all financial figures are in US dollars, unless otherwise indicated
"During the first half of the year we achieved excellent construction progress at our Greenstone project in
"Looking forward,
HIGHLIGHTS FOR THE THREE MONTHS ENDED
Operational
- Produced 120,813 oz of gold during the Quarter; sold 120,395 oz of gold at an average realized gold price of
$1,856 per oz - Total cash costs of
$1,482 per oz and AISC of$1,657 per oz(1)(2) - Total recordable injury frequency rate of 3.21 per million hours worked on a rolling 12-month basis, with two lost-time injuries during the Quarter
- Temporarily suspended operations at RDM and withdrew RDM's guidance on
May 16, 2022 as the result of a permitting delay for a scheduled tailings storage facility ("TSF") raise; the permit was received onMay 27, 2022 , the TSF raise is underway and operations resumed in early July
Earnings
- Earnings from mine operations of
$17.0 million - Net loss of
$78.7 million or$(0.26) per share - Adjusted net loss(1) of
$47.9 million or$(0.16) per share, after adjusting for certain non-cash expense items(3)
Financial
- Cash flow from operations before changes in non-cash working capital of
$16.4 million ($26.9 million cash flow used in operations after changes in non-cash working capital) - Adjusted EBITDA(1)(3) of
$24.1 million - Expenditures of
$18.0 million in sustaining capital and$134.2 million in non-sustaining capital(1) - Cash and cash equivalents (unrestricted) of
$159.7 million atJune 30, 2022 - In
April 2022 , received$75 million on closing of the sale of Mercedes and$40 million on exercise of Solaris Resources Inc. ("Solaris") warrants issued by the Company - Net debt(1) of
$472.2 million atJune 30, 2022
Construction, development and exploration
- Continued ramp up and commissioning at Santa Luz with the expectation of achieving commercial production in Q3 2022
- Advanced Greenstone construction
- More than 1 million work hours complete with no lost-time injuries
- On schedule to pour gold in the first half of 2024, 35% complete at
July 22, 2022 - On budget, with 56% of total capital costs contracted and 26% (
$315 million ) of total construction budget spent atJune 30, 2022 (100% basis) - Independent quantitative risk assessment confirmed the validity of the schedule and construction budget, as announced on
October 27, 2021 , based on detailed engineering and construction progress - Construction progress is discussed in the Development Projects section of this MD&A and documented in the Greenstone photo gallery on
Equinox Gold's website at www.equinoxgold.com - Exploration drilling in the 70-km-long greenstone belt that hosts Fazenda and
Santa Luz identified multiple near-mine and regional discoveries that highlight potential additions to Mineral Reserves and Mineral Resources
Corporate
- Closed the sale of Mercedes on
April 21, 2022 to Bear Creek Mining Corporation ("Bear Creek") and received a cash payment of$75 million , a deferred cash payment of$25 million due within six months of the date of the close of the sale, a 2% net smelter return on Mercedes production and 24.73 million shares of Bear Creek - Received
$40 million (C$50 million ) and transferred five million shares of the Company's investment in Solaris following the exercise of warrants the Company had granted onApril 28, 2021 - Acquired 1 million shares of Solaris at
C$6.75 per share on exercise of share purchase warrants. Following the exercise of the share purchase warrants, the Company owns 13.8 million shares (12.2% interest on a basic basis) of Solaris - Published the Company's 2021 Environmental, Social and Government ("ESG") report summarizing 2021 ESG performance and 2022 targets, launched a new ESG website portal and held an ESG-focused investor call
