Q2 2025 B2gold Corp Earnings Call
Speaker #3: Thank ou for standing by. This is the operator. We will start today's conference for B2GOLD in a few minutes. Please continue to hold.
Speaker #4: Thank you for standing by. This is today's conference operator. Welcome to the B2GOLD Corporation's second quarter 2025 financial results conference call. As a reminder, all participants today are in a listen-only mode, and the conference is being recorded.
Speaker #4: After today's presentation, there will be an opportunity for analysts to ask questions. To join the question queue, you may press star, then one on your touchtone phone.
Speaker #4: Should you need assistance during today's conference, you may call and signal for a conference operator by pressing * then 0. I would now like to turn the conference over to Mr. Clive Johnson, President and CEO of B2Gold.
Speaker #4: Please proceed.
Speaker #5: Thanks, operator. Welcome to the call, everyone. We feel we have a strong core. The second quarter was a strong operational and financial result. Across all operations, we are very pleased with our second quarter results for expanding North Dakota mines to all communities that have expectations in the second quarter on the production side, resulting in lower than expected cash operating costs per ounce at all three operations.
Speaker #5: The operations continue to run well over the expected levels to meet our annual guidance. Additionally, on June 30, 2025, we celebrated the inaugural Gold Corps at our newly constructed Goose Mine.
Speaker #5: This marks a transformational moment for B2Gold and is a true milestone for our staff and partners who have worked tirelessly to reach this achievement.
Speaker #5: At Goose, the focus now turns to continuing steady-state operations and increasing throughput. The full design capacity to ramp up to commercial production is expected to be achieved in September 2025, which is quite a rapid ramp-up.
Speaker #5: Three months and that's typical of our track record and history. Admirally, we have received some very positive news in our view, and that is the state of mirally is commanding approval to commence underground operations.
Speaker #5: This includes stone more production, which has commenced. The approval follows productive week of meetings from senior management and several key individuals at Admirally, including the Prime Minister, the Minister of Finance, the Minister of Mines, and advisers to the Admirally government.
Speaker #5: Finally, this is really an point because for those that are concerned about the future of low-mining Admirally, this clearly underlies the fact that the government of Admirally has been cooperating with B2GOLD once B2GOLD to be in the country and operate at the coal mine and the regional expansion.
Speaker #5: So the next step is working with the state of Admirally to realize the expectation license for coal and regional, and we're hoping to see that in the short term.
Speaker #5: Expecting approval in the third quarter of 2025. During the second quarter of 2025, we also announced positive results from the 2025 gravel lottery feasibility study.
Speaker #5: Which demonstrated that the gravel tery plot has meaningful production profile and positive project economics. We're worried about determining, but that involves coming up with a reduced footprint in the position of gravel lottery.
Speaker #5: And we already have a permit that's a matter of coming and modifying the permit application. This strong coal ice environment, B2GOLD as well, set up to take advantage and undergo production of over 1 million ounces this year.
Speaker #5: And with the ity of growth capital spending at Goose now complete, the company is set up well to add significant shareholder value over the coming years.
Speaker #5: Including production from North Dakota Regional. We are looking ward to another strong quarter operation and financially and, as I said, looking to meet our guidance for 2025.
Speaker #5: So with that, I think I'll turn it over to Michael Cinnamond, who's our CFO, and Michael will give you a quick review of some of the financial highlights and then we'll have a ittle live on the C2B cooperation to talk to us.
Speaker #5: Give us a ick update on the Goose and then we'll open it up for questions. So Michael, over to you.
Speaker #6: Thanks, Clive. I've spent mean financially, it was a strong quarter. Our basic earnings per share were 12 cents per share, and if adjusting from one-time items, which were actually offsetting, we we actually realized 12 cents per share of adjusted earnings.
Speaker #6: And you know, it's fair to say that this definitely benefited from the strong average gold sales price. Just to touch on the sales point too, we were slightly behind budgeted sales ounces in the quarter, but that was purely on a timing basis.
Speaker #6: The timing shipments from several of the sites that, those ounces were shipped out just after the period end and sold in early July. operating cash flow side, operating cash flow before working capital adjustments was 301 million in the second quarter.
Speaker #6: Another strong result, and again, it highlights the cash generation potential of our operating assets in this gold price environment. Balance sheet-wise, we continue to remain in a strong financial position.
Speaker #6: We've got cash and cash equivalents of $308 million at the end of the second quarter. Additionally, at the end of the second quarter, we had the full $800 million available on our revolving credit facility, which was undrawn, plus a $200 million accordion feature.
Speaker #6: I will say that subsequent to June, the end of June, we did draw down $200 million on the revolver. That was just to help us manage working capital requirements as we start to deliver into our gold prepayment commitments over the 12-month period from July 25 to June 26.
Speaker #6: In fact, we have already delivered the first tranche of those. So we're starting to unwind that position. With continued strong performance across the portfolio, and the ramp-up