Q4 2024 Agnico Eagle Mines Ltd Earnings Call
Joelle: Good morning my name is Joelle and I will be your conference operator today. At this time I would like to welcome everyone to the Agnico Eagle Mines Limited Q4 2024 and full year conference call.
Speaker Change: Thank you. Good morning and thank you for joining us. I'd like to start by thanking our employees, our communities, and our owners for their support throughout 2024 and into what we think will be a remarkable 2025.
Speaker Change: Next slide please. Please be advised that we will be discussing forward-looking statements and I recommend you all review the language relating to that. Next slide please.
Speaker Change: We'll spend a little bit of time today going over our 2024 results. You've seen the numbers, they're very good, and Jamie will do his usual excellent job of going through them in a moment.
Speaker Change: But what we really want to focus on this morning, what really excites us, is 2025 and beyond. After Jamie's review, Dominique will talk about how Patch 7 is helping to shape Hope Bay into potentially the next big multi-decade platform in Nunavut.
Dominique: He will also talk about something extraordinary, which is our vision to potentially get malartic to over a million ounces a year of gold production.
Dominique: Then Natasha will talk about the potential to grow the Ontario platform by 50% over the next several years, including bringing Upper Beaver online and detourist potential to get to over a million ounces a year.
Dominique: When I mention malartic to over a million ounces a year, I purposely use the word extraordinary.
That's because there's nothing ordinary about a million-ounce-a-year mine.
Dominique: With the potential for each of Malartic and Detour to produce over a million ounces per year, Agnico Eagle would have two of the six biggest gold mines in the world, with multi-decade mine lives in one of the best jurisdictions in the world, 100% owned by Agnico Eagle.
Guy: We think that is extraordinary. Guy will then provide a brief update on our exploration program. Agnico Eagle is investing more than we've ever spent on exploration, and all of that spend is justified by some of the most exciting drill results in the business.
Speaker Change: But I'm jumping ahead, I usually do. I don't want to steal their thunder.
Speaker Change: This time last year, on this call, we said we were constructive on gold prices. We felt 2024 was going to be a good year for gold and we explicitly said, this time last year, that we were going to focus on cost control in a rising gold price environment.
Speaker Change: Why? Because the reason our owners invest in gold mining stocks is precisely to benefit from leveraged increases in gold prices. They expect margin and cash flow expansion, and it's our job to deliver that.
Speaker Change: As it turns out, 2024 was a big year for gold, and with the gold price up several hundred dollars per ounce.
Speaker Change: over the year. As Jamie will discuss, for Agnico Eagle and for our owners, this increase in gold price, along with strong operational cost controls, translated into record financial results.
Speaker Change: into record earnings, into record cash flows, and into a record share price.
Speaker Change: In 2024, we did deliver the leverage to gold prices that we promised we would. And we did this by delivering record production, by controlling costs, and by being disciplined with our owners' money.
Speaker Change: At the same time, we continue to invest heavily in and strengthen our business.
Speaker Change: We advanced important projects, Odyssey Underground, Detour to a Million Ounces, Upper Beaver, San Nicolas, Hope Bay, to name just a few.
Speaker Change: We made record investments in our exploration programs, and we returned almost a billion dollars directly to shareholders in the form of dividends and share buybacks, and another 1.3 billion dollars indirectly to our shareholders by reducing our net debt.
Speaker Change: Yes, 2024 was a great year for Agnico Eagle and our owners, but what you will hear this morning is that 2025 and beyond has the potential to be even better.
Speaker Change: I'll start by saying that I believe we're in the strongest position in the company's history. I don't say that lightly. Consider, we are guiding for strong and steady production over the next three years. We are guiding for the best cost profile of our peers. We have the best project pipeline I've ever seen in 25 years in this business.
Speaker Change: We have a strong balance sheet with almost a billion dollars in cash and on our way to potentially no net debt very shortly. We operate in the best jurisdictions in the world, geologically and politically.
Speaker Change: We have great people who have experience, who trust each other, and who are motivated. And on top of all of that, we remain very constructive on the gold price.
Speaker Change: While we don't have a crystal ball, I would argue that all of the elements that have pushed gold up over the last 20 years not only remain in place, but in fact are accelerating.
Speaker Change: We think 2025 will be a volatile year across many markets globally, including gold. But for gold, we believe this volatility will be skewed to the upside, and we remain determined.
Speaker Change: As much as ever, to deliver this upside potential to our shareholders by continuing to deliver strong production and by delivering best-in-class cost control.
Speaker Change: Our production guidance for 2025-2026 is down marginally, about 2.9% from previous guidance.
Speaker Change: But let's put that into perspective. It's primarily due to accommodating some difficult ground conditions at Pinos Altos, some minor deferral of processing, some low-grade stockpiles at Mallartic, and some other relatively small changes to mine sequencing.
Speaker Change: On the other hand, the steady production guidance for 2027 does demonstrate the ability of our team to deliver impressive, profitable production as we transition to some of our important growth projects starting in 2030 and beyond.
Speaker Change: With strong production, peer-leading costs, and with strong gold prices, Agnico Eagle remains well-positioned to, one, continue to deliver excellent financial results,
Speaker Change: Two, continue to invest in the best pipeline we've ever had, and three, continue to strengthen the balance sheet and return substantial capital to shareholders. We can do all three. And with that introduction, I'd like to turn it over to our CFO, Jamie Porter.
Thank you, Ammar.
Jamie Porter: As Ammar mentioned, 2024 was a record year on multiple operational and financial fronts. Our strong safety and operating performance drove record annual gold production, and that paired with good cost control and a higher gold price environment resulted in record earnings, record operating cash flow, and record free cash flow.
Jamie Porter: Higher sustaining capital in the fourth quarter was as expected as we caught up from underspending earlier in the year.
Jamie Porter: For the full year, we came in above the midpoint of our production guidance at 3.49 million ounces.
Jamie Porter: We were also very pleased to report that we achieved our cost guidance with total cash costs for the year coming in right around the midpoint of our guidance at $903 per ounce and all in sustaining costs of $1,239 per ounce well within our guided range.
Jamie Porter: We are proud of the work our teams have done and their continued efforts at controlling costs and focusing on continuous improvement. Our all-in sustaining costs continue to be hundreds of dollars per ounce below those of our peers.
Jamie Porter: We reported several financial records in the fourth quarter. Again, record revenue of $2.2 billion, record adjusted earnings of $632 million, or $1.26 per share, and record operating cash flow of over $1.1 billion, or $2.26 per share.
Jamie Porter: For the full 2024 year, we had record financial results again across the board, generating approximately $2.1 billion in free cash flow at an average gold price of $2,384 per ounce. At current spot gold prices, we expect significant further margin expansion and cash flow growth in 2025.
We move on to the next slide.