- Partnered with
Sandstorm Gold Royalties Ltd. to createSandbox Royalties Corp. , a new metals royalty company - Contributed a portfolio of royalties and a note receivable for consideration of
$28.4 million in common shares of Sandbox Royalties - Invested
$3.3 million in the initial financing to hold a total of 58.1 million common shares of Sandbox Royalties (34.4% interest on a basic basis) as a corporate investment
_____________________________ | |
(1) | Cash costs per oz sold, AISC per oz sold, adjusted net income, adjusted EBITDA, adjusted EPS, sustaining capital, non-sustaining capital and net debt are non-IFRS measures. See Non-IFRS Measures and Cautionary Notes. |
(2) | Cash cost per oz sold and AISC per oz sold for the three and six months ended |
(3) | Primary adjustments for the three months ended |
RECENT DEVELOPMENTS
- Updated production and cost guidance:
- Production estimated at 550,000 to 615,000 oz of gold with cash costs of
$1,200 to$1,250 per oz and AISC of$1,470 to$1,530 per oz sold - AISC includes
$171 million of sustaining capital across the sites with non-sustaining capital of$539 million , allocated primarily to Greenstone construction ($348 million ) - In
July 2022 , increased the Company's liquidity by amending its credit facilities - Increased the revolving credit facility ("Revolving Facility") from
$400 million to$700 million $73.3 million of outstanding principal balance under the term loan rolled into Revolving Facility, eliminating need for principal payments through mid-2026$100 million of Revolving Facility drawn inJuly 2022 ;$227 million of Revolving Facility undrawn as of the date of this MD&A(1)- Added a
$100 million uncommitted accordion feature - Extended the maturity from
March 8, 2024 toJuly 28, 2026 with the ability to request a one-year extension - Decreased borrowing costs by reducing Revolving Facility interest rate by an average of 25 to 50 basis points
- In
August 2022 , announced thatGreg Smith , currently President ofEquinox Gold , will succeedChristian Milau as Chief Executive Officer and a Director ofEquinox Gold effectiveSeptember 1, 2022
_____________________________ | |
(1) | Future draws of the Revolving Facility are subject to customary security registration updates that are expected to take approximately 90 days to complete |
CONSOLIDATED OPERATIONAL AND FINANCIAL HIGHLIGHTS
Three months ended | Six months ended | ||||||
Operating data | Unit |
|
|
|
|
| |
Gold produced | oz | 120,813 | 117,452 | 122,656 | 238,265 | 251,919 | |
Gold sold | oz | 120,395 | 119,324 | 124,712 | 239,719 | 253,268 | |
Average realized gold price | $/oz | 1,856 | 1,862 | 1,806 | 1,859 | 1,796 | |
Cash costs per oz sold(1)(2) | $/oz | 1,482 | 1,237 | 1,089 | 1,358 | 1,115 | |
AISC per oz sold(1)(2)(3) | $/oz | 1,657 | 1,577 | 1,383 | 1,616 | 1,433 | |
Financial data | |||||||
Revenue | M$ | 224.6 | 223.2 | 226.2 | 447.8 | 455.9 | |
Earnings from mine operations | M$ | 17.0 | 28.5 | 41.3 | 45.5 | 85.5 | |
Net (loss) income | M$ | (78.7) | (19.8) | 403.7 | (98.5) | 454.0 | |
(Loss) earnings per share | $/share | (0.26) | (0.07) | 1.37 | (0.33) | 1.69 | |
Adjusted EBITDA(1) | M$ | 24.1 | 43.4 | 51.9 | 67.2 | 112.8 | |
Adjusted net loss(1) | M$ | (47.9) | (23.9) | (0.8) | (72.0) | (4.0) | |
Adjusted EPS(1) | $/share | (0.16) | (0.08) | — | (0.24) | (0.02) | |
Balance sheet and cash flow data | |||||||
