Q1 2025 Agnico Eagle Mines Ltd Earnings Call
Hello everyone [inaudible]
Ludi: Good morning. My name is Julian Alvier, conference operator today. At this time, I would like to welcome everyone to the Niko Eagle Mines Ltd. 21 2025 conference call. All lines have been placed on neutral prevent any background noise. After the speakers remarks, there will be a question in answer session.
Speaker Change: If you would like to ask a question during this time, simply press a star followed by the number one on your telephone keypad And if you would like to withdraw your question, you may press a star followed by the number two Thank you Mr. Ammar, Al Jendi, you may begin your conference
Speaker Change: Thank you operator. Hello everyone and thank you for joining our first quarter conference call this morning.
We're pleased to be sharing with you another strong quarter.
with solid results across the board. [inaudible]
Speaker Change: Strong production, excellent cost control, record financial results, excellent progress on our growth projects including our five key value drivers and some really great exploration results at a number of our minds.
Speaker Change: Before we jump into the call, I'd like to remind everyone that we'll be making a number of forward-looking statements, so please keep that in mind [inaudible]
Speaker Change: As we go through the results of the quarter, there are three key messages we want to emphasize. One, we continue to deliver strong overall performance and we're well positioned to continue to deliver that performance for the rest of the year.
Speaker Change: 2. We continue to strengthen all areas of our business and 3. We're making great progress on building the foundations of our future growth and future value creation for our owners . . . . . . . . . .
Starting with our first quarter operating in financial performance.
Speaker Change: In a year where gold prices have increased by over $1,000 an ounce, our gold production of 874,000 ounces and our cash costs of $903 per ounce were almost identical to our production and cost numbers in the first quarter of last year.
Speaker Change: This means we are delivering the full benefit of these rising gold prices to our owners.
Speaker Change: That's why our owners invest in us and that's our job to deliver. We do this by delivering solid production and controlling costs, safely, responsibly and reliably.
Speaker Change: Not surprising, with good operational performance and record gold prices, we continue to deliver record financial results.
Speaker Change: Record Operating Margins, Record Adjusted Net Income, and not just on an absolute basis, but also Record Adjusted Net Income on a per share basis.
Speaker Change: It's the per share metrics that matter, and it's the per share metrics that we will always focus on
Speaker Change: The second key takeaway is our progress in strengthening the business.
Speaker Change: This quarter, we've returned a quarter of a billion dollar store owners through dividends and share buybacks [inaudible]
Speaker Change: At the same time, we've invested in moving forward the best pipeline in the business, we've made record investments in promising exploration and we've largely eliminated our net debt. We continue to generate record cash flows and we're well positioned to further increase returns to shareholders. Thank you very much.
Jamie will be going through our financial performance shortly. Thank you very much.
Speaker Change: The third key takeaway, building the foundations of our future growth is really the most important and the most exciting takeaway from today's call.
Speaker Change: An essential element of any quality business is sustainability. This is especially true for a company like Agnico Eagle, where our core strategy revolves around building a long-term, high-quality, sustainable business in the regions in which we operate.
Speaker Change: We're proud to have just published our 16th Annual Sustainability Report, the highlights of which Carol Plummer, our EVP people, environment and sustainability, will briefly review in a minute.
Speaker Change: A little later in the presentation, Dominic and Natasha will speak about the steady progress we continue to make on our five key value drivers
Speaker Change: 2. Our vision to get melodic to over a million ounces a year
Speaker Change: Number three, excellent construction progress at Upper Beaver, a brand new mind and a great region as that could add over 200,000 ounces a year.
Speaker Change: Number four, continued great drill results and accelerating on-site activity at Hope Bay with a target of over 400,000 ounces a year . . . . . . . . . .
Speaker Change: and finally five continued good progress at San Nicolas, a high grade, high return copper project in the best mining jurisdiction in Mexico.
Speaker Change: Thank you, Ammar, and good morning everyone. Our 2024 Sustainability Report highlights our global approach and regional focus.
Speaker Change: Starting with safety, we continue to our journey towards zero accidents, focusing on visible felt leadership in the field and identifying and mitigating risks [inaudible]
Speaker Change: 2023 was the best year for safety in the company's history and in 2024 we did not do quite as well [inaudible]
Speaker Change: However, all of our sites are focused on reducing harm and we will continue to focus on safe work in every job every day
Speaker Change: Our approach to climate change continued to focus on energy efficiency, technology transition, and increased use of renewable energy. And we remain amongst industry leaders with a GHG intensity of 0.38 tons of CO2 equivalent per ounce, well below the industry average of 0.79.
Speaker Change: We're working to meet our commitments to reconciliation through the seven pillars of our Reconciliation Action Plan, and we are focused on training and developing our employees, listening and resolving concerns and engaging frequently, preparing our employees and our sites to succeed.
Speaker Change: We're very happy to see improved engagement through our employee survey and importantly, low turnover rates [inaudible]
and with that I will pass over and drink.
James: Thank you, Carol, and good morning everyone. We had a great start to the year with another quarter of strong operating results, an excellent cost performance, pairing with higher gold prices to drive record financial results, including record revenue of $2.5 billion. Thank you.
James: Record Adjusted Earnings of $770 million, or $1.53 per share, and Record Adjusted EBITDA of $1.6 billion.
James: Gold production in the first quarter was approximately 874,000 ounces, a total cash cost of 903 per ounce, and all in sustaining costs of $1,183 per ounce and a total cash cost of 903 per ounce, a total cash cost of 903 per ounce, a total cash cost
James: Gold production was very similar, as Ammar mentioned, to the first quarter of last year. We pleased to report that costs were below the low end of our guidance ranges and actually right around where we were in the first quarter of 2024. 24.
