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B2Gold

AMEX:BTG
Snowflake Description

Reasonable growth potential with mediocre balance sheet.

The Snowflake is generated from 30 checks in 5 different areas, read more below.
BTG
AMEX
CA$3B
Market Cap
  1. Metals and Mining
Company description

B2Gold Corp, together with its subsidiaries, engages in the exploration and development of mineral properties in Nicaragua, the Philippines, Namibia, Mali, Colombia, Burkina Faso, and Finland. More info.


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3 Month History
BTG
Industry
5yr Volatility vs Market

Value

 Is B2Gold undervalued based on future cash flows and its price relative to the stock market?

Value is all about what a company is worth versus what price it is available for. If you went into a grocery store and all the bananas were on sale at half price, they could be considered undervalued.
INTRINSIC VALUE BASED ON FUTURE CASH FLOWS
Here we compare the current share price of B2Gold to its discounted cash flow analysis.value.

The discounted cash flow value is simply looking at what the company is worth today, based on estimates of how much money it is expected to make in the future.

How is this discounted cash flow calculated?

  • The current share price of B2Gold is above its future cash flow value.
Often investors are willing to pay a premium for a company that has a high dividend or the potential for future growth.
PRICE RELATIVE TO MARKET
We can also value a company based on what the stock market is willing to pay for it. This is similar to the price of fruit (e.g. Mangoes or Avocados) increasing when they are out of season, or how much your home is worth.

The amount the stock market is willing to pay for B2Gold's earnings, growth and assets is considered below, and whether this is a fair price.
Price based on past earnings
Are B2Gold's earnings available for a low price, and how does this compare to other companies in the same industry?
  • B2Gold is overvalued based on earnings compared to the US Metals and Mining industry average.
  • B2Gold is overvalued based on earnings compared to the US market.
Price based on expected Growth
Does B2Gold's expected growth come at a high price?
  • B2Gold is poor value based on expected growth next year.
Price based on value of assets
What value do investors place on B2Gold's assets?
  • B2Gold is overvalued based on assets compared to the US Metals and Mining industry average.
X
Value checks
We assess B2Gold's value by looking at:
  1. Is the discounted cash flow value less than 20%, or 40% of the share price? (2 checks) ( Click here or on bar chart for details of DCF calculation. )
  2. Is the PE ratio less than the market average, and/ or less than the Metals and Mining industry average (and greater than 0)? (2 checks)
  3. Is the PEG ratio within a reasonable range (0 to 1)? (1 check)
  4. Is the PB ratio less than the Metals and Mining industry average (and greater than 0)? (1 check)
  5. B2Gold has a total score of 0/6, see the detailed checks below.

    Note: We use GAAP Earnings per Share in all our calculations including PE and PEG Ratio.
    Note 2: PEG ratio is based on analysts EPS growth expectations in 1 year (370.96%).

    Full details on the Value part of the Simply Wall St company analysis model.
X
Discounted cash flow (2 Stage Free Cash Flow to Equity)

The calculations below outline how an intrinsic value for B2Gold is arrived at by discounting future cash flows to their present value. We use analyst's estimates of cash flows going forward 5 years.

See our documentation to learn about this calculation.

5 year cash flow forecast

Present value of next 5 years cash flows:
$395

Terminal Value

Terminal Value = FCF2021 × (1 + g) ÷ (Discount Rate – g)

Terminal Value = $237 × (1 + 2.47%) ÷ (12.1% – 2.47%)

Terminal value based on the Perpetuity Method where growth (g) = 2.47%:
$2,525

Present value of terminal value:
$1,427

Equity Value

Equity Value (Total value) = Present value of next 5 years cash flows + terminal value
$1,821 = $395 + $1,427

Value = Total value / Shares Outstanding ($1,821 / 981)

Discount to Share Price

Value per share:
$1.86

Current discount (share price of $2.64): -42.13%



Estimate of Discount Rate

The discount rate, or required rate of return, is estimated by calculating the Cost of Equity.

Discount rate = Cost of Equity = Risk Free Rate + (Levered Beta * Equity Risk Premium)

Discount rate = 12.1% = 2.47% + (1.278 * 7.53%)



Estimate of Bottom Up Beta

The Levered Beta is the Unlevered Beta adjusted for financial leverage. It is limited to 0.8 to 2.0 (practical range for a stable firm). Note the market value of equity is used not the book value (CA$3,294,072,006).

