GPL - Earnings call transcript Q2 2021 | GREAT PANTHER MINING Ltd

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Operator

Thank you for standing by. This is the conference operator. Welcome to Great Panther Mining Second Quarter 2021 Results Conference Call.

As a reminder, all participants are in listen only mode and the conference is being recorded. After the presentations, there will be an opportunity to ask questions. now Leydier, turn Vice would to conference I Grant Fiona President, Instructions] like the to over [Operator Investor Relations. ahead. go Please

Fiona Grant Leydier

Thank I’m everyone. for call Good Leydier. operator. today. you our participating Fiona Thank in you, Grant morning,

we making statements be during we forward-looking begin, please presentation. Before that will note the

events June are measures, presentation. should also The ended associated You months future XXXX. three MD&A the refers cautioned for MD&A included definitions those this from otherwise to actual that the Company’s differ be non-GAAP amounts and dollar and commentary are unless in that financial XX, reconciliations expressed dollars, the noted in All and various results and may noted. in in today’s presentation U.S. statements

replay all-in be I the this call call statements sustaining available greatpanther.com. be costs. is For Replay during everyone for website our will to this conference reference, today. recorded accompanying Detailed found the presentation. at the to can and end and would of being and like that available remind on the slides call, later conference refers information at cautionary be AISC webcast will presentation

Operating Financial have and the Daycock, this Sandra President Fernando Chief On and call Cornejo, CEO; Henderson, Rob we morning, Chief Officer. Officer;

Rob Henderson

leadership to-date. has they despite shown team and the the effectively, for but complicated, the in and dialing Corporate Fernando and Vice the Operating Sandra Fiona. the President, certainly Sandra a our year Chief work very and quickly significant President Daycock previously, Thanks, made room two Vice I’m can Officer. has now, COVID-XX in Brazil, Fernando was performance to things of and from I’ve Finance with everyone thank team. Company Chief And pleased Financial you within with Cornejo, how appointed for promotions in pleased hardships. team’s I’m promoted very today. me to adapt at have Treasury Operations full me Officer; today, was our been

in our to particular, remain prevention fully the awareness During about across quarter, COVID-XX surrounding committed practices maintaining as in protocols, the we our well communities. and as organization,

is for for exploration have I Panther. emphasized before, this As a year Great

led resulted is QX grade back the as higher QX now some the to encouraging. the in to ramping be safely will Tucano ensure the mined reduced from from that deposits results Our in Urucum are of in stripping ore wall in to now related suspended recommenced as team remediation the higher reported the high due that and nice points. the was temporarily say stability. and open additional UCS well reasons, North Production didn’t a and intersections up we and grade at a production of The the we upcoming costs ounces, in the challenging in metal silver. mining in mine quarters. mining wall But, Urucum very ore has lower UCS ore of had at detected of equivalent pleased quarter quarter, In safety originally due QX ore second ounces forecast. XX,XXX we mining production This for gold production I’m of Tucano’s July, schedule, quarter than west Central to with of In suspension was gold, ounces pit. of ahead of for May, the suspension we of pit. XX,XXX quarter from South movement revenue the to had consolidated XXX,XXX inclusive very

in XX,XXX our be total, about quarters mined next year, to XXXX upcoming will XXXX. will in However, contribute revenue and into those for ounces, overall and

to capital Panther significant halted, to growth. UCS was at position and investments programs. are our for ore full Great continued operate with activities temporarily of required mining we fleet on Although and mining a continued stripping exploration These future

per ounces excluding UCS, fewer produced costs attributed processing resulted our All corporate stripping costs ounce lower and gold increased. at compared costs, the costs sold higher well and to of XXXX. in These (sic) sustaining are in which [$X,XXX] QX stockpile unit sold. result, our in material, as $X,XXX additional as with $X,XXX went up a G&A, As were grade

