Link/Page Citation
Northern Ontario Business - Export Development Canada could loan $670 million to Timmins nickel mine builder - 6/9/2024
Aspiring Timmins miner Canada Nickel says Export Development Canada has shown interest in loaning them to up to $678 million (US$500 million) to develop its Crawford nickel mine project, 40 kilometres north of the city.
For the complete story, see:
https://www.northernontariobusiness.com/industry-news/mining/export-development-canada-could-loan-670-million-to-timmins-nickel-mine-builder-9485105
Mining.com - Canada Nickel may net $500m Ottawa loan for giant Crawford project - 6/9/2024
Canada Nickel (TSXV: CNC) says a Canadian government agency might loan it $500 million for its Crawford project in northern Ontario, which could become the world's largest nickel-cobalt sulphide development.
For the complete story, see:
https://www.mining.com/canada-nickel-may-net-368m-government-loan-for-giant-crawford-project-in-ontario/
Bloomberg - Yukon Gold Mine Disaster Sparks Fears of Soaring Taxpayer Bill - 5/9/2024
The sudden collapse of Victoria Gold Corp.'s Eagle Mine - and with it, the company - is part of a long and ugly history in northern Canada.
For the complete story, see:
https://www.bloomberg.com/news/articles/2024-09-05/yukon-gold-mine-disaster-sparks-fears-of-soaring-taxpayer-bill
Other Stories
BNamericas - Lundin Mining reaches renewable energy supply agreement for Brazilian mine - 5/9/2024
Bloomberg - Codelco Bids $500 Million for Stake in Key Chile Copper Mine - 4/9/2024
Mining Technology - Canada's Teck Resources announces new business and leadership structure - 4/9/2024
Mining.com.au - Canada's CopperCorp expands Tasmanian foothold - 4/9/2024
International Mining - Railveyor stakes its energy-efficiency, opex cost claims in latest Agnico Eagle whitepaper - 4/9/2024
Mining Weekly - Teck unveils new structure to support energy transition metals growth - 2/9/2024
Media Releases
Teck Resources Limited (NYSE: TECK, TSE: TECK.A) - Teck Announces New Structure to Support Energy Transition Metals Growth - 30/8/2024
Latest Research
Numerical Assessment of the Geothermal and Thermal Energy Storage Potential of the Underground Con Mine (Northwest Territories, Canada) By Dan David Ngoyo Mandemvo, Félix-Antoine Comeau, Jasmin Raymond, Stephen E. Grasby & Viktor Terlaky
Overviews of Leading Companies
Agnico Eagle Mines Limited (NYSE: AEM, TSE: AEM)
Barrick Gold Corporation (NYSE: GOLD, TSE: ABX)
Cameco Corporation (NYSE: CCJ, TSE: CCO)
Franco Nevada Corporation (NYSE: FNV, TSE: FNV)
Hudbay Minerals Inc. (NYSE: HBM, TSE: HBM)
Lundin Mining Corporation (TSE: LUN)
Newmont Corporation (NYSE: NEM, TSE: NGT)
Nutrien Ltd (NYSE: NTR, TSE: NTR)
Sherritt International Corporation (TSE: S)
Teck Resources Limited (NYSE: TECK, TSE: TECK.A)
Turquoise Hill Resources Ltd (NYSE: TRQ, TSE: TRQ)
Wheaton Precious Metals Corp. (NYSE: WPM, TSE: WPM)
Senior Associate: Theadore Leighton Manjah
News and Commentary
Northern Ontario Business - Export Development Canada could loan $670 million to Timmins nickel mine builder - 6/9/2024
Aspiring Timmins miner Canada Nickel says Export Development Canada has shown interest in loaning them to up to $678 million (US$500 million) to develop its Crawford nickel mine project, 40 kilometres north of the city.
For the complete story, see:
https://www.northernontariobusiness.com/industry-news/mining/export-development-canada-could-loan-670-million-to-timmins-nickel-mine-builder-9485105
Mining.com - Canada Nickel may net $500m Ottawa loan for giant Crawford project - 6/9/2024
Canada Nickel (TSXV: CNC) says a Canadian government agency might loan it $500 million for its Crawford project in northern Ontario, which could become the world's largest nickel-cobalt sulphide development.
For the complete story, see:
https://www.mining.com/canada-nickel-may-net-368m-government-loan-for-giant-crawford-project-in-ontario/
Bloomberg - Yukon Gold Mine Disaster Sparks Fears of Soaring Taxpayer Bill - 5/9/2024
The sudden collapse of Victoria Gold Corp.'s Eagle Mine - and with it, the company - is part of a long and ugly history in northern Canada.
For the complete story, see:
https://www.bloomberg.com/news/articles/2024-09-05/yukon-gold-mine-disaster-sparks-fears-of-soaring-taxpayer-bill
BNamericas - Lundin Mining reaches renewable energy supply agreement for Brazilian mine - 5/9/2024
Canadian firm Lundin Mining announced an agreement with renewable energy company Serena, formerly Omega Energia, to supply its Chapada open-pit copper and gold mine in Alto Horizonte, Goiás state.
For the complete story, see:
https://www.bnamericas.com/en/news/lundin-mining-reaches-renewable-energy-supply-agreement-for-brazilian-mine
Bloomberg - Codelco Bids $500 Million for Stake in Key Chile Copper Mine - 4/9/2024
Chile's Codelco, seeking to retain the title of world's top copper supplier, made a $500 million offer to buy a stake in a mine run by Teck Resources Ltd., people with knowledge of the matter said.
For the complete story, see:
https://www.bloomberg.com/news/articles/2024-09-03/codelco-bids-500-million-for-stake-in-key-chilean-copper-mine
Mining Technology - Canada's Teck Resources announces new business and leadership structure - 4/9/2024
Canada's Teck Resources has revealed a new corporate structure focused on two regional business divisions, North America and Latin America, as part of its transition to a pure-play energy transition metals company.
For the complete story, see:
https://www.mining-technology.com/news/canada-teck-resources-announces-new-business-and-leadership-structure/
Mining.com.au - Canada's CopperCorp expands Tasmanian foothold - 4/9/2024
Vancouver-based CopperCorp Resources (TSX-V:CPER) has expanded its landholding in western Tasmania with new exploration licences for its Skyline Project.
For the complete story, see:
https://mining.com.au/canadas-coppercorp-expands-tasmanian-foothold/
International Mining - Railveyor stakes its energy-efficiency, opex cost claims in latest Agnico Eagle whitepaper - 4/9/2024
Agnico Eagle Mines Limited has revealed its findings on the efficiency and environmental impact of the Railveyor system implemented at its Goldex mining complex in Quebec, Canada, with the whitepaper, published by Railveyor and Agnico Eagle, detailing reduced operational costs, enhanced safety and greenhouse gas emissions reductions as some of the major outcomes of the installation.
For the complete story, see:
https://im-mining.com/2024/09/04/railveyor-stakes-its-energy-efficiency-opex-cost-claims-in-latest-agnico-eagle-whitepaper/
Mining Weekly - Teck unveils new structure to support energy transition metals growth - 2/9/2024
Canadian mining company Teck Resources has unveiled a new business structure to support its shift to a pure-play energy transition metals company.
For the complete story, see:
https://www.miningweekly.com/article/teck-unveils-new-structure-to-support-energy-transition-metals-growth-2024-09-02
Media Releases
Teck Resources Limited (NYSE: TECK, TSE: TECK.A) - Teck Announces New Structure to Support Energy Transition Metals Growth - 30/8/2024
Teck Resources Limited (TSX: TECK.A and TECK.B, NYSE: TECK) ("Teck") today announced a new business structure to support its shift to a pure-play energy transition metals company focused on growth.
"This new structure will ensure Teck is optimally positioned to operate safely, efficiently and responsibly while capitalizing on profitable growth opportunities and enhancing value for our shareholders and all stakeholders," said Jonathan Price, President and CEO. "This change simplifies our business with a streamlined executive leadership team and regional structure to support our strategy focused on growth in copper, balanced with shareholder returns and the long-term resiliency of our business."
The new business structure organizes Teck around two regional business units:
The North America business unit, which includes Highland Valley Copper, Red Dog and Trail operations, and the Galore Creek, Schaft Creek, and New Range copper growth projects.
The Latin America (LATAM) business unit, which includes Carmen de Andacollo and Quebrada Blanca operations, Teck's interest in Antamina, and the Zafranal, San Nicolas, and NuevaUnión copper growth projects.
The North America and LATAM business units will be supported by enterprise-wide functions and a dedicated Projects group that will develop and execute brownfield and greenfield projects.
In alignment with Teck's new organizational structure, effective September 1, 2024, the executive leadership team reporting to President and CEO Jonathan Price has been reshaped:
Ian Anderson, currently Senior Vice President (SVP) and Chief Commercial Officer, has been appointed Executive Vice President (EVP) and Chief Commercial Officer, responsible for margin enhancement through sales and procurement strategies and execution.
Shehzad Bharmal, currently SVP, Base Metals, has been appointed EVP and Chief Operating Officer, responsible for driving safety, operational excellence and asset optimization at Teck's operations across the North America and LATAM regional business units.
Jeff Hanman, currently SVP, Sustainability and External Affairs, has been appointed EVP and Chief Strategy Officer, responsible for developing and activating corporate strategy and transformation initiatives to position Teck as a leading producer of energy transition metals.
Nic Hooper, currently SVP Corporate Development, has been appointed EVP and Chief Corporate Development Officer, responsible for corporate development and value creation through portfolio optimization and Teck's extensive exploration activities.
Karla Mills, currently SVP, Projects, has been appointed EVP and Chief Project Development Officer, responsible for accelerating growth by ensuring excellence in all aspects of the delivery of our portfolio of copper growth projects.
Crystal Prystai, currently SVP and Chief Financial Officer, has been appointed EVP and Chief Financial Officer, responsible for overall financial management at Teck including the allocation of capital to fund growth, maintain a resilient balance sheet, and return cash to shareholders.
Charlene Ripley, currently SVP and General Counsel, has been appointed EVP and Chief Legal and Sustainability Officer, responsible for maintaining Teck's leading sustainability performance, and supporting the business through our legal, risk and compliance functions.
Dean Winsor, currently SVP and Chief Human Resources Officer, has been appointed EVP and Chief People Officer, responsible for human resources, development of our world-class talent, and the progression of a diverse, respectful and inclusive workplace.
"This executive leadership team bring to their portfolio an incredible breadth of experience and I look forward to working with them to unlock the full value of our premium energy transition metals portfolio and leading copper growth pipeline," said Price.
Fraser Phillips, Senior Vice President, Investor Relations and Strategic Analysis, has announced his planned retirement in the first quarter of 2025. He will continue to lead Teck's investor relations function in the interim.
More information Teck's leadership team is available at www.teck.com/about/leadership.
About Teck
Teck is a leading Canadian resource company focused on responsibly providing metals essential to economic development and the energy transition. Teck has a portfolio of world-class copper and zinc operations across North and South America and an industry-leading copper growth pipeline. We are focused on creating value by advancing responsible growth and ensuring resilience built on a foundation of stakeholder trust. Headquartered in Vancouver, Canada, Teck's shares are listed on the Toronto Stock Exchange under the symbols TECK.A and TECK.B and the New York Stock Exchange under the symbol TECK. Learn more about Teck at www.teck.com or follow @TeckResources.
https://www.teck.com/news/news-releases/2024/teck-announces-new-structure-to-support-energy-transition-metals-growth
Latest Research
Numerical Assessment of the Geothermal and Thermal Energy Storage Potential of the Underground Con Mine (Northwest Territories, Canada)
Dan David Ngoyo Mandemvo, Félix-Antoine Comeau, Jasmin Raymond, Stephen E. Grasby & Viktor Terlaky
Abstract
Flooded mines constitute groundwater reservoirs that can be exploited with geothermal heat pump systems. Modelling such a reservoir is challenging because groundwater flow and heat transport equations need to be solved within the complex geometry of mine workings. To address this challenge, we developed a tridimensional numerical model to estimate the geothermal heat pump and underground energy storage potential, using the Con Mine near Yellowknife, Northwest Territories, Canada as an example. We used the finite element method to simulate the transient 3D temperature field within the water and in the rock mass. The shafts and tunnels of the mine are represented with 1D elements embedded in a tridimensional matrix. Hydraulic and thermal properties were evaluated at the mine site and in the laboratory with samples from outcrops and cores. The numerical model was calibrated to reproduce hydraulic head and temperature measured while pumping one of the shafts. Then, the long-term temperature of the water under different cases of geothermal heat pump operation was simulated for 25 years. The total energy delivered to buildings per year for a flow rate of 0.06 m3 s-1 was 953 MWh vs. 18,048 MWh when the pump depth was 0.3 vs 1 km. We also simulated heat production using solar thermal collectors to provide additional energy storage. The results suggest that it would be easier to increase energy production by augmenting the flow rate or by placing the pump at a greater depth than by adding solar collectors.
https://link.springer.com/article/10.1007/s10230-024-00976-4
The Industry
THE STATE OF CANADA'S MINING INDUSTRY
The Mining Association of Canada (MAC) is the national organization of the Canadian mining industry. We represent companies involved in mineral exploration, mining, smelting, refining and semi-fabrication. Our member companies account for most of Canada's output of metals and minerals. MAC's functions include advocacy, stewardship and collaboration. Our goals are to promote the industry's interests nationally and internationally, to work with governments on policies affecting minerals, to inform the public and to encourage member firms to cooperate to solve common problems. We work closely with provincial and territorial mining associations, other industries, and environmental and community groups in Canada and around the world.
DATA AND SOURCES
This annual report reflects currently available data, the majority from 2020, though some from prior years and some from 2021. Dollar amounts are expressed in Canadian dollars unless noted otherwise.
Author: Brendan Marshall, Vice President, Economic and Northern Affairs
Acknowledgments: This report could not have been prepared without the significant assistance of the dedicated staff of the Minerals and Metals Sector at Natural Resources Canada. Special thanks are also extended to Cynthia Waldmeier from MAC and Monique Laflèche.
As the world addresses the ongoing impacts of COVID-19, there is no doubt that the pandemic continues to loom large over all facets of our lives. COVID-19 has impacted all industries to some degree, and Canada's mining sector was not immune to its effects, but the past two years have highlighted the resiliency of the industry in the face of unprecedented challenges. As the supplier of the materials required for the manufacture of products essential for Canadians, it has been critical that supply chains stay open so that mined products are readily available for the people and businesses who rely on them. With minerals and metals, like gold, copper, carbon, zinc, uranium and nickel, being required inputs for healthcare and communications technologies, the mining industry continues to play an essential role in pandemic recovery efforts.
Globally, Canadian mining operations have withstood COVID-19 better than many peers in other jurisdictions, with companies adapting their health and safety policies to accommodate risks, build confidence, and ultimately return to production with comparably limited disruption. As people and their families continue to get vaccinated and follow public health guidelines, there is optimism in the mining sector that a return to normalcy may be ahead in 2022.
Alongside COVID-19, the other dominant issue facing the world today is climate change and the need for a lower-carbon future. Given that mining literally supplies the materials needed to build the tech that will lower our GHG footprint the question is not whether we require minerals and metals to reach our climate goals, but rather the extent to which Canada will be the supplier the world needs.
Our industry provides the building blocks for clean tech like wind turbines, solar panels, nuclear energy and EV batteries and there is no question that the world needs mining in order to achieve a greener future. At the same time, Canadian mining companies are increasingly recognizing the role they must play in lessening their carbon footprint and are taking the initiative to embrace innovative technologies and practices to do just that.
There are plenty of reasons why these materials should be mined in Canada. Our country produces some of the lowest carbon intensity mineral and metal products anywhere in the world and can and should play a much more significant role in providing the materials the world needs to get to net-zero. As a resource rich nation that sets the global standard of excellence in sustainable mining practices through the Mining Association of Canada's internationally recognized Towards Sustainable Mining® initiative, countries want us for how we go about our business, how we work with communities and raise standards. This program has received international attention with nine mining associations outside of Canada, including most recently Australia and Colombia, having adopted it to support meeting society's needs for minerals, metals and energy products in the most socially, economically and environmentally responsible way. There is no doubt that Canada is one of the safest jurisdictions for mining in the world, and we are recognized for bringing these standards and practices wherever we go.
As demand for minerals and metals continues to grow, there is also an increasing focus on what are referred to as "critical minerals" - vital in aerospace, defence, healthcare, telecommunications, computing and an array of innovative technologies. More than just rare earth elements, critical minerals encompass several minerals and metals critical to the functioning of both our economies and our livelihoods. One of the most frequently referenced benefits of enhancing Canada's critical minerals supply is due to the role these materials play as essential inputs in low-carbon technologies. Another is the fact that our allies in Europe and the US need reliable supplies from countries with strong ESG credentials and few countries can meet this need better than Canada.
ECONOMIC CONTRIBUTION
The mining industry has contributed greatly to Canada's economic strength. The industry directly employs over 377, 000 workers across the country in mineral extraction, smelting, fabrication and manufacturing, and indirectly employs an additional 315,000 people. Proportionally, the mining industry is also the largest private sector employer of Indigenous peoples, providing over 16,500 jobs. In 2020, the minerals sector directly and indirectly contributed $107 billion, or roughly 5%, to Canada's total nominal GDP.
Mining's value to Canada doesn't stop at Canada's borders, however. Canada's mining sector has investments in over 100 countries worldwide and travelling with and working for the sector are the thousands of Canadian mining supply and services companies. Internationally, Canada is one of the leading mining countries and one of the largest producers of minerals and metals. Valued at $102 billion in 2020, mineral exports accounted for 21% of Canada's total domestic exports, selling a diversified array of minerals and metals abroad.
While mining is important to Canada at the local community level, it also contributes to the economies of large cities. Toronto, for example, is the global hub for mining finance. The Toronto Stock Exchange (TSX) and TSX Venture Exchange are the world's number one mining and exploration listing venues, where 34%, or $7.5 billion, of global mining equity capital was raised in 2020.
Other evidence of the industry's vast economic reach is that mining is the single largest industrial customer group of Canada's railways and is a major user of Canada's ports. Annually, the industry accounts for approximately 50% of total rail freight revenue generated and is the largest single shipping sector by volume by both rail and marine modes.
A STATE OF TRANSITION
Canada has long been the dominant global mining nation-in mineral production, mining finance, mining services and supplies, and sustainability and safety. However, there are signs that this leadership position is slipping, which has the potential to jeopardize Canada's ability to seize new opportunities for growth. While 2020 saw a modest increase in the value of mining projects pleading anned and under construction from 2020 to 2030 (by $2 billion year-over-year), the total 10-year projected value ($82 billion) remains nearly 50% below the 2014 level of $160 billion.
Critical to bolstering the industry's domestic and international leadership is a predictable and consistent domestic policy and regulatory environment, with proactive and bold policy to position the country for longer term success. This is particularly important now more than ever given the opportunity before Canada to supply the materials, specifically critical minerals, needed for the low-carbon transition.
Source: The Mining Association of Canada
https://mining.ca/download/36715/
Gold production of Goldcorp from 2007 to 2018
(in 1,000 ounces)
This statistic depicts Goldcorp's gold production from 2007 to 2018. Goldcorp Inc. is one of the world's leading producers of gold, silver, and copper. Goldcorp is based in Vancouver, Canada, and operates in the Americas. In 2018, the company's gold production amounted to approximately 3 million ounces. On April 18, 2019, the merger between Newmont Mining Corp and Goldcorp was completed, forming Newmont Corporation.
Source: Statista
https://www.statista.com/statistics/241588/gold-production-of-goldcorp-since-2007/
Canadian mining industry - statistics & facts
Canada's mining industry is one of the largest in the world. Producing more than 60 metals and minerals, Canada is among the top ten worldwide producers of several commodity metals and minerals. Canada is the largest producer of potash worldwide, the fourth-largest uranium producer, and the third-largest diamond producer. For primary aluminum and nickel, it is the world's fourth and sixth-largest producer, respectively.
Economic contribution of Canada's mining sector
Given the substantial production volume and wide range of mineral products produced by the Canadian mining industry, it is not surprising that it has a significant impact on the country's economy. In 2020, the mining industry contributed some 34.6 billion Canadian dollars to Canada's real gross domestic product (gdp). The mining industry has the highest average wages/salaries of any industry in the country, and as of 2020 there were some 377,000 people directly employed by the mining industry, and a further 315,000 people indirectly employed.
Canadian mining companies
A significant amount of the world's leading mining companies are headquartered in Canada, operating domestically and internationally. For example, Barrick Gold and Teck Resources are both headquartered in Toronto, and the largest potash producing company in the world, Nutrien (known as PotashCorp prior to the 2018 merger with Agrium) is based in Saskatchewan. Additionally, there are more than 3,700 companies that supply the financial, environmental, engineering, geotechnical, and other services to the mining activities throughout the country.
Source: Statista
https://www.statista.com/topics/3067/canada-s-mining-industry/#topicHeader__wrapper
Leading Companies
Agnico Eagle Mines Limited (NYSE: AEM, TSE: AEM)
About Agnico
Agnico Eagle is a senior Canadian gold mining company, producing precious metals from operations in Canada, Australia, Finland and Mexico. It has a pipeline of high-quality exploration and development projects in these countries as well as in the United States and Colombia. Agnico Eagle is a partner of choice within the mining industry, recognized globally for its leading environmental, social and governance practices. The Company was founded in 1957 and has consistently created value for its shareholders, declaring a cash dividend every year since 1983.
OUR STRATEGY
Build a growing, high-quality, low risk, sustainable business
Deliver on performance and growth expectations: Ensure our existing portfolio delivers on expectations, lowers operational risk and generates free cash flow.
Build and maintain a high-quality project pipeline: Ensure we develop a best-in-class project pipeline to replenish mineral reserves and production, while maintaining the quality, manageability and fit of our future portfolio.
Develop our people: Develop and provide growth opportunities for our people, and provide the skills infrastructure to support development of our operations and projects.
Operate in a socially responsible manner: Create value for our shareholders while operating in a safe, and socially and environmentally responsible manner, as we contribute to the prosperity of our people, their families and the communities in which we operate.
https://www.agnicoeagle.com/English/about-agnico/default.aspx
AGNICO EAGLE REPORTS SECOND QUARTER 2024 RESULTS - THIRD CONSECUTIVE QUARTER OF RECORD FREE CASH FLOW UNDERPINNED BY CONSISTENT, STRONG OPERATIONAL AND COST PERFORMANCE; UPPER BEAVER PROJECT STUDY SHOWS SOLID RISK-ADJUSTED RETURNS
July 31, 2024
TORONTO, July 31, 2024 /CNW/ - Agnico Eagle Mines Limited (NYSE: AEM) (TSX: AEM) ("Agnico Eagle" or the "Company") today reported financial and operating results for the second quarter of 2024.
"We continue to deliver strong and reliable operational results which, combined with higher gold prices, drove record operating margin and free cash flow for the third consecutive quarter. As a result of the excellent performance of our operations through the first half of 2024, we are highly confident we will achieve our full year production and cost guidance," said Ammar Al-Joundi, Agnico Eagle's President and Chief Executive Officer. "We generated over half of a billion dollars of free cash flow in the second quarter, supporting a significant strengthening of our balance sheet and increased returns to shareholders. We continue to take a measured approach advancing key pipeline projects that show strong risk-adjusted returns, such as the Detour Lake underground and Upper Beaver projects. Our focus remains on capital discipline and cost control to ensure that the benefits of higher gold prices accrue to our shareholders through strengthening our financial position and increasing shareholder returns," added Mr. Al-Joundi.
