B2Gold Corp.

BTG Details

B2Gold Corp. (NYSE: BTG) is a Canadian gold mining company that operates three gold mines: the Fekola mine in Mali, the Masbate mine in the Philippines, and the Otjikoto mine in Namibia. It also has a 50% stake in Colombia's Gramalote project and an 81% stake in Burkina Faso's Kiaka project. The company's other exploration regions include Mali, Burkina Faso, Namibia, Uzbekistan, and Finland.

Latest News:

• Grant of Menankoto Exploration Permit: On December 09, 2021, B2G had signed an agreement in principle with the State of Mali to release the Menankoto exploration permit. The government of Mali has announced that a new Malian company of BTG will be granted further exploration permission with the same boundary as the Menankoto Permit.
• Disinvestment of Kiaka Project Stake: On November 30, 2021, BTG sold its 81% stake in the Kiaka gold project situated in Burkina Faso to West African Resources Limited (WAF) for consideration of USD 22.5 million in cash (in addition to prior receipt of USD 0.45 million), 22,190,508 ordinary WAF shares, and a 2.7% net smelter return ("NSR") royalty interest on the first 2,500,000 ounces of gold produced, followed by a 0.45% NSR royalty interest on the next 1,500,000 ounces of gold produced at the Kiaka Project.

• Quarterly Dividend: On November 25, 2021, the company declared a quarterly dividend of USD 0.04 per common share (equating to 0.16 per share on annualized basis), payable on December 17, 2021, to shareholders of record on December 08, 2021.

Q3FY21 Results:

• Slight Increase in Topline: The company reported a 4.86% growth in gold revenue to USD 510.86 million in Q3FY21 (ended September 30, 2021) compared to USD 487.17 million in Q3FY20, driven by growth in sales volume partially offset by unfavorable pricing.
• Gold Production: In Q3FY21, total gold production of 310,261 oz and consolidated production of 295,723 oz both exceeded the budget by 7%.
• Surge in Net Income: Net income attributable to shareholders for Q3FY21 decreased to USD 123.11 million from USD 262.87 million reported in Q3FY20.
• Cash and Debt Position: As of September 30, 2021, the company had cash & cash equivalents of USD 546.51 million and total debt of USD 83.75 million.

Key Risks:

• Metal Price Risk: The highly unpredictable and uncontrollable prices of gold and other metals on the global market substantially impact BTG's business. As a result, any unfavorable price movement could have a detrimental influence on the company's financial performance.

Outlook:

FY21 Consolidated Guidance (Source: Corporate Presentation, November 2021)

Valuation Methodology: EV/EBITDA Multiple Based Relative Valuation

(Analysis by Kalkine Group)

* % Premium/(Discount) is based on our assessment of the company's NTM trading multiple after considering its key growth drivers, economic moat, stock's historical trading multiples versus peer average/median, and investment risks.

BTG Daily Technical Chart (Source: REFINITIV)

Stock Recommendation:

BTG's share price has declined 24.95% in the past six months and is currently leaning towards the lower-band of the 52-week range of USD 3.30 to USD 6.04. The stock is currently trading below its 50 and 200 DMA levels, and its RSI Index is at 33.45. We have valued the stock using the EV/EBITDA-based relative valuation methodology and arrived at a target price of USD 4.53.

Considering the correction in the stock price in the past six months, strong profitability margins, current valuation, and associated risks, we recommend a "Buy" rating on the stock at the current price of USD 3.685, down 0.94% as of December 13, 2021, 02:57 PM ET.

* The reference data in this report has been partly sourced from REFINITIV.

* All forecasted figures and industry information have been taken from REFINITIV.

*Depending upon the risk tolerance, investors may consider unwinding their positions in a respective stock once the estimated target price is reached.