Q2 2023 Kinross Gold Corporation Earnings Call
Good morning, My name is Rob and I will be your conference operator today at this time I would like to welcome everyone to the Kinross Gold second quarter 2023 results conference call and webcast. All lines have been placed on mute to prevent any background noise. After the speakers' remarks, there will be a question and answer session.
If you'd like to ask a question. During this time simply press star followed by the number one on your telephone keypad. If you would like to withdraw your question again press the star one.
Chris Lichten Hill, Vice President Investor Relations you May begin your conference.
Thank you and good morning with US today, we have all Rawlinson, president and CEO and from the Kinross Senior leadership team, Andrew Free Rural Hudson Bird that Julio Jeff Cool.
Please discussion of the risks and uncertainties, which may lead to actual results different from estimates contained in our forward looking information.
Please refer to page two of this presentation. Our news release dated August 2nd 2023, the MD&A for the period ended June 32020.
Three and our most recently filed yeah yeah.
All of which are available on our website.
I'll now turn the call over to Paul.
Next Chris Thank you all for joining us.
This morning, I will provide a brief overview of our second quarter call.
Comment on our outlook and update you on our ESG initiatives.
I will then hand, the call over to Andrea to walk through our financial performance and then Claude.
Discuss our operating performance and projects.
We had a great second quarter contributing to a strong first half of the year positioning us well to meet our full year guidance.
Chassis, Eric it's you and La Coipa delivered excellent.
Excellent results, representing approximately 70% of our production in the quarter.
With an <unk> of approximately $1000 per ounce.
Strong free cash flow.
For Q in La Coipa.
Good performance was driven by strong grades and recoveries.
At Tasiast and <unk>.
<unk> continued during the quarter and the operation delivered record production.
Nearly 160000 ounces.
Sales of approximately $650 per ounce.
Construction of the 2014 expansion project is now complete.
And we are well underway towards sustaining higher throughput levels by year end.
Our U S operations delivered on plan with stronger production over the prior quarter.
While cost of U S assets are expected to increase in the second half of the year.
The mines are performing as planned and we continue to work towards lower production next year.
With the startup of man show.
Favorable mine sequencing in Nevada.
And Matt Joe <unk>.
Construction activities are advancing well.
And the project remains on schedule and on budget.
To begin contributing high grade ore to the Fort Knox operation.
In the second half of next year.
At round Mountain, we remain excited about the future.
We are encouraged by ongoing optimization for the phase <unk> open pit and.
And expect to complete the work later this year.
Work on the underground decline at phase <unk> is progressing well.
And we are on schedule to begin definition drilling early next year.
As you will see in the video link provided in our press release.
We see potential for a lower cost bulk underground mining operation at Spacex with further exploration upside.
Coal Hill, our satellite deposit at round mountain.
<unk> to deliver strong exploration results.
Further confirming our view that there is potential for additional high margin underground mill feed at gold Hill to supplement phase excellent.
And finally.
We continue to make excellent progress at great bear.
And the work we've done continues to support our view that this development project is expected to become a top tier margin.
We currently have 11 drills onsite and the focus has been on extending our underground resource below the initial open pit resource.
We will be updating our resource statement at year end and.
And expect a meaningful increase to the underground resource.
We are pleased to have recently signed an amended advanced exploration agreement with our partners.
Wireless gang and Laxalt first nations.
Whose traditional territories the project is located.
This amended agreement reflects the changing nature of activities from surface exploration.
Two underground exploration as the project advances.
A great bear the path is clear as we continue to focus on advancing the project through permitting and construction.
Ned will elaborate on other activities at great Bear later on the call.
Year to date, we have produced over 1 million ounces.
And we remain on track to achieve our production and cost guidance for the year.
We strengthened our balance sheet during the quarter.
And at current gold prices, we expect this trend to continue.
Our quarterly dividend remains in place.
Which offers a competitive yield of nearly 3%.
