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Edited Transcript of ASR.TO earnings conference call or presentation 29-Oct-19 8:00pm GMT

Q3 2019 Alacer Gold Corp Earnings Call

ENGLEWOOD Oct 31, 2019 (Thomson StreetEvents) -- Edited Transcript of Alacer Gold Corp earnings conference call or presentation Tuesday, October 29, 2019 at 8:00:00pm GMT

TEXT version of Transcript

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Corporate Participants

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* Lisa Maestas

Alacer Gold Corp. - Director of IR

* Mark E. Murchison

Alacer Gold Corp. - CFO

* Rodney P. Antal

Alacer Gold Corp. - President, CEO & Executive Director

* Stewart J. Beckman

Alacer Gold Corp. - COO

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Conference Call Participants

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* Don DeMarco

National Bank Financial, Inc., Research Division - Analyst

* Mark Mihaljevic

RBC Capital Markets, LLC, Research Division - Analyst

* Michael Slifirski

Crédit Suisse AG, Research Division - MD

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Presentation

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Operator [1]

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Thank you for standing by. This is the conference operator. Welcome to the Alacer Gold's Third Quarter 2019 Operating and Financial Results Conference Call. (Operator Instructions) And the conference is being recorded. (Operator Instructions)

I would now like to turn the conference over to Lisa Maestas, Director of Investor Relations. Please go ahead.

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Lisa Maestas, Alacer Gold Corp. - Director of IR [2]

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Thanks, Carl. Welcome, everyone, and thank you for joining us today for Alacer Gold's Third Quarter 2019 Operating and Financial Results Conference Call. Joining me on the call are Rod Antal, our President and Chief Executive Officer; Stewart Beckman, our Chief Operating Officer; and Mark Murchison, our Chief Financial Officer.

Alacer Gold is listed on the Toronto Stock Exchange as ASR and on the Australian Stock Exchange as AQG. This conference call is available via webcast, and the link and slides to accompany our remarks can be found on our website at alacergold.com. All documents released today can also be found on sedar.com and asx.com.au.

This presentation includes endnotes, and this call will also include forward-looking information. Please refer to the forward-looking language and endnotes included in the end of our presentation.

Additionally, all dollar amounts in this presentation are expressed in U.S. dollars and on 100% basis, unless otherwise noted. Following today's presentation, we will open up the call for a Q&A session.

I'd now like to turn the call over to Rod Antal, and if you could please turn to Slide 2.

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Rodney P. Antal, Alacer Gold Corp. - President, CEO & Executive Director [3]

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Well, hello, everyone, and thank you very much for joining us today.

We've delivered another solid round of operating and financial results in quarter 3. And as you can see from this slide, the transformation of Alacer has been incredible. Our annual production will be above 380,000 ounces, which is a significant step change from where we were this time last year. But the best part of this transformation, of course, is the material cash flow generation from the low-cost ounce production at Çöpler that is in the first quartile of All-in Sustaining Costs across the industry. With all of this, we clearly have the foundation set: a balance sheet we will utilize to grow in the future through internally generated capital resources; a track record of delivery; and, of course, what is most important to us, a long-life asset.

So before we get into the quarterly results, I'm going to spend a few minutes on how we're going to leverage this excellent foundation to continue to execute on the highly attractive organic growth pipeline we have created. As we plan for the future, the objective for our strategy is simple. We want to maintain yearly gold production in the range of 300,000 to 400,000 ounces for at least the next 10 years. The delivery of this strategy will come from 2 areas: optimize our existing sulfide operations; and concurrently improve oxide gold production through new discoveries.

So let me provide just a little bit more detail starting with the sulfides. With the sulfide plant in operation for almost a year, we are very pleased with the progress of the ramp-up, and you will start to hear us talk a lot more about the opportunities to optimize the sulfide plant above design rates in the future. Stew is going to talk more about this in just a moment.

