Agnico Eagle Mines Limited Q1 2023 Earnings Call
Speaker 1: .
Speaker 2: Miss Michelle and I will be your conference operator today.
Speaker 2: At this time, I would like to welcome everyone to the Ednico Eagle Minds Limited First Quarter results 2023 conference call.
Speaker 2: All lines have been placed on mute to prevent any background noise.
Speaker 2: After the speaker's remarks, there will be a question and answer session. If you would like to ask a question during this time, simply press start then the number one on your telephone keypad.
Speaker 2: If you would like to withdraw your question, please press start to. Thank you.
Speaker 2: Mr. Ammar Aljundi, you may begin your conference.
Speaker 3: Thank you and good morning everyone. On this beautiful spring late April day, it's a pleasure to have the opportunity to talk about our first quarter results.
Speaker 3: But before I do that, I'm in a room with a lot of my colleagues who will be dealing a lot with this discussion. But in particular, I'd like to talk briefly about two colleagues. On my right, Sean Boyd, who mentioned to me that at this AGM at 11 o'clock will be his 40th ...
Speaker 3: AGM with the company, you don't have many people in any business that committed for that long who've created as much value as Sean has, so that's quite the milestone, Sean, and we'll make sure we point it out again on the 50th. And on my left, Dave Smith.
Speaker 3: CFO extraordinaire and a good personal friend who today is his last official day as CFO . He has...
Speaker 3: me Porter over the next month or two to transition and then move I think happily into retirement good for you Dave but I just wanted to point that out.
Speaker 3: So we're going to be...
Speaker 3: parts. One, strong operational performance, strong production, good costs, good safety, good environmental performance.
Speaker 3: Two, very good progress on optimizing our assets. 2022 was a year of consolidation. 2023 is going to be a year of optimization. There's a lot of work, a particular focus on the ABITIBI belt, but the huge potential. And then three.
Speaker 3: Excellent exploration results. Importantly, excellent across a number of assets. And Guy will talk about that.
Speaker 3: But I want to start with safety. Our greatest responsibility at Agnico and I would say at any company...
Speaker 3: is for the safety of our people and the safety of our communities. In the third quarter last year, I had the pleasure to announce that it was the safest quarter in the company 65-year history.
Speaker 3: The last call at the year end call in February , I then had the pleasure to announce the safest year in the company 65 year history. And now in the first quarter of 2023, I can once again, I have once again the pleasure of saying.
Speaker 3: Another record safety quarter in the company's 65-year history. That's pretty fantastic.
Speaker 3: So, before we get started on the details, I would like to mention the forward looking statements. There's a couple of pages there. It's important. A lot of what we talk about is going to be looking forward in our best estimates, but clearly they're estimates.
Speaker 3: I am going to go through, this is how the call will go today, we'll try to keep the presentation to a half hour and then open it up to questions. I will quickly go over the highlights on the operations, but really I want to focus us on the excellent things we're doing to create value long term.
Speaker 3: And I'm going to be asking the people in charge of that to talk directly. One, growth at detour and Natasha will be talking about that.
Speaker 3: two growth at melodic and Dominic will be talking about that and again Detour in melodic some of the biggest minds in the work gold minds in the world some of the longest life gold minds in the world In the best jurisdictions with a lot of growth
Speaker 3: Three, the consolidation work we're doing on the Abbott-Tibby belt, there is a lot of work there. It's still very early, but we're making good progress. And Jean-Rovitai will talk about that. And then four, as I mentioned, exploration and Guy will talk about that.
Speaker 3: Jumping into the presentation, just hitting the highlights.
Speaker 3: Strong quarterly production and cost, record safety performance, production at 813,000 ounces, cash costs at $832, and all in sustaining costs of $1,125. Particular shout out to the operating team. We've talked about inflation, we've talked about cost pressures.
Speaker 3: operating cash flow of $1.30 a share. There is a big accounting adjustment. I will let Dave talk about that later in the presentation. Gold production, capital and cost guidance maintained for the year. Next page, please. When you arrive, the
Speaker 3: We've had continued exploration success.
Speaker 3: That's impressive, but more impressive it's been across the board. At Meliodine, at Ketilla, at Laurent, at Goldex, and of course continued success at D-Tour and Malardic. We closed the Emanutransaction on March 30th. We closed the joint venture with Tech on April 6th.