Jamie Porter: I'm pleased to report that continued margin expansion and leverage of the gold price allowed us to strengthen our balance sheet significantly in the fourth quarter. During the quarter, we repaid the remaining balance of $325 million on our term loan facility ahead of the April maturity.
Jamie Porter: Since the beginning of the year, since the beginning of 2024, we've reduced our net debt significantly from $1.5 billion at the start of the year to just $217 million of net debt at year end.
Jamie Porter: In 2025, our debt maturities total only $90 million, which we expect to pay as due. At current spot prices, we plan to further strengthen our balance sheet and increase our financial flexibility in 2025.
Jamie Porter: If we move on to the next slide, looking at 2024, we prioritize returns to shareholders.
Jamie Porter: At current margins, we are fortunate to be in a position to do some of everything we want to do we can continue our program of strong shareholder returns for the quarterly dividend and opportunistic share repurchases. We can continue to strengthen the balance sheet and improve our financial flexibility and importantly, we can reinvest in the business by <unk>.
Jamie Porter: Allocating additional capital to our high return internal growth projects.
Jamie Porter: As you will have seen from our guidance our sustaining capital spending in 2025 is flat relative to 2024, but we are increasing our growth capital and exploration spending.
Jamie Porter: At Odyssey Detour underground upper Beaver whole Bay, and San Nicolas We have an enviable pipeline of strong return internal development projects.
Jamie Porter: We will continue to take a measured approach to capital allocation with a focus on generating strong returns to our shareholders with that I'll turn the call over to Don who will provide an overview of our Quebec, none of it in Finland operations.
Jamie Porter: Jamie.
Jamie Porter: Looking to our 2024 result, we really hit a homerun with production exceeding midpoint of guidance and costs well under control.
Jamie Porter: These results have been bolstered by outperformance at several sites, including their own Canadian about Arctic media, Dean and Meadowbank spin.
Jamie Porter: Specifically I want to recognize the exceptional work done by our Nunavut teams this year.
Jamie Porter: Set several operational records, including record throughput at <unk> and record gold production at Meadowbank over 500000 ounces.
Jamie Porter: Combined with higher gold price and excellent cost control, our Nunavut platform achieved record operating margin of $1 3 billion in 2024.
Jamie Porter: I am pleased to share that we did not only met our cost and production guidance, but we also maintained high safety standards across the sites setting new safety record low at <unk> <unk> Bank and Kittila.
Jamie Porter: I would like to take this opportunity to thank all our employees and contractors for their continuous effort in improving safety and their hard work, which drove the excellent result in 2024.
Jamie Porter: Looking to the next three years I am confident that we will meet our target.
Jamie Porter: Mentioned.
One of the main reason is because we continue to be in a position with few distractions and our low turnover, allowing our team to focus on productivity improvements.
We saw a result of these efforts in 2024, and we intend to continue leveraging opportunities like gradually introducing technologies that enhance production such as increasing the use of undergone automated equipment at their site.
Jamie Porter: Now moving to our growth vision I would like to bring you to your attention three main projects.
Jamie Porter: First at Meadowbank, our team is working to extend the life of mine beyond 2028, considering the current gold price and the low risk associated with this we are evaluating different scenario and we expect preliminary finding by the end of this year at both <unk> expansion and <unk>.
Jamie Porter: Very exciting opportunity also in Nunavut Tobey.
Jamie Porter: With the new patch <unk> result, we now have in hand, the resource to work on our production plan of over 400000 ounces per year for many years. He would talk about patch seven later it appears to be the best grade between the three known deposit at Holtby why.
Jamie Porter: While we continue to drill and expand the mineral resource our Q1 priority is to freeze the projects go incorporating cash seven resources and then to focus on detailed engineering.
Jamie Porter: Our target is to reach over 40% engineering by the end of this year to de risk and secure the project execution before potentially green lighting. The project. It is similar that what we did.
Speaker Change: Yeah, Deane when we built it.
Speaker Change: We expect to give more detail to the market in their first outflow of 226 about Tobey.
Speaker Change: The less exciting growth project I would like to bring to your attention is the field immediate strategy at <unk> Nick.
Speaker Change: We are currently transitioning from the biggest open pit gold mine in Canada to the biggest undergone gold mining Canada. The transition should be completed in 2029, when we forecast.
Speaker Change: Gold production of around 550000 ounces per year. Our next step is to pave the road for our vision of potentially processing 1 million ounces annually on Arctic.
Speaker Change: With many of them on Arctic, reaching 1 million ounces per year, we could have as I mentioned two of the top six largest gold mine in the world.
Speaker Change: And I would like just to underline that but it is not just on the top of mind, but they will also be located in Canada, a stable jurisdiction known for its high environment and safety standards.
Speaker Change: The top right of the slide nine you can see the picture of the Odyssey shop I am pleased to report that the project is progressing very well both on schedule and on cost as outlined in our slide.
Speaker Change: To finish my part I would like to give you some insight about our field immuno strategy and our vision to achieve to 1 million ounces at might Arctic.
Speaker Change: The Neal showed at the bottom right of the picture has a total capacity of 60000 ton per day.
Speaker Change: Starting in 2029, as we transition to underground grade approximately 400000 ounces will become available we are working hard to capitalize on this opportunity and he are the building blocks for that vision.
Speaker Change: First our second shop at Odyssey Gil will provide more detail on this but we continue to expand the underground zones and there is a room for a second shaft, which could be adding around 200000 ounces per year, we are expecting to provide more information by the end of 2026 about the second shaft.
Speaker Change: Second at Marvin would there isn't transaction with Oaktree.
Speaker Change: We continue consolidating the prospective land around that Arctic.
Speaker Change: The monarch property or the more bend property located about 15 kilometers of Kennedy Antarctic can put in Chile feed demand Arctic meal with an additional 130000 ounces per year.
Speaker Change: We are also anticipating provide to provide more detail on this in 2026.
Speaker Change: At <unk>, we are advancing the technical evaluation, the permitting and community engagement for this project.
Speaker Change: Which could also contribute for additional ounces of about 100000 ounces per year at them at Arctic meal.
With these three block in addition to the current mine plan, we see the potential for 1 million ounces at Canada MLR in the early thirties.
Speaker Change: In term of tonne H. These project together with the OTC, let's call it phase one.
Speaker Change: We could feel the EMEA up to about 45000 ton per day, leaving approximately 10 to 15000 ton per day still.
Speaker Change: Available as a capacity.
Speaker Change: So stay tune. We're currently at 25 drilled attorney to continue finding more gold at <unk>, Kim and I'm excited about what's next.
Speaker Change: I will pass it onto an ADESA.
Speaker Change: Thanks, Tom and good morning, everyone.
Speaker Change: So I'll cover the operational highlights for Ontario, Mexico and Australia.
