Hello and good afternoon, dear shareholders and stakeholders and colleagues. Welcome to Auriant Mining interim result update, H1 year 2022. My name is Danilo Lange. I'm the CEO of the company. With me is, as usual, Vladimir Vorushkin, our CFO, and Petr Kustikov, our COO. We do it in the normal Zoom format, which will last approximately 20 minutes, with the Q&As at the end. Your microphones are muted. Please use the chat possibility to send us your questions. Our agenda for today is, as usual, the production and KPIs for the production, the sales update done by Vladimir, and the financial update by Vladimir, and I will do the outlook at the end of the presentation. Let's start with the current gold production update. Petr, the floor is yours. Thank you, Danilo. Good afternoon, ladies and gentlemen. Let me present Tardan's H1 gold production results of 2022. Within the six months, almost 193,000 tons of ore were processed through the CIL plant. The gold grade in the processed ore was estimated at 2.46 grams per ton compared to 2.24 grams per ton in the previous year. The minor decrease shows that we've got the access to higher grade ore at deep levels of Pravoberezhny. As you also can see on the slide, the recovery rate in the six months amounted to 90% compared to 92.9% in previous year. The minor decrease caused by the fact that we reached the deep levels of Pravoberezhny where the ore has higher grade, but recovery rate is a bit lower as the ore mineralogy changes with depth. Anyway, the recovery rate in the six months was not less than designed recovery rate, and as a result, we got 421.9 kilograms of gold produced in the CIL plant in H1 of 2022, which is in line with our production targets. In regards to our set KPIs, I would like to emphasize again that we tend to catch up with the waste stripping at Tardan deposit, providing an access to the ore bodies which then will be our main source for further feeding of the CIL plant. The reason of postponing the waste stripping at Tardan was reported before, but for those who are not aware of it, let me repeat it again. There was the license restriction imposed on Tardan deposit in 2020, which was successfully cleared by end of the year. This gave us the possibility to start stripping in 2021. The fact that we didn't strip waste at Tardan in 2020, of course, affected our waste stripping activity to be more intensive from 2021 till 2024. The stripping volume in the six months of 2022 amounted to 1.1 million cubic meters. That is 43% higher than in 2021, but exactly in line with our production plan. As you can see on the slide, the ore mined in six months of 2022 amounted to 178,000 tons at the average grade of 2.42 grams per ton. As I mentioned, despite we faced some different types of ore at deep levels of Pravoberezhny, we did manage well our processing side of things to be able to achieve the plant designed recovery rate we targeted. Summarizing our CIL plant output, 193,000 tons of ore were processed through the CIL plant at the designed recovery rate of 90%. As a result, we fully achieved our production targets with the total hard rock gold production in six months of 2022 amounted to 421.9 kilograms. Regarding our alluvial gold mining at Staroverinskaya area, due to delayed start as late ground defrosting and heavy rains in June, we were able to produce only 1.2 kilograms in the six months of 2022. Concluding the production results, I'm glad to say that the properly balanced workflow during H1 of 2022 allowed us to be in line with our production forecast and produce 423 kilograms or 13,600 ounces of gold. The average cash cost per ounce increased by 43% from $7.5 per ounce in H1 2021 to $1,011 per ounce in H1 2022. This was mainly driven by the ruble's strengthening, higher stripping activity, and speculative price increase from the local suppliers. Thank you, Petr. We continue with the Tardan sales update. Thank you, Danilo. Dear stakeholders, I'm glad to say a few words about half-year results. I will start with the sales. The slide illustrates both the sales volume and selling price effects on Tardan sales. Tardan sales volume for the H1 of 2022 is 435 kilograms, which is 49 kilograms or 13% higher than last year hard rock gold sales. At the same time, the average selling price increased by 3% from $1,821 per ounce in the H1 of 2021 up to $1,878 per ounce in the H1 of 2022. In the H1 of 2022, Tardan diversified its gold sales channels by signing new gold sales contracts with refineries and obtained an export license to be able to sell gold abroad in May. Also, Auriant has been selling gold to a new bank at discounts that were much lower than those offered by alternative sales channels. As far as the next slide is concerned, it deals with the