Q2 2023 IAMGOLD Corporation Earnings Call
[music].
Thank you for standing by this is the call cruise operator, welcome to the I M. Gold's second quarter, 2023, operating and financial results conference call and webcast.
As a reminder, all participants are in listen only mode and the conference is being recorded.
After the presentation there'll be an opportunity to ask questions to join the question queue. You May Press Star then one on your telephone keypad should you need assistance you may signal, an operator by pressing Star then two.
At this time I'd like to turn the conference over to Graeme Jennings, Vice President of Investor Relations and corporate communications for <unk>.
I am called please go ahead Mr journey.
Thank you operator, and welcome everyone to the Aimco second results second quarter 2023 results conference call.
Joining me today on the call are Renaud Adams, President and Chief Executive Officer, Jason <unk>, Chief Financial Officer, Bruno Lemelin, Senior Vice President operations and projects, Tim Bradburn, Senior Vice President General Counsel, and corporate Secretary and Jersey, or so healthy second project director of coking coal.
Before we begin we are joined today for my Ankles, Toronto Office, which is located on 2013 territory on the traditional lands of many nations, including those sockets with the credit the Amish Novack Chippewa.
Sony and the wind up peoples.
And all we believe respecting and upholding this breaks is founded on relationships that Foster trust transparency and mutual respect.
Please note that our remarks on this call will include forward looking statements that refer to non <unk> measures.
We encourage you to refer to the cautionary statements and disclosures on my.
The first measures included in the presentation and the reconciliations of these measures in our most recent MD&A each under the heading non-GAAP financial measures.
With respect to the technical information to be discussed please refer to the information on the presentation under the heading qualified person to technical information.
The slides referenced on this call can be viewed on our website I will now turn the call over to our president and CEO Renaud Adams.
Thank you Graham and good morning, everyone and thank you for joining us.
The second quarter for I am wrong with an important area for the company as our Peruvian pains made significant strides.
And Westwood to bring our year to date attributable production to 220000 ounces from golf Oh.
Cash costs of 1230 P M.
While keeping a safe work environment.
We'll walk through the quarterly operating results in more detail in a moment, but I want to congratulate our effort and obtain.
A remarkable resilience to allow for the mine to resume both mining and milling at full capacity and a very complex environment.
Secondly, we saw significant progress on the coffee golf project.
In June the five regional banking hundred workers sorry.
Working together to push the project to approximately 86% accomplished we remain on track with the top end of our cost to complete guidance in line with the project planned capital.
Further we are now seeing activities begin creating called translation from Bob construction.
Initial activity and operational.
At Westwood, we continue to execute our optimization plan with the objective our objective to turn to mining to a positive cash flow producer in the near term.
The second quarter was my first full quarter as CEO and Brian .
And my conviction has only grown.
This is a company point far east positioning itself amongst our peers.
We are entering a transformational period for the company and I am extremely pleased with the expertise relevant experience and leadership in place.
Our zero harm emissions cuts you need to be our priority number one and we are looking at our operating ESG strategy and execution.
When we look ahead to 2024 one protocol.
Comes online and should Westwood takes the next step and the next step and production pulse, where you have to be patient.
Well, having significantly higher production base and lower cost profile, providing a strong foundation of cash flow and growth opportunities in Canada.
Before we get there the short term goals for Aimco are clear.
<unk> online with a focus on achieving sustainable and ramp up of operations at <unk>.
Manage our operations at this accounting Westwood to improve our margins, while ensuring the safety of RFP apartment community in which we operate.
Longer term our goal is for I'm going to become a high margin intermediate gold producer with a strong operating base in Canada.
Nationally, we will characterize returning our 70% position I think coordinated with our partners some of them as well like to use our cash flow to optimize our balance sheet and de lever the company.
A more efficient and balanced capital structure.
With that we will know diamond two of the operating and financial results and highlights for the quarter.
I'm on slide five.
Starting with health and safety the company has seen an improving trend in year over year with or days away restricted transferred duty rate of zero point 39, total recordable injury rate of <unk> 66, based on 200000 hours worked ensuring a safe work environment with all right.
Our primary focus of our <unk> and.
And our goal continues to be zero.
Production in Q2, the company produced 107000 ounces from golf on throughput basis, putting us well on the path.
