Q4 2024 Wesdome Gold Mines Ltd Earnings Call
Good morning. Welcome to Wesdome Goldmines.
Conference call to discuss the company's financial and operating results for the three and twelve months and to December 31st, 2024.
Speaker Change: As a reminder, this call is being recorded. Your host for today is Trish Moran, Wesdome's Vice President of Investor Relations. Miss Moran, please go ahead.
Speaker Change: Thank you, and good morning everyone. Before we get started, I would like to point out that during today's call, we may make forward-looking statements as defined under Canadian security blocks. I ask that you view our fly presentations for cautionary language regarding forward-looking statements and the risk factor pertaining to these statements.
Speaker Change: Please note that all figures discussed on this call are inconvenient dollars unless otherwise noted. Our press release, NDNA, and financial statements are available on both PDR Plus and on our corporate website, Wesdome.com.
Speaker Change: With us on today's West Count, advanced your bath, Wesdome's president and CEO .
Speaker Change: B below, R C O O, Fernando Ragone, R T Financial Officer, Jonah Lawrence, SEP Exploration, Ross Hill, FEP, Cooper Development, and Investor Relations, and Kevin Lonergan, FEP Technical Services.
Anthea Bath: Following management's formal remarks, we will then open the call to question and now over to Anthea.
Anthea Bath: Thank you, Trish. Good morning, everyone. I'd like to begin today's call by recognising our standing efforts of the entire Weston team throughout the year. The hard work and commitment of everyone in this organisation has led to the most robust operating and financially in the company's history.
Anthea Bath: As shown on slide call, you seem to miss a good year over year reduction in both instant frequency and severity rates.
Anthea Bath: These improvements clearly demonstrate that the safety culture we've been building over the past 18 months is proving effective.
Anthea Bath: Together with this year's Safety Achievement, we broke all time company records in terms of production, revenue, revenue, even though net income, free cash flow and net cash balance.
Anthea Bath: This performance is not just a result of high goal process, it's due to strong execution of the team, bringing on a second to his mind just as gold begins to see.
Anthea Bath: We have renewed leadership across the organisation and they're doing the brilliance of bringing their teams together and aligning to the overall vision. Our success of course depends on our people and we're taking steps to ensure everyone understands their role and how they contribute to the organisation.
Anthea Bath: Compensation is a line with driving values for shareholders, and this is reflected in the behaviors and decisions that we are making.
Anthea Bath: It was a year of achievement and you didn't have to stand up here [inaudible]
Anthea Bath: We commence processing of the high-grade teenage April in mid-April. We subsequently rent the production and deliver three solid quotas of production.
Rehabilitation of the mere service 33 level was complete.
Anthea Bath: And we commence development of the Second Reminded Egress and Rapp, which will give us access to both production funds for skilled deposits and a platform for drilling yet other near-surface zone.
Mike Keene, Eagle River, Osterhead, North Denning here [inaudible]
Anthea Bath: The team exceeded both original and revised guidance and completed the first phase of the Global Resource Model Initiative.
Anthea Bath: We kicked off several continuous improvement initiatives at the Eagle River last year, and we were excited about what we've seen as this translates into better unit cuts and productivity metrics.
Anthea Bath: 2024 marked the first step in a full and more strategy at both Eagle River and Keener. The strategy's anchored are 3 key initiatives.
The Global Resource Model
Anthea Bath: Strategic Exploration, and thirdly, Optimising and Leverting, our six-cost base.
Anthea Bath: These initiatives of all the foundation of our growth strategy, ensuring we maximise the asset venue, while driving sustainable production.
14 through these in a little bit more detail
Anthea Bath: In 2024, it completes the first phase of the global resource model.
Did it hide in critical days upon drilling, swan, and batting?
Anthea Bath: The next step is to construct an unconstrained resource model which will be essential for optimizing protection at both operations.
Anthea Bath: This work is also enhancing our geological understanding, by incorporating decades of historical data into our modelling, we're understanding and updating mindsets with more comprehensive real-time models.
Got to find you opportunities in your existing working.
Anthea Bath: and the environmental top team maximising each dollar investment in an exploration.
Anthea Bath: Edgar River, Applying the Global Model, has really begun to show comments.
Anthea Bath: We have really identified near-service answers supporting increased production at lower cost and improving our ability to see opportunities across multiple mining areas. We really see these cross-trades moving in the right direction.
