Q3 2022 SSR Mining Inc Earnings Call
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Thanks, Operator, welcome to SSR Mining's third quarter 2022 results conference call.
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I would now like to turn the conference over to Alex on check.
Please go ahead.
Thank you operator, and Hello, everyone. Thank you for joining SSR Mining's third quarter 2022 conference call during which we'll provide an update on our business and a review of our financial performance.
Our third quarter 2022 consolidated financial statements have been presented in accordance with U S. GAAP.
These financial statements have been filed on Edgar and SEDAR.
And they're also available on our website.
To accompany our call Theres, an online webcast and you'll 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 , how often white CFO and Stewart Beckman C O O.
Now I will turn the call over to Rod for his opening remarks.
Alright, Thanks, Alex and Hello to you all and thanks for joining us.
In the third quarter, our business was clearly impacted by the suspension of the mine.
I'm pleased to report that operations restarted the VNS, some timber and ramped up smoothly.
Despite the bump in the road a chip business remains an incredibly strong position with a robust balance sheet that has enabled us our capital returns yield with more than 5% over two consecutive years.
Looking forward, we are in excellent shape with all four of our assets poised for a strong quarter, four where we expect to return to significant free cash flow generation.
Some key points from the quarter.
Reflecting on the negligible contribution from <unk> block and the delay of the ounces from Marigold, We produced 107000 gold equivalent ounces.
<unk> production is now 441000 gold equivalent ounces.
Third quarter, all in sustaining costs were 19, <unk> hundred $1 per gold equivalent ounce after absorbing more than $30 million in cash cost incurred a chip during the quarter.
Year to date, our all in sustaining costs, you're studying 131.
For gold equivalent ounce.
I'm going to speak a little bit more about guidance later on in the presentation.
Financially our balance sheet and free cash flow outlook supported the repurchase of $100 million in shares under our NCR to year to date.
Our aggressive execution on the NCI B, which is only announced in June has the company on track for nearly $160 million in capital returns in 2022, plus 5% capital return you.
On the growth front, where we see a.
So the first stage of the Checkmate <unk> extension project at <unk> block in the quarter.
With the infrastructure construction underway it keeps us on track for first production in 2023.
As a reminder, the project will add more than $1 2 million ounces to the chip will have life of mine plan for an incremental capex of around $17 million.
The results from the seat to PFS are expected next year.
<unk> Technical report, which showed a block and where you are planning to publish a new technical report for Marigold that will incorporate exploration success and potential production growth.
And it closed off the year, we are planning to release exploration updates for Marigold.
And copper Hill.
This is in addition to the positive drill results. We just released for the Checkmate <unk> extension.
Lastly, we continued to execute on our strategy of redeploying proceeds from noncore asset sales in our core jurisdictions with day announcement is a calico tip a transaction in October .
But it is moving onto the next slide on a S. G.
And I want to highlight our core values in the relation to some of the initiatives that we have.
In 2022, we have continued to deliver against the goals outlined in our annual sustainability report and as an example, we continue to rollout our integrated management systems with full implementation is expected by year end.
Furthermore, we are progressing the development of a water stewardship strategy as we seek to continually reduce our environmental footprint going forward. It.
There'll be more to come in our update early next year.
On slide number five.
As we advance into 'twenty three it's worth highlighting a long term stable platform, a 700000 ounces of annual gold production.
With all operations returning to steady state in the fourth quarter, we remain confident in our ability to maintain and grow on these production buys one through 2030 and possibly beyond.
Our solid foundation, coupled with the abundant growth targets being progressed across the portfolio means that these production graph is just the bisaillon. So as the kidney continued to build on.
On the slide six.
As a company we've established a proven history of disciplined and accretive M&A.
As well as project development.
This includes a solid Peter Ria, which closed in the third quarter and was another piece in our noncore asset sales that are generated $245 million in sale value. Since early 2021 more than two times. The street consensus is described to those assets.