Production guidance target of 400 to 470000 ounces this year.
The production result were driven by <unk> and are performing to plan.
And higher grades from percent recently every I believe David.
Westwood, which helped to mitigate the impact of some operating restrictions due to the poor air quality in the region.
Dressed fires in the corner.
The second quarter.
<unk> reported cash costs of photography.
$72, an ounce and then all in sustaining costs of 90 to $112 per ounce or cost increase over a year prior amendments.
To increase cost of landed supplies, including fuel higher power costs and previously forecasted lower grades.
As well as an increase in reality patient cost at Westwood as a result, we expect cost to come in at the top end of our new guidance range.
On slide six.
Turning to our second tranche.
Reported Q2, actually but all gold production by 88000 ounces, bringing the year to date Carnival to 180000 ounces of Cogs.
Activities totaled $13 5 million, a significant increase quarter over quarter.
The mining fleet returned to operations to full capacity.
Mining activity in the second quarter and completed the transition to phase five resulting in a higher strip ratio.
In language.
Our plans as the operations moves to new mining phases, and lower rates from the prior quarter and rates were positively influenced towards the direct material side of the body and face foreign from Covid.
Mill throughput in the second quarter was $3 1 million tons at an average head grade of 111 grams per tonne with Trump was 42% higher than the first quarter.
As operations were able to resume at full capacity into the dealer program ability to more efficiently supply around the country.
The mail reported an average recovery of 89%, which declined slightly from the prior quarter and the year prior due to lower grades, including higher concentration of gravity carbon and sulfur.
On a cost basis as a kind of reported cash costs of $373 an ounce an increase from the first quarter has had great 30% from Q1 at the higher strip ratio at <unk>.
Recently, we saw some pain.
Higher prices on certain Obama.
Inflation pressures.
Steve.
With fine.
With few signs of reversal.
As well.
Increase of the landed cost of fuel due to the impact of the security situation in the supply chain higher labor cost to depreciation of the local currency.
Increase in power generation costs heavy fuel normally used for power generation, whilst periodically substitute with more expenses might skew in order to maintain operations during a period, where some clients was limited.
We are correctly.
Additional tank Irish economy, which will increase the extra saw storage capacity upside where approximately 50% we expect that the extra capacity will be in play.
<unk> in early Q4.
On the all in sustaining cost.
<unk>, Scott increase to 50 and $187 per ounce due to the higher operating cost as Robert schedule higher volume, it's tricky asking Ryan Im curious.
<unk>.
Looking ahead.
Ami is on track for our production guidance range of 340000 to 380000 ounces of gold.
Mining activities expected to maintain normal operating levels in the second half of the year, including increased waste stripping to open faces towards 2024 hours.
The mill the mill feed will consist of a combination of direct feed and stockpile and the mine fleet sequences through.
The targeted faces waste stripping.
Capital expenditure guidance for <unk> is unchanged at approximately 155 million with.
The increased volume of capital that provides waste in the second half of year, which doubled while total tons more in line with the second quarter to program to provide access to mine areas and support them to 2024 to <unk> 25.
It is worth noting that the mining activity of stripping programs I assume no significant disruptions in the supply chain, resulting from the security situation in the country in the region.
The company plans to file an updated life of mine.
Okay.
David Mineral reserve and resources during the fourth quarter of 2023.
This will include the details of the SaaS thing the $9 9 million tonnes of stockpile material through the CIO circuit surfaces. The prior plan to offline capital.
Intensive heap leach scenario.
On slide seven.
Turning to Westwood Gold production was 19000 ounces and acquire 40000 ounces year to date.
<unk> continues to be in a unique position volume goal has been to essentially rebuilding the underground mine at the same time <unk> mining operations are being conducted.
The mine has made significant strides over the year. So we're taking the next steps and production entering 2024.
Mining activity in the second quarter totaled 212000 tons of ore, which was lower than the prior quarter due to the impact of heavier wildfires market had been CDP OCA mine operations required for multiple underground shifted began struggle to ensure to continue the continued safety of <unk>.
Our workforce.
However, it is worth highlighting that underground mining activities retiring 56000 tonnes of ore at a grade of seven six grams per tonne, which is the highest grade mined from underground in over five years.
