Q1 2025 Endeavour Mining PLC Earnings Call
Okay.
When it comes to Endeavour Mining's first quarter 2025 results webcast. At this time all participants are in a listen only mode. After management's presentation. There will be a question answer session. So for those who wish to ask a question. Please dial in to the phone line.
Please note that due to time constraints, we would be prioritizing questions from covering analyst.
Today's conference call is being recorded and a transcript of the call will be available on Endeavour's website tomorrow.
Speaker Change: I would now like to hand, the conference over to Endeavour's, Vice President of Investor Relations Jack Kauffman. Please go ahead.
Speaker Change: Hello, everyone and welcome to Endeavour's Q1, 2025 results webcast.
Speaker Change: Before we start please note our usual disclaimer.
in Cockrell: On the call today I'm joined by in Cockrell, Chief Executive Officer.
Speaker Change: Chief Financial Officer, and Jody <unk> Executive Vice President of operations and ESG is joining us from Deca in Senegal.
in Cockrell: Okay.
Speaker Change: Today's call will follow our usual format.
Speaker Change: First go through the highlights Guy will present, the financials and Julia will present, our operating results by mine before handing back to Ian and his closing remarks.
Speaker Change: We'll then open the lineup for questions.
Guy: With that I'll hand over to him.
Speaker Change: Thank you Jack and Hello to everyone joining us on the call today.
Speaker Change: I am proud to say that we've delivered another strong operational and financial quarter for the first quarter of 2025 building on the momentum from the second half of last year.
Speaker Change: Our operating performance combined with disciplined cost management has enabled us to capitalize on the rising gold price environment.
Speaker Change: Generate record free cash flow.
Speaker Change: This has enabled us to significantly strengthen our financial position, surpassing our leverage target and positioning the group to deliver shareholder returns through this particularly exciting phase.
Speaker Change: We produced 341000 ounces of gold at an.
Speaker Change: All in sustaining cost of.
Speaker Change: 1100, $29 per ounce in the first quarter, placing us firmly on track to achieve our full year guidance.
Speaker Change: As we move through the year, we are planning to slightly lower production in the second half, but we'll focus on keeping our cost discipline and improving productivity and operational efficiencies to maintain a class leading cost and maximize free cash flow generation.
Speaker Change: Since the end of our organic growth growth phase in Q3, 2024 hour operations have generated $775 million in free cash flow and that represents over $795 for every single ounce, we've produced over that period.
Speaker Change: More importantly, our free cash flow generation has continued to grow in each quarter since the beginning of 2020 for demonstrating the quality of our improved portfolio and the benefits of bringing low cost production online in a rising gold price environment.
Speaker Change: As a result, we were able to reduce our net debt by $354 million and we reduced our leverage significantly down to 0.22 times net debt to adjusted EBITDA and <unk>.
Speaker Change: Below our long term targets of <unk> five times.
Speaker Change: We significantly strengthened our balance sheet and improved our financial flexibility, which allows us to focus on increasing shareholder returns and our longer term organic growth pipeline.
Speaker Change: We paid retro dividends for 2024 is $240 million and total return is 277 million equivalent to a five 9% indicative yield or $251 for every ounce that we produced.
Speaker Change: We expect to exceed that total returns envelope in 2025, as we seek to supplement our $225 million minimum.
Speaker Change: Dividend commitment with additional dividends and buybacks and you've seen that we've already supplemented returns with $52 million of share buybacks year to date already which brings minimum commitment for 2025 already to $277 million, that's exactly what we delivered for the whole.
Speaker Change: As 2024 and as such we are clearly well positioned to deliver on an increased shareholder returns profile for the third consecutive year.
While shareholder returns remains a near term focus we are keeping one eye on the future by enhancing.
Speaker Change: Organic growth pipeline.
Speaker Change: Our tier one essential project, which will underpin a 35% production growth to one and a half million ounces by 2030 is on track and we are confident that our exploration program will continue to increase the downwind already world class complex.
Speaker Change: We expect to provide a resource update in the second half of this year as we advance the definitive feasibility study towards completion.
Speaker Change: Finally during Q1, we were delighted to complete the commissioning of a solar plant at <unk>, which will support our continued improvement in emissions intensity and importantly help reduce fuel consumption and power costs at that mining complex.
Speaker Change: As you can see from the snapshot endeavor has entered 2025 with a great deal of momentum and I'm confident this will continue through the rest of the year.
Speaker Change: Benefit of all of our stakeholders.
Speaker Change: Now, let's dive into a little bit more detail and I think this particular slide it really is a snapshot of what's happened in endeavor over the past year or so as we look at the operating performance on slide seven you can see in the first quarter of 2025 group production.
Speaker Change: A 341000 ounces was slightly lower compared to Q4, 'twenty four but in line with our mining sequence, but importantly, it was up 122000 ounces over the corresponding period in 2024.
Speaker Change: Despite this we improved our all in sustaining cost, which improved by $12 per ounce quarter over quarter, as we improved mining processing and capital costs across the group.
Speaker Change: With lower costs and higher realized gold price was $2783 during the quarter, we generated a strong all in sustaining margin that maybe 60% all translated to $1654 for every ounce that we produced.
Speaker Change: Overall, our safety performance has remained strong with a group LTI as far as earnings 0.05 during the quarter.
Speaker Change: Jeremy is going to touch on safety performance in little more detail later.
Speaker Change: And our strong first quarter performance is certainly positioned us well to achieve our full year guidance as you can see on slide eight.
Speaker Change: Q1 group production was more than 30% of the lowering of the guidance range and our all in sustaining cost was well below the lower end guidance.
Speaker Change: This operational performance translated into record quarterly free cash flow generation for the group as you can see on this slide.
Speaker Change: We generated $409 million of free cash flow during the quarter recruitment to $1199 for every ounce of gold will be produced in a free cash flow margin also increased to 39%.
Speaker Change: Free cash flow has been supported by strong production improving costs seasonally low taxes and significantly lower capital following the completion of our growth capital phase.
Speaker Change: Over the past three quarters since the end of this organic growth phase, we've increased free cash flow generation every quarter and cumulatively, we've generated $775 million of free cash flow that's equivalent to $795.
Speaker Change: Answer go we've produced over that period.
Speaker Change: With our major growth projects now fully ramped up and our cost base stabilized we are focusing on maximizing the free cash flow generation for every ounce of gold we produce to capitalize on the strong gold price environment.
Speaker Change: On the next slide I want to highlight just a strong free cash flow generation has helped improve our balance sheet. This quarter, we significantly reduced our leverage from five five times net debt to adjusted EBITDA to just Europe two two.
Speaker Change: Comfortably below our long term target is Europe, one five times.
Speaker Change: Looking forward, we certainly want to maintain leverage below 0.5 and.
Speaker Change: And Guy will discuss our balance sheet and a little bit more detail later as well.
Speaker Change: Given our free cash flow growth.
Speaker Change: We have now de leveraged our financial position, we are well positioned to prioritize shareholder returns we want to build on our record dividends of $240 million an attractive total return of $2 $51 for every ounce. We produced last year, we committed to exceeding our minimum commitment of $2.