As I noted we have successfully redeployed those proceeds into our core jurisdictions.
First with the Tiger acquisition, expanding our CB land package earlier this year and most recently with the cargo Tetbury transaction that expands our ownership and the entire trip with district, 280%.
These more recent transaction provides material operational financial and exploration synergies, including the elimination of further sorry, future all purchases payments to account for the previously existing ownership differential.
Circulars at cornerstone asset and we are pleased to increase our exposure to the districts longer term growth excellent exploration potential.
Given our strong track records.
Operations and project execution as well as a robust balance sheet, we continue to thoughtfully evaluate strategic opportunities across the sector.
We remain disciplined in our approach.
Going to slide seven.
Over the last two years, we have returned a strong free cash flow generation, which is reflected in our capital returns programs.
To that effect. So far this year were returned $144 million to shareholders through the base dividend and share buyback program.
And more impressively since the beginning of 2021 we've returned more than 90% of our free cash flow generation to shareholders, which is delivering on one of the key promises post the merger.
I was gonna move onto slide eight and discuss quarter.
The key points that are relevant to consider.
At the end of the third quarter Jetblue restarted as I mentioned at the end of the quarter and ramp up of the sulfide plant has gone extremely well, which was a significant achievement for <unk>.
Did I production at 441000 ounces.
All in sustaining costs of 30 131 reflects the suspension of choke lock and the delays if recovering gold at Marigold.
Their operations back to steady state.
To return to strong free cash flow in quarter four and beyond.
We're definitely excited by the stable of low capital intensity growth opportunities and continue to advance. So each one of these where a number of updates are expected before year end.
Moving onto slide nine.
Just want to make a few comments on guidance.
We are on track for a strong quarter for that have benign eyeballs to claw back the loss production and are now revising our full year production guidance to 620000 to 655000 ounces.
This reflects the slower than expected leaching at the stacked high grade ounces at Marigold, which Jay will elaborate on further as well as the shutdown the chirp line.
Tuna I have done a great job in meeting the original guidance, but unfavorable metal prices have impacted the gold to silver ratio, meaning less G on our conversion as compared to our original guidance and finally CP remains on track for the previously announce.
Improved production.
Got it that was announced last quarter, which is a great result for that time.
Our all in sustaining cost guidance has increased to 3800 15 to 3800 $45. The gold equivalent he asked to reflect ESG production guidance. This implies a quarter full production of around 200000 ounces and thus far in quarter. Four we are on track to meet that target.
As I mentioned, we have a number of exploration updates G before year end and moving into next year, we plan on releasing the PFS seek to and a new technical report for marigolds.
Internally, we're encouraged about the future for each one of the assets and the exploration.
The results as she continues to support this view.
So with that I'm going to now turn the call over to Alison who will then discuss our financial performance starting on slide number 10.
Thank you Rod and good afternoon.
Thanks to everyone on the call.
This quarter, we produced nearly 107000 gold equivalent ounces, bringing year to date production to 444000 gold equivalent ounces.
Equivalently sale of 97000 ounces in the quarter drove revenue of $167 million.
Attributable net loss for the quarter was 26 million or.
At 12 loss per diluted share and adjusted attributable net loss was negative $14 million or seven loss per diluted share.
It is worth highlighting that attributable and adjusted attributable loud and clear.
More than $40 million in care and maintenance costs incurred at sharply during the suspension of operation that occurred for almost the entire quarter.
On the right side of this slide I will touch on the reported seven sent.
Loss per diluted share is calculated based on the company's definition of adjusted attributable net income or loss per share.
Attributable net loss of 12 cents per share with adjusted for transaction cost associated with the sale of catheter, yet tax adjustment and minor adjustments for foreign exchange fluctuations during the quarter.
Turning to slide 11, we can talk about Ssris financial position.
At the end of the quarter.
