U.S. Markets closed

Edited Transcript of TGZ.TO earnings conference call or presentation 31-Oct-19 12:30pm GMT

Q3 2019 Teranga Gold Corp Earnings Call

TORONTO Nov 15, 2019 (Thomson StreetEvents) -- Edited Transcript of Teranga Gold Corp earnings conference call or presentation Thursday, October 31, 2019 at 12:30:00pm GMT

TEXT version of Transcript

================================================================================

Corporate Participants

================================================================================

* Navindra Dyal

Teranga Gold Corporation - Senior VP & CFO

* Richard S. Young

Teranga Gold Corporation - President, CEO & Director

* Trish Moran

Teranga Gold Corporation - VP of IR & Corporate Communications

* William Paul Chawrun

Teranga Gold Corporation - COO

================================================================================

Conference Call Participants

================================================================================

* Carey MacRury

Canaccord Genuity Corp., Research Division - Analyst of Metals and Mining

* Craig Philip Stanley

Eight Capital, Research Division - Principal for Metals and Mining Research

* Wayne Lam

RBC Capital Markets, Research Division - Analyst

================================================================================

Presentation

--------------------------------------------------------------------------------

Operator [1]

--------------------------------------------------------------------------------

Good morning, and welcome to Teranga Gold's Conference Call for The 3 and 9 Months Ended September 30, 2019. As a reminder, this call is being recorded.

Your host for today is Trish Moran, Vice President, Investor Relations and Corporate Communications. Ms. Moran, please go ahead.

--------------------------------------------------------------------------------

Trish Moran, Teranga Gold Corporation - VP of IR & Corporate Communications [2]

--------------------------------------------------------------------------------

Thank you, operator, and good morning, everyone. Before we get started, I would ask everyone to view Slide 2 of our quarterly presentation to view our cautionary language regarding forward-looking statements and the risk factors pertaining to these statements. Our slide deck is available on our website, terangagold.com.

With us on today's conference call is Richard Young, Teranga's President and CEO; Paul Chawrun, our COO; and Navin Dyal, Senior Vice President and Chief Financial Officer. Following management's formal remarks, we will open the call to your questions.

And now over to Richard.

--------------------------------------------------------------------------------

Richard S. Young, Teranga Gold Corporation - President, CEO & Director [3]

--------------------------------------------------------------------------------

Well, thanks, Trish, and welcome, everyone. Thank you for joining us today to discuss the highlights of the quarter.

It was truly a milestone quarter. We delivered solid operating results from Sabodala, and we commissioned our second mine. Wahgnion is expected to increase annual production by 50%, and more importantly, double mine life free cash flows.

Just 3 years ago this month, we acquired Gryphon Minerals for USD 50 million, moving Teranga into Burkina Faso. Since the acquisition, we've updated the Wahgnion feasibility study and increased reserves by 40%. We financed and completed construction, and we've made a discovery at Golden Hill, where we've begun another drill program, and we're on track for our mine license application next year. We believe Golden Hill has the potential to be our third mine.

We're now a step closer to becoming a mid-tier West African gold producer, and we're well positioned for our next phase of growth.

With that, I'll ask Paul Chawrun to run through the operating, development and exploration highlights for the third quarter. Paul?

--------------------------------------------------------------------------------

William Paul Chawrun, Teranga Gold Corporation - COO [4]

--------------------------------------------------------------------------------

Thank you, Richard. Starting on Slide 6. It was a milestone quarter with first gold pour at Wahgnion. Project construction was completed ahead of schedule and is expected to be approximately $15 million below budget. Notably, the team completed the project with over 5.3 million hours worked without a lost time incident. Safety is and always will be our #1 priority.

During the third quarter, the handover to operations was completed along with the demobilization of major contractors. The plant is running at or above nameplate capacity when operating, processing 260,000 tons of ore, notwithstanding ongoing plant improvements throughout the quarter impacting the third quarter plant availability and a high percentage of oxide ore that was fed to the plant during the peak of the rainy season.

