EX-99.1 2 exhibit99-1.htm EXHIBIT 99.1 B2Gold Corp. - Exhibit 99.1 - Filed by newsfilecorp.com


 

 

B2GOLD CORP.
Condensed Interim Consolidated Financial Statements
For the three and six months ended June 30, 2014
(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 shares and per share amounts)
(Unaudited)  
  

    For the three     For the three     For the six     For the six  
    months ended     months ended     months ended     months ended  
    June 30, 2014     June 30, 2013     June 30, 2014     June 30, 2013  
                         
                         
Gold revenue $  120,258   $  122,635   $  249,278   $  277,488  
                         
Cost of sales                        
                         
     Production costs   (65,929 )   (63,428 )   (128,234 )   (133,773 )
     Depreciation and depletion   (28,380 )   (18,906 )   (53,690 )   (33,137 )
     Royalties and production taxes   (3,976 )   (4,100 )   (8,286 )   (8,039 )
     Inventory fair value adjustments on CGA acquisition   -     (515 )   -     (32,869 )
                         
Total cost of sales   (98,285 )   (86,949 )   (190,210 )   (207,818 )
                         
Gross profit   21,973     35,686     59,068     69,670  
                         
                         
General and administrative   (13,094 )   (10,509 )   (20,416 )   (17,289 )
Share-based payments (Note 11)   (7,337 )   (6,070 )   (10,728 )   (8,985 )
Foreign exchange gains (losses)   1,666     157     1,334     (1,433 )
CGA acquisition costs   -     -     -     (5,859 )
Gain on sale of Brucejack royalty   -     44,496     -     44,496  
Other   923     (1,111 )   13     (2,306 )
                         
Operating income   4,131     62,649     29,271     78,294  
                         
Loss on fair value of convertible notes (Note 10)   (4,408 )   -     (42,695 )   -  
Community relations   (1,253 )   (2,599 )   (2,762 )   (3,297 )
Interest and financing expense   (1,152 )   (428 )   (2,147 )   (775 )
Realized losses on derivative instruments   (318 )   (790 )   (884 )   (1,195 )
Unrealized gains (losses) on derivative instruments   1,035     (4,035 )   947     (6,449 )
Accretion of mine restoration provisions   (298 )   (652 )   (596 )   (1,355 )
Write-down of long-term investments (Note 7)   (2,745 )   (14,987 )   (3,007 )   (18,481 )
Other   (388 )   70     1,080     (244 )
                         
(Loss) income before taxes   (5,396 )   39,228     (20,793 )   46,498  
                         
Current income tax, withholding and other taxes   (5,925 )   (3,128 )   (15,384 )   (9,616 )
Deferred income tax recovery (expense)   (208 )   (3,029 )   670     (3,748 )
                         
Net (loss) income for the period $  (11,529 ) $  33,071   $  (35,507 ) $  33,134  
               
Attributable to:                        
     Shareholders of the Company $  (11,547 ) $  33,071   $  (35,552 ) $  33,134  
     Non-controlling interests   18     -     45     -  
                         
Net (loss) income for the period $  (11,529 ) $  33,071   $  (35,507 ) $  33,134  
                         
(Loss) earnings per share (attributable to shareholders                
   of the Company)                        
     Basic $  (0.02 ) $  0.05   $  (0.05 ) $  0.05  
     Diluted $  (0.02 ) $  0.05   $  (0.05 ) $  0.05  
                         
Weighted average number of common shares outstanding (in thousands)                
     Basic   674,877     643,681     673,381     622,663  
     Diluted   674,877     646,609     673,381     626,965  

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     For the three     For the six     For the six  
    months ended     months ended     months ended     months ended  
    June 30, 2014     June 30, 2013     June 30, 2014     June 30, 2013  
                         
                         
Net (loss) income for the period $  (11,529 ) $  33,071   $  (35,507 ) $  33,134  
                         
Other comprehensive (loss) income                        
                         
     Items that may be reclassified subsequently to net earnings:                
         - Exchange differences on translating foreign operations   (3,532 )   (12,863 )   (859 )   (22,014 )
         - Unrealized gain (loss) on investments, net of 
               deferred tax expense (Note 7) 		  1,754     -     2,577     (3,138 )
     Reclassification adjustment for impairment loss on                        
         investment to net earnings (Note 7)   -     3,138     -     4,545  
                         
Other comprehensive (loss) income for the period   (1,778 )   (9,725 )   1,718     (20,607 )
                         
Total comprehensive (loss) income for the period $  (13,307 ) $  23,346   $  (33,789 ) $  12,527  
                         
Total other comprehensive (loss) income attributable to:                
     Shareholders of the Company $  (1,425 ) $  (9,725 ) $  1,804   $  (20,607 )
     Non-controlling interests   (353 )   -     (86 )   -  
                         
  $  (1,778 ) $  (9,725 ) $  1,718   $  (20,607 )
                         
Total comprehensive (loss) income attributable to:                
     Shareholders of the Company $  (12,972 ) $  23,346   $  (33,748 ) $  12,527  
     Non-controlling interests   (335 )   -     (41 )   -  
                         
  $  (13,307 ) $  23,346   $  (33,789 ) $  12,527  

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     For the three     For the six     For the six  
    months ended     months ended     months ended     months ended  
    June 30, 2014     June 30, 2013     June 30, 2014     June 30, 2013  
                         
                         
Operating activities                        
     Net (loss) income for the period $  (11,529 ) $  33,071   $  (35,507 ) $  33,134  
     Mine restoration provisions settled   (353 )   (399 )   (609 )   (594 )
           Non-cash charges (credits)                        
           Depreciation and depletion   28,380     18,906     53,690     33,137  
           Loss on fair value of convertible notes (Note 10)   4,408     -     42,695     -  
           Share-based payments (Note 11)   7,337     6,070     10,728     8,985  
           Write-down of long-term investments (Note 7)   2,745     14,987     3,007     18,481  
           Deferred income tax (recovery) expense   208     3,029     (670 )   3,748  
           Unrealized loss (gain) on derivative instruments   (1,035 )   4,035     (947 )   6,449  
           Accretion of mine restoration provisions   298     652     596     1,355  
           Gain on sale of Brucejack royalty   -     (44,496 )   -     (44,496 )
           Inventory fair value adjustments on CGA acquisition   -     515     -     32,869  
           Amortization of deferred revenue   -     (9,387 )   -     (18,782 )
           Other   (582 )   7,433     195     7,126  
                         
     Cash provided by operating activities before changes in                        
         non-cash working capital   29,877     34,416     73,178     81,412  
                         
