Q4 and FY 2024 production results

Solidcore Resources plc

Q4 and FY 2024 production results

Solidcore Resources plc (“Solidcore” or the “Company”) announces fourth-quarter 2024 production results, successfully exceeding full-year production guidance by 3% and delivering US$ 1.3 billion in revenue.

HIGHLIGHTS

• For the third consecutive year, there were no lost time injuries recorded among the Company’s employees and contractors. Accordingly, days lost due to work-related injuries (DIS) remained at zero.
• Gold equivalent (“GE”) output for the full year was largely stable year-on-year (y-o-y) at 490 Koz and 3% above the original production guidance of 475 Koz. Quarterly production was down by 18% y-o-y to 119 Koz due to a planned decline in gold grade attributable to processing of the more complex refractory ore at Kyzyl.
• GE sales in 2024 increased by 17% y-o-y to 536 Koz and outpaced the production level because in H1 the Company managed to unwind significant volumes of Kyzyl concentrate stockpiles that accumulated in 2023 on the back of logistical challenges. GE sales in Q4 amounted to 122 Koz with a 14% y-o-y decline attributable to a lag between concentrate shipment to refinery and Dore production at Varvara as well as persistent issues with railcar shortages on the eastbound railroads affecting Kyzyl sales.
• Revenue from ongoing operations for FY 2024 increased by 49% to US$ 1.3 billion, which was attributable to higher gold prices and sales. Q4 revenue was up by 10% y-o-y to US$ 322 million driven by the sustained favourable prices despite weaker quarterly sales.
• The Company expects full-year Total Cash Costs (“TCC”) and All-in Sustaining Cash Costs (“AISC”) to be within the announced guidance range of US$ 900-1,000/GE oz and US$ 1,250-1,350/GE oz, respectively. CAPEX is expected to be largely in line with the original guidance of US$ 225 million.
• Net Cash position as of the end of 2024 stood at US$ 374 million versus net cash of US$ 357 million as of the end of H1 2024. The balance reflects positive free cash flow from operations offset by the outflow related to the Company’s announced M&A transactions.
• In 2024, the Company achieved significant milestones in advancing the Ertis Hydrometallurgical Plant (Ertis POX project), in line with its long-term strategic plan for the Company. These included the formal project approval by the Board of Directors, assembly and delivery of the autoclave to the transhipment port for winter storage, commencement of procurement activities for processing equipment and long-lead items, and obtaining positive expert reviews on the detailed design for the construction of temporary buildings and structures. The project remains on track with the delivery of the autoclave and the commencement of full-scale construction proceeding as planned.
• The Company will present its strategy implementation progress and full-year financial results over a webcast at the end of March 2025. Participation details will be announced closer to the event date.

2025 OUTLOOK

• In FY 2025, the Company expects to deliver 470 Koz of GE output. The expected y-o-y decrease is driven by the planned grade and recovery declines at both the Kyzyl and Varvara operations. The Company will start redirecting Kyzyl high-carbon concentrate to a third-party POX.
• Costs are estimated to be in the ranges of US$ 1,000-1,100/GE oz for TCC and US$ 1,350-1,450/GE oz for AISC[1]. A y-o-y increase is expected mostly due to the grade and recovery decrease, and persisting domestic inflation, which will offset expected positive effects from Kazakh tenge (“KZT”) devaluation. The estimate remains contingent on the KZT/USD exchange rate, which has a significant effect on the Company’s local currency denominated operating costs.
• Capital expenditures are expected to be approximately US$ 300 million. The y-o-y increase will be driven by the planned investment in Ertis POX construction (which is expected to account for US$ 160 million of capital expenditure in 2025) and construction of solar and gas power stations at Varvara. Sustaining CAPEX will be represented by further expansion of a tailings storage facility at Kyzyl, fleet replacement at Komar, exploration at the Elevator deposit (Varvara hub) and construction of a fire-assay laboratory in Karaganda, Kazakhstan.

In Q4 2024, the y-o-y decrease in production at Kyzyl was driven by the planned decline in gold grade attributable to processing of the more complex refractory ore according to the mining schedule. This further affected concentrate production and grade, and hence its toll-processing volumes and Dore output at the third-party POX. The Company managed to maintain stable gold recovery rate after implementing certain technological solutions at the flotation plant.

Annual gold output at Kyzyl recorded a marginal increase of 1% y-o-y to 320 Koz, on the back of higher volumes of concentrate shipments to offtakers in H1 2024.

Stripping volumes started to decrease due to the gradual and systematic reduction of open-pit mining operations. The Company is planning to start underground ore mining in 2030.

In Q4, Varvara recorded a 10% y-o-y increase in production, reaching 45 Koz driven by the implementation of technological solutions improving recovery and a substitution of the Varvara lower-grade copper ore with larger volume of the Komar ore at the leaching circuit. This increase fully offset the reduced processing volumes at the flotation circuit.

Varvara's annual gold output remained stable at 170 Koz as higher volumes of third-party material with better grades and recovery rates which were introduced at the flotation circuit outweighed a decrease in Komar gold grade, mainly attributable to the completion of mining in the deeper northern and central sections of the open-pit.

Rock mined volumes in Q4 and 2024 surged due to resource model adjustments at Komar.

ERTIS POX

In Q4 2024, bore pile tests for the POX building were successfully completed, paving the way for the start of installation of building piles for the autoclave foundation. Pre-design work for local projects is under development. Engineering survey work is progressing according to schedule.

2025 will be an important year for the project, with the following key milestones to be achieved:

·         Completion of basic engineering and start of detailed engineering in Q2 2025;

·         Delivery and installation of the autoclave on its foundations;

·         Completion of temporary buildings and structures;

·         Commencement of full-scale construction activities and completion of the Environmental and Social Impact Assessment (ESIA);

·         Contracting main processing equipment.

The Company continues to expect to meet the major milestones as planned with the end of commissioning and first production in H2 2028.

SUSTAINABILITY, HEALTH AND SAFETY

During the reporting period, there were no lost time injuries recorded among the Company’s employees and contractors. Days lost due to work-related injuries (DIS) also remains zero. 2024 marked 7^th consecutive year with no fatal incidents at Solidcore’s operating site in Kazakhstan.

Safety remains a top priority for Solidcore as we aim to maintain zero fatalities across our operations and among on-site contractors. The Company is committed to implementing initiatives that further enhance health and safety conditions.

The Company is actively working on de-risking its energy supply alongside reduction of costs and greenhouse gas (GHG) emissions. In 2025, Solidcore is targeting construction commencement of a 23 MW solar power plant and a 40 MW gas piston power plant at Varvara. Additionally, the Board will consider the construction approval of a 17 MW solar power plant at Kyzyl. After projects commissioning, both mines will switch from purchased grid to self-generated clean energy, leading to a projected 27% reduction in the Company’s GHG emissions compared to 2023.