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Robex Reports Q3 2024 Results

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Robex Reports Q3 2024 Results

 

Robex Resources Inc. (TSX-V: RBX) today reports operational and financial results for the third quarter ending September 30th, 2024.

Matthew Wilcox, Managing Director: “Kiniero is advancing quickly with the key members of the construction team now mobilized. Key workstreams are running in parallel to meet our first pour target in Q4 2025. We will be releasing frequent updates to the market as the construction progresses. We are maintaining our safety record with now 678 days LTI free for the Group despite a significant ramp-up on site in Guinea. At Nampala, production and costs are in line with our budget to match our 2024 guidance.”

 

Highlights:

 

FINANCING – STRONG BALANCE SHEET (FIRST NINE MONTHS OF 2024)

 

  • Net debt (cash) position stood at $(32.3) million as of September 30, 2024.
  • Operating income was $33.3 million, representing an increase of 26.6% compared to $26.3 million for the same period in 2023, attributable to an improving gold price environment and cost optimization.
  • Operating cash flow remained positive at $25.5 million, a decrease of 26% compared to $34.4 million in 2023.

 

KINIERO – ON TRACK FOR Q4 2025

 

  • Project Update: project engineering 38.5% complete. Tailing Storage Facility feasibility drawings finalized and clearing, grubbing and topsoil has commenced. Primary crushing area concrete commenced, CIL ring beams, poured and 48 out 50 mechanical equipment packages issued for tender, 15 have been technically evaluated and are ready for order placement. Ball Mill Fabrication is progressing on schedule with delivery expected in March 2025. The project remains on track to pour first gold in Q4 2025. The formal decision to proceed with construction for the revised site development program is expected to be made in the coming months.
  • Feasibility Study: Updated resources will be published in Q4 and the full feasibility alongside the listing on the ASX early into the new year.
  • In-fill drilling: In-fill program at Mansounia is completed and is being incorporated to the updated resources.

 

NAMPALA – COSTS DOWN 

 

  • Safety of operations: Nampala accumulated is Loss Time Injury (“LTI”) free since 2020 with 1 million man hours worked.

    Gold production for the first nine months of 2024 reached 35,752 ounces, representing a 5% decrease compared to the same period in 2023. The All-In Sustaining Cost (“AISC“) per ounce of gold sold1 was $1,221, down 4% from the same period in 2023, with lower strip ratio of 1.8x (vs 2.9x in 2023) compensating the 2.2% recovery loss.

CURRENCY

Unless otherwise indicated, all references to “$” in this news release are to Canadian dollars. References to “US$” in this news release are to U.S. dollars.

OPERATIONAL AND FINANCIAL SUMMARY

  Unit Nine-month Ending 
September 30th
   
SAFETY 2024   2023   Variation  
Number of hours of work without lost time injury Days 678   249   NA  
         
MINING        
Ore mined kt 1,708    1,605   6.4 %
Waste mined kt 3,021   4,684   -35.5 %
Operational stripping ratio x 1.8    2.9   -39.4 %
         
PROCESSING        
Ore processed kt 1,569    1,682   -6.7 %
Head grade g/t 0.81   0.77   4.7 %
Recovery % 88.0   90.2   -2.2 pts
Gold produced oz 35,752    37,520   -4.7 %
Gold sold oz 37,857    37,830   0.1 %
         
UNIT COST OF PRODUCTION        
Total cash cost per ounce of gold sold(1) $/t 870   880   -1.2 %
All-in sustaining cost (AISC) per ounce of gold sold(1) $/oz 1,221   1,273   -4.1 %
         
INCOME        
Gold sales $000s 116,559   98,519   18.3 %
Operating income $000s 33,322   26,329   26.6 %
Net income (loss) $000s (9,805 ) 18,672   -152.5 %
         
CASH FLOWS        
Cash flows from operating activities $000s 25,467   34,427   -26.0 %
Cash flows from investing activities $000s (64,758 ) (56,069 ) 15.5 %
Cash flows from financing activities $000s 97,738   37,913   157.8 %
Cash increase $000s 58,235   14,531   300.8 %
         
FINANCIAL POSITION   As at 30th
Sept. 2024
  As at 31st
Dec. 2023
   
Cash, End of Period (“EoP“) $000s 70,457   12,222   476.5 %
Net debt(1) EoP $000s -32,261   46,629   -169.2 %