     Changes in non-cash working capital (Note 14)   256     (7,868 )   (22,323 )   (2,668 )
     Changes in long-term value added tax receivables   (5,917 )   (2,870 )   (8,902 )   (4,723 )
                         
     Cash provided by operating activities   24,216     23,678     41,953     74,021  
                         
Financing activities                        
     Revolving credit facilities, net drawdowns (Note 10)   25,000     25,000     25,000     50,000  
     Otjikoto equipment loan facility, drawdowns net of 
          transaction costs (Note 10) 		  8,385     -     19,711     -  
     Repayment of Otjikoto equipment loan facility   (1,897 )   -     (2,405 )   -  
     Payment of finance lease obligations (Note 10)   (14,409 )   (2,101 )   (16,017 )   (3,864 )
     Repayment of Libertad equipment loan   (222 )   (150 )   (377 )   (150 )
     Masbate project loan repayments   -     (14,043 )   -     (18,524 )
     Common shares issued for cash   382     655     1,796     1,954  
     Restricted cash movement (Note 9)   (1,100 )   9,000     (3,069 )   9,000  
     Interest and commitment fees paid   (1,213 )   (865 )   (7,237 )   (1,300 )
     Financing costs relating to credit facility   -     (3,779 )   -     (3,779 )
                         
     Cash provided by financing activities   14,926     13,717     17,402     33,337  
                         
Investing activities                        
     Expenditures on mining interests:                        
           Otjikoto, mine construction   (39,123 )   (35,038 )   (89,032 )   (42,875 )
           Otjikoto, mobile mine equipment   (212 )   (22,893 )   (6,973 )   (22,893 )
           Otjikoto, power plant   379     -     (3,052 )   -  
           Otjikoto, prestripping   (3,257 )   -     (4,639 )   -  
           Gramalote, prefeasibility and exploration   (4,881 )   (17,708 )   (8,136 )   (32,545 )
           Masbate Mine, development and sustaining capital   (16,404 )   (6,617 )   (25,935 )   (10,813 )
           Libertad Mine, development and sustaining capital   (9,546 )   (7,147 )   (15,937 )   (12,105 )
           Libertad Mine, Jabali development   (998 )   (4,611 )   (2,382 )   (8,127 )
           Limon Mine, development and sustaining capital   (5,346 )   (3,941 )   (10,186 )   (7,986 )
           Other exploration and development (Note 14)   (8,275 )   (9,097 )   (16,453 )   (15,807 )
     Cash received for EVI preference shares   -     -     5,487     -  
     Purchase of EVI preference shares   -     -     -     (6,458 )
     Cash acquired on CGA acquisition   -     -     -     56,088  
     CGA acquisition costs paid   -     -     -     (16,012 )
     Cash proceeds from sale of Brucejack royalty   -     44,496     -     44,496  
     Purchase of long-term investments   (736 )   -     (736 )   (3,997 )
     Other   534     140     697     (617 )
                         
     Cash used by investing activities   (87,865 )   (62,416 )   (177,277 )   (79,651 )
                         
(Decrease) increase in cash and cash equivalents   (48,723 )   (25,021 )   (117,922 )   27,707  
                         
Cash and cash equivalents, beginning of period   183,537     120,677     252,736     67,949  
                         
Cash and cash equivalents, end of period $  134,814   $  95,656   $  134,814   $  95,656  

See accompanying notes to condensed interim consolidated financial statements.


B2GOLD CORP.
CONDENSED INTERIM CONSOLIDATED BALANCE SHEETS
(Expressed in thousands of United States dollars)
(Unaudited)  
 

    As at     As at  
    June 30,     December 31,  
    2014     2013  
             
Assets            
Current            
     Cash and cash equivalents $  134,814   $  252,736  
     Accounts receivable and prepaids   18,055     26,273  
     Value-added and other tax receivables   33,204     19,823  
     Inventories (Note 6)   80,298     75,665  
    266,371     374,497  
Long-term investments (carried at quoted market values) (Note 7)   23,969     20,769  
Value-added tax receivables   34,907     28,875  
Mining interests (Note 8 and Note 18 - Schedules)            
         - Owned by subsidiaries   1,629,496     1,517,277  
         - Investments in joint ventures   158,350     150,168  
Goodwill   202,070     202,070  
Other assets (Note 9)   19,062     16,070  
  $  2,334,225   $  2,309,726  
Liabilities            
Current            
     Accounts payable and accrued liabilities $  43,794   $  65,812  
     Current taxes payable   13,375     15,658  
     Current portion of long-term debt (Note 10)   10,496     12,965  
     Current portion of unrealized fair value of derivative instruments   909     2,563  
     Current portion of mine restoration provisions   1,345     1,351  
     Other   509     472  
    70,428     98,821  
Unrealized fair value of derivative instruments   848     205  
Long-term debt (Note 10)   373,056     300,447  
Mine restoration provisions   45,443     45,449  
Deferred income taxes   187,205     186,811  
Employee benefits obligation   5,261     6,626  
    682,241     638,359  
Equity            
Shareholders’ equity            
     Share capital (Note 11)            
     Issued: 678,785,411 common shares (Dec 31, 2013 – 674,719,721)   1,532,132     1,519,217  
     Contributed surplus   53,883     52,333  
     Accumulated other comprehensive loss   (38,735 )   (40,539 )
     Retained earnings   97,088     132,640  
    1,644,368     1,663,651  
Non-controlling interests   7,616     7,716  
    1,651,984     1,671,367  
  $  2,334,225   $  2,309,726  

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)
 

          2014  
                                           
  Shares
(‘000’s)		     Share
capital 		    Contributed
surplus 		    Accumulated
other
comprehensive
loss 		    Retained
earnings 		    Non-
controlling
interests 		    Total
equity 		 
                                           
Balance at December 31, 2013   674,720   $  1,519,217   $  52,333   $  (40,539 ) $  132,640   $  7,716   $  1,671,367  
January 1, 2014 to June 30, 2014:                            
     Net loss for the period   -     -     -     -     (35,552 )   45     (35,507 )
     Cumulative translation adjustment   -     -     -     (773 )   -     (145 )   (918 )
     Unrealized gain on investments   -     -     -     2,577     -     -     2,577  
     Shares issued on exercise of 
          stock options 		  1,587     1,796     -     -     -     -     1,796  
     Shares issued on vesting of RSU   2,478     7,805     (7,805 )   -     -     -     -  
     Shares issued from incentive plan   -     15     -     -     -     -     15  
     Share based payments – expensed   -     -     10,728     -     -     -     10,728  
     Share based payments – 
          capitalized to mining interests 		  -     -     1,926     -     -     -     1,926  
     Transfer to share capital on 
          exercise of stock options 
          and incentive plan 		  -     3,299     (3,299 )   -     -     -     -  
                                           
