B2Gold Corp. (BTG) Q1 2025 Earnings Report, Transcript and Summary

Thank you for standing by. This is the conference operator. Welcome to B2Gold Corporation's First Quarter 2025 Financial Results Conference call. [Operator Instructions] I would now like to turn the conference over to Clive Johnson, President and CEO of B2Gold. Please go ahead.

Welcome everyone. Today, we're here to talk primarily about the first quarter results. Then we're going to talk a little bit about the Goose construction update to touch on where we're going with the Monte project and talk a little bit about some of the other developments and catalysts going forward for us. Nice to see a good first quarter. As everyone is aware we had a difficult 2024 really primarily based on Fekola having to Fekola's production that was due as they'll go to an operations issue with a -- with equipment issues. So, we pushed some of the better grade production into this year. So that's the first time we've had to re-guide I guess we have eight years in a row without re-guiding so obviously we're disappointed in having to do that. We predicted we would recover and have a good 2025. We started off with a great quarter with all the mines performing well. I think it's worth pointing out that Fekola was the one that had issues in operations. The other two lines did well and met their guidance - the guidance raised for those two mines. So the issues we read about Fekola which is where you're going to hear more about have been resolved. We just received some positive news in Valley from the government living to the terms of the MOU that we signed in September last year. I'm going to let Randall speak to that. Been an important step forward with Goose, the construction continues. Joe's going to talk to you about that when we're going to transition to a construction project into operations. We're in the final stages, so as you will hear for the production. I want to talk a little bit about Catalyst going forward this year, obviously the biggest ones is the completion of construction, commencement of production at the Goose project. But also, Fekola, we're prior in there as we've heard one step yesterday from the government to probe the idea there is to continue to work with the government, get the permits required from the government to commence trucking and more for the regional area. Now that could add 180,000 ounces per year on annualized basis. So that's obviously a priority. Combined with the 300,000 ounces from Goose, that's a pretty good growth profile. Additionally, there's a couple of important studies coming up. The feasibility study of Gramalote in Columbia will be completed by the end of June, we will be a position to announce that if it's as positive as we're hoping for then we'd be moving towards a development decision not that long after, later on in this year to decide if we're going to go forward with starting to prepare for construction work at Gramalote. We already have a permit in place from the previous days in Gramalote. We've got some strong support there from local governments and also at the federal level, so we are ahead of the curve in terms of permitting requirements. In addition to that, we'll consider to review opportunities. They'll be focused primarily on exploration. We've got a $64 million budget for this year for corporately and we've got a half of that $32 billion is focused on Back River. To take us here, expiration to answer any questions you might have about an exploration. The fact that half of our budget is focused on Back River gives you an indication of what we think will be exploring some new targets as well as doing some infill drilling. You can see how it's focused going forward. We're going to continue if we have the opportunities. Our trend of investing in junior expedition companies looking for companies that are well run, that have good assets that they are going to advance. So we can, as we did in Snowline and a few others, will continue to be good shareholders. And at the end of the day we'll see what comes out of those deals down the road. If anybody needs assistance in construction on how to operate all those things that we bred. We're open to the possibilities of some of these deals that we mentioned too. So, I think that's primarily what I wanted to -- one additional point, we've had a lot of questions about M&A. Ashira was saying please don't surprise us when we get up one morning and see you've done a big deal. We're not interested in. I think we can say virtually categorically, we're not interested in acquiring another development company or development project, taking over a company that is because of the growth profile that we have both obviously the Goose coming online, moving Fekola towards starting to truck more we'll hear more about and the Gramalote feasibility study. So, if you were to add all that up that means about 720,000 ounces of annual new production with those three potentially giving us a very strong growth profile. Clearly, our share price does not reflect, I don't think the production of other things that are happening right now according to 15 or so mining analysts. But the other big thing is touched on not reflecting the value of our growth. So we need to remind we need to get value for our shareholders by advancing all of these development opportunities that we have. We're going to be open for questions after we hear from Mike, Randall, Bill's on the line. Everyone else is here with bills on the line, because he's running the construction project at Goose. So we're very happy with the quarter. We're happy operationally that we're back on track and we're back on track to good responsible production. We're also doing what this company's done very well since its inception and that's the growth in this case from existing assets. So that's kind of the old brief summary for me, catalyst for looking at going forward. So that I'll pass it on to Mike for some of the financial detail and talk about from that point of view. Then we're going to have an update from Bill in terms of operationally, as we said and somewhere in all about management to touch base, between the two, he'll touch base on the development with the government, positive development with the government moving towards permitting in Valley. So, Mike, over to you.