James: The lower than expected cash costs were primarily due to higher than expected grades, driving higher gold production at several of our minds, as well as the cost benefit from the weaker Canadian dollar relative to the US dollar, when compared to our budgeted assumption of 138.
James: These cost benefits were partially offset by higher royalty costs related to higher gold prices, and in a rising gold price environment we do expect the burden of royalty costs to continue to increase. Every $100 increase in the gold price increases our royalty cost by approximately $5 an ounce.
James: For the full year, we are maintaining our cost guidance and expect cash costs to be within the guided range of 915 to $965 per ounce
James: All in sustaining costs per ounce were lower than the guided range, primarily due to the timing of sustaining capital spend. We are expecting higher all in sustaining costs and subsequent quarters and expect to be within our guidance for the full year at 1250 to 1300 per ounce.
James: We're very proud of the work our teams have done and their continued efforts at controlling costs and on continuous improvement as our all in sustaining cost continued to be hundreds of dollars per ounce below those of our peers [inaudible]
James: We move on to the next slide. Please report that the strong free cash flow we generated this quarter allowed us to continue to strengthen our balance sheet and increase our financial flexibility. We ended the quarter with close to zero net depth.
James: As a reminder, we've started 2024 with approximately 1.5 billion in that debt. We have significantly the de-leverage the balance sheet over the past 15 months and intend to continue to strengthen the balance sheet and improve our financial flexibility, while increasing returns to shareholders.
James: We were also pleased that Moody's revised its rating outlook for the company during the quarter from stable to positive, which reflects our improving credit profile and strong financial position.
James: We generated 594 million of free cash flow in the quarter, which was net of significant working capital outflows, including tax installments and payments of over 500 million. At current gold prices, we would expect significantly higher free cash flow in subsequent quarters.
James: We move on to the next slide. Looking back at 2024, we clearly prioritize returns to shareholders.
James: Through dividend share repurchases and the reduction of net debt, shareholder's benefited directly and indirectly by approximately 2.2 billion In 2024, we returned approximately 43% of our free cash flow directly to shareholders through dividends and share repurchases through dividends and share repurchases and the reduction of net debt
James: This quarter, we return to approximately 42% of our free cash flow.
James: Our capital allocation plan is designed to benefit shareholders in a rising gold price environment in several ways. We will continue to strengthen the balance sheet, increase our financial flexibility, as we believe that a strong balance sheet is a competitive advantage in this industry.
James: We will also continue our program of strong shareholder returns through the quarterly dividend and share repurchase At these gold prices, we see that the potential to further increase shareholder returns and expect to be much more active on the share buyback We will continue our program of strong shareholder returns and expect to be much more active on the share
James: We will also continue to reinvest in the business by allocating capital to high return internal growth projects and high potential exploration opportunities.
James: At current gold prices, we're generating a lot of cash, but we will remain disciplined to continue to take a measured approach to capital allocation with a focus on increasing return to our shareholders.
James: With that, I'll turn the call over to Dominique who will provide an overview of our Quebec, Nine of it and Finland operations
Thank you Jimmy, good morning everyone. Good morning.
James: We finished the quarter strong out of the gate, driven by operation, meeting their target safely, and help with just geological upside that LaRone and at Marartic Pit, where additional answers were discovered around the old workings.
James: In Q1, Miladine achieved a new tonnage record following last year mid-expension, averaging 6,200 tons per day
James: On the cut side, as Ammar mentioned, the quarter was excellent with stable to slightly better cut than expected thanks to the team's continued effort to improve productivity.
James: This quarter, I would like to highlight Kitty Loss progress, focus on the shaft utilization and systematic productivity and cost efficiently improvement.
James: We are starting to see positive results from this initiative with cost per ton coming in 5% below target in Q1.
James: Looking ahead, there are three key projects that I would like to highlight today. These projects are closely tied to Ammar's comments about leveraging our assets to create value. First one is the middle bank potential expansion.
James: We continue working to extend middle-bank life of mine beyond 2028 Our objective is to transition middle-bank mine into another mine only after that the pits are depleted We continue working to transition middle-bank mine into another mine only after that the pits are depleted
James: Aiming to add five to six years of production at around 150 to 200,000 ounces per year.
James: Given its location in Nunavut, this will not be the lowest cash cost ounces, but in today's gold price environment and the low risk associated with this, we are evaluating different scenarios
James: On top of that, the team is also working on a new scenario of doing a small pushback at the IV arctic, to funditially unlock additional answers in 28-29
James: Reconising this potential, our side team actively developing a plan to maximize middle bank potential, creating a seamless bridge to future production at OBE, which is my next project to discuss.
James: Opportunity we have into our portfolio that could add 400,000 ounces per year in the 2030.
James: Hope A-PAP to success is clear. We are applying the same proven formula that led me lead into success, with the same experience team that conducts the study and the project construction.
James: This quarter will successfully finalize all the contracts with the engineering firm and we believe we have assembled at 18 The goal is to advance the detailed engineering phase to approximate the 50% completion by Q126
James: Given our confidence with the project, we are currently doing some preparation work outside by upgrading the camp facility, extending the airship, dismantling the mill, and completely early work.
James: We expect to report on Hope Bay in the first half of 2026.
James: The last project update on my side is about our vision of more or take towards 1 million ounces.
Gold Producer, next slide please.
James: To achieve our 1 million ounces production at Monarchic, we identify four key blocks.
The first building block is...
