B2GOLD declared a second quarter cash dividend of $0.02 US cents a share which will take its full-year payout to $0.08c/share.
This doubles the maiden dividend declaration in November of $0.04/share annually which was to be paid out quarterly. The move is an indication of the strength of the world’s gold producers generally notwithstanding the effects of the COVID-19 pandemic.
Based on an earlier assumption of a $1,500/oz gold price for 2020, B2Gold expected to generate cashflows from operating activities of more than $700m for the current financial year. The gold price is currently $1,732/oz.
PwC said in its Mine 2020 report on Thursday that based on the world’s largest 40 mining companies, balance sheets were robust whilst dividend payments were at a five-year high in 2019. “Cash dividends to shareholders were $55bn, up by 25% from 2018. The average 2019 dividend payout ratio was 78%, and the average dividend yield was 4.3%,” it said.
It added, however, that mining firms were likely to be conservative with cash given the potential market disruption that may flow from the COVID-19 pandemic. But the dollar gold price has remained at elevated levels against a backdrop of economic disruption and central bank stimulus efforts.
The impact of the COVID-19 virus has been muted on mining firms in gold producing areas such as West Africa.
B2Gold said on May 8 that there had been 10 positive cases of COVID-19 identified at its Fekola gold mine in Mali. However, the spread of the virus at Fekola would not have “a material impact on operations”, the company said, adding that the mine “… continues to operate and maintain both quarterly and annual production budget guidance”.
B2Gold has guided to 2020 production from Fekola of between 590,000 and 620,000 ounces of gold at an all-in sustaining cost of between $555/oz and $595/oz. Full year production is likely to be just over one million oz.
In April, the company said that “… given the current uncertainty resulting from the COVID-19 pandemic” it had drawn on a further $250m of its $600m revolving credit facility. This was to “… provide additional liquidity flexibility and assurance until the ultimate timing and outcome of the COVID-19 pandemic can be reasonably determined”.
Consolidated gold production totalled 250,632 oz for the first quarter which was 7% or some 16,156 oz above budget and a one quarter (50,090 oz) increase in production over the first quarter of 2019, excluding discontinued operations.
Principal among the firm’s performers was Fekola: it achieved record quarterly gold production of 164,011 oz – 9% above budget and 49% higher – or some 53,662 oz – than gold production in the first quarter of B2Gold’s 2019 financial year.
