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Osisko Reports Strong Third Quarter 2021 Results

Record operating cash flows from the royalties and streams segment of $44.1 million Strong cash margin of $46.5 million …

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Record operating cash flows from the royalties and streams segment of $44.1 million

Strong cash margin of $46.5 million

MONTRÉAL, Nov. 09, 2021 (GLOBE NEWSWIRE) — Osisko Gold Royalties Ltd (the “Company” or “Osisko”) (OR: TSX & NYSE) today announced its consolidated financial results for the third quarter of 2021. Amounts presented are in Canadian dollars, except where otherwise noted.

Financial Highlights

  • Earned 20,032 GEOs1 (Q3 2020 –16,739 GEOs)
  • Record revenues from royalties and streams of $50.0 million (Q3 2020 – $41.2 million)
  • Cash margin4 of 93% from royalty and stream interests (Q3 2020 – 96%); 97% excluding the Renard diamond stream
  • Consolidated cash flows from operating activities of $41.1 million (Q3 2020 – $36.1 million)
    • Record operating cash flows from the royalties and streams segment2 of $44.1 million (Q3 2020 – $37.3 million)
    • Operating cash flows from the mining exploration and development segment3 (i.e. Osisko Development Corp.TSX-V:ODV) of ($3.0) million (Q3 2020 – ($1.2) million)
  • Net earnings attributable to Osisko’s shareholders of $1.8 million, or $0.01 per basic share (Q3 2020 –$12.5 million, or $0.08 per basic share), as a result of impairment charges of $33.3 million recorded by Osisko Development Corp. (“Osisko Development”) on its mining assets
  • Adjusted earnings5 of $17.9 million, or $0.11 per basic share3 (Q3 2020 – $17.5 million, or $0.11 per basic share)
    • Adjusted earnings5 from the royalties and streams segment2 of $23.3 million, or $0.14 per basic share5 (Q3 2020 – $18.4 million or $0.11 per basic share)
    • Adjusted loss5 from the mining exploration and development segment3 of $5.4 million, or $0.03 per basic share5 (Q3 2020 – $0.9 million or $0.01 per basic share)
  • Repurchased 1.7 million common shares for $26.0 million under the normal course issuer bid
  • Quarterly dividend of $0.055 per share declared (annualized dividend of $0.22 per share), payable on January 14, 2022 to shareholders of record as of the close of business on December 31, 2021

Sandeep Singh, President and CEO of Osisko commented on the activities of the third quarter of 2021: “In the third quarter, our royalty and streaming business continued to generate record revenues and operating cash flows led by our core assets. Ramp up at the Eagle gold mine progressed successfully, hitting records for total material mined, ore stacked and gold produced. At Mantos Blancos, we forecast an imminent increase in deliveries as the debottlenecking project concludes. Exploration and development activities at the Malartic underground project are exceeding our expectations. The recent proposed merger between Agnico Eagle and Kirkland Lake also unlocks interesting synergy potential for our 2% NSR royalties in the region (including Upper Beaver and Amalgamated Kirkland). Overall, Osisko continues to benefit from meaningful positive catalysts across our portfolio of assets.”

Financial Highlights by Operating Segment
(in thousands of dollars, except per share amounts)

As a result of its 75% ownership in Osisko Development, the assets, liabilities, results of operations and cash flows of the Company consolidate the activities of Osisko Development and its subsidiaries. The table below provides some financial highlights per operating segment. More information per operating segment can be found in the consolidated financial statements and management’s discussion and analysis for the three months ended September 30, 2021.

  For the three months ended September 30,
 
  Osisko Gold Royalties (i)
  Osisko Development (ii)
  Consolidated (vii)
 
  2021   2020   2021   2020   2021   2020  
  $   $   $
  $
  $   $  
             
Cash (Sept. 30, 2021 and Dec. 31, 2020) (iii) 79,794   105,097   72,151   197,427   151,945   302,524  
             
Three months ended September 30,            
Revenues 50,035   55,707   3,906     50,035   55,707  
Cash margin (iv) 46,528   40,471       46,528   40,471  
Gross profit 33,795   30,086       33,795   30,086  
Operating expenses
(G&A, bus. dev and exploration)
(5,428 ) (6,716 ) (7,200 ) (1,183 ) (12,628 ) (7,899 )
Net earnings (loss) 25,593   12,759   (31,745 ) (245 ) (6,152 ) 12,514  
Net earnings (loss) attributable to Osisko’s shareholders 25,593   12,759   (23,798 ) (245 ) 1,795   12,514  
Net earnings (loss) attributable to Osisko’s shareholders per share (v) 0.15   0.08   (0.14 ) (0.00 ) 0.01   0.08  
Adjusted net earnings (loss) (vi) 23,281   18,415   (5,372 ) (886 ) 17,909   17,529  
Adjusted net earnings (loss) per basic share (vi) 0.14   0.11   (0.03 ) (0.01 ) 0.11   0.11  
             
Cash flows from operating activities (vii)            
Before working capital items 39,849   32,403   (5,962 ) (706 ) 33,887   31,697  
Working capital items 4,231   4,923   2,965   (497 ) 7,196   4,426  
After working capital items 44,080   37,326   (2,997 ) (1,203 ) 41,083   36,123  
Cash flows from investing activities (vii) (40,837 ) (62,990 ) (69,154 ) (11,176 ) (109,991 ) (74,166 )
Cash flows from financing activities (35,288 ) (299 ) (1,588 ) (408 ) (36,876 ) (707 )

(i) Osisko Gold Royalties Ltd and its subsidiaries, excluding Osisko Development Corp. and its subsidiaries. Represents the royalty, stream and other interests segment.
(ii) Osisko Development Corp. and its subsidiaries (carve-out of the mining activities of Osisko Gold Royalties prior to the reverse take-over transaction completed on November 25, 2020 and creating Osisko Development). Represents the exploration, evaluation and development of mining projects segment.
(iii) As at September 30, 2021 and December 30, 2020.
(iv) Cash margin is a non-IFRS financial performance measure which has no standard definition under IFRS. It is calculated by deducting the cost of sales from the revenues. Please refer to the Overview of Financial Results section of this MD&A for a reconciliation of the cash margin per interest.
(v) Attributable to Osisko Gold Royalties Ltd’s shareholders.
(vi) Adjusted earnings (loss) and adjusted earnings (loss) per basic share are non-IFRS financial performance measures which have no standard definition under IFRS. Refer to the non-IFRS measures provided under the Non-IFRS Financial Performance Measures section of this MD&A.
(vii) Consolidated results are net of the intersegment transactions and adjustments related to the accounting policies. Refer to the Segment Disclosure section of this MD&A.

Other Highlights

  • Acquired a 2.75% NSR royalty on the Tocantinzinho gold project (“Tocantinzinho”) for cash consideration of US$10 million ($12.6 million). The operator of Tocantinzinho has a one-time buy-down option in relation to the royalty. At the time of project construction, the operator may make a payment of US$5.5 million to reduce the royalty percentage by 2% resulting in a royalty of 0.75%. Pursuant to a pre-existing agreement, the buy-down payment is payable to the original royalty owners.
  • Increased the amount available under the revolving credit facility by $150.0 million to $550.0 million, with an additional uncommitted accordion of up to $100.0 million (for a total availability of up to $650.0 million). The maturity date of the facility was extended to July 30, 2025, which can be extended annually.
  • Declared a quarterly dividend of $0.055 per common share payable on October 15, 2021 to shareholders of record as of the close of business on September 30, 2021, a dividend increase of 10%.
  • Concluded, on October 27, 2021, a transaction with Barrick TZ Limited, a subsidiary of Barrick Gold Corporation (“Barrick”), to acquire royalties for total cash consideration of US$11.8 million, including a 2% NSR royalty on the AfriOre and Gold Rim licenses comprising the West Kenya project operated by Shanta Gold Limited, a 1% NSR royalty on the Frontier project operated by Metalor SA, a private company, and a 1% NSR royalty on the Central Houndé project operated by Thor Explorations Ltd.

Osisko Development Update

Cariboo Gold Project

Osisko Development has drilled approximately 150,000 metres, of its planned 200,000 metre 2021 program, to expand and delineate the known and new vein corridors and deposits of the Cariboo gold project. Management of Osisko Development believes that it has completed sufficient drilling for a mineral resource update to be used towards a feasibility study in the first half of 2022. Exploration during the quarter was focused on the expansion of the Lowhee Zone and further delineation of the Valley, Mosquito and Shaft deposits. The Cow Mountain Underground Bulk Sample Permit was received in July 2021 and bulk sample activities are anticipated in 2022 now that the underground portal is complete.

Bonanza Ledge Phase II Project

Osisko Development started mining operations at its Bonanza Ledge Phase II project in the first quarter of 2021. The project is a small scale and short life operation, which allows Osisko Development to facilitate (i) opportunities for managing historical reclamation obligations inherited by the company, (ii) hands on training and commissioning of the company’s mining and processing complex for the Cariboo gold project and (iii) maintain the economic and social benefits for the First Nations partners and communities.

In the third quarter of 2021, Osisko Development incurred an impairment charge of $22.4 million on the Bonanza Ledge Phase II project, triggered by continuing operational challenges leading to lower production and revenues than originally planned.

San Antonio Gold Project

Approximately 11,800 metres of infill drilling was completed during the third quarter at the San Antonio gold project in Sonora, Mexico, and 22,724 meters year-to-date. First drill results from the project are pending. Osisko Development is planning to commence processing, via heap leach, of the 1.1 million tonne stockpile in November. Permitting for production, via heap leach, of the Sapuchi oxide mineralization is also on schedule and granting of the permit is anticipated in the first half of 2022.

The stockpile inventory was revalued at its net recoverable amount during the third quarter following a decrease in the gold price and an increase in the expected processing and transportation costs, resulting in an impairment charge of $11.0 million.

For additional information on the Osisko Development activities, please refer to the press releases and other documents filed on Sedar (www.sedar.com) under Osisko Development’s profile and on its website (www.osiskodev.com).  

Q3 2021 Results and Conference Call Details

Conference Call: Wednesday, November 10, 2021 at 10:00 am EST
Dial-in Numbers: North American Toll-Free: 1 (888) 550-4423
Local and International: 1 (438) 801-4067
Replay (available until December 10, 2021 at 11:59 pm EST): North American Toll-Free: 1 (800) 770-2030
Local and International: 1 (647) 362-9199
Access code: 1981388
  Replay also available on our website at www.osiskogr.com

Qualified Person

The scientific and technical content of this news release has been reviewed and approved by Guy Desharnais, Ph.D., P.Geo., Vice President, Project Evaluation at Osisko Gold Royalties Ltd, who is a “qualified person” as defined by National Instrument 43-101 – Standards of Disclosure for Mineral Projects (“NI 43-101”).

About Osisko Gold Royalties Ltd

Osisko Gold Royalties Ltd is an intermediate precious metal royalty company focused on the Americas that commenced activities in June 2014. Osisko holds a North American focused portfolio of over 160 royalties, streams and precious metal offtakes. Osisko’s portfolio is anchored by its cornerstone asset, a 5% net smelter return royalty on the Canadian Malartic mine, which is the largest gold mine in Canada.

Osisko’s head office is located at 1100 Avenue des Canadiens-de-Montréal, Suite 300, Montréal, Québec, H3B 2S2.

For further information, please contact Osisko Gold Royalties Ltd:

Heather Taylor
Vice President, Investor Relations
Tel. (514) 940-0670 x105
[email protected]

Notes:
 
(1) Gold equivalent ounces (“GEOs”) are calculated on a quarterly basis and include royalties, streams and offtakes. Silver earned from royalty and stream agreements has been converted to gold equivalent ounces by multiplying the silver ounces by the average silver price for the period and dividing by the average gold price for the period. Diamonds, other metals and cash royalties were converted into gold equivalent ounces by dividing the associated revenue by the average gold price for the period. Offtake agreements were converted using the financial settlement equivalent divided by the average gold price for the period.

Average Metal Prices and Exchange Rate
 
  Three months ended
September 30,
  Nine months ended
September 30,
  2021 2020   2021 2020
           
Gold(1) $1,790 $1,909   $1,800 $1,735
Silver(2) $24 $24   $26 $19
           
Exchange rate (US$/Can$)(3) 1.2600 1.3321   1.2514 1.3541

                  (1)   The London Bullion Market Association’s pm price in U.S. dollars.
                  (2)   The London Bullion Market Association’s price in U.S. dollars.
                  (3)   Bank of Canada daily rate.

(2) The royalties and streams segment refers to the royalty, stream and other interests segment, which corresponds to the activities of Osisko Gold Royalties Ltd and its subsidiaries, excluding Osisko Development Corp. and its subsidiaries.
   
(3) The mining exploration and development segment refers to the mining exploration, evaluation and development segment, which corresponds to the activities of Osisko Development Corp. and its subsidiaries.
   
