B2Gold Reports Strong Q2 2021 Results

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August 4, 2021 | 19:36 ET

VANCOUVER, BC, August 4, 2021 /PRNewswire/ – B2Gold Corp. (TSX: BTO) (NYSE AMERICAN: BTG) (NSX: B2G) (“B2Gold” or the “Company”) is pleased to announce its operational and financial results for the second quarter and first half of 2021. The Company previously released its gold production and gold revenue results for the second quarter and first half of 2021. All dollar figures are in United States dollars unless otherwise indicated.

2021 Second Quarter Highlights

Total gold production of 211,612 ounces (including 14,232 ounces of attributable production from Calibre Mining Corp. (“Calibre”), well above budget by 5% (10,269 ounces), and consolidated gold production of 197,380 ounces from the Company’s three operating mines, well above budget by 5% (9,787 ounces)
Consolidated gold revenue of $363 million on sales of 200,071 ounces at an average price of $1,814 per ounce
Fekola’s mill throughput `was a quarterly record of 2.29 million tonnes, 16% above budget and 47% higher than the second quarter of 2020, following the successful completion of the Fekola mill expansion in September 2020
Total cash operating costs (see “Non-IFRS Measures”) (including estimated attributable results for Calibre) of $664 per ounce produced and consolidated cash operating costs from the Company’s three operating mines of $649 per ounce produced, both approximately in-line with budget
Total all-in sustaining costs (“AISC”) (see “Non-IFRS Measures”) (including estimated attributable results for Calibre) of $1,016 per ounce sold and consolidated AISC from the Company’s three operating mines of $1,011 per ounce sold, both below budget by 3%
Net income attributable to the shareholders of the Company of $68 million ($0.07 per share); adjusted net income (see “Non-IFRS Measures”) attributable to the shareholders of the Company of $52 million ($0.05 per share)
B2Gold maintains a strong financial position and liquidity with cash and cash equivalents of $382 million as at June 30, 2021, and its $600 million Revolving Credit Facility remains fully undrawn and available

2021 First Half Highlights

Total gold production of 432,256 ounces (including 29,233 ounces of attributable production from Calibre), well above budget by 7% (28,811 ounces), and consolidated gold production of 403,023 ounces from the Company’s three operating mines, well above budget by 7% (27,078 ounces)
Consolidated gold revenue of $725 million on sales of 402,401 ounces at an average price of $1,802 per ounce
Total cash operating costs (including estimated attributable results for Calibre) of $636 per ounce produced and consolidated cash operating costs from the Company’s three operating mines of $615 per ounce produced, both below budget by 4%
Total AISC (including estimated attributable results for Calibre) of $974 per ounce sold, below budget by 8%, and consolidated AISC from the Company’s three operating mines of $965 per ounce sold, below budget by 9%
Net income attributable to the shareholders of the Company of $160 million ($0.15 per share); adjusted net income attributable to the shareholders of the Company of $149 million ($0.14 per share)
Construction of the Fekola solar plant now complete and 100% online; Fekola’s solar production to date indicates that the plant will exceed initial power production estimates
Selected as the recipient of five mining industry awards in the Philippines and Mali
For full-year 2021, B2Gold remains well positioned for continued strong operational and financial performance and is on track to meet or exceed the upper end of its total gold production forecast of between 970,000 – 1,030,000 ounces (including 50,000 – 60,000 attributable ounces projected from Calibre) with forecast total cash operating costs of between $500 – $540 per ounce and total AISC of between $870 – $910 per ounce
Based on current assumptions, including a gold price of $1,800 per ounce, the Company expects to generate cashflows from operating activities of approximately $630 million for the full-year 2021 (approximately $500 million of cashflows from operating activities are expected to be generated in the second half of 2021)

Second Quarter and First Half of 2021 Operational Results

Total gold production in the second quarter of 2021 was 211,612 ounces (including 14,232 ounces of attributable production from Calibre), well above budget by 5% (10,269 ounces), and consolidated gold production of 197,380 ounces from the Company’s three operating mines, well above budget by 5% (9,787 ounces).