Levered Beta = Unlevered beta (1 + (1- tax rate) (Debt/Equity))

1.278 = 1.084 (1 + (1- 30%) (25.56%))

Levered Beta used in calculation = 1.278



Equivalent number of shares

If the companies market cap is in a different currency to that of the listing the equivalent number of shares outstanding must be calculated.

Market Cap (CAD): CA$3,294,072,006

Exchange rate CAD/USD = 1.273

Market Cap (USD): $2,588,580,324

Equivalent shares outstanding: $2,588,580,324 / $2.640000 = $981



Assumptions
  1. The risk free rate of 2.47% is from the 10 year government bond rate in USD.
  2. The bottom-up beta is estimated by analysing other companies in the same industry.
  3. The Equity Risk Premium is calculated by subtracting the risk free rate from the market return premium (7.53%) (source: Buffet).
  4. The dividend discount model is automatically used for companies in the following industries: Banks, Insurance, Real Estate Investment Trusts (REITs), Diversified Financial Services and Capital Markets.

Future Performance

 How is B2Gold expected to perform in the next 1 to 3 years based on estimates from 13 analysts?

The future performance of a company is measured in the same way as past performance, by looking at estimated growth and how much profit it is expected to make.

Future estimates come from professional analysts. Just like forecasting the weather, they don’t always get it right!
Annual Growth Rate
69.6%
Expected annual growth in earnings.
Earnings growth vs Low Risk Savings
Is B2Gold expected to grow at an attractive rate?
  • B2Gold's earnings growth is expected to exceed the low risk savings rate of 3.6%.
Growth vs Market Checks
  • B2Gold's earnings growth is expected to exceed the US market average.
  • B2Gold's revenue growth is expected to exceed the US market average.
Annual Growth Rates Comparison
Analysts growth expectations
Super high growth metrics
High Growth Checks
  • B2Gold's earnings are expected to grow significantly at over 20% yearly.
  • B2Gold's revenue is expected to grow by 14.5% yearly, however this is not considered high growth (20% yearly).
Past and Future Earnings per Share
The accuracy of the analysts who estimate the future performance data can be gauged below. We look back 3 years and see if they were any good at predicting what actually occurred. We also show the highest and lowest estimates looking forward to see if there is a wide range.
Performance in 3 years
In the same way as past performance we look at the future estimated return (profit) compared to the available funds. We do this looking forward 3 years.
  • B2Gold is not expected to perform strongly, Return on Equity (ROE) in 3 years is estimated to be below 20%.

Improvement & Relative to industry
  • Performance (ROE) is expected to be above the current US Metals and Mining industry average.
  • An improvement in B2Gold's performance (ROE) is expected over the next 3 years.
X
Future performance checks
We assess B2Gold's future performance by looking at:
  1. Is the annual earnings growth rate expected to beat the low risk savings rate, plus a premium to keep pace with inflation?
  2. Is the annual earnings growth rate expected to beat the average growth rate in earnings of the US market? (1 check)
  3. Is the annual revenue growth rate expected to beat the average growth rate in revenue of the US market? (1 check)
  4. Is the annual earnings growth rate expected to be above 20%? (1 check)
  5. Is the annual revenue growth rate expected to be above 20%? (1 check)
  6. Is the Return on Equity in 3 years expected to be over 20%? (1 check)
Some of the above checks will fail if the company is expected to be loss making in the relevant year.
B2Gold has a total score of 4/6, see the detailed checks below.

Note 1: We use GAAP Net Income Excluding Exceptional Items for our Earnings in all our calculations.

Full details on the Future part of the Simply Wall St company analysis model.

Past Performance

  How has B2Gold performed over the past 5 years?

