Hauling ore at B2Gold's Otjikoto Mine in Namibia
And unlike its peers, the Vancouver company pays a generous dividend
The stock: Just when we thought we were in for another commodity supercycle, global raw materials prices came down off their peaks, spooked by talk of recession. The S&P Goldman Sachs Commodity Index is off 20 percent since its high in June. But gold is an outlier. Precious metals prices have actually crept up in recent months. And the biggest gold producer hereabouts is B2Gold Corp. (TSX:BTO; NYSE:BTG), with operating mines in Mali, the Philippines and Namibia and exploration and development projects on four continents.
The drivers: With the release of its second-quarter financial statement on Aug. 3, B2Gold posted net income of US$38 million (4 cents a share) on revenues of US$382 million. While cash operating costs came in at the low end of its US$620-660/ounce range, higher than expected taxes and foreign exchange variances weighed down the bottom line. Total production by volume was 223,623 ounces, leaving the company on track for projected output of around a million ounces this year.
The company recently acquired Oklo Resources and its exploration properties located close to B2Gold’s Fekola Mine in Mali. The company also owns a one-quarter interest in Calibre Mining Corp. (TSX:CXB), with mines in Nevada and Nicaragua.
B2Gold president and CEO Clive Johnson is one of the most respected and long-serving executives in B.C.’s mining community, having previously built Bema Gold into an international intermediate producer. Under his leadership, the company has far exceeded the environmental and social standards of the mostly developing countries where it operates.
The stock, which comes with a handsome (for miners) 4.65 percent dividend yield, was changing hands for $4.56 as of Tuesday’s close.
Word on the street: “We highlight BTO as a preferred choice for investors seeking exposure to an attractively valued, top-tier senior gold producer with a high-margin production profile, robust pipeline of organic growth opportunities, and a top-tier dividend yield,” wrote Haywood Securities analyst Geordie Mark and associate Shubham Trehan following the Q2 earnings release. They have a “buy” rating and $7.50 target on the stock.
Coming & going: After a 23-year, up-and-down career in the public markets, Richmond-based internet-of-things specialist Sierra Wireless (TSX:SW; NASDAQ:SWIR) has accepted a takeover offer from California-based Semtech Corp. (NASDAQ:SMTC) for US$1.2-billion, or $31 a share. The deal is expected to close in Semtech’s fiscal 2023.