EX-99.1 2 exhibit991-63017.htm EXHIBIT 99.1 BTG 63017 6-K Exhibit







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B2GOLD CORP.
Condensed Interim Consolidated Financial Statements
For the three and six months ended June 30, 2017
(Unaudited)



B2GOLD CORP.
CONDENSED INTERIM CONSOLIDATED STATEMENTS OF OPERATIONS
FOR THE THREE AND SIX MONTHS ENDED JUNE 30
(Expressed in thousands of United States dollars, except per share amounts)
(Unaudited)
 

 
 
For the three months ended
June 30, 2017

 
For the three months ended
June 30, 2016

 
For the six months ended
June 30, 2017

 
For the six months ended
June 30, 2016

 
 
 
 
 
 
 
 
 
Gold revenue
 
$
164,322

 
$
164,803

 
$
310,578

 
$
309,055

 
 
 
 
 
 
 
 
 
Cost of sales
 
 

 
 

 
 

 
 

   Production costs
 
(80,798
)
 
(66,146
)
 
(147,845
)
 
(127,790
)
   Depreciation and depletion
 
(45,014
)
 
(38,938
)
 
(81,395
)
 
(73,251
)
   Royalties and production taxes
 
(5,653
)
 
(5,565
)
 
(11,415
)
 
(11,421
)
Total cost of sales
 
(131,465
)
 
(110,649
)
 
(240,655
)
 
(212,462
)
 
 
 
 
 
 
 
 
 
Gross profit
 
32,857

 
54,154

 
69,923

 
96,593

 
 
 
 
 
 
 
 
 
General and administrative
 
(9,363
)
 
(8,174
)
 
(16,744
)
 
(15,662
)
Share-based payments (Note 9)
 
(7,713
)
 
(2,087
)
 
(9,314
)
 
(7,472
)
Gain on sale of Lynn Lake royalty (Note 6)
 
6,593

 
—

 
6,593

 
—

Write-down of mineral property interests
 
—

 
(3,867
)
 
(1,439
)
 
(3,867
)
Provision for non-recoverable input taxes
 
(970
)
 
(787
)
 
(1,548
)
 
(1,029
)
Foreign exchange losses
 
(1,727
)
 
(2,147
)
 
(1,408
)
 
(1,785
)
Other
 
(325
)
 
(2,049
)
 
(1,284
)
 
(3,584
)
Operating income
 
19,352

 
35,043

 
44,779

 
63,194

 
 
 
 
 
 
 
 
 
Unrealized gain (loss) on fair value of convertible notes (Note 8)
 
2,478

 
(37,434
)
 
(11,978
)
 
(43,393
)
Community relations
 
(1,091
)
 
(958
)
 
(2,671
)
 
(1,845
)
Interest and financing expense
 
(3,138
)
 
(2,906
)
 
(5,271
)
 
(5,932
)
Realized losses on derivative instruments
 
(892
)
 
(3,752
)
 
(1,340
)
 
(9,247
)
Unrealized gains (losses) on derivative instruments
 
2,867

 
(650
)
 
(2,470
)
 
(10,100
)
Write-down of long-term investments (Note 5)
 
(573
)
 
(182
)
 
(1,456
)
 
(182
)
Other
 
(2
)
 
(414
)
 
(191
)
 
(1,325
)
Income (loss) before taxes
 
19,001

 
(11,253
)
 
19,402

 
(8,830
)
 
 
 
 
 
 
 
 
 
Current income tax, withholding and other taxes expense (Note 14)
 
(2,498
)
 
(3,990
)
 
(7,258
)
 
(8,335
)
Deferred income tax recovery (Note 14)
 
2,761

 
3,437

 
2,563

 
12,010

Net income (loss) for the period
 
$
19,264

 
$
(11,806
)
 
$
14,707

 
$
(5,155
)
 
 
 
 
 
 
 
 
 
Attributable to:
 
 

 
 

 
 

 
 

   Shareholders of the Company
 
$
21,029

 
$
(10,330
)
 
$
15,530

 
$
(2,013
)
   Non-controlling interests
 
(1,765
)
 
(1,476
)
 
(823
)
 
(3,142
)
Net income (loss) for the period
 
$
19,264

 
$
(11,806
)
 
$
14,707

 
$
(5,155
)
 
 
 
 
 
 
 
 
 
Earnings (loss) per share
(attributable to shareholders of the Company) (Note 9)
 
 
 
 
 
 
 
 
   Basic
 
$
0.02

 
$
(0.01
)
 
$
0.02

 
$ (0.00)

   Diluted
 
$
0.02

 
$
(0.01
)
 
$
0.02

 
$ (0.00)

 
 
 
 
 
 
 
 
 
Weighted average number of common shares outstanding
(in thousands) (Note 9)
 
 
 
 
 
 
 
 
   Basic
 
976,527

 
930,235

 
973,500

 
928,690

   Diluted
 
1,058,008

 
930,235

 
991,028

 
928,690



See accompanying notes to condensed interim consolidated financial statements.

B2GOLD CORP.
CONDENSED INTERIM CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
FOR THE THREE AND SIX MONTHS ENDED JUNE 30
(Expressed in thousands of United States dollars)
(Unaudited)
 


 
 
For the three months ended
June 30, 2017

 
For the three months ended
June 30, 2016

 
For the six months ended
June 30, 2017

 
For the six months ended
June 30, 2016

 
 
 
 
 
 
 
 
 
Net income (loss) for the period
 
$
19,264

 
$
(11,806
)
 
$
14,707

 
$
(5,155
)
 
 
 
 
 
 
 
 
 
Other comprehensive (loss) income
 
 

 
 

 
 

 
 

Items that may be reclassified subsequently to net income:
 
 
 
 
 
 
 
 
Unrealized (loss) gain on investments, net of deferred tax expense (Note 5)
 
(2,622
)
 
(872
)
 
559

 
3,492

Other comprehensive (loss) income for the period
 
(2,622
)
 
(872
)
 
559

 
3,492

Total comprehensive income (loss) for the period
 
$
16,642

 
$
(12,678
)
 
$
15,266

 
$
(1,663
)
 
 
 
 
 
 
 
 
 
Total other comprehensive (loss) income attributable to:
 
 
 
 
 
 
 
 
   Shareholders of the Company
 
$
(2,622
)
 
$
(872
)
 
$
559

 
$
3,492

   Non-controlling interests
 
—

 
—

 
—

 
—

 
 
$
(2,622
)
 
$
(872
)
 
$
559

 
$
3,492

 
 
 
 
 
 
 
 
 
Total comprehensive income (loss) attributable to:
 
 
 
 
 
 
 
 
   Shareholders of the Company
 
$
18,407

 
$
(11,202
)
 
$
16,089

 
$
1,479

   Non-controlling interests
 
(1,765
)
 
(1,476
)
 
(823
)
 
(3,142
)
 
 
$
16,642

 
$
(12,678
)
 
$
15,266

 
$
(1,663
)


See accompanying notes to condensed interim consolidated financial statements.

