B2Gold (TSX:BTO) Q3 2026 Earnings Call

0:00 Thank you for standing by. This is the conference operator. Welcome to the B2Gold Corporation's 3rd Quarter 2026 Financial Results Conference Call. As a reminder, all participants are in a listen-only mode and the conference is being recorded. After the presentation, there will be an opportunity for analysts to ask questions. To join the question queue, you may press star then 1 on your telephone keypad. You will hear a tone acknowledging your request. Should you need assistance during the conference call, you may reach an operator by pressing star then 0. I would now like to turn the conference over to Mike Cinnamond, President and CEO of B2Gold. Please go ahead.

0:44 Thank you, operator, and good morning. Good morning, everyone. I think this third quarter, it was a strong quarter for V2Gold, and I think it reinforces the progress that we've made in strengthening the business over recent months. You saw we delivered solid operating results with more than 193,000 ounces of gold produced, and it I think it puts us well on track to deliver our full year production guidance. And also, based on that strong year-to-date performance, I'm also pleased to announce that we're also lowering our consolidate all-in sustaining cost guidance for the year by more than $100 an ounce at the midpoint.

1:30 And in the period, we generated $48 million in free cash flow, and that reflects the improving trajectory of the business, I think, The major construction and ramp-up spending in Goose is now behind us, and our Gold prepaid commitments completed by the end of June this year, we're entering a period of increasing free cash flow generation for the company. I think that the third quarter also was highlighted by a couple of important achievements. As you know, the first one at Focola, we received a Manan Kodo exploitation permit and have since commenced stripping activities there. This definitely represents an important step forward to bring Focola Regional Ore into the mine plan, which we've given guidance that we expect to commence earlier in 2027. And Anna Goose, completion of the phase one crushing circuit upgrades shortly after the quarter end.

2:26 That represents another important step in the ramp up of that operation. And those are the two of the key objectives that we kind of laid out earlier in the year. And I'm very pleased to see that we're making progress. as we go there. So you'll hear more from Bill and get more detail on the focozal regional permit and the goose crushing circuit plans shortly in Bill's comments. And we also continued returning capital to shareholders. We distributed $59 million through dividends and share repurchases during the quarter and that included $33 million in share buybacks, so we're continuing to pursue that program. I think as our free cash flow profile continues to grow, will remain focused on a disciplined approach, I'd say, to capital allocation. We'll balance returns to shareholders with investment in our existing operations, as well as, as we've talked about before, expiration opportunities across our portfolio.

3:25 And actually, on expiration news, at the end of September, we released results from the ongoing expiration program at Goose and the Back River District, and In addition, in those results, there were some excellent infill results at Lama and Novolyuk, which increases our confidence in the underground resource base there. But we also announced a discovery of high-grade mineralization on the western limb of the banded iron formation that hosts Novolyuk. And this discovery, which is about, I think it's about 150 meters down plunge from the known mineralization, the discovery's been named Tatook. and the grade, the host rock of Tatook Intersection were very encouraging, I think.

4:12 And also it signifies the first new discovery of goose since we acquired the project, so very excited about that. You'll see us continue to pursue exploration there. Looking at the balance of the year, I think we expect an even stronger fourth quarter, driven primarily by goose, and where mill throughput Krohnert. And, you know, when we look forward to 2027, we see several important catalysts that should really continue to strengthen both our production and our cash flow profile. So we'll have Focola Regional is expected to begin contributing more earlier in the year. Phase 2 upgrades at Goose are expected to further increase throughput around the mid-year.

5:03 Development work at Antelope deposited at Ochicota that's progressing well and we're also exploring opportunities for mine life extensions at Miss Batty using the lands perhaps higher gold price assumptions there so there's still some work to do on that but we're we're looking at that and you know we'll pursue that as we go through next year. Final comment I'd make yeah I mentioned the prepaids are delivered into by June already and we have some remaining gold collar contracts but the last of those are scheduled to roll off in January 27. So I'd say overall, I'm very pleased with the direction we're heading in as a business. We're delivering against our operational objectives. Financial flexibility or balance sheet strength is improving.