Speaker Change: The regions delivered good operating and cost performance in the fourth quarter and that translated into a solid overall performance for the year.
Speaker Change: But starting on the safety front.
Speaker Change: <unk> online via both hit records in our safety performance in 2020 for.
Speaker Change: Makassar is an operation that was steadily growing last year, while linear with moving more closer to closure.
Speaker Change: Given that both operations we are in a state of change, it's really easy to become distracted.
Speaker Change: When there is a reduction in workforce that was the case in Atlanta. So I just wanted to take a second and just congratulate both site. It says a lot about the safety culture that you've developed and Youre a consistent focus on safe production.
Speaker Change: Now as Don mentioned, we have a lot of records to celebrate across our sites. This year and these records are a direct result of the continued focus on increasing operational efficiencies and cost control at all assay.
Speaker Change: Detour Macassar Fosterville there were no exception.
Speaker Change: <unk> set a third consecutive quarterly mill throughput record.
Speaker Change: And last quarter, they hit too stupid right that was just ahead of the targeted 76007 hundred tons per day.
Speaker Change: Macassar also finished the year strong and on the back of productivity improvements they hit annual mill throughput and annual production Records.
Speaker Change: Over at Fosterville, They broke the record of annual underground tonnes mined.
Speaker Change: We also successfully opened up a third mining front with the commencement of production at Robin's Hill.
Speaker Change: And then at Pinos Altos.
This was a tough year for them. The team worked very hard but this is a mature mine that effectively operate six satellite deposits, where we are.
Speaker Change: Either mining at the extremities of the ore body.
Speaker Change: In remnant areas, both of which are not easy to mine. So we have taken a step back and reassess the productivity rates going into 2025 with the focus on cost control.
Speaker Change: So looking back we had a lot of good things that our team delivered on in 2024, but looking forward, we have a lot of exciting things on the go as well.
Speaker Change: And we will start with Mckesson.
Speaker Change: We're looking at the model Debottlenecking. The mill now this includes working on a number of initiatives to optimize budgeted circuit reduce downtime.
Speaker Change: These efficiencies and basically improved the mill throughput.
Speaker Change: At Fosterville the site completed an initial assessment at the end of the year that shows the potential to increase annual production to an average of approximately 175000 ounces.
Speaker Change: The team is going to continue to conduct further technical evaluations and do some infill drilling to confirm the feasibility of the scenario. So that we will be able to incorporate these results and give future guidance.
Speaker Change: <unk> San Nicolas the plan is to continue to work on the feasibility study and develop the execution strategy project approval is expected to follow of course dependent on the receipt of the permits and the results of the study.
Speaker Change: Now coming back to our Ontario platform.
Speaker Change: Detailed underground at upper Beaver are two projects that we are most excited about because it's an opportunity as an opportunity to grow low risk profitable production and one of the best mining jurisdictions in the world.
Speaker Change: And as Mike mentioned with the addition of these two projects, we could potentially see gold production from Ontario operations grow by 50% beginning as early as 2030.
Speaker Change: So I'll touch on both of the projects in the following slides.
Speaker Change: Starting with <unk>. This is a world class asset.
Speaker Change: We provided last June outlined a pathway for Detroit to be a 1 million ounce producer annually for over 14 years, beginning as early as 2030.
Speaker Change: Last year, we approved the development of an exploration ramp and <unk>.
Speaker Change: <unk> of <unk>.
Speaker Change: Sample to further de risk the project.
Speaker Change: It's still early days, but there's been some really good progress made with we've been completing the site preparation and upon receipt of the permit to take water.
Speaker Change: We will commence the ramp development.
Speaker Change: Now as for upper Beaver. This is another low risk opportunity to grow the production profile in a camp we know well.
Speaker Change: So like at Detour, we're taking the next steps to Derisk and optimize the project, we're advancing the site preparation to excavate the exploration ramp and sink the shaft that was approved in July.
Speaker Change: And we're making very good progress here the road access the main earthworks for the site and some temporary infrastructure were completed the power line coming to the site was energized the shaft collar was excavated the Galloway was installed and the foundations that it had framework completed there's a lot of good work being done by the team there.
Speaker Change: Thinking of the exploration shaft and the ramp development is expected to commence in the fourth quarter of 2025.
Speaker Change: Both detailer underground and upper Beaver are good projects with strong risk adjusted returns and as I said before are drivers of future growth for Ontario platform and so we will continue advancing these projects throughout 2025.
Speaker Change: With that I'll pass it over to <unk>, who will discuss our exploration program and some positive is up.
Speaker Change: Thank you Natasha and good morning, everybody.
Speaker Change: In the next couple of slides I would like to talk about 14.
Speaker Change: One we have been successful over the year since the merger at replacing production and growing our mineral reserves and mineral resources base to Arctic as they evolve since the initial acquisition in 2014 from being the largest open pit two are arguably one of the largest underground deposit.
Speaker Change: That continued to grow and as the potential with a satellite deposit that Dominik mentioned described previously to get to our vision of 1 million ounces of gold a year for decades to come three hour detour that was brought into the merger by calculate following its acquisition in 2020 as the potential to be one.
Speaker Change: There's a role for decades also with the combined open pit and underground that while the deposit remains wide open at depth.
Speaker Change: And for our Ob where are we.
Speaker Change: We continue to see excellent exploration results as the potential to replace Meadowbank MRO in the near future as highlighted by our.
Speaker Change: Very nice discovery at about seven.
Speaker Change: So to start on page 12.
Speaker Change: The mineral reserve and mineral resources profile show a growth trend over the last four year, demonstrating our ability to replace depletion from production from our combined.
Speaker Change: Combination of exploration success at our operating asset and progress made at some key value driver project that we expect to integrate in our development plan overtime.
Speaker Change: And that using one of the most conservative gold price assumption in the industry at $14 50, which is about 50% of the spot gold price.
Speaker Change: Talking globally about our ambitious exploration program I would like to take this opportunity to come in the exploration team and our multiple drill drill service provider that deliver more than $1 2 million mirror of core and diamond drilling in 2024, while achieving its best <unk> performance ever.
Speaker Change: And I will also like to thank our drilling excellence team and our drill service provider that have helped our site make meaningful progress at implementing mechanize and autonomous feature that meets diamond drill safer more productive and therefore more cost efficient.
Speaker Change: On slide 13 in market.
Speaker Change: Now more than 10 year. After the initial acquisition of the project, we continue to see tremendous potential.
Speaker Change: I would like to bring your attention to the chart on the right inside of the slide that shows the evolution of products and mineral reserve and mineral resources since the acquisition in 2014.
Speaker Change: What we like to call internally, our what we bought what we got chart.
Speaker Change: That show was our successful our exploration has been over a year, making discovery and growing over time, while we were mining the open pit.