Speaker 3: Both of those deals, key strategic deals that position us well in some of the best mining jurisdictions in the world. We released our 22 Sustainability Report and a shout out to our ESG team who won the Investor Relations.
Speaker 3: award for best ESG reporting in the industry. So congratulations on that. Improvement across a number of indicators, safety, water, indigenous employment, things that are important to our business.
Speaker 3: and a quarterly dividend of 40 cents a share. Now before I flip, I do want to give a special congratulations to the team in Finland on the ESG side. The Kitala mine is transitioning to 100% clean nuclear power.
Speaker 3: and a quarterly dividend of 40 cents a share. Now, before I flip, I do wanna give a special congratulations to the team in Finland on the ESG side. The key to the mine is transitioning to 100% clean nuclear power, starting effectively now. Hello.
Speaker 3: That reduces our greenhouse gas emissions for the entire operation by about a third.
Speaker 3: And so our target across the company is a 30% reduction by 2030. Ketala has effectively done that now. And it's also an opportunity to point out again that getting to the targets we need to get to are not just company specific.
Speaker 3: Looking at some highlights of the sustainability report, again, 65 years, the best safety performance, I can't say that enough. I want to take a second to talk about the Dr. Leanne Baker scholarship. I think a lot of you remember Leanne Baker, an exceptional individual, she was on our board for a long time, really an inspiration to young women as a very successful person on the financial world, on the technical world. In that scholarship, we have 14 young ladies at Agnico with strong technical and financial backgrounds, very capable, and we are mentoring them as future leaders of the company. An increase in indigenous employment and
Speaker 3: always important to reduction in fresh water usage.
Speaker 3: I'm very proud of this. $1.5 billion in local procurement in 2022. That really does make a difference on the ground. Next slide, please.
Speaker 3: So the rest of this presentation primarily is going to be focused on the key value drivers that are going to move this company forward for years to come. I'm going to have the individual talk about them. Again, Natasha will be talking about D2 or Lake where we've had record.
Speaker 3: through the Mill, as Natasha and her excellent team continue to make progress there. And she will also talk about our long-term objective to get to a million ounces a year. Dominic will talk about the Canadian melodic complex, the shaft sinking, the ramp construction, and some of the opportunities we see there.
Speaker 3: And Jean will be talking about some of the initiatives to consolidate the habitivity belt that we've talked about, including amalgamated Kirkland, Upper Vever, and Wassermax. So with that, I will pass it over to Natasha. Thank you, Omar. Good morning, everyone.
Speaker 4: So as more said, I'll provide an update on detour and our vision to get to a million ounces per year on slide 9. And I'll start with the mill expansion. So this has been a journey, as you can see, from the top graph on the slide. The team has progressed quite a bit over the last few years and increasing throughput at the mill. And I've had tremendous success in achieving their objectives.
Speaker 4: In my opinion, anyway, since the merger, we've actually seen an acceleration of that because of the technical bench strength that came with the merger and the ability for us to leverage the sharing of best practices between Canadian Moulartic and DETOR. There's a lot of lessons learned here. And so we continue to advance on multiple initiatives to increase and...
Speaker 4: stabilize the meal to put to 28 million tons a year by 2025 if not sooner. And as mentioned in February , the last major initiative in our plan to achieve 28 million tons a year was successfully completed.
Speaker 4: towards the end of 2022 with the installation of the secondary crusher screen. And so this quarter, as well as going forward in the year, the focus at the mill will now shift to optimizing the mill processes, to analyzing the wear and tear from the higher throughput to optimize maintenance practices.
Speaker 4: And as I mentioned before, basically improving the overall mill run time so that the higher throughput becomes simply more and more consistent over time.
Speaker 4: Basically, what we're doing is tweaking the system now and aiming to improve the runtime, which is normal at this phase of the expansion process. And some examples of what I mean by tweaking the system is that we're looking at small changes to extend the liner life. We're tweaking the refeed system.
Speaker 4: So that it operates more efficiently in the winter, where relocating some of the pipelines in the mill just to maximize efficiency of pipe replacement during shutdowns. So just a few examples from a list of things that the team is working on very hard. And also while doing this, we're also evaluating a pathway to increase the mill throughput beyond 28 million tons of yield. So just a few examples from a list of things that the team is working on very hard.