Against this fee to benefit our <unk> application.
Communities reopening previous rate.
Mill throughput in the second quarter was 251000 tons at an average head grade of 252 grams a tonne.
Any appropriate coverage with 94% of the high on the higher grades.
Cash cost and all in sustaining costs.
Westwood with a very high sensitivity to mine output and due to the increased <unk> support required for development and rehabilitation work relative to the annual plan.
Additionally, mining activity started a satellite open pit.
With many of our productions in the quarter, yet, adding $2 $4 million of the say all the development capital to operating cost.
Looking ahead Westwood is well on track with our guidance range of 70 to 90000 ounces CEO .
Production levels and unit costs are expected to improve into the second half of the year benefiting from the continued advancement of underground development, providing access to more and higher grade stope sequence.
Mill feed will continue to be supplemented from available satellite surface deposits, including increased proportion of war.
Pete.
Our property in the second half of the year.
On slide eight.
Just want to take a moment to dive a little deeper into our activities at Westwood underground development year to date is near record development rates.
We have 2865 meters of lateral with alarming completed to secure safe access to multiple interfaces, including high grade paas producing areas, which would allow for increased operational flexibility and support into 2024 and beyond production plan.
We have increased the sustaining capital expenditure guidance for Westwood by $35 million.
Ground application and development.
Progressing ahead of schedule.
Due to better than planned product CD rates moving some of the 2024 work into 2023 and reduce paperwork require 2024 and while some of the rehab patient work requires more ground support increasing costs.
This work not only is allowing the returned our mining into a higher grade area that were previously closed.
It also opens the door for pecans.
Sean Mineral reserve increase should it be as Eric has been upgraded from resources.
They are perfect programmers to be viable we will have an updated 43 101 for Westwood in the far corner.
As production volume increases and rehabilitation work decrease we expect to see cost step down.
With the goal of positioning the asset for a positive free cash flow for them better and profitable 2000 platform and beyond.
Slide nine turning to Cologuard and I am pleased to have our ticketing project director here with us today to walk us through the developments in progress or Jersey.
Thank you Remo.
Secondly for color.
Our considerable progress was made with all of them.
Achieving significant milestones in other works processing plant operating.
Got it.
It was a typical quarter as we started the quarter in the spring.
The pressure of the season.
Management says okay.
You can put in place household tasks.
Among the teams for the planning and monitoring.
At the end of the alternative project was approximately 86% complete and is another.
Our balance sheet.
We are now seeing opportunities move from the bulk construction to do more detailed and I've already.
The physical changes of this type have been in the market and I'll walk you through some pictures on them all of them.
We currently have over 19 Hollywood workers at the site was the comp piece.
Despite the crowds are construction teams contractors and subcontractors have done a great job and we have reached.
Five hour's worth milestone.
On Earth works, we continue to face while on the Tms have started percolate walkers and preparation for the call.
The primary and secondary crushing circuits.
Sooner blotchy pilots with BHP, Jr. Arriving on site and installation is progressing.
<unk>.
Tied to pump the installation of the Baldwin linings was ongoing in multiple tumor types of hospitals.
Q3.
We have deferred the completion of the leach tanks and installation of the agitators.
To sum up to six to eight weeks later.
And art.
Prayer as the word corresponding physical installation of the crushing circuit.
Hi, Noah.
Power swap station is now being commissioned with the collections of the permanent shelf hydro grid scheduled for this model will allow us to full electrification off site and the department.
Later this quarter.
Moving to recent pictures, let me walk you through the main areas.
Obviously, the science moving left to right on top of it.
Do we kind of see the Tms as.
As we are looking at ease.
The first slide where you see the follow through on the line.
Material operation, which was completed in Q1 and preparation of the fresh up season.
All right.
Yes.
Six which companies face swaps and all square footage on well performance or competency accounts.
The next phase, we will see the summarizing for online collaboration.
Sure.
Hospital operations.
Next in the middle of the highway Bill.
And as I mentioned earlier the substation.
<unk> construction to the commerzbank.
Monetization.
How that's shifting TV type programs.
Top right is the view on the primary crusher.
So orders are complete and we are not.
Without putting their mood that can come in place to accomplish from the bridge right.
Absolutely prosper components.