The past performance of a company can be measured by how much growth it has experienced and how much profit it makes relative to the funds and assets it has available.
Past earnings growth
Below we compare B2Gold's growth in the last year to its industry (Metals and Mining).
Past Earnings growth analysis
We also check if the company has grown in the past 5 years, and whether it has maintained that growth in the year.
  • B2Gold's year on year growth rate is negative over the past 5 years, however the most recent earnings are above average.
  • B2Gold has been loss making last year but is now profitable.
  • B2Gold has become profitable in the last year making it difficult to compare the industry average.
Earnings and Revenue History
B2Gold's revenue and profit over the past 5 years is shown below, any years where they have experienced a loss will show up in red.
Performance last year
We want to ensure a company is making the most of what it has available. This is done by comparing the return (profit) to a company's available funds, assets and capital.
  • Poor return on shareholders funds (ROE < 20%) last year.
  • B2Gold performed worse than the US Metals and Mining industry average based on Return on Assets (ROA) last year.
  • Performance based on Return on Capital Employed (ROCE) has improved significantly over 3 years.
X
Past performance checks
We assess B2Gold's performance over the past 5 years by checking for:
  1. Has earnings increased in past 5 years? (1 check)
  2. Has the earnings growth in the last year exceeded that of the Metals and Mining industry? (1 check)
  3. Is the recent earnings growth over the last year higher than the average annual growth over the past 5 years? (1 check)
  4. Is the Return on Equity (ROE) higher than 20%? (1 check)
  5. Is the Return on Assets (ROA) above industry average? (1 check)
  6. Has the Return on Capital Employed (ROCE) increased from 3 years ago? (1 check)
The above checks will fail if the company has reported a loss in the most recent earnings report. Some checks require at least 3 or 5 years worth of data.
B2Gold has a total score of 1/6, see the detailed checks below.

Note: We use GAAP Net Income excluding extraordinary items in all our calculations.

Full details on the Past part of the Simply Wall St company analysis model.

Health

 How is B2Gold's financial health and their level of debt?

A company's financial position is much like your own financial position, it includes everything you own (assets) and owe (liabilities).

The boxes below represent the relative size of what makes up B2Gold's finances.

The net worth of a company is the difference between its assets and liabilities.
Net Worth
  • B2Gold is able to meet its short term (1 year) commitments with its holdings of cash and other short term assets.
  • B2Gold's long term commitments exceed its cash and other short term assets.
Balance sheet
This treemap shows a more detailed breakdown of B2Gold's finances. If any of them are yellow this indicates they may be out of proportion and red means they relate to one of the checks below.
Assets
Liabilities and shares
The 'shares' portion represents any funds contributed by the owners (shareholders) and any profits.
  • High level of stock/ inventory/ unsold assets.
  • Total debt is not covered by total short term assets, assets are 0.4x debt.
Historical Debt
Nearly all companies have debt. Debt in itself isn’t bad, however if the debt is too high, or the company can’t afford to pay the interest on its debts this may have impacts in the future.

The graphic below shows equity (available funds) and debt, we ideally want to see the red area (debt) decreasing.

If there is any debt we look at the companies capability to repay it, and whether the level has increased over the past 5 years.
  • B2Gold's level of debt (43.5% of total debt) compared to net worth is high (greater than 40%).
  • The level of debt compared to net worth has increased over the past 5 years (0% vs 43.5% today).
  • Total debt is well covered by annual operating cash flow (32%, greater than 20% of total debt).
  • Interest on debt is well covered by earnings (EBIT is 10.7x coverage).
X
Financial health checks
We assess B2Gold's financial health by checking for:
  1. Are short term assets greater than short term liabilities? (1 check)
  2. Are short term assets greater than long term liabilities? (1 check)
  3. Has the debt to equity ratio increased in the past 5 years? (1 check)
  4. Is the debt to equity ratio over 40%? (1 check)
  5. Is the debt covered by short term assets? (1 check)
  6. Are earnings greater than 5x the interest on debt (if company pays interest at all)? (1 check)
  7. B2Gold has a total score of 3/6, see the detailed checks below.


Full details on the Health part of the Simply Wall St company analysis model.

Dividends

 What is B2Gold's current dividend yield, its reliability and sustainability?

Dividends are regular cash payments to you from the company, similar to a bank paying you interest on a savings account.
Annual Dividend Income
Dividend payments
0%
Current annual income from B2Gold dividends.
If you bought $2,000 of B2Gold shares you are expected to receive $0 in your first year as a dividend.
Dividend Amount
Here we look how much dividend is being paid, if any. Is it above what you can get in a savings account? It is up there with the best dividend paying companies?
  • Not paying a dividend.
  • Not paying a dividend.
Historical and Future Dividends
It is important to see if the dividend for a company is stable, and not wildly increasing/decreasing each year. This graph shows you the historical rate to count toward your assessment of the stock.

