Q1 2022 Golden Minerals Co Earnings Call
Greetings and welcome to the Golden Minerals Company first quarter 2022 earnings conference call and webcast. At this time all participants are in a listen-only mode.
Greetings and welcome to the Golden Minerals Company first quarter 2022 earnings conference call and webcast. At this time all participants are in a listen only mode.
A question and answer session will follow the formal presentation. If anyone should require operator assistance during the conference, please press star zero on your telephone keypad. As a reminder, this conference is being recorded. I would now like to turn the call over to Karen Winkler, Director of Investor Relations. Thank you. You may begin. Thank you, operator, and good morning, everyone. Welcome to today's earnings call, during which we'll be discussing operating and financial results for the first quarter of 2022.
A question and answer session will follow the formal presentation. If any once you require operator assistance during the conference. Please press star zero on your telephone keypad. As a reminder, this conference is being recorded I would now I would like to turn the call over to Karen <unk> director of Investor Relations. Thank you you may begin.
Thank you operator, and good morning, everyone. Welcome to today's earnings call during which we'll be discussing operating and financial results for the first quarter 2022.
Before we get started, please note that certain statements made by management today will be forward-looking within the meaning of applicable securities laws.
Before we get started please note that certain statements made by management today will be forward looking within the meaning of applicable securities laws.
Forward-looking statements involve known and unknown risks, uncertainties, and other factors that may cause actual results or performance to be materially different from those expressed or implied by such statements.
Looking statements involve known.
And unknown risks uncertainties and other factors that may cause actual results or performance to be materially different from those expressed or implied by such statements.
Please refer to our most recently filed Form 10-Q for details of risks and other important factors that could cause actual results to differ materially from those in our forward looking statement.
Please refer to our most recently filed Form 10-Q for a detailed appraisal.
Other important factors that could cause actual results to differ materially from those in our forward looking statements.
On today's call, our Golden Minerals President and CEO , Warren Reign, and our Chief Financial Officer, Julie Weidman, following their prepared remarks, they will be available to answer questions. This webcast will also be available for replay on the company's website tomorrow, where it will remain posted for approximately 30 days. I will now turn the call over to Warren.
On today's call are Golden Minerals', President and CEO , Wang and our Chief Financial Officer, Julie Wiedeman. Following their prepared remarks, they will be available to answer your question. This.
This webcast will also be available for replay on the company's website tomorrow, where it will remain constant for approximately 30 days.
I'll now turn the call over to Warren.
Thank you Kevin.
I will do mine continues to operate as anticipated and continues to generate significant cash flow for the company.
Our Rodeo Mine continues to operate as anticipated and continues to generate significant cash flow for the company.
From inception in January 2021 through the end of March 2022, we've produced around 18,000 ounces of gold and 65,000 ounces of silver from Mordeo with cash costs averaging $982 per payable gold ounce net of silver credit.
From inception.
In January 2021 to the end of March 2022.
Produced around 18000 ounces of gold and 65000 ounces of silver similar deal with cash cost averaging $982 per payable gold ounce of silver credits.
In the first quarter of 2022, we produced about 3600 ounces of gold and 14000 ounces of silver.
In the first quarter of 2022, we produce about 3600 ounces of gold and 14000 ounces of silver.
Our 2022 guidance for Rodeo remains unchanged.
Our 'twenty to 'twenty two guidance to a day one remains unchanged.
And we estimate this processing 175,000 to 185,000 tons of material through our oxide plants at an average rate of about 500 tons per day.
Estimate Chris processing, 175200, 85000 tonnes of material through our oxide plants at an average rate of about 500 tonnes per day.
Payable production for 2022 is estimated at approximately 12,000 to 14,000 ounces of gold and 42,000 to 47,000 ounces of silver.
Payable production for 2022 is estimated at approximately 12000 to 14000 ounces of gold.
And 42000 to 47000 ounces of silver.
We estimate average grades during 2022 will be 2.9 grams per ton gold and 9.4 grams per ton silver.
