Q1 2024 Aya Gold & Silver Inc Earnings Call
Okay.
Operator: Good day, and thank you for standing by. Welcome to Aya Gold & Silver's first quarter 2024 results conference call. At this time, all participants are in a listen-only mode. After the CEO's presentation, there will be a question and answer session. To ask a question during the session, you will need to press star 11 on your telephone. You will then hear an automated message advising that your hand is raised. To withdraw your question, please press star 1 1 again. Please be advised that today's conference is being recorded. I would now like to turn the call over to Ruth Hanna, Manager of Investor Relations and Communications at Aya. Please go ahead.
Good day, and thank you first standing by and welcome to all your Golden Silver's first quarter 2024 results conference call.
Speaker Change: At this time all participants are in a listen only mode. After the Ceos presentation. There will be a question and answer session to ask a question. During the session you will need to press star one one on your telephone you will then hear an automated message advising your hand is raised to withdraw your question. Please.
Speaker Change: Press Star one one again.
Speaker Change: Please be advised that today's conference is being recorded I would now.
Speaker Change: I'd like to turn the call over to Ruth Hanna manager of Investor Relations and communications of <unk>. Please go ahead.
Ruth Hanna: Thank you, Operator. Good morning, everyone, and welcome to AYA's first quarter 2024 results conference call. My name is Ruth Hanna, and I'm dialing in with the AYA team from Montreal and Marrakech this morning. On the call today, we have Benoit Lassalle, President and CEO, Hugo Landry-Tolsuc, CFO, Raphael Beaudoin, Vice President of Operations, and David Lalonde, Head of Exploration. We will finish today's event with a Q&A session with the team. Please contact our IR team directly with any follow-up questions that are not addressed during the call.
Speaker Change: Thank you operator, good morning, everyone and welcome to I S first quarter 2024 results conference call.
My name is really kinda on I'm dialing in with the IR team from Montreal I'm Mark asked this morning on the call today, we have the more lifestyle president and CEO. They go along the way towards six CFO Rafael Boudoir Vice President operations.
Speaker Change: David <unk> head of exploration.
Speaker Change: He will finish today's event with a Q&A session with the team. Please contact our IR team directly with any follow up questions that are not address during the call.
Ruth Hanna: Before we begin, I'd like to remind listeners that today's event will contain forward-looking statements that involve risks and uncertainties that could cause actual results to differ materially from those in the forward-looking statements. Details of the forward-looking statements are contained in our May 15th news release as well as on CDAR Plus and on www.ayagoldsilver.com. With that, I would like to turn the conference over to Aya's Benoit, please go ahead.
Speaker Change: Before we begin I'd like to remind listeners that today's event will contain forward looking statements that involve risks and uncertainties that could cause actual results to differ materially from those in the forward looking statements.
Speaker Change: Details of the forward looking statements are contained in our may 15th news release, as well as all state or place them don't double different definitely iron gold silver Dot com.
Speaker Change: With that I would like to turn the conference over to <unk>, President and C Open Melissa.
Operator: Thank you, Operator. Thank you, Ruth.
Speaker Change: Please go ahead thank.
Melissa: Thank you operator, and thank you Ruth.
Benoit Lassalle: Thank you everyone for being on the call this morning. As we indicated last time, 2024 is a transition year into a new Aya with a new production profile. So let me take you through some of the highlights of the quarter, so I will be on slide number three of the presentation that you have. So, as the first milestone of the quarter, which I think is probably one of the most important ones, we've continued advancing this Günder mine expansion on plan.
Speaker Change: Thank you everyone for being on the call. This morning.
Speaker Change: As we indicated last time at 'twenty 'twenty four is a transition year into a new.
Speaker Change: With the new production profile. So let me take you through some of the highlights of the quarter. So I will be on slide number three of the presentation that you that you have.
Speaker Change: <unk>.
Speaker Change: As the first milestone of the quarter, which I think is probably one of the most important one we've continued advancing disciplined their main expansion mine expansion to plan.
Benoit Lassalle: We are on time and we are on budget for commissioning in Q2 2024, which means in June of 2024. An important element, we had indicated previously that we were aiming for a stockpile of 260,000 tons of ore to start commissioning, and I'm pleased to say that at the end of the quarter, we are at 275,000 tons of ore for commissioning of the new mill. Another milestone, we've delivered a steady quarter that provides runway for delivering objectives and guidance.
Speaker Change: We are in time and we are on budget for commissioning in Q2, 2024, which means in June of 2024 and important element. We had indicated previously that we were aiming for a stockpile of 260000 tonne of ore to start decommissioning and I'm pleased to say that.
Speaker Change: At the end of the quarter, we are at 275000 tonnes of ore for commissioning of the new mill.
Speaker Change: Another milestone we've delivered a steady quarter. It provides urine wafer delivering objectives and guidance, we are maintaining guidance in the quarter, we produced 366000.
Benoit Lassalle: We are maintaining guidance. In the quarter, we produced 366,000 ounces, which is lower than what some of you expected but is in line with our planning because we knew that we were getting into lower grade material. In the benches of the open pit mine, we had to strip the first two benches, which we knew were lower grade and were oxidized. We also were getting into the underground stope extension, and in the stope extension, we had seen that there was lower grade material, but we wanted to get that material out before we started backfilling those stopes. So, and in addition, there's always some, you know, sequencing.
Speaker Change: One ounces, which is lower than what some of you expected but is in line with our planning because we knew that we were getting into lower grade material in the benches of the open pit mine, we at the strip.
Speaker Change: First two benches, which we knew were lower grade and were oxidize.
Speaker Change: We also were getting into the underground stope extension and in the stope extension.
Speaker Change: <unk> seen that there was lower grade material, but we wanted to get that material out before we start back filling those stopes. So.
Speaker Change: And in addition, there is always some sequencing.
Benoit Lassalle: The revenue for the quarter stands at $5.1 million, clearly lower than anticipated, but we know that we took 157,000 ounces of silver that we have now in inventory, and this is why we say that there's a temporary increase in silver concentrate, and we pushed those over to Q2, where we were able to get a $4 an ounce improvement in the selling price. Hence, there was a net loss for the quarter of $2.5 million, and which also has directly affected our cash costs because of the lower production and the lower sale.
Speaker Change: The revenue for the quarter.
Speaker Change: That is $5 1 million clearly lower than anticipated, but we know that we took 157000 ounces of silver that we have now in inventory and this is why we say that there is a temporary increase in silver concentrate and we push those over to <unk>.
Speaker Change: Q2, where we were able to get $4.
Speaker Change: <unk> improvement on the selling price.
And there is a net loss for the quarter, a $2 5 million and which also directly affected our cash cost because of the lower production in the lower sale. It has directly affected our cash cost which is at $20 31, which is not representative.
Benoit Lassalle: It has directly affected our cash costs, which are at $20.31, which is not representative of the cash costs of this company going forward, nor is it a question of the denominator in the quarter. As well, we end the quarter with improved liquidity. We closed the quarter with $111 million in cash and cash equivalents. You know we're reporting in U.S. dollars. So $111 million, which is a major improvement from the previous quarter. We threw down an additional $25 million on our EBRD loan for a total of $85 million.
Speaker Change: The cash cost of this company going forward nor.
Speaker Change: It's a question of denominator in the quarter as.
Speaker Change: As well we ended the quarter with improved liquidity, we closed the quarter with $111 million in cash and cash equivalents were reporting in U S dollars, so $111 million, which is a major improvement from the previous quarters, we drew down in <unk>.
Speaker Change: <unk> hundred $25 million on our <unk> loan.
Speaker Change: A total of $85 million.
Benoit Lassalle: We won a prize on the EBRD loan for Africa as one of the top natural resource loans in our industry. We finished the quarter with a strengthened portfolio, and we delivered an updated Boumadine Mineral Resource on April 15th of this year, which is a very strong baseline for continued development and expansion. Furthermore, we've also increased the land package at Boumadine. Currently, we have increased our land package by 346%. Moving on to slide number four.
