Q1 2022 Eldorado Gold Corp Earnings Call
Speaker 2: Thank you for standing by. This is the conference operator. Welcome to the Eldorado gold. First squarter 2022 financial and operational results. Conference call as a reminder, all participants or in listen only mode, and the conference is being recorded. After the presentation there will be an opportunity to ask questions. To join the question Q, you may press Star then one on your telephone key pad. Should you need istance during the conference call. You may signal an operator by pressing Star then zero. I would now like to turn the conference over to Lisa wilkinson, Vice prescedent Investor Relations. Please go ahead, miss wilkinson.
Speaker 3: Thank you operator, and good morning everyone. I'd like to welcome you to our Q1 2022 results conference call.
Speaker 3: Before we begin, I would like to remind you that we will be making forward-looking statements during the call. Please refer to the cautionary statements included in the presentation, as well as the risk factors set out in our annual information form.
Speaker 3: Joining me today. On the call we have George berurnne, President and Chief Executive Officer phily, Executive Vice President and Chief Financial Officer, and Joe <, expletive> Executive Vice President and Chief Operating Officer.
Speaker 3: Other members of the senior leadership team will also be available for the qa session.
Speaker 3: Our release yesterday details our 2022 first quarter financial and operating results. This should be read in conjunction with our first quarter financial statements and management's discussion and analysis, both of which are available on our website. They have also been filed on SEDAR and EDGAR.
Speaker 3: All dollar figures discussed today are U's dollars, unless otherwise stated. We will be speaking to the slides that accompany this webcast. You can download a copy of these slides from our website.
Speaker 3: After the prepared remark, we will open the call for qa. At this time we will invite analysts to Q for questions. I will now turn the call over to George.
Speaker 4: Thanks Lisa, and good morning everyone.
Speaker 4: Here is the outline for today's call.
Speaker 4: I'll provide a brief overview of Q1 results and highlights before passing it to fill, to go through the financials and Joe, to review our operational performance.
Speaker 4: Then we'll open the call to questions from moranys.
Speaker 4: Over the past two years, COVID-19 has been one of the most severe tests of our safety systems and emerging see response capabilities in memory.
Speaker 4: As we entered 2022, the amacron variant of COVID-19 was rapidly spreading across the globe, causing concerns in business and operating environments.
Speaker 4: We have continued to prioritize monitoring and adapting our controls to prevent the spread of the virus and keep our people, their families in local communities, safe.
Speaker 4: As we enter the third year in the pandemic, I am continually inspired by the resilience of our global teams, who remain energized and focused on delivering safe operating results.
Speaker 4: We faced several challenges at the start of the year that impacted our operating and financial results.
Speaker 4: In the first quarter, we produced over 93.2 thousand ounces of gold. During January and February , all operations were impacted by higher-than anticipated eism related to the surge of COVID-19 cases.
Speaker 4: We were also impacted by a government-mandated power outage in Turkey and severe weather in both Turkey and Greece.
Speaker 4: Despite these challenges, we are seeing a recovery at our operations.
Speaker 4: As we mentioned on our last conference call in February , we expect first half production to be lower than second half production and we maintain our 2022 production guidance range with 460 to 49 thousand ounces.
Speaker 4: Joel will speak to the operations in more detail later in the call.
Speaker 4: As we've noticed in previous, as we've noticed noticed in previous quarters, we continue to face inflationary pressure similar to the wider market, which has been intensified by the Russian Ukraine cris.
Speaker 4: Principal cost increases are in electricity, fuel and reagents.
Speaker 4: We continue to monitor our supply chains to ensure our sites have the necessary equipment and supplies to safely operate.
Speaker 4: We have not experienced any significant disruptions related to availability of supplies. We also continue to monitor our concentrate shipments, including redirecting shipments as required.
Speaker 4: We have not experienced any disruptions with respect to refining of DA or fulfillment of concentrate shipments.
Speaker 4: In the first quarter, we continue to see inflation. In Turkey however, cost increases dominated in local currency. Primary labor were mostly offset by the continued weakening of the turkeish shchera.
Speaker 4: In the avittivity region of Quebec, increased activity in the mining sector has impacted the availability of contractors and labor.
Speaker 4: This year we have completed two -year collective barging agreements with our labor unions in both Turkey and bece.
Speaker 4: In Greece, we strengthened our relationship with our labor partners by incorporating technology and flexibility into our labor agreements, which helps us to move forward with our productivity and efficiency agenda.
Speaker 4: These labor agreements are instrumental in allowing us to focus on delivering safe operating results.
