Q2 2024 Agnico Eagle Mines Ltd Earnings Call
Conference call.
Speaker Change: All lines have been placed in mute to prevent any background noise.
After the Speakers' remarks, there will be a question and answer session. If you'd like to ask a question. During this time simply press Star then the number one on your telephone keypad. If you would like to withdraw your question. Please press the star followed by the number two thank you Mr. Amaral, Judy you may begin your conference.
Judy: Good morning, and thank you for joining US today, we are very excited to be reporting another exceptional quarter and to share with you. Some of the important work. The teams are focused on to create additional value.
Speaker Change: Some of the highlights. This quarter include continued strong operational performance with excellent cost control. This focus on cost control has allowed us to deliver for our owners tremendous leverage to increased gold prices as demonstrated by our third consecutive quarter of record free cash flow.
Judy: A significantly strengthened investment grade balance sheet with over $900 million of cash at quarter end and $250 million of debt repaid in July.
Judy: We continue our longstanding commitment to shareholder returns with $50 million in share buybacks in the quarter and almost $200 million paid out in the quarterly dividend, marking over 40 years of consecutive quarterly dividends.
Judy: Prudent measured and importantly, economically driven reinvestment into the business, including approximately $50 million of supplemental exploration budget focused primarily on detour melodic and hope Bay and based on exceptional ongoing exploration results and announcing the next steps to <unk>.
Judy: Helping the upper Beaver mine and expanding detour to potentially over 1 million ounces a year of annual production both investments based on exceptional projected risk adjusted economic returns.
Judy: We continued to deliver stable reliable consistent operational results safely and responsibly and the most prospective and the most politically stable jurisdictions in the world.
Judy: With our strong first half results, we are very well positioned to reiterate our production and cost guidance for 2024.
Judy: However, before we get into the operational and financial details I would like to take a moment to talk about safety and sustainability.
Judy: The safety of our people our partners our communities and our environment is Paramount nothing is more important I am proud to say, we had another strong quarter on the safety and sustainability front. This performance has been recognized by our peers with our teams recently, winning several industry awards, including to name.
Judy: Just a few on the safety front.
Judy: From the Canadian Mining Institute I'm, sorry from the Canadian Institute of mining the John T. Ryan Safety Awards for 2023 for Eastern Canada to Canadian melodic for the Prairie provinces and territories to Melia, Dean and for Canada nationally to gold X or <unk>.
Judy: Rescue competitions at.
Judy: At the mine rescue competitions, our minds on a total of eight awards, including five first place awards.
Speaker Change: On the sustainability front agnico Eagle's Lauren complex was awarded the 2024 towards sustainable mining Environmental Excellence Award presented by the Mining Association of Canada, and we also recently released our inaugural reconciliation action plan and our 2023 climate action report.
Sean Boyd: As Sean Boyd, our chairman and longtime CEO often says it's not just what you do but how you do it.
Speaker Change: So well done to the teams.
Speaker Change: And our first quarter call earlier, this year with gold prices and our revenue up significantly.
Speaker Change: We chose in that call not to focus on the record cash flows we generated but instead to focus on cost control.
Award, presented by the Mining Association of Canada, and we also recently released our inaugural Reconciliation Action Plan and our 2023 Climate Action Report.
Judy: We wanted to emphasize cost control because while we don't control the gold price, we can work hard to control costs and it is our strongly held and fundamental view that the benefit of higher gold prices must go to our owners.
As Sean Boyd, our Chairman and longtime CEO often says, it's not just what you do, but how you do it. So well done to the teams.
Judy: Not to higher costs.
Judy: And certainly not to bad projects.
Judy: Our performance in the second quarter demonstrates that this focus on cost control is real and this focus has delivered delivering results for our owners with Q2 cash costs at $870 an ounce.
In our first quarter call earlier this year, with gold prices and our revenue up significantly, we chose in that call not to focus on the record cash flows we generated, but instead to focus on cost control.
Judy: I can tell you.
We wanted to emphasize cost control because while we don't control the gold price, we can work hard to control costs. And it is our strongly held and fundamental view that the benefit of higher gold prices must go to our owners, not to higher costs.
Judy: With quite a bit of pride.
Judy: That at every mine at every call at every meeting the teams remain laser focused not only on cost control, but on continuous improvement to make our operations more efficient more productive and to offset cost inflation, where we can.
and certainly not to bad projects. Our performance in this second quarter demonstrates that this focus on cost control is real and this focus is delivering results for our owners with Q2 cash costs at $870 an ounce.
Judy: And as we continue to deliver record cash flows.
Judy: And as we continue to accrue cash on our balance sheet. Our focus is not only on continued cost control, but also on continued discipline when it comes to capital allocation.
Judy: This is your money, we remain as committed to disciplined capital allocation at 'twenty $300 gold at $2400 gold as we were at <unk> thousand $800 Gold in fact, the projects, we will talk about today Canadian melodic detour underground upper Beaver are exactly the same projects, we talked about a year.
That at every mine, at every call, at every meeting, the teams remain laser focused not only on cost control, but on continuous improvement to make our operations more efficient, more productive, and to offset cost inflation where we can.
Judy: Ago, when gold prices were $800.
Judy: We are moving ahead in exactly the same manner at exactly the same measured pace as we guided at the beginning of the year.
Judy: As a reminder, a detour underground we're investing in an exploration ramp and bulk sample to Derisk the project.
Judy: At upper Beaver, we're investing in an exploration shaft as shallow ramp and bulk samples to Derisk. The project again. These are the same projects and the same steps we guided in both February and April.
In fact, the projects we will talk about today, Canadian Malartic, Detour Underground, Upper Beaver, are exactly the same projects we talked about a year ago when gold prices were $1,800.
Judy: Total spend for both of these combined is expected to be about $100 million a year over the next three years. This is a measured and responsible approach.
Judy: These are great projects with great economics.
Judy: With tremendous upside to expand and extend mine lives.
Judy: They are straight down the fairway of what we do and what we've done these are not new projects.
Judy: In countries, we've never been to before they are in our backyard and we've done our homework we have the people the skills the resources to take these projects prudently to the next level again, we're talking about $100 million a year over the next three years.
Judy: Our goal is to deliver projects that not only have a great return on capital.
These are great projects with great economics.
Jamie Porter: But also a great risk adjusted return on capital that's what we mean by disciplined capital allocation and Thats, what we aim to deliver with these investments into the business and with that introduction in summary, I'll now turn the presentation over to our CFO, Jamie Porter, who will go over our financial results Jamie.
with tremendous upside to expand and extend mine lives. They are straight down the fairway of what we do and what we've done. These are not new projects.
Jamie Porter: Thank you Omar.
Jamie Porter: As mentioned, we have had a very strong first half of the year delivering consistent operational results and excellent cost performance in.
Jamie Porter: In the current higher gold price environment, our focus has been on ensuring that the benefit of higher prices accrues to the bottom line and that we deliver strong financial results and we've certainly demonstrated that this quarter.
Our goal is to deliver projects that not only have a great return on capital,
Jamie Porter: We generated record financial results for the third consecutive quarter with adjusted EBITDA of approximately $1 2 billion and free cash flow of over half a billion dollars in the second quarter.
Jamie Porter: One of the key drivers to our strong financial results has been our focus on cost control cash costs were below the low end of our guidance in the quarter driven by the strong operating results and the benefit of the weaker Canadian dollar, which was partially offset by higher royalty costs, which are linked to the gold price.
Jamie Porter: With respect to all in sustaining costs, we came in at $31 an ounce below the low end of guidance. This was driven by the lower cash costs as well as deferred sustaining capital. We do expect our all in sustaining cost to increase in the third quarter as we catch up on sustaining capital.
Jamie Porter: Our all in sustaining costs are one hundreds of dollars per ounce below our peers and our all in sustaining cost margin increased to 50% in the quarter, which is amongst the best in our industry.
Jamie Porter: Taking a closer look at our financial highlights our revenues increased by 21% over the second quarter of 2023 to over 2 billion importantly, our adjusted EBITDA increased by 33% and our free cash flow increased by over 80% when compared to the prior year period.
Jamie Porter: On an adjusted basis net income per share was $1 seven in the second quarter, a 65% increase relative to the prior year.
Jamie Porter: Overall, we had strong financial results for the quarter and first half of the year.
Jamie Porter: If we move on to slide five during the quarter, we significantly strengthened our balance sheet increased our liquidity to $2 9 billion and reduced our net debt to under $1 billion.
Jamie Porter: All supported by record free cash flow.
Jamie Porter: We also increased returns to shareholders through $50 million of share buybacks.
Jamie Porter: In July we repaid $100 million of senior notes on maturity. We also made an accelerated payment of $150 million on our $600 million term loan facility, bringing our total debt repayments subsequent to quarter end to $250 million.
Jamie Porter: We continue to prioritize returns to shareholders with our dividend and share buybacks, representing nearly 50% of the free cash flow we generated in the first half of the year. We plan to continue to strengthen our balance sheet reinvest in the business and Opportunistically buy back shares.
Slide 5 During the quarter we significantly strengthened our balance sheet, increased our liquidity to $2.9 billion and reduced our net debt to under $1 billion.
Jamie Porter: We move on to slide six this slide really highlights our disciplined approach to capital allocation when comparing to what we budgeted at the start of the year using the $800 gold price, we now forecast generating an additional $1 billion of incremental after tax cash flow we.
We continue to prioritize returns to shareholders, with our dividend and share buybacks representing nearly 50% of the free cash flow we generate in the first half of the year. We plan to continue to strengthen our balance sheet, reinvest in the business, and opportunistically buy back shares.
Jamie Porter: We expect that approximately 80% of that incremental after tax cash flow will be allocated to continued strengthening of our financial position and share buybacks.
Jamie Porter: We also continue to reinvest in our business, we focus on projects with solid risk adjusted returns and advance them in a phased measured manner with incremental capital spending.
Jamie Porter: We are also providing a supplemental exploration budget of $50 million for this year based on the positive drill results. We've seen in some of our key projects that <unk> will go over later in the presentation.
Jamie Porter: While we continue to focus on our portfolio of high quality internal growth projects. We complement this with our strategy of acquiring strategic toehold positions in emerging high quality opportunities to something that agnico Eagle has done for decades.
We also continue to reinvest in our business. We focus on projects with solid risk-adjusted returns and advance them in a phased, measured manner with incremental capital spending.
Jamie Porter: The theme of our first quarter conference call with cost discipline. This quarter, we want to highlight that we also remain very focused on capital discipline, we're taking a measured approach with our organic growth projects again to ensure that the benefit of rising gold prices accrues to our balance sheet and to our shareholders.
Jamie Porter: Now I'll turn the call over to Don who will provide an overview of our operational results.
