Ann: Reporting Third Quarter 2023 Results, page-4

The main reason is that production for the next couple of years has been downgraded by 10-15%. Their growth ounces at Copler have effectively been deferred to 2026 because they are now planning on building a higher recovery grind/leach conventional processing circuit, whereas previously they were planning on using heap leaching. Grind/CIL has recovery >80% where heap leaching is ~60%. Obviously there is capex associated with building a grind/leach circuit that the market hadn't anticipated. They did say that the capex will however displace (push out) longer dated Copler growth projects (C2).

They are also saying they've had considerable growth in the reserve (originally 1.7Moz), which is driving the alternate processing route. I'm not sure if the market has factored that growth in the reserve. So maybe you get a reserve above 2Moz, and then you recover ~35% more gold out of it.

So the production downgrade at Copler is a 'good' one in the sense that it is increasing overall value (NPV) of the business. The market doesn't care for the longer term right now. The AISC will be higher because of the lower production.

In among that Copler news as also a deferral of some ounces at Marigold due to mine plan changes. Again this seems to be just driven by best value rather a loss of business value. Seabee production is also forecast to go lower as they aren't mining as much higher grade material. That should have been factored in by the market already.

The 2023 ounces are forecast to be at the lower end of guidance, which again should have been mostly factored in by the market already.

Overall the reaction here seems to be a little overdone. If it was just the 2023 earnings missing maybe the stock would be down 5-8%, but with the extra downgrade of the next few years you get the extra. Partly I think there was an expectation that they would go into a mode of harvesting some of the cashflow from Copler, and now the market just sees capex for the next few years with little growth in ounces, and higher cos.