The Fekola Mine in Mali continued its strong operational performance through the second quarter of 2021, producing 113,611 ounces of gold, 3% (3,611 ounces) above budget, as the Fekola processing facilities continued to outperform following the successful completion of the Fekola mill expansion in September 2020. In the second quarter of 2021, Fekola’s mill throughput was a quarterly record of 2.29 million tonnes, 16% above budget and 47% higher than the second quarter of 2020. The Masbate Mine in the Philippines also continued its strong operational performance with second quarter of 2021 gold production of 56,878 ounces, well above budget by 8% (4,390 ounces), as processed grade (8% above budget) and recoveries (10% above budget) both exceeded budget which more than offset lower than budgeted throughput (8% below budget). The Otjikoto Mine in Namibia performed well during the second quarter of 2021, producing 26,891 ounces of gold, well above budget by 7% (1,786 ounces), mainly due to higher than budgeted processed grade (5% above budget) as the grade of ore sourced from the medium grade stockpile was slightly higher than anticipated during the second quarter. As expected, compared to the second quarter of 2020, total gold production was lower by 12% (29,981 ounces) due to planned significant waste stripping campaigns at both the Fekola and Otjikoto mines, which were largely completed in the first half of 2021 (for Phase 5 and Phase 6 of the Fekola Pit, and Phase 3 of the Wolfshag and Otjikoto pits). Gold production is expected to significantly increase in the second half of 2021, when mining at Fekola reaches the higher-grade zones of the Fekola Pit and mining at Otjikoto reaches the higher-grade zone at the base of the Wolfshag Pit.

For the second quarter of 2021, total cash operating costs (including estimated attributable results for Calibre) were $664 per ounce produced ($675 per ounce sold) and consolidated cash operating costs from the Company’s three operating mines were $649 per ounce produced ($661 per ounce sold). Consolidated cash operating costs were approximately in-line with budget in the second quarter of 2021, as above budgeted gold production largely offset higher than budgeted realized fuel prices and processing costs. As expected, consolidated cash operating costs were higher in the second quarter of 2021 compared to $385 per ounce produced ($377 per ounce sold) in the second quarter of 2020, mainly due to the planned lower gold production and higher period stripping activities (described above). Total AISC (including estimated attributable results for Calibre) for the second quarter of 2021 were $1,016 per ounce sold (Q2 2020 – $712 per ounce sold) and consolidated AISC from the Company’s three operating mines were $1,011 per ounce sold (Q2 2020 – $714 per ounce sold). Consolidated AISC were $32 per ounce sold (3%) below budget in the second quarter of 2021, reflecting higher than budgeted gold ounces sold, higher than budgeted gains on settled fuel derivatives and lower than budgeted sustaining capital expenditures partially offset by higher than budgeted royalties resulting from a higher average gold price realized than budgeted. The lower sustaining capital expenditures were mainly a result of timing of expenditures and are expected to be incurred later in 2021.

For the first half of 2021, total gold production was 432,256 ounces (including 29,233 ounces of attributable production from Calibre), well above budget by 7% (28,811 ounces), and 15% (74,199 ounces) lower than the first half of 2020 (for the same reasons outlined above). Consolidated gold production from the Company’s three operating mines was 403,023 ounces in the first half of 2021.

For the first half of 2021, total cash operating costs (including estimated attributable results for Calibre) were $636 per ounce produced ($628 per ounce sold) (first half of 2020 – $390 per ounce produced and $394 per ounce sold) and consolidated cash operating costs from the Company’s three operating mines were $615 per ounce produced ($606 per ounce sold) (first half of 2020 – $376 per ounce produced and $380 per ounce sold). Consolidated cash operating costs were $25 per ounce produced (4%) below budget in the first half of 2021, mainly attributable to higher than budgeted gold production. Total AISC (including estimated attributable results for Calibre) for the first half of 2021 were $974 per ounce sold (first half of 2020 – $717 per ounce sold) and consolidated AISC from the Company’s three operating mines were $965 per ounce sold (first half of 2020 – $705 per ounce sold). Consolidated AISC were $95 per ounce sold (9%) below budget in the first half of 2021, reflecting higher than budgeted gold ounces sold, higher than budgeted gains on settled fuel derivatives and lower than budgeted sustaining capital expenditures partially offset by higher than budgeted royalties resulting from a higher average gold price realized than budgeted. The lower sustaining capital expenditures were mainly a result of timing of expenditures and are expected to be incurred later in 2021.

For full-year 2021, the Company remains on track to meet or exceed the upper end of its total gold production forecast range of between 970,000 – 1,030,000 ounces (including 50,000 – 60,000 attributable ounces projected from Calibre) with total consolidated cash operating costs forecast to be between $500 – $540 per ounce and total consolidated AISC forecast to be between $870 – $910 per ounce. The Company’s 2021 production guidance does not currently include the potential upside to increase Fekola’s gold production in 2021 from the nearby Cardinal inferred resource area, where production is now expected to commence in the third quarter of 2021 and the higher than budgeted processing capacity realized to date at the expanded Fekola mill.

For full-year 2021, as budgeted, the Company’s consolidated gold production from its three operating mines is expected to be significantly weighted to the second half of 2021 due to the planned higher waste stripping campaigns at both the Fekola and Otjikoto mines which were largely completed in the first half of 2021. For the second half of 2021, consolidated gold production is expected to significantly increase over the first half of 2021 to between 555,000 – 585,000 ounces when mining reaches the higher grade portion of Phase 5 of the Fekola Pit and Phase 3 of the Wolfshag Pit. Based mainly on the weighting of production and timing of stripping, consolidated cash operating costs are expected to significantly improve to between $380 – $420 per ounce and consolidated AISC to between $745 – $785 per ounce during the second half of 2021.