Moving to Slide 7. With Wahgnion construction complete, this is the first quarter for which we are reporting production from 2 mines. Third quarter production totaled 61,975 ounces of gold. This included just under 51,400 ounces from Sabodala and about 10,600 ounces of pre-commercial production from Wahgnion. Although Sabodala's production in the third quarter was slightly lower year-over-year due to differences in the head grade, the 9-month production total is the highest in its history. This production from Sabodala, together with our first ounces from Wahgnion, led to a record 9-month production company-wide. At just under 200,000 ounces of gold year-to-date, we are well on track to meet the higher end of our 2019 guidance of between 245,000 to 270,000 ounces.

Turning to Slide 8. The operating team at Sabodala performed well during the third quarter, which is the peak of the rainy season. Total tonnes mined declined by 10% year-over-year due to lower drill fleet performance and the prioritization of higher-grade ore at Kerekounda, which mainly impacted the waste stripping at Sabodala Phase 4. As a result of lower drill fleet performance, total tonnes mined is expected to be below the low end of our guidance range for the year. However, 2 additional drill rigs arrived on site, bringing the total to 5, and tonnes mined is expected to normalize in Q4.

The plant had a solid operating quarter. Ore tonnes milled were 6% higher at more than 1 million tonnes. The increase is primarily due to better plant availability and a higher proportion of softer ore.

This quarter's grade was 13% lower compared to the prior year period at 1.74 grams per tonne given that the ore feed was primarily sourced from the higher-grade Gora deposit last year. Year-to-date, the average grade processed at Sabodala is just over 2 grams per tonne, tracking the high end of our full year guidance range of 1.8 to 2 grams per tonne. Reserves reconciliation remains positive for the quarter and year-to-date. Sabodala is well on track to meet the higher end of its production guidance.

Turning to Slide 9. Total mining costs rose by 3% to $24 million due to an increase in drilling costs from the rental units. With the delivery of new production drill rigs expected early next year, rental costs will be eliminated. Mining cost per unit increased by 14% and 6% for the 3- and 9-month periods, respectively, due to a decrease in total tonnes mined. Year-to-date, mining costs are $2.86 per tonne mined, which is tracking above the full year guidance range of $2.50 to $2.75 per tonne. We expect to see the unit mining costs improve in the fourth quarter as the material movement increases.

Total processing cost decreased by 16% to $11 million in the third quarter, benefiting from lower fuel prices, consumables, repair and maintenance costs and favorable currency movements. This is all reflected in a 21% improvement in plant unit operating costs. Year-to-date, this is $11.39 per tonne, which is tracking well below the lower end of the full year guidance range. Sabodala is at the lower end of cost per ounce guidance for the year.

The relocation of Sabodala Village is ongoing after we made recent modifications to the design and materials used in the construction of the private residences. These modifications are not expected to have a material impact on project costs but are expected to impact the timing of the completion of the resettlement site. The delay is not expected to impact 2020 production.

Turning to Slide 10. We are pleased with the pre-commercial production results from our new mine. A total of 3.2 million tonnes were mined during the quarter, of which over 400,000 tonnes of ore was mined at an average grade of approximately 1.2 grams per tonne. The grade is slightly lower than expected due to greater-than-anticipated artisanal mining in the upper oxide zones of the Nangolo and Nogbele pits. We are now mining below these workings at Nangolo and parts of Nogbele, and we are seeing grades in line with the reserves model.

With respect to operating costs, our mining team currently consists of an owner-operated fleet supplemented by 2 contractor fleets. As mining equipment continues to arrive on site, we will be transitioning to a fully owner-operated fleet, which will lower mine operating costs.

The total pre-commercial mill throughput for the quarter was 259,000 tonnes. More than 10,600 ounces of gold were recovered at an average head grade of close to 1.4 grams per tonne. This includes initial commissioning of ore lower than 1 gram a tonne fed by design through August.

