Q4 2023 Agnico Eagle Mines Ltd Earnings Call
Operator: Good morning. My name is Julie, and I will be your conference operator today. At this time, I would like to welcome everyone to the Agnico Eagle fourth quarter and full year 2023 conference call. All lines have been placed on mute to prevent any background noise.
Good morning, My name is Julie and I will be a conference operator today.
Julie: This time I would like to welcome everyone to the Agnico Eagle fourth quarter and full year 2023 conference call.
Speaker Change: All lines have been placed on mute to prevent any background noise. After the speakers' remarks, there will be a question and answer session. If you'd like to ask a question. During this time Sempra Press Star then the number one on your telephone keypad, if you'd like to withdraw your question. Please press Star then the number two thank you Mr. Ahmad Al <unk> you may begin your conference.
Operator: After the speaker's remarks, there will be a question and answer session. If you'd like to ask a question during this time, simply press star, then the number one on your telephone keypad. If you'd like to withdraw your question, please press the star, then the number. Thank you, Mr. Ammar Al-Jandi. You may begin your conference. Thank you, operator, and good morning, everyone. First, let me say thank you again for joining us this morning. It's always great to have our owners and our friends and analysts with us. This morning, in particular, my colleagues and I are excited to talk to you about our fourth quarter and full year results. The results, as you will hear, are very strong.
Julie: Yeah.
Ahmad Al: Thank you.
Ahmad Al: And good morning, everyone.
Ahmad Al: First let me say, thank you again for joining us. This morning, it's always great to have our owners and and our friends and analysts joining us.
Ahmad Al: This morning in particular, Oh, my colleagues and I are excited to talk to you about our fourth quarter and full year results. The results as you will here are very strong.
Ammar Al-Jandi: But while these results are strong, and we're going to talk about them, we're more excited to talk about our future, not just our guidance for 2024 and 2025 and 2026 but the next several years. And importantly, we'll talk a little bit about some of the key projects that will propel Agnico Eagle forward. It'll propel us forward by delivering more value per share at mines that, importantly, we already operate in regions we've been in for decades, and with people and teams already in place. We'll go through a number of slides this morning, and you'll hear from a number of our most senior executives about the business and how it's going, but really, the message we want to leave with you is a simple message. It's a message of stability.
Ahmad Al: But while these results are strong and we're going to talk about them. We're more excited to talk about our future not just our guidance for 'twenty 'twenty four 'twenty five and 'twenty six.
Ahmad Al: But the next several years and importantly, we will talk a little bit about some of the key projects that will propel agnico Eagle Ford It will propel us forward by delivering more value.
Ahmad Al: Per share.
Ahmad Al: At mines that importantly, we already operate in regions, we've been in for decades.
Ahmad Al: And with people and teams already in place.
Ahmad Al: We will go through a number of slides this morning, and you'll hear from a number of our most senior executives about about the business and how it's going but really the message we want to leave with you.
Ahmad Al: Is it a simple message.
Ahmad Al: It's a message of stability.
Ammar Al-Jandi: Consistency and quality, quality of the projects, quality of the assets, and the quality of our people. It's a message, hopefully..., that you'll walk away thinking and appreciating that Agnico has built a unique position in this industry, with some of the largest, longest-lived gold mines in the world, operating in the safest jurisdictions, with great exploration potential, continuing great exploration potential, great operating results, and great It's a company with a 66-year history of fiscal prudence, Capital Discipline, and Per Share Focus. Perfect, thank you.
Ahmad Al: It's consistency.
Ahmad Al: And of quality quality of the projects quality of the assets and the quality of our people.
Ahmad Al: It's a message hopefully.
Ahmad Al: That youll walk away.
Ahmad Al: Thinking and appreciating that agnico has built.
Ahmad Al: Our unique position in this industry.
Ahmad Al: But some of the largest longest life gold mines in the world.
Ahmad Al: Operating in the safest jurisdictions.
Ahmad Al: With great exploration potential continuing great exploration potential great operating results and great projects.
It's a company with 66 year history of fiscal Prudence.
Ahmad Al: Capital discipline.
Speaker Change: And per share focus before I jump in I would suggest and note that there are forward looking statements.
Ammar Al-Jandi: So in discussing our fourth quarter and full year 2023 highlights. So for 2023 highlights and full year, four important milestones and achievements, one: record gold production. Best ever in the quarter.
Speaker Change: And if I might ask our operator, if we can jump to.
Speaker Change: Slide five.
Perfect. Thank you.
So in discussing our fourth quarter and full year 2023 highlights.
So for 2023 highlights and full year for important milestones and achievements one.
Record gold production.
Speaker Change: Best ever in the quarter best ever for a full year.
Ammar Al-Jandi: Best ever for a full year. You know, that's impressive for any company. It's especially impressive, I think, for a company that's been around for 66 years. Two. Record cash from operations. Best ever in a quarter, best ever in a year.
Speaker Change: That's impressive for any company, it's especially impressive I think for a company that's been around for 66 years.
Two.
Speaker Change: Record cash from operations best.
Best ever in a quarter of best ever in a year.
Ammar Al-Jandi: 3. Record mineral reserves up 10% to almost 54 million ounces. So it shows not only are the operations doing well, but the reinvestment into the business and into the future is doing well. And, most proud of all, the best annual safety performance in the company's history. I've had the pleasure of talking about solid safety performance on a number of these calls.
Speaker Change: Three.
Speaker Change: Record mineral reserves up 10% to almost 54 million ounces. So it shows not only are the operation is doing well, but the reinvestment into the business and into the future is doing well and then four.
Speaker Change: Most proud of all the.
The best annual safety performance in the company's history I've had the pleasure of talking about solid safety performance on a number of these calls.
Ammar Al-Jandi: You know we're passionate about it. I'll say it again, there's nothing more important, nothing more important, than keeping our people safe, our community safe, and the environment safe. And I want to say a special thank you to all of our employees who are listening in, not only for taking the responsibility to keep yourself safe, but the responsibility to keep your colleagues and co-workers safe. And then we'll also talk about the future.
Speaker Change: You know, we're passionate about it I'll say it again, there is nothing more important nothing more important.
Speaker Change: Then keeping our people safe our community safe and the environment safe.
Speaker Change: And I want to I want to say a special thank you to all of our employees who are listening in.
Not only for taking the responsibility to keep yourself safe, but the responsibility to keep your colleagues and coworkers safe.
Speaker Change: And then we'll also talk about the future.
Ammar Al-Jandi: We'll talk about our guidance, solid three-year production guidance with industry-leading costs. And we're going to talk about, again, we're most excited about the projects that we have in place that we think will add significant value, and we'll talk about some of... The guidance that we're going to give more clarity on that towards the middle of the year. Next page, please.
Speaker Change: I'll talk about our guidance solid three year production guidance.
Speaker Change: With industry leading costs.
Speaker Change: And we're going to talk about again, we're most excited about the projects that we have in place.
Speaker Change: That we think will add significant value and we will talk about some of the guidance that we're going to give more clarity on that towards the middle of the year.
Speaker Change: Next page please.
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Ammar Al-Jandi: So these results, which we're very proud of, are clearly a function of the assets we have... But really, none of this could happen without the quality of the people that we have.
Speaker Change: So these these results which were very proud of.
Speaker Change: Are clearly a function of.
Speaker Change: The assets we have.
Speaker Change: But really none of this could happen without the quality of the people that we have we talked about safety.
Ammar Al-Jandi: We talked about safety. It's impressive enough on its own, a 35% reduction versus what were already aggressive targets. But really interesting is that every single operation, every one, met or exceeded their safety targets last year. It's also about an engaged workforce, a happy workforce, in 2023. We continue to improve the results of internal surveys with regard to employee satisfaction. We had 80% of employees fill out the survey; that's exceptional. And almost 80% of our employees said Agnico Eagle was a great place to work. Not just a good place to work, but a great place to work.
Speaker Change: It is.
Speaker Change: Crescive enough on its own a 35% reduction.
Speaker Change: Versus what we're already aggressive targets.
But really.
Speaker Change: Interesting is that every single operation, everyone met or exceeded their safety targets last year.
It's also about an engaged workforce are happy workforce.
Speaker Change: In 2023.
Speaker Change: We continue to improve.
Speaker Change: The results of internal surveys with regards to customer with regards to employee satisfaction, we had 80% of employees fill out the survey that's exceptional and almost 80% of our employees said Agnico Eagle was a great place to work not a good place to work a great place to work.
Ammar Al-Jandi: Agnico Eagle was recognized on Forbes' list of Canada's 50 best employers. We're doing more training. We have more indigenous employees and colleagues, and we have lower turnover. It's not just the assets, it's not just the regions, it's the people that we think give Agnico Eagle a tangible, competitive edge. And you know, I'll give you one of my favorite real-life examples of Agnico. When you go underground at Agnico, when you're talking to a young, capable person, and they tell you that their uncle and father worked at Agnico, and they tell you that one of their grandparents worked at Agnico. You don't get that everywhere.
Speaker Change: Agnico Eagle was recognized in Forbes list of candidates 50 best employers.
Speaker Change: We're doing more training.
Speaker Change: We have more indigenous.
Employees and colleagues and we have lower turnover.
Speaker Change: It's it's not just the assets not just the regions. It's the people that we think.
Speaker Change: Give agnico Eagle a tangible competitive example, and you know I'll I'll give you one of my favorite real life. Examples of Agnico. When you go underground at Agnico, when you're talking to a young capable person.
Speaker Change: And they tell you that their uncle and father worked at Agnico and they tell you that one of their grandparents worked at agnico.
Speaker Change: You don't you don't get that everywhere next page please.
Ammar Al-Jandi: So looking forward. 2024 to 2026 production outlook. Really just two words.
Speaker Change: So looking forward to.
Speaker Change: 24 to 2026 production outlook.
Speaker Change: Really two words steady.
Ammar Al-Jandi: Steady. Reliable. Our guidance for 2024 is exactly what we said it would be. Our cost guidance of between $875,000 and $925,000 is up a little bit from what we were able to do in 2023, but it's only 4%, and we're hoping to... Just like we did in 2023, do the best we can, and we have a track record of being able to do that. Our 2025 guidance remains the same at 3.4 to 3.6 million ounces, the same guidance that we gave last year, and 2026 shows steady production, again steady, again reliable. Next slide, please.
Speaker Change: Reliable.
Speaker Change: Our guidance for 2024 is exactly what we said it would be.
Speaker Change: Our cost guidance between 875 to 925 is up a little bit from what we were able to do in 2023.
Speaker Change: But it's only 4% and were hoping to.
Speaker Change: Just like we did in 2023.
Speaker Change: Do the best we can and we have a track record of being able to do that our 2025 guidance remains the same at $3 40 to $3 6 million ounces same guidance that we gave last year and 2026 shows steady.
Speaker Change: Production again.
Speaker Change: Steady.
Speaker Change: Again reliable next slide please.
Speaker Change: So I've got two more two more slides.
Ammar Al-Jandi: So on this page, I want to talk about where we are on the consolidation of our Abitibi platform, including not only two of the world's... two of the ten largest gold mines in the world, with Detour and Malartic, but also where we are on consolidating sort of the Cadillac Fault and Upper Beaver and Wassamac and Amalgamated Kirkland, etc. At Detour Lake, and Natasha will go through this in more detail, it is already..., while competing, frankly, with Mallardic to be the largest gold mine in Canada. It's good; we've got both of them competing with each other. MineLife passed on 2050.
Speaker Change: So this page I want to talk about where we are on the consolidation of our abitibi platform, including not only two of the worlds.
Speaker Change: 10 largest.
Speaker Change: Two of the 10 largest gold mines in the world with that with detour and melodic but also where we are on on consolidating a sort of the the Cadillac fault and.
Speaker Change: And upper Beaver, and Wassa, Mac, and and amalgamated Kirkland et cetera.
Speaker Change: At Detour Lake and Natasha will go through this in more detail.
Speaker Change: It is already.
Speaker Change: While competing frankly with melodic to be the largest gold mine in Canada. It's good we've got both of them competing with each other mine life past 2050. It is a great ore body Guy will talk about the exploration success. We've continued to have Natasha will talk about how we take advantage of that by increasing the mill by looking at underground.
Ammar Al-Jandi: It is a great ore body. Guy will talk about the exploration success we've continued to have. Natasha will talk about how we take advantage of that by increasing the mill, by looking underground. And we are aiming to provide more specific guidance by mid-year. You know, and that guidance really is going to be about what's the next step. And the next step, if all goes well... And we're still doing our analysis, would be what you would expect, potentially looking to put in exploration ramps to be able to possibly take some bulk samples, confirm grade continuity, confirm ground conditions, the kind of things that you would expect a professional mine company to do when they have such a great asset as that. With Canadian Malartic, Dominic will talk about that. There are three items there.
Speaker Change: And we are aiming to provide.
Speaker Change: More specific guidance by mid year and.
Speaker Change: And that guidance really is going to be about what's the next step and the next step if all goes well.
Speaker Change: And we're still doing an analysis would be what you would expect.
Speaker Change: Potentially looking to put in exploration ramps to be able to possibly take some bulk samples.
Speaker Change: Firm, great continuity confirm ground conditions, the kind of things that you would expect the professional.
Speaker Change: Mine company to do.
Speaker Change: When they have such a great asset is that.
Speaker Change: With Canadian melodic Dominic will talk about that.
Speaker Change: Three items there one continue to focus on building and optimizing the underground are putting in the shaft.
Ammar Al-Jandi: One, continue the focus on building and optimizing the underground, putting in the shaft, how the mining is going. Dominic will talk about how we're ahead of schedule on development. We're getting positive tonnage reconciliation with the internal zones. Everything is going well.
How the mining is going Dominic will talk about we're ahead of schedule on development or getting.
Speaker Change: Positive tonnage reconciliation with the internal zones everything is going well.
Ammar Al-Jandi: But Dominic will also talk a little bit about where we are early, but where we are on looking at the second shaft. And three, the work that we're doing to look at filling the mill as mill capacity becomes available later this decade. And the third item that you see at the bottom of this page is something we're really quite, quite proud of, and I'm going to start with probably the smallest one, Amalgamated Kirkland and Near Surface.
Speaker Change: But Dominic also talk a little bit about where we are.
Speaker Change: Early but where we are on looking at the second shaft.
Speaker Change: Three.
Dominic: The work that we're doing to look at filling the mill as a mill capacity becomes available later this decade.
