i-80 Gold Q2 2023 Earnings Call Transcript

Quartr
Provided by Quartr
August 3, 2023

There are 5 speakers on the call.

Operator

Morning. My name is Dennis, and I will be your conference operator today. At this time, I would like to welcome everyone to the IAT Goldcorp Second Quarter 2023 Results Conference Call. All lines have been placed on mute to prevent any background noise. After the speakers' remarks, there will be a question and answer session.

Operator

Thank you. Mr. Gollak, you may begin your conference.

Speaker 1

Thank you and good morning everybody. Thanks for joining us on this warm Thursday in Thunder Bay and I'm sure it's a nice day in Reno as well. On the call with me is Ryan Snow, Chief Financial Officer Matt Geely, President and Chief Operating Officer. Unfortunately, Ewan Downey is having a travel delay, so we're going to go on ahead with the call without him. So you'll get the presentation from The rest of us.

Speaker 1

Going on to Slide 3, I just want to highlight that we will be making forward looking statements. So I encourage you to read this slide and understand that Some of the that we that forward looking statements will be made. With that, I'm going to turn it over to Ryan Snow to talk about the financial results And then we'll get into a brief presentation on the company. Ryan? Thanks, Matt, and good morning to listeners from me.

Speaker 1

Yesterday, the company reported our financial statements and MD and A for the Q2 and 1st 6 months of 2023. They can be found on SEDAR, EDGAR and the company's website. On Slide 4 of the presentation, we present a graph of our production and Sales by quarter for the year. This production is from the residual leaching activities at both Ruby Hill and Lone Tree and also includes the oxide material we placed on the leach pad from Granite Creek. 2nd quarter production was 4,329 ounces and year to date production was 6,678 ounces.

Speaker 1

The company expects increased gold production and sales in the second half of twenty twenty three when compared to the first Slide 5 of the presentation highlights our revenue of $11,300,000 in Q2, bringing year to date revenue to $16,900,000 This revenue generated mine operating loss of $3,600,000 for the quarter $7,000,000 year to date. The mine operating losses in the quarter year to date were primarily the result of write downs of leach pad inventory at both Ruby Hill and Lone Tree totaling $4,500,000 $8,500,000 respectively. The company reported a loss for the quarter of $16,000,000 or $0.06 per share. When adjusted for the impact of mark to market gains on the company's convertible debt, outstanding warrants, gold prepay and silver purchase and sale agreement, The loss was $13,100,000 or $0.08 per share. For the year, the company is in a loss position of $29,100,000 or $0.11 per share And when adjusted for the items previously mentioned, was in an adjusted loss position for the year of $39,500,000 or $0.15 per share.

Speaker 1

I think it's important to highlight on this slide that the company continues to invest in exploration, evaluation and predevelopment in 2023 with $11,100,000 invested in the 2nd quarter and $20,100,000 so far in 2023. This investment has resulted in 3 new discoveries this year at Ruby Hill and many great assay results, the most recent of which was published yesterday and will be discussed in further detail later in this presentation. On Slide 6, the company's liquidity position shows that we ended the quarter with $19,400,000 in cash and had an inventory balance of $18,800,000 Current assets were $49,800,000 while accounts payable and accrued liabilities were 22.3 and total current liabilities were $64,100,000 This resulted in a current ratio for the company of 0.8:one. The company took steps to bolster the balance sheet by closing the bought deal private placement on August 1, 2023, bringing CAD36.8 million into the treasury. I also want to highlight the company has CAD 47,600,000 in restricted cash and ended the quarter with total net assets of $425,700,000 With that, I'd like to turn the call over to Matt Gille.

Speaker 1

Go ahead. Excuse me. All right. Thanks, Ryan. So we'll begin a brief presentation on the company.

Speaker 1

So looking at slide 7. No. What is I-eighty? I-eighty is a U. S.

