B2Gold Reports Positive 2018 Fourth Quarter/Annual Results; Record Annual Gold Production of 953,504 Oz, Revenue of $1.2 B & Operating Cash Flows of $

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Algemeen advies 13/03/2019 06:48
VANCOUVER, March 12, 2019 /CNW/ - B2Gold Corp. (TSX: BTO, NYSE AMERICAN: BTG, NSX: B2G) ("B2Gold" or the "Company") is pleased to announce its operational and financial results for the fourth quarter and year-end December 31, 2018. The Company previously released its gold production and gold revenue results for the fourth quarter and full-year 2018, in addition to its production and cash cost guidance for 2019 (see news release dated 1/16/19). All dollar figures are in United States dollars unless otherwise indicated.

2018 Full-Year Highlights
•Record annual consolidated gold production, of 953,504 ounces of gold, near the top end of the revised guidance range (of between 920,000 and 960,000 ounces) and exceeding the upper end of the original guidance range (of between 910,000 and 950,000 ounces), a significant increase of 322,939 ounces (51%) over the prior-year; marking the tenth consecutive year that B2Gold achieved record annual consolidated gold production
•Record annual consolidated gold revenue of $1.2 billion, a dramatic increase over 2017
•Consolidated cash operating costs (see "Non-IFRS Measures") of $495 per ounce, beating guidance (of between $505 and $550 per ounce) and well below the prior year of $542 per ounce
•Consolidated all-in sustaining costs ("AISC") (see "Non-IFRS Measures") of $758 per ounce, well below its guidance range (of between $780 to $830 per ounce) and significantly below the prior year of $860 per ounce
•Record annual consolidated cash flows from operating activities of $451 million ($0.46 per share), a dramatic increase of 191% ($296 million) over 2017
•Net income of $45 million ($0.03 per share) and adjusted net income (see "Non-IFRS Measures") of $162 million ($0.16 per share)
•The new Fekola Mine in Mali, in its first full-year of commercial production, continued to significantly outperform expectations, with gold production of 439,068 ounces, exceeding the upper limit of its already increased guidance range (of between 420,000 and 430,000 ounces), coupled with AISC of $533 per ounce, well below the low end of its guidance range (of between $575 to $625 per ounce)
•The Masbate Mine in the Philippines achieved record annual gold production of 216,498 ounces, exceeding the upper limit of its already increased guidance range (of between 200,000 and 210,000 ounces), with AISC of $744 per ounce, beating the low end of its reduced guidance range (of between $780 to $830 per ounce)
•On October 1, 2018, the Company repaid in full its $259 million aggregate principal amount of convertible senior subordinated notes (the "Notes") on maturity; by year-end the Company had reduced its total debt outstanding to approximately $480 million from $700 million at the beginning of the year
•On October 25, 2018, the Company announced a substantial increase in the gold mineral resource estimate for the Fekola Mine and positive results from the ongoing Fekola Mill Expansion Study
•In October 2018, the Company was granted the mine permit for the Limon Central Pit in Nicaragua and announced positive results from the Expansion Study at El Limon Mine
•Looking forward, B2Gold remains well positioned for continued strong operational and financial performance with production guidance of between 935,000 and 975,000 ounces of gold for 2019 with forecast cash operating costs of between $520 and $560 per ounce and AISC of between $835 and $875 per ounce; in addition, the Company will focus on organic growth through both expansion potential at its existing mines and through its exploration and development projects


2018 Full-Year and Fourth Quarter Operational Results

For B2Gold, 2018 was a year of transformational growth, highlighted by the first full-year of commercial production from its new large, low-cost Fekola Mine in Mali (which achieved commercial production on November 30, 2017) and record annual production from its Masbate Mine in the Philippines. For the tenth straight consecutive year, B2Gold achieved record annual consolidated gold production.