Speaker 4: During the quarter we progressed at skcures with activity focused on finishing steel erection in a closing of the mill building, commencement of basic engineering, continued preservation of site facilities and equipmentour scurry financing discussions continuue to advance.
Speaker 4: We are evaluating all available options, including joint venture equity partners, project and debt financing through EU and Greek lenders, as well as the EU recovery and resilience fund and metal streams. Our focus in selecting a financing package will continue to be driven by value optimization and derisking for the future.
Speaker 4: Following financing and board approval we expect to restart full construction at curries. On the second half of 2020. -two and.
Speaker 4: Finally I would like to highlight a sustainability reporting milestone for the quarter.
Speaker 4: In March we published our second responsible gold mining principles report providing independent assurance that the year two requirements have been achieved with an impressive level of conformance against principles demonstrated ahead of the 2020 -three deadline. We continue to work towards full conformance with the rgmps across four operating mines to produce our year three report which will summarize its achievement forthcoming in 2020 -three. I'll stop there and turn things over to Phil for a review of our financial results.
Speaker 5: Thank you, George. Good morning everyone. Slide five provides a summary of our Q1 2022 financial results.
Speaker 5: As a result of the operational challenges and lower production. This quarter our Q1 cash operating cost was $835 per on sold.
Speaker 5: An all sustating costs were 347 gllas per oun sold free cash flow in the first quarter was a negative twent thousand-six eight thousand.
Speaker 5: In Q2, we expect cash flow to be impacted by the timing of annual royalty payments in Turkey and Greece and the timing of capital spend.
Speaker 5: elderrod reported a Q1 twotwentthousand and 22 net loss attribute to shareholders of 317 million, or loss of a dollar 74 per share.
Speaker 5: After adjusting for one.time, nonrecurring items, including a 365 million noncash impairment of sertage are noncore asset in Romania and a two million noncash writedown of decommissioned equipment at kisadag, among other things. The Q1 adjusted net loss.
Speaker 5: Was 19 million, or loss of 10 cents per share. Q1 cash operating costs and all in sustaining costs were higher in the quarter due to operational challenges. That resulted in lower gold ounces produced and sold. We are seeing higher prices in the quarter for diesel, electricity and reagents.
Speaker 5: Yet total direct operating costs, primarily in mining, processing and related costs, on a U's dollar basis.
Speaker 5: Were slightly lower in Q1 2022 compared to the previous quarter, due in part to the weakening Turkish lira, despite higher tons placed on pad at kisadag in Q1 2022 compared to Q4 2021.
Speaker 5: In light of these significant increases in prices for electricity fuel, regions and other consumables required for our operations.
Speaker 5: We are closely monitoring the impact on expected full year direct operating costs and will provide an update next quarter.
Speaker 5: Capital expenditures were 61 million in Q1, of which 25 million was related to sustaining capital, including underground development.
Speaker 6: Processing upgrades and equipment replacements and rebuilds.
Speaker 5: And 32 million was related to growing capital, including waste stripping and construction of the North leach pad at kisadag.
Speaker 5: We are actively reviewing our growth in sustaining capital expenditures, given inflationary pressures and volatility.
Speaker 5: We are practicing sound capital discipline by focusing on nondiscretionary capital required to maintain production asset integrity and our license to operate.
Speaker 5: Income tax expense was five point one million in Q1, comprised of 16 million current tax expense.
Speaker 5: Partially offset by one million deferred tax recovery.
Speaker 5: The current tax expense related to four million in dividend with holding tax.
Speaker 5: five million in investment tax credits received related to the kisadag heap leach improvements.
Speaker 5: Quebec mining duties and corporate tax and operations in Turkey.
Speaker 5: In Q1, Turkey announced a reduction in the twentthousand and 22 corporate tax rate from 23% to 22%.
Speaker 5: And reduction in the 20.023 thousand corporate tax rate from 20% to 19%.
Speaker 5: The deferred tax recovery of one million and Q1 was primarily related to the deferred tax impact of the impairment on the surtage project, partially offset by the impact of further weakening of local currenciesat quarter end, we had unrestricted cash cash requivalence, and turn to posits of 435 billion. Our net leverage ratio is at zero point three- one X as of March thirty-first, compared to zero, zero point eight nine X at the end of Q1 2020. This reflects a much improved credit profile for the company over the last two years. With that, I will now turn it over to Joe to go through the operational highlights.
Speaker 7: Thanks Phil, and good morning everyone. I'll start with an important health and safety highlight from our operations in the first quarter. We improved our total recordable injury frequency rate year-over-year from eight point one to 4.7. our focus on leading indicators such as leadership engagements and risk assessments is building a sustainable safety culture.
