Q2 2025 Kinross Gold Corp Earnings Call
Tina: Thank you for standing by. My name is Tina, and I will be your conference operator today. At this time, I would like to welcome everyone to the Kinross Gold Q2 2025 Results Conference Call and Webcast. All lines have been placed on mute to prevent any background noise. After the speaker's remarks, there will be a question and answer session. If you would like to ask a question during this time, simply press star followed by the number one on your telephone keypad. If you would like to withdraw your question, press star one again. Thank you. It is now my pleasure to turn the call over to David Shaver, Senior Vice President. Please go ahead.
Thank you for standing by. My name is Tina and I'll be your conference operator. Today at this time I would like to welcome everyone. To the Kim Ross Gold second quarter 2025 results call and webcast all lines have been placed on mute to prevent any background noise.
After the speaker's remarks, there will be a question and answer session. If you would like to ask a question during this time, simply press star followed by the number 1 on your telephone keypad. If you would like to withdraw your question, press star 1 again. Thank you. It is now my pleasure to turn the call over to David Shaver, Senior Vice President.
Please go ahead.
David Shaver: Thank you and good morning. In the room with us today on the call, we have Paul Rollinson, CEO, and from the Kinross Senior Leadership Team, Andrea Freeborough, Claude Schimper, William Dunford, and Geoff Gold. For a complete discussion of the risks and uncertainties which may lead to actual results differing from estimates contained in our forward-looking information, please refer to page three of this presentation, our news release dated July 30, 2025, the MDNA for the period ended June 30, 2025, and our most recently filed AIF, all of which are available on our website. I will now turn the call over to Paul.
Thank you and good morning in the room with us today. On the call we have all rowlandson CEO.
And from the Ken, Ross, senior leadership, team Andrea freeborough. Claude schimper will Dunford and Jeff gold.
For a complete discussion of the risks and uncertainties which may lead to actual results differing from estimates contained. In our forward-looking information, please refer to H3 of this presentation. Our news release dated, July 30th 2025,
The MD&A for the period ended June 30, 2025.
And our most recently filed aif all of which are available on our website.
Paul Rollinson: Thanks, David, and thank you all for joining us. This morning, I will discuss our Q2 results, provide high-level updates across our portfolio, comment on sustainability, and confirm our outlook. I will then hand the call over to the team to provide more detail. Following a good Q1, we delivered another strong quarter in Q2, establishing an excellent first half and positioning us well to achieve our full-year guidance. Our production in the second quarter was on plan, delivering 513,000 ounces at a cost of sales of $1,074 per ounce. Our strong production and cost management, combined with the gold price, resulted in record operating margins. As a result, we also delivered record-free cash flow in the second quarter of almost $650 million and a first half total of just over $1 billion.
I will now turn the call over to Paul.
Thanks, David, and thank you all for joining us.
This morning, I will discuss our second-quarter results.
Provide high level updates across our portfolio.
Comment on sustainability.
And confirm our Outlook.
I will then hand the call over to the team to provide more detail.
Following a good Q1, we delivered another strong quarter in Q2.
Establishing an excellent first half.
And positioning as well to achieve our full year guidance.
Our production in the second quarter was on plan, delivering 513,000 oz.
At a cost of sales of $1,074 per ounce.
Our strong production and cost management.
Combined with gold price resulted in record, operating margins.
As a result.
We also delivered record free cash flow in the second quarter of almost 650 million.
and a first half total of just over 1 billion dollars,
Paul Rollinson: Our financial position and cash flow outlook remain excellent, and we plan to continue to return meaningful capital to shareholders through ongoing share repurchases and our quarterly dividend. With respect to our operations, Paracatu and Tasiast together accounted for more than half of our production and contributed significant cash flow. Paracatu delivered another strong quarter and was the highest producer in the portfolio, generating substantial cash flow. At Tasiast, we delivered our budgeted production in the second quarter. The mill has been performing well, and the site remains on track to meet its full-year guidance. At La Coipa, despite encountering some excess groundwater in the pits, production was higher quarter over quarter, and the site remains on track to meet its full-year production guidance. Our U.S. assets delivered strong production and costs as planned.
Outlook remains, excellent.
We plan to continue to return meaningful capital to shareholders through ongoing share repurchases.
And our quarterly dividend.
With.
Respect to our operations.
<unk> and Tasiast together accounted for more than half of our production.
And contributed significant cash flow.
Karen could you delivered another strong quarter.
And was the highest producer in the portfolio generating substantial cash flow.
And Tasiast, we delivered our budgeted production in the second quarter.
The mill has been performing well and the site remains on track to meet its full year guidance.
And la Coipa.
Spike encountering some excess groundwater in the peds.
She was higher quarter over quarter.
And the site remains on track I mean, its full year production guidance.
Our U S assets delivered strong production and cost as planned.
Paul Rollinson: In Alaska, we saw another quarter of contributions from both Fort Knox and Manh Choh that were on plan. In Nevada, we saw stronger production from both Bald Mountain and Round Mountain. At Bald Mountain, mining activity for phase one of Red Bird is progressing well, and study work for phase two is ongoing. At Round Mountain, initial production from the phase S open pit has commenced and is expected to ramp up throughout the year and into next. At phase X, underground development is progressing well, and we continue to see strong exploration results. All of our projects continue to progress well in Q2. Our brownfields projects at Curlew and phase X both had positive exploration updates and are showing potential to contribute to our production profile later in the decade and beyond.
In Alaska, we saw another quarter of contributions from both Fort Knox and man show.
We're on plan.
In Nevada, we saw stronger production from both Bald mountain and round mountain.
At Bald mountain mining activity for phase one of Redburn is progressing well.
And study work for phase II is ongoing.
At round Mountain initial production from the Phase <unk> open pit has commenced and is expected to ramp up throughout the year and into next.
And phase X underground development is progressing well.
And we continued to see strong exploration results.
All of our projects continue to progress well in Q2.
Our brownfields project Curlew and Zacks.
<unk> had positive exploration updates.
