B2Gold has reached an agreement with the government of Mali regarding the ongoing operation and management of its Fekola gold complex in the West African country.
The Fekola Complex comprises the Fekola mine and the Fekola Regional project. The former includes the Medinandi permit, which hosts the Fekola and Cardinal pits and Fekola underground.
Located about 20km from the Fekola mine, the Fekola Regional project includes the Anaconda Area, which features the Bantako, Menankoto, and Bakolobi permits, as well as the Dandoko permit.
The new agreement, which encompasses terms for both the Fekola mine and the Fekola Regional project is set to expedite key permits and introduce substantial changes to the governance and fiscal frameworks of these assets.
Under the agreement, the Fekola Regional project will benefit from expedited issuance of exploitation permits. Mining operations are expected to commence in early 2025, with initial gold production potentially adding between 80,000 and 100,000 ounces per year.
The Fekola underground project is also slated to begin production in mid-2025.
According to the new terms, the regulatory environment for the Fekola mine will remain under the 2012 Mining Code and the Fekola Mining Convention, which will remain in force until 2040.
In contrast, the Fekola Regional project will adhere to the new 2023 Mining Code. This distinction ensures continued stability in the ownership, income tax, and customs regimes for the Fekola mine.
In addition, the state’s 10% ordinary share interest in the Fekola mine will be converted to a 10% preferred share interest, providing priority dividends going forward.
B2Gold has also agreed to settle all tax assessments and customs disputes from 2016 to 2023.
In response to new tax requirements on fuel imports for the Fekola mine, B2Gold will face additional tax. The state has agreed to reduce revenue-based taxes and royalties by 2% across the entire Fekola complex, which is expected to offset most of the new costs.
B2Gold has also committed $10m to exploration in 2024, focusing on discovering additional high-grade mineralisation within the Fekola complex. This exploration is intended to extend the mine life and enhance gold production.
In July this year, B2Gold said that its Gramalote gold project in Colombia will require a pre-production capital expenditure (capex) of $807m, based on the findings of a preliminary economic assessment (PEA) study.
