Q4 2022 Agnico Eagle Mines Ltd Earnings Call

Great opportunities that we're going to talk about.

On the operations side for the full year.

We had a strong year.

With regards to production meeting our guidance, but I would say more impressively costs.

Meeting the upper end slightly above the upper end of our guidance, where we had told the market. We would come out we all know that that 2022 was a tough year for inflation inflation. It was a tough year.

On the workforce side, but the company delivered quite well overall.

We had continued advancement of some key development project Odyssey Detour Lake some other key projects that we're going to talk about and we delivered all of that with the company's best safety record in 66 year history of the company. That's impressive at the same time, we repaid $225 million.

Of debt with cash as it came due and we.

Paid a dividend of <unk> 40 per share quarterly dividend, continuing which is.

At a good level.

At the same time, we increased mineral reserves by 9% to almost 50 million ounces.

So a very strong year operationally I think across the board and we will talk about the fourth quarter, where there were a few more challenges, but I am very proud of the team for what what they delivered this year.

On the strategic consolidation.

Very successful merger and integration between Agnico Eagle in Kirkland Lake that went very well I use the past tense because it's done we delivered synergies faster and in greater quantity than we are.

We would which is great and frankly the teams are working exceptionally well together and you will see that when I talk about 2023 and beyond.

Secondly, we're looking forward to the pending acquisition of Humana's Canadian assets, including most importantly, the second the other 50% of the World class melodic mine and all the potential that it has those.

Two strategic deals the consolidation.

Kirkland, and agnico and the acquisition of <unk> Canadian assets.

Our core and fundamental to our strategy, which is to consolidate the best operating regions in the world for gold mining.

Page <unk>.

And I wanted to take a minute because we talk about this a lot, but sometimes a picture is worth a thousand words.

And what we tried to show here is what this <unk> gold belt means for us It's a region about 160 by 200 kilometers.

And let's take a look at some of these numbers mineral reserves over 30 million ounces.

Resources over 30 million ounces.

Inferred resources about 20 million ounces. These numbers are about the same.

The total Nevada gold mines JV.

But in this case, we own 100% of it and we've been operating here for over 50 years.

So we think this region has a lot of potential and that's what we're going to be talking about it.

We'll be producing in excess of 2 million ounces from this region at about $800 cash cost in this region also is a fundamental part of our ability to operate we think with a strong competitive advantage and none of it.

As this is the basis for a lot of those operations and none of it again going to be between 800 900000 ounces of production. So you can see.

<unk>.

The quantum of this strategy of combining and consolidating what we've done over the last couple of years.

Now.

When we did the merger with Kirkland.

And this time last year when we had this call there was a lot of emphasis on synergies.

But we said very clearly we didn't do the merger because of synergies we did the merger because of what we saw was a huge potential to consolidate this region and leverage off our competitive advantage and what we think is one of the best places in the world.

As measured by geologic potential and political stability. So as we look forward next page. Please.

What we're going to be talking about in 2023 and going forward.

It's really where last year was about.

Integrating the companies delivering on the production guidance.

And consolidating this region 2023 is all about optimizing what we've got.

There's a lot we're working on but I'm going to hit three things and I think this is the most important page in the entire presentation.

And these are only the three biggest there are a lot of others, but <unk>.

<unk> Lake we continue to have exceptional exploration results at depth and moving west.

We are continuing to assess and Natasha and the team have done a great job already with the mill expansion. We think we can expand and we're looking at opportunities to go from 28 million tons to 30 million tons with minimal Capex investment and remember the permitting is up to 32 million tons.

And importantly, we are continuing to work we promised that we would do this by the end of this year, we're making good progress towards the potential for this mine.

To be producing over 1 million ounces a year.

For decades, and we're looking forward to continuing to work on that and seeing where we are at the end of the year and talking more about it then.

The Canadian melodic complex, we're now calling it a complex because that's what it is going to be.

We paid a fair price.

For the second half of melodic based on its current life of mine, but the reason we did the deal is because we think there's a lot more potential and we're going to talk about that a little bit we think that there is.

We have already approved an increase in exploration as soon as the deal is completed because there is a lot of exploration potential and we'll talk about that a little later, we are going to be initiating initial production in March we are sinking the shaft.

And we are assessing the potential for additional ore source at <unk>.

We think that the melodic complex between the ore available at the mine site and opportunities to bring in.

Or nearby this could be another plus 1 million ounce a year producer for decades to come.

So this is what we're trying to do in the best place.

Arguably in the world to mine.

You can see that between detour and melodic complex.

Potential each to be in excess of 1 million ounces a year for decades.

And then the third item to hit briefly is.

Using excess capacity of existing infrastructure throughout the region and leveraging.

That.

Infrastructure and this is what we mean by getting the full potential and leveraging off our competitive advantage, we're going to talk about this later, but to hit the highlights.

The assets, we will already own and are near where existing mill capacity.

Is we think theres the potential for up to 500000 ounces of additional production by 2030, starting slowly in 2024, but really picking up sort of 2008 2930. When this mill capacity comes in place.

Now in and of itself.

Think thats impressive and people talk about.

The best growth is organic growth.

This is the best of the organic growth because it's not just growth in areas, where we exist it is potentially growth.

With minimal additional capital expenditure if you can.

Bring a mine into production.

And not have to build the mill and not have to build tailings facilities, you've probably cut the capital costs of that mine in half.

And you've done it in a region.

Were you.

No it is safe to operate.

We have the best reputation in town.

Where there is men.

Minimal.

Environmental impact minimal permitting impact this really is.

The best organic growth.