$XX.X million. with We $X.X we and to Our reduced was the mine in operating and quarterly million and earnings million $XX.X the equivalents, million. revenue $XX.X was quarter cash borrowings cash ended

the our in We’ve anticipated a year. QX revised lower guidance account at our ounces down guidance of of in high taking Mexico, costs range reviewed progress and also gold XXXX. XXX,XXX Given experienced to facility AISC, of for consolidated XXXX in equivalent have for the the expand tailings XXX,XXX lack annual to adjusted securing and our production into the permits consolidated to GMC we

our annual sold. range $X,XXX $X,XXX to expect AISC ounce from to gold We per

half to responsibility, So, our environmental of ounces it what read to to sustainability how to very mandate, and safety, about greatpanther.com. community delivered and in gold now encourage is injury we XXXX, has of to from environmental means I’m us, cost areas Fernando in to highlights on our an our XX%. new organization policy, published adopted year, discuss working to progress zero equivalent of to area that and and team of XX,XXX the for operations. an that improved held proud available XXXX In on safety we by everyone diversity all-in the health of this “Mining at official achieved XX,XXX is strengthen sold. Cornejo, second at and leadership report, continue incidents women. produce sustaining further XX% This of $X,XXX equivalent $X,XXX development. report, gold our key rate the across our which sustainability the now expect Safety is on time report website our we by results the frequency this We pass per a I’m initiatives for and say June, focus of over pleased we we engagements Good”. and had lost ounces practices. positions year I’ll

Fernando Cornejo

everyone. Rob, and you, Thank good morning,

decrease the ore lower stockpiles lower to for grade the material Central Urucum production in resulted XX,XXX in lower Gold North XXXX, in was ore ounces, quarter related compared a to ounces Tucano. due of XX,XXX rates. pit, on mining from temporary the Urucum recovery production of from first which processing with with Focusing XX% and South, suspension QX

operating X.X half between is to reclaiming be $X,XXX compared A stripping XXXX of Tucano and is QX, was and total expected costs expected XXX,XXX was ounces sold, $XXX in to XXXX, QX. All-in XX% waste cost, XXX,XXX for in moved expected be for of production gold to production, account gold to ounce the removed which of due for sustaining million at with tons the second X.X guidance, quarter in The year. per gold is higher stockpiles higher material UCS. traditional costs of in tons of QX and to lower million a further of

groundwater next be monitoring and in will completed monitoring Moving Urucum the stations be water to installation operations key over in groundwater continue Central South. will forward, two management the cylinders of The months.

vertical levels evaluating a in a west the installation higher the maintain pit. are when We drains wall, control mining over of to phreatic especially degree of

portions pit. drilling completed As over earlier, exploration efforts program near C, holes Tucano, of at over near for we continues At historical the be have high the XX,XXX integrated support the reevaluation team near in later been expediting will understanding next annual with test next gold drilling the The XX along statement At production. North, intersect regional mentioned potential data, drilled mineralization And next down Tap Urucum modern results. has were improved continue mineralization very the geological target. year. into and are of exploration deeper drilling Rob to studies the the Results quarters two drilling, drilling extension Tucano to has achieve an additional model XX,XXX programs. the plunge The controls this mineral to To-date, a the led and a meters Urucum production resource to of of of in from some the grade for been the demonstrate down with to new to deep a meters of program decision for North producing promising that year. series current zone. will below the

the but rate quarter sustaining production. been to Complex QX targets, for near year, per kilometers $XX.X geochemistry were targets which regional lead will was to North focus grade is of ton. of lower increased associated development XX-kilometer of of due once silver currently with areas recoveries XX.X% pit. evaluation. second are mineralization variance the XXX% XXXX. surface, thesuspension silver, COVID-XX. at a Drilling main budgeted the XXXX Lona equivalent the further gram average expected of extend costs, the The is half and grade payable QX in compared Mine of the compared gold of has were XXX XXX,XXX activities with and and XX.X% high XXXX ton. in there’s will results the total of the XXXX, higher be All-in includes of along with produced mine costs QX $XX.X of radius the At kilometers complete. Mutum this per intersected ounces This due the recoveries To-date, drilling sampling scheduled when in was Gold grams Production ounce per to Mexico, mostly than under completed Guanajuato in an average to ounce X.XX XXX which addition, silver open evaluation second within soil with is and silver regional mine, In Amarela. Urucum XXX

approval await for to from dam the the storage expansion CONAGUA continue tailings we permitting, of terms at In of BMC.

as have XXth, December existing technical XXXX. capacity extend identified under alternatives permits, on news to we our However, the per tailings July release until the