Speaker 1

Focused gold explorer, developer and producer with all of our assets Located in the wonderful state of Nevada. Our goal is to become the 2nd largest gold producer in the United States with a pretty aggressive growth plan. And we'll be developing what we believe to be a pretty significant resource base within the state, 6 point 65,000,000 ounces of gold and over 104,000,000 ounces of silver and measured indicated and in further inferred resources of just over 8,000,000 ounces of gold and Just over 76,000,000 ounces of silver. And with that, we've got a wonderful team working to build these assets, accredited for multiple discoveries, A strong history of building mines within the state of Nevada and very strong skilled at M and A as I-eighty's founding Business was premier gold mines and we sold that business and we created IAT Gold. Looking at Slide 8, we look at where we are in the state.

Speaker 1

So this area here in North Central Nevada represents one of the most productive gold districts in anywhere on the planet really. So it's the Carlin, Battle Mountain and Getchell Trends. In this Pasha Stamps, this is the home of Nevada Gold Mines, which is the joint venture of Newmont and Barrick in Nevada. We are the 2nd largest holder of resources in this postage stamp as part of the state. And we have 2 processing facilities That will help us process our gold and base metal or polymetallic mineralization as we grow our business.

Speaker 1

So looking on Slide 9, we can talk a bit more about the processing facilities. We have to the north, the Lone Tree autoclave situated in Highway 80. And once retrofitted, it will allow us the ability to process refractory gold, which is a pretty major competitive advantage in the state As there are only 5 refractory processing facilities in the United States owned by 3 different companies and IAD is one of them. The second facility we have is the Ruby Hill facility. It's currently a vat leach plant at the Ruby Hill site and we are currently assessing Retrofit plans to turn that into a flotation plant or looking at the viability of that to process some of the very impressive polymetallic grades we are seeing being drilled at Ruby Hill.

Speaker 1

And while we are retrofitting the Lone Tree autoclave, we also secured both oxide and sulfide processing arrangements to help us bring in cash flow as we develop our hub and spoke model of developing the 3 underground mines Into the company as we build the Lone Tree autoclave. Going on to Slide 10, Looking at our resources, we are the 3rd largest resource holder in the state, and we are one of the largest holders of silver Resources in the United States with over 104,000,000 ounces of silver in the indicated category and 76,500,000 ounces in the inferred category. We are also undergoing a pretty extensive drill campaign as Ryan mentioned. We do anticipate Releasing updated mineral resource estimates on all of our projects, well, yes, on all of our projects following the current drill campaign. And we will include our initial polymetallic mineral resource estimate with the Blackjack Hilltop and FAD deposits following this drill campaign.

Speaker 1

While you're looking at the plan or how what we're trying to do in the state, we've got the Lone Tree complex, we talked about earlier, it's going to be the hub of our hub and spoke model. The goal will be to develop the Granite Creek, Ruby Hill and Cove underground mines to be Truck to the Lone Tree complex, and once that's completed, we'll look at sort of Phase 2 part of the plan, which would involve An open pit at Granite Creek. And then we're also looking at how do we process the interesting base metal and polymetallic mineralization we have at Ruby Hill. And that would be done via hopefully via the flotation plant at Ruby Hill. So with that, I'm going to pass it off to Matt.

Speaker 1

He's going to get into a bit more of the details on The assets and we'll start off with Granite Creek on Slide 12.

Speaker 2

Thanks, Matt. Thanks everyone on the call. First, let's review Granite Creek property. On Slide 13, we highlight the location of Granite Creek in Northern Nevada Along the I-eighty corridor and adjacent to the Twin Creeks processing plant, Granite Creek is the first mine that I-eighty has brought into development. Current project status includes completion of mine rehabilitation, completion of Phase 1 minutee design and proof of Concept.

Speaker 2

Installation of additional dewatering capacity with Well 6 located at the intersection of the OG and South Pacific zone. Both oxide and sulfide material is being trucked to processing facilities. A total of The upcoming milestones include: completion of current and ongoing drilling program at Granite Creek, Representing both surface and underground drilling, this drill program is primarily intended to upgrade inferred mineralization for inclusion in the upcoming feasibility study. 2nd, commence our monthly deliveries to NGM of refractory mineralization for toll processing. On Slide 14 shows a long section of the underground gold deposits at Granite Creek looking to the Northwest.