Speaker Change: Two $5 million this year and we've already completed with $52 million of buybacks. So that means that total returns of guaranteed for 2025 $277 million.
And that's.
Speaker Change: We're well positioned now to deliver.
Speaker Change: And increased envelope to our shareholders.
Speaker Change: As you can see on this chart since we started paying shareholder returns with that first payment in Q1 2021 four years ago, We've returned more than $1 2 billion to our shareholders that's equivalent to a third of our market cap.
Speaker Change: Part of the program and reflects our sustained commitment to delivering shareholder returns through phases of growth and phases of cash flow generation and reiterate the quality and the resilience of this business.
Speaker Change: Looking at our supplemental share buybacks and a bit more detail on this slide you can see that we've accelerated buyback activity in Q1 by four times that of the previous quarter.
Speaker Change: We delivered $52 million in share buybacks through the purchase of repurchase of two 4 million shares.
Speaker Change: As these advanced into our cash flow phase, we still see significant valuation upside by repurchasing your own stock and we will be continuing to be opportunistic with buybacks and maintain flexibility to allocate supplemental cash towards buybacks or dividends, depending upon where we see the best return.
Speaker Change: Okay.
Speaker Change: To put our shareholder returns in context. It is created in the gold mining sector. How returns are consistently amongst the highest both on a yield basis.
Speaker Change: Dollar space.
Basis.
Speaker Change: When we compare our shareholder return indicative yield against other sectors. It's equally attractive in that comparison for 2024 doesn't capture the recent improvement in the gold price.
Speaker Change: Gold has performed well generous portfolios do still remain underweight with gold equities, but we believe the consistent operating performance disciplined capital allocation stable insurance better returns and a sustained high gold price environment.
Speaker Change: Key drivers for these investors to pivot towards gold equities and I genuinely believe endeavor is amongst the best positioned gold equities to capitalize on that trend.
Speaker Change: While shareholders shoulder returns continue to be the major focus we're also progressing along with our organic growth to ensure that we can continue to grow production and maintain a first cost quartile position.
Speaker Change: This year with a $75 million budget. Our exploration program is focused on adding near mine resources across the portfolio to improve optionality at each of our mines.
Speaker Change: And our development project to software, we're expanding resources as well as delineating new resources at the surrounding satellite deposits.
Speaker Change: We're also building out our early stage exploration pipeline with our Greenfields, New ventures program to ensure that we have visibility of future organic growth beyond suffered.
Speaker Change: On the next slide nothing better exemplifies endeavors ability to unlock value through the drill bit then yourself through projects.
Speaker Change: This tier one project is advancing on track and we're excited with the progress we're seeing on the exploration front, we are continuing to drill at this this deposit to further delineate the known mineralization and extend that mineralization along strike and at depth.
Speaker Change: Also drilling nearby satellite targets, notably color, which is only about one performance at west.
Speaker Change: We expect to increase via software endowment and a resource update in the second half of this year that will incorporate up to 190000 meters of additional drilling over and above the existing resource.
Speaker Change: Last year, we signed a joint venture agreement with cooler growth, who have an option to earn up to a 90% interest in the SFA permit which is due east of the star fruit.
Speaker Change: The separate shares a similar structural and geological setting to suffer with gordian soil anomalies highlighted multiple prospective structural context that are yet to be extensively explored with.
Speaker Change: We're excited about its potential.
Speaker Change: To further expand the endowment of ESR through complex potentially advancing it into a truly world class system.
Speaker Change: For <unk>, we are on track to deliver the DSS.
Speaker Change: By late 'twenty, five, possibly even into early 'twenty six and could start construction in the latter half of 'twenty six permits permitting with first production expected in the second half of 'twenty eight.
Speaker Change: On the next slide with certainly building on our strong ESG performance in 2024, and we've kicked off 2025 with a continued focus on delivering tangible outcomes across all pillars of sustainability.
Speaker Change: We remain committed to producing gold responsibly and sustainably. So we can create meaningful value for all of our stakeholders.
Speaker Change: Building on our first quartile emissions performance in 'twenty four we're targeting an even lower emissions intensity in 'twenty five as we continue to implement a decarbonization road map, which will be supported by the introduction of solar solar plant at Sabadell on Massawa.
Speaker Change: On the social side for 25, we continue to strengthen our commitment to local content.
Speaker Change: Although we are already spending about 80% of our new procurement budget in country, which over the past two years equates to approximately $3 6 billion.
Speaker Change: There is more we can do particularly for those smaller suppliers around deadline science, we recently launched their local content accelerator, which is a key initiative led by endeavour to boost the local economic ecosystems around our mines.
Speaker Change: With regards to local talent management is strengthening our west African leadership teams by building succession programs and developing female talent and we look forward to providing more detail on these initiatives.
Speaker Change: Towards the year end.
In terms of health and safety, we're really pleased with that kind of performance. We set robust targets for 2025 linked to group wide compensation to ensure that we maintain a safe workplace for all of our employees.
Speaker Change: And with that let me hand, you over to Guy who will walk you through the financial results in detail over to you. Thanks Ann.
Guy: Everyone I will now walk you through our financial results for the quarter.
Speaker Change: Ian mentioned, we finished 2024 with a strong performance both operationally and financially.
Speaker Change: That momentum has continued into the first quarter of 2025 with strong production and improved costs, which coupled with the higher gold prices underpinned record margins EBITDA and free cash flow generation.
Speaker Change: In Q1, our adjusted EBITDA grew 12% quarter over quarter to $613 million.
Speaker Change: Free cash flow grew 53% to $409 million and all profitability and cash flow metrics were materially improved.
Speaker Change: Whilst our peers are likely also seeing some improvement in profitability profitability due to the strong gold price.
Speaker Change: We believe that our transition from a phase of growth to a phase of free cash flow generation has us very well positioned to take advantage of the current gold price environment and maximize free cash flow generation for our shareholders.
Speaker Change: We will achieve this by delivering against our operational guidance, maintaining a class leading costs and our capital discipline.
Speaker Change: If we turn to slide 19.
Speaker Change: You can see the pleasing improvement in our nominal EBITDA generation as well as EBITDA margin over the last three quarters in.
Speaker Change: In Q1, we achieved a new record adjusted EBITDA, increasing 12% quarter over quarter.
Speaker Change: This was driven by the support of gold price as well as continued cost discipline as cash costs and all in sustaining costs both improved.
Speaker Change: Turning to our operating cash flow on slide 21.
Speaker Change: We delivered another quarterly record for the group.
Speaker Change: We generated $494 million in operating cash flow, an increase of 30% over Q4.
Speaker Change: This continued growth reflects the benefits of a fully ramped up projects additional production at low cost as well as higher realized gold prices.
Speaker Change: Looking ahead as we've already highlighted we expect production to be slightly first half weighted this year, resulting in slightly higher costs through the remainder of the year.
Speaker Change: In addition, as outlined in our full year results.
Speaker Change: We expect to pay significantly higher cash taxes in Q2, and Q3 as detailed in our tax guidance due to the timing of income tax payments in each of the jurisdictions and the timing of withholding tax payments associated with cash up streaming in the middle of the year.
