B2Gold Corp (BTG) 2022 Q4 法說會逐字稿

I would to welcome everyone to the B2Gold Fourth Quarter and Full Year Conference call (Operator Instructions) Please be advised that today's conference is being recorded.

I would now like to hand the conference over to your speaker, Mr. Clive Johnson, President, CEO & Director. You may begin your conference, sir.

Thanks, Sharon. Welcome, everyone. to (inaudible). As the operator said, we're here to discuss the year-end financial results for 2022. We had a very good year again and achieved our production and consolidated cost guidance and have been in a very strong financial position for the year and we also declared [our] another dividend of $0.04 a share for the quarter.

I'm going to pass it over to Mike Cinnamond now, the CFO, who's going to walk you through the highlights of the financial results. I think our presentation(inaudible) is quite extensive and other disclosure material. Like [we can](inaudible) -- highlights and then we can answer your questions. We've done a lot of marketing in the last couple of weeks since the announcement of the Sabina deal, and we can answer or update you a little bit on that and answer some questions after we finish discussing the financial results.

So with that, over to you, Mike.

Thanks, Clive. So I'll start with the quarter and then comment a little bit on the full year results. So for the quarter, I think the story for Q4 is that our operations came through and delivered on the sort of forecast that we were going to have a big Q4. I think if you may recall, by the end of Q3, we were close to budget, but we -- there were some delays in production at both Fekola because of water in the pit that was dewatered and then resolved at the start of the fourth quarter, and then some delays in Otjikoto just with accessing the Wolfshag underground. So that led to a big forecast Q4 to catch up on some of the high grade that we weren't able to mine in Q3 as we scheduled.

So good news is we delivered on it. In terms of results, that delivered -- gold revenues were $592 million. So that was based on the sale of 339,000 ounces. It's a bit higher than we budgeted to sell, and that's really a function of how high the production was.

So if you look at production for the Q, from our 3 operating mines, 353,000 ounces, 35,000 ounces higher than budget, and it's a quarterly record for our operations. And if you include our share of Calibre results, we had 368,000 ounces, which is almost 40,000 ounces higher than budget. The leader in that outperformance was Fekola, 244,000 ounces in the quarter, 37,000 ounces higher than budget quarterly (inaudible) record.

And like I said, it came mainly from processing the higher-grade material out of Phase 6 at the Fekola Pit that we -- some of which we can't processed in Q3. At our Fekola pit, we continued to outperform all around. The processing facilities are still putting more material through than, I guess, the name plate and the mill feed grade was higher. So positive on all aspects of gold production. This value is [49,000 ounces]. It's pretty much right on budget. There were slightly lower gold recoveries during the quarter due to the nature of the higher ratio of sulfide and transitional ore versus budget, but that was offset by higher-than-expected feed grade. So came in right on budget.

Otjikoto, (inaudible) 60,000 ounces, a little below budget, and that's really just a function of the timing to get in the Wolfshag underground. We got into the Wolfshag underground, started producing ore there and gold there a little later in Q4. So that's running well now, but we're slightly under budget in the Q.

Out of that factor into the operating results for the consolidated cash costs from all operations, including our share of Calibre $468 per ounce, very close to budget overall. Fekola was pretty much in line with budget. It had slightly higher costs, but also record production. So it came in on budget. Masbate was a bit higher. Masbate cash cost for the Q, $872 versus a budget of $752. And that's -- production was online. So it's really just a factor of inflation-driven higher costs, almost -- not almost exclusively, but mainly driven by fuel costs, which were higher for Masbate in the period.

And Otjikoto was $465 an asset, which is $46 below budget. And that's really just a function of the timing of getting into the underground that were lower underground mining cost because we're a little later getting into that than originally forecast. Put that all together, we pretty much came in online with budget for the Q on the cash cost side.

On the all-in and sustaining cost side, the total all-in sustaining costs sustained (inaudible) including Otjikoto and Calibre, $890 an ounce. That's about $130 an ounce higher than budget. And that's a function of broadly in line cash costs, as I described, but impacted by higher royalties due to higher gold price. And also, the main factor influencing it was the catch-up of budgeted sustaining CapEx.

So as we reported to the end of Q3, some of the CapEx since it was originally scheduled for earlier in the year, was forecast to be caught up in Q4. And overall, we did catch up in the Q. So that's why, for the quarter, we get higher than budgeted all-in sustaining costs.

