Q2 2023 IAMGOLD Corporation Earnings Call
Thank you for standing by this is Nicole cruise operator, welcome to the ion 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 zero.
At this time I'd like to turn the conference over to Graeme Jennings, Vice President of Investor Relations and corporate communications for Ion Gold. Please go ahead Mr journey.
Thank you operator, and welcome everyone to the <unk> 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, Housekeep Second project director coached people.
Before we begin we are joined today for Michaels Toronto Office, which is located on 313 territory on the traditional lands in many nations, including the Mississauga that the credit the Amish Novack Chippewa hurting the Sony and the window peoples.
And all we believe respecting you end up holding at this rate it's 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 it.
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 in the presentation under the heading of qualified personnel 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 was an important period for the company as our operating teams made significant strides.
And Westwood to bring our year to date attributable production to 220000 ounces from golf Oh Gosh Carl.
234 per ounce, while keeping a safe work environment.
We will walk through the quarterly operating results in more detail in a moment, but I want to congratulate our effort and obtain.
Marketable resilience to allow for the mine to resume both mining and milling at full capacity and a very complex environment.
We saw significant progress on the coffee golf clubs.
In June the five Rachel Mike and Andre workers sorry.
Working together to push the project to approximately 86% of completion, 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 began the credit card transition from Bob construction.
<unk> activities and operational readiness.
At Westwood, we continue to execute our optimization plans with the object 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 poised positioning itself amongst our peers.
We are I'm trying a transformational period for our 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 once quarterly call.
Comes online and should Westwood takes the next step and the next step and production cost where you have to be patient.
And he will have a 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 iam goals are clear drink ordering online with a focus on achieving a steady and sustainable and ramp up of operations.
Manage our operations at <unk> and Westwood.
Westwood to improve our margin, while ensuring the safety of our farming 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.
Financially, we will characterize returning our 70% position in currently with our partners Sumitomo.
Well, let's use our cash flow to optimize our balance sheet and de lever the company to have a more efficient and balanced capital structure.
With that we will now government to have 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 transfer duty rate of zero point 39, total recordable injury rate of <unk> 66, based on 200000 hours worked and ensuring a safe work environment with all week.
Our primary focus of our aim and our goal continues to be a zero harm.
On production in Q2, the company produced 107000 ounces of gold on an attributable basis, putting us well on the path.
Production guidance target of 400000.
Two 470000 ounces this year.
As we were getting to a moment to production results were driven by performing to plan.
And higher grades from percent recently every I believe David.
So on Westwood, which helped to mitigate the impact of some operating restrictions due to the poor air quality in the region.
Pressed fires in the corner.
The second quarter Saar I am golf report cash cost of a tower.
Others announce.
And then all in sustaining costs of 90 to $112 per ounce.
Cost increase over any year prior mainly.
To increase cost of landed supplies, including fuel higher power costs and previously forecasted lower grade.
As well as an increase in rehabilitation crop Westwood as a result, we expect cost to come in at the top end of our guidance ranges.
On slide six.
Turning to our second tranche.
<unk> reported Q2 actually but all gold production of 88000 ounces, bringing the year to date Carnival to 180000 ounces of gold.
Mining activities totaled $13 5 million ton, a significant increase quarter over quarter as the mining fleet returned to operations to full capacity.
Mining activity in the second quarter completed the transition to phase five resulting in a higher strip ratio.
The language.
Our plans as the operations moves to new mining phases, and lower grades from the prior quarter.
Rates were positively influenced.
The direct feed of material, so nobody will face foreign debt.
Mill throughput in the second quarter was $3 1 million tons at an average head grade of 111 grams per ton with throw up with 42% higher than the first quarter.
As operations were able to resume at full capacity into the improved ability to assess our supply around the country.
The mill 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 the Abbott reported cash costs of $373 an ounce an increase from the first quarter has had greater than 30% from Q1 after the highest strip ratio Adil.
Additionally, we saw sustained.
Higher prices come sooner.
As inflation pressures.
Yes.
With flying with.
With few signs of reversal.
As well.
Increase of the landed cost of fuel due to the impact of the security situation to supply chain higher labor cost to the depreciation of the local currency and an increase in power generation costs as heavy fuel normally used for power generation was periodically substitute with more.
<unk> in order to maintain operations during the period.
