Q1 2024 Kinross Gold Corp Earnings Call
Sean: Thank you for standing by. My name is Sean, and I will be your conference operator today. At this time, I would like to welcome everyone to Kinross Gold's first quarter 2024 results conference call and webcast.
Thank you for standing by my name is Sean and I'll be your conference operator today at this time I would like to welcome everyone to Kinross Gold first quarter 2020 for Russell Its conference call. It about gas 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 would like to ask.
Sean: All lines have been placed on mute to prevent any background noise. After the speaker's remarks, there will be a question and answer session. If you would like to ask a question during this time, simply press star followed by the number one on your telephone keypad. If you would like to withdraw your question, please press star one again. Thank you. I would now like to turn the call over to Chris Lichtenheldt, Vice President of Investor Relations. Please go ahead.
A question during this time simply press star followed by the number one on your telephone keypad. If you would like to withdraw your question. Please press star one again. Thank you I would now like to turn the call over to Chris Lichten help Vice President of Investor Relations. Please go ahead.
Chris Lichtenheldt: Thank you and good morning. With us today are Paul Rawlinson, CEO, and from the Kinross Senior Leadership Team, Andrea Freeborough, Claude Schimper, William Dunford, and Jack Gold. For a complete discussion of the risks and uncertainties which may lead to actual results differing from estimates contained in our forward-looking information, please refer to page 2 of this presentation, our news release dated May 7, 2024, the MD&A for the period ended March 31, 2024, and our most recently filed AIF, all of which are available on our website. I will now turn the call over to Paul.
Chris Lichtenheldt: And good morning, with US today, we have all Royalton CEO and from the Kinross Senior leadership team Andrea <unk>, Paul temper, William Dunford injectable.
Chris Lichtenheldt: Complete discussion of the risks and uncertainties, which may lead to actual results different from estimates contained in our forward looking information. Please refer to page two of this presentation. Our news release dated May seven 2024, MD&A for the period ended March 31 2024.
Chris Lichtenheldt: Our most recently filed Aif all of which are available on our website I will now turn the call over to Paul.
Unknown Executive: Thanks, Chris, and thank you all for joining us. Today, I will discuss our first quarter results and provide high-level updates across our portfolio. Highlight some of our ESG achievements and confirm ROI. I will then hand the call over to Andrea, Claude, and Will to provide more detail. Following our strong performance in 2023, our operations continue to perform very well, and we are generating significant cash. The strong gold prices so far this year are providing a tailwind for our business, which continues to be underpinned by a focus on cost, discipline, and margin. Our production in the first quarter was on plan, delivering 527,000 ounces. Assis, Perikachu, and Lekoipa contributed just over two-thirds of our production at strong margins, with an ASIC below $1,000 per ounce.
Paul: Thanks, Chris Thank you all for joining us.
Paul: Today, I will discuss our first quarter results.
Paul: Provide high level updates across our portfolio.
Paul: Unlike some of our ESG achievements and confirm our outlook.
Paul: I will then hand, the call over to Andrea Claude and will provide more detail.
Paul: Following our strong performance in 2023.
Andrea Susan Freeborough: Our operations continue to perform very well and we are generating significant cash flow.
Andrea Susan Freeborough: The strong gold prices. So far this year are providing a tailwind for our business, which continues to be underpinned by our focus on cost discipline and margins.
Andrea Susan Freeborough: Our production in the first quarter was on plan delivering 527000 ounces.
Andrea Susan Freeborough: Yes, Eric it's you and liquid contributed just over two thirds of our production and strong margins with an eight gig below $1000 per ounce.
Unknown Executive: Our U.S. operations also performed well in the first quarter, delivering on plan and remaining on track for their full year targets. Turning now to our development activities in the first quarter. At Round Mountain, the Life of Mine Extension Strategy that we announced last year is advancing well. We are making significant progress at Phase S and with our underground opportunities at Phase X and Cold Hill. I was recently at Round Mountain and was very impressed by the progress at Phase X, where we have completed approximately 1.8 kilometers of underground development. In Alaska, the Mancho Project is proceeding well and is on schedule to contribute to production in early Q3. Transportation to Fort Knox continues to ramp up, and the mill modifications remain on track.
Andrea Susan Freeborough: Our U S operations also performed well in the first quarter delivering on plan.
Andrea Susan Freeborough: <unk> on track for their full year targets.
Andrea Susan Freeborough: Turning now to our development activities in the first quarter.
Andrea Susan Freeborough: At round mountain the life of mine extension strategy that we announced last year is advancing well.
Andrea Susan Freeborough: We are making significant progress and feedback with our underground opportunities at feedbacks and coal Hill.
Speaker Change: I was recently at round Mountain and was very impressed by the progress at Zacks, where we have completed approximately one eight kilometers.
Speaker Change: Underground development.
Speaker Change: In Alaska, the <unk> project is proceeding well.
Speaker Change: It is on schedule to contribute to production in early Q3.
Speaker Change: Transportation of order Fort Knox continues to ramp up.
Speaker Change: And the mill modifications remain on track.
Unknown Executive: At Great Bear, we continue to make excellent progress across several workstreams. We had a highly productive few months with nearly 38,000 meters of drilling completed. As outlined in yesterday's press release, drilling continues to return significant results extending beyond our year-end resource update. In addition to drilling, other areas of the project, such as permitting and engineering through the advanced exploration decline, are progressing well, as are our technical studies, permitting, and engineering work on the main project.
Speaker Change: And great beer, we continue to make excellent progress across several work streams.
Speaker Change: We had a highly productive few months with nearly 38000 meters of drilling completed.
Speaker Change: As outlined in yesterday's press release drill.
Speaker Change: Drilling continued to return significant results extending beyond our year end resource update.
Speaker Change: In addition to drilling other areas of the project such as permitting.
Engineering for the advanced exploration decline are progressing well.
Speaker Change: As our technical studies permitting and engineering work on the main project.
Unknown Executive: We are on track to release our results from the ongoing work in the form of a PEA in the second half of the year. I want to provide some additional context around the level of study we plan to release. The PEA will provide a more fulsome view of the project, including both the open kit and underground resources. Publishing a PEA allows us to include some of the underground inferred resources.
Speaker Change: We are on track to release our results from the ongoing work in the form of a pea in the second half of the year.
Speaker Change: I want to provide some additional context around the level of study we plan to release.
Speaker Change: The PPA will provide a more fulsome view of the project.
Speaker Change: Including both the open pit and underground resource.
Speaker Change: Publishing of EEA allows us to include some of the underground inferred resources.
Unknown Executive: This will provide better visibility into our anticipated path forward for both underground and open pit mining. While it will be a PEA-level study, we are putting substantial effort into our capital and operating cost estimates to provide additional confidence on the ASIC and margin. It is also important to note that our PEA will incorporate a subset of the ounces in our measured, indicated, and inferred resources. It will not include the deeper mineralization that we will not yet have drilled sufficiently to bring into the inferred resources. Our deep drilling has shown that the mineralization continues to depth well below the current resource and at attractive widths and grades.
This will provide better visibility into our anticipated path forward for <unk>.
Speaker Change: Both underground and open pit mining.
Speaker Change: Well it will be a pea level study, we are putting substantial effort into our capital and operating cost estimates to provide additional confidence on the <unk> margins.
Speaker Change: It is also important to note that our PPA will incorporate a subset of the ounces in our measured indicated and inferred resources.
Speaker Change: It will not include the deeper mineralization that we will not yet have grilled sufficiently to bring into the inferred resources.
Speaker Change: Our deep drilling has shown that the mineralization continues to depth well below the current resource is attractive with some grades.
Unknown Executive: As we continue drilling out the underground and commence underground drilling from the AEX decline, we expect the ounces in the mine plan to continue to grow. I'm obtaining permits for the main project. The detailed project description was submitted to the Impact Assessment Agency of Canada in Q1.
