EX-99.1 2 exhibit99-1.htm EXHIBIT 99.1

B2Gold Corp. - Exhibit 99.1 - Filed by newsfilecorp.com

B2GOLD CORP.
Condensed Interim Consolidated Financial Statements
For the three months ended March 31, 2017
(Unaudited)

B2GOLD CORP.

CONDENSED INTERIM CONSOLIDATED STATEMENTS OF OPERATIONS

FOR THE THREE MONTHS ENDED MARCH 31

(Expressed in thousands of United States dollars, except shares and per share amounts)

(Unaudited)

		2017			2016
Gold revenue	$	146,256		$	144,252
Cost of sales
Production costs		(67,047	)		(61,644	)
Depreciation and depletion		(36,381	)		(34,313	)
Royalties and production taxes		(5,762	)		(5,856	)
Total cost of sales		(109,190	)		(101,813	)
Gross profit		37,066			42,439
General and administrative		(7,381	)		(7,488	)
Share-based payments (Note 9)		(1,601	)		(5,385	)
Write-down of mineral property interests		(1,439	)		-
Provision for non-recoverable input taxes		(578	)		(242	)
Foreign exchange gains		319			362
Other		(959	)		(1,535	)
Operating income		25,427			28,151
Unrealized loss on fair value of convertible notes (Note 8)		(14,456	)		(5,959	)
Community relations		(1,580	)		(887	)
Interest and financing expense		(2,133	)		(3,026	)
Realized losses on derivative instruments		(448	)		(5,495	)
Unrealized losses on derivative instruments		(5,337	)		(9,450	)
Write-down of long-term investments (Note 5)		(883	)		-
Other		(189	)		(911	)
Income before taxes		401			2,423
Current income tax, withholding and other taxes expense (Note 14)		(4,760	)		(4,345	)
Deferred income tax (expense) recovery (Note 14)		(198	)		8,573
Net (loss) income for the period	$	(4,557	)	$	6,651
Attributable to:
Shareholders of the Company	$	(5,499	)	$	8,317
Non-controlling interests		942			(1,666	)
Net (loss) income for the period	$	(4,557	)	$	6,651
Earnings (loss) per share (attributable to shareholders of the Company) (Note 9)
Basic	$	(0.01	)	$	0.01
Diluted	$	(0.01	)	$	0.01
Weighted average number of common shares outstanding (in thousands) (Note 9)
Basic		970,440			927,139
Diluted		970,440			930,800

See accompanying notes to condensed interim consolidated financial statements.

B2GOLD CORP.

CONDENSED INTERIM CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

FOR THE THREE MONTHS ENDED MARCH 31

(Expressed in thousands of United States dollars)

(Unaudited)

		2017			2016
Net (loss) income for the period	$	(4,557	)	$	6,651
Other comprehensive income
Items that may be reclassified subsequently to net income:              - Unrealized gain on investments, net of deferred tax expense (Note 5)		3,181			4,364
Other comprehensive income for the period		3,181			4,364
Total comprehensive (loss) income for the period	$	(1,376	)	$	11,015
Total other comprehensive income attributable to:
Shareholders of the Company	$	3,181		$	4,364
Non-controlling interests		-			-
	$	3,181		$	4,364
Total comprehensive (loss) income attributable to:
Shareholders of the Company	$	(2,318	)	$	12,681
Non-controlling interests		942			(1,666	)
	$	(1,376	)	$	11,015

See accompanying notes to condensed interim consolidated financial statements.

B2GOLD CORP.

CONDENSED INTERIM CONSOLIDATED STATEMENTS OF CASH FLOWS

FOR THE THREE MONTHS ENDED MARCH 31

(Expressed in thousands of United States dollars)

(Unaudited)

		2017			2016
Operating activities
Net (loss) income for the period	$	(4,557	)	$	6,651
Mine restoration provisions settled		-			(32	)
Non-cash charges (Note 15)		47,376			48,595
Changes in non-cash working capital (Note 15)		(16,961	)		(6,059	)
Proceeds from prepaid sales (Note 10)		15,000			120,000
Changes in long-term value added tax receivables		(1,259	)		2,398
Cash provided by operating activities		39,599			171,553
Financing activities
Revolving credit facility, drawdowns (Note 8)		-			50,000
Repayment of revolving credit facility (Note 8)		-			(100,000	)
Fekola equipment loan facility, drawdowns net of transaction costs (Note 8)		26,126			-
Otjikoto equipment loan facility, drawdowns net of transaction costs (Note 8)		-			1,236
Repayment of Otjikoto equipment loan facility (Note 8)		(2,269	)		(1,780	)
Interest and commitment fees paid		(2,503	)		(3,082	)
Repayment of Nicaraguan equipment loans		(307	)		(505	)
Common shares issued for cash on exercise of stock options(Note 9)		17,968			18
Restricted cash movement		(4,286	)		(50	)
Cash provided (used) by financing activities		34,729			(54,163	)
Investing activities
Expenditures on mining interests:
Otjikoto Mine, development and sustaining capital		(12,552	)		(18,708	)
Masbate Mine, development and sustaining capital		(14,954	)		(8,514	)
Libertad Mine, development and sustaining capital		(3,592	)		(8,780	)
Limon Mine, development and sustaining capital		(3,331	)		(1,380	)
Fekola Project, development		(67,810	)		(46,441	)
Gramalote Project, prefeasibility and exploration		(2,585	)		(63	)
Other exploration and development (Note 15)		(11,013	)		(5,033	)
Purchase of non-controlling interest		-			(6,000	)
Other		(26	)		754
Cash used by investing activities		(115,863	)		(94,165	)
Increase (decrease) in cash and cash equivalents		(41,535	)		23,225
Effect of exchange rate changes on cash and cash equivalents		95			701
Cash and cash equivalents, beginning of period		144,671			85,143
Cash and cash equivalents, end of period	$	103,231		$	109,069
Supplementary cash flow information (Note 15)

See accompanying notes to condensed interim consolidated financial statements.

