B2Gold (TSX: BTO) CEO Clive Johnson says the company is out of the penalty box after releasing updates on its Fekola mine and Goose project last week.
“It’s good timing for B2Gold to be back at this conference,” he told the Gold Forum Americas in Colorado Springs on Monday.
“This is a real classic turnaround story.”
After producing just below 1 million ounces of gold in 2023, B2Gold’s 2024 guidance is 800,000-870,000 ounces following a delay in receiving a permit for Fekola Regional in Mali.
“We always knew 2024 was going to be a challenging year,” Johnson said.
“There’s a corporate term for it – I think it’s ‘shittier’.
“The good news is this is the turning point.”
Fekola
The Fekola Complex in Mali will account for just over half of B2Gold’s group production this year.
Around 100,000oz of production from Fekola Regional had been delayed due to negotiations with the Mali government over the 2023 Mining Code.
“The problems in Mali are not to be underestimated in terms of perception of political risk,” Johnson said.
“We actually lost about C$5 billion in market cap in this company from September of 2020, to earlier this year, in February.
“We've been hammered in the market mainly because of the uncertainty in the future of Mali.”
Last week, B2Gold announced it had reached agreement with the Mali government, which would see the existing operation remain under the 2012 Mining Code, with an 80:20 ownership split between the company and the government.
Fekola Regional will fall under the new 2023 Mining Code and have a 65:35 ownership split, with permits for both Fekola Regional and the Fekola underground to be expedited.
Despite the higher royalties for Fekola Regional, Johnson said it wasn’t prohibitive.
“Because we’re just trucking ore there, the economics make sense to us.”
Johnson said the misconceptions about Mali were false and it had a long, successful record of gold production.
“Ask Mark Bristow and others. It's been a very good place for gold mining. [The government has] honored their laws time and time again.”
Goose
Last week B2Gold also announced capital costs for its Goose development in Nunavut had increased by 23% to C$1.54 billion, half of which was attributed to a three-month delay in first gold to the September quarter of 2025.
As of June 30, the company had spent C$1.01 billion on construction, or 66% of the estimated total.
Goose is set to pour first gold in mid-2025, ramping up to 310,000ozpa for the first five years of a 14-year mine life.
The remote Goose project was acquired in April last year via the C$1.1 billion takeover of Sabina Gold & Silver Corp.
“Why did we do it? Well, this is right in our wheelhouse. B2Gold is known for taking on challenging projects,” Johnson said.
Johnson said the company usually acquired projects at feasibility stage and did the studies to its own standards.
“We came in and did a deal here on a single asset company that decided they would try actually to build a mine and remote part of Canada without a lot of construction experience and also without a strong balance sheet,” he said.
Sabina had already financed the project via “alternative” sources.
“At the end of the day, we had to make a decision in April last year to do the due diligence we could,” Johnson said.
“We had to pull the trigger, because if the previous owner had drawn down C$1 of the financing they were contemplating – private equity streams, offtake agreements – we would have walked away forever, because that financing, in our estimation, was going to cost something around C$200 million off the NPV of the project.
“This is something that's real threat to our industry, as far as I'm concerned. Explorers who find something, don't try and build it, don't try and finance it. Be taken over by a company that has a financial firepower and the technical capability to build these mines.”
M&A
While B2Gold has a strong track record of accretive acquisitions, it’s not looking at M&A.
Johnson said the company was focused on organic growth with the 234,000ozpa Gramalote project in Colombia targeted to be brought online later this decade.
“We are not looking at any serious M&A. Why would we with 600,000oz of potential production growth from existing assets?”
Johnson said the company would continue to invest in explorers, just as it has with Snowline Gold (TSX: SGD), where it owns 9.9%.
“We just want to be a friendly big brother. We can help down the road,” he said.
“You'll see us do that to fill the gap funding for junior companies.
“It's inexplicable. Quality junior exploration projects and companies can't raise money at a reasonable level.
“The response to that is we can play a role, not as trying to bear hug or be aggressive. That's not our style. We do friendly takeovers throughout the whole piece.”
Production is set to grow to 1.03-1.15Moz next year.
B2Gold’s share price is up by more than 25% in the past five days alone, off the back of last week’s news.
“We've been in the penalty box for a couple of years now, we're coming out, our skates are sharp, we’ve got a new stick and we’re looking to score some goals, so we’re back.”