Thanks, Clive. Financially, it was a strong quarter. After adjusting for onetime items, the company generated $0.09 per share of adjusted earnings. And now, we benefited obviously from the strong average gold sales price. Basic earnings per share were $0.04 per share and they included non-cash mark to market adjustments for the Goose that we inherited when we bought Sabina and also from the zero cost collars that we put in place at the end of last year in conjunction with renewing our revolver. Operating cash flow before working capital adjustments for the quarter was $244 million, another strong result and I think again highlights the cash generation potential of our operating assets and the strong gold price environment. And on the CapEx side spending of the Goose project remains in line with their latest budget during the quarter, construction mine development activities spend was CAD136 million during the first quarter '25. I would comment in late '24 and early '25, we accelerated approximately $60 million in plant and equipment purchases including deposits of some longer lead items that were pulled forward from second half '25 or subsequent years. So, factoring these into account, excluding them from the total, Goose cash expenditures to first go for, remained in line with budget. Balance sheet wise, we continue to remain in a strong financial position with cash and cash equivalents $330 million at the end of the first quarter and during the quarter, I think as we discussed on our last call, we repaid the outstanding balance in our revolving credit facility. Proceeds of the convertible note that we issued in January '25 and at the end of the quarter, we had $800 million, so full capacity undrawn on our revolving credit facility. So, we have a good amount of financial flexibility to be able to complete the Groose construction very shortly to fully repay the obligation under the gold prepays, but as we deliver into them over the course of a year from July '25 to June '26. And to complete other sustaining growth initiatives across the portfolio and to continue to fund their very healthy exploration programs which will hopefully expand mine lives. That's the financial update I guess the key points. And with that, I'll turn the call over to Bill for an operation and project update.

All right. So, I'll start out with probably what people are most interested in. At Goose, it was a very successful winter ice road season. We did start one month earlier than we have previously and completed one month earlier than expected. And that was based on the additional capital we put in last year in our new ice road building plan. It was a great result. Everything came up the road. That's 4,000 container units and almost 80 million liters of fuel. On the construction side, progress was significant in the first quarter and all activities are nearly complete and ready for first gold and subsequent ramp-up to commercial production in Q3. On the open pit mining side, mining of the eco pit was recently completed and is now being set up to receive tailings. So when the mill turns on the open pit mine of the Umwelt open pit will be mining and will be depositing tails in the echo. On the underground mining side, mining rates at Umwelt underground are hitting new records and we're confident that the high-grade stope ore production as in our current life of mine will begin in the third quarter of this year. Looking at Mali, Mali had a strong start to the year, exceeded gold production expectations, had lower all-in-sustaining costs than we anticipated. The mill feed grade over the course of the year, as we get through Phase 7 steadily increased and we remain very confident in our 2025 production guidance. Of course, this will be highlighted by the contributions from the Fekola underground. And if we get all our permits to Fekola regional later in 2025. At Masbate, the operations continue to perform well. World class safety record, I just want to call that out. They're now coming up on 2,300 days without an LTI. We anticipate another strong year of consistent production at Masbate with strong margins. At Otjikoto, the open pit and underground went very well in the first quarter. And currently, we're basically -- we're focused on advancing the antelope deposit to a development decision in the third quarter this year. And finally, and maybe not lastly, Gramalote, we're getting close to the finalization of the feasibility study. We want to release it over the next couple of months. With that I will turn it back to you, Clive.

Thanks, Bill. Randall, can you give us an update on the recent developments at Mali literally over the last couple of days?