Jimmy: Jimmy Good morning, everyone.
Don: Today I will cover all the operations I liked on behalf of net <unk> and myself.
Don: I will also provide an update on the DC and the Doctor will provide an update provide updates on detour and.
The theme of our first quarter conference call was cost discipline. This quarter we want to highlight that we also remain very focused on capital discipline. We're taking a measured approach with our organic growth projects, again to ensure that the benefit of rising gold prices accrues to our balance sheet and to our shareholders.
Doctor: Upper Beaver pipeline project.
Speaker Change: In Q2 excellent operational performance all across the board with the core fee production close to 900.900 million ounces at a cash cost of 870.
Don: Dollars per ounces and record operating margin of one 3 billion.
Jimmy: Thank you, Jimmy. Good morning, everyone. Today I will cover all the operations I liked on behalf of Natasha and myself. I will also provide an update on the DC and Natasha will provide an update on Detour and on the Upper Beaver Pipeline project.
Doctor: Some of the highlight includes at.
Speaker Change: At Canadian <unk>, delivering another strong quarter with gold production head of the plan, mainly with higher throughput at the mill higher gold recoveries and higher gold grade as we access higher grade zone ahead of this schedule. So overall Nic second quarter, an excellent first half of the year, where Canada, Denmark.
Speaker Change: In Q2, excellent operational performance all across the board with the core production close to 900,000 ounces at a cash cost of $870 per ounces and record operating margin of $1.3 billion.
Speaker Change: <unk>.
Speaker Change: <unk> also benefited from higher gold grades from the favorable mining sequence in.
Speaker Change: In Ontario.
Speaker Change: <unk> continued to ramp up its mill throughput setting another quarterly record in Q2.
Natasha: Some of the highlights include at Canadian Arctic, delivering another strong quarter with the gold production ahead of the plan, mainly with higher throughput at the mill, higher gold recoveries and higher gold rate as we access higher
Speaker Change: And at Detour achieve.
Speaker Change: Achieved a new Easter vehicle quarterly record at both mill availability.
Speaker Change: 93% budget was at 91, six the average mill throughput improved through the quarter with an introduction of new grinding media and some new controls and the reach in June 81000 ton per day average.
Natasha: Great Zone ahead of the schedule. So overall an excellent quarter, an excellent first half of the year for Canadian Maritime.
Laron also benefitted from higher gold grade from a favourable mining sequence.
Speaker Change: At Fosterville the mine site focused on increasing mill and mining rate and this set also new records for quarterly records in the tonne mined in the monkey record undertone meal.
In Ontario, MACASA continued to ramp up its mill throughput, setting another quarterly record in Q2. And at Detour, they achieved a new historical quarterly record about mill availability at 93%.
Speaker Change: <unk>.
Speaker Change: In Nunavut, Meadowbank <unk> continued to outperform both operation have made good progress to unlock the underground potential and it is paying off.
Speaker Change: Budget was at 91.6. The average mill throughput improved through the quarter with an introduction of new grinding media and some new controls, and they reached, in June , 81,000 tonnes per day average.
Speaker Change: The strong performance is a key driver to our extended total cash growth for the quarter at 870.
Speaker Change: <unk> is below the low end of our annual guidance, but as <unk> mentioned, our cost performance is also driven by continuous focus on cost control and optimizing our operations.
At Fosterville, the mine site focus on increasing mill and mining rate and they set also new records for quarterly records on the tonne mine and the monthly record on the tonne mill in June .
Speaker Change: Here's some example.
Speaker Change: Our new <unk> site deserve a gold medal.
Speaker Change: We have implemented a strong continuous improvement culture, sitting stretch target and beating them and on top of that both of them reach health and safety Records in Q2.
Speaker Change: Strong performance is a key driver to our excellent total cash cost for the quarter at $870.
Speaker Change: The main gains or on the productivity improvement which effect.
Speaker Change: A very good cash.
Speaker Change: Cash cost performance, but also they are benefiting from cost management discipline, focusing on what matters from them like the supply chain flight <unk> inventory and also energy savings for example, more recently took action to reduce our footprint by closing some buildings that were no longer required saving on.
Natasha: Here's some examples. Our Nunavut sites deserve a gold medal. They have implemented a strong continuous improvement culture, setting stretch targets and beating them. And on top of that, both of them reach health and safety records in Q2.
Speaker Change: Maintenance, but also more importantly on energy costs.
Speaker Change: What we've learned from it and what is the beauty about <unk> success is the way. This has been done 100% done by site management. It is so great to see the teams proud of their achievement.
Natasha: The main gains are on the productivity improvement,
Natasha: Cash Cost Performance, but also they are benefiting from cost management discipline.
Speaker Change: We believe this is the way to grow our talent and to achieve our business goals.
Speaker Change: So overall with our strong performance in the first half we are highly confident that we can achieve our production cost guidance production and cost guidance for the full year.
Speaker Change: Next slide.
Speaker Change: With OTC project very well it is developing on track so we'll record quarterly mining rate and gold production at <unk> from the <unk>. This is our deposit.
Speaker Change: What we've learned from it and what is the beauty about the Nervous Success is the way this has been done. 100% done by site management. It is so great to see the teams proud of their achievement.
Speaker Change: The ramp development was ahead of the scheduled by more tele remote Scoop operation and the addition of the new 65 ton truck.
Natasha: We believe this is the way to grow our talent and to achieve our business goals.
Speaker Change: Florida holding fleet at.
Speaker Change: So overall, with our strong performance in the first half, we are highly confident that we can achieve our production and cost guidance for the full year.
Speaker Change: At quarter end, the ramp reached a third production level at <unk> 832 meters below surface.
Speaker Change: Shaft sinking is also advancing well, reaching 680 meter depth at the quarter end.
Natasha: Next slide.
Natasha: With ODYSSEY project, very well. It is developing on track. So record quarterly mining rate and gold production from the ODYSSEY South deposit.
Speaker Change: Overall DC is developing as planted and is expected to be the largest underground mining, Canada, but stay tune we are ramping up the drilled from 16 in the first half of the year up to 23 in the second half of the year. It is our biggest drilling program ever at Canadian Arctic.
Natasha: The ram development was ahead of the schedule, helped by more tele-remote scoop operation and the addition of the new 65-tonner truck for the hauling fleet.
Speaker Change: On that I will now pass it on.
Natasha: At the quarter end, the ramp reached the third production level at Izguti at 832 meters below surfaces.
Net Asia: Net Asia will discuss other project key value drivers detour undergone an upper beaver.
Natasha: Shaft sinking is also advancing well, reaching 600 EDM depth at the quarter end.
Speaker Change: Tom and good morning, everyone.
Speaker Change: Touch on the two projects in Ontario that we're pretty excited about because it's an opportunity it's an opportunity to grow low risk profitable production and a province that in my opinion anyway is one of the best mining jurisdictions in the world.
Natasha: Overall, ODYSSEY is developing as planned and is expected to be the largest underground mine in Canada.
Speaker Change: But stay tuned, we are ramping up the drills from 16 in the first half of the year up to 23 in the second half of the year. It is our biggest drilling program ever at Canadian Malarctic.
Speaker Change: So the first project is detailed underground we provided.
Speaker Change: An update on this project in June and it outlined a pathway for Detroit to be a 1 million ounce producer annually for over a 14 year period, beginning as early as 2030.
Natasha: On that, I will now pass on it to Natasha who will discuss other projects, Key Value Drivers, Detour Underground, and Upper Beaver.
Natasha: Thanks, Dom, and good morning, everyone.
Speaker Change: Now if we were to use the current gold prices during that time period, we would generate over 1 billion in free cash flow per year from detour alone.
Natasha: So I'll touch on the two projects in Ontario that we're pretty excited about because it's an opportunity. It's an opportunity to grow low-risk, profitable production in a province that, in my opinion anyway, is one of the best mining jurisdictions in the world.
Speaker Change: The detailed underground project is not just a good return on capital as <unk> mentioned, it's a good risk adjusted return on capital.
Natasha: So the first project is Detour Underground.
Natasha: We provided an update on this project in June , and it outlined a pathway for Detour to be a 1 million ounce producer annually, for over a 14 year period, beginning as early as 2030.
Speaker Change: Now <unk> already touched on this from an operating standpoint, but I just wanted to highlight this again and.
Speaker Change: And Thats, our focus on cost and capital discipline in all aspects of our business.
Speaker Change: Now as the MA and Jamie said from a project perspective, we're taking a pretty disciplined phased approach to further de risk the project with a measured investment of $100 million in capital over the next three years.
Natasha: If we were to use the current gold prices, during that time period, we would generate over $1 billion in free cash flow per year from detour alone.
Natasha: The Detour Underground Project is not just a good return on capital. As Ammar mentioned, it's a good risk-adjusted return on capital.
Speaker Change: And thats to develop the first development exploration ramp and then the collect a bulk sample and then at the same time facilitate infill and expansion drilling to convert and then potentially grow in the current mineral replay.
Natasha: Now Dom already touched on this from an operating standpoint, but I just wanted to highlight this again.
Speaker Change: And speaking of drilling we continue to see positive exploration results from along the western flank of the deposit and Dave will discuss this later on in his presentation.
Ammar: And that's our focus on cost and capital discipline in all aspects of our business.
Speaker Change: As Ammar and Jamie said, from a project perspective, we're taking a pretty disciplined and phased approach to further de-risk the project with a measured investment of $100 million in capital over the next three years.
Dave: Now moving over to the <unk> project.
Speaker Change: This is another low risk opportunity to grow the production profile.
Speaker Change: And that's to develop, to first develop an exploration ramp and then to collect a bulk sample and then at the same time facilitate infill and expansion drilling to convert and then potentially grow the current mineral resource.
Speaker Change: That we know pretty well.
Speaker Change: In fact, we expect this project to leverage and benefit from our technical expertise and our workforce at Mckesson.
Speaker Change: With the internal assessment that we've completed we've outlined a stand alone nail concept, but we continue to evaluate oil transportation options specifically at neuron.
Speaker Change: And speaking of drilling, we continue to see positive exploration results from along the western plunge of the deposit, and Guy will discuss this later on in his presentation.
Speaker Change: So based on this internal assessment and you see the potential for upper Beaver to be a low cost long life project with a solid risk adjusted return and upside potential.
Guy: Now moving over to the Upward Beaver project.
Speaker Change: This is another low-risk opportunity to grow the production profile in a camp that we know pretty well.
Speaker Change: Supports moving us to the next.
Speaker Change: And so like detail on the ground, we will be taking a steady and a disciplined approach to derisk and optimize this project starting with a measured investment of 200 million over a three year period and this is the first develop an exploration shaft and then an exploration ramp.
Speaker Change: In fact, we expect this project to leverage and benefit from our technical expertise and our workforce at MACASA.