Cash and cash equivalents (unrestricted) | M$ | 159.7 | 151.2 | 333.9 | 159.7 | 333.9 | |
Net debt(1) | M$ | 472.2 | 385.1 | 215.6 | 472.2 | 215.6 | |
Operating cash flow before changes in non-cash working capital | M$ | 16.4 | 33.5 | 31.6 | 49.9 | 93.6 |
(1) | Cash costs per oz sold, AISC per oz sold, adjusted EBITDA, adjusted net income, adjusted EPS and net debt are non-IFRS measures. See Non-IFRS Measures and Cautionary Notes. |
(2) | Consolidated cash cost per oz sold and AISC per oz sold for the three and six months ended |
(3) | AISC per oz sold excludes corporate general and administration expenses. |
(4) | Numbers in tables throughout this MD&A may not sum due to rounding. |
The Company sold fewer gold ounces for the three and six months ended
In Q2 2022, earnings from mine operations were
In Q2 2022, adjusted EBITDA was
Sustaining(1) and non-sustaining(1) capital expenditures | ||||
Three months ended | Six months ended | |||
$ amounts in millions | Sustaining | Non- | Sustaining | Non- |
Mesquite(2) | $ 6.8 | $ 2.1 | 8.1 | 3.7 |
3.6 | 0.9 | 10.1 | 3.0 | |
2.4 | 16.2 | 7.2 | 29.5 | |
Mercedes | 1.4 | 0.2 | 6.9 | 0.4 |
Aurizona(3) | — | 0.6 | 15.0 | 0.8 |
Fazenda(3) | 3.1 | 0.1 | 6.3 | 0.2 |
RDM(3) | 0.5 | 7.6 | 1.5 | 20.5 |
— | 19.6 | — | 39.9 | |
Greenstone(4) | — | 86.8 | — | 126.9 |
Total sustaining and non-sustaining capital expenditures | $ 18.0 | $ 134.2 | $ 55.0 | $ 224.9 |
(1) | Sustaining capital and non-sustaining capital expenditures are non-IFRS measures. See Non-IFRS Measures and Cautionary Notes. |
(2) | Non-sustaining capital for Mesquite for the three and six months ended |
(3) | For the three months ended |
(4) | Capital expenditures at Greenstone represent the Company's 60% ownership of the project. |
SELECTED FINANCIAL RESULTS FOR THE THREE AND SIX MONTHS ENDED
$ amounts in millions, except per share amounts | Three months ended | Six months ended | |||
|
|
|
| ||
Revenue | $ 224.6 | $ 226.2 | $ 447.8 | $ 455.9 | |
Cost of sales | |||||
Operating expense | (170.7) | (139.9) | (323.0) | (286.7) | |
Depreciation and depletion | (37.0) | (45.0) | (79.3) | (83.7) | |
Earnings from mine operations | 17.0 | 41.3 | 45.5 | 85.5 | |
Care and maintenance expense | (4.7) | (7.2) | (5.1) | (9.2) | |
Exploration expense | (4.5) | (4.7) | (7.7) | (7.7) | |
General and administration expense | (11.1) | (15.5) | (22.9) | (22.8) | |
Income from operations | (3.3) | 13.9 | 9.8 | 45.8 | |
Finance expense | (8.2) | (11.8) | (17.6) | (20.5) | |
Finance income | 0.9 | 0.2 | 1.7 | 0.6 | |
Share of net (loss) income in associate | (5.9) | 0.4 | (7.5) | (2.3) | |
Other (expense) income | (32.7) | 385.2 | (51.7) | 434.5 | |
Net (loss) income before taxes | (49.2) | 387.9 | (65.3) | 458.1 | |
Income tax (expense) recovery | (29.5) | 15.8 | (33.2) | (4.1) | |
Net (loss) income | $ (78.7) | $ 403.7 | $ (98.5) | $ 454.0 | |
Net (loss) income per share attributable to | |||||
Basic | $ (0.26) | $ 1.37 | $ (0.33) | $ 1.69 | |
Diluted | $ (0.26) | $ 1.19 | $ (0.33) | $ 1.44 |
Additional information regarding the Company's financial results and activities underway at the Company is available in the Company's Q2 2022 Financial Statements and accompanying management's discussion and analysis for the three and six months ended
2022 GUIDANCE
The Company has updated its 2022 production and cost guidance to reflect the disruption to mining and operations at RDM, a longer-than-expected ramp-up at Santa Luz that has prolonged pre-commercial production and further inflation of approximately 6% on a consolidated basis.