Anthony maintained our cash and cash equivalent balance of nearly $800 million with net cash of more than $450 million.
The strong cash balance reflects the $100 million in share repurchases.
$44 million in dividend payments to shareholders.
$53 million in debt repayments and $35 million in dividend.
Venture partners, thus far during 2022.
With our existing net cash position and the expectation of a strong fourth quarter, our free cash flow.
I would like to reiterate our three priorities with respect to capital allocation within the business.
First and foremost we will continue to reinvest in growth within the business.
Including our exceptionally high return <unk> and check next tip extension project.
Which will account for approximately $300 million in total growth capital through 2025.
Second we are committed to maintaining a robust balance sheet to weather volatility in the commodity price environment and to ensure all of our capital commitment that servicing requirement and base dividend payments are fully funded even in the event of a potential downturn in the gold price cycle.
Our base dividend at seven cents a share can also whether gold price downturn as it is payable to a gold reserve price of $1350 per ounce.
We expect the $88 million remaining on the term loan to be repaid in full by the end of 2023.
Overall, we generated $371 million in free cash flow or $300 per gold equivalent ounce produced since the start of 2021.
Finally, we remain committed to capital returns to our shareholders as the third pillar of our allocation program.
This year, we have repurchased $100 million in shares year to date, coupled with our 40% dividend increase that was announced earlier. This year, we have returned nearly $150 million.
To shareholders, marking our second consecutive year with a capital return field above 5%.
Since the start of 2021, we have returned approximately $335 million to shareholders and produced one 2 million ounces during the same period.
Returning $270 to shareholders or cold equivalent ounce produced in that period of time.
Considered in aggregate, we have a clear capital allocation framework in place that we routinely execute on and we will continue to be disciplined in our approach to capital returns well into the future.
And with that I'll turn it over to stew for an operational update.
Thank you Allison as always I'll start with AIG as soon as we were pleased to restart operations at chip or at the end of the quarter. Following the completion of improvement initiatives required by the Turkish authorities. The suspension was disappointing, but it did allow us to reasons at a number of our processes and systems to improve that perform.
The smooth startup of operations is a testament to the work by the team.
Was it simply and separately, we received a number of outstanding permits in Turkey.
During the quarter, we will continue to work hard to maintain and build upon these relationships ensuring positive contributions to our stakeholders and host communities.
Safety and the care of that teens communities and the environment, our core values and we believe are also foundational to the business performance.
Moving onto slots Hussein and I'll talk about chip.
At CIT for the operation ramped up smoothly in the third quarter, an impressive accomplishment by our team given the length of the suspension.
As discussed on the Q2 call, we were able to accelerate maintenance on the auto club one during the suspension, including the completion of parcel a relaunch of the face brakes. As a result, there is no scheduled major plant maintenance in the sulfide plant for the remainder of the year, allowing us to operate you would've closed without major interruptions throughout.
Fourth quarter.
Operating time and production was very limited in the third quarter, so per ounce cost to not really meaningful for the full year, we expect to produce 180000 to 190000 ounces at an all in sustaining cost.
Ill fitting 145 to 30 and $175 per ounce.
The reduced production guidance reflects a careful and measured rate side of the operations as well as lighter than expected actually the oxide ounces.
With respect to the garage should growth initiatives we've received the.
The first phase of the operation of that Chuck My tip extension and construction on infrastructure is well underway and we remain on track to deliver first production in 2023. We're also progressing the situ project through PSS and expect to release the results of this more optimized project to the market next year.
We're excited about the potential of both these high return low capital intensity growth projects.
Obviously discussed coupled with the transaction will also provide.
Also helped us to drive long term cost and operational synergies, while allowing the exploration team sink their teeth into a number of Harley.
And shall exploration targets across the district.
Without the extra complexity is mixed ownership proportions for example, a checkmark type of extension of the half of the holes drilled in the October exploration release, we're on capital Pip a ground growing the deposit across the lease boundary and further reinforcing our rationale for the transaction.
