Q1 2025 Alamos Gold Inc Earnings Call
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Scott Parsons: All participants please standby your conference is ready to begin good morning, I'll turn I'll now turn the call over to Mr. Scott Parsons animals.
Operator: Your conference is ready to begin. Good morning.
Scott Parsons: I'll now turn the call over to Mr. Scott Parsons, Alamos Senior Vice President of Corporate Development and Investor Relations. Please go ahead, sir.
Speaker Change: Corporate development and Investor Relations. Please go ahead Sir.
Scott Parsons: Thank you, operator. And thanks to everybody for attending Alamos first quarter 2025 conference call.
Speaker Change: Thank you operator, and thanks to everybody for attending Alamos 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.
Scott Parsons: In addition to myself, we have on the line today, John McCluskey, President and Chief Executive Officer, Greg Fisher, Chief Financial Officer, Luc Guimond, Chief Operating Officer. We will be referring to a presentation during the conference call that is available through the webcast and on our website.
Speaker Change: We will be referring to a presentation. During the conference call that is available through the webcast and on our website I would also like to remind everyone that our presentation will be followed by a Q&A session.
Scott Parsons: I would also like to remind everyone that our presentation will be followed by a Q&A session.
Scott Parsons: As we will be making forward-looking statements during the call, please refer to the cautionary notes included in the presentation, news release, and MD&A, as well as the risk factors set out in our annual information form.
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.
Scott Parsons: Technical information in this presentation has been reviewed and approved by Chris Boswick, our Senior VP of Technical Services, and a qualified person. Also, please bear in mind that all of the dollar amounts mentioned in this conference call are in U.S. dollars, unless otherwise noted.
Speaker Change: 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 McCluskey: Now, John will provide you with an overview. Thank you, Scott. I'd like to turn your attention to slide three. We produced 125,000 ounces of gold in the first quarter, consistent with the lower end of quarterly guidance. Island Gold continues to perform well, offsetting a slower start to the year from Young-Davidson and Magino. As we will outline through this call, we have seen a significant improvement from both operations in April and expect this to contribute to a stronger production in the second quarter. With a further increase in production expected into the second half of the year, driven by higher grades and mining rates at Island Gold and increasing grades at Liaquigrande, we remain well positioned to meet our full year production guidelines.
John McCluskey: 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 of 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 and increasing grades at La Yaqui 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 Gino increased royalties due to the sharply higher gold price and higher share based compensation, given the 45% increase in alamos share price during the quarter.
John McCluskey: All in sustaining costs for the quarter were above our first-half guidance, reflecting lower production at Young, Davidson and Maginot, increased royalties due to the sharply higher gold price, and higher share-based compensation given the 45% increase in Alamos' share price during the quarter. Through a combination of higher tons and grades processed, we expect rising production and a significant improvement in our costs through the remainder of the year. We expect this to drive a 20% decrease in all in sustaining costs in the second quarter with further decreases into the second half.
Speaker Change: Through a combination of higher tonnages and grades processed we expect rising production at 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.
John McCluskey: Tuning in now to slide four. 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. Following our construction decision at Lynn Lake earlier in the year, we attended a groundbreaking ceremony alongside the Premier of Manitoba, as well as representatives from the First Nations and local communities. Construction activities are ramping up and will be completed over the next three years, with initial production expected in the first half of 2028. In February, we announced a 31% increase in our global mineral reserves to 14 million ounces.
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 local communities.
<unk> 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.
John McCluskey: 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. We will be incorporating this growth along with large mineral reserves, along with the large mineral reserve at Maginot into an expansion study to be completed in the fourth quarter that we expect will outline significantly larger and more valuable operations.
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.
John McCluskey: Turning to slide five. Our outlook has never been stronger, and we have never been better positioned. We have one of the strongest growth profiles in the sector, underpinned by three high-return projects. All of this growth is fully funded. started last year at a run rate of 500,000 oz per year. With the addition of Mageno, we expect to produce approximately 600,000 oz this year. With the Phase III expansion and its final full year of construction, we expect further growth to 700,000 oz per year by 2027, with all-in sustaining costs trending lower to approximately $1,200 per oz.
Speaker Change: Our outlook has never been stronger and we have never been better positioned we are one of the strongest growth profiles in 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 with the addition of Juno, we expect to produce approximately 600000 ounces. This year with the phase III expansion in its final full Europe construction, we expect further growth to 700000 ounces per year by 2027 with all in sustaining costs trending lower to approximately 12.
Speaker Change: $3 per ounce.
Speaker Change: With initial production from the Little Lake project expected in the first half of 2028, our longer term production rate is expected to increase to 900000 ounces peer with them with a further decrease in costs.
John McCluskey: With initial production from the Lynn Lake Project expected in the first half of 2028, our longer-term production rate is expected to increase to 900,000 ounces per year with a further decrease in cost. At current gold prices, our all-in sustaining cost margin is expected to exceed $2,000 per ounce, supporting over $1 billion in annual free cash flow. Longer term, we see excellent potential to take the company wide production to one million ounces per year with a further expansion of the Allen Gold District.
Speaker Change: Our 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.
Speaker Change: Longer term, we see excellent potential to take the company wide production to 1 million ounces per year with a further expansion of the article district.
Speaker Change: Turning to slide six.
John McCluskey: Turning to slide six. 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 the Phase 3 plus expansion on track for completion in the first half of 2026, we expect considerably higher free cash flow starting in the second half of 2026.