Speaker Change: As we continue drilling underground and commenced underground drilling on the AVX decline.
Speaker Change: We expect the ounces in the mine plan to continue to grow.
Speaker Change: On permitting for the main projects.
Speaker Change: The detailed project description was submitted to the impact assessment agency of Canada in Q1.
Unknown Executive: The federal impact assessment is underway, and we expect to file our impact statement in the first half of next year. Turning to sustainability, Our longstanding annual sustainability report, which is in its 16th edition, will be published later this month. It will provide a comprehensive update on the progress we made in 2023 and what we aim to accomplish this year and beyond. Turning to our outlook, following a strong first quarter, we are on track to achieve our 2.1 million ounce production and our cost guidance for this year.
Speaker Change: With federal impact assessment is underway and we expect to file our impact statement in the first half of next year.
Speaker Change: Turning to sustainability.
Speaker Change: Our long standing annual sustainability report will be published later this month.
Speaker Change: This report, which is in its 16th edition.
Speaker Change: Provide a comprehensive update on the progress we made in 2023.
Speaker Change: What we aim to accomplish this year and beyond.
Speaker Change: Turning to our outlook.
Speaker Change: Following a strong first quarter, we are on track to achieve our $2 1 million ounce production and our cost guidance for this year.
Unknown Executive: In light of the recent strong gold prices, we will continue to maintain our financial discipline and prioritize margins. With respect to capital allocation, our plan is to use excess cash flow to repay debt. Our first quarter is setting up 2024 to be another strong year. We believe that delivering on our guidance coupled with our strong free cash flow will continue to support strong share price performance. With that, I will now turn the call over to Andrea.
Speaker Change: In light of the recent strong gold prices, we will continue to maintain our financial discipline and prioritize margins.
Speaker Change: With respect to capital allocation our plan.
Speaker Change: One is to use excess cash flow to repay debt.
Speaker Change: Our first quarter is setting up 2024 to be another strong year.
Speaker Change: We believe that delivering on our guidance coupled with our strong free cash flow should continue to support strong share price performance.
Speaker Change: With that I will now turn the call over to Andrea.
Andrea Susan Freeborough: Thanks, Paul. This morning, I will review our financial highlights from the quarter, provide an overview of our balance sheet, and comment on our guidance and outlook. As Paul noted, we had a strong start to the year. We produced 527,000 ounces of gold, with gold sales of 522,000 ounces. We held our cost of sales in line with the prior quarter at $982 per ounce, and with an average realized gold price of $2,070 per ounce, we delivered strong margins of $1,088 per ounce and ASIC of $13.10 per ounce, slightly lower compared to the prior quarter on comparable cost of sales and lower sustaining capital.
Andrea Susan Freeborough: Thanks, Tom This morning, I'll review, our financial highlights from the quarter provide an overview of our balance sheet and comment on our guidance and outlook.
Andrea Susan Freeborough: As Paul noted, we had a strong start to the year with <unk> 527000 ounces with gold sales of 522000 ounces.
Andrea Susan Freeborough: We held our cost of sales in line with the prior quarter at $982 per annum with an average realized gold price $2070 per ounce, we delivered strong margin at $1088 per ounce.
Andrea Susan Freeborough: APAC 13, 10 per ounce slightly lower compared to the prior quarter and comparable cost of sales and lower sustaining capital.
Andrea Susan Freeborough: Average realized gold prices since Q1 have been notably higher, driving strong ongoing margins and free cash flow. In Q1, our adjusted earnings were $0.10 per share, and adjusted operating cash flow was $425 million. We generated $145 million of attributable free cash flow in Q1, or $194 million, excluding changes in working capital. Turning to the balance sheet, our financial position remains strong. We ended the quarter with $407 million in cash and approximately $2 billion of total liquidity.
Andrea Susan Freeborough: Average realized gold price in Q1, and notably higher driving strong ongoing margin and free cash flow.
Andrea Susan Freeborough: In Q1, our adjusted earnings were 10 cents per share and adjusted operating cash flow was $425 million.
Andrea Susan Freeborough: We generated $145 million attributable free cash flow in Q1 or $194 million, excluding changes in working capital.
Andrea Susan Freeborough: Turning to the balance sheet, our financial position remains strong.
Andrea Susan Freeborough: Ended the quarter with $407 million in cash and approximately $2 billion of total liquidity.
Andrea Susan Freeborough: Our trailing 12 month net debt to EBITDA ratio also improved as a quarter ended to just below one times. At current gold prices, we expect our debt metrics to continue to improve throughout the year. As Paul mentioned, we plan to allocate excess free cash against the term loan due in 2025 and expect to start debt repayments this quarter. Now, turning to our guidance. Following Q1, we remain solidly on track to meet our guidance and produce 2.1 million ounces at a cost of sales of $1,020 per ounce and ASIC of $1,360 per ounce.
Our trailing 12 month net debt to EBITDA ratio also improved as the quarter at suggest below one times.
Andrea Susan Freeborough: At current gold prices, we expect our debt metrics continue to improve throughout the year.
Andrea Susan Freeborough: As Paul mentioned, we plan to allocate excess free cash against the term loan due in 2025 and expect to start that repayments this quarter.
Andrea Susan Freeborough: Turning to our guidance.
Andrea Susan Freeborough: Following Q1, we remain solidly on track to meet our guidance and produced $2 1 million ounces at a cost of sale.
Andrea Susan Freeborough: $20 per ounce and <unk> of 13 16 correct.
Andrea Susan Freeborough: Capital expenditures are on track for our full year guidance of $1.05 billion, split roughly evenly between sustaining and non-sustaining capital. Cash flow is expected to be stronger in the second half as a result of the timing of tax payments made earlier in the year. I'll now turn the call over to Claude.
Andrea Susan Freeborough: Capital expenditures are on track for our full year guidance of 1.15 billion split roughly evenly between sustaining and non sustaining capital.
Andrea Susan Freeborough: Cash flow is expected to be stronger in the second half as a result timing of tax payment made earlier in the year.
Speaker Change: I'll now turn the call over to <unk>.
Claude J. S. Schimper: We have achieved significant progress with the implementation of our Safety Excellence Program, which reached over 50% of employees and business partners globally. This year, as part of our health and safety blueprint, we are taking additional steps to further improve engagement across the global team, with a focus on human and organizational performance and operational learning teams. We will continue rolling out this program globally and look forward to providing further updates over the coming quarter.
Speaker Change: Thank you Andrea.
Haven't seen significant progress with the implementation of our safety Excellence program.
Speaker Change: Reached over 50% of employees and business partners globally.
This unit is part of our health and safety blueprint.
Speaker Change: Taking additional steps to further improve engagement across the global team focus on human and organizational performance and operational lending teams.
Speaker Change: We will continue rolling out this program globally and look forward to providing further updates over the coming quarters.
Claude J. S. Schimper: Moving to our operations, we saw a strong performance in Q1, with our minds delivering the planned production for the courts, and Tanzia's production of 159,000 ounces was in line with a prior quarter with a cost of sales of $660 per ounce being the lowest in the portfolio. At the Tanzia solar plant, commissioning is now complete, and the plant is generating power at full capacity.
Speaker Change: Moving to operations.
Speaker Change: We saw a strong performance in Q1, with our months' delivery and production to the courts.
And Tasiast.
Speaker Change: <unk> of 159000 ounces.
Speaker Change: Along with the prior quarter.
Speaker Change: Cost of sales of $660 bonds being the lowest in our portfolio.
Speaker Change: It depends in solar plant commissioning is now complete and the plant is generating power for capacity.