We also check to see if the dividend has increased in the past 10 years.
  • Not paying a notable dividend.
  • Not paying a notable dividend.
Current Payout to shareholders
What portion of B2Gold's earnings are paid to the shareholders as a dividend.
  • Not paying a notable dividend.
Future Payout to shareholders
  • Insufficient estimate data to determine if a dividend will be paid in 3 years.
X
Income/ dividend checks
We assess B2Gold's dividend by checking for:
  1. Firstly is the company paying a notable dividend (greater than 0.5%) - if not then the rest of the checks are ignored.
  2. Current dividend yield, is there one at all, is it higher than the low risk savings rate, and is it above the top 25% of dividend payers? (2 checks)
  3. Have they paid a dividend for 10 years, and during this period has the dividend been volatile (drop of more than 25%)? (1 check)
  4. If they have paid a dividend for 10 years has it increased in this time? (1 check)
  5. How sustainable is the dividend, can B2Gold afford to pay it from its earnings today and in 3 years (Payout ratio less than 90%)? (2 checks)
  6. B2Gold has a total score of 0/6, see the detailed checks below.


Full details on the Dividends part of the Simply Wall St company analysis model.

Management

 What is the CEO of B2Gold's salary, the management and board of directors tenure and is there insider trading?

Management is one of the most important areas of a company. We look at unreasonable CEO compensation, how long the team and board of directors have been around for and insider trading.
CEO
Clive Johnson, image provided by Google.
Clive Johnson
COMPENSATION $5,305,796
AGE 59
TENURE AS CEO 10.7 years
CEO Bio

Mr. Clive Thomas Johnson has been the Chief Executive Officer and President of B2Gold Corp. since March 2007 and December 17, 2006 respectively. Mr. Johnson served as President and Chief Executive Officer of EastWest Gold Corporation since July 1993 and June 1989 respectively and serves as its Chief Operating Officer. He served as the Chairman of EastWest Gold Corporation. He has been the Chairman of Uracan Resources, Ltd. since November 2013. He serves as a Director of CGA Mining Limited. He has been a Director of B2Gold Corp. since December 17, 2006. He has been a Director of Uracan Resources, Ltd. since January 9, 2007. He has been a Director of EastWest Gold Corporation since December 5, 1988. He serves as Member of Corporate Governance & Nominating Committee, Member of Disclosure Committee and Member of Hedging Committee for EastWest Gold Corporation. He served as a Director of Victoria Gold Corp. since April 30, 1987. He served as a Director of Consolidated Westview Resource Corp. since April 30, 1987. He served as a Director of Consolidated Puma Minerals Corp. since March 3, 1988. He served as a Director of Arizona Star Resource Corp. from April 10, 1987 to December 2004.

CEO Compensation
  • No compensation data for Clive.
  • Clive's compensation is higher than average for a company of this size and profit level.
Management Team Tenure

Average tenure and age of the B2Gold management team in years:

8.5
Average Tenure
57
Average Age
  • The average tenure for the B2Gold management team is over 5 years, this suggests they are a seasoned and experienced team.
Management Team

Clive Johnson

TITLE
President
COMPENSATION
$5M
AGE
59
TENURE
10.7 yrs

Mike Cinnamond

TITLE
Senior VP of Finance & CFO
COMPENSATION
$2M
AGE
50
TENURE
3.6 yrs

Bill Lytle

TITLE
Senior Vice President of Operations
COMPENSATION
$2M
TENURE
1.8 yrs

Roger Richer

TITLE
Executive VP
COMPENSATION
$1M
AGE
64
TENURE
10.7 yrs

Dennis Stansbury

TITLE
Senior Vice President of Engineering & Project Evaluations
COMPENSATION
$1M
AGE
64
TENURE
10.7 yrs

Tom Garagan

TITLE
Senior Vice President of Exploration
COMPENSATION
$1M
AGE
58
TENURE
10.7 yrs