And are showing potential to contribute to our production profile later in the decade and beyond.
Paul Rollinson: The greenfields projects at Great Bear and Lobo also progress well and are expected to contribute to our production in 2029 and 2031, respectively. Also, in the current gold price environment, we are seeing value-generating investment opportunities across our portfolio that capitalize on our significant resource base and our recent positive drill results. We see opportunities to extend mine life while maintaining our focus on margins and shareholder value. The team will comment on our resource optionality later. Turning now to a few remarks on sustainability. Our annual sustainability report was published earlier in May. It is a comprehensive document, which I encourage you all to review. Also, in Q2, we made progress across various water management initiatives, which remains a key focus area within our approach to sustainability.
The greenfield projects that great parent Lobo also progressed well.
And are expected to contribute to our production in 2029 and 2031, respectively.
Also in the current gold price environment, we are seeing value generating investment opportunities across our portfolio.
That capitalize on our significant resource base.
And our recent positive drill results.
We see opportunities to extend mine life, while maintaining our focus on margins and shareholder value.
The team will comment on our resource Optionality later.
Turning now to a few remarks on sustainability.
Our annual sustainability report was published earlier in May.
It is a comprehensive document.
Which I encourage you all to review.
Also in Q2, we made progress across various water management initiatives.
Which remains a key focus area within our approach to sustainability.
Paul Rollinson: For example, at La Coipa, we enhanced water efficiency through an optimization program to reduce the amount of water loss going to our dry stack tailings. In Alaska, at Fish Creek, a historic mining area that Kinross did not operate but later reclaimed for the benefit of the environment and local communities, fish populations continue to thrive. Turning now to our outlook, following a strong second quarter and first half, we have produced just over 1 million ounces at a cost of sales in line with our guidance. Looking ahead, we remain firmly on track to achieve our full-year guidance. We will continue to maintain our financial discipline and prioritize margins to drive strong cash flow, which will support ongoing return of capital and further strengthen the balance sheet. With that, I will now turn the call over to Andrea.
For example.
At La Coipa, we enhanced water efficiency through an optimization program.
To reduce the amount of water loss going to our dry stack tailings.
In Alaska and Fish Creek.
Our historic mining area. They can Ross did not operate.
But later, we claimed for the benefit of the environment and local communities.
Fish populations continue to thrive.
Turning now to our outlook.
Following a strong second quarter and first half.
We have produced just over 1 million ounces at a cost of sales in line with our guidance.
Looking ahead, we remain firmly on track to achieve our full year guidance.
We will continue to maintain our financial discipline and prioritize margins to drive strong cash flow.
Which will support ongoing return of capital.
And further strengthen the balance sheet.
With that I will now turn the call over to Andrea.
Andrea Freeborough: Thanks, Paul. This morning, I will review our financial highlights from the quarter, provide an update on our balance sheet and return of capital program, and comment on our guidance and outlook. As Paul noted, we had a strong second quarter. We produced 513,000 gold equivalent ounces with sales of 508,000 ounces. Cost of sales was $1,074 per ounce, and with an average realized gold price of $3,285 per ounce, we delivered record margins of just over $2,200 per ounce. Cost of sales of $1,074 per ounce increased from Q1, largely due to higher royalties. Higher sustaining capital expenditures also contributed to higher all-in sustaining costs compared to Q1. In Q2, our adjusted earnings were $0.44 per share and adjusted operating cash flow was $844 million. Attributable CapEx was $302 million, split relatively evenly between sustaining and growth.
Thanks, Paul.
Morning, I will review our financial highlights from the quarter provide an update on our balance sheet and return of capital program and comment on our guidance and outlook.
As Paul noted we had a strong second quarter, we produced 513000 gold equivalent ounces with sales of 508000 ounces.
Cost of sales was $1074 per ounce.
And with an average realized gold price of $3285 per ounce, we delivered record margins of just over $2200 per ounce.
Asset sales and a $1074 per ounce increased from Q1, largely due to higher royalties.
Higher sustaining capital expenditure also contributed to higher all in sustaining cost compared to Q1.
In Q2, our adjusted earnings were <unk> 44 per share and adjusted operating cash flow was $844 million.
Attributable capex of $302 million split.
Split relatively evenly between sustaining and growth.
Andrea Freeborough: Attributable free cash flow was a record $647 million or $542 million, excluding changes in working capital. Turning to our balance sheet, which remains in excellent shape and continued to strengthen in Q2, we ended the quarter with just over $1.1 billion in cash and approximately $2.8 billion of total liquidity, both increasing from Q1. We improved our net debt position to approximately $100 million at the end of Q2 and expect to be at net cash in Q3. In Q2, we repurchased and canceled approximately $170 million in shares and subsequently have completed another $55 million for a total of $225 million to date. Including our quarterly dividend, we have returned almost $300 million to shareholders so far and were on track for our minimum target of $650 million this year.
Attributable free cash flow was a record $647 million.
Our $542 million, excluding changes in working capital.
Turning to our balance sheet, which remains in excellent shape and continue to strengthen in Q2, we ended the quarter with just over $1 $1 billion in cash.
And approximately $2 $8 billion of total liquidity.
Both increasing from Q1.
We improved our net debt position to approximately $100 million at the end of Q2.
To be net cash in Q3.
In Q2, we repurchased and canceled approximately $170 million and shares.
And subsequently have completed another $55 million for a total of $225 million to date.
Including our quarterly dividend, we have returned almost $300 million to shareholders. So far and we're on track for our minimum target of $650 million this year.
Andrea Freeborough: As we look forward, we expect to continue to return a substantial amount of capital to shareholders while also strengthening our balance sheet with a view to repaying our $500 million 2027 notes. Turning to our guidance, following the first half, we remain solidly on track to produce 2 million ounces at a cost of sales of $1,120 per ounce and all-in sustaining costs of $1,500 per ounce. Production over the two remaining quarters this year is expected to be relatively even at approximately 500,000 ounces each to deliver our full-year production guidance. Operating costs are budgeted to increase in a second half to meet our full-year cost guidance. The expected increase is due to the following reasons. First, planned mine sequencing with costs expected to increase at several sites as we transition from capitalized stripping into operating waste.