Speaker Change: I would like to take this opportunity to thank and congratulate the exploration team that made the discovery.
Speaker Change: That will be recognized at the upcoming <unk> event in Toronto in March with the prestigious building. This award for the discovery of the year with the east will be deposit.
Speaker Change: In 2024, as Dominik mentioned more than 25 rig we're on sites. Some in filling the deposit from increasing number of underground exploration platform that became available with the underground mine development and some from serve face testing the lateral extension to the east to the west.
Speaker Change: And regionally in total completing north of 200000 meter of drilling.
Speaker Change: Leading once again to our growth in mineral reserve and mineral resources in the underground mine.
Speaker Change: Moving to slide 14, a detour where to surface infrastructure for advanced Operation Project announced last June when are being prepared for the ramp development. We started in 2025 the aggressive surface exploration program continue in 2024 with north of 220000 meter of drilling.
Speaker Change: <unk> completed.
Speaker Change: Returning strong result, both in the saddle with spirit and western extension of the ore body.
Speaker Change: The resort the results have led to a meaningful addition of indicated and inferred mineral resources to the west of the open pit as we can see on the long section.
Speaker Change: When looking at the progress over the last five years on the charts on the right hand side.
Speaker Change: It shows out of the budget has grown over time and still remain open to grow at depth to the west.
Speaker Change: And finally on slide 15, I Tobey.
Speaker Change: Total of more than 118000 meters of drilling was completed in 2020 for focusing on the newly discovered <unk> zone in the <unk> deposit area.
Speaker Change: Infill drilling confirmed the grade and continuing to have the core portion of the deposit leading to win initial.
Speaker Change: The declaration of indicated mineral resources exceeding 900000 ounces at six six gram per ton diluted.
Speaker Change: Plus an additional 800000 ounces in inferred mineral resources and still remain open to grow that rally.
Speaker Change: That significantly increase the total mineral resources available in the Madrid deposit area that will be used to update our potential project development scenario for 2020.
Speaker Change: In 2025% to focus will remain to grow the metro deposit area as we see at our opportunity to make additional discovery like we did in the batch of an area along the 80 kilometer greenstone belt.
Omar: And on that I would like to return the microphone to Omar for some closing remarks.
Omar: Thank you.
Omar: We are going to stick to the strategy that has worked for us for decades.
Omar: And we're going to focus on low risk high quality jurisdictions that means jurisdictions that have the geologic potential for multiple mines over multiple decades in the political stability to actually operate multiple mines for multiple decades and that regional focus transcend transcends into.
Omar: And manageable business, good cost control low turnover and a number of things.
Omar: We want to be the highest quality business, we possibly can be.
Omar: That means we set very high standards.
Omar: For ourselves for.
Omar: <unk> for the environment and for our behavior in the communities that we're in.
Omar: We believe in disciplined capital deployment and to US discipline is 90% about knowledge have you done your homework before you spend your owner's money and we do that.
We believe we are uniquely positioned we're uniquely positioned in some of the best regions in the world.
Omar: We've built a competitive advantage in the areas that we operate.
Omar: And we are uniquely positioned.
Omar: And none of it.
Omar: And we also focus on strong financials.
Omar: Per share metrics are what drive us return on capital, which is a fancy word for return on.
Omar: Equity and our shareholders' money that is something that we continue to focus on we've paid a dividend for 41 consecutive years and we look forward to increasing.
Omar: Returns to shareholders.
Omar: Forward.
I am going to take a couple of minutes go a little bit off script to talk about.
Two items two questions that are coming up and I want to address them head on.
Omar: So one question.
Omar: His agnico priced to perfection.
Omar: Certainly our share price has performed well over the past year.
Omar: But let's face it gold prices are up a $1000 an ounce and as the gold prices went up $1000 an ounce, we controlled our costs, which means we expanded margins and we actually delivered substantially increased margins to our owners. So of course the share price went up.
Omar: It should have gone up and it did go up so the real question is is there room for the share price to go up even more.
Omar: Looking forward frankly, I'm not allowed to talk about future earnings. However, we.
Omar: We've given guidance on production and you know you all know what the spot prices.
Omar: At current spot prices and are and given our production guidance.
Omar: You can do the math it suggests annual revenue of about $10 billion.
Omar: Which means that agnico Eagle is trading at around five times revenue.
Omar: That's not a crazy multiple in fact, one could argue that's a low multiple both on the gold and in other industries.
Of course, the relevance of a revenue multiple depends on margins.
Omar: While our current spot prices in our $940 guidance that implies about $2000 an ounce.
Omar: So thats pretty good margin.
Omar: At the same time, we see potential growth in ounces per share we're buying back stock we're strengthening the balance sheet. So have we performed well yet has the market rewarded us and our owners for that yes.
Omar: Are we priced to perfection no I think we're priced for what we have delivered and we have a lot of room going forward to continue to grow and to add value.
Omar: The second question and then I'll stop.
Omar: As well look agnico and others. They are operating in safe jurisdictions, they perform better.
Omar: Is this the time to shift from these safe jurisdictions to riskier jurisdictions and Thats, a fair question and one that investors should always consider and always ask.
Omar: But let me ask you this do.
Omar: You think the world is getting less risky or more risky.
Omar: Do you think we're moving towards less trade barriers or more trade barriers.
Do you think the world is moving to less nationalism or.
Speaker Change: We're more nationalism and then finally and this is important.
Speaker Change: At roughly $2000 between cash costs and spot gold do you think that governments around the world are going to pay less attention to these margins.
Speaker Change: Or more attention to these margins.
Speaker Change: So I would argue that agnico Eagle has done well because we've delivered to our shareholders.
Speaker Change: And I would argue that certainly at these prices, we're going to do even better in.
And I would also argue and of course I'm speaking my own book.
Speaker Change: Personally.
Speaker Change: I'd like to stay in safe jurisdictions, and with that let's open it up to questions.
Speaker Change: Thank you ladies and gentlemen, we will now begin the question and answer session should you have a question. Please press star followed by the one on your Touchtone phone you will hear from that you had have been raised should you wish to decline from the polling process. Please press star followed by the Q.
Speaker Change: We are using a speaker phone please lift the handset before pressing any key one moment. Please for your first question.
Speaker Change: Your first question comes from Anita Soni with CIBC World markets. Your line is now open.
Anita Soni: Hi, Good morning, Amar, Jamie in Dominica, Natasha and congratulations on a really solid year.
Speaker Change: Limit My my my one question too.
Speaker Change: And when you expect that like what's the timeline for delivery and when do you expect to see that starting.
Speaker Change: And give us an idea of where that where that was brought into that.
Speaker Change: Okay.
Speaker Change: Good morning, <unk> speaking so this year. This year focus is really to free the scope of the project as now we're including the patch server and resources, we still need to reshuffle and to look to the mine plan.
