Itafos Reports Q3 2023 Results
TSX-V: IFOS
News Release
ITAFOS REPORTS Q3 2023 RESULTS
HOUSTON, TX – November 8, 2023 – Itafos Inc. (TSX-V: IFOS) (the “Company”) reported today its Q3 2023 financial and operational
highlights. The Company’s financ ial statements and man agement’s discussion and analysis fo r the three and nine months ended
September 30, 2023 are available under the Company’s profile at www.sedarplus.com and on the Company’s website at www.itafos.com.
All figures are in thousands of US Dollars except as otherwise noted.
CEO Commentary
“We are pleased to report solid financial results and the continu ation of our strong safety and operational performance in Q3 2 023. For
the nine months ending September 30, 2023, we reported revenues of $346.5 million and adjusted EBITDA of $102.3 million.
During the third quarter, we continued to successfully execute our business plan and made significant progress on a number of k ey
company objectives. Work intensified and continues on our Husk y 1 / North Dry Ridge (“H1/NDR”) capital project with the projec t
remaining on budget and on schedule for 2026 operations. Addition ally, the Company entered into a new five-year monoammonium
phosphate sales agreement (the “MAP Offtake Agreement”) with J. R. Simplot Company, an international food and agriculture company.
The agreement, which commences on January 1, 2024, provides visibility around our MAP sales volumes over the medium term.
During Q3 2023, we saw prices rebound and moderate off the lows of Q2 2023, reflective of demand improvement and tighter US supply
fundamentals. We expect to see these conditions continue into 1H of 2024. The Company has maintained its full year EBITDA guidance
(narrowing the bottom of the range), based off these improved market conditions.
Finally, the process to explore and evaluate various strategic alternatives to enhance value for all Itafos shareholders announced by our
Board in Q1 2023 continues.” said G. David Delaney, CEO of Itafos.
Q3 2023 Key Highlights
revenues of $110.8 million
Adjusted EBITDA of $19.7 million 1
net income of $3.1 million
basic earnings of C$0.02/share
free cash flow of $(9.7) million 1
9M 2023 Key Highlights
revenues of $ 346.5 million
Adjusted EBITDA of $ 102.3 million
net income of $ 51.7 million
basic earnings of C$ 0.37/share
free cash flow of $ 54.2 million
September 30, 2023 Key Highlights
trailing 12 months Adjusted EBITDA of $ 152.4 million 1
net debt of $ 62.9 million 1
net leverage ratio of 0.4x 1
Narrowed FY 2023 Guidance
Adjusted EBITDA guidance of $125-135 million
net income guidance of $50-60 million
basic earnings guidance of C$0.34-0.41/share
maintenance capex guidance of $15-25 million 1
growth capex guidance of $35-45 million 1
free cash flow guidance of $65-85 million
1Adjusted EBITDA, trailing 12 months Adjusted EBITDA, maintenance capex, growth capex, net debt, net leverage ratio and free cas h flow are each a
non-International Financial Reporting Standards (“IFRS financial measure”). For additional information on non-IFRS and other fi nancial measures, see
“Non-IFRS financial measures” below.
Q3 and 9M 2023 Market Highlights
Diammonium phosphate (“DAP”) New Orleans (“NOLA”) prices averaged $507/st in Q3 2023 compared to $761/st in Q3 2022, down
33% year-over-year, and averaged $550/st in 9M 2023 compared to $805/st in 9M 2022, down 32% y ear-over-year. Specific factors
driving the year-over-year decline in DAP NOLA were as follows:
weakened demand in response to historically high 2022 phosphate prices;
the softening of global ammonia and sulfur prices;
the softening of historic ally high crop prices; and
increased phosphate exports out of Russia and China.
Q3 2023 Financial Highlights
For Q3 2023, the Company’s financial highlights were as follows:
revenues of $110.8 million in Q3 2023 compared to $153.2 million in Q3 2022;
Adjusted EBITDA of $19.7 million in Q3 2023 compared to $50.7 million in Q3 2022;
net income of $3.1 million in Q3 2023 compared to $8.1 million in Q3 2022;
basic earnings of C$0.02/share in Q3 20 23 compared to C$0.06/share in Q3 2022; and
free cash flow of $(9.7) million in Q3 2023 compared to $53.6 million in Q3 2022.
