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 Kramm, Chuck 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 , Allison White, CFO and Stewart Beckman.
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 today.
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.
While the cost and significant free cash flow generation.
Chicken has substantial organic growth opportunities within our portfolio and I have to leave it at four 8% increase to our reserves, which is actually a nominal success.
Right.
Publishing new technical reports, which lay out an incredibly positive 700000, LTE base launch Rep business.
And finally, our upcoming execution plans for the near term growth opportunities, which represent some of the highest returning projects in our sector.
So first starting off with outperformance.
2021, which was a false first year post merger allowed us to showcase the quality and resilience of our globally diversified asset base.
We delivered nearly 800000 ounces of production at the top end of that guidance range, while our all in sustaining costs were $955 an ounce paid out previously lowered once the study cost guidance backing the place you retrenched.
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 is translated directly to capital returns and we distributed nearly 200 million goal is to shareholders last year or about a 5% yield.
Given the robust outlook for free cash flow generation for years to come we will continue to deliver against our capital allocation strategy.
And the recently announced 40% base dividend increase is evidence of that commitment.
Second and in addition to our full year results as it relates to our updated resource and reserve statements that included an impressive reserve growth.
Four 8% or $1 1 million ounces year over year.
This was a direct result of our successful resource to reserve conversion.
The outage at <unk> gap hanging wall.
This achievement is even more remarkable given the cutoff for the technical reports did not give us the opportunity to incorporate much of the drilling that occurred last year.
We now sit with added 10 million ounces in reserves with a weighted average mine life in excess of 17.
And could have caused by <unk> 22, plus in your bylaws.
Third as part of our transition to becoming an FCC issue, we were 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 given much of the positive drilling results for 2021, even though you didn't make it into the update we're excited by the outcome of the new production base well onshore SSR.
Together the geotechnical reports have added more than two and a half a million ounces of gold production.
What was represented in the previous iterations.
This made our vision to sustain a production basis is over 700000 ounces gold production for at least the next decade has 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 a lot is in respect to our 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.
An initial resource and development plan at Sherwood 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.
The outage and seek to add at least 1 million ounces of production for modest capital investments.
Stay tuned for example will provide us with 1 million ounces of production and significant initial iteration for about $220 million of capital in an impressive IRR 60%.
<unk> will deliver one stimulating 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 ESG and I wanted 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 vehicles. She was travelling was washed off of river crossing all highway 70, well on our way from the mine site.
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.
Our thoughts have and continue to be with their family friends and work colleagues.
Yeah.
<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 and to the environment and we continue to deliver against their priorities outlined in our 2020 sustainability report.
We will review review and re franchised 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.
I just want to highlight a few that are relevant to consider for the quarter.
Operationally, we had another strong quarter with more than 210000.
Taxes production enrolling sustaining costs at $961 per ounce.
Actually 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 of the acquisition of target goals in Saskatchewan.
And an increase in our ownership in the coffee whole 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 we look to 2022, it's worth highlighting Eric Tracy track record of growth execution.
In January we released the 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 a suite of new technical reports, we released today.
Moving onto 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 progressed with the size of the pit area.
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, including breaking granted outage later this year and advancing the <unk> 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 and on horizon.
As we look to improve even further the new baseline production profile 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 reports to digest. So I'll summarize some of the high level details here, it's just kind of 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 vitamin mineral reserve that 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 10 million ounces.
With respect to the technical reports, it's important to note that these documents were requirement of the SEC are all ACC issuers other than U S cases at 800 regulations.
While we had expected to release the new Master plan for Jetblue around these online 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 guys 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 ago.
This represents a 37% increase in lots of mine production as compared to the C. D and page 20 reserve case, driven by <unk>, which added $1 2 million 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.
These two resource provides us the opportunity to further increase and extend the production, perhaps all by adding a copper concentrate it to the existing flow sheets.
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.
Yes.
The total capex.
$220 million. These production scenario drives a strong overall after tax NPV at $2 billion.
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 over an 11 year bond launch.
We see optimize opportunities to optimize the production profile in the near term from targets like new millennium as well as the potential further upside by cooperating exploration success at Buffalo Valley entrant in Kenya.
Sadly the mineral reserve production profile resulted in 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 future production profiles.
