Q1 2021 Centerra Gold Inc Earnings Call
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Yeah.
Greetings, everyone and welcome to the first quarter results conference call. During today's presentation. All participant lines will remain in a listen only mode. Afterwards, we will conduct a question and answer session with instructions to follow.
Please note that today's conference is being recorded Tuesday may 11th 2021.
And if at any time during today's briefing you need to reach and operator. Please press star zero and it is now with pleasure that I turn todays presentation over to Mr. John Pearson Vice President Investor Relations. Please go ahead Sir.
Thank you Bridget.
And welcome everyone to comparable first quarter 2021 results conference call.
Summary slides are available on center Gold's website to accompany each speaker's remarks.
Today's call is open to all members of the investment community and media and listen only mode. Following the formal remarks, the operator will give the instructions for asking questions and then we will open the phone line to questions. Please note that all figures are in U S dollars unless otherwise noted.
As we continue to work remotely and joining me on the call today is Scott Perry, President and Chief Executive Officer, Darren Millman, Chief Financial Officer.
And days are Dan <unk>, our chief operating officer, and use a frame and our general counsel.
I would like to caution everyone that certain statements made today, maybe forward looking statements and as such are subject to known and unknown risks, which may cause our actual results to differ from those expressed or implied.
Also certain of the measures we will discuss today are non-GAAP measures. So please refer to our description of non-GAAP measures in our news release and the MD&A, which was issued earlier this morning.
For a more detailed discussion of the material assumptions risks and uncertainties. Please refer to our news release and MD&A, along with the unaudited financial statements and notes and our other filings, which can be found on SEDAR and now on Edgar and on the company's website.
That's a terrible dot com and now I'll turn the call over to Scott Perry.
Thank you John and good day, everyone and thank you for dialing and throughout Q1 earnings conference call.
And it's gonna be referencing Oh accompanying presentation slide deck, which is available on our website and I'm just starting off on slide number five.
Given all of the recent developments and the cookies Republic I thought I would take a moment to talk about those first as we announced on Friday and new external management law was passed by the cookies Republic Parliament last.
Last week.
It was introduced it pass through three readings and was adopted in a single day.
Mr. <unk> was the sponsor of the law and he stated that it only applies to control and not to any other mining companies. So from our perspective it is clearly discriminatory.
Just Oh, Quebec, Japan, Rob is also the chair of the State Commission reviewing from towards activity. The State Commission is set to report their findings shortly.
No coincidence that the $3 billion environmental claim was advance and decided on by the cookies Republic cohorts at the same time as the law on the external management was approved.
The law is designed to allow external management to be imposed whether it's a threat to human health or the environment and of course.
And so I wanted to state we believe that the environmental claims are baseless, but one thing. This exact claim was settled and the 2017 strategic agreement.
And secondly, the claim relates to a practice that was stopped many many years ago.
There is no imminent danger of harm to the environment.
From towards environmental record is excellent and it's important to note that the mine was first financed by E B I D and <unk>.
IFC and and as debt and therefore had to adhere to their high environmental standard and.
In addition, the governments and independent consultants has noted that cum total is operated to international best practices and we have carried out any and all of their recommendations.
And similarly from a safety perspective, I want to note that come and so just achieved a significant milestone in terms of one year of lost time incident free operations. So the suggestion that come towards operations post imminent danger to human lives.
And that to be completely unreasonable.
We control would not enjoy such excellent and supported our employees and local communities. If we were actually putting human help from the environment at risk.
As always and Tara has tried to engage the cookies government on any disputes and misunderstanding and we will continue to do so however.
However, we will not hesitate to use all other means at our disposal, including international arbitration to protect the rights and interest of the company and shareholders.
Moving into the Q1 results themselves starting on slide six and that's always a license deal with safety and I think Q1 was an excellent quarter for the company we had three significant milestone.
During the quarter as I, just mentioned come tour achieved one year of consecutive lost time incident free operations and in addition to that as part of that that milestone and I want to note that our contractors that come till have now achieved 1000 consecutive days of lost hundreds and three operations physical.
This was also complemented by and Docker, where they achieved six years of reportable injury free operations.