It creates it generates the most money for our shareholders.

It does it with the least risk.

And it does it with the smallest environmental footprint that we believe is the future of mining not just gold mining.

But any mining.

Just quickly hitting on 2024 in the fourth quarter.

The first three quarters.

I would say were exceptional quarters from an operational perspective, we delivered above budget on production and.

And very good cost control the fourth quarter I would classify as a solid quarter.

Did have some challenges, but the team still delivered pretty well. If you think we're going to come in about the middle of our production guidance of three 2% to $3. Four so the bottom end any quarter would've been 800000 ounces and Thats, where we came in this fourth quarter at cost of 863, what I will say is.

Yes, the costs were a little bit were higher more than a little bit the costs were higher in the fourth quarter and that is a function of two things one it is a function of the full inflationary pressures.

<unk> us our team did a great job in 2022 of getting ahead of some of what we thought were going to be inflationary pressures. We did some we had.

Okay.

Bought more inventory, we put on some hedges early we did a lot of very good things that controlled costs, but we're not immune.

From inflation forever, and what Youre seeing in the fourth quarter is some of that affecting us including in particular as we had the seal.

<unk> lifted none of it.

So the fourth quarter included those full inflationary pressures, but the costs were also impacted somewhat by some operating challenges.

I'll hit key Taylor and festival first key pillar, we have a restriction.

Right now our permitting restriction on the mill throughput, we applied for the permit to go from one $6 million to $2 million.

Tons, a year that permit was approved it was appealed and right now.

We are dealing with that appeal. So we're limited to $1 6 million tons a year.

We have put in our guidance an assumption of $1 6 million tons. A year. We are optimistic it actually gets resolved in the next couple of months, but we don't know that it will so our budget is I don't want to say conservative, but it does assume the $1 6 million and if things go the way that we hope they do.

Go.

And we're optimistic they go.

We will have an ability to produce more at key pillar and probably another $30 to 40000 ounces there.

And going forward by the way because we have that restriction in place.

In our forward year guidance as well and then at Fosterville, we have a noise restriction we were in Australia I was in Australia with the team a couple of weeks ago.

We are optimistic that.

Restriction the noise restriction, which is limiting about 25% of the production at Fosterville.

We are optimistic that we will be lifted we can't guarantee it. So we have not included.

The full production at Fosterville.

But if that restriction is lifted it would be about another 50000 ounces a year. So I just wanted to point that out.

Maybe some people say, we're being a little bit too conservative on that but.

This is on speaking to the owners of the company and our job is to identify all of these issues and that's what we're doing Lauren we talked about Lora last quarter I'll talk about it again Loren has been in production for 35 years.

Fantastic mine, it's a fantastic ore body, where.

We're hitting some of the best reserve some of the best grades we've ever hit there.

But the real word about lora to sustainability.

This is a mine that's been expanded five times.

It has a huge amount of potential but the reason we've operated safely and I'm going to emphasize that word safely for 35 years and hopefully operate safely for decades more is because we've operated sustainably and sustainably includes in this case, having a team of world class.

Rock mechanics and.

Internal and external advisors, who guide us on the best way to sustainably mine this multi decade asset and they have advised.

We go to a slower mining rate the.

Our goal is still there.

We are just mining at a slower rate at depth and so the opportunity at <unk> is and frankly. This is a good thing we are going to start exploring more laterally.

You will always follow the highest grade.

<unk>, which is going down and we know the gold continues to go down.

But as we reduce the rate.

At depth, we're going to explore laterally and.

It might take a couple of years.

But we are confident that we will be able to find additional operating faces and increase the production rate again.

And then just before I flip it was a good year I want to call out to detour, which had a record year <unk> that had a record year and gold X that had a record year since since the restart next page. Please.

Yes.

Just very quickly as some of the operating and financial highlights operating margin of about $720 million in the quarter about $3 $1 billion.

Through the year, you've got all this data.

We don't need to go into any details next slide please.

And this is an impressive as well not only did we increase.

Reserves by 9%.

But equally important we increased mineral resources by 12% the mineral resources of today.

Set the basis for the mineral reserves of tomorrow, and so we're very proud that we not only increased.

Reserves, but increased resources and frankly, we think we're going to be able to continue to do this.

Over the next several years going forward and so.

At this stage, we talked about.

'twenty two we really are excited about 2023 going forward we identified.

Detour and Natascha is now going to talk about that we identified melodic Dominic is going to talk about that and then I'll talk a little bit about the potential for that additional 500000 ounces.

Towards the end of the decade Natasha.

Thank you Emma and good morning, everyone.

Provide a quick update on detour and our vision to get to 1 million ounces per year and I'll start with the mill expansion project.

To advance multiple initiatives to increase that mill throughput from 23 million to 28 million tons a year by 2025.

And the last major initiative and our plan to achieve 28 million tons was successfully completed in 2022 with the installation of.

A secondary question screen.

Relation was completed in the second half of the year.

The first line completed in Q3 in the second line completed in Q4. The initial results were very encouraging we saw a daily average throughput of equivalent to 28 million tons per year, but these rates are not sustained consistently over time yet.

So now the focus at the mill has shifted to optimizing the mill processing analyzing land caf on the highest throughput to optimize our maintenance practices and basically just improving the mills on time. So that this the highest throughput becomes more and more consistent over time and based on the work that needs to be done we see potential for <unk>.

Faster timeline that originally that.

That was expected to be achieved in 2025.

And in addition to a faster time line of getting to 28 million tons a year.