B2GOLD CORP.
CONDENSED INTERIM CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE THREE AND SIX MONTHS ENDED JUNE 30
(Expressed in thousands of United States dollars)
(Unaudited)
 

 
 
For the three months ended
June 30, 2017

 
For the three months ended
June 30, 2016

 
For the six months ended
June 30, 2017

 
For the six months ended
June 30, 2016

Operating activities
 
 

 
 

 
 

 
 

Net income (loss) for the period
 
$
19,264

 
$
(11,806
)
 
$
14,707

 
$
(5,155
)
Mine restoration provisions settled
 
(24
)
 
(66
)
 
(24
)
 
(98
)
Non-cash charges, net (Note 15)
 
26,625

 
84,015

 
74,001

 
132,610

Changes in non-cash working capital (Note 15)
 
(8,364
)
 
2,337

 
(25,325
)
 
(3,722
)
Proceeds from prepaid sales (Note 10)
 
15,000

 
—

 
30,000

 
120,000

Changes in long-term value added tax receivables
 
(4,478
)
 
(6,876
)
 
(5,737
)
 
(4,478
)
Cash provided by operating activities
 
48,023

 
67,604

 
87,622

 
239,157

 
 
 
 
 
 
 
 
 
Financing activities
 
 

 
 

 
 

 
 

Credit facility, drawdowns net of transaction costs (Note 8)
 
49,642

 
—

 
49,642

 
50,000

Repayment of credit facility (Note 8)
 
—

 
—

 
—

 
(100,000
)
Otjikoto equipment loan facility, drawdowns net of transaction costs (Note 8)
 
—

 
9,807

 
—

 
11,043

Repayment of Otjikoto equipment loan facility (Note 8)
 
(2,269
)
 
(2,043
)
 
(4,538
)
 
(3,823
)
Fekola equipment loan facility, drawdowns net of transaction costs (Note 8)
 
11,006

 
—

 
37,132

 
—

Repayment of Fekola equipment loan facility (Note 8)
 
(1,997
)
 
—

 
(1,997
)
 
—

Repayment of Nicaraguan equipment loans
 
(412
)
 
(427
)
 
(719
)
 
(932
)
Interest and commitment fees paid
 
(7,045
)
 
(6,718
)
 
(9,548
)
 
(9,800
)
Common shares issued for cash on exercise of stock options (Note 9)
 
5,231

 
6,777

 
23,199

 
6,795

Restricted cash movement
 
(1,813
)
 
(1,119
)
 
(6,099
)
 
(1,169
)
Cash provided (used) by financing activities
 
52,343

 
6,277

 
87,072

 
(47,886
)
 
 
 
 
 
 
 
 
 
Investing activities
 
 

 
 

 
 

 
 

Expenditures on mining interests:
 
 

 
 

 
 

 
 

Otjikoto Mine, development and sustaining capital
 
(2,655
)
 
(7,618
)
 
(15,207
)
 
(26,326
)
Masbate Mine, development and sustaining capital
 
(15,412
)
 
(8,836
)
 
(30,366
)
 
(17,350
)
Libertad Mine, development and sustaining capital
 
(8,677
)
 
(2,920
)
 
(12,269
)
 
(11,700
)
Limon Mine, development and sustaining capital
 
(3,104
)
 
(1,581
)
 
(6,435
)
 
(2,961
)
Fekola Project, development
 
(74,981
)
 
(50,998
)
 
(142,791
)
 
(97,439
)
Gramalote Project, prefeasibility and exploration
 
(2,595
)
 
(2,753
)
 
(5,180
)
 
(2,816
)
Other exploration and development (Note 15)
 
(14,660
)
 
(7,800
)
 
(25,673
)
 
(12,833
)
Cash proceeds from sale of Lynn Lake royalty, net of transaction costs (Note 6)
 
6,593

 
—

 
6,593

 
—

Purchase of non-controlling interest
 
—

 
—

 
—

 
(6,000
)
Other
 
(91
)
 
(115
)
 
(117
)
 
639

Cash used by investing activities
 
(115,582
)
 
(82,621
)
 
(231,445
)
 
(176,786
)
 
 
 
 
 
 
 
 
 
Increase (decrease) in cash and cash equivalents
 
(15,216
)
 
(8,740
)
 
(56,751
)
 
14,485

 
 
 
 
 
 
 
 
 
Effect of exchange rate changes on cash and cash equivalents
 
178

 
(527
)
 
273

 
174

Cash and cash equivalents, beginning of period
 
103,231

 
109,069

 
144,671

 
85,143

Cash and cash equivalents, end of period
 
$
88,193

 
$
99,802

 
$
88,193

 
$
99,802

 
 
 
 
 
 
 
 
 
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 June 30, 2017

 
As at December 31, 2016

Assets
 
 
 
 
Current
 
 
 
 
Cash and cash equivalents
 
$
88,193

 
$
144,671

Accounts receivable, prepaids and other
 
11,251

 
10,723

Value-added and other tax receivables
 
23,603

 
16,984

Inventories (Note 4)
 
111,232

 
104,691

 
 
234,279

 
277,069

Long-term investments (Note 5)
 
9,215

 
10,028

Value-added tax receivables
 
19,353

 
18,024

Mining interests (Notes 6 and Note 18 - Schedules)
 
 
 
 
Owned by subsidiaries
 
2,125,599

 
1,950,356

Investments in joint ventures
 
58,158

 
53,724

Other assets (Note 7)
 
32,410

 
26,934

 
 
$
2,479,014

 
$
2,336,135

Liabilities
 
 
 
 
Current
 
 
 
 
Accounts payable and accrued liabilities
 
$
89,329

 
$
81,722

Current taxes payable
 
5,342

 
13,180

Current portion of long-term debt (Note 8)
 
20,688

 
13,935

Current portion of derivative instruments at fair value (Note 12)
 
5,573

 
3,466

Current portion of prepaid sales (Note 10)
 
60,000

 
57,450

Other
 
7,212

 
6,288

 
 
188,144

 
176,041

Derivative instruments at fair value (Note 12)
 
3,901

 
6,439

Long-term debt (Note 8)
 
561,671

 
472,845

Prepaid sales (Note 10)
 
60,000

 
62,550

Mine restoration provisions
 
82,075

 
81,162

Deferred income taxes
 
71,592

 
74,072

Employee benefits obligation
 
7,820

 
7,860

Other long-term liabilities
 
510

 
602

 
 