When you put everything together on the cost side, -- well, firstly, on the production side, just to comment, -- including our share of Calibre, we came in at 128,000 ounces, slightly above the upper half of or slightly above the midpoint of our guidance range, consolidated at 990,000 to 105,000 ounces. So good news right in the range in the upper half of it.

Individually, Fekola came in, 599,000 ounces. I couldn't quite get it to that 600,000. We'll have to talk to Bill with that later. That was right at the top end of its annual guidance range of 570,000 to 600,000 ounces. Masbate came in 213,000 ounces, slightly below the revised guidance range we had of 215,000 to 225,000. But remember, it was at the upper end of our original guidance range of 205,000 to 215,000 ounces. In Otjikoto, 162,000 ounces, slightly below our revised guidance range of 165,000 to 175,000 and that again was just a function of the timing of getting into the Wolfshag underground material and the ramp-up of operations there.

But overall, very pleased that we came in above the midpoint of our guidance range for the year. On the cash cost, all-in sustaining cost side, as guided, I think we came in for the cash costs, consolidated from all ops including Calibre, $660 per ounce. So right at the top end of our original guidance range of $620 to $660. So I'd stress that, that was the original guidance range we didn't reguide on the cash cost overall consolidated basis. So we're pleased that even in a period of higher inflation, higher costs and definitely higher fuel costs, all mining companies have seen. We still managed to come in at the upper end of our original range.

And similar story for your all-in sustaining cost side, there, we came in consolidate all operations, including Calibre, $1,033 an ounce, so pretty much within the range of $1,010 to $1,050 per ounce. And what we saw there was cash costs at the higher end of the range, good solid production and then the benefit of some offsets on fuel derivatives that allowed us to come in overall within the all-in sustaining cost range. So the operating results, we're pleased to be able to report that we had our guidance basically on all measures. So that was good. A few comments on the operations overall.

First of all, I'd like to just throw out there how we're going to be describing, reporting the results from our Malian operations. So there'll be the Fekola mine, so we'll report that separately. That will be Fekola mine, which is everything from the Medinandi permit, which includes Fekola pit right now in Cardinal. And then we're going to separately -- Fekola Regional. And that Fekola Regional will be the production from all other licenses. So Bantako, Menankoto, Bakolobi, and Dandoko. And collectively, we're calling the Fekola mine, and Fekola Regional, the Fekola Complex. So if you get confused about the different pieces, that's the way it's going to go. So I just wanted to throw that out there for you.

So if you get confused about the different pieces, that's the way it's going to go. So I just wanted to throw that out there for you. At Fekola, you've seen our budget. We put a budget out earlier in January. And you can see that we're already in Phase 1 of Fekola Regional Development, which is developing the infrastructure and the roads and some of the facilities so that we can start trucking material from the first of those Fekola Regional licenses, in this case, Bantako, later in 2023. So that's ongoing.

Then you'll seen our recently announced, Sabina acquisition. So what we're going to do is, in addition to Fekola Regional Phase 1, it will be Fekola Regional Phase 2. Fekola Regional Phase 2 will be a report that we think will be up by midyear, where we're doing a study to see if it makes sense, which we think it does, to build a second mill somewhere in those other licenses, probably in the Menankoto license. And that mill would process saprolite oxide material, which we have in abundance in those other licenses.

So our goal with Fekola Phase 1 to continue as we have now in the budget, then to be able to absorb the continued construction of the Goose project with the Sabina acquisition, with the goal of bringing that online by the first quarter of 2025. And then once we have this Fekola Phase 2 study, the regional study for that second mill and if we decide it's a go decision and to schedule that around making sure that we get the Goose project completed and up and running by the first quarter of 25. So you'll see us move into that second Phase 2 Fekola construction a bit later in the process.

And Bill, I think, can talk a bit more about the overall scheduling and timing.

A couple of other comments, Gramalote. Gramalote project, as we announced before, we decided jointly with our partners, AGA, to begin a sales process on Gramalote. And so that process has been started, so it's underway. And so, we'll provide updates on that in due course. Then really just to comment on a couple of other things in the results. So net income for the period attributable to shareholders company $157 million or $0.15 per share EPS. Adjusted EPS was $0.11 a share based on adjusted net income of $121 million.