Since 2021, we have repurchased $400 million of shares.
Representing 8% of our shares outstanding.
Overall, we view the buyback program is very successful.
However in accordance with the plan, we announced last fall.
We have paused share buybacks.
On the changed by one of our rating agencies, moving our outlook from stable to negative.
As a result, we are prioritizing debt repayment and in Q2, we repaid $220 million of debt.
And we plan to repay the remaining 100 million drawn on our revolver in the coming months.
Going forward, we will continue to review our capital allocation priorities in the context of the prevailing environment.
Lastly, I'd like to highlight our latest update on ESG initiatives.
We recently published our third annual climate report.
Which details climate related disclosures for last year.
The report also outlines our progress towards meeting our climate related goals.
And provides detail on our climate change strategy.
And our plan to reduce greenhouse gas emissions intensity going forward.
Notably in the report we provide an update on our Tasiast solar project.
Which we expect will be delivering 34 megawatts of renewable energy by the end of this year.
For context.
34 megawatts of clean energy is the equivalent to removing more than 10000 gasoline powered vehicles from the road.
For each year of the operation.
We continue to be very proud of our work in this important area.
With that I will now turn the call over to Andrea.
Thanks, Paul This morning, I will discuss financial highlights from the quarter provide an overview of our balance sheet and comment on our guidance and outlook.
As Paul noted our second quarter performance was strong with production and cash flow improvement over the prior quarter at plan and over last year.
We produced 555000 ounces with production benefiting from seasonality in our business.
<unk> mine sequencing at Targa, Chew and ramp ups at Tasiast and La Coipa.
Gold sales of 533000 ounces are in line with production.
Mmm.
Cause to come back down next year.
You too are adjusted earnings per share with 14 cents and adjusted operating cash flow per share with 37 cents, both improving over the prior quarter.
Free cash flow for the quarter was $247 million or $177 million, excluding working capital changes.
Turning to the balance sheet, our financial position continue to improve in the second quarter and remain strong.
We ended the quarter with $478 million in cash at approximately $1.9 billion of liquidity, both improving over the first quarter.
<unk> declined by approximately $220 million during the quarter as we pre repaid $200 million.
Balding credit facility as well as $20 million on a Cassius loan.
As Tom mentioned, we plan to prioritize repayment of the remaining 100 million on a revolver. This year further D Lee, Virginia, our balance sheet.
Are trailing 12 months net dot to EBITDA ratio improved as a quarter and and is now 1.3 times in a current called prices is expected to decline further through the remainder of the year.
At the end of the second quarter, we announced a debt refinancing whereby we issued $500 million in senior notes to in 2033 to replace our outstanding 2024 senior notes at a comparable interest rate.
Following first half results, we remain on track to meet our full your production and cough guidance.
Shaved approximately 49 per cent of our all your production guidance in the first half.
In the second half remains on plan.
On inflation as a reminder, we factored a five per cent increase into our cost of sales guidance for this year relative to pull your costs and 2022 and we still believe this is inappropriate estimate.
So far this year oil has been trending positively.
Whoever it is continues to be offset by higher royalties as a result of stronger gold prices.
Capital expenditures remain on track and our Capex forecast for the full year remains roughly evenly split between sustaining a nonsustaining items.
In summary, we are reaffirming our full your guidance for production in the range of 2.1 million ounces <unk> $970 per ounce and a sick of 1300 and $20 per ounce, all within a plus or minus five per cent range.
I'll now turn the call over to clot to discuss our operation.
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Andrew monarchy.
<unk> Mister <unk>.
High production and lower costs will be 321.
All of our minds.
Mmm.
So I was used to lose another robust production.
Thousand ounces.
<unk> $3 an ounce.
<unk>.
Alright.
Covers.
Many times you can visit in June .
Continues.
In addition.
Bruce.
<unk>.
Launches achieve superior of 24000 pounds per day.