The concurrent objective is to improve the oxide gold production profile where we have been making excellent progress to grow our oxide reserve base from existing and new mines. In order to facilitate this growth, we have just begun construction on the first phase of a 25 million tonne heap leach pad expansion. We have also reviewed the spectrum of oxide opportunities that have been organically created and have categorized those in near, medium and long term that you will see later in the presentation.

In the near term, we will mine the current oxide reserves, while supplementing the oxide gold production profile with additional oxide from our in-pit exploration program that has been very successful to date. Our success is evidenced by today's announcement to again increase oxide gold production guidance for 2019.

In the medium term, we will look to materialize our ongoing exploration success with new mines at Çakmaktepe, Ardich and, of course, the Çöpler Saddle. In these regards, we'll be issuing an update interim resource at Ardich very soon.

Exciting times indeed for us as a company as we continue to deliver, evolve and grow. So I'm going to turn to Slide 3 and just talk about the year-to-date highlights.

Our safety performance has been excellent. Unfortunately, at the end of August, and after many years, we had our first lost-time injury, the result of which is refocused our energy to ensure we continue to provide a safe workplace for all. You can see on this slide a number of the year-to-date highlights, and I want to just mention a few.

The operations continue to deliver with production of 290,000 ounces at consolidated All-in Sustaining Costs of $714 per ounce in the first 9 months of the year. The ramp-up of the sulfide plant is on track, and our exploration program is delivering opportunities to grow on all fronts. As I mentioned, we increased oxide gold production guidance and expect sulfide plant production to be within the guidance range, which is a great outcome when you consider we've been in a ramp-up year and still are.

We continue to strengthen the balance sheet with a net debt of $110 million at the end of September, and this has been further reduced to below $90 million year-to-date. At the end of quarter 3, our balance sheet had a net debt to EBITDA of less than 0.5, which is an amazing position we have worked really hard to deliver.

So with that, I'm going to hand this call over to Mark to provide an update on the financials, which start on Slide #4.

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Mark E. Murchison, Alacer Gold Corp. - CFO [4]

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Thanks, Rod, and hello, everyone.

I'll focus my comments on this slide to the year-to-date numbers. 290,000 ounces of gold were sold year-to-date, generating $396 million in proceeds. Operating cash flows year-to-date of $161 million were generated as reflected in the cash flow statement. As a reminder, this does not include the positive operating cash flow of approximately $50 million from the sulfide plant for the first 5 months of the year prior to the declaration of commercial production. As required by the accounting standards, this amount was capitalized to the construction cost of the sulfide plant.

Year-to-date, attributable net profit or earnings was $43 million or $0.15 per share. However, included in the earnings is the impact of various unrealized noncash items. In order to provide an accurate picture of the underlying earnings of the corporation, we have shown a reconciliation of the attributable EPS of $0.15 to a normalized attributable earnings per share of $0.26 on the right-hand side of the slide. The adjustments relate to the noncash impact arising from the Gediktepe sale, unrealized noncash losses arising from the devaluation of the Turkish lira, incentive tax credits recognized from the spend on eligible projects and unrealized noncash share-based compensation expense.

A couple of other items to note. Firstly, DD&A. The declaration of commercial production on the sulfide plant on 31 May triggered the start of depreciating the plant. As a guide, we forecast DD&A for each plant going forward will be for the oxide plant around $150 per ounce of production and for the sulfide plant around $300 per ounce of production.

Tax. We expect the accounting effective tax rate going forward will normalize as the recognition of incentive tax credits generated will diminish with completion of the sulfide plant construction. However, we are currently undertaking a detailed review of the incentive credits recognized from the almost $700 million investment on the sulfide plant with the potential for additional credits to be recognized. We will provide an update of this review in future quarters. In regard to the effective cash tax rate, we forecast the rate to be around 5% going forward after factoring in the outcomes from the significant investment we have made in the sulfide plant.

Finally, and most importantly, cash. Underlying the earnings are robust cash outcomes. Operating cash flow year-to-date was $161 million. And as noted, this does not include the approximately $50 million from the sulfide plant for the first 5 months of the year prior to the declaration of commercial production. We had unlevered free cash flow year-to-date of $138 million, and the strong free cash flow generated the Q3 closing consolidated cash balance of $188 million with outstanding debt at the end of Q3 was $298 million, resulting in net debt at the end of the quarter of $110 million. As Rod noted, the net debt position continues to reduce at pace with the current net debt position today reducing further to below $90 million.