James: The Foundation, the current ADC Phase I project transforming the site from the Canada's biggest open pit mine to the largest underground mine, gold mine in Canada.
James: The target is about $550,000 per year for this part, and the project is progressing very well. The ramp is on target, the shaft sinking as well, and we reach a major milestone .
James: in Q1, achieving the commissioning of the temporary loading station at levels 64, unlocking efficient transportation of rock and personal via the service oil.
James: The first shaft is expected to be completed by mid-27. The second block for that one million months' story [inaudible]
is the second shaft at ODC.
with the Promising Results.
James: We see an exploration. We are evaluating the possibility of a certain shaft to mine in parallel to the first one. The massive is-goody or body
James: The second shaft could contribute to another 220,000 answers per year, which brings us to 770,000 answers per year for the ODC project.
James: There's two other blocks that we could lock on that. The first one of those, or the third one, is the Marband Pith, located 13 kilometers from the Marlartic Mail.
James: Marban was, uh, successfully add to our portfolio through the acquisition of O3 and could potentially contribute to another hundred thousand, thirty thousand ounces to year, which bring us to the nine hundred thousand. And the last one is Wesamack. Wesamack is a three hundred, three thousand ton per day underground operation to be trucked. [inaudible]
James: at Marlartick, it is about 100 kilometers from Marlartick, Wes Amack can potentially contribute to another 100,000 years per year.
James: With all of the four building blocks together, we are reaching the one-in-million ounces vision.
James: Over the next five to six years, our focus will be on the studies, permitting and construction aiming to integrate these new ore feed into the malarctic meal in the 2030s.
James: We should be in good position to green light the second shaft more ban in Wasamac in early 2027.
Now I would like to end it over to Natasha. .
Thanks, Tom, and good morning, everyone. [inaudible]
Natasha: So, cover the operational highlights for Ontario, Australia, and Mexico to go.
James: All the regions delivered good, safety, operating and cost performance to start off the year. Detour, poured the 7th millionth ounce in March and had the highest Q1 mill throughput with the lowest turnover seen since the mine began open pit operations.
James: Whether however was challenging this quarter, we do factor in whether delays into our plans particularly in the winter but this was a very abnormal winter for us at detour. So this quarter we ended up mining less of the higher grade open pit material and instead fed lower grade stockpile which was planned to be processed later in the year.
James: Now at Macassa, we hit a few records in safety, in lateral development, and in ounces produced. But I think the highlight is that similar to detour even in a highly competitive labor market, we hit a record with the lowest turnover in its history.
James: and in terms of the production, Macassa had a pretty strong quarter to on the back of two stops that overperformed. [inaudible]
James: Fosterville, too, had a good quarter. Here we're working on progressive improvements to the ventilation system and production is progressing at all three mining funds. [inaudible]
James: And of course, operational improvement efforts with a focus on cost control initiatives are continuing at all of our sites [inaudible]
James: Now, if we look ahead, we're seeing a few exciting things on the go. I'll start with Mekasa. We're focused on mill optimization here, so we'll continue to work on initiatives, the debogging leg parts of that circuit, reduce downtime, and further improve the mill throughput incrementally.
James: I foster bill will continue to conduct further technical evaluations and drill to confirm the feasibility of increasing the annual throughput to an average of approximately 175,000 ounces.
James: And at San Nicholas, through the JV, we will continue to work on the feasibility study. Project approval is expected to follow, of course, dependent on the receipt of the permits and the results of the study. We anticipate all of this coming together towards the end of this year. We anticipate all of this coming together towards the end of this year. We anticipate all of this coming together.
James: And finally, on the next slide, I'll give you a quick update on the two projects that will give us the opportunity to grow low risk and profitable production in a very mining friendly jurisdiction like Ontario.
James: and I'll start with Detour. This is a world-class asset. Last year we outlined a pathway for Detour to be a 1 million ounce producer annually for over a 14-year period. [inaudible]
James: It's still early days, but this quarter, the overburden excavation was completed, the surface preparation was completed As well, we received the permit to take water so we're expecting to commence the ramp development in Q2
James: As for our beaver, again, this is another low risk opportunity to grow the production profile in Ontario. This quarter we continue to advance on both fronts, the surface setup needed for shaft syncing and the site preparation for the ramp.
James: You can see in the picture that we've started advancing on the steel installation of the head frame and the hoist room. We're expecting both of them to be completed or commissioned in early Q4 this year and shaft thinking to commence to now. Okay.
James: That's for the exploration ramp. We've completed the box cut. We're expecting to commence the ramp development in Q4 this year if not a bit sooner.
Guy: Both Detour Underground and Upper Beaver, they're really solid projects with strong, risk-adjusted returns and are going to be drivers or future growth at our Ontario platform. And we look forward to continuing to advance on these projects throughout 2025. And with that, I'll pass it over to Keith.
Guy: Thank you, Natasha, and good morning, everyone. First, on flight 12, I would like to take the opportunity to highlight the various exploration team at each mine and project site for our great health and safety performance, cost control, and productivity improvement initiative.
Speaker Change: When we look at the landscape in these photos coming from OBAY, we realize that it is a tough environment and our people are doing an amazing job at working safely while implementing cross-control and productivity initiatives [inaudible]
Speaker Change: Overall, we had an excellent first quarter with 300 kilometer of drilling completed on all sides.
with a focus on advancing our key value driver project.
Speaker Change: Here, I told B, we delivered better than budget and drilling, with almost 30 km of drilling completed in the first quarter from high space drilling and from the exploration gravel track. That has greatly an end, our site performance in Q4 and Q1.
Speaker Change: Globally, we have a total of 112th row rig working on all sides of the company.