Speaker Change: On slide 21, and looking at the quarter over quarter change in our operating cash flow in a little bit more detail.
Speaker Change: The average realized gold price for continuing operations rose by $193 per ounce to $783 per ounce increase of losses realized on hedges and our L. BMA averaging strategy under the revenue protection program.
Speaker Change: Gold sales volumes were slightly lower quarter over quarter decreasing by 3000 ounces to 353000 ounces.
Speaker Change: However, this was more than offset by lower cash operating expenses and the effect of the $150 million prepayment, which settled in the prior period.
Speaker Change: Income taxes paid increased by $22 million to $39 million this quarter due to the timing of tax payments predominantly at $7 Massawa.
Speaker Change: Finally, we had a larger working capital outflow this quarter.
Speaker Change: This is driven by a catch up in supplier payables Invoiced late last year and.
Speaker Change: An inventory outflow related to an increase in Goldman circuit and stockpile built at Hyundai in it.
Speaker Change: And a smaller receivables outflow related to the buildup in Vit receivables in Makena faster.
Speaker Change: We expect that supplier payments and inventories will start to normalize over the remaining quarters.
Speaker Change: And we continue to look at ways of recovering a greater proportion of our Vit receivables in Makena two.
Speaker Change: So we expected changes in working capital to be smaller in the coming quarters.
Speaker Change: On slide 22, and our free cash flow as mentioned Q1 marked the fourth consecutive quarter of free cash flow growth continuing the momentum we've generated following the completion of a growth phase.
Speaker Change: In Q1 free cash flow increased by $141 million or <unk>, 53% as of Q4.
Speaker Change: This change was underpinned by strong production low operating capital costs, I realized gold prices and seasonally lower taxes.
Speaker Change: This level of free cash flow has further strengthened our balance sheet and supports our ongoing priority to return capital to shareholders.
Speaker Change: In terms of our change in net debt and highlighted the rapid deleveraging following our growth phase.
Speaker Change: On Slide 23, you can see the Q1 improvement in our leverage from <unk> 55 to two times and our net debt decreased by $354 million to $378 million at the end of Q1.
Speaker Change: The largest driver of this deleveraging was obviously our strong operating cash flow.
Speaker Change: Investing activities included $56 million and sustaining capital $38 million of non sustaining capital and $6 million in growth capital, which is partially offset by a one off $17 million inflow related to the release of restricted cash at ETE.
Speaker Change: On the financing side, we purchased $40 million in shares through the buyback program with the remainder related to debt drawdown and leasing finance fees.
Speaker Change: We also recognized $10 million foreign exchange gain on cash balances during the quarter as the dollar weakened compared to the euro.
Speaker Change: We will look to maintain our leverage below.
Speaker Change: Five times target for now.
Speaker Change: Being below our mid term leverage target ahead of the potential build allows us to increase shareholder returns through supplemental dividends and share buybacks, while continuing to fund our longer term organic growth pipeline.
Speaker Change: Okay.
Speaker Change: On slide 24.
Speaker Change: Earnings per share increased from.
Speaker Change: From 45 to 90.
Speaker Change: In summary, the gross and net and adjusted net earnings is come from the improved gross earnings along with lower impairment charges this quarter compared to last.
Speaker Change: Partially offset by higher realized losses on our hedges as a result of the higher gold price.
Speaker Change: With that I'd like to hand over to Jarrod will provide a more detailed review of our operating performance Sarah Thank.
Speaker Change: Thank you Guy.
Speaker Change: And able to everyone from the apparel.
Speaker Change: As always I would like to start with our continued strong safety performance.
Speaker Change: Our group lost time injury frequency rate has decreased.
Speaker Change: There are plenty of height, which is well below the industry average.
Speaker Change: Earlier.
Speaker Change: 15 remains of course, our top priority and this year, we will be concentrating and behavioral based safety training safety.
Speaker Change: Safety leadership training to reinforce again, our strong safety culture.
Speaker Change: Looking at portfolio performance, starting from slide 27.
Speaker Change: I'm pleased to report that we're off to a really strong start for 2025.
Speaker Change: Production of 341000 ounces in the first quarter.
Speaker Change: Slightly better than planned and represent over 30% of the lower end of 2025 guidance range.
Speaker Change: This of course put us firmly on track to meet our full year production guidance range.
Speaker Change: Our all in sustaining costs improved due to the strong production and even stronger volt sales.
Speaker Change: Paul.
Speaker Change: Cost improvement across holiday as well at Sabadell I'm a follow up.
Speaker Change: During quarter, one the production was stronger than expected at 48.
Speaker Change: As we have prioritized the high grade ore from the Kari pump deposit ahead.
Speaker Change: Ahead of the wet season.
Speaker Change: But as we move through the year, we expect progressively lower grades at <unk> and slightly lower grade at ETE.
Speaker Change: Hello.
Speaker Change: As a result, we expect the group production to be weighted towards the first half of year with slightly lower production and higher cost in the later half.
Speaker Change: Now turning to mine by mine performance and I will start with Sabadell on Massawa on slide 28.
Speaker Change: I am pleased with the progressive bottom line improvement that we've seen from solar Massawa serves as part of the biomass plant in quarter three of 2024.
Speaker Change: We had a strong start to 2025 with a quarter one production.
Speaker Change: In slightly higher than quarter 424.
Speaker Change: Which is driven by increased throughput and higher recovery rate.
Speaker Change: The CIL and by explained which was partially offset by slightly lower average grade.
Speaker Change: But most importantly, the recovery rates in both planned increased significantly over quarter four 2024.
Speaker Change: All in sustaining cost decreased quarter over quarter.
Speaker Change: Due to improved load and haul efficiency and increased gold sales.
Speaker Change: Are the CIL plant, we now have greater availability of high quality key non refractory ores.
Speaker Change: Following our extensive great control drilling efforts that we started since last year.
Speaker Change: Which is giving us more optionality in mining and processing.
Then ensuring grades and recovery remain in line with the expectations.
Speaker Change: Although by explained mining has advanced into largely fresh ore in the Massawa Central zone.
Speaker Change: Which is the main source of refractory ore and we are currently seeing over 80% fresh ore into the biopsy plant.
Speaker Change: The flotation performance significantly improved because of this higher fresh ore feed.
Giving high overall recoveries.
Speaker Change: We expect this trend of increasing the bikes recoveries to continue improving as we move towards a higher proportion of fresh ore in the feed.
Speaker Change: We are also advancing our three optimization initiatives at subdued on Massawa.
We expect to support performance improvement as well as production growth from the second half of this year.
Speaker Change: As detailed in our full year results. We are also looking to optimize and increase the throughput in the bikes plants.
Speaker Change: So advanced exploration for higher grade non refractory deposit for the CIL plant.
Speaker Change: As well as to accelerate the underground expansion.
Speaker Change: To provide higher grade non refractory ores in the coming years.
Speaker Change: We expect to provide an update.
Speaker Change: On the ongoing technical review without quarter two results.
Speaker Change: And now looking ahead.
Speaker Change: So the rest of this year.