Guy: With the internal assessment that we've completed, we've outlined a stand-alone mill concept, but we continue to evaluate ore transportation options, specifically at La Ronde.
Speaker Change: And then collect two bulk samples one in the upper level of the deposit using the exploration ramp to test the shallow mineralization in the basalt and then the second is bulk sample will be using the shaft to test the deeper porphyry mineralization that holds a large portion of our resources.
Speaker Change: So based on this internal assessment we see the potential for Upper Beaver to be a low-cost long life project with a solid risk-adjusted return and upside potential that supports moving us to the next phase.
Speaker Change: As well during this timeframe will be developing underground drilling platforms to convert and then expand the current mineral replanted.
Guy: And so like Detour Underground, we'll be taking a steady and a disciplined approach to de-risk and optimize this project, starting with a measured investment of $200 million over a three-year period. And this is to first develop an exploration shaft, and then an exploration ramp.
Speaker Change: So we don't just see the exploration potential at depth.
Speaker Change: We also see the opportunity for upper Beaver to unlock the potential in the region.
Guy: And so with that I'll pass it over to guy to explain the potential a little bit more.
Speaker Change: and then collect two bulk samples. One in the upper level of the deposit using the exploration ramp to test the shallow mineralization in the basalt and then the second bulk sample will be using the shaft to test the deeper porphyry mineralization that hosts a large portion of our resources.
Guy: Thank you Natasha and good morning, everybody who's.
Guy: To start with I'm very happy to provide additional information on the upper Beaver project going on slide 11.
Guy: Since the previous PFS study in 2017, there has been a lot of work done by the exploration team on site by our technical services group and by our project study team integrating more than 225000 meters of drilling and 440 drill hole completed over a year since the last study.
Speaker Change: As well, during this time frame, we'll be developing underground drilling platforms to convert and then expand the current mineral resources.
Speaker Change: But we don't just see the exploration potential at depth. We also see the opportunity for Upper Beaver to unlock the potential in the region.
Speaker Change: And so with that, I'll pass it over to Guy to explain the potential a little bit more.
Guy: This additional drilling help de risking the geological model by and filling but also by extending the resources.
Speaker Change: The interpretation of the ore body was completely refreshed and updated mineral resource estimate for the new <unk> study now total $3 4 million ounces of indicated resources with an additional 4 million ounces of inferred resources.
Speaker Change: These results show significantly higher potential than to one 4 million ounces mineral reserve contemplated to be mined by Easter week study in 2017.
Speaker Change: We now expect that a large portion of the new indicated resources will be brought to mineral reserves at year end.
Guy: This additional drilling helped derisking the George Galle model by infilling, but also by extending the resources base.
Speaker Change: This <unk> study and the three year advanced exploration phase that we are about.
Speaker Change: To undertake will allow to further de risk the project through the collection of the bulk sample that was described by Natasha while we continue exploration around upper Beaver deposit and the adjacent deposit in the account such as upper Beaver as such as upper Canada, and leukemic B to develop the full potential of the Kirkman Lake camp that we now own a $100.
Speaker Change: <unk> from the <unk> mine to yogurt Beaver project following the merger.
Speaker Change: With the ability of leveraging operational synergies extending our global mineral reserve and resources that they can that's already exceed 10 million ounces in our category all of that within a cam that as over 100 year of mining history and more than 40 million ounces of historical gold production.
Guy: While we continue exploration around the Upper Beaver deposit and the adjacent deposits in the camp, such as Upper Canada and Okemik B, to develop the full potential of the Kirkland Lake camp that we now own 100% from the Makassar mine to the Upper Beaver project, following the merger,
Speaker Change: Next we're also pleased to announce that following the exploration results received in the first half of 'twenty, four and particular in Kingdom monarchy detour and Ob.
Speaker Change: We're increasingly exploration budget by $50 million for second half, we believe that this will lead to another successful year of growth in mineral reserve and mineral resources at our key value driver project.
Speaker Change: With the ability of leveraging operational synergies, expending our global mineral reserve and resources at the camp, that already exceeds 10 million ounces in our category.
Speaker Change: At monarch on slide 12.
Speaker Change: In the East Goldie deposit at <unk> mine recent exploration drilling continued to demonstrate the potential to grow the deposit laterally with good result, bolt on the eastern and Western extension.
Guy: Next, we are also pleased to announce that following the exploration results received in the first half of 2024, in particular in Canada-Morocco detour and OBE, that we are increasing the exploration budget by $50 million for the second half.
Guy: Outside of the current footprint of <unk> reserve outline.
Guy: The results from the ongoing exploration program are anticipated to have a positive impact on mineral resources estimate at year end.
Guy: And continue to support our view.
Speaker Change: To improve the throughput of the underground mine into future as reserve and resources continue to grow laterally.
Guy: And also supporting the potential to develop new underground mining area.
Guy: <unk> score two hour fill the mill strategy and monarch.
Guy: Moving to slide 13 at Detour underground infill drilling as previously mentioned by Natasha continued to deliver a high grade results in the core in the high grade core of the deposit below into the width of the reserve open pit.
Guy: The results from the ongoing exploration program are anticipated to have a positive impact on the mineral resources system at the year-end.
Guy: This continued to confirm good grade and continued <unk> of the high grade corridor that we described at our June update.
Speaker Change: As demonstrated by our recent results are SaaS for Gram over 'twenty two meter for for over 30 20 Gram over five for all of that between 300 and 550 meter near the proposed exploration ramp recently announced in June dose results continue to support our view that the underground project.
Guy: Moving to slide 13, a detour underground.
Guy: Continue to deliver high-grade results in the high-grade core of the deposit.
Speaker Change: Presented in.
Speaker Change: About a month ago in June as great potential to continue to grow.
Speaker Change: And we'll help I'd, bringing detour mine site, combining open pit underground to the select club of 1 million ounces of gold per year producer for years to come.
Guy: As demonstrated by recent results, that's 4 g over 22 m, 4.4 over 30, 20 g over 5.4, all of that between 300 and 550 m near the proposed exploration ramp recently announced in June .
Speaker Change: And finally on slide 14 in the Madrid deposit in the <unk> zone exploration drilling continues to return excellent results up to 17 Gram over 25 meter estimated through thickness.
Speaker Change: Does that 400 meter depth.
Speaker Change: Further confirming.
Speaker Change: The larger thicknesses and higher gold grade and this new zone compared to related to recall mineral reserve and resources that there'll be mined.
Speaker Change: These results are expected to lead to a significant increase in grade and total mineral resources at year end 2020 for supporting our view for the potential to develop a larger operation at there'll be in the near future.
Guy: And finally, on slide 14, in the Madrid deposit in the patch 7 zone, exploration drilling continued to return excellent results up to 17 g over 25 m estimated through thickness.
Speaker Change: In closing Agnico Eagle is a strong pipeline of internal exploration.
Speaker Change: With World class exploration potential and more importantly around existing infrastructure in safe jurisdiction that we can leverage with our own internal expertise and on that I'll return to my to EMR for some closing remarks.
Guy: Just that 400 meter depth.
Guy: for confirming.
Guy: These results are expected to lead to a significant increase in grade and total mineral resources at year-end 2024, supporting our view for the potential to develop a larger operation at Oak Bay in the near future.
Speaker Change: Thank you <unk> and very exciting stuff with great work to you and the team.
Speaker Change: At Agnico Eagle, we strive to build a simple high quality business that generates great returns for our owners the mandate our owners give us is simple our owners want agnico eagle to be the best place to invest in the gold space that means one giving them the best leverage to increase in gold prices and to giving.
Speaker Change: This leverage with a reasonable risk profile and.
Speaker Change: And the strategy, we used to deliver on this mandate has the same strategy we've used for over 60 years.
Speaker Change: One we want to focus on low risk mining jurisdictions jurisdictions that have multiple mine multiple decade geologic potential and districts that have political stability for multiple decades, we.
Speaker Change: We want to focus on the regions, we know well and we want to have a simple manageable business in those regions.
Speaker Change: That means one, giving them the best leverage to increase in gold prices, and two, giving them this leverage with a reasonable risk profile. And the strategy we use to deliver on this mandate is the same strategy we've used for over 60 years.
Speaker Change: Two we want to be the highest quality senior gold producer that we can be.
Speaker Change: That means.
Speaker Change: ESG standards based on a multi decade investment horizon.
Speaker Change: That means disciplined capital investments based on knowledge and experience in the regions we operate.
Speaker Change: And that means creating value through the drill bit and through technical expertise.
Speaker Change: We feel we are uniquely positioned.
Speaker Change: We want to focus on the regions we know well, and we want to have a simple, manageable business in those regions.
Speaker Change: With a robust land packages in core mining jurisdictions with the unique potential to leverage existing capital in existing assets.
Speaker Change: We believe we have a competitive we know we have a competitive advantage from over 50 years of operating in the regions, where we are and we believe we have unique mining experience and expertise and none of it in the Canadian North.
Speaker Change: High ESG standards based on a multi-decade investment horizon.
Speaker Change: And finally always.
Speaker Change: Focused on financial returns with an emphasis on per share metrics.
Speaker Change: We feel we are uniquely positioned with robust land packages in core mining jurisdictions with the unique potential to leverage existing capital and existing assets.
Speaker Change: Maintaining a strong financial position to fund project growth to strengthen the balance sheet and to return capital to shareholders as.
Speaker Change: Traded by over 40 years of continuous quarterly dividend payments.
Speaker Change: So thank you all once again for joining us and thank you.
Speaker Change: In particular to all of our employees, who delivered such a great quarter safely.
Speaker Change: And with that we end our presentation and open for questions.
Speaker Change: And finally, always...
Speaker Change: Thank you Sir.
Speaker Change: Ladies and gentlemen, you will now begin the question and answer session should you have a question. Please press star followed by the number one on your Touchtone phone.
Tom: Year over year for you Tom Tom acknowledging your request.
Tim: Should you wish to decline from the polling process. Please press star followed by the number Tim.
Speaker Change: So thank you all once again for joining us and thank you in particular to all of our employees who delivered such a great quarter safely. And with that, we end our presentation and open for questions.
Tim: If you are using a speaker phone please lift your handset before pressing any key.
Speaker Change: Again should you have a question. Please press star followed by the number one on your Touchtone sign one moment. Please for your first question.
Speaker Change: Thank you, sir. Ladies and gentlemen, we will now begin the question-and-answer session.
Speaker Change: Our first question comes from the line of Josh Wolfson from RBC capital markets go ahead. Please.
Speaker Change: You will hear a three-tone prompt acknowledging your request. Should you wish to decline from the polling process, please press star followed by the number 2.
Josh Wolfson: Thanks, very much first question on upper Beaver.
