Metals and Mining -- Precious Metals and Minerals

2013 EXPLORATION AND DEVELOPMENT

OUTLOOK

Investment recommendation

We maintain our BUY rating on B2Gold following the release of 2012

exploration results and the 2013 exploration/development budget. B2Gold is

a Canaccord Genuity Focus List pick based on one of the best production

growth profiles in the sector, with expected production growth from 158 koz

in 2012 to 550 koz in 2015 (and potentially to 750 koz by 2017 if Gramalote

is advanced to production). Growth to the +500 koz intermediate producer

category by 2015 is largely permitted and fully funded, leading to a relatively

low development risk profile. Encouraging results from the 2012 program at

most of its mines/projects highlight the significant exploration optionality in

the company’s project pipeline. The company’s strong balance sheet/cash

flow profile facilitates a significant 97,000 m (at least) drill program in 2013

($35.9 million Phase I budget). With a proven exploration team leading the

efforts, we see the potential for strong news flow that could help unlock

further value from what we consider to be a very attractive asset portfolio.

Investment highlights

? La Libertad - $16.9 million in Jabali development plus $4.7 million on

infill drilling at Jabali, and resource drilling and exploration at La

Libertad. An updated, potentially increased Jabali resource estimate is

expected in Q1/13, based on results from 2012 drilling.

? Limon - $5.74 million to develop preliminary mine plans at Pozo 4-5,

and drill test several targets with a goal to extending mine life and

increasing grades to the mill.

? Masbate - $11.0 million, 8 drill rig reserve/resource and exploration

program is underway focused on a number of attractive targets.

? Otjikoto - $134.4 million development budget in 2013 plus $8 million

exploration budget with a key focus being to define an initial resource at

the new high-grade Wolfshag zone discovery.

Valuation

Our 12-month target price remains unchanged at C$6.00 based on 1.15x our

5%/peak NAVPS estimate of US$5.15 assuming US$/C$ parity.