Q4 2021 SSR Mining Inc Earnings Call
Hello, everyone and welcome to SSR Mining's fourth quarter 2021 conference call. This call is being recorded.
At this time for opening remarks, and introductions I would like to turn the conference call over to Alex and check from SSR mining.
Thank you operator, and Hello, everyone. Thank you for joining us as our mining fourth quarter 2021 conference call during which we will provide an update on our business and a review of our financial performance.
Beginning with the fourth quarter and annual 2021 financial result, our consolidated financial statements have been presented in accordance with U S. GAAP.
These statements along with the comparative restated financial statements for the two years prior have been filed on Edgar and SEDAR. The a S X and are also available on our website.
To accompany our call. There is an online webcast and you will find the information to access the webcast in our news release relating to this call.
Please note that all figures discussed during the call are in U S dollars unless otherwise indicated.
Today's discussion will include forward looking statements. So please read the disclosures in the relevant documents.
Joining us on the call today are rod Antal, President and CEO .
Alison White, CFO and Stewart Beckman C O M.
Now I would like to turn the call over to Rod for opening remarks.
Thanks, Alex and Hello to everyone and thanks for joining Us Tonight.
We're going to take time as there is a lot of positive information they were excited to share with you Tonight.
The highlights include.
Firstly a record production.
The cost and significant free cash flow generation.
Second substantial organic growth opportunities within our portfolio.
Leave it at four 8% increase to our reserves, which is actually a nominal success.
The publishing technical reports, which lay out an incredibly positive 700000 ounce of your baseline for our business and finally, our upcoming execution plans for the near term growth opportunities, which represent some of the highest returning projects in that sector.
So first starting off with outperformance.
2021, which was apples, so SG postpaid, yet, allowing us to showcase the quality and resilience of our globally diversified asset base.
Leave it nearly 800000 ounces of production at the top end of that guidance range, while our all in sustaining costs were $955 an ounce PDR previously lowered once the study costs got it back.
The in place should retrench.
These results were a testament to our exceptional operational performance and proactive supply chain management and that outperformance resulted a P. Late in 2021 free cash flow generation of $444 million or a 12% yield.
As we had committed to our shareholders as free cash flow has translated directly to capital returns and we distributed nearly $200 million to shareholders last year or about a 5% yield.
Given the robust outlook for free cash flow generation for years to come.
We continued to deliver against our capital allocation strategy.
And the recently announced 40% by Steven and inquiries he is evidenced that our commitments.
Second and in addition to our full year results relates to our updated resource and reserve statements that are included in a crazy preserved growth at four 8% or $1 1 million ounces year over year.
This is was a direct result of our successful resource to reserve conversion it's always.
Cottage and seafood gap hanging wall.
This achievement is even more remarkable given the cutoff for the technical reports did not give us the opportunity to me.
Incorporate much of the drilling that occurred last year.
We now sit with added 10 million ounces.
Reserves with a weighted average mine life in excess of 17 years.
And of course by Chip lows 22, plus in your bylaws.
But as part of our transition to becoming an ACC issuer, we're obligated to issue <unk> hundred Technical report summaries, it's all four of our operating assets.
As I mentioned, while the timing was not ideal even much of the positive drilling results for 2021, even though it might get into the update we're excited by the outcome of the new production base, well I'm sure HSR.
Together the geotechnical reports have added more than two and a half a million ounces of gold production.
It was represented in the previous iterations.
This made our vision to sustain our production base at 700000 ounces gold production for at least the next decade, it's just become a reality.
Finally on this point, we're excited by the prospects of improving this even further from the drill bit.
But both of them is in respect to air upcoming growth projects.
As part of the chair of the Technical report update we showcased both the maiden reserves and development plan to check back type of extension or outage.
And initial resource and development plan at Jetblue copper Gold project, we'll see too.
This report highlighted how the abundant growth opportunities a chip like could significantly add value and deliver a high return low capital intensity projects.
But the outage AMC two will add at least 1 million ounces of production to modest capital investments.
Stay tuned for example would provide us with 1 million ounces of production and significant initial iteration for about $220 million of capital in an impressive IRR of 60%.
At age will deliver one 2 million ounces for about $17 million of capital.
Overall, we had a fantastic results across the board during 2021.
Just moving on to slide four which is the ESG and I want to reiterate our commitment to our ESG priorities and initiatives.
Before we do I want to take a minute to reflect on the sad loss of one of our team members in Argentina.
On January 26, Molina as dry dock passed away when the vacancy was traveling game was washed off the river crossing all highway 70, well on Hawaii.
<unk> sorry.
The three other occupants of the vehicle where rescue.
Sadly Molina was not.
Actions were taken to prevent a repeat incident and to support a family and those who have been affected.
Afterwards path and continue to pay with their family.
<unk> and work colleagues.
<unk> has long been a core value and focus for SSR mining as a tool that really underpins the success of our business.
We are committed to the communities entered the environment and we continue to deliver against their priorities outlined in our 2020 sustainability report.
We will review review and refresh size priorities as we move into 2022 and are finalizing an updated sustainability report very late in the coming months.
Importantly, we continued to walk work towards their commitment to an action plan for achieving net zero greenhouse gas emissions by 2050.
We take this commitment and as path forward seriously and are baking it into our project development cycle, ensuring the longevity and quality of our assets.