QUARTERLY REVIEW

In the third quarter of 2024, gold production reached 10,031 ounces, representing a 25% decrease compared to 13,375 ounces produced in the third quarter of 2023. This decline was mainly due to extended maintenance shutdowns for critical equipment. Gold sales generated revenues of $38.1 million, marking a 5.2% increase compared to the same period in 2023, driven by a higher realized average gold price of $3,271 per ounce, up from $2,568 in 2023. However, the number of ounces sold decreased from 14,090 to 11,635, reflecting the drop in production. Although 472.58 ounces from the last September shipment, sold in early October, could have helped narrow this gap.

Mining operating income for the third quarter amounted to $15.5 million, a 15.7% decrease compared to 2023. This drop was due to higher depreciation charges following the revision of the Nampala mine’s estimated lifespan, now projected until June 2026. Despite this, operating income remained stable at $10.1 million, supported by a 30.3% reduction in administrative expenses.

Net income for the third quarter reached $22.5 million, compared to $6.8 million for the same period in 2023. This variance was primarily due to a positive $12.6 million change in the fair value of warrants, reducing financial liabilities. Additionally, the company recorded a $9.6 million gain from reversing a tax provision following the finalization of an agreement with the Government of Mali. However, these gains were partially offset by a $5.6 million write-off of deferred financing costs.

NINE MONTHS REVIEW

For the nine-month period ending September 30, 2024, gold production totaled 35,752 ounces, a 4.7% decline compared to 37,520 ounces produced in the same period in 2023. Gold sales revenue reached $116.6 million, an 18.3% increase, attributed to higher average selling prices per ounce. The number of ounces sold remained stable at 37,857 in 2024 compared to 37,830 in 2023.

For the nine months ending September 30, 2024, mining operating income was $50.7 million, reflecting a 2.3% increase compared to the same period in 2023. However, this period resulted in a net loss of $9.8 million, compared to net income of $18.7 million in 2023. This loss was primarily due to the write-off of deferred financing costs of $5.6 million, warrant issuance costs of $4.1 million, and a $3.1 million foreign exchange loss. Additionally, the tax expense for the nine-month period reached $35.4 million, compared to $6.3 million in 2023, reflecting the impacts of the tax agreement with the Government of Mali.

CASH FLOWS

Cash flows from operating activities were negative at $(7.9) million in Q3 2024, due to the reduction in accounts payable, which decreased from $64.2 million as of June 30, 2024, to $31.7 million as of September 30, 2024. This reduction is directly related to the settlement of the tax contingency provision as part of the agreement with the Government of Mali.

Management, advised by TerraFranca, is in advanced negotiations to secure up to $175.7 million in new credit facilities from international lenders. These funds are intended to support strategic initiatives, including the development of the Guinea project.

LIQUIDITY AND BALANCE SHEET 

The Group’s cash position increased from $12.2 million as of December 31, 2023, to $70.5 million as of September 30, 2024.

Net debt1 stood at $(32.3) million as of September 30, 2024, decreasing from $46.6 million as of December 31, 2023.