5:49 And as I just mentioned, we have several important catalysts ahead of us for 27. So together, I think these position the company well to generate stronger free cash flow and to continue I'm creating value for all our shareholders. So I'll now hand over the call to Michael McDonald to discuss the financial highlights for the quarter. So over to you, Michael.

6:11 Thanks, Mike, and good morning, everyone. Revenue for the quarter was $836 million, driven by consolidated gold sales of approximately 195,000 ounces at an average realized gold price of $4,287 per ounce. Importantly, as Mike mentioned, this was our first full quarter of sales at spot gold price following the completion of the gold prepaid deliveries in June 2026, a big milestone for the company. Net income attributable to shareholders was $409 million, or $0.31 per share. Net income benefited from a $253 million impairment reversal at the Ficola Complex, and many more.

6:56 After adjusting for those items and other non-recurring impacts, adjusted net income attributable to shareholders was $183 million, or 14 cents per share, a very strong result and what was always forecast to be the lowest gold production quarter for the year for B2Gold. It's important to note that adjusted net income was also reduced by $47 million of realized losses related to our gold collar contracts during the quarter. Excluding those realized losses, adjusted net income would have been materially higher.

7:45 The remaining gold collar contracts finished in December, 2026, at which point B2Gold will be completely unencumbered by both gold prepay and gold collar contracts for all of 2027. Operating cash flow before working capital adjustments was $387 million, or 29 cents per share, during the quarter, while operating cash flow after working capital adjustments was $239 million. As expected, we are beginning to see the benefit from the completion of the gold prepay contract which allows us to fully realize prevailing gold prices on all ounces sold. Free cash flow for the quarter was $48 million.

8:30 This result reflects continued investment in Goose as the operation advances through ramp-up while also benefiting from stronger realized gold prices and improving operational performance across the portfolio. That had not yet been sold at quarter end, as well as approximately $29 million of costs associated with the mobile crusher purchase and fire remediation work. These included approximately $12 million for the mobile crusher and $17 million for remediation work related to the fire from earlier this year. Our balance sheet remains very strong. At quarter end, we held $294 million in cash and cash equivalents, had working capital of $497 million, and had approximately $705 million available under our revolving credit facility.

9:33 This liquidity position provides significant flexibility as Goose continues to ramp up and as we advance growth opportunities across the business. Looking ahead, as Mike mentioned, We have lowered our consolidated all-in-sustaining cost guidance for the year to between $2,230 and $2,410 per gold outsold. The improved outlook reflects strong year-to-date operating performance across the portfolio, particularly at Masbari and Ojikoto, together with lower expected costs at FACOLA. The improvement at Ms. Boddy primarily reflects the strong production performance we have seen throughout the year, which has allowed the operation to benefit from greater fixed cost leverage on a per ounce basis. With that, cash costs have been lowered to $800 to $900 per gold ounce produced, $100 per ounce below the previously guided range, and all in sustaining costs have been lowered to $1,250 to $1,400 per gold ounce and many more. Thank you. Thank you.

11:09 and others. The lower costs are mostly a factor of lower royalties paid as a result of a lower gold price than what we had assumed when we set guidance at the start of the year. It is a good position to be in at this stage of the year and the rest. With that, I'll now turn the call over to Bill for an operational update.

11:53 Thanks, Michael. From an operating perspective, the third quarter was largely in line with our expectations. We remain on track to achieve our full-year production, cost and capital guidance. Consolidated production totaled approximately 193,000 ounces during the quarter. Strong performances from Mount Body and Ochocoto, together with continued improvements at Goose, helped offset lower production at Focola as mining activities progressed according to plan. At Focola, production of approximately 78,000 ounces reflect the transition of open pit activities from ore to the Phase VIII waste stripping campaign that will continue through the rest of the year and the majority of next year. On August 7th, we achieved with the receipt of the Menincoto Exploitation Permit, which allows us to begin mining at the Focola Regional.