And I'm also reached.
28000 tons per day.
Locations.
Starting the operations ability to achieve the expenditure.
Our purpose is now I'm, just going to sound stupid, which we expect to achieve by the end of the year.
<unk> project.
Cause it seems to be complete.
<unk> will advance the focus on the installation of the photovoltaic modules.
We have now is 265000.
Total 80000 panels plan.
Electrical work is underway and planning.
Planning for commissioning has begun.
This project is on schedule for the completion by the end of the year.
<unk> production this dressing well.
For your plan.
What did you do after four months on drilling recover your driving production on phone optimization continues through the second half of the year.
Continues to contribute robust because it.
It was the lowest cost model portfolios.
<unk>.
Alright first off production of <unk>.
I'm trying to meet off for you a production gardens.
40000 ups.
At <unk>.
Recovery.
And the production and of course, we do too.
Two three production is expected to be the strongest for the year.
<unk> no I agree to keep the areas in the southwest.
<unk>.
<unk> remains on track to achieve his 40th production.
A range of 580000 homes.
Now moving to the U S operations.
<unk> you too.
On track without food you got it.
<unk> cost of these <unk> are higher relative to the rest of the portfolio.
Expect it to increase in the second half of the year before declining next June .
Beginning with footnotes to do production was higher quarterly reports due to plan high processing Bruce.
<unk> and a benefit from some additional ounces from unplanned or materials in Kansas.
<unk>.
<unk> advanced well in a footnote small modifications to accommodate all from the major project.
Two are on track to begin processing high-grade <unk> the second half of next year.
At Bowl Mountain production improved over the <unk>.
<unk> realized in two to four.
The way the challenges you to one.
<unk> second.
Starting rates.
Mountain, which is our plan production quota, which was relatively flat compared to Q1.
As Andrea mention.
<unk> around mountain restricted to interest in the second half the year before the timing issue.
W investment period, Rep, Sir and <unk> to the lowest of areas with higher grades.
For that I will not <unk>.
Thanks <unk>.
Followed by elaborating on <unk>.
Comment on <unk>.
Finishing with an update on <unk>.
Wow.
Period of elevated cost.
Want to take a minute to update you on why we really excited about the future of problem ma'am.
Following a period of investment and the new faces.
And has the potential to be <unk>.
<unk> to the 23.
With higher margin and strong returns on invested capital.
Here's how we currently envision the future.
We are currently my niece for the remaining portions of open W. Two which is expected to maintain our current production level 220 24.
<unk> and <unk> and to 2025 2026.
After mining in T W too.
Setting the option to transition to savings S, which.
Could sustain opens his production to the early twenties thirties.
Parents with open pit mining.
We could also potentially begin underground productions from phases X angled Hill later in the decade.
We are pleased with the ongoing work in the following areas.
S ongoing authorization or it gets showing encouraging results with lower capital intensity and Lois.
Driving improve economics.
With our fine with you.
I'd say his ex construction of underground exploration bitcoins progressing well.
$350 does all of this for.
My name is on track to facilitate the sort of definition drillings early next year with production.
Envision to begin simulate 2026.
The future from Mount and continues to take shape, and we look forward to sharing more positive developments over the coming quarters.
<unk>, which is located 70 kilometers away from the round mountain centered.
Continue to see strong potential for a higher grade underground mines supplement introduction Sanchez S.
This year has confirmed an 800 eater.
Strike extension with multiple hydrate intercepts during.
During the quarter, we had our best result, today's hearing more than 40 grams per ton over approximately two leaders.
With continued exploration success of Gold Hill, we look forward to ultimately, bringing this high degree satellite deposit into our broader plans that round mountain.
Moving to Nashville.
August activities remain on schedule and on budget.
We're pleased to report the mine operating permits we received your second call.
Contracting and procurement activities are now complaint and construction and mining activities are ramping up.
Construction on the new modifications at Fort Knox to process, the national or has <unk>.