Speaker 4: has the potential to deliver more once we optimize our mill processes and our maintenance strategy. And with that logic, we think that there is opportunity to gain somewhere in the order of maybe half a million to a million tons per year, just from that.
Speaker 4: The next is implementing an expert system like we have in some of our other mills. We think that there's opportunity to gain some tonnage there too. And finally we're testing the ability of increasing the percentage of pre-crush material to feed some more feed through the refeed system. And we're also testing the ore sorting capabilities.
Speaker 4: So this is just a vision of where we see the potential to achieve higher tonnage beyond 28 million tons a year. And importantly, these initiatives that I just talked about.
Speaker 4: come with limited capital expenditures. It's still early though, but we do have an experience to keep on site working on this. Now moving on to the second part of our vision to get to a million ounces a detour. And that's the evaluation of the potential of the underground mine.
Speaker 4: Now the first portion of this study would be to complete an initial underground mineral resource associated with the mineralization that sits just outside of the final pit limits.
Speaker 4: To that end, we are carrying out an aggressive drilling program and we will expand on this shortly. But we do have more drilling to do and once that underground resource is ready, this will be used as a basis for the underground mining scenarios that we'll be working on. Finally, to end, I just wanted to say that the team at Detour has done an incredible job so far and I just want to take the opportunity to thank them.
Speaker 4: for their hard work but also for their passion at continuing to look at ways of maximizing the value of such an incredible asset. But also to echo Ammar's words, I just want to thank the rest of the sites for performing so well as you did this quarter. It's just truly a testament to the caliber of the people that we have here at Ithinko.
Speaker 3: So thank you and with that I'll pass the call over to Dominic. Thank you Natasha for Canadian Monarchic maybe before updating on the project and opportunities. Following the acquisition we had many positive and happy meeting with the Canadian Monarchic complex team and contractor to celebrate that good news that was very interesting to get back with them.
Speaker 3: It is another important step to consolidate the strong teams and great assets in one of the best plays in the world for mining operations.
Speaker 3: For the Odyssey project, you could see on the map at slide 10, we've reached the first good milestone with the first production blast on March 20th, the Odyssey Souter or Buddy at level 31. So far so good, we saw a positive reconciliation on tons on grade for that first toe.
Speaker 3: It is currently under mocking and processing at the mill and there is no, everything is fine, there is no problem.
Speaker 3: We are allowing to do the 50,000 ounces in 2023. At the main ramp, we reached the 54th level, which is the bottom of the Odyssey South or body, as well as the first access where the shaft is gonna arrive. In the first quarter, the team will focus, not in the first quarter, but in the coming quarter, the team is gonna focus.
Speaker 3: to be able to that's going to be the first place where we're going to have the loading station for the ease go the deposit So this is the two focus on the surface everything is built to support the shaft sinking the head frame is ready the weight silo the Gallo waist functional and shaft sinking activities are on the way
Speaker 3: It is still an early stage. We need drilling into DUS2D, but teams are also working on the conceptual second shaft. We're going to need a couple of years to develop that. And we are also evaluating other near-surface opportunities on the Kenemondian Malarctic Repertilite Campflow and LTV.
Speaker 3: So before transferring the mic to Jam, I would like to thank and congratulate the Canadian Maraartic Complex team for their strong health and safety performance in Q1.
Speaker 3: More specifically, the ODC team, which is, let's say, construction and operation teams, we're talking about 250 Agnico employees, 500 contractors, they've reached a triple zero, which is no last time, no medical treatment.
Speaker 3: no modified work in a quarter. It's quite a good achievement for a site in development and construction. Congress is, Congress is a solution to all. And so thank you for your time. We're looking forward to show you our great progress and at the June investor, you're welcome to join us.
Speaker 3: in a quarter. It's quite a good achievement for a site in development and construction. Congratulation to all. And so thank you for your time. We're looking forward to show you our great progress. And at the June investor, you're welcome to join us. Thank you.
Speaker 5: Thank you Dominic. Next slide please. And good morning everyone. If you look what we did in the last two years with the consolidation of our line position with the merger with Kirkland and the acquisition of Yamanas, Canadian asset.
Speaker 5: This provides us with the opportunity to leverage our existing asset. You see on the map, presently, what we own, currently, between Macasa and Goldex.
Speaker 5: And considering our upcoming excess processing capacity at LaRonde complex and Kennedy and Martin, we have initiated multiple study to identify the optimal approach.