At Puna, 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 gold equivalent production annually through 2020.
However, we're not done yet and with the abundant growth targets and 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.
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 this slide Linda.
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.
Is an incredible effort across the business.
Almost every function in the company.
Where we are today.
For the first time I can sell a large accelerated filer.
As we take our first look at the U S. GAAP results Q4 was another solid quarter operationally for the company.
We produced over 211000 gold equivalent ounces.
Gold equivalent sales of over 218000 ounces.
A total of $408 million in revenue for Q4, bringing total.
In total 2021 revenue yes.
$1 four a barrel.
I tried to give all 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.
Sure <unk>.
Attributable net income was $402 million or $1 86 per.
Sure.
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.
$609 million in operating cash flow and $444 million in free cash flow during 2021.
A link to a peer leading.
12% free cash flow yield.
And adjusted earnings per share are calculated based on the company's definition of adjusted attributable net income per share.
We start with our attributable net income at 50 cents per share and then make adjustments to 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 2018.
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 to 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.
Next slide.
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.
Our basis of 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 our outlet 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 the discounting analysis.
This results in lower liability lower depreciation of the asset retirement asset, but higher accretion 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 asset.
Prior to 2019 under Ifr at the Pirquitas mill that.
That had previously been impaired with written up <unk> mine presented an opportunity.
Then 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.
Such as the U S dollar is not the local currency the.
The lira in Turkey re measurement of non monetary assets and liabilities as required.
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 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.
So 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 Fsrus 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 to EBITDA ratio of one one.
And the magnitude of our capital return is best illustrated on slide 12.
We have 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 translate into robust cash flow in 2021, and we clearly aligned that free cash flow performance with our app overtime 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 elephant.
Before I dive into the detail, let me just comment on a composite production profile from the technical reports on slide 13.
It 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 upside from our extensive nemo 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 stronger future production profile.
<unk> positivity with you as we work through the slides for each of the properties lets start the discussion with chip are on slide 14.
We started building the chips with district Master plans, a number of years ago to help direct and focus the strategic mine development republished CDM pay 20 in November 2020, outlining outage FPA case with an intent to convert it to a feasibility level of reserves in the following used technical error.
As promised in this city and paid 21 record odd.
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.
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 Jetblue heap Leach the aura outage will be trucked to chip with the treatment.
We are still exploring a outage and it is still open based on the ongoing drilling we expect that the results and reserve will continue to grow.
We also have some ideas and studies underway on how to 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 are showcasing an initial assessment or case with a first look at the next development of the chip.
Positive.
Two projects.
I'll just take a minute to describe the <unk> II project.
<unk> has a large amount of copper in the deposit base in and surrounding the resource and reserve.
In the past this coker was assigned a little or no economic value.
With some successful drilling and metallurgical test work, we changed the paradigm and re looked at the mine assuming that we could leverage value from the Copa <unk>.
The outcome of this study was the highly accretive.
Food project outlined in the initial assessment case and.
And the initial assessment case, we add a small one.
8 million ton per annum copper concentrates to chirp up this.
This will make both our gold rich copper concentrate to style to the smelters and the gold rich pyrite concentrate which we will use as supplemental Q and Gulf state into the audit clients. We're also adding a corporate recovery within the sulfide plant that will make a copper concentrates to style.
I think the copper concentrator 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 ore as.
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 sulfide and oxide gold or let's say the existing oxide and sulfide Gulf clients, giving a longer life and hog production from 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 outage in situ upside outlined in the technical report sharper 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.
Much of 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 of the <unk>.
Current application to extend broadly including much of the new millennium exploration.
In the longer term, we have extensive targets at marigold, including Trenton Canyon, and Buffalo Valley, which we do have some historic.
Meaning which may make them easier to accelerate most of our exploration is focused on delivering a high grade 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 at Trenton Canyon and have a hot causes this on a potential for significant sulfide deposits given this potential and the company's skill set with building clients ensure trading.
Fracture 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, All about 20%. Please move to slide 16, and we'll discuss CBD.
A couple of key takeaways from the technical report it more than doubles the loss at Seabee, 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, the new 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 centrally and non current source of higher grade ore to the production profile in the later years essentially non for example delivered some wonderful absolute production surprises in 2000.