Speaker Change: One last yesterday.
Speaker Change: Price on the <unk> loan.
For Africa as one of the top natural resource alone in our industry.
Speaker Change: We finished the quarter with a strengthened portfolio.
Speaker Change: Delivered an updated mineral resource.
Speaker Change: On April 15.
Speaker Change: This year.
Speaker Change: And which is a very strong baseline for continued development and expansion. Furthermore, we've also increased the land package.
Speaker Change: <unk> currently we've increased our land package by 346%.
Speaker Change: Moving on to slide number four.
Benoit Lassalle: It's extremely important for us to tell you and to reiterate that we are maintaining guidance for the year. Though the production for Q1 is at 366,000 ounces, we're maintaining guidance between 2.6 and 3.2. We're maintaining our cash cost guidance between 13 and 14.5, and the average grade process between 250 and 240 regardless of the fact that in Q1 we were lower because we knew, and I explained why we were lower, and it was planned accordingly.
Speaker Change: It's extremely important for us to tell you end to end.
Speaker Change: Reiterate that we are maintaining guidance for the year.
Speaker Change: The production for Q1.
Speaker Change: Is that 366000 ounces, we're maintaining guidance between two six and $3 two were maintaining our cash cost guidance between 13, and 14 and a half and the average grade process between $250 and 240, regardless of the fact that in Q1 we.
Speaker Change: Were lower because we knew and I explained why we are lower than it was plan accordingly, the mill recoveries were at $81 eight in this quarter lower than what we normally see and this is because of oxidized material coming from the open pit the oxidized material and with our.
Benoit Lassalle: The mill recoveries were at 81.8 in this quarter, lower than what we normally see, and this is because of oxidized material coming from the open pit. The oxidized material with our current two plants doesn't get the same recovery.
Speaker Change: Current two plants doesn't get the same recovery.
Benoit Lassalle: In the new plant, it will get the same recovery of the high 80s or low 90s, but in the current two plants, it doesn't, so this is why this quarter we have a lower recovery. On the other hand, we have a very good availability KPI. The two plants were available at 96%, therefore, extremely high KPIs on availability. Moving on to slide number five, just a quick chart on tracking the last five quarters.
Speaker Change: And the new plant it will get the same recovery of the high <unk> or low ninety's, but in the current two plant. It doesn't so this is why this quarter, we have a lower recovery.
Speaker Change: On the other hand, we have a very good availability <unk> API to the two plants were available at 96%.
Speaker Change: Therefore extremely high kpis on availability.
Speaker Change: Moving on to slide number five just a quick quick charge on.
Speaker Change: And tracking the alliance.
Benoit Lassalle: So you see that the silver production is lower this quarter, but as we indicated 2024 is a transition year into a very strong 2025, when the new plant will be in production. Same thing when you look at the bottom left, when you look at grade 173, this is the reality of what we mined this quarter, but it does not represent the long-term grade of this project. Mill recoveries. I just explained it to you.
Speaker Change: Five quarters. So you see the silver production is lower this quarter, but as we indicated 2024 is a transition year into a very strong 2025 year, where the new plant will be in production.
Speaker Change: Same thing when you look at the bottom left when you look at grade at 173 this is where.
This is the reality of what we model in this quarter, but it does not represent the long term grade of this project.
Benoit Lassalle: The reason we lost five points was because of the oxidized material. Something that will not, you know, happen again as we have taken off the two benches, the top benches of the open pit, and now we're into fresh rock. And the ton process, that is very, very good, and that's an extremely good point. The two plants are running extremely well, and we were running almost 900 tons a day. You remember that when we took over four years ago, we were running at two three hundred tons a day, and now we're running above nameplate capacity, even above 15% nameplate capacity.
Speaker Change: Mill recoveries I just explained it to you and the reason we lost five points is because of the oxidized material as such.
Speaker Change: Thing that will not.
Speaker Change: Happen again, as we have taken off the two benches the top benches of the open pit and now we're into fresh rock.
Speaker Change: And then Tun process that is very very good and that is an extremely good point there too.
Speaker Change: Two plants are running extremely well and we were running almost at 900 tons. A day you remember that when we took over four years ago. We were running at 200 300 tons a day and now we're running above nameplate capacity, even above 15% of nameplate capacity. So this is a very strong kpis.
Moving to page six.
Benoit Lassalle: So this is a very strong KPI. Cash flow from operation. Clearly, because of the fact that we've delayed revenue and that we produce a little bit less than anticipated, we have a negative cash flow. However, the $10 million is overstated as we also reduced the payables by $9 million. So the operating cash flow from activity, if you remove the payables, is more like negative $1 million. The gross margin is affected because of the low revenue, which is a function of the fact that we pushed over 157,000 ounces of silver to Q2. However, cost of sale is in line with the revenue that we've recognized, and the cash cost, as indicated, is a function of the denominator, and does not represent the cash costs going forward.
Speaker Change: Cash flow from operation clearly because of the fact that we've delayed the revenue and that we produce a little bit less than <unk>.
Speaker Change: Dissipated, we have a negative cash flow however.
Speaker Change: The $10 million is overstated as we also reduced the payable by $9 million. So the operating cash flow from activity. If you remove the payables is more like negative $1 million. The gross margin is affected because of the low revenue, which is a function of the fact that we pushed over 100.
Speaker Change: <unk> 57000 ounces of silver to Q2.
Speaker Change: Cost of sale is in line with the revenue that we recognize and the cash cost is indicated as a function of the denominator and does not represent the cash cost going forward.
Benoit Lassalle: Moving to, on slide number eight, this Gündar expansion. We've been showing you monthly videos of the expansion. You can track it, you can see it.
Speaker Change: Moving to.
Speaker Change: As slide number eight.
Speaker Change: There is good in their expansion.
Speaker Change: We've been showing you monthly videos. The expansion you can track it you can see it and the expansion is moving smoothly.
Benoit Lassalle: The expansion is moving smoothly. I'm very happy to say again at the end of this quarter that we are on budget and that we will be completing the planned expansion by the end of June before we get into commissioning, and that we will be on budget as all the items have been secured, all the equipment is on site, and now it's really a matter of construction. The underground development is on track as well.
Speaker Change: Very happy to say it again at the end of this quarter that we are on budget and that we will be completing the plant expansion by the end of June before we get into commissioning and that we will be on budget as all the items have been secured all of the equipment is on site.
Speaker Change: Now, it's really a matter of construction the underground development is on track as well 94% of the laterite. The lateral development is done and 83% of the vertical development is completed the vertical development is not the one that's needed for decommissioning, it's really more of the.
Benoit Lassalle: 94% of the lateral development is done, and 83% of the vertical development is completed. Though the vertical development is not the one that's needed for the commissioning, it's really more the lateral development. The important items that can always affect your timing, the power line, Merrill Crowe, Silver Room, all of that is on time and on budget.
Speaker Change: Lateral development.
Speaker Change: Prudently.
Important items that can always affect your timing the power line Merrill Crowe silver room.
Speaker Change: All of that is on time and on budget. It will all be completed in the next few weeks.
Benoit Lassalle: It will all be completed in the next few weeks. The haulage and the open pit roads, you've seen those in the videos. They're really looking very good.
Speaker Change: The haulage in the open pit road, you've seen those under videos there really looking very good there well done and our functional at the moment and the garage you will see that hopefully in the next video we have a beautiful underground garage that is complete and has been completed and is.
Benoit Lassalle: They're well done and are functional at the moment. And the garage, you will hopefully see that in the next video. We have a beautiful underground garage that is complete and has been completed and is, you know, very well built. So all the civil and the concrete work is completed. The cyanidation tanks are there.
Speaker Change: Very well built so the.