We're supplying so is limited.
We are currently building additional tank at this economy, and which will increase the HSR and storage capacity upside where approximately 50% we expect that the extra complexity.
<unk> in early Q4.
On the all in sustaining cost base.
<unk>, Scott increase to 50 or $187 per ounce due to the higher operating cost as Robert schedule higher volume with strict base as the main interest environment faces.
Looking ahead.
Our company is on track for our production guidance range of 348000 280000 ounces of gold.
Mining activities expected to maintain normal operating levels in the second half of the year, including increased levels of waste stripping to open faces towards 2024 hours.
The mill the mill feed will come to us or a combination of direct feed and stockpile and the mine fleet sequences.
Through targeted faces waste stripping cap.
Capital expenditure guidance for our economy is unchanged at approximately $155 million with.
With increased volume of our capital that provides waste in the second half of year, which totalled while total tons moves are in line with the second quarter to program to provide access to mine areas in support of the 2024 and 2020.
<unk> plan.
It's worth noting that the mining activity and 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.
Economy, and an updated mineral reserve and mineral resources during the fourth quarter of 2023.
This will include the detail assessing the $9 9 million tonnes of stockpile material through the CIL circuit versus the prior plan to offline capital intensive heap Leach scenario.
On slide seven.
Turning to Westwood Gold production was 19000 ounces in the quarter 40000 ounces year to date.
<unk> continues to be in a unique position.
<unk> has been essentially rebuilding the underground mine at the same time back to mining operations are being conducted.
The mine has made significant strides over the year towards taking the next steps and production entering 2024.
Mining activity in the second quarter totaled 212000 tonnes of ore, which was lower than the prior quarter due to the impact of heavier wildfire smoke and had been CDP OCA mine operations required for multiple underground shift to began.
To ensure the continued the continued safety of our workforce.
However, it is worth highlighting that underground mining activities, returning 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.
Good to see the benefits are great application activities reopening previously so.
Mill throughput in the second quarter was 251000 tons at an average head grade of 252 grams a tonne.
Any appropriate coverage of 94% of the higher under.
The higher grades.
Cash costs and all in sustaining costs.
Westwood with a very high sensitivity to mine output.
And due to the increased levels of support required for development and rehabilitation work relative to the annual plan.
Additionally, mining activity started at the satellite open pit.
With many of our productions in the quarter, yet, adding $2 $4 million of the Senor development capital to operating cost.
Looking ahead.
What is well on track with our guidance range of 70 to 90000 ounces last year.
Auction 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 stopes sequence.
So fees will come to need to be supplemented from available satisfying surface deposits, including increased proportion of the war.
Seed from the sale of property in the second half of the year.
On slide eight.
I just want to take a moment to dive a little deeper into our activities at Westwood underground developments year to date is near record development rates.
2800 <unk>.
So collateral with enrollment completed.
Pick your safe access to multiple phases, including high grade past producing areas.
With that 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.
The underground reputation and develop.
Progressing ahead of schedule due to better than planned product CD rates moving some of the 2024 work into 2023 and reduce aimed at work require 2024 and while some of the rehab patient work requires more ground support increasing cost.
This work not only is allowing the returned our mining into a higher grade area.
Yes.
But also opens the door for potential mineral reserve increases should these areas has been upgraded from our resources.
<unk> provide programs to be bringing them all.
We will have an updated 43 101 for Westwood and the fourth quarter.
As production volumes increases and rehabilitation work decrease.
To see cost step down with.
With the goal of positioning the asset for positive free cash flow for a better and profitable 2024 and beyond.
Slide nine turning to coatings, all I am pleased to have our ticketing project director here with us today to walk us through the development and progress in this War Jersey.
Thank you Ron all the second quarter or a considerable progress was made the problem.
Secondly, a cycle milestone some works processing plant operating costs.
It was a critical quarter, because we started to grow.
So in the spring.
Depression of season local management systems.
We put in place household tasks.
And I must compliment the teams for the planning and monitoring.
At the end of the quarter. The project was approximately 86% complete.
Sure.
We are now seeing our two it has moved from the bulk construction to do more detailed in Aberdeen.
Yes. It is.
The physical changes of the site.
Mark.
Walks you through some pictures on our mantra.
We have over 1900 workers at the site was the comp.
Awesome.