Speaker 5: More than 10 studies are ongoing to be in position to integrate the best alternatives into our future production plant. We have identified potential to add up.
Speaker 5: up to 500,000 ounces by the end of this decade. So, frankly, we are focusing on the near-surface and AK. On this specific one, we have identified a dispoint for the second half of 24 up to 400 tons per day.
Speaker 5: Metallurgical test work are completed and the milling option are already defined. It will be integrated in the mind-land of the different operation.
Speaker 5: We are working on upper beaver, wasamak, satellite, deposit, and for sure everything around Canadian Arctic. We perceive substantial opportunity with the land position we have, with the road, the railway.
Speaker 5: and we will keep you posted as it's dedicated to the 4.2 advance and optimize our asset.
Speaker 5: On this I will pass to Guy for the exploration. Thank you, Jean. Good morning, everybody. 2023, again, we have a large exploration program with over 310,000 meters of drilling that was completed and I would say safely completed.
Speaker 3: in Q1 by the 1000 employees and contractor that are working into the various exploration site where we see a tremendous improvement into the safety performance and I would like to congratulate each of the site for their excellent performance in the first quarter that has been one of our first best quarter ever.
Speaker 3: in the exploration for as long as we can track. And we expect those good performance and exploration on a various site to lead to some positive result in terms of addition to resources and reserves toward the Iran.
Speaker 6: And to go through a few of them, for start at LaRonde's own five, Drulling continued to expand the merillization at depth, now extending the merillization down to 950 meter, with ILI-3 is all up to 3 grams over 30 meters and 3.7 gram over 10 meter.
Speaker 6: which are above the current reserve and resources grade at LZ5. So, quite an encouraging result and we expect those results to lead to an addition of infer resources below the current limit of 770 meters depth towards 950 meters depth by the end of year and 2023. Goldx infill result and the South Zone continue to deliver extremely good result.
Speaker 6: much higher grade than the overall grade at the Gold X deposit including results up to 9.8 grams over 15 meters, 6 grams over 12 meters, which are quite positive on the overall benefit on the 8th grade at the Gold X facility. And also summation of initial drilling in the W zone, which is located approximately 200 meters to the west of the main
Speaker 6: Gold X deposit at shaft number one where it was a mystery call result and recently we've resumed drilling through our level 27 exploration drift where we got an intercept of 1.8 gram over 35 meter
Speaker 6: In some mineralization that is similar to the typical Gold X, GEZ and Deep Zone. So quite encouraging results for the Gold X future. At OBEI, we have nine rigs operating split between Doris and Madrid. IELTS into Q1 continue to return good results in the Doris deposit within the B.
Speaker 6: and also an increase of activity at the Madrid deposit.
Speaker 6: where we are shifting towards a larger step out along the trend of the patch 7 trend and we are starting to see some primary results with more importantly recently some nice visual intercept with nice visualization and visible trend with results that are pending.
Speaker 6: In more detail, at slide number 13, for Meliadine, I would say Meliadine now quite exciting. We now have access to our exploration ramp in the central portion of the deposit, which allow much better access to test the deep extension of the deposit and during the first quarter.
Speaker 6: in the central part of the Tereganyak West Meg from that new exploration ramp, having access to drill the deep portion, some pretty encouraging intercept in the Tereganyak deposit, 17 grams over 4.9, and also another deeper intercept, 7.5 over 8 meter.
Speaker 6: at 890 meters, which is the deepest intercept reported to date at the Thiriganyak property, demonstrating that the deposit remains open at depth and to the east. So quite positive result for Milyadene. Shifting to Kitala, I would say the highlight this quarter would be to where in the main zone in the RIMP area.
which is in the north part of the deposit, where we continue to see that the deposit remains open at depth with typical kind of grade and width for that area with 5 gram over 9.2 meter. The deposit is in the RMP and North Roora area.
continue to remain open to the West. So I expect to continue to add on. It is outside of the currently known resources area. So very positive. And last but not least, as introduced by Natasha, obviously lots of drilling happening at the tour where we currently have 10 rigs operating on the property.
that completed in excess of 65,000 meters in the first quarter, with a primary focus at testing in the saddle and west pit, below the reserve pit, and also continue to extend the deposit towards the west.