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 the phase III plus expansion on track for completion in the first half of 2026, we expect considerably higher free cash flow starting in the second half of 'twenty.
Speaker Change: 26, we expect further growth into 2027 and beyond driven by higher production lower costs and decrease in capital with a start up production from the P. D a little lake projects.
John McCluskey: We expect further growth into 2027 and beyond, driven by higher production, lower costs, and decreasing capital with the start of production from the PDA and Little Acres.
Greg Fisher: I will now turn the call over to our CFO, Greg Fisher, to review our financial performance. Thank you, John. On to slide seven. We sold approximately 118,000 ounces of gold in the first quarter at an average realized price of $2,802 per ounce for revenues of $333 million. The average realized price was below the London PMFIX for the quarter, primarily as a result of delivering over 12,300 ounces into the gold prepayment facility based on a prepaid price of $2,524 per ounce. We will continue to deliver the same quarterly number of ounces into the facility until the obligation is completed at year end.
Speaker Change: I'll now turn the call over to our CFO, Greg Fisher to review our financial performance right.
Greg Fisher: Thank you John.
Greg Fisher: On slide seven we sold approximately 118000 ounces of gold in the first quarter at an average realized price of two.
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 prepaid facility was executed in July 2024, with the proceeds utilized to retire 180,000 ounces of forward sale contracts inherited from Argonaut Gold across 2024 and 2025, with an average price of $1,840 per ounce. Total cash cost is $1,193 per ounce. and an all-sustaining cost of $1,805 per ounce were both above the top end of the guidance for the first half of 2025, driven by higher costs at Young, Davidson, and Mugino, as well as higher royalties and share-based compensation. 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 to all unsustaining costs compared to our guidance.
Greg Fisher: As a reminder, the prepay facility was executed in July 'twenty 'twenty four with the proceeds utilized to retire 180000 ounces forward sale contracts inherited from Argonaut gold across 2024, and 2025 with an average price of $1840 per ounce.
Speaker Change: Total cash cost of $1193 per ounce.
Speaker Change: 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.
Speaker Change: 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 to all in sustaining cost compared to our guidance.
Greg Fisher: All 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. We are monitoring our full-year cost guidance given the higher share-based compensation and royalty costs compared to 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. Our reported net earnings were $15 million in the first quarter, or $0.04 per share. This included $46 million of unrealized losses on commodity hedge derivatives for the legacy Argonaut 2026 and 2027 gold hedges, and other adjustments totaling $2 million.
Speaker Change: 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.
Speaker Change: We're monitoring our full year cost guidance, given the higher share based compensation and royalty costs 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.
Speaker Change: Our reported net earnings were $15 million in the first quarter or four cents per share.
Speaker Change: This included 46 million of unrealized losses on commodity hedges derivatives for the legacy argued at 2026 in 2027 gold hedges and other adjustments totaling $2 million.
Greg Fisher: Excluding these items are adjusted net earnings worth $60 million or $0.14 per share. Operating cash flow before changes in non-cash working capital was $131 million in the first quarter, or $0.31 per share. Capital spending totaled $100 million and included $27 million of sustaining capital, $66 million of growth capital, and $7 million of capitalized expiry. Precastle 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. Cash tax payments are expected to decrease over the remainder of the year of between $10 and $15 million per quarter.
Speaker Change: Excluding these items, our adjusted net earnings were 60 million or 14 cents per share.
Speaker Change: Operating cash flow before changes in noncash working capital was $131 million in the first quarter were 31 cents per share capital spending totaled 100 billion and included $27 million of sustaining capital $66 million of growth capital and 7 million of capitalized exploration.
Speaker Change: 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.
Speaker Change: 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 flows through the remainder of the year, driven by higher production, lower costs, and lower cash tax payments. Combined with a strong cash position of $290 million and nearly $800 million in total liquidity, we remain well positioned to internally fund our growth plan.
Speaker Change: We expect stronger free cash flow through the remainder of the year driven by higher production lower cost and lower cash tax payments.
Speaker Change: With a strong cash position of $290 million and nearly $800 million in total liquidity.
Speaker Change: We remain well positioned to internally fund our growth plans I will now.
Luc Guimond: I'll now turn the call over to our COO, Luc Guimond, to provide an overview of our operation. Thank you, Greg. Over to slide 8. Production from the Island Gold District totaled 59,200 ounces in the quarter, with the strong performance of Island Gold offsetting lower production from it. At Island Gold, mining and milling rates, as well as grades, were all consistent with annual guidance. This included 1200 tons per day process with grades averaging 11.36 grams per ton. Milling rates on Mageno were lower than planned, averaging 7,200 tons per day. As I will review shortly, deficiencies in the overflow design limited throughput rates earlier in the quarter.
Speaker Change: I'll turn the call over to our CFO to provide an overview of our operations.
Speaker Change: Thank you Greg.
Speaker Change: Over to slide eight.
Speaker Change: <unk> 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: Alan 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 imogene 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.
Luc Guimond: These have since been rectified, which has driven significantly higher throughput rates into March and April. Grades processed at Maginot averaged 0.86 grams per tonne, slightly below annual guidance. Given the lower mill availability in the quarter, mining activities were focused on waste stripping. With less ore mined, less of the relatively higher grade ore was available for processing. Mining rates have improved to average over 15,000 tons per day of ore in April and are expected to remain at similar levels through the rest of the year. This is expected to support the availability of higher grades for processing through the remainder of the year.
