TKO Group Holdings, Inc. Price & Performance (TKO)

Thank you, Carmen. Welcome everyone and thank you for joining Taseko's twenty twenty four fourth quarter annual results conference call. The news release and regulatory filing announcing our financial and operational results was issued yesterday after market close, and is available on our website at tisicomines.com and on SEDAR Plus I Am Joined Today In Vancouver by Tasekos, President and CEO, Stuart McDonald Taseko's Chief Financial Officer, Bryce Hammond and our C Chief Operating Officer, Richard Trumbulli.

As usual, before we get into opening remarks by management, I would like to remind our listeners that our comments and answers to your questions this information by its nature is subject to risks and uncertainties As such, actual results may differ materially from the views expressed today. For further information on these risks and uncertainties, I encourage you to read the cautionary note that accompanies our fourth quarter MD and A and the related news release. Risk factors particular to our company. These documents can be found on our website and also on CedarPlus. I would also like to point out that we will use various non GAAP measures during You can find explanations and reconciliations regarding these measures in the related news release. And finally, all dollar amounts we will discuss today are in Canadian dollars unless otherwise Following opening remarks, we will open the phone lines to analysts and investors for I will now turn the call over to Stuart for his remarks. Thanks, and good morning, everyone. Thanks for joining us for the fourth quarter and annual earnings As you can tell, I'm struggling with the bad boy, so I'm going to give slightly abbreviated remarks today.

And pass the call over to Richard to talk about our operations and projects in more detail. But just a couple of reflections looking back on the last year, we're very happy with the progress that we've made. Across our business. I think that Chipotle was a busy and at times quite challenging year. We've had million disruptions [indiscernible] We had a labor strike for eighteen days in June. And we overcame all of those challenges successfully. Showing a strong fourth quarter and strong annual financial results. We've also reached strides of Florence, Construction is advancing smoothly. And that's soon to become our second producing operation. And through all of that, we've also maintained a solid balance We opportunistically refinanced our bonds earlier in the year and we ended 2024 with over three thirty million available liquidity and that's after significant capital expenditure at Florence through the year. Taking a closer look at our financial results we generated $2.02 $24,000,000 of adjusted EBITDA and $233,000,000 of cash flow from operations. Those results are notable improvements over 2023 as a result of a slightly higher copper price and also our increased stake in Gibraltar. As we stepped up to 100% ownership in March, and that was obviously a barrier.

Accretive transaction for us. So before I lose my voice completely, I'm going to now pass the call to Richard Complicks, Thanks, Stuart. Gibraltar produced 106,000,000 pounds of copper and 1,400,000 pounds of molybdenum in 2024. Scheduled project work and maintenance plus the unexpected labor strike resulted in lower mill operating hours, for the year amounting to roughly 15,000,000 pounds of lost copper production. That is roughly equivalent to the shortfall from 2023 production levels and we should be able to get those bounce back in 2025 with normalized mill availability. The operation finished the year with a solid quarter. Producing 29,000,000 pounds of copper in Q4 at a cash cost of US2.42 dollars per pound. Mill throughput averaged 89,700 tons per day, a exceeding the design capacity of 85,000 tons per day That was actually the best quarter in Gibraltar's history as we benefited from softer ore in the Connect Mill recoveries in the quarter were impacted from the transition ore, which has higher oxide content we continue to mine the upper benches of the connector pit. We expect to have mined our way through this material by the second half of this year. Molly production of nearly 600,000 pounds in Q4 was highest quarter since 2021.

The Connector pit has better moly grades than the Gibraltar Pit, so we expect production to remain at the current levels for 2025 and combined with continued strong moly prices, will provide us with a valuable byproduct credit which was $0.42 per pound in the fourth quarter. Going forward with no major mill downtime or plans, in 2025, We expect we are looking to return to the life of mine average production levels. Our guidance is £120,000,000 to £130,000,000 for the year but it is important to note that the production profile is weighted to the second half of the year. We expect roughly a forty-sixty split between the first half and second. The first quarter will be the weakest quarter of the year as we initiate a new pushback in the And during this period, mine ore will be supplemented with low grade stockpiles. Ore. Head grades in the first quarter will be below 0.2% then we expect to see some improvement in the second quarter. And then in the second half of the year, we should see head grades quite a bit higher than our 0.25% reserve grade. And actually higher than we have mined a sustained basis in quite a few years.

So we just need to get through the first quarter and then we'll see a steady ramp up of production. The SX EW plant at Gibraltar, which has been idle for nearly ten years, is currently being refurbished and ready for research. There was an oxide cap on the connector pit and we have recharged the reach pads with with this ore.

