Q4 2024 Aya Gold & Silver Inc Earnings Call
Yeah.
Good morning, I will now turn the call over to Felicia Elliot IRA Golden Silvers Investor Relations Officer. Please go ahead.
Thank you operator, and welcome to everyone, who has joined I S fourth quarter and full year 'twenty 'twenty four earnings conference call.
Here with me today.
I left out President and CEO Hugo Landry towards Chuck <unk>, Chief Financial Officer, Julia Ileus, Chief legal and sustainability officer, and Davita, along Vice President of exploration.
We will be referring to a presentation on this conference call, which is available via the webcast and it is also posted on our website.
And 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 included in our annual information form.
Technical information in this presentation has been reviewed and approved by Rafael Budd when I as Vice President of operations and the Vela alone I as Vice President of exploration, both of whom are highest qualified persons as defined under national instrument 43 101.
Standards of disclosure for mineral projects.
I'd also like to remind everyone that our presentation will be followed by a Q&A session.
Speaker Change: With that I would now like to turn the call over to Ben My lifestyle.
Wow.
Alicia: Alicia Thank you very much.
Alicia: Welcome everybody welcome to this Q4 and full year 2024 conference call I will refer to the presentation that you have.
Alicia: Yeah.
Alicia: Page two and three where we have the forward looking statements I would draw your attention to our forward looking statement.
Alicia: Moving on to page four of the presentation and a review of the year. The highlight of the year 'twenty 'twenty. Four is the fact that there is good there expansion plant has been completed.
Alicia: And on budget.
Alicia: For the year 2024, we produced one 6 million ounces of silver.
Alicia: We're ending the year with $49 million U S dollars in cash and restricted cash.
Alicia: And we're also announcing a budget and exploration budget for 2025, which will be between 25 and $30 million, both coverings and domestic.
Alicia: So as I said, we've completed there is good the mine expansion on budget, which you all know is extremely rare in our industry.
Alicia: We've expanded mining operation the new male reached commercial production at the end of 2024. It was on December 32024 that we declared commercial production as it was expected.
Alicia: It had been communicated.
Alicia: We've completed the underground development, both lateral that vertical which is something that we do on a yearly basis to get ready for the coming year.
Alicia: We're also finishing the year with a stockpile of 336000 tonnes of ore.
Alicia: <unk> added an average of 153 Gram per ton this stockpiles being utilized when the mining is a little bit short of the ore that we need for the plant.
Alicia: We are ramping up the mill to reach steady state capacity, we've already reached steady state and many days in a row in January and February and our goal now for 2025 is to reach steady state capacity on a constant basis.
Alicia: In 2024, we've advanced the <unk> development, we've completed 107000 meters of drilling on the.
Alicia: The main trend and on other targets, we've extended the main trend, where we where we see mineralization to five four kilometers.
Alicia: Also we announced a new mineral resource update in 2024 in April and in 2025 in February we've updated the mineral resource estimate.
Alicia: During the year 2024, we've added 15 permits.
Alicia: Spanning the Miocene exploration footprint to over 200 <unk>.
Alicia: Square kilometers, which we had by year end.
Alicia: We've unlocked in 2020 for some noncore gold projects that we've announced the Spinout of <unk> Gold project in to Amex do.
Alicia: A gold exploration company focus on North Africa projects, yet is the largest shareholder.
Alicia: <unk> Nx SKU.
Alicia: The closing is expected.
Alicia: Week, whereby some new shareholders will be putting $16 million.
Alicia: Our fresh money for the exploration of the MSB and other projects.
Alicia: And in 2024, we've continued to progress all of our ESG priorities.
Alicia: Q1 was the completion and commissioning of the electrical line, which powers going back from the renewable energy wind and solar and we've also completed our ESG report with the name of enhancing disclosure.
Jason: Jason you to page, five, which <unk>, which is Q4 and full year 2024 is good their expansion completion with some basic statistics. So if you if we compare the year 2023, and 2024, you see the silver production is somewhat low.
Jason: In 2024 by 16%.
Jason: On the other side or on the other hand, the ore process per ton.
Jason: Move in 2023 from 281000 ton to 358000 tonnes. So if you look at it on a yearly basis.
Jason: Is the 1000 ton a day.
Jason: Remembering that the name plate capacity.
Jason: The older plant with 700 ton a day, we were running them around 800, 850, and we had in December the new plant that kicked in so when we look at the <unk> process for 2024, we were close to 1000 tonne a day.
Jason: The average grade was lower from 2023, where we process 250 Gram per tonne in 2024. The average grade was lower at 171 Gram per tonne mill.
Jason: Mill recovery directly affected by a bit of a lower grade it was 86% 87% for 2023.
Jason: We're at 84% for 2024, you'll remember that the target once the new plant is up and running and is at at ramp up capacity.
Jason: Our goal is to have between 80, 890% recovery on a steady state basis.
Jason: So the revenue for 2024 reached $39 million one.
Jason: Compared to 42 million the year before.
Jason: Profit and loss of both years were at a profit we generated a profit of $15 million in 2023, we generated a profit of $382000 in 2024, which is directly related to the fact that we process lower grade ore coming may.
Jason: Lee from the underground mine.
Jason: Furthermore, there was a one time loss on a charge related to the Mauritania asset the tissue hit project.