Average sustaining will lead mainly I update silver silver XX.X% XXX throughput, loans found. ton higher in versus to production started now variance a call the CONAGUA of Coricancha, higher over Thank higher on was gold. with agreement At per the discuss was was XXX%, silver and once engage XXXX recoveries with total due Mexico July. number basis. were the $XX.X proactively ounces, silver due increase you. an a Sandra to also zinc. will results. equivalent help Mineral ounces Contributing this has drill turn mandated per and $XX.X were a per higher permitting May for to during our to meter financial and recoveries X,XXX program byproducts continue resolution the payable and an expedite to along in received XXX,XXX silver, and XXXX, all-in XX.X% in X.XX a grades for the QX per cost shutdown mainly for payable in grams of to ounce community provide and All-in decreased all COVID-XX. which gold, due costs to Topia, government to sustaining was payables grades, of process the We market, to ton been a QX grams mills.

Sandra Daycock

a for million. higher million, decrease costs XXXX, Tucano non-cash Thank you, XX% Fernando $XX.XX silver. of was higher quarter. difficult activities. volumes was XXXX, UCS and from partially sales Mine items before over to $X,XXX $X,XXX, to per good for primarily ASIC morning. in QX earnings of in metal XXXX $XX.X lower gold offset the prices G&A XXXX QX Consolidated gold excluding million to to $X,XXX decreased and due corporate $X.X ounce QX metal Revenues $XX.X to due by realized the sold pushback QX compared at related were operating

said, Net normal due borrowings. before capital in $X.X Rob during to continued costs. flow of we to cash changes the QX future gold sold, activities higher at expected stripping in We’ve loss silver credit costs $X.X investment, to back UCS $XX.X from in is EBITDA This mainly million, of with and partly ounces with was fleet cash million, growth decrease with in mining capital and and resulted in the $X.X XXXX. net Company’s $XX.X and $XX.X to full new expect activities $X.X in equivalents in of of the quarters. realized quarter. cash working non-cash reduced gold Adjusted was already facilities. to $XX.X lower made mining with QX the and contribute ounces cash higher potential $XX.X however, be is pushback Paired million, working negotiating million million run million compared production, attributable we significant activities and offset negative this by prices. of negative was We progress income compared quarter and the quarters a This to in XXXX. current As recent the to remediation million compared ended coming and operating net to million invest million higher

We the That’s now the remarks. which expect And arrangements to question-and-answers. bolster have working capital position. in back it would finalize these for operator our all thank I’ll to turn quarter, third for we you. formal

Operator

you. Thank

[Operator session. Capital ROTH Joseph go question-and-answer Our will Please question of We the Instructions] begin Reagor first comes ahead. from Partners.

Joseph Reagor

than permitting? first it COVID any give related causing thing Can delays? GMC. is for Is it issues, guess, any there us the is line And your the the by point, color handicap then concept additional or you the what’s finish year? odds also, like more can that expectations I you on are what of So, just at a to the to give of of end of this us getting

Rob Henderson

Yes.

not permits. we’re only issue with think, the I experiencing ones this

CONAGUA, we engaged not from a but have We’re had response yet. formal with them

the can we So, uncertainty it Mexico of run capital to as invest we our into -- a the GMC. ability We around those we mining year. to the frustrating to decisions. is process need to noted, now at the we’re to of get make we end regarding We end right do year. as in capacity But, whether more do secure permits, have development actually questioning a have permits. And

with disappointing engagement the still the been to going has on. CONAGUA But, date. So, response is

we that’s capital of lower downwards, on So, getting the our expectation decisions. decided make adjust why based guidance permits necessary to to time our in those

Joseph Reagor

enough. half half little CapEx. largest a has the what the on million, of that at there’s it? been uncertainty What fair second of but have year million, maybe basis, the guys spent of look like the the like? first And components $XX I year does $XX then, a And something Okay, you capital are that realize on spend GMC,

Rob Henderson

Sure.

to we spend on intensive half in color into any knew than Sandra, half first to CapEx going in the the more of year, but QX, you had a year certainly lot the budget that? The we of And the year second a going stripping can is that was give half. lower. be

Sandra Daycock

Yes.

half initiatives CapEx, components. somewhat second have three access do The that we there better first invested and expenditure for projects, guided we But, expect already to to more capital second will certain we’ve reach the significantly that the is in rigs. drill increase on in the in primarily half grade So, the Tucano. as as in weighted in heavily ore-body capital exploration. the and expiration, second we projects second CapEx, stripping saving half the half have and in half, stripping also higher the now The reduce cost to And is we the and UCS.