And the Kinross operations team is now fully sir.
While onboarding of business partners support the mining and oil transport is ongoing.
We are excited about bringing his hydrate margins project.
Into production next year.
As curlew in Washington State results from ongoing underground exploration continues to confirm.
Insurance and continuity with high priority target areas.
<unk> will continue throughout the third order with the aim to build on the resource proximal growth.
Notably yesterday's release includes the best <unk> in the past 10 years.
With home 11, 48, intersecting 41 grams per ton over two meters.
We really excited about this project.
Continuing to advance our work over the coming quarters.
Moving to the update on great there in.
In the second quarter.
<unk> to make excellent progress on several fronts.
Starting with exploration.
Currently 11th you've reached operating on site.
You too <unk>.
Approximately 66000 meters.
The year to date totaled approximately 96000 years.
Exploration is focused in that area 500 meters.
Kilometers below surface at the L T <unk>.
And drilling efficiencies since introducing directional drilling has been enhanced.
Message decreases the amount of drilling required to reach these targets improving productivity and cost per litre bill while also allowing for a more efficient and precise.
<unk>.
With a current focus on resource expansion recent results are encouraging you continue to confirm hydrangea mineralization exam.
<unk> B R 805, which consists of 56.7 years at agreed of 19.3 grams per ton.
Vertical depth of 738.
With the success of our drilling campaign. So far this year, we have seen meaningful grow in the underground resource.
Outside of Drooling. Other activities are also at night as well.
Feasibility level engineering.
<unk> coin infrastructure is approximately 70% complete.
Physics and soils geotechnical drilling.
And the procurement process for long lead items, such as they can.
Restructured and water treatment plant.
Three engineering firms with significant experience in Ontario has been engaged to support our strong and house on your screen.
Engineering and fuel for campaigns for the main project continue Jason's well with the results of this order to be included in our preliminary economic assessment next year.
Permitting activities are also progressing well, including initial reviews by the impact assessment agency of Canada.
The draft initial project description.
I will now turn it back so Paul.
Thank you Dan.
Concluding.
Want to acknowledge Ned.
<unk> tore his significant contribution to kinross over the years.
So thank you ma'am and all the best in your next chapter.
Closing.
Goals.
And have delivered a strong Q2 in first half.
On track with our plans.
You're excited about <unk>.
Strong production profile.
January significant cash flow.
We continue to return capital to our shareholders through an attractive <unk>.
We have an exciting pipeline of exploration and development opportunities.
And finally.
You're very proud of our commitment to responsible mining.
It is a leader ESG performance within the industry.
With that operator, now I'd like to open up the line for questions.
At this time I would like to remind everyone in order to ask a question Press Star then the number one on your telephone keypad.
And your first question comes from the line Joshua from RBC capital markets. Your line is open.
Yeah, Thanks, very much uhm with the disclosure of the great Bear underground resource upside I'm, just wondering if it'd be a bit early is there a read through sheer to potential design changes or is this more so confirming some of the.
My life extension that was.
Signaled with the with the original.
Study.
Hi, Good morning. This is.
It's actually the modern so it is an extension of the resource for growing the resource in the underground and you'll you'll see the upgrade with ear and resources pretty exciting.
The designers.
Earlier.
Okay.
With an underground mine and starting with.
<unk> tonnage coming mainly from the <unk>.
Underground in transition into from 100 per cent underground mines <unk>.
The reason risk rooms.
<unk> <unk>.
We're actually seeing the green increases.
It's very exciting.
In the coming quarters.
And a few users.
And on the outlook for <unk> the grade in the second quarter continued to be pretty strong.
What is the potential for that great to continue even as throughput wraps up in the in the second half sort of as a follow up to that.
The prior mind, if I had outlined a larger drop off an upcoming three years for for the existing guidance is there any opportunity to start over.
Sequencing that with some of their performance we've seen this year.
