B2Gold targets 650K+ ounces annual production through 2025 growth initiatives

Earnings Call Insights: B2Gold Corp. (NYSE:BTG) Q4 2024

Management View

• Clive Johnson, President and CEO, highlighted that the company achieved its revised guidance for 2024, with production at the lower end and all-in sustaining costs at the higher end. He emphasized significant growth in 2025, driven by increased production at Fekola and the Goose project.

• Production at Fekola is expected to benefit from the implementation of a new agreement with the Mali government, which enables trucking ore and underground mining operations. Goose is on track for first gold production by June 2025, while Gramalote’s feasibility study is scheduled for mid-2025.

• The company projects over 650,000 ounces of annual gold production from existing assets, including 180,000 ounces from Fekola Regional, 300,000 ounces from Goose, and the potential addition of 240,000 ounces from Gramalote, subject to feasibility outcomes.

• CFO Mike Cinnamond reported adjusted net earnings of $0.01 per share for Q4 2024 and operating cash flow of $145 million. He noted a strong balance sheet, with $337 million in cash and cash equivalents and the revolving credit facility fully repaid following a $460 million convertible note offering.

• COO Bill Lytle confirmed that all 2024 planned construction activities at Goose were completed on schedule, and the process plant is on track for production. He also highlighted improvements in underground development efficiency at Umwelt.

Outlook

• Management reiterated its growth target for 2025, underpinned by production ramp-ups at Fekola and Goose. Fekola Regional is projected to contribute 180,000 ounces annually, while Goose is expected to yield over 300,000 ounces annually starting mid-2025.

• The feasibility study for the Gramalote project, with a potential 240,000 ounces of annual gold production, is anticipated by mid-2025. The company expressed optimism about proceeding with the project depending on study outcomes.

• Exploration budgets are set to increase slightly at Goose in 2025, with a focus on regional targets. Exploration in Mali will target higher-grade sulfide resources to support mill operations at Fekola.

Financial Results

• Adjusted net earnings for Q4 2024 were $0.01 per share. Operating cash flow before working capital adjustments stood at $145 million.

• Capital expenditures for the Goose project during Q4 totaled CAD209 million, with cumulative construction and development expenditures remaining within the CAD1.54 billion budget.

• The company ended 2024 with $337 million in cash and cash equivalents and repaid its $400 million revolving credit facility in early 2025, following a convertible note offering.

Q&A

• Ovais Habib, Scotiabank, asked about regulatory requirements for Fekola Regional and Underground. Clive Johnson shared that the consolidation of licenses is on track, and permits are expected soon, with production ramp-up planned for 2025.

• Habib inquired about delays in underground mining rates at Goose. Bill Lytle explained that improvements in miner quality and equipment upgrades have resolved historical issues, with no expected impact on 2025 production.

• Ralph Profiti, Eight Capital, requested a timeline for Fekola Regional. Bill Lytle confirmed that all infrastructure is in place, and pre-stripping operations could begin in Q1 2025 if permits are approved by year-end.

Sentiment Analysis

• Analysts expressed cautious optimism, focusing on permitting progress in Mali and ramp-up at Goose. They maintained a neutral tone, seeking clarity on timelines and capital allocation strategies.

• Management demonstrated confidence in achieving 2025 growth targets, emphasizing alignment with the Mali government and progress at Goose. Phrases like "we are very much on track" and "we see substantial growth" highlighted their optimism.

• Compared to the previous quarter, management’s tone was more upbeat, reflecting resolution of key challenges in Mali and strong progress at Goose.

Quarter-over-Quarter Comparison

• Guidance language shifted positively, with management now projecting significant production increases in 2025, compared to the cautious tone in Q3 2024.

• Strategic priorities evolved, with a greater focus on aligning with the Mali government and advancing the Goose project to completion.

• Analysts’ focus remained consistent, seeking updates on Mali operations and Goose construction, but their tone reflected increased confidence in management’s ability to deliver targets.

• Management conveyed greater confidence in achieving key milestones, citing resolved challenges and strong financial flexibility.

Risks and Concerns

• Management identified potential risks in permitting timelines for Fekola Regional and Underground operations. Efforts to align with the Mali government and expedite approvals were emphasized.

• Historical operational challenges at Goose are being mitigated through equipment upgrades and improved mining efficiencies.

Final Takeaway

B2Gold Corp. highlighted ambitious growth targets for 2025, driven by increased production at Fekola and Goose. The company resolved key challenges in Mali and remained on track with Goose project timelines. With a strong financial position, exploration expansion, and potential additional production from Gramalote, B2Gold signaled a return to solid performance and growth.

Read the full Earnings Call Transcript