Second quarter 2024 highlights:
Strong quarterly gold production - Payable gold production1 was 895,838 ounces at production costs per ounce of $862, total cash costs per ounce2 of $870 and all-in sustaining costs ("AISC") per ounce2 of $1,169. Gold production was led by strong production at Canadian Malartic, LaRonde and Fosterville
Record quarterly adjusted net income3 - The Company reported quarterly net income of $472.0 million or $0.95 per share and adjusted net income of $535.3 million or $1.07 per share
Record quarterly cash provided by operating activities and free cash flow - The Company generated record cash provided by operating activities of $961.3 million or $1.92 per share ($986.2 million or $1.97 per share before changes in non-cash working capital balances4) and free cash flow4 of $557.2 million or $1.12 per share ($582.2 million or $1.17 per share before changes in non-cash working capital balances4)
Strengthening investment grade balance sheet and financial flexibility - The Company increased its cash position by $397.4 million to $922.0 million and significantly reduced net debt as at June 30, 2024. Subsequent to quarter-end, the Company repaid the $100.0 million 5.02% Series B senior notes at maturity and repaid $150.0 million of the $600.0 million unsecured term loan facility drawn in 2023
2024 gold production and cost guidance reiterated - Full year expected payable gold production remains unchanged at approximately 3.35 to 3.55 million ounces in 2024, with total cash costs per ounce and AISC per ounce in 2024 unchanged at $875 to $925 and $1,200 to $1,250, respectively. Total capital expenditures (excluding capitalized exploration) for 2024 are still estimated to be between $1.6 billion to $1.7 billion. Capitalized exploration is now expected to be approximately $187 million for the full year 2024. Further details are set out in the "2024 Guidance" section below
Update on key value drivers and pipeline projects
Approval of measured investments over next three years to further evaluate and de-risk the Detour Lake underground and Upper Beaver projects - Based on internal studies indicating solid risk-adjusted returns for the Detour Lake underground and Upper Beaver projects5, the Company has adopted a measured approach to advance these projects, approving $100.0 million and $200.0 million investments, respectively, over approximately three years. At Detour Lake, a 2.0-kilometre exploration ramp is expected to be developed to a depth of 270 metres to collect a bulk sample and to facilitate infill and expansion drilling of the current underground mineral resource. At Upper Beaver, an exploration ramp and an exploration shaft are expected to be developed to a depth of 250 metres and 760 metres, respectively, to establish underground drilling platforms and collect bulk samples
Detour Lake - In June 2024, the Company released the results of a technical study reflecting the potential for a concurrent underground operation at Detour Lake that would accelerate access to higher grade ore and increase annual production to approximately one million ounces for 14 years starting in 2030 (see the Company's news release dated June 19, 2024). In the second quarter of 2024, with the replacement of the defective grinding media at the SAG mill and record quarterly mill availability of 93.0%, mill throughput improved to 74,637 tonnes per day ("tpd") and is expected to reach the target rate of 76,700 tpd by the end of 2024
Upper Beaver - A positive internal evaluation was completed in June 2024 for a standalone mine and mill scenario at Upper Beaver. Based on this evaluation, the Company believes Upper Beaver has the potential to produce an annual average of approximately 210,000 ounces of gold and 3,600 tonnes of copper, with initial production possible as early as 2030. Over an expected 13-year mine life, total payable gold and copper production is expected to be approximately 2.8 million ounces and 46,300 tonnes, respectively. Estimated total cash costs per ounce on a by-product basis and AISC per ounce on a by-product basis are expected to be approximately $592 and $733, respectively. In addition, the project has the potential to unlock significant exploration potential at depth and within satellite deposits in the Company's Kirkland Lake camp
Odyssey mine at Canadian Malartic - At Odyssey South, record quarterly mining rates and gold production were achieved at approximately 3,750 tpd and 22,300 ounces of gold, respectively. In the second quarter of 2024, ramp development continued to exceed the Company's target, reaching the third production level at East Gouldie at a depth of 832 metres as at June 30, 2024. Shaft sinking advanced at an average rate of 2.5 metres per day and reached a depth of 680 metres as at June 30, 2024. Surface construction is progressing as planned, with a focus on the main hoist building, phase two of the paste plant and the operations complex
Approval of a supplemental exploration budget of $50.0 million - The Company's exploration program returned positive results in the first half of 2024 at Canadian Malartic, Detour Lake and Hope Bay, showing excellent potential to identify additional mineral resources. These results support increased budgets approved by the Company for the second half of 2024.
East Gouldie at Odyssey mine - Recent exploration drilling continued to return good results in the eastern and western extensions of the East Gouldie deposit including 4.5 grams per tonne ("g/t") gold over 6.5 metres at 1,571 metres depth approximately 770 metres east of the current mineral reserves and 2.5 g/t gold over 30.0 metres at 1,473 metres depth and 85 metres west of the current mineral reserves. The results from the ongoing exploration program are anticipated to have a positive impact on the mineral resource estimate at year-end 2024
Detour Lake underground - Infill drilling into the high-grade corridor in the West Pit zone continued to confirm the higher grades and mineralized structure amenable to underground mining. Highlights include 4.0 g/t gold over 22.3 metres at 413 metres depth and 4.4 g/t gold over 30.1 metres at 550 metres depth. Near the proposed exploration ramp, highlights include 20.6 g/t gold over 5.5 metres at 280 metres depth and 4.7 g/t gold over 15.6 metres at 313 metres depth
Madrid at Hope Bay - Exploration drilling during the second quarter of 2024 totalled 35,400 metres and continued to return strong results from infill drilling north of the Patch 7 mineral resources, including 17.0 g/t gold over 25.8 metres at 419 metres depth, 7.2 g/t gold over 8.1 metres at 559 metres depth and 5.3 g/t gold over 18.0 metres at 278 metres depth, further confirming the greater thicknesses and higher gold grades in this area compared to the rest of the Madrid deposit
Reconciliation Action Plan and 2023 Climate Action Report published - On July 10, 2024, the Company released its first Reconciliation Action Plan, reinforcing its commitment to reconciliation with Indigenous Peoples and communities. In addition, on July 31, 2024, the Company released its 2023 Climate Action Report. In line with the recommendations of the Task Force on Climate-related Financial Disclosures and Towards Sustainable Mining Climate Change protocol, the 2023 Climate Action Report outlines how the Company is addressing climate change risks and opportunities
Continued focus on shareholder returns - In the second quarter of 2024, the board of directors declared a quarterly dividend of $0.40 per share. In the second quarter of 2024, the Company also repurchased 763,043 common shares at an average share price of $65.53 for an aggregate of $50.0 million through its normal course issuer bid ("NCIB"), which was renewed in May 2024
For the full release, see:
https://www.agnicoeagle.com/English/investor-relations/news-and-events/news-releases/news-release-details/2024/AGNICO-EAGLE-REPORTS-SECOND-QUARTER-2024-RESULTS---THIRD-CONSECUTIVE-QUARTER-OF-RECORD-FREE-CASH-FLOW-UNDERPINNED-BY-CONSISTENT-STRONG-OPERATIONAL-AND-COST-PERFORMANCE-UPPER-BEAVER-PROJECT-STUDY-SHOWS-SOLID-RISK-ADJUSTED-RETURNS/default.aspx
Barrick Gold Corporation (NYSE: GOLD, TSE: ABX)
ABOUT BARRICK
Our mission is to be the world's most valued gold and copper mining business by finding, developing, and owning the best assets, with the best people, to deliver sustainable returns for our owners and partners.
We are committed to partnering with our host countries and communities to transform their natural resources into tangible benefits and mutual prosperity.
Barrick is a sector-leading gold and copper producer, operating mines and projects in 18 countries in North and South America, Africa, Papua New Guinea and Saudi Arabia.
Our portfolio spans the world's most prolific gold and copper districts and is focused on high-margin, long-life assets. Our highly diversified workforce is drawn almost entirely from our host nations and equipped with world-class skills.
The company's shares trade on the New York Stock Exchange under the symbol GOLD, and on the Toronto Stock Exchange under the symbol ABX.
https://www.barrick.com/English/about/default.aspx
Key Projects Advance as Barrick Keeps Tight Focus on Value Creation and Growth
12 August 2024
Barrick Gold Corporation (NYSE: GOLD) (TSX: ABX) today reported increased earnings and production for its second quarter, in line with guidance, and said the Company was on track for a strong second half of the year.
Net earnings1 were up 25% and the attributable EBITDA margin2 was up 17% quarter on quarter to 48% with strong operating cash flows of $1.16 billion and a material increase in free cash flow3 to $340 million. Net earnings per share were up 24% to $0.21, adjusted net earnings per share3 increased by 68% to $0.32, and the quarterly dividend was maintained at $0.10 per share.
President and chief executive Mark Bristow said while steering the Company towards the achievement of its 2024 guidance, management was also maintaining its focus on value creation and growth.
Key projects designed to boost production and expand the asset base include the recently permitted Goldrush mine in Nevada which is ramping up to annual production in excess of 400,000 ounces by 20285 while the adjacent Fourmile project, 100% owned by Barrick, is shaping up as a new Tier One6 mine with a potential gold production in excess of 500,000 ounces per annum over more than two decades.7 In the Dominican Republic, Pueblo Viejo is completing an expansion project designed to increase gold production to more than 800,000 ounces beyond 2040.8
"On the copper side of the business, two world-class projects are set to deliver into a rising price and demand market. In Zambia, the Lumwana super pit expansion will increase the mine's production from 130,000 tonnes to 240,000 tonnes per annum19 while the Reko Diq project in Pakistan is targeting 400,000 tonnes of copper and 500,000 ounces of gold per annum20," Bristow said.
"The strong cash flows from our operations will fund these and other developments while our robust balance sheet will support the forecast growth and dividends. In the meantime, Barrick's unparalleled ability to replace reserve depletion organically will continue to enhance the scope and quality of our existing asset base."
During the past quarter Barrick launched what is believed to be the industry's first comprehensive biodiversity assessment tool. It was produced in collaboration with external experts and incorporates local knowledge and priorities to establish baselines and identify residual impacts. The development of the tool is another milestone in achieving Barrick's differentiated sustainability strategy aimed at making a tangible difference on the ground, where it matters most.
"We are using this tool at all our sites which allows us to quantify both positive and negative impacts on biodiversity across our operations worldwide. This informed approach will guide targeted actions to take our already established rehabilitation and key biodiversity conservation initiatives to another level," Bristow said.
Financial and Operating Highlights
Financial Results
Q2 2024
Q1 2024
Q2 2023
Realized gold price 9,10 ($ per ounce)
2,344
2,075
1,972
Realized copper price 9,10 ($ per pound)
4.53
3.86
3.70
Net earnings 1 ($ millions)
370
295
305
Adjusted net earnings 4 ($ millions)
557
333
336
Attributable EBITDA 2 ($ millions)
1,289
907
988
Net cash provided by operating activities ($ millions)
1,159
760
832
Free cash flow 3 ($ millions)
340
32
63
Net earnings per share ($)
0.21
0.17
0.17
Adjusted net earnings per share 4 ($)
0.32
0.19
0.19
Attributable capital expenditures 11,12 ($ millions)
694
572
588
Operating Results
Q2 2024
Q1 2024
Q2 2023
Gold
Production 9 (thousands of ounces)
948
940
1,009
Cost of sales (Barrick's share) 9,13 ($ per ounce)
1,441
1,425
1,323
Total cash costs 9,14 ($ per ounce)
1,059
1,051
963
All-in sustaining costs 9,14 ($ per ounce)
1,498
1,474
1,355
Copper
Production 9,15 (thousands of tonnes)
43
40
48
Cost of sales (Barrick's share) 9,16 ($ per pound)
3.05
3.20
2.84
C1 cash costs 9,17 ($ per pound)
2.18
2.40
2.28
All-in sustaining costs 9,17 ($ per pound)
3.67
3.59
3.13
Financial Position
As at 6/30/24
As at 3/31/24
As at 6/30/23
Debt (current and long-term) ($ millions)
4,724
4,725
4,774
Cash and equivalents ($ millions)
4,036
3,942
4,157
Debt, net of cash ($ millions)
688
783
617
Key Performance Indicators
Best Assets
In line Q2 performance positions Barrick to deliver on gold production guidance for 2024
Net earnings 1 up 25% on Q1 and attributable EBITDA margin 2 up 17% to 48%
Higher production and lower costs expected in H2
Pueblo Viejo production growth and cost improvement expected in H2 driven by recovery optimization
Porgera delivers successful plant completion test; ramp-up to capacity remains on track for 2024
Lower costs at Lumwana combined with higher prices drive 124% increase in group's quarterly copper margins 18
Stronger H2 at Lumwana to drive delivery on group copper production guidance for 2024
Reko Diq and Lumwana feasibility studies on track for completion by year-end
Ten rigs now drilling extensive definition program at Fourmile; initial results confirm modelled extensions to mineralization, validating the geological model
Results from disciplined brownfields exploration on track to replace annual depletion and identify further upside opportunities around Barrick's operations in North America, Latin America and Africa & Middle East
Leader in Sustainability
33% decrease in total recordable injuries from Q1
Lost Time Injury-free month for the group in June
Finalization of Barrick's Biodiversity tool to measure No Net Loss and Net Gain
Lumwana Environmental and Social Impact Assessment (ESIA) completed and submitted to authorities for review
Reko Diq ESIA on track to be submitted in Q3
Porgera provides humanitarian and logistical support to communities affected by the Mulitaka landslide
Delivering Value
Q2 operating cash flow of $1.16 billion - up 53% on Q1 - and free cash flow 3 of $340 million
24% increase in net earnings per share quarter on quarter to $0.21 and 68% increase in adjusted net earnings 4 per share to $0.32
Share buyback recommences capturing embedded value in business and growth pipeline
Debt, net of cash reduced by 12% quarter on quarter
$0.10 per share dividend declared
https://www.barrick.com/English/news/news-details/2024/q2-2024-results/default.aspx
Cameco Corporation (NYSE: CCJ, TSE: CCO)
About
Cameco is one of the largest global providers of the fuel needed to energize a clean-air world.
Utilities around the world rely on our nuclear fuel products to generate safe, reliable, emissions-free nuclear power. Together, we are meeting the ever-increasing demand for clean, baseload electricity while delivering energy solutions to support the world's net-zero goals.
We have interests in tier-one mining and milling operations that have the licensed capacity to produce more than 30 million pounds (our share) of uranium concentrates annually, backed by more than 464 million pounds (our share) of proven and probable mineral reserves. We are also a leading supplier of uranium refining, conversion and fuel manufacturing services.
We are proud to be one of Canada's largest employers of Indigenous people, and our land holdings, including exploration, span about 2.1 million acres, the majority near our existing operations in northern Saskatchewan.
A strategy to achieve our vision
Our uranium and fuel services products are used around the world in the generation of safe, carbon-free, affordable, base-load nuclear energy. As we seek to energize a clean-air world, we will do so in a manner that reflects our values. We are committed to identifying and addressing the environmental, social and governance (ESG) risks and opportunities that we believe may have a significant impact on our ability to add long-term value.
We are a pure-play nuclear fuel supplier, focused on providing a clean source of energy, and taking advantage of the long-term growth we see coming in our industry. Our strategy to capture full-cycle value is focused on being disciplined, profitably producing from our tier-one assets, and pursuing value-adding vertical integration while emphasizing safety, people and the environment.
https://www.cameco.com/about
https://www.cameco.com/about/sustainability/our-vision
Cameco Reports 2024 Second Quarter Results
Cameco reports Q2 results: 2024 outlook on track; strong operational performance; financial results reflect transition to tier-one economics; durable demand outlook driving long-term price increases; disciplined strategy capturing long-term value
Saskatoon, Saskatchewan, Canada, July 31, 2024
Cameco (TSX: CCO; NYSE: CCJ) today reported its consolidated financial and operating results for the second quarter ended June 30, 2024, in accordance with International Financial Reporting Standards (IFRS).
"Second quarter operational performance was strong, driving financial results that remain in line with our full-year 2024 outlook," said Tim Gitzel, Cameco's president and CEO. "As expected, those results reflect normal quarterly variability, and while we believe Westinghouse is on track and continues to perform as expected, our overall results continue to be impacted by the required purchase accounting and other non-operational acquisition-related costs related to that investment.
"At the end of the second quarter, Alice Wong announced her retirement as senior vice-president and chief corporate officer. It's been an absolute pleasure to work with Alice during her 37-year career with Cameco. Personally, and on behalf of the company, I would like to thank Alice for her expertise, wisdom, leadership and outstanding contributions, and I wish her the very best in retirement. Rachelle Girard, who was in the role of vice-president of investor relations and has demonstrated sound judgment and excellent leadership qualities in her 18 years with Cameco, has been appointed senior vice-president and chief corporate officer. We are pleased to welcome Rachelle to Cameco's senior executive team and look forward to a strong contribution as we position the company to leverage opportunities in these exciting times for the nuclear industry.
"Cameco is in the enviable position of having what we believe are the world's premier, tier-one assets, with investments across the fuel cycle and the reactor life cycle. With our disciplined strategy that aligns our operational, marketing, and financially focused decisions, in a market where we are seeing sustained, positive momentum for nuclear energy, we believe those assets and investments will allow us to generate full-cycle value.
"Under the marketing element of our strategy, with the positive demand sentiment and a long-term uranium price that has continued to strengthen, we are continuing to be selective in committing our unencumbered, tier-one, in-ground uranium inventory and UF6 conversion capacity to capture greater upside for many years to come. Our contract portfolio spans more than a decade, with annual commitments from 2024 through 2028 increasing this past quarter to an average of about 29 million pounds per year. That portfolio guides the operational element of our strategy, which is underpinned by production rates that align with the market demand, and costs in our uranium segment that continue to reflect our transition back to a tier-one cost structure. And from the perspective of our financial decisions, the strategy sets the foundation for strong cash flow generation, which guides our conservative, risk-managed capital allocation priorities, including a focus on debt reduction and the prudent refinancing activities undertaken in 2024.
"As a proven, reliable supplier we are recognized for our experience and our thorough understanding of how nuclear fuel markets work. With full-cycle support emerging for nuclear energy, reinforced by positive public opinion, promising policy decisions, and market-based solutions, we believe we are in the unique position of utilizing that experience and understanding to provide reliable sources of supply to meet the durable, long-term demand emerging across the fuel cycle.
"Nuclear energy is clearly being recognized as a critical tool in the fight against climate change, with additional advantages in the context of reliability, capacity, scalability and energy security being highlighted by governments and energy-intensive industries alike. Cameco and Westinghouse, as proven producers of uranium products and services that have demonstrated strong and sustainable performance, underpinned by licensed and permitted operations in geopolitically stable jurisdictions, can be expected to benefit from those significant tailwinds.
"We are a responsible, commercial supplier with a strong balance sheet, long-lived, tier-one assets in reliable jurisdictions, and a proven operating track record. We believe we have the right strategy to achieve our vision of 'energizing a clean-air world' in a manner that reflects our values, including a commitment to address the risks and opportunities that we believe will make our business sustainable over the long term."
2024 financial outlook on track: We continue to expect strong cash flow generation, with estimated consolidated revenue of between about $2.85 billion and $3.0 billion. We maintain the outlook for our share of Westinghouse's 2024 adjusted EBITDA of between $445 million and $510 million. See Outlook for 2024 in our second quarter MD&A for more information. Adjusted EBITDA attributable to Westinghouse is a non-IFRS measure, see page 5.
Financial results continuing to reflect a transition to tier-one economics: Solid second quarter results with net earnings of $36 million, adjusted net earnings of $62 million, adjusted EBITDA of $337 million; first six months net earnings of $29 million, adjusted net earnings of $118 million, and adjusted EBITDA of $681 million. Results are driven by normal quarterly variations in contract deliveries in our uranium and fuel services segments, and the addition of Westinghouse, which is also impacted by quarterly variability. Gross profit improved due to increased sales volume and an increase in the Canadian dollar average realized price. Adjusted net earnings and adjusted EBITDA are non-IFRS measures, see page 5.
Uranium segment on track for 2024 outlook with strong operational performance: In our uranium segment, production and financial results for the quarter and for the first six months of the year were strong. Higher revenues and gross profit compared to last year were primarily driven by a higher average realized price. Deliveries of 6.2 million pounds during the quarter were higher than in the second quarter of 2023, while deliveries of 13.5 million pounds year-to-date were lower than the same period last year due to normal quarterly variations, although it remained in line with the delivery pattern disclosed in our annual MD&A. Our annual expectation for uranium deliveries of between 32 million and 34 million pounds remains unchanged. See Uranium in our second quarter MD&A for more information.
Combined fuel services production unchanged: In our fuel services segment, normal quarterly variations in contract deliveries resulted in lower delivery volumes during the second quarter and for the first half of the year, compared to the same periods in 2023. Production was lower in the second quarter and for the first six months due to temporary operational issues that impacted the first half of 2024, resulting in a higher unit cost of sales, driving a slight increase in our 2024 outlook for fuel services average unit cost of sales. Although fuel services outlook and production results are not broken down by individual product line (includes the combined production of UO2, UF6, and heavy water reactor fuel bundles), we previously indicated we were targeting production of 12,000 tonnes at the Port Hope UF6 conversion facility in 2024. Our annual production expectation for fuel services remains between 13.5 million and 14.5 million kgU of combined fuel services products in 2024, but we now expect the conversion component of that guidance to be between 11,000 tonnes and 11,500 tonnes of UF6. See Fuel Services in our second quarter MD&A for more information.
Long-term contracting success continues, maintaining exposure to higher prices: As of June 30, 2024, we had commitments requiring delivery of an average of about 29 million pounds per year from 2024 through 2028, an increase from an average of about 28 million pounds per year at the end of March. We also have contracts in our uranium and fuel services segments that span more than a decade, and in our uranium segment, many of those contracts benefit from market-related pricing mechanisms. In addition, we have a large and growing pipeline of business under discussion, which we expect will help further build our long-term contract portfolio.
Maintaining financial discipline and balanced liquidity to execute on strategy:
Strong balance sheet: As of June 30, 2024, we had $362 million in cash and cash equivalents and $1.4 billion in total debt. In addition, we have a $1.0 billion undrawn credit facility, which matures October 1, 2027. With improving prices under our long-term contract portfolio, the progress we are making in our uranium segment towards the return to our tier-one cost structure, and an expected increase in our UF6 conversion production, we expect to see strong cash flow generation in 2024.
Focused debt reduction: Thanks to our risk-managed financial discipline, and strong cash position, in the second quarter we continued to prioritize the reduction of the floating-rate term loan used to finance the Westinghouse acquisition, repaying another $100 million (US) of the remaining $400 million (US) principal outstanding. We plan to continue to prioritize repayment of the remaining $300 million (US) outstanding principal on the term loan while balancing our liquidity and cash position.
Prudent refinancing: Consistent with the conservative financial management we have demonstrated and our 2024 capital allocation priorities, in the second quarter we successfully refinanced the $500 million senior unsecured debentures that we retired at maturity on June 24, 2024. The new $500 million senior unsecured debentures, Series I, mature May 24, 2031, and have a coupon of 4.94%.
Maintaining financial flexibility: We plan to file a new base shelf prospectus when the current one expires in October.
JV Inkai production purchase allocation remains under discussion: Production at our JV in Kazakhstan was lower for the quarter and the first half of 2024 due to challenges with sulfuric acid supply in the early part of the year. JV Inkai continues to experience procurement and supply chain issues, most notably related to the stability of sulfuric acid deliveries. The 2024 production expectation of 8.3 million pounds of U3O8 (100% basis) is tentative and contingent upon receipt of sufficient volumes of sulfuric acid. Subsequent to the end of the quarter, Kazatomprom issued a news release indicating that at the end of June, the government of the Republic of Kazakhstan introduced amendments to the country's Tax Code, including significant increases to the Mineral Extraction Tax (MET) rate paid by mining entities on uranium production, beginning in 2025. We are evaluating the new MET and if it remains as currently formulated, preliminary conclusions indicate that production costs in Kazakhstan would be similar to northern Saskatchewan operations, depending on the assumptions used for uranium price, production profile, and exchange rate. See Uranium 2024 Q2 Updates in our second quarter MD&A for more information.
Collective agreements approved by union membership at McArthur River/Key Lake and Cameco Fuel Manufacturing (CFM): New three-year collective agreements were signed with United Steelworkers Local 8914 at the McArthur River mine and Key Lake mill, and with unionized employees at CFM, with terms expiring in December 2025 and June 2027, respectively.
Changes to the executive team: Effective June 30, 2024, Alice Wong retired from her role as senior vice-president and chief corporate officer after more than 37 years with Cameco, serving in her current role since 2011. Effective July 1, 2024, Rachelle Girard was appointed senior vice-president and chief corporate officer with oversight of investor relations, human resources, supply chain management, and internal audit and corporate ethics, and Cory Kos was appointed vice-president, investor relations.
For the full release, see:
https://www.cameco.com/sites/default/files/documents/2024-Q2-News-Release_0.pdf
Franco Nevada Corporation (NYSE: FNV, TSE: FNV)
Our Company
Franco-Nevada is the leading gold-focused royalty and streaming company globally with the largest and most diversified portfolio of royalties and streams by commodity, geography, revenue type and stage of project.
Franco-Nevada's shares are listed on the Toronto and New York stock exchanges under the symbol FNV. An investment in Franco-Nevada's shares is expected to provide investors with yield and exposure to commodity price and exploration optionality while limiting exposure to cost inflation and other operating risks.
Our aspiration is to make Franco-Nevada the "go to" gold stock for the generalist investor. We believe that our emphasis on minimizing risk, paying dividends and maintaining a strong balance sheet along with high environmental, social and governance standards is attractive to generalist investors.
Our Team
Franco-Nevada currently operates a small organization. As of March 17, 2022, Franco-Nevada has 35 full-time employees and 5 part-time contractors. As such, Franco-Nevada is dependent upon the continued availability and commitment of our key management, whose contributions to the immediate and future operations of Franco-Nevada are of significant importance. From time to time, we may also need to identify and retain additional skilled management and specialized technical personnel to efficiently operate our business.
https://www.franco-nevada.com/about-us/Overview/default.aspx
Franco-Nevada Reports Q2 2024 Results
13 August 2024
New Mine Start-ups and Acquisitions
"Franco-Nevada benefited from record gold prices in the quarter and realized higher revenues and cash from operations compared to Q1 2024," stated Paul Brink, CEO. "However, our year over year results were lower without the contribution from Cobre Panama and due to lower production at Candelaria and Antapaccay. Results for the second quarter include a catch-up of higher tax rates due to tax measures enacted in response to the OECD's Global Minimum Tax initiative. In the second half of the year, we expect stronger contributions from Candelaria and growing contributions from Tocantinzinho, Greenstone and Salares Norte which have all recently commenced production. We expect to be at the lower end of our GEO guidance range, taking into account lower relative prices from our other commodities. We are pleased to have added two potentially long-life assets to the portfolio subsequent to the quarter: a gold stream on SolGold's Cascabel copper-gold development project in Ecuador and an existing royalty on Newmont's Yanacocha operations in Peru."