Speaker Change: All of the civil and the concrete work is completed the <unk> tanks are there the electrical substation you will see warehoused and workshop had been completed so we are coming to the end of the construction in the next few weeks and getting into commissioning.
Benoit Lassalle: The electrical substation, you will see, the warehouse, and the workshop have been completed. So we are coming to the end of the construction in the next few weeks and getting into commissioning. Another element is that we've gone through a fourth audit by EBRD on all of our ESG for the loan, the $100 million loan that we have. So you see this on page nine. You see one of the water reservoirs.
Speaker Change: Another element is we've been through a fourth.
Speaker Change: By <unk> on all of our ESG for their loan to $100 million loan that we have so you see this on page nine you see one of the water reservoir.
Benoit Lassalle: You see the 87 percent completion of the plant, the electrical substation. And we have therefore completed the audit with EBRD. And for a fourth time, we are in compliance with all the requirements. Moving to slide 10 in the presentation, it's about exploration. Aya will drill 145 000 meters on Boumadine and on Sgoundère, mainly obviously on Boumadine, and at the end of the quarter of a program of 15 000 meters at Sgoundère's main zone, we have 8 700 meters completed.
Speaker Change: See the 87% completion of the plant the electrical substation and we have therefore completed the audit with <unk> and for a fourth time, we are in we're in compliance with all their requirements.
Speaker Change: Moving to slide 10 in the presentation.
Speaker Change: It's about exploration.
Speaker Change: In 2024 will be drilling 145000 meters and <unk> theyre, mainly obviously undue medicine.
Speaker Change: And at the end of the quarter.
Our program of 15000 meters as their main zone, we have 8700 meters completed.
Benoit Lassalle: We have between five and six drills turning at Sgoundère at all times, and on the Sgoundère regional, we've completed 3 000 meters out of 10 000 meters. There, we're working with the team on identifying targets and testing some targets on the Sgoundère regional, whereas at the Sgoundère mine, we're drilling the main structure which we are mining now and some very close structures that are to the east and to the south of the current mine. At Boumeddine, where we're drilling, we have a program of 120,000 meters. At the end of the quarter, we were 11,332 meters done.
We have five drills between five and six drills, turning as when they're at all time and underscoring their regional we've completed 3000 meters out of 10000 meters there.
Speaker Change: Working with the team on identifying targets and testing some targets on this going there regional whereas under us groom their mind, we're drilling the main.
Speaker Change: Structure, which we are mining now and some very close structures that are to the east into the south of the current mine.
Benoit Lassalle: That 120,000 meters, you recall, is divided into 60,000 meters to expand the 4.2-kilometer strike that was part of the resource update that we published on April 15. That is ongoing, and there are 60,000 meters on new targets. That is also ongoing.
Speaker Change: Boumediene where were drilling we have a program of 120000 meters at the end of the quarter, we were 11332 meters done.
Speaker Change: And at that 120000 meters, you'll recall is divided into 60000 meters to expand a 4.2 kilometers strike that was part of the resource update that we published on April 15 that is ongoing and there is 60000 meters.
Speaker Change: New targets that is also ongoing and.
Benoit Lassalle: Furthermore, the mobile MT geophysics is probably 80% completed at Boumadine, and it's just been completed at Tirsdè. Moving to page 11, just in the quarter, we had again some very strong drill results at the main zone at Sgoundère. We are 50% completed, as I just said, and some of the results, especially the ones getting closer to the granite at the bottom of the structure, we are hitting some very, very nice zones of a thousand grams per tonne over 13 meters and 322 grams per tonne over 17 meters.
Speaker Change: Furthermore, the mobile empty geophysics is probably 80% completed at <unk>.
Speaker Change: And it's just been completed.
Speaker Change: Yeah.
Speaker Change: Yes.
Speaker Change: Moving to page 11, just in the quarter, we had some again very strong drill results and the main zone at <unk>.
Speaker Change: We are 50% completed as I, just said and some of the results, especially the ones getting closer to the grant at the bottom of the structure. We are hitting some very very nice zone.
Speaker Change: Gram per tonne over 30 meters and 322 Gram per tonne over 70 meters. So again. This is ongoing there'll be more results. The drilling is going well and we have four underground drills that are turning 24, seven and we intend to have all of this is driven.
Benoit Lassalle: So again, this is ongoing, there'll be more results, the drilling is going well. We have four underground drills that are turning 24-7, and we intend to have all of these drills in the coming months. On page 12, you see a review of the Boumadin permit. That's the first permit. That's the original permit that you see on page 12.
Speaker Change: The coming months.
Speaker Change: Okay.
Speaker Change: On page 12 is a.
Review of the <unk>.
Speaker Change: Permit that's the first permit that's the original permit that you see on page 12, that's the one that.
Benoit Lassalle: That's the one that we acquired in 2012, way before our time. And that's the one we did the geophysics on 18 months ago and understood that there was a mineralized zone which we drilled. And that's on that mineralized zone that we put out a resource update on. So, as we indicated, it's a 120,000 meter drill program. As of now, a year to date, we're 27,000 meters done. At the end of the quarter, we were 15,000 meters done.
Speaker Change: We acquired in 2012 way before our time.
Speaker Change: The one we did the geophysics 18 months ago and understood that there was a and mineralized zone, which we've drilled and thats that mineralized zone that we've put out their resource update so as we indicated.
120000 meter drill program as of now year to date were 27000 meter done at the end of the quarter. We were 15000 meter done and just recently this week, we put out some results. So it's post the end of the quarter, but it's within.
Benoit Lassalle: And just recently, this week, we put out some results. So it's post the end of the quarter, but it's within this week where we announced that we've extended the mineralized zone from 4.2 kilometers up to 5 kilometers. You recall that this is a geophysical anomaly that we see at surface at six kilometers.
Speaker Change: This week, where we've announced that we.
Speaker Change: And at the mineralized zone from $4 two kilometer up to five kilometer you'll recall that this is a geo physics anomaly that we see at surface on six kilometer. We're also seeing it on surface, but not with the <unk>.
Benoit Lassalle: We're also seeing it on the surface, but not with the geophysics, to go all the way to the north of the border and going south as well. So this is our boomerang project, and it's continuing. We're drilling on it, and we've added many, many new permits to increase the footprint of this district that we're currently developing. The MET tests were announced last year.
Speaker Change: Geophysics to go all the way to the north of the border and growing south as well. So this is.
Speaker Change: As our <unk> project and its continuing we're drilling on it and we've added many many new permits to increase the footprint of this district that we're currently developing.
Benoit Lassalle: Nothing new except that we're continuing the test, and we're continuing the work to identify what method will be used in the processing, but that's going to come much later in the year. On page 13, you have just some recent highlights of the drill results. Again, we saw some very good grades at Boumadine, a very good gold grade, 6g per tonne, 116g per tonne silver, zinc, lead, and copper. This project is polymetallic, and the results that we showed you at the beginning of the week are extremely strong results.
Speaker Change: The.
Speaker Change: The met test were announced last year, nothing new except that we're continuing to test and we're continuing to work for.
Speaker Change: Four two to identify with the method will be used in the processing, but that's going to come much later in the year.
Speaker Change: Yes.
Speaker Change: Page 13, you have just some recent.
Speaker Change: Highlights of the drill results again seeing some very good grade at <unk> in a very good gold grade.
Speaker Change: Six gram per tonne 116 gram per ton silver.
Speaker Change: Zinc lead and copper.
Speaker Change: This project is fully metallic and the results that we showed you at the beginning of the week are extremely strong results.
Benoit Lassalle: Moving to pages 14 and 15, just a quick update of the resource that we put out on April 15. We had indicated an inferred resource. The summary is on page 15. What we were showing is, in silver equivalent, it's 352 million ounces of silver equivalent. In gold equivalent, it's 4.1 million ounces of gold equivalent.