The plant is running well. We expected materials handling issues due to the earlier commissioning in the rainy season and limited availability of hard rock. Through September and October, we fine-tuned the crusher, reclaimed coarse ore stockpile areas during the ramp-up after construction.

In terms of Wahgnion cost guidance, unit processing and administration costs are expected to be in line with the technical report. Mining costs are expected to come in higher due to the increased use of mining contractors with the earlier-than-planned commissioning, and the cost per ounce is expected to fall within the guidance range.

Now let's turn to the next stage of our organic growth on Slide 11. We initiated a 27,000-meter drill program to increase the initial resource base at our most advanced project, Golden Hill. We added an RC drill in late October, and a second diamond drill is scheduled to arrive in November as we expand the drilling program in the fourth quarter. This drill campaign is expected to be completed by year-end.

Golden Hill is advancing towards a feasibility stage of development. Technical studies are in motion, and engineering has commenced to support a mine license application in 2020.

That sums up the operations discussion. I will now turn over the call to Navin for the financial review.

--------------------------------------------------------------------------------

Navindra Dyal, Teranga Gold Corporation - Senior VP & CFO [5]

--------------------------------------------------------------------------------

Thanks, Paul. As Paul mentioned, Sabodala had another solid quarter. Gross profit increased 37% due to higher gold prices. However, similar to last quarter, there are cash and noncash items that relate to financing in Wahgnion, which reduced earnings. These items include losses from gold sales derivative instruments, changes in fair values of warrants and gold offtake payment liabilities and higher share-based compensation and income tax expenses.

With this background, let's review the financials, starting with Slide 13. Revenue increased for the 3- and 9-month periods mainly due to higher average realized gold prices. Accordingly, our average realized gold price was $1,421 per ounce. This is $51 less than the average spot price of gold for the quarter. The difference of $51 per ounce is mainly due to the impact of gold prepayment facility, pursuant to which 10,000 ounces of gold were presold up to 30 days in advance of scheduled deliveries. The significant rise in gold prices during the quarter meant that revenue related to these pre-sold ounces was recorded at the lower prices in effect earlier in the quarter and not at the price in effect at the actual delivery dates for these ounces.

Moving to Slide 14. To provide greater cash flow certainty through the development of Wahgnion, back in 2017, we've put in place a gold hedging program. For the first quarter 2018 through to third quarter 2019, we realized net gains on these hedges totaling approximately $6.9 million. In the second quarter of this year, we made modifications to our existing hedge program, which allowed us to lock in gains from the recent climb in gold prices and participate in higher gold prices. We rolled over 51,000 ounces of existing forward sales contracts to the first half of 2020. These contracts now have an average forward price of $1,330 per ounce. If gold prices stay at current levels, we will give back the hedge gains recorded to date, but those hedges provided much needed extra cash flow during construction.

In addition, we entered into zero cost collars for the back half of 2019 at an average price range of between $1,380 and $1,463 per ounce. At September 30, 2019, we have 37,166 ounces remaining under these contracts covering the fourth quarter of this year.

Moving now to our per-ounce cost metrics on Slide 15. Total cost of sales per ounce sold increased for the quarter and year-to-date. This was mainly due to lower capitalized deferred stripping costs partially offset by lower mine production costs and net inventory movements between periods. All-in sustaining cost per ounce increased to $1,085 per ounce during the third quarter due to a decrease in the volume of gold ounces sold at Sabodala, and they improved to $904 per ounce year-to-date. Looking at the bigger picture, per-ounce costs at Sabodala are tracking well to the lower end of our full year guidance ranges.

Moving to Slide 16. As I mentioned at the outset of my remarks, there were several noncash items that impacted earnings this quarter with the largest being noncash losses associated with gold sales derivative instruments. As a result, EBITDA was lower year-over-year for both the 3- and 9-month periods, notwithstanding higher gross profit from Sabodala.

Adjusted EBITDA, which removes items not reflective of underlying performance, including gains and losses on derivative instruments, improved by 16% for the quarter and 7% year-to-date.

