Production for 2022 expected to be within guidance range
with steady state at Tucano to be achieved in Q4; inflationary
pressures and necessary capital expenditures contributing to
adjusted cost guidance
(All dollar amounts expressed in US dollars unless otherwise
noted)
TSX: GPR | NYSE
American: GPL
VANCOUVER, BC, Aug. 3, 2022
/PRNewswire/ - Great Panther Mining Limited (TSX: GPR) (NYSE-A:
GPL) ("Great Panther" or the "Company") announces consolidated
financial results for the three months ended June 30, 2022, from the Tucano Gold Mine
("Tucano") in Brazil and the
Topia mine in Mexico.
"Inflationary pressures and the necessary acceleration of
certain capital programs affected our financial results this
quarter, however as previously guided we continue to expect
improvements in the coming quarters as we return to a normalized
rate of production in the second half," stated Alan Hair, Chair and Interim CEO. "We expect the
ramp up to steady-state production to continue through the third
quarter and regular run rate to be achieved by the fourth quarter.
From a cost perspective, we have had to adjust our guidance for the
year, given the aforementioned factors, and are adapting our plans
for capital expenditures to preserve capital where possible while
focusing our efforts on improving operations and efficiencies at
Tucano."
Selected Q2 2022 Financial Highlights from Continuing
Operations1
- Gold production of 16,629 ounces compared with 20,696 ounces in
the second quarter of 2021 ("Q2 2021")
- Cash costs of $1,575 per gold
ounce sold compared with $1,617 in Q2
2021
- All-in-sustaining-costs ("AISC")2, excluding
corporate G&A, of $3,080 per gold
ounce sold compared with $2,214 for
the same period in 2021
- Revenue of $30.0 million compared
with $39.0 million in the same period
in 2021
- Mine operating income of $0.1
million compared with a loss of $2.7
million in Q2 2021
- EBITDA2 of negative $5.0
million compared with EBITDA of negative $0.9 million for Q2 2021
- Net loss of $12.1 million
compared with net loss of $8.7
million in Q2 2021
|
________________________
|
|
1
|
On June 29, 2022, Great
Panther announced an agreement to sell 100% of the Company's
Mexican subsidiary Minera Mexicana El Rosario S.A. de C.V. ("MMR"),
which holds the Guanajuato Mine Complex (the "GMC"), the Topia
mine, and the El Horcón and Santa Rosa projects, all located in
Mexico. The transaction is expected to close in 2022. In accordance
with IFRS 5, all results associated with MMR and its operation have
been classified as Assets Held for Sale.
|
|
2
|
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 (loss) before non-cash
items, and EBITDA. 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.
|
Selected Q2 2022 Non-Financial Highlights
- Reported updated mineral reserve and mineral estimate for
Tucano that demonstrated replacement of 2021 mining depletion and
an increase of 1.5 years to the open pit mine life
- Completed a resource conversion drill program for the Urucum
North ("URN") underground project and commenced an updated resource
estimate, engineering and metallurgical studies, as well as
permitting with the State Environmental Agency, SEMA
- Announced an agreement to sell the Guanajuato Mine Complex and
Topia mine in Mexico completing the pivot to gold and
refining the Company's focus on gold in Brazil
- Continued regional target definition, validation and
prioritization for a regional drill program at Tucano, which is
expected to begin in the third quarter
Financial Highlights
|
(in thousands,
except per oz, per share and exchange rate figures)
|
Q2 2022
|
Q2 2021
|
Six months
ended June
30, 2022
|
Six months
ended June
30, 2021
|
|
Continuing
Operations
|
|
|
|
|
|
Revenue
|
