The $3 Gold Play: The Recession Asset That Could Triple Gold’s Returns in America’s Reckoning
Make no mistake, the U.S. is experiencing the worst economic headwinds it has seen in a long time. We’re reliving the worst parts of the 1970s, and there’s no Paul Volcker or Ronald Reagan in sight to pull us out of this tailspin.
And as the U.S. dollar becomes worth less than the paper it’s printed on, the gold bugs will finally have their day.
One of the best ways to protect your money will be with hard assets that have value independent of the Federal Reserve and the government.
But gold is already valued at just shy of $2,000 an ounce. That’s a steep entry price in a strong economy, let alone one that’s falling apart at the seams.
Luckily, there’s a way to play gold for about $3, and it’s perfect for us as we get ready for America’s Reckoning.
It has all three factors that I look for in a bear market stock…
- Low cost of entry
- Tremendous upside
- Low risk.
You see… I evaluate gold-mining companies the same way I evaluate stocks.
I’m a cheapskate, so I never want to overpay.
So I look at the fundamentals and find the best values… just as Warren Buffett does. It’s all about value-based investing.
And that’s why I love B2Gold Corp. (BTG).
All That Glitters Is Not Gold…
Based in Vancouver, Canada, B2Gold is one of the lowest-cost gold producers in the world.
With three producing mines that are located in Mali, Namibia and the Philippines and numerous exploration projects around the world, including ones in Finland, Uzbekistan and Colombia, it’s a wonder B2Gold’s stock isn’t more expensive. But it trades for about $3 per share.
So what’s all the hype about? While B2Gold may not be the largest gold producer in the world, it is one of the most efficient. What that means is it extracts gold for an incredibly low cost and then sells it at market price for a massive profit.
See, it all comes down to total consolidated all-in sustaining costs (AISC) per ounce of gold extracted.
B2Gold’s average AISC across all of its mines is just about $1,200 per ounce at most. This chart really tells it all, and I’m going to explain why.
The lower the price for a mining company to extract a mineral, the more profit it can make per ounce when it sells that mineral on the market.
Well, gold is trading for just under $2,000 per ounce at the time of this writing. That means for every ounce B2Gold extracts at $1,200, it can take home a hefty $800 in revenue.
In the second quarter of 2023, B2Gold produced 262,701 ounces of gold – which netted the company $470.8 million in revenue. And it has more than $506.2 million in its reserves to expand its business.
What’s more, the company returns money to its shareholders regularly in the form of a dividend. In 2022, it paid out $171 million to its shareholders. And its dividend yields 5.16% at the time of writing.
But owning B2Gold would be like owning gold at $1,200 per ounce. The company is already cash flow positive even with gold at its current price, but that $1,200 average is basically fixed.
It will fluctuate up and down, but as the price of gold rises, B2Gold’s costs will not, meaning the higher gold’s price gets, the higher B2Gold’s revenue and profits (and, by extension, share price) will rise.
If gold shoots up 23X like it did in the 1970s, the theoretical gains are… beyond spectacular.
Back in the ’70s, Barrick Gold turned a 3X move on gold into a 100X gain in share price. B2Gold could easily blow those numbers away thanks to its well-placed mines with deep reserves that are easy to get to…
The Smallest Global Mining Giant
First, there’s the company’s largest mine, the Fekola Mine in Mali. In 2021, it brought in 567,795 ounces of gold at an AISC of $1,085 to $1,145 per ounce. For 2023, it’s projected to produce as much as 610,000 ounces.
Then there’s the Otjikoto Mine in Namibia. It’s a much smaller facility, but for 2023, B2Gold is projecting production of 190,000 to 210,000 ounces at an AISC of $1,080 to $1,140 per ounce.
Finally, B2Gold also has the Masbate Mine in the Philippines. The company projects this mine will produce 170,000 to 190,000 ounces in 2023 at an AISC of $1,370 to $1,430 per ounce.
All of that averages out to the overall AISC of $1,200 per ounce that the company is expecting for 2023.
But that’s not all. B2Gold is using its income from those three mines to expand its reach in Mali and begin operating in Colombia. If projects in those countries can keep the same low-cost approach B2Gold is excellent at implementing, then this company could easily 10X gold’s return.
Aside from the incredibly low cost of B2Gold’s projects, it’s also worth noting that its balance sheet is spectacular for a mining company, many of which are drowning in debt and struggling to turn a profit.
Few mining companies can claim financial stability in the way B2Gold can. It even pays a dividend, which few other gold-mining companies can do.
And that’s why B2Gold is one of the best stocks to buy to prepare for America’s Reckoning.
Action Plan: Buy B2Gold Corp. (NYSE: BTG) as long as the yield is over 4.9% or the shares are below $3.30.
Our Profit-Taking Strategy: When you enter a new Trade of the Day Plus pick, every single entry will automatically come with a 25% hard stop unless indicated otherwise. If this stop is hit, the position will be closed. We do not use intraday prices for any of our stops. We use close-of-day prices.
- At 25%: If our initial recommendation moves up 25% from our entry price, we will exit half the position and then change our 25% hard stop to a 15% trailing stop.
- At 50%: If our initial recommendation moves up 50% from our entry price, we will exit another quarter of the original position. The 15% trailing stop will remain.
- At 100%: If our initial recommendation moves up 100% from our entry price, we will exit the remaining quarter of the original position.
There’s Gold in Them There Hills…
The power of gold miners is that you get all the advantages of leverage without having to use options or complicated trading strategies.
But when a gold miner is a bargain, as B2Gold is at about $3 per share, you don’t need to go all-in to reap big rewards.
The point is to use a small portion of your portfolio… and position yourself for life-changing gains.
It’s basically like an insurance policy. You take a small amount of money to protect yourself for when disaster strikes.
So if you believe even a little bit that gold could go higher…
You need to move some cash into this amazing stock right now.