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Great Panther Reports Fiscal Year 2020 Financial Results

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Great Panther Mining Limited (TSX: GPR) (NYSE-A: GPL) reports consolidated financial results for the year ended December 31, 2020 from its three wholly owned mines: Tucano in Brazil, and Topia and the Guanajuato Mine Complex in Mexico.

 

“For 2020, Great Panther delivered record mine operating earnings of $84 million ($0.24 per share), significantly strengthening the balance sheet, and successfully added reserves and resources through our result-driven exploration programs,” stated Rob Henderson, President and CEO. “Our teams did a tremendous job of managing the challenges of COVID-19, while reducing consolidated AISC, delivering on guidance, successfully extending the open pit mine life at Tucano, and expanding resources at GMC.  With $63 million in cash and the expectation for continued strong cash flow from operations, we are fully funded for our capital programs and our ambitious 2021 exploration programs.”

 

Fourth Quarter 2020 Financial Highlights

 

  • Mine operating earnings of $22.1 million ($0.06 per share)
  • Net income of $13.6 million ($0.04 per share)
  • Cash flow from operating activities of $18.0 million – an increase of 131% over Q4 2019
  • 23% reduction in consolidated all-in-sustaining costs (“AISC”) 1 over the fourth quarter of 2019
  • Reduced debt by $13.5 million and ended the year with $63.4 million in cash

 

FY 2020 Financial Highlights

 

  • Record mine operating earnings of $83.9 million ($0.24 per share)
  • Record adjusted EBITDA1 of $98.0 million ($0.28 per share)
  • Record cash flow from operating activities of $68.9 million ($0.20 per share)
  • Reduced consolidated AISC (excluding corporate G&A) by 11% to $1,228 per gold ounce (oz) sold
 

_______________________

1 Throughout this news release and the accompanying MD&A, Great Panther has included the non-GAAP performance measures cost per tonne milled, cash costs per gold oz sold, cash costs per payable silver oz, AISC per gold oz sold excluding corporate G&A expenditures, AISC per gold oz sold, AISC per payable silver oz, free cash-flow, mine operating earnings before non-cash items, cost of sales before non-cash items, adjusted EBITDA, and adjusted net loss and free-cash flow. Refer to the Non-GAAP Measures section of the Company’s MD&A for an explanation of these measures and reconciliation to the Company’s financial results reported in accordance with IFRS. As these are not standardized measures, they may not be directly comparable to similarly titled measures used by others and should not be considered in isolation or as a substitute for measures of performance prepared in accordance with IFRS.

 

FY 2020 Operational Highlights

 

  • Achieved production guidance and increased overall gold equivalent production to 150,051 oz
  • Extended the open pit mine life at Tucano and added significant resources at GMC
  • Published inaugural Sustainability Report “Mining for Good”
  • Achieved agreement with Nyrstar to extend bond funding for Coricancha
  • Developed and implemented enhanced safety protocols and safeguards in response to COVID-19
  • Bolstered management and governance through the appointment of a new, operations-focused CEO, strengthened Board of Directors and fit-for-purpose management team

 

Summary of Select Financial Results

 

Record mine operating earnings of $83.9 million for 2020, representing an increase of $77 million, were achieved through successful execution of operational plans and guidance, reduced costs and the benefit of higher average realized gold and silver prices, which increased to $1,785 and $21.28 for 2020 from $1,419 and $16.45 for 2019, respectively.  After accounting for G&A and exploration, evaluation and development expenditures, operating earnings for FY 2020 were $57.0 million.  Net earnings were break-even after accounting for interest and financing charges and foreign exchange and derivative losses.  The latter relates to forward contracts on the Brazilian real entered into in late 2019 and early 2020 to gain better certainty on Brazilian real operating and capital costs at a time of significantly lower gold prices and no further currency hedges have been entered into.  The foreign exchange losses are primarily non-cash and relate mainly to the translation of foreign currency-denominated borrowings and net working capital into the BRL functional currency of the Company’s operations in Brazil.