We expect to restart the SXW plant in the second quarter of this year which will provide some incremental production on top of copper concentrate production. This year, we would expect between 3,000,000 pounds to 4,000,000 pounds of capital production and then going forward, that should increase to 4,000,000 pounds to 6,000,000 pounds per year. So an important future revenue stream [indiscernible] Construction is progressing smoothly and on schedule. We provided a thorough construction update a few weeks ago, so there isn't too much new information to provide today. Construction of surface and construction and well field drilling activities [indiscernible] continuing to advance smoothly on schedule and in line with our previous cost guidance. The overall project completion today is a little over 60% and we're now about ten months away from first production which will be a very significant milestone for the company. Has been 105 hundred and $55,000,000 This quarter will be a peak construction and spending that activity and spending will begin to slow down through the fourth quarter when we transition into operations. There will be a ramp up period for Florence which will be most of 2026. And we anticipate producing 40,000,000 pounds to 50,000,000 pounds in 2026, and for 2027.

Production levels should be up to 80,000,000 pounds or higher It is a very exciting time for us but we still have a lot of work ahead of us. Fully executing at Florence means ramping up the 85,000,000 pound annual production capacity To finish off, I wanted to give a quick update on our longer term projects. Our Yellowhead project represents a major growth opportunity for Taseko's North American copper business and we'll be advancing and we will be advancing project permitting this year. It's an interesting time in Canada with the threat of U. S. Tariffs, and here in BC, the government is clearly focused on how to respond and bolster our One of the initiatives that BDC has underway is a focus on shortening permitting timeline. This is an initiative that could benefit Yellowhead and an opportunity that we are monitoring very closely.

We're aiming we're also aiming to publish an updated technical report for Yellowhead in the second quarter of this year. The current technical report is five years old now and the metal price assumptions we use were $3.1 per pound copper dollars $13.50 per ounce gold and $18 per ounce silver which are low below current long term price estimates. So we will update metal prices and also update capital and operating costs in the new report.

Another significant change is the new Canadian tax credit available for copper mine development and this will be incorporated into the updated technical report as well, and we expect we'll have a very positive impact on the project economics. Finally, just a quick update on New Prosperity. If you recall, we've been in a dialogue with the Chukot Nation and the BC provincial government. These discussions had made meaningful progress last summer, but were paused due to the BC provincial election in October. We have recently reengaged and remain optimistic that we can reach a to that dialogue. And now I'll turn the call over to Bryce.

Thank you, Richard and Stuart. Maybe I'll start and reflect further on the twenty twenty four year and then cover some of our quarterly financial highlights. For the year, we had sales of one hundred and eight million pounds of copper which generated revenues of $6.00 $8,000,000 which is the highest TCEQO's ever reported.

And that can be attributed to our growth in Gibraltar Canal only 100% of it coupled with a healthy average copper price of four seventeen pounds in the year. We posted a GAAP net loss of $13,000,000 for the twenty twenty four year or $0.05 loss per share However, on an adjusted basis, we had $57,000,000 of net income or $0.19 per share, which was a $0.04 per share increase over the prior year. Couple of items to note, the weaker Canadian dollar is created an unrealized loss on our U. S. Dollar denominated bonds and other debt. That totaled CAD52 million for the year. It's We adjust for that in our adjusted earnings. The offset to that, of course, is our investment of our U. S. Dollars into currency translation.

And OCI. So there's kind of an accounting mismatch So we normalize for that and given the weakness in the Canadian dollar, this move was more significant in the year $90,000,000 of our costs were expensed for site care and maintenance due to the labor strike we had $2,500,000 in June. As well as the completion of our primary crusher relocation project That project totaled $16,000,000 That included costs of the demolition of the old station outlays for the physical move, And then there was a non cash write off of some Conveyor equipment, that was in the fourth quarter, which which was made redundant with So these capital project costs are all expensed under IFRS and we adjusted for those in earnings as well. Total site costs at Gibraltar, they totaled $414,000,000 in the year. That's on a 100% basis. We do provide a note on that in our MD and A That was actually $17,000,000 lower than 2023 due to the lower input costs, notably diesel prices were lower than the prior year. And the impact of our labor strike in June that reduced our site operating costs in the second quarter. Capitalized stripping costs, it was $32,000,000 in the year and that was $23,000,000 less than last year.

And we do expect capitalized stripping cost increase in 2025. And that's associated with the connector pit push. Richard mentioned that's occurring in the first half of this year. So we'll have capitalized stripping more in line with twenty twenty three run rates around $40,000,000 to 50,000,000 with most of that in the first half of the year. Costs on a per pound basis, they were $2.66 per pound U. S. And that was higher in 2023 and that was due to the lower production levels we saw in 2024 with our mill downtime.

But we also had less capitalized threat. That was offset, of course, by improved volume by product credit and then lower off property costs and lower input And as we mentioned, there will be significantly more moly production in 2025 in the connector pit, which will help keep our C1 costs down. In the second half of twenty twenty four, we started to benefit from new sales contracts we signed at Gibraltar Those had notably lower TCRC charges For the year, TCRC is account for $0.09 per pound of off property costs and with new offtake contracts covering 2025 and 2026, we expect our average TCRCs to be actually slightly below zero for those years. Going forward.