Claude J. S. Schimper: Nasius remains on track to meet its 2024 production guidance of 610,000 albums. Aparica II, production of 128,000 ounces, at a cost of sales of $1,059 pounds, were both in line with a prior court decision. Production at Farrakhan-2 this year is expected to be lower and cost higher compared to last year as mine sequencing continues to transition through the lower grade portions of the pit before moving back into higher grades next year. Barrack 2 remains on track to meet its 2024 production guidance of 510,000 hours.
Speaker Change: <unk> remains on track to meet its 2020 full production guidance of 610000 ounces.
Speaker Change: The path to production of 128000 ounces.
Speaker Change: Cost of sales of $1059 bonds were both in line with the prior quarter.
Speaker Change: Production at <unk> through this year is expected to be lower and costs.
Speaker Change: Costs higher.
Speaker Change: Last year as mine sequencing continues to transition through the lower grade portions of the fixed before.
Speaker Change: Before moving back into a high grade next year.
Speaker Change: Back to remains on track to meet its 2020 full production guidance 510 powerhouse.
Speaker Change: As a quick Buck.
Claude J. S. Schimper: [inaudible] Q1 production of 71,000 ounces was on plan. The mine delivered strong free cash flow driven by high-margin production from a cost of sales of $733 per ounce, which is the second lowest in our portfolio. Production is tracking well against our plans; a strong performance on grades and recoveries offsets lower throughput. In light of the strong current grades and recoveries, it took the opportunity to perform maintenance to improve the long-term reliability of the mill while maintaining our production target of 250,000 ounces.
Speaker Change: Q1 production of 71000 ounces was on flat.
Speaker Change: The mine delivered strong free cash flow driven by high margin production from our cost of sales of $733 per ounce.
Speaker Change: Second lowest in our portfolio.
Speaker Change: Production is tracking well against our plan a strong performance on grades and recoveries offset lower throughput.
Speaker Change: In light of strong current grades and recoveries, we took the opportunity to perform maintenance to improve the long term reliability of the mill.
Speaker Change: While maintaining our production target of 260000 ounces.
Claude J. S. Schimper: At our U.S. operations, first quarter performance was on the plan, total production of 169,000 ounces, at a cost of sales of $1,312 per hour, beginning with Fort Knox, in part due to a significant weather event in Alaska at the beginning of the year.
Speaker Change: And our U S operations first quarter performance was on plan.
Speaker Change: With total production of 169000 ounces.
Speaker Change: And our cost of sales of $1312 balance.
Speaker Change: Beginning with Fort Knox in part due to a significant weather event at Alaska at the beginning of the year.
Claude J. S. Schimper: Q1 production of 53,000 oz with lower QoQ due to lower mold throughput, grades, and recoveries and lower oz recovered from the leaf bleach pad. Cost of sales of $1,466 was higher over the prior quarter primarily due to lower production at Mancho Mining Activities, including all mining and stockpiling as commenced. The transportation of the award to Fort Knox continues to ramp up. At Fort Knox, mold modifications and site preparation are progressing as planned. First production from Man Show is on track for early Q3, and at Bull Mountain, production of 47,000 ounces improved over the prior quarter. German by hire answers recovered from the past.
Speaker Change: Q1 production of 53000 ounces with lower quarter over quarter due to lower mill throughput.
Speaker Change: And recoveries.
Speaker Change: Lower ounces recovered from the heap Leach pads.
Speaker Change: Cost of sales of $1466 per ounce.
Speaker Change: Was higher over the prior quarter, primarily due to the lower production.
Speaker Change: At Manto mining activities, including all mining and stockpiling estimates.
Speaker Change: Inspiration of the ore to Fort Knox continues to ramp up.
Speaker Change: At Fort Knox, Mo modifications and site preparation is progressing on plan.
First production from <unk> is on track for early Q3.
Speaker Change: At Bald mountain production of 47000 ounces improved over the prior quarter.
Speaker Change: Driven by higher ounces recovered from the pads.
Claude J. S. Schimper: Cost of sales of $1,103 per ounce was lower quarter over quarter on higher production and a higher proportion of capitalized development. At Round Mountain, production of 68,000 ounces was higher quarter-over-quarter on stronger mil-grade throughput and recovery. Cost of sales of $1,329 per ounce improved over the prior quarter on higher production and a higher proportion of capitalized mining activity related to the ongoing stripping at Phase S. Also, at Phase S, procurement and construction activities for the East Beach Pad expansion remain on track, and first production remains on schedule to begin in the second half of next year. With that, I'll now pass the call over to William.
Speaker Change: Cost of sales of $1103 per ounce was lower quarter over quarter on higher production and a higher proportion of capitalized.
Speaker Change: At round mountain production of 68000 ounces was higher quarter over quarter on stronger mill grades throughput and recoveries.
Speaker Change: Cost of sales of $1329 per ounce improved over the prior quarter.
Speaker Change: On higher production and a higher proportion of capitalized mining activity.
Speaker Change: The ongoing stripping.
Speaker Change: Also at fitness procurement and construction activities for the heap Leach pad expansion remain on track and first production remains on schedule to beginning the second half.
Speaker Change: Next year.
Speaker Change: With that I'll now pass the call over to William.
William D. Dunford: Thanks, Claude. I'll start by continuing on Round Mountain and then provide a few updates on progress at Curlew and Great Bear. At Round Mountain Phase X, as Paul mentioned, the underground decline has progressed well, with over 1,800 metres developed thus far. The decline has now reached the point where we can begin drilling off the target mineralization from underground, and we will be doing so in Q2. As we progressed the decline in Q1, we took the opportunity to drill in between the open pit and the underground target.
William D. Dunford: Thanks, Claude I'll start by continuing on round Mountain and then provide a few updates on progress at <unk> and Greg Baer.
William D. Dunford: At round Mountain Phase acts as Paul mentioned, the underground decline has progressed well with over 1800 theatres developed thus far.
William D. Dunford: The decline has now reached the point, where we can begin drilling off the target mineralization from underground and we will be doing so in Q2.
William D. Dunford: As we progressed to decline in Q1, we took the opportunity to drill in between the open pit and the underground targets.
William D. Dunford: As you can see on the slide, this drilling hit multiple higher-grade intercepts, including 9.9 grams per ton over 21 meters and 16.6 grams per ton over 8 meters in an area where we had not previously modeled mineralization. We remain excited by the potential for higher margin production from the underground of Phase X and are pleased to see these higher-grade drill results supporting that potential. We look forward to updating you with additional drill results from the main target later this year.
William D. Dunford: As you can see on the slide this drilling has multiple higher grade intercepts, including nine nine grams per tonne over 21 meters and $16 six grams per tonne over eight theaters and an area, where we had not previously modeled mineralization.
William D. Dunford: We remain excited by the potential for higher margin production from the underground at <unk> and are pleased to see these higher great drill results supporting that potential.
William D. Dunford: We look forward to updating you with additional drill results from the main target later this year.
William D. Dunford: At Gold Hill, we are progressing infill drilling of the underground targets from the bottom of the open pit, and we are also continuing surface exploration, targeting extensions at depth and along strikes. Moving to Curlew Basin, underground drilling continued at the recently discovered Roadrunner Bains, where multiple zones of stalkwork veins were intersected while testing strike and dip extents over a broad area.
William D. Dunford: Our golf Hell, we are progressing infill drilling of the underground targets from the bottom of the open pit.
William D. Dunford: We're also continuing surface exploration targeting extensions at depth and along strike.
William D. Dunford: Moving to currently basin underground drilling continued at the recently discovered Roadrunner being built.
William D. Dunford: <unk> zones of stock work veins were intersected, while testing strike and dip extent over a broad area.
William D. Dunford: Assays from this drilling are still pending. The team has also been working on optimizing the potential mine designs to improve margins, and we are encouraged by the results to date. As Paul mentioned, we had a very productive first quarter of drilling at Great Bear, completing approximately 38 of the planned 120 kilometers of drilling budgeted for the whole year. Our drilling at Great Bear continues to focus on defining zones of inferred mineralization at greater depths at LP Central, Discovery, and Vigo.
