Q3 2023 Kinross Gold Corp Earnings Call
Speaker 1: Thanks for standing by and welcome to the Kinross goal third quarter 2023 results conference call and web.
Thank you for standing by and welcome to the Kinross Gold third quarter 2023 results conference call and webcast I would now like to welcome Chris Licking Health, Vice President of Investor Relations to begin the call.
Speaker 1: I would now like to welcome Chris Lickenholt, Vice President of Investor Relations, to begin the call.
Chris over to you.
Speaker 2: Thank you and good morning. With us today we have Paul Rolinson, President and CEO and from the Kenross Senior Leadership Team, Andrew Freeboro, Claude Schimper, Claude Dunford and Chuck Coles.
Thank you and good morning with US today, we have Paul Rollinson, President and CEO and from the Kinross Senior leadership team, Andrew Febrile Onstream for bolt on for Chuck.
Speaker 2: For a complete discussion of the risks and uncertainties which may lead to actual results different from estimates contained in our board-looking information, please refer to page 2 of this presentation, a news release dated November 8, 2023, the MD&A for the period ended September 3, 2023, and our most recent filed AIF, all of which are available on our website. We'll now.
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 November eight 2023 MD&A for the period ended September 32023, and our most recently filed Aif all of which are available on our website I will now.
I will turn the call over to Paul.
Speaker 3: Thanks, Chris, and thank you all for joining us. This morning, I'll provide an overview of our third quarter and update you on our ESG initiative.
Thanks, Chris. Thank you all for joining us. This morning, I will provide an overview of our third quarter.
And update you on our ESG initiatives.
Speaker 3: I will then hand the call over to Andrea to discuss financial performance.
I will then hand, the call over to Andrea to discuss financial performance.
Speaker 3: But to highlight our operating performance and will to discuss our project.
But to highlight our operating performance.
And we'll discuss our projects.
Speaker 3: Our operations continue to deliver strong performance in the third quarter, and we remain well positioned to meet our full year guidance.
Our operations continued to deliver strong performance in the third quarter, and we remain well positioned to meet our full year guidance.
Speaker 3: Our focus on delivering on our targets continues to drive strong results.
Our focus on delivering on our targets continues to drive strong results.
Speaker 3: At the end of Q3, we had produced just over three quarters of our full-year production.
By the end of Q3, we had produced just over three quarters of our full year production.
Speaker 3: at costs that are tracking in the lower half of our guidance frame.
At costs that are tracking in the lower half of our guidance range.
Speaker 3: Our business is performing well and we generated strong cash flow. In the first nine months, we generated nearly $1.2 billion of operating cash flow.
Our business is performing well and we generated strong cash flow in the first nine months, we generated nearly $1 $2 billion of operating cash flow.
Speaker 3: And after re-embracing our operations and project pipeline, we generated over $400 million of free cash flow.
And after reinvesting in our operations from project pipeline, we generated over $400 million of free cash flow.
With respect to our operations in.
Speaker 3: In the third quarter, Cassius, Paracetute and LaCoika all continue to deliver excellent results accounting for approximately 70% of our production with an ASIC of just over $1,000 through our.
In the third quarter, Tasiast parakeets U and the Coipa all continued to deliver excellent results accounting for approximately 70% of our production with an <unk> of just over $1000 per ounce.
Speaker 3: Daseus had a record production quarter producing 171,000 ounces.
Tasiast had a record production quarter, producing 171000 ounces was.
Speaker 3: was once again our highest cash flow operation.
It was once again, our highest cash flow operation.
Speaker 3: Dr. Ketu also performed well in the third quarter and as planned at a high-end production quarter of the year.
Thank you to you also performed well in the third quarter and as planned and its highest production quarter of the year.
Speaker 3: The coinpo was once again our lowest cost operation and also generated strong cash flow.
The <unk> was once again, our lowest cost operation.
And also generated strong cash flow.
Switching to the U S.
Speaker 3: Our operations performed well with production at each site higher than the prior quarter.
Our operations performed well with production on each site higher than the prior quarter.
Speaker 3: Ford NOx have a strong production quarter while also making no modifications to accommodate a higher grade banjo or.
Fort Knox had a strong production quarter, while also making no modifications to accommodate a higher grade band show or.
Speaker 3: We recently celebrated the commencement of mining activity in a groundbreaking ceremony with the local native village of Tetland and the governor of Alaska. Poet shoulder hand and a Chingdev,
We recently celebrated the commencement of mining activity and a groundbreaking ceremony with the local native village of talent and the governor of Alaska.
<unk> remains on budget.
Speaker 3: but on schedule to begin contributing or to Fort Knox in a second.
On schedule to begin contributing or to Fort Knox.
In the second half of next year.
Speaker 3: At round mountain work has progressed on several fronts.
At round Mountain work has progressed on several fronts.
Speaker 3: As outlined in our release, we are pleased to report that we have now approved faith us, making a future around mountain more clear.
As outlined in our release.
We're pleased to report that we have now approved tests.
Making a future at round mountain more clear.
Speaker 3: Our plan is to progress from the current phase W to phase S, which is the next phase of open pit mining.
Our plan is to progress from the current phase W. Two phase <unk>, which is the next phase of open pit mining.
Speaker 3: These two phases will take production at round until the end of the decade.
These two phases will take production at round until the end of the decade.
Speaker 3: In addition to phase S, we also see a Tanshell to add higher grade underground or first from phase X and later from Goldhill. You'll hear more.
In addition to phase as we also see potential to add higher grade underground ore first from Spacex and later from Gold Hill.
You'll hear more on this later from wells.
Speaker 3: At Grave Bear, we can teach you to make strong progress in the third quarter.
A great bear we continued to make strong progress in the third quarter.
Speaker 3: These are staff permission drilling is ongoing with 11 rigs currently operating on site.
