ALLIED GOLD ANNOUNCES PRELIMINARY 2023 OPERATING RESULTS, 2024 GUIDANCE AND MEDIUM-TERM OUTLOOK, HIGHLIGHTING UPSIDE TO ITS SUSTAINABLE PRODUCTION BASE WITH IMPROVED COSTS AND GROWING MINERAL INVENTORY
Production for the fourth quarter totaled 94,755 ounces of gold, with full year 2023 production reaching 343,817 ounces, slightly below the previously disclosed 2023 production range of approximately 350,000 ounces. The All-in Sustaining Costs ("AISC")(1) for the year are estimated at less than
The Company's producing mines are expected to sustainably produce at least 375,000 ounces per year, as evidenced by the run rate delivered in the fourth quarter. Building on this foundation, Allied has executed several strategic project advancements and exploration efforts throughout 2023, laying the groundwork for future growth and enhanced cash flow.
The advancement of the Kurmuk project into the execution phase, with its confirmed design for a 6Mt/y capacity operation, represents a significant milestone. This phase involves the establishment of Allied's project management framework, the appointment of an EPCM contractor, the initiation of detailed engineering and early works, and the procurement of critical project services and infrastructure along with strengthening relationships and engaging with local stakeholders. Additionally, the Company has established a phased expansion plan at Sadiola, designed to significantly reduce capital expenditures in the short term, while boosting production at lower costs.
On the exploration front, Allied expanded its Mineral Reserves and Resources, replacing depletion by 190% in 2023. The Company remains focused on extending the mine lives at Agbaou, Bonikro, and Kurmuk, and on increasing the oxide mineral inventory at Sadiola, facilitating a smoother transition for the phased expansion and providing additional processing flexibility. Moreover, Allied advanced its regional exploration programs aimed at uncovering significant potential across its portfolio, realizing exploration success at highly prospective locations such as Oume, located north of Bonikro mill, and Tsenge, located south to the project mill at Kurmuk.
Optimizations in mine contractor management and enhancements in processing plant controls, including increased security and metallurgical oversight at the gravity circuit, are key components of Allied's strategy to solidify a sustainable production base. These measures underscore the Company's commitment to continuous improvement, setting the stage for ongoing success and growth.
In 2024, Allied anticipates producing 375,000 to 405,000 ounces of gold. Achieving the higher end of this guided range primarily hinges on the successful completion of mine contractor transition at Agbaou, where efforts to enhance efficiencies and maximize long-term value are underway, notwithstanding the short-term impacts on production.
(000's ounces) |
2023 Actual |
2024 Guidance |
Sadiola |
171,007 |
195,000 – 205,000 |
Bonikro |
99,409 |
95,000 – 105,000 |
Agbaou |
73,401 |
85,000 – 95,000 |
Total Gold Production |
343,817 |
375,000 – 405,000 |
Regarding costs, the projected mine-site level AISC(1) for 2024 is expected to be
(US$/oz Sold) |
|
2024 Cash Costs(1) |
2024 Mine-Site AISC(1) |
Sadiola |
|
1,075 |
1,150 |
Bonikro |
|
1,275 |
1,650 |
Agbaou |
|
1,595 |
1,675 |
Total |
|
1,250 |
1,400 |
Anticipated cost savings in 2024, amounting to nearly
Corporate items are expected to add approximately
The following table presents expansionary capital, sustaining capital and exploration spend expectations by mine and company-level for 2024:
(US$ millions) |
|
Sustaining Capital |
Total Exploration |
Sadiola |
35.0 |
12.5 |
8.0 |
Bonikro |
1.0 |
5.5 |
10.5 |
Agbaou |
0.5 |
7.5 |
6.0 |
Kurmuk |
155.0 |
- |
7.5 |
Corporate |
7.0 |
4.0 |
- |
Total |
198.5 |
29.5 |
32.0 |
Approximately 70% of the Company's expected exploration spend is capital in nature.
