Q2 2025 Centerra Gold Inc Earnings Call
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Speaker #4: Thank you for standing by . This is the conference operator . Welcome to the Centerra Gold Inc second Quarter 2020 conference call . As a reminder , all participants today are in listen only mode and the conference is being recorded .
I would now like to turn the conference over to Lisa Wilson Senior Vice President of Investor Relations and corporate communications with some terrible. Please go ahead. Thank you.
You operator, and good morning, everyone welcome to <unk> second quarter 2025 results conference call.
Speaker #4: After today's presentation , there will be an opportunity to ask questions . To join the questioning queue , you may press star , then one on your telephone keypad .
Joining me on the call today are Paul Tamari, President and Chief Executive Officer, David Hendricks, Chief Operating Officer, and Ryan Schneider and Chief Financial Officer.
Speaker #4: Should you need assistance during the conference call , you may signal a conference operator by pressing star , then zero . I would now like to turn the conference over to Lisa Wilkinson , vice president of investor relations and corporate communications with Centerra Gold .
Other members of the management team are available for the Q&A session.
Our news published yesterday outlines our second quarter 2025 results and have complemented by our MD&A and financial statements, which are available on SEDAR Edgar and our website.
Speaker #4: Please go ahead .
All figures are in U S dollars unless otherwise noted.
Segmentation slides accompanying this webcast are available on <unk> website.
Following the prepared remarks, we will open the call for questions.
Before we begin I would like to remind everyone that today's discussion may include forward looking statements, which are subject to risks that could cause our actual results to differ from those expressed or implied.
For more information please refer to the cautionary statements in our presentation and the risk factors outlined in our annual information form.
We will also be referring to certain non-GAAP measures during today's discussion.
For a detailed description of these measures. Please see our news release and MD&A issued last evening.
I will now turn the call over to Paul to worry.
Thank you Lisa and good morning, everyone.
The second quarter, both Mount Milligan and <unk> contributed to strong earnings driven by high commodity prices Goldman copper production in the quarter was over 63000 ounces and $12 4 million pounds copper respectively.
The second quarter marked the first full period under the leadership of our new Chief Operating Officer, David Edwards, and our newly appointed General manager of Mount Milligan, Eric Bill.
The early impact has been substantial bringing renewed operational focus and significantly enhancing our confidence in the mine's future performance.
Through the initiation of an infill and grade control drilling program among other initiatives.
We are making solid progress on two studies that are expected to support <unk> long life copper gold organic growth strategy in British Columbia, both of which are targeted for delivery in the second half of 2025.
At Mount Milligan work on the PFS is on track to be completed in the third quarter.
We are evaluating a substantial mineral resources to unlock additional value beyond the current mine life of 236, which is based on the available space in the existing <unk> facility.
We are progressing with the engineering solution for additional tailings capacity.
PFS is set to incorporate an increase of annual mill throughput in the range of 10% through the ball mill motor upgrades.
Which will be at modest capital cost.
At the <unk> project, we continue to advance work on a P. Eight based on an open pit and conventional underground mining concept.
Which is on track for completion by the end of 2025.
<unk>, a significant infrastructure already in place requiring only targeted refurbishing to support operations.
To complement this existing infrastructure is anticipated a new crushing conveying and mining infrastructure will be developed to further support our operations and longer term efficiency.
We expect the existing infrastructure to lower the execution risk of the project when compared to a typical greenfield project of this scale.
Yesterday, we announced that we are advancing on the Goldfield project, which is located in the historic mining district in Nevada, one of the most reliable mining jurisdictions in the world.
This is a strategic milestone that is expected to grow since there is near term gold production profile and can be fully funded from our existing liquidity.
Over the last several months, we've undertaken additional technical work and project optimizations that has significantly enhanced goldfields value proposition.
<unk> oil prices combined with these recent developments.
Have improve the project's economics, enabling us to move forward with execution.
Our technical study confirms attractive economics of the project, including an after tax NPV of $245 million and an after tax IRR of 30% using a long term gold price of $2500 per ounce.
We have implemented a targeted hedging strategy on 50% of gold production in 2029, and 2030 with a gold price floor of 3200 per ounce.
