Argonaut Gold Inc

TSX:AR

Earnings Call Transcript 2022-Q4

[Operator]

Good morning, ladies and gentlemen. Thank you for standing by. For today's call, all participants are in listen-only mode. Following the presentation, we will conduct a question-and-answer session and instructions will be provided at that time for you. [Operator Instructions] I would like to remind everyone that this conference call is being recorded on February 27, 2023 and 09:30AM Eastern Standard Time and is being broadcast live via the Internet.

During today's call, management will make statements regarding management's expectations for the company's future financial and operational performance. These statements are considered forward-looking statements. Each forward-looking statement speaks only as of the date of this call, and actual results may differ materially from management expectations for a variety of reasons, including market and general economic conditions, and the risks and uncertainties detailed from time to time in the company's SEDAR filings.

I will now turn the call over to the President and CEO of Argonaut, Richard Young.

[Richard Young, President & CEO]

Well, thank you, Joelle. This marks my first Argonaut conference call. And I'd like to begin our fourth quarter and year end conference call with an apology to our shareholders and analysts who cover our company for the delay in releasing our year end results. This is my fault. When presented with the draft budgets upon joining the company, neither Marc or I were comfortable with them. We worked with the team truifies all four operating budgets. A process that normally takes months was compressed to weeks. Those changes to the 2023 budgets then impacted each properties life of mine plans. Which, as you can see, resulted in a significant cleanup of the balance sheet.

Unfortunately, as we were working to wrap the audit up last Thursday, we were still working through one final inventory write down at El Castillo, the mine that we're closing. As a result, we made the decision to defer the release of our results to allow our Board and auditors time to review and approve the final change. With our financial and operating results for 2022 are disappointing for all of us, from our Board to our management group, to all of our employees. It does not in any way diminish, Marc or my enthusiasm for the future of Argonaut.

With that said, what attracted me to join Argonaut was the chance to be part of a team that believes we have an opportunity to build one of the 10 largest and lowest cost gold mines in Canada, combining a large open pit operation with the potential of higher grade underground material to feed an expandable mill. To accomplish this goal, we are laser focused on completing the Magino project with first pour plan for mid-May and commercial production in the third quarter. The commissioning of Magino will be the first step in transforming the company as it enters a pivotal growth stage. Our new COO, Marc Leduc will update you shortly on the progress we are making on completing construction, commissioning and ramp up to full production, while we are exploring the underground.

In addition to Magino, we'll be focused on exploring the large sulfide resource that Florida Canyon, located just below the oxide deposit. We recognize that Flora Canyon has never been a significant cash flow generator. But we have put a plan in place to stabilize and optimize the current oxide operation, as well as begin a proof of concept program for the sulfides. Marc will talk about that shortly. The combination of an expanded Magino mill and potentially adding the underground and a possible redevelopment of Florida Canyon would provide the foundation for building a low cost mid-tier gold producer able to provide sustainable returns for shareholders.

While our Mexican operations have been the cornerstone of the company since its IPO, 2022 marks the final year that our Mexican operations contribute the majority of production and cash flows. As I mentioned at the outset of the call, since joining in December, we have revised the mine plans to focus on free cash flow generation. As a result, we suspended mining activities at El Castillo ahead of schedule and we anticipate at least temporarily pausing mining activities at our two other operating mines in Mexico by the fourth quarter of this year. While we have significant reserves and resources in Mexico, we will require land access and permit approvals to continue mining. The timing on land and permit approvals is uncertain at this point.

In summary, we believe that we have significant growth opportunities at both Magino and Florida Canyon. And while our Mexican asset base also has growth potential, the current challenges in country will make it difficult to allocate significant capital to the region in the near term.

Before I turn the call over to Marc, I'd like to make one final comment on the management changes over the past few months. I believe that the changes we have made strengthen our management team and provide the collective skills and expertise to execute on our vision and strategy. I've known Marc for nearly 30 years, having lived with him [indiscernible], at corporate offices while I was building a mine in Peru and more recently reviewing acquisition opportunities in the U. S. Southwest. Last week, Dave Savarie was appointed as GC and Nancy Lee was appointed as VP, Human Resources. We believe that these new hires will help to derisk and grow our company.

Now I will turn the call over to Marc.

