Q3 2024 Alamos Gold Inc Earnings Call

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Speaker Change: All participants please continue to standby the conference will begin momentarily.

Operator: This conference is being recorded. All participants please stand by, your conference is ready to begin.

Speaker Change: This conference is being recorded so it goes to the homes that don't have as you see.

All participants.

Speaker Change: Please standby your conference is ready to begin good morning, I'll now turn the call over to Scott Parsons all of them as senior Vice President of Investor Relations. Please go ahead.

Operator: Good morning, I'll now turn the call over to Scott Parsons, Alamos Senior Vice President of Investor Relations. Please go ahead.

Scott Parsons: Thank you, Operator, and thanks to everybody for attending Alamos' third quarter 2024 conference call. In addition to myself, we have on the line today John McCluskey, President and Chief Executive Officer, Greg Fisher, Chief Financial Officer, Luc Guimond, Chief Operating Officer, and Scott R.G. Parsons, Vice President of Exploration. We will be referring to a presentation during the conference call that is available through the webcast and on our website. I would also like to remind everyone that our presentation will be followed by a Q&A session.

Scott Parsons: Thank you operator, and thanks to everybody for attending Alamos third quarter 2024 Conference call. In addition to myself we have on the line today, John Mccluskey, President and Chief Executive Officer, Craig Fischer, Chief Financial Officer, Luke Chemo, Chief operating Officer and Scott.

Scott Parsons: Scott RG Parsons Vice President of exploration, we will be referring to a presentation. During the conference call that is available through the webcast and on our website I'd also like to remind everyone that our presentation will be followed by a Q&A session.

Scott Parsons: As we will be making forward-looking statements during the call, please refer to the cautionary notes included in the presentation, news release, and MD&A, as well as the risk factors set out in our annual information form.

Scott Parsons: We'll be making forward looking statements during the call. Please refer to the cautionary notes included in the presentation news release and M. DNA as well as the risk factors set out in our annual information form techniques.

Scott Parsons: Technical information in this presentation has been reviewed and approved by Chris Ploszek, our Senior VP, Technical Services, and a qualified person. Also, please bear in mind that all the dollar amounts mentioned in the conference call are in US dollars, unless otherwise noted.

Scott Parsons: Technical information in this presentation has been reviewed and approved by Chris Bostwick, Our senior VP technical services and a <unk>.

Scott Parsons: Qualified person also please.

Speaker Change: Bear in mind that all the dollar amounts mentioned in the call conference call are in US dollars unless otherwise noted now John will provide you with an overview.

John McCluskey: Now, John will provide you with an overview. Thank you, Scott. The third quarter marks the first quarter with the Mojino mine under our ownership, having completed the acquisition of Argonaut Gold in July. Reflecting the addition of Mojino, as well as strong performances from Island Gold and the Mulatos District, we delivered record production in the quarter of 152,000 oz. of gold. As guided, all in sustaining costs of $1,425 per ounce. Increased from earlier in the year, reflecting the inclusion of higher cost production from Mojino with the operation undergoing a transition period. With year-to-date production of 427,000 ounces, we remain on track to achieve our full-year production guidance, which was increased by 13% in September, reflecting the inclusion of Mojino and outperformance of Malaros.

John McCluskey: Thank you Scott.

John McCluskey: The third quarter marks the first quarter with the Juno mine under our ownership having completed the acquisition of Argonaut Gold in July.

Speaker Change: Reflecting the addition of Latino as well as strong performances from island gold and a lot of district, we delivered record production in the quarter of 152000 ounces of gold.

Speaker Change: As guided all in sustaining costs of $1425 per ounce increased from earlier in the year, reflecting the inclusion of higher cost production from a gino with the operation undergoing a transition period.

Scott Parsons: With year to date production of 427000 ounces, we remain on track to achieve our full year production guidance, which was increased by 13% in September reflecting the inclusion of Juno and outperform it took a lot of us.

John McCluskey: We're also on track. meet our full year cost guidance with a marginal decrease in costs expected in the fourth quarter. We achieved a number of new financial records in the third quarter driven by record production and gold prices. This included our third consecutive quarter of record revenue. as well as record cash flow from operations to four working capital of $193 million. We continue to generate strong, ongoing free cash flow, including $88 million in the quarter and $219 million year-to-date, while funding our high-growth, high-return initiatives. These include our largest exploration budget ever and the Phase 3 expansion at Island Gold, which will be a driver of significant free cash flow in the years ahead.

Scott Parsons: We're also on track to meet our full year cost guidance with a marginal decrease in costs expected in the fourth quarter.

Scott Parsons: We achieved a number of new financial records in the third quarter, driven by record production and gold prices.

Scott Parsons: Included our third consecutive quarter of record revenue.

Scott Parsons: As well as record cash flow from operations before working capital of 193 million.

Scott Parsons: We continued to generate strong ongoing free cash flow, including $88 million in the quarter and $219 million year to date, while funding our high growth high return initiatives.

Scott Parsons: These include our latest exploration, but our or excuse me largest exploration budget ever and the phase III expansion at island gold, which will be a driver of significant free cash flow in the years ahead.

John McCluskey: The third quarter was a transition quarter at the Maginot Mine as we implemented a number of improvements and advanced the integration of the operation with Island Gold. The combination of the two mines is expected to create one of Canada's largest, lowest cost and most profitable gold mines with significant long-term upside opportunities. This includes a centralized mill that can be expanded to support the significant exploration potential across the Alamoglou District. In July, we provided a comprehensive exploration update at Island Gold, highlighting the potential Based on our ongoing exploration success at Island Gold, we expect high-grade reserves.

Scott Parsons: Third quarter was a transition quarter, but genome wide as we implemented a number of improvements and advance the integration of the operation with island gold.

Scott Parsons: The combination of the two mines is expected to create one of Canada's largest lowest cost and most profitable gold mines with significant long term upside opportunities.