SUMMARY OF Q3 2024 FINANCIAL RESULTS

  Three-month Ending
September 30th
  Nine-month Ending
September 30th
 
  2024   2023   2024   2023  
Gold production (ounces) 10,031    13,375   35,752    37,520  
Gold sales (ounces) 11,635   14,090   37,857    37,830  
  $   $   $   $  
MINING        
Revenues – gold sales 38,058,745    36,188,940   116,559,300    98,518,580  
Mining expenses (9,921,990 ) (10,679,996 ) (28,654,262 ) (30,239,337 )
Mining royalties (1,343,069 ) (1,124,569 ) (4,273,513 ) (3,049,434 )
Depreciation of property, plant and equipment and amortization of intangible assets (11,327,654 ) (6,044,994 ) (32,883,792 ) (15,624,432 )
MINING INCOME 15,466,032    18,339,381   50,747,733    49,605,377  
OTHER EXPENSES        
Administrative expenses (5,182,588 ) (7,438,676 ) (16,945,663 ) (22,152,380 )
Exploration and evaluation expenses (137,892 ) (186,779 ) (176,375 ) (312,245 )
Stock option compensation cost —    (422,674 ) —    (422,674 )
Depreciation of property, plant and equipment and amortization
of intangible assets
(154,682 ) (82,486 ) (414,498 ) (248,073 )
Write-off of property, plant and equipment     —    (8,933 )
Other income (expenses) 74,062    (124,196 ) 110,923    (132,492 )
OPERATING INCOME 10,064,932    10,084,570   33,322,120    26,328,580  
FINANCIAL EXPENSES        
Financial costs (465,829 ) (671,495 ) (1,612,572 ) (2,099,523 )
Foreign exchange gains (losses) (3,092,812 ) (459,146 ) (3,146,571 ) 289,007  
Change in the fair value of share purchase
warrants
12,637,435   352,877   7,180,468    410,890  
Purchase warrant issuance expenses (49,307 )   (4,080,750 )  
Write-off of deferred financing fees (5,592,046 )   (5,592,046 )  
Expense related to extinguishment of the Matured Bridge Loan     (439,789 )  
INCOME BEFORE INCOME TAXES 13,502,373   9,306,806   25,630,860   24,928,954  
Income tax recovery (expense) 8,959,835    (2,473,353 ) (35,436,301 ) (6,257,355 )
NET INCOME (LOSS) 22,462,208    6,833,453   (9,805,441 ) 18,671,599  
ATTRIBUTABLE TO COMMON SHAREHOLDERS:         
Net income (loss) 20,286,302    6,243,934   (10,485,231 ) 17,215,106  
Basic earnings (loss) per share 0.134   0.069    (0.093 ) 0.190   
Diluted earnings (loss) per share 0.134   0.069    (0.093 ) 0.190   
Adjusted net income(1) 16,333,725    6,772,877   34,580,627    16,946,816  
Adjusted net income per share(1) 0.108    0.075    0.307    0.187   
CASH FLOWS        
Cash flows from operating activities (7,920,101 ) 10,169,153   25,466,864    34,427,360  
Cash flows from operating activities per
share(1)
(0.053 ) 0.112    0.226    0.381   

(1)   Non-IFRS financial measure, non-IFRS ratio or supplementary financial measure. Please refer to the “Non-IFRS and Other Financial Measures” section of this press release for definitions of these measures and their reconciliation to the most directly comparable IFRS measure, as applicable.

 

DETAILED INFORMATION

We strongly recommend that readers consult Robex’s Management’s Discussion and Analysis and Consolidated Financial Statements for the third quarter ended September 30th, 2024, which are available on Robex’s website at www.robexgold.com and under the Company’s profile on SEDAR+ at www.sedarplus.ca for a more complete discussion of the Company’s operational and financial results.

NON-IFRS AND OTHER FINANCIAL MEASURES

The Company’s consolidated financial statements for the period ended September 30th, 2024, available under the Company’s profile on SEDAR+ at www.sedarplus.ca, are prepared in accordance with IFRS Accounting Standards as issued by the International Accounting Standards Board (IASB).

However, the Company also discloses the following non-IFRS financial measures, non-IFRS financial ratios and supplementary financial measures in this news release, for which there is no definition in IFRS: adjusted net income attributable to common shareholders, all-in sustaining cost and net debt (non-IFRS financial measures); adjusted net income attributable to common shareholders per share, all-in sustaining cost per ounce of gold sold (non-IFRS ratios); and cash flow from operating activities per share, average realized selling price per ounce of gold sold and total cash cost per ounce of gold sold (supplementary financial measures). The Company’s management believes that these measures provide additional insight into the Company’s operating performance and trends and facilitate comparisons across reporting periods. However, the non-IFRS measures disclosed in this news release do not have a standardized meaning prescribed by IFRS, they may not be comparable to similar measures presented by other companies. Accordingly, they are intended to provide additional information to investors and other stakeholders and should not be considered in isolation from, confused with or construed as a substitute for performance measures calculated according to IFRS.

These non-IFRS financial measures and ratios and supplementary financial measures and non-financial information are explained in more detail below and in the “Non-IFRS and Other Financial Measures” section of the Company’s Management’s Discussion and Analysis for the period ended September 30th, 2024, which is incorporated by reference in this news release, filed with securities regulatory authorities in Canada, available under the Company’s profile on SEDAR+ at www.sedarplus.ca and on the Company’s website at www.robexgold.com. Reconciliations and calculations between non-IFRS financial measures and the most comparable IFRS measures are set out below in the “Reconciliations and Calculations” section of this news release.