Turning to slides 17 and 18. Net loss was $0.09 and $0.19 per share for the 3- and 9-month periods, respectively. This compares to the prior year net profit of $0.07 and $0.21 per share for the 3 and 9 months, respectively.

Net loss for the current year was negatively impacted by 3 items: Firstly, realized and unrealized losses on gold derivative instruments, whereas in the prior year gains on gold derivative instruments contributed to higher net profit. As a reminder, we do not apply hedge accounting; therefore, unrealized gains and losses on derivative instruments are recorded in other income and expense rather than as a component of other comprehensive income on the income statement.

Secondly, noncash changes in fair values of the warrants and gold offtake payment liabilities, which were put in place to help fund the construction of our second line.

And thirdly, noncash share-based compensation expense due to an increase in our share price.

As well, the year-to-date results of 2019 include the $10 million tax settlement in Senegal that was recorded earlier this year. To date, we have paid $6 million of the $10 million owing, and we expect to pay the balance by the end of the year.

Adjusted net profit, which excludes gains and losses on derivative instruments, among other items, increased to $0.02 and $0.07 per share for the 3- and 9-month periods of 2019, respectively.

Moving to Slide 19, let's look at our cash flow. Operating cash flows after changes in working capital remained lower for the quarter due to a $13 million buildup of inventory at Wahgnion prior to commercial production, an increase of $78 million year-to-date.

Now let's turn to our liquidity on Slide 20. We have been taking active measures to maintain a flexible balance sheet to get through a period of heavy capital requirements to fund Wahgnion as well as advance our exploration program at Golden Hill. As of September 30, we had cash and cash equivalents of $28 million compared to $41 million at the end of June. Sabodala generated approximately $19 million in net cash flow during the quarter and $69 million in net cash flows year-to-date. To date, we have spent $228 million on the construction of Wahgnion out of a total construction budget of $256 million. We expect the project cost to be approximately $15 million below budget after all payments are made.

Since the beginning of the year, our Taurus project facility has increased by $70 million, which included $53 million from the Wahgnion tranche, of which $10 million remains undrawn, and $14 million from the Golden Hill tranche that was repurposed on a short-term basis for Wahgnion's operating capital; plus an additional $2.5 million from the Golden Hill tranche to fund the exploration drill program at Golden Hill, of which $8.5 million remains undrawn. In total, we have drawn down $182 million on our Taurus debt facility. In addition, we have drawn down $8 million from the Caterpillar equipment facility, of which $1 million was repaid and $4 million remains undrawn. Debt repayments on the Taurus facilities commence in the first quarter of 2020.

This concludes the financial summary. Operator, you can now open the line for questions.

================================================================================

Questions and Answers

--------------------------------------------------------------------------------

Operator [1]

--------------------------------------------------------------------------------

(Operator Instructions) Your first question comes from Carey MacRury from Canaccord.

--------------------------------------------------------------------------------

Carey MacRury, Canaccord Genuity Corp., Research Division - Analyst of Metals and Mining [2]

--------------------------------------------------------------------------------

Congratulations on getting Wahgnion over the line. Can you hear me okay?

--------------------------------------------------------------------------------

Richard S. Young, Teranga Gold Corporation - President, CEO & Director [3]

--------------------------------------------------------------------------------

Yes. We hear you well. Thanks, Carey.

--------------------------------------------------------------------------------

Carey MacRury, Canaccord Genuity Corp., Research Division - Analyst of Metals and Mining [4]

--------------------------------------------------------------------------------

Yes. Just a question on Wahgnion in terms of CapEx. You mentioned you expect it to be $15 million below budget, yet your CapEx guidance is unchanged. How do you reconcile those 2 things?

--------------------------------------------------------------------------------

Navindra Dyal, Teranga Gold Corporation - Senior VP & CFO [5]

--------------------------------------------------------------------------------

Yes. It's Navin, yes. So we haven't changed the guidance yet in terms of the table. But as we've outlined, we expect it to be $15 million below. So we've spent $228 million year-to-date of the $256 million. And with 50 -- since we're expecting to be $15 million lower, we would expect to spend the remaining $13 million over the fourth quarter. So that's what the numbers you should be using for purposes of your analysis.