The following table presents other expenditure expectations for 2024:
(US$ millions) |
2024 Guidance |
Total DD&A |
55 |
Cash based G&A |
38 |
Cash income taxes paid (assumes |
60 |
Allied's key focus for 2024 is the sustainable reduction of costs across its asset portfolio. Alongside this, the Company is dedicated to delivering near-term oxide ores at Sadiola and advancing construction activities at Kurmuk, while also continuing its exploration success to extend mine life, particularly in Côte d'Ivoire. Based on ongoing efforts to optimize assets, Allied will release a three-year production and cost forecast in due course.
While not currently reflected in Allied's official one-year guidance, the operating trends clearly support the Company's vision of achieving significant growth at substantially lower costs and underpin the outlook for 2025 and 2026.
At Sadiola, gold production is anticipated to increase sequentially each year during the outlook period, with a goal of achieving 230,000 ounces per year. The improvement is expected to be driven by the inclusion of additional oxide ore from Diba and targets such as Sekekoto West, FE4, and S12, alongside the Phase 1 expansion. These developments are anticipated to offer further opportunities for production increases. For 2025, the AISC(1) is expected to remain within the range of
In the near term, Bonikro is expected to achieve modest yearly increases in gold production during the outlook period, with a goal of exceeding 110,000 ounces annually. This projection does not account for the potential additional benefits from Oume. This improvement is due to the stripping phase planned for 2024 that will expose higher-grade materials in 2025 and 2026, significantly reducing the mine-site AISC(1) to below
For Agbaou, gold production is expected to remain consistent each year throughout the outlook period, not falling below 90,000 ounces annually. The improvements are attributed to the identification of additional Mineral Reserves in Agbalé, as well as mining and plant optimizations. These enhancements enable the mill to handle relatively harder rock blends more effectively, while also offering the opportunity to increase oxide feed from Agbalé and other targets.
Kurmuk is expected to start production by mid-2026, contributing more than 175,000 ounces of gold to the latter half of the 2026 forecast. Significant exploration potential at near-mine locations around
Overall, these developments across Allied's portfolio, from enhanced production and cost efficiencies at Sadiola and Bonikro to the promising exploration and operational optimizations at Agbaou and Kurmuk, collectively reinforce a positive outlook, positioning the Company to deliver >600,000 ounces of gold at an AISC(1) below
Allied's near-term guidance and longer-term outlook is supported by growing Mineral Reserves and Mineral Resources which underpin the longevity of the Company's sustainable production platform and the optionality to increase near term production and cash flows from near mine high-yield targets. As at
-
Optimizing oxide mineral inventory at Sadiola: Allied is focused on optimizing the oxide mineral inventory at Sadiola, aiming to enhance the mine's value by leveraging ongoing exploration successes. This strategy is designed to optimize near-term cash flow and refine the capital expenditure profile. The start of production from Diba, anticipated in the first half of 2024, will introduce near-surface high-grade oxide ore into the processing mix, complementing the increased rates of fresh ore feed. As of
December 31, 2023 , Allied has identified Proven and Probable Mineral Reserves at Diba, totaling 280,000 ounces of gold contained within 6.1 million tonnes at a grade of 1.43 g/t. Additionally, the total Measured and Indicated Resource at Diba, inclusive of Mineral Reserves, is now estimated at 377,000 ounces of gold contained within 8.8 million tonnes at a grade of 1.33 g/t. To further grow near-term oxide inventories and maximize near-term free cash flow and operational flexibility, Allied has approved an$8 million 2024 exploration budget at Sadiola, in part, to support a 12,000-meter drilling program aimed at extending these Mineral Resources. Significant work programs are also being pursued at Sekekoto West, FE4 and S12 where results to date show the potential to add additional near-term high-grade oxide ore to the mine plans. Sadiola maintains a world-class mineral inventory with nearly 7.4 million ounces of gold in Mineral Reserves, contained in 156 million tonnes at a grade of 1.48 g/t. With the addition of Diba helping to drive a 187% replacement of depletion during 2023, and additional near mine high-grade oxide targets, the Company has increased flexibility for the execution of the phased expansion, in particular allowing for an optimized allocation of capital and execution of phase 1, which is now expected to be in production in early 2026. -
