B2Gold’s Orosi mine in Nicaragua starts production

Vancouver-based gold producer B2Gold (BTO-T) has poured the first dore bar from its Orosi open-pit mine in Nicaragua and expects the mine will produce between 80,000and 90,000 ounces of gold a year.

Ore processing began on Dec. 15 and over the next few months the Orosi mill is scheduled to ramp up to 3,500 tonnes of ore per day. A second ball mill, fabricated in China, will arrive in the first quarter of 2010 with commissioning before the end of the second quarter. With the addition of a second ball mill,  throughput is expected to reach 5,500 tonnes per day.

The mine is scheduled to produce gold at an estimated average operating cash cost of US$465 per oz.

The Orosi facility will process ore from the operating open pit and from a stockpile of spent-ore from the previous heap leach facility (about 30% spent-ore over the mine life).

Exploration targets at Orosi are anticipated to extend the mine’s initial seven-year lifespan. B2Gold notes there are exploration targets adjacent to and below currently planned open pits and along the 20- km-belt of mineralization on the property. Exploration drilling will
start in the first quarter of 2010.

B2Gold also owns the Limon mine in Nicaragua, which is forecast to produce about 40,000 ounces of gold annually.

Combined production from both mines is projected at 120,000 to 130,000 ounces this year with average operating cash costs of roughly US$500 to US$525 per oz. gold.

Both mines are debt free and un-hedged.

B2Gold was founded in 2007 by the former executive and management team of Bema Gold. (Kinross Gold acquired Bema in Feb. 2007 for Cdn$3.5 billion transaction in February 2007.)

In addition to its mines in Nicaragua, B2Gold has development and exploration assets in Nicaragua, Colombia and Russia’s Far East.

At presstime in Toronto B2Gold was trading at $1.37 per share. Over the last year it has traded in a range of 44.5¢-$1.46 per share and has 282 million shares outstanding.