B2GOLD CORP.

CONDENSED INTERIM CONSOLIDATED BALANCE SHEETS

(Expressed in thousands of United States dollars)

(Unaudited)

		As at			As at
		March 31,			December 31,
		2017			2016
Assets
Current
Cash and cash equivalents	$	103,231		$	144,671
Accounts receivable, prepaids and other		11,828			10,723
Value-added and other tax receivables		17,228			16,984
Inventories (Note 4)		115,240			104,691
		247,527			277,069
Long-term investments (Note 5)		12,801			10,028
Value-added tax receivables		18,707			18,024
Mining interests (Note 6 and Note 18 - Schedules)
- Owned by subsidiaries		2,035,709			1,950,356
- Investments in joint ventures		55,564			53,724
Other assets (Note 7)		28,945			26,934
	$	2,399,253		$	2,336,135
Liabilities
Current
Accounts payable and accrued liabilities	$	86,541		$	81,722
Current taxes payable		6,913			13,180
Current portion of long-term debt (Note 8)		20,325			13,935
Current portion of derivative instruments at fair value (Note 12)		6,073			3,466
Current portion of prepaid sales (Note 10)		60,000			57,450
Other		5,582			6,288
		185,434			176,041
Derivative instruments at fair value (Note 12)		6,787			6,439
Long-term debt (Note 8)		506,566			472,845
Prepaid sales (Note 10)		60,000			62,550
Mine restoration provisions		81,632			81,162
Deferred income taxes		74,745			74,072
Employee benefits obligation		8,396			7,860
Other long-term liabilities		2,525			602
		926,085			881,571
Equity
Shareholders’ equity
Share capital (Note 9)
Issued: 973,446,385 common shares (Dec 31, 2016 – 964,892,433)		2,180,388			2,151,993
Contributed surplus		47,776			56,191
Accumulated other comprehensive loss		(92,254	)		(95,435	)
Deficit		(673,259	)		(667,760	)
		1,462,651			1,444,989
Non-controlling interests		10,517			9,575
		1,473,168			1,454,564
	$	2,399,253		$	2,336,135
Commitments (Note 17)

Approved by the Board “Clive T. Johnson” Director “Robert J. Gayton” Director

See accompanying notes to condensed interim consolidated financial statements.

B2GOLD CORP.

CONDENSED INTERIM CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY

FOR THE THREE MONTHS ENDED IN MARCH 31

(Expressed in thousands of United States dollars)

(Unaudited)

					2017
		Shares (‘000’s)			Share capital			Contributed surplus			Accumulated other comprehensive loss			Deficit			Non- controlling interests			Total equity
Balance at December 31, 2016		964,892		$	2,151,993		$	56,191		$	(95,435	)	$	(667,760	)	$	9,575		$	1,454,564
Net (loss) income for the period		-			-			-			-			(5,499	)		942			(4,557	)
Unrealized gain on investments,            net of deferred tax expense		-			-			-			3,181			-			-			3,181
Shares issued on exercise of           stock options (Note 9)		8,351			17,968			-			-			-			-			17,968
Shares pending issuance on exercise           of stock options		116			171			-			-			-			-			171
Shares issued on vesting of RSU		87			133			(133	)		-			-			-			-
Share based payments		-			-			1,841			-			-			-			1,841
Transfer to share capital on            exercise of stock options		-			10,123			(10,123	)		-			-			-			-
Balance at March 31, 2017		973,446		$	2,180,388		$	47,776		$	(92,254	)	$	(673,259	)	$	10,517		$	1,473,168

					2016
		Shares (‘000’s)			Share capital			Contributed surplus			Accumulated other comprehensive loss			Deficit			Non- controlling interests			Total equity
Balance at December 31, 2015		927,073		$	2,036,778		$	70,051		$	(96,254	)	$	(706,891	)	$	8,855		$	1,312,539
Net income for the period		-			-			-			-			8,317			(1,666	)		6,651
Unrealized gain on investments,            net of deferred tax expense		-			-			-			4,364			-			-			4,364
Shares issued on exercise of            stock options		29			18			-			-			-			-			18
Shares issued on vesting of RSU		1,627			2,579			(2,579	)		-			-			-			-
Share based payments		-			-			5,715			-			-			-			5,715
Transfer to share capital on            exercise of stock options		-			28			(28	)		-			-			-			-
Balance at March 31, 2016		928,729		$	2,039,403		$	73,159		$	(91,890	)	$	(698,574	)	$	7,189		$	1,329,287

See accompanying notes to condensed interim consolidated financial statements.

B2GOLD CORP.

