Good afternoon, ladies and gentlemen. Welcome to B2Gold Corp’s Second Quarter and First Half 2018 Financial Results Conference Call. I would now like to turn the call over to Mr. Clive Johnson, President and CEO. You may proceed, Mr. Johnson.

Thanks, operator. Welcome, everyone, to the conference call today as the operator said to discuss the second quarter 2018 financial results. We, as everyone knows, prereleased the production numbers. We put out extensive financials yesterday with extensive MD&A management discussion and analysis results and the news release great detail as well. So basically I think the numbers and what we're doing should speak for itself. So today, we'll have a brief discussion, perhaps a little bit of strategy of the firm, at least from me, very briefly, and then Mike is going to take over and talk about the summary of the financials. And then, Tom is going to talk a bit about the drilling we're doing going at Fekola North, and Bill is going to talk about the expansion studies we're doing and the timing of those events of new resource and expansion study for Fekola. So just in terms of the quarter, as I said, numbers speak for themselves, another very strong quarter for us, very good performance from the mines. In terms of strategically where we are, our strategy is as outlined in the new release and the MD&A. But briefly, it's to continue on what we did for a while, which is to maximize production in our operations, maintain our tremendous safety track record and environmental responsibility and social programs and focus the future on repaying debt – the maximizing cash flows, repaying debt, and also looking to grow through our pipeline of opportunities, of which Fekola probably being the most in the fore of accomplishments we'll talk about quite a bit as we go through this. But the strategy is [indiscernible] M&A, frankly, we like a lot of opportunities we see out there. Obviously, we would be looking to use our shares as a currency…

Okay. Thanks, Clive. So as Clive said very positive quarter, the second quarter for B2. We had – on the sales side, we sold 221,000 ounces, which was 89,000 more than the comparable quarter last year and that's driven almost exclusively by Fekola being online for the full – or since the start of the year with full commercial production. We had sales from Fekola of 100,000 ounces. Overall, revenues increased to $285 million, which was driven 68% by an increase in ounces sold and 3% increase in the gold price. On the production side, consolidated gold production for the Q was 240,000 ounces, which was 16,000 ounces higher than budget. And that beat on budget comes from the outperformance of Fekola and Masbate, slightly offset by some minor shortfalls in the June Nicaragua production. Breaking it down, Fekola had 113,000 ounces for the Q against the budget of 101,000 ounces, so it beat it by 12,000 ounces. And that came from the – what do you call it, Bill? The holy trinity of higher throughput. We were 8% over budget. And I think the mill's now running comfortably at somewhere around 5.5 million tonnes per annum and we've tested that now over a variety of ore types and rock types. It's also run higher recoveries, 95.3% against a budget of 92.7%. Otjikoto, 41,000 ounces is basically in line. Masbate, 54,000 ounces, which was 11,000 ounces over budget. Masbate had higher recoveries and higher grade in the Q and that's mainly from an unexpected higher grade in backfill ore that we actually took from old underground mine workings as we mine the Colorado Pit. That was backfill ore was higher grade than originally – the original planned in situ ore that we were going to mine and therefore it increased…

Thanks, Mike. Good morning, everybody. Just to talk about the Fekola exploration. As Mike said, we have significantly expanded the budget of Fekola, largely to do infill drilling in an area to the north of the current reserve pit. In fact, the area that we're covering with drilling right now is approximately a kilometer north of the pit and to a depth of just over 350 meters. This is the area we're doing infill drilling. By the end of the year, we'll have drilled about 25,000 meters at diamond drilling and 38,000 meters of RC. Now the area that we're drilling is for to complete a resource by October. But once that infill drilling is done, we're going to continue drilling to north of that because the deposit remains open in that direction. We expect to have this resource out in October and there's pretty good chance we'll have some drill results coming out in September to back that up. I will make a comment about this resource drilling. A lot of people will say, well, why are you going north, because there's some plunging down to the north. Well, what, in fact, has happened is although it's still plunges northwards, the main part of the ore body has come up towards surface, either a second shoot or the main shoot itself is expanded. But either way with that coming closer to surface, it actually allows the pit to be driven out in that direction and that's what driving this larger resource that we're looking at. If there is any questions, just pass them on. Thanks.

