Q2 2024 Kinross Gold Corp Earnings Call
Thank you for standing by. My name is Jalil and I will be your conference operator today. At this time, I would like to welcome everyone to the second quarter 2020 four results conference call and webcast.
Operator: All lines have been placed on mute to prevent any background noise. If you would like to withdraw your question, press star 1 again. Thank you and good morning. With us today are Paul Rowlandson, CEO, and from the Kinross senior leadership team, Andrea Freeborough, Claude Schimper, Will Dunford, and Jeff 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 two of this presentation.
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 1 on your telephone keypad. If you would like to withdraw your question, press star 1 again.
I would now like to turn the conference over to Chris Lichtenheldt, Vice President of Investor Relations. You may begin.
Operator: Our news release dated July 31st, 2024, the MD&A for the period ended June 30th, 2024, and our most recently filed AIF, all of which are available on our website. Thanks, Chris, and thank you all for joining us.
Chris Lichtenheldt: Thank you and good morning. With us today we have Paul Rowlandson, CEO , and from the Kinross Senior Leadership Team, Andrea Freeborough, Claude Schimper, Will Dunford, and Jeff Gold.
Speaker Change: 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 July 31st, 2024,
Chris Lichtenheldt: The MD&A for the period ended June 30, 2024, and our most recently filed AIF, all of which are available on our website.
Chris Lichtenheldt: I will now turn the call over to Paul.
Paul Rowlandson: Thanks, Chris, and thank you all for joining us.
Paul Rowlandson: This morning, I will discuss our Q2 margins and cash flow.
Speaker Change: Provide high-level updates on our operations and projects.
Speaker Change: Update you on our sustainability initiatives.
Paul Rowlandson: I will then hand the call over to Andrea, Claude, and Will to provide more teaching. Following a strong start to the year in Q1, we established an excellent first half. I'm positioning as well to meet our four-year guidance. As a result, $346 million. Turning now to operations. Our production in the second quarter was on plan, delivering 535,000 ounces, driving a significant free cash flow, and tripping at Fay's house. Is that why you're not pressuring me?
Speaker Change: and reaffirm our outlook.
Speaker Change: I will then hand the call over to Andrea, Claude, and Will to provide more detail.
Speaker Change: Following a strong start to the year in Q1,
Speaker Change: He delivered another strong quarter in Q2.
Speaker Change: Establishing an excellent first half and positioning as well to meet our four-year guidance.
Speaker Change: In Q2, our operating margins grew by over 20% compared to the prior quarter.
Speaker Change: Once again, outpacing the relative increase in the gold price over the same period.
Speaker Change: As a result, free cash flow more than doubled in the second quarter to $346 million.
Speaker Change: The first half total of just under a half a billion dollars.
Speaker Change: Turning now to Operations.
Speaker Change: Our production in the second quarter was on plan, delivering 535,000 ounces.
Speaker Change: at a cost of sales of just over $1,000 per ounce.
Speaker Change: Our two largest assets, Tassius and Perikitu, both performed well, with production and costs improving over the prior quarter.
Speaker Change: Cassius had an excellent quarter and was once again the highest margin mine in our portfolio.
Speaker Change: Describe a significant free cash flow.
Speaker Change: Carica II continued its consistent contribution with strong throughput and recoveries, helping drive a steady order of production and cash flow.
Speaker Change: At La Coipa, production remains on track for the full year, and we continue to use strong mill grades and recoveries.
Speaker Change: to optimize throughput.
Speaker Change: In order to address some maintenance opportunities.
Speaker Change: At our U.S. operations, production was on plan, with notably stronger performance from Fort Knox.
Speaker Change: Turning now to our development activities in the second quarter.
Speaker Change: At Round Mountain, the Phase S open pit and the Phase X underground development work continues to advance well.
Speaker Change: Stripping at Phase S and the expansion of the heat bleach pad are progressing on schedule to support initial open pit production next year.
Speaker Change: at Phase X
Speaker Change: The development of the Exploration Geek Line is progressing on plan.
Claude J. S. Schimper: We are excited that the extension drilling at Phase X intersected mineralization with strong grades and width outside of the primary exploration target and is expected to support high productivity bulk mining. Moving to Alaska, to bring this high-grade mine into production, both on budget and on schedule. Mining operations at Mancho are performing as planned, and the Fort Knox Mill Modification is on track for final commissioning in Q3.
Speaker Change: Is that why you're not press release?
Speaker Change: We are excited that the extension drilling at Phase X intersected mineralization with strong grades and widths.
Speaker Change: outside of the primary exploration target.
Speaker Change: These results demonstrate the potential for expansion of the primary resource target.
Speaker Change: and are expected to support high productivity bulk mining.
Speaker Change: Moving to Alaska.
Speaker Change: Consistent with our guidance, I was recently at Fort Knox to celebrate the first Gold Corps from Mad Choke.
Speaker Change: This important milestone represents the hard work and dedication of our project team and partners.
Speaker Change: to bring this high-grade mine into production both on budget and on schedule.
Speaker Change: Mining operations at Mancho are performing as planned.
Speaker Change: And the Fort Knox Mill modifications are on track for final commissioning in Q3.
Speaker Change: As a result, we look forward to delivering several years of strong production.
Speaker Change: At Attractive Costs,
Speaker Change: from the Combined Operations in Alaska.
Speaker Change: At Great Bear, we continue to make strong progress in the second quarter.
William Dunford: The ongoing exploration drilling campaign continues to focus on targeted extensions of the resource at depth. This whole intersected attractive grades and width at a vertical depth of nearly 1.6 kilometers down plunge of the main LP zone and demonstrated significant potential for further resource growth. It's important to note that this recent deep drilling will not be reflected in the upcoming PEA, and we'll only include drilling up to April and a window into the initial production scale, costs, and margins for the underground. The long-term potential of the resource will need to be drilled off from underground.
Speaker Change: The ongoing Exploration Drilling Campaign continues to focus on targeted extensions of the resource at depth.
Speaker Change: And in Q2, we drilled the deepest hole on the property to date.
Speaker Change: This hall intersected attractive grades and widths.
Speaker Change: at a vertical depth of nearly 1.6 kilometers down plunge of the main LP zone.
Speaker Change: This intercept is outside of our current resource.
Speaker Change: and demonstrate significant potential for further resource growth.
Speaker Change: Drilling at hinge and limb also returned attractive results for depth extensions at both zones.
Speaker Change: Indicating strong upside potential to supplement the main LP zone from these satellites.
Speaker Change: It's important to note that this recent deep drilling will not be reflected in the upcoming PEA.
Speaker Change: Because the PEA is a point-in-time estimate.
Speaker Change: And we'll only include drilling up to April .
Speaker Change: The PEA will provide visibility on the open pit.
Speaker Change: and a window into the initial production scale, costs, and margins for the underground.
Speaker Change: Given the depth of the mineralization.
Speaker Change: The long-term potential of the resource will need to be drilled off from underground as we progress development ahead of mining.
William Dunford: As we progress development ahead of mining, however, this deep drilling today shows the continuation of high-grade mineralization. Regarding the permitting for the main project, we would be remiss to not address, including our plan to reduce greenhouse gas emission intensity.