And please turn to the next slide. A brief overview of our key operating highlights. We produced 290,000 ounces of gold at the end of Q3 with 161,000 ounces from the sulfide plant and 129,000 ounces from the oxide plant. We are on track to meet the increased consolidated production guidance for the year of 380,000 ounces to 430,000 ounces. The consolidated All-In Sustaining Cost year-to-date of $714 per ounce is in the lowest quartile for the industry, and we're on track to meet consolidated guidance for the year of between $675 per ounce to $725 per ounce.

As noted on the previous slide, cash generation is strong. There has been a step-change in cash generation in Q3 with operating cash flow of $101 million and an unlevered free cash flow for Q3 of $73 million. This step-change is the result of successful completion and close-out of the sulfide plant construction, successful ramp-up of the sulfide plant, higher oxide plant production and lowest quartile All-In Sustaining Cost profile. We expect this strong cash generation to continue and further strengthen the corporation's financial position.

I'll now hand the call over to Stew for an overview of the operations.

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Stewart J. Beckman, Alacer Gold Corp. - COO [5]

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Thanks, Mark. As always, I want to start with HSEC. We have a stellar safety performance run with more than 22 million hours achieved LTI-free, including through more than 13 million hours of the sulfide plant construction. Unfortunately, in August, we had our first incident in a long time where stationary truck toppled over while dumping, injuring the driver, resulting in an LTI. He will make full recovery.

We've also seen an increase to our total recordable injury frequency rate to about 2 per million hours worked. The increased TRIFR is somewhat related to our big step-up in exploration fieldwork in 2019. Our team is absolutely committed to improving what is still a very good HSEC performance. We believe strongly that HSEC is a foundation of good ethical and productive business performance.

Our new sustainability development program is starting to get some real traction with over 30 groups participating in the first round and some already showing positive financial returns. We are reviewing the second round of applicants now. And due to the success of the first round, we have nearly 400 applications. By the end of this year, we'll have committed about $1 million to this development fund. Programs such as this, along with others aimed to training, developing and supporting a local community are an important part of maintaining our harmonious, engaged community with diverse livelihood options.

Now please move to the next slide and we'll discuss the sulfide plant performance. Ramp-up of the sulfide plant has been excellent. And it is now operating routinely at design throughputs and for periods, above design. Recoveries for the quarter were about 93%, which is within 2% to 3% of design. We have not identified any major issues in the plant to require redesign or significant works.

When we completed the shutdown for the first autoclave earlier this year, we found it in the outstanding condition with very little scale and almost no wear. This bodes well for the future. The immediate results of the lengthening of the shutdown frequencies was to push out the major plant shutdown for autoclave 2 into early 2020. We are closely monitoring autoclaves and doing some shorter shutdowns to undertake routine maintenance to the autoclave's external piping and valve.

We have started work from taking the sulfide plant to above design rates. You might remember that we have 2 autoclave trains and that they are both designed to do 75% of total plant flow. That is, when both of them are running, they are designed to be able to do 150% of plant flow.

We have also found plenty of spare capacity in our grinding circuit. Grinding and the autoclaves are very capital-intensive areas of the plant, and so their apparent spare capacity provides us great opportunity to increase plant throughput at a relatively low cost. We are not yet ready to promise this improvement, but will of course keep you informed of our progress.

Now let's talk about the oxide performance, another success story and please turn to the next slide. Oxide performance continues to be outstanding, delivering 33,000 ounces of gold production and 45,000 ounces stack for the quarter. Production benefited from better than originally estimated performance of our blended ore program, the in-pit exploration success and some positive reconciliation. Processing of Çakmaktepe ore, our first satellite mine, has been highly successful. And just last month, we completed mining of Phase 1. We had a positive reconciliation in Phase 1 and have gone back in the Çakmaktepe exploring with gusto, drilling 58 diamond holes in just 2 months for about 4,200 meters. Using what we've learned from mining of Phase 1 of Çakmaktepe and the recent intensive exploration effort, we are very confident that we will add even more ounces to what is in the current reserve. We are in the process of completing this stage of exploration, ready for modeling and preparation of the mining schedules.

