Q1 2025 Alamos Gold Inc Earnings Call
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Speaker Change: This conference is being recorded so it goes the homes that don't go as you see.
Speaker Change: All participants please standby your conference is ready to begin.
Speaker Change: Good morning, all.
Scott Parsons: I'll now turn the call over to Mr. Scott Parsons animals.
Speaker Change: Corporate development and Investor Relations. Please go ahead Sir.
Speaker Change: Thank you operator, and thanks to everybody for attending our first quarter 2025 Conference call. In addition to myself we have on the line today, John Mccluskey, President and Chief Executive Officer, Greg Fischer, Chief Financial Officer, Little Chemo, Chief operating officer, we.
Speaker Change: We will be referring to a press.
Speaker Change: During the conference call that is available through the webcast and on our website I would also like to remind everyone that our presentation will be followed by a Q&A session.
Speaker Change: We will be making forward looking statements during the call. Please refer to the cautionary notes included in the presentation news release and MD&A as well as the risk factors set out in our annual information form.
John: Technical information in this presentation has been reviewed and approved by Chris Bostwick, Our senior VP Technical services and a qualified person also please bear in mind that all the dollar amounts mentioned in this conference call are in U S dollars unless otherwise noted now John will provide you with an overview.
John: Thank you Scott.
Speaker Change: I'd like to turn your attention to slide three.
Speaker Change: We produced 125000 ounces of gold in the first quarter consistent with the lower end.
Speaker Change: Quarterly guidance Island gold continues to perform well offsetting a slower start to the year from young Davidson and Luciano.
Speaker Change: As we will outline through this call we've seen a significant improvement from both operations in April and expect this to contribute to a stronger production in the second quarter.
Speaker Change: With a further increase in production expected in the second half of the year driven by higher grades and mining rates at island gold.
Speaker Change: The increase in grades at Lee Aki Grande, we remain well positioned to meet our full year production guidance.
Speaker Change: All in sustaining costs for the quarter were above our first half guidance, reflecting lower production at young Davidson and Latino increased royalties due to the sharply higher gold price and higher share based compensation, given the 45% increase in alamosa share price during the quarter.
Speaker Change: Through a combination of higher tonnes and grades processed we expect rising production and a significant improvement in our costs through the remainder of the year.
Speaker Change: We expect this to drive a 20% decrease in all in sustaining costs in the second quarter with further decreases into the second half of the year.
Speaker Change: Turning now to slide four.
Speaker Change: We continue to advance our high return permitted and fully funded organic growth projects that are expected to support further production growth and declining costs in the coming years.
Speaker Change: Following our construction decision at Lynn Lake earlier in the year. We attended a groundbreaking ceremony alongside the Premier Manitoba as well as representatives from the first nations and local communities.
Speaker Change: Struction activities are ramping up and will be completed over the next three years with initial production expected in the first half of 2028.
Speaker Change: In February we announced a 31% increase in our global mineral reserves to 14 billion ounces. This included another substantial increase in reserves and resources at island gold highlighted by a 32% increase in reserve ounces and an 11% increase in grades.
Speaker Change: We will be incorporating this growth along with large mineral reserves along with the large mineral reserve at Marino into an expansion study to be completed in the fourth quarter that we expect will outline significantly larger and more valuable operation.
Speaker Change: Turning to slide five.
Speaker Change: Our outlook has never been stronger and we have never been better positioned.
Speaker Change: The strongest growth profiles of the sector underpinned by three high return projects.
Speaker Change: All of this growth is fully funded.
Speaker Change: We started last year at a run rate of 500000 ounces per year.
Speaker Change: Additionally, Gino we expect to produce approximately 600000 ounces this year with the phase III expansion is vital food Europe construction, we expect further growth to 700000 ounces per year by 2027 with all in sustaining costs trending lower to approximately $200 per ounce.
Speaker Change: But the initial production from the Lynn Lake project expected in the first half of 2028, our longer term production rate is expected to increase to 900000 ounces peer with a with a further decrease in costs.
Speaker Change: At current gold prices, our all in sustaining cost margin is expected to exceed $2000 per ounce supporting over 1 billion in annual free cash flow.
Longer term, we see excellent potential to take the company wide production to 1 million ounces per year with a further expansion of the island Gold district.
Speaker Change: Turning to slide six.