Balance at June 30, 2014   678,785   $  1,532,132   $  53,883   $  (38,735 ) $  97,088   $  7,616   $  1,651,984  

          2013  
                                           
  Shares
(‘000’s)		     Share
capital 		    Contributed
surplus 		    Accumulated
other
comprehensive
loss 		    Retained
earnings 		    Non-
controlling
interests 		    Total
equity 		 
                                           
Balance at December 31, 2012   393,308   $  468,550   $  35,383   $  (6,793 ) $  62,807   $  6,372   $  566,319  
January 1, 2013 to June 30,                                          
     Net income for the period   -     -     -     -     33,134     -     33,134  
     Shares issued for CGA 
          Mining acquisition 		  251,973     984,870     -     -     -     -     984,870  
     Cumulative translation 
          adjustment 		  -     -     -     (22,014 )   -     (897 )   (22,911 )
     Reclassify unrealized loss 
          on investment from 
          AOCL to income statement 		  -     -     -     4,545     -     -     4,545  
     Unrealized loss on investments   -     -     -     (3,138 )   -     -     (3,138 )
     Shares issued on exercise of 
          stock options 		  1,227     1,954     -     -     -     -     1,954  
     Shares issued on vesting of RSU   1,850     5,960     (5,960 )   -     -     -     -  
     Shares issued to EVI   2,513     7,600     -     -     -     -     7,600  
     Share based payments – expensed   -     -     8,985     -     -     -     8,985  
     Share based payments – capitalized 
          to mining interests 		  -     -     2,473     -     -     -     2,473  
     Tax benefit related to share
           issue costs 		  -     1,972     -     -     -     -     1,972  
     Transfer to share capital on 
          exercise of stock options 		  -     801     (801 )   -     -     -     -  
                                           
Balance at June 30, 2013   650,871   $  1,471,707   $  40,080   $  (27,400 ) $  95,941   $  5,475   $  1,585,803  

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, 2014
(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 three operating mines (two in Nicaragua and one in the Philippines), a fourth mine under construction in Namibia and a portfolio of development and exploration assets in Colombia, Burkina Faso and Nicaragua. The Company acquired control of CGA Mining Limited (“CGA”) on January 16, 2013, including its producing mine, the Masbate Mine, in the Philippines.

   

The Company operates the Libertad Mine and the Limon Mine in Nicaragua and the Masbate Mine in the Philippines. The Company has a 90% interest in the Otjikoto gold project in Namibia, an effective 81% interest in the Kiaka gold project in Burkina Faso, a 49% joint venture interest in the Gramalote property in Colombia, and an interest in the Quebradona property in Colombia. The Company owns the Trebol and Pavon properties in Nicaragua and the Bellavista property in Costa Rica. The Company also has a 51% interest in a joint operation in Nicaragua with Calibre Mining Corp. (“Calibre”), with an option to acquire an additional 19% interest, and a 60% interest in two joint operations in Nicaragua with Radius Gold Inc. (“Radius”).

   

On June 3, 2014, the B2Gold entered into a Merger Implementation Agreement (“Merger Agreement”) with Papillon Resources Limited (“Papillon”), more fully described in Note 4, pursuant to which B2Gold agreed to acquire all of the issued and outstanding securities of Papillon.

   

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 Financial Reporting Standards (“IFRS”) as issued by the International Accounting Standards Board (“IASB”) applicable to the preparation of interim financial statements, including IAS 34, Interim Financial Reporting. These condensed interim consolidated financial statements should be read in conjunction with the audited consolidated financial statements for the year ended December 31, 2013, 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, with the exception to the changes in accounting policies as described in Note 3 below.

   

These condensed consolidated interim financial statements were authorized for issue by the Board of Directors on August 13, 2014.

   
3

Recent accounting pronouncements

   

IFRIC 21 – Levies

   

The Company adopted IFRIC 21 on January 1, 2014, with retrospective application. IFRIC 21 provides guidance on the accounting for a liability to pay a levy, both for levies that are accounted for in accordance with IAS 37 Provisions, Contingent Liabilities and Contingent Asset and those where the timing and amount of the levy is certain. Levies are imposed by a government in accordance with legislation and do not include income taxes, fines or other penalties imposed for breaches of legislation. IFRIC 21 defines an obligating event as the legislatively identified activity that triggers the payment of the levy. Recognition of a liability to pay a levy is at the date of the obligating event. The fact that the Company is economically compelled to continue to operate in the future does not create an obligation to pay a levy that will arise in a future period as a result of continuing to operate.

   

The Company has concluded that the adoption of IFRIC 21 did not have an effect on the condensed interim consolidated financial statements for the current period or prior periods presented.

1


B2GOLD CORP.
NOTES TO THE CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS
For the three and six months ended June 30, 2014
(All tabular amounts are in thousands of United States dollars unless otherwise stated)
(Unaudited)  
 

4

Proposed asset acquisition

   

On June 3, 2014, B2Gold announced that it entered into a Merger Agreement with Papillon, pursuant to which B2Gold agreed to acquire all of the outstanding shares of Papillon based on an exchange ratio of 0.661 B2Gold common shares for each Papillon ordinary share held (“Merger Consideration”). B2Gold will also acquire all of the outstanding Papillon stock options (the “Papillon Options”) and issue B2Gold shares as consideration for the cancellation of the options based on the in-the-money amount of such Papillon Options determined by using the value implied by the Merger Consideration as at June 2, 2014.

   

The merger will be implemented by way of a Scheme of Arrangement under the Australian Corporations Act 2001 (“Scheme”). Upon completion of the Scheme, existing B2Gold shareholders and former Papillon shareholders will own approximately 74% and 26%, respectively, of the issued common shares of B2Gold following the completion of the transaction. B2Gold expects to issue an aggregate of up to 238 million common shares in connection with the Scheme.

   

Subject to receipt of all necessary Court, regulatory, shareholder and third party approvals, B2Gold expects the transaction to be completed on or about October 3, 2014.

   

The arrangement is expected to be accounted for by B2Gold as a purchase of net assets.