The decrease in the Company’s Q3 2023 financial performance compared to Q3 2022 was primarily due to lower realized prices as a
result of softer global market conditions partially offset by higher sales volumes and lower input costs.
The Company’s total capex2 spend in Q3 2023 was $16.3 million compared to $8.7 million in Q3 2022 with the increase primarily due to
the development activities at H1/NDR at Conda.
9M 2023 Financial Highlights
For 9M 2023, the Company’s financial highlights were as follows:
revenues of $346.5 million in 9M 202 3 compared to $458.0 million in 9M 2022;
Adjusted EBITDA of $102.3 million in 9M 2023 compared to $174.6 million in 9M 2022;
net income of $51.7 million in 9M 2023 compared to $85.4 million in 9M 2022;
basic earnings of C$0.37/share in 9M 20 23 compared to C$0.58/share in 9M 2022; and
free cash flow of $54.2 million in 9M 2023 compared to $149.2 million in 9M 2022.
The decrease in the Company’s 9M 2023 financial performance compared to 9M 2022 was primarily due to lower realized prices, partially
offset by lower input costs.
The Company’s total capex2 spend in 9M 2023 was $37.2 million compared to $30.0 million in 9M 2022 with the increase primarily due
to development activities at H1/NDR at Conda
September 30, 2023 Highlights
As at September 30, 2023, the Company had trailing 12 months Adjusted EBITDA of $152.4 million compared to $224.8 million at th e
end of 2022 with the decrease primarily due to the same factors that resulted in lower revenues, which were partially offset by lower input
costs at Conda.
At September 30, 2023, the Company had net debt of $62.9 million compared to $88.3 million at the end of 2022, with the reduction due
to the repayment of principal debt outstanding from free cash fl ows generated, which was partially offset by lower cash and cas h
equivalents. The Company’s net debt as at September 30, 2023 was comprised of $36.4 million in cash and $97.8 million in debt (gross
of deferred financing costs). As at September 30, 2023 and the end of 2022, the Company’s net leverage ratio was 0.4x
As at September 30, 2023, the Company had liquidity 3 of $76.4 million comprised of $36.4 millio n in cash and $40.0 million in undrawn
borrowing capacity under its $80 million asset-based revolving credit facility (the “ABL Facility”).
2 Total capex is a non-IFRS financial measure. For additional information on non-IFRS and other financial measures, see “Non-IFRS financial measures”
below.
3 Liquidity is a non-IFRS financial measure. For additional information on non-IFRS and other financial measures, see “Non-IFRS financial measures”
below.
Q3 2023 Operational Highlights
Environmental, Health, and Safety (“EHS”)
Sustained EHS performance, including no re portable environmental releases and two recordable incidents, which resulted in a
consolidated total recordable incident frequency rate (“TRIFR”) of 0.58.
Conda
Produced 87,976 tonnes P 2O5 at Conda in Q3 2023 compared to 84,908 tonnes P 2O5 in Q3 2022 with the increase primarily
due to higher throughput resulting from reduced downtime;
Generated revenues of $106.8 million at Conda in Q3 2023 co mpared to $145.3 million in Q3 2022 with the decrease primarily
due to lower realized selling prices, which were partially offset by higher sales volumes. Elevated prices in the prior year driven
primarily by the Russian invasion of Ukraine and the three-month lagged pricing impact on Conda’s MAP contract;
Generated Adjusted EBITDA at Conda of $23.7 million in Q3 2023 compared to $54.2 million in Q3 2022 with the decrease
primarily due to the same factors that resulted in lower revenues, which were partially offset by lower input costs.
Advanced H1/NDR capital activities including earthworks and re lated water management features for the rail loadout and haul
road, improvement of the maintenance shop, and existing road relocation;
On September 7, 2023, the Company a nnounced that it entered into the MAP Offta ke Agreement with J.R. Simplot Company,
an international food and agriculture company. The Company will sell 100% of the MAP produced by Conda to the J.R. Simplot
Company during the term of the MAP Offtake Agreement, which will commence on January 1, 2024, with a term of five years.
