Seeking Alpha
We cover over 5K calls/quarter
Profile| Send Message|
( followers)  

Executives

Rod Antal – CEO

Howard Stevenson – President and COO

Analysts

Cathy Moises – Evans & Partners

Michael Slifirski – Credit Suisse

Stephen Gorenstein – Merrill Lynch

Leily Omoumi – Scotia Bank

Jo Battershill - UBS

David Haughton - BMO Capital Markets

Keith Goode – Eagle Research

Alacer Gold Corp.(OTCPK:ALIAF) Q3 2013 Earnings Call October 29, 2013 6:36 PM ET

Operator

Hello, ladies and gentlemen. Thank you for standing by. Welcome to the Alacer Gold Q3 Financial and Operating Results Conference Call and Webcast. As a reminder all participants are in listen-only mode to prevent any background noise. After the speaker’s remarks, there will be an opportunity to ask questions. (Operator Instructions).

As a reminder this conference call is being broadcast live on the Internet and is being recorded. Your conference speaker today is Rod Antal, Chief Executive Officer. Please go ahead, Mr. Antal.

Rod Antal

Yes, thank you, Saatchi. And welcome to Alacer Gold’s Conference Call to discuss our third quarter 2013 financial results. Joining me on the call is Howard Stevenson, our President and Chief Operating Officer. Alacer’s Interim Chief Financial Officer, Mark Murchison would normally join me on our Earnings Calls. Mark won’t be on today’s call as he is travelling up to completing the Australian assets sale which was announced earlier today.

I will now give a brief presentation on the financial results that we released earlier today after which we will hold a Q&A session. I’ll be speaking to a slide deck summarizing our financial and operating results which is available on our website.

Slide 2. During today's call, certain forward-looking statements will be made relating to the future business plans and other matters of forward-looking nature. These forward-looking statements are subject to many risks and uncertainties, many of which are detailed in our public filings and can be found at www.cedar.com. There could be no assurance that such forward-looking statements will prove to be accurate as actual results and future events can differ materially from what they were forecasted or projected to be. Please take time to read the cautionary statement and understand that all forward-looking statements made today are subject to the disclaimer set out on slide two of the presentation. Additionally, all dollar amounts in this presentation are expressed in US dollars unless otherwise noted.

Our MD&A and earnings release which are both posted on our website at www.alacergold.com include a reconciliation of certain non-IFRS financial measures to the most directly comparable IFRS measures including cash operating cost per ounce, total cash cost per ounce, all-in sustaining cost per ounce, and all-in cost per ounce, and adjusted net profit which may be used on this call. Now, please turn to slide 3 for our third quarter highlights.

We are very pleased with the excellent progress that we have made over this last quarter in transforming the business to focus on our operations and assets in Turkey. In September, we announced that we entered into a binding agreement to sell the Australian assets. And today, we announced that the sale has completed.

Because the sale did not close until after the end of the third quarter, the Australian Business Unit has reported its discontinued operations in line with the Q2 reported financial statements. Results from the Australian Business Unit are reported in summarized form for Q3 and separated from our continuing operations in the financial statements.

There are also a number of important management and Board changes during the quarter, which I will discuss a little bit more detailed on the next slide. At Copler we announced a 15% increase in production guidance for 2013 and released the mines oxide production profile through 2017.

On the operations front, Copler set a new quarterly production record of over 81,000 ounces. This is a 19% increase over the previous record set in the second quarter. Of particular note is that this production record was set while achieving over 1 million man-hours worked without a lost time injury which demonstrates the benefits of having a workforce focused on safe and efficient production.

Total cash cost at Copler were $342 an ounce for the quarter with all-in cost among the lowest in the world is $701 per ounce. Alacer’s total cash position remains strong at $222.3 million at the end of September excluding $2.9 million of cash in our Australian Business Unit. This does not include the sale proceeds of the Australian Business Unit of AUD40 million and any final working capital adjustments.

Alacer’s adjusted net profit was $28.3 million or $0.10 per share for the quarter. In connection with the sale of the Australian Business Unit, the corporation took a [bundled] [ph] impairment charge of $69 million.

So please turn to slide 4 for a quick overview of the recent management and Board changes.

