First quarter report – March 31, 2023
Q1, JANUARY – MARCH 2023 (January – March 2022)
- Revenue TUSD 26,107 (25,654)
- EBITDA TUSD 1,163 (11,142)
- Loss for the period -3,130 (3,700)
- Earnings per share before dilution USD -0.0035 (0.0042)
SUMMARY OF FINANCIAL INFORMATION
| Q1 2023 | Q1 2022 | Δ % | Full year 2022 | |
| Gold production (gold equivalent), koz | 8.24 | 7.24 | 14% | 42.94 |
| Gold sales (gold equivalent), koz | 13.87 | 13.49 | 3% | 70.00 |
| Average realized gold price, USD/oz | 1,856 | 1,887 | -1% | 1,639 |
| Revenue, TUSD | 26,107 | 25,654 | 2% | 115,775 |
| Gross profit/loss, TUSD | 4,650 | 13,960 | -67% | -2,609 |
| EBITDA, TUSD | 1,163 | 11,142 | -90% | 11,235 |
| EBITDA margin, % | 4% | 43% | - | 10% |
| Loss/profit for the period, TUSD | -3,130 | 3,700 | -185% | -29,480 |
| Earnings per share before dilution, USD | -0.0035 | 0.0042 | -183% | -0.03 |
| Cash & cash equivalents at the end of the period, TUSD | 851 | 3,563 | -76% | 6,293 |
| Net debt, TUSD | 123,035 | 61,509 | 100% | 118,383 |
| Equity per share, USD | 0.0842 | 0.1091 | -23% | 0.093 |
Production growth following operational improvements
Kopy Goldfields AB reports another quarter with operational achievements in line with the company strategy aimed at increasing operational efficiency at the Yubileyniy site and developing the Malyutka project. Production costs remained elevated as ore inventories were reduced, hampering financial performance.
Production
The total consolidated production during Q1 2023 amounted to 8.24 koz, a 14% increase compared to Q1 2022 which was mainly driven by the Yubileyniy CIP plant capacity upgrade and finetuning during 2022. The Malyutka project is on track aiming for the launch in 2023. The total unconsolidated production from the Zolotaya Zvezda Mayskiy project amounted to 0.53 koz in the reporting period.
Financial performance
Gold sales increased by 3% compared to Q1 2022 resulted in revenues of MUSD 26. Our average gold price during the quarter amounted to 1,856 USD/oz which was approximately the same as in Q1 2022. EBITDA and the net result were negatively affected by increased costs of sales mainly as a result of high production cost and strengthen of the Russian Ruble. Production costs per ounce at Perevalnoe remained elevated in the quarter affecting cost of sales and thus EBITDA. Going forward production costs per ounce are expected to normalise.
Project development
We confirm our plan to commissioning the Malyutka project later in 2023. Maluytka is our major development project in 2023 as we are eager to reach our production target of 100 koz of gold in 2025. As scheduled, construction as well as engineering works are being implemented on the site.
Investments into the Yubileyniy project during the quarter were aimed at further equipment upgrade and underground mine capital development.
We also continue modernizing and extending Zolotaya Zvezda’s Mayskiy processing plant as we see a lot of exploration and production potential in the Khakassia region.
ESG
During the quarter we continued the realization of our ESG strategy and as a result Kopy Goldfield’s subsidiary, Amur Zoloto, received an ESG rating from one of the national rating agencies at BBB.esg level. The Company is now eligible for green financing and will consider various options to raise funds for our ESG projects. In addition, in Q1 2023 to support the local communities in the area of the Company’s operation we signed agreements for socio-economic development with the Khabarovsk region and with Ayano-Maisky district.
Macro environment
The mining industry in Russia is facing various challenges affecting the operations and financial performance. In order to maintain Kopy Goldfields’ strategic flexibility we are constantly evaluating our risk profile and monitoring the development of legislation and markets in order to secure that business operations are compliant with relevant legislation and that relevant actions are taken to efficiently and timely mitigate the effects of the financial volatility and adjust operations accordingly. Nevertheless, Russian macroeconomic indicators remained stable during the quarter, supply and sales channels were secured. The gold market in Russia was volatile in Q1 2023 but in general the local prices denominated in the Russian Ruble strengthened.
Outlook
In 2023 we continue focusing on our operational efficiency at Yubileyniy and plan to kick-off the gold production from the Malyutka project as planned. Mid-term we are looking forward to developing our project in the Khakassia region as it has substantial production potential. We remain committed to our long-term strategy and targets.
Mikhail Damrin
CEO Kopy Goldfields