--------------------------------------------------------------------------------

Richard S. Young, Teranga Gold Corporation - President, CEO & Director [6]

--------------------------------------------------------------------------------

Right. And I think our guidance was $115 million to $120 million.

--------------------------------------------------------------------------------

Navindra Dyal, Teranga Gold Corporation - Senior VP & CFO [7]

--------------------------------------------------------------------------------

$120 million.

--------------------------------------------------------------------------------

Richard S. Young, Teranga Gold Corporation - President, CEO & Director [8]

--------------------------------------------------------------------------------

So it'll be basically $100 million to $105 million for the year.

--------------------------------------------------------------------------------

Navindra Dyal, Teranga Gold Corporation - Senior VP & CFO [9]

--------------------------------------------------------------------------------

Yes.

--------------------------------------------------------------------------------

Carey MacRury, Canaccord Genuity Corp., Research Division - Analyst of Metals and Mining [10]

--------------------------------------------------------------------------------

Okay. Great. And then in terms of just a little color on how Wahgnion is tracking in October in terms of throughput?

--------------------------------------------------------------------------------

William Paul Chawrun, Teranga Gold Corporation - COO [11]

--------------------------------------------------------------------------------

Yes. We're on track. In fact, we're slightly above. The plant's running well.

--------------------------------------------------------------------------------

Carey MacRury, Canaccord Genuity Corp., Research Division - Analyst of Metals and Mining [12]

--------------------------------------------------------------------------------

Are you saying above nameplate or above your plan?

--------------------------------------------------------------------------------

William Paul Chawrun, Teranga Gold Corporation - COO [13]

--------------------------------------------------------------------------------

Above our plan. And nameplate, we're achieving nameplate whenever we're running, and it's about increasing the availability slowly but surely. The availability is well better in October than it was in August and September, as expected, and we're on track to meet the plan.

--------------------------------------------------------------------------------

Carey MacRury, Canaccord Genuity Corp., Research Division - Analyst of Metals and Mining [14]

--------------------------------------------------------------------------------

So can you give some guidance on -- like in terms of commercial production, you've said Q4. Is that going to be sort of earlier in the quarter or later in the quarter? And what are sort of the critical items that are left to tick off?

--------------------------------------------------------------------------------

William Paul Chawrun, Teranga Gold Corporation - COO [15]

--------------------------------------------------------------------------------

The last one we need to do is a performance test. And then once we're done that, we'll likely declare commercial production sometime through the fourth quarter. I don't want to commit to earlier or later, but if the plant is running well.

--------------------------------------------------------------------------------

Carey MacRury, Canaccord Genuity Corp., Research Division - Analyst of Metals and Mining [16]

--------------------------------------------------------------------------------

And then maybe one other question on hedging. Obviously, you've been hedging through the ramp-up to protect your cash flows. Is that something that you expect to go away once those run off into 2020?

--------------------------------------------------------------------------------

Navindra Dyal, Teranga Gold Corporation - Senior VP & CFO [17]

--------------------------------------------------------------------------------

Yes. Yes, we expect to run those out. We'll continue to monitor. But again, the reason we did those hedges, as we've outlined, was to protect our cash flows from Sabodala while we were in this heavy construction period. So now that we're through that, we would expect that those would just unwind as per normal, as scheduled.

--------------------------------------------------------------------------------

Operator [18]

--------------------------------------------------------------------------------

And your next question comes from Wayne Lam of RBC.

--------------------------------------------------------------------------------

Wayne Lam, RBC Capital Markets, Research Division - Analyst [19]

--------------------------------------------------------------------------------

Just at Sabodala, it looks like an incremental improvement on the mining front this quarter but looks like you're still behind what was being budgeted. Can you just provide some additional detail on the fleet productivity and the availability and -- relative to plan?