Great set of metrics and in terms of our ongoing objectives their hub operations.
You can see the third bullet point, our gold production levels were strong during the quarter. We produced just over 160000 ounces of gold and if you look at the fifth bullet point that I was at a very competitive low all in sustaining cost of $745 per ounce.
Continuing to see good operating momentum carrying over from last year into Q1 and expecting this to continue just.
Just before I leave this slide I'd just highlight the second bullet point.
Mount Milligan and had excellent performance during the quarter, particularly from a financial perspective, and we reported free cash flow of some $80 million U S, which was a record quarterly free cash flow results and mind. So obviously benefiting from our production levels, our unitary cost performance, but also with the significantly higher copper price environment.
That is definitely underpinnings and strong profitability and free cash flow.
Just moving on to the next slide on on slide seven.
And in terms of absolute bottom line financial results first bullet point.
During the quarter, we reported.
Net and I'm, sorry, adjusted net earnings and some $84 $2 million, which equates to <unk> 28 per share.
The third bullet point again, we saw.
Meaningful levels of positive free cash flow being generated throughout the business companywide and it was a total of $72 million and then you can see and per emphasis that each of the operations are contributing positive free cash flow.
The fourth bullet point, our balance sheet and treasury position continues to be peer leading and continues to be very strong we have a debt free balance sheet and we finished the quarter with net cash reserves of some $823 million U S. This was favorably underpinned by the last bullet point here whereby during the quarter we closed.
And the divestment of our greenstone Gold project, and we sold a 50% ownership level and that brought in some $210 million U S of consideration and then just lastly, the fifth bullet point, just given the strength of the financial results the strength of that balance sheet as well as the outlook moving forward. The board has once again declared a quarterly.
The dividend of Canadian five cents per share.
Just moving on to slide eight you can see the chart on the bottom here, we're just breaking out each about sort of business unit operations and since that each of the mine site and you can see over the last five quarters, we've seen a very meaningful levels of profitability and positive free cash flow and.
And the second child, there from the left you can see Mount Milligan and very strong quarters. So really benefiting from these strong copper prices that we're currently seeing and then obviously the surcharges offset this as our newest gold mining operation and we declared commercial production here in Q2 of last year and you can see it has since been a very meaningful contributor obviously.
And in terms of production, but more so in terms of free cash flow generation. The chart on the top right just really highlights our net cash position and you can see over the last five years, we've been increasingly transitioning into a positive net cash position and 2020, we actually eliminated all corporate debt on the balance sheet and as you can see finishing the most recent quarter.
With a net cash of $823 million U S. So certainly makes for a strong financial foundation and the and are fully funded debt.
And this model moving forward just on to slide nine and just in terms of out and environmental social governance profile and updates and Q1.
And I just referenced a couple of bullet points here first bullet point, and obviously very focused on safety and in terms of our company wide work safe home sites.
Leadership program and I spoke to on a number of milestones that we sold during the quarter, but I think what myself and management and really pleased about one of the key metrics that we reported that total reportable injury frequency rate and that currently sits at 0.27, whereas our internal targets for this year is point for one and so we're off to a great start we've got some really good momentum there and that's.
And our service well as we look to rally the troops and continue this good performance moving forward.
And the bullet point, just in terms of social license to operate and we've now got a consecutive 93 month track record of no business interruptions at any of our assets third bullet point just in terms of our environment environment again, we had no environmental incidents during the quarter as it should be and then I might just jumped on to the last bullet point.
We continue to make significant headway and progress in terms of our rollout and implementation of the World Gold Council responsible gold mining principles I think all of our operations are in very good shape as we look to establish full compliance and and third party assurance on that by.
By the end of 2022.
So with that I'm going to pass the call over to Dan Day, Jordan, Our Chief operating officer, So over to you. Please Dan.
Thank you Scott good morning, everyone.
So on Taro continues to prioritize the health and safety and well being of its employees contractors and communities and other stakeholders. During this COVID-19 pandemic and we're taking steps to minimize the effect from the pandemic on our mine sites to help prevent infection and reduce potential transmission.
And all.