NOTES TO THE CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS

For the three months ended March 31, 2017

(All tabular amounts are in thousands of United States dollars unless otherwise stated)

(Unaudited)

1	Nature of operations
	B2Gold Corp. (“B2Gold” or the “Company”) is a Vancouver-based gold producer with four operating mines (one in Namibia, one in the Philippines and two in Nicaragua), a mine under construction in Mali and a portfolio of other evaluation and exploration assets in Mali, Burkina Faso, Colombia, Namibia, Nicaragua and Finland.
	The Company operates the Otjikoto Mine in Namibia, the Masbate Mine in the Philippines and the Libertad Mine and the Limon Mine in Nicaragua. The Company has an effective 90% interest in the Fekola Project in Mali, which is currently under construction, an effective 81% interest in the Kiaka gold project in Burkina Faso, and a 49% joint venture interest in the Gramalote property in Colombia.
	B2Gold is a public company which is listed on the Toronto Stock Exchange under the symbol “BTO”, the NYSE MKT LLC under the symbol “BTG” and the Namibian Stock Exchange under the symbol “B2G”. B2Gold’s head office is located at Suite 3100, Three Bentall Centre, 595 Burrard Street, Vancouver, British Columbia, V7X 1J1.
2	Basis of preparation
	These condensed interim consolidated financial statements have been prepared in accordance with International Accounting Standard 34, Interim Financial Reporting. These condensed interim consolidated financial statements should be read in conjunction with the audited consolidated financial statements for the year ended December 31, 2016, which have been prepared in accordance with IFRS as issued by the IASB.
	These condensed interim consolidated financial statements follow the same accounting policies and methods of application as the most recent audited consolidated financial statements of the Company.
	These condensed consolidated interim financial statements were authorized for issue by the Board of Directors on May 2, 2017.
	Accounting standards and amendments issued but not yet adopted IFRS 15 - Revenue from contracts with customers The IASB has issued IFRS 15, Revenue from Contracts with Customers, which is effective for annual periods commencing on or after January 1, 2018. This new standard establishes a new control-based revenue recognition model which could change the timing of revenue recognition. The Company has evaluated the effect the standard will have on its spot gold sales recorded in its consolidated financial statements and expects that there will be no impact to the timing or amounts of revenue recognized in its statement of operations. The Company is still analyzing the impact, if any, this standard will have on its Prepaid Sales contracts. IFRS 9 - Financial Instruments The final version of IFRS 9, Financial Instruments, was issued in July 2014 to replace IAS 39, Financial Instruments: Recognition and Measurement. IFRS 9 has two measurement categories for financial assets: amortized cost and fair value. In addition, this new standard amends some of the requirements of IFRS 7, Financial Instruments: Disclosures, including added disclosures about investments in equity instruments measured at fair value in OCI and guidance on financial liabilities and derecognition of financial instruments. The standard is effective for annual periods beginning on or after January 1, 2018, with early adoption permitted. The Company is currently evaluating the effect the standard will have on its consolidated financial statements. From a preliminary review of the Company's financial instruments, the Company expects the accounting for its convertible senior subordinated notes will change. Under IFRS 9, the fair value change of the convertible senior subordinated notes relating to the change in the Company's credit risk will now be recorded through other comprehensive income.
3	Significant accounting judgements and estimates
	Ore reserve and resource estimates
	Ore reserves are estimates of the amount of ore that can be economically and legally extracted from the Company’s mining properties. The Company estimates its ore reserves and mineral resources based on information compiled by appropriately qualified persons relating to the geological data on the size, depth and shape of the ore body, and requires complex geological judgments to interpret the data. The estimation of recoverable reserves is based upon factors such as estimates of foreign exchange rates, commodity prices, future capital requirements, metallurgical recoveries, permitting and production costs along with geological assumptions and judgments made in estimating the size, and grade of the ore body. Changes in the reserve or resource estimates may impact the carrying value of mining interests, mine restoration provisions, recognition of deferred tax assets, depreciation and amortization charges and royalties receivable.
	Uncertain tax positions
	The Company is periodically subject to income tax audits at its operating mine locations. At March 31, 2017, the Company had a provision totalling $4.0 million outstanding (December 31, 2016 - $4.0 million) representing its best estimate of the outcome of current assessments. The provisions made to date may be subject to change and such change may be material.

B2GOLD CORP.

NOTES TO THE CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS

For the three months ended March 31, 2017

(All tabular amounts are in thousands of United States dollars unless otherwise stated)

(Unaudited)

4 Inventories

			March 31,			December 31,
			2017			2016
			$			$
	Gold and silver bullion		32,577			21,220
	In-process inventory		10,964			8,365
	Ore stock-pile inventory		13,153			15,874
	Materials and supplies		58,546			59,232
			115,240			104,691

5 Long-term investments

			March 31, 2017												December 31, 2016
			Cost $			Total Impair- ment $			AOCI $			Fair Value $			Cost $			Total Impair- ment $			AOCI $			Fair Value $
	Available-for-sale investments:
	Calibre Mining Corp.		7,844			(4,330	)		5,715			9,229			7,844			(4,330	)		2,059			5,573
	RTG Mining Inc.		13,400			(11,365	)		-			2,035			13,400			(10,977	)		-			2,423
	St. Augustine Gold & Copper Ltd.		20,193			(18,658	)		-			1,535			20,193			(18,163	)		-			2,030
	Goldstone Resources Ltd.		20			(18	)		-			2			20			(18	)		-			2
	Balance, end of period		41,457			(34,371	)		5,715			12,801			41,457			(33,488	)		2,059			10,028

B2GOLD CORP.

NOTES TO THE CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS

For the three months ended March 31, 2017

(All tabular amounts are in thousands of United States dollars unless otherwise stated)

(Unaudited)

