Third Quarter 2026 Financial Results Conference Call - B2GOLD CORP

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 zero. I would now like to turn the conference over to Mike Sinemond, President and CEO of B2Gold. Please go ahead. Thank you, operator, and good morning. Good morning, everyone. I think this third quarter, it was a strong quarter for B2 Gold, 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 coal produced, and 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. And in the period, we generated $48 million in free cash flow, and that reflects the improving trajectory of the business, I think, with the major construction and ramp-up spending in Goose now behind us. And our goal 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 the Manicoto exploitation permit and have since commenced stripping activities there. This definitely represents an important step forward to bring Focolo regional ore into the mine plan, which we've given guidance that we expect to commence earlier in 2027. And then at Goose, completion of the Phase 1 crushing circuit upgrades shortly after the quarter end. That represents another important step in the ramp-up of that operation. And those are 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 Focosal Regional Permit and the Goose crushing circuit plans shortly. 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, we'll remain focused on a disciplined approach, I'd say, to capital allocation. with balanced returns to shareholders with investment in our existing operations, as well as, as we've talked about before, expiration opportunities across our portfolio. 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. In addition, in those results, there were some excellent infill results at Lama and Neboyek, 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 Navoyuk. And this discovery, which is about, I think it's about 150 meters down plunge from the known mineralization, the discovery's been named Tatuk. and the grade the wet the host rock of tattoo intersection were very encouraging i think and it 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 is expected to benefit from the increased crushing capacity that we've now seen with the commissioning of Phase 1 of the crusher upgrades. 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. Development work at Antelope, a deposit at Ochicota that's progressing well, and we're also exploring opportunities for mine life extensions at Miss Batty using the land's perhaps higher gold price assumptions there. So there's still some work to do on that, but we're looking at that, and we'll pursue that as we go through next year. Final comment, I mentioned the prepaids are delivered into by June already, And we have some remaining gold-collar contracts, but the last of those is 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. Our financial flexibility or balance sheet strength is improving. 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 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. Thanks, Mike, and good morning, everyone. Revenue for the quarterly 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 31 cents per share. Net income benefited from a $253 million impairment reversal at the FACOLA complex, driven by the receipt of the FICOLA regional permit in August of this year, as well as $40 million of unrealized gains on derivative instruments and $14 million in insurance recoveries. 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 in what was always forecast to be the lowest gold production quarter for the year for B2 Gold. 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. The remaining gold collar contracts finished in December 2026, at which point B2 gold will be completely unencumbered by both gold prepay and gold collar contacts 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 assessments was $239 million. As expected, we are beginning to see the benefits from the completion of the gold prepaid contracts, which allows us to fully realize prevailing gold prices on all ounces sold. Free cash flow for the quarter was $48 million. 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. It is worth noting that Goose's all-insisting costs this quarter were impacted by approximately 10,000 ounces of production 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. 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 Fakola. The improvement at Masmari 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 $1400 per gold ounce sold, where it was previously between $1430 and $1580 per goldounce sold. Similarly, at Ochicoto, strong production performance has translated to lower unit costs, and we have reduced all-in-sustaining cost guidance by $200 per ounce to between $1,630 and $1.780 per gold ounce sold. At FACOLA, all-In-Sustaining Cost Guidance is now $2,350 to $2.500 per goldounce sold, compared to the previous range of between $2、670 and $2。820 per goldonce sold. 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 reflects both the strong year-to-date performance of our operations and our confidence in delivering through the remainder of 2026. With that, I'll now turn the call over to Bill for an operational update. 