Dominic: And the third item that you see at the bottom of this page.
Dominic: If something actually we're really quite quite proud of and I'm going to start with probably the smallest one amalgamated kirkland and near surface. So amalgamated Kirkland.
Ammar Al-Jandi: So Amalgamated Kirkland, the reason we're particularly proud to talk about that is if you go back two years... when we did the merger, and we talked about synergies, and we all know that we have delivered roughly double the GNA synergies that we talked about. We specifically talked about some low-hanging fruit, including amalgamated Kirkland. And we said, look, this is within tens of meters of existing MCASA infrastructure. If we can access that at very low capital and produce maybe 25 or 40,000 ounces a year, that's just a simple example of how you create value through synergies and through consolidation. You know, I'm proud to say that it's already now amalgamated Kirkland and the near surface. It's in our mind's plan.
Dominic: The reason, we're particularly proud to talk about that is if you go back two years.
Dominic: When we did the merger and we talked about synergies.
Dominic: And we all know that we have delivered roughly double the G&A synergies that we talked about what we specifically talked about some low hanging fruit, including amalgamated Kirkland.
Dominic: And we said look this is within tens of meters from existing the Cathay infrastructure. If we can access that at very low capital and produce maybe 25 or 40000 ounces a year that that's just a simple example of how you create value through synergies and through consolidation.
Dominic: Proud to say that.
Dominic: It's already now amalgamated Kirkland and near surface, it's in our mine plants.
Ammar Al-Jandi: There's going to be 19,000 ounces in 2024, 35,000 ounces in 2025, and 50,000 ounces in 2026. Again, I'm going back two years, but we promised you we would talk about that and deliver, and it's a pleasure to be able to point that out. At Upper Beaver...
Dominic: There's going to be 19000 ounces in 2024 to 35000 ounces and 25 50000 ounces in 2026.
Dominic: Again, I'm going back two years, but we promised you we would talk about that and deliver and it's it's a pleasure to be able to point that out at upper Beaver. It's a long life high quality asset very low cost, where we're continuing to do the work there we will be giving an update towards the mid year and again it'll be about next steps do we do we.
Ammar Al-Jandi: It's a long-life, high-quality asset, very low cost. We're continuing to do the work there. We will be giving an update towards the middle of the year, and again, it'll be about next steps. Do we put in an exploration ramp or an exploration shaft to continue to move that project forward? Again, we'll give guidance towards the middle of the year, and then Wausamak.
Dominic: Put in an exploration ramp or an exploration shaft.
Dominic: Hum.
Dominic: Continue to move that project forward.
Dominic: Again, we will give guidance towards the middle of the year and then Wassa Mac.
Dominic: We're making progress.
Dominic: Progress on that.
Ammar Al-Jandi: We're making progress on that. I think most of you know that when we acquired the Canadian assets of Yemena, really, we were primarily focused naturally on Malartic and Wausamak, good assets, but we weren't convinced that the plan that Yemena had would meet our hurdle rates. I'm pleased to say that the work we're doing and our engineers have done something kind of unique in the gold mining space. They've looked at a smaller project that gets a better return on capital. And so we've made some progress on that. We'll give you more guidance. That's probably something in early 2025 that we would talk about.
Dominic: I I I think most of you know that.
Dominic: When we acquired the Canadian assets of Yamana really we were primarily focused naturally on melodic and wassa Mack good asset, but we weren't convinced that the plan that humana had would meet our hurdle rates.
Dominic:
Dominic: I'm pleased to say that the work, we're doing and our engineers have done something kind of unique in the gold mining space they've.
Dominic: They've looked at a smaller project that gets a better return on capital and so we've made some progress on that we'll give more guidance, that's probably something in early 'twenty five that we would talk about but again, making a good progress on that next page. Please.
Ammar Al-Jandi: But again, making good progress on that. And then, in none of it... very proud of the team at Meadow Bank, added 500,000 ounces of production, and extended the mine life for two years. I'm excited about extending it further, but... We're not going to talk about that right now. You know, this is a mine that has the infrastructure in place. Low risk, very well done by the team, and then Hope Bey and Guy will talk about some of the exploration results that are very promising there. Before I turn it over, at a very high level, very proud of the team for the results in 2023.
Dominic: And then and none of it.
Dominic: <unk>.
Dominic: Yes.
Dominic: Very proud of the team at Meadowbank.
Dominic: Added 500000 ounces.
Dominic: Production extended the mine life for two years Dominic is excited about extending it further but.
Speaker Change: We're not going to talk about that right now.
This is a mine that's got the infrastructure in place.
Speaker Change: Low risk a very well done by the team and then hope a guy will talk about some of the exploration results that are very promising there and so.
Speaker Change: Before I turn it over at a very high level.
Speaker Change: Proud of the team for the results in 2023.
Jamie Porter: Solid guidance and good progress on some excellent projects leveraging off existing infrastructure in places we're already comfortable with. And with that, I'll turn it over to our CFO, Jamie Porter. Thank you, Amar, and good morning, everyone.
Speaker Change: Solid guidance and good progress on some excellent projects leveraging off existing infrastructure and places were already comfortable with and with that I'll turn it over to our CFO Jamie Porter.
Jamie Porter: Thank you Omar and good morning, everyone.
Jamie Porter: As Ammar mentioned, 2023 was a record year on a number of fronts. We had the safest year in the company's 66-year history and record quarterly and full year gold production. This excellent safety and operating performance led to very strong financial results. We generated an operating margin of $979 million in the fourth quarter, which was driven by our two largest mines, Detour and Canadian Malartic. Gold production in the fourth quarter was a new quarterly record at 903,000 ounces.
Jamie Porter: As Mark mentioned 2023 was a record year on a number of fronts. We had the safest year in the company's 66 year history and record quarterly and full year gold production.
Jamie Porter: This excellent safety and operating performance led to very strong financial results.
Jamie Porter: We generated an operating margin of $979 million in the fourth quarter, which was driven by our two largest mines detour and Canadian mill Arctic.
Jamie Porter: Gold production in the fourth quarter was a new quarterly record at 903000 ounces and for the full year, we hit the very top end of our production guidance at 344 million ounces.
Jamie Porter: And for the full year, we hit the very top end of our production guidance at 3.44 million ounces. We are also very pleased to report that we achieved our cost guidance, with our total cash costs for the year coming in at the exact midpoint of our guidance of $865 per ounce and our all-in sustaining costs of $1,179 per ounce well within our guided range. We are proud of the work our teams have done on controlling costs in what's been an inflationary environment over the past several years and on the team's focus on continuous improvement. A tangible example of this focus on costs is in Nunavut, where cost optimization efforts are driving costs lower by about $100 an ounce in 2024.
Jamie Porter: We were also very pleased to report that we achieved our cost guidance with our total cash cost for the year coming in at the exact midpoint of our guidance of $865 per ounce and our all in sustaining costs of $1179 per ounce well within our guided range.
Jamie Porter: We are proud of the work our teams have done on controlling costs and what's been the inflationary environment over the past several years and the team's focus on continuous improvement a tangible example of this focus on cost is in Nunavut, where <unk>.
Cost optimization efforts are driving costs lower by about $100 an ounce. In 2024. This has helped enable us to extend the life of the <unk> deposit as Mark just just alluded to.
Jamie Porter: This has helped enable us to extend the life of the Amaroq deposit, as Amar just alluded to, from 2026 to 2028, adding 500,000 ounces of production. Now, we move on to slide 12. Looking at our financial highlights, record gold production drove record operating cash flow for both the fourth quarter and the full year. However, we recorded a net loss per share of 77 cents in the fourth quarter. This was driven by non-cash impairment charges related to MACASA and penile salt.
Jamie Porter: From 2026 of 2028, adding 500000 ounces of production.
Jamie Porter: If we move on to slide 12.
Jamie Porter: We look at our financial highlights record gold production drove record operating cash flow for both the fourth quarter and the full year.
Jamie Porter: While we recorded a net loss per share of <unk> 77 in the fourth quarter. This was driven by noncash impairment charges related to Mckesson Pinos Altos.
Jamie Porter: On an adjusted basis, net income per share was $0.57 in the fourth quarter, which represents a 50% increase relative to the prior year period. I want to briefly touch on the impairment charges that were recorded in the quarter. At MACASA, we recognized a net of tax impairment charge of approximately $600 million, primarily reflecting the write-down of goodwill that was recognized at the time of acquisition back in early 2022. MACASA had an excellent performance in 2023 in terms of production, cost control, and reserve replacement. And this is a mine that has produced over 6 million ounces in its 100-year history. We see tremendous exploration upside. We see production increasing by 50% over the next three years and the potential to continue to replace reserves for years to come. However, we are not able to recognize all of this value in an impairment model.
Jamie Porter: On an adjusted basis net income per share was 57 in the fourth quarter, which represents a 50% increase relative to the prior year period.
Jamie Porter: I want to briefly touch on the impairment charge charges that were recorded in the quarter.
Jamie Porter: Mckesson, we recognized a net of tax impairment charge of approximately $600 million, primarily reflecting the write down of goodwill that was recognized at the time of acquisition back in early 2022.
Jamie Porter: Makassar had an excellent performance in 2023 in terms of production cost control and reserve replacement and this is a mine that has produced over 6 million ounces and its 100 year history, we see tremendous exploration upside, we see production increasing by 50% over the next three years and the potential to continue to replace reserves for.
Jamie Porter: Years to come.
Jamie Porter: However, we are not able to recognize all of this value and an impairment model and this combined with higher costs and capital estimates that were assumed back in 2022 led to the impairment charge.
Jamie Porter: And this, combined with higher costs and capital estimates than were assumed back in 2022, led to the impairment charge. At Pinosaltos, we recognize a net of tax impairment charge of approximately $70 million, reflecting higher expected operating capital costs, in part related to the strength in the Mexican pace over the last..., over the last year. Despite these accounting charges, the business remains very strong. We generated a record $300 million of free cash flow in the fourth quarter, and that's after investing nearly half a billion dollars in capital and exploration spending. We continue to pay a strong quarterly dividend and repaid $100 million of debt in the quarter. For the full 2023 year, we generated $947 million of free cash flow, declared dividends of approximately $800 million, and continue to demonstrate our commitment to delivering strong returns to shareholders.
Jamie Porter: At Pinos Altos, we recognized the net of tax impairment charge of approximately $70 million, reflecting higher expected operating capital costs in part related to the strength in the Mexican peso over the last over.
Jamie Porter: Over the last year.
Jamie Porter: Despite these accounting charges the business remains very strong we generated a record $300 billion of free cash flow in the fourth quarter and that's after investing nearly half a billion dollars in capital and exploration spending we continue to pay a strong quarterly dividend and repaid $100 million of debt in the quarter.
Jamie Porter: For the full 2023 year, we generated $947 million of free cash flow declared dividends of approximately $800 million and continued to demonstrate our commitment to delivering strong returns to shareholders.
Jamie Porter: At current gold prices, we expect to continue to reinvest approximately two-thirds of our cash flow into sustaining and growing our business, exploring to find more ounces, and one-third of our cash flow into delivering returns to shareholders and continuing to strengthen our balance sheet. We move on to slide 13. I'm pleased to report that we were able to continue to strengthen our balance sheet in the fourth quarter. We repaid the outstanding balance on our credit facility and reduced our net debt position to approximately $1.5 billion.
Jamie Porter: At current gold prices, we expect to continue to reinvest approximately two thirds of our cash flow into sustaining and growing our business exploring to find more ounces and one third of our cash flow into delivering returns to shareholders and continuing to strengthen our balance sheet.
Jamie Porter: We move on to Slide 13, I am pleased to report that we were able to continue to strengthen our balance sheet in the fourth quarter, we repaid the outstanding balance on our credit facility and reduced our net debt position to approximately one 5 billion.
Jamie Porter: We've also recently significantly improved our overall liquidity. Earlier this week, we closed a new, upsized, revolving credit facility in the amount of $2 billion. This new facility reflects Agnico's size and scale and investment grade status. Thank you very much.
Jamie Porter: We've also recently significantly improved our overall liquidity earlier. This week, we closed a new upsized revolving credit facility in the amount of $2 billion.
Jamie Porter: This new facility reflects agnico size and scale and investment grade status. It provides us with additional financial flexibility and we were very pleased to have had strong support from our many banking partners.
Dom: We do have increased debt maturities in 2025, and we'll look to refinance or repay those from excess cash at the appropriate time. Overall, the balance sheet remains very strong, and we're constantly working to make it stronger, improving our liquidity and overall financial flexibility. With that, I'll turn the call over to Dom, who will provide an overview of our Quebec and Nunavut offices. Thank you, Jimmy. Good morning, everyone.
Jamie Porter: We do have increased debt maturities in 2025, and we will look to refinance or repay those from excess cash at the appropriate time.
Jamie Porter: Overall, the balance sheet remains very strong and we're constantly working to make it stronger improving our liquidity and overall financial flexibility.
Jamie Porter: With that I'll turn the call over to Don who will provide an overview of our Quebec and Nunavut operations.
Don: Thank you Jamie good morning, everyone. So in the coming slide I'm going to cover the two region in Canada on my side, Quebec in Nunavut, and Natasha will follow with the other regions, but it.
Dom: So, on the next slide, I'm going to cover the two regions in Canada on my side, Quebec and Nunavut, and Natasha will follow with the other regions. Maybe before going to those highlights, Ammar, I would just like to add something or to build on what you mentioned about why, and I think why we're in that position right now. There's the aspect of the people, there's the aspect of the region where we are, but there's also a secret ingredient, it's a bit personal, but I strongly believe in that, which is how we do stuff, how we work all together here at the corporate office with Natasha, Jamie, under your leadership, Amar, Carol, Jean, and Guy. I think this is what makes the difference. This is what I felt when I started in 1998 at La Ronde and again, 26 years later. Under your leadership, Amor, this is what we're doing. And when you go outside, you still feel that.
Don: Before going to the those highlights.
Don: I would like to add something to build on what you mentioned about.
Don: Why and why I think why we're in that position right now there is.
Don: The aspect of the people there the aspect of the the region, where we are but there is also a secret ingredient, it's a bit personal but I strongly believe in that.
Don: Which is.
Don: How we do stuff.
Don: Now we were all together here at the corporate office with Natasha Jamie.
Don: Under your leadership I'm more.
Don: John and.
Don: I think this is what makes the difference.