Speaker Change: We expect stronger free cash flow through the remainder of 2025 at current gold prices, while funding all of our growth initiatives and record exploration program with a phase III plus expansion are on track for completion in the first half of 2026, we expect considerably higher free cash flow starting in the second half of <unk>.
Speaker Change: 26, we expect further growth into 2027 and beyond driven by higher production lower costs and decreasing capital with the start of production from the P. D. A little lake protests.
Speaker Change: I will now turn the call over to our CFO, Greg Fisher to review our financial performance It's Greg.
Greg Fisher: Thank you John.
Greg Fisher: On slide seven we sold approximately 118000 ounces of gold in the first quarter.
Greg Fisher: Average realized prices.
Greg Fisher: $2802 per ounce for revenues of $333 million.
Greg Fisher: The average realized price was below the London PM fix for the quarter, primarily as a result of delivering over 12300 ounces into the gold prepayment facility based on our prepaid price of 2000 and $524 per ounce.
Greg Fisher: We will continue to deliver the same quarterly number of ounces into the facility until the obligation is completed at year end.
Greg Fisher: As a reminder, the prepay facility was executed in July 'twenty 'twenty four with the proceeds utilized to retire 180000 ounces.
Greg Fisher: Forward sales contracts inherited from Argonaut gold across 'twenty, 'twenty, four and 'twenty 25, with an average price of $1840 per ounce.
Greg Fisher: Total cash cost of $1193 per ounce.
Greg Fisher: And all in sustaining cost of $1805 per ounce were both above the top end of the guidance for the first half of 2025, driven by higher costs at young Davidson in the genome as well as higher royalties and share based compensation.
Greg Fisher: Given the 45% increase in our share price in the first quarter long term incentives outstanding were revalued and resulted in a $230 per ounce increase so all in sustaining costs compared to our guidance.
Greg Fisher: All in sustaining costs are expected to trend lower through the year with a 20% decrease expected in the second quarter and a further decrease in the second half of the year.
Greg Fisher: We are monitoring our full year cost guidance, given the higher share based compensation and royalty cost compared to our guidance, which is challenging to forecast given the nature of these costs. Excluding the impact of these variables, which are outside of our control we remain confident with our full year cost guidance.
Greg Fisher: Our reported net earnings were $15 million in the first quarter four cents per share.
Greg Fisher: This included 46 million of unrealized losses on commodity hedge derivatives for the legacy Argonaut 'twenty 'twenty six 'twenty 'twenty, seven gold hedges and other adjustments totaling $2 million.
Greg Fisher: Excluding these items, our adjusted net earnings were 60 million or 14 cents per share.
Greg Fisher: Operating cash flow before changes in noncash working capital was 131 million in the first quarter or <unk> 31 cents per share capital spending totaled 100 million and included 27 million of sustaining capital $66 million of growth capital and 7 million of capitalized exploration.
Greg Fisher: Free cash flow was negative $20 million and was impacted by $53 million of cash taxes paid primarily related to year end mining and income taxes in Mexico as well as the settlement of 25% of the prepayment obligation.
Greg Fisher: Cash tax payments are expected to decrease through the remainder of the year of between 10 and $15 million per quarter.
Greg Fisher: We expect stronger free cash flow through the remainder of the year driven by higher production lower cost and lower cash tax payments can.
Greg Fisher: Combined with a strong cash position of $290 million and nearly 800 million in total liquidity.
May and well positioned to internally fund our growth plans.
Speaker Change: Now I'll turn the call over to our CFO.
Speaker Change: To provide an overview of our operations.
Greg Fisher: Thank you Greg.
Speaker Change: Over to slide eight production.
Speaker Change: Production from the island Gold District totaled 59200 ounces in the quarter with a strong performance, Hawaii Island gold offsetting lower production from a genome.
Speaker Change: At island gold mining and milling rates as well as the grades were all consistent with annual guidance.
Speaker Change: This included 200 tonnes per day processed with grades averaging 11, three six grams per tonne.
Speaker Change: Milling rates imaging over lower than planned averaging 7200 tons per day.
Speaker Change: As I will review shortly deficiencies in the orphan design limited throughput rates earlier in the quarter.
Speaker Change: Since been rectified, which has driven significantly higher throughput rates into March and April.