Production (oz) | Cash Costs ($/oz)(1) | AISC ($/oz)(1)(2) | Sustaining Capital | Non-sustaining | |
Mesquite | 120,000 - 130,000 | ||||
25,000 - 35,000 | |||||
155,000 - 170,000 | |||||
Aurizona | 120,000 - 130,000 | ||||
Fazenda | 60,000 - 65,000 | ||||
RDM | 25,000 - 30,000 | ||||
45,000 - 55,000 | |||||
Greenstone | — | — | — | — | |
Total(5) | 550,000 - 615,000 |
(1) | Cash costs per oz sold, AISC per oz sold, sustaining capital and non-sustaining capital are non-IFRS measures. See Non-IFRS Measures and Cautionary Notes |
(2) | Exchange rates used to forecast 2022 AISC include a rate of BRL 5:00 to |
(3) | Sustaining capital includes asset retirement obligation, amortization, accretion and sustaining exploration expenditures |
(4) | Non-sustaining capital includes non-sustaining exploration expenditures |
(5) | Group total is the sum or average of the individual mine-level amounts. Numbers may not sum due to rounding |
Guidance for RDM was withdrawn on
The Santa Luz ramp up has been slower than anticipated and resulted in lower gold production during the period than expected. The longer ramp up was due to modifications required to handle resin-in-leach processing at an industrial scale, rectification of some piping and leach tank issues following construction, and also working to achieve a steady blend of ore feed. See Development Projects section for discussion of throughput and recoveries, which are approaching expected levels in Q3 2022.
Guidance for the other mines remains as originally disclosed on
Cost escalation for certain consumables during the first half of 2022, including diesel, cyanide and grinding media, and lower grades processed than projected, has resulted in increased cash costs at several of the Company's mines. As a result, although production is expected to increase at all of the mines in the second half of the year, guidance for cash costs and AISC per oz has been increased at all of the mines with the exception of Mesquite. Updated consolidated cash costs are estimated at
Sustaining capital guidance has decreased principally due to the delayed
The Company may revise guidance during the year to reflect changes to expected results.
CONFERENCE CALL AND WEBCAST
Conference call
Toll-free in
International callers: +1 604-638-5340
Webcast
www.equinoxgold.com
ABOUT
EQUINOX GOLD CONTACTS
Tel: +1 604-558-0560
Email: ir@equinoxgold.com
CAUTIONARY NOTES
Non-IFRS Measures
This MD&A refers to cash costs, cash costs per oz sold, AISC, AISC per oz sold, AISC contribution margin, adjusted net income, adjusted EPS, mine-site free cash flow, adjusted EBITDA, net debt, and sustaining and non-sustaining capital expenditures that are measures with no standardized meaning under IFRS, i.e. they are non-IFRS measures, and may not be comparable to similar measures presented by other companies. Their measurement and presentation is consistently prepared and is intended to provide additional information and should not be considered in isolation or as a substitute for measures of performance prepared in accordance with IFRS. Numbers presented in the tables below may not sum due to rounding.
Cash costs and cash costs per oz sold
Cash costs is a common financial performance measure in the gold mining industry; however, it has no standard meaning under IFRS. The Company reports total cash costs on a per oz sold basis. The Company believes that, in addition to conventional measures prepared in accordance with IFRS, certain investors use this information to evaluate the Company's performance and ability to generate operating income and cash flow from mining operations. Cash costs include mine site operating costs plus lease principal payments, but are exclusive of depreciation and depletion, reclamation, capital and exploration costs and net of by-product sales and then divided by ounces sold to arrive at cash costs per oz sold. The measure is not necessarily indicative of cash flow from operations under IFRS or operating costs presented under IFRS.
