Q3 2024 Aura Minerals Inc Earnings Call
You have joined the meeting as an attendee and will be muted throughout the meeting.
Speaker Change: I'm going to the bathroom. I'm going to the bathroom.
i
Speaker Change: Good morning ladies and gentlemen, welcome to 3rd quarter 2024 earnings call. This conference is being recorded and the replay will be available at the company's website at rmennirose.com slash invistidories is lash.
The presentation will also be available for download. This call is also available in Portuguese. To access, you can press the globe icon on the lower right side of your zoom screen and then choose to enter the Portuguese room. After that select Muge Original Audio.
To access our conference in Portuguese, click on the icon of the global , the interior of the island of Slo-Telagum, and select an option Portuguese Room. To access the new room, search for the original.
Speaker Change: We would like to inform that all attendees will only be listening the conference during the presentation and then we will start the question and insert session when Ferdin instructions will be provided.
Before proceeding, we would like to clarify that any statements that may be made during this conference call regarding the company's business prospects, operational and financial projections and goals are the beliefs and assumptions of our executive board and the current information available to the company.
Speaker Change: The statements may involve risks and uncertainties, as they relate to future events, and therefore the pen on circumstances that may or may not occur.
Speaker Change: Present at this conference, we have Rodrigo Barbosa, President and CEO, and Kleber Cardoso, the CFO. Now, I'll turn the conference over to Rodrigo Barbosa. You may begin your conference.
Rodrigo Barbosa: Thank you very much and good morning for all.
Rodrigo Barbosa: It's a pleasure to be here again to talk about Q3 results.
Rodrigo Barbosa: and as we will go through the presentation, all of us, we are super proud.
Rodrigo Barbosa: to share with the market these strong results that's coming with a higher production, lower cost and higher growth prices. And as we'll see throughout the presentation for 2025, there's another project coming online that we will be able to continue to grow and deliver on stronger results among the next quarters.
Rodrigo Barbosa: I'm just one second.
OK.
Speaker Change: As we already disclosed with the market a couple of weeks ago
We, during the Q3, we produced 68.2 Gold Equivalent Analysis when added to the other partners on the last 12 months.
Rodrigo Barbosa: record high production of 270,000 gold equivalent houses in production on a yearly basis. This is on part a 10% increase on Q3 compared to Q3 2023.
Rodrigo Barbosa: And as we've been disclosing with the market, we would see this increase along the year. First, because we have fixed and increased production in Honduras that went through a challenging year last year. And on the top of that,
Rodrigo Barbosa: also ALMA's coming online and also reaching a full production after the transition of the contractor. So when you add the stronger production for Honduras
Rodrigo Barbosa: and then also ALMAS with the stable production and in Aranzazul, despite some lower production in Apuena, we are reaching record high production. At the same time...
Rodrigo Barbosa: And we are very glad that we could manage, and as I was mentioning, we're managing the cost is our focus. Almas has a lower cash cost compared to the average that we have. So, Almas coming online also can contribute to a lower, always sustaining cash cost. So, the combination of higher production, higher gold prices, and lower costs.
Rodrigo Barbosa: came to a record high EBITDA of 78 million dollars. This is close to 40% above...
Rodrigo Barbosa: and understanding that during the Q3, the average gold prices was $2,500 while today is above $2,700.
Rodrigo Barbosa: during Q4, there will be some impact.
Rodrigo Barbosa: on the cash generation due to the colors that CLEB is going to present but maybe that is going to be stronger and also there's some ounces that are not hedged that will benefit from a strong gold prices during Q4 and then during next year we will also have some hedges but that is less than 20% of the production so also benefited from a higher gold price.
Rodrigo Barbosa: through this record high EBITDA of 78 million dollars that was translated to 65 million dollars on a free cash flow to firm.
Rodrigo Barbosa: Peace.
Rodrigo Barbosa: Out of this $65 million, we invested $54 million. That means that we've been able to grow within our own cash flow from the operations.
Rodrigo Barbosa: and despite investing in Borborema and in other projects for growth we've been able to also to reduce the net debt to EBITDA, which give us a very strong position to start production on Borborema next year already with an earned lower leverage that will contribute to a higher production and cash flows from operations.
Rodrigo Barbosa: Bor-Borema
Rodrigo Barbosa: That was the maintenance.
Rodrigo Barbosa: speed that we will disemburse in advance in the project so that we can start the ramp up in Q1 next year.