Speaker 7: Also I would like to congratulate lemock billemock team for achieving three and a half years without a lost time injury.
Speaker 7: Moving to our operating results, we produced 93.209 thousand ounces of gold in the first quarter, with cash operating costs of $835 per ound sold.
Speaker 7: Slide eight looks at our operations in more detail, starting in Turkey. kislletad's production in the first quarter was 29.779 thousand ounces and cash operating costs were eight hundred and sixty-one dollars per ounce sold.
Speaker 7: Gold production during the quarter was lower than planned as a result of COVID-related absenteism, severe weather and a government-mandated power outage.
Speaker 7: Lower production was also related to the reduction of tons placed on the heap leach pad.
Speaker 7: In Q4 during the commissioning of the high pressure grinding roll circuit.
Speaker 7: The severe weather and fthing temperatures in Q1 led to lower tons stacked on lease pad, which is expected to negatively impact gold production in Q2.
Speaker 7: We anticipate production at kiseda to be weighted to the second half of the year and maintain full year production guidance.
Speaker 7: We continue to balance agglomeration in throughput with leach kinetics to obtain optimal performance.
Speaker 7: So far, the performance of the hbg circuit is meeting our expectations and we are seeing recovery rates as expected.
Speaker 7: At FM dw group. First quarter gold production was 21.057 thousand ounces at cash operating costs of $648 per ounced sold.
Speaker 7: Gold production throughput and average gold-graded ffortan drewcrew were in line with expectations.
Speaker 7: The operations were imally impacted by COT absenteism during the quarter and FM two group continues to be high-performing asset with solid results.
Speaker 7: Current exploration and fmtruers focused on the co-carpenter and bodyatty Maine systems. Resource expansion drilling at cocarpentour South has indicated a high-grade football splayade to the principal vein and has potential for further resource expansion through step-out drilling.
Speaker 7: Moving to our Canadian operations. First quarter gold production of lammock was 33.377 thousand ounces and cash operating costs were $763 per our sold.
Speaker 7: At lmock. Reduced workforce due to COVID-19 early in the quarter delayed the underground development of high-grade stopes which led to lower-than planned gold grad.
Speaker 7: Mine development progressed and planned gold grade and tonnage were achieved in March.
Speaker 7: Full year gold production at themark is expected to be in line with guidance.
Speaker 7: In late March we released exploration results which included new step-out drilling at the ormarck deposit that identified extensions to the own mineralized zones, both laterally and a depth. The armarck deposit has now been extended to a depth of about 800 meters from surface and remains open in multiple directions.
Speaker 7: With the Triangle Sigma decline completed, we are focused on an exploration drift and resource conversion drilling at ormmec, which is expected to commence this quarter.
Speaker 7: Finally let's move to greeceat. Olympia's first quarter goal production was 8996 ounces and cash operating costs were $449 per ounoundce sold.
Speaker 7: In the early part of the quarter gold production olympius was impacted by COT absenteiism power outages related to severe weather in the regionbut operations resumed mining to plan and achieved planant tonnage and brade from the mine in March.
Speaker 7: Plant throughput in the second quarter is expected to be impacted by planned processing ti-ins to improve water treatment plant efficiency and capacity.
Speaker 7: Recent approval of an extended surface or stockpile will allow mine improvements to continue as the water treatment plant upgrades are implemented. As a result, we expect production and Olympus to be weighted to the second half of 2022. underground resource expansion drilling at Olympus. Olympus has identified a new mineralized lens representing the western extension of the platzone, which remains open to both the South and the West. Further step out drilling as planned for the second half of 2022.
Speaker 7: I'll stop there and turn it back to George' propossing remarksthanks team. Despite the challenges we faced in the first quarter, we are already seeing improvements at our operations in the second quarter. We remain focused on delivering safe operating results and executing on our strategy to maximize value for our shareholders.
Speaker 4: Thank you for your time. I will now turn it over to the operator for questions from our analysts. We will now begin the question and answer session. To join the question here, you may press Star, then one on your telephone key pad. You will hear a tone acknowledging your request.
Speaker 2: If you are using a speaker phone, please speak up your handset before pressing any keys to we draw your question. Please press Star, then two we will pause for a moment as colors join the queue.
Speaker 8: The first question comes from costma: chew with ciibc. Please go ahead.
Speaker 9: hithan.ks, George Phil Joe for the presentation. You know certainly a tough Que one.
