Yesterday afternoon, B2Gold Corp. reported Q3/22 production results, producing 215 Koz Au from its three operating mines missing our estimate of 287 Koz Au, but up from 205 Koz in Q2. Consolidated production, including an additional attributable 12 Koz from Calibre, was 227 Koz for the quarter. Revenue for Q3 was $393M on sales of 229 Koz Au at a gold price of $1,711/oz, below our estimate of $535M. Q3 production missed quarterly guidance but the Company stated it remains confident it will achieve its annual guidance of 990-1,050 Koz. We note that if BTO is to achieve its annual guidance, production in Q4 will have to be a minimum of 330Koz to meet the lower end of guidance. This would represent a QoQ increase in production of ~55%. We are maintaining our BUY rating and our 12-month target price of C$10.50. 

At Fekola production missed our quarterly expectation, producing 129 Koz compared to our estimate of 175 Koz. The Fekola plant continues to outperform budget with 2.29 Mt processed during the quarter. The miss on production was primarily attributed to a worse than expected rainy season, which has now subsided. We expect a strong Q4/22 from the Fekola mine as the Company has begun mining Fekola Phase 6 which is anticipated to average between 3.4-3.5 g/t and the operation is expected to mine ~220 Koz to achieve the lower end of the full year guidance of between 570-600 Koz.

The Otjikoto operation produced 35 Koz in Q3/22, well below our estimate of 49 Koz. The miss was primarily due to a slower than planned ramp up in development from the Wolfshag underground, which resulted in lower than planned grade mined. Production is expected to significantly increase in the fourth quarter as the Company enters a higher-grade area of the Otjikoto pit and new contribution from the Wolfshag Underground. BTO stated it expects to produce towards the lower end of the annual guidance range of 165-175 Koz.

Fekola Complex Feasibility Study:

BTO is currently in the process of completing a Feasibility Study on a potential stand-alone processing facility at the Anaconda Area. The Study is to be based on processing at least 4 Mtpa of material. Results of this study are expected in the second quarter of 2023 however, initial conceptual analysis indicates that the combined Fekola and Anaconda processing facilities could have the potential to produce more than 800 Koz per year commencing as early as 2026. Based on current production rates at Fekola this assumes the new processing plant will produce at minimum 230 Koz of gold annually. As a reminder, the Anaconda area currently has a 3.4 Moz resource.

Q3/22 financial results will be released after market close on Tuesday, November 1st, 2022.