Rodrigo Barbosa: Tyra is going to also
Rodrigo Barbosa: mentioned to you, if in one hand we have a very strong
Rodrigo Barbosa: but also there is some adjustment in the account, I mean, non-cash.
Rodrigo Barbosa: adjustment that we need to do to market to market the options that Cleber will also provide you more detail.
Rodrigo Barbosa: So, very strong Q3, and we should see Q4 continue to increase in terms of results. And then next year, Boreborema Online also adding more ounces and more EBITDA and more cash flows.
Rodrigo Barbosa: That's important, not that the strong results that we continue to move up even after Q3 closed, assessing capital markets on the debt capital markets.
Rodrigo Barbosa: We just announced R$1 billion that was initially forecast to be R$0.5 billion. We increased due to the significant demand to R$1 billion and also could reduce the cost. That shows how strong Aura has capillarity and can access.
Rodrigo Barbosa: a good source of capital when it's necessary. On the top of that, we also announced an acquisition that we entered in the process of acquisition of one project in Guatemala that has
Rodrigo Barbosa: world-class deposits that will take a few years.
Rodrigo Barbosa: Also, recently, yesterday,
Rodrigo Barbosa: We announced
Rodrigo Barbosa: a change in dividend policy, which we are now paying on a quarterly basis. We were paying biannually, now we're going to pay on a quarterly basis, reminding the investors that our policy is 20% of the dividend minus recurring capex, not including the expansion capex.
but as you can notice
Rodrigo Barbosa: on the top of our growth. So we've been able to do what we disclose to the market during our IPO in Brazil. We had a project to grow.
Rodrigo Barbosa: to invest in Greenfield projects while we pay dividends, and including also M&A. Since then, we acquired Borborema. We are now in the process of acquisition also of Bluestone.
Rodrigo Barbosa: and investing in ALMAs and now paying the dividends and maintaining and also reducing our net debt. That is a very strong signals that AURA has a very strong cash flow coming from the operations, although we will continue to
Rodrigo Barbosa: to increase along the next year with the development of Borborema, Matupá and then hopefully Cerro Blanco in Borborema.
Rodrigo Barbosa: So, next slide.
Rodrigo Barbosa: As we always disclose, safety is the most important value that we have and we monitor all the operations on the hourly basis and daily basis.
Rodrigo Barbosa: Apuena we had unfortunately a minor lost time incident during Q2 and but if were not that we also would be around 24 months in Apuena without lost time incident.
Rodrigo Barbosa: that we finish the quarter with all the geotechnical structures under satisfactory conditions.
Rodrigo Barbosa: So when we look at the production on the left...
Rodrigo Barbosa: chart on the line above the bars.
Rodrigo Barbosa: As I was mentioning, since last year, we would see a gradual increase in the last 12 months' production, and now we see that we had an increase in Q3, 2023, Q4, 2023, Q1, Q2, and Q3, 2024. This is the fifth quarter in the row that we've been increasing the last 12 months' production, and that comes from the challenge that had been addressed in Honduras, and also now the production coming in full in Almas.
When you move to the right side, on the bars, we saw Aranzazul that had a minor decrease in gold equivalent ounces. That's because we convert the production and the revenues in copper by gold equivalent. We divide it by the price of gold.
Rodrigo Barbosa: Gold price has appreciated more than copper price so that means that it's a less gold equivalent ounces produces
Rodrigo Barbosa: Although, in terms of amount of copper, it would have increased by 8%. Production of solar energy has always been very stable and very much in line with our mine plan.
Rodrigo Barbosa: triggered by a delay in some access that we would have to mine in Nasdaq, so we had to switch to other areas.
Rodrigo Barbosa: that had a lower grade and also lower recovery, but we should be entering that area very soon, either next quarter or next year. But we also should see an increase in production Q4 compared to Q3 in Apuena, although not significant. In Minas...
Rodrigo Barbosa: Again, we continue to do improvements on the operations.
Rodrigo Barbosa: either stocking or also on the recoveries, but also we had a favorable weather with less than average rain that allowed us to produce from 19,000 ounces to 21,000 during the quarter.
Rodrigo Barbosa: which was very strong and also helped us to reduce the cost.
Rodrigo Barbosa: Almost
Rodrigo Barbosa: As we were disclosing to the market that Q2, we had a unique quarter once we had a transition in the contractor, we lost production mainly in April and May. And as we showed and disclosed with the market in June, we were already producing close to 5,000 ounces.