And an average call price cap of 4435 in 2029, and 4705 and 2030 at no cost to Sentara.
This gold hedging strategy positions us to lock in strong margins to safeguard project economics, and enable predictable cash flow during the ramp up period, while maintaining exposure to rising gold prices for the life of the mine.
Just under 80% of the planned production over the life of mine remains unhedged and fully exposed to market gold prices.
The project is expected to have a seven year mine life average annual production of around 100000 ounces and peak production years at an all in sustaining costs of $1390 per ounce and a competitive initial capital cost of $252 million.
The project is well positioned to benefit from a short timeline to first production by the end of 2028 and low execution risk given its relatively simple process flow sheet.
Goldfield is projected to grow our near term gold production profile generate robust cash flow and deliver significant value to shareholders.
We believe also that goldfield is ideally positioned in our project development pipeline.
Any additional gold production online, helping to offset the natural declines IDEXX suite and to ensure continuity as we advanced development of the longer life, Mount Milligan and <unk> assets in British Columbia.
I'd like to share an update on our sustainability initiatives.
In June we published our 2020 for sustainability report we.
We achieved several important milestones this past year and we remain committed to meet the rising expectations through greater transparency and alignment with the recognized sustainability frameworks and standards.
With respect to some of the progress we've made at exited we achieved full compliance with the international Cyanide management code <unk>.
Reinforcing our commitment to safe and environmentally responsible mining practices.
We advanced our climate change strategy, focusing on economically feasible decarbonization initiatives at the site level.
Refining our climate risk scenario analysis.
And continuing to enhance our disclosures.
As part of that broader effort execute earn an ISO 5001 certification for energy management, helping us improve energy efficiency at site.
We also strengthened our partnerships with indigenous owned businesses and reached 19% indigenous employee representation across our British Columbia operations.
In terms of the local economic impact our local procurement spending rose by 26% year over year across all operating jurisdictions, reaching $134 million.
And lastly, we are pleased to share that we have surpassed our 2026 gender diversity goals for the second year in a row with women, representing 38% of our board and 33% of our executive officers.
Together these achievements reinforce our belief that strong sustainability performance is a key driver of long term value for all of our stakeholders.
And with that I'll pass the call over to David to walk through our operational performance for the quarter.
Thanks, Paul slot.
Slide eight shows operating highlights at Mount Milligan for the second quarter.
Mount Milligan produced over 35000 ounces of gold and $12 4 million pounds of copper in the quarter.
In the first half of the year mining operations encountered zones with more challenging mineralization, resulting in lower than anticipated gold grades from these areas open pits.
While gold grades remain above the average grade of the reserve. We believe the variability is primarily attributed to certain zones being drilled with wider spacing.
We have commenced an infill and grade control drilling program in the second quarter.
This initiative is designed to improve geological confidence and will be integrated into the upcoming Mount Milligan PFS contributing to a mine plan with greater visibility on grades moving forward.
Also as we continue to improve our understanding of the ore body at Mount Milligan and advance our broader site optimization program. We are enhancing our mine to mill integration to achieve better control of grades delivered to the mill.
We have updated our 2025 gold production guidance at Mount Milligan to between 145000, and 165000 ounces to recalibrate for the adjustment in grades we have reaffirmed our 2025 copper production guidance of 52 to <unk>.
16 million pounds.
Both gold and copper production and sales are expected to be weighted towards the second half of the year.
In the second quarter, all in sustaining cost on a byproduct basis or $1286 per ounce, 10% higher than last quarter due to an increase in sustaining capex and lower ounces sold in the quarter.
We have revised our 2025 cost guidance ranges at Mount Milligan to reflect updated production guidance figures all in sustaining cost on a byproduct basis are now expected to be between 1003 hundred 50 and $1450 per ounce.
On slide nine we show operating highlights at <unk> suite for the quarter.
Second quarter production was over 28250 ounces better than planned due to higher grades resulting from mine sequencing.
We have reaffirmed our 2025 production guidance Saddam suits with production expected to be higher in the second half of the year as we access higher grade areas of the mine.
