on the mining by and we'll have a stockpile available to run through the mine in that end of the second quarter of 2025. So we have a high degree of confidence in what we're doing. It's a classic, very challenging logistical construction project in the, in the Arctic something, as I said, we're very good at doing. So, these are one of the 10 ships or six have arrived. The other four are on the way. There's the side of the Ball mill that's up and there's some of the camp facilities and build facility buildings that you see there. I've already talked a little bit about Grama Latte. Basically I mentioned it had always had two owners. We needed to have to be a very big mind to be of interest to two substantial gold producers, owning 50% that all changed when we bought at AJ and looked at it as a single asset owned by one company. So we don't need 400,000 ounces a year anymore. 2 52 40 sounds great. And the economics are pretty robust for this project now, it's called A PE A but it's really not because this has had many feasibility studies done over the years, some by A G A, some by ourselves. There's not a lot more work to do. We're putting the engineering together now on A smaller case and we've already had a lot of local government support, federal support. We actually had a mining permit, construction permit. We're now revising the permit with a smaller footprint. So we're pretty excited about this in the, in the longer term view. So just to wrap all of that up,, this is a turning point. We've been in the Pelly box for a couple of years. We've been hammered in the market, but we persevered and we now set the stage going forward with a successful negotiation with the Governor Malley and a good way forward to expand with a great project in goose. That's coming more and more into focus and we're very much on top of and the ultimate potential, not only your Grandma Lazi, but what does this company very good at? In addition to the many things we've talked about what we're very good at is finding gold as well. We're also in an extraordinary financial, strong financial position. At the end of June, we had $460 million in the bank. And we have a revolving credit facility for 700 million us that has an accordion facility that can go to 800 million us. That is undrawn at this time. So very strong financial position, we've been able to pay a very attractive, I guess now it's about a 5% yield dividend, the highest dividend in the gold space. So we've managed our financial affairs extremely well, which I think is one of the real keys to our success over many years. So going forward, you know, we're, we're a world leader in, in safety and ESG time doesn't allow to talk about it today, but we're very proud of that and that continues so great. We're going on in Nunavut with our, with our Inuit partners. And that's the kind of thing we've done all around the world. We'll continue to do that, maximize profit of gold production. Always maintain a strong cash balance and focus on organic growth. We are not looking at any serious M and A. Why would we with 600,000 ounces of potential production growth from existing assets that we're not getting value for the market? Why would we look at M and A? So we'll continue to look at invested junior companies like Snow Lion in the Yukon where we got it early said we just want to be a friendly big brother if we can help down the road. So we own 9.9% of that. You'll see us do that to fill the gap of funding for junior companies. It's inexplicable how quality junior exploration projects and companies can't raise money at a reasonable level. So what's the response to that? Well, in response to that, we can play a role, not, not as, not as trying to bear hug them or, or, or, or try to be aggressive. It's just, that's not our style. We've done friendly takeovers throughout the whole piece and with great success for all involved. But we'll continue to look at that as an avenue for long term growth. So as I said, we've been in the penalty box for a couple of years now, we're coming out, skates are sharp. We got a new stick and we're looking to, looking to score some goals and maybe, you know,, get us some action, so we're back. Thank you. Our next presentation is from Endeavor Mining. Speaking today is Ian Cocker, the company's Chief Executive Officer.


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