B2GOLD was on track to meet production guidance of one million to 1.05 million oz of gold for its 2020 financial year, but said it had taken a precautionary step of drawing down on a portion of its revolving credit facility (RCF).
The Toronto-listed firm said that “… given the current uncertainty resulting from the COVID-19 pandemic” it had drawn on a further $250m of its $600m RCF. This was to “… provide additional liquidity flexibility and assurance until the ultimate timing and outcome of the COVID-19 pandemic can be reasonably determined”.
It had no pressing debt repayment deadlines but it would monitor its options including the possibility of discretionary capital expenditure. The company started the financial year with $140m in cash and cash equivalents to which it added in the year to date.
Assuming production guidance continued to be met, and in the absence of other unforeseen work stoppages due to COVID-19, B2Gold said it expected to “… have the option to repay the entire drawn balance of $425m under its RCF over the course of the 2020 fiscal year and finish 2020 in a strong net positive cash position”.
There were no reported cases of COVID-19 at the firm’s operations which are located in Mali (Fekola mine), Namibia (Otjikoto) as well as Masbate in the Philippines. Group output was strong for the first quarter of the 2020 financial year.
Consolidated gold production totalled 250,632 oz for the first quarter which was 7% or some 16,156 oz above budget and a one quarter (50,090 oz) increase in production over the first quarter of 2019, excluding discontinued operations.
Principal among the firm’s performers was Fekola: it achieved record quarterly gold production of 164,011 oz – 9% above budget and 49% higher – or some 53,662 oz – than gold production in the first quarter of B2Gold’s 2019 financial year.
The dollar gold price has also been good to B2Gold during the period. The firm reported record consolidated gold revenue from its three operating mines of $380m – some 44% higher than revenue for the first quarter of the 2019 financial year, excluding discontinued operations.
Based on current assumptions, including a gold price of $1,500/oz for the balance of 2020, B2Gold said it expected to generate cashflows from operating activities of more than $700m for the current financial year.
In terms of shareholder returns, 2019 was a breakthrough year for B2Gold which unveiled in November plans for a maiden annual dividend payment of $0.04 US cents. The first was paid in the wake of the third quarter with the balance to be paid quarterly.