For full-year 2018, B2Gold's consolidated production was an annual record of 953,504 ounces of gold, near the top end of the revised guidance range (of between 920,000 and 960,000 ounces) and exceeding the upper end of the original guidance range (of between 910,000 and 950,000 ounces). Consolidated gold production for the year dramatically increased by 322,939 ounces (51%) compared to 2017. The new Fekola Mine continued to outperform expectations and exceeded the upper limit of its already increased production guidance range (of between 420,000 and 430,000 ounces) with gold production of 439,068 ounces in 2018. The Masbate Mine achieved another very strong year in 2018, producing an annual record 216,498 ounces of gold, and also exceeded the upper limit of its already increased production guidance range (of between 200,000 to 210,000 ounces). In addition, the Otjikoto Mine in Namibia had another solid year in 2018, producing 167,346 ounces of gold, above the mid-point of its production guidance range (of between 160,000 and 170,000 ounces). The strong operational performances by the Fekola, Masbate and Otjikoto mines more than offset production shortfalls relating to the Company's La Libertad and El Limon mines in Nicaragua (which represent 14% of the Company's 2018 consolidated gold production), whose operations in 2018 were negatively affected by consequences of the national political unrest in that country.

In the fourth quarter of 2018, B2Gold's consolidated gold production was 231,687 ounces, slightly exceeding reforecast production and approximately in-line with the original budget. In the fourth quarter of 2017, including 72,903 ounces of pre-commercial production from Fekola, consolidated gold production was 240,753 ounces.

The Company's full-year 2018 consolidated cash operating costs were $495 per ounce, beating guidance (of between $505 and $550 per ounce) and well below the prior year of $542 per ounce (including Fekola's pre-commercial production results). Consolidated AISC were $758 per ounce, well below the guidance range (of between $780 to $830 per ounce) and significantly below the prior year of $860 per ounce (including Fekola's pre-commercial production results), reflecting the positive impact of the first-full year contribution of low-cost production from the Fekola Mine and Masbate's very strong operational performance.

In the fourth quarter of 2018, consolidated cash operating costs were $523 per ounce (Q4 2017 - $473 per ounce, including Fekola's pre-commercial production results) and AISC were $814 per ounce (Q4 2017 - $754 per ounce, including Fekola's pre-commercial production results).

2018 Full-Year and Fourth Quarter Financial Results

For the full-year 2018, consolidated gold revenue was a record $1.2 billion on record sales of 970,409 ounces at an average price of $1,262 per ounce compared to $639 million (excluding $101 million of pre-commercial sales from Fekola) on sales of 510,966 ounces at an average price of $1,250 per ounce in 2017. This significant increase in gold revenue was attributable to the higher gold production and timing of gold sales, relating to the sale of gold bullion and in-circuit inventories included in opening inventories at the beginning of the year. In 2017, for accounting purposes, gold revenue earned net of related production costs from the sale of pre-commercial production were credited to Fekola's mineral property development costs.

For the fourth quarter of 2018, consolidated gold revenue was $272 million on sales of 221,307 ounces at an average price of $1,230 per ounce compared to $174 million on sales of 137,695 ounces at an average price of $1,264 per ounce in the fourth quarter of 2017. The 2017 results exclude $101 million of revenue from the sale of 79,243 ounces of pre-commercial production from Fekola.

For the full-year 2018, consolidated cash flows from operating activities significantly increased by $296 million (191%) to $451 million ($0.46 per share) from $155 million ($0.16 per share) in 2017. In 2017, for accounting purposes, gold sales proceeds earned net of related production costs from the sale of pre-commercial production were credited to Fekola's mineral property development costs. For the fourth quarter of 2018, consolidated cash flows from operating activities were $74 million ($0.07 per share), almost tripling from $26 million ($0.03 per share) in fourth quarter of 2017.

For the year ended December 31, 2018, the Company recorded net income of $45 million ($0.03 per share) compared to net income of $62 million ($0.06 per share) for 2017. During 2018, the Company recorded a net impairment charge of $55 million, mainly relating to impairment charges for La Libertad Mine in the third and fourth quarters of 2018 and the sale of the Mocoa porphyry copper-molybdenum deposit in the second quarter of 2018. In the fourth quarter of 2018, the Company recorded a loss of $50 million ($(0.06) per share) compared to net income of $34 million ($0.03 per share) in the fourth quarter of 2017, mainly as a result of impairment charges and mineral property write-offs.

