Q4 2024 Alamos Gold Inc Earnings Call
Speaker Change: Thank you operator, and thanks to everyone for attending Alamos as fourth quarter 2024 Conference call. In addition to myself we have on the line today, John Mccluskey, President and Chief Executive Officer, Greg Fischer, Chief Financial Officer, Luke Chemo, Chief operating Officer, and Scott Parsons.
Speaker Change: Vice president of exploration.
Speaker Change: We will be referring to a presentation. During the conference call that is available through the webcast and on our website I would also like to remind everyone that our presentation will be followed by a Q&A session.
Speaker Change: As we will be making forward looking statements during the call. Please refer to the cautionary notes included in the presentation news release and MD&A as well as the risk factors set out in our annual information form.
John: Technical information in this presentation has been reviewed and approved by Chris <unk>, Our senior Vice President of technical services and a qualified person also please bear in mind that all the dollar amounts mentioned in this conference call are in U S dollars unless otherwise noted now John will provide you with an overview of the quarter.
Speaker Change: Thank you Scott.
Speaker Change: 2024 was a year of accomplishments travels we.
Speaker Change: We acquired the <unk> mine adjacent to our high grade Island gold operation.
Speaker Change: Key step towards creating one of Canada's largest and lowest cost gold mines.
Speaker Change: We expanded into go back through the acquisition of a highly prospective to kick a big project.
Speaker Change: And we continued advancing our high return self funded organic growth initiatives.
Speaker Change: Almost has also had a record operational and financial year, including record revenue.
Speaker Change: Cash flow from operations and free cash flow.
Production increased 7% to 567000 ounces.
Speaker Change: Meeting full year guidance, which was increased subsequent to the <unk> acquisition.
Speaker Change: We also set a new record for annual production for the second consecutive year.
Speaker Change: Our costs were also in line with guidance and combined with a robust gold price, we generated a record free cash flow a record free cash flow of 272 million.
Speaker Change: This strong financial performance was net of funding for the phase III expansion and a substantial exploration program.
Speaker Change: With ongoing free cash flow $327 million in cash and total liquidity of over 800 million, we remain well positioned to internally fund one of the best growth profiles in the sector.
Speaker Change: Turning to slide four.
Speaker Change: In January we released our three year guidance outlining 7% production growth in 2025 to approximately 605000 ounces. This production growth is expected to continue into 2026 and to approximately 700000 ounces into 2027.
Speaker Change: This represents 24% production growth over the next three years with all in sustaining costs expected to decrease 8% over the same timeframe driven by low cost growth and the completion of phase III expansion at island gold.
Speaker Change: Lynn Lake is another key part of our growth plan, having announced a construction decision last month.
Speaker Change: With development activities ramping up this quarter, we expect initial production in the first half of 2028.
Speaker Change: The completion of the Lynn Lake project is expected to drive annual production to approximately 900000 ounces per year with a further decrease in costs longer term, we see excellent potential to expand the island Gold district further taking consolidated annual production closer to 1 million ounces.
Speaker Change: All of this growth is it Canada, it's all fully funded and it is all lower cost driving substantial free cash flow.
Speaker Change: Free cash flow growth over years to come.
Speaker Change: We made significant progress across our growth projects in 2024.
Speaker Change: At Island gold at the shaft sink is approximately 75% complete having reached a depth of 1000 meters last week. The overall phase III expansion is progressing well and remains on track for completion in the first half of 2026.
Speaker Change: In September we released the results of an internal economic study on the PDA project.
Speaker Change: Highlighting the attractive low cost high return project that will extend the mine life of the Valero is district until at least 2035.
Speaker Change: With the approval of the amended environmental permit received in January we expect to ramp up construction activities towards the middle of this year with first production expected in mid 2027.
Speaker Change: Last week, we released the results of an internal economic study on the bird timber liquid deposits.
Speaker Change: I think another low capital high return project.
Speaker Change: So I'd like deposits to the live Lake project, Bruce Hibbard liquid are expected to significantly extend the mine life of Lynn Lake.
Speaker Change: Support higher longer term rates of production and it has already strong economics.
Speaker Change: As outlined earlier this week, we had another year of tremendous exploration success with our global reserve, increasing 31% to 14 million ounces, marking the sixth consecutive year of growth.
