i-80 Gold Corp. Q3 FY2023 Earnings Call

Good morning. My name is Ina and I will be your conference operator today. At this time, I would like to welcome everyone to the i-80 Gold Corp. Third Quarter 2023 Financial and Operational Results Conference Call. Thank you. Mr. Gollat, you may begin your conference.

Thanks, Ina, and welcome, everybody. Thank you for joining us for our quarterly conference call this morning. We're pretty excited to talk to you about the past quarter and the past year, about all the things we've accomplished and our plans going forward. So I'm Matt Gollat, as I mentioned, on Slide 2. With me on the call is Ewan Downie, CEO, and Matt Gili, President and Chief Operating Officer, as well as Ryan Snow, Chief Financial Officer. Moving on to Slide 3 is our disclaimer page. We will be making forward-looking statements, so I encourage everybody to take some time to read this slide and understand it as several things we are mentioning are certainly forward-looking. With that, I'm going to turn it over to Slide 4, and Ryan Snow will take us through the financial results. Thanks.

Thanks, Matt. Good morning, all. The company reported our financial statements and MD&A for the third quarter and first nine months of 2023 yesterday after market. They can be found on SEDAR, EDGAR, and our website. On Slide 4 of the presentation, we provide a graph of our production and sales by quarter for the year. This production is from the residual leaching activities at both Ruby Hill and Lone Tree and the oxide material on leach from Granite Creek that we have produced and sold. The third quarter production was 4,585 ounces, and year-to-date production was 11,263 ounces. In addition to the gold ounces sold, the company sold 1,659 tonnes of mineralized material under the ore purchase agreement in the third quarter, bringing the year-to-date total to 22,710 tonnes of mineralized materials sold. Note that the 10,000-tonne parcel under the sulphide toll milling agreement has been shipped to Nevada Gold Mines, and we expect to finalize the results of the test parcel and to commence regular sulphide shipments to NGM in the fourth quarter, leading to a significant increase in our gold production and sales. Additional Q3 highlights on Slide 5 of the presentation show our revenue for the quarter of $13.2 million, bringing year-to-date revenue to $29.1 million. The company generated a mine operating loss of $0.5 million for the quarter and $7.5 million year-to-date. The mine operating losses year-to-date were primarily the result of write-downs of leach pad inventory at both Ruby Hill and Lone Tree totaling $8.5 million. The company reported a net loss for the quarter of $4.2 million or $0.01 per share. When adjusted for the impact of mark-to-market gains on the company's convertible debt, outstanding warrants, gold prepay modification, gold prepay, and silver purchase and sale agreement, the loss was $26 million or $0.09 per share. For the year, the company is in a loss position of $33.3 million or $0.13 per share, and when adjusted for the items previously mentioned, the reported adjusted loss for the year is $65.5 million or $0.25 per share. The company continued to invest in exploration and evaluation of predevelopment in the third quarter of 2023 with $10 million invested, bringing the 2023 total to $30.1 million. This investment continued to produce many great results in the third quarter, a summary of which was provided in our press release yesterday and will be touched on later in this call. Slide 6 of our presentation highlights the company's liquidity position. During the quarter, we completed a bought deal private placement and an amendment to the gold prepay, adding $46.6 million to the treasury. The company ended the quarter with $37.7 million in cash and had an inventory balance of $19.1 million. Current assets were $67.6 million, while accounts payable and accrued liabilities were $19.3 million, and total current liabilities were $60.3 million, resulting in a current ratio for the company of 1.1:1. Subsequent to the end of the quarter, the company repaid the third and fourth milestone payments related to the purchase of Ruby Hill for $10 million in cash and $10 million of shares in the company. This payment satisfies the final payment obligations concerning Ruby Hill. Finally, I want to highlight that the company does have $44 million in restricted cash and ended the quarter with total net assets of $448 million. Now, I'd like to turn the call over to Ewan Downie.