'twenty 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.
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 on building production rates 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 exit 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 now focuses 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 plant you will hear more about shine through the year.
Please move to slide nine and I'll give a brief update hall fair enough.
We're gonna delivered a solid by state Nic report, which assumes the recently demonstrated improved milk the sole performance at 4500 tonnes per day.
In 2021, we were busy at Helena 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 will 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 core 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 time from last year's work and we will put some effort into developing these as well please.
Please move to Florida and 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 did with the chips with 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 teams. So this is Scott.
We care for our communities and teammates through another tough year of the pandemic.
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.
Better production performance.
Better production performance and in 2021, we delivered 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 as in reserves and delivered a number of highly accretive projects for 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 your right.
To summarize 2021 with a year of outperformance for us.
With respect to our operating results.
Our free cash flow generation.
Capital returns.
Cause the outstanding results from growth.
With today's technical reports, we have now delivered a robust.
Iceland production protocol with a clear opportunity to sustain a 700000 ounces production.
Profile 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 Gary Lane to take any questions you might have.
Thank you Mr. Anthony we will now begin the question and answer session.
In the question queue, you May Press Star then one on your telephone keypad O'hara tone acknowledging your request.
Youre using a speakerphone, please pick up your handset before pressing and Keith.
To withdraw your question. Please press Star then two.
Our first question is from Tyler Langton with Jpmorgan. Please go ahead.
Yeah good evening.
Right after and Steve. Thanks for taking my question I guess, just maybe just to start.
With <unk> for <unk>.
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 have been.
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, Eli I, which is why in all the documentation and Youll see it called the checkpoints type of extension.
The application for the extension for checkpoint Pip I, the first stage of checkpoint for the startup piece easy and.
And we're expecting to see that come out in the next couple of months and then we will have a number of like two things that are.
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.
Feasibility study for <unk> now we do have work obviously ongoing that 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 safely 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 it.
The beginning of April and 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 fair number of noncore asset sales is there anything else that you have.
Potentially looking at or do you kind of divested mostly what you wanted to.
I'll I'll I'll answer the second part of call. It I'll, let Alison answer the first question. So.
The portfolio review process is still ongoing and we.
We are looking within just to make sure.
Theres, obviously, the obvious targets that you could ask about Lac St. Louis and others, but we're also taking that same discipline across the exploration portfolio, So where are where 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 work.
The the hypothesis why not have lived out in terms of our exploration efforts in Wiltshire turned over and.
And replace size as well.
And we will continue as normal course business for us.
As a as 2022 rolls on but we did do a heavy lift in 'twenty. One so yeah, I think the sort of larger scale opportunities. So I'm pretty much my time here.
And Tyler I'll answer the first part of that on the share buyback plan.
You may recall earlier in 2021, we announced our 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 would be accretive for us to do so and so we will take a look at them.
What that would that valuation constitutes.
And act accordingly.
Great. Thanks, so much.
Thank you. The next question is from Cosmos <unk> with CIBC.
Please go ahead.
Thanks, Rodney and team.
Maybe my first question is on <unk>.
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.
Or all of the material that's more that's that's above the cutoff grade.
We're feeding to the plants when we've made the larger pit.
These included in feed to the plant 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 concentrates that we make from the from the concentrate to <unk> It runs about.
About two ounces so it's predominantly adult concentrate.
As far as value guys.
Great and then.
Thanks.
Okay.
Hey, guys closer.
Hey.
Yeah, No I just wanted to follow up on the on the Capex, you're right 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 hit on.
Get a bit more granularity on it in terms of how.
How have you factored that in there's also been volatility in the Turkish lira, how have you accounted for that potential risk as you come up with these.
Capex numbers.
Yeah. So remember this is a this is.
Initial assistant cuts are they of course, so the estimates sort of a plus or minus 50% estimate.
However, I would say we've got a pretty good handle on what the Casa we just finished building the.
The flotation plant so.
Concrete steel costs.
Particularly those which we can source locally in Turkey, It's a very cost just price to build things.
We did have as.
As I say to think who supported us with the engineering work.
And then we affected that with good factoring numbers so as far as the next time. It goes it's a it's a good estimate of 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.
