Q2 2023 Alamos Gold Inc Earnings Call
[music] Oh participants please continue.
This conference is being recorded so it's cool San Jose.
[laughter].
Please stand by our meeting is about to begin.
Good morning, I will 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, Luke Emo, 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 editor approved by Chris Plaza, Our senior Vice President Technical services and a qualified person.
Also please bear in mind that all the dollar amount 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 number of operational and financial records production increased to a record 136000 ounces.
Seating or guidance quarter.
[noise] 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 of course 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 of positive free cash flow as we continue to fully fund our growth projects and build our financial capacity.
I'm turning to slide four.
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.
And it is demonstrated.
Through our exploration updating me, we expect PDA to continue to grow and support a significantly longer life life.
Life minus a lot of us.
At Island Gold, we're making significant progress on the phase three plus expansion.
With the Galloway recently lowered into the shaft <unk>.
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.
Scratching the surface of the regional potential across a much larger land 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 breccia region regional target.
Which is only four kilometers from the 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.
As guided and seen through the first half of this year.
Cost of production growth from Milwaukee Grande is taking our production higher and cost lower.
Through the phase III plus expansion that island Gould, we expect production will grow to 600000 ounces per year with all in sustaining costs decreasing below the 1000 dollar per hour subtle.
Longer term.
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 .
This is 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.
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 at an 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 costs of $1112 per ounce or below the low end of the range.
The first half of the year total costs costs are down 12% from a year ago and almost the same culture down 9% as we benefit from low cost production.
Low cost growth.
He grabbed it.
We were one of the few companies to meet cough guidance in 2022 and are on track to do the same in 2023.
Reported that 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 that 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 for 35 cents per share.
Free cash flow also increased significantly from the first quarter it through a record 62 million.
Operating results and margin expansion of 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 in the quarter and includes twenty-three millions of sustaining capital $50 million, a growth capital and 7 million capitalize exploration.
Through the first half of the year capital spending total of 164 million consistent with our annual guidance.
Our bouncy 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 this solid free cash flow generation.
We expect this to continue as we internally fund their high return growth projects, while generating significant free cash flow and providing strong ongoing returns to our shareholders.
Oh, well now I'll turn the call over to our C. O O Luepke mall to provide an overview of our operations.
Thank you Greg.
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.
Grades mind 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 as 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 at lower costs and the second half of the year.
The operation on track to achieve full year guidance.
My site free cash flow increased to a record 35 million in the quarter, bringing the first half poodle 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 loss shifts due to 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.
And the hoist house substantially complete.
The Galloway that will be used for shots thinking was lowered into the shaft 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 was spending on the mill expansion and paste by and expect that 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 meat in the past 10 years.
Costs were below full year guidance for the quarter and through the first half of the year driven by strong results familiar Yoki Grande with grades and stack from the rates both above full year guidance.
Mindsight free cash flow increased to $47 million.
Also the highest level from a lot of and over 10 years.
As previously guided production rates are expected to decrease in the second half of the year and costs increase. This reflects the end of mining in the main mulatto spit as well it was a decrease in stacking rates and grades let yoki garage to levels consistent with full year guidance with.
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 expiration 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 ghouls.
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.
And 1 million ounces of combined reserves and resources PDA PDA has already grown larger than Lucky Grande.
Given the number of high Griggs devotedly and respected already this year, we expect that growth will continue.
Based on the success today, we have double besides where 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 mine life extension them a lot of us.
We also announced a wide interval of gold mineralization two grams per ton already two meters and a wretched along the caplin fault.
The capital and target is located four kilometers east of them a lot of 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 and styles of mineralization at 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 mineralization across bilingual deposit.
This has been a consistent theme since we acquired bilingual mind and 2017 more recent focus over the past year as an expanded underground exploration drilling program and the hanging wall and football with my uncle deposit.
Expiration date is defined and expanded on several higher grades zones and the hang on football structure. These.
These zones are 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 VNS one 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 prozac 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's 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 football across the island gold deposit, which has the potential to greatly increase or ounces per vertical meter.
At 5.3 million ounces of combined reserves and resources on gold has already tripled in size since we acquired it.
Excellent potential for that growth to continue and that's not even factoring factoring into significant regional potential, but 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 will now turn the call back to the operator.
For your questions.
Operator.
We have naughty 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 to cancel the question.
Q.
Darwin at this time, if you have a question there'll be a brief pause.
Stinker.
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 too.
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 if I have done my math correctly, you've done about 52 per cent of the full yet.
Target of guidance at the midpoint I guess my question is you know with young Davidson and I, Thank God expected to be even better in the second half.