Extending mine life at Agbaou: The Company is focused on extending the life of its mines in Côte d'Ivoire through strategic exploration and resource management, with new life-of-mine planning at Agbaou supporting total gold production of over 465,000 ounces through 2028 at a mine-site AISC(1) below
$1,450 per ounce versus the most recent life-of-mine estimate which saw mining cease in mid-2026. The proposed pit stages for the improved life-of-mine are shown in Figure 1. This outlook is supported by updated Proven and Probable Mineral Reserves of approximately 0.5 million ounces of gold contained within 7.9 million tonnes at a grade of 1.84 g/t. This represents a 25% increase compared to the previous year and equates to a 229% replenishment of the year's depletion. Notably, Measured and Indicated Resources, inclusive of Mineral Reserves, also increased during the year to nearly 0.9 million ounces of gold contained in 13.3 million tonnes at a grade of 1.99 g/t, up from 0.6 million ounces. The Company is actively optimizing operations, focusing on cost reduction while extending mine life and pursuing growth through the newly defined Agbalé deposit. This deposit is planned for processing at Agbaou, as detailed in the following section. The company has allocated$6 million to further advance exploration initiatives at Agbaou in 2024.
-
Exploration upside at Bonikro: At Bonikro, ongoing drilling successes at Agbalé and Oume (formerly known as Dougbafla) have led to a 28% increase in Measured and Indicated Mineral Resources, now totaling 1.4 million ounces of gold in 32.8 million tonnes at a grade of 1.32 g/t. Despite a decrease in Mineral Reserves by 74,000 ounces to 0.6 million ounces contained in 13.7 million tonnes at a grade of 1.30 g/t, the Company managed to partially offset depletion given 2023 production of 99,409 ounces. This reflects the exploration strategy to increase total Mineral Resources at Oume first to better define the orebody before stepping up infill-drilling. Exploration drilling continues at Oume, including advanced resource drilling at Oume West and North. Additionally, Allied is conducting resource drilling at Akissi-So and scout drilling at Agbalé in the Hire area to expand the mineral inventory. As noted above, Agbalé ore is planned to be transported to Agbaou due to its metallurgy and short haulage distances. These efforts are part of a broader strategy to extend the strategic mine life in Côte d'Ivoire to over 10 years, aiming for annual production of 180-200,000 gold ounces at reduced costs. To support this aim,
$10.5 million is allocated for total exploration spending at Bonikro in 2024. -
Definition Drilling and Upside Potential at Kurmuk: Definition drilling at Kurmuk has resulted in a 5% increase in Proven and Probable Mineral Reserves to 2.7 million gold ounces contained in 60.5 million tonnes at a grade of 1.41 g/t. Similarly, total Measured and Indicated Mineral Resources increased to over 3.1 million ounces contained in 57.9 million tonnes at a grade of 1.68 g/t. These advancements, however, do not yet reflect the outcomes of in-pit Inferred Mineral Resource conversion drilling and ongoing regional exploration efforts, which has continued to meet with success and supports the broader strategy to extend the strategic mine life to at least 15 years. Drilling efforts, as part of the
$7.5 million 2024 exploration budget at Kurmuk, are concentrated on near-mine targets aroundDish Mountain and Ashashire, which are the initial open pits housing all current Mineral Reserves. Additionally, drilling activities continue with several diamond drill rigs at the Tsenge Prospect, defined by a 9km gold in soil and rock anomaly. Initial holes at Tsenge have returned economic widths and grades of gold in drill core, indicating significant upside potential which could potentially contribute to extend mine life and optimize short term production.