Financial Highlights - Q2 2024 compared Q2 2023
110,264 GEOs sold in the quarter, a decrease of 35% (16% decrease excluding Cobre Panama)
$260.1 million in revenue, a decrease of 21% (1% increase excluding Cobre Panama)
$221.9 million in Adjusted EBITDA, or $1.15/share, a decrease of 20% (2% increase excluding Cobre Panama)
$194.4 million in operating cash flow, a decrease of 26%
$69.8 million of additional income tax expense resulting from tax measures enacted in relation to the Global Minimum Tax ("GMT") initiative, of which $23.9 million is current tax expense and $45.9 million is non-cash deferred tax expense
$79.5 million in net income, or $0.41/share, a decrease of 57%
$144.9 million in Adjusted Net Income, or $0.75/share, a decrease of 21%
Quarterly dividend of $0.36/share effective Q1 2024, an increase of 5.88%
Strong financial position with no debt and $2.4 billion in available capital as at June 30, 2024
Sector-Leading ESG
Rated #1 precious metals company and #1 gold company by Sustainalytics, AA by MSCI and Prime by ISS ESG
Committed to the World Gold Council's Responsible Gold Mining Principles
Partnering with our operators on community and ESG initiatives
40% diverse representation at the Board and top leadership levels as a group
Diverse, Long-Life Portfolio
Most diverse royalty and streaming portfolio by asset, operator and country
Attractive mix of long-life streams and high optionality royalties
Long-life mineral resources and mineral reserves
Growth and Optionality
Mine expansions and new mines driving 5-year growth profile
Long-term optionality in gold, copper and nickel and exposure to some of the world's great mineral endowments
Strong pipeline of precious metal and diversified opportunities
In Q2 2024, we recognized $260.1 million in revenue, down 21.2% from Q2 2023 (up 0.7% excluding Cobre Panama). Revenue in the 2023 period included contributions from Cobre Panama, which remained on preservation and safe management during the current period. During the quarter, we benefited from record gold prices, offset by lower contributions from Antapaccay, Candelaria and our Energy assets. Precious Metal revenue accounted for 74.2% of our revenue (60.3% gold, 10.8% silver, 3.1% PGM). Revenue was sourced 81.8% from the Americas (35.9% South America, 6.5% Central America & Mexico, 19.7% U.S. and 19.7% Canada).
Guidance
We expect to be at the lower end of our 2024 Total GEO sales guidance range of 480,000 to 540,000 GEOs. Our Diversified assets are expected to contribute fewer GEOs than initially anticipated based on the revised commodity prices we assume for the remainder of the year ($2,300/oz Au, $27.50/oz Ag, $950/oz Pt, $900/oz Pd, $110/tonne Fe 62% CFR China, $75/bbl WTI oil and $2.25/mcf Henry Hub natural gas). With respect to our Precious Metal assets, we anticipate stronger deliveries in the later half of the year. Production at Candelaria is forecasted to be more heavily weighted to H2 2024, and we expect to benefit from the ramp-up of production at several new mines, including Tocantinzinho, Greenstone and Salares Norte.
Environmental, Social and Governance ("ESG") Updates
During the quarter, Franco-Nevada was named on the Corporate Knights' 2024 list of the Best 50 Corporate Citizens in Canada. As part of the Cascabel stream transaction, Franco-Nevada (Barbados) Corporation agreed to partner with SolGold plc on environmental and social initiatives in the vicinity of the project for $750,000 over a 3-year period on a 70%/30% basis with Osisko Gold Royalties. We continue to expand our community engagement and contributions with existing partners, including teaming up with Nevada Gold Mines to provide funding for an oncology infusion center in Elko, Nevada.
GMT Updates
On June 20, 2024, the Government of Canada enacted the Global Minimum Tax Act ("GMTA"), which implements key measures of the OECD's Pillar Two GMT in Canada and includes the introduction of a 15% GMT that applies to large multinational enterprise groups with global consolidated revenues over [euro]750 million.
In May 2024, the Government of Barbados enacted legislation to implement tax measures also in response to the OECD's Pillar Two global minimum tax initiative. The measures include an increase of the Barbados corporate tax rate to 9% and the introduction of a Qualified Domestic Minimum Top-Up Tax, which, together, aim to ensure that the Barbados effective tax rate payable by an entity subject to Pillar Two is at least 15% for tax years beginning on or after January 1, 2024.
As a result of these changes, the Company recognized an additional $69.8 million of income tax expense in Q2 2024, of which $23.9 million is current tax expense and $45.9 million is deferred tax expense.
For purposes of computing Adjusted Net Income2 for Q2 2024 and H1 2024, we have adjusted amounts which were not related to the respective periods so that users may understand what net income would have been had it only included income tax expense related to income earned in the current periods. Please refer to the reconciliation provided at the end of this news release or to our Q2 2024 MD&A for further details.
Portfolio Additions
Acquisition of Royalty on Yanacocha Operations: Subsequent to quarter-end, on August 13, 2024, we acquired from Compañía de Minas Buenaventura ("Buenaventura") and its subsidiary, an existing 1.8% NSR on all minerals covering Newmont's Yanacocha mine and adjacent mineral properties, including Conga, located in Peru. Consideration for the Yanacocha royalty consists of $210 million paid in cash on closing, plus a contingent payment of $15 million payable in Franco-Nevada common shares payable upon the Conga project achieving commercial production. Franco-Nevada will also hold a right of first refusal on the sale by Buenaventura of certain of their royalty interests, including incremental royalties on Conga and other deposits. The acquisition of the Yanacocha Royalty is effective July 1, 2024, and initial contributions to Franco-Nevada are expected in Q3 2024. Newmont's guidance anticipates production of 290,000 gold ounces for 2024.
Acquisition of Gold Stream on Cascabel Copper-Gold Project: As previously announced, subsequent to quarter-end, our wholly owned subsidiary, Franco-Nevada (Barbados) Corporation ("FNB") acquired a gold stream from SolGold with reference to production from the Cascabel project located in Ecuador. FNB has partnered with Osisko Gold Royalties' subsidiary, Osisko Bermuda Limited ("Osisko"), to provide a syndicated financing package on a 70%/30% basis. FNB will provide a total of $525 million and Osisko a total of $225 million for a total combined funding of $750 million, consisting of $100 million in pre-construction funding and $650 million towards construction once the project is fully funded and further derisked. Please refer to our news release dated July 15, 2024 for further details.
Term Loan with EMX Royalty Corporation: On June 19, 2024, we entered into a term loan agreement with EMX of $35 million. The EMX Term Loan was funded subsequent to quarter-end, on August 9, 2024.
Private Placement with G Mining Ventures: On July 12, 2024, we completed a private placement of $25 million with G Mining Ventures at a price of C$2.279 per share. La Mancha Investments S.à r.l. completed a concurrent $25 million private placement with total proceeds to G Mining of $50 million. The placement is related to G Mining Ventures' business combination with Reunion Gold and advancement of the Oko West gold development project in Guyana.
Term Loan with SolGold: On May 13, 2024, we provided a $10 million term loan to SolGold plc. The term loan was repaid subsequent to quarter-end, on July 17, 2024.
Term Loan with G Mining Ventures: On April 19, 2024, we funded a second and final draw of $33 million under our term loan commitment to G Mining Ventures, thereby fulfilling our $75 term loan commitment. The term loan is part of a financing package we provided to G Mining Ventures in July 2022 in connection with the Tocantinzinho gold project, in Brazil.
Financing Package with Scottie Resources: On April 15, 2024, we acquired a 2.0% gross production royalty on all minerals produced on Scottie Resources Corp.'s ("Scottie") claims in the Stewart Mining Camp in the Golden Triangle in British Columbia, Canada, for a purchase price of $5.9 million (C$8.1 million). Additionally, we acquired 5,422,994 common shares of Scottie for an aggregate of $0.7 million (C$1.0 million).
Q2 2024 Portfolio Updates
Precious Metal assets: GEOs sold from our Precious Metal assets were 82,350, compared to 132,033 GEOs in Q2 2023. Lower contributions from Cobre Panama, Antapaccay and Candelaria were partly offset by higher GEO sales from Condestable, MWS and newly constructed mines.
South America:
Candelaria (gold and silver stream) - GEOs delivered and sold in Q2 2024 were lower than those sold in Q2 2023. During the quarter, mining rates were impacted by the interface of the open pit and historic underground mining stopes, requiring more stockpiled ore to be processed which reduced grades and recoveries. With access to higher grade ore anticipated in the second half of 2024, Lundin Mining anticipates stronger production in H2 2024 and have maintained their production guidance for Candelaria.
Antapaccay (gold and silver stream) - GEOs delivered and sold were lower in Q2 2024 compared to Q2 2023. Mine scheduling was adjusted in part due to a geotechnical event which temporarily limited pit access, resulting in lower production in H1. Glencore anticipates stronger production in H2 2024. Deliveries to Franco-Nevada, which may vary from production levels due to the timing of shipments, are expected to be within our initial expectations for 2024 of 50,000 to 60,000 GEOs.
Antamina (22.5% silver stream) - GEOs delivered and sold were lower in Q2 2024 compared to Q2 2023 as mining is occurring in areas with lower silver grades as anticipated in the life of mine plan.
Condestable (gold and silver stream) - We sold 6,149 GEOs in Q2 2024, compared to 3,043 GEOs sold Q2 2023. GEO sold in the current period included ounces delivered late in Q1 2024 and held in inventory at March 31, 2024.
Tocantinzinho (gold stream) - On July 9, 2024, G Mining Ventures announced it poured first gold and that it remained on track for commercial production in H2 2024. Franco-Nevada received its first deliveries from Tocantinzinho at the end of July 2024. According to the 2022 feasibility study, the project is expected to produce an average of 196,000 ounces of gold annually for the first five years.
Salares Norte (1-2% royalties) - During the quarter, Franco-Nevada received its first royalty payment from Salares Norte, where gold-silver doré was first poured on March 28, 2024. Commissioning and ramp-up of the project have been impacted by earlier than planned winter conditions. Gold Fields revised its 2024 gold equivalent production to between 90,000 and 180,000 ounces (previously between 220,000 and 240,000 ounces).
Posse (Mara Rosa) (1% royalty) - Hochschild Mining announced that the Mara Rosa mine reached commercial production in mid-May 2024 and that the processing plant has already reached nominal capacity of 7,000 tonnes per day. Optimisation initiatives are in place to reach stable throughput of 8,000 tonnes per day.
Cascabel (gold stream and 1% royalty) - In June 2024, SolGold announced the signing of an exploitation contract with the government of Ecuador which establishes key legal and financial terms required for the development of the Cascabel project.
Central America & Mexico:
Cobre Panama (gold and silver stream) - Production at Cobre Panama has been halted since November 2023 with mining activities currently on preservation and safe management. On July 1, 2024, the new president of Panama, José Raúl Mulino, was inaugurated into office. In his inauguration speech, President Mulino announced that the Government of Panama will conduct, with international experts, a strict environmental audit of the Cobre Panama mine.
Guadalupe-Palmarejo (50% gold stream) - GEOs sold from Guadalupe-Palmarejo in Q2 2024 were relatively consistent with those sold in Q2 2023.
U.S.:
Goldstrike (2-4% royalties & 2.4-6% NPI) - GEOs from our Goldstrike royalties increased in Q2 2024 compared to Q2 2023 due to more open pit stockpile tons being processed and a greater proportion of underground production taking place on royalty ground.
Stillwater (5% royalty) - GEOs from our Stillwater royalty decreased in Q2 2024 compared to Q2 2023 as the decline in PGM prices more than offset higher production at the mine. In July 2024, Sibanye-Stillwater reported that its US PGM operations had been impacted by a cyber-attack but that it expected to promptly resume full operations, with accumulated stockpiles expected to be processed in due course.
Bald Mountain (0.875-5% royalties) - GEOs from our Bald Mountain royalties were higher in Q2 2024 than in Q2 2023 due to mine sequencing.
Marigold (0.5-5% royalties) - GEOs from our Marigold royalties were lower in Q2 2024 than in Q2 2023 as production is taking place on ground that carries a lower royalty rate. Production is anticipated to progress to higher royalty rate ground in 2027 through the end of the current mine life.
Canada:
Detour Lake (2% royalty) - In June 2024, Agnico Eagle released the results of a technical study reflecting the potential for a concurrent underground operation at Detour Lake that would increase annual production to approximately one million ounces for 14 years starting in 2030. Agnico Eagle has also approved the development of a two-kilometre exploration ramp to collect a bulk sample and to facilitate infill and expansion drilling of the current underground mineral resource. * Hemlo (3% royalty & 50% NPI) - GEOs from our Hemlo royalties were lower than in Q2 2023 reflecting higher underground mining costs. Barrick anticipates production at Hemlo to improve relative to 2023, where production was impacted by interruptions to the underground operations.
Macassa (Kirkland Lake) (1.5-5.5% royalty & 20% NPI) - GEOs from Macassa were higher in Q2 2024 than in Q2 2023 due an increase in production. Throughput was higher in the quarter as a result of increased productivity from a larger workforce, new ventilation structure, and improved equipment availability, and the addition of ore sourced from the Near Surface deposit, partially offset by lower grades.
Magino (3% royalty) and Island Gold (0.62% royalty) - Alamos completed the acquisition of the Magino mine in July 2024. The transaction is expected to result in substantial synergies through shared infrastructure between the adjacent Magino and Island Gold mines. Alamos has noted potential longer-term upside through a single optimized milling complex at Magino with an expansion to between 15,000 and 20,000 tonnes per day.
Greenstone (3% royalty) - During the quarter, Franco-Nevada received its first royalty payment from Greenstone. Equinox Gold announced that its 100% owned Greenstone mine achieved its inaugural gold pour on schedule on May 22, 2024, with commercial production expected by the end of Q3 2024. Greenstone is expected to produce between 175,000 and 205,000 gold ounces in 2024, and average annual production of approximately 400,000 gold ounces for the first five years.
Canadian Malartic (1.5% royalty) - Agnico Eagle reported that ramp development continued to exceed target, reaching the third production level of East Gouldie in Q2 2024. Exploration drilling continued to return positive results to the east and west of the existing East Gouldie mineral resources, demonstrating the potential to add inferred mineral resources.
Valentine Gold (3% royalty) - Calibre Mining announced a 100,000-metre resource expansion and discovery drill program at the Valentine Gold project. Production is expected to commence in Q2 2025 and average 195,000 gold ounces per year over an initial mine life of 12 years.
Rest of World:
MWS (25% stream) - GEOs delivered and sold from our MWS stream were higher than in Q2 2023 reflecting an increase in tonnes processed and higher recoveries. We continue to anticipate the stream reaching its cap of 312,500 ounces in Q4 2024.
Subika (Ahafo) (2% royalty) - GEOs from our Subika (Ahafo) royalty were higher than in Q2 2023 as production at Subika increased due to higher open pit grade and stronger underground mining rates.
Séguéla (0.6% royalty) - Fortuna reported that production during the quarter was impacted by intermittent power outages, largely mitigated by higher grade feed and the mill operating above nameplate capacity.
Diversified assets: Our Diversified assets, primarily comprising our Iron Ore and Energy interests, generated $64.6 million in revenue, down from $70.7 million in Q2 2023.
Iron Ore:
Vale Royalty (iron ore royalty) - Revenue from the Vale royalty was relatively consistent with Q2 2023. While the Northern System benefited from record production at S11D, the impact was offset by lower production at Serra Norte and higher estimated shipping cost deductions.
LIORC - LIORC declared a cash dividend of C$1.10 per common share in the current period, compared to C$0.65 in Q2 2023. Production from Iron Ore Company of Canada was higher when compared to the prior year period which was impacted by wildfires in Northern Quebec.
Caserones (0.517% effective NSR) - GEOs from our interest in Caserones were lower in Q2 2024 than in Q2 2023 in part due to our lower effective NSR interest in the current period. In January 2024, EMX exercised an option to acquire 0.0531% of our NSR, such that we now own a 0.517% effective NSR, compared to 0.5701% in Q2 2023.
Energy:
U.S. (various royalty rates) - Revenue from our U.S. Energy interests decreased compared to Q2 2023. While revenue from our oil assets was consistent with the prior year, revenue from our gas assets declined. Contribution from our new Haynesville gas acquisition was offset by lower realized gas prices and volumes at our existing Haynesville assets. Revenue in the prior year period had also included $7.0 million in catch-up royalty payments related to new wells in the Permian Basin.
Canada (various royalty rates) - Revenue from our Canadian Energy interests was higher than in Q2 2023. Production at our Orion asset increased relative to the prior year period, and our Weyburn NRI benefited from higher realized prices and lower expenses
Dividend Declaration
Franco-Nevada is pleased to announce that its Board of Directors has declared a quarterly dividend of US$0.36 per share. The dividend will be paid on September 26, 2024, to shareholders of record on September 12, 2024 (the "Record Date"). The dividend has been declared in U.S. dollars and the Canadian dollar equivalent will be determined based on the daily average rate posted by the Bank of Canada on the Record Date. Under Canadian tax legislation, Canadian resident individuals who receive "eligible dividends" are entitled to an enhanced gross-up and dividend tax credit on such dividends.
The Company has a Dividend Reinvestment Plan (the "DRIP") which allows shareholders of Franco-Nevada to reinvest dividends to purchase additional common shares at the Average Market Price, as defined in the DRIP, subject to a discount from the Average Market Price in the case of treasury acquisitions. The Company will issue additional common shares through treasury at a 1% discount to the Average Market Price. The Company may, from time to time, in its discretion, change or eliminate the discount applicable to treasury acquisitions or direct that such common shares be purchased in market acquisitions at the prevailing market price, any of which would be publicly announced. Participation in the DRIP is optional. The DRIP and enrollment forms are available on the Company's website at www.franco-nevada.com. Canadian and U.S. registered shareholders may also enroll in the DRIP online through the plan agent's self-service web portal at www.investorcentre.com/franco-nevada. Canadian and U.S. beneficial shareholders should contact their financial intermediary to arrange enrollment. Non-Canadian and non-U.S. shareholders may potentially participate in the DRIP, subject to the satisfaction of certain conditions. Non-Canadian and non-U.S. shareholders should contact the Company to determine whether they satisfy the necessary conditions to participate in the DRIP.
This press release is not an offer to sell or a solicitation of an offer for securities. A registration statement relating to the DRIP has been filed with the U.S. Securities and Exchange Commission and may be obtained under the Company's profile on the U.S. Securities and Exchange Commission's website at www.sec.gov.
https://s201.q4cdn.com/345177888/files/doc_financials/2024/q2/Franco-Nevada-Reports-Q2-2024-Results-Final-version-2024-08-13.pdf
Hudbay Minerals Inc. (NYSE: HBM, TSE: HBM)
ABOUT US
Guided by our values and powered by the expertise, experience and commitment of our people, our vision is to be a responsible, top-tier operator of long-life, low-cost mines in the Americas.
Hudbay is a diversified mining company primarily producing copper concentrate (containing copper, gold and silver), zinc metal and silver/gold doré. Directly and through its subsidiaries, Hudbay owns three polymetallic mines, four ore concentrators and a zinc production facility in northern Manitoba and Saskatchewan (Canada) and Cusco (Peru), and copper projects in Arizona and Nevada (United States). The company's growth strategy is focused on the exploration, development, operation and optimization of properties it already controls, as well as other mineral assets it may acquire that fit its strategic criteria. Hudbay's vision is to be a responsible, top-tier operator of long-life, low-cost mines in the Americas. Hudbay's mission is to create sustainable value through the acquisition, development and operation of high-quality, long-life deposits with exploration potential in jurisdictions that support responsible mining, and to see the regions and communities in which the company operates benefit from its presence.
OUR STRATEGY
Hudbay has implemented a consistent long-term growth strategy to drive sustainable value for our shareholders and the countries and communities in which we operate. We leverage our exploration, project development, capital discipline and ESG (environmental, social and governance) expertise to build long-life, low-cost mines in mining-friendly jurisdictions. Our intent is to build a world-class asset base with meaningful scale that increases reserves and drives growth through multiple cycles. Our strategy is inextricably linked to our values and deep commitment to responsible mining and sustainable development. This translates into strong, trust-based relationships with our community and government partners, generating mutual benefits and allowing us to build and operate our mines unimpeded by social conflict. We are intensely focused on attracting, retaining and developing top-tier people to sustain our competitive advantages in exploration, mine building and ESG.
https://hudbayminerals.com/about-us/default.aspx
Hudbay Announces Second Quarter 2024 Results; Production Guidance Reaffirmed and Cash Cost Guidance Improved
August 13, 2024
TORONTO, Aug. 13, 2024 (GLOBE NEWSWIRE) -- Hudbay Minerals Inc. ("Hudbay" or the "company") (TSX, NYSE: HBM) today released its second quarter 2024 financial results. All amounts are in U.S. dollars, unless otherwise noted. All production and cost amounts reflect the Copper Mountain mine on a 100% basis, with Hudbay owning a 75% interest in the mine.
"The continued execution of our operational plans in the second quarter has positioned us well to achieve our 2024 production guidance, and our exposure to gold by-products and strong cost control have allowed us to improve our 2024 cash cost guidance," said Peter Kukielski, President and Chief Executive Officer. "Our strong and diversified operating base continues to generate free cash flow driven in part by efficient milling performance in Peru and Manitoba. We are also continuing to execute our British Columbia stabilization plans and planned stripping programs in Peru and British Columbia to unlock higher copper and gold grades in the near-term. This has led to robust EBITDA generation over the past 12 months, which together with our recent successful equity offering, has allowed us to significantly accelerate our deleveraging efforts and transform our balance sheet. We are now even better positioned to continue to advance our many growth initiatives to unlock significant upside potential in our pipeline and further enhance our copper and gold exposure."
Delivered In-line Second Quarter Operating and Financial Results; Production Guidance Reaffirmed and Cash Cost Guidance Improved
Achieved consolidated copper production of 28,578 tonnes and gold production of 58,614 ounces in the second quarter of 2024, in line with quarterly production cadence expectations for 2024.
Enhanced operating platform delivered a 32% increase in copper production and a 20% increase in gold production over the second quarter of 2023ii, reflecting the benefits of a larger diversified operating platform with the addition of Copper Mountain and the continued execution of operational efficiencies across the business.
Strong cost control with consolidated cash costi and sustaining cash costi per pound of copper produced, net of by-product creditsi, in the second quarter of 2024 of $1.14 and $2.65, respectively, in alignment with the cadence of costs expected in 2024.
Reaffirmed full year 2024 consolidated production guidance for all metals including 137,000 to 176,000 tonnes of copper and 263,000 to 319,000 ounces of gold as the company expects stronger production in the second half of 2024 in accordance with the mine production profile.
Improved 2024 annual operating cost guidance with decreased consolidated cash costi guidance range of $0.90 to $1.10 per pound, a result of meaningful exposure to gold by-product credits and continued strong cost control.
Peru operations continued to benefit from strong mill throughput, averaging approximately 85,000 tonnes per day in the second quarter despite a planned semi-annual mill maintenance shutdown. The Pampacancha stripping program to advance to higher grades later this year is well underway. The reduced mining from Pampacancha resulted in 19,217 tonnes of copper and 10,672 ounces of gold produced in the second quarter of 2024, in line with quarterly cadence expectations. Peru cash cost per pound of copper produced, net of by-product creditsi, in the second quarter was $1.78, an expected increase from the first quarter given lower planned production levels, and a 17% decrease compared to the second quarter of 2023.
Manitoba operations produced 43,488 ounces of gold in the second quarter of 2024 as New Britannia continues to operate well above nameplate capacity and budgeted throughput levels. Manitoba cash cost per ounce of gold produced, net of by-product creditsi, was $771 during the second quarter of 2024, similar to the first quarter, and a decrease of 30% compared to the same quarter last year.
British Columbia operations produced 6,719 tonnes of copper at a cash cost per pound of copper produced, net of by-product creditsi, of $2.67 in the second quarter. Cash cost improved by 23% over the first quarter, reflecting ongoing operational stabilization efforts as mine stripping activities are accelerated and mill improvement initiatives are underway at Copper Mountain.
Achieved revenue of $425.5 million and operating cash flow before change in non-cash working capital of $122.0 million in the second quarter of 2024.
Second quarter net loss attributable to owners and loss per share attributable to owners were $16.6 million and $0.05, respectively. After adjusting for items on a pre-tax basis such as a non-cash gain of $2.7 million related to a quarterly revaluation of the company's closed site environmental reclamation provision, a $10.7 million revaluation loss related to the gold prepayment liability, unrealized strategic gold and copper hedges and investments and a $2.1 million write-down of PP&E, among other items, second quarter adjusted earningsi per share attributable to owners was nil.
Net loss attributable to owners of $16.6 million in the second quarter was meaningfully impacted by tax expense of $20.8 million despite having earnings before tax of only $0.4 million. The elevated tax expense was due to mining taxes that are calculated based on taxable mining profits in each operating jurisdiction, the limited deductibility of certain expenses and foreign exchange fluctuations on deferred tax balances.
Adjusted EBITDAi was $145.0 million during the second quarter of 2024.
Cash and cash equivalents and short-term investments increased by $274.0 million to $523.8 million during the first half of 2024 due to a successful equity offering and strong operating cash flows bolstered by higher copper and gold prices, enabling a $405.9 million reduction in net debti during the first half of 2024.
Accelerated Deleveraging and Transformed Balance Sheet
Hudbay's unique copper and gold diversification in Peru and North America provides exposure to higher copper and gold prices and attractive free cash flow generation.
Achieved trailing 12 month adjusted EBITDAi of $824.3 million, a substantial increase from $407.1 million for the 12 months ending June 30, 2023.
Completed successful equity offering on May 24, 2024 for gross proceeds of $402.5 million and net proceeds of $386.2 million, net of transaction costs, to accelerate growth and deleveraging.
Significantly accelerated deleveraging efforts. Repaid all $90.0 million of advances outstanding on the senior secured credit facilities during the second quarter of 2024 and made open market purchases of approximately $34.1 million of the company's senior unsecured notes in June 2024, at a discount. Long-term debt reduced to $1,155.6 million at June 30, 2024 from $1,278.6 million at March 31, 2024.