Speaker 2

First thing I'd like to point out is that we have completed mining on two levels, the 4,490 and 4,445 of the OG zone. 2nd item I'd like to highlight on this slide is the inferred ounces in the underground resource, representing 339,000 ounces of gold. This inferred resource is the material being targeted in the current infill program. On to Ruby Hill. Slide 16 shows Ruby Hill's location in Central Nevada, South Carlin.

Speaker 2

Current activities at Rubi Hill focused on 2 main activities. 1, advancing exploration and delineation of our multiple discoveries. I'll talk more about this on the next slide. And 2, advancing the studies and permits for underground development from the Archimedes pit. We have all necessary permits in hand to begin surface construction at the site of the portals.

Speaker 2

Permitting for the underground development itself is fully underway, And we've also completed a scoping study for conversion and restart of the existing gold vat leach mill to a base metal processing facility. The upcoming milestones include finalizing the permit for underground development, Completing the PEA for the gold mineralization of Ruby Hill, ongoing detailed metallurgical testing of the base metal resources and ongoing drilling for the base metal resource estimate. And not to be overlooked, the team at Ruby Hill produced and sold 1629 The relative locations of all the deposits of Ruby Hill is shown here on Slide 17. Ruby Hill continues to demonstrate just how rich and diverse of a property it is, with 6 primary deposits and now Taiki. During the Q2 of 2023, drilling at Ruby Hill was focused on advancing exploration and delineation of multiple CRD mineralized discoveries.

Speaker 2

Multiple holes were also drilled for infill in the Blackjack and FAD zones. The Type E discovery was made while infill drilling at Blackjack. A total of 13,439 feet of core and 13,275 feet of reverse circulation drilling was completed at Ruby Hill during the quarter. Additionally, 3,070 feet of core and 7,260 feet of reverse circulation drilling was completed in the quarter at our adjacent FAD Property. Slide 18.

Speaker 2

I suspect by now you've had a chance to review the press release we issued on August 2 regarding Taiki Zone. Over 45 grams per tonne gold and over 50 grams per tonne silver on the 17.5 meter interval. This discovery was made in a previously untested area along the contact of the Graveyard Flats intrusive. Data suggests a different phase of the intrusive and a different style of mineralization being high in bismuth and tellurium, Low in arsenic and with visible gold. Note that we have received permitting approval for our exploration work program, And we will be able to drill this target conventionally from pads further to the south And on to Cove.

Speaker 2

Slide 20 shows the location of Cove immediately south of Battle Mountain. The Cove deposit is expected to be the core asset in the company's hub and spoke business plan, likely the highest grade of the three properties. Activities at Cove in the 2nd quarter focus on completing the underground portal and exploration decline, including a second fault crossing that is all now complete Commencing underground infill delineation drilling of the Cove resource that's in progress and advancing studies and permitting for all for full underground development. The upcoming milestones include Completing the definition drilling program for a full feasibility study in 2024 and advancing the full mine permit. Slide 21 shows how the results we are getting from our current drilling campaign, Those holes starting in ICHU23 is reinforces and enhances what we had was previously drilled by Premier Gold, Those holes starting in PG.

Speaker 2

Underground delineation drilling continued during Q2 With 13,350 feet of core drilled yielding extremely positive results, including the previously released asset results for whole ICHU 20 three-eleven, which indicated 15.7 grams gold over 22.5 meters An 18.9 grams per tonne silver gold over 29.3 meters. To date, we have completed 22 of the planned 115 underground core holes as part of our delineation drilling program. And now our final property, LoanTree. On Slide 23, the company continues to advance the engineering studies and cost estimate for the recommissioning of the autoclave facility at Lone Tree, Working in conjunction with our partners at Hatch, during the first half of twenty twenty three, the company continued leaching the residual material on the pads as The team here is doing a fantastic job maximizing the residual leach ounces produced. Bone Tree produced and sold from its residual leach activities 2,700 ounces of gold during the quarter and 3,363 ounces of gold year to date.