Speaker Change: This reflected the acquisition of the Chino and the initial reserve edberg timber and linked quit.
Speaker Change: And another year of substantial high grade additions at island gold.
Speaker Change: Combined reserves and resources at island gold increased 9% to $6 7 million ounces.
Speaker Change: And at significantly higher grades.
Speaker Change: This growth will be incorporated in the island Gold District life of mine plan to be released in mid 2025.
Speaker Change: And expansion study in the fourth quarter.
Speaker Change: Given the significant increase in grades.
Speaker Change: <unk> III study was completed in since the Phase III study was completed in 2022, we expect this to support higher rates of production over the longer term.
Speaker Change: I'll now turn the call over to our CFO, Greg Fisher to review our financial performance Gregg.
Greg: Thank you John.
Greg: On to slide six we sold 141000 ounces of gold in the fourth quarter at an average realized price of $2632 per ounce.
Greg: Our revenues of $376 million.
Greg: For the full year, we sold 560000 ounces at a realized price of 2000 and $379 per ounce for record revenues of just over $1 3 billion up 32% from 2023, driven by record production and higher realized gold prices.
Greg: Fourth quarter total cash costs of $981 per ounce and all in sustaining costs of $1333 per ounce were consistent with our quarterly guidance for.
Greg: For the year total cash costs of $927 per ounce and all in sustaining costs of $1281 per ounce were both in line with annual guidance.
Greg: Operating cash flow before changes in noncash working capital.
Greg: Was $208 million in the fourth quarter or <unk> 49 per share for the full year operating cash flow before changes in noncash working capital increased 40% to a record $726 million or $1 78 per share.
Greg: Our reported net earnings were 88 million in the fourth quarter were 21 per share. This included $20 million in foreign exchange losses, and $12 million in other losses offset by other tax adjustments of <unk> 16 billion. Excluding these items. Our adjusted net earnings were $103 million or 25 cents per share our full year adjusted.
Greg: <unk> net earnings were 329 million or <unk> 81 cents per share.
Greg: Capital spending in the quarter totaled 144 million and includes $35 million of sustaining capital lease payments of $101 million of growth capital and $8 million of capitalized exploration.
Greg: For the full year total capital expenditures of $428 million, including growth capital at $280 million was in line with guidance free.
Greg: Free cash flow in the quarter totaled 54 million and a record $272 million for the full year net of all spending on the phase III plus expansion and our largest exploration program to date.
Greg: Some of US district, and young Davidson generated record mine site free cash flow of $240 million and 141 million respectively.
Greg: The strong free cash flow generation of logos was net of cash taxes of $82 million paid in 2024, we expect to pay a similar amount in 2025, given the strong profitability of a modest district.
Greg: This includes a 2024 year end tax payment of approximately $45 million due in the first quarter of 2025.
Reflecting our strong free cash flow our cash position grew 46% from the end of 2023 to end the year at 327 million. Additionally, we amended and Upsized our credit facility. This month from $500 million to $750 million, increasing our financial capacity on more attractive terms, reflecting on.
Greg: Growth is a company with solid ongoing free cash flow at current gold prices and total liquidity of over 800 million, we remain well positioned to fund our growth initiatives I will now turn the call over to our CFO Luke evolved to provide an overview of our operations.
Luke: Thank you, Greg moving to slide seven.
Luke: The Island Gold mine produced 39400 ounces in the fourth quarter and a record 155000 ounces for the year, achieving the top end of 'twenty 'twenty four guidance driven by higher grades mined.
Luke: For the full year total cash costs were in line with guidance and mine site. All in sustaining costs were slightly below the low end of guidance due to timing of sustaining capital spending.
Luke: The operation continues to self fund the phase III, plus expansion and exploration program with $12 million of free cash flow generated in 2020 for a remarkable accomplishment considering that over 260 million was spent on capital and exploration during the year.
Luke: Production from the Island Gold District is expected to increase 50% in 2025 and cost decrease driven by higher mining rates at island gold and a full year of production from a geno at higher throughput rates.
Luke: Current gold prices the island gold districts.
Luke: The Island Gold District is expected to continue generating free cash flow, while funding the phase III plus expansion and another significant exploration program in 2025.
Luke: Over to slide eight.
Luke: <unk> produced 16200 ounces in the fourth quarter, a slight decline over the previous quarter as downtime to replace the primary crusher is longer than anticipated.