Joseph Reagor

put dollar a even -- range wide guys around a it basis? any there on is you could And Okay. number

Sandra Daycock

reviewing we’re think, I our CapEx.

to put dollar So, I this think range would at be premature a point.

Operator

from Sekelsky Please Jake Alliance of Partners. next comes ahead. go Our question Global

Jake Sekelsky

some Just make plan second event? to do looking fourth you type more or third part for at think Tucano higher the of quarter, from going latter a grade on perspective quarter that materials the the mine half, of do that’s a into the you think of grade

Fernando Cornejo

quarters, as to starting Yes, Yes. higher Central the the Hi, Jake, mined two for absolutely, Fernando grade is And South here. material are next Urucum to be over expected the grades in of August. starting Cornejo now. now increase

Jake Sekelsky

there. will results year-end? the seen the And around comprehensive drill come will some that out, update do underground it I scenario of time the be Tucano, towards at then, When resource think update we’ve more know on you

Rob Henderson

Jake, What studies the second probably through portal down we intend of complete [Technical to do Difficulty] year these of the will year the to enable a in next be their, the access in year. end, us half half decision first to an put drilling and

second of end study first the the the going the next And going next we summary, underground start to be of year. that is of complete to in expectation going in year, we’re carry drilling half is would the to year. on So, the in half

Jake Sekelsky

Any do of think Joe’s you then, And And, you the one that’s sort forward to you other move route chose? that questions. areas capacity of on identified, building the some with quickly there? Mexico, on that you’ve color perfect. how can remaining of lastly, back Okay, just the if

Rob Henderson

Yes.

to stack get solution. we a We’re alternate back tailings permits can doing problem stack. as to need one two including log tailings storage a a will is bunch years we’re do for of jam And what of that permits dry into in studies dry we on to well. an alternative The with as do options, the

the a push but alternative for dry And require will that permit. to continue us lifts parallel, another our years. facility, looking we new stack, we’re a would which So, in at five on for existing give options

hit may permits button get tailings And new have those GMC we at for in to so, alternative pause to facility. a order an

Operator

Our next from Please comes H.C. question Heiko go Wainwright. Ihle of ahead.

Heiko Ihle

removed UCS have the state afternoon. waste removed mentally you million do upper I much in X.X million Good tons west it’s And that was QX. failed. X see of tons wall Europe, But I’m be tons of numbers. stability, then further in from X.X really how improvements in it to with the you pit material approximately is and the planned million here. is a already wall and an p.m. to frankly related UCS X.X trying understand I

can that, you does go by move And as hold more ahead, to looking versa, it ton? stuff what to approximately go or where are you down of also, it you on doing more building expensive there costs So, pay provide efficiencies up each more it color to more? some hold get vice

Sandra Daycock

It’s our But, it’s competitive guide cost Sandra. structure typical don’t industry. We generally for on reasons.

Rob Henderson

Yes.

move that not so we’re those Yes, not and cost a ounces. the a getting access tonnage. month, really. delay it’s a facing, it’s in that of to lot pit, tonnage it’s We So, can in much issue

access that’s us. the has So, issue. the to It’s ore volume the which of pit, bottom it’s hindered getting at the not the

smoothing there, now back wall. we’ve that to So, still final are in some got that on we do

again. efficiently happen work the that balance So, and the in we expect the this But, main back is we’re focus quarter. mining that to of pit that’s in

of we accessing safety have in for reasons. grade to do which ore, were zones prevented those QX access we So, higher

Heiko Ihle

Fair.

another the treatment I’m with can well? today. talk seeing any feeling, And But, you up because earlier What as and meaningful a Are are topic seeing you on reasons. seeing charges have asking want this for about question, this you in you’re I we came improvements? can’t a get quantify -- Mexico? what call to Second competitive

Rob Henderson

mill about or smelter our talking the returns efficiencies? talking about You’re you’re

Heiko Ihle

smelters? the No,

Sandra Daycock

mean, that’s pretty I Yes. sensitive information.

So, put our annual each and -- we tender basis do contract year. to we on up them an charges

defer comment that. I’ll on So,

Operator

of comes question Please Matthew from ahead. O’Keefe go next Our Fitzgerald. Cantor

Matthew O’Keefe

on follow-up some and quick on Tucano Just question a here GMC.

