Cora Gold Limited (CORA) Earnings Call Transcript & Summary

Thank you very much, and welcome, everybody. My name is Ed Bowie. I'm an independent non-executive Director and Chairman of the Board of Directors of Cora Gold Limited. Before we begin the formal proceedings of today's AGM, I'd like to hand over to Craig Banfield, Cora's CFO and Company Secretary, who will explain some of the basic functions of the conference call service we're using today. Craig, over to you.

Thanks, Ed. There are a number of functions that could be changed within Zoom's conferencing service, I guess, probably during the pandemic, you become familiar with them. However, in the interest of keeping things simple for today's AGM, the only function participants really need to be aware of is that of muting and unmuting. Those of us -- those who joined the meeting via the Internet, you can mute and unmute your connection by toggling microphone icon on the bottom of your screen on your PC, tablet or smartphone. As the host of today's AGM, I too can mute and unmute participants' connections. Should you wish to override this at any time, then you may again toggle the microphone icon on your individual screen. For those who've joined us via dial-up, you may be able to mute and unmute your microphone using the [indiscernible] according to the hardware you're using. Finally, I would ask those using their webcam enabled, when the AGM formally begins, to please turn off your video function. This can be toggled on and off by clicking the web cam and camera icon on your screen. Turning off the video will increase bandwidth and should result in improved sound quality for all.

Thank you, Craig. And I'd like -- I'd now like to introduce you to the other directors and management of the company who are with us today. We have online Robert Monro, Chief Executive Officer and Director; Andrew Chubb, Independent Non-Executive Director; and David Pelham, Independent Non-Executive Director. Welcome, gentlemen. I'd now like to ask any shareholders attending today's meeting to declare our presence and the number of shares they hold. In order to do this, you may need to unmute your connection as explained by Craig. Alternatively, those who have joined us using Zoom's conferencing software may wish to make the use of the built-in chat function to confirm their name and number of shares held. And any new arrivals to the meeting may wish to do this now. Anybody, Craig Banfield, company's secretary, anybody wish to declare their presence as a shareholder and their shareholdings, please?

Jonathan [indiscernible] I hold 750,000 shares.

Yes. But you don't want to vote those today, Jonathan?

No, I'm happy not to vote today.

Okay. I'll record it that you're present and not voting. Any other shareholders? That's it? Okay, let's continue.

Apparently, in the unlikely event that I lose connection during the AGM, we'll allow 5 minutes for me to rejoin and resume the meeting. In the event I'm unable to do this, I would ask that Robert Monro take over as Chair of the meeting until it's complete. The time now just after 12 p.m. U.K. time, on Tuesday, the 21st of June 2022, and with proper notice of this Annual General Meeting, Cora Gold Limited having been given on 13th of May 2022, in accordance with the company's articles of association and with the quorum being present, I hereby declare the AGM open. I will ask Cora's Company Secretary, Craig Banfield, please minute the proceedings of this meeting. As the Board of Directors believes that in the interest of allowing as many shareholders as possible to attend, these arrangements for holding the AGM online and the best interest of the company's shareholders. Ahead of today's AGM, we ask the shareholders to submit questions by e-mail. I can confirm that none have been submitted. And so this session will close at the end of formal proceedings of today's AGM. The Board of Directors, welcome communications with its shareholders. Queries can be submitted by e-mail to [email protected]. Further contact details can be found at the end of the company's news releases and on company's website. And [indiscernible] ordinary businesses to those AGM. And according to the company's articles of association and ordinary resolution is a resolution passed by a simple majority of half of the shareholders who being entitled to do so vote in person or by proxy as a general meeting of the company. The following resolutions are due for consideration at this AGM. And if thought fit, then by ordinary resolution, we pass. The first resolution, Resolution 1, accounts and reports and consideration is to receive the company's annual accounts for the financial year ended 31st of December 2021, together with the directors' report and independent auditor's report on those accounts. May I please have someone to propose this resolution?

I propose.

And may I please have someone second this resolution?

I'll second that resolution.

I can confirm that the following votes cast in respect of shareholders who appointed the Chairman of this meeting as their proxy the 65,490,101 for and nil against. I am assuming that no shareholder present wishes to vote. I hereby declare this resolution to be passed by ordinary resolution of the shareholders. The second resolution, resolution 2, to reappoint the auditor. The consideration is to reappoint PKF, Littlejohn LLP, as the company's auditor to hold office for the conclusion of this meeting until the conclusion of the next meeting at which annual accounts are laid before the company and to authorize the directors to determine the remuneration of the auditor. Now please have someone propose this resolution?

