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Edited Transcript of AKG.TO earnings conference call or presentation 8-May-19 10:59am GMT

Q1 2019 Asanko Gold Inc Earnings Call

Vancouver May 28, 2019 (Thomson StreetEvents) -- Edited Transcript of Asanko Gold Inc earnings conference call or presentation Wednesday, May 8, 2019 at 10:59:00am GMT

TEXT version of Transcript


Corporate Participants


* Gregory John McCunn

Asanko Gold Inc. - Director & CEO




Gregory John McCunn, Asanko Gold Inc. - Director & CEO [1]


Good day, everyone, and welcome to Asanko Gold's first videocast. We hope this will be a regular feature in the future and an improved way of communicating with our shareholders and other stakeholders.

Today, I'd like to talk about our Q1 2019 results and to give you an update on my views after my first month as CEO. The mine had a good start to the year, delivering a solid operational performance for the quarter. The operations produced 60,425 ounces of gold, our third consecutive quarter over 60,000 ounces. And we're on track to meet our guidance of 225,000 to 245,000 ounces of gold in 2019.

We also achieved a major milestone for the company with the start of mining operations at our Esaase pit in January. By quarter end, approximately 25% of the mill feed was coming from Esaase, and we expect this to continue for the foreseeable future.

Importantly, we met our production goals safely with no lost time injuries. The operations have now achieved over 2 years without a lost time injury. That's over 12 million man hours worked reflecting the strong culture of safety we built at the mine.

Financially, gold sales of 53,400 ounces generated $69 million in revenue as the realized gold price for sales in the quarter averaged $1,292 an ounce.

Now from a cost perspective, the mine's cash operating costs were $878 an ounce. And we had a bit of noise in our all-in sustaining costs this quarter, which were reported at $1,123 an ounce. But these costs included a negative accounting adjustment of $248 an ounce associated with the net realizable value of our stockpile inventory due to changes in the gold price. However, there were 2 real impacts on cost this quarter. Firstly, we incurred higher costs associated with the start of Esaase trucking operations. And secondly, with the continued waste stripping program or Cut 2 at the Nkran pit. With formal trucking contracts now in place and the waste stripping program expected to be complete by August of this year, we are expecting all-in sustaining cost to decline in the second half of the year, which would allow us to achieve our annual guidance of $1,040 to $1,060 per ounce.

The operations generated EBITDA for the period of $10.1 million and cash flow from operations of $8.8 million. As a result, the balance sheet of the joint venture is strong. As at March 31, the joint venture held just over $30 million in cash and gold bullion and no debt.

Corporately, Asanko Gold Inc. is also in a solid financial position with $8.8 million in cash and a final cash payment of $20 million related to the Gold Fields transaction expected later this year.

With a strong first quarter in the books, I'd like to take a few minutes to talk about the direction we're heading over the next 12 to 18 months.

Over the last month, I've had a chance to see, with our technical team, visit the mine site and meet with our joint venture partner. And I can tell you that the Asanko Gold Mine is in very good shape.

We're coming to the end of a significant capital expenditure program, which included a mill expansion from 3 million to 5 million tonnes per annum, a major push back of the Nkran pit and the initial development of infrastructure at Esaase. This positions us well to start reaping the benefits of these major investments, and it's our intention to shift our focus this year to maximizing cash flow from the operations and start generating a return on invested capital for Asanko and our joint venture partner.

So what you can expect from the company over the next 12 to 18 months is for us to continue to deliver on our production targets to drive down our all-in sustaining costs and to build cash on the balance sheet. Alongside this, we hope to continue to deliver a positive string of exploration results from the South Camp while working with our JV partner on formulating a longer life-of-mine plan for the AGM complex.

In summary, Asanko is in a strong position. It is well financed at both the joint venture and corporate level with no debt. It has an asset that's generating cash flow, and it has a very capable technical team of mine builders and operators. I think this puts us in an ideal place to embark on the next stage of our vision to become a mid-tier gold producer.

Thank you for watching. I hope you found this first videocast informative, and stay tuned for more.