Speaker Change: However, this deep drilling today shows the continuation of high-grade mineralization beyond the current resource in the PEA.
Speaker Change: indicating the potential for significant resource growth over time.
Speaker Change: We look forward to outlining more project details when we release the PEA in September .
Speaker Change: For the ADX, the start of surface construction is targeted for later this year.
Speaker Change: Regarding permitting for the main project,
Speaker Change: The Federal Impact Assessment is underway.
Speaker Change: Baseline studies, permitting, and engineering for both the AEX and main project are all progressing well.
Speaker Change: In summary, we are very pleased with how things are progressing at Great Bear.
Speaker Change: Before I make a few comments on sustainability,
Speaker Change: We would be remiss to not address the recent incidents that have occurred around heap leach facilities within the mining industry.
Speaker Change: Will is going to discuss why we are confident in the quality of our heaps in more detail later on this call.
Will Dunford: Turning now to sustainability.
Speaker Change: Last night we published our fourth annual climate report.
Speaker Change: which provides our latest comprehensive climate-related disclosures.
Speaker Change: The report also outlines our progress towards our climate-related goals.
Speaker Change: and provides details on our climate change strategy.
Speaker Change: including our plan to reduce greenhouse gas emission intensity.
Speaker Change: In 2023, we implemented 15 energy efficiency projects across our sites, with combined greenhouse gas reductions of more than 29 kilotons of CO2.
Speaker Change: As a result, our percentage of renewable energy increased to 23% of total energy consumed last year.
Andrea Susan Freeborough: Looking forward, we are on track to achieve our targeted 30% reduction in Scope 1 and Scope 2 emission intensity by 2030. In summary, we continue to be very proud of our work in the area of sustainability, and I encourage everyone to read our recent climate report to learn more. Year-to-date, we have produced over one million ounces. Thanks, Paul.
Speaker Change: Looking forward, we are on track to achieve our targeted 30% reduction in Scope 1 and Scope 2 emission intensity by 2030.
Speaker Change: In summary, we continue to be very proud of our work in the area of sustainability, and I encourage everyone to read our recent climate report to learn more.
Speaker Change: Turning now to our outlet, year-to-date we have produced over 1 million ounces
Speaker Change: at a cost of sales in line with our guidance.
Speaker Change: Looking ahead, we remain on track to achieve our production and cost guidance for the full year.
Speaker Change: Our continued focus on costs is driving strong margins and significant free cash flow.
Speaker Change: With that, I will now turn the call over to Andrea.
Andrea Susan Freeborough: This morning, I'll review our financial highlights from the quarter, and provide an overview of our balance. First half cost of sales of $1,006 per ounce is in line with our full year cost guidance range of $1,020 per ounce. In Q2, our adjusted earnings were $0.14 per share and adjusted operating cash flow was $478 million, both improving over the prior quarter. We generated $346 million of attributable free cash flow in the quarter, or $237 million, excluding working capital changes.
Andrea Freeborough: Thanks, Paul. 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 Freeborough: Our second quarter performance was strong, with production and cash flow exceeding the prior quarter.
Andrea Freeborough: We produced 535,000 ounces with gold sales of 521,000 ounces.
Andrea Freeborough: Cost of sales was $1,029 per ounce, and with an average realized gold price of $2,342 per ounce, we delivered strong margins of over $1,300 per ounce.
Speaker Change: All in sustaining costs was $1,387 per ounce.
Speaker Change: First half cost of sales of $1,006 per ounce is in line with our full year cost guidance range of $1,020 per ounce.
Speaker Change: First half all-in sustaining cost of $1,348 per ounce is also in line with our full year guidance range of $1,360 per ounce.
Speaker Change: In Q2, our adjusted earnings were $0.14 per share and adjusted operating cash flow was $478 million, both improving over the prior quarter.
Speaker Change: We generated $346 million of attributable free cash flow in the quarter, or $237 million excluding working capital changes.
Speaker Change: Turning to the balance sheet, our financial position continued to improve in the second quarter and remained strong.
Speaker Change: After repaying $200 million of debt against the term loan in Q2, we ended the quarter with $480 million.
Speaker Change: We currently have approximately $2.1 billion of total liquidity.
Speaker Change: Over the past 12 months, we've reduced our net debt by approximately $450 million, and our net debt to EBITDA from 1.3 times last year to just under 0.8 times as of Q2.
Speaker Change: Looking forward, we plan to continue allocating excess free cash generated against the remaining $800 million due on the term loan in 2025.
Claude J. S. Schimper: After repaying $200 million of debt against the term loan in Q2, we ended the quarter with $480 million. Turning to our guidance, following Q2, we remain solidly on track to meet our guidance to produce 2.1 million ounces at a cost of sales of $1,020 per ounce and all in sustaining costs of $1,360 per ounce. I'll now turn the call over to Claude. Thank you, Andrea.
Speaker Change: Turning to our guidance, following Q2, we remain solidly on track to meet our guidance to produce 2.1 million ounces at a cost of sales of $1,020 per ounce and all in sustaining costs of $1,360 per ounce.
Speaker Change: Capital expenditures are on track for our full year guidance of $1.05 billion split roughly evenly between sustaining and non-sustaining capital.
Claude Schimper: I'll now turn the call over to Claude.
Claude J. S. Schimper: In 2023, we launched our Global Safety Excellence Program. Results today are very positive, and it will continue to be a focus through the remainder of 2024, with Armand delivering as planned in the quarter and the first half of the year. Tantius was once again the lowest cost asset within the portfolio, driving significant free cash flow.
Claude Schimper: Thank you, Andrea.
Claude Schimper: In 2023, we launched our Global Safety Excellence Program.
Claude Schimper: And I'm pleased to say that we have now shared this program with over 60% of the workforce.
Claude Schimper: including both employees and business partners.
Claude Schimper: We are proud of the program's impact to date and look forward to continuing to share it with the rest of the organization.
Claude Schimper: This quarter, we remain focused on continuing to implement our Human and Organizational Performance Program and our Operational Learning Teams.
Claude Schimper: This program is improving our team collaboration and operationalizing putting people first core value.
Claude Schimper: Results today are very positive and it will continue to be a focus through the remainder of 2024.
Claude Schimper: Moving on to our operations, we saw continued strong performance in Q2, with our mines delivering as planned in the quarter and the first half of the year.
Claude Schimper: At TASIUS, production of 162,000 ounces was higher quarter over quarter. The cost of sales of $656 per ounce, improving over the prior quarter.
Claude Schimper: Tantius was once again the lowest cost asset within the portfolio, driving significant free cash flow.
Claude Schimper: Following a strong first half, Tassius remains on track to meet its full year production guidance of 610,000 ounces.
Claude Schimper: At Barrack 2, production of 130,000 ounces and a cost of sales of $1,039 per ounce were on plan and also improved over the prior quarter.
Claude Schimper: The mine continues to see steady performance on throughput, grades, and recoveries in line with the mine plan.
Claude Schimper: MIME sequencing continues to transition through the lower grade portions of the PIT as planned before moving back into the higher grades by year end into 2025.
Claude Schimper: Part 2 remains on track to meet its 2024 production guidance of 510,000 ounces.
