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B2Gold Corp T.BTO

Alternate Symbol(s):  BTG

B2Gold Corp. is an international gold producer. The Company has operating gold mines in Mali, Namibia and the Philippines, the Goose Project under construction in northern Canada, and numerous development and exploration projects in various countries, including Mali, Colombia, and Finland. The Fekola Mine is located in southwest Mali, on the border between Mali and Senegal, approximately 500 kilometers due west of the capital city, Bamako. The Masbate Mine is located approximately 360 kilometers southeast of Manila. The Otjikoto Mine is located in the north-central part of Namibia, approximately 300 kilometers north of Windhoek and is a gold producer. The Company also owns the Gramalote Project in Colombia. It also has an interest in the Back River Gold District, which is located in Nunavut, Canada. The Back River Gold District consists of approximately five mineral claims blocks along an 80-kilometer belt. It is engaged in operating Goose Project, which is located in Nunavut, Canada.


TSX:BTO - Post by User

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Post by mesa1on Mar 18, 2024 3:35pm
114 Views
Post# 35938968

Valuation ...

Valuation ...Re B2Gold's valuation, Taylor Dart points out that the current setup is a massive departure from where the stock traded at its 2020 peak at a market cap of ~$7.9 billion where it traded above 13x FY2020 free cash flow vs. ~5.5x FY2025 estimates today. And while I don't think relying on a peak free cash flow multiple makes sense to derive a fair value for a stock, I think this is a business that can easily justify a free cash flow multiple of 10.0 - 11.0, especially given that it will be a larger scale and much lower-risk producer with costs well below the industry average in 2025 with ~25% of production coming from a Tier-1 ranked jurisdiction in Canada. If we apply the lower end of this multiple (10.0) and assume $600 million in FY2025 free cash flow, BTG's fair value would come in at US$4.61. Meanwhile, using a 65/35 weighting to P/NAV vs. P/CF (7.0x P/CF and 1.0x P/NAV), its fair value comes in at US$4.50 - an 80% upside from current levels to its 18-month target price or a ~90% total return including dividends set to be paid.

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