As my previous post explains, I came to the conclusion that Victoria Gold is an inferior horse to back for the current bull run in precious metals. I have switched to B2Gold, with a cost basis of around 3.77c.
Reasons for investing in B2Gold:
- CEO Clive Johnson has a good reputation as someone able to build mines and make good acquisitions
- Stock has a 5.7% dividend, the largest in the gold space.
- As a former Sabina shareholder who held until B2Gold acquired it, I am familiar with the Goose project in Nunavut, which they are currently developing. Though the project is taking longer than B2Gold expected (and costing more), it will add significant ounces when it goes into production in 2025.
- Though I’m not an expert on the local issues in Mali, it seems like the stock is oversold based on the issues miners (incl. Barrick) have been facing related to security. In other Mali news, B2Gold is waiting for a permit to enable it to truck higher-grade ore to the Fekola mill. This will be a catalyst if/when the permit is received. If not, the share price has already taken quite a beating due to security concerns; in this higher gold-price environment, I don’t think it can get much cheaper. The dividend also affords investors like me patience.
- Q1 production met expectations (far cry from VGCX) with a low AISC of only 1,345, a number which should be lowered once production increases with receipt of above permit
- Bullishness on stock expressed by Rick Rule and other MinTwitters I respect.
Above is the B2Gold five-year chart. I can get paid a 5.7% dividend to wait while the stock recovers. I’m okay with that.
Concerns:
- Political risk in Mali, e.g. a rumored insurgency/takeover risk of mining projects
- Continued difficulties developing the Goose mine up in Nunavut
When to sell:
- Company diverges from its mission
- To be Determined. I will try to give this some more thought other than simply picking the previous all-time-high.
MB
Disclaimer: This content is for informational purposes only and should not be construed as financial advice. The views expressed are those of the author, who is not liable for any losses or damages arising from any actions taken based on the information provided in this blog. Investing and trading involve risk; you are solely responsible for your decisions.