Speaker 9: Maybe my first question is on your cost guidance. I appreciate that, as you mentioned volatility and prices, you're closely monitoring it. We will get an update in Q2, but I guess the guidance of 10 and 75 to 11 and 75 announs on sustaining costs.
Speaker 9: Is that? Should we no longer rely on it? Is that now kind of like- let's call it like- previous guidance? Is that how they should look at iti cause Mo, it's George, Hi George.
Speaker 4: Good morning. When you look at Q1, dominantly production impact to us and so you saw an up tip in our costs. ilm, give you some more color around.
Speaker 4: The cost in Q1 relative to our expectations. The way we're looking at it right now is: we don't have any indication from our Q1 results.
Speaker 4: That the inflationary pressures are going to have an impact on the year now there's no doubt we're paying more for electricity. In Europe . There's no doubt our diesel costs are up. The although we're dominantly an underground miners. So it's really kiss it out that that has the volume of on diesel consumption and we are seeing some higher reagent costs but overall when you look at our spend in Q1 relative to Q4 or last year's run rate for mining processing G N a we're not seeing an impact on our costs to date. So Q1 was all about the issues related to lower production and no indication yet that are overall costs are being impacted and that's why you our at lease talks about. We'll continue to monitor this and just you know we'll give you further update in Q2 as to how well are we combating the higher costs from power diesel and reagents with you know with other measures we're taking. So so far we didn't update our guidance because we don't have the indicators on the bottom line yet to say it's here but.
Speaker 4: We CAn't hide from the fact that there are cost pressures coming in some parts of the business and some of the commodities. Maybe bil, you can have some further color there sirry thanks George, high Cosmos, I think.
Speaker 5: Georgia sum up pretty well. From a cost perspective. There's a number of. There's no doubt that, for example, we did have increases in electricity, specifically in greasece. We had increas in diesel prices in in Turkey, but there's other factors that are that are also moving as well. For example, in Turkey the lyrra continues the weaken and that has offset. And if you look at the total direct operating costs in Q1, seen specifically, our mining costs are processing and other related costs.
Speaker 5: Even though at kisadedc for example in Q1 our tons placed on pad was higher than Q4 our costs. In Q1 2022 compared to those mining processing and related costs. Q4 were actually lower. So.
Speaker 6: We recognize that there are price increases. We're trying to get a.
Speaker 6: Just get more information in terms of the trend and we're monitoring, as we say, and we continue to look for opportunities as well to be more efficient and offset those cost increases as well. Of course, and then tograp up this part of the question here: bill or George, could you remind us what kind of year-over-year cost inflation assumption did you factor in into your 2022 cost guidance? Is that? Is that consistent with what you're seeing so far?
Speaker 5: Let may an answer that Cosmo. So, for example, our biggest impact of inflation that we expected in our in our plan for 2000 and thousandtwenty-two was in Turkey. The published inflation rates at the end of 2000 and twenty one, going into thousand and 22 was, I think is between 15 and 60%.
Speaker 6: We tracked that all then, but at the same time.
Speaker 6: The impact of those- those of inflation- has been offset primarily by the impact of the weakening lira. So we haven't seen, when you converted it to U's dollar operating costs in Turkey. For both our operations combined throughout 2021 Q1, all the way through to Q4, our? U's dollar operating costs are pretty flat and that continues to be the case for Q1 2020 -two.
Speaker 9: Got it. Thanks Phil, maybe switching gears out a little bit. Looking at kthodog, I noticed that you did about.
Speaker 9: Sa little bit less than three thousand anounysis in the quarter. You know you've reitate 14.565 million analounysis for the year, So want to get a better understanding, you know, of how you're going to improve on your operations for the rest of the year, maybe on two points. I guess you know grade decrease to zero point six one grain per ton Q1. Are you seeing that? You know improve now and then the other point is you know, as you mentioned, cold temperatures and Turkey impacted some of the conveyor systems and so you know and but now the h vtr sounds like it's coming up. You know ramping up as expected, So could you maybe comment on recovery? So first on gr and how that's going to improve and also comment on recovery, what are you're targeting for the rest of the yearcustomers? This is maybe I' start with.
Speaker 7: Maybe I'll start with kind of the production numbers or kind of the trend that we're seeing. So you're right, as in Q1, as we were using belt agglomeration and the cold temperatures that kept us from stacking the planned number of tons, but we did see.
Speaker 7: Good agglomeration which has resulted in a couple of things: 1, we're seeing higher or solution application rates than pre- h P G, R with the agglomeration that we have done and that kind of speaks well to potential improvement in ACH kinetics, which we, you know. We have indications that that's headed in the right direction as well. We have looked at the mine plan and and grade and as we have stacked in Q in the beginning of Q2 through the month of April , we're about 10% ahead ounces the pad so far this quarter and we see that trend continuing and we are meeting, were meeting budget P's placed on pad at slightly better than budget grades at present. So So kis with that. All those things look pretty good and we're we're optimistic as we look at, as we look at, recovery.