AISC per oz sold
The Company is reporting AISC per oz of gold sold. The methodology for calculating AISC was developed internally and is calculated below. Current IFRS measures used in the gold industry, such as operating expenses, do not capture all of the expenditures incurred to discover, develop and sustain gold production. The Company believes the AISC measure provides further transparency into costs associated with producing gold and will assist analysts, investors and other stakeholders of the Company in assessing its operating performance, its ability to generate free cash flow from current operations and its overall value. In calculating AISC, the Company includes silver by-product credits as it considers the cost to produce the gold is reduced as a result of the by-product sales incidental to the gold production process, thereby allowing management and other stakeholders to assess the net costs of gold production.
The following table provides a reconciliation of cash costs per oz of gold sold and AISC per oz of gold sold to the most directly comparable IFRS measure on an aggregate basis.
$'s in millions, except ounce and per oz figures | Three months ended | Six months ended | ||||
|
|
|
|
| ||
Gold ounces sold | 120,395 | 119,324 | 124,712 | 239,719 | 253,268 | |
(4,978) | (210) | — | (5,188) | — | ||
Adjusted gold ounces sold | 115,417 | 119,114 | 124,712 | 234,531 | 253,268 | |
Operating expenses | $ 170.7 | $ 152.4 | $ 139.9 | $ 323.0 | $ 286.7 | |
Lease payments | 0.5 | 2.4 | 1.0 | 2.9 | 3.3 | |
Silver by-product credits | (1.1) | (1.0) | (1.6) | (2.1) | (1.7) | |
Fair value adjustment on acquired inventories | 7.6 | (5.9) | (3.5) | 1.7 | (5.8) | |
(6.6) | (0.5) | — | (7.0) | — | ||
Total cash costs | $ 171.1 | $ 147.3 | $ 135.9 | $ 318.4 | $ 282.5 | |
Cash costs per oz sold | $ 1,482 | $ 1,237 | $ 1,089 | $ 1,358 | $ 1,115 | |
Total cash costs | $ 171.1 | $ 147.3 | $ 135.9 | $ 318.4 | $ 282.5 | |
Sustaining capital | 18.0 | 37.1 | 34.1 | 55.0 | 75.4 | |
Reclamation expenses | 2.3 | 2.4 | 2.5 | 4.7 | 5.2 | |
Sustaining exploration expenses | 0.1 | 1.0 | — | 1.1 | — | |
(0.2) | — | — | (0.2) | — | ||
Total AISC | 191.2 | 187.8 | 172.5 | 379.1 | 363.0 | |
AISC per oz sold | $ 1,657 | $ 1,577 | $ 1,383 | $ 1,616 | $ 1,433 |
(1) | Consolidated cash cost per oz sold and AISC per oz sold for the three and six months ended |
Sustaining and non-sustaining capital reconciliation
Sustaining capital expenditures are defined as those expenditures which do not increase annual gold ounce production at a mine site and excludes all expenditures at the Company's projects and certain expenditures at the Company's operating sites which are deemed expansionary. Sustaining capital expenditures can include, but are not limited to, capitalized stripping costs at open pit mines, underground mine development, mining and milling equipment and TSF raises.
The following table provides a reconciliation of sustaining capital expenditures to the Company's total capital expenditures for continuing operations.
Three months ended | Six months ended | |||||
$'s in millions |
|
|
|
|
| |
Capital additions to mineral properties, plant and equipment(1) | $ 167.4 | $ 129.1 | $ 108.0 | $ 296.5 | $ 220.2 | |
Less: Non-sustaining capital at operating sites | (27.7) | (30.3) | (25.2) | (58.0) | (52.3) | |
Less: Non-sustaining capital at development projects | (106.4) | (60.4) | (28.0) | (166.8) | (36.3) | |
Less: Capital expenditures - corporate | (10.1) | (0.1) | (0.3) | (10.2) | (0.7) | |
Less: Other non-cash additions(2) | (5.2) | (1.2) | (20.5) | (6.4) | (55.5) | |
Sustaining capital expenditures | $ 18.0 | $ 37.1 | $ 34.1 | $ 55.0 | $ 75.4 |
(1) | Per note 5 of the condensed consolidated interim financial statements. Capital additions are exclusive of non-cash changes to reclamation assets arising from changes in discount rate and inflation rate assumptions in the reclamation provision. |
(2) | Non-cash additions include right-of-use assets associated with leases recognized in the period, capitalized depreciation for deferred stripping activities, and capitalized non-cash share-based compensation. |
Total mine-site free cash flow
Mine-site free cash flow is a non-IFRS financial performance measure. The Company believes this measure is a useful indicator of its ability to operate without reliance on additional borrowing or usage of existing cash. Mine-site free cash flow is intended to provide additional information only and does not have any standardized meaning under IFRS and may not be comparable to similar measures of performance presented by other mining companies. Mine-site free cash flow should not be considered in isolation or as a substitute for measures of performance prepared in accordance with IFRS.