Scott Parsons: This includes a centralized mill that can be expanded to support the significant exploration potential across the island Gold district.

Scott Parsons: In July we provided a comprehensive exploration update at island gold highlighting the potential.

Scott Parsons: Based on our ongoing exploration success at island Gold, we expect high grade reserves to.

John McCluskey: to expand. and the resource increase for the ninth consecutive year. We are also defining opportunities to expand the Maginot Open Pit and other near-mine targets like the North Shear, which could serve as a source of additional mill feed within an expanded mill.

Scott Parsons: To expand.

Scott Parsons: And the resource to increase for the ninth consecutive year.

Scott Parsons: We were all sort of finding opportunities to expand the mosquito open pit and other near mine targets like the north sheer which could serve as a source of additional mill feed within an expanded milk.

John McCluskey: In September, we announced the development plan for PDA outlining an attractive, low-cost, high-return underground project that is expected to triple the mine life. of the Mulatos District to at least 2035, given the significant exploration upside at PDA and the nearby Sir Palone target. we see excellent potential to further extend the mine life and improve already robust economics.

Scott Parsons: In September we announced the development plan for P. D a outlining.

Scott Parsons: An attractive.

Scott Parsons: Low cost high return underground project that is expected to triple the mine life.

Scott Parsons: There's a lot of district to at least 2035.

Scott Parsons: Given the significant exploration upside at P. D a.

Scott Parsons: Nearby sort of prolonged target.

Scott Parsons: We see excellent potential to further extend the mine life and improve already robust economics.

John McCluskey: Scott will delve into the details. of the upside potential later in this call. We were also recognized as a top performer by the Toronto Stock Exchange with inclusion into the TSX 30 reflecting a 134% increase in our share price over the trailing three-year period. Given the number of catalysts we have coming up over the next year, we expect this strong performance to continue. This includes ongoing exploration updates, a burnt timber and linquid study later this year and our mineral reserve and resource update early next year. This will be followed by an updated mine plan for the Island Gold District mid-2025 and a larger mill expansion study outlining upside scenarios for the district later in the year.

Speaker Change: Scott will go will delve into the details.

Scott Parsons: Of the upside potential later in this call.

Scott Parsons: Yeah.

Scott Parsons: We were also recognized as a top performer by the Toronto stock exchange with inclusion into the T. S X 30, reflecting 134% increase of our share price.

Scott Parsons: Over the trailing three year period.

Scott Parsons: Given the number of catalysts, we have coming up over the next year. We expect this strong performance to continue.

Scott Parsons: This includes ongoing exploration updates upper timber and linked with studies later this year.

Scott Parsons: And our mineral reserve and resource update early next year.

Scott Parsons: This will be followed by updated mine plan for the island Gold District, mid 2025, and a larger mill expansion study outlining upside scenarios for the district later in the year.

John McCluskey: Turning to slide five. The addition of the genome complements our strong growth profile and has opened up longer term upside opportunities. As outlined in our three-year guidance in September, Mageno has increased our production rate by approximately 20% to 600,000 ounces per year. Our all-in sustaining costs have also increased approximately 11% but remain well below the industry average and are expected to decrease by more than 10% over the next several years. In 2026, completion of the Phase III expansion is expected to push our annual production rate closer to 700,000 ounces of gold per year and decrease our all-in sustaining costs to 1,150 per ounce.

Scott Parsons: Turning to slide five.

Scott Parsons: The addition of the Geno complements our strength or our pardon me our strong growth profile and has opened up longer term term upside opportunities as outlined in our three year guidance in September but Gino has increased our production rate by approximately 20% to 600000 ounces per year.

Scott Parsons: Our all in sustaining costs have also increased approximately 11%, but remained well below the industry average and are expected to decrease by more than 10% over the next several years.

Scott Parsons: In 2026 completion of the phase III expansion is expected to push our annual production rate close to 700000 ounces of gold per year.

Scott Parsons: And decrease our all in sustaining costs to 1150 per ounce.

John McCluskey: Lynn Lake is expected to provide additional growth. and takes us to a longer-term rate of 900,000 ounces per year, while helping to drive all-in sustaining costs below $1,100 per ounce. All of this growth is fully funded. and all of this growth is lower cost.

Scott Parsons: Lynn Lake is expected to provide additional growth.

Scott Parsons: That takes us to a longer term rate of 900000 ounces per year, while helping to drive all in sustaining cost below $1100 per ounce.

Scott Parsons: All of this growth is fully funded.

Scott Parsons: And all of this growth is lower cost.

John McCluskey: What is not illustrated in this graph is the potential to further expand the Maginot Mill to between 15,000 and 20,000 tonnes per day, which could support additional growth and take consolidated production closer to 1 million ounces per year.

Scott Parsons: What is not illustrated in this graph is the potential to further expand the machine aux Mille to between 15020 thousand tons per day, which could support additional growth and take consolidated production closer to 1 million ounces per year.

Greg Fisher: I'll now turn the call over to our CFO, Greg Fisher, who will review our financial performance. Thank you, John. On to slide six, we sold a record 145,200 ounces of gold in the third quarter at an average realized price of $2,458 per ounce for record quarterly revenue of $361 million. Our gold sales were approximately 4% lower than production in the quarter due to timing, with the sale of these ounces to benefit future quarters. Total cash costs of $984 per ounce, and all in sustaining costs of $1,425 per ounce were both up from earlier in the year, reflecting the inclusion of higher cost production from All sustaining costs were also impacted by higher stock-based compensation driven by the increase in the share price during the quarter.

Speaker Change: I'll now turn the call over to our CFO, Greg Fischer, who will review our financial performance right.

Greg Fischer: Thank you John.

Greg Fischer: On to slide six we sold a record 145200 ounces of gold in the third quarter.

Greg Fischer: Average realized price of 2000 and $458 per ounce for record quarterly revenue of 361 million.