Luke: Cost improved quarter over quarter and are expected to decrease further in 2025 as the operation ramps up to steady state levels.
Luke: A number of optimization initiatives were implemented within the Medina mill during the second half of 2024.
Luke: These included the replacement of the secondary crusher in the third quarter.
Luke: And the primary crusher and grizzly panel in the fourth quarter.
Luke: We saw a premature wear them, both crushers and rather than repairing them.
Luke: The time to replace them with units, we utilize at our other operations and no and no can support higher throughput rates going forward.
Luke: These improvements were completed by year end and we are seeing the benefit in the first quarter.
Luke: We expect mill throughput to increase to approximately 11200 tonnes per day by the end of this quarter at which point island gold ore will be trucked and process to the larger more cost effective Marino mill.
Luke: Given the significantly lower processing costs within the marginal mill. This is going to drive significant synergies and operating costs lower.
Luke: Moving to slide nine.
Luke: We continue to make progress on the phase III plus expansion and achieved a significant milestone in the shop sync last November reaching the first shaft station breakthrough at 840 meter level.
Luke: We are currently at the 1000 meter level and on track to be at the ultimate depth of 1373 meters in the third quarter of this year.
Luke: The installation of the penthouse steel is completed with cladding underway.
Luke: Work on the Medina haul road continues to progress with overall completion expected next month.
Luke: This will be utilized to transport ore from the island gold portal to the Merino mill.
Luke: Construction of the place paste plant is ongoing with foundation work more than 85% complete.
Luke: Over to slide 10.
Luke: As of year end, we spent and committed 72% of the total phase III plus expansion capital of $796 million and the project remains on time and within the budgeted.
Luke: And within the updated budget.
Luke: 2025 will be the final full year of spending with capital expected dropped considerably in 2026.
Luke: Over to slide 11.
Luke: Young Davidson mine produced 45700 ounces in the fourth quarter, our costs below the low end of the guidance range.
Luke: Throughput rates were back to the 8000 tonne per day level for the quarter consistent with expectations.
Luke: For the full year production totaled 174000 ounces.
Luke: Slightly below the guidance range due to temporary or lower scoop availability earlier in the year and lower grades mined.
Luke: For the full year total cash costs were within the guidance range, while mine site all in sustaining costs were slightly above the top end of the guidance range, reflecting higher sustaining capital per ounce.
Luke: Young Davidson generated record mine site free cash flow for the year of $141 million.
Luke: <unk> consecutive year, the operation has generated over $100 million and free cash flow.
Luke: With a 14 year reserve life Young Davidson is well positioned to generate similar levels of free cash flow over the long term.
Luke: Production is expected to increase to between 175000 and 190000 ounces in 2025 with cost also increasing primarily due to ongoing labor inflation in Ontario.
Luke: <unk> costs are expected to be at similar levels in both 2026 and 2027.
Luke: Over to slide 12.
Luke: A lot of district continues to exceed expectations and was a key contributor to our outperformance during the year.
Luke: Production was 38900 ounces in the fourth quarter and 205000 ounces for the full year.
Luke: 5% above the top end of guidance, reflecting the strong ongoing performance for La Yaqui Grande.
Luke: As guided cost increased in the fourth quarter, reflecting the stacking of lower grade ore from La Yaqui Grande.
Luke: Costs for the full year were at the low end of the guidance range due to strong operational performance.
This drove record mine site free cash flow of $240 million for the year.
For 2025 production from the largest district is expected to be between 130000, and 140000 ounces at similar costs to 2024.
Luke: Operation is expected to continue generating strong free cash flow, while self funding the development of P. D. A.
Luke: Over to slide 13.
We declared an initial reserve that burnt timber and linked with of over 900000 ounces and incorporated that into an internal economic study that was released last week.
Luke: The two deposits are in proximity to the Lynn Lake project and will serve as a source of additional mill feed starting in year 12.
Luke: <unk> lower grade stockpiles until later in the mine plan.
Luke: This is expected to extend the mine life of the Lynn Lake project to 27 years.
Luke: Longer term production rates by 60%.
Luke: And enhance the economics is a low capital high return satellite project.
Luke: At $2200 per ounce gold price and a Canadian exchange rate of 0.75 study showed strong after tax IRR of 54%.
And NPV of approximately $180 million.