Don: This is what I felt when I started a 19 $8 98 at night Wronged and again 26 years after on.
Don: Under your leadership on what this is what we are doing and when you go at site you still feel that same thing where we are in Toronto office. We worked together and this is why the result, we are today.
Dom: Same thing where we're in the Toronto office. We work together, and this is why we are where we are today. Here, they're talking by themselves.
Don: Dr Dere talking by themselves.
Dom: So on that, I will move to the Quebec region. So we produce over 1 million ounces at a cash cost of $8.50, generating an operating margin of over $1 billion. So, I'm very proud and thank you to the team for controlling the costs and continuing to optimize the business and leveraging all the synergies. So, Quebec is a well-established platform, and you'll see in the coming slides. This is just the beginning; we're going to keep growing that one. When you think about that, within 100 kilometers, we have three mines and a very enormous geological potential. Maybe, before going to the ODYSSEY project, I would just like to highlight that Canada-Malartic is going to be the biggest mine in Canada in 2024. Natasha, you're going to win the biggest open pit, but Canada-Malartic is going to be back as the first biggest mine. And in the coming slides, you're going to see we're going to move to have the biggest underground mine, and maybe, with phase two, potentially the biggest mine again. But let's talk about that.
Don: So that will move us to the Quebec.
Don: So we produce over 1 million ounces at a cash cost of 850 generating an operating margin of over $1 billion.
Speaker Change: So I'm very proud and thank you for the team to control the costs and to continue to optimize the business and to leverage on all of the synergy.
Speaker Change: Quebec is a well established platform and you're going to see in the coming slide. This is just the beginning we're going to keep we're going to keep growing that one when you think about that within 100 kilometer we have three mines and a very enormous geological potential.
Speaker Change: Maybe before going to the Odyssey project I would just like to highlight that Kennedy MLR D is going to be the biggest mine in Canada in 2024.
Speaker Change: Net debt fell youre going to win the biggest open pit.
Speaker Change: But Canada.
<unk> I think he is going to be back there differs biggest mine and in the coming slide you're going to see where we're going to move to have the biggest underground mine and maybe with phase II.
Speaker Change: Actually the biggest mine again, but.
Dom: Next slide. So the EODC project is phase one of the underground. We've loaned out the study, which is a 25, 20, 20 years' life of the mine at 550 ounces per year.
Talk about what that next slide.
Speaker Change: So the idea of D C project.
Speaker Change: The phase one of the underground we have led we lend out the study which is at 25 2020 years life of mine at 550 <unk> per year. This is the PPA that we release.
Dom: This is the PEA that we released. And more recently, we updated the PFS, where we are about to turn 5.2 million ounces into reserve. The highlight of the project, the Odyssey South ramp-up, is going well. I would say it's done.
Speaker Change: And more recently, we update the PFS, where we our goal to turn $5 2 million ounces into reserves.
Speaker Change: The highlight of the project Odyssey, South ramp up is going well I would say it's done.
Speaker Change: We are right now producing 300 feet 503500 tonnes per day, which is going to bring approximately 80 ounces per year in the coming.
Dom: We're right now producing 3,500 tons per day, which is going to bring approximately 80 ounces per year in the coming years. You can see on the map the ramp, so we're going to reach the top of the Yizgulde deposit, which is the red zone. We're going to be there in a couple of weeks.
Speaker Change: Two years.
Speaker Change: You could see on the map the ramp so we're going to reach the top of the <unk> deposit, which is the Red zone, we're going to be there in a couple of weeks and the team is now looking for opportunity alcohol, we start to mine that zone.
Dom: And the team is now looking for opportunities, how could we start to mine that zone at the top and bring answers potentially in 2026. So we don't have the clear details yet, but the team is working on that. Ammar mentioned that we are in advance on the ramp, and one of the reasons for that, again, is back to the synergy and how we were able to transfer the knowledge and be fast with the automation. So right now, during the shift, during the crew change, we are able to operate the mine remotely from the surface, and this is giving us between 10 and 20 percent improvement. That was not in the plan, and this is why we're better than the plan.
So at the top end to bring answers potentially in 2006. So we don't have a clear detail yet, but the team are working on that.
Speaker Change: I'm Martin mentioned about that we are in advance on the ramp in one of the reason of that again, it's back to the synergy and how we were able to transfer that knowledge and to be fast on the.
Speaker Change: On the Autonation, so right now during the shift Duane.
Speaker Change: Crew change we are able to operate remotely the mine from the surfaces and this is giving us between 10 and 20% improvement that was not into the plan and this is why we're better than the plan. Other good news the internal zone, which is in between the or this is out at the top end the Odyssey north at the Port.
Dom: Other good news, the internal zone, which is in between the Odyssey South at the top and the Odyssey North at the bottom, you know, in the purplish color, we still see some upside coming from those zones and more times at the same rate. So that's the good news. It is very, I understand it is very complicated to bring them into the model.
Speaker Change: You know in the.
Speaker Change: Purple ish color, we still see some upside coming from those zones and more times at the same great. So that's a good news. It is very I understand it is very complicated to bring them into the model.
Speaker Change: We're trying but again, it's a good news for operation when we're there there is more to intermodal.
Dom: We are trying, but again, it's good news for the operation. When we're there, there's more than the model. On the shaft sinking, we saw a very great improvement in December and January, so congratulations to the team. We're heading in the right direction, and the surface construction is 65 percent completed. Before I'm going to the next slide, which is I'm going to talk more about phase two of ODYSSEY, I'd just like to highlight that one. On this one, we see that we're looking west, and you see two zones. The East Goldie zone, which is in the sediment deposit, and there is the ODYSSEY South North, which is to the east, at the border between the sedimentary rock and the volcanic rock.
Speaker Change: On the shaft sinking we saw very great improvement December January so congratulations to the team we're heading in the right direction and the surface construction 60, 65% completed.
Speaker Change: Before I'm going to the next slide which is I'm going to talk more about phase II <unk> I'd just like to highlight on that one on this one we see we're looking west and you see two zone, the east <unk> zone, which is in the <unk> deposit and there is that this is al Norte, which is at the.
Speaker Change: At the border between the sediment Iraq and the volcanic rock, but theres. Another one more on the north which is at the contact of the volcanic and other type of rock.
Dom: But there is another one more on the north, which is at the contact of the volcanic and other types of rock. So I stole a slide from Guy's presentation because I'm excited about it. So I will talk about it, and if you have questions, Guy can help me. Next slide, you can see now that we're looking north. On that slide, in the middle, right in the middle, you see East Gouldie.
Speaker Change: So I thought I saw a slide from <unk> presentation, because I'm excited about so I would talk about it and if you have question equally to help me, but <unk>.
Speaker Change: Next slide you could see now we're looking we're looking north.
Speaker Change: On that slide in the middle right in the Middle you see the equally the arrange part is what we transfer to reserve the $5 2 million ounces. So this zone continue to increase as we are in filling it and doing more drilling. So this is one part that could be phase II. If we continue to grow that reserve and <unk>.
Dom: The orange part is what we transferred to reserve, the 5.2 million ounces. So this zone continues to increase as we are infilling it and doing more drilling. So this is one part that could be phase two.
Dom: If we continue to grow that reserve and potentially have a second shaft close to that one and bring more tons to the mill, that's an option. There's no clear view or clear plan at this stage because we need to continue to drill, but... The team is already planning where that shaft is going to be and planning all the infrastructure that we need to build to make sure that we're going to have a good room, a good spot for that. More to come, but we still need to continue to drill. But also exciting, if we step out a bit, you can see the 16.5-kilometer strike length that we have. Now we're, again, we're looking north, and there are three zones. Mineral horizon in that, there's the Odyssey, sorry, the Izgudi in our range. In the middle, at approximately 600, 700 meters, there's the Odyssey South, and you can see on the right also the purple one.
Actually have a second shaft close to that one and bring more tonnes through the mill.
Speaker Change: That's an option.
Speaker Change: There is no clear view, our tier plan at this stage because we continue need to continue to drill but the team is already planning where that traffic is going to be and planning all the infrastructure that we need to be able to make sure that we're going to have a good room, a good spot for that Jeff Mark to come but we still need to continue to do.
Speaker Change: Neil.
Speaker Change: But also exciting if we step out a bit.
You could see the $16 five kilometer strike land that we have now we're again, we're looking Norte and Theres three zones. Meanwhile, our reason in that Theres the Odyssey.
Speaker Change: Sorry, the Eagle <unk> in a range in the middle at approximately six 700 meter David the OTC is out and you could see on the right also the purple one at that.
Dom: That zone continues, I don't know, five kilometers to the west, and there's another zone, which was the Monarchic Goldfield Mine in the past, which is also there. So there's currently no drilling occurring there, but we're going to come back, I would say, in the next two years. We're looking to have an aggressive plan to drill that, and this could be a game changer to bring, if we find something, answers to Canadian Monarchy. So back in the days, the Goldfield Mine mined 9 million tons at 6 grams per ton, 1.7 million ounces. That was in 1939 and 1965.
Speaker Change: Zone continue.
I don't know five kilometers on the west and Theres, Another zone, which was the monarch take goldfield mined in the past, which is also there. So there is currently no drilling occurring there, but we're going to come back in I would say in the next two years, we're looking to have an accuracy of plan to drill that.
Speaker Change: And this could be it could be a game changer to bring if we find something to being answers to Canadian Arctic. So back back in the days that Goldfield mine has mined 9 million tons at six Gram per tonne. One 7 million ounces that was in 1939 1965. So we know we're going to come back they're going to drill around that and see.
Dom: So now we're going to come back there, we're going to drill around that and see if we can bring something into the picture. Next slide. So, for the Nunavut business, again, great work by the team. And I would also like to highlight Martin Plante's work. He's here with us in the room.
Speaker Change: If we could bring something into the into the plan.
Speaker Change: Yes.
Speaker Change: Next slide.
Speaker Change: So it didn't have a business again, great work to the team and what we'd like to just like also to highlight the Mustang plant work is an easier with us in the room you did very good work to optimize at midyear Dean in net mutual bank to improve the productivity and cost and this.
Dom: He did very good work to optimize at Miliadene and at Middlebank to improve productivity and cost. And this allowed us all to look to expand Middlebank. It's part of that to be more efficient.
Speaker Change: Allowed us to look to expand Meadowbank had part of that to be more efficient. So we added 500000 ounces into the plan for ounces coming in 'twenty six 'twenty 728, those ounces are coming from a better reconciliation, which involve more tonnes a pushback at the IV.
Dom: So, we added 500,000 answers into the plan for answers coming in 2026, 2027, 2028. Those answers are coming from better reconciliation, which will involve more time, a pushback at the IVR pit, and also more mining from underground. He's going to talk more about that one.
And also more mining from underground he is going to talk more.
About that one.
Speaker Change: And.
Dom: Maybe the other aspect is the milliardean, we're currently doing the phase two construction. You see the milliardean picture in the middle. This is going on budget and on time. This is good news. And the vision here in Nunavut is to maintain a platform of 800,000 ounces. This is what we will produce if you look to the full year 2023. In 2024, we're going to bring that around 860,000 ounces with more ounces coming from Middle Bank. As we mentioned in the past, the deeper we go into the open pit, the grade is higher, and supplemented with the underground mine or higher grade ore, this is where the ounces are going to come from, but Middle Bank, we see it ending now in 2028. That's very good news.
Speaker Change: Maybe the other aspect is the.
Speaker Change: Dean we're doing currently that the phase two construction and you see the <unk> picture in the Middle This is going on budget on time. This is a good news and the vision here in Nunavut is to maintain a platform of 800000 ounces. This is what we produced.
Speaker Change: If you look to the full year 2023 and 'twenty 'twenty four we're going to bring that around 860 <unk> with more answer is coming from Meadowbank as we mentioned in the past more deep we go into the open pit the grade is higher and the <unk>.
Speaker Change: <unk> with the underground mine or higher grade or this is where the answers are going to come.
Speaker Change: But.
Speaker Change: Meadowbank, we see it ending now in 2028, that's a very good news and we continued to work to expand that this is the first goal and what could the in my mind be very very interesting. He is going to talk about something we see.
Dom: We continue to work to expand that. This is the first goal and what could, in my mind, be very, very interesting. Guy is going to talk about something we see also at Amarok. But the other project that is coming into play is the whole big one. And again, I will let Guy More talk about what we see.
Speaker Change: Also at <unk>.
Speaker Change: But the other project that is coming into play is the <unk>.
Speaker Change: Is the <unk>, one and again I will let give more talk about what we see.
Dom: This Nunavut is a high-risk region, but it's also a high-reward region. And on the risk side, I need to say I'm very comfortable, because we've been mining there for 17 years. We built Milliadene, a 1.2 million project. We did it on budget six months in advance.
Speaker Change: <unk>.
Speaker Change: This Nunavut is at high risk region, but it's also high reward region and on the risk side I need to say I'm very comfortable because we're mining derrickson 17 years, we built <unk> $1 2 million project, we did on cost six months in advance.
Dom: And now we're doing phase two of mylidine at a time when it's not easy, and we're still on time and on budget. So I'm confident that the team is going to work on a study at Amarok, which is going to be a solid one, and it's going to fly. On that, I will now pass it to Natasha, who will discuss the remaining business. Thanks, Tom, and good morning, everyone.
And now we're doing phase two of media Dean at the time, which is not easy and we're still on time and on <unk>. So.
Speaker Change: So I am confident that the team is going to work on our study <unk>, which is going to be a solid one and it is going to fly so on.
Speaker Change: On that I will now pass it to net Asher who will discuss the remaining of the business.
Asher: Tom and good morning, everyone.
Natasha: I'll start with the operations in Ontario. We had a strong year and solid performance at both of our operations. As you can see on the slide, we generated over a billion dollars in operating margins in 2023 with industry-leading costs. Now at both of our operations, MACASA and Detour, we're focused, constantly focused on optimizing our assets through a number of continuous improvement initiatives. It's just part of their DNA.
Asher: Start with the operations in Ontario, we had a strong year and solid performance at both of our affiliations as you can see on the slide we generated over $1 billion and operating margins in 2020 with industry leading cost.
Asher: Now at both of our operations Makassar in Detroit.
Asher: We're focused we're constantly focused on optimizing our assets to a number of continuous improvement initiatives. It's just part of their DNA.