In addition, our operating sites, we continue to assess the resilience of our supply chain and increase the mine site inventories of key materials and develop contingency plans and it has allowed us to continue our operations unabated.
Moving to slide 11.
For Q1, we had a number of operating highlights.
Of note as Scott indicated the near 4000 people working at the <unk> mine achieved one year lost time free operation net.
Canadian and data cooperation.
We had six years now are injury free.
Excellent results on the production front, we had a solid quarter, we produced 160000 and 346 ounces of gold and 18.
Point 6 million pounds of copper it and all in sustaining cost of $745 per ounce sold.
Specifically <unk> produced 90000 ounces.
At 888.
Dollars per ounce sold.
Milligan produced 42000 ounces.
Excellent $367 per ounce sold after the copper credit for the sales and Oct suite.
Excellent net new operation, we have 27000, and 601 ounces of gold produced at $804 per ounce.
At come toward the plant operated on interrupted for the quarter and we continued to produce or and feed the mill from our stockpile and we are stripping cut back 20 and that is continuing as per our planned rates and.
And at Mount Milligan and rock suite. The operations were normally operated for the quarter and as per our annual plans and again, our overall all in sustaining cost was $745 per ounce sold.
Of note the Mount Milligan mine and.
And $4 5 million cubic meters of water and our tailings pond inventory as at March 31, and no just and the last month, we've built that up already to $6 1 million cubes as we go into our fresher.
Also we did receive the amendments to access surface water near the mine site and that is now extended to November of 2020. Three this gives us more time to work with our first nations and government partners to continue to develop our long term water strategy.
Please go to slide 12, and we'll go over operating key focuses.
Again safety is our highest operating priority and we continue to rollout our safety programs to constantly improve our safety performance. We have a very robust behavior program called work safe home safe that we've embraced now for three years and we are focused on visible felt leadership and the development of ruling out.
Our critical controls and Q1, we had excellent results that Scott spoke to and we are we believe this is a great step forward.
With a normal spring mill access to underground water resources and the extension of our permits we do have adequate water to run the plant per at full capacity for the for this year.
As part of our continuous improvement we continue to expand the comb toward Leach circuit and add additional grinding capacity through the installation of tower Mills this year.
At Mount Milligan, and we continue to focus on constantly.
Constant production with a strong focus on ore blending and plant maintenance to make sure. We continue hover solid throughput.
We are also installing at Mount Milligan, a staged flotation reactor.
And to improved recoveries of both copper and gold.
As a result of productivity improvements brownfield drilling and cost controls. We are updating the life of mine plan and a ballpark suite and Mount Milligan and we're planning to have these completed this year.
In addition, we are creating value with robust brownfield exploration programs across all our operations.
Darrin, our CFO, who will walk us through the financial results.
Thanks, Dan and good morning.
Everyone safe and well for.
And for those following on the slide deck I'll be speaking to initially slide 14.
<unk> recorded 402 million and revenue during the quarter. This materially consisted of 293 million and gold sales.
$62 million and copper sales and $40 million to $40 million from the believes it and business unit.
During the quarter the company's average gold price realized was <unk> $827 per ounce and $2 and 72 per pound of copper.
Incorporates the existing stream arrangements over the Mount Milligan mine.
In the quarter, we sold 190000 ounces of gold.
55 ounces from them at Milligan mine at 35% increase compared to the prior year quarter.
28000 ounces of gold attributable to the Oxford mine and it finally third quarter production system and commercial operations.
And finally 98000 ounces attributable to the come to him on.
It should be noted a cultural mine had a 39% reduction and ounces sold compared to the prior year quarter. This primarily was driven by reduction and processing gold head grade was <unk> 32 per cent compared to the project quarter.
We also saw a $22 8 million pounds of copper, a 12% increase and comparison to the prior year quarter. This represents fought concentrate shipments in the quarter for Q2, we are targeting for shipments.
And just moving over to slide 15.
The net earnings recorded during the quarter was 167 me and this including the adjustment items all.
A $72 million gain on the silos and terrorist interest and the Greenstein Goldmine partnership.
And a 10.9 million dollar gain on reduction and no reclamation liability due to favorable discount rate movement.