Additionally, we have already started to enhance our disclosures on climate and water and disclosed for the first time to the carbon disclosure project.
We are proud of our efforts to improve our approach to ESG and will continue to evolve as a sustainable business in the future.
Moving onto the next slide and our performance highlights.
Just want to highlight a few that are relevant to consider for the quarter.
Operationally, we had another strong quarter with more than 210000.
Chances of production and all in sustaining costs at $961 per ounce.
We delivered adjusted EPS of <unk> 46 cents in the quarter.
Robust margins and low cost production translated to a $149 million in free cash flow and $444 million for the full year.
After $191 million in capital returns and our continued debt repayments, we maintained a net cash position cash position of $691 million providing.
Providing us with the required flexibility to advance our large organic pipeline, while delivering continued capital returns in the future.
We highlighted our growth portfolio with a number of positive exploration updates across the business and we continue our successful track record in accretive and strategic M&A transactions.
We increased our presence in core jurisdictions, including the announcement with the acquisition of target goals in Saskatchewan.
And an increase in our ownership in the company, who will prospect in Turkey.
Additionally, our portfolio rationalization continued and we realized over $235 million in total consideration through the sale of non core assets, including our royalty portfolio and the recently announced sale of Peter area project in Mexico.
Moving on to the next slide.
Yes.
As you look to 2022, it's worth highlighting Eric Tracy track record of growth and execution.
In January we really see an overall three year guidance that shows a strong production platform, where we expect to produce over 700000 gold equivalent ounces annually through 2022.
This is a level that we believe we can maintain over the longer time horizon, given the wealth of exploration and growth opportunities, which Jim will discuss in greater detail and is supported by the suite and new technical reports, we released today.
Moving on to our outlook for 2022.
Well I'll, let some of the priorities for the business this year.
We expect a stable production base and cost profile will allow us to generate significant free cash flow, while continuing to return capital to shareholders through our increased base dividend and share buybacks.
As announced last month, our portfolio rationalization progress with the sale of <unk> and we continue to evaluate other opportunities to surface value within the portfolio.
We've now completed the SEC transition, including a new technical report to showcase a baseline production platform and.
We have budgeted at 45% increase in year over year exploration stage to further accelerate some of the growth opportunities.
And on the cost front, we will continue with our continuous improvement efforts and supply chain management initiatives in order to limit the escalating impact of inflation.
At the asset level, we continue to invest across the business in several high growth opportunities.
Opportunities, including breaking granted outage later this year and advancing the <unk> III project towards pre feasibility study and ultimately tagging targeting first production in 2025.
Overall, we're fortunate position with a plethora of exciting growth opportunities underway. They don't have the horizon.
As we look to improve even further the new baseline production price all tied into the ice technical reports.
So a couple of highlights on the SK <unk> eight hundreds.
And we recognize there's a lot of information in the technical report to Digest. So I'll summarize some of the high level details here. It's just got to elaborate further in a few minutes.
To start.
We are proud to showcase at the 48% year on year increase in gold mineral reserves, driven by maiden mineral reserve, an outage and CB <unk> gap hanging wall conversion.
Our current total gold reserves are down more than 9 million ounces.
While gold equivalent reserves increases to 10 million ounces.
With respect to the technical reports, it's important to note that these documents were requirement of the SEC are all FCC issues other than U S cases at 800 regulations.
We had expected to relates to new master plans at Jetblue around these top line a lot of the exploration and study work at Seabee and Marigold in particular was not yet advanced to a level to be included in these take reports.
At <unk>, we have released production scenarios with both the reserve case mine plan as well as an initial assessment of the <unk> project, which is similar to the PPA case for those used to the settlement.
The reserve case incorporates maiden reserves from outage delivering a 21 year mine life with a total production with four 4 million ounces of gold.
This represents a 37% increase in life of mine production as compared to the C. D and page 20 Reserve case, driven bought IH, which adds one simulated ounces total production starting in 2023 that just $69 million in development Capex.
Okay.
On top of the reserve case, the initial assessment case outlines the potential development of the <unk> project.
This new resource provides us the opportunity to further increase and extend the production, perhaps halt by adding a copper concentrate it to the existing flush rates.
Unlocking additional gold production from sulfide material.
The initial assessment guys showcases an overall $5 4 million ounces gold production protocol with average production of 300000 ounces per year in the first 10 years.
The total capex of about $220 million. These production scenario drives a strong overall after tax NPV at $2 billion.
And an internal rate of return of around 60%.
Which I'm sure you will understand a stunning returns.
At Marigold the life of mine planning includes two 5 million ounces and total gold production.
An 11 year bond launch.
We see optimize opportunities to optimize the production profile in the nature from targets like new millennium as well as the potential further upside by cooperating exploration success at Buffalo Valley and Trenton Canyon.
At Seabee, the mineral reserve production profile resulted a cte monologue.
In 2021 mineral reserves increased eight 8% year over year, driven by the conversion of the gap hanging wall and we see further opportunities to add additional reserves along strike current mine development to complement and extend and future production profiles.
At <unk>, we take report reflects the recent outperformance at the mine including throughput.
Plus four 4500 tonnes per day.
We are ramping up exploration activities with opportunities to complement the existing production protocol to E&P drilling and targeting other brownfield opportunities.