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 Montbody and Ochocoto, together with continued improvements at Goose, helped offset lower production of Fecola as mining activities progressed according to plan. At FACOLA, production of approximately 78,000 ounces reflect the transition of open pit activities from ore to the Phase VIII waste-tripping campaign that will continue through the rest of the year and the majority of next year. On August 7th, we achieved mining with the receipt of the Menincoto Exploitation Permit, which allows us to begin mining at the FACALA Regional. Shortly after the end of the third quarter, stripping activities commenced at the Ficola Regional, and we are now underway unlocking this important ore source for the FICOLA complex. The company anticipates mining, restripping activities, and finalization of a tolling agreement will be completed in the coming months, and ore production from FICola Regional is expected to commence in early 2027. Following a ramp-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 1 of the fixed crushing circuit upgrades continued. While that work was ongoing, goose produced approximately 40,000 ounces in the quarter. Importantly, short after quarter end, we completed the Phase 1 upgrade of the Fixed Crushing Plant. With a Phase 1 upgrade now complete, throughput 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 2 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 the mill with stockpiled crushed ore. We plan to build this inventory over the winter using the mobile crusher which is being winterized to support reliable operation throughout the winter. Phase 2 upgrades are complete mid-year 2027. We expect the crusher to consistently deliver an average of 4,000 tons per day. forward. This will be an important deliverable for us to be able to progress towards our targeted annual production, 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. Across the portfolio, our teams remain focused on safety, operational discipline, and cost. We continue to expect full year results to be within our guidance. Bill, I think we've lost you there. The line seems to have cut out. So I think Bill was, for the benefit of the callers here, I think Phil 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 Granville OT project in Columbia. You know, as we've said before, we're steadily working our way through 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 of 27 when we'll have sort of finalized that stuff, that's when we will look to come back to whether a construction decision or at least what the next steps are for Granville-Ottie. So that's kind of what you can expect second half of next year at some point. So overall, I think from Bill's comments, we're confident in our operating outlook for COLA. Ms. Batty, Ojukod are all performing well and Goose is entering the next phase of its 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 That 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. 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. 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 is guidance-dependent and there's some sort of negotiation on terms still going on? No, I think I'll address that one. I think it's an administrative exercise. You know, we've got the agreements drafted. It just goes through the normal process, I guess, as you deal with the state and 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, and 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. Okay, great. And just as a follow-up, I appreciate the answer on that. But 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 disruptions or risks between now and the middle of 2027? Perhaps I'll turn it over. I think 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 responsibility for GOOPS on the line, so perhaps I'll turn that one over to you, Peter. Yep, thanks, Michael. Yeah, on the question, so the primary crusher, now that we're done with Phase 1, that maintains 3,200 tons per day consistently, and then we also have the mobile crusher still available, and that gives us some flexibility above that. Then the middle side has demonstrated that it's been tested up to 4,000 tons per day, a couple 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 one primary crusher, that's an all-weather facility, so that has no issues now. 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. Great. Thanks for those helpful answers. Thanks, Rob. The next question comes from Anita Soni from CIBC World Markets. Please go ahead. Hi. Good morning. This is Michael. Bill, 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 R. But is that specific, the 0.85, is that kind of what we would expect even in Q4, or was that just specific to the sequence? Well, I think Bill's back on the line again. Bill, do you want to take that one? 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. Sorry, I spoke as well when I said 0.85. I meant 1.35 gram per ton in the open pit. Okay, I can kind of hear. I'm just looking through real quick here. are you there peter can you hear me i can hear you bill but i don't have that information to hand i i can i can comment here so i i yeah i think anita i think the grade that we put through or that we mined in the open pit and that we puts 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. 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 very similar parameters as Q3, and that will get us to within our guidance range for the year. And then I think für 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 out with our 2027 numbers. And maybe I just add to that as well. As you know, we're in this predominantly waste-stripping phase 8 in the FACOLA pit now. We're in that now and 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 Foucault Underground until we get regional online. Okay. I can kind of hear now, 1.2 grams is kind of what I think we're talking about for Q4. 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 you 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. Yeah. Once again, it goes over to Peter Montano for that one. 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 being a full quarter of consistent production rather than the crushing circuit. Okay, and so that, you said with the flexibility meaning that you can, you know, basically overmine and then selectively feed the mill some of the higher grade material to, is that what you are implying? 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. You know, 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 analysis. All right. Thank you. That's it for my questions. Thanks, Anita. The next question comes from Don DeMarco from National Bank Financial. Please go ahead. Thanks, Operator, and good morning, Mike and team. First question on Goose. I mean, I see that the ASIC and the standing CAPEX was elevated. Not surprising. I mean you've got the crush repairs, underground development, delayed spending, and so on. But what would be a reasonable, and maybe, Michael, for you, a reasonable normalized annual ASIC and sustaining CAPEX level once the operation reaches a design throughput? Yeah, no, good question, Don. So, 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 fire, we would have been much closer towards the top end of our yearly range. 