In line with our decision to focus on Copler and Turkey, a number of changes have been made to both our senior executive team and Board which support and reflect our new business strategy. Our executive team has been reduced from eight members to only four. I was transitioned from CFO to CEO on August 12; Howard Stevenson was promoted to President and Chief Operating Officer and Mark Murchison was promoted to Interim Chief Financial Officer and Geoff Williams remains our Chief Legal Officer and Secretary.

There have also been a number of significant changes to the Board. All of the former Avoca Board Members have resigned. The Board is now conducting an independent search to appoint at least two new independent directors. One of the benefits from the Board and management change is that we expect a significant reduction in our G&A across all our functions that were approximately $16 million on an annualized basis.

Further reductions to G&A are a key focus for us and especially in the current market environment. We recognize that our workforce is not – our work here is not finished and we’ll continue to seek ways to drive further cost cutting initiatives in an effort to eight size the business as it evolves.

I’d now like to comment on Copler’s strong performance this quarter on slide 5.

Copler has continued to perform extremely well with production increasing to more than 81,000 ounces for the quarter. The performance of this world-class asset underscores while Alacer has chosen to focus on Copler and our exploration assets in Turkey.

The strong quarterly gold production at Copler is a result of concerted effort and a concerted focus on operational improvements at our mine site during the year. In the early part of the year, the focus was on improving material handling and eliminating bottlenecks. More recently, the focus has shifted to ensuring quality agglomeration of raw materials stacked.

Run-of-mine ore placed on the heap leach pad during the quarter comprised only 6% of the 1.7 million tonnes of ore stacked. Going forward, we do not plan on placing any additional ROM [Run-of-mine] to the pad.

Total cash cost at Copler declined to $342 an ounce. The key driver of this was a Turkish royalty expense credit. The credit was a result of the mining bureau clarifying the positive application that [inaudible] allowance. The credit which applied to the 2011, 2012, and current year resulted in a benefit of $5.5 million or $68 an ounce, and was recorded in Q3 2013. Should this credit not have been obtained, total cash cost per ounce would’ve been in line with our revised guidance.

Operating cash flows from continuing operations increased to $50.4 million for the quarter. This was prior to one-time capital expenditure of approximately $241 an ounce or $19.6 million for the SART plant, clay sizer, and material handling circuit, and the new agglomerator. The SART plant and the clay handling circuit will be on or under budget and on track to be completed during the fourth quarter. The SART plant will not be commissioned till required next year.

Please turn to slide 6 to discuss the recent increase in production guidance. The strong year-to-date production from Copler led us to significantly upgrade our 2013 guidance to a range of 192,000 ounces to 200,000 attributable ounces, all attributable or an increase of approximately 15% over previous guidance.

This increase to production guidance has primarily been driven by the combination of mining higher than planned volumes in the Manganese Pit, positive grade reconciliations, and improvements in material handling and leaching activities. It is important to note that we expect gold production to decrease in the fourth quarter as grade of the ore stacked on the heap leach decrease in the quarter with our mine plan.

The new clay-handling circuit and agglomerate should add to the operating improvement we’ve already made and will help ensure that Alacer delivers on its production guidance.

We recently released the new production, a new oxide gold production profile covering the next four years which is on slide 7. This important piece of new information showcases a steady production outlook for Copler over the next four years.

A new production profile serves several purposes. First, it demonstrates that we have not been highgrading any oxide ore body to the detriment of future production. Second, it provides us with solid cash flows which can be used upon future investment decisions to grow the business including the construction of the sulfide processing facility. Last, it demonstrates that we still have time before a decision is required on the processing path to sulfide at Copler.

Even though the resource block model has underestimated ounces mined today by about 10% we have not factored any further positive reconciliations into our planned production for this four-year profile.

Now please turn to slide 8 for an overview of our profit and loss statement.

Note that the summary table on this slide is for our continuing operation only. Gold sales is about $109 million worth 46% more than the previous corresponding period. This was driven by 82% increase in the gold ounces sold offset by a $329 per ounce decrease in the average realized gold price.

Copler’s production cost increased by $9 million to $28 million as a result of the capitalized waste - [less] [ph] capitalized waste, higher treated ore volumes and higher prices and cost including reagent usage and deferred stripping adjustments. These increases were offset by the lower unit rates from a new mining contract with Ciftay.

