On Monday, Scotiabank adjusted its outlook on B2Gold (NYSE:BTG) Corp. (BTO:CN) (NYSE: BTG), reducing the share price target to C$5.50 from the previous C$6.50. The firm retained its Sector Outperform rating on the gold mining company's stock. The revision follows the release of B2Gold's updated technical report on the Fekola mine located in Mali.
The new price target reflects changes in the valuation of the Fekola mine complex. According to Scotiabank, the net present value (NPV) at a 5% discount rate for the Fekola Complex is now estimated at C$981 million, a significant decrease from the prior C$2,663 million valuation.
This adjustment is attributed to an increase in unit operating costs and a higher proportion of waste mining expected over the remainder of the mine's life. The life-of-mine all-in sustaining costs (AISC) are now projected at $1,368 per ounce, up from the previous estimate of $1,002 per ounce.
The latest mine plan includes the integration of the Anaconda and Dandoko areas, which are known for their lower strip ratios and higher-grade ore. These areas will provide both oxide and sulphide ore that will be transported to the Fekola mill for processing.
Scotiabank's valuation approach has shifted from an enterprise value per ounce (EV/oz) basis to a discounted cash flow (DCF) method for the Fekola Regional assets. The DCF valuation ascribes C$337 million to the Fekola Regional as part of the overall value of the Fekola Complex.
B2Gold Corp. is currently in the process of negotiating with the government of Mali. The company is awaiting the receipt of an implementation decree and exploitation permits necessary to commence mining operations at the Fekola Regional deposits. The commencement of mining activities at Anaconda is tentatively scheduled for the fourth quarter of 2024.
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