And for the full year, earnings attributable to shareholders of the company, $253 million or $0.24 per share EPS and adjusted EPS of $0.25 per share based on adjusted net income of $264 million. And I just comment on the cash flows. For the 3 months, you see it was a big cash flow generator for us because of the weighting of that higher grade and the production that we have. So cash flows from operations, $270 million for the Q, was $0.25 per share. And then for the year, cash flow from operations, just under $600 million, $596 million or $0.56 per share. So we're pleased with that result.

On the -- or on the financing side, if you look for the year, $170 million outflow for dividends. So we're maintaining that dividend of USD 0.40 per share per quarter or $0.16 per share annualized. And why I would comment on it at this point on the dividend, it's our intention -- even as we absorb the CapEx requirements for Fekola Regional Phase 1, completing Goose, with the Sabina acquisition, the construction there and then Fekola Phase 2. It's our intent to keep paying dividend at the current rate of gold prices stay where we are to keep, maintain our current dividend rate and work our way around those CapEx needs.

Looking at investing activities for the year, $389 million, pretty close to budget overall on the operating sustaining side. We found that although there was a big catch-up of sustaining CapEx in Q4. Overall, for the year, we came pretty close to budget. We finished the year, $651 million in the bank. We have -- we're pretty much debt free. We have some outstanding project, our equipment loans and leases and some office leases, but we're pretty much debt -free overall. So we've got $600 million undrawn on our line of credit. We've got another $200 million available with an accordion (inaudible) feature, that's $800 million available on that line.

And so if you combine that with the $651 million of cash we finished the year with, we've got total liquidity at the balance sheet date of somewhere between $1.4 billion and $1.5 billion. So it's that kind of liquidity. We've got great syndicated banks that we deal with. Then we've got a great partner with Caterpillar that's been involved in all of our projects in the last few years, and lots of tools in the toolbox to be able to see our way through funding those major CapEx items that I mentioned, Fekola Regional Phase 1, Sabina acquisition getting that completed and getting the Goose project built on time as scheduled by the first quarter of '25 and then we also funding Fekola Regional Phase 2.

So I think we're in great shape overall cash flow-wise. And like I said, to also maintain that dividend at the current rates. So I think those are the main items I was going to focus on or comment on as part of the overall results.

So with that, I'll hand it back to Clive.

Thanks, Mike. Obviously, we're very pleased with those results. I'm going to(inaudible) talk a little bit about the Sabina acquisition, I think everyone is aware of it. Now this was just a primary all-share offer to Sabina was represented at the time of signing the deal was a 45% premium to the Sabina share price at the time. And we're very pleased with the market response we received so far. Both sets of shareholders, and B2Gold and also Sabina shareholders (inaudible) responded very well to this deal still. And we do think it's a win-win deal, which is what we've done and accomplished in many of our transactions in the past where we can bring our set to [bear] to our next project.

Sabina represents -- we do some a very high-grade fully permitted projects, with very attractive economics, very attractive exploration upside. We're also ready to go with an excel team. I think that we continue to be very impressed with the work that was done by Sabina, and their close relationship with the work they've been doing with our partner and the line owner in the back river region. We look very (inaudible) working with both Sabina and our Indian partners in terms of what they've already built on, which is a great platform to launch this project. It's into construction already. We've talked about that a lot on our conference calls before. And so, the research has picked up on that, but we're comfortable with the schedule. We're comfortable with the projected capital cost, and it's going to be a team effort working to work with our well-regarded very successful construction exploration development production teams, working with this strong team at Sabina that has obviously (inaudible) done a very good job of getting the project to -- in construction at this point.

The deal itself to us was a very accretive deal and we had the opportunity -- we were trading at 1x now, when they were trading at 24x net asset value. So we were able to pay a significant premium, yet stay within our parameters of an accretive deal. I want to just talk a little bit about that because I think that there's been a lot of criticism for what are considered to be large premiums.

In the deals such as this, at the end of the day, we don't get to return or assessment premiums were about value. So this project, we assess the value that we were prepared to offer to the shareholders of CAD 1.1 billion of our shares. As I said, that represents a significant premium to the deal.