<unk> mentioned, we're also evaluating a pathway to increase the mill throughput beyond that with further optimization and and fine tuning of AML processes in our maintenance strategy as we adapt them to higher milling rates.

The mill optimization include improved process controls were also including the implementation of an expert system like we have at some of our other mill. So these initiatives have the potential to achieve a range of somewhere between 29% to 30 million tons, a year with limited capital.

And other ongoing initiatives include the screening and sorting of low grade ore with the potential to bring the throughput even higher.

And then just on the update for the underground study and initial underground mineral resources associated with the mineralization outside of the planned final limit.

And to the West is expected to be completed in the first half of 2023 and then this will be used as the basis for potential underground mining scenario that will be worked on in the second half of the year, but we expect to complete an initial technical evaluation body by year end 2023.

Moving to the next slide.

I'll briefly touch on the exploration highlights a detour in the last quarter and I'll start with the infill drilling program. This was a program completed in the saddle zone and just below the west portion of the area that you see that's highlighted in blue.

The results shown on the right side of the slide and the first bullet continues to indicate.

Wide envelope of gold mineralization.

And then just west of the infill drilling just outside of that mineral resource shell as part of the.

Expansion drilling program you will see that we continued to show a similar trend, where we had a hole that intersected wide zones with pretty high grade inclusions. This one included 10, two grams per tonne of gold over $28 9 million.

And finally, the regional drilling program also showed promise. This was this was a program that was conducted approximately $2 four kilometers west of the west pit mineral resource and it showed signs that these pockets of Goldman organization, along the Sunday late deformation zone still continues.

So all in all very encouraging results in the quarter for detour one other thing I wanted to mention is that the good exploration results discussed in prior quarters has led to the significant increase in the mineral resource reserve.

Update at year end, but the exploration highlights that I'm talking about today and in the news release only became available after the MRI Omar here.

And update.

So it's just it just still has the potential to continue.

The growth at <unk> from the from both the open pit resources in advancing the understanding of the underground upside.

And with that I'll pass the presentation onto dominant Joanna CLO, Quebec, Nunavut and yet.

Hey, good morning. Thank you in that desktop came in in the next couple of slides that would give you an update on the <unk> project as well as on the exploration infill drilling what we see and how we are going to see the developing that complex to feed.

The mill that we have.

On the production OLED <unk>.

Development ramp we are on target with with the development and we foresee to do the first blast in March so on time.

And we're going to have that <unk> 50000 ounces this year coming from the Odysseus out on the construction project everything is going well despite that.

It's time to build with the logistic and the workforce challenges, but we have very a team at site and we're proud were due with the advancement.

The challenges with the wind and the Crane that you could see on the top right of the picture.

In the last quarter, but this quarter, we are back on track with the installing this deal.

Into the shop, and we are going to be ready to do shaft thinking starting at the end of this quarter.

Maybe to give you a perspective about that where we are going to be at mid year.

With the construction of the project, which is going to be to feed also the updated study that we're going to do this year, we're going to update our PK study, but we are going to be at the at the middle of the year, where 80% of the surface construction is going to be completed so the electrical.

<unk> line the shaft.

Or let's say the head frame the garage to warehouse the paste plant phase one is going to be all completed so all of those costs going to be secured as well as the schedule and we've got to have also.

And idea or a better idea of our our mining rate into the Odyssey, south as well as the sinking rate that we're going to do into the shaft. So all of that is going to be updated through the year.

See boat, let's say.

A very good vision on where we're going ahead with the project, but everything is positive.

And on top of that we see I'm going to talk a bit about that in the next section, but we see very positive results from the infill drilling we did the first conversion with the Odyssey south at 100%.

And at the close to 200000 ounces at the this is Odessa, south, but we also see very positive infill drilling in the east <unk> right now.

If we go through this to the next slide.

There is.

Some hole that we could see here.

The middle of the East <unk> zone, which is the dark blue that let's say a year ago that was more patchy, but now with the better infield. This is taking place and we are expecting to do some conversion of that zone.

At the yearend and just to highlight some interesting all at one one kilometer below surfaces atherectomy, Italy.

It is seven six gram on 43 meters and if you'd go down 300 meter where four two gram per ton 61 meter and if you go a bit lower of that zone, where at <unk> 93 meters of two six grams per tonne. So the.

Infill drilling is confirming what we what we add what we have into our study and we also see the red the Red zone increasing.

With the inferred resources, which is going to be all included into our updated pea.

So this is let's say the first plays where it's going to be easy or easier to to bring more ounces to that Neil is within that five six kilometer long one five wide and two kilometer deep deep area.

So we're going to continue to work into focus onto drilling and a better understanding of that zone. If we zoom out at the next slide page 15 on the the entire area.

There is also other.

Potential satellite deposit like can flow LTA property, where we are going to focus on more drilling and doing more study that eventually to bring depth into the Kennedy MLR take meal, just the LTE property.

Which mean that they are kind of in fact <unk> goldfield in English.

2 million tons have been processed there.

No 2 million ounces have been processed there.

10 million tons at six six gram per tonne and that was done or need. The first 800 meters have been drilled so we're looking for.

Eventually to focus there this year, we'll focus more R&D came through deposit there is already a drill running and we are going to need to better understand what we do could we mined an open pit crown pillar there, but this is the vision that we have.

Around the Odyssey project, maybe to close I would just like to congratulate the construction team, which did last year.

Full year with the zero.

Combined frequency this is something.

Net easy to achieve but with the liquidity demonstrate the quality of the team that we have into that region and the good work that they did.

One that I am going to fast that might protect two anymore.