Reduced net debti to $631.8 million in the second quarter of 2024, reflecting a reduction of $405.9 million over the first half of 2024.
The increase in cash and reduction in long-term debt significantly reduced net debt to adjusted EBITDAi to 0.8x at June 30, 2024 compared to 1.6x at the end of 2023. Achieved the targeted 1.2x net debt to adjusted EBITDAi ratio outlined in the three prerequisites plan (the "3-P plan") for advancing Copper World well ahead of schedule.
Deleveraging efforts continued into the third quarter of 2024 with an additional $48.5 million of open market purchases of the company's senior unsecured notes in July and August.
Scheduled to complete the final payment under the gold prepay liability in August 2024, which was the financing instrument used to fund the refurbishment of the New Britannia gold mill. The elimination of the gold prepay will further increase the company's exposure to higher gold production in Snow Lake.
Total liquidity substantially increased by 65% to $948.5 million at June 30, 2024 from $573.7 million at the end of 2023.
Continued Execution of Growth Initiatives to Further Enhance Copper and Gold Exposure
Successfully ratified multi-year agreements with the unions representing members of Hudbay's workforce in Peru and Manitoba, with no disruption to operations, demonstrating the company's focus on working closely with its employees and community stakeholders to ensure aligned economic and social benefits.
Stripping program for the next mining phase at Pampacancha is underway and is expected to lead to significantly higher copper and gold grades in the fourth quarter of 2024, which together with maintaining strong operating performance at Constancia is expected to continue to generate meaningful free cash flow in Peru.
The New Britannia mill continued to exceed expectations, driving higher gold production in Manitoba. The mill achieved record throughput levels of nearly 2,100 tonnes per day in June and averaged 1,850 tonnes per day in the second quarter, exceeding its original design capacity of 1,500 tonnes per day and its 2024 budgeted capacity of 1,800 tonnes per day due to the successful implementation of process improvement initiatives and effective preventative maintenance measures.
Post-acquisition plans to stabilize the Copper Mountain operations remain in progress with a focus on mining fleet ramp-up activities, accelerated stripping and increasing mill reliability. Higher mill availability of 94% and better-than-planned copper recoveries of 82% were achieved in the second quarter of 2024.
The development of an access drift to the 1901 deposit in Snow Lake remains on track to reach mineralization in early 2025 and is intended to enable confirmation of the optimal mining method for the deposit and underground drilling to further evaluate the orebody and upgrade inferred gold resources to reserves.
Continued to progress the 3-P plan for sanctioning Copper World, with transformed balance sheet nearing targeted levels and remaining key state permits progressing on track and expected in 2024.
Drill permitting for highly prospective Maria Reyna and Caballito properties near Constancia continues to advance through the multi-step regulatory process with the environmental impact assessment application approved for Maria Reyna in June and the Caballito application progressing through the review stage.
Results from the winter 2024 exploration program in Snow Lake confirm two mineralized zones located 400 metres northwest of Lalor with an intersection of 9 metres grading 2.88% copper and 6.27 grams per tonne gold. Also identified follow-up targets for a summer 2024 drill program to test new geophysical anomalies, complete follow-up drilling at Lalor Northwest and complete regional drilling at the Snow Lake satellite properties.
Continuing to advance Flin Flon tailings reprocessing opportunities through metallurgical test work and early economic evaluation to assess the possibility of producing critical minerals and precious metals while reducing the environmental footprint.
Published 2023 annual sustainability report in June 2024, demonstrating meaningful progress towards achieving Hudbay's long-term sustainability goals and commitments with many 2023 activities focused on "our people, our communities and our planet".
Summary of Second Quarter Results
Consolidated copper production of 28,578 tonnes in the second quarter of 2024 declined from the first quarter of 2024 but was in line with mine plan expectations. Consolidated gold production of 58,614 ounces in the second quarter declined from the strong levels achieved in the first quarter but was in line with mine plan expectations. Production was impacted by lower planned grades in Peru and Manitoba, a planned semi-annual mill maintenance shutdown in Peru and the execution of planned stripping programs at Pampacancha and Copper Mountain to access higher grades.
In the second quarter of 2024, consolidated cash cost per pound of copper produced, net of by-product creditsi, was $1.14, compared to $0.16 in the first quarter of 2024. This change was mainly the result of lower gold by-product credits from lower gold sales volumes as well as lower copper production. Consolidated sustaining cash cost per pound of copper produced, net of by-product creditsi, was $2.65 in the second quarter of 2024 compared to $1.32 in the prior quarter, due to the same reasons outlined above as well as higher sustaining capital expenditures in line with company guidance expectations.
During the second quarter of 2024, cash generated from operating activities of $138.5 million was relatively unchanged from the first quarter of 2024. Operating cash flow before change in non-cash working capital of $122.0 million in the second quarter of 2024 was lower than the first quarter. Operating cash flow before change in non-cash working capital was impacted by lower planned production levels, partially offset by higher realized metal prices and continued strong operational cost performance across the business. It was also impacted by lower copper sales volumes in Peru and lower zinc sales volumes in Manitoba due to timing of shipments. These cash flows benefited from effective working capital management as the company reduced stockpile while collecting on its receivables. Adjusted EBITDAi was $145.0 million in the second quarter compared to $214.2 million in the first quarter of 2024 and was impacted by the same factors affecting operating cash flow as noted above.
Net loss attributable to owners and loss per share attributable to owners in the second quarter of 2024 were $16.6 million and $0.05, respectively, compared to net earnings attributable to owners and earnings per share attributable to owners of $59.4 million and $0.17, respectively, in the first quarter 2024. Net loss attributable to owners of $16.6 million was meaningfully impacted by tax expense of $20.8 million despite having earnings before tax of only $0.4 million in the quarter. The elevated tax expense was due to mining taxes that are calculated based on taxable mining profits in each operating jurisdiction, the limited deductibility of certain expenses and foreign exchange fluctuations on deferred tax balances. Adjusted net earnings attributable to ownersi and adjusted net earnings per share attributable to ownersi in the second quarter of 2024 were $0.1 million and nil per share, respectively, after adjusting for a $10.7 million revaluation loss related to the gold prepayment liability and revaluation of the company's strategic gold and copper hedges and investments, an $8.8 million revaluation of share-based compensation due to a higher share price and a $2.1 million write-down of PP&E, among other items.
As at June 30, 2024, total liquidity was $948.5 million, including $483.8 million in cash and cash equivalents, $40.0 million in short-term investments as well as undrawn availability of $424.7 million under the company's revolving credit facilities. Net debti declined substantially by $362.4 million during the second quarter of 2024 to $631.8 million as part of the company's efforts to deleverage the balance sheet. This was driven by the free cash flow generation from the operations and the equity offering which contributed cash of $386.2 million, net of transaction and issuance costs. Some of these funds were utilized to repay all $90.0 million of debt outstanding on the senior secured credit facilities as at March 31, 2024 and to repurchase and retire approximately $34.1 million of the company's senior unsecured notes. As a result, Hudbay has made significant progress towards achieving the deleveraging targets outlined in the 3-P plan for sanctioning Copper World.
Production Guidance Reaffirmed and Cash Cost Guidance Improved
Hudbay has reaffirmed its full year 2024 consolidated production guidance for all metals, including 137,000 to 176,000 tonnes of copper and 263,000 to 319,000 ounces of gold as the company anticipates stronger production in the second half of 2024 in accordance with the mine production profile. The company expects 2024 consolidated copper production to be below the midpoint of the guidance range, while 2024 consolidated gold production is expected to be above the midpoint of the guidance range. This is a result of a combination of lower-than-expected grades and timing impacts from heavy rains in Peru, as well as the ongoing ramp-up of stabilization efforts at Copper Mountain, offset by the continued strong operational performance in Manitoba driven by New Britannia performance and grades exceeding the company's expectations.
The company is improving its 2024 annual consolidated cash cost guidance range to $0.90 to $1.10 per pound from the original guidance range of $1.05 to $1.25 per pound, as a result of meaningful exposure to gold by-product credits and continued strong cost control. Hudbay has reaffirmed all other 2024 guidance metrics.
Peru Operations Review
During the second quarter of 2024, the Peru operations produced 19,217 tonnes of copper, 10,672 ounces of gold, 450,833 ounces of silver and 369 tonnes of molybdenum. Production was lower than the first quarter of 2024 primarily due to planned lower grades as the company executes a stripping program at Pampacancha to advance to the next mining phase, as further discussed below, in addition to a planned semi-annual mill maintenance shutdown in the second quarter. The company is on track to achieve its 2024 production guidance for all metals in Peru.
Total ore mined in the second quarter of 2024 increased by 38% compared to the first quarter and was in line with the mine plan. Ore mined from Pampacancha during the second quarter decreased to 1.3 million tonnes compared with 2.2 million tonnes in the first quarter of 2024 as a result of higher capitalized stripping activities. Mining efforts at Pampacancha are focused on continuing the stripping program to advance to the next mining phase and the company is on track to resume mining in higher copper and gold grade areas later in the year.
The Peru operations continue to benefit from strong mill throughput, averaging approximately 87,000 tonnes processed per day year-to-date. Ore milled during the second quarter of 2024 was 4% lower than the first quarter due to the scheduled semi-annual mill maintenance shutdown. Ore milled included supplemental ore feed from stockpiles during the quarter as the team advances pit stripping activities. Milled copper and gold grades of 0.30% and 0.07 grams per tonne, respectively, decreased in the second quarter of 2024 compared to the first quarter due to lower amounts of high-grade copper and gold from Pampacancha, in addition to lower grades from the processing of stockpiled ore. Recoveries of copper and gold during the second quarter of 2024 were 83% and 61%, respectively, and were in line with metallurgical models.
Combined mine, mill and G&A unit operating costsi in the second quarter were $12.68 per tonne, 16% higher than the first quarter of 2024 primarily due to higher milling costs and lower throughput associated with the planned semi-annual mill maintenance shutdown.
Payable copper metal sold in the second quarter of 2024 was lower than the first quarter due to lower copper production and a 10,000 wet metric tonne copper concentrate shipment that remained unsold at the end of the second quarter and was recognized as revenue early in the third quarter of 2024.
Cash cost per pound of copper produced, net of by-product creditsi, in the second quarter of 2024 was $1.78, an increase from the $0.43 achieved in the first quarter of 2024 due to lower planned copper production, higher milling costs and lower by-product credits, partly offset by lower treatment and refining charges. Full year cash costs are expected to be within the 2024 guidance range.
Sustaining cash cost per pound of copper produced, net of by-product creditsi, was $2.61 for the second quarter, higher than the first quarter of 2024 of $1.06, primarily due to the same factors affecting cash cost.
During the quarter, the Peruvian Ministry of Energy and Mines approved a regulatory change, Supreme Decree 011-2024-EM, to allow mining companies in Peru to increase throughput by up to 10% above permitted levels. Previously, the regulation only allowed for an increase of up to 5%. As such, the company is evaluating the potential to increase future production at Constancia.
Manitoba Operations Review
The Manitoba operations produced 43,488 ounces of gold, 2,642 tonnes of copper, 8,087 tonnes of zinc and 210,647 ounces of silver during the second quarter of 2024. Compared to the exceptional results achieved in the first quarter of 2024, production decreased primarily due to a planned lower grade mining sequence in the quarter. The Snow Lake operations in Manitoba maintained steady production results despite overcoming challenges in the second quarter of 2024, including forest fires and temporary production interruptions at the Lalor mine, partially offset by stronger than budgeted throughput at New Britannia. The Manitoba team's resilience and dedication ensured that the operations continued to function effectively and efficiently while achieving quarterly production targets. The company is on track to achieve its 2024 production guidance for all metals in Manitoba.
Total ore mined in Manitoba in the second quarter of 2024 was 5% lower than the first quarter. Gold, copper, zinc and silver grades mined at Lalor during the second quarter were 23%, 18%, 5% and 5% lower, respectively, compared with the first quarter of 2024. These changes reflect temporary Lalor mine production disruptions and the completion of a planned lower grade mining sequence in the quarter. During the quarter, the Lalor mine encountered issues with the production hoist gearbox and electrical faults on the hoist drives, causing a ten-day stoppage in hoisting ore. The maintenance teams collaborated closely with original equipment manufacturers to resolve these issues quickly. During the hoisting outage, the operations team focused on value-added activities, including underground ore buildup close to the shaft, waste filling, increased maintenance, building longhole inventory, and trucking ore to surface. Additionally, the team implemented stope design modifications that yielded positive results by improving mucking efficiency throughout the lifecycle of the stopes.
The New Britannia mill consistently operated above nameplate capacity, averaging approximately 1,850 tonnes per day in the second quarter of 2024 and achieving a new monthly record of nearly 2,100 tonnes per day in June. Ongoing efforts to increase throughput are aligned with the company's long-term objectives to maximize gold production by directing more gold ore from Lalor to the New Britannia mill for higher gold recoveries. Recoveries of gold, copper and silver in the second quarter of 2024 were 90%, 94% and 83%, respectively.
The Stall mill processed 5% more ore in the second quarter of 2024 than the first quarter. Recoveries of gold, copper and silver in the second quarter of 2024 were slightly lower than the first quarter primarily due to lower grades.
Combined mine, mill and G&A unit operating costsi in the second quarter of 2024 were C$225 per tonne, a 5% decrease compared to the first quarter. This decrease was a result of higher throughput and lower mining, milling and G&A costs compared to the first quarter.
Payable zinc metal sold was lower than prior periods as there was a 10,000 wet metric tonne zinc concentrate shipment that remained unsold at the end of the second quarter and will be recognized as revenue in the third quarter of 2024.
Cash cost per ounce of gold produced, net of by-product creditsi, in the second quarter of 2024 was $771 per ounce, a 5% increase compared to the first quarter primarily due to lower gold production. Full year gold cash cost is expected to remain within the 2024 guidance range.
Sustaining cash cost per ounce of gold produced, net of by-product creditsi, in the second quarter of 2024 was $1,163, an increase of 22% compared to the first quarter due to lower gold production and higher sustaining capital costs during the quarter.
Hudbay's Manitoba operation also progressed its sustainability initiatives by reducing propane and diesel consumption in the first half of 2024 compared to the same period in 2023. In addition, at Lalor, an initiative to capture and recycle natural groundwater and use it as process water to reduce the freshwater intake into the mine has proven to be effective.
British Columbia Operations Review
During the second quarter of 2024, the British Columbia operations produced 6,719 tonnes of copper, 4,454 ounces of gold and 77,227 ounces of silver. Production of copper was slightly lower than the first quarter of 2024 primarily as a result of lower head grades from the use of stockpiled ore to feed the mill while mining activities are focused on executing the planned stripping program. Gold production was consistent with the first quarter of 2024. The company has reaffirmed its 2024 production guidance ranges for all metals in British Columbia.
Hudbay has been focused on advancing operational stabilization plans, including opening up the mine by adding additional mining faces, adding to the mining fleet, optimizing the ore feed to the plant and implementing plant improvement initiatives that mirror Hudbay's successful processes at Constancia. While the benefits of these stabilization plans are not expected to be fully realized until 2025, the mine has successfully increased the total tonnes moved and has seen stronger mill performance as demonstrated by higher mill availability of 94% and above-target copper recoveries of 82% in the second quarter of 2024. As a result, year-to-date mill performance has resulted in the highest mill availability and highest copper recoveries in the last decade.
Total ore mined at Copper Mountain in the second quarter of 2024 was 2.2 million tonnes, a decrease compared to the first quarter of 2024. As planned, ore stockpiles were utilized as ore feed to the mill while the mine operation team increased waste stripping activities. Total material moved continued to ramp up in the quarter as a result of effective usage of the mining fleet as part of the fleet production ramp up plan to execute the accelerated stripping program to access higher head grades. This plan entails remobilization of the existing mining truck fleet and the deployment of an additional shovel, drill and associated equipment. Earlier this year, the company ordered five new haul trucks to execute additional stripping activities over the next three years at a lower cost than the contractor mining approach that was contemplated in the technical report. Three of the five new haul trucks and the additional shovel and drill were put in production in June, and all five haul trucks were in operation by August. As a result, total material moved is expected to continue to increase quarter-over-quarter as per the mine plan.
The mill processed 3.2 million tonnes of ore during the second quarter of 2024, a 2% increase over the first quarter, benefiting from stabilization and reliability initiatives within the mill processing circuit. The average mill availability during the second quarter of 2024 increased to 94% from 90% in the first quarter, while maintaining a stable throughput rate. Mill throughput in the second quarter of 2024 was limited by reduced reliability of the secondary crushing circuit, caused primarily by unplanned maintenance events and elevated clay material in the mine feed. During the quarter, a number of initiatives were advanced to address these issues and other identified constraints and improve throughput to targeted levels, with the benefits expected to be realized in the second half of 2024. Initiatives that began earlier in the year are progressing on target, including reprogramming the mill expert system, installation of advanced semi-autogenous grinding control instrumentation, redesign of the SAG liner package and updated operational procedures intended to remove magnetite from the pebble stream.
Milled copper grades during the second quarter of 2024 were 7% lower than the first quarter as the company continued to draw on stockpiled ore. Copper recoveries were slightly lower than the first quarter of 2024, but in line with expectations despite lower grades as the operations improved the regrind circuit constraint and implemented the flotation operational strategy improvements, including reagent selection and dose modification.
The benefits of the operational stabilization improvements are expected to continue to be realized throughout 2024. The company is also accelerating engineering studies to debottleneck and increase the nominal plant capacity to 50,000 tonnes per day earlier than was contemplated in the technical report.
Combined mine, mill and G&A unit operating costsi in the second quarter of 2024 were C$19.65 per tonne milled, 17% lower than the first quarter of 2024 primarily due to lower mining costs as there were high ore rehandling costs in the first quarter of 2024. Combined unit operating costs are expected to decrease over time as the company continues to implement its stabilization and optimization initiatives at Copper Mountain. As the hiring and training of additional haul truck drivers continues, the company expects to have a fully trained complement of truck drivers in August to support the larger mining fleet, which is expected to increase material moved and reduce unit operating costs.
Cash cost per pound of copper produced, net of by-product creditsi, in the second quarter of 2024 was $2.67. Cash costs were lower than the first quarter of 2024 by 23% for the same reason as mentioned above regarding the unit cost variance. Full year cash costs are expected to be within the 2024 guidance range.
Sustaining cash cost per pound of copper produced, net of by-product creditsi, in the second quarter of 2024 was $5.56, 15% higher than the first quarter mainly as a result of planned higher capitalized stripping costs to unlock the mine potential according to the company's stabilization plan.
Enhanced Balance Sheet through Successful Equity Offering and Accelerated Debt Reduction
The company took several prudent measures in the second quarter of 2024 to further improve its balance sheet position, including more than $150 million of combined debt repayments and gold prepayment liability reductions:
Completed successful $402.5 million equity offering - On May 24, 2024, Hudbay closed a public offering of common shares for gross proceeds of $402.5 million, resulting in net proceeds of $386.2 million after transaction costs.
Fully repaid $90.0 million outstanding under the revolving credit facilities - The company fully repaid $90 million of debt outstanding under its revolving credit facilities during the quarter with no remaining amounts drawn (other than letters of credit).
Repurchased and retired $34.1 million of senior unsecured notes - The company made open market purchases of $11.6 million of the 2026 senior unsecured notes and $22.5 million of the 2029 senior unsecured notes during the quarter.
Delivered $24.0 million under gold forward sale and prepay agreement - The company completed three additional months of gold deliveries during the quarter and is scheduled to fully repay the gold prepay facility by the end of August 2024, which was used to fund the refurbishment of the New Britannia gold mill.
As a result of these deleveraging efforts and continued cash flow generation, Hudbay has substantially reduced net debti to $631.8 million at June 30, 2024, from $1,037.7 million at the end of 2023. The net debt reduction, together with higher levels of adjusted EBITDAi over the last twelve months, has significantly improved the company's net debt to adjusted EBITDA ratioi to 0.8x compared to 1.6x at the end of 2023.
Subsequent to the quarter, deleveraging efforts continued in July and August with an additional $48.5 million of open market purchases of the senior unsecured notes, at a discount.
The improved balance sheet flexibility and accelerated debt reduction significantly advances the company's progress as part of its 3-P plan for sanctioning Copper World, and results in the successful achievement of the targeted 1.2x net debt to adjusted EBITDA ratio well ahead of schedule.
Disciplined Capital Allocation Driving Increased Copper and Gold Exposure
Hudbay continued to deliver positive free cash flow generation this quarter with strong gold production in Manitoba and strong cost control across the operations, while advancing planned stripping activities in Peru and British Columbia to drive higher copper and gold production levels in the second half of 2024. The company also continues to evaluate areas to further improve mill performance across the business as part of its continuous improvement efforts.
In addition to enhancing balance sheet flexibility through debt repayments as mentioned above, the net proceeds of the equity offering are intended to fund near-term growth initiatives, including acceleration of mine pre-stripping activities and mill optimization initiatives at Copper Mountain, and to evaluate mill throughput enhancement opportunities at Constancia and New Britannia.
Copper Mountain Stabilization Efforts to Drive Higher Copper Production
The key elements of Hudbay's stabilization plans for Copper Mountain include executing a campaign of accelerated stripping to access higher grades and implementing several plant improvement initiatives to increase mill throughput and recoveries.
Earlier this year, the company commenced a three-year accelerated stripping program to mitigate the substantially reduced stripping that occurred over the four years prior to Hudbay's acquisition. The company has successfully remobilized all 28 haul trucks and added five additional haul trucks this year to execute the accelerated stripping campaign at a lower cost and avoid contractor mining costs. The accelerated stripping program is expected to improve operating efficiencies and lower unit operating costs.
Hudbay's mine plan as disclosed in the December 2023 technical report for Copper Mountain assumes a mill ramp up to its nominal capacity of 45,000 tonnes per day in 2025 and an expansion to the permitted capacity of 50,000 tonnes per day in 2027. Mill initiatives are progressing as planned for 2024, including reprogramming the mill expert system, installing advanced grinding control instrumentation, flotation operational strategy improvements and improved maintenance practices. In the second half of 2024, the company is also accelerating various engineering studies to increase mill throughput to 50,000 tonnes per day earlier than was originally contemplated in the technical report.
Hudbay has exceeded the targeted $10 million in annualized corporate synergies and is on track to realize the three-year annual operating efficiencies target.
New Britannia Mill Performance Exceeding Expectations to Drive Higher Gold Production
Hudbay completed the brownfield investment in New Britannia in 2021 and refurbished the mill to a nominal capacity of 1,500 tonnes per day. This provided additional processing capacity to the Snow Lake operations and allowed the company to achieve higher gold recoveries of approximately 90% as Lalor transitioned to the higher gold and copper areas of the mine plan. The New Britannia mill has been consistently exceeding performance expectations, achieving 1,650 tonnes per day in 2023, more than 1,850 tonnes per day in the first half of 2024, and a new monthly record of nearly 2,100 tonnes per day in June 2024.
The final payment for the New Britannia gold prepay financing in August 2024 further enhances the company's exposure to higher gold production in Snow Lake. With approximately two million ounces of contained gold in current mineral reserve estimates and another 1.4 million ounces of contained gold in inferred mineral resources, the New Britannia investment has unlocked significant value in Snow Lake. This could be further enhanced by regional exploration upside and the current strong gold price environment.
In the first quarter of 2024, the company received a permit approval to increase the production rate at New Britannia to 2,500 tonnes per day, which will provide the opportunity to process more Lalor ore at the New Britannia mill and create additional processing capacity for potential new regional discoveries in Snow Lake.
Peru Investment Programs to Drive Higher Copper and Gold Production
The company is well-advanced in executing a stripping program for the next mining phase at the Pampacancha pit. This stripping program is expected to continue until September and is intended to unlock higher copper and gold grades at the Peru operations in the fourth quarter of 2024.
During the second quarter of 2024, the Peruvian government approved regulatory changes to allow mining companies to increase their annual mill throughput levels up to 10% above permitted levels. Hudbay is evaluating the potential to increase planned production levels at Constancia, as early as 2026, which could partially offset the grade declines after the completion of mining at Pampacancha in late 2025.
Advancing Permitting at Copper World
The first key state permit required for Copper World, the Mined Land Reclamation Plan, was initially approved by the Arizona State Mine Inspector in October 2021 and was subsequently amended and approved to reflect a larger private land project footprint. This approval was challenged in state court, but the challenge was dismissed in May 2023. In late 2022, Hudbay submitted the applications for an Aquifer Protection Permit and an Air Quality Permit to the Arizona Department of Environmental Quality. The public comment period for the Aquifer Protection Permit was completed in the second quarter while the public comment period for the Air Quality Permit commenced in July. Hudbay continues to expect to receive these two outstanding state permits in the second half of 2024.
Copper World is one of the highest-grade open pit copper projects in the Americasiii with proven and probable mineral reserves of 385 million tonnes at 0.54% copper. Copper World Phase I contemplates average annual copper production of 85,000 tonnes over a 20-year mine life, at average cash costs and sustaining cash costs of $1.47 and $1.81 per pound of copper, respectively. In addition, there remains approximately 60% of the total copper contained in measured and indicated mineral resources (exclusive of mineral reserves), providing significant potential for a Phase II expansion and mine life extension. The inferred mineral resource estimates are at a comparable copper grade and also provide significant upside potential. Copper World is expected to provide meaningful copper to support the U.S. domestic supply chain.