But the fact of the matter is the premium was significant because of the fact of where there's stocked trading and obviously very difficult -- the gold market generally isn't great right now, but it's also particularly difficult for single-asset development companies or exploration companies. So we were able to offer what we think was a fair value, a good deal for the shareholders of Sabina, and also stay with our progress on what is an accretive deal to us. So the market response so far suggests that the market seems to understand that. And as I said, there's good widespread approval for the deal.

I'm going to pass it over to Ran Chatwin right now just to talk a little bit about the timing of the deal from that perspective.

Thanks, Clive. As you know, we signed the deal last week. The parties are working hard towards a schedule and it currently looks like we were going to do Sabina shareholder meeting middle of April. The interim court hearing would be just prior to that time. Working backwards from there, that would be the circular going out probably around the middle of March. And that would get us to a completion date about the third week of April. So I expect on the ordinary course, with decent planned of (inaudible) arrangements, we would be done by the end of April, for sure.

And in the meantime, we've got lots of conversation with Bruce. And then we have -- we're very much on the same page. B2Gold, which is maintaining the schedule that there are on now, not a lot of important things are coming up now with the winter road and all those initiatives. So the idea for both sides is to maintain the schedule and do the work required as we move to close this deal, to make sure that Bruce and his team are continuing on with the development they are doing and wherever we can do to support and help.

This is also a great exploration opportunity, I think we would say as well as this project has a tremendous potential in the Black River district, very large property and some excellent geology and excellent drill results suggesting that normally it's Goose open down plunge, but there's another (inaudible) nearby so called [George], which has a significant resource so far. I think our 70,000 ounces is very much open.

But also our geologists are really lined up, as I know Bruce's team feels the same way when you think about the potential of this whole district. There's been some bigger tools (inaudible) quite a long distance away from Goose and various I said have not had extensive drilling. So one of the things that we do bring to the party is that our approach to exploration and our ability to fund exploration. So as part of our plan, we would be able to crank up exploration starting as soon as we can, to test not only the down potential of Goose and George, probably the second, but also all these other targets.

So understandably, we've been -- we've been where Bruce has been [forward] for in our careers. You're trying to get a mine finance build on a difficult circumstance. So your focus is obvious on everything you can do to continue to advance the project, and they've done a great job with that. Exploration is still the high -- on a high priority list to spend at that stage. So I think that's a real advantage. And of course, as Sabina shows, as the deal closes and we're getting our shares, we'll get to -- we'll see the benefits of B2Gold shares of this project as we work together to make it a great mine, the exploration upside.

Also, of course, this industry-leading dividend that we're paying will also, shows us (inaudible) just to become shareholders. So strategically, this is a very good fit. -- We believe a very good fit for B2Gold going forward. But you would like to talk about our plans to expand Fekola, the potential there in 2 stages, work is underway. [Truck selective] (inaudible) on the next stage that we just reported in June is positive, which we expect it will be, will be improved the second mill on the north, and could be somewhere in $250 million, $300 million of capital investment for that.

But the potential there between those 2 phases would be to add a 2000 ounces of gold production. Fekola, which would take us 800,000 ounce a year level at what we continue to expect to be low-cost production. So that's a great asset and, a is far from over in terms of the amount of exploration we're continuing to do now, not only separate but we had spectacular recent results deeper in the sulfide, particularly in the Mamba zone to the north. So that fits in very well strategically and this river, the (inaudible) rather, is the potential, as we've seen in disclosure to produce 300,000 ounce of gold a year starting and currently scheduled for the first quarter of 2025.

So if you put those 2 together, there's 0.5 million ounces of production -- annual production growth in the not-too-distant future here. With pre-existing assets as the deal closes for Otjikoto, (inaudible). That's a great growth profile, plus all the exploration and other things that we're doing. We're very focused on that, as we've always been when we acquired project. And in this case, you won't see us doing any significant mergers and acquisitions for the foreseeable future. And we really like the growth profile. Obviously, this is some geographical diversification for us as well, which we were keen on and I know our shareholders were as well.

So this is part of the strategy that's been going on for 12, 13 years now, accretive acquisitions with good exploration upside, building the mines with very good construction work to be done. And in this case, a conjunction with the Sabina team. And it gets right in our wheelhouse with our northern experience as well, of course, with 2 projects from [Bema days] (inaudible) in the North of Russia and a lot of the construction team, some of the key members that are available to assist them going forward. So strategically, it's a very good fit in our strategy going forward to be, to maintain our extraordinary financial strength, which allows us to do this too frankly and to --the (inaudible) for the company, but be very focused on the assets we have in- house. And as I said, the growth profile to us looks very exciting. We're very pleased with this new opportunity.

