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01/10 05:04
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Access earnings results, analyst expectations, report, slides, earnings call, and transcript.
The earnings call presents a mixed picture: strong adjusted net earnings and increased share buybacks are positive, but lower expected production and higher royalty costs at Oksut are concerns. The Q&A reveals management's confidence in project financing and improved project economics at Goldfield, but vague responses on Mount Milligan's production and recovery improvements raise uncertainties. Considering the market cap, these factors suggest a neutral stock price movement over the next two weeks.
Gold production Over 63,000 ounces in Q2 2025, driven by high commodity prices. Mount Milligan contributed over 35,000 ounces, while Oksut contributed over 28,250 ounces. Oksut's production was better than planned due to higher grades from mine sequencing.
Copper production 12.4 million pounds in Q2 2025, with all production coming from Mount Milligan.
All-in sustaining costs (AISC) at Mount Milligan $1,286 per ounce in Q2 2025, 10% higher than the previous quarter due to increased sustaining CapEx and lower ounces sold.
All-in sustaining costs (AISC) at Oksut $1,755 per ounce in Q2 2025, higher than the previous quarter due to increased royalty expenses driven by elevated gold prices.
Consolidated all-in sustaining costs (AISC) $1,652 per ounce in Q2 2025, reflecting lower expected production at Mount Milligan and higher royalty costs at Oksut.
Adjusted net earnings $53 million or $0.26 per share in Q2 2025, benefiting from strong metal prices.
Sales Over 61,000 ounces of gold and 12 million pounds of copper in Q2 2025. Average realized price was $2,793 per ounce of gold and $3.62 per pound of copper.
Molybdenum sales Approximately 3.1 million pounds sold at an average realized price of $21.43 per pound in Q2 2025.
Cash flow from operations $98 million before working capital and income taxes paid in Q2 2025, a 22% increase over the previous quarter. After tax and royalty payments, consolidated cash flow from operations was $25 million.
Free cash flow Deficit of $25 million in Q2 2025. Mount Milligan generated $43 million in free cash flow, while Oksut had a deficit of $28 million due to $84 million in tax and royalty payments to the Turkish government.
Share buybacks 3.9 million shares repurchased in Q2 2025 for $27 million, an 80% increase compared to the previous quarter. Total buybacks in the first half of 2025 amounted to $42 million.
Dividends Quarterly dividend of $0.07 per share declared in Q2 2025. Total capital returned to shareholders in the first half of 2025 was $63 million through dividends and buybacks.
Cash balance $522 million at the end of Q2 2025, with total liquidity exceeding $920 million.
Goldfield Project: Advancing in Nevada with an after-tax NPV of $245 million and IRR of 30%. Expected to produce 100,000 ounces annually during peak years with a 7-year mine life. Initial capital cost is $252 million, with production starting by the end of 2028.
Mount Milligan PFS: On track for Q3 2025 completion. Evaluating increased annual mill throughput by 10% with modest capital cost. Extending mine life beyond 2036 with additional tailings capacity.
Kemess Project: Advancing PEA for open pit and underground mining, expected by end of 2025. Existing infrastructure reduces execution risk.
Gold Hedging Strategy: Implemented a hedging strategy for 50% of gold production in 2029-2030 with a price floor of $3,200/oz and cap of $4,435-$4,705/oz, ensuring strong margins and predictable cash flow.
Operational Leadership: New COO and General Manager at Mount Milligan have initiated infill and grade control drilling, improving operational focus and confidence in future performance.
Sustainability Initiatives: Published 2024 sustainability report. Achieved compliance with International Cyanide Management Code and ISO 5001 certification for energy management. Increased local procurement spending by 26% to $134 million.
Production Guidance Updates: Mount Milligan gold production guidance adjusted to 145,000-165,000 ounces for 2025. Oksut reaffirmed guidance with higher production expected in H2 2025.
Capital Allocation: Increased share buybacks by 80% in Q2 2025, repurchasing $27 million worth of shares. Declared $0.07/share dividend. Returned $63 million to shareholders in H1 2025.
Thompson Creek Restart: 20% of capital investment complete, with $82 million spent. On track for first production in H2 2027.
Mount Milligan gold grades: Mining operations encountered zones with more challenging mineralization, resulting in lower-than-anticipated gold grades. This variability is attributed to certain zones being drilled with wider spacing, impacting production guidance and costs.
Oksut royalty costs: Higher royalty costs stemming from elevated gold prices and an updated royalty structure approved by the Turkish government have increased all-in sustaining costs, impacting financial performance.
Thompson Creek restart: The restart of Thompson Creek requires significant capital investment, with $82 million spent so far and a total initial capital estimate of $397 million. This poses financial and execution risks.
Goldfield Project execution: While the project has favorable economics, it requires $252 million in initial capital and is subject to execution risks, including maintaining the projected timeline to first production by the end of 2028.