Luke: A closer to spot prices the I R R increases to 83% and MPV closer to $300 million.
Luke: This provides additional value on top of the already robust economics, the Lynn Lake project carries on a standalone basis.
Luke: Lastly.
Luke: There is significant upside potential across the large under explored Lynn Lake Greenstone belt.
Luke: This includes a number of targets that we have already identified across the district and.
Luke: And see excellent opportunities to continue to define and develop additional satellite deposits to feed the centralized mill.
I will now turn the call over to our VP of exploration Scott Parsons.
Speaker Change: Luke moving to slide 14.
Speaker Change: We had another successful year on the exploration front across our assets.
Speaker Change: Global reserves increased 31% to 14 million ounces of gold driven by the inclusion of Marino Declaration of an initial 900000 ounce reserve it for timber in Lakewood and another year of significant growth at island gold.
Speaker Change: Overall grades decreased to 1.45 grams per ton, reflecting the addition of relatively lower grade reserves from a gino for timber at Lakewood Pars.
Speaker Change: Partially offset by the growth and significantly higher grade reserves at island gold.
Speaker Change: Excluding Marino reserves grew by 12% to $11 9 million ounces and slightly lower grades of 162 grams per tonne, reflecting ongoing exploration success.
Speaker Change: Well, well measured and indicated resources increased 50% to $6 6 million ounces with the addition of but you know being the main contributor.
Speaker Change: Excluding with Geno measured and indicated resources increased 6% to $4 7 million ounces, reflecting additions at Bern timber and language as well as an initial resource at setup alone.
Speaker Change: Global inferred resources decreased 2% to seven 1 million ounces with the addition of a Gino offset offsetting the successful conversion of resources to reserves at for timber in Lakewood.
Speaker Change: Over to slide 15.
Speaker Change: Island Gold, we had another year of exceptional exploration success.
Speaker Change: Gold reserves increased 32% to $2 3 million ounces with grades increasing 11% to 11.4 grams per tonne.
Speaker Change: This was net of depletion of 157000 ounces mined in 2024.
Speaker Change: Averaging $12 five grams per ton, reflecting the addition of even higher grade ounces.
Speaker Change: This marks the 12 consecutive year of growth.
Speaker Change: Total reserves and resources also increased 9% to $6 7 million ounces, including a 13% increase in inferred resource grades to $16 five grams per tonne.
Speaker Change: This represented the ninth consecutive year of growth with reserves and resource grades increasing substantially over that timeframe.
Speaker Change: Island Gold continues to establish itself as one of the highest grade and fastest growing deposits in the world.
Speaker Change: Since acquiring island gold in 2017, combined reserves and resources have increased over 260% with reserve grades, increasing 24% and FERC resource grades increasing 53%.
Speaker Change: Through highly effective exploration programs this growth as it occurred at attractive discovery costs, averaging $13 per ounce over the past year and five years.
Speaker Change: Over to slide 16.
Speaker Change: The increase in reserves was driven by the conversion of existing resources and the discovery of new reserves across the main structure.
Speaker Change: The biggest contributor was addition of 533000 ounces in the middle portion of Violet East within a large reserve block that contains 1.1 million ounces grading 12 nine grams per tonne.
Speaker Change: This large reserve block is located above an even larger and substantially higher grade inferred resource block in the lower portion of island East, which contains one 9 million ounces grading at 28 grams per tonne.
Speaker Change: Additional exploration drifts are established in the lower mine infrastructure, providing better access for drilling from underground the conversion of the significantly higher grade resources is expected to drive further growth higher grade reserves.
Speaker Change: This is supported by a resource conversion rate, which has averaged more than 90% across the deposit.
Speaker Change: The island gold main structures over laterally and at depth and some of the best intercepts drilled to date in the lower portion of island East and with high grade mineralization intersected below existing resources as long term pace of growth is expected to continue.
Speaker Change: Over to slide 17.
Speaker Change: I wouldn't call the pace of growth is supporting a larger and more valuable operation.
Speaker Change: By 2020 reserves and resources have doubled to $3 7 million ounces supporting the planned phase III expansion to 2000 tonnes per day.
Speaker Change: By 2022, the deposit had expanded nearly 40% to $5 1 million ounces, which was the basis for this phase III plus expansion 2400 tons a day.