And with that, I think will open the questions.

(Operator Instructions) Today's first question will come from the line of Ovais Habib with Scotiabank.

Congrats Clive and B2 team on ending 2022 on a strong note. Clive, just a couple of questions from me. Starting off with the Fekola complex. In the press release and I think Mike Cinnamond has also talked about the company is expecting the construction timeline for Fekola Regional stand-alone oxide mill will be scheduled, to allow for completion of the project in, I guess, Q1 of 2025. So am I thinking of this correctly that Anaconda stand-alone mill construction then would commence in early 2025? And does Fekola complex production still achieve 800,000 ounces in 2026?

Yes. I think I'll pass it over to Bill to respond to that. But before I do, that was in my notes, but I missed one of the things I want to be really emphasize, because I think there's been -- some people have missed it. We're not going to try and build 2 significant mills at the same time. We never have in our history. We're not going to start now. That's part of the focus that we talked about. So the way the schedule looks out and Bill can respond. The whole idea is to schedule this in so we can do both, and we can be very focused on both phases of expansion of Fekola but in between those spaces, the construction at Goose.

I think it's important really to understand where we're at in the permitting schedule for all this stuff. So if you think about the Anaconda Phase 1, that's been permitted, that's in construction. We see that coming online really in Q3 of this year. So let's assume that, that one happens. We just took the executive out there and everyone was quite impressed with where we're at. So that one's stop. We think that one is a given.

Now you've got the Back River project, which is fully permitted, all of their equipment is coming to site. And basically, a lot of the foundational work, the groundwork has already been done. So when the [ice road] (inaudible) opens up here, they'll start dragging material down the road, and they're going to start doing rebar, concrete work, all the stuff, try and get the mill weathered in this year. So that basically -- they're quite a bit ahead of where Anaconda's at.

So you can imagine a scenario where we stand up and at the mills or stand up the buildings with all the concrete and rebar and steel. That then -- that's what happens in '23. Now in '24, they'll be building -- they'll be installing the mills and everything into the buildings for Q1 2025 commissioning. So you can imagine at the Phase 2 Anaconda's stop, what we're proposing is that there will be a study completed in -- at the end of Q2, which is on schedule. That will allow us really to kind of sequence what happens after -- in 2024. So you could see that the rebar people, the concrete people, they're going to be available in 2024. So I don't say that we're going to move away from it and that it won't happen at '26. You could see a path where those guys could get into the Anaconda regional mill in 2024 and 2025, a 2-year mill and hit the schedule right at 2026.

So you'd see '23 Phase 1 coming on, 25 Q1, Back River coming on '26 between -- sometime between '26 and '27, still yet to be defined because the study is not out yet, but the Phase 2 Anaconda mill coming on. That's how we see it.

And just my second question just relates to that Fekola complex study that you just talked about, that's expected in Q2. Will the study specifically look at the stand-alone mill at Anaconda only or this includes Fekola underground as well and then kind of general optimization of the Fekola complex?

Right. So we were just talking about it this morning, the Anaconda -- the Phase 2 study really looks at the Anaconda mill as part of the overall complex. It doesn't include the underground stuff for sure, because that's within the Fekola complex. But we are looking at additional sources of saprolite, right? Do you bring in Dandoko? What happens with Bakolobi? All that stuff, we're starting to figure out, where it all goes. So it really is a regional look. And of course, there is the 0 alternative where you wouldn't do it. We don't see that as real, but that is part of the study.

And just my last question, just switching gears to Masbate. Masbate is expected to produce about 180,000 ounces this year. How should we be looking at Masbate kind of near and long-term? Should we be expecting production to remain at current levels over the next 3 to 5 years? And maybe if you can just give us a little bit color on the exploration opportunity there kind of to improve, increase the current mine life?