And finally, the key message is the combined technical reports establish a baseline production platform, where we see clear opportunity to live a plus 700000 ounces of gold.
Equivalent production annually through 2020.
However, we're not done yet and with the abundant growth targets in all full operations progressing we're excited about.
The ability to build on this incredible results today.
So with that I'm going to turn the call over to Allison who's going to discuss the financial performance more on <unk>.
Slide number nine.
Thanks, Scott and Hello, everyone. It's incredibly exciting to comment on another positive financial quarter for the business as shown on slide nine.
I'd like to pass the slide with the asset.
First time SSRI recorded results under U S GAAP, which is the basis of the accounting for the numbers down here.
Also wanted to take a minute to thank our team members for what was a major undertaking over the last month.
As an incredible effort across the business.
Almost every function in the company. So again, that's where we are today.
For the first time, I think SEC large accelerated filer.
As we take our first look at the U S. GAAP results Q4 was another solid quarter operationally for the company.
Produced over 211000 gold equivalent ounces.
Gold equivalent sales of over 218000 ounces for a total of $408 million in revenue for Q4, bringing total.
In total 2021 revenue of a $1 four a barrel.
Attributable net income for the quarter was 127 million <unk> 68 per basic share and adjusted attributable net income was 98 million or 46.
Our basic share.
For the full year attributable net income was $368 million or $1 <unk> per share and adjusted attributable net income was $402 million or one.
$1 86 per share.
As Rob highlighted we continue to deliver in all aspects of our business and are proud of the cash flow and returns that are generated as a result, including $609 million in operating cash flow and $444 million and free cash flow during 2021.
So a peer leading.
12% free cash flow yield.
On the right side of the slide I'd like to provide you a commentary on a reported 46%.
And adjusted earnings per share that are calculated based on the company's definition of adjusted attributable net income per share.
We start with our attributable net income up 50 cents per share and then make adjustments exclude the after tax impact.
Items that are not reflective of the company's ongoing operations.
Each of those items as outlined in the waterfall chart on the right in this slide with the largest of the adjustment for 2008.
Primarily related to the renewable on the FX impact on non monetary assets for the purchase price adjustment recorded as a result of the Atlas Air transaction.
We will get into more details of this on the next slide is it the new adjustment as a result of the U S GAAP conversion.
The remaining material adjustment is when you've seen before for 2014.
Due to the fair value adjustment for inventory at sharp layer.
This adjustment will not continue in 2022.
The smaller adjustments agricultural related costs, other tax impact and transaction or integration expenses.
Turning to slide 10, we can talk about Ssris SEC transition.
Effective as of January one 2020, Q SSR mining transition to U S. GAAP reporting as a large accelerated filer under the SEC.
As a result, our for our full year 2021 financial results were released under U S. GAAP and were reported along with restated 2019, and 2020 financial results.
On this slide excuse me.
We have highlighted some of the more material changes to our financial reporting as a result of the U S GAAP transition.
As we have spoken about previously our underlying business remains the same.
So the accounting has changed and overall despite performing a very thorough analysis of the detail underlying the business that make up our financial position and evaluating the accounting positions necessary to complete the transition we only have a few material adjustments to highlight.
A few key points to consider that are also listed on this slide.
First the equity component of convertible debt is reclassified from equity to debt and an amortized under U S. GAAP.
Under U S. GAAP changes in the fair value of marketable securities are reclassified from other comprehensive income to net income.
This is adjusted out of adjusted attributable net income.
Our reclamation and closure cost assets and liabilities have been updated to reflect the use of the company's specific discount rate under U S. GAAP and the concept of trying to Larry required to complete this accounting analysis.
This results in lower liability lower depreciation of the asset retirement asset, but higher appreciation accretion expense.
The net impact to the income statements for the higher accretion and lower depreciation is not expected to be material.
U S. GAAP does not allow for the write off of impaired assets.
Prior to 2019 under Ifr at the Pirquitas mill at Kona.
That had previously been impaired with written up <unk> presented an opportunity to extend the mills operating life.
This subsequent write ups has been reimbursed under U S GAAP to reflect the original impairment.
U S. GAAP also removes foreign exchange impact on deferred taxes.
However, under U S GAAP when the functional currency.
Such as the U S dollar is not the local currency.
The lira in Turkey re measurement of non monetary assets and liabilities is required for.
For example, purchase price accounting for mineral properties and equipment of approximately $1 2 billion, which was the adjustment created at the time of the Alistair acquisition is considered a non monetary asset that is re measures, resulting in a book basis deferred tax liability that will never be deducted for tax purposes.
This item is adjusted out of the adjusted attributable net income as it is only about the entry for foreign exchange on non monetary assets.
Deferred stripping is no longer capitalized and instead is expense through production costs, which increases cash card and host ASC relatively steady depending on gold prices and the total inventory value.
Finally based on the U S. GAAP conversion, we renewed the GAAP related impact attributable to the 20% noncontrolling interests in Turkey.
Overall, the changes associated with U S. GAAP regulations do not impact our underlying business.
Outside of deferred stripping are largely immaterial with respect to analysts' estimates and forecasts.
On slide 11, we can talk about Ssris continued balance sheet strength.
At the end of 2021.