Natasha: And I'll give you a few examples of that. And I'll start with MACASA. So one of the big initiatives here at MACASA are the productivity gains that we were able to sustain in 2023. We first started that with the commissioning of number four shaft. And then later in the year, we upgraded the ventilation system.
I'll give you a few examples of that and I'll start with Mckesson. So one of the big initiatives, yet macassar productivity gains that we were able to sustain in 2023.
First of all of that with the commissioning of number four shaft and then later in the year, we upgraded the ventilation system and these gains together have resulted in a reduction in production coming up just.
Natasha: And these gains together have resulted in production coming up just above the top end of guidance. So congratulations to the team on that. Now, in terms of creating further value at MACASA, we have now integrated the AK and the near-surface deposits into the production profile. And as Amar mentioned, at the time of the merger, we identified AK as a near-term opportunity to create value. And so, again, here we're very, very proud of the team for the work that they've done to realize this potential. Now, just staying in the Kirkland Lake area for a minute, I just wanted to touch on Upper Beaver.
Asher: Above the top end of guidance so congratulations to the team on that.
Asher: Now in terms of creating further value at Mcarthur, we have.
Asher: <unk> now integrated the 8-K, and then youre surface deposits into that production profile and as Mike mentioned at the time of the merger we identified 8-K.
As a near term opportunity.
Asher: Surface value and so again, we're very very proud of the team.
Asher: The work that they've done to realize this potential.
Asher: Now just staying in the Kirkland Lake area for a minute I just wanted to touch on upper Beaver, There's an internal assessment, that's underway and it's considering either an exploration shaft on exploration ramp.
Natasha: There's an internal assessment that's underway, and it's considering either an exploration shaft or an exploration ramp to further convert and also explore the deeper portions of the deposit. Now moving to a detour, as I've mentioned before, this site has a track record of delivering on improvement initiatives. Our current focus, as you know, is continuing to advance the mill optimization efforts. We now expect to reach the mill throughput rate of 28 million tons a year later in the second half of this year, 2024, which, again, I'm very, very proud of the team to be able to say this, is one year, one year earlier than anticipated. In addition to that, we also believe that we have a better understanding of the potential to reach a mill throughput of now 29 million tons per year, and we believe that we can do this on a timeline that could be as early as the end of 2026.
Asher: Further convert and also explore the deeper portions of the deposit.
Asher: Now moving to Detroit as I've mentioned before this site.
The site has a track record of delivering on improvement initiatives.
Asher: Our current focus as you know is that is the continuing is continuing to advance them mill optimization efforts. We now expect two weeks from now to put rate of 28 million tons. A year later in the second half of this year 2024, which again I'm very very proud of the team to be able to say this is one year one year earlier.
Anticipated.
Asher: In addition to that we're also we also believe that we have a better understanding of the potential to reach a mill throughput up now 29 million tons, a year and we believe that we can do this in a timeline that could be as early as the end of 2026.
Natasha: And now, and we'll continue to work on this, but we're also looking to do better. And Ammar mentioned this, but we're in the early stages of it, but we're evaluating the potential to go beyond 29 million tons a year. That could be at 30, that could be at 32 million tons. Now, just touching on the Detour Underground Study, it's progressing, and we'll provide an update later in the year. Now moving to the next slide, slide 19. I followed Dom's cue, and I swiped a slide from Guy. Sorry, Guy, but it's a good slide.
Asher: And now and we will continue to work on this but we're also looking to do better and I'm I mentioned at the end.
Asher: In the early stages of it but we are evaluating the potential to go beyond 29 million tonnes.
Asher: That could be at 30 that could be a 32 million tons a year.
Asher: Now just touching on the detour underground study is advancing and we will provide an update later on in the year.
Asher: Now moving to the next slide Slide 19, I, followed dumped Kew and I slipped a slide from <unk>.
Asher: But it's a good slide.
Asher: A little bit more color on the ongoing exploration efforts at detour.
Natasha: It provides a little bit more color on the ongoing exploration efforts at Detour. So at the end of this year, we declared an initial underground inferred resource of close to 22 million tons at an average grade of 2.23, so it totals about 1.56 million ounces. And in the image below, you can see where that resource sits. It's a darker, bluish-gray, maybe greenish, resource that is just below and to the west of the blue resource pit shell.
Asher: So at the end of this year, we declared an initial underground inferred resource of close to 22 million tons at an average grade of two to three so it totals about 1.56 million ounces.
Asher: And on the image below you can see where that easily.
Asher: Doug.
Asher: Wish Gray maybe greenish.
Asher: Which is just below and to the west of the Blue resource pit shell.
Asher: This is the area that we're currently evaluating in the underground study, it's the darker blue area, but also the resources as a whole.
Natasha: This is the area that we're currently evaluating in the underground study. It's the darker blue area, but also the resource as a whole. In the lower image, you can also barely see a purple line, a faint purple line, and that is the potential location of an exploration ramp to get closer to the resource and be in a pretty good position to better define it.
Asher: On the lower and then you can also see barely see purple line, a faint purple line and that is the potential location of an exploration ramp to get closer to the resort and Deanna and a pretty good position to better define it.
Asher: And then over and above that we are still making progress outside that resource area, we're continuing to drill the western part and we see a cluster of good drill holes.
Asher: 900 meters or so west of business with.
Natasha: And then, over and above that, we are still making progress outside that resource area. We're continuing to drill the western part, and we see a cluster of good drill holes about 900 meters or so west of the resource pit. Now, moving on to slide 20, I'll touch on the other assets very quickly, starting with Finland. Here at Kittila, the operating permit was restored to 2 million tons a year at the end of October 2023.
Asher: Now moving onto there on to slide 20, I'll touch on the other assets.
Asher: Quickly starting with Finland.
Asher: Here at Capella, the operating permit was restored to 2 million tonnes a year at.
Asher: At the end of October 2023, and now having completed the mill expansion the shaft project E environmental upgrades and mine is realizing its potential and generating strong cash flows.
Asher: We're also seeing some positive reconciliation sorry positive exploration results extending the deposit not just at depth, but also near surface.
Natasha: And now, having completed the mill expansion, the shaft project, and the environmental upgrades, the mine is realizing its potential and generating strong cash flows. We're also seeing some positive exploration results expanding the deposit, not just at depth but also near surface. Now moving to Australia, Fosterville, it continues to generate strong cash flows despite decreasing grades.
Asher: Now moving to Australia, Fosterville continues to generate strong cash flow despite decreasing grades.
Asher: Team is working on securing a long term production level of somewhere in the range of 175 to 200000 ounces per year.
Asher: And we would expect to have preliminary results of that later on this year.
Natasha: The team is working on securing a long-term production level of somewhere in the range of 175 to 200,000 ounces per year, and we expect to have preliminary results of that later this year. Not too long ago, Fosterville was a site that generated, before exploration expenditures, close to a billion Australian dollars in cash flow a year for three consecutive years. So yes, we believe in the site, we believe in our team there, and we believe in the exploration potential to find the next high-grade deposit, and Guy will discuss that later in the presentation. Lastly, Mexico. La India successfully and sadly completed mining activities in Q4 2023 and is now producing from the residual leaching activities this year. Pinos Altos.
Asher: No not too long ago Festival was a site that generated before exploration expenditures that generated close to 1 billion auster.
Australian.
Asher: In cash flow a year for three consecutive years. So yes, we believe in the site, we believe and our team there we believe in the exploration potential to find the next high grade deposit and he will discuss that later on in the presentation.
Asher: Lastly, Mexico law.
Asher: India successfully and sadly completed mining activities in Q4 2023.
Asher: And is now producing from the residual leaching activities this year.
Without those.
Asher: It's a mature site with stable production and a great team and our efforts are transitioning more and more now to the San Nicolas project.
Speaker Change: And then just before I pass the call over to <unk> I, just want to Echo what <unk> said and what Dom said I just want to commend the sites all the operating sites for an incredible year.
Natasha: It's a mature site with stable production and a great team, and our efforts are transitioning more and more now to the San Nicolas project. And then, just before I pass the call over to Guy, I just want to echo what Ammar said and what Dom said. We just want to congratulate all the sites, all the operating sites, for an incredible year. There were many challenges that we encountered, but we overcame them as a team. We overcame them safely.
Speaker Change: There are many challenges.
Speaker Change: We encountered but we overcame them as a team we all of it.
Speaker Change: Came them safely. So thank you for your hard work. Thank you for your commitment.
Speaker Change: To continually strive for improvements in all aspects of our business.
Speaker Change: So with that I'll pass it over to you.
Speaker Change: Thank you and have their shop, good morning, everybody, starting with the year end reserve and resources.
Guy: So thank you for your hard work. Thank you for your commitment to continually striving for improvements in all aspects of our business. So with that, I'll pass it over to Guy. Thank you, Natasha. Good morning, everybody.
Speaker Change: Meant that page 21, it has been.
Very good year incentives of our mineral reserves replacement you can see the building block.
Speaker Change: Highlighting the different categories on the upper left hand corner of that slide, but a more and more importantly, like mentioned by EMR, Andy introduction comment increasing the number of the mineral reserves per share again, so we've been successful at doing it adding this year.
Guy: Starting with the year-end reserve and resources statement on page 21, it's been a very good year in terms of mineral reserve replacement. You can see the building block highlighted, the different categories, in the upper left-hand corner of that slide.
Speaker Change: 10% or so 5 million ounces addition to the reserve.
Speaker Change: Seeing resources being stable in the measure and indicated category and growing and for by 26% year over year.
Guy: But more importantly, as mentioned by Amar in the introduction comment, increasing the number of mineral reserves per share again. So we've been successful at doing it, adding 10% this year, so 5 million ounces, to the reserve, seeing resources being stable in the measure and indicated category and growing by 26% year-over-year. We've been adjusting our gold price assumption to $1,400, but that was mostly to reflect the long-term structure cost of our business. And none of that resulted in a lower ring of a cut-off grade.
Speaker Change: We've been adjusting our gold price assumption to 1400.
Speaker Change: But that was mostly to reflect on the long term structured costs of our business and none of that resulted in a lower ring of your cutoff grade as a matter of fact, the great Our reserve our 2% up year over year. So we're not only adding reserve. We're also improving our quality would agree that it is higher.
And you can also see in the lower left corner the waterfall that explain the various blocked from mining depletion addition of east Goldie with 517 million ounces. The acquisition of the other app of Canadian Arctic and our 50% interest in San Nicolas plus the contribution of each of the <unk>.
Guy: As a matter of fact, the grade hour reserve is 2% up year over year. So we're not only adding reserve, but we're also improving the quality with a grade that is higher. And you can also see in the lower left corner the waterfall that explains the various blocks from mining depletion, the addition of East Gouldie with 5.17 million ounces, the acquisition of the other half of Canadian Antarctic and our 50% interest in San Nicolas, plus the contribution of each of the other mines that is well-illustrated in that waterfall. Moving to specific projects, as mentioned by Natasha, it's been a great year in Makassar, and a great year from a production standpoint, and a very good year in terms of reserve replacement and addition.
Speaker Change: That is well illustrated in that waterfall graph.
Speaker Change: Moving to specific project like mentioned by Natasha I, it's been a great year in <unk>.
Speaker Change: And a great here from a production standpoint, and a very great year in terms of reserve replacement. In addition, so not only we managed to replace the 235 I apologize ounces that were mined into two one on the top of that we've added an additional 224, so theres been a net a significant net growth of the total.
Speaker Change: Our reserve at Mckesson, and very pleased to see the evolution at the <unk> zone closer to serve face not only the reserve mineral reserve have grown to a 160000 ounces in that shallow portion of the deposit but the grade is significantly up compared to last year now we are being 160000.
Guy: So not only have we managed to replace the 235,000 ounces that were mined in Chichu, but on top of that, we've added an additional 224. So there's been a significant net growth of the total mineral reserve at Makassar, and I'm very pleased to see the evolution at the AK zone closer to surface. Not only has the mineral reserve grown to 160,000 ounces in that shallow portion of the deposit, but the grade is significantly higher compared to last year. Now we are having 160,000 ounces at 6.7 grams, whereas last year our first estimate was 5.2. So, good quality, relatively high-grade ore, very close to surface that will provide a lot of optionality as described both by Ammar and Natasha. Moving on to slide 23, Amarok, just to pile on what Dominique mentioned.
Speaker Change: Answer is at $6, seven Gram and whereas last year, our first system. It was five two.
Speaker Change: So good quality relatively high grade ore very closer phase that will provide a lot of optionality as was described both by <unk> and Natasha.
Speaker Change: Moving on slide 23, a M. Eric just to pile on that Dominic mentioned, it's been a great year from an operation standpoint that they know that the metric we've seen from a cost and production were outstanding and we continue to see that bench.
Speaker Change: If it all of a very positive reconciliation so as we're entering into the central portion of the deposit we continue to see this year at 22% more ounces than predicted by our block model, we've managed to integrate some of that into our assumption adjusting the model adjusting some of the.
Guy: It's been a great year from an operations standpoint, you know, the metrics we've seen from cost and production have been outstanding, and we continue to see the benefit of a very positive reconciliation. So as we're entering into the central portion of the deposit, we continue to see this year 22% more answers than predicted by our block model. We've managed to integrate some of that into our assumptions, adjusting the model, adjusting some of the capping parameter, which is a component of the extension of the life of the mine.
Speaker Change: <unk> per meter.
<unk> is a component of the extension of the life of mine.
Speaker Change: And as we are also adding time and extending the life of mine that we continue to investigate at.
Speaker Change: At depth, where the deposit remains open and we continue to be quite pleased with some good results.
Speaker Change: Now, we're reaching close to kilometer bundles are faced with some with some great. Good high grade to hit with good thickness, so opening up somewhat.
Guy: And as we are also adding time and extending the life of the mine, we continue to investigate at depth where the deposit remains open, and we continue to be quite pleased with some good results now reaching close to a kilometer below surface with some great, good, high-grade hits with good thickness. So opening up some opportunity to further extend the life of mine above and beyond what we are mentioning. Moving to slide 24, Atobe Bay, the focus shifts from investigating Doris last in 2022 to investigating in the Madrid area. And very an area that we liked when we were evaluating the project is that extension of Madrid towards the south in patch 7. And we continue to see excellent results. One of the best drill holes that we've ever seen on the project, 16.3 g over 28 m, not even 400 m below surface.
Speaker Change: Some opportunity to further extend the life of mine above and beyond what we are mentioning.