975,713

 
881,571

Equity
 
 
 
 
Shareholders’ equity
 
 
 
 
Share capital (Note 9)
 
 
 
 
Issued: 978,012,126 common shares (Dec 31, 2016 – 964,892,433)
 
2,189,748

 
2,151,993

Contributed surplus
 
51,907

 
56,191

Accumulated other comprehensive loss
 
(94,876
)
 
(95,435
)
Deficit
 
(652,230
)
 
(667,760
)
 
 
1,494,549

 
1,444,989

Non-controlling interests
 
8,752

 
9,575

 
 
1,503,301

 
1,454,564

 
 
$
2,479,014

 
$
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 SIX MONTHS ENDED JUNE 30
(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 income (loss) for the period
—

 
—

—

—

15,530

(823
)
14,707

Unrealized gain on investments, net of deferred tax expense (note 5)
—

 
—

—

559

—

—

559

Shares issued on exercise of stock options (Note 9)
11,485

 
22,408

—

—

—

—

22,408

Shares issued on vesting of RSU
1,635

 
3,323

(3,323
)
—

—

—

—

Share based payments (Note 9)
—

 
—

11,063

—

—

—

11,063

Transfer to share capital on exercise of stock options
—

 
12,024

(12,024
)
—

—

—

—

 
 
 
 
 
 
 
 
 
Balance at June 30, 2017
978,012

 
$
2,189,748

$
51,907

$
(94,876
)
$
(652,230
)
$
8,752

$
1,503,301



 
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 loss for the period
—

 
—

—

—

(2,013
)
(3,142
)
(5,155
)
Unrealized gain on investments, net of deferred tax expense

—

 
—

—

3,492

—

—

3,492

Shares issued on exercise of stock options

3,686

 
5,584

—

—

—

—

5,584

Shares pending issuance on exercise of stock options
590

 
1,212

—

—

—

—

1,212

Shares issued on vesting of RSU
2,466

 
4,888

(4,888
)
—

—

—

—

Shares issued for mineral property interests
100

 
216

—

—

—

—

216

Share based payments (Note 9)
—

 
—

8,113

—

—

—

8,113

Transfer to share capital on exercise of stock options
—

 
3,286

(3,286
)
—

—

—

—

 
 
 
 
 
 
 
 
 
Balance at June 30, 2016
933,915

 
$
2,051,964

$
69,990

$
(92,762
)
$
(708,904
)
$
5,713

$
1,326,001



See accompanying notes to condensed interim consolidated financial statements.

B2GOLD CORP.
NOTES TO THE CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS
For the three and six months ended June 30, 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 of International Financial Reporting Standards ("IFRS") as issued by the International Accounting Standards Board ("IASB"). 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 August 9, 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 sales recorded in its consolidated financial statements and expects that there will be no material impact to the timing or amounts of revenue recognized in its statement of operations.

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.

1



IFRS 16 - Leases

The IASB has issued IFRS 16, Leases, which is effective for annual periods commencing on or after January 1, 2019. This new standard eliminates the classification of leases as either operating leases or finance leases and introduces a single lessee accounting model which requires the lessee to recognize assets and liabilities for all leases with a term of longer than 12 months. Early adoption is permitted provided IFRS 15 has already been adopted or is applied from the same date. The Company is currently evaluating the effect the standard will have on its consolidated financial statements.

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 and depreciation and amortization charges.

4
Inventories
 
 
June 30, 2017

 
December 31, 2016

 
 
$

 
$

 
 
 
 
 
Gold and silver bullion
 
22,981

 
21,220

In-process inventory
 
10,760

 
8,365

Ore stock-pile inventory
 
18,183

 
15,874

Materials and supplies
 
59,308

 
59,232

 
 
111,232

 
104,691


At June 30, 2017, the Company recorded a net realizable value adjustment of $4.7 million with respect the carrying value of certain inventory balances.

5
Long-term investments
 
June 30, 2017
 
December 31, 2016
 
 
 
 
 
 
 
 
 
 
 
Cost
$

Total Impairment
$

AOCI
$

Fair Value
$

 
Cost
$ 

Total Impairment
$

AOCI
$

Fair Value
$

 
 
 
 
 
 
 
 
 
 
Available for sale investments:
 
 
 
 
 
 
 
Calibre Mining Corp.
7,844

(4,330
)
2,662

6,176

 
7,844

(4,330
)
2,059

5,573

RTG Mining Inc.
13,400

(11,938
)
—

1,462

 
13,400

(10,977
)
—

2,423

St. Augustine Gold & Copper Ltd.

20,193

(18,658
)
40

1,575

 
20,193

(18,163
)
—

2,030

Goldstone Resources Ltd.
20

(18
)
—

2

 
20

(18
)
—

2

Balance, end of period
41,457

(34,944
)
2,702

9,215

 
41,457

(33,488
)
2,059

10,028



2
B2GOLD CORP.
NOTES TO THE CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS
For the three and six months ended June 30, 2017
(All tabular amounts are in thousands of United States dollars unless otherwise stated)
(Unaudited)
 

6
Mining interests
 
 
June 30, 2017

 
December 31, 2016

 
 
$

 
$

Property, plant and equipment (depletable)
 
 
 
 
Otjikoto Mine, Namibia
 
 
 
 
Cost
 
504,477

 
481,378

Accumulated depreciation and depletion
 
(125,938
)
 
(95,698
)
 
 
378,539

 
385,680

Masbate Mine, Philippines
 
 
 
 
Cost, net of impairment
 
550,053

 
517,457

Accumulated depreciation and depletion
 
(183,028
)
 
(165,224
)
 
 
367,025

 
352,233

Libertad Mine, Nicaragua
 
 
 
 
Cost, net of impairment
 
316,399

 
300,816

Accumulated depreciation and depletion
 
(251,361
)
 
(226,488
)
 
 
65,038

 
74,328

Limon Mine, Nicaragua
 
 
 
 
Cost, net of impairment
 
159,936

 
151,186

Accumulated depreciation and depletion
 
(116,661
)
 
(107,255
)
 
 
43,275

 
43,931

 
 
 
 
 
Masbate undeveloped mineral interests, net of impairment (non-depletable)
 
60,880

 
60,880

 
 
 
 
 
Mine under construction (non-depletable)
 
 
 
 
Fekola, Mali
 
1,073,239

 
908,855

 
 
 
 
 
Exploration and evaluation properties (non-depletable)
 
 
 
 
Kiaka, Burkina Faso
 
66,996

 
64,907

Mocoa, Colombia
 
29,009

 
29,004

Fekola Regional, Mali
 
12,910

 
9,326

Toega, Burkina Faso
 
7,962

 
4,819

Other
 
20,218

 
15,906

 
 
137,095

 
123,962

Corporate & other
 
 
 
 
Office, furniture and equipment, net
 
508

 
487

 
 
2,125,599

 
1,950,356

Investments in joint ventures (accounted for using the equity method)
 
 
 
 
Gramalote, Colombia, net of impairment
 
58,158

 
53,724

 
 
2,183,757

 
2,004,080

Sale of Lynn Lake Royalty
On June 7, 2017, the Company completed the sale of all of its rights, title and interest to a 2% net smelter returns royalty (“NSR”), covering Alamos Gold Inc.’s Lynn Lake properties in Manitoba for Cdn. $9 million in cash upon closing and a further contingent payment of up to Cdn. $6 million due 24 months after the property enters commercial production.