Jason: And that's created a $27 million write offs, which comes from a transaction that we put together four years ago. We did do a deal on TGF beta and you will see this in the MD&A, whereby we wanted amex too to take over the project.
Jason: And bring it to production, so, but because of accounting rules and disclosure we felt that we should take a write down.
Jason: <unk> set the full value on.
Jason: On our books of $27 million. So it's a one time impairment charge, which has no effect on cash or cash flow.
Jason: Moving to page six of the presentation.
Jason: You have again at the top it just shows you the major milestone of the year, which was in Q3 once we were complete.
Jason: We had completed the construction we successfully tested the new Merrill Crowe system, which is a brand new system and we were able to have our first silver poor in Q3, but just from the Merrill Crowe system in Q4, when we received from the EPC contractor that plant we started commissioning of.
Jason: The new mill, and we were able to declare commercial production on December 30.
Jason: In early 2025, we also reached nameplate capacity, which was communicated to our shareholders.
Jason: When you look at some operational highlights.
Jason: See the year 2023 in the year 2024, and you also see the quarter, but when we look at the year because I think now for US 2024 is behind US we did the construction rebuild it we commissioned it we it did.
Jason: The commissioning we build the ramp pad and now we are into the ramp up for 2025, but some high level statistics.
Jason: The ore mined in 2024, we mined 444000 tons compared to $4 93, the year before at the average grade is 162 compared to 213.
Jason: Ore process at the plant you see is 358 as I mentioned earlier compared to $2 81, the mill recoveries are 84% for this year.
Jason: The average grade process at the plant is 171.
Jason: Gram per tonne.
Jason: The total silver production for 2024 is one 6 million the silver sold total silver sales is one 5 million. So there is an inventory at year end the difference.
Jason: 135000 ounces the average net realized price in 2024 was excellent at 26, obviously now we're more towards 34, but that was a very good year at 26 in comparison to the spot price.
Jason: The adjusted cash cost per silver ounces once <unk> made some small correction due to the fact that we were ramping up and we were completely overstaffed.
Jason: Adjusted cash cost for silver ounces at $19 compared to 12, we understand that this is not representative of the company going forward. It's just.
Jason: A fact of life as we were getting ready in Q3 and Q4, you really started the new plant.
Jason: All of our staff, we have more equipment.
Jason: Hence the cash cost was higher than the previous year, which was on a steady state basis.
Jason: Moving to page seven and I think that's where the new beginning is is now that the construction is behind us that ramp up of the plant is being done that ramp up of the open pit is going extremely well and the open pit is running at 1500 on average.
Jason: <unk> per day and the underground right now is running at a 1000 ton per day, obviously, we changed the focus of the underground from tonnage to grade we want the underground to improve its grade and we want the open pit to give us the regular production that we're looking for to feed the plant. So that's coming along.
Jason: Well the open pit is on all cylinders at 1500 tonnes, a day and we expect that to increase and to grow until the end of the year. So the guidance for 2025 is extremely important.
Speaker Change: Our silver production.
Speaker Change: For 2025 will be between five and $5 3 million ounces of silver of and get.
Speaker Change: No more concentrate so very very little because historically, we were producing 50 50, a concentrate and then you get as you know the realized price on it gets a lot better than in concentrate.
Speaker Change: Here, we are 5.0 to five 3 million ounces for 2025, and Thats, assuming the ramp up so Q1 will be around the $1 million and we will have a ramp up till Q4, because there are many items that need to be adjusted at the plant which is pro.
Speaker Change: Graham and pumps.
Speaker Change: And so these little things are getting done over 2025 to really come at the end of the year. We had a plan that is in full steady state and with copper recovery stope availability.
Speaker Change: So the silver cash cost on average for the year should be between 15, and 18 and again that is the average between Q1 and Q4, we expect Q4 to be lower than this and because we will be we will have done all of the fine tuning same with the recoveries to average throughout the year.
Speaker Change: 84 to 88 understanding that our gold.
Speaker Change: Timothy used to be between 80, 890 aspirin to feasibility study.
Speaker Change: The average grade is similar and the thinking between $1 70, and 200 understanding that the grade in the open pit.
Speaker Change: Is fairly straightforward, but the underground where we had some issues in Q3 and Q4, we're now it's improving and Thats why I said the focus of the underground is more now grade control than tonnage control. So we really are pushing to have a better control over to Greg and the exploration.
Speaker Change: Or the assets for the two projects will be between 25 and $30 million, that's something you'll recall, we review every six months based on the results because if you have a structure and you have more systematic drilling then sometimes we have more meters. If it's more exploration drilling.
Speaker Change: Fewer meters and more geological work. So that's something that we're going to be reviewing as we go forward. So.
Speaker Change: We see the major milestone on the chart at the bottom of page seven showing you.
Speaker Change: How the production profile is now changing.
Speaker Change: Historically the company was set to produce about 161 7 million ounces, sometimes depending on the high grade pockets, we did a little bit better, but you recall the plants. We're geared to do 710, a day and 700 tons a day.
Speaker Change: Or even 800 tons a day that was year to give us one six to $1 7 million and Thats exactly what we did in 2022 and 2024 and now we have this major change from 2024 to 2025, where we're moving towards five zero to five 3 million ounces.
Speaker Change: Moving now to page eight.
Speaker Change: Okay.
Speaker Change: Couple of financial highlights.