Speaker Change: Get an improvement in the bikes recoveries and throughput, but really on ultra throughput a recovery should be largely stable.
Speaker Change: The grades are expected to decrease slightly due to lower grade ore blend expertise through the CIL plant.
Speaker Change: Even so we believe that's the Baidu Aladdin remains on track to achieve its annual production and all in sustaining cost guidance.
Speaker Change: Let's now turn to hook the mine on slide 29.
Speaker Change: <unk> had another very strong quarter as we continue to prioritize the eye grid or from the carrier competes ahead of the wet season.
Speaker Change: All in sustaining cost of also improved driven by operational excellence initiatives to optimize drilling blast efficiency and increased mining fleet productivity.
Speaker Change: As we advance through the year, we expect grades to decrease which will be slightly offset by higher recovery as mining activity keep more away from the carrot compete and more into the lower grade of Kari West Vindaloo men in vindaloo North pit.
Speaker Change: <unk> is well positioned to achieve its full year guidance.
Speaker Change: We already produce.
Speaker Change: Think of the lower end of the production guidance range and all in sustaining cost are substantially below the lower end of the cost range.
Speaker Change: With regards to exploration the program remains focused on delineating near mine resources other than Daddy, Deeps, Harrier, Deeps and Mercy Penn targets.
Speaker Change: And the ongoing drilling program at the Vindaloo deep deposit is designed to confirm the potential for large high grade underground resource.
Speaker Change: Turning to E.
Speaker Change: On slide 13.
Speaker Change: In the first quarter of 2025.
Speaker Change: Production has remained consistent with the prior quarter and 24 with all in sustaining costs improved due to an increase in gold sales.
Speaker Change: This was a catch up in sales.
Speaker Change: The prior quarter due to the timing of shipments.
Speaker Change: But as we progressed through the year.
Speaker Change: We will decrease the mining of high grade ore at the Le plaque and ETP.
Speaker Change: Although we expect this to be partially offset by higher recoveries as the ore blend changes ASP.
Speaker Change: The mining sequence.
Speaker Change: Longer term, we were pleased with the full year reserve update at 18.
Speaker Change: We have increased reserves by 50%, adding another one 2 million ounces.
Speaker Change: And following this update we see scope for E T to maintain annual production profile above 300000 ounces.
Speaker Change: But the longer term.
Speaker Change: Most importantly, we continue to see opportunities for further resource growth on the wider <unk> trend, which remains largely under explored.
Speaker Change: Okay.
Speaker Change: Moving to the mine <unk> mine on slide 31.
Speaker Change: The production increase for the quarter compared to quarter four 2024.
Speaker Change: Driven by higher average grade processed.
Speaker Change: All in sustaining cost increase this quarter.
Speaker Change: Primarily due to higher royalty payment.
Speaker Change: Linked to the improved gold price increased sustaining capital development.
Speaker Change: The weighted mining.
Speaker Change: And unit costs.
Speaker Change: Well looking forward.
Speaker Change: It is tracking well towards its full year guidance.
Speaker Change: And we expect grades to be slightly lower from the second quarter.
Speaker Change: Tabled throughput and recovery rate throughout the year.
Speaker Change: Importantly at Mana, we have now achieved commercial stopping production.
Speaker Change: Across all three of the underground stops in the water deposits.
Speaker Change: Namely we are now that will not end up here.
Speaker Change: And we are now focused on ramping up the stoping tonnage.
Speaker Change: Sustained access to higher grades to feed the plant.
Speaker Change: And on the exploration side.
Speaker Change: Also continue to work on delineating the deeper resources are the one of deposit.
Speaker Change: In order to support Resource addition, and conversion into reserves over the coming years.
Speaker Change: This is expected to support a longer mine lives visibility at mono.
Speaker Change: Now turning to our <unk>, our newest mine Lassi Gaye on slide 32.
Speaker Change: In quarter one.
Speaker Change: Production decreased compared to port for for 2024, as we have processed lower average grades in line with the mine sequence.
All in sustaining costs increased which was driven by new logo sales and higher processing costs, which were associated with scheduled maintenance activities.
Speaker Change: But looking ahead for the year.
Speaker Change: Throughput and recovery rates.
Speaker Change: Expected to remain stable.
Speaker Change: A slightly lower grades as the main source of all moves to the eastern flank of the main pit.
Speaker Change: We have brought in additional mining contractors.
Speaker Change: To help with great control drilling and increased mining volume.
Speaker Change: As we also look at initiatives to drive higher levels of throughput in the plant.
Speaker Change: But at the same time, our exploration program is targeting.
Speaker Change: Mine opportunities.
Speaker Change: We'll provide some thought to that oxide ore feed which increased operation operating flexibility over the coming years.
Speaker Change: All in all I figure remains firmly on track to also achieve its full year 2025 guidance.
Jan: Now ending back to Jan for his closing remarks.
Jan: Thanks, very much Gerry.
Jan: As you can see and Debra is off to a really strong start in 2025 building on the momentum from last year with Q1 laying a robust foundation to deliver on our strategic priorities this year and beyond.
Jan: We are well positioned to take advantage of the recent gold price strength, given our size cost profile and that track record of delivering exploration organic growth and low cost production.
Jan: Now that we have a healthy balance sheet, we can prioritize show returns in this high gold price environment and unlock more value for our shareholders.
Jan: And I think what is evident from this final slide is that despite the strong recent share price outperformance endeavour still offers a compelling valuation relative to both our gold peers and the broader market.
Jan: We are well positioned to be in.
Jan: I want to see increased generalist interest returning to the sector.
Jan: Thank you once again for joining us we look forward to keeping you updated on that.
Jan: Our progress and with that I'll open up the line for any questions. Thank you.
Jan: Thank you.
Speaker Change: Minded to ask a question. Please press star one and one on your telephone and wait for your name to be announced to withdraw. Your question. Please press star one and one again once again, please press star one and one on your telephone and wait for your name to be announced until we've got your question. Please press star one and one again thank you.
Jan: We're not going to proceed with our first question.
Speaker Change: And the question is come from the line of <unk> Habib from Scotia Bank. Please ask your question.
Jan: Okay.
Habib: Thanks, Operator, hi, Ian and our endeavor team really congrats on a solid Q1.
Jan: Great to see this kind of a free cash flow of 400 million.
Jan: Free cash flow generated in Q1, so congrats on that.
Couple of questions for me, just starting off with the Sabadell on Massawa.
Jan: Currently conducting a technical review just wanted to see.
Jan: And kind of understand could this review impact <unk> 2025 guidance or or this is more just kind of a general kind of a review for the overall mine plan a little bit color on that would be great.
Luke: Yes Luke.
Speaker Change: Let me answer on behalf of Jerry that the line is a little bit tricky.
Speaker Change: Can we have a cynical.
Speaker Change: Technical review is ongoing.
Speaker Change: We've already given guidance and for the year.
Speaker Change: It's too early to say, whether this will increase output you know we've put out previously a kind of an extended.
Speaker Change: Our guidance over several years and we did say that as a result of the review if we saw more upside than it would be in addition to that which we previously disclosed but at this stage I think it's too early.
Speaker Change: Obviously, we're hopeful that we could improve.