Speaker Change: I would also like to thank our drilling experience team that continue to work closely with all of our drilling entrepreneur to integrate new technology that will make drilling safer, more productive, and therefore more cost efficient.
Speaker Change: From a result standpoint, I will briefly comment on three projects, O.B., Candidum, Morartic, and Detour
Speaker Change: Sons like 13 at OB, we continue to see strong results in two very interesting areas.
Speaker Change: First of all, close to surface and patch driven, which results up to 20 gram over 4.2 meter at only 240 meter below surface That could potentially be accessible early in our project development scenarios What are you?
Speaker Change: and secondly, in the gap between Sulok and Patch, close to the proposed ramp with result up to 24 gram over 9.5 meter. We anticipate these results will have a positive impact on the mineral resources at the next update.
Speaker Change: Now, on slide 13, in Maritik at Odyssey, some very exciting results in three areas. First of all, the upper east portion of the East Gouldie that we anticipate will get to mineral reserves at year-end this year.
Secondly...
The Lower Eastern Extension of East Goldie.
Speaker Change: with some pretty good result up to 5.3 gram over 27 meter, 6.6 gram over 17 meter, a couple of 100 meter to the eastern limit of the current resources and all of that between 18 and 1900 meter bellows or face
Speaker Change: and third in the A-clips parallel zone with result of 2.3.7 gram over 59.7 meter. These strong result in the lower east and eclipse continue to end our scenarios for the location of the second shaft at Odyssey.
and last but not least, a detour.
Speaker Change: Drilling continued to infill the deposit in area that are targeted for the underground mine project, both below the pith in the saddle, in the central portion of the deposit, with some local, very spectacular result of two 8g over 78m, and to the west.
Speaker Change: Closed next to the plan exploration ramp, with result up to 3 gram over 44.5 meter
Speaker Change: So we are, we add a very good start of the year in general drill result on our key value driver project and we are on a very good position to deliver update on studies as discussed in our previous press release in February and mentioned by Natasha and Dominique [inaudible]
Ammar Al-Jandee: So on that, I would like to return the microphone to Ammar for some clothing remarks
Thank you Guy and thank you to the full team.
Ammar Al-Jandee: The gold price performance over the past year has been remarkable. [inaudible]
Ammar Al-Jandee: Our owners invested in gold because they had the correct view that gold prices would increase.
Ammar Al-Jandee: and our owners invested in us because they had the correct view that Agnico Eagle is well positioned to deliver the full benefit of gold price increases to them.
Ammar Al-Jandee: To deliver that full benefit, we focused on three things and we've delivered three things [inaudible]
Ammar Al-Jandee: One is production. We need to deliver the production we promised, and we need to be able to grow production per share over time. And we're doing both.
2. We need to control costs.
Ammar Al-Jandee: We're delivering not only solid cost control, but we remain disciplined with capital spend. The projects we're investing in are all expected to generate good returns [inaudible]
Ammar Al-Jandee: and they're the same projects that made sense at gold prices more than a thousand dollars below where they are now. This is our owner's money and we're not going to spend our owner's money just because the price of gold went up. [inaudible]
and Third,
Ammar Al-Jandee: This is important. We need to deliver this production and we need to deliver these costs reliably, steadily and with as little risk as possible.
Operational Risk,
Financial Risk
Political Risk
Ammar Al-Jandee: We are going to stay with the same strategy that we've used now for almost 70 years.
Ammar Al-Jandee: It works for us, it's not for everyone, but it works for us. We're going to focus on regions with multi-decade geologic potential and with the political stability that allows us to fine-tune our strengths over multiple decades. [inaudible]
Ammar Al-Jandee: if we take a look at just some of the discussion today. Okay.
The team that's building the shaft at Mallardic.
Ammar Al-Jandee: It's going to be the team that builds the shaft at Upper Beaver. The team that's building Upper Beaver is the same team that just finished construction projects elsewhere in the company Dominique made the point.
Ammar Al-Jandee: that the team building hope is the same team that built melodic and something that's really important that Natasha mentioned which I think really sort of emphasizes this.
Ammar Al-Jandee: We have the lowest turnover rates ever in the history of detour in Macassa This is how you build a competitive advantage, you not only leverage off your capital assets but you keep the best people and you use them to their full extent [inaudible]
Ammar Al-Jandee: So with that, I'd like to turn it over to questions.
Speaker Change: Thank you, and ladies and gentlemen, we will now begin the question and answer session. To ask a question, you may press a star followed by the number one on your cell phone keypad. If you're using a speaker phone, please speak up your hands as before pressing any keys.
Speaker Change: To withdraw your question, please register, followed by the number two. And with that, our first question comes from Delina, Ralph Profiti, Woods, people, please go ahead.
Ralph Raffitti: Thanks operator and good morning Ammar, thanks for taking my questions [inaudible]
Speaker Change: You know, it's very encouraging to see some of these internal zones start to bear fruit that Canadian melodic and, you know, the number two point on the field of middle strategy slide. You know, sort of talked about this, this second shot and just wondering how. [inaudible]
Speaker Change: How the medium term mind planning and the shaft positioning might be impacted by eclipse, it does seem like eclipse maybe closer in proximity to existing ramp at the structure and just wondering where where this potential, you know, exploration proves out how that might fit into the medium term mind plan.
