This Canadian stock owns four mines around the globe, and its new mine in Mali is helping push output to record levels.
The company is on track to produce as much as 950,000 ounces of gold in 2018. This stock has shown that it can be successful in areas of potential political risk, and its strong balance sheet and rising cash flow add to its speculative appeal.
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B2GOLD CORP. (symbol BTO on Toronto; www.b2gold.com) owns four mines: the Limon and Libertad gold mines in Nicaragua; the Otjikoto mine in Namibia; the Masbate mine in the Philippines; and the new Feloka mine in Mali.
B2Gold also holds 81% of the Kiaka project in Burkina Faso, south of Mali, and 49% interest in Colombia’s Gramalote project.
The company was formed by the management team of Bema Gold after Kinross Gold bought out that mining firm in early 2007.
Six years later, in 2013, B2Gold completed its $1.1 billion purchase of CGA Mining (symbol CGA on Toronto). CGA owned the Masbate gold mine in the Philippines.
B2Gold successfully completed construction of the Fekola mine in late September 2017. That was more than three months ahead of schedule. The mine achieved commercial production on November 30, 2017.
Mining Stocks: Fekola mine contributes to record output in latest quarter
The mining company produced a record 239,684 ounces of gold in the three months ended March 31, 2018 (including 114,142 ounces from the Fekola mine in its first full quarter of production). That’s up 81.0% from 132,736 ounces a year earlier.
Revenue in the quarter also reached record levels thanks to the Fekola mine. Excluding unusual items, net income was $57 million, or 6 cents per share, compared to $19 million, or two cents a share, a year ago.
For 2018, the Fekola mine should produce between 400,000 and 410,000 ounces of gold. That should push B2Gold’s overall output as high as 950,000 ounces.
The company’s balance sheet is sound: it holds cash of $147.5 million U.S., or $0.16 a share, and its long-term debt of $399.6 million U.S. is a low 15% of its market cap.
Operating in Mali, the Philippines, Nicaragua, Nambia and elsewhere in Africa adds political risk. But B2Gold’s management team has successfully dealt with those types of challenges before. Those same mining veterans built Bema Gold into a $3.5 billion company before Kinross took it over. Their three major gold discoveries—Refugio and Cerro Casale in Chile and Kupol in Russia—contributed to that success.
Positive cash flow and rising output give B2Gold speculative appeal. The stock trades at just 7.2 times the company’s forecast 2018 cash flow of $0.51 U.S.
TSI Network recommendation: B2Gold Corp. is okay to hold for aggressive investors.