Galiano Gold Inc (GAU) 2019 Q4 法說會逐字稿

Hello, everyone, and welcome to another Asanko Gold Videocast, this time focusing on our Q4 2019 results. Please refer to our financial statements and MD&A on our website or filed on SEDAR for further details.

First, let's take a look at the Q4 results from the Asanko Gold Mine in Ghana, West Africa, our 50-50 joint venture with Gold Fields which is managed and operated by Asanko. All information related to the Asanko Gold Mine are discussed here on a 100% basis.

It was another quarter of record-breaking production and revenues as the operations continue to perform very well. During the quarter, the AGM produced 66,112 ounces of gold, and for the full year 2019, we produced 251,044 ounces of gold, exceeding our guidance of 225,000 to 245,000 ounces.

Turning to the mining operations. We completed the major pushback at the Nkran pit early in the fourth quarter. Now with this completion of the major pushback, we saw the strip ratio decrease from 5.8:1 in Q3 to 3.5:1 in Q4. The processing plant continued to perform very well with a record of 1.46 million tonnes of ore processed at an average feed grade of 1.5 gram per tonne gold, with gold recovery averaging 94%.

And from a gold sales point of view, it was another record-breaking quarter, with proceeds of $96.8 million booked during the period on gold sales of 66,095 ounces, with the realized gold price in the quarter of $1,465 an ounce.

Turning to costs. The mine's cash operating costs were $790 per ounce, with all-in sustaining costs at $969 an ounce for the quarter. For the year, the mine's cash operating costs were $776 per ounce, with all-in sustaining costs at $1,112 an ounce. And that's about 5% higher than our guidance. This was a result of higher-than-expected processing of lower-grade ore tonnes from both stockpiles and the Esaase pits, following an upper bench slippage in the western wall of the Nkran pit during the quarter. The slippage in the Nkran pit has since been cleaned up, and we do not expect a material impact on 2020.

During the quarter, the mine had strong cash flow generation with operating cash flow of $45.4 million and free cash flow of $28.9 million. With a solid balance sheet, the AGM commenced returning invested capital to the joint venture partners, distributing $20 million in December and a further $30 million was distributed early in Q1 2020. The joint venture level balance sheet at the end of December remained robust with over $55.7 million in cash, receivables and bullion.

And the life-of-mine plan remains on track to be completed during Q1, and we expect to release the results shortly and file the full 43-101 report within 45 days of the release. The updated life-of-mine plan contemplates an 8- to 10-year mine life, with gold production of 225,000 to 250,000 ounces per year, and was developed with a focus on free cash flow and limited capital investment.

Corporately, at Asanko Gold Inc., our adjusted net income was $0.9 million for the quarter, with adjusted EBITDA of $12.6 million for the period. Notably, during the quarter, the company's cash and receivables position increased to $35.5 million as of December 31 with no debt as we received our final cash payment of $10 million from Gold Fields and a further $10 million from the distribution by the joint venture.

We also continue to execute on our normal course issuer bid. And to the end of January, we've repurchased 1.8 million shares for a total value of $1.6 million. And as I mentioned earlier, the joint venture made a second distribution to the JV partners in February, and we received $15 million.

With gold prices strong and over $1,550 an ounce, we expect to be in a position to continue to build cash on our balance sheet during 2020.

For guidance for 2020, we are expecting a very similar year to last year. We anticipate gold production of 225,000 to 245,000 ounces; all-in sustaining costs of $1,000 to $1,100 per ounce; development capital spending of $24 million for the year; and exploration spending of $10 million for the year.

2019 was a transitional year for the company. We strengthened the management team, significantly bolstered the balance sheet and aligned with our joint venture partners on the future of the Asanko Gold Mine. This has prompted the decision to look to rebrand the company and to make the clear distinction between Asanko Gold Inc. and the Asanko Gold Mine. So we plan to seek shareholder approval at our upcoming AGM on April 30th to change the name of the company from Asanko Gold Inc. to [Galiano Gold Inc.] And while the company's name is changing, we will remain focused on creating a sustainable business capable of long-term value creation for our stakeholders.

So thank you very much for watching. And I look forward to our next videocast in May when I'll update you on our first quarter results.