Speaker Change: And to be at 40% engineering done by the end of the year. It is the same approach with you that media Dean if you recall, where before announcing a project, especially in Nunavut, we need to have to derisk. It and we're going to be there early next year. So in the first half of 2026, we're expecting to give.
Speaker Change: More detail about the project.
Speaker Change: Okay, how long would it take to them.
Speaker Change: When do you is it near the end of the decade that you think this could start up or is this more of an early early next decade.
Speaker Change: Is more early next decade.
Speaker Change: I'll leave it there and ticket.
Speaker Change: Thank you.
Speaker Change: Sorry, we didn't catch that neither of them.
Speaker Change: Oh, sorry, I understood I'll leave it there and let pass it onto the next question. Thanks.
Peter: Thank you Peter.
Speaker Change: Your next question comes from Josh Wolfson with RBC capital markets. Your line is now open.
Josh Wolfson: Thanks very much.
A question first on the capital allocation.
Josh Wolfson: The free cash flow continues to be very strong here, we're projecting the company to be at a net cash position in the very near future.
Josh Wolfson: The dividend, which kept flat the buyback it is light.
Josh Wolfson: The company is pretty much full tilt on now on the project advancement. So how should we think about excess cash being allocated going forward.
Jamie Porter: Yes, Thanks, Josh it's it's Jamie here. So yes, I mean, if you look back at 2024 and I referenced it in my comments, we've returned about 43% of our free cash flow.
Jamie Porter: To shareholders directly through the dividend and through the share buyback. So the gold price has risen pretty dramatically here in the first part of the year like our average realized price in Q4 was $26 60, and we're up around 2900 now so.
Jamie Porter: For the time being obviously, we'll continue with the dividend.
Jamie Porter: At the current rate of about $800 million annually and will be opportunistic in terms of share repurchases, but even with the.
Jamie Porter: The current gold price.
Jamie Porter: And our projected free cash flow will still be returning about a third of that cash flow directly to shareholders.
Jamie Porter: The majority of the rest is going to go to improving the balance sheet and getting to that net cash position as you suggested but Josh as as we've talked about it at these levels.
Jamie Porter: And Jamie and the team and through the work the operations.
Jamie Porter: Our balance sheet is very strong.
Jamie Porter: And.
Jamie Porter: As Jamie said as we're generating more cash, which we will at these levels.
Jamie Porter: We are going to be returning.
Jamie Porter: No.
More money to our shareholders.
Jamie Porter: Okay.
Jamie Porter: And then my next question is just.
Jamie Porter: Conceptually sort of looking at the different projects in the context of the three year guide.
Jamie Porter: The outlook is for stable production, which is commendable for some of the large companies out there.
Jamie Porter: Is there a point in time at which the company is looking to project that gross or net volume growth or.
Jamie Porter: As an aside is that even.
Speaker Change: And objective for the team. Thank you.
Speaker Change: Oh, that's a good question.
Speaker Change: We're giving three year guidance, so we don't give beyond that but but I'll answer at a broad level.
Speaker Change: So first and foremost we're genuinely looking to make money per share. So we.
Speaker Change: We are.
Speaker Change: Only interested in growing.
Speaker Change: Growth creates value for our shareholders that said, we see a lot of that.
Speaker Change: We are probably a lot more conservative in our long term projections.
Speaker Change: But I think and you know our company as well as anybody with the projects that we have.
Speaker Change: We anticipate continued growth absolutely and per share I mean.
Speaker Change: No.
Speaker Change: Again.
Speaker Change: Subject to a volatile world Natasha talked about a 50% increase in production in Ontario.
Dominic: Dominic talked about <unk> being the next platform.
Dominic: Several hundred thousand ounces a year.
Dominic: And none of it.
Dominic: Melodic potentially getting to over 1 million ounces a year.
Josh Wolfson: We turn Josh to beat our chests not very loudly.
Dominic: And we're always.
Dominic: Careful to not over promise.
Dominic: But I was sincere when I said I think we've got the best pipeline I've ever seen in the business in 25 years and remember.
Dominic: Spent a lot of that is a financial guy looking at one.
Dominic: Dollars and cents so.
Dominic: These are profitable projects, we're looking at.
Dominic: Thank you.
Speaker Change: Your next question comes from Daniel Major with UBS. Your line is now open.
Daniel Major: Hi, Thanks can you hear me okay.
Speaker Change: Yes, we can.
Speaker Change: Great. Thanks.
Daniel Major: Yes my question.
Daniel Major: Just looking at the pipeline and the profile beyond.
Daniel Major: Beyond your three year guidance.
Daniel Major: As we move towards the towards the end of the decade.
Just a little bit of a gap before the main projects come in in the in the early 2013.
Can you give us an.
Speaker Change: An update on Meadowbank, where you see life of mine is the scope to add.
Speaker Change: And the extension that before they come through.
Speaker Change: Yes, Danielle generally speaking the teams are working on different scenarios and the division order plan is to extend to operate from underground. So at this stage, we know that the pit are depleting into <unk> 28.
Speaker Change: So the objective is going to be to keep it running just with underground that needs to keep a good cost for example to run the neo probably on three weeks in three weeks out because it is a big meal. So we're doing different tradeoffs.
Speaker Change: That will not be the cheapest answers, but with the current gold price environment, that's going to generate cash.
Speaker Change: We could end up with 150000 ounces per year after 2028 up to 20% to five so that could be a good a good thing.
Speaker Change: When you think about that we talk about two platform at 1 million ounces, but Nunavut could also if we call. It a platform be in that range with media Dean and $3 5400, let's say whole being the 400 and if you add.
Speaker Change: Meadowbank at 150, we're getting 202 million ounces in Canada.
Speaker Change: Okay. Thanks.
Speaker Change: If I could ask.
Nicholas: One more if that's okay. Just a quick update on the license progression that Nicholas any new information.
Speaker Change: Hi, Daniel.
Nicholas: Speaking so we did submit the EMEA.
Nicholas: And the <unk>, which is the environmental impact assessment and the change of land use permit in Q1 last year.
Nicholas: We are progressing the regulators are looking at.
Nicholas: The documents asking questions so far.
Nicholas: Nothing more to be quite honest in terms of the.
Nicholas: The proposed constitutional changes as it relates to the open pit mining.
Nicholas: <unk>.
Nicholas: It's still unclear on that and whether it's going to be approved are passed into law.
Nicholas: Or whether it has any impact on the San Nicolas project.
Nicholas: Very good thanks I'll.
Speaker Change: I'll, let someone else okay. Thanks Hello.
Speaker Change: Your next question comes from Lawson Winder with Bank of America Securities. Your line is now open.
Speaker Change: Matt. Thank you very much operator, good morning, Omar Thanks for the presentation today wanted to ask about actually some of the comments that you made.