The Justice, Georgia, So we have seen obviously the great in the second quarter was.
We are balancing.
Besides this money is likely to hit a plan. So we were able to increase our stockpiles slightly and with that very well.
Great expectations for you see it so strong in Q3 the dropping.
<unk>.
And then as we go into 2024.
Going back into the.
The month plan.
Got a little bit more.
Okay. Thank you very much.
And your next question comes from the line of <unk> from Credit Suisse. Your line is open.
Hi, Good morning, Thanks for taking my question just going back to some of the comments around debt reduction is there a particular lepers target that you're looking at another buybacks.
I think the parameter was 1.7 times EBITDA I believe on my Matthew are already below that are slightly below that just curious on how are you thinking about maybe a targeted elaborate ratio.
Sure It says Andrew.
The 1.7 at.
Talked about one finally.
The enhanced by that question where are <unk> at.
At that point in time and that was just part of the design of the plan, which was always meant to protect the balance sheet and our investment grade.
Uhm, we are aware of that now.
Just around or just slightly below one point in time.
The second quarter, we were 1.65 at the end of Q1, so the improvement.
Sort of half related.
Option in half.
That.
And you know our priority coin for right at home and I, both at an arm and a remark.
First of all to repay the remaining 100 million, we have gone on that credit facility.
That's in addition to the 200 <unk> during the corner.
Beyond that we would you know target.
Kayla starting to take down the temperament.
<unk>.
Check out to finance the cash portion of the great acquisition.
So we can start repaying that uhm at any point in time.
One would be would be great.
Expect to get their start towards the end of the year. So we'll see what we got here, what's called <unk> Sir.
And then speaking with the rating agencies I don't know if you have but have they communicated like what it would take to get back to a stable operational outlook.
I guess, maybe it's helpful just to to comment on time, and how I mean, it's S&P that note that to negative outlook and how they look at it it's a it's a pretty strict.
<unk>.
Drive to the negative outlook I think is a 30% chance.
That we words.
Be downgraded in in that lower price scenario. So they were using a 1400 longterm area. So.
We don't agree with that negative outlook and in a lower price scenario that <unk> that we would call to protect the balance sheet.
But you know it is what it is in transit their writing and <unk>.
<unk> <unk> for taking now in terms of debt repayment Apple.
<unk> at <unk> dot outlets reversed all else being equal but in terms of when they might review again, it's typically at least a couple of corridor. So I would expect that'll be sometime next Jerry thereafter.
Extra line.
Okay. That's super clear, maybe just switching gears quickly to <unk>. It looks like the grades are coming in pretty decent and it sounds like it's going to be even better in Q3 as you get deeper into the pit just curious on when you say higher grades in the second half are we thinking like something close to what.
Was achieved in queue for blaster like the 0.5 grams per ton of that kind of in the right range or just trying to get some color on modeling Kirk at two in the second half.
Oh, that's a good 0.5 would be a little bit high.
Mmm average for the <unk> for one so we would anticipate.
<unk>.
But and dropping back down in queue for.
The secret to receive a complete your lost Ya.
We do see a drop off.
And then next year.
For the whole year, the greatest drunk down.
<unk> <unk>.
Quite a bit he needs a phone plan on picking up the phone.
Cause we do the additional stripping.
22.
Pick up again.
Okay, great. Thank you very much.
And your next question comes from the line of Anita Soni from CIBC World markets. Your line is open.
Hi, So I've got a lot of sort of fine tune modeling questions, but for someone to say congratulations on the good Carter and it's good to see you guys package uhm getting within your guidance range for the year Uhm. So I'm happy to you just to follow up next step is that you said, a slightly higher or like is that like a one turn or is it is it.
Higher than it is.
Okay.
<unk>, yes, it's available.
A little bit.
And the great as well, so a little bit lower Thanksgiving because we're in the five G Lebanon.
Alright.
That's why we sounds production too.