Speaker Change: Moving to page 14, and 15, just a quick update of the resource that we put out that we put out on April 15.
Speaker Change: We had indicated an inferred resource the summary is on page 58.
Speaker Change: We were showing is in silver equivalent at 352 million ounces and silver equivalent and gold equivalent it's 4.1 million ounces of gold equivalent but at the end of the day. If you look at the metal per se.
Benoit Lassalle: But at the end of the day, if you look at the metal per se, It's 72 million ounces of silver, and it's 2 million ounces of gold in the actual metal, all of that at very good grades. It's a strong project where we will be reporting more results as we keep drilling. On April 15th, we put out the first resource from our team, which is the beginning of many more updates to come in the months and years to come. Closing on the EHG and on page 16.
Speaker Change: It's seven 2 million ounces of silver and.
Speaker Change: 2 million ounces of gold and the actual metal all of that at very good grade. So it's a strong project, we will be reporting more results as we keep drilling but that the on April 15th we put out the first resource from our team which is the beginning.
Speaker Change: Of many more updates to come in the months and years to come.
Benoit Lassalle: As you all know, we're extremely involved locally. The EHG values are really within our values at AYA, and hence the reason why we were able to obtain that $100 million funding with EBRD. So on health and safety, we had four small incidents this quarter. We had none last quarter.
Speaker Change: Closing on the ESG and on page 16, as you all know we're extremely involved in locally the ESG values are really.
Speaker Change: And within our values at IMS.
Speaker Change: Hence the reason, where we were able to obtain that $100 million.
Speaker Change: Funding with <unk>.
Speaker Change: So we have on health and safety, we have four small incidents this quarter, we had none last quarter for small incidents this quarter with subcontractors.
Benoit Lassalle: Four small incidents this quarter with subcontractors where we had a few lost days. On training, though, we've increased the number of hours by 150% to almost 3,000 hours of health and safety training this quarter. If you are part of our LinkedIn group, you will see pictures of health and safety and all the programs that we have in place because we post regularly about what is being done on site at the EBRD CTF milestones.
Speaker Change: Where we had a few lost days.
Speaker Change: On the training, though we've increased the number of hours by 150% to almost 3000 hours of the health and safety training.
Speaker Change: In the quarter.
Speaker Change: If you are part of our Linkedin and our group you will see pictures of the health and safety and all the programs that we have in place because we do posed a regularly.
Speaker Change: It is being done on site.
Benoit Lassalle: We're 90% completed for the second milestone. You recall that this gives us a rate reduction, an interest rate reduction on our CTF funding. So we're almost there. We should be there in the next quarter on community development. We have launched classrooms for children and in some of the villages, for literacy classes and math classes, and we have very good participation from the local communities. We also organize health clinics. So we had audiology clinics, mobile clinics, in two of the villages around the mine.
Speaker Change: On the <unk> Cts milestones, we're 90% completed for the second milestone you'll recall that this gives us a rate reduction in interest rate reduction on our CTF funding. So we're almost there we should be there in the next quarter.
Speaker Change: Sure.
Speaker Change: Community development, we have launch.
Speaker Change: Classrooms.
For children and for some of the villages on literacy classes on math classes.
Speaker Change: And we have very good participation from the local communities. We also organized health clinics.
Speaker Change: So we had our geology to the next mobile Phoenix in two of the villages around the mine and we also have agriculture, which you know is a E value to IAA and we do help the local population with agriculture.
Benoit Lassalle: And we also have agriculture, which you know is a key value of Aya. And we do help the local population with agriculture. In the region where we are, saffron is what is being cultivated.
Speaker Change: In the region, where we are it is SAP brand that is being cultivated and we are helping the local families and small farms with new technology, and we're really helping them and getting better yield from their small farms.
Benoit Lassalle: And we are helping the local families and small farms with new technology. And we are really helping them to get better yields from their small farms. To conclude, and the takeaway is that Bumazin is really moving on all cylinders with 120,000 meters of drilling, seven drills are turning 24-7, results are coming in, and this is a key asset to AYA, and we are on track with the program and we are waiting for the geophysics, because you see the picture on page 17, the helicopter doing the geophysics, and we are on track to get the geophysics in June and the inversion of The second takeaway is 25,000 meters of drilling at Zgundea and Zgundea Regional. That is on track. There's a team working on this as well, and we're looking at many new targets.
Speaker Change: To conclude.
Speaker Change: And the takeaway.
Speaker Change: Is that <unk> is is really moving on all cylinders.
Speaker Change: 120000 meters of drilling seven drills are turning to <unk>.
Speaker Change: Four seven.
Speaker Change: The results are coming in and this is a key asset to <unk> and we are on track with the program and we are waiting for the geophysics.
Speaker Change: You see the picture on page 17, the helicopter with doing the geophysics and that we are on track to get the geophysics.
Speaker Change: June and the inversion of the geophysics in June in order to identify additional targets on all of the new permits that we have obtained and on our original permit as well.
Speaker Change: The second takeaway is 25000 meters of drilling at <unk>. There are regional that is on track.
Speaker Change: <unk> as well and we're looking at many new targets.
Benoit Lassalle: On construction, the 2024 milestone for the plant expansion, as we indicated, commissioning will start. We will communicate when we start and what section of the plant is being commissioned, and you can expect that in the coming weeks. We expect commercial production in Q4 of 2024. We're maintaining, again, our guidance. We're maintaining cost and production guidance. So that is a fact, and we're saying it again. And we're also maintaining our ESG milestones and values. It's part of our values, it's part of our team, and that's something that we have completely integrated from top to bottom of the organization.
On the construction of the 22024 milestone for the plant expansion as we indicated commissioning will start we will communicate.
Speaker Change: When we start and whats section of the plant being commissioned and then that you can expect that in the in the coming few weeks.
Speaker Change: We expect commercial production in Q4 of 2024.
Speaker Change: We're maintaining again guidance, we're maintaining cost and production guidance. So that's that is a fact and we're saying it again and we're also maintaining our ESG milestone that values.
Speaker Change: It's part of our values, it's part of our team and Thats something that we have.
Speaker Change: Completely integrated from top to bottom of the organization.
Benoit Lassalle: And on page 18, I'd like to show you our power line. We're very proud of our power line. It is 340 pylons long.
Speaker Change: And on page 18, I would like to show you. Our power line, we're very proud of our power line. It is 340 <unk>. It is a beautiful power line high voltage that is coming from the bottom of the valley. Although we are up to 2200 meters, where the plant is.
Benoit Lassalle: It is a beautiful power line, high voltage, that is coming from the bottom of the valley all the way up to 2,200 meters where the plant is. We have started commissioning it slowly with the government. We're almost done.
Speaker Change: We have started commit.
Speaker Change: Commissioning it slowly or with the government and then it's.
Speaker Change: We're almost done we're almost done as high voltage you remember its green energy. It's a PPA is a 20 year PPA signed with the local company. Its green energy is high voltage and it's less expensive than the current energy that we're receiving which is.
Benoit Lassalle: It's high voltage, but you remember, it's green energy. It's a Public Private Partnership. It's a 20-year PPA signed with the local company. It's green energy. It's high voltage, and it's less expensive than the current energy that we're receiving, which is the regular grid. This is almost done. It's an important project for the mine, and it will be ready and commissioned for the beginning of the commissioning of the other parts of the plant. So, Operator, that concludes the official presentation of Q1, and we are ready for questions.
The regular grid. So this is almost done.
Speaker Change: It's an important project for the mine and it will be ready and commission.
Speaker Change: Forward to beginning of commissioning of the other parts of the plant.
Speaker Change: So operator that completes the official presentation.
Speaker Change: Q1, we are ready for questions.
Operator: Thank you. As a reminder to ask a question, please press star 1 1 on your telephone and wait for your name to be announced. To withdraw your question, please press star 1 1 again. Please stand by while we compile the Q&A roster. Our first question comes from the line of Eleanor Magzynski from SCP Resource Finance.