Resource definition drilling is ongoing with 11 rigs currently operating on site.
Speaker 3: We are seeing excellent results from our directional drilling program, which is allowing us to increase our underground resources more cost-effect.
We are seeing excellent results from our directional drilling programs, which is allowing us to increase our underground resources more cost effectively.
Speaker 3: As I noted last quarter, we are expecting a meaningful increase to the LT Underground Resource as part of our year end update.
As I noted last quarter, we are expecting a meaningful increase to the LP underground resource as part of our year end update.
Speaker 3: Additionally, directional drilling and other areas of mineralization are also showing promising sides of growth.
Additionally, directional drilling in other areas of mineralization are also showing promising signs of growth.
Speaker 3: In particular, at the hands-on, located adjacent to the main LP zone.
In particular at the Haynesville located.
Adjacent to the main L T zone.
Speaker 3: A recent high-grade intercept returned 2.8 meters true width with grades of approximately 260 grams per ton at a vertical depth of 870 meters.
A recent high grade intercept returned two eight meters true width.
With grades of approximately 260 grams per tonne at.
At a vertical depth of 870 meters.
Speaker 3: At the Great Bear Project, we have both a provincial and federal permitting process.
That's a great fair project.
Both our provincial and federal permitting process.
Speaker 3: In the third quarter, we continue to progress studies and provincial permitting for the advanced exploration decline, which is what we refer to.
In the third quarter, we continued to progress studies and provincial permitting for the advanced exploration decline.
Which is what we referred to as the Aes.
Speaker 3: With respect to the main project, we progressed permitting with IAC, Impact Assessment Agency of Canada, on federal matter.
With respect to the main project, we progressed permitting with IAG.
Impact assessment agency of Canada on federal matters.
Speaker 3: We are continuing our work on environmental baseline studies at local to the main project, as well as indigenous consultations.
We are continuing our work on environmental baseline studies applicable to the main projects as well as indigenous consultations.
Speaker 3: We also continue to advance technical studies, including engineering and field tests.
We also continue to advance technical studies, including engineering and field tests work.
Speaker 3: We plan to provide an update on this work in the form of a preliminary economic assessment or PEA in the second half of next year.
We plan to provide an update on this work in the form of a preliminary economic assessment or P. A in the second half of next year.
Speaker 3: I'd like now to switch gears and highlight some of our latest work at ESG.
I'd like now to switch gears and highlight some of our latest work on ESG.
Speaker 3: In the third quarter, we advanced our ESG efforts across three main areas.
In the third quarter, we advanced our ESG efforts across three main areas.
Speaker 3: Number one, we completed a comprehensive review of our community management system, leading to the development of a new social performance management system for implementation at all levels.
Number one.
We completed a comprehensive review of our community management system, leading to the development of a new social performance management system.
For implementation at all of our operations.
Speaker 3: And two, we advanced our natural capital strategy focused on land use, water management, biodiversity, air quality.
Two we advanced our natural capital strategy focused on <unk>.
Land use.
Water management.
Biodiversity.
Air quality way.
Mismanagement and reclamation.
Speaker 3: And three, we continue to deliver on our climate strategy.
And three we continue to deliver on our climate strategy.
Speaker 3: Construction of our 34 megawatt solar facility at Tassius is nearly complete.
Construction of our 34 megawatt solar facility at Tasiast is nearly complete.
Speaker 3: For context, 34 megawatts of clean energy will reduce our carbon emissions by over a half a million tons over the current life of mine.
For context, 34 megawatts of clean energy will reduce our carbon emissions by over a half a million tons over the current life of mine.
Speaker 3: This project is one of the key contributors to achieve our 2030 emissions reduction goal.
This project is one of the key contributors to achieve our 2030 emissions reduction goal.
So to recap.
Speaker 3: With strong year-to-date performance, we are well positioned to meet our guidance.
With strong year to date performance, we are well positioned to meet our guidance.
Speaker 3: With our projects at Cassius and La Coipa complete.
With our projects and Tasiast and La Coipa complete.
Speaker 3: We look forward to these assets continuing to generate strong cash flows.
We look forward to these assets continuing to generate strong cash flows.
Speaker 3: Our financial position has strengthened as we have continued to repay debt.
Our financial position has strengthened as we have continued to repay debt.
Speaker 3: We continue to return capital through a competitive dividend.
We continue to return capital through a competitive dividend.
Speaker 3: and we are advancing the next round of projects that will contribute to our future.
And we are advancing the next round of projects that will contribute to our future.
With that I will now turn the call over to Andrea.
Speaker 4: Thanks, Paul. I'll discuss financial highlights from the quarter, provide an overview of our balance sheet, and comment on our guidance and outlook.
Thanks, Paul I'll discuss financial highlights from the quarter provide an overview of our balance sheet and comment on our guidance and outlook.
Speaker 4: As Paul noted, our strong performance continued in the quarter, with production on track for 2.1 million ounces, and cost tracking in the lower half of our guidance.
As Paul noted our strong performance continued in the quarter with production on track for 2.1 million ounces and cost tracking in the lower half of our guidance range.
Speaker 4: In Q3, we produced 585,000 ounces, anchored by strong production from our two top-tier assets, Cassius and Perica II, continued solid performance at La Coypa, and increased production over the prior quarter at each of our U.S. sites.
In Q3, we produced 585000 outfit anchored by strong production from our two top tier at Tasiast.
<unk>.
<unk> solid performance out la coipa and increased production over the prior quarter at each of our U S site.
Speaker 4: Gold sales of 571,000 ounces were slightly above production due to timing of sales.
All sales of 571000 or slightly above production due to timing of sales.
Speaker 4: In Q3, our average realized gold price was $1,929 per ounce in line with the average spot gold price.