(4) Cash margin, which represents revenues less cost of sales, is a non-IFRS measure. The Company believes that this non-IFRS generally-accepted industry measure provides a realistic indication of operating performance and provides a useful comparison with its peers. The following table reconciles the cash margin to the revenues and cost of sales presented in the consolidated statements of income (loss) and related notes (in thousands of Canadian dollars):

  Three months ended
September 30,
    Nine months ended
September 30,
 
  2021   2020     2021   2020  
  $   $     $   $  
           
Revenues 50,035   55,707     174,204   149,070  
Less: Revenues from offtake interests   (14,464 )   (25,265 ) (41,260 )
Revenues from royalty and stream interests 50,035   41,243     148,939   107,810  
           
Cost of sales (3,507 ) (15,236 )   (34,000 ) (45,464 )
Less: Cost of sales of offtake interests   13,738     24,343   39,114  
Cost of sales of royalty and stream interests (3,507 ) (1,498 )   (9,657 ) (6,350 )
           
Revenues from royalty and stream interests 50,035   41,243     148,939   107,810  
Less: Cost of sales of royalty and stream interests (3,507 ) (1,498 )   (9,657 ) (6,350 )
Cash margin from royalty and stream interests 46,528   39,745     139,282   101,460  
  93 % 96 %   94 % 94 %
           
Revenues from offtake interests   14,464     25,265   41,260  
Less: Cost of sales of offtake interests   (13,738 )   (24,343 ) (39,114 )
Cash margin from offtake interests   726     922   2,146  
    5 %   4 % 5 %
           
Excluding the Renard diamond stream          
Revenues from royalty and stream interests 50,035   41,243     148,939   107,810  
Less: Revenues from the Renard diamond stream (5,529 )     (13,891 ) (4,408 )
Revenues from royalty and stream interests, net 44,506   41,243     135,048   103,402  
           
Cost of sales of royalty and stream interests (3,507 ) (1,498 )   (9,657 ) (6,350 )
Less: Cost of sales of the Renard diamond stream 2,090       5,642   1,906  
Cost of sales of royalty and stream interests, net (1,417 ) (1,498 )   (4,015 ) (4,444 )
Cash margin from royalty and stream interests, excluding the Renard diamond stream 43,089   39,745     131,033   98,958  
  97 % 96 %   97 % 96 %

(5) The Company has included certain non-IFRS measures including “Adjusted Earnings” and “Adjusted Earnings per basic share” to supplement its consolidated financial statements, which are presented in accordance with IFRS.

The Company believes that these measures, together with measures determined in accordance with IFRS, provide investors with an improved ability to evaluate the underlying performance of the Company. Non-IFRS measures do not have any standardized meaning prescribed under IFRS, and therefore they may not be comparable to similar measures employed by other companies. The data is intended to provide additional information and should not be considered in isolation or as a substitute for measures of performance prepared in accordance with IFRS.

“Adjusted earnings (loss)” is defined as “Net earnings (loss)” adjusted for certain items: “Foreign exchange gain (loss)”, “Impairment of assets”, including impairment on financial assets and investments in associates, “Gains (losses) on disposal of exploration and evaluation assets”, “Unrealized gain (loss) on investments”, “Share of loss of associates”, “Deferred premium income on flow-through shares”, “Deferred income tax expense (recovery)” and other unusual items such as transaction costs.

Adjusted earnings (loss) per basic share is obtained from the “adjusted earnings (loss)” divided by the “Weighted average number of common shares outstanding” for the period.

 

  For the three months ended September 30,
 
  2021   2020  
  Osisko Gold
Royalties (i)
  Osisko
Development
(ii)
  Consolidated   Osisko Gold
Royalties (i)
  Osisko
Development
(ii)
  Consolidated  
(in thousands of dollars, except
per share amounts)
$   $   $   $   $   $  
             
Net earnings (loss) 25,593   (31,745 ) (6,152 ) 12,759   (245 ) 12,514  
             
Adjustments:            
Impairment of assets   33,320   33,320   1,281     1,281  
Foreign exchange (gain) loss 322   (993 ) (671 ) 391     391  
Unrealized loss (gain) on investments (11,202 ) 456   (10,746 ) (459 ) (849 ) (1,308 )
Share of loss of associates 627   145   772   551   209   760  
Deferred premium income on flow-through shares   (2,602 ) (2,602 )      
Deferred income tax expense (recovery) 7,941   (3,953 ) 3,988   3,616   (1 ) 3,615  
Transaction costs (RTO transaction)       276     276  
             
Adjusted earnings (loss) 23,281   (5,372 ) 17,909   18,415   (886 ) 17,529  
             
Weighted average number of common shares outstanding (000’s) 167,924   167,924   167,924   166,110   166,110   166,110  
             
Adjusted earnings (loss) per basic share 0.14   (0.03 ) 0.11   0.11   (0.01 ) 0.11  

(i) Osisko Gold Royalties Ltd and its subsidiaries, excluding Osisko Development Corp. and its subsidiaries. Represents the royalty, stream and other interests segment.
(ii) Osisko Development Corp. and its subsidiaries. Represents the mining exploration, evaluation and development segment.

  For the nine months ended September 30,
 
  2021   2020  
  Osisko Gold
Royalties (i)
Osisko
Development
(ii)
Consolidated Osisko Gold
Royalties (i)
Osisko
Development
(ii)
Consolidated  
(in thousands of dollars, except
per share amounts)
$   $   $   $   $   $  
             
Net earnings (loss) 55,397   (76,849 ) (21,452 ) 12,545   (301 ) 12,244  
             
Adjustments:            
Impairment assets 4,400   73,799   78,199   31,604     31,604  
Foreign exchange (gain) loss 182   542   724   (1,166 )   (1,166 )
Unrealized loss (gain) on investments (8,260 ) (841 ) (9,101 ) (11,041 ) (4,499 ) (15,540 )
Share of loss of associates 1,363   1,302   2,665   2,336   1,598   3,934  
Deferred premium income on flow-through shares   (5,869 ) (5,869 )      
Deferred income tax expense (recovery) 17,515   (6,694 ) 10,821   1,158   432   1,590  
Transaction costs (RTO transaction)       276     276  
             
Adjusted earnings (loss) 70,597   (14,610 ) 55,987   35,712   (2,770 ) 32,942  
             
Weighted average number of common shares outstanding (000’s) 167,786   167,786   167,786   162,321   162,321   162,321  
             
Adjusted earnings (loss) per basic share 0.42   (0.09 ) 0.33   0.22   (0.02 ) 0.20  

(i) Osisko Gold Royalties Ltd and its subsidiaries, excluding Osisko Development Corp. and its subsidiaries. Represents the royalty, stream and other interests segment.
(ii) Osisko Development Corp. and its subsidiaries (carve-out of the mining activities of Osisko Gold Royalties prior to the reverse take-over transaction completed on November 25, 2020 and creating Osisko Development). Represents the mining exploration, evaluation and development segment.

Forward-looking Statements

This news release contains forward-looking information and forward-looking statements (together, “forward-looking statements”) within the meaning of applicable Canadian securities laws and the United States Private Securities Litigation Reform Act of 1995. All statements in this release, other than statements of historical fact, that address future events, developments or performance that Osisko expects to occur including management’s expectations regarding Osisko’s growth, results of operations, estimated future revenue, requirements for additional capital, production estimates, production costs and revenue, business prospects and opportunities are forward-looking statements. In addition, statements relating to gold equivalent ounces (“GEOs”), especially as they relate to production guidance for 2021, are forward-looking statements, as they involve implied assessment, based on certain estimates and assumptions, and no assurance can be given that the GEOs will be realized. Forward-looking statements are statements that are not historical facts and are generally, but not always, identified by the words “expects”, “is expected” “plans”, “anticipates”, “believes”, “intends”, “estimates”, “projects”, “potential”, “scheduled” and similar expressions or variations (including negative variations of such words and phrases), or may be identified by statements to the effect that certain actions, events or conditions “will”, “would”, “may”, “could” or “should” occur including, without limitation, the performance of the assets of Osisko, including exploration results from other properties over which Osisko holds an interest, Osisko’s ability to seize future opportunities including as a result of its increased financial flexibility and the ability of Osisko Development to achieve the objective of its 2021 exploration and delineation program to successfully expand and delineate the known and new vein corridors and deposit at the Cariboo gold project, and the successful performance of regional greenfield exploration work along the Burns, Yanks and Shaft deposits, the timely development of the Cariboo gold project and timely completion of the related feasibility study, the achievement of the goals pursued by Osisko Development in mining the Bonanza Ledge Phase 2 deposit. Although Osisko believes the expectations expressed in such forward-looking statements are based on reasonable assumptions, such statements involve known and unknown risks, uncertainties and other factors and are not guarantees of future performance and actual results may accordingly differ materially from those in forward-looking statements. Factors that could cause the actual results deriving from Osisko’s royalties, streams and other interests to differ materially from those in forward-looking statements include, without limitation: the uncertainties related to the COVID-19 impacts, the influence of political or economic factors including fluctuations in the prices of the commodities and in value of the Canadian dollar relative to the U.S. dollar, continued availability of capital and financing and general economic, market or business conditions; regulations and regulatory changes in national and local government, including permitting and licensing regimes and taxation policies; whether or not Osisko is determined to have “passive foreign investment company” (“PFIC”) status as defined in Section 1297 of the United States Internal Revenue Code of 1986, as amended; potential changes in Canadian tax treatments of offshore streams or other interests, litigation, title, permit or license disputes; risks and hazards associated with the business of exploring, development and mining on the properties in which Osisko holds a royalty, stream or other interest including, but not limited to development, permitting, infrastructure, operating or technical difficulties, unusual or unexpected geological and metallurgical conditions, slope failures or cave-ins, flooding and other natural disasters or civil unrest, rate, grade and timing of production differences from mineral resource estimates or production forecasts or other uninsured risks; risk related to business opportunities that become available to, or are pursued by Osisko and exercise of third party rights affecting proposed investments. The forward-looking statements contained in this press release are based upon assumptions management believes to be reasonable, including, without limitation: the ongoing operation of the properties in which Osisko holds a royalty, stream or other interest by the owners or operators of such properties in a manner consistent with past practice; the accuracy of public statements and disclosures made by the owners or operators of such underlying properties; no material adverse change in the market price of the commodities that underlie the asset portfolio; Osisko’s ongoing income and assets relating to the determination of its PFIC status, no material changes to existing tax treatments; no adverse development in respect of any significant property in which Osisko holds a royalty, stream or other interest; the accuracy of publicly disclosed expectations for the development of underlying properties that are not yet in production; and the absence of any other factors that could cause actions, events or results to differ from those anticipated, estimated or intended. However, there can be no assurance that forward-looking statements will prove to be accurate, as actual results and future events could differ materially from those anticipated in such statements. Investors are cautioned that forward-looking statements are not guarantees of future performance. Osisko cannot assure investors that actual results will be consistent with these forward-looking statements and investors should not place undue reliance on forward-looking statements due to the inherent uncertainty therein.

For additional information with respect to these and other factors and assumptions underlying the forward-looking statements made in this press release, see the section entitled “Risk Factors” in the most recent Annual Information Form of Osisko which is filed with the Canadian securities commissions and available electronically under Osisko’s issuer profile on SEDAR at www.sedar.com and with the U.S. Securities and Exchange Commission on EDGAR at www.sec.gov. The forward-looking information set forth herein reflects Osisko’s expectations as at the date of this press release and is subject to change after such date. Osisko disclaims any intention or obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, other than as required by law.

 
 
Osisko Gold Royalties Ltd   
Consolidated Balance Sheets   
(tabular amounts expressed in thousands of Canadian dollars)  
     
  September 30,     December 31,  
  2021     2020  
  $     $  
       
Assets      
       
Current assets      
       
Cash 151,945     302,524  
Short-term investments     3,501  
Amounts receivable 16,038     12,894  
Inventories 19,172     10,025  
Other assets 2,608     6,244  
  189,763     335,188  
       
Non-current assets      
       
Investments in associates 126,035     119,219  
Other investments 165,485     157,514  
Royalty, stream and other interests 1,147,153     1,116,128  
Mining interests and plant and equipment 590,989     489,512  
Exploration and evaluation 45,875     42,519  
Goodwill 111,204     111,204  
Other assets 13,821     25,820  
  2,390,325     2,397,104  
       
Liabilities      
       
Current liabilities      
       
Accounts payable and accrued liabilities 46,700     46,889  
Dividends payable 9,160     8,358  
Provisions and other liabilities 15,956     4,431  
Current portion of long-term debt     49,867  
  71,816     109,545  
       
Non-current liabilities      
       
Provisions and other liabilities 39,934     41,536  
Long-term debt 405,306     350,562  
Deferred income taxes 61,669     54,429  
  578,725     556,072  
       
Equity      
       
Share capital 1,779,565     1,776,629  
Warrants 18,072     18,072  
Contributed surplus 41,041     41,570  
Equity component of convertible debentures 14,510     17,601  
Accumulated other comprehensive income 60,181     48,951  
Deficit (260,637 )   (174,458 )
Equity attributable to Osisko Gold Royalties Ltd’s shareholders 1,652,732     1,728,365  
Non-controlling interests 158,868     112,667  
Total equity 1,811,600     1,841,032  
  2,390,325     2,397,104  

Osisko Gold Royalties Ltd
Consolidated Statements of Income (Loss)
For the three and nine months ended September 30, 2021 and 2020
(tabular amounts expressed in thousands of Canadian dollars, except per share amounts)
 
  Three months ended
September 30,
    Nine months ended
September 30,
 
  2021     2020     2021     2020  
  $     $     $     $  
               
               
Revenues 50,035     55,707     174,204     149,070  
               
Cost of sales (3,507 )   (15,236 )   (34,000 )   (45,464 )
Depletion of royalty, stream and other interests (12,733 )   (9,665 )   (36,097 )   (32,057 )
Gross profit 33,795     30,806     104,107     71,549  
               
