B2gold Corp Q4 FY2021 Earnings Call

Good afternoon. My name is Pam, and I will be your conference operator today. At this time, I'd like to welcome everyone to the B2Gold Fourth Quarter and Year-end 2021 Financial Results Conference Call. Mr. Johnson, you may begin your conference.

Thanks, operator. Thanks for joining us. We're here, as the operator said, to report on the fourth quarter of 2021 and the year-end results of 2021, financial results. We had another very strong quarter and the year 2021, ending up at a very strong cash position. Our costs were in good shape. We're pleased with those results, and I think we're well-positioned to continue with our responsible mining from all of our sites and to push to grow the company as well. I'm going to turn it over now to Mike Cinnamond, who's going to talk you through the highlights of the financial results, and then I'll come back and talk about perhaps outlook, where we see ourselves going. Thank you. Over to you, Mike.

Thanks, Clive. I'm going to talk about the quarter and then the full year. Gold revenue for Q4 was $526 million, which included 292,000 ounces at an average price of $1,800 per ounce. The gold price averaged for the quarter and for the full year where we anticipated it would be when we issued our cash flow guidance at the start of the year. However, now we're seeing it at $1,900 an ounce due to the Ukrainian crisis, and prospects for gold sales are good as we're currently selling into those higher prices. Production-wise, consolidated production was 305,000 ounces for the quarter, just slightly over 2,000 ounces above budget. We budgeted 7.75 million tonnes for this year and averaged over 9 million tonnes throughput. This was partially offset by lower recoveries from lower grade stockpile material. Our cash costs were produced consolidated $484 an ounce, $79 higher than budget due to inflationary pressures and stronger local currencies, particularly in Namibia. Our all-in sustaining costs for the quarter were $860 per ounce, which was $82 higher than budget. For the full year, our revenue was just under $1.8 billion, with production of 1,047,000 ounces. We're pleased to report that consolidated cash costs came in at $535 per ounce, just $15 ahead of budget, and all-in sustaining costs were $888 per ounce, which was actually $6 less than budget. Overall, we ended the year with a solid cash position of $673 million and have $600 million undrawn from our revolver.

Thanks, Mike. Now I’m going to make a few comments looking forward, and then we'll open up for questions. Let’s start by discussing Mali, where our largest mine, Fekola, is located. There are ongoing discussions surrounding Mali in the news, but I want to talk about the reality from a gold mining perspective. Many international companies have successfully operated in Mali due to its significant wealth and the government's historical support for mining investments. We've established a good relationship with the government, which acknowledges the importance of mining for the economy. We believe that our contributions during COVID-19 have demonstrated the positive impact of responsible mining on the local economy. So, we are really committed to expanding in Mali, including Phase 1 at Anaconda, where we see tremendous potential. We will also be releasing the new resource in March, reflecting our optimism for mining and growth opportunities.

In terms of Anaconda, we are currently working on a PEA for Phase 1, focusing on trucking saprolite material to the Fekola mill, with a potential of 100,000 ounces a year starting late this year or early next year while continuing to explore and expand the resource. The environmental and permitting studies are already completed for this Phase 1 approach.

Regarding the TMG zone adjacent to the Cardinal Zone, it hasn't been drilled as extensively but is included within the Cardinal resource. We're allocating a significant portion of our exploration budget to continue drilling in various areas, including the FMZ and Cardinal, which we believe could offer potential underground opportunities.

As for Fekola, we are aiming for production of around 600,000 ounces in the near term along with the additional capacity from Anaconda and Cardinal. While there will be challenges with grade profiles, we believe that effective exploration and resource management will allow us to maintain production levels.

Consolidated cash costs are expected to increase due to inflationary factors in capital and operating costs. However, we've been actively working on optimizing our operations to mitigate some of these impacts. We believe that these measures will help us to maintain a competitive edge moving forward.

Your first question comes from Ovais Habib with Scotiabank.

Congrats on a solid 2021. I have a couple of questions regarding Anaconda. You're expecting an update on the resource in Q1. Will there be a PEA on a stand-alone or trucking option, and can you provide criteria for determining the size required for a stand-alone project?

We are currently focused on the PEA for Phase 1, where trucking material is viable. We are evaluating the potential for a standalone operation based on the additional resources. Currently, we are not putting a hard number on it because we need further drilling to determine the implications before making a final decision.

Your next question comes from Josh Wolfson with RBC. Clive Johnson, CEO, stated that they are currently focused on the PEA for Phase 1, where trucking material is viable. They are evaluating the potential for a standalone operation based on the additional resources. At this moment, they are not assigning a definitive number since further drilling is needed to assess the implications before making a final decision.

Can you elaborate more on the upside potential of Anaconda and Cardinal? What are the baseline production estimates, and how long can Fekola sustain 600,000 ounces?

We are looking at ongoing production from both Anaconda and Cardinal, with indications suggesting that maintaining production at around 600,000 ounces annually is feasible in the short term. However, continued exploration and resource updates will be critical to ensuring the sustainability of production levels over time.

We are optimistic about both Anaconda and Cardinal providing significant additional resources that could enhance Fekola's production capabilities, but we need to evaluate incoming data from ongoing exploration.

In summary, we expect to maintain robust operational performance moving forward, supported by effective resource management and exploration efforts.

There are no further questions at this time. Please proceed.

Thanks, everyone, for your participation and good questions today. We're looking forward to sharing further positive developments as they arise. Thank you.

Ladies and gentlemen, this concludes your conference call for today. We thank you for participating and ask that you please disconnect your lines. Have a great day.