The MAP Offtake Agreement will replace th e existing MAP sales agreement dated Ja nuary 12, 2018, bet ween the Company
and Nutrien Ltd. (“Nutrien”), which is set to expire on December 31, 2023; and
On September 7, 2023, the Company enter ed into a new ammonia supply contract wi th a subsidiary of Nutrien, which will
commence on January 1, 2024, with a term of two years. The new ammonia supply contract will replace the current supply
contract dated January 12, 2018, between the Company and Nutrien, which is set to expire on December 31, 2023.
Q3 2023 Other Highlights
Produced 25,851 tonnes of sulfuric acid at Arraias in Q3 2023 compared to 32,935 tonnes in Q3 2022 with the decrease primarily
due to sulfuric acid lower demand in Q3 2023;
Produced 4,553 tonnes P 2O5 of Direct Application Phosphate Rock (“DAPR”) at Arraias in Q3 2023 compared to 0 tonnes P2O5
in Q3 2022 with the increase due to the first full quarter of DAPR production and sales per Fertilizer Restart Program; and
Generated Adjusted EBITDA at Arraias of $0.1 million loss in Q3 2023 compared to $0.2 million gain in Q3 2022 with the
decrease primarily due to lower realized su lfuric acid prices, which were partially offset by lower cost of goods sold and
commencement of DAPR sales.
9M 2023 Operational Highlights
EHS
Sustained EHS performance, including no reportable environmental releases and four recordable incidents, which resulted in a
consolidated TRIFR of 0.58.
Conda
Produced 253,311 tonnes P 2O5 at Conda in Q3 2023 compared to 254,300 tonnes P2O5 in Q3 2022;
Generated revenues of $335.7 million at Conda in Q3 2023 co mpared to $441.7 million in Q3 2022 with the decrease primarily
due to lower realized selling prices;
Generated Adjusted EBITDA at Conda of $115.8 million in Q3 2023 compared to $185.3 million in Q3 2022 with the decrease
primarily due to the same factors that resulted in lower revenues, which were partially offset by lower input costs;
On April 24, 2023, the Company announced the Record of Decision for the H1/NDR mine development project. The H1/NDR
project comprises primarily of civil activities and infrastructure development. Mineral resources from H1/NDR are expected from
20264 onward, providing an uninterrupted supply as Rasmussen Valley Mine reaches the end of its useful life;
On May 8, 2023, the Company received the Notice to Proc eed (“NTP”) for the H1/NDR mine development project. Upon receipt
of the NTP, the Company commenced capital activities associated with the mine development project;
Advanced H1/NDR capital activities including earthworks and related water management features for the rail loadout and haul
road, improvement of the maintenance shop, and existing road relocation;
Advanced development, including engineering of key infrastruc ture and progression of related magnesium oxide reduction
initiatives to enhance SPA production and sales volumes, including continuation of test work;
On September 7, 2023, the Company a nnounced that it entered into the MAP Offta ke Agreement with J.R. Simplot Company,
an international food and agriculture com pany. The Company will sell 100% of the MAP produced by Conda to J.R. Simplot
Company during the term of the MAP Offtake Agreement, which will commence on January 1, 2024, with a term of five years.
The MAP Offtake Agreement will replace th e existing MAP sales agreement dated Ja nuary 12, 2018, bet ween the Company
and Nutrien, which is set to expire on December 31, 2023; and
On September 7, 2023, the Company enter ed into a new ammonia supply contract wi th a subsidiary of Nutrien, which will
commence on January 1, 2024, with a term of two years. The new ammonia supply contract will replace the current supply
contract dated January 12, 2018, between the Company and Nutrien, which is set to expire on December 31, 2023.
9M 2023 Other Highlights
Produced 54,988 tonnes of su lfuric acid at Arraias in 9M 2023 compared to 63,135 tonnes in 9M 2022 with the decrease due to
the sulfuric acid plant shutdown for required maintenance in April and May;
Produced 4,553 tonnes P 2O5 of DAPR at Arraias in 9M 2023 compared to 0 tonnes P 2O5 in 9M 2022 with the increase due to
the first full quarter of DAPR production and sales per Fertilizer Restart Program;
Generated Adjusted EBITDA at Arraias of $0.7 million loss in 9M 2023 compared to $0.1 million loss in 9M 2022 with the
decrease primarily due to lower realized sulfuric acid prices, which were partially offset by higher sales volumes and lower cost
of goods sold and selling, general and administrative expenses;
On June 28, 2023, the Company filed the NI 43-101 te chnical report for the Farim Phosphate Project; and
The Special Committee of the Board of Direc tors continues to evaluate strategic alternatives that may be available to Company
in an effort to enhance shareholder value.
