Highlights:
FINANCING - STRONG BALANCE SHEET (FIRST NINE MONTHS OF 2024)
- Net debt (cash) position stood at $(32.3) million as of September 30, 2024.
- Operating income was $33.3 million, representing an increase of 26.6% compared to $26.3 million for the same period in 2023, attributable to an improving gold price environment and cost optimization.
- Operating cash flow remained positive at $25.5 million, a decrease of 26% compared to $34.4 million in 2023.
- Project Update: project engineering 38.5% complete. Tailing Storage Facility feasibility drawings finalized and clearing, grubbing and topsoil has commenced. Primary crushing area concrete commenced, CIL ring beams, poured and 48 out 50 mechanical equipment packages issued for tender, 15 have been technically evaluated and are ready for order placement. Ball Mill Fabrication is progressing on schedule with delivery expected in March 2025. The project remains on track to pour first gold in Q4 2025. The formal decision to proceed with construction for the revised site development program is expected to be made in the coming months.
- Feasibility Study: Updated resources will be published in Q4 and the full feasibility alongside the listing on the ASX early into the new year.
- In-fill drilling: In-fill program at Mansounia is completed and is being incorporated to the updated resources.
- Safety of operations: Nampala accumulated is Loss Time Injury ("LTI") free since 2020 with 1 million man hours worked.
Gold production for the first nine months of 2024 reached 35,752 ounces, representing a 5% decrease compared to the same period in 2023. The All-In Sustaining Cost ("AISC") per ounce of gold sold1 was $1,221, down 4% from the same period in 2023, with lower strip ratio of 1.8x (vs 2.9x in 2023) compensating the 2.2% recovery loss.
Matthew Wilcox, Managing Director: "Kiniero is advancing quickly with the key members of the construction team now mobilized. Key workstreams are running in parallel to meet our first pour target in Q4 2025. We will be releasing frequent updates to the market as the construction progresses. We are maintaining our safety record with now 678 days LTI free for the Group despite a significant ramp-up on site in Guinea. At Nampala, production and costs are in line with our budget to match our 2024 guidance."
CURRENCY
Unless otherwise indicated, all references to "$" in this news release are to Canadian dollars. References to "US$" in this news release are to U.S. dollars.
OPERATIONAL AND FINANCIAL SUMMARY
| Unit | Nine-month Ending
September 30th | ||||||
| SAFETY | 2024 | 2023 | Variation | ||||
| Number of hours of work without lost time injury | Days | 678 | 249 | NA | |||
| MINING | |||||||
| Ore mined | kt | 1,708 | 1,605 | 6.4 | % | ||
| Waste mined | kt | 3,021 | 4,684 | -35.5 | % | ||
| Operational stripping ratio | x | 1.8 | 2.9 | -39.4 | % | ||
| PROCESSING | |||||||
| Ore processed | kt | 1,569 | 1,682 | -6.7 | % | ||
| Head grade | g/t | 0.81 | 0.77 | 4.7 | % | ||
| Recovery | % | 88.0 | 90.2 | -2.2 | pts | ||
| Gold produced | oz | 35,752 | 37,520 | -4.7 | % | ||
| Gold sold | oz | 37,857 | 37,830 | 0.1 | % | ||
| UNIT COST OF PRODUCTION | |||||||
| Total cash cost per ounce of gold sold(1) | $/t | 870 | 880 | -1.2 | % | ||
| All-in sustaining cost (AISC) per ounce of gold sold(1) | $/oz | 1,221 | 1,273 | -4.1 | % | ||
| INCOME | |||||||
| Gold sales | $000s | 116,559 | 98,519 | 18.3 | % | ||
| Operating income | $000s | 33,322 | 26,329 | 26.6 | % | ||
| Net income (loss) | $000s | (9,805 | ) | 18,672 | -152.5 | % | |
| CASH FLOWS | |||||||
| Cash flows from operating activities | $000s | 25,467 | 34,427 | -26.0 | % | ||
| Cash flows from investing activities | $000s | (64,758 | ) | (56,069 | ) | 15.5 | % |
| Cash flows from financing activities | $000s | 97,738 | 37,913 | 157.8 | % | ||
| Cash increase | $000s | 58,235 | 14,531 | 300.8 | % | ||
| FINANCIAL POSITION | As at 30thSept. 2024 | As at 31stDec. 2023 | |||||
| Cash, End of Period ("EoP") | $000s | 70,457 | 12,222 | 476.5 | % | ||
| Net debt(1) EoP | $000s | -32,261 | 46,629 | -169.2 | % | ||
QUARTERLY REVIEW
In the third quarter of 2024, gold production reached 10,031 ounces, representing a 25% decrease compared to 13,375 ounces produced in the third quarter of 2023. This decline was mainly due to extended maintenance shutdowns for critical equipment. Gold sales generated revenues of $38.1 million, marking a 5.2% increase compared to the same period in 2023, driven by a higher realized average gold price of $3,271 per ounce, up from $2,568 in 2023. However, the number of ounces sold decreased from 14,090 to 11,635, reflecting the drop in production. Although 472.58 ounces from the last September shipment, sold in early October, could have helped narrow this gap.