As we look forward, we expect to continue to return a substantial amount of capital to shareholders. While also strengthening our balance sheet with a view to repaying our $500 million 2027 notes.
Turning to our guidance following the first half.
We remain solidly on track to produce 2 million ounces at a cost of sale of 1100 $20 per ounce and all in sustaining cost of $500 per ads.
Production over the two remaining quarters. This year is expected to be relatively even at approximately 500000 ounce of each.
To deliver our full year production guidance.
Operating costs are budgeted to increase in the second half to meet our full year cost guidance.
Expected increase is due to the following reasons.
Sure.
Land mine sequencing with costs expected to increase at several sites as we transition from capitalized stripping into operating waste.
Andrea Freeborough: Second, some expected inflation as we progress through the rest of the year. Third, slightly stronger production in the first half, providing a favorable denominator on fixed costs with production in the remaining quarters expected to deliver our guidance of 2 million ounces. Total capital expenditures remain on track to meet guidance of $1.15 billion, with a slightly higher weighting towards sustaining versus gross capital for the second half of the year. I'll now turn the call over to Claude to discuss our operations.
Second the unexpected inflation as we progress through the rest of the year.
And third.
Lightly stronger production in the first half.
Riding a favorable denominator on fixed cost with.
With production in the remaining quarter expected to deliver our guidance of 2 million ounces.
Total capital expenditures remain on track to meet guidance of $1, one 5 billion.
With a slightly higher weighting towards sustaining versus growth capital for the second half of the year.
I'll now turn the call over to Claude to discuss our operations.
Claude Schimper: Thank you, Andrea. In the second quarter, our safety programs continued to be focused on proactive identification of hazards, people development, and leadership training. We have continued to roll out our new safety brand, SafeGround, which has included co-design of site-specific and culturally relevant communication plans of key messages. Our operations continued their strong performance in the second quarter, delivering production of 513,000 ounces with strong contributions across the portfolio. Starting with Percutu, the mine had another steady quarter with strong production driving significant cash flow. Production of 149,000 ounces increased over the prior quarter due to the higher throughput and strong mill recoveries, while cost of sales of $958 per ounce was in line with the previous quarter. Percatu remains on track to meet its guidance, producing 585,000 ounces at a cost of sales of $1,025 per ounce.
Thank you Andrea.
In the second quarter, our safety programs continue to be focused on proactive identification of hazards people development and leadership training.
We have continued to rollout our new safety brand safe ground.
Is it coaches on site specific and culturally relevant communication plans are key.
Messages.
Our operations continued the strong performance in the second quarter delivering.
Delivering production of 513000 ounces.
Strong contributions across the portfolio.
Starting with product.
<unk> had another steady quarter.
The strong production driving significant cash flow.
Production of 149000 ounces increased over the prior quarter due.
Due to the highest throughput and strong mill recoveries.
While cost of sales of $908 balance was in line with the previous quarter.
Back to two remains on track to meet its guidance.
<unk> 595000 ounces at a cost of sales of $1025 balance.
Claude Schimper: At Tasius, we delivered budgeted production in the second quarter, producing 119,000 ounces at a cost of sales of $843 per ounce. Budgeted production was achieved through strong mill performance and recoveries. Restripping of the Fennix satellite pit to the north has also commenced in the second quarter. Tasius remains on track to meet its production guidance of 500,000 ounces at a target cost of sales of $860 per ounce for the year. At La Coifa, we produced 54,000 ounces at a cost of sales of $1,397 per ounce in the second quarter. Four tons mined were lower over the prior quarter due to higher than anticipated groundwater inflows into the pits, resulting in higher tons processed from lower-grade stockpiles and leading to higher costs in the second quarter.
At Tasiast, we did.
Budgeted production in the second quarter.
<unk> 119000 ounces.
Cost of sales $843.
Budgeted production was achieved through strong multiple formats and recoveries.
Pre stripping of the Phoenix satellite pit to the North has also commenced in the second quarter.
Tasiast remains on track to meet its production guidance of 500000 ounces.
Cost of sales $860 per ounce.
The year.
At La Coipa, we produced 54000 ounces at a cost of sales or $1397 pounds in the second quarter.
What tons bond below over the prior quarter due to higher than anticipated groundwater inflows into the pits.
Faulting and higher tons processed from lower grade stockpiles and leading to higher costs in the second quarter.
Claude Schimper: The team has gained a good understanding of the input water conditions and increased dewatering and made adjustments to the mine plan. Production is expected to be stronger and costs lower in the second half of the year as mining transitions to the planned higher grades from phase seven on. La Coifa remains on track to meet its full-year production guidance of 230,000 ounces. Moving to our U.S. operations, production was higher quarter over quarter, benefiting from strong contributions from Fort Knox and Manchot in Alaska and stronger grades in Nevada. Collectively, the U.S. sites delivered production of 190,000 ounces at a cost of sales of $1,229 per ounce in the second quarter. Our U.S. operations remain on track to meet its guidance of 685,000 ounces at a cost of sales of $1,420 per ounce.
Team has gained a good understanding of the input water conditions and increased dewatering and made adjustments to the mine plan.
Production is expected to be stronger and costs lower in the second half of the year.
Mining transitions to the planned higher grades from phase seven.
A quick one remains on track full year production guidance to 30.
The analysis.
Moving to our U S operations production was higher quarter over quarter benefiting from strong contributions from Fort Knox and Manto in Alaska and stronger grades in Nevada.
Collectively the U S sites delivered production of 190000 ounces at a cost of sales $1229 per ounce.
Second quarter.
Our U S operations remain on track to meet its guidance of 695000 ounces at a cost of sales $1420 per ounce.