The crowds are construction teams contractors and subcontractors have done a great job and we have reached.
Pardon.
It was worth hospital.
On the earthworks, we call keeps us well on the Tms target per coolant walkers and preparation for the call.
Do kind of motoring and cycling.
Another question Sir.
I'll sort of last few months with BHP, Jr. Arriving on site and installation are progressing other sponsored space.
Inside the plant.
The bottom line is ongoing under multiple summarize Cypress hospital situation clearly.
Charlie.
Three.
We have defined the completion of the leach funds and installation of the origin pesos. So.
How much was six to eight weeks later on Orange and I'll, let Bob in order to prioritize the work horse will include the installation of the crushing circuit.
The power swap station is now being commissioned with the connection to the provincial hydro grid schedule for this model.
To allow the full electrification outside.
I would like to extrapolate from this quarter.
Yeah.
Moving to recent pictures, let me walk you through the main.
Yes, obviously, the science moving left to right on top to the bottom here, we can see the Tms.
As we are looking at each of the deposits.
The first line there you see the balance through Olson.
Tony.
Which was completed in Q1 and preparation with all the different sub seasonal.
All right.
<unk>, six which companies face swaps.
And all square coalition warfare.
Because the accounts for you.
The next phase, we will see the summarizing for all nine elaboration on furlough for first route miles.
Sure.
Next in the Middle of talk is the hybrid consultation and as I mentioned earlier the substation.
Shifted from construction to the commissioning.
On a final monetization collection.
Television programs.
Alright, as does Europe the primary crusher.
So orders are complete and we are now.
Now putting their move back in place to accomplish on the bridge Crane funnel.
Across all of those.
From left we have an HP Jr. Illustrating video processing.
Alright.
And the teams are focusing on all the piping and electrical installation.
Little is grinding.
All of them are actually very helpful.
We are transitioning to in the final stages of construction early commissioning activities.
Baltimore DC the leach cycle.
How are you.
Where we are concentrating on utilization of Miami erection electrical and confusion.
Installation.
Moving on to the timeline.
We called the gold continues to track well to the update of the project Hydro production.
Production on literally a ton in Florida.
We are working on in close alignment with our partners Sumitomo and our contractors to ensure safe.
Safely on time.
So.
Our focus on Q3 will be complimenting the construction of an amazing portions of the pump and stocking pre commissioning activities Q4 will be farquhar assumption utilization of pre commissioning of operational 40 or or something around that.
With Scott I will turn it back to you. Thank you.
Thank you John Zink and.
On our call today, I would like to add that our goal is straightforward we want to ramp up.
To wrap up of course to be amongst the most successful major gold project start ups.
That is not to say we are nave about the challenges ahead, but the team we have in place and continue to Bill I've done this before.
Excited about the future at core today and.
And what it means for R&M girl.
On slide 12.
Of course, when talking about the future we need to continue to highlight gossip.
We're continuing to drill at Gaufman with nearly 8000 meters completed so far this year.
It has only been drilled with a fraction of the meters compared to coty and to have the gap.
And remains open along strike and at depth.
Our last batch of assays resolved earlier this year successfully intersected mineralization to the south.
To the sound off and below the current resource boundary of the deposit.
The goal of the current drill program is twofold.
To expand the mineralized envelope goffman as well as in the field 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 <unk> life of mine plan.
We expect to have results for the ongoing drilling program in early Q4 with.
We believe that golf links with its initial resources are $3 4 million indicated ounces and one 7 million ounces <unk> continue to be in the early stage of discovery and concentrating as location Micha immediately adjacent to their core deposit as a potential to add <unk>.
<unk> value for their coating project.
With that I will pass the call over to our CFO to walk us through focused spend game and ensure.
<unk> Martin.
Thank you Renaud and good morning, everyone.
Looking ahead to project spending.
Thank you JP incurred $271 million in project expenditures on 100% basis.
$489 1 million on a 70% 70% basis during the quarter.
It's worth highlighting that for accounting purposes, the JV funding and amending agreement does not meet the requirements of arthritis to recognize the addition 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 utilized the financial liability on the balance sheet that approximate the current repurchase price.
Presenting the $250 million funding contribution that you mean, Tim or Mike on <unk> behalf.
That resulted in our interests being diluted 63% as.
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 and Tokyo to achieve commercial production.