Speaker Change: Thank you as a reminder to ask a question. Please press star one one on your telephone.
Speaker Change: For your name to be announced.
Speaker Change: Withdraw your question. Please press star one one again please.
Speaker Change: Please standby, while we compile the Q&A roster.
Speaker Change: Our first question comes from the line of Eleanor magazine ski from SCP resource Finance.
Eleanor Magzynski: Hi, can everyone hear me okay?
Speaker Change: Can everyone hear me okay.
Anna: Anna, can you speak up a little bit?
Speaker Change: Can you speak up a little bit.
Anna: Oh, yeah. Yeah, the classic headphone case. Can you hear me better now?
Speaker Change: Oh, yes.
Speaker Change: Classic Headphone case can you hear me better now.
Operator: Much better, yes.
Eleanor Magzynski: Okay, wonderful. Okay.
Speaker Change: Much better yes.
Speaker Change: Okay wonderful, okay, well, thanks, very much <unk> and <unk> for the presentation. This morning, and great work to everyone asks for the efforts over the last quarter I just wanted to ask a question about.
Speaker Change: Upcoming I guess throughput, while commissioning, we kind of anticipate the grades to be.
Eleanor Magzynski: Well, thanks very much Benoit and team for the presentation this morning and great work to everyone for the efforts over the last quarter. I just wanted to ask a question about upcoming, I guess, throughput during commissioning. We kind of anticipate the grades to be a bit on the lower side because that's typical in the commissioning stages, but just curious what the plant capacity is kind of budgeted or expected to be over the next, I guess, Q2 and Q3 while commissioning takes place.
Speaker Change: On the lower side, because that's typical in the commissioning stages, but just curious what the plant capacity is.
Speaker Change: Kind of budgeted or expected over the next.
Speaker Change: I guess Q2 and Q3, while commissioning takes place.
Benoit Lassalle: So Eliana, first of all, we're going to be running this with the stockpile, so clearly, as you know now, at the end of the quarter, we have 275,000 tons in the stockpile which runs around 170 grams per ton which we've been accumulating, and that's what we're going to be using. And on the commissioning front, well, we'll start at the end of June very slowly. We hope that we're going to have it completed by the end of September or beginning of October, where technically, the new plant is 2,000 tons, but I don't believe we're going to be running at 2,000 tons to start.
Speaker Change: So.
Speaker Change: First of all we're going to be running this with the stockpile. So clearly as you know now we have at the end of the quarter. We have 275000 tonne stockpile, which runs around 170 grams per ton, which we have been accumulating.
And that's that's that's what we're going to be using and on the commissioning front well look we'll will start at the end of June.
Speaker Change: And very slowly.
Speaker Change: We hope that we're going to have.
Speaker Change: We have completed that at the end of September beginning of October we're technically the new plant is 2000 tons, but I don't believe we're going to be running at 2010 to start that would be a dream but.
Benoit Lassalle: That would be a dream, but it would be very, very difficult. It's still very difficult to say. The beauty is the two older plants are running at almost 900 tons a day. That's going to continue, and after that, it's going to be a normal ramp up. Raphael, is there any number you have in mind?
Speaker Change: It would be very very difficult, it's still very difficult to say the beauty is the two older plants are running at almost 900 tons. A day, that's going to continue and after that it's going to be a normal ramp up.
Speaker Change: Is there any number you have in mind too.
Speaker Change: The plan to run for 2000 ton a day and we've taken nominal contingent of CRM.
Speaker Change: As we shared.
Raphael: Well, the plant is designed for 2,000 tons a day, and we've taken nominal contingency on it as we should. So, as we maintain guidance, we started commissioning in June, and we will have a ramp-up of we hope that it's fast and to have commercial production in Q4, so we'll have a ramp-up during Q3 and hopefully achieve full capacity through Q3 and have a stable operation in Q4.
Speaker Change: So as you maintain guidance.
Speaker Change: Started commissioning in June and we will have a ramp up of <unk>.
Speaker Change: We hold better stock.
And.
Speaker Change: To have commercial production in Q4, but we're hard to ramp up during Q3.
Speaker Change: And hopefully achieve full capacity through Q3, and how stable operation in Q4.
Eleanor Magzynski: Okay, awesome. And just that 1 last follow up, I guess. So, in Q4, I mean, assuming kind of everything kind of goes as planned over the next little bit of commissioning and, you know, you have steady state at 2000 tons per day for the new plant, what sort of grades are expected or anticipated for the end of the year? Because it does seem like you will be kind of unloaded, which makes sense given the timing for the commissioning and things like that. But just curious if you could speak on that at all and how that's expected to change over the next couple of quarters.
Speaker Change: Okay Awesome and just one last follow up I guess, so in Q4, I mean, assuming kind of everything kind of goes.
Speaker Change: Planned over the next little bit of commissioning.
Speaker Change: And you have steady state 2000 tonnes per day after the new plant.
Speaker Change: What sort of grades are I guess are expected or anticipated.
Speaker Change: Here the end of end of year, because it does seem like you will be kind of end loaded which makes sense given the timing for the commissioning and things like that but just curious if you could speak on on that at all and how that's expected to change over the next couple of quarters.
Raphael: So for the grade, it's as per guidance, so the grade will continue to go up through the year, and we have the stockpile, but we won't only feed the new mills from the stockpile. We'll feed the new mills from the stockpile and also the ongoing two mines that we have. So we have three different stores that we can feed the new mills and adjust accordingly. But, as per guidance, grades will continue to go up through the year, and we'll adjust with the open pit, with the underground, and with stockpiles to benefit as much as we can from the performance of the new plant.
Speaker Change: So, Florida grade it's out of our guidance.
Speaker Change: Great. We will continue to go up through the year and we have a stockpile, but we won't only see the new mailed from the stockpile will feed in the email from the stockpile and also the ongoing two mines that we have so we have three different stores that we can.
Speaker Change: Feed the new male and adjust accordingly.
Speaker Change: But also our guidance.
A greater will continue to go through the year and we will adjust with the open pit with the underground with stockpile to benefit as much as we can from the performance of the new blood.
Eleanor Magzynski: Okay, awesome. Thank you so much. That's my only question for today.
Speaker Change: Okay awesome. Thank you so much that's my only question for today.
Benoit Lassalle: I really appreciate it, and I look forward to chatting soon.
Speaker Change: Really appreciate it and look forward to chatting soon.
Eleanor Magzynski: Thank you.
Speaker Change: Yes.
Speaker Change: Thank you and thanks Irina.
Operator: Thank you. One moment for our next question. Our next question comes from the line of John Sklodnik from Desjardins.
Thank you one moment far next question.
Speaker Change: Our next question comes from the line of John Sklar, Nick from Desjardins.
John Sklodnik: Yeah, thanks, guys. I can take my question. And yeah, good to hear the expansion is on track and on budget. I guess, just following up on Eleanor's questions there, and I guess trying to get a little more specific on the quarterly cadence of production, is it fair to think that, you know, in Q4, we could be getting roughly like 40% of the annual production in that quarter alone?
John Sklar: Yes. Thanks, guys. Thanks for taking my question and good to hear the expansion is on track and budget I guess just.
Speaker Change: Following up on <unk> questions, there and I guess trying to get a little more specific on the quarterly cadence of production.
Is it fair to think that in Q4, we could be getting something like 40% of the annual production in that quarter alone.
Benoit Lassalle: That's 40% of the $3 million, just for simplicity, would be $1.2 million. Look, it's hard, it's difficult to say. It depends on, it will depend on the ramp-up, John. But we know that the grade is getting better, that we know because the open pit has got better grades, and so has the underground.
Speaker Change: That's <unk>.
Speaker Change: 40% of the $3 million just for simplicity, we'd be one two.