Speaker Change: You spoke to the additional 10 to 15000 tons per day of capacity at <unk> and you mentioned specifically.
Speaker Change: Drill that Odyssey.
Speaker Change: And whilst the Mac and I guess.
Speaker Change: I would ask rather than stay rather than just sort of staying tune, maybe you could give us a hint of what youre thinking now is there a thought that there could ultimately be the potential for a third shop that Odyssey and then with Wassa Mag.
Speaker Change: Are there early indications that the underground processing rate could actually be far in excess of 3000 tonnes per day.
Speaker Change: Some point.
Nick: Andrew Robertson, the Nick I am going to take the question.
Nick: So currently let's start maybe with the mill throughput available.
Speaker Change: <unk> phase one is 20000 ton per day or do you see second half would be between eight and 10000 ton per day, we're sort of working on that <unk> is a 15000 ton per day and <unk> is 3000 ton per day, which bring up to a 45.
Nick: With.
Nick: All of them together the current capacities at $60. So there is still a 10 to 15000 ton per day available.
Nick: But we don't have a plan yet on that.
Nick: It might be.
Nick: Original discovery our own.
Speaker Change: Irobot Arctic it could be more tonnes coming from <unk>, if we're able to expand that pit it could be third shaft at OTC, but all of those answer we don't have the we don't have it right now so but it's still I think the team did a very good work to plan and now we're kind of where do we have some.
Speaker Change: Homework to do to bring it to real life, but to have a 1 million ounces.
Speaker Change: Are there still some potential.
Speaker Change: Okay, Sir that additional color is helpful. Thank you and then just.
Speaker Change: On Whatsapp, what what is the distance you would estimate would.
Speaker Change: It would be required to get the ore roughly from from Watson maximal undertaken you have a sense of the cost per ton in todays dollars.
Speaker Change: I don't have the costs.
Speaker Change: Really elevated but it is 100 kilometer so the plan and we're doing different trade off the plan is going to be to truck it.
Speaker Change: From what <unk> going to Canada MLR.
Two the existing road, but one thing gloss and I would add is.
Speaker Change: We are well aware of the value. If we can fill that lost $15 million. We saw the the deal that our team did with.
Speaker Change: With all three and.
Speaker Change: That's just a transaction that made a lot of sense.
Speaker Change: That asset frankly was worth more to us than it is to them because we could use the mill and the reason I referenced that is.
Speaker Change: We are.
Speaker Change: Looking at opportunities.
All the time on that lost $15 million.
Speaker Change: 15000 tons a day.
Speaker Change: Then finally, what I would say is we're both happy to have that come from one of our mines or if it makes more sense.
Speaker Change: We would we would enter into a toll milling agreement with someone else.
So youre right. There is a lot of value in that 15000 tons a day.
Speaker Change: And while Dominic is correct and that we don't have an explicit plan for that we are clearly focused on that.
Speaker Change: Okay, great. Thank you very much.
Speaker Change: Your next question comes from Mike Parkin with National Bank. Your line is now open.
Speaker Change: Got it.
Speaker Change: Slide 13.
And is it correct that you're off to the right of that land Malarchuk property lines the.
Speaker Change: 5% royalty.
Speaker Change: It doesn't exist.
Speaker Change: That's right.
Speaker Change: So in the metal price environment, we're looking at where.
Speaker Change: You had ounces on that side of the property you'd be saving of 150 Bucks an ounce.
Speaker Change: And the senior discovery cost is still probably 2025 bucks.
Speaker Change: Are your tenants is there any thought around.
Speaker Change: Discovery of ounces there.
Would almost.
Speaker Change: Savings on the royalty.
Speaker Change: Almost cover off the cost of discovery, but also with development.
Speaker Change: Or are you guys still just given.
Speaker Change: Having such tremendous success to the left.
Speaker Change: The second SaaS.
Speaker Change: I'm just trying to get a sense of like where you might put that second shaft, where you might kind of focus your drill.
Speaker Change: The drilling.
Speaker Change: On a go forward basis, but that savings on that royalty given where.
Speaker Change: Just a smidge away from $3000 an ounce.
Speaker Change: B.
Speaker Change: Got it completely cost savings in terms of getting those ounces to our production.
Speaker Change: Well there is two parts of your question.
Speaker Change: Well first of all that long section you see at 13 shows our resources, where it is and it's within the area where that royalty apply.
Speaker Change: And then most likely you see what the when Dominic describing the second half or a potential third shaft <unk> and although the tonnes that are currently known are there but from a regional.
Speaker Change: Our exploration standpoint.
Speaker Change: I don't really care about the property boundary, we look both east and west and if we can find more than we do actually drill on that part to the east Rand and Adar property in fact, the proper <unk> and <unk>.
Speaker Change: <unk>, let's say five kilometer on the right hand side of that graph and we have actually four rates amongst the 25% that dominik.
Speaker Change: Was describing that is testing that and on top of that now with the addition of <unk> III and position around <unk> you have that other land position to the north at the back of that slide that is outside of that royalty things. So.
Speaker Change: We're not limiting ourself.
Speaker Change: We're going to discover a gold where it is and after that it will be part of the decision making process in the economy to figure out the back of of the underlying royalty that may exist on the different.
Speaker Change: Part of the land package, but it's a it's an interesting comment Mike in that.
Speaker Change: Remember everybody. This this is a mine that was originally discovered 1923.
Speaker Change: 100 years ago.
Speaker Change: We are winning an award for the biggest discovery.
Speaker Change: 100 years later at the same mine, we've acquired or in the process of acquiring.
Speaker Change: Sure.
Speaker Change: Marvin another mine a few kilometers away and so you are absolutely right.
Speaker Change: There is potential.
Speaker Change: As we go to the right and.
Speaker Change: It is worth pointing out that at a 5% royalty there is an extra $150 an ounce.
Speaker Change: On that so it's a good question.
Speaker Change: He answered the right question.
Speaker Change: Part of it is look we've got 25 drills.
Speaker Change: We are drilling fast because what Dominic said, we want to get this to 1 million ounces.
Speaker Change: And we want to work as hard as we can we said a year ago. We said look it's going to take two years of drilling to know if we're going to have a second shaft and it looks like we're going to have a second shaft.
Speaker Change: He and his team are trying to balance it with what <unk> is doing.
Speaker Change: But your question is a good one because it does talk about the potential in this area.
Speaker Change: Okay I, just don't think it's going to have an interest in capital return idea.
Speaker Change: We could.
Most pretty much get those ounces for free.
Speaker Change: Other than the Opex and sustaining.
Speaker Change: I appreciate the color thanks, guys.
Speaker Change: Mike.
Speaker Change: Your next question comes from John Tumazos, with John Tumazos, very independent research. Your line is now open.
Speaker Change: Thank you for taking my question.