Speaker Change: But irrespective of that I think you can already see that.
Speaker Change: $7.
Speaker Change: Motoring strongly towards achieving.
Speaker Change: Evenly upper end of its current guidance.
Speaker Change: Perfect. Thanks for that.
Speaker Change: And then just again in terms of longer term, obviously discussions already.
Speaker Change: So one element of our backup to that 350000 ounces.
Speaker Change: Plus.
Speaker Change: Is this coming from just purely on additional source oxide.
Speaker Change: Any sort of operational improvements any any kind of color on that would be great as well.
Speaker Change: Yeah again.
Speaker Change: The buildup to should we call it slightly higher more sustainable level of performance is going to be a combination of many factors one is general improvements.
In recoveries.
Speaker Change: Crude throughput the identification of better quality material as well as.
Speaker Change: As an increase.
Speaker Change: In underground mining activity, which enables us to source high grade material.
Speaker Change: And obviously for the same throughput that gives us the advantage of a more ounces. So it's not any one particular factor, it's a broad range of initiatives and part of the technical review that we're doing is to actually helped us identify what is the optimal.
Speaker Change: Balance of those initiatives that will give us the right sustainable blend and that's what we're doing.
Speaker Change: Okay. Thanks for that again, and just kind of money on sorry.
Speaker Change: Sorry, guys.
Speaker Change: Yes, I'm really what we will do we will be in a position.
Speaker Change: At the Q2 results will be in a much better position to give you.
Speaker Change: A little bit more sort of granular detail externally, but too early yet.
Speaker Change: Okay look forward to that.
Speaker Change: Just moving onto exploration then side than just that.
Speaker Change: Obviously, you've had in your team exploration given the great exercise a subtle is the current focus in 2025 kind of increasingly confidence increase in size of a cycle.
Speaker Change: Or do you have a another a sofia in your back pocket that you can start talking about.
Speaker Change: Yeah.
Speaker Change: Rich.
Speaker Change: Now looking at EMEA.
Speaker Change: All alone.
Speaker Change: We said that we believe that this is a very very.
Speaker Change: <unk> piece of real estate the.
Speaker Change: Our focus.
Speaker Change: During this phase of the DFS.
Speaker Change: Really is very much on firming up the initial proposed mining area.
Speaker Change: To make sure that the.
Speaker Change: So the first couple of years.
Speaker Change: <unk> mining profile for the project.
Speaker Change: We will deliver what we think it's going to deliver so there is a lot of effort that's going into that but running in parallel with that is.
Speaker Change: Looking at some of the the should we call it slightly wider exploration opportunities, including Paula.
Speaker Change: And we do believe that that will help us ultimately grow the global resource in and around this district.
Speaker Change: Thus the DSS at the moment is really just focused on the pre defined pit.
Speaker Change: You know from previous presentations that we've made but do I believe that there is more to come from this area unquestionably.
Speaker Change: A target rich area.
Speaker Change: And then over time, obviously, we'll realize what it can what it can deliver.
Speaker Change: Alright, Thanks for that and then and then and just there were a couple of comments made by the.
Speaker Change: Burkina Faso Prime Minister idea this week.
Speaker Change: Any thoughts or color you can provide on the pms comments and kind of how youre looking at Burkina Faso is ethical.
Speaker Change: I think in fairness.
Speaker Change: Our base.
Speaker Change: The comments that have been made nothing other than a regurgitation of comments that have been made previously they're not new.
Speaker Change: Not additional.
Speaker Change: So in many respects.
Speaker Change: So the real real surprise there.
Speaker Change: This is a country that needs to get as much cash as it can.
Speaker Change: We are supportive of the government to trying to.
Speaker Change: To make sure that this is a good operating environment.
Speaker Change: So.
Speaker Change: The only change to be previously mentioned.
Speaker Change: Mining code that was published in the middle of last year is that you will recall that previously they said that they would.
Speaker Change: Allow existing mining conventions to rollout before they imposed.
Speaker Change: The additional 5% free carry.
Speaker Change: What we have seen recently a suggestions that they will they.
Speaker Change: They would like to accelerate that we've looked at that and to be honest with you over and above.
Speaker Change: We already know.
Speaker Change: It's it's inconvenient they bought.
Speaker Change: Talking about this but the actual impact is not is not huge.
Speaker Change: Alrighty, Thanks, followed by accelerate it probably somewhere in the order of about 1% of any group would be the impact.
Speaker Change: Okay I appreciate that and then.
Speaker Change: That's it for me thanks for taking my questions and.
Speaker Change: Congrats on a solid quarter.
Speaker Change: Thank you Chris.
Speaker Change: We are now going to proceed with our next question.
Speaker Change: So question is come from the line of Helane Gabriele from Morgan Stanley. Please ask your question.
Helane Gabriele: Thank you for taking my question I have a couple of them. The first one is on capital returns.
Helane Gabriele: I think your capital returns around rate dividends and buybacks and annualize it that got close to $385 million for 2025, which is yielding around 6%.
Helane Gabriele: Free cash flow yield is close to triple that that yield at the moment.
Speaker Change: Matt that is far below the net debt targets that you have set for the group. So given the room to maneuver is it fair to expect some upsides to these run rates and accelerated buyback or more special dividends on a go forward basis in 2025 itself. Thank you. That's the first question.
Scott Luster: Okay, Hello, Scott Luster coin to answer that question sorry.
Speaker Change: Hi, Adam I think youll.
Scott Luster: The structure of the question.
Speaker Change: We need to put things in perspective, you heard in a number of times during his presentation talking about the prioritization of shareholder returns so.
Scott Luster: So I think it's important that we reemphasize that.
Scott Luster: I think.
Scott Luster: I'd also like to reemphasize.
Scott Luster: <unk> management team wed like to do what we said we would do.
Scott Luster: And we have done so.
Scott Luster: <unk>.
Scott Luster: Seeing the cash flow inflection point, we've seen deleveraging the balance sheet.
Scott Luster: And now we are in a position to prioritize shareholder.
Scott Luster: I think if you look at what we've done historically and probably more importantly from a data point perspective, what we've done year to date, but.
Scott Luster: The simple answer to your question is yes.
Scott Luster: Because if if we've already returned at the end of Q1 in terms of the both committed plus share buybacks. What we did during 2024 I think where we are.
Scott Luster: Are you trying to show that our full intention is to provide a higher degree of supplemental returns to shareholders in line with the results and the deleveraging that we're seeing.
Scott Luster: I do that I'll come back to the point that I think I made it.
Scott Luster: At the last results presentation and that is.
Scott Luster: As long as we've got a support of gold price environment. We are producing this kind of cash flow and given now that we are in this position it would be at that point in time, and we can come forward and start talking about our supplemental set of returns, which we still maintain will be a combination.
Scott Luster: Increased dividends and opportunistic share buybacks.
Scott Luster: We're at 400% from a share buyback perspective of where we were last year.
Scott Luster: Intensively. Therefore, I think you can count on us ensuring that we make some superior and supplemental shareholder attendance during the year.