William D. Dunford: Assays from its drilling are still pending.
William D. Dunford: Jim has also been working on optimizing the potential mine designs to improve margins and we are encouraged by the results to date.
William D. Dunford: As Paul mentioned, we had a very productive first quarter of drilling at great Bear.
William D. Dunford: Approximately 38 of the planned 102000 kilometers of drilling budgeted for the full year.
William D. Dunford: Our drilling a great bear continues to focus on defining zones of inferred mineralization at greater depths at <unk> central discovery in vivo.
William D. Dunford: In Q1, we saw further high-grade intercepts around 1,000 meters vertical depth at Yuma, building on the resource we already have in that area, including 18.6 grams per ton over 10 meters. Our drilling also showed good grades and widths at depths well beyond our current resource at Discovery, Yarrow, and Oro, as you can see on the slide. These zones continue to grow at depth, similar to what we saw with resource growth through deeper drilling at Yuma.
William D. Dunford: In Q1, we saw further high grade intercepts around 1000 meters vertical about at Yuma building on the resource they already have in that area, including $18 six grams per tonne over 10 meters.
William D. Dunford: Our drilling also showed good grades and web at depths well beyond our current resource at discovery Euro and Oro as you can see on the slide.
William D. Dunford: These loans continue to grow at that similar to what we saw with resource growth through deeper drilling at Yuma.
William D. Dunford: Although the PEA will be limited to MINI resources, this drilling continues to demonstrate our thesis that this orogenic deposit extends at significant depths with strong continuity, providing the potential for a long-life, high-grade mining complex. As with many undergrounds, the long-term potential will become more visible as we progress deeper with development and provide efficient drill access to the deeper mineralization, which is why we are now focused on progressing AEF. As a reminder, we are advancing Great Bear through two key projects.
William D. Dunford: Although the PPA will be limited to <unk> resources as drilling continues to demonstrate our thesis that this orogenic deposit extends at significant depths are strong continuity, providing the potential for a long life high grade mining complex.
William D. Dunford: As with many underground long term potential will become more visible as we progress deeper with development.
William D. Dunford: Quite efficient drill access to the deeper mineralization, which is why we are now focused on progressing AVX.
William D. Dunford: As a reminder, we are advancing great bear across two key project streams.
William D. Dunford: The AEX underground decline, through which we plan to obtain a bulk sample and perform definition drilling and infill drilling, and the main project, which includes the mine, mill, and related infrastructure required for production. For the AAF decline, subject to receipt of permits, we are targeting a start of surface construction in the second half of the year and the start of the underground decline in mid-2025. Detailed Engineering, Execution Planning, and Procurement for AEX continue to progress well.
William D. Dunford: Underground decline through which we plan to obtain a bulk sample and perform definition drilling and infill drilling in the main project, which includes the mine mill and related infrastructure required for production.
William D. Dunford: The decline subject to receipt of permits we are targeting a startup surface construction in the second half of the year and started the underground decline mid 2025.
William D. Dunford: Detailed engineering execution planning and procurement for Aes continue to progress well infra.
William D. Dunford: Infrastructure such as the camp and water treatment plant has now been purchased, and we are planning to contract major civil works in Q2. For the main project, we continue to advance technical studies, fieldwork, and comprehensive baseline studies. Work on the PEA is progressing well, and we look forward to releasing it in the second half of 2020. In Q1, we also conducted substantial geotechnical work to help inform project studies and to de-risk the project build. We look forward to continuing to provide updates as we progress all work streams towards advancing AEX and the main project. Now, we'll turn it back to Paul.
William D. Dunford: Infrastructure, such as the camp and a water treatment plant has now been purchased and we are planning to contract major civil works in Q2.
William D. Dunford: For the main projects, we continue to advance technical studies field work and comprehensive baseline studies.
William D. Dunford: Work on the PPA is progressing well and we look forward to releasing it in the second half of 2024.
William D. Dunford: In Q1, we also conducted substantial geotechnical work help inform project studies and Derisked the project builds.
William D. Dunford: We look forward to continuing to provide updates as we progress all work streams towards advancing <unk> in the main projects I will now turn it back to Paul.
Paul: Thanks will.
Unknown Executive: Our business is off to a strong start this year, and there's plenty to look forward to this year.
Paul: Our business is off to a strong start this year.
Paul: There is plenty to look forward to this year and beyond that we remain excited about our future.
Paul: We have a strong production profile.
Paul: Generating significant cash flow.
Paul: We have an investment grade balance sheet.
Paul: We have a competitive dividend.
Paul: We have an exciting pipeline of exploration and development opportunities.
Paul: And we are very proud of our commitment to responsible mining that continues to make us a leader in ESG performance.
Unknown Executive: And beyond that, we remain excited about our future. We have a strong production profile. We're generating significant cash flow. We have an investment grade balance. We have a competitive dividend. We have an exciting pipeline of exploration and development opportunities. And we are very proud of our commitment to responsible mining that continues to make us a leader in ESG performance. With that operator, I'd like to open up the line for questions.
Speaker Change: With that operator, I'd like to open up the lines for questions.
Operator: Thank you. We will now begin our question and answer session. At this time, if you would like to ask a question, please press star, followed by the number one on your telephone keypad. If you would like to withdraw your question, simply press star one again. As a reminder, we'll pause for a moment to compile the Q&A roster. Thank you. The first question comes from the line of Mike Parkin from National Bank. Please go ahead. Thanks, guys.
Speaker Change: Thank you we will now begin our question and answer session. At this time, if you'd like to ask a question. Please press star followed by the number one on your telephone keypad. If you would like to withdraw your question Senior Press Star one again.
Speaker Change: As a reminder.
Speaker Change: We'll pause for a moment to compile the Q&A roster. Thank you.
Speaker Change: Okay.
Speaker Change: The first question comes from the line of Mike Parkin from National Bank. Please go ahead.
Michael Parkin: Thanks guys and congrats on a solid quarter. First question, on the solar planet Cassius, can you give us a sense of, like, it's at full capacity now, but how did that kind of benefit Q1? Kind of running at 60% for Q1 and now we can assume at 100% further improvement, or was it close to 100% for Q1?
Michael Parkin: Thanks, guys and congrats on a solid quarter.
Michael Parkin: First question on the older Planet Tastiest could you give us a sense of like.
Michael Parkin: At full capacity now, but how does that kind of impediments that Q1 was it.
Michael Parkin: Kind of running at 60% for Q1.
Michael Parkin: Now we can assume at 100% further improvement or did it.
Michael Parkin: Is it close to a 100% for Q1.
Unknown Executive: Yeah, Mike, when we start commissioning those bonds, you really start very low, at like two megawatts a day, and then it ramps up slowly, then you suddenly do the next step change, which is 10. And by the end of the first quarter, we got to 34 megawatts. So we've. I would say it's a graduated path but not a linear line; it's sort of parabolic.
Michael Parkin: Yes.
Michael Parkin: When we start commissioning those bonds do you really start very low at about two megawatts a day and then it ramps up slowly then you suddenly do the next step changes.
Michael Parkin: And by the end of the first quarter, we got to <unk>.
Michael Parkin: Full megawatts.
Michael Parkin: I would say, it's a graduated path, but not a linear line.
Michael Parkin: Robotics.
Unknown Executive: The real benefit is going to come in from now on.
Michael Parkin: The real benefit is going to come in.
Speaker Change: Go for it.
Speaker Change: Okay.
Speaker Change: That's great.
Speaker Change: And then the <unk>.