In Q3, our average realized gold price was $1929 per ounce in line with the average spot gold price.
Speaker 4: Process sales of $911 per ounce in Q3 was relatively stable with the prior quarter.
Asset sales of $911 per ounce in Q3 was relatively stable with the prior quarter.
Speaker 4: That's a sale that Tassia's, Perico 2, and La Coypa averaged $735 per ounce, once again underpinning strong performance and free cash flow.
Cost of sales at Tasiast Cherokee Chew on La Coipa averaged $735 per ounce once again underpinning strong performance and free cash flow.
Speaker 4: Margins were strong in Q3 at $1,018 per ounce sold.
Margins were strong in Q3 at $1018 trout salt.
Speaker 4: All in sustaining costs were $1,296 per ounce in Q3, which was in line with the prior quarter.
All in sustaining costs were $1296 per ounce in Q3, which was in line with the prior quarter.
Speaker 4: Year-to-date cost sales of $931 per ounce were below the midpoint of our full-year cost guidance range.
Year to date comp sales of $931, perhaps or below the midpoint of our full year cost guidance range.
Speaker 4: Spots are expected to increase in the fourth quarter, primarily due to lower expected grades at Perica 2 as a result of planned mine sequencing.
Opex increased in the fourth quarter, primarily due to lower expected grades at parity as a result of planned mine sequencing.
Speaker 4: For 2023 as a whole, we now expect to finish the year in the lower half of our guidance range. So below 970 dollars per hour.
For 2023 as a whole we now expect to finish the year in the lower half of our guidance range of below $970 per ounce.
Speaker 4: In Q3, our adjusted earnings per share was 12 cents, and adjusted operating cash flow per share was 38 cents.
In Q3, our adjusted earnings per share was <unk> 12.
And adjusted operating cash flow per share was <unk> 38.
Attributable capex in the third quarter with $272 million.
We remain on track for our full year guidance, but we do expect to finish the year towards the top end of our range.
Speaker 4: free cash flow for the quarter with $123 million or $187 million excluding working capital changes and over $400 million for the nine month period.
Free cash flow for the quarter with $123 million or $187 million, excluding working capital changes and over $400 million for the nine months period.
Speaker 4: According to the balance sheet, our financial position remains strong in the third quarter as we continue to de-lever.
Turning to the balance sheet, our financial position remains strong in the third quarter as they continued to de lever.
Speaker 4: We ended the quarter with $465 million in cash and approximately $2 billion of total liquidity.
We ended the quarter with $465 million in cash and approximately $2 billion of total liquidity.
Speaker 4: Our net debt declined during the quarter as we repaid $50 million of the $100 million outstanding on the revolving credit facility. Subsequent to quarter end, we repaid the remaining $50 million balance.
Our net debt declined during the quarter as we repaid $50 million of the $100 million, adding.
Pending on the revolving credit facility.
Subsequent to quarter end, we repaid the remaining $50 million balance.
Speaker 4: Our 12 months net that the EBITDA ratio continued to trend lower as we finished the quarter at 1.1 times.
Our 12 month net debt to EBITDA ratio continued to trend lower as we finished the quarter at one one times.
Speaker 4: As mentioned, following the nine months results and a good start to queue for, we're in a strong position to achieve our guidance. I'll now turn the call over to Clawed to discuss their operations.
As mentioned following the nine months results and a good start to Q4, we're in a strong position to achieve our guidance I'll now turn the call over to Claude to discuss our operations.
Thank you Andrea.
Speaker 5: I would first like to begin by discussing the significant progress our team has made on our journey to a more progressive, people-centric health and safety philosophy in the last year.
I would first like to begin by discussing the significant progress. Our team has made on our journey to a more progressive people centric health and safety philosophy than last year.
Speaker 5: All our employees and business partners play a major role in shaping how we operate safely across our operations.
All of our employees and business partners play a major role in shaping how we operate safely across our operations.
Speaker 5: Our Homegrown Safety Excellence Program stands out for its genuine bottom-up approach, leveraging the collective experience of employees to foster a culture of ownership, collaboration, and shared focus.
Our homegrown safety Excellence program stands out suites jinyan bottom up approach.
Leveraging the collective experience of employees to foster a culture of ownership collaboration and shared purpose.
Speaker 5: This has begun to influence how we operate, and safety excellence is an integral piece of our operational excellence approach. Now moving on to Q3 and our operations.
This has begun to influence how we operate and safety excellence is an integral piece of our operational excellence approach.
Now moving onto Q3 on our operations.
As Paul said, we are well on track to meet our annual guidance.
Speaker 5: Our expansion projects that tazis and the koepa are complete and all our minds are performing as planned.
Our expansion project at Tasiast and liquid bulk complete and all our mines are performing as planned.
Speaker 5: That is delivered record quarterly for action of 171,000 ounces at a cost of sales of $666 per ounce. Benefiting.
Tasiast delivered record quarterly production of 171000 ounces at a cost of sales of $666 per ounce.
Benefiting from strong throughput and.
Speaker 5: strong grades and recoveries as we continued mining in the higher grade section of West Post full.
Strong grades and recoveries as we continued.
Many in the higher grade section of what's possible.
Speaker 5: We remain on track to achieve our full year production guidance in the range of 610,000 ounces across the sales of $680 per hour.
We remain on track to achieve our full year production guidance in the range of 610000 ounces at a cost of sales of $690 per ounce.
Speaker 5: Construction at the solar power plant is nearly complete and we are on plan for first power to the grid by year end.
Construction at the solar power plant is nearly complete and we are on plan for the first parts of the grid.
Speaker 5: Installation of the photovoltaic panels, inverters, and transformer stations are now complete. And the battery system installation
Installation of the photovoltaic panels Inverters and transformer stations are now complete.
And the battery system installation is well progressed.