We estimate average grades during 2022 will be two nine grams per ton gold and 94 grams per ton silver.
These grades are lower than what we recorded in 2021 since we are now working into a lower grade area of the resource. However, they are as expected in the mine plan.
These grades are lower than what we recorded in 2021 since we are now working into a lower grade area of the resource. However, they are as expected and the mine plan.
Their recoveries are projected to average about 80% to both gold and silver.
Mill recoveries are projected to average about 80%.
For both gold and silver.
We anticipate higher total plant throughput in 2022 compared to 2021 that will help offset the lower gold grades for 2022 with similar total payable gold production this year, although the higher unit cost.
We anticipate higher total plant throughput in 'twenty to 'twenty, two compared to 2021 that will help offset the lower gold grades from 'twenty to 'twenty two the.
Similar similar total payable gold production this year.
The higher unit cost.
Cash costs for payable gold outs, net of silver by-product credits are expected to be between $1,100 and $1,200 during 2022.
Cash costs per payable gold ounce of silver byproduct credits are expected to be between 1100 $1200 during 2022.
We continue to advance our Vela Dania underground silver gold mines ahead of making a production restart decision.
We continue to advance our Velordania underground silver gold mines ahead of making a production restart decision.
The bio oxidation or biox testing of pirate concentrates in South Africa has now been completed.
The bio oxidation or biotics testing of pirate concentrates in South Africa.
That's now been completed.
We are assessing the results and incorporating them into the final plan for the proposed biox plant at Vellardania.
We are assessing the results and incorporating them into the final plan for the proposed by Explants at Dania.
We have nearly completed the flotation optimization test work also in South Africa, and expect to have results soon to incorporate into the final production plants.
We have nearly completed the flotation optimization test work also in South Africa and expect to have results soon to incorporate into the final production plan.
We began underground test mining last months to determine that with our chosen sub contractors, we can control mining dilution, which is critical to the success of the project.
We began underground test mining last month to determine that with our chosen subcontractor, we can control mining dilution, which is critical to the success of the project. Testing is anticipated.
Testing is anticipated to run into next month.
We intend to make the formal decision on resumption of mining activities within the next few months.
We intend to make the formal decision on resumption of mining activities within the next few months.
As previously communicated, if we make the decision to restart mining activities at Bellardania, we estimate construction of the BIOX plant would take roughly one year, running into mid-year 2023.
As previously communicated if we make the decision to restart mining activities at the other dania.
Yes to make construction of the buybacks that would take roughly one year running into mid year 2023.
It is possible, depending in part on metals price, that we could begin mining with a three to four month ramp up period and begin selling silver lead and zinc concentrates while stockpiling the pirate concentrates in which most of the gold is contained until the BIOX facility is complete.
It is possible depending in part on metals price that we could begin mining with a three to four month ramp up period and begin selling silver lead and zinc concentrates stockpiling the pyrite concentrates in which most of the golden's contained until the buy X facility is complete.
Moving onto our exploration properties in April we began a third drill program at El Cubo Gold Silver project in Chihuahua, Mexico.
Moving on to our exploration properties, in April we began a third drill program at the Okevo Gold Silver Project in Chihuahua, Mexico.
This program was designed to further delineate the previously encountered vein-hosted mineralized intervals.
This program is designed to further delineate the previously encountered vein hosted mineralized intervals.
to earlier drill programs identified multiple potentially economic grade areas in realization at Yokevo.
Two earlier drill programs identified multiple potentially economic grade areas of mineralization that El Cubo.
The newly recognized southern high-grade zone is open to the south on the pertinency of AIM. Most other high-grade zones have also not been closed off.
The newly recognized southern high grade zone.
Open to the south on the person thats either in.
Most other high grade zones have also not been closed off.
We expect this third round of drilling will give us sufficient information to estimate an initial gold silver resource.
We expect this third round as drilling will give us sufficient information to estimate an initial gold silver resource.
In January , we reported results from the first drill program ever conducted at our Cerrita Este project in Salta, Argentina.