In West Pit, mining reached the ore zone during the quarter. The expansion of this pit was a result of our in-pit exploration program. We released a press release for the Çöpler Saddle in September, which showed some holes around the West Pit. I will talk more about the release later. So far, we've been delighted with the pit outperforming our expectations. Exploration is currently accessing the back of the pit to see if we can push the pit wall back and access even more of the mineralization. As a result of the exploration success generating lots of extra oxide ore is that the heap leach capacity is steadily being filled. We completed engineering work, approved and have started Phase 1 of the heap leach expansion, which will provide approximately 6 million tonnes of additional capacity for about $12 million. Engineering of the subsequent phases, which will provide a total of about 25 million tonnes, is well advanced and will be completed in time to avoid any chance of delay to oxide processing.

As you can see, our strategy to find, develop and deliver extra oxide ounces, additional to that declining reserve, has been highly successful. So much so, as Rod mentioned, we have, for the second time this year, increased our guidance for oxide production. We plan to make this trend continue, and I'll talk more about our strategy on the next slide.

Please move to Slide #8. I wanted to take a few minutes to discuss our pathway to increase the oxide ounces materially beyond our current reserve. Our strategy is to pursue with tenacity, multiple prospects for extra ounces across each of the time horizons. In the current near term, you can see we have 5 areas, some are already delivering extra ounces and others are looking highly perspective. These areas, some already with resources and reserves, all have current mining permits that allow us to deliver supplemental tonnes immediately and through the next couple of years. In the medium term, we have areas that we already have discoveries in and that abut the existing mining permitted areas. This allows us to modify the existing permits to facilitate access and also lowers the cost and build time to gain access. We have 4 areas of focus: Ardich North; Ardich South; Çakmaktepe; and the Çöpler Saddle. Our aim is to try and access these areas in the next 2 to 3 years.

We are blessed to have so many outstanding prospects on our doorstep. The beauty of this is that should we -- is that we should be able to deliver all from one or more of the prospects within each of the time horizon, even if one of the areas is delayed in development for some unforeseen reason. This bolsters our confidence in being able to increase oxide ore production.

I should also point out that all of the near- and medium-term targets also have a component of sulfidic ore. Ore from these areas, if higher grade, will replace or supplement Çöpler ore to feed the sulfide plant and so increase the sulfide plant production.

Let's finish off the operations and development section with a quick review of our recent exploration releases to the Çöpler Saddle and Ardich on the next couple of slides. Please move to Slide 9 for Çöpler Saddle. This was our first release of exploration holes for the Çöpler Saddle. The exploration area for Çöpler Saddle is quite big, abutting the Western flank of the Çöpler Mine. So far, our exploration focus has been on the shear zone, which runs for about 2 kilometers, in part through the edge of the already permitted mining areas. As mentioned earlier, we are already mining some of the shear zone in the West Pit, delivering extra ounces from outside of our reserve. We will include some ounces expected from West Pit in our guidance for next year and are working feverishly to expand the pit and its contribution.

The Northern and Southern areas of the shear, and the figure on Page 9, are outside the currently permitted mining area. I would like to point out the impressive holes of the Southern extent of the exploration drilling, 774 and 786. We're drilled in an angle intended to intersect the shear at 90 degrees in an attempt to measure true mineralization thicknesses. This is a great prospect. And even though a small portion of it extends into an operating area, it is in the, most part, very early in the exploration process.

