Stonecap Securities:

Site Visit Highlights: Limon & La Libertad

B2Gold Corp. (B2Gold) hosted an Analyst site visit for their two Nicaraguan operations from May 22nd to May 23rd. Highlights of our visit are provided below:

• Limon: The main open-pit currently has a vertical depth of only 70-80m and the deepest part of the underground mine has a depth of only 200m, which makes it a fairly shallow operation overall. In terms of its underground operations, we note that the mine only utilizes a series of ramps and drifts which help keep the sustaining capex low (US$16 million). The processing facility is undergoing expansion which, by the end of 2013, should increase capacity by 20% (from 1,250 tpd currently). The company has increased its annual production at Limon every year since they became the operator and looks to be on track to continue this trend in both 2013 and 2014. Based on results to date, the company is on target to achieve the mid-point of its production guidance (56,000oz) and the lower end of its cash cost guidance (US$715/oz).

• La Libertad: Although many Analysts are bullish on Jabali, we highlight that due to the high strip ratio of the pit (17:1) and the additional haulage costs of transporting the ore from the Central zone to the La Libertad mill, the economics of this deposit might not be as strong as initially thought. Instead, we are bullish on the Antenna zone which is directly adjacent to the Central zone to the west. Antenna is an open-pittable deposit with an average grade of 4.0 g/t gold and a LOM strip ratio of only 7:1. The deposit will be accessible using the same access road for the Central zone. In terms of capex, we believe that only US$15 million is truly sustaining capex. As a result, sustaining capex on a per ounce basis is really only US$100/oz which makes it a very low capital intensive mine that will continue to generate significant free cash flow at sub US$1000/oz gold. The company is on target to achieve the higher end of its production guidance (135,500 ounces) and the mid-point of its cash cost guidance (US$575/oz) in 2013.

Valuation

Our valuation remains unchanged at this time where our NAV estimate for B2Gold is $3.09/sh. After applying a 1.6x multiple (unchanged) to our NAV estimate, we arrive at our target price of $4.75 (unchanged). Outperform rating maintained.