12:46 Shortly after the end of the third quarter, stripping activities commenced at the Focola Regional and we are now underway unlocking this important ore source for the Focola Complex. The company anticipates mining, pre-stripping activities and finalization of a tolling agreement will be completed in the coming months and more production from Pecola Regional is expected to commence in early 2027. Following a wrap-up year in 2027, we continue to estimate production from Pecola Regional will add approximately 150,000 ounces per year at steady state production levels from 2028 onward. At Goose, the team continued to execute on the repair and upgrade work on the fixed crushing plant. During the quarter, we successfully commissioned a mobile crushing unit, which provided additional processing flexibility and supported increased throughput while work in phase one of the fixed crushing circuit upgrades continued.

13:41 While that work was ongoing, Goose produced approximately 40,000 ounces in the quarter. Importantly, short after quarter end, we completed the phase one upgrade of the fixed crushing plant. With the phase one upgrade now complete, Krohnert, and David Krohnert. Throughfoot was averaging approximately 3,200 tons per day following commissioning mid-October, and we expect those rates to continue to support GOOS to delivering a significantly stronger fourth quarter to achieve our production guidance range. Beyond 2026, we are still on track for Phase II upgrades to the crusher in the second quarter of 2027. Just as a reminder, this will include a 10-week shutdown of the fixed crusher, In which time we expect to feed them in with stockpiled crushed ore.

14:26 We plan to build this inventory over the winter using the mobile crusher, which is being winterized to support reliable operation throughout the . Phase two upgrades are complete mid-year 2027. We expect the crusher to consistently deliver an average of 4,000 times per day . This will be an important deliverable for us to be able to progress towards our targeted annual production and 300,000 ounces per year of goose. Masbati and Ochocoto both delivered another strong quarter of operations, continuing the excellent performance through 2026. These operations remain key contributors to the company's production profile and cash flow generation.

15:11 Across the portfolio, our teams remain focused on safety, operational discipline and cost Bill, I think we've lost you there. The line seems to have cut out.

15:52 I think Bill was, for the benefit of the callers here, I think Bill was reiterating that based on year-to-date performance and how we see the remainder of the year, we expect full-year results to be within our guidance ranges as we put out there in our results. I think the other thing Bill was going to comment on was just a quick update on the Granville OT project in Columbia. You know, as we've said before, we're steadily working our way through a kind of up Modifying our permits there, de-risking it, doing the resettlement work that we expect to continue, really into the middle or even the second half of next year. And until we've done that, which I think you can look to second half 27 when we'll have sort of finalized that stuff, that's when we'll look to come back to whether I and the second half of next year at some point.

16:53 So overall, I think from Bill's comments, we're confident in our operating outlook for COLA. Ms. Batty, Oji Code are all performing well and Goose is entering the next phase. It's ramp up following the phase one crushing upgrade. So we're looking forward to a stronger fourth quarter and a really solid finish to the year. So with those comments, I'll turn them back to myself. And thanks Bill and Michael for your comments. That kind of concludes our initial comments and I turn it back to you for questions. Okay, thank you. We will now begin the analyst question and answer session.

17:39 To join the question queue, you may press star then 1 on your telephone keypad. You will hear a tone acknowledging your request. If you are using a speakerphone, please pick up your handset before pressing any keys. To withdraw your question, please press star then 2. We will pause for a moment as callers join the queue. The first question comes from Ralph Profitti from Stiefel. Please go ahead.

18:09 Great. Thanks, operator. Thanks for taking my questions. Just a little bit more would be helpful on the nature of this toll milling arrangement. I think by Bill's comments he said that sometime in Q1 of 27 is when you'd expect that to be finalized. I'm just wondering is this more of an administrative process at this point or is there anything sort of that that is guidance dependent and there's you know some sort of negotiation on terms still going on?

18:35 So I think I think I'll I'll address that one. I think it's an It just goes through the normal process, I think, as you deal with the state, the various steps to set up a new company, and in this case, put a tolling agreement in place for FECOLA Regional. So, I think we've given ourselves plenty of room to get that done. As you know, we took out regional guidance from 26, and we expect it to start early 27, and we're currently working our way through each of the steps that you have to do to bring all that online with the state. It's going as planned. So, I think it's like, as you said yourself at the start, I think it's mainly an administrative exercise at this point.