Welcome left we have an HP Jr. Administrating house mechanical.
And the teams are focusing more on the pricing.
I wish.
The bottom middle is grinding through to all of our actions, but we.
We are transitioning to in the final stages of construction early comments from the activity.
Both of them right you see the leach cycle.
Where we are concentrating on utilization of Miami.
Direction of our electrical I'm confused.
Switch.
Moving on to the timeline.
The copper gold continues to track well to the update of the project Hydro production.
Production literally a ton in Florida.
We are working in close alignment with our partners and our contractors to ensure safety.
Safely on time.
On this call.
Our focus on Q3 will be complimenting the construction of an amazing portions of the pump and stocking pre commissioning activity Q4 will be farquhar assumption utilization of pre commissioning of operation for the audience.
We stopped I will turn it back to you. Thank you.
Jersey and.
On our call today I'd like to add that our goal is straightforward.
We want to ramp up and we wanted to.
Of course to be amongst the most successful major Gulf projects start ups.
That is not to say we are named adopt the challenges ahead, but the team we have in place and continue to Bill I've done this before.
Excited about the future at COSE.
And what it means for Aimco.
On slide 12.
Of course, when talking about the future we need to continue to highlight gossip.
We are continuing to drill at Golfman with nearly 8000 meters completed so far this year.
<unk> has already been drilled with a fraction of the meters compared to coty and to have the gap.
And remains open along strike and on cash.
Our last batch of fat face resolved earlier this year successful, we intersected mineralization to the south.
So the sound off and below the current resource boundary of the department to Golar at the current drilling program is twofold.
Do you need to expand the mineralized envelope gosman as well as in scale to support ongoing technical studies to advance metallurgical testing and to support mining and infrastructure study to begin reviewing alternatives for potential inclusion of the government deposits.
Deposit into a future. According Cogs licensed mine plan.
We expect to have resolved for the ongoing drilling program in early Q4.
We believe that golf links with its English short resources are $3 4 million indicated ounces and one 7 million ounces <unk> continues to be in the early stage of discovery and constant Angus location picked up immediately and Jeff into the accordion deposit has the potential to add.
<unk> for the coatings project.
With that I will pass the call over to our CFO .
Yes.
And again, it's an answer of <unk> Martin.
Thank you Ron and good morning, everyone.
Looking ahead to project spending.
<unk>, you JP incurred $271 million in project expenditures.
<unk> hundred percent basis, or $189 1 million on a 70 per se.
70% basis during the quarter.
It is worth highlighting that for accounting purposes, the JV funding an amendment.
Meet the requirements of our race to recognize the dilution of the company's interest in the <unk> sale and so the company will continue to account.
70% of the assets and liabilities of the joint venture as well as 70% of the incurred project expenditure.
The company <unk>, the financial liability on the balance sheet that approximate the current repurchase price representing the $250 million funding contribution that Sumitomo aimco.
<unk> behalf.
That resulted in our interests being dilutive to 63%.
As well as incremental funding that Sumitomo made due to the increased ownership in the food feed for the repurchase option.
The liability will continue to increase with a nine 7% of incremental funding that sumitomo provides until cleared to achieve commercial production.
Since commencement of construction to choose from.
<unk> two 3 billion of the two.
296, 5 billion of the project expenditure has been incurred.
Hey.
The remaining cost to incur to complete <unk> is estimated at 665 to seven up from $35 million at <unk>.
Sure the $165 million to $515 million at 70%.
The high range of the estimate to complete a $775 million will take us to the $2 96 5 billion for the August 2022 Technical report.
The table at the bottom outlines a derivation of the quarterly cost to complete guidance with the actual spending amount incurred quarter over quarter.
In order to convert.
<unk> incurred cost to compete on safety St to Aimco actual funding requirements at 63% joint venture partner.
The incurred cost as adjusted for changes in working capital lease funding received from the decrease in the required cash balance held by the JV when the David of expenditure reduces after the completion of construction.
<unk> need to fund, 63% of historical going forward.
Great and Brian Schmidt and dilution has been completed.
During Q2s Sumitomo funded the remaining 61 million after $250 million total as per the agreement on behalf of the company.
An additional $18 million due to increased ownership.