6 Mining interests

			March 31,			December 31,
			2017			2016
			$			$
	Property, plant and equipment (depletable)
	Otjikoto Mine, Namibia
	Cost		493,909			481,378
	Accumulated depreciation and depletion		(110,321	)		(95,698	)
			383,588			385,680
	Masbate Mine, Philippines
	Cost, net of impairment		534,541			517,457
	Accumulated depreciation and depletion		(173,675	)		(165,224	)
			360,866			352,233
	Libertad Mine, Nicaragua
	Cost, net of impairment		305,476			300,816
	Accumulated depreciation and depletion		(240,054	)		(226,488	)
			65,422			74,328
	Limon Mine, Nicaragua
	Cost, net of impairment		155,342			151,186
	Accumulated depreciation and depletion		(112,390	)		(107,255	)
			42,952			43,931
	Masbate undeveloped mineral interests, net of impairment (non-depletable)		60,880			60,880
	Mine under construction (non-depletable)
	Fekola, Mali		991,815			908,855
	Exploration and evaluation properties (non-depletable)
	Kiaka, Burkina Faso		65,949			64,907
	Mocoa, Colombia		29,013			29,004
	Fekola Regional, Mali		11,169			9,326
	Toega, Burkina Faso		5,946			4,819
	Other		17,643			15,906
			129,720			123,962
	Corporate & other
	Office, furniture and equipment, net		466			487
			2,035,709			1,950,356
	Investments in joint ventures (accounted for using the equity method)
	Gramalote, Colombia, net of impairment		55,564			53,724
			2,091,273			2,004,080

B2GOLD CORP.

NOTES TO THE CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS

For the three months ended March 31, 2017

(All tabular amounts are in thousands of United States dollars unless otherwise stated)

(Unaudited)

	Masbate
	In September 2016 the Philippine Department of Environment and Natural Resources (the “DENR”) announced the preliminary results of mining audits carried out by the DENR in respect of all metallic mines in the Philippines and subsequently issued the Masbate Mine audit report which contains the detailed findings from the audit and directed the Company to provide explanations and comments in response to the audit findings as described in our previous disclosures. The Company provided a comprehensive response to the findings and recommendations in the audit, which the Company believes addresses the issues raised. As reported by the Company on February 2, 2017, the DENR has announced further results of its mining audit and the Masbate Mine was not among the mines announced to be suspended or closed. To date the Company has not received any updated formal written response from the DENR confirming the results of the audit in respect of Masbate and as such, the final outcome of the audit is not certain.
	Fekola
	Fekola non-controlling interest
	In 2016, pursuant to applicable mining law, the Company formed a new 100% owned subsidiary company Fekola SA, which now holds the Company’s interest in the Fekola Project. The Government of Mali has the right to a 10% free carried interest in Fekola SA and also has the option to purchase an additional 10% participating interest in the exploitation company which it has indicated it intends to exercise. Upon the completion of the valuation of the additional 10% and the signing of a shareholders agreement, 80% of Fekola SA is expected to be owned by the Company and 20% by the Government of Mali.
7	Other assets

			March 31,			December 31,
			2017			2016
			$			$
	Loan receivable, including accrued interest		7,457			7,181
	Debt service reserve accounts		8,649			5,235
	Reclamation deposits		2,225			2,177
	Derivative instruments at fair value (Note 12)		685			1,585
	Low-grade stockpile		7,239			6,909
	Other		2,690			3,847
			28,945			26,934

B2GOLD CORP.

NOTES TO THE CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS

For the three months ended March 31, 2017

(All tabular amounts are in thousands of United States dollars unless otherwise stated)

(Unaudited)

8 Long-term debt

			March 31,			December 31,
			2017			2016
			$			$
	Convertible senior subordinated notes:
	-       Principal amount		258,750			258,750
	-       Fair value adjustment		21,670			4,043
			280,420			262,793
	Revolving corporate credit facility:
	-       Principal amount		200,000			200,000
	-       Less: unamortized transaction costs		(2,546	)		(3,047	)
			197,454			196,953
	Equipment loans/finance lease obligations:
	-       Otjikoto equipment loan facility (net of unamortized transaction costs)		21,942			24,134
	-       Fekola equipment loan facility (net of unamortized transaction costs)		24,482			-
	-       Nicaraguan equipment loans		2,593			2,900
			49,017			27,034
			526,891			486,780
	Less: current portion		(20,325	)		(13,935	)
			506,566			472,845

Convertible senior subordinated notes

As at March 31, 2017 the fair value of the convertible senior subordinated notes (“convertible notes”) was $280.4 million. The loss on fair value of convertible notes recorded in the statement of operations for the three months ended March 31, 2017 was $14.5 million (2016 – $6.0 million). The change in fair value of the notes recognized in the statement of operations for the three months ended March 31, 2017 is stated after adjusting for $3.2 million (2016 - $1.1 million) of interest expense which was attributable to eligible expenditures on the Fekola property and has been capitalized to the carrying amount of the property.

Revolving credit facility

On March 14, 2017, the Company received a binding letter of commitment from the Canadian Imperial Bank of Commerce to participate in the Company’s revolving credit facility (“RCF”) Bank Lending Syndicate. Upon completion of the loan documentation, the aggregate amount of the RCF will be increased from $350 million to $425 million.

As at March 31, 2017, Company had drawn down $200 million under the $350 million RCF, leaving an undrawn and available balance under the facility of $150 million.

For quarter ended March 31, 2017, the interest and financing expense relating to the RCF recognized in the statement of operations was reduced by $1.6 million (2016 - $0.7 million), which was attributable to eligible expenditures on the Fekola property and capitalized to the carrying amount of the property.

The Company has provided security on the RCF in the form of a general security interest over the Company’s assets and pledges creating a charge over the shares of certain of the Company’s direct and indirect subsidiaries. In connection with the RCF, the Company must also maintain certain net tangible worth and ratios for leverage and interest coverage. As at March 31, 2017, the Company was in compliance with these debt covenants.

B2GOLD CORP.