In January we reported results from the first drill program ever conducted other Cerita Este project in salt to Argentina.
That drilling identified shallow oxide gold with widths and grades that are potentially economic.
That drilling identified shallow oxide gold with widths and grades or potentially economic.
We have submitted new permits for trenching and additional drilling that we plan to complete during a 2022 field campaign.
We have submitted new permits retrenching and additional drilling that we plan to complete during a 2022 field campaign.
Hum.
Last week we announced that John Gallesini has joined Goldman Rose as Chief Operating Officer effective May 9th.
Last week, we announced that John <unk> has joined Goldman roles as Chief operating officer effective may nine.
John has more than 30 years of mining operations experience and has successfully managed numerous underground operations as well as some of the world's largest open pit mines.
John has more than 30 years of mining operations experience.
Subsequently manage numerous underground operations as well as some of the world's largest open pit mines.
We will be responsible for leading our mining operations as gold minerals continues to grow.
He will be responsible for leading our mining operations Golden minerals continues to grow.
Additionally, I'm pleased to introduce Julie Wiedemann.
Additionally, I'm pleased to introduce Julie Weidman, who joined the company earlier this year and stepped into the chief financial officer role upon Bob Vogel's retirement at the end of March.
Joining the company earlier this year and stepped into the Chief financial officer role upon Bob Vogels retirement at the end of March.
Julie joins us with over 30 years of accounting and finance experience, including 10 years of mining industry work at Schultz Dodge, a number of years at smaller domestic and international mining companies, and time at Deloitte & Touche.
Julie joins us with over 30 years of accounting and finance experience.
Including 10 years of mining industry work at Phelps Dodge.
Number of years at smaller domestic and international mining companies and time that Deloitte and touche.
I will now hand, the call over to Julie <unk>.
I will now hand the call over to Julie to present the financial results for the first quarter.
<unk> financial results for the first quarter.
Thank you Lauren.
For the first quarter 2022, our operating margin at the Rodeo operation was approximately 3.2 million from revenue of 7.5 million received from the sale of approximately 3,850 ounces of gold in Dore.
For the first quarter 2022, our operating margin at the Rodeo operation was approximately $3 2 million from revenue of $7 5 million received from the sale of approximately 3850 ounces of gold into Iraq.
The plant operated at a rate just over 525 tons per day, and the average grade of gold processed was 3.1 grams per ton for the first quarter.
The plant operated at a rate just over 525 tons per day and the average grade of gold process was three one grams per ton for the first quarter.
Cash operating costs.
Cash operating costs, net of silver by-product credits, were about $1,164 per ounce for the first quarter of 2022.
Silver byproduct credits were about $1164 per ounce for the first quarter of 2022.
As anticipated, this cost per ounce is higher than the average cost for the full year 2021 due to the decrease in the average grade.
As anticipated this cost per ounce is higher than the average cost for the full year 2021 due to the decrease in the average grade.
While the operating margin from a deal in the first quarter 2022 was positive we reported negative after tax income of about $300000.
While the operating margin from Rodeo in the first quarter 2022 was positive, we reported negative after-tax income of about $300,000.
Exploration expenses were approximately $1.7 million compared to approximately $0.8 million in the first quarter of 2021.
Exploration expenses were approximately $1 7 million compared to approximately <unk> eight.
8 million in the first quarter of 2021.
GNA costs for the first quarter of 2022 were 1.3 million compared to 1.5 million in the first quarter of 2021.
G&A costs in the first quarter of 2022, well $1 3 million compared to $1 5 million in the first quarter of 2021.
Expenditures in Q1 of 2022 for El Kavar were 0.1 million similar to the same quarter in 2021 and are expected to continue at approximately that level going forward.
Expenditures in Q1 of 2022 for Alcazar, or <unk> 1 million.
To the same quarter in 2021 and are expected to continue at approximately that level going forward.