Greg Fischer: Our gold sales were approximately 4% lower than production in the quarter due to timing with the sale of these ounces to benefit future quarters.

Scott Parsons: Total cash costs of $984 per ounce and all in sustaining costs of $1425 per ounce were both up from earlier in the year, reflecting the inclusion of higher cost production from as you know.

Scott Parsons: All in sustaining costs were also impacted by higher stock based compensation driven by the increase in the share price during the quarter.

Greg Fisher: Excluding Maginot, our total cash costs for the quarter would have been $118 per ounce lower and all in sustaining costs $184 per ounce. We expect our consolidated costs to decrease in the fourth quarter, reflecting a significant improvement from its Given our strong year-to-date performance, with costs well within the range of guidance, we remain on track to meet our full year cost guidance.

Speaker Change: Excluding the Juno, our total cash costs for the quarter would've been $118 per ounce lower and all in sustaining cost of $184 per ounce Laura.

Speaker Change: We expect our consolidated costs and decreased in the fourth quarter, reflecting a significant improvement from as you know.

Speaker Change: Given our strong year, they performance with costs well within the range of guidance, we remain on track to meet our full year cost guidance.

Greg Fisher: With the closing of the Argonaut acquisition on July 12th, it was a complex quarter from a financial perspective. This included a number of non-recurring items related to the transaction and retirement of Argonaut debt and near-term gold hedges. As part of the acquisition, we inherited 330,000 ounces of gold forward sale contracts between 2024 and 2027 hedged by Argonaut at prices ranging from $1,821 to $1,860 per ounce. In July, we completed a gold sale prepayment agreement for the delivery of 49,400 ounces in 2025 and used the proceeds of $116 million received to eliminate all of the Argonaut hedges in 2024 and 2025, which totaled 180,000 ounces.

Speaker Change: With the closing of the argon acquisition on July 12, It was a complex quarter from a financial perspective.

Speaker Change: This included a number of nonrecurring items related to the transaction and retirement of debt and near term goals hedges.

Speaker Change: As part of the acquisition, we inherited 330000 ounces of gold forward sale contracts between 'twenty 'twenty, four and 'twenty 'twenty seven hedged by argonaut at prices ranging from $1821 to $1860 per ounce.

Speaker Change: In July we completed the goldfield prepayment agreement for the delivery of 49400 ounces in 2025 and used the proceeds of 116 billion received to eliminate all of the Argonaut hedges in 2024, and 2025, which totaled 180000 ounces.

Greg Fisher: This eliminated more than half the hedge book and has provided us with significantly higher exposure to rising gold prices. We continue to review opportunities to eliminate the remainder of Argonauts Hedge Book, which is comprised of Gold Forward contracts totaling 150,000 ounces in 2026 and 2027. Our reported net earnings of $85 million, or $0.20 per share, include an impairment reversal on Young-Davidson of $39 million net of taxes, unrealized losses on hedge derivatives of $21 million net of taxes, unrealized foreign exchange losses of $2 million, and other adjustments net of taxes totaling $9 million. Excluding these items, our adjusted net earnings were $78 million, or $0.19 per share.

Speaker Change: This eliminated more than half the hedge book and has provided us with significantly higher exposure to rising gold prices.

Speaker Change: We continue to review opportunities to eliminate the remainder of Argos hedge book, which is comprised of Gulfport contracts totaling 150000 ounces in 2026 and 2027.

Speaker Change: Our reported net earnings of 85 million or <unk> 20 per share included an impairment reversal on young Davidson of 39 million net of taxes.

Speaker Change: Unrealized losses on hedge derivatives of 21 million net of taxes unrealized foreign exchange losses of 2 million and other adjustments net of taxes totaling $9 million. Excluding these items. Our adjusted net earnings were 78 million or <unk> 19 per share.

Greg Fisher: Operating cash flow before changes in non-cash working capital increased to a record $193 million, or $0.46 per share. FreeCastle totaled $88 million in the quarter, excluding $29 million of one-time payments related to the Argonaut acquisition, including transaction costs and overdue payables incurred by Argonaut but paid by Alamos post-close. Year-to-date, we have generated $219 million of free cash flow while continuing to invest in high-return growth. This strong performance has been led by the Mulatto District with mine site free cash flow of $187 million year-to-date and Young Davidson, which is on track to generate record free cash flow of more than $100 million.

Speaker Change: Operating cash flow before changes in noncash working capital increased to a record 193 million or 46 cents per share.

Speaker Change: Free cash flow totaled $88 million in the quarter, excluding 29 million of one time payments related to the argonaut acquisition, including transaction costs and overdue payables incurred by argonaut, but paid by almost post close.

Speaker Change: Year to date.

Speaker Change: We have generated $219 million of free cash flow, while continuing to invest in high return growth.

Speaker Change: This strong performance has been led by them a lot of district with mine site free cash flow of $187 million year to date at young Davidson, which is on track to generate record free cash flow of more than $100 million.

Greg Fisher: Capital spending, including equipment lease payments, totaled $112 million in the quarter and included $38 million of sustaining capital and $68 million of growth capital, the majority of which was focused on the Phase 3 plus expansion. Our cash balance declined slightly quarter over quarter to $292 million, reflecting one-time costs related to the Argonaut acquisition, as well as the repayment of Argonaut debt. In total, we repaid all $308 million of debt inherited from Argonaut using existing cash, and by withdrawing $250 million from our credit facility, a much more attractive turn. With a strong cash position, more than $540 million of total liquidity, and solid ongoing free cash flow generation, we remain well-positioned to fund our high-return growth initiatives.

Speaker Change: Capital spending, including equipment lease payments totaled $112 million in the quarter and included $38 million of sustaining capital and $68 million of growth capital. The majority of which was focused on the phase III plus expansion.

Speaker Change: Our cash balance declined slightly quarter over quarter to $292 million, reflecting one time costs related to the Oregon acquisition as well as the repayment of Argonaut debt.