Speaker Change: Great process that Marino averaged 0.86 grams per tonne slightly below annual guidance.
Speaker Change: Given the lower mill availability in the quarter mining activities were focused on waste stripping.
Speaker Change: With less ore mined less as the relatively higher grade ore was available for processing.
Speaker Change: Mining rates have improved average over 15000 tons per day of or in April.
Speaker Change: I expect it to remain at similar levels through the rest of the year.
Speaker Change: This is expected to support the availability of higher grades for processing through the remainder of the year.
Speaker Change: Combined with higher milling rates, we expect significant improvement in production and distribution costs.
Speaker Change: A portion of the operation through the remainder of the year.
Speaker Change: With a strong contribution from island gold the combined operation generated positive mine site free cash flow of $19 million in the quarter.
Speaker Change: That's a significant capital investments in the phase III plus expansion.
Speaker Change: In a robust exploration program.
Speaker Change: The operation is expected to continue self funding the phase III expansion at current gold prices.
Speaker Change: With significant free cash flow growth following its completion in 2026.
Speaker Change: Yeah.
Speaker Change: Moving to slide nine.
Speaker Change: But you know had a challenging start to the year, but we believe we have now turned the corner with milling rates steadily improving and nearing planned levels.
Speaker Change: Milling rates were lower than planned due to restricted or closer to the crushing and conveying circuit.
Speaker Change: This was caused by deficiencies in the initial order flow designed for winter conditions, which created blockages within the theaters and undersize transfer shoes.
Speaker Change: Shoots were expanded during the quarter and combined with the various optimization activities undertaken in the second half of 2024.
Speaker Change: Milling rates increased substantially towards the end of the quarter.
Speaker Change: Milling rates increased to average 8200 tonnes per day in March at approximately 9500 tonnes per day in the last two weeks of April.
Speaker Change: Further improvement expected in May.
In advance of the transition of in advance of the transition to processing island gold ore through the machine or mill, approximately 8000 tons of high grade ore from island gold, where blended with machine or in process through the machine or mill in April.
Speaker Change: The batch test was successful with recoveries.
Speaker Change: Blended or in line with expectations.
Speaker Change: With the significant improvement in the genome billing rates and successful batch test of island gold high grade ore.
Speaker Change: Gold mill is expected to shutdown in early May following which ore from island gold will be trucked and processed through the larger and more cost effective Marino milk.
Speaker Change: Given the significantly lower processing costs from utilizing the Merino mill. This is expected to contribute to declining costs through the remainder of the year.
Speaker Change: Moving to slide 10.
Speaker Change: The transition to the mid Gino mill is an important step towards the completion of the phase III plus expansion.
Speaker Change: Gino haul road is now substantially complete and will be used to transport the ore from the island gold portal so the marginal mill.
Speaker Change: Progress is being made on the mill expansion to 12400 tons per day with bulk earthworks underway in detail engineering ongoing to support a larger longer term expansion of the mill.
Speaker Change: Within the shaft site area, we continue to make progress having recently completed the second shop station breakthrough at the 1050 level.
Speaker Change: At quarter end the shaft sink had reached a depth of 1055 meters.
Speaker Change: <unk> is on track to reach the ultimate depth of 1373 meters in the third quarter of this year.
Speaker Change: The construction of the paste plant is also advancing well with 30% of the building steel now erected and bore holes for the delivery of paced underground completed in advance of lighter installation.
Speaker Change: Over to slide 11.
Speaker Change: As of quarter end, we spent and committed 75% of the total fees.
Speaker Change: $796 million.
Speaker Change: The expansion remains on track for completion in the first half of 2026.
Speaker Change: There will be a significant driver of low cost production growth and free cash flow generation.
Speaker Change: Over to slide 12.
Speaker Change: Young Davidson produced 35400 ounces in the first quarter lower than planned due to lower milling.
Speaker Change: Lower than planned due to lower mining rates.
Speaker Change: Lower production drilling in scoop availability in the first two months of the quarter impact still productivity and mining sequence.
Speaker Change: Production drilling meters and scoop availability improved within the quarter and mining rates are back to design capacity of 8000 tonnes per day in March and April and are expected to remain at similar levels throughout the rest of the year.
Speaker Change: Through higher mining and processing rates as well as increased grades production is expected to increase and costs decrease the remainder of the year.
