B2Gold Shares Rise on 2nd-Quarter Earnings Beat
B2Gold Corp. (BTG) shares gained 1.72% to $3.55 in premarket trading on Wednesday after beating second-quarter earnings estimates by 1 cent. The Canadian mid-tier gold producer posted a net profit of 4 cents per share, which was 100% growth from the prior-year quarter.
Following an 8% increase in sales volumes to 203,700 ounces and a 2% jump in the average gold price to $1,312 per ounce sold, consolidated gold revenue grew 10.3% from the prior-year quarter to $267 million. Nevertheless, revenue fell $36.81 million short of expectations.
Higher sales volumes were attributed to 2% growth in consolidated gold production to a record 246,020 ounces, resulting from solid performances the company recorded at all its operations.
B2Gold produced the precious metal from the Fekola open-pit mine in Mali, the Otjikoto gold mine in Namibia, the Masbate gold project in the Philippines and the La Libertad and El Limon mines in Nicaragua.
Higher throughput allowed the miner to incur below-budget consolidated cash operating cost of $529 per ounce of gold produced or $543 per ounce of gold sold and below budget consolidated all-in sustaining costs of $914 per ounce of gold sold.
Moreover, cash provided by operating activities climbed 7% to $92.8 million. Cash used by investing activities declined 7.8% to $73.4 million, of which 68% was allocated to expenditures on mining interests and exploration and development activities. Approximately 32% was used to support discontinued operations.
As of June 30, the balance sheet had $113.5 million in cash on hand and equivalents while mining interests were valued at $2 billion. Total debt amounted to $447 million and total equity was worth $1.76 billion.
For full-year 2019, B2Gold forecasts consolidated gold production of 935,000 ounces to 975,000 ounces at cash operating costs of $520 to $560 per ounce sold and all-in sustaining costs of $835 to $875 per ounce sold.
B2Gold said it will still hit the lower limit of the consolidated production guidance range even if it becomes a 31% shareholder of Calibre Mining Corp. (TSXV:CXB) after the sale of its Nicaraguan operations. The transaction is expected to close in the fourth quarter.
The stock closed at $3.49 on Tuesday following a 41% increase over the past year through Aug. 6. Shares are trading above the 200-, 100- and 50-day simple moving average lines. The 52-week range is $2.1 to $3.58. The market capitalization is $3.53 billion.
Catalysts to watch. The company is building a large utility-scale solar power plant at the Fekola mine in Mali. The infrastructure will be realized in approximately 12 months. Following, the company should start benefitting in terms of a significant lower operating cost per ounce of metal produced and sold.
Wall Street issued a buy recommendation rating with an average price target of $5.58 per share of B2Gold.
Disclosure: I have no positions in any securities mentioned.
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This article first appeared on GuruFocus.