The company had cash and cash equivalent balance of over $1 billion. After returning over $191 million to shareholders and 70 million in debt repayments that occurred during 2021.
96% of that cash balance is held in U S dollars.
We remain well positioned to continue our capital allocation policy going forward.
Fully funding our portfolio focused on additional exploration spend and growth opportunities that align with our equipment.
We continue to maintain our peer leading net cash debt EBITDA ratio of one one.
And the magnitude of our capital returns is best illustrated on slide 12.
We've returned more than $190 million to shareholders through the inaugural 2021 share repurchase program and our base dividend payment in 2021, yielding capital return of more than 5%.
As we have noted our continued operational outperformance translated into robust cash flows in 2021, and we clearly aligned that free cash flow performance with our capital return initiatives.
With our inaugural three year guidance announced in January we illustrated a strong production profile, our board declared a dividend, which increased our base dividend by 40% to <unk> 28 per share annually, furthering our commitment or significant capital returns to our shareholders.
As we continue through 2022 and look beyond our capital allocation priorities remain.
Investing in growth maintaining balance sheet strength and returning cash to shareholders.
We will continue to be disciplined when executing on our priority both financially and operationally as we move through 2022.
And now I'm going to turn it over to steel for an operational update.
Thank you very much Alison.
Before I dive into the detail, let me just comment on a composite production profile from the technical reports on slide 13.
This is just the next step and a great foundation for us to leverage strong.
Remember that this slide includes situ, but does not include any production outside from our extensive Sydney and Melbourne and in mine exploration portfolio.
This year, we've made a considerable commitment to increase our organic growth spend to make sure that we can define and show what we believe to be a much longer strong that future production profile.
Sure My positivity with you as we work through the slides for each of the properties lets start the discussion with chip or on slide 14.
We started building the chair for the district Master plans, a number of years ago to help direct and focused strategic mine development Republish Cgmp 20 in November 2020 outlining outage at <unk>.
With an intent to convert it to a feasibility level of reserves in the following years Technical report.
As promised and this year <unk> 'twenty one report at.
Which added one 6 million ounces of reserves and $1 2 million ounces to our production protocol, which was even better than the case that we laid out in the P. I.
The production and development group and the chair for team has been busy with permitting and preparations and we plan to start work on the ground. Later this year the cost of the project is very low limited to infrastructure work and expansion of the chip a heap leach the aura outage will be trucked to chip with the treatment.
We are still exploring a outage and it is still open.
The ongoing drilling we expect that the results and reserve will continue to grow. We also have some <unk> and studies underway on how do we extract more value from the deposit flow improving recoveries. So there is still more value to the expected to come from outage.
Additional to the successive outage, we have showcase an initial assessment or P&I case with a first look at the next development of the chip.
Positive.
The two projects.
I'll just take a minute to describe the <unk> II project.
<unk> has a large amount of copper in the deposit flows in and surrounding the resource and reserves.
In the past this copper was assigned to little or no economic value.
Some successful drilling and metallurgical test work, we changed the paradigm and reload at the moment, assuming that we can leverage value from the Copa <unk>.
The outcome of this study was the highly accretive.
Food project outlined in the initial assessment case.
And the initial assessment case, we add a small one.
8 million ton per annum copper concentrate to chip.
This will make both our gold rich copper concentrate to sale to the smelters and the gold rich pyrite concentrate which we will use as supplemental Q and Gulf state into the order clouds.
We're also adding a corporate recovery within the sulfide plant that will make a copper concentrates decile.
I think the copper concentrate and sulfide copper recovery circuit has two big impacts the first and really obvious one.
Is it a nice direct value from the copper and gold recovered from the goal coal pump the copper gold or.
Copper concentrates and secondly, the extra value from the Cobra allows us to make a much bigger pit as we dig this big a pit we uncover a lot more sulphide and oxide gold or to say the existing oxide and sulfide Gulf clients, giving a longer life and hog production of some of these plants.
The <unk> III project is being accelerated interest feasibility study, we expect to leverage more value out of the project as we optimize the metallurgy and demand scheduling.
<unk> is a fantastic asset and in addition to average and see two upside outlined in the technical report Jesper on the chip with district has a number of exciting and active exploration targets.
Let's skip to Marigold on slide 15.
Given the accelerated following of the technical support the recently announced exploration results at Marigold.
Not ready for inclusion.
<unk> still delivered a strong base technical report with a couple of coin you'd features as we mine out the existing hydride areas. There is a decent production, especially in about 2026 and 27 before red Dot comes into production with a big jump in production in 2020.
Should the recent and ongoing exploration you saw in our December release designed that filling the production 2024 through 2027, especially the Nemo and exploration within the existing plan of operation in the current application to extend broadly including much shelf the new millennium.
Operations.
In the longer term, we have extensive targets at marigold, excluding Trenton Canyon, and Buffalo Valley, which we do have some historic.
<unk>, which may make them easier to accelerate most of our exploration is focused on delivering hydride oxide ores, which provides the lowest cost easiest development pathways. However, we have had some really interesting sulfide intercepts at Marigold. For example was recently a trend.
Canyon and hydro Hot causes this on a potential for significant sulfide deposits given this potential and the company's skill set with building clients ensure treating refractory Sophie cause we do mind times, some exploration effort on the sulfide ore targets.