Speaker 5: Electrical works and completion of the growth connection are continuing with three commission testing underway.
Electrical works and the completion of the grid connection are continuing with re commissioning and testing underway.
Speaker 5: Arica II had a strong quarter, producing 172,000 ounces at a cost of sales of $845 per ounce.
<unk> had a strong quarter, producing 172000 ounces across the sales of $845 per ounce.
Speaker 5: As indicated, fourth quarter production at Barakatu is expected to be lower and cost slightly higher due to the location of mining in the place.
As indicated fourth quarter production at <unk> is expected to be lower and costs slightly higher due to the location of money in the bank.
Speaker 5: We remain on track to achieve our PULIO production guidance in the range of 590,000 ounces. But it costs the sales of 8009-
We remain on track to achieve our full year production guidance in the range of 590000 ounces at a cost of sales of $890 per ounce.
Speaker 5: Atlacoifer, strong operating performance continued during Q3, driven by strong rays and recovery.
At La Coipa strong operating performance continued during Q3, driven by strong grades and recoveries.
Speaker 5: The coin fell was the lowest cost mine in our portfolio in Q3, producing 66,000 ounces across the sales of $629 per ounce, and contributing strong free cash.
<unk> is the lowest cost mine in our portfolio in Q3, producing 66000 ounces at a cost of sales of $629 per ounce and contributing strong free cash flow.
Speaker 5: We remain on track to meet our full year production guidance in the range of 240,000 ounces and cost the tracking below our guidance.
We remain on track to meet our full year production guidance in the range of 240000 ounces and costs are tracking below our guidance.
Now moving to the U S operations.
Speaker 5: Production improves over the prior quarter at each of our sites while costs remain unaligned.
Production improved over the prior quarter at each of our sites while costs are banking law.
Speaker 5: We remain on track to achieve our full-year guidance range of 670,000 ounces at a cost for fails of $1370 pounds.
We remain on track to achieve our full year guidance range of 670000 ounces at a cost of sales of $870 balance.
Beginning with the Fort Knox operations Q.
Speaker 5: 23 production of approximately 72,000 ounces was slightly higher, closer to the court.
Q3 production of approximately 72000 ounces was slightly higher quarter over quarter.
Speaker 5: At Man Joe, activities remain on schedule and on budget. And we are on track for initial production in the second half of next year.
As manto activities remain on schedule and on budget and we are on track for initial production in the second half of next year.
Speaker 5: Construction is now 90% complete with commissioning activities well underway as well as the preparations to transition the projects to operation.
Construction is now 90% complete with commissioning activities well underway as well as the preparation to transition the project to operations.
Speaker 5: Construction on the mill modification that put nox to purchase material always progressing on plan with all the complete work start
Construction on the mill modifications at Fort Knox to process manager, who is progressing on plan with all the concrete work stoppages.
Speaker 5: and work now progressing primarily inside the mill on tanks and piping coupons.
And work now progressing primarily inside the mill on tanks and piping components.
Speaker 5: Further work is scheduled to take place over the next several months per plan. The head of production in the second half of next year.
Further work is scheduled to take place over the next several months both Pat.
Ahead of production in the second half of next year.
Speaker 5: At Bould Mountain, production of approximately 41,000 ounces improved over the prior quarter as a result of higher heat-per-age stacking rates and full mining activity ramped up considerably against the second quarter.
At Bald mountain production of approximately 41000 ounces improved over the prior quarter as a result of higher heap Leach stacking rights as full mining activity ramped up considerably against the second quarter.
Speaker 5: The drown mountain, production of approximately 64,000 ounces, was higher over the prior quarter. The milling of high grade old from TWS.
At round mountain production of approximately 64000 ounces was higher over the prior quarter with the modeling of high grade ore from Phase W. Two.
Speaker 5: Concert around mountain were better than initially planned due to favorable grades, stacking rates and the farming of the leech inventory. With that, I'll...
Also at round mountain were better than initially planned due to favorable grades stacking rates and the timing of the leach inventory.
With that I will now pass the call over the world.
Speaker 6: Thanks, Claude, a start by discussing round-mount and then provide updates at Curly and Grape Bear. As Paul mentioned, we have approved moving forward with mining at phase S, securing meaningful production scale at round-mount through the end of the day.
Thanks, Claude I'll start by discussing round mountain and then provide updates at currently and Greg Baer.
As Paul mentioned, we have approved moving forward with mining phase outs, securing meaningful production scale at round mountain through the end of the decade.
Speaker 6: As you will recall, we made the decision at the end of last year to disperve the mining of phase-as, given our focus on ensuring strong economic margins and returns on our capital and the
As you will recall, we made the decision at the end of last year to defer the mining of phase <unk>.
Given our focus on ensuring strong economic margins and returns on our capital investments.
Speaker 6: Since that time, we've been working on optimizing the design and are pleased with the outcome of that work, which has yielded a lower strip, higher grade, and significantly lower cat-x plan.
Since that time, we've been working on optimizing the design and are pleased with the outcome of that work, which has yielded a lower strip higher grade and significantly lower Capex plan.
Speaker 6: This was achieved by stepping in the pit design, removing higher strength, lower margin ounces, and by identifying opportunities to add some near surface lower strip ounces earlier in the mind sequence to offset our stripping costs.
This was achieved by stepping in the pit design, removing higher strip lower margin ounces and by identifying opportunities to add some near surface lower strip ounces earlier in the mine sequence to offset our stripping costs.
Speaker 6: This optimized design has yielded a high return resilient opportunity with a significantly lower cap X that can now be funded by production at Round Mountain over the next two years and provide a bridge to our future underground opportunity.
This optimized design has yielded a high return resilient opportunity with a significantly lower capex, but can now be funded by production at round mountain over the next two years and provide a bridge to our future underground opportunities.