Speaker Change: With another strong quarter of mine site free cash flow of 39 million.
Speaker Change: Young Davidson is on track to deliver more than $100 million of free cash flow for the fifth consecutive year.
Speaker Change: Over to slide 13.
Speaker Change: Total production from the Mulatto district was 30400 ounces in the quarter with two thirds of production coming from La Yaqui Grande and the remainder from residual leaching up a lot of us.
Speaker Change: As previously guided grades of the La Yaqui Grande were expected to be at the low end of the guidance range in the first quarter and steadily increase throughout the year.
Speaker Change: With lower grade stacked in the quarterly Yaqui Grande and higher contribution from residual leaching.
Speaker Change: Costs were above the top end of the annual guidance range.
Speaker Change: Costs are expected to trend lower through the through the year as production increases driven by higher grades from La Yaqui Grande.
Speaker Change: Our mental permit amendment for the PDA project was received in late January.
Speaker Change: Going for the startup construction activities.
Speaker Change: Focus during the quarter was on procurement of long lead items and detailed engineering construction.
Speaker Change: Activities are expected to ramp up towards the middle of the year with first production on track for mid 2027.
Speaker Change: Mine site free cash flow totaled $1 million in the quarter net of $48 million in cash tax payments for the 2024 year.
Speaker Change: With production increasing in cost decreasing them allowed us district is expected to generate strong mine site free cash flow through the remainder of the year, while funding the development of P. D E and a robust exploration program.
John: With that I will turn the call back to John.
John: Thank you Luke.
Speaker Change: I'll now turn the call over to the operator, who will.
Speaker Change: We will open the call for your questions after that I'm going to ask the operator to turn the call back to me for some final remarks.
Jamie: So Jamie.
Jamie: Thank you.
Jamie: We will now take questions from the telephone lines.
Speaker Change: You have a question please press star one.
Jamie: So on your question.
Dara: Thanks Dara.
Jamie: Yes.
Jamie: If you have any question.
Jamie: Uh huh.
Jamie: Yeah.
Jamie: All participants for questions.
Jamie: We thank you for your patience.
Jamie: Yeah.
Jamie: My first question is from customers.
Jamie: Please go ahead.
Jamie: Thanks, John right now.
Jamie: Oh, maybe my first question is on them as you know mill.
Jamie: It sounds like some of the issues in terms of the restrictions.
Jamie: Restrictions, where they cause there I'll come back and question bottlenecks have now been rectified.
Speaker Change: Now looking at you know you're getting too close to 9500 tonnes per day in terms of throughput, but I guess my question is previously you had expected to get to 11200 tonnes per day by the end of Q1 is that still what youre trying to aim for near term in terms of getting up to 11200 tonnes per day.
Speaker Change: And do you need to reach that level before you can fully integrate the.
Speaker Change: The island gold and La Gino and shut down the island Gold mill.
Cosmos: Yes, I Cosmos look here.
Speaker Change: As I touched on in the.
Speaker Change: The.
Speaker Change: Communication, our expectations actually we're going to make that transition at the beginning of May are actually at the end of next week, we have seen some continuous improvement certainly over the last three quarters as we've talked about with her.
Speaker Change: Regards to the jaw crusher cone crusher.
Speaker Change: The last component, which kind of held us back from actually making the transition by the end of Q1 was some of the bottlenecks that we saw in the crushing and conveying system, we have since addressed those.
Speaker Change: As I mentioned at the end of April we were running at a 9500 tons per day, we had a couple of smaller minor operational issues to be Frank with you that would have actually put us well above 10000 tonnes per day with regards to running the processing plant.
Speaker Change: And really the final step for us was to be able to complete the higher grade batch test of island gold or commingled with the marginal ore.
Speaker Change: Just to validate the metallurgical recoveries and the processing plant from a plant scale perspective, and we did that.
Speaker Change: We had no issues with regards to the overall performance of our overall recovery as well as overall Leach circuit performance. So we're now quite comfortable to make that transition and our expectation is at the end of next week, we will start actually.
Speaker Change: Bringing all of the island or.
Speaker Change: Underground ore over to Marino and being processed on a co mingling basis with imaging or.
Speaker Change: I got I guess in terms of numbers I bring up the 11200 tonnes per day I know that was a number that was given out previously.
