PDI Gold Limited (PDI) Earnings Call Transcript & Summary

[Audio Gap] Molly, that generates about 45,000 ounces a year and Kiniero, which is currently on track to meet or exceed the top end of guidance at about 176,000 ounces for the year. We've got a -- I think probably the finest exploration. Sorry, development asset in West Africa at the moment in [indiscernible] we've had some very positive steps towards getting that permitted, including the meeting with the President in the last 2 weeks. So we're -- we think we're really on a path to starting that probably next quarter of this year and are bringing it into production first quarter 2028. So that's a track record of me and my team through West Africa. We see we started with Nord Gold in about 2010 building [indiscernible] I went through as General Manager of [indiscernible] for just over 12 months. Product Director gross in Southern Siberia in Russia. CDO and Project Director of Cymbrato, COO and MD of Tieto Mineral Avisa project and most recently, MD for Robi and now MD for PDI Gold, which is the merger of the 2 companies. That's our register, and it's our performance against the GDXJ sort of the indexes were included in. We've outperformed the index over the last 12 to 15 months, and we're hoping with the announcement of our permitting, which we think is imminent at the moment that we're going to have a reroad on that news, and we still aim to be in construction later this year. That was our last quarter performance. We put over 64,000 ounces at an all-in sustaining cost of just over $1400. Kiniero sustaining -- all-in sustaining was $1,250 odd which puts us pretty much the lowest end of the -- all-in sustaining costs in West Africa and Spa. At the end of last quarter, we had $364 million cash and [indiscernible] bank. We made a $10 million investment in Huali in [indiscernible] and we're, yes, having a great quarter so far and hoping to announce those results at the end of the quarter. That's where we sit in comparison to our peers. We are -- I was actually surprised to see we're the lowest cost producer in the region for Gold at [ 140 ]8. That's slightly increased by -- our small operation in Impala in Mali, which as Chris explained earlier, is a difficult jurisdiction to operate in. And it certainly drags the cost curve up a little bit. We've done more to control cost in our first 6 months of operation at Kiniero. We're really looking forward to having a producing mine in Kiniero, that's our flagship at least until Banca is in production. That's where Kiniero sets, and you can see there, it sort of borders right on the back end deposit. There's 4 major operators in Guinea at the moment. That NordGold, AngloGold, Shanti, [indiscernible] and as with a smaller operator in Manta resources just in the [indiscernible] to the north of [indiscernible] Kiniero deposit. So we've had a pretty good time in Guinea, obviously, the permitting situation has been slower than we would have liked, but we built Kiniero on time and a lodge it during possibly the most busiest time in Guinea that's ever existed with the construction of the Simandou Gold Mine. So they put in over 500 kilometers of rail and I think 750 bridges port and road facilities to get that holding into production. Meanwhile, we -- we were sort of spending -- our entire CapEx was a weekly spend for Rio Tinto during that project. So it was -- we were the small project that got built while they were working through it, but we had a fantastic ramp up in production. January, we're really still commissioning. We only got the SAG mill -- sorry, the formal going halfway through January. We ramped up very quickly to over nameplate, and now we've reset nameplate to slightly over 8 million tonnes per annum, mostly processing very self saprolite. We've got stuff in the blend for at least the next 7 years, we'll probably add that well past 10. We've got an incredible amount of exploration potential through the whole thing, and we're just going to be finding more gold and making more gold for the receivables [indiscernible]. We just did a reserve update today between economic factors and drilling. We've managed to add about $500,000 to the reserve, which is slightly depleted by the $100,000 we mined in the first half of the year, but we've had a very, very good start up. We think we're going to be able to run in this sort of nameplate indefinitely and we're really happy to be operating in Guinea, which is a very safe jurisdiction, and it's working pretty well for us. As you can see there, they're the certain lending licenses, obviously companies with banking North, Kiniero in the south, and you can see the Monsenia one, which is currently under application at the moment. I won't sure I point, but I'm not going to bother with that. The monsoon is just to the south of Kiniero, that's an extension