Second Quarter and First Half of 2021 Financial Results

For the second quarter of 2021, consolidated gold revenue was $363 million on sales of 200,071 ounces at an average price of $1,814 per ounce, compared to $442 million on sales of 257,100 ounces at an average price of $1,719 per ounce in the second quarter of 2020. The decrease in gold revenue of 18% ($79 million) was 22% attributable to the decrease in gold ounces sold (mainly due to the lower gold production and timing of gold shipments), partially offset by a 4% impact from the increase in the average realized gold price.

As expected, cash flow used by operating activities was $8 million in the second quarter of 2021 compared to cash flow generated of $238 million in the second quarter of 2020. The decrease was in-line with budget and was mainly due to lower revenues of $80 million, higher production costs of $35 million and higher working capital outflows in the second quarter of 2021 for value-added and other tax receivables and current income and other taxes payables. Current income tax payments in the second quarter of 2021 included approximately $140 million related to 2020 outstanding tax liability obligations (comprised mainly of Fekola outstanding 2020 tax liabilities of $75 million and Fekola 2020 priority dividend obligations of $46 million). Based on current assumptions, including a gold price of $1,800 per ounce for 2021, the Company is forecasting to make total cash income tax payments in 2021 of approximately $380 million (including the $140 million related to 2020 outstanding tax liability obligations discussed above).

Net income for the second quarter of 2021 was $74 million compared to $138 million for the second quarter of 2020. Net income attributable to the shareholders of the Company was $68 million ($0.07 per share) compared to $124 million ($0.12 per share) for the second quarter of 2020. Adjusted net income attributable to the shareholders of the Company (see “Non-IFRS Measures”) was $52 million ($0.05 per share) compared to adjusted net income of $112 million ($0.11 per share) for the second quarter of 2020.

For the first half of 2021, consolidated gold revenue was $725 million on sales of 402,401 ounces at an average price of $1,802 per ounce compared to $822 million on sales of 496,600 ounces at an average price of $1,656 per ounce in the first half of 2020. The decrease in gold revenue of 12% ($97 million) was 19% attributable to the decrease in gold ounces sold (mainly due to the lower gold production and timing of gold shipments), partially offset by a 7% impact from the increase in the average realized gold price.

Cash flow provided by operating activities was $138 million in the first half of 2021 compared to $454 million in the first half of 2020. The decrease was mainly due to lower revenues of $97 million, higher production costs of $55 million and higher working capital outflows in the first half of 2021 for value-added and other tax receivables and current income and other taxes payables (including current income tax payments in the first half of 2021 of approximately $140 million relating to 2020 outstanding tax liability obligations).

For the first half of 2021, net income was $173 million compared to $221 million for the first half of 2020. Net income attributable to the shareholders of the Company was $160 million ($0.15 per share) compared to $197 million ($0.19 per share) for the first half of 2020. Adjusted net income attributable to the shareholders of the Company was $149 million ($0.14 per share) compared to adjusted net income of $207 million ($0.20 per share) for the first half of 2020.

Liquidity and Capital Resources

B2Gold continues to maintain a strong financial position and liquidity. At June 30, 2021, the Company had cash and cash equivalents of $382 million (December 31, 2020 – $480 million) and working capital of $558 million (December 31, 2020 – $465 million). In addition, the Company’s $600 million Revolving Credit Facility remains fully undrawn and available.

Due to the Company’s strong net positive cash position, strong operating results and the current higher gold price environment, B2Gold’s quarterly dividend rate is expected to be maintained at $0.04 per common share (or an annualized rate of $0.16 per common share), one of the highest dividend yields in the gold sector.

In 2021, the Company expects to generate cashflows from operating activities of approximately $630 million, based on current assumptions including an average gold price of $1,800 per ounce. Approximately $500 million of this total is expected to be generated in the second half of 2021, when the Company starts mining from the higher-grade areas of the Fekola Pit and mining at Otjikoto reaches the higher-grade zone at the base of the Wolfshag Pit.

Operations

Mine-by-mine gold production in the second quarter and first half of 2021 (including the Company’s estimated 33% share of Calibre’s production) was as follows:

Mine-by-mine cash operating costs per ounce (on a per ounce of gold produced basis) in the second quarter and first half of 2021 were as follows (presented on a 100% basis):

Mine-by-mine cash operating costs per ounce (on a per ounce of gold sold basis) in the second quarter and first half of 2021 were as follows (presented on a 100% basis):