Tom maybe just add to what you are saying, Clive mentioned that we talk a little bit about the expansion potential, we are currently looking at it from an engineering standpoint, John Rahala, the VP of Metallurgy is currently working on a grinding study, basically to figure out how much capacity we have in the mills and how big we can go there. In addition he's doing a de-bottlenecking study, which would give us an indication really what the largest we could make that mill is and what the cost would be associated with that. Dennis Stansbury our Senior VP of Product Development is leading a study, which looks at both the infrastructure and the mining fleet. So how big could we make the mining fleet? What's the optimal size based on the potential resource that Tom's developing? In addition to that he's looking at all the infrastructure things like tailings facility and warehouses, HME, shops, those types of things just to make sure that by the end of the year, we have sufficient information internally to make some decisions on how big we really think that this thing can get and how big we want it to be based on capital influx. So I don't know if anyone wants to add to that. Okay, back to you, Clive.

Okay. Well, I guess, with that, we'll open it up to questions. Just one comment on the dividend that Mike talked about was looking at dividend policy next year. I just want to reiterate that we think that our shareholders want us to be a profitable company that continues to grow as we've done successfully through our 11 years so far. So we hope that one day – we aspire to be a company that is still a growth company and as Mike said we'll start to look at that as we get into 2019. A part of it will be dependent upon cash flow, of course, and therefore, that will partly be dependent upon the gold price. But we see ourselves as wanting to be able to do both, aspire to get to the point where we continue to grow, which we do well, but also get to a point where we can do both, grow and pay a dividend to our shareholders as well. So with that, I will think we'll open it up to questions.

[Operator Instructions] Your first question comes from Lawson Winder from Bank of America Merrill Lynch. Your line is open.

Hi, guys. Congratulations on really great quarter. Just wanted to maybe start with Fekola, you mentioned that the mine was – you were mining 20% above budget. I was just curious, is that being driven just by the softer rock that you're experiencing? Or is there something else to that?

I'll take that one for sure, it's that – because it was in the press release, but in discussion this morning, would state – they actually chastised me a little bit. Certainly – and obviously, we're in the honeymoon phase of our equipment, our brand-new equipment. Well, with that being said, we're seeing much higher productivities than we anticipated, certainly much higher availability. The fact is we're not that deep in the pit, and you do have – we're in the upper zone, for sure. So we do think the COGS are going to come up a little bit. We don't think that they're going to approach what the feasibility costs were.

That’s in 2018 or you talking 2019, 2020 as well when you're looking out and saying that you don't think you'll approach those feasibility costs?

Going board as well.

Okay, that’s great. And then are you able to share with us just what you were cost was – your mining cost per total tonne moved was at Fekola for Q2?

10 per sure.

Let me just roll it up here, so I get the right number. So for the current period, our cost per rock tonne mined was USD 1.34.

$1.34, and then just one more sort of follow-up then on that cost. So it actually did come up a little bit versus Q1, just on a cost per tonne milled basis. Is that just the evolution of the pit as you do – actually do go a little bit lower?

What was your question, on the mine side or on the processing side?

Just total costs, so you just take the cash operating cost and convert that on a per tonne – to a per tonne processed basis. It changes…

Maybe someone else can chime in after I answer if they have a different answer. But the way I see it is, remember, we're still only in our second quarter of production, and so we still are testing some things, as you can see, like the mill cost is still kind of moving around a little bit as we look at reagent consumption and optimization. The mining costs for the year, it's kind of stuck right there at the USD 1.35 to USD 1.34 per tonne. So in general, it's actually down a little bit for the – up for the half year, but down for the quarter. So we continue to just optimize. So I think we're still in Q2 and it's still too early to say where it's going to settle in kind of steady state.

And move over under budget.

And move up under budget.

Yes. No, it’s definitely – great, absolutely amazing quarter for Fekola. And then just one last one from me on Libertad, so with Jabali Antenna open pit now not included in the guidance, will, like, the tonnes processed and the grade be materially different from what you originally guided to? So originally, back in early 2018, you'd said 2.3 million tonnes at around $1.75, I believe. Is that still in line, or is that…?

Well, Lawson, recall in our stated guidance, we dropped our ounce production forecast by 5,000 ounces. And in the interim developed our sources, basically remixed our existing mine sources, which will be heavily underground late in the third quarter, San Juan, San Diego and [indiscernible].

