Here is, as agreed, the summary of the Robex annual meeting held on June 30, 2021. The purpose of this summary is to inform you as faithfully as possible of the comments made by the various stakeholders.
Mr. Faucher opened the meeting by stating the results of the shareholders' vote. All obtained results of over 98% except Julien Cohen with 97% and M. Doyon and Marti who obtained results of 92%. The total percentage of vote is 99%.
Ms. Vronique Maltais presented the annual financial statements.
Mr. Faucher announces that both the management team and the board of directors have been renewed.
Mr. Faucher announces the renewal of the auditor Price Waterhouse Cooper.
Mr. Augustin Rousselet speaks for the social and environmental aspect. He mentions the success of the measures put in place against Covid-19, the stability of gold production, the renewal of mineral resources and debt reduction. Among the highlights, he noted the renewal of mineral resources which will ensure the sustainability of the Nampala mine; the exceptional nature of the dividend payment for a company of Robex's stature and the migration of information systems to the cloud.
Mr. Augustin Rousselet states the challenges for the next year. It expresses the reasoning which justifies the stripping of the 4 new pits and the flexibility that we will be able to derive from it at the operating level. The challenge is to maintain excellent financial performance, which is defined by low cost. It is this large-scale stripping that explains the additional financial charges at the end of 2020 and the beginning of 2021. This investment makes it possible to secure the way in which Robex can exploit this deposit. The higher level of complexity of the management of these 4 pits will be compensated by the various investments made recently on the plant, which will make it possible to maintain a high level of efficiency. These investments are the new discharge line already operational, the new cone crusher already operational and the new cyclone pumps scheduled for August. The goal is always to increase the processing capacity of the mine. The latest investments thus make it possible to increase the tonnage processed by 10%, which will compensate for the lower grades encountered on the top of the new pits.
Mr. Augustin Rousselet mentions the good visibility of Robex in the eyes of the Malian authorities and the numerous Malian suppliers.
Mr. Augustin Rousselet mentions that the next objective for the Nampala mine is to substantially increase its processing capacity. New gold targets will first have to be identified to ensure continued supply to the mine. As soon as there is sufficient confidence in these gold targets, we can increase the plant's capacity by 50%, from 6,000 tonnes / day to 9,000 tonnes / day. All the preliminary work for this capacity increase is done.
Mr. Augustin Rousselet mentions that the short-term efforts consist in restoring the cash flow following the investments made for the drilling and stripping of the new pits. In view of the political instability in Mali, Robex wishes to protect its treasury as a precaution.
Mr. Augustin Rousselet mentions, from a social and environmental point of view, that we have only 9 expatriate resources, 350 employees and 800 people in total. We now have 6,500,000 working hours without a workplace accident. As a result, Robex is the first gold company in West Africa to achieve ISO 47001 accreditation related to employee safety.
Mr. Augustin Rousselet mentions that they are working in close collaboration with the General Directorate of Mines of Mali to carry out audits with the aim of being in full environmental compliance. Legal efforts have also been made to always be in compliance with the Malian authorities. The political situation in Mali makes communications with the state more difficult at present. Therefore, Robex is awaiting a tax refund of $ 8,000,000. Robex is not worried about this repayment but still has to manage the cash flow based on this account receivable. Considering the fact that the Malian state is making a lot of efforts to obtain more income, Robex has all the knowledge necessary to properly defend our rights.
Mr. Augustin Rousselet mentions that the disorganization of the Malian authorities has the effect of deteriorating security throughout the country. Close to the mine, Robex must ensure the protection of its employees and its assets. The presence of several illegal gold miners justified the strengthening of the fences, the addition of surveillance cameras and the integration of new agents into the security team. 50 agents are on site permanently. Mr. George Cohen adds that despite deteriorating security in the country, no major incidents have taken place at the Nampala mine. He adds that there is no need to worry since the security in place is oversized and aimed at ensuring a high level of security.
Mr. Benjamin Cohen takes the floor to talk about exploration. He mentions that only 56% of the 2020 budget has been invested and 450,000 ounces of gold have been added to reserves. Significant improvements have been added to the exploration department. These improvements mean that Robex now performs all sample analysis, interpretation of results and other tasks. Drilling is the only task carried out under contract. These improvements have very positive consequences, putting the exploration cost at $ 18 per ounce of gold and $ 48 per meter drilled.
Mr. Benjamin Cohen gives a retrospective of exploration permits. We now have 200 square kilometers of land to explore. Historically, geophysics has been partially performed on all of these permits. Considering that the mineral reserves are re-established on the Nampala permit, Robex can now consider a global approach for all of its permits. As a priority, a 400-meter mesh will be made around the Nampala mine in order to obtain the level of confidence necessary to increase the capacity of the mine. The budget to increase the capacity of the Nampala mine is $ 9,000,000. There is currently a full-time drill at the Nampala site.
Benjamin Cohen says the management team has decided to undertake exploration work on the Sanoula permit. Work in 3 phases is planned. Historically, geochemical work was carried out and boreholes in the years 2006-2007. These holes at the time encountered grades of more than 2 grams / tonne. For this year, a budget of $ 480,000 has been established and drilling is currently underway. We received the results for the first 7 holes yesterday and they are very encouraging. Mr. Georges Cohen insists on the term “encouraging”. The gold grades obtained on average are 5 to 6 grams / tonne. Another interesting fact about these boreholes, the depth was limited to 150 meters because of the water and the sulphide zone was not reached, so that the depth of the oxidized zone goes beyond 150 meters. Therefore, it is mentioned that the Sanoula permit has very high potential. The first phase consists of carrying out 5,000 meters of drilling and aims to confirm the targets identified historically. Depending on the results obtained, phase 2 may be intensified and will focus on the best areas.
