RoryThackerol的部落格

Summary

• Web income defeat analysts' estimates by one cent.
• Gold mines in Nicaragua noticed costs rise, but was offset by reduced-price manufacturing in the Philippines and Namibia.
• The industry is anticipating the feasibility review for the Fekola gold venture in Mali in June.
• Escalating minimal-expense generation is fueling functioning funds circulation development.

B2Gold (NYSEMKT:BTG) shipped 1st quarter net earnings and revenues that topped analysts' expectations. The increase in gold creation and product sales pushed ahead good web earnings for the initial time in in excess of a yr. The low-expense manufacturing from the new Otjikoto mine contributed to functioning money flow growth above a quarterly and yearly foundation.

We count on B2Gold to recognize quicker income and earnings expansion in the following few of several years with the mill enlargement at Otjikoto and the commencement of manufacturing at Fekola in 2018. The strong pipeline of gold assignments in Mali, Burkina Faso and Columbia, like brownfield exploration on current properties opens possibilities for long term organic and natural expansion.

Determine 1: Map of operations. Supply: B2Gold

Earnings beat

B2Gold finished the March quarter with $138.89 million in gold earnings, beating analyst forecasts by $eight.45 million regardless of the 8% pullback in U.S. gold costs. Strong operational outcomes notably at the Masbate and Otjikoto gold mines fueled profitability in the quarter. Web cash flow was $six.34 million or one cent for each share, compared to a web loss of $23.ninety eight million or $(.04) for every share a yr ago. Analysts had modeled the business to earn $nil per share.

Operating cash fees ended up $701/oz and seven% or $fifty one/oz reduced than what the organization had expected. This is reflective of the price personal savings at Masbate and the begin-up of minimal-cost commercial creation at Otjikoto on Feb. 28. Otjikoto produced an ounce of gold at a price of $477/oz or twelve% decrease than budged (positively impacted by the weaker Namibian greenback). Operating money costs improved above the year largely due to less productivity and performance at the Nicaraguan gold belongings.

Working funds costs US$ per ounce

1Q15 Actual

1Q15 Spending budget

1Q14 True

Masbate

674

741

723

La Libertad

841

841

541

Limon

738

817

624

Otjikoto

477

541

-

Whole

701

752

634

Resource: B2Gold

Climbing running money fees at the La Libertad and Limon gold mines in Nicaragua resulted from the mining and processing of minimal-quality ore and reduced gold creation. We expect gold grades to decide up in the next few quarters at equally mines when B2Gold starts to mine out La Libertad's substantial-quality Jabali Antenna and Los Angeles deposits and Limon moves to one hundred% underground-dependent manufacturing to obtain high-grade ore.

Higher-quality content from each Nicaraguan property will increase working income charges heading forward considering that it fees considerably less to procedure and create. However, the for a longer time truck haul distances from the Jabali Antenna deposit to the processing plant and the ramp-up of underground mining at the Mojon central deposit should insert to La Libertad's costs and tighten income margins compared to last year's results.

Powerful emphasis on long term expansion

We believe B2Gold has a sturdy pipeline of new gold initiatives that will change the company's progress trajectory in excess of the up coming 5-furthermore a long time. The scheduled growth of the Otjikoto plant to accomplish three million tonnes per 12 months throughput (from 荃灣迷你倉.5 Mtpa) should comprehensive by the stop of August or early September 2015. The firm expects the growth to boost Otjikoto's output to about 200,000 ounces in 2016 and 210,000 in 2017.

The Otjikoto plant will procedure further throughput from the completely permitted Wolfshag deposit that is located right away adjacent to the principal Otjikoto deposit. We anticipate open pit mining and contributions from Wolfshag to start-up in late 2016. Total, Otjikoto has a life-of-mine average gold production of 175,000 ounces for each annum in excess of nine many years at industry minimal functioning income expenses of $550 to $575 an ounce. The five-12 months average details to one hundred eighty,000 ounces per annum at $445 to $470 an ounce.

In Mali, the Fekola gold project (ninety% desire) is on keep track of to supply an up-to-date mineral useful resource and feasibility examine by June thirty. We feel this near-term catalyst could push the stock higher if gold costs keep flat and the feasibility examine meets or exceeds anticipations. B2Gold estimates Fekola to produce about 300,000 ounces of gold annually and add to the firm's already reduced-price manufacturing base.

Road design and internet site earthworks at Fekola commenced in February and remains in advance of schedule, according to the organization, with the very first complete calendar year of generation estimated in 2018. The new $350 million revolving credit facility (RCF) signed on May possibly twenty with a syndicate of global banking institutions provides B2Gold adequate liquidity to have on current operations and finance the preliminary cash fees of the Fekola task.

The 4-yr RCF expenses curiosity on a sliding scale from LIBOR furthermore 2.25% to 3.twenty five% dependent on the company's consolidated internet leverage ratio and matures on Could 20, 2019. The day to maturity could shorten to July one, 2018 if the company's 3.25% convertible senior subordinated notes (due Oct. 2018) stay fantastic or not prolonged soon after Might 20, 2019. The organization has the adaptability to boost the RCF by $one hundred million prior to the maturity date.

1Q15 True

Lengthy time period debt:

Convertible senior subordinated notes

$230,171,000

Revolving corporate credit score facility

$121,990,000

Products and finance lease financial loans

$31,650,000

Whole

$370,074,000

Supply: B2Gold

B2Gold will use the proceeds from the new bank loan to not only finance Fekola, but also repay the firm's present $200 million RCF in which $one hundred twenty five million is drawn. Total credit card debt is $383.8 million as of the March quarter and is composed of $thirteen.7 million in quick-expression credit card debt and $370.one million in long time period personal debt as famous previously mentioned. The business has a robust liquidity situation, with internet credit card debt of $255.six million and working income flows steadily developing on a quarterly basis.

Mar-2014

Jun-2014

Sep-2014

Dec-2014

Mar-2015

Running income flow

$17,737,000

$24,216,000

$33,183,000

$38,564,000

$58,663,000

Free money circulation

-$77,325,000

-$sixty three,447,000

-$29,644,000

-$27,540,000

$one,762,000

Resource: Morningstar

We feel the improve in reduced-expense production from Otjikoto and the company's other mine's will largely come in line with full 12 months assistance estimates. B2Gold estimates gold generation to boost by as significantly as 38% to 500,000 and 540,000 ounces in 2015 with running funds expenses in between $630 and $660 an ounce. We count on B2Gold to comprehend quicker income and profit development in the following few of several years with the mill growth at Otjikoto and the commencement of generation at Fekola in 2018.