Speaker Change: Since the release of the Phase III study ongoing exploration success has driven a further 31% or $1 6 million ounce increase in combined reserves and resources to totaled $6 7 million ounces.
Speaker Change: A 13% increase in reserve grades to 11.4 grams per tonne and.
And a 22% increase in inferred resource grades to $16 five grams per tonne.
Speaker Change: This growth will be incorporated into the island Gold District mine plan to be released in mid 2025, and the expansion study to be completed in the fourth quarter.
Speaker Change: Given the substantial increase in grades at island gold since the Phase III study, we expect this to support higher average annual rates of gold production over the long term.
John: With that I'll turn the call back to John.
John: Thank you Scott.
John: 'twenty 'twenty four was an exceptional year for Alamos and our outlook has never been stronger.
John: We have sector, leading growth strong ongoing free cash flow while funding this growth all underpinned by long life operations political politically stable jurisdictions.
John: That concludes our formal presentation, so I'm going to turn the call over to the operator to open it for your questions. Thank.
John: Thank you Wade.
Speaker Change: I will take questions from the telephone lines.
John: Next question please.
John: Your question at any time everything started to.
John: Please press star one at this time.
John: Jim.
John: That would be a brief pause.
That's my first question. Thank you for your patience.
Speaker Change: There are no further questions at this time. This concludes this morning's call.
Any further questions that'd been answered please feel free to contact.
Speaker Change: Mr. Scott Parsons at four.
Speaker Change: 1636899 to be two extension five.
Speaker Change: For G nine actually Karl looks like we do have a one question queued up.
Speaker Change: Yes. The first question is from Charles.
Speaker Change: From Scotiabank. Please go ahead.
Charles: Thank you.
Speaker Change: And thanks for taking my question.
Speaker Change: Congrats on another record year.
Speaker Change: Okay. So my first question Yeah, you are you able to provide.
Speaker Change: Uh huh.
Speaker Change: C G.
Speaker Change: It would be Crazy, Ireland go with them.
Speaker Change: General combination.
Speaker Change:
How much do you expect to realize in the next one yet.
Speaker Change: Yeah, Charles it's Greg here I can answer that question. So if you look back at what we had disclosed the synergies were comprised of it was both capital and operating synergies.
Speaker Change: So in 2024, and 2025, we realized about $100 million of those capital synergies and that was around.
Speaker Change: Not expanding the island mill as well as not completing the tailings lift on the island tailings facility are the rest of the synergies will be realized over the life of the mine through the operating synergies that.
Speaker Change: That will be comprised of both G&A synergies as well as a lower cost to operate them or geno mill, so that that really will ramp up starting in 2026. When we we've moved to the <unk> mill in 2025, but we also moved to a grid power and that's when we'll see that the majority of the synergies.
Speaker Change: Kick in and it will be over the next 20 years plus.
Speaker Change: Plus of the life of mine with respect to those synergies at about a 2020 or sorry added about $25 million a year.
Speaker Change: Okay. Thank you and maybe just two.
Speaker Change: Hum.
Speaker Change: On the top side of things I'm, just given where quite a few.
Speaker Change: Trading off but also how long do you think the Aqua pocketful defect cost Stockton.
Speaker Change: On cash taxes, I mean, the deferral at these gold prices is about two years. So we actually would have been cash taxable starting in 2025 are with the acquisition and the use of the pools that Marino were able to defer that.
Speaker Change: Around two years, so probably about 2027 is when we will start to pay a significant cash taxes in Canada.
Okay.
Speaker Change: I just switch gear.
Speaker Change: I mean, if you just look at the the great Young Davidson for 'twenty 'twenty four.
Speaker Change: And then guy that ultimately.
Speaker Change: I was just wondering could you comment on what's happening.
Speaker Change: We should be thinking about these going into 'twenty 10 o'clock.
Speaker Change: Yeah, Hi, it's it's a live game over here so on the grades for 2024 really over the course of the 'twenty 'twenty four periods. We've just had a slight variance in the sequence of the stopes that were being mined.
Speaker Change: The most part we stuck to the mine plan of mining all of the stopes that we expected to mine in 'twenty 'twenty four but no. There were a couple of stopes that are varied from what was the original plan had which resulted in slightly lower grade, but what I would say is based on the stopes that we did mine over the course of 'twenty 'twenty four actual results that we got are based on our reconciliation relative to the block model of the stopes out.