Speaker Change: Is that a number that we should stick to or is that still like a number that we should look at the target or not so much. An instance, I guess, that's really the crux of my question.
Speaker Change: No. That's that's still the number we expect to deliver on causal is the 11200 tonnes per day as we move forward here through the remainder of the year.
Speaker Change: Okay. It sounds good.
Speaker Change: Maybe moving to young Davidson here, just a quick question here.
Speaker Change: You know, it's always been steady as she goes very steady operation I was kind of surprised that.
Speaker Change: Throughput.
Speaker Change: Oh, but was a bit lower.
Speaker Change: In Q1, as you mentioned due to kind of equipment availability.
Speaker Change: Is that due to kind of the age of the equipment can you maybe comment on that is there any kind of renewal equipment needed.
Speaker Change: At this point in time or is it just.
Speaker Change: Really kind of like a maintenance I actually I don't know maybe you can just touch on what happened and should we be concerned about.
Speaker Change: The equipment.
Speaker Change: Sure It is.
Cosmo: It was really more a mining sequence related to be honest with you Cosmo.
Speaker Change: Typically with the lower mine infrastructure.
Speaker Change: From $95 90 down has a direct feed into our crushing and conveying system, where the upper mine the legacy from the upper mine from the you know the early years of mining, there's a transfer point required to be able to provide that or distribution down into the lower mine.
Speaker Change: And as a result of that we had some more productive stopes that we were expecting through the first quarter in the lower mine.
Speaker Change: You now are much more productive for us to be able to maintain the 8000 tonnes per day, we typically like to keep about a 50 50 blend.
Speaker Change: And as a result of some of those stopes start coming online in a timely fashion in the first quarter.
Speaker Change: In combination with a couple of production deals that we actually had working in the lower mine to get those stopes online. We had a couple of unscheduled maintenance issues with a couple of those deals that we had to address and that really affected the performance in the quarter, but as far as the overall.
Speaker Change: Fleet management and replacement the management of our equipment. It's it's it's always done on a timely fashion the equipment that we're currently utilizing still has useful life. It was more just in relation to some unscheduled downtime with the drills as well as a couple of scoops, which also puts a bit more pressure obviously you for re handling from the upper mine to the lower mine.
Speaker Change: But as part of our as part of our equipment replacement strategy. I mean, we do have a couple of new units that we brought in last year. We have a couple more new units coming in this year as far as scoops and another production drill as well based on operating hours in the lifecycle of those pieces of equipment.
Speaker Change: Understood maybe just one last question turning to likely right Greg here.
Speaker Change:
Speaker Change: Two things on the guidance I think costs number one Greg could you remind us what kind of gold price assumption you factored into your cost guidance for the year.
Speaker Change: And number two a bit more of a accounting nerdy question here, but the $230 announced was in part due to higher management compensation with the increase in the share price of Alamos you know this past quarter.
Speaker Change: Maybe this past year, but how does it work like normally a higher kind of revaluation of our management compensation that was issued in a previous quarter revaluation does it usually get into Europe.
Speaker Change: All in sustaining cost number for the quarter and number two you know yeah, it's up 45% year to date, but today your share price is down 11%. So it doesn't that mean later on you might get resolved and again in terms of those management compensation expenditures and does that mean, we're going to see like a reversal of today's 203.
Speaker Change: $80, an ounce sometime later other than that introduce a lot of volatility into that into that number.
Greg Fisher: Yeah Cosmos, it's Greg here.
Greg Fisher: And so the easy question first which is the gold price assumption that was $2400. So we had a budget of that and obviously the increase in the gold price above that $2400 has an impact on royalties expense as well as other charges that are related to our two mine site performance.
Greg Fisher: <unk>.
Greg Fisher: On the stock based compensation.
Greg Fisher: I mean, it relates to the fact that we issue Psus Rs used psus and they all have terms of call it three years or longer.
Greg Fisher: Those all need so it's all from our units that had been issued in the past.
Greg Fisher: And because we settle those in cash they're considered liability based instruments and therefore under accounting rules. They are required to be mark to market every quarter. So to your point could be a reversal of this yes, I mean, if the share price drops you have a negative mark to market and of the price increases you are a positive mark to market why.
Greg Fisher: So profound this quarter was because we were up 45% in the quarter, which we've never seen before and you know.
Greg Fisher: Frankly, it's a good thing.