Since commencement of construction to choose from.
223 billion of the planned.
296, 5 billion of the project expenditure has been incurred.
Hey.
The remaining costs to incur to complete <unk> is estimated at $665 million to $735 million at St.
For $465 million to $515 million at 70%.
The high range of the estimate to complete of $735 million will take us to the $2 965 billion by the August 2022 Technical report.
The table at the bottom outlines a declaration of the quarterly cost to complete guidance with the actual spending amount incurred quarter over quarter.
In order to convert.
<unk> incurred cost to complete that savings St. Two uncles actual funding requirements at 61, 3% joint venture partner.
The incurred cost as adjusted with 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.
Goldsmith bumped 63%.
And going forward.
Funding, a great advancement and dilution has been concluded.
During Q2 Sumitomo funded the remaining $61 million after $250 million total Aspen agreement on behalf of the company.
An additional $18 million due to increased ownership.
Sumitomo funded all of the joint venture cash goes up to my and the company commenced funding in June and funded approximately $16 million to the JV given Q2.
I'm Gulf will now, 63% op 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.
Adjusted EBITDA from continuing operations was $63 8 million for the quarter translating to <unk>.
The loss per share of one thing.
In terms of our financial position.
<unk> ended the quarter with seven adding $47 7 million in cash and cash equivalents.
$462 5 million available by the 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 was in cash and cash equivalents $91 3 million was held by Pepsico and.
70, <unk> hundred $70 1 million was helped by this again.
Okay.
So I'll tackle your JV requires its joint venture partners to fund the advance two months of future expenditures and cash goals are made at the beginning of each such months, resulting in the months and cash balance approximating the following months expenditure.
For <unk> the.
The company mining uses dividends to repatriate funds of which the company will receive 90% based on its ownership up debit and taxes.
Do you have a dividend during the second quarter of $120 million, which was received from <unk> subsequent to the quarter end net of minority interest in withholding taxes.
I mean, that's 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 reliant on the ability of our operations to generate sufficient EBITDA to support that kind of the company.
This is one of the reasons why we announced 400 million term loan in the quarter, which allowed the company to pay down the credit facility and use it for the capital requirements of <unk>, and therefore de linking biotech funding from certain items in the macroeconomic environment and our other operations.
The charge improves <unk> balance sheet, and strength and fix it but allowing the credit facility to be available to support working capital requirements.
Yeah, we were wrapping up okay, that's what it's delivering legacy.
The prepayment agreement.
And it gives us some measure of insurance in case of <unk>, we're seeing challenges with changes in the operating metrics that can help make environment.
Yeah.
I am both will finance remaining portion of the customer using funding estimate of $425 million to $475 million from available cash bonuses.
The remaining proceeds.
From the bed bug assay sales and as you note.
Beginning optical as country ramps up we can then direct our attention to key longer term financial goals.
270% position in the <unk> JV.
Deleveraging, our balance sheet towards a more optimal capital structure.
With that I will pass the call back to and I think you are now.
Thank you Mark and then I I really wanted to take a moment here to thank everyone on the iron golf team for the tireless efforts and dedication.
This is an exciting time for this company.
I should also note that we will be holding our coating line to offer investors in that electricity Dogger 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.
To 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 getting.
You can't get an idea for your long term vision for Iron 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 Faso. Once cotai is ramped up and.
Yes, I guess I'll leave it there for now.
Doctor.
Yes.
Yes.
Appreciate that appreciate the questions and as you as I mentioned on the call.
They are right now is definitely focused on call. It a building a strong Canadian platform continued to operate safely its like having this as a significant mind for US is generating continued to generate cash flow. We appreciate this consideration right now and for Qunar in the regions, but our efforts in <unk>.
<unk> continued to make the mine worked well for us.
I missed one contributor as we move forward in the future.
While there while that dress and the step by step in the building of this kind of this company but.
I would say at this stage, while we've come to know too.
To focus on this.
The strong and safe operation of our FIS are happening in.
In parallel as I mentioned.
Also to develop and grow at a very strong base in Canada. This is Susan.
As we see the gate.
I also wanted to ask about the plan to update 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.
Now we're definitely not the senior reduction there was obviously questions about those tons that were previously.
Thank you your slate to be on the heap leach, but but.
I believe you know the team has worked very hard and diligently to incorporate those.