Exploration Update
Manitoba Exploration
Lalor Northwest Follow-up Drilling Confirms Two Mineralized Zones
Hudbay's 2024 winter drill program included follow-up drilling of a geophysical anomaly located northwest of Lalor, which was initially drilled in 2023. Recent positive assay results at Lalor Northwest confirm the discovery of two mineralized zones located within 400 metres of the existing Lalor underground infrastructure, as shown in Figure 1.
In 2023, hole CH2302 intersected two mineralized zones, including 4.8 metres at 2.97% copper, 2.92 grams per tonne gold and 80.3 grams per tonne of silver. Earlier in 2024, hole CH2406 intersected the same two mineralized zones, including 9.0 metres of 2.88% copper, 6.27 grams per tonne of gold and 88.9 grams per tonne of silver. See "Qualified Person and NI 43-101".
These promising results justified additional follow-up drilling in the summer of 2024 with two drill rigs currently turning at Lalor Northwest. Drilling results are expected to be received by the end of the year and will be used to determine the potential size of Lalor Northwest and the potential for future underground drift development from Lalor for further definition drilling. Lalor Northwest has the potential to add near-term production growth at Lalor, extend mine life and create additional value from the Snow Lake operations.
Snow Lake 2024 Regional Geophysics Program Identifies Prospective Targets; Summer Drill Program Initiated
During the first half of 2024, Hudbay conducted the company's largest geophysics program in its history in Snow Lake. This program resulted in the identification of a number of anomalies and prospective targets across the Snow Lake tenements which are currently being tested near the former Reed and Anderson mines and in the vicinity of the Bur and Rail deposits that were acquired as part of the Rockcliff transaction. Hudbay intends to continue similar size geophysical programs and mapping of the company's consolidated land package in the region in 2025.
The 2024 geophysical program included surface electromagnetic (EM) surveys covering a 25 square kilometre area, as highlighted in Figure 2, including the recently acquired Cook Lake claims that had been previously untested by modern deep geophysics, which was the discovery method for the Lalor deposit. This surface EM survey used cutting-edge techniques that enabled the team to detect deep targets at depths of over 1,000 metres below surface. The new EM methodology is unique to Hudbay and will lead to advanced understanding of the mineralization at depths previously undetectable.
In addition, one very strong deep anomaly located at Cook Lake North, approximately six kilometres from Lalor, was identified through borehole EM surveys. 2024 drilling intersected multiple horizons of non-economic mineralization but a deeper and stronger conductor will be tested in the coming weeks by extending the drill hole at depth as part of the summer-fall 2024 exploration program.
Hudbay continues to execute its 2024 drilling program with the goal of extending known mineralization near the Lalor deposit to further extend mine life as well as to find a new anchor deposit within trucking distance of the Snow Lake processing infrastructure. The 2024 summer drill program is well underway, and the team currently has six drill rigs turning in Snow Lake, including two drills at Lalor Northwest as mentioned above. The company expects to ramp up to eight drill rigs by the end of August to test new geophysical targets and complete follow-up drilling at potential regional satellite deposits. Results from the summer drill program are expected in late 2024.
Advancing Access to the 1901 Deposit
In the first quarter of 2024, Hudbay commenced the development of a smaller profile drift from the existing Lalor ramp towards the 1901 deposit. The 1901 development drift is expected to reach the mineralization in early 2025, following which the company plans to conduct definition drilling intended to confirm the optimal mining method, evaluate the orebody geometry and continuity, and convert inferred mineral resources in the gold lenses to mineral reserves. Pending positive results from the drilling programs, the plan is to initiate a haulage drift and other related mining infrastructure in 2025 and 2026 in anticipation of full production from the 1901 deposit in 2027.
Continuing to Advance Studies for Flin Flon Tailings Reprocessing
Hudbay continues to advance studies to evaluate the opportunity to reprocess Flin Flon tailings where more than 100 million tonnes of tailings have been deposited for over 90 years from the mill and the zinc plant. The studies are evaluating the potential to re-purpose the existing Flin Flon concentrator, which is currently on care and maintenance, with flow sheet modifications to reprocess tailings to recover critical minerals and precious metals while creating environmental and social benefits for the region.
The company continues to advance metallurgical test work, and during the second quarter of 2024, it received results from the initial confirmatory drill program in the section of the tailings facility that was utilized by the zinc plant. The results confirmed the grades of precious metals and critical minerals previously estimated from historical zinc plant records. An early economic study to evaluate the opportunity to reprocess initially the portion where the zinc plant tailings were deposited has shown promising results that warrant further engineering work in the second half of 2024. A similar study is planned with respect to the mill tailings.
Peru Exploration
Hudbay controls a large, contiguous block of mineral rights with the potential to host mineral deposits in close proximity to the Constancia processing facility, including the past producing Caballito property and the highly prospective Maria Reyna property. The company commenced early exploration activities at Maria Reyna and Caballito after completing a surface rights exploration agreement with the community of Uchucarcco in August 2022. As part of the drill permitting process, environmental impact assessment applications were submitted for the Maria Reyna property in November 2023 and for the Caballito property in April 2024. The environmental impact assessment (EIA) for Maria Reyna was approved by the government in June 2024 and the Caballito application continues to make progress through the permitting process. This represents one of several steps in the drill permitting process, which is expected to take approximately 12 months to complete after the EIAs are approved.
New Concentrate Contracts with Attractive Terms
In light of the extremely tight copper concentrate market that currently exists, Hudbay has strategically taken steps to preserve uncommitted copper concentrate units. This has allowed the company to enter into several new contracts covering approximately 20% to 25% of its estimated Constancia concentrate sales over the next four years with favourable treatment and refining charges ("TC/RC"), including contracts with fixed TC/RCs that are negative in certain years and other contracts that have TC/RC priced at significant discounts of 45% to 65% to market benchmark terms.
Collective Bargaining Agreements Ratified in Manitoba and Peru
In June, new three-and-a-half year collective bargaining agreements were ratified by the members of all five unions at Hudbay's Manitoba operations, effective July 1, 2024. In July, a new three-year agreement was signed with the union at Hudbay's Peru operations, effective November 10, 2023. The ratification of these agreements is a significant achievement and demonstrates Hudbay's focus on working closely with its employees and community stakeholders to ensure aligned economic and social benefits.
https://hudbayminerals.com/news-media/default.aspx#2024#Hudbay-Announces-Second-Quarter-2024-Results-Production-Guidance-Reaffirmed-and-Cash-Cost-Guidance-Improved
Lundin Mining Corporation (TSE: LUN)
Lundin Mining is a diversified Canadian base metals mining company with operations and projects in Argentina, Brazil, Chile, Portugal, Sweden and the United States of America, primarily producing copper, zinc, gold and nickel.
https://lundinmining.com/
Lundin Mining Second Quarter 2024 Results
July 30, 2024
VANCOUVER, BC, July 30, 2024 /CNW/ - (TSX: LUN) (Nasdaq Stockholm: LUMI) Lundin Mining Corporation ("Lundin Mining" or the "Company") today reported its second quarter 2024 financial results. Unless otherwise stated, results are presented in United States dollars on a 100% basis.
Jack Lundin, President and CEO commented, "During the quarter we generated record quarterly revenue of $1.1 billion which contributed to a strong financial performance for the Company. Adjusted EBITDA1 for the quarter was $461 million and free cash flow from operations1 was $338 million driven by stronger commodity prices and working capital inflows.
"At Candelaria, while mill throughput in the first half of the year was strong, we expect to achieve a significant step-up in production in the second half of the year with planned higher grades and higher mining rates from ore in Phase 11. This production step-up has started to materialize during the month of July from the open pit.
"Our team remains dedicated to enhancing operational performance, prioritizing safety and cost optimization. Cash costs1 for the quarter were at the lower end of our guidance range. We are well-positioned for a strong second half of the year and are on track to meet our consolidated production guidance for copper, gold, and zinc. Additionally, we have reduced our guidance for sustaining capital expenditures by $45 million."
Second Quarter Operational and Financial Highlights
Copper Production: Consolidated production of 79,708 tonnes of copper in the second quarter.
Other Production: During the quarter, a total of 47,460 tonnes of zinc, 1,721 tonnes of nickel and approximately 32,000 ounces of gold were produced.
Revenue: $1,083.6 million in the second quarter with a realized copper price1 of $4.79 /lb.
Net Earnings and Adjusted Earnings1: Net earnings attributable to shareholders of the Company were $121.6 million or $0.16 per share in the second quarter with adjusted earnings of $122.1 million or $0.16 per share.
Adjusted EBITDA1: $460.9 million generated during the quarter.
Cash Generation: Cash provided by operating activities was $491.8 million and free cash flow from operations1 was $337.5 million, which was increased by a working capital release of $121.9 million.
Growth: On July 2, 2024, the Company exercised its option to increase ownership in Caserones to 70%, which adds an additional 25,000 tonnes of attributable copper production to Lundin Mining's production profile2.
Sustainability Report: On July 10, 2024 the Company published its annual 2023 Sustainability Report that highlights the Company's material environmental, health & safety, governance and social performance during the year.
Outlook: Second quarter 2024 production and cash costs were aligned with expectations, the Company's full year guidance remains unchanged with the exception of nickel:
Caserones: Annual copper production guidance range for the Caserones mine for 2024 has been increased to 124,000 - 135,000 tonnes (previously 120,000 - 130,000 tonnes). Cash cost guidance for Caserones remains unchanged.
Eagle Mine: Annual nickel production guidance range for the Eagle mine for 2024 has been reduced to 7,000 - 9,000 tonnes (previously 10,000 - 13,000 tonnes) and the copper production guidance range has been reduced to 5,000 - 7,000 tonnes (previously 9,000 - 12,000 tonnes). Cash cost guidance per pound of nickel for the Eagle mine has increased to $3.20/lb - $3.40/lb (previously $2.80/lb - $3.00/lb)
Sustaining Capital Expenditures: Will be reduced by $45 million and are expected to total $795 million (previously $840 million) due to reductions in planned spending at Caserones, Neves-Corvo and Zinkgruvan.
Summary Financial Results
For the three months ended June 30, 2024, the Company generated revenue of $1,083.6 million, driven by 78,662 tonnes of copper sold at a realized price of $4.79 /lb. Revenue benefited from higher realized copper and zinc prices, including $94.5 million positive provisional pricing adjustments on prior period concentrate sales.
Gross profit of $279.5 million and Adjusted EBITDA of $460.9 million in the three months ended June 30, 2024 reflect higher realized copper and zinc prices despite the impacts of planned lower grades and maintenance activities on copper concentrate sales from Candelaria and Caserones, respectively.
Net earnings attributable to shareholders of the Company were $121.6 million or $0.16 per share in the three months ended June 30, 2024, and included higher tax expense due to higher taxable earnings and the utilization of prior period tax losses.
Adjusted earnings attributable to shareholders of the Company for the three months ended June 30, 2024 were $122.1 million or $0.16 per share after removing a loss on foreign exchange due to the translation of deferred tax balances and expenses relating to the partial suspension of underground operations at Eagle, among other things.
Cash and cash equivalents as at June 30, 2024 were $452.8 million. Cash provided by operating activities amounted to $491.8 million and cash used to fund investing activities amounted to $252.2 million. The Company had a net debt excluding lease liabilities1 balance of $893.8 million as at June 30, 2024 (December 31, 2023 - $946.2 million).
Free cash flow1 for the three months ended June 30, 2024 of $236.8 million reflected higher copper and zinc realized prices, positive working capital changes and reduced capital expenditure at Candelaria.
During the three months ended June 30, 2024, the Company entered into zero cost collar contracts in the total amount of $222 million (equivalent to BRL 1.1 billion) with collar ranges of BRL 5.00 to BRL 6.11.
As at July 30, 2024, the Company had a cash balance of approximately $288.0 million and a net debt excluding lease liabilities balance of approximately $1,338.0 million.
Operational Performance
Total Production
Candelaria (80% owned): Candelaria produced 31,170 tonnes of copper and approximately 17,000 ounces of gold in concentrate on a 100% basis in the three months ended June 30, 2024. Production in the quarter was impacted by lower grades and recoveries, partially offset by higher throughput. During the three months ended June 30, 2024, mining rates were impacted by the interface of the open pit and historic underground mining stopes, requiring more stockpiled ore to be processed which reduced grades and recoveries. Access to higher grade ore is anticipated in the second half of 2024 as per the mine sequence. Three of four stopes have now been filled and blasted, with work on the fourth expected to begin in Q3, and not expected to impact production in the second half of 2024. Production costs were reduced by lower sales volumes and favourable foreign exchange as a result of the CLP weakening against the US dollar; however, cash cost of $2.18/lb was negatively impacted by lower sales volumes.
Caserones (51% owned): Caserones produced 29,775 tonnes of total copper and 714 tonnes of molybdenum on a 100% basis in the three months ended June 30, 2024. Copper and molybdenum concentrate production was impacted in the quarter by extended mill maintenance and weather events which reduced mining activities and limited tailings deposition. Recoveries were also temporarily reduced by changes in the mining sequence and flotation circuit disruptions. Production costs in the quarter were lower than planned primarily due to lower copper concentrate and molybdenum sales volume, as well as favourable foreign exchange. Cash cost also benefitted from favourable foreign exchange.
Chapada (100% owned): Chapada produced 9,106 tonnes of copper and approximately 15,000 ounces of gold in concentrate in the three months ended June 30, 2024 and was impacted by lower grades and recoveries combined with lower mill availability due to unplanned conveyor maintenance and vibration screen failure. Lower grades were a result of a shift to processing increased amounts of stockpiled ore and an optimized mine plan that significantly reduces waste movement. Production costs were reduced by lower sales volumes and favourable foreign exchange. Cash cost of $2.05/lb benefited from higher gold by-product credits combined with favourable foreign exchange and mining cost decreases due to operational improvements.
Eagle (100% owned): Eagle produced 1,721 tonnes of nickel and 1,563 tonnes of copper in the three months ended June 30, 2024. A fall of ground in the lower ramp restricted access to Eagle East, limiting production. Mining rates are expected to be reduced until late 2024 while ramp rehabilitation is completed, deferring the extraction of ore from Eagle East into future years. Production costs were reduced by lower sales volumes and royalty expense, partially offset by higher maintenance costs. Nickel cash cost1 of $3.23/lb was impacted by lower sales volumes, partially offset by higher by-product credits.
Neves-Corvo (100% owned): Neves-Corvo produced 7,347 tonnes of copper and 25,696 tonnes of zinc in the three months ended June 30, 2024, both of which were impacted by lower grades due to changes in mine sequencing as a result of Lombador south requiring additional development work. Production costs increased due to an increase in sales volumes and cash cost of $1.70/lb benefited from increased sales volumes and higher by-product credits.
Zinkgruvan (100% owned): Zinkgruvan produced 21,764 tonnes of zinc and 8,966 tonnes of lead in the three months ended June 30, 2024 reflecting higher throughput and grades. Copper production of 747 tonnes was impacted by reduced availability of copper ore. Production costs increased due to higher sales volumes and zinc cash cost of $0.39/lb reflected lower copper by-product credits.
Outlook
Production and cash cost guidance for 2024 has been updated from that disclosed in the Company's Management's Discussion and Analysis for the year ended December 31, 2023.
The Company remains on track to meet annual production and cash cost guidance for all metals with the exception of nickel, and has reduced sustaining capital expenditure guidance from $840 million to $795 million with reductions at Caserones, Neves-Corvo, and Zinkgruvan. Expenditure guidance related to the Josemaria Project of $225 million and exploration of $48 million each remain on target for 2024.
Metal production continues to be weighted to the second half of the year at Candelaria, Chapada and Neves-Corvo due to mine sequencing and resultant forecasted grade profiles. Grade is expected to increase significantly at Candelaria in the second half of 2024 once access is opened to higher-grade ore. As a result of production challenges at Neves-Corvo in the first half of 2024, copper production at that operation continues to track to the lower end of its annual production guidance range. In the first half of 2024, cash cost per pound at most operations benefited from increased realized prices on by-product sales.
Guidance at Caserones has been increased to reflect production from the first half of the year and expected throughput and grades for the remainder of the year. At the Eagle mine, a fall of ground in the lower ramp restricted access to Eagle East, limiting production. Mining rates are expected to be reduced until late 2024 while ramp rehabilitation is completed, deferring the extraction of ore from Eagle East into future years. As a result, the annual nickel and copper production guidance ranges for the Eagle mine for 2024 have been reduced.
https://lundinmining.com/news/lundin-mining-second-quarter-2024-results-123164/
Newmont Corporation (NYSE: NEM, TSE: NGT)
(Formerly Goldcorp Inc)
Newmont's Vision
Newmont is the world's leading gold company and a producer of copper, silver, zinc and lead. The Company's world-class portfolio of assets, prospects and talent is anchored in favorable mining jurisdictions in North America, South America, Australia and Africa. Newmont is the only gold producer listed in the S&P 500 Index and is widely recognized for its principled environmental, social and governance practices. The Company is an industry leader in value creation, supported by robust safety standards, superior execution and technical proficiency. Newmont was founded in 1921 and has been publicly traded since 1925.
Newmont History
Newmont rich legacy spans most of the 20th century and is intimately linked to many of the key industrial milestones of the 1900s.
Colonel William Boyce Thompson founded the Newmont Company in 1916 as a holding company for private acquisitions in oil and gas, mining and minerals enterprises. Thompson named the company "Newmont" because, as one biographer described it, "he grew up in Montana and made his money in New York."
Publicly traded on the New York Stock Exchange (NYSE) since 1940, Newmont has spent about century primarily in the natural resources industry, mining gold, copper, silver, lead, zinc, lithium, uranium, coal, nickel and aggregates, and even developing oil and gas. Today, Newmont is the world's leading gold company as measured by assets, prospects and people. Newmont has actively operating mines in nine countries across the globe.
As one of a relatively small number of companies that have been listed on the NYSE since 1940, Newmont continues to create value and opportunities for our shareholders, employees and host communities.
We invite you to read more about our diverse and storied past and the remarkable foundation upon which our company was built.
In The Beginning
When mine promoter and financier Colonel William Boyce Thompson decides to create a company in 1916 to handle his larger private acquisitions - spanning oil and gas, mining and even hats - he names it the Newmont Company based on the assets he created in New York and his love for his home state of Montana. Reincorporated as Newmont Corporation in 1921, the word Mining is added to its name in 1925 as it sells its first shares to the public. Recognized for its "imposing array of financial and technical talent," Newmont quickly becomes an industry leader, and its stock skyrockets from $40 to $236 in just four years.
With the acquisition of the Empire-Star Mines in California in 1929 and President Roosevelt's decision to increase the fixed gold price from $20 per ounce to $35, Newmont weathers the Great Depression. The Company also becomes a shareholder of Magma Copper in Arizona - one of the largest copper producers in the United States - and opens copper mines in southern Africa and acquires two historic lead and zinc mines in Colorado.
https://www.newmont.com/about-us/default.aspx
Newmont Reports Second Quarter 2024 Results
July 24, 2024
Newmont Corporation (NYSE: NEM, ASX: NEM, TSX: NGT, PNGX: NEM) (Newmont or the Company) today announced second quarter 2024 results and declared a second quarter dividend of $0.25 per share.
"Newmont delivered a solid second quarter, producing 2.1 million gold equivalent ounces and generating $594 million in free cash flow," said Tom Palmer, Newmont's President and Chief Executive Officer. "We continued to advance our divestiture program and, to date, have announced $527 million in proceeds this year. With this momentum, we completed $250 million in share repurchases and repaid $250 million in debt. As we head into the second half of the year, we remain confident in our ability to continue executing on shareholder returns, meet our full year guidance and deliver on our commitments."
Q2 2024 Results
Announced monetization of Batu Hijau contingent payments; expect to receive $153 million in cash proceeds in the third quarter, in addition to $44 million of cash associated with contingent payments
Expect to achieve at least $2 billion in gross divestiture proceeds from high-quality, non-core asset sales
Since our last earnings release, repurchased 5.7 million shares at an average price of $43.34 for a total cost of $250 million, of which $104 million was repurchased during the second quarter and $146 million was repurchased in July 2024
Reduced nominal debt by $250 million for a cash cost of $227 million
Delivered $539 million in total returns to shareholders through share repurchases and dividend payments in the second quarter2; declared a dividend of $0.25 per share of common stock for the second quarter of 20243
Produced 1.6 million attributable gold ounces and 477 thousand gold equivalent ounces (GEOs)4 from copper, silver, lead and zinc, including 38 thousand tonnes of copper; primarily driven by production of 1.3 million gold ounces from Newmont's Tier 1 Portfolio5
Generated $1.4 billion of cash from operating activities, net of working capital changes of $(263) million; reported $594 million in Free Cash Flow6
Reported Net Income of $857 million, Adjusted Net Income (ANI) of $0.72 per share and Adjusted EBITDA of $2.0 billion for the quarter6
Achieved $100 million in synergies during the second quarter, for a total of $205 million to date from the Newcrest acquisition; on track to realize $500 million in annual synergies by the end of 20257
On track to deliver 2024 guidance for production, costs and capital spend; anticipating a sequential increase in production in the second half of the year, weighted towards the fourth quarter8
Published Newmont's 2023 Climate Performance Update, summarizing the climate performance for Newmont's managed operating sites throughout 2023
Advancing Portfolio Optimization with Monetization of Batu Hijau Deferred Payment Rights
Newmont today announced it has entered into an agreement to sell 100 percent of the entity holding Newmont's deferred payment rights associated with the Batu Hijau copper and gold mine in Indonesia for total consideration of $153 million in cash, with closing to occur no later than September 30, 2024. Furthermore, an additional $10 million cash payment associated with these deferred payment rights was received in July. During the second quarter of 2024, Newmont also received a $34 million cash payment, bringing total proceeds to $197 million for 2024.
SECOND QUARTER 2024 PRODUCTION AND FINANCIAL SUMMARY
Attributable gold production1 decreased 4 percent to 1,607 thousand ounces from the prior quarter primarily due to lower production at Cerro Negro as a result of the suspension of operations during the quarter following the tragic fatalities of two members of the Newmont workforce on April 9, 2024. Operations at Cerro Negro safely resumed on May 24, 2024. In addition, operations were suspended as of April 14, 2024 at Telfer, one of Newmont's non-core assets, as further work is completed to remediate the safe operation of the tailings storage facility. Second quarter production was also impacted by lower production at Lihir due to heavy rainfall impacting mine sequencing, as well as lower production at Akyem due to lower grades as a result of the ongoing stripping campaign. These impacts were partially offset by higher production at Porcupine, Brucejack and Peñasquito.
Full year production for 2024 is expected to be second-half weighted as previously indicated, with a sequential increase weighted towards the fourth quarter. The second-half weighting is expected to be driven primarily by improved grades at Peñasquito, Ahafo and Tanami, improved throughput from Lihir and Boddington and sequential improvements delivered from our non-managed joint venture operations.
Average realized gold price was $2,347, an increase of $257 per ounce over the prior quarter. Average realized gold price includes $2,344 per ounce of gross price received, a favorable impact of $17 per ounce mark-to-market on provisionally-priced sales and reductions of $14 per ounce for treatment and refining charges.
Gold CAS2 totaled $1.8 billion for the quarter. Gold CAS per ounce3 increased 9 percent to $1,152 per ounce compared to the prior quarter primarily due to lower sales volumes, processing of stockpiles at Porcupine and Tanami and higher third party royalties as a result of higher gold prices.
Gold AISC per ounce3 increased 9 percent to $1,562 per ounce compared to the prior quarter primarily due to higher CAS and higher sustaining capital spend.
Attributable gold equivalent ounce (GEO) production from other metals was largely in line with the prior quarter at 477 thousand ounces.
CAS from other metals2 totaled $379 million for the quarter. CAS per GEO3 was largely in line with the prior quarter at $836 per ounce.
AISC per GEO3 increased 5 percent to $1,207 per ounce compared to the prior quarter primarily due to higher sustaining capital spend.
Net income from continuing operations attributable to Newmont stockholders was $838 million or $0.73 per diluted share, an increase of $672 million from the prior quarter primarily due to the loss on assets held for sale of $485 million recognized during the first quarter of 2024, as well as higher average realized prices for all metals in the second quarter of 2024.
Adjusted net income4 was $834 million or $0.72 per diluted share, compared to $630 million or $0.55 per diluted share in the prior quarter. Primary adjustments to second quarter net income include a loss on assets held for sale of $246 million, a gain on asset and investment sales of $55 million primarily related to the previously announced sale of the Lundin Stream Credit Facility Agreement and the purchase and sale of foreign currency bonds8, a gain of $14 million on the partial redemption of certain Senior notes, and Newcrest transaction and integration costs of $16 million.
Adjusted EBITDA4 increased 16 percent to $2.0 billion for the quarter, compared to $1.7 billion for the prior quarter.
Consolidated cash from operations before working capital5 increased 15 percent from the prior quarter to $1.7 billion primarily due to higher realized prices for all metals in the second quarter.
Consolidated net cash from operating activities increased 80 percent from the prior quarter to $1.4 billion primarily due to the improvement in cash from operations. Net cash from operating activities in the second quarter was impacted by a $263 million reduction in operating cash flow due to changes in working capital, including a build in inventories, stockpiles and ore on leach pads of $185 million and reclamation spend of $107 million, primarily related to the construction of the Yanacocha water treatment facilities.
Free Cash Flow7 was $594 million compared to $(74) million in the prior quarter primarily due to improvements in consolidated net cash from operating activities, partially offset by higher capital expenditures before capital accruals.