Anthea Bath: Secondly, a long-term success continues to allow consistent background high quality reserves and resources.
Anthea Bath: To that end, we increase the exploration budget and focus on delineation and conversion
Anthea Bath: We incorporate it to your noise co-models into a centralized view of the asset.
Anthea Bath: and we devloid cross with exploration practices such as geophysics and historical dating between interpretation.
Anthea Bath: A game is as it's already paying off, into high quality MRMOR for the year end.
Anthea Bath: So we saw a 37% increase in resources in the measure category. Relatively, proven reserves grow 34% at Eagle and 462% at Akina, which is really really important because these answers support more detailed and reliable mindsland on operations.
Anthea Bath: Despite a success, a significant portion of our land package remains under explode, presenting future upside.
Anthea Bath: Jonah will explain a bit further around how we change the geological models which will explain a little bit around the different food resource change in grade.
Anthea Bath: The third pillar of our strategy focuses on operational efficiency and cost leverage. I've got to fool the malls as both Eagle River and Keener by blending high grade all with near-service low cost material without the space in high grade 10 and not sacrificing my life.
Xenon, we are making advancements to support the strategy.
Anthea Bath: The Unlocking Multiple Mining Friends, we have proven our peanut deeds further, with extended and broad understandable skills, so we can produce in 2025, and we have graded Dupeson, so we can stop planning to mine it further.
Anthea Bath: Starting in mid 2023, there has been a major phases, a rigorous leading indicators by thank you sure.
Anthea Bath: As you can see now on slide nine our efforts to improve our safety culture started to bear fruit in 2024.
Anthea Bath: This performance is the truth of similar of the strong culture of safety we are building.
Anthea Bath: Moving to slide 10, 2024 was a record year for wisdom with 172000 ounces produced and increased 39% compared to 2023.
Anthea Bath: Eagle River represented 55% of full year 2024 production with 94 500 ounces.
Production for the year, which was driven by your particularly strong fourth quarter exceeded Eagle river's increased revised guidance and was higher over the prior year by 8%.
Anthea Bath: Delivering another solid production year is even more noteworthy when you consider that Eagle River has been in continuous production since 1996.
Anthea Bath: Average rig in 2024 also exceeded revised guidance with an average of 13 seven grams per tonne.
Anthea Bath: This outperformance was primarily driven by higher than expected grades as well as improvements in our dilution control practices.
Anthea Bath: We're seeing this strength continue in early 2025.
Anthea Bath: We improved material movement during the back half of the year and as a result in Q4 Eagle River process 652 tons per day, which is more than 60000 tonne.
Anthea Bath: This represents an increase of 10% over the fourth quarter of 2023.
Anthea Bath: Driven by improved access to additional high grade stockpile feed.
Anthea Bath: Taking advantage of mill availability.
Anthea Bath: The mill at Eagle River continues to run well for the full year the process more than 222000 tons or 600 710 tons per day on average at a recovery of 96, 8%.
Anthea Bath: We are looking at potential investments that could improve recoveries over the medium term.
Anthea Bath: All in sustaining cost per ounce at Eagle River were U S 1000.
Anthea Bath: 500 drilling 12 for the fourth quarter and 1000 101540 for the full year.
Anthea Bath: A lowering our cost is the key component of our organic growth strategy.
Anthea Bath: At Eagle river's we have commenced the first significant continuous improvement project in recent history.
Anthea Bath: The focus of this initiative is to improve site cost structure and focus on areas, where we are confident in achieving meaningful savings and productivity improvements such as <unk>.
Anthea Bath: Transitioning development to a new owner operator model a process that is underway.
Anthea Bath: Improving equipment reliability and efficiency.
Anthea Bath: Validating and optimizing our surface infrastructure to improve workforce productivity and achieving supply chain synergies with geno to increase company wide buying power on key consumables and inputs.
Anthea Bath: These initiatives together with the gradual integration of technology and automation will help create a more safe efficient and productive workforce.
Anthea Bath: We expect to start realizing the benefits of this program starting this year.
Anthea Bath: In 2024, we made investments to improve our operational flexibility by increasing drill and develop or in batteries.
Anthea Bath: Similar investment in 2025 will ensure that we also have the infrastructure in place to support our <unk> strategy.
Anthea Bath: Our adherence to our plan and reduce variability in the coming years Eagle.