Total cash cost decreased by $74 an ounce to $342 an ounce due to a reduction of $68 an ounce from the true-up royalty expenses from the change in the interpretation of the applicable incentives that were not applied previously. The adjustment was recorded during this quarter. DD&A increased to $11 million for the quarter mainly as a result of the increase in the tonnes mined. This resulted in mining gross profit of $69.5 million for the quarter. After deducting exploration, admin and miscellaneous other costs, Alacer reported a profit before tax of $49.1 million.

G&A decreased 43% in Q3 over Q2 as the result of the cash maximization strategies. G&A is a key focus and continues to be a work in process with a focus as we align our corporate functions in the right way to support our ongoing operations. We will provide G&A guidance when we announce our 2014 production and cost guidance.

As you can see, we’ve incurred restructuring cost for the quarter. These costs reflects severance payments associated with the recent management change, restructuring, and changes undertaken as a result of the corporation’s transformational changes to the business. The income tax expense of $12.6 million was primarily driven by the tax incentive credits. We are now operating under our second incentive tax credit certificate which has an applicable tax reduction rate of between 20% to 40%, and is lower than our first certificate that had a rate of 70%.

The incentive tax credit provides an additional tax deduction and eligible capital expenditure over and above normal tax depreciation claimable. The incentive is aimed at encouraging investments in Turkey. This means our effective tax rate has risen from approximately 13% to 18%.

All-in sustaining costs were $697 an ounce and all-in costs were $701 per ounce. These new measures are based on guidance issued by the World Gold Council in June 2013, and comparative numbers for 2012 have not been prepared. The cost basis for both these measures include one-time sustaining capital project costs related to the SART plant, the clay sizer and material handling circuit, and agglomerator upgrade. As mentioned earlier these one-time costs represent approximately $241 an ounce in both of these measures.

In connection with the ABU sale agreement, the corporation recorded as part of discontinued operations a write down of assets totaling $69 million related to the Australian assets being sold.

Now please let's turn to slide 9 for a discussion on Alacer's financial position.

Alacer maintained a strong balance sheet ending the quarter with a total cash of $222.3 million, which excludes $2.9 million cash from our discontinued operations. Note, as of today's press release, we save an additional AUD40 million related to the sale of the Australian assets. Additionally, during the quarter Alacer paid off all outstanding debt and has zero debt. The strong balance sheet provides us with a great degree of flexibility in the current volatile gold price environment.

In Q3, the corporation paid AUD64.4 million or approximately $58 million to the West Australian government for stamp duties related to the merger in 2011. We believe that duty assessment is overstated and have filed an objection which is being lodged with the WA Office of State Revenue. It is possible that we will recover a portion of the disputed AUD21 million in the future.

Now please turn to slide 10. In closing, I'd like to reiterate the key steps we, as an executive management team, have taken. Here is our report card and a recap. One, we have increased Copler’s production guidance for 2013 by 15%. Two, we released the heap leach production profile through 2017. Three, we eliminated approximately $16 million of corporate overhead on an annualized basis and continue to focus on rightsizing the corporation. And four, we completed the sale of the Australian assets.

[Other catalyst] [ph] this year will be to confirm the best processing option for the Copler sulfide ore and providing a realistic timeline for development. We are also taking a closer look at our exploration profile portfolio in Turkey. While I appreciate the market isn’t just ascribing value to exploration result at this time, it is important to highlight that Alacer has a significant land position in Turkey with numerous opportunities for exploration success from our existing Turkish portfolio. And our team is focused on refreshing and prioritizing Alacer's organic growth targets. With the sale of the ABU, we will plan to concentrate on the development of our exploration portfolio in Turkey, but focusing on targets that provide us the highest potential for return in the medium term.

This now concludes our prepared remarks concerning our third quarter 2013 financial results. I would now like to open the conference for questions. Saatchi?

Question-and-Answer Session

Operator

Thank you. Ladies and gentlemen, we will now begin the question-and-answer session. Due to time limitations, participants will be limited to two questions only. (Operator Instructions).

The first question is from Cathy Moises of Evans & Partners. Please go ahead.

Cathy Moises – Evans & Partners

Just curious with your revised guidance for the oxide, how do we treat the different potential processes in the oxide [not to] [ph] heap leach? Do we assume some capital in the next few years or do we just take it out for the time being?