Speaker Change: Moving to slide 20 for Adobe the focus shift from investigating Doris lives in 2022 to investigating and in a matter of the area.
Speaker Change: And very an area that we like when we when we were evaluating the project is that that extension of Madrid towards this out in a batch oven and we continue to see excellent resolved one of the best drill hole that we've ever seen on the project 16, three gram over 28 meter at.
Speaker Change: Not even 400 and meet our bottles or face.
Speaker Change: That area is not yell drill tight enough to make it inferred resources and it but it's exactly what we are currently at.
Speaker Change: Addressing and filling that area and we've been aggressively ramping up drilling quickly after new year, when our highest sicknesses was good and also that we can safely reactive that portion under.
Guy: That area is not yell drill tight enough to make it infer resources, but it's exactly what we are currently addressing and filling that area. And we've been aggressively ramping up drilling quickly after New Year when the high thickness was good enough so that we could safely reaccess that portion from ice-based drilling. And we are aggressively drilling in that area, which we think will move the needle to bring the project to a successful decision in the future. And last but not least, moving to Fosterville on page 25.
Speaker Change: From ice based drilling and we are aggressively drilling in that area that we think will move the needle to bring the project to a successful.
Speaker Change: Decision and in the future.
Speaker Change: And last but not least moving to fosterville on page 25.
Speaker Change: We've seen that through the year.
Speaker Change: A continuation of good result, and a robbinsdale area and out to a certain extent as well in the in the lower Phoenix.
Guy: We've seen, throughout the year, a continuation of good results in the Robin's Hill area and now to a certain extent as well in the Lower Phoenix, in the Cardinal Slate. That led to a complete replacement of reserves. Obviously, the grade, as discussed, is going down because we are completing the depletion of the Swan Zone, but we were quite pleased to see a full replacement with the reserves that now stand at around 6.1 grams. And we are currently working to address the mine plan with the idea of optimizing the production profile of the operation with that 6 grams per ton material. And on that, I will return to Ammar for some closing remarks. Well, thank you, everyone, and we've covered a lot, but I'll just finish on the next slide, please, what we're all about. We are trying to build a high-quality business. We think there's a lot of opportunity. We don't care about absolute size.
Speaker Change: And were they in the card in our fleet that led to a complete replacement of reserves, obviously degrade as was discussed is going down.
Speaker Change: Because we are completing the depletion of this one zone.
Speaker Change: But we were quite pleased to see a full replacement with the reserves that now stand at around 6.1 Gram and we are currently working to address the mine plan with the idea of optimizing the production profile of the operation with that six gram per tonne material.
Speaker Change: And on that I will return back to <unk> for some closing remarks.
Speaker Change: Thank you everyone.
Speaker Change: We've covered a lot, but all but I'll just finish on the next slide please.
Speaker Change: <unk>.
Speaker Change: What we're all about we are trying to build a high quality business.
Speaker Change: We think theres a lot of opportunity.
Speaker Change: We don't care about absolute size, we care about value and value per share for our shareholders and doing it the right way in the communities we operate.
Ammar Al-Jandi: We care about value and value per share for our shareholders and doing it the right way in the communities we operate in. We want a low-risk business in the best jurisdictions. We define the best jurisdictions, at least for Agnico Eagle, as having the best geologic potential for multiple mines and having the political stability to operate multiple mines and to keep things simple. We want to focus on... Quality for us includes The best ESG that we can possibly do is not only the right thing to do, but it's an essential thing to do.
Speaker Change: We want a low low risk.
Speaker Change: The business in the best jurisdictions, we define the best jurisdictions at least for Agnico Eagle is having the best geologic potential for multiple mines and having the political stability to operate multiple mines and to keep things simple.
Speaker Change: We want to focus on.
Speaker Change: Quality for us includes.
Speaker Change: The best ESG that we can possibly do.
Speaker Change: Not only is that the right thing to do but it's an essential thing to do if you're if your strategy is I want to be in a region for multiple decades and build multiple mines you better be welcome in that region and you better treat the people and the communities and the environment.
Ammar Al-Jandi: If your strategy is, I want to be in a region for multiple decades and build multiple mines, you better be welcome in that region, and you better treat the people, the communities, and the environment the right way. We want to continue to have disciplined capital investment, and disciplined capital investment is largely about knowledge. And so when we make investments, we like to do them in areas that we know, with partners that we know, and with teams that we know.
Right way, we want to continue to have disciplined capital investment and disciplined capital investment is largely about knowledge and so when we make investments we like to do them in areas. We know with partners that we know.
Speaker Change: With teams that we know we think we are.
Ammar Al-Jandi: We think we are uniquely positioned in the industry. We're in good regions that have multiple decades, in some cases, centuries, of proven mineral potential. We produce more gold in Canada than the next eight companies combined, and that gives us the advantages you would expect from that. And importantly, we've always been a company that has focused on fiscal conservatism; we focus on per share metrics, we focus on optimizing cash flow, and we focus on trying to get the best return on capital, the best risk-adjusted return on capital by leveraging existing assets where we can.
Speaker Change: Uniquely positioned in the industry. We're in good regions that have multiple decades.
Speaker Change: In some cases.
Speaker Change: Century of proven mineral potential we produced more gold in Canada than the next eight companies combined that gives us. The advantages you would expect from that and we have unique mining experience.
Speaker Change: And none of it and then finally.
Speaker Change: And importantly, we've always been.
Speaker Change: To accompany.
Speaker Change: A company that is focused on fiscal conservatism, we focus on per share metrics, we focus on optimizing cash flow and we focus on trying to get the best return the best risk adjusted return on capital by leveraging existing assets, where we can and I think what you've heard this morning.
Ammar Al-Jandi: And I think what you heard this morning is there's an abundance of opportunity to do that. So with that, operator, thank you, and we'll turn it over to questions. Thank you. Ladies and gentlemen, should you have a question, please press the star followed by the 1 on your touch-tone phone. If you would like to withdraw your question, please press the star followed by the 2. If you are using a speakerphone, please lift your handset before pressing any keys.
Speaker Change: Is there is an abundance of opportunity to do that so with that.
Speaker Change: Operator, Thank you and I'll will turn it over to questions.
Speaker Change: Thank you.
Speaker Change: Ladies and gentlemen did you have a question. Please press the star followed by the one on your Touchtone phone. If you would like to withdraw your question. Please press the star followed by the two <unk>.
Speaker Change: Using a speaker phone please lift the handset before pressing any keys one moment. Please for your first question.
Operator: One moment, please for your first question. Your first question comes from Josh Wolfson from RBC Capital Markets. Please go ahead. Thank you very much.
Speaker Change: Yes, Great question comes from Josh Wolfson from RBC capital markets. Please go ahead.
Josh Wolfson: Thank you very much first question I had was on <unk> and the mine life extension it looks like the reserves didn't really change here asides from depletion and I'm wondering.
Josh Wolfson: The first question I had was about Amaruk and the Mine Life Extension. It looks like the reserves didn't really change here aside from depletion. I'm wondering, was this an adjustment of the existing mine plan? Or what's sort of behind the extension there?
Was this an adjustment at the existing mine plan.
Speaker Change: What's sort of behind the extension there and I think that definitely answers that were defined.
Guy: And I think the half a million answers that were defined as sort of being added to it. Yeah, if you do the map, you remove what we mined last year. And with the addition of the high grading, we've seen the positive reconciliation that contributes to a portion of those census additions. So we did not completely deplete what was mined. And that extension of 500,000 ounces was completed after the reserve exercise.
Speaker Change: Being added to it thanks.
Yes, if you do them I, Josh if you do the math you remove what we mined last year and with the addition of the.
The <unk>, we've seen the positive reconciliation that contributes to a portion of the census addition, so we did not completely deplete what we what was mined out.
Speaker Change: And did that extension of a 500000 ounces.
Speaker Change: Was completed after the reserve exercise so some of those ounces mutual Wap, while we're going to be doing the next a reserve update and some of them are also.
Guy: So some of those ounces may show up while we're going to be doing the next reserve update. And some of them are also, I would say, slightly lower grade material that still will generate a lot of cash flow, but maybe that won't all meet the trigger to become a reserve. Okay, got it. So it's not reflected in the reserve.
Speaker Change: I would say lower slightly lower grade.
Speaker Change: Material that still will generate a lot of cash flow, but maybe that won't not all meet the trigger to become reserves.
Speaker Change: Okay got it so it's not reflected in the reserve.
Guy: Maybe, perhaps along the same lines, the detour initial underground resource at one and a half million ounces. You know, I'm assuming there's a larger opportunity here. I guess I'm just wondering, is this resource going to be the basis for the June update? Or should we expect, you know, the potential for additional drilling or, you know, a resource update with that release? Well, there will be a few aspects to answer your question.
Speaker Change: Maybe.
Speaker Change: Perhaps along the same lines.
Speaker Change: The detour initial underground resource.
Speaker Change: At $1 5 billion answers.
Speaker Change: Im assuming there is a larger opportunity here I guess I'm. Just wondering is this resource can be the basis for the June update or should we expect the.
Speaker Change: The potential for additional drilling or in our resource update with that release.
Speaker Change: While there will be a few aspect to really answer your question that as you saw is resources that we declare is outside of the research with what we're going to be providing you with some more clarity is on that blue, let's see resources be it. So this year, we've basically Ivan touch for the yearend.
Guy: That, as you saw, is resources that we've declared outside of the resource pit. What we're gonna be providing you with some more clarity on that blue, let's say, resource pit. So this year, we basically haven't touched on the year-end reserve and resources statement. We haven't touched the reserve pit and the resource pit.
Serve and resources statement, we haven't touched the reserve pit under researches fit we just provide some clarity on what's outside of the pit what are we going to be aiming to provide some more clarity on the tradeoff between what center resources fit the light blue or what could be mined by underground more profitability into the <unk>.
Ammar Al-Jandi: We just provide some clarity on what's outside of the pit. What are we gonna be aiming to provide? It gives some more clarity on the trade-off between what's in the resources pit, the light blue, or what could be mined underground more profitably into the underground plan we're thinking about. Okay. And then final one, just on San Nicolas, following some of the comments we've seen out of Mexico on open pit mining, should we still think about that kind of 2027 timeframe as a target for production? Or is that likely, you know, going to be deferred a bit? Thank you. Hi Josh.
Speaker Change: The ground plan worth thinking about.
Speaker Change: Okay got it and then final one just on San Nicolas.
Speaker Change: Following some of the comments, we've seen out of Mexico on open pit mining.
Speaker Change: Should we still think about that kind of 2027 timeframe is as a target for production or is that likely.
Speaker Change: The deferred a bit.
EMR: Hi, Josh its EMR here.
Ammar Al-Jandi: It's Amar here. With regard to the proposed changes to the Constitution with regard to the open pit, it would be a constitutional change. It would require two-thirds of the vote.
Josh Wolfson: With regards to the to the.
Proposed changes to the constitution with regards to open pit it would be a constitutional change it would require two thirds of the vote.
Ammar Al-Jandi: There's an election coming up very soon, and so our view is the whole thing is in flux. And I'll just give you an example.
There's an election coming up very soon.
Speaker Change: And so it's.
Speaker Change: Our view is the whole thing is influx and I'll just give you an example in theory.
Ammar Al-Jandi: In theory, if there's no open pit mining, that also applies to aggregates. So you can't mine for gravel, you can't mine for sand. That means you can't build roads, you can't build buildings.
Speaker Change: If theres no open pit mining that also applies to aggregates. So you can't mine for gravel you can mine for sand that means you can't build roads cant build buildings.
Ammar Al-Jandi: So, you know, it's not unusual to sort of see these things just before an election. We have very good relationships with the governments, and we're optimistic that, you know, the mining industry is a big industry in Mexico. With regard to... Does it affect timing?
Speaker Change: So.
Speaker Change: It's not unusual to sort of see these things just before an election.
Speaker Change: We have very good relationships with the governments and.
We're optimistic that.
Speaker Change: The mining industry is a big industry in Mexico.
Speaker Change: With regards to.
Speaker Change: Does it affect timing I.
Ammar Al-Jandi: I don't think so at this point. We are, to be sure, though, still working on the plan, and I think we would give more guidance with specific reference to timing as that becomes available. Great. Thank you very much for taking my question. Your next question comes from Ralph Profiti from Haight Capital. Please go ahead. Good morning.
Speaker Change: I don't think so at this point, we are to be sure, though we are still.
Speaker Change: Working on the plan and I think we would give more guidance with specific reference to timing.
Speaker Change: That becomes available.
Speaker Change: Okay. Thank you very much for taking my question.
Speaker Change: Yeah.
Speaker Change: Your next question comes from Ralph <unk>.
Ralph: Hey capital. Please go ahead.
Ralph: Good morning, Thanks for taking my questions.
Ralph M. Profiti: Thanks for taking my questions. You know, Mark, can I get some context around the positive tonnage reconciliation from the internal zones at Mallardic? You know, how much of a contribution was it in 2023? Is there anything in the model in the 2024 guidance?
Ralph: Mark can I get some context around the positive tonnage reconciliation from the internal zones at <unk>.
Ralph: How much of a contribution was it in 2023 is there anything in the model and the 2020 for guidance.
Dom: And, you know, should we be thinking about this 52,000 ton per day assumption as a relatively low bar for, Well, if I start by commenting on your question about the reconciliation, what we've seen so far this year when mining the Odyssey South, we're mining the internal zone that is adjacent. So when looking at the stoves that were mined this year, we managed to add something like 40% more tons by adding that material adjacent, and that turned out to be at the same grade globally. So it's been kind of adding 40% more tons, 40% more ounces, but now we are integrating some of that into our reserve and resources estimate. As a matter of fact, this year, we've been integrating; we've seen a growth in Odyssey South by 57% due to those additions and growth in resources.
Ralph: Should we be thinking about this 52000 ton per day assumption as a relatively low bar for throughput.
Mark: Well, if I start by commenting on your question about the reconciliation what we've seen so far this year.
Mark: When mining the Odyssey South we're mining the internal is one that is adjacent so when looking at the stopes that were mined. This year, we managed to add on and is something like 40% more ton by adding that magic material adjacent and that turned out to be the at the same grade globally. So it's been kind of a.
Mark: Adding 40% more tons to 40% more ounces, but now we are integrating some of that into our reserves and resources estimate as a matter of fact this year we've been integrating.