Earnings attributable from operations perspective were 89 million contributed from the <unk> operations.
<unk> contributed from the Mount Milligan operations, and 24 million contributor from the Oxford and U S operations.
The adjusted earnings recorded was $84 million for the quarter or <unk> 28 per share.
This is net.
And this is net of the gain on the sale of the Sentara is interest and the greenstone Gold mine partnership and the gain on the reduction and the reclamation liability mentioned earlier.
From a consolidated cost perspective, Terry and the quarter over quarter production cost of $561 per ounce and O and sustaining cost of $745 per ounce.
On an asset level control recorded all in sustaining cost of $888 per ounce.
And again recorded all in sustaining cost of $367 per ounce and Oxyt recorded and all in sustaining cost of $804 per ounce for the quarter.
As noted in the bottom right hand chart. The Turkish Lira has continued to be volatile.
And Q1, there was a 12% deflation and the lira.
During the quarter compared to the U S dollar with some offsetting inflation on a net basis, but we are continuing we are currently not experienced anything twice and refresh pressures.
The kogi stomach and cannot.
Gideon dollar has been volatile compared to the prior year quarter, but minimal change in Q1.
Just moving to slide 16.
As previously highlighted 153 million was generated from cash provided from operations during the quarter and 70 to me and the company wide free cash flow.
When you combine the free cash flow $72 million and 210 me and from the proceeds from the sale of the greenstone partnership the company ended the quarter debt with debt free.
123 million and cash as referenced in the bottom right hand chart.
The key contributor to our free cash flow during the quarter with a mat Milligan on Oct suite bonds of IDB and $26 million respectively.
In 2021. These two mines alone are expected to generate $160 million, representing and midpoint of guidance.
As disclosed in the MD&A caution should be taken or that all forward looking guidance, but I would highlight on the bottom left hand chart and significant step up and production in 2022 is targeted to be driven by the new Oxy mine and approximately 125 per cent increase and production comparing to.
And in 'twenty, one to 2022 production guidance.
And finally, given the cash flow generation from operations.
And cash position of $823 million and.
And liquidity in excess of $1 2 billion this and Taro Board declared a quarterly dividend of <unk> per.
<unk> per share.
Chris Thanks for the quarter with that I'll hand, it back to Scott.
Thanks, Darren just on slide 18, and just referencing that bullet points here on the top left I'll, just look to kind of sort of round out the call here, but again just the third bullet point just to recap. It was another strong quarter just in terms of our operating momentum that we're seeing again quarterly gold production in excess of 160000 ounces of gold.
And again, we continue to produce gold at a pretty low competitive all in sustaining costs of around $745 per ounce.
And obviously in the prevailing gold price environment, and as well as the prevailing copper price environment. If you look at the fifth bullet point, we're continuing to see meaningful levels of profitability and free cash flow.
Are you seeing some $72 million of positive free cash flow during the quarter and then there's the final bullet point, there again, just given that level of free cash flow.
Our balance sheet continues to be.
On a very strong if not P, leading finishing the quarter with a net cash position of some $823 million U S, which gives us a lot of confidence in terms of our ability to advocate, that's and terrorists business model as a internally fully funded business model moving forward.
So that really.
Concludes my prepared remarks, but just before we open it up to <unk>.
Q&A portion of the call I know that a number of and vet investors and attendees will have a lot of questions regarding <unk>.
We see we want to be forthright about our assessments and our plan, but I'm sure there'll be certain questions that we simply cannot answer given the evolving situation, particularly so as it relates to legal matters, but do rest assured that we will provide further disclosure as and when appropriate but was that Bridget if I can pass it over to you.
Just to conduct the Q&A portion of the coal places.
Very good. Thank you very much we do welcome all questions or comments to register. Please press one four on your telephone you will hear a threet on pump to acknowledge your request. If your question has been answered and you would like to withdraw a registration. Please press one three and.
Again to register questions or comments. Please press one four on your telephone one moment. Please for the first question.
Sure.
And our first question comes from the line of Trevor Turnbull of Scotiabank. Please proceed with your question.