Rod Antal

What we provided in the four-year production guidance was heap leach constrained guidance that we have at Copler. So, we haven't assumed any further capital expenditure required for the heap leach nor any other potential for a carbon in leach [top] [ph] circuit that may have been talked about in the past. So, what you see is the production going into [inaudible] on the current 50 odd million tonnes of heap leach capacity.

Cathy Moises – Evans & Partners

So would it be correct to assume that when we say the sulfide options neither this year or early next year is going to be a potential change to that guidance for the heap leach?

Rod Antal

It will be - it’s going to be part of our consideration. What we have here is an optimized pit shell based on the heap leach production. If during these next six months of considerations as we go through and look at the processing options for the sulfides, we see a change or a significant change to the optimized pit as part of their work making those considerations around, whether there is any other potential for oxide type of processing. But right now, it's too early to tell.

Operator

The next question is from Michael Slifirski of Credit Suisse. Please go ahead.

Michael Slifirski – Credit Suisse

Thanks. Rod, the sulfide growth that you monitor in the quarter looks pretty impressive, how does that compare to what the model projected?

Rod Antal

Michael, we're continuing to see a significant positive reconciliation for the sulfide that we're taking out of the pit that we are currently mining. Since the last quarter, we said it was around 50%, that’s continuing in fact, it even got higher than that during quarter three. But again, the work that we're doing right now with the technical teams is to understand that and to help us understand that as we interpret it looking forward for the sulfide processing options.

So, it's a key piece of work that we have to do. I would caution you though that as we move into the Marble Pit and the main pit that we haven't been mining there yet, so it will still be a question of whether [inaudible] will continue into the future. Obviously, the cautionary statements are necessary these days.

Michael Slifirski – Credit Suisse

Okay, thank you. Second question is with respect to the implied December quarter guidance, given the grades stacked in the September quarter was about 80% of what was stacked in the June quarter and I guess the June quarter [faired] [ph] the September quarter production outcome, why is the December quarter guidance disproportionately lower than that 80% employed by the stacked grade?

Rod Antal

That will start to reduce as we get into quarter four. The grades that are going on to the heap leach in Q3 are coming down and that’s why we did see significant implied stacking from mining to what's being processed. That will start to become more normalized where the grades will start to, I guess, become closer together so we'll have grades going on the heap leach closer to what we're mining. We want to have the high grades that we've been enjoying for the first half.

So we will start to see that grade decline and also the recoverable ounces starting to decline coming off the heap leach. At this stage, we're still obviously very comfortable with our guidance. But by the end of the Q4 I think we'll certainly be closer to the top end than the bottom end.

Michael Slifirski – Credit Suisse

All right, thank you.

Operator

The next question is from Stephen Gorenstein of Merrill Lynch. Please go ahead.

Stephen Gorenstein – Merrill Lynch

Hi, Rod. I have just got a quick question following on from Mike's first question there. Given you are seeing [inaudible] positive regulatory [inaudible] in the oxide and now you are starting to see the same on the sulfide, what will it have actually taken? I'm just trying to get a feel of what would you be confident to start importing that into your forecast, obviously you haven't done that for the oxide so far. Is there anything that [inaudible] you can do? What would it take?

Rod Antal

I'll pass it Howard in a moment, Stephen, to give you a bit of an idea of some of the work that we're going to be doing. But again, as we're starting to move now back into the different parts of the ore body, it will still be a question of cautionary - again, my cautionary statement is I wouldn't extrapolate those positive reconciliations as we start to move into the path of Copler in the mine zone et cetera. While we've been enjoying it this year is we've been mining in the same pit. It doesn’t necessarily mean that that will continue into the other pits.

I'll pass it over to Howard and maybe he can put some light on some of the work that we're doing.

Howard Stevenson

Yeah. So Stephen, essentially what it takes is it takes a [Q&P] [ph] to sign off on the resource estimation method. What we’d say it’s up to now is [Q&P] [ph] that are insisting that we do our resource estimation in a certain way. And obviously the more information we get is essentially a bulk sample the more information that we have. We are at the moment updating the resource estimate with particular focus on trying to explain and eliminate that positive grade reconciliation.