Please jump to Slide 10 for a quick update on Ardich. We updated the resource in April, increasing the indicated resource by 117% to over 600,000 ounces. We released more drill results in August, which showed that the mineralization now extends over 1.2 kilometer with some really impressive new holes, including 50.6 meters at 2.73 and 29 meters at 4.8 grams per tonne. Drilling continues at Ardich, both step-out and infill. While the strike length is already impressive, our field mapping leads us to believe that Ardich strike length could be more than 2 kilometers long. The Ardich deposit is adjacent to Çakmaktepe and only 6 kilometers North of the Çöpler Mine. As we did with Çakmaktepe, we are aiming to fast track Ardich, leveraging off the existing infrastructure.

We will update the resource estimate this quarter. This updated resource will, of course, be another interim resource as we will only be able to include areas with high enough drill density. We are making big step-outs and so some of the areas will only have couple holes in them, and we'll have to wait for more drilling and subsequent resource updates for those to be included. We are now focusing exploration activities on the Southern area to bring it in line with the fidelity of work done in the discovery area to the North. The Southern area, though being behind in exploration status, may be quicker and easier to develop given that it abuts the Çakmaktepe mining area. As I've discussed earlier, this is part of our strategy to pursue multiple development opportunities. Our development team is already working on Saddle pit options and permitting for the areas where we have enough depths to do so.

I'll now hand the presentation back to Rod.

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Rodney P. Antal, Alacer Gold Corp. - President, CEO & Executive Director [6]

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Well, thanks very much, Stew and Mark. It's clear we have the potential to grow from the existing portfolio. And I'm sure, by now, you all have a sense of the programs that we're currently advancing to achieve this objective. With our strong balance sheet and our exploration delivering results, all the pieces are in place to advance our growth strategy.

So with that, operator, I'd like to open up the call for questions.

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Questions and Answers

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Operator [1]

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(Operator Instructions) Our first question comes from Michael Slifirski of Crédit Suisse.

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Michael Slifirski, Crédit Suisse AG, Research Division - MD [2]

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Three questions, please. First of all, you talked about 25 million tonnes of heap leach capacity to be added, giving you some 5 years -- some 5 million tonnes a year. Is that sort of the rate you'd be seeking about for Ardich? And if Ardich is at a higher grade than the average heap mines to date, does the oxide plant have sufficient capacity in all parts to deal with that implied higher metal content?

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Rodney P. Antal, Alacer Gold Corp. - President, CEO & Executive Director [3]

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Mike, I'll ask Stew to answer as well. But in terms of the 5 million tonnes, it's really our capacity around the processing capability at the front end to stack it up on the heap leach pad. So remember, our better years have been sort of 5 million to 6 million tonnes, so it's really more rule of thumb than it is targeting -- targeted, specifically for Ardich because that will come as we understand in more detail what Ardich actually means to us. But I think it's really just to give a sense that, ultimately, we have plenty of years of capacity in front of us to utilize. Stew, do you want to talk about the [grade] (corrected by the company after the call)?

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Stewart J. Beckman, Alacer Gold Corp. - COO [4]

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Yes. So Michael, we've -- we can manage the higher grade through the CIC and the desorption circuit, so that won't be an issue for us. And we do see very high rates come through from time to time, so it won't be an issue.

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Michael Slifirski, Crédit Suisse AG, Research Division - MD [5]

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Okay. Secondly, in terms of Ardich, the existing resource that you declared, that's 500 or 600 meters if I recall. And you're saying that the update will include the full 1.2 kilometers or a portion of that. How much strike length are you adding for the next resource statement?

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Stewart J. Beckman, Alacer Gold Corp. - COO [6]

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In to the resource, well, not as much as we can, but it'll depend on what the drill density is. So the geologist are at the point now where they're going through and just determining which areas have got a high-enough drill density to be included. And so I think it is actually a really good point to bring up again that what we issued this time will just be another interim phase because it just depends really on -- more so on how much drill density we've got rather than whether or not we think the mineralization is there.

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Michael Slifirski, Crédit Suisse AG, Research Division - MD [7]

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Yes. Okay. With the production to date, I guess, we have to extrapolate beyond what we can see, and that's not too hard to do. But if we do it on a reserve depletion basis for oxide, how much of the production this year has come from material that wasn't actually in reserve from either positive reconciliation or material that you mined that was never in reserve anyway?