Speaker Change: I just don't speak English. It's going to be more, let's say, in the more mid-long term thing because it's more deep but this is really a zone which is going to help for the second shaft. [inaudible]
Speaker Change: But there's also some upside that we're not talking or maybe give briefly talk at the upper east of East Goody and also some internal zone at Odysseus, Out of this north that we're still working on that could bring financial answers in 27-28 [inaudible]
Okay, that's encouraging thanks. [inaudible]
Speaker Change: The drilling at Marben, 24,000 meters, just wondering are we looking at infill resource expansion and would it be too soon to expect updated resources in the year in 25 reserve update? [inaudible]
Speaker Change: My first snapshot of what it could be as we took over the project.
Speaker Change: But that new drilling is dedicated to fully investigate the Eastern Extension because one of the fact over there is the PIP as O3 was looking at it was property boundary constraint with land that Agnico already owned in the Eastern portion of the deposit. And that's the end of the video.
Speaker Change: So we see some outside of it there and at first phase of drilling is aiming to make a first kind of test of the shallow portion of that eastern extension on the claim that we already had [inaudible]
Speaker Change: and after that we'll see. So I think we can anticipate the first update of Marban Reserve and Resources at the end of this year.
Speaker Change: and maybe a second update by the end of 2026, which will be, let's say, most likely, the scenario will be developing, but we want to provide, let's say, step by step, as is, and with another first phase of drawing at the end of 2026.
Great, yes, excellent, thank you for those answers. [inaudible]
Speaker Change: And your next question comes from the line of Josh Wolfson with RBC Capitol Markets, please go ahead
Josh Wolfson: Is there any ability to leverage some of the understanding here for what the potential of second shafts could be in the current design for the initial shaft and maybe look at re-evaluating some scope changes and accelerate a second shaft and at along those lines just understanding the timeline today what you think is as reasonable to think about for that second shaft? [inaudible]
Thank you.
Josh Wolfson: Josh, that's a very good question. In fact, we are evaluating, right now, should we go deeper with the first shaft because it is extending deeper and it's also in parallel looking how deep we go with the second shaft or not.
Josh Wolfson: For the second shaft, we need we're looking for two million ounces in inferred. This is what we're looking for so far the drilling is very positive so it makes sense but the second shaft is going to target going to be also to be a product on shaft so cheaper and easier to do. That's what we're looking for right now.
Speaker Change: God, I'm sorry, the time frame that you think would be reasonable to think about the second
We're talking in early 2030s.
Speaker Change: Good, thanks. And then on some of the metal bank opportunities you mentioned for the IVR pit pushback and potentially the underground expansion, what would be the kind of rough capital numbers that would be reasonable to assume there? Thank you.
Speaker Change: I don't have the numbers but that's going to be no big number because it's going to be just some stripping and development, as we already have all the facilities like the camp, the meal, the roads, so...
Speaker Change: But I don't have the number. But it's an important point because, [inaudible]
Josh, this will allow us to extend the mine life.
Speaker Change: with relatively very small capitals. So Dominique made the point that these aren't going to be cheap cash cost ounces, but they're going to be, I think, exceptional return on capital ounces. And that's really what matters. Sorry, don't. Yeah, just maybe something to add that we didn't talk with. [inaudible]
Speaker Change: Extending the meal, it's also meaning or the meal the mind.
Speaker Change: that he's going to keep drilling. So, that also brings an interesting opportunity to eventually find more and to keep that running. So, I'm very excited about that. It's a very great news and the team art is doing a wonderful work on that.
Great, thank you very much.
Speaker Change: And your next question comes from the line of Anita Soni with TIBC World Market, please, go ahead.
Anita Soni: Hi, good morning, Ammar and team, and congrats on a good strong result and congrats you're in play to delivering that result to shareholders.
Anita Soni: The first question that I have is with respect to the cost.
Anita Soni: The human below the bottom end of the cost-guards range for this quarter and you're maintaining the cost-guards for the year. Can you?
Anita Soni: It's an idea of where you're seeing the cost evolving over the course of the year to get to that higher amount.
Anita Soni: Yeah, thanks Anita, it's Jamie. Yeah, we came in at 903 in the quarter below the low end of our guidance, which is 915-965 [inaudible]
Anita Soni: We did benefit from the weakness in the Canadian dollar. I think the average, Canadian dollar average, 144 in the quarter, we had some hedges in place, so our realized FX rate was 142, much better than the 138 that we budgeted, so that was a big contributor. Really the overperformance in terms of production obviously increased the denominator and that helped as well. So we'd expect cost to go up.
Anita Soni: and B. Fairly Constant throughout Q2 through Q4. And so just to repeat a point we've made many times...
Anita Soni: When you have a good operating quarter, you have a good cost quarter, and the team delivered a great operating quarter, let's hope they continue to do it for the rest of the year, but for now we're maintaining our cost guidance.
Anita Soni: So that's basically if you continue to assume an even sort of mid even divide by four on the mid point of your original guidance or your guidance range then that would put you back into the
and into your cross guidance range.
Anita Soni: Yeah, and at an exchange rate of 138 and a bunch of other assumptions. That's why...
Anita Soni: It's a great start to the year. We're delighted you always want to be off to a good start but it's still early in the year. So we expect to have a good year. We're very well positioned to have a good year and we're going to keep working hard. [inaudible]
Speaker Change: So obviously, in order to make a more robust case for the second shaft, we would like to see like for the first shaft in area with about an average grade, an hour to three grams that will be, and we're getting there and you see those, even those recent step out, that depth where we got some better than average grade with good thicknesses and those resulting in these goldies, all of that is shaping up to define that two million ounces.
Speaker Change: that better than average grade that Dominique is talking about and when you look at a location to the east. So,
Speaker Change: So I think it's a matter of getting the drill spacing and some of those are whole are quite long So it takes some time to get the right drilling pattern to firm up sort of under a study
Speaker Change: But I think we're winning reach, you know, is it a matter of maybe a year to get all of that drilling and good shape and we'll be able to firm up the scenario where exactly it should go but it smells good based on the high grid result we're getting in the East flank.