Is there potential to exceed.
So your current guidance for the year.
It goes off of its Greg here I mean, there is a potential we're we're sticking with our guidance because a lot of I mean, we we've highlighted that Ah.
At all sorts of we've 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 the second half of the year, so that they'd be all set for the better production at a.
At both islands and Y D would be lower production at a at a lot of.
Of course.
It may be 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 confined to a certain area was it what what was your understanding behind the positive grade conciliation and on that today.
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 a wider spacing of the drill generosity at the top of the pit the 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 what the current benches 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 relative to the block model as we continue to move deeper into the pit.
Mhm of course.
Maybe switching gears a little bit as you mentioned a PDA development plan is coming out Ah 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.
Put the time in 14.8 Grand sometime uncut well even cut it was still very good and you know certainly higher than the current reserve grade, which is plenty for the good 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.
Timing in terms of cut off and and number two what's the potential for.
Even higher grades being incorporated into this deposit.
Cause I can take that Scott R. G.
Yeah, we're in the midst we're in the midst of that expanded a drill programs I guess to be on the first point is we look to be Ah Ah defining our internal mid year reverse update.
The end of the program, probably mid Q3, which we would use for the the updated development plan you know I will see that that doesn't mean that the 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 Ah zone, so far gap.
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 more predictive we're getting with Ah targeting higher grade structures within the PDA a deposit. So there is a strong northeast control to a high grade mineralization and there's a period. If you do a structure. So as we expand out from existing mineralization were.
Strategically targeting those structures that we know where Ah Ah control on some of the higher grades are.
Mhm right.
Maybe one last question switching gears I'm getting a little bit and then like you know certainly you updated feasibility studies coming out next month in August .
You know and and you know John I think you've done a very good job in terms of progressing.
No D I S.
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 lower gold price. So.
I'm sorry, you can't tell me what the I R is 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 show.
[noise] Cosmos out maybe I'll start on what we can expect I mean, yeah. We are putting out are updated as soon as the building 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 really least that in 2017. The end of 2017. So there's been six years of inflation and some of the pie.
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 plants.
And both of those would contribute to to a larger operation and as a result higher capital.
Hi, Cosmo John here at high tide.
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 Carla Goldfields the gold price was under $1100 an ounce.
It was it was virtually the bottom of the market that that would've been January 2016.
So.
The whole point of.
[noise] at at that at that time was to pick up those ounces cheaply and I think he 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.
<unk> showed something like 11 or 12% IRR.
And that was not using any.
Any creative financing in order to.
Pull that are up higher.
So here we are at 1900 dollar cold we can we can certainly use a substantially.
Higher gold price assumption when we are going into run 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 come that's the other thing we we always had in view that we we had a district scaled play here, there's something 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 long term potential for this district, so for US the development of the of 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 I I I 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 exploration 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 us we're going to continue to explore and over time, we're going to add more deposits and and we think there's there there's a really bright future for that part of the world and and we 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 develop into this my.
We 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, you know the the.
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 island gold. So we want to be in a position to you know substantially derisk. He phase III expansion get most of the Ah the capital spent and by that time there'll be a natural progression, where we'd be able to move people from Ah.
[noise] and 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 Ah Ah rough guess these numbers are going to be very very well nailed down and and so I I would say are.
Our estimates are are going to be highly reliable and and therefore the IRR.
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 ER.
To the asset base of 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 go ahead.
Thanks, Operator, Hi, Jordan animal steam and ER, yeah. Congrats on.
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 beat some of your comments here.
At the recent ER Island goes like this had been it's own 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 an episode the resources.
The Geezers, that's the plan and what potential do you see across the island going to deposit to discover some of the stones.
That's Scott aren't you I can take the the the question Yeah. The and then this one zone as it was discovered earlier this year, we've been able to prevent and advancing quickly in conjunction with the mind planning for this year.
Basically sitting on drawing it off ceiling, along and I highlighted when in my commentary 3100 tons from an exploration filler 15 grams per ton that we've already put.
Put in a productive production will be developing Ah stop somebody and it's one zone in the second half of this year.
The the zoning remains opening up and down in depth, where drilling that as we speak I think the 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 do but we've now in a position to draw from underground and these perpendicular structures.
Her on periodicity across the line as a matter of drawing them off while I had it when we got there with the mine development, which were doing now and then also looking at the snow paranormal 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 D. N S. One zone.
Got it got it okay.
Thanks for that and just switching to Mexico in regards to P. D. 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, 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. They were previously with Wood falls, just as an amendment to our existing permits to be able to continue that from other 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.
