B2Gold expands potential of Nicaraguan gold mines (May 31, 2010)

VANCOUVER —B2Gold (BTO-T) has hit long and high-grade gold intercepts as part of a drill program to extend the life of its 100%-owned La Libertad open-pit gold mine in central Nicaragua.

The drill results follow B2Gold’s reopening of the mine in January, which is expected to produce between 80,000 and 90,000 oz. gold a year at a cash cost of about US$500 per oz.

The mine was shut by Central Sun in 2007 after 11 years of operation to reevaluate the use of heap leaching, which was only achieving 40% recoveries. B2Gold, which secured full ownership in early 2009, is now using a conventional milling operation and expects it can achieve recoveries of around 90%.

So far, the company has exceeded the early production target of 3,500 tonnes per day, averaging a daily 3,900 tonnes for April. B2Gold has installed a second ball mill that will allow it to bump up production to 5,500 tonnes per day when the mill comes online in August. The current lifespan of the mine is estimated at seven years, but B2Gold is working to lengthen it with an extensive drill program in the area.

The company has concentrated exploration on the Antenna and Central zones within the Jabali vein system that sits at the east end of the 20-km-long belt of veins on the Libertad property. Jabali is an east-west trending, low-sulphidation epithermal quartz vein system traced over 6.2 km. The high-grade ore at Jabali was mined between 1862 and 1956, but trenching indicates the lower-grade veins and stockwork were not.

At the Antenna zone, hole 1 cut 21.3 metres grading 1.37 grams gold per tonne and 36.91 grams silver per tonne from 65 metres. Hole 5 intersected 32.7 metres averaging 8.74 grams gold and 38.88 grams silver from 103 metres downhole and included 6.1 metres grading 41.2 grams gold and 155.18 grams silver.

At the Central zone, hole 7 returned 18.7 metres averaging 4.1 grams gold and 19.07 grams silver starting at 66 metres. Hole 8 intersected 18.8 metres grading 4.34 grams gold from 97 metres, with silver assays pending.

B2Gold also carried out trenching on two veins located 7 km northeast of the Libertad mine. The east-west trending El Carmen vein, traced for 1.2 km, returned 20.1 metres grading 5.59 grams gold and 49.92 grams silver from 10 metres, and 13.1 metres carrying 1.09 grams gold and 2.57 grams silver from 11 metres. The Escandalo vein, traced for 500 metres in the same direction, cut 22 metres carrying 2.85 grams gold and 15.38 grams silver from surface.

Initial diamond drilling to explore below the current reserves at the Crimea and Mojon deposits has also hit impressive grades. At the Crimea deposit, hole 2 cut 1.6 metres carrying 137.58 grams gold and 64.89 grams silver from 86 metres, and hole 4 hit 1.2 metres grading 24.82 grams gold and 17.66 grams silver from 95 metres. At the Mojon deposit, hole 1 cut 10 metres carrying 33.6 grams gold and 288.27 grams silver from 98 metres and hole 2 returned 5.7 metres grading 5.59 grams gold and 35.26 grams silver from 117 metres.

B2Gold plans to spend $3.1 million on exploration at La Libertad in 2010 to complete 12,000 metres of diamond drilling. So far B2Gold has completed 4,700 metres with two drill rigs on site.

The company is also actively exploring its 95%-owned El Limon gold mine, with another $3.8 million budgeted for 14,800 metres of drilling. Results from a drill program on the Santa Pancha vein system that ended in early 2010 include 9.9 metres grading 7.45 grams gold, 11.55 metres averaging 12.62 grams gold and 20.8 metres carrying 9.45 grams gold.

El Limon, about a 5-hours drive northwest from La Libertad, has a projected life of 3.5 years. After some difficulties with striking workers last year, B2G has run the mine at its 1,000 tonne per-day capacity for the first quarter without interruption, producing 10,257 oz. gold at a cash cost of $611 per oz.

B2Gold’s share price was up 24¢ or 15.9% on news of the drill results to close at $1.75, a new 52-week high. The company has 309 million shares outstanding.