In the second quarter, all in sustaining cost on a byproduct basis, we're $1755 per ounce, which is higher compared to last quarter, driven by a higher royalty expense per ounce due to elevated gold price.
We have revised our full year cost guidance ranges, Alex suite to reflect both higher royalty costs stemming from the strong gold price environment and an updated royalty structure that was approved by the Turkish government. This July.
2025, all in sustaining cost on a byproduct basis are now expected to be 1675 to $1775 per ounce.
The restart of Thompson Creek is advancing with approximately 20% of the total capital investment completes in.
In the second quarter, we invested $27 million in non sustaining capital expenditures, bringing total investment spend since the September a restart decision to $82 million we.
We have reaffirmed our 2025 guidance for non sustaining Capex at Thompson Creek.
The project remains in line with the total initial capital estimate of $397 million as outlined in the feasibility study and is on track for first production in the second half of 2027.
I'll now pass it to Ryan to walk through our financial highlights for the quarter.
Thanks, David Slide 11 details our second quarter financial results.
Adjusted net earnings in the second quarter were 53 million or <unk> 26 per share, which benefited from strong metal prices.
Key adjustments to net earnings include $15 million of unrealized gain on the Remeasurement of the sale of the greenstone partnership in 2021 and $12 million of unrealized loss on our financial asset related to the additional agreement with Royal Gold among other things.
In the second quarter sales were over 61000 ounces of gold and 12 million pounds of copper in.
The average realized price was 2000 and $793 per ounce of gold and $3 62 per pound of copper, which incorporates the existing streaming arrangements at Mount Milligan.
At the molybdenum business unit, approximately $3 1 million pounds of molybdenum was sold in the second quarter at the <unk> facility at an average realized price of $21 43 per pound.
Consolidated all in sustaining cost on a byproduct basis in the second quarter were $1652 per ounce.
We have updated our 2025 all in sustaining cost guidance following lower expected production at Mount Milligan and higher royalty costs at oxy, driven by elevated gold prices and the newly updated royalty extraction.
We now expect consolidated all in sustaining cost on a byproduct basis to be between 1650 and $1750 per ounce in 2025.
Slide 12 shows our financial highlights for the quarter and.
In the second quarter, we increased cash flow from operations before working capital and income taxes paid by 22% over last quarter generating a total of $98 million.
After routine statutory tax and royalty payments to the Turkish government cash flow from operations on a consolidated basis for the quarter was $25 million and we had a free cash flow deficit of $25 million for the quarter.
In the second quarter, Mount Milligan generated $57 million in cash from operations and $43 million in free cash flow.
<unk> cash flow in the quarter was impacted.
The tax and royalty payments of $84 million paid to the Turkish government as a result, <unk> cash used by operations was $18 million in the second quarter and free cash flow deficit was $28 million, we expect to generate strong free cash flow and oxy in the second half of 2025.
The molybdenum business unit used $1 million of cash in operations and had a free cash flow deficit of $27 million this quarter, mainly related to spending on the Thompson Creek restart.
Returning capital to shareholders remains a key pillar in our disciplined approach to capital allocation in the second quarter, we increased our share buybacks by 80% compared to the previous quarter repurchasing $3 9 million shares for total consideration of $27 million.
Our board has approved the repurchase of up to $75 million of <unk> shares through the CIB in 2025, and we have repurchased $42 million in the first half of the year.
We also declared a quarterly dividend of <unk> <unk> per share.
And the first six months of 2025, we have returned $63 million to shareholders through dividends and buybacks as part of our commitment to returning capital to our shareholders. We expect to remain active on the share buybacks subject to market conditions.
At the end of the second quarter, our cash balance was $522 million.
This results in total liquidity of over $920 million, while positioning us to fully fund our organic growth projects at goldfield Mount Milligan <unk>.
And Thompson Creek, while continuing to return capital to shareholders.
I'll pass it back to Paul for some closing remarks. Thanks.
Thanks, Brian.
Very proud of the progress we've made in advancing our internal growth strategy. The decision to move forward with the Goldfield project is a key milestone that is expected to enhance our near term gold production profile.