Allied is actively executing a select number of non-dilutive alternatives to enhance the company's financial flexibility as it progresses with its growth initiatives, which include streams on producing assets and a gold prepay facility. This strategic direction is prompted by the current capital markets not fully capturing the inherent value of the Company's assets, leading Allied to seek alternative sources of capital that offer low-cost options with the added benefit of more accurately reflecting true value to market participants. Among these initiatives, Allied is in advanced discussions to implement a stream for approximately
The Company will release its fourth quarter and year-end 2023 operational and financial results after the market closes on
Fourth Quarter 2023 Conference Call |
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Toll-free dial-in number ( |
1-800-898-3989 |
Local dial-in number: |
416-406-0743 |
Toll Free ( |
00-80042228835 |
Participant passcode: |
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Webcast: |
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Conference Call Replay |
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Local dial-in number: |
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The conference call replay will be available from 12:00 p.m. EDT on
Mineral Reserves at
Mineral Property |
Proven Mineral Reserves |
Probable Mineral Reserves |
Total Mineral Reserves |
||||||
Tonnes |
Grade |
Content |
Tonnes |
Grade |
Content |
Tonnes |
Grade |
Content |
|
|
18,612 |
0.82 |
492 |
137,174 |
1.57 |
6,907 |
155,786 |
1.48 |
7,399 |
|
21,864 |
1.51 |
1,063 |
38,670 |
1.35 |
1,678 |
60,534 |
1.41 |
2,742 |
|
4,771 |
0.71 |
108 |
8,900 |
1.62 |
462 |
13,671 |
1.30 |
571 |
|
1,815 |
2.01 |
117 |
6,092 |
1.79 |
351 |
7,907 |
1.84 |
469 |
Total Mineral Reserves |
47,061 |
1.18 |
1,782 |
190,836 |
1.53 |
9,399 |
237,897 |
1.46 |
11,180 |
Notes:
- Mineral Reserves are stated effective as at
December 31, 2023 and estimated in accordance with CIM Standards and NI 43-101. - Shown on a 100% basis.
- Reflects that portion of the Mineral Resource which can be economically extracted by open pit methods.
- Considers the modifying factors and other parameters, including but not limited to the mining, metallurgical, social, environmental, statutory and financial aspects of the project.
- Includes an allowance for mining dilution at 8% and ore loss at 3%
- A base gold price of
US$1,500 /oz was used for the pit optimization, with the selected pit shells using values ofUS$1,320 /oz (revenue factor 0.88) for Sadiola Main andUS$1,500 /oz (revenue factor 1.00) for FE3, FE4, Diba, Tambali and Sekekoto. - The cut-off grades used for Mineral Reserves reporting were informed by a
US$1,500 /oz gold price and vary from 0.31 g/t to 0.73 g/t for different ore types due to differences in recoveries, costs for ore processing and ore haulage.
- Includes an allowance for mining dilution at 18% and ore loss at 2%
- A base gold price of
US$1,500 /oz was used for the pit optimization, with the selected pit shells using values ofUS$1,320 /oz (revenue factor 0.88) for Ashashire andUS$1,440 /oz (revenue factor 0.96) forDish Mountain . - The cut-off grades used for Mineral Reserves reporting were informed by a
US$1,500 /oz gold price and vary from 0.30 g/t to 0.45 g/t for different ore types due to differences in recoveries, costs for ore processing and ore haulage.
- Includes an allowance for mining dilution at 8% and ore loss at 5%
- A base gold price of
$1,500 /oz was used for the Mineral Reserves for the Bonikro pit:- With the selected pit shell using a value of
$1,388 /oz (revenue factor 0.925). - Cut-off grades vary from 0.68 to 0.74 g/t Au for different ore types due to differences in recoveries, costs for ore processing and ore haulage.