Speaker 7: Total we were targeting 56% and we don't see any indication of anything less than that, and in fact we're optimistic.
Speaker 9: Great thanks, George Phil and Joe. Those are the questions I have thanks on. Thanks for the most. Thanks comments.
Speaker 2: The next question comes from Tanya Che: uck.s: connect with skotia Bank. Please go ahead.
Speaker 10: fa good morning everyone. Thank you for taking my questions. I do have a few and I just wanted to start with just on the quarterly performance, just trying to get a handle. You've got stronger performance coming out of both olympius and because- let that for the second half. So how should we think about Q2? Is it going to be simmar to Q1 and then we have this huge bump up in the second half of work. Do we have improvement, quarter-over quarter? I'm just trying to understand whether I do 60 40 55 40, five. How should we think about that?
Speaker 11: kenyou, this is Joe, we see, but it's a bit stronger performance in Q2 but still a bit challenged as the the lower.
Speaker 7: Tons placed in Q1. It kistllet ad, even though we are seeing favorable indicators on recovery and leach kinetics. It's come. It will come up in Q2 but.
Speaker 7: Is still we weighted to the second half and an olympious. We took the opportunity in Q1 to set ourselves up for the second half dimmentions in the or, where we spoke earlier about the water treatment plant and efficiency and quantity. So given the fact that we we we re lower tons in Q1, we decided to make some adjustments to allow us to increase capacity of the water treatment facilities and do some different tieins with how we're using our thickers. So we set the mill up to be able to run a bit higher than plan in the second half. And as mining has progressed reasonably well over the past four quarters and continues into Q, into Q1, we also have a stockpile arrangement now where we can continue in Q2 to make a few more adjustments in water treatment.
Speaker 7: And have the capacity to run those coms off the stockpile before the end of the year. So're we're reasonably comfortable in both of those that they will be second more, second half weighted. At lammock we got a little bit of a slow start on development and as we were transitioning from lachitudinal long home methods in see four to transfse requires a little bit more development and a slow start to development in year cost us a bit of grade. However, we are running ahead of a budget development rates now and see lammock coming back reasonably well in Q2 and continuing for the balance of the year. Maybe I' jump in with a little more clarity on kiss us so, because as a heat leets pad you kind of have to look at two sets of numbers. And so, as Joe described in his in his earlier comments, we had, we had a tough Q1 due to wheather and we were ramping up the aagglomeration of the o on the conveyorable.
Speaker 4: And we're seeing. We expect to see a strong Q2 and recoverable ounces placed on the pad and even a stronger second half. So we're ramping up recoverable ounces placed on the pad and we comfortable with our guidance. Then, when you look at ounces produced, because there's a delay between placing the ounces and pouring the goal, Q2 will ramp up over Q1 but it's going to be a significantly stronger second half just due to the delay between placing the ounces and then the ounces coming out on the pond. So the trend will be up both on placments and production, but weighted to the second half, ounces Board.
Speaker 10: Yes I'm just trying to understand like: So Q2 overall for the company will be better than Q1, and then it's Q3 better than Q2 and then Q4 the best, or our Q3 and Q4 the same. Q3 and Q4 will be similar. Q4 may be slightly better.
Speaker 8: okand that's mainly driven by kisleti.
Speaker 10: Okay that's helpful. Thank you, and then just if I could ask se, we were kind of really lower our care and maintenance costs to specifically extrtony in Q1. That was our biggest miss. Can you give us some guidance on what these care and maintenance costs are going to be?
Speaker 10: It's like nine million or something in the quarter.yes George saw our overall care and maintenance costs on an annualized run rateor around two and a half three million bucks, I believe.
Speaker 4: In terms of the quarter we had. A heavy impact is we're transitioning from the shutdown of the, the underground and then the transition of the plant, So I'd say an exper ordinary impact on the quarter. Coupled with that we had earthy retirements that we had to cost in Q1 as well any other kind of departures that we saw. Those were're accumulated in Q1 costs and we we may see a bit more of that in Q2 before we normalizede to the numbers that George mentioned.
Speaker 12: ok going sfield just so. Yes, we can be used for looking Tony separately from scurious, because we're assuming scurious starts productive, starts construction, in the second half, So I won't have care maintenance costs. That's correct.
