B2Gold(US:BTG)2021-11-04 03:18Financial Data and Key Metrics Changes - The company reported revenues of $511 million for Q3 2021, based on the sale of 287,000 ounces at an average price of $1,782 per ounce [14] - Year-to-date average released price for sales is $1,794 per ounce, reinforcing cash flow guidance [14] - Operating cash flow for the quarter was $320 million, translating to $0.30 per share, with an updated guidance for the second half of the year now at $510 million [32][35] - GAAP earnings per share for the quarter were $0.12, with year-to-date GAAP earnings at $0.27 per share [32] Business Line Data and Key Metrics Changes - Total production for Q3 was 310,000 ounces, exceeding budget by 21,000 ounces, with Fekola producing 166,000 ounces, Masbate 61,000 ounces, and Otjikoto 69,000 ounces [15][16][17] - Fekola's production was boosted by higher throughput, processing closer to 8.4 million tons annually [15] - Masbate outperformed with better grades and recoveries, while Otjikoto also exceeded budget expectations [16][17] Market Data and Key Metrics Changes - The company is experiencing cost inflation across various sites, with fuel costs up approximately $25 per ounce year-to-date [18][19] - All-in sustaining costs year-to-date are $795 per ounce, just $14 over budget, indicating effective cost management despite inflationary pressures [20] Company Strategy and Development Direction - The company is focused on optimizing production and advancing development projects, including Gramalote and Menankoto [5][6] - A significant exploration budget of $65 million is allocated, with 65% directed towards existing mines and 25% for grassroots exploration [9] - The company is actively looking for M&A opportunities to enhance production and development projects [10][60] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the strong financial position and cash flow generation, despite challenges from COVID and inflation [4] - The outlook for 2022 is positive, with expectations of production near 600,000 ounces, driven by Cardinal and Anaconda projects [44][60] Other Important Information - The company received a three-year extension of the Bantako license, indicating strong government relations [12] - A sale of the Kiaka Project in Burkina Faso was announced, with expected cash and shares consideration of $45 million upon closing [30] Q&A Session Summary Question: Cost trends in Q4 and 2022 - Management indicated cost inflation is expected to be around 5% to 6% for the year, with production increases helping to offset some of the cost overruns [40][41] Question: Production guidance with Cardinal - Cardinal is expected to contribute around 60,000 ounces annually, with ongoing drilling to increase reserves [42][43] Question: Grade expectations for Cardinal - The initial grade expectations were revised, with management anticipating an increase to above 2 grams per ton in 2022 [48] Question: Gramalote project updates - Engineering work is ongoing, with a phased approach to permitting expected to begin in Q1 2022 [51] Question: Tailings facility expansion - The next lift for the tailings facility is planned, with construction expected to begin in late 2022 or 2023 [66][68]