Speaker Change: These have 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.
Given the lower mill availability in the quarter mining activities were focused on waste stripping.
Speaker Change: With less ore mined less of the relatively higher grade ore was available for processing.
Speaker Change: Mining rates have improved average over 15000 tons per day of ore in April and.
Speaker Change: And are expected 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 decrease in costs from the marginal portion of the operation through the remainder of the year.
Luc Guimond: Combined with higher milling rates, we expect significant improvement in production and decrease in costs from the Maginot portion of the operation through the remainder of the year. With a strong contribution from Island Gold, the combined operation generated positive mine site free cash flow of $19 million in the quarter, net of significant capital investments in the Phase 3 Plus expansion, and a robust exploration program. The operation is expected to continue self-funding the Phase 3 Plus expansion at current gold prices, with significant free cash flow growth following its completion in 2026.
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 net.
Speaker Change: That's a significant capital investments in the phase III plus expansion.
Speaker Change: And a robust exploration program.
Speaker Change: The operation is expected to continue self funding the phase III expansion at current gold prices with significant free cash flow growth following its completion in 2026.
Speaker Change: Yeah.
Luc Guimond: Moving to slide 9, Maginot had a challenging start to the year, but we believe we have now turned the corner with milling rates steadily improving and nearing plan levels. Milling rates were lower than planned due to restricted oil flow through the crushing and conveying circuit. This was caused by deficiencies in the initial overflow design for winter conditions, which created blockages within the feeders and undersized transfer sheets. Shoots were expanded during the quarter and combined with the various optimization activities undertaken in the second half of 2024, milling rates increased substantially towards the end of the quarter.
Speaker Change: Moving to slide nine.
Speaker Change: Marino 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 with further improvement expected in may.
Luc Guimond: Milling rates increased to an average of 8,200 tonnes per day in March, and approximately 9,500 tonnes per day in the last two weeks of April, with further improvement expected in May. In advance of the transition to processing Island Gold ore through the Maginot Mill, approximately 8,000 tons of high-grade ore from Island Gold were blended with Maginot ore and processed through the Maginot Mill in April. The batch test was successful with recoveries averaging 96% from the blended ore, in line with expectations. With the significant improvement in Maginot's milling rates and successful batch tests of Island Gold's high-grade ore, Island Gold's mill is expected to shut down in early May, following which ore from Island Gold will be trucked and processed to the larger and more cost-effective Maginot mill.
Speaker Change: 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 bilingual where blended with machine or in process through the merino mill in April.
Speaker Change: The batch test was successful with recoveries, averaging 96% from the blended or in line with expectations.
Speaker Change: But the significant improvement in the genome billing rates and successful batch test of island Gold high grade ore Island 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 the genome milk.
Luc Guimond: Given the significantly lower processing costs from utilizing the Maginot Mill, this is expected to contribute to declining costs through the remainder of the year.
Speaker Change: Given the significantly lower processing costs from utilizing them at Juno mill.
Speaker Change: This is expected to contribute to the declining costs through the remainder of the year.
Speaker Change: Moving to slide 10.
Luc Guimond: Moving to slide 10. The transition to the Maginot Mill is an important step towards the completion of the Phase 3 Plus expansion. The Maginot Hall Road is now substantially complete and will be used to transport ore from the Island Gold Portal to the Maginot Mill. Progress is being made on the mill expansion at 12,400 tons per day with bulk earthworks underway and detailed engineering ongoing to support a larger, longer-term expansion of the mill. within the shaft site area. continue to make progress, having recently completed the second shaft station break chute at the 1050 level. At quarter-end, the shaft sink had reached a depth of 1,055 metres and remained on track to reach the ultimate depth of 1,373 metres in the third quarter of this year.
Speaker Change: The transition to the mid Gino mill is an important step towards the completion of the phase III plus expansion.
Speaker Change: 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 at 12400 tons per day with Earth works underway and detail engineering ongoing to support a larger longer term expansion of the mill.
Speaker Change: Within the shafts site area, we continue to make progress having recently completed the second shaft 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 still now erected and bore holes for the delivery of paced underground completed in advance of lighter installation.
Luc Guimond: The construction of the paste plant is also advancing well with 30% of the building steel now erected and boreholes for the delivery of paste underground completed in advance of liner installation.
Speaker Change: Over to slide 11.
Luc Guimond: Over to slide 11. As of quarter end, we spent and committed 75% of the total phase 3 plus expansion capital of $796 million. The expansion remains on track for completion in the first half of 2026. It will be a significant driver of low-cost production growth and free cash flow generation.
Speaker Change: As of quarter end, we spent and committed 75% of the total phase III plus expansion capital of 796 million.
Speaker Change: The expansion remains on track for completion in the first half of 2026, it'll be a significant driver of low cost production growth and free cash flow generation.
Speaker Change: Over to slide 12.
Luc Guimond: Over to slide 12. Young-Davidson produced 35,400 ounces in the first quarter, lower than planned due to lower mining rates. Lower production drilling and scoop availability in the first two months of the quarter impact stow productivity and mining. Production drilling meters and SCUPA availability improved within the quarter and mining rates were back to design capacity of 8,000 tons per day in March and April and are expected to remain at similar levels throughout the rest of the year. 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: Young Davidson produced 35400 ounces in the first quarter lower than planned due to lower milling.