Speaker Change: You've seen the numbers you, let's go to the year end 2024 and year end 2023, we've talked about the revenue the gross profit being $5 million for this year compared to $50 million last year. The loss is directly related to the write off of <unk> hit the <unk>.
Speaker Change: $7 million. So when you look at the net loss for the period at $26 million effectively the year. If you do not take into account as you hit which come out with a $1 million of income but tissue hit is now a one time write off.
Speaker Change: Based on the fact that we have no certainty of the outcome.
Speaker Change: Working cap is at $23 million, a very strong balance sheet with only one death, which is <unk>, which is $100 million.
Speaker Change: <unk> dollar U S, which has no capital repayment in 2025. So we are in a very strong financial position.
Speaker Change: The.
Speaker Change: The tissue and it is the main element to remember when you look at the financial the impairment of $27 million.
Speaker Change: We believe that it was the right time, though we are still working on TCE rate would differ.
Speaker Change: <unk> possibilities, we felt it was the right time to take the write down.
Speaker Change: Going to page nine which is the reason why we've created value over the last four years when we took over.
Speaker Change: Slash Slash Maria in 2020 is the geological upside the exploration of site. Today, you have a company that has 1200 square kilometers between is going there we imagine as they grew earnings <unk> and <unk>.
Speaker Change: We drilled in 2024 35000 meters at <unk> there at the mine you've seen the results you saw the results Tuesday, and you saw how good those results continue to be as good there. So when there is a major system and I'm going to show you with.
Speaker Change: Size of the property that we have now <unk> All star project, we drilled 107000 meters or 107 kilometers last year.
Speaker Change: We've expanded the main zone as we discussed a five four kilometers.
Speaker Change: We have multiple potential parallel zone.
Speaker Change: Conductive anomalies are identified.
Speaker Change: Now at year end, we still have 27000 assays that are pending.
Speaker Change: We're utilizing all the lab capacity in Morocco.
Speaker Change: We are helping the labs now increase their capacity so that they can service us faster.
Speaker Change: And thats being done under their regional which is very interesting and has tremendous potential. We've completed 10000 meters in 2024, we've tested them there, whereas we've been there east we're increasing our understanding of geology, which is extremely important.
Speaker Change: Because we're looking for a look alike of <unk> their deposit if we have a look alike are those getting their deposit and we are looking at that for that.
Speaker Change: We will be able to increase the mine life past 11 years, and our increased capacity at the plant and an increase in total production. So we are using all the tools and methods that are available geophysics mobile LMT and we're using all the tools available with.
Speaker Change: Strongly believe that there is one or two more is when their deposits and maybe more it's just now a matter of.
Speaker Change: Attending to it and getting the job done and we have an extremely good team <unk> their regional and it means well thats been spun out into your next to and we're going to follow this throughout the year.
Speaker Change: Going to page 10, you have.
Speaker Change: The picture there is good and their deposits you can see it.
Speaker Change: It's like a loaf bread its one four kilometer long, it's 20 meters thick.
Speaker Change: 700 meter deep and now you saw the results that we're showing you here 2000 gram per tonne over 70 meters I mean, and it's on an online that this is a very very large system. We just gave you some.
Speaker Change: <unk> this week.
Speaker Change: The bottom left hand side, which is the west.
Speaker Change: We believe that this is like a buy get I say its a loaf of bread so to Baghdad.
Speaker Change: And Francophone Africa, and the fall that you see on the slide to the West is where the biggest was cut into two pieces and we've been looking for that second piece now we did checkups surface and it wasn't there. So clearly there was a displacement towards the bottom and if you look.
Speaker Change: At some of the results that we showed this week, it's showing that the bottom right.
Speaker Change: Bottom left sorry, the bottom left to the west.
Speaker Change: Showing very nice mineralization. So we're pushing the interpretation hopefully to find a second piece of the slope of bread and to see it may be as lower down.
Speaker Change: In continuation with this current structure, but starting from the bottom touching the grant which has always been there.
Speaker Change: Control rock, where we see where the mineralization is so very interesting project lots of new theory behind the geology and a motivated team to find more look alike geologic their deposits.
Speaker Change: This.
Speaker Change: Page 10 is a 2% or 3% of our property.
Speaker Change: And so when we arrived we had 30 square kilometers five four and a half years ago and now we have 440 square kilometers. So there is definitely a lot of potential to come with the new zone similar to their mind and we have a plant that has.
Speaker Change: Has the capacity to grow that has the infrastructure. It has power. It has water. It has the team at site that can take this land and increase its throughput by 30% to 50% quite easily.
Speaker Change: Moving on to slide 11, and that is the tier one asset that we have called Boumediene.
<unk>.
Speaker Change: We completed in 2020 for 107000 meters of drilling we've extended the strike from four 2% to five for half of the drilling last year was extending the strike. The other half was drilling other structures and we have been drilling other structures and.
Speaker Change: Gave us a resource and were added into the resource update so we did a mineral resource update in <unk>.
Speaker Change: February of 2025, which started from the when we had done in April 2024.
Speaker Change: And we're now pleased to say that we.
Speaker Change: That drew Madsen on the main permit on the main zone stands at 452 million ounces of silver we have complete satellite mapping.
Speaker Change: All of the studies airborne geophysics, and we've identified many parallel structures.
Speaker Change: On trend to the main zone.
Speaker Change: <unk> South and we've also identified many new structures east west that seem to be carrying mineralization, which I'll show you in one minute.