Molybdenum business unit: The unit experienced a free cash flow deficit of $27 million this quarter, mainly due to spending on the Thompson Creek restart, impacting overall financial performance.
All-in sustaining costs: Consolidated all-in sustaining costs on a byproduct basis have increased to $1,650-$1,750 per ounce for 2025, driven by lower production at Mount Milligan and higher royalty costs at Oksut.
Cash flow at Oksut: Oksut's cash flow was negatively impacted by $84 million in tax and royalty payments to the Turkish government, resulting in a free cash flow deficit of $28 million for the quarter.
Mount Milligan PFS: Work on the Pre-Feasibility Study (PFS) is on track to be completed in the third quarter of 2025. The study evaluates substantial mineral resources to unlock additional value beyond the current mine life of 2036. It incorporates an increase in annual mill throughput by 10% through ball mill motor upgrades at a modest capital cost.
Kemess Project PEA: The Preliminary Economic Assessment (PEA) for the Kemess Project is on track for completion by the end of 2025. The project is based on an open pit and conventional underground mining concept, with significant existing infrastructure requiring targeted refurbishment. New crushing, conveying, and mining infrastructure will also be developed to support operations.
Goldfield Project: The Goldfield Project in Nevada is advancing, with a targeted first production by the end of 2028. The project has a 7-year mine life, peak annual production of 100,000 ounces, and an all-in sustaining cost of $1,392 per ounce. Initial capital cost is $252 million, and the project is expected to generate robust cash flow and deliver significant shareholder value.
Gold Hedging Strategy: A targeted hedging strategy has been implemented for 50% of gold production in 2029 and 2030, with a gold price floor of $3,200 per ounce and an average price cap of $4,435 in 2029 and $4,705 in 2030. This strategy aims to safeguard project economics and ensure predictable cash flow during the ramp-up period.
Mount Milligan 2025 Guidance: Gold production guidance for 2025 has been updated to 145,000-165,000 ounces, with copper production guidance reaffirmed at 50-60 million pounds. Production and sales are expected to be weighted towards the second half of the year. All-in sustaining costs are now expected to be $1,350-$1,450 per ounce.
Oksut 2025 Guidance: Production guidance for 2025 has been reaffirmed, with higher production expected in the second half of the year due to access to higher-grade areas. All-in sustaining costs are now expected to be $1,675-$1,775 per ounce, reflecting higher royalty costs and an updated royalty structure approved by the Turkish government.
Thompson Creek Restart: The restart of Thompson Creek is advancing, with 20% of the total capital investment complete. The project remains on track for first production in the second half of 2027, with a total initial capital estimate of $397 million.
Quarterly Dividend: Declared a quarterly dividend of $0.07 per share.
Total Dividends in 2025: Returned $63 million to shareholders through dividends and buybacks in the first 6 months of 2025.
Share Buyback Program: Repurchased 3.9 million shares for $27 million in Q2 2025, an 80% increase compared to the previous quarter.
Total Share Buybacks in 2025: Board approved repurchase of up to $75 million of shares through NCIB in 2025, with $42 million repurchased in the first half of the year.
The earnings call presents a mixed picture: strong adjusted net earnings and increased share buybacks are positive, but lower expected production and higher royalty costs at Oksut are concerns. The Q&A reveals management's confidence in project financing and improved project economics at Goldfield, but vague responses on Mount Milligan's production and recovery improvements raise uncertainties. Considering the market cap, these factors suggest a neutral stock price movement over the next two weeks.
The earnings call summary presents a mixed picture. While there are positive developments like the restart of Thompson Creek and share buybacks, challenges such as lower production at Mount Milligan and Öksüt, as well as significant restart costs, pose risks. The Q&A section reveals management's cautious approach and lack of clarity on some projects, which may cause investor uncertainty. The positive shareholder return plan and stable financial health balance out the negatives, leading to a neutral sentiment. Given the company's small market cap, the stock price is likely to remain within a -2% to 2% range.
The earnings call presents a mixed picture. Financial metrics are stable, with strong cash flow and liquidity, but there are no significant year-over-year improvements. The company's commitment to share buybacks and dividends is positive, yet there are concerns about lower gold recoveries and limited exploration potential at key sites. The Q&A section reveals cautious optimism but also highlights uncertainties in future growth and production targets. Given the market cap, the overall sentiment suggests a neutral stock price reaction in the short term.
The earnings call reflects strong financial performance with increased production and sales, stable cost management, and robust cash flow. Despite some cost management challenges and regulatory risks, the company maintains a strong liquidity position and continues shareholder returns through dividends and buybacks. The Q&A section revealed concerns about cost increases and inflation but management's responses were generally reassuring. The unchanged production guidance and positive cash flow expectations further support a positive outlook. Given the company's market cap, the stock price is likely to react positively, but not strongly, resulting in a 'Positive' prediction.
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