Rodrigo Barbosa: per month.
Rodrigo Barbosa: and we had realized and we understood that now we were on track to meet a strong production in Q3 and then also in Q4. So now we are delivering this 15,000 ounces during the quarter, which is on average 5,000, which is
So as I mentioned in terms of cash costs, very important why the industry has been increasing in always sustaining cash costs due to very different factors including
Rodrigo Barbosa: inflation along the the last four or five quarters. All that we've been able to manage very closely and on the hourly basis, on the daily basis, our costs. So we've been seeing on Q4 last year, Q1, Q2, Q3, a very stable trend with a slight decrease now during Q3 and we should continue to see this this stability in terms of cash costs for Q4 during this year.
Rodrigo Barbosa: Next slide.
Rodrigo Barbosa: So, in terms of the guidance, we maintain the guidance that we initially projected to the market. We are now
Rodrigo Barbosa: at 201,000 ounces of production.
Rodrigo Barbosa: When you project us to the end of Q4, we should be very much in line with the guidance between 2.44 and 2.92, perhaps in the middle or slightly above.
Rodrigo Barbosa: with a constant prices where we, when we projected this should be above the average of the guidance in terms of production, reflecting strong production that's coming from operations despite some weaker production in Apoenum.
Rodrigo Barbosa: providing the market on Q3 year-to-date, the cash costs are now at $1,022.
Rodrigo Barbosa: It would have been below $1,000 if we had the prices that we projected. The influence here of the gold prices is when you convert copper to gold, it's less gold equivalent, so you divide the cost by less production, so that increase a little bit.
Rodrigo Barbosa: at the cash cost so that's why we provide the investors and the analysts the two references.
Rodrigo Barbosa: but despite a higher cash cost because of higher gold prices, which is good news, we've been able to manage and we are now very much in line with the lower level of the guidance we gave to the market. That also was reflected to all in sustaining cash costs. That is now at the $1,300.
Rodrigo Barbosa: would be below $1,300 at the constant prices, which is very much with the bottom range of a 2024 guidance. And we see no reason for that trend to change during Q4. In terms of CapEx.
Rodrigo Barbosa: that we now have $114 million until September. Projecting the guidance for the markets to 188 to 219. Understanding that now is Borborema just entered the phase of a high expenses and high speed of construction. So we maintain the guidance to the market also for the year-end in terms of CapEx. And Borborema very much in line with that.
Rodrigo Barbosa: schedule, and also with the budget.
Rodrigo Barbosa: Talking about Port Borema, that's the picture on the left. Things are now coming together. We are, as you've seen in the...
Rodrigo Barbosa: In the picture, we build the parts.
Rodrigo Barbosa: around the main plant, and then once those parts get ready, we assemble them, and now we are just entering the phase of assembling all the parts.
into the main plant and this picture should evolve significantly over the next couple of weeks.
Rodrigo Barbosa: Again, we always like to highlight the importance and the relevance of this project within our portfolio. This is a project that was initially projected with 812,000 ounces, although we have 2 million ounces of resources.
Rodrigo Barbosa: We utilize only 812,000 ounces as a reserve because of restriction of one area that we would only access if our road would be moved.
Rodrigo Barbosa: we only with this 812,000 ounces of reserves this project at the gold price of 2,600 is already generating
Rodrigo Barbosa: an NPV close to 540 million dollars and also internal rate of return above 81 percent. Understanding that this project after we can license to move the road.
Rodrigo Barbosa: was calculated without the impact of the callers that we did for the first three years, even to understand how relevant it is or not so significant is the impact of the callers. If we were deduct the price of the callers...
Rodrigo Barbosa: at the strike price.
Rodrigo Barbosa: during the first three years, which is 80% of the production that we did.
Rodrigo Barbosa: the hedges, it would deduct from the NPV around 30 million dollars out of the 537 million dollars so that was guarantee the payback without harming the total value of the project on the long term.
Speaker Change: Kleber, now I turn the floor to you to present the results and then we come back with questions and answers after that.
Hey, good morning, everyone.
Kleber Cardoso: So, on this page, as usual, we start with a summary of the main financial KPIs, starting with Farker, the last few quarters, and on this dotted line we bring the accumulated number for the last 12 months.
Speaker Change: Pretty much consistent with what Rodrigo was explaining, this was a quarter of many record high in terms of operational results.