This year, we will see significant increase in funding for exploration and resources at Marigold, Oh about 20%. Please move to slide 16, and we will discuss CBD.
A couple of key takeaways from the technical report it more than doubled velocity C. D. We had record production in 2021 of 119000 ounces at Seabee and are budgeting for 'twenty, two 'twenty three to be successive record years.
Both of these years will be over 120000 kilo ounces.
120000 ounces than your normal for Seabee.
While the technical report schedules the production to drop off in <unk> 24, and on we expect to add higher grade ore from essentially <unk> and not the current source of high grade ore to the production profile in the latter years essentially non for example delivered some wonderful absolute production surprises in 2010.
One continuing into this year as a great reminder of the potential for in mine exploration.
We are increasing exploration and resource development drilling at Seabee Blah blah blah than 'twenty just to make sure that we maintain the current production profile at this new normal.
Additionally, we have managed to achieve good production performance improvements at C D and a biking those into the plan.
Even with those improvements we still have excess capacity at the mill, which we can take advantage of them, but building production rights in the mine. So the operation is well positioned to leverage up production on the back of exploration success in the mine and at very little cost.
Outside of the exited mining area. The <unk> district has a spectacular endowment of exploration targets at various stages of evaluation.
We have a multi year exploration strategy that incorporates the Tiger holdings. Our focus is primarily on Nemo and low cost development with a modest spend is still going to generative and targeted valuation.
One area that is bubbling to the top of our list right now is the shine target, which sits just off the haulage road.
Close to the see the plan you will hear more about shine through the year.
Please move to slide nine and I'll give a brief update on fair enough.
<unk> delivered a solid base technical report, which assumes the recently demonstrated improved milk assault performance at 4500 tonnes per day.
In 2020, while we were busy it tuna revisiting the exploration database, some extensive fill geotechnical geochemical sampling and re logging and reacting.
Saying that some of the historic drill cores.
We have some very good targets and we'll start drill testing imminently first within and adjacent to the <unk> pit. We think that there is good opportunity for expansion of the results and we'll start drilling soon after.
After reassessing some of the quota Doris drill call, we had some hypothesis on potential extension of the deposit and value.
As we deplete assembly well pit.
We are seeing Gulf starting to develop at depth. In addition to the silver and zinc. The geos are busy developing a drill program that cultural extension and value proposition. We also had some regional targets that came from last year's work and we will put some effort into developing these as well please.
Please move to slide eight for clients.
<unk> has a very high quality and extensive exploration portfolio, which we are aiming to leverage value in a structured manner as we need with the chair for district Master plan, we are strengthening strategic mine planning and chartering cost wise to a growing and long term production profile.
In closing 2021 was a great year for the operations and development change. So this is we.
We care for our communities and teammates through another tough year of the pandemic we.
We delivered improved ESG performance more than having a total record recordable injury frequency rate and improves our ESG reporting which was recognized by improved ESG ratings.
The result, as always from this improved ESG and operational discipline.
This better production performance.
Better production performance and in 2021, we deliver at the top end of guidance and emerge a year on the back of a lot of work bucked the industry trend and managed to keep the cost down below guidance.
Our results in reserves and delivered a number of highly accretive projects. So the business, which you can see showcased in our technical reports.
We have a great team great exploration portfolio, you can see on this slide and a solid base, which we will continue to develop and leverage value from.
With that ill turn the call back to Rob for his closing remarks.
Well, thanks to you and and Allison definitely love to get through today.
To summarize 2021 with a year of outperformance for us.
<unk>.
With respect to our operating results.
Our free cash flow generation.
Capital returns.
Cause the outstanding results from growth.
You did nice technical reports, we have now delivered a robust.
Iceland production protocol with a clear opportunity to sustain about 700000 ounces production.
Probably fall into the next decade, we will continue to build on that base in the knee and medium term.
2022 will be another year of strength for our business, including continuous continued robust capital returns and free cash flow generation.
With a robust portfolio of organic growth opportunities, we expect our expanded exploration budget to help further identified and delineate and even broader future.
That we've outlined today.
So with that I'm going to.
Pass the call back to Guy waiting to take any questions you may have.
Thank you Mr. Han Kim we will now begin the question and answer session.
In the question queue, you May Press Star then one on your telephone keypad.
Youre, telling me acknowledging your request.
Using a speakerphone please pick up your handset before pressing in Q.
To withdraw your question. Please press Star then two.
Our first question is from Tyler Langton with JP Morgan. Please go ahead.
Yeah, good evening a write.
Right after and Steve. Thanks for taking my question I guess, just maybe just to start I guess.
Choke bear fruit for art I think you kind of talking about production starting in 2023 could you just.
To provide a little more info on sort of.
Eastern permits or other items to kind of you know to hit that production date, and then with C. To I think you said the next step with maybe a PFS and I'm just kind of wondering you know sort of the timing.
Thank you for that.
Yeah sure.
So I'll answer that so we've.
We've been pivoting.
Pivoting outage for some time.
And you May remember if you've been.
On some of these calls about half of outage was covered by the checkmark Pippa, Eli I, which is why in all the documentation and Youll see it called the checkpoints type of extension.