Josh Wolfson: I'm just curious about understanding the economic decision to.
Speaker Change: To have progressed this on a standalone basis.
Josh Wolfson: I guess I'm wondering is there any other opportunities to maybe leverage the infrastructure of the company is talked about historically across the abitibi.
Josh Wolfson: To reduce some of that Capex or is this just.
Speaker Change: It's just the best plan going forward.
Speaker Change: Hi, Josh its tomorrow and thank you for that question.
Speaker Change: Our first question comes from the line of Josh Wolfson from RBC Capital Markets. Go ahead, please.
Josh Wolfson: There is absolutely.
Josh Wolfson: An opportunity to continue to consider leveraging existing infrastructure is Natasha mentioned, we are still looking at the transport option to la Ronde, which would obviously materially reduce the capital, although we would have to spend.
Josh Wolfson: Thanks very much. First question on Upper Beaver. I'm just curious about understanding the economic decision to progress this on a standalone basis.
Speaker Change: I guess I'm wondering, is there any other opportunities to maybe leverage the infrastructure that companies talked about historically across the epitibe to reduce some of that capex or is this the best plan going forward?
Speaker Change: The numbers, we've given Josh are based on a onsite mill, because even with an onsite mill.
Speaker Change: The returns on this are quite strong at current levels, it's in excess of 20%.
Josh Wolfson: Hi Josh, it's Ammar and thank you for that question.
Speaker Change: There is absolutely an opportunity to continue to consider leveraging existing infrastructure. As Natasha mentioned, we are still looking at the transport option to Le Ronde.
Speaker Change: So given as you would know that the.
Josh: Longest driving factor is the shaft.
Speaker Change: And given that the shaft is independent of where you have the plant.
Speaker Change: What we've decided to do is basically we've said look worse case scenario, we build the mill it still makes a lot of money for our shareholders.
Josh Wolfson: which would obviously materially reduce the capital that we would have to spend. The numbers we've given, Josh,
Speaker Change: So let's get started on that shaft, because it's a great investment.
Speaker Change: are based on a on-site mill because even with an on-site mill, the returns on this are quite strong. At current levels, it's in excess of 20%.
Speaker Change: But to your point, absolutely we are still looking at transportation to Iran, and if we were to do that obviously it would be because it improves the economics.
Speaker Change: So, given, as you would know, that the...
Josh: Alright. Thanks.
Speaker Change: Next question is on East Goldie in terms of some of the infill drilling.
Speaker Change: Longest driving factor is the shaft.
Josh Wolfson: And given that the shaft is independent of where you have the plant, what we've decided to do is, basically we've said, look, worst case scenario, we build a mill, it still makes a lot of money for our shareholders, so let's get started on that shaft, because it's a great investment.
Josh: That's been identified on what looks like a pretty large area.
Speaker Change: And then the comments I guess much more clearly this quarter about the potential for a second shack I guess I'm wondering.
Speaker Change: Given that the first underground project at <unk> was advanced.
Speaker Change: But to your point, absolutely, we are still looking at transportation to La Ronde, and if we were to do that, obviously it would be because it improves the economics.
Speaker Change: Within the FERC resource at <unk> level.
Speaker Change: With this resource extension gives you the confidence to be able to progress or make a decision for a second chapter or what sort of timeframe could be could we have the information that would.
Speaker Change: Alright, thanks.
Speaker Change: Next question is on East Goldie, in terms of some of the infill drilling.
Speaker Change: that's been identified on what looks like a pretty large area.
Josh: It would be able to advance that or not asset.
Speaker Change: And then the comments, I guess, much more clearly this quarter about the potential for a second shaft. I guess I'm wondering, you know, given that the first underground project at Malartic was advanced,
Josh Wolfson: Josh speaking.
Josh: We're still getting some strong result on both site.
Josh: Both to the east to the West and both of them are west and East extension Iron that I would say tightly drilled enough yet to make those gain of so this is in some of the.
Speaker Change: you know, with an inferred resource, a PE level. You know, would this resource extension give you the confidence to be able to progress or make a decision?
Terry: And Terry <unk> consideration, we're currently adding so by increasing the drill program by year end, we wanted tight fill that area, where we've been getting some pretty high grade and Noah and good thickness in the east as well as due to west and that's going to help further down the road at all making up our mine about.
Speaker Change: For a second shaft or what sort of time frame could we have the information that would be able to advance that or not advance that?
Guy: Hi, Josh. Guy speaking.
Speaker Change: We're still getting some...
Josh: What needs to be done and where.
Josh Wolfson: Strong result on both sides, both to the east, to the west, and both of them, west and east extension, are not, I would say, tightly drilled enough yet.
Speaker Change: Yes, I mean to be sure.
Speaker Change: We are very excited about the results Josh in.
Josh: Yeah.
Speaker Change: to make those kind of, so this is, you know, some of the...
Speaker Change: It's actually progressing probably faster and better than we had anticipated.
Josh Wolfson: Internal consideration we're currently having.
Keith: As Keith said and.
Josh Wolfson: So, by increasing the drill program by year-end, we want to tight-fill that area where we've been getting some pretty high-grade and good thickness in the east.
Speaker Change: Where you put the shaft is pretty important and thats going to be defined largely by.
Speaker Change: The ore body again defined by drilling so we're not at a position yet to say absolutely. This is the right place to put a shaft.
Josh Wolfson: as well as to the West.
Josh Wolfson: And that's going to help further down the road at making up our mind about what needs to be done and where.
Speaker Change: But certainly we we love what we're seeing.
Speaker Change: Yeah, I mean, to be sure.
Speaker Change: Got it and if I can sort of tuck in one more.
Josh Wolfson: We are very excited about the results, Josh.
Speaker Change: Yes, there is.
Speaker Change: There's a bunch of projects the company is sort of.
Josh Wolfson: You know, it's actually progressing probably faster and better than we had anticipated.
Speaker Change: Evaluating at this point I guess more recently <unk> and an upper Beaver still a number beyond that into pipeline.
Josh Wolfson: But, you know, as Guy said,
Guy: And, you know, where you put the shaft is pretty important, and that's going to be defined largely by, you know, the ore body, again defined by drilling. So, you know, we're not at a position yet to say absolutely this is the right place to put a shaft, but certainly we love what we're seeing.
Speaker Change: Then this quarter there was a large equity investment made at a junior developer in the base metal space.
Speaker Change: Kind of want to understand what the company's perspective, here's is on on growth and internal versus external opportunities and how does the company get to manage capital with all of these different options on the table. Thank you.
Speaker Change: And if I can sort of tuck in one more.
Josh Wolfson: There's a bunch of projects the company is sort of, you know, evaluating at this point. I guess, more recently, Detroit Underground and Upper Beaver.
Speaker Change: So I'll address that.
Speaker Change: So we.
Speaker Change: We keep emphasizing the phrase risk adjusted return on capital and of course.
Speaker Change: That is the return on capital on a risk adjusted so by by definition, we have more knowledge.
Speaker Change: On internal projects by definition.
Josh: And we were able to make an assessment on risk.
Josh: Better.
Josh: So if I had an external project at 20% and an internal project at 20%.
Josh: We would go with the internal project.
Speaker Change: So I'll address that.
Josh: Again, because we would.
Josh: In our view have a better view on the amount of risk associated with it.
Josh Wolfson: So we...
Speaker Change: We keep emphasizing the phrase risk-adjusted return on capital, and of course that is the return on capital and the risk-adjusted. So by definition, we have more knowledge on internal projects, by definition.
Josh: But broadly we look at a lot of things.
Josh: Which is what our investors want us to do our investors want us to make them money.
Josh: In this space and the way we do that is we try to be in places that have good geologic potential and we try to have a knowledge advantage there and so we are always looking at a number of things and it's actually a very good thing I'd tell you and I've been in this business for 25 years.
Josh Wolfson: And we're able to make an assessment on risk much better. So if I had an external project at 20% and an internal project at 20%, we would go with the internal project. Again, because we would...
Josh: It's fantastic to have the pipeline of opportunities that we have but I will be very clear and we tried to emphasize this.
Josh Wolfson: In our view, have a better view on the amount of risk associated with it.
Josh Wolfson: but but broadly we we look at a lot of things
Josh: Explicitly.
Josh Wolfson: which is what our investors want us to do. Our investors want us to make them money in this space.
Josh: We're going to continue to be disciplined in our capital approach detour underground, it's fantastic to get to 1 million ounces a year.
Josh Wolfson: And the way we do that is we try to be in places that have good geologic potential.
Speaker Change: It's it's a ramp and a paste plant.
Josh Wolfson: and we try to have a knowledge advantage there.
Speaker Change: I mean, it's simple this is stuff we do.
Josh Wolfson: And so we are always looking at a number of things.
Josh: Melodic.
Josh Wolfson: And it's actually a very good thing.
Josh: We've been there a long time, it's the same mill.
Josh Wolfson: I tell you, and I've been in this business for 25 years, it's fantastic to have the pipeline of opportunities that we have, but I will be very clear, and we tried to emphasize this.
Josh: Currently building a shaft, if we build another shaft.
Josh: This is stuff, we know how to do upper Beaver, we know how to do.
Josh: <unk>.
Speaker Change: So clearly some of it some of the things when we look at are more complex than others, but we are very comfortable that we have the resources, both financial and people to move at the measured pace that we're moving forward and honestly I love. The fact that you are asking about <unk>.
Josh Wolfson: Explicitly, we are going to continue to be disciplined in our capital approach. I mean, detour underground, it's fantastic to get to a million ounces a year.
Josh Wolfson: It's a ramp and a pace plan.
Speaker Change: Which of the very many good pipeline opportunities are we going to prioritize because we have a really good opportunity.
Josh Wolfson: I mean, it's simple. This is stuff we do.
Josh Wolfson: We've been there a long time. It's the same mill. We're currently building a shaft. If we build another shaft,
Speaker Change: Great. Thank you very much.
Josh Wolfson: You know, this is stuff we know how to do, Upper Beaver, we know how to do.
Speaker Change: Thank you.
Speaker Change: Our next question comes from the line of Anita Soni from CIBC World Markets go ahead. Please.
Speaker Change: So clearly, some of the things we look at are more complex than others, but we are very comfortable that we have the resources, both financial and people, to move at the measured pace that we're moving forward. And honestly, I love the fact that you're asking about
Anita Soni: Hi, Good morning, first off congratulations on a strong free cash flow quarter.
Anita Soni: And my next question would be on <unk>, So what would be the next steps.
Speaker Change: Think about startup timelines for hot band.
Josh Wolfson: Which of the very many good pipeline opportunities are we going to prioritize because we have a lot of really good opportunities?
Speaker Change: You need to see more there to make a go ahead decision.
