Q2 2023 Alamos Gold Inc Earnings Call
[music] Oh participants please continue.
This conference is being recorded so it's gonna stay home as it always used to me.
Please stand by our meeting is about to begin.
[noise] morning, I'll now turn the call over to Scott Parsons animals, Senior Vice President of Investor Relations. Please go ahead.
Thank you operator, and thanks to everybody for attending almost a second quarter 2023 conference call.
In addition to myself, we have on the line today job Mccluskey, President and Chief Executive Officer, Greg Fisher, Chief Financial Officer.
Chemo, Chief operating officer, and Scott RG, Parsons or vice President of exploration, we will be referring to a presentation. During the conference calls that is available through the webcast and on our website I would also like to remind everybody that our presentation will be followed by a Q&A session.
As we will be making forward looking statements during the call. Please refer to the cautionary notes included in the presentation news release, an M D N a as well as the risk factors set out in our annual information for.
Technical information in this presentation has been reviewed reviewed and if you're approved by Chris plastic our senior Vice President Technical services and a qualified person also please bear in mind that all the dollar amounts mentioned in this conference call are in U S dollars unless otherwise noted now John will provide you with an overview.
Thank you Scott.
Starting with slide three.
We delivered an outstanding performance in the second quarter cheating and number of operational and financial records production increased to a record 136000 ounces.
Seating or guidance quarter.
Oh, and sustaining costs decreased below or annual guidance.
This was driven by another exceptional performance from like Yoki Grande, which contributed to the strongest quarter from allowed us district more than a decade.
With production totaling 264000 ounces through the first half of the year and costs well within guidance.
We may not rooming remain on track to achieve full year production and cost guidance.
Potentially we broke a number of records, including revenue and cash flow from operations, which increase for the fifth consecutive quarter to 138 million.
We also generated a record 62 million a free cash flow, marking the fifth consecutive quarter positive free cash flow as we continue to fully fund our growth projects and build our financial capacity.
I'm turning to slide poor.
They're making excellent progress across our growth initiatives, we expect to release the results have been updated feasibility study on our Lynn Lake project in the next few weeks.
Work on the phase three expansion continues to progress and we continue to have exploration success of PDA in advance of a development plan that we expect to release in the latter part of the year.
As we announced early in the year, we've defined 1 million ounces of higher grade reserves and resources with PDA over the last two years as damning as demonstrated.
Through our exploration updating me, we expect PDA to continue to grow and support a significantly longer life.
Life minus mulattoes.
[noise] at island Gold, we're making significant progress on the phase three plus expansion.
With the Galloway recently lowered into the shaft construction.
Construction of the hoist house substantially completed and have headframe erection well underway.
We are on track to begin shots thinking in the fourth quarter and deliver initial production from the shaft and expanded no in the first quarter of 2026.
We continue to have tremendous exploration success across the island gold deposit.
Is highlighted in our June news release.
I mean, just scratching the surface of the regional potential across a much larger lamp package.
This is highlighted by the photo at the bottom of the slide of a recently drilled core with significant physical gold from the prime brush a region regional target.
Which is only four kilometers uncle Mel.
We also released our inaugural climate change report and a quarter a significant milestone in our sustainability journey, which among other things outlines for the details on a 30% reduction target and greenhouse gas emissions by 2030.
I'm turning to slide five.
The key drivers of our strong outlook are on track.
Is guided and seen through the first half of this year.
Low cost production growth from Milwaukee Grande.
Our production higher and cost lower.
Through the phase three plus expansion of island Gould, we expect production will grow to 600000 ounces per year with all in sustaining costs decreasing below the 1000 dollar per ounce level.
Longer term.
To the development of Lynn Lake, we have the potential to increase production to 800000 ounces of gold per year.
All of this with growth as in Canada.
It's all lower cost and we can funded internally, providing one of the strongest outlooks in our sector.
I'll now turn the call over to our CFO , Greg Fisher to review our financial performance Greg.
Thank you John .
My first quarterly conference calls Chief Financial Officer, and I couldn't be happier to be reporting a number of new financial records.