Speaker Change: Laura than planned due to lower mining rates.
Speaker Change: Lower production drilling in scoop availability in the first two months of the quarter impact store 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: Two higher mining and processing rates as well as increased grades production is expected to increase and cost decrease the remainder of the year.
Speaker Change: With another strong quarter of mine site free cash flow of 39 million young.
Luc Guimond: With another strong quarter of mine site free cash flow of $39 million, Young-Davidson is on track to deliver more than $100 million of free cash flow for the fifth consecutive year.
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.
Luc Guimond: Over to slide 13. Total production from the Mulatos District was 30,400 ounces in the quarter, with two-thirds of production coming from Layaqui Grande and the remainder from residual leaching at Mulatos. As previously guided, grades of the IAC were expected to be at the low end of the guidance range in the first quarter and steadily increase throughout the year. With lower grades stacked in the corridor at Leyaque Grande, and higher contribution from residual leaching, costs were above the top end of the annual guidance. Costs are expected to trend lower through the year as production increases, driven by higher grades from Oyaki Ground.
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 a whole lot of <unk>.
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.
Luc Guimond: The environmental permit amendment for the PDA project was received in late January, allowing for the start of construction activities. The focus during the quarter was on procurement of long lead items and detailed engineering. Construction activities are expected to ramp up towards the middle of the year with first production on track for mid-2027. Mindsight Free Cash Flow totaled $1 million in the quarter, net of $48 million in cash tax payments for the 2024 year. With production increasing and costs decreasing, the Mulatos District is expected to generate strong mine site free cash flow through the remainder of the year while funding the development of PDA and a robust exploration program.
Speaker Change: Our mental permit amendment for the PDA project was received in late January allowing for the startup construction activities.
Speaker Change: Our focus during the quarter was on procurement of long lead items and detailed engineering.
Speaker Change: Construction activities are expected to ramp up towards the middle of the year with first production on track for mid 2027.
Speaker Change: Yeah.
Speaker Change: Mine site free cash flow totaled $1 million in the quarter net of $48 million in cash tax payments for the 'twenty 'twenty four 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 McCluskey: With that, I will turn the call back to John. Thank you, Luke.
John: Thank you Luke.
Operator: I'll now turn the call over to the operator who will open the call for your questions.
John: I'll now turn the call over to the operator, who will.
John: 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.
Operator: After that, I'm going to ask the operator to turn the call back to me for some final remarks. Certainly. Thank you. We will now take questions from the telephone line. If you have a question, please press star 1. You may cancel your question at any time by pressing start. Please press star 1 at this time if you have a question. There will be a brief pause while participants register for questions. We thank you for your.
Jamie: So Jamie.
John: Thank you.
John: We will now take questions from the telephone lines.
John: You have a question.
John: Press Star one.
John: So on your question at any time by pressing star two.
T Smith: T Smith.
John: If you have any question.
John: Yes.
John: All participants for questions.
John: Thank you for your patience.
John: Okay.
John: My first question is from Cosmos <unk> from CIBC. Please go ahead.
Cosmos Chiu: Our first question is from Cosmos Chiu from CIBC, please go ahead. Thanks, John, Greg, Luc, and Maybe my first question is on the Maginot Mill, sounds like some of the issues in terms of the restrictions of the conveyor or conveying and crushing bottlenecks have now been rectified. Now looking at, you know, you're getting to close to 9500 times per day in terms of throughput. But I guess my question is, previously, you had expected to get to 11,200 times per day by the end of Q1.
Speaker Change: Thanks, John right now.
John: Oh, maybe my first question is on them or Geno mill.
Speaker Change: It sounds like some of the issues in terms of the.
Speaker Change: Ah restrictions, where they can 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.
Speaker Change: But I guess my question is previously you've got to expect it 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, and you need to reach that level before you can fully integrate.
Michael Parkin: Is that still what you're trying to aim for near term in terms of getting up to 11,200 Unknown Attendee, Michael Parkin, Alamos Gold Inc.
Speaker Change: The island gold and or Geno and shut down the island gold mill.
Speaker Change: Yeah, Hi, Cosmos look here.
Luc Guimond: Yeah, hi Cosmo, it's Luke here. As I touched on in the, in the communication. Our expectation is actually we're going to make that transition at the beginning of May, actually at the end of next week. We've seen some continuous improvements certainly over the last three quarters as we've talked about with regards to the jaw crusher, cone crusher. And 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've since addressed those. And as I mentioned, at the end of April, we were running at 9,500 tons per day.
Speaker Change: As I touched on in the.
Speaker Change: In the.
Speaker Change: Communication, our expectations actually we're gonna 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: And 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.
Luc Guimond: We had a couple of smaller, minor operational issues, to be frank with you, that would have actually put us well above 10,000 tons per day with regards to running the processing plant. And really, the final step for us was to be able to complete the higher-grade batch test of Island Gold ore commingled with the Maginot ore, just to validate the metallurgical recoveries in the processing plant from a plant-scale perspective, and we did that. And we had no issues with regards to the overall performance of 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 bringing all of the Island ore, underground ore, over to Maginot, and being processed on a commingling basis with the Maginot ore.
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 in the processing plants from a plant scale perspective, and we did that.
Speaker Change: And 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 bringing all of the island or the.