Speaker Change: Hi, Anita.
Speaker Change: Obviously, we need to continue drilling at <unk>, we are still not yet that the drill spacing that allow to bring them indicated in into the plan. So our focus and this is why we are accelerating the pace in terms of drilling. So the plan for us is to bring the core portion of that new high.
Speaker Change: Great, thank you very much.
Speaker Change: Thank you.
Josh Wolfson: Our next question comes from the line of Anita Soni from CIDC World Markets. Go ahead please.
Anita Stoney: Hi, good morning. First off, congratulations on a strong free cash flow quarter. My next question would be on Hope Bay. So what would be the next steps as we think about startup timelines for Hope Bay and what you need to see more there to make a go-ahead decision?
Speaker Change: <unk> zone that we think hard a needle mover on the project as quickly as possible to a drill spacing that will allow us to integrate them into the plan. So I know a year from now we should be in a bunch better position in terms of our understanding of.
Anita Stoney: Hi Anita, it's Guy. Obviously we need to continue drilling patch 7. We are still not yet at a drill spacing that allows to bring them indicated and into the plan. So our focus, and this is why we are accelerating the pace,
Patrick: Great and Patrick then and two integrated and start to integrate that into some some scenarios.
Speaker Change: Okay. Thanks, and then just an operational question are there any shutdowns or maintenance and then back half of the year that we should be aware of any of the major operations.
Anita Stoney: In terms of drilling, so the plan for us is to bring the core portion of that new high-grade zone that we think are the needle mover on the project as quickly as possible to a drill spacing that will allow us to integrate them into the plan.
Anita Soni: Yes, Hi, Anita we add the one that loan, which which is over we had 10 days of mail and 14 days undergone xyrem has been done and successfully and Theres. Another one coming at the Canadian monolithic 10 day shutdown at the mill it is to change the drives.
Anita Stoney: So, I know in a year from now, we should be in a bunch better position in terms of our understanding of, you know, the grade and patch 7 and to integrate it and start to integrate that into some scenarios.
Speaker Change: <unk> system at the tailings thickener.
Speaker Change: Hi, Anita its Natasha and with respect to <unk>, we have two more shutdowns coming up one in August and one in November and Thats typical shutdowns and you only have four shutdowns a year.
Speaker Change: Operational question, are there any shutdowns or maintenance in the back half of the year that we should be aware of at any of the major operations?
Speaker Change: Okay, and then just again at Canadian <unk>.
Speaker Change: Sure.
Anita Stoney: Yes, hi Anita. We had one at La Ronde, which is over. We had 10 days, a meal and 14 days on the ground at La Ronde have been done and successfully.
Speaker Change: It's delivering pretty good throughput and grade.
Speaker Change: Is that what should we expect that to continue for the remainder of the year I think it's outpacing that.
Speaker Change: and there's another one coming at the Canadian Maritime, 10 days shut down at the mill. It is to change the drive system at the tailings thickener.
Speaker Change: In spite of significant mountain can you first half.
Speaker Change: Yes, we should expect the tonnage to to keep we're going to keep a good day needs to the end of the year, but the grade we expect that there's going to be lowered in the first half.
Speaker Change: Hi Anita, it's Natasha, and with respect to Detour, we have two more shutdowns coming up, one in August and one in November , but it's typical shutdowns, we normally have four shutdowns a year.
Speaker Change: In the second quarter, we were mining to inner pit.
Speaker Change: Those two old workings, where we had the upside on the grade, but now we're moving more.
Speaker Change: Okay, and then just again at Canadian Malarctic though.
Speaker Change: It's delivering pretty good throughput and grade. Should we expect that to continue for the remainder of the year? I think it's outpacing the guidance by a significant amount from the first half.
Speaker Change: Two a phase that we need to move more waste in the lower grade ore. So we can have a good tonnage but.
Speaker Change: Lower grade than we had in the first half.
Speaker Change: Okay I'll leave it Darrin, let someone else ask questions. Thank you very much.
Speaker Change: Yes, we should expect the tonnage to keep, we're going to keep a good tonnage to the end of the year, but the grade, we expect that it's going to be lower than the first half.
Darrin: Thank you.
Speaker Change: Our next question comes from the line of Lawson Winder from Bank of America Securities Go ahead.
Speaker Change: As in the second quarter, we were mining two inner pits.
Lawson Winder: Thank you operator.
Speaker Change: Close to old workings where we had the upside on the grade, but now we're moving more to a phase that we need to move more waste in the lower grade ore. So we can have a good tonnage, but lower grade than we had in the first house.
Lawson Winder: Good morning, <unk> team. Thank you for the update today always very helpful and wonderful to hear from you.
Lawson Winder: I wanted to follow up on the capital return <unk> and <unk>.
Speaker Change: <unk> very very strong cash flow in Q2, and looking out to the second half and next year at spot and even lower than spot gold prices and free cash flow generation will continue to be.
Speaker Change: Okay, I'll leave it there and let someone else ask questions. Thank you very much.
Speaker Change: Thank you. Our next question comes from the line of Lawson Winder from Bank of America Securities. Go ahead, please.
Speaker Change: Very robust to put it lightly.
Speaker Change: And with that as context, when you look at the capital return program and the increased focus on the buyback recently is there any thought internally to maybe shifting that back to the dividend with a potentially higher dividend and when you think about paying a dividend.
Lawson Winder: Thank you, operator. Good morning, Ammar and team. Thank you for the update today. Always very helpful and wonderful to hear from you.
Lawson Winder: I wanted to follow up on the capital return.
Lawson Winder: team.
Speaker Change: And just, you know, observing the very, very strong cash flow in Q2 and looking out to the second half and next year at spot and even lower than spot gold prices, that free cash flow generation will continue to be
Speaker Change: What's kind of a comfortable free cash flow.
Lawson Winder: Payout on that on that dividend level.
Speaker Change: Lawson, it's Jamie Thanks for the thanks for the question yes.
Lawson Winder: I mean I'll answer it just by by focusing on the last part of your question our dividend payout ratio was 36%.
Speaker Change: Very robust, to put it lightly.
Speaker Change: And with that as context, when you look at the capital return program and the increased focus on the buyback recently, is there any thought internally to maybe shifting that back to the dividend with a potentially higher dividend? And when you think about paying a dividend,
Speaker Change: In this most recent quarter and I think thats really a comfortable level I mean, if you factor in combination of the dividend and the share buybacks of $70 million in share buybacks in the first half of the year, we're running at a rate of about 50%.
Speaker Change: What's kind of a comfortable free cash flow payout on that dividend level? Thanks.
Speaker Change: Direct returns to shareholders.
Speaker Change: Portion of our free cash flow. So I think the dividend at the right spot where it is currently representing about a third of the free cash flow that we're generating.
Anita Stoney: Lawson, it's Jamie. Thanks for the question.
Jamie: I mean, I'll answer it just by focusing on the last part of your question. Our dividend payout ratio was 36% in this most recent quarter, and I think that's really a comfortable level. I mean, if you factor in...
Speaker Change: Okay.
Speaker Change: Okay very helpful.
Speaker Change: Wanted to also ask.
Speaker Change: Just given the <unk> of your early comments on cost management and cost reduction congratulations on the success there.
Anita Stoney: Combination of the dividend and the share buybacks, the $70 million in share buybacks in the first half of the year, we're running at a rate of about 50% direct return to shareholders as a portion of our free cash flow. So I think that the dividend is at the right spot where it is currently, representing about a third of the free cash flow that we're generating.
Speaker Change: In the recent past so in the past sort of two to three years is there has obviously been a lot of labor and cost inflation in the industry, but in particularly on labor and it would be helpful. Just to get your comments on what youre seeing in the various regions today is that continuing to to improve.
Speaker Change: Both with respect to labor cost, but also labor availability, thanks very much.
Speaker Change: Okay, very helpful. I wanted to also ask...
Anita Stoney: Just given the theme, Ammar, of your early comments on cost.
Speaker Change: Hi, Lawson Dominik speaking, we see a stabilization in term of.
Speaker Change: Management and Cost Reduction. Congratulations on the success there.
Lawson Dominik: Workforce availability, we still have very little turnover between three and 6% average and that we need to we need to re Quebec also is getting going good also in Ontario in term of the.
Speaker Change: In the recent past, so in the past sort of two to three years, there's obviously been a lot of...
Speaker Change: Labor and Cost Inflation in the Industry, but particularly on labor.
Lawson Dominik: Salary increase we just expect a normal year.
Speaker Change: And it would be helpful just to get your comments on what you're seeing in the various regions today.
Speaker Change: Three 3% to 4%.
Speaker Change: Kind of so there is no.
Speaker Change: to improve both with respect to labor costs but also labor availability. Thanks very much.
Speaker Change: There is no we don't see big issue on that and maybe why we're talking about inflation.
Speaker Change: Interesting.
Speaker Change: Hi Lawson, Dominique speaking. We see a stabilization in terms of workforce availability. We still have a very low turnover.
Speaker Change: Trending going on diesel.
Speaker Change: Deal and also cyanide that we had the we see now that's going to help a bit more higher on the on the line, but ordered in that.
Speaker Change: between three and six percent average in 2023 Quebec also it's getting going good also in Ontario in terms of a salary increase we just expect a normal year
Speaker Change: It is stabilizing may be getting lower.
Jason: And welcome Jason.
Jason: Yes, we still have a tight market, but as Dominic mentioned it is stabilizing.
Speaker Change: I don't know, 3-4% kind of, so there's no, we don't see a big issue on that, and maybe while we're talking about inflation, there's interesting...
Speaker Change: Low turnover and Mckesson in particular, one of the reasons that our costs are lower is that we are focused in on internalization of our contractors and we've seen good progress, but overall vacancy rates are pretty low.
Anita Stoney: Trending going on diesel, steel, and also cyanide that we had, we see now, that's going to help a bit more higher on the line, but other than that, it is stabilizing, maybe getting lower a bit.
Speaker Change: Yes.
Speaker Change: I'll just jump in buy.
Speaker Change: Saying, something I, often say which is.
Speaker Change: The big driver of quarterly costs. This quarterly production when the teams do a great job like they did this quarter and they deliver good production.
Lawson Winder: Hi Lawson, just on Ontario, yeah we still have a tight market, but as Dominique mentioned, it is stabilizing. We have a low turnover and at MacArthur in particular, one of the reasons that our costs are lower is that we are focused in on internalization of our contractors and we have seen good progress. But overall vacancy rates are pretty low.
Speaker Change: They almost always deliver great costs. So it's just important to keep that in mind as well.
Speaker Change: Okay. Thank you all for the comments and then just.
Speaker Change: You made some comments on <unk> and some of the other assets in the outlook for resource and reserve growth for year end.