I propose.

And now please to have someone second this resolution?

I'll second that resolution.

I confirm the following votes cast in respect of shareholders who appointed the Chairman of this meeting as their proxy, 65,460,101 for and 30,000 against. With no shareholders voting at this meeting, I hereby declare this resolution to be passed by ordinary resolution of the shareholders. The third resolution, resolution 3, to reelect Ed Bowie -- the consideration is to reelect Ed Bowie as a director of the company. Now I please have someone to propose this resolution?

I propose.

And may I please have someone second this resolution?

I'll second that resolution.

I confirm the following votes cast in respect to shareholders who appointed the Chairman of the meeting as their proxy. 65,460,101 for and 50,000 against. With no shareholders voting at this meeting, I hereby declare this resolution to be passed by ordinary resolution of the shareholders. The fourth resolution, resolution 4, reelect Monro for consideration is, to reelect Robert Monro as a Director of the company. Now please have someone to propose this resolution. I and myself will propose the resolution. And now please have someone second this resolution?

I'll second that. Yes.

Thank you. I confirm the following votes cast in respect to shareholders who appointed the Chairman of this meeting as their proxy, 65,490,101 for and 20,000 against. We have no shareholders independent vote -- voting at this meeting. I hereby declare this resolution to be passed by ordinary resolution of the shareholders. The fifth resolution, resolution 5, unlock shares and consideration is, the directors be generally and unconditionally authorized to exercise all powers of the company to unlock shares in the company and to grant rights to subscribe for or convert any security into shares of the company. Such shares and rights to strive for or to convert any security into shares of the company being relevant shares. One, in respect of any exercise of options granted pursuant to the company's share option scheme; and two, in addition to one up to a maximum of 72,389,000 ordinary shares in aggregate provided that this authority shelf unless renewed, varied or revoked by the company, expire on the commencement of the Annual General Meeting of the company to be held in 2023, say that the company may before such expiry make offers or enter into agreements, which would or might require relevant shares to be allotted or granted after such expiry and the directors may allot relevant shares in pursuant of such offers or agreements, notwithstanding that the authority conferred by this resolution has expired and all unexercised authorities previously granted to the directors to allot relevant shares be and are hereby [indiscernible]. May I please have someone to propose this resolution?

I'll propose the resolution.

And may I please have someone second this resolution?

Take that from Dave's comment.

I confirm the following vote cast in respect to shareholders who appointed the Chairman of this meeting as their proxy, 65,470,527 for and 30,000 against. With no shareholders in attendance voting at this meeting, I hereby declare this resolution to be passed by ordinary resolution of the shareholders. And now for the special business of this AGM, in accordance with the company's Articles Association, a special resolution is a resolution [indiscernible] a majority of 3/4 of the shareholders [indiscernible] to do so vote in person or by proxy at a general meeting of the company. The following resolution is due for consideration at this AGM and it thought fit and by special resolution be passed. The sixth resolution, resolution 6, allot equity securities to consideration is, the directors be generally empowered to allot equity securities for cash pursuant to the authority conferred by Resolution 5 or by way of sale of treasury shares as if the rights of preemption did not apply to any such [indiscernible] provided that this also [indiscernible] shall be limited to: a, the allotment of any number of ordinary shares following exercise of rights in the company's share option scheme and b, the allotment of up to an additional 72,389,000 ordinary shares, representing 25% of the number of ordinary shares in issue on the date of this notice of Annual General Meeting to enable the directors of the company to expeditiously and without incurring undue costs undertake a limited equity fund raise or acquisition should the opportunity present itself. And provided this power shall expire on the commencement of the Annual General Meeting of the company to be held in 2023, unless renewed, varied or revoked by the company prior to or on that date, say that the company may before that date of such expiry make offers or agreements, which would or might require equity securities to be allotted after such expiry and the directors may allot equity securities in pursuant of any such offer or agreement notwithstanding power conferred by this resolution has expired. Now please have someone to propose this resolution?

I'll propose.

And now please have someone second this resolution?

I'll second that.

I confirm the following votes cast in respect to shareholders who appointed the Chairman of the meeting as proxy, 65,450,494 for and 50,033 against. With no shareholders attending the meeting voting, I hereby declare the resolution to be passed by a special resolution of the shareholders. That concludes the formal part of today's proceedings and therefore, with no business -- further business, I hereby declare the AGM closed. As mentioned earlier, we have had asked shareholders to submit questions in advance of today's meeting. With no questions having been submitted, unless any shareholder in attendance may wish to ask now, we will bring today's proceedings to a close.