Speaker Change: Furthermore, in 2024, we've added 15 permits to increase the footprint to 212 kilometers from the original 34 and in 2025, we've added another 500 square kilometer to that so we now control the district.
Speaker Change: And we've done a law.
Speaker Change: Lot of work to understand.
Speaker Change: Slide 12 shows you the mineral update.
Speaker Change: Which was communicated at the beginning of the year, but if we're talking about <unk>, we have to talk about the mineral update so as you can see we've increased the percentage change in total ounces silver equivalent. The total indicated went up by 120% the inferred went up by 19%.
Speaker Change: We need to remember is all of this was done in two and a half years. So we've discovered three 450 million ounces of silver at less than three years of drilling with 200.
Speaker Change: No matter, our 200000 meters of drilling. So this is extremely fast the discovery cost is around 10%.
Speaker Change: For silver ounce extremely low as I see quite unique in our sector.
Speaker Change: When we've done the resource update we also realized that 49% is constrained. So it's an open pit and 51 is underground. So it was like a 50 50 currently project with the underground coming from a couple of things and as far as the under the open pit coming from the pit.
Speaker Change: And the underground being.
Speaker Change: Underneath the pit and on that five four kilometers structure.
Speaker Change: Still open in all direction.
Speaker Change: North and at depth.
Speaker Change: Going to slide 13, and that is the secret pathway to a tier one very unique projects you see here all the permits in the middle you see the original permit where we have made the area did this the original discovery.
Speaker Change: You can see this fits right in the middle and the geophysics shows us clearly where the Vms system near the volcanic system the massive sulfide, which in this case here is its pyrite and we can see clearly so look at all of these targets. So you have the main system, which is lower.
Speaker Change: So you have many parallels system north south to the east and to the West of the main system and then around that you have some east West Star.
Speaker Change: Structures, what where we've walk the ground we've looked at.
Speaker Change: Grab samples we've looked at the geology and we've been and this is another mineralization type. It's another movement, it's not the first movement, where we our north south with gold silver lead and zinc.
Speaker Change: The one that is east west seems to be more copper silver. So that is what we're looking for for 2025. As we are also increasing the drilling on the main zone to really fully understand the size of the main zone, knowing that it's continuing to the north continuing to the south and then have a parallel system.
Speaker Change: So <unk> is a very unique asset very unique project, which you see on slide 13 is our territory. It's our ground and there are few little pieces missing, but we're still in discussion with some families to add to the portfolio.
Speaker Change: So the exploration program, which is where we create value and if you are with us as a shareholder. It is because you believe in the exploration program. This year again, we will spend between 25 and $30 million on exploration and development.
Speaker Change: Both <unk> <unk>, we'll see again this year between 100 and 150000 meters of drilling.
Glen: As Glen there, we'll see between 2020 five and all of that is a function of results. If we find a new zone that has been there and we need to expand and drill it quickly because it could be another source of ore we will be there and we will do this as a group as a company right now we have <unk>.
Speaker Change: <unk> drilled starting at all time.
Glen: It's a team of 100.
Glen: Just the geological team and Thats, where the value creation is coming from of course the plant. The mine the cash flow is beautiful it will fund all of this work over the next one or two years, but this is where the value is getting created so there we will.
Glen: Follow up on the underground targets, especially the one we identified this week showing the west extension at depth.
Glen: And is there regional permits where we have many targets at <unk>.
Glen: For 2025, 50% of the drilling will focus on the main trend and TV, which was a beautiful discovery in 2024, and we will continue to extend the known mineralization trends along strike at depth and we will infill some areas as well to understand it better 50% of that.
Glen: Drilling will be on exploration targets, which come from the geological thesis that the team is putting together and where we will be testing the east west structure, where we see copper silver and we will also test some of the parallel system. So the current main trends.
Glen: To conclude.
Glen: The presentation and before the question period.
Glen: The catalyst for 2025.
Glen: How are we going to set ourselves apart well of course, we will commence the drill program.
Glen: You have a company that we will drill between 140, and maybe up to 200000 meters, depending unresolved and depending on what we're seeing.
Glen: Commenced the <unk> PPA that started in 2024, but it will accelerate in 2025, we still don't know how big the plant needs to be and that is something that we're waiting for drill results and for the geological team to tell us what they believe is the opt in.
Glen: The size of the deposit right now the main the main zone.
Glen: We're not going to take any of the other zone into account right now.
Of course, one of the catalyst is steady state 3000 ton per day processing as they're ramping up to a steady state ramping up too.
Glen: 92%, 95% ramping up to a recovery between 88 and.
Glen: Optimal 88% to 90% that's what we aim for of course, the average of the year is not going to be this because Q1 Q2 Q3.
Glen: Ramping up.
Glen: We will do a mid year update on boom engineering metallurgy NPA, that's something that we've been working on now for many quarters and it's something that we will have much much more information over the summer.
Glen: We will also publish <unk> their mineral resource update as soon as the drilling.
Glen: Depleted and we know the size of that first loaf of bread.
Glen: We're still looking for the second piece.
Glen: But as soon as we've completed the first vote. We will do is when they're mineral resource update with a new mining plan, a new cash flow new production profile just to show the strength of the deposit the strength of the plant and the quality of the production and the profitability and the cash.
Glen: So going forward.
Glen: Thank you very much for your time the team this year.
Glen: To answer any questions you have.