Anthea Bath: Eagle River has been operating for more than 30 years.
Anthea Bath: We are focused on ensuring a continuous effort right and long future.
Anthea Bath: Turning now to <unk> on slide 11, the team has shown consistent performance since mining started in the deep zone with excellent production results to date.
Anthea Bath: We started mining and processing high grade.
Anthea Bath: Materially April delivered three consecutive quarters and ending the year with production of more than 77000 ounces of gold.
Anthea Bath: This was within the revised guidance range.
Anthea Bath: Due to the high grade nature of keynote great fluctuates from quarter to quarter, depending in the stoping sequence.
Anthea Bath: We ended the year with an average process grade up 11, two ramp is done.
Anthea Bath: While process grades for the full year, we are on the low end of the revised guidance should be noted that once we started producing from keynote the process grade during Q2 Q3 and Q4, we're in the midpoint of the original guidance range.
Anthea Bath: Ore milled in the first and the fourth quarter exceeded 62000 tonnes a first since the restart of operations at 292021 for the full year ore milled increased by 13% year over year to nearly 217000 tons.
Anthea Bath: The ramp up.
Anthea Bath: <unk> is ongoing.
Anthea Bath: Continue to refine our mining methods for optimal performance.
Anthea Bath: And have recently introduced a hybrid cut and fill approach targeting reduced debt.
Anthea Bath: And increased mining recovery.
Last year, we completed a level 190 exploration drift the newest one level at 134 is expected to be ready in Q2.
Anthea Bath: That is correctly heading to level 136, where we anticipate first stoping will take place in the fourth quarter we.
Anthea Bath: This new mining fronts will add flexibility to our mining operations in the coming years, the golden's throughout three mining fronts by the end of 2026.
Anthea Bath: I agree and one low grade.
Anthea Bath: Beyond these there is a lot of work ongoing to unlock the upper portion of our minds last.
Anthea Bath: Last year, we completed the acquisition of level three three drift and commenced development of a more than two kilometer exploration ramp from breast skill that will enter second level 23, and provide additional material movement and ventilation.
Anthea Bath: Brookdale is progressing and expected to be completed at the end of 2025.
Anthea Bath: This ramp marks an important component of <unk> strategy as it provides access the first source of supplemental or outside of <unk>.
Anthea Bath: <unk> production guidance for 2025 includes up to 10000 ounces from Chris Gayle late in the year.
Anthea Bath: We are currently set up to progress our mining in three different mining horizon in 2026.
Speaker Change: I want to thank each of our site teams tremendous work in 2024, and I look forward to working with you all to achieve another year of record performance in 2025, and now over to John <unk> for his first quarterly exploration update with them.
John: Thank you.
Speaker Change: First I would like to say that <unk> been in the seat for a couple of months, it's been a pleasure to be part of the west 19.
Speaker Change: I'm extremely excited about the potential about two mines and the large land packages.
Speaker Change: At Eagle River more than 105000 meters were drilled as part of the 2024 exploration program, which focused on the surface and underground drilling demand.
Delineation expansion of key signs close to existing infrastructure as well as identifying new targets advancing geological understanding.
Speaker Change: Some highlights for the 2024 drill program include successful extension of the resource envelope of six central down plunge of 70% with some 250 meters. Whilst also identifying parallel structure to the north now now on as the six central parallel side.
Speaker Change: The sixth Central story as significant as the global work model.
Speaker Change: Model Blake highlighted this area as a potential target for investigation.
Speaker Change: How has the reserve grade that's second only to the 300 site remains open at depth.
Speaker Change: And inspection of high grade mineralization, approximately 50 meters west of existing drilling at Falcon 311.
Speaker Change: Result highlights the potential for continuation of mineralization outside of the direct.
Speaker Change: Demonstrated the continuity of high grade mineralization in the 300 site.
Speaker Change: Enforcement Zions continued exploration and resource conversion potential.
Speaker Change: On the 300 <unk> drilling from the $12 one level achieved several objectives first it improved our understanding of the structural model.
Speaker Change: Second it tested the strike length and down plunge extension of the structure below the 1400 level and finally, it targeted to high grade plunge of the deposits.
Speaker Change: The results of the drilling across approximately 500 meters of strike length.
Speaker Change: Is it a combination of higher and lower dry cooling systems, indicating some pinch and swell structures that are developed within the highest here.