Speaker Change: Okay.
Speaker Change: <unk> been it looks like for the 165 7 million ounce reserve.
Speaker Change: $86 an ounce.
Speaker Change: And for the <unk>.
Speaker Change: $2 6 million ounce reserve and resource you pay us $55 an ounce.
Speaker Change: There is a technical study was October 22.
Speaker Change: Should we expect in your next reserve report to incorporate their $1 6 million ounces.
Speaker Change: Or will it be more because there's two or three years more data.
Speaker Change: <unk> got enough money to drill a deeper hole.
Speaker Change: Or do you need to wait two or three years to evaluate it.
Jon: Hi, Jon <unk> speaking.
Speaker Change: You describe it right there is a fair bit of drilling there is enough drilling.
Speaker Change: In depth in the bps, what we want to pay attention to is.
Speaker Change: What part of it that we think that could reasonably be billed.
Speaker Change: When considering wetland other challenge. So we are working on our plan and we can anticipate that a good proportion.
Speaker Change: <unk>.
Speaker Change: That one six could become a reserve in the near term.
Speaker Change: With the existing database.
Speaker Change: Thank you.
Speaker Change: <unk>.
Speaker Change: What is your human resources strategy.
Speaker Change: To have five or 10 more.
Speaker Change: <unk> robot.
Speaker Change: So that 125 rigs are running in the 200000.
Speaker Change: Meters are drilled we get the results.
Speaker Change: Sure I repeat.
Speaker Change: Do you need to take five or view on mosques 20 year olds and bring them to Canada.
John Tumazos: John that is.
John Tumazos: I'm going to say is it both a humorous and a good question.
John Tumazos: We.
John Tumazos: We have in our industry.
John Tumazos: A shortage of <unk>.
John Tumazos: Highly qualified engineers geologists.
Speaker Change: Operators. Good news is we have a lot of accountants.
John Tumazos: But.
John Tumazos: But it's a good it's a good question.
John Tumazos: Everything we do is a function of.
John Tumazos: Capital.
John Tumazos: Resource allocation and human resource allocation.
John Tumazos: But I acknowledge that.
John Tumazos: Youre right Youre asking an insightful question, which is look would you be able to get to the reserves and move things forward faster. If you could do the studies faster I think we have a very strong team I think we have a lot of people but.
John Tumazos: Yes.
John Tumazos: The resource of high quality <unk>.
John Tumazos: Qualified specialist people is a challenge for us and for everyone else, but that said I do believe are the fact that we produced more gold in Canada than everyone else combined more than 50% of total Canadian gold production. We've been in the regions. We have been for decades, we do tend to get high quality piece.
John Tumazos: <unk>.
John Tumazos: Sometimes relative in competition with our peers.
I don't know if any of Dominic did you want to add to that.
Speaker Change: That's a good question, John and we're working on that and maybe one thing on that.
One.
Speaker Change: What what where we succeeded in the past is working with students and by the way I was one of them 25 years ago, starting as a student.
Speaker Change: I see Jason Corona around the table here, but one thing we're doing now we're getting back to having more students first the employees.
Speaker Change: Kids.
Speaker Change: Which is a very good way to introduce them to the mining, but also at university, bringing more of those co op students. So it helps us to do good selection is also giving them what is the pace of working with agnico.
We have a good name and their students are I need to say now are willing and let's say agnico is on the top of their choice. When they are looking to work and also the fact that we have different mines.
Speaker Change: Like fly in fly out or <unk>. It gives us more opportunities for them and this is something really we work hard.
Speaker Change: If I can ask one last question.
Speaker Change: I'm worried that someone might look at the $459 million.
Speaker Change: Spent for capital and expense exploration last year or $5 25 this year.
And then sue the reserves go up by half a million ounces.
Speaker Change: Thanks.
Speaker Change: The cost of $1000 an ounce.
Speaker Change: Or is it the 25 rigs or the 200000 meters for a bunch of.
Speaker Change: Dry holes bearing results.
Speaker Change: So.
Speaker Change: Could you sort of explain why that's not the case.
Speaker Change: And thanks for the question drawn.
Speaker Change: I did some mapped.
Speaker Change: Lately.
Speaker Change: If you look at the 2024, what we win two drilling is $270 million and.
Speaker Change: And if you look at the distribution of that drilling from let's say what is going to fill in what is going to making new discovery.
Speaker Change: It boils down to the fact that we spent last year $110 million on conversion, which is about $25 an ounces do move on <unk> from resources to reserves.
Speaker Change: And the other $160 million when to adding <unk>.
Speaker Change: Research from nothing to resources at a cost of also $25 per ounces.
Speaker Change: It's roughly to make a discovery from scratch to bring them to infer it's roughly $25 an ounces and to move them from resources to reserve and another $25 per ounces ballpark for the overall $270 million of drilling we've done in 2024.
Speaker Change: Ill.
Speaker Change: John again, good question, so <unk> talked about how much went directly into drilling.
Speaker Change: Of that $459 million, roughly roughly $200 million.
Speaker Change: It was associated with something called capitalized exploration and that really is.
Speaker Change: Primarily.
Speaker Change: Due to our underground upper Beaver the kinds of things, where you have to build some infrastructure to be able to do more exploration to go underground to get to to build drill platforms to take bulk samples.
Speaker Change: So part of that number is actual infrastructure to be able to do exploration what I would say and this is important is every time, we do that we.
Speaker Change: We do that with a view that whatever infrastructure we build.
Speaker Change: Is the right type of infrastructure that we can then later use.
Speaker Change: We built an operating mine so it's not wasted money.
So both of those.
Speaker Change: Your next question comes from Kenya.
Nick: Nick <unk> with Scotiabank. Your line is now open.
Speaker Change: Great. Thank you good luck. Thank you Rick.
Nick: <unk>.
Speaker Change: The first one is for Jamie on the capital return Jamie.
Speaker Change: From my understanding is it safe to assume that we will be in Q1 to pay off $100 million.
Speaker Change: Sure.
Speaker Change: And others.
Speaker Change: Okay.
Speaker Change: Okay.
Speaker Change: Thanks, Brian.
Speaker Change: Thereafter.
Speaker Change: Thank you.
Speaker Change: Okay.
Dan: Hi, Dan Yes, yes, no. That's a good question and you're absolutely right. We do have a catch up payment of about $400 million in the first quarter that we will be making I don't think that will preclude us though from being active on the normal course issuer bid.
Speaker Change: If we see the opportunity and.
Speaker Change: Wanted to be active on that and we'll continue obviously to pay the dividend of <unk> 40, a share this quarter. So we have the balance sheet strength to.
Speaker Change: To increase shareholder returns if we wanted to in Q1. Despite the fact that we have that big tax payment coming up.
Speaker Change: And then once that is when you think about shareholder return.