Other operating expenses              
General and administrative (11,359 )   (5,957 )   (30,436 )   (18,059 )
Business development (933 )   (1,910 )   (3,038 )   (4,682 )
Exploration and evaluation (336 )   (32 )   (1,516 )   (108 )
Impairments – royalty, stream and other interests         (2,288 )   (26,300 )
Impairments – mining exploration, evaluation and development (33,320 )       (73,799 )    
Operating (loss) income (12,153 )   22,907     (6,970  )   22,400  
Interest income 1,268     1,327     3,926     3,523  
Finance costs (6,269 )   (6,440 )   (18,296 )   (19,938 )
Foreign exchange gain (loss) 798     (419 )   (737 )   1,299  
Share of loss of associates (772 )   (760 )   (2,665 )   (3,934 )
Other gains, net 15,296     27     15,015     11,462  
(Loss) earnings before income taxes (1,832 )   16,642     (9,727 )   14,812  
Income tax expense (4,320 )   (4,128 )   (11,725 )   (2,568 )
Net (loss) earnings (6,152 )   12,514     (21,452 )   12,244  
               
Net earnings (loss) attributable to:              
Osisko Gold Royalties Ltd’s shareholders 1,795     12,514     (2,370 )   12,244  
Non-controlling interests (7,947 )       (19,082 )    
               
Net earnings per share              
Basic and diluted 0.01     0.08     (0.01 )   0.08  

 
 
 
Osisko Gold Royalties Ltd
Consolidated Statements of Cash Flows
 For the three and nine months ended September 30, 2021 and 2020
(tabular amounts expressed in thousands of Canadian dollars)
 
 
  Three months ended
September 30,
    Nine months ended
September 30,
 
  2021     2020     2021     2020  
  $     $     $   $  
               
Operating activities              
Net (loss) earnings (6,152 )   12,514     (21,452 )   12,244  
Adjustments for:              
Share-based compensation 3,845     2,567     9,235     6,932  
Depletion and amortization 12,918     9,954     36,973     33,067  
Impairment of assets 33,320     1,281     78,199     31,604  
Finance costs 2,058     1,888     5,613     6,638  
Share of loss of associates 772     760     2,665     3,934  
Net gain on acquisition of investments (6,989 )   (982 )   (7,638 )   (3,827 )
Change in fair value of financial assets at fair value through profit and loss (3,757 )   (326 )   (72 )   (1,332 )
Net gain on dilution of investments         (1,391 )   (10,381 )
Net gain on disposal of investments             (1,226 )
Foreign exchange loss (gain) (671 )   391     724     (1,166 )
Flow-through shares premium income (2,602 )       (5,869 )    
Deferred income tax expense (recovery) 3,988     3,615     10,821     1,590  
Others (2,843 )   35     (2,351 )   110  
Net cash flows provided by operating activities
before changes in non-cash working capital items
33,887     31,697     105,457     78,187  
Changes in non-cash working capital items 7,196     4,426     (12,133 )   (2,842 )
Net cash flows provided by operating activities 41,083     36,123     93,324     75,345  
               
Investing activities              
Net disposal of short-term investments 3,408     (519 )   3,408     (1,588 )
Acquisition of investments (28,328 )   (8,401 )   (42,165 )   (42,344 )
Proceeds on disposal of investments     7,163     28,109     10,600  
Acquisition of the San Antonio gold project     (48,708 )       (48,708 )
Acquisition of royalty and stream interests (25,836 )   (12,512 )   (68,713 )   (36,879 )
Mining assets and plant and equipment (54,865 )   (16,072 )   (144,516 )   (42,487 )
Exploration and evaluation expenses, net (4,307 )   (85 )   (5,470 )   (201 )
Restricted cash     4,762         4,762  
Others (63 )   206     (264 )   357  
Net cash flows used in investing activities (109,991 )   (74,166 )   (229,611 )   (156,488 )
               
Financing activities              
Private placement of common shares             85,000  
Increase in long-term debt         50,000     71,660  
Repayment of long-term debt         (50,000 )    
Investments from minority shareholders         38,841      
Share issue expenses from investments from minority shareholders         (2,581 )    
Exercise of share options and shares issued under the share purchase plan 87     6,249     13,194     7,382  
Normal course issuer bid purchase of common shares (26,037 )       (30,501 )   (3,933 )
Dividends paid (8,049 )   (6,882 )   (23,745 )   (21,063 )
Capital payments on lease liabilities (1,798 )   (201 )   (4,578 )   (594 )
Withholding taxes on settlement of restricted and deferred share units         (3,582 )   (2,094 )
Others (1,079 )   127     (1,082 )   (152 )
Net cash flows (used in) provided by financing activities (36,876 )   (707 )   (14,034 )   136,206  
               
(Decrease) increase in cash before effects of exchange rate changes on cash (105,784 )   (38,750 )   (150,321 )   55,063  
Effects of exchange rate changes on cash 2,766     (2,516 )   (258 )   (2,581 )
(Decrease) increase in cash (103,018 )   (41,266 )   (150,579 )   52,482  
Cash – beginning of period 254,963     201,971     302,524     108,223  
Cash – end of period 151,945     160,705     151,945     160,705  

 






barrick gold corporation





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Today’s News

Lundin Mining Provides Operational Outlook & Update

Lundin Mining Provides Operational Outlook & Update
Canada NewsWire
TORONTO, Nov. 22, 2021

TORONTO, Nov. 22, 2021 /CNW/ – (TSX: LUN) (Nasdaq Stockholm: LUMI) Lundin Mining Corporation (“Lundin Mining” or the “Company”) provides the following…

Lundin Mining Provides Operational Outlook & Update

Canada NewsWire

Lundin Mining (CNW Group/[nxtlink id=

TORONTO, Nov. 22, 2021 /CNW/ – (TSX: LUN) (Nasdaq Stockholm: LUMI) Lundin Mining Corporation (“Lundin Mining” or the “Company”) provides the following production guidance for the three-year period of 2022 through 2024, as well as cash cost, capital and exploration expenditure forecasts for 2022. The Company will hold a conference call and webcast on Tuesday November 23, 2021, to answer investor and analyst questions. Additionally, the Company announces renewal of its Normal Course Issuer Bid (“NCIB”), pending final approvals.

(This news release contains non-GAAP measures and forward-looking information about expected future events and financial and operating performance of the Company. We refer to the Historical Non-GAAP Measure Comparatives section and the risks and assumptions set out in our Cautionary Statement on Forward-Looking Information section of this press release. All dollar amounts are expressed in U.S. dollars, unless otherwise noted.)

  • Copper production is to increase to 258,000-282,000 t on a consolidated basis in 2022.
  • Zinc production is forecast to increase to 188,000-203,000 t in 2022 as the Neves-Corvo Zinc Expansion Project (“ZEP”) ramps up and on an improved near-term production profile at Zinkgruvan.
  • Gold production is forecast to be 153,000-163,000 oz in 2022, of which approximately 85,000 oz, at the midpoint of guidance, are unencumbered and to receive full market pricing.
  • Nickel production is to moderate to 15,000-18,000 t in 2022 with priority on increasing Eagle East ore.

Production Outlook 2022 – 20241

2022

2023

2024

Copper (t)

Candelaria (100% basis)

155,000

165,000

150,000

160,000

165,000

175,000

Chapada

53,000

58,000

50,000

55,000

50,000

55,000

Eagle

15,000

18,000

12,000

15,000

9,000

12,000

Neves-Corvo

33,000

38,000

35,000

40,000

35,000

40,000

Zinkgruvan

2,000

3,000

3,000

4,000

3,000

4,000

Total Copper

258,000

282,000

250,000

274,000

262,000

286,000

Zinc (t)

Neves-Corvo

110,000

120,000

142,000

152,000

142,000

152,000

Zinkgruvan

78,000

83,000

85,000

90,000

83,000

88,000

Total Zinc

188,000

203,000

227,000

242,000

225,000

240,000

Gold (oz)

Candelaria (100% basis) 2

83,000

88,000

90,000

95,000

93,000

98,000

Chapada

70,000

75,000

65,000

70,000

60,000

65,000

Total Gold

153,000

163,000

155,000

165,000

153,000

163,000

Nickel (t)

Eagle

15,000

18,000

13,000

16,000

9,000

12,000

Total Nickel

15,000

18,000

13,000

16,000

9,000

12,000

________________________________

1 Production guidance is based on certain estimates and assumptions, including but not limited to: Mineral Resources and Mineral Reserves, geological formations, grade and continuity of deposits and metallurgical characteristics. 

2 68% of Candelaria’s total gold and silver production are subject to a streaming agreement. 

Production Outlook 2022 – 2024

  • Candelaria: Copper production for the next three years is forecast to increase over that of 2021, primarily on improved copper head grades and achievement of planned processing rates as initiatives to debottleneck the Candelaria plant pebble crushing circuit are realized in early 2023.

    From the Candelaria open pit, ore mining is to continue primarily from the Phase 10 pushback in 2022, with initial ore production from the Phase 11 pushback during the year. In 2023 and 2024, ore is to be mined primarily from Phase 11.

    Over the guidance period, total mill throughput is forecast to range between 27-28 million tonnes per annum (“Mtpa”). Debottlenecking initiatives of the Candelaria plant pebble crushing circuit will increase mill capacity starting in early 2023 and, based on the planned mill feed blend and the ore hardness throughput model, annual throughput is expected to exceed 28 Mtpa commencing in 2025.

    In 2022 and 2023, Candelaria open pit ore is forecast to contribute approximately 16 Mtpa to the mill feed, increasing to approximately 18 Mtpa in 2024. The underground mines are forecast to contribute approximately 8 Mtpa of ore in each year, with stockpile ore comprising the balance of the mill feed.

    Production guidance considers a mine-to-mill grade call factor of 8% in 2022, reducing to 5% in 2023 and 2024. With focus on operational practices, improvement in grade discrepancy was observed in the third quarter of 2021 compared to the prior two quarters, and to-date in the fourth quarter the positive trend has continued. Candelaria is continuing its methodical approach to identify and address sources of unplanned dilution and discrepancy across the mine-to-mill process.

    Candelaria’s copper production guidance is 155,000-165,000 t for 2022. Copper production is forecast to be modestly greater in the second half of the year than the first, primarily owing to the copper grade profile. Gold production guidance is 83,000-88,000 oz for 2022 and, similarly, modestly weighted to the second half of the year.

  • Chapada: Copper production guidance is consistent with the prior outlook3, while gold production guidance has been increased for 2022 on refinement of near-term operating plans. Production expectations are based on the current 24 Mtpa throughput capacity over the guidance period with annual changes driven primarily by the forecast grade profile.

    Chapada’s copper production is forecast to increase in 2022 to 53,000-58,000 t. Copper production is expected to be modestly greater in the second half of the year primarily due to the forecast grade profile and seasonal operating considerations. Gold production guidance is 70,000-75,000 oz for 2022 and, similarly, modestly weighted to the second half of 2022 due to the forecast grade profile and seasonal operating considerations. All of Chapada’s gold production remains unencumbered and is to receive full market pricing.

  • Eagle: Nickel production guidance is modestly lower for 2022 and consistent for 2023, compared to the prior outlook3, while copper production guidance is consistent for 2022 and for 2023.

    Eagle’s nickel production is forecast to be 15,000-18,000 t in 2022. Nickel production is expected to be greater in the second half of the year primarily due to the forecast grade profile. Copper production guidance is 15,000-18,000 t for 2022, modestly weighted to the second half of the year on the forecast grade profile.

  • Neves-Corvo: Copper production guidance has increased for 2022 and 2023 compared to the prior outlook3, on refinement of the near-term mine plan positively impacting the forecast copper head grade. Zinc production guidance is modestly lower in 2022 and 2023 compared to the prior outlook3, on the metal recovery assumption for these years. Construction of the ZEP is progressing on schedule and on budget to be substantially complete by the end of 2021.

    Neves-Corvo’s copper production is forecast to increase to 33,000-38,000 t in 2022, modestly weighted to the first half of the year owing to the forecast grade profile. Zinc production is guided to increase over 65% in 2022, to 110,000-120,000 t, as production ramp up from the ZEP is completed in the first half of the year. With the ZEP contributing a full year of production at design throughput, 2023 zinc production is forecast to be 142,000-152,000 t.

  • Zinkgruvan: Zinc production guidance has increased 14% for 2022 and 11% for 2023, at the midpoint of the ranges compared to the prior outlook3, with minor refinement of operating plans forecasting higher head grades and improved metal recoveries. Copper production guidance for 2022 and 2023 is generally consistent with the prior outlook. Zinc production is forecast to increase in 2022 to 78,000-83,000 t.

_______________________________

3 Prior production outlook for 2022 & 2023 as announced by news release entitled “Lundin Mining Provides Operational Outlook & Shareholder Returns Update” dated November 30, 2020.