NOTES TO THE CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS

For the three months ended March 31, 2017

(All tabular amounts are in thousands of United States dollars unless otherwise stated)

(Unaudited)

	Fekola equipment loan facility
	During the three months ended March 31, 2017, the Company made an initial drawdown of Euro 24.7 million ($26.1 million equivalent) under the facility. As at March 31, 2017, Euro 46.7 million ($50 million equivalent) was available for future drawdowns.  Subsequent to March 31, 2017, the Company drew down a further Euro 10.3 million ($11.3 milion equivalent).
	The Company is required to maintain a deposit in a debt service reserve account (“DSRA”) equal at all times to the total of the principal, interest and other payments that become payable over the next six month period. At March 31, 2017, the balance in the DSRA was Euro 3.2 million ($3.4 million equivalent, Note 7).
9	Share capital
	The Company’s authorized share capital consists of an unlimited number of common shares and an unlimited number of preferred shares. As at March 31, 2017, the Company had 973,446,385 common shares outstanding, including 1,705,000 common shares being held in trust under the Company’s Incentive Plan. No preferred shares were outstanding.
	During the three months ended March 31, 2017, the Company granted 0.4 million stock options to employees and directors. These options have a weighted average exercise price of C$3.82, have a term of five years and vest over a period of up to three years. The fair value was calculated using the Black-Scholes option pricing model based on a risk-free annual interest rate of 0.87%, an expected life of 3.2 years, an expected volatility of 62%, and a dividend yield rate of nil. The total number of stock options outstanding at March 31, 2017 was 41.5 million.
	For the three months ended March 31, 2017, share-based payments expense, relating to the vesting of stock options was $1.4 million (2016 - $3.6 million), net of $0.2 million (2016 - $0.3 million) capitalized to mining interests.
	For the three months ended March 31, 2017, the Company issued 8.4 million shares for proceeds of $18.0 million from the exercise of stock options. Subsequent to March 31, 2017, the Company issued a futher 1.8 million shares for proceeds of $2.5 million on the exercise of stock options.
	During the three months ended March 31, 2017, no RSUs were granted. The total number of RSUs outstanding at March 31, 2017 was 1.1 million.
	For the three months ended March 31, 2017, share-based payments expense, relating to the vesting of RSUs, was $0.4 million (2016 - $2.1 million).
	Subsequent to March 31, 2017, the Company issued 0.9 million shares on the conversion of RSUs and 1.6 million RSU’s were granted to employees of the Company.
	Earnings per share
	The following is the calculation of diluted net income for the period:

			For the three			For the three
			months ended			months ended
			March 31, 2017			March 31, 2016
			$			$
	Net (loss) income for the period attributable to shareholders of the Company		(5,499	)		8,317
	Loss (gain) on fair value of convertible notes		-			-
	Diluted net income (loss) for the period		(5,499	)		8,317

B2GOLD CORP.

NOTES TO THE CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS

For the three months ended March 31, 2017

(All tabular amounts are in thousands of United States dollars unless otherwise stated)

(Unaudited)

The following is the calculation of diluted weighted average number of shares outstanding for the period:

			For the three			For the three
			months ended			months ended
			March 31, 2017			March 31, 2016
	Basic weighted average number of shares outstanding (in thousands)		970,440			927,139
	Effect of dilutive securities:
	-       Convertible notes		-			-
	-       Stock options		-			3,133
	-       Restricted share units		-			528
	Diluted weighted average number of shares outstanding (in thousands)		970,440			930,800

For the three months ended March 31, 2017 and the three months ended March 31, 2016, potential share issuances arising from any future conversion of the convertible notes are not included in the calculation of diluted weighed average shares outstanding as these securities are anti-dilutive.

The following is the basic and diluted earnings per share:

			For the three			For the three
			months ended			months ended
			March 31, 2017			March 31, 2016
			$			$
	Earnings per share (attributable to shareholders of the Company)
	- Basic		(0.01	)		0.01
	- Diluted		(0.01	)		0.01

10	Prepaid sales
	In March 2016, the Company entered into Prepaid Sales transactions totalling $120 million, for the delivery of 103,266 ounces, with its RCF Bank Syndicate. The Prepaid Sales, in the form of metal sales forward contracts, allow the Company to deliver pre-determined volumes of gold on agreed future delivery dates in exchange for an upfront cash pre-payment. The full amount of the proceeds was recorded as Prepaid Sales on the balance sheet at the time of the transaction. Settlement is in the form of physical deliveries of unallocated gold from any of the Company’s mines.
	During the quarter ended March 31, 2017, the Company delivered 12,908 ounces into contracts valued at $15.0 million and entered into new contracts for 12,780 ounces valued at $15.0 million. As the Company physically delivers ounces into the contracts, the portion of the Prepaid Sales relating to the delivered ounces was recognised as gold revenue in the statement of operations.
	At March 31, 2017, the Company had $120 million of outstanding contracts for the delivery of 103,138 ounces with 38,725 ounces to be delivered during 2017, 51,633 ounces during 2018 and 12,780 ounces during 2019. Subsequent to March 31, 2017, the Company entered into further Prepaid Sales contracts totalling $7.5 million for delivery of 6,263 ounces of gold for delivery between January 31, 2019 and May 20, 2019.
11	Gold commitments
	As at March 31, 2017, the following gold forward contracts with respect to the Otjikoto Mine were outstanding. These contracts were excluded from the scope of IAS 39 and accounted for as executory contracts because they were entered into and continue to be held for the purpose of delivery in accordance with the Company’s expected production schedule. No fair value gains and losses on these commodity contracts are recorded in the financial statements.

			2017			2018			Total
	Gold forward contracts:
	- Ounces		6,750			7,500			14,250
	- Average price per ounce (rand)		16,020			16,020			16,020

B2GOLD CORP.

