Yesterday after market close, B2Gold Corp. reported Q3/22 financial and operating results. Production results were pre-released on October 17th, 2022. The Company reported a weaker than expected Q3 with costs within company guidance but missing our estimates and production also missing our estimates. We anticipate BTO to have a record quarter in Q4 as the Company has stated it will make up for lost production in Q3 due to the rainy season disruptions at Fekola.

Revenue for Q3 was $392M on sales of 229 Koz at a gold price of $1,711/oz, below our estimate of $426M and up from $382M in Q2. A primary driver of the miss vs estimates is due to the average realized gold price being well below Q2 of $1,861/oz and also below our modelled gold price of $1,800/oz. Operating cash flow was $93M, well below our estimate of $204M. Cash costs (excluding Calibre) were $798/oz, above our estimate of $534/oz, and above Q2 of $771/oz. Q3 AISC (excluding Calibre) came in at $1,154/oz also above our estimate of $808/oz and in line with Q2. Company guidance infers that costs are expected drastically decrease in Q4 to achieve an annual cash cost of $620-660/oz an AISC of $1,010-1,050/oz (including attributable costs projected from Calibre).

We are maintaining our BUY rating and our target price of C$10.50/share.

BTO continues to maintain a strong financial position with cash and equivalents of $549 at the end of Q3. In addition, BTO has working capital of $725M and a fully undrawn and available $600M revolving credit facility. B2Gold maintained its quarterly dividend of $0.04/share or ~5.0% annualized. 

BTO is currently conducting a ~161,000m drill program on the Fekola Complex with a budget of ~35M. The program includes the Fekola North deposit to further test the underground mineralization potential, and on the Anaconda area.

The Company completed the acquisition of Oklo on September 20th, 2022, providing BTO with an additional landholding of 1,405 km2 covering the highly prospective greenstone belts in Mali. The acquisition adds a Measured and Indicated Resource estimate of 528 Koz at 1.88 g/t Au and an Inferred Resource of 141 Koz at 1.67 g/t Au.