Moving on to slide 14, and we'll update on Marigold.
Marigold, a guy and delivered quarter on quarter improvement by production Tommy continues to be impacted by the stacking of funnel material from our north pits.
Production of 52000 ounces at an all in sustaining cost of four $844 per ounce was behind expectations, but we are starting to see a positive trend with respect to leeching in the fourth quarter.
A couple of the drivers for the slower than previously predicted leach right with that.
We ended up with more tonnes of foreign material presenting in the north pit and schedule. This is a good thing.
And it was coincidental with less durable material coming from the Mackey pit and drive the proportional funds from the heap Leach.
Also on advanced from some subject matter experts based on experience at other sites. We started slowing the application of the Leach solution when leaching. It started with an aim to improve overall performance of the heap Leach.
As a result, reflecting on the year to date late cycle delays due to the stacking of funnel wall as well as the lingering challenges with shovel availability. We now expect full year production of 195 to 205.
Ounces.
At an all in sustaining costs of 40, and 110 to 40 and $140 per ounce.
The very poor performance of the commensurate P. C 7000, shovels has been compensated for by delayed retirement.
Of all the Dinky units and we expect to stack at about the budgeted ounces by the end of the year stacking of hard ride material continued in the quarter with more than 135000 ounces recoverable ounces stacked at a grade of 0.63 grams per tonne, which is very hard for.
Marigold over the second and third quarters. In addition October was amongst the months with 48000 recoverable ounces stacked to the patent just one month as.
As a result, we are forecasting a strong production in late Q4.
Which will carry into the first half of 2023.
Just as a comment another comment.
We have had a number of internal and external reviews of the heap Leach performance across the year and are confident that the gold will be recovered and that it is just timing.
Permitting continue to advance that ball man and the AI is expected of the expanded <unk> pit remains on track for 2024.
And exploration releases coming in the next few weeks, which aims to bring more mineralization and ultimately reserves within the <unk> areas.
We will build as much of this as possible into the updated <unk> Technical report that we expect to relates to the market in 2023 moving to slide 15 plays.
Maybe Q3 was generally in line with plan.
Following the record first half production demand continued to improve its underlying performance, but grades a little lower.
As a results of Q3, we expect to hit the lower end about previously upgraded full year production of 150 to 160000 ounces and extremely impressive outcome for the operation.
All in sustaining costs of 715 to $745 an ounce is also in line with prior expectations.
We are slightly ahead of schedule to mine.
Hi Reserve area very hard grade lighter in Q4.
So we were advancing exploration of the east.
The extension of that very high grade zone that delivered the app of reserves protect your first half production.
<unk> pinched out just below the loss, but that appears to open back up a couple of levels down and we expect that we will be able to more in this area in 2023.
Just need to do a bit more drilling and prove up designed before we can commit to the mine plan.
The plant has been operating at record throughput and.
We had a good sized run of mine stockpile in front of it just as a reminder, that the CB plant typically has capacity beyond that of demand and so I usually operates with little to no stockpile.
There are many highly prospective targets future development of CBD.
We have continued to advance drilling and modeling at the pool heat west target, which is potentially.
Options to Seabee, if successful Porky along with extensions to the resource now being exploited could potentially provide an exciting pathway to reframe CV.
Most importantly, we continue to push hard on extending our understanding of the resources and reserves around the current mining areas such as statistic is very high grade area that I mentioned earlier.
Supporting the longer term vision to Seabee, where also judiciously exploring the many targets within the very large and.
CB and recently acquired till I got tenement timing to bring more into our medium and long term resource pipeline.
On to slide 16, and I'll briefly discuss tuna.
Dana continued.
Continued its steady production and remains well on track for guidance of 125 to.
Seven 5 million ounces of silver at an improved all in sustaining cost guidance of 15% to 50 50, an ounce.
