Q4 2019 Earnings Call
Good morning, My name is Jessica I will be your conference operator today at this time I would like to welcome everyone to some of those fourth quarter and yearend 2019 results conference call. All lines have been placed on mute to prevent any background noise. After the speaker's remarks, there will be a question and answer session she'd like to ask Chris.
During this time simply press Star then the number one on your telephone keypad. She would like to withdraw your question. Please press the star followed by the Q Bhutan you may begin your conference.
Thank you operator good morning.
First of chemical senior management team joining me for the call. Today are then what did I don't know President and Chief Executive Officer.
<unk> CFO.
And then do Shan, Vice President Engineering, and construction Johnson, Vice President corporate development on Investor Relations.
That's why presidents 19 operations and teach out was vice president exploration.
I would like to remind listeners that some of them appears to be discussed during today's call may contain forward looking statements.
Forward looking statements include but are not limited to items, such as our expectations regarding the market price. It food timetables mining operation expenses capital expenditures items on reserve and resource estimates.
Such statements are good even as it enters this conference call and involve risks and uncertainties.
A number of factors and assumptions wouldn't get in preparing such statements and actual results could differ materially.
Accordingly, you should not place undue reliance on forward looking statements.
For additional information with respect to forward looking statements risks and assumptions. Please consult our 2019 annual Mdna itself and then and other filings made with the Canadian Securities regulatory authorities on available in chemicals website.
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I'm also disclaims any obligation to update or revise any forward looking statements, except as required by law.
Nick This cautionary statement on behalf of all semaphore spokespersons. He may address you during this conference call today.
All dollar amounts referred to U.S. dollars unless otherwise stated.
With that said I turn the call over depend whether it's almost a presentation, where she north Dakota.
Got you then essentially in line.
Thank you wrote and good morning, everyone. Thank you for joining semifinals fourth quarter 2019 results conference call.
Despite some challenges 2019, so many accomplishments and then suddenly they didnt basis would produce over 340000 ounces at an all in sustaining cost of just over $700 grounds and generated operating cash flow of 247 million daughters.
Operationally, we led the way with excellent performance and free cash flow while men I made a solid contribution with first production from C. On the ground in the fourth quarter.
At the end of the year, our balance sheet remain healthy cash of $98 million that 60 million and continued 100% exposure to rising gold price.
On the development side, and then to lead the way with a maiden resource early in the year and the successful integration of Atchison properties to produce at this scale land package.
With the discovery of into nor in the second quarter to consolidate the blend package produced a combined inferred resource of 2.2 million ounces at yearend.
Quite an accomplishment in short timeframe.
This was this in a strongly for achieving our bend to resource goal of between 2.5 in 3 million ounces by yearend.
In Q3, we published a key a foreigner banga that showed an after tax NPV of 400 million at the 13.
Hundred gold price.
In the fourth quarter, we experienced an unprecedented attack on the convoy transporting our employees and contractors and the growth from Google mine.
I've been with seven full four were 20 years and this has been the most challenging time with my life.
The entire semaphore team in Montreal wagon do go and on both sides showed their strength in successfully dealing with this tragic event.
We have upgraded our security and ways of doing business doing that to the current operating environment.
We remain deeply grateful for employees contractors and suppliers, we demonstrated resilience and engagement in this difficult.
The current year 2020 began on a strong note we restarted boonville mill in February to protest stockpiles the logistics of transporting our employees by air is working well.
We expect to restart mining in the fourth quarter, while continuing to work with the government an improvement of regional security.
And I will produce between 185 in 200 over 5000 ounces and 2020 from won't see you open pit and see you on the ground, which should reach design capacity of 2010 for the in the coming weeks.
We started the year with a relatively modest 7 million dollar budget in exploration, which we expect to increasing during the year.
And then to our resource goal of 2.53 million ounces by year end remains on track in summary, we are looking forward to bundle getting back to full production and continuing our growth with the development has been too.
This concludes my remarks, operator, I would like to open up the land for Q any session.
[laughter].
Alright, Thank you ladies and gentlemen, we will now begin the question and answer session should you have a question. Please press the star followed by the one on your Touchtone phone you will see were three tone prompt acknowledging your request and your questions will be pulled in the order. They are received should you wish to decline from the pulling process. Please press the star followed.
By the Q and if you're using a speaker phone. Please lift the handset before passing any keys. Your first question comes from Lawson Winder of Bank of America. Please go ahead.
Hi, Good morning Bend, why and team. Thank you for your comments and also a thank you for taking the question maybe just to start off on.
With the situation around around don't go just trying to get a sense of potential increases in cost and you know from for multiple angles, but you know one might be.
You know there is there a chance that you might find yourselves funding some sort of a private security in order to secure supplier it roots.
[noise] a answer that question to ask you know, we as our own ex factory. It's a we have increased the number of experience on site for security.
We have some a private security from but coming from a from Burkina Faso.
It's not a possibility in burkina to bring let's see private or mercenaries or private a expense due to.
Do more than then protecting our sites so the a the security for the road or will stem from the the authorities we had good meetings with them at the beginning of the year. We've explained the plans do we started bu and in different phases. There's three things that weve ask for so far we got the first two in order to get.