Speaker Change: Whilst these results have a short term impact on the overall inferred resource grades that people worry about it has helped us to hone in on the high grade portion of the 300 site.
Speaker Change: The delineation of the high grade portion and its continuation of mix part of the wing prices.
Speaker Change: In 2025, we have expanded the exploration program in Eagle River in terms of meters.
Scott: And Scott.
Scott: While historically eagle reverse focused primarily on infill and conversion drilling.
Scott: Greenfield and brownfield drilling will be front and center to drive expansion and discovery 2025 and going forward.
Scott: New for 2025 will be reinterpretation of the shear zone between the historic 2% six times to develop drill targets.
Scott: Regional drilling at the Birch and full things and completion of drill testing, including induced polarization normally that would generate in 2024.
Scott: We plan to complete an additional of much larger IP survey this year.
Scott: The area of further to the west of the mine diorite.
Scott: The addition of surface geochemical work soil sampling.
Scott: Provide a multi pronged approach to regional target generation.
Scott: Finally, the addition of Orange co programs at <unk>, and Magna Com will support our global resource model initiatives by helping to validate geologic models and structural information that we used in previous resource modeling.
Scott: Proving our integration of the machine magnet, Colorado forms a key part of our regional strategy.
Scott: Moving onto <unk> on slide 14 during 2020 for more than 80000 meters of drilling was focused on converting <unk> and Keane of deep sea food resources to the integrated category and subsequently into the reserve.
Some highlights of the 2024 drill program include the continued intersection of high grades over multiple weeks and community <unk>.
Scott: Including the footwall and hanging wall science.
Scott: Results to date are encouraging and the understanding of the geologic complexity of the kina deep deposit at depth.
Scott: <unk> to improve with geologic interpretation based on the drilling adjusted accordingly.
Scott: Completion of the exploration drift on the 109 level will allow us drilling to test down plunge extensions of the BC side.
Scott: This design is significant it's geologically analogous to keen a deep and therefore testing of design is a top priority for 2025.
Scott: I do this on the continuity of the deposit was confirmed and drilling provided better geological context for interpretation and planning.
Scott: Posit remains open laterally and down plunge and it's a high priority for drilling from level 33 and surface.
Scott: Yeah.
Scott: At Presque Isle drilling confirm not only the continuity of Goldman normalization and the validity of the geologic model, but also the potential for down plunge extensions towards the east.
Scott: Further drilling targeting lateral in depth extensions from the surface is planned for the coming year.
Scott: Until now drilling in Cana has been difficult due to the limited number of drill platforms underground.
Scott: Steeply dipping ore bodies.
Scott: Really our challenge for drilling.
Scott: Drilling angles and interesting angles for Keane and <unk> in particular had been challenging with.
Speaker Change: With the completion of 33 level rehabilitation and the new exploration drift. Some levels 109, 134, we look forward to more optimal drilling this year and are excited to start testing targets.
Speaker Change: Slide 15, 2020 for mineral reserve and resource update exceeded depletion and delivered a 5% increase in total contained reserve ounces.
Speaker Change: Our mineral reserves now totaled $3 6 million tonnes at an average price of $10 two.
Speaker Change: Critically we are pleased with the increased confidence levels in our resource and reserves.
Speaker Change: The focus now drilling the 2024 program was primarily on converting materials for mining and the results demonstrate this.
Speaker Change: Our proven reserves increased by 79% and our indicated resources good for planning purposes.
Speaker Change: Increased by 37% year on year.
Speaker Change: These increases will help us to optimize our mine plants and reduced variability over the short term, allowing us to increase our focus on medium to long term exploration.
Speaker Change: Our resource and reserve update demonstrates our new integrated approach, including three D modeling.
Speaker Change: We have adopted the unlisted methodology to better align with industry best practices and support an improved understanding of the structural architecture of our deposits and the controls on mineralization.
Speaker Change: At Eagle <unk> modeling and resource work is a journey.
Speaker Change: This mineral resource and mineral reserve update is appointing time.
Speaker Change: Ongoing work reviews, and domain optimization, including a sensitivity analysis on a two stage high grade low grade remaining approach are expected to lead to improved grades.
Speaker Change: The results of this work will be fading into an updated mineral resource mineral reserve models for the Eagle drive PFS.
Speaker Change: We will update the market accordingly.
