Cormark - 6/23CORMARK SECURITIES INC.
June 23, 2010
SPECIAL ALERT
JUNE 23, 2010
Investment Thesis:
B2Gold is a gold producer with two producing mines in Nicaragua and a
portfolio of development and exploration assets in Nicaragua, Colombia, Costa
Rica and Russia. We expect B2Gold to see an upside re-rating as it proves
itself as a stable gold producer. B2Gold also provides exploration upside, on
the back of a proven management team with an excellent track record for
discovering, developing and operating gold mines in challenging environments.
Highlights:
• Jabali Growing With Every Drill Hole
The Jabali target is an exciting new discovery that has been explored in two
zones covering a combined strike length of 3.2 km but has surface
outcropping that indicates the vein system has a known strike length of 6.2
km.
• Jabali to Provide Higher Grade, Lower Cost Growth
Based on the results received to date, we estimate a conceptual resource of
500,000 oz at the Antenna and Central ore shoots and believe Jabali could
increase production from the La Libertad property by 40,000 oz/yr to 130,000
oz/yr as early as 2011.
• Top Pick Rating Maintained; Target Increased to C$3.40
B2Gold continues to be rated as our Top Pick as we believe the company
provides one of the sector's best combinations of production growth, attractive
valuation (0.57x NAV; 5.5x CF) and exploration upside. Additional value from
the Gramalote and Bellavista projects will likely be crystallized over the next
12 months which should provide further catalysts for the share price to move
higher. We are increasing our target price (based on equal weighting of 1.25x
NAV and 10x CF) to C$3.40 (from C$2.90) on the back of our NAV increase.