Speaker Change: And I'll just jump in by saying something I often say which is
Speaker Change: Could we get just.
Speaker Change: Early look on your thinking in terms of overall reserve replacement for on a consolidated basis for <unk>.
Speaker Change: The big driver of quarterly cost is quarterly production. When the teams do a great job, like they did this quarter, and they deliver good production, they almost always deliver great costs. So it's just important to keep that in mind as well.
Speaker Change: <unk> Nikko heading into year end, and then just any thoughts on whether there might be an update to the gold price assumption considered.
Speaker Change: It's a bit too early in the year I would see to come it down the gold price assumption and now are we going to move on.
Speaker Change: Again, yeah, thank you all for those comments and then just...
Speaker Change: Guy, you made some comments on HOPE and some of the other assets and the outlook for resource and reserve growth for year end. Maybe could we get just an early look on your thinking in terms of overall reserve replacement on a consolidated basis for...
Speaker Change: So that still need to be seen we are usually completing our analysis. During Q3 Q4 to make up our mind early in the year. So too early for that as same as well during a difficult we've been basically.
Speaker Change: Running a couple of internal Ron on some project with just the Q1 result, I think we're pretty good shape and I'm expecting as I mentioned in my head. So I think we're in a good position to replace what we mine this year.
Speaker Change: Agnico heading into year-end, and then just any thoughts on whether there might be an update to the gold price assumption considered.
Speaker Change: I would say Theres no majors steady to come in like when we added the <unk> and <unk> last year. So we're not expecting a big bump associated with the major project updates or are we expecting more of a kind of a flat replacement.
Speaker Change: It's a bit early in the year, I would say, to commit on a gold price assumption, and are we going to move on?
Lawson Winder: So, that still needs to be seen. We are usually completing our analysis during Q3, Q4 to make up our mind early in the year. So, truly for that, same as well, during it's difficult, you know, we've been basically...
Speaker Change: As ADC, but it's still early in the year.
Speaker Change: Fantastic. Thank you all very much and congratulations on a great quarter.
Speaker Change: Running a couple of internal runs on some projects with just the Q1 results. I think we're in pretty good shape and I'm expecting, as I mentioned in my... So I think we're in a good position.
Speaker Change: Yes.
Ralph <unk>: Thank you. Our next question comes from the line of Ralph <unk> from eight capital go ahead. Please.
Speaker Change: to replace what we mined this year.
Speaker Change: I would say there's no major study to come like when we added the detour and East Gouldie last year. So we're not expecting a big bump associated with the major project updates. We're expecting more kind of a flat replacement as I see, but it's still early in the year.
Ralph <unk>: Thanks, very much good morning.
Speaker Change: When we look at this supplemental exploration budgets.
Ralph <unk>: How much of this is strategic and geology, driven and how much if any comes from increasing cost pressures right. So said another way is there any performance carryover on what we're seeing on the operating cost discipline side.
Speaker Change: Fantastic. Thank you all very much and congratulations on a great quarter.
Speaker Change: Into the exploration and discovery cost side of the business, especially when we look at the second half budget.
Speaker Change: Thank you. Our next question comes from the line of Ralph Profiti from Aid Capital. Go ahead, please.
Speaker Change: I'd say to the contrary you know we've seen some easing into our overall drill cost. So we managed to drill more I would say up to 10% more than originally planned in our first half. So. The addition, we're doing in the second half is very directed to as you heard to detour because you know along.
Rolf Profitti: Thanks very much. Good morning.
Rolf Profitti: Ammar, when we look at this supplemental exploration budget, you know, how much of this is strategic and geology driven?
Rolf Profitti: And how much, if any, comes from increasing cost pressures, right? So said another way, is there any performance carryover on what we're seeing on the operating cost discipline side into the exploration and discovery cost side of the business, especially when we look at this second half budget?
Ralph <unk>: With the exploration ramp and I know eventually our desire to bring the.
Ralph <unk>: The upper part of the of the Western extension of the deposit to reserve. So it ties along with the ramp of lump and same in monarch <unk> to eventually comment on additional infrastructure, increasing the pace of it there to get more clarity sooner than later and albeit with a great result, we've been getting in order again to come back with some more clarity.
Ammar: I would say to the contrary, you know, we've seen some easing into our overall drill cost. So we managed to drill more.
Speaker Change: I would say up to 10% more than originally planned in our first half.
Speaker Change: And 25% 26, so better cost performance better unit cost some easing the market is favorable currently it's difficult for a lot of the smaller junior to get <unk>. Therefore, there has been there have been any easing and we've been quite pleased with our ability to renegotiate contracts and get better right.
Speaker Change: So the addition we're doing in the second half is very directed to, as you heard, you know, to detour because, you know, along with the exploration ramp and, you know, eventually our desire to bring the upper part of the western extension of the deposit to reserve. So it ties along with the ramp development, same in the Mont Arctic, you know, in order to eventually commit on additional infrastructure, increasing the pace over there to get more clarity sooner than later and obey with the great result we've been getting in order again to come back with some more clarity in 2025 or 2026.
Speaker Change: Great excellent answer.
Ralph <unk>: Jimmy a capital allocation question.
Jimmy: On the private placement debt and the cost of that debt.
Speaker Change: We're likely to see the outlook for rates come lower and.
Jimmy: And we're seeing a step up in the gold price as these maturities come due how are we thinking about the process of looking into either paying that off partitioning or rolling it forward.
Speaker Change: So, better cost performance, better unit costs, I'm easing the market is favorable. Currently, it's difficult for a lot of the smaller junior to get capital. Therefore, there's been sort of an easing and we've been quite pleased with our ability to renegotiate contract and get better rate.
Speaker Change: Yes, thanks for the question.
Speaker Change: I would say, we do have the remaining $450 million on the term facility due in April of 2025. So we will look to certainly repay that between now and then.
Speaker Change: Great, excellent answer.
Speaker Change: Jamie, a capital allocation question on the private placement debt and the cost of that debt, as we're likely to see the outlook for rates come lower and we're seeing a step up in the gold price. As these maturities come due, how are we thinking about the process of looking into either paying that off, partitioning, or rolling it forward?
Speaker Change: On the private notes the terms are actually quite favorable I think the average coupon is in the fours.
Speaker Change: In terms of what's outstanding and they're spread out really over the next decade, so I'd be happy keeping keeping those in place and paying them off as as they come due.
Speaker Change: Understood.
Paul: Thanks, Paul.
Speaker Change: Yeah, thanks for the question. You know, I'd say we do have the remaining $450 million on the term facility due in April of 2025, so we'll look to
Paul: Thank you.
Paul: Our next question comes from the line of John Tumazos from John Tumazos very independent Research go ahead. Please.
Speaker Change: to certainly repay that between now and then.
John Tumazos: Thank you.
Speaker Change: On the private notes, the terms are actually quite favourable. I think the average coupon is in the fours in terms of what's outstanding, and they're spread out really over the next decade. So I'd be happy keeping those in place and paying them off as they come due.
John Tumazos: Okay.
Speaker Change: Our library.
Speaker Change: On the mine Safety Awards won.
Ralph <unk>: Ah.
Ralph <unk>: Meranda operates almost 10000 feet.
Ralph <unk>: Mentioned that there was a $4 one.
Speaker Change: Understood.
Speaker Change: Victor seismic events June 24th where no one was hurt.
Speaker Change: Thank you. Our next question comes from the line of John Tumazos from John Tumazos Very Independent Research. Go ahead, please.
Ralph <unk>: And.
Ralph <unk>: Chimera sold Makassar for $5 million.
Ralph <unk>: Kirk one leg.
Ralph <unk>: After a seismic event.
John Tommaso: Thank you.
Ralph <unk>: However, the share after 5700 feet and they Couldnt go all the way to 70 to Christie.
John Tommaso: Could you elaborate?
Speaker Change: on the Mine Safety Awards won.
Ralph <unk>: <unk> and shut the mine.
John Tommaso: [inaudible]
Speaker Change: Please explain how everyone goes home safely.
Speaker Change: Le Ronde operates almost 10,000 feet deep and you mentioned that there was a 4.1
Speaker Change: When you win all of these awards when you're operating two of the tougher mines in Canada.
Speaker Change: Richter seismic event June 24th where no one was hurt.
Speaker Change: Yes, John Dumb Nic.
Rick: The rewards are from Rick and I recognize from them mining industry.
John Tommaso: Ken Ross sold MACASA for $5 million.
Speaker Change: to Kirkland Lake
Speaker Change: And giving to the based on the last year performances, and we're very very proud that we.
Speaker Change: After a seismic event.
Speaker Change: severed the shaft at 5,700 feet and they couldn't go all the way to 7,250. They walked away and shut the mine.
Speaker Change: We won two regional in one National Awards.
Speaker Change: On the <unk> situation, we had a big assist maker event at the $4 one.
Speaker Change: Please explain how everyone goes home safely.
Speaker Change: And you win all these awards when you're operating two of the tougher mines in Canada.
Speaker Change: But on the overall, we do not have major damage our ground support did the work that they were supposed to do and we have to shut down the mine underground mine for two days to do the inspection and and after that we went back that they're in we did some good work.
John Tommaso: Yes, John , Dominique.
John Tommaso: Well, the rewards are recognized from the mining industry and given based on the last year's performances, and we're very, very proud that we won two regional and one national awards.
Rick: Our model, we're expecting that one day, we're going to get over four and we get we get one over four so it was as expected and we the team continued to develop their expertise working with external expertise to.
Speaker Change: On the La Ronde situation, we had a big seismic event at 4.1, but on the overall, we did not have major damage. Our ground support did the work that they were supposed to do.
Speaker Change: By understanding does mechanism and protecting the workforce one part of that is also going and getting to more automation. So having the workers not close to the face so using more <unk> and more remote operation, which we are.
Speaker Change: We had to shut down the underground mine for two days to do the inspection.
Speaker Change: And after that, we went back there and we did some rework.
Speaker Change: Excellent.
Speaker Change: Our model we're expecting that one day we're going to get over four and we get we get one over four so it was as expected and we the team continue to develop their expertise working with external expertise to
Speaker Change: Is it five and also with that.
Speaker Change: <unk>.
Rick: And maybe maybe just and thank you John for that question because.
Carol Plumber: We appreciate the question because safety is Paramount, maybe Carol Im going to put Carol plumber on the spot sheet.
Speaker Change: by understanding those mechanisms.
Speaker Change: and Protecting the Workforce.
Carol Plumber: As our executive Vice President and.
Speaker Change: One part of that is also getting to more automation, so having the workers not close to the face, so using more mechanized and more remote operation, which we are excellent at at Z5 and also at La Ronde.
Carol Plumber: And broadly safety falls under her and she and her team have done an awful lot of work everyday.