The Lynn Lake royalty had been acquired by B2Gold in connection with the acquisition of Central Sun Mining Inc. (“Central Sun”) in March 2009. For accounting purposes, no value of the total purchase price relating to the business combination with Central Sun had been allocated to the NSR, based upon an evaluation of the likely cash flows arising from the NSR. In the period since the original accounting for the business combination the Company previously determined that the NSR did not fulfill the threshold for recognition as an asset as it did not have sufficient assurance over the likelihood of future cash flows from the NSR to record an asset, consistent with the original business combination accounting. As a result, in the second quarter of 2017, the Company recorded a $6.6 million pre-tax gain on disposal of the NSR, net of related

3
B2GOLD CORP.
NOTES TO THE CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS
For the three and six months ended June 30, 2017
(All tabular amounts are in thousands of United States dollars unless otherwise stated)
(Unaudited)
 

transaction costs of $0.1 million. No amount was recorded with respect to the contingent consideration due upon the commencement of commercial production.
Masbate
As reported by the Company on February 2, 2017, the Philippine Department of Environment and Natural Resources (the “DENR”) 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 final results of the audit in respect of Masbate and as such, the final outcome of the audit has not been determined. Resolution of the audit is expected when the Mining Industry Coordinating Council (the “MICC” which is the oversight committee for DENR) conducts a technical review of mines in the Philippines in order to address DENR audit conclusions. No time frame has been provided for this review.
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
 
 
June 30, 2017

 
December 31, 2016

 
 
$

 
$

 
 
 
 
 
Loan receivable, including accrued interest
 
7,560

 
7,181

Debt service reserve accounts
 
10,473

 
5,235

Reclamation deposits
 
2,216

 
2,177

Low-grade stockpile
 
8,837

 
6,909

Derivative instruments at fair value
 
489

 
1,585

Other
 
2,835

 
3,847

 
 
32,410

 
26,934























4
B2GOLD CORP.
NOTES TO THE CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS
For the three and six months ended June 30, 2017
(All tabular amounts are in thousands of United States dollars unless otherwise stated)
(Unaudited)
 

8
Long-term debt
 
 
June 30, 2017

 
December 31, 2016

 
 
$

 
$

Convertible senior subordinated notes:
 
 
 
 
Principal amount
 
258,750

 
258,750

Fair value adjustment
 
18,318

 
4,043

 
 
277,068

 
262,793

Revolving corporate credit facility:
 
 
 
 
Principal amount
 
250,000

 
200,000

Less: unamortized transaction costs
 
(2,388
)
 
(3,047
)
 
 
247,612

 
196,953

Equipment loans/finance lease obligations:
 
 
 
 
Fekola equipment loan facility (net of unamortized transaction costs)
 
35,870

 
—

Otjikoto equipment loan facility (net of unamortized transaction costs)
 
19,628

 
24,134

Nicaraguan equipment loans
 
2,181

 
2,900

 
 
57,679

 
27,034

 
 
 
 
 
 
 
582,359

 
486,780

 
 
 
 
 
Less: current portion
 
(20,688
)
 
(13,935
)
 
 
561,671

 
472,845


Convertible senior subordinated notes
As at June 30, 2017, the fair value of the convertible senior subordinated notes (“convertible notes”) was $277.1 million. The gain (loss) on fair value of convertible notes recorded in the statement of operations for the three and six months ended June 30, 2017 was $2.5 million and $(12.0) million, respectively (2016 – loss of $(37.4) million and $(43.4) million, respectively). The change in fair value of the notes recognized in the statement of operations for the three and six months ended June 30, 2017 is stated after reducing it by $3.3 million and $6.5 million, respectively (2016 – $1.3 million and $2.5 million, respectively) of interest expense which was attributable to eligible expenditures on the Fekola property and capitalized to the carrying amount of the property.
Revolving corporate 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 (“existing RCF”) Bank Lending Syndicate. On May 8, 2017, the loan documentation was completed and the aggregate amount of the existing RCF increased from $350 million to $425 million.

As at June 30, 2017, the Company had drawn down $250 million under the $425 million existing RCF, leaving an undrawn and available balance under the facility of $175 million.

For three and six months ended June 30, 2017, the interest and financing expense relating to the existing RCF recognized in the statement of operations was reduced by $1.6 million and $3.2 million, respectively (2016 – $0.7 million and $1.4 million, respectively), 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 existing 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 existing RCF, the Company must also maintain certain net tangible worth and ratios for leverage and interest coverage. As at June 30, 2017, the Company was in compliance with these debt covenants.

On July 7, 2017, the Company entered into an amended and restated credit agreement with its syndicate of international banks ("amended RCF") of an aggregate amount of $500 million, representing a $75 million increase from the principal amount of $425 million under its existing RCF. The amended RCF also allows for an accordion feature whereby upon receipt of additional binding commitments, the facility may be increased to $600 million any time prior to the maturity date.


5
B2GOLD CORP.
NOTES TO THE CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS
For the three and six months ended June 30, 2017
(All tabular amounts are in thousands of United States dollars unless otherwise stated)
(Unaudited)
 

The amended RCF will bear interest on a sliding scale of between LIBOR plus 2.25% to 3.25% based on the Company’s consolidated net leverage ratio. Commitment fees for the undrawn portion of the facility will also be on a similar sliding scale basis of between 0.50% and 0.925%. The term of the amended RCF is four years, maturing on July 7, 2021. If the principal indebtedness outstanding under the Company’s existing convertible notes maturing on October 1, 2018, is greater than $100 million on December 29, 2017, then the sliding scale interest will increase to a sliding scale range of between LIBOR plus 2.50% to 4.00%. The amended RCF will also be subject to certain net tangible worth and ratios for leverage and interest coverage covenants.

Subsequent to June 30, 2017, the Company drew down an additional $25 million under the amended RCF.
Fekola equipment loan facility
During the three and six months ended June 30, 2017, the Company drew down Euro 10.3 million and Euro 35.0 million, respectively ($11.3 million and $37.4 million equivalent, respectively) under the facility. As at June 30, 2017, Euro 36.4 million ($41.5 million equivalent) was available for future drawdowns.