For the quarter, we achieved $56,000,000 in adjusted EBITDA. And that was on £27,000,000 of sales. Production finished the year strong and we ended with a bit more inventory. That increased to £4,000,000 at the end of the year.

Adjusted earnings was $10,500,000 or $0.02 per share. At Florence, the project is progressing on plan as we've highlighted and will hit peak construction spending this quarter, Q1 of twenty twenty five, Capital spend was US58 million dollars in the fourth quarter.

And our total spend to date on the Florence commercial facilities US155 million We expect to incur US20 million dollars per month through this first quarter and then begin to taper We ended the year with $173,000,000 of cash and we have our $110,000,000 revolving credit facility that's currently undrawn. So that gives us our total liquidity of [indiscernible] And finally, as a reminder, given the volatility in the markets, notably in copper price as well, we do have copper price protection in place. For 2025. A minimum price of $4 per ton. These are collar contracts, so they have a ceiling price and that ceiling price average is $5.20 per pound. So those collars and price protection should provide stable operating margins for Gibraltar and theatre progresses And we can of course always look to extend copper price protection in if the market's are favorable and they continue on the current positive trends. So with that operator, I'll hand it back to you and open the phone lines for questions. Thank you. Thank you so much. And as a reminder to our audience to ask the Okay. We do have a question. One moment please. Comes from the line of Alex Bedwani with Canaccord Securities.

Please proceed.

Hi, guys. And thanks for taking my questions.

Just a couple. The first one is, I just wanted to know what was behind the highest sustaining CapEx spend at Gibraltar in the fourth quarter? And what do you think for FY 2025? And then the second piece was just around Florence. [indiscernible] have you put in place any contracts the acquisition of ACID, so that you're ready to solidify the fields when the drilling is complete in the second quarter? Yes. I'll take the first half of that question, Alex. Just regarding the safekeeping capital. Really nothing of note. Sometimes it's it's really just due to the timing of certain repairs and maintenance and replacements of engines and other components on our mobile fleet at the Gibraltar.

So I wouldn't highlight really anything that that specific there. In capital projects, we do separate from sustaining capital our capital project costs and we did have some write off of equipment that I mentioned for about $4,000,000 I think going forward, we expect it to be in a more ordinary sort of levels, and that sort of $20,000,000 to $30,000,000 of interest sustaining capital. And again, most of that's focused around our [indiscernible] Thanks, Greg. The second question and maybe I'll pass that to Richard. He can talk about the assets [indiscernible] [indiscernible] [indiscernible] asset suppliers traders in The U. S. And there continues to be great interest in providing and the site, And we'll be issuing an RPD here this quarter and start formalizing securing future asset supply with that RFP, that's the process we're undertaking. Okay, fantastic. Thanks, Richard. Just one more.

How has it been looking so far this quarter in terms of throughput at Gibraltar?

Are you still seeing it pretty high because of the soft [indiscernible] Yes. Gibraltar throughput ages to be strong. Connector is softer as we highlighted and saw in Q4 and we'll continue to see that here into this year. But as we highlighted, production is weighted to the second half of the year and Q1 will be our worst quarter just due to the fact we're supplementing [indiscernible] Yes. I think that's been well flagged. Okay. Thanks guys. Appreciate it. Yes.

Thank you.

Thank you. Our next question is from Duncan Hay with Panmour Liberum.

Please proceed.

Yes, thank you. A couple of questions. First one just on the well costs. I saw the yes, you updated on the number of wells you'd put in Florence just how the costs were tracking and the sort of the rates and how that was looking versus your forecast going forward. And then the second one I missed the end of Alex's question, so he may have asked this, but just about acid what the situation was going to be for acid and securing that and how pricing was looking in the region as well?

Yes. Regarding the drilling, drilling performance [indiscernible] a strong area of focus for the site team and could you look for opportunities to keep improving overall performance and we've been quite happy with how things have been progressing and continue to see opportunities for improvement and continue to refine kind of the efficiency and cost associated with putting in wells. So quite pleased with how that's performing and that will serve us well on a long term basis. Regarding asset. Sorry, just for you to get on to the asset. Is the plan still to sort of transition to doing that in house eventually? For the drilling? Yes. Eventually, it will be something we would look at look and assess about bringing in house. But for the the near term here, we definitely would remain utilizing external parties to provide the drilling activity and we have a strong owners team that we've recruited and put in place through the construction here, which will stay on into operations because I I described drilling at Florence really is the mining activity at conventional site. So we need to have a strong management team overseeing the drilling activity, but we will be relying on third parties in the near term here.

Okay. Thanks.

Thank you. As I see no further questions in queue, I will turn it back to management for final remarks.

Okay.

Thanks everyone and we look forward to speaking again at the end of our first quarter and reviewing our progress.

And with that, we conclude today's program. You may now disconnect.