--------------------------------------------------------------------------------

William Paul Chawrun, Teranga Gold Corporation - COO [20]

--------------------------------------------------------------------------------

Okay. So I'll just try and understand you. You're talking about behind on total material movement?

--------------------------------------------------------------------------------

Wayne Lam, RBC Capital Markets, Research Division - Analyst [21]

--------------------------------------------------------------------------------

Yes. And on the pushback, like, should we expect to see a catch-up in waste stripping over the coming quarters?

--------------------------------------------------------------------------------

William Paul Chawrun, Teranga Gold Corporation - COO [22]

--------------------------------------------------------------------------------

Yes. We're now on track to budgeted mining rates, which is in the neighborhood of 10 million a quarter for the fourth quarter. In terms of where we are behind, it was around 3 million tonnes, and most of that came out of the Sabodala pushback. That won't impact the 2020 production. And then in 2021, we'll look for ways to improve that and catch that back up.

--------------------------------------------------------------------------------

Wayne Lam, RBC Capital Markets, Research Division - Analyst [23]

--------------------------------------------------------------------------------

Okay. And then just on the resettlement, can you give us a sense of the updated time line and costs?

--------------------------------------------------------------------------------

Richard S. Young, Teranga Gold Corporation - President, CEO & Director [24]

--------------------------------------------------------------------------------

Yes. Wayne, I'll take that one. We're currently out at tender, so we don't expect a material increase. We had been self-performing. We're actually now bringing in the large Dakar-based construction companies to complete the residential resettlement. The community buildings are already complete, and we're waiting for those final numbers and the schedule. We're trying to maintain the original schedule. But until we get those tenders in, we don't know. So we've indicated that there could and will likely be a delay. Whether that delay is 1, 2, 3 months or more, we just don't know. But it doesn't affect the 2020 plan. And we do have flexibility with being a multi-pit operation as we look into 2021 and beyond. But it is moving well. We do have a good relationship with the community, but it was one of those things where once we started construction of the private residence and we agreed to put concrete roofs because it's cooler for them, then they begin to think about putting on a second floor, and so -- and the sustainability of making modifications. So we've agreed to some changes, and that's just slowed us down a bit.

--------------------------------------------------------------------------------

Wayne Lam, RBC Capital Markets, Research Division - Analyst [25]

--------------------------------------------------------------------------------

Okay. And then just last question for me. At Wahgnion, what was the proportion of oxide ore currently? And when do you expect to get into greater fresh rock? And what's the -- or what's the -- can you comment on differences in the grades and recoveries?

--------------------------------------------------------------------------------

William Paul Chawrun, Teranga Gold Corporation - COO [26]

--------------------------------------------------------------------------------

Okay. So just in general, we were around -- for the quarter around 60% oxide feed, which is way higher than we want to be during the quarter. The other thing is this oxide ore already had a fairly high moisture content. So we were starting the materials handling system, and typically you have to do a lot of modifications as you go through. You don't really want to be doing that in the rainy season. But because we finished ahead of schedule, that's what we needed to do. And so -- for example at Sabodala, we were around 25% oxide and 75% fresh.

Throughout October, now we've built up our fresh because we're in Nangolo pit. We're into the fresh ore. And so that ratio is maybe in the range of 50-50 now. It varies. And then long term, it's about 30% oxide for the entire reserves, give or take. And then we'll be blending that accordingly. Next year, we'll have a lot lower ratio of oxide.

In terms of grade, the oxide zones, particularly in the Nogbele pit, were lower grade. And some of the oxide stockpiles that we had built up during construction when we were building the tailings dam, that ended up, as we fed it through the plant, being lower grade than we thought. And we also had quite a lot of pieces of wood. Now we did account for artisanal workings in the oxide zones, but it does appear to be, particularly in the Nangolo, to be a little more extensive than we thought. This isn't going to be an issue for the entire reserves. It's really where we started because it does outcrop at surface. And we did see some workings. We just didn't realize that they were as extensive. It's not a large issue, but it is why the grade was lower upon start-up. As we're going in at depth in the transition in the fresh zones, we're seeing -- we're matching reserves.