Thank you Dominic and thank you Natasha so if we go to the next slide please.

Let's zoom minutes, so Dominic talked about.

Additional ore that's effectively proximate to the mill.

But what this slide shows step.

Step back a little bit and we said what is the potential and again there is a lot of potential right now I'm, just talking about consolidating and optimizing the mills there is there.

There's procurement, there's a central control centers, there's a whole bunch of things we're working on but for 2023, we're focused on the thing thats going to move the needle.

Very quickly relatively speaking and if you look at the position here.

<unk> seen the Red line in the Black line, that's the road in the railway.

And over the last hundred years, where they've been mining the towns. The road. The railway has followed the Cadillac fault. It makes sense, that's where the economic.

Growth of this part of Quebec, and Ontario has been and what you can see in the purple.

Our land positions. So you can see that not only do we have a lot of land positions, we have a lot of land positions right on.

The Cadillac fault, but also importantly, where there is existing strong.

<unk> infrastructure.

Now just looking at three simple examples things, we already own mckesson near surface additional production from the <unk> zone.

Beaver.

In Kirkland Lake satellite deposits.

And what's a mark.

There is about 11000 tons.

Or that can be mined that conceptually could be milled at the <unk>.

Or lap a mill.

That's only 11000 tonnes, that's one quarter of what we expect the excess capacity to be and those 11000 tons or roughly potentially 500000 ounces a year now somebody asked us well is this a fill the mill to fill the mill are you going to.

Are you focused on IRR, what I would say is again I'll repeat number.

<unk> I was the CFO for a long time I think this way.

Obviously, if you are building.

Production and you don't have to build the mill and you don't have to build a tailings facility and you've cut the capex and half.

Our IRR return on capital roughly doubles, the maps more complicated, but it roughly doubles. So this is not just organic growth.

This is the best organic growth you can have with the best return on capital, the least risk and the least environmental.

Footprint.

Now before we move on.

And we want to leave Com, because I'm sure there's going to be a lot of questions.

It's not just these three things as impressive as detours as melodic is.

As optimizing the belt is we've had excellent.

Exploration results at Hope Bay excellent exploration results at melodic excellent exploration results of key pillar at gold exit Fosterville and it Lauren so.

We are firing I think on all cylinders.

But we are focused on things that are in.

In front of us that we're always part and I'd go back to where I started this was always part of why.

Two great companies like Kirkland and Agnico merged this is why we really wanted the second half of <unk>.

<unk> and by the way nobody else could have had the second half of melodic and delivered all of this value into it because nobody else has the land positions and advantages we had just going onto to move forward 23 to 25 production.

Moderate growth frankly about 7% by 2025 from the 2022 production.

The numbers are there.

Roughly about 335.

Im sorry, both 3.3.

<unk> mid point in 2023.

345, midpoint 2024 and.

<unk> three five mid point 2025.

Want to repeat.

These numbers assume.

Constraints at key pillar.

And at Fosterville, if we are successful in lifting those.

That's another 30 to 80000 ounces, maybe a little bit more that we can add to that and none of these numbers include any of the.

Incremental production from filling the mill now granted that will start pretty slow in 2024 and won't really buildup until 'twenty eight 'twenty nine.

But I just want people to know that that.

We think we can add potentially more to these.

Maybe just.

Ripping forward to the next page just for time.

We are going to continue to do what we do in the most responsible way that we can it's not just the right thing to do but again, if your strategy is rather than going anywhere in the world to build mines, one at a time, where we instead agnico want to focus on regions for decades.

You have to be the best.

First.

At ESG you have to be welcome in the community not just accepted but welcome and part of the community and you have to demonstrate environmental responsibility.

Because we don't want to build just one mine, we want to build several mines and I think our numbers.

As reflected by third party demonstrate that we are leaders in the industry for greenhouse gas emissions, we're leaders in the industry for freshwater usage.

As I mentioned, we had the safest year in our 66 year history, we have great relationships with local businesses, great relationships with local indigenous groups.

We really believe and we can see that we.

Working with the communities that we're in improve the quality of life.

Of the people that work with us and their families and the community that surrounds it.

We are.

Dedicated to zero carbon by 2050.

And a reduction of 30% by 2030, we're putting a lot of effort into how to get there.

And we will get there next slide please.

Yes.

<unk> financial position.

$660 million in cash $1 2 billion of Undrawn credit facility.

We paid down $250 million to $225 million of debt in 2022 as it came due you can see on the bottom left our debt profile, we expect to continue to pay that down as it comes due with cash next slide please.

We are going to we've been paying a dividend for 39 years I.

I don't know that there is any other gold mining company frankly, I don't know if theres any other mining company that's done that.

We are going to continue to pay a dividend and our dividend yield is competitive with our peers next slide please.

So in conclusion and again, we want to have time for questions because there's a lot here and theres a lot in our almost 150 page press release.

In conclusion, 2022 was a tough year for the industry.

It was a tough year for us, but I think the team did a really good job.

Three exceptional quarters, and a solid fourth quarter overall.

Overall importantly, 2022 was also a year, where we successfully integrated two great companies and.

Are going to be acquiring the second half of a world class asset in our backyard and delivering value that nobody else could.

Just stepping back it's not always easy to integrate two companies.

But I have to say I've said it before I'll say it again, it went really well and thats only because of the quality of the people involved in the cultures of both companies had.

While 2022 was a tough year it was a good year in 2023.

We are very excited about where 2022 was about consolidating 2023 is about optimizing and we are just starting to scratch the surface of the potential.