Hi, Scott and thank you for your candid comments at the open on the recent developments and the Turkish Republic.
I know, it's kind of hard to know where to begin given the breadth and the scale of the issues raised by the government and the courts.
I assume that high level discussions with the country or really one place to start and I guess my question is how do you plan to respond.
Aside from potentially seeking arbitration with respect to the government have you requested a meeting with them.
Yeah, Thanks, Trevor on look.
He has been and reaching out and looking to engage with the senior political leadership and country, but there's been no meaningful gauge engagement to date.
Note in my earlier remarks that in terms of the State Commission review that's underway.
We are expecting that that commission review will be finalized this month.
And I think that and itself will be the catalyst.
And those are those discussions to start taking place with the political leadership and country. So.
And it's still a obviously a development thats in progress, but as and when that is finalized I think that'll be the catalysts for those discussions to be embarked on.
Okay.
And then the only other question I guess I have.
And obviously there are some developments pending such as this report, although it's hard to be optimistic about it but given the uncertainty are there any modifications to your capex plans for <unk> at this point or.
Perhaps given further negative developments or how do you.
Do you plan on modifying.
Perhaps the level of investment you're making.
No I mean, when I look at.
Our plan for this year Trevor.
We were adding the additional trucks in terms of expanding our haulage trucking capacity in terms of the fleets. All those additions that are taking place and the final stages as Dan mentioned in his remarks in terms of expanding on Leach circuit as well as installing a tower mill and the mill processing facility. Both of those are underway as we speak.
Our exploration program, it's a 75000 meter program and.
And one quarter of the way through that program.
And so we continue to carry on with each of these items and I guess I do that I guess, we make those decisions philosophically on the premise that we wanted to be a good steward of the asset we want to do what's in the best interest of the mine on the ore body. So we continue to make those investments and I think that also reflects my.
My optimism.
That's you know.
And despite the fact that you know there's a bit of uncertainty and koga stand right. Now I think we sent Terra the organization has proven through time that we usually always find a way to resolve these issues and in a constructive manner and I have to take that as my sort of base case scenario and so I want to make sure that and what.
If we do that come until there's going to be and the best position possible.
And when it gets to the other side of this so a bit of a long answer that true, but just wanted to give you that color.
No that's fine and that's all I had thanks Scott.
Our next question comes from the line of Brian Macarthur of Raymond James. Please proceed with your question.
Hi, Good morning, Scott.
Just one other quick question one on things that talks about there is banking restrictions. So I just wanted to confirm the current $823 million U S sits outside Curtis Dancy of Cookie Republic C. A full <unk>.
Access to that right now and secondly on page 19, Theres also a statement about accounts receivable.
And talking about and additional shipment of gold from cooped or debt.
Came in April so can I assume and fact that balance and if it's true is outside the country is even higher right now is that as that cash has come out to please thank you.
So yes in terms of the $820 million.
Answer is yes, but I'll, let darren speak back to be out and give you the exact numbers and Darren if you can just touch on the April gold ship and place.
Sure Brian So a.
Different order flow.
Received received that gold shipment.
Was recorded in our accounts receivable at the end of March.
And I guess as normal course and chairs retain.
Cash sweeps from all our subsidiaries, including K T C outcome to a subsidiary and we we generally target a cash flow and <unk>.
And then 10 mean and Kurdistan and so.
And so all old old funds and materially outside of the country.
Great. Thank you very much.
Our next question comes from the line of Dalton Barreto of Canaccord. Please proceed with your question.
Thank you good morning, Scott and team.
I want to start by asking.
And here your cookies directors said on all of this and whether they've been.
And they've been part of any more discussions you've had following.
The announcements of Friday, and then as part B of that question.
And if the carriers do you end up taking up on mind, what happens to be at the 26% corporate stake at Carnegie assault and has thank you.
Yeah, Thank those and.
As you can appreciate we just had our board meetings over the last two business days prior to releasing our results and in terms of value discussions and.
Deliberations of the Kogi direct is unfortunately than not.
Within the inner circle, if you will that might be a cultural used the words, but the inner circle when it comes to the State Commission review all the.