Before has been another strong quarter, so far for the asset and we are really pleased with the team and their success in Argentina. Despite a number of local headwinds, let's jump to slide 17.
To highlight some of the exploration ideas and initiatives that we progress through the quarter.
We progressed exploration programs across the business in the third quarter and are preparing to release results from these efforts in the coming months as you saw racist resource development and extension drilling yielded a number of exotic results at Chuck My tibia extension as we all the additional growth of the ore body.
To complement the production profile already outlined in the last technical report back in Q1 also in Turkey.
We have been having some great success drilling at the copper Hill target, which is a copper prospect surprisingly in the Black Sea region.
An update on that project as expected by the end of the year.
I've already discussed say they expect exploration in.
In Nevada exploration progress, both Nemo and regionally drilling at continues at Trenton Canyon, and Buffalo Valley and near pit drilling is showing encouraging results. We have six rigs on site and are undertaking geophysical studies to grow our understanding of the opportunities and update as these exploration wings.
As expected imminently and some proportion of the new millennium billing should be included in that next update our reserves and resources.
Lastly, our Pune, we kicked off drilling for the first time since 2018, we're currently focusing on an in pit and Naeem on targets and the team are really energized by some of the intercepts and grades that we've seen so far. The aim is obviously to grow demand reserve and extend the current knowing a lot of the Chinchillas mine and so tuna and currently we are.
Are exploring the discipline regional targets that show promise delivering a much longer loss at trainer.
Yeah.
Drilling of some of your more original targets around should she is in her cadence will be key in the coming months.
So in summary, we plan to release exploration updates, our copper Hill CB and Marigold in the next few months with the release of <unk> next year.
These exploration programs all aimed to deliver a high return buildout of medium and longer term production profiles.
Before I hand, it over to Q&A Goodbye, it's been very gratifying being part of the team building up transforming Alistair and then subsequently.
I'll leave the business in great hands with a fantastic management team.
Bolstered by Motorola being split into EBIT growth for all which John EBIT is leading and the new EVP operations in ESG role, we have a fantastic business with huge potential, but John and the new EVP ops are very accomplished and capable and I'm sure that they'll leverage off have successes so far.
Lead the business to bigger and broader achievements in the future. Thank you very much. Thank you Rob.
Yes.
Alright, Thanks, Julie and thanks Allison.
I also just wanted to take the opportunity to recognize the significant contribution she has made to the business.
As he leads all four operations in excellent shape and poised for a strong fourth quarter and beyond.
We all wish him nothing but success for the future.
That's choose replacement will be announced very shortly.
Our business is in very strong position and we are moving forward at full stride into the last quarter.
With all assets back to steady state, we expect to return to strong free cash flow.
A number of potentially positive catalysts ahead.
We look forward to sharing these updates in a steady flow of news releases over the coming months and presenting is much stronger results. When we speak of guidance early next year.
So with that I'm now going to turn the call over to the operator for questions. Thank you very much.
Thank you Ms. John Paul We will now begin the question and answer question to join the question queue. You May Press Star then one on your telephone keypad.
Joan acknowledging your request.
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Our first question is from <unk> Habib with Scotiabank. Please go ahead.
Thanks, Operator, Hi, Rod MSR team just a couple of questions from me.
So at Marigold.
On the fines.
At Marigold.
I believe these are.
Towards the north pit.
Question is do you have enough that's what completed.
And in the north.
We are comfortable going forward in dealing with the fines.
And also is the high grade mostly located around the north mist is one.
Yes.
So yes to all of all of your questions. So yes.
The high grade come out of the north pit.
We have done the test work and as I said.
<unk> had a number of different people will review those.
We don't believe that we have any problem with the heap leach and based on their experience from other sites.
We expect that we'll eventually see because.
The gold and as you can see we expect quite a lot of golf, we did second quite light as well. So we are expecting this why the Gulf to come out to us.