Again this time last year, we said we didn't do the merger because of the synergies even though we've delivered very well on that we did this merger because we see huge potential I hope through this presentation. We are starting to demonstrate that and again, we're just scratching the surface. So.

I will finish with how we always finish because it's our consistent strategy, which is to be a simple consistent disciplined.

A company with a proven approach to value creation based on.

Consolidating assets in Premier jurisdictions.

Businesses that make a lot of money a lot of cash flow and importantly are always per share focused.

Proven leadership with a track record.

Maintaining a strong financial position.

To provide strategic flexibility ESG is important to us.

And we will continue to endeavor to be a trusted and valued member of the communities in which we operate and which we hope to operate for decades.

The consolidation of the Abitibi gold belt is providing growth potential high quality growth potential high margin high return on capital low risk and we want to continue to build on our long history 39 years of return of capital to our owners.

And with that and thank you for your time I know, we took a little bit longer than we usually do but there was a lot here.

Operator, we will open it up for questions.

Thank you ladies and gentlemen, we will now begin the question and answer session should you have a question. Please press star followed by the one on your Touchtone phone.

To withdraw your request. Please press the star followed by the two Easter using a speaker phone. Please lift the handset before pressing any keys.

Logan Please for your first question.

Your first question comes from Fahad Tariq from Credit Suisse. Please go ahead.

Hi, Good morning, Thanks for taking my two questions, maybe just first on 2023 cost, which I think.

Maybe surprised.

Some people.

It looks like it's about 14% higher than the previous 2023 guidance about.

5% higher year over year about 9% higher than I think what consensus expectations were.

What is the market missing here when it comes to the underlying inflation what part of the story are we not seeing that's impacting the costs.

Yes, that's an excellent question for HUD and.

Part of it part of.

What you're not seeing is and I said this in previous calls costs are a function of two things. They are a function of inflation that but they're also a function really of throughput so 2023.

I'll give you an example.

At Meadowbank the stripping at Meadowbank in 2023, the ratio is 16 to one the strip ratio.

In 2024, it's going to be four or five to one.

That simple change in stripping ratio has an impact on the entire company.

Of about $37, an ounce and costs just thought one thing and it's hard for you guys to see that and I appreciate that but that's sort of your question. The other thing is clear.

Clearly.

With the restrictions simple things like 80000 ounces of restrictions once those are lifted.

Costs at those operations go down.

So youre right there is inflation, but theres things thats hard for people to see.

And those those are really the operating things and we hope to be able to outperform what we've given but we had to give cost guidance.

Where it is because we don't know if those restrictions are going to be lifted we think they will be but it would be not.

Not good of us to assume they will and then surprise you guys. All at the end of the year.

Okay Fair enough and then just a quick follow up the synergy number that's being baked into the guidance it looks like its $12 an ounce.

I think the number that was previously communicated.

The range was quite a bit higher like $30 $40 an ounce.

<unk> changed there when it comes to synergies in <unk>.

What's being included in 2023 cost guidance. Thanks.

Yes.

So.

The synergies get a little more complicated because of inflation and but what I would say is.

We are still ahead of schedule on the synergies.

The administrative synergies are easy to track.

I think an ini I had these numbers I apologize.

But the procurement synergies are on track.

So I'd have to go through and go through the number you just gave me.

And compare that to our numbers.

Okay. No problem, we can take that offline that's it for me. Thank you. Thank you.

Your next question comes from Emily Chang from Goldman Sachs. Please go ahead.

Good morning team. Thanks for taking my questions. My first is a follow up on the cost piece and maybe looking ahead beyond 'twenty to 'twenty four 'twenty, five where you're expecting some sequential cost declines that perhaps could you bridge. Some of the items that you think about that would allow you to achieve this I know you mentioned the matter. Thanks, Chipping, but perhaps can you talk to maybe.

As a procurement strategy and labor Sheelen consumable Sarah as well thanks.

Yes, I think that good question, Emily a nice criteria voice.

Really it's just the operations the operations.

As we're going to have more production.

As we get into.

Different areas in the mine sequence.

Costs are anticipated to go down so we have not.

We have not really assumed any relief on.

Consumables or labor or that sort of thing we will work hard to get there, but mostly it is.

Increased throughput and mine sequencing.

And I would just add to that Emily that.

As we said in the press release, no assumption of hedging success on any of these inputs like currency or fuel is included in our guidance.

Because there's no guarantee those things will work out, but we will continue to attempt to add to those hedging programs. During the year. If it's beneficial and also there is no assumption on either production or costs.

Some of the optimization that we're working on.

Which would further reduce costs. So we can we can give a fair level of confidence.

Absent unusual market moves that the costs should go down because we see what the life of mine is and we know what the cost per ton is and we know what the throughput is and all of that and thats going to all improve.

But we haven't included some of the optimization that we're working on and clearly.

As you produce more ounces with the same infrastructure your cost per ounce goes down.

Understood that's very clear and maybe my second question just around the pro.

And Youll Abitibi calls out strategy, there and how you're optimizing mill throughput how do you think about prioritizing the cadence of when each of those nearby resources start to fill in.

When they should start to contribute the additional ounces that youre talking about.

But I mean thats an excellent excellent question and we've really been focused a lot on that over the last few months the best way to answer that Emily is.

We are doing this at two levels. We're doing this at a at the most senior level and John Robo Ty is working on this with <unk> and Natasha and.

Dominic.

But also importantly, and this is the key thing each of these projects has a project leader.

And her team.

A timeframe with milestones and so.

It's.

It's one thing to talk about vision.

What you're really actually have to have as a plan.

<unk>.