Care and maintenance expenses at Ballardania was approximately 0.5 million, which was slightly higher than the first quarter of 2021. Due to additional consulting costs incurred this year to prepare the TRS in order to comply with the new SK1300 regulations required in our 10K filing.
Care and maintenance expenses that valor Dania was approximately <unk> $5 million, which was slightly higher than the first quarter of 2021 due to additional consulting costs incurred this year to prepare the Trs in order to comply with the new S. K 1300 regulations required in our 10-K filing.
Income tax expense of just under 1 million was accrued for the first quarter of 2022 due to the profitability of several of our Mexican entity.
Income tax expense of just under 0.1 million was accrued for the first quarter of 2022 due to the profitability of several of our Mexican and
Yeah.
We expect continued positive operating margins from Roedale throughout 2022.
We expect continued positive operating margin from Rockdale throughout 2022.
As noted in both our 10-Q filing and our recent 10-K filing, we are estimating an operating margin of between 7 and 9 million for the full year of 2022. This assumes plant throughput levels of approximately 500 tons per day with slightly lower grades compared to 2021 of approximately 2.9 grams per ton for gold and 9 grams per ton for silver.
As noted in both our 10-Q filing and our recent 10-K filing we are estimating an operating margin between seven and 9 million for the full year of 2022.
It's the same plant throughput levels of approximately 500 tons per day with slightly lower grades compared to 2021 of approximately two nine grams per tonne for gold and.
<unk> nine grams per tonne for silver.
This operating margin estimate assumes future gold prices of $1,800 per ounce, which is below current levels, and a silver price of $25 per ounce, which is slightly higher than current levels.
This operating margin estimate assumes future gold prices up 18, $800 per ounce, which is below current level and the silver price of $25 per ounce, which is slightly higher than current levels.
We ended the quarter with about $11.7 million of cash. That cash flow for the quarter was negative $0.5 million due primarily to an increase in inventory and that receivable.
We ended the quarter with about $11 7 million of cash net cash flow for the quarter was a negative <unk> 5 million due primarily to an increase in inventory and that receivable spending.
Spending on capital items has significantly dropped off compared to last year, with only 24,000 spent during Q1 of 2022, compared to 0.5 million spent in the first quarter of 2021.
Spending on capital items has significantly dropped off compared to last year with only 24000 spent during Q1 of 2022 compared to <unk> 5 million.
In the first quarter of 2021.
Assuming metal prices averaged $800 per ounce for gold and $25 per ounce for silver Wheaton.
Assuming metal prices average $1,800 per ounce for gold and $25 per ounce for silver, we expect our cash balance to remain around $10 to $11 million over the next 12 months through March 31, 2023, depending on spending on exploration projects and costs associated with the potential restart of the valor dangling line.
Our cash balance to remain around $10 million to $11 million over the next 12 months through March 31, 2023, depending on spending on exploration projects and costs associated with the potential restart of Dania mine.
These projections include the $2 million payment scheduled to be received from Fable in December of 2022.
These projections include the $2 million payment scheduled to be received from stable in December of 2022.
The cash projection does not assume any other forms of debt or equity finance.
The cash projection does not assume any other form of debt or equity financing.
I will now turn the call back over to the operator who will take your questions.
I will now turn the call back over to the operator, who will take your questions.
Thank you we will now be conducting a question and answer session.
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One moment, please while we poll for your questions.
Our first questions come from the line of Jake Kelsky with Alliance Global Partners. Please proceed with your questions.
Our first questions come from the line of Jay <unk>.
<unk> with Alliance Global Partners. Please proceed with your questions.
Hey, guys. Thanks for taking my questions.
So just starting with the test mining activity at Baylor, Deania, um, so we expect results there before the end of Q2 and then just building off that a bit. I think Warren, you mentioned, you know, what, what metals prices would we need to see for you to begin mining activity at Baylor, Deania, while the biox plant is being constructed?
So just starting with the test mining activity at dealer Danielle.
Should we expect results there before the end of Q2, and then just building oxide a bit I think Warren you mentioned, what what metals prices would we need to see for you to begin mining activity at dealer Danielle while the biopsy plant is being constructed.