The following table provides a reconciliation of mine-site free cash flow to the most directly comparable IFRS measure on an aggregate basis:
Three months ended | Six months ended | |||||
$'s in millions |
|
|
|
|
| |
Operating cash flow before non-cash changes in working capital | $ 16.4 | $ 33.5 | $ 31.6 | $ 49.9 | $ 93.6 | |
Add: Operating cash flow used by non-mine site activity(1) | 24.4 | 39.1 | 49.6 | 63.5 | 66.8 | |
Cash flow from operating mine sites | $ 40.8 | $ 72.6 | $ 81.2 | $ 113.4 | $ 160.4 | |
Mineral property, plant and equipment additions | $ 167.4 | 129.1 | 108.0 | $ 296.5 | 220.2 | |
Less: Capital expenditures relating to development projects and corporate and other non-cash additions | (121.7) | (61.7) | (48.7) | (183.4) | (92.5) | |
Capital expenditure from operating mine sites | 45.7 | 67.3 | 59.3 | 113.1 | 127.7 | |
Lease payments related to non-sustaining capital items | 3.7 | 3.4 | 5.0 | 7.1 | 6.2 | |
Non-sustaining exploration expenses | 4.4 | 2.1 | 2.6 | 6.6 | 4.8 | |
Total mine site free cash flow | $ (13.0) | $ (0.3) | $ 14.3 | $ (13.4) | $ 21.7 |
(1) | Includes taxes paid that are not factored into mine site free cash flow and are included in operating cash flow before non-cash changes in working capital in the statement of cash flows. |
AISC contribution margin, EBITDA, adjusted EBITDA
The Company believes that, in addition to conventional measures prepared in accordance with IFRS, certain investors use AISC contribution margin, AISC contribution margin per gold ounce sold and adjusted EBITDA to evaluate the Company's performance and ability to generate cash flows and service debt. AISC contribution margin is defined as revenue less AISC. EBITDA is defined as earnings before interest, tax, depreciation and amortization. Adjusted EBITDA is defined as earnings before interest, tax, depreciation, and amortization, adjusted to exclude specific items that are significant but not reflective of the underlying operating performance of the Company, such as the impact of fair value changes of warrants, foreign exchange contracts and gold contracts; unrealized foreign exchange gains and losses, transaction costs, and share-based compensation expense. It is also adjusted to exclude items whose timing or amount cannot be reasonably estimated in advance or that are not considered representative of core operating performance, such as impairments and gains and losses on disposals of assets.