Speaker 2

ESG, Slide 24. The IAT Gold team continues to engage in community outreach Jeffers, during his goodwill in the community and retaining our social license to operate. Each of our operations are in a different stage of permitting And it is imperative that we continue to interact with our stakeholders, including our employees, legislators, business partners and community members to build trust, align our mission and communicate our plans. Earlier this year, we published the inaugural Environmental, Social and Governance, or ESG, report titled Driving the Future, which highlighted IAT Gold's ESG strategies, policies and commitments to deliver leading industry practices in Nevada. Over the past year and a half, IAT Gold has focused on the 6 pillars of our ESG commitments.

Speaker 2

We are building on these priorities to achieve our 2023 ESG goals. Our team is working with to assist with data collection and building a long term business strategy for continual improvements in our path to sustainability. Thank you. Back to you, Matt.

Speaker 1

Thanks, Matt. That was great. So I think we'll open it up to questions now Given we've got some extra time here.

Operator

Thank you, sir. Ladies and gentlemen, we now begin the question and answer session. Your first question comes from Justin Chan with SCP Resource Finance.

Speaker 3

Please go ahead. Hi, guys. Hopefully, I'm off mute and you can hear me. Thanks very much for hosting the conference. To start, I was wondering if we could perhaps get an update on what your thoughts are in Granite Creek for the second half, Both from a production perspective and then where is the ramp currently and where would you like it to get to and Your current development rates, are you on track with where you'd like to get to where you want at the end of the year?

Speaker 2

All right. Thanks, Justin. So where we're sitting and we're not putting out guidance, but I can tell you where we are sitting with the evolution of Granite Creek. During the first half of the year, we encountered oxide mineralization that was unintended, unknown. And what we did is we stockpile that material until we could find the optimal processing plan.

Speaker 2

First, we tried some doing some leaching at Lone Tree and the leaching was fine, just the kinetics are really slow. So then we engaged with Some of the other operators in Northern Nevada and have found a entity that is we have engaged in an ore processing or ore purchase agreement, pardon me, Justin. So they're actually buying this ore and they're treating it themselves. So we started that in May of this year with the shipments to that partner. In the same time, we've been stockpiling the material to initiate the refractory processing at NGM as part of our Previously discussed tow milling agreement, we now have the quantities available for our first 10,000 ton test parcel And we're initiating that work as well.

Speaker 2

So what I'm trying to say in a long way there, Justin, is that we have a lot of materials. It's kind of like, let's call it work or in stockpile that we're starting to roll into the system as well as continuing to produce from the levels at Granite Creek. So anticipate without putting out guidance, anticipating continued ramp up of production in the second half of Granite Creek. So when we talk about where we are, we are exactly where we expected to be this time with the development We have 4 active levels in production. Those are sub levels.

Speaker 2

So each sub level has 3 or 4 cuts Depending on which sub level it is. So we have 4 that are actively mining right now. We've completed the first two full levels on the OG side. We were at the intersection of the FIT level to OG and this is also the approximate point where we'll turn out and start going on to the South Pacific zone. And we have put in a drill platform that we can drill the South Pacific from underground as well.

Speaker 2

So we're on track. We're slowly ramping up. As I said, we have 4 levels that are currently in production. We're developing on the 5th level And we're near the intersection with the access to the South Pacific zone.

Speaker 3

Got you. And how many more meters on that before that Turn off that piece at?

Speaker 2

It's less than 100.

Speaker 3

Okay. Excellent. So yes, you've got plenty of time between now and Right.

Speaker 2

We're still on we've talked about this before, we still anticipate being into South Pacific zones in the Q1 of next year.

Speaker 3

Right. But it sounds like you're actually well ahead

Speaker 2

of that. Just based on

Speaker 3

that Yes.

Speaker 2

I don't want to you know me, I'm cautious man. But we're certainly pleased with the progress. I'll say the ground conditions in the decline have been Brilliant. Some of the best ground I've worked in Nevada. So with all the concern we had about ground conditions have materialized.

Speaker 2

Thanks, Gordon.

Speaker 3

Well, that's I'm glad to hear that. And just one, if I can ask you for ore mining rates, because it's a bit hard to Tell right now, because as you said, there's a lot of ore being stockpiled and such. I'm just curious what you think your ore mining rates look like in Q3 and Q4?