Speaker Change: Thank you. Thank you guys, that's very clear and my second question is on the receivables that you have done a small impairment of the renewables in Burkina Faso, and during the quarter can you give us some color on whether there are more problematic receivables across the group and how you are planning to resolve these challenges with the governments.
Scott Luster: And the reason I'm sorry, operator, thank you.
Speaker Change: Certainly.
Speaker Change: It's a good point that kind of two things that have grown our VIP balances. The first yes, it's ongoing.
Speaker Change: The kina receivables and against which we've taken as you say a small increased provision.
That increased provision is currently simply being done on a formulaic basis. So what we agreed with the board is that we would take what we believe to be a fairly conservative position given that the counterpart counterparties the state, but we would take a relatively conservative position and where we saw aging of AAC.
Speaker Change: <unk> balances going beyond a certain period, we would take a provision against those so what's happened is during the period, we have seen some further aging and we've done exactly the same as we did at the end of the year apply to formulate provision in that.
Speaker Change: Essentially what <unk> seen is that increase in aging.
Speaker Change: We've got a number of things that we're trying to do with Makena sorry.
Speaker Change: We've got a couple of things just trying to do is picking a faster in order to try and get this.
Speaker Change: The receivables in it is a broader conversation with the state.
Speaker Change: But it's something that I think we'd be able to report back on with a degree of <unk>.
Speaker Change: Success during during the year.
Speaker Change: The second element of the VIP increase is slightly easier to talk through and Thats at the fee day. So because the fee is still relatively new we have registered with the state we are a VIP entity and it is a build up there.
Speaker Change: That has taken place and it's roughly $21 million.
Speaker Change: At the end of the quarter, we havent seen reimbursement, yet, but thats fundamentally just part of the time cycle. So that's the fee gave VIP balance will inevitably come down.
As we move through through the rest of the 25%.
Speaker Change: Thank you. Thank you. Thank you.
Speaker Change: We are not going to proceed with our next question.
And the question is come from the line of Kerry.
Speaker Change: <unk> from Canaccord Genuity. Please ask your question.
Kerry: Hi, good afternoon, guys and congrats on the strong quarter, maybe a couple of other questions first for Guy.
Kerry: Obviously your cash balances built up a lot is it safe to assume or are you targeting to fully repay the credit facility. This year.
Guy: I'm really sorry, Kerry I didn't catch the second part of that.
Kerry: Got the cash balance increase.
Kerry: Sorry.
Speaker Change: Yeah I was just wondering if you are in a position to retain the credit facility I Wonder if that's something you were targeting to do this year and what the cost of your credit facility is if you can remind us.
Kerry: Certainly so.
Kerry: If credit facility, if im talking about the same thing a revolving credits with the syndicate banks. So yes, we have got a building cash balance.
Kerry: And we haven't used that to pay down.
Kerry: Which is a valid point, we would certainly intend to do so by the end of the yet.
Kerry: What we've got though is the seasonality in our cash flow and our ability to bring the cash from our onshore operating entities up to the holding company level.
Kerry: Which frankly mirrors some of our withholding tax and tax payments seasonality that we've guided to already so during Q2 and Q3 is when we effectively declare have approved at a local level and then move to catch up as soon as that cash is at a central holding company level, we will use it to pay down the Rcs.
Speaker Change: And can you remind us what the interest rate on their surface.
Kerry:
Kerry: We're roughly running on general because its slightly depends on are now gearing level.
Kerry: But we're running at around 7%.
Kerry: Okay and then.
Kerry: In terms of tax.
Speaker Change: Yes, I mean thats a good segue to my next question and I appreciate the annual tax guidance, but.
Speaker Change: Given your comments around Q2 Q3, just wondering if you can give us some better clarity on what we should expect for Q2 in particular.
Speaker Change: Like a range should be what percentage of Daniel should be coming through Q2.
Speaker Change: Yep.
Speaker Change: Sure.
Speaker Change: If I go back probably just to the guidance I offered at the yearend results because they haven't fundamentally changed so.
Speaker Change: We are expecting to pay a cash tax of around $350 million to $450 million. This year and of that about 80 to 90 is going to be withholding taxes and of the total around 55% is going to be in Q2.
Speaker Change: It is a very significant proportion obviously of our total tax payable in Q2.
Speaker Change: Give me the opportunity of reinforcing something I've said in the slides, but if you'll bear with me.
Speaker Change: Our Q2 cash flows are going to be significantly impacted by this if you multiply out those percentages and you think about some of the other things that are going to be calling on us in Q2.
Speaker Change: I just want to make sure that everyone understands our Q2 cash flow is going to be very different to Q1 predominantly driven by the cash tax payments that we are discussing now.
Speaker Change: Yeah.
Speaker Change: Great. That's that's very helpful. And then maybe one question for Jerry if I can just on M&A you mentioned the grades declining just wondering if you could give us some sense of what grade we should be expecting in Q2, and then for the second half.
Speaker Change: Okay.
Speaker Change: Thank you. Thank you carry obviously as I mentioned during the presentation earlier, we have accelerated the mining of carry peak.
Speaker Change: It carried competes well we've always seen historically high grade. So we are mining that pit out before the wet season and that we're moving more towards the Kari West Vindaloo main event.
Speaker Change: Whereby we have on average lower grade and carry peak that we've been seeing so far so that's really where we've seen that lower grade.
Speaker Change: Similarly.
Speaker Change: It's Abdullah masala, and we mentioned that earlier, but this is all part of our budget to mining sequences. So, though we are seeing.
Speaker Change: Slightly lower average grade.
Speaker Change: Great towards quarter two quarter three.
Speaker Change: Is no impacting the production profile that we have and all sites still again are.
Speaker Change: On track to achieve the full year production and what we've seen as well, although we have seen that slightly lower average grade we see high recovery as well so one offset the other.
Speaker Change: So in terms of degrade any any color you can give us on what we should expect.
Speaker Change: We should be modeling for Q2 in particular.
Speaker Change: Yes.
Speaker Change: I think it will significantly change from what we've been communicating.
Speaker Change: If we look at our luxury gate, we might be talking about one six.
Speaker Change: So per dollar it would not have changed what we think about a lot is definitely more into the recovery whereby especially for the biopsy, we seen the lower seven key and we'd be expecting more into the high <unk> more towards the end of the year, but average seat.
Speaker Change: First of all the sites again slightly below what.
Speaker Change: What we've seen in quarter, one, but it is not impacting anything.
Gerry: Okay, Great. That's it for me Thanks Gerry.
Gerry: Thanks, Kevin.
Speaker Change: We are now going to proceed with our next question.
Speaker Change: And the question is come from the line of Jason Fairclough from Bank of America. Please ask your question.
Speaker Change: Yes, good afternoon, thanks, everybody and again next quarter.
Speaker Change: I really like your relative valuation charts on slide 13, and slide 35, so the shares.
Speaker Change: Extremely cheap on all of these metrics despite the gushing free cash flow good growth and actually pretty reasonable operational execution lately. So I guess my question is why do you think that the shares are so cheap and if part of the question is investor angst on West Africa.
Speaker Change: Any thoughts on why headwinds facing your local peers shouldnt matter as much to you.