Claude Schimper: At Fort Knox, second quarter production of 98,000 ounces was in line with our first quarter. Cost of sales of $1,247 per ounce was slightly higher over the prior quarter due to higher processing costs. At Bald Mountain, we produced 54,000 ounces at a cost of sales of $1,095 per ounce, improving over the prior quarter with stronger grades as we were finishing mining the higher-grade LBM plant. Cost of sales of $1,095 per ounce was lower quarter over quarter due to the higher ounces sold and a higher proportion of capitalized costs as mining at Red Bird phase one continues to ramp up. At Round Mountain, production of 39,000 ounces increased over the prior quarter due to higher grades. Sales of $1,376 per ounce decreased from the prior quarter. With that, I will now pass the call over to William Dunford to discuss our project.
At Fort Knox second quarter production of 98000 ounces was in line with our first quarter.
Cost of sales of 1240.
<unk> $47 per ounce was slightly higher over the prior quarter due to higher processing costs.
The bold mountain you produced 54000 ounces at a cost of sales on a $1095 per ounce improving.
Improving over the prior quarter stronger grades as we finish mining higher grade lithium.
Cost of sales on $1095 balance was lower quarter over quarter due to the ions sold.
And a higher proportion of capitalized costs as mining at Redbird phase one continues to ramp up.
And round mountain production of 39000 ounces increase over the prior quarter due to higher grades.
Cost of sales $1076 per ounce.
The decrease from the prior quarter.
With that I will now pass the call over to William to discuss our fourth.
William Dunford: Thanks, Claude. We continue to leverage our strong in-house technical team to advance optionality across our large resource base consisting of 26 million ounces of measured and indicated and an additional 13 million ounces of inferred resource calculated at $2,000 per ounce. Our technical team is focused on drilling, technical studies, and permitting to advance resources into our production profile while also conducting exploration aimed at identifying new opportunities to augment our resource base. Here, you can see updates on a few areas of our resource base. Starting in Chile at La Coipa, study and permitting work is progressing well for the offsite extensions. In Q2, we submitted our impact assessment, initiating the agency review process for permits to continue gold mining the next lay back at Puren, which sits in our resource.
Thanks, Claude we continue to leverage our strong in house technical team to advance optionality across our large resource base, consisting of 26 million ounces measured and indicated and an additional 13 million ounces of inferred resource calculated at $2000 per ounce.
Our technical team is focused on drilling technical studies and permitting to invest resources into our production profile.
Also conducting exploration aimed at identifying new opportunities to augment our resource base.
Here you can see updates on a few areas of our resource base.
Starting in Chile at La Coipa study and permitting.
Permitting work is progressing well for the oxide extensions.
In Q2, we submitted our impact assessment initiating the agency review process for permits to continue mining the next layback that pure at which sits in our resource.
William Dunford: We are already gold mining an open pit at Puren today and pending permits we plan to extend gold mining through the end of the decade with this next lay back of the pit. At Lobo Marte, the product team continues to advance technical work as well as baseline studies to support our EIA. Project update will be provided with our year-end results. At Bald Mountain, technical studies, optimization work, and detailed engineering for the Red Bird phase two extensions are ongoing. Recall phase two would bring in an additional 680,000 ounces to the mine plan beyond phase one and extend production out to at least 2031. In addition, we are also progressing drilling, technical work, and studies across multiple smaller quick payback satellite pit opportunities at Bald that sit in our resource and could augment the Red Bird phase two production profile.
We're already mining in open pit at year end today and pending permits we plan to extend mining through the end of the decade with this next layback.
At Lobo Marte take the product team continues to advance technical work as well as baseline studies to support RTI.
Project update will be provided with our year end results.
At Bald Mountain Technical studies optimization work and detailed engineering for the Redbird phase two extensions are ongoing.
Recall phase two would bring in an additional 680000 ounces to the mine plan beyond phase, one and extend production out to at least 2031.
In addition, we are also progressing drilling technical work and studies.
Multiple smaller quick payback satellite at opportunities appalled that sit in our resource and augment the redbird phase II production profile.
William Dunford: The prolific land package at Bald with over 40 storage open pits on the property continues to provide strong targets for mine life extensions and is a focus for our exploration and technical teams. Moving to Curlew, drilling in Q2 continued to highlight strong grades and widths, further improving the quality of the project and showing potential for high-margin underground production. This drilling included intersections of approximately 6 meters true width at 14 grams per ton at STEL and approximately 5 meters true width at 12 grams per ton at K5. We have seen impressive growth of the resource size, quality, and grade over the last few years at Curlew, and with these exploration results, we continue to see potential for further high-value extensions.
Prolific land package of ball over 40 historical on the property continues to provide strong targets for mine life extensions. There is a focus for our exploration and technical teams.
Moving to currently drilling in Q2 continued to highlight strong grades and words further improving the quality of the project and showing potential for high margin underground production.
Drilling included intersections of approximately six meters true width of 14 grams per tonne itself and approximately five meters true width 12 grams per tonne in Q five.
We've seen impressive growth of the resource size quality and grade over the last few years at Carlin and once these exploration results, we continue to see potential for further high value extensions.
William Dunford: The underground development has advanced over 800 meters as we extend our decline at depth towards our 2023 discovery at Roadrunner and along Strike at STEL to target further extensions of high-grade mineralization. Technical studies and detailed engineering are also progressing well. A resource and project update for Curlew will be provided with our 2025 year-end results. At Phase X, development of the underground exploration decline continues to advance with over 4,500 meters developed to date. Infill drilling is also progressing well with good coverage now extending across both the upper and lower target zones. The results are again showing good grades and widths in both areas, further increasing confidence in our initial exploration thesis of a bulk whitening target at Phase X. You can also see on the slide holes DX 162 and 163, which were extension holes drilled down depth of our primary exploration target.
The underground development has advanced over 800 meters as we extend our decline at depth sports, our 2023 discovery at Roadrunner and along strike itself.
Further extensions of high grade mineralization.
Technical studies and detailed engineering are also progressing well.
Resource and project update for <unk> will be provided with our 2025 year end results.
In phase <unk> development of the underground exploration decline continues to advance with over 4500 meters developed to date.
Infill drilling is also progressing well with good coverage now extending across both the upper and lower target zones.
