B2Gold Has Golden Q4 and Full Year, EPS Tainted by Rising Share Count

Andrew Klips  |

Shares of B2Gold Corp. ($BTG) ($BTO:CA) started the day in the green, but have fallen into negative territory on Friday after the dually-listed company released its financial report for the fourth quarter and full year that showed record gold sales and production.

For the quarter ended December 31, the Vancouver, British Columbia-based miner reported gold revenue of $138.1 million, up form $67.3 million in the year prior quarter.  Net income for the quarter was $26.2 million, or 4 cents per share, compared to $10.95 million, or 3 cents per share in Q4 2012.  On a fully diluted basis, net income was 2 cents per share in the latest quarter as the company increased its share structure from 397.42 million at the end of 2012 to 719.72 million at the end of last year. 

On an adjusted basis, net income was $3.7 million, or 1 cent per share, versus $18 million, or 5 cents per share, in the year ago quarter.  B2Gold cited a “significant” decline in the average realized gold price, higher operating costs, derivative losses and depreciation charged per ounce of gold sold as factors in the lower adjusted profits.

Gold production in the fourth quarter was an all-time high at 105,577 ounces, up by 138 percent from a year earlier.  Gold produced at the Masbate Mine in the Philippines, which B2Gold acquired in January 2013, accounted for 106% of the increase.  The company’s La Libertad and Limon Mines in Nicaragua produced 32-percent more gold than in the fourth quarter of 2012.

In the fourth quarter, the Masbate Mine produced 46,963 ounces of gold at a cash operating cost of $779 per ounce from 1.71 mllion tonnes of ore milled at an average grade of 1.03 grams per tonne gold.  For the year, production at the mine was in line with corporate guidance at 176,483 ounces of gold.

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The Libertad Mine produced 42,709 ounces of gold in Q4 and 138,726 ounces in 2013.  Q4 gold came at a cash operating cost of $495 per ounce and a total cash cost of $522 per ounce from 522,846 tonnes of ore milled at an average grade of 2.75 g/t gold.

The Limon Mine produced 15,906 ounces of gold in Q4, its best quarterly production in 12 years, and 58,191 ounces of gold in 2013, exceeding the top end of guidance.  Q4 production was at a cash operating cost of $608 per ounce and a total cash cost of $667 per ounce from 119,487 tonnes of ore milled at an average grade of 4.53 g/t at a processed gold recovery of 91.4%.

B2Gold sold a record 106,185 ounces of gold at an average price of $1,300 per ounce in the fourth quarter.  For comparison, gold sold by B2Gold in Q4 2012 fetched an average of $1,700 per ounce.

Consolidated cash operating costs were 8 percent below budget at $638 per ounce of gold.  All-in sustaining cash costs were $986 per ounce, also below budget.

For all of 2013, gold revenues were a record $544.3 million, up from $259.05 million in 2012.  Net income was $67.3 million, or 7 cents per share, on a diluted basis, compared to $51.91 million, or 13 cents per share, in 2012.

On an adjusted basis net earnings for 2013 equaled $63.8 million, or 10 cents per share, compared to $79.7 million, or 21 cents per share.

B2God ended the year with $252.7 million in cash and cash equivalents.

The vastly improved gold sales and rising profits are great headline figures, but the dramatic increase in the number of shares, certainly was not overlooked by the investment community as it squeezed profits per share.  Shares rose as high as $3.33 in early trading, marking their highest point since August 16, but sold off in the afternoon to close the day down by 3.4 percent at $3.10.  So far in 2014, share of BTG are ahead by about 53 percent.

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