Yes. So I'll do the first part and then I guess, Clive, you probably do the second part. So what we did is we took a look at really the capital cost of replacing the fleet. And that's how we went from that -- we had kind of a real short high output mine life. And then instead, we -- as you just said, this 3 to 5 years, at kind of that 175,000, 185,000. And that's what we're going to see for sure. We've kind of normalized it by bringing back or reducing some of the capital cost for the fleet, which brought it down from 200,000 ounces, but of course, extended that period. And then you see, I think, it's 6 or 7 years on the low-grade stockpile after that kind of in the 100,000 ounces. So as far as what we see as far as exploration (inaudible)

Yes. The bulk of the exploration drilling at Masbate is essentially beneath the existing pits. The -- it's an island and the regional potential around Masbate itself, it's not that we don't have any targets, but they're not as prolific as we have said. Fekola Back River, it's a fairly advanced mine site. What we are doing in the Philippines is this year, we are setting up a 100% owned Philippine exploration entity. And we're looking at other opportunities within the Philippines, leveraging off our position and our presence in the country. So that's something that is seeing a lot more attention in the Philippines.

We've seen a really positive response from the -- relative progress before with the previous government that showed that the gold mining or the mine could be responsible to response for the Philippines and our success and some others. And that's gotten even more positive within recent elections with the government that is very much keen on foreign investment and very, very keen on more investment in mining, mining exploration, mining development. So we're very pleased with that and have been encouraged by the government to do look at more development and exploration opportunities going forward.

So we're better to build another goal mine that in a country that you already have one in. So that's going to be -- that's a new focus for us. And this is partly a reflection of the opportunities in the Philippines we see in an extremely mineralized set of islands, (inaudible) I suppose. But also that combined with the government that's really encouraging successful for investors like ours to increase our investment, which were open to initially starting through exploration.

And that will come from the line of Carey MacRury with Canaccord Genuity.

Just a couple of follow-ups on Anaconda. Can you just remind me what's required from a permitting standpoint for the Anaconda Phase 2 and sort of what time line is around that?

Yes. So I'll certainly answer it from the operational side, I don't know if you want to talk about it from a financial stability side. But so on the permitting side, we're currently working through a feasibility document, which would be submitted. That's what is coming out at the end of Q2. Based on that, of course, -- and the ESI, we assume that we'll get a construction permit. And I just want to reiterate the desire of the government to make this project go, -- we were just down there where we met with the Minister of Mines, and that was really one of the first questions out of his mouth was how quickly can you guys put this into operation, we will support it and go as fast as the law allows. So we don't see any issues with getting the permit for that. And certainly, the government is interested in us doing this as quickly as possible.

On the -- I guess, on the various agreements sites. So each of the licenses, we've got 4 other licenses there. Each of them needs to have the mining license granted and then we put in place the mining convention and the shareholders agreement with the state. So the same as we did for Fekola. We're working on that right now, the first one being Bantako so that we can bring on Bantako material into the plan this year. So I think we're going to -- we'll use that as a template. They're all going to be under the 2019 mining code, we believe. And once we get Bantako, we kind of have the template for the others. And the one thing that's different for these licenses than when we did Fekola, we're also going to have tolling agreements because we're going to have potentially 5 licenses and up to 2 mills to process material from those licenses.

So we'll have to have a little bit of interaction between the licenses as well.

But same as usual, under the 2019 code, we're going to mining convention that will stabilize the taxes, the tax regime and I guess, the overall operating regime that those will be felt and operated under. And it's business as -- we learned a lot from doing it for Fekola. So I think we'll find in a quicker process this time around.

So at Fekola, main -- the government owns 20%. I think at Anaconda, the 10% currently -- with the option for 10%. Are those discussions going to happen as well this year as part of this feasibility process?

Yes, they'll happen in conjunction with the feasibility. The mining code lays out that each party will have a valuation done and then they'll negotiate what they think. The valuation they can agree between themselves, which is exactly what we did for Fekola. And then the state, we expect the state will take the second 10% as before. So we think it will be 20%. So all licenses will end up being 80%-20%. For Fekola and the others, (inaudible) that's what we expect to see. But that happens as each feasibility is filed and the value reasons agreed.

And then maybe just one more on Sabina. And I know this is probably a moving target. But like can you talk about how much Sabina has funded of the CapEx to date and sort of high level, how do you -- what sort of CapEx number should we be thinking about for B2 at Sabina for the rest of this year?

