B2Gold Benefits from Strong Mine Performance Despite Cost Issues


Despite rising inflationary costs, B2Gold Corp. (NYSE:BTG) has benefited from improving mining performance and recent acquisitions. Because of its focus on growth through further exploration, development, and extension of current assets, the company continues to create good operating results. The recent increase in the price of gold will benefit the company’s performance in the next quarters.

This company’s shares have increased 14.3% over the last six months, outperforming the industry’s rise of 20.1%.

Mines to Meet 2023 Production Targets

In the first quarter of 2023, B2Gold reported total gold production of 266,856 ounces, including 16,137 ounces attributable to Calibre Mining Corp. The Fekola Mine produced 165,864 ounces in the third quarter, helped by a favorable mine phasing sequence that begins in 2023, with Phase 6 of the Fekola pit sending high-grade ore to the treatment plant. B2Gold’s operations are all on track to meet or exceed their annual production targets.

B2Gold’s overall gold production projection for 2023 is between 100,000 and 10,80,000 ounces, supported by stable delivery and a boost in mine performance. In 2022, total gold production was 1,027,874 ounces. The company wants to pursue significant internal growth by expanding existing projects through further exploration, development, and expansion.

In 2023, gold production at the Fekola mine is estimated to range between 580,000 and 610,000 ounces. The Fekola mine is expected to process 9 million tons of ore in 2023, with an average grade of 2.20 g/t gold and a process gold recovery rate of 93.4%. Because of increased sustaining capital expenditure, Fekola’s all-in-sustaining costs are predicted to grow in 2023.

Bodes for a Strong Balance Sheet Well

Long-term debt for B2Gold was $35 million at the end of the first quarter, compared to $42 million at the end of 2022. It has a $600 million revolving credit facility available. For an additional $200 million in contractual pledges, the corporation offers an accordion feature. B2Gold’s dividend rate remains at 4 cents per share, owing to the company’s excellent financial position and operating results. Its dividend yield is among the highest in the gold category.

The Recent Increase in Gold Prices Will Help the Top Line

The gold price in 2022 was heavily influenced by consistently rising inflation and interest rates. The stronger US dollar, higher interest rates, and lackluster growth also weighed on prices. The uncertainty surrounding global economic development, on the other hand, has fuelled gold and silver prices this year. The gold price is currently about $1,974 per ounce. This increase in gold and silver prices is expected to boost B2Gold’s earnings in the following quarters.

Margins Are Still Being Harmed by High Input Costs

B2Gold is experiencing cost inflation pressure across all sites, affecting input prices such as reagents, fuel, and consumables. Cash operating costs are expected to range between $670 and $730 per ounce in 2023. AISC is projected to cost between $1,195 and $1,255 per ounce. Both are projected to be higher than their levels in 2022. Higher gasoline and labor costs, combined with a stronger currency, are boosting these increases.

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About the author: Stephanie Bédard-Châteauneuf has over seven years of experience writing financial content for various websites. Over the years, Stephanie has covered various industries, with a primary focus on tech stocks, consumer stocks, market news, and personal finance. She has an MBA in finance.