Unknown Executive: That's great, and then the timeline on Round Mountain Underground. Just, can you walk us through? Again, you've got some really good illustrations there, but
Speaker Change: Timeline on round Mountain underground just can you walk us through.
Speaker Change: Again, we're here you've got some really good illustration there but.
Unknown Executive: Just trying to think about timing in terms of like, what do you need to get in terms of permits, equipment ordering, that kind of thing. Just how does that all kind of fall together for the next few years?
Speaker Change: Just trying to think about timing in terms of like what do you need to get in terms of permits.
Speaker Change: Equipment ordering that kind of thing just how does that all kind of fall together over the next few years.
Unknown Executive: Yeah, I mean, as we've pointed out, the main focus right now is on starting to drill the main exploration target that we're there for. So we're starting to do that now.
Speaker Change: Yes.
Speaker Change: Pointed out the main focus right now is on starting to trail. The main exploration target that were there for us. So we're starting to do that now.
Speaker Change: In terms of permitting it's actually already from a historic permitting action that's already permitted at the federal level. There is some state permitting that we're going through this year and some final operational permits.
Unknown Executive: In terms of permitting, it's actually already, from a historic permitting action point of view, it's already permitted at the federal level. There is some state permitting that we're going through this year and some final operational permits, but we're progressing those as we go. And we don't, we don't see permitting as the critical path.
Speaker Change: But we're progressing those as we go and we don't we don't see permitting is the critical path.
Unknown Executive: As you can see, our exploration decline is relatively close to the actual exploration target. So once we get it drilled up, it's really just a matter of drifting across, putting the ramps in place, and starting to access the ore body. So it's a pretty, pretty simple ramp-up in this case; we've already got a mill on site, and we're kind of good to go there. So it's just a couple of years of making sure we get the drilling in place, get the studies right so that we can move forward with the right mine plan.
Speaker Change: As you can see our exploration you find it's relatively close to the actual exploration targets. Once we get it drilled up it's really just a matter of drifting across putting the ramps in place and starting to access the ore body. So it's a pretty pretty simple ramp up in this case already got a mill onsite and we're kind of got to go there. So it's just a couple of years.
Speaker Change: Making sure we get the drilling in place get the studies right. So that we can move forward with the right mine plant.
Speaker Change: Okay.
Unknown Executive: And you've had quite a bit of success. Like every quarter, you give us another update, and it just continues to show that it is getting bigger and bigger.
Speaker Change: And you've had quite a bit of success like every quarter you would give us another update just continues to show to be getting bigger and bigger some of the grades are really impressive is there any internal.
Unknown Executive: Some of the grades are really impressive. Is there any internal thought change in terms of what the potential grade is or what your potential tons per day might actually be? Or are you kind of committed based on what you're designing it with? Or is there room for making it bigger and better if it continues to grow like it is?
Speaker Change: What change in terms of potential grade is or what your potential tons per day might actually be or are you kind of stuck committed based on what you are designing it with or is there room for making it bigger and better yes. It is.
Speaker Change: Continues to grow like it is.
Unknown Executive: That's why we're doing the drilling. So that's why we've done this exploration decline. And we need to drill this in a lot more detail so that we can, again, put the right mining method around it. Obviously, you can tell it's going to be some form of bulk mining method. But before we can, we have to drill it before we can get more granular on the total size of the resource, etc.
Speaker Change: That's why we're doing the drilling so that's why we've done this exploration decline that we need to drill a lot more details. So that we can again with the right mining method around it obviously you can tell it's going to be some form of bulk mining method.
But before we can we have to drill it before we can.
Speaker Change: More granular on the total size of the resource et cetera.
Unknown Executive: Okay, but it does seem like it surprised me positively in terms of where the mineralization is in the volume of the water.
Speaker Change: Okay, but it does seem like it surprised you positively in terms of where the mineralization is and the volume.
Unknown Executive: We're obviously excited by some of the results and, you know, in particular this one, what's exciting about it is it's actually outside of the area that we were targeting for mineralization. So that shows us some potential for upside versus our initial vision on this, and to keep everyone with the work.
Speaker Change: Yes.
Speaker Change: We're obviously excited by some of the results.
Speaker Change: That's one way or whats exciting about it is it's actually outbound of the area that we were targeting for mineralization.
Speaker Change: It shows us some potential for upside versus our initial vision on this.
Speaker Change: Keep it along with the work.
Unknown Executive: And then switching over to the Curlew, you know, another exploration project that just keeps, you know, putting up pretty solid results. What are your thoughts there in terms of, I think I asked you last year, but has that changed?
Speaker Change: And then.
Speaker Change: Switching over to curlew.
Speaker Change: Another exploration projects that just keeps.
Speaker Change: Putting up pretty solid results what is your thoughts there in terms of I think I've asked you last year, but.
Unknown Executive: You know, there's obviously an inflationary environment. Is there kind of an internal target that you're able to share with us in terms of how big you'd want to get it? You're sitting at over a million ounces of total resource at year-end 2023. I'm just kind of wondering how big you want to get it before you pull the trigger on a restart?
Speaker Change: Has that changed how you are seeing an inflationary environment.
Speaker Change: Is there kind of an internal target that youre able to share with us in terms of how big you'd want to get it.
Speaker Change: You're sitting at over a million ounces, a total resource at year end 2023, and just kind of wondering.
Speaker Change: How big do you want to get it before you pull the trigger on a restart.
Unknown Executive: Yeah, Mike, it's Paul here. I'll take a crack at that one. I mean, Yeah, like, it's still exploration slash development. As you've seen, the drilling is going well. We have encountered some new zones. The newer zones tend to be higher grade, and we just want to keep going with that to get a better sense of what those higher grades might do for what could ultimately be annual production.
Yes, Mike it's Paul here.
What I mean.
Speaker Change: Yes.
Paul: Install exploration slash development.
Paul: As you've seen the drilling is going well, we have encountered some new zones newer zones tend to be higher grade.
Paul: And we just want to keep going with that to get a better sense of what.
Paul: Those higher grades might you.
Paul: Could ultimately be.
Unknown Executive: This is, you know, a good little line with good grades, and so we're not, we're not rushing it forward. We've been doing some work around my plan optimization thinking as we continue to drill and try to see if we've got, you know, more extensions on these high grades. So we haven't made a target today. We'll see as we go. I'm pretty comfortable.
Paul: Annual production.
Speaker Change: It does.
Speaker Change: Good Little mine.
Speaker Change: Good grades.
Speaker Change: And so we're not we're not rushing forward.
Speaker Change: We've been doing some.
Speaker Change: Some work around mine plan optimization thinking as we continued to trail.
Speaker Change: See if we've got it in a more extensions on these high grades.
Speaker Change: We haven't we don't have a target today.
Speaker Change: Well see as we go pretty.
Unknown Executive: This will be a mine. We're just not sure yet. We want to drill it some more to get a better idea of what it could ultimately be.
Speaker Change: Pretty comfortable this will be our mine.
Speaker Change: We're just not sure yet.
Speaker Change: We want to drill a few more to get a better sense.
Speaker Change: What it could ultimately be.
Unknown Executive: Thank you, Ron. Again, is everything being drilled from the surface there, or do you have any underground platforms that you're working from? It's underground. So in your speaking to kind of the stealth zone, which is putting up some impressive grades, you've got Roadrunner as a target, and then K-5 in kind of a deeper extension of K-2. That's all kind of on the docket for this year.
Speaker Change: Thank you Ryan again, it's everything being drilled from surface there or do you have any underground platforms that youre working from.
Ryan: It's underground.
Ryan: Okay.
Ryan: So and you're speaking to kind of the stealth cell, which is putting out some impressive grades.
Ryan: We've got road runner is at target and then K five.
Ryan: Kind of this deeper extension of K two.
Ryan: It's all kind of on the docket for this year.
Unknown Executive: Yep, we'll keep going with all that. Okay.