   
5

Significant accounting judgements and estimates

   

Impairment of Goodwill and Non-Current Assets

   

Goodwill and non-current assets are tested for impairment if there is an indicator of impairment, and in the case of goodwill, annually. Calculating the estimated fair values of cash generating units (“CGU”) for non-current asset impairment tests and CGUs for goodwill impairment tests requires management to make estimates and assumptions with respect to future production levels, mill recoveries, operating and capital costs in its life-of-mine plans, future metal prices, foreign exchange rates, net asset value (“NAV”) multiples, and discount rates. Changes in any of the assumptions or estimates used in determining the fair values could impact the impairment analysis.

   

In the fourth quarter of 2013, goodwill was assessed for impairment and the Company concluded that the goodwill was not impaired. Key assumptions used for impairment testing were:


  - Gold price $1,350/ounce  
  - Silver price $20/ounce  
  - Discount rate 5% - 7%  
  - NAV multiple 1.1  

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 a mineral resource 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, 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

Uncertain tax positions

The Company is periodically subject to income tax audits at its operating mine locations. During the six months ended June 30, 2014, the Company recorded provisions totalling $2.7 million representing its best estimate of the outcome of current assessments. The Company intends to appeal the assessments received and the final outcome of such appeals are not determinable at this time. The provisions made to date may be subject to change and such change may be material.

2


B2GOLD CORP.
NOTES TO THE CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS
For the three and six months ended June 30, 2014
(All tabular amounts are in thousands of United States dollars unless otherwise stated)
(Unaudited)  
 

Value-added tax receivables

   

The Company incurs indirect taxes, including value-added tax, on purchases of goods and services at its operating mines and development projects. Indirect tax balances are recorded at their estimated recoverable amounts within current or long-term assets, net of provisions, and reflect the Company’s best estimate of their recoverability under existing tax rules in the respective jurisdictions in which they arise. Management’s assessment of recoverability involves judgments regarding balance sheet classification and the probable outcomes of claimed deductions and/or disputes. The provisions and balance sheet classifications made to date may be subject to change and such change may be material.

   
6

Inventories


      June 30,     December 31,  
      2014     2013  
      $       $   
               
  Gold and silver bullion   17,265     23,050  
  In-process inventory   7,288     8,471  
  Ore stock-pile inventory   13,662     3,427  
  Materials and supplies   42,083     40,717  
      80,298     75,665  

7

Long-term investments


      June 30, 2014     December 31, 2013  
                                                               
  Ownership Cost Impair- ment AOCI Fair Value Ownership Cost Impair- ment AOCI Fair Value
      %     $       $     $       $     %     $       $     $       $  
                                                               
                                                               
  Available-for- 
     sale 
     investments: 		                                       
       St. Augustine 
          Gold & 
          Copper Ltd. 		  13.8%     20,193     (11,337 )   -     8,856     13.8%     20,193     (8,452 )   -     11,741  
       RTG Mining 
          Inc. 		  12.1%     13,400     (4,011 )   4,582     13,971     18.4%     8,803     (4,011 )   -     4,792  
       Sierra 
          Mining 
          Limited 		  0%     -     -     -     -     7.9%     5,893     (3,867 )   1,344     3,370  
       Calibre 
          Mining 
          Corp. 		  10.6%     5,068     (4,345 )   402     1,125     10.6%     5,068     (4,222 )   -     846  
       GoldStone 
          Resources 
          Ltd. 		  0.4%     20     -     (3 )   17     0.4%     20     -     -     20  
                                                               
  Balance, end
of period		       38,681     (19,693 )   4,981     23,969         39,977     (20,552 )   1,344     20,769  

On June 4, 2014, RTG Mining Inc. (“RTG”) acquired all of the outstanding securities of Sierra Mining Limited (“Sierra”). The Company received three new ordinary shares of RTG for every ten shares held of Sierra. The transaction did not constitute a disposal; therefore, unrealized gains were not transferred from Accumulated Other Comprehensive Income (“AOCI”) to the statement of operations.

3


B2GOLD CORP.
NOTES TO THE CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS
For the three and six months ended June 30, 2014
(All tabular amounts are in thousands of United States dollars unless otherwise stated)
(Unaudited)  
 

8

Mining interests


      June 30,     December 31,  
      2014     2013  
      $     $     
               
  Property, plant & equipment (depletable)            
       Masbate Mine, Philippines            
             Cost (includes leased assets)   750,290     723,155  
             Accumulated depreciation and depletion   (62,800 )   (40,744 )
               
      687,490     682,411  
               
       Libertad Mine (including Jabali), Nicaragua            
             Cost   282,729     259,518  
             Accumulated depreciation and depletion   (105,047 )   (83,927 )
               
      177,682     175,591  
               
       Limon Mine, Nicaragua            
             Cost   132,537     120,139  
             Accumulated depreciation and depletion   (53,098 )   (44,970 )
               
      79,439     75,169  
               
       Masbate undeveloped mineral interests   176,460     176,460  
               
  Mineral properties (non-depletable)            
       Otjikoto, Namibia (mine under construction)   383,750     289,945  
       Kiaka, Burkina Faso   54,527     50,550  
       Mocoa, Colombia   28,506     28,200  
       Trebol & Pavon, Nicaragua   26,537     24,870  
       San Jose, Nicaragua   1,210     1,123  
       Calibre, Nicaragua   9,028     8,496  
       Other   1,357     861  
               
      504,915     404,045  
               
  Corporate & other            
       Bellavista, Costa Rica   2,611     2,611  
       Office, furniture and equipment, net   899     990  
               
      3,510     3,601  
               
      1,629,496     1,517,277  
               
  Investments in joint ventures            
     (accounted for using the equity method)            
       Gramalote, Colombia   157,149     148,967  
       Quebradona, Colombia   1,201     1,201  
               
      158,350     150,168  
               
      1,787,846     1,667,445  

Otjikoto

During the three and six months ended June 30, 2014, the Company capitalized interest costs on its borrowings attributable to funds spent on Otjikoto (subsequent to the issuance of the related loans) in the amount of $3.2 million and $5.7 million, respectively. This interest was calculated on an effective interest basis on the Company’s aggregate borrowings which includes the convertible senior subordinated notes and the revolving corporate credit facility (Note 10).

