B2Gold Corp.
B2Gold Corp. (NYSE: BTG) operates as an international, financially efficient, leading gold mining firm with seniority. It presently runs three open-pit gold mines in Mali, Namibia, and the Philippines, alongside multiple exploration initiatives spanning four continents. Its noteworthy holdings encompass the Gramalote and Kiaka gold ventures. The company's core focus revolves around acquiring and advancing mineral assets, with a particular emphasis on gold deposits, constituting its primary income source. Its revenue isn't reliant on a single buyer since it sells gold on the global market.
Recent Financial and Business Updates:
- Second Quarter Income Statement Review:
- The combined revenue from gold reached USD471 million, marking a 23% increase (USD89 million) compared to previous periods. This boost in revenue was attributed to a 16% rise in the quantity of gold ounces sold and a 6% increase in the average realized gold price.
- Notably, the Masbate and Otjikoto mines exceeded their anticipated production targets by 11% and 5% respectively, although this was counterbalanced by Fekola's production, which fell short of the budget by 5%.
- The overall all-in sustaining costs for gold per ounce sold amounted to USD1,210, in contrast to USD1,109 per ounce sold recorded in the same quarter of the previous year.
- The company generated a net income of USD92 million, a substantial increase compared to the USD41 million net income reported in the second quarter of 2022.
- Cash flow provided by operating activities totalled USD195 million in the second quarter of 2023, marking a USD70 million increase over the second quarter of 2022.
- The improvement can in cash flow was primarily attributed to higher revenues of USD89 million and reduced production costs of USD6 million, partially offset by increased royalty costs of USD9 million and reduced gains realized on fuel forward contracts.
- Balance Sheet Review:
- Total current assets amounted to USD18 million as of June 30, 2023.
- Total current liabilities were USD319.20 as of June 30, 2023.
- Shareholders’ equity amounted to 4.022 billion as of June 30, 2023.
- Business Update:
- B2Gold revealed that it has entered into a purchase agreement with AngloGold Ashanti Limited, in which it will acquire AngloGold's 50% ownership stake in the Gramalote project situated in the Antioquia region of Colombia.
- Once the transaction is finalized, B2Gold will assume full ownership, possessing 100% of the Gramalote Project.
- The purchase price will be paid in cash and will be structured as follows, with payments to AngloGold being dependent on specific milestones:
- USD20 million upon the completion of the Transaction.
- USD10 million when B2Gold announces its decision to commence construction at the Gramalote Project.
- USD10 million when commercial production begins at the Gramalote Project, contingent on this production starting within five years of the Transaction's completion. If commercial production does not commence within this timeframe, no payment will be made.
- USD10 million on the first anniversary of the commencement of commercial production at the Gramalote Project.
- USD10 million on the second anniversary of the commencement of commercial production at the Gramalote Project.
- Dividend Update:
- The company announced that its Board of Directors approved a cash dividend amounting to USD0.04 per common share (equivalent to an anticipated annualized dividend of USD0.16 per share). It will be distributed on September 29, 2023, to shareholders who are recorded as such on September 21, 2023.
- The company announced the introduction of a Dividend Reinvestment Plan that offers the option to have the cash dividends declared on their common shares reinvested automatically into additional common shares of the Company.
Underlying Commodities Analysis:
Gold experienced a marginal uptick, reaching a level of USD 1,873 per ounce on Friday but fell to levels of USD 1,850s. This movement was influenced by the release of the US PCE report, which contributed to the perception of diminishing inflationary pressures. In particular, the core PCE price index, the preferred measure of inflation by the Federal Reserve, registered a modest 3.9% increase in August, marking its lowest level since September 2021, aligning with market projections. Meanwhile, the headline inflation rate inched up to 3.5%, in line with expectations. Furthermore, both personal income and outlays demonstrated substantial growth, with both figures in accordance with consensus estimates. Nevertheless, it is noteworthy that gold continued to trade near its lowest point since March 10th, influenced by the strength of the US dollar and the rising Treasury yields, stemming from expectations of the US Federal Reserve's intention to maintain a tight monetary policy over an extended timeframe.
Technical Observation (on the daily chart)
The stock is currently near its 52-week low which was attained on Thursday, September 28, 2023. The Relative Strength Index (RSI) over a 14-day period stands at 33.29 nearing towards oversold zone. The stock price is currently near its important support level at USD 2.60– USD 2.80. Additionally, the stock's current positioning is below both 21-period SMA, and 50-period SMA, which may serve as a dynamic short-term resistance levels.
As per the above-mentioned price action, recent key business and financial updates, momentum in the stock over the last month, and technical indicators analysis, a ‘Buy’ rating has been given to B2Gold Corp. (NYSE: BTG) at its price of USD 2.88 as of September 29, 2023, at 7:50 am PDT.
