B2Gold's Q2 Revenues Attain Record Levels on Higher Prices

B2Gold Corp BTG reported record quarterly gold revenues and gold production for the second quarter and the first-half of 2020.

Q2 Operational Update

In the second quarter, the company recorded consolidated gold production of 239,574 ounces, 3% above the budget level. It marks a year-over-year increase of 15% driven by solid performance across all of its mine operations, particularly the Fekola mine in Mali.

Consolidated gold revenues in the quarter were a record $442 million compared with the $267 million witnessed in the prior-year quarter. Increase in gold revenues was driven by a 31% increase in the average realized gold price and 26% increase in gold ounces sold.

Operational Update for First-Half 2020

The company’s total gold production in the first half of the year was a record 490,206 ounces, 5% above the budget with year–over-year growth of 20%. Total gold revenues for the period came in at a record $822 million, marking a 55% jump from the year-ago quarter. This upswing can be attributed to higher realized gold price as well as higher gold ounces sold.

Encouraging Outlook

B2Gold has reaffirmed the consolidated production and financial guidance, given better-than-expected performance across its three operating mines in the first half of 2020. The company expects gold production between 1,000,000 and 1,055,000 ounces for 2020. Cash operating costs are envisioned between $415 and $455 per ounce, and All-in sustaining costs (AISC) are projected between $780 and $820 per ounce for the year.

Mining Operations in Detail

Fekola mine recorded gold production of 147,424 ounces during second-quarter 2020, 5% above the budget. It also highlights year-over-year growth of 29% driven by the expansion of the Fekola mining fleet, as well as optimization of the pit designs and mine plan for the current year. The mine is estimate to produce between 590,000 and 620,000 ounces of gold this year.

The Masbate mine in the Philippines produced 48,654 ounces of gold during the second quarter, approximately in line with the budget despite the pandemic-related restrictions and reduced manpower. Gold production declined 15% year over year. For the ongoing year, the mine is expected to produce between 200,000 and 210,000 ounces of gold.

In Namibia, the Otjikoto Mine produced 43,496 ounces of gold in the second quarter, 3% above budget, with year-over-year growth of 16%. The mine is projected to produce between 165,000 and 175,000 ounces of gold in 2020.

Including attributable gold production from the Calibre mine, the company recorded total quarterly gold production of 241,593 ounces. Total gold production in the first-half of the current year was 506,455 ounces. On Jun 24, Calibre revised the production guidance for the current year following the temporary suspension of its Nicaraguan operations due to the pandemic. For the current year, the company’s attributable gold production from the mine is now expected between 37,000 and 42,000 ounces, lower than the prior estimate of 45,000-50,000 ounces.

Other Updates

The Fekola mine’s expansion is on track and is expected to be completed by the end of the third quarter.

After a shutdown due to the COVID-19 outbreak, B2Gold restarted the Gramalote Project in Colombia, a joint venture with AngloGold Ashanti Limited AU, in May. Infill drilling is expected to be completed in August 2020. The company expects to complete the Feasibility Study at the project in the first quarter of 2021.

Price Performance

In the past year, shares of B2Gold have appreciated 84%, outperforming the industry’s gain of 48.9%.

Zacks Rank & Key Picks

B2Gold currently carries a Zacks Rank #3 (Hold).

Some better-ranked stocks in the basic materials space are Sandstorm Gold Ltd SAND and Harmony Gold Mining Company Limited HMY, both carrying a Zacks Rank #2 (Buy) currently. You can see the complete list of today’s Zacks #1 (Strong Buy) Rank stocks here.

Sandstorm Gold has an expected earnings growth rate of 33.3% for 2020. The company’s shares have surged 71.8% in the past year.

Harmony Gold has a projected earnings growth rate of 28.6% for fiscal 2020. Its shares have soared 87.7% in a year’s time.

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