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Great Panther Reports Third Quarter 2020 Financial Results, Including Record Net Income of $19 Million and Closing Cash of $67 Million

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Great Panther Reports Third Quarter 2020 Financial Results, Including Record Net Income of $19 Million and Closing Cash of $67 Million

 

 

 

 

 

Great Panther Mining Limited (TSX: GPR) (NYSE-A: GPL) reports unaudited consolidated financial results for the third quarter of 2020 (Q3 2020) from its three wholly owned mines: Tucano in Brazil, and Topia and the Guanajuato Mine Complex in Mexico.

 

Great Panther President and CEO Rob Henderson commented: “We delivered a solid quarter of steady state operations at all of our mines in Q3 2020, despite the challenges of managing COVID-19. Strong gold and silver prices and continued improvement of our AISC translated to record financial results and continued to strengthen the balance sheet. We are well positioned to meet our full-year production and cost guidance while maintaining the highest health and safety protocols for our teams in Brazil, Mexico and Peru.”

 

Q3 2020 Highlights

 

Financial

 

  • Revenue of $77.0 million, representing an 8% increase over Q3 2019
  • Record net income of $18.6 million ($0.05 per share)
  • Record mine operating earnings before non-cash items1 of $42.1 million ($0.12 per share)
  • Record adjusted EBITDA1 of $34.9 million
  • Record cash flow from operating activities of $19.7 million ($0.06 per share)
  • AISC excluding corporate G&A of $1,023 per gold ounce (oz) sold1
  • Cash and cash equivalents at September 30, 2020 of $66.6 million

 

Operational

 

  • Production of 39,788 gold equivalent ounces (Au eq oz)2
                                                             
____________________________________
   
1 Throughout this news release and the accompanying Management’s Discussion and Analysis for the period ended September 30, 2020 (the “Q3 2020 MD&A”), Great Panther has included the non-Generally Accepted Accounting Principles (“non-GAAP”) performance measures cash costs per gold oz sold, cash costs per payable silver oz, all-in sustaining costs (“AISC”) per gold oz sold excluding corporate general and administrative (“G&A”) expenditures, AISC per gold oz sold, AISC per payable silver oz, mine operating earnings before non-cash items, cost of sales before non-cash items, adjusted earnings before interest, taxes depreciation and amortization (“adjusted EBITDA”), adjusted net loss and adjusted net loss per share.  Refer to the Non-GAAP Measures section of the Q3 2020 MD&A for an explanation of these measures and reconciliation to the Company’s financial results reported in accordance with International Financial Reporting Standards (“IFRS”).  As these are not standardized measures, they may not be directly comparable to similarly titled measures used by others.
2 Gold equivalent ounces 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/ounce 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/ounce 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.

 

Corporate

  • Publication of inaugural Sustainability Report

 

For Q3 2020, Great Panther reported records for mine operating earnings before non-cash items, net income, adjusted EBITDA, and cash flow from operating activities as a result of the rise in gold and silver prices. For the quarter, the average realized gold and silver prices were $1,907 and $26.07 per oz, respectively.

 

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 Q3 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.

 

Operating Highlights

 

 

  Q3 2020 Q3 2019 Change Nine months
ended
September
30, 2020
Nine months
ended
September
30, 20191
Change
Total material mined – Tucano (tonnes) 5,687,291 6,908,097 -18% 18,877,807 13,486,171 40%
Ore mined – Tucano (tonnes) 381,865 548,082 -30% 1,199,557 1,186,788 1%
Ore mined – Mexico (tonnes)2 65,505 65,372 0% 156,996 198,034 -21%
Tonnes milled – Tucano 823,353 747,498 10% 2,457,187 1,660,347 48%
Tonnes milled – Mexico (excluding custom milling)2 65,393 65,762 -1% 158,894 199,303 -20%
Tonnes milled – consolidated operations (excluding
custom milling)
888,746 813,260 9% 2,616,081 1,859,650 41%
Plant gold head grade (g/t) – Tucano 1.31 1.62 -19% 1.30 1.45 -10%
Plant head grade (g/t Ag eq) – Mexico2 311 373 -17% 316 346 -9%
Gold oz produced – Tucano 31,803 36,317 -12% 93,400 71,380 31%
Gold oz produced – consolidated operations 34,031 39,651 -14% 99,329 81,405 22%
Au eq oz produced3 39,788 47,374 -16% 113,054 102,156 11%
Gold oz sold 35,179 43,025 -18% 99,063 81,064 22%
Au eq oz sold2 40,489 50,118 -19% 112,029 100,121 12%
Cash costs per gold oz sold – Tucano3 $ 804 $ 1,063 -24% $ 839 $ 1,006 -17%
AISC per gold oz sold – Tucano3 $ 1,061 $ 1,327 -20% $ 1,209 $ 1,268 -5%
Cash costs per gold oz sold4 $ 712 $ 1,014 -30% $ 808 $ 976 -17%
AISC per gold oz sold, excluding corporate G&A3 $ 1,023 $ 1,310 -22% $ 1,221 $ 1,272 -4%
AISC per gold oz sold3 $ 1,123 $ 1,377 -18% $ 1,331 $ 1,378 -3%

 

____________________________________
   
1 The comparative data presented for the nine months ended September 30, 2019 is for the period from March 5, 2019 to September 30, 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 Q3 2020 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, mine operating earnings before non-cash items, cost of sales before non-cash items, adjusted EBITDA, and adjusted net loss.  Refer to the Non-GAAP Measures section of the Q3 2020 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.