<unk> well to replace some time some ounces mined so no 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.
Okay.
You have kind of a picture of an improved outlook going forward in the.
In your prepared remarks and in the.
The <unk>.
MD&A.
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.
This year it all into guidance 70, 90000, which we felt pretty strong that we are going to meet well and as we can.
But you mentioned that 200000 ounces, that's definitely not the goal.
Near future to flush.
That mine to its limit.
I would rather see this mine focused on quality.
Returning to our very strong and a higher grade underground, which we're ready to lead the economics of this month. So in the short term of course, we're using and all that.
Our 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.
Defendant feels strong.
That it could be at 125 to 150000 ounces producer at a much better margin.
And then if I could just ask about co day finally and the.
The autonomous truck haulage.
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.
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 that.
That's sort of ups and downs. Thanks.
Well I'm sure looking forward.
To the site tour in October to see.
<unk> progress seven 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.
Tandem is our fleet.
Right now what we see is we see a ramp up that is.
Or as sorry.
And again, there is no need for.
Operations of the fleet.
But later, so actually we are commissioning trucks walnuts towards the other and they are fully utilized.
And it works.
It looks real good.
Okay. Thank you all very much.
Thanks.
The next question is from Anita Soni with CIBC World markets. Please go ahead.
Hi, good morning without it.
A few questions for me just in terms of co pay.
You talk a little bit more about the process, where you are building.
We're optimizing to look for the critical need to.
To get those up and running.
Can you talk about like how many.
Total leach tanks that you have 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 with the tankers that would impact the commissioning.
Yes, thank you very much.
Maybe.
We kind of go back to the slide shown looser the leach tanks as you can see the solution that's quite helpful.
We are in piping electrical.
Sure Mark.
Undertakings have been installed.
We hope to reshuffle your workforce.
So could you color youll switches will be crushing circuit.
As I mentioned.
We have a couple.
Right now so we are making tactical decisions software to ship power.
Deal with a critical keeps us move.
I'll move forward.
<unk> activities.
<unk> holds a big chunk of it.
Quite on pumps.
We are basically getting memorandum for the pre commissioning in order to come to hydro test.
We will be starting with the.
First horrified Tom.
We'll be gradually introducing more tonnage.
Scott 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.
Our phase two of the dam is full.
One year a positive production.
<unk> is about one 5 million cubic meters.
Allows us to a commodity.
Walter Scott published.
Phase one is complete.
This is what 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 July So you can see those opportunities if you look at the multiple guns.
Sure.
It's quite a bit of work, which is sort of the advance in the phase II.
Okay. So the phase two is a full on.
My understanding is that you 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.
Between to occur.
That's the case.
Correct.
Okay.
Yeah.
Okay.
Yeah.
Alright, great.
Please repeat that.
We would have enough capacity to start upfront.
Sure. Okay, and then just in terms of when we think about next year.
Said early 2024 six.
Six months out can you give us some color on what.
Really 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 trying to get an idea of what.
'twenty 'twenty four would look like.
Hi, guys.
I don't think we're prepared to give them a much finer date in the first quarter.
Yes.
One thing that's very important here.
We have a chance to.
<unk> discussed previously as the focus is really on.
Our ramp up in achieving in getting as close to the nameplate possible rather than focusing on a single item up the gulfport.
We wanted to Gulfport to be incorporated in the most efficient way to reach our nameplate. So having said that we're at.
So pretty confident that they'll go apart would occur early end of Q1.
Okay Alright.
And then just wanted to see.
I'll go back on on Westwood, you talked about maybe getting to 125 to 150 ultimately there.
Thank you said good luck Doyle property is should be adding contributing to the mix in the back half of the year could you remind me what the grades are at that wouldn't be open to you.
Hello Bruno.
This bank at our own.
4% to five Gram per tonne.
So we intend to.
Close to 100000.
Tons this year process.
Okay, how would you be done to date or <unk> date on my plate alright.
Just started.
Okay. Thank you very much that's it for my questions.
Yeah.
Once again, if you have a question. Please press Star then one.
Our next question is from Mike Parkin with National Bank. Please go ahead.
Hey, guys. Thanks for taking my questions and then just to confirm the timing of it.
Life of mine update Chris Mccann when does that do it.
Okay.
Did you say the technical report.
Yes.