Glen: And I would close in say 2024, with a very strong year, where we built it on time.
Glen: Literally receiving the plant, but we commissioned on time and then now we're starting a new era, which is 2025 on with added capacity with demand and where it is with <unk> to develop and his name is and I really look forward to 2025. Thank you very much.
Ben Law: Thank you Ben law as a reminder to ask a question. Please press star one on your telephone and wait for your name to be announced to withdraw. Your question. Please press star one again, please standby, while we compile our Q&A roster.
Ben Law: One moment for our first question.
Speaker Change: And our first question will come from Kosmos sure.
Speaker Change: CIBC Your line is open.
Speaker Change: Hi, Thanks.
Ben Law: <unk>.
Ben Law: Maybe my first question is on <unk>.
Ben Law: That's why as you mentioned.
Ben Law: You're transitioning to one third underground.
Ben Law: Two thirds open pit.
Speaker Change: Is that only for 2025 are we talking longer term as well.
Cosmos: Cosmos. Thank you very much for your question.
Cosmos: Absolutely not for one year, but for a minimum of six seven years and the open pit there was a test in 'twenty beginning of 2024, we were testing it because it's not part of the culture in Morocco, and we were.
Cosmos: Testing the contractors testing the team we realized that we had great success.
Cosmos: As we saw that the costs were about half of the underground mining.
Cosmos: Mining costs, we decided to review the mining strategy and we did.
Cosmos: And we decided in Q4 to go much more open pit and reduce the pressure on the underground. So currently.
In the current mine plan that we have we have a six year plan to be an open pit, but <unk> and his team are working over the summer on a completely new mine plan resource update reserve update throughput update and new plant capacity and we.
Cosmos: We'll see.
Cosmos: For how long but.
Cosmos: It will be for much more than that and then probably six years.
Cosmos: Recall that the first 300 meter down is not an open pit down down the mountain. So we started we start with our first 300 meter.
Cosmos: Just bringing down the mountain and after that we're going to go deeper into a pit. So we do have a lot of flexibility you saw the drill results at the beginning of the week every time, we do some condemnation drilling towards the east we find new zones, so that it.
Cosmos: Is getting much bigger than originally anticipated for some very good news and the grade is excellent. Furthermore, as you know it's much easier to reduce dilution in the open pit in the underground because you have a better definition drilling and tighter definition drilling in the open pit. So it is a permanent.
Cosmos: Change the beauty is we're fully permitted for that in Morocco. So there was no waiting time to get a permit I mean, we're fully permitted and we've executed it Ralph and his team have executed this the switch and as I indicated we're currently running at about 1500 tonnes, a day and the <unk>.
Cosmos: And Beth and we've been doing a much better in the underground at 1000 tonnes. A day. So it is a permanent shift of course towards the end or if that second piece.
Cosmos: Piece of this structure is deeper on the west side.
Cosmos: In seven years or eight years, maybe it's going to be only an underground mine, but at that time, we hope that we will have discovered and other is good their lookalike structure.
Speaker Change: Thanks, very much for a very thorough answer I guess reading into your answer here.
Cosmos: My question is.
Cosmos: Is there any kind of potential impact to mine life or does it sound like it because it sounds like theres potential.
Cosmos: Who are converting some of what would have been previously underground ore into.
Cosmos: Into open pit is that am I reading it correctly or.
Cosmos: EUR there will be no impact on mine life, if anything it will increase it with all the new structures that we're identifying it's going to allow us to take some of the pillars that we're there historically that were not taken out.
Cosmos: And then because you know this mine has been in production for 2000 years and.
Eric Lee So the open pit.
Speaker Change: US and Canada in 2022, we were kind of saying why don't we take this whole monitoring down from top to bottom, but in country. This was like Canada No. We don't do this this thing so we kept testing it and pushing it and now we see that it does work and they are now.
Speaker Change: There is another company, which I won't mention on the call, but that I have now also gone to open pit mining for their silver asset. So, it's it's kind of indicating a new trend and the structures are there the grades there.
Speaker Change: The open pit is a lot easier and a lot cheaper.
Speaker Change: Okay great.
Speaker Change: Maybe a question on the recovery bandwidth as you mentioned.
Speaker Change: Press release earlier February recovery was slightly impacted 83% recovery I believe.
Speaker Change: Due to the processing of more oxidized ore.
With more contribution from the open pit.
Speaker Change: Is there any kind of potential impact on potentially more oxidized ore and then.
Speaker Change: Actual impact on recovery for 2025.
Speaker Change: Thanks Oswald.
Speaker Change: Raphael is onsite is there he's he's moved from Montreal to to Morocco is is theyre. Following everything Fas did you get the question would you add.
Speaker Change: Vic.
Answer if you if you did because I know sometimes the line is not great.
Speaker Change: Yeah, Yeah with pleasure, so high cost Hi, Robert Hi, everyone happy to answer that.
Speaker Change: Think of it this way indeed, when we have.
Speaker Change: When we have stripping when we have the.
Speaker Change: The upper section of the open pit and we take that or.
Speaker Change: Indeed, sometimes it comes with a bit of clay material, which has an impact on recovery.
Speaker Change: That is for sure.
Speaker Change: What I have to say about this is any oxidized ore would not have been recovered anyway on the ground.
Speaker Change: So the open pit will give us a bit more oxidized copper than was initially planned however.
Speaker Change: Quite a bit of that.
