B2Gold Corp. (BTG, Financial) provided its shareholders with complete financial results for the third quarter on Nov. 8.
Third-quarter figures can be found on the company’s website as well as those concerning the production of gold and sales that were already released on Oct. 13.
Concerning the third-quarter figures on production and sales you can also read my previous article on B2Gold.
The Canadian mining company closed the quarter with an EPS – on a diluted basis – of 0 cents (zero) versus a diluted figure for EPS of 4 cents, the miner reported at the end of the prior-year quarter.
Third-quarter earnings were in line with expectations.
Concerning the quarterly figure of revenue, this came in at $154.1 million. This was a 20.2% decrease from the comparable of fiscal 2016. But B2Gold beat expectations by $2.29 million.
Lower sales volume and gold price impinged not only on revenue and net income – when these are compared with the same items of one year ago – but they also negatively influenced the cash flow that B2Gold generated during the quarter from its operations that went down $48.5 million to a figure of $41.772 million.
Of course, on the financial figures of the quarter weighed also the sustainment by B2Gold of higher production costs since invariable costs were spread over a lower volume of gold production compared to one year ago: 135,628 ounces of gold produced in third-quarter 2017 (including the ounces of pre-commercial production from Fekola mine versus 146,686 ounces of gold produced in third-quarter 2016).
The company also used more funds in investing activities: $121.26 million in the third quarter versus an amount of $93.59 million in the third quarter of fiscal 2016.
Therefore, the outflow worsened from one year ago. Despite this, though, B2Gold says that “the company remained in a solid financial position with unrestricted cash and cash equivalents of $89.7 million” with an undrawn credit facility of $175 million as of Sept. 30, plus two capacities of undrawn credit for 36.4 million euros ($42.17 million) on its Fekola equipment loan facility and for $9.1 million on its Masbate equipment loan facility.
For full-year 2017, the company says it is on track to meet the production of 570,000 ounces of gold. Cash operating costs are expected to neighbor $610 per ounce while the all-in sustaining cost (or AISC) is expected to be $940 to $970 per ounce.
B2Gold is trading at $2.56 per share with a market capitalization of $2.47 billion.
The price-book (P/B) ratio is 1.61, the price-sales (P/S) ratio is 3.55, and the price-earnings (P/E) ratio is 46.50.
The enterprise value-EBITDA ratio is 12.03. The most recent statement on B2Gold’s probable reserves says that the Canadian miner has a total volume of 7.281 million ounces of gold for an EVO – enterprise value per ounce of gold reserve – of $413.40. Probably this stock is not one of the cheapest in the gold stock industry at the moment. It is trading 26.7% higher than its 52-week low of $2.02 (the 52-week high is $3.55) and year to date it gained 8% even though the stock has been downtrending since the last trading month.
According to the 200 and 50 simple moving average lines B2Gold is not overvalued:
My previous article on B2Gold also describes the catalyst to this gold stock and has to do with the company’s expectations on gold production for full fiscal 2018.
The average target price set by analysts is $3.5. The recommendation rating on B2Gold cannot but be very low and close to a suggestion of strong buy (1.5 of 5).
Disclosure: I have no position in B2Gold.