Okay, gotcha. Okay, that’s great. Thanks a lot guys.

Your next question comes from Mick Sroba with Macquarie. Your line is open.

Good morning, Clive and team. A couple of questions on my end, just at Fekola, do you foresee a decrease in recoveries from that 95% range as more fresh material is processed?

I'll answer John, then you can correct me if I'm wrong, as we've talked about a little bit.

Yes, go ahead.

So the 95%, one thing – we're still – we still haven't tested all the types of rocks. What we can say, and I think we said it in the press release, is we do believe we're going to be above the 92.7%. And so all, right now, we're bracketing between that kind of 95.3% and 92.7%. We think it's going to be somewhere between there. We don't think it's going to be ultimately 95.3%, or we can't say that yet. We don't have enough information. So we think it's definitely higher than 92.7%. John?

Yes, I agree with that, Bill. We'll exceed feasibility study recovery, but still too early to make a projection on where the recoveries will settle in for the future.

Okay. Thanks for that. And on the processing side of things, you said that it has been shifting around, the processing cost per tonne. Are you able to provide us with an indicative budgeted processing cost you're shooting for in 2018?

Yes. I don't have those costs in front of me, but we've been below budget and we expect to continue below budget for the remainder of the year. I believe we're averaging about $14 to $15 a tonne. Yes, go ahead.

Yes, I'm just showing John, I've got some of the tables here from the variance report. As he said, we're kind of between $14 and $15 and we had $70 in the budget for 2018. So we are going to below significantly below budget.

We're well below budget. And those of $17 a tonne costs, those were feasibility projected operating costs for process.

Okay. Excellent. Thanks for that. And finally, we didn't see any mention of Anaconda, Adder or Mamba. Is there any reason for lack of disclosure on the Fekola satellite deposits?

Tom, do want to take a wag at that?

[Indiscernible] but I think our disclosure's consistent with what's there. If you look back at what we said, probably…

I can answer. In terms of just the Anaconda area, it's not a question of not being something we're interested in, it's just that we're looking at expanding the Fekola Pit by, could be up to a kilometer, maybe even a bit more. Why would we not focus on that right now? And that's really what we're doing.

We are doing some internal test work on Anaconda, where we are trying – we are advancing some things there with internal studies and things of that nature. So we are working on it. And Tom, we are drilling it as well. Proper drilling there as well.

You're still drilling at Anaconda?

Yes. We still have a rig working on Anaconda. It's slowing down a bit with rainy season. But yes, we well be there in the back half of the year.

Okay. Great, thanks for that. That’s it for me.

Yes. Just one coming from Mike. If you want some more detail on that, if you look at Page 24 of the MD&A discussion about what we're currently doing there.

He's still on the call.

Okay. Thanks.

Your next question comes from the line of Matthew Macphail with Canaccord Genuity. Your line is open.

Hi, guys. Thanks for taking my question and congrats again on the awesome quarter. Just talking about the Fekola group that you're seeing, you're comfortable with the 10% increase, long term, over the current nameplate. Just to confirm, that's with no incremental capital, correct? That's just based on the kind of experience you've had with the different work sites?

That is 100% correct. If you remember, the feasibility was designed at – we went at 4 million tonnes per annum. During construction, due to exploration success and the success we're having with the construction process we want to add expanded $5 million. They’ve now tested it. We feel very comfortable that we could accept the minimum that we can run at over the course of years $5.5 million.

Okay. And is that $5.5 million, is that – seems to me that's a little bit conservative. Would you think – do you think you can go a little bit higher than that? Or is that aggressive or conservative, what do you think?

That is exactly what we're testing right now.

Okay.

I’ll just add, yes, we have a grinding study and progress. We just completed sampling and data collection program in July. And then that will feed into the grinding study, which will be completed in about mid-September. So at that time, we'll know a lot more about our expansion potential, then.

Okay. Great. And then just a follow-up on that. Someone may – it have been brought up previously, but the – you were saying that recoveries, you're looking at sustainably, about above 95%. Are you comfortable with that number, even at the higher throughput, the 5.5 million?

Well, what we said actually was that, although we announced 95.3%, whatever it was for this quarter, the feasibility at 92.7%, and we think it's going to fall somewhere in between there. And we're still doing the studies.

Okay. All right. That’s thanks for the clarification. Those are all the question I have. Thanks guys.