Speaker Change: In total we repaid all $308 million of debt inherited from argonaut, using existing cash and by withdrawing $250 million from our credit facility I'm much more attractive terms with a strong cash position more than $540 million of total liquidity and solid ongoing free cash flow generation, we remain well positioned to.

Speaker Change: Our high return growth initiatives with now what I will now turn the call over to our CFO Luke involved to provide an overview of the operations.

Luc Guimond: I will now turn the call over to our COO, Luc Guimond, to provide an overview of the operation. Thank you, Greg. Moving to slide 7. Young-Davidson produced 44,200 ounces in the quarter, a slight increase over the previous quarter with all in sustaining costs coming in above the top end of the annual guidance range. Mining rates were impacted by lower scoop availability, as well as reduced paste availability during the mill downtime in July. For a plan, liner change, and other maintenance... The lower mining rates impacted access to higher grade salts which have been deferred into the fourth quarter.

Luke Chemo: Thank you, Greg moving to slide seven.

Luke Chemo: Young Davidson produced 44200 ounces in the quarter, a slight increase over the previous quarter with all in sustaining costs coming in above the top end of the annual guidance range.

Speaker Change: [noise] mining rates were impacted by lower scoop availability as well as reduced pace of paste availability during the mill downtime in July.

Speaker Change: [noise] for our plan liner change and other maintenance.

Speaker Change: The lower mining rates impacted access to higher grade stopes, which have been deferred into the fourth quarter.

Luc Guimond: Mining and milling rates improved in August and September and were back to guided levels of 8,000 tonnes per day by the end of the quarter. We expect higher mining rates and grades to drive production higher and cost lower in the fourth quarter. Young-Davidson continues to be a significant pre-cast flow generator delivering $36 million in the quarter and $91 million year-to-date. The operation is on track to deliver record-free cash flow and more than $100 million for the fourth consecutive year.

Speaker Change: Mining and milling rates improved in August and September and we're back to guided levels of 8000 tonnes per day by the end of the quarter.

Speaker Change: We expect higher mining rates and grades to drive production higher and costs lower in the fourth quarter.

Speaker Change: Young Davidson continues to be a significant free cash flow generator, delivering $36 million in the quarter and $91 million year to date.

Speaker Change: The operation is on track to deliver record free cash flow and more than 100 million for the fourth consecutive year.

Luc Guimond: Over to slide 8. Island Gold produced 40,500 ounces in the quarter at cost consistent with annual guidance, a solid performance with significantly higher grades offsetting lower mining rates. Mining rates were impacted by scheduled downtime in July to upgrade the underground ventilation infrastructure. The ventilation upgrade was completed on schedule, however, the ramp-up of mining rates post-completion took longer than anticipated. Mining rates were back at planned levels by the end of August and increased to average 1,200 tonnes per day in September and October, where they are expected to remain through the fourth quarter.

Speaker Change: Over to slide eight island gold produced 40500 ounces in the quarter, our costs consistent with annual guidance.

Speaker Change: Solid performance with significantly higher grades offsetting lower mining rates.

Speaker Change: Mining rates were impacted by scheduled downtime in July to upgrade the underground ventilation infrastructure.

Speaker Change: The ventilation upgrade was completed on schedule. However, the ramp up of mining rates post completion took longer than anticipated.

Speaker Change: Mining rates were back at planned levels by the end of August and increase to average 1200 tonnes per day in September and October where they are expected to remain through the fourth quarter.

Luc Guimond: Grace increased to an impressive 14.6 grams per ton reflecting the increased contribution of higher grade stokes from the 1025 mining horizon. and Positive Grade Reconciliation. With mining rates increasing in the fourth quarter, grades are expected to return to guided levels. Given the strong year-to-date performance, Allen Gold is well-positioned to achieve its full-year production and cost guidance. The operation generated positive mine site fee cash flow for the second consecutive quarter, while continuing to fund the Phase 3 Plus expansion.

Speaker Change: Grades increased to an impressive $14 six grams per ton, reflecting the increased contribution of higher grade stopes from the 10 25 mining horizon.

Speaker Change: And positive grade reconciliation.

Speaker Change: With mining rates, increasing in the fourth quarter rates are expected to return to guided levels.

Speaker Change: Given the strong year to date performance Island gold is well positioned to achieve its full year production and cost guidance.

Speaker Change: The operation generated positive mine site free cash flow for the second consecutive quarter, while continuing to fund the phase III plus expansion.

Luc Guimond: at Curve Gold Prices. We expect Island Gold to continue self-funding all of the capital for the expansion, which will be a driver of significant free cash flow growth once completed in 2026.

Speaker Change: At current gold prices we.

Speaker Change: We expect island gold to continue self funding all of the capital for the expansion, which will be which will be a driver of significant free cash flow growth once completed in 2026.

Luc Guimond: Over to slide 9. We close the acquisition of Argonaut Gold on July 12th and the integration of the Maginot and Island Gold Mines is well underway. The genome produced 16,800 ounces in the third quarter, down from the previous quarter reflecting the partial reporting period, as well as downtime to implement various improvements to the crushing circuit, including replacement of the secondary crush. Given the downtime and buildup of stockpiles, mining activities were focused on waste stripping, which will benefit future corridors. Mill throughput averaged 6,900 tons per day in the quarter, but increased to 8,900 tons per day in September.

Speaker Change: Over to slide nine.

Speaker Change: We closed the acquisition of Argonaut Gold on July 12, and the integration of them or Geno and island gold mines is well underway.

Speaker Change: Marino produced 16800 ounces in the third quarter down from the previous quarter, reflecting the partial reporting period as well as downtime to implement various improvements to the crushing circuit, including replacement of the secondary crusher.

Speaker Change: Given the downtime and build up the stockpile mining activities were focused on waste stripping, which will benefit future quarters.