$ 30,022
|
$
39,043
|
$ 57,194
|
$ 79,566
|
|
Mine operating earnings
before non-cash items1
|
$
4,674
|
$
4,254
|
$
5,642
|
$ 22,088
|
|
Mine operating earnings
income (loss)
|
$
82
|
$
(2,656)
|
$ (2,941)
|
$
7,234
|
|
EBITDA1
|
$ (5,029)
|
$
(893)
|
$ (4,471)
|
$
8,886
|
|
Net
loss
|
$
(12,052)
|
$
(8,707)
|
$
(16,979)
|
$ (8,504)
|
|
Loss per share – basic
and diluted
|
$
(0.26)
|
$
(0.24)
|
$
(0.46)
|
$
(0.29)
|
|
Cash flows from
operating activities
|
$
6,889
|
$
4,274
|
$
(986)
|
$
4,833
|
|
Cash and cash
equivalents at end of period
|
$ 21,058
|
$
35,229
|
$ 21,058
|
$ 35,229
|
|
Borrowings at end of
period
|
$ 43,389
|
$
26,317
|
$ 43,389
|
$ 26,317
|
|
Net working capital at
end of period
|
$
(39,726)
|
$
9,773
|
$
(39,726)
|
$
9,773
|
|
Average realized gold
price per oz2
|
$
1,865
|
$
1,815
|
$
1,874
|
$
1,785
|
|
Brazilian real
(BRL)/USD
|
4.93
|
5.30
|
5.05
|
5.38
|
|
Discontinued
Operations
|
|
|
|
|
|
Net loss
|
$
(276)
|
$
(1,350)
|
$ (4,234)
|
$ (1,884)
|
|
Cash flows from
operating activities
|
$
1,389
|
$
2,231
|
$
672
|
$
4,001
|
|
|
_________________________________
|
|
1
|
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 (loss) before non-cash
items, and EBITDA. Refer to the Non-GAAP Measures section of the
Company's MD&A for the period ending June 30,2022, 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.
|
|
2
|
Average realized gold
and silver prices are prior to smelting and refining
charges.
|
Summary of Select Financial Results
For Q2 2022, the Company recorded a net loss of $12.3 million compared with a net loss of
$10.1 million for Q2 2021. Lower
metal sales volumes due to low production, offset partially by
higher realized prices for gold, resulted in a decrease in revenue
to $30.0 million from $39.0 million for Q2 2021. Mine operating income
for Q2 2022 was $0.1 million compared
with a mine operating loss of $2.7
million for Q2 2021.
Net working capital was negative $39.2
million compared with $0.2
million at December 31, 2021.
For Q2 2022, the Company had cash inflows from operating activities
of $8.3 million and incurred cash
outflows from investing activities of $13.6
million.
Operational Highlights
|
Q2 2022
|
Q2 2021
|
Six months
ended June
30, 2022
|
Six months
ended June
30, 2021
|
|
Continuing
Operations
|
|
|
|
|
|
Total material mined
(tonnes)
|
7,716,376
|
5,678,601
|
12,089,102
|
12,577,182
|
|
Ore mined
(tonnes)
|
291,160
|
211,913
|
523,373
|
559,379
|
|
Tonnes
milled
|
870,199
|
873,433
|
1,743,332
|
1,669,469
|
|
Plant gold head grade
(g/t)
|
0.69
|
0.81
|
0.63
|
0.85
|
|
Gold oz
produced
|
16,629
|
20,696
|
30,666
|
43,692
|
|
Gold oz sold
|
16,076
|
21,459
|
30,469
|
44,480
|
|
Cash costs per gold oz
sold
|
$
1,575
|
$
1,617
|
$
1,689
|
$
1,289
|
|
AISC per gold oz sold,
excluding corporate G&A expenditures
|
$
3,080
|
$
2,214
|
$
2,856
|
$
1,870
|
|
AISC per gold oz
sold
|
$
3,299
|
$
2,383
|
$
3,048
|
$
2,051
|
|
Discontinued
Operations
|
|
|
|
|
|
Ore mined
|
17,022
|
55,658
|
33,280
|
112,634
|
|
Tonnes
milled
|
17,236
|
55,997
|
33,468
|
114,665
|
|
Silver
produced
|
159,529
|
334,423
|
333,227
|
694,493
|
Production from Tucano during the second quarter was in line with
expectations as stripping continued to advance in preparation for
accessing main ore lenses and consequently better grades in the
second half of 2022. Mobilization of the new mining contractor,
MINAX, continues to advance, and mobilization of the required
equipment for the 2022 mine plan is expected to be complete by
September 2022. During this period of
mobilization, the current mining contractor, U&M, and MINAX
have been working in tandem, which contributed to an increase in
mined tonnage in Q2 2022 compared with the previous quarter.
