Strong Q2 results lift B2Gold shares to record high

Shares of B2Gold rallied by over 11% Wednesday morning, at one point hitting an all-time high of C$5.36 per share. The company’s market capitalization stands at C$5.2 billion.

During Q2 2019, B2Gold recorded an adjusted net income of C$52 million, or 5 cents per share, which exceeded the Zacks Consensus Estimate of 3 cents.

All-in sustaining costs were $807 per ounce, well below its budget by 10%, and a 23% improvement year-over-year

Behind the better-than-expected earnings was quarterly production of 246,020 ounces, which was 8% above the company’s budget and 2% better than the same quarter last year. This production jump can be attributed to strong operational results from its Fekola, Masbate, Otjikoto and La Libertad mines during the reported quarter.

B2Gold also outperformed its cost expectations for the quarter. All-in sustaining costs (AISC) were $807 per ounce, well below its budget by 10%, and a 23% improvement year-over-year. Consolidated cash operating costs came in at $456 per ounce, 8% below budget.

These cost figures did not take into account the El Limon and La Libertad gold mines in Nicaragua, which B2Gold plans to sell to Calibre Mining for $100 million and a significant stake in Calibre. It is expected that B2Gold’s expenses will be reduced once the companies join forces to develop Nicaraguan assets.

Another source of cost savings may come from B2Gold’s planned $50 million expansion of the Fekola mine in Mali, with a large-scale solar project that could help reduce processing costs by 7%.

Backed by its operational results so far this year, B2Gold has maintained its 2019 output guidance of 935,000-975,000 ounces. AISC guidance for 2019 is $835-$875 per ounce, while cash operating cost guidance is set at $520-$560 per ounce.