[Marc Leduc, COO]

Thank you, Richard. I would like to echo Richard's comments on being excited now working with the team at Argonaut Gold. The company, in 2023 will chase a transformative time as we put the Magino mine into operations and transform our cost structure moving forward. We also look forward to some of our other mature mines and how we could redevelop options there. We'll be investigating the potential of these very exciting options in the coming years and hope to be able to share more developments in the future. I'll discuss this later in my talk.

Now, I will begin my comments on the year end production and costs. We reported for fiscal 2022 gold equivalent ounce production of 203,155 ounces. This is in line with our guidance for – sorry, our guidance of 200,000 to 230,000 ounces due to strong Q4 performance at the Florida Canyon and San Agustin mine. Our cash cost of $1,443 per ounce was higher than our revised guidance of $1,300 to $1,350 per ounce, due to the impact of writing down inventories to net realized value at all four of our operating mines. This added approximately $114 per ounce to cost. Our all-in sustaining cost per ounce was also higher at $1,765, which is higher than the guidance of $1,650 to $1,725, primarily due to the inventory write down. Our overall costs were all up at the four mines due to inflationary pressures.

Now let's look closely at each of the four mines. At Florida Canyon, the decrease in ounce produced during Q4 and the full year was primarily due to lower ore grades placed on the pad, partially offset by the increase in run of mine tons placed on the pad. This had an effect of an overall lower recovery rate compared to the 100% crushing case, resulting in cash and basic costs including a $4.8 million write down to the ounce inventory value.

At San Agustin, the decrease in gold production during Q4 and full year was primarily due to lower ore tonnes mined and processing and lower grade. The lower production for the full year at El Castillo was due to a reduction in ore mining and processing as higher gold grades offset lower recovered grades at the mine. The higher costs included an inventory impairment of $15.7 million and the expensing of all remaining capitalized deferred stripping into production costs due to the accelerated closing of the mine.

At La Colorada, gold production was expected to decline by approximately 25% in 2022 due to lower grades mined. However, drill hole contamination at the bottom of the historic El Castillo exploration drill holes resulted in overestimation of ore tons in the reserve model. As a result, fewer than planned high grade El Castillo tons were placed on the leach pad in 2022. The second operating pit, Veta Madre had lower grades and recovery rates compared to the El Castillo pit.

Moving now to our production guidance for the year. We announced our guidance in 2023 in our press release, but I will now review our guidance. At Florida Canyon, ore tons mined are expected to be marginally higher in 2023 compared to the prior year. Grade is also expected to be marginally higher than in 2022 for crushed ore, but slightly lower for the run of mine ore. A decision was made to place more run of mine ore on the pad compared to prior years, we expect total tons placed on the leach pad to be higher than last year.

Having said that, we expect the run of mine material recovery rates to be lower than the crushed ore. Overall, the combination of higher tons placed on the pad and higher grade is expected to result in a 20% increase in production this year. We expect cash costs and all-in sustaining costs to be between 10% and 20% lower than last year due to the higher production. With regards to development or revitalization at the Florida Canyon mine. I'm particularly excited about the potential at Florida Canyon where there is a large sulfide resource below the known oxide pits. At these oxide pits, we have produced 2.7 million ounces previously and we feel there is a great potential in the sulfide area.

Now moving to San Agustin. We've adjusted the mine plan because of land access and permitting constraints. The majority of the Phase IV of the pit is being deferred until land access and permits are received. This decision removes approximately 125,000 ounces from our current mine plan. We expect ore and total tonnes mines to be about 55% lower than it was in 2022, while grades are expected to be similar to last year. The lower mining rate results in lower ore tons placed on the leach pad by the same 55% reduction and gold equivalent ounce production to be lower by 45% to 50% despite benefiting from the ore placed on the leach pad late in 2022 and recovered in 2023.

We expect unit mining and processing cost to raise about 30% due in part to lower mining and processing rate, as well as a higher operating cost compared to 2022. Consumable and labor costs are budgeted to increase compared to the prior year. Cash costs and all-in sustaining costs are expected to be about 25% to 30% higher than in 2022, due to lower production and higher operating costs.

Moving now to the El Castillo mine, as we reported, mining activity was suspended in late December 2022. For 2023, site activities include, leaching of the ore placed on the pad in 2022 and re-leaching to rinse the pads as part of the reclamation process. With this, we expect gold production to decline by about 75% this year. While operating costs are limited to heap leach processing in general and administrative costs, we expect cash costs and all-in sustaining costs to be marginally lower than in 2022.