Yes, absolutely. So as most of you know, we've been working with the Government of Mali, followed the 2023 mining code on the Fekola regional project. A part of the MoU was that they finally allowed a company to consolidate a large land package, which we, you know, which we are using to combine the Menankoto, Bantako, and Bakolobi permits for the first time. The 2023 mining code now allows for a larger overall land area under one consolidated land package. So, we've been working with them since September on what has really had been a novel process for them. And finally, it came through just yesterday where the council administers, approved the decree to go ahead with that consolidated land package. And what that does is really a catalyst for us to be able to now submit our application for exploitation permit, which will then just be one license currently named Menankoto. It will be and so that will find its way into a new operating company and with that application for exploitation permit should go in within the week and then we're looking -- the standard time, turnaround time has been around 30 to 60 days for us to be able to see an exploitation license. So really, they lived up to another obligation in the MOU that one of the more important ones for us. And so now it's a matter of continuing to work with that government to show them and demonstrate the value that the Fekola Regional will have for all stakeholders, them being a 35% holder in Fekola Regional and look towards later on this year of getting into production.

Thanks Randall. So that's 35% under the 2023 code for the regional area. And obviously, we were the other 65% of that, so I think that's a good certainly where we sit today, as we've discussed, we said some of the catalysts moving forward. Very happy with the first quarter, excited to continue that good performance the rest of the year and significantly advance the catalysts that we've talked about today. So you've got the entire executive team here in Vancouver with the exception of Mills and Goose. So, I think with that we'll open it up to any questions.

[Operator Instructions] Our first question comes from Francesco Costanzo from Scotiabank. Please go ahead.

Hi, good morning, guys. Thanks a lot for taking my question. This is Francesco calling on behalf of Ovais Habib. I just want to start with Goose. So maybe a question for Bill. So, construction development is tracking to plan, and you've noted in the release that mining of the echo pit and completion of the tailing slurry pipeline are some of the critical path items that are needed before first gold pour. But can you speak to any of the other critical path items to highlight ahead of first gold pour or before achieving commercial production that we should look for?

Yes, well, obviously everything's going to be happening all very rapidly now. We're currently in the process of commissioning the powerhouse. Right. So that's a key thing obviously for the mill that is basically complete at this time. We have enough to run the mill. So in the very near future, we're going to start commissioning through the mill and then it's just working through the circuits obviously trying to get ore in there and then producing gold by the end of Q2.

Okay, great. And then just on the capital budget. So, you've reiterated the CAD1.54 billion budget with CAD136 million spent during Q1. Although the initial guidance, initial '25 guidance published earlier in the year outlined a little bit more non sustaining capital in first half of '25 than was implied by the total Goose budget. So just wondering if you can clarify your expectation of sustaining and non-sustaining capital spending ahead of first gold, ahead of commercial production and through the balance of the year.

Mike.

Well, in terms of the total CapEx, the items that we'd identified that we did expand some of this on sustaining CapEx that pull forward, I mentioned it's somewhere in the region of 60 million some of that was expended right at the end of '24 and with another component of it done in Q1 '25 and covers things like powerhouse enhancements that we're planning for next year. Actually, some of the deposits there we've accelerated some equipment purchases from purchase of Cat 777 loaders and some Volvo trucks. And those were things that we had originally in the second half '25. We've also got some fuel on hand that we purchased for construction. So, it's purchased but hasn't been consumed yet. So, you pull all those things together, you get something in the region of $60 million plus that we think there really things that are either accelerated and will be consumed in Q2 or that are pulled forward from subsequent periods or years.

Okay, thanks Mike. And just my final question for Randall or whoever wants to take it. I mean great to see progress, meaningful progress on the Fekola regional permit, I guess expected within the next 60 days or so. I just wanted to clarify, do you still expect to need around three months or so to prepare the site before we can actually see ore production start to come from Anaconda?

I'll leave that to Bill.

Yes, we do. There's three months of pre-stripping there.

Okay, great. Thanks for clarifying. That's all for my questions.

The next question comes from Anita Soni from CIBC World Markets. Please go ahead.

Good morning, Clive and team. I just had a question on the Gramalote study that's coming up soon. Could you just give us an idea of some of the, I guess parameters that you'd be looking at? Obviously, we know you're looking for a smaller footprint at that asset but just wondering what kind of gold price that you would be expecting to use in that study.