And the senior political leadership, so they weren't really in a position to offer us a lot of insight or intelligence over and above what we as an executive management team.
Already have.
That would be the.
And my response to your first question regarding the cookies directives and then your second question with regards to cookies, OTA and shareholding and some tariffs obviously.
Obviously, there's a number of legal responses.
Considering and evaluating right now.
At this stage went on in a position to comment on debt.
Okay Fair enough and then.
Just in terms of your options that are available to you mentioned arbitration.
What other options are available to you.
Use it but is there anything that you want to expand on their own.
Yes, Thanks, Scott and I think I mean, obviously, we mentioned arbitration, we've gone to arbitration and before that's something we're evaluating.
Number of other legal options that we're looking at but but again given that this is evolving pretty quickly and.
And we're not really and are positioned to talk about those unfortunately, I can't really answer that question and I'll provide more color.
Okay No problem and then last question for you Scott.
Just given what's happened and how are you now thinking about capital allocation and M&A just in light of these events as well as your current balance sheet.
Well in terms of capital allocation all of your operations are part of the free cash flowing and we expect that to continue over the course of this year and even over the subsequent years as per our three year guidance. So.
Really a lot of the focus and discussion with the board you know over the past six months has been with regards to possible capital return initiatives.
And what we could potentially be doing there and if there's anything that would potentially be deemed measured and smart and.
That's something we'll evaluate but again you can appreciate there's a bit of uncertainty right now and now sort of boardroom setting when we're strategizing just regards to the uncertainty and koga stat and such and now those sort of the capital return discussions have been put on hold.
And you your Rep you referenced M&A, that's not something that we're primarily focused on right here right now I think as you've seen in prior years, we've always been pretty internally focused just looking to ensure that you know and maximizing the intrinsic asset value of that business and on each of the existing operations and.
And I expect that to continue here.
Moving forward.
Okay. Thank you guys and good luck.
Yeah.
And our next question comes from the line of Fahad Tariq of Credit Suisse. Please proceed with your question.
Hey, Good morning, just one question from me given the dynamics of what's going on right. Now is there any thought on reassessing camass are.
And these studies there.
And any thought around that project.
Yeah, Thanks for HUD debt.
The answer is no.
I think as we've discussed with yourselves and.
Other participants and the investment community previously we did have a strategy session and back in I think it was September of last year that board of directors and.
And we took a long hard look at each of our development projects that we had and the portfolio back then which back then was greenstone and Kemess and we ultimately concluded that based on our long term metal price assumptions, we went and seeing a compelling value.
Value proposition on economic rate of return and we actually concluded that we're going to de prioritize book.
Both of those projects so you've seen obviously that we've already actions.
Our 50% ownership and greenstone ultimately divested of that asset and that closed in January and again with commenced its potentially a similar sort of strategy.
Whereby the board has encouraged us debt.
There are counter parties out there that are.
Debt ascribe more value to commence and then what's potentially embedded day now company.
Company wide valuation and then those are opportunities that we should be exploring any opportunities to surface value of daylight value.
That would be on strategy from us and terrorists perspective and.
Obviously I note that the.
Current copper price environment is particularly strong and you may recall that.
Approximately half of messages revs.
Revenues are actually denominated and copper so.
It's an interesting opportunity right here right now and that's something that we would potentially be pursuing and stay.
Stay tuned and just to see.
What we can do there in terms of potentially.
Highlighting any additional value that commenced.
Okay. Thank you.
And our next question comes from the line of John Tumazos of John Tumazos very independent proceed with your question.
Thank you and.
We all have your.
You have our support and sympathy for this unprecedented situation.
Excuse me if a couple of my questions Mike.
Express frustration.
Situations and governments created there.
First.
Oh.
Don't you think that.
And may 6th actions create irreparable damage and the stock market.
We're even if.
The government begins to behave like hospitable host country.
The stock market is never going on.
Give you a full valuation.
And more gold mining company with a premium valuation two times now or something.
So at this point and damage is done.
And it's not a subtle both situations and you'll have to move on.
Second.
It would appear that.
There is a ready market there is Russia, and China is Turkish Martin and <unk>.
Saudi Arabia, Uzbek state mining company.
