Cora Gold Limited (CORA) Earnings Call Transcript & Summary

Hello. A warm welcome to the Cora Gold Webinar with Bert Monro, the CEO and Director. But we'll be taking over shortly with the presentation part of the equation. But for now, to let you know, this webinar is brought to you by Turner Pope. It's a [indiscernible] that offers corporate broking services to publicly listed companies as well as investment services to private investors and family offices as well. I wanted to let you know as well that I do have your questions that were submitted into us here. Plenty of interesting ones to look forward to you. So stay with us for that from investors, followers of the company. But for now, Bert, it's over to you.

Good afternoon, everybody, and thank you very much for joining the Cora Gold presentation. I'm Bert Monro, I'm the CEO of Cora. I'm looking forward to taking you through an update on the company and the Sanankoro gold project. Cora has a primary asset called Sanankoro in Southern Mali. It is a 1 million-ounce gold resource with over 0.5 million ounces of reserves and obviously, a completed PFS, which is obviously built ready. We've made a lot of progress this year in getting ready for that. Additionally, we've also got a nice looking project in Senegal called Madina Foulbé, which sits in the [indiscernible] window, 1 of the most prolific gold belts in West Africa. We're [indiscernible] invested company. All of our focus is on West Africa and all the team have spent the vast majority of their career working on and developing gold mining projects in the region. Diving into Sanankoro and talking obviously a little bit more about that. As I mentioned, it's a project in Southern Mali. It's around 4 hours drive from Bamako, the Capital City of Mali. In the Yanfolila [indiscernible] zone, we've got a series of deposits, as I mentioned, we've got 1 million ounces of gold and resource. The vast majority of that is in oxide with some additional transitional material as well. We believe there's obviously the potential for a fresh rock deposit below a greater depth as well, but we haven't done the drilling to prove that up. Hugely prospective, we've got around 1 million-ounce exploration target on top of our 1 million ounces of [indiscernible] compliant resource as well. So I certainly believe there's a much bigger project to come here. The project sits just to the east of Toubani resources, which has got over 2 million ounces of resources, just about 15, 20 [indiscernible]. So it's clearly a lot of gold in a region which is great. From a logistical operational perspective, it's in a good location, get access by road, lot water, lots of other positives around the project. We first completed a feasibility study on the project in 2022. Obviously, Marlin went through a period Insure many of you are aware of panettowheer you weren't issuing new permits. And obviously, through that period of time, we were waiting and ultimately, we lifted that last year we at an update of that feasibility study. So I completed the fresh feasibility study in September of last year at $3,500 gold, so somewhere below the current gold price, shows obviously absolutely fantastic economics, 98% IRR, 0.7 years payback period and over 10 years of reserve life. So it's a really strong [indiscernible] project. Obviously, what you're looking for as a engineer you're looking to develop its first mine relatively low CapEx, extremely quick payback, a really good free cash flow generation. And obviously, for us, obviously, the big win, we think, is obviously massive amounts of exploration upside and the ability to significantly expand the resources in time as well, which obviously we'll be looking to predominantly from free cash flow when we're in production, but we are obviously currently drilling. We obviously touch on that a little bit later, but obviously currently doing a drilling campaign right now, which we'll be looking to obviously expand our resource base. I think an overview and in brief, I mean, the big advantage of Sanankoro is it's an oxide gold project. Benefit of oxide gold project is you don't need to do the traditional drill and blast or obviously multi-stages of crushing in the process plant. Both of those factors have obviously cost implications as well as wear and tear, which obviously leads into the sort of sustaining capital points as well. So obviously, the benefit of iron oxide is you are actually free digging from surface straight into wall and obviously maintaining relatively low cost of production obviously delivering really good free cash flow. This year, we've made big strides in the financing. We raised close to GBP 60 million back at the end of Q1. Then in addition to that, we also signed a binding term sheet for USD 120 million funding term sheet, obviously, the combined proceeds of those 2 transactions, obviously, leaves us funded on the USD 124 million CapEx from the DFS. Within the stream deal, we've got the right to replace 50% of the stream with a traditional sort of bank loan. That's obviously a process which is a issue, taking a lot of focus right now and doing