Speaker Change: Not have been accessible underground anyway.
Speaker Change: So.
Speaker Change: So as we extend the pit and we find these extensor these extensions.
Speaker Change: So indeed the <unk>.
Speaker Change: First one the first one to 10 meters or oxidized and we recover comfortably you know, 80% plus and as out of the pit goes down we'll be able to blend it out and the clay content and they oxidize content that gives us sometimes a bit more trouble on the counter current accommodation.
Speaker Change: Elution washing will.
Speaker Change: It will be blended away and we don't expect on the long term.
Speaker Change: A lower recovery.
Speaker Change: But we do expect more or so so that's a positive thing in the long term recovery of the project is not affected because.
Speaker Change: Ultimately, we get into fresh rock.
Speaker Change: We have more ore and we need to we need to blend it properly and with the stockpile that we have.
Speaker Change: We anticipated that so we are able to blend that better and better as the quarters will go and we will have more fresh rock from the open pit more fresh rock from the underground that we can blend to minimize impact on recovery, but bottom line is.
Speaker Change: When we have or that is part of the stripping.
Speaker Change: It wouldn't have been oxidized or sorry from the stripping it wouldn't have been accessible underground anyway. So this is this is essentially extra ore.
Speaker Change: Great.
Speaker Change: And cosmos in the feasibility study if you recall our target is to bring this plant to $89 90%.
Speaker Change: And then over time and that that still is the target and Thats why our guidance has an upper number of 88%.
Speaker Change: Right.
Speaker Change: Maybe switching gears a little bit just a quick question on the accounting.
Speaker Change: Your share price is kind of weak today I think in large part due to the write down at tinder it.
Speaker Change: And.
Speaker Change: I think it should be taken out for adjusted earnings in my opinion.
Speaker Change: From that perspective, two questions number one was the entire 20 735 million taken out or Expensed in Q4, and then number two if I wanted to take it out or adjustment purposes, I want a tax effected what's the tax affected number.
Speaker Change: That got us most I've got to ask you go is with US here in Montreal to give you the answer yes, Hi Cosmos.
Speaker Change: So yes.
Speaker Change: The entire $27 million was our entire book value.
Speaker Change: <unk>. So today, our book value on Tinder. It is narrow in that entire amount was taken in 2020 or.
Speaker Change: On taxes.
Speaker Change: <unk>.
Speaker Change: The aspects that are in Mauritania. So the project is in Mauritania.
Speaker Change: Don't affect where we generate revenue, which is in Morocco, so theres going be no tax effect.
Speaker Change: Morocco in Canada, though we will have a loss, but that'll come in impact taxes and in Canada. So far we havent made a profit and so as time goes on there is and there is profit from inter creditor loans and everything that come in Canada, we will be able to take some of the losses associated with <unk> as part of that tax offset here in Canada.
Speaker Change: So if I want to adjust your negative <unk> 23 per share in Q4 to a more normalized number I would essentially.
Speaker Change: Back out the entire 2000 and 735.
Speaker Change: Absolutely yes.
Speaker Change: Okay.
Speaker Change: And then maybe one last question I think that while you mentioned adjusted cash cost per ounce $19 62 announced could you give us a bit more color. So I thought coming in it was actually related to this impairment.
Speaker Change: It doesn't sound like it is so how should we use that number.
Speaker Change: Yes Cosmos.
Speaker Change: On that a little bit like like in Q3, I think we had a lot of costs that for us were more associated to to a plant ramp up that we have that we have to expense, but that don't necessarily and we don't see us as ongoing.
Speaker Change: And so it made more sense for us to give a better sense of what our actual costs were draw operating in the current plan.
Speaker Change: To remove that.
Speaker Change: So it's unrelated to deteriorate, it's really our cost our cost our at <unk> and what we thought better reflected in our actual costs versus the additional cost that we have to pass through through opex or David that were more related to ramping up our plant.
Speaker Change: Thanks, So would you.
Speaker Change: Are you expecting to report.
Speaker Change: Cash cost and adjusted cash cost for.
Speaker Change: For Q1, Q2, Q3, 2025 or was idle.
Speaker Change: No no we don't know that commercial production has been declared.
Speaker Change: We don't expect to have specific adjustments to cash cost moving forward.
Speaker Change: Understood.
Speaker Change: Thanks.
Speaker Change: Everyone and thanks for the Hawaiian team those are all the questions I have and have a good weekend.
Speaker Change: Thank you Cosmos.
Speaker Change: Thank you and as a reminder to ask a question. Please press star one on your telephone.
Speaker Change: To withdraw your question. Please press star one again.
Speaker Change: And one moment our next question.
Justin Chan: Our next question will be coming from Justin Chan.
Speaker Change: CPE resource Finance your line is open Justin.
Speaker Change: Thanks, everyone. Thanks pen one team for hosting us.
Speaker Change: My first one is just on the planned through the year I think you mentioned on the call 1 million ounces in Q1.
Speaker Change: Well I think you are trending above that with two months reported so just just curious there if there's anything to no one.
Speaker Change: Like plant shutdowns or anything in March because I think you're on pace for a little bit better than that.
Speaker Change: And then just.
Speaker Change: The trend through the year, I think we understand fairly well on that.
On the production side I'm just curious on the.
Speaker Change: On the cost side, our unit cost side, maybe if you can give us some guidance on it.
Speaker Change: And how to model that.