Market Outlook
Prices in 2023 have moderated off the historically high prices in 2022, which continued to drive a reduction in Q3 2023 prices. Due to the
nature of our MAP sales contract, with sales price determined by a three-month lagging average, t he impact of this decrease, co upled
with lower SPA reset pricing, impacted the Company’s performance in Q3 2023. Through Q3 and now into Q4 2023, the Company has
seen robust demand return to the market, resulting in improved pricing and tightened North American phosphate fertilizer supply, which
is expected to remain through the first half of next year.
Specific factors the Company expects to support strength in the global phosphate fertilizer markets through the end of 2023 are as follows:
no significant phosphate supply capacity additions;
strong demand for phosphates in North Americ a following years of under application;
exceptional farmer affordability due to higher crop prices; and
ongoing phosphate export restrictions fr om China and reduced exports from Morocco.
4 Timeline for H1/NDR based on management es timates and subject to certain assumpti ons, including successful permitting and deve lopment activities.
The H1/NDR mine life extension is based on a Preliminary Econom ic Assessment (“2019 PEA”) included in the Conda Technical Repor t (as defined
below). The 2019 PEA on the H1 and NDR properties is preliminary in nature and includes inferred mineral resources that are considered too speculative
geologically to have the economic considerations applied to them that would enable them to be categorized as mineral reserves, and there is no certainty
that the 2019 PEA will be realized. Readers are referred to t he Conda Technical Report for the applicable qualifications and as sumptions in connection
with its 2019 PEA.
Financial Outlook
The Company narrowed its guidance for 2023 as follows:
(in millions of US Dollars Projected
except as otherwise noted) FY 2023
Adjusted EBITDA $ 125‐135
Net income 50‐60
Basic earnings (C$/share) 0.34‐0.41
Maintenance capex 15‐25
Growth capex 35‐45
Free cash flow 65‐85
Business Outlook
The Company continues to focus on the following key objectives to drive long-term value and shareholder returns:
improving financial and operational performance;
deleveraging its balance sheet;
executing on the requisite infrastr ucture and civil works required for the mine development for H1/NDR; and
conducting the strategic review process (including evaluating potential strategic alternatives for the Company as outlined in the
news release dated March 13, 2023).
About Itafos
The Company is a phosphate and specialty fertilizer company. The Company’s businesses and projects are as follows:
Conda – a vertically integrated phosphate fertilizer business lo cated in Idaho, US with production capacity as follows:
- approximately 550kt per year of monoa mmonium phosphate (“MAP”), MAP with micronutrients (“MAP+”), superphosphoric
acid (“SPA”), merchant grade phosphoric acid (“MGA”) and ammonium polyphosphate (“APP”); and
- approximately 27kt per year of hy drofluorosilicic acid (“HFSA”);
Arraias – a vertically integrated phosphat e fertilizer business located in Tocantins, Brazil with production capacity as follows:
- approximately 500kt per year of single superphos phate (“SSP”) and SSP with micronutrients (“SSP+”); and
- approximately 40kt per year of excess sulfuric acid (220kt per year gross sulfuric acid production capacity);
Farim – a high-grade phosphate mine project located in Farim, Guinea-Bissau;
Santana – a vertically integrated high- grade phosphate mine and fertilizer plant project located in Pará, Brazil; and
Araxá – a vertically integrated rare ear th elements and niobium mine and extraction plant project located in Minas Gerais, Brazil.
As at September 30, 2023, the Company has completed the wind down process of the Mantaro mine project (located in Junin, Peru).
The Company is a Delaware corporation that is headquartered in Houston, TX. The Company’s shares trade on the TSX Venture
Exchange (“TSX-V”) under the ticker symbol “IFOS”. The Company’s principal shareholder is CL Fertilizers Holding LLC (“CLF”). CLF is
an affiliate of Castlelake, L.P., a global private investment firm.
