Release Date: November 08, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Allied Gold Corp (AAUCF, Financial) reported a 17% increase in production for Q4, establishing a sustainable production platform of 375,000 to 400,000 ounces per year.
- The company successfully implemented mining improvements and processing plant upgrades, resulting in increased milling rates by 15% and 39% at Agbaou and Bonikro, respectively.
- Allied Gold Corp (AAUCF) has strengthened its Board of Directors with a West African mining executive, enhancing in-country presence and relations.
- The company reported a significant increase in operating cash flows to $87.2 million in Q3, driven by higher realized gold prices and proceeds from a streaming agreement.
- Allied Gold Corp (AAUCF) secured a 20-year Power Purchase Agreement in Ethiopia, ensuring access to low-cost and sustainable energy for the Kurmuk project.
Negative Points
- The introduction of a new mining code in Mali led to higher costs and delays in production from the Korali-Sud area.
- Net loss for the quarter was $108 million, primarily due to non-cash and non-recurring items related to the Mali agreement.
- Sales have been lagging due to permitting delays, impacting the financial performance for the quarter.
- All-in sustaining costs (AISC) have been higher this year, with expectations of incremental increases in 2025 due to the new mining law in Mali.
- The company faces challenges in optimizing throughput due to clay content in Korali-Sud ores, which are currently processed separately from Sadiola ore.
Q & A Highlights
Q: With respect to Sadiola, what grades are we looking at going into Q4? Is it still applicable to expect grades north of 1.3, maybe in the 1.5 range?
A: The grades forecast for Sadiola Q4 sits sub 1.7 grams a tonne. We've scrutinized the mine plans to access higher grades into Q4 and sustain through 2025. We expect 1.7 grams per tonne with a combination of Sadiola ore and Korali-Sud ore.
Q: The recovery rates and production at Sadiola don't seem to align. There's a 5,000-ounce differential between reported production versus what would be implied by the recovery tonnes and grade. Could you clarify this? Also, when will there be a catch-up on Sadiola sales?
A: We expect sales to catch up this quarter. The delay was related to permitting issues with Korali-Sud ore. We've completed the permitting process and expect gold sales to catch up over the next couple of weeks. Regarding recovery rates, we're getting the recoveries we expect from the ores we're mining and processing.
Q: AISC has been higher this year. How should we think about costs in 2025?
A: We're going through a budgeting process. We expect costs to be incrementally higher next year due to the new mining law in Mali and the impact of royalties. However, better production next year from a full year of Korali-Sud and optimizations should balance the unit costs.
Q: How are the costs at Kurmuk progressing versus your plan or budget?
A: We're tracking well with our estimates. Using a higher proportion of local contractors has helped manage timing of payments and lower mobilization costs. Overall, we're keeping the CapEx for the project as the original target, and productivity is good.
Q: What are the critical path items to maintain the schedule for first pour at Kurmuk in mid-2026?
A: The critical path items are through the CIL circuits, including civil, steel, and mechanical work. We're managing these with a particular focus to mitigate potential risks, and we're doing a good job on that.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