Mark: We've seen a growth in Odyssey, south by 57% due to those edition and our growth to the resources. So we are baking that positive reconciliation addition of ton in our model as we as we are moving forward, but we can expect that some additional dawn will also show up.
Dom: So we are baking that positive reconciliation addition of tons in our model as we are moving forward, but we can expect that some additional tons will also show up. Gotcha. Natasha, I see that there was a power outage in Q4 and I'm just wondering if this relates back to the transformer because it still sounds very confident that the power situation is in very good shape ahead of this 28 million tons scenario brought forward, and you know, I'm just thinking about what are some of the outstanding issues as we think about that optimization waterfall chart that showed you that ultimate 30 million ton runway. So, the power outage that you speak of at Detour was just a minor one, and we recovered from that fairly quickly.
Speaker Change: Gotcha very helpful.
Speaker Change: Natasha I see that there was a.
Speaker Change: A power outage in Q4 and I was just wondering if this relates back to the transformer because it still sounds very confident that the power situation is in very good shape.
Speaker Change: Ahead of this 28 million tons scenario brought forward in <unk>.
Thinking about what are some of the outstanding issues as we think about that optimization waterfall chart that shows that ultimate 30 million ton run rate.
Speaker Change: And also the power outage that you speak of at Detour. It was just a minor one but.
Speaker Change: And we recovered from that fairly quickly with respect to the.
Natasha: With respect to getting to 28 million tons a year, we have a number of initiatives, but we can group that into, like, maybe five main ones, and that's just... factors in runtime improvement. So we have all the major infrastructure in place; we're just tweaking the system right now. For example, the refeed system, we're just making it, allowing it to operate better in the winter months, and just modifying some of the screen configurations so that it can take on more capacity, those kind of things. Sounds good.
Speaker Change: Getting to 28 million tons, a year, we have a number of initiatives.
Speaker Change: Group that into like maybe five main ones and then that just Dr.
Speaker Change: Faster than one time improvement so we have all the.
Speaker Change: Jay infrastructure in place, we're just tweaking the system right now for example, the <unk> system logistic, making it allowing it to operate better in the winter months and just modifying some of the screen configuration. So that it can take on more capacity those kinds of things.
Speaker Change: Sounds good very helpful. Thanks, everyone.
Speaker Change: Your next question comes from Anita Soni from CIBC World markets. Please go ahead.
Ralph M. Profiti: Very helpful. Your next question comes from Anita Soni from CIBC World Markets; please go ahead. Hi, good morning, Ammar and team. Thanks for taking my questions. I just have a couple of modeling questions right now.
Anita Soni: Hi, Good morning, Omar and team. Thanks for taking my questions I just have a couple of modeling questions right now.
Anita Soni: How much of the.
Anita Soni: The 8-K.
Anita Soni: How much of the Akisaba deposit is the tonnage at Gold X? And how will that play out for the next? My assumption is about 10%. And does that just sort of stay at that 10% level until it's run out? Or if you could give us some color on that, that would be great. Hi Anita, Dominique speaking.
Anita Soni: Yes.
Anita Soni: The ACA type of deposit.
Anita Soni: Hey.
Anita Soni: The tonnage at callbacks and how like how will that play out for.
Anita Soni: For the next.
Anita Soni: And my assumption is that about 10% and does that just sort of stay at that 10% level until it ran out or if.
Anita Soni: If you could give us some color on that would be great.
Anita Soni: Yes.
Speaker Change: <unk> speaking.
Dom: The plan is to have 1,000 tonnes per day coming from Akazaba and 7,000 tonnes per day coming from Goldex. And until Akisaba runs out, right? Yeah. Yeah. I don't know if we'll call it four or five years. Okay, and so for that reason, the cost, I mean, the cost increase that you, in terms of unit cost, that should, I mean, what portion of that is related to the Akisaba, or, and how long should we be using those kinds of unit costs? That's a good question, and it's not just only at Cazaba; there are different elements in play.
Speaker Change: One is to have 1000 ton per day coming from <unk> and 7000 ton per day coming from Goldman Sachs.
Speaker Change: Okay.
Speaker Change: And until until Actava's ran out right yeah.
Speaker Change: Yes.
Speaker Change: Call It four five years.
Okay and so for that reason then the cost I mean, the cost increase that you see in terms of unit cost that should I mean, how what portion of that is related to the ACA saba or and how long should be using those kinds of unit costs.
Speaker Change: That's a good question it is not.
Just on the <unk>, there's different element into play as we are going from deep one too deep to at <unk>. It is changing the cost structure as well as we're mining more of the South zone, which is higher higher cost tons, but higher grade times overall data that costs are increasing mainly related to death.
Dom: As we are going from Deep-1 to Deep-2 at Goldex, it is changing the cost structure, as well as the fact that we're mining more of the south zone, which is higher cost tons but higher grade tons. Overall, the costs are increasing. It's mainly related to that. Okay, and then similarly, a similar question for MACASA and the proportion of ore that you would see from the AK deposit. So hi Anita, so with the AK deposit, we're going to be doing a bulk sample this year and sending that to the LZ pit, but we're going to be ramping up the LZ mill, sorry, and then we're going to be ramping up to about 500 tons per day on average for the AK deposit and then MACASA, in terms of the underground potential, I would say probably 1550 tons per day at the I'm still modeling, so I might get some of you guys offline later on.
Speaker Change: Okay, and then similarly, a similar question from Catherine.
Speaker Change: And the proportion of or that you would see from the HOA deposit.
Speaker Change: Hi, Anita so with the AK deposit, we're going to be doing a bulk sample this year, sending that to the elevated but we are going to be ramping <unk> sorry.
Anita Soni: And then we're going to be ramping up to about 500 tonnes per day on average.
Anita Soni: Deposit and then macassar.
Anita Soni: In terms of the underground potential I would say.
Anita Soni: Probably 15 50 tons per day mill capacity.
Anita Soni: And that is <unk>.
Speaker Change: Okay. That's it for my questions for you on some modeling.
Speaker Change: Do you guys offline later on.
Speaker Change: And your next question comes from Greg Barnes from TD Securities. Please go ahead.
Greg Barnes: Thank you operator, Mark can you talk a little bit about how you see the production profile evolving beyond 2026.
Anita Soni: And your next question comes from Gregg Barnes from CD Securities. Please go ahead. Mark, can you talk a little bit about how you see the production profile evolving beyond 2020? You're sustaining three and a half million ounces roughly through that time frame. Then what does it look like beyond that?
Greg Barnes: Sustaining announces roughly through that timeframe than what does it look like beyond that.
Mark: Well Greg.
Speaker Change: We don't give specific guidance beyond three years.
Speaker Change: People have asked US why don't we what I would say is.
Mark: I think while some others have given much longer term guidance and we didn't I think we are the ones who are actually growing production and some of the other people arent.
Gregg Barnes: Well, Greg, you know, we don't give specific guidance beyond three years. You know, people have asked us, why don't we? What I would say is that while, you know, some others have given much longer-term guidance and we didn't, I think we're the ones who are actually growing production, and some of the other people aren't. So the best way to answer that is... You know, and Greg, you know our assets pretty well. We have good assets, we're reinvesting in those assets, we're getting good exploration results, so we're pretty confident. You know, about our reserves, we've increased them by 10%, so without giving guidance or any number, you know, I would say we're quite confident that we're going to continue to be able to run a very good business. Secondly, you talked about in the press release, higher or increased throughput rates, I think, at Hope Bay. I know you've set the bar at roughly 300 to 350,000 ounces a year because that's what's economical in the North. But what kind of size are you thinking about above and beyond that at Hope Bay going forward? Dominic is speaking.
Mark: So.
Mark: The best way to answer that is.
Mark: And Greg you know our assets pretty well.
Mark: We have good assets, we are reinvesting in those assets were good in getting good exploration results.
Mark: So we're pretty confident.
Mark: About our we've increased reserves by 10%, so without giving guidance for any number.
Mark: I would say, we're quite confident that we're going to continue to be able to.
Mark: We're on a very good business.
Mark: Okay.
Mark: Secondarily, you've talked about in the press release.
Mark: Our and increased throughput rates I think at hope Bay.
Mark: I know you've set the bar roughly 300 to 350000 ounces a year because that's what's economic in the north, but what kind of size are you thinking about above and beyond that going forward.
Mark: Dominik speaking Greg the teams are doing the tradeoffs about the tonnage there is two aspects to it first is how could we use as much as we can the current infrastructure and to minimize the capex. So this is bringing us to a certain tonnage.
Dominik: And how could we expand from those infrastructure to bring it to higher tonnage I will say I see hopefully as a media Dean project.
Ammar Al-Jandi: Greg, the teams are doing tradeoffs about the tonnage. There are two aspects to it. First, how could we use as much as we can the current infrastructure and minimize the capex. So this is bringing us to a certain tonnage. Then how could we expand from those infrastructures to bring it to higher tonnage? I would say I see Hope Bay as a milli-a-deen project in terms of 6, 7 grams per ton. If we could bring it also at the tonnage of milli-a-deen, 5-6 thousand tons per day.
In term of six seven Gram per ton, if we could bring it also at the tonnage of media Dean.
Speaker Change: Slide 6000 ton per day that could be interesting that might be the sweet spot, but we're still doing trade offs right.
Speaker Change: Great. That's very helpful. Thank you.
Speaker Change: Okay.
Speaker Change: Your next question comes from Kerry Macquarie.
Kerry Macquarie: Macquarie from Canaccord Genuity. Please go ahead.
Kerry Macquarie: Hi, Good morning, guys, a lot of or some of your peers have made.
Kerry Macquarie: Our our chasing growth in copper just wondering how you guys think about copper and more broadly based metal disclosure.
Dominic: That could be interesting. That might be the sweet spot, but we're still doing trade-offs. Great, that's very helpful. Thank you. Your next question comes from Kerry McCrory from Cancord Juniority. Please go ahead. Hi, good morning, guys.
Speaker Change: Well I mean.
Speaker Change: I think I think copper has got a great future frankly.
Speaker Change: I think I think the world is transitioning I think we think the world is transitioning to.
Gregg Barnes: A lot of, some of your peers have made, are chasing growth in copper. Just wondering how you guys think about copper and, more broadly, base metal exposure. Well, I mean, I think copper's got a great future, frankly. You know, I think the world is transitioning.
Speaker Change: Towards electric versus fossil fuels and copper will play a role there we are quite excited about the potential at <unk>.
Speaker Change: San Nicolas as you as you.
Recall carry we Didnt do San Nicolas because it was copper we did it because it makes a lot of money in our region, we want to be in with a partner we want to be with.
Kerry McCrory: I think we think the world is transitioning towards electric versus fossil fuels, and copper will play a role there. We are quite excited about the potential at San Nicolas. And as you recall, Kerry, we didn't do San Nicolas because it was copper.
Speaker Change: But certainly we we like copper and we are a gold company.
Speaker Change: But our job is to make.
Speaker Change: We make money for our shareholders.
Speaker Change: In a responsible way.
Ammar Al-Jandi: We did it because it makes a lot of money in a region we want to be in with a partner we want to be with. But certainly, we like copper, and, you know, we are a... Gold Company. But our job is to, you know, make money for our shareholders in a responsible way. Okay, so that leads to my second question. I mean, you talked about obviously having a regional focus and good jurisdictions.
Speaker Change: Okay. So that leads to my second question I mean, you talked about.
Speaker Change: Having a regional focus in good jurisdictions obviously.
Speaker Change: Biggest player in Canada by a long shot but in the long term are you looking at other jurisdictions to grow into or how do you think about.
Speaker Change: International diversification.
Speaker Change: We are open to international diversification, I mean, Australia, it's probably between Australia, and Canada is what's the best place in the World to mine.
Kerry McCrory: The biggest player in Canada by a long shot, but in the long term, are you looking at other jurisdictions to grow into or how do you think about, you know, international diversification? We are open to international diversification. I mean, you know, Australia, it's probably between Australia and Canada that is the best place in the world to mine. So, we are open to... You know, very good mining regions. You know, we're in four countries, five regions, you know; is it impossible to go to a sixth? No, it's not impossible, but it would have to meet the criteria of geologic potential first and foremost, followed by a view on political stability to actually be able to make 10, 20-year investments.
Speaker Change: So we are open to.
Speaker Change: Very good mining regions.
Speaker Change:
Speaker Change: We're in four countries five five regions is it impossible to go to a <unk> no it's not impossible, but it would have to meet the criteria.
Speaker Change: The geologic potential first and foremost followed by our view on political stability to to actually be able to make 10 20 year investments.
Speaker Change: So we are.
Speaker Change: Gold company, we are very strong in the jurisdictions we operate in.
Speaker Change: This year.
Speaker Change: The next few years really we're going to focus on what we've got in optimizing what we've got we think we've got a great platform to build from.
Ammar Al-Jandi: So we are a gold company; we are very strong in the jurisdictions we operate in. This year, and the next few years, really, we're going to focus on what we've got and optimize what we've got. We think we've got a great platform to build from. But if there's an opportunity that makes sense to create more value per share for our shareholders, we're going to look at it. All right, that'
Speaker Change: <unk>.
Speaker Change: But if there is an opportunity that makes sense to create more value per share for our shareholders, we're going to look at it.
Speaker Change: Alright, that's great. Thanks Omar.
Omar: Thank you.
Omar: Your next question comes from John Tumazos from John Tumazos, very independent research. Please go ahead.
Operator: Thank you. Your next question comes from John Tumazos from John Tumazos Ferry Independent Research. Please go ahead.
Congratulations.
John Tumazos: 900000 ounces who's almost as much as Barrick made in the quarter.
John Tumazos: Congratulations, 900,000 ounces was almost as much as Barrick made in the quarter. Getting big. There were a couple places in the press release, an exploration release where, The pros. And then the numbers that I was trying to, the numbers in the release were kind of hard to put together consistently and reconcile.
John Tumazos: Very good.
Speaker Change: There were a couple of places.
Speaker Change: Uh huh.
Speaker Change: Press release and exploration release, where.
The pros.
Speaker Change: And the numbers that I was trying to have the numbers in the release, we are kind of hard to.
Speaker Change: Put together consistently to reconcile.
John Tumazos: Let me just ask about Fosterville, where the 2025 guidance is a midpoint of 150,000 ounces output. And that seems like 700,000 tons milled, 7 grams, 94% recovery. The reserve is 6.1 grams, which is a little lower, and seven grams. And then the pros of the presentation talk about 175 to 200,000 ounces. Is the 175 to 200 the average of 24 and 25 guidance?