Speaker 2

Okay. You asked great questions, Jess. I'm being very attentive here. So I don't want to put out guidance. But I will tell you that right now, We are mining just under 100 tons per day from each of our production levels.

Speaker 2

So the key there is adding more production levels. And so as we continue to add those, we will continue to have more production As you'd expect,

Speaker 1

yes.

Speaker 2

So I don't know if I answered your question. I know, but I'm being I'm trying to be cautious and not Talk about non public information.

Speaker 3

No, no, understood. I really appreciate that. So roughly 100 tons a day per level and you've got 4 levels going?

Speaker 2

More or less.

Speaker 3

Okay. Thanks, Matt. I really appreciate that. And then just one last one. I'm not sure just on the on Tyshone, it's 1st hit in the graveyard flats.

Speaker 3

I mean is that Is that gold carried over from the contact? Or is that you think there's large bodies of sulfides In the graveyard class area, I know it's the first discovery there, but I'm just curious what you see right now.

Speaker 2

I mean, look, right now, as I described it, that's about what we have right now. It's very exciting for us, right? It's very exciting for Nevada. This is the first time I've seen visible gold on one of my properties in Nevada. It's high grade.

Speaker 2

We're just starting to Dan, what that was discovered during infill drilling program at Blackjack. So look, Just another example of Ruby Hill, just the surprises you get and where this come from and oh my gosh, look at these grades. So we're really just absorbing that, Justin. And I'm going to wait for Tyler to have a chance to really understand what's going on. He's got some other holes in there that he's Analyzing right now and starting to get results back on for those as well.

Speaker 2

So just anticipate further information as we understand that deposit better.

Speaker 3

Yes, absolutely. Just maybe one last one on that. Sorry. What kind of a post is a good one for that? Sorry, sorry about that.

Speaker 2

Yes. Matt,

Speaker 3

You want to

Speaker 2

add to that? I would just

Speaker 1

add to that. Yes, so it's the current contact, but what's really exciting about this hit, Obviously, the grade is very exciting, but it's been drilled in a brand new rock unit in the camp and it's a different Type of mineralization that we see at Ruby Hill, the high sulfidation mineralization, which leads A greater conversation around what's the fertility of the camp and what's the driving force behind it also. It's just like another it's another ingredient The end potential, but what we see Ruby Hill to be, that'd be the best way to put it.

Speaker 3

Got you. And what kind of a host rock are you sitting in? Is Like a bleached buggy silica or something?

Speaker 1

It's the graveyard stock. Matt, do

Speaker 2

you know how to describe this stock? Yes. So Tyler has described it to me as it's buggy. So it's like it's been leached And then, is it redeposited? I mean, I'm kind of testing all of my geologic knowledge right now.

Speaker 2

But I'm just going to let Tyler expand on that as we get more results back from that area.

Speaker 3

Okay, great. Thanks guys. I appreciate it. I'll free up the line. Thank you very much.

Operator

Thank you. Your next question comes from John Tumazos with John Tumazos Very Independent Research. Please go ahead.

Speaker 4

Thank you. Congratulations on all the great results. In terms of having the several projects, Does it strain your management team to have success on so many fronts? And if we were to be in a little bit of a slower capital market, Which projects would you prioritize to be the 1 or 2 first to get capital versus the ones that might be That's

Speaker 1

a great question, John. And you're right, it's been a bit of a slow But market as of late, just to remind everybody on the call that we closed this financing This early this week, we do have the $100,000,000 accordion with Orion that we're actively negotiating with them on to bring in more capital. I would say for the plan to work the current plan to work, we need to be forwarding all 3 of the underground mines In order to get the loan tree autoclave up and running, Granite Creek is essential it will be cash flow neutral, cash positive in the very near future, whether it's in the end of its development life. So that's going on its own. At Cove, We are drilling off the deposit into measured indicated resources to be included into a feasibility study once done.

