B2Gold(BTG) - 2024 Q1 - Quarterly Report

Condensed Interim Consolidated Statements of Operations B2Gold Corp.'s net income for Q1 2024 significantly decreased to $48,481 thousand from $101,904 thousand in Q1 2023, driven by higher production costs, interest, financing expenses, and income tax expenses | Indicator | Three Months Ended March 31, 2024 ($ thousands) | Three Months Ended March 31, 2023 ($ thousands) | | :------------------------------ | :---------------------------------------------- | :---------------------------------------------- | | Gold revenue | 461,444 | 473,556 | | Cost of sales | (277,218) | (259,923) | | Gross profit | 184,226 | 213,633 | | Operating income | 154,627 | 175,919 | | Earnings before interest and taxes | 130,095 | 176,855 | | Net income for the period | 48,481 | 101,904 | | Net income attributable to company shareholders | 39,751 | 85,973 | | Basic earnings per share | 0.03 | 0.08 | | Diluted earnings per share | 0.03 | 0.08 | Condensed Interim Consolidated Statements of Comprehensive Income Total comprehensive income for Q1 2024 decreased to $63,452 thousand from $98,328 thousand in Q1 2023, primarily due to lower net income despite a significant increase in unrealized gains on investments | Indicator | Three Months Ended March 31, 2024 ($ thousands) | Three Months Ended March 31, 2023 ($ thousands) | | :------------------------------------------ | :---------------------------------------------- | :---------------------------------------------- | | Net income for the period | 48,481 | 101,904 | | Unrealized gain (loss) on investments, net of deferred income tax | 14,971 | (3,576) | | Other comprehensive income (loss) for the period | 14,971 | (3,576) | | Total comprehensive income for the period | 63,452 | 98,328 | | Total comprehensive income attributable to company shareholders | 54,722 | 82,397 | Condensed Interim Consolidated Statements of Cash Flows Operating cash flow significantly increased to $710,727 thousand in Q1 2024, largely due to $500,023 thousand from prepaid gold sales, while financing and investing cash outflows also substantially grew | Cash Flow Category | Three Months Ended March 31, 2024 ($ thousands) | Three Months Ended March 31, 2023 ($ thousands) | | :------------------------------ | :---------------------------------------------- | :---------------------------------------------- | | Cash flow from operating activities | 710,727 | 203,823 | | Cash flow from financing activities | (206,624) | (47,820) | | Cash flow from investing activities | (239,577) | (131,088) | | Increase in cash and cash equivalents | 264,526 | 24,915 | | Cash and cash equivalents, end of period | 567,814 | 673,740 | - Operating cash flow significantly increased, primarily benefiting from $500,023 thousand in proceeds from prepaid gold sales[16] - Financing cash outflows significantly increased, mainly due to the repayment of $150,000 thousand on the revolving credit facility[16] - Investing cash outflows substantially increased, primarily driven by $117,451 thousand in expenditures for the Goose Project[16] Condensed Interim Consolidated Balance Sheets As of March 31, 2024, total assets increased to $5,296,272 thousand from December 31, 2023, primarily due to increases in cash and cash equivalents, mining interests, and the new prepaid gold sales liability | Indicator | March 31, 2024 ($ thousands) | December 31, 2023 ($ thousands) | | :------------------------------ | :--------------------------- | :------------------------------ | | Assets | | | | Cash and cash equivalents | 567,814 | 306,895 | | Total current assets | 996,645 | 710,729 | | Mining interests | 3,682,923 | 3,563,490 | | Total assets | 5,296,272 | 4,874,619 | | Liabilities | | | | Total current liabilities | 333,640 | 313,471 | | Long-term debt | 28,804 | 175,869 | | Gold stream obligation | 150,452 | 139,600 | | Prepaid gold sales | 507,640 | — | | Total liabilities | 1,366,416 | 964,644 | | Equity | | | | Total shareholders' equity | 3,826,391 | 3,810,379 | | Non-controlling interests | 103,465 | 99,596 | | Total equity | 3,929,856 | 3,909,975 | - Cash