We have the teams in place we have the resources in place and the cadence to your point.

<unk> will be driven by those specific opportunities.

Both when these projects can come on stream and also frankly, when the mill capacity comes on stream.

Great. Thank you.

And your next question comes from Greg Barnes from TD. Please go ahead.

Yes, thank you or youre forecasting capex of around one four to $1 6 billion in 2425.

With all of the optimization programs and plans you have for the Abitibi.

Does that number come down beyond 2025 or is it going to stay in that range as we go forward to the end of the decade.

I would say Hello, Greg I would say Oh, I'm, sorry, just before Greg answer your question Emily we will provide more guidance with specific cadence.

Towards the end of the year on some of these projects I just didn't want to leave you hanging there.

So Greg.

So we've actually completed a lot of big ticket items on the Capex side on <unk>.

In 2022 things like the filter press at at Lauren, which is going to allow us to do dry stack tailings, which is for environmental purposes et cetera.

The <unk>.

The capex forecast beyond 'twenty four 'twenty five is forecast to decline.

Based on the current life of mine.

Our job continues to be as as you know to look for opportunities to make profitable investments.

For our owners.

<unk>.

So I'm.

Im optimistic that were going to continue to find good opportunities to create value on a per share basis, but to answer. Your specific question. Yes based on the life of mine models. We have right now the Capex is expected to decline beyond 'twenty four 'twenty five okay.

We anticipate the cash it seems like you've taken a bit of a reset there in terms of production profile going forward I think there was talk at one point it would be 350 to 400000 ounces.

We're not seeing that in the three years.

Forward look anyway.

What's the view on Mckesson now.

Well I'll start and then maybe Natasha can comment a little bit.

This time last year and I remember the call very well because this is my first call.

We hit Makassar head on we said look the previous guidance was $3 5400, a year. We think it's a great ore body. There is a lot of potential, but it's not going to get to $3 50 to 400 in the timeframe that was outlined and we said this.

Based on the due diligence we did in <unk>.

It's a great ore body, but as I said then this is a mine that Kirkland was taken from the 19 thirties to the 2000 Twenty's and then we're making good progress.

We've made very good progress this year at <unk> the team is energized.

Natasha can talk about lot of the accomplishments.

What I would say Greg is Makassar is probably.

At 300 to 350, not $3 50 to 400000 ounce mine, but maybe Natasha.

That's correct. Thank you Omar.

Okay.

In terms of the current guidance it reflects to maintain the slow ramp up of mining activities.

And a lower gold grade when compared to the previous guidance, Phil with respect to the lower forecasted grade.

As a result of adjustments to our resource model based on additional definition drilling and then the slower ramp up in 2024 is partly due to <unk>.

The reevaluation of the development Lee and the mining sequence following the completion of shaft floor and the new ventilation system now we're always looking at opportunities to improve on our productivity, but for now we feel that these are rates that are achievable.

<unk> has done a lot of work in terms of the optimization efforts, whether it's compliance.

The plan the maintenance program initiatives.

But there's always opportunity and I feel like that there is opportunity with number four shaft and ventilation upgrade coming onto to improve on that.

With respect to looking at it in the long run <unk> said I envision the same thing 300 to 350.

The deeper mine the South mine complex and the main break Lee.

Envision that there will be approximately around 300 to 310.

And then we will see an additional say 20 to 40000 ounces coming from the near surface deposits AK deposit.

That could potentially be.

Truck to another mill.

Yes.

<unk>.

We're very proud of what <unk> has done this year. It was I'll be perfectly Frank it was a bit of a tough mind. This time last year. It is operating.

Vastly better now.

And.

The confidence we have and it is high.

Thanks, Martin <unk> session.

Your next question comes from Anita Soni from CIBC World markets. Please go ahead.

Anita Soni your line is now open.

Sorry, I said I had that I was on mute there.

I had the same questions, Greg So I'm just going to pass it to the next caller.

Thank you Anita.

Your next question comes from John Tumazos from John Tumazos, very independent research. Please go ahead.

Thank you.

Sort of moving away from the details of today's press release sort of if there is a long term strategy and Maher.

Is there.

Level of depletion.

This might be too big for annual reserve replacement or a threshold you don't want to go too.

456, 7 million ounces a year.

Is there a level of capital spending.

234 billion a year.

Too much.

Yes.

Clearly, yes, I had a couple of issues this quarter and it's hard to run the company the more moving pieces, even if theyre all in the same neighborhood in Eastern Canada.

And there is five or 10 companies aligned operation Theyre going to sell out to you.

And maybe that's too many projects for you to build it once.

John you're absolutely right.

<unk> on all accounts. So one I think there is a.

There is a limit.

We know that it does become unwieldy, even if theyre all in areas, where we are and Youre right. There is a.

A lot of companies that are we're hoping that someone else will buy them out. So one I would say, yes. You are right. There is a size that is probably too big at some point and becomes unwieldy.

But you know us pretty well.

And we've never cared about size I say that sincerely, we don't care on absolute size, we only care on per share metrics and I think I hope what we've shown today and this is really what I'm trying to do is this merger that we did with Kirkland and this acquisition of melodic but was not about getting bigger.

Because paying full value for something and just.

That doesn't create any value per share.

What we are trying to do and I think what we are going to do better than people think better than people expect I think we're really going to over the next few years show that this combination is going to create a lot of value.

Through leveraging our competitive advantage in this part of the World. When you are a 100% right.

You don't want to get too big and to be perfectly Frank.

All of our teams are very busy we talked about to Emily's question on cadence.