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 the numbers I bring up the 11200 tonnes per day I know that was the number that was given out previously.
Cosmos Chiu: I guess in terms of numbers, I bring up the 11,200 tons per day. I know that was a number that was given out previously. Is that a number that we should stick to or is that still like a number that we should look as a target or not so much these days? I guess that's really the crux of my question. No, that's still the number we expect to deliver on, Cosmo, is the 11,200 tonnes per day as we move forward here through the remainder of the year. Sounds good.
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.
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 and then maybe moving to young Davidson here just a quick question.
Cosmos Chiu: And then maybe moving to Young-Davidson here, just a quick question on Young-Davidson. You know, it's always been steady as she goes, very steady operation. I was kind of surprised that throughput on mining output was a bit lower in Q1. As you mentioned, due to kind of equipment availability underground. Is that due to kind of the age of the equipment? Can you maybe comment on that? Is there any kind of renewal of equipment needed at this point in time? Or is it just really kind of like a maintenance? Actually, I don't know.
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: I'll put it was a bit lower.
Speaker Change: In Q1, as you mentioned due to kind of equipment availability underground.
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 the age of the equipment.
Luc Guimond: Maybe you can just touch on what happened and should we be concerned about the age of the equipment? Sure, it was really more mining sequence related, to be honest with you Cosmo, you know, typically with the lower mine infrastructure, from 9590 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 transport point required to be able to provide that ore distribution down into the lower mine. And as a result of that, we had some more productive stokes that we were expecting through the first quarter in the lower mine that are much more productive for us to be able to maintain the 8,000 tonnes per day.
Speaker Change: Sure It is.
Speaker Change: It was really more mining sequence related to be honest with you Cosmo.
Speaker Change: Typically with the lower mine infrastructure.
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 know are much more productive for us to be able to maintain that 8000 tonnes per day, we typically like to keep about a 50 50 blend.
Luc Guimond: We typically like to keep about a 50-50 blend, and as a result of some of those stokes not coming online in a timely fashion in the first quarter... In combination with, you know, a couple of production drills 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 drills that we had to address. And that really affected the performance in the quarter. But as far as the overall... Fleet management and replacement management of our equipment, it's always done in a timely fashion.
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 you know 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 you know it.
Speaker Change: 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 retailing for me up reminded the lower mine.
Luc Guimond: 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 for re-handling from the upper mine to the lower mine. But 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. You know, based on operating hours and the life cycle of those pieces of equipment.
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.
Speaker Change: You know based on operating hours in the lifecycle of those pieces of equipment.
Speaker Change: Understood.
Unknown Attendee: Understood.
Cosmos Chiu: Maybe just one last question, turning to likely Greg here. Two things on the on the guidance and costs.
Greg: Maybe just one last question turning to likely right Greg here.
Speaker Change: Yeah.
Speaker Change: Two things on the 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.
Greg Fisher: Number one, Greg, can you remind us what kind of gold price assumption you factored into your cost guidance for the 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, maybe this past year. But how does it work? Like normally, higher kind of revaluation of management compensation that was issued in a previous quarter, the revaluation, does it usually get into your, your own sustaining cost number for the quarter?
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.
Speaker Change: 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 your your all in sustaining cost number for the quarter and number two you know yeah, it's up 45% year to date, but.
Greg Fisher: And number two, you know, yeah, it's up 45% year to date, but today, your share price is down 11%. So doesn't that mean later on, it might get revalued again, in terms of those management compensation expenditures? And does that mean we're going to see like a reversal of today's $230 announced sometime later on? Doesn't that introduce a lot of volatility into that, into that number?
Speaker Change: Are they your share price is down 11%. So it doesn't that mean later on it might get revalued again in terms of those management compensation expenditures and does that mean, we're going to see like a reversal of today's $230 an ounce.
Speaker Change: Sometime later other than that introduce a lot of volatility into that into that number.
Greg: Yeah Cosmos, it's Greg here.
Greg Fisher: Yeah, Cosmos, it's Greg here. So I'll answer the easy question first, which is the gold price assumption. That was $2,400. So we had budgeted that and obviously the increase in the gold price above that $2,400 has an impact on royalties expense as well as other charges that are related to to mine site performance. On the stock-based compensation, I mean, it relates to the fact that we issue PSUs, RSUs, DSUs, and they all have terms of, you know, called three years or longer. Those all need, so it's all from either units that have been issued in the past.
Greg: So the easy question first which is the gold price assumption that was $2400. So we had a budget at 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: On the stock based compensation, a I mean, it relates to the fact that we issue.
Greg: Use RSC was D S use and they all have terms of call it three years or longer 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 marked to market every quarter. So to your point, could we see a reversal of this? Yes. I mean, if the share price drops, you have a negative mark to market. And if the price increases, you have a positive mark to market. Why it was so profound this quarter was because we were up 45% in the quarter, which we've never seen before. And, you know, frankly, it's a good thing. So, yeah, I mean, that's just how the accounting works on that.
Greg: 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 we see 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 it was.
Greg: So profound this quarter was because we were up 45% in the quarter, which we've never seen before.
Greg: Frankly, it's a good thing.
Greg: Yeah. So yeah I mean, that's just how the accounting works on that and.
Greg Fisher: Every company will include stock-based compensation in their definition of all sustaining costs. Great.
Greg: Every company will include stock based compensation in their definition of all in sustaining costs.
Greg: Okay.