2022 Cash Cost Guidance4,5

Cash Cost4

20225

Copper

Candelaria

$1.55/lb6

Chapada

$1.60/lb

Neves-Corvo

$1.80/lb

Zinc

Zinkgruvan

$0.55/lb

Nickel

Eagle

$(0.25)/lb

  • Candelaria’s cash costs are expected to approximate $1.55/lb6 copper in 2022, similar to 2021 levels, after by-product credits. By-product credits have been adjusted for the terms of the streaming agreement.
  • At Chapada, cash costs are expected to approximate $1.60/lb copper in 2022, after unencumbered gold by-product credits. The forecast increase in Chapada’s cash costs reflects higher consumable costs and lower stockpile values. Effects of copper stream agreements are reflected in the realized copper revenue.
  • Eagle is expected to maintain the first quartile cash costs of negative $0.25/lb nickel in 2022, considering significant by-product copper credits. The forecast increase in Eagle’s cash costs is primarily a reflection of lower volumes.
  • At Neves-Corvo, cash costs for 2022 are expected to improve year-on-year to approximately $1.80/lb copper, after zinc and lead by-product credits. The forecast decrease in cash costs is primarily due to increased zinc production volumes.
  • Zinkgruvan’s cash costs for 2022 are expected to approximate $0.55/lb zinc after copper and lead by-product credits.

_________________________________

4 This is a non-GAAP measure. For historical comparatives see the Historical Non-GAAP Measure Comparatives section of this press release. Please also see the Management’s Discussion and Analysis for the year ended December 31, 2020, for discussion of non-GAAP measures.

5 2022 cash costs are based on various assumptions and estimates, including, but not limited to: production volumes, commodity prices (2022 – Cu: $3.90/lb, Zn: $1.15/lb, Pb: $0.90/lb, Au: $1,800/oz: Ag: $25.00/oz) foreign currency exchange rates (2022- €/USD:1.20, USD/SEK:8.20, CLP/USD:700, USD/BRL:5.10) and operating costs.

6 68% of Candelaria’s total gold and silver production are subject to a streaming agreement and as such cash costs are calculated based on receipt of $420/oz and $4.20/oz, respectively, on gold and silver sales in the year.

2022 Capital Expenditure Guidance

  • Capital expenditures in 2022 are forecast to be $630 million on a 100% basis, including deferrals from 2021. The majority of sustaining capital expenditures are for open pit waste stripping, underground mine development, and tailings storage facility (“TSF”) and water management works. The scope of these activities is generally consistent with prior plans, with expenditure guidance reflecting inflationary cost pressures on key inputs, in particular, fuel, electricity, freight, logistics and labour costs in some markets.

Capital Expenditures ($ millions)

20227

Sustaining Capital8

Candelaria (100% basis)

370

Chapada

65

Eagle

10

Neves-Corvo

95

Zinkgruvan

60

Total Sustaining Capital

600

Zinc Expansion Project (Neves-Corvo)8

30

Total Capital Expenditures

630

  • Candelaria: Capital expenditures at Candelaria in 2022 are forecast to total $370 million. Of this total, capitalized waste stripping expenditures are estimated to be $180 million, and underground mine development, including infill drilling and ramp works, is estimated to be approximately $90 million. Capital expenditures for mobile and mine equipment are estimated to be $25 million and $55 million for the continued build of the Los Diques TSF. Pebble crushing debottlenecking initiatives are estimated to be $15 million and forecast to be completed in 2022.
  • Chapada: Capital expenditures at Chapada in 2022 are estimated to total $65 million. This includes approximately $20 million for capitalized waste stripping, $20 million for TSF and water management systems and $10 million for mine and mobile equipment.
  • Eagle: Capital expenditures are estimated to total $10 million in 2022 composed of underground mine development, mobile equipment and mill water treatment plant sustaining initiatives.
  • Neves-Corvo: Capital expenditures are estimated to total $125 million in 2022 of which $30 million is expansionary capital to complete pre-production works on the ZEP and $95 million is forecast sustaining capital. Of the forecast sustaining capital expenditures, approximately $50 million is for underground mine development, including infill drilling, $30 million for TSF works and water initiatives and $15 million for mine and mobile equipment. Total ZEP pre-production capital cost estimate of $430M (€360M) remains unchanged.
  • Zinkgruvan: Sustaining capital expenditures are estimated to total $60 million in 2022, including approximately $35 million for underground development, including the Dalby orebody, and the remainder primarily for mine and mobile equipment, TSF works and other improvement initiatives.

________________________________

7 Capital expenditures are based on various assumptions and estimates, including, but not limited to foreign currency exchange rates (2022- €/USD:1.20, USD/SEK:8.20, CLP/USD:700, USD/BRL:5.10).

8 This is a non-GAAP measure. For historical comparatives see the Historical Non-GAAP Measure Comparatives section of this press release. Please also see the Management’s Discussion and Analysis for the year ended December 31, 2020, for discussion of non-GAAP measures. Capital expenditures have been reported on a cash basis. Discrepancies may exist with other external reports which have been reported on an accrual basis.

2022 Exploration Investment Guidance

Exploration expenditures are planned to be $45 million in 2022. Approximately $40 million is to be spent supporting significant in-mine and near-mine targets at our operations ($15 million at Candelaria, $10 million at Chapada, $8 million at Neves-Corvo, $5 million at Zinkgruvan and $2 million at Eagle). The remaining $5 million is planned to advance activities on exploration stage and new business development projects.

Conference Call

The Company will hold a telephone conference call and webcast at 08:00am ET, 14:00 CET on Tuesday, November 23, 2021, to answer analyst and investor questions. Conference call details are provided below. Please dial in 15 minutes prior to the call start to ensure placement into the conference on time.

Call-in number for the conference call (North America): +1 647 788 4922
Call-in number for the conference call (North America Toll Free): +1 877 223 4471
Call-in number for the conference call (Sweden): 020 012 3522

To view the live webcast presentation, please log on using this direct link:
https://onlinexperiences.com/Launch/QReg/ShowUUID=33E372D6-219B-4957-98C2-4285AEF61753.

The presentation slideshow will also be available in PDF format on the Lundin Mining website www.lundinmining.com before the conference call.

A replay of the telephone conference will be available after the completion of the call through December 23, 2021.

Call-in numbers for the replay are (North America): +1 800 585 8367 or (internationally) +1 416 621 4642.

The passcode for the replay is: 2127909

A replay of the webcast will be available by clicking on the direct link above.

Normal Course Issuer Bid Renewal

Lundin Mining intends to renew its NCIB to purchase up to 63,761,024 common shares of the Company (“Common Shares”) on the Toronto Stock Exchange (the “TSX”). The Company intends to continue to utilize the NCIB from time to time to make opportunistic purchases to create shareholder value and actively manage the number of outstanding Common Shares.

In connection with the NCIB renewal, Lundin Mining intends to enter into an automatic repurchase plan with its designated broker to allow for the repurchase of Common Shares at times when the Company ordinarily would not be active in the market due to its own internal trading blackout periods, insider trading rules or otherwise. Any such plan entered into with the Company’s broker will be adopted in accordance with applicable Canadian securities laws. The Company will determine parameters for such a plan based on market conditions, share price, best use of available cash, and other factors.

The NCIB renewal has been approved by the Company’s Board of Directors; however, it is subject to acceptance by the TSX and, if accepted, will be made in accordance with the applicable rules and policies of the TSX and applicable Canadian securities laws. Under the NCIB, Common Shares may be repurchased in open market transactions on the TSX and/or other Canadian exchanges, or by such other means as may be permitted by the TSX and applicable Canadian securities laws. The price that Lundin Mining will pay for Common Shares in open market transactions will be the market price at the time of purchase.

Pursuant to the NCIB renewal, which will commence following expiry of the current NCIB, it is expected that the Company will be able to purchase up to 63,761,024 Common Shares, representing 10% of the total outstanding Common Shares as of November 22, 2021, minus those Common Shares beneficially owned, or over which control or direction is exercised by the Company, the senior officers and directors of the Company and every shareholder who owns or exercises control or direction over more than 10% of the outstanding Common Shares, over a period of twelve months commencing after TSX approval. In accordance with TSX rules, any daily purchases, other than pursuant to a block purchase exception, on the TSX under the NCIB will be limited to a maximum 25% of the average daily trading volume on the TSX for the six months ended November 30, 2021. Any Common Shares that are purchased under the NCIB will be cancelled.

The actual number of Common Shares that may be purchased and the timing of such purchases will be determined by the Company.

Under the Company’s current NCIB that commenced on December 9, 2020 and which expires on December 8, 2021, the Company previously sought and received approval from the TSX to purchase up to 63,682,170 Common Shares. As of November 22, 2021, the Company has purchased 4,323,100 Common Shares under its current NCIB through open market transactions at a weighted average price of approximately C$11.25 per Common Share.

About Lundin Mining

Lundin Mining is a diversified Canadian base metals mining company with operations in Brazil, Chile, Portugal, Sweden and the United States of America, primarily producing copper, zinc, gold and nickel.

The information in this release is subject to the disclosure requirements of Lundin Mining under the EU Market Abuse Regulation. The information was submitted for publication, through the agency of the contact persons set out below on November 22, 2021 at 18:00 Eastern Time.

Other Information

The Technical Information in this press release has been prepared in accordance with NI 43-101 and has been reviewed and approved by Jeremy Weyland, P.Eng., Acting Vice President, Technical Services of the Company, a “Qualified Person” under NI 43-101. Mr. Weyland has verified the data disclosed in this release and no limitations were imposed on his verification process.

Historical Non-GAAP Measure Comparatives

Cash Cost – Year Ended December 31, 2020

Operations

Candelaria

Chapada

Eagle

Neves-Corvo

Zinkgruvan

($ thousands, unless otherwise noted)

(Cu)

(Cu)

(Ni)

(Cu)

(Zn)

Total

Sales volumes (Contained metal in concentrate):

Tonnes

104,796

33,495

11,622

25,950

46,051

Pounds (000s)

231,035

73,844

25,622

57,210

101,525

Production costs

996,246

Less: Royalties and other

(42,695)

953,551

Deduct: By-product credits

(466,556)

Add: Treatment and refining charges

86,367

Cash cost

368,583

76,527

(39,260)

116,351

51,161

573,362

Cash cost per pound ($/lb)

1.60

1.04

(1.53)

2.03

0.50

Cash cost is non-GAAP measure. See the Management’s Discussion and Analysis for the year ended December 31, 2020, for discussion of non-GAAP measures.

Capital Expenditures – Year Ended December 31, 2020

($ thousands)

Sustaining

Expansionary

Capitalized
Interest

Total

Candelaria

216,018

216,018

Chapada

38,646

38,646

Eagle

11,259

11,259

Neves-Corvo

63,360

63,440

1,294

128,094

Zinkgruvan

36,946

36,946

Other

272

272

366,501

63,440

1,294

431,235

Capital expenditures are reported on a cash basis, as presented in the consolidated statement of cash flows. Sustaining and expansionary capital expenditures are non-GAAP measures. See the Management’s Discussion and Analysis for the year ended December 31, 2020, for discussion of non-GAAP measures.

Cautionary Statement on Forward-Looking Information

Certain of the statements made and information contained herein is “forward-looking information” within the meaning of applicable Canadian securities laws. All statements other than statements of historical facts included in this document constitute forward-looking information, including but not limited to statements regarding the Company’s plans, prospects and business strategies; the Company’s guidance on the timing and amount of future production and its expectations regarding the results of operations; expected costs; permitting requirements and timelines; timing and possible outcome of pending litigation; the results of any Preliminary Economic Assessment, Feasibility Study, or Mineral Resource and Mineral Reserve estimations, life of mine estimates, and mine and mine closure plans; anticipated market prices of metals, currency exchange rates, and interest rates; the development and implementation of the Company’s Responsible Mining Management System; the Company’s ability to comply with contractual and permitting or other regulatory requirements; anticipated exploration and development activities at the Company’s projects; and the Company’s integration of acquisitions and any anticipated benefits thereof. Words such as “believe”, “expect”, “anticipate”, “contemplate”, “target”, “plan”, “goal”, “aim”, “intend”, “continue”, “budget”, “estimate”, “may”, “will”, “can”, “could”, “should”, “schedule” and similar expressions identify forward-looking statements.