Speaker Change: Yes, well keep going with all of that.
Unknown Executive: Okay, super. Looking forward to more results and congrats again, guys.
Speaker Change: Okay looking forward to more results and congrats again guys.
Speaker Change: Thank you Mike.
Joshua Mark Wolfson: The next question comes from the line of Josh Wolfson from RBC Capital Markets. Please go ahead.
Speaker Change: The next question comes from the line of Josh Wolfson from RBC capital markets. Please go ahead.
Joshua Mark Wolfson: I'd acknowledge good free cash generation this quarter when gold prices were lower. When you start to think about capital allocation, I know the team has mentioned debt repayment being a focus, but beyond a couple of maturities near terms, the other debt issues are much longer term. What's the company looking to do with this excess free cash generation, and aside, is there any sort of thought on a buyback reemerging?
Joshua Mark Wolfson: Yeah. Thanks, very much so I acknowledged good free cash flow generation this quarter.
Joshua Mark Wolfson: Gold prices were lower.
Joshua Mark Wolfson: When you start to think about capital allocation I know that Tim has mentioned debt repayment being a focus but there is.
Joshua Mark Wolfson: Beyond the couple of maturities near terms the other debt issues are much longer term whats the company looking to do with this excess free cash generation.
Joshua Mark Wolfson: On our side is there any sort of thought on the buyback emerging thank you.
Unknown Executive: I'll start and maybe hand off to Andrea. Look again, as we said in the call earlier, the focus this year is really around the term loan and paying down the term loan. It's great to see these gold prices where they are today, but again, we have to keep in mind that we just got into it this quarter. Let's see how we go. We're optimistic about the gold price. We see the upside from here.
Speaker Change: Yes, I'll start and maybe hand off Cambria look again as we said.
Speaker Change: And in the call earlier.
Speaker Change: The focus this year is.
Speaker Change: Really around the term loan and pay down the term loan.
Great to see these.
Speaker Change: These gold prices, where they are today.
Speaker Change: But again, we got to keep in mind, we just got underway this quarter.
Speaker Change: Let's see how we go how we're we're optimistic on the gold price.
Unknown Executive: And as you know, Josh, we've got incredible gearing to the gold price, and in the leverage, the deleveraging possibility in the context of where we're training today is pretty powerful. So we want to just get through that. And that is our focus, as it relates to capital. And, you know, we'll continue the discussion as we go through the course of the year.
Speaker Change: We see upside from here and as you know Josh we've got incredible gearing.
Speaker Change: Two the gold price.
Speaker Change: <unk>.
Speaker Change: And the leverage indeed, leveraging possibility in the context of where we're trading today as is.
Speaker Change: It's pretty powerful so we want to let's just get through that and that is our focus.
Speaker Change: Relates to capital.
Speaker Change: And.
Speaker Change: We will continue discussion as we go through the course of the year.
Unknown Executive: Thank you. Looking at the production splits over the remainder of the year, I think on the last call there was some discussion about second half production being weighted a bit higher, which I guess is still reasonable given Manchow's ramp up. But in light of first quarter production being a bit higher, at least than our expectations, how should we think about the first half/second half split?
Speaker Change: Got it thank you.
Speaker Change: Looking at the production splits over the remainder of the year I think on the last call. There was some discussion about second half production being weighted a bit higher.
Speaker Change: Which I guess is still reasonable given the <unk> ramp up but.
Speaker Change: First quarter production being a bit higher at least than that our expectations. How should we think about the first half second half split.
Speaker Change: Yes, Josh it's early in the year I mean, we're obviously happy with Q1 production. So you know at this point our full year guidance range and then we'll see how it goes for the second quarter, but it was.
Unknown Executive: Josh, it's early in the year. I mean, we're obviously happy with Q1 production. So, you know, at this point, our full-year guidance range still stands. And, you know, we'll see how we go through the second quarter.
Unknown Executive: But it was, you know, a little bit weighted. [inaudible] Again, you may recall that we have some seasonality in tax payments, and Q1 tends to be a heavier Tax Payment Recorder. That's when we pay our taxes in Brazil. So, all things being equal, we would expect cash flows to be stronger in the second half. Yeah, we had our tax payment. We paid about $80 million in taxes in the first quarter. The bulk of that was more sort of one-time, one-time.
Speaker Change: A little bit weighted.
Joshua Mark Wolfson: Yes, 49, 51% in the second half.
Joshua Mark Wolfson: That even further.
Speaker Change: Jorge but I would also add though that.
Speaker Change: Certainly from a production point of view from a cash flow second half will be stronger.
Speaker Change: Again, you may recall that we have some seasonality due to the tax payments.
Speaker Change: Q1 tends to be a heavier.
Speaker Change: Cash payments for the quarter.
Speaker Change: When we pay our taxes in Brazil, So all things being equal we would expect cash flow to be stronger in the second half.
Yes, we are.
Speaker Change: And then we paid about $80 million attack in the first quarter.
Speaker Change: The bulk of that with more sort of one time.
Unknown Executive: Thank you. And then lastly, on the Man Show, with some of the noise around, you know, the trucking aspects and some of the results we're waiting to hear back in the courts, what's the sort of thoughts there on how the company ramps up trucking efforts? Is there any risk in those timelines or, or any constraints on what activities are planned?
Speaker Change: Got it thank you.
Speaker Change: Then lastly on unmanned show.
Speaker Change: With some of the noise around.
Speaker Change: The trucking aspects and some of the results we're waiting to hear back in the courts.
Speaker Change: Sort of thoughts there on how the company wraps up trucking FX is there any risk on those timelines are already constraints on what activities are planned.
Unknown Executive: Like, um, you know, Joshua Perlman.
Speaker Change: Okay.
Speaker Change: Josh were permanent and we've done everything by the book According to the Department of transport in Alaska, where trucking every day.
Unknown Executive: and we've done everything by the books according to the Department of Transport in Alaska. We're trucking every day. We're building stockpiles as we complete the mill modification. You know, we're always sensitive to, to,
Speaker Change: We are building stockpiles as we complete the mill modifications.
Speaker Change: Yeah.
Speaker Change: Sure.
Two.
Speaker Change: Yes.
Unknown Executive: Some of the local concerns about trucking, but if you really drill into it and get granular, this is a major highway, and we're a very small percentage of the overall daily volume. We're permitted, we're tracking, and we'll continue. Thank you very much.
Speaker Change: Some of the local.
Speaker Change: Concerns about tracking, but if you really drill into it and get granular. This is a major highway it.
Speaker Change: We're a very small percentage of the overall daily volumes.
Speaker Change: Our permanent are tracking and will continue.
Joshua Mark Wolfson: Great. Thank you very much.
Speaker Change: Great. Thank you very much.
Anita Soni: The next question comes from the line of Anita Soni from CIBC World Markets. Please go ahead.
Speaker Change: The next question comes from the line of any testimony from CIBC World markets. Please go ahead.
Anita Soni: Good morning, Paul, Andrea, and Claude, and thanks for taking my question. And firstly, congratulations on a strong quarter. I just wanted to ask about Tavius. I think in my notes that I had a five-day mill maintenance shutdown. Did that happen in Q1?
Andrea Susan Freeborough: Good morning, Paul Andrea.
Andrea Susan Freeborough: Todd.
Andrea Susan Freeborough: Thanks for taking my question and firstly, congratulations on a strong quarter.
Andrea Susan Freeborough: I just wanted to ask about Tasiast I think in my notes I had a five day mill maintenance shutdown does that happen in Q1.
Unknown Executive: Yes, it did, and we extended it by a day, but Overall, January was a little bit of a lower month, and then we certainly exceeded our expectations in February and March, and then higher production. Okay, and so that so removes the fact that you did indeed meet and exceed the 24k time per day this quarter. I think the final average was 23, but we balanced it with, like I said, the major shutdown in January and then you...