NOTES TO THE CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS

For the three months ended March 31, 2017

(All tabular amounts are in thousands of United States dollars unless otherwise stated)

(Unaudited)

12	Derivative financial instruments
	Gold forwards
	As at March 31, 2017, the following gold forward contracts which are recorded at fair value through the statement of operations with respect to the Otjikoto Mine were outstanding (by maturity dates):

			2017			2018			Total
	Gold forward contracts:
	- Ounces		26,937			35,916			62,853
	- Average price per ounce (rand)		15,044			15,044			15,044

The unrealized fair value of these contracts at March 31, 2017 was $(12.5) million.

Forward contracts – fuel oil, gas oil, diesel

During the three months ended March 31, 2017, the Company entered into additional series of forward contracts for the purchase of 11,692,000 litres of fuel oil, 6,917,000 litres of gas oil and 307,000 litres of diesel with settlements scheduled between February 2018 and April 2019. These derivative instruments were not designated as hedges by the Company and are being recorded at their fair value at the end of each reporting period with changes in fair value recorded in the statement of operations.

The following is a summary, by maturity dates, of the Company’s forward contracts outstanding as at March 31, 2017:

			2017			2018			2019			Total
	Forward – fuel oil:
	Litres (thousands)		19,511			29,815			7,553			56,879
	Average strike price	$	0.29		$	0.30		$	0.31		$	0.30
	Forward – gas oil:
	Litres (thousands)		11,049			12,910			4,243			28,202
	Average strike price	$	0.40		$	0.41		$	0.43		$	0.41
	Forward – diesel:
	Litres (thousand)		6,117			3,910			674			10,701
	Average strike price	$	0.40		$	0.41		$	0.45		$	0.41

The unrealized fair value of these contracts at March 31, 2017 was $(0.1) million.

Interest rate swaps

During the year ended December 31, 2016, the Company entered into a series of interest swaps with a notional amount of $100 million with settlements scheduled between September 2016 and May 2019. Under these contracts, the Company receives a floating rate equal to the 3 month United States dollar LIBOR rate and pays a fixed rate of 1.04% . These derivative instruments were not designated as hedges by the Company and are being recorded at their fair value at the end of each reporting period with changes in fair value recorded in the statement of operations. The unrealized fair value of these contracts at March 31, 2017 was $1.2 million.

B2GOLD CORP.

NOTES TO THE CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS

For the three months ended March 31, 2017

(All tabular amounts are in thousands of United States dollars unless otherwise stated)

(Unaudited)

13	Financial instruments
	As at March 31, 2017, the Company’s financial assets and liabilities that are measured and recognized at fair value on a recurring basis are categorized as follows:

			As at March 31, 2017						As at December 31, 2016
			Level 1			Level 2			Level 1			Level 2
			$			$			$			$
	Long-term investments (Note 5)		12,801			-			10,028			-
	Convertible senior subordinated notes (Note 8)		-			(280,420	)		-			(262,793	)
	Gold forward contracts (Note 12)		-			(12,519	)		-			(10,017	)
	Fuel derivative contracts (Note 12)		-			(69	)		-			2,760
	Interest rate swaps (Note 12)					1,233			-			1,122
	Gold collar contracts		-			(6	)		-			112

	The fair value of the Company’s long-term investments and convertible senior subordinated notes were determined using market quotes from an active market for each investment.
	The fair value of the fuel derivative contracts and gold derivative contracts was determined using prevailing market rates for instruments with similar characteristics.
14	Income and other taxes
	Income tax expense differs from the amount that would result from applying the Canadian federal and provincial income tax rates to earnings from operations before taxes. These differences result from the following items:

			For the three			For the three
			months ended			months ended
			March 31, 2017			March 31, 2016
			$			$
	Consolidated income before income taxes		401			2,423
	Canadian federal and provincial income tax rates		26.00%			26.00%
	Income tax expense at statutory rates		104			630
	Increase (decrease) attributable to:
	Effects of different foreign statutory tax rates and tax holidays		(7,397	)		(9,249	)
	Non-deductible expenditures		2,934			2,091
	Losses for which no tax benefit has been recorded		4,812			1,272
	Withholding tax and minimum tax		3,026			1,992
	Change due to foreign exchange		(1,093	)		(1,611	)
	Changes in estimates of deferred tax assets		540			-
	Non-deductible portion of losses		2,032			647
	Income tax expense (recovery)		4,958			(4,228	)
	Current income tax, withholding and other taxes expense		4,760			4,345
	Deferred income tax expense (recovery)		198			(8,573	)
	Income tax recovery		4,958			(4,228	)

B2GOLD CORP.

NOTES TO THE CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS

For the three months ended March 31, 2017

(All tabular amounts are in thousands of United States dollars unless otherwise stated)

(Unaudited)

15	Supplementary cash flow information
	Supplementary disclosure of cash flow information is provided in the table below:
	Non-cash (credits) charges:

			For the three			For the three
			months ended			months ended
			March 31, 2017			March 31, 2016
			$			$
	Depreciation and depletion		36,381			34,313
	Unrealized loss on fair value of convertible notes (Note 8)		14,456			5,959
	Delivery into prepaid sales (Note 10)		(15,000	)		-
	Unrealized losses on derivative instruments		5,337			9,450
	Share-based payments		1,601			5,385
	Write-down of mineral property interests		1,439			-
	Write-down of long-term investments		883			-
	Accretion of mine restoration provisions		470			346
	Deferred income tax expense (recovery)		198			(8,573	)
	Other		1,611			1,715
			47,376			48,595

	Changes in non-cash working capital:
			For the three			For the three
			months ended			months ended
			March 31, 2017			March 31, 2016
			$			$
	Accounts receivable and prepaids		(2,417	)		1,377
	Value-added and other tax receivables		(245	)		(1,637	)
	Inventories		(7,547	)		(5,217	)
	Accounts payable and accrued liabilities		(485	)		28
	Income and other taxes payables		(6,267	)		(610	)
			(16,961	)		(6,059	)

	Other exploration and development:
			For the three			For the three
			months ended			months ended
			March 31, 2017			March 31, 2016
			$			$
	Masbate Mine, exploration		(1,392	)		(466	)
	Libertad Mine, exploration		(1,281	)		(726	)
	Limon Mine, exploration		(823	)		(508	)
	Otjikoto Mine, exploration		(331	)		(291	)
	Fekola Project, exploration		(1,447	)		(924	)
	Kiaka Project, exploration		(1,025	)		(466	)
	Fekola Regional, exploration		(1,843	)		(501	)
	Toega Project, exploration		(1,127	)		(150	)
	Other		(1,744	)		(1,001	)
			(11,013	)		(5,033	)

B2GOLD CORP.