Capital expenditures (net of capital accruals)6 decreased 6 percent from the prior quarter to $800 million primarily due to an increase of capital accruals offsetting higher sustaining and development capital expenditures. Sustaining capital spend increased from the first quarter due to the ramp-up of spend on the tailings project at Cadia and the purchase of updated fleet equipment at Merian. Development capital expenditures in 2024 primarily relate to Tanami Expansion 2, Ahafo North, Cadia Block Caves and Cerro Negro expansion projects.
Balance sheet and liquidity remained strong in the second quarter, ending the quarter with $2.6 billion of consolidated cash, cash of $205 million included inAssets held for sale and time deposits of $28 million, with approximately $6.8 billion of total liquidity; reported net debt to pro forma adjusted EBITDA of 1.0x9.
NON-MANAGED JOINT VENTURE AND EQUITY METHOD INVESTMENTS10
Nevada Gold Mines (NGM) attributable gold production decreased 4 percent to 253 thousand ounces, with a 4 percent increase in CAS to $1,220 per ounce3 and a 7 percent increase in AISC to $1,689 per ounce3 compared to the prior quarter.
Pueblo Viejo (PV) attributable gold production decreased 2 percent to 53 thousand ounces compared to the prior quarter. Cash distributions received for the Company's equity method investment in Pueblo Viejo totaled $12 million in the second quarter. Capital contributions of $5 million were made during the quarter related to the expansion project at Pueblo Viejo.
Fruta del Norte attributable gold production is reported on a quarter lag. Production reported in the second quarter of 2024 increased 67 percent to 35 thousand ounces compared to the prior quarter. Cash distributions received from the Company's equity method investment in Fruta del Norte were $8 million for the second quarter.
Committed to Concurrent Reclamation
Since mines operate for a finite period, careful closure planning is crucial to address the diverse social, economic, environmental and regulatory impacts associated with the end of mining operations. Newmont's global Closure Strategy integrates closure planning throughout each operation's lifespan, aiming to create enduring positive and sustainable legacies that last long after mining ceases. Newmont continues to accrue to reclamation and remediation spend through the year. Newmont expects to incur a cash outflow of approximately $600 million in 2024 and $700 million in 2025, primarily related to the construction of two new water treatment plants and post-closure management at Yanacocha. The operation's ongoing closure planning study advanced to the feasibility state in December 2023 and continues to address several complex closure issues, including water management, social impacts and tailings. A long-term water management solution will replace five existing water treatment facilities with two, addressing the watersheds along the continental divide. Certain estimated costs remain subject to revision as ongoing study work and assessment of opportunities that incorporates the latest design considerations remain in progress.
Newmont's 2024 Outlook
For a more detailed discussion, see the Company's 2024 Outlook released on February 22, 2024, available on Newmont.com. Please see the cautionary statement and footnotes for additional information.
Guidance Metric
2024E
Attributable Gold Production (Koz)
Managed Tier 1 Portfolio
4,100
Non-Managed Tier 1 Portfolio
1,530
Total Tier 1 Portfolio
5,630
Non-Core Assets
1,300
Total Newmont Attributable Gold Production (Koz)
6,930
Attributable Gold CAS ($/oz) ($1,900/oz price assumption)
Managed Tier 1 Portfolio
980
Non-Managed Tier 1 Portfolio
1,130
Total Tier 1 Portfolio
1,000
Non-Core Assets
1,400
Total Newmont Gold CAS ($/oz) a
1,050
Attributable Gold AISC ($/oz) ($1,900/oz price assumption)
Managed Tier 1 Portfolio
1,250
Non-Managed Tier 1 Portfolio
1,440
Total Tier 1 Portfolio
1,300
Non-Core Assets
1,750
Total Newmont Gold AISC ($/oz) a
1,400
Copper ($8,818/tonne price assumption) a
Copper Production - Tier 1 Portfolio (ktonne)
144
Copper Production - Non-Core Assets (ktonne)
8
Total Newmont Copper Production (ktonne)
152
Copper CAS - Tier 1 Portfolio ($/tonne)
$5,050
Copper CAS - Non-Core Assets ($/tonne)
$11,050
Total Newmont Copper CAS ($/tonne) b
$5,080
Copper AISC - Tier 1 Portfolio ($/tonne)
$7,350
Copper AISC - Non-Core Assets ($/tonne)
$12,540
Total Newmont Copper AISC ($/tonne) b
$7,380
Silver ($23.00/oz price assumption)
Silver Production (Moz)
34
Silver CAS ($/oz) b
$11.00
Silver AISC ($/oz) b
$15.40
Lead ($2,205/tonne price assumption) a
Lead Production (ktonne)
95
Lead CAS ($/tonne) b
$1,220
Lead AISC ($/tonne) b
$1,570
Zinc ($2,976/tonne price assumption) a
Zinc Production (ktonne)
245
Zinc CAS ($/tonne) b
$1,550
Zinc AISC ($/tonne) b
$2,300
Attributable Capital
Sustaining Capital ($M) a
$1,800
Development Capital ($M) a
$1,300
Consolidated Expenses
Exploration & Advanced Projects ($M)
$450
General & Administrative ($M)
$300
Interest Expense ($M)
$365
Depreciation & Amortization ($M)
$2,850
Adjusted Tax Rate c,d
34%
For the full release, see:
https://www.newmont.com/investors/news-release/news-details/2024/Newmont-Reports-Second-Quarter-2024-Results/default.aspx
Nutrien Ltd (NYSE: NTR, TSE: NTR)
ABOUT NUTRIEN
We produce and distribute over 27 million tonnes of potash, nitrogen and phosphate products for agricultural, industrial and feed customers world-wide. Combined with our leading agriculture retail network that services over 500,000 grower accounts, we are well positioned to meet the needs of a growing world and create value for our stakeholders.
Retail Products and Services
Our network of over 2,000 retail locations in seven countries provide a wide range of products and services to help growers around the world feed the future. We provide our customers with complete agriculture solutions including nutrients, crop protection products, seed, service and digital tools.
Our Retail Business
Our Nutrien Ag Solutions© and Landmark© Retail businesses provide complete agricultural solutions, including nutrients, crop protection products, seed, services and agronomic advice to growers.
https://www.nutrien.com/what-we-do/our-business/retail
Nutrien Reports Second Quarter 2024 Results and Announces Chief Financial Officer Transition
7 August 2024
Second quarter results supported by increased crop input margins, strong global potash demand, higher fertilizer operating rates and lower operating costs.
Mark Thompson appointed Executive Vice President and Chief Financial Officer effective August 26, 2024.
All amounts are in US dollars, except as otherwise noted
Nutrien Ltd. (TSX and NYSE: NTR) announced today its second quarter 2024 results, with net earnings of $392 million ($0.78 diluted net earnings per share). Second quarter 2024 adjusted EBITDA 1 was $2.2 billion and adjusted net earnings per share 1 was $2.34.
"Nutrien benefited from improved Retail margins, higher fertilizer sales volumes and lower operating costs in the first-half of 2024. Crop input demand remains strong, and we raised our full-year outlook for global potash demand due to healthy engagement in all key markets," commented Ken Seitz, Nutrien's President and CEO.
"Our upstream production assets and downstream Retail businesses in North America and Australia have performed well in 2024. In Brazil, we continue to see challenges and are accelerating a margin improvement plan that is focused on further reducing operating costs and rationalizing our footprint to optimize cash flow," added Mr. Seitz.
Highlights 2 :
Generated net earnings of $557 million and adjusted EBITDA of $3.3 billion in the first half of 2024. Adjusted EBITDA was down from the same period in 2023 primarily due to lower fertilizer net selling prices. This was partially offset by increased Nutrien Ag Solutions ("Retail") earnings, higher Potash sales volumes, and lower natural gas costs.
Retail adjusted EBITDA increased to $1.2 billion in the first half of 2024 supported by strong grower demand and a normalization of product margins in North America. Full-year 2024 Retail adjusted EBITDA guidance lowered due primarily to ongoing market instability in Brazil as well as the impact of delayed planting in North America in the second quarter.
Potash adjusted EBITDA declined to $1.0 billion in the first half of 2024 due to lower net selling prices, which more than offset higher sales volumes and lower operating costs. Full-year 2024 Potash sales volume guidance raised due to record first half sales volumes and the expectation for strong global demand in the second half of 2024.
Nitrogen adjusted EBITDA decreased to $1.1 billion in the first half of 2024 due to lower net selling prices, which more than offset lower natural gas costs. Ammonia production increased in the first half, driven by improved reliability and less turnaround activity.
Accelerating a margin improvement plan in Brazil, including the curtailment of 3 fertilizer blenders and closure of 21 selling locations in the second quarter of 2024. Recognized a $335 million non-cash impairment of our Retail - Brazil assets due to ongoing market instability and more moderate margin expectations. Incurred a loss on foreign currency derivatives of approximately $220 million in Brazil. 3
Previously announced that we are no longer pursuing our Geismar Clean Ammonia project and recognized a $195 million non-cash impairment of assets related to this project.
1. This is a non-GAAP financial measure. See the "Non-GAAP Financial Measures" section.
2. Our discussion of highlights set out on this page is a comparison of the results for the three and six months ended June 30, 2024 to the results for the three and six months ended June 30, 2023, unless otherwise noted.
3. For further information see the Corporate and Others and Eliminations, and Controls and Procedures sections of the Management's Discussion and Analysis, and Note 6 to the unaudited Interim Condensed Consolidated Financial Statements as at and for the three and six months ended June 30, 2024.
Chief Financial Officer Transition:
Nutrien also announces the appointment of Mark Thompson as Executive Vice President and Chief Financial Officer, effective August 26, 2024. In alignment with Nutrien's succession plan, Mr. Thompson succeeds Pedro Farah, who will remain with Nutrien in an advisory capacity until his departure on December 31, 2024.
"Mark's impressive track record of execution, along with his proven financial and strategic acumen provides the unique ability to succeed in this position on day one. He brings in-depth knowledge of our business that will support the advancement of our strategic actions to enhance quality of earnings and cash flow," said Mr. Seitz. "On behalf of the Nutrien team, I would also like to thank Pedro for his service and commitment to Nutrien over the last five years."
"I've had the privilege to serve in leadership roles across the company and firmly believe in the opportunities afforded by Nutrien's strong competitive advantages and world-class asset base to deliver long-term shareholder value," said Mr. Thompson. "I look forward to continuing to partner with Ken and our executive leadership team on the disciplined execution of our strategy and drive a focused approach to capital allocation.
Mr. Thompson has been with the Company since 2011, currently serving as Executive Vice President and Chief Commercial Officer. Prior to his current position he held numerous executive and senior leadership roles across the company, including Chief Strategy & Sustainability Officer, Chief Corporate Development & Strategy Officer, and Vice President of Business Development for Nutrien's Retail business. He earned his Bachelor of Commerce (Finance) and Bachelor of Arts degrees from the University of Saskatchewan and holds the Chartered Financial Analyst (CFA) designation.
Management's Discussion and Analysis
The following management's discussion and analysis ("MD&A") is the responsibility of management and is dated as of August 7, 2024. The Board of Directors ("Board") of Nutrien carries out its responsibility for review of this disclosure principally through its Audit Committee, composed entirely of independent directors. The Audit Committee reviews and, prior to its publication, approves this disclosure pursuant to the authority delegated to it by the Board. The term "Nutrien" refers to Nutrien Ltd. and the terms "we", "us", "our", "Nutrien" and "the Company" refer to Nutrien and, as applicable, Nutrien and its direct and indirect subsidiaries on a consolidated basis. Additional information relating to Nutrien (which, except as otherwise noted, is not incorporated by reference herein), including our annual report dated February 22, 2024 ("2023 Annual Report"), which includes our annual audited consolidated financial statements ("annual financial statements") and MD&A, and our annual information form dated February 22, 2024, each for the year ended December 31, 2023, can be found on SEDAR+ at www.sedarplus.ca and on EDGAR at www.sec.gov . No update is provided to the disclosure in our 2023 annual MD&A except for material information since the date of our annual MD&A. The Company is a foreign private issuer under the rules and regulations of the US Securities and Exchange Commission (the "SEC").
This MD&A is based on and should be read in conjunction with the Company's unaudited interim condensed consolidated financial statements as at and for the three and six months ended June 30, 2024 ("interim financial statements") based on International Financial Reporting Standards ("IFRS") as issued by the International Accounting Standards Board and prepared in accordance with International Accounting Standard ("IAS") 34 "Interim Financial Reporting", unless otherwise noted. This MD&A contains certain non-GAAP financial measures and ratios and forward-looking statements, which are described in the "Non-GAAP Financial Measures" and the "Forward-Looking Statements" sections, respectively.
Market Outlook and Guidance
Agriculture and Retail Markets
Favorable growing conditions have created an expectation for record US corn and soybean yields and pressured crop prices. Despite lower crop prices, demand for crop inputs in North America is expected to remain strong in the third quarter of 2024 as growers aim to maintain optimal plant health and yield potential. We anticipate that good affordability for potash and nitrogen will support fall application rates in 2024.
Brazilian crop prices and prospective grower margins have improved from levels earlier this year supported by a weaker currency. Brazilian soybean area is expected to increase by one to three percent in the upcoming planting season and fertilizer demand is projected to be approximately 46 million tonnes in 2024, in line with historical record levels.
Australian moisture conditions vary regionally but remain supportive of crop input demand as trend yields are expected.
Crop Nutrient Markets
Global potash demand in the first half of 2024 was supported by favorable consumption trends in most markets and low channel inventories in North America and Southeast Asia. The settlement of contracts with China and India in July is expected to support demand in standard grade markets in the second half of 2024, while uptake on our summer fill program in North America has been strong. As a result, we have raised our 2024 full-year global potash shipment forecast to 69 to 72 million tonnes and expect a relatively balanced market in the second half of 2024.
Global nitrogen markets are being supported by steady demand and continued supply challenges in key producing regions. Chinese urea export restrictions have been extended into the second half of 2024 and natural gas-related supply reductions could continue to impact nitrogen operating rates in Egypt and Trinidad. US nitrogen inventories were estimated to be below average levels entering the second half of 2024, contributing to strong engagement on our summer fill programs.
Phosphate fertilizer prices are being supported by tight global supply due to Chinese export restrictions, low channel inventories in North America and seasonal demand in Brazil and India. We anticipate some impact on demand for phosphate fertilizer in the second half of 2024 as affordability levels have declined compared to potash and nitrogen.
Financial and Operational Guidance
Retail adjusted EBITDA guidance was lowered to $1.5 to $1.7 billion due primarily to ongoing market instability in Brazil as well as the impact of delayed planting in North America in the second quarter.
Potash sales volume guidance was increased to 13.2 to 13.8 million tonnes due to expectations for higher global demand in 2024. The range reflects the potential for a relatively short duration Canadian rail strike in the second half.
Nitrogen sales volume guidance was narrowed to 10.7 to 11.1 million tonnes as we continue to expect higher operating rates at our North American and Trinidad plants and growth in sales of upgraded products such as urea and nitrogen solutions.
Phosphate sales volume guidance was lowered to 2.5 to 2.6 million tonnes reflecting extended turnaround activity and delayed mine equipment moves.
Finance costs guidance was lowered to $0.7 to $0.8 million due to a lower expected average short-term debt balance.
All guidance numbers, including those noted above are outlined in the table below. Refer to page 65 of Nutrien's 2023 Annual Report for related assumptions and sensitivities.
For the full release, see:
https://www.nutrien.com/investors/news-releases/2024-nutrien-reports-second-quarter-2024-results-and-announces-chief
Sherritt International Corporation (TSE: S)
About Us
Sherritt is a world leader in the mining and refining of nickel and cobalt -- metals essential for the growing adoption of electric vehicles. Its Technologies Group creates innovative, proprietary solutions for oil and mining companies around the world to improve environmental performance and increase economic value. Sherritt is also the largest independent energy producer in Cuba.
https://www.sherritt.com/English/Company-Profile/default.aspx
Nickel
Sherritt is one of the world's largest producers of nickel from lateritic sources with mining operations in Moa, Cuba and refining operations in Fort Saskatchewan, Canada.
Nickel Is Used in Thousands of Everyday Products
Nickel is a strong, lustrous, silver-coloured metal. Its principal values lie in its resistance to corrosion and oxidation and its strength at high temperatures. Used primarily in the production of alloys including stainless steel, nickel is used to make everything from highly specialized materials (such as airplane engines and medical equipment) to buildings, electronics and batteries. Today, it is a staple in our daily lives and can be found in over 300,000 products.
https://www.sherritt.com/English/operations/metals/default.aspx
Our Purpose and Our Promises
At Sherritt, we believe success is best achieved when every employee understands the direct impact their function has in achieving our collective purpose and objectives as a company. Our Purpose and Our Promises articulates these shared values as a company and will help guide our actions.
Our Purpose is to be a low-cost nickel producer that creates sustainable prosperity for our employees, investors and communities.
We have implemented specific initiatives across our divisions to advance this Purpose and will continue to make it our core focus.
Our Purpose means different things for different stakeholders. For our employees, it means we will strive to offer a safe and rewarding workplace. For our investors and our partners, it means we will seek to deliver long-term superior results. And in the communities where we work, it means we will work to create lasting economic benefits while respecting and embracing the local culture and honouring our commitments.
Our Promises Spell Out How We Will Work as a Company
Integrity and inclusion - operating ethically, openly and with discipline while being inclusive and respectful of all employees and stakeholders.
Agility - acting decisively on opportunities to build an even stronger company.
Safety and sustainability - keeping our people and the communities we serve healthy and safe while actively protecting the environments we impact.
Learning and innovation - achieving our best by leveraging the past and proactively shaping our future.
Shared prosperity - sharing economic and social benefits with all of our stakeholders.
https://www.sherritt.com/English/Company-Profile/Our-Purpose-and-Our-Promises/default.aspx
Sherritt Reports Second Quarter 2024 Results; Metals and Power Deliver Strong Performance; Net Direct Cash Cost Significantly Improved
July 29, 2024
NOT FOR DISTRIBUTION TO UNITED STATES NEWSWIRE SERVICES OR FOR DISSEMINATION IN THE UNITED STATES
TORONTO--(BUSINESS WIRE)-- Sherritt International Corporation ("Sherritt", the "Corporation") (TSX: S), a world leader in using hydrometallurgical processes to mine and refine nickel and cobalt - metals deemed critical for the energy transition - today reported its financial results for the three and six months ended June 30, 2024. All amounts are in Canadian dollars unless otherwise noted.
Leon Binedell, President and CEO of Sherritt commented, "We are encouraged by the strong operational turnaround and improved performance delivered by both our Metals and Power businesses in line with our plans developed last year in response to the market decline and operational challenges experienced. At Metals, nickel, cobalt and fertilizer production benefitted from improved operating reliability and increased mixed sulphides availability as we begin to see the positive impacts of the slurry preparation plant commissioned earlier this year. Notably, our net direct cash cost of US$5.75 per pound was a significant improvement and with our continued focus on operating stability, margin improvement and cash generation, we see the potential to realize further cost improvements ahead. At Power, we continue to achieve increased production and improved utilization. We are pleased to announce an additional well is scheduled to be drilled this year which will increase our output further. The additional supply of gas in Power has resulted in a materially higher dividend of $5.1 million received in Canada this quarter and we expect to continue receiving higher dividends going forward."
Mr. Binedell continued, "With nickel and cobalt both facing headwinds and prices considered at or near the bottom, our lower operating costs and the advancements in operational improvements we have made, place us in a strong position to weather these near-term market uncertainties unlike many non-Chinese linked suppliers which have already announced their exit from the market. Once these near-term market uncertainties abate, we will ultimately capitalize on the future growth opportunities ahead with strong demand expected over the medium-term for the responsibly sourced critical minerals we produce."
SECOND QUARTER 2024 SELECTED DEVELOPMENTS
Sherritt's share (1) of finished nickel and cobalt production at the Moa Joint Venture ("Moa JV") was 3,383 tonnes and 342 tonnes, respectively.
Sherritt's share of finished nickel and cobalt sales was 3,791 tonnes and 390 tonnes, respectively. Nickel sales volumes exceeded production volumes on continued strong spot sales which are expected to continue in the second half of the year, driving progress on reducing nickel inventory.
Net direct cash cost ("NDCC") (2) was US$5.75/lb benefitting from lower mining, processing and refining costs per pound of nickel sold ("MPR/lb"), the largest component of NDCC (2) , which improved 15% compared to Q2 2023. Compared to Q1 2024, NDCC (2) continued to improve as expected decreasing by 21%.
Received $5.1 million of dividends in Canada from Energas during the quarter. Based on current 2024 guidance estimates for production volumes, unit operating costs (2) and spending on capital (2) disclosed in the Outlook section of the MD&A, Sherritt expects total dividends in Canada from Energas to exceed $10.0 million in 2024 (3) .
Electricity production was 205 GWh benefitting from increased gas supply from the two wells that went into production at the end of Q2 2023.
Electricity unit operating cost (2) was $42.74/MWh reflecting timing of higher scheduled maintenance, partly offset by higher sales volume.
2024 guidance for production volumes, unit operating costs/NDCC (1) and spending on capital (1) remain unchanged.
Net loss from continuing operations was $11.5 million, or $(0.03) per share primarily due to lower average-realized prices (2) for nickel, cobalt and fertilizers, partly offset by higher nickel sales volumes.
Adjusted net loss from continuing operations (2) was $10.0 million or $(0.03) per share, which primarily excludes a non-cash $5.3 million revaluation loss on the net receivable pursuant to the Cobalt Swap (4) on updates to valuation assumptions and a $3.4 million unrealized gain on nickel put options.
Adjusted EBITDA (2) was $13.0 million.
Available liquidity in Canada as at June 30, 2024 was $55.9 million supported by $27.0 million received from the Moa JV as full repayment of short-term working capital advances primarily offset by $7.8 million used for operating activities at Power to support scheduled maintenance activities, a $9.4 million interest payment on Second Lien Notes and a $10.8 million payment on rehabilitation and closure costs related to legacy Oil and Gas assets in Spain.
Sherritt's syndicated revolving-term credit facility was amended to extend its maturity by one year from April 30, 2025 to April 30, 2026 and change the EBITDA-to-Interest Expense covenant as defined in the agreement. There were no other significant changes to the terms, financial covenants or restrictions.
Purchased put options on 3,876 tonnes of nickel, or 646 tonnes per month, at an exercise price of US$8.16/lb at a cost of $2.2 million for a six-month period starting from June 1, 2024. Any settlements will be paid in cash monthly based on the average monthly nickel price on the London Metal Exchange ("LME"). The economic hedging strategy provides Sherritt with full exposure to upward changes in nickel prices, while protecting against downward changes in nickel prices by providing a minimum price of US$8.16/lb on approximately 25% of expected nickel production from the Moa JV during the six-month period. In July, Sherritt received $0.4 million upon settlement of the June 2024 in-the-money put option.
Opportunistically repurchased $1.5 million of 10.75% unsecured PIK option notes ("PIK Notes") at a 50% discount.
Released the Corporation's 2023 Sustainability Report marking the 16th year of sustainability reporting and outlining significant progress made during the year toward its ESG goals and highlighting achievements made during the year including maintaining conformity with the LME's Track B Responsible Sourcing Requirements.
Completed a 10% workforce reduction at its Corporate office in Q2 2024 in addition to the Canada-wide restructuring completed in Q1 2024. Annual cost savings from these cumulative employee and other cost reductions are expected to be $15.0 million per year.
Phase two of the Moa JV expansion continues with commissioning and ramp up expected in the first half of 2025.
Advanced the mixed hydroxide precipitate processing project ("MHP Project") with the commencement of an engineering study and continued batch test work and process flowsheet development, which yielded very positive results for metal recoveries and impurity removals.
DEVELOPMENTS SUBSEQUENT TO THE QUARTER
Subsequent to the quarter end:
The Moa JV received approval for US$12 million of foreign currency financing from a Cuban bank to support international payments related to construction of the Sixth Leach Train, the primary component of phase two of the expansion project.
Elected not to pay cash interest due July 2024 of $3.5 million and added the payment-in-kind interest to the principal amount owed to noteholders on its 10.75% unsecured PIK notes.
Cash and cash equivalents as at June 30, 2024 were $132.3 million, decreasing from $144.4 million as at March 31, 2024.
As at June 30, 2024, total available liquidity in Canada, which is composed of cash and cash equivalents in Canada of $25.5 million and available credit facilities of $30.4 million was $55.9 million decreasing from $67.9 million as at March 31, 2024 as expected. Available liquidity in Canada during the quarter was supported by $27.0 million received from the Moa JV as full repayment of short-term working capital advances, and $5.1 million of dividends from Energas received in Canada. These receipts were primarily offset by $7.8 million used for operating activities at Power primarily to support scheduled maintenance activities, a $9.4 million interest payment on Second Lien Notes and a $10.8 million payment on rehabilitation and closure costs related to legacy Oil and Gas assets in Spain. The receipt of the Moa JV advance repayment is reflected in cash provided by investing activities.