--------------------------------------------------------------------------------

Operator [27]

--------------------------------------------------------------------------------

Your next question comes from Craig Stanley, Eight Capital.

--------------------------------------------------------------------------------

Craig Philip Stanley, Eight Capital, Research Division - Principal for Metals and Mining Research [28]

--------------------------------------------------------------------------------

Congrats on a great quarter. Just wanted to confirm. You said you're expecting to spend around $13 million on CapEx at Wahgnion in Q4?

--------------------------------------------------------------------------------

Navindra Dyal, Teranga Gold Corporation - Senior VP & CFO [29]

--------------------------------------------------------------------------------

Yes. That's -- just doing the math, with the $256 million less the $15 million, and year-to-date we've spent $22 million, $28 million, so that just leaves us a little bit left off for the fourth quarter.

--------------------------------------------------------------------------------

Craig Philip Stanley, Eight Capital, Research Division - Principal for Metals and Mining Research [30]

--------------------------------------------------------------------------------

Okay. And then going into 2020, I know you hadn't put out any guidance, but would you have a lot of nonsustaining CapEx next year there?

--------------------------------------------------------------------------------

Navindra Dyal, Teranga Gold Corporation - Senior VP & CFO [31]

--------------------------------------------------------------------------------

No. No. Just equipment, consistent with what we had in the technical report.

--------------------------------------------------------------------------------

Richard S. Young, Teranga Gold Corporation - President, CEO & Director [32]

--------------------------------------------------------------------------------

The only modifications, Craig, to the tech report numbers on capital would be we are probably going to advance some of the relocation at Wahgnion just as we have gotten in. So we've got about 250 homes to -- that we're going to move next year. The tech report might have been 150 or 175. Again, we're just bringing dollars forward from 2021. And with Niakafiri, the private residence portion will drift into 2020, whereas previously in the tech report, it was done in 2019. Other than that, we don't see any changes, both on a sustaining or nonsustaining basis, for our capital programs company-wide.

--------------------------------------------------------------------------------

Craig Philip Stanley, Eight Capital, Research Division - Principal for Metals and Mining Research [33]

--------------------------------------------------------------------------------

Okay. And then just finally, Golden Hill. When can we expect to get some results?

--------------------------------------------------------------------------------

Richard S. Young, Teranga Gold Corporation - President, CEO & Director [34]

--------------------------------------------------------------------------------

Drill results?

--------------------------------------------------------------------------------

William Paul Chawrun, Teranga Gold Corporation - COO [35]

--------------------------------------------------------------------------------

Yes. We will be finishing up that campaign by the end of the year. And we're getting assays just starting now. We'll likely go into the first quarter and put out some press releases.

--------------------------------------------------------------------------------

Operator [36]

--------------------------------------------------------------------------------

At this time, I will turn the call back over to Richard Young, President and CEO.

--------------------------------------------------------------------------------

Richard S. Young, Teranga Gold Corporation - President, CEO & Director [37]

--------------------------------------------------------------------------------

We'd like to thank everyone for joining us. I know it's an incredibly busy day with a lot of quarterly earnings reports. So thanks for joining in today.

2019 is shaping up to be another good year for Teranga with, as you've heard, solid results at Sabodala and the commissioning of Wahgnion. A re-rate normally follows within a quarter of a new mine build, maybe a quarter or 2 after commencement of commercial production, which we expect during Q4.

In the meantime, we're pushing ahead with Golden Hill, which is our next project in our organic growth pipeline.

That concludes management's remarks for today. And as always, we're available if you've got any further questions. So operator, at this time, we'd like to end the call. So thank you for joining, everyone.

--------------------------------------------------------------------------------

Operator [38]

--------------------------------------------------------------------------------

This concludes our conference call for today. Please disconnect your lines, and have a good day.