Speaker Change: All right, that's all for my notes, smells good. Thank you. Thank you.
Speaker Change: And your next question comes from the line of Daniel Major with UBS. Go ahead.
Speaker Change: and indicated an upscaling to the pace of the buy back. Is there any reason we should expect you to move into a meaningful net cash position or should we basically assume the majority of...
Cassius Return to Shelders, and how are you feeling around? Um...
Speaker Change: The balance between special dividends and buybacks is all buybacks, so would you consider a special dividend as a part of the distribution mix?
Speaker Change: Yeah, thanks, Dale, for the question. I think, you know, as I indicated in my comments on the call, we're focused on
Speaker Change: Certainly increasing returns to shareholders but also continuing to strengthen our balance sheet and improve our financial flexibility. So, you know, we're comfortable getting to a net cash position and comfortable at a net cash position, you know, north of a billion dollars. We think that's a true competitive advantage in this business.
Speaker Change: In terms of the shareholder returns, I think we're going to do more on the share-by-back. That's it.
Ammar Al, Dominique Girard, James Porter
Speaker Change: The dividend policy based on that, but certainly an uptick in share repurchasing the quarters to come. You know, I'll add it to Ammar here.
Speaker Change: At these prices, Agnico Eagle and frankly a lot of our peers should be making a lot of money. We should be generating a lot of cash and that cash belongs to our owners. We will be returning the most important thing in my opinion.
It's don't waste that cash. [inaudible]
Speaker Change: This is why we keep repeating. It's your cash. It's not our cash.
Speaker Change: and we're going to continue to be disciplined, which means that we're going to build a business, we're going to strengthen the balance sheet and we are going to increase returns to shareholders and maybe in a dividend, maybe it's a share of buybacks, maybe it's probably a combination of all of those. [inaudible]
Speaker Change: But the real important question or the real important point is...
Speaker Change: Stay Disciplined. Don't waste that money. Don't go out and do stupid things with our owners money. And, you know, that again, that's why we emphasize from the beginning cost control, that's why we emphasize also capital discipline. Thank you very much.
Winshaw, Winshaw
Speaker Change: Great, thanks. And then maybe a follow-up on the project front, I hope they look some good results there. Can you give us some more of an indication of timelines if possible around updated kind of studies, FID kind of trajectory?
Speaker Change: which project, all projects? Hope they were looking in early 2026 to have a better final picture and potentially green night the project.
Speaker Change: So in the meantime, we're updating the study, doing detail engineering. As we did at Miliadine before giving KPI's and what's going to be the cost, how long it's going to take?
Speaker Change: We would like to have more engineering done and it's also when you're doing that engineering that you find solutions and you improve and you de-risk the project. So it is really our goal and to be over 50% early 2020. And we're also doing a lot of...
Speaker Change: as you mentioned, Dom, Activity on the Ground. We're getting ready. We're getting ready.
Speaker Change: Not only with the engineering and the studies, but we're getting ready to get off the start and blocks very quickly. We're increasing camp space, we're upgrading some of the infrastructure, we're clearing out the old mill...
Speaker Change: So it's not just the studies and the engineering but it's work on the ground. What's going on?
Great, thanks. Good luck.
Speaker Change: And your next question comes from the line of Lawson Winder with Bank of America's Securities Peace Go ahead.
Lassen Winder: Thank you all for your good morning Ammar and team, very nice to hear from you all and thank you for today's update. You talked about your cost.
Lassen Winder: Control, and it's extremely impressive. But you also noted there's a certain cost element royalties that sort of out of your control in a way though. I mean, it could be in your control in the sense that you could buy back your royalties. And I'd like to know how you think about that. I mean, in particular, the Canadian Mallartic. [inaudible]
Lassen Winder: Rowlty, is there an argument for buying those back in order to actually be proactive on controlling that one cost item you can't control? And then looking at it from another point of view, I mean, is that even still relevant given?
Lassen Winder: The extent to which the Canadian allergic property has expanded beyond the bounds of the current royalty. Thanks.
Lassen Winder: Well, I mean, that's a very logical question, and we're well aware of those royalties, and we know there's a lot of speculation around those royalties, and often the answer is, of course we look at that. We look at everything all the time, what makes sense for our shareholders.
You know, those royalties. Please.
Lassen Winder: are fantastic for, I mean, that was the smart thing that Osisco did. I mean, they found this thing. They set up the royalties. Good for them. I give them credit. Good for them.
Lassen Winder: We look at it if there's an opportunity for us to get it at a level that makes sense for our owners. We would do it if someone else has a lower cost of capital and makes more sense for them. [inaudible]
Lassen Winder: You know, then that's what capital discipline's all about so very good question of course we know about it of course we look at it and if the opportunity arises that it makes sense great but we're going to be disciplined.
Lassen Winder: and then when you think about the current footprints of Canadian malarctic, I mean it is starting to expand beyond that current royalty, is that a fair statement and like how does that, how does the expanding resource base and the future trajectory of resource growth at that property, you know, factor into this? [inaudible]
Lassen Winder: Well, you're exactly right. The orbodies continue to expand and potentially well beyond the boundary of the royalties.
I mean, clearly... [inaudible]
Lassen Winder: What I would say is we have probably better insights into that than anybody. Well, not probably. We have better insight into that than anybody. So we do have an advantage in knowledge when it comes to capital allocation in that area. [inaudible]
Speaker Change: Yeah, okay. Well, thanks for that perspective, Ammar. And if I could just ask one follow-up.