I'll give it over to Bill to tell you. We can talk a little bit about what was in the PEA before in previous studies. I think it's quite a lot of lines of the PEA we're hoping to meet similar or even improved. But that was as you said, a smaller footprint, which is good from the updated impairment point of view. But basically, looking at, because it's one older now, we're looking at the potential to produce 240,000 ounces a year for the first five years of 12-year mine life. So, the culminate of the previous study at PEA was a bit misleading because it actually had. There's no returning required to go to feasibility and there's a lot of engineering work that went into that PEA. So a lot of work has happened since then and we're on track with the feasibility study for the middle of year. That's what we've done is we're on track to be able to release studies.

Yes. So -- Just I don't mean to walk on you there, but you're absolutely right, the PEA is the absolute best reference for what we're looking at for the feasibility study. Everything is tracking very nicely against that, and I'll leave it for Mike, on what the gold price we're going to use.

I think gold price, I mean, you'll see us like there's going to be some scenarios run in there, but I think you'll see us look at consensus as a base just to see where we are. So if you look at where CIBC's latest consensus came out, obviously it's higher in the short term but those would be build years anyway. And then long term you're looking at somewhere 2,300 to 2,400 bucks. That's current consensus.

I think that Gramalote can potentially, if we have a positive study and we make a development decision to go forward, it could slot in very nicely after Goose to our infection profile. And as everyone's aware we don't try building two mines at the same time. Also, when you look at funding Gramalote, there's a number of sources refunding from the existing cash flow we're generating from existing facilities. We have access to good term debt facilities. But also of course this is not one that we would necessarily be afraid of hedging a bit of gold in terms of spending quite a lot of capital. The pre pas was around $800 million, but there's numerous ways to finance that, numerous avenues to do that. But also, we would be looking at one option which would be to perhaps protect the company, the project from the construction period. But I expect that would be a small percentage of our gold production as a company. So, I hope that answers your questions.

It does. And then just last question on the timing was. So, as you mentioned not wanting to build Goose or building too many things at the same time but you're coming to the tail end of Goose now, so would it be right to think about Gramalote potentially coming on stream just at the end of the decade?

Bill, you want to touch on a mix of that? Obviously, we don't know.

Yes. So, Anita, really it comes down to the feasibility study is really remember we're going to have to make some minor modifications because Anglo there is a construction permit to it right now. So that construction permit has to be modified for whatever we've changed in the PEA. We're kind of estimating a 12-month to 15-month period on that. So your answer is absolutely correct. It could be earlier if the government wants to play. But you're right, it's kind of that '28, '29 is probably right.

Okay, that's it for my questions. Thank you again.

[Operator Instructions] Our next question comes from Carey Macrury from Canaccord Genuity. Please go ahead.

Good morning, guys. Just another question on Goose. What kind of stockpile do you expect to have and grade ahead of the mill startups?

Well, I can tell you that we've got significant stockpile already prepared from the open pit I was just looking at this morning. What I'll tell you is for the mill we're talking about as we start up, once we get kind of the low-grade stuff through, we're going to run at least 20,000 and maybe more. Maybe as much as 35,000 tons at plus 10 grams through right away. So, we're looking good for meeting our projections. And certainly, this kind of 120 at this point, 120 to 130 is not really an issue. So, we can see that for sure in 2025.

We've got 120 to 150 is right.

Yes. I'm sorry -- 120 to 150 is right.

Yes. Okay. And just in terms of the ore mix with the underground coming on more so in Q3, I'm assuming most of the ore mix for the first half of the year was really the stockpiles and the open pit. Is that correct or what is mix, roughly?

What is the mix between open pit and underground? I don't have that at my fingertips right now, but certainly, in 2025 a lot of the material is coming from the open pit.

Yes. I can comment on that. So Carey, it's about 40% from the Echo open pit for the feed that we give through the year. 40% of material from the open pit and then about 20% of material from underground is the mix throughout the balance of the year.

Okay, great, thank you. Thanks, Mike.

The next question comes from Ovais Habib from Scotiabank. Please go ahead.