a lot on that. We think that blend obviously really optimizes the financing of the project. I think when you traditionally look at sort of 70-30 sort of debt equity type funding solutions, obviously, the Cora would have needed to raise additional equity to do that at that time. But obviously, on the current basis, the combination of the stream plus debt with the existing [indiscernible] we should be in a fully funded solution situation given the project CapEx. So pretty pleased to have made significant strides on the project from a finance sector this year. That was a really been positive. In terms of time line, again, going back to this oxide gold point. Obviously, 1 of the other benefits is you're building a slightly more streamlined project because of that. So from the point of receiving the permit, we should be around 16 months or so to [indiscernible]. Importantly, we commenced the feed process already. And obviously, midway through the fee process is obviously forms part of the project time line. Clearly, we can't start work physically on the ground until we get the mining permit. So the movement, obviously, we're still working through the feed, which will obviously expedite our situation. Obviously, [indiscernible] is in a really strong position to get going as soon as we can on the permits been received. It's a pretty well [indiscernible] path, obviously set a well-known engineering firm, obviously kind of a DRA group fleeting the feed. They've done and built many gold mining projects in Mali recently just come off the [indiscernible] project in Mali, where they're doing some expansion there, but have been involved in building other ones in Mali as well, so I've got to get track record in the country. Turning into the CapEx and maybe just touch on the flow sheet first. I think the important thing to note is Sanankoro is effectively what you call sort of stock standard gold mine in West Africa. It's got a traditional gravity CIL flow sheet. As I mentioned, the benefit of the oxide material, you don't have to go through multiple phases of crushing. One of the additional launches that we brought into this second feasibility study, which we've completed recently was a scrubber circuit. The benefit of the scrubber is that you actually allow a lot of the ore to bypass the mill and obviously, going straight to your CIR tanks. The advance of that as you can have a smaller mill, which has less power requirement, which actually helps in your sort of life of mine OpEx. Doesn't make a make a significant difference to the CapEx. It wasn't really a CapEx decision. It was really an OpEx decision, obviously managing a project with less power requirement is obviously important, has obviously lower cost to maintain and then service during the life of the mine as well. In terms of the CapEx, obviously, a lot of work went into this. It's a very detailed process, and ended out to multiple parties. We feel we're very confident in that CapEx at this time. And I think ultimately, we're seeing other products being delivered at the moment in Mali as well. So [indiscernible] have got a good experience of operating there and delivering I should say, so yes. Not sure on a pickup in the CapEx in particular to raise right now. But I think, look, we're happy that we can deliver that project, and it's a well-troden path for us. Just touching on the OpEx and this production profile, I think as you can see, the early years of production are really strong. you're up over 70,000 ounces of production in those early years and sort of well over 60%. I think what -- you can obviously see as the production take off towards the end of the mine life. And I think that's the reason I was sort of majoring on at the beginning of this presentation around the exploration upside in the last 2, 3 years of the mine life, you're really processing low-grade stockpiles of material having already mined. But the reality is half of our current resources aren't in reserve. We've obviously got an exploration target of a similar size to our existing resources. So we firmly believe obviously that mineable reserve will increase significantly. You'll obviously be looking to update and upgrade your reserve life and your production profile as you take the project forward there. So I would hope and anticipate to see certainly without any changes to the pricing plant, maintaining sort of 60,000 ounce a year plus sort of production profile sort of for a much, much longer period of time. Obviously, I think the more likely situation, I hope it will be a modeling situation is actually with additional discoveries and actually with the gold price strength strong, actually, you'd look to do relatively cost-effective expansions to the processing plant to obviously increase production levels and actually look to deliver significantly more gold than what's shown here. So for us, really, it's all about quick payback, the high free cash flow and obviously very high IRR and that will allow us to be in a really strong position to decide whether you want to expand the plant further, whether just in the upgrading of reserves. You can continue