I've been with all those for over 13 years, most recently as senior Vice President of Finance and can say that the outlook for the company has never been better.
I'm excited for the growth we have a head and look forward to continued strong financial results in the years to come.
Moving to slide six we sold 132000 ounces of gold in the second quarter hadn't average realized price of $1978 per ounce.
$2 per ounce above the London PM fix for record revenues of $261 million.
Total cost cost of $847 per ounce.
We're in line with annual guidance and all of us standing cost of $1112 per ounce or below the low end of the range.
Through the first half of the year total costs costs are down 12% from a year ago, and all and sustaining costs are down 9% as we benefit from low cost production or a.
Low cost growth at like Yankee ground. It we.
We were one of the few companies to meet cough guidance in 2022 and are on track to do the same in 2023.
Reported net earnings of $75 million in the second quarter or 19 cents per share included unrealized foreign exchange game of 13 million recorded within deferred taxes, and foreign exchange and other games of $2 million. Excluding these items are just adjusted earnings were 59 million or 15 cents per share.
Driven by our strong operating results in expanding margins operating cash flow before changes in non-cash working capital increased 9% in the first quarter to a record 138 million or 35 cents per share.
Free cash flow also increased significantly from the first quarter to a record 62 million.
Strong operating results and margin expansion, where the main drivers of the free cash flow increase with the collection of 20 million in sales sales tax receivables in Canada that had been deferred from the first quarter also contributing.
Capital spending totaled $80 million and a quarter and includes twenty-three millions of sustained and capital 50 million of growth capital and 70 million capitalize exploration.
Through the first half of the year capital spending total of 164 million consistent with our annual guidance.
Our balance sheet continues to strengthen with no debt at $189 billion in cash at the end of the second quarter up from $134 million in the previous quarter reflect reflecting the solid free cash flow generation.
We expect this to continue as we internally fund our high return growth projects, while generating significant free cash flow and providing strong ongoing returns to our shareholders I.
Well now I'll turn the call over to our C. O O Lewke mall to provide an overview of our operations.
Thank you Greg movie.
Moving to slide seven young Davidson produced 45200 ounces consistent with the first quarter, reflecting similar grades and processing rates.
Cost in the quarter and through the first half of the year. We're in line with the upper end of guidance.
Great minds and process. We're at the low end of the annual guidance range and are expected to increase in the second half of this year as previously drive guided.
Billing rates were below mining rates, reflecting a scheduled liner change in weather related power outages in the region.
Billing rates are expected to return to guided levels for the rest of the year.
Combined with higher grades this is expected to drive higher production and lower costs and the second half of the year.
Putting the operation on track to achieve full year guidance.
Mindsight free cash flow increased to a record 35 million in the quarter, bringing the first half total to 52 million.
With a stronger second half expected young Davidson is on pace to generate over 100 million in free cash flow for the third consecutive year.
Over to slide eight.
Island Gold produced 30500 ounces in the quarter.
Grades were in line with guidance, however, milling rates were impacted by lower mining rates as well as downtime for maintenance on the fight, Oregon and weather related power outages.
Finding rates were also impacted by the power outages as well as some last shift students smoke from wildfires in northern Ontario.
Both mining and milling rates of return to normal levels in July and are expected average 1200 tons per day through the remainder of the year.
This is expected to drive higher production and lower costs and the second half of the year, putting island gold on track to meet full year guidance.
Over to slide nine.
We made considerable considerable progress on the phase three plus expansion in the second quarter with mechanical installation of the production and service voice completed.
The hoist house substantially complete.
The Galloway that will be used for shops thinking was lowered into the shop and is being outfitted with the required mechanical and electrical components.
Over 90% of the buried services required to start shots thinking are now complete.
And the erection of the head frame as well underway I've seen in the photos on the slide.
Shaft thinking is on schedule to commence in the fourth quarter.
Over to slide 10.
A total of 41 million capital related to the Faith Street, plus expansion and capital development spent in the quarter.
The expansion remains on budget with 36% of the total initial capital of 756 million spent and committed to the end of June .
Most of the capital spent and committed to date has been focused on the shop site area with spending on the mill expansion and paste by an expected to ramp up next year.