- With the selected pit shell using a value of
- A base gold price of
$1,800 /oz was used for the Mineral Reserves for the Agbalé pit:- With the selected pit shell using a value of
US$1,800 /oz (revenue factor 1.00). - Cut-off grades vary from 0.58 to 1.00 g/t Au for different ore types to the Agbaou processing plant due to differences in recoveries, costs for ore processing and ore haulage
- With the selected pit shell using a value of
- Includes an allowance for mining dilution at 26% and ore loss at 1%
- A base gold price of
$1,500 /oz was used for the Mineral Reserves for the:- Pit designs (revenue factor 1.00) apart from North Gate (Stage 41) and South Sat (Stage 215) pit designs which used a higher short term gold price of
$1,800 /oz and account for 49 koz or 10% of the Mineral Reserves. - Cut-off grades which range from 0.49 to 0.74 g/t for different ore types due to differences in recoveries, costs for ore processing and ore haulage.
- Pit designs (revenue factor 1.00) apart from North Gate (Stage 41) and South Sat (Stage 215) pit designs which used a higher short term gold price of
Mineral Resources at
Mineral Property |
Measured Mineral |
Indicated Mineral |
Total Measured and |
||||||
Tonnes |
Grade |
Content (koz) |
Tonnes |
Grade |
Content (koz) |
Tonnes |
Grade (g/t) |
Content (koz) |
|
|
20,079 |
0.86 |
557 |
205,952 |
1.53 |
10,101 |
226,031 |
1.47 |
10,659 |
|
20,472 |
1.74 |
1,148 |
37,439 |
1.64 |
1,972 |
57,912 |
1.68 |
3,120 |
|
7,033 |
0.98 |
222 |
25,793 |
1.41 |
1,171 |
32,826 |
1.32 |
1,393 |
|
2,219 |
2.15 |
154 |
11,130 |
1.96 |
701 |
13,349 |
1.99 |
855 |
Total Mineral Resources |
49,804 |
1.30 |
2,081 |
280,315 |
1.55 |
13,945 |
330,118 |
1.51 |
16,027 |
Inferred Mineral Resources at
Mineral Property |
Inferred Mineral Resources |
||
Tonnes |
Grade |
Content |
|
|
16,177 |
1.12 |
581 |
|
5,980 |
1.62 |
311 |
|
19,588 |
1.30 |
816 |
|
959 |
1.84 |
57 |
Total Mineral Resources |
42,704 |
1.29 |
1,765 |
Notes:
- Mineral Resources are estimated in accordance with CIM Standards and NI 43-101.
- Shown on a 100% basis.
- Are inclusive of Mineral Reserves. Mineral Resources that are not Mineral Reserves do not have demonstrated economic viability.
- Are listed at 0.5 g/t Au cut-off grade, constrained within an
US$1,800 /oz pit shell and depleted to31 December 2023 . - Rounding of numbers may lead to discrepancies when summing columns.
Except as otherwise disclosed, all scientific and technical information contained in this press release has been reviewed and approved by
Allied Gold is a Canadian-based gold producer with a significant growth profile and mineral endowment which operates a portfolio of three producing assets and development projects located in Côte d'Ivoire,
END NOTES |
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(1) |
This is a non-GAAP financial performance measure. Refer to the Non-GAAP Financial Performance Measures section at the end of this news release. |
This press release contains "forward-looking information" including "future oriented financial information" under applicable Canadian securities legislation. Except for statements of historical fact relating to the Company, information contained herein constitutes forward-looking information, including, but not limited to, any information as to the Company's strategy, objectives, plans or future financial or operating performance. Forward-looking statements are characterized by words such as "plan", "expect", "budget", "target", "project", "intend", "believe", "anticipate", "estimate" and other similar words or negative versions thereof, or statements that certain events or conditions "may", "will", "should", "would" or "could" occur. In particular, forward-looking information included in this press release includes, without limitation, statements with respect to:
- the Company's expectations in connection with the production and exploration, development and expansion plans at the Company's projects discussed herein being met;
- the Company's plans to continue building on its base of significant gold production, development-stage properties, exploration properties and land positions in
Mali , Côte d'Ivoire andEthiopia through optimization initiatives at existing operating mines, development of new mines, the advancement of its exploration properties and, at times, by targeting other consolidation opportunities with a primary focus inAfrica ; - the Company's expectations relating to the performance of its mineral properties;
- the estimation of Mineral Reserves and Mineral Resources;
- the timing and amount of estimated future production;
- the estimation of the life of mine of the Company's projects;
- the timing and amount of estimated future capital and operating costs;
- the costs and timing of exploration and development activities;
- the Company's expectations regarding the timing of feasibility or pre-feasibility studies, conceptual studies or environmental impact assessments;
- the effect of government regulations (or changes thereto) with respect to restrictions on production, export controls, income taxes, expropriation of property, repatriation of profits, environmental legislation, land use, water use, land claims of local people, mine safety and receipt of necessary permits;
- the Company's community relations in the locations where it operates and the further development of the Company's social responsibility programs;
- the Company's expectations regarding the payment of any future dividends; and
- the Company's aspirations to become a mid-tier next generation gold producer in
Africa and ultimately a leading senior global gold producer.