Speaker 5: But just to summarize, I think the future quarters will be lower than we expected, to be lower than what we had in Q1. If we use like one million a year for drtony, is that reasonable?
Speaker 5: I think that's a reasonable number like we had some for example like Joe mentioned. We had some labor costs that's for Tony that may may still have some of that could come through in Q2 but I think most of that has come through in Q1. So we expect the future quarters will be less than what we experience in Q1 okay.
Speaker 10: And then maybe just on the CapEx and OpEx review that you're looking at, and then I'll get to my final question, which is inflation.
Speaker 13: When you're looking at all of your operations. Are we also to assume that you're going to review scories againcan you repeat that? Will you also be reviewing the CapEx and all-pex of squius again? You just did the feasibility study in December , but is that under review also in your to review process?
Speaker 4: On the inital capital costs and maybe just reiterate where we're out of the project. Yet the main body of the plants in place, we believe the overall capital costs is largely reduced relative to other projects that are starting from scratch. So all of grinding crushing lolotation, concentrate handling, all the major years actually set in place and the fact we're putting the building up around it. The exception in the processing area is just the filters and we went out for competitive bids in the first quarter for the filters.
Speaker 4: And those bits have come in slightly below what we budgeted, in spite of the higher inflationary pressures on steel. So that, I think, was a pretty good indicator and that's essentially the biggest piece of equipment yet to be procured. And when you look at what's left to be done, there's a lot of civil work. There's a lot of plumbing and piping and wiring to be done in the plant. But at this stage we're pretty comfortable with those capital costs. We have civil works to do and construction of the dam. Obviously diesel prices are up and during the construction phase we're not Gener, we're not consuming a lot of electricity, So we don't see those issues having a major impact or a material impact on that capital cost estimate. Obviously will' continue to monitor that but theatton, I think we re we're in a pretty good position still on our capital estimate of December .
Speaker 13: Okay And just on the inflationary pressures, I guess would you say it's you're seeing it at all of your operation, or is it more localized to Turkey and Greece because of it's a closer to the the Ukraine, Russia situation, where other companies are feeling more exposure on consumable than other?
Speaker 4: Id say that unique thing in our situation is that in our two operations in Europe are seeing higher electric energy costs and it's being driven by the natural gas cris And so costs are up materially in both countries now and in Turkey we're having some benefit from- the currency is still denoted- but we don't have that sort of counterbalance effect in Greece. So I think I think our electric power costs are up their double what we had budgeted in Greece and we're not seeing that kind of impact in Turkey due to the ffectx counterimpact.
Speaker 13: Then just I don't have to, just just a comment on us. So just a to add on to what George is indicated, I think I would say the. The most significant impact of inflation is in Turkey, as I mentioned. You know the publis rate was quite high between 50- 60% at the end of 2021, but we're not seeing that come through to the bottom line because of the, because of the lira. But in Turkey, probably the most significant cost is the is a diesel impact at kistoday, but it's not A. it's not a huge amount. It's like probably around less than 5% of our of our consolidated direct cost. It's really really just the use at kistoday because it is an open pit mine. All the other mines are on the ground in Turkey. The biggest impact is George. Dell line has been the electricity, and you know it, but at the same time, electricity on a consolidated basis.
Speaker 5: Is about 10% of our total direct operating costs, So again, it's not huge, huge percentage. Maybe, if still, can remind us what the oil price or diesel price did you use in your guidance for 2022 and what's the sensitivity for a $10 a barrel or 10% change in diesel price?
Speaker 11: So in terms of genas oldthe current price is about about a dollar 25. leader in Turkey.
Speaker 1: And everywhere else. In terms of diesel at DEF from trucrew, Greece and in Quebec, it's really not significant. So again, diesels about 3% of our total costs.
Speaker 6: And the impact on our costs, based on our 2022 guidance for sales, is probably on $13 anounce. It's not huge.
Speaker 10: They could alsoline. Thank you, I'll let someone, I'll ask.
Speaker 14: Thank you, Tona once again. If you have a question, please press thar than one the next question comes from Kerry Smith with Haywood Securities. Please go ahead.
Speaker 15: Thank pret. So have you comment, or maybe Joe, what is the great profile like at just today? Quarter-over-quarter this year is to create? Expected to be pretty flat and you're getting more ounces on the pad because you're getting more tons to the pad, or is the great profile actually going up as well?
Speaker 7: The great profile is relatively flat. Carry maybe made slightly better later in the year andi don't have it in front of even anywhere're right around seven quarter over quarter, but it's it's really about getting comes on the pad at mine grade. So what we saw in Q1 a bit though, is that wouldn't be we had.