Sure It comes with.
Relative.
Okay.
<unk>.
Yeah, just for the year, so I think.
Now here.
What kind of like 1.3 and a quarter.
Uhm I'm not this quarter I guess, there's a little bit lower it's one of the questions I wanted to ask but when you're a little bit slower. This quote on a stripper showing and <unk>.
I'll have to get back to you though.
Yeah.
Great.
Sir.
Alright, you're on track.
Okay.
Production.
He was on track.
Alright.
Gentlemen, and either.
This is ma'am.
I can help you.
With a mind boggling as you know <unk>, there's the north region, which is lower grade.
Almost no shrimp.
On the south side, which is the zebra.
Hunter Green and higher stream and what's what's claud is including <unk>.
24, where you're gonna be mine anymore.
North area of the <unk> as we strip.
13 and 15.
So the greed in 2024 will be slightly lowered.
<unk>, we're north of 500000 ounces.
So.
That's in <unk>.
Potentially in 2025, we get back to some other and maybe a little bit later than this here about 5005.
550000 ounces.
I hope that helps.
Thank you, Okay, and then just moving onto our evolve in round I think I guess.
Just trying to understand.
Some of the movements in terms of.
You said that cost could go higher in the back half of the year, which I guess, but is it is it related to is it related to the strip ratio that that's happening there and and I just noticed like things like the you know on.
Mountain New processing card came down could you talk about that uhm, and what's driving that and will that be sustained.
Alright.
I need it.
Alright, it's more accounting.
<unk>.
Which account and <unk>.
Okay.
I think we might want to take off one, but I'll head over to Andrea.
Yeah.
Aw.
Alright, we're gonna say I forgot I had to make I had to like take off a significant amount on the inventory to to make a balance that.
Hi, I was driving apathy and when will that reversed. So I think it was like $60 million to connect the call. So I can ask us.
Yeah, I mean, we we've we've always said we expected caught that round to be you know to stay elevated netgear.
They were down.
So we do tend to be higher in the second half here at at at my Internet is really related to our accounting and it kind of peaks and if that can happen in here. So we expect a call to come back down in 2024.
Alright.
<unk> <unk> nothing in 2024.
Yeah, I think this year its counting it's not really representative of cash flow.
Inventory accounting effect and next year will be moving into a different portion of his head.
With.
<unk>.
Yeah, I think we may still have this inventory impact next year, but we don't expect it to be a significant L. As in a second half S. S N.
N as well.
Okay Alright.
Alright.
Okay.
Yeah.
Yeah, I think so but yeah. Thanks, Sir thank thank God clinic headquarters.
And your next question comes from the line of carrying Mccurry from Canaccord Genuity. Your line is open.
Good morning, everyone. Just a question on the Tastiest ramp up.
In this plan to just over 18000 times a day.
Projects complete and I know you're wrapping it up but I was just put in July and is there any guidance you can give us what we should expect the Q3.
Oh really.
Put in July .
We did have.
Uhm in June and July .
We didn't mention that we had to shut down.
June .
A little bit into the June July crossover.
So we have some <unk>.
<unk>.
Mmm.
Things with some five G.
Once we got going again.
Those.
<unk>.
Would we not doing is focusing on.
In the back into the phone.
Make sure that we don't.
The system too much.
That sounds up for.
Back into the game.
<unk> plan.
So should we be assuming something like 20000, Pennsylvania, two three or is it too much.
What are we said we would average between 20 and 21.
21000 for the whole year.
<unk>.
Okay, Great and then maybe on the solar plant Uhm can you quantify.
Cost savings you'd expect to see that.
Yeah, let's.
I mean, we were asked to get back to you on the.
A number two on the.
Cost per ounce, we wanted to do.
For.
Considerable savings on our fuel costs.
Obviously it is b.
The <unk> operation.
Alright.
The numbers.
He noticed something else.
Just one.
Savings as well.