Speaker Change: Rich.
Speaker Change: It's hard it's difficult to say.
Speaker Change: It depends on the.
Speaker Change: Yes.
Speaker Change: On the ramp up John is but we know that the grade is getting better that we know because of the open pit as it got better grades and the underground.
Benoit Lassalle: and like like gone last like like gone last last uh last month, I think you know We give annual guidance. We're in a ramp up. We're. Our objective is to hit annual guidance. For sure. I think we gave you guys a pretty good idea of when commissioning is going to be, when we think ramp-up is going to be. So I think we'll, we'll stick to that. And look, we expect to meet the guidance targets from here to the end of the year.
Speaker Change: Like Don loss.
Speaker Change: Laughter robust last month I think.
Speaker Change: We give annual guidance.
Speaker Change: We're in a ramp up.
Speaker Change: Our objective is to hit annual guidance.
Speaker Change: For sure I think we gave you guys a pretty good idea.
Speaker Change: When we think commissioning is going to be when we think ramp ups going to be so I think we'll stick to that and look we expect to meet guidance.
Speaker Change: From here to the end of the year.
John Sklodnik: Fair enough, yeah, it was a steaky wait to ask for quarterly guidance, and I guess the other one, just out of curiosity, in terms of that, the concentrate that was held in inventory, that was just a shipping timing issue, I'm assuming.
Speaker Change: Fair enough yeah. It was a sticky wait to ask for quarterly guidance.
Speaker Change: And then.
Speaker Change: And I guess the other one just any curiosity in terms of that.
Speaker Change: The concentrate that was held in inventory that was just a shipping timing issue I'm assuming.
Benoit Lassalle: Today that's right. That's what we waited for the concentrate. We were looking at the $21 price. We did not like that, and we had $1507,000 we could have shipped before the end of the quarter or after the end of the quarter, and we waited. And we didn't do that in the past. But if you look at Q1, the average selling price was lower, and we kind of made the right decision because we got $4.
Speaker Change: That's right that's why as we waited for the concentrate we were looking at the $21 price, we did not like that and we had 157000, we could have shipped before the end of the quarter or after the end of the quarter and we waited and we didn't do that in the past, but this.
Speaker Change: If you look at Q1, the average selling price was lower and we kind of made the right decision because we got $4 extra.
John Sklodnik: Interesting. Okay.
Speaker Change: Interesting, okay, yes kind of.
Speaker Change: Kind of a new approach.
Speaker Change: And I guess in terms of getting an even a leverage would you ever think about adding keeping a little bit on the balance sheet silver.
Benoit Lassalle: Yeah, that's kind of a bit of a new approach in terms of getting a bit of leverage. Well, we normally do. If you look at every time you look at the quarter end, there's always, you know, because of the delivery time, because of the ingots, there's always some at the end. We haven't used this as a, you know, it's not, we're not in the business of holding on like others do. And, but look, we have the liquidity to be patient, and we do have the liquidity. So, we were patient in Q1. Perfect.
Speaker Change: Silver well, we normally do if you look at every time you look at the quarter.
Speaker Change: Quarter end Theres always because of the delivery time because of the ingots Theres always some at the end we haven't used this as a.
Speaker Change: We're not in the business evolving unlike others do and but look we have the liquidity to be patient and we do have the liquidity. So we were patient in Q1.
John Sklodnik: Yeah, no, I appreciate that. And yeah, great to see you guys are in a good financial position to finish this wrap-up, and then it's on track and on budget. So yeah, congrats, and looking forward to more. Thanks, guys. Thanks, John.
Speaker Change: Perfect.
Speaker Change: I appreciate that and yes, great to see you guys are in.
Speaker Change: Good financial position with vendors just wrap up and then it's on track and on budget. So congrats and looking forward to more thanks guys.
John Sklar: Thanks, John.
Speaker Change: Thank you.
Operator: One moment for our next question, which comes from the line of Stephen Souk from Stifel.
Speaker Change: One moment for our next question.
Stephen <unk>: Our next question comes from the line of Stephen <unk> from Stifel.
Stephen Souk: Hi guys, thanks for the presentation.
Hi, guys. Thanks for the presentation, great to see the ramp.
And a construction still going at pace here just a quick one for me I know the oxide material going through the mill, obviously impacted recoveries. This quarter, how should we expect a degree of that through through Q2, and maybe Q3 as well or is that pretty much all flushed through.
Stephen Souk: Great to see the ramp, or sorry, the end of construction still going apace here. Just a quick one for me, you know, the oxide material going through the mill obviously impacted recoveries this quarter. Should we expect a degree of that through Q2 and maybe Q3 as well, or is that pretty much all flushed through?
Raphael: We tried to keep as much of the oxidized ore for the new plants because we expect performance to be excellent. We do process a little bit, and we've adjusted since the plant because we do have the luxury of having two mills in operation, and we expect recoveries to be up in Q2 and even more so as we go along in the rest of the year and as we expose fresh ore from the plant from the open pit.
Stephen <unk>: So.
Speaker Change: We try to keep as much of the oxidize or for the new plant because we expect performance to be excellent.
Speaker Change #100: We do process, a little bit and we've adjusted the plants because we do have the luxury of having to our Maryland operation.
Speaker Change #101: We expect recoveries to be up in Europe in Q2.
Speaker Change #101: Even more as we go along in the rest of the year and as we expose fresh ore from the plan from the open pit.
Stephen Souk: Perfect. Yeah, okay. It makes sense. And then just one other one for me here on the cost side now with the open pit, really kind of getting into the heart of mining, are costs coming in kind of as expected? Are you seeing any sort of early problems?
Speaker Change #102: Perfect Yeah, Okay. It makes sense.
Speaker Change #103: And then just one other one for me here on the cost side now with the open pit really kind of getting into the heart of mining our costs coming in kind of as expected are you seeing any sort of early indications of variation from from the Tech report on the cost side there.
Raphael: Yeah, on the cost side, and we make reference to it, like in the contract.
Speaker Change #104: Yeah on the cost on the cost side.
Speaker Change #105: We make reference to it like the contractor is going very very well on both on cost and on performance. So.
Speaker Change #106: As we expect.
Stephen Souk: That's great to hear. That's it for me. I appreciate the answers, and I'll leave the line open for someone else.
Speaker Change #107: That's great to hear that's it for me I appreciate the answers and I'll leave it wide open for someone else.
Okay.
Speaker Change #106: Thanks.
Speaker Change #108: Thank you.
Operator: One moment for our next question. Our next question comes from Don DeMarco from National Bank Financial.
Speaker Change #109: One moment for our next question.
Speaker Change #108: Okay.
Speaker Change #108: Our next question comes from the line of Don Demarco from National Bank financial.
Don Demarco: Thank you, Operator, and good morning, Benoit and team. Congratulations on reiterating guidance and development on time and on budget.
Speaker Change #110: Thank you operator, and good morning, <unk> and team congratulations on.
Speaker Change #111: Reiterating guidance and development on time on budget.
Don Demarco: So, but I'm going to shift over to Bhoomadean for my questions. First, can you just refresh on the timing of the regional geophysics? And if you're drilling any of these regional targets outside for the main dormer tizzy zone, when first assays might be available on those other targets.
Speaker Change #112: But I'm going to shift over to Boumediene for my question.
Chris: Chris can you just refresh us on the timing of the.
Speaker Change #114: Regional geophysics.
Speaker Change #114: And if you're drilling any of these regional targets outside the main garner to Don.
Speaker Change #115: First assays might be available on other targets.
Benoit Lassalle: Well, Don, on the geophysics, and David is on the line, so he'll be able to add, but the geophysics was about 80% completed when we took the helicopter over to Tirzit because in Tirzit, we know it's a flat structure, and we wanted to see what the readout of the geophysics would be on this flat structure, which was a mine historically by the previous owners. So we did that, and we were waiting for the helicopter to come back to Boumadine, and as soon as it's back, we will complete whatever is missing to the east and to the west for the geophysics program.