Greg Fisher: Yeah, so yeah.
Greg Fisher: It's just how the accounting works on that and.
Greg Fisher: Every company will include stock based compensation in their definition of all in sustaining costs.
Greg Fisher: Okay.
Speaker Change: Great. Thanks, John and Jim those are all the questions. Thank you.
Speaker Change: Thank you.
Speaker Change: <unk> question is from Michael.
Speaker Change: From RBC capital markets.
Speaker Change: Please go ahead.
Speaker Change: Yes, thanks very much for taking my question.
Speaker Change: Hum.
Speaker Change: I know you said higher grades over the rest of the year on the higher milling I apologies, if I missed it somewhere but are you able to quantify that should we be thinking back in line with our original guidance or <unk>.
Speaker Change: Or is there a potential for a bit of a catch up at some higher grades.
Speaker Change: Yeah.
Speaker Change: We should well will track to being within guidance for the rest of the year with regards to Marino with regards to the grade profile that we would have been that we would've put out at the beginning of the year. I mean, we were slightly below on the marginal side certainly for the for the head grades that went into the mill, but that was really a function of not actually mining the entire mine plan through the quarter because of some of the challenges that we have with regards to.
Speaker Change: The.
Speaker Change: Crushing and conveying with regards to the structure that we had to had to replace.
Speaker Change: So that's that's prevented us from getting all of the higher grade portion of the ore that we were expecting in the quarter, which would've put us within guidance.
Speaker Change: Okay makes sense and then just another question on the testing, we're doing blending the Magellan island or what's.
Speaker Change: What sort of grade where you're testing there in terms of the.
Speaker Change: The <unk> material and are you confident.
Speaker Change: At those levels of recoveries sort of no matter no matter, what you're putting into the mill between the island door in the genome.
Speaker Change: Yeah, we're comfortable I mean, the the high grade test, we ran about 8500 tonnes of island or co mingling with the machine or the island or was running.
Speaker Change: From a day to day perspective anywhere from seven to 10 grams on average in that range with merino, where that was running out at about <unk> nine at that point. So that's you know typically the sort of blend that we would expect to see.
Speaker Change: As we start to continue to commingle, the sort for the long term running that entire plant with both ore sources feeding into the into the into the one mill.
Speaker Change: And the overall recoveries that I mentioned are in our expectation we ended up with about a 96% recovery overall on the combined or stream, which is what we are which is what our expectation was.
Speaker Change: Okay, great. Thanks that makes sense and then maybe one more if I could if you look out longer term, obviously, you've got a lot of growth on that through through 2030.
Speaker Change: But construction really starts to ramp up in the second half you'll soon have.
Speaker Change: Three projects.
Speaker Change: On the go can you give any color on how you're managing that sequencing, it or or otherwise managing risk over the next couple of years.
Speaker Change: Yeah, we're I mean, our phase III plus expansion is well well underway I mean, we're.
Speaker Change: Well over halfway through certainly the shaft up is nearing completion there by the end of this year PV plant, we're starting construction its not on critical path and we expect to have that completed by the end of the year and the next phase obviously for US is the continued mill expansion to support more more throughput through the mill.
Speaker Change: We're working through that time wise are expecting to have that completed in the second half of 2026, but we've got a solid team built there we've got lots of lots of people to be able to manage the phase III plus expansion.
Speaker Change: With regards to Mexico, PDA, we've done a lot of a number of projects down there over the 20 year period, and we basically have the team.
Speaker Change: Within our operations team to be able to manage these projects with the way we've always done it in Mexico over the 20 year period. So we already have a couple of them that people that we need to be able to deliver on PDA certainly with regards to the construction on the on the milling infrastructure that we're gonna be building there on the mining side, it's going to be managed also with our operations team, but it'll be contract binding so there'll be a complement of people.
Speaker Change: That obviously will oversee that on the contract side.
Speaker Change: And then Lynn Lake are you know certainly we're in the early stages of that but we're in the process of building our team.
Speaker Change: All of the key the key figures that we need as far as management as we start the project are in place. So we're quite comfortable certainly moving on on those three areas of growth over the next couple of years.
Speaker Change: Okay, great. Thank you very much I appreciate it I'll pass it on.
Speaker Change: Thank you.
Speaker Change: <unk> question is from.