of our current [indiscernible] pit. It should join up to create a peer that's approximately 2.5 kilometers long. The ore body is 500 meters wide. It's the ore body that is at surface, it's a 1:1 strip rose life of mine pit starts off with basically zero strip. It's all oxidized to about 100 meters and it's just -- it's going to join up with [indiscernible] what's a super pit in the region 1 kilometer wrong just a massive easy ore body to mine, which we'll continue to fill our mill forseeable future. We've had a lot of exploration over the last 3 to 6 months, we were hoping to renew some exploration updates today, but that could delay should be out later this week, but we're really looking for some very high-grade shoots that extend under the Gabelli cluster, which is where SEMAFO mined for just over 10 years, 3.5 grams per tonne in oxide. So there's some very high-grade extensions there. We've hit them recently, and we're hoping to bring you those results very shortly. We're looking for some really good oxide targets around Zone C and some high [indiscernible] shoots down at [indiscernible] combining. So it's -- and then there's just a lot of greenfields exploration potential at the North [indiscernible] and [indiscernible]. So we've yes, we've got enough goal to find to continue to increase our reserves much faster than we deplete for the foreseeable future. And it's just going to continue to deliver for us. Now [indiscernible] is obviously, I think, the best development project in West Africa by [indiscernible], probably in the world. It's massive dick ore body that's extends its depth into an underground in an open pit. It's got fantastic development ground around. There's currently 5.5 million ounces of reserve -- of resources and just under 3 reserves. We're hoping to start -- commence drilling there again in later this year, by the end of the year. Hopefully, finding some more [ saprolite ] to add to our mine blend and increase our DFS nameplate throughput. So the DFS had us at a 12-year average production rate of 250,000 ounces per year. We're redoing that DFS sort of playing with the optimization of the mine plan and the size of the mill, and we're hoping to reduce that CapEx number and increase the milling throughput and the overall production rate. We're aiming to have that out in December of this year. That's what [indiscernible] looks like. As you can see, it's just a beautiful big, wide ore body. Mining is going to be really simple, but we'll have 1 side of the pit as or 1 side that's waste. You'll be doing hold -- whole low blast and hole was plus. It's a big, big underground sort of 4 grams a tonne. It extends at depth. At this stage, we don't know how far down, but it continues at debt. We are playing with that optimization now. We're really looking to potentially push back the underground maybe year 3 or year 4 increase the overall size of the open pit, put that can pillar slightly deeper in the mine and obviously increase the milling throughput to make up for that in the plan. So we're working through that now. We're hoping to have it complete by the end of this year. In the meantime, we've been pretty busy. We've started detailed engineering. We're about 25% through. We've put down initial purchase orders for the mills and the power station, working with [indiscernible] partners that we work with. We've tendered almost all of our mechanical equipment now. We've actually received our structural steel tenders back. So we are really a shovel ready as a project, it can possibly be to start work as soon as we can. The wet season is finishing in the next 2 weeks. We're hoping to put shovels in the ground pretty soon after that, permitting allowable, and then we'll be moving into what we think is an 18-month construction period and hopefully, poring gold in the first quarter of 2028. So it is an exciting project, and we can't wait to get started. That's the exploration potential. As you can see there in the blue, I'm not going to attempt to point, but that's the current resource shell. There's a lot of really interesting results that were sort of haven't really been included in any resource yet, and there's some excellent hits in that thing. So we're then getting some asset rigs busy sort of towards the end of the year we can certainly add to the overall saprolite blend in the mill sort of increased the first few years of production to displace the underground ore that doesn't come -- probably not going to come into later now. We've just had a stellar record of discovery. This was discovered. First hole was drilled in 2020. So it is really only 6 years from first hold to what we think is going to be the first concrete and it is just an outstanding project. That's our Nampala operation. We have managed to operate in Mali relatively undisturbed through the last few years. It's