Speaker 6: We provide clarity around our mind plan sequence at round mountain. We are mining W2 now and we'll see similar production next year before W2 starts to taper off. And phase-as starts to ramp up in 2025.
To provide clarity around our mine sequence at round mountain, where mining W. Two now and we will see similar production next year before WTO starts to taper off and phase I starts to ramp up in 2025.
Speaker 6: By 2026, we will be at full production of phase-ass and will continue to produce through the end of the deck.
By 2026, we will be at full production phase us and will continue to produce through the end of the decade.
Speaker 6: We anticipate adding approximately 750,000 ounces of total production from phases.
We anticipate adding approximately 750000 ounces a total production basis.
Speaker 6: The culmination of W2 and phase S are expected to average production of 250,000 ounces annually over the 24 to 28 timeframe.
The combination of WTO and Faze us are expected to average production of 215000 ounces annually over the 24% to 28 timeframe.
Speaker 6: As we continue to mine these open fit faces, we are focused on exploring and studying our higher grade, potentially higher margin underground opportunities at phase X and gold help.
As we continue to mine as open pit phases, we are focused on exploring and studying our higher grade essentially higher margin underground opportunities Ah Phase IX and gold Hill.
Speaker 6: We see potential for phase X to come online in late 26 or early 27. Gold hill to come online towards the end of the deck.
We see potential for phase <unk> come online in late 2006 or.
Our early 'twenty seven gold Hill to come online towards the end of the decade.
Speaker 6: The Exploration B-Cline of Faisax is progressing well with approximately 1000 meters developed today, keeping us well on track to start definition drilling early next year. At Goldhill, we will continue drilling in Q4 of this year and into next year.
The exploration decline at phase <unk> is progressing well with approximately 1000 meters developed to date, keeping us well on track to start definition drilling early next year.
Our gold Hill will continue drilling in Q4 of this year and into next year.
Moving to currently in Washington State in Q3, we intersected a new vein zone as we continue to follow the interpreted palio surface Tibet.
You can see this intersection on the slide all $11 68, which returned 14 meters at 16 five grams per tonne.
While it is only one hole. This intercept is both wider and higher grade than our existing resource, which we can see on the slide higher up to the left.
Existing resource average is just over six grams per ton and is generally narrow vein offering potential to add production to our portfolio later in the decade.
Exploration next year will focus on the wider and more continuous areas in our existing resource and will follow up on the new zone of higher grade mineralization that we recently intersected.
Moving onto Great Bear in Q3, we moved one of our six directional rigs across row LP to the himself, which as Paul indicated resulted in the highest grade intercept we have seen since acquiring the property showing approximately 260 grams per ton at a minable width of $2 eight meters.
The hinge zone, which is classic Red Lake style mineralization is approximately 700 meters away from the <unk> zone, and we expect to be able to easily access it from our exploration decline, which will be located midway between the two.
This high grade intercept at approximately 870 meters vertical depth.
Is about 600 meters below our inferred resource.
Along with other drill results. This confirms our view that the himself to provide additional high grade ore to supplement the L T cell.
In addition to the high grade intercept that hinge you can see on the slide our latest intercepts at the <unk> zone, where the other drill rigs have been primarily focused.
The directional drilling is increase the density of our intercepts at depth, allowing us to target a meaningful addition to the underground resource.
We continue to see wide high grade mineralization reinforcing our thesis, but this system continues at depth and provides potential for a high productivity long life mine.
We'll be updating our resource estimate on the back of this drilling in our year end update in February.
In addition to the drilling campaign, we are advancing in two key areas that Greg there.
<unk> declined through which we will be able to complete definition drilling at depth and bulk sampling and the main project, which includes the mine mill and related infrastructure required for production.
For the <unk> feasibility level design and engineering is now complete.
You can see the surface design for AVX here on this slide.
Provincial permitting is on track and procurement for long lead items, such as the cap our infrastructure and water treatment is underway.
Surface construction is planned for the second half next year.
For the main project design and engineering is well underway baseline.
Baseline studies and field work campaigns are also progressing well.
Notably we have progressed and extensive test work program of soil and overburden geotechnical conditions to provide increased certainty as we progress the design of our project infrastructure.
The recent bedrock geotechnical drilling has also continued to demonstrate competent ground and favorable raw characteristics for both the open pit and underground.
Permitting work at the main project is ongoing we expect to release a PPA in the second half of next year.
In summary, we are excited by the continued success of our drilling campaign and by the progress we are making to bring us cornerstone project into production.
I'll now turn it back to Paul.
Thanks will.
In closing.
We have delivered a strong third quarter and first nine months, we are well on track to meet our annual guidance.
Looking forward.
We are excited about our future.
We have a strong production profile.
We are generating significant cash flow.
We have an investment grade balance sheet.
We have an attractive dividend.
We have an exciting pipeline of opportunities.
And we are very proud of our commitment to responsible mining and has made us a leader in ESG performance within the industry.
With that operator, I'd like to open up the line for questions.
At this time I'd like to remind everyone in order to ask a question Press Star then the number one on your telephone keypad, we'll pause for just a moment to compile any questions.
Again, if you'd like to ask a question. Please press star one on your telephone keypad now.
Our first question comes from the line of Ralph property with eight capital. Please go ahead.
Thanks, very much operator.
Good morning, Paul.
Cast your team to elaborate a little bit on the stepping in.
The pit design at round mountain.
To access and bring down that strip ratio. Just wondering is this is this a result of increased confidence in some of the sloped characteristics. Maybe can you just describe the work that's being done in that area and potentially would be useful to have what impact that had on the overall strip ratio.
Sure Ralph Good morning, Thanks for the question.
Yes look the team.
It has been heads down and done some really good optimization market.
And the last several months.
We've come up with a.