For more information, or to join the Comp any’s mailing list to receive notification of future news releases, please visit the C ompany’s
website at www.itafos.com.
Forward-Looking Information
Certain information contained in this news release constitutes forward-looking information, including statements with respect to: the timing
for commencement of operations at H1 / N DR; the expected resource life of H1 / ND R; the sources of f unding to be used for the
development of H1 / NDR; and economic and mark et trends with respect to the global agri culture and phosphate fertilizer markets . All
information other than information of histor ical fact is forward-looking information . Statements that address activities, event s or
developments that the Company believes, expects or anticipates will or may occur in the future include, but are not limited to, statements
regarding estimates and/or assumptions in respect of the Company’s financial and business outlook are forward-looking information. The
use of any of the words “intend”, “anticipate”, “plan”, “continue”, “estimate”, “expect”, “may”, “will”, “project”, “should”, “would”, “believe”,
“predict” and “potential” and similar expressions are intended to identify forward-looking information.
The forward-looking information contained in this news release is based on the opinions, assumptions and estimates of management set
out herein, which management believes are reasonable as at t he date the statements are made. Those opinions, assumptions and
estimates are inherently subject to a variety of risks and uncert ainties and other known and unknow n factors that could cause a ctual
events or results to differ materially from those projected in the forward-looking information. These include the Company’s expectations
and assumptions with respect to the following: commodity prices; operating results; safety risks; changes to the Company’s mine ral
reserves and resources; risk that timing of expected permitting will not be met; changes to mine development and completion; fo reign
operations risks; changes to regulation; environmental risks; t he impact of adverse weather and climate change; general economi c
changes, including inflation and foreign exchange rates; the actions of the Company’s competitors and counterparties; financing, liquidity,
credit and capital risks; the loss of key personnel; impairment risks; cybersecurity risks; risks relating to transportation and infrastructure;
changes to equipment and suppliers; adverse litigation; changes to permitting and lic ensing; geo-political risks; loss of land title and
access rights; changes to insurance and uninsured risks; the potential for malicious acts; market volatility; changes to technology; changes
to tax laws; the risk of operating in foreign jurisdictions; and the risks posed by a controlling shareholder and other conflic ts of interest.
Readers are cautioned that the foregoing list of risks, uncertainties and assumptions is not exhaustive.
Although the Company has attempted to identify crucial factors that could cause actual actions, events or results to differ materially from
those described in forward-looking information, there may be other factors that cause actions, events or results not to be as anticipated,
estimated or intended. Additional risks and uncertainties affecting the forward-looki ng information contained in this news rele ase are
described in greater detail in the Company’s current Annual Information Form and current Management’s Discussion and Analysis
available under the Company’s profile on SEDAR+ at www.sedarplus.com and on the Company’s website at www.itafos.com. There can
be no assurance that forward-looking information will prove to be accurate, as actual results and future events could differ materially from
those anticipated in such information. The reader is cautioned not to place undue reliance on forward-looking information. The Company
undertakes no obligation to update forward-l ooking statements if circumst ances or management’s estimates, assumptions or opinions
should change, except as required by applicable securities law. The forward-looking information included in this news release is expressly
qualified by this cautionary statement and is made as of the date of this news release.
This news release contains future-oriented financial information and financial outlook information (together, “FOFI”) about the Company’s
prospective results of operations, includi ng statements regarding expected adjusted EBITD A, net income, basic earnings per shar e,
maintenance capex, growth capex and free cash flow. FOFI is subject to the same assumptions, risk factors, limitations and qualifications
as set forth in the above paragraph. The Company has included the FOFI to provide an outlook of management’s expectations regarding
anticipated activities and results, and such information may not be appropriate for other purposes. The Company and management
believe that the FOFI has been prepared on a reasonable basis, reflecting management’s reasonable estimates and judgements;
however, actual results of operations and the resulting financial results may vary from the amounts set forth herein. Any financial outlook
information speaks only as of the date on which it is made and th e Company undertakes no obligation to publicly update or revis e any
financial outlook information except as required by applicable securities laws.
