Excerpts from an Article a couple weeks ago Following B2Gold Corp.'s (BTG:NYSE; BTO:TSX; B2G:NSX) Q1/18 production beat, Eight Capital increased its target price on the Buy-rated company to CA$5.40 from CA$4.75 per share, as reported in an April 11, 2018 research note. B2G is currently trading at around CA$3.60 per share. Quarterly production of 240,000 ounces (240 Koz) gold exceeded Eight Capital's estimate by 4% and "tracked above the high end of full year guidance," wrote analyst Craig Stanley. About 260 Koz of gold were sold during Q1/18, taking quarterly revenue to a record $344.3 million ($344.3M).
The standout in Q1/18 was B2Gold's flagship Fekola mine in Mali, where 144 Koz were produced. This also surpassed expectations, by 13%, and was "well above" the high end of 2018 guidance, Stanley noted. Also, Fekola contributed 27 Koz to the total gold sold during the quarter.
The analyst speculated that the Fekola project likely could be expanded and indicated that B2Gold may address that very prospect at its Fekola site visit on May 23 to 24, 2018.
In support of a potential expansion, Stanley said that B2Gold plans almost 100 kilometers (100 km) of drilling in Mali this year, at a budget of about $15.1M. Drilling at the Fekola deposit would likely result in 1.29 million ounces of gold, ones not included in the mine plan, being upgraded from the Indicated category.
Also, Stanley explained, were drill results from the Fekola North Extension to show "sufficient economic mineralization, a potential low capex expansion of the plant from 5.5 million tons per annum to 7 could be justified." Whereas drilling of up to 900 meters of the resource pit boundary continues there, it already hit mineralized structures up to 1.8 km north of the main Fekola zone.
Stock seems stuck around $ 3.65 level, have not seen a close in days above $ 3.70 CAD. Need to see the earnings potential this Thursday May 10th.
Given 900 K - 950 K expected production for 2018, this stock is trading CHEAP relative to peers. KL (also a mega fan of) will produce close to 700 K this year (even if they sandbagged guidance at 620 K, next earninsg call they will up guidance), and is now at $ 5 B market cap!
B2Gold is approx. $ 3.6 B at $ 3.66/share.
B2Gold debt of $ 400 Million totally manageable and will be erased in next couple of years from Fekola FCF. B2Gold 2019 production will be over 1 million ounces.
This is a $ 5.50 CAD stock...yes some geopolitical risk vs. KL in Ontario and Australia, but not for such a discount currently market is pricing in.
JIN