Outlook
The Company's Tucano operation is on track to meet previously
announced production guidance for 2022 of 85,000 to 100,000 Au oz.
As disclosed in the Company's news release dated January 19, 2022, the second half of 2022 is
expected to account for a least 65% of annual production guidance.
The mine plan for Tucano reflects more stripping in the first
half of 2022 and therefore consolidated AISC is expected to be
higher in the first half of 2022 compared with the second half.
Following the sale of the Company's Mexican assets, guidance shown
in the table below is for continuing operations only.
Due to a combination of inflationary pressures and
accelerated capital spending specifically on the Tucano tailings
facility, the Company has determined that Tucano cost guidance for
the year must be adjusted. Inflationary pressures have had a
significant impact on operating costs, including on diesel and
other key consumables, when compared to the same period in 2021. In
addition, due to higher-than-normal precipitation in the past two
years, an increase in capital spending was necessary to fast track
the Company's expansion of the Tucano tailings storage facility,
which brought forward $3.5 million
planned for 2023, as well as a $2.3
million investment in evaporators to manage water levels in
the tailings facilities. Alterations in a number of aspects of the
mine plan, which will produce benefits in future quarters, further
impacted costs. Revised 2022 guidance on costs is stated in the
table below:
Guidance for Continuing Operations1
|
Previous
|
Revised
|
|
Gold Production
(oz)
|
85,000 –
100,000
|
85,000 –
100,000
|
|
Cash Costs ($/Au oz
sold)2
|
$1,200 -
$1,300
|
$1,400 -
$1,500
|
|
AISC ($/Au oz
sold) 3
|
$1,600 -
$1,700
|
$2,200 -
$2,300
|
Production and AISC guidance here and elsewhere in this news
release is forward-looking information that should be read in
conjunction with the Cautionary Statement on Forward-Looking
Statements section at the end of this news release and the
Company's most recently filed Management Discussion and Analysis
for the three and six months ended June 30,
2022 ("MD&A"). The Company may revise guidance during
the year to reflect actual results to date and those anticipated
for the remainder of the year.
The Company has determined that it will require further
financing to meet long-term objectives, improve working capital,
fund planned capital investments and exploration programs for its
operating mines, and meet scheduled debt repayment obligations and
will be considering additional equity financing (including through
use of the ATM facility) and/or debt
financing.
Refer to the Company's 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 six months ended June 30, 2022, and 2021 annual consolidated
financial statements and MD&A can be viewed on the Company's
website at www.greatpanther.com, on SEDAR at
www.sedar.com or on EDGAR at www.sec.gov/edgar.shtml. All
financial information is prepared in accordance with IFRS, except
as noted in the Non-GAAP Measures section of the Company's
MD&A.
|
___________________
|
|
1
|
The production and
revised cost guidance for 2022 assumes no COVID-19 related
shutdowns, the Company being able to maintain geotechnical
control/stability of the UCS pit and access of the mineralization
in the UCS pit, based on completion of the planned additional
technical work and in accordance with the revised Tucano mine plan
and without additional costs or significant
interruption.
|
|
2
|
Cash cost per oz sold
are calculated based on the total cash operating costs with the
deduction of revenue attributable to sales of by-product metals,
net of the respective smelting and refining charges.
|
|
3
|
AISC refers to all-in
sustaining cost per gold ounce sold, excluding corporate general
and administrative 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 exploration,
evaluation and development 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. This measure
is widely used in the mining industry as a benchmark for
performance but does 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. Refer to the
Non-GAAP Measures section of the Company's MD&A for the period
ending June 30,2022, 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 5.35 for the
third and fourth quarter of 2022. Actual results may
differ.
|
WEBCAST AND CONFERENCE CALL
The Company will host a conference call and webcast to discuss
Q2 2022 financial and operating results on Thursday, August 4, 2022, at 9:00 AM PT/12:00 PM
ET.