Hi, Clive and B2 team, sorry got a bit delayed coming on the call. I'm just bouncing between some conference calls. Just -- a lot of questions have been answered. But just one question on maybe on the Otjikoto side and in terms of any sort of expansions on the Antelope side, you're looking to make a construction decision, I believe in Q3 of this year, what's pending in terms of making that decision. A PA was released. You need to do further studies or more drilling or can you give us a little bit more color on that?

Yes, thanks for raising it. We didn't really talk much in detail about that. I guess it would let Bill answer.

Yes. The only thing that's really kind of outstanding Ovais is the Geotech, you know, overall we have the mining method locked down. We're currently looking at what is the surface infrastructure layout, you know, basic, basic kind of supporting type questions. So do we want -- do we want to have, extra facilities? And so, we're right now going through third-party review of what we've done.

Okay. So you guys should be in a good position then. Just based on that for that construction decision in Q3, then.

100%.

Okay, sounds good. And just you may have already touched upon this during the call, so I apologize if I'm asking again, but just in terms of the permits on the Mali, specifically on the Fekola underground. Now, the Fekola underground, from what I understand is an amendment to your permit, is that expected sooner than the regional? I mean, is that separate? Is that together now, from what I understand, the Malian government or the regulators had combined the two. Any color on that piece?

Well, I'll pass it over to Randall, but what you missed earlier in the call, you realize you've got a bunch of different calls to go back and forth on, was a significant development in terms of moving the permitting board from the government just in the last day, Randall. We've already covered it, but we'll give you Ovais a highlight view of that and also the other government as well.

Yes, I mean, let me answer your first question. They are not connected Ovais. I'm not sure where that one came from, but they are two distinct processes, the underground and the regional. We talk about them together in our press releases just because that's kind of the future and some of the catalysts at Fekola, but certainly everything that needs to be submitted for the underground, the approvals has been submitted and that process underway. We expect that we'll be up and producing in the early in the second half and so don't see any issues there with the underground. That one is well in hand. With the regional, we did receive the council administers decree yesterday for the combination of the three permits. The three permit area, so that's 200 plus square kilometers to the north, covering contiguous north of Medinandi and the Fekola permit. So that really is the catalyst that allows us to now submit the exploitation application. It's been completed, it's translated, it's ready to go. We need a little bit of time to include all of the details that come out of that consolidated permit and flow those through the application. But then we expect kind of that the turnaround time has been historically about 30 to 60 days in this instance.

Perfect. Thanks for the color on that, Randall. And then, really good to hear on the progress on the permitting. That's it for me, guys, and thanks for taking my questions.

Absolutely.

And the next question is a follow up from Carey Macrury from Canaccord Genuity. Please go ahead.

Yes, just a question for Mike. Obviously, the balance sheet is in great shape. Just asking about the prepay, given that you'll be ramping up in Q3, is there any thought of deferring that to later or you're comfortable just settling in that in the quarter.

Well, we can defer it. We could roll them if we want to. Our goal is not to. If you look at the rationale for pulling in the convert for a bit of longer-term, money on the balance sheet, there to free up the line. We're going to use the line to help us maneuver through the prepays and to do some of these other capital early stage antelope, whatever we might do Gramalote for -- finishing Fekola Regional, all those things but also going to use the line just to maneuver through. We set them up for a one-year delivery period, so that they're done pretty quickly. So we've got them, we use them. Goose will be built, Goose will be running. We'll, we'll deliver into the prepays and we're done. We'll put them behind us.

Talk about [indiscernible] we have the aim to build our facility available to us as obviously as Mike said we'll use parts of that as we move forward and apply this to live other people.

Yes, there's lots of room. I mean if gold stays where it is we won't be touching the facility. But you don't plan on record gold prices all the time. You plan on managing things. So we're in good shape to do it, Carey. That's the bottom line.

All right. Great. Thanks guys.

[Operator Instructions] This concludes our question-and-answer session. I'd like to turn the conference back over to Clive Johnson for any closing remarks.

Yes, thanks everyone for attending the conference and you can always follow up with us if there's any additional questions that occur to you after so good quarter, looking forward to great developments in 2025. Thanks for getting on the call.

This brings to an end today's conference call. You may disconnect your lines. Thank you for participating and have a pleasant day.