Mining operating income for the third quarter amounted to $15.5 million, a 15.7% decrease compared to 2023. This drop was due to higher depreciation charges following the revision of the Nampala mine's estimated lifespan, now projected until June 2026. Despite this, operating income remained stable at $10.1 million, supported by a 30.3% reduction in administrative expenses.
Net income for the third quarter reached $22.5 million, compared to $6.8 million for the same period in 2023. This variance was primarily due to a positive $12.6 million change in the fair value of warrants, reducing financial liabilities. Additionally, the company recorded a $9.6 million gain from reversing a tax provision following the finalization of an agreement with the Government of Mali. However, these gains were partially offset by a $5.6 million write-off of deferred financing costs.
NINE MONTHS REVIEW
For the nine-month period ending September 30, 2024, gold production totaled 35,752 ounces, a 4.7% decline compared to 37,520 ounces produced in the same period in 2023. Gold sales revenue reached $116.6 million, an 18.3% increase, attributed to higher average selling prices per ounce. The number of ounces sold remained stable at 37,857 in 2024 compared to 37,830 in 2023.
For the nine months ending September 30, 2024, mining operating income was $50.7 million, reflecting a 2.3% increase compared to the same period in 2023. However, this period resulted in a net loss of $9.8 million, compared to net income of $18.7 million in 2023. This loss was primarily due to the write-off of deferred financing costs of $5.6 million, warrant issuance costs of $4.1 million, and a $3.1 million foreign exchange loss. Additionally, the tax expense for the nine-month period reached $35.4 million, compared to $6.3 million in 2023, reflecting the impacts of the tax agreement with the Government of Mali.
CASH FLOWS
Cash flows from operating activities were negative at $(7.9) million in Q3 2024, due to the reduction in accounts payable, which decreased from $64.2 million as of June 30, 2024, to $31.7 million as of September 30, 2024. This reduction is directly related to the settlement of the tax contingency provision as part of the agreement with the Government of Mali.
Management, advised by TerraFranca, is in advanced negotiations to secure up to $175.7 million in new credit facilities from international lenders. These funds are intended to support strategic initiatives, including the development of the Guinea project.
LIQUIDITY AND BALANCE SHEET
The Group's cash position increased from $12.2 million as of December 31, 2023, to $70.5 million as of September 30, 2024.
Net debt1 stood at $(32.3) million as of September 30, 2024, decreasing from $46.6 million as of December 31, 2023.