4


B2GOLD CORP.
NOTES TO THE CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS
For the three and six months ended June 30, 2014
(All tabular amounts are in thousands of United States dollars unless otherwise stated)
(Unaudited)  
 

9

Other assets


      June 30,     December 31,  
      2014     2013  
      $     $  
               
               
  EVI loan receivable, including accrued interest   12,186     11,898  
  Debt service reserve account (Note 10)   3,628     1,149  
  Reclamation deposits   1,584     1,495  
  Other   1,664     1,528  
               
      19,062     16,070  

10

Long-term debt


      June 30,     December 31,  
      2014     2013  
      $     $  
               
  Convertible senior subordinated notes:            
       - Principal amount   258,750     258,750  
       - Fair value adjustment   21,302     (21,196 )
               
      280,052     237,554  
               
  Revolving corporate credit facility:            
       - Principal amount   75,000     50,000  
       - Less: unamortized transaction costs   (2,925 )   (3,399 )
               
      72,075     46,601  
               
  Equipment loans/finance lease obligations:            
       - Masbate finance lease obligations   -     17,273  
       - Otjikoto equipment loan facility (net of unamortized transaction costs)   26,475     9,168  
       - Libertad equipment loan   4,950     2,816  
               
      31,425     29,257  
               
      383,552     313,412  
               
  Less: current portion   (10,496 )   (12,965 )
               
      373,056     300,447  

5


B2GOLD CORP.
NOTES TO THE CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS
For the three and six months ended June 30, 2014
(All tabular amounts are in thousands of United States dollars unless otherwise stated)
(Unaudited)  
 

Convertible senior subordinated notes

As at June 30, 2014, the fair value of the convertible senior subordinated notes increased to $280.1 million, resulting in a change in fair value for the three and six months of $7.2 million and $47.6 million, respectively, including interest expense. For the three months ended June 30, 2014, the change in fair value of the notes recognized in the statement of operations was reduced to $4.4 million by $2.8 million of interest expense which was attributable to eligible expenditures on the Otjikoto property and capitalized to the carrying amount of the property. For the six months ended June 30, 2014, the change in fair value of the notes recognized in the statement of operations was reduced to $42.7 million by $4.9 million of interest expense which was attributable to eligible expenditures on the Otjikoto property and capitalized to the carrying amount of the property.

During the first quarter of 2014, the first interest payment of $5.1 million was made.

Revolving corporate credit facility

During the first quarter of 2014, the Company entered into an amending agreement pursuant to which the facility amount of the Senior Credit Facility was increased by $50 million to a total amount of $200 million, subject to updating security documents to reflect the increased amount of the facility.

During the three months ended June 30, 2014, the Company drew down an additional $25 million under the Senior Credit Facility. As at June 30, 2014 the Company had drawn down a total of $75 million under the Senior Credit Facility, leaving an undrawn balance of $125 million.

For the three and six months ended June 30, 2014, the interest and financing expense relating to the revolving corporate credit facility recognized in the statement of operations was reduced by $0.4 million and $0.8 million, respectively, which was attributable to eligible expenditures on the Otjikoto property and capitalized to the carrying amount of the property.

Masbate finance lease obligations

During the first quarter of 2014, the Company notified Leighton Holdings Limited (“Leighton”) that it was exercising its option to terminate the mining services agreement effective December 31, 2014 and would purchase the leased assets under the agreement. On June 30, 2014, the Company terminated the finance lease and took ownership of the leased assets.

Otjikoto equipment loan facility

During the three and six months ended June 30, 2014, a subsidiary of the Company, B2Gold Namibia drew $8.4 million and $20.3 million, respectively, under the facility. At June 30, 2014, the B2Gold Namibia had drawn $30.5 million under the facility leaving $5.2 million undrawn, based on current exchange rates. Transaction costs relating to the facility totalled approximately $1.5 million and are being recognized over the term of the facility using the effective interest rate method.

The Borrower is required to maintain a deposit in a debt service reserve account ("DSRA") with HSBC Bank Bermuda Limited 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, 2014, the balance in the DSRA was $3.6 million (Note 9).

Libertad equipment loan

During the first quarter of 2014, a subsidiary of the Company purchased mobile heavy equipment valued at $3.0 million (2013 - $4.2 million) for its Libertad operation. The Company paid 15% of the value of the equipment in cash and entered into two credit contracts with Caterpillar Crédito S.A de C.V for the remaining 85%. The contracts have a sixty month term, with quarterly payments of principal and interest at a variable rate of LIBOR plus 4.0% . The loan is secured by the equipment.

6


B2GOLD CORP.
NOTES TO THE CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS
For the three and six months ended June 30, 2014
(All tabular amounts are in thousands of United States dollars unless otherwise stated)
(Unaudited)  
 

11

Capital stock

   

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, 2014, the Company had 678,785,411 common shares outstanding, including 2,705,000 common shares being held in trust under the Company’s Incentive Plan. No preferred shares were outstanding.

   

During the six months ended June 30, 2014, the Company granted 5.5 million stock options to employees and directors. These options have a weighted average exercise price of C$2.92, 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 1.12%, an expected life of 2.7 years, an expected volatility of 60%, and a dividend yield rate of nil. The total number of stock options outstanding at June 30, 2014 was 42.7 million.

   

For the three and six months ended June 30, 2014, share-based payments expense, relating to the vesting of stock options, was $2.1 million and $4.2 million, respectively (2013 - $1.6 million and $4.1 million), net of $0.8 million and $1.7 million, respectively (2013 - $0.6 million and $1.6 million) capitalized to mining interests.

   

During the six months ended June 30, 2014, the Company granted 2.2 million restricted share units to employees and directors. The total number of restricted share units outstanding at June 30, 2014 was 2.7 million.

   

For the three and six months ended June 30, 2014, share-based payments expense, relating to the vesting of RSU, was $3.1 million and $4.4 million, respectively (2013 - $4.5 million and $4.9 million), net of $0.0 million and $0.2 million, respectively (2013 - $0.5 million and $0.9 million) capitalized to mining interests.

   

On April 30, 2014, 0.75 million common shares were awarded from the trust under the Incentive Plan to a senior employee of the Company. In connection with the award, the Company recorded a share-based payments expense of $2.1 million (the market value of the shares on the date of the award) in 2014.

   
12

Gold commitments

   

At June 30, 2014, the following gold forward contracts with respect to the Otjikoto Project were outstanding (by maturity dates):


      2015     2016     2017     2018     Total  
                                 
                                 
                                 
  Gold forward contracts:                              
       - Ounces   35,496     52,986     55,716     48,216     192,414  
       - Average price per ounce (rand)   14,874     15,500     15,587     15,727     15,458  

These contracts are excluded from the scope of IAS 39, accounted for as executory contracts as 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 have been recorded in the financial statement. The effect of these contracts will be to provide a fixed price in rand for a portion of gold sales.