NOTES TO THE CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS

For the three months ended March 31, 2017

(All tabular amounts are in thousands of United States dollars unless otherwise stated)

(Unaudited)

	Non-cash investing and financing activities:
			For the three			For the three
			months ended			months ended
			Mar017			March 31, 2016
			$			$
	Share-based payments, capitalized to resource property interests		241			329
	Interest expense, capitalized to resource property interests		4,771			1,844
	Change in accounts payable and accrued liabilities relating to resource property expenditures		(5,388	)		(4,737	)

	A subsidiary of the Company, Kronk Resources Inc, has $1.2 million in cash and cash equivalents that is restricted for its own activities and not available for use by B2Gold.
16	Segmented Information
	The Company’s reportable operating segments include its mining operations and development projects, namely the Otjikoto, Masbate, Libertad and Limon mines, and the Fekola, Gramalote and Kiaka projects. The “Other Mineral Properties” segment consists of the Company’s interests in mineral properties which are at various stages of exploration. The “Corporate and Other” segment includes corporate operations.
	The Company’s segments are summarized in the following tables.

			For the three months ended March 31, 2017
																								Other
			Otjikoto			Masbate			Libertad			Limon			Fekola			Gramalote			Kiaka			Mineral			Corporate
			Project			Mine			Mine			Mine			Project			Project			Project			Properties			& Other			Total
			$			$			$			$			$			$			$			$			$			$
	External gold revenue		47,677			59,979			22,246			1,354			-			-			-			-			15,000			146,256
	Intersegment gold revenue		-			-			8,825			7,051			-			-			-			-			(15,876	)		-
	Production costs		15,241			24,979			19,879			6,948			-			-			-			-			-			67,047
	Depreciation & depletion		13,230			8,380			10,462			4,309			-			-			-			-			46			36,427
	Net income (loss)		6,089			19,856			(3,868	)		(5,192	)		463			-			235			55			(22,195	)		(4,557	)
	Capital expenditures		12,883			16,346			4,873			4,154			69,257			2,585			1,025			4,714			26			115,863
	Total assets		471,836			493,460			107,874			64,914			1,013,350			55,564			66,323			65,054			60,878			2,399,253

B2GOLD CORP.

NOTES TO THE CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS

For the three months ended March 31, 2017

(All tabular amounts are in thousands of United States dollars unless otherwise stated)

(Unaudited)

			For the three months ended March 31, 2016
																								Other
			Otjikoto			Masbate			Libertad			Limon			Fekola			Gramalote			Kiaka			Mineral			Corporate
			Project			Mine			Mine			Mine			Project			Project			Project			Properties			& Other			Total
			$			$			$			$			$			$			$			$			$			$
	Gold revenue		45,179			53,101			33,193			12,779			-			-			-			-			-			144,252
	Production costs		14,376			21,245			17,139			8,884			-			-			-			-			-			61,644
	Depreciation & depletion		12,526			8,485			9,536			3,766			-			-			-			-			50			34,363
	Net (loss) income		13,443			18,472			2,261			(1,008	)		1,585			-			552			85			(28,739	)		6,651
	Capital expenditures		18,999			8,980			9,506			1,887			47,365			63			466			1,653			(280	)		88,639
	Total assets		452,362			524,403			140,484			74,279			677,594			42,694			62,431			61,353			74,759			2,110,359

The Company’s mining interests are located in the following geographical locations:

			March 31,			December 31,
			2017			2016
			$			$
	Mining interests
	Mali		1,008,021			923,122
	Philippines		421,746			413,113
	Namibia		386,711			387,874
	Nicaragua		112,318			122,095
	Colombia		84,577			82,728
	Burkina Faso		74,958			72,422
	Finland		1,838			1,642
	Canada		466			487
	Other		638			597
			2,091,273			2,004,080

17	Commitments
	As at March 31, 2017, the Company had the following commitments (in addition to those disclosed elsewhere in these financial statements):

	•	For payments of $18.3 million for Fekola Project equipment and development costs, all of which is expected to be incurred in 2017.
	•	For payments of $19.9 million for mobile equipment at the Masbate Mine, $15.4 million of which is expected to be incurred in 2017 and $4.5 million of which is expected to be incurred in 2018.
	•	For payments of $8.4 million for mobile equipment at the Otjikoto Mine, all of which is expected to be incurred in 2017.
	•	For payments of $1.5 million for a tailings storage facility lift at the Libertad Mine, all of which is expected to be incurred in 2017.

B2GOLD CORP.