Individuals can evaluate the stock based on the support and resistance levels provided in the report in case of keen interest taking into consideration the risk-reward scenario.
Markets are trading in a highly volatile zone currently due to certain macro-economic issues and prevailing geopolitical tensions. Therefore, it is prudent to follow a cautious approach while investing.
Related Risk: This report may be looked at from a high-risk perspective and a recommendation is provided for a short duration. This report is solely based on technical parameters, and the fundamental performance of the stocks has not been considered in the decision-making process. Other factors which could impact the stock prices include market risks, regulatory risks, interest rates risks, currency risks, social and political instability risks etc.
How to Read the Charts?
The yellow colour line reflects the 21-period simple moving average (SMA) while the blue line indicates the 50- period simple moving average (SMA). SMA helps to identify existing price trends. If the prices are trading above the 21-period and 50-period moving average, then it shows prices are currently trading in a bullish trend.
The orange colour line in the chart’s lower segment reflects the Relative Strength Index (14-Period) which indicates price momentum and signals momentum in trend. A reading of 70 or above suggests overbought status while a reading of 30 or below suggests an oversold status.
The red and green colour bars in the chart’s lower segment show the volume of the stock. The volume is the number of shares that changed hands during a given day. Stocks with high volumes are more liquid than stocks with lesser volume as liquidity in stocks helps with easier and faster execution of the order.
The Orange colour lines are the trend lines drawn by connecting two or more price points and used for trend identification purposes. The trend line also acts as a line of support and resistance.
Technical Indicators Defined: -
Support: A level at which the stock prices tend to find support if they are falling, and a downtrend may take a pause backed by demand or buying interest. Support 1 refers to the nearby support level for the stock and if the price breaches the level, then Support 2 may act as the crucial support level for the stock.
Resistance: A level at which the stock prices tend to find resistance when they are rising, and an uptrend may take a pause due to profit booking or selling interest. Resistance 1 refers to the nearby resistance level for the stock and if the price surpasses the level, then Resistance 2 may act as the crucial resistance level for the stock.
Stop-loss: It is a level to protect further losses in case of unfavourable movement in the stock prices.
The reference date for all price data, currency, technical indicators, support, and resistance levels is September 29, 2023. The reference data in this report has been partly sourced from REFINITIV.
Abbreviations
CMP: Current Market Price
SMA: Simple Moving Average
RSI: Relative Strength Index
USD: United States dollar
Note: Trading decisions require a thorough analysis by individual. Technical reports in general chart out metrics that may be assessed by individuals before any stock evaluation. The above are illustrative analytical factors used for evaluating the stocks; other parameters can be looked at along with additional risks per se. Past performance is neither an indicator nor a guarantee of future performance.
Disclaimer - This report has been issued by Kalkine Pty Limited (ABN 34 154 808 312) (Australian financial services licence number 425376) (“Kalkine”) and prepared by Kalkine and its related bodies corporate authorised to provide general financial product advice. Kalkine.com.au and associated pages are published by Kalkine.
Any advice provided in this report is general advice only and does not take into account your objectives, financial situation or needs. You should therefore consider whether the advice is appropriate to your objectives, financial situation and needs before acting upon it.
There may be a Product Disclosure Statement, Information Statement or other offer document for the securities or other financial products referred to in Kalkine reports. You should obtain a copy of the relevant Product Disclosure Statement, Information Statement or offer document and consider the statement or document before making any decision about whether to acquire the security or product.
You should also seek advice from a financial adviser, stockbroker or other professional (including taxation and legal advice) as necessary before acting on any advice in this report or on the Kalkine website. Not all investments are appropriate for all people.
The information in this report and on the Kalkine website has been prepared from a wide variety of sources, which Kalkine, to the best of its knowledge and belief, considers accurate. Kalkine has made every effort to ensure the reliability of information contained in its reports, newsletters and websites. All information represents our views at the date of publication and may change without notice.
Kalkine does not guarantee the performance of, or returns on, any investment. To the extent permitted by law, Kalkine excludes all liability for any loss or damage arising from the use of this report, the Kalkine website and any information published on the Kalkine website (including any indirect or consequential loss, any data loss or data corruption). If the law prohibits this exclusion, Kalkine hereby limits its liability, to the extent permitted by law, to the resupply of services. Please note past performance is neither an indicator nor a guarantee of future performance.
Please also read our Terms & Conditions and Financial Services Guide for further information.
Employees and/or associates of Kalkine and its related entities may hold interests in the securities or other financial products covered in this report or on the Kalkine website. Any such employees and associates are required to comply with certain safeguards, procedures and disclosures as required by law.
Kalkine Media Pty Ltd, an affiliate of Kalkine Pty Ltd, may have received, or be entitled to receive, financial consideration in connection with providing information about certain entity(s) covered on its website including entities covered in this Report.