   
13

Financial instruments

   

The Company’s financial assets and liabilities consist of cash and cash equivalents, accounts receivable, loan receivable from EVI (Note 9), long-term investments (Note 7), accounts payable and accrued liabilities, South African rand foreign exchange derivative contracts, gold derivative contracts, and debt (Note 10).

7


B2GOLD CORP.
NOTES TO THE CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS
For the three and six months ended June 30, 2014
(All tabular amounts are in thousands of United States dollars unless otherwise stated)
(Unaudited)  
 

Fair values
The Company’s financial assets and liabilities are classified based on the lowest level of input significant to the fair value measurement based on the fair value hierarchy:

Level 1 – quoted prices in active markets for identical assets or liabilities;

Level 2 – inputs other than quoted prices included in Level 1 that are observable for the asset or liability, either directly (i.e. as prices) or indirectly (i.e. derived from prices); and

Level 3 – inputs for the asset or liability that are not based on observable market data.

As at June 30, 2014, 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, 2014     As at December 31, 2013  
      Level 1     Level 2     Level 1     Level 2  
      $     $     $     $  
                           
  Long-term investments (Note 7)   23,969     -     20,769     -  
  Convertible senior subordinated notes (Note 10)   -     280,052     -     237,554  
  Gold derivative contracts   -     848     -     205  
  South African rand foreign exchange derivative   -     908     -     2,563  
  contracts                        

The fair value of the convertible senior subordinated notes was determined using a broker’s price quote from an active market.

The fair value of the gold derivative contracts and South African rand foreign exchange derivative contracts was determined using prevailing market rates for instruments with similar characteristics.

The carrying values of accounts receivable and accounts payable and accrued liabilities approximate their respective fair values due to the short-term nature of these instruments. The carrying value of the Company’s Senior Credit Facility approximates its fair value due to the floating rate nature of this instrument and the insignificant effect of changes in the Company’s credit risk on the credit spread of the loan facility.

The Company has entered into foreign currency contracts to manage its foreign currency exposure of forecast expenditures denominated in Namibian dollars relating to the development of its Otjikoto project. As the Namibian dollar is pegged to the South African rand, the Company enters into foreign currency contracts between the South African rand and the United States dollar due to their greater liquidity.

8


B2GOLD CORP.
NOTES TO THE CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS
For the three and six months ended June 30, 2014
(All tabular amounts are in thousands of United States dollars unless otherwise stated)
(Unaudited)  
 

14

Supplementary cash flow information

   

Supplementary disclosure of cash flow information is provided in the table below:


  a)

Changes in non-cash working capital:


      For the three     For the three     For the six     For the six  
      months ended     months ended     months ended     months ended  
      June 30,     June 30,     June 30,     June 30,  
      2014     2013     2014     2013  
      $     $     $     $  
                           
  Accounts receivable and prepaids   323     (4,501 )   2,729     (23,278 )
  Value-added and other tax receivables   (3,439 )   (6,264 )   (13,382 )   2,177  
  Inventories   227     7,553     (6,151 )   14,175  
  Accounts payable and accrued liabilities   3,267     (3,244 )   (3,236 )   11,159  
  Income and other taxes payables   (122 )   (1,412 )   (2,283 )   (6,901 )
                           
      256     (7,868 )   (22,323 )   (2,668 )

  b)

Other exploration and development:


      For the three     For the three     For the six     For the six  
      months ended     months ended     months ended     months ended  
      June 30,     June 30,     June 30,     June 30,  
      2014     2013     2014     2013  
      $     $     $     $  
                           
  Kiaka Project, exploration   (1,672 )   -     (3,557 )   -  
  Masbate Mine, exploration   (776 )   (2,419 )   (2,435 )   (4,454 )
  Libertad Mine, exploration   (1,108 )   (1,735 )   (2,274 )   (2,720 )
  Limon Mine, exploration   (1,161 )   (1,577 )   (2,140 )   (2,407 )
  Otjikoto, exploration/feasibility   (1,679 )   (2,325 )   (2,760 )   (3,968 )
  Primavera, exploration   (174 )   (251 )   (508 )   (774 )
  Mocoa, exploration   (166 )   (206 )   (294 )   (453 )
  Trebol and Pavon, exploration   (1,134 )   (56 )   (1,735 )   (202 )
  Other   (405 )   (528 )   (750 )   (829 )
                           
      (8,275 )   (9,097 )   (16,453 )   (15,807 )

9


B2GOLD CORP.
NOTES TO THE CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS
For the three and six months ended June 30, 2014
(All tabular amounts are in thousands of United States dollars unless otherwise stated)
(Unaudited)  
 

  c)

Non-cash investing and financing activities:


      For the three     For the three     For the six     For the six  
      months ended     months ended     months ended     months ended  
      June 30,     June 30,     June 30,     June 30,  
      2014     2013     2014     2013  
      $     $     $     $  
                           
  Common shares issued for CGA acquisition   -     -     -     984,870  
  Common shares issued to EVI on assignment of its right to acquire an additional 5% interest in the Otjikoto property   -     1,000     -     1,000  
  Share-based compensation, capitalized to resource property interests   947     1,067     1,926     2,473  
  Equipment purchased under finance lease   -     -     2,115     -  
  Equipment purchased under equipment loan   -     -     2,512     3,271  
  Interest expense, capitalized to resource property interest   3,194     -     5,709     -  
  Change in accounts payable and accrued liabilities relating to resource property expenditures   4,051     6,486     (18,762 )   7,809  

  d)

Other:

     
 

On March 20, 2013, B2Gold Namibia (Proprietary) Limited (“B2Gold Namibia”), a subsidiary of the Company, acquired from two Namibian banks all of the issued and outstanding Class A and Class B preference shares (“Preference Shares”) in the capital of EVI Gold (Proprietary) Limited (“EVI”) for total consideration of approximately 59.3 million Namibian dollars. On February 24, 2014, EVI redeemed the preference shares held by B2Gold Namibia for 59.3 million Namibian dollars.


15

Compensation of key management

   

Key management includes the Company’s directors, members of the Executive Committee and members of Senior Management. Compensation to key management included:


      For the three     For the three     For the six     For the six  
      months ended     months ended     months ended     months ended  
      June 30,2014     June 30, 2013     June 30, 2014     June 30, 2013  
      $     $     $     $  
                           
  Salaries and short-term employee benefits   4,873     3,963     5,902     4,712  
  Share-based payments   5,401     2,721     6,497     3,661  

10


B2GOLD CORP.
NOTES TO THE CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS
For the three and six months ended June 30, 2014
(All tabular amounts are in thousands of United States dollars unless otherwise stated)
(Unaudited)  
 

16

Segmented information

   

The Company’s reportable operating segments include its mining operations and development projects, namely the Limon, Libertad and Masbate mines, and the Otjikoto, Gramalote and Kiaka projects. The “Other Mineral Properties” segment consists of the Company’s interests in mineral properties which are at various stages of exploration. The “Corporate and Other” segment includes corporate operations and the Bellavista property in Costa Rica which is presently undergoing environmental and closure audits.