We are allocating resources to all of these to make them happen and we're working flat out. So it's a good question and I hope I answered it.

To your satisfaction could be numerical EMR for our planning should we should we assume that we say.

$4 million or less ounces and the capex doesn't get bigger than $2 billion in a year and even though you own 10 or 20% of.

For companies and another 14, which theyre going to sell to you.

Maybe you need to wait 10 years to worry about building all of those mines.

Yes, yes.

Thank you and I'm glad to be a shareholder. Thank you. We're glad you are a shareholder.

And your next question comes from Carey <unk> Macquarie.

Canaccord Genuity Inc. Please go ahead.

Hey, good morning, everyone.

Based on the press release that you are evaluating increasing capacity at Milan to 60000 tons a year.

Obviously.

With the open pit ending in excess capacity, there just wondering sort of what's driving that.

Good morning, dummy competing speaking the mill capacity of 60000 tons per year.

Per day, sorry, and we're going to start to have some capacity available starting in 2028. So this is where we all look to bring more or to that Neal.

The mill is there.

Okay, and then on macassar.

I mentioned, some higher dilution has that been factored into the updated reserve model now.

Yes it has.

Okay, Great and then maybe one last one for Omar I mean, you really emphasized the regional.

A strategy that you guys have and just wondering how <unk> fit into that kind of seem a bit kind of forward guidance relative to that the other regions that you have.

Yes.

Thanks Kerry.

So I'll start with Fosterville <unk>.

Fosterville greater.

Great asset great people doesn't makes sense to be in a place like Australia for just one mine.

And so we are looking at that and we're looking at Australia broadly speaking in Australia already has a lot of good miners in it but theres a lot of opportunity. So what I would say with Fosterville is.

Great assets.

But we need to make a decision long term on can we create value for our shareholders in Australia better than other people can.

And we're working on that assessment.

<unk>.

As we speak.

I'd say.

It's the same at Kittila frankly.

We are producing close to 3 million ounces now out of Canada.

Right so.

Are going to be going to $2 1 million in the Abitibi, we're going to be going to 900000 in Nunavut.

So that's a fair question and.

And it's a fair question.

In Mexico as well, although I have to say we are very positive on the work we're doing with tech at San Nicolas.

Got it very helpful. Thanks, Omar Thank you.

Your next question comes from Mike Parkin from National Bank. Please go ahead.

Hey, guys. Thanks for taking my question.

I know you flagged the big jump in power costs at Kittila.

2022.

I think I recall, there was a power and nuclear power plant getting commissioned at the end of the year that online are you starting to see energy cost benefit from that coming online yet.

We want to go down.

I could take it yes.

We saw the <unk>.

<unk> increased in December up to five six.

<unk> dollar per megawatt or bigger.

Because of the situation.

And in that I don't know if you eat what you refer but in decades, we've run our hour hour generally tien generators, just due to save costs and we've also reduce some activities at site, but we see the future positive because there is a nuclear plant taking place and they are finalizing the commissioning.

So we expect to have a better us for for next year, Yes, I think thats, what you were referring right as the as the plant online and commissioned I don't know if any are you on the phone sorry to put you on that <unk> is not on the phone. So my last update on that Mike was.

<unk>.

They were commissioning it they had a couple of problems with water pumps of all things you think.

Water pumps not that complicated but.

My understanding is it is back online now or will be shortly and.

We have we are seeing material reduction in power costs at key to us So again.

We are.

I will just say it in the budget, we've assumed higher power.

<unk> cost than we're seeing right now so there is upside there for us.

Kind of what are getting that was where the guidance is kind of based on.

And then in terms of the Canadian <unk> mill.

In the past you talked about potentially needing to tweak the front ends of the grinding.

Segment of it.

Better balance the lower tonnage eventually coming through with Odyssey, but now with this potential to fill the mill.

Get closer to a sale.

No it's regional.

Upside is.

And is that something you could potentially avoid.

I'm going to do.

Yes, absolutely Mark it is an opportunity that we have right now into our PK study, we have money to decommission decommission a part of the meal now we see that as an opportunity to keep it running.

And maybe if I go back I think to carry question before.

About the mill capacity and Curtis will currently we're mining with open pit at 55000 ton per day, we are depleting those bid with Elizabeth Kingdom Antarctic is going to end this quarter and we're going to move everything to Barnett pit, but the tonnage going to decrease from there.

Pit and the underground tonnage could increase coming into 'twenty 'twenty nine we're going to be.

Third time less throughput.

We're at 19 19000 tonne per day, but the grade is going to be too.

<unk> five three time hired and right, where we are right now which is going to bring equivalent ounces.

Those two.

Okay.

And then jumping over to Kip.

With this.

Final ruling on the greater.

Greater tonnage Kermit.

<unk> that if it doesn't prove favorable this ruling coming this year you would submit.

Submitted kind of a new permit application.

That we're obviously nickel for worst case and you can avoid it but if you have to do it.

What it is.

Timeline of getting a new permit through would take.

Yes, I think it's.

We're quite hopeful that we.

We will.

But you will remember we got the permit.

And we got the support.

From all the regulatory bodies, there wasn't appeal and during the appeal. The court has asked us to go back to one six so we are hopeful.

It doesn't and again just to emphasize the guidance. We showed just to be on the conservative side is that the one six.

If if and the.

Unexpected situation where.

We get denied in or there is a reversal of what was already permitted we will have to resubmit.

And that could take a few years.

Okay.

Hey, guys. Thanks, so much.

Your next question comes from Ralph <unk> from H capital. Please go ahead.

Great. Thanks, operator, thanks for taking my two questions Omar Firstly on La Ronde.