Speaker Change: So adjusted and Youre right. We had a very strong January we have February that actually per day was quite strong.
Speaker Change: In February though we.
Speaker Change: We did have fewer days and we had a planned shutdown March.
Speaker Change: The numbers are going to be coming out early April.
Speaker Change: March was a little bit more difficult because of some adjustments that they made to the plant and they tried a few things on the recovery. So there's it's just normal normal adjustments. So we know that we're trending.
Speaker Change: Above $1 million or around 1 million for Q1, which was our budget. So our plan is is when we gave you the guidance between five and $5 three it's a ramp up here. So in that vein is onsite and then I'm going to ask him to comment on the ramp up in a minute because youre question is directly related to that but yes.
Speaker Change: We're fixing things we're doing some programming is is adding some chemicals changing.
Speaker Change: We're working on the perfect recipe because we want to be in Q3 Q4 on a much higher run rate much higher recoveries much lower cash cost. So and this is the reason why we gave you 15 to 17 five on an average so.
Speaker Change: And we believe that Q4, we're going to be below 15 on a cash cost basis. So it's just a matter of being conservative and giving you a bit of.
Speaker Change: Real predictability, but so yes, technically we could have been in March a little bit higher but there were some some adjustments that were made by the team, which we're absolutely normal and in our planning and in our budget I mean, Q1 will be a little bit better than our budget and our planning. So we are.
Speaker Change: Are there in and the cash cost of course is going to be a little bit higher at the beginning and it will be coming down below 15, hopefully for Q4.
Speaker Change: Gotcha.
Speaker Change: I spent a lot and in terms of.
Speaker Change: Maybe just on screen Dara exploration and also as it relates to mine plan and a potential expansion.
Speaker Change: They are still looking at looking at your long section there is a lot of.
Speaker Change: There's still a lot of drilling potentially below where your resources are to that so the depth and figure on it.
Speaker Change: Curious.
Speaker Change: Yes.
Speaker Change: Maybe for a potential expansion if that is if that is.
Speaker Change: Something you are considering as they're announced target you'd like to see.
Speaker Change: And.
Speaker Change: And in terms of access to get the drills in there to drill out <unk> at that.
Speaker Change: Do you feel like you've been able to prioritize that more or is that something to expect more throughout this year.
Speaker Change: So adjusted the access was bills last year, so we haven't been drilling.
Speaker Change: We have not yet updated the long section, but the white part that is below the level of 19, 50% or 1925 going all the way to under the grant most of that has been drilled now you see some drill results and we will update that over the summer, but we have been reviewing all of this.
Speaker Change: Getting some very nice very nice mineralization and.
Speaker Change: So thats being drilled and the access is available.
Speaker Change: We do we will do a resource update did over to over to summer I would say and yes, absolutely. We expect to increase our resource we expect to as we told earlier that the mine life is also going to be expanded and we will we don't have a new bill.
Speaker Change: This model and business case undergone there available in.
Speaker Change: In Q3 Q4 four.
Speaker Change: For the market and for everybody. So it's being done maybe I can ask David who is online at the comment about about the this section to the bottom David and what Youre seeing now adds going there on the extension to the western to the east.
David: Yes, with pleasure a larger adjustment.
Speaker Change: Most of the drilling has been done last year.
Speaker Change: We got the exploration gallery and drift ready for drilling so we've almost completed all the drilling.
Speaker Change: There is a tiny bit so drilling left to do at the bottom part of that.
Speaker Change: Deposit.
Speaker Change: And the idea of enrollment soon is to update the resource later this year with all of the information.
Speaker Change: <unk>.
Speaker Change: What we're seeing.
Speaker Change: Exactly the same.
Speaker Change: The mineralization that the rest of this without deposits.
Speaker Change: So very wide mineralization.
Speaker Change: Some pockets of very very high grades.
Speaker Change: You can see them in the last press release.
Speaker Change: Incredible.
Speaker Change: Results in silver assays.
Speaker Change: So we basically expect similar type of resource.
Speaker Change: Our resource as the rest of the deposit.
We didn't see any surprise besides that it's nice and rich all the way down to the bottom of the grammar.
Speaker Change: So that's great to hear.
Speaker Change: I guess in terms of.
Speaker Change: That's when you have an updated.
Speaker Change: Resource, which will give you more life I'm curious if there is thoughts towards doing an expansion.
Speaker Change: Okay.
Speaker Change: Well when we have the resource yes, sorry go ahead David.
David: I'm basically, saying what you say all the time.
David: Places very tightened scream that so expansion of the mill.
David: We've mostly put the focus on finding satellite deposits trucking distance from skin bar to allow some places to bring ore to the mill.
Speaker Change: Okay. Thanks, that's very helpful and then.
David: Just one on this year in terms of.
David: And in terms of capital our sustaining capital outside of your cash cost guidance just curious what.
David: What would be a reasonable number to expect this year.
David: The capital in our budget is $7 million.
David: Kevin Okay.
David: <unk>.
David: Okay. Thanks.
David:
David: That's really helpful. Okay.
David: I've taken up the line for quite a while but thanks very much guys I appreciate it.
Speaker Change: Looking forward to seeing you ramp up this year.
David: Just maybe one last one sorry to do this everyone else on the line.
Speaker Change: The status of the paste plant.
David: I remember late last year that was that was.
Speaker Change: Maybe a factor in.