Greg: Great.
Cosmos Chiu: Thanks, John and team. Those are the questions I have. Thank you.
Greg: Thanks, John and team those are all the questions I have thank you.
Greg: Thank you following question is from Michael.
Michael Cipurko: The following question is from Michael Cipurko from RBC Capital Markets. Thanks very much for taking my question. Just on the Magino, I know you said higher grades over the rest of the year on the higher milling. Apologies if I missed it somewhere, but are you able to quantify that? Should we be thinking back in line with original guidance? Or is there potential for a bit of a catch up and some higher grades? Yeah, we should, we'll track to being within guidance for the rest of the year with regards to Mageno, with regards to the grade profile that we would have put out at the beginning of the year.
Speaker Change: From RBC capital markets. Please go ahead.
Speaker Change: Yes, thanks very much for taking my question.
Speaker Change: Just on the Gino 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 or is there a potential for a bit of a catch up in some higher grade.
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 open 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.
Michael Cipurko: I mean, we're slightly below on the Mageno side, certainly 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 had with regards to the crushing and conveying, with regards to those drop chutes that we had to replace. So that prevented us from getting all of the higher grade portion of the ore that we were expecting in the corridor, which would have put us within guidance. Okay, makes sense.
Speaker Change: The.
Speaker Change: Crushing and conveying with regards to those drops you said we had to.
Speaker Change: To replace.
Speaker Change: 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 margin on the island.
Luc Guimond: And then just another question on the testing you were doing blending the Maginot and Island ore, what sort of grade were you testing there in terms of the Maginot material? And are you confident at those levels of recovery, sort of no matter, no matter what you're putting into the mill between the Island ore and the Maginot ore? Yeah, we're comfortable. I mean, the high-grade test, we ran about 8,500 tons of Island Ore co-mingling with the Magena Ore. The Island Ore was running, you know, from a day-to-day perspective anywhere from 7 to 10 grams on average in that range, with Magena Ore that was running at about 0.9 at that point.
Speaker Change: Sure.
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 recovery sort of no matter no matter, what you're putting into the mill between the island or in the mid genome or.
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: You know from a day to day perspective anywhere from seven to 10 grams on average in that range with merino, where that was running at about <unk> nine at that point. So that's you know typically the sort of blend that we would expect to see.
Luc Guimond: So, that's, you know, typically the sort of blend that we would expect to see as we start to continue to co-mingle this ore for the long-term running that entire plant with both ore sources feeding into the one mill. And the overall recovery that I mentioned, we're in our expectation, we ended up with about a 96% recovery overall on the combined ore stream, which is what our expectation.
Speaker Change: As we start to continue to commingle, the sort for the long term running that entire plant with both our sources feeding into the into the into the one mill and the overall recoveries that I mentioned.
Speaker Change: 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: The construction really starts to ramp up in the second half you'll soon have.
Speaker Change: Three projects.
Speaker Change: The dogs can you give any color on how you're managing that sequencing it or otherwise managing risk over the next couple of years.
Luc Guimond: Yeah, we're I mean, you know, our phase three plus expansion is well well underway. I mean, we're well over halfway through certainly, the shaft depth is nearing completion there by the end of this year. The paste plant, we're starting construction, it's not on a critical path, but we expect to have that completed by the end of the year. The next phase, obviously, for us is the continued mill expansion to support more throughput through the Maginot Mill, and we're working through that. Time-wise, 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 people to be able to manage the phase three plus expansion.
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 paste 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 the marginal mill.
Speaker Change: We're working through that time wise are expecting to have that completed in the second half of 2026, well 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.
Luc Guimond: With regards to Mexico, PDA, we've done a number of projects down there over the 20-year period, and we basically have the team that's seconded within our operations team to be able to manage these projects. That's the way we've always done it in Mexico over the 20-year period, so we already have a couple of people that we need to be able to deliver on PDA, certainly with regards to the construction on the milling infrastructure that we're going to be building there. On the mining side, it's going to be managed also with our operations team, but it'll be contract mining, so there'll be a complement of people that obviously will oversee that on the contract side.
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 AR 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.
Michael Cipurko: And then Lynn Lake, certainly we're in the early stages of that, but we're in the process of building our team. All of 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 those three areas of growth over the next couple of years. Okay, great. Thank you very much. Appreciate it all.
Speaker Change: And then Lynn Lake 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 to 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.
Ovais Habib: Our following question is from Ovais Habib from Scotiabank. Thanks, operator. Hi, Alamos team. Just a couple of questions for me. Most of my questions have been answered. One question that's been coming up since my calls this morning is just on the ASIC side. So, basically, in terms of, you know, based on your Q1 results, and you're expecting that 20% decline in ASIC, we're kind of estimating kind of, you know, you would need about to hit about $1,000 to $1,050 per ounce in order to achieve your cost guidance or ASIC guidance. You know, how confident are you in terms of, you know, achieving these cost levels?
Speaker Change: <unk> question is from all of us.
Speaker Change: From.
Speaker Change: From Scotiabank.
Speaker Change: Thank you. Please go ahead thanks.
Speaker Change: Thanks, operator.
Speaker Change: Hi, Alamos team.
Speaker Change: Just a couple of questions from me most of my questions have been answered one question that means coming up since my calls. This morning is just on the ASIC side. So.
Speaker Change: So basically in terms of you know based on your Q1 results and Youre expecting that a 20% decline in ASIC, we were 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 is the guidance you know 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.