This quarter and into the next quarter.
We have practically finished them on the following material as well.
And thats the mining of the defined material was ended in Q4.
So what was that.
It's ending its ending imminently.
We're almost at the end.
Got it.
And do you have other high grade areas within within the states that you are going to be targeting going into 2023.
No not in not in the pits.
We finished those pits.
But that will only have a small pits.
As per the mine schedule advice.
Perfect. Okay. Thanks for that and just add Joe So in terms of tools you would know.
That.
At nameplate capacity at the sulfide plant.
In terms of.
The ramp up that we should expect that in Q4.
The sulfide plant came up very well in China.
Quite quickly in fact I was extremely pleased given my experience in starting these types of things up after long shutdown and I think that reflected the work that we did I think you just need to remember we shut everything down. So unfortunately, we had to shut down the mining.
Of the oxide mining wix exploration and leave them shut down the infrastructure in the district.
So as we restarted the sulfur.
Software kind of came up came up well and really quickly, it's very stable and it's running it's running.
Very well.
I expect better.
We also had to reach that point operations, so that took a bit longer because we had to rally the troops.
For obvious reasons, we didn't.
And oil pretty large money for workforce on site. So we are getting them back to start getting the mine ramped back up.
Ms that took a little bit of time and that impacted the grade that we're feeding the plant and also delayed.
I was getting a bit of access up to check mark peptide to bring down some ounces that we were planning to bring in and.
We also added.
Backend waiting for cold grade towards the end of the year. So that's given that we would delight that period, that's pushed out as well.
So we are mining.
The pits, we are mining from Chuck Mark pit area and holding that down the other thing that we did was we brought the sulfide plant back online because that's where we had the issue very carefully.
We first started recirculating it and stacking and then once we are comfortable with it. We then brought the salt backhaul and just to make sure that we didn't have any go to pickups.
As we were doing that.
And as a result the lives.
<unk> added the oxide plant as well and just to give you a bit of perspective.
We still haven't seen the southern iron golf coming out since we started the late teammates so that leaching cycle, just takes a little while to restock. So again, we're very confident that we're in a very solid position and the price is running really well.
It just takes a it's just going to take a little bit of time for us to get.
Get the oxide ore coming out and get the grates back up in the cellphone.
So Susan and thanks for that as well.
Okay.
In terms of accessing the oxide material.
Do we see that start that.
See you guys start processing that material in Q1.
Of next year or this is kind of moving towards.
Kind of as you wrap up going towards the second half of the year.
I think I'll, just I think just to remember advice and I'll, let you talk about in detail as two parts of check mix it back there.
As the old residual mine that we had up there.
Produced gold from a couple of years ago that has some residual answers that way we had expected to bring into this quarter and then there is the new check my type of extension. So just not to confuse people because I think there are two.
Two different things.
Once a new project, which is a mark for next year. One is the residual ounces at where we're going update them on the last piece of this quarter.
Thanks for the clarity on that right. So that's what I'm talking about the June check Mckechnie. So can you give us a little bit more color on how things are progressing there.
Yes, so the producing well we've been doing the infrastructure work. So we have to move.
Some public roads. So we've constructed some other passes so that we can separate item on plate.
From the from the.
Hopefully from the public roads.
We've been building some separate roads are in the process.
Right.
Doing the preliminary work for.
We're relocating.
A telecommunications tail, we have to move some power lines and some more of the launch.
Busy doing that work at the moment and that's progressing quite well.
And our expectation has always been.
Light in 'twenty three.
For the start of it.
Perfect. That's it for me guys. Thanks for taking my questions.
Thanks, guys.
Once again, if you have a question. Please press Star then one.
The next question is from Cosmos <unk> with CIBC. Please go ahead.
Mr. <unk> your line is open.
Oh, sorry, I was muted.
Thanks, Alison and all the best to do.
Maybe my first question is on Marigold.