Speaker Change: Mill throughput averaged 6900 tonnes per day in the quarter, but increased to 8900 tonnes per day in September.

Luc Guimond: Milling rates are expected to increase further in the fourth quarter following the completion of additional mill optimization initiatives, including replacement of the grizzly and primary crusher. These improvements are expected to support higher throughput rates of 11,200 tonnes per day in 2025, sufficient to process ore from both Maginot and Island Gold. Increased milling rates and grades are expected to drive production higher and cost lower in the fourth quarter.

Speaker Change: Rates are expected to increase further in the fourth quarter. Following the completion of additional mill optimization initiatives, including replacement of the grizzly and primary crusher.

Speaker Change: These improvements are expected to support higher throughput rates of 11200 tonnes per day in 2025.

Speaker Change: Sufficient to process ore from both Marino and island gold.

Speaker Change: Increased milling rates and grades are expected to drive production higher and costs lower in the fourth quarter.

Luc Guimond: Ahead of the planned transition to a single optimized mill within the Island Gold District in 2025, 5,700 tons of lower grade Island Gold ore was blended with Mageno ore and processed through the Mageno mill. The batch test was successful with recoveries from Island Gold Ore consistent with expectations and annual guidance of 97%. Furthermore, recoveries from Agena-OR continue to exceed expectations, averaging 95% in the quarter, driven by the strong performance from the gravity surface.

Speaker Change: Ahead of the planned transition to a single optimize mill within the island Gold District in 2025, 5007 hundred tons of lower grade Island gold ore was blended with Medina War and process through the <unk> mill.

Speaker Change: Batch test was was successful with recoveries from island gold or consistent with expectations and annual guidance of 97%.

Speaker Change: Furthermore, recoveries from a gene or continued to exceed expectations, averaging 95% in the quarter driven by the strong performance from the gravity circuit.

Luc Guimond: With the upgrades to the crushing circuit expected to be completed by year-end, we are on track to begin processing island gold ore to the significantly larger and more cost-effective Maginot Mill in early 2025.

Speaker Change: With the upgrades to the crushing circuit are expected to be completed by year end.

Speaker Change: We're on track to begin processing island gold ore through the significantly larger and more cost effective Marino mill in early 2025.

Luc Guimond: Moving to slide 10. Work on the Phase 3 Plus expansion continues to advance, including good progress on the SHAP. The shaft is currently at a depth of 812 meters, double the 400 meter depth at the end of the second quarter, and more than halfway towards its ultimate planned depth of 1,373 meters.

Speaker Change: Moving to slide 10.

Speaker Change: Work on the phase III plus expansion continues to advance including good progress on the shops.

Speaker Change: The shock is currently at a depth of 812 meters double the 400 meter depth at the end of the second quarter and more than halfway towards its ultimate planned depth of 1373 meters.

Luc Guimond: The Bin House Foundation has been completed and erection of the Bin House is ongoing. Paste plant construction activities are wrapping up with detailed engineering and earthworks complete and foundations more than 50% complete. Construction on the haul road to the Maginot Mill is underway and expected to be completed by year-end. In addition, Detailed Engineering is advancing on the Maginot Mill expansion to 12,400 tons per day, which is expected to be completed in mid-2026, to coincide with the completion of the Phase III Plus expansion.

Speaker Change: They've been house Foundry Foundation has been completed and erection of the penthouse is ongoing piece.

Speaker Change: <unk> construction activities are ramping up with detailed engineering and earthworks complete and foundations more than 50% complete.

Speaker Change: Construction on the haul road to the <unk> mill is underway and expected to be completed by year end.

Speaker Change: In addition, detailed engineering is advancing on the Merino mill expansion to 12400 tons per day, which is expected to be completed in mid 2026 to coincide with the completion of the phase III plus expansion.

Luc Guimond: Over to slide 11. In September, we updated our initial capital estimate for the Phase 3 Plus expansion to incorporate the addition of Mageno. Overall, initial capital is increased by 5% to $796 million from the initial estimate announced in the first half of 2022. This reflects ongoing inflationary pressures and scope changes to the project, which were largely offset by synergies from the Mageno acquisition, as well as the weaker Canadian dollar. We are well past the halfway point on the project, with approximately 62% of the total initial capital of $796 million having been spent and committed at the end of the third quarter.

Speaker Change: Moving to slide 11 in September we updated our initial capital estimate for the phase III plus expansion to incorporate the addition of marginal.

Speaker Change: Overall initial capital has increased by 5% to $796 million from.

Speaker Change: From the initial estimate announced in the first half of 2022.

Speaker Change: This reflects ongoing inflationary pressures and scope changes to the project, which were largely offset by synergies from them as you know acquisition as.

Speaker Change: As well as the weaker Canadian dollar.

Speaker Change: [laughter].

Speaker Change: We are well past.

Speaker Change: [noise] excuse me, we are well past the halfway point on the project was approximately 62% of the total initial capital of $796 million, having been spent and committed at the end of the third quarter.

Luc Guimond: The Phase 3 Plus expansion remains on track for completion in the first half of 2026. and will be a significant driver of our expected production growth and declining costs over the next several years.

Speaker Change: The phase III plus expansion remains on track for completion in the first half of 2026.

Speaker Change: It will be a significant driver of our expected production growth and declining costs over the next several years.

Luc Guimond: Over to slide 12. The Mulatus District has delivered another excellent quarter with production of 50,500 ounces. Slight decrease over the previous quarter as both tons and grades stacked at Lyaqui Grande declined, as expected.

Speaker Change: Over to slide 12, the Malawi district delivered another excellent quarter with production of 50500 ounces slight decrease over the previous quarter as both tonnes and grade stacked at La Yaqui Grande declined as expected.

Luc Guimond: Production is expected to decrease further in the fourth quarter with grades stacked towards the lower end of guidance. Reflecting the strong year-to-date performance of La Jolla Grande.