The expansion is on track to be completed in 2026, and we'll create among the largest lowest cost and most profitable mines in Canada.
Moving to slide 11.
A lot of district production totaled 60300 houses unimpressive 19 per cent increase over the previous quarter and the highest production meet in the past 10 years.
Costs were below for your guidance for the order in through the first half of the year driven by strong results familiar Yoki Grande with grades and stacking rates both above full year guidance.
Mindsight free cash flow increased to 47 million.
Also the highest level from a lot of over 10 years.
As previously guided production rates are expected to decrease in the second half of the year and cost increase this reflects the end up mining in the main mulatto spit as well as a decrease in stacking rates and grades like yoki variety to levels consistent with full year guidance.
With a very strong start to the year. The mulatto district is well positioned to achieve full year guidance.
I will now turn the call over to our V. P of exploration Scott RG parcels.
Thank you live over to slide 12.
John noted we continue to have exploration success across several areas, most notably them a lot of an island goals.
And May we announced an exploration updated the higher grade underground PDA deposit within a modest district, where we continue to extend hi, Greg Goldman renovation outside of currently defined reserves and resources.
At 1 million ounces of combined reserves and resources PDA PDA has already grown larger than Lucky Grande.
Given the number of high-grade step at home and respected already this year, we expect that growth will continue.
Based on the success today, we have doubled the size of exploration drilling program, a PDA and will be completing an expanded 35000 meter program and the third quarter.
The results will be incorporated into the development plan for PDA expected to be completed in the fourth quarter.
We expect that this development plan one line of significant in my life extension them a lot of.
We also announced a wide interval of gold mineralization two grams per ton already two meters and a wretched along the caproin fault.
The couple and target is located four kilometers east of them a lot is good in an area that a few limited historical exploration.
We've completed several follow up doable stepping out in this area with athletes pending.
Thus far I'm pleased to report that he was seeing similar lithology alteration installed demineralization as the first hole highlighting a significant potential of a caplin target and within the modest district.
Over to slide 13.
And I'm in goal is highlighted in her dune update underground drilling continues to extend high grade minimization across bilingual deposit.
This has been a consistent theme since we acquired bilingual mind in 2017 more recent focus over the past year as an expanded underground exploration drilling program and the hanging wall in football the bilingual deposit.
Expiration date is defining expanded on several higher grade zones and the hang on football structure. These.
Zones or in proximity to existing underground infrastructure, highlighting the significance potential bad near mine hydrated reserves and resources there'd be low cost to develop.
An excellent example of it as a newly defined perpendicular structure Vienna zone.
We defined the zone earlier this year and we're currently developing it and we'll be minding it over the coming quarters.
Highlights from the fuel development material. We've already process is 3100 tonnes grading 15.2 grams per ton.
This one was not factored into our reserves and resources nor are 2023 main plan, but it was already contributing to a production.
With over 7000 gold composite historically and recently intersected in the hang on football structures. There are numerous opportunities for the definition of additional hydrate zones and hanging on for ball across island gold deposit, which has the potential to greatly increase around she's pre-verbal meter.
At 5.3 million ounces of combined reserves and resources on gold has already tripled in size since we acquired it.
You see excellent potential for that growth to continue and that's not even factoring factoring into significant regional potential we're only just starting to test.
With that I'll turn the call back to John .
Thank you Scott.
That concludes our formal presentation.
I'll now turn the call back to the operator.
For your questions.
Operator.
We have not take questions from the telephone lines. If you have a question.
Oh.
Before making your selection.
You have a question please Patrick Star one on your devices keypad he cancelled the question.
Kim.
Darwin at this time, if you have a question there'll be a brief pause.
Thank you thank you Sir.
Questions.
[laughter].
The first question.
Cosmos Q some CIBC peace.
Please go ahead.
Thank you John right, Luke Scott and Scott.
Congrats on a very strong to to.
And on that you know as we talked about you had a very strong first half you've maintained your guidance for the year, but a bike you know have done my math correctly, you've done about 52 per cent of the vulgar.
Targeted guidance at the midpoint I guess my question is you know with young Davidson an island gull expected to be even better in the second half.