For what we end up with ultimately in the plant.
And how we might be able to liberate value out of the plant 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 audit shows the oxide awards and treating those through the sulphide client order just grinding or augmenting.
Many of them with so far to increase the recoveries.
And liberty quite a lot of value out of it but that's quite a large.
Exercise and scheduling which will happen subsequently.
This works.
I think well I think there's 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 leveraging the infrastructure of the copper concentrate and as you mentioned you increased your ownership of Capri Hill. They do 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.
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 here was very clean chop a colorado.
Really just chocolate polaroid.
And it's close to the cost and it's actually very close to the smelter.
So we'll leave it there.
<unk> was also blessed with sort of amazing infrastructure as well so.
Remember when you were there we have a wildlife directly underneath him on.
Throw out extra the hydroelectric power stations.
On the other side of the highway side as far as the infrastructure for building a building.
A couple of concentrated couldn't be in a better place.
A little bit more flat ground would've been handy, but.
That's right.
Maybe.
Maybe moving on to Marigold.
As you mentioned today's technical report was really just a base case just based on reserves could you remind US you know as you showed on the map there was quite a few targets here in the new Millennium Buffalo Valley Trenton Canyon Balmy.
Just to name a few.
It'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 where was all let's remind.
At at Marigold, So just the existing deposits.
The areas that we're looking to leverage going forward on.
Other areas around the existing pits.
Remember.
We also have an application in for an extension to Bali.
And that extension of the 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.
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.
Just C b.
C V to Red Dog [laughter], maybe one last question just a follow up here I read in the MD&A that there's the potential for 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 halt the sulfides.
You know could you elaborate a little bit.
Yeah, well well the opportunities that come up to really drive some efficiency.
And maybe.
Some significant rescheduling at Marigold would be to build a heap leach at the southern end of the property with a counterpart with the current pizza.
And reduce the whole.
And then be able to use that all sorts of Buffalo daily.
And also for the southern pits from from the existing married all deposits and then we would take the carbon from there and then take it up to the existing desorption circuit. So.
So we're just running through that at the moment, but we think that we've all available. This squeeze some real value out of the out of Marigold about doing that but we haven't done enough work yet.
Really wrapping our arms around what it might be worth.
Great. Thanks Stu.
<unk> and team and once again and are.
Looking forward to all these different growth opportunities.
Because next call bye.
The next question is from Oh, Oh, there's Habib with Scotia Bank. Please go ahead.
Thanks, Operator, hi, Rod and his team and congrats on a strong quarter.
And really thanks for upgrading all the mine plans are 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.
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.
Uh huh.
That's a difficult question. There was there was some inclusion so Friday exempt for example, the cutoff date was sort of at the end of May beginning of June for.
So the drilling and we had about I think a subsequent to 104 holes. There. So I think audits will continue to grow.
You know with which we're sure 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 C. D and I think when you look at the numbers and see that you sort of see these hot 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 toy aisle non extending those laterally from where the where the mine currently is and even though we do have so much.
The headboard free.
Free capacity in the mill.
And then we can put the slightly lower grade.
For the six grants as low grade at Seabee.
We'll use that to top up where we've got spare capacity in the months you know ultimately you know isn't.
Isn't it that in the future and there's a long way to go to get there we'd like to see it might be another decline at C b and a and all with a road and a material increase that's perfectly conceivable at Seabee.
But we've got a lot of work to do and a bit.
A bit of exploration.
To go with it as well but.
Patients are good.
Yeah, I think he can tell you when you look at it over ice across the.
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 that whats choose airborne 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 and honestly success you can see what we can do you know if we have the focus on the right areas and we do expect that to come through the rest of the portfolio has tripled its 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 been around as you said.
It's in all of US high grade copper deposit relatively easy you know it looks like it will be easy to treat.
Dialogues, so relatively easy access.
So 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 follow up on that I mean, obviously, we've talked about all this.
I'm sorry, the burden with your current portfolio any thoughts on M&A any thoughts on you know probably just that youre looking at.
Extensions to your existing assets.
Methods or anything that's out in the market.
Okay.
That's right.
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 complement the great asset base, we had but also.
Great fundamentals of the business that we've built and we're progressing but you know unless we talk about and obviously not interesting to us and we're not talking about a whole lot.