Speaker Change: Production is expected to decrease further in the fourth quarter with grades stacked towards the lower end of guidance.

Speaker Change: Reflecting the strong year to date performance of La Yaqui Grande.

Luc Guimond: Malatos district production was increased, Malatos production guidance was increased by 15% in September to between 185,000 and 195,000 ounces. The operation is well positioned to achieve the increased production guidance as well as its cost guidance for the year.

Speaker Change: Lot of district production was increased.

Speaker Change: Production guidance was increased by 15% in September to between 185000 and 195000 ounces.

Speaker Change: The operation is well positioned to achieve the increased production guidance as well as the cost guidance for the year.

Luc Guimond: With another strong operational performance, the Laudis District delivered $67 million of mine site free cash flow in the quarter and an impressive $187 million year-to-date, a net of $75 million of cash tax payment.

Speaker Change: With another strong operational performance loudest district delivered $67 million of mine site free cash flow in the quarter.

Speaker Change: And an impressive $187 million year to date.

Speaker Change: Net of $75 million of cash tax payments.

Luc Guimond: Over to slide 13.

Speaker Change: Over to slide 13 in September.

Luc Guimond: In September, we announced the PDA development plan, outlining an attractive, high-return project that is expected to triple the mine life of the Milatus District to at least 2035. At a $2,500 per ounce gold price, PDA has an after-tax net present value of nearly $500 million and an internal rate of return of 73%. The CDA is expected to produce 127,000 ounces per year over the first four years, and 104,000 ounces per year over the current eight-year mine life. The project has a low-cost profile with all-in sustaining costs of $1,000 per ounce. and low initial capital of $165 million, which can be funded from Alamos District Free Cash Flow Generation.

Speaker Change: It's the P. D. A development plan outlining an attractive high return project that is expected to triple the mine life of them allowed us district, who at least 2035.

Speaker Change: I had a $2500 per ounce gold price P. D. H I was an after tax net present value of nearly $500 million and an internal rate of return 73%.

Speaker Change: DD&A is expected to produce 127000 ounces per year over the first four years.

Speaker Change: 104000 ounces per year over the current eight year mine life.

Speaker Change: <unk> is a low cost profile with all in sustaining costs of $1000 per ounce.

Speaker Change: And low initial capital of $165 million, which can be funded from allowed us district free cash flow generation.

Luc Guimond: We expect to start development next year, which would put first production as early as mid-2027.

Speaker Change: We expect to start development next year, which would put first production as early as mid 2027.

Luc Guimond: There is also excellent exploration upside in the district that could extend the mine life further and enhance the project's already robust economy.

Speaker Change: There is also excellent exploration upside in the district that could extend the mine life further and enhance the projects already robust economics.

Scott Parsons: I will now turn the call over to our VP of Exploration, Scott Parsons, to review the exploration success we are having in the Mulattoes. Thank you, Luke. Moving to slide 14. Over the past two years, mineral reserves of PDA have more than doubled to 1 million ounces. The grade is also increasing 20% to 5.6 grams per ton. This growth to the end of 2023 was incorporated into the PDA development plan. As outlined in our Exploration Update in early September, we see excellent potential for the growth in higher-grade mineral reserves and resources to continue at PDA and other targets like Cerro Polon.

Speaker Change: I'll now turn the call over to our VP of exploration Scott Parsons to review the exploration success, we were having and I'm allowed us district.

Scott Parsons: Thank you Luke moving to slide 14.

Scott Parsons: Over the past two years mineral reserves of PTA and more than doubled to 1 million ounces.

Scott Parsons: Also increasing 20% to five six grams per tonne.

Speaker Change: This growth to the end of 2023 was incorporated into the P. D development plan.

Speaker Change: As outlined in our exploration update in early September we see excellent potential for growth and higher grade mineral reserves and resources to continue with PTA and other targets like surf alone.

Scott Parsons: At PDA, we continue to extend high-grade mineralization beyond existing mineral reserves and resources within a relatively untested area between the PDA zones and gap victor. This included multiple high-grade intervals such as 5.4 grams per ton over 18 meters and 23.6 grams per ton over 3 meters. Given our ongoing success with PDA, and with the deposit open in multiple directions, we expect its mineral reserve and resource base to continue to grow, which represents upside to the PDA development plan. The addition of a mill to process higher-grade sulfide has also opened up other opportunities for growth within the district.

Speaker Change: A P. A we continue to extend the high grade mineralization beyond the existing mineral reserves and resources within a relatively untested area between the P D zones and GAAP Victor.

Speaker Change: This included multiple high grade intervals, such as five four grams per tonne over 18 meters and 23 six grams per tonne over three meters.

Speaker Change: Given our ongoing success of PTA.

Speaker Change: The deposit open in multiple directions, we expect its mineral reserve and resource base to continue to grow which represents upside to the PDA development plan.

Speaker Change: The addition of a mill to process higher grade sulfide has also opened up other opportunities for growth within the district.

Scott Parsons: One opportunity is Sarah Pallone, an open-pit mine we successfully operated between 2019 and 2021. Historically, high-grade mineralization was intersected below the pit, but was not followed up on. Now that we will be constructing a mill, we are targeting and successfully expanding high-grade mineralization within multiple oxide and sulfide zones at Sierra Paloma. Step-out drilling below the open pit has identified high-grade feeder structures that range in size from 45 to 125 meters in width and up to 170 meters vertically. Some of the highlights of Cireplone include 5.5 grams per ton over 28 meters, 12.5 grams per ton over 6.5 meters, and 4.8 grams per ton over 15.8 meters.

Speaker Change: One opportunity that serve Cologne, an open pit mine, we successfully operated between 2019 and 2021.

Speaker Change: Historically high grade mineralization was intercepted below the pit was not followed up on.

Speaker Change: Now there will be constructing a mill, we are targeting and successfully expanding high grade mineralization within multiple oxide and sulfide zones that set up alone.