Thank you, Ryan. I will provide a quarterly update on our project advancements and discuss the company's strategy. As shown on Slide 7, we are solely focused on gold production in the U.S. Currently, we are the largest U.S. gold producer, with all our projects situated in Nevada, recognized as one of the most favorable mining jurisdictions globally. Our holdings include 6.46 million ounces of gold and 104 million ounces of silver in measured and indicated resources, along with 8.15 million ounces of inferred gold and 76.4 million ounces of silver. Since our inception about 2.5 years ago, our aim has been to become the second-largest gold producer in the United States. We have one mine beginning its initial production and three projects in development or permitting. We’ve built a strong and accredited management team experienced in operations in Nevada. Slide 8 shows a graph of pure-play U.S. gold producers, with only three such producers in the country, of which we are one. Our 5-year plan is to scale our production to exceed 400,000 ounces of gold equivalent annually, starting with our first production at Granite Creek in 2023. On Slide 9, we highlight why we operate solely in Nevada, which the Fraser Institute ranks as the most favorable jurisdiction for mining policy, perception, and investment attractiveness. The state enjoys secure land ownership, a stable government, and a robust history of mining. If Nevada were a country, it would be among the top five gold-producing nations worldwide. The majority of this production, displayed on Slide 10, is centered in North Central Nevada, near towns like Carlin, Elko, Battle Mountain, and Winnemucca, which host the Carlin and Battle Mountain Trends with several producing mines. Nevada Gold Mines, formed by combining assets of Newmont and Barrick, the world's largest gold producers, currently produces about 3 million ounces annually from this region. We have five project sites within Nevada, strategically located near Nevada Gold Mines operations, making us the second-largest holder of gold and silver resources in North Central Nevada. Slide 11 shows that we operate two processing facilities: the Lone Tree processing site, which is equipped with a refractory processing facility and an autoclave—one of only five in Nevada—and the Ruby Hill processing facility, which we aim to convert into a base metal processing plant while focusing on defining its polymetallic resources. We have secured processing agreements with Nevada Gold Mines, allowing us to process up to 1,000 tonnes per day through their autoclaves and 750 tonnes per day through their roaster. Slide 12 illustrates the gold holdings of major U.S. companies, particularly in Nevada, where most gold resources are located. We currently rank third in total gold resources, and with ongoing drilling and updates to our polymetallic deposits, we anticipate moving into the second position after Nevada Gold Mines. As noted on Slide 13, we possess some of the highest-grade open-pit and underground operation deposits in North America. Our Granite Creek and Cove projects showcase grades exceeding 10 grams per tonne. We will soon complete 43-101 compliant gold resource estimates for the Hilltop polymetallic deposit and our Blackjack and FAD projects at Ruby Hill, based on our current drilling campaigns, which will continue through the end of this year. Slide 14 presents our broader plan, with the Lone Tree complex serving as our main processing facility. The mineralization from Granite Creek, Ruby Hill, and Cove will feed this complex for its startup. The Ruby Hill complex, shown in the lower left, currently houses an idle gold plant, which we intend to convert into a base metal flotation plant. Slide 15 features the Lone Tree processing site, which includes an active heap leach nearing its end of life, complemented by our autoclave and a flotation circuit processing 1.8 million tonnes per year. This facility is strategically located on Interstate 80, making it ideal for our operations. On Slide 16, Granite Creek is highlighted as our most advanced asset, with two portals accessing high-grade underground mineralization currently being mined. As depicted on Slide 17, the mineralization from Granite Creek is being transported for processing at Twin Creeks, where we began shipments of refractory ore this quarter. Our initial rehabilitation efforts at the Granite Creek operation included test mining, identifying the OG zone with the best rock qualities, and we’ve expanded our underground workings significantly this year. We’ve begun drilling in the South Pacific zone to convert inferred mineral resources into measured and indicated ones for future technical studies. On Slide 19, we show grade reconciliations indicating that our mined levels have exceeded 10 grams per tonne and yielded substantial ounces per level. We’re working toward initial access to the South Pacific zone, with exciting drilling results indicating substantial grades and widths. Slide 20 introduces Ruby Hill, a significant deposit for both gold and polymetallic mining, which has seen historical production and includes extensive infrastructure. We intend to advance our processing site and drilling operations to facilitate polymetallic production. On Slide 21, we highlight the Eureka district's long mining history, with the Ruby Hill project having valuable mineralization potential. We aim to upgrade the resources significantly at Ruby Hill as we advance our projects. Slide 22 visualizes the close association between our deposits, showing impressive intercepts achieved in our current drilling program. The Blackjack deposit, for instance, demonstrates remarkable assays and remains open for expansion. Slide 23 discusses our longer-term plan, including permitting declines to access multiple deposits, with a full permit anticipated in the first half of 2024. For Cove, shown on Slide 24, we've successfully defined a Carlin-type deposit with approximately 1.7 million ounces of high-grade gold. We've embarked on an underground program and are progressing with our exploration drilling to upgrade inferred resources for future feasibility studies. Slide 26 showcases numerous significant intercepts from our drill campaign at Cove, indicating exceptional continuity and high grades, reaffirming it as a high-grade development stage deposit we aim to advance toward full mine development. Lastly, Slide 28 emphasizes our active ESG program and community contributions. Slide 29 summarizes our growth strategy to become Nevada's second-largest gold producer, emphasizing resource growth and production increases toward achieving self-sustainability. Thank you for joining today’s conference; we will now open up for questions from our team, including discussions on operations, corporate growth, and financial matters. Thank you.

I'd like to thank you for joining the call this morning. Sorry, sorry, go ahead.

No, you go ahead, Matt.

Thanks, everybody, for joining the call this morning. As you mentioned, we are all available today to speak to anyone about the quarter, our plans, or the company. So feel free to reach out to Matt, Ryan, myself, or Ewan, and we'd be happy to chat with you. Thanks again for your time.

Thank you. Ladies and gentlemen, that concludes our conference for today. Thank you all for participating. You may all disconnect.