Thank you about your move and two.
Speaker Change: Mark, are back into zinc, sorry to be clear, you guys historically have mined a significant amount of zinc, so you're moving back into zinc with your partnership with tech.
Speaker Change: And I mean, it makes a lot of sense, you produce a medal that trades at a significant sort of historical relative premium to a lot of the industrial medals. Is there an attraction to take some of those very high return profits you're earning on gold and invest it increasingly into base medals, like beyond what you're doing with Sam Neck? [inaudible]
Speaker Change: Well, you know, we're a gold company, we're more gold-centric than anyone else and we're happy to be in gold and certainly the last year has demonstrated
that Gold continues to do what it's expected to do.
Speaker Change: I mean you know us well enough, we're a gold centric company but we just want to make money for our owners
Speaker Change: You know, if we find a copper mine in a region that we think has the geologic potential and we have a competitive advantage, it would be open to that, of course. But we're not.
Speaker Change: You know, we're a little different than some of our peers. Our peers have...
Speaker Change: You know, they've picked one medal, copper, they've said they'll go anywhere in the world to do it, and they've set targets. For Agnico Eagle, we just want to make money for our owners which means...
Speaker Change: We're going to play off our strengths. We're a gold company, but we're open to other metals if it makes a lot of money. They have to be in places that we're comfortable operating and probably the most important thing is [inaudible]
Speaker Change: The amount that we do is going to be driven by opportunity to make money, it's not going to be driven by setting an arbitrary number of 30 or 40 percent [inaudible]
Okay, very well said, thank you, Amar. [inaudible]
Speaker Change: and your next question comes from the line if Todd Murray, Gujepri, speak to her head. [inaudible]
Fahad Zarifi: Hi, thanks for taking my question. Just looking at Macassa, very good grades in Q1, I think the highest in two years. And you mentioned it was due to two stopes that helped perform. Was that a one-off type of situation? Macassa, should we be thinking about grades through the rest of the year at Macassa?
Fahad Zarifi: So, now there's a few panels, as you know, Macasa, the grade varies a lot between F and unsusperton and several unsusperton. So, it's again with the drill spacing pattern, it's really difficult to capture those drill re-box here and there. So, sometime in some panel, you're going to get some outliers like that, and you know, we may see some more, but they are difficult to predict with the drill spacing we're having. So, we are enjoying it when they pass, but it's not something we can predict.
and Ammar Al. Thank you.
Okay, thank you [inaudible]
Speaker Change: And your next question comes from the line of John Tumazos, David John Tumazos, a very independent research piece for her.
Thank you.
Speaker Change: Thank you for your service to the company. I'm looking at the slide 7, slide 12 excuse me, I'm interested in the 24-gram intercept between Sue Luke and Patch 7.
Speaker Change: Is it possible that the two zones connect in our one zone?
$2,500 US rocket today's gold prices. [inaudible]
Speaker Change: What do you think the cost per ton will be when you have hope they restarted?
Speaker Change: $250 a ton, $500, I'm wondering if that 24 gram intercept is 80% or 90% gross margin rock.
Speaker Change: Well, maybe to answer on the couch, you have to look a bit. We're looking to replicate something similar to Millie Dean. So you should look at the couch structure at Millie Dean's 6,000-tunnery-day and we're generally between 230-250-dollar pretend, if you look at the number.
Speaker Change: So yeah, you're right, those kind of intercepts are great, you're well above, but you have to look at it as you know on average [inaudible]
Speaker Change: into your first question. And as you can, as you see on the long section at slide 13, there's several overshoot within that panel, I'm not saying that they're all going to connect.
Speaker Change: because typically those are kind of the structure is kind of an anastomal shear zone where there is some higher grade or shoot like the as defining in the patch of an and and and so look area but I think that in between those recent results just demonstrate that well there could be one or two other pocket.
Speaker Change: Had in the gap in between the Patrick and the Suluk and this is what we're going to be focusing on because [inaudible]
Speaker Change: You know, that would be a very positive on the project, it's those from the plan ramped in between Solok and Patch, there's one or two other or shoot And it's pretty similar to the pattern that was observed back in the day also in Doris So it's a collection of or shoots along that trend [inaudible]
Speaker Change: and those recent results, you know, confirm our view that, you know, we could add, you know, when it would up to maybe a million ounces between solo and patch. That's my, that's my forecast.
Merci beaucoup. Bonne chance.
Thank you [inaudible]
Speaker Change: And your last question comes from the line of Tanya Jakusconek, which course you've been, please go ahead.
Tanya Jakosponik: Thank you very much for taking my question. I have three questions and first of all congratulations on a bit of therapy. I have three questions if I could. Maybe Ammar, can I start with you just on the tariff view?
Tanya Jakosponik: Had a paragraph in your press release in terms of the impact of the casualty on your cost rupture. Can I just slide a little bit deeper into that in terms of finer understanding of what portion of your cost rupture I'm assuming is consumable.
Tanya Jakosponik: would, you know, be impacted and what within there would you be having the greatest impact? All right.
Tanya Jakosponik: and then just on the labor side because, you know, if tariffs come through, we would see inflation, so I'm just trying to understand also what labor negotiations you're going through in 2025 with your workforce.
Tanya Jakosponik: and then lastly, it would come through sustaining the development capital and maybe any important or large sustain or development capital purchases, you mindfully et cetera that you could be yourself doing this year. So that's my first question. Thank you.