19:19 Okay, great. And just as a follow-up, I appreciate the answer on that. Just as a follow-up, we've had goose temporary at 3,200 tons a day. It's going to stay there until middle of 27. Just wondering if you've had continuous days operating above that. Is there any upside to that number? And how are you thinking about any potential weather-related or temperature-related issues? uh you know disruptions or risks between now and the middle of 2027.

19:42 Perhaps I'll turn it over I think Bill's there's a little bit of a problem with Bill's line but we've also got Peter Montano our VP Ops who's got a responsibility for Goose on the line so perhaps I'll turn that one over to you Peter.

19:58 Yep thanks Michael um yeah on the question so the the primary crusher now that it's we're done with phase one that And then we also have the mobile crusher still available, and that gives us some flexibility above that. Then the mill side has demonstrated that it's been tested up to 4,000 tons per day, a couple of different grind tests there, and that's been successful. So really that gives us the flexibility that we need to get our 2026 targets and then also build stockpiles for next year. As far as winter goes, the Phase 1 primary crusher, that's an all-weather facility, so that has no issues now.

20:44 And then the mobile crusher, we've put a tent over that, so it probably won't get the full capacity that we had during the summer season, but it will be operating consistently through the winter as well.

20:58 Great. Thanks for those helpful answers.

21:02 Thanks, Rob. The next question comes from Anita Soni from CIBC World Markets. Please go ahead.

21:11 Hi, good morning. I just wanted to ask a question on the FACOLA and the grade that you expect going into the back half of the year and into next year from the open pit. So I guess it was a little lighter than I was looking for this quarter, and I think that relates to, as I said, not being able to pull regional order. Is that specific to the 0.85? Is that kind of what we would expect even in Q4? Or was that just specific to the sequence?

21:43 Well, I think Bill's back on the line again. Bill, do you want to take that one?

21:49 Yeah, it's hard for me to hear you guys. I don't know if you can hear me, but Peter, maybe once again, if you've got it handy.

21:59 Sorry, I spoke as well when I said 0.85. I meant 1.35 gram per ton. in the open pit.

22:08 Okay, I can kind of hear him. I'm just looking through real quick here. Are you there, Peter? Can you hear me?

22:18 I can hear you, Bill, but I don't have that information at hand.

22:24 I can comment here. So yeah, I think Anita, I think the grade that we put through or that we mined in the open pit and that we put through the mill should be consistent through Q4. Again, we had highlighted at the start of the year that the first half of the year was going to be stronger than the second half. So, and then we revised, if you recall, we revised our guidance to a modified range once we took FACOLA Regional out. So, I think for Q4, you can assume a very similar parameters as Q3, and that will get us to within our guidance range for the year. and then I think for next year as we get into 27 we're just finalizing budgets at the moment right now and so that's something that we'll delay more in February when we come up with our 2027 numbers.

23:14 Yeah and maybe I just add to that as well as you know we're in we're in it's predominantly waste stripping phase eight in the Focola pit now so you know we're in that now and we'll we'll be in that for the majority of 2027 when we run in mainly Low-rate stockpile through the mill, plus the contribution initially, certainly initially from Focola Underground until we get regional online.

23:38 Okay. All right. Maybe so I can kind of hear now. 1.2 grams is kind of what I think we're talking about for Q4.

23:46 Okay. Yeah. Okay. So I think I had something like that for 2027, but not in Q4. and so and then the other question I had was on goose so pretty good grades delivered to the mill and a lot of you know high grade areas in that pit and the underground can't really even differentiate between what's underground what's open pit so just can you give us an idea of what the Q4 open pit and underground grades would look like I think you kind of need Even slightly better than the 7.3 that you delivered this quarter to the mill to kind of hit the bottom end of the guide.

24:28 Yeah. Once again, it goes over to Peter Montano for that one.

24:35 Yep. So yeah, your math is correct there, except we do have some flexibility with the added crushing capacity that the mobile crusher has. So basically, we've got that 3,200 tons per day as our baseline. and then we can vary that up as we need to manage the grade and the tonnage throughout the year. As far as the open pit and underground, they're basically going to be kind of similar to what we've seen before. The real difference is that it's going to be a full quarter of consistent production rather than the crushing circuit.