The results are again, showing good grades and widths in both areas further increasing confidence in our initial exploration thesis of our bulk lightning target of paybacks.
You can also see on the slide <unk>, Dx 162, and $1 63, which were extension holes drilled down dip of our primary exploration targets.
William Dunford: With widths in excess of 60 meters and grades of around 3 grams per ton, the results of these extension holes show continuation of mineralization outside of the original target area. Beyond the exciting exploration results, engineering work and technical studies to support project execution of a potential underground mine in the main target area are also advancing well, including development of the underground mine design and schedule, extensive geotechnical studies, and studies for a paid backfill facility. The completion of the ongoing drill program and technical work will support a planned initial underground resource estimate and a project update for Phase X as part of our year-end results update. At Great Bear, work on the AEX program and main project is progressing well. We've made significant progress on construction with the AEX camp nearing completion and earthwork activities in the portal area well advanced.
With with an excess of 60 meters and grades of around three grams per tonne. The results of these extension holes show continuation of mineralization outside of the original target area.
Beyond the exciting exploration results engineering work and technical studies to support project execution, a potential underground mine and the main target area are also advancing well, including development of the underground mine design and schedule.
A geotechnical studies and studies for a paste backfill facility.
The completion of the ongoing drill program and technical work will support our planned initial underground resource estimate and a project update for phase <unk> as part of our year end results.
A great bear work on the <unk> program and main project is progressing well.
We've made significant progress on construction with the AVX camp nearing completion and earthwork activities in the portal area well advanced.
William Dunford: You can also see on the slide that the drop cut for the portal area has advanced well with a high wall for the underground exploration decline now exposed with ground support already in place. We are excited by the progress to date and remain on track to start the initial development of the exploration decline by year-end subject to permitting. For the main project, detailed engineering for all site infrastructure is continuing to advance, including key items such as the mill and tailings facility. Initial procurement activities for major process equipment have begun with awards planned to start later this year and manufacturing of a few long lead items expected to begin next year. I will now hand it over to Geoff Gold to provide a brief update on Great Bear permitting.
Can also see on this slide that the drop cut for the portal area as bad as well with the high wall for the underground exploration decline now exposed with ground support already in place.
We are excited by the progress to date and remain on track to start the initial development of the exploration decline by year end subject to permitting.
So the main project detailed engineering for all state infrastructure is continuing to advance including key items, such as the mill tailings facility.
Mitchell procurement activities for major process equipment have begun with awards planned to start later this year and manufacturing of a few long lead items expected to begin next year.
I will now hand, it over to Jeff by a brief update on great bear permitting.
David Shaver: Thanks, Will. Permitting of the AEX program and main project continue to advance as we work with the provincial and federal authorities. For AEX, we have the permits we need for our current activities and expect to receive our two remaining water permits in the near term. In terms of the main project, we continue to work with the Impact Assessment Agency of Canada to advance the project impact statement. In order to advance this statement on a timely basis, we are coordinating with this federal agency on a staged filing process. We intend to file the majority of the technical chapters by year-end and the remaining chapters by the end of Q1 2026. This approach will underpin a robust impact statement filing with the necessary technical and indigenous contributions and to help facilitate an efficient review process.
Thanks, Wil permitting of the AE X program and main projects continue to advance as we work with the provincial and federal authorities.
For <unk>, we have the permits we need for our current activities and expect to receive our two remaining water permits in the near term.
In terms of the main project, we continue to work with the impact assessment agency of Canada to advance the project impact statement.
In order to advance the statement on a timely basis, we are coordinating with this federal agency on a staged filing process.
We intend to file the majority of the technical chapters are yearend.
The remaining chapters by the end of Q1 2020.
This approach will underpin a robust impact statement filing with the necessary technical and indigenous contributions and to help facilitate review process.
David Shaver: We also continue to advance our IBA negotiations with Lac Sioux and Wabaskang on whose traditional territory the project resides. Lac Sioux and Wabaskang are progressing their independent project impact assessment work, which will help facilitate federal and provincial permitting on the main project and the completion of the IBA. I will now turn it back to Paul for closing remarks.
We also continue to advance our IV a negotiations with black Sue <unk> on his traditional territory the project resides.
Black Jewel in wireless gang are progressing they're independent.
Project impact assessment work, which will help facilitate federal and provincial permitting on the main project.
And the completion of the <unk>.
I will now turn it back to Paul for closing remarks.
Paul Rollinson: Thanks, Geoff. After another strong quarter and a great first half of the year, we are well positioned to meet our targets in 2025. Looking forward, we are excited about our future. We have a strong production profile. We are generating significant free cash flow. We have an excellent balance sheet. We have an attractive return of capital through both the dividend and share buybacks. We have an exciting organic pipeline, and we are very proud of our commitment to responsible gold mining that continues to make us a leader in sustainability. With that, operator, I would like to open up the line for questions.
Thanks, Jeff.
After another strong quarter and a great first half of the year, we are well positioned to meet our targets in 2025.
Looking forward, we are excited about our future.
We have a strong production profile.
We are generating significant free cash flow.
We have an excellent balance sheet.
We have an attractive return of capital through both the dividend and share buybacks.
We have an exciting organic pipeline.
And we are very proud of our commitment to responsible mining.
That continues to make us a leader in sustainability.
With that operator, I'd like to open up the line for questions.
Tina: Thank you. At this time, I would like to remind everyone to ask a question. Press star one on your telephone keypad, and we will pause for just a moment to compile the Q&A roster. Our first question comes from Bahad Garink with Jefferies. Please go ahead.
Thank you at this time I would like to remind everyone to ask a question press star one on your telephone keypad and we'll pause for just a moment chicken pilot the Q&A roster.
Our first question comes from.
<unk> <unk> with Jefferies. Please go ahead.
Bahad Garink: Hi. Can you hear me?
Hi can you hear me.
Paul Rollinson: We can hear you.
Yes, we can hear you.