Tanya Jakosponik: Thanks, Tanya, and I guess you've got a cold, so get better soon. So on the tariff side, I'll just kind of give a big picture and then go into a little bit of detail with some of the questions. And so...
Tanya Jakosponik: First of all, on the revenue side, we don't anticipate any impact. Zero.
Tanya Jakosponik: We have our gold refined outside of the United States, and we don't expect any tariff impact on the revenue side. On the cost side about 60% of our costs
Tanya Jakosponik: Are either labor or energy and we don't see any tariff impact on any of that
on, let's say, the 40% of other costs. [inaudible]
Tanya Jakosponik: One of the advantages that we have of mining in regions where mining has been going on for decades and where we've helped build a robust local supply chain is we get a lot of things locally
and so...
Tanya Jakosponik: We will have some impact, it's impossible to say because it's the reciprocal tariffs that would affect us.
Tanya Jakosponik: and those are in flux and we don't know. Let's go.
Tanya Jakosponik: but to make a long story short, no impact on revenue. Thank you.
Tanya Jakosponik: Maybe some impact on consumables but relatively less than I think people would expect because of the local supply change that we've got and our high level assessment and take this with a grain of salt because I don't think anybody knows where we're going to end up with tariffs.
Tanya Jakosponik: But in general, our view is, to the extent that the tariffs have an impact, [inaudible]
Tanya Jakosponik: It would be, and we're guessing in the sort of maybe three to four percent increase, but that would, of course, but that would likely be offset that.
Tanya Jakosponik: by an equivalent or roughly equivalent weakness in the Canadian dollar. Again, I'm not an economist, we've done a lot of work on this, that's our assessment. On the labor side of things,
I mean, we have great relationships with our teams.
We've had...
Tanya Jakosponik: At the start of the year, that's all been set. We will continue to do things the way we've done them for years, which is with respect and with our partners.
Tanya Jakosponik: So we don't really see anything on the labor side and on the, finally on the inflation side.
Tanya Jakosponik: I think that, again, I'm not an economist, it's too early to say I think though that tariffs are going to be in general . . .
Tanya Jakosponik: and then you're going to have to weigh the inflationary pressure of tariffs versus the disinflationary issues associated with a slowdown in an economy. [inaudible]
Again, I'm a mining company, I'm not a economist [inaudible]
Speaker Change: Yeah, no, none of us are economists here, or Martin, maybe just on the sustaining capital site. Any new, luck, sleep.
Speaker Change: I'm just trying to understand any big capital within your half-act set.
Thank you for that.
Speaker Change: My second question, if I could, I just wanted to ask Ammar
Ammar Al, Dominique Girard, James Porter
Speaker Change: Traded it and, you know, took money off the table where you see that. So how should I be thinking about this portfolio and your strategy and the investment of juniors? [inaudible]
And then, yeah, Bollywoodville.
Tanya Jakosponik: Yeah, I tell you fair question because it's gotten big so there's I think there's two distinct parts to my answer the first part is Yes, we're going to continue the strategy that we've had for decades, which is
You know, get in early. [inaudible]
Tanya Jakosponik: with projects that we think have a lot of potential. And that's really gets to this whole capital allocation. And our strong view that capital allocation has to be based on intelligence. So
Tanya Jakosponik: We make small investments early on in projects that are interesting and we do it on purpose to learn about those projects and to be able to make a logical decision and we want to continue to be by the way the partner of choice for some of these juniors in the regions we operate. Thank you.
Tanya Jakosponik: It's a strategy that's worked really, really well for us. We're going to continue it. The second part, though, is, man, your position has gotten pretty big, Agnico. What are you going to do about it? And the honest answer to that is...
Tanya Jakosponik: isn't because we've suddenly decided to double or triple our activity in that space. It's the same pace, it's the same strategy, we've just benefited on the investment side like hopefully all of you have.
Speaker Change: Now, appreciate that, it's just a certain point, you know, when you look at your portfolio, does it look like that, you know, what you're invested in now, it's way out of the money and... [inaudible]
Edna, Edna, David
Luckily, it's way in the money, but I hear you.
and if I could just have Jamie one final questions.
Speaker Change: on the couple's returns, and I know Jamie are going to be more active on the share bye-bye Bye-bye.
in the next 12 months. But you also mentioned that you'd like to go to a net cash of a billion dollars to be competitive.
Speaker Change: Is that how I should be thinking or on the dividend side that? [inaudible]
Speaker Change: You know, you kind of want to get to that met one billion in cash before you would review the distance or what do you need to see that a gold price stability and that that cash of a billion before you would review the distance?
Speaker Change: Yeah, excuse me, yeah, I think you've touched on it. I think that's exactly right. We're you know targeting
Speaker Change: In the end term, a billion dollars of net cash and we'd like to see some stability in the gold price and then we'll obviously reevaluate the dividend policy. I think for Q2 and likely for Q3, the focus will be on higher returns by the share buyback but we'll be evaluating the dividend and obviously having discussions with our board. And if the gold price stays where it is, there's a very good chance of an increase at some point in the future. Thank you.
Speaker Change: Okay, thank you very much for taking my questions and congratulations [inaudible]
Thank you, thank you, and get well soon.
Speaker Change: and that concludes our question and answer session. I would like to turn it back to Mr. Elmar,
Speaker Change: Thank you operator and thank you everyone for participating this morning. As a reminder, we're hosting our annual general meeting today at 11 o'clock at Arcadian Court and we hope to see as many of you there as possible. Thank you everyone and have a great day in a great weekend. Thank you very much.
Speaker Change: Thank you and this concludes today's conference call. Thank you all for joining. You may now disconnect. Thank you very much for joining us tonight.
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