NEITHER THE TSX-V NOR ITS REGULATION SERVICES PROVIDER (AS THAT TERM IS DEFINED IN THE POLICIES OF THE TSX-
V) ACCEPTS RESPONSIBILITY FOR THE ADEQUACY OR ACCURACY OF THIS NEWS RELEASE.
For further information, please contact:
Matthew O’Neill
Itafos Investor Relations
713-242-8446
Scientific and Technical Information
The scientific and technical information contained in this news release related to Mineral Resources for Conda and Farim has be en
reviewed and approved by Jerry DeWolfe, Professional Geologist (P.Geo.) with the Association of Professional Engineers and
Geoscientists of Alberta. Mr. DeWolfe is a full-time employee of WSP Canada Inc. and is independent of the Company. The scientific and
technical information contained in this news release related to Mineral Reserves for Conda and Farim has been reviewed and approved
by Edward Minnes, Professional Engineer (P.E.) licensed by the State of Missouri. Mr. Minnes is a part-time employee of WSP USA Inc.
and is independent of the Company. The Company’s latest technical report in respect of Conda is entitled, “NI 43-101 Technical Report
on Itafos Conda and Paris Hills Mineral Projects, Idaho, USA,” with an effective date of July 1, 2019 (the “Conda Technical Report”) and
is available under the Company’s website at www.itafos.com and under the Company’s profile on SEDAR+ at www.sedarplus.com
Non-IFRS Financial Measures
This press release contains both IFRS and certain non-IFRS m easures that management consi ders to evaluate the Company’s
operational and financial performance. Non-IFRS measures are a numerical measure of a company’s performance, that either include or
exclude amounts that are not normally includ ed or excluded from the most directly co mparable IFRS measures. Management believes
that the non-IFRS measures provide useful supplemental information to investors, analysts, lenders and others. In evaluating non-IFRS
measures, investors, analysts, lenders and others should consider that non-IFRS measures do not have any standardized meaning under
IFRS and that the methodology applied by t he Company in calculating such non-IFRS measures may differ among companies and
analysts. Non-IFRS measures should not be considered as a substitute for, nor superior to, measures of financial performance prepared
in accordance with IFRS. Definitions and reconciliations of non-IFRS measures to the most directly comparable IFRS measures are
included below.
DEFINITIONS
The Company defines its non-IFRS measures as follows:
Non-IFRS
measure
Definition Most directly comparable IFRS
measure
Why the Company uses the
measure
EBITDA Earnings before interest, taxes,
depreciation, depletion and
amortization
Net income (loss) and operating income
(loss)
EBITDA is a valuable indicator of
the Company’s ability to generate
operating income
Adjusted EBITDA EBITDA adjusted for non-cash,
extraordinary, non-recurring and other
items unrelated to the Company’s core
operating activities
Net income (loss) and operating income
(loss)
Adjusted EBITDA is a valuable
indicator of the Company’s ability
to generate operating income
from its core operating activities
normalized to remove the impact
of non-cash, extraordinary and
non-recurring items. The
Company provides guidance on
Adjusted EBITDA as useful
supplemental information to
investors, analysts, lenders, and
others
Trailing 12
months Adjusted
EBITDA
Adjusted EBITDA for the current and
preceding three quarters
Net income (loss) and operating income
(loss) for the current and preceding three
quarters
The Company uses the trailing 12
months Adjusted EBITDA in the
calculation of the net leverage
ratio (non-IFRS measure)
Total capex Additions to property, plant, and
equipment and mineral properties
adjusted for additions to asset
retirement obligations, additions to
right-of-use assets and capitalized
interest
Additions to property, plant and
equipment and mineral properties
The Company uses total capex in
the calculation of total cash capex
(non-IFRS measure)
Maintenance
capex
Portion of total capex relating to the
maintenance of ongoing operations
Additions to property, plant and
equipment and mineral properties
Maintenance capex is a valuable
indicator of the Company’s
required capital expenditures to
sustain operations at existing
levels
Growth capex Portion of total capex relating to the
development of growth opportunities
Additions to property, plant and
equipment and mineral properties
Growth capex is a valuable
indicator of the Company’s capital
expenditures related to growth
opportunities.