Bahad Garink: Okay. Great. Thank you. I just wanted to ask about Bald Mountain. The grades were, of course, very high in Q2 due to the LBM pit. Maybe just remind us how to think about the second half at Bald Mountain.
Okay, great. Thank you I just wanted to ask about Bald mountain. The grades are of course very high in the second quarter due to the L. P. M pets, maybe just remind us how to think about the second half at Bald mountain.
Claude Schimper: Paul, it's Claude here. Morning. We've had a very strong first half of the year at Bald. The second half will be slightly off the plate as we continue to push on the Red Bird startup, which is progressing very well. From a production point of view, we expect it to be slightly less in the first quarter because we don't have the same LBM grades because we've now finished that area.
Yes, part of the code yet good morning, guys.
And we've had a very strong first half.
All the.
The second half movies.
The prices, we continue to push on the reboot.
Startup, which is progressing very well.
A production point of view.
We expect it to be slightly less than the first quarter because we don't have the same Albion is now finished.
Bahad Garink: Okay. Then maybe just taking a step back, the U.S. operations as a whole, it seems like it could be trending above the midpoint of full-year guidance. Maybe just walk us through. Are there any offsets that we should be thinking about? It sounds like Bald Mountain and Round will be pretty strong in the second half as well.
Okay, and then maybe just taking a step back the U S operations as a whole.
It seems like it could be trending above.
The midpoint of full year guidance, maybe just walk us through are there any offsets that we should be thinking about it sounds like bald mountain and round will be pretty strong in the second half as well.
Claude Schimper: We expect to continue the good performance from the U.S. operations. Obviously, our second half will be slightly lower at Fort Knox as we cycle out the different production from Manh Chot and Fort Knox. I think, as we've said across the board, we've had a very strong first half of the year from all the sites and good contributions. We do expect the second half in the U.S. to be slightly lower. As Andrea Freeborough said, that's impacting the cost as well.
Yes, we expect to continue the good performance from the from the U S operations.
Obviously, our second half will be slightly lower.
Knox as well.
Cycle out the different production from Minto and.
And Fort Knox.
So I think we.
As we said across the board we've had a very strong.
First half of the year from all the signs are good contributions.
Do you expect the second are off in the U S to be slightly lower.
Andrea said thats impacting the cost as well.
Bahad Garink: Okay. Thank you.
Okay. Thank you.
Tina: Again, to ask a question, press star one. Your next question comes from the line of Carey MacRury with Canaccord Genuity. Please go ahead.
I want to ask a question press star one.
Question comes from the line of Kerry Macquarie with Canaccord Genuity. Please go ahead.
Carey MacRury: Thank you. Good morning, everyone, and congrats on the good quarter. Maybe first on the Piran for laid back. Just wondering if you can give us a bit more color on what that looks like from a tons of lower perspective and grade and maybe strip ratio if you can.
Hey, good morning, everyone and congrats on the good quarter.
Maybe first on the pure any floor laid back just wondering if you can just give us a bit more color on what that looks like from a tons of order perspective in grade and maybe strip ratio to begin.
William Dunford: We can give you a tiny bit. We are looking at, we have got about a little over half a million ounces of resource there. I think the average grade there is similar to what we have seen in the past, around that 2 gram per ton mark, potentially a little bit lower as we continue to optimize the pit there. We see the potential to continue with similar gold mining at Piran 4 to what we have seen in Piran 2.
Yeah, we can give you a sense of it.
We're looking at we've got about a little over half a million ounces of resource there.
And I think the average grade there is similar to what we've seen in the past around that two gram per tonne, mark potentially a little bit lower as we continued to optimize the pit there.
So we see the potential to continue with similar mining.
Here in Florida, what we've seen in parentheses.
Bahad Garink: And any high-level thoughts on strip ratio?
And any high level thoughts on strip ratio.
William Dunford: We might have to get back to you on that. I'm not sure off the top of my head the exact strip ratio of the extensions. I think it's relatively similar to what we've been doing. You can see in the image that we've stripped the majority of the deposit already.
Yes, we might have to get back to you on that.
I'm not sure off the top of my head the exact strip ratio of the extension.
Similar to what we've been doing you can see on the image that we strip the majority of the deposit already.
Carey MacRury: Okay. Fair enough. Then maybe for Andrea Freeborough, you are focused on paying down the $500 million debt due, I think, in 2026 or 2027. But beyond that, are there any plans to buy back any debt earlier, or are you comfortable to hold that debt? It is pretty long-term and pretty attractive rates.
Okay Fair enough and then maybe for Andrea.
Your focus on paying down the $500 million debt due I think in 2026 to 27, but beyond that is there any plans to buyback any debt earlier or are you comfortable that it is pretty long term in pretty pretty attractive rates.
Andrea Freeborough: Yeah. I mean, there is obviously always a cost associated with retiring debt early. First up is the 2027 WSEP. So we expect to repay those either, you know, at or potentially before maturity. Taking a step back, I mean, we are just expecting to get to net cash in the third quarter. We have talked previously about sort of a minimum cash balance around $500 million. We are now at the end of Q2 at $1 billion, which is, you know, the minimum cash of $500 million plus $500 million that we could use to repay the 2027. So that is sort of where we sit today, but we are certainly comfortable continuing to grow the cash balance.
Yeah, I mean, there's obviously a cost or the cost associated with retiring debt early.
First up is the 2027 that G fast so we expect to read out.
Are you there.
Or potentially perform maturity, taking a step back I mean, we're just expecting to get to net cash in the third quarter. So and we've talked previously about sort of a minimum cash balance around 500 million.
We're now at the end of Q2 1 billion, which is the minimum cash of 500 500 that we could use to repay the 2020, so that's sort of where we sit today, but we're certainly comfortable continuing to grow the cash crop.
Carey MacRury: All right. That's it for me. Thanks.
Okay. That's it for me thanks.
Tina: Our final question comes from the line of Tanya Jakusconek with Scotiabank. Please go ahead.
And our final question comes from the line of.
Hi, Tanya <unk> with Scotiabank. Please go ahead.