Kleber Cardoso: Our revenues reach $156 million on this quarter and our net revenue is now taking less than 12 months.
Kleber Cardoso: is already at $547 million at the end of this quarter.
Speaker Change: When we look into adjusted EBITDA, as Rodrigo showed, our EBITDA increased significantly on this SPARCR to $78 million, coming from $56 million on Rodrigo's SPARCR.
Speaker Change: And when we look at it on the line, we see a trend also in the last five quarters of increasing our trading investment of Levidat. We can see acceleration now on Q3, Q4, reaching $228 billion.
Speaker Change: and I think over processing where they are, we should see another acceleration on Q4 as well.
Speaker Change: When we looked at NAMC, we reported a net loss of $12 million on this quarter. That is, once again, similar to what happened in the last few quarters related to the...
Rodrigo Barbosa: No cash losses to date related to the growth as is market-to-market.
Rodrigo Barbosa: We see that has happened, I'm going to have it on one page to explain in more detail, but it has happened since the fourth quarter of 2023.
Rodrigo Barbosa: And if excluded, the impact of the market-to-market losses on this quarter, our net income, which is the adjusted net income that we have right at the bottom, would have been positive at $43 million, much more consistent with the other operational results.
Rodrigo Barbosa: And then on the bottom right side of the page, we see the progression of our caching at that.
Rodrigo Barbosa: which on this third quarter, both the cash and net debt consistent with the previous quarter, we ended the quarter with $196 million in cash.
Rodrigo Barbosa: not including, yet, the proceeds from the debenture that we issued in October at almost R$1 billion, about US$175 million.
Rodrigo Barbosa: So, in October, our cash position increased significantly from $1.96.
Rodrigo Barbosa: And in the same direction, very positive, we see a reduction in our demand over the last 12 months, that is our ratio coming from 0.8% last quarter to 0.6% now.
Rodrigo Barbosa: Now, understanding the main items between our just EBITDA and net income for the quarter, we see out of this $78 million EBITDA that we reported.
Rodrigo Barbosa: Previous units reported very strong numbers. Minas reported $27 million EBITDA. Argentos was putting $4 million and Almas $23 million, so the premium is very strong. Apuena, despite a weaker quarterly production, also reported a $7 million EBITDA.
Rodrigo Barbosa: Then amortization, depreciation expenses of $17 million in the book, this one by Leslie Barker. That's mainly because of post-inclusion reduction, we're recognizing more depreciation in our results.
Rodrigo Barbosa: And then one of the biggest items for the park was the financial expenses, that we had an expense of 63 million dollars in the park.
Rodrigo Barbosa: Most of that related, again, to the market-to-market losses related to the gold derivatives, which were close to $57 million this quarter.
Rodrigo Barbosa: Tammy Cotigar, Dominique May Nakata and Darryl Sparkers.
Rodrigo Barbosa: We should go to the next page of our updates.
Rodrigo Barbosa: The income tax expense is $10 million according to our expectation.
Rodrigo Barbosa: Then on this page we bring an analysis to help us understand the accounting impacts of the market-to-market, especially the SPARCR, but also the previous SPARCRs, and the relationship of these accounting losses with the increasing gold price.
Rodrigo Barbosa: Here on the right side of the page, we bring the closing gold prices at the end of each quarter. We see that, fortunately, the gold price has been increasing consistently over the last four quarters.
Rodrigo Barbosa: Then, on the right side, we see the correlation between our market-to-market liabilities and increasing liabilities with such increasing gold prices.
Rodrigo Barbosa: We see in quarters where the book price is increasing more, the LIBHC, and therefore the market-to-market law is increasing more, and in other quarters the book price is increasing less, and the provision also is increasing less.
Rodrigo Barbosa: and the biggest increase in the market's market liabilities and market loss was also in this last quarter consistent with the biggest increase in both prices.
Rodrigo Barbosa: And then on this page we try to shift from an accounting view more to, I would say, an economic view. What is expected to be the cash impact in our future cash growth of our same gold derivatives.
Rodrigo Barbosa: Currently, we have about 209,000 offices of sustainable dollars.
Rodrigo Barbosa: In the year of 2028, we see on this quarter we have about 40,500 ounces of gold collars expiring.
Rodrigo Barbosa: And then when we see from 2025 to 2028, most of the same global colors are related to the world weather imaging problem.