Forward-looking information is necessarily based upon various estimates and assumptions including, without limitation, the expectations and beliefs of management, including that the Company can access financing, appropriate equipment and sufficient labor; assumed and future price of copper, nickel, zinc, gold and other metals; anticipated costs; ability to achieve goals; the prompt and effective integration of acquisitions; that the political environment in which the Company operates will continue to support the development and operation of mining projects; and assumptions related to the factors set forth below. While these factors and assumptions are considered reasonable by Lundin Mining as at the date of this document in light of management’s experience and perception of current conditions and expected developments, these statements are inherently subject to significant business, economic and competitive uncertainties and contingencies. Known and unknown factors could cause actual results to differ materially from those projected in the forward-looking statements and undue reliance should not be placed on such statements and information. Such factors include, but are not limited to: risks inherent in mining including but not limited to risks to the environment, industrial accidents, catastrophic equipment failures, unusual or unexpected geological formations or unstable ground conditions, and natural phenomena such as earthquakes, flooding or unusually severe weather; uninsurable risks; global financial conditions and inflation; changes in the Company’s share price, and volatility in the equity markets in general; volatility and fluctuations in metal and commodity prices; the threat associated with outbreaks of viruses and infectious diseases, including the COVID-19 virus; changing taxation regimes; reliance on a single asset; delays or the inability to obtain, retain or comply with permits; risks related to negative publicity with respect to the Company or the mining industry in general; health and safety risks; exploration, development or mining results not being consistent with the Company’s expectations; unavailable or inaccessible infrastructure and risks related to ageing infrastructure; actual ore mined and/or metal recoveries varying from Mineral Resource and Mineral Reserve estimates, estimates of grade, tonnage, dilution, mine plans and metallurgical and other characteristics; risks associated with the estimation of Mineral Resources and Mineral Reserves and the geology, grade and continuity of mineral deposits including but not limited to models relating thereto; ore processing efficiency; community and stakeholder opposition; information technology and cybersecurity risks; potential for the allegation of fraud and corruption involving the Company, its customers, suppliers or employees, or the allegation of improper or discriminatory employment practices, or human rights violations; regulatory investigations, enforcement, sanctions and/or related or other litigation; uncertain political and economic environments, including in Brazil and Chile; risks associated with the structural stability of waste rock dumps or tailings storage facilities; estimates of future production and operations; estimates of operating, cash and all-in sustaining cost estimates; civil disruption in Chile; the potential for and effects of labor disputes or other unanticipated difficulties with or shortages of labor or interruptions in production; risks related to the environmental regulation and environmental impact of the Company’s operations and products and management thereof; exchange rate fluctuations; reliance on third parties and consultants in foreign jurisdictions; climate change; risks relating to attracting and retaining of highly skilled employees; compliance with environmental, health and safety laws; counterparty and credit risks and customer concentration; litigation; risks inherent in and/or associated with operating in foreign countries and emerging markets; risks related to mine closure activities and closed and historical sites; changes in laws, regulations or policies including but not limited to those related to mining regimes, permitting and approvals, environmental and tailings management, labor, trade relations, and transportation; internal controls; challenges or defects in title; the estimation of asset carrying values; historical environmental liabilities and ongoing reclamation obligations; the price and availability of key operating supplies or services; competition; indebtedness; compliance with foreign laws; existence of significant shareholders; liquidity risks and limited financial resources; funding requirements and availability of financing; enforcing legal rights in foreign jurisdictions; dilution; risks relating to dividends; risks associated with acquisitions and related integration efforts, including the ability to achieve anticipated benefits, unanticipated difficulties or expenditures relating to integration and diversion of management time on integration; activist shareholders and proxy solicitation matters; and other risks and uncertainties, including but not limited to those described in the “Risk and Uncertainties” section of the Annual Information Form and the “Managing Risks” section of the Company’s MD&A for the year ended December 31, 2020, which are available on SEDAR at www.sedar.com under the Company’s profile. All of the forward-looking statements made in this document are qualified by these cautionary statements. Although the Company has attempted to identify important factors that could cause actual results to differ materially from those contained in forward-looking information, there may be other factors that cause results not to be as anticipated, estimated, forecast or intended and readers are cautioned that the foregoing list is not exhaustive of all factors and assumptions which may have been used. Should one or more of these risks and uncertainties materialize, or should underlying assumptions prove incorrect, actual results may vary materially from those described in forward-looking information. Accordingly, there can be no assurance that forward-looking information will prove to be accurate and forward-looking information is not a guarantee of future performance. Readers are advised not to place undue reliance on forward-looking information. The forward-looking information contained herein speaks only as of the date of this document. The Company disclaims any intention or obligation to update or revise forwardlooking information or to explain any material difference between such and subsequent actual events, except as required by applicable law.

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George Weston Limited Reports Third Quarter 2021 Results(2)

George Weston Limited Reports Third Quarter 2021 Results(2)
Canada NewsWire
TORONTO, Nov. 23, 2021

TORONTO, Nov. 23, 2021 /CNW/ – George Weston Limited (TSX: WN) (“GWL” or the “Company”) today announced its consolidated unaudited results for the 16…

George Weston Limited Reports Third Quarter 2021 Results(2)

Canada NewsWire

TORONTO, Nov. 23, 2021 /CNW/ – George Weston Limited (TSX: WN) (“GWL” or the “Company”) today announced its consolidated unaudited results for the 16 weeks ended October 9, 2021.

GWL’s 2021 Third Quarter Report has been filed on SEDAR and is available at sedar.com and in the Investor Centre section of the Company’s website at weston.ca.

George Weston’s third quarter results reflect the strength of its underlying operating businesses. Loblaw’s focus on core retail execution and an enthusiastic consumer response drove another quarter of strong financial results, while Choice Properties’ results were stable and reflect its resilient necessity-based portfolio,” said Galen G. Weston, Chairman and Chief Executive Officer, George Weston Limited. “With the recently announced agreements to sell Weston Foods, George Weston will continue to focus on its market-leading Retail and Real Estate businesses. The Company is pleased that the proud legacy of the bakery business is well-positioned to continue into the future with two high-quality buyers.”

Loblaw Companies Limited (“Loblaw”) delivered another quarter of positive financial results. Loblaw experienced strong demand in stores and online, as economies re-opened and eat-at-home trends remained elevated. Seasonal shopping for back-to-school and Thanksgiving was robust. In Loblaw’s pharmacy business, beauty sales climbed with gradual return to social and work activities while drug sales grew, supported by demand for pharmacy services. Loblaw maintained its focus on delivering service and value where consumers and their families need it most.

Choice Properties Real Estate Investment Trust (“Choice Properties”) delivered strong financial and operational results in the third quarter of 2021. Contractual rent collections remained high at 99%, reflecting Choice Properties’ necessity-based portfolio. During the quarter, Choice Properties continued to advance its long-term pipeline of mixed-use development, submitting zoning applications for two additional projects. To date, Choice Properties has approximately 10 million square feet of potential density submitted for zoning approval. Choice Properties’ balance sheet is strong, and the business is well positioned to execute on its pipeline of compelling development opportunities.

As at the end of the third quarter of 2021, the Company’s interest in Weston Foods is presented under Discontinued Operations. Unless otherwise indicated, all financial information in this News Release represents the results from Continuing Operations.

2021 THIRD QUARTER HIGHLIGHTS

George Weston Limited’s net earnings available to common shareholders of the Company from continuing operations were $238 million ($1.58 per common share) a decrease of $51 million ($0.29 per common share) compared to the same period in 2020. The decrease was due to the unfavourable year-over-year net impact of adjusting items totaling $73 million ($0.50 per common share), which were primarily comprised of the unfavourable year-over-year impact of the fair value adjustment of the Trust Unit liability of $64 million ($0.43 per common share) as a result of the increase of Choice Properties’ unit price in the quarter, partially offset by an improvement of $22 million ($0.21 per common share) in the Company’s consolidated underlying operating performance.

Adjusted net earnings available to common shareholders of the Company(1) from continuing operations in the third quarter of 2021 were $365 million ($2.43 per common share). Compared to the same period in 2020, this represented an increase of $22 million ($0.21 per common share), or 6.4%, primarily due to the improvement in the underlying operating performance of Loblaw. The increase in adjusted diluted net earnings per common share(1) from continuing operations of $0.21, or 9.5%, was due to the improvement in adjusted net earnings available to common shareholders of the Company(1) from continuing operations and the favourable impact of share repurchases.

CONSOLIDATED RESULTS OF OPERATIONS

The Company’s results reflect the impact of COVID-19 and the year-over-year impact of the fair value adjustment of the Trust Unit liability as a result of the significant changes in Choice Properties’ unit price, recorded in net interest expense and other financing charges. The Company’s results are impacted by market price fluctuations of Choice Properties’ Trust Units on the basis that the Trust Units held by unitholders, other than the Company, are redeemable for cash at the option of the holder and are presented as a liability on the Company’s consolidated balance sheet. The Company’s financial results are negatively impacted when the Trust Unit price rises and positively impacted when the Trust Unit price declines.

The Company’s interest in Weston Foods is presented separately as Discontinued Operations in the Company’s current and comparative results.

Unless otherwise indicated, all financial information represents the Company’s results from Continuing Operations.

(unaudited)

($ millions except where otherwise
   indicated)
For the periods ended as indicated

16 Weeks Ended

40 Weeks Ended

Oct. 9, 2021

Oct. 3, 2020(3,4)

$ Change

% Change

Oct. 9, 2021

Oct 3, 2020(3,4)

$ Change

% Change

Revenue

$

16,192

$

15,806

$

386

2.4 %

$

40,846

$

39,840

$

1,006

2.5 %

Operating income

$

1,125

$

964

$

161

16.7 %

$

3,018

$

2,006

$

1,012

50.4 %

Adjusted EBITDA(1)

$

1,780

$

1,644

$

136

8.3 %

$

4,542

$

3,960

$

582

14.7 %

Adjusted EBITDA margin(1)

11.0 %

10.4 %

11.1 %

9.9 %

Net earnings attributable to
   shareholders of the Company
   from Continuing Operations

$

252

$

303

$

(51)

(16.8)%

$

325

$

683

$

(358)

(52.4)%

Net earnings available to
   common shareholders
   of the Company

$

124

$

303

$

(179)

(59.1)%

$

170

$

630

$

(460)

(73.0)%

Continuing Operations

$

238

$

289

$

(51)

(17.6)%

$

291

$

649

$

(358)

(55.2)%

Discontinued Operations

$

(114)

$

14

$

(128)

(914.3)%

$

(121)

$

(19)

$

(102)

(536.8)%

Adjusted net earnings 
   available to common
   shareholders of the Company(1)

$

359

$

358

$

1

0.3 %

$

874

$

736

$

138

18.8 %

Continuing Operations

$

365

$

343

$

22

6.4 %

$

885

$

725

$

160

22.1 %

Discontinued Operations

$

(6)

$

15

$

(21)

(140.0)%

$

(11)

$

11

$

(22)

(200.0)%

Diluted net earnings 
   per common share 
($)

$

0.82

$

1.96

$

(1.14)

(58.2)%

$

1.10

$

4.08

$

(2.98)

(73.0)%

Continuing Operations

$

1.58

$

1.87

$

(0.29)

(15.5)%

$

1.90

$

4.21

$

(2.31)

(54.9)%

Discontinued Operations

$

(0.76)

$

0.09

$

(0.85)

(944.4)%

$

(0.80)

$

(0.13)

$

(0.67)

(515.4)%

Adjusted diluted net earnings
   per common share(1) ($)

$

2.39

$

2.32

$

0.07

3.0 %

$

5.76

$

4.77

$

0.99

20.8 %

Continuing operations

$

2.43

$

2.22

$

0.21

9.5 %

$

5.83

$

4.70

$

1.13

24.0 %

Discontinued operations

$

(0.04)

$

0.10

$

(0.14)

(140.0)%

$

(0.07)

$

0.07

$

(0.14)

(200.0)%

In the third quarter of 2021, the Company recorded net earnings available to common shareholders of the Company from continuing operations of $238 million ($1.58 per common share), a decrease of $51 million ($0.29 per common share) compared to the same period in 2020. The decrease was due to the unfavourable year-over-year net impact of adjusting items totaling $73 million ($0.50 per common share), partially offset by an improvement of $22 million ($0.21 per common share) in the consolidated underlying operating performance of the Company described below.

  • The unfavourable year-over-year net impact of adjusting items totaling $73 million ($0.50 per common share) was primarily due to:
    • the unfavourable year-over-year impact of the fair value adjustment of the Trust Unit liability of $64 million ($0.43 per common share) as a result of the increase in Choice Properties’ unit price in the third quarter of 2021; and
    • the unfavourable year-over-year impact of the fair value adjustment of the forward sale agreement of Loblaw common shares of $41 million ($0.28 per common share); 

               partially offset by,

    • the favourable year-over-year impact of the fair value adjustment on investment properties of $30 million ($0.21 per common share) primarily driven by Choice Properties, net of consolidation adjustments in Other and Intersegment.
  • The improvement in the Company’s consolidated underlying operating performance of $22 million ($0.21 per common share) was due to:
    • the favourable underlying operating performance of Loblaw; and
    • a decrease in adjusted net interest expense and other financing charges(1);

               partially offset by,

    • the unfavourable year-over-year impact of certain one-time gains in the prior year recorded on consolidation in Other and Intersegment related to Choice Properties’ transactions.
  • Diluted net earnings per common share from continuing operations also included the favourable impact of shares purchased for cancellation over the last 12 months ($0.06 per common share).

Adjusted net earnings available to common shareholders of the Company(1) from continuing operations were $365 million, an increase of $22 million, or 6.4%, compared to the same period in 2020 due to the improvement in the Company’s consolidated underlying operating performance described above. Adjusted diluted net earnings per common share(1) from continuing operations were $2.43 per common share in the third quarter of 2021, an increase of $0.21 per common share, or 9.5%, compared to the same period in 2020. The increase was due to the favourable performance in adjusted net earnings available to common shareholders of the Company(1) from continuing operations and the favourable impact of share repurchases.

SALE OF WESTON FOODS AND DISCONTINUED OPERATIONS  On March 23, 2021, the Company announced its intention to launch a process to sell the Weston Foods business, comprised of the fresh, frozen and ambient bakery businesses. As at October 9, 2021, Weston Foods was classified as assets held for sale and discontinued operations. Subsequent to the end of the third quarter of 2021, the Company announced on October 26, 2021, an agreement to sell the fresh and frozen bakery businesses, for aggregate cash consideration of $1.2 billion and on November 15, 2021, an agreement to sell the ambient business for aggregate cash consideration of $370 million. The transactions are subject to compliance with applicable competition law and regulatory reviews and other closing conditions customary for transactions of this nature. Subject to the receipt of all regulatory approvals and satisfaction of customary closing conditions, the Company expects to close each of the transactions before the end of the first quarter of 2022. Upon closing of each respective transaction, the respective purchaser will enter into a supply agreement with Loblaw.