Previous underground mining operations.
We'll have to upscale lab 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 Pennsylvania. Please go ahead.
Hi, Good morning, Thanks for taking my question, just something maybe we haven't talked about it in a while that the Turkish assets has there been any update on that front, whether you know the arbitration 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 Les Yoki.
Thinking about grades in Q3 and to find out their declining sequentially is there any additional color we should be thinking about like our grades gonna fall like the low end of the annual like the guidance range in Q3, and Q4 just anything that could help us modeling that those grades would be helpful.
Yeah, well you know as per 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 her reserve rate of about 1.25.
And there's no is that like is there a difference between Q3 and Q4 is the kind of 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 are aligning with the block bottle for Iraq from our actual results. So we're not expecting any overperformance in the second half of the year, we should be more in line with a reserve grade of 1.2.
Two five.
Okay, Great that's super clear thank you.
Thank you.
The next question you said, Michael Parkinson National Bank.
[laughter].
I think guys and bread.
Your first call and a nice quarter to.
Ah just most of my questions have been answered, but with men like you know what you think you've spent a good show.
And what to expect in terms of scale and kind of things.
Can you remind me again power cross remember with each other about it in the past, but from what I recall I think the power cross for the onset.
With grid power.
Greenlee low I, just don't remember what the numbers off the top of my head.
Yeah. It might get described here, it's about four and a half cents.
Kilowatt hour.
And then you kind of address it but it seems like you know challenges working around smoke in the area. That's it seems to be largely Jenna behind you can just give us some additional color there is it.
You've noticed.
You know you know current days are on average you know better than me.
Maybe June was.
Yeah, Hi, Mike It's look here I mean, obviously as you'd appreciate I mean 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 you know no effect as far as the the fire itself to you know compromise the outfits. It was more really related to smoking, 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 rather determined whether it's an actual fire or it's just related to the forest fires. So as a result of that we had to cancel shifts.
It's it or admit it so I mean, we could have.
Essentially one shift or two consecutive shifts cancel smoke wind 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.
[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.
Yeah.
And then for Scott.
G person's the caplin drove resolved.
Notice that you've got a number of additional assays pending.
You have that sense of when you might be able to release those.
Yeah, obviously would want you know the story continues to develop what we're seeing visually any way we want to have a meaningful a number of a horse 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.
Ah Ah.
You know I would expect that we'd have Ah you know somebody to talk to and September .
Okay, so kind of headed Denver gold, so we could probably see something.
Can be around that time, yeah again results are dependent as we get them yet clumsy yeah, yeah. Okay. Thanks, guys.
Yeah.
Thank you once again, please may start one if you have a question.
The next question you can carry Smith from Haywood Securities Peace plan.
He's operating at Luke just on the guidance for.
Oh yeah.
Talk about low or snacking reach in the second half I you tell them back.
Cause of the rain means that you can come in from three or.
Or is there another reason why there will.
When it's time to to.
Hi, Kerry Yeah, no. It's it's really related to the the seasonal effect with regards to the rains that we get in Mexico.
Productivity wise it just it slows down or overall operations. So as a result of that the stocking rates end up being lower 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 Brian Jones.
Yeah, It's it's primarily related to Q3, but again, it's always a function of 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 me Yoki Grande how old the leech curves been tracking.
With the war that you've been lead channel and when you run your niche curves.
And the honesty lab, how how they've been looking relative to your overall recovery currently you've got for the project and the crackling in mind or are they trying to better or.
Yeah, they're they're they're tracking in line, they're they've been very solid Carrie you know I mean recoveries or plus 80 per cent certainly on on a a yankee or.
Okay.
Okay, and and Scott R. G. Just on calculus, how many calls do you think you might have building 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 holes as we continued to step out from what we know so yeah, what likelihood additional four or 5000 meters, but.
And how many calls do you have.
Athletes pending on right now.
Oh, we we we we have from the second quarter annoying additional.
And the second quarter.
Okay.
And then the four to 5000 years is including the Michaels isn't it.
No not really.
Yeah, I didn't create smoking too much to expect with Ah between now and the next Newsweek food not including those are my nose, where it is expected to draw an additional four to 5000 meters between now and and and have her say September .
Okay. Okay. Okay, great. Thank you.
Thank you yeah.
There are no further questions you registered at this time. This concludes this morning to call. If you have any further questions that have not be Nancy please feel free to contact Mister Scott Parker.
For one thing.
36899, tweaking extension for three nine and thank you for your participation you right.
Disconnect your lines.
[noise].