Prior to Q4 2021, adjusted EBITDA was calculated excluding transaction costs as an adjusting item. Commencing in Q4 2021, the Company has adjusted for transaction costs as this item is not considered representative of core operating performance. The calculation of adjusted EBITDA for
The following tables provide the calculation of AISC contribution margin, EBITDA and adjusted EBITDA, as calculated by the Company:
AISC Contribution Margin
Three months ended | Six months ended | |||||
$'s in millions |
|
|
|
|
| |
Revenue | $ 224.6 | $ 223.2 | $ 226.2 | $ 447.8 | $ 455.9 | |
Less: AISC | (191.2) | (187.8) | (172.5) | (379.1) | (363.0) | |
Less: | $ (9.1) | $ — | $ — | $ (9.5) | $ — | |
AISC contribution margin | $ 24.3 | $ 35.4 | $ 53.7 | $ 59.2 | $ 92.9 | |
Gold ounces sold | 120,395 | 119,324 | 124,712 | 239,719 | 253,268 | |
Less: | (4,978) | (210) | — | (5,188) | — | |
Adjusted gold ounces sold | 115,417 | 119,114 | 124,712 | 234,531 | 253,268 | |
AISC contribution margin per oz sold | $ 210 | $ 297 | $ 431 | $ 252 | $ 367 |
(1) |
EBITDA and Adjusted EBITDA
Three months ended | Six months ended | |||||
$'s in millions |
|
|
|
|
| |
Net (loss) income before tax | $ (49.2) | $ (16.1) | $ 387.9 | $ (65.3) | 458.1 | |
Depreciation and depletion | 37.3 | 42.6 | 45.4 | 79.9 | 84.2 | |
Finance expense | 8.2 | 9.4 | 11.8 | 17.6 | 20.5 | |
Finance income | (0.9) | (0.8) | (0.2) | (1.7) | (0.6) | |
EBITDA | $ (4.7) | $ 35.1 | $ 444.9 | $ 30.4 | $ 562.3 | |
Non-cash share-based compensation expense (recovery) | 1.3 | 1.3 | 3.8 | 2.5 | 3.6 | |
Loss (gain) on change in fair value of warrants | 39.6 | 18.7 | (24.0) | 58.2 | (57.3) | |
Unrealized gain on gold contracts | (17.3) | (5.4) | (0.6) | (22.7) | (42.7) | |
Unrealized loss (gain) on foreign exchange contracts | 6.2 | (18.1) | (19.0) | (11.9) | (7.6) | |
Unrealized foreign exchange (gain) loss | (7.9) | 10.5 | 3.9 | 2.7 | 2.9 | |
Transaction costs | — | 0.1 | 1.4 | — | 1.9 | |
Share of net loss (income) on investment in associate | 5.9 | 1.6 | (0.4) | 7.5 | 2.3 | |
Other expense (income)(1) | 0.9 | (0.4) | (358.0) | 0.6 | (352.5) | |
Adjusted EBITDA | $ 24.1 | $ 43.4 | $ 51.9 | $ 67.2 | $ 112.8 |
(1) | Other expense for the three and six months ended |
Adjusted net income and adjusted EPS
Adjusted net income and adjusted EPS are used by management and investors to measure the underlying operating performance of the Company. Adjusted net income is defined as net income adjusted to exclude specific items that are significant but not reflective of the underlying operating performance of the Company, such as the impact of fair value changes in the value of warrants, foreign exchange contracts and gold contracts, unrealized foreign exchange gains and losses, and non-cash share-based compensation expense. It is also adjusted to exclude items whose timing or amount cannot be reasonably estimated in advance or that are not considered representative of core operating performance, such as impairments and gains and losses on disposals of assets. Adjusted net income per share amounts are calculated using the weighted average number of shares outstanding on a basic and diluted basis as determined by IFRS.