Really.
Robust outcome.
And I'll, let will speak in a little bit more technical detail tell them, what we did here what we're thinking.
Yeah. So we have done a lot of work on <unk> in terms of just increasing our confidence, but we haven't changed the slope parameters that we're using.
So the overall slope angle is so similar to the old pays us really what it was as you can see in the diagram on the slide is just stepping in the back of it in areas, where the strip ratio and the grade.
Resulted in the lowest margin kind of increments of that yet and at the same time.
Managed to identify through drilling and supported by the technical teams some opportunities to bring in some lower strip ratio material. So that took our total strip ratio down from about two three to $2. One that you see in the press release.
Got you Okay. That's helpful along.
The capital let me Alex.
Yeah. Thanks, again, if I could switch to directional drilling at great there.
Are you are you looking at going deeper and extending both the vertical and horizontal reach of that debt and maybe you can elaborate a little bit more on where specifically you're targeting.
The areas for directional and Ed perhaps what also are the targeted depths.
Sure.
Yes look I mean.
Asleep the transition here directional drilling has worked great for us in part due to the competency of the rock not all material.
Holds up to directional drilling, it's working really well for us here and as we've said, where it's become very cost effective way to increase density underground.
Yes.
But there are limits and part of the transition here is too.
This is why we're looking to get that decline started in and do more drilling underground as we get a decline advanced yeah. So we we have five rigs right now that are really focused on what were overall, calling DLP zones without human zoro Oro, a kind of a key.
Part of the ore body that we've drilled off of five out of the six directional drift drill rigs are primarily focusing between 501000 meters there where we're building out our resource we are obviously as you've seen in some of that drill highlights we are doing some deeper drilling as well just to prove the thesis, but we're really focused on that 500 to 1000 meters.
That's kind of the next decade of the of the mine plan and we want to understand that as we design our infrastructure. We did as we noted in the press release take what Reg in this quarter and take it across the hinge area.
The higher grade grade Red Lake style mineralization, and we view that rig to drill deeper as well there and we're going to be trying to build out some resources there.
Okay.
Does that sufficiently this activity a good picture.
Excellent answers thanks very much.
Our next question comes from the line of Anita Soni with CIBC World markets. Please go ahead.
Hi, Good morning, guys. Thanks for taking my question so.
I'm going to focus on the round mountain phase data.
And I think you've got a presentation on slide 19 that gets a little bit more color on the production profile, but could you breakout for me because I went back to the reserves and resources last night.
Couldn't really.
Exactly what was happening there but.
What is the.
Grades and timing for phase outs, and what the grade in Taiwan.
W. Two.
You can give as of 2022 year end are flat.
Yes.
As of 2022 year end.
I mean, the one that you've got public right I just need the breakout of the public.
Public.
This is Arthur.
Oh in terms of what's in phase I believe it's around 800000 ounce.
Yes, so we've got around.
Hi, H I believe is what it is in the phase <unk> resorts close to nine we can follow up with the exact.
And the grade.
The greater pays us in.
The resource.
Well the reserve daily because he said you put it in reserves as of year end 2022.
Yes, I think it was and that.
Close to 0.6 Gram per tonne range, but we'll follow up with the exact a mixture of mill and Leach shock.
Break that out.
Probably the one on the mill closer to point for bleach, but in that ballpark, yes, 4.8, yeah exactly.
But we can follow up with what was in last year.
Because I didn't.
It looks like margins do you think that answer with Titan living.
Wasn't clear.
<unk> eight <unk>.
And four on the Leach it out what it is.
Third current grades.
For the mill at Phase at this 0.8, I believe just 0.5, but we'll follow up on exactly what it was in the reserve last year, because obviously, our current design are slightly different in that reserve.
What I'm really trying to drive at is how much of how much of <unk> based <unk> left and what like why do we might like when you're out and you're showing us the incremental I just need to know what the.
You know what the numbers are.
For the actual amount.
Yeah.
We will have about $150000 last at the beginning of next year and phase W.
That's in the ground, but obviously pending.
Pending our final reserve update this year.
Also W. Three which is still in reserve, which is a significant number of ounces.
And overall the site itself, excluding phase I just.
And the Leach inventory and some other cleanup areas is about 400000 ounces.
But we've got.
Just looking at kind of phase W.
And plus the remaining leach tail et cetera, that's about 400 or 100.
<unk> 50 of that is still in the ground.
End of year.
And then you've got an additional 750 coming on from what we've just released regarding faceoffs, you've still got somewhere around 800, but final reserve will confirm to phase W. Three.
Okay. So I think that will probably take it offline, but could you tell us what the capex spend over into 2020 for 2025 like you've given us the overall lump sum that mentioned that.
There is a deferral of capital that basically allows us to be improve approved so I'm just wondering what the catalyst the cadence of the CAD $140 million $170 million.
Mike how it's broken down or are you asking.
Yeah.
Thank you Scott.
Okay.
Yes, we are spending 125 next year on faceoffs in terms of capital that's about 115 of initial cap.
And another tenant sustaining and then in 'twenty five we'll be spending $60 million in capital.
<unk> and <unk>.
These numbers that sort of within that kind of billion dollar range of capital we've been talking about.
Our total 2024.
Not at all.
Momentum to what we can do that.
Yeah.
Yes, I mean, I took a stab at it last night to try to add this but.
Key pieces of information, we're missing side sorry.
Sorry about that.
I need those any of those pieces to be able to give you the credit for it so and then moving to two great there could.
Could you remind me with the with the overall.
Results that you just delineated there I mean, you said you are expecting an increase in our reserves at the LP fault could you give us sort of a ballpark figure on what you think that you'd be able to add with these results.
Yeah.
All we've said and we said it on the last call.
As the directional drilling has increased density.
We are expecting that increase.