The majority of the site activities in 2023 will be focused on reclamation. Nearly half of the estimated $6 million in budget reclamation cost for this year will be directed to rinsing the leach pad with the balance spent on activities such as re recontouring waste rock piles, closing mine pits and [re-vegetation] (ph). As mentioned, management made a decision to suspend mining activities in December 2022, one quarter earlier than planned. We decided to wind up mining activities as a result of a higher operating cost structure from global inflation and lower recovery rates in the sulfide material, which rendered the operation no longer profitable.

Finally, moving to our last operating mine, the La Colorada mine. The mine consists of two open pit operations. The two pits are El Castillo, the higher grade of the two pits and the Veta Madre pit. We made a decision at the beginning of 2023 to suspend stripping activities at the El Castillo pit until the under -- until an underground mining trade up study could be completed. We expect the trade-off study to be completed in 2023 to determine the most profitable and lowest risk path forward to mine the high grade material found at the bottom of the El Castillo pit. The principal reason for taking a pause to evaluate our mining options is also based on the very successful exploration drilling campaign that we had in 2022. That identified several spectacularly high grade areas in the deep parts of the ore body. These areas could open the project up to future underground development.

At the Veta Madre pit, permitting and land access delays have resulted in approximately 80,000 ounces being removed from the current mine plan. Our decision to suspend stripping at the El Castillo pit combined with permitting delays at the Veta Madre pit, we expect ore mining to decrease by one-third and total mine tonnes to decline by 75% to 80%. Ore processing is expected to be one-third lower due to the lower ore mining rates. While grade mines are expected to be up by about 40% over 2022. Production is expected to decrease by approximately 25%. Unit mining costs are expected to double base on the lower efficiencies of the mining contractor. Cash costs are expected to be approximately 50% higher than last year. However, all-in sustaining costs are expect to be approximately 10% lower due to the lower capital expenditures in 2023.

Now moving to our new cornerstone project, the Magino project. As mentioned by Richard, Magino is our flagship project and we believe it will be transformational to the company. By the end of 2022, the company had incurred $583 million in construction costs with the project being estimated to be 80% complete. During Q4 2022 and for the full year 2022, the company incurred $74 million and $335 million, respectively, in costs related to the construction of the Magino project. Of this amount incurred, the majority was for the mineral processing plant, site development and construction overhead. The first phase of the tailing management facility has been completed and accepted by the engineer record. As a proactive risk mitigation measure, rental power has been secured for the process plant commissioning and to provide electrical power during initial operations.

As we have reported, initial gold production has been delayed to May 2023, primarily caused by a trade strike that impacted concrete work in May 2022 and a construction fatality with associated delays related to an area shut down and pause while additional safety measures were implemented in November 2022. Importantly, the Magino project's estimated completion cost was increased from $730 million or CAD920 million to $755 million or CAD980 million. The increase in costs was largely attributed to the 45 day delay to first pour, which results in higher capitalized overheads, higher earthworks costs related to higher fuel prices and scope changes, higher power costs due to rental power being required and changes to reduce risk in the mining pit startup.

Some of the cost increases were partially offset by the weakening of the U.S. dollar again -- sorry, the Canadian dollar against U.S. dollar during the period. Those activities under the company's scope include earthworks, on-site infrastructure and site power. All are proceeding as scheduled for the completion and time for first pour and mid May 2023. Ausenco Engineering, the engineering firm contracted by the company to complete the mill and related infrastructure is on schedule for the same time as well. Our site team is in the process of ramping up the operating team for full operations. Our binding commenced ahead of schedule in January 2023 to allow for the buildup of an ore stockpile to de-risk initial operations. The commissioning team is arriving on site and the site team is focused on operations readiness. We expect ramp up to commercial production to take approximately three months following first pour in mid May 2023, placing the project on schedule for commercial production estimated to be in the third quarter of 2023.

Of note, the operating statistics are for the full year, while the financial statistics do not commence until mid-May as construction costs are capitalized within the mineral properties plant and equipment for the first 4.5 months of the year. We expect ore and waste tons mined in 2023 to be in-line with the life of mine plan, which was presented in our latest technical report. Two changes were made to de risk the plan. First, we started ore mining early -- earlier than originally planned to de risk mining and processing during the first part of the year. And second, we modified the mine plan resulting in a 10% decrease in grade mined. Compared to the life of mine plan, tons milled are expected to be about 10% lower than the life of mine plan due to the 45 day delay in startup and commissioning. This decrease will be partially offset by the processing of historic tailings during the fourth quarter of 2023. The average grade processed is expected to be about 10% lower than the life of mine plan due to changes in the mine sequence noted above.