Great. Thank you.
And your next question comes from the line of <unk> from Scotiabank. Your line is open.
Good morning, everyone. Thank you so much for taking my questions I can uhm.
<unk> second.
Cough.
Can I have circled back to the the resources just maybe not can you just remind me the underground at great Bear when you reported the results I think it was underground of about $1.3 million, what's that and the email between you know.
Check about the 500 meter.
I'm just looking at your cross section on page 23, and I'm, just trying to understand for the resources.
Report at yearend 2023 four is.
Is that gonna take between 500.
Thousand meter level.
Yeah. Good morning, we got we got your name right. This time right [laughter] Alright as me.
[laughter].
Yeah. Thanks for your question that's a that's a great question. So I'm just looking at the numbers here so.
<unk>.
<unk> was approximately 1.7 million ounces.
In your ear you got it right like that that's down to the to the 500 theater Mark based on what we got from drilling and.
Like I mentioned in your presentation. Our focus now is from 500 meters below that.
Down to one kilometer. So we're very focused and that directional drilling is amazing it's saving us a lot of time, so we're bringing a lot of potential answers here.
What we see is that with a year and resource Stevens when I see Tania is is.
Increase in the underground resource so.
You know be be watching for that number that will come by by year end.
And would you be able to take care of some sort of guidance on what we should expect.
Like we can have.
Yeah.
<unk> <unk> <unk> <unk> <unk>.
<unk>, we haven't put a technical report around it yet so.
It's arranging.
Paul is it's ranging you know.
There is again like when all set there is no technical report.
Based on <unk>.
Our vision based on what I look at from my experience.
I look up from the drilling and when I see what's on the screen, it's it's potentially.
When I saw it now is looking like 500000 increase in approximately.
Underground resource and targeting continuous growth into your end.
Okay, Yeah that's helpful.
And I think is the other point that that made earlier is.
<unk> [noise].
Generally higher grades.
Part of that is how we design Ya.
<unk>.
And a diet for great at an apartment a pet so we're seeing a rebalancing.
We focus on the underground which is dragging the.
Yeah, a bridge for it up as well.
Okay.
This is all the news.
Maybe just on on your own you know thinking of an overall for the company.
Can I assume that at your <unk> when I look at your resource category can I assume that you know the expiration of success, you're having a great bear the expiration successor called Hell and at currently can I expect the three projects to have.
You know increases and resources.
Yeah for sure there will be.
Increases in resources I'm not sure if we're gonna catch it up and.
Model and an update for <unk> should the drilling is there and and you know we bring you in and we look at what potentially could be but but the other two assets great bearing currently we're looking at an increase in resource yes.
Okay.
Won't have.
<unk> and an underground resource yet, we're definitely seeing the drawing and.
For most of the time.
Yeah.
<unk> 2024.
And then just maybe just if I could ask about Jesse overall reserves I know, it's just half a year has gone by that you know any guidance on how you're seeing your dwelling at your current mine site to see whether reserves can be replaced at those assets.
It's our.
Tanya Lake we we.
We bring announcements from.
Not being in fern or we call it countered category for an internally.
Internally in Kinross, and we bring that into insured and then.
<unk> and bring that into indicated in into measured that is ongoing at home.
That's right our focus mainly when it comes to resources growing Greek there is you know.
Uhm again after that is growing currently EM with the underground decline that round mountain, we really want to drill from depth as you know.
Really progressed were underground now, but thank you for a little bit.
Time to get there and set up.
<unk> X from underground that will bring in more resources and then we continued to Germany. For example, as an example in Fort Knox in Britain.
Some of the resources into into reserves.
Fort Knox.
Operating plans that we have.
Okay, Sir I should take that as a bit too early for you to comment on whether it's a replacement is occurring.
Yes, yeah.
Okay last next quarter and then if I could just ask the final question I guess, Sam you know Andrea touched a little better about.
