Solidcore Resources (POYYF) H1 2024 earnings summary

Executive summary

• Revenue rose 79% year-over-year to $704 million in 1H 2024, driven by higher gold prices and increased sales volumes from inventory release and strong operating performance.

• Adjusted EBITDA increased 73% to $346 million, with a margin of 49%, reflecting higher sales and commodity prices.

• Net earnings from continuing operations were $238 million, down from $272 million due to prior year forex gains; underlying net earnings rose 72% to $243 million.

• The company completed the divestment of its Russian business, resulting in a net cash position of $357 million at period end.

• Capital expenditures reached $107 million, up 25% year-over-year, mainly for the Ertis POX project.

Financial highlights

• Gold equivalent production increased 18% year-over-year to 252 Koz; sales rose 56% to 321 Koz due to de-stockpiling at Kyzyl.

• Total cash costs (TCC) were $960/GE oz, up 10% year-over-year, within guidance; AISC remained stable at $1,281/GE oz.

• Average realized gold price was $2,267/oz, up 17% year-over-year and above the market average.

• Free cash flow from continuing operations (excluding Russian business disposal) was $240 million, up from $101 million.

• Net operating cash flow from continuing operations increased 86% to $344 million.

Outlook and guidance

• Full-year 2024 production guidance reaffirmed at 475 GE Koz, with TCC of $900-1,000/oz and AISC of $1,250-1,350/oz.

• Management does not expect H2 2024 to match H1 results due to non-repeatable de-stockpiling, currency headwinds, inflation, and logistical constraints.

• Capital expenditures for 2024 expected to exceed $285 million, $60 million above original guidance, mainly for green energy and Ertis POX.

• Investment program for 2025-2029 will exceed $1 billion, focused on Ertis POX.