 

COVID-19 Response

 

Great Panther has developed and implemented robust COVID-19 prevention, monitoring and response plans following the guidelines of the World Health Organization and the regulatory agencies of each country in which it operates to ensure a safe work environment. These plans include mandatory medical screening and testing on arrival at site, requirements to report infection or contact with those infected, restrictions on international travel and any non-essential domestic travel, alternative work arrangements, hygiene precautions and physical distancing practices, among others. Specific areas have been prepared for the isolation, testing and care of employees showing COVID-19 symptoms. Increased cleaning and sanitizing procedures have been introduced, especially for frequently visited areas. Training campaigns to educate all employees and contractors, their families and local communities on preventive measures and hygiene best practices continue regularly.

 

Additional information regarding Great Panther’s COVID-19 response plan, preventive measures taken to date and the potential impact on operations are available in the FY 2020 Management’s Discussion and Analysis (“MD&A”), available on the Company’s website at www.greatpanther.com and on SEDAR at www.sedar.com.

 

 

Operational  Highlights

 

Q4 2020  Q4 2019  Change 2020 20191 Change
Total material mined – Tucano (tonnes) 6,605,369 5,857,185 13% 25,483,176 19,343,355 32%
Ore mined – Tucano (tonnes) 749,510 715,346 5% 1,858,037 1,876,031 -1%
Ore mined – Mexico (tonnes)2 50,868 64,843 -22% 207,864 262,877 -21%
Tonnes milled – Tucano 901,854 860,634 5% 3,359,041 2,520,981 33%
Tonnes milled – Mexico (excluding custom
milling)2
49,498 67,564 -27% 208,392 266,867 -22%
Tonnes milled – consolidated operations
(excluding custom milling)
951,352 928,198 2% 3,567,433 2,787,848 28%
Plant gold head grade (g/t) – Tucano 1.23 1.33 -8% 1.28 1.41 -9%
Plant head grade (g/t Ag eq) – Mexico2 270 350 -23% 305 347 -12%
Gold oz produced – Tucano 32,017 34,181 -6% 125,417 105,561 19%
Gold oz produced – consolidated operations 33,703 37,089 -9% 133,031 118,494 12%
Au eq oz produced3 36,997 44,697 -17% 150,051 146,853 2%
Gold oz sold 33,374 38,992 -14% 132,436 120,056 10%
Au eq oz sold3 36,549 45,625 -20% 148,579 145,746 2%
Cash costs per gold oz sold4 – Tucano $ 879 $ 1,340 -34% $ 849 $ 1,118 -24%
AISC per gold oz sold4 – Tucano $ 1,171 $ 1,681 -30% $ 1,200 $ 1,406 -15%
Cash costs per gold oz sold4 $ 905 $ 1,268 -29% $ 833 $ 1,071 -22%
AISC per gold oz sold, excluding corporate G&A4 $ 1,248 $ 1,615 -23% $ 1,228 $ 1,383 -11%
AISC per gold oz sold4 $ 1,318 $ 1,703 -23% $ 1,328 $ 1,484 -11%
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1 The comparative data presented for the year ended December 31, 2019 is for the period from March 5, 2019 to December 31, 2019, the period for which the Company owned Tucano following the acquisition of Beadell.
2 Includes Topia and the GMC.
3 Gold equivalent oz are referred to throughout this document.  For 2020, Au eq oz were calculated using a 1:90 Au:Ag ratio, and ratios of 1:0. 0006412 and 1:0. 0007554 for the price/oz of gold to price/pound of lead and zinc, respectively, and applied to the relevant metal content of the concentrates produced, expected to be produced, or sold from operations. The ratios are reflective of average metal prices for 2020. Comparatively, Au eq oz for 2019 were calculated using a 1:80 Au:Ag ratio, and ratios of 1:0.000795 and 1:0.00102258 for the price/oz of gold to price/pound of lead and zinc, respectively, and applied to the relevant metal content of the concentrates produced, expected to be produced, or sold from operations. The ratios are reflective of average metal prices for 2019.
4 Throughout this news release and the accompanying MD&A, Great Panther has included the non-GAAP performance measures cash costs per gold oz sold, cash costs per payable silver oz, AISC per gold oz sold excluding corporate G&A expenditures, AISC per gold oz sold, AISC per payable silver oz, mine operating earnings before non-cash items, adjusted EBITDA adjusted net income (loss), and free-cash flow throughout this news release and the accompanying Company’s MD&A.  Refer to the Non-GAAP Measures section of the Company’s MD&A for an explanation of these measures and reconciliation to the Company’s financial results reported in accordance with IFRS. As these are not standardized measures, they may not be directly comparable to similarly titled measures used by others and should not be considered in isolation or as a substitute for measures of performance prepared in accordance with IFRS.