Rodrigo Barbosa: As a reminder, when we announced the construction of Berbodema, we also announced that we were entering a hedging program to hedge the first three years of production, the 80% of the first three years of production of the Berbodema project.
Rodrigo Barbosa: Approval costs that receives what's most self-sustaining here.
Rodrigo Barbosa: On the bottom of the page we bring you what's the average price of these outstanding co-options per period. We see on average it's $2400, which at current spot prices, or if gold continues going up.
Rodrigo Barbosa: But we also bring a reference of what will be our future production, especially when Provolema comes online, to show that the resulting derivatives are a small portion of our expected future production.
Rodrigo Barbosa: which is taking our last 12 months' production and adding what is the average yearly production for Barborema since most of these outstanding agroflowers are related to Barborema.
Rodrigo Barbosa: So we see, depending on the year, between 20% and 25% of our production, between 25% and 27% would be hedges, which means 20% to 25% of our production is hedging flows.
Rodrigo Barbosa: would be capped at 2400, which means that the majority of our production, 75%, depending on the year, 80%.
Rodrigo Barbosa: will be exposed as to voter crisis. That's why continuing increasing voter crisis should be a disproportionate and positive impact, yes, in our future cash flows. As a report from the United States, it's just a more proportional part of the expected future production.
Rodrigo Barbosa: Now shifting to a view on the change in our cash and cashier equivalents throughout the third quarter, we see we started the part with 192 million dollars in cash and equivalents, then on this left side of the page is what we call the adjusted pre-cash flow to firm, which is the pre-cash flow to firm to raise by the firm lines in production, not including that many extensions.
Rodrigo Barbosa: which was more than enough to pay for both investments for growth in the market that was $54 billion.
Rodrigo Barbosa: of which about almost $40 million was related to the projects of the Borborema project. So, very positive for the regeneration environment, more than paid for the extra expenses made in the Borborema project construction.
Rodrigo Barbosa: Indy Parker. And I'm here to the right side of the page, this is the financial item highlighting that we invested six million dollars to do ShareMyMath.
Rodrigo Barbosa: And here the same analysis looking for the ear, the first nine moles. So...
Rodrigo Barbosa: Similar conclusions, cash flows generated by the mines in production were $113 million. That was more than enough to pay itself for the investment for coal in the same period that was $95 million.
Rodrigo Barbosa: And then to the right side, I would highlight the dividend and share pre-purchase. We're referring $35 million to shareholders in the first nine months, not including yet the dividend that we just announced yesterday, and bringing the cash flow close to $200 million.
Rodrigo Barbosa: and then we'll use our e-mail page to open for questions.
Rodrigo Barbosa: We are going to start.
Speaker Change: The question-and-answer session for investors and analysts. If you wish to ask a question, please click on raise hand. If your question has already been answered, you can leave the queue by clicking on put hand down.
Rodrigo Barbosa: Our first question comes from Guilherme Nipes with XP. You can open your microphone.
Guilherme Nipes: Hi, good morning, Rodrigo, Claudia, Natasha, and thanks for the opportunity. Congratulations on the great results. I have two questions here on our side.
Guilherme Nipes: My first one is, if you could provide us with an update on how you plan to prioritize the projects currently in your pipeline, given that you have now the acquisition of Bluestone, and also considering that you have the other projects like Matupá, Altamira and Serra da Estrela.
Rodrigo Barbosa: And my second question is on on ALMAS.
Rodrigo Barbosa: and considering that you have the contractual transition.
Rodrigo Barbosa: that the production increased almost 40% this quarter and cost declined by over 20%. But just to make sure that this is the normalized level for almonds as well. And if we could see any potential upside, looking further.
Speaker Change: These are my two questions. Thank you. Sure. Thank you. Thank you, Guilherme. So, in terms of the sequence of the project,
Speaker Change: and doing exploration.
Speaker Change: investments in Matupá, particularly in Pezão, right, so that we can aggregate it to Matupá along next year, and our objective to start the construction hopefully to the end of next year. That depends on the results of exploration that we might have through Pezão and also Pequenche.
Speaker Change: That is then what is scheduled.
Speaker Change: Bluestone Nieta is a transaction that needs to be closed in January and after that we will be able to provide more information although
Rodrigo Barbosa: We expect a few years to, although the project is fully advanced in terms of exploration and also engineering, we understand that it might take time to get full support from central government and local authorities, including socializing.