Tanya Jakusconek: Great. Good morning. Thank you for taking my questions. Congrats on a good quarter. The first one is, Andrea, if I can continue your line of thought on your free cash flow. We are going to be net cash positive in Q3. You have that billion dollars in cash on the balance sheet. You are going to pay down the $500 million notes in 2027. Should I be thinking then if I keep the cash in that $500 million range, anything above and beyond would go to your share buyback?
Oh, great. Good morning, Thank you for taking my question.
Congrats on a good quarter.
The first one is just Andrew if I can continue your line of thought on your free cash flow. So we're going to be net cash positive in Q3, you've got that billion dollars on Mac and cash on the balance sheet, you're going to pay down our 500 million note in 2027 should I be thinking that if I keep the cash.
And that $500 million range anything above and beyond would go to your share buyback.
Paul Rollinson: Yeah. Maybe I will jump in on that one, Tanya. Thanks for the question. Look, I guess I would just say, number one, what is important here is we are going to do what we say we will. We did commit to $500 million in buybacks. Again, context, we are all very happy with where the gold price is, but for context, we just reactivated the buyback in Q2. Now we are reporting Q2. So far, so good. We are definitely committed to the $500 million and the $150 million, so $650 million in return of capital. As we look through the windshield later into the year, it is all kind of gold price dependent. We have always said we also want to continue to build cash on the balance sheet.
Yes.
Maybe I'll jump in on that one.
And yet.
Thanks for the question.
Yeah look I guess I would just say.
Number one what's important here.
To do what we've seen.
Will.
And we did commit to $500 million in buybacks.
Again context, we're all very happy with where gold prices, but for for.
For context.
We just reactivated the buyback.
In Q2.
Now we're reporting Q2.
And so far so good so we're definitely committed to the 500 and the 150650 of returning capital.
As we look through the windshield later into the year.
It's all kind of gold price dependent and.
We've always said.
We also want to continue to build cash on the balance sheet. So.
Paul Rollinson: I guess it feels early days to sort of make a prediction on what we might do with excess cash at this point. It is kind of hypothetical. I think what is important is it is clear that we have been buying and will continue to buy. If all of this positive gold price continues, our expectation is we will keep going with the buyback next year and perhaps the year after, depending upon share price and gold price.
I guess it feels early days.
To make a prediction on what we might do with excess cash at this point, it's kind of hypothetical.
But I think what's important is it's clear that we.
We have been buying and we'll continue to buy and if all of this.
Positive gold price continues.
Our expectation is we will keep going with the buyback next year in <unk>.
The year after.
Pending upon share price.
Chris.
Tanya Jakusconek: Okay. Yeah, thank you for that. If I could ask a second question, I am trying to understand how you are getting through your budgeting phase as you look forward to 2026. How are you thinking about your life of mine plans and your reserve and resource base? It is quite different from lower gold price assumptions versus where the gold price is today. So I am trying to understand how you are approaching your life of mine plans and your gold reserves and gold resources given the discrepancy in pricing.
Okay. Yeah. Thank you for that and if I could ask a second question.
I'm trying to understand how.
Adding to your budgeting phase as you look for full year 2026, how are you thinking about your life of mine plans.
Reserve and resource base I mean, it's quite.
Tom.
Lower gold price assumptions, where it says lac nickel prices today, so I'm just trying to understand how youre approaching you.
Your life of mine plan and dealer.
Reserves and resources, given back and see in pricing.
Paul Rollinson: Yeah. Maybe I will take that one as well. Yeah. I mean, it is interesting times. I am looking at spot, and I am looking at, for example, long-term consensus commodity prices that you guys are using, and there has never been as big a lag. I think we are all kind of absorbing, digesting, where is this gold price going? Where is it going to last? I think if the gold prices hang in around current levels or higher, you will probably expect the industry will move up their reserve resource pricing again. But those are decisions that happen towards the end of the year. Key point for us, though, is we do not need those higher prices. We have said many times we are not in a high-price environment dropping our cutoff grades. We are absolutely focused on margin cash flow value creation. But you are right.
Yes, maybe I'll, maybe I'll take that one as well.
Yes.
It's interesting times.
I'm looking at spot and I'm looking at for example, long term consensus.
Commodity prices that you guys are using and there has never been as big a lag.
So I think we're all kind of.
Absorbing digesting.
Or is this gold price going where is it going to last.
If the coal prices hang in around current levels or higher.
Youll, probably expect the industry well.
Move up their reserve resource pricing again, but those are decisions that happened.
Towards the end of the year key point for US, though is we don't need those higher prices.
<unk> said many times, we're not in a high price environment dropping our cutoff grades.
We're absolutely focused on.
<unk> margin.
Margin cash flow value creation.
But you're right.
Paul Rollinson: As William Dunford alluded to, we have a lot of optionality in our portfolio, and we are getting really good results in gold exploration. So we are advancing more studies. I think the way I would think about those studies and the optionality is really about more gold production in the 30s. As it relates to the gold price, as you can expect, we are going to look at a range of prices, just like we look at payback, Bangford Buck, IRR. But it is a good place to be. We have got a significant amount of optionality. The gold price certainly, and combined with the gold exploration results, gives us lots to think about. But right now, we are not using any higher gold prices than what we have got currently in our gold reserves.
Well I alluded to.
We have a lot of optionality in our portfolio.
And we're getting really good results in exploration.
And so we're advancing more studies.
And I think the way I would think about those studies and the Optionality is is really about.
More production in the thirties.
And so.
No.
And as it relates to the gold price.
And as you can expect we're going to look at a range of prices just like we look at payback and.
For back IRR, but it's a good place to be we've got a significant amount of optionality.
The gold price.
Certainly.
Combined with the exploration results it gives us lots to think about.
Right now, we're not using any higher gold prices than what were we.
You've got currently and our reserve resource.
Tanya Jakusconek: No, yeah, I appreciate that. It is an interesting time for the industry. Never had this discrepancy before. You know, Hollywood problem, I guess. Maybe my final question, if I could, despite the gold price, can we just talk about some of your properties where you are seeing these gold exploration results that you are going to be able to replace gold reserves, regardless of this gold price? What properties?