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 June 30, 2017, the balance in the DSRA was Euro 4.6 million ($5.2 million equivalent, see Note 7).

Otjikoto equipment loan facility
On May 30, 2017, the term over which loans may be advanced under the facility was extended to June 30, 2018 and an additional $6.2 million was made available for drawdown.
Masbate equipment loan facility

On June 1, 2017, the Company entered into a $17.8 million term equipment facility (the "Equipment Facility") with Caterpillar Financial Services Philippines Inc. The aggregate principal amount is available to the Company’s Philippines subsidiaries to finance or refinance the mining fleet and other mining equipment at the Company's Masbate Mine. As at June 30, 2017, there had been no drawdowns on the facility. The Equipment Facility is available for a period that ends on the earlier of the day when the Equipment Facility is fully drawn and December 31, 2018. The Equipment Facility may be drawn in installments of not less than $0.5 million, and each such installment shall be treated as a separate equipment loan.

Each equipment loan is repayable in 20 equal quarterly installments. The final repayment date shall be five years from the first disbursement under each equipment loan. The interest rate on each loan is a rate per annum equal to LIBOR plus a margin of 3.85%. A commitment fee of 1.15% per annum on the undrawn balance of each tranche is also due, each payable quarterly. The Company has guaranteed the Equipment Facilities and security is given over the equipment of the Borrower which has been financed by the Equipment Facilities.

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 June 30, 2017, the Company had 978,012,126 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 June 30, 2017, the Company granted 22.4 million stock options to employees. These options have a weighted average exercise price of C$3.65, 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 0.89%, an expected life of 3.2 years, an expected volatility of 61%, and a dividend yield rate of nil.

During the six months ended June 30, 2017, the Company granted 22.8 million stock options to employees. These options have a weighted average exercise price of C$3.65, 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 0.89%, an expected life of 3.2 years, an expected volatility of 61%, and a dividend yield rate of nil. The total number of stock options outstanding at June 30, 2017 was 60.2 million.



6
B2GOLD CORP.
NOTES TO THE CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS
For the three and six months ended June 30, 2017
(All tabular amounts are in thousands of United States dollars unless otherwise stated)
(Unaudited)
 

A summary of changes to stock options outstanding:
 
 
Number of outstanding options
('000's)

 
Weighted-average exercise price
(in Cdn. $)

 
 
 
 
 
Outstanding at December 31, 2016
 
50,062

 
2.24

Granted
 
22,848

 
3.65

Exercised
 
(11,485
)
 
2.59

Forfeited or expired
 
(1,181
)
 
2.68

Outstanding at June 30, 2017
 
60,244

 
2.70

For the three and six months ended June 30, 2017, share-based payments expense, relating to the vesting of stock options, was $5.7 million and $6.9 million, respectively (2016 - $1.1 million and $4.7 million, respectively), net of $1.5 million and $1.7 million, respectively (2016 - $0.3 million and $0.6 million, respectively) capitalized to mining interests.
For the three and six months ended June 30, 2017, the Company issued 3.1 million and 11.5 million shares, respectively, for proceeds of $4.4 million and $22.4 million, respectively, from the exercise of stock options. Subsequent to June 30, 2017, the Company issued a further 0.6 million shares for proceeds of $1.0 million on the exercise of stock options.
During the three and six months ended June 30, 2017, the Company granted 1.6 million and 1.6 million RSUs, respectively to employees. The total number of RSUs outstanding at June 30, 2017 was 1.2 million.
For the three and six months ended June 30, 2017, share-based payments expense, relating to the vesting of RSUs, was $2.0 million and $2.4 million, respectively (2016 - $0.7 million and $2.8 million, respectively).
Earnings per share
For the three months ended June 30, 2017, potential share issuances arising from any future conversion of the convertible notes are included in the calculation of diluted weighted average shares outstanding and their impact removed from diluted net income attributable to shareholders of the Company as these securities are dilutive. For the six months ended June 30, 2017, there is no adjustment required as these these securities are anti-dilutive for that period.
The following is the calculation of diluted net income (loss) attributable to shareholders of the Company for the period:
 
 
For the three months ended
June 30, 2017

 
For the three months ended
June 30, 2016

 
For the six months ended
June 30, 2017

 
For the six months ended
June 30, 2016

 
 
 
 
 
 
 
 
 
Net income (loss) for the period attributable to shareholders of the company
 
$
21,029

 
$
(10,330
)
 
$
15,530

 
$
(2,013
)
Dilutive impact of gain on fair value of senior notes
 
$
(2,478
)
 
$
—

 
$
—

 
$
—

Diluted net income (loss) for the period
 
$
18,551

 
$
(10,330
)
 
$
15,530

 
$
(2,013
)
The following is the calculation of diluted weighted average number of shares outstanding for the period:
 
 
For the three months ended
June 30, 2017

 
For the three months ended
June 30, 2016

 
For the six months ended
June 30, 2017

 
For the six months ended
June 30, 2016

 
 
 
 
 
 
 
 
 
Basic weighted average number of shares outstanding (in thousands)
 
976,527

 
930,235

 
973,500

 
928,690

 
 
 
 
 
 
 
 
 
Effect of dilutive securities
 
 
 
 
 
 
 
 
Senior notes
 
65,798

 
—

 
—

 
—

Stock options
 
15,260

 
—

 
17,059

 
—

Restricted share units
 
423

 
—

 
469

 
—

Diluted weighted average number of shares outstanding (in thousands)
 
1,058,008

 
930,235

 
991,028

 
928,690


7
B2GOLD CORP.
NOTES TO THE CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS
For the three and six months ended June 30, 2017
(All tabular amounts are in thousands of United States dollars unless otherwise stated)
(Unaudited)
 

The following is the basic and diluted earnings per share:
 
 
For the three months ended
June 30, 2017

 
For the three months ended
June 30, 2016

 
For the six months ended
June 30, 2017

 
For the six months ended
June 30, 2016
 
 
 
 
 
 
 
 
 
Earnings per share (attributable to shareholders of the Company)
 
 
 
 
 
 
 
 
Basic
 
$
0.02

 
$
(0.01
)
 
$
0.02

 
$ (0.00)
Diluted
 
$
0.02

 
$
(0.01
)
 
$
0.02

 
$ (0.00)

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 three and six months ended June 30, 2017, the Company delivered 12,908 and 25,816 ounces, respectively, into contracts valued at $15.0 million and $30.0 million, respectively. As the Company physically delivers ounces into the contracts, the portion of the Prepaid Sales relating to the delivered ounces was recognized as gold revenue in the statement of operations.