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, you truly see a large benefit from that larger production base. As you can imagine, Goose has a fairly steady fixed cost that it incurs throughout the year. So growing that production base, you get the benefit of scale. And I think we're absolutely targeting, you know, slightly just above $2,000 per ounce on a steady state basis based on the mine plants and the sequencing that we see moving forward. Okay, great. Just moving across the assets then, Eficola, you Know, with phase eight waste stripping continuing through most of next year and Eficolla 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? 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 Focola 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. Okay. And on that target, 150,00 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? Let's throw that one out to Bill. Do you want to take that one? 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 in the grade. Yeah, I don'T have that study available with me. is that something we can get back to you on yeah yeah it's coming through yeah we can definitely get back on that one we've got we can talk to him the campbell side yeah yeah so i think uh don you know clearly as we're doing waste stripping that that's the most significant capex portion um that we see in q4 um as you've seen throughout the year we have purchased uh 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 as a capital would just be equipment rebuilds as the various fleets depreciates, plus there'll be some capitalized stripping moving forward. But nothing of a significant quantity. So really, as we think about FACOLA is next year, as Mike highlighted, phase eight is a big stripping campaign, but then we get multiple years of much lower strip ratio, much better grade, much more ore contribution, and then FACULA regional stays at around 150,000 ounces. But then as you get into the mid-2030s, as FACULA open pit starts to come down, then FICULA Regional open pit start to ramp up. So, So, you know, we look at it on a complex basis, and there's variability on a sort of year-to-year basis, but happy to take that offline for a further discussion if you want. Okay. And do you guys plan on publishing an updated mine plan at any time to kind of reflect some of these dynamic pieces and integrated parts? Yeah, I think that's something that's absolutely on our radar. We recognize that the existing FACOLA complex technical report is older, and obviously it forecasted a different timing for the startup of FACULA Regional, so it's absolutely on our radar to give an updated version to better give you visibility into what we see internally. 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. Hi. Thanks for taking my question. I just want to clarify, in the second quarter of next year, when the Phase 2 upgrades at GOOSS 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? Thanks. Peter, over to you on that one, I think. Yep. 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 stockpiler 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. To go back to your question, yes, $3,200 would be a fair assessment in your model. Okay, thank you. And then just because the sea lift just happened, can you talk a bit about the diesel prices that you, I guess, pre-purchased for Goose relative to what your budget would have been at the beginning of this year? Thanks. 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 highlighted this before, is that operationally the site is consuming less fuel than what was previously anticipated. So 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 percent 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. Okay, great. Thank you so much. As a reminder, if you have a question, please press star 1. The next question comes from Carrie McCreery from Canaccord Genuity. Please go ahead. Hi, 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's fully ramped up to steady state at this point. Bill, do you want to take that one on? 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 ramp 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. you just remind us of what the grade there looks like oh i think i think we're definitely around three three three and a half grams okay great and then maybe just a question on cash taxes at goose um any thoughts on when those would uh be payable i assume you've got a bit of yeah there yeah yeah we we do um and so you know goose goose definitely through the rest of the decade a lot of it as you can imagine depends on what gold price um gets realized but uh based on what we see at four thousand dollar gold uh goose won't be cash tax payable uh for for around five years so into into the early 2030s is when it uh works through its um its losses and ultimately becomes cash tax playable okay great and i know you're working through your 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? If it's $4000 gold, I would imagine it would be lower because, again, Goose will see a significant wrap 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 dollars on the year when you include withholding taxes as well too great thanks guys thanks Kerry this concludes our question and answer session I would like to turn the conference Back over to Mike Sinemann for closing remarks. 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, in-line 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 Weaver's shown 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. This brings to an end today's conference call. You may disconnect your lines. Thank you for participating, and have a pleasant day.