Speaker Change: Let me just ask about Fosterville.
Speaker Change: Whereas the 2025 guidance.
Speaker Change: As a midpoint of 150000 ounces out.
Speaker Change: And that seems like 700000 tons milled seven grams, 94% recovery.
Speaker Change: The reserve is six one grams.
Speaker Change: Which is a little lower.
Speaker Change: Seven grams, and then the pros the.
Speaker Change: The presentation talks about 175 to 200000 ounces.
Speaker Change: Is the 175 to 200.
Speaker Change: Average of 24% and 25 guidance.
John Tumazos: Or are you looking forward beyond 2026, expecting that you're going to hit something a little better, and six grams just reported in reserve? John I'll, I don't know, do you want me to take it in turns, okay, yeah, the 175 to 200 is looking forward, beyond that time frame, I mean, you're exactly right, those are the numbers that we gave, and we are, you know, Fosterville is a great asset, great people, we are looking at, sort of, a long-term steady state. 175 to 200.
Speaker Change: Or are you looking forward beyond 2026.
Speaker Change: Expecting that you're going to hit something a little better.
And six grams just reported in reserve.
John All I don't know Jeremy to take in the test Okay. Yes.
Speaker Change: 175 to 200 is looking forward beyond that timeframe, yet I mean, you're exactly right.
Speaker Change: Those are the numbers that we gave and.
Speaker Change: And we are.
Speaker Change: Fosterville is.
Speaker Change: Great asset great people.
Speaker Change: We are looking at.
Speaker Change: Sort of a long term steady state.
Speaker Change: 175 to 200, that's kind of what we're working on and you may say well look you know thats only $175 200, why are you guys.
Ammar Al-Jandi: That's kind of what we're working on. And you may say, well, look, you know, that's only 175, 200. Why are you guys, you know, in Australia?
Guy: The answer is, um... We don't have proof, but we think there's more than one very high-grade zone to be found there. You know, maybe it's not a swan, maybe it's a half a swan, or maybe it's a two-time swan, but it generates a lot of cash flow, and so if you're us, what do you do? You position the mine to operate well, to operate consistently between 175 and 200, if you think you can have that steady and really give you the opportunity to find that next swan zone. Guy, did you want to jump in? Yeah, John.
Speaker Change: In Australia.
Speaker Change: The answer is.
Speaker Change: We don't have proof.
Speaker Change: But we think there's more than one very high grade.
Speaker Change: To be found there maybe it's not a swan maybe it's a half a swan or maybe its a two times Swan.
But it generates a lot of cash flow.
Speaker Change: And so if you're us what do you do you position the mine.
Speaker Change: Operate well to operate consistently between 175 to 200. If you think you can have that steady and really give you the opportunity to find that next Swan zone.
Speaker Change: <unk> did you want to jump in and John If you look at it in detail because when we do the LIFO buy like that we do the stope by stope exercise. So there will be some variation so yeah. They averages six but you can assume that some year will be at 700, and some year will be at five depending on the mining sequence averaging six for the the rest of that.
Guy: If you look at it in detail, because when we do the life of mine like that, we do the stope by stope exercise, so there will be some variation. So, yeah, the average is 6, but you can assume that some years will be at 7, some years will be at 5, depending on the mining sequence, averaging 6 for the rest of the life of the mine according to what we have, but it's not going to be stable at 6 over time. It's going to fluctuate because there are still some pockets of higher-grade mineralization in the system that are smaller than the swamp, but it's all about sequencing the extraction of the... If we were going to just jump into the discussion, say, to Hope Bay. Inferred resource at Hope Bay Rose Byer, 158,000 ounces.
Speaker Change: Life of mine. According to what we have what it is not going to be stable at six over time, it's going to fluctuate because theres still some pockets of higher grade mineralization in the system that are smaller than this one but it's all about sequencing extraction.
<unk>: This is <unk>.
<unk>: If we were.
Speaker Change: Just jumped in the discussion.
Speaker Change: The.
Speaker Change: The.
Speaker Change: Inferred resource.
Speaker Change: Sure.
Speaker Change: Rose.
Speaker Change: 158.
Guy: The reserves stayed the same, but we should interpret from your good drill results and your good qualitative narrative that the inferred resource and the reserves are gonna increase a lot more than 158,000 ounces when you get more infill drilling and more data I present. Exactly, you're right. There's been some small portion that has reached the inferred resources classification, but we are also, I would say, making sure that the, for example, the dilution assumption, so we've also been adjusting. The model, so there were some pluses and minuses, and you're right, the bottom line is net 170, with a mixture of removing some of the lower grain material and adding a more realistic dilution.
Speaker Change: Ounces.
Speaker Change: The reserves are the same.
Speaker Change: We should interpret from your good drill results in good qualitative narrative.
Speaker Change: The inferred resource and the reserves are going to increase a lot more than 168000 ounces when you get more infill drilling and warrant David I presume.
Speaker Change: Youre right that there has been some small portion that have reach inferred resources less efficacious, but also we are.
Speaker Change: I would say, making sure that the.
Speaker Change: For example, the dilution assumption so we've been also adjusting.
Speaker Change: The model to us so we've there's been some some pluses and minuses and Youre right. The bottom line is net of 170 with a mixture of removing some of the lower grade material addition of a more realistic dilution we haven't touched the reserve as well as you described and Youre right with the additional drilling.
Guy: We haven't touched the reserve as well as you described, and you're right, with the additional drilling we're going to see in Madrid, we're expecting those ounces to show up later on in 2024 and 25. And you talked about the ramp at Odyssey getting closer to the top of the East Goldie deposit, if I understood that correctly. So in the second and third quarters, you'll be able to visually inspect the rock confidence and continuity of the very top of the East Goldie Zone, which would put you in a position to add reserves at the end of 2024 or 2025 from those visual inspections, different than the part of the reserve you added from drilling last night. It's fair, especially because, you know, there's still the reserve, which goes basically from 800 meters down to 1.8 kilometers below surface, and there's still 300 meters of infill resources at the top.
Speaker Change: We're going to see in the med Red we're expecting those ounces to show up later on in 'twenty, four and 'twenty five.
Speaker Change: Yes.
Speaker Change: And you talked about the ramp.
Odyssey.
Speaker Change: Getting closer to the top of the east Goldie deposits.
Speaker Change: If I understood correctly.
Speaker Change: So in the second and third quarter.
Youll be able to visual you expect or inspect to rock comprehensive continuity.
The very top of the East <unk> zone.
Speaker Change: Which would put you in a position.
Speaker Change: To add reserves.
Speaker Change: At the end of.
Speaker Change: 2024 or 2025.
Speaker Change: Those visual inspections different during the part of the reserve where you added from drilling.
Speaker Change: Last night.
Speaker Change: That's not fair, it's fair, especially because you know the there's still the reserve as you can see in the long section goes basically from 800 meter down to 181 800 meters to one eight kilometers below surface and there is still 300 meter of of inferred resources at the top so that access on the top of.
Guy: So that access to the top of the ore body, as you described, will allow us to enter, open up the deposit, but also will provide a better position for infill drilling from much closer to the upper part, upper and eastern part of the ore body, where we see some quick wins to potential reserve addition. And also, if you put that in a bigger scheme of things, you look back at the PEA that we produced with 9 million ounces; we are expecting that the rest of the ounces that were not converted this year in reserve will show up progressively over the next couple of four or five years. There is nothing better than being able to see and touch the rock.
Speaker Change: The ore body as you described will allow us to enter open up the deposit, but also will provide a better position for infill drilling from much closer in the upper part upper and eastern part of the ore body, where we see some quick wins two potential Reserve addition, and also if you put that in the bigger scheme of thing you look back at the.
Speaker Change: The <unk> that we produce with with 9 million ounces, we are expecting that the rest of the answer is that we're not convert this year and reserve will show what progressively over the next couple four or five years.
Speaker Change: Nothing better than being able to see and touch the Iraq. Thank you Yeah I agree with you we can't wait.
John Tumazos: Thank you. Yes, I agree with you. We can't wait.
Tanya Jakusconek: Your next question comes from Tanya Jakusconek from Scotiabank. Please go ahead. Great. Good afternoon, everyone.
Speaker Change: Your next question comes from Tanya <unk> from Scotia.
Tanya: <unk> Bank. Please go ahead.
Tanya: Great. Good afternoon, everyone. Thank you for taking my questions and congrats on a good quarter.
Ammar Al-Jandi: Thank you for taking my questions and congratulations on a good quarter. Can I ask about just the guidance for 2024? As we look ahead to the year, throughout the year, can I just ask about how production is developing quarter on quarter? Are we similar to last year where it was generally equally distributed, or should there be something else that we should be aware of? Hi Tanya.
Tanya: Can I ask.
Tanya: The guidance for 2024, as we look for the year throughout the year can I just ask about how we see production developing quarter on quarter are similar to last year.
Tanya: Generally equally distributed or should there be something else that we should be aware.
Ammar Al-Jandi: We're expecting it to be relatively equal through the year. Okay, I like that. I never like those strong Q4s.
Speaker Change: Hi, Tanya.
Tanya: We're expecting it to be relatively equal through the year.
Tanya: Okay I like that.
Speaker Change: That strong Q4.
Ammar Al-Jandi: Okay, that's good. Thank you for that. And then Guy and Dominic, can I ask on slide 23, I know we talked a little bit about the additional 500,000 ounces at Amaruk to extend the mine life. I'm just looking at the long term to kind of see where you would have added those additional ounces and then maybe we could talk a little bit. And I know, Amar, you said you didn't really want to talk about extending beyond 2028. But I'm trying to get an idea of where else we could see the potential extension beyond 2028 to try and bridge that gap before, let's say, Hope Bay comes in, because I'm trying to understand whether we can use any of the, you know, workforce and or equipment and or other facilities from Amaruk to Hope Bay to help with the So, over to you guys on that. I'm going to give you the first part of the answer to your question. So about where those 500,000 answers will come from, they're going to come from three major things, I would say.
Tanya: Okay. That's good thank you for that.
Tanya: And then Ian dominate P&I.
Tanya: Slide 23.
Ian: I know, we talked a little bit about the additional 500000 ounces and look to extend the mine life I'm just looking at the long it till now to kind of see where you would have added those additional ounces and then maybe talk a little bit and I know.
Ian: You said you don't want to really talk about extending beyond 2028, but im trying to get an idea.
Ian: Could we see that potential extension beyond 2028 to try and bridge that gap the floor.
Ian: <unk> comes in because im trying to understand whether we can use any.
Ian: Workforce and our equipment and are there.
Ian: From.
Ian: Okay.
Ian: With the Capex.
Speaker Change: So I'll go and give guidance on that.
Speaker Change: When we gave you for.
Speaker Change: First part of the answer to your question, so about the where the where it almost 500000 ounces will come from it going to come out with here from three major team as we continue to see that positive reconciliation with more tonnes better grade that were integrated in our model so that will potentially represent up.
Guy: As we continue to see that positive recantation with more tons and better grades that are integrated into a model, so that will potentially represent up to maybe a quarter of the ounces added will come from that. And that positive reconciliation in the IVR PIP that sits on the right-hand side of that long section, we see some very nice, great reconciliation in that part. So one of the extensions of the mine contribution is a pushback we're contemplating on the IVR PIP. And both of those will also, by default, allow us to continue to mine underground. So the third fold is to continue mining additional stoves that, with the previous life of the mine, when the pits were depleted, we were not able to continue mining underground.
Speaker Change: Maybe a quarter of the ounces added will come from that and that positive reconciliation in the IV iron that sits on the right hand side of that long section.
Speaker Change: We see kind of some very nice good grade reconciliation and that fired so one of the.
Speaker Change: The extension of the mine contribution is the push back we're contemplating on the IV Rps.
Speaker Change: And both of those wells also by by default that allow us to continue to mine underground so that for the third fold is continue mining additional stope that correct with the previous life of mine wherein the pits were depleted where we're not able to continue mining underground. So now we're going to be able to extend the underground yet.
Guy: So now we're going to be able to extend the underground, get some more stoves that were good grade, good quality but that did not make sense on their own without an extension of the open pit. So it's a contribution of those three that leads to the addition of half a million, and maybe Dominic, you want to comment? Yes, Tanya, Dominic.
More stopes that were a good grade good quality, but that we're not making sense on their own or an extension of the open pit with the contribution of those three that leads to the addition of 11 million ounces and maybe did Dominik you want to comment.
Dominik: Yes, Danielle the mix.
Dominic: Just on that, our goal is really to extend Middle Bank and keep Middle Bank running. Now, the equipment we could use in the workforce, there's different aspects of it. That could be the genset, the HPGR, the compressor, pumps, different types of equipment.
Dominik: Just on that our goal is really to extend meadowbank and keep meadowbank running.
Now the equipment, we could reuse and the workforce there is different looked at back of it that could be at.
Dominik: Jen said, the HBV or the compressor pumps different type of equipment. The thing is we don't know where theyre going to go is it going to upper Beaver Detour underground.
Dominic: The thing is, we don't know where they're going to go. Is it going to Upper Beaver, Detour Underground, Wessamac, or Hope Bay? All those options exist. Same thing with the workforce.
Dominik: Mac or obey all of those options exist same thing with the workforce, we're going to be ramping up would you say at the time Detour also Avalon.
Dominic: We're going to be ramping up, as you say, at the time. Detour also has a lot of good positions open. It might be Hope Bay, too, but it's all opportunities. Okay, so there's lots of ability to use that equipment and people as we look out to the end of the decade. Yeah.
Dominik: Good position open.
Dominik: We might but it might be <unk>, but it's all opportunities.
Dominik: Okay. So there's lots of them ability to use that equipment at people as you look out to the end of the decade.
Dominik: Yep.
Tanya Jakusconek: Okay, thank you for that. And maybe a question for you, Amar, if I could ask about just the non-gold components. You mentioned you like copper.
Speaker Change: Okay. Thank you for that and just maybe a question for you.
Speaker Change: If I can ask on just the non gold component.
Speaker Change: You mentioned you like copper, obviously San Nicolas.
Ammar Al-Jandi: Obviously, San Nicolas is your first venture into sort of a copper asset. I saw some other smaller investments in non-gold are being made. Should we be thinking that that part of your strategy is investing in some of these junior non-gold equities for 2024? Is that a strategy that's in place, or are you looking to further grow with more developed upfront or producing copper assets? Well, Tanya, I think...