Brian Scott

TITLE
VP of Geology & Technical Services

Ian MacLean

TITLE
Vice President of Investor Relations
TENURE
11.8 yrs

Kevin Pemberton

TITLE
Chief Mine Planning Engineer

Tim Searcy

TITLE
Chief Executive Officer of Auryx
AGE
47
Board of Directors Tenure

Average tenure and age of the B2Gold board of directors in years:

6.7
Average Tenure
60.4
Average Age
  • The tenure for the B2Gold board of directors is about average.
Board of Directors

Bob Cross

TITLE
Chairman
COMPENSATION
$329K
AGE
58
TENURE
10.1 yrs

Clive Johnson

TITLE
President
COMPENSATION
$5M
AGE
59
TENURE
10.9 yrs

Bob Gayton

TITLE
Independent Director
COMPENSATION
$211K
AGE
77
TENURE
10.9 yrs

George Johnson

TITLE
Director
COMPENSATION
$174K
AGE
68
TENURE
1.7 yrs

Jerry Korpan

TITLE
Independent Director
COMPENSATION
$191K
AGE
71
TENURE
10 yrs

Bongani Mtshisi

TITLE
Independent Director
COMPENSATION
$191K
AGE
38
TENURE
5.9 yrs

Kevin Bullock

TITLE
Director
COMPENSATION
$191K
AGE
52
TENURE
3.9 yrs

Robin Weisman

TITLE
Director
TENURE
0.1 yrs
Recent Insider Trading
  • B2Gold insiders have only sold shares in the past 3 months.
Who owns this company?
X
Management checks
We assess B2Gold's management by checking for:
  1. Is the CEO's compensation unreasonable compared to market cap and profit (greater than 0.5% of the company's profit + 0.03% of market cap)? (1 check)
  2. Has the CEO's compensation increased more than 20% whilst the EPS is down more then 20%? (1 check)
  3. Is the average tenure of the management team less than 2 years? (1 check)
  4. Is the average tenure of the board of directors team less than 3 years? (1 check)
  5. B2Gold has a total score of 0/6, this is not included on the snowflake, see the detailed checks below.


Note: We use the top 6 management executives and board members in our calculations.

Note 2: Insider trading include any internal stakeholders and these transactions .

Full details on the Management part of the Simply Wall St company analysis model.

Company News

Company Info

Map
Description

B2Gold Corp, together with its subsidiaries, engages in the exploration and development of mineral properties in Nicaragua, the Philippines, Namibia, Mali, Colombia, Burkina Faso, and Finland. It primarily explores for gold, silver, and copper deposits. The company’s production properties include the La Libertad mine with an exploitation concession covering an area of 10,950 hectares and the El Limon mine covering an area of 12,000 hectares located in Nicaragua; the Masbate mine covering an area of approximately 15,209 hectares located in the Philippines; and the Otjikoto mine covering an area of 6,933.99 hectares located in Namibia. It also holds 90% interest in the Fekola project located in Mali; 81% interest in the Kiaka gold project located in Burkina Faso; and 49% joint venture interest in the Gramalote property located in Colombia, as well as an interest in the Quebradona property located in Colombia. The company was incorporated in 2006 and is headquartered in Vancouver, Canada.

Details
Name: B2Gold Corp.
Ticker: BTG
Exchange: AMEX
Founded: 2006
Market Cap: CA$2,588,580,324
Shares outstanding: 977,469,438
Website: http://www.b2gold.com
Address: B2Gold Corp.
Three Bentall Centre,
Suite 3100,
Vancouver,
British Columbia, V7X 1J1,
Canada
Listings
Exchange Symbol Ticker Symbol Security Exchange Country Currency Listed on
TSX BTO Common Shares The Toronto Stock Exchange CA CAD 06. Dec 2007
AMEX BTG Common Shares NYSE MKT LLC US USD 06. Dec 2007
DB 5BG Common Shares Deutsche Boerse AG DE EUR 06. Dec 2007
SWX BTO Common Shares SIX Swiss Exchange CH CHF 06. Dec 2007
NMSE B2G Common Shares Namibian Stock Exchange NA NAD 06. Dec 2007
Number of employees
Current staff
Staff numbers
2,719
B2Gold employees.
Industry
Industry: Gold
Sector: Materials