Andrea Susan Freeborough: Yes, it did and we extended it by a day, but.
Andrea Susan Freeborough: Overall January was a little bit of a lower months then.
Andrea Susan Freeborough: So they exceeded our expectations in February and March.
Andrea Susan Freeborough: Production.
Andrea Susan Freeborough: Okay, and so that.
Andrea Susan Freeborough: Removing that you did indeed meet and exceed the 24 tons per day. This quarter then.
I think the final average was 23.
Speaker Change: Got it.
Speaker Change: To be balanced.
Speaker Change: The major shutdown in January and then you need.
Speaker Change: February and March.
Unknown Executive: Yeah, that's the other thing. Yeah, that's what I'm driving at. So, okay. And then I'm just moving to PARIPHATU on grades.
Speaker Change: Yes, as I mentioned, 25%.
Speaker Change: Yes, that's what I'm driving at so Okay, and then just moving to <unk> on grades.
Speaker Change: How do you think that's going to evolve over the course of the year. So like is it still similar in the first.
Unknown Executive: Can we, how do you think that's going to evolve over the course of the year? It's like, is it still similar in the first, you know, the next couple of quarters? I think it's, I think in my notes, I had Q1 to Q3 around the same levels, and then in Q4, there's an uptick.
Speaker Change: In the next couple of quarters, I think and I think in my notes ahead of.
Speaker Change: Q1 to Q3 around the same levels and then in Q4, there's an uptick.
Speaker Change: So there is a slight uptick in Q4, because we start to move back into the other side of it but.
Speaker Change: Sydney.
Unknown Executive: relative to last year, that was the greatest over the first three quarters. Okay, and then slightly higher. Next year, we go back into summer 2023.
Speaker Change: So relative to last year that the greatest.
Speaker Change: The first three quarters of this year.
Speaker Change: Okay and then.
Speaker Change: Yeah.
Speaker Change: Next two we go back into 2020.
Unknown Executive: So that would be 0.4 grams, right, for 2025? That's right, yes, that's right. And then in terms of the PFS on Great Bear, I'm just wondering what size of plant you're targeting. I just want to reiterate, I guess, the thinking was, was it a 10K ton per day plant that you guys are looking at?
Speaker Change: Speak.
Speaker Change: To that point.
Speaker Change: Graham rate for 2021.
Speaker Change: That's right.
Speaker Change: And then in terms of the PFS on great there.
I'm just wondering what size of plant you're targeting I just wanted to.
Speaker Change: Reiterate I guess the thinking was at a 10000 ton per day plant that you guys are looking at.
Unknown Executive: Yeah, we haven't changed that thinking. That's still what we're targeting. (inaudible)
Speaker Change: Yes, we haven't changed that thinking that's still what we're targeting.
Speaker Change: Uh huh.
Unknown Executive: It is spelled P-E-A-R-P-E-A-R-P.
Speaker Change: It is a P a.
Speaker Change: PFS.
Unknown Executive: I'm trying to clarify that on the call here this morning. Yeah, no, that's fine.
Speaker Change: Sorry, sorry.
Speaker Change: Sorry.
Speaker Change: Try to clarify that.
Speaker Change: Here this morning.
Unknown Executive: Yeah, no, that's fine. I actually, you know, I'm, that's kind of what I expected considering, you know, how much time you guys have to bring us into production. The first step is usually the PEA stuff. Okay. That's it for my question. Thank you.
Speaker Change: Yes, no that's fine actually.
Speaker Change: That's kind of what I expected considering how much how much time, you guys have to bring us into production in the first step is usually the PEO.
Speaker Change: Okay.
Speaker Change: That's it for my question. Thank you.
Speaker Change: Thanks.
Tanya M. Jakusconek: The next question comes from the line of Tanya Jakusconek from Scotiabank. Please go ahead.
Speaker Change: The next question comes from the line of Panyard to disconnect from Scotiabank. Please go ahead.
Tanya M. Jakusconek: Good morning everyone. Congratulations on a good quarter and thank you for taking my questions.
Panyard: Good morning, everyone. Congrats on a good quarter and thank you for taking my question I was just going to follow up from Anita question on their pega.
Tanya M. Jakusconek: I was just going to follow up on Anita's question on the PEA on Great Bear, and I think Paul you mentioned it was going to include some of the MNI and some of the inferred. So you know the combination of that is just over six million ounces that you've reported. Should we be thinking that four to five million ounces would be a reasonable assumption to have this PEA support this 10,000 ton a day 500,000 ounce production profile?
Panyard: Great.
Panyard: And I think Paul you mentioned it was going to include some.
Panyard: MNI and some of the inferred.
Panyard: <unk>.
Panyard: The combination of that is just over 6 million ounces.
Panyard: Should we be thinking that four to 5 million ounces would be a reasonable assumption to have that support the 10000 ton a day 500000 ounce production profile.
Unknown Executive: Yeah, that's right. Maybe I'll start.
Panyard: Yes.
Speaker Change: Maybe I'll start well.
Speaker Change: Okay.
Speaker Change: Yes, that's correct.
Unknown Executive: Well, you can jump in if that's correct. The reason we're going again with the PEA is it does allow us to include inferred. The reason we want to include inferred is it allows us to give you some visibility of the underground. So that's the key rationale.
Speaker Change: The reason, we're going again with the PPA is it does allow us to include <unk> and.
Speaker Change: The reason we wanted to include it or is it allows us to give you some visibility of the underground.
Speaker Change: So that's the key rationale but.
Unknown Executive: But obviously, on the other side of the equation... We're limited with what we've been able to drill in the last two years. As you said, the total of all of that, M.I. and I are about six, and with any contained resource, we're going to have a percentage of that gets put into my planning at this point in time. We, I think on the call, we said a subset, but really it's most of that. And Will, maybe you can elaborate, but I think Tanya is exactly right.
Speaker Change: Obviously.
Speaker Change: On the other side of the equation.
Speaker Change: We're on unlimited.
Speaker Change: What we've been able to drill in the last two years.
Speaker Change: As you said the total of all of that is about six.
Speaker Change: And with any contained resource we're going to have.
Speaker Change: Our percentage of that that gets put into our mine planning at this point in time.
Speaker Change: I think all of US a call we set a subset, but really it's most of that well maybe you can elaborate but I think Ken yes exactly.
Unknown Executive: Unknown Speaker, Unknown Attendee, Unknown Shareholder, Unknown Shareholder, Unknown Unknown Speaker, Unknown Shareholder, Unknown Shareholder, Unknown Shareholder,
Ken: Exactly yes, we don't know the exact number but clearly based on your question I understand that not theres going to be some areas on the periphery of the current drilling and the resource that we need to drill further and expand before it pulls into a mine plan and justifies continuation of the ramp.
Ken: So it will be that subset as Paul noted that is most of the ounces, we're still doing the work and obviously when we released it.
Ken: You'll get the idea of exactly how many.
Ken: Allison's theyre going to be in there.
Ken: But it will be box, what you've seen on the resource tab.
Unknown Executive: Okay, now I got that like so probably more than five to support a ten-year mine life at that 500,000 ounces open pit underground.
Speaker Change: Okay, I got that right so probably.
Speaker Change: More than five to support a 10 year mine life at that 500000 ounces.
Speaker Change: In pit underground.
Unknown Executive: Again, I am still doing the work.
Speaker Change: Again, it's still during the work.
Speaker Change: Okay.
Unknown Executive: Okay, great. Thank you for that.
Speaker Change: Okay, great. Thanks, Thank you for that.
Speaker Change: Maybe if I could add close to just comment on that.