Forward-looking information is based on the opinions, assumptions and estimates of management considered reasonable at the date the statements are made, and is inherently subject to a variety of risks and uncertainties and other known and unknown factors that could cause actual events or results to differ materially from those projected in the forward-looking information. These factors include the Company's dependence on products produced from its key mining assets; fluctuating price of gold; risks relating to the exploration, development and operation of mineral properties, including but not limited to adverse environmental and climatic conditions, unusual and unexpected geologic conditions and equipment failures; risks relating to operating in emerging markets, particularly
Although the Company 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 could cause actions, events or results to not be as anticipated, estimated or intended. There can be no assurance that forward-looking information will prove to be accurate, as actual results and future events could differ materially from those anticipated in such statements. The Company undertakes no obligation to update forward-looking information if circumstances or management's estimates, assumptions or opinions should change, except as required by applicable law. The reader is cautioned not to place undue reliance on forward-looking information. The forward-looking information contained herein is presented for the purpose of assisting investors in understanding the Company's expected financial and operational performance and results as at and for the periods ended on the dates presented in the Company's plans and objectives and may not be appropriate for other purposes.
Mineral Resources are stated effective as at
Mineral Reserves are stated effective as at
- are inclusive of the Mineral Resources which were converted in line with the material classifications based on the level of confidence within the Mineral Resource estimate;
- reflect that portion of the Mineral Resources which can be economically extracted by open pit methods;
- consider the modifying factors and other parameters, including but not limited to the mining, metallurgical, social, environmental, statutory and financial aspects of the project;
- include an allowance for mining dilution and ore loss; and
- were reported using cut-off grades that vary by ore type due to variations in recoveries and operating costs. The majority (99.3% of contained gold) of the cut-off grades and pit shells were based on a
$1,500 /oz gold price with three short term pits (Agbale, North Gate and South Sat 3 cutback) were based on a$1,800 /oz gold price.
Mineral Reserve and Mineral Resource estimates are shown on a 100% basis. Designated government entities and national minority shareholders hold the following interests in each of the mines: 20% of Sadiola, 10% of Bonikro and 15% of Agbaou. Only a portion of the government interests are carried. The Government of
The Mineral Resource and Mineral Reserve estimates for each of the Company's mineral properties have been approved by the qualified persons, within the meaning of NI 43-101, as set forth below:
- Mineral Resources:
John Cooke ofAllied Gold Corporation - Mineral Reserves:
Steve Craig ofOrelogy Consulting Pty Ltd.
Except as otherwise disclosed, all scientific and technical information contained in this press release has been reviewed and approved by
Readers should also refer to the technical reports in respect of the
This press release uses the terms "Measured", "Indicated" and "Inferred" Mineral Resources as defined in accordance with NI 43-101.