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Stewart J. Beckman, Alacer Gold Corp. - COO [8]

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I don't have the numbers on -- at my fingertips, Michael. But my expectation is that it's about half, but I'd have to go and confirm those numbers. There's a little bit more.

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Michael Slifirski, Crédit Suisse AG, Research Division - MD [9]

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No. That's good enough for me. Okay. Great. And then finally, with the upside potential from sulfide doing above [plant](corrected by the company after the call) capacity -- grinding capacity, I think in the past, you've talked about oxygen capacity. So do you have a sense for what sort of headroom you've got with grinding capacity before having to perhaps coarsen up the grind size? And do you have the sense for, if you do coarsen up the grind size, the -- this trade-off between additional throughput and recovery?

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Stewart J. Beckman, Alacer Gold Corp. - COO [10]

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Yes. So to start with, we've got a lot of headroom, so we still havn't put any balls in the SAG mill and we're not fully loaded in the ball mill yet. We -- and we could add an SABC circuit, and we could make some changes to the screening circuit to allow us to get there.

Your other question, so there's a fair amount of headroom in there sort of beyond probably 400 tonne an hour. But were -- as was said earlier, we're still working on it. The other is the -- there was only a little bit of work done on the grind recovery trade-off in the feasibility study. And it showed it to be relatively insensitive, so it's not -- we don't -- I don't expect, if we do get to the point where we started to push the grind size out, it probably wouldn't be a big deal for us. We did actually try to coarsen the grind when we started out to help us to improve some settling characteristics in the plant.

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Michael Slifirski, Crédit Suisse AG, Research Division - MD [11]

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And so do you have a sense as to how long you want to operate the plant and stabilize it, give or take, nameplate before you start to really push it? Is that -- is there a sort of high point where you'll say I -- we've done enough at nameplate? Or are there simply no stop signs, you just keep pushing until you find the bottleneck?

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Stewart J. Beckman, Alacer Gold Corp. - COO [12]

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Yes. This -- the latter. We'll continue in a managed and careful way to increase the plant throughput.

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Operator [13]

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The next question comes from Mark Mihaljevic of RBC Capital Markets.

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Mark Mihaljevic, RBC Capital Markets, LLC, Research Division - Analyst [14]

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And again, congrats on another very strong quarter. It's been a fun ride to watch for once. I guess my first question, obviously, very strong free cash flow generation that seems pretty sustainable now. And obviously, you've got a lot of opportunities internally to continue to grow and also looking externally, but kind of can you prioritize the potential capital return and kind of how you're thinking about that?

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Rodney P. Antal, Alacer Gold Corp. - President, CEO & Executive Director [15]

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Mark, it's Rod. So thanks for the feedback. It's nice to be the recipient of some nice feedback. So it's -- just, yes, simply on the capital and net capital allocation as we think about it, we are in the process right now of going through our annual cycle of planning, and that will continue. As we said, this year has really been -- the future has been about managing the balance sheet and debt repayments. And clearly, that -- that's gone very well. And as we start to think about next year, we'll be pretty open about we're looking at balancing off the opportunities that we have in front of us for some of the optimization work in the sulfide plant, the growth that we are evolving, yes, pretty much on a monthly basis these days with the oxide growth in front of us, the debt repayments and the potential for paying off debt earlier with no penalties and then also capital returns to our shareholders. So it's a work in progress, but it's certainly the discussion we're going to be having more and more with our Board.

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Mark Mihaljevic, RBC Capital Markets, LLC, Research Division - Analyst [16]

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Okay. And then I guess kind of following up to Mike's questions with the sulfide -- or potential upside in the sulfide plant. I guess I believe you've really been focused or kind of expected the bottleneck to be around the oxygen plant there. So are you seeing an opportunity to improve that and get that more efficient? Or do you think that there will be some, let's say, ore blending that you can do to bring down the sulfide content that was the constraint there?