Speaker Change: Controlling access to some of your higher grade secondary is I'm just curious if that's.
Speaker Change: That's up and running and if that if we should expect to see some better grades as a result of that.
Speaker Change: Yes.
Speaker Change: Do you want to comment on the base plant in there and maybe also comment on the ramp up because the first question was related to that and and you're the best person on site to comment.
Speaker Change: Yes, absolutely.
Speaker Change: Absolutely absolutely so.
Speaker Change: Cement plant is up and running all the piping is done and it has been used to backfill some of the stopes that we wanted to continue develop.
Speaker Change: So, that's where I'm going and as we extend the pit.
Speaker Change: It will be moved through the year, but it won't affect it.
Speaker Change: Affect our operations in.
Speaker Change: And as for it to ramp up Benoit mentioned it earlier, we wanted we wanted to reach a higher rate in Q1 to minimize the draw on their stockpiles and that's going well I mean in general area on total mining rates with it about 1600 in January and February over 2002 <unk>.
Speaker Change: <unk> and for March were well on track for close to 2500, so the ramp up has been impressive.
Speaker Change: We'll continue.
Speaker Change: Okay.
Speaker Change: Thank you.
Speaker Change: Hey, Thanks, guys, thanks, very much and I'll flip a lot.
Speaker Change: Thanks, so much for your time.
Speaker Change: And there are no. Thank you question.
Ben Locke: I would now like to turn the call back to Ben Locke for any closing remarks.
Ben Locke: Thank you operator.
Speaker Change: The 2024 was a very busy year and construction and ramp up of the.
Ben Locke: The underground and the ramp up of the open pit.
Ben Locke: Most companies when they do that are not in production. So they don't report any cost the capitalized everything.
Ben Locke: Due to the fact that we have two plants running at <unk> and we are in operation and we do pay taxes in Morocco, a lot of expenses are a lot of costs were put through the expenses, which had a direct effect on our cash costs and all in cost you also see that on our balance sheet, we added 3 million.
Ben Locke: Receivable tax receivable from the government because we put through these expenses and we had less income in the country.
Ben Locke: We are now waiting for a $3 million refund. So it's hard to predict $2025 to $1 26 based on 2024, because contrary to the industry. We know we were very very conservative in what we capitalize and we were expensing as much.
Ben Locke: As possible, but the guidance is very clear and is very conservative is we are now heading into a beautiful year.
Production and the team is on site, we will do between five and five three we will minimize our cost and thats something that were always watching to have the best cash cost possible.
But for US as you use you see overtime, our ASIC is very close to our cash cost because the sustaining capex is extremely low so when we go from a $14 cash cost that we have a <unk> <unk>. So that's the beauty of this project is that a lot of the development is done.
Ben Locke: And the AC costs, it will be very close to the cash cost the recoveries, we talked about that our aim is to be <unk> 80, 990%, which again for a silver mine is very very good. The plant is a very well built it's brand new it's operating very well and we.
Ben Locke: We have the open pit, that's giving us beautiful production and so that for Al just said, we're running in March 2006 hundred global which is a 1600 coming from the open pit where degrade as much better and were.
Ben Locke: We're running at a 1000 ton per day on the underground where we are now focusing more on grade and tonnage and which is also helping.
Ben Locke: With this and with one of the largest exploration program in the industry with a goal to drill between 150 and almost 200000 meters.
Ben Locke: That's good and that has grown their regional and that's <unk>.
Ben Locke: It's a unique value creation proposition, where so far our discovery costs at <unk> has been extremely low around 10 cents.
Ben Locke: An ounce of silver and we hope that we will be continuing this in the coming years. So 2024 was a construction year with a development here 2025 is the ramp up we are.
Ben Locke: Making very good money, we sold silver yesterday at 34 19. Thank you Hugo 34 19, you also saw further ones. We look at the financial statement that we did not sell.
Ben Locke: The ounces at the end of the year, we kept them in inventory so.
Ben Locke: There is 130000 ounces that were pushed over to Q1 that were kept in inventory. We are extremely good at selling at the best price possible. If we don't like the price we do not sell obviously it has an effect on our financial statement. So technically there was 130000 ounces.
Ben Locke: That were sold in Q1 at a much better price. So we followed this closely we are producing.
Ben Locke: Close to 15000 ounces a day right now.
Ben Locke: We are in production our costs are well controlled our selling price is currently $34 and up. So we are generating very strong cash flow and that will continue Morocco is still an amazing country to operate in with fantastic mining.
Ben Locke: Code Fantastic people around US you see it at <unk>. They are supporting US we've been able to acquire like 18 permits very quickly.
Ben Locke: We know that for 2024, it was a transition year, but we expect a very very good year. In 2025. Thank you to all of you are following us. Thank you to all the analysts who are covering us.
Ben Locke: And you always.
Ben Locke: Can communicate with the team Alex and myself are on the road, 80% of the time, probably so we do.
Ben Locke: Pay a lot of attention to our market and to our shareholders. So thank you very much we will see you in may.
Ben Locke: When we will be reporting Q1, and also at that time, we will be able to give a little bit of guidance on how the ramp up is going thank you very much.
Ben Locke: This concludes today's conference call. Thank you for participating you may now disconnect.
Ben Locke: Okay.
Ben Locke: [music].
Ben Locke: Yes.
Ben Locke: Yes.
Ben Locke: Yes.