to maintain sort of the average production in the first 4 years for a much longer period to the teams or [indiscernible]. I think the options are open to us, but I guess [indiscernible] over, over an can would just be -- I kind of look at the first 4, 5 years of production and look at those averages in terms of numbers, and that's obviously what we think we could hopefully deliver for a sustained period of longer time. [indiscernible] reserve is 531,000 ounces of gold at over 1.1 grams a tonne. Pit oxide project at this represents a good great and good size. I think the average project being mined today globally is about 0.8 grams a tonne. So we're above that average obviously comfortable. But I think obviously, importantly, and in addition, it's a self 5:1 strip ratio. So ultimately, that's obviously the amount of pits of waste you have to move for a bit of ore. So it's a nice low strip ratio project, obviously, low technical risk. We're obviously seeing a lot of upside in the projects that I keep mentioning. We pit constrained the inferred resources and pit shown you already have the potential 173,000 answers to add to that 530,000 ounces of gold. [indiscernible] took inferred material, which obviously can't be converted into reserves until it's upgraded to indicated, but we did put the same parameters around those and further ounces as we did for the indicated and that showed you already on the existing deposit, you could maybe on those numbers sort of 3-plus years of mine life. So I think there's a really strong potential to grow the product significantly. But our base case reserve, we're really pleased with and obviously is very much oxide focused. Probably covered over quite a bit of this already. But yes, we've got several 1 million ounces of gold in JORC compliant resources at over a gram a tonne. The vast majority of it is oxide. Obviously, some of it's transitional. Obviously, I guess, transition as the name suggests is obviously when you're transitioning from an oxide zone to a fresh zone. So obviously, as our transitional appears to have the characteristics of the vast majority of that can be processed through existing process plant and there's obviously a period where we see the stockpile, obviously the softer material, which obviously goes through a [indiscernible] crushing circuit. Obviously, my plans change and as you hope to develop and expand your resources as you move through development, obviously, if you have to put in [indiscernible] crushing circuits and obviously update the flow sheet because obviously, it will benefit from that. Obviously, that's something you do down the line. But to [indiscernible] stand 1 million ounce deposit you got up to 1.4 million ounce exploration target showing there base predominantly off drill data, which is really pleasing. Currently drilling at the moment, which is obviously exciting and looking forward to getting out a [indiscernible] program when they come. And hopefully, that will also be very strong to the project. Taking on to the drill program. I think a couple of focuses for this program. If you look at the top image, zone B, what you can see is the 2 pits shown. And obviously, the gap between those 2 pits is obviously inferred resources, which are in a picture because you need to have indicated resources to move into a reserve. That's due to a lack of drilling. It's not due to anything to do with [indiscernible] just having been under drilled. So 1 of the focuses is on drilling in that gap. Hopefully, in time, it would obviously join up and you have 1 larger -- significantly larger pit there. obviously have 2 main benefits. Clearly, there'll be more gold. And secondly, obviously, it's always nicer to mine and then obviously better to mine on large pit than multiple smaller pits. So obviously has lots and lots of elements in that respect. So then obviously, it's generally speaking, a high-grade deposit, which is positive. I think 1 of the big opportunities that Sanankoro is a transitional zone, I think drilling to that into the base of the existing sort of oxide open pit and obviously getting a lot more knowledge in that transitional zone. I think we have a lot of benefits for us. And I think also the other thing is we're not putting a huge amount into it, but as I say, 5% of the drilling program taking field targets affecting or you've made gold discoveries, but you haven't yet put it into a resource at all, so actually following up potentially trenching or soil sambling or other early stage exploration work with the drill holes and the ability to have a sort of new maiden drill discovery on a positive potential deposit sort of within 5 to 10,000 of the processing plant is obviously was an exciting thing to be doing as a mining company. I think exploration, obviously, is obviously absolutely integral to this industry. And I think, obviously, for a period of time, it's been probably under exploration. I think people who were focusing on their production. I think for us, clearly, we've been focused on trying to have the project as built ready for as little as possible and while we've been going