Project Projected to Deliver 310,000 Ounces of Gold Annually by 2026

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B2Gold Corp. (BTG:NYSE;  BTO:TSX;  B2G:NSX) has provided an update on its Goose project in Nunavut, Canada. With construction and development progressing on schedule, the company expects the first gold production in the second quarter of 2025. In turn, commercial production is anticipated in the third quarter of that year. Once fully operational, the Goose project is forecast to produce approximately 310,000 ounces of gold annually over the first five years.

The construction and development costs before the first gold production have been revised to CA$1.54 billion, This reflects a 23% increase due to inflationary pressures and the acceleration of certain capital expenditures. By early September 2024, key logistical milestones were achieved. These include the receipt of seven supply vessels at the Marine Laydown Area, ahead of schedule, and the completion of significant infrastructure at the Goose site.

B2Gold's commitment to maintaining a robust financial position is demonstrated by its strong working capital balance of US$600 million and access to an undrawn US$700 million credit facility. This financial stability will support the remaining CA$530 million needed to complete construction and development through mid-2025.

The Gold Sector

Reuters reported on September 10 that gold prices remained firm above the psychological US$2,500 mark, with bulls consistently buying the dip when prices dipped below that level. As of late August 2024, gold reached an all-time high of US$2,531.60. This bullish sentiment aligns with B2Gold's outlook for Goose. As the steady demand for gold continues to support long-term investment in production growth, lower interest rates have further reduced the opportunity cost of holding bullion. This helps to make projects like Goose attractive to investors.

321Gold on September 10 provided a strong outlook for gold, stating that after a short-term correction, gold prices could surge towards US$3,000. This optimistic forecast aligns with B2Gold's aggressive development timeline and positions the company to take advantage of a potential gold price upswing. B2Gold's Goose project, expected to produce 310,000 ounces of gold per year, could benefit from this surge.

In the broader gold market, Stockhead reported on September 13 that the ongoing rally pushed gold to US$2,568 per ounce. This momentum is mirrored in B2Gold's operations, where the development of Goose is positioned to meet the rising demand. Additionally, mergers and acquisitions (M&A) activity in the sector has accelerated, with junior miners capitalizing on favorable market conditions.

B2Gold's Catalysts

According to the company's September 2024 investor presentation, the Goose project is set to deliver significant production growth for B2Gold. The mine is expected to produce over 310,000 ounces of gold annually from 2026 to 2030, bolstering the company's overall output. The accelerated capital expenditures are designed to ensure a more reliable and derisked operation from the outset, positioning the Goose project for long-term success.

Additionally, the early completion of critical infrastructure, such as the expansion of camp facilities and the construction of a reverse osmosis plant, will reduce ongoing operational costs and further optimize the ramp-up to full production. This strategic approach to upfront investments is expected to enhance the Goose project's operational efficiency over its lifespan.

Is the Stock Undervalued?

In a September 17 report from Ron Struthers of Struthers Resource Stock Report, Struthers described B2Gold as "undervalued" and issued a strong Buy recommendation, emphasizing that the company's share price had lagged due to uncertainties around the Fekola mine's production. Struthers projected that, with these challenges resolved, the stock could see significant upside, stating that "I see $6 as a minimum target for this year/early 2025." He further highlighted the Goose project as a high-grade, low-cost mine that would positively impact B2Gold's output in 2025 and beyond.

The September 11 announcement that B2Gold had secured exploitation permits for the Fekola underground and regional projects was seen as a pivotal moment. Struthers noted that this would expedite mining operations and potentially generate 80,000 to 100,000 ounces of gold annually from the Fekola regional sources by early 2025.

Additional commentary by Struthers reinforced the notion that B2Gold's enterprise value per ounce of gold in the ground was undervalued. He pointed out that B2Gold's resources were valued at US$197 per ounce, which he believed should be "at least double" when compared to recent acquisitions in the industry, where valuations were around US$650 per ounce. 

As of Struthers' September 17 analysis, B2Gold had also maintained a solid financial position with US$467 million in cash, an undrawn US$700 million credit facility, and no outstanding debt, positioning the company for continued growth and stability through its projects.

Ownership and Share Structure

According to Refinitiv, 58.67% of B2Gold is owned by Institutions. Of those, Van Eck Associates Corporation owns the most at 9%, Fidelity Management and Research holds 4.50%, The Vanguard Group owns 3.89%, BlackRock Investment owns 3.69%, and Two Sigma Investments holds 1.88%.

Management and Insiders hold .81%. The rest is retail.

B2Gold currently has a market cap of US$4.34B with 1.31B free float shares. They have a 52 week range of US$2.34 - 3.46,