Resources 826

Safe havens, resource stocks are beginning to look interesting again.

B2Gold Corp. (BTG) | Daily Alert January 28

Mining stocks have been so strong that the fast money has fully embraced the space. That’s also what we want you to do today with our latest buy, Canadian-based gold mining firm B2Gold Corp. (BTG).

BTG is a gold-mining stock with great promise and it could even be a buyout candidate. In 2006, the company was founded by executives from Bema Gold. Since then, B2Gold has built a diversified portfolio of mines in Nicaragua, the Philippines, Mali, Colombia and Namibia with relatively low debt. And most impressively, it’s already making money—a lot of money. The company’s third-quarter earnings results were spectacular, with $311 million in revenue. Earnings came in at nine cents per share in the quarter, up an impressive 125% from the prior-year quarter. BTG also produced a record 258,200 ounces of gold, 7% above the company’s budget. Not only is the Fekola Mine in Mali expected to produce 450,000 ounces of gold this year and 600,000 ounces in 2020, BTG is expected to produce one million ounces of gold in 2020.

In November, the company also announced its first dividend, a modest one cent per share. In general, when a stock pays its first dividend, this is a good sign that the company is confident about the future. Research has indicated that the stocks which start paying a dividend tend to outperform non-dividend payers.

For us, the real key is the relative strength of the stock as this is a proxy for fast money. And in terms of that metric, BTG is riding high, with a gain of nearly 57% over the past 12 months. That performance puts it in the top 8% of all publicly-traded companies in terms of share price performance over the same period.

With the fast money embracing BTG, its strong fundamentals and a conducive Fed that has desired to keep interest rates steady and the exchange rate lower, now is the perfect opportunity to profit from this gold mining star. Let’s buy B2Gold at market with a protective stop set at $3.32. For those willing to take a bigger bet, we recommend the BTG Apr. $5.00 call options (BTG200417C00005000), which last traded for $0.15 and expire on April 17.

Mark Skousen, Forecasts & Strategies, www.markskousen.com, Eagle Financial, 300 New Jersey Ave. NW, Suite 500, Washington, D.C. 20001, January 21, 2020

*2nd Opinion

B2Gold Corp. (BTG) primarily holds 80% interest in the Fekola mine, an open pit gold mine located in Mali; 90% interest in the Otjikoto gold mine located north of Windhoek, Namibia; the Masbate gold project located in the south-east of Manila, the Philippines; and 100% interest in the El Limon mine, an underground gold mine located in northwestern Nicaragua. “Geopolitical uncertainty is already translating into greater gold demand,” says Goldman Sachs, as highlighted by Reuters, “adding that 2019 will likely be a record year for global central bank (CB) buying with a target of 750 tonnes combined purchases.”

Ian Cooper, The Cheap Investor, support@thecheapinvestor.com, January 202011

 

*Osisko Gold Royalties Ltd. (OR)

Following confusion and opposition after Osisko Gold Royalties Ltd.’s (OR) September acquisition of all of the Barkerville shares it did not already own—which saw the stock drop 24% in one week—plus several high-profile exits from the company, it has been making clear that it is not becoming a mining company, and that the core business remains royalties. The new messaging has been a little slow, and the stock has only very slowly begun to recover. The company has said that its contribution to Barkerville is mostly done, and that it does not intend any additional exploration expenditures. It will look for financing sources and seek to monetize its investment. In short, Osisko feels that the biggest mistake it made was not in buying Barkerville, which it said represents tremendous value, but in not clearly stating that it was not turning into a mining company. Barkerville is an extension off Osisko’s accelerator model which has been a financial success. Given the discount at which Osisko trades relative to other mid-sized and large royalty companies—only some of which is justified, given the higher-risk “hybrid” model—Osisko is a good buy at these levels.

Adrian Day, Adrian Day’s Global Analyst, www.adriandayglobalanalyst.com, 410-224-8885, February 2, 2020

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