Create value for our shareholders.
In parallel.
Advancing studies at both Mount Milligan, and <unk>, which are on track to be completed in the second half of this year.
Two studies represent significant milestones in advancing our goal growth development pipeline and are focused on unlocking additional value from rents in British Columbia.
Our internal growth strategy is underpinned by a strong balance sheet and disciplined capital allocation all of our projects Goldfield Milligan Kennedy Thompson Creek are expected to be self funded from our existing liquidity, reflecting our commitment to generating value, while maintaining financial strength and flexibility.
And with that operator, I will open the call to questions.
Thank you we will now begin the question and answer session to ask a question and joined the queue. You May Press Star then one on your telephone keypad, you will hear a tone acknowledging your request.
If youre using a speakerphone please pick up your handset before pressing any keys.
If your question has been addressed and he would like to withdraw it. Please press Star then two.
We will now pause momentarily as callers join the queue.
And today's first question is from Don Demarco with National Bank. Please proceed.
Thank you operator, and good morning, Paul and team congratulations on continuing to progress on your internal growth strategy.
First question has to do at Mount Milligan Mill, I see that you encountered some challenging mineralization.
Are you seeing good results and improved confidence after implementing the additional infill drilling.
Hi, Don this is David.
What we've done is we've really increased the density of drilling in the area that we've been mining for the neck power over the last six months and we'll continue to monitor over the next 18 months.
We're very confident with our new guidance number.
The drilling results that we have will lead to a much better prediction of what we're doing and also those are the same that same information is being implemented into the study that's being done to look at the extension of the Mount Milligan mine life.
Okay, great. Thanks.
And then onto Goldfields.
So I see the project Gulfport and it certainly makes sense to offset offset offset offset but at first glance. The reserves of 700000 ounces are unchanged from the end of last year when the company decided not to proceed.
I think at that time was partly because of the size of the reserves.
Could you.
Walk through what's new.
Now versus last year and is it primarily a higher gold price.
Well, it's a combination of a couple of things done.
You're right I mean, they the reserve that we have now is roughly equivalent to the resource we had on the books at the end of the year. However, we've done a bunch of technical work since the end of the year, principally focused on crushing optimization and getting better recoveries on a portion of the ore. So we just have a better view on achieving higher recoveries were up in the <unk>.
7000 hours before we are in the <unk>.
In the sixties and of course gold prices a major factor were six $700 of announced higher than we were six months ago.
With that color that we put in place on a portion of the ounces. The economics really light up here. So one way to look at it is that the gold prices made up for inventory.
In some ways.
To make this project quite attractive on an NPV basis, and you said I mean, the MPV at the 2400.
Is in the mid two hundreds and certainly a lot higher than that of 3030 to 200 3400. So it's really it's principally I'd say a gold price phenomenon, but also really good technical work on the dynamics between crushing and recovery.
Versus running line so a combination of all those.
Okay, Great. That's helpful and so you know I guess in this environment.
Got it and build it and looking at your pipeline here like how do you think about sequencing and financing Goldfields, Mount Milligan PFS and commerce.
Looking forward to the coming out and if I sum up the capex on these projects with some assumptions on <unk>. It seems to maybe approach available liquidity.
So absolutely one of our one of our key strengths here is that with available liquidity. We can fund all of that so Thompson Creek Oldfield <unk> Mount Milligan.
And still have some gas left in the tank and asset 2500.
At spot certainly we remain in very significant go for free cash flow generation mode, but no question about it we can afford all of these projects at 2500 given existing liquidity.
Okay great.
Great. Okay, well thanks for that that's all for me and good luck for the rest of the quarter.
Thanks, a lot Don.
And our next question comes from Lawson Winder with Bank of America Securities. Please proceed.
Great. Thank you very much operator, and good morning, Paul and team. Thank you for today's update and all the detail you provided.
Glenn.
Thinking about Mount Milligan, and you're sort of advancing understanding of the grade when.
When we looked at 2026.
How could the production profile differ versus the prior available technical report and can you give us an early indication of Directionally, what you might be thinking in terms of production there versus 2025.