Greg Fisher: Hey Ovasis, it's Greg here. So we are very confident in what we can control, which is, you know, our operating costs, our sustaining capital, that is tracking well against the budget. What we really don't have any control over or and don't have any foresight on is where the gold price is going to go and the share price. Those are two things that we have some control, but actually don't have control over and therefore can't manage the impact on the cost. So really what we're saying is. From what we have oversight on, we're very comfortable with respect to budget.
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 the share price those are two things that we.
Speaker Change: Have some control I 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.
Ovais Habib: We are over budget on what we have put in the guidance for our share-based compensation and the royalty expense, and if that continues to impact us, then it could have an impact on our overall cost guidance. Unknown Speaker Okay, thanks for that, Greg.
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.
Greg Fisher: Okay. Thanks for that Greg.
Ovais Habib: And just moving on quickly on to on the exploration side that Island Gold, you guys hit some pretty good results on the western side of Island Gold.
Speaker Change: Just moving on quickly onto a on the exploration side that Oh, Thank God you.
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.
Scott Parsons: Is there plans to continue drilling on that side and and any any sort of color on that front?
Speaker Change: Hi.
Scott Parsons: Hi, it's Scott Parsons, VP of Exploration. Yeah, those results were encouraging and positive and drilling is ongoing as we speak in the western part of Ireland, both from underground and surface, following up on the up plunge extension of the western ore chute. So that continues to grow and expand as we step out. We had a good increase in resources there the end of last year and we continue to step out both closer to surface with surface drills and underground from our underground platforms in that area.
Speaker Change: Scott Parsons, our VP of exploration, yes that that those results were a were encouraging and positive and drilling is ongoing as we speak in.
Speaker Change: In the western part of while in both from underground and surface falling up on the up plunge extension of the western Oreshoot. So that continues.
Speaker Change: 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.
Scott Parsons: And with those underground platforms, you know, Scott, I mean, is there a possibility that you have, you know, infrastructure to actually mine those areas as well? Yeah, that's our approach with basically establishing our exploration drifts underground is utilizing them initially for exploration. We'll put a drill at the end of the platform's drill, we hit mineralization and define a resource. We'll extend that platform further to be able to infill drill, convert it to reserves, but also to continue exploration, and ultimately those will be used for production in the future.
Speaker Change: The structure to actually find those areas as well.
Speaker Change: Yeah, that's our approach with the basically establishing our exploration drifts underground as youre utilizing them initially for exploration well, we'll put a drill at the end of the platforms drove 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: That's it for me. Thank you for taking my questions.
Ovais Habib: That's it for me. Thank you for taking my questions.
Speaker Change: Thank you.
Kerry Mercury: The following question is from Kerry Mercury from Canaccord Genuity, please go ahead. Good morning, guys, just a couple of follow ups on the Gino, you've made a lot of upgrades to the processing circuit there.
Speaker Change: The following question is from Mccamey.
Speaker Change: From Canaccord Genuity. Please go ahead.
Speaker Change: 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.
Luc Guimond: Are there any more upgrades that you still need to do to get to the 11 to or you kind of No, it's Luc here. No, we're there now. I mean, as I mentioned, we've, you know, we've made obviously a few modifications there from the original design that was installed. We can't emphasize that enough. Some poor design considerations there with regards to the crushing circuit and conveying circuit. We've made all of those changes. We've 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 and a high-grade component of island ore co-mingling with Maginot ore, and so we're confident on the metallurgical side of things.
Speaker Change: Are there any more upgrades that you still need to do to get to the 11, two or you're kind of there now.
Speaker Change: No. It's look here now where they are now I mean as I mentioned, we've you know we've made obviously you.
Speaker Change: A few modifications there from the original design that was installed who 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.
Speaker Change: 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, We're commingling with.
Speaker Change: 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.
Luc Guimond: So there's nothing stopping us now from moving forward and starting hitting our stride to that 11,200 tonnes per decade.
Speaker Change: So that 11200 tonnes per day.
Speaker Change: And as you think about the expansion to 15000 plus can.
Luc Guimond: And as you think about the expansion to, you know, 15,000 plus Can you just remind us what sort of components are going to need upgrades to get to that level? It's basically twinning the infrastructure that we have now, Kerry. It's talking about, you know, another crushing circuit, so two-stage crushing as well as two-stage grinding, with additional leach capacity, both CIP and CIL. up-sizing the elution circuit and up-sizing the refinery to actually handle higher gold content overall coming in on a bigger processing plant, potentially up to $20,000. and that's twinning the grinding circuit as well? Correct.
Speaker Change: Can you just remind us what sort of components are going to need upgrades to get to that level.
Speaker Change: 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 finding.
Speaker Change: With additional leach capacity, both CIP and CIL.
Speaker Change: Upsizing, the elution circuit and upsizing that refinery.
Speaker Change: Hi, handle higher gold content overall coming in on a bigger processing plant potentially up to 20000 tonnes per day.
Speaker Change: And that's twin twinning, the grinding circuit as well.
Speaker Change: Correct Yeah.
Operator: Okay, okay, great. Thank you. Again, please press star one at this time, if any question, if you have any.
Speaker Change: Okay. Okay, great. Thank you.
Speaker Change: Thank you.
Speaker Change: Once again, please press star one at this time.
Speaker Change: Question, if you have any questions.