During the three and six months ended June 30, 2017, the Company entered into new contracts for 12,502 and 25,282 ounces, respectively, valued at $15.0 million and $30.0 million, respectively.

At June 30, 2017, the Company had $120 million of outstanding contracts for the delivery of 102,732 ounces with 25,817 ounces to be delivered during 2017, 51,633 ounces during 2018 and 25,282 ounces during 2019.

11
Gold commitments

As at June 30, 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
 
4,500

 
7,500

 
12,000

Average price per ounce (rand)
 
16,020

 
16,020

 
16,020


12
Derivative Financial instruments

Gold forwards

As at June 30, 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
 
17,958

 
35,916

 
53,874

Average price per ounce (rand)
 
15,044

 
15,044

 
15,044

The unrealized fair value of these contracts at June 30, 2017 was $(8.5) million.

8
B2GOLD CORP.
NOTES TO THE CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS
For the three and six months ended June 30, 2017
(All tabular amounts are in thousands of United States dollars unless otherwise stated)
(Unaudited)
 

Forward contracts – fuel oil, gas oil, diesel
During the six months ended June 30, 2017, the Company entered into additional series of forward contracts for the purchase of 37,246,000 litres of fuel oil, 21,576,000 litres of gas oil and 1,079,000 litres of diesel with settlements scheduled between February 2018 and January 2020. 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 June 30, 2017:
 
 
2017

 
2018

 
2019

 
2020

 
Total

Forward – fuel oil:
 
 
 
 
 
 
 
 
 
 
Litres (thousands)
 
13,378

 
39,482

 
22,662

 
777

 
76,299

Average strike price
 
$
0.29

 
$
0.30

 
$
0.29

 
$
0.28

 
$
0.30

 
 
 
 
 
 
 
 
 
 
 
Forward – gas oil:
 
 
 
 
 
 
 
 
 
 
Litres (thousands)
 
7,729

 
18,459

 
12,908

 
445

 
39,541

Average strike price
 
$
0.40

 
$
0.40

 
$
0.40

 
$
0.39

 
$
0.40

 
 
 
 
 
 
 
 
 
 
 
Forward – diesel:
 
 
 
 
 
 
 
 
 
 
Litres (thousand)
 
4,073

 
3,910

 
1,399

 
47

 
9,429

Average strike price
 
$
0.40

 
$
0.41

 
$
0.43

 
$
0.41

 
$
0.41

The unrealized fair value of these contracts at June 30, 2017 was $(1.0) 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 June 30, 2017 was $1.0 million.


13
Financial Instruments

As at June 30, 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 June 30, 2017
 
As at December 31, 2016
 
 
Level 1

 
Level 2

 
Level 1

 
Level 2

 
 
$

 
$

 
$

 
$

 
 
 
 
 
 
 
 
 
Long-term investments (Note 5)
 
9,215

 
—

 
10,028

 
—

Convertible senior subordinated notes (Note 8)
 
—

 
(277,068
)
 
—

 
(262,793
)
Gold forward contracts (Note 12)
 
—

 
(8,526
)
 
—

 
(10,017
)
Fuel derivative contracts (Note 12)
 
—

 
(967
)
 
—

 
2,760

Interest rate swaps (Note 12)
 
—

 
979

 
—

 
1,122

Gold collar contracts
 
—

 
—

 
—

 
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.

9
B2GOLD CORP.
NOTES TO THE CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS
For the three and six months ended June 30, 2017
(All tabular amounts are in thousands of United States dollars unless otherwise stated)
(Unaudited)
 

The fair value of the fuel derivative contracts and gold derivative contracts was determined using prevailing market rates for instruments with similar characteristics.
The fair value of the Company's other financial instruments approximates their carrying value.
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 months ended
June 30, 2017

 
For the three months ended
June 30, 2016

 
For the six months ended
June 30, 2017

 
For the six months ended
June 30, 2016

 
 
$

 
$

 
$

 
$

 
 
 
 
 
 
 
 
 
Consolidated income (loss) before income taxes
 
19,001

 
(11,253
)
 
19,402

 
(8,830
)
Canadian federal and provincial income tax rates
 
26.00
%
 
26.00
%
 
26.00
%
 
26.00
%
Income tax expense (recovery) at statutory rates
 
4,940

 
(2,926
)
 
5,045

 
(2,296
)
 
 
 
 
 
 
 
 
 
Increase (decrease) attributable to:
 
 
 
 
 
 
 
 
Effects of different foreign statutory tax rates and tax holidays
 
(10,026
)
 
(9,911
)
 
(17,423
)
 
(19,160
)
Non-deductible expenditures
 
2,638

 
1,786

 
5,572

 
3,877

Losses for which no tax benefit has been recorded
 
7,245

 
13,908

 
12,057

 
15,180

Withholding tax and minimum tax
 
3,102

 
1,426

 
6,128

 
3,418

Change due to foreign exchange
 
(4,669
)
 
1,238

 
(5,762
)
 
(373
)
Change in accruals for tax audits
 
(652
)
 
—

 
(652
)
 
—

Tax benefit of tax holiday extension
 
—

 
(4,403
)
 
—

 
(4,403
)
Changes in estimates of deferred tax assets
 
(502
)
 
—

 
38

 
—

Non-deductible portion of (gains) losses
 
(2,339
)
 
(565
)
 
(308
)
 
82

Income tax (recovery) expense
 
(263
)
 
553

 
4,695

 
(3,675
)
 
 
 
 
 
 
 
 
 
Current income tax, withholding and other taxes
 
2,498

 
3,990

 
7,258

 
8,335

Deferred income tax recovery
 
(2,761
)
 
(3,437
)
 
(2,563
)
 
(12,010
)
Income tax (recovery) expense
 
(263
)
 
553

 
4,695

 
(3,675
)


10
B2GOLD CORP.
NOTES TO THE CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS
For the three and six months ended June 30, 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 charges (credits):
 
 
For the three months ended
June 30, 2017

 
For the three months ended
June 30, 2016

 
For the six months ended
June 30, 2017

 
For the six months ended
June 30, 2016

 
 
$

 
$

 
$

 
$

 
 
 
 
 
 
 
 
 
Depreciation and depletion
 
45,014

 
38,938

 
81,395

 
73,251

Delivery into prepaid sales (Note 10)
 
(15,000
)
 
—

 
(30,000
)
 
—

Unrealized (gain) loss on fair value of convertible notes (Note 8)
 
(2,478
)
 
37,434

 
11,978

 
43,393

Share-based payments
 
7,713

 
2,087

 
9,314

 
7,472

Gain on sale of Lynn Lake royalty (Note 6)
 
(6,593
)
 
—

 
(6,593
)
 
—

Unrealized (gains) losses on derivative instruments
 
(2,867
)
 