Is there a potential to exceed.
So your current guidance for the year.
Because of its Greg here I mean, there is a potential we're we're sticking with our guidance because at mulatto. So I mean, we we've highlighted that Ah.
At all salt and.
Completed mining in in September so it will be relying on some stockpiles for the second half of the year, but you can certainly no that production is gonna go down at a mulatto portion of the of the pit and then like Yankee Grande we were producing pretty high grade in the first half of the year. That's also going to come back down to guided levels in this.
Second half of the year so they they all set for the better production at.
At both islands and Y D would be lower production at a at a lot of.
Of course.
And maybe a little bit deeper at Yoki ground day, you know as you mentioned Q, what a cute too. So he was really good I read that there was positive.
Could you maybe give us a bit more color on that was it confined to a certain area was it what what was your understanding behind the positive grade like conciliation and now I'm back that it could happen again.
[noise], Hi, Cosmo yachts look here and it's really it's really a function of the drill density with regards to the you know the early stages of the pit and then as we get deeper into the pit. The drill density is is is is more defined.
So you know part of it is just Ah.
Wider spacing of the drill generosity at the top of the 50 other aspect of it as well is that we were actually getting some or outside of the block model, but pretty strong breeze as well, which was not identified in the original block model. So that also helped any overperformance I mean for the quarter I think we were about seven per cent.
Above are expected block model, great, but as we get lower into the pit what I can say you know with the current ventures that were mining relative to the tons and grade modeled from our block bottle.
We're we're very tight as far as the actual results relevant to the block model as we continue to move deeper into the pit.
Mmm.
Maybe switching gears a little bit as you mentioned a PDA development plan is coming out you know before the end of 2023.
Four 2023 as you mentioned may 15th May the explanation results I came back it was very good you know if I if I look at it looked at it correctly there were some holes that would turn 21 grandson talking points.
Granted time to 14.8 Grand sometime uncut, even cut he was still very good and you know certainly higher than the current reserve grade, which is plenty for the first time.
Time.
I guess my question is.
Number one can you remind us you know what is being included in that development plan in terms of the.
Timing in terms of cut off.
A number two what's the potential for.
Even higher grades being incorporated into this deposit.
Cause I can take that it's got a R. G. Yeah. We're in the midst we're in the midst of that expanded a drill program. So I guess the first point is we look to be a defining.
Defining our internal mid year reverse update towards the end of the program, probably mid Q3, which we would use for the the updated development plan you know I will say that that doesn't mean that they're drawing will stop at that point in time. I mean, we were we are continuing to expand the deposit in multiple directions.
We focused around PDA, one too zone, so far gaffe Victor in Australia are part of that reserve and resource and and you know represent significant upside in terms of exploration when we started to expanding on those as they are open as well.
[noise] of higher grades the more drilling we're doing the more predictive are getting with Ah targeting higher grade structures within the PDA a deposit. So there is a strong northeast control to to hydrate mineralization and there's a period. If you do a structure. So as we expand out from the existing mineralization were.
Strategically targeting those structures that we know where Ah Ah control on some of the higher grade Sir.
Mhm right.
Maybe one last question and switching gears I'm getting a little bit and then like you know certainly you updated feasibility study is coming up next month in August .
You know and and you know John I think you've done a very good job in terms of progressing.
But the I S. Now you've signed with the first Nations group.
I guess you know what's next you know I guess, you can't tell me too much more but if I looked at the 2018. The last set of feasibility study kinda outdated now.
The I R. R was 12.5%, but that one's again based on a much nowhere gold-plate. So.
So you can't tell me what the I R. It's gonna be that's coming up but can you remind us like in terms of yoga a hurdle race. How you look at these projects and and what should we expect again to the extent that you can share with us.
Cosmos out maybe I'll start on what we can expect I mean, yeah. We are putting out are updated a feasibility in a couple of weeks. So we can't speak to any specifics, but I mean, you can't expect that capital is gonna go up we we release that in 2017. The end of 2017, so there's been six years of inflation and some of the <unk>.
