Thank you, Melanie. Thank you all for joining us and welcome to our third quarter conference call. With me today is Jason LeBlanc, our CFO and Henry Marsden, our Senior VP of Exploration.
Let me start by thanking again, all our employees, contractors, suppliers, and their family for their effort keeping our operations safe in these difficult times.
First, as always let’s talk about our health, safety, environment and corporate responsibility.
Our total recordable injury frequency rate was 0.4, representing a 31% improvement.
Our social license to operate index, which is based on surveys conducted on our host communities continues to show an increase in trust across all our operation. Evidence indicates that our COVID-19 response and engagement is a significant contributor to the improvement.
We have, as I said on the Q2 call, engaged closely with our host communities since the early stage of the pandemic to understand their needs and help them address those needs. We’ve provided various donation along with thousands of masks, gloves, and sanitizer, respirators, and other medical equipment and critical supplies. And we will continue to do everything we can to support our communities, partner through this challenging period.
During the quarter, the Jacobina mine was named one of the “10 Best Places to Work in the programs of Bahia” by The Great Place to Work Institute. The Canadian Malartic Mine received two awards.
The first The F.J. O’Connell Trophy for the Quebec – from the Quebec Mining Association, which recognized the operations for improvement in the operations, health and safety records compared to the industry average.
The second was the Sustainable Development and Environment Award from the Val-d’Or Chamber of Commerce.
We are proud of these recognitions, which tell us we are doing the right things in critical areas of our business, like health, safety, sustainability, environmental stewardship and talent management.
Turning now to the Q3 highlights. We delivered another strong quarter, both operationally and financially. We produced 201,772 ounces of gold during the quarter supported by standout quarter from Jacobina, Canadian Malartic, El Peñón, and Minera Florida. Silver production was just above 3 million ounces due to an exceptionally strong performance from El Peñón. GEO production was 250,466 ounces exceed in plan as a result of strong gold and silver production. Cash costs of $723 per GEO and all-in sustaining costs of $1,096 per GEO were in line with annual guidance. Sustaining capital increase during the quarter as expected after declining in Q2 while Cerro Moro and Canadian Malartic ramp up following temporary suspensions due to COVID-19-related restriction.
We expect Q4 to be our strongest production quarter of the year and as such cost per ounce will decrease. Net earning during the quarter was $55.6 million or $0.06 per share. Adjusted net earning was $92.9 million or $0.10 per share. Cash flows from operating activities were $215 million and $237 million on an adjusted basis. Cash flows were at a multiple high and that includes higher production periods, where we own operation that has since been sold or discontinued. Cash flows from operating activities before net change in working capital were $199 million or $221.1 million on an adjusted basis. Cash flow before dividends and debt repayment were $156.8 million.
As of September 30, the company had cash and cash equivalent of $474.2 million, an increase of $149.4 million from the end of Q2.
We have significant cash – sufficient cash on hand and liquidity through our current balances and incoming cash flow to fully manage the business and form growth without having to borrow. This includes, but is not limited to obligation related to the Jacobina plant expansions, development of the Odyssey underground project at Canadian Malartic, generative exploration, development of the integrated Agua Rica and Alumbrera project, and further balance sheet improvements, all while having excess fund to dedicate to possible other opportunities and dividend increases. Subsequent to the quarter, we have announced that we will be increasing our annual dividend by 50% to $10.50 per share effective in Q4. That is 425% higher than our dividend level just 18 months ago. Jason will talk more about our dividend and dividend policy during his remarks. Subsequent to the quarter, we also increased production guidance.
Our GEO forecast for this year is now 915,000 ounces compared to the previous guidance of 890,000 ounces. This includes a 1% increase to our previous gold production forecast and a 6% increased to our previous silver forecast.
Looking at our operation, Jacobina had another strong quarter with production just above 44,000 ounces. The higher production and resulted from the mill, again, achieving a higher than planned steady state throughput of 6,800 tons per day. I’ll provide an update on the mines optimization project in a moment. At El Peñón, gold production was strong during Q3 while silver production greatly exceeded plan due to the processing of higher grade silver ore.