RECONCILIATIONS AND CALCULATIONS

Total cash cost (per ounce of gold sold)

Total cash cost per ounce of gold sold is a supplementary financial measure. This measure is calculated by dividing the sum of operating expenses and mining royalties by the number of ounces of gold sold. These expenses include:

  • Operating and maintenance supplies and services;
  • Fuel;
  • Reagent;
  • Employee benefits expenses;
  • Change in inventory;
  • Less: production costs capitalized as stripping costs; and
  • Transportation costs.

Management uses this ratio to establish the profitability of mining operations, considering operating expenses in relation to the number of ounces of gold sold.

  Three-month periods 
ended September 30th
Nine-month periods 
ended September 30th
  2024 2023 2024 2023
Ounces of gold sold 11,635 14,090 37,857  37,830
(in dollars)        
Mining expenses 9,921,990  10,679,996 28,654,262  30,239,337
Mining royalties 1,343,069  1,124,569 4,273,513  3,049,434
Total cash cost 11,265,059  11,804,565 32,927,775  33,288,771
Total cash cost (per ounce of gold sold) 968  838 870 880


All-in sustaining cost (AISC) (per ounce of gold sold)

AISC is a non-IFRS financial measure. AISC includes cash operating costs plus sustaining capital expenditures and stripping costs per ounce of gold sold. The Company has classified its sustaining capital expenditures which are required to maintain existing operations and capitalized stripping costs. AISC is a broad measure of cash costs, providing more information on total cash outflows, capital expenditures and overhead costs per unit. It is intended to reflect the costs associated with producing the Company’s principal metal, gold, in the short term and over the life cycle of its operations.

AISC per ounce of gold sold is a non-IFRS ratio. AISC per ounce of gold sold is calculated by adding the total cash cost, which is the sum of mining operating expenses and mining royalties, to sustaining capital expenditures and then dividing by the number of ounces of gold sold. The Company reports AISC per ounce of gold sold to provide investors with information on the main measures used by management to monitor the performance of the Nampala Mine in commercial production and its ability to generate a positive cash flow.

The table below provides a reconciliation of AISC for the current period and the comparative period to the most directly comparable financial measure in the financial statements: “mining operating expenses”.

  Three-month periods 
ended September 30th
Nine-month periods 
ended September 30th
  2024 2023 2024 2023
Ounces of gold sold 11,635 14,090 37,857  37,830
         
(in dollars)        
Mining expenses 9,921,990  10,679,996 28,654,262  30,239,337
Mining royalties 1,343,069  1,124,569 4,273,513  3,049,434
Total cash cost  11,265,059  11,804,565 32,927,775  33,288,771
Sustaining capital expenditures 4,778,712  3,459,494 13,297,417  14,875,365
All-in sustaining cost 16,043,772  15,264,059 46,225,193  48,164,137
All-in sustaining cost (per ounce of gold sold) 1,379  1,083 1,221  1,273


Net debt

Net debt is a non-IFRS financial measure that represents the total amount of bank indebtedness, including lines of credit and long-term debt, as well as lease liabilities, less cash at the end of a given period. Management uses this metric to analyze the Company’s debt position and assess the Company’s ability to service its debt.

Net debt is calculated as follows:

  As at September 30th, 2024   As at December 31st, 2023  
  $   $  
Lines of credit 4,701,768    4,953,133  
Bridge loan 26,252,420    45,530,538  
Long-term debt   159,936  
Lease liabilities 7,241,934    8,206,916  
Less: Cash (70,457,226 ) (12,221,978 )
NET DEBT (32,261,104 ) 46,628,545  

The following table presents a reconciliation to the most directly comparable financial measure in the financial statements, i.e., total liabilities less current assets, for the current and comparative period.