Speaker Change: Jason Thank you for the advert the check is in the post.
Speaker Change: Look.
Speaker Change: Yes, I think it is fair to say that the last year, we could justify because of the as we call. It.
Speaker Change: The upheaval that took place, particularly at the beginning of 'twenty four I think it would consumable pieces to step back and said, Okay fine get the ship settled let's see what you can do.
Speaker Change: <unk>.
Speaker Change: We'll sort of come back in again what is it.
Speaker Change: We have been seeing I think it's fair to say over the last three to four months is a growing confidence that.
Speaker Change: Endeavour's performance is starting to get back to where people would expect it to be confidence is growing in the stock and certainly over the last month or so we are seeing is close the gap in terms of relative valuation with regard to our peers.
Speaker Change: I think that and the fact that we now have several.
Speaker Change: Quarters were strong cash flow.
Speaker Change: <unk> seen from Q1 'twenty for every single quarter.
Speaker Change: <unk>.
Speaker Change: Free cash flow has grown.
Speaker Change: We've seen the impact of our <unk>.
<unk> that we've put in place importantly, despite the fact that the gold price has gone up we have not allowed any complacency to set into the group.
Speaker Change: Making sure that we remain resilient that our cost profile remains low.
Speaker Change: And shareholders will genuinely see the benefits.
Of an expanding margin which is perhaps.
Speaker Change: Some of the characteristics of that.
Speaker Change: People have seen in previous up.
Speaker Change: Up cycles in the gold sector in this particular industry, we're very focused on making sure that we do that and I think we're getting to the stage now where people beginning to understand.
I believe in the thesis that we've put out and we're starting to see showed.
Speaker Change: Positive shareholder response to that.
Speaker Change: With regards to.
What happens to our peers.
Speaker Change: It is.
Speaker Change: It's a fair comment.
Speaker Change: Okay.
Speaker Change: I guess, you're specifically, referring to the Kina Faso.
Speaker Change: I would say that certainly over the last.
Speaker Change: The last year or so.
Speaker Change: <unk>.
Speaker Change: I met with the very senior people in that part of the world.
Speaker Change: We have got a very good working relationship.
Speaker Change: With the.
The government we have good dialogue, we've established that.
Speaker Change: Not just from my level, but throughout the organization and importantly without people on the ground. We can open up a dialogue with them in private.
Speaker Change: We made comments, we have robust discussion.
Speaker Change: And incentives.
Speaker Change: Im listening to US does that mean that we are immune from things that may happen to others not necessarily but I do believe it gives us a chance to.
Speaker Change: To help influence the debate and show that we are.
Speaker Change: A good corporate citizen in the country, we want to be there for the longer term.
Speaker Change: And we've shown that despite the.
Speaker Change: The various phases of ups and downs, who have taken place.
Speaker Change: And <unk>. So we have consistently performed well there and we've consistently given good returns and at the end of the day you can't argue against returns.
Speaker Change: People will eventually get it and understand and if they don't like West African exposure, where there shouldnt be any.
Speaker Change: Stock anyway, but we have historically shown that we have been able to manage the.
Speaker Change: The exposure to West Africa and have consistently outperformed.
Speaker Change: By being well positioned in that part of the world.
Speaker Change: Okay. Thanks, a lot for the color and maybe just a quick follow up if I could so we saw some news.
Speaker Change: That anglogold Ashanti.
Speaker Change: You may be aware of.
Speaker Change: Selling out of some projects in West Africa I was just wondering if those would be the sorts of projects that you would've done due diligence on and again I guess thoughts on M&A, given that you seem to be able to create value from west African assets.
Speaker Change: In a way that others can't.
Speaker Change: I saw the release today I have to say the impression I got that it wasn't actually selling out of assets. It was actually an exploration asset swap.
Speaker Change: We are resolute.
Speaker Change: <unk> some.
Speaker Change: Smaller assets in in Cote d'ivoire.
Speaker Change: And in exchange overtime, Resolute would give something over two to Anglogold and I actually think thats very healthy.
Speaker Change: We're <unk>.
Speaker Change: Peoples relative strength I mean, obviously anglogold are very strong in guinea through through security. So it kind of makes lot of sense that people.
Speaker Change: Looking at the industrial logic of swapping assets and putting assets into the hands of potentially the.
Speaker Change: Better people as far as Cote d'ivoire is concerned we've covered most of the country. We know what is and what isn't available.
Speaker Change: I think you can get from that that we have looked at these assets, but more importantly.
Speaker Change: We've got.
Speaker Change: Two really good operating assets already in the country, we're going to have a third one which is truly world class Theres nothing in West Africa that matches up to two soft fruit.
Speaker Change: Page.
Speaker Change: We got more than enough.
Speaker Change: Closure that we wouldn't necessarily need more and certainly not something that doesn't look as if it would.
Speaker Change: Be a better option than what we've already got operating that part of the world.
Speaker Change: Okay. Thanks, a lot for the color and we'll see you in Barcelona in a couple of weeks.
Speaker Change: Thank you looking forward to it.
Speaker Change: We are now going to proceed with our next question.
Anita Soni: And the question is come from the line of Anita Soni from CIBC. Please ask your question Hi.
Anita Soni: Good morning, everyone. Thanks for taking my question.
Anita Soni: Most of them have been asked and answered, but I wanted to follow up on royalty rates, you talked about John Burkina and and some of that is going on there, but I wanted to talk about Cote d'ivoire.
Anita Soni: Have you had any recent conversations with the government about their royalty rates my understanding is that theyre looking at.
Anita Soni: Increasing the royalty above the 1900 tap that they have.
Anita Soni: Yes Anita.
Anita Soni: Regularly governments look what they've got.
Anita Soni: They.
Anita Soni: Start asking the questions.
Anita Soni: There has been.
Anita Soni: Some suggestions from them that they would.
Anita Soni: Entered into discussions they'd like to see a slightly higher royalty rate.
Anita Soni: That debate and discussion has taken place at the chamber of mines Theres nothing definitive.
Anita Soni: Yet.
Anita Soni: Until such time.
Anita Soni: Is there is any final conclusion.
Anita Soni: We continue to operate under the existing.
Anita Soni: Under the existing rules.
Anita Soni: No.
Anita Soni: One has to say that the trend.
Anita Soni: For for.
Anita Soni: For taxation globally.
Anita Soni: Not just here in West Africa is going up so it's not.
Anita Soni: It's not to be.
Anita Soni: Surprising, but we do have.
Anita Soni: Our agreements.
Anita Soni: We have stabilization agreements so this will be likely.
Anita Soni: Applying more to new operations as opposed to existing operations, but that still has to come out.
Anita Soni: In the discussions and as I say, there is nothing definitive which has come out of this yet.
Speaker Change: Okay can you, let us know what the parameters are that they did of the discussion, but I mean, I'm, assuming that would just sort of ratchet up at the same kind of trend line.
Anita Soni: You know as every $100 brown.
Speaker Change: And then you know as we get up to the higher levels.
Anita Soni: Or what are kind of in an escalator.
Speaker Change: Yeah.
Speaker Change: Here, what I say at the moment, there's open discussion.