Speaker Change: We did my was pretty well aligned.
Speaker Change: As far as moving forward.
Speaker Change: Into 2025.
Speaker Change:
Speaker Change: You know, where we've guided to our I think our guidance is 2205 to $2 25 in.
Speaker Change: In 2025, and we expect to be within that guidance range. You know the mine sequence is pretty its pretty rigid it's a disciplined approach to the mining sequence for young Davidson.
Speaker Change: But you know what we're expecting in 2025 would be within that range, but as we continue to move forward into the subsequent years of 2026 and 2027, we would start to see some higher grades are appearing on the basis of the mine plan.
Speaker Change: Okay, and maybe just sticking with young Davidson Yeah. I mean, if you just look at the clock like it does seem to be.
Speaker Change: Inflationary pricing theory about that.
Speaker Change: Right.
Speaker Change: It's Randy.
Speaker Change: So 'twenty 'twenty four yeah.
Speaker Change: I mean, what are called dry bulk I've, yet any potential read throughs for the adar.
Speaker Change: And are you done operation.
Speaker Change: Hi, Ed It's Greg here again, I mean, if you look at what's driving the increase year over year in why these costs on a per ounce basis like the all in sustaining costs.
Speaker Change: The first driver would be inflation, so that's about 5% and we.
Speaker Change: <unk> talked about that in our guidance the second thing, which Luke just touched on was are these are the grades that we were seeing a little bit lower grades just do the sequencing and in 2025, which has an impact on cost per ounce.
Speaker Change: And then the last item would be on sustaining capital and its really just around timing are really around the underground development and the timing of fleet replacement.
Speaker Change: And rebuilt so if you step back those three components are all impacting the costs this year versus prior year. If you look at what is applicable to other Canadian operations. It would be inflation. So it would be inflation of a five 4% to 5% and that's what we included in our guidance across our our Canadian operations.
Don: Okay. Thank you Don.
Don:
Don: Once again, please finish Taiwan. If you have a question. The next question is from Steven Green from TD Securities. Please go ahead.
Steven Green: Yeah morning, everyone.
Just wanted to ask a question in general on Mexico.
Steven Green: Most of your growth is is in Canada.
Steven Green:
Steven Green: The current climate, there seems to be improving just the tone from the government.
Steven Green: Seem to be flowing and obviously I don't know if there's a long history there good team big land package.
Steven Green: Is that something you're seeing on the ground that things are improving there is that of a jurisdiction you would look to to invest even further.
John: Hi, Steven It's John speaking, we do see a positive change.
Steven Green: Change since the.
John: You know most of the.
John: The discussion the commentary you're hearing prior to the election.
We were we.
John: We were working throughout our 2024 on on obtaining the permit for the the PDA.
John: Expansion it was.
John: Frankly, a relatively straightforward permit for them to grant that.
John: A lot of us has been in production since.
John: Since 2005, we were going to be essentially working on that expansion within the area of our existing operating footprint.
John: Albeit going underground with a ramp from the side of the the main allowed us pet where we were going to be constructing the mill was going to be again within that footprint area. We were back filling.
John: The pet with the with the tailings dry stock tailings.
John: Going into a pet I mean, all of these things were very much in conformance with.
John: With the type of project that Mexico has said that it really likes I mean over and above that we're going to be producing a concentrate which we're going to ship.
John: Off site and it means we're not going to be using any cyanide in the process. So virtually all of these all of these aspects of the the PDA development plan that made it a relatively straightforward project, but it was also important for us to get this permanent had now because it would mean a fairly seamless.
John: Session from our open pit production coming from La Yaqui Grande to underground production that that changeover will take place in 2027 and order at the time that properly. So that there was no gap in production, but more or less needed. The permit at place now so we can get construction activity underway there.
John: They understood this and I think it was communicated very well by our team in Mexico, and you know given the long and a very solid track record of that operation. It's it's.
John: Our mind that's provided.
John: If terrific employment opportunities community development.
We paid a substantial amounts in in taxes over the years to the Mexican government I mean in every possible way. This has been a beneficial enterprise as a as far as the Mexican government is concerned.
John: So you know it was it stood to reason that this was a project that was very much sort of front and center given the extensive permits that are awaiting approval right now.
John: We were very.