 

 

Financial Highlights

 

(in thousands, except per oz, per share and
exchange rate figures)
Q3 2020 Q3 2019 Change Nine months
ended
September
30, 2020
Nine months
ended
September
30, 20191
Change
Revenue $ 77,019 $ 71,002 8% $ 192,097 $ 132,974 44%
Mine operating earnings before non-cash items2 $ 42,071 $ 19,208 119% $ 92,075 $ 33,427 175%
Mine operating earnings $ 31,892 $ 7,472 327% $ 61,723 $ 11,891 419%
Net income (loss) $ 18,635 $ (9,171) 303% $ (13,277) $ (62,955) 79%
Adjusted net income (loss)1 $ 12,540 $ (920) 1,463% $ 16,422 $ (14,859) 211%
Adjusted EBITDA2 $ 34,934 $ 12,909 171% $ 71,507 $ 13,255 439%
Cash flow from operating activities $ 19,661 $ 20,011 -2% $ 50,917 $ 6,002 748%
Cash and short-term deposits at end of period $ 66,648 $ 27,275 144% $ 66,648 $ 27,275 144%
Net working capital at end of period $ 24,996 $ 12,752 96% $ 24,996 $ 12,752 96%
Earnings (loss) per share – basic $ 0.05 $ (0.03) 267% $ (0.04) $ (0.24) 83%
Earnings (loss) per share – diluted $ 0.05 $ (0.03) 267% $ (0.04) $ (0.24) 83%
Average realized gold price per oz3 $ 1,907 $ 1,460 31% $ 1,751 $ 1,388 26%
Average realized silver price per oz3 $ 26.07 $ 17.68 47% $ 20.33 $ 15.98 27%
Brazilian real (BRL)/USD $ 5.38 $ 3.97 36% $ 5.08 $ 3.89 31%
Mexican peso (MXN)/USD $ 21.77 $ 19.43 12% $ 21.68 $ 19.26 13%

 

 

                                                             
   
1 The comparative data presented for the nine months ended September 30, 2019 is for the period from March 5, 2019 to September 30, 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 EBITDA, and adjusted net income (loss) throughout this news release and the accompanying Q3 2020 MD&A.  Refer to the Non-GAAP Measures section of the Q3 2020 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.
3 Average realized gold and silver prices are prior to smelting and refining charges.

 

Outlook

 

On a consolidated basis, Great Panther is on track to meet 2020 guidance of 146,000 to 158,000 gold equivalent ounces at AISC of $1,150 to $1,250 per ounce of gold sold. At the GMC, AISC for the nine months ended September 30, 2020 was $18.21 per payable silver ounce, and full-year AISC is therefore expected to exceed guidance. This is not expected to have a significant impact on consolidated AISC.

 

 

         
  Tucano1 Topia2 GMC2 Consolidated
Gold production (oz)3 120,000-130,000 120,000-130,000
Silver eq production (oz)4 1,200,000-1,300,000 1,200,000-1,300,000 2,400,000-2,600,000
Gold eq production (oz) 120,000-130,000 13,000-14,000 13,000-14,000 146,000-158,000
Cash costs ($/oz sold) $900-$1,000 $15-16 $9-10 $900-1,000
AISC ($/oz sold) $1,150-1,250 $21-22 $13-14 $1,150-1,250

 

 

                                                             
   
1 Tucano costs are presented per gold ounce sold.  Cash cost and AISC guidance for Tucano is based on an estimated BRL/USD foreign exchange rate of 5.20. Actual results will differ.
2 Topia and GMC costs are presented per silver payable ounce.  Cash cost and AISC guidance for Topia and the GMC is based on an estimated MXN/USD foreign exchange rate of 21.75.  Actual results will differ.  AISC for Topia and the GMC includes fixed costs incurred during the mandatory shutdowns in April and May of 2020 related to COVID-19.
3 Gold equivalent ounces are calculated using a 1:90 Au:Ag ratio.  Figures are rounded.
4 Silver equivalent ounces for 2020 are calculated using a 90:1 Ag:Au ratio, and ratios of 1:0.05770751 and 1:0.06798419 for the price/ounce of silver to price/pound of lead and zinc, respectively.

 

Refer to the Q3 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 unaudited condensed interim consolidated financial statements for the three and nine months ended September 30, 2020 and 2019 and the Q3 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 Q3 2020 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, and on the NYSE American.

 

Posted November 5, 2020

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