Sumitomo funded all of the joint venture cash flows up to buy the company commenced funding in June and funded approximately 16 million to the JV given Q2.
I'm Gulf will not fund, 63% off the JV cash calls that is approximately $425 million to $475 million during the construction phase.
Yeah.
Turning to the Q2 financials.
Revenue from continuing operations totaled $238 8 million.
From sales of 111000 ounces at an average realized price of $1973 per ounce.
Yeah.
Adjusted EBITDA from continuing operations was $63 8 million for the quarter.
Slide two and adjusted loss per share of what I'm, saying.
In terms of our financial position.
Golf ended the quarter with <unk>, not being $47 7 million in cash and cash equivalents.
$402 5 million available by that fully Undrawn credit facility, which equates to total liquidity of approximately $1 2 billion.
We are investing excess cash and funds and Canada at rates close to 5%.
We know that with cash and cash equivalents $91 3 million was helped by coach they go.
Saving $170 1 million was held by this again.
Okay.
Article you JV requires joint venture partners to fund the advance two months of future expenditures and cash Cogs are made at the beginning of each such a month.
<unk> in the months and cash balance approximating the following months expenditure.
For <unk> the.
The company might be used as dividends to repatriate funds of which the company will receive 90% based on its ownership up debit in Texas.
Do you have a dividend during the second quarter of $120 million, which was received by Aimco subsequent to the quarter end most of minority interest in withholding taxes.
The full extent of the credit facility availability is subject to a net debt to EBITDA and interest coverage covenant. Therefore, the full extent of the additional liquidity of 70 is rely on the ability of our operations to generate sufficient EBITDA to support that total in the company.
This is one of the reasons, why we announced $400 million terminated in the quarter, which allowed the company to pay down the credit facility and use it turned back to the capital requirements of <unk> and did for dealing concocted funding from certain items in the macroeconomic environment and our other operations.
The chatbot improves <unk> balance sheet, and strength and fix it but allowing the credit facility to be available to support working capital requirements during the.
Yeah, we are wrapping up okay. That's why that's delivering the Vegas he felt by prepayment agreement.
And it gives us some measure of insurance in case of foreseen challenges with changes in the operating metrics economic environment.
I'm going to finance the remaining portion of the customer using funding estimate of $425 million to $475 million from available cash bonuses.
Remaining proceeds.
From the about boot sales and as you note.
Noted at the beginning of the call as <unk> ramps up we can then direct our attention to key longer term financial goals of returning to 70% position in the <unk> JV and Delevering, our balance sheet towards a more optimal capital structure.
With that I will pass the call back to or not thank you.
Thank you Mark and then I I really wanted to take a moment here to thank everyone on the iron Goldstein.
Our <unk> efforts and dedication.
This is an exciting time for this company.
I should also note that we will be holding our coating line to our investors and analysts in October and I encourage you to reach out to a gram of myself to say the spot trap. We expect it would be very well attended considering the progress to date.
With that I would like to pass the call back to the operator for Q&A operator.
Thank you we will now begin the question and answer session.
And join the question queue you May Press Star then one on your telephone keypad.
Joan acknowledging your request.
If youre using a speakerphone please pick up your handset before pressing any keys.
To withdraw your question Press Star then two.
Our first question is from Lawson Winder with Bank of America Securities. Please go ahead.
Lawson Winder your line is open.
Thank you operator, good morning, Renaud and team in Bruno it's very nice to hear from you.
I wanted to just add you're.
You can't get an idea for your long term vision for I am gold now that you've been in the role for about a quarter a little over a quarter, particularly with respect to geographic focus and could I am glad book of potential potentially exit Burkina SaaS, no one's coke tastes ramped up and.
Yeah, I guess I'll leave it there for now follow up after.
Yes.
Yeah.
Appreciate that appreciate the questions and as you are as I mentioned on the call as you know our priority right now is definitely focused on call. It a building a strong Canadian platform continue to operate safely as a kind of and this is a significant mine for us has generated constant as we generated cash flow we appraised.
This installation right now in Turkey, Marin to regions, but our effort and focus continue to to make the mine worked well for us.
I misspoke contributor as we move forward in the future.
While there while that dress and the step by step in on the building of discount on this company but.
I would say at this stage, while we've come to know too.
Our focus on.