Habib: <unk> Habib from Scotiabank Scotiabank. Thank you. Please go ahead.
Speaker Change: Thanks, operator.
Speaker Change: I Alamos team.
Speaker Change: Just a couple of questions from me most of my questions have been answered one question that keeps coming up since my calls. This morning is just on the eastern side.
Speaker Change: So basically in terms of you know.
Speaker Change: Based on your Q1 results and Youre expecting that a 20% decline in E cig.
Speaker Change: We're kind of estimating that I, you know you would need about to hit about 1000 to $1050 per ounce.
Speaker Change: In order to achieve your cost guidance or guidance.
Speaker Change: How confident are you in terms of achieving these cost levels.
Speaker Change: Yeah.
Speaker Change: Everybody says it's Greg here. So we are very confident in what we can control, which as you know our operating costs, our sustaining capital that is tracking well against the budget what we.
Speaker Change: Really don't have any control over or and don't have any foresight on is where the gold price is going to go in and then the share price those are two things that we.
Speaker Change: Have some control actually don't have control over it and therefore can't manage the impact on the costs. So really what we're saying is.
Speaker Change:
Speaker Change: From what we are have oversight on we're very comfortable with it with respect to budget. We are over budget on what we had put.
Speaker Change: Put in the guidance for them.
Speaker Change: Our share based compensation and the royalty expense and that continues to impact US then it could have an impact on our overall cost guidance.
Speaker Change: Okay. Thanks for that Greg.
Speaker Change: Just moving on quickly onto a on the exploration side that Oh, Thank God.
Speaker Change: You guys had somebody Oh good results on the western side of Baidu Gold is there plans to continue drilling on that side and any sort of color on that front.
Speaker Change: Oh, yes, it does.
Speaker Change: Scott Parsons, our VP of exploration.
Speaker Change: Yeah that that those results were a were encouraging and positive and drilling is ongoing as we speak.
Speaker Change: In the western part of while in both from underground and surface falling up on the up plunge extension of the western wear shoes. So that continues.
<unk> continues to grow and expand as we as we step out we've got a good increase in our resources there that of last year and we continue to step out of both closer to surface from surface drills and underground from our underground platforms in that area.
Speaker Change: And with those underground platforms, you know Scott I mean is there a possibility that you have infrastructure to actually find those areas as well.
Scott Parsons: Yeah. That's our approach was a basically establishing our exploration drifts underground as youre utilizing them initially for exploration well, we'll put a drill at the end of the platform's drills, we hadn't mineralization and define a resource will extend that platform a further to be able to infill drill converted to reserves, but also to continue exploration.
Speaker Change: And ultimately those will be used for production in the future.
Speaker Change: And that's it for me. Thank you for taking my questions.
Speaker Change: Thank you.
Speaker Change: The following question is from Mccamey.
Speaker Change: From Canaccord Genuity. Please go ahead.
Mccamey: Hey, Good morning, guys. Just a couple of follow ups on the Gino I mean, you've made a lot of upgrades to the processing circuit there.
Mccamey: Are there any more upgrades that you still need to do to get to the 11, two or you're kind of there now.
Mccamey: No. It's look here now where they are now I mean as I mentioned, we've you know we've made obviously you.
Mccamey: A few modifications there from the original design that was installed can't emphasize that enough. It's it was just some poor design considerations there with regards to the crushing circuit in conveying circuit, we've made all of those changes.
Mccamey: We made some other modifications to the grinding circuit that we felt would improve the overall throughput we've completed the batch testing with regards to a low grade at a high grade component of Ireland Oracle mingling with.
Mccamey: With machine or so we're confident on the metallurgical side of things. So there's nothing stopping us now from her moving forward and starting hitting our stride to.
Mccamey: So that 11200 tonnes per day.
Mccamey: And as you think about the expansion to 50000 plus.
Mccamey: Can you just remind us what sort of components are going to need upgrades to get to that level.
Mccamey: It's basically twinning the infrastructure that we have now carry it's talking about another another crushing circuit. So two stage crushing as well as two stage grinding.
Mccamey: With additional leach capacity, both CIP and CIL.
Mccamey: Upsizing, the elution circuit and upsizing that refinery.
Mccamey: Hi handle the higher gold content overall coming in on a bigger processing plant potentially up to 20000 tonnes per day.