25:07 Okay, and so you said with the flexibility meaning that you can basically overmine and then selectively feed the mill some of the higher grade material. Is that what you are implying?

25:18 There's kind of two things. First of all, yes, on the mine we can produce more and then selectively process the higher grades, but also we can crush more by using some of the mobile crusher capacity and increase. The mill can run at about 4,000 tons a day is what it's demonstrated, so we have that window between 3,200 and 4,000 a day that we can work with to manage the tons, grade, and ounces.

25:44 All right. Thank you. That's it for my questions.

25:48 Thanks, Anita. The next question comes from Don DeMarco from National Bank Financial. Please go ahead.

25:55 Thanks, operator, and good morning, Mike and team. First question on GUS. I mean, I see that the ASIC and the sustaining capex was elevated. Not surprising. I mean, you got the crush repairs, underground development, delayed spending, and so on. But what would be a reasonable, and maybe, Michael, for you, reasonable normalized annual ASIC and sustaining capex level once the operation reaches the design throughput?

26:20 Yeah, no, good question, Don. I think for Q4 where you'll see is all in sustaining costs will be significantly lower than where we've been throughout the year. As we highlighted in Q3, if you normalized for selling what we had produced and if you had backed out some of those one-time costs that fell into sustaining capital related to the mobile crusher purchase and the And I think on your question around where the path forward is, is as the site ramps up the gold production on a quarterly and annual basis, Okay, great. Okay.

27:31 Just moving across the assets then, Eficola, you know, with Phase 8 waste stripping continuing through most of next year and Eficola regional ramping up at the same time, can you just discuss the production variability quarter by quarter? Anita had talked about grades, but presumably we're heading into a back-end loaded year, but what would we expect in terms of variability by quarter?

27:53 Well, we'll put that out as part of our guidance for next year, obviously. But I think what we have been saying is, remember, it's a ramp-up year for FECOLA Regional, right? So I think you can expect, if we think steady state, once we have it up and fully running, post-27, we'll average somewhere in 150,000 ounces a year. So I think as a rule of thumb, you'd probably take somewhere around half of that amount for next year for Regionals contribution as we ramp up. But we'll give guidance for the full year in early February.

28:27 Okay. And on that target, 150,000 ounces annually from Fricola Regional, what mining rates and grades support that target and how much additional capex remains before you get to that steady state run rate in 2028 or beyond?

28:44 I'll throw that one out, Bill. Do you want to?

28:47 Yeah, well, once again, I would say, Peter, you were involved in that study. I don't know if you have it, Andy, where we wound up on the mining rates and the grade.

29:01 Yeah, I don't have that study available with me.

29:05 Yeah, is that something we can get back to you on?

29:08 Yeah. Yeah, it's coming through. Yeah, we can definitely get back on that one.

29:12 We've got some details we can talk to on the Campbell side.

29:17 Yeah, yeah. So I think, Don, you know, clearly, as we're doing waste stripping, that that's the most significant CapEx portion that we see in Q4. As you've seen throughout the year, we have purchased equipment for FACOLA Regional. But ultimately, as you recall, we had done a lot of the CapEx investments and infrastructure build back in 2023, when we thought the permit would come imminently. So When you think about Focola Regional moving forward, a lot of the capital would just be equipment rebuilds as the various fleets depreciates, plus there'd be some capitalized stripping moving forward, but nothing of a significant quantity. So really, as you think about Focola is next year, as Mike highlighted, phase eight. and many more.

30:34 and many more. Thank you. and obviously it forecasted a different timing for the startup of Focola Regional. So it's absolutely on our radar to give an updated version to better give you visibility into what we see internally.

31:14 Okay. Well, we'll look for that when it comes. It's very helpful, guys. Thanks a lot, Michael and team. Good luck with the rest of the year. Thanks, Sean. The next question comes from Fahad Tariq from Jefferies. Please go ahead.

31:31 Hi, thanks for taking my question. I just want to clarify in the second quarter of next year when the Phase 2 upgrades at Goose are happening, I believe the last commentary was a 10-week shutdown. Should we still be modeling the 3,200 tons per day that quarter?