Inflationary period that we've seen over the last 30 years in that period. So capital is gonna go up from that perspective, but also we have a bigger resource and as a result of the bigger resource we have the ability to potentially increase the the mill throughput that we're putting ah through so just increasing the size of the of the plant in.
And both of those would contribute to to a larger operation and as a result, Ohio capital.
Hi, Cosmo, it's John here.
I I would add that.
If you if you keep in context.
It's always useful.
Habit to pull in M&A transactions when the gold price is very low where we can buy things.
At.
Cost.
At the time, we we close this transaction to acquire Karloff Goldfields.
Price was under $1100 an ounce.
It was it was virtually the bottom of the market that that would have been January 2016.
So.
The whole point of.
According at at that at that time was to pick up those ounces cheaply and I think we paid something like $22 million for what was roughly at 1.6 million ounce resource we get a quick preliminary study just to get a gauge on.
What what economics might look like and Ah, you're using a 1200 and $50 full price assumption and it's still shows something like 11 or 12 per cent IRR.
And that was not using any.
Any creative financing in order to.
Pull that are up higher.
So here.
Here, we are at 1900 dollar cold we can we can certainly use a substantially.
Higher gold price assumption, when we are going into around the economics.
This time round, so that that's gonna be one of the bigger offsetting factors and the change in scale without it.
A significant number of ounces since we acquired the deposit.
And there's more to <unk>, that's the other thing.
We always hadn't do that we we had a district scaled play here.
[noise] like 80 kilometers of of strike and and Ah virtually untested greenstone belt.
That the market by and large does not really understand but the potential Israel.
And based on preliminary work that we've been doing on a regional basis, we're more encouraged than ever at the longterm potential for this district, so for US the development of the the two pets is just to start.
It's a gateway into what we think is a very long term.
Potential for the company so.
Like most things we do.
The the acquisition of violent goals with it was a very strategic move.
It it had more than enough.
You know flesh on the bones to justify.
The expiration work, we've put in and and of course, we can point to quite a substantial success, but.
You're you're gonna see is too much the same as we did it in a lot of we're going to continue to explore and over time, we're going to add more deposits and we think there's there there's a really bright future for that part of the world and we we intend to be.
Quite a grasp of pursuing that potential over time in terms of the development Ah timeline, we we will come up with this study, but you know based on our previous guidance, we're not intending to immediately jump into this development of this my.
Don't need to do that and and it would be far better timed for us in terms of Ah allocate allocation of capital allocation of of management time.
[noise] skilled personnel that that will ultimately.
Put on that project right now, they're they're quite heavily involved in the phase III expansion of bilingual. So we want to be in a position to you know substantially derisk. He phase III expansion get most of the the capital spent and by that time there'll be a natural progression, where we'd be able to move people from either.
Gold and and onto the limit like project.
So we we were still sticking with that that objective, even though you can see you can see we're generating a tremendous amounts of free cash and we have we certainly have the capacity.
To to to do the work.
What we can do and what we will continue to do is advance the detailed engineering. So when you see us make an estimate as you will see in this upcoming study it's not a rough guess these numbers are going to be very very well nailed down and.
I I would say are.
Our estimates are are going to be highly reliable and and therefore, the IRR is something that you know we we we'd be very happy if he modeled in an evaluation that we're going to.
Ah put on this project is is going to be real added value to.
To the asset based on the company.
Great. So thanks, again, John and gene that branch out all my questions. That's all I have thank you.
Thank you. The next question is from Oh, they have become Scotiabank. Please plan.
Thanks, Operator, hi, joining animal steam and ER yeah. Congrats on the beach just a couple of questions from me. My first question is in regards to the and it's one zone I did Miss some of the comments made by Scott R. G. So apologize adapter to.
Some of your comments here.
The recent ER I didn't go inside but it had been as stolen was discovered Ah discuss pretty pretty well in depth and there was a potential to commence production from this one in the second half again, even though this one is not even in the reserves and resources is this still the geezers, that's the plan and and what potential do you see across the island going to deposit.
<unk> you know some of the stones.
Scott aren't you I can take the the the question yeah at the end of business one zone as it was discovered earlier this year, we've been able to pivot in advance it quickly in conjunction with the mind planning for this year.
