B2Gold Corp.

BTG Details

B2Gold Corp. (NYSE: BTG) is a senior gold mining firm that operates globally at a cheap cost. It uses three open-pit gold mines in Mali, Namibia, the Philippines, and other exploration projects on four continents. The Gramalote and Kiaka gold projects are also important assets. The company's principal concentration is on acquiring and developing mineral property holdings, primarily focusing on gold resources. The Fekola mining sector in Mali earns the most revenue for it.

Latest News:

• Recent Acquisition: The Company finalised the acquisition of the Bakolobi permit in Mali from a local Malian company on April 21, 2022. With the purchase of the Bakolobi license, the company now owns four contiguous exploration and exploitation permits.
• Dividend Announcement: On June 08, 2022, the Board has approved a cash dividend of USD 0.04 per common share for Q2FY22, payable on June 29, 2022, to shareholders on record as of June 20, 2022.

Q1 FY22 Results:

• Increase in Gold Revenue: In Q1FY22, consolidated gold revenue was USD 366 million, based on sales of 195,100 ounces at an average realized gold price of USD 1,874 per ounce, compared to USD 362 million in Q1 FY21, based on sales of 202,330 ounces at an average realized gold price of USD 1,791 per ounce.
• Slippage in Net Income: The Company earned USD 91 million of net income in Q1FY22, compared to USD 99 million in Q1 FY21, due to higher production costs driven by macro headwinds, foreign exchange losses and a decrease in the net income of associates.
• AISC Costs: In Q1FY22, BTG had consolidated all-in sustaining costs of USD 1,028 per gold ounce sold, up from USD 919 in Q1 FY21.
• Strong Financial and Liquidity Position: As of March 31, 2022, the company has USD 649 million in cash and cash equivalents (December 31, 2021: USD 673 million) and USD 843 million in working capital (December 31, 2021: USD 802 million). The Company's USD 600 million revolving credit facility remained undrawn and available as of March 31, 2022.

Key Production Highlights:

(Source: Company Filings)

FY 22 Outlook:

(Source: Company Filings)

Key Risks:

• Commodity Pricing Risk: Gold and other metals prices worldwide are highly volatile and unmanageable, which significantly influences BTG's company. As a result, any adverse price movement may harm the company's financial performance.
• Macro-Economic Risks: The company conducts exploration, development, and production in the Philippines, Namibia, Mali, Colombia, Uzbekistan, and Finland. As a result, the activities face various political, economic, and other risks and uncertainties, which can hurt financial and operational activities in future.

Valuation Methodology: EV/Sales Multiple -based Multiple Based Relative Valuation

(Source: Analysis by Kalkine Group)

Stock Recommendation:

B2Gold focuses on long-term cash flow and value at industry-leading costs per ounce of gold produced. The 52-week high and low of the stock are USD 5.07 and USD 3.30, respectively and at the current trading levels stock is tilted towards its 52W low. Further, given the current volatility in the speculative asset classes we believe safe haven asset classes like Gold and Silver can be in the investor’s limelight which will provide support to gold and silver prices in short to mid-term.

Considering the decent top-line performance, higher margins, solid production profile, strong cash position, firm underlying commodity prices and associated risks, we recommend a "Buy " rating on the stock at the current market price of USD 3.69 as of June 16, 2022, at 10:57 AM PDT.

1-Year Technical Price Chart (as of June 16, 2022, at 10:57 AM PDT). Source: REFINITIV, Analysis by Kalkine Group

Technical Summary Analysis

Technical Indicators Defined: -

Support: A level where-in the stock prices tend to find support if they are falling, and downtrend may take a pause backed by demand or buying interest.

Resistance: A level where-in the stock prices tend to find resistance when they are rising, and uptrend may take a pause due to profit booking or selling interest.

Stop-loss: It is a level to protect further losses in case of unfavourable movement in the stock prices.

Note 1: The reference data in this report has been partly sourced from REFINITIV.  

Note 2: Investment decision should be made depending on the investors' appetite on upside potential, risks, holding duration, and any previous holdings. Investors can consider exiting from the stock if the Target Price mentioned as per the valuation has been achieved and subject to the factors discussed above. 

Note 3: The report publishing date is as per the Pacific Time Zone.