Claude Schimper: At La Coipa, Q2 production of 66,000 ounces was lower over the prior quarter, whilst cost of sales was higher mainly due to higher mole maintenance costs and timing of sales.
Claude Schimper: Production at Loquepo remains on track for the full year target of 250,000 ounces. A strong performance on grades and recoveries offset lower throughput.
Claude J. S. Schimper: A strong performance on grades and recoveries offsets lower throughput. As part of this work, the team is actively managing throughput levels to enhance the reliability of the plant while plant optimization continues. Beginning with Fort Knox, production of 70,000 ounces was significantly higher compared to the prior quarter, as mole throughput, deep dish performance, grades, and recoveries all improved. Cost of sales of $1,345 per ounce was lower compared to the prior quarter, primarily due to the higher production.
Claude Schimper: We continue to perform reliability and optimization work on the plant.
Claude Schimper: As part of this work, the team is actively managing throughput levels to enhance the reliability of the plant while the plant optimization continues.
Claude Schimper: Moving to our U.S. operations, production was higher quarter over quarter, benefiting from improved contributions from Fort Knox, while Round Mountain and Bald Mountain were lower as planned due to my infrequency.
Claude Schimper: Beginning with Fort Knox, production of 70,000 ounces was significantly higher compared to the prior quarter, as mole throughput, deep dish performance, grades and recoveries all improved.
Claude Schimper: Cost of sales of $1,345 was lower over the prior quarter, primarily due to the higher production.
Claude Schimper: At Mancho, mining continues on schedule and all transportation has ramped up to planned volumes.
Claude J. S. Schimper: Processing of Mantra began in early July and is tracking to plan. The cost of sales of $1,271 per ounce. At Round Mountain, production of 62,000 ounces was lower over the prior quarter due to lower mole throughput and grades as planned. The cost of sales of $1,564 per ounce was higher quarter over quarter due to the lower production.
Claude Schimper: Processing of Mantra all began in early July and is tracking to plan.
Claude Schimper: The full commissioning of the Fort Knox Moor Modifications is expected to be completed in Q3.
Claude Schimper: At Bald Mountain, production of 46,000 ounces was slightly lower than the prior quarter as planned.
Claude Schimper: Cost of sales of $1,271 per ounce was higher quarter-over-quarter.
Claude Schimper: At Round Mountain, production of 62,000 ounces was lower over the prior quarter.
Claude Schimper: Due to lower mole throughput and grades as planned.
Claude Schimper: The cost of sales of $1,564 per ounce was higher quarter over quarter due to the lower production.
Jeff Gold: At Phase S, mining activity continues to progress as planned. With that, I'll now post the call over to... Thanks, Claude. I'll start out by providing a brief overview of our operating heap leach facilities before moving on to an update on our project. The only heap leach we have with crushing is Round Mountain, where we are only crushing a portion of the ore we are placing on the pads, so overall, we still have larger rock sizing than a fully crushed pad.
Claude Schimper: At Phase S, mining activity continues to progress as planned.
Claude Schimper: Meanwhile, the heap leach pad expansion is progressing on schedule, earthworks and procurements are all complete, and initial production from phase S remains on track to beginning the second half of next year.
Jeff Gold: ORTNOX is our only Valleyfield keep-leach operation, and again, the two pads there are 100% run-of-mine ore. Finally, it is also worth noting that the embankments at the toe of the valley paths at Fort Knox are designed, engineered, operated, and monitored as dams based on state regulation in Alaska, which ensures strong governance on construction and stability. Moving to updates at Round Mountain. At Phase X Underground, the development of the exploration decline continues to progress well, with over 2.2 kilometers of the decline developed so far.
Claude Schimper: With that, I'll now post the call over to William.
William: Thanks, Claude. I'll start out by providing a brief overview of our operating heap leach facilities before moving on to an update on our projects.
William: We are currently operating heap leach facilities across three sites in the U.S. As Paul mentioned, we are confident in the quality and safety of our heap leach facilities for a few reasons.
Claude Schimper: First off, our facilities are primarily run-of-mine heap leach pads, meaning they have larger rocks than crushed heap leach pads, which significantly reduces the risk of liquefaction and increases the structural stability of the pads.
Paul Rowlandson: The only heap leach we have with crushing is Round Mountain, where we are only crushing a portion of the ore we are placing on the pads, so overall still have larger rock sizing than a fully crushed pad.
William: Second, topography. Both Round and Bald Mountain are built on relatively level ground rather than hillsides or valley hills, increasing their stability.
Claude Schimper: Fort Knox is our only Valley Filth Cheap Leach operation, and again, the two pads there are 100% run-of-mine ore.
Claude Schimper: Finally, it is also worth noting that the embankments at the toe of the valley pads at Fort Knox are designed, engineered, operated, and monitored as dams based on state regulation in Alaska, which ensures strong governance on construction and stability.
Speaker Change: So overall, we are confident in the quality of our heat bleach facilities, and as always, we will maintain the safety and environmental impact of these facilities as our top priority.
Speaker Change: Moving to updates at Round Mountain.
Speaker Change: At Phase X Underground, the development of the exploration decline continues to progress well, with over 2.2 kilometers developed so far.
Jeff Gold: Exploration drilling has also progressed well as we have started infill drilling of the primary phase X target and continued opportunity drilling outside of the target to extend the mineralization. As you can see in Figure 1 at the top of this slide, we have received multiple strong assay results on intercepts outside of the Phase X target.
William: Exploration drilling has also progressed well, as we have started infill drilling of the primary phase X target and continued opportunity drilling outside of the target to extend the mineralization.
William: As you can see, on Figure 1 on the top of this slide, we have received multiple strong assay results on intercepts outside of the Phase X target.
William: Of particular note, you can see in the bottom of Figure 2 an impressive intercept of approximately 30 grams per ton over 32 meters above the lower portion of our primary exploration target, shown in purple.
William: There is also a link to a video on the slide and our press release that can give you a better sense of the location of these intercepts.
William: We are pleased to see these results and confirmation of the potential to extend the mineralization that we are targeting for underground mining.
Paul Rowlandson: We will continue our exploration program at FASAX through the remainder of this year and into next as we advance technical studies in parallel. Moving to Curlew Basin, exploration continued to advance in the second quarter. We are encouraged by these higher grade results, which indicate potential to expand the resource and improve the overall resource quality. This hole returned 3.8 meters at a grade of 9.5 grams per ton at nearly 1.6 kilometers vertical depth, demonstrating the impressive continuity of this system that will ultimately need to be drilled out from underground.
William: We will continue our exploration program at FASAX through the remainder of this year and into next as we advance technical studies in parallel.
Claude Schimper: Moving to Curlew Basin, exploration continued to advance in the second quarter.
William: Results from the underground drill program continue to confirm thicker zones of high-grade mineralization near the stealth zone, where a recent assay returned approximately 14 grams per ton over 19 meters.
William: Drilling from both surface and underground also continued on the Roadrunner vane zone, with a recent hole returning 12.5 grams per ton over 2.4 meters.
William: We are encouraged by these higher grade results which indicate potential to expand the resource and improve the overall resource quality.