I wanted to ask about the sustainability of the higher grade being stocked up six three gram per ton versus your 0.48 gram per ton reserves.
But it sounds like it's positively correlated the grade with the fines and the north pit. So still as you mentioned as you come to an end in terms of mining out the north pit should we see sort of the great revert back to the mean.
Fairly soon.
Yes, Cosmos you are exactly right, we will revert to the main.
Yeah, that's what's the name.
Okay. We will go back there, but we actually had a windfall in the in the oxides.
And sorry.
In those pits.
<unk> reconciled.
So we ended up with.
More material coming out of those peaks than was in the reserves, we're pretty happy with that.
Yes, it does.
Those areas are finished now than we had expected to have hired ride through this period, while we were trading them.
Great.
I might have missed it but Steve did you mention how much longer. These fines are taking in terms of the leach cycle for the gold to come out I know you're expecting it to come out in Q4 into 2023, how much longer is it.
I don't think we've actually quantified it in months, because it's not a it doesn't come out necessarily in the steps.
Drags on with a long relatively long trial.
I did also I mentioned.
One of the directors, we got from I think it came from John miles and experienced from some of the other thoughts when I have the following material.
When you initially start the leaching to start at a much lower rate and saturate. The pulses. So it doesn't materialize the falling of material within that and then and then coal stratification and then.
Sort of like could take even longer to late <unk> and so we've got two impacts in this quarter, we felt the impact of the stacking more fund material plus.
We've also started started the late cycle slower so we are putting less list.
<unk>.
Leach leak or on a.
For the first couple of weeks and then stepping it up.
So that's a bit of.
It's a bit hot for that exact quakes.
As you know it depends.
Given the way coming towards the end of the year, we try to stack in the.
The narrow as parts of the <unk> that we can get it out by year end, but it's also a function of where we're on the pilot stacks.
It is a pretty difficult question, we have been doing work with <unk> dynamics as well.
And doing that which is where thats been going over the whole year.
To put together three dimensional leach plans and a much higher fidelity of what was placed where exactly on the hates to get a bit of a prediction of what what he's coming off of.
Yes.
Thank you I think I would just say cause.
The work that <unk> talked about just gives us a high level of confidence moving into this sort of mixed size, but.
Having this the ounces stacked he's a great position to be but having backend loaded planes when things like this happen. It really doesn't give you any time to recover and so I think we're a little bit of a consequence of that as well.
I just wanted to alleviate any ones fees out there that the goal is not going to come.
Back to our sales to the end of the year, we've got the gold up on the pads. The late cycle has been slower than we had anticipated in our models and we don't have time to catch it is really simply what's happened.
Got it.
Maybe moving on to carefully here.
You might have answered this question as well, but as I work through the math, it's great to hear that.
18000 ounces in the month of October , but it sounds like.
For my math, you still need to increase that on average of about 16% in November and December is that a function of tonnage and grade from steel and Bryan Your comments. It sounds like it is both well I just wanted to I wanted to confirm.
Sorry can you repeat that.
We didn't quite understand the question.
So you did 18000 ounces I think you'd need.
Over 60.
60000 ounces to hit your guidance.
<unk> for the year 60000 ounces in Q4, so if I work out the math you need to improve.
About 16% from the $18 analysis on October .
Wondering if that improvement in November and December on average is based on tonnage grade of both I think Steve I think you did kind of mentioned it might be both but I just wanted to confirm.
Yes.
Please.
Yes sure.
So we're.
We're seeing the oxide coming down a bit lighter and we're saying the grades are a bit lower as a result of the.
The mine ramping up and some work we've had to do to try and re range demand the mine plan.
It won't be it won't be tonnage that drives it.
It will be timing, it will be timing and a bit of growth.
Yes.
Cause you probably I don't know I don't I think you came in a little bit light of bid.
Yes.
Discussion.
Just again just to clarify and just use discussion we talked about.
<unk>.