So within the west bit and saddle area, some quite nice grade, you know, over good thicknesses, 2.9 grams over 30 meters, 3 grams over 26 meters, 2.6, so this is exactly the kind of intercept we're looking to incorporate into our vision.
for the underground scenarios or interpretation of those higher grade intercepts within the deposit. And exploration also continued to test the deep western plunge of the deposit. That, as mentioned in the previous quarter, remains open with gold mineralization that extends up to 2.4 km to the west of the current resources pit.
graph on the right of the next slide. You can see that Ignico remains very well diversified operationally and to the left at the top we've got the breakdown asset by asset, very strong operating performance as we've discussed and of course when you have a good gold price and good operating performance on the cost side that results in good cash flows and in fact this quarter was a record.
In fact, we expect another record next quarter because we'll have additional production from the other 50% of Malartic as well. From a production perspective, Q1 should in fact be the lowest gold production quarter for the year. I also expect a good gold price this year, certainly even higher by the end of the year.
is my opinion. So I think we're in a great position from a cash generating ability.
On that note, I would just point out that Igniko is currently trading at about 10 times cash flow, which is a fairly low multiple. In fact, if you told me that you'd be in a good gold market, gold would be $2,000 an ounce, I would think that Igniko would probably be trading at least 15 times cash flow. So...
I've seen us trade north of 20 times cash flow for long periods of time in good gold markets and I think maybe by the end of the year we'll have that benefit of a stronger gold price and maybe multiple expansion as well. So pretty excited about that. Just flipping to the next page.
Just a couple of comments on our liquidity position. In the first quarter, we drew $1 billion on our credit lines to pay the cash component of the acquisition. And since then, subsequent to quarter end, we have seen
We've actually entered into a term loan for $600 million with Desjardins and EDC. Very happy with that deal as I know our partners at Desjardins and EDC are as well. That's a two-year agreement.
And additionally, we've paid from cash another $200 million down on the line. So of that billion dollars that was drawn on the deal, there's only $200 million remaining drawn on the lines now. So we're heading into the remainder of the year in a very strong financial position and a great outlook, I think. Well, thank you, Dave, and thank you, everyone. Next slide, please.
So just to summarize, everybody on the line here knows who we are and what our strategy is and it's been a consistent strategy. We are not a go everywhere in the world to build a mine. We are very much a regional miner. We focus on the best places in the world to mine.
based on geologic potential and based on political stability. We are absolutely focused on per share metrics. We don't care about the total size of the company, we care about share price.
We are an important part of the community. If you want to be in a place for 50, 60 years, you can't just be a good miner, you have to be part of the community. That's important to us, it will always be important to us, and drives our ESG philosophy. We have a long history of capital returns.
almost 40 years of consecutive dividend payments, and last year I think we returned almost $800 million to shareholders. But I will finish on one important thought, which is this.
regional focus.
in stable jurisdictions has always worked well for us. I would suggest that it is more important now than ever. With what's happening in Ukraine, the east-west split is bigger than it's been since I was a little kid, and I'm 58 years old.
and uh...
To be sure, China is flexing its muscles with a focus on minerals and
So that positions, I think, for the next several years an increased focus, not just on what you're mining but where you're mining. And certainly the strategy of being in good geologic regions with good political stability and frankly being the strongest miner in those regions is a strategy that will do well.
for everyone, our communities, our employees, and certainly for our shareholders. And with that, Operator, we'll open it up for questions. Thank you. Ladies and gentlemen, we will now begin the question and answer session.
our employees and certainly for our shareholders. And with that, operator, we'll 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 1 on your touch tone phone. You will hear a three tone prompt acknowledging your request.
If you wish to decline from the polling process, please press star followed by the 2. If you are using a speakerphone, please lift the handset before pressing any keys.
If you're using a speaker phone, please lift the handset before pressing any keys. One moment please for your first question.
The first question comes from Fahad Tariq of Credit Suisse. Please go ahead.Audience, participants, or their families take off and change they are lesERS.
Hi, good morning. Thanks for taking my question. Maybe for Dave, you talked a little bit about the balance sheet. I just wanted to get a sense of target leverage and I know there are some moving parts with the drawdown from the revolver but then it sounds like there was a repayment subsequent to the quarter.
Just trying to get a sense of what is the target net debt to EBITDA that you're comfortable with and considering there's a few projects potentially in the pipeline that require some CapEx, what would be a high level leverage that you're comfortable with. Thanks.