Carol Plumber: On this and maybe just more broadly on our philosophy on safety management, Carol Yes, certainly Phil.
Carol Plumber: I think we can sum up our safety management philosophy by saying that we very much believe in safe work that every job can be done safely every time.
Speaker Change: And maybe, maybe just, and thank you, John , for that question, because...
Speaker Change: We appreciate the question, because safety is paramount. Maybe, Carol, I'm going to put Carol Plummer on the spot.
Speaker Change: And a lot of focus at all of our sites on ensuring that our people have the resources. They have the materials to have the scale and they have the knowledge in order to be able to work.
Carol Plummer: is our Executive Vice President.
Carol Plummer: And broadly, safety falls under her and she and her team have done an awful lot of work every day on this and maybe just more broadly on our philosophy on safety management, Carol.
Rick: Diffley.
Rick: And there in order to to follow up running and ensure that our people are able to do this we have a big emphasis that same place over the last couple of years and what we called in the field.
Carol Plummer: Yes, certainly. So I think we can sum up our safety management philosophies by saying that we very much believe in safe work, that every job can be done safely every time.
Rick: Our visible felt leadership, depending on which side you are at essentially the same thing.
Rick: Or essentially not only the supervisors are out in the field with the with the workers, but management is also out in the field with the workers. So are the engineers pretty well anybody walking through have their eyes open. They're looking for are risks there ensuring that the risks are controlled and that our people are able to continue to work safely.
Carol Plummer: And, you know, there's a lot of focus at all of our sites on ensuring that our people have
Speaker Change: The resources they have, the materials they have, the skills and they have the knowledge in order to be able to work.
Speaker Change: safely.
Speaker Change: and they're in order to follow up and ensure that our people are able to do this. We have a big emphasis that's been placed over the last couple of years in what we call boots in the field.
Rick: All of this doesn't prevent 100% of everything happening.
Rick: So we also put a lot of emphasis on ensuring that we really understood understand what critical controls needs to be in place.
Speaker Change: or Visible Felt Leadership, depending on which site you're at, but it's essentially the same thing. We're essentially not only the supervisors are out in the field with the workers, but management is also out in the field with the workers, so are the engineers. Pretty well anybody walking through has their eyes open, they're looking for risks, they're ensuring that the risks are controlled and that our people are able to continue to work safely.
Rick: To prevent accidents and.
Rick: And when an incident happens whether it is a near miss or somebody does actually get injured really digging deep into that to understand the root causes to ensure that it not only cannot happen again at that site, but it also cannot happen again at any of our other sites by putting in the correct preventative measures.
Rick: I think all of these awards that our teams won over the over the.
Speaker Change: All of this doesn't prevent a hundred percent of everything happening So we also put a lot of emphasis on ensuring that we really understood
Rick: In the last quarter as Don said, they're all based on the safety performance from last year. It was a record safety year for us across the company.
Speaker Change: understand what critical controls need to be in place.
Speaker Change: to Prevent Accidents.
Rick: This is really a celebration of.
Speaker Change: and when an incident happens, whether it is a near miss or somebody does actually get injured, really digging deep into that to understand the root causes to ensure that it not only cannot happen again at that site, but it also cannot happen again at any of our other sites by putting in the correct preventative measures for those things.
Speaker Change: Excellent work that our management teams at our supervisors and that our workers state over the course of the last year and we just continue to encourage them to do that every day.
Rick: With every job that they're doing.
Speaker Change: Could you elaborate on the steel or other ground support systems.
Speaker Change: I think all these awards that our teams won over the years,
Rick: Wrong.
Speaker Change: Thank you all for joining us for the last quarter. As Don said, they're all based on the safety performance from last year. It was a record safety year for us across the company, and this is really a celebration of the excellent work that our management teams, that our supervisors, and that our workers did over the course of the last year, and we just continue to encourage them to do that every day with every job that they're doing.
Rick: There.
Speaker Change: More than just a rebar mind roof falls.
Rick: Where some of that.
Rick: How they were strong enough to survive and support for Richter event.
Rick: So the Daniela speaking so.
Rick: Our ground support has evolved over the past decades of their own. So as we are mining deeper we had up to that we're designing in our ground support to resist those those kind of events. So as Nick mentioned in that case, we were expecting to have a four richter magnitude at some points, which we did.
Speaker Change: Could you elaborate on the steel or other ground support systems
Speaker Change: at Le Ronde, and Hal Ver.
Speaker Change: More than just a rebar mine roof bolt.
Nick: The good thing is that we understand where to.
Speaker Change: or CEMET, and how they were strong enough to survive and support the 4-Richter event.
Nick: Where it is so it was.
Speaker Change: So parallel geological structure down at $2 90 nanometer and there was a word level designing has adapted our grown supported has adapted and it shows a good result.
Daniel: So, Daniel speaking, so...
Daniel: Our ground support has evolved over the past decades at La Ronde. So as we are mining deeper, we adapted our design and our ground support.
Rick: <unk> resisted the event.
Speaker Change: to resist those kind of events.
Rick: That we had at the end of June.
Speaker Change: So, as Dominique mentioned, in that case, we were expecting to have a 4 Richter magnitude at some point, which we did. The good thing is that we understand where it is. So it was in a...
Speaker Change: So 30 years ago, I went underground as a place called <unk> in South Africa.
Speaker Change: 60 deaths a year one a week.
Speaker Change: Didn't go to Eric I'd go underground with Agnico vehicles. Thank you.
Speaker Change: [inaudible]
Speaker Change: Thank you.
Speaker Change: Our next question comes from the line of Mike Parkin from National Bank Go ahead. Please.
Mike Parkin: All my questions have been answered thanks, so much.
Dominique: that we had at the end of June.
Speaker Change: Thank you.
Speaker Change: Our next question comes from the line of <unk> <unk> from Scotiabank go ahead. Please.
Speaker Change: So 30 years ago I went underground at a place called Elansrand in South Africa that had 50 deaths a year, one a week. I didn't go back. I'd go underground with Agnico Eagle, thank you.
Speaker Change: Good morning, everyone. Thank you so much for taking my questions and congratulations on a good quarter.
Speaker Change: Jamie over to you first can I ask about the <unk>.
Speaker Change: Canadian dollar impact on your minds.
Speaker Change: Thank you. Our next question comes from the line of Mike Parkin from National Bank. Go ahead, please.
Speaker Change: Obviously I think that.
Rick: Helped a bit on the cost front and just remind me your sensitivity I think you budgeted at $1 34.
Mike Parkin: All my questions have been answered. Thanks so much.
Speaker Change: Be reminded that the sensitivity for the remaining portion of the year.
Speaker Change: Thank you. Our next question comes from the line of Tanya Jakusconek from Scotiabank. Go ahead, please.
Speaker Change: And what we have.
Speaker Change: Thanks, Dana Yes, that's absolutely right, we budgeted $1 34 for the full year, our realized FX in the second quarter was $1 37. So we are benefiting unique period, where we have both the benefit of higher gold prices and a weaker Canadian dollar.
Tania Jekuskonek: Good morning everyone. Thank you so much for taking my questions and congratulations on a good quarter.
Mike Parkin: Jamie, over to you first. Can I ask about
Tania Jekuskonek: Canadian dollar impact on your mines this quarter obviously I think
Speaker Change: The impact on our cash costs in Q2 was about $18 an ounce. So it is it is certainly helping but I will point out and I think Omar mentioned it in his remarks.
Speaker Change: On the costing front just remind me your sensitivity. I think you budgeted at $1.34, but I just want to be reminded of the sensitivity for the remaining portion of the year on what we have.
Speaker Change: We do in this higher gold price environment, we do face higher royalties expense. So if you look at the benefit from the weaker Canadian dollar its more or less entirely.
Speaker Change: Thanks, Tanya. Yeah, that's absolutely right. We budgeted $134 for the full year. Our realized FX in the second quarter was $137. So we are benefiting a unique period where we have both the benefit of higher gold prices,
Speaker Change: <unk> offset by the.
Speaker Change: Higher royalties costs for the second half of the year.
Rick: Based on where.
Speaker Change: Where the Canadian dollar is now I'd expect a similar 15 to $20 benefit.
Speaker Change: and a weaker Canadian dollar. The impact on our cash costs in Q2 was about $18 an ounce, so it is certainly helping. I will point out, and I think Ammar mentioned it in his remarks,
Rick: Arising from the weaker cabs.
Rick: Yes.
Speaker Change: There are some views out there.
Rick: Canadian dollar is going to continue to go down and therefore agnico is going to benefit.
Speaker Change: We do, in this higher gold price environment, we do face higher royalties expense, so if you look at the benefit from the weaker Canadian dollar, it's more or less entirely offset by the higher royalties cost. For the second half of the year...
Rick: To remember and Jamie correct me, if I'm wrong for accounts that move in the Canadian dollar.
Jamie Porter: 50% to $55 per ounce on our cost structure and I in the ballpark, yes that sounds that sounds correct.
Jamie Porter: Okay.
Speaker Change: Based on where the Canadian dollar is now, I'd expect a similar $15 to $20 benefit arising from the weaker cap.
Speaker Change: Thank you for that.
Speaker Change: My second question is.
Speaker Change: I wanted to come back to <unk>.
Speaker Change: Two things one is Jeff.
Speaker Change: It's just that there are some views out there that this Canadian dollar is going to continue to go down versus the U.S.
Speaker Change: Our strategy and the capital discipline.
Speaker Change: Just wanted to look at the projects that you have and then the second one has to do with this investment strategy and year on year. So just on the first one which is just the capital discipline as we think about these projects that you've got <unk> on the Doe potentially can be MLR, whether or not theyre shaft, we now talk.
Speaker Change: and therefore Agnico is going to benefit. I seem to remember, and Jamie correct me if I'm wrong, for a 10% move in the Canadian dollar, it's about $50 to $55 per pound on your cost structure. Am I in the ballpark? Yep, that sounds correct.
Speaker Change: Okay.
Speaker Change: About <unk>.
Speaker Change: Thank you for that. My second question is for you Ammar. I wanted to come back to two things. One is just that
Speaker Change: After a beaver potentially coming in <unk> 30 or thereabout.
Speaker Change: Then we have hoped.
Speaker Change: The piling up in a year from now we will have some sort of outlook.
Ammar Al: and the capital discipline and you just want to look at the projects that you have. And then the second one has to do with this investment strategy in juniors.
Speaker Change: Outlook for where that can fit in.
Speaker Change: Where do we see your total capital.
Speaker Change: Going to right now at one six to one 7 million.
Ammar Al: So just on the first one, which is just the capital discipline, as we think about these projects, so you've got Detour on the go, potentially Canadian Malartic with another shaft,
Rick: Finally, just get a handle to where do you see that going long that candidly, Matt at 2 billion.