650

 
2,470

 
10,100

Write-down of mineral property interests
 
—

 
3,867

 
1,439

 
3,867

Write-down of long-term investments
 
573

 
182

 
1,456

 
182

Accretion of mine restoration provisions
 
467

 
283

 
937

 
629

Provision for non-recoverable input taxes
 
970

 
787

 
1,548

 
1,029

Deferred income tax recovery (Note 14)
 
(2,761
)
 
(3,437
)
 
(2,563
)
 
(12,010
)
Other
 
1,587

 
3,224

 
2,620

 
4,697

 
 
26,625

 
84,015

 
74,001

 
132,610


Changes in non-cash working capital:
 
 
For the three months ended
June 30, 2017

 
For the three months ended
June 30, 2016

 
For the six months ended
June 30, 2017

 
For the six months ended
June 30, 2016

 
 
$

 
$

 
$

 
$

 
 
 
 
 
 
 
 
 
Accounts receivable and prepaids
 
(709
)
 
(807
)
 
(3,126
)
 
570

Value-added and other tax receivables
 
(3,513
)
 
5,829

 
(3,758
)
 
4,192

Inventories
 
(456
)
 
(4,603
)
 
(8,003
)
 
(9,820
)
Accounts payable and accrued liabilities
 
(2,116
)
 
5,495

 
(2,601
)
 
5,523

Income and other taxes payables
 
(1,570
)
 
(3,577
)
 
(7,837
)
 
(4,187
)
 
 
(8,364
)
 
2,337

 
(25,325
)
 
(3,722
)


11
B2GOLD CORP.
NOTES TO THE CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS
For the three and six months ended June 30, 2017
(All tabular amounts are in thousands of United States dollars unless otherwise stated)
(Unaudited)
 

Other exploration and development:
 
 
For the three months ended
June 30, 2017

 
For the three months ended
June 30, 2016

 
For the six months ended
June 30, 2017

 
For the six months ended
June 30, 2016

 
 
$

 
$

 
$

 
$

 
 
 
 
 
 
 
 
 
Masbate Mine, exploration
 
(1,418
)
 
(1,212
)
 
(2,810
)
 
(1,678
)
Libertad Mine, exploration
 
(2,188
)
 
(1,003
)
 
(3,469
)
 
(1,729
)
Limon Mine, exploration
 
(1,403
)
 
(859
)
 
(2,226
)
 
(1,367
)
Otjikoto Mine, exploration
 
(102
)
 
(359
)
 
(433
)
 
(650
)
Fekola Project, exploration
 
(2,293
)
 
(362
)
 
(3,740
)
 
(1,286
)
Kiaka Project, exploration
 
(929
)
 
(671
)
 
(1,954
)
 
(1,137
)
Fekola Regional, exploration
 
(1,741
)
 
(1,194
)
 
(3,584
)
 
(1,695
)
Toega Project, exploration
 
(2,016
)
 
(790
)
 
(3,143
)
 
(940
)
Other
 
(2,570
)
 
(1,350
)
 
(4,314
)
 
(2,351
)
 
 
(14,660
)
 
(7,800
)
 
(25,673
)
 
(12,833
)

Non-cash investing and financing activities:
 
 
For the three months ended
June 30, 2017

 
For the three months ended
June 30, 2016

 
For the six months ended
June 30, 2017

 
For the six months ended
June 30, 2016

 
 
$

 
$

 
$

 
$

 
 
 
 
 
 
 
 
 
Share-based payments, capitalized to resource property interests
 
1,507

 
312

 
1,748

 
641

Interest expense, capitalized to resource property interests
 
4,882

 
2,060

 
9,653

 
3,904

Change in accounts payable and accrued liabilities relating to resource property expenditures
 
4,517

 
(1,871
)
 
9,905

 
(6,608
)

A subsidiary of the Company, Kronk Resources Inc, has $0.9 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, Kiaka and Gramalote 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.

12
B2GOLD CORP.
NOTES TO THE CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS
For the three and six months ended June 30, 2017
(All tabular amounts are in thousands of United States dollars unless otherwise stated)
(Unaudited)
 

The Company’s segments are summarized in the following tables:
 
For the three months ended June 30, 2017
 
Otjikoto
Project

Masbate
Mine

Libertad
Mine

Limon
Mine

Fekola
Project

Kiaka
Project

Gramalote
Project

Other
Mineral
Properties

Corporate
& Other

Total

 
$
$
$
$
$
$
$
$
$
$
 
 
 
 
 
 
 
 
 
 
 
External gold revenue
54,970

67,942

26,410

—

—

—

—

—

15,000

164,322

Intersegment gold revenue
—

—

5,827

10,415

—

—

—

—

(16,242
)
—

Production costs
21,660

29,599

19,410

10,129

—

—

—

—

—

80,798

Depreciation & depletion
15,989

9,850

14,078

5,097

—

—

—

—

50

45,064

Net income (loss)
15,492

23,082

(4,195
)
(8,108
)
1,109

1,133

—

(67
)
(9,182
)
19,264

Capital expenditures
2,757

16,830

10,865

4,507

77,274

929

2,595

6,326

91

122,174

Total assets
476,482

510,313

103,909

63,819

1,083,527

67,384

58,158

71,239

44,183

2,479,014


 
For the three months ended June 30, 2016
 
Otjikoto
Project

Masbate
Mine

Libertad
Mine

Limon
Mine

Fekola
Project

Kiaka
Project

Gramalote
Project

Other
Mineral
Properties

Corporate
& Other

Total

 
$
$
$
$
$
$
$
$
$
$
 
 
 
 
 
 
 
 
 
 
 
Gold revenue
41,240

70,748

40,018

12,797

—

—

—

—

—

164,803

Production costs
12,920

23,386

21,953

7,887

—

—

—

—

—

66,146

Depreciation & depletion
10,723

10,858

13,031

4,326

—

—

—

—

51

38,989

Net income (loss)
8,346

35,041

3,090

(2,939
)
(1,671
)
(732
)
—

35

(52,976
)
(11,806
)
Capital expenditures
7,978

10,048

3,923

2,441

51,361

671

2,753

3,350

—

82,525

Total assets
454,167

513,519

140,744

75,510

728,922

62,920

44,538

62,711

66,988

2,150,019


 
For the six months ended June 30, 2017
 
Otjikoto
Project

Masbate
Mine

Libertad
Mine

Limon
Mine

Fekola
Project

Kiaka
Project

Gramalote
Project

Other
Mineral
Properties

Corporate
& Other

Total

 
$
$
$
$
$
$
$
$
$
$
 
 
 
 
 
 
 
 
 
 
 