Yeah, Jake. Thanks. Thanks for the question and appreciate you being here
Yes, Jay Thanks, Thanks for the question and I appreciate you being here.
We should have our test mining results completed.
We should have our test mining results.
<unk> in June .
in June , and I expect to be able to talk about those results toward the end of June . It might be earliest Q3 when we actually get them out there into the public space, but that timing is holding fast. You know, we're in the midst of the testing now. I think we've been at it for about
And I expect to be able to talk about those results towards the end of June it might be earliest Q3.
When we actually get them out there into the public space.
That timing is holding fast.
We're in the midst of the testing now I think we've been at it for about a 20.
20 odd days or so, and it's about a 45 day test. So we should have everything firmly in hand and plug back into our models to know quite well if we're doing what we need to do in terms of controlling deletion.
20 days or so.
It's about a 45 day test so we should have everything firmly in hand, and plug back into our models too to know quite well if we're doing what we need to do in terms of controlling dilution. So definitely expect to have that around that time frame, but cant promise it will be right before the end of Q2 it might be early as Q3.
So definitely expect to have that around that timeframe, but can't promise it will be right before the end of Q2. It might be earliest Q.
For the second part of the question, Jake, you know, the pricing that has been key for, you know, silver, lead, you know, it's really based on the silver. We do get some gold in the lead concentrate and so go process. So, but really, we need a sustained silver price over $25 now to make it really interesting enough to proceed.
For the second part of your question Jake.
Now the pricing that has been key for silver.
Silver and lead.
It's really based on the silver we do get some gold's and the led concentrate some gold price also but really we need.
Sustained silver price over $25 an ounce.
To make it really interesting enough to proceed.
you know, before we get the BIOX up and running. So, assuming we can get that, you know, we'd be okay to start, I think, but it will require a board approval to get there.
Before we get the biopsy supplemental.
So assuming you can get that would be okay to start I think but they will require.
<unk> approval to get there.
Okay, that's helpful. And then, just on exploration,
Okay. That's helpful.
And then just on exploration.
What's the plan look like for the rest of this year, both at Rodeo and Yokevo? Indeed, I think there's any opportunity for further mine life extension at Rodeo. I know you guys have extended it by a couple quarters, but I'm just curious on your thoughts there.
What's the plan looks like for the rest of this year, both at rodeo and you'll keep though.
And do you think there's any opportunity for further mine life extension at Rodeo I know you guys have extended it by a couple of quarters, but I'm just curious on your thoughts there.
Yeah, we did some additional drilling in the Q1. We haven't really reported results. We're still going to put those into the model. We'll probably have a model update. I don't think it'll be a huge significant change. It'll be incremental.
Oh, Yes, we did some just some additional drilling.
In Q1, we haven't really reported results were still.
We're going to put those into the model will probably have a bottle update I don't think there'll be a huge.
<unk> significant change will be incremental and we expect to do a little bit more drilling at rodeo sometime during the year, we don't need to do it right away. Its on the southern end of the deposits that we don't get there until.
We expect to do a little bit more drilling at Rodeo sometime during the year. We don't need to do it right away. It's on the southern end of the deposit. We don't get there until really in 2023. So we may put that off a bit, but there is still the the possibility of extending my life at Rodeo for another.
In 2023, so we may put that off a bit but there is still the possibility of extending mine life at <unk> four.
Other.
quarter or two, let's say, depending on results.
Quarter or two let's say depending on results.
That's still open. The southern end of the deposit is open still. Plus, there's some other exploration targets nearby that we'll get to as we have the exploration budget to do so.
That's still open.
Southern end of the deposit is open still plus theres some other exploration targets nearby.
We'll get to.
As we have the exploration budget to do so.
We're definitely looking to continue drilling there to try to get enough information to put out a resource update.
Youll kilo were definitely looking to continue drilling there to try to get enough information to put out a resource updates.
Now, a first resource at your keyboard, let's say.
The first one sorry.