Discontinued operations represents results of Weston Foods, net of intersegment eliminations.

Weston Foods sales were $584 million in the third quarter of 2021, a decrease of 1.4% compared to the same period of 2020, and included the unfavourable impact of foreign currency translation of approximately 3.1%. Excluding the unfavourable impact of foreign currency translation, Weston Foods sales increased by 1.7% compared to the same period of 2020.

Net loss available to common shareholders of the Company from discontinued operations in the third quarter of 2021 was $114 million ($0.76 per common share) compared to net earnings available to common shareholders of the Company from discontinued operations of $14 million ($0.09 per common share) in the same period of 2020, a decrease of $128 million ($0.85 per common share). The decrease was due to the unfavourable year-over-year net impact of adjusting items totaling $107 million ($0.71 per common share) and the unfavourable underlying operating performance of Weston Foods of $21 million ($0.14 per common share). The unfavourable year-over-year net impact of adjusting items were primarily due to:

    • a non-cash goodwill impairment net of deferred tax recovery of $79 million ($0.53 per common share). Upon classifying Weston Foods as held for sale, the net assets of fresh and frozen, and ambient businesses were separately measured at the lower of their carrying value or fair value less costs to sell. Fair value less costs to sell represents expected aggregate proceeds from the sale less estimated closing costs and estimated adjustments customary of transactions of this nature;
    • deferred tax expense on outside basis difference of Weston Foods of $17 million ($0.11 per common share). The deferred tax expense pertains to temporary differences in respect of GWL’s investment in Weston Foods that are expected to reverse in the foreseeable future; and
    • transaction and other related costs in connection with the sale of the Weston Foods business of $13 million ($0.09 per common share).

Adjusted net loss available to common shareholders of the Company(1) from discontinued operations in the third quarter of 2021 was $6 million ($0.04 per common share), a decrease of $21 million ($0.14 per common share) compared to the same period in 2020, driven by a decline in the underlying operating performance of Weston Foods.

CONSOLIDATED OTHER BUSINESS MATTERS

COVID-19 RELATED COSTS  The Company incurred COVID-19 related costs of approximately $20 million and $141 million in the third quarter of 2021 and year-to-date, respectively (2020 – $89 million and $418 million), primarily related to safety and security measures to protect colleagues, customers, tenants and other stakeholders. The estimated COVID-19 related costs incurred by each of the Company’s reportable operating segments were as follows:

(unaudited)

($ millions)

16 Weeks Ended

40 Weeks Ended

Oct. 9, 2021

Oct. 3, 2020

Oct. 9, 2021

Oct. 3, 2020

Loblaw(i)

$

19

$

85

$

137

$

399

Choice Properties(ii)

1

4

4

19

Consolidated

$

20

$

89

$

141

$

418

(i)

Loblaw’s COVID-19 related costs included $25 million and $180 million related to one-time bonuses and benefits for store and distribution centre colleagues in the second quarters of 2021 and 2020, respectively.     

(ii)

Choice Properties recorded a provision of $1 million (2020 – $4 million) and $4 million (2020 – $19 million) in the third quarter of 2021 and year-to-date, respectively, for certain past due amounts, reflecting increased collectability risk and negotiated rent abatements.

Refer to “Outlook” of this News Release for more information.

GWL CORPORATE(5) FINANCING ACTIVITIES  The Company completed the following financing activities during the third quarters of 2021 and 2020. The cash impacts of these activities are set out below:

(unaudited)

($ millions)

16 Weeks Ended

40 Weeks Ended

Oct. 9, 2021

Oct. 3, 2020

Oct. 9, 2021

Oct. 3, 2020

Net Debt Associated with Equity Forward Sale
   Agreement

$

(462)

$

$

(515)

$

GWL Normal Course Issuer Bid (“NCIB”) – Purchased
   and cancelled(i)(ii)

(411)

(577)

GWL’s Participation in Loblaw’s NCIB

136

169

474

261

Net Cash Flow (Used) From Above Activities

$

(737)

$

169

$

(618)

$

261

(i)

$26 million of cash consideration related to common shares repurchased under the NCIB for cancellation in the second quarter of 2021 was paid in the third quarter of 2021.

(ii)

$31 million of cash consideration related to common shares repurchased under the NCIB for cancellation in the third quarter of 2021 was paid in the fourth quarter of 2021.

NET DEBT ASSOCIATED WITH EQUITY FORWARD SALE AGREEMENT  In the second quarter of 2021, the Company began to settle the net debt associated with the equity forward sale agreement. In the third quarter of 2021, the Company paid $462 million, net of the $298 million gain on the settlement of 5.83 million of the 9.6 million shares under the agreement, to redeem $283 million of the Series A Debentures and $475 million of the Series B Debentures, plus accrued interest.

Subsequent to the end of the third quarter of 2021, the Company paid $275 million to settle the remaining balance, resulting in the extinguishment of the Series A Debentures, Series B Debentures and the settlement of the equity forward sale agreement. In aggregate, $790 million was paid to extinguish the net debt associated with the equity forward sale agreement.

The 9.6 million Loblaw shares securing the net debt have been released and the Company’s economic interest in Loblaw is now equal to its voting interest in Loblaw.

Refer to Section 3.3, “Components of Total Debt” of the Company’s 2021 Third Quarter MD&A for more information.

GWL CREDIT FACILITY  In the third quarter of 2021, GWL entered into a $350 million revolving committed credit facility provided by a syndicate of lenders with a maturity date of September 13, 2024. The credit facility contains certain financial covenants. Subsequent to the end of the third quarter of 2021, the Company drew $275 million on its credit facility to fund the settlement of the net debt associated with the equity forward sale agreement.

Refer to Section 3.3, “Components of Total Debt” of the Company’s 2021 Third Quarter MD&A for more information.

GWL’S NCIB – PURCHASED AND CANCELLED SHARES  In the third quarter of 2021, the Company purchased and cancelled 3.2 million shares under its NCIB program. At the end of the quarter, the Company had 147.5 million shares outstanding.

In the second quarter of 2021, the Company entered into an automatic share purchase plan (“ASPP”) with a broker in order to facilitate the repurchase of the Company’s common shares under its NCIB. During the effective period of the ASPP, the Company’s broker may purchase common shares at times when the Company would not be active in the market. Subsequent to the end of the third quarter of 2021, the Company purchased and cancelled approximately $70 million of its common shares under its ASPP.

Refer to Section 3.6, “Share Capital” of the Company’s 2021 Third Quarter MD&A for more information.

GWL’S PARTICIPATION IN LOBLAW’S NCIB  Commencing in the first quarter of 2020, the Company began participating in Loblaw’s NCIB program in order to maintain its proportionate percentage ownership. During the third quarter of 2021, GWL received proceeds of $136 million from the sale of Loblaw shares.

REPORTABLE OPERATING SEGMENTS

The Company operates through its two reportable operating segments: Loblaw and Choice Properties. Other and Intersegment includes eliminations, intersegment adjustments related to the consolidation and cash and short-term investments held by the Company. All other company level activities that are not allocated to the reportable operating segments, such as interest expense, corporate activities and administrative costs are included in Other and Intersegment.

Loblaw has two reportable operating segments, retail and financial services. Loblaw’s retail segment consists primarily of food retail and drug retail. Loblaw provides Canadians with grocery, pharmacy, health and beauty, apparel, general merchandise and financial services.

Choice Properties owns, manages and develops a high-quality portfolio of commercial retail, industrial, office and residential properties across Canada.

Loblaw Operating Results 

(unaudited)
($ millions except where otherwise
    indicated)
For the periods ended as indicated

16 Weeks Ended

40 Weeks Ended

Oct. 9, 2021

Oct. 3, 2020(3)

$ Change

% Change

Oct. 9, 2021

Oct. 3, 2020(3)

$ Change

% Change

Revenue

$

16,050

$

15,671

$

379

2.4 %

$

40,413

$

39,428

$

985

2.5 %

Operating income

$

861

$

716

$

145

20.3 %

$

2,226

$

1,657

$

569

34.3 %

Adjusted EBITDA(1)

$

1,672

$

1,516

$

156

10.3 %

$

4,257

$

3,685

$

572

15.5 %

Adjusted EBITDA margin(1)

    ­    10.4 %

9.7 %

    ­    10.5 %

9.3 %

Depreciation and
  amortization(i)

$

817

$

795

$

22

2.8 %

$

2,041

$

1,987

$

54

2.7 %

(i)

Depreciation and amortization in the third quarter of 2021 includes $155 million (2020 – $155 million) of amortization of intangible assets acquired with Shoppers Drug Mart Corporation (“Shoppers Drug Mart”).

Revenue  Loblaw revenue in the third quarter of 2021 was $16,050 million, an increase of $379 million, or 2.4%, compared to the same period in 2020, driven by an increase in retail sales and an improvement in financial services revenue.

Retail sales increased by $367 million, or 2.4%, compared to the same period in 2020 and included food retail sales of $11,382 million (2020 – $11,215 million) and drug retail sales of $4,449 million (2020 – $4,249 million). The increase was primarily driven by the following factors:

  • food retail same-store sales grew by 0.2% for the quarter. Sales were impacted by lower eat-at-home trends after strong growth last year, offset by higher industry inflation levels. The two year food retail sales Compound Annual Growth Rate (“CAGR”)(6) was 4.5%. Food retail basket size decreased and traffic increased in the quarter, as compared to the third quarter of 2020;
  • Loblaw’s internal measures of inflation were slightly higher than the average quarterly national food price inflation of 2.6% (2020 – 1.8%), as measured by The Consumer Price Index for Food Purchased from Stores; and
  • drug retail same-store sales grew by 4.4% (2020 – 6.1%). Pharmacy same-store sales growth benefited from strong sales in fee related services. Front store same-store sales growth benefited from the economic re-opening in the third quarter of 2021. Pharmacy same-store sales growth was 4.8% and front store same-store sales increased by 4.1%. The two year drug retail sales CAGR(6) was 5.5%.

In the last 12 months, 15 food and drug stores were opened and fourteen food and drug stores were closed, resulting in a net increase in retail square footage of 0.3 million square feet, or 0.4%. 

Financial services revenue in the third quarter of 2021 increased by $19 million compared to the same period in 2020. The increase was primarily driven by higher interchange income from an increase in customer spending.

Operating income  Loblaw operating income in the third quarter of 2021 was $861 million, an increase of $145 million, or 20.3%, compared to the same period in 2020. The increase included the improvement in underlying operating performance of $134 million and the favourable year-over-year net impact of adjusting items totaling $11 million, as described below:

  • the improvement in underlying operating performance of $134 million was primarily due to the following:
    • an improvement in the underlying operating performance of retail due to an increase in retail gross profit, partially offset by an increase in selling, general and administrative expenses (“SG&A”) and depreciation and amortization; and
    • the improvement in the underlying operating performance of financial services.
  • the favourable year-over-year net impact of adjusting items totaling $11 million was primarily due to:
    • the favourable year-over-year impact of fair value adjustments on fuel and foreign currency contracts of $8 million; and
    • the favourable year-over-year impact of a net gain on sale of non-operating properties of $6 million;

               partially offset by,

    • the unfavourable year-over-year impact of restructuring and other related costs of $3 million.

Adjusted EBITDA(1)  Loblaw adjusted EBITDA(1) in the third quarter of 2021 was $1,672 million, an increase of $156 million, or 10.3%, compared to the same period in 2020. The increase was primarily due to an increase in retail of $149 million and an increase in financial services of $7 million.

Retail adjusted EBITDA(1) in the third quarter of 2021 increased by $149 million driven by an increase in retail gross profit partially offset by an increase in SG&A of $173 million.

  • Retail gross profit percentage of 30.7% increased by 140 basis points compared to the same period in 2020, from a favourable change in sales mix in both food retail and drug retail and underlying improvements in business initiatives.
  • Retail SG&A as a percentage of sales was 20.5%, an increase of 70 basis points compared to the same period of 2020. The increase was primarily due to the normalization of post-lockdown operating conditions and higher costs incurred in drug retail from providing fee related services, partially offset by a reduction in COVID-19 costs.

Financial services adjusted EBITDA(1) increased by $7 million compared to the same period in 2020, primarily driven by higher revenue as described above, lower contractual charge-off and lower funding costs. This was partially offset by higher loyalty program costs and operating costs.

Depreciation and Amortization  Loblaw depreciation and amortization in the third quarter of 2021 was $817 million, an increase of $22 million compared to the same period in 2020, primarily driven by an increase in depreciation of information technology (“IT”) and leased assets and an increase in depreciation in the financial services due to the launch of the PC Money Account. Included in depreciation and amortization is the amortization of intangible assets acquired with Shoppers Drug Mart of $155 million (2020 – $155 million).

Consolidation of Franchises  Loblaw has more than 500 franchise food retail stores in its network. Non-controlling interests at Loblaw represent the franchise’s earnings in food. Loblaw’s net earnings attributable to non-controlling interests were $54 million in the third quarter of 2021. When compared to the third quarter of 2020, this represented an increase of $39 million or 260%. The increases in non-controlling interests at Loblaw were primarily driven by higher franchise earnings in comparison to the same period in 2020.