External gold revenue
102,647

127,921

48,656

1,354

—

—

—

—

30,000

310,578

Intersegment gold revenue
—

—

14,652

17,466

—

—

—

—

(32,118
)
—

Production costs
36,901

54,578

39,289

17,077

—

—

—

—

—

147,845

Depreciation & depletion
29,219

18,230

24,540

9,406

—

—

—

—

96

81,491

Net income (loss)
21,581

42,938

(8,063
)
(13,300
)
1,572

1,368

—

(12
)
(31,377
)
14,707

Capital expenditures
15,640

33,176

15,738

8,661

146,531

1,954

5,180

11,040

117

238,037

Total assets
476,482

510,313

103,909

63,819

1,083,527

67,384

58,158

71,239

44,183

2,479,014



13
 
B2GOLD CORP.
NOTES TO THE CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS
For the three and six months ended June 30, 2017
(All tabular amounts are in thousands of United States dollars unless otherwise stated)
(Unaudited)
 

 
For the six months ended June 30, 2016
 
Otjikoto
Project

Masbate
Mine

Libertad
Mine

Limon
Mine

Fekola
Project

Kiaka
Project

Gramalote
Project

Other
Mineral
Properties

Corporate
& Other

Total

 
$
$
$
$
$
$
$
$
$
$
 
 
 
 
 
 
 
 
 
 
 
Gold revenue
86,419

123,849

73,211

25,576

—

—

—

—

—

309,055

Production costs
27,296

44,631

39,092

16,771

—

—

—

—

—

127,790

Depreciation & depletion
23,249

19,343

22,567

8,092

—

—

—

—

101

73,352

Net income (loss)
21,789

53,513

5,351

(3,947
)
(86
)
(180
)
—

120

(81,715
)
(5,155
)
Capital expenditures
26,977

19,028

13,429

4,328

98,726

1,137

2,816

5,003

(280
)
171,164

Total assets
454,167

513,519

140,744

75,510

728,922

62,920

44,538

62,711

66,988

2,150,019

The Company’s mining interests are located in the following geographical locations:
 
 
June 30, 2017

 
December 31, 2016

 
 
$

 
$

Mining interests
 
 
 
 
 Mali
 
1,091,481

 
923,122

 Philippines
 
427,905

 
413,113

 Namibia
 
382,942

 
387,874

 Nicaragua
 
112,311

 
122,095

 Colombia
 
87,167

 
82,728

 Burkina Faso
 
78,587

 
72,422

 Finland
 
1,923

 
1,642

 Canada
 
508

 
487

 Other
 
933

 
597

 
 
2,183,757

 
2,004,080



17
Commitments

As at June 30, 2017, the Company had the following commitments (in addition to those disclosed elsewhere in these financial statements):
•
For payments of $22.4 million for Fekola Project equipment and development costs, all of which is expected to be incurred in 2017.
•
For payments of $11.3 million for mobile equipment at the Masbate Mine, $6.8 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 $3.4 million for mobile equipment at the Otjikoto Mine, all of which is expected to be incurred in 2017.
•
For payments of $6.8 million for construction of a Solar Plant at the Otjikoto Mine, all of which is expected to be incurred in 2017.


14
 
B2GOLD CORP.
MINING INTERESTS SCHEDULE (NOTE 18)
For the six months ended June 30, 2017
(All tabular amounts are in thousands of United States dollars)
(Unaudited)
 


 
Cost
 
Accumulated depreciation
 
Net carrying value
 
Balance at Dec. 31, 2016
Additions
Disposals/ write-offs
Reclass
Cumulative translation adjustment
Balance at Jun. 30, 2017
 
Balance at Dec. 31, 2016
Depreciation
Disposals/ write-offs
Balance at Jun. 30, 2017
 
As at Jun. 30, 2017
As at Dec. 31, 2016
 
$
$
$
$
$
$
 
$
$
$
$
 
$
$
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Property, plant and equipment (depletable)
 
 
 
 
 
 
 
 
   Otjikoto
481,378

22,079

(1,444
)
2,464

—

504,477

 
(95,698
)
(30,240
)
—

(125,938
)
 
378,539

385,680

   Masbate
517,457

32,596

—

—

—

550,053

 
(165,224
)
(17,804
)
—

(183,028
)
 
367,025

352,233

   Libertad
300,816

15,799

(216
)
—

—

316,399

 
(226,488
)
(24,929
)
56

(251,361
)
 
65,038

74,328

   Limon
151,186

8,750

—

—

—

159,936

 
(107,255
)
(9,406
)
—

(116,661
)
 
43,275

43,931

 
1,450,837

79,224

(1,660
)
2,464

—

1,530,865

 
(594,665
)
(82,379
)
56

(676,988
)
 
853,877

856,172

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Undeveloped mineral interests

 
 
 
 
 
 
 
 
 
 
 
 
 
 
Masbate
60,880

—

—

—

—

60,880

 
—

—

—

—

 
60,880

60,880

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Mine under construction
 
 
 
 
 
 
 
 
 
 
 
 
 
 
   Fekola
908,855

164,384

—

—

—

1,073,239

 
—

—

—

—

 
1,073,239

908,855

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Exploration & evaluation properties (non-depletable)
 
 
 
 
 
 
 
 
   Kiaka
64,907

2,089

—

—

—

66,996

 
—

—

—

—

 
66,996

64,907

   Mocoa
29,004

5

—

—

—

29,009

 
—

—

—

—

 
29,009

29,004

Fekola Regional
9,326

3,584

—

—

—

12,910

 
—

—

—

—

 
12,910

9,326

Toega
4,819

3,143

—

—

—

7,962

 
—

—

—

—

 
7,962

4,819

   Other
15,906

4,312

—

—

—

20,218

 
—

—

—

—

 
20,218

15,906

 
123,962

13,133

—

—

—

137,095

 
—

—

—

—

 
137,095

123,962

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Corporate
 
 
 
 
 
 
 
 
 
 
 
 
 
 
   Office, furniture & equipment
1,827

117

—

—

—

1,944

 
(1,340
)
(96
)
—

(1,436
)
 
508

487

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
2,546,361

256,858

(1,660
)
2,464

—

2,804,023

 
(596,005
)
(82,475
)
56

(678,424
)
 
2,125,599

1,950,356

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Investments in joint ventures (accounted for using the equity method)
 
 
 
 
 
 
 
 
   Gramalote
53,724

4,434

—

—

—

58,158

 
—

—

—

—

 
58,158

53,724

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
2,600,085

261,292

(1,660
)
2,464

—

2,862,181

 
(596,005
)
(82,475
)
56

(678,424
)
 
2,183,757

2,004,080



15
 
B2GOLD CORP.
MINING INTERESTS SCHEDULE (NOTE 18)
For the year ended December 31, 2016
(All tabular amounts are in thousands of United States dollars)
(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


16