Getting the mining contracted back onsite getting the mining going has was a little bit slower than we anticipated and are.
Getting that ramp up to access the high grade, which should we expect it sort of now start to come to the sulfides I'm talking about.
We're moving down that direction. So all things all things are pointing to to us meeting that.
They started gardens.
Got it thanks, Rod I think coming a bit later took me 10 minutes to sign on.
Maybe something on the financial front, hopefully not shooting myself in the foot again.
I read something in the MD&A I don't think its a big deal but.
You did mention that as a result, what happened a careful not in compliance with the term loan covenants.
You don't have a lot to do.
On that but just want to confirm is that should we be concerned.
So no I wouldn't be concerned but.
The fact of the matter is that's why we were at the end of the quarter and so we felt that.
From a disclosure perspective, it was important to inform everybody we have continued to make payments.
Malone as they come due even during the closure and as I mentioned in my comment to and I'm, sorry, if I missed this as well, but we do anticipate.
Anticipate actually being able to close out that loan by the end of next year.
Great.
And then Dallas and since I have you here.
The cash cost and he also staining costs in the quarter was impacted by a $31 $1 million.
Sort of costs related to the Trippler suspension.
I just wanted to make sure are there any costs that we should be aware of that bleeding into Q4 of these.
Imagine these are onetime costs.
Want to make sure that.
None of these one time costs of bleeding into Q4, it doesn't sound like it since it's already restarted.
When it come from.
So your assumption is correct. There is no none of those costs are going to bleed into Q4.
Thanks for all onetime costs, specifically related to the closure and standby type costs.
For labor and other things to that.
Could ramp up as quickly as possible once we got the okay to reopen.
Okay.
And then and then maybe one last question this might be a difficult question, but I might ask it anyway it'll rot.
When you restart it when you got the permits.
Back on September 22nd restarted sharply at that point in time did you consider.
<unk> guidance.
And if you did what has changed between then and now.
Now it's a good question cause I look I think when we when we did the <unk>.
Quarter two results call we said.
We're going to do everything we can to claw back the last time the loss production.
And we had a plan as we always do.
A few labors that we had in the business to to help us.
To try to to try to chase that as a go.
As it transpired with the.
The.
And the clarity around the <unk>.
Slow alleging at Marigold.
The impacts of the gold to silver ratio in Pune.
And then some of the other initiatives that we had around chasing those residual answers a checkmark typify.
We just don't have the time to be able to do it.
Unfortunately.
We did a lot of things to try to capture it but.
Chasing the high graded CBD that Steve mentioned.
We just haven't been able to catch it so.
Now it wasn't considered we want them to see how the.
The operations were traveling so we could have a more accurate representation, if we're going to reach our guidance, obviously, we want to be able to hit us.
It wasn't.
Isn't the appropriate told me that look we did everything we could.
It's disappointing to us all that we couldnt capture it.
If for instance job marigold hadn't underperformed it as last quarter in terms of the gold production than we've probably been in a good position, but we're not so.
That's where we are but look I think the business fundamentally is very strong coming out of this into the fourth quarter, which is going to be around 200000 ounce.
A consolidated view of the business moving into a really good 2023.
And all the good things that come with that free cash flow and other things we're in good shape.
We've had a bump in the road and now we are looking forward.
Great, Thanks, Rod and perfectly understand and once again, thanks for answering my questions and all the best.
Thanks.
Thank you.
Yeah.
This concludes our question and answer session I would like to turn the conference back over to Mr. Ron Paul for any closing remarks.
Alright, thanks, everyone and thanks for joining us today.
As we mentioned look we're looking forward to.
A much more positive full year results in early next year and closing this year off in.
A very strong position to set us up for what will be a great 2023, so with that good IC Roland thanks for joining us.
This concludes today's conference call you may disconnect. Your lines. Thank you for participating and have a pleasant day.
Okay.
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Sure.
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