Moa JV's cash and cobalt distributions to the Corporation are determined based on available cash in excess of liquidity requirements. Determinants of liquidity include anticipated nickel and cobalt prices, planned spending on capital at the Moa JV including growth capital, working capital needs, expected financing and other expected liquidity requirements. Available cash is also impacted by changes in working capital primarily related to changes in inventory, and timing of receipts and payments, including receipts on nickel and cobalt sales subsequent to shipment. Based on the midpoint of the Moa JV's 2024 guidance ranges for production volumes, unit operating costs (1) and spending on capital (1) disclosed in the Outlook section of the MD&A, and the first half 2024 nickel and cobalt average reference prices of US$8.00/lb and US$13.50/lb, respectively, Sherritt expects to receive approximately $50.0 million in Cobalt Swap distributions (including both Sherritt's share and GNC's redirected share). As defined by the agreement, any short fall in the annual minimum payment amount will be added to the following year. With the full repayment of the short-term working capital advances to the Moa JV received in the second quarter of 2024, Sherritt expects the joint venture will commence dividends pursuant to the Cobalt Swap during the fourth quarter of 2024. Refer to the risks related to Sherritt's corporate structure in the Corporation's 2023 Annual Information Form for further information on risks related to distributions from the Moa JV.
In Power, based on 2024 guidance estimates for production volumes, unit operating costs (1) and spending on capital (1) disclosed in the Outlook section of the MD&A, Sherritt expects total dividends in Canada from Energas to exceed $10.0 million in 2024. Refer to the risks related to Sherritt's corporate structure in the Corporation's 2023 Annual Information Form for further information on risks related to dividends in Canada from Energas.
During the quarter, Sherritt purchased put options on 3,876 tonnes of nickel, or 646 tonnes per month, at an exercise price of US$8.16/lb at a cost of $2.2 million for a six-month period starting from June 1, 2024. Any settlements will be paid in cash monthly based on the average monthly nickel price on the LME. The economic hedging strategy provides Sherritt with full exposure to upward changes in nickel prices, while protecting against downward changes in nickel prices by providing a minimum price of US$8.16/lb on approximately 25% of expected nickel production from the Moa JV during the six-month period. In July, Sherritt received $0.4 million upon settlement of the June 2024 in-the-money put option.
Sherritt's syndicated revolving-term credit facility was amended to extend its maturity by one year from April 30, 2025 to April 30, 2026 and change the EBITDA-to-Interest Expense covenant as defined in the agreement. The amendment included terms to transition the interest rate of bankers' acceptance plus 4.00% to CORRA plus 4.00%. There were no other significant changes to the terms, financial covenants or restrictions.
At the Second Lien Note interest payment date in April 2024, the Corporation was not required to make a mandatory redemption of Second Lien Notes as it did not have Excess Cash Flow as defined in the Second Lien Notes indenture agreement for the two-quarter period ended December 31, 2023. Additionally, for the two-quarter period ended June 30, 2024, the Corporation did not have Excess Cash Flow as defined in the Second Lien Notes indenture agreement and, therefore, will not be required to make a mandatory redemption with its October 2024 interest payment.
As at June 30, 2024, the Corporation was in compliance with all its debt covenants.
Subsequent to the quarter end:
The Moa JV received approval for US$12 million of foreign currency financing from a Cuban bank to support international payments related to construction of the Sixth Leach Train, the primary component of phase two of the expansion project.
Elected not to pay cash interest due July 2024 of $3.5 million and added the payment-in-kind interest to the principal amount owed to noteholders on its PIK notes.
Revenue
Metals revenue in Q2 2024 was $150.6 million compared to $185.6 million in Q2 2023. Revenue in the current year period was lower primarily due to lower average-realized prices (1) for nickel, cobalt and fertilizer and the timing of receipts and sales of cobalt by Sherritt under the Cobalt Swap agreement, partly offset by higher nickel sales volumes. In Q2 2024 the average-realized prices (1) for nickel, cobalt and fertilizers were $11.25/lb, $14.32/lb and $574.70/tonne, 17%, 12% and 19% lower, respectively, compared to the same period in the prior year.
Nickel revenue in Q2 2024 was $94.0 million compared to $95.5 million in Q2 2023. Finished nickel sales volumes in Q2 2024 were 19% higher than Q2 2023 and exceeded production volumes as Metals continued reducing its inventory with strong spot sales which are expected to continue in the second half of the year, driving progress on reducing nickel inventory.
Cobalt revenue in Q2 2024 was $12.3 million compared to $38.4 million in Q2 2023. Lower revenue was primarily due to the timing of receipts and sales of cobalt under the Cobalt Swap and lower average-realized prices (1) . For more information regarding the timing of Cobalt Swap distributions in 2024, refer to the Cobalt Swap sales section below.
Fertilizer revenue in Q2 2024 was $34.8 million compared to $45.0 million in Q2 2023. In addition to lower average-realized prices (1) , sales volumes for Q2 2024 were 4% lower compared to Q2 2023.
Cobalt Swap sales
For 2024, Cobalt Swap distributions are anticipated to start in the fourth quarter of the year whereas in 2023, Sherritt had received 100% of the annual maximum amount of cobalt (2,082 tonnes) and had sold approximately 85% of that cobalt by the end the first half of the year.
While the timing of receipts and sales of cobalt under the Cobalt Swap results in variances in cobalt sales volumes, revenue and cost of sales for Sherritt, they do not have a material impact on earnings from operations, average-realized prices (1) , cobalt by-product credits, or NDCC (1) as the variance in revenue and costs of Sherritt's share of cobalt under the Cobalt Swap is offset by Sherritt's share of revenue and costs of the Moa JV and the cost of cobalt sold on volumes of cobalt redirected from GNC (2) is determined based on the in-kind value of cobalt calculated as the cobalt reference price from the month preceding distribution less a mutually agreed selling cost adjustment.
Moa JV's cash and cobalt distributions to the Corporation are determined based on available cash in excess of liquidity requirements. Determinants of liquidity include anticipated nickel and cobalt prices, planned spending on capital at the Moa JV including growth capital, working capital needs, expected financing and other expected liquidity requirements. Available cash is also impacted by changes in working capital primarily related to changes in inventory, and timing of receipts and payments, including receipts on nickel and cobalt sales subsequent to shipment. Based on the midpoint of the Moa JV's 2024 guidance ranges for production volumes, unit operating costs (1) and spending on capital (1) disclosed in the Outlook section of the MD&A, and the first half 2024 nickel and cobalt average reference prices of US$8.00/lb and US$13.50/lb, respectively, Sherritt expects to receive approximately $50 million in Cobalt Swap distributions (including both Sherritt's share and GNC's redirected share). As defined by the agreement, any short fall in the annual minimum payment amount will be added to the following year. With the full repayment of the short-term working capital advances to the Moa JV received in the second quarter of 2024, Sherritt expects the joint venture will commence dividends pursuant to the Cobalt Swap during the fourth quarter of 2024. Refer to the risks related to Sherritt's corporate structure in the Corporation's 2023 Annual Information Form for further information on risks related to distributions from the Moa JV.
Production
Mixed sulphides production at the Moa JV in Q2 2024 was 4,095 tonnes, up 8% from the Q2 2023 primarily due to lower unplanned maintenance and improved ore quality being fed to the processing plant following the completion of the new Slurry Preparation Plant ("SPP") in Q1 2024.
During the second quarter of 2024, the annual refinery maintenance shutdown occurred and has been factored into the Corporation's 2024 guidance with higher production expected in the second half of the year. The planned annual maintenance shutdown also took place during the second quarter in 2023.
Sherritt's share of finished nickel and cobalt production in Q2 2024 was 3,383 tonnes and 342 tonnes, each 4% and 3% higher, respectively, than Q2 2023, primarily as a result of improved mixed sulphides availability.
Fertilizer production in Q2 2024 of 60,355 tonnes was 16% higher compared to Q2 2023 in line with higher nickel production, implementation of operational improvements, and due to the unplanned ammonia plant maintenance, that occurred in the prior year period.
NDCC
NDCC (1) per pound of nickel sold was US$5.75/lb in Q2 2024 compared to US$7.22/in Q2 2023. NDCC (1) significantly improved as expected, primarily as a result of lower MPR/lb and lower third-party feed costs partly offset by lower cobalt and net fertilizer by-product credits (3) . MPR/lb was 15% lower in Q2 2024 compared to Q2 2023 primarily due to lower sulphur and natural gas prices, lower purchased sulphuric acid, lower maintenance costs and the impact of higher nickel production and sales volumes. In Q2 2024 lower average-realized prices (1) and sales volumes for cobalt and fertilizers resulted in lower by-product credits.
Compared to Q1 2024, NDCC (1) continued to improve as expected decreasing by 21%. Sherritt maintains its 2024 guidance range for NDCC (1) at US$5.50 to US$6.00/lb.
Spending on capital
Sustaining spending on capital in Q2 2024 was $7.4 million compared to $13.6 million in Q2 2023. Sustaining spending on capital is lower as a result of timing of spending and consistent with lower annual guidance.
With the SPP completed and operating during Q1, growth spending on capital in Q2 2024 of $0.4 million was primarily related to spending on the second phase of the Moa JV expansion program.
Expansion program and strategic developments
Moa JV expansion program update
Phase two of the Moa JV's expansion program, the Processing Plant, is continuing to advance. During the second quarter of 2024 civil construction and structural erection was completed and piping installation commenced.
Subsequent to the end of the second quarter of 2024, the Moa JV received approval for US$12 million of foreign currency financing from a Cuban bank to support international payments related to construction of the Sixth Leach Train, the primary component of phase two of the expansion project.
Phase two commissioning and ramp up remains scheduled for 2025 with Sherritt expecting to commence the ramp up during the first half of the year. With completion of phase two, annual mixed sulphide precipitate production is expected to further increase toward the combined expansion target, including the new SPP, of approximately 20% of contained nickel and cobalt and is expected to fill the refinery to nameplate capacity to maximize profitability from the joint venture's own mine feed, displacing lower margin third-party feeds and increasing overall finished nickel and cobalt production.
Strategic developments
Sherritt, through its MHP Project, is advancing a flowsheet to produce high-purity nickel and cobalt sulphates and reduce sodium sulphate effluent, a key environmental challenge for the downstream industry. The MHP Project provides a strategic opportunity to expand Sherritt's current business into the production of nickel and cobalt sulphates, a key intermediary product required in the electric vehicle battery supply chain, where a current significant gap exists in North America. Sherritt's technical expertise and innovative processing solutions are key differentiators and enablers towards the Corporation's near-term strategic focus to expand its midstream processing capacity of critical minerals to fill this gap in North America in line with governments' objectives and incentives.
During the quarter, Sherritt commenced an engineering study and continued batch test work and process flowsheet development, which yielded very positive results for metal recoveries and impurity removals. A small scale continuous solvent extraction ("SX") pilot is planned for H2 2024 and process development work is expected to be completed by year end. Sherritt also continued its external engagement with governments and potential customers and funding partners, with a goal to reach agreement on key commercial and project parameters, including site identification, by year end.
Power
Revenue in Q2 2024 was $11.8 million, up 8% compared to Q2 2023, primarily due to higher production. The increase in electricity production is a result of additional gas from two wells that went into production at the end of Q2 2023.
As a key partner in supporting the Cuban government's plans to increase power production, Sherritt continues to work with its Cuban partners to increase gas supply and an additional well is scheduled to be drilled in the third quarter which is expected to provide additional electricity production in the second half of the year.
Unit operating costs (1) in Q2 2024 were $42.74/MWh compared to $34.13/MWh in Q2 2023 primarily driven by the timing of scheduled maintenance activities which were completed in Q2 2024, partly offset by higher sales volumes.
Spending on capital (1) in Q2 2023 was $1.5 million primarily driven by maintenance activities.
Sherritt received $5.1 million of dividends in Canada from Energas during the quarter. Based on 2024 guidance estimates for production volumes, unit operating costs (1) and spending on capital (1) disclosed in the Outlook section of the MD&A, Sherritt expects total dividends in Canada from Energas to exceed $10.0 million in 2024. Refer to the risks related to Sherritt's corporate structure in the Corporation's 2023 Annual Information Form for further information on risks related to dividends in Canada from Energas.
Non-GAAP financial measures. For additional information see the Non-GAAP and other financial measures section of this press release.
OUTLOOK
2024 guidance for production volumes, unit operating costs and spending on capital remains unchanged.
For the full release, see:
https://www.sherritt.com/English/Investor-Relations/News-Releases/News-Release-Details/2024/Sherritt-Reports-Second-Quarter-2024-Results-Metals-and-Power-Deliver-Strong-Performance-Net-Direct-Cash-Cost-Significantly-Improved/default.aspx
Teck Resources Limited (NYSE: TECK, TSE: TECK.A)
Teck is one of Canada's leading mining companies, focused on providing products that are essential to building a better quality of life for people around the globe.
https://www.teck.com/operations/
OUR HISTORY
Teck has grown over more than 100 years to become a leading diversified natural resource company, committed to responsible mining and mineral development.
https://www.teck.com/about/our-history/
ABOUT
Our Purpose
To provide essential resources the world is counting on to make life better while caring for the people, communities, and land that we love.
Our Businesses
Copper
A significant copper producer in the Americas and a global leader. With QB2 as our cornerstone, we have one of the best copper production growth profiles in the industry.
Zinc
One of the largest producers of mined zinc globally. We own one of the world's largest fully integrated zinc and lead smelting and refining facilities.
Steelmaking Coal
The world's second largest seaborne exporter, with some of the highest-quality steelmaking coal required for the low-carbon transition.
Energy
Interest in an oil sands mine that produces a low-carbon intensity product with a wells-to-wheel emissions intensity equivalent to that of the average barrel of crude oil refined in the U.S.
OUR INVESTMENT PROPOSITION: COPPER GROWTH
Driving long-term sustainable shareholder value through:
Industry leading copper growth
QB2 expected to double consolidated copper production by 2023
Portfolio of attractive projects has the potential to add 5x current copper equivalent production
Rebalance portfolio of high-quality assets to low-carbon metals
Proven operational excellence and RACE21 TM underpins cost competitiveness
Average 5-year adjusted EBITDA margins of 41% (2017-2021)
Maximize cash flows to fund copper growth
Balance growth and cash returns to shareholders
Investment grade balance sheet
Rigorous capital allocation framework distributes 30-100% of available cash flow to shareholders
Approaching cash flow inflection and potential increase in cash returns
Leadership in ESG and operational excellence
Industry-leading ESG rankings
Among world's lowest carbon intensities for copper, zinc and steelmaking coal production
Net-zero operations by 2050
https://www.teck.com/investors/
Teck Reports Unaudited Second Quarter Results For 2024
23 July 2024
Record quarterly copper production and transformation to pure-play energy transition metals company
Vancouver, B.C. - Teck Resources Limited (TSX: TECK.A and TECK.B, NYSE: TECK) (Teck) today announced its unaudited second quarter results for 2024.
"We generated $1.7 billion of Adjusted EBITDA1 in the second quarter driven by record copper production with QB ramp-up continuing, as well as strong copper market fundamentals with copper prices reaching all-time highs," said Jonathan Price, President and CEO. "In early July, we completed the sale of our steelmaking coal business, and we now move forward as a pure-play energy transition metals company with leading copper growth. With cash proceeds of US$7.3 billion we will reduce debt, retain cash to fund our near-term copper growth, and return significant cash to our shareholders."
Highlights
Adjusted EBITDA1 of $1.7 billion in Q2 2024 was driven by record copper production as Quebrada Blanca (QB) continues to ramp-up operations, as well as strong copper prices and steelmaking coal sales volumes. Profit from continuing operations before taxes was $658 million in Q2 2024.
Adjusted profit from continuing operations attributable to shareholders1 was $413 million, or $0.80 per share, in Q2 2024. Profit from continuing operations attributable to shareholders was $363 million, $0.70 per share, in Q2 2024.
On July 11, 2024, we completed the sale of the remaining 77% interest in our steelmaking coal business, Elk Valley Resources (EVR) and received cash proceeds of US$7.3 billion, subject to customary closing adjustments. We will deploy the cash proceeds to reduce debt, fund our near-term copper growth, and return significant cash to our shareholders.
With the proceeds from the sale of the steelmaking coal business, the Board authorized up to a $2.75 billion share buyback and approved payment of an eligible dividend of $0.625 per share, including a $0.50 per share supplemental dividend, payable on September 27, 2024 to shareholders of record on September 13, 2024. Combined with the $500 million share buyback announced in February, total cash returns to shareholders of $3.5 billion from the sale of the steelmaking coal business have been authorized.
On July 15, 2024, we purchased US$1.4 billion of our public notes through a bond tender offer.
Our liquidity as at July 23, 2024 is $14.3 billion, including $8.7 billion of cash. We generated cash flows from operations of $1.3 billion in Q2.
We returned a total of $346 million to shareholders in the second quarter through the purchase of $282 million of Class B subordinate voting shares pursuant to our normal course issuer bid, and $64 million paid to shareholders as dividends.
Record quarterly copper production of 110,400 tonnes in the second quarter, with QB producing 51,300 tonnes. QB production continues to ramp-up to full production rates with first molybdenum produced in the quarter.
Copper prices (LME) averaged US$4.42 per pound in the second quarter with spot copper prices reaching all-time highs of US$4.92 per pound in the quarter.
Red Dog had a strong second quarter with zinc production increasing by 4% from a year ago to 139,400 tonnes and lead production increasing by 23% to 28,900 tonnes.
Financial Summary Q2 2024
Financial Metrics (CAD$ in millions, except per share data)
Q2 2024
Q2 2023
Revenue
$3,873
$3,519
Gross profit
$1,162
$1,410
Gross profit before depreciation and amortization 2
$1,828
$1,841
Profit from continuing operations before taxes
$658
$805
Adjusted EBITDA 2
$1,670
$1,479
Profit from continuing operations attributable to shareholders
$363
$510
Adjusted profit from continuing operations attributable to shareholders 2
$413
$643
Basic earnings per share from continuing operations
$0.70
$0.98
Diluted earnings per share from continuing operations
$0.69
$0.97
Adjusted basic earnings per share from continuing operations 2
$0.80
$1.24
Adjusted diluted earnings per share from continuing operations 2
$0.79
$1.22
Key Updates
Executing on Our Copper Growth Strategy
QB copper production of 51,300 tonnes in the second quarter increased compared to 43,300 tonnes in the first quarter of 2024, as quarter over quarter production ramp-up continues.
First molybdenum production and sales at QB in the quarter, as planned, with ramp-up progressing.
Robust plant design and construction supports debottlenecking, and we remain focused on recovery and throughput. We continue to expect to be operating at full rates by the end of 2024.
Throughput has improved and is close to design rates. Recoveries have improved as we adjust to the clays in the transition ores and improve plant stability. We have confidence in achieving target recoveries by the end of 2024. We are forecasting slightly lower grades in the second half of 2024 compared to plan due to short term access issues related to pit de-watering and a localized geotechnical issue. As a result, we have updated our previously disclosed annual 2024 QB production guidance for copper to 200,000 to 235,000 tonnes and molybdenum to 1.8 to 2.4 thousand tonnes.
We continued to advance our industry-leading copper growth portfolio in the second quarter, with the focus on progressing feasibility studies and permitting, advancing detailed engineering work, and planning for project execution. At QB, we progressed work to define the near term debottlenecking opportunities. We achieved milestones in the permitting processes for HVC MLE and San Nicolás projects, and advanced the preparation of construction permits and feasibility study updates to support the next stages of Zafranal project development.
Sale of the Steelmaking Coal Business
On July 11, 2024, we completed the sale of our remaining 77% interest in our steelmaking coal business, EVR, to Glencore and received transaction proceeds of US$7.3 billion, subject to customary closing adjustments.
On July 4, 2024, we announced our intention to allocate the transaction proceeds consistent with Teck's Capital Allocation Framework. This includes the repurchase of up to $2.75 billion of Class B subordinate voting shares, a one-time supplemental dividend of approximately $250 million, a debt reduction program of up to $2.75 billion, funding retained for our value-accretive copper growth projects, and approximately $1.0 billion for final taxes and transaction costs.
In our second quarter 2024 News Release, Management's Discussion and Analysis, and Condensed Interim Consolidated Financial Statements, EVR continues to be reported in continuing operations because final regulatory approval of the sale of EVR was not received until July 4, 2024. Beginning in the third quarter of 2024, EVR results will be presented as discontinued operations.
Safety and Sustainability Leadership
Our High-Potential Incident (HPI) Frequency rate was 0.11 for the first half of 2024, a 46% reduction in HPI's compared to the same period last year.
Teck was named one of the Best 50 Corporate Citizens in Canada by Corporate Knights for the 18th consecutive year.
Guidance
Our previously disclosed guidance has been updated for changes to our 2024 annual copper and molybdenum production, and copper net cash unit costs 1 as a result of changes to our 2024 annual production and net cash unit cost1 guidance for QB.
Our 2024 annual copper production guidance has been revised to 435,000 to 500,000 tonnes. Our 2024 annual molybdenum production guidance has been revised to 4.3 to 5.5 thousand tonnes. Copper net cash units costs1 (including QB) guidance has been revised to US$1.90 to $2.30 per pound.
Given the completion of the sale of EVR on July 11, 2024, we have removed all steelmaking coal business unit information from our Outlook and Guidance disclosures. Our guidance is outlined in summary below and our usual guidance tables, including three-year production guidance, can be found on pages 28-32 of Teck's second quarter results for 2024 at the link below.
2024 Guidance - Summary
Current
Production Guidance
Copper (000's tonnes)
435 - 500
Zinc (000's tonnes)
565 - 630
Refined zinc (000's tonnes)
275 - 290
Sales Guidance - Q3 2024
Red Dog zinc in concentrate sales (000's tonnes)
250 - 290
Unit Cost Guidance
Copper net cash unit costs (US$/lb.) 1
1.90 - 2.30
Zinc net cash unit costs (US$/lb.) 1
0.55 - 0.65
https://www.teck.com/news/news-releases/2024/teck-reports-unaudited-second-quarter-results-for-2024
Turquoise Hill Resources Ltd (NYSE: TRQ, TSE: TRQ)
Rio Tinto has completed its acquisition of Turquoise Hill Resources Ltd (TSX: TRQ) (NYSE: TRQ) ("Turquoise Hill") for a consideration of approximately $3.1 billion1, simplifying its ownership of the world-class Oyu Tolgoi mine in Mongolia, significantly strengthening Rio Tinto's copper portfolio, and demonstrating its long-term commitment to the project and Mongolia.
https://www.riotinto.com/en/news/releases/2022/rio-tinto-completes-acquisition-of-turquoise-hill
Overview
Turquoise Hill (TRQ: TSX & NYSE) is an international mining company focused on the operation and further development of the Oyu Tolgoi copper-gold mine in southern Mongolia, which is the Company's principal and only material mineral resource property. Turquoise Hill's ownership of the Oyu Tolgoi mine is held through a 66% interest in Oyu Tolgoi LLC; the remaining 34% interest is held by Erdenes Oyu Tolgoi LLC, a Mongolian state-owned entity.
https://turquoisehill.com/turquoise-hill/overview/default.aspx
Oyu Tolgoi
Oyu Tolgoi is one of the world's largest new copper-gold mines and is located in the South Gobi region of Mongolia, approximately 550 km south of the capital, Ulaanbaatar, and 80 km north of the Mongolia-China border.
Oyu Tolgoi has the potential to operate for approximately 100 years from five known mineralized deposits. The first of those (the Oyut deposit) was put into production as an open-pit operation in 2013.
A second deposit, Hugo North (Lift One), is under development as an underground operation and is scheduled to begin sustainable production in 2022. The other three deposits, Hugo North (Lift Two), Hugo South and Heruga, are not yet scheduled for development.
https://turquoisehill.com/turquoise-hill/oyu-tolgoi/default.aspx
Rio Tinto releases fourth quarter production results
17 January 2023
Rio Tinto Chief Executive Jakob Stausholm, said: "We were fatality free for the fourth consecutive year, as we continue to put safety at the forefront of everything we do. A number of operational records were achieved in the second half across the Pilbara iron ore mine and rail system. Deployment of our Safe Production System resulted in improved performance at those sites and overall production was higher versus 2021 across all commodities, with the exception of aluminium and alumina.
"The acquisition of Turquoise Hill Resources strengthens our copper portfolio and demonstrates our ability to allocate capital with discipline to grow in materials the world needs for the energy transition and delivering long-term value for our shareholders. Copper guidance has been increased accordingly. We continue to invest in future growth, progressing the Rincon lithium project in Argentina and are working with our partners to progress the Simandou project in Guinea.
"We continue to work hard to transform our culture and invest in genuine partnerships. I am proud that we have reached new agreements with the Yindjibarndi and Puutu Kunti Kurrama and Pinikura peoples in Australia, and the Pekuakamiulnuatsh First Nation in Canada.
"In line with our new purpose of finding better ways to provide the materials the world needs, we will continue to progress our four objectives and strategy to strengthen the business, which will lead to profitable growth and continue to deliver attractive shareholder returns."
2022 operational highlights and other key announcements
We continue to prioritise the safety, health and wellbeing of our workforce and communities where we operate. We experienced our fourth consecutive year with no fatalities at our managed operations, and continue to work hard with our partners to achieve the same results at our non-managed assets and marine operations.
Pilbara operations produced 324.1 million tonnes (100% basis) in 2022, 1% higher than 2021. Shipments were 321.6 million tonnes (100% basis), in line with 2021. Performance improvements continued across the system and we achieved record second half performance across the mine and rail system. We expect Gudai-Darri to reach its nameplate capacity on a sustained basis during 2023.
Bauxite production of 54.6 million tonnes was 1% higher than 2021, despite equipment reliability issues at Weipa and Gove in Australia.
Aluminium production of 3.0 million tonnes was 4% lower than 2021 due to reduced output at our Kitimat smelter in British Columbia, Canada and Boyne smelter in Queensland, Australia. The rate of pot restarts at Kitimat picked up in the fourth quarter and Boyne smelter cell recovery efforts continued. Recovery at both smelters is progressing with full ramp-up expected to be completed during the course of 2023. All of our other aluminium smelters continued to demonstrate stable performance.