Speaker Change: Completion.
Speaker Change: Looking ahead, we plan to increase the proportion of expansion drilling testing down plunge of existing structures and unlocking new potential, particularly due to strong per SKU.
Speaker Change: With the addition of new Greenfield exploration team, we are turning our focus outputs from our operations and into the substantial land packages that we have to explore.
Speaker Change: We are convinced the prospect to be above ground.
Speaker Change: To showcase these prospectively in 2025 and beyond.
Speaker Change: Between the geologic resource models that both Eagle River Antena upcoming.
Speaker Change: Coming technical reports and a renewed focus on regional exploration 2025 is shaping up to an exciting year for western.
Speaker Change: We'll be starting to discuss initial results of these programs in the coming quarters.
Fernando: And now over to Fernando who will take you through the quarter's financial results.
Fernando: Thank you Donna and good morning, everyone.
Fernando: Turning to slide 17 in the fourth quarter, we achieved strong gold production of nearly 50000 ounces, a 37% increase over Q4 2023.
Fernando: This in turn drove record annual production of 172000 ounces.
Fernando: The year over year increase what's driving maybe my key two key areas accessing a greater proportion of ore from high grade zones in Eagle River.
Fernando: And three quarters of processing high grade ore from <unk>.
Fernando: On a per ounce basis, we have seen a sequential decline in quarterly all in sustaining costs.
Fernando: The 1373 U S dollars per ounce in the fourth quarter.
Fernando: For the full year all in sustaining cost was 1459 U S dollar per ounce.
Fernando: I would like to highlight that entering into new for 17% of that all in sustaining cost was attributable to sustaining exploration and development ramping up significantly over the last two years.
Fernando: Moving now to slide 18.
Fernando: Italy, we delivered strong results in the fourth quarter.
Fernando: Revenue for the quarter has increased 79% year over year to $183 million.
Fernando: Driven by both higher production and a 54% increase in average realized gold price per ounce in U S dollars.
Fernando: During the quarter the company recorded net income of $57 million.
Fernando: Our 38 per share.
Fernando: An increase over the prior year due to the increase for that kind of on the higher realized gold breath.
Fernando: In addition, when we compare to Q4 2023.
Fernando: Cash margin of $125 million was up by 16%.
Fernando: EBITDA more than tripled to $150 million.
Fernando: Net cash from operating activity doubled to $76 million.
Fernando: And free cash flow increased by about $5 million to $40 million.
Fernando: We have a clean liquid balance sheet with zero debt.
Fernando: We ended 2023 with $41 million of cash.
Fernando: But for just one year and our cash balance strip at $223 million at the end of finished in April.
Fernando: And this is after paying off.
Fernando: $39 million, owing under the revolving credit facility in the first half of this year.
Fernando: Together.
Fernando: With our fully Undrawn revolver facilities, we've got over $273 million in liquidity.
Fernando: Our balance sheet has continued to strengthen with working capital increasing to $151 million at the end of December from a negative $19 million at the start of the year.
Fernando: Essentially we improve our net position by $150 million entering into a new four or supported by increase in free cash flow.
Fernando: Next let's look at our guidance for the year on slide 19.
Fernando: Consolidated production is expected to be between 190002 hundred 10000 ounces, which based on the midpoint represents a 16% increase compared to 'twenty for Newport.
Fernando: Production is anticipated to threatened in the second half of 2020 Fox.
Fernando: With the first and fourth quarters accounting for approximately 20% and 30% of total gold production respectively.
Fernando: We're guiding to all in sustaining costs in the range of four 1325, and 1475 U S dollar per ounce and self funding capex of $160 million.
Fernando: These include 40 million for exploration.
Fernando: $14 million in growth capital related to the ramp at Cana, which is transactional poured in to fill the mill strategy and long term growth.
Fernando: With the gold price over 3000, we're setting up for another good year in terms of free cash flow.
Fernando: It's what practice, our expected free cash and it's almost 70% higher than our budget.
Fernando: This would imply that we're currently trade in a double digit free cash flow yield.
Fernando: This underscore why wisdom.
Fernando: Your return low risk proposition.
Fernando: Yes.
Fernando: With that operator, you can now open the line for questions.
Speaker Change: Thank you.
Speaker Change: We will now begin the question and answer session to join the question queue. You May Press Star then one on your telephone keypad.