No I appreciate that it's.
An interesting time for the industry never had this discrepancy before and Hollywood problem I guess.
And maybe my question if I could.
You know.
Despite the gold price can we just talk about some of your properties, where you are seeing you know these exploration results that you are going to be able to replace reserves.
This gold price.
What properties are key.
Paul Rollinson: I think the key.
Tanya Jakusconek: Well.
Paul Rollinson: Yeah. The key areas where I think we're really excited is at Curlew, which Will alluded to in phase X, where you know these are brownfield development. I think we're kind of guiding softly that these could be contributors in around 2028. Two things are happening there. We're getting they're growing in size, and we're getting good grades and widths. So they're moving in the right direction. I would highlight those two in particular.
Yes, I mean, the key areas, where I think we're really excited us is that currently.
Which will alluded to in <unk>.
These are brownfield development.
I think we are.
We're we're kind of guiding softly that these can be contributors.
2028.
Two things are happening there we're getting.
They are growing in size and we're getting good grades and wet so they're moving in the right direction.
I would highlight those two in particular.
Tanya Jakusconek: Okay. Thank you very much for taking my question.
Okay. Thank you very much for taking my question.
Paul Rollinson: Thanks, Tanya.
Thanks.
Tina: Your next question comes from the line of Anita Soni with CIBC World Markets. Please go ahead.
Your next question comes from the line of Anita Soni with CIBC World markets. Please go ahead.
Anita Soni: Hi. Good morning, guys. Thanks for taking my question. Most of them have been asked and answered already in terms of capital allocation, gold prices, and the reserve replacement. Could you just give a little color on Lobo Marte and how you see that fitting into the fold and the work you are doing there?
Hi, Good morning, guys. Thanks for taking my question. So most of them asked and answered already in terms of capital allocation that in gold prices and the reserve replacement, but could you just give a little color on on logo Marseille and how you see that fitting into the fold and the work Youre doing there.
William Dunford: Sure. Yeah. As you know, we released NFS on Lobo Marte a few years ago. We are really in the permitting process right now. So we are making sure we are doing the robust technical work to support that permit submission. We see that as a really, really strong ASIC high-margin mine, really just on the back of the grade. It is 1.3 gram per ton going onto a heat leach. It is a really strong economics.
Sure Yes.
As you know, we released Matt first on lower Mark to a few years ago.
And we're really in the permitting process right now so we're making sure we're doing the robust technical work to support that permit submission.
We see that is it really really strong ASIC high margin.
Mine really just on the back of a b grade its one three gram per time going onto a heap leach so really strong economics.
Paul Rollinson: Wow.
William Dunford: Low strip ratio, yeah, 2 to 1 strip. So it is going to be a really good contributor in the 30s. We are just going through the process of getting ready for the permitting efforts right now. We will, you know, it is kind of on that escalator to get it into the production profile, doing all the right upfront work.
Low strip ratio two to one strip.
<unk> going to be a really good contributor in the thirties, we're just going through the process of getting ready for the permitting efforts right now.
Well, it's kind of on that on that escalator to get it into the production profile.
All right upfront work.
Anita Soni: All right. Thanks for taking my question. Congrats on a great quarter.
Alright, Thanks for taking my question congrats on the great quarter.
Thanks Keith.
Tina: Your next question comes from the line of Carey MacRury with Canaccord Genuity.
Your next question comes from the line of Terry Macquarie.
Macquarie with Canaccord.
Genuity.
Carey MacRury: Hi. I just wanted to follow up on the higher costs expected in the second half. Andrea, you mentioned that that is going to occur at a number of operations. Just wondering if you can just highlight which of those operations we should be looking at.
I just wanted to follow up on the higher cost expected in the second half Andrew you mentioned, that's going to occur at a number of operations. Just wondering if you can just highlight which of those operations we should be looking at.
Andrea Freeborough: Sure. So I mentioned previously, I think even back last quarter, there are a couple of operations where we are moving from stripping being characterized as capital to operating waste. So that is Fort Knox, Phase 10, Round Mountain, Phase S. Then at Tasiast, we also have more operating waste in the second half and planned lower grade. So those are sort of the three operations where we are seeing the change in stripping cost characterization. There are some other impacts as well. So at Paracatu, we expect higher power costs in the second half. That is just typical seasonality and also potentially higher power costs in Alaska. All of that is just reflected in our guidance. We are still on guidance for our annual guidance for the year. This is just explaining why the second half is higher than the first half to get us to those guidance numbers.
Sure. So I've mentioned previously I think you've been back last quarter.
There's a couple of operations, where we're moving from stripping being characterized as capital to operating at waste. So.
Fort Knox phase can round mountain phase.
And then at Tasiast. We also have more operating late in the second half and planned lower grades.
So those are sort of entry.
Operations, where we're seeing it.
The change in that.
Dripping cost characterization and then there's some other.
Some other impacts as well so at <unk>, we expect higher power cost in the second half that's the typical seasonality.
And also potentially higher power costs in Alaska all of that is reflected in our guidance that we're still on guidance for our annual guidance for the year.
Waning why the second half is higher than the first half to get to that guidance number.
Carey MacRury: Okay, great. That's helpful. Thanks, Andrea.
Okay, Great that's helpful. Thanks Ginger.
Tina: With no further questions in the queue, I will turn the call back over to Paul Rollinson for closing remarks.
And with no further questions in the queue I will turn the call back over to Paul Rawlings for closing remarks.
Alright. Thank you operator, thanks, everyone for joining us this morning.
Paul Rollinson: Thank you, operator. Thanks, everyone, for joining us this morning. We look forward to catching up with you in person in the coming weeks. Thank you.
Counting up with you in person in the coming weeks. Thank you.
Tina: Thank you again for joining us today. This does conclude today's presentation. You may now disconnect.
Thank you again for joining US today. This does conclude today's presentation you may now disconnect.
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Okay.
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