Yes, so from a very broad basis because of course it always depends on market conditions as well and what is going on at the company at any given moment, but the way I've described it to the board is, you know, all else being equal, let's not touch two times net debt dividend Dan.
and we haven't in a very, very long time. We'd like to operate at less than one times net debt TBA DAH and our current forecasts at spot pricing indicate that we would end this year at about 0.24 times net debt TBA DAH, so very, very conservative balance sheet and we intend for it to stay that way.
To quote Sean Boyd, who's been here for apparently 40 AGMs, one of the reasons that we've been around for more than 60 years is because we've never taken on too much financial risk and we're going to keep that very conservative balance sheet.
and lots of liquidity to make sure that we can do all those big projects in the future. That's very clear. Thank you.
Thank you. The next question comes from Anita Soni of CIBC. Please go ahead. Good morning, everyone. Firstly, Dave, congratulations on your well-deserved retirement and congratulations on the quarter, everyone. My question is with respect to the cost of the retirement.
guidance as we look at it over the course of the year. So you came in below the low end of your cost guidance for this quarter. Can you talk about some of the moving parts over the course of the rest of the year Q2 and then to Q4 that may see you trend upwards? And can you also talk about the
inflationary pressures that you've seen abating. Hi Anita, it's nice to hear from you. The team did a great job on cost control and...
First and foremost, it's always the operations. When the operations do a great job, the costs are naturally in line.
We are seeing some relief, frankly, on the inflationary side. We were talking to our procurement team the other day, and we are starting to see, frankly, from the merger with Kirkland Lake. We said it would take a while for some of this to come through. We are seeing some relief, frankly, from the merger with Kirkland Lake.
with some of the new procurement contracts. The team has been working exceptionally hard on that. We've had some currency tailwinds that help us. So I think we're very comfortable with the guidance that we have with costs. It's clearly, given the volatility we've had over the last couple of years.
It would be probably irresponsible to change it at this point, but it certainly is a good start and most of the benefit goes to the operating team and the procurement team. Okay, I'll leave it there and let the next person ask. Thank you.
Thank you. The next question comes from Tanya Jackaskonic of Scotiabank. Please go ahead. Hi. Good morning, everyone, and congrats on a good quarter and congrats, Dave, on the retirement. It's good to be back on the call after being restricted for a while as well. Okay. A couple of questions. Can I just start on the Q&A?
Anita started on the cost side, but I just wanted to get an idea. As I look at 2023, can you provide some guidance for the remainder of the quarters in terms of how do you see production, any assets that are back-end weighted, and where you have maintenance downtime so I can get those correct in my forecast.
So let me start with that first. I will start with the big picture on the remainder of the quarters and then maybe Dominic and Natasha you can hit some of the specifics. Welcome back Tanya, it's nice to have you back online now that you're not restricted. The first quarter is going to be our lightest quarter with regards to production. That is simply because it doesn't include 100% of the total production fund
of Malartic, which our numbers will going forward. We don't see any particular problems with any of our production. We remain very confident. I would say that it is probably normal to have glitches, but that's one of the benefits to have a...
diversified and multiple minds. And our team are as good as anyone in the business with dealing with these things. But maybe Natasha and Dom, if there are any specific items.
Just to add that, on my side, anyway, it remains pretty steady over the course of the next three quarters. We might have some changes in mining sequence here and there, but overall quarter of a quarter should be okay. Maintenance at downtime is, you know, it's planned maintenance downtime, so we would expect to have one in every quarter or so.
In the CAFSA, I would say that since we commissioned number four shaft, we should see starting to see higher productivity in development, et cetera. And so we should see costs coming slightly down from that perspective, Tanya.
Okay. So, maybe if I think about any downtime at Kittila for autoclave, should I – is there anything specific I should think there?
Hi Anita, Q2 is going to be the lowest quarter because of the shutdown, our eight-month shutdown.
Yeah, Q2 is going to be the lowest quarter because of the shutdown, our eight-month shutdown. Okay.
Thanks, Dominic. Just on the... So, as I look at the year, is it safe to assume that all of Q2, Q3, Q4 are generally even production-wise? Yeah, roughly. Perfective. Yeah. Okay. So that's helpful. Thank you.