Your next question comes from Chris Thompson with PI Financial. Your line is open.

Good morning, guys. Congratulations on a fantastic quarter. Two quick questions. One on Masbate. Obviously, you explained that performance was very much on the back of high grade on the backfill ore from Colorado. Can you give us a sense of what the second half of this year looks like as you, I guess, prepare to enjoy the merits of the expanded mill?

Hi Chris. What we see really is the continuance of the performance through July and August timeframe and then we'll track closer to our budget forecast as we complete Colorado Pit, which we anticipate doing in August. So we'll track close to budget for the remainder of the year, for September through the end of the year, with declining recoveries as we reduce the off-site content. Third quarter, 30%; final quarter of the year, closer to 5% to 10% offsite. And Chris, it almost sounded like you said something that you thought that the expansion would impact this year, but that only comes on next year.

Okay. Perfect. Thanks. And just the final question from me, just Otjikoto. Again, I guess, an asset in transition, high strip for this year. But looking at the grades, do we expect to see grades sort of improve towards the end of the year here, head grade?

Maybe the geologist can answer that, but the answer is we kind of track right on budget there. So we would – at the halfway point, we're kind of at exactly the halfway of where we thought we would be for the year. So I don't think they're going to change that much different. As you know, this year, we're primarily in Otjikoto, except for a very little bit at very end of the year. And then of course Wolfshag comes in for 2019. And we're currently looking at the resource model there and seeing if there's any change needed to occur there and what that means for 2019.

All right, guys. That’s it for me. Congratulations.

Your next question comes from Steven Butler with GMP Securities. Your line is open.

Thanks operator. Mike, question for you or two. On the Fekola, the extra 10% that will go the government's way, I know they're waiting. That process is, I guess, you say imminent here. So we'll wait for that at some point. What is the level of the intercompany loans right now that exist at Fekola? And the interest rate that you deem on those loans?

Well, we deal with the interest rate point first. Those loans, there's a West African sort group estates rate, which I think is currently 4.5%, and then the loans themselves carrying additional incremental 2%. So we're kind of looking at 6.5% on the loan. So that is the rate. And then the loans bounce around. Obviously, we're repaying them back now as we generate cash flow. But probably – the number you probably want to work off is what do they peak out at in terms of just when construction was complete and we went into operation. And you're looking somewhere around $700 million. Because remember, the word historical loans in the local entity, so US$700 million is roughly the number you should work off.

Okay. And Mike, will that flow through the income tax line as well or separately?

No that will be a separate line item. Now remember, as well, as we have disclosed before, we haven't disclosed the final agreement yet because we're waiting for the ratification, which, as you rightly say, we think is imminent. But when that does happen, any amount that the state is going to pay us for that second 10%, post-construction cost volume, we're going to – that's going to be set up in the form of a loan, and we're going to receive those loan repayments until that loan, plus interest, is repaid. So that's what you'll see on the – that's how it will be reflected in the financials. It will be loan payable to us by the state of Mali for their purchase price. And you'll see that loan reduce over time as that dividend is paid.

Okay. I got it. And then Mike, what’s your hedging level of oil price on your hedges sit at roughly?

You mean, what do we actually – you mean the levels, the volumes, et cetera?

Yes.

I think that’s [indiscernible]. I think if you look at Note 11 for the financials, and we've laid it out in there for you, the volumes and the strike prices.

Okay. Got it. We will look for that. And then lastly, Mike, maybe you could clarify a bit. I saw on the financial statements, of course, in the cash flow statement that a fairly large $14-odd million for interest and commitment fees on your debt as an additional, if you will, interest-related expense. But maybe you could elaborate a bit more on that. $14 million there, plus the extra $8.5 million on the income statement is hefty level of total interest and commitment fees. Maybe you could just elaborate a bit more.

No. You've got to remember that's been the way we show it on the cash flow is we show all interest payments as part of financing activities. As you know, companies either decide they show it all as operating or financing. So we show it as financing. So the $8.5 million you see on the income statement actually gets added back up top. So you're not looking at a combination, you're looking at a total of $14 million. And those reflect fees on the revolver and on the convert. And there had some lease interest, but the main ones were the revolver and the convert. And you got to remember as well, when you compare like-for-like on the income statement, that last year, we were capitalizing interest as part of Fekola's construction cost, which we no longer are.