Our resources at depth and DLP zone.
And we will give an update.
At the end of the year.
I think.
We kind of Notionally directed towards at least 500000 ounce of spot.
As the work continues the density of drilling continues.
As you can see from the results.
As we tighten up that drilling.
That will help support.
Yes.
That increase in the underground resource.
Okay. Thank you thanks for taking my questions.
Yes.
Yeah.
Our next question comes from the line of Carey <unk> with Canaccord Genuity. Please go ahead.
Hi, Good morning, guys I'm, just wondering if you could it's good to see the uptick in throughput at Tasiast and La Coipa, just wondering how those ramp ups are going into Q4, and what sort of run rates you're seeing now.
Yes Securities.
No.
You've seen the increased throughput we're focused on maintaining the deliverable towards the end of the year.
With our progress towards 24000.
Into the new year.
Next year.
At.
At La Coipa, we've steadily been.
Crewing stacking rates and milling rates.
And October was a really good month for us.
An average of over 30000 tonnes a day.
So we're as Paul alluded to we consider now both test equipment projects complete.
As those mines now sustain that.
Throughput.
Well the mine plan around.
What's feasible for particularly some of the year.
So at Tasiast is should we be assuming something in the 'twenty, one 'twenty two range or for Q4.
Absolutely.
Okay, Great and then maybe just on the 2012 for 2021 guidance Youre tracking kind of above the $2 1 million.
He announced Mark just wondering if you could just.
Should we think about Q4 in terms of language assets.
<unk> come off of it and which ones are going to be stronger than the guidance that would be helpful.
Yeah, Gary it's Paul here.
Yeah. Good question I mean look we were just reiterating.
Our guidance here, we're solidly on track.
Our guidance.
Certainly as it relates to production.
Probably going to be.
Okay.
<unk> is a little lower.
It's probably in the lower half on costs.
And maybe in the upper half on Capex.
But.
Our intention is to.
The land on $2, one as guided for the year.
Maybe if I might add just.
We did note in the call that too.
Two will be slightly down in the fourth quarter, because where we are.
We would expect <unk> to be on track.
Fort Knox will be on track.
Round Mountain will also be a little bit down in Youtube as we head into the <unk>.
Respecting the Windsor Knutsen.
Alright, great. Thank you very much.
Okay.
Our next question comes from the line of Josh Wolfson with RBC capital markets. Please go ahead.
Yes, thanks very much.
I had a question regarding the implications of phase asset for round Mountain and I guess, what does it mean for <unk>.
Existing three year guidance that was issued I guess part of it was addressed.
Wanted to maybe clarify a couple of things.
On the production there there's been a number of provided on average.
For a for a five year period.
Wondering is that production reasonable to expect.
Over the next.
The two years outstanding for the three year guidance, and then just going back to the capital given that capital was is tracking high. This year inflation is still present and then new Capex are we still comfortable with that $1 billion target I think there was a comment beforehand. It suggested that thank you.
Yes, you can see on slide 19, we've given a bit of.
Guidance as to where the production moves.
With phase that's included in the plan. So you can see that there isn't that significant.
Within the three year guidance period, we've provided there's not a significant contribution yet from phase F.
And not one that moves the needle enough the word change.
Change in guidance today.
And you can also see that there is a bit of a depths of the $2 15 over the four year period that we gave obviously at slightly variable you can see next year, we're planning to be similar production scale for this year.
And then dipping down in 2025, as we continue to pull off of the leaches and finish up at W. Two.
I can start to ramp up activities that face us.
And then we will recover that over 200000 ounce Mark in 2026 forward.
On the on the Capex guidance.
Related to that and then.
Earlier comments that we still expect to be somewhere around $1 billion range in 2020 or about exit caveat.
We're just in our budget process now.
We should be in a $1 billion.
Got it okay.
And then for manned show just sort of addressing some of these media reports.
Legal items.
Is there any sort of timeframe, we can expect to receive.
An update there.
Yes.
Oh, yes.
Nothing more than what we've said early Josh I mean everything is on budget on track.
As we said in our remarks, we actually had a groundbreaking ceremony with the local communities that governor stater.
<unk>.
Everything's everything.
And good shape moving ahead.
Okay.
Thank you very much.
Okay.
Thanks.
Our next question comes from the line of Kenya jacket sought Nick.
With Scotiabank. Please go ahead.
Good morning, everybody that's me.
So I just have a few questions if I can.
Just some follow up I'm going to start just on round mountain.
Again this phase asks when and I appreciate you, giving us the slide 19 to show US the production profile, but maybe from a high level when you said lower scrap.
You know that's going to help on the cost side, maybe directionally from a high level.
What improvements have you seen on cost is it 10% 20, just directionally. So we have an idea.
That says we can with the information.
Yes reduced about a third of our strip so at renters to about $80 million worth of kind of upfront capex costs as compared to what we were considering last year and you can see in the table, but what we see as the go forward Capex.
From what I outlined for you guys.
Okay.
Got it.
The Capex is roughly down a third.
Where it's at now.
Yeah, Yeah, no I was just more focus on the operating cost.
Saw the Capex.
On cash on cash cost.
Kenya.
Our expecting cash costs are 20 or MLR.
<unk> Aaron.
And 25% in APAC.
Yes.
Okay. When you say, Andrew 'twenty 2024, similar argue meaning similar overall company.
24 to 23, and then are you just saying 2025 overall.
Or is it just round mountain Jeffrey.
Yes.
Okay.
And the really positive thing.
As with that lower Capex and the change in the strip ratio, although the cash cost will be staying similar over the next couple of years, there's actually enough free cash flow coming out of phase W.
<unk> hundred 50 that we kind of run our analysis for this to fund pre stripping phase outs of funds that you know about 125 next year and that 60 of the following year.
Okay.