Prior to Q4 2021, adjusted net income was calculated excluding transaction costs as an adjusting item. Commencing in Q4 2021, the Company has adjusted for transaction costs as this item is not considered representative of core operating performance. The calculation of adjusted net income for
The following table provides the calculation of adjusted net income and adjusted EPS, as adjusted and calculated by the Company:
Three months ended | Six months ended | |||||
$'s in millions |
|
|
|
|
| |
Basic weighted average shares outstanding | 303,684,956 | 302,227,870 | 295,027,749 | 303,684,956 | 295,027,749 | |
Diluted weighted average shares outstanding | 303,684,956 | 302,227,870 | 343,632,881 | 303,684,956 | 343,632,881 | |
Net (loss) income attributable to | $ (78.7) | $ (19.8) | $ 403.7 | $ (98.5) | $ 454.0 | |
Add (deduct): | ||||||
Non-cash share-based compensation expense (recovery) | 1.3 | 1.3 | 3.8 | 2.5 | 3.6 | |
Loss (gain) on change in fair value of warrants | 39.6 | 18.7 | (24.0) | 58.2 | (57.3) | |
Unrealized gain on gold contracts | (17.3) | (5.4) | (0.6) | (22.7) | (42.7) | |
Unrealized loss (gain) on foreign exchange contracts | 6.2 | (18.1) | (19.0) | (11.9) | (7.6) | |
Unrealized foreign exchange (gain) loss | (7.9) | 10.5 | 3.9 | 2.7 | 2.9 | |
Transaction costs | — | 0.1 | 1.4 | — | 1.9 | |
Share of net loss (income) on investment in associate | 5.9 | 1.6 | (0.4) | 7.5 | 2.3 | |
Other expense (income)(1) | 0.9 | (0.4) | (358.0) | 0.6 | (352.5) | |
Income tax impact related to above adjustments | (0.4) | (1.8) | — | (2.1) | — | |
Unrealized foreign exchange (gain) loss recognized in deferred tax expense | 2.4 | (10.6) | (11.6) | (8.2) | (8.6) | |
Adjusted net (loss) income | $ (47.9) | $ (23.9) | $ (0.8) | $ (72.0) | $ (4.0) | |
Adjusted (loss) income per share - basic ($/share) | ||||||
Adjusted (loss) income per share - diluted ($/share) |
(1) | Other expense for the three and six months ended |
Net debt
The Company believes that in addition to conventional measures prepared in accordance with IFRS, the Company and certain investors and analysts use net debt to evaluate the Company's performance. Net debt does not have any standardized meaning prescribed under IFRS, and therefore it may not be comparable to similar measures employed by other companies. This measure is intended to provide additional information and should not be considered in isolation or as a substitute for measures of performances prepared in accordance with IFRS. Net debt is calculated as the sum of the current and non-current portions of long-term debt, net of the cash and cash equivalent balance as at the balance sheet date. A reconciliation of net debt is provided below.
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Current portion of loans and borrowings | $ 26.7 | $ 26.7 | $ 26.7 |
Non-current portion of loans and borrowings | 605.2 | 514.0 | 522.9 |
Total debt | 631.9 | 540.7 | 549.5 |
Less: Cash and cash equivalents (unrestricted) | (159.7) | (305.5) | (333.9) |
Net debt | $ 472.2 | $ 235.2 | $ 215.6 |
Technical Information
Forward-looking Statements
This news release contains certain forward-looking information and forward-looking statements within the meaning of applicable securities legislation and may include future-oriented financial information. Forward-looking statements and forward-looking information in this news release relate to, among other things: the strategic vision for the Company and expectations regarding exploration potential, production capabilities and future financial or operational performance; the Company's production and cost guidance; the Company's ability to successfully advance its growth and development projects, including the construction of Greenstone and the expansions at Los Filos,
The Company cautions that forward-looking statements and information involve known and unknown risks, uncertainties and other factors that may cause actual results and developments to differ materially from those expressed or implied by such forward-looking statements and information contained in this news release and the Company has made assumptions and estimates based on or related to many of these factors. Such factors include, without limitation: fluctuations in gold prices; fluctuations in prices for energy inputs, labour, materials, supplies and services; fluctuations in currency markets; operational risks and hazards inherent with the business of mining (including environmental accidents and hazards, industrial accidents, equipment breakdown, unusual or unexpected geological or structural formations, cave-ins, flooding and severe weather); inadequate insurance, or inability to obtain insurance to cover these risks and hazards; employee relations; relationships with, and claims by, local communities and indigenous populations; the Company's ability to obtain all necessary permits, licenses and regulatory approvals in a timely manner or at all; changes in laws, regulations and government practices, including environmental and export and import laws and regulations; legal restrictions relating to mining; risks relating to expropriation; increased competition in the mining industry; the failure by
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