Just the inflationary pressures cost structure you the same five sat in as inflation and 20th October 2022, you mention that you are thing Uhm Noah N O a.
Oil prices diesel prices, you know positively helping you cough upset by royalties can I just touch on the other components are you seeing any relief or any lower pricing and other consumables Weber anything else that you know relative to.
What is that you that you.
You may not be experiencing at now cause you may have inventory.
You know are you seeing any relief and other portions of the cost structure.
<unk> I mean, we are seeing some relief in certain areas.
Really been all set going the other way Oh, you know overall, we're not expecting to see the cost.
Any different than what we factored into guidance, which words.
Per cent increase over.
We've seen some increases the maintenance.
N N in a labour cautious here over here, we don't expect labor costs.
To go down and even as inflation mm.
Decreases are are a person.
We've also got some higher power costs, and Nevada and.
Uhm.
So uhm overall, we're not we're not seeing a net.
Decreased because because of inflation reversing but.
It's sort of leveling out with them.
I don't know.
<unk> as an example is often speak pricing.
Please.
Just give me the mortgage in that area.
We do see.
Still being <unk>.
Consumables for the plan.
But oh said one is ammonia.
Is really a function of the.
The conflict in your payments, causing us supply.
Trade issues with expose a contract that's dripping faucet. So they just put some bread.
In Nevada.
The process in 12 months.
In June 2023.
Price of June 2022.
<unk>.
So.
We go move those things, we do expect some relief.
We've been watching it very closely and <unk>.
That's all it was a good one too.
<unk>.
And.
<unk> <unk> in general we found that most companies between three to six months.
Inventory and contract and out there. So you know should we get through these like yourself have mentioned on the power, which was 520 22 once we get through that you know hopefully we will see sember beef and cough in 2024, as we get really now I need this tower and or maybe other inventories at.
<unk> Alright, alright.
At higher prices. So I was just wondering you know is it safe to look at when Paul mentioned cost of declining into 2024 is that just due to operational graydon and in other or can we see some relief and inflationary pressures.
Yeah, we certainly expect to see some in Europe .
Some of our inventory that we have on sides. Now is was purchase at higher prices. It says we pulled them off we're paying more for them now.
And then next year, we will.
See the opposite effect.
For some other items.
Supply.
<unk>.
So we do see some potential release.
But the first part of your comment Kenneth also true.
The operational impact snakes that cost to come down and then you asked in 2024 <unk> in Alaska, Uhm and then uhm.
Also in Nevada, I as I noted earlier.
Okay alright. Thank you so much for taking my questions I'll leave it to someone else to ask.
Thank you.
Thank you.
And again, if you would like to ask a question. It started one and your telephone keypad. Your next question comes from the line of Mike parking from National Bank. Your line is open.
Thanks for taking my questions and at last quarter, just a bit of a follow up on this question.
With some of your inputs improving mainly like diesel are you seeing an opportunity to add additional hedges.
Things, where you're you're seeing potential for wins and walking good prices.
I mean, we typically.
<unk>, you know somewhere in the 50% to 60% of current.
Current C N N W. T I N.
Yeah, So we do add.
Periodically the opportunities.
And in the market and then you know to lower amount for for a couple of Earache out you know our guidance for this year factor in that that we had in place and.
On track.
On track.
With our items were hedged for this year.
60 per cent of our exposure dot on average.
Sarah and then.
Going out in 2024 hours.
Between 35, and 40 per cent at at a bit of a.
Higher cost $70 and then we've got a small amount of 120 25 so.
Sort of role that forward as we go through when we see opportunities.
Okay. Thank you very much that's it for me.
And there are no further questions at this time Mister Paul Robinson, I will turn the call back over to you for some final closing remarks.
No. Thank you.
Operator, thanks, everyone for joining us this morning.
Look forward to catching up with you in person in the coming weeks or months X.
This concludes today's conference call. Thank you for your participation you may now disconnect.
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