obviously been a challenging operating environment as a lot of people will tell you, but Nampala managed to generate free cash flow month-on-month through the whole thing. We're still sort of pulling over $25 million a month, a year out of Mali. It's still cash generating. We just increased the overall reserve today. And it's still an asset that's well supported by the government. It's well supported by the community and it's well supported by the workforce. So we're still operating it. It's relatively low grade also operate not busting required. So we haven't any problems with explosive but we continue to operate in Mali, and we continue to make money there. [indiscernible] is where we've invested a relatively small investment. We put USD 10 million into 11.6% of [indiscernible]. It is kind of a crowded register with Fortuna and obviously, Newmont dominating. Like our opinion is Newmont will eventually look to exit this asset and we'd really like to be there when they -- when they do, it's a tremendous asset that's been led by Andrew Chu, but it's -- we're hoping it grows in something bigger. And yes, 1 day possibly get the chance to bid for it and possibly build it. So it's a great asset in Cote d'Ivoire and the Guinean borders in a safe jurisdiction and as Ben mentioned earlier today, Cote d'Ivoire is a great jurisdiction, great infrastructure, great power great everything really. It's a growing up mature jurisdiction. That's -- we're quite interested to operate in again. In terms of our sustainability, we're over 90% local employees in Guinea already. We've only been in operation for just over 6 months. Our Mali operations over 97%. Guinea -- I'm sorry, Mali operated with the 3% of expats there, all coming from the West African sphere. So it is very much an African operated asset. It's -- overall, we've got about 2000 contract in indirect jobs. We probably generate another 2,000 employees during the construction of Bankan and another 1,000 direct jobs close to that, we've been an excellent safety record at all our operations. And what we see is development -- the development of Bankan and [indiscernible] should add over $5 billion to [indiscernible], not just to the economy to their actual -- to their state resources in royalties, pre-carried interest and corporate taxes over the next 12 years. So it is a massive contributor for the Kenyan economy and we see that's one of the -- one reasons we're pretty confident it's going to be permitted very soon. This is our objective for this year. We are on track to meet or exceed both cost and production guidance at [indiscernible]. We're somewhere in the middle of guidance at Nampala. We are very much advancing towards both those permits, and we've had some very good news of reason. And hopefully, that will be shared in the next couple of weeks. We really want to get Bankan compensated and construction underway this year, if at all possible. And then yes, work to continue drilling to extend the [indiscernible] at both Kiniero, Nampala and Bankan as we do that. So it's a great sort of pathway towards 400,000-plus ounces a year, which we think is going to happen. It's our border management and just quickly, we just look at the reserve update as of today. We added just over 400,000 ounces to the Kiniero reserves. It was just over 100,000 in depletion, 25,000 of that still in stockpiles. But yes, we went from 1.4 million ounces at the start of the year to over 1.75 at the moment. So we've -- and we did that through, I guess, economic factors in setting gold price for the reserve calculations at 2,200 and the resources at '24, and it's -- we obviously had a fair bit of drilling success in Nampala and we've extended those all reserves out we haven't attempted to update Bankan. There is a lot of drilling to do there, and we'll hopefully do that sometime next year, that's it for me, open up for the questions.

Does anyone have any questions from the floor? I would go 1 here in the front row.

Do you foresee that any of these operations either currently producing more will be produced will that higher average ore grade?

Higher average ore grade.

I guess, I mean, it's possible, I guess, with the higher gold prices we've been experiencing lately. It's economically better to process a lot more a lot more tonnes at lower grades, especially in saprolite. So as gold prices climb, I think the average grades globally are going to drop, and that's just a function of straight economics and pit optimization I doubt we'll be mining them at higher grades, but we're definitely producing -- we're hopefully overproducing on our gold forecast and obviously, cash accretion.

Any other questions from the floor?

Maybe just on the permitting at Bankan you're expecting that imminently. Are you ready to execute on that project? And what have you done [indiscernible].