  As at September 30th, 2024   As at December 31st, 2023  
  $   $  
TOTAL LIABILITIES 130,477,488   82,918,032  
Less:    
Accounts payable (31,702,638 ) (19,664,396 )
Warrants (57,034,300 ) (1,340,850 )
Environmental liabilities (1,457,203 ) (1,168,859 )
Other long-term liabilities (2,087,226 ) (1,893,404 )
  38,196,122    58,850,523  
CURRENT ASSETS 107,104,974   38,967,942  
Less:    
Inventory (19,081,011 ) (15,620,800 )
Accounts receivable (15,379,068 ) (6,733,583 )
Prepaid expenses (736,848 ) (465,795 )
Deposits paid (1,129,490 ) (1,345,035 )
Deferred financing fees (321,331 ) (2,580,751 )
  70,457,226    12,221,978  
NET DEBT (32,261,104 ) 46,628,545  

Adjusted net income attributable to common shareholders and adjusted net income attributable to common shareholders per share

Adjusted net earnings attributable to common shareholders per share is a non-IFRS ratio calculated by dividing adjusted net earnings available to common shareholders by the basic weighted average number of common shares issued and outstanding. The Company uses this measure as an indicator of the financial performance of the Company’s activities, and it allows the Company to present adjusted net earnings attributable to Robex shareholders. Share price divided by adjusted net earnings attributable to common shareholders per share allows investors to compare the Company’s valuation to that of its peers.

The following table reconciles adjusted net earnings attributable to common shareholders and adjusted net earnings attributable to common shareholders per share for the current and comparative periods to the most directly comparable financial measure in the financial statements, i.e., “Basic and diluted net earnings attributable to common shareholders.” This reconciliation is provided on a consolidated basis. The following table reconciles adjusted net earnings attributable to common shareholders for the current period and the comparative period to the most directly comparable financial measure in the financial statements, i.e., “Basic and diluted net income attributable to common shareholders.” This reconciliation is provided on a consolidated basis.

  Three-month periods 
ended September 30th
  Nine-month periods 
ended September 30th
 
   2024   2023    2024   2023  
(in dollars)        
Basic and diluted net earnings attributable to common shareholders 20,286,302   6,243,934   (10,485,231  ) 17,215,106  
Stock option compensation cost —    422,674   —    422,674  
Foreign exchange gains (losses) 3,092,812    459,146   3,146,571    (289,007 )
Change in the fair value of share purchase warrants (12,637,435 ) (352,877 ) (7,180,468 ) (410,890 )
Write-off of property, plant and equipment     —    8,933  
Provision for tax adjustments in prior years     43,067,920    
Write-off of deferred financing costs 5,592,046     5,592,046    
Expense related to extinguishment of the Matured Bridge Loan     439,789    
Adjusted net income attributable to common shareholders 16,333,725    6,772,877   34,580,627    16,946,816  
Basic weighted average number of shares outstanding 150,837,400    90,393,339   112,734,134    90,383,887  
Adjusted basic earnings per share (in dollars) 0.108   0.075   0.307   0.187  

Cash flows from operating activities (per share)

Cash flow from operating activities per share is a supplementary financial measure. It consists of cash flow from operating activities divided by the basic weighted average number of shares outstanding. This supplementary financial measure enables investors to understand the Company’s financial performance on the basis of cash flows generated by operating activities.

For the three-month period ended September 30, 2024, cash flows from operating activities stood at $(7,920,101) and the basic weighted average number of shares outstanding was 150,837,400, for a per-share amount of $(0.053). In comparison, for the three-month period ended September 30, 2023, cash flows from operating activities stood at $10,169,153, and the basic weighted average number of shares outstanding was 90,393,339, for a per-share amount of $0.112.

For the nine-month period ended September 30, 2024, cash flows from operating activities stood at $25,466,864 and the basic weighted average number of shares outstanding was 112,734,134, for a per-share amount of $0.226. In comparison, for the nine-month period ended September 30, 2023, cash flows from operating activities stood at $34,427,360, and the basic weighted average number of shares outstanding was 90,383,887, for a per-share amount of $0.381.

Average realized selling price (per ounce of gold sold)

Average realized selling price per ounce of gold sold is a supplementary financial measure. It is composed of gold sales revenue divided by the number of ounces of gold sold. This measure provides management with a better understanding of the average realized price of gold sold in each financial reporting period, net of the impact of non-gold products, and it allows investors to understand the Company’s financial performance based on the average proceeds realized from the sales of gold production during the reporting period.

Posted December 2, 2024

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