Speaker Change: There's nothing definitive it would be I think inappropriate to have any discussion around or speculation around what may or may not happen.
Speaker Change: Until once we know anything definitive then obviously, we'll come back at this stage, we don't have anything definitive to to postpone.
Speaker Change: Alright. Thank you that's it for my questions.
Speaker Change: We are now going to proceed with our next question.
Speaker Change: And the question is come from the line of Wayne Lam from TD Securities. Please ask your question. Your line is opened.
Speaker Change: Alright, guys.
Wayne Lam: Just wondering it's abdala once we expect the main pit, we mined out and ready to deposit tailings and then have you guys received the permitting there and then and then just wondering on the underground what the permitting requirement would be there as well.
Speaker Change: Okay.
Speaker Change: I'll ask Jerry to two you picked up the question that Jerry can you answer please.
Jerry: Yes would you mind, just maybe repeat again the line was a bit unstable when you ask it.
Jerry: Sure So just.
Speaker Change: Two questions on silver dollar one is when do you expect the talents the mine sorry, when do you expect the main pit will be mined out and raise the deposit tailings and on permitting have you received.
Jerry: Tailings deposition permit there and what the permitting would be on the underground.
Jerry: Okay. Thank you.
Jerry: So the main piece of course, we are referring to sabadell a pit.
Jerry: As we have previously communicated the plan is to mine subdue not out.
Jerry: By end of quarter two into quarter three.
Jerry: So normally display piece should be ready for received the deposit.
Jerry: Once we didn't finalize all the infrastructure construction.
Jerry: In terms of the permit we are clear on that we do sorry, Keith we've received all the necessary permit that we need to received the future discussions ongoing with specially with the communities. We do not foresee any obstacle. There I think this is a normal discussion that you have so we do.
Jerry: Correct.
Jerry: This last validation as well.
Jerry: Quoted too.
Jerry: We put in a target for ourselves to have all these concluded before end of quarter two this year in.
Jerry: In terms of the on the ground, we are progressing very well as I mentioned earlier, we are accelerating.
Jerry:
Jerry: DFS, which is envisaged by end of this year again is to really commencing.
Jerry: The the underground.
Jerry: In.
Jerry: End of this year into 2027, whereby we will have a full development in 2026 sorry.
Jerry: And then the first ounces will be in by 2027. So we're looking at a total endowment across the two deposits of quanta in glaucoma.
Jerry: To be approximately 500000 ounces at an average grade of five Gram.
Jerry: Of course purely non refractory fresh ore, which definitely will.
Jerry: Boost our CIL throughput as well as the production.
Jerry: Okay, great. Thanks, and then maybe just for Guy.
Jerry: Just looking ahead to the $500 million of notes due next year is there a significant upstream in cash needed to make that payment and at what point would that take place just wondering how to think about timing of taxes for that.
Speaker Change: Sure thing.
Speaker Change: When we look to rollover, so we're not going to be having to pull up cash to do so our intention would be.
Speaker Change: To refinance it with a similar sized bump.
Speaker Change: The timing of which you you obviously know but October 26 is.
Speaker Change: At the end of our current bond, we would look to try and refinance obviously between now and then.
Speaker Change: Dearly, we will look to get that away before it becomes.
Speaker Change: Less than 12 months Dude and falls into current.
Speaker Change: So somewhere between.
Speaker Change: And October of this year would be our ideal window.
Speaker Change: Okay, great. Thanks, that's all for me.
Speaker Change: We are now going to proceed with our next question.
Speaker Change: And the question is come from the line of William Dolby from Brenda. Please ask your question.
Speaker Change: Yes.
Speaker Change: Hi, good afternoon.
Speaker Change: First of all I was wondering going forward.
Speaker Change: Just a couple for me.
Speaker Change: On tax expense again, just wondering if you're able to share what gold price assumption.
Speaker Change: Factored into the upper end of that.
Speaker Change: $3 50 to 450 range for the year.
Speaker Change: And what impact that would be.
Speaker Change: Kind of guidance range should the gold price stay at current levels for the first one.
Speaker Change: Hi.
Speaker Change: The tax guidance would split it into two importantly, so.
Speaker Change: Income tax, which makes up the bulk of that tax guidance is effectively fixed because were paying last year tax now so the majority of that is fixed.
Speaker Change: Holding tax May flex slightly so we've tried to build in a reasonable range from 80 to 90 to cover gold prices and some flex it.
Speaker Change: Would have in terms of upstream ing, but to actually answer your question.
Speaker Change: Our assumption is 2006 hundred goal.
Speaker Change: But we've also taken into consideration our Q1 actual realized so we've done a forecast of cash flow on Q1 actual plus two six for the remainder of the year and use that to estimate the dividends and ultimately the withholding tax.
Speaker Change: Okay. That's helpful. Thank you and then secondly, just some capsule I apologize I didn't catch all of the reasons for the working capital build for the quarter I'm wondering if you could just quickly run through those again.
Speaker Change: Then.
Speaker Change: Maybe they're a bit.
Speaker Change: Applications.
Speaker Change: For the remaining quarters. Thank you.
Speaker Change: Sure.
Speaker Change: $98 million of working capital outflow, roughly broken down into an accounts payable swing of $48 million.
Speaker Change: That is largely as a result of an unwind in the buildup and late invoicing at the end of 2024.
Speaker Change: Consequently, we would expect that not to be relatively stable over Q2, and Q3 and then we would expect to see a slight build again in Q4, but the 48 negative in Q1 should not be repeating throughout the remainder of the year.
Speaker Change: The other element of the 98 is inventory, which is roughly $44 million of that total.
And then that inventory build was made up predominantly of GIC Golden circuit.
Speaker Change: As well as some stockpile build predominantly at putting day.
Speaker Change: <unk> and <unk>.
Speaker Change: GIC build is largely as a result of the level of production and performance. We saw in Q1, so not necessarily a bad news story, but we should be able to start bringing that GIC overall balance down as we look through our process planning for the remainder of the year. So certainly note continued increase in outflows.
Speaker Change: And with regards to the stockpile this is largely.
Speaker Change: As pushing mining performance ahead of the wet season, which we've mentioned during the call. So again this should be something that could be managed down between now and year end.
Speaker Change: The last element of the working capital is the VIP build of roughly Ken.
Speaker Change: And the elements that we are going to be able to reduce is the 21 million build at <unk>.
Speaker Change: The more problematic one is the one that we circle back on already which is the Makena <unk>.
Speaker Change: And there we're looking to try and see what we can do but that arguably would be something that might stick overall, our working capital outflows for Q2, three and four will be lower than they have been in Q1.
Speaker Change: Very helpful guys. Thanks very much.
Speaker Change: Congrats again.
Speaker Change: Great quarter.
Speaker Change: <unk>.
Speaker Change: This concludes today's conference call. Thank you all for participating you may now disconnect speakers. Please standby.
Speaker Change: Okay.
Speaker Change: [music].
Speaker Change: Okay.
Yeah.
Speaker Change: [music].
Speaker Change: Yes.
Speaker Change: [music].
Speaker Change: Hum.
Speaker Change: [music].