income statement. Auriant sales reached $26.3 million in the H1 of 2022, which is 15% rise versus the comparative period. As noted in the previous slide, 11% of that rise was driven by the increase in the sales volume, the rest by the average gold price increase. In the H1 of 2022, the group's cost of sales decreased to $13.6 million, down 8% from the H1 of the previous year. Please note that the major driver behind this decrease was a non-cash change in stripping assets, $1.3 million, and higher carrying value of work in progress, including gold produced but not sold, which was $2.77 million because of the stronger Russian ruble during the Q2 of 2022. Cash operating expenses increased by 36% to $15.5 million. These were primarily driven by high volumes of stripping works and rise in prices for mining contractors, materials, spare parts and fuel. Please note that most of the group's operating expenses are denominated in Russian rubles in the Russian local currency, and significant Russian ruble strengthening against the dollar during the Q2 2022 had a negative effect on the group's margin. The higher stripping volumes at Ore zone 6 and Ore body 26 at Tardan's deposit resulted in increase in stripping asset, which had a positive effect of $1.3 million in the income statement. High cash operating costs as well as lower volume of hard rock gold produced during the H1 of 2022 led to the growth of the cash cost per ounce. The average cash cost per ounce produced at Tardan increased to $1,011 per ounce in the H1 of 2022. As for the EBITDA in the H1 of 2022, it amounted to $13.5 million, up from $10.6 million for the previous period. The major drivers behind EBITDA will be addressed in the next slide. Before moving to the net profit, I would like to say that the company's financial expenses represented by interest on loans and borrowings and lease liabilities amounted to $1.7 million in the H1 of 2022, which is a 7% decrease versus the previous period. Interest expenses reduced due to the repayment of bank loans, as well as reduction in the average interest rate on bank loans from 4.9% in the previous year to 4.1% in the H1 of 2022. In the H1 of 2022, current income tax charge amounted to $1.9 million as per Russian tax accounting records. However, it was offset by the deferred tax income on the translation of Tardan's accounts denominated in the Russian local currency into United States dollars, which is a functional currency of the group. This resulted in the tax expense of $465,000 in the income statement. As a result of the above notes, the group recognized net profit of $9.7 million, which is 2.6 times as much as compared to the previous period. If we move to the next slide, we'll actually see the major drivers behind the EBITDA changes versus the previous year. These are the volume and gold price effect, which in total represent $3.5 million because of higher selling volumes and higher selling price, as well as the change in work in progress, which was $3.6 million versus the previous year. This was partially offset by higher production costs because of higher stripping works because of speculative prices earlier this year and ruble strengthening in the Q2 of 2022. Yeah, the biggest part is basically the ruble strength. Ruble strengthening. Yeah. Correct. If we move to the next slide, our cash flow statement. As already mentioned, gold sales revenues increased by $3.4 million, or 15% due to higher gold sales volume 835 kilograms in the H1 of 2022 versus 392 kilograms in the previous year. Tardan Gold paid $2 million in income taxes in the H1 of 2022. Last year, we didn't pay any profits taxes because the income tax liability was fully offset with tax loss carried forward. Net cash flow generated from operating activities decreased by $3.3 million and amounted to $7.4 million in the reporting period in the comparative versus $10.7 million in the comparative reporting period. Our positive cash flows were used to decrease the debt burden. In particular, we repaid $5.1 million in principal of our bank loan. We also repaid $1.1 million of principal amount and interest to KFM. As far as interest payments, we paid $400 thousand, and we also paid lease to the extent of $300 thousand. Thank you, Vladimir. As you have heard, we believe that we have managed through the H1 year, despite all the issues, we are facing quite well. I'm thankful for the team and for everybody involved in this to steer us through this difficult times. Nevertheless, you have heard from Vladimir that we have a huge negative effect already in regards to the ruble-dollar rate, which we obviously cannot influence. We have a very disciplined way of dealing with our budget and our overall household. We see very challenging times ahead, and