and cash equivalents increased from $306,895 thousand as of December 31, 2023, to $567,814 thousand as of March 31, 2024[17] - A new prepaid gold sales liability of $507,640 thousand was recognized[17] - Long-term debt decreased from $175,869 thousand to $28,804 thousand, primarily due to the repayment of the revolving credit facility[17] Condensed Interim Consolidated Statements of Changes in Equity As of March 31, 2024, total equity increased to $3,929,856 thousand, driven by net income and unrealized investment gains, partially offset by dividend payments and non-controlling interest transactions | Equity Item | Balance as of December 31, 2023 ($ thousands) | Balance as of March 31, 2024 ($ thousands) | | :------------------------------ | :-------------------------------------------- | :----------------------------------------- | | Share capital | 3,454,811 | 3,463,392 | | Contributed surplus | 84,970 | 88,745 | | Accumulated other comprehensive loss | (125,256) | (110,285) | | Retained earnings | 395,854 | 384,539 | | Total equity attributable to company shareholders | 3,810,379 | 3,826,391 | | Non-controlling interests | 99,596 | 103,465 | | Total equity | 3,909,975 | 3,929,856 | - Net income for Q1 2024 was $48,481 thousand, with $39,751 thousand attributable to company shareholders[19] - Total dividends paid amounted to $46,075 thousand[19] - Unrealized gains on investments (net of deferred income tax) were $14,971 thousand[19] Notes to the Condensed Interim Consolidated Financial Statements This section provides detailed notes to the condensed interim consolidated financial statements, covering the nature of operations, basis of preparation, significant accounting judgments and estimates, and the composition and changes in various assets, liabilities, and equity 1. Nature of operations B2Gold Corp. is a Vancouver-based gold producer operating three mines (Fekola, Masbate, Otjikoto) and developing the Goose Project, also holding interests in Gramalote and other mining companies - B2Gold Corp. is a gold producer with three operating mines: Fekola, Masbate, and Otjikoto[20] - The Goose Project is under construction in Canada, and the Gramalote Project is in Colombia[20] - As of March 31, 2024, the company held approximately 15% interest in Calibre Mining Corp. and approximately 19% interest in BeMetals Corp[20] 2. Basis of preparation The condensed interim consolidated financial statements are prepared in accordance with IAS 34, Interim Financial Reporting, using consistent accounting policies as the 2023 annual audited statements, and were authorized for issue on May 7, 2024 - Financial statements are prepared in accordance with International Accounting Standard 34, Interim Financial Reporting[22] - Accounting policies and methods are consistent with the annual consolidated financial statements as of December 31, 2023[23] - The Board of Directors authorized the release of these condensed interim consolidated financial statements on May 7, 2024[23] 3. Significant accounting judgements and estimates Financial statement preparation involves significant management judgments and estimates regarding uncertain tax positions, control over investees, fair value of financial instruments, mineral reserves, VAT receivables, and current and deferred income taxes - Significant accounting judgments include uncertain tax positions, determining control or significant influence over investees, and impairment assessment of long-lived assets[25][26][45] - Key sources of estimation uncertainty include the fair value of financial instruments (particularly gold stream obligations), mineral reserves and resources estimates, VAT receivables, and current and deferred income taxes[47][48][50] - The fair value of gold stream obligations is estimated using an income approach and discounted cash flow model, incorporating unobservable market inputs such as future gold delivery timing[32] 4. Accounts receivable, prepaids and other As of March 31, 2024, accounts receivable, prepaids, and other totaled $26,087 thousand, a slight decrease from $27,491 thousand as of December 31, 