Speaker Change: And your first venture into sort of a copper asset I saw some other smaller investments in non gold are being made should we be thinking that that part of your strategy of investing in some of these junior non gold.
Speaker Change: <unk>.
Speaker Change: Equities at for 2024 is that a strategy that's in place or are you looking to further grow with more <unk>.
Upfront, we're producing a copper asset.
Speaker Change: Well.
Daniel: Daniel I think.
Ammar Al-Jandi: So first of all, you know, we are pretty focused on the gold projects that we have in our backyard that are, you know, the least risk and the highest return on capital. Now, you know, we've been around for 66 years; we're 98% gold right now. I would say that, You know, 60 years from now, are we still going to be 98% gold? You know, we'll probably have other metals. The difference with us is we're not going to, and I'm not knocking this on anybody else, but we are not going to a jurisdiction we know nothing about to chase a particular type of metal. Our strategy is simple.
Daniel: So first of all.
Daniel: We are pretty focused on the gold projects that we have in our backyard that are.
Daniel: <unk> and the highest return on capital now.
Daniel: We've been around for 66 years, where 98% gold right now I would say that.
Daniel: You know 60 years in the future or are we still going to be 98% gold.
Daniel: We'll probably we'll probably have other metals.
Daniel: The difference with us is.
Daniel: We're not going to and I'm not knocking this on anybody else, but we are not going to a jurisdiction we know nothing about.
To chase a particular type of metal are our strategy is simple we try to be the best in the regions, we can be and if we have a competitive advantage.
Ammar Al-Jandi: We try to be the best in the regions we can be, and if we have a competitive advantage... In an area we operate in, and a non-gold asset becomes available where we have a competitive advantage, you know, we would look at it. And so, of course, we would look at copper. You know, we've done a couple of other small things people know about, but we're not going to a different jurisdiction with a different medal. Okay, so it would be in jurisdictions you're at, you know, looking at where you could add value. And only if it makes a good return for our Sheralds.
Daniel: In an area, we operate and our non gold asset becomes available.
Daniel: Where we have a competitive advantage.
Daniel: We would look at it and so of course, we would look at copper.
Daniel: We've done a couple of other small things people know about.
Daniel: But we're not going to a different jurisdiction.
Daniel: With a different metal.
Speaker Change: Okay. So it would be in jurisdiction you are at.
Speaker Change: Looking at where you could add value.
Speaker Change: And only if it makes good return for our Cheryl Cheryl I know that's self evident but we're not for example, we're not setting a target that we're going to be X amount of copper because frankly that means youre chasing something we're just going to be open to good opportunities now to.
Tanya Jakusconek: I know that's self-evident, but you know, we're not, for example, setting a target that we're going to be X amount of copper because, frankly, that means you're chasing something. We're just going to be open to good opportunities now. To your point, we've had a long history of very early stage investments. You know, nine out of 10 don't end up meeting our criteria.
Speaker Change: To your point, we've had a long history of very early stage investments.
Speaker Change: Nine out of 10 don't end up meeting our criteria, we ended up doing just fine.
Ammar Al-Jandi: We end up doing just fine. But yeah, you know, you could expect us to keep our eyes and ears open for opportunities in the areas we operate in. Okay, great, thank you so much, and good luck. Thank you very much. Your next question comes from Jackie Przybylowski from BMO. Please go ahead.
Speaker Change: But yes, you could expect us to keep our eyes and ears open for opportunities in the areas we operate.
Speaker Change: Okay, great. Thank you so much and good luck. Thank.
Speaker Change: Thank you very much.
Speaker Change: Your next question comes from Jackie <unk> from BMO. Please go ahead.
Jackie Przybylowski: All right, thanks very much. And congratulations on the quarter. I think I just wanted to ask, I know a lot of things have been asked already, but I just wanted to ask for maybe a little bit more color on what we can expect with the update later in the first half of 2020, for the Abitibi optimization. I know you've talked about studies at Detour, Upper Beaver, and Wazzamack. Is there also going to be some discussion about integrating the entire district together? And maybe we are going to get some kind of information about, you know, mill optimization or infrastructure, transportation, anything like that as well? If you can just maybe tell us what we should be expecting, that'd be helpful. Thank you. Thanks, Jackie.
Jackie: Alright, thanks, very much and congratulations on the quarter.
I think I just wanted to ask I know a lot of things have been asked already but I just wanted to ask maybe a little bit more color on what we can expect with the update later in the first half of 2020.
Jackie: For an advocate the optimization I know you've talked about studies that detour and upper Beaver and Watson Mack is theyre also going to be some discussion to integrate.
Jackie: Entire district, together and maybe how are we going to get some kind of information about that.
Jackie: The mill optimization or our infrastructure transportation anything like that as well. Okay. If you can just maybe tell us what we should be expecting that'd be helpful. Thank you.
Speaker Change: Thanks Jackie.
Ammar Al-Jandi: I think, well, I'll be clear, we're going to give some more guidance on where we are and next steps on the detour. We are going to give more guidance on where we are in the next steps on Upper Beaver. We are doing the work on transportation options, but really the best way to think about those is within the context of those projects.
Speaker Change: I think well.
Speaker Change: I'll be clear, we're going to give some more.
Speaker Change: Guidance on where we are and next steps on detour.
Speaker Change: We're going to give.
Speaker Change: More guidance on where we are and next steps on upper Beaver.
Speaker Change: We are doing the work on transportation options, but really the best way to think about those within the context of those projects.
Jackie Przybylowski: You know, we are going to be giving more updates on next steps at WSMAC, but probably not until the start of next year. You know, we are, of course, uh... Of course, we are talking to everybody within a certain distance of, and they're talking to us within a certain distance of, Malartic with regard to future opportunities at the mill there. So, you know, there's a lot going on. You'
Speaker Change: We are going to be giving.
More update on next steps at Wassa, Mac, but probably not until the start of next year.
Speaker Change: We are of course.
Speaker Change: Of course, we are talking to everybody within a certain distance of and they're talking to us within a certain distance of melodic with regards to future opportunities at the mill. There. So there's a lot going on you're right.
Ammar Al-Jandi: You know, there's a lot of potential, but what you can expect in the middle of the year is really more focused on detour and upper beaver. Thanks, Amar. And maybe that sort of answers my follow-up question a little bit, but, you know, we've heard a lot of talk about how much capacity you have with the different mills and, absolutely, with your expertise and your people in the region. Are there any thoughts or, I mean, is there anything you can maybe comment on now about acquisition or maybe adding additional properties? Do you see a need to add additional properties to your portfolio in the Abitibi, or are you going to trade what you've got first? Well, clearly, we're focused on what we've got, but with the question about acquisitions..., um, maybe we're going to be focused more on return on capital. For example, if somebody's got a project that they want to build and it gets a better return for them to use As a simple example, you know, I would... You know, I would rather put in no additional capital and make $50 million a year than put in a hundred million dollars of capital to make $60 million a year.
There's a lot of potential but what you can expect middle of the year is really more focused on.
Speaker Change: On detour and upper Beaver.
Speaker Change: Thanks, Laura and maybe that sort of answers my follow up question, a little bit but.
Speaker Change: We've heard a lot of talk about how much.
Speaker Change: So you have I would say with it may be different no.
Speaker Change: Absolutely with your expertise and your people in the region.
Speaker Change: Is there is there any thoughts or I mean is there anything you can maybe comment on now about acquisition or maybe adding additional properties do you see a need to add additional properties to your portfolio in the abitibi or are you.
Speaker Change: Go ahead slightly you've got first.
Speaker Change: Clearly we're focused on what we've got but what the question on acquisitions.
Speaker Change: Maybe maybe.
Speaker Change: We're going to be focused more on return on capital.
Speaker Change: If you know if somebody's got a project that they want to build.
Speaker Change: And it gets a better return for them to use our mill.
Speaker Change: And it's a better return on capital than us acquiring the person.
Speaker Change: Would do that.
Speaker Change: A simple example.
I would.
Speaker Change: I would rather put no additional capital and make $50 million, a year and put in a $100 million of capital to make $60 million a year.
Jackie Przybylowski: I know that sounds self-evident, but, you know, we're going to look at the specific opportunities, but with a real focus on return on capital. And that could mean acquisitions, but it could also mean that some people who have good projects decide they want to use our mill. Thank you. Maybe one more follow-up, if I can, just to follow up on some of the other themes in the call on base metals. I know you've recently made an investment in Canada Nickel, and it is at least regionally attractive in a similar jurisdiction. Are there any synergies with Canada Nickel besides personnel and expertise in the region? Would any of your facilities suit that operation if it were to be built?
Speaker Change: I know that sounds self evident but.
Speaker Change: We're going to we're going to look at the specific opportunities, but with a real focus on return on capital and that could mean acquisitions, but it could also mean.
Speaker Change: Some people who have good projects.
Speaker Change: They want to use our mill.
Speaker Change #100: Got it. Thank you maybe one more follow up if I can just follow up on some of the other things in the call.
Speaker Change #100: On base metals I know you.
Speaker Change #100: Recently made an investment in Canada nickel and it isn't the end.
Speaker Change #100: At least regionally pretty into similar jurisdiction.
Speaker Change #100: Is there any.
Speaker Change #100: Synergies with Canada nickel besides.
Speaker Change #100: Personnel and expertise in that region.
Speaker Change #100: With any of your facilities.
Speaker Change #100: You.
Speaker Change #100: That operation if it were to be built.
Ammar Al-Jandi: Yeah, I mean, I think our view on Canada Nickel is that it is, and I hope I don't upset my ex-CFO by saying this, it's a very long-term perspective that they're taking. I don't see anything imminent there, so certainly, we're not talking to them about providing people or developing anything. It's a vision that they have.
Speaker Change #100: Yes.
Speaker Change #100: <unk>.
Speaker Change #100: In our view on Canada nickel is that it is.
Speaker Change #100: <unk>.
Speaker Change #100: I hope I don't upset my ex CFO by saying that it's it's a very long term perspective that they're taking I don't see anything imminent. There. So certainly certainly we're not talking to them about providing people are developing anything it's a vision that they have it's a large.
Jackie Przybylowski: It's a large, you know, relatively low-grade ore body that, and they have an interesting vision, and so I think it's better to think, Jackie, really this is just a very early stage investment on our part. You know, it's a big asset in our backyard, a big option on nickel, but really, it's the Canada Nickel team running this, not Agnico. That's really helpful. Thanks very much, Mark. Your next question comes from Martin Prodrier from Veritas Investment Research. Please go ahead.
Speaker Change #100: Yes.
Speaker Change #100: Relatively low grade ore body and they have an interesting vision.
And so I think it's better to think Jackie really this is just a very early stage investment.
Speaker Change #100: On our part it's a big asset in our backyard big option on nickel.
Speaker Change #100: But really it's the Canada nickel team running this not not agnico.
Speaker Change #100: Alright.
Speaker Change #101: Really helpful. Thanks, very much mark.
Speaker Change #102: Your next question comes from Martin <unk> from Veritas.
Martin: The investment research. Please go ahead.
Martin Prodrier: Thank you for taking my question. When I look at the cost increase, your guidance talks about a 4% year-to-year increase. Now, there are some assets where you see an increase in volume, like Canadian Malartic, and your cost increased 12%; Macasa, the cost increased 17% with higher volume, and Kittila, the cost increased 10% on flat volumes. If you can provide some color on why, you know, in some of them you have higher volumes and have much higher costs.
Martin: Thank you for taking my call My question.
Martin: When I look at the cost increase your guidance talks about a 4% year over year increase now there are some assets.
Martin: You see it.
Martin: Increasing volumes.
Martin: Canadian melodic and cost increased 12% Makassar costs increased 17% with higher volume.
Martin: And Kittila the cost increased 10% on flat volumes. If you can provide some color on why.
Martin: Some of them you have higher volumes and have much higher cost.
Jamie Porter: Thank you. Yeah, thanks for the question. It's Jamie here. You know, it's really a function of sequencing, mine sequencing across our operations. You're going to have periods where, you know, tonnage is flat, but costs on a per ounce basis are higher or lower just given the grade profile of the individual asset.
Martin: Yes. Thanks for the question, it's Jamie here.
It's really a function of sequencing mine sequencing across our operations that youre going to have periods, where.
Jamie Porter: Tonnage is flat, but costs are on a per ounce basis are higher or lower just given the grade profile of the individual asset, but overall when you look at our costs I mean, we saw inflation running around 6% year over year and our job as management is to try to do better than that through a higher denominator in through.
Martin Prodrier: But overall, when you look at our costs, I mean, we saw inflation running around 6% year over year, and our job as management is to try to do better than that through a higher denominator and constant focusing on optimizing our costs. I think we've delivered that with a 4% increase in our cash costs and all sustaining cost guidance. Okay, but you cannot provide much color on, you know, in any of those Canadian, Malartic, Makassar, Kittila. What is driving that much higher?
Jamie Porter: Constantly focusing on optimizing our cost so I think we've delivered that with with a 4% increase in our cash costs and all in sustaining cost guidance.
Jamie Porter: Okay, but you cannot provide much color on any of those cannot MLR take mckesson kittila, what is driving that market, yes, we.
Jamie Porter: Yeah, we can reach out offline and walk through that on an asset-by-asset basis, but with 11 operating mines, it's hard to provide a generalized answer. Okay, great, thank you. And there are no further questions at this time. I will turn the call back over to Mr. Ammar Al-Jande for closing remarks.
We can reach out offline and walk through that on an asset by asset basis, but with with 11 operating minds, it's hard to provide a generalized answer.
Speaker Change #104: Okay, great. Thank you.
Mr. Ahmad: There are no further questions at this time I will turn the call back over to Mr. Ahmad of Johnson for closing remarks.
Ahmad Al: Thank you operator, and thank you everyone for joining us yet again.
Operator: Thank you, Operator, and thank you, everyone, for joining us yet again, and we wish you all a happy weekend. Thank you. Ladies and gentlemen, this concludes your conference call for today. We thank you for joining, and you may now disconnect your lines.
Ahmad Al: And we wish you all a happy weekend. Thank you.
Speaker Change #106: Ladies and gentlemen, this concludes your conference call for today, we thank you for joining and you may now disconnect your lines. Thank you.
Speaker Change #106: Yeah.
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