Speaker Change: Our preference is always going to renew.
Speaker Change: Share buyback program.
Speaker Change: They have a preference for dividends or share buybacks.
Speaker Change: Hi.
Speaker Change: Yes, we will certainly be.
Speaker Change: Evaluating that through throughout the year it depends on a number of factors primarily of course, the gold price, but also our relative share price. So I think there is an increased appetite last year, we repurchased $120 million in shares that's more than <unk> ever done in.
Speaker Change: In a year previously and.
Speaker Change: At these gold prices, there's there's room for that to increase further certainly.
Speaker Change: And I'm sorry, David just about the last question on the capital return so how should I be thank you.
Speaker Change: That's great.
Speaker Change: In terms of that minimum cash balance.
Speaker Change: On your balance sheet.
Speaker Change: In terms of a minimum cash balance so yeah. We ended 2000 24920 $6 million.
Speaker Change: I'd say again at current gold prices, our current financial situation, we'd like to keep our cash balance.
Speaker Change: Around one.
Speaker Change: $1 billion.
Could grow as as cash flow improves this year to up to $1 billion net cash position.
Speaker Change: Before we'd be looking seriously at that.
Speaker Change: More dramatic increases to shareholder returns and the one thing I would say tenure and you know us well enough.
Speaker Change: Our owners' money.
Speaker Change: It's not our money, it's our owners' money and we will only spend the cash generated if we have a high quality investment that generates.
Speaker Change: A good risk adjusted return.
Speaker Change: I say that because.
Speaker Change: Sometimes in our industry.
Speaker Change: People get more cash and they go nuts with it we're not going to do that where we are going to continue to be committed to disciplined capital allocation and.
Speaker Change: At these prices increased returns to our shareholders.
Speaker Change: I appreciate it.
I was wondering.
Speaker Change: Looking at your investment in the business. Thank you.
Speaker Change: Obviously take care of the $90 million of Gap Inc.
Speaker Change: Alright.
Speaker Change: Now I'll direct.
Speaker Change: Obviously, I understand you're not going to count.
Speaker Change: And the current music.
Speaker Change: You touched the dividend do tend to be.
Speaker Change: Accompany that.
Speaker Change: Favorable dividend because you think you can pay us from Jon.
John Anderson: John Anderson.
Speaker Change: Thanks.
Speaker Change: Youre welcome.
Speaker Change: It's all good all good questions.
Speaker Change: And just Michael and my second question actually have scale with Ya com.
Speaker Change: I appreciate the gold price is going higher and this comp payments.
Speaker Change: We want to see these margins that come through.
Speaker Change: Good day all.
Speaker Change: <unk> approach.
Speaker Change: Yes.
Speaker Change: Forecaster.
Speaker Change: Thank you for that.
Speaker Change: Is that one of the things that.
Speaker Change: You highlighted.
Speaker Change: Okay.
Speaker Change: And then of your car.
Speaker Change: That are insulated from.
Speaker Change: Hi, Greg.
But the second derivative is obviously, yes.
So I just wanted to review with you.
Speaker Change: What percentage of your own.
Speaker Change: Overall U S dollar denominated I thought about 10% to 15% I just wanted to make sure aiman.
Speaker Change: On that.
Speaker Change: Yes, Tanya that's that's absolutely right about 10% to 15% are U S. Dollar denominated and if you look at our cost guidance for 2025, we use the Canadian dollar foreign exchange assumption of $1 38.
Speaker Change: You compare that to a realized foreign exchange.
Speaker Change: Right in 2024 of 137, so there's actually not not a big Delta there.
Speaker Change: A lot of the frankly.
Speaker Change: Frankly, we did better relative to an inflation on our cost guidance because of some of the continuous improvement initiatives initiatives and efficiencies we've realized at the sites.
Speaker Change: Yes, I saw that so you've got a little bit.
Speaker Change: This tailwind based on where we are today.
Speaker Change: But can I just ask.
Speaker Change: Did not see it in the release.
Speaker Change: Both price did you use.
Speaker Change: And that was about.
Speaker Change: On royalties.
Speaker Change: Just wondering I need the full price.
Speaker Change: Got it.
Yes. So we are our base case budget, we use that $2500 gold price. So thats inherent in the royalty expense that factors into our cash cost, but that sensitivity is exactly right every $100 move in the gold price changes our royalty expense by about $3 an ounce.
Speaker Change: Okay, and then my last question, sorry, Amit cockpit.
Speaker Change: With the App, just don't know where things go but what assumptions did you use.
Speaker Change: In 2025 as inflation.
Speaker Change: Right.
Speaker Change: So cost inflation the rate of inflation that we saw coming into 2025 was about 5% and again, our cash cost at all in sustaining cost guidance was up three 4%, respectively with respect to tariffs and you alluded to it about two thirds of our costs, we don't expect.
Speaker Change: <unk> to be impacted.
Speaker Change: Almost half of our cost structure is labor and contractors, another 10% to 15% as energy power and then another 45% as royalties so about two thirds of our costs.
Speaker Change: We think wood.
Speaker Change: Would not be impacted the other third could potentially be impacted and or some portion of it some portion of the other third exactly but we'd have to evaluate exactly what what tariffs are counter retaliatory tariffs.
Speaker Change: Our imposed before we can come up with an exact determination and tenure youre right.
Speaker Change: There is a derivative of that which is the FX and.
Speaker Change: And so to the extent.
Speaker Change: And this is up to anybody to figure out but.
Speaker Change: Tariffs are higher probably the Canadian dollar will go weaker and help offset some of that but thats.
Speaker Change: Now Thats a calculus I don't think anybody can can work out with any accuracy at this point no I agree.
Speaker Change: They have as much information.
Speaker Change: Adam.
Speaker Change: Amit Act.
Speaker Change: Jamie.
Speaker Change: 2025 guidance.
Speaker Change: Hi.
Speaker Change: Racing.
Speaker Change: That's correct.
Speaker Change: Okay.
Speaker Change: I appreciate that and I know theres, a lot of moving alright happening with <unk>.
Speaker Change: On it having basic information on your comp.
Speaker Change: Yes.
Speaker Change: Yes.
Speaker Change: Thank you for taking my question.
Speaker Change: Thank you.
Speaker Change: There are no further questions at this time I will now turn the call over to Omar for closing remarks.
Omar: Well I just wanted to say to everybody. Thank you.
Speaker Change: To our team for all the work you've done thank you for keeping our people safe.
Speaker Change: Always like to say, that's the most important thing and to everyone on the call. Thank you for taking.
Time out of a Friday or a long weekend and have a nice weekend. Thank you.
Speaker Change: Ladies and gentlemen, this concludes your conference call for today, we thank you for participating and ask that you. Please disconnect your lines.
Speaker Change: Yes.
Speaker Change: Sure.