2023, primarily due to reduced vendor advances | Item | March 31, 2024 ($ thousands) | December 31, 2023 ($ thousands) | | :------------------------------ | :--------------------------- | :------------------------------ | | Vendor advances | 8,086 | 10,533 | | Prepaid expenses | 8,830 | 8,639 | | Current portion of derivative financial instruments | 362 | 481 | | Other receivables | 8,809 | 7,838 | | Total | 26,087 | 27,491 | 5. Inventories Total inventories slightly decreased to $339,351 thousand as of March 31, 2024, from $346,495 thousand as of December 31, 2023, with declines in gold and silver bullion, in-process, and ore stockpiles, partially offset by an increase in materials and supplies | Item | March 31, 2024 ($ thousands) | December 31, 2023 ($ thousands) | | :---------------------- | :--------------------------- | :------------------------------ | | Gold and silver bullion | 46,676 | 53,065 | | In-process inventory | 19,914 | 18,220 | | Ore stockpiles | 71,727 | 80,302 | | Materials and supplies | 201,034 | 194,908 | | Total | 339,351 | 346,495 | - Long-term ore stockpiles primarily include $45 million at Otjikoto, $7 million at Fekola, and $7 million at Masbate[54] - Long-term supplies inventory represents supplies expected to be consumed beyond twelve months for the Back River Project[54] 6. Long-term investments The fair value of long-term investments increased to $101,497 thousand as of March 31, 2024, from $86,007 thousand as of December 31, 2023, mainly driven by the investment in Snowline Gold Corp., with further post-period transactions | Investment Item | Fair Value as of March 31, 2024 ($ thousands) | Fair Value as of December 31, 2023 ($ thousands) | | :-------------------------------- | :-------------------------------------------- | :----------------------------------------------- | | Snowline Gold Corp. | 62,748 | 52,668 | | West African Resources Ltd. | 17,370 | 14,269 | | Osino Resources Corp. | 15,202 | 12,295 | | St. Augustine Gold & Copper Ltd. | 4,026 | 4,631 | | Matador Mining Ltd. | 1,664 | 1,632 | | RTG Mining Inc. | 301 | 308 | | Other | 186 | 204 | | Total | 101,497 | 86,007 | - Subsequent to March 31, 2024, the company purchased an additional 1.2 million shares of Snowline Gold Corp. for $5 million and participated in a private placement of 0.4 million shares for $2 million to maintain a 9.9% interest[55] - Subsequent to March 31, 2024, the company sold its 22 million shares investment in West African Resources Ltd., realizing $19 million in proceeds[56] 7. Mining interests The net book value of mining interests increased to $3,682,923 thousand as of March 31, 2024, from $3,563,490 thousand as of December 31, 2023, due to $245,833 thousand in additions and $3,556 thousand in capitalized interest, while Finnish assets were reclassified as held for sale | Item | Net Book Value as of March 31, 2024 ($ thousands) | Net Book Value as of December 31, 2023 ($ thousands) | | :------------------------------ | :------------------------------------------------ | :--------------------------------------------------- | | Mineral properties | 930,049 | 928,614 | | Buildings, plant and equipment | 862,181 | 880,472 | | Construction in progress | 1,559,035 | 1,394,143 | | Exploration and evaluation assets | 331,658 | 360,261 | | Total | 3,682,923 | 3,563,490 | - Additions for the period totaled $245,833 thousand, with $3,556 thousand in capitalized interest[59] - Finnish assets were reclassified as held for sale, with a sales agreement expected within the next 12 months, and no impairment was recognized[60] - In Q1 2023, the company wrote off $16 million of non-core assets[61] 8. Investment in associates Investment in associates decreased to $126,207 thousand as of March 31, 2024, from $134,092 thousand as of December 31, 2023, primarily due to a $9,982 thousand dilution loss from the company's reduced interest in Calibre Mining Corp | Associate Item | March 31, 2024 ($ thousands) | December 31, 2023 ($ thousands) | | :------------- | :--------------------------- | :------------------------------ | | Calibre | 123,068 | 130,953 | | BeMetals | 3,139 | 3,139 | | Total | 126,207 | 134,092 | - The company's interest in Calibre Mining Corp. was diluted from 24% to 15%, resulting in a dilution loss of $9,982 thousand[63] - Despite the reduced ownership, the company maintains significant influence over Calibre due to the right to nominate one director[63] 9. Other assets Other assets increased to $71,865 thousand as of March 31, 2024, from $63,635 thousand as of December 31, 2023, mainly driven by the reclassification of deferred financing costs and an increased loan to associate BeMetals Corp | Item | March 31, 2024 ($ thousands) | December 31, 2023 ($ thousands) | | :---------------------------- | :--------------------------- | :------------------------------ | | Reclamation bonds | 51,263 | 50,934 | | Deferred financing costs | 6,429 | — | | Restricted cash | 5,205 | 5,259 | | Loans to associates | 7,331 | 5,763 | | Other | 1,637 | 1,679 | | Total | 71,865 | 63,635 | - Reclamation bonds primarily include $21 million for Fekola, $15 million for Otjikoto, $11 million for the Goose Project, and $4 million for Masbate[64] - An additional $2 million loan was provided to associate BeMetals Corp. during the period[65] 10. Long-term debt Total long-term debt significantly decreased to $28,804 thousand as of March 31, 2024, primarily due to the repayment of $150,000 thousand on the revolving credit facility, with $700 million of undrawn capacity remaining | Debt Item | March 31, 2024 ($ thousands) | December 31, 2023 ($ thousands) | | :------------------------------ | :--------------------------- | :------------------------------ | | Revolving credit facility | — | 142,635 | | Equipment loans and lease obligations | 45,218 | 49,490 | | Less: Current portion | (16,414) | (16,256) | | Total long-term debt | 28,804 | 175,869 | - $150,000 thousand of the revolving credit facility was repaid during the period[69] - As of March 31, 2024, the company had $700 million of undrawn revolving credit facility capacity and was in compliance with all debt covenants[70] 11. Share capital As of March 31, 2024, the company had 1,305,407,942 common shares issued, having paid $52 million in quarterly dividends (with $6 million reinvested) and granted approximately 1 million stock options and 2 million RSUs - As of March 31, 2024, the company had 1,305,407,942 common shares issued[71] - Total quarterly dividends of $52 million were paid in Q1 2024, with $6 million paid through the dividend reinvestment plan by issuing 2 million shares[76] - Approximately 1 million stock options were granted with an exercise price of Cdn.$3.48 and an estimated fair value of $0.5 million[77] - 2 million Restricted Share Units (RSUs) and 3 million Performance Share Units (PSUs) were granted[79][80] | Indicator | Three Months Ended March 31, 2024 | Three Months Ended March 31, 2023 | | :------------------------------------------ | :-------------------------------- | :-------------------------------- | | Net income attributable to company shareholders | $39,751 | $85,973 | | Basic weighted average common shares (thousands) | 1,303,191 | 1,075,402 | | Diluted weighted average common shares (thousands) | 1,307,674 | 1,081,084 | | Basic earnings per share | $0.03 | $0.08 | | Diluted earnings per share | $0.03 | $0.08 | 12. Non-controlling interests Non-controlling interests increased to $103,465 thousand as of March 31, 2024, from $99,596 thousand as of December 31, 2023, primarily due to $5,885 thousand in net income attributable to non-controlling interests and $4,280 thousand in distributions | Item | Balance as of December 31, 2023 ($ thousands) | Balance as of March 31, 2024 ($ thousands) | | :------------------------ | :-------------------------------------------- | :----------------------------------------- | | Fekola | 42,911 | 47,607 | | Masbate | 27,744 | 27,964 | | Otjikoto | 24,238 | 22,650 | | Other | 4,703 | 5,244 | | Total | 99,596 | 103,465 | - Net income attributable to non-controlling interests was $8,730 thousand[85] - Distributions to non-controlling interests amounted to $4,280 thousand[85] 13. Derivative financial instruments