The strong and safe operation of our economy.
In parallel as I mentioned.
Also to develop and grow at a very strong base in Canada.
As we see the gate.
Hum.
I also wanted to ask about the plan to.
The life of mine plan for <unk>. So just I know, it's still early and you Havent released the study yet but it is the thinking that the mine life might be reduced as a result of the move away from the heap Leach.
No we're definitely not the senior reduction there was obviously a questions about those tons that were previously.
Obviously, a man can be on the heap leach, but but.
I believe the team has worked very hard and diligently to incorporate those.
K football as well to replace some times some ounces. So we are.
We're not expecting a reduction of life of mine.
Okay, Great and I wanted to touch on Westwood, just given that I mean, you've had knowledge of this asset for just about as long as anyone.
You've got a picture of an improved outlook going forward in the.
In your prepared remarks and in the.
The MD&A.
And DNA.
Just curious like what is the upside for this mine.
And you would well know that when this mine was first conceived of I mean, the thought was it could produce 200000 ounces year were far from that but I mean, it is even anything in the 100000 ounce range potentially achievable in your view.
Well, we already have the guidance for.
This is the area now under guidance 70, or 90000, which were felt pretty strong that we are going to meet well SaaS.
But you mentioned that 200000 ounces, that's definitely not the goal.
The near future to push the mine to its limit.
I would riders feed this mine focused on quality.
Returning to our very strong and a higher grade underground, which we're ready to meet the economics of this mine. So in the short term of course, we're using and all that.
Their satellite to surface satellite.
But the real game here as we continue to diligently preparing to mine is to return to the higher grade area and focused on quality as we move forward. So while we don't see this mind necessarily now returning to the 200000 were defended.
Fade out and feel strong.
It could be at $1 25 to 150000 ounces producer at the market share better margins.
And then if I could just ask about co day finally and the.
The autonomous truck haulage.
Is is the assumption that.
You will be operating at 100% autonomous.
Truck haulage from day, one or is there some flexibility built in there to sort of allow for.
Potential hiccups.
And the reason I'm asking is we've seen other other autonomous truck programs rollout and take quite a quite a good amount of time to get up to sort of full run rate and obviously, it's great. You started early this year, but would just love to get your thoughts on.
Uh huh.
Sort of ups and downs. Thanks.
Well I'm sure looking forward to that.
To the site tour knocked over to CEO .
Lower risk progress setting.
And how it has been but.
I'll ask <unk> to add a bit to that questions.
Hello loss.
It was part of the original assumption to start from from the get go with the autonomous fleet.
Right now what we see is we see.
Ramp up that is.
As target.
And again, there is no need for.
Operations of the fleet.
But later so actually we are commissioning trucks, one that's towards the other and they are fully utilized.
A mystery and it works.
It looks real good.
Thank you all very much.
Thanks.
The next question is from Anita Soni with CIBC World markets. Please go ahead.
Good morning without it.
Two questions for me just in terms of Copay can you talk a little bit more about the process, where you are the leader.
You're optimizing for the critical need.
To get those up and running.
Can you talk about like how many.
Total leach tanks that you had that you just those are the ones that are can be running at the beginning and how does that impact going into 2024.
However, I would ask <unk> to give some details, but what I could tell you that overall, we're not seeing issues with things that would impact the commissioning.
Yes.
Maybe.
You can go back to the slide shown looser the leach tanks as you can see the installation that's quite some bonds.
We are in the piping electrical.
Mark.
Undertakings convenience told.
We hope to reshuffle the workforce.
We have a capacity.
Capacity right now so we are making tactical decisions of where to shift and manpower to deal with a critical piece of work and move forward.
<unk> activities.
You see from that big chunk of the tungsten.
Quite a bounce.
We are basically getting memorandum.
And then when it comes to hydro test.
We will be starting with the first horrified to Tom and we'll.
The gradual.
Introducing more tons from the center.
Progresses.
Okay.
Can I get it.
Second question with regards to the tailings facility I think you gave us a little bit of color on that but could you tell me how much capacity in the phase one and then how much additional capacity where are you looking for in the phase two of the dam.
Phase two of the dominance.
One year a positive production.
Phase one is about 1 million cubic meters.
Allows us to do a commodity nothing to walk through for us.