Speaker Change: Your tone acknowledging your request if you are using a speakerphone. Please pick up your handset before pressing any keys to withdraw your question. Please press star one again, we'll pause for a moment as dollar callers join the queue.
Speaker Change: Okay.
Wayne Lam: Our first question comes from Wayne Lam with TD you May proceed.
Speaker Change: Yeah. Thanks, guys. Good morning, everyone just wondering if.
Wayne Lam: You could provide a bit more detail on this.
Speaker Change: Change in reserve grade.
Speaker Change: At Eagle River, and the new Litho structural model, just wondering exactly what changed with this new model.
Speaker Change: Just wondering.
Speaker Change: How the reserve her attendance.
Speaker Change: I guess informed by the great drill density.
Speaker Change: Okay.
Speaker Change: Cost to China to start in all aspects of Halloween.
John: Hi, It's John speaking can you hear me okay.
Speaker Change: Yes.
Speaker Change: Okay.
Speaker Change: The Chinese the reserve grade is due to variances in the cutoff grade.
Speaker Change: By lowering the cutoff grade we are already looking at larger tons overall drop in the grade. So that's one aspect.
Speaker Change: That's a function of a review and part of our growth as a company.
Speaker Change: The second part on the resource side that feed into the reserve the drill testing, we did drilled a lot of holes last year.
Speaker Change: The results of those whole steep feed into our modeling process. The implicit modeling on the wire framing has been quite robust we using leapfrog to help drive us through leapfrog has.
Speaker Change: Some components, where but it's not controlled will lead to higher volumes and bubbles.
Speaker Change: Listen that we engaged to do that work as part of our global model work and resources work is excellent.
Speaker Change: It's been well controlled.
Speaker Change: We have been reviewing that work and the Wi framed at least by structural work has incorporated.
Speaker Change: Information from underground mapping.
Speaker Change: <unk> are the geologist faces.
Speaker Change: Plus lithology mapping she assigns quartz veins to build a three D architecture on the lithology first.
Speaker Change: She has nine locations in the next stage into the continuation of the building of the mineralized Wi France.
Speaker Change: Paul density came part of the interest relation process in how the grades from those two holes fade into the allocation of the grade into the block models, but the Wi framing process was very very sound.
Speaker Change: I'm going to try and summarize a little bit differently.
Speaker Change: Would we benefit on margins came more real time.
Speaker Change: And key pod based practices to lastly, keep in mind in a different way.
Speaker Change: We have not seen many new mining areas and there are many many more.
Speaker Change: It makes it weighted consistent entry and its own momentum.
Speaker Change: Remember, we reduced <unk> by 20%.
Speaker Change: He's a great remains consistent which is great to see.
Speaker Change: <unk> reserves increased by 22% equal to that.
Speaker Change: But it did increase by <unk> <unk>.
Wayne Lam: I think Wayne what's important to understand that these ounces are close to my infrastructure, Ohio in the mines and lock in these new areas as well.
Wayne Lam: The cost per ton is down so when you look at that you need to see this as part of that journey of close to any wisdom as we start to look at this mine in a very different way. It's part of the global assault finished with me doing once we might upgrade the onset of weight of the inferred ounces at that exit what we see now is a big picture story to try.
Wayne Lam: That's the strategy, we're actually working on the cost reduction will be installing to pay it's a good effect can we start to see us coming soon.
Wayne Lam: Holding this up to assure that actually we deliver more value for our shareholders.
Speaker Change: Okay, great. Thanks for the explanation. So yeah, I mean, I guess a bit of an increase in tangent still some high margin ounces there.
Speaker Change: Just wondering on the great optimizations in the domain name used can you give us a better.
Speaker Change: Better idea of some of the refinements that you guys are looking at.
Speaker Change: What might we expect with the new technical reports coming up next year.
Speaker Change: So some of the refinements swine, we were looking at ways of cutting strategy influence they have on the overall rate.
Speaker Change: The search links toys the selection how fireeye can loop the influence of structures, we've got oriented core and tele view of work looking at how the structures of the grades and drill holes linked together in <unk> space, which comes back to the search lips voice, we're looking at different domains approaches now whether we applaud.
Speaker Change: A lower grade and then a higher grade remaining so there's less of an influence from the lower grade and reducing drill holes with a high great values.
Speaker Change: Mitra process going backwards and forwards it's happening now and we'll see the benefits of those in the coming weeks. The next model update.