Speaker 1

And at Ruby Hill, we are working through studies and have the and permitting to drive a ramp underground there. So we really need all 3 of them to work in order to fill that autoclave. In the meantime, we're also able to bring in cash flow from these toll processing arrangements that we have with Nevada Gold Mines. And if you're going to ask me on a so generally speaking, we need all of them to work is the short answer. If you're asking me which one is seeing a lot more attention in terms of exploration, Ruby Hill, obviously, we're really getting a lot of very interesting results there.

Speaker 1

And I really think that's a camp that's a bit of a game changer. And maybe I can let Matt or somebody else speak The complicatedness of having the different assets, we really see them all as one sort of mining camp. So there are separate portals that would drive a central milling facility. Matt ran the Gold Rush mine and they did very similar Type of mining where they had several different underground mines, they were shipping ore out, bringing ore in. So it's really not something that is very New to Nevada in terms of how things are operated.

Speaker 1

So I would say we what we're trying to build here is, you would call it a mini Nevada gold mines and it's something that We certainly have the team to do, and I don't see it stretching us from a management perspective, but you're right there. It's a capital constrained environment. It's a good thing we've got good partners like Orion to help us manage our way through that. Hopefully that helped that answer your question.

Speaker 4

Is it an option to not restart the autoclave And have 3rd party processing or chase the lead zinc zones The carry gold and silver at Ruby Hill and the FAD deposit, There's nothing wrong with cash flow even if it comes from lead and zinc.

Speaker 1

You're absolutely right. I would say The polymetallic mineralization is not as advanced as the gold right now, but at some point that could be the case. I'm confident that we'll be able to finance our way to grow the business. What was the first question that was the second question there, John?

Speaker 4

Is it an option to just not full with the autoclave and chase the base metals Or to go for 3rd party processing.

Speaker 1

Right.

Speaker 4

Let's just say that you're mining successfully at 1 of the Underground mines, but not all three of them.

Speaker 1

So I would say, and I don't want to speak for Nevada Gold Mines, but They don't want to toll treat our ore forever would be my thinking. They certainly are great partners and they want to see us succeed and get our autoclave up and running, but I don't think they want to be a 3rd party processor for another company in perpetuity would be the way I would answer that.

Speaker 4

Is the Jared Canyon roaster good for any of your ores?

Speaker 1

Well, it's a roaster. So it does it will process refractory ore. It is not it's Further away from our projects than the Nevada Gold Mines refractory processing facilities and certainly further than our own. But yes, it is a roaster and it does have the ability to process refractory gold.

Speaker 4

It's good to hear that there's lots of options.

Speaker 1

Thanks, John. Thanks for the questions.

Operator

Thank you. There are no further questions at this time. You may proceed.

Speaker 1

Well, thanks everybody for joining us. We really hope you have got a lot of this call. And if you have any other questions, Matt, Ryan and myself are available at your convenience to call and have follow-up discussions with. So feel free to call any one of us. And we hope you have a great day.

Speaker 1

Thanks.

Operator

Ladies and gentlemen, this concludes your conference call for today. We thank you for participating and ask that you please

Powered by Quartr

Key Takeaways

  • In Q2 2023, IAT Gold produced 4,329 ounces of gold (6,678 ounces YTD) and expects higher production and sales in the second half of the year.
  • The company reported Q2 revenue of $11.3 million ($16.9 million YTD) but posted a $3.6 million mine operating loss primarily due to $4.5 million in leach pad write-downs, resulting in a net Q2 loss of $16 million ($0.06/share).
  • IAT Gold invested $11.1 million in exploration in Q2 ($20.1 million YTD), leading to three new discoveries at Ruby Hill and strong drill results, including the high-grade Taiki Zone with visible gold.
  • Liquidity was bolstered by CAD 36.8 million raised in an August private placement, ending Q2 with $19.4 million in cash, CAD 47.6 million in restricted cash, and total net assets of $425.7 million despite a current ratio of 0.8:1.
  • The company is executing a hub-and-spoke growth plan in Nevada, advancing underground development at Granite Creek, Ruby Hill, and Cove to feed the Lone Tree autoclave—one of only five US refractory processing facilities.
AI Generated. May Contain Errors.
Earnings Conference Call
i-80 Gold Q2 2023
00:00 / 00:00