Speaker 16: We picked up some tons above cut off that were on the lower end of grade. That kind of pushed us down. So as we look forward in managing grade, those mostst marginal tons above cut ff we will not bring to pad, which will help us with grade for the balance of the year.
Speaker 7: Okay but we, we are stockpiling that lower grade or later placement.
Speaker 15: Okay okay. And when you start putting tons on to the North pad, when? When is that actually be available to be receiving tonnage, because that'll obvly help to leach curs to.
Speaker 16: Well I think that'.s there's two answers to that question. one of them is that you know we did place additional inner lift plastic on on the South leach pad for the early placement of h P G R ton. As we work through what we expected to be, getting our glomeration right and we're going to extend that a little bit, the we will be available for placement probably mid Q3. But you know, one of our concerns are just making certain that we're really confident on agglomeration quality before we go to the North leach pads, since that's the the foundation. But we will be on on clean plastic nonetheless on South and- and I would say that we'll have that, you know, we'll know that more clearly by midyear- is to how we wish to deploy that going forward. But you're right, mean that North leach pad is really attractive.
Speaker 15: Right right, okay. And then just going back to time dispersion on the majority stand by cost, the nine point four million in Q1, So if it's 2, two and after to three million a quarter on a four basis in Q2, will still have some residual costs in there, sort of onetime things. What number are you expecting in in Q2 then like, is it going to be five million? Maybe your six million? Can you give any guidance?
Speaker 1: Carry its fill here. So I think you know, based on where, what we had in Q1 I would- I would say you know, probably less than five million, but I think it's probably in that ballpark- the quarter, and then then by Q3, you would be back to sortve this two and halfafter, three million it eries and you'd have all the one time things under ways right.
Speaker 6: Like Q3. You know, assuming we get, we get scuroious, a reconstruction started, then the care and maintenance costs related to the scur would end. Yeah okay, but I've talking, you re telling you.
Speaker 16: Car this is joeby end of year. We should be normalized fully but the under the start of the start of construction is curious offsets any residual labor that we 're.
Speaker 16: But still on the books, if we choose to maintain that people and then move it over to contract labor at the start of construction.
Speaker 15: Okay just so I'm clear, that two and a half a three million run rate is with scurious, not contributing any care and maintenance cost to that number rate. That's just toning ok.
Speaker 15: Okay and then Phil, just just going back to your comment about you're not really seeing any in U's dollar term, any a real cost deflation in.
Speaker 17: In Turkey by? Are your? Are you a cast perton? No ins for mining goingilling.
Speaker 17: gna, let's say on per time basis. They seem like they're going up at. But well, if they went up, a lot of lious, based on what I calculated and it seems like kised a is gone up a signal themounon as well. It was like 14 and a half a time and in Q1 and last year was slightly bow love box. So how should we think about your unit cost per time?
Speaker 17: At just want to eleft us on of go forwardso car. Just just to be clear to your question, specifically to Olympus and today yes yes, So like if if I look at your total cost mine for mining at Olympus from your Q1 in U's all have answer sold it's like 350 bucks a ton. That number last year was like was well below, that was 270 or something. So I'm just wondering about the all in cost per ton going forward at go Olympus and kis day.
Speaker 9: Which well, the kisadday kisad tons in Q1 2022, as I mentioned, were lower than Q4, was sorting higher than Q4, but they were lower than than the first three quarters of 2020. one So tons were down compared to.
Speaker 5: First few quarters of 2021 and we expect those tons will increase right paing. This is, joery. Are you thinking in total tons strip plus, or are you thinking in just or tons sort of? Are giving a numbers back in overtons? I think M just.
Speaker 15: Yes all in costs divided by tons, process tons, mill tons- reachedwe get back on the consolidated number. But just just for information, total tons moved in Q1 was higher than Q4, or Q3 at that yes, today.
Speaker 14: Just for that, at the St yal. Yes, So in my numbers, in Q4 at tichhaag your cost per ton to the pad was about 19 bucks a ton. In Q1 it was about 14 and a half, but last year average was less than eleven.
Speaker 17: So I'm just wondering about that number on a go four basis is it going to get back to around 11 bucks of ton and then I have the same issue with Olympia. Since the cost per ton mil. This is quite a bit higher in Q1 that it was in it was higher in Q4 as well but it was certainlyof. The higher than last year. Last year was kind of a a year when every quarter you kind of incrementally. We're doing better on the cost side as you ve got more tons up but then off C Q1 was pretty tough 40. So that's what I was trying to get a handle alongcarried. vil So.