   

The Company’s segments are summarized in the following tables.


      For the three months ended June 30, 2014  
    Limon
Mine 		    Libertad
Mine 		    Masbate
Mine 		    Otjikoto
Project 		    Gramalote
Project 		    Kiaka
Project 		    Other
Mineral
Properties 		    Corporate
& Other 		    Total  
      $     $     $     $      $     $     $     $        $  
                                                         
  Gold revenue   19,435     52,602     48,221     -     -     -     -     -     120,258  
                                                         
  Production costs   11,123     24,395     30,411     -     -     -     -     -     65,929  
                                                         
  Depreciation & depletion   4,883     11,167     12,330     -     -     -     -     64     28,444  
                                                         
  Net income (loss)   2,463     8,425     476     (395 )   -     (508 )   938     (22,928 )   (11,529 )
                                                         
  Capital expenditures   6,508     11,651     17,179     43,891     4,881     1,672     1,878     30     87,690  
                                                         
  Total assets   109,094     239,487     1,161,734     427,303     157,149     54,833     68,514     116,111     2,334,225  

      For the three months ended June 30, 2013  
 

 
Limon
Mine 		   
Libertad
Mine 		   
Masbate
Mine 		   
Otjikoto
Project 		   
Gramalote
Project 		   
Kiaka
Project 		    Other
Mineral
Properties 		   
Corporate
& Other 		   

Total 		 
      $     $     $     $     $     $     $     $      $  
                                                         
  Gold revenue   19,983     39,589     63,063     -     -     -     -     -     122,635  
                                                         
  Production costs   9,659     19,056     34,713     -     -     -     -     -     63,428  
                                                         
Cost of sales – inventory fair value adjustments on CGA acquisition - - 515 - - - - - 515
                                                         
  Depreciation & depletion   4,095     5,511     9,300     -     -     -     -     46     18,952  
                                                         
  Net income (loss)   3,653     6,650     (1,407 )   -     -     -     (142 )   24,317     33,071  
                                                         
  Capital expenditures   5,518     13,493     8,099     60,256     17,708     -     1,653     38     106,765  
                                                         
  Total assets   114,067     229,544     1,236,407     193,328     133,445           72,629     46,129     2,025,549  

11


B2GOLD CORP.
NOTES TO THE CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS
For the three and six months ended June 30, 2014
(All tabular amounts are in thousands of United States dollars unless otherwise stated)
(Unaudited)  
 

      For the six months ended June 30, 2014  
 
Limon
Mine
Libertad
Mine
Masbate
Mine
Otjikoto
Project
Gramalote
Project
Kiaka
Project 		Other
Mineral
Properties
Corporate
& Other

Total
      $     $     $     $     $     $      $      $     $   
  Gold revenue   37,751     102,599     108,928     -     -     -     -     -     249,278  
                                                         
  Production costs   19,992     43,848     64,394     -     -     -     -     -     128,234  
                                                         
  Depreciation & depletion   8,945     21,353     23,392     -     -     -     -     126     53,816  
                                                         
  Net income (loss)   5,494     17,151     11,072     (129 )   -     (508 )   158     (68,745 )   (35,507 )
                                                         
  Capital expenditures   12,327     20,593     28,369     106,456     8,136     3,557     3,287     34     182,759  
                                                         
  Total assets   109,094     239,487     1,161,734     427,303     157,149     54,833     68,514     116,111     2,334,225  

      For the six months ended June 30, 2013  
 




Limon
Mine




Libertad
Mine




Masbate
Mine




Otjikoto
Project




Gramalote
Project




Kiaka
Project



Other
Mineral
Properties




Corporate
& Other





Total

      $     $     $     $     $      $     $     $     $  
  Gold revenue   44,888     82,996     149,604     -     -     -     -     -     277,488  
                                                         
  Production costs   20,117     36,190     77,466     -     -     -     -     -     133,773  
                                                         
  Cost of sales – inventory fair value adjustments on CGA acquisition   -     -     32,869     -     -     -     -     -     32,869  
                                                         
  Depreciation & depletion   7,761     11,672     13,704     -     -     -     -     88     33,225  
                                                         
  Net income (loss)   8,144     19,632     1,838     -     -     -     (273 )   3,793     33,134  
                                                         
  Capital expenditures   10,393     22,952     14,330     69,736     32,545     -     3,428     279     153,663  
                                                         
  Total assets   114,067     229,544     1,236,407     193,328     133,445     -     72,629     46,129     2,025,549  

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

      June 30,     December 31,  
      2014     2013  
      $     $  
               
               
  Mining interests            
       Philippines   863,950     858,871  
       Nicaragua   295,253     286,110  
       Namibia   383,750     289,945  
       Colombia   186,856     178,368  
       Burkina Faso   54,527     50,550  
       Costa Rica   2,611     2,611  
       Canada   899     990  
               
      1,787,846     1,667,445  

12


B2GOLD CORP.
NOTES TO THE CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS
For the three and six months ended June 30, 2014
(All tabular amounts are in thousands of United States dollars unless otherwise stated)
(Unaudited)  
 

17

Commitments

   

As at Jun 30, 2014, the Company had the following significant commitments (in addition to those disclosed elsewhere in these financial statements):


  •

In connection with the proposed acquisition of Papillon described in Note 4, a reimbursement fee of $5.7 million is payable by the Company to Papillon if the Scheme is not successful due to specified events.

     
  •

Purchase of $9.0 million of parts and equipment for the construction of the Otjikoto project mill and power plant in Namibia during the second half of 2014.

     
  •

Payments of $2.8 million for Otjikoto project mobile equipment to be incurred in the first quarter of 2015.

     
  •

Land payments of $8.7 million (the Company’s 49% share) with respect to the acquisition of land at the Gramalote project in Colombia. It is expected that $2.3 million will be paid in 2014, $6.1 million in 2015 and the remaining $0.3 million in 2016.