Basically it's just not drawing it off ceiling, along and I highlighted it when in my commentary 3100 tons from an exploration silver 15 grams per ton that we've already.
Put into production production will be developing Ah stop somebody and it's one zone in the second half of this year disgusted.
Disgusted, there's one remains open up and down in depth, where drilling that Ah as we speak I think a real opportunity beyond just on its own I think that's a good example is the number of zones that exist in island that we need to leave now in a position to drove from underground and these perpendicular structures they occur on periodicity across the minus.
Matter of drawing them off while I had it when we got there with the mind development, which were doing now and then also looking at these no parallel zones.
So there's 3100 tonnes was that Ah already produced in in to do but that'd be kinda coming in two three okay. That's been that's been minds.
Exploration filling that we put in on DNS ones on.
Got it got it okay.
Thanks for that and just switching to Mexico in regards to be be a.
Just some thoughts on that permits so what kind of appointment would be quite will just be an addendum to the existing but I was just a moment or would you have to apply for a permit over there.
Yeah I took here so with regards to the PDA permitting I mean, with obviously was that some of the Mexican mining reform changes there, we don't see any any issues with regards to being able to obtain permits in relation to a mining for PDA from both the morning and in the melting point of view, it's within our existing because the concessions.
And you know the legacy of actually having operated underground mines. There previously would would fall just as an amendment to our existing permits to be able to continue that from all the mining perspective.
And very similar for the milling aspect with regards to what we're looking to do we did have a small milk complex or from the previous underground mining operations.
We'll have to upscale that once we do complete her mind design and and and then support the mill designed for that but also it would be again within our existing concessions and we would just be looking to seek amendments to our existing permits.
Excellent Okay. That's it for me and thanks for taking my questions.
Thank you the next question if somehow.
Hi, Tammy from Credit Suisse. Please go ahead.
Hi, Good morning, Thanks for taking my question just something maybe we haven't talked about in awhile did the trick.
[noise] assets has there been any update on that front, whether you know the.
[noise] detrition process or potentially finding a local partner and or selling those assets altogether any color on that would be really helpful things.
Yeah, we haven't provided an update on it because there really is nothing to update when there is you'll you'll hear from us.
Okay, and then just switching gears just a modeling question on Lil Yoki.
Thinking about grades in Q3 and to find out their declining sequentially is there any additional color we should be thinking about like Ah.
It's gonna fall.
To the low end of the annual guidance range Q3, and Q4 just anything that could help us modeling that those grades would be helpful.
Yeah, well you know as for our mind plan for this year, we were expecting grades drop in the second half of the year.
For our guidance so in the second half of the year will be more aligned with a reserve rate of about 1.25.
And there's no is that like is there a difference between Q3 to four is it safe to assume.
Pretty consist pretty consistent in the second half of the year and as I touched on with regards to you know our Overperformance certainly from the first half of the year based on what we're seeing with the benches that were currently mining there aligning with the block bottle for Iraq from Ah Rockville results. So we're not expecting any overperformance in the second half of the year, we should be more in line with a reserve rate of 1.2.
Two five.
Okay, Great that's super clear thank you.
Thank you.
The next question you said, Mike parking from National Bank.
[laughter].
Things guys and bread.
Your first call in a nice quarter to.
Ah just most of my questions have been answered, but with men like you know like that thank you.
Children, what to expect in terms of scale and kind of things.
Can you remind me again power cross remember, we've chatted about it in the past, but from what I recall I think the power across to the onset.
With grid power.
<unk> I, just don't remember what the numbers off the top of my head.
It might get described here, it's about four and a half cents.
Kilowatt hour.
And then you kind of addressed it but it seems like you know challenges working around smoke in the area. That's it seems to be largely kinda behind you can just give us some additional color there that.
You've noticed.
You know you know current days are on average you know better than maybe.
Maybe June months.
Yeah, Hi, Mike It's look here I mean, obviously as you'd appreciate them of forest fires are kind of an annual thing that we have to deal with with regards to our operations in northern Ontario, certainly in the summer months.
