COUNTRY FOCUS: Nicaragua's gold mines

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Monday, March 20, 2017

Nicaragua's gold mining industry plays an important role in the country's economy, with exports of US$358mn in 2016, the third highest after coffee and beef.

BNamericas takes a look at the country's three producing gold mines.

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LA LIBERTAD

B2Gold's La Libertad is Nicaragua's biggest gold producer, with 2016 output of 132,431oz.

Located 110km east of capital Managua, B2Gold has a 100% interest in a mining concession covering 10,950ha, plus two contiguous exploration concessions (Buenaventura and Cerro Quiroz) covering 4,600ha.

The company pays a 2% royalty on the value of gold and silver output to Inversiones Mineras, which represents unionized mine workers in the country, plus a 3% ad-valorem tax to the Nicaraguan government.

Limited artisanal mining also continues at La Libertad.

PERFORMANCE

Performance at the open pit and underground operation was boosted by higher grades and recoveries in 2016, as the mine schedule was changed to generate additional high grade ore from the Jabalí Central pit.

The adjustment follows successive delays to the development of the Jabalí Antenna pit, due to permitting and community resettlement issues. Jabalí Antenna is currently planned to enter production in 3Q17.

2017 GUIDANCE

B2Gold expects to produce 110-120,000oz gold at La Libertad in 2017 at cash costs of US$625-655/oz and all-in sustaining costs (AISCs) of US$785-815/oz.

In 2016, cash costs were US$659/oz and AISCs US$904/oz.

B2Gold plans to spend US$6.7mn on 15,000m of diamond drilling at La Libertad this year, mainly focused on underground mine planning.

EL LIMÓN

B2Gold's smaller Nicaraguan gold mine is El Limón, 100km northwest of Managua

The underground and open pit operation produced 45,483oz gold in 2016, below guidance of 50-60,000oz.

The mine was impacted by mine fleet availability limitations and water control issues, which reduced ore flow from the Santa Pancha area, with mill feed supplemented with lower grade ore from surface stockpiles.

Additional equipment has been purchased and operations reorganized to improve performance.

Cash costs were US$781/oz, compared to original guidance of US$610-650/oz, with AISCs at US$1,189/oz, down from US$1,279/oz in 2015.

B2Gold expects to produce 50-60,000oz gold at El Limón this year at cash costs of US$655-695/oz and AISCs of US$1,065-1,095/oz.

The company plans to spend US$5mn on exploration in 2017, drilling 11,000m with the aim of increasing mine life.

B2Gold's 12,000ha El Limón concession is valid until 2027. Mining at the site dates back to the 1850s, and the mine has been in continuous production since 1941.

Operations were temporarily halted due to a blockade by a union and community members in 2015.

BONANZA

Hemco Nicaragua operates the Bonanza gold mine in Nicaragua.

The mine, in the north Atlantic autonomous region, produces about 36,000oz/y gold and 83,000oz/y silver.

About 700t/d of ore with grades of about 5.4g/t gold is processed. Hemco's mining concession covers 12,528ha.

No-one from the company immediately responded to a BNamericas request for 2016 production and 2017 guidance data.