through this period. But I think I just wanted to reiterate and make the point here, there is a very, very strong strategy around exploration and how we look to deliver it. It's kind of rigorous and systematic that obviously goes through multiple phases. So we've got a really strong geological team have got a really good track record of making these early-stage discoveries and generally speaking, making them cheaply, which is obviously a good thing to be doing. So they're on the ground and obviously working the ground really hard, which is great to see. And the last years, we've really, I guess, built and developed the team. Cora obviously, a key person coming in, obviously, Lawrence [indiscernible] is a project manager. He's going over 30 years experience. for all of the big mining companies that are focused in West Africa really, I guess, most recently, he's been with both Resolute and Perseus Mining with projects in Mali and Ivory Coast, [indiscernible] well has been involved in building gold mines and expanding gold mines and outbreak. So he's been on the ground a lot this year in Mali, getting the project ready dealing with contractors, subcontractors and making sure we're ready to hit the ground running. And so that's obviously really important. Tricky on the mining side, obviously, again, so a lot of West African experience at [indiscernible] and [indiscernible] has even lift in Mali with his family going back quite a few years. When he was with Randgold 20-plus years ago, but for the last 25 years, he spent hides whole career in Africa and predominently in West Africa. So a guy knows is way around the geology of Mali and start-up operations in Mali. So pretty pleased to have a very experienced strong senior leadership team. Yes, we worked alongside [indiscernible] support by DRA not that long ago, then it has got great experience of developing [indiscernible] CIL pricing parts in West Africa and specifically in Mali. They built a number of mines in Mali as well as working on various expansion projects for existing operators as well. So I think that's really important to have a team with a track record of operating in the country that you're in. I guess probably the big question that people want to hear about to a degree. Obviously, where we're at the permitting. The project is fully permitted from an environmental perspective, which obviously great. We've got that done, just before we published the feasibility study back in 2022. Clearly, the big question is around the mining permit, the government of Mali spent a few years putting a place at mining code for the country. that was finalized and they lifted the moratorium last year. Since they've lifted the moratorium or partially of the moratorium on issuing new [indiscernible], our focus has really been around existing operating mines. And you've obviously seen, I'm sure a number of existing operating miners transition on to the new mining code and obviously have various interaction with the government. I think what we haven't seen yet. And hopefully, we're about to see soon is the next wave goes like ourselves with build-ready projects sort of eager and very keen to get going on the underground kind of being issued those permits. So I've been to Mali a couple of times this year and obviously, pushing is as high as we can is clearly absolutely a key focus for us. And it's in everyone's interest for us to get this permit and get building that mine for all stakeholders. So that is obviously what we are focused on doing. And obviously, we'll be giving any updates as soon as we're able to on that progress. Submitted a full [indiscernible] in Senegal. It's an early-stage exploration project. It's a really nice location in the Kenya window, it sits very near to a number of operating mines, big-scale mines, I guess it's closest to priority [indiscernible] which gave a Board and Mali, but it's only clear from Sadiola, but it's on trend with Sabodala, [indiscernible] Mako, a number of these mines, which people will be familiar with, which are sat within sort of mid-tier major companies. We've drilled a few holes in it and pretty much always hit mineralization, which is a good way to be starting a project. I think there's a lot of opportunity there to follow up on to the budgets and time allow clearly the focus on developing [indiscernible] committing to full pay, it sits slightly under packing order. But I think it's got a Tier 1 exploration potential there in a Tier 1 jurisdiction in West Africa and Senegal. So I was up in Senegal for last month and sort of catching up with various team members and other stakeholders as well. So it's certainly something which is definitely in our high line, but it's all about sort of timing and making sure you can deliver on everything. The ESG sustainability. It's obviously a key focus for us. I think we've always looked to operate as the best of the corporate sits and we can sort of on site. I'm obviously in-country regularly, but I guess more importantly, ask the permit team on the ground are always engaging with local stakeholders, both whether it's local communities, government, both