Royal Nickel Corp. RNKLF

RNC Q4 2018 Results presentation, my transcript

[pierreg]

RNC Q4 2018 Results presentation Conference March 28th 2019, that I transcribed, and more. To complement this, my Higginsville Purchase Option Agreement Conference March 26th 2019 transcript https://ceo.ca/@pierreg01599501?3f411f9039c3 .
Mark Selby:
«Please turn to slide 3, 2018 was obviously a very exciting year for the company. We had record annual gold production, with production of nearly 74,000 oz, almost double our production in 2017. Most importantly our operating earnings improved dramatically with 27 M$ USD of EBITDA during the year of which 16 M$ USD was generated during the 4th quarter as we sold a higher proportion of our high-grade coarse gold oz. That improved the amount of high-grade coarse gold oz flowed through our production year costs, where our AISC for the quarter were just under $700 USD oz at $698 USD oz and our cash operating costs for the quarter were $459 USD oz. This in turn flowed through to overall costs for the year with an AISC of $1049 USD oz and a cash operating cost of just over $900 USD oz at $938 USD oz. All figures significantly improved versus the prior year. During the quarter we launched our 40,000 exploration program to unlock the Beta Hunt exploration potential which we’ve always believed in. We’ve been very happy with the results to date with both multiple high grade gold intersections and the gold mineralization intersections particularly in our Western Flanks shear. With the improved operating performance and cash performance our balance sheet improved dramatically with 33 M$ USD with years of long-term debt and convertible debt eliminated during 2018. We entered the year with 5 M$ USD in cash and cash equivalents of the specimens held for sale. 

Turning to slide 4, a little more detail in terms of the performance for the year. Our sales in the 4th quarter were just under 20,000 oz at 19,500 oz. At quarter end we had 11,700 oz of inventory, just under 7,000 oz of that was on our ROM and just under 5,000 oz of specimen stone was held for sale during the quarter. The key piece of that is that both those figures are per accounting growth are held on our books at the lower of cost or market and the cost of the specimen stones is dramatically lower than our average grade material […] During the first quarter we launched a limited production restart as we had reached a sufficiently advanced point in our drilling program and we expect that production to ramp up during the 2nd quarter .

Turning to slide 5, the charts here show how the impact of the higher grade material that came from the Fathers Day vein flowed through our production. Our average grades, where we had in excess of 6 grams per tonne in the 3rd quarter and 7 grams per ton in the 4th quarter, which again translated into significantly improved AISC performance which shows what the cash flow potential of this asset could be going forward.

Turning now to our Dumont asset, the key piece of work that occurred during the 4th quarter was the update of our feasibility study. It is continuing to make good progress and we are on track for our previously announced deadline this year. Again, Dumont is one of the only large scale permitted shovel ready nickel cobalt projects and it is truly ideally positioned to deliver both the nickel cobalt required to meet the massive demand growth not only from the stainless steel market but from the very exciting electric vehicle market which is coming during the coming decade.    

In conclusion, we ended the year very well positioned to unlock the value of what we believe are two great assets. The drilling program underway at Beta Hunt is beginning to unlock the exploration potential. Our recently announced milling transaction provides a much lower cost milling option for Beta Hunt which will underpin its operation going forward if we move forward on that option. As I said on Dumont it is ideally well positioned for the growth in the EV the stainless steel market over the coming decade. »
Q4 2018 Results Conference Call document: https://cdn.ceo.ca/1e9pk4u-Q4%202018%20Results%20Conference%20Call%20document.pdf
Q4 Net earnings (loss) attributable to RNC shareholders $12,794,000 USD as per March 28th MD&A, page 9:   https://cdn.ceo.ca/1ea1kei-MANAGEMENT%E2%80%99S%20DISCUSSION%20AND%20ANALYSIS%20.pdf