 

 

Financial Highlights

 

(in thousands, except per oz, per share and
exchange rate figures)
Q4 2020 Q4 2019 Change 2020 20191 Change
Revenue $ 68,708 $ 65,679 5% $ 260,805 $ 198,653 31%
Mine operating earnings before non-cash items2 $ 32,433 $ 8,447 284% $ 124,508 $ 41,874 197%
Mine operating earnings $ 22,144 $ (5,046) n/a $ 83,867 $ 6,845 1,125%
Net income (loss) $ 13,611 $ (28,068) n/a $ 334 $ (91,022) n/a
Adjusted net income (loss)2 $ 6,102 $ (32,403) n/a $ 22,524 $ (47,260) n/a
Adjusted EBITDA2 $ 26,513 $ (5,338) n/a $ 98,019 $ 7,919 1,138%
Free cash-flow2 $ 9,057 $ 2,405 277% $ 26,941 $ (12,123) n/a
Cash flow from operating activities $ 17,972 $ 7,785 131% $ 68,889 $ 13,787 400%
Cash and short-term deposits at end of period $ 63,396 $ 36,970 71% $ 63,396 $ 36,970 71%
Net working capital at end of period $ 31,396 $ 12,815 145% $ 31,396 $ 12,815 145%
Earnings (loss) per share – basic $ 0.04 $ (0.09) -143% $ 0.00 $ (0.33) -100%
Earnings (loss) per share – diluted $ 0.04 $ (0.09) -143% $ 0.00 $ (0.33) -100%
Average realized gold price per oz3 $ 1,884 $ 1,485 27% $ 1,784 $ 1,419 26%
Average realized silver price per oz3 $ 25.06 $ 17.71 42% $ 21.28 $ 16.45 29%
Brazilian real (BRL)/USD $ 5.40 $ 4.12 31% $ 5.16 $ 3.94 31%
Mexican peso (MXN)/USD $ 20.59 $ 19.27 7% $ 21.41 $ 19.26 11%

 

_____________________________
1 The comparative data presented for the year ended December 31, 2019 is for the period from March 5, 2019, to December 31, 2019, the period for which the Company owned Tucano following the acquisition of Beadell.
2 The Company has included the non-GAAP performance measures mine operating earnings before non-cash items, adjusted net income (loss), adjusted EBITDA, and free cash-flow throughout this news release and the accompanying Company’s MD&A.  Refer to the Non-GAAP Measures section of the Company’s MD&A for an explanation of these measures and reconciliation to the Company’s financial results reported in accordance with IFRS. As these are not standardized measures, they may not be directly comparable to similarly titled measures used by others and should not be considered in isolation or as a substitute for measures of performance prepared in accordance with IFRS.
Average realized gold and silver prices are prior to smelting and refining charges.

 

Outlook

 

In 2021, consolidated gold equivalent production from the Tucano, Topia and GMC mines is expected to be 135,000 to 150,000 Au eq oz, with the second half of 2021 expected to account for a least 55% of the annual production guidance. The mine plan for Tucano also reflects more stripping in the first half of 2021 and therefore AISC is expected to be higher than the annual guidance in the first half of 2021. The Mineral Reserve and Resource update for Tucano announced in December has allowed for an extension of the life of the Urucum and Taperaba pits that have been mined at Tucano over the last several years, and the latest mine plan will see a transition to mining higher grades in 2022 and 2023.