Speaker Change: Step out drilling below the open pit is identified high grade feeder structures. They range in size from 45 to 125 meters in width.

Speaker Change: And up to 170 meters vertically.

Speaker Change: Some of the highlights of tariff law and include five five grams per tonne over 28 meters 12, five grams per tonne over $6 five meters and 418 grams per tonne over 15.8 meters.

Scott Parsons: We expect this success to support initial underground mineral resource at Cerro Palon with the year-end update. With Sarah Palong well within trucking distance of the planned PDA mill, we will ultimately look to utilize this as an additional source of high-grade mill feed. Serapolon represents an opportunity to not only extend the mine life of the PDA project, but also sustain higher rates of production well beyond the first four years.

Speaker Change: We expect that success to support initial underground mineral resource at Cerro Cologne with a year end update.

Speaker Change: We're set up alone well within trucking distance of the planned P. D mill will ultimately look to utilize this as an additional source of high grade mill feed.

Speaker Change: Setup law and represents an opportunity to not only extend the mine life of pizza PDA projects, but also sustained higher rates of production well beyond the first four years.

Scott Parsons: Over to slide 15. In July, we announced one of the best exploration updates to date at Island Gold, reflecting the number of hydrate intercepts across the deposit. To reiterate some of these exceptional results we are seeing, this included 37 grams per ton over 7 meters in Island West and 17 grams per ton over 10 meters in Island East. We are also seeing significantly higher grade results from our delineation drilling program in the lower part of Island East, including 102 grams per ton over 17 meters and 135 grams per ton over 8 meters.

Speaker Change: Over to slide 15.

Speaker Change: In July we announced one of the best exploration updates to date at island gold, reflecting the number of high grade intercepts across the deposit.

Speaker Change: To reiterate some of these exceptional results. We are seeing this included 37 grams per tonne over seven meters in island, West and 17 grams per tonne over 10 meters in island East.

Speaker Change: We're also seeing significantly higher grade results from a delineation drilling program and the lower part of Ireland East, including 102 grams per tonnes over 17 meters and 135 grams per tonne over eight meters.

Scott Parsons: Since we acquired Island Gold in 2017, we've added more than 5 million ounces of high-grade mineral reserves and resources, which currently total 6.1 million ounces. We've also seen reserve grades increase 12% to 10.3 grams per ton and inferred grades increase 43% to nearly 15 grams per ton. Based on the success we're having in 2024, we expect another year of growth with a further increase in grades. With the deposit open laterally and down plunge, and multiple hydrate zones being defined in the hang wall and foot wall, we see excellent potential for this pace of growth to continue.

Speaker Change: Since we acquired island gold in 2017, we've added more than 5 million ounces of high grade mineral reserves and resources, which currently totals $6 1 million ounces.

Speaker Change: We've also seen reserve grades increased 12% to 10 three grams per tonne.

Speaker Change: And inferred grades increased 43% to nearly 15 grams per tonne.

Speaker Change: Based on the success, we're having in 2024, we expect another year of growth with a further increase in grades.

Speaker Change: With the deposit open laterally and down plunge and multiple high grade zones being defined in the hanging wall and footwall, we see excellent potential for this pace of growth to continue.

Scott Parsons: It's ongoing growth of Island Gold, the exploration potential we see at Mageno, and the near mine targets like the North Shear all support longer term expansion opportunities of the Island Gold District that we'll be evaluating over the next year.

Speaker Change: Its ongoing growth of island gold the exploration potential, we see them or geno and the near mine targets like the north sheer all support our longer term expansion opportunities of the island Gold district, there'll be evaluating over the next year.

John McCluskey: With that, I'm going to call back to John. Thank you, Scott. We've been a strong outperformer over the past three years. A large part of this has been driven by the continued execution on our growth plans, as well as our ability to consistently create value within our asset base through exploration success and expanding and optimizing our operations. Given the catalysts we have coming up over the next year, including a number of opportunities to continue to create value across our assets, we expect our strong performance to continue.

John McCluskey: Now I'll turn the call back to John.

John McCluskey: Thank you Scott.

John McCluskey: We've been a strong performer over the past three years, a large part of this has been driven by the continued execution on our growth plans as well as our ability to consistently create value within our asset base through exploration success, and expanding and optimizing our operations.

John McCluskey: Given the catalysts, we have coming up over the next year, including a number of opportunities to continue to create value across our assets. We expect our strong performance to continue.

John McCluskey: This concludes the formal part of our presentation.

Speaker Change: This concludes the formal part of our presentation and I'll now turn the call back to the operator, who will open the call for your questions.

Operator: I'll now turn the call back to the operator who will open the call for your questions. Thank you. We will now take questions from the telephone line. If you have a question, please press star 1. You may cancel your question at any time by pressing star 2. Please press star 1 at this time if you have a call.

Speaker Change: Thank you we will now take questions from the phone telephone lines.

Speaker Change: If you have a question. Please press star one you may cancel your question at any time by pressing star two.

Speaker Change: Please press star one at this time, if you have a question.

John McCluskey: Yeah.

Cosmos Chiu: The first question will be from Cosmos Chiu from CIBC, please go ahead. Thanks, John.

Speaker Change: Your first question will be from Cosmos <unk> from CIBC.

Speaker Change: Please go ahead.

Speaker Change: Thanks, John right now Scott and Scott.

Cosmos Chiu: Luke, Scott, and Scott. Maybe my first question is on...

Speaker Change: Maybe my first question is on Jamba Gino.

Cosmos Chiu: Good to hear the mill at Maginot was successful in processing some of the lower grade material coming from Island Gold.

Speaker Change: Good to hear the mill and the Geno was successful in processing some of the lower grade material coming from island Gold. My question is when will you start.