Tanya M. Jakusconek: And that maybe I could ask Claude to just comment on just the, you know, you had good costs, you know, this in Q1, can you just go through your input costs? And just remind me, you know, where you're seeing maybe some easing and inflationary pressures or where things are still sticky to your cost profile. So I can try and gauge how obviously the high gold price impacts your royalties. I mean, aside from that, all of the other inputs, labor, consumables, fuel, etc., where you're seeing some easing and where you're seeing some sticky inflation pressure.
Speaker Change: Yes.
Speaker Change: You had good costs.
Speaker Change: In Q1 can you just go through your input costs and <unk>.
Speaker Change: Find me.
Speaker Change: Where youre seeing maybe from yearend.
Speaker Change: Inflationary pressures, where things are still sticky through your cost profile. So I can try and Jeff obviously high bulk price impact your royalties I mean aside from that all of the other input labor consumables fuel et cetera, where youre seeing some easing and where you're seeing some sticky inflation pressures.
Unknown Executive: I think so. I'll start off, Tanya, with labor across the board relatively flat relative to last year. We have some longer-term agreements with Employee Groups for the next two to three years, where we're seeing a little bit of pressure. The commodities are kind of split for some strange reason. Lime across the board is. Chris Lichtenheldt, William Dunford, Kinross Gold Corp. So, across the board, our quantities are relatively flat, except for this anomaly of Lyme, and then power costs are relatively flat, other than in Alaska, where we're seeing significant pressure on power costs. Again, because those plants are carbon generated plants in the state.
Speaker Change: I think so I'll start off and then.
Speaker Change: With labor.
Speaker Change: Across the board is relative.
Speaker Change: Flat.
Speaker Change: Relative to last year.
Speaker Change: We have some opportune agreements with.
Speaker Change: Employee groups.
Speaker Change: For the next two to three years.
Speaker Change: Where we're seeing a little bit of pressure.
Speaker Change: <unk> is a kind of split.
Speaker Change: For some strange reason lime across borders.
Speaker Change: But the.
Speaker Change: Mitchell process.
Speaker Change: Sure.
Speaker Change: Grinding media.
Speaker Change: <unk> has come back down a little bit which strength given the challenges.
Speaker Change: But.
Speaker Change: So across the board our quantities are relatively flat except for this anomaly offline.
Speaker Change: And then power costs are relatively flat other than <unk>.
Speaker Change: Alaska, where we're seeing a significant.
Speaker Change: Sure.
Speaker Change: Yeah.
Speaker Change: Again, because those plants are.
Speaker Change: Our carbon generated bumps.
Speaker Change: Stay tuned.
Speaker Change: Basically the cost saves.
Unknown Executive: I think overall. Overall, Tanya, I would just add, you know, we talked about sort of a three to five percent inflation factor over our average cost for 2023. And, you know, that still stands today, but early in the year.
Speaker Change: I'd say overall.
Speaker Change: Overall, yes, I would just add we talked about just scared about 3% to 5% inflation factor.
However, our average cost for 2023.
Speaker Change: Yes.
Speaker Change: But early in the year.
Unknown Executive: Yeah, and maybe just on cyanide, some companies are seeing pressure on cyanide prices. Are you seeing that as well?
Speaker Change: Yeah, and maybe just combine some companies are seeing pressure on cyanide pricing are you seeing that as well.
Unknown Executive: For most of our portfolio, we have some long-term deals that we're really capitalizing on. Other than that, it's relatively flat quarter over quarter.
Speaker Change: So for the most of our portfolio we have some long term deals that were really capitalizing on.
Speaker Change: But yes.
Speaker Change: Yes, other than that it's relatively flat quarter over quarter.
Unknown Executive: Okay, well, that's just a hair, so these are not going up. And then my final question, if I can, to Paul, elections in Mauritania are coming up. Can you just talk a little bit about what you're hearing and if there are any impacts on your agreement in place, royalties, taxation, et cetera, that would be helpful given everything else going on around the world.
Speaker Change: Okay.
Speaker Change: Sure.
Speaker Change: Im not going up.
Speaker Change: And then my final question, if I can to call.
Speaker Change: Collections in Mauritania.
Speaker Change: Can you just talk a little bit about what.
Speaker Change: What youre hearing and if any impact to your agreement in place royalties taxation et cetera.
Speaker Change: That would be helpful given everything else going on around the world.
Speaker Change: Sure.
Unknown Executive: Sure. Well, I'd start by saying our government relations in Mauritania are outstanding. President Goswami is running for reelection. His platform has been and continues to be around strengthening the economy, increasing foreign investment, and We've had really good interactions with him. So again, I think given the state of play, I don't want to get into predicting election outcomes, but I think it should be a relatively straightforward process and President Goswami garners a lot of support in the country.
Speaker Change: Look I'd just start by saying our government relations.
Speaker Change: Mauritania are outstanding.
Speaker Change: Yes, President Goswami is running for reelection.
Speaker Change: Because platform previously and continues to be around strengthening the economy, increasing foreign investment.
Speaker Change: We've had really good interactions with him.
Speaker Change: So.
Speaker Change: Again, I think given the state of play.
Speaker Change: I don't want to get into predicting Alec election outcomes, but.
Speaker Change: I think.
Speaker Change: I think it should be a relatively straightforward process.
Speaker Change: President <unk>.
Speaker Change: Garners a lot of support in the country.
Unknown Executive: We've had no indications or no... No suggestions that are changing anything to do with our taxes or royalties. I would say that You know, we are in this year 2024. I'm going to be in an income tax payable position. And I think that's, you know, ironically, I think that's a, I welcome that as a, you know, being a foreign investor in the company. We've had a lot of capital, a lot of shelter over the years, as we've been expanding, but with gold prices where they are today, we're both paying income tax. So things are going really well in Mauritania, at the mine and with the government, and I believe the election should be relatively straightforward.
Speaker Change: We've had no indications or no.
Speaker Change: No suggestions on changing anything to do with taxes and royalties.
Speaker Change: I would say that.
Speaker Change: We are this year 2024.
Speaker Change: Going to be any income tax payable position.
Speaker Change: And I think thats.
Speaker Change: Okay.
Speaker Change: Ironically I think thats.
Speaker Change: I welcome that.
Speaker Change: Being a foreign investor in the company, we tried a lot of capital a lot of shorter over the years as we've been expanding but with gold prices, where they are today, where we're about <unk>.
Speaker Change: Income tax so things are going really well in Mauritania.
Speaker Change: At the mine with the government.
Speaker Change: I believe the election should be relatively straightforward.
Unknown Executive: And I think you have a sliding royalty, right? If I can remember correctly, so they participate on the
Speaker Change: Yeah, and I think given sliding royalty right, Joe if I can remember correctly, so they participate on the upside.
Unknown Executive: Correct, exactly. That's great. Thank you so much for taking my questions and congratulations.
Speaker Change: Correct exactly.
Speaker Change: Okay. That's great. Thank you so much for taking my.
Speaker Change: My questions and congrats on a good forehead.
Speaker Change: Thank you.
Operator: As there are no further questions at this time, this concludes our Q&A session. I would like to turn the call over to Paul for a brief closing remark.
Speaker Change: As there are no further questions at this time. This concludes our Q&A session I would like to turn the call over back to Paul for brief closing remarks.
Unknown Executive: Thanks, operator. Thank you, everyone, for calling in, and we look forward to catching up with you in person in the coming weeks and months.
Paul: Thanks, operator.
Paul: Thank you everyone.
Paul: Calling in and we look forward to.
Paul: Catching up with you in person in the coming weeks and months.
Operator: Ladies and gentlemen, this concludes today's conference call. Thank you for your participation. You may now disconnect. Please wait; the conference will begin shortly.
Speaker Change: Ladies and gentlemen, this concludes today's conference call. Thank you for your participation you may now disconnect.
Speaker Change: Please wait the conference will begin shortly.
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