 

These production and cost guidance estimates are forward-looking statements and information. They should be read in conjunction with the Cautionary Statement on Forward-Looking Statements section at the end of this news release. The Company may revise guidance during the year to reflect actual results to date and those anticipated for the remainder of the year.

 

Readers are cautioned that there are no current estimates of Mineral Reserves for any of the Company’s Mexican mines. As a result, there may be increased uncertainty and risks of achieving any particular level of recovery of minerals from the Company’s mines or the costs of such recovery. Mineral Resources that are not Mineral Reserves have no demonstrated economic or technical viability. These risks could have a material adverse impact on the Company’s ability to generate anticipated revenues and cash flows to fund operations and ultimately achieve or maintain profitable operations.

 

 

2021 Production Guidance

 

Tucano Mexico Consolidated
Gold eq production (oz)1 110,000-120,000 25,000-30,000 135,000-150,000
Silver production (k oz) 1,500-1,600 1,500-1,600
Gold production (oz) 110,000-120,000 8,000-10,000 118,000-130,000
AISC ($/Au oz sold)2 $1,350-1,450 N/A $1,350-1,450
Exploration (operating mines) ($ millions) $ 8.4 $ 3.0 $ 11.4
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1 Gold equivalent ounces for 2021 are calculated using a 1:85 ratio of the silver price to the gold price, which is representative of the average ratio for the respective metal prices for 2020, and approximate ratios for the price/ounce of gold to price/pound of lead and zinc, respectively, for 2020.
2 AISC refers to all-in sustaining cost per gold ounce sold, excluding corporate G&A expenditures, and reflects the AISC at the Company’s operating mines. The calculation starts with cash cost net of by-product revenue and adds accretion of reclamation provisions, lease liability payments, sustaining EE&D expenses, and sustaining capital expenditures for the operating mines. Sustaining expenditures are those costs incurred to sustain and maintain existing assets at current productive capacity and constant planned levels of productive output. AISC is a non-GAAP measure. These measures are widely used in the mining industry as a benchmark for performance, but do not have a standardized meaning as prescribed by IFRS as an indicator of performance, and may differ from methods used by other companies with similar descriptions and should not be considered in isolation or as a substitute for measures of performance prepared in accordance with IFRS. Refer to the Company’s Management Discussion and Analysis for the period ended September 30, 2020 for a reconciliation of AISC to the Company’s financial statement measures. The Company’s AISC guidance assumes a Brazilian real to US dollar exchange rate of 4.75. Actual results may differ.
Guidance assumes no COVID-19 related shutdowns, ongoing geotechnical control/stability of Urucum Central South (“UCS”) pit and the Company’s ability to successfully access the mineralization in the UCS pit without additional costs or interruption, and permitting of additional tailings storage capacity at the GMC.

 

Refer to the Company’s FY 2020 MD&A for more details of the financial results and for reconciliations of the Company’s non-GAAP performance measures to the nearest GAAP measure. The full version of the Company’s consolidated financial statements for the year ended December 31, 2020 and 2019 and the Company’s FY 2020 MD&A can be viewed on the Company’s website at www.greatpanther.com or on SEDAR at www.sedar.com. All financial information is prepared in accordance with IFRS, except as noted in the Non-GAAP Measures section of the Company’s MD&A.

 

ABOUT GREAT PANTHER

 

Great Panther is a growing gold and silver producer focused on the Americas.  The Company owns a diversified portfolio of assets in Brazil, Mexico and Peru that includes three operating gold and silver mines, four exploration projects, and an advanced development project.  Great Panther is actively exploring large land packages in highly prospective districts and is pursuing acquisition opportunities to complement its existing portfolio.  Great Panther trades on the Toronto Stock Exchange trading under the symbol GPR, and on the NYSE American under the symbol GPL.

 

Posted March 4, 2021

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