So the application for the extension for Checkbox. They pay the first stage of jackpot for the startup piece easy in process and we were expecting to see that come out in the next couple of months and then we'll have a number of like two things that come on the back of that.
At this stage.
We see our way to having those permitted to allow us to start work in the fourth quarter of this year.
And then progressing in line with what you see in the technical report.
As always we are pivoting, there's a series of subsequent payments that come about.
We are riding the scope of work for the for the.
The feasibility study for <unk> now, we do have work, obviously ongoing but it came out of the order of magnitude scoping study work that we were doing through last year that's ongoing.
And we're at the stage now we did use the same code to do the capital cost estimates and we factored those based on the numbers that we had from.
From the recent construction of both the float plant and the CDC pre plant. So we think that we've got pretty pretty solid numbers, there and we're at the stage now for much more detailed scheduling and engineering work, which we expect to have approved.
At the beginning of April .
Stop working directly after that.
Okay. That's helpful. Thanks, and then I guess just on sort of capital returns right I mean, I know the dividend.
Recently, the increase in the dividend just any thoughts on buybacks and then obviously last year you had a a fair number of noncore asset sales is there anything else.
That you're potentially looking at or do you kind of domestic mostly what you wanted to.
I'll I'll I'll answer the second part call. It I'll, let Alison answered the first question so from.
From the portfolio review process is still ongoing and no.
We are looking within just to make sure.
Theres, obviously, the obvious targets that you could you could ask about Lac St. Louis and others, but we're also taking that same discipline across the exploration portfolio. So where are we land rich we have a lot of we have a lot of land around our asset bases and we sort of continue to churn through that well.
The the hypothesis why not have lived out in terms of our exploration efforts in Wiltshire Sundar and.
And replace size as well.
And we will continue its normal course business for us.
Is as 2022 rolls on but we did do a heavy lift in 'twenty. One so yeah I'll take the sort of larger scale opportunities, so I'm pretty much right down there.
And Tyler I'll answer the first part of that on the share buyback plan.
You may recall earlier in 2021, we announced.
I plan to be able to repurchase 10 million shares.
We still have about one 2 million shares outstanding on that plan and our intention is to execute against it.
It would be accretive to do so and so we will take a look at.
What's that.
Would that valuation constitutes and act accordingly.
Great. Thanks, so much.
Thank you. The next question is from Cosmos <unk> with CIBC.
CIBC. Please go ahead.
Thanks, Roger and team.
My first question is on sure pillar and the growth.
Growth potential here.
You know as we've talked about.
The copper.
Rich Moore will allow you to open up the pet how much of that you know potentially additional sulfide and oxide material.
Have you included in your technical report today.
So at Cosmo.
Well all of the material that's more that's that's above the cutoff grade.
We're feeding to the plants when we made the larger pit.
These included three to the planet so that.
The value.
I'll cede to load the corporate drove.
As to be able to make the biggest hit most of the value comes from gold.
And in fact.
The concentrate that we make from the from the concentrate to bronze as it runs about.
About two ounces so it's predominantly adult constant right.
As far as value guys.
Great and then I think.
Yeah, sorry, I was thinking.
Hey, guys culture.
Hey.
Yeah, No I just wanted to follow up on the on the Capex here, you know $218 million a seat to you know you have a very good track record in terms of delivering on budget and on time. So I'm just wondering how much you know inflation have you factored into your <unk>.
Capex estimates do you kind of touched on it but I just wanted to get.
You get a bit more granularity on that in terms of.
How have you factored that in there has also been volatility in the Turkish Lira, you know how have you accounted for that potential risk as you come up with these cap.
Capex numbers.
Yeah. So remember this is our this is our initial assessment.
Of course that so the estimates sort of a plus or minus 60% estimate.
However, I would say we've got a pretty good handle on what the closer we just finished building the.
Flotation plant so.
Concrete steel costs.
Particularly those which we can source locally in Turkey, it's a very cost to price to build things.
We did have as I say, the cinco supported us with the engineering work.
And then we factored that with good factory numbers, so as far as the nice thing that goes it's a it's a good estimate really solid estimate for a project at this stage.
But we do have a lot of work to do and I think there's actually quite a lot of opportunity.
Up for what we end up with ultimately in the plant.
And how we might be able to liberate value out of it.
Going forward.
We've been looking at whether or not.
We would be.
Get a significant advantage by bringing out a true and some of the hard ride outage was the oxide awards and treating those through the sulphide client Arthur just grinding ore.
Well many of them with so far to increase recoveries.
And liberty quite a lot of value out of that but that's quite a large.
The exercise and scheduling which will happen subsequent to this piece of work.
I think well I think theres a lot more to come from it yet cosmos.
Yeah, that's a it's great that you brought it up because.
Is that kind of connects well into my next question in terms of you know leveraging the infrastructure of the copper concentrate and as you mentioned you increased your ownership of Capri Hill you know.
Things like that is that was that taken into consideration as well could you leverage that.
Later on down the road in terms of some of these other sort of copper richer areas.
Uh huh.
No you know there'll be some synergies from the business of course, but the distance between the operations.
He's going to preclude us sort of moving any of the material around and with copper Hill, what we see at coffee Hill is very clean chop a colorado.
Really just chocolate Colorado.
And it's close to the cost and it's actually very close to the smelter.
So I will leave it there.
