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B2Gold: Digging Into The Q4 Results

Mar. 02, 2020 1:08 PM ETB2Gold Corp. (BTG), BTO:CA16 Comments
Taylor Dart profile picture
Taylor Dart


  • B2Gold reported its FY-2019 results last week, beating guidance across the board after another record year from the company's Fekola Mine.
  • Annual earnings per share grew by 43% year-over-year to a new high, solidifying the uptrend following a breakout year for earnings per share in FY-2018.
  • B2Gold continues to be arguably the most attractive gold producer in Africa, with Endeavour Mining coming in a close second.
  • Based on continued strong performance operationally, and robust earnings estimates for FY-2020, I would view any 25% pullbacks as buying opportunities.

It's been a decent start to the Q4 earnings season for the gold miners (GOAU), but some turbulence in gold (GLD) last week sent many miners plunging to multi-month lows, despite satisfactory FY-2019 results. Fortunately, B2Gold (NYSE:BTG) came out relatively unscathed last week on a relative basis, as the stock only returned to January levels, while other names like Kirkland Lake Gold (KL) and Agnico Eagle Mines (AEM) made new lows.

The robust relative performance was thanks to an exceptional Q4 earnings report released Thursday for B2Gold, with outstanding results both operationally and financially. Not only did the company beat guidance across the board, but they're set for further production growth in FY-2020 outlined in their forward guidance of 1.03 million ounces of annual gold production. Based on B2Gold's continued operational excellence and strong project pipeline, I continue to believe the stock is the most attractive African gold producer. Therefore, I would view 25% pullbacks in the stock as buying opportunities.

(Source: Company Website, RepublicofMining.com)

B2Gold is the most recent name to report its FY-2019 results, and the company enjoyed a blow-out year, with annual gold production of 980,200 ounces, more than 2.5% above the 955,000-ounce production guidance midpoint provided in January 2019. The star performer in the company's project portfolio was their 80%-owned Fekola Mine in Mali, where the company saw annual gold production of 455,800 ounces, and this was 6% above the production guidance mid-point of 420,000 ounces to 430,000 ounces.

At Otjikoto in Namibia, the company also beat guidance, with 178,000 ounces of gold production, more than 8,000 ounces above the mid-point, or 4% above guidance. Finally, the company's Masbate Mine in the Philippines had a solid year, with 217,000 ounces of gold production, more than 3% above the upper end of guidance. Overall, it was an exceptional year for the company, but I would argue that the best is

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Taylor Dart profile picture
"A bull market is when you check your stocks every day to see how much they went up. A bear market is when you don't bother to look anymore."- John Hammerslough You can access more in-depth research, my current portfolios, new positions I am entering/exiting, and proprietary sentiment indicators for gold miners in my newsletter below.  Returns Link: https://imgur.com/a/6fcWjD6Subscription Link: https://buy.stripe.com/3cseV37nl9Y7dUcaEI - Disclosure: I am not a financial advisor. All articles are my opinion - they are not suggestions to buy or sell any securities. Perform your own due diligence and consult a financial professional before trading or investing.

Analyst’s Disclosure: I am/we are long GLD. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

Disclaimer: Taylor Dart is not a Registered Investment Advisor or Financial Planner. This writing is for informational purposes only. It does not constitute an offer to sell, a solicitation to buy, or a recommendation regarding any securities transaction. The information contained in this writing should not be construed as financial or investment advice on any subject matter. Taylor Dart expressly disclaims all liability in respect to actions taken based on any or all of the information on this writing.

Seeking Alpha's Disclosure: Past performance is no guarantee of future results. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. Any views or opinions expressed above may not reflect those of Seeking Alpha as a whole. Seeking Alpha is not a licensed securities dealer, broker or US investment adviser or investment bank. Our analysts are third party authors that include both professional investors and individual investors who may not be licensed or certified by any institute or regulatory body.

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Comments (16)

Hi Taylor, BTGs Gramalote JV project is in Colombia, not the Philippines. Long and large BTG!
Taylor Dart profile picture
Hi Pickaxe,

Thank you, knew that, but clearly didn't convey it in the article. Had OceanaGold on the brain as was doing research on both at once, will fix!
JrMastermind profile picture
We need to remember that we're not trading gold itself. Pandemics can shut down gold mines too.
Good point.
Here is a link where they discuss a mining recommendation from Stephan Leeb
Yes, that website does great detective work.
Fiddle1 profile picture
Swiss Maven profile picture
Excellent update. Hard to see the stock pulling back 25% from current levels unless gold itself were to collapse below $1,500 or the overall stock market itself were to collapse. BTO is one of the real stars in the PM firmament.
Taylor Dart profile picture
Hi Swiss Maven,

Thank you, happy it was of value.

I meant 25% pullbacks from the highs, in which we're already off 25%, as noted by the $3.80~ level, so another 5% to go and I'd consider it a low risk area to start to scale into a position.
Fiddle1 profile picture
I appreciate your research on gold stocks.
Am long several of your recommendations, with good results.
I am a retired medical professional, and it is my opinion that the effects of the corona virus may reach the equivalent of the 1918 pandemic, resulting in global unrest and panic.
Gold may be the main asset investors flee to.
Your recommendations should do well.
BTW a Dr Stephen Leeb is touting a gold stock that supposedly will soar more than any other.
Of course, you have to listen to a lengthy spiel, and plop down a significant sum, to get him to reveal this “best of all gold stocks “. Selling for about 9 bucks now, says he. Any idea as to how legitimate he may be, and what that magnificent stock may be?
FWIW, having spent 5 minutes researching Dr Stephen Leeb, I believe your pseudonym and he have much in common.
Taylor Dart profile picture
Hi Fiddle,

Thank you very much, I'm flattered to hear you've done well with some of them. I'm not familiar with him, so I'd just be guessing at this point. If I knew his work well I could maybe venture a guess based on share price, but it would depend what date this share price was, and what his style is, of which I know neither.

Sorry cant be more help!
Wimal profile picture
This seems to be the newsletter writer you mention;
Why pay for his secret when we have access to data to analyse all gold stocks here of SA?
le patron profile picture
As a long term holder of BTG, I really appreciate your detailed coverage and expert opinion.
Do you have an opinion on Teranga Gold, another growing African miner?
Taylor Dart profile picture
Hi Le Patron,

Thank you, flattered to hear you found it of value.

I like Teranga for gold producers, it would make my top 5 in Africa though. Runners-up in the group would be Teranga and Roxgold behind B2Gold. Ultimately, I think B2Gold can get AISC under $800/oz long-term if they can bring Gramalote online, so it has much more attractive margins than Teranga which is closer to the industry average ($950/oz).
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