So Q4, probably somewhere you know like advanced in Q4. So we wanted to have everyone a chance to digest properly their report that prior to or early 2020 for guidance.
Okay.
And then.
You've guided to higher costs, and obviously as you 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 you.
You would appreciate of course, if you compare with the last couple of years to get there is of course, the increase spending around the security I mean, it is part of it is we need to to do what it needs to be done to keep everyone safe.
Team has done an awesome job.
Well one of the biggest thing of course as mentioned as fuel and if you.
After Q2 for instance, the overrun that I'll fall <unk> using a vessel to generate to generate power is a very big tickets and all this is basically a $100 an ounce on the overall impact on our Q2.
So moving forward, having said that even though the comp does increase there was a significant decrease in our mining unit costs in Q2 compared to Q1, it's almost a dollar or so so the mine is operating extremely well, but unfortunately you have some inflation. So if we are I think the extra capacity of store.
As we move towards Q4 will be a big element of it.
Having more star Asia inventory.
Providing us with more chance to operate borrower, 100% with Egfr 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 and has had difficulty sometimes to provide.
Yes.
Power as we advance should we.
Should we have a better controls on the fuel supply and power generation being with that checks all of those will be the big.
Tickets to retention costs.
Yes.
Okay. Thanks, very much guys.
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 goslin coming out you mentioned that you're working on that one as well.
Yes.
I think that this stages metallurgy call studies. This program would be the priority and as we mentioned the more we drill goslin more we grow it.
And I think I think it's.
I think it's relevant to say that.
As stated we need to have a pretty good idea.
The size of gasoline and what it means in or before we.
Two quick.
And two studies and so forth. So I think 23 and the part of 'twenty four we're going to continue to be very aggressive on the drilling and growing the deposit doing our metallurgical studies and that and.
And then are you cannot but I definitely do not see the rush to any.
Gration study.
But we're probably even late 'twenty four 'twenty five.
Exactly.
Hello Tanya.
Got it.
In addition, with the methodological split.
We have also.
Julie.
This thing to perform.
Lead.
And as a nation building that is currently ongoing.
Okay. So so.
All of this combined maybe late 'twenty four 'twenty five until the market gets some sense yes.
Yes, correct, yes.
Okay.
Alright, so thats helpful. There and just on Essakane I know, Mike asked about the costs. So 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.
Ken more evenly balanced throughout the rest of the year would that be a fair way of looking at that mine.
Hello, Ted now we should see.
Yes.
Be well.
Or at least Q3 and through for.
The situation with the fuel.
It gets normalized.
We also would expect capitalized waste stripping to pursue it.
The current plan program as well.
And for mining as well.
Overall 12 relatively the same kind of cost pressure, we see on the books.
Sure.
Okay.
Production evenly flat.
The grade is going to be also going into the same okay.
Okay, and then can I ask because obviously getting the cash flow.
And getting cash flow from ASUR can we've got higher risks with the with the security issues 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 side and inventory levels.
First I know that as we are.
Turning to secure supplies, we are increasing.
Our working capital.
Hello.
Slide them back.
<unk>.
Additional capacity for our fuel storage in Q4.
We're doing trying to do the same for nitrogen for explosives.
Okay.
Bob.
Okay.
Yes, good morning, John Yes. So so we are seeing a increase in the inventory at the site as we are trying to build more capacity.
There is good opportunities to bring supplies ink.
So there was an increase in there.
Thank you a question also asked about.
Gosh getting cash out of the country.
We declared 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 that dividend assays.
As of 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 explosive.
Other consumables are you carrying inventory the six months should I be thinking like that sort of inventory levels.
Three six.
Thanks, Dan.
In fact for our fuel.
Sure.
<unk> close and between 15 days 30 days the expectation now is to increase the capacity close to 40 to 45 days.
Okay.
Ladies and I thought you had longer sorry.
No.
No. Unfortunately, though I think this is Barry.
Much aligned with especially for fielding all with best practices. They are usually like bringing it sounded like 20 days will be more than enough usually and it has been in the past now because of the logistics of the calm buoy systems, rather than frequent periodic Blake so.
We accumulate trucks and then Lori dam. So there is a need here to increase because we do not have.
You guys have previously and our lack of 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 as a matter of fact in Canada, you would have less than 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 I'm wondering bill. 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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