<unk> was also blessed with sort of amazing infrastructure as well so.
Remember when you were there we have a mile wide directly underneath them all in.
You throw out extra the hydroelectric power stations.
On the other side of the hallway say as far as the infrastructure for building a building a.
A couple of concentrate it could be in a better place.
A little bit more flat ground would've been handicapped.
That's for.
Uh huh.
Maybe moving on to Marigold.
As you mentioned today's technical report was really just a base case you know just based on reserves could you remind US you know as you showed on the map there was quite a few targets you know millennium Buffalo Valley Trenton Canyon bombing them just to name a few.
What's been included in this base case, and what can we expect in terms of what's being included and they I believe another technical report will be coming out later on this year.
So pretty much pretty much the reserves as like wherever the OLED remind.
At at.
Marigold, so just the existing deposits.
The areas that we're looking to leverage going forward other areas around the existing pits.
Remember.
We also have an application in for an extension to Bali.
That extension to Bobby was done at a much larger pit show with regards to the application. So it takes in pretty much all of the new millennium.
And that will pretty much might change that.
So we're busy.
Focusing on drilling out that area.
So that in the next year or so will be able to include that into the reserve and then show that value and fill that gap.
In the production profile before we get to.
C B.
Don't see big Red Dog [laughter], maybe one last question just a follow up here I read in the MD&A that there's the potential for a separate infrastructure for Buffalo Valley in Trenton Canyon, maybe could you elaborate on that is that just you know just getting it to a bigger size or what have you.
Alluding to potentially for the Sulphides.
You know could you elaborate a little bit.
Yeah, well one of the opportunities that come up to really drive some efficiency.
And maybe.
Some significant rescheduling at Marigold would be to build a.
I hate fleets at the southern end of the property with a counterpart with the current pizza.
It reduced the hole.
And then be able to use that all sorts of Buffalo Valley.
And also to the southern pits from from the existing Marigold deposits and then we would take the Calvert from there and then take it up to the existing desorption circuit.
So we're just running through that at the moment, but we think that we bought the album squeeze some real value out of the out of Marigold by doing that but we haven't done enough work yet to really wrap your arms around what it might be worth it.
Great, Thanks, stew, and Rod and team and once again and are looking.
Looking forward to all these different growth opportunities.
Because next call but.
The next question is from Jorge Habib with Scotia Bank. Please go ahead.
Thanks, Operator, Hi, Robin this is our team and congrats on a strong quarter and really thanks for upgrading all the mine plans with Olympic sport strategy, where it needs to be.
Most of my questions have been answered, but maybe a bit of a follow up question from.
Last question to ask my Cosmos.
Hum.
In regards to the Tech reports released to be pointed out that these are our base case scenarios and did not include drilling that took place in 2021 now based on the info on hand, and your exploration teams expectations with operating as a do you see the most potential upside in the near term.
That's a that's a that's a difficult question. There was there was some equation. So Friday exempt for example, the cutoff date was sort of at the end of May beginning of June .
For the drilling and we had about I think a subsequent 104 holes. There. So I think it will continue to grow.
You know what.
Wish we show that we're going to see growth around the existing pits at Marigold. So we'll leverage that over time, we're really excited about what's in CB and I think.
You look at the numbers it seems that you sort of see these hog production rather than a step off we're quite sure that we'll be able to fill that as we've been able to do with the extensions on St. Louis I non extending those laterally from where the where the mine currently is and even though we do have so much.
The headboard.
Free capacity in the mill.
And then we can put the slightly lower grade.
For the six grams to smaller grade at Seabee are well.
We use that to top up we've got spare capacity in the months ultimately.
Isn't it.
In the future and there's a long way to go to get there we'd like to see you know it might be another decline in C D and our own or with a vote in a material increase.
Typically conceivable at Seabee.
But we've got work.
To do an a and.
A bit of exploration.
To go with it as well but.
<unk>.
Yeah, I think you can take your call when you look at it over ice across the across.
Across the portfolio that the different.
But they're all just as exciting is with each other as we as we work through I think the.
What's choose Ara Lauren here and what the team has done.
During 2021 has just been terrific in terms of prioritizing and being very methodical and thoughtful in the way we've approached it that's going to continue into this year.
If we have time.
Obviously success you can see what we can do.
We have the focus on the right areas and we do expect that coming for the rest of the portfolio as chip with you Scott.
I think you should start to get excited about copper Hill at some point to if you. If you look at the drill intercepts, we have there. So I've been around it's you said, it's an O us high grade copper deposit relatively easy you know it looks like it will be easier to treat.
Dialogues, so relatively easy access.
We're hoping we can develop that soy pretty quickly as well, but that will rely on getting access to drill.
Perfect. Thanks for that and just one off on that I mean, obviously, we've talked about all of this oh I'm sorry, with your current portfolio any thoughts on M&A any thoughts on you know a budget that you're looking at extensions to your existing.
Passage or anything that's out in the market.
Yeah.
Goodbye.
It's the same majors I think where we've always been as you know we will be.
Thoughtful.
We will look at opportunities we want to stop looking at opportunities that aren't in our portfolio that would stay on strategy for us.
To ensure you have a sort of a compliment there.
The great asset base, we had but also you know.
The great fundamentals of the business that we've built and.
Yeah, well, we're progressing but you know.