Tivo, let's say.
And they're just going, well, we're drilling now. We'll see how that goes, and then we'll drill until.
And then just going well we're drilling now.
We'll see how that how that goes we'll.
We'll drill until we have enough information.
And we have enough information to be firm about what we think the resource looks like there. But we've found about, I think, 4,000 meters to start.
B firm about what we think the research it looks like there, but we've planned about I think 4000 meters to start with.
Okay, that's all for me. Congrats again on a good quarter desk.
Got it Okay. That's all for me congrats again on a good quarter guys.
Thanks, Joe I appreciate it.
Thank you. Our next questions come from the line of ICOEA with H.C. Wainwright. Please proceed with your questions. Hey there, thanks for taking
Thank you. Our next question is coming from the lineup.
<unk> <unk> with H C. Wainwright. Please proceed with your questions.
Hey, there thanks for taking my questions.
Of course, you can learn exactly.
Good morning. Opening any newspaper, all one reads about this emplacement. I mean, today the number was the CPI inflation report, where once again well over 8% per April .
Opening any newspaper all unreasonable this inflation I mean today. The number was the CPI inflation report were once again well over 8% for April .
What are you guys seeing with the various forms of inflation? I'm not just talking about the obvious ones, like wage inflation, but I'm going to also just cost and duration of assays, that kind of stuff. And then when you're done with that, maybe just also go through some of the steps that you're going through to mitigate inflationary pressures, please.
What are you guys seeing with various forms of inflation and I'm not just talking about the obvious ones like wage inflation, but and then also just.
Cost and duration of assays that kind of stuff can you maybe and then when you're done with that maybe just also go through some of the steps that you are going through to mitigate inflationary pressures. Please.
Okay.
Yeah, that's a great question. It's evolving as you might expect. We are seeing the wage inflationary pressure in Mexico. Mexico had an internal.
Yeah.
That's a great question. It's it's it's evolving as you might expect we are seeing the wage inflationary pressure in Mexico, Mexico ahead of them.
Internal.
CTI about 7% last year, and we did have to increase wages both for union and non-union employees. So we do have that showing up in our cost structure. We're starting to see some inflation
CPI is about 7% last year.
We did have to increase wages for union and nonunion employees. So we do have that are now showing up in their cost structure.
Starting to see some inflation.
Certainly at the gas pump, for any kind of diesel or gas used in the operation, that's gone up substantially.
Certainly at the gas pump for any kind of diesel or gas used in the operation.
That's gone up substantially.
since the worldwide oil shortage, if you will, and we are starting to see some increased cost in direct
Since the.
Worldwide oil shortage, if you will.
And we are starting to see some.
Increased cost in direct.
Supplies, the service costs are only just now starting to show up. So, you know, what you can do about it basically is you push back to the extent you can and eventually you have to compromise. Prices will go up, costs will go up. I think they're still manageable. There's nothing outrageous about it. But I think we can anticipate that, you know, cost of the operation will reflect the overall inflationary pressure.
Supplies. The service costs are only just now starting to show up.
So you know what you can do about it basically you're saying.
Pushback to the extent Mccann and eventually you have to compromise.
<unk> will go up costs will go up, but I think theres still manageable theres nothing outrageous about it.
But I think we can anticipate the cost of the operation will reflect the overall inflationary pressure.
Yeah.
Fair answer.
Building on my last question a little bit, and I truly have absolutely no idea if there any inflationary impact on care and maintenance expenses, I am in particular talking about Bill Ardenian, obviously, I mean, I assume that besides slightly higher wages for security staff or staff in general, the impact on that should be essentially nothing, right?
Building on my last question, a little bit in a truly have absolutely no idea is there any inflationary impact on care and maintenance expenses.
In particular, following both the bill or Daniel obviously, I mean, I assume that precise slightly higher wages for security stuff or stuff in general the impact on that should be essentially nothing right.
