Friday, June 24, 2022

B2Gold Corp (NYSEMKT:BTG) Ratcheting Up Production

B2Gold Corp (NYSEMKT:BTG) has shareholders feeling optimistic in the near-term. An improving outlook for gold is raising the prospects for all gold miners in the market, but perhaps none more so than B2Gold Corp (NYSEMKT:BTG), a Vancouver-based gold producer with gold mines around the world.

Shares of BTG currently trade at $2.78, giving the company a market capitalization of $3B. Over a 52-week period, shares of BTG have traded as low as $0.60 and as high as $3.65.
B2Gold Corp (NYSEMKT:BTG) is a Canada-based gold producer with approximately four operating mines and one mine under construction. The Company has a portfolio of other evaluation and exploration projects in various countries, including Mali, Colombia, Burkina Faso, Finland, Chile and Nicaragua.
It’s hard not to ignore the amount of momentum around BTG right now. Analysts keep raising their price targets for this Canadian gold producer. There are now 7 analysts with a “buy” recommendation on the stock and 2 with a “hold” recommendation. The consensus analyst price target for the stock is $5.07, which means that the shares of B2 Gold Corp. could have room to run over the next 12 months.
What’s impressive is how these analysts have been steadily ratcheting up their price targets for BTG over the past three months. In August, for example, Canaccord Genuity upped its price target from $4.75 to $5.25; National Bank Financial raised its price target from $4.20 to $4.50; and CIBC upped its price target from $4.00 to $5.00. Most recently, Scotiabank came out at the end of September with a $4.75 price target.

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The big catalyst for the stock upgrades and higher price targets has been the remarkable financial performance of BTG. The company recently announced a record amount of gold production and a record amount of gold revenue for 3Q 2016. The company reported quarterly revenue of $193 million (an all-time record for the company) and 9-month revenue of $502.1 (also an all-time record for the company). On a year-over-year basis, gold production is up 18 percent.

B2 Gold manages a portfolio of Canadian gold mines, four of which are in operation and one that is under construction. But the real growth in the company is coming from its overseas gold assets. The company manages four major open pit gold mines – the Otjikoto gold mine in Namibia; the Masbate gold mine in the Philippines; the La Libertad gold mine in Nicaragua; and the Fekola gold mine in Mali. Of these, the one that is really outperforming expectations is the Masbate gold mine.

In the last quarterly earnings call, company management specifically cited Masbate as a reason why the company is outperforming gold production expectations. There had been concerns that the Department of Environment and Natural Resources in the Philippines might make it more difficult to extract gold from that mine, but those fears have been quickly assuaged.

In the process, short sellers in B2 Gold have been getting crushed. There have been analyst upgrades, boosts in price targets, and then a blowout quarter that set all-time records for BTG. Too bad for the shorts. Between August 31 and September 15, short positions in the stock had spiked 86 percent. But in the next two-week period, from September 15 to September 30, the number of short positions was down by 73.9 percent.

Looking ahead, B2 Gold looks like a great long term play for the gold market. You have a gold market that appears to be tracking upward, and B2G is one of the gold miners that have consistently exceeded expectations. There’s nothing better than a stock that under-promises and over-delivers, especially in a rising market.

The diversification of the gold assets of BTG is also notable. The company boasts a well-diversified evaluation and exploration projects in Africa (Mali, Namibia, Burkina Faso), South America (Colombia, Chile, Uruguay, Nicaragua), North America (Canada), Asia (Philippines) and Europe (Finland). While there is an element of political risk in some of these nations, BTG appears to have a good working regulatory relationship in the Philippines, which is a key region for future gold production.

Meanwhile, institutional investors continue to pile into the stock. In 2Q 2016, a number of notable institutional investors – including Bank of New York Mellon Corp., Bank of Nova Scotia and Shell Asset Management – all increased their stakes in the company.

As long as the near-term outlook for gold remains attractive, there’s reason to believe that BTG still has plenty of room to run. At a current share price of $2.78, there’s still upside ahead, as most stock analysts have price targets close to $5.00 for BTG. We will continue to update as more news becomes available. For more news on B2Gold Corp. and other fast-moving penny stocks, please subscribe to now.

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