Jonathan [indiscernible] a question.

So Jonathan, please go ahead.

Yes. No question back from shareholders? That's all?

Correct. Just a couple of queries in as I'm a shareholder of about 750,000 shares. Just looking at the last [indiscernible] my understanding is because we're now looking at a new MRE, the DFS is now going to be looking at the [ proceeding ] quarter 3. So I'm taking that obviously, June, July or August of this year. A previous [indiscernible] regarding the term machine [indiscernible] suggested that the term sheet was conditional upon the RNS being completed during half 1 of '22. So the fact we're now saying the DFS is going to be quarter 3, that falls outside of half year 1, does that affect the term sheet because that definitely says that in the [indiscernible] half 1 '22 for the DFS and as regards to [indiscernible]?

I think I'll just take that for you, Jonathan. That's right. I think the important part of that term sheet from our group related to our largest shareholders at Quirk family [indiscernible] had resources line and capital [indiscernible] essentially required. Family office related to their shareholding. So they're obviously extremely supportive and remains [indiscernible] business. I think clearly, we're moving towards a very significant point in the business. Obviously, the first step is updating our MRE, but then also the DFS itself. So I think once the DFS is obviously, we'll be looking to move the project into sort of execution phase. And obviously, we'll be working with the Quirk family tightly [indiscernible] significant subscribers of all our latest fundraises and obviously continue to be extremely supportive to the business. So I think that's sort of the important element in terms of taking it forward. I think once we have the [indiscernible] and we have the DFS numbers, we'll obviously be engaging in sort of the project finance and project delivery sort of straight off to that.

Right. Okay. And again, we're still looking at -- I mean the [indiscernible] RNS was quite a recent quarter 3 [indiscernible].

Yes, absolutely, the DFS has due to be finished next quarter.

Yes. Okay. And then obviously, you mentioned there about the Quirk family. I don't know [indiscernible] as a negative. But obviously, [indiscernible] I believe the investor, et cetera. As you said, [indiscernible] shareholder in quarter. Just from a shareholder's point of view, could there be deemed to be as a [indiscernible] conflict of interest because [indiscernible] shareholder looking at, what we're actually saying there is we've got a significant shareholder in the [indiscernible]. It could be argued that sort of like easing their interest for the [indiscernible] lower share price. Just -- could it be -- just what your comments are there that on paper is the potential conflict of interest there?

I mean, if I can just address that, first of all, obviously, that's something that the independent directors of the company are very careful to assess when we're doing any financing that there is no conflict of interest. And all negotiations are done at arm's length, and we have certainly, with the line head term sheet, we went through a process whereby nominated adviser has to provide a fairness opinion that it's done on at least commercial terms and what is expected in the broader market. And so we go through that -- we have gone through that process, and we will continue to go through that process to make sure that any finance that we receive is fair and is reasonable to all shareholders and in the best interest of old shareholders. And I would say that what we found to date is that the terms that we have received have generally been significantly better than the broader market can receive. So I think it's actually -- it's a positive tool for the Board's shareholding.

Yes. And I can't remember just exactly is [indiscernible] obviously replaced the previous one. And I think [indiscernible] from -- I'm going back about what 6, 9 months now. But certainly, what we've gotten out at the moment wasn't, if I read it correctly, it wasn't quite as good as the one we had before, probably more than I think there's actually [indiscernible] no doubt, you said that you're quite happy with the terms that is competitive with what will be available in [indiscernible] yes.

I think one other point I'll just make, Jonathan, on that, just before I answer a bit on the terms. If you look at a number of our previous financings we've done, which should be led by the Quirk or [indiscernible] they have been the largest subscriber in those or entities related to them. But they've often been at market, if not out of premium to market. And traditionally, in this space, you'll see placements and subscriptions happening at a discount to the market price. So I think what you've seen is then not only cornerstone in significant fundraisers for our business, but also doing that at a premium to market will certainly at market price where as I imagine when I see most other junior financing, they're generally done at discount to the market. I think [indiscernible] If they weren't actually get interest of all shareholders, they would not have been happy to a subscriber or take up those shares under premium. So I think hopefully, that is certainly speaks volumes for their commitment to all shareholders equally. The term sheet wasn't quite like-for-like. It was potentially was fairly similar, I guess, significantly, it was a larger financial commitment in the updated term sheet from there, which was obviously fantastic [indiscernible]. I think there were obviously some small tweaks around the terms, but I don't think they were significantly different. So Matt, Craig, if you want to add to that, but I think ultimately, they were extremely similar. I guess the most significant difference was it was an additional commitment of around $4 million in the last term, which was the most significant change, I think.

