B2Gold Q1 production beats estimates

B2Gold’s Fekola mine in Mali, West Africa. Source: B2Gold Corp.

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B2Gold’s Fekola mine in Mali, West Africa. Source: B2Gold Corp.

B2Gold Corp. [BTO-TSX; BTG-NYSE] is off to a good start in 2019 after posting better than expected production in the first quarter. First quarter gold production of 230,859 was 6% above budget and driven by strong results from the company’s Fekola mine in Mali, West Africa.

Consolidated gold revenue in the first quarter was $302 million on sales of 232,076 ounces at an average price of US$1,300 per ounce, compared to $344 million on sales of 259,837 ounces at an average price of US$1,325 an ounce in the equivalent 2018 quarter.

Based in Vancouver, B2Gold is a senior gold producer with five operating mines and numerous exploration and development projects in various countries, including Nicaragua, the Philippines, Namibia, Mali, Burkina Faso, Colombia and Finland.

Its roster of producing mines includes the Fekola mine in Mali, West Africa, the Masbate mine in the Philippines, and the Otjikoto mine in Namibia. The company also has two mines in Nicaragua – La Libertad and El Limon.

The company has been widely tipped as a takeover target in the wake of news that Goldcorp Inc. [G-TSX; GG-NYSE] and Newmont Mining Corp. [NEM-NYSE] have agreed to merge in an all-stock deal worth $10 billion that will make the two companies the world’s leading gold producer.

Meanwhile, B2Gold said the company’s Fekola, Masbate, Otjikoto and El Limon mines all exceeded their production targets. For example in the first quarter, Fekola produced 110,349 ounces of gold. Masbate produced 57,481 ounces.

On March 26, 2019, the company announced positive results from the expansion study preliminary economic assessment (PEA) for the Fekola Mine, including an estimated increases in average annual gold production to over 550,000 ounces per year during the five-year period between 2020-2024.

By comparison, Fekola is expected to produce between 420,000 and 430,000 ounces this year, making it the company’s biggest gold producer by a wide margin. Masbate ranks second with forecast production of 200,000 to 210,000 ounces in 2019.

The company is also proceeding with an expansion project to increase Fekola’s processing throughput by 1.5 million tonnes annually to 7.5 million tonnes from the current base rate of 6.0 million tonnes.

For the full-year 2019, B2Gold said it remains well positioned for continued strong operational and financial performance with consolidated gold production forecast to be in the range of 935,000 and 975,000 ounces. All-in sustaining costs are forecast at US$835 and US875/oz.

On Friday, B2Gold shares eased 0.55% or $0.02 to $3.61 on volume of over 2.0 million. The shares trade in a 52-week range of $2.77 and $4.40.

Also, in the second quarter of 2019, the company expects to complete an updated PEA for the 49%-owned Gramalote Project in Colombia. If the PEA is positive, the company and joint venture partner AngloGold Ashanti will consider whether to proceed to a final feasibility study.

Gramalote is a gold development project located approximately 230 kilometres northwest of Bogota.


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