On 1 December, we
commissioned
the second tunnel (T2) to carry water into the Kemano Powerhouse in British Columbia, marking the end of the Kemano T2 hydropower project. The new, 16-kilometre tunnel produced its first megawatt of electricity in July 2022 after construction was completed in May 2022. Both T1 and T2 are now operating together, ensuring the long-term reliability of the power supply for our aluminium smelter in Kitimat and neighbouring communities.
Mined copper production of 521 thousand tonnes was 6% higher than 2021 due to higher grades at Kennecott and Escondida, partly offset by lower grades and recoveries at Oyu Tolgoi as a result of planned mine sequencing. Unplanned maintenance was required at Kennecott in the fourth quarter of 2022 in our anode furnaces leading to extended downtime and continued poor anode production, likely to result in weak cathode production in the first quarter of 2023. Refined copper production at Kennecott will continue to be challenged due to the smelter and refinery performance, until we undertake the largest rebuild in nine years which is planned for the second quarter of 2023 and is expected to take approximately three months.
On 16 December, we
completed
the acquisition of Turquoise Hill Resources Ltd for a consideration of approximately $3.1 billion 1 , simplifying ownership of the world-class Oyu Tolgoi mine in Mongolia, significantly strengthening Rio Tinto's copper portfolio, and demonstrating our long-term commitment to the project and Mongolia. We now hold a 66% direct interest in the Oyu Tolgoi project with the remaining 34% owned by the Government of Mongolia through Erdenes Oyu Tolgoi. Cash consideration of approximately $2.9 billion was paid in December 2022. Oyu Tolgoi production for 2022 remains on a 33.52% Rio Tinto share basis.
Titanium dioxide slag production of 1,200 thousand tonnes was 18% higher than 2021, due to community disruptions at Richards Bay Minerals (RBM) in South Africa in 2021, and continued improved performance of operations at Rio Tinto Fer et Titane (RTFT), Canada. Production constraints related to nationwide electrical power loadshedding at RBM were experienced in the fourth quarter.
Iron Ore Company of Canada (IOC) production of pellets and concentrate was 6% higher than 2021. Successful deployment of the Rio Tinto Safe Production System (SPS) at the concentrator was completed in the year, with record performance metrics achieved in the year, including monthly records for concentrate production and total material moved in the second quarter. Planning for SPS deployment at the pellet plant commenced in December.
We achieved our SPS deployment target for 2022 with 30 deployments across 16 sites. Roll-outs are ongoing to continuously improve safety, strengthen employee engagement and sustainably lift operational performance across our global portfolio.
As reported in the first half, higher rates of inflation have increased our closure liabilities with an impact to underlying earnings. This resulted in increased charges for the year of approximately $1.3 billion pre-tax within underlying earnings (first half 2022: $0.4 billion) compared with 2021, including a $1.1 billion full year increase in amortisation of discount (first half 2022: $0.3 billion), with the remainder impacting Underlying EBITDA.
As part of the agreement reached with the Australian Taxation Office (ATO) in July, we paid the ATO additional tax of A$613 million for the period from 2010 to 2021 in August 2022.
The sale of a royalty on an area including the Cortez mine operational area, a direct wholly-owned subsidiary of Royal Gold Inc., for $525 million in cash, was settled in August. This amount will be recorded in 'Sales of financial assets' in the group cash flow statement and is therefore not included in Free cash flow.
The sale of our wholly owned Roughrider uranium development completed in October for total consideration of $150 million, including $80 million in cash, will be recorded in 'Disposal of subsidiaries' in the group cash flow statement and is therefore not included in Free cash flow.
On 30 November, we provided a detailed update at our
Investor Seminar
on execution of our strategy and evolution of our culture, including SPS and decarbonisation activities, to strengthen the business, grow in a decarbonising world and continue to deliver attractive shareholder returns. Capital expenditure to decarbonise our assets of an estimated $7.5 billion to 2030 is being prioritised and phased. This remains subject to Traditional Owner and other stakeholder engagement, regulatory approvals and technology developments. New long-term power contracts will also be required for the aluminium business to meet targets. Our incremental operating expenditure on building new teams and energy efficiency initiatives remains around $200 million per annum in addition to Research and Development investment.
On 19 December, we
announced
the appointment of Kaisa Hietala as a non-executive director to the Rio Tinto Board, commencing 1 March 2023. Ms Hietala, a Finnish citizen, played a central role in the commercial transformation of Neste, the world's largest and most profitable producer of renewable products, as Executive Vice President of Renewable Products. She serves on the Boards of Exxon Mobil and Smurfit Kappa Group, and is Chair of the Board at Tracegrow, a private Finnish sustainable fertilisers company.
All figures in this report are unaudited. All currency figures in this report are US dollars, and comments refer to Rio Tinto's share of production, unless otherwise stated.
https://www.riotinto.com/news/releases/2023/Rio-Tinto-releases-fourth-quarter-production-results
Wheaton Precious Metals Corp. (NYSE: WPM, TSE: WPM)
(Formerly Silver Wheaton Corp.)
ABOUT WHEATON
Wheaton Precious Metals is one of the largest precious metals streaming companies in the world. The Company has entered into agreements to purchase all or a portion of the precious metals or cobalt production from high-quality mines for an upfront payment and an additional payment upon delivery of the metal. Wheaton currently has streaming agreements for 23 operating mines and 13 development stage projects. The Company's production profile is driven by a portfolio of low-cost, long-life assets, including a gold stream on Vale's Salobo mine, and a silver stream on Newmont's Peñasquito mine.
VISION
To be the world's premier precious metals investment vehicle.
MANDATE
To deliver value through streaming to all of our stakeholders:
to our Shareholders, by delivering low risk, high quality, diversified exposure and growth optionality to precious metals;
to our Partners, by crystallizing value for precious metals yet to be produced; and
to our Neighbours, by promoting responsible mining practices and supporting the communities in which we live and operate.
UNIQUE BUSINESS MODEL
Our unique business model creates significant shareholder value by providing:
Leverage to increases in the price of precious metals;
Additional growth through the acquisition of new streams;
A dividend yield, which has the potential to grow over time; and,
Participation in the exploration and expansion success of the mines underlying our current agreements.
Wheaton offers these benefits while at the same time reduces many of the downside risks faced by traditional mining companies. In particular, Wheaton offers its investors both capital and operating cost predictability. Other than its initial upfront payment, Wheaton typically has no ongoing capital or exploration costs.
The Company has an experienced management team with a strong track record of success and is well positioned for further growth.
The Company has an experienced management team with a strong track record of success and is well positioned for further growth.
https://www.wheatonpm.com/Company/company-profile/default.aspx
Wheaton Precious Metals Announces Second Quarter 2024 Results and Record Operating Cash Flow for the First Half of 2024
August 7, 2024
SECOND QUARTER FINANCIAL RESULTS
VANCOUVER, BC, Aug. 7, 2024 /CNW/ - "Wheaton once again delivered strong results in the second quarter, generating $234 million in operating cash flow, resulting in record cash flows of over $450 million for the first half of the year. With year-to-date gold equivalent production of approximately 305,000 ounces, we are well on track to achieve our 2024 production guidance of 550,000 to 620,000 gold equivalent ounces," said Randy Smallwood, President and Chief Executive Officer of Wheaton Precious Metals." In addition, we were ranked among the top 10 companies on Corporate Knights' annual list of the Best 50 Corporate Citizens in Canada and published our annual sustainability and climate change reports. Corporate Knights' recognition highlights our leadership in sustainability and commitment to creating value for all stakeholders. Our performance in the first half of 2024 supports our belief that the strength of our organic growth profile and high-quality, long-life portfolio, combined with favorable commodity price trends, firmly positions Wheaton as a premier choice for precious metals exposure."
Solid Financial Results and Strong Balance Sheet
Second quarter of 2024: $299 million in revenue, $234 million in operating cash flow, $122 million in net earnings and $150 million in adjusted net earnings 1 and, declared a quarterly dividend 1 of $0.155 per common share.
Balance Sheet: cash balance of $540 million, no debt, and an undrawn $2 billion revolving credit facility as at June 30, 2024 after making total upfront cash payments of $45 million relative to mineral stream and royalty interests in the quarter.
Undrawn $2 billion revolving credit facility extended by an additional year with the facility now maturing on June 25, 2029.
High Quality Asset Base
Streaming and royalty agreements on 18 operating mines and 27 development projects 5 .
93% of attributable production from assets in the lowest half of their respective cost curves 2,4 .
Attributable gold equivalent production 3 ("GEOs") of 147,100 ounces in the second quarter of 2024 and 305,800 for the first six months of 2024, with year-to-date production representing an increase of 13% relative to the comparable period of the prior year due primarily to the mill throughput expansion at Salobo.
Average annual forecast production guidance for 2024 of 550,000 to 620,000 GEOs 3 maintained, with forecasted sector-leading growth of over 800,000 GEOs 3 by 2028, and average annual forecast attributable production growing to over 850,000 GEOs 3 in years 2029 to 2033.
Further de-risked forecast growth profile as construction activities advanced at the Blackwater, Goose, Platreef, Mineral Park and Marmato Lower Mine Projects, all of which are expected to be producing within the next 16 months.
Leadership in Sustainability
Recognized among Corporate Knights' 2024 100 Most Sustainable Corporations in the World, and Best 50 Corporate Citizens in Canada.
Top Rankings: One of the top-rated companies by Sustainalytics, AA rated by MSCI and Prime rated by ISS.
Published our second annual Climate Change Report detailing how Wheaton is addressing climate change risks and opportunities, as well as potential climate-related impacts.
Published our fifth annual Sustainability Report highlighting our commitment to responsible business practices and providing a comprehensive review of Wheaton's performance in environmental, social and governance topics.
Financial Review
Revenues
Revenue in the second quarter of 2024 was $299 million (61% gold, 37% silver, 1% palladium and 1% cobalt), with the $34 million increase relative to the prior period quarter being primarily due to an 18% increase in the average realized gold equivalent³ price; partially offset by a 4% decrease in the number of GEOs³ sold.
Revenue was $596 million in the six months ended June 30, 2024, representing a $116 million increase from the comparable period of the previous year due primarily to an 11% increase in the average realized gold equivalent³ price, resulting from relative changes in the GEOs³ produced but not yet delivered; and a 12% increase in the number of GEOs³ sold.
Cash Costs and Margin
Average cash costs¹ in the second quarter of 2024 were $436 per GEO³ as compared to $452 in the second quarter of 2023. This resulted in a cash operating margin¹ of $1,976 per GEO³ sold, an increase of 24% as compared with the second quarter of 2023, a result of the higher realized price per ounce coupled with the lower average cash costs.
Average cash costs¹ for the six months ended June 30, 2024 were $433 per GEO³ as compared to $463 in the comparable period of the previous year. This resulted in a cash operating margin¹ of $1,797 per GEO³ sold, a 16% increase from the comparable period of the previous year.
Cash Flow from Operations
Operating cash flow in the second quarter of 2024 amounted to $234 million, with the $32 million increase due primarily to the higher gross margin.
Operating cash flows for the six months ended June 30, 2024 amounted to $454 million, with the $116 million increase from the comparable period of the previous year being due primarily to the higher gross margin.
Balance Sheet (at June 30, 2024)
Approximately $540 million of cash on hand
The Company extended its existing undrawn $2 billion revolving term loan (the "Revolving Facility") with its maturity date now June 25, 2029.
During the second quarter of 2024, the Company made total upfront cash payments of $45 million relative to the mineral stream and royalty interests consisting of:
$10 million relative to the Cangrejos PMPA;
$25 million relative to the Mineral Park PMPA; and
$10 million relative to the Mt Todd Royalty.
During the second quarter of 2024, the Company disposed of its investment in Hecla Mining Company for gross proceeds of $177 million.
With the existing cash on hand coupled with the fully undrawn $2 billion revolving credit facility, the Company believes it is well positioned to fund all outstanding commitments and known contingencies as well as providing flexibility to acquire additional accretive mineral stream interests.
Global Minimum Tax
The Company is within the scope of global minimum tax ("GMT") under the OECD Pillar Two model rules ("Pillar Two"), under which large multinational entities will be subject to a 15% GMT. On June 20, 2024, Canada's Global Minimum Tax Act ("GMTA"), received royal assent. The GMTA enacts the OECD Pillar Two model rules where in scope companies will be subject to a 15% GMT for fiscal years commencing on or after December 31, 2023. With the enactment of the GMTA on June 20, 2024, the income of the Company's subsidiaries which operate in jurisdictions with a statutory tax rate of 0% is impacted by the GMTA and an amount of $51 million current tax expense associated with GMT was recorded for the period from January 1, 2024 to June 30, 2024. GMT accrued to December 31, 2024, is payable on or before June 30, 2026 (18 months following year-end).
Second Quarter Operating Asset Highlights
Salobo: In the second quarter of 2024, Salobo produced 63,200 ounces of attributable gold, an increase of approximately 15% relative to the second quarter of 2023, driven by higher throughput, with production from the third concentrator line commencing at the end of 2022. On April 24, 2024, Vale S.A. ("Vale") reported the continued ramp-up at Salobo III, which reached 90% average throughput in the first quarter, as well as improved year over year operational performance at Salobo I and II. On July 25, 2024, Vale also reported that the Salobo III processing plant operations resumed in July, after being halted for 31 days due to a fire on a conveyor belt. Vale confirmed that 2024 copper production guidance of 320-355 kt has been maintained.
Peñasquito: In the second quarter of 2024, Peñasquito produced 2.3 million ounces of attributable silver, an increase of approximately 30% relative to the second quarter of 2023 primarily due to higher throughput, partially offset by lower grades.
Constancia: In the second quarter of 2024, Constancia produced 0.5 million ounces of attributable silver and 6,100 ounces of attributable gold, an increase of approximately 7% for silver production and a decrease of approximately 18% for gold production relative to the second quarter of 2023. The decrease in gold production was primarily the result of lower gold grades due largely to the planned stripping activity in the Pampacancha pit, which commenced in the second quarter and is expected to continue through the third quarter. As a result of the stripping activity, ore feed was supplemented with stockpiles during the second quarter, as per the original mine plan. Mill ore feed has now reverted to the typical blend of approximately one-third from Pampacancha and two-thirds from Constancia, which is expected to continue throughout 2024. The increase in silver production is primarily due to higher throughput and grades, partially offset by lower recoveries.
Stillwater: In the second quarter of 2024, the Stillwater mines produced 2,100 ounces of attributable gold and 4,300 ounces of attributable palladium, an increase of approximately 4% for gold and 12% for palladium relative to the second quarter of 2023, due primarily to higher throughput and grades.
Voisey's Bay: In the second quarter of 2024, the Voisey's Bay mine produced 259,000 pounds of attributable cobalt, an increase of approximately 71% relative to the second quarter of 2023, as the transitional period between the depletion of the Ovoid open-pit and ramp-up to full production of the Voisey's Bay underground mine nears completion. Vale reports that physical completion of the Voisey's Bay underground mine extension was 96% at the end of the second quarter, and that the main surface assets are completed and in operation. In the underground portion, Reid Brook activities are largely complete, with the powerhouse planned to be fully commissioned and linked to the grid by Q3 2024. The mine development at Eastern Deeps is now concluded, and construction of the bulk material handling system, dewatering and support facilities is ongoing. The full mine assets at Eastern Deeps are expected to be in operation by the end of 2024.
Other Gold: In the second quarter of 2024, total Other Gold attributable production was 600 ounces, a decrease of approximately 70% relative to the second quarter of 2023, primarily due to the closure of the Minto mine in May 2023.
Other Silver: In the second quarter of 2024, total Other Silver attributable production was 1.4 million ounces, an increase of approximately 5% relative to the second quarter of 2023. The increase from the comparable period of the prior year is primarily due to an 87% increase in production at Zinkgruvan as a result of higher throughput and grades, largely offset by the cessation of attributable ore mined at Aljustrel.
Detailed mine-by-mine production and sales figures can be found in the Appendix to this press release and in Wheaton's consolidated MD&A in the 'Results of Operations and Operational Review' section.
Recent Development Asset Updates
Blackwater Project: On July 30, 2024, Artemis Gold Inc. ("Artemis") announced that overall construction was approximately 87% complete and that construction of the water management pond, excavation of the cutoff trench, and the earthworks and lining of the central water management pond were completed. Work on the tailings storage facility continues to progress well with increased productivity and material movements through the quarter. Equipment installation was a key focus area as well as installation of structural steel, conveyors, platework, pipework, and electrical infrastructure. Early pre-commissioning activities in the crushing area of the process facility are underway. Artemis also stated that the project remains on schedule for first gold pour in Q4 2024.
On July 22, 2024, Artemis announced that it had responded to a wildfire evacuation order by proactively removing all non-essential staff and contractors as of July 21, 2024. On July 26, 2024, Artemis announced the evacuation order has been lifted and began an expedient, staged return of employees and contractors to site. The mine site was not impacted by any wildfires.
Platreef Project: On July 31, 2024, Ivanhoe Mines Ltd. ("Ivanhoe") reported that construction of Platreef's Phase 1 concentrator was completed on schedule subsequent to the quarter. Cold commissioning has started, with water being fed through the concentrator, and construction of Platreef's Shaft 2 headgear is approximately 60% complete. Work is well underway on the updated feasibility study to accelerate Platreef's Phase 2 expansion, as well as the preliminary economic assessment of the previously announced Phase 3 expansion. Both studies are expected to be completed in the fourth quarter. A Phase 3 expansion to 10 Mtpa processing capacity is expected to rank Platreef as one of the world's largest platinum-group metal, nickel, copper and gold producers.
Goose Project: On May 7, 2024, B2Gold Corp. ("B2Gold") announced the successful completion of the 2024 winter ice road ("WIR") campaign, delivering all necessary materials to complete the construction of the Goose project. B2Gold reports that while mill construction remains on schedule, development of the open pit and underground is slightly behind schedule due to equipment availability, adverse weather conditions and prioritization of critical path construction activities. As a result, B2Gold reports that first gold pour is now expected in the second quarter of 2025 with ramp up to full production in the third quarter of 2025, one quarter later than previous estimates.
Marmato Mine: On April 15, 2024, Aris Mining Corporation ("Aris") provided an update on the Marmato Lower Mine expansion project, including the completion of the access road to the new processing facility area. Earthworks in the plant area will reportedly commence soon, and the contractor for the new portal and decline is fully mobilized and cutting of the portal face has commenced. On May 14, 2024, Aris reported that most of the mechanical equipment has been ordered and the access road has reached the portal level. On July 16, 2024, Aris further reported that the Lower Mine project is on track for first gold pour by the end of 2025, followed by an approximate six-month ramp-up period.
Curipamba Project: On June 17, 2024, Adventus Mining Corporation ("Adventus") announced that the Ministry of Environment, Water and Energy Transition of the Government of Ecuador has granted Administrative Authorization over Public Hydric Domain for the Curipamba project. This key permit allows the Curipamba project to carry out planned construction activities in accordance with the technical requirements stipulated in the Water Resources Law. With this approval, Adventus noted that the last main step prior to the start of construction is the receipt of the final document outlining the transition from the medium scale exploration to exploitation phase.
On April 26, 2024, Adventus announced that Silvercorp Metals Inc. ("Silvercorp") has entered into a definitive arrangement agreement with Adventus pursuant to which Silvercorp has agreed to acquire all of the issued and outstanding common shares of Adventus. As reported by Silvercorp, the existing stream with Wheaton, combined with Silvercorp's existing cash and cash equivalents of approximately $200 million, is more than sufficient to fully fund the Curipamba project through construction. On July 2, 2024, the Ontario Superior Court of Justice granted a final order approving the arrangement. The acquisition closed on July 31, 2024.
On August 6, 2024, Silvercorp announced a key milestone that the Ministry of Energy and Mines of the Government of Ecuador ("MEM") has issued a Resolution of Change of Phase for the Curipamba project. The Resolution of Change of Phase advances the legal status of the project from the economic evaluation phase to the exploitation phase and allows for the start of construction and subsequent operation of the mine. The Change of Phase for a medium-scale project is equivalent to the Exploitation Agreement for large-scale mines in Ecuador.
Marathon Project: On July 31, 2024, Generation Mining Limited ("Gen Mining") reported that the federal government has approved amendments to Schedule 2 of the Metal and Diamond Mining Effluent Regulations ("Schedule 2") which will allow for the construction of specific water management structures and operation of key infrastructure for the Marathon Project. Gen Mining also states that receipt of the few remaining provincial and federal approvals and permits required for construction is expected in the coming months.
On August 7, 2024, Gen Mining announced a key milestone with the receipt of the Fisheries Act Authorization ("FAA") for the Marathon project. The FAA, issued by Fisheries and Oceans Canada, approves Gen Mining's plan to avoid, mitigate and offset impacts to fish and fish habitat related to the development of the project. This authorization represents the final federal approval required to commence construction of the tailings storage facility and water management structures. The Marathon project requires three remaining provincial approvals to be issued by the Ministry of the Environment, Conservation and Parks and the Ministry of Natural Resources. These are expected in the coming months. Following which, the Marathon project will have all of the key government permits and approvals required for construction.
Santo Domingo: On July 31, 2024, Capstone Copper Corp. ("Capstone") published the results of an updated feasibility study for the Santo Domingo project, outlining an optimized mine plan, updated capital and operating cost estimates, and a 19-year mine life supported by higher mineral reserve estimates. The report indicates that total gold production is expected to average 35,000 ounces per year for the first seven years of production, an increase from the 30,000 ounces per year estimate outlined in the 2020 feasibility study, and 22,000 ounces per year for the life of mine, up from 17,000 ounces per year. Capstone has reported that with construction completed at the Mantoverde project, a deposit situated 35 kilometers northeast of the Santo Domingo project, Capstone plans to advance several value enhancement initiatives within the Mantoverde-Santo Domingo district that are not yet included in the 2024 feasibility study. The first of these initiatives is a newly announced two-year, $25 million exploration program at Mantoverde, aimed at supporting the two future processing centers between Mantoverde and Santo Domingo.
Curraghinalt Project: On May 3, 2024, the Planning Appeals Commission & Water Appeals Commission (the "Commission") in Northern Ireland concluded that the water abstraction and impoundment licenses ("Water Licenses") relative to the Curraghinalt Project have been rescinded and that license applications would need to be resubmitted and subsequent public inquiry referrals held. The Commission noted that it has suspended arrangements for the current inquiry timetable until it is in receipt of the expected Water License applications, at which time it will move to set directions and new dates for the submission of statements of case, rebuttals, and for the opening of the re-scheduled hearing sessions in due course.
Sustainability
Annual Sustainability Report & Climate Change Report
Wheaton published its fifth annual sustainability report on May 23, 2024, and its second annual climate change report on June 24, 2024. The reports are part of Wheaton's voluntary suite of sustainability disclosures demonstrating the Company's commitment to responsible business practices and ESG performance.
ESG Ratings & Awards
On June 26, 2024, Wheaton was named as one of Corporate Knights' 2024 Best 50 Corporate Citizens in Canada ranking ninth on the list. With a significant portion of the score linked to sustainable revenue, this metric underscores the exceptional quality of Wheaton's mining partners and the Company's rigorous due diligence process.
Community Investment Program
Wheaton's Partner Community Investment Program continues to support initiatives with the Vale Foundation, Vale Canada, Glencore via Antamina, Hudbay Minerals, First Majestic Silver and Sibanye-Stillwater to support the communities influenced by the mines and provide vital services and programs including educational resources, health and dental programs, poverty reduction initiatives, entrepreneurial opportunities, and various social and environmental programs.
Coast Mental Health Foundation's Courage To Come Back Awards presented by Wheaton raised over CA$1.7 million in support of community-based services for people living with mental illness in British Columbia.
2024 and Long-Term Production Outlook
Wheaton's estimated attributable production in 2024 is forecast to be 325,000 to 370,000 ounces of gold, 18.5 to 20.5 million ounces of silver, and 12,000 to 15,000 GEOs3 of other metals, resulting in annual production of approximately 550,000 to 620,000 GEOs3, unchanged from previous guidance2,3.
Annual production is forecast to increase by approximately 40% to over 800,000 GEOs3 by 2028, with average annual production forecast to grow to over 850,000 GEO3 in years 2029 to 2033, also unchanged from previous guidance6.
About Wheaton Precious Metals Corp.
Wheaton is the world's premier precious metals streaming company with the highest-quality portfolio of long-life, low-cost assets. Its business model offers investors commodity price leverage and exploration upside but with a much lower risk profile than a traditional mining company. Wheaton delivers amongst the highest cash operating margins in the mining industry, allowing it to pay a competitive dividend and continue to grow through accretive acquisitions. As a result, Wheaton has consistently outperformed gold and silver, as well as other mining investments. Wheaton is committed to strong ESG practices and giving back to the communities where Wheaton and its mining partners operate. Wheaton creates sustainable value through streaming for all of its stakeholders.
In accordance with Wheaton Precious Metals[TM] Corp.'s ("Wheaton Precious Metals", "Wheaton" or the "Company") MD&A and Financial Statements, reference to the Company and Wheaton includes the Company's wholly owned subsidiaries.
For the full release, see:
https://www.wheatonpm.com/news/pressreleases/News-Releases-Details/2024/Wheaton-Precious-Metals-Announces-Second-Quarter-2024-Results-and-Record-Operating-Cash-Flow-for-the-First-Half-of-2024/default.aspx
ACQ_REF: IS/45308/20240910/CAN/14/8
ACQ_AUTHOR: Senior Associate/Theadore Leighton Manjah
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