Yes. Okay. I mean once we start moving this forward, obviously quarter 3. I am assuming that the goal is that we are going to be aiming to be a producer [indiscernible] read the comments? Are we definitely looking going to [indiscernible]...

I mean, absolutely, that's been our strategy for the last few years. And since we delivered our scoping study, it was to move the project forward to a position where we could move into project delivery. And ultimately, I know you brought up the Quirk. Clearly, they've been involved in a number of extremely successful mining businesses before, now their interest in the line [indiscernible] been about helping to finance Cora into the [indiscernible] where it can be development ready and move into development. So core strategy very much is to get with the FFM and move into position where we're moving towards getting into construction as quickly as possible. So that is [indiscernible].

And I'm sure it's on the website, you just sort of think that -- I forget what -- so as regards to [indiscernible] what is rest time to first goal for capability of the [indiscernible] typically that you're gating at most the DFS a quarter 3, where as regards [indiscernible] gold?

Yes. So post-DFS, obviously, there's a period of obviously permitting and financing to get yourself ready to be in construction and then one can anticipate probably somewhere in the region of 12 to 18 months of, I guess, both construction and commissioning to get forward from that, say, I guess, without getting too much into the specific month or date, you've obviously got a period of the permitting process to go post-DFS with the government and then also to conclude all the financing needed to put it together to the package. And then clearly, if you look at other similar small projects across the [indiscernible] we're looking at a period of up to about 18 months of development. So you're looking, clearly, towards the end of next year or the beginning of the year after or the first half of the year after next, before you've been [indiscernible] gold.

And with what obviously [indiscernible] same problems there at all?

I think [indiscernible] obviously got a clear track record of developing lots of commercial gold mines and they're very keen to get additional production. Clearly, it's one of our largest industries, the gold mining sector. They've also had a number of mines, which are getting towards the end of my life and obviously reducing production. So having a new producer coming online would be integral to have other company in terms of helping us get there so we've seen a huge amount of support from the government, and we'd hope to be able to conclude that, I guess, [indiscernible].

Yes. Okay. And then two more. I mean, as regards globally, in fact, [indiscernible] the date you figure there's going to be [indiscernible] DFS everything so that when it costs more than 12 months ago. Any particular concerns just off the [indiscernible] as it's going up with the fuel or [indiscernible] labor, et cetera, is that a major that to some block? Or are we fairly comfortable with that even with [indiscernible] .

Yes. I don't see -- I don't want to give you too much of a politician's answer, not really answer the question, but obviously, when you're fairly [indiscernible] with the study, it's very hard for to talk about specifics on it but I can't be going to draw on to what the numbers now on it look like. Clearly, fuel is a big input on all mining costs. And I guess if you look at the operating mines the last 2 quarters, you can see the average operating mines costs have been increasing, and that's broadly largely due to the fact that what is it, 52% of African mines are off-grid so generally reliant on diesel generator because I think one of the advantages we have as a -- hopefully, a new operator, if you can -- you won't be relying on legacy power supply. So for example, we've been looking heavily at say the hybrid power, for example, which should mitigate some of the impacts of higher fuel prices, for example. So I think there are things obviously doing our study now post the period of inflation and post, obviously, what's happened before. It can enable you to plan and look at it as opposed to already being an operator and having an existing infrastructure and set that, which has obviously been harder to them to augment later. So yes, sorry, [indiscernible] specific numbers standing up and down. But obviously, clearly, it's just to try and make sure we come to the market as lower cost as we can. So that's something we're trying to do.

And then the last question for me -- then, that's I think is on last for me. So I'm also unfortunately at the moment, a pretty hefty investor in [indiscernible] local poor management, you might in a bit of both. Along the lines of [indiscernible] we know may raise element about a month to sign, not less than you well know that converse with for [indiscernible] what lessons can call or learn from that because that has really been an investor of nightmare [indiscernible] bridges being washed away, [indiscernible] you all know it's coming, it seems to be not prepared for mining [indiscernible] wearing out and then not [indiscernible].