if the dollar-ruble stays on that level as is right now, it will be even more challenging. Nevertheless, the company expects to achieve its annual production guidance, as mentioned before, with around 800 kilograms, and a TCC to be approximately around $1,280 in 2022. Other long-term forecasts is very difficult to make right now, but you understand for what reasons we can't do that. Yeah, but the increase in the quality and the extent of gold reserves, we are also trying to do exploration drilling, which we continued in the H1 year. As soon as we have those results, we will let you know, particularly in the Baisyutskiy area in Tardan. There is news to come, I think in the next couple of months. In view of this geopolitical situation, we hope and estimate that Kara-Beldyr will still commence as targeted in Q 2024, which is obviously still subject to the electrical power being obtained. We are hopeful, despite the background of this current situation, yeah, that these regional programs, particularly supported from the federal budget, will still be funded and that this power line will be built. The company diversified its gold sales channels, as Vladimir also mentioned before. We have also received a gold sales export license. We haven't made use of that yet, but we have that opportunity and that door now open. Tardan Gold also continued selling gold through a new bank here in Russia with some lower discounts than offered from some others. Yeah, in general, we are also happy that we as Auriant Mining AB are able to open a new bank account to make sure that all the company's obligations are held with our suppliers on the Swedish side of the company. If you now have any questions, please use the chat format, and I will try to reply with the colleagues accordingly. Question from Tobias: Do you see any new loans or share issues to finance operations or initiatives such as drilling preparations for KB? Well, we don't see this yet, but as I mentioned before, the huge negative impact we have because of the ruble might force us into something like this or to look into all possible options. At the moment, we are managing, but I don't want to exclude that possibility. Another question from Tobias: What does the current plan for financing KB look like when the project kicks off? Selling stock, loans, share issue, others? Yes, obviously we are trying to do this via loan agreements with existing banks. We have shown that we are a good debt payer, and they have also seen that we can run an operation even in critical times, so I hope we manage everything through that way. Yeah, the current timeline. Some of our steps, we can actually not do anything. Of course, we are still continue to prepare. We actually have enough time to prepare anything in regards to road permitting, forestry permitting, et cetera, et cetera. We are on our side actually feeling quite comfortable with the time plan. As I said, we are very, very much now dependent, not reluctant, on the federal decisions and that these regional development programs continue to be supported and kicked in despite the current situation. Decisions have been made. The decisions have been made last year that the investments will be done. We don't see yet this speedy movements we would wish to see. At the moment they are preparing, and they from the regional government always tell us that they are preparing, so we hope not to receive any negative information. Discount. From Anders: Can you put numbers on the discount that you have when you sell your gold today? Well, it's very difficult to answer that question, but I can tell you that in the market, there is a spread in between 5%-15%. Also to Tobias, if you had the same question, maybe I add just one thing. Luckily, we are not selling these huge amounts of gold. If you would most likely be in a situation to sell many tons or millions of ounces of gold on a monthly or quarterly basis, most likely we would have a different discussion. We are in this sense maybe a bit more lucky that our quantities are not that big. Okay. If there is any other questions, please write them now. Otherwise, I would actually like to thank you to still being with us and be our supportive shareholders in such dire times. I hope soon we can operate again in a normal environment, in a normal way of dealing nationally and also internationally. As we all understand, we are under big stress levels right now, complying with all the national and international restrictions and sanctions. It is a very fine line in between of that. Thank you very much. Otherwise, I would stop the presentation right now. Thank you, and all have a good day, and we see you in three months' time. Thank you. Thank you.
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