environmentally from every aspect of it. So for us, it's obviously a key focus, for the company. And obviously, it's obviously integral to maintain your social license to operate. So we've done lots of interesting and exciting programs with the local communities. I think clearly, as we get the permit and we start to come out to a project that will only increase significantly. Clearly, at the moment, we're doing things within the states [indiscernible] but obviously looking forward to try and do as much more as we can. It's a really interesting part of the job. It's really exciting to see the impact you can have when carrying out your business correctly. Obviously, I guess just touched on briefly. We had always planned to put in solar hybrid power for the mine. So effectively, [indiscernible] the day and these gen sets overnight. Obviously massively reduces your diesel usage, I think obviously has obviously very positive envirnonmental benefits from that. But I think clearly, as we can see with fluctuating fuel prices that we've seen in the last couple of months, I think reducing your diesel usage and you need to sort of import fuel to sites and other things has obviously a lot of benefits as well. So clearly, getting in a really good solar farm is going to be in a part of the project as well. So the toughest slide already, so I won't dwell on it, but building up for a really strong team, lots and lots of West African experience on the ground. The team below and beside Lawrence will obviously look to grow significantly our owners team to deliver that project. So I think there's lots of good [indiscernible] around who would be keen to join us. So looking forward to joining and expanding the team. But as it stands, obviously, I'm now pleased with the sort of senior nature of the business, have got lots of relevant experience. I'm sure you all [indiscernible] hopefully because you think it's a good investment opportunity, I think, for us. as an investor, if you're not currently invested, this is obviously for any junior company without a producing asset, this is obviously a really big transitional period for the company. They're going from being can explorer, developer transitioning into a gold producer. And I guess, historically, is that chart is going to show in that period of time to first gold or as often when you see no significant levels of rerating. Obviously, with Mali and the permitting situation, I think we've probably been dealt understandably quite a tough card in that respect as people have been waiting and hoping for us together [indiscernible] over a period of time. So I think things start moving -- and you can see from the operating mines in other operating. They're all delivering and find a period of uncertainty for them for a period, but now they're all operating and doing very well on the ground. So I do think once we can get this comment, we get moving as quickly as possible and we shouldn't have any hindrance or hold up to cracking on. So hopefully that performance chart. And hopefully, we can deliver at the top end of that side given where we've been trading. Yes. I just touch briefly on the shareholder base. Obviously, our new significant shareholders called Eli Asset Holdings family office out of Singapore, they've been investing a lot of money into the mining space as well as other sectors in Africa. They're the largest investor, for example, in [ Divani ], [indiscernible] Mali, Canyon Resources actually gold and others. So they've become a really significant investor in West Africa and across Africa and the mining space, and they've been very supportive. The [indiscernible] family sat there, have been very supportive for a little over a decade now, the business. And I think our major shareholders, obviously, others as well. [ Micro farmer ] and others, I think, have been very supportive through this period. We've always raised on needed to raise it, and they've enabled us to move the business forward through periods of uncertain times. And I think now we've set there with a very strong cash balance with a stream, a binding streaming term sheet, kind a build-ready project with the construction team in place. I think Cora really is now [indiscernible] set up ready to really deliver. And I think as soon as our permit lands, we'll be able to make a lot of running, which will be really exciting. Thank you, all, very much for listening to me. Looking forward to taking a few questions and obviously doing my best to answer any of it you've got just say, as ever, obviously, if you do have questions outside of this, the company made address can be found on our website, and we had various social media and things like that. So feel free to get in touch directly with us that way as well, and I always do best to get back and give people updates on progress. So thank you very much, and I look forward to answering some questions now. Thank you.

Okay. Let's now stuck into the questions that I have here with me. So for the Sanankoro now fully funded to production. Could you outline the key milestones that remain before mine construction can't commence?