Speaker Change #116: Well done on the geophysics and David is underlying so you'll be able to add but the geophysics with about 80% completed when we took the year the helicopter over to give it because it tells US we know it's a it's a flat structure with and we wanted to see what.
Speaker Change #116: Would be the the readout of the geophysics on this flat structure, which was a mind historically by the previous owners. So we did that and we were waiting for.
Speaker Change #116: The helicopter to come back to.
Speaker Change #116: Two to two <unk> and then it's.
Speaker Change #116: So the back and we will complete whatever is missing to the east and to the west.
Speaker Change #116: For the Geophysics program, but that once we have that then we're going to get the inversion of the geophysics data, which we'll show.
Benoit Lassalle: But once we have that, then we're going to get the inversion of the geophysics data, which will show at depth the structure and what we could be looking for or will identify some targets, and only then will we look at drilling those targets. So we will review the priority targets either on our ground or on the additional ground that we have obtained, and then David and his team are going to decide what the priority targets are. Obviously, the deeper target to the southeast is extremely important, but until we have the data, we don't know if it's how deep it is and how big the target is.
Speaker Change #116: At depth.
Speaker Change #116: The structure and what we could be looking for or will identify some target and only then will we look at drilling.
Speaker Change #117: Those targets. So we will review the priority targets either on our ground or on the additional ground that we have obtained and then David and his team are going to decide what are the priority targets, obviously, the deeper targets to the south East is is.
Speaker Change #117: Southwest sorry is extremely important but until we have the data.
Speaker Change #117: We don't know if it's how deep it is.
Speaker Change #117: How big the target is.
Don Demarco: Okay. Okay. Well, we'll stay tuned for that then. Thank you for that.
Speaker Change #117: Okay.
Speaker Change #118: Okay, well stay tuned for that then thank you for that.
Don Demarco: Also, fishing with Boumediene, you know, I recognize that the processing method is not finalized. You're looking at a number of different options, ruling out some. But based on the testing that's been done to date, what's the range of recoveries that you might expect for the different metals?
Speaker Change #119: Also Christian like Birmingham.
Speaker Change #120: I recognize that the processing that is not finalized youre looking at a number of different options ruling outcome.
Speaker Change #121: But based on the testing has been done to date, what's the range of recoveries that you might expect for the different metals.
Benoit Lassalle: We have it in the presentation If you go back to the presentation that we've given you, let me just go to it. On page 12, on page 12, at the bottom, through the initial metallurgical test work, the initial recoveries for silver, gold, lead, and zinc are shown there. So, obviously, this is just the beginning.
Speaker Change #122: Well, we have it on the presentation. If you if you go back to the presentation that we've given you.
Speaker Change #123: Let me just go to it.
Speaker Change #123: Yeah.
Speaker Change #124: On page 12.
Speaker Change #124: On page 12.
Speaker Change #124: At the bottom through the initial metallurgical tests ordered the initial recoveries for silver gold lead and zinc are shown there. So obviously this is just the beginning.
Benoit Lassalle: We did quite a bit of work, but it's just the beginning of what we're going to be doing this year and for the beginning of next year in identifying what's the best method. But we wanted to debug the system and show that, regardless of the fact that the second transformation is where the gold and silver get liberated, the technology exists, it is available, and it's just a matter of completing the PEA.
Speaker Change #124: Did quite a bit of work, but it's just the beginning of what we're going to be doing this year and for the beginning of next year and identifying what's the best method, but we wanted to debug the system and to show that regardless of the fact that the second tranche.
Information.
Speaker Change #124: As ware.
Speaker Change #124: The gold and silver gets liberated the technology exists. It is available and it's just a matter of completing the PPA, but for us to complete the VA, we need to know quantity and the size of the deposit and that we don't know yet and thats. Its all about geology. So that it has got a.
Benoit Lassalle: But for us to complete the PEA, we need to know the quantity and the size of the deposit, and that we don't know yet, and it's all about geology. So, David has got a very large budget, as you know, to drill this, and if we need to drill even more, we will, to understand the size, and with that, then we'll be able to define what method we want to use.
Speaker Change #124: A very large budget as you know to drill this and if we need to drill even more we will to understand the size and with that then we'll be able to define.
Speaker Change #125: What method that we want to use.
Benoit Lassalle: Okay, and are you seeing that you could potentially apply the same method over all areas? Or are you seeing sort of differences in mineralogy that might warrant different methods for some areas in some zones?
Speaker Change #126: Okay and are you seeing.
That you would potentially acquire the same method over all areas are you seeing sort of differences and mineralogy that might warrant different methods for some areas for some drunk.
Benoit Lassalle: Well, any deposit would have different lithologies and different sections, which would react differently to processes. So, part of the PEA and the next study will be to include geometallurgy to try to capture that, which we have done a bit so far. I mean, this test work was done on composites from all current sections of the deposit.
Speaker Change #127: Well any any deposit would have different mythologies in different sections.
Speaker Change #127: Which would react differently to the profit so part of the P eight and the.
Speaker Change #127: The next study will be to include Geo metallurgy to try to capture that which.
Speaker Change #128: Which we have done a bit so far this test work was done on on on composites from all current.
Speaker Change #128: Ultra infection under deposit.
Benoit Lassalle: [inaudible]
Speaker Change #128: Okay.
Speaker Change #129: Okay, well, thanks, a lot that's all for me and.
Speaker Change #131: Good luck with the startup commissioning this quarter.
Don Demarco: Okay, well, thanks a lot. That's all for me. And Benoit, good luck with the Startup Commissioning this quarter. Thank you.
Don Demarco: Thank you Don.
Operator: One moment for our next question. Our next question comes from the line of Puneet Singh from Eighth Capital.
Speaker Change #132: Thank you one moment far next question.
Speaker Change #133: Our next question comes from the line of Puneet sang from eight capital.
Puneet Singh: Thanks, good morning guys. I just wanted to stick with Boumediene. The geology there looks different, and you have you have that big hit 8,000 grams per ton. Just wanted to get Daveed's view on, you know, you know
Speaker Change #134: Hi, Thanks, Good morning, guys.
Speaker Change #134: I'll stick with Boumediene.
Puneet Sang: Wanted to talk about the activities on the geology, there it looks different and you have you had that big 8000 grams per tonne.
Speaker Change #136: Just wanted to get you on.
Speaker Change #136: Why that looks different than what you initially seeing there.
Operator: Okay, Davide is on the line, so we're going to...
Speaker Change #136: Okay.
Speaker Change #137: That is <unk>, so we're going to use it.
Davide: Okay, hello Punit. I'll try to answer the question as best as possible. First of all, Tizi is very similar to Boumadin. The only geological difference is that we have a little bit more mafic dikes in the surrounding area. But otherwise, Tizi is the same massive sulfides as we have throughout the department. The intersection with the 7,800 g as mentioned in the press release is related to a different sector, different geology, and different events that cross-cut the deposit.
Speaker Change #136: Gail.
Puneet Sang: Okay, Hello, Puneet I'll try to answer that question as good as possible first of all <unk> is very similar to the margin.
Speaker Change #138: Only geological differences that we have a little bit more of a matrix dikes in the surrounding but otherwise Z. The same massive sulfides as.
Speaker Change #138: As we have throughout the deposit.
Speaker Change #138: Intersection with 7800 Gram as mentioned in the press release is related towards different sectors different geology different events that cross cuts.
Speaker Change #138: The deposit.
Davide: So this is an intersection of the east-west structure that we know we have through the whole property. But the further drilling will target those expressively, so we'll know a bit more, but so far, we see a low sulfidation, epithermal geology, so a quartz carbonate vein breccia type with some banding, a thermal texture with lots of silver-rich galena and, most likely, silver So this intersection does not represent Tizi; it mostly represents east-west laid out structures that are crosscut.