And you could have a reasonable.
Auction process.
You get a fraction of the value say half.
To some other countries and might have.
And more understanding of the politics of Kyrgyzstan.
Okay. Thanks.
Thanks, John.
And I take your point.
And as and when and if we find ourselves on the other side of this and you know true constructive dialogue, we're able to we're able to resolve the situation and I think I would I would accept your assertion that you are never going to get full value for control.
These would be what you would get for the asset if it was located and what the market deems to be top tier jurisdictions.
I would probably accept that assertion however come towards the very meaningful asset and as you know we've been investing and the assets and recently on a number of fronts and those investments and certainly paid dividends and the amount of positive free cash flow or the level of profitability that we have realized from cum total year on year out.
It is very meaningful and I think that more than offsets any jurisdictional considerations when it comes to achieve.
Achieving the utmost valuation of the asset.
And I think it's suffice to say, it's also on the best interest and our shareholders that we are going to stick at this and try and resolve this situation because that would certainly be a lot of additional value that you could day light, which is obviously since come out about how share price now companywide valuation since our announcement on Friday.
Second part of your question you know in terms of.
Selling the asset and then moving on as you said.
I don't see that being a realistic scenario right now because.
I think before any third party would even be willing to evaluate the asset and the opportunity you still got to resolve this situation. So I think in terms of our strategy moving forward here, it's going to remain consistent and.
Ted sauce.
By we're looking to engage and meaningful dialogue with the political leadership and we'll look to resolve the situation and.
I think again, that's what's going to be and the best interest of all the shareholders.
So Scott would.
Would you consider and a reasonable.
<unk> Tic to walk down.
The Ontario courts today and.
Alan injunction to cancel their 77 4 million shares and remove their three directors.
And viewers and governments behavior hostile to the shareholders of your company and.
Bear in mind that if you don't.
And there could be an activist shareholder thinks is reasonable.
Yeah look I think as I said earlier and as use of said, we're evaluating all of the various legal and other options that are available to us and.
And that will continue to evaluate that and report back in due course.
Good luck Scott all the best.
Thanks, John.
And our next question comes from the line of Anita Soni of CIBC World markets. Please proceed with your question.
Good morning, guys and let me Echo my comments about our and John's comments about my sympathies on this unfortunate situation. He also asked the same question on can I ask about canceling the shares and fun.
On the cookies Republic, if that was within Europe, and jurisdictional talent to do that and.
And then my and.
So could you give a little bit more clarity do you think that's on is a possibility. If you had to go down that path.
And neither I apologize I'm going to frustrate, you and others, but again, considering all options that are about to us and we'll look to report back on that in due course.
Okay and then on the second question I guess would be.
The total tax Bill right now was it 352 million debt that you guys said on Saturday is there potentially more than that at this stage.
Darren do you and I confirm that please.
Yes, so it's unclear and either the there is the recent press release, we put out.
It covers the same period.
And that the I think the 16th of March press release so.
And we basically just simply combine those two numbers, it's approximately that debt figure, but obviously, we're looking for some more clarity from the government on that on that to see whether it is.
One plus one equals 350 or less than that but that's the total sum.
And as we understand today.
Okay and then just.
A bit of a question on and in terms of government relations I guess as they stand so.
On.
You are reaching out to them to try to to try and talk to them, but can.
Could you give us an idea of how do you feel theres like hostility there that you.
And you might be concerned about.
Essentially keeping your ex pats from the country at this stage right and.
Has that been and.
And that you've considered at this stage.
No I would not.
And not use the word hostile.
Oh hostility.
Excuse me.
It's not there's no hostility I think the challenge we have in terms of the dynamic as the state Commissioner reviews, and the final stages of their review and as.
And I mentioned earlier, we expect that review to be finalized here in the month of May and I think until that review until that metaphorical document is on the table.
I don't think it's possible for us to engage with the cookies Republic in terms of the political leadership, but once that document is on the table and available I think that will serve as the catalyst hopefully for engagement to begin.
And.
And has there historically been a good separation between the.
And the political and the judiciary.
It's difficult to meet me, it's difficult for me to answer and I'll kind of answer that.