During this year, we did some close-space drilling in certain areas of the pit and it didn’t really -- it wasn’t close enough to answer the question. So to get the drilling close enough spaced to where we really would need it to be would just be prohibitively expensive so we got to find a different way to do it and that’s what we're working on at the moment.

Stephen Gorenstein – Merrill Lynch

Thanks very much.

Operator

The next question is from Leily Omoumi of Scotia Bank. Please go ahead.

Leily Omoumi – Scotia Bank

Thank you. Thanks for taking my question. I just have a question on the unit operating cost at Copler. The operating cost in Q3 went up a little bit, I mean, it's not a big increase like given the production was up significantly quarter over quarter. I'm just wondering what kind of trend you're seeing in terms of dollar per ton operating cost – mining and operating costs?

Rod Antal

Sure. I think if you do back out the royalty adjustment we had on Q on Q, there was a small increase in our cost per ounce. Again, primarily, a bit - the big changes that we’ve had this year are driven by the reagents usage - increase in the reagents usage. We’ve also had some increases to the cost of reagents at Copler during the year and also we’re mining more.

So, increasingly, where you’re seeing more stripping and those associated cost coming back into our unit production cost. So, while it’d been consistent quarter-on-quarter, it’s obviously a key focus of ours moving into a plant cycle for 2014 to ensure that we do everything we can to control those cost and keep them as consistent as possible.

Leily Omoumi – Scotia Bank

Okay. Thanks, and then just in terms of the strip ratio then should we expect to see some other levels in Q4 or would you say a bit higher?

Rod Antal

For Q4, Leily, I’ll have to get back to you, but I think it is similar but I just want to double check. Moving into 2014, now you can see from the production guidance that we sent out that it’s starting to go up.

Leily Omoumi – Scotia Bank

OK. I’ll let others ask question. Thank you.

Rod Antal

Thanks, Leily.

Operator

The next question is from Jo Battershill of UBS. Please go ahead.

Jo Battershill - UBS

Yeah. Good morning, Rod. Just a couple of quick questions if I may, with the sale of the Aussie assets, can you just give us an update on exploration expenditure in Turkey for Q4, well that’s a useful guide to take into next year.

Also would the corporate costs you’ve shaped [inaudible] so far I know you are going to give us some guidance later. But where do you think corporate cost should sit for a company of your size now?

Rod Antal

I’ll start with the exploration, Jo. We’re actually in the process of reviewing all of our exploration programs again in line with our normal budget cycle but obviously with a key focus on looking at high priority targets moving into 2014 and beyond.

So, the guide that - the exploration spend that we had for Copler for this year I don’t expect that that will be decrease. If anything it might increase a little bit depending what we - depending on what we target for next year.

So, as soon as we have completed our work, again, we will provide guidance. But again, I wouldn’t be taking a lesser number than what we already have for Copler for this year.

In terms of G&A, we’re looking – again it's a work in progress. We’ve been successful in taking out a number of our cost in G&A; there was - obviously with the changes in the management team and a number of people leaving the organization as we become a single-asset company, that’s certainly been a trigger point, but we’ve also been able to control a lot of the costs and spending that we had as a business.

So, yeah, some of the more discretionary type of cost and spend we didn’t go ahead and do. So, there is a, again, another piece of work that we’re doing to reestablish what the correct G&A base should be for us going - looking forward but, again, I’ll provide that as soon as we do the production guidance exactly what it will be.

Jo Battershill - UBS

Again, thanks, Rod.

Operator

The next question is from Michael Slifirski of Credit Suisse. Please go ahead.

Michael Slifirski – Credit Suisse

Thank you. Actually I got another two. The question is about - how do you really think about your modeling of the sulfide project and the capital you might deploy there when you’re not sure what the grades is going to be and how do you stress test that’s a capital opportunity for a great outcome that might be materially different to what the reserves are showing?

Rod Antal

So, Michael, I think what we’ll be doing in terms of how we look at this as we move into a [definitive] [ph] feasibility on the sulfide processing option is to take the reserve resource and [CP signed] [ph] bases to do those assessments. I think that’s the prudent thing to do but as Howard say, I think the work that the team is doing currently and the findings from that work as we move through that process so we can get to a new 43-101 statement.

Hopefully, we can incorporate some of those learnings into those deliberations as we move forward. But certainly, I think it would be disingenuous for us to sort of [inaudible] extrapolate those positive reconciliations right now.