Well, Dave can jump in on some of that EBIT detail here, but fundamentally we're what we've been dealing with here over the last 18 months is mining through a zone as Dave said in his prepared remarks that was not drilled to the same density as the vast majority of the rest of the ore body and as a result of that.
We've had some great issues and what Dave described as the implementation of a great control and infill program that has certainly increased our understanding and vastly improved our confidence in the greater will be mining and as Dave said that will be incorporated in the PFS I don't want to get ahead of ourselves on what's going to be in the PFS, but we're about a month away from that.
And as we've been signaling we're gonna be adding a significant mine life.
Through the addition of further tailings capacity, but what I can tell you is that Mount Milligan. If you look at over the last four or five years, that's roughly the average production profile in both gold and copper that one should expect.
In fact for the entire mine life, there will be up years here and there as we hit pockets of higher grade, particularly on the gold side, but roughly speaking what <unk> seen over the last five years is a good representative average.
We might see over the next several.
But I stress there will be there our zones in that ore body that are higher grade gold and it will cause a few years to be higher.
But we'll be putting out a very detailed production plan come September on the entire mine life at Mount Milligan.
I look forward to that and if you don't mind I wouldn't mind, just trying to push you a little bit more on what we could expect in the technical study I understand your reluctance to take it up to reveal too much but.
At its core it's about extending the mine life, but you've mentioned a 10% increase in throughput in the past we've talked about potential increases in gold recoveries is that something that that could be a feature in terms of the near term mine plan right.
That might complement the long term extension and is there anything else that you guys are thinking about it in this study in terms of near term benefits.
So let me kick off on that that longer term life extension.
But what I can tell you is the principal objectives of this study are number one identify tailings capacity that is why our mine life is currently limited to 2036, and we have done that we've got an engineered solution for incremental tailings capacity second you pointed out.
Throughput increase we're targeting 10% to a relatively what I would call straightforward improvements.
Improvements in the existing circuit.
On recovery, we are also looking at whether or not there are modifications, we can make in the plant.
To aid in a recovery and we are more positive that there may be something there.
Certainly over a life of mine basis.
And what you are fishing for here is production 26, 27, I think what we've guided here for the for this year as I said give or take within a range is representative of what you might expect for the next several years.
Okay.
Great I appreciate the color every little bit helps and then just if I could ask one final question on Goldfield. What is what are sort of if we think about the timeline to first production in 28, let's call. It what is the bottleneck and could you just walk us through sort of the key permits that need to be secured in order to ensure that 2028.
Of course production.
Yeah, So starting with the last part of your question. There most of the permits are in place for Goldfield as you saw on our plan view there are a number of deposits there the bulk of the ounces come from the Gen field deposit.
That is essentially permitted but we have to make one minor amendments on having upside that pit versus what was previously permitted. So what I would say is there are some incremental permits to obtain on it.
On an expanded gen field as well as the other satellite pits I would call these fairly routine.
Nevada type permits the critical path for the project really goes through the completion of engineering procurement and then execution. The bulk of the execution will take place in 27, and 28, and we intend to mobilize the mining contractor so the the critical path.
Runs through what I would call project activities engineering procurement and then execution.
Great. Thank you very much guys.
Thank you Barton.
And the next question is from Raj Ray with BMO capital markets. Please proceed.
Okay, operator, good morning, Paul and team I have three questions. If I may a personal mountain Milligan.
Dave can you.
0.2, how long you expect to meet this car.
Current zone that we're mining through that's that's giving lower grade reconciliation versus the reserve model.
Is it going to grow substantially in the 26 or not.
Secondly, with respect to the Oxford royalty.
Am I correct in that.
Assuming that there's more of a run.
That the sliding scale is the same which is basically for every $100 increase in gold price.
Royalty increases by 125 basis point.
And then do you have a question on goldfield.
Solution versus the reserve model.
For that.
Well done.
Is it going to go up substantially and in 'twenty six or not.
No I mean talking about the Mount Milligan piece.
Secondly, with respect to the Oct suite royalty my correct in assuming that there's more variety.