The next phase, we see we need to see things coming from them, but we have a whether they're very good meeting and we're expecting news from them or in the coming weeks.
Okay. That's definitely sounds constructive no is there any possibility of some AFFO.
Helping to fund any Oh berchenall, they military effort in the region.
Yeah, that's for sure a that was part of our plan and part of our discussions with the other these what we are requesting we're ready to provide the funding for that.
So whether it's going to be camp installation or even having more security forces in the region, we're ready to pay for that we know what the boom who is a is a very good oh operation that low all in sustaining cost.
I additional security a we've added security lately, we will continue to adapt to the environment.
But at the end, we're talking about couple of million daughters. Maybe you were talking about three or maybe you could get to five but when you look at the numbers in the late like we have a boom who it's a it's a no brainer that we have to do it.
Okay, Oh, that's that's very helpful and then.
Just maybe one more for me on replacing a African my answer is good day.
Is there a possibility that your old <unk> mining contractor would come back or now that they have declared force measure on the contract. It is it now gone and.
If that if that is the case then what are some of your options and do you have an array of options. Thank you.
I and the I don't think they will come back they've they've made its pretty clear that they would not but yes of course, there is different the different scenarios that were looking into we are already in discussions with many mining contractors', a that are ready to do work and boom.
So they could we have at meetings. The this week last week with some in Montreal. So we'll see how it goes but definitely there is contractors that are ready to go.
I I apologize I said, just one more question, but also on the runway I would've thought that the runway could have could have been done bye bye.
By Q4 last year <unk> was there anything prior to this tragic event happening that was delaying the runway from getting a completed.
The only thing where we had we had some delays it was in the process of getting all Oh the approvals from the difference the level of authorities. We are the mid of a delay in that so we've started later than it was expected that the beginning.
Are the same time, we're we're bringing waste from the from the bit too or to the airstrip for the construction of airstrip.
I think the delay we had there's definitely on the approval side a after a force. After November six we were no longer working on it we're planning to restart a fairly shortly a with the local contractor.
And there's probably two months and a half three months of work to complete <unk>.
Today, we are transporting our employees by hair still though what they look after its it then see helicopter most of our employees a almost all of our employees were bringing them on site from side not from what they do so it's only 30 minutes light.
Okay, that's great and it's a it's fantastic to see things a.
Turning to improve.
Around around Bogoso best of luck guys. Thanks.
Thank you.
Ladies and gentlemen, as a reminder, should you have a question. Please press the star followed by the way.
[noise]. Your next question comes from.
Oh Scotia Bank. Please go ahead.
Hi, Good morning been was just a couple of question there'll be some of my questions was already answered.
Just a follow up from on on the contractor for Bongo, Obviously you don't.
Your guidance for the second half of the year includes mining operations restarting.
His data cutoff point, where you need to make a decision on the contract a floor that guidance to remain intact.
In fact, Oh vase, what you have in our guidance is approximately two months of mining at the end of the year. So we said it wouldn't be before a in order to.
Well I have demonstrated on time, depending if the is it by M.S. equipment or they bring their own equipment. We have we have plenty of time I think between today and the and the day, we have to make a decision we probably have to make a decision sometime in Q3 got it okay. Okay. That's good to know and again moving.
Oh, sorry go ahead.
Just to add always of course, if we can do it quicker quicker than that we will so it's not a question that we want to restart mine. It's a question of having the probably the contractor ready and having the proper security. So if we can do quicker affordable.
And that's also contingent I guess on the government efforts as well.
Yes, because at some point, a I think boonville full oh.
Oh production of course, a there's more of consumables that we need to bring it to bring on site and we have to bring consumables by road of course. So this is what we're doing since since again, if I remember when we started the plant <unk> full run rate of course, it's more trucks and are we will have to see some improvement in security, but as I said we.
The very positive a meeting with them. So we expect news in the coming coming month.
Got it no. That's that's good to hear and just moving off a Mongol I'm, just a little bit on a on a c. wonder ground I mean in terms off you know obviously you guys had some good.
Drilling completed a ahead of schedule as well it seems like things are moving really well ahead of schedule on on on mining as well how is the grade reconciliation being <unk> in terms of how you were looking at your modeling assumptions.
A you know we did I think 50% of great control so far with it we are within 5% of.
Of our initial model so no big deal.
So are you saw that then the new results that we asked published which are our within 5% or so so far so good with mine the we've mined the little or since the beginning of the year of course I think in January will reach something like 56000 ton in the in the month.
So so far so good.
Okay, excellent and I've been wide I leave it at that and that other.
Carlos <unk>, calling for questions. Thanks, Thank you ladies.
Oh really have no further questions at this time. Please proceed.
I would like to remind listeners that our fourth quarter 2019, Mdna I'm financial statements are available on our web site or in seat arc.
<unk> audio webcast of this conference call will also be available for replay on our website for a period of 30 days.
I'd also like dimension that currently our 2021st quarter financial and operating results are scheduled for publication on around net net well. Thank you and have a good day.
Ladies and gentlemen, this concludes your conference call for today, we thank you for participating and ask that you. Please disconnect your lines.