Rodrigo Barbosa: So that might take a few years, and of course, if those conversations go faster than expected, then we could reshuffle and prioritize. But yet, Mato Pai is on me.
Rodrigo Barbosa: We continue to do, we renewed the option in Serra da Estrela, so we continue to do exploration. We've been, of course, if we renew the options because we saw a very interesting potential, which we are now, the dry season, are doing more drilling. We plan to disclose more information on the results along the next year. We've been very optimistic.
Rodrigo Barbosa: that this can be very interesting for Aura, but that will take yet additional two or three years of explorations until we have a pre-feasibility study or the feasibility study, so you still have some time of drilling.
Rodrigo Barbosa: In terms of ALMAs, as you could see, we had a big jump from transitioning last quarter Q2 to Q3.
Rodrigo Barbosa: but low and constant improvements now on the day-to-day that we are doing, but not a big step such as we had from Q2 to Q3.
Speaker Change: Thank you.
Speaker Change: Hello, everyone. Can you hear me well?
Speaker Change: All right.
Speaker Change: First of all, congrats on the results.
Speaker Change: It was good to see the continuity of this growing trend and as you said you expect another sequential growth in 4Q. But just to understand, during last quarter's conference call you mentioned that production could reach, the quarterly production could reach a level above 70,000 ounces. Your production in Q3 was close and maybe Apoena was the key issue for not reaching that target.
Speaker Change: If you could remind us what are the main challenges for production in this operation and maybe if you could let us know what could we expect for normalized quarterly or annual production level in this operation of Apoena, this would be interesting. And the other question...
Speaker Change: As everyone knows, gold prices have been on an amazing run over the past year. So, I just wanted to see what is the outlook for gold prices in your view.
Speaker Change: Do you think that a Trump or Harris administration will have an impact on that? Thank you for the opportunity.
Speaker Change: Thank you, Ricardo. Just going back to the first question.
Speaker Change: about production levels on Q3 you mentioned 70,000
Speaker Change: if for the good news gold price has increased but that also impacted the gold equivalent production as I mentioned if it were not that we would have been above 70,000 production on the quarter
Speaker Change: and again above $70,000 during Q4, but the gold price increases so the gold equivalent translates to a lower volume. So for a very good reason we did not reach the $70,000 and hopefully we
Speaker Change: The gold price continues to increase and we have this challenge for Q4 during this year.
Speaker Change: Poyena.
Poyena: It's a...
Speaker Change: We're not providing yet the 2025 projections for the market.
Speaker Change: this year, yet it's a mine that even next year we'll have time to develop more, open more the mine. The exploration result has been very interesting, so we might have to invest more to open and have a very interesting years after we have all this preparation done.
Speaker Change: I would say that we will have a minor improvement during Q4, but we should not expect a major also change during the next quarter.
Speaker Change: the elections.
Speaker Change: I think what the market says is that either Trump or Kamala, they...
Speaker Change: they're not focusing, they haven't disclosed much what they will do to control the fiscal deficit. So in that direction, I think either one, we continue to not have a fiscal discipline and that is favorable for gold prices as well.
Speaker Change: All right, thank you.
Speaker Change: Next question from Edgar Pinto.
Speaker Change: Edgar, I think you are on mute because you are talking. Can you hear me? Now, yes.
Edgar Pinto: Okay, can I have the legal high five?
Speaker Change: Ricardo Feireira
Edgar Pinto: Do you even consider going underground there? How do you think about these operations in the medium to long term, to have lower volatility to results?
Edgar Pinto: And then my second question, and also a very specific one, on San Andres, we saw that production has improved.
Edgar Pinto: improvement significantly over the past few quarters but with a very different profile from what you had befor. Your grades remain relatively low compared to 2021, and 2022 and also your recovery rate
Speaker Change: remain well below what you had in those previous years.
Speaker Change: But your plant speed has increased significantly, so your production at the end remains very solid.
Speaker Change: So, can you please explain what is behind this lower recovery rate?
Speaker Change: now close to 62 to 65 percent and if this new profile for operations let's call this way we have higher plant feed and lower rate and recovery rate
Speaker Change: is what we need to expect going forward.
Speaker Change: Do you, can you operate with this high plant feed? Do you have any bottlenecks regarding plant feed? Maybe not, because you have a bleaching operation there, but if you could give more color here, it would be great. Thank you. Thank you, Edgar. So first thing, in Apoena, yes, I think.
Speaker Change: The mine is moving to have a bigger open pit. We don't feel it's going to be underground.