I can't say how much they funded. We haven't seen their latest numbers. Remember, right now, the road is opening up. So that number is changing on an almost daily basis. What I will tell you is that, when we did the due diligence and we look at this thing, we kind of -- we looked at what they were doing and we looked at the potential to move the underground forward, which they obviously had looked at as well. And I think they had $640 million in their study. We think the number is $800 million is what we throw in ours. So we think the number is somewhere between $730 million and $830 million but we -- in our study, we put $800 million.

Yes, there's a lot of updates that Bill come up with in terms of updating from that original feasibility study number. So a lot of [instances] we do (inaudible) in that and if that goes back to the feasibility study, don't forget the initial capital estimate. So we've done a lot of work on due diligence. We're working with them to come with the number that we will feel comfortable with.

Of that $800 million roughly, 35% has been spent to estimate as of the end of the year and then 65% funded and committed. So that's kind of where we sit based on what we've seen from Sabina so far?.

There's the advance in the underground, there's about $65 million, that is in the $800 million estimate that was not in the $640 estimate there (inaudible) touched.

That's right. The difference there, it's not just inflation. There's also some optimizations and improvements that included in the $65 million, [Fekola] mining. (inaudible).

(Operator Instructions) And that will come from the line of Harmen Puri with Bank of America.

Some of my questions have actually already been asked and answered, but maybe just one final one for me. On Gramalote, can you provide us with some sense for how advanced the sales process is right now? Or any sort of color you can provide on maybe the interest you're seeing?

Well, I think just a high-level summary, we've appointed an adviser, and we're about to commence the actual Phase 1 of the process. We're just propping everything. So that's where we're at. And it's hard to say for sure, but we expect it will be somewhere within a 6-month time line, I think, for a process to be action but completed, hopefully.

There's nothing (inaudible) cash (inaudible) there's nothing in there for that discipline.

And just on your stake in Calibre, do you still view that as something maybe noncore and something that can also be divested over the next year or 2?

We have no plans for that. We think they're doing a good job, and that's been a good transaction for all included for our Anaconda employees as they move from B2Gold to Calibre, and that's been the success that came from the [mining](inaudible) environment and the social programs and the things that we've done. We're happy shareholders there, and we have no reason or need to sell, [walk] and own -- (inaudible) Since you brought that up, let's talk a little bit about our other projects, people have wondered with the Sabina deal. Fekola growth, are we considering selling other assets? The answer is no. We just go back to an Africa tour. We had a great trip to Fekola, had a good meetings in Mali, and then we're all down to be similarly great tour of mine and sell-through meetings. We're very happy in those jurisdictions. We just mentioned the Philippines. We're very happy with the ones in the Philippines. Expected all jurisdictions were committed, of course, to potential significant further investment in modeling with the second mill and ongoing exploration work.

So we're not interested in this. We really like to fit in the up -- out the existing mines, the potential business in Fekola and, of course, would be with the successful closing of Sabina deal laid that out. So we're not looking to sell additional assets. We want unfortunately, we try hard. Unfortunately, we were to be able to upgrade actually to be a point of investment opportunity that for us have fit with us. Now it's 4 million ounces in a good part of Columbia to be in, and that's okay with the permit, et cetera. And then we're confident that some of who's going to take that on and maybe we have some returns to our share.

And speakers, I'm showing no further questions in the queue at this time. I would now like to turn the call back over to Mr. Clive Johnson for any closing remarks.

Thanks, operator. Yes. I guess in summary, in closing, very pleased with the year-end results. And it's a real tribute once again, I think, to our team coming off of the Africa tour recently and being in the Philippines on that long ago. It really struck me just how extraordinarily talented group of people are, 5,000 employees that we have at B2Gold. We're very proud of our ESG track record. There's a lot of great information on our website and our responsible bio report about our commitment to that. I think that's well not established. But we sit at a great position in the company today. We're very strong in operations, extraordinarily strong in health and safety [performance] (inaudible) of our business, low-cost producer debt-free, now has the opportunity for dramatic growth over the next 3 to 4 years.

We like where we sit and are looking forward to (inaudible) pursuits and working with Bruce's team at Sabina on what is a great project to announce that deal. I'm looking forward to closing it. So I think that's all we have for now. Thank you. We'll be updating you shortly. And I'm sure we'll talk to some of the people on the line at the BMO Conference next week. So thank you for your time.

Thank you all for participating. This concludes today's program. You may now disconnect.