Adjusted net income was $162 million ($0.16 per share) for 2018 compared to $52 million ($0.05 per share) for 2017. Adjusted net income for the fourth quarter of 2018 was $14 million ($0.01 per share) compared to adjusted net income of $6 million ($0.01 per share) in the fourth quarter of 2017.

The Company recorded a net current income tax expense of $109 million for the year ended December 31, 2018 compared to $27 million in 2017 consisting of current income tax of $77 million (2017 - $15 million), the 10% priority dividend to the State of Mali of $18 million (2017 - $2 million), withholding tax (on intercompany interest/management fees) of $9 million (2017 - $5 million), and Nicaraguan ad valorem and alternative minimum tax of $5 million (2017 - $5 million). For full-year 2018, consolidated net income before taxes totaled $193 million. For accounting purposes, this amount was net of $217 million of unrecognized and non-deductible tax losses. These unrecognized and non-deductible tax losses of $217 million, mainly consisted of accounting depreciation expense of $69 million (relating to consolidated purchase price adjustments), mineral property impairments and write-downs of $65 million, share-based compensation expense of $22 million, head office general & administrative and interest expenses of $34 million (net of derivative gains), and other unrecognized tax losses of $27 million relating to the Nicaraguan operations. Excluding these non-deductible and unrecognized tax losses, adjusted pre-tax net income was $410 million, resulting in a consolidated effective income tax rate for the Company's mining operations of 19% ($77 million/$410 million).

Liquidity and Capital Resources

With the Fekola Mine in production, the resulting increase in gold production levels combined with low costs have dramatically increased B2Gold's production, revenues, cash from operations and free cash flows with ongoing benefits expected to continue for many years, based on current assumptions. For the full-year 2018, consolidated cash flows from operating activities significantly increased by $296 million (191%) to $451 million ($0.46 per share) from $155 million ($0.16 per share) in 2017.

At December 31, 2018, the Company had cash and cash equivalents of $103 million compared to cash and cash equivalents of $147 million at December 31, 2017. Working capital at December 31, 2018 was $156 million compared to a working capital deficit of $99 million at December 31, 2017. On October 1, 2018, the Company repaid in full its $259 million aggregate principal amount of the Notes (plus accrued interest) upon maturity. The repayment of all outstanding principal and accrued interest under the Notes amounted to approximately $263 million. The working capital deficit at December 31, 2017 resulted from the classification of the Company's Notes to current liabilities since they were due on October 1, 2018. Repayment of the Notes reflects the ongoing second phase of B2Gold's strategy to fund construction of the Fekola Mine in Mali without using equity financing. The Company funded construction of Fekola using a combination of operating cashflows from existing mines, debt facilities and prepaid gold contract sales. Following the successful achievement of commercial production at the Fekola Mine in late 2017, the Company has been reducing its total debt outstanding throughout the course of 2018. The Company started 2018 with total debt outstanding of approximately $700 million (comprised of the drawn portion of the Revolving Credit Facility ("RCF"), Notes and equipment loans). The Company has reduced its total debt outstanding to approximately $480 million by December 31, 2018 (including approximately $80 million in equipment loan financing), a reduction of $220 million for the year.

At December 31, 2018, the Company had drawn $400 million under the $500 million RCF, leaving an undrawn and available balance under the existing facility of $100 million.

At December 31, 2018, the Company had $67 million of accrued taxes payable. The increase in accrued taxes over 2017 relates mainly to the start-up of the Fekola Mine in September 2017. On a cash basis, the majority balance of these accrued taxes become due and will be paid in the second quarter of 2019 (in conjunction with the filing of the related 2018 corporate income tax returns). In addition, the Company expects to make 2019 corporate income tax installment payments of approximately $65 million in 2019.

Operations

Mine-by-mine gold production in the fourth quarter and full-year 2018 was as follows (presented on a 100% basis):
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