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B2Gold Achieves Record Gold Production on Rising Gold Prices

Zacks Equity Research

B2Gold Corp BTG recently delivered record annual gold production and gold revenues for the fourth quarter and 2019. The company also issued an annual production and cost guidance for 2020.

Operational Update

In 2019, the company recorded annual consolidated gold production of 969,495 ounces. Notably, production exceeded the upper end of the prior guidance of between 935,000 and 975,000 ounces. This marks B2Gold’s 11th consecutive year of record annual consolidated gold production. Annual consolidated gold revenues were $1,156 million on sales volume of 827,800 ounces.

Annual gold production from the Fekola Mine, Masbate Mine and Otjikoto Mine exceeded the upper end of the respective guided ranges.

In the fourth quarter of 2019, the company’s consolidated gold production was 234,416 ounces. Consolidated gold revenues were $314 million on sales volume of 211,800 ounces.

Encouraging Outlook

Backed by solid gold production in 2019, B2Gold is well poised to gain from a strong operational and financial performance. The company has issued gold production guidance between 1,000,000 and 1,055,000 ounces for 2020. Cash operating costs are envisioned between $415 and $455 per ounce, 19% lower than the 2019 forecast of $520-$560 per ounce. All-in sustaining costs (AISC) are predicted between $780 and $820 per ounce for the ongoing year, 6% lower than the anticipation of $835-$875 per ounce for 2019.

The expansion project at Fekola Mine is likely to enhance the mine’s processing throughput to 7.5 million tonnes per annum (Mtpa) from the base rate of 6 Mtpa. This expansion will likely conclude by third-quarter 2020. Also, the mine is projected to produce between 590,000 and 620,000 ounces of gold this year. The company announced that a new large-scale off-grid Fekola solar plant project is scheduled for completion in August. The project is estimated to slash Fekola's processing costs by approximately 7%. Moreover, B2Gold plans to complete feasibility study for the Gramalote Gold Project JV by the end of December this year.

For the current year, B2Gold expects to generate cashflows from operating activities of around $700 million factoring a gold price of $1,500 per ounce. Also, it is committed to repay outstanding credit facility of $200 million during the year.
 
The company will continue to focus on maximizing profitable production from its mines, expansion of the Fekola Mine throughput, and exploration and development of the existing projects while reducing debt levels. The company has set an exploration budget of $51 million for the current year.

So far this year, gold prices gained 2.1% following a 19% gain in 2019. Uncertainty in the U.S-Sino trade front, geopolitical concerns between the United States and the Middle East, the Brexit turbulence, slowdown in manufacturing activity, bleak global economic outlook and rate cuts collectively compelled investors to seek safe-haven investment options like gold in 2019.  These factors are contributing to the rally in B2Gold’s share-price performance.

Share Price Performance

In the past year, shares of B2Gold have appreciated 46.9%, outperforming the industry’s gain of 30.2%.



Zacks Rank & Stocks to Consider

B2Gold currently carries a Zacks Rank #3 (Hold).

Some better-ranked stocks in the Mining – Gold industry are Osisko Gold Royalties Ltd OR, Pretium Resources Inc. PVG and Royal Gold, Inc. RGLD, each sporting a Zacks Rank #1 (Strong Buy), at present. You can see the complete list of today’s Zacks #1 Rank stocks here.

Osisko Gold has projected earnings growth rate of 15.96% for the current year. The company’s shares have gained 5.8% over the past year.

Pretium Resources has an estimated earnings growth rate of a whopping 107% for the ongoing year. Its shares have appreciated 58.7% in a year’s time.

Royal Gold has an estimated expected earnings growth rate of 83.4% for fiscal 2020. The company’s shares have rallied 38.4% over the past year.

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