NOTES TO THE CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS

For the three months ended March 31, 2017

(All tabular amounts are in thousands of United States dollars unless otherwise stated)

(Unaudited)

		Cost																		Accumulated depreciation												Net carrying value
		Balance at Dec. 31, 2016			Additions			Disposals / write-offs			Reclass			Cumulative translation adjustment			Balance at Mar. 31, 2017			Balance at Dec. 31, 2016			Depreciation			Disposals / write-offs			Balance at Mar. 31, 2017			As at Mar. 31, 2017			As at Dec. 31, 2016
		$			$			$			$			$			$			$			$			$			$			$			$
Property, plant and equipment (depletable)
Otjikoto		481,378			11,511			(1,444	)		2,464			-			493,909			(95,698	)		(14,623	)		-			(110,321	)		383,588			385,680
Masbate		517,457			17,084			-			-						534,541			(165,224	)		(8,451	)		-			(173,675	)		360,866			352,233
Libertad		300,816			4,876			(216	)		-			-			305,476			(226,488	)		(13,622	)		56			(240,054	)		65,422			74,328
Limon		151,186			4,156			-			-			-			155,342			(107,255	)		(5,135	)		-			(112,390	)		42,952			43,931
		1,450,837			37,627			(1,660	)		2,464			-			1,489,268			(594,665	)		(41,831	)		56			(636,440	)		852,828			856,172
Undeveloped mineral interests
Masbate		60,880			-			-			-			-			60,880			-			-			-			-			60,880			60,880
Mine under construction
Fekola		908,855			82,960			-			-			-			991,815			-			-			-			-			991,815			908,855
Exploration & evaluation properties (non-depletable)
Kiaka		64,907			1,042			-			-			-			65,949			-			-			-			-			65,949			64,907
Mocoa		29,004			9			-			-			-			29,013			-			-			-			-			29,013			29,004
Fekola Regional		9,326			1,843			-			-			-			11,169			-			-			-			-			11,169			9,326
Toega		4,819			1,127			-			-			-			5,946			-			-			-			-			5,946			4,819
Other		15,906			1,737			-			-			-			17,643			-			-			-			-			17,643			15,906
		123,962			5,758			-			-			-			129,720			-			-			-			-			129,720			123,962
Corporate
Office, furniture & equipment		1,827			25			-			-			-			1,852			(1,340	)		(46	)		-			(1,386	)		466			487
		2,546,361			126,370			(1,660	)		2,464			-			2,673,535			(596,005	)		(41,877	)		56			(637,826	)		2,035,709			1,950,356
Investments in joint ventures (accounted for using the equity method)
Gramalote		53,724			1,840			-			-			-			55,564			-			-			-			-			55,564			53,724
		2,600,085			128,210			(1,660	)		2,464			-			2,729,099			(596,005	)		(41,877	)		56			(637,826	)		2,091,273			2,004,080

B2GOLD CORP.

NOTES TO THE CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS

For the three months ended March 31, 2017

(All tabular amounts are in thousands of United States dollars unless otherwise stated)

(Unaudited)

		Cost																		Accumulated depreciation												Net carrying value
		Balance at Dec. 31, 2015			Additions			Disposals / write-offs			Reclass			Cumulative translation adjustment			Balance at Dec. 31, 2016			Balance at Dec. 31, 2015			Depreciation			Disposals / write-offs			Balance at Dec. 31, 2016			As at Dec. 31, 2016			As at Dec. 31, 2015
		$			$			$			$			$			$			$			$			$			$			$			$
Property, plant and equipment (depletable)
Otjikoto		437,591			45,880			(882	)		(1,211	)		-			481,378			(41,810	)		(54,270	)		382			(95,698	)		385,680			395,781
Masbate		472,021			35,128			(1,494	)		11,802						517,457			(125,574	)		(40,519	)		869			(165,224	)		352,233			346,447
Libertad		272,295			29,020			(499	)		-			-			300,816			(169,721	)		(57,001	)		234			(226,488	)		74,328			102,574
Limon		140,791			10,480			(85	)		-			-			151,186			(87,197	)		(20,101	)		43			(107,255	)		43,931			53,594
		1,322,698			120,508			(2,960	)		10,591			-			1,450,837			(424,302	)		(171,891	)		1,528			(594,665	)		856,172			898,396
Undeveloped mineral interests
Masbate		72,682			-			-			(11,802	)		-			60,880			-			-			-			-			60,880			72,682
Mine under construction
Fekola		631,524			276,776			-			555			-			908,855			-			-			-			-			908,855			631,524
Exploration & evaluation properties (non-depletable)
Kiaka		61,527			3,380			-			-			-			64,907			-			-			-			-			64,907			61,527
Mocoa		28,717			287			-			-			-			29,004			-			-			-			-			29,004			28,717
Calibre		11,252			514			(11,766	)		-			-			-			-			-			-			-			-			11,252
Fekola Regional		4,212			5,114			-			-			-			9,326			-			-			-			-			9,326			4,212
Toega		1,812			3,007			-			-			-			4,819			-			-			-			-			4,819			1,812
Other		12,316			7,455			(3,865	)		-			-			15,906			-			-			-			-			15,906			12,316
		119,836			19,757			(15,631	)		-			-			123,962			-			-			-			-			123,962			119,836
Corporate
Office, furniture & equipment		2,062			(235	)		-			-			-			1,827			(1,134	)		(206	)		-			(1,340	)		487			928
		2,148,802			416,806			(18,591	)		(656	)		-			2,546,361			(425,436	)		(172,097	)		1,528			(596,005	)		1,950,356			1,723,366
Investments in joint ventures (accounted for using the equity method)
Gramalote		41,193			12,531			-			-			-			53,724			-			-			-			-			53,724			41,193
Quebradona		1,201			-			(1,201	)		-			-			-			-			-			-			-			-			1,201
		42,394			12,531			(1,201	)		-			-			53,724			-			-			-			-			53,724			42,394
		2,191,196			429,337			(19,792	)		(656	)		-			2,600,085			(425,436	)		(172,097	)		1,528			(596,005	)		2,004,080			1,765,760