And then can I just ask about the inflationary pressures that you saw some easing, maybe some examples of where you are seeing it. I understand productivity, you know, has been helping but can you talk a little bit about where you're seeing when you look at your cost structure and you look at the labor, the consumables, fuel, other, can you talk to us about where you're seeing the easing and sort of…
a bit more examples as to what you're seeing? Well, I'll go first. I mean, we are seeing easing, so for example, in Finland on electricity prices. You know, they're not back to where they were, but they're probably half of what they were at the peak. And there wereots of unp Father Hooley was the Curious IVr or Archaeology and
you know, the prognosis looks good going forward. You know, steel prices are down, fuel prices are down, some of the consumable prices are down, and we are getting through the worst of, and we've talked a lot about this, the worst of the lack of human capital. You know, people were able to operate more effectively.
but maybe Natasha and Dawn? Sure, I can start. Maybe I'll just give you an example, Tanya. So, for Detour, for example, in the quarter, we saw diesel remaining flat in the first month or two and then starting to decline in March and definitely in April as well. Electricity for the quarter at diesel was down in comparison to what we saw in March.
We don't see a decrease yet in those ones. As Amar mentioned, the workforce remains on the let's say, didn't decrease, we say stabilized but didn't decrease. But maybe more, what is very important too is on the supply and the logistics. In the last year challenge that we had, even though you would like to pay, if you don't have the part, you will have to pay.
Canada's bigger contract where we have the merge together and from that there is of course opportunity by the volume, higher volume.
I was to think back to next year and I think on your call you had mentioned inflationary pressures up to 10%. Would it be safe to assume that, you know, from that 10% we've seen a couple of percent of ease or is it just still relatively flat? I'm just trying to get a magnitude of easing. I mean, you know, I...
If I give a forecast, the only thing I know is I'm going to be wrong. But it's probably not unreasonable, Tanya.
you know, there's so much volatility, take that with a grain of salt. I appreciate that. It's just to see if we've started to see it come off or just it's stabilized. So it seems as though you're saying it's come off somewhat. A little bit, yes, absolutely. Okay, and then if I could get one more in for Guy, just on the expiration news and the reserves and resources. I know Guy, it's very early days, but as I...
think of Agnico and I think of getting to year-end 2023, you know, that's still far away. Is your target to replace reserves at operating mines? Do you think, you know, with what you have going, we can get there this year?
It's always an excellent question Tanya. Thanks. I always ask it. You had to. Now I see we see positive indication at several of the mines. We see that some of them are in a good position to completely replace. As you mentioned it's very early days although we're planning to deliver a couple of studies on key projects like East Goldie eventually.
That's good to hear. I'll leave it for someone else to ask. Thank you very much for taking my questions.
Thank you. Once again, ladies and gentlemen, if you do have a question, please press star 1 at this time. The next question comes from Mike Parkin of National Bank. Please go ahead.
Hi guys, yeah just one kind of question that hasn't been asked is around depreciation with the accounting change on Canadian Malartic, do you still see your guidance of about just shy of 1.4 billion depreciation is that still valid or kind of up for review?
Yeah, it's exactly that, Mike. Let's call it up for review because the purchase price allocation is absolutely preliminary at this point. We'll be working on it until at least the end of the year. So a lot of moving parts. But that being said, I think you are probably correct that as of right now with no other changes, all else being equal, we're going to have to have a lot of changes. So we're going to have to
and there may or may not be noise associated with it during the year. It's not a big deal, it's accounting, but just a heads up on that.
And would that impact your expected tax rate for the year? Yeah, I guess if you have less net income, you have less.
more taxes, less earnings. But again, it is too early to say where this is going to go. But let's review it quarter by quarter to see where we are on the PPA and see if we change our guidance. Because we are seeing a lot of changes in the PPA. We are seeing a lot of changes in the PPA. We are seeing a lot of changes in the PPA. We are seeing a lot of changes
We're very careful quarterly about making sure we update any of the guided numbers, and obviously DDNA is one of those. So we'll get you next quarter if there's any change.
All right, appreciate that. Dave, congrats on retirement. Thanks, Mike.
Thank you. There are no further questions at this time. Please proceed with closing remarks. Well thank you everyone. It is a pleasure and as I've said before, when the operating team does a great job, my job is easy. So we'll end it with that and thank you very much.
Ladies and gentlemen, this does conclude the conference call for today. We thank you for your participation and ask that you please disconnect your lines.