Yes. So no problem. I think, obviously, the most major milestone is clearly getting our mining permit. To talk you through briefly, obviously, the history of that. We did our feasibility study at the end shortly after there was a Perlet moratorium put in place in Mali and the government has been working through a new mining code, which was launched and [indiscernible] was partially lifted last year, as since then we've been engaging I guess, regularly and consistently with the government policy to move our permitting forward. We already have the environmental permit in place, which is valid, which is obviously the other significant power you need obviously the most significant milestone we need now to receive our mining permit. Additional to that, we've obviously commenced half feed, which obviously forms part of the construction time line and for part of the construction CapEx. So the feed is currently ongoing in front end engineering and design on-site and obviously remotely as well. So we are making strides towards being nearer gold production and obviously forming part of the CapEx of that as well.

Are we now mainly dealing with administrative timing regarding the issue of the mining permit.

It's a government-led process. They are the ones who have to issue the permit. We are obviously constantly engaging with them and looking to try and move forward as quickly as possible. clearly, it's in the interest of all stakeholders ourselves, the government and the people Mali for us to receive a permit as quickly as possible. Building a mine will be a significant benefit to the government from a revenue taxation perspective, but also from an employment perspective and obviously, everything else. So yes, we have obviously submitted all the various applications we [indiscernible] this stage. And obviously, it's currently with the government and obviously being processed by the government as it stands. So yes, completely, we are on top Of that. And obviously, it's our main focus as a business.

And whilst we await the mining permit, what work is being done, being undertaken to ensure construction readiness and what is the expected time line to first production? .

Yes. So we've got our Cora team assembled. Obviously, [ Lauren Steen Kamp ], our Project Director, who's obviously overseeing it. As I touched on in the earlier question, -- we've obviously come out to the feed, which is obviously, again, a really critical work stream. Both obviously, we'll expedite the construction process when we receive our permit. Obviously, pull together the project in a very strong way. Additionally to that, we are also doing a drilling program at the moment. That drilling program will obviously be looking to sort of both expand but also far out some of our existing resources. So so when we get mining, we'll obviously be mining the optimum deposits that we can be doing. So we are doing work on the ground. And additionally, we are upgrading our account at the moment and doing other things as well. So we're certainly working extremely hard as the business and obviously making sure that as soon as we are able to, we will be we will be delivering construction as quick as we go. In terms of the timing, obviously, that's a very hard thing to commit to specifically. Obviously, in our presentation, we set out a time line from when we receive our permit to obviously move to [indiscernible]. So I think that's -- that's obviously a state people look at. Clearly, it's not in are the timing of the balances in the government Obviously, we are working as hard as we can ensure we get it as quickly as possible. That it's probably worth noting we are looking to be the first sort of new developed to resume mining [indiscernible] doesn't carry to have one. Over the last here, you've seen a lot of existing operating mining companies and companies with mining permits transition on to the new mining code, with a mining [indiscernible] haven't seen as explorers of people with exploration products convert them to mining permit. So we are looking in sort of driving solid we can to be the first company ideally to get through that process and be the first ones to emerge Jacam at the end of that.

Okay. This person is also asking about the government and regulatory issues as well, but because people have taken the trouble, let's go through them all. So this person is asking, given the evolving political and regulatory environment in Mali as you've referenced, could you comment on your engagement with the government and local communities?

Yes, the local community first. I mean, obviously, it's a continuous and active engagement. We're currently drilling on site. We're currently carrying out various feed activities on site as well. So I think we've got really good to make there with the [indiscernible] obviously a number which work, which obviously live on our permit area. So yes, that's a sort of continued engagement. Obviously, as we evolve and as we move into mine construction, obviously that involvement engagement will change. But to date, it's been positive and good, and we've done a number of projects, which is sort of documented in presentations and websites around alternative livelihoods around health, education and other things as well. So pleased that we've done get engaged with local community and local government. From a national government perspective, yes, we are engaging with them the whole time. I travel to Mali on average fall by time of the year. we have a country manager, who is Martin is partly in country and its engagement with the government on a weekly basis. So obviously, it's hard to go into the absolute line of shot, not those conversations are confidential, but it is primary factors of ours and you are engaging in into right now.