Yes. Yes. I think at the point you're getting asked. So then, I think from my side, obviously, focusing on the positives of our project, we've got a very large, very deep oxide zone so well over 100 meters of oxide, which is a pretty big material. You've got all from service, which shows lend itself to a lower strip ratio operation. And obviously, then a straightforward processing rate. So obviously, I don't want to talk about how many [indiscernible] as is very tricky. But for us, no two mines are the same. And we feel we've got a very different project to other projects. In [indiscernible], I think one of the key things, Cora probably could spend time and is actually making people aware of the positives of an outside gold project. There are lots of examples of them in Canadian listed companies, for example, as a group called [indiscernible], which operates in [indiscernible]. It's actually making great demand in paying very strong dividends and has consistently done that over the last couple of years. So I think it's very hard to compare apples with oranges there. So I think you can learn from others' mistakes and you can obviously learn from your mistakes in life and just make sure you try and make sure you build a strong operating team and as much ability to avoid, mitigate from these issues if you can. But I think we have a very different style of project, lots of other projects around West Africa with that deep outside damage, which gives you a very nice free digging, relatively low strip ratio ore which takes away some of the complexities of lots of drill and blast, which can have issues around your old fragmenting and increasing your dilutionary impact on the ore body and stuff. So for me, we believe, we've got a relatively straightforward project, which we think we can execute on successfully, which is, obviously, an important part. But yes, obviously, [indiscernible] has challenges as every country does have a few building [indiscernible] project in the U.K., you have a totally different better challenges to [indiscernible], which had commercial gold mine after 30 years. So I sort of focus on the positives and be a huge number of very successful, very profitable mines come out of [indiscernible] focus on them and land from what they've done well, that may be well on [indiscernible] mind, hasn't done as well.

Yes. And then just a [indiscernible] security concerns at the minute [indiscernible] yes, East Africa. Yes, it's [indiscernible], going to come out with our [indiscernible]. But clearly, at the moment, are we comfortable with the current [indiscernible]?

Yes. I mean, look, it's -- clearly, there are risks there. And clearly, as you mentioned in West Africa, which has so unique [indiscernible] risk depending which comes you're in. [ Mali ] is a very large country and generally, a lot of the security issues are very much in the north of a country. Our project is 1,000 kilometers south of where those issues are in the last 25, 30 years, I don't think there's been -- there haven't been any mines impacted by security issues in Mali, where we're located in the Southwest quite near the Guinea border. We feel we're in a good position from a security perspective. Clearly, take nothing for granted. Clearly, you've always got to have all the right systems and protocols and procedures in place. And clearly, you've always got to be very mindful of it. It comes up security on every -- every weekly pool we have as a business internally. So clearly, it's something which is at the forefront of our mind to make sure we are taking anything for granted. But as it stands, we feel we're able to operate normally, obviously, carried out a drill program this year happened to budget and to time. I've been going back and forth to Mali over the last few years and I haven't felt, from my own personal perspective, being on the ground a change in the security situation from our side. But yes, [indiscernible] I think we're keen to avoid and obviously, what was taking it very seriously.

Yes. Okay. That's great. Thank you for taking time and thanks to those for me and...

Great to get questions and great to sort of get time to engage in stuff and then...

I would think to see you actually when you did this road show [indiscernible] Manchester?

Yes.

Yes. [indiscernible] I think you can see from the tone right, yes. [indiscernible] So again, I mean, from a shareholder's point of view, [indiscernible] we general contacted core, you are very willing to sort of talk to investors, et cetera. So whether there a lot of companies are [indiscernible] not sort of thanks to what you're doing and good look to arrive. So hopefully, it would be in the next quarter.

No. [indiscernible] thanks for your support, and thanks for everyone else on the call who's joined to listen here. We're up to thank you all for being supported and shareholders at Cora. It's great to have you on the register and hopefully, we'll be having a positive news through Q3 and be able to give you further updates and talk further on that.

Jonathan, it's Craig Banfield. I'll just look through a shareholder register. And I guess your shares are held been materialized. I think you've been materialized your shares. You hold them through Crest.

Yes, I've got [indiscernible]...

Just so as you -- for the future, if you wanted to actually vote those shares during a meeting, you need to contact the registrar or depository ahead of the meeting.

Yes, [indiscernible] representation.

Yes, correct.

Yes, I'll [indiscernible] very different [indiscernible] actual make today. So I wasn't -- I wasn't doing that [indiscernible] where I could make today [indiscernible]...

[indiscernible] just made you aware, that's why.

[indiscernible].

[indiscernible] thanks gentlemen.

Yes. Thank you.

Anyone else got any final questions or to bring it to a close.

Go back to Ed.

Great. With no other questions on behalf of all of us at Cora, I'd like to thank you for attending today's meeting, and we hope you and your families keep health safe and healthy. And thank you very much, and goodbye.

Goodbye.