Speaker Change: I think also just a great day.
Speaker Change: As it relates to and the global model with I think it was important to say that when you look at the global money, you're adding in many many more tonnes and ounces that online in cancun, capturing impactful data or kept for a country. Tactful answer then these ounces information needs to be qualified for <unk>.
Speaker Change: The confirmation none of this is currently in these models like not too important to say that everybody on this call.
Speaker Change: Earlier this week.
Speaker Change: So if you can imagine this.
Speaker Change: It can be a solid figure.
Speaker Change: Piece of information to review and understand as time goes by and I think what we're going to be doing that the next well is making sure we get the <unk> constellation filling in.
Speaker Change: And you can understand then that obviously will.
Speaker Change: The technical report and towards next year, and that's why I'm not going to be.
Speaker Change: She had been in Q1 do we deliver that information needs digital copies of those reports so should we get the extra coming out in the right kind of way, but my gut feeling tells me that what you will see the high grade is going to be suddenly they like to think and we're going to keep adding in good ounces.
Speaker Change: At different levels in the mine, it's going to last for the slow at a lower cost per ton, which is what we've always been saying to the market. We still kind of fixed cost is it's highly nitpick on keto specifically in personal lines in the specifics. So this allows us to take advantage of this mine and take a bunch of the pack.
Speaker Change: But.
Speaker Change: Okay, great. Thank you and then maybe just last one for me just wondering on the global resource initiatives.
Speaker Change: Is the Digitization of Eagle River already been incorporated into it.
Speaker Change: And informing that new reserve and just wondering how that is expected to improve operations moving forward and then.
Speaker Change: Similar to that Cana I'm, just wondering how long that might.
Speaker Change: Taken at Cana.
Kevin: And then Kevin answer this one is meeting this from outside.
Speaker Change: Yeah.
Speaker Change: Eagle River Firstly.
The global model.
Speaker Change: At Boston.
Speaker Change: To your point hasn't been included in this reserve.
Speaker Change: A very small portion of what we're actually seeing as it evolves into the modeling.
Speaker Change: Alright, great potential in over the next six nine months, what we see as a QA QC system.
Speaker Change: Conversion of that global model into reserves over the next six to nine months.
Speaker Change: So 12 months Athena inside a much.
Speaker Change: I suppose the less mature stage, so and it's probably 12 months of work at PNM.
Speaker Change: I ended up et cetera.
Speaker Change: Okay, great. Thanks for taking my questions.
Speaker Change: Thank you.
Speaker Change: Yeah.
Speaker Change: Our next question comes from Don Demarco with National Bank You May proceed.
Don Demarco: Thank you operator, and good morning, everyone.
Speaker Change: First I guess, just continuing with questions on the resource to Jon Al.
Speaker Change: So Jonathan and endeavor.
Speaker Change: Targets for reserve or resource accretion over say, a five year period.
Speaker Change: Is there any plans to do the same at west Elm and if so.
Speaker Change: What kind of target level of reserves might you expect over a certain period of time.
Speaker Change: Don.
Speaker Change: That's part of the secret source, Unfortunately, but yes, yes.
Speaker Change: I am when I looked at the data initially and arriving there is a there's a wealth of information and targets.
Speaker Change: It's a process that we've started with the surface exploration in the underground exploration teams.
Speaker Change: It's too soon to.
Speaker Change: To comment on how far that can go and how far it leading to resource and reserve update but that's certainly a focus for me for the coming quarter.
Speaker Change: Set up West times, and very supportive they see the challenge for the growth and they see opportunities.
Speaker Change: I agree, 100% and we want to showcase space in the coming quarters with the information and press releases.
Speaker Change: Okay. Thank you.
Speaker Change: Just briefly on the technical reports coming next year. So that's going to be can you confirm that's for both mines and in on crude mine plans with costs.
Speaker Change: Yes for both mines, where we can go back in queue.
Speaker Change: Okay. Thank you no cleanup costs are attractive in Q4, so, but how should we be thinking about press gear like how much tonnage is expect compressed yield this year next year and how should we think about the implications on grades and costs at keno after per skills ramped up.
Speaker Change: So cana first since our first introduction of preschool tonnage this year, 37%.
Speaker Change: Yeah.
Speaker Change: And then obviously around salt into the first year development, the orebody and development parcel is planned for Q4, this year and will ramp up production thereafter.
