B2Gold Corp. (TSX:BTO) has released a revised life-of-mine plan for its Goose project in Nunavut, Canada, confirming its previous timeline and cost projections but reducing its high-confidence resource estimate. The update, which reflects a stricter resource model, led to a nearly 10% drop in B2Gold’s stock price this week.

The Goose project is B2Gold’s first development in the Back River gold district, an 80-kilometer belt containing 11 mineral claim blocks. The company expects to pour its first gold from the site in the second quarter of 2025, with commercial production ramping up in the following quarter.

According to the newly released technical report, the Goose project contains 11.3 million tonnes of gold reserves with an average grade of 6.82 grams per tonne (g/t), amounting to a total of 2.48 million ounces. This reserve base is projected to support nine years of continuous gold production, with an annual output of approximately 270,000 ounces. Production is expected to peak at 300,000 ounces per year between 2026 and 2031.

The updated mine plan maintains the project’s estimated construction and development cost at C$1.54 billion (US$1.08 billion), the same figure B2Gold reported in fall 2024. However, operating costs are now projected to be higher than originally anticipated. The new all-in sustaining cost (AISC) estimate is $1,547 per ounce, up from the previous estimate of $1,363 per ounce.

Impact of Stricter Resource Model

B2Gold’s updated technical report includes a more conservative approach to resource estimation, leading to a reclassification of some indicated mineral resources into the inferred category. As a result, the project now holds 3.56 million ounces of indicated resources and 2.44 million ounces of inferred resources.

BMO Capital Markets issued a note on Friday stating that the stricter resource model had a “slight negative impact” on the Goose project’s overall estimates. Following the report, B2Gold’s stock price declined 9.5% by midday, trading at C$4.11 per share, with a market capitalization of C$5.4 billion. The company’s 52-week high stood at C$4.84, while its low was C$3.16.

Despite this adjustment, BMO maintained its “outperform” rating for B2Gold but lowered its price target to C$6.50, reflecting the updated resource estimates and increased costs.

B2Gold’s Response and Future Resource Expansion Plans

B2Gold addressed the changes in a press release, stating that it remains “highly confident” in its ability to convert a significant portion of the inferred resources into indicated resources through additional in-fill drilling. The company pointed to its historical success in upgrading resource classifications across its operations, noting that it has previously converted more than 75% of inferred resources to indicated status.

The updated mine plan currently includes open-pit mining at the Echo, Umwelt, Llama, and Goose deposits, as well as underground mining at Umwelt. B2Gold believes that additional drilling could lead to resource upgrades for the Echo, Llama, and Goose underground deposits, which were considered in previous mine plans but are not yet included in the current reserve estimate.

Potential Production Enhancements

With the first gold production at Goose expected within the next three months, B2Gold has initiated multiple studies to optimize operations and enhance production efficiency.

One potential improvement under evaluation is the addition of a semi-autogenous grinding (SAG) mill, which would increase the mill’s throughput from 4,000 tonnes per day to 6,000 tonnes per day. The company is also exploring ways to exceed its planned production from the Umwelt underground deposit, which is expected to begin high-grade stope ore production in the third quarter of 2025. Potential optimizations include the development of additional active production levels and alternative mining methods to reduce costs.

Additionally, B2Gold is reviewing the feasibility of modifying its approach to the Goose project’s winter ice road. The company is assessing whether the road could be constructed and operated on a less-than-annual basis, which could impact logistics and cost efficiency.

Exploration and Growth Opportunities

Beyond the current mine plan, B2Gold is continuing exploration efforts to expand the resource base at Goose. The company has outlined a 12,000-meter drilling program targeting extensions of the Llama and Umwelt deposits, which are among the largest and highest-grade resources in the area.

Other high-priority targets include Nuvuyak, Mammoth, and Hook, which were identified during the 2023-24 exploration campaign. B2Gold plans to follow up on these targets in the coming months to evaluate their potential contribution to the Goose project’s resource base.

The above references an opinion and is for information purposes only. It is not intended to be investment advice. Seek a licensed professional for investment advice. The author is not an insider or shareholder of any of the companies mentioned above.

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