Net debt Debt less cash and cash equivalents
plus deferred financing costs (does not
consider lease liabilities)
Current debt, long-term debt and cash
and cash equivalents
Net debt is a valuable indicator of
the Company’s net debt position
as it removes the impact of
deferring financing costs.
Net leverage ratio Net debt divided by trailing 12 months
Adjusted EBITDA
Current debt, long-term debt and cash
and cash equivalents; net income (loss)
and operating income (loss) for the
current and preceding three quarters
The Company’s net leverage ratio
is a valuable indicator of its ability
to service its debt from its core
operating activities.
Liquidity Cash and cash equivalents plus
undrawn committed borrowing
capacity
Cash and cash equivalents Liquidity is a valuable indicator of
the Company’s liquidity
Free cash flow Cash flows from operating activities,
which excludes payment of interest
expense, plus cash flows from
investing activities less cash growth
capex
Cash flows from operating activities and
cash flows from investing activities
Free cash flow is a valuable
indicator of the Company’s ability
to generate cash flows from
operations after giving effect to
required capital expenditures to
sustain operations at existing
levels. Free cash flow is a
valuable indicator of the
Company’s cash flow available
for debt service or to fund growth
opportunities. The Company
provides guidance on free cash
flow as useful supplemental
information to investors, analysts,
lenders, and others.
EBITDA, ADJUSTED EBITDA AND TRAILING 12 MONTHS ADJUSTED EBITDA
For the three months ended September 30, 2023 and 2022
For the three months ended September 30, 2023, the Company had EBITDA and Adjusted EBITDA by segment as follows:
(unaudited in thousands of US Dollars) Conda Arraias
Development
and
exploration Corporate Total
Net income (loss) $ 9,790 $ (1,235) $ (192) $ (5,285) $ 3,078
Finance (income) expense, net 1,423 (204) — 3,088 4,307
Current and deferred income tax expense
(recovery) 1,878 — — (2,289) (411 )
Depreciation and depletion 10,630 681 6 40 11,357
EBITDA $ 23,721 $ (758) $ (186) $ (4,446) $ 18,331
Unrealized foreign exchange (gain) loss — 672 (68) — 604
Share-based payment expense — — — 223 223
Transaction costs — — — 488 488
Other expense, net — 6 3 — 9
Adjusted EBITDA $ 23,721 $ (80) $ (251) $ (3,735) $ 19,655
(unaudited in thousands of US Dollars) Conda Arraias
Development
and
exploration Corporate Total
Operating income (loss) $ 13,094 $ (761) $ (257) $ (4,487) $ 7,589
Depreciation and depletion 10,630 681 6 40 11,357
Realized foreign exchange gain (3) — — 1 (2 )
Share-based payment expense — — — 223 223
Transaction costs — — — 488 488
Adjusted EBITDA $ 23,721 $ (80) $ (251) $ (3,735) $ 19,655
For the three months ended September 30, 2022, the Company had EBITDA and Adjusted EBITDA by segment as follows:
(unaudited in thousands of US Dollars) Conda Arraias
Development
and
exploration Corporate Total
Net income (loss) $ 29,564 $ (684) $ 151 $ (20,943) $ 8,088
Finance (income) expense, net 1,422 (52) — 21,393 22,763
Current and deferred income tax expense
(recovery) 14,550 — — (4,437) 10,113
Depreciation and depletion 8,706 546 4 46 9,302
EBITDA $ 54,242 $ (190) $ 155 $ (3,941) 50,266
Unrealized foreign exchange (gain) loss — 652 (427) 408 633
Share-based payment expense — — — 252 252
Transaction costs — — 60 300 360
Other (income) expense, net — (280) 2 (577) (855 )
Adjusted EBITDA $ 54,242 $ 182 $ (210) $ (3,558) $ 50,656
(unaudited in thousands of US Dollars) Conda Arraias
Development
and
exploration Corporate Total
Operating income (loss) $ 45,589 $ (364) $ (274) $ (4,163) $ 40,788
Depreciation and depletion 8,706 546 4 46 9,302
Realized foreign exchange gain (53) — — 7 (46 )
Share-based payment expense — — — 252 252
Transaction costs — — 60 300 360
Adjusted EBITDA $ 54,242 $ 182 $ (210) $ (3,558) $ 50,656