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B2Gold expects $850 million in cashflow this year if gold stays at $1,700

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B2Gold (NYSE:BTG) announced consolidated gold production of 239,574 ounces in Q2, down 5% from its 250,632 ounces announced in the previous quarter.

Gold production in Q2 was up 15% compared to the same period a year ago.

The intermediate gold miner is headquartered in Vancouver. It has mines in Namibia, Nicaragua and Philippines.

As always in these heady gold markets, the company recorded record revenues with consolidated gold revenue from the company's three operating mines of $442 million, a significant increase of 65% over the second quarter of 2019.

The company said most of mines had strong performance despite some miners facing suspensions due to COVID-19 restrictions.

"Fekola's significant increase in gold production over the second quarter of 2019 was mainly due to the expansion of the Fekola mining fleet and optimization of the pit designs and mine plan for 2020, which have provided access to higher grade portions of the Fekola deposit earlier than anticipated in previous mine plans. The Otjikoto Mine in Namibia also had a solid second quarter, producing 43,496 ounces of gold, 3% (1,342 ounces) above budget, and 16% (6,075 ounces) higher compared to the second quarter of 2019. The Masbate Mine in the Philippines continued to perform well through the second quarter of 2020, despite being limited by a reduced workforce due to COVID-19 restrictions, producing 48,654 ounces of gold, approximately in-line with budget," said the company in a news release.

The company said that the Fekola Mine continues to operate unimpeded and no operational days have been lost due to the recent political developments and demonstrations in Mali.

The company said it is in a good cash position. As of March 31, 2020, the company had cash and cash equivalents of $208 million and has continued to add to its consolidated cash position during the second quarter of 2020.

In a note to analysts this morning, Haywood Securities said B2Gold trades below its peers and believes the company has further to run higher.

"We reiterate our positive thesis on BTO, and continue to highlight the name as a top pick within the senior gold production equity sector, given our constructive view on projected FCF growth (FY21 FCF yield of ~11%), growing dividend yield, improving net debt position, execution history across a diverse asset base, and near-to mid-term organic growth catalysts," writes Haywood


The company said more cash is expected. Based on current assumptions, including a gold price of $1,700 per ounce for the balance of 2020, the company expects to generate cashflows from operating activities of approximately $850 million in 2020.

Disclaimer: The views expressed in this article are those of the author and may not reflect those of Kitco Metals Inc. The author has made every effort to ensure accuracy of information provided; however, neither Kitco Metals Inc. nor the author can guarantee such accuracy. This article is strictly for informational purposes only. It is not a solicitation to make any exchange in commodities, securities or other financial instruments. Kitco Metals Inc. and the author of this article do not accept culpability for losses and/ or damages arising from the use of this publication.

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