Speaker Change: As you know, it's a near surface deposits.
Speaker Change: No really no constraints as far as the transportation, So thats why with the cutoff grade for pursuance with Florida community.
Speaker Change: Jordan logistics and cost.
Speaker Change: The production.
Speaker Change: And then Thats been up Kevin I think for 2026. He is starting four quarters of that what exactly can come back.
Speaker Change: Yes.
Speaker Change: Okay. So I guess, we'll look at.
We would expect maybe the grades at Shire and costs, a little bit too.
Speaker Change: As you might expect given the grades.
Speaker Change: Okay, Great and then just final question.
Speaker Change: So the balance sheet strong trending higher but what are your plans for capital allocation do you have a target cash balance you'd like to achieve before considering maybe a dividend or special dividend.
Speaker Change: Do you want to build up some dry powder to provide flexibility on your potential M&A scenarios.
Speaker Change: That's a great question and obviously, it's early 18 conversation yet waste and I think the first thing.
Speaker Change: Thank you.
Speaker Change: Exploration you are important exploration is going to keep pushing exploration drive inorganic side on a base of cash a.
Speaker Change: Minimum cash balance I would argue that about 120 million 130 million stabilized number for winter our belief okay.
Speaker Change: Conservative side, where they are.
Speaker Change: You can you mentioned that obviously you may be considering.
Speaker Change: What those options may be if I chose to put some feedback for my shareholders.
Speaker Change: And we'll have a look at harvest.
Speaker Change: Yeah.
Speaker Change: What we can do with that.
Speaker Change: Okay excellent. Thank you for that and thanks for being a good with Q1.
Speaker Change: Thank you and as a reminder, that asked a question. Please press star one on your telephone.
Speaker Change: Our next question comes from John Tumazos, with John Tumazos, very independent research you May proceed.
John Tumazos: Thank you for taking my question.
Speaker Change: Looking ahead a year.
Speaker Change: If the current gold prices, where the whole the S. Three.
Speaker Change: Three year, moving average gold price would be between 400 neighborhood.
Speaker Change: From where we sit now do you.
Speaker Change: Thank you will do your reserves next year U S 1500, or how much might you raise it.
Speaker Change: We take these if we yes.
Speaker Change: For the question could you check the Michigan will review it at that particular time, when we typically do is check.
Speaker Change: What market is telling us it's Tom let me give a few minutes to kids as well.
Speaker Change: We got to be quite conservative specific illnesses.
Speaker Change: <unk> margin to remain in the organization.
Speaker Change: And I think I would say is currently sitting at about 1500 about mistaken.
Speaker Change: Okay.
Speaker Change: Yeah, we would view at that stage.
Speaker Change: So let me try another one.
Speaker Change: Thank you your reserve replacement next year were solely be from lowering the cutoff grade.
Speaker Change: Or how much of it do you think will be from new discoveries.
Speaker Change: I mean I think.
Speaker Change: If we look at their aggressive exploration program. We have in place that would argue that this is going to be replaced from exploration Craig Kenneth Lee.
Speaker Change: I think I mean, there would obviously be a cut off grades reaction.
Speaker Change: And that relationship as well, it's one of the global model edition that you're going to see team.
Speaker Change: China I would argue that your exploration programs driving considered replacement that's correct that's correct John.
Speaker Change: Hearing it and optimizing targets.
Speaker Change: With various filters great of course, but also structure highest dilation.
Speaker Change: Potential for continuity, along strike and down plunge in putting those proof of concept housing and we have the flexibility and the mandate that.
Speaker Change: If positive results come through then be aggressive following it up say, yes growth for reserves I think it's important just to say that we're not trying to squeeze margin and drive 10, low grade and no.
Speaker Change: Attention to them.
Speaker Change: We said to ourselves from the asset that we can be driving value for our shareholders value if.
Speaker Change: So if any would be putting through that mostly when we look at this we really consider it.
Speaker Change: Yes, that's a particular tons do what it needs to do in terms of that strategy and I think it's really important to say that everybody, yes, it will remain that way.
Speaker Change: Understood that SP is at 74.
Speaker Change: Okay.
Speaker Change: Thank you there are no further questions at this time. This concludes this morning's call. If you have any further questions. Please contact Chris Moran at invest that wisdom dot com. Thank you for participating today.
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