Sure.
Phase one is complete.
This is why some call enrollment as you mentioned because the best way to visualize it is to look at the alignment lines.
So what you see in second line notice basically that phase one completion as you can see.
Pictures from Giovanni So you can see those opportunities if you look into <unk>.
Picture.
It's quite a bit of work, which is one of the funds from the phase II.
Okay. So the phase two is a full on.
My understanding is that you would probably you would definitely want that completed by Q4 right. I mean is it centerline dam right. So you need the retention time for that.
<unk> to occur.
That's the case.
Correct.
Okay.
Okay.
Alright, great.
Please repeat that.
From a startup we are we have been.
Capacity startup.
Sure. Okay, and then just in terms of when we think about next year you said early 2024 six.
Six months out can you give us some color on what early means like when do you expect to have first gold pour is that like the beginning of the quarter in Q in January or as at the end of the quarter or are we getting into Q2 is just what I'm trying to get an idea of what our 2020 forward look like.
Considering.
Okay.
I don't think.
I think we will we are prepared to give them a much finer date in the first quarter I think this is.
Yes.
<unk> discussed previously as the focus is really on.
Our ramp up into achieving in getting as close to the nameplate possible veterinarian down and focusing our investment on a single item up the gulfport.
Well, we wanted to gulfport to be incorporated in the most efficient way to reach our nameplate. So having said that we're at.
Still pretty confident that they'll go apart would occur early in the Q1.
Early in Q1, Okay, Alright, and then just wanted to say.
Circle back on on Westwood, you talked about maybe getting to 125 to 150 ultimately there and I think you said good luck Doyle our property is should be adding contributing TV the mix in the back half of the year could you remind me what the grades are at that one and the open pit.
Bruno.
The <unk>.
<unk> bank at our own.
<unk> five gram per tonne.
So we intend to.
Close to 100000 tons this year and process played out.
Okay, how much have you done to data or zero on my plate alright.
Just started.
Okay. Thank you very much that's it for my questions.
Thank you Tony.
Once again, if you have a question. Please press Star then one.
Next question is from Mike Parkin with National Bank. Please go ahead.
Hey, guys. Thanks for taking my questions can I just confirm the timing of life of mine update Chris Mccann when does that do it.
Did you say the technical report.
Mike.
Yes, yeah.
Yeah, So Q4, probably somewhere you know like advanced in Q4, so we want to have everyone a chance to digest properly their report.
Higher to our early 2020 for guidance.
Okay.
And then.
You've guided to higher costs and all of a SaaS it can kind of get bigger.
It's been a bit lumpy.
But it's been kind of tracking around $110 million over the last 12 months with Q1 being a bit light given the lower throughput.
Give us a sense of like what's going to drive you.
We're a bit of a 120 million though.
Direct operating costs in Q2.
To get in line guidance I kind of have a sense that it's got to come down a bit in the second half what changes there to get.
Get you into a slightly lower cost profile to get in line with guidance.
Well the you would I appreciate of course, if you compare with the last couple of years, a big pick up there is of course to increase our spending around the security I mean, it is what it is we need to to do what you think needs to be done to keep everyone safe.
Awesome job.
But one of the biggest stick and of course as mentioned as fuel and.
If you look at the Q2 for instance, the overrun that I felt <unk> using a vessel to generate.
Generate power is a very big ticket. This is basically a $100 an ounce on the overall impact on our Q2.
So moving forward, having said that even though the comp has increased there was a significant decrease in our mining unit costs in Q2 compared to Q1 I felt most of the dollar and so so the mine is operating extremely well, but unfortunately you have some inflation. So if we are I think the extra capacity of star.
As we move towards Q4 will be a big element of it.
Having more star Asia inventory in Ireland.
Providing us with more chance to operate borrower, 100%, which HFF it won't be a big big big tick up to it but other than that I am totally convinced this is not a performance and operating performance issues of procurement issues. As there is a security of TMA is difficult sometimes to provide.
Power as we advance should we should we have a better comp Charles on the fuel supply and <unk>.
Our generation being with that yourself and those will be the basic tickets to retention costs.
Yes.
Okay. Thanks, very much Ken.
The next question is from Tanya <unk> with Scotiabank. Please go ahead.