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Stewart J. Beckman, Alacer Gold Corp. - COO [17]

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Yes. So there are multiple opportunities there. One is that we seem to be getting pretty good oxygen utilization, and we've got some ideas on how to improve that. Additionally, when we scoped the sizing for the oxygen plant, it was sized to deliver with spare capacity above what was in the models used to generate the technical report, so it was installed with some extra capacity in it as well.

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Operator [18]

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(Operator Instructions) The next question comes from Don DeMarco of National Bank Financial.

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Don DeMarco, National Bank Financial, Inc., Research Division - Analyst [19]

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Could you provide a little more color on the POX maintenance that's scheduled for Q4 and the shutdown in Q1 and the expected input -- impact on throughput?

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Stewart J. Beckman, Alacer Gold Corp. - COO [20]

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Yes. So the maintenance that we were going to do in Q1, scheduled in February at this stage, and it will be an inspection on a descale of the inside replacement of the agitator blades. Last time we went in, there was essentially, no wear on them. So we'll see what it looks like this time after having operated for a bit longer. Importantly, we will check, and we'll have the brick maintenance teams there in case we need to do any touchup work for -- or repointing of the brickwork. So that's really the main downtime. And it will take us close to 2 weeks to do that piece of work on the 1 autoclave. And a lot of that just cooling it -- turning it off, cooling it down, emptying it out, cleaning it, descaling it, getting access to the maintenance teams and then to get back in.

As far as maintenance goes along the way, we've got a couple of pipes that we'd be replacing as consumables on the discharge of the autoclave, so we've taken -- we'll take small shutdowns where we're lock in to do that. And some of the severe service valves need replacement on a more regular cycle that the big ones that isolate the autoclave when we close it off. And so we've been doing small shutdowns for a day here and there to replace those valves and/or pipes.

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Rodney P. Antal, Alacer Gold Corp. - President, CEO & Executive Director [21]

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So Don, just anything that Stew has talked about will be included in our guidance for 2020 when we release it early in the new year. So we'll take into account all of the scheduled shutdowns that we'll have during the year and anything else that we need to consider as well as, from an oxide perspective, continuation of some of the success of the in-pit exploration success because, remember, one of the things that we've been saying a lot for everyone to understand is for the oxides, when we look at next year's production profile, we've got a reserve that will continue to mine at Çöpler. And the extra ounces that we'll be looking for will come from those in-pit exploration successes that won't make it into a reserve. So you'll never actually see it come in, but it will just be added to our guidance updates when we do 2020. So it will be sulfides and oxides as well.

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Stewart J. Beckman, Alacer Gold Corp. - COO [22]

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Maybe with regards to the sulfide, the way to think about maintenance is in the technical report, I think it is assumed there 85% operating time for each of the autoclaves. And from what we saw in the first round of maintenance, it looks as though we will -- we should be able to at least achieve that. And we're hoping that we'll be able to do better than that in the future, but the shutdown that we do in February will be quite telling because it will be -- it will run for over a year, and we'll have a much better idea then. So at this stage, it looks good to at least achieve what we have in the technical report.

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Don DeMarco, National Bank Financial, Inc., Research Division - Analyst [23]

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Okay. And like, we've seen some progressive improvements in throughput quarter-over-quarter. Do you expect that to continue up until I guess 6,000-plus tonne per day nameplate? I mean you're talking about even potentially going above that, but just commenting on Q4, do you expect sort of continued improvement in throughput?

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Stewart J. Beckman, Alacer Gold Corp. - COO [24]

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Yes. And we're getting very close to it now. As we expected with our ramp up curve.

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Don DeMarco, National Bank Financial, Inc., Research Division - Analyst [25]

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Excellent. Okay. On recoveries, too, I've also seen that improvement. Are you comfortable continuing past 92% up toward 96% in the technical report?

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Stewart J. Beckman, Alacer Gold Corp. - COO [26]

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The last bit is always the hardest bit to get and so we'll continue to chase that. But I think that it will take us a few quarters to get there.

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Operator [27]

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This concludes the question-and-answer session and today's conference call. You may disconnect your lines. Thank you for participating, and have a pleasant day.