Network Optimization  Subsequent to the end of the third quarter of 2021, Loblaw finalized network optimization plans that will result in banner conversions, closures and right-sizing of approximately 20 unprofitable retail locations across a range of banners and formats, the majority of which will be banner conversions and 3 will be closures within food retail. Loblaw expects to record charges of approximately $25 million to $35 million resulting from this network optimization. These charges will be recorded as incurred and are expected to include equipment, severance, lease related and other costs. Loblaw expects to realize approximately $25 million in annualized EBITDA run-rate savings related to these plans. This store optimization project will be substantially complete by the end of 2022. As Loblaw places emphasis on optimizing its store and office network, there may be additional charges of this nature in the fourth quarter of 2021 and into 2022. 

Choice Properties Operating Results

(unaudited)

($ millions except where otherwise
   indicated)

For the periods ended as indicated

16 Weeks Ended

40 Weeks Ended

Oct. 9, 2021

Oct. 3, 2020

$ Change

% Change

Oct. 9, 2021

Oct. 3, 2020

$ Change

% Change

Revenue

$

316

$

309

$

7

2.3 %

$

967

$

949

$

18

1.9 %

Net interest expense (income)
   and other financing charges(i)

$

113

$

145

$

(32)

(22.1)%

$

878

$

(44)

$

922

2,095.5 %

Net income

$

163

$

97

$

66

68.0%

$

186

$

334

$

(148)

(44.3)%

Funds from Operations(1)

$

173

$

169

$

4

2.4 %

$

515

$

480

$

35

7.3 %

(i)

Net interest expense (income) and other financing charges includes a fair value adjustment on Exchangeable Units.

Revenue  Revenue in the third quarter of 2021 was $316 million, an increase of $7 million, or 2.3%, compared to the same period in 2020, and included $176 million (2020 – $176 million) generated from tenants within Loblaw.

The increase in revenue was primarily driven by:

  • the contribution from acquisitions and development transfers completed in 2020 and 2021;

      partially offset by,

  • declines due to foregone revenue from dispositions in 2020; and
  • vacancies in select retail and office assets.

Net Interest Expense and Other Financing Charges  Net interest expense and other financing charges in the third quarter of 2021 were $113 million compared to $145 million in the same period in 2020. The decrease of $32 million was primarily driven by the favourable year-over-year impact of the fair value adjustment of Exchangeable Units of $31 million.

Net Income  Net income in the third quarter of 2021 was $163 million, compared to $97 million in the same period in 2020. The increase of $66 million was primarily driven by:

  • lower net interest expense and other financing charges as described above;
  • the favourable change in the adjustment to fair value of investment properties, including those held within equity accounted joint ventures;
  • a decline in expected credit loss provisions; and
  • an increase in rental revenue as described above.

Funds from Operations(1)  Funds from Operations(1) in the third quarter of 2021 was $173 million, an increase of $4 million compared to the same period in 2020, primarily due to a decline in expected credit loss provisions, and the contribution from acquisitions and development transfers completed in 2020 and 2021.

Other Matters  Subsequent to the end of the third quarter of 2021, Choice Properties announced that on December 10, 2021, it will redeem in full, at par, plus accrued and unpaid interest thereon, the $300 million aggregate principal amount of series I senior unsecured debentures outstanding bearing interest at 3.01% with an original maturity date of March 21, 2022.

Subsequent to the end of the third quarter of 2021, Choice Properties agreed to issue, on a private placement basis, $350 million aggregate principal amount of series Q senior unsecured debentures, bearing interest at a rate of 2.456% per annum and maturing on November 30, 2026.

Subsequent to the end of the third quarter of 2021, Choice Properties announced that the Toronto Stock Exchange (“TSX”) accepted its intention to make a NCIB to purchase on the TSX or through alternative trading systems up to 27,558,665 of its Trust Units during a 12-month period commencing November 19, 2021 and terminating November 18, 2022.

OUTLOOK(2)

For 2021, the Company expects adjusted net earnings(1) from continuing operations to increase due to the results from its operating segments, including the continued improved performance of Loblaw, and to use excess cash to repurchase shares.

Loblaw  Loblaw’s businesses continues to be impacted by the pandemic in 2021, including the challenge of lapping elevated 2020 sales.

On a full year basis, Loblaw expects:

  • its core retail business to grow earnings faster than sales;
  • growth in financial services profitability;
  • to invest approximately $1.2 billion in capital expenditures, net of proceeds from property disposals; and
  • to return capital to shareholders by allocating a significant portion of free cash flow to share repurchases.

Based on its year to date operating and financial performance and momentum exiting the third quarter, Loblaw expects year-over-year adjusted diluted net earnings per common share(1) growth in the low-to-mid thirty percent range, excluding the impact of the 53rd week in the fourth quarter of fiscal year 2020 and the charges associated with Loblaw’s network optimization as described in Loblaw Operating Results of this News Release.

In the third quarter, Loblaw’s COVID-19 related costs were approximately $19 million. Loblaw incurred COVID-19 costs in the four weeks after the end of the third quarter of 2021 of approximately $4 million.

Choice Properties  Choice Properties’ goal is to provide net asset value appreciation, stable net operating income growth and capital preservation, all with a long-term focus. 

Although there remains uncertainty on the longer-term impact of the COVID-19 pandemic, Choice Properties remains confident that its business model, stable tenant base, and disciplined approach to financial management will continue to position it well. At the end of the third quarter of 2021, Choice Properties’ diversified portfolio of retail, industrial and office properties was 97% occupied and leased to high-quality tenants across Canada. Choice Properties’ retail portfolio is primarily leased to grocery stores, pharmacies or other necessity-based tenants, and logistics providers, who continue to perform well in this environment and provide stability to Choice Properties’ overall portfolio. The stability is evident in Choice Properties’ financial results and rent collections, which exceeded 99% for the third quarter.

Choice Properties continues to advance its development program, which provides Choice Properties with the best opportunity to add high-quality real estate to its portfolio at a reasonable cost and drive net asset value appreciation over time. Choice Properties has a mix of active development projects ranging in size, scale, and complexity, including retail intensification projects, industrial greenfield development and rental residential projects located in urban markets with a focus on transit accessibility.

Underpinning all aspects of Choice Properties’ business model is a strong balance sheet and a disciplined approach to financial management. Choice Properties takes a conservative approach to leverage and financing risk by maintaining strong leverage ratios and a staggered debt maturity profile.

DECLARATION OF QUARTERLY DIVIDENDS

Subsequent to the end of the third quarter of 2021, the Company’s Board of Directors declared a quarterly dividend on GWL Common Shares, Preferred Shares, Series I, Preferred Shares, Series III, Preferred Shares, Series IV and Preferred Shares, Series V payable as follows:

Common Shares

$0.600 per share payable January 1, 2022, to shareholders of record December 15, 2021;

Preferred Shares, Series I

$0.3625 per share payable December 15, 2021, to shareholders of record November 30, 2021;

Preferred Shares, Series III

$0.3250 per share payable January 1, 2022, to shareholders of record December 15, 2021;

Preferred Shares, Series IV

$0.3250 per share payable January 1, 2022, to shareholders of record December 15, 2021;

Preferred Shares, Series V

$0.296875 per share payable January 1, 2022, to shareholders of record December 15, 2021.

NON-GAAP FINANCIAL MEASURES

The Company uses non-GAAP financial measures as it believes these measures provide useful information to both management and investors with regard to accurately assessing the Company’s financial performance and financial condition.

Management uses these and other non-GAAP financial measures to exclude the impact of certain expenses and income that must be recognized under GAAP when analyzing underlying consolidated and segment operating performance, as the excluded items are not necessarily reflective of the Company’s underlying operating performance and make comparisons of underlying financial performance between periods difficult. The Company excludes additional items if it believes doing so would result in a more effective analysis of underlying operating performance. The exclusion of certain items does not imply that they are non-recurring.

These measures do not have a standardized meaning prescribed by GAAP and therefore they may not be comparable to similarly titled measures presented by other publicly traded companies, and should not be construed as an alternative to other financial measures determined in accordance with GAAP.

For reconciliation to, and description of the Company’s non-GAAP financial measures and financial metrics, see Section 9, “Non-GAAP Financial Measures”, of the MD&A in the Company’s 2021 Third Quarter Report.

Non-GAAP Financial Measures Policy Change Effective First Quarter of 2021  In 2020, management undertook a review of historical adjusting items as part of an effort to reduce the number of non-GAAP items it adjusts for in its financial reporting. Management concluded that, in order to present adjusting items in a manner more consistent with that of its Canadian and U.S. peers, the Company will no longer adjust for fixed asset and other related impairments (net of recoveries), certain restructuring and other related costs, pension settlement costs, statutory income tax rate changes or other items. For further details please refer to Section 9.1 “Non-GAAP Financial Measures Policy Change Effective First Quarter of 2021” of the MD&A in the Company’s 2021 Third Quarter Report.

FORWARD-LOOKING STATEMENTS

This News Release contains forward-looking statements about the Company’s objectives, plans, goals, aspirations, strategies, financial condition, results of operations, cash flows, performance, prospects, opportunities and legal and regulatory matters. Specific forward-looking statements in this News Release include, but are not limited to, statements with respect to the Company’s anticipated future results, events and plans, strategic initiatives and restructuring, regulatory changes including further healthcare reform, future liquidity, planned capital investments, and the status and impact of IT systems implementations. Additionally, there can be no assurance regarding (a) the ability of the Company to successfully complete the sale of the Weston Foods fresh, frozen or ambient businesses, (b) the proceeds to be derived from the transactions referenced in this News Release, and (c) the timing of closing of any such sale. These specific forward-looking statements are contained throughout this News Release including, without limitation, in the “Outlook” section of this News Release. Forward-looking statements are typically identified by words such as “expect”, “anticipate”, “believe”, “foresee”, “could”, “estimate”, “goal”, “intend”, “plan”, “seek”, “strive”, “will”, “may”, “should” and similar expressions, as they relate to the Company and its management.

Forward-looking statements reflect the Company’s estimates, beliefs and assumptions, which are based on management’s perception of historical trends, current conditions and expected future developments, as well as other factors it believes are appropriate in the circumstances. The Company’s expectation of operating and financial performance in 2021 is based on certain assumptions, including assumptions about the COVID-19 pandemic, healthcare reform impacts, anticipated cost savings and operating efficiencies and anticipated benefits from strategic initiatives. The Company’s estimates, beliefs and assumptions are inherently subject to significant business, economic, competitive and other uncertainties and contingencies regarding future events, including the COVID-19 pandemic and as such, are subject to change. The Company can give no assurance that such estimates, beliefs and assumptions will prove to be correct.

Numerous risks and uncertainties could cause the Company’s actual results to differ materially from those expressed, implied or projected in the forward-looking statements, including those described in “Enterprise Risks and Risk Management” section, of the MD&A in the Company’s 2020 Annual Report and the Company’s Annual Information Form for the year ended December 31, 2020.

Readers are cautioned not to place undue reliance on these forward-looking statements, which reflect the Company’s expectations only as of the date of this News Release. Except as required by law, the Company does not undertake to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.

SEGMENT INFORMATION

The Company has two reportable operating segments: Loblaw and Choice Properties. Other and Intersegment includes eliminations, intersegment adjustments related to the consolidation, cash and short-term investments held by the Company and all other company level activities that are not allocated to the reportable operating segments, as further illustrated below.

The accounting policies of the reportable operating segments are the same as those described in the Company’s 2020 audited annual consolidated financial statements. The Company measures each reportable operating segment’s performance based on adjusted EBITDA(1) and adjusted operating income(1). No reportable operating segment is reliant on any single external customer.

16 Weeks Ended

Oct. 9, 2021

Oct. 3, 2020(3,4)

($ millions)

Loblaw

Choice

Properties

Other and

Intersegment

Total

Loblaw

Choice

Properties

Other and

Intersegment

Total

Revenue

$

16,050

$

316

$

(174)

$

16,192

$

15,671

$

309

$

(174)

$

15,806

Operating income

$

861

$

276

$

(12)

$

1,125

$

716

$

242

$

6

$

964

Net interest expense (income) and other
   financing charges

203

113

96

412

228

145

(50)

323

Earnings before income taxes

$

658

$

163

$

(108)

$

713

$

488

$

97

$

56

$

641

Operating income

$

861

$

276

$

(12)

$

1,125

$

716

$

242

$

6

$

964

Depreciation and amortization

817

1

(114)

704

795

1

(114)

682

Adjusting items(i)

(6)

(51)

8

(49)

5

(18)

11

(2)

Adjusted EBITDA(i)

$

1,672

$

226

$

(118)

$

1,780

$

1,516

$

225

$

(97)

$

1,644

Depreciation and amortization(ii)

662

1

(114)

549

640

1

(114)

527

Adjusted operating income(i)

$

1,010

$

225

$

(4)

$

1,231

$

876

$

224

$

17

$

1,117

(i)

Certain items are excluded from operating income to derive adjusted EBITDA(1). Adjusted EBITDA(1) is used internally by management when analyzing segment underlying operating performance.

(ii)

Excludes $155 million (2020 – $155 million) of amortization of intangible assets acquired with Shoppers Drug Mart, recorded by Loblaw.