We expect total site cost to be marginally higher than the life of my plan. Mining costs have increased compared to the life of mine plan due partly to the 20% increase in diesel and LNG costs, as well as a 97% increase in explosive [indiscernible]. We expect the cost of explosives to increase due to smaller drill hole pattern and significantly higher explosive costs than what we had originally planned. As a result of the 45 day delay and changes to the mining seasons, we expect production to be lower than the life of mine plan by approximately 50% due to the startup delays in the lower grades. We expect our overall cash costs and all-in sustaining costs per ounce to be about 5% higher than the life of mine plan due to the increase in mining costs.

Finally, looking at the exploration and development in Magino, we think that things have just begun here along the [LGDZ] (ph) gold trend. And we look forward to exploring for additional ounces of gold both in open pit and underground prospects.

I will now turn the call over to Dave, who will review the fiscal 2022 financial results.

[David Ponczoch, CFO & Corporate Secretary]

Thank you, Marc. And good morning everyone. I'll start by reviewing our year-end financial performance. While Argonaut made significant progress during the year, bringing us to the latest phase of construction before we commission our flagship assets. The year was marked by significant financial challenges, mainly on two fronts.

First, we experienced an increase in construction costs at the Magino project, which required a large capital raise, including debt, equity and the sale of a royalty. As we have previously disclosed in December 2021, we announced that the cost to build the project had increased from CAD510 million to CAD800 million and then we announced a further update in May 2022 to CAD920 million following a second review to ensure we had right sized the financing. Today, we are announcing a further increase in construction costs, as Marc mentioned. In U.S. dollar terms, the costs have increased by $25 million from the May 2022 estimate to today's estimate.

Second, as Marc mentioned, the inflationary pressures have had a significant impact on the operating results of our low cost heap leach operations in Nevada and Mexico, resulting in an impairment of our Mexican assets in the Florida Canyon mine. We recognized that non-cash impairment of mineral properties, plants and equipment for 2022 of $136 million compared with $65 million in 2021. Impairments consisted of $48 million at the Florida Canyon mine, $43 million at the San Agustin mine, $7 million at the El Castillo mine and $27 million at the La Colorada mine. Impairments were largely related to the negative impact and the significant increase in inflation on labor operating costs, which have disproportionately a higher impact on the low grade heap leach operation.

Additionally, we recorded $10.4 million impairment charge related to the Ana Paula project. To strengthen our balance sheet, in December we sold and optioned two of our noncore Mexican non-operating assets. The company entered into a definitive agreement to sell the Ana Paula project allowing Argonaut to unlock the value of this asset and focus on our significant core assets. In addition, we optioned the San Antonio project to the same company.

Revenue for fiscal 2022 was $388 million, a decrease of 11% from $437 million in 2021 due to lower ounces sold, partially offset by higher gold price. Production costs for 2022 were $278 million, an increase of 10% from $254 million in 2021. Resulting in cash cost per gold ounce sold of $1,443 per ounce in 2022 compared with $1,006 in 2021, an increase of 43%. The 2022 gross profit was 79% lower than 2021, due to the lower revenue and higher production costs.

Full year 2022 net loss of $152 million as compared to net income of $27 million in 2021 was largely due to the higher impairment in 2022 compared with 2021. While 2022 had adjusted net loss of $22 million, this is compared with an adjusted net earnings of $57 million the year earlier, resulting in a loss per share of $0.28 compared with earnings per share of $0.09 the year earlier. While in 2022, we had adjusted net loss per share of $0.04 compared with adjusted earnings per share of $0.19 in 2021. Cash flow from operations before changes in noncash operating working capital and others for the year was $71 million compared with $125 million, a reduction of 43% due to the lower revenues and higher production costs.

Revenue for Q4 2022 was $96 million, a decrease of 7% from $103 million in Q4 2021, due to lower ounces sold, partially offset by higher gold price. Production costs for Q4 2022 were $80 million, an increase of 18% from $68 million in Q4 2021. The higher costs were primarily related to higher consumable costs than the prior year. The Q4 2022 gross profit was lower than 2021 due to the lower revenue and higher production cost, which included the noncash write down of inventories and net realizable value at all four operating mines up $23 million.