You know, there's really nothing else to work towards that at this stage, but we will quickly.
Okay perfect. Thanks, Thanks, Ron Thanks Stupid isn't that that's all for me.
Alright, okay.
The next question is from Mike Parkin with National Bank Financial. Please go ahead.
Hi, guys I'm.
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 our exploration updates like where do you kind of target.
<unk> resources, turning to kind of you know.
Come together, there if drill programs kind of continue to to show success.
I think that'll probably be some more clear through this year probably into next year.
Buffalo Valley is.
We did do a sort of a lot of.
Geochemical work I'm, making sure that we were that we haven't missed anything that we're looking at the right places and using some different take months to techniques, we have been drilling to extend the known resource that's there.
Yeah.
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 low grade 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.
Narrower compared to what's the why we bought them out.
So we.
We do have a bit more work to do before we come.
Come out with sort of a clear development pathway there.
Sure.
Yeah.
Okay, and do you have access to the historical.
Core debt.
The legacy pits were based on.
Yeah, so that that data was handed over.
When these things happen you know a lot of those quite hold so that's terrific.
Perfect.
Can make lots of cash doing on a bigger scale.
Well I think if you're thinking about that could probably think more about Buffalo valley.
We do get some anomalies in that part of the world with the drilling because when it was done certainly we see this at Trenton Canyon when it was done some time ago.
You know where that where the grade was below the cutoff grades reported in some of the some of the data says this report does not report.
So we've got to going back and redoing analysis some of those samples.
And that's.
That impart draws the.
The drill plans that we're putting together for those projects.
Okay and just last question, we're seeing some tightness and drill a drill crew availability in <unk>.
Mostly Canada are you seeing any of that kind of constraint in Turkey or in Nevada.
We were doing our Cai, we've got what we want in Turkey.
The the Labar trees.
Are struggling.
Jim the manager in Nevada has has managed to secure the drills, we exit this year, but it wasn't easy on pulp.
So we have seen that there is some tightness there.
Okay.
Is it for me guys. Thanks, very much and looking forward to our next years.
Okay.
Sure.
Our final question is from Michael <unk> with RBC capital markets. 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 800000, 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 are there any levers you can pull maybe in 'twenty three 'twenty four is an 800000 ounce a year 800000 ounce year possible from the base you've established or are you fussed about it at all.
Look Michael I think it's really just a consequence of the mine sequencing that we have and.
Particularly if you look at it.
The aggregation of all the operations.
Had telegraphed in the plastic reports the life of mine production profiles for it it does take a step down well, we bring a check or exit via a long. So it's as expected and I'm not we're not worried about it our job is really being focused on creating a longer guided few.
Uh huh.
And are you trying to sit that next decade out where we can sustain at least 700000 ounces and and giving ourselves a very stable.
Platform if it goes to 750, and then I had written down to seven.
50, we're okay with that as well, but our priority has really been around talking about 10 years.
Plus 700000 ounce production profile to die.
You know with the take reports that have been published.
I heard a side probably about four times during the call that a weird.
Feel very confident that we're going 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're hitting your your 52 week high or close to it now can you update any guidance on how you're thinking about buying back stock are aware.
You'll be active in and maybe is there a point at which you'd rather do a special dividend and a buyback.
Yeah, no. Thanks for that question, yes.
Yes, we do have an intention to continue on with the share buyback program and that we had started in 2021, we still have a few months left on that program to repurchase shares and we also have you'll have them. She is left on that program to repurchase Theres about one 2 million shares lapse.
And then in addition to that we will take into consideration and at current market prices.
The valuation for the company and Rheostat, you know does it make sense to have another share buyback program or when we look at other options like a special dividend or even something else.
Well definitely taking a look at that 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 our question and answer session I'd like to turn the call back over to Mr. Angelo.
Well, thanks, everyone, obviously, I'd love to get to that I say I appreciate your patience as we drilled through it but obviously you know a huge amount of.
Really interesting and exciting news.
News.
Building on our you know what I'm, saying, that's a 'twenty one so I look forward it could be up to that during the year and took more than it 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.
Yeah.
Uh huh.
Yeah.
Okay.
Yeah.
Sure.
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Yeah.
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