13


B2GOLD CORP.
NOTES TO THE CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS
For the three and six months ended June 30, 2014
(All tabular amounts are in thousands of United States dollars unless otherwise stated)
(Unaudited)  
 

          Cost           Accumulated depreciation           Net carrying value  
                                                                   
    Opening     Acquisition           Cumulative     Closing     Opening                 Closing              
    balance at     costs/     Disposals/     translation     balance at     balance at           Disposals/     balance at     As at     As at  
    Dec. 31, 2013     Additions     write-offs     adjustments     Jun. 30, 2014     Dec. 31, 2013     Depreciation     write-offs     Jun. 30, 2014     Jun. 30, 2014     Dec. 31, 2013  
    $     $     $     $     $     $     $     $     $     $     $  
Property, plant & equipment                                                                  
 Masbate                                                                  
     - Masbate Mine   723,155     32,782     (5,647 )   -     750,290     (40,744 )   (22,857 )   801     (62,800 )   687,490     682,411  
     - Undeveloped mineral interests   176,460     -     -     -     176,460     -     -     -     -     176,460     176,460  
 Libertad (including Jabali)   259,518     23,211     -     -     282,729     (83,927 )   (21,120 )   -     (105,047 )   177,682     175,591  
 Limon   120,139     12,398     -     -     132,537     (44,970 )   (8,128 )   -     (53,098 )   79,439     75,169  
                                                                   
    1,279,272     68,391     (5,647 )   -     1,342,016     (169,641 )   (52,105 )   801     (220,945 )   1,121,071     1,109,631  
                                                                   
Mineral properties (non-depletable)                                                                  
 Otjikoto (mine under construction)   289,945     96,226     -     (2,421 )   383,750     -     -     -     -     383,750     289,945  
 Kiaka   50,550     3,977     -           54,527     -     -     -     -     54,527     50,550  
 Mocoa   28,200     306     -           28,506     -     -     -     -     28,506     28,200  
 Trebol & Pavon   24,870     1,667     -           26,537     -     -     -     -     26,537     24,870  
 San Jose   1,123     87     -           1,210     -     -     -     -     1,210     1,123  
 Calibre   8,496     532     -           9,028     -     -     -     -     9,028     8,496  
 Other   861     496     -           1,357     -     -     -     -     1,357     861  
                                                                   
    404,045     103,291     -     (2,421 )   504,915     -     -     -     -     504,915     404,045  
                                                                   
Corporate & other                                                                  
 Bellavista   2,611     -     -     -     2,611     -     -     -     -     2,611     2,611  
 Office, furniture & equipment   1,688     35     -     -     1,723     (698 )   (126 )   -     (824 )   899     990  
                                                                   
    4,299     35     -     -     4,334     (698 )   (126 )   -     (824 )   3,510     3,601  
                                                                   
Investments (incorporated joint                                                                  
ventures)                                                                  
 Gramalote   148,967     8,182     -     -     157,149     -     -     -     -     157,149     148,967  
 Quebradona   1,201     -     -     -     1,201     -     -     -     -     1,201     1,201  
                                                                   
    150,168     8,182     -     -     158,350     -     -     -     -     158,350     150,168  
                                                                   
    1,837,784     179,899     (5,647 )   (2,421 )   2,009,615     (170,339 )   (52,231 )   801     (221,769 )   1,787,846     1,667,445  

14


B2GOLD CORP.
NOTES TO THE CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS
For the three and six months ended June 30, 2014
(All tabular amounts are in thousands of United States dollars unless otherwise stated)
(Unaudited)  
 

          Cost           Accumulated depreciation           Net carrying value  
                                                                   
    Opening     Acquisition           Cumulative     Closing     Opening                 Closing              
    balance at     costs/     Disposals/     translation     balance at     balance at           Disposals/     balance at     As at     As at  
    Dec. 31, 2012     Additions     write-offs     adjustments     Dec. 31, 2013     Dec. 31, 2012     Depreciation     write-offs     Dec. 31, 2013     Dec. 31, 2013     Dec. 31, 2012  
    $     $     $     $     $     $     $     $     $     $     $  
Property, plant & equipment                                                                  
 Masbate                                                                  
     - Masbate Mine   -     723,155     -     -     723,155     -     (40,744 )   -     (40,744 )   682,411     -  
     - Undeveloped mineral interests   -     176,460     -     -     176,460     -     -     -     -     176,460     -  
 Libertad (including Jabali)   215,941     43,577     -     -     259,518     (51,673 )   (32,254 )   -     (83,927 )   175,591     164,268  
 Limon   105,727     14,412     -     -     120,139     (27,349 )   (17,621 )   -     (44,970 )   75,169     78,378  
                                                                   
    321,668     957,604     -     -     1,279,272     (79,022 )   (90,619 )   -     (169,641 )   1,109,631     242,646  
                                                                   
Mineral properties (non-depletable)                                                                  
 Otjikoto (mine under construction)   118,798     210,252     -     (39,105 )   289,945     -     -     -     -     289,945     118,798  
 Kiaka   -     50,550     -     -     50,550     -     -     -     -     50,550     -  
 Mocoa   27,539     661     -     -     28,200     -     -     -     -     28,200     27,539  
 Trebol & Pavon   24,333     537     -     -     24,870     -     -     -     -     24,870     24,333  
 San Jose   -     1,123     -     -     1,123     -     -     -     -     1,123     -  
 Cebollati   9,051     513     (9,564 )   -     -     -     -     -     -     -     9,051  
 Calibre   7,112     1,384     -     -     8,496     -     -     -     -     8,496     7,112  
 Other   -     861     -     -     861     -     -     -     -     861     -  
                                                                   
    186,833     265,881     (9,564 )   (39,105 )   404,045     -     -     -     -     404,045     186,833  
                                                                   
Corporate & other                                                                  
 Bellavista   2,601     10     -     -     2,611     -     -     -     -     2,611     2,601  
 Office, furniture & equipment   1,173     515     -     -     1,688     (528 )   (170 )   -     (698 )   990     645  
                                                                   
    3,774     525     -     -     4,299     (528 )   (170 )   -     (698 )   3,601     3,246  
                                                                   
Investments (incorporated joint                                                                  
ventures)                                                                  
 Gramalote   100,798     48,169     -     -     148,967     -     -     -     -     148,967     100,798  
 Quebradona   1,201     -     -     -     1,201     -     -     -     -     1,201     1,201  
                                                                   
    101,999     48,169     -     -     150,168     -     -     -     -     150,168     101,999  
                                                                   
    614,274     1,272,179     (9,564 )   (39,105 )   1,837,784     (79,550 )   (90,789 )   -     (170,339 )   1,667,445     534,724  

15