Overall for Q4 2022, we reported a net loss of $175 million as compared with a net loss of $37 million in 2021. Largely due to the higher impairment in 2022 compared with the prior year. While the adjusted loss was $38 million compared with earnings of $10 million a year earlier, resulting in a loss per share of $0.22 compared with $0.12 dollars the year earlier, while adjusted loss per share of $0.05 compared with earnings per share of $0.03 the prior year.

Cash flow from operations before changes in noncash operating working capital and others for the fourth quarter was $9 million, compared with $18 million the prior year, a reduction of 53% due to lower revenues and higher costs. Argonaut ended the year with $73 million in cash on the balance sheet and $170 million available to draw. Of the $170 million available at year end, in January, another $56 million was drawn on the credit facility. We still have $114 million available to draw on our credit facility. Based on the updated cost to complete for construction, assuming a mid-May gold pour-- first gold, the remaining balance for the credit facility should cover the remaining costs.

In Q4 2022, Argonaut closed a $250 million debt package and terminated the previous corporate revolving debt facility. We sold a 2% NSR of Magino for $52.5 billion and issued $10 million in private equity and we did CAD17 million in flow through equity, all as part of the financing package we announced in the second quarter to meet the higher capital cost to complete the Magino project. As of year-end, we had gold forwards for 430,000 ounces of gold delivering into those over the next 4.5 years, providing price protection for a portion of our Magino production. In addition, in January, we locked in an additional 30,000 gold ounces at $1,896 an ounce for Q2 2023, which gives us gold forwards for a total of 460,000 ounces. Now a portion of these Q1 gold forwards have already been settled.

2022 had significant gold price volatility and we felt it was prudent to lock in price protection via gold forward as we are in the final stage of building the Magino mine and then moving into operations. We expect that in general construction, within the time lines noted, with the benefit of our loan facilities and we further expect to meet all repayment obligations as they come due. The completion of these financing packages is a testament to the strong project fundamentals of Magino.

I'll now turn the call back to the operator for any questions.

[Operator]

Thank you. Ladies and gentlemen, we will now begin the question-and-answer session. [Operator Instructions] Your first question comes from Wayne Lam with RBC. Please go ahead.

[Wayne Lam, RBC]

Hey, good morning guys. I was just wondering if you might be able to provide a bit more detail on the changes in the life of mine plan of Magino in terms of the mine sequencing in the lower grades? And I didn't catch what the impact on the life of mine operating cost was. And is there going to be an updated technical report provided?

[Richard Young, President & CEO]

Thanks, Wayne. It's Richard. I will start off and then hand the call over to Marc. The unit costs are in-line with the tech report and the changes that we've made were short term just to de risk the plan. And Marc can talk about that. But your final question on new tech report. At this point in time, the current tech report is holding sound, so there is no need for a further update.

So with that, I'll turn it over to Marc just to talk further about the changes that we made to the mine plan to de risk it. Marc?

[Marc Leduc, COO]

Thanks, Rich. Hi, Wayne. Yes, Wayne, there were kind of two aspects to the mine plan change. First, we did -- we started earlier than we had initially planned. We did this to build up a stockpile to kind of decouple the mining away from -- starting and commissioning open pit mining operation at the same time as commissioning a mill. So we're building up a stockpile right now. We've already blasted and started moving ore into stockpiles. So that was -- all that is a type of basically a timing change and maybe starting a little slower. So that's the first part.

The second part is, we moved where our first base was to step away from the old Magino underground workings. The reason we did that is just -- it's just another thing that might go wrong. You're mining at the top of some of those old stopes. Our indication is, they're not completely filled, so there could be some complexity for mining on top of open voids, and we just felt it was better to go into an area where we knew the ore body was and step away from those open stopes and then we'll be going back over in there. It's all within the Phase I pit, but we've broken the pit up. So that's basically the reason for the lower grade, but we'll get back on plan here in the next few months.

[Wayne Lam, RBC]

Okay, perfect. Thanks. That sounds like a prudent strategy. I was just wondering also what was driving the underspend on CapEx at Magino in 2022 relative to the budget? And where do you see potential for any further overruns? And then, just a question on the rental power at Magino, does that mean there is any delays with the construction of that LNG plant?

[David Ponczoch, CFO & Corporate Secretary]

Thanks, Wayne. So a couple of things. First of all, the underspend in 2022 relates to the 45 day delay. So that's in part the reason for the cost under run as we approach project completion with the revised capital increase to %755 million, CAD980 million. We're comfortable that those numbers, there won't be a further capital increase over and above that.