While silver grades are expected to normalize in Q4, we anticipate higher gold grade in the quarter due to increased underground production and lower stockpile reclaim as well as mining from higher grade gold grade sectors. And either Malartic posted a strong production of 76,398 ounces of gold due to higher throughput and feed grade. Barnat produced 13,305 ounces of precommercial production gold during the quarter and its successful ramp up resulted in the Barnat deposit declaring commercial production on September 30. The Cerro Moro mine and processing plant is operating at full capacity as of September 30th, following that temporary government restriction related to COVID-19 and the subsequent ramp up. The plant has now returned to its optimized 1,000 tons to 1,150 tons per day, which is expected to be maintained going forward. The transition to underground ore with higher grade is expected to continue in Q4 and derives substantially higher production and lower costs. Minera Florida continued to perform well with result driven by higher feed grade and increased on process, largely due to continuing improvement in productivity with contribution from Pataguas and Don Leopoldo zones.
Turning to our strategic development and project updates. At our Agua Rica project in Catamarca, Argentina, we continue to advance the integration of Agua Rica with Alumbrera and expect to complete the integration in Q4; after which, the integrated project would be managed as a combined operation. To reiterate our excitement for this project, this is a very unique opportunity we have in front of us. Agua Rica is one of the largest undeveloped copper gold deposit in the world and the integration with the existing Alumbrera mine creates a derisk brownfield project, which reduce capital requirement and reduce environmental footprint, remain on track for our feasibility study results in 2021.
As I mentioned, Q3 throughput at Jacobina averaged 6,800 tons per day. This was the second straight quarter that the mine achieved this milestone.
While it’s well above the target rate of 6,500 tons per day that we set for Phase 1 of the Jacobina project. We identified opportunities to further optimize the result and recoveries achieve in the Phase 1 with a modest investment. Work commenced in Q3 for the expansion of the gravity concentration circuit, with the objective of optimizing gold recovery at the higher throughput. commissioning is scheduled for mid-2021.
As considerable technical work, which reports the variability of the Phase 2 expansion, has already been completed. The company intends to advance the project following the completion of the feasibility study in mid-2021. The permitting process is also underway. Like mentioned before the Phase 2 expansion will increase throughput to 8,500 tons per day and take the annual gold production to 230,000 ounces. At Canadian Malartic construction of the surface infrastructure, offices, and the ramp portal to the underground project is well underway.
With the ramp development into Odyssey and East Malartic scheduled to start in November. The exploration ramp will allow tighter definition drilling on the Odyssey, East Malartic, and East Gouldie from underground drill platforms, and eventually be used for mining and haulage of ore from the upper zones. This will allow us in potential production from Odyssey South providing higher-grade mill feed to complement the open pit production. The underground project, as you may have seen from our press release this week, is continuing to advance with excellent drill results reported from East Gouldie.
We are very encouraged by the results and excited by the potential for this project.
Our exploration team is doing an outstanding job; both at our existing operation and on our generative project and Henry will talk more about this in a moment.
As a compliment to the advancement of these internal opportunities, we’ll evaluate the acquisition or investment in prospective, exploration opportunities that align with our objectives for capital allocation and financial results, jurisdiction, quality, geology and operational expertise. Such opportunity would meet minimum requirement to achieve mineral reserve and mineral resource inventories of at least 1.5 million ounces supporting a mine life of at least eight years at 150,000 ounces per year production rate.
Before handing off to Henry, I also want to highlight that on October 13, we began trading on the Main Market of the London Stock Exchange, adding another senior exchange for trading to our existing listing in Toronto and New York, and further expanding our public market profile.
We’re excited to be entering this market and look forward to sharing our story in the UK and Europe, and building relationship with the investment community there. And with that, I will turn it over to Henry to provide an update on exploration.