John: Gratified of course to to get that permit.
John: Very very early in the.
John: And the administration are very early in the new year here.
John: But I do think it's indicative of.
John: Of a better tone towards the mining industry and I believe there's going to be more permits coming I think youre going to see a quite a number of companies start to benefit as the.
John: As the government accelerates its permit review and it starts granting a more and more permits along the way I really I see those signs that I really hope it's going to be the case, we're gonna be meeting with the our Mexican delegation at the PDA conference coming up in early March.
And all indications are that.
John: That is that that meeting is going to be a very positive tone and they expect to deliver.
John: A good message to the to the mining industry.
John: Okay great.
Speaker Change: Is there something or is this a jurisdiction then that you would look to go further.
John: Hey.
John: Well, we've stayed pretty focused on auto a lot of us for a long long time. Unfortunately, it's a big district, and it's given us a lot of opportunity to.
John: Develop other things I mean in addition to the main them a lot of pet we've developed five additional deposits over the 20 years, we've been operating there and there's still a lot of opportunity in front of us as we sort of transition away from our focus on sort of open pit heap leaching projects are largely binding near surface.
John: <unk> now we're going for higher grade sulfide deposits.
John: And our exploration budget is is really allocated to delineating more reserves along those lines and we're having some great success.
John: We're not really looking outside of the Bilaterals district, right now I I think that says it.
John: It'll be it'll be.
John: A prudent move on our part to just watch how things unfold over the next year and as this administration gets its footing and it starts to deliver a very clear policy messages to our to the industry with respect to the mining industry itself and and overall.
John: Foreign investment coming into Mexico, I think with everything going on in <unk>.
John: In North America, right now with respect to <unk>.
John: Eric and behavior, you know tariffs and so forth that are.
John: Are being proposed for both Canada and Mexico.
My feeling is youre going to see.
John: Stronger ties being built between Canada, and Mexico more.
John: More investment from Canada into Mexico.
John: More opportunities I think that's going to happen, but I think we're going to just watch over the next year to see how things unfold.
Speaker Change: Fair enough. Okay. Thanks, John that's all I had.
John: Thank you Steve.
Speaker Change: Once again, please press star one if you have a question.
Speaker Change: The next question is from a private investor.
Speaker Change: Please go ahead.
Speaker Change: Thank you very much for a permit me to ask a question. The question I'd like to ask concerns dividend policy given the performance of the company and the outlook for the company and the cash flows now you know a 10% annual dividend U S. Dollar seems a little understated and I just wonder.
Speaker Change: At what point, you would reconsider that.
Speaker Change: The cash dividend policy.
Speaker Change: Well, if you know we have.
Speaker Change: Extremely aggressive growth profile are underway between now and the end of the 2000 Twenty's.
Speaker Change: Essentially funding.
Speaker Change: A major expansion project at our island Gold facility, where were building a brand new mine at Lynn Lake.
Speaker Change: We are.
Speaker Change: We're now developing a new mill complex and a new underground mine.
Speaker Change: At armed <unk> project I mean this is.
Speaker Change: There's a lot of heavy lifting but the.
Speaker Change: The net result is we're going to lift our production from where we started last year at around 500000 ounces a year.
Speaker Change: We're going to lift it to close to a million ounces a year over the next five or six years.
Speaker Change: And I think our shareholders are going to be much more focused on us executing on that growth plan and fully funding it and executing on that growth plan.
Speaker Change: Now as opposed to us increasing the dividend so we're.
Speaker Change: We're not we're not thinking about increasing the dividend at this point the dividend is essentially.
Speaker Change:
Speaker Change: I would say a recognition that our of our intentions ultimately to to pay higher returns to our shareholders both through dividends and share buybacks.
Speaker Change: But for the time being our focus is very much aligned to our growth initiatives.
Speaker Change: And and don't don't expect any increase in dividends in the near future.
Speaker Change: Okay. Thank you so much.
Speaker Change: There are no further question at this time.
Speaker Change: This concludes this morning's call. If you have any further questions that you have not been answered please feel free to contact Mr. Scott Parsons at four Wednesday.
Speaker Change: Trees 69, 92 extension five four.
Speaker Change: Yeah.
Speaker Change: Thank you.
Speaker Change: <unk> has now ended please disconnect your lines at this time thank you.
Speaker Change: Sure.