[Marc Leduc, COO]

And then how about the LNG. Wayne asked about the LNG plant and the temporary power. DO you want me to handle that?

[Richard Young, President & CEO]

Yes. Marc, would you like to take care of that?

[Marc Leduc, COO]

Yes, sure. So what it was, Wayne, is it probably looks like we're going to have the LNG plant coming in right about the same time as commissioning. So we just felt that for security sake and not having a potential for a couple of week or month delay caused by just some unfortunate circumstance at the commissioning of our main LNG plant we brought in temporary power to just have as a security blanket. And these are kind of the same power units that we show up -- situation where you got a hurricane. So these things are really quick to set up. It is an extra cost, but we just wanted to make sure we hit our mid-May date on startup. So we don't think we're going to run very long, but we're just hooking those up now and they're ready to go for the commissioning.

[Wayne Lam, RBC]

Okay, perfect. Thank you. And then, can you provide a bit more detail on the land access and permitting issues in Mexico? And was any of that related to the additional concessions required as I thought that there was some consideration paid to [Fresnillo] (ph) a couple of years ago?

[Richard Young, President & CEO]

Thanks, Wayne. I will turn the question over to Dave to answer.

[David Ponczoch, CFO & Corporate Secretary]

Yes. Wayne, on the Fresnillo this is not related. So this is at San Agustin, this is related to land access within the pit. And we had the expectation over the last few years to be able to get that access and we haven't been able to achieve that. Once we get the land access, we do need to have permit approvals. Right now the permit approval process is very slow in Mexico and so we thought it prudent to remove this from the mine plan, because it's now something that's very near term. So we took that out there and then at La Colorada we received the concessions associated with the Veta Madre pit, but the government's been very slow to actually grant those. And so we decided to take those ounces out of the production profile at this point. As Marc mentioned, in the El Castillo pit, we wanted to take a look at the trade-off between open pit versus underground given the exploration results that we've had there.

[Wayne Lam, RBC]

Okay, great. Thank you. And then maybe just last one. I was just wondering what the care maintenance costs are on the Mexican operations? And is there any potential for a complete shutdown in Mexico, just given the higher cost in the mine life? And then for the $6 million budget in reclamation, is that El Castillo only or is that -- or what would be the broader reclamation liability across the Mexican operations?

[Richard Young, President & CEO]

So thanks Wayne. I'll answer the first part. It is possible that there will be a pause later this year. That's what we've currently budgeted for. Now when you step back and you look at the company, the focus had been on harvesting cash flows from Mexico to fund Magino. So there wasn't the reinvestment in some of the growth opportunities within Mexico. So there are some opportunities particularly with La Colorada, as Marc mentioned, but also with San Augustine. So we will be evaluating those. We're not going to commit a lot of capital to it. But again, the country is challenged and permits are challenging to receive. So there is a possibility that those operations will go on in care and maintenance for some period of time.

And with that, I'll then turn the call over to Dave to talk about the cost of that and as well as the overall reclamation liability in Mexico. Dave?

[David Ponczoch, CFO & Corporate Secretary]

Yes. Thanks, Rich. Wayne, in Note 14 of financials, we've got our total reclamation and we break out a little -- the current versus non-current. I don't have the -- what portion of that is Mexico. In front of me, it's -- I believe it's roughly $25 million of this amount shown, but I can give that to you later on.

[Wayne Lam, RBC]

Okay, great. Thank you very much. Thanks a lot guys. Appreciate the update and best of luck with the upcoming completion of Magino.

[Richard Young, President & CEO]

Thanks Wayne. Appreciate that.

[Marc Leduc, COO]

Thanks Wayne.

[Operator]

[Operator Instructions] There are no further questions at this time. Please proceed.

[Richard Young, President & CEO]

Well, Joelle, thank you very much. And I'd like to thank everybody again for joining today's call and I apologize again for the late release of our results. And 2022 was a very challenging year for the company, as you can see through the financial statements that were released earlier today. But the future is bright. We believe Magino is going to be one of the top 10 gold mines in Canada and we are excited about Florida Canyon. So it's a better path forward. It's been a challenging 2022, but things are improving. So with that, we're open to any further questions that anybody may have, please feel free to reach out to us and have a good day everybody. Bye now.

[Operator]

Ladies and gentlemen, this concludes your conference call for today. We thank you for participating and ask that you please disconnect your lines.