Speaker Change: but all the information that we've been receiving on exploration shows a path to a bigger pit along the medium term.
Speaker Change: I believe it's going to be volatile for the next quarters, up to the end of 2025. And then after that, we start to open up all the mine and then that will create more stability in terms of production.
Speaker Change: on Honduras.
Speaker Change: On the other hand, of course, all the operations in ALMA is very stable and with the gradual improvement next year also comes online BORBOREMA.
Speaker Change: and Honduras. That change, it comes from the change in our body. As I mentioned, the nature is not equal everywhere, so it has some changes. We enter now in the lower grades.
Speaker Change: that we should see this now stabilized at this level of grades. We don't see going back to higher grades that we saw.
Speaker Change: four years ago. And when you have lower grades, also the recovery is lower, right? It goes a little bit together. Although we feel that the team has been working significantly to increase recoveries, I think we can achieve above 65%.
Speaker Change: with the improvements that we are doing.
Speaker Change: In terms of piling, there is a bottleneck. I think we are very much at the bottleneck right now. I think there's not much what we could do to improve production. On the other hand, there's always alternatives, initiatives for us to keep the eye on the cost and see if we can gain productivity and reduce the cost.
Speaker Change: Great, great. Thank you. And if I may, just a follow-up on the first question as well. It has been only one week since the announcement of the deal with Bluestone.
Speaker Change: Have you had the chance to talk with the local government? What was the reaction there, or is it too early to say here? It's early to say, yet we entered in the process of acquisition. We are not the owner of the asset.
Speaker Change: so we can and we should only contact the government after the closing so that we go through January.
Speaker Change: Okay, thank you. Thank you very much Rodrigo Cárdenas.
Speaker Change: The question and answer session is over. We would like to hand the floor back to Mr. Rodrigo Barbosa for the company's final remarks.
Rodrigo Barbosa: Well, so I would like to thank everybody. I think it was a very strong quarter as we could show. I think as important as the strong results.
Speaker Change: is to see what AURA has been able to achieve along the last years and project what is coming for the next years. Quick remind.
Speaker Change: our investors. We did our dual listing in Brazil when we did a re-IPO of the company with a project to come from 200,000 ounces to 400,000 ounces developing ALMAs in Matupá.
Speaker Change: and our
Speaker Change: Our strategy was also to unlock value through exploration and also through M&A. That's why we would pay dividends.
Speaker Change: in the last 12 months, now reaching 9% of the dengue. In the meanwhile, we also acquired Borborema, we built ALMAS, now we are building Borborema, we acquired Serra da Estrela, we are doing exploration.
Speaker Change: we are increasing our resources and reserves as we are moving to higher production and recently also entering the process of acquisition of bluestone so we've been able to decently deliver to the market the big picture which is.
Speaker Change: to unlock value through also execution of the Greenfield project almost online, on time, on budget, and now at full production at the lower cash at the crash cost that we're projecting.
Speaker Change: Borborema, Modern Health of Construction, Dawn, coming the ramp up on time on budget expected through the first quarter next year and commercial production along the next semester.
Speaker Change: We also recently announced Bluestone, which is a project that we'll see when we would be able to build. But that's a world-class asset that would add significant also to our production with a lower cash cost as well. All of these why we're also doing exploration moving forward with them.
Speaker Change: Mato Pau, we have now acquired a Pezão, an option to Pezão and Pequente.
Speaker Change: so I had a thrill also moving forward.
Speaker Change: Hopefully we can translate this exploration program into a PEA or a pre-feasibility study in the next three to four years.
Speaker Change: and so we are very much on track to reach.
Speaker Change: the 450 000 ounces of gold equivalent within the project that we already have or even surpass this
Speaker Change: if we succeed with Bluestone and develop it in the next couple of years. So I would like to thank all for participating in this call. Very strong results, very strong quarter during Q3 with gold prices $2,500. Gold price today is above $2,700.
Speaker Change: and that we continue to push our results higher, process are under control, and next year, remember and remind you to enter a major mine for us, which produces close to 85,000 ounces of production on a yearly basis.
Speaker Change: with a lower cash cost.
Speaker Change: compared to what we have today. So we will be able to continue to increase production while we can also reduce the cost. And now with a very favorable gold prices, so I think we've been very strong with delivering results, not only the results, but also the strategic project levels and then unlock value to our shareholders. So thank you for participating.