Mr. Benjamin Cohen continues with the acquisition component. He mentions the arrival of Mr. Aurlien Bonneviot to participate in the development of Robex. He reiterates the objective of acquiring a very advanced permit, ready for exploitation. Several projects were analyzed and several companies were contacted. Discussions are underway but it is still too early to make an announcement.
Mr. Benjamin Cohen presents a development plan for the next decade. This plan is a goal and doesn't mean it's a limit. The goal for 2021 is to sign an agreement to purchase a project ready for the establishment of a new mine that would be in operation within 2 years and with a production capacity of 100,000 ounces of gold. At the same time, the goal is to increase production capacity by 50% for the Nampala mine, for which 75,000 to 80,000 ounces of gold will be produced annually. Subsequently, it is planned to increase overall production either by setting up a factory on the Sanoula permit or by acquiring a new permit very advanced in its development. The 10-year goal is to achieve a minimum production of 300,000 ounces of gold within our business model of producing gold at less than $ 850 / ounce.
Mr. Benjamin insists that everything has been put in place to start this phase of growth. In particular, Nampala's gold production is stable, we have a very low production cost, very good free cash flow and very little debt, good support from banking institutions, suppliers and now an M&A department. All of these elements will allow us to meet our objectives. Finally, it is mentioned that Robex does not limit to Mali for its development but likes West Africa.
For the second half of 2021, Robex intends to communicate a lot more with the aim of promoting the company and increasing the liquidity of RBX in the market, especially if it succeeds in acquiring a new license. Mr. Benjamin Cohen believes that the integration of a second operating license will allow Robex to diversify its risk and increase its overall production capacity, which he believes will be a great story to tell to the market. Robex is well on the way to becoming a great gold company and we are definitely in a period of growth.
Mr. George Cohen opens the question and answer period.
Question: Suggestions are sent by a shareholder to better promote the SP.
Answer: Mr. Georges Cohen mentions that several discussions are underway with external entities and that Robex could possibly communicate on this subject. The objective is to make an acquisition by exchanging shares and / or in cash. Regarding dividends, Mr. Georges Cohen mentioned that considering all the investments made recently, it will be difficult to pay a dividend in 2021, but it is not excluded. As soon as possible, dividends will be distributed. As for the other suggestions, this may be the subject of some thought.
Question: What are the royalties paid to the Malian government?
Answer: Around 6,000,000 Euros are paid in taxes. It all breaks down into local taxes, profit taxes, mining royalties and more. Robex is a good contributor.
Question: Considering the sales made by Mr. Doyon and Mr. Marti a few hours before the publication of the 2021-Q1 financial statements, the drop in shareholder confidence in them, what do you plan to do to restore shareholder confidence?
Answer: The financial markets authority carried out an investigation and found that these orders had been placed well before the publication of the financial statements. Therefore, the AMF concluded that there was no fault. Promptly, Mr. Doyon and Mr. Marti contacted the AMF to fully explain the situation. Despite the fact that there is no fault, Mr. Faucher reiterated that these transactions do not correspond to internal policies and that this situation should not happen again.
Question: Give us details about the performance of the cone crusher?
Answer: The cone crusher has been in operation since the beginning of April. We can now process the ore from the transition zone which is richer and which increases the average grade by 0.5 grams / tonne. About 10% of the ore processed comes from the cone crusher. The results produced by this crusher make it possible to compensate for the low gold content contained in the surface ore. The treatment of the surface ore that comes from the 4 new pits means that for 1 or 2 years, the gold grade will be lower but the production will be compensated by the treatment of the richer quartz blocks and the improvements made to the plant.
Question: Can you explain the variations in tonnage processed from quarter to quarter?
Answer: Stripping often affects our ability to supply the plant with minerals; maintenance and repair of equipment parts requires temporarily stopping operations, as well as adding new components to the circuit. Since the installation of the new crusher, we have reached a tonnage record of 6,700 tonnes in a single day. Remember, the plant was originally designed to process 3,000 to 4,000 tonnes per day.
Question: Can you inform us of the drilling results obtained by the current holder of the Gladie permit?
Answer: The work carried out to date on the Gladie permit is brief and does not allow valid results to be communicated. Additional drilling will have to be carried out first. Geographically, the ore from the Gladie permit could, if necessary, supply the Nampala plant.
Question: Can you send us partial production results for 2021-Q2? Is production improving?
Answer: We can't give you the results but yes, production is improving. The tonnage processed has improved and the average gold grade is increasing. We are on the right path.
Mr. George Cohen shares his optimism about the possibility of discovering new mineralized zones around the Nampala mine. Mr. Rousselet reiterates the fact that the southern and eastern areas are not closed and that he is confident about their continuity. Additional drilling will have to be done to demonstrate this. Mr. Georges Cohen reiterates his confidence in production, future exploration work and finally, in the Sanoula permit. Mr. Benjamin Cohen reminds us that we have no particular stake on the Nampala permit since we have 10 years of reserve and that the majority of growth now relies on external growth and the development of our permits, mainly Sanoula. It’s not just Nampala that will help develop Nampala, far from it. Mr. George Cohen recalled that there are ongoing discussions with companies that would agree to merge with us, which would allow us to expand the scope of our licenses. These discussions are not finalized and we hope to announce in the near term an acquisition that will increase the size of Robex. The ambition is there.