Michael Slifirski – Credit Suisse

Okay. Thank you. My second question then is with respect to the write down on the Australian business unit given that they have been written down if I recall [stood about 80] million or thereabouts anyway. You’ve had a bit of depreciation. You’ve got the sale price. How do you close the gap between those numbers and the final write down? It looks like you’ve written down pretty much what the book value was before any sale proceeds.

Rod Antal

Yeah, it was really the biggest change between last quarter and this quarter for [inaudible]-- and net asset value was a significant decrease that we had in creditors. So, that’s why the actual asset base went up on our net asset base - on our net asset bases.

So, it has now been written down to the sale price. The only other outstanding adjustment that we’ll have in Q4 because the deal wasn’t closed in the Q3 books will be any foreign exchange that we’ll have to - left to adjust for.

Michael Slifirski – Credit Suisse

Okay. Thanks, Rod.

Rod Antal

No problem.

Operator

The next question is from David Haughton of BMO Capital Markets. Please go ahead.

David Haughton - BMO Capital Markets

Hi, Rod and Howard. I got a couple for you. Just looking at your stacking rates, we’re kind of moving into a new phase, [normal, Ron] [ph]. So, that means less tonnes being stacked that way. But also you’ve got your clay sorter and you’ve optimized your crushing and agglomerator. What sort of stack rates should we be thinking about going forward?

Rod Antal

I’m going to pass that one over to Howard.

Howard Stevenson

Yeah, let’s see. We’re certainly adding capacity at the front-ends of the plant, but we haven’t added anything really on the backend. So, in terms of [inaudible] conveying and stacking itself to grasshoppers, we haven’t really added capacity yet. So, I think until we do that, you should be assuming that we keep going sort of at the same rates that we’re doing I would say in Q3 going into next year bearing in mind that we are going to be commissioning a new plant in Q1 and getting it up to speed, so there may be a bit of a slowdown on that in the first quarter. But overall for next year, I’d say you should be looking at similar rates to what we have been doing in this last period now of this year.

David Haugton – BMO Capital Markets

Okay. So, around that 1.7 million tonnes per quarter, sort of thing you are comfortable?

Howard Stevenson

Yep.

David Haugton – BMO Capital Markets

Just switching over now to the recovery ratio, very high in the current quarter, I guess part of that is a legacy of much better grades being stacked earlier in the year and the leaching cycle catching up, is that a reasonable way to think about it and then, what would you expect as your status quo kind of recovery ratio going forward?

Howard Stevenson

So, yeah, that is a good way to think about it. There’s obviously a lag between materials getting stacked on the leach pad and gold getting poured into bars, and so, certainly the materials that were stacked in the first half of this year is what we’re seeing coming out now, and you’ll see from the stacking grades this quarter that those grades have started to come down, and so, that’s what we’re projecting going into Q4 as we’ve already talked about.

Overall, in terms of recovery for this operation, we’re still predicting recovery to be pretty much in line with what was in the 43-101 originally, which was about 65%, bearing in mind that we have stacked the proportion of tons that we have stacked run-of-mines which has an effect on recovery, and we’ve also – there was periods where we didn’t agglomerate. So, there has been a bit of a deterioration in recovery that we expect to see, but over the life of the operation, we expect that to be about 2 to 3 percentage points.

David Haugton – BMO Capital Markets

Okay, and another one that goes along with the oxide plan, what kind of sustaining CapEx would you expect annually over that four-year plan?

Rod Antal

Yes, David, look, again, we’ll provide guidance in the next round, but I have been saying consistently, $15 million to $20 million would sort of be conservative – a conservative number on it.

David Haugton – BMO Capital Markets

Okay. Thank you, guys.

Rod Antal

Thanks, David.

Operator

(Operator Instructions) Next question is from Keith Goode of Eagle Research. Please go ahead.

Keith Goode – Eagle Research

Hi, Rod. Just a couple of questions. Firstly, how are you going to stockpile those really high grades in Marble Pit and in fact are you actually stockpiling if that was a certain high grade? And the second one, are you still considering putting in that CIL treatment plant?

Rod Antal

So, Keith, I think it is a question on stockpiling obviously the sulfide.