Talked about moving to a slower mining rates with the same with the same virtue be extended to development rates, meaning that if you do slow down the mining rates do you have an opportunity.

To sort of enhance productivity with perhaps we're just dilution. So it does it does the slower mining rate effect development rates as well and maybe can you touch a little bit upon sort of the lateral exploration prospectively as opposed to at depth.

Yes, Nick speaking, yes, effectively we are going to the mining the development rate, it's going to be adjusted.

But this is offset also because we need to do more paced backfill and more.

We ending net yeah, we can bring the David.

The waste into to do to use backfill so overall.

The cuts are kind of upset right now, but we're going to work with the team to really fine tune that.

And we're going to see also this year, we're going to be the real phase of mining we could do at Tyrone.

Overall, the loan deposit is going to be 200000 ounces per year. There are 75 coming from <unk>, but we're going to have coming into the second half of this year 30000 ounces coming from 11 11, three which is the thing we're looking for it to continue to bring more or from new zone.

And on that I will pass the mic to <unk>, which could give you some sense of where are we to discovering more answer.

So that they are really speaking.

Hi, Ralph on the lateral perspective, while we already <unk> materialize some of that <unk> five is the as an example of what we are moving forward in trying to replicate the I know there is on.

On the adjacent property to former Bousquet property, that's almost <unk> five or.

Historically mining stop at about one six kilometers below surface and those on were still open at depth. So in between the current <unk> <unk> five they are known zone of monetization, namely <unk> three forward. It remains open at depth. We see also good potential below the <unk>. So this is exactly why we're putting a lot of it.

Physicists at developing that exploration drift on level 215 in that exploration drift will advance for another a kilometer towards the west to be in a better position. So we are full steam ahead at getting that platform exploration platform in place to target those known the zone that we're identifying in the past and continue to investigate their extension.

And Rob it's a good question I'm, a glass half full guy and.

And I actually see this in the long run is a good thing I mean, it is natural for any mining company to follow the highest grade.

<unk>.

In the <unk> development, but at some point, we really did need to go laterally because theres a lot of opportunity around their laterally and this is.

This is something that we should do.

And again, that's kind of why I said it might take a couple of years, but we're confident that.

We're going to be able to find additional or phase.

For the Lauren complex and hopefully.

Recover.

Back to where we were last year.

Got you, okay, Thanks, and maybe as a follow up I just wanted to switch to Fosterville.

Does the current technology allow you to get into that 16% to 20 hertz threshold to be sort of within specs on that low level noises with current technology available.

And is this really just sort of an engineering solution that needs to be figured out.

Yes, so we have put a lot of effort and the best technology in the world to resolve this.

To put this into perspective.

I was out there and I couldnt hear anything.

Like nothing.

And so we are going to be able to I mean, we've spent a lot of money. We brought experts in from all over the world Sound. As you can imagine is a bit of a complicated thing we are going to be able to reduce it but it is never going to go to zero.

It just isn't and this is the discussion we're having with the regulators.

This is effectively something that.

The vast majority of people can't even here.

And so the regulators I think have asked us to do all we can we have.

It's gotten better it is physically impossible to go to zero and so I think I think.

There is some sympathy there that we've that this as we've done all we can and that it's not a in.

Intolerable situation, but.

Its regulators and we do the best we can but we are genuinely hopeful this gets resolved pretty soon.

Okay, I understand and Mark Thanks, very much. Thank you.

Your next question comes from John Tumazos from John Tumazos, very independent research. Please go ahead.

Thank you and just continuing the Fosterville discussion.

Six years ago, I went up by myself.

To afford to skew iron ore trip.

Left hand side driving and whatnot.

Got lost and went through Bendigo and <unk>.

Circle around a little bit.

And there aren't too many houses close to the mine.

And Theres other mining districts in Australia, like Kalgoorlie, where the town is right there and it's huge.

Is there I don't understand why noise abatement.

Would be a significant issue at Fosterville.

There is some environmental impact.

On thousands of Green parakeets, near the course should or something.

Well John it's.

And we're glad we still have your after the left hand driving but.

This stuff is not uncommon in our business and sometimes and in this case it.

It might be a specific individual who.

<unk>.

Is utilizing this as a way to achieve something else. So.

I don't really want to get into it but what's important.

Is we will always do always do what we are asked to do by the relevant legal authority.

We respect.

Peoples <unk>.

Perspectives.

And we are.

Hopeful this gets resolved fairly soon.

Thank you. Thank you.

Presenters there are no further questions at this time. Please proceed with your closing remarks.

Well, thank you operator, and thank you everyone.

This is.

I know theres been some some initial.

Questions about the production and the adjustments I just want to remind everybody.

Three years ago, we had.

We had some rehabilitation and a ramp at La Ronde, We had April theater that failed we had some water we had to pump out of the bottom of a bit at Meadowbank. It was all resolved in the same quarter.

So these types of the fourth quarter.

Jim did a good job 800000 ounces, yes, there were a few operational challenges that's the nature of our business.

But big picture, we are a much stronger company than we were a year ago. We are just scratching the surface of delivering I think exceptional value.

Lot of this stuff is with minimal capital remember we're in the business not just to produce ounces, but to produce profitable ounces and good return on capital and we think we're on the right track so with that everyone. Thank you again for your time, but more importantly, thank you for supporting us.

And we will be marketing over the next few days and happy to take more questions. Then thank you.

Ladies and gentlemen, this concludes your conference call for today, we thank you for joining and ask that you. Please disconnect your lines. Thank you.

Okay.