Speaker Change #139: So this is an intersection of the east west structure.
Speaker Change #140: We know we are true.
Speaker Change #140: The whole property.
Speaker Change #140: But the new the further drilling we will target those express belief so we'll know more.
Speaker Change #140: But so far we see low sortation terminal.
Speaker Change #141: Geology, so our courts TARP in the vein breccia pipes with some banding.
Speaker Change #142: External texture with lots of silver rich and I and most likely.
Speaker Change #142: Silver rich source of sorts in that.
Speaker Change #142: So this intersection does not represent Z, mostly represent east-west late structures.
Davide: So it's a new type of intersection that we haven't got much of so far on the property because we haven't drilled those specifically. So those structures are basically parallel to the main drilling section that we are doing in order to test TZ and before that Bumadu Main Drill. But as we progress during the year, we will have some specific drilling targeting those structures.
Scott: Scott So it's a new type of intersection.
Scott: We haven't got much so far on the property because we would never drilling.
Scott: Dose.
Scott: Specifically so both structures are basically parallel to the main drilling section, but we are doing.
Scott: In order to test <unk> and before that the main trend, but as we progress through the year, we will add some specific drilling targeting those structures.
Puneet Singh: Okay, got it. So it's kind of too early to say kind of how this fits in with the other targets, right? You guys do geophysics, and then you'll kind of decide what you want to chase. Yeah, exactly.
Okay got it so it's kind of too early to say kind of how this fits in with the other targets are you guys Gonna Geophysics, and then and then you kind of decide what you want to chase, yes, exactly for the geophysics. The geophysics will probably show more of the <unk> type structures with tissue type structure because of the abundance of.
Davide: Yeah, exactly. For the geophysics, the geophysics will probably show more Boumadin-type structures, the Tizi-type structure, because of the abundance of pyrite and other sulfides, so they're highly conductors. But we are tracking closely the North 30 and the North 70 and the East-West structure, both with the mapping and the fieldwork and also the dredging. But that will progress and evolve as the year goes on, and we will always reallocate priority where we have the belief it can return more ounces in the resource.
Speaker Change #144: Hi, right and the other small clients so highly come doctors.
Speaker Change #145: But we are tracking closely the north towards the end of March 70 in the east West structure, both with the mapping and the field work and also the drilling.
Speaker Change #145: But that's where progress and evolve as the year goes on and we will always reallocate a priority where we believe it can return more ounces in the resource.
Speaker Change #145: The bucket.
Speaker Change #146: Okay got it thanks.
Speaker Change #146: Hello.
Speaker Change #147: Thank you.
Speaker Change #148: This time I would now like to turn the conference back over to Benno on Lasalle, President and CEO for closing remarks.
Puneet Singh: [inaudible]
Speaker Change #149: Thank you operator.
Speaker Change #150: In closing, let me just walk you buy and walk you through some of the key milestone of the quarter and as we indicated it is a transition quarter. It is a transition year as we are gearing up for a new production profile next year, but the highlight of the quarter.
Puneet Singh: Okay, I got it. Thanks.
Operator: Thank you.
Speaker Change #151: As the construction of the new plant is on time and its on budget.
Benoit Lassalle: Thank you, Operator. In closing, let me just walk you through some of the key milestones of the quarter. And as we indicated, it is a transition quarter; it is a transition year as we're gearing up for a new production profile next year. But the highlight of the quarter is that the construction of the new plant is on time and it's on budget. And commissioning will be starting in a couple weeks.
Speaker Change #151: And the commissioning will be starting in a couple of weeks.
Benoit Lassalle: One of the highlights of the quarter is there are 157,000 ounces that were produced in Q1, but sold in Q2 and will come into the revenue of Q2, and that was done creating a profit or an additional revenue of $4 an ounce.
One of the highlight of the quarter is there is 157000 ounces that was produced in Q1, but sold in Q2 and will come into the revenue of Q2 and that was done creating a profit or an additional revenue of $4 an ounce.
In hindsight, we can see that it was the right decision.
Benoit Lassalle: So, in hindsight, we can see that it was the right decision. The open pit is now ready to expose higher-grade ore, which is what we were looking for, and that is it now that it is done. The stockpile is an important element because it is security for commissioning, and at the end of the quarter, we were at 275,000 tons. As of now, we are at 290,000, which is, as I indicated, the original planning was to be at 260,000. So we're ahead on mining, and we have almost three months of stockpile once we're up and running and throughout commissioning. And to finish, the Boumadine program is continuing; there are seven drills turning.
Speaker Change #151: The open pit is now ready to expose higher grade ore, which is what we were looking for and that is it now that is done.
Speaker Change #151: The stockpile is an important element because it is security key for commissioning and at the end of the quarter, we were at 275000 ton.
Speaker Change #151: As of now we are at $2 90, which is as I indicated the original planning was to be at $2 60. So we're ahead on the.
Speaker Change #152: On mining and we have almost three months of stockpile.
Speaker Change #152: Once we're up and running.
Speaker Change #152: And throughout the commissioning.
Speaker Change #152: And to finish the <unk>.
Speaker Change #152: Program is continuing there are seven drills turning.
Benoit Lassalle: We are drilling this, 60,000 meters on the current geophysics anomaly, which we know is six kilometers long. We now have drilled it at five kilometers. We've reported resources at 4.2 kilometers, and this will continue. And as we receive the geophysics interpretation and the inversion of the data, we will identify new targets, and we will drill on some of the new targets.
Speaker Change #153: We are drilling this.
Speaker Change #153: 60000 meters under occur in.
Speaker Change #153: Geophysics anomaly, which we know is six kilometers along we now have drilled it on five kilometer we've reported resource on $4 two kilometers.
Speaker Change #153: And this will continue and as we will receive the geophysics interpretation and the inversion of the debt that we will identify new targets and we will drill on some of the new targets.
Benoit Lassalle: And to close, I would like to say that we are fully funded. You saw that at quarter end, our cash position was US$111 million. Zgunder, as you know, is cash flow positive on a yearly basis. It pays for all of its exploration. And we will be spending approximately US$35 million on exploration this year between Boumeddine and Zgunder, and we do not expect to need money. We will always maintain a cash position that will exceed $50 million.
Speaker Change #153: And to close I would like to say that we are fully funded.
Speaker Change #153: You saw that quarter.
Speaker Change #153: Quarter end, our cash position is $111 million in U S dollars.
Speaker Change #153: Is there as you know is cash flow positive on a yearly basis. It pays for all of its exploration.
Speaker Change #153: And we will be spending this year in exploration approximately $35 million between <unk> and <unk> there.
Speaker Change #153: And we do not expect to need money, we will always maintain our cash position that will exceed $50 million. So we are in a very good position to see through all of our exploration programs.
Benoit Lassalle: So, we are in a very good position to see through all of our exploration programs. Of course, the construction is just about done, and that is fully funded. So, we have a company where we have a lot of geological upside and where the construction risk and the financing risk are behind us. So, thank you for your time, thank you for being there today, and we will obviously talk to you during the course of the quarter, and, if not, at the next conference call. Thank you, and thank you, operator.
Speaker Change #153: Of course, the the construction is just about done and that is fully funded so we have a company, where we have a lot of geological upside and where the the construction risk and the financing risk is behind us.
Speaker Change #153: Thank you for your time, thank you for being there today and we will obviously talk to you during the course of the quarter and if not at <unk>.
Speaker Change #153: The next conference call. Thank you and thank you operator.
Operator: Thank you. This concludes today's conference call. Thank you for participating. You may now disconnect.
Speaker Change #154: Thank you. This concludes today's conference call. Thank you for participating you may now disconnect.
Speaker Change #154: Okay.
Speaker Change #154: [music].
Speaker Change #154: Okay.