You know, the bulk of that cost is the security cost of maintaining, you know, the integrity of the plants that are not in use to make sure no one comes in and rips them off, basically. And so we do get increased costs on the annual basis from our security provider. We don't see it immediately. We haven't gotten a new contract with that security provider, but that's the bulk of that care maintenance cost.
Yeah.
The bulk of that cost is the security cost of maintaining.
The integrity of the plants that are not in use to make sure no. One comes in in rips them off basically.
And so we do get increased costs on the annual basis from our secured you provided we don't see it immediately we haven't gotten a new contract with a security provider, but that's the bulk of that care and maintenance cost.
The other parts of it related to, for example, the filing, the update technical report for the SK-1300, yeah, we'll see some increased cost on that. It's on a consulting basis, so that's more direct. But they're not major increases. I think they'll show up maybe at about the inflation rates over time, but lag, especially for the security contract.
The other parts of it.
And related to for example, the filing the updated technical report for <unk> thousand 800, Yes, we will see some increased cost on that it's on a consulting basis. So that's more direct.
But.
They're not major increases I think Phil does show up maybe add about the inflation rates overtime, but lagging, especially for the security contract.
Okay, so it's fair to say that the 2024 numbers may not be the same given that it's lagging by, I guess we'll fully see it lagging a year, right?
Okay. So it's fair to say that 2024 numbers may not be the same given that its lagging by I guess will fully see it lagging a year right.
Yeah, yeah, about a year after is when we'll start seeing the increased prices on the security contract, for example, which is an annual contract that we would do with only the opportunity to change prices once a year. Awesome. Thank you all so much.
Yes about a year after is when we'll start seeing the increased prices on the security contracts for example.
Which is an annual contract that we renew with the opportunity to change prices once a year.
Awesome. Thank you all so much take care.
Thank you Heiko.
Thank you. Our next question has come from the line of Cedrici with fundamental research. Please proceed with your question.
Thank you. Our next question is coming from the line of Ricky with fundamental research.
Please proceed with your question.
Hey Warren, please see the Q1 results, if I may Warren, I have a macro question and a couple of company specific questions.
Hey, Warren.
Please see the Q1 results.
If I may one I have a macro question in a couple of company specific questions in terms of macro.
In terms of macro, is there current supply disruptions in all the crisis going on? Is that affecting gold and gold at all in any way?
Current supply disruptions in all those cases going on is that affecting goldman at all or in any way.
in terms of supply of materials. Into the sourcing materials for processing or mining or anything related, are you affected in all of your operations?
In terms of supply of materials.
And to the sourcing materials for processing or mining or anything.
Thank you.
Operator.
Oh well.
We're seeing some longer timelines, but we haven't had any shortages that have caused any change in our operation.
We're seeing some longer timelines, but we haven't had any shortages that has caused any change in our operation.
We are seeing some longer timelines for things like, you know, mill liners, expect to see longer timelines for some steel products, especially stainless steel products. And, you know, we're anticipating that in advance, for example, for the construction of the biox plant, assuming we go ahead.
We are seeing some longer timelines for things like mill liners.
I expect to see longer timelines for some steel products, especially stainless steel products.
So we're anticipating that in advance for example for the.
Construction of the buyouts planned assuming we go ahead.
We're looking at getting those orders placed as early as possible so as not to have significant delays in the construction schedule.
Looking at getting those orders placed as early as possible so as not to have significant delays in the construction schedule.
With your Q1 results, I was specifically surprised by the significant increase in the coverage
Got it.
Q1 is done.
Specific really surprised by the significant increase in recovery rate.
despite lower grades. Now, I know you mentioned in our last call that in Q04, recover rates had declined. How were you able to increase rates so much?
Despite lower grade.
Mentioned.
Carl.
In Q4.
Recoveries have declined.
To increase.
Sure Mike.
Q1.
But it's an interesting aspect of this ore deposit said that the recovery is higher with lower grades. It's usually not the case in precious metals deposits, but in this particular case at Rodeo where we see the highest grade of gold is where we see the strongest solidification, very strong solidification related to the deposit, the deposition of the mineral.