Luc Guimond: My question is when will you start, you know, potentially testing out some of the higher grade Yeah, hi Cosmos, Luc here. Our intent is obviously we started with the lower grade feed with the blending process just to validate our obviously our assumptions with regards to a blended feed and not impacting any any recoveries which we validated. In this quarter in Q4 we're actually looking to actually introduce higher grade material. Also again we're not expecting any issues with regards to the blended process but you know we're going to validate that from a plant perspective to validate obviously what we've seen from a lab perspective with regards to overall recoveries for the blended ore stream.

Speaker Change: Potentially testing out some of the high grade.

Speaker Change: Yeah.

Speaker Change: Yeah, Hi, Cosmos look here Oh, yeah. Our intent is obviously, we started with a lower grade feed with the blending process just to validate our obviously our assumptions with regards to a blended feed and not impacting any any recoveries, which we validated.

Speaker Change: In this quarter in Q4 were actually looking to actually introduce higher grade material also again, we're not expecting any issues with regards to the blended process, but.

Speaker Change: We're gonna validate that from a plant perspective.

Speaker Change: Obviously, what we've seen from a lab perspective with regards to overall recoveries for the the blended ore streams.

Cosmos Chiu: Of course. And on that as well, you know, you kind of touched on it.

Speaker Change: Oh of course.

Speaker Change: And Oh that is well no you kind of touched on it.

Cosmos Chiu: terms of 2025, but could you remind us in terms of the timeline for the integration of a single milling operation? I think you talked about 2025 also potentially early 2025.

Speaker Change: In terms of 2025 could you remind us in terms of the timeline for the integration.

Speaker Change: Oh, the single milling operation.

Speaker Change: You talked about 25 also potentially early 'twenty 'twenty, but I'm just trying to figure out what John that's integrated single million operation.

Luc Guimond: I'm just trying to figure out when this integrated single milling operation happen, and at that point in time, would you just shut down the island and go to a smaller Yeah, yeah, our plans have not changed from what we've communicated previously there, Cosmos. At the early, early 2025, we will be just running the Maginot facility. So Island Ore, as well as Maginot Ore, will feed into the one mill complex in early 2025. Once we start doing that, yeah, the intent would be to just actually shut down the Island Gold Mill and just put it on care and maintenance, basically.

Speaker Change: Happen and at that point in time would you just shut down the island gold with smaller island gold.

Speaker Change: Yep.

Speaker Change: Yes, our plans have not changed from what we've communicated previously their causal.

Speaker Change: Early early 2025, we will we've just running the Medina facility sold island or as well as in gene or will feed into the one mill complex in early 2025. Once we start doing that the intent would be to just actually shut.

Speaker Change: Shut down the island gold mill, and just put it on care and maintenance basically.

Greg Fisher: And then in terms of reporting-wise, I think I asked this question in the past as well, but I just want to confirm, are you going to start reporting it as a single integrated operation from an accounting perspective and guidance perspective starting in 2020? Hi Cosmos, it's Greg here. Yeah, that's correct. We'll show it as one integrated operation, so production costs will all be shown as one integrated operation.

Speaker Change: Mhm.

Speaker Change: And then in terms of reporting wise I think I asked this question in the past as well, but I just wanted to confirm are you going to start reporting it as a single integrated operation from an accounting perspective, I think guidance perspective, starting in 2025.

Greg Fischer: Hi, Cosmos, it's Greg here, Yeah, that's correct Michael.

Speaker Change: Show it as one integrated operation so production costs will all be shown as one integrated operation.

Speaker Change: Perfect.

Cosmos Chiu: And since I have you here as well, Greg, you know, I guess today, Reporter Earnings, Adjusted Earnings was slightly below street consensus. I chalked that up to the fact that this is the quarter where you acquired Argonaut Gold and you kind of talked about that as well. There were a number of one-time items that what I would consider accounting noise or one-time item.

Speaker Change: And since I have you here as well Greg.

Speaker Change: You know I guess today earnings reported earnings adjusted earnings were slightly below our street.

Speaker Change: Speak consensus I chalked that up is the fact that this is the quarter, where you acquired Argonaut gold and you kind of talked about that as well there were a number of onetime items that are what I would consider accounting noise in a one time item.

Greg Fisher: My question is, you know, is this kind of like, is this it? Q3, is that it? Or, you know, could we expect any other items that, you know, we should consider into Q4 that might be related to this trend? I mean, with respect to the Argonaut acquisition, yes, I'd say we've accrued all the P&L-related costs associated with that. I mean, you're always going to have the movement on share-based compensation, which we had a significant impact this quarter as the share price moves. But with respect to Argonaut, I think which is what your question was focused on, yes, we've accrued the cost associated with that acquisition and don't expect anything moving forward.

Speaker Change: My question is is this kind of like is this it excuse me is that it or you know can we expect any other items that you know we should consider.

Speaker Change: That might be related to this transaction.

Speaker Change: I mean with respect to the Argonaut acquisition, Yes, I'd say, we've accrued all the P&L related costs associated with that I mean, you're always going to have the movement on share based compensation, which we had a significant impact this quarter as the share price moves.

Speaker Change: But with respect to Argos I think which is what your question was focused on yes, we've accrued the costs associated with that acquisition and don't expect anything moving forward.

Cosmos Chiu: Great, thanks once again, those are all the questions we have.

Speaker Change: Great. Thanks, once again those are all the questions.

Speaker Change: Yes.

Speaker Change: Okay.

Operator: Once again, please press star 1 if you have a question.

Speaker Change: Once again, please press star one if you have the question.

Operator: There are no further questions at this time.

Speaker Change: There are no further questions at this time. This concludes this morning's call. If you have any further questions that have not been answered please feel free to contact Mr. Scott Parsons at 41636899.

Operator: This concludes this morning's call. If you have any further questions that have not been answered, please feel free to contact Mr. Scott Parsons at 416-422-4222. 689932, extension 5439.

Speaker Change: Three two extension 5439.