One thing that's pretty important as we're actually mining above the average grade of the deposit as we speak right now are over at Mount Milligan. So what had happened was there was an area that was meant to be caught on Florida higher grid plumb that did not work out the way we expected. So that's been as I say the drilling that has been done.
That the sliding scale is the same which is basically for every $100 increase in gold price the royalty increases by 125 basis point.
And then do you have a question on goldfield.
As in the middle of being done, which will all be part of the PFS.
After that.
Well I'll go ahead and talking about the Mount Milligan piece one.
We're pretty confident we have a very good handle on what's going to happen for the next few years I don't want to.
One thing that's pretty important as we're actually mining above the average grade of the deposit as we speak right now are over at Mount Milligan. So what had happened was there was an area that was meant to be quote unquote, a higher grade plum that did not work out the way we expected. So that's been as I say the drilling that has been done in it.
Give you something that's six weeks early I'll wait till the PFS comes out to give you the real numbers and everything else, but as Paul had commented you can expect a revised guidance number is probably pretty appropriate for the next couple of years.
Okay.
And then on Oxi Raj yes.
In the middle of being done, which will all be part of the PFS.
Yes, they have updated the royalty table and just given where gold prices have gone versus what was there before the old royalty table stopped at 2100 2100 gold price that was the Max royalty, which was 18, 75% in Turkey, and I think we've got a 40% reduction in that because we process our material in country.
We're pretty confident we have a very good handle on what's going to happen for the next few years I don't want to.
Give you something that's six weeks early I'll wait till the PFS comes out to give you the real numbers and everything else, but it does Paul had commented you can expect a revised guidance number is probably pretty appropriate for the next couple of years.
What they've done is expand that table all the way up to 5100.
Okay.
To take into account where gold may go.
And then on Oct suite Raj, yes, they've updated their royalty table and just given where gold prices have gone versus what was there before the old royalty table stopped at 2100 2100 gold price that was the Max royalty, which was $18 seven 5% in Turkey, and I think you know we get a 40 <unk>.
Because of these larger numbers, it's now moving up every $300 adds 125 basis points prior to a reduction and so yes, we're in a different world now that the gold price. We are in today, it's about a 22, 5% royalty and we get the 40% reduction. So the scale has increased in terms of.
A cent reduction that because we process our material in country, what they've done is expand that table all the way up to 5100.
How far up it can go but it doesn't move with every hundred dollar increments Golden anymore.
Just to take into account where gold may go.
Okay. That's great Ryan. Thank you and Paul This is a question more for you I'm trying to understand the strategic rationale.
Because of these larger numbers, it's now moving up every $300 adds 125 basis points prior to a reduction and so yeah. We're in a different world now that the gold price. We're in today, it's about a 22, 5% royalty and we get to 40% reduction. So the scale is increased in terms of.
Behind going ahead with goldfield I understand the 30% after tax IRR NPV the hardware apprised improvement in recovery.
But if I look at it I can look at your capital allocation. How does this how does this stack up against.
How far up it can go but it doesn't move with every $100 increments Gordon anymore.
Dividends and share buybacks over the next two to three years, because the way I look at it.
Okay. That's great Ryan. Thank you and Paul This is a question more for you I'm trying to understand the strategic rationale behind going ahead with goldfield I understand the 30% after tax IRR and P. B the harm both horizon improvement in recovery.
The free cash flow that youre going to generate over the next three years since three months ago going back into.
Into building goldfield for.
For a project that.
Not a great scale.
At least at this point.
And then there's a number of other.
But like if I look at it I can look at your capital allocation. How does this how does this stack up against.
Projects Youre looking at the same time, so is that a risk you might be stretched from a.
Dividends and share buybacks over the next two to three years, because the way I look at it.
Bench strength point of view.
So I'm going to comment on that.
The free cash flow that you're going to generate over the next three years since three months ago going back into.
Yes, I think there's a talent and a financial question and there certainly from a bench strength point of view we've.
Into building goldfield for.
<unk> been building the internal capacity to to operate and to build projects we've significantly.
For a project that.
It's not a great scale.
At least at this point.
Expanded our projects team.
And then there's a number of other.
