Why consolidation is a 'real dilemma' for the miners - B2Gold's Clive Johnson

Reaching an agreement with the Malian government helped propel B2Gold’s stock price, CEO Clive Johnson noted.

Last week, Johnson spoke to Kitco Mining at the Gold Forum Americas/XPL-DEV 2024 in Colorado.

B2Gold (TSX: BTO) is a senior gold producer headquartered in Vancouver, Canada. Founded in 2007, the company operates gold mines in Mali, Namibia, and the Philippines. The Goose project is under construction in northern Canada. B2Gold forecasts total consolidated gold production of between 800,000 and 870,000 ounces in 2024.

In September, the company announced it had reached an agreement with the Malian government, allowing the Fekola Mine to continue operating under the 2012 mining code, while new expansions will follow the 2023 code. Johnson said the agreement removed significant uncertainty surrounding the mine, leading to a 13% rebound in B2Gold’s stock, one of its largest single-day gains since 2009.

“We knew that this was going to be a difficult year,” Johnson said, calling the agreement a “huge relief.”

Mergers and acquisitions have been heating up in the mining sector.

“The best protection for a takeover is your stock price,” Johnson said, noting that concerns about the Goose project and issues in Mali had partly become “poison pills” that prevented the company from becoming a target.

“We work for our shareholders. Any reasonable offer is the shareholders’ decision, not ours. We’re open to whatever makes sense going forward,” he said.

Johnson noted that investors would like to see more consolidation, but forecasting the gold price remains a challenge.

“I think it’s a real dilemma for the industry. Investors want [consolidation]. They want fewer mining companies. They want better-run ones. We’ve seen some of that, but at the end of the day, if you’re looking at M&A today, what gold price do you use? And it’s going to be competitive.”

Coverage of the Gold Forum Americas/XPL-DEV 2024 is sponsored by Metalla Royalty.

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