Okay, all right I'll leave it there thank you.
And as a final reminder for questions. Please press one for our next question comes from the line of Mike Jalan and <unk> of Bank of America. Please proceed with your question.
Oh, Hi, Scott.
Just start off actually because all the way from Kantar I'm intrigued by the life of mine updates on Oxford, and Mount Milligan and just wondering one there'll be earliest stand.
What the Hell and tail it sounds like these can be positive developments for sentara.
<unk>.
Yeah. Thanks, Mike.
And did you wanted to speak to that just in terms of the latest update on timing and what have you.
Certainly Ken Scott Thank you.
Let's start on no Milligan at Mount Milligan, and we've had some very good.
Changes in our drivers of a life of mine with excellent cost control, the last year and a half and.
And we've had some productivity improvements and our mill et cetera, as well as some brownfields exploration. So we are updating our that debt life of mine and we should have the results of that in early to late in the third quarter early fourth quarter.
And updating a 43 one on one with that.
<unk> suite now that we understand the operation and better and we understand our.
The whole dynamics. There. We are we were also updating that along with the exploration drilling results and again, we should have the results of the completed by the fourth quarter.
Oh, that's good.
Good news Oh, okay. Thanks for that and I look forward to our trip to Mount Milligan mine and I've never visits.
Thanks.
And expert.
Yeah.
And our next question comes from the line of Mike Parkin of National Bank. Please proceed with your question.
Hey, guys. Thanks for taking my question I guess, it's pretty early but in terms of some of your suppliers with respect to Q2 or are you seeing and each kind of changes in terms of payment and thank you, Sir and need to pay first before deliveries made or is it too early to kind of see any changes on that front.
And do you Wanna comment please.
And happy to.
Hmm.
That's true okay.
Right No no I think we had we have a robust inventory at coombe toward due to its distances from a number of our large suppliers and during COVID-19. We we deliberately took a good look at our inventory supplies. So we're very comfortable right now.
We have had our talks with a couple of large suppliers.
They also have employees and country et cetera, but we are we have great support of our international and national suppliers. So at this point and time.
And there hasnt really been any any change in that respect.
And can you just.
Right over there that's completely owner operated and none of it's leased.
And that is correct.
Okay. Thanks, that's it from me guys. Thanks very much.
Yes.
Thank you and our final question comes from the line of Frederico Riccio of Helicon.
Please proceed with your clients channel.
Hello, Hi, I just had one question on OXXO, one question on OXXO and I saw.
Basically the production number for Q1 were kind of stronger if you compare the two.
5% production that they think you would expecting in each one that went to 21 over the full year guidance of Oh.
2021 so let's.
Let's see Q2 going to be very weak here or should we expect that that's probably Oxford should probably your better performance.
Let's see.
And if you feel better performing to beat your expectation this year.
Yeah, Hi, Frederica and thanks for the question, but you are correct. When we issued our guidance for the calendar year, we were guiding that the first six months of this year at offset will represent around 35 per cent of the annual.
Gold production level.
Outperformance in Q1 was a slightly better slightly stronger than what we were expecting or what was implicit in terms of our guidance.
In Q2, it will be a weaker quarter, which is just due to a lower grade mining.
Mining production profile that we've been going through and.
So in terms of the first six months of this year I still think.
It's going to be.
It comfortably it'll represent 35% of the annual total it could be as high as 40% So I'm sorry.
And so yeah, just to round out the answer again and I do think the second quarter will be lower than what we produced in Q1, but I think the first six months of this year will represent 35% to 40% of the annual total.
Okay. Thank you very much.
Thank you and that does conclude the question and answer session portion of today's call panelists I'll now turn the call back to you. Please continue.
Okay, well. Thank you everyone for your participation again, we again, we all hope you're safe and well and we'll be looking to update everyone. Accordingly, as we move forward here in terms of our ongoing disclosure, but thank you everyone for your participation.
And that does conclude today's presentation. We do thank you for your participation and ask that you. Please disconnect. Your lines have a great rest of the day everyone.
Thanks.
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Okay.
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And.
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On.
Uh huh.
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