But it's an interesting aspect of this ore deposit said that that the.
The recovery is higher with lower grades, it's usually not the case in precious metals deposits, but in this particular case at rodale, where we see the highest grade gold is where do we see the strongest specification very strong certification related to the deposit.
The deposition of the mineral.
And where we have that very strong certification, we have more.
And where we have that very strong specification we have.
More than.
encapsulation of the gold in silica, which is basically the cause of the lower than ideal recovery in the gold circuit.
Encapsulation of the gold and silica, which is basically that the cause of the lower than ideal recovery.
In the gold circuit, so when the gold grade actually tails off a little bit there is not as strong specification theres less encapsulation. So you get better recoveries. So it's an interesting inverse relationship which is what is explaining the behavior of recovery versus the gold grade in my opinion and it's why we expect to have on average.
So when the gold grade actually tails off a little bit, there's not a strong sophistication. There's less encapsulation, so we get better recovery. So it's an interesting inverse relationship, which is what is explaining the behavior of recovery versus the gold grade, in my opinion. And it's why we expect to have, on average, no more of the 80% recovery going forward this year, because the grades will be a little bit lower.
More than 80% recovery going forward this year because of the grades will be a little bit lower.
got it thank you and then just uh... on the financing for valedinia uh... it seems like you might have to do a small financing with that be
Got it. Thank you and then just one.
On the financing for <unk>. It seems like you might have to do a small financing that would be coming from that.
You know, we're looking at all possibilities for financing and I think the preferred option, although we haven't made any decisions that will be a combination of a small amount of debts and also some forward sale of product.
Yeah, we're looking at all possibilities for financing.
And I think the preferred.
Option, although we haven't made any decisions there will be a combination of a small amount of debt.
And also some forward sales of product.
So those would be the two favorite choices and we haven't made a decision on either one yet, but yeah, obviously we'll need to have a little bit of additional income, additional cash to be able to complete the construction for the BIOX plant once we have a decision to go forward.
So those would be the two favorite choices and we haven't made a decision on either one yet, but obviously, we will need to have a little bit of additional income.
Additional cash to be able to complete the construction for the bio <unk> plant.
Once we have made a decision to go forward.
Just one more thing, any updates from Barrick on LQR?
Got it just one more thing any update from Barrick on QR.
Nothing.
Yeah.
Going forward, they put together a plan to drill this year. They have their permit in hand. I expect them to start drilling this year. I haven't gotten a firm date for beginning it. We're going into the winter up there at Okvar.
Going forward, though they've put together.
Our plan to drill this year.
They have their permits in hand, I expect them to start drilling this year I haven't got a firm date for beginning at one <unk>.
Going into the winter up there okay.
Sure.
Which.
Depending on what elevation exactly they're drilling at can make drilling a little bit difficult, but I do still expect them to drill some holes this year and have some results available from that. So they're still going forward with their earning, but, but nothing, nothing firm in terms of a timetable for the drilling.
Depending on what elevation exactly they are drilling out can make drilling a little bit difficult, but I do still expect them to drill some holes. This year and have some results available from that so theres still going forward with their early but.
But nothing nothing.
Nothing firm in terms of the timetable for the drilling.
Appreciate the insight thanks, Lauren alright.
Alright, Thank you said.
Thank you there are no further questions at this time I'd like to turn the call back over to Karen Wegman for any closing comments.
Thank you. There are no further questions at this time. I'd like to turn the call back over to Karen Winkler for any closing comments.
Thanks, Darryl. This concludes today's call. Thanks to everyone for joining us, and we look forward to talking with you again next quarter. Have a great day.
Thanks, Darryl This concludes today's call thanks to everyone for joining us and we look forward to talking with you again next quarter have a great day.
Thank you. This does conclude today's teleconference. We appreciate your participation. You may disconnect your lines at this time. Enjoy the rest of your day.
Thank you. This does conclude today's teleconference. We appreciate your participation you may disconnect your lines at this time.
Enjoy the rest of your day.