Mccamey: And that's twin twinning, the grinding circuit as well.
Speaker Change: Correct Yeah.
Mccamey: Okay. Okay, great. Thank you.
Mccamey: Thank you.
Mccamey: Once again, please press star one at this time.
Mccamey: Question, if you have any question.
Speaker Change: The following question is from Don Demarco from National Bank Financial. Please go ahead.
Don Demarco: Thank you operator, and good morning, John and team so.
The first question it looks like a bit of a catch up on sustaining capex over the rest of the year is this as expected and aligned with your you plan basic reductions and lower costs in HD.
Don Demarco: Yes, that's correct I mean sustaining capital is always going to be timing based than we had expected it to be a little bit lower in the first quarter end.
Don Demarco: Catch up over the rest of the year.
Got it okay.
Don Demarco: So sticking with costs I'm your full year guidance was issued before some of the tariff announcements in the states.
Don Demarco: Are you seeing any impacts from tariffs on your costs here.
Don Demarco: Or or maybe some of the FX volatility weighs on him.
Don Demarco: So we aren't seeing any of the impact on tariffs now and then I'll step back and say that about 50% of our cost structure is labor and contractors and contractors are predominantly labor as well.
Don Demarco: So no real exposure there as well as on there's another 15%, that's that's energy and fuel.
Don Demarco: So majority of our cost base is not really exposed to anything that could potentially have tariffs on it.
Don Demarco: But right now we aren't experiencing anything what we are experiencing is the last part of what you said, which is a weaker Canadian dollar compared to what we had budgeted. So we are benefiting from that.
Don Demarco: Okay. Good.
Don Demarco: Good to hear then maybe just looking ahead I mean indicate potential for a million ounces a year with further expansion of Ireland.
Don Demarco: Can you add some color onto the island expansion study that's pending released in Q4, including maybe the scope the.
Don Demarco: The timing and magnitude of the capex it might be related to that study.
Don Demarco: Well, we're I mean as.
Don Demarco: As far as the larger mill complex, we're still working through that and we don't have specific numbers that we can talk to at this point, it's a bit too early yeah, but it is I think we've talked about where we've communicated that we're going to put out a <unk>.
Don Demarco: Element plan by the end of the year.
Don Demarco: Which would talk about what the larger mill complex would look like both from supporting Marino mining rates, but as well as looking at island underground mining rates to see if we can go but certainly beyond the 2400 tons. A day that's part of what we're contemplating is looking to bring the underground component of that mill feed to about 3000 tonnes per day from Ireland underground.
Don Demarco: Okay.
Speaker Change: Okay, great. Thank you that's all for me and good luck with Q2 and the rest of the year.
Don Demarco: Thank you.
Speaker Change: We have no further questions.
Speaker Change: I would now like to turn the meeting back over to Mr.
Oscar: Thanks Oscar.
Speaker Change: Thank you operator.
Speaker Change: I just wanted to say in conclusion, you know that we you know we have a long history of meeting or exceeding our guidance and.
Speaker Change: And we take pride in that record.
Speaker Change: I think it's it.
Speaker Change: At least five years, where we've we've either met or exceeded guidance.
Speaker Change: So coming in at the low end of production and and higher on costs, it's not illustrative of our track record and it's not indicative of our expected performance for 2025, we're already on track for a much stronger second quarter and further improvement in the second half of the year.
Speaker Change: And Furthermore, if you take a look at our three year.
Speaker Change: The outlook it continues to demonstrate that our we're gonna have further.
Speaker Change: The growth in production and further declines in costs or our outlook.
Speaker Change: It looks better than ever so from that point of view as a management team we remain very confident in what we're doing.
Speaker Change: We saw the market reaction this morning to our to the quarterly results and we think it's.
Speaker Change: Certainly.
Speaker Change: We're done we we have a strong year in front of us.
Speaker Change: We've come through a tough quarter, but but stronger quarters lie ahead, and we're very very confident in our ability to deliver on that.
Speaker Change: So with that I'll I'll.
Speaker Change: I'll conclude my remarks, and turn it back to you operator.
Speaker Change: Thank you.
Speaker Change: The conference has now ended.
Speaker Change: Please disconnect your lines at this time.
Speaker Change: We thank you for your participation.
Speaker Change: Okay.
Speaker Change: Yeah.