The Company has included certain non-GAAP financial performance measures to supplement its Consolidated Financial Statements, which are presented in accordance with IFRS, including the following:
- Cash costs per gold ounce sold;
- AISC per gold ounce sold; and
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-GAAP financial performance measures do not have any standardized meaning prescribed under IFRS, and therefore may not be comparable to similar measures employed by other companies. Non-GAAP financial performance measures are 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 and are not necessarily indicative of operating costs, operating earnings or cash flows presented under IFRS.
Management's determination of the components of non-GAAP financial performance measures and other financial measures are evaluated on a periodic basis, influenced by new items and transactions, a review of investor uses and new regulations as applicable. Any changes to the measures are duly noted and retrospectively applied, as applicable. Subtotals and per unit measures may not calculate based on amounts presented in the following tables due to rounding.
The measures of cash costs and AISC, along with revenue from sales, are considered to be key indicators of a company's ability to generate operating earnings and cash flows from its mining operations.
Cash costs include mine site operating costs such as mining, processing, administration, production taxes and royalties which are not based on sales or taxable income calculations. Cash costs exclude DA, exploration costs, accretion and amortization of reclamation and remediation, and capital, development and exploration spend. Cash costs include only items directly related to each mine site, and do not include any cost associated with the general corporate overhead structure.
The Company discloses cash costs because it understands that certain investors use this information to determine the Company's ability to generate earnings and cash flows for use in investing and other activities. The Company believes that conventional measures of performance prepared in accordance with IFRS do not fully illustrate the ability of its operating mines to generate cash flows. The most directly comparable IFRS measure is cost of sales, excluding DA. As aforementioned, this non-GAAP measure does not have any standardized meaning prescribed under IFRS, and therefore may not be comparable to similar measures employed by other companies, should not be considered in isolation or as a substitute for measures of performance prepared in accordance with IFRS, and is not necessarily indicative of operating costs, operating earnings or cash flows presented under IFRS.
Cash costs are computed on a weighted average basis, with the aforementioned costs, net of by-product revenue credits from sales of silver, being the numerator in the calculation, divided by gold ounces sold.
AISC figures are calculated generally in accordance with a standard developed by the
AISC include cash costs (as defined above), mine sustaining capital expenditures (including stripping), sustaining mine-site exploration and evaluation expensed and capitalized, and accretion and amortization of reclamation and remediation. AISC exclude capital expenditures attributable to projects or mine expansions, exploration and evaluation costs attributable to growth projects, DA, income tax payments, borrowing costs and dividend payments. AISC include only items directly related to each mine site, and do not include any cost associated with the general corporate overhead structure. As a result, Total AISC represent the weighted average of the three operating mines, and not a consolidated total for the Company. Consequently, this measure is not representative of all of the Company's cash expenditures.
Sustaining capital expenditures are expenditures that do not increase annual gold ounce production at a mine site and exclude all expenditures at the Company's development projects as well as certain expenditures at the Company's operating sites that are deemed expansionary in nature, such as the Sadiola Phased Expansion, the construction and development of Kurmuk and the PB5 pushback at Bonikro. Exploration capital expenditures represent exploration spend that has met criteria for capitalization under IFRS.
The Company discloses AISC as it believes that the measure provides useful information and assists investors in understanding total sustaining expenditures of producing and selling gold from current operations, and evaluating the Company's operating performance and its ability to generate cash flow. The most directly comparable IFRS measure is cost of sales, excluding DA. As aforementioned, this non-GAAP measure does not have any standardized meaning prescribed under IFRS, and therefore may not be comparable to similar measures employed by other companies, should not be considered in isolation as a substitute for measures of performance prepared in accordance with IFRS, and is not necessarily indicative of operating costs, operating earnings or cash flows presented under IFRS.
AISC are computed on a weighted average basis, with the aforementioned costs, net of by-product revenue credits from sales of silver, being the numerator in the calculation, divided by gold ounces sold.
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