In this case I mean with regards to the fires that we had in the region no effect as far as the the fire itself to you know compromise the outfits. It was more really related to smoke and it's always a function of the wind direction.
You know these these fires can be up to 100 kilometers away from our infrastructure, but the wind direction will bring the smoke into that Ah region of our operations.
And it's always a function of our fresh air fans are to provide the proper ventilation for the underground workings, where the smoke you know the fence pick up that smoke and then bring it into the work environment and then it just it becomes difficult for our workforce brother determined whether it's an actual fire. It's just related to the forest fires. So as a result of that we had to cancel shifts.
It's inter admit it so I mean, we could have.
Eventually one shift or two consecutive shifts cancel smoke when directions change brings the smokes. It takes the smoke away from our infrastructure ventilation fans and then we're able to operate again for you know a number of days and then obviously with the wind direction change it could bring that smoke back into the region. So in this case, we just had more frequency of of.
[noise] smoke being in the region with regards to our assets, which which is what resulted in in you know cancelled shifts as a result, but it's it's something that we deal with on an annual basis.
Okay.
And then for Scott.
G person's the caplin drove resolved.
Noted that you've got a number of additional assays pending.
You have a sense of when you might be able to release those.
Yeah, obviously, we want you know the story continues to develop what we're seeing visually any way we want to have a meaningful a number of off to release. So we can and we continue stepping out on the first hole and we spoke to so you know we're continuing to drill there now we were just sort of drill so there'll be more coming out of that area over the coming months like.
We you know I would expect that we'd have Ah Ah you know somebody to talk to and September .
Okay, some kind of a head of Denver gold, so we could probably see something.
Can be around that time, you know again results are independent doesn't get them yet clumsy yeah, yeah. Okay. Thanks, guys.
That's again.
Thank you once again, please may start one if you have a question.
The next question you can carry Smith from Haywood Securities. Please go ahead.
It's happening at Luke just on the guidance for.
Talk about low or snacking reach in the second half of you killing back this time because of the range that you can come in from three or.
Or is there another reason why there will.
When it's time to.
Hi, Kerry Yeah, no. It's it's really related to the [noise] the seasonal effect with regards to the rains that we get in Mexico.
[noise] productivity wise it just it slows down or overall operations. So as a result of that the stock can reach end up being more through the rainy season.
Okay. So we can see that it's routine screening Allen maybe back in the queue for would be a lot less than a lotta eights, possibly cause it probably jones.
Yeah, It's it's primarily related to Q3, but again, it's always a function that depending on how long the rains last but usually by two four things start to return to more normal levels.
Right Okay.
For their recovery.
At the Yankee Grande how old's, the leech curves been tracking.
With the war that you've been Lee channel and when you run your niche curves.
And the honesty lab, how how they'd been looking relative to your overall recovery that you've got for the project and the tracking and mine or are they trying to better or.
Yeah, they're they're they're tracking in line, they're they've been very solid Kerry Ah you know, what I mean recoveries or plus 80 per cent certainly on on a a yankee or.
Okay.
Okay, and and Sky R. G. Just on calculus, how many balls.
Thank you might have drove him with three legs running now by the time, we get September .
Probably an additional somewhere in the ballpark of four to 5000 meters. Obviously, we're exploring a large area. There you were moving drills between homes as we continue to step out from what we know so yeah, let likelihood an additional four or 5000 meters but.
And how many calls do you have that you have.
Depending on right now.
We we we have from the second quarter annoying additional hall.
Second quarter.
Okay. Okay and then the four to 5000 years is included in the night.
Is it.
No not really I agree with you.
I didn't create smoking too much to expect with Ah between now and the next Newsweek food not including those those nine knows where it's expected to draw an additional four to 5000 meters between now and and and of her so you'd say September .
Okay. Okay, great. Thank you.
[noise]. Thank you yeah.
There are no further questions you registered this concludes this morning to call. If you have any further questions that have not be Nancy. Please feel free to contact me Scott Parsons at four one [laughter].
36899, tweaking extension 5439, thank you for your participation.
Disconnect your lines.
Yeah.
Yeah.