Live webcast and registration:
https://www.greatpanther.com/investors/webcasts/
Conference Call:
Canada and US Toll-Free:
+ 1 800 319 4610
International
Toll:
+ 1 604 638 5340
A replay of the webcast will be available on the Webcasts
section of Great Panther's website. Audio replay will be available
until September 4, 2022.
Audio Replay:
Canada and US Toll-Free:
+ 1 800 319 6413
International Toll:
+1 604 638
9010
Replay Access Code:
9181
ABOUT GREAT PANTHER
Great Panther Mining is a precious metals producer focused on
the operation of the Tucano Gold Mine in Brazil where the Company controls a land
package covering nearly 200,000 hectares in the prospective Vila
Nova Greenstone belt. Great Panther's aim is to create long-term
stakeholder value through safe, sustainable production and reinvest
into exploration to tap into the potential of the Tucano Gold Mine
to replace resources, extend mine life and make new discoveries.
Great Panther trades on the Toronto Stock Exchange trading under
the symbol GPR and on the NYSE American under the symbol GPL.
TECHNICAL INFORMATION
The technical information contained in this news release has
been reviewed and approved by Fernando A.
Cornejo, P. Eng., Chief Operating Officer, a non-independent
Qualified Person for the purposes of National Instrument 43-101 -
Standards of Disclosure for Mineral Projects.
CAUTIONARY STATEMENT ON FORWARD-LOOKING
INFORMATION
This news release contains forward-looking statements within the
meaning of the United States Private Securities Litigation Reform
Act of 1995 and forward-looking information within the meaning of
Canadian securities laws (together, "forward-looking statements").
Such forward-looking statements may include, but are not limited
to, statements regarding (i) the Company's ability to maximize the
full potential of the Tucano Gold Mine in Brazil through production, development and
exploration, (ii) the consummation and timing of closing the
Agreement to sell MMR, (iii) the Company's safe and sustainable
production and, reinvestment into exploration, (iv) the Company's
ability to return to a normalized rate of production, ramp up to
steady-state production and achieve a regular run rate by the
fourth quarter, (v) the Company's ability to improve operations and
efficiencies at Tucano, (vi) completion of the regional drill
program at Tucano, (vii) mobilization of equipment by September 2022, (viii) the Company's ability to
meet its production guidance, and (ix) the Company's ability
to receive additional financing on favorable terms, or at all.
These forward-looking statements and information reflect the
Company's current views with respect to future events and are
necessarily based upon a number of assumptions that, while
considered reasonable by the Company, are inherently subject to
significant operational, business, economic and regulatory risks
and uncertainties, including risks described in respect of Great
Panther in its most recent annual information form and management's
discussion and analysis filed with the Canadian Securities
Administrators and available at www.sedar.com and its most recent
annual report on Form 40-F and management's discussion and analysis
on Form 6-K filed with the Securities and Exchange Commission and
available at www.sec.gov.
There is no assurance that these forward-looking statements will
prove accurate or that actual results will not vary materially from
these forward-looking statements. Although the Company has
attempted to identify important factors that could cause actual
results to differ materially, there may be other factors that cause
results not to be as anticipated, estimated, described, or
intended. Accordingly, readers are cautioned not to place undue
reliance on forward looking statements. Forward-looking statements
and information are designed to help readers understand
management's current views of our near- and longer-term prospects
and may not be appropriate for other purposes. The Company does not
intend, nor does it assume any obligation to update or revise
forward-looking statements or information, whether as a result of
new information, changes in assumptions, future events or
otherwise, except to the extent required by applicable law.
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SOURCE Great Panther Mining Limited