Speaker 6: So tons in Q1 2022 orges over two million tons for casadag. In Q4 of last year the tons were below two million tons, So that's why you had a higher cost per ton in Q4, but then the previous three quarters were over three million tons.
Speaker 5: So you had a bun of lower cost per toncy. That's why you see that fluctuation and, I think, going forward. In 2022 we expect to be over three million tons for the.
Speaker 6: Approaching, on a quarterly basis, above that, above that, that placement rate in per quarter. So you should see the cost per ton drop again. Okay okay So okay So, three million ton quarter and the cost should come down then. And then, what about? What about olympius? Just on the cost, and they told cash cost guidance. I was looking at the grade.
Speaker 17: In Q1. Obviously it was pretty low. Your guidance with seven point four grams it seems like, based on the ore body 'would be pretty tough to average seven point four grams this year. But what will the grade look like at atlymthpia this year and is it? Is it going to probably be more in the seven Grand range, which is kind of what I was thinking?
Speaker 16: So Q2: todayate carry. We're placing at seven point four or we'remining at 7.4, and for the full year we're working to maintain the grade as close to that as possible but will be in forecast. We're seven three 7, four.
Speaker 1: Okay So we're looking to maintain that back grade rate as we have as we have at the start of Q2 and.
Speaker 5: Carry George one of one of the other issues in Q1 because we have significant byproduct credits. At olympius you see lumpiness in our costs and it's dependent on the lens in con. Those shipments occur when we've got a full shipment to ship and sometimes those costs are also impacted just by timing: tough storms at the end of the quarter we CAn't get a ship out and it moves to the next quarter. So when you look at Q1 with, we had a lot lower byproduct credits against our cost relative to Q4 just through to the lumpiness and timing in byproduct sales. So it's only A. it's only a part of the story. The COVID-19 impact were part of it. We also ended Q1 but or stockpiled on the ground, which is not typical that Olympia. So it's kind of position. It is a bit better to start Q2.
Speaker 4: So a number of factors that don't show up in the bottom line that I think don't give you an indication of why we we're confident we're going to improve performance. Out of leng is. This quarter is unwhole and georgge or phill. Your TCRCs: have they gone up significantly in Q1 from what you were paying last year for the concentration? Because you don't produce a lot of con, So you probab not getting great terms, but have the TCRC's gone up significantly in Q1 or should we expect me to be much higher? one forward, and you've talked about it a little bit in the commentary.
Speaker 11: So kry So last year there was a a new Chinese VAT that that was introduced for concentrate from Olympus that was being shipped to Chinese smelter sol. That was a 13% VAT. You know we have we had planned to offset a big big chunk of that and.
Speaker 11: Part of the plan was to ship thati think it's up to 50% of the production- to Russian, to a Russian smelter and unfortunately, with thesanctions that have been imposed recently because of the big ongoing conflict, we're redirecting some of that and we're we've managed the direct a small portion of it at this point, but we will continue to look for opportunities to redirect it.
Speaker 11: To different melters and avoid the 13% V attm llst of the Chinese structs. Yes, to be clear, we're no longer shippting anything to Russia and so some of that now is going to China, but some of it's going else where' avoiding that the at. So that' right now that's a negative against what we budgeted, those shipments going to Russia. So part of that we're paying, but the at into China and part of it. We have found another customer that's testing the concentrate. Hopefully will be able to wramp that up and carry just the impact of the.
Speaker 11: I' not being able to shship to Russia is about $5 million. Okay okay, that was A. you want myself. No tot, that's to ER. Okay, So the year I got you. Okay yes, So you're not really seeing any significant increases into treatment charges generally, it's just as tax. That's causing a bit a bit of a problem then. ok, I got it.
Speaker 17: Great great Thanks very much for appreavated thanks youryonce again. If you have a question, please press Star than one.
Speaker 2: The next question comes from fahotree with credit. swee. Please go aheadgood morning thanks to take my question. That's pretty quick on. scury can you just remind us that you mentioned the snowfall impact on some of the other operations was there any impact on scurious Thank.
Speaker 1: We did we. We didn' have no exquious, but it didn't impact us anyway. In as far as critical path or project we were able, we were able to slow down the steel erection and building cladding during that time period and we have since picked up without any type of penalties.
Speaker 7: So really no impact and no significant impact on the water systems or drainage or collection or that kind of thing three.
Speaker 18: Okay great, I just want to confirm that, Thank youthat is all the time we have for today, and this concludes the question-and answer session and today's conference call. You may disconnect your lines. Thank you for participating and have a pleessant day.
Speaker 19: The.