Thanks, and then my second question actually has to do with that great. There and currently so just looking at great and looking at the on.
<unk> now and seeing that that's drilling continues to go deeper on the grade continues to improve and I. Appreciate all of you said that bought in the last conference call. We said between half a million dollars and 1 million ounces added to the reason why some Florida the underground.
Just wondering if because of great appearing to be better I'm, obviously, you know better grade gasoline.
Yes.
Are you thinking that we are going to be towards the upper end of that range.
I think Daniel will stick with.
We are highly confident on 500.
I'm expecting we'll do better but.
I don't really I don't want to speculate at this point.
I think.
It's clear to me me here is.
It's directional drilling is really filling in the panel.
And you know.
What we've got here is a really attractive.
Open pit high grade open pit, which will have great cash flow and now the underground.
It was our thesis is filling and quite nicely. So we can kind of see phase one of the main followed by the underground.
Now starting to show that the engine Red Lake style mineralization.
<unk> a depth. So we'll have a high grade feed it's all coming together.
Really well.
But the point I think we were trying to make is.
The efficiency is great but.
It comes a point, where I'm not sure makes a lot of sense to keep punching down below one kilometer.
Everything is going full speed ahead with the decline as we said we expect to begin early works.
Next year.
Once we get the declined out lumpy more definition drilling.
From there as opposed to Armstrong.
Yeah, no that makes sense and maybe just.
Has your thought process changed or getting a lot of visible gold I see there.
On slide 21, just changed at all on the capital factors that youre going to be using has that changed at all and just remind me what have you been thinking about these high grade.
Without some sort of water we platform.
Yes, I think I think.
Good observation.
Seeing a lot of visible gold.
My expectation is.
That will ultimately drive a positive reconciliation, but it's a Hollywood problem.
No absolutely not 200 plexiglass at plan.
Okay. Maybe my last question Joseph I can move on to Canada can you just remind me what's our expectations you've got another good drill results again higher grade.
What you have in that.
The overall resource can you remind me what we're expecting for year end 2023, when you report your results.
Okay.
Yes, we are expecting to see an increase in our resource obviously, that's going to come out fairly shortly.
But it is we're hoping to be.
Overall between inferred and indicated to be.
Around that 1 million ounce, Mark maybe a little bit higher.
But obviously February as far as where the work will come to fruition and give you a firm number.
The increases that we've seen there obviously that new drill hole.
We're not expecting to have a resource around that by year end, that's one hole at the bottom of the palio surface there.
So thats going to take follow up work at the end of this year and into next year before we can pull that into a resource.
Okay. That's what I was trying to understand whether that could be pulled them. Okay. So that one is not program that you are expecting an overall increase in the resource from the other lower grade holes that you have outlined that.
Yes, we are we've had some other good intercepts higher up in the in the area of our resource, particularly around K, five which you can see on the page in the press release, where we come out of some of our better mineralization and the existing resource. So we do expect a positive update the resource there.
Okay. Thank you so much I'll lead off coupon op ask questions. Appreciate you answering my questions.
Thanks Tanya.
Yes.
Our next question comes from the line of Mike Parkin with National Bank. Please go ahead.
Thanks, guys and congrats on the solid quarter. Most of my questions have been answered just wondering with phase <unk>.
Having to build another pad are you fully permitted for all that or is there any kind of.
Permitting to kind of get completed.
Further derisked that optimize pays us.
No we already have our federal permits for phase <unk>.
There is no significant permitting that's required.
Small expansion on our existing card that was already planned as part of their old phase W work. So.
Oh, no hurdles and the weather.
And then.
Just following up <unk> question on Curlew.
We're targeting to be over a million ounces a total resource.
Ultimately, it's our internal goal that you can share with us in terms of scale of our resource that would.
Kind of hit a level, where you might see the pulling of the trigger the restart or is that just kind of too early and we'll just have to wait for as these additional results continued to build the resource.
I mean, I think as you've seen with our.
Both have progressed phase IC vendors as an example over the last year of our focus on the underground Phase IX, We're really focused on margins as a company and making sure we have a strong return on our investments.
So it's not necessarily just a total ounces number it is.
There's a lot of opportunity along that alio surface, it's really about making sure that we can make money on the web and the grades that were coming through with the resource and we've got the right plan design around that so that's where the focus is on the PFS is really around the mine design.
Optimizing the cash flow on an annual basis that we can get out of it.
There's no doubt there's long term potential from a resource perspective.
We need to make our cash flow.
And after the results proven kind of.
Any kind of comment in terms of management expectations are you finding the drill results are proving in line a little better than what you kind of thought when you've been expanding these zones.
Yes, I mean, our obviously our drilling is targeted to expand in the better areas. That's really what we focused on this year and we have seen some extensions in <unk> five but it is quite early.
To wrap it up I think it's we do need to follow up on some of these really really strong grades and widths.
But we need to continue to do our work and we'll have more information I think next year as we complete our PFS.
I think the key point here, our thesis was tracing that purely aligned.
And.
That's gone.
Very well.
We had a thesis that the mineralization, where basically all of that daily aligned.
And it has.
We're getting good results.
This last.
Spectacular result was ironically, the last call of the drill campaign. This season, it's a good way to end the program.
Very exciting, but we've got more work to do.
Okay looking forward to more results from there thanks Scott.
There are no further questions at this time I would now like to turn the call over to Paul Rollinson for closing remarks.
Thank you operator.
Thanks, everyone for joining us this morning.
And it might be a busy morning out there. So I appreciate your time and your questions and we look forward now.
Catching up with you in person in the coming weeks. Thank you.
I'd like to thank our speakers for today's presentation and thank you all for joining US. This now concludes today's call and you may now disconnect.
Thank you.
Yeah.
Yes.
Yes.
[music].
Yes.