2019-05-02 - q1 conference call · 5/2/2019 · qexploration to resume resource growth momentum...
TRANSCRIPT
Q1 2019 Conference CallMay 2, 2019
Caution Regarding Forward-Looking Information
Listeners are encouraged to read our Management Discussion andAnalysis for the first quarter ended March 31, 2019 together withour Financial Statements for the same period to understand therisks inherent in the forward-looking comments we will be making.
Participants
Jason NealPresident & Chief Executive Officer
Gil LawsonChief Operating Officer
Maarten TheunissenChief Financial Officer
Lisa WilkinsonDirector, Investor Relations and Strategic Development
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Highlights – Continued Momentum
q Record production, AISC and Cash Costs drive earnings and EBITDA§ Q1-19 earnings $0.06 per share and Adjusted EBITDA $28.6 million§ AISC US$992 per ounce and Cash Costs US$658 per ounce§ Production 40,050 ounces and sales 39,200 ounces
q Improved Plant performance§ Commissioning of Plant retrofit nearing completion§ Recoveries continue to improve to 84% in Q1-19, up from 82% in Q4-19
q Continued successful exploration, especially high-grade BTD
q Balance sheet management increases financial flexibility§ Amended credit facility eliminates US$26 million (~C$35 million) of principal
repayment in next four quarters and eases covenants§ 2019 sealift diesel purchase/delivery and renewing consignment agreement with
Macquarie - US$40/oz savings in AISC and Cash Costs expected starting Q4-192
Rising Plant Throughput and Rising Recoveries
Plant target 2,000 tpd and 90% recovery, and then push to exceed
3(1) Stated grade relates to feed grade.
(1)
Rising Mine Production
Mine target 1,500 tpd Doris underground, and then push to exceedPlant feed supplemented from surface crown pillar (Doris, Naartok) and stockpiles
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Q1-19 = 1,600tpd @ 10.2 g/t
(1) Mine production includes incremental ore.
(1)
Key Operating Metrics
Q2 2018 Q3 2018 Q4 2018 Q1 2019
Processing
Throughput (t) 88,300(970 tpd)
127,400(1,385 tpd)
164,900(1,800 tpd)
145,000(1,610 tpd)
Processed Grade (g/t) 10.0 10.1 7.8 10.3
Recovery (%) 82 80 82 84
Gold produced (ounces) 23,140 33,100 34,080 40,050
Gold poured (ounces) 25,970 33,460 32,750 37,180
Mining
Ore(1) (t) 71,400 103,300 212,400 144,000
Waste(1) (t) 78,100 72,100 298,700 110,600
Total (t) 149,500 175,400 511,100 254,600
Average grade (g/t) 9.6 8.4 7.4 10.2(1) Ore and waste mined includes material from both underground mining, crown pillar (Q4-19 only) and Incremental Ore.
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Rising Gold Production and Declining Costs
(1) Computation of AISC is in accordance with the World Gold Council guidelines
2019 Guidance Production: 160-180kozCosts: $625-$700/oz cash costs, $900-$1,000/oz AISC
(1)
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Q1-19 = 40,050oz
Q1-19 = $992/oz
Key Financial Metrics
(1) Refer to non-IFRS measures section of the Management Discussion and Analysis for further information on these measures.(2) Computation of AISC is in accordance with the World Gold Council guidelines.
Q3 2018 Q4 2018 Q1 2019Gold Produced (ounces) 33,100 34,080 40,050Gold Sold (ounces) 32,140 31,380 39,200Revenue (C$ millions) 50.3 51.4 67.9Realized Gold Price (C$/oz / US$/oz) 1,565 / 1,201 1,635 / 1,233 1,731 / 1,302Cash Costs (US$/oz)(1) 825 752 658AISC (US$/oz)(1,2) 1,217 1,112 992Cash Flow from Operating Activities before Working Cap Changes (C$ millions) 7.3 11.9 26.0
Cash Flow from Operating Activities (C$ millions) 6.1 (10.0) 35.4Adjusted EBITDA (C$ millions)(1) 11.2 15.7 28.6Capital Expenditures (C$ millions) 27.9 19.2 22.7Ending Unrestricted Cash Balance (C$ millions) 13.6 24.8 25.6Debt (C$ millions) 202.2 166.7 151.7
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Amended Debt – Cumulative Principal Payment Profile
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Elimination of US$26 million of principal payments next four quarters and easing of covenants based on strengthening operations
(1) Assumes extension of each facility.
US$40 million
Quarterly Amortization(1)
Previous AmendedQ2-19 - Q1-20 $6.5M/Q $0/QQ2-20 - Q3-20 $6.5M/Q $2.5M/QQ4-20 - Q2-21 $5.5M/Q $2.5M/QQ3-21 - Q3-22 $5.5M/Q n/aInitial Maturity July 31, 2020 Dec 31, 2020
Extended Maturity July 31, 2022 June 30, 2021
Balance Sheet Efficiency
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Projected $40/oz savings to AISC and Cash Cost beginning Q4-19
Potential to release further restricted cash; Ongoing efficiency for Madrid Project
CIRNAC
KIA
Letters of credit
Letters of credit
InsuranceCompany
Letter of credit
agreement
Demand Bond
Macquarie purchases fuel under fuel purchase and delivery contract
Macquarie rents tanks from TMAC and stores purchased fuel in tanks
TMAC purchase the fuel from Macquarie - TMAC pays as it removes fuel from Roberts bay tanks and stores in Doris tanks
Renegotiated contract for fuel purchase, transport and delivery to site
PlannedDevelopment
High Grade Plunge
Inferred(approximate)
Indicated(approximate)
BTD Extension – High Grade and Open
Q1 2019Drill Bay
TMDBE-19-50031682.9 g/t Au/1.4 m
50 m
Au g/t(un-capped)
0-22-44-1010-2020-3030-6060-9090-120>120
TMDBE-19-50005407.0 g/t Au/1.1 m
TMDBE-19-50018207.0 g/t Au/0.9 m
N
506 g/t Au/0.8m
13.5 g/t Au/0.6m
2.9 g/t Au/0.5m
1.9 g/t Au/0.5m
0.9 g/t Au/0.4m
1.0 g/t Au/0.7m
1.1 g/t Au/0.5m
3.5 g/t Au/0.7m
166.0 g/t Au/1.0m
22.0 g/t Au/1.0m
75.9 g/t Au/1.0m
10.5 g/t Au/1.0m
4690-West Limb Rnd 13Development Chip Sample Results
Vein Grade66.0 g/t Au/3m (100 g/t Au Cap)
88.0 g/t Au/3m (un-capped)
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506 g/t Au/0.8m
13.5 g/t Au/0.6m
2.9 g/t Au/0.5m
1.9 g/t Au/0.5m
0.9 g/t Au/0.4m
1.0 g/t Au/0.7m
1.1 g/t Au/0.5m
4690-West Limb AccessDevelopment Chip Sample Results23.0 g/t Au/4m (100 g/t Au Cap)
104.2 g/t Au/4m (un-capped)
Near-Term Priorities
q Continue building positive cash flow
q Continue to build on success of increasing plant performance§ Confidence in our targets: at least 2,000 tpd and 90% recovery§ Ramp-up coming to end and optimization of productivity and cost next
q Execute on development to feed expanded Plant capacity§ Doris UG production ramping up with strong grade§ Delivering plan for development of Madrid
q Exploration to resume resource growth momentum§ Doris, Madrid, Boston, 90+ regional exploration targets
q Q4-19 target release of updated PFS for disciplined Hope Bay Belt development and optionality, focused on stakeholder value
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