So on the operating activities, adjustments up above, it's under, I guess, you said non-cash charges. It wasn't very clear to me as to where it might have been taken out of the operating activity line above…?

Yes, if we go look in Note 14, you'll see it that stack, yes.

Okay. Got a look little deeper. Okay, thanks guys.

Your next question comes from [indiscernible] from Global Mining Research. Your line is open.

Thank you. Hi, Clive and team. Thanks for taking the question. Just one quick follow-up on Fekola, did you say you're already at 5.5 million tonnes per year? Or are the grinding studies looking to get you there?

We said absolutely that we are at 5.5 million and comfortable saying we can sustain that over all rock types.

Okay, thank you. That’s all for me.

Your next question comes from Don Demarco with National Bank Financial. Your line is open.

Hi, there. Thanks for taking my call. I guess the last question just to build on that. Regarding the 5.5 million, like I see in Q2, you're running at around 5.3 million annual run rate, so given the fact you're comfortable at 5.5 million, does that suggest that we might see a quarter-over-quarter increase in throughput in Q3?

I believe the answer is, yes.

Okay. And I was looking at the grades, the technical report calls for grades at Fekola to edge a little bit higher, I think it's like 3.2 grams per tonne in the second year of operation, that's the mill grade. Is that still reasonable assumption to make?

Yes. What you have to remember is we did a little bit different than the feasibility. We actually started mining in March of last year, so we have this very large stockpile that we've accumulated, like 3.7 million tonnes or something like that. And so we're actually being very selective right now in what we're actually mining – or managing our mill throughput as far as what we're actually putting into the mill. So we have a kind of an interesting scenario, where we're trying to blend this out over the next couple of years, what our ounce production will be. So the answer is yes, we could run 3.2 million. We may run higher this year. We may run higher next year. We’re still looking at what that looks like.

Okay. That’s all for me. Thanks a lot guys.

Your next question comes from Dan Rollins with RBC Capital Markets. Your line is open.

Yes, just a question regarding the potential upcoming expansion at Fekola. Just given the fact that the throughput is running well above design capacity, your unit costs are trending well below expectations, any thoughts of potentially dropping the cut-off grade when you move to reserves, given the improved economics of the ore body?

We’re looking at it, yes.

And impacts, trade-off on grade, any thoughts? Or this is really just more ounces of the same cost structure and just more free cash flow to you?

It’s too early to tell.

Okay. And then if we looked at one of the challenges we have in the gold sector versus other copper, other mines, is the sustainability of production. Are you looking sort of a 10-year mine life with the expansion? Or are you thinking maybe pushes it out to 15? Give yourself a 15-year cash flow – for Fekola, and then take the risk of having to chase 400, 500 plus ounces of production to replace every year.

Yes. I'm sure Clive wants to answer that one, but from an operational standpoint is, well, it's the total we're looking at it, right? That's what this expansion study does. We don't have a final resource yet, and we certainly don't know what our throughput's going to be.

Perfect.

Let me just add to that. I'll just add to that that we're going to obviously look at what the best economics are and taking what's in the best interest of our shareholders there. So the first step is in the resource, how much bigger this could get. So you'll – in our view, this looks like will have a significantly longer mine life than the current, the 10-year mine life that we started with [indiscernible]. So the question will be do we want to expand, add just more gold or do we want to have a longer mine life. And you're right. Those are always a challenge in our sector, which we'll be looking at that. By the end of the year, we'll have not only the new resource. We'll have ideas about what expansion looks like, if it does make sense and what mine life to [indiscernible]. Don't forget, we have the stakes to the north. Its early days, but we're starting to see under the saprolite-blended material we’re starting to see some good hits, early on, but good hits in the bedrock sulfides below, which is what we're looking for, and that with Fekola potential. So there's a five kilometers by kilometers drilled there of saprolite material, so we'll be looking to develop that as we go forward this year and into next.

Thanks for the color. End of Q&A

There are no further questions queued up at this time. I’ll turn the call back over to Clive Johnson.

Okay, thanks everyone. Thanks for your interest and your good questions. We'll keep you posted, and follow up with me if you have any other questions that we weren't able to or we didn't answer on the call. Thanks for your time.

This concludes today’s conference call. You may now disconnect.