31:44 Thanks. Peter, over to you on that one, I think.

31:51 Thank you. Yeah, good question there. Yes, so that's part of what we're working with with the mobile crusher stockpiles is That is also starting to produce a cross-door stockpile for use during that shutdown. Also, it will continue to operate during the shutdown. So it's not that the full stockpile needs to be available before the 10 weeks. Basically, we want to get, you know, the maximum would be about 200,000 tons, but really, we need far less than that. And then we would keep processing or keep crushing with the mobile crusher throughout that 10 weeks. Okay, got it. And then and then go back to your question. Yes, 3200 would be a fair assessment in your in your model.

32:37 Okay, thank you. And then and then just because the sea lift just happened, can you talk a bit about the diesel prices that you I guess, pre purchase for goose relative to what your budget would have been at the beginning of this year? Thanks.

32:51 Do you want to take that one, Michael? Yeah, so ultimately the Goose diesel purchase was made in Q3. It is at elevated prices, as everyone is aware, based on where global oil prices sit. I think the fortunate part for us was that, and we've Our actual cost this year to purchase and ship fuel to site was very similar to last year, but it was because the quantum that we purchased was less than last year. And so relative to what we did last year, it was probably around 50 to 60% higher. And that's just based on the global move in fuel prices that we saw based on where global prices sit at the moment of purchase or the time of purchase.

33:48 Okay, great. Thank you so much. As a reminder, if you have a question, please press star one. The next question comes from Kerry McCreery from Canaccord Genuity. Please go ahead.

34:02 Good morning, guys. Just maybe another question on Focola, just on the underground. Can you just remind us how much tons you're pulling out from the underground, and has that fully ramped up the steady state at this point?

34:17 Bill, do you want to take that one on?

34:19 Yeah, so I'll answer it and maybe Peter will correct me. I think we're around 4,000 tons per day right now, and it has fully ramped up. And once again, the underground is really the highlight of the FACOLA project right now. Very high grades compared to the open pit and operating very well.

34:40 Maybe just remind us of what the grade there looks like.

34:44 Oh, I think we're definitely around three, three, three and a half grams.

34:52 Great. And then maybe just a question on cash taxes at Goose. Any thoughts on when those would be payable? I assume you've got a bit of an offer there.

35:01 Yeah, yeah, we do. And so, you know, Goose definitely through the rest of the decade. A lot of it, as you can imagine, depends on what gold price gets realized. But based on what we see at $4,000 gold, Goose won't be cash tax payable for around five years. So into the early 2030s is when it works through its losses and ultimately becomes cash tax payable.

35:32 OK, great. And I know you're working through your budget, but just is there an outlook on cash taxes for 2027? Is that going to be higher than this year, assuming $4,000?

35:44 If it's $4,000 gold, I would imagine it would be lower because, again, Goose will see a significant ramp up in its production, but it's not cash tax payable. And so, yeah, I mean, we got to go through the budgets, but I would imagine it would be slightly lower just based on what we see preliminary for 2027. So likely, hopefully, a little bit less than $600 million on the year when you include withholding taxes as well, too.

36:17 Great. Thanks, guys. Thanks, Kerry. This concludes our question and answer session. I would like to turn the conference back over to Mike Cinnamond for closing remarks.

36:30 Well, so thank you, team here. Thank you, everyone for attending the call and for good questions. I think just to summarize, again, I think we had a strong quarter. I was pleased with the results that we saw, you know, inline production, overall better cost, you know, we've lowered our all in sustaining cost guidance for the year. So pleased with that. I think we are executing on the things that we said we were going to execute on. As laid out earlier in the year, I think we've shown good Good progress there moving forward, so I'm energized to see what we can do here in Q4, expecting a strong Q4 and then, you know, a strong year in 27 and beyond as we put all of these actions into full force, both at Focola Regional and at Goose. So thanks again for your time and look forward to catching up with you individually. Thank you.

37:25 This brings to an end today's conference call. You may disconnect your lines. Thank you for participating and have a pleasant day.