SUMMARY OF Q3 2024 FINANCIAL RESULTS
| Three-month Ending September 30th | Nine-month Ending September 30th | ||||||||
| 2024 | 2023 | 2024 | 2023 | ||||||
| Gold production (ounces) | 10,031 | 13,375 | 35,752 | 37,520 | |||||
| Gold sales (ounces) | 11,635 | 14,090 | 37,857 | 37,830 | |||||
| $ | $ | $ | $ | ||||||
| MINING | |||||||||
| Revenues - gold sales | 38,058,745 | 36,188,940 | 116,559,300 | 98,518,580 | |||||
| Mining expenses | (9,921,990 | ) | (10,679,996 | ) | (28,654,262 | ) | (30,239,337 | ) | |
| Mining royalties | (1,343,069 | ) | (1,124,569 | ) | (4,273,513 | ) | (3,049,434 | ) | |
| Depreciation of property, plant and equipment and amortization of intangible assets | (11,327,654 | ) | (6,044,994 | ) | (32,883,792 | ) | (15,624,432 | ) | |
| MINING INCOME | 15,466,032 | 18,339,381 | 50,747,733 | 49,605,377 | |||||
| OTHER EXPENSES | |||||||||
| Administrative expenses | (5,182,588 | ) | (7,438,676 | ) | (16,945,663 | ) | (22,152,380 | ) | |
| Exploration and evaluation expenses | (137,892 | ) | (186,779 | ) | (176,375 | ) | (312,245 | ) | |
| Stock option compensation cost | --- | (422,674 | ) | --- | (422,674 | ) | |||
| Depreciation of property, plant and equipment and amortization of intangible assets | (154,682 | ) | (82,486 | ) | (414,498 | ) | (248,073 | ) | |
| Write-off of property, plant and equipment | --- | --- | --- | (8,933 | ) | ||||
| Other income (expenses) | 74,062 | (124,196 | ) | 110,923 | ()[\]\\.,;:\s@\"]+)*)|(\".+\"))@((\[[0-9]{1,3}\.[0-9]{1,3}\.[0-9]{1,3}\.[0-9]{1,3}\])|(([a-zA-Z\-0-9]+\.)+[a-zA-Z]{2,}))$/;return b.test(a)}$(document).ready(function(){if(performance.navigation.type==2){location.reload(true)}$("iframe[data-lazy-src]").each(function(b){$(this).attr("src",$(this).attr("data-lazy-src"))});if($(".owl-article-body-images").length){$(".owl-article-body-images").owlCarousel({items:1,loop:true,center:false,dots:false,autoPlay:true,mouseDrag:false,touchDrag:false,pullDrag:false,nav:true})}var a=$("#display_full_text").val();if(a==0){$.ajax({url:"/ajax/set-article-cookie",type:"POST",data:{cmsArticleId:$("#cms_article_id").val()},dataType:"json",success:function(b){},error:function(b,d,c){}})}$(".read-full-article").on("click",function(d){d.preventDefault();var b=$(this).attr("data-cmsArticleId");var c=$(this).attr("data-productId");var f=$(this).attr("data-href");dataLayer.push({event:"paywall_click",paywall_name:"the_manila_times_premium",paywall_id:"paywall_article_"+b});$.ajax({url:"/ajax/set-article-cookie",type:"POST",data:{cmsArticleId:b,productId:c},dataType:"json",success:function(e){window.location.href=$("#BASE_URL").val()+f},error:function(e,h,g){}})});$(".article-embedded-newsletter-form .close-btn").on("click",function(){$(".article-embedded-newsletter-form").fadeOut(1000)})});$(document).on("click",".article-embedded-newsletter-form .newsletter-button",function(){var b=$(".article-embedded-newsletter-form .newsletter_email").val();var d=$("#ga_user_id").val();var c=$("#ga_user_yob").val();var a=$("#ga_user_gender").val();var e=$("#ga_user_country").val();if(validateEmail(b)){$.ajax({url:"/ajax/sendynewsletter",type:"POST",data:{email:b},success:function(f){$(".article-embedded-newsletter-form .nf-message").html(f);$(".article-embedded-newsletter-form .nf-message").addClass("show");setTimeout(function(){$(".article-embedded-newsletter-form .nf-message").removeClass("show");$(".article-embedded-newsletter-form .nf-message").html("")},6000);dataLayer.push({event:"newsletter_sub",user_id:d,product_name:"newsletter",gender:a,yob:c,country:e})},error:function(f,h,g){}})}else{$(".article-embedded-newsletter-form .nf-message").html("Please enter a valid email address.");$(".article-embedded-newsletter-form .nf-message").addClass("show");setTimeout(function(){$(".article-embedded-newsletter-form .nf-message").removeClass("show");$(".article-embedded-newsletter-form .nf-message").html("")},6000)}});$(document).on("click",".article-embedded-newsletter-form .nf-message",function(){$(this).removeClass("show");$(this).html("")});
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