 

40 Weeks Ended

Oct. 9, 2021

Oct. 3, 2020(3,4)

($ millions)

Loblaw

Choice

Properties

Other and

Intersegment

Total

Loblaw

Choice

Properties

Other and

Intersegment

Total

Revenue

$

40,413

$

967

$

(534)

$

40,846

$

39,428

$

949

$

(537)

$

39,840

Operating income

$

2,226

$

1,064

$

(272)

$

3,018

$

1,657

$

290

$

59

$

2,006

Net interest expense (income) and other
   financing charges

524

878

58

1,460

576

(44)

53

585

Earnings before income taxes

$

1,702

$

186

$

(330)

$

1,558

$

1,081

$

334

$

6

$

1,421

Operating income

$

2,226

$

1,064

$

(272)

$

3,018

$

1,657

$

290

$

59

$

2,006

Depreciation and amortization

2,041

3

(274)

1,770

1,987

2

(267)

1,722

Adjusting items(i)

(10)

(393)

157

(246)

41

361

(170)

232

Adjusted EBITDA(i)

$

4,257

$

674

$

(389)

$

4,542

$

3,685

$

653

$

(378)

$

3,960

Depreciation and amortization(ii)

1,652

3

(274)

1,381

1,595

2

(267)

1,330

Adjusted operating income(i)

$

2,605

$

671

$

(115)

$

3,161

$

2,090

$

651

$

(111)

$

2,630

(i)

Certain items are excluded from operating income to derive adjusted EBITDA(1). Adjusted EBITDA(1) is used internally by management when analyzing segment underlying operating performance.

(ii)

Excludes $389 million (2020 – $392 million) of amortization of intangible assets acquired with Shoppers Drug Mart, recorded by Loblaw.

2021 THIRD QUARTER REPORT

The Company’s 2020 Annual Report and 2021 Third Quarter Report are available in the Investor Centre section of the Company’s website at www.weston.ca and have been filed on SEDAR and are available at www.sedar.com.

INVESTOR RELATIONS

Shareholders, security analysts and investment professionals should direct their requests to Roy MacDonald, Vice President, Investor Relations, at the Company’s Executive Office or by e-mail at [email protected].

Additional financial information has been filed electronically with various securities regulators in Canada through SEDAR. This News Release includes selected information on Loblaw, a public company with shares trading on the TSX. For information regarding Loblaw, readers should refer to the materials filed by Loblaw on SEDAR from time to time. These filings are also maintained on Loblaw’s corporate website at www.loblaw.ca.

This News Release also includes selected information on Choice Properties, a public real estate investment trust with units trading on the TSX. For information regarding Choice Properties, readers should refer to the materials filed by Choice Properties on SEDAR from time to time. These filings are also maintained on Choice Properties’ website at www.choicereit.ca.

THIRD QUARTER CONFERENCE CALL AND WEBCAST

George Weston Limited will host a conference call as well as an audio webcast on Tuesday, November 23, 2021 at 9:00 a.m. (ET). To access via tele-conference, please dial 416-764-8688 or 1-888-390-0546. The playback will be available two hours after the event at 416-764-8677 or 1-888-390-0541, passcode: 153670#. To access via audio webcast, please visit the Investor Centre section of www.weston.ca. Pre-registration will be available.

Ce rapport est disponible en français.

Endnotes

(1)

See the “Non-GAAP Financial Measures” section of the Company’s 2021 Third Quarter Results, which includes the reconciliation of such non-GAAP measures to the most directly comparable GAAP measures.

(2)

This News Release contains forward-looking information. See “Forward-Looking Statements” section of this News Release and the Company’s 2021 Third Quarter Report for a discussion of material factors that could cause actual results to differ materially from the forecasts and projections herein and of the material factors and assumptions that were used when making these statements. This News Release should be read in conjunction with GWL’s filings with securities regulators made from time to time, all of which can be found at www.weston.ca and www.sedar.com.

(3)

Certain figures have been restated due to the non-GAAP financial measures policy change. See the “Non-GAAP Financial Measures Policy Change Effective First Quarter of 2021” section of the Company’s 2021 Third Quarter Management Discussion & Analysis.

(4)

Comparative figures have been restated to conform with current year presentation.

(5)

GWL Corporate refers to the non-consolidated financial results and metrics of GWL. GWL Corporate is a subset of Other and Intersegment.

(6)

Compound Average Growth Rate (“CAGR”) is the measure of annualized growth over a period longer than one year. CAGR is the mean annual growth rate over a two year period, 2019 to 2021.

 

SOURCE George Weston Limited








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Nevada Sunrise Reports Geophysical Surveys Continue to Identify New Drill Targets at Kinsley Mountain Gold Project, Nevada

Nevada Sunrise Reports Geophysical Surveys Continue to Identify New Drill Targets at Kinsley Mountain Gold Project, Nevada
Canada NewsWire
VANCOUVER, BC, Nov. 23, 2021

TSXV: NEV
VANCOUVER, BC, Nov. 23, 2021 /CNW/ – Nevada Sunrise Gold Corp. (“Ne…

Nevada Sunrise Reports Geophysical Surveys Continue to Identify New Drill Targets at Kinsley Mountain Gold Project, Nevada

Canada NewsWire

TSXV: NEV

VANCOUVER, BC, Nov. 23, 2021 /CNW/ – Nevada Sunrise Gold Corp. (“Nevada Sunrise”, or the “Company“) (TSXV: NEV) is pleased to announce that its joint venture partner, New Placer Dome Gold Corp. (“New Placer Dome”) (TSXV: NGLD) has completed the first half of the 2021 induced polarization (IP)/resistivity geophysical surveys currently underway at the Kinsley Mountain Gold Project (“Kinsley Mountain”) in Nevada.Nevada Sunrise holds a 20.01% interest in the Kinsley Mountain joint venture, with New Placer Dome, as operator, holding a 79.99% interest.

The first phase of the 2021 IP/resistivity geophysical surveys infilled the area between the Western Flank Zone (“WFZ”) and Shale Saddle 2020 survey grids. There is a correlation between enhanced chargeability and drill-confirmed high-grade gold sulphide mineralization at the WFZ. At Shale Saddle, anomalous gold values were discovered on the periphery of a 500 by 250 metre untested chargeability anomaly.

Figure 1. Northeast-facing isometric view of the Kinsley Mountain Gold Project showing the 2020 and 2021 IP/resistivity survey chargeability inversions. (CNW Group/[nxtlink id=

Seven lines, totaling 30 line-kilometres, were completed during the first phase of surveying, extending the existing 2020 Shale Saddle grid north to connect and overlap with the south end of the WFZ grid (see Figure 1). Chargeability anomalies were detected on all lines, coincident with modelled Secret Canyon shale rocks, the main host of high-grade sulphide gold mineralization at the WFZ and Secret Spot. Drilling in 2020 by the Kinsley Mountain joint venture yielded high-grade gold sulphide intercepts from the Secret Canyon shale including: 10.2 g/t gold (Au) over 6.1 metres within a broader zone averaging 2.63 g/t Au over 38.1 metres in KMR20-017 at the WFZ; and 11.3 g/t Au over 2.9 metres within a broader zone grading 3.81 g/t Au over 11.6 metres in KMD20-006 at Secret Spot (see Nevada Sunrise news releases dated January 1, 2021 and April 28, 2021). Significantly, the two holes are separated by a 1.5 kilometer expanse of largely untested Secret Canyon stratigraphy.

The new chargeability anomalies occur within areas untested by previous drilling, with each line producing one or more potential drill targets. Several anomalies are spatially associated with major fault structures including the Kinsley NW Fault and the Transverse Fault, which correlate to WFZ and Secret Spot gold mineralization, respectively. Together with anomalies identified by the 2020 Shale Saddle survey, a broad north-south trending zone of elevated chargeability has been delineated over a strike length of 1.5 kilometres.

New Placer Dome reports that the next phase of surveying currently underway extends the 2020 WFZ grid to the east, covering the Upper Kinsley Ridge pits and Notch Peak breccias. Two lines, totaling 5 line-kilometres, are planned for the WFZ grid extension. An additional 45 line-kilometres are planned for the underexplored Kinsley North Range, covering a total area of 25 square kilometres of undrilled target host rocks.

Methodology and QA/QC

Seven IP/resistivity lines have been completed to date during 2021 infilling the area between the WFZ and Shale Saddle target. The lines are spaced 150 metres apart, with line lengths ranging from 3.6 to 4.0 kilometres. Data were collected using the Direct Current Resistivity, Induced Polarization (“DCIP”) method, on a 16-channel pole-dipole array with a dipole size (a-spacing) of 100 metres. A GDD GRx16 receiver and GDD 5000W-2400V-20A IP Tx model Tx4 transmitter was used. Raw data were loaded into GDD IP Post-Process software and Geosoft Oasis Montaj software for quality control and review. The reviewed data were used to produce pseudo section plots of apparent resistivity and apparent chargeability and were the input for the inversion. Inversions were completed using the UBC-GIF DCIP2D inversion codes. Each line of data was inverted independently. The resistivity and IP inversion is a two-step process. The resistivity inversion is run first, and this model is used in the chargeability inversion. Multiple inversions were completed for quality control.

Qualified Person

The scientific and technical information contained in this news release has been reviewed and approved by Robert M. Allender, Jr., CPG, RG, SME and a Qualified Person for Nevada Sunrise as defined in National Instrument 43-101 – Standards of Disclosure for Mineral Projects. Mr. Allender has examined the information provided by New Placer Dome, which includes the data disclosed underlying the information and opinions contained herein.

About Nevada Sunrise

Nevada Sunrise is a junior mineral exploration company with a strong technical team based in Vancouver, BC, Canada, that holds interests in gold, copper, cobalt and lithium exploration projects located in the State of Nevada, USA.

The Company’s key gold asset is a 20.01% interest in a joint venture with New Placer Dome Gold Corp. (TSXV: NGLD) at the Kinsley Mountain Gold Project near Wendover, NV. Kinsley Mountain is a Carlin-style gold project hosting a National Instrument 43-101 compliant gold resource consisting of 418,000 indicated ounces of gold grading 2.63 g/t Au (4.95 million tonnes), and 117,000 inferred ounces of gold averaging 1.51 g/t Au (2.44 million tonnes), at cut-off grades ranging from 0.2 to 2.0 g/t Au 1.

1Technical Report on the Kinsley Project, Elko County, Nevada, U.S.A., dated June 21, 2021 with an effective date of May 5, 2021 and prepared by Michael M. Gustin, Ph.D., and Gary L. Simmons, MMSA and filed under New Placer Dome Gold Corp.‘s Issuer Profile on SEDAR (www.sedar.com).

Nevada Sunrise has right to earn a 100% interest in the Coronado VMS Project, located approximately 48 kilometers (30 miles) southeast of Winnemucca, NV. The Company owns a 15% interest in the historic Lovelock Cobalt Mine and the Treasure Box copper properties, each located approximately 150 kilometers (100 miles) east of Reno, NV, with Global Energy Metals Corp. (TSXV: GEMC) holding an 85% participating interest. 

Nevada Sunrise owns 100% interests in the Jackson Wash and Gemini lithium projects, both of which are located in Esmeralda County, NV. The Company owns Nevada water right Permit 44411, located within the Clayton Valley basin near Silver Peak, NV, which is currently subject to a purchase and sale agreement with Cypress Development Corp., and water permit 86863, located in the Lida Valley basin, near Lida, NV.

FORWARD LOOKING STATEMENTS
This release may contain forwardlooking statements. Forward looking statements are statements that are not historical facts and are generally, but not always, identified by the words “expects”, “plans”, “anticipates”, “believes”, “intends”, “estimates”, “projects”, “potential” and similar expressions, or that events or conditions “will”, “would”, “may”, “could” or “should” occur and include disclosure of anticipated exploration activities. Although the Company believes the expectations expressed in such forwardlooking statements are based on reasonable assumptions, such statements are not guarantees of future performance and actual results may differ materially from those in forward looking statements. Forwardlooking statements are based on the beliefs, estimates and opinions of the Company’s management on the date such statements were made. The Company expressly disclaims any intention or obligation to update or revise any forwardlooking statements whether as a result of new information, future events or otherwise.

Such factors include, among others, risks related to the interpretation and actual results of historical production at Kinsley Mountain, reliance on technical information provided by third parties on any of our exploration properties, including access to historical information on the Kinsley Mountain property as well as specific historical data associated with drill results from the property, technical information received from New Placer Dome Gold Corp., current exploration and development activities; changes in project parameters as plans continue to be refined; current economic conditions; future prices of commodities; possible variations in grade or recovery rates; failure of equipment or processes to operate as anticipated; the failure of contracted parties to perform; failure of New Placer Dome Gold Corp. to complete anticipated work programs; labor disputes and other risks of the mining industry; delays due to pandemic; delays in obtaining governmental approvals, financing or in the completion of exploration, as well as those factors discussed in the section entitled “Risk Factors” in the Company’s Management Discussion and Analysis for the Nine Months ended June 30, 2021,  which is available under Company’s SEDAR profile at www.sedar.com.

Although Nevada Sunrise has attempted to identify important factors that could cause actual actions, events or results to differ materially from those described in forward-looking information, there may be other factors that cause actions, events or results not to be as anticipated, estimated or intended. There can be no assurance that such information will prove to be accurate as actual results and future events could differ materially from those anticipated in such statements. Nevada Sunrise disclaims any intention or obligation to update or revise any forward-looking information, whether as a result of new information, future events or otherwise. Accordingly, readers should not place undue reliance on forward-looking information.

Neither TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release. The securities of Nevada Sunrise Gold Corporation have not been registered under the United States Securities Act of 1933, as amended, and may not be offered or sold within the United States or to the account or benefit of any U.S. person.

SOURCE Nevada Sunrise Gold Corporation







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