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B2Gold Resumes Masbate Mine Operations in the Philippines

Zacks Equity Research

B2Gold Corp. BTG announced that it has resumed mining operations at its Masbate Mine in the Philippines, which had been suspended from March 22 to March 29, 2020, owing to temporary fuel shortage.

New regulations imposed by the Philippine Government to ensure that all materials, including fuel, arriving on Masbate island are not contaminated with the COVID-19 virus was the primary reason behind the fuel shortage. This led to the temporary suspension of mining activities for the abovementioned period. Meanwhile, milling activity continued, processing ore from stockpiles. Mining has now restarted in the Montana pit using an estimated 50% of the mining fleet. The mine is anticipated to meet its budgeted gold production estimate for fiscal 2020, barring any unforeseen work stoppages due to the coronavirus crisis.

B2Gold assured that the Fekola Mine in Mali continues to operate as usual. All supply lines are open with only minor delays due to evening curfews imposed in Senegal and Mali. The Fekola Mine is currently receiving supplies, which are critical for maintaining operations at full capacity. Backed by significant reserve of stockpiles, the mine can process through second-quarter 2020. B2Gold anticipates meeting its guidance of 590,000-620,000 ounces of gold from the mine this year. Further, the expansion of the Fekola mill is expected to be completed by the end of third-quarter 2020.

The Otjikoto Mine in Namibia is likely to meet its budgeted gold production estimate for first-quarter 2020 as all supply lines remain open and it continues to receive supplies critical to operating at full capacity. It also has a significant reserve of stockpiles that it can process through second-quarter 2020 without significant change to annual guidance.

The company expects to fulfill its guidance for the fiscal. The company’s gold production guidance for the year is between 1,000,000 and 1,055,000 ounces.

B2Gold has decided to suspend drilling off the Inferred Mineral Resource at the Gramalote Project, a joint venture with AngloGold Ashanti Limited AU, due to the national state of emergency and quarantine announced by the Colombian government. However, it will continue to advance the feasibility study where possible. The company expects that the suspension of drilling is likely to delay the completion of the Gramalote project feasibility study to the first quarter of 2021.

Additionally, the company has implemented several measures and introduced additional precautionary steps to manage and respond to the risks associated with the virus to ensure the safety of employees and surrounding communities while it continues to operate.

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The virus has become a major threat to public health worldwide. Mining companies are halting their operations as different governments are imposing restrictions to combat the spread of the coronavirus.

While gold has gained from its safe haven demand, other commodities are bearing the brunt of the outbreak. In fact, gold prices have been up 6.7% so far this year fueled by the slowdown in manufacturing activity, rate cuts, geopolitical tensions, and apprehensions regarding the coronavirus outbreak. The combination of lower mined-gold supply and higher demand, and geopolitical tensions are likely to drive prices north. This bodes well for B2Gold.

Price Performance

B2Gold’s share price has gained 12.8% in the past year, compared with the industry’s rally of 19.9%.

Zacks Rank & Stocks to Consider

B2Gold currently carries a Zacks Rank #3 (Hold).

Some better-ranked stocks in the basic materials space are Newmont Corporation NEM and  Franco-Nevada Corporation FNV, both currently sporting a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Newmont has an expected earnings growth rate of 72% for 2020. The company’s shares have gained 30.1% in the past year.

Franco-Nevada has an anticipated earnings growth rate of 37.6% for the ongoing year. Its shares have appreciated 31.3% over the past year.

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Newmont Goldcorp Corporation (NEM) : Free Stock Analysis Report
 
Franco-Nevada Corporation (FNV) : Free Stock Analysis Report
 
AngloGold Ashanti Limited (AU) : Free Stock Analysis Report
 
B2Gold Corp (BTG) : Free Stock Analysis Report
 
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