Speaker Change: The following question is from Don Demarco from National Bank Financial. Please go ahead.
Don Demarco: The following question is from Don DeMarco from National Bank Financial, please go ahead. Thank you, operator. And good morning, John and team. So 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 planned ASIC reductions and lower costs in H2? Yes, that's correct. I mean, sustaining capital is always going to be timing based, and we had expected it to be a little bit lower in the first quarter and catch up over the rest of the year. Got it.
Don Demarco: Thank you operator, and good morning, John and team so.
Speaker Change: Your 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.
Speaker Change: 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.
Speaker Change: Catch up over the rest of the year.
Speaker Change: Got it okay.
Don Demarco: Okay.
Don Demarco: And so, you know, sticking with costs, I mean, full year guidance was issued before some of the tariff announcements in the States. Are you seeing any impacts from the tariffs on your costs here? Or maybe some of the FX volatility weighs on them? So we aren't seeing any of the impact on tariffs now, and I mean, I'll step back and say that about 50% of our cost structure is labor and contractors, and contractors are predominantly labor as well. So no real exposure there, as well as on, there's another 15% that's energy and fuel. So majority of our cost base is not really exposed to anything that could potentially have tariffs on it.
Speaker Change: So sticking with costs I'm your full year guidance was issued before some of the tariff announcements in the states.
Speaker Change: Are you seeing any impacts from tariffs on your costs here.
Speaker Change: Or or maybe some of the FX volatility weighs on them.
Speaker Change: 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 so no real exposure there as well as on there's another 15%, that's that's energy and fuel.
Speaker Change: So majority of our cost base is not really exposed to anything that could potentially have tariffs on it.
Greg Fisher: 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. Good to hear.
Speaker Change: Right now we aren't experiencing anything.
Speaker Change: 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.
Speaker Change: Okay. Good.
Speaker Change: Good to hear then maybe just looking ahead I mean indicate potential for a million ounces a year with further expansion of Ireland.
John McCluskey: Then maybe just looking ahead, I mean, you indicate potential for a million ounces a year with further expansion of island. Can you add some color on the island expansion study that's pending release in Q4, including maybe the scope, the timing and magnitudes of CAPEX that might be related to that study? Well, we're, I mean, as far as the larger mill complex, we're still working through that. We don't have specific numbers that we can talk to at this point. It's a bit too early. Okay. Yeah. But it's, I think we've talked about, we've communicated that we're going to put out a development plan by the end of the year, which would talk about what the larger mill complex would look like, both from supporting Maginot mining rates, but as well as looking at island underground mining rates to see if we can go certainly beyond the 2,400 tons a day.
Speaker Change: Can you add some color on to the island expansion study that's pending released in Q4, including maybe the scope are the timing and magnitude of the capex that might be related to that study.
Speaker Change: Well, we're I mean 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 okay. Yeah, but it is I think we've talked about where we've communicated that we're gonna put out.
Speaker Change: Development plan by the end of the year.
Speaker Change: Which would talk about what the larger mill complex would look like both from.
Speaker Change: Supporting the genome mining rates, but as well as looking at island underground mining rates to see if we can go but certainly if you're on the 2400 tons. A day. That's part of what we're contemplating is looking to bring the underground component of that mill feet to about 3000 tonnes per day from Ireland underground.
John McCluskey: As part of what we're contemplating is looking to bring the underground component of that mill feed to about 3,000 tons per day from island underground. Okay. Okay, great.
Speaker Change: 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. That's all for me and good luck with Q2 and the rest of the year. Thank you.
Speaker Change: Thank you.
Operator: We have no further questions registered at this time.
Speaker Change: We have no further questions.
John McCluskey: I would now like to turn the meeting back over to Mr. Thank you, operator. I just wanted to say in conclusion that we have a long history of meeting or exceeding our guidance. and we take pride in that record. I think it's at least five years where we've either met or exceeded guidance. So coming in at the low end of production 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.
I would now like to turn the meeting back over to Mr.
Speaker Change: Thanks Oscar.
Speaker Change: Thank you operator.
Speaker Change: I just wanted to say in conclusion, you know that we know we have a long history of meeting or exceeding our guidance.
Speaker Change: And we take pride in that record.
Speaker Change: I think it's.
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 outlook. It continues to demonstrate that our we're gonna have further.
John McCluskey: And furthermore, if you take a look at our three-year outlook, it continues to demonstrate that we're going to have further growth in production and further declines in costs. So our outlook, it looks better than. So from that point of view, as a management team, we remain very confident in what we're doing. We saw the market reaction this morning to the quarterly results. We think it's... has certainly overdone. We have a strong year in front of us. We've come through a tough quarter, but stronger quarters lie ahead. And we're very, very confident in our ability to deliver on that.
Speaker Change: 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 we saw the market reaction. This morning to our to the quarterly results and we think it's.
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.
John McCluskey: So with that, I'll conclude my remarks and turn it back to you, Operator.
Speaker Change: So with that I'll I'll.
Speaker Change: I'll conclude my remarks and turn.
Turn it back to you operator.
Speaker Change: Thank you.
Operator: The conference has now ended. Please disconnect your lines at this time. And we thank you for your.
Speaker Change: Conference has now ended.
Speaker Change: Please disconnect your lines at this time.
Speaker Change: And we thank you for your participation.
Speaker Change: Okay.
Speaker Change: Yeah.