As of March 31, 2024, the company held fuel derivative contracts for 4 million liters at an average strike price of $0.39 per liter, with zero unrealized fair value, and subsequently entered into additional forward contracts for 36 million liters of fuel - As of March 31, 2024, the company held fuel derivative contracts for 4 million liters at an average strike price of $0.39 per liter[86] - Subsequent to the reporting period, the company entered into additional forward contracts to purchase 21 million liters of fuel (average strike price $0.47/liter) and 15 million liters of diesel (average strike price $0.64/liter), scheduled for settlement between July 2024 and March 2026[87] 14. Gold stream obligation The gold stream obligation increased to $150,452 thousand as of March 31, 2024, from $139,600 thousand as of December 31, 2023, primarily due to a $10,852 thousand fair value change, classified as a derivative liability under IFRS 9 | Item | Amount ($ thousands) | | :------------------------ | :------------------- | | Balance as of December 31, 2023 | 139,600 | | Fair value change | 10,852 | | Balance as of March 31, 2024 | 150,452 | - The gold stream obligation requires gold deliveries from the Back River Project, with the delivery ratio changing based on cumulative deliveries[88] - This obligation is classified as a derivative liability under IFRS 9 and measured at fair value through profit or loss[89] 15. Prepaid gold sales On January 23, 2024, the company received $500 million in prepayment for gold sales, committing to deliver 264,768 ounces of gold monthly from July 2025 to June 2026, accounted for as deferred revenue under IFRS 15 - The company received $500 million in prepayment for the delivery of 264,768 ounces of gold between July 2025 and June 2026[92] - Prepaid gold sales are accounted for as deferred revenue under IFRS 15[93] - $8 million in financing interest expense was recognized during the period, with $3 million capitalized and $5 million expensed to profit or loss[94] 16. Financial instruments The company's financial assets and liabilities are classified by fair value hierarchy, with long-term investments (Level 1), fuel derivatives (Level 2), and gold stream obligations (Level 3), while credit risk is mitigated by depositing cash with high-rated financial institutions | Financial Instrument Item | Fair Value as of March 31, 2024 ($ thousands) | Fair Value as of December 31, 2023 ($ thousands) | | :-------------------------------- | :-------------------------------------------- | :----------------------------------------------- | | Assets | | | | Long-term investments (Level 1) | 101,497 | 86,007 | | Fuel derivative contracts (Level 2) | 362 | 481 | | Liabilities | | | | Gold stream obligation (Level 3) | (150,452) | (139,600) | - The fair value of the gold stream is calculated using an income approach and discounted cash flow model, incorporating observable market data (e.g., forward gold price curve) and unobservable market data (e.g., future gold delivery timing)[32] - The company limits credit risk by primarily depositing cash and cash equivalents with highly-rated financial institutions[35] 17. Income and other taxes Income tax expense for Q1 2024 increased to $81,614 thousand from $74,951 thousand in Q1 2023, mainly due to future withholding taxes and foreign exchange movements, with a $10 million provision for a tax audit dispute at Fekola | Item | Three Months Ended March 31, 2024 ($ thousands) | Three Months Ended March 31, 2023 ($ thousands) | | :------------------------------ | :---------------------------------------------- | :---------------------------------------------- | | Earnings before interest and taxes | 130,095 | 176,855 | | Income tax expense at statutory rate | 35,126 | 47,751 | | Income tax expense | 81,614 | 74,951 | | Current income tax, withholding tax and other taxes | 61,584 | 76,740 | | Deferred income tax expense (recovery) | 20,030 | (1,789) | - The increase in income tax expense is primarily due to the impact of future withholding taxes ($14,820 thousand) and foreign exchange movements ($7,308 