Unless we talk about and then obviously not interesting to us and we're not talking about a whole lot. So.
You know, there's really nothing else to wants to grab their starch, but we're real quick.
Okay perfect.
Thanks, Ron Thanks doing what is in there that's all for me.
Alright, okay.
The next question is from Mike Parkin with National Bank Financial. Please go ahead.
Hi, guys.
Really everything has kind of been asked but.
Just in terms of the exploration work that you're doing at Trenton Canyon, and Buffalo Valley can you give us kind of walk us through you've given us some pretty good information in terms of what you're thinking but how can we kind of think in terms of updates beyond exploration updates like where do you kind of target.
<unk> resources, turning to kind of come together, there if drill programs kind of continue to show success.
I think that'll probably become more clear through this year probably into next year.
Buffalo Valley is.
We did do a sort of a lot of geochemical work.
Making sure that we were that we haven't missed anything that we're looking at the right places and using some different pigment to techniques, we have been drilling to extend the known resource that's there.
We're also seeing some interesting things that.
Trenton Canyon.
And we're seeing a bit more.
Sort of narrow buying a higher grade material lift compared to sort of the larger and placements of log ride that we say it all the parts and that would be sort of consistent with the way it was small and in the past as well which was a relatively.
Narrow what compared to what.
The way we bought into it now.
We do have a bit more work to do before we come.
Come out with sort of a clear development path fly there.
Sure.
Yeah.
Okay, and do you have access to the historical.
<unk> core that the legacy pits were based on.
Yeah, so that that data was handed over to the.
When these things happen you know a lot of them quite old so that's.
Perfect.
But we do have over Bell Potter.
And make lots of cash doing on a bigger scale.
Well. Thank you for your thinking about that probably think more about.
We didn't get some anomalies in that part of the world with the drilling because you never know.
Certainly we see this trend Kenyon when it was time some time ago.
With a with a Greg was below the cutoff. The Griots went reported in San Jose and some of the guys. So it's just a quarter does not report.
So we've got the going back and redoing analysis, just some advice samples.
And that's.
Letting part droids.
<unk> plans that we're putting together for those projects [noise].
Okay, and just last question for seeing some tightness and drill drill crew availability in mostly Canada are you seeing any of that kind of constraint in Turkey or in Nevada.
We were doing our kind of it we've got what we want in Turkey, certainly the the lavar trees.
Ah struggling.
Jim the the manager in Nevada has has managed to secure the drill C. D. So this year, but it wasn't easy on pulse.
So we have seen that there is some tightness it.
Okay. That's it for me you guys. Thanks, very much and looking forward to our next years.
[laughter].
[noise] Hi final question is from Michael Sparkle with I B C capital market. Please go ahead.
Thanks, very much and and thanks for staying late for me here, maybe just looking at the three year guidance. Obviously, you had a great year in 2021 and almost at that age 100000, Mark but the outlook is lower over the next couple of years understandably on sequencing things you've discussed.
How how concerned are you about that lower headline production number and and are there any leavers you can pull maybe in 23 or 24 is an 800000 ounce a year 800000 empty your possible from the base. You've established are are are you fussed about it at all.
You guys look Margaret I think it it's really just a consequence of the months' ago see that we have and particularly it should I believe if you look at.
The the aggregation of all the operations, we had telegraphed in the plastic reports the I lost my production profiles for it it does take a step down while we bring our check my except by on one side of it is expected and I'm not we're not worried about it.
Job he's really focused.
Focused on creating a longer guided future and trying to set that next decade out where we can sustain at least 700000 ounces.
And and give you our sales are a very stable.
Platform, Hey, guys to 750, 800, Louisiana, 750, where I read that as well, but our priority or has really been around targeting a 10 year plus 700000 ounce production private unlucky to die.
Take report that debate published.
Heard a side probably about four times during the call that where we feel very confident that we've got to achieve that so that's really been a priority for us.
Okay, great. Thanks, and then and then very quickly on capital allocation apologies if I missed it earlier in the call, but you you're hitting your your 52 week high or close to it now can you update any guidance on on how you were thinking about buying back stock where are you.
You'll be active and maybe is there a point wish you'd rather do with special dividend than a buyback.
Yeah, no thanks to that question.
Yes, we do have an intention to continue on with a share buyback program and that we had in 2021, we still have it in my last on that AD program to repurchase chairs and and we also have.
She has left on that program to repurchase there's about 1.2 million Cherry slashed.
And then in addition to that we will take into consideration. The current market price is it's all evaluation for your company and reassert does.
Does it make sense to have another share buyback program or when we look at other option like at a special dividend or even something else. So we'll definitely be taking a look at that and and just need some time to kind of work through all that based on everything that's come out today and all the information that we have.
Okay, great. Thanks, very much have a good evening.
Alright, Thanks, a lot.
This concludes the question and answer session I'd like to turn the call back over to Mr. Hancock.
Well. Thank you everyone also love to get through Tonight I. Appreciate your patience as we drove through a bit obviously, you know a huge amount of really interesting sorting news building.
Building on a 20.
21, sorry report it could be up to that you're in your room.
More I was 22 unfolds thanks, everyone.
This concludes today's conference call you may disconnect. Your lines. Thank you for participating and have a pleasant day.
[noise] [music].