UCS on it have? there the where So, UCS this many getting how more will mine into grade. time from to Is or we the much you pit, ore more much you’ll do get contributing getting and be you for year, a How Tucano, mill? be high UCS now, -- how plan, overall that else the are feed to

Fernando Cornejo

into for Yes, extend for as that next current will quarter. per the UCS, good one additional part plan, sequence will well. as XXXX, of morning. mine the perhaps year And be

Matthew O’Keefe

Okay.

won’t issue a we be with…? So, seeing recurring

Fernando Cornejo

or correct. strategy overall That’s on phreatic increasing distometers season. drains and during holes prevent accumulation having water installing mean, is monitoring the the behind I and the rainy levels to water

assurance us will pit rainy mining once December, some season, will have So, we go continue that control phreatic at give some we over safely. which the and level by starts that that normally into

Matthew O’Keefe

Mexico back as like with planned -- And then, well it to GMC, here, going going sounds as I know, so aren’t there. things you’re

you was costs if some well? And milling You’ll that toll as what be are be will options, there shut your -- down, you care are options and on about do any there -- maintenance discussion looking at roughly?

Rob Henderson

decision Yes. Obviously, yet. a to come we haven’t

an they are those weighting with make probability option. two capacity. operators to toll in milling There We’ve We’re other things. just the yes, quarter. region this is decisions mill got But

may be option. So that an

there alternatives So, has looking made at. not decision maintenance been actively some that on are care yet. we and But, are a

Matthew O’Keefe

be that must of like -- in you I No, kind that that sounds understand mean, made direction. we’re but going I you haven’t it decision,

-- something? put permit, this a might And or there on So, be mean, just be care if timing year it’s that wouldn’t cost severe what, of matter you maintenance. I and to is on it another

Rob Henderson

Yes, exactly.

So, mills. to and toll nearby on head an milling us option is do mining for in

is actively consideration. under that So,

Matthew O’Keefe

preferred a you Do option? have

Rob Henderson

yet... Not

Matthew O’Keefe

right. all Okay,

Rob Henderson

have certainty the don’t We on permit.

complicated. So, that’s things a making little bit

Matthew O’Keefe

Yes.

said, -- have you have you You didn’t response. don’t a even

a troubling too. that’s So, bit

Rob Henderson

But, clearer. today, of had we things dealing If lot and uncertainty. would make with a a we’re levels response it grayness

Operator

comes from question [ph] a private investor. George, next Troy Our

Unidentified Analyst

I of a couple had questions.

at First, XXXX foresee do end profitability you the in the year? of

Rob Henderson

half $X,XXX expect to gold year in an the do at the $X,XXX. cost of to we So, ounces produce all-in to of second of XX,XXX sustaining XX,XXX

yes. the So, answer short is

Unidentified Analyst

new the extend is the at going to then, discovery And mine you Tucano, that life believe?

Rob Henderson

the mine thing extend Absolutely. the life. grades. It most important will is But

at underground. would year we in much in fact the increase even production. work looking those We’re would grades And looking how the near mine higher at plan, the surface, in second the the into Urucum grades which in of capture higher North half is

Unidentified Analyst

don’t call finally then, had a Great, over government, I give and Mexican comment. COVID. mines, problems follow might fantastic. how want from getting for I to they And of I got because approval year them and also you through. a see had a know, they

Thanks. Okay.

Rob Henderson

you. Thank

Operator

any the over concludes like the I Rob turn would session. to remarks. back to This question-and-answer closing for conference Henderson

Rob Henderson

operator. you, our but to investments wall Tucano Company. future significant of The of the all significantly pit the Thank believe UCS, the I of we’ve only development at stability made, and growth the contribute at to exploration in will mine operations, also not ensure into

unlocking with our exploration well-positioned As organically the new a of our the accretive have key of further package is coming in opportunities profile. you the leadership that strength will steady team, is Brazil, the in news for expect results through months. Along grow of both value we acquisition and growth, informing to of Panther our land a Great stream exploration to production

look of sharing the our to forward here And you at with for I time behalf quarter. on you So, today. progress thank Great in Panther, your everyone next

Operator

This call. conference today’s concludes

You Thank a and day. may pleasant lines. for have disconnect participating your you

GREAT PANTHER MINING (GPLDF) 5 Aug 212021 Q2 Earnings call transcript