Matt: As we phase these in and that's my next question is how do we look at phasing these and bring them online.
Ammar Al: We now talk about Upper Beaver potentially, you know, coming in 2030 or thereabout. And then we have Hope Bay that he's telling us in a year from now we'll have some sort of, you know, outlook to where that can fit in.
Rick: Very very good question Tanya.
Rick: Yeah.
Matt: I've spent most I'm an engineer, but I've also spent most of my career on the finance side. So we start with just a very practical approach which is.
Speaker Change: Where do we see your total capital budget going to? Right now it's $1.6 to $1.7 million.
Rick: Are these good investments.
Rick: And I know that sounds like an obvious question, but what sometimes gets.
Speaker Change: It's fine to just get a handle to where do you see this going longer term. Do we max at $2 billion as we phase these in? And that's my next portion is how do we look at phasing these in? Because you can't just bring them all in at once. Yeah, very, very good question, Tanya.
Rick: Big companies like ours in trouble or people are.
Rick: More focused on growing the business or doing a deal rather than do they actually make money.
Rick: So everything we do starts with doesn't make money.
Speaker Change: I'm an engineer, but I've also spent most of my career on the finance side, so we start with just a very practical approach, which is, are these good investments?
Rick: And is it a good return for the amount of risk we're taking on.
Rick: So again.
Speaker Change: Something like a detour underground.
Speaker Change: And I know that sounds like an obvious question, but what sometimes gets big companies like ours in trouble are people are more focused on growing the business or doing a deal rather than do they actually make money.
Rick: Again, it's a ramp it's the paste plant.
Rick: It's an extra 300, plus thousand ounces a year for decades.
Speaker Change: Honestly, that's pretty easy decision.
Rick: Our second shaft at <unk> at.
Rick: At <unk>, we've got the mill there we will have just built a shaft.
Speaker Change: So everything we do starts with, does it make money?
Speaker Change: and is it a good return for the amount of risk we're taking on? So, again, something like a detour underground.
Speaker Change: <unk> and his team telling me uncomfortable with the exploration. This is what's underground this is what's there.
Speaker Change: Honestly, that's a pretty easy decision.
Rick: So it depends as you would expect like any investment.
Speaker Change: You know, again, it's a ramp, it's a pace plant.
Speaker Change: What is the investment opportunity.
Speaker Change: It's an extra 300 plus thousand ounces a year for decades.
Rick: Skirting the issue I'm, just being honest it depends on the investment opportunity now you asked a very good question is it's not just financial capacity, it's human capacity. So we take that very much into account we.
Speaker Change: Honestly, that's a pretty easy decision.
Speaker Change: You know, a second shaft at Mallardic, we've got the mill there, we'll have just built a shaft. You know, when Guy and his team tell me I'm comfortable with the exploration, this is what's underground, this is what's there, honestly that's a pretty easy decision.
Rick: Assess the people we have we like to use our own people.
Rick: Get a lot more confidence when it's.
Rick: Daniel Perry and his team building a project.
Rick: Other than in outside consultants, who we've never used before so.
Speaker Change: So it depends, as you would expect, like any investment, you know, what is the investment opportunity. I'm not skirting the issue, I'm just being honest. It depends on the investment opportunity. Now you ask a very good question.
Rick: Long answer is it depends on the project, but to your specific question is there a total capex number in mind.
Rick: We've said at current levels.
Rick: One seven ish could it get to two if it makes sense.
Speaker Change: It's not just financial capacity, it's human capacity. So we take that very much into account. We assess the people we have. We like to use our own people.
Rick: It could but we are going to spread out.
Rick: Both our financial requirements in our human requirements based on the capacities that we have.
Speaker Change: I get a lot more confidence when it's, you know, Danielle Perret and his team building a project.
Rick: And then just because we all remember a time when we tried to build that pipeline.
Speaker Change: rather than an outside consultant who we've never used before. So
Speaker Change: Long answer is it depends on the project, but to your specific question, is there a total capex number in mind, we've said at current levels 1.7-ish, could it get to 2 if it makes sense?
Rick: There or thereabouts, and then London, yes.
Rick: Hi.
Speaker Change: The capacity of Neenah.
Speaker Change: They are hard youre absolutely right.
Rick: Okay. So that.
Speaker Change: If we were to think of these four additional projects as we face amount on human capacity. We may we may get to that 2 billion, but we try and keep that.
Speaker Change: It could, but we are going to spread out both our financial requirements and our human requirements based on the capacities that we have.
Speaker Change: That margin 2 billion total capital and then everything else would be available for <unk>.
Speaker Change: Ammar, we all remember a time when we tried to build several five mines or there about all in one go. Those things are just hard on human capacity, as you know. They are hard, you're absolutely right.
Rick: Slide four our shareholders would not be.
Speaker Change: A good way to look at it.
Rick: That's a good way to look at it now the one thing I would say is everything we invest in is upside for our shareholders. That's the only reason we invest in these things is to make them money.
Speaker Change: Okay, so if we were to think of these four additional projects as we space them out on human capacity, we may get to the $2 billion, but we try and keep that margin, $2 billion total capital, and then
Speaker Change: Okay. Thank you for that and just coming back to your strategy on investment So you've got the exploration, which gave us a rundown on may.
Speaker Change: Maybe we could talk about how you're looking at the strategy of investment in the juniors.
Speaker Change: Everything else would be available from an upside for our shareholders, would that be a good way to look at it?
Speaker Change: Two things I'm trying to understand on that is one.
Rick: Usually Atlanta portfolio I think is about 150 to 200 million or thereabouts, if I can remember.
Speaker Change: That's a good way to look at it now. The one thing I would say is everything we invest in is upside for our shareholders. That's the only reason we invest in these things is to make them money.
Speaker Change: But what I'm noticing is that your investments are more in non gold.
Rick: Julia Thanks, So two questions is it.
Speaker Change: They are these non bulk opportunities orange camp located in and therefore, you can see mining expertise helping.
Speaker Change: Okay, thank you for that. And just coming back to your strategy on investment, so you've got the exploration which Guy gave us a rundown on.
Speaker Change: Maybe we could talk about how you're looking at the strategy of investment in these juniors. Two things I'm trying to understand on that is, one, you know, you usually run a portfolio, I think about $150 to $200 million or thereabouts, if I can remember.
Speaker Change: Or is it that you are going to be moving more into non balls over the longer term.
Rick: No.
Rick: We are going to continue to be.
Speaker Change: The premier at least in our mind Gold company.
Speaker Change: But what I'm noticing is that your investments are more in non-gold juniors, so I have two questions. Is it because they are these non-gold juniors?
Speaker Change: In the World and certainly in Canada. So we're going to continue to be a gold company, we're going to continue to be a focused gold company.
Speaker Change: That said for example, our investments in <unk> and that is a.
Speaker Change: opportunities are in camps that you're located in and therefore you can see your mining expertise helping.
Rick: A very good project it is copper, but it's a large vms.
Speaker Change: This is something we know how to do we think it has potential it's early.
Speaker Change: Or is it that you are going to be moving more into non-gold over the longer term?
Speaker Change: <unk>.
Speaker Change: But.
Speaker Change: 10 year, it's more of what we've done historically, which is taken early position on things that are promising in the regions. We operate in and again I want to emphasize what I said earlier part of our capital discipline is based on knowledge.
Speaker Change: No, we we are going to continue to be
Speaker Change: The premier, at least in our mind, gold company in the world and certainly in Canada. So we're going to continue to be a gold company. We're going to continue to be a focused gold company.
Speaker Change: And we have a pretty good knowledge of that part of Canada. We have a good knowledge of that project. We have a good knowledge not just of that project, but of that region and we have a good knowledge on Vms deposits.
Speaker Change: That said, for example, our investment in 4N, that is a very good project. It is copper, but it's a large VMS. This is something we know how to do. We think it has potential. It's early.
Speaker Change: So it's driven by a.
Speaker Change: Knowledge based assessment of investment potential.
Speaker Change: But really, Tanya, it's more of what we've done historically, which is take an early position on things that are promising in the regions we operate. And again, I want to emphasize what I said earlier. Part of our capital discipline is based on knowledge.
Speaker Change: Okay. So we should.
Speaker Change: We think about that.
Speaker Change: Areas that you operate in opportunities go non bulk whether you can add value and you have expertise in Chile.
Speaker Change: And we have a pretty good knowledge of that part of Canada. We have a good knowledge of that project. We have a good knowledge, not just of that project, but of that region. And we have a good knowledge on BMS deposits.
Speaker Change: This portfolio that you are working as we have an exploration budget do you have a budget on investments as well.
Speaker Change: So first of all I think you summarized it pretty well. So so that was good we agree with that.
Speaker Change: So it's driven by a knowledge-based assessment of investment potential.
John Tumazos: And we're pretty flexible, we're a little bit bigger you're right typically had been sort of between 101 hundred $50 million I'm looking at John <unk> here It is considerably.
Speaker Change: Okay, so we should think about this as areas that you operate in, opportunities, gold, non-gold, where you can add value and you have expertise. Do we have this portfolio that you're working, as we have an expiration budget, do you have a budget on investments as well?
John Tumazos: It's above that right now.
John Tumazos: Part of that frankly is we've made some investments that have done very well and they're kind of sizable.
John Tumazos: But.
John Tumazos: As we grow that that has grown but it's really it's just the same strategy we've always had.
Speaker Change: Okay well. Thank you I appreciate you taking my question.
Speaker Change: So, first of all, I think you summarized it pretty well. So, that was...
Speaker Change: Pleasure and thank you Daniel always a pleasure and with US we are now past noon. So again. Thank you everyone for taking time out of your day and for everybody at Agnico Who's listening. Thank you for all your hard work of a nice day.
Speaker Change: Good we agree with that
Speaker Change: We're pretty flexible. We're a little bit bigger. You're right. Typically, it's been sort of between $100 and $150 million. I'm looking at Jean Robitaille here. It's considerably above that right now. Part of that, frankly, is we made some investments that have done very well, and they're kind of sizable.
Speaker Change: Thank you, Sir ladies and gentlemen. This concludes your conference call for today, we thank you for participating and asks could you. Please disconnect your lines.
Speaker Change: But you know as we grow that that has grown, but it's it's really it's just the same strategy. We've always had
Speaker Change: Well, thank you. I appreciate you taking my questions. Well, it's our pleasure. And thank you, Tanya. Always a pleasure. And with that, we are now past noon. So, again, thank you, everyone, for taking time out of your day. And for everybody at Agnico who's listening, thank you for all your hard work. Have a nice day.
Speaker Change: Thank you, sir. Ladies and gentlemen, this concludes your conference call for today. We thank you for participating and ask that you please disconnect your lines.