thousand)[36] - Fekola SA received a tax audit reassessment notice from the Malian tax authorities for $26 million (excluding penalties) or $45 million (including penalties) for fiscal years 2016-2018; the company has provided a $10 million provision (net $5 million)[37] 18. Supplementary cash flow information Net non-cash expenses increased to $151,322 thousand in Q1 2024 from $121,532 thousand in Q1 2023, influenced by gold stream fair value changes and associate dilution losses, while non-cash working capital changes were $21,985 thousand | Non-Cash Expenses (Credits) Item | Three Months Ended March 31, 2024 ($ thousands) | Three Months Ended March 31, 2023 ($ thousands) | | :---------------------------------- | :---------------------------------------------- | :---------------------------------------------- | | Depreciation and amortization | 90,446 | 97,158 | | Deferred income tax expense (recovery) | 20,030 | (1,789) | | Gold stream fair value change | 10,852 | — | | Dilution loss on associate | 9,982 | — | | Non-cash interest and financing expenses | 9,571 | 2,926 | | Net non-cash expenses | 151,322 | 121,532 | | Non-Cash Working Capital Changes Item | Three Months Ended March 31, 2024 ($ thousands) | Three Months Ended March 31, 2023 ($ thousands) | | :------------------------------------ | :---------------------------------------------- | :---------------------------------------------- | | Accounts receivable and prepaids | 1,549 | (6,605) | | VAT and other receivables | (5,116) | (645) | | Inventories | 203 | (22,667) | | Accounts payable and accrued liabilities | 13,610 | (4,970) | | Current income tax and other taxes payable | 11,739 | 41,113 | | Total | 21,985 | 6,226 | | Other Exploration and Development Expenditures Item | Three Months Ended March 31, 2024 ($ thousands) | Three Months Ended March 31, 2023 ($ thousands) | | :-------------------------------------------------- | :---------------------------------------------- | :---------------------------------------------- | | Fekola Mine, exploration | (1,302) | (1,706) | | Masbate Mine, exploration | (821) | (959) | | Otjikoto Mine, exploration | (1,789) | (494) | | Goose Project, exploration | (2,312) | — | | Finnish assets, exploration | (1,393) | (2,271) | | Total | (8,840) | (15,991) | 19. Segmented information The company's reportable segments include the Fekola, Masbate, and Otjikoto mine operations, the Goose Project development, and other mineral assets like Gramalote and the Calibre equity investment, with mining interests across various geographies - The company's reportable segments include the Fekola, Masbate, and Otjikoto mines, and the Goose Project[41] - Fekola regional assets (including Bantako North, Menankoto, Dandoko, and Bakolobi) are in the exploration and evaluation stage[41] - Other mineral assets include the Gramalote Project and the equity investment in Calibre[41] | Geographical Location | Mining Interests as of March 31, 2024 ($ thousands) | Mining Interests as of December 31, 2023 ($ thousands) | | :-------------------- | :-------------------------------------------------- | :----------------------------------------------------- | | Canada | 1,633,647 | 1,509,289 | | Mali | 1,176,418 | 1,131,343 | | Philippines | 522,201 | 533,781 | | Namibia | 255,252 | 264,747 | | Colombia | 69,474 | 66,184 | | Finland | — | 32,954 | | Burkina Faso | 21,087 | 21,087 | | Other | 4,844 | 4,105 | | Total | 3,682,923 | 3,563,490 | 20. Commitments As of March 31, 2024, the company has capital expenditure commitments for the Fekola mine, Goose Project, and Masbate mine, with significant expenditures anticipated in 2024 and 2025 - Fekola mine commitments include $28 million for underground development, $7 million for tailings storage facility construction, and $6 million for solar plant expansion, all expected in 2024[7] - Goose Project commitments include $30 million for construction activities and $27 million for mobile equipment, with $52 million expected in 2024 and $5 million in 2025[7] - Masbate mine commitments include $1 million for mobile equipment purchases, expected in 2024[7]