A number of the team has significant experience with Nevada heap Leach projects. So from a talent point of view, we feel confident in our ability to execute on goldfield, but I think the bigger question here is on returns and liquidity.
Projects Youre looking at at the same time, so is there a risk you might be stretched from.
Bench strength point of view.
I'm going to comment on that.
Is it as you pointed out was the high IRR on both field and Thats, what the consensus would price it at the higher oil prices are much more significant return, but I stress here.
Yeah, I think there's a talent and a financial question and there certainly from a bench strength point of view, we've we've been building the internal capacity to to operate and to build projects we've significantly.
Our project development pipeline.
Milligan Thompson Creek, and Goldfield, we can fund that with existing liquidity, while continuing our buyback program. This is a really important point I want to stress. We believe our shares remain a very compelling value proposition for our cash we will continue to buyback and we believe.
Expanded our projects team.
A number of the team has significant experience with Nevada heap Leach projects. So from a talent point of view, we feel confident.
And our ability to execute on goldfields, but I think your bigger question here is on returns and liquidity.
Is it as you pointed out was the high IRR on goldfield and that's what the consensus would price it at higher oil prices and much more significant return, but I stress here.
It is appropriate to add gold exposure into the portfolio.
Through goldfield.
As another as another way to allocate our capital. So we believe that the returns are strong and the buyback and we also want to be strategically increasing our gold exposure.
Our project development pipeline.
S Milligan Thompson Creek, and Goldfield, we can fund that with existing liquidity, while continuing our buyback program. This is a really important point I want to stress. We believe our shares remain a very compelling value proposition for our cash we will continue to buyback and we believe.
Okay. Thanks, Paul that's it from me.
Thank you.
And once again, if you do have a question. Please press Star then one on your telephone keypad.
It is appropriate to add gold exposure into the portfolio.
Through goldfield.
As a as another as another way to allocate our capital. So we believe that the returns are strong and the buyback and we also want to be strategically increasing our gold exposure.
And the next question comes from Luca <unk> with CIBC World markets. Please proceed.
Yeah.
Hi, Paul and team Thanks for taking my questions.
Most of my questions have been answered at this point overall I think it's a great decision you guys are going out with Goldfield bridge the production gap after Oct suite.
Okay. Thanks, Paul that's it from me.
Thank you.
And once again, if you do have a question. Please press Star then one on your telephone keypad.
Just curious how does this change your thinking around M&A.
So we we have the makings of what we think is an attractive go forward production profile. We are still working on some of the components, meaning Milligan mine life extension, whereas <unk> looked like but by the end of this year that picture will come into tighter focus. So we believe we have a strong.
And the next question comes from Luca <unk> with CIBC World markets. Please proceed.
Hey, Paul and team. Thanks for taking my questions. Most of my questions have been answered at this point overall I think it's a great decision you guys are going out with Goldfield bridge the production gap after Oct suite.
Organic potential.
<unk> suite of assets that will.
Curious how does this change your thinking around M&A.
Have multi decades of potential and that's what we're that's what we're aiming for R&R oriented projects. So principally speaking, we don't really need to do substantive M&A and certainly with our shares trading where they are we have zero intention of doing share based M&A.
So we we have the makings of what we think is an attractive go forward production profile, we're still working on some of the components, meaning Milligan mine life extension, whereas <unk> looked like but by the end of this year that picture will come into tighter focus. So we believe we have a strong.
So to the extent that we would consider M&A it would be modest it'll be bolt on or and cash base something that as a complement to that which we have internally as exampled by some of the equity investments we've made.
<unk>.
Organic potential.
Suite of assets that will.
We have multi decades of a potential and that's what we're vessel we're aiming for R&R oriented projects. So principally speaking, we don't really need to do substantive M&A and certainly with our shares trading where they are we have zero intention of doing share based M&A.
<unk>.
Other for example thesis being.
Proximal assets you are <unk>. So we look at things that might be geographically synergistic synergistic in the sequencing of capital spend and project development.
But largely speaking any M&A, we consider Ed and I'll repeat this wouldn't endanger our ability to fund our projects organically, we don't intend to go back to the market for cash.
