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
Operational
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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
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% |
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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.
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