Great. Good morning, Thank you for taking my questions.
Just wanted to know when is the technical study is thoughtful and coming out you mentioned that you're working on that one as well.
Yeah.
I think that this stages metallurgy calls studies this program would be the priority and as we mentioned in the more we drill goslin or we grow it.
And I think I think it's.
I think it's relevant to say that at this stage, we need to have a pretty good idea.
The size of golf limit it needs before we.
Two quick.
And two studies and so forth. So I think 23 and as part of 'twenty four we're going to continue to be very aggressive on the drilling and growing the deposits doing our metallurgy coal studies and that and then are you cannot but I.
You will not see the rationale to any.
The <unk> study.
Sure.
He then late 'twenty five.
Exactly.
Hello, Daniel.
Got it.
In addition, with the met Daniel Jacome split.
The thing we have also.
Julie.
Testing to perform and obviously the origination drilling that you're starting to see ongoing.
Okay. So so.
All of this combined maybe late 'twenty four 'twenty five in total might it get some sense yes.
Yes, correct, yes.
Okay.
Alright, so thats helpful. There and just on <unk>.
Ken I know, Mike asked about the cost there should we just be thinking the rest of the year cause you mentioned Westwood we are progressively getting.
Quarter on quarter and improvement in costs quarter on quarter.
Kenmore evenly balanced throughout the rest of the year would that be a fair way of looking at that mine.
They note that now we should see.
Yes.
So be it.
The newer or at least Q3 and through for US the situation with the fuel.
Gets normalized.
We also expect capitalized waste stripping to pursue it.
Some program as well.
And for mining as well.
Overall 12 relatively the same kind of cost pressure we see.
But.
Sure.
Yes.
Okay.
Production evenly flat okay.
The grade is going to be also going to need the same okay.
Okay, and then can I ask because obviously you know getting the cash flow.
And getting cash flow kind of Essakane, we've got higher risks with the with the security issues and ink and country can you just remind me.
What youre doing that to try and mitigate this risk as much as you can with inventories on site.
Can you just remind me what you have there so should something occur, which we hope it doesn't but just an idea of what your what you have on site and inventory levels.
First I know that as we are trying to secure supplies we are increasing.
Working capital.
We'll have a slight impact Huntington tools.
Additional capacity for our fuel storage in Q4.
We're doing trying to do the same for nitrogen for explosives.
You want to talk a bit more about that.
Yes, good morning, John Yes, So we are seeing a increase in the inventory at the site as we are trying to do both more capacity.
When there is good opportunities to bring supplies ink.
So there was an increase in there.
Thank you. The question also asked about gosh getting cash out of the country.
We can declare a dividend of <unk> <unk>.
$20 million.
During the quarter at about $170 million of cash at the end of the quarter because of the buildup.
And we received a dividend after it goes over the quarter. So we continue to be successful now issues in moving.
Funds from the country or having gold sales out of the country.
Okay I was just wondering more like fuel explorer.
Other consumables that you're carrying inventory the six months should I be thinking like that sort of inventory levels.
Three six.
Okay.
In fact as far as for fuel.
Got you.
<unk> close in between.
10 days 30 days the expectation now is to increase the capacity close to 40 to 45 days.
Okay.
Amazing I thought you had longer sorry.
No no.
No. Unfortunately, though this issue is very much aligned with especially for fielding.
Now with best practice since they are usually like bring it sounded like 20 days will be Martin adopt usually and it has been in the past.
Now because of the logistics of the calm buoy systems, rather than frequent periodic Blake so.
Yeah, we accumulate trucks and then we report lorre down so there is a need here to increase because we do not have.
So previously in our like a daily shipment and so forth. So we accumulated we come voice, so we need to increase our capacity, but it is very much in line with that.
Our factory in Canada, you would have less of that.
Yeah, Okay, great. Good luck. Thank you.
Thanks.
This concludes the time allocated for questions on today's call I'd like to hand, the call back over to Graeme Jennings for closing remarks.
Thank you very much operator, and thank you to everyone for joining us this morning, and as always should you have any additional questions. Please reach out to myself via phone or email. Thank you all.
Be safe and have a great day.
This concludes today's conference call you may disconnect your lines.
Thank you for participating and have a pleasant day.
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