Keith Goode – Eagle Research

Yeah – well, I seem to recall there were some really fancy grades in Marble Pit in the oxide, as well as in the sulfide.

Rod Antal

No, look, I mean, on the oxides, we are not stockpiling. For the sulfides, however, we are – as we are now getting deeper into the pits where we are getting the sulfides together with the oxides, and this year, so far, we’ve brought to surface about a million – a million tonnes, which is being stockpiled.

If you look out on our production guidance for the next four years, we’re also going to be bringing to surface sulfides in 14 to 17, and you know, but it ranges from 1 million tonnes to 3.8 million tonnes right towards the end of it.

Keith Goode – Eagle Research

What’s the grade of those stockpiles then?

Rod Antal

Well, right now, the stockpiles that we have, the 1 million tonnes is around 5 grams.

Keith Goode – Eagle Research

Okay. As far as the – are you still considering putting in the CIL treatment plant?

Rod Antal

On the CIL plant, all the work that we’re concluding at the moment Keith is to provide clarity on the processing options that we’re going to choose for the sulfides, and I’m committed to having that done by the end of the year, and we are on track for that. And we will do that. Part of that – part of that, considerations will be whether there is an option for a CIL circuit somewhere down the path.

But right now, it is really being encaptured in that work that we’re doing to look at the future processing options for the sulfides. We have to understand that before we can make a decision on the CIL.

Keith Goode – Eagle Research

And just lastly, when do you expect that information to come out on the DFS?

Rod Antal

Well, we said by the end of the year, we will give clarity on the processing options, path wise so to remove all of the other options that we’ve been talking about over the last year, and we’ll have that by the end of the year. In terms of moving into a DFS, that will be as quickly as we can do that and again, we’ll talk about that as we release the processing option.

Keith Goode – Eagle Research

I was wondering when we would eventually hear about it.

Rod Antal

You will hear about the processing option by the end of the year, and then we will also provide guidance on what we believe will take us to finish off the DFS.

Keith Goode – Eagle Research

All right. Okay. Thanks, Rod.

Rod Antal

Very good. Thank you, Keith.

Operator

This concludes the time allocated for questions on today’s call.

Rod Antal

All right. Thanks, Saatchi. I think we can wrap it up. Thanks, everyone, for your interest and we look forward to talking to you all some time in the future.

Operator

Ladies and gentlemen, this concludes today’s conference call. Thank you for participating and have a pleasant day. You may disconnect your lines.

Copyright policy: All transcripts on this site are the copyright of Seeking Alpha. However, we view them as an important resource for bloggers and journalists, and are excited to contribute to the democratization of financial information on the Internet. (Until now investors have had to pay thousands of dollars in subscription fees for transcripts.) So our reproduction policy is as follows: You may quote up to 400 words of any transcript on the condition that you attribute the transcript to Seeking Alpha and either link to the original transcript or to www.SeekingAlpha.com. All other use is prohibited.

THE INFORMATION CONTAINED HERE IS A TEXTUAL REPRESENTATION OF THE APPLICABLE COMPANY'S CONFERENCE CALL, CONFERENCE PRESENTATION OR OTHER AUDIO PRESENTATION, AND WHILE EFFORTS ARE MADE TO PROVIDE AN ACCURATE TRANSCRIPTION, THERE MAY BE MATERIAL ERRORS, OMISSIONS, OR INACCURACIES IN THE REPORTING OF THE SUBSTANCE OF THE AUDIO PRESENTATIONS. IN NO WAY DOES SEEKING ALPHA ASSUME ANY RESPONSIBILITY FOR ANY INVESTMENT OR OTHER DECISIONS MADE BASED UPON THE INFORMATION PROVIDED ON THIS WEB SITE OR IN ANY TRANSCRIPT. USERS ARE ADVISED TO REVIEW THE APPLICABLE COMPANY'S AUDIO PRESENTATION ITSELF AND THE APPLICABLE COMPANY'S SEC FILINGS BEFORE MAKING ANY INVESTMENT OR OTHER DECISIONS.

If you have any additional questions about our online transcripts, please contact us at: transcripts@seekingalpha.com. Thank you!

Source: Alacer Gold's CEO Discusses Q3 2013 Results - Earnings Call Transcript

Check out Seeking Alpha’s new Earnings Center »

This Transcript
All Transcripts