So to the extent that we would consider M&A it would be modest it'll be bolt on or and cash base something that as a complement to that which we have internally as exampled by some of the equity investments we've made or.
And it would be cash based modest in scale and something that fits in strategically with our production profile. So we're not going to be doing big share based M&A.
For example thesis being a a.
Approximal assets you came out so we look at things that might be geographically synergistic synergistic in the sequencing of capital spend and project development.
Perfect. Thanks for the clarity on that.
That's all for me guys.
Thanks Luke.
But largely speaking any M&A, we consider it and I'll repeat this wouldn't endanger our ability to fund our projects organically, we don't intend to go back to the market for cash.
And as a reminder, if you do have a question. Please press Star then one.
And it would be cash based modest in scale and something that fits in strategically with our production profile. So we're not going to be doing big share based M&A.
Perfect. Thanks for the clarity on that.
And the next question is a follow up from a loss.
That's all for me guys.
One winter with Banc of America Securities. Please proceed.
Thanks Luke.
Got it thanks, again, operator, Paul and team. Thank you for taking a follow up for me I just I wanted to ask again about Mount Milligan, just as Youre considering the expanded.
And as a reminder, if you do you have a question. Please press Star then one.
Resource do you with the new resorts that youre, considering for those TFS coming up in September.
Do you get to a point, where there is parts of the resorts that are excluded from the from the Royal gold stream or if not in this study is there a path to kind of getting outside of that.
And the next question is a follow up from the last.
One winter with Banc of America Securities. Please proceed.
Thanks, again, Paul and team. Thank you for taking a follow up for me I just I wanted to ask again about Mount Milligan, just as Youre considering the expanded.
So that area of influence.
No the Royal Gold there area I mean, there is an area that is not subject to them, but its so far away that it's not we're not we're very unlikely to be mining in those areas, but I will remind you that we have the amended stream agreement with Royal Gold where in two steps the terms improved our broad.
Resource use with the new resource that you are considering for the PFS.
TFS coming up in September.
Do you get to a point, where there is parts of the resorts that are excluded from the from the Royal Gold stream.
Vision for Mount Milligan as we as you know we have the 10 11 year reserve right now it's 2036, we intend to add give or take a decade of.
Or if not in this study is there a path to kind of getting outside of that.
So that area of influence.
No the Royal Gold there area I mean, there is an area that is not subject to them, but its so far away that it's not we're not we're very unlikely to be mining in those areas, but I will remind you that.
Production here, where this PFS, while continuing significant exploration to the southwest and the west we continue to incur.
Counter encouraging results continuity of mineralization, both at depth of near surface.
We have the amended stream agreement with Royal Gold, where in two steps the terms improved our broad vision for Mount Milligan as we as you know we have the 10 11 year reserve right now 236, we intend to add give or take a decade of.
So our perspective or at least our R. R.
Our objective is to continue to add inventory beyond the life of the PFS.
For a potential third decades now work remains to be done there, but the mineralization show strong continuity and we're very optimistic about what we might find beyond the scope of the PFS.
Production here with this PFS, while continuing significant exploration to the southwest and the West we continue to incur.
But the simple answer to your question is.
Encouraging results continuity of mineralization, both at depth at near surface.
Everything I've, just mentioned will be subject to the Royal gold stream.
So our perspective or at least our R. R.
Okay. Thank you very much Paul and you guys can grow the rest of your summer.
Our objective is to continue to add inventory beyond the life of the PFS.
Talk soon thanks Lawson.
For a potential third decades now work remains to be done there, but the mineralization show strong continuity and we're very optimistic about what we might find beyond the scope of the PFS.
And at this time. This concludes the question and answer session and today's conference call.
You may now disconnect. Your lines. Thank you for attending and participating in today's call and have a pleasant day.
But the simple answer to your question is.
Everything I've, just mentioned will be subject to the Royal gold stream.
Okay. Yeah. Thank you very much Paul and guys enjoy the rest of your summer.
Talk soon thanks Lawson.
And at this time. This concludes the question and answer session and today's conference call.
You may now disconnect. Your lines. Thank you for attending and participating in today's call and have a pleasant day.
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