William: At Great Bear, drilling continues to focus on demonstrating that high-grade mineralization continues well beyond our current resource.
William: As Paul mentioned, in Q2, we drilled the deepest hole on the property to date. This hole returned 3.8 meters at a grade of 9.5 grams per ton at nearly 1.6 kilometers vertical depth, demonstrating the impressive continuity of this system that will ultimately need to be drilled out from underground.
Paul Rowlandson: Drilling in the second quarter also showed good grades and widths at depths well beyond our current resource at the Discovery, Yarrow, and Arrow Zones, as can be seen on this slide. Work on the initial project PEA is well advanced, and we look forward to releasing the results of the study in early September. Our business remains in great shape and on track to deliver our full year.
Speaker Change: Drilling in the second quarter also showed good grades and widths at depths well beyond our current resource at the Discovery, Yarrow, and Arrow zones, as can be seen on this slide.
Speaker Change: Similar to Yuma, these zones continue to show potential for significant resource upside and growth at depth.
William: Lastly, drilling at Hinge and Limb this quarter has returned promising results for depth extensions at both zones.
William: At hinge, we had multiple strong intercepts at around 850 meters, including 9.3 grams per ton over 3.1 meters and 22.7 grams per ton over 3.1 meters.
William: We are excited to be seeing confirmation of depth extensions to mineralization across the board at Great Bear, continuing to support our original thesis of a long-life, high-grade mining complex.
William: Moving to a few other updates at Great Bear.
Speaker Change: For the AEX decline, detailed engineering, execution planning, and procurement continued to progress well. We are targeting a start of early works later this year and start of the underground decline in mid-2025.
William: For the main project, in Q2, we continue to advance technical studies, fieldwork, and comprehensive baseline studies.
William: Beyond the strong exploration results, we are encouraged to see the in-depth technical work continuing to show positive results across the board, including simple metallurgy, high recovery, and competent geotechnical conditions.
William: Work on the initial project PEA is well advanced and we look forward to releasing these results from the study in early September .
William: I will now turn the call back to Paul.
Paul Rowlandson: Thanks, Will. Following a strong first half...
Paul Rowlandson: Our business remains in great shape and on track to deliver our full year commitments.
Operator: There is much to look forward to for the remainder of the year, and beyond that, we remain excited about our future. We have an investment grade balance sheet that is continuing to strengthen. Looking forward, we have an exciting pipeline of both exploration and development opportunities. Thank you. The floor is now open for questions. If you are called upon to ask your question and are listening via the loudspeaker on your device, please pick up your handset to ensure that your phone is not on mute when asking your question.
Paul Rowlandson: There is much to look forward to for the remainder of the year, and beyond that, we remain excited about our future.
Paul Rowlandson: We have a strong production profile.
Paul Rowlandson: We are generating significant cash flow.
Paul Rowlandson: We have an investment grade balance sheet that is continuing to strengthen.
Speaker Change: You have an attractive dividend.
Paul Rowlandson: Looking forward, we have an exciting pipeline of both exploration and development opportunities.
Paul Rowlandson: And we are very proud of our commitment to responsible mining that continues to make us a leader in sustainability.
Speaker Change: With that operator, I'd like to open up the line for questions.
Speaker Change: Thank you. The floor is now open for questions.
Speaker Change: If you have dialed in and would like to ask a question, please press star 1 on your telephone keypad to raise your hand and join the queue. If you would like to withdraw your question, simply press star 1 again.
Speaker Change: If you are called upon to ask your question and are listening via loudspeaker on your device, please pick up your handset to ensure that your phone is not on mute when asking your question.
Speaker Change: And again, press star 1 to join the queue. Your first question comes from the line of Josh Wolfson of RBC Capital Markets. Your line is open.
Unknown Executive: Thanks very much. The first question is on the production guide. I think there was this commentary earlier this year about the first half being softer. Given that production has been so strong, is it reasonable to expect to step up still in the second half on some of the prior guided items? Setups going and making sure that we meet to, you know, continue to go with our guidance for the, Okay, so you wouldn't expect an improvement for those specific assets in the back half.
Josh Wolfson: Thanks very much. First question is on the production guide. I think there was this commentary earlier this year about first half being softer. Given that production has been so strong, is it reasonable to expect a step up still in the second half on some of the prior guided items?
Josh Wolfson: Good morning Josh, Claude here. We've remained focused, we've had a very solid first half of the year. But we've got some mind sequencing setups going and making sure that we continue to go to our guidance.
Josh Wolfson: So relative to the mind sequencing, both at TASIUS and at PARAC2, we expect to be brought on guidance.
Josh Wolfson: for the
Speaker Change: Ok, so you wouldn't expect an improvement for those specific assets in the back half?
Unknown Executive: Now we're remaining on our plan, which did have us pushing a little bit harder in the first quarter for those two big ones, and then the rest of the portfolio, we've got some puts and takes, which gives us Set just right up on Garden. Second question, on the Great Bear upcoming PEA, there's been some impressive exploration that we've seen, at least reported, post the cutoff date as of April for the study.
Speaker Change: We're remaining on our plan, which did have us pushing a little bit harder in the first quarter for those two big ones, and then the rest of the portfolio, we've got some puts and takes, which gives us...
Speaker Change: Sets us right up on guidance.
Speaker Change: Got it, okay.
Speaker Change: Second question, on the Great Bear upcoming PEA, you know, there's been some impressive exploration that we've...
Speaker Change: We've seen at least reported post the cutoff date as of April for the for the study Is there any sort of potential we get a resource update as well that might even though it might not be included with the economics But you know possibly we'll see what what the what the expiration upside has been this far
Speaker Change: Yeah, we will plan to update the resource at the time that we put out the PEA, just to make sure it's kind of the two pieces of the picture tied together with latest information. We've closed off the drilling for that as of April . That's where we'll be. Yeah, there's always, as you can appreciate, a lag.
Speaker Change: but obviously as we're coming to the market with an update we'll bring whatever else we can at that time.
Speaker Change: A little bit of some moving parts this quarter and also the first quarter, working capital inflows were very strong, which helps free cash flow. But cash taxes also have been tracking, at least in the first half, fairly high versus the annual guide. Any sort of commentary you can provide on whether we'll see cash taxes maybe decline in the back half?
Speaker Change: or are working capital outflows reversed, at least in the second half?
Speaker Change: Sure. I'm Josh. It's Andrea. The working capital, you know, has been closed. So in Q1, we had a networking capital outflow. Q2, it was an inflow.
Speaker Change: You know, that just sort of cycles throughout the year. It's really just around timing. At the end of Q2, our payables were higher.
Speaker Change: Those are just things that we've paid.
Speaker Change: in July . So nothing really of note there.
Speaker Change: We did make an installment payment in Mauritania of $25 million, so that's probably the one piece that's outside of where we started the year. Other than that, our taxes should be kind of as expected through the year.
Speaker Change: with the Gold Price Sensitivity which I provided in our guidance.
Speaker Change: Okay, thank you very much.
Unknown Executive: Is there any sort of potential that we get a resource update as well that might, even though it might not be included with the economics, but possibly we'll see what the exploration is like. But obviously, as we're coming to the market with an update, we'll bring whatever else we can at that time, with the gold price sensitivity which we provided in our guidance. Your next question comes from the line of Lawson Winder of Bank of America Securities. Your line is open. Good morning, team, and thank you for the update. Just a couple for me.
Speaker Change: Your next question comes from the line of Lawson Winder of Bank of America Securities. Your line is open.
Unknown Executive: Where I actually wouldn't mind starting is just on your thoughts around the year-end reserve and resource update for the assets other than Great Bear. Is there any thought internally to potentially increasing the gold price assumption? And if so, which assets would have the greatest sensitivity to that? And then, secondly, and now given, you know, a full half of drilling, which assets are looking well placed to potentially replace reserves? Thanks. Sure, I'll start, and others can maybe jump in.
Lawson Winder: Thank you, Operator.
Lawson Winder: Good morning, team, and thank you for the update. Just a couple for me. Where I actually wouldn't mind starting is just on your thoughts around the year-end reserve and resource update for the assets other than Great Bear.
Speaker Change: And it's now given, you know, a full half of drilling, which assets are looking well placed to potentially replace reserves.
Lawson Winder: Thanks.
Speaker Change: I'll start and others can maybe jump in.
Speaker Change: It's a fair question. I think we're all sort of looking at SPLOT and where we've had our reserve resource price assumptions and thinking about what we will or will not do
Speaker Change: That's a decision we'll make later in the fall as we go into our budget cycle.
Unknown Executive: I think it's for today, all I'll say is it's, Steady as she goes. I would say, though, that our focus is really about margin and cash flow. Our mills are full. We're stockpiling low grade.
Speaker Change: towards November into December . So I think it's for today all I all I'll say is that
Speaker Change: sort of steady as she goes.
Speaker Change: I would say, though, that our focus is really about margin and cash flow.
Speaker Change: Our mills are full. We're stockpiling low-grade.
Unknown Executive: And as we sit here today, you know, the higher gold price really drives the margin on the cash flow. So when we think about the reserve resource, and as you point out, each asset's a little different.
Speaker Change: And as we sit here today, you know, the higher gold price, it really, what it really drives is the margin on the cash flow. So when we think about the reserve resource,
Speaker Change: There may be some opportunities there, but all under the heading of maintaining margin and cash flow.
Speaker Change: and as you point out each assets a little different
Speaker Change: The asset in our portfolio that has the largest resource where we'll think carefully is Great Bear, sorry, Ball Mountain, where we've got about 4 million ounces of resource. So we'll be thinking about that as we go further into the fall.
Speaker Change: Okay, that's very helpful, Culler.
Speaker Change: A little bit and ask on M&A
Speaker Change: I'll preface it with the statement that I understand Ken Ross is in a pretty good position in terms of projects in the portfolio, especially in the near term and long term with Great Bear.
Speaker Change: What is Kinross' thinking in terms of potentially being opportunistic in M&A and also with the context that the Kinross Gold valuation has improved over the last year and the cash position has improved?
Ken Ross: You know, sure, look, and I think you got it right, Lawson, I mean, we're in great shape with our organic portfolio.
Unknown Executive: We've got lots of opportunities within our budget that we can turn on, and we will be looking to further advanced studies in economics. So that's one bit of good news. The portfolio itself, we've got an excellent balance sheet. We're certainly not under any pressure to do anything in that regard.
Ken Ross: We've got lots of opportunities within our
Speaker Change: Within our portfolio that we can turn on and we will be looking to further advanced studies in economics. So that's one bit of good news. The portfolio itself, we've got an excellent balance sheet.
Speaker Change: We're certainly not under any pressure to do anything in that regard. So when we think about M&A, it's really...
Unknown Executive: So when we think about M&A, it's really when you use the word opportunistic, it's... And again, I would say we have a very strong technical acumen; we can bring that technical acumen to bear to help turn things around to help improve them. We also have an excellent balance sheet, and so we can bring capital to the equation. So, not under any pressure, if something came along that made sense where we thought we could create value for our shareholders, we'd have a look at it.
Speaker Change: When you use the word opportunistic, it's...
Speaker Change: Where can we see value? Where can we add value?
Speaker Change: And again, I would say we have a very strong technical acumen. We can...
Speaker Change: We can bring that technical acumen to bear to help turn things around, to help improve. We also have an excellent balance sheet.
Speaker Change: and so we can bring capital to the equation. So not under any pressure. If something came along that made sense where we thought we could create value for our shareholders, we'd have a look at it.
Unknown Executive: Okay, and then just finally on Nevada. Tell us, Claudienne, I think the commentary is fair, we are still seeing a positive trend on our turnover rates and the morale and things like that as we move forward with the, feel very comfortable about what it is that we're doing. Okay, thanks, Paul. Thanks, Claude. Appreciate it.
Speaker Change: Okay and then just finally on Nevada
Speaker Change: in an area where...
Speaker Change: Over the past number of years, there's been difficulty with finding skilled labor, and there's been some elevated labor inflation. On the Q1 call, you commented that you are seeing an improvement.
Speaker Change: Both in terms of employee turnover as well as pressure on wages. Is that commentary still fair? What are you seeing in a one quarter later? Thanks.
Speaker Change: I think the commentary is fair. We are seeing still a positive trend on our turnover rates and the morale and things like that. And as we move forward with the
Speaker Change: With the teams in Nevada, we're performing very, very well. So we're going in the right direction.
Speaker Change: It is still a tight labor market, but it's going to get better.
Speaker Change: We feel very comfortable about what it is that we're doing.
Speaker Change: Okay, thanks, Paul. Thanks, Claude. Appreciate it.
Speaker Change: Your next question comes from the line of Mike Tarkin of National Bank. Your line is open.
Unknown Executive: Thanks, guys, congrats on a good quarter. To start with, Patasius looks like it's doing very well on its nameplate, just wondering now with operations kind of running around nameplates. Are there any initial thoughts that the main plate capacity could potentially be beaten a bit? And if so, is the mine set up where it could actually leverage that? Or is the constraint really more on the mine warrior? Could you actually utilize excess capacity if it exists?
Mike Tarkin: Thanks guys, congrats on the good quarter.
Mike Tarkin: To start with, you know, Tassius looks like it's doing very well to its nameplate. Just wondering now with...
Speaker Change: Operations kind of running around the plate.
Speaker Change: Are there any initial thoughts that main plate capacity could potentially be beaten a bit and if so
Speaker Change: Is the mine set up where it could actually leverage that, or is the constraint really more on the mine, or could you actually utilize excess capacity if it exists?
Claude J. S. Schimper: Yeah, Mike, and Claude again, I think our major focus is Chassis has gone through 10 years of being in the project phase, and we're now six months into it being an operating mine at full tilt. We'd like to stabilize it there for some time and make sure that we meet the expectations. But we've always said that we're always looking at opportunities to improve recovery, how to improve throughput. I don't think we're constrained by the mine; we have some stockpile. So the real focus is on just making sure that we attain the reliability that we expect out of that plant and maintain its performance.
Speaker Change: We'd like to stabilize it there for some time and make sure that we meet the expectations. And but we're always, having said that, we're always looking at opportunities on how to improve recovery, how to improve throughput.
Unknown Executive: And then we'll look at, So incremental, continuous improvement, little things, but I don't foresee in the near to medium term an expansion again at that particular site. Give a number of the drill results you've been kind of highlighting with the recent quarterly results, seemingly multiple times what the resource grade is. How are your thoughts there? Are you gonna put a fairly significant grade cap on some of those really high grade hits?
Speaker Change: Great, thanks. And then it sounds like we could see an uptick...
Speaker Change: in ounces or tons at phase X.
Speaker Change: How are your thoughts there? Are you going to put a fairly significant grade capping on some of those really high grade hits?
Unknown Executive: You know, with a resource update, can we actually see a lift in grade two with the ongoing impressive results you're seeing from that drill program? Yeah, I mean, obviously, we're very pleased with the results that we're seeing, and it is higher than, you know, the grade of the target that we're going after there from the historic drilling. Round Mound does have a long history of, you know, positive reconciliation and pretty, pretty much a lot of visible gold, that type of thing.
Speaker Change: With a resource update, can we actually see a lift in grade 2 with the ongoing impressive results you're seeing from that drill program?
Speaker Change: Yeah, I mean, obviously we're very pleased with the results that we're seeing and it is higher than, you know, the grade of the target that we're going after there from the historic drilling. Round Mound does have a long history of, you know, positive reconciliation and pretty, a lot of visible gold, that type of thing.
Unknown Executive: So there will be capping and some patrols on that when we do establish a resource for the underground. We don't have a resource out there yet that's specific to that underground target. That's something that'll come in next year. But certainly, there would be, as usual in that type of deposit, some amount of capping. So with respect to the results. You know, we really need to do the work and come up with a better answer once we have an actual resource. We obviously see these types of grades make us more comfortable with why we're down there and the long-term margin potential that we see there. And there are two pieces.
Speaker Change: Okay, we're really getting into the drilling on the main bulk target now and that's the key piece is the overall grade for that bulk high productivity mining. That's our vision for this asset.
Speaker Change: Obviously seeing these types of grades makes us more comfortable with why we're down there and the long-term margin potential that we see there. And there's two pieces, it's not just the grade that has us pleased with the results, it's the fact that these results...
Unknown Executive: It's not just the grade that has us pleased with the results, but the fact that these results are outside of the main target area. So there are two key pieces. One is growing the target.
Unknown Executive: The other is growing the grade of the target. These drill results are positive indicators on both of those fronts. But we don't really, until we get more drilling, we don't have a revised view of the entire system. Unknown Speaker Again, this is really, this is really a bulk target, I mean, in what we're envisioning and some of what we've put out there in the past. And maybe it's too early, but how do you feel about the quality of the rocks there? Do you feel that there'll be any kind of geotechnical challenges? Or do you find that the rock is expected to be extremely competent for underground mining?
Speaker Change: are outside of the main target area. So there's two key pieces. One is growing the target. The other is growing the grade of the target. These drill results are positive indicators on both of those fronts. But we don't really, until we get more drilling, we don't have a revised view on the entire system.
Speaker Change: One last question on it. You know, some of the intercepts also are showing, you know, very good widths. Is that proving in line with expectations internally? Or are you finding some of the really wide intercepts actually proving
Speaker Change: This is really a bold target. I mean, in what we're envisioning and some of what we've put out there in the past, this is...
Speaker Change: Large stoping, wide stopes, transverse stoping of some sort. So we see widths well in excess of what we've released recently in some of our historic drilling.
Speaker Change: And maybe it's too early, but how are you kind of feeling about...
Speaker Change: The quality of the rocks there, do you feel?
Speaker Change: That there'll be any kind of geotechnical challenges, or do you find the rock is expected to be extremely competent for underground mining?
Unknown Executive: Yeah. Given the history of underground mining in Nevada, we certainly went into this cautiously and with a pretty wide tool set in terms of how we prepared ourselves to handle geotechnical conditions. We do have some faults that we were well aware of in advance and that we planned for as we progressed the decline, but really, we've been extremely pleased with the progress of the operational team on site and what they've done from a geotechnical perspective.
Speaker Change: pretty wide tool set in terms of how we prepared ourselves to handle geotechnical conditions. We do have some faults that we were well aware of in advance that we planned.
Speaker Change: for as we progress the decline, but really we've been.
Unknown Executive: And that's increased our confidence in our ability to operate in this ground. It's not extremely competent ground, but it's also not extremely poor ground that we've seen at some other assets in Nevada in the past. So we're comfortable with where we're operating and the controls we have in place. Okay, great. And then just on an overarching kind of question. Obviously, you're getting really great exploration results out of all this. These assets, Curlew, Great Bear, and Round Mountain Feedback.
Unknown Executive: Is there any thought, like, could you put more drills to work, or is it just, you know, as you kind of need these additional drill bays in the underground to kind of get things going? Like, I understand a grate there. Obviously, it makes a heck of a lot more sense to drill from underground than from the surface, given the depth. So, I mean, I'd say at Great Bear specifically, the idea of this deep drilling was to provide information for the PEA to give you kind of a snapshot in time view of what the potential of the underground is. This is deep and expensive drilling. So, as you clearly understand, it is more efficient to drill at one and a half kilometers from underground to the actual infill drilling.
Speaker Change: Is there any thought, like, could you put more drills to work, or is it just, you know, as you, you kind of need these...
Speaker Change: You know additional drill bays in the underground to kind of get things going like I understand it great there Obviously it makes a heck of a lot more sense to drill from underground than from surface given the depth
Speaker Change: It makes sense to test it, but to really infill it in cost efficiency from underground makes a lot of sense. But is there thoughts towards increasing budgets?
Unknown Executive: But of course, when we're encouraged by results, not just at Great Bear but at other places like Phase X, when you get good results, it does sometimes open up the opportunity to do more follow-up drilling. So we continuously review that process. Good morning, guys.
Speaker Change: We're going to increase those budgets. We'll certainly let you know. Right now, we think we've done what we wanted to with Greybear in terms of...
Speaker Change: illustrating and providing a strong view on on that kind of core of the deposit so that we'll be able to give a PEA with an understanding on costs and margins and we've shown that the ore body continues beyond that.
Speaker Change: Really, with this underground type of system, this resource will develop over a long period of time as we continue to mine, and we keep that material in front of us going from underground.
Speaker Change: Okay, thanks very much. That's it for me.
Speaker Change: Your next question comes from the line of Carey MacRury of Canaccord Genuity. Your line is open.
Unknown Executive: I'm just looking to 2025, giving it, I know that doesn't include improved projects, but I'm assuming that includes the underground work at Great Bear. But I guess what I'm asking is, are there other projects that we should be expecting that could be approved? bump up the 2025 CapEx number. Sure, I'll start, and we'll maybe jump in after with some specifics.
Kerry McCrory: Good morning, guys. I'm just looking to 2025, given it's less than six months away, the capital guidance of 850.
Kerry McCrory: I know that doesn't include improved projects, but I'm assuming that includes the underground work at Great Bear. But I guess what I'm asking is, are there other projects that we should be expecting that could be approved and, you know, bump up the 2025 CapEx number?
Speaker Change: Sure, I'll start and we'll...
Unknown Executive: But yeah, I mean, we typically say, you know, as you said, we print the guidance for CAPEX for years two and three based on what's approved. And that typically flows up, and we're expecting CAPEX for twenty-five. So Phase X is an example of a project where, you know, we're still doing the work. So that doesn't yet have beyond the kind of exploration work that we're doing. There is not yet an approved budget for next year.
Speaker Change: We typically say, as you said, we print the guidance for CapEx for years 2 and 3 based on what's approved and then it typically loads up and we're expecting CapEx for 25 to be approved.
Speaker Change: Please see the complete disclaimer at https://sites.google.com
Speaker Change: So, Phase X is an example of a project where, you know, we're still doing the work, so that's not, that doesn't yet have...
Speaker Change: Beyond the kind of exploration work that we're doing there's not an approved budget for next year
Unknown Executive: So those are the things that will extend it. Curlew is somewhere else where it's possible we'll be starting to spend some money. And we're looking at some short extensions of Bald Mountain that could affect that number. So our Chile strategy really, we've got the resources in the ground, around our infrastructure at Lacoipa, continuity of production is really a permitting exercise. And we're going through that right now. As I say, we've got to get a permit to do a layback, that sort of thing.
Speaker Change: So those are the things that will extend it. Curlew is somewhere else where it's possible we'll be starting to spend some money. And we're looking at some short extensions at Bald Mountains that could affect that number.
Speaker Change: You know, did metal prices change that timeline at all?
Speaker Change: So our Chile strategy really, we've got the resources in the ground.
Speaker Change: around our infrastructure at Lacoipa.
Unknown Executive: Our strategy is, What we envision is a linear transition from Lacoipa to Lobo by the end of the decade. So our view is we should switch from La Coipa to Lobo towards the end of the decade. Great. And maybe one related question. I know there were regulatory issues at Mariconga for a while. Okay, well, like I think again, it's this option value there, you're right, it's a drilled out resource. Again, water is always a question in Chile, what the water strategy would be that is a different water source and water basin, but, Yeah, there's no plans right now as it relates to Maricunga, but
Speaker Change: Our strategy is, what we envision is a linear transition from Lacoipa to Lobo.
Speaker Change: towards the end of the decade. So our view is.
Speaker Change: We get those permits. We keep mining the oxide. What we're just starting to do right now is ramp up our environmental baseline studies.
Speaker Change: to start to think about bringing Lobo in behind Great Bear towards the end of the decade. At a high level, that's really what's going on. And our strategy there, our key strategy is...
Speaker Change: The synergy is around the water strategy.
Speaker Change: As you may know, we have permanent pumping water wells.
Speaker Change: and have operated for many years at LeCoipa.
Speaker Change: Okay well like I think again it's there's option value there you're right it's drilled out resource again water is always a question in Chile what it would be the water strategy that is a different water source and water basin but
Speaker Change: But it is a drilled out resource that we'll continue to think about.
Speaker Change: Okay, great. That's it for me. Thanks, guys.
Speaker Change: Your next question comes from the line of Anita Soni of CIBC World Market. Your line is open.
Unknown Executive: But it is a drilled out resource that we'll continue to think about. Hi, good morning, Paul, Claude, and Andrea. I just wanted to ask, firstly, on PARCCA2, so the grades picked up in this quarter, and I was just wondering how that evolves over the rest of the year, maybe a little bit lower than last time. But as we move from one part of the pen to the next, towards the end of the year, we go back into the higher grade piece, and then you'll appreciate that when we talk about higher grade America, too, it's a marginal difference. Yeah, and next year I'll get it. Maintain focus on that power, 10,000 volts.
Anita Soni: Hi, good morning, Paul, Claude, and Andrea. I just wanted to ask, firstly on PARCCA2, so the grades picked up in this quarter, and I was just wondering how that evolves over the rest of the year.
Speaker Change: Thank you.
Speaker Change: a little bit lower than last year.
Speaker Change: But as we move from one part of the pen to the next, towards the end of the year we go back into the higher grade piece. And then you'll appreciate that when we talk about higher grade, it's a marginal difference. And next year I'll guide us.
Speaker Change: Higher and similar to last year, whereas this year is the dip-outs. We maintain focus on that 510,000 LTI.
Speaker Change: Yeah, what I'd say is, you know, at gold prices where they are now, I don't expect that we'll get through the whole term loan this year, so we'll carry some forward into the first half of next year, the maturity is March 2025, but you know, typically we've got some more chunky
Speaker Change: is coming in a Q1. So.
Speaker Change: There may be a little bit left as we get into this.
Speaker Change: It's really a timing thing. I mean, we had close to $500 million at June 30th.
Speaker Change: And then, as I commented earlier, our payables were a bit up at the end of the quarter, so that cash came down.
Speaker Change: In July , we typically, you know, our minimum cash is around $300 to $350 million. Sometimes it's more and it just depends on...
Speaker Change: Plans to efficiently move cash around our operations.
Speaker Change: Okay and then my last question I'm just going to tie up some loose ends because no analysts are asking like around the edges around this one but
Speaker Change: Could you talk about some of the assets that might see an extension to fill in that dip? I know you guys have said you see the 2 million ounces sustained to the end of the decade. I just want to get an idea of which assets could turn on stream and flatten that profile in analyst models.
Unknown Executive: Yeah, sure, it's all here. I think. 2027 in particular, we're thinking about Phase X coming on stream. [inaudible] We do have about 4 million ounces of resource there. We've been focused on the lower capital, quick payback opportunities. We see some of those, but there are certain on the ball property some larger capital opportunities. And again, in that regard, it's just really about internal.
Speaker Change: I think 2027 in particular, we're thinking about Phase X coming on stream in combination with Phase S.
Speaker Change: and, of course,
Speaker Change: Our intention is to keep mining through permitting known resources through the end of the decade. So those three, in particular,
Speaker Change: Yeah, there are some things, 12 miles is a bigger question, again, as I said earlier.
Speaker Change: We do have about 4 million ounces of resource there. We've been focused on the lower capital quick payback opportunities. We see some of those, but there are certain...
Speaker Change: on the ball property, some larger capital opportunities.
Speaker Change: Again, in that regard, it's just really about internal...
Speaker Change: Gold price competition for capital return.
Speaker Change: The gold is in the ground, we're just looking at the economics and thinking about...
Speaker Change: We have just received a Juniper permit, which is a significant optionality expansion at Bald Mountain, so we're well-permitted, and everything is basically internal decision-making and capital allocation.
Speaker Change: Thank you. That's very helpful.
Unknown Executive: Your next question comes from the line of Tanya Jakusconek of Scotiabank. Your line is open. As far as Barrister 2 is concerned, all of those are into the early next year. Yeah, I mean, it may have become apparent that we're really trying to flatten out the waves in the quarters over the last couple of years at Kinross. So, you know, we keep focusing on being in that 500. Your next question comes from the line of Ralph Profiti of 8 Capital.
Speaker Change: Your next question comes from the line of Tanya Jakusconek of Scotiabank. Your line is open.
Tania Jakuska-Konek: Oh, great. Good morning, everyone. Thank you so much for taking my questions. I have three. First of all, congrats on a good quarter and thanks for the heat bleach information. You don't need any more issues in this sector. So it's sad to see that these things happen.
Speaker Change: You mentioned that higher grades, relatively higher grades at Parag 2 and Q4, obviously Mancho in Q4, it looks like Q4 should do better. I just want to know is there any maintenance shutdown in any aspects in Q3 or Q4 that I
Speaker Change: Yes, so for TASIUS we're getting to the point where we have to do big liner changes, so that's happening in Q3.
Speaker Change: and we do have sort of run-of-mind stuff happening at the Kuiper as well in terms of shutdowns and those two will have an influence. As far as Barracuda is concerned, a lot of those are into the early next year.
Speaker Change: Okay, so if I look at that should I be thinking that these two last quarters should be relatively similar if I was to you know adjust for these maintenance in Q3?
Speaker Change: Yeah, I mean it may have become apparent that we're really trying to flatten out the waves in the quarters over the last couple of years at Kinross, so, you know, we keep focusing on being in that 500.
Speaker Change: 2 million divided by 4, it's out of range. 500, 525. It's just 2.1. We're focusing on making it more sort of repetitious, versus these highs and lows.
Speaker Change: Okay, now that's helpful. Thank you so much for that.
Unknown Executive: Your line is open. We're very pleased to see that we have an excellent relationship with him, showing himself to be very much a pro-business. The country itself, I think, prides itself on the stability that they offer in the region.
Speaker Change: Re-elected with a strong majority. We're very pleased to see that. We have an excellent relationship with his administration and he's shown himself to be very much a pro-business
Speaker Change: And it's really a...
Speaker Change: You know.
Unknown Executive: So we're not really expecting anything really that's going to change. You may also recall that we actually have a stability agreement that we signed that gives us clarity on our fiscal regime. We renegotiated that a few years ago. So the short answer is no, not expecting any changes. Obviously, the elections happened.
Speaker Change: That's going to change.
Speaker Change: Not expecting any changes. Obviously the elections happened, it's sort of summer politically there now, and I expect there may be a reshuffling of the cabinet.
Unknown Executive: It's sort of summer politically there now, and I expect there may be a reshuffling of the cabinet. We're looking for, I'm personally planning to get over there and... If I could just get an update with respect to Great Bear and the AEX permit. We're still a ways off from the underground decline in mid-2025, but just wondering how we're sort of tracking, maybe get sort of a firmer timeline on when that, Again, is well underway. I'll let Jeff speak to the timing of it. Thanks. That's what I was looking for. I appreciate it. I had three to start; now I have two.
Speaker Change: It's all very stable and very good.
Speaker Change: Okay, thanks for that. And if I could just get an update with respect to Great Bear and the AEX permit and just wondering if you sort of measure it against precedent. You know, we're still a ways off from the underground decline in mid 2025, but just wondering how we're sort of tracking, maybe get sort of a firmer timeline on when that permitting can come due.
Speaker Change: Yeah, sure. Maybe I'll start and then I'll ask Jeff to jump in. He's been leading the charge, so to speak. You're right. So, the strategy, the permit strategy there is really divided into two parts.
Jeff Gold: Provincial permits that'll support the AEX the exploration decline and you know again we've been hard at work at that and
Jeff Gold: I'll let Jeff comment on sort of our expectations on timing.
Jeff Gold: And then the second part, Build the Mine, as you recall.
Jeff Gold: If you're greater than 5,000 tons per day in the mill, you get kicked into a federal review.
Jeff Gold: So we've got a parallel permit strategy going for the main project, which is naturally somewhat lagging behind the exploration, and in that regard,
Jeff Gold: Again, well underway. I'll let Jeff speak to the timing of...
Speaker Change: Turning to AAX, our team has completed a tremendous amount of work with the Ontario authorities and our First Nations partners, Wabuskang, Alak Soul, and they provided express letters of support to the authorities for AAX permits.
Jeff Gold: We're expecting our AAX permits in the near term.
Speaker Change: You know with a view to commencing early works and
Jeff Gold: We're waiting on IAC to provide the tailored Impact Study Guidelines, which we're also expecting in the near term, and as you'll appreciate, that will underpin the Impact Assessment
Jeff Gold: Report. And so on both fronts, I would say we're in good shape and we're making, you know, great, great progress.
Jeff Gold: We have a follow-up question from Tanya Jakusconek. Your line is open.
Andrea Susan Freeborough: Just wanted to come back, Andrea, just on the balance sheet again. I think in the previous conference call, we talked about 300 million reduction this year. You've done 200.
Tanya Jakusconek: I had three to start, now I have two.
Tanya Jakusconek: I just wanted to come back, Andrea, just on the balance sheet again, I think in the previous
Andrea Susan Freeborough: Should I be thinking another 100 or, with this stronger free cashflow generation, could we see more occurring in 2024? And then I think you said another 500 million or thereabout repayment in 2025? Now, at what we've seen recently, more in the $700 million range is what we'd expect for this year. So, as I said earlier, we will have some left next year, but... You know, a lot lower than we had talked about as we started the year.
Kenya: Yeah, Tanya, I think looking back at 300 was when we were talking about 2000 gold.
Speaker Change: So, our sensitivity is, you know, for every $100 in gold price, it's an additional $200 million in cash flow. That's an annual number. So, we've obviously seen higher gold prices, so that $300 is
Jeff Gold: You know, a lot lower than we had talked about as we started the year.
Jeff Gold: Yeah, again, pick your gold price, but at $2,300, you know, we...
Andrea Susan Freeborough: Okay, that's very helpful. Thank you so much for that. And then my last question is just on right here. And I think, Paul, on the previous conference call, we had talked about the 10,000 ton per day scenario, sort of 5 million ounces giving us that 500,000 ounce annual production. We're not caught off guard by the release. Sure. Yeah, that's a good point, Tanya. I mean, I feel good about the direction we're going there as well.
Speaker Change: Those are quite stale numbers. Should we be thinking something in the sort of 10% to 15% inflation adjusted for these? They're just old numbers. So we just want to make sure that we're not caught off guard on the release.
Jeff Gold: Sure, yeah, that's a good point, Tanya. I mean,
Andrea Susan Freeborough: So look again, and that's in the context of today. I guess what I'm trying to say is this is an inflation around the edges, it's not a dramatic departure in what we thought the capital would be, it's... We forecast that we'll be quite manageable with our existing cash flow, and so I guess I'm trying to, you know, the report will be out in a month, but I'm managing expectations that... We're recently on track with where we indicated we would be, and it's not longer and it's just you know we appreciate that that will be a 2024 number and then obviously by the time we build you know you know later a couple years out it will be different at that point but appreciate the color. Thank you.
Speaker Change: We expect we'll probably continue, but not, I guess what I'm trying to say is this is inflation around the edges. It's not a dramatic departure in what we thought the capital would be.
Jeff Gold: We're recently on track of where we indicated we would be.
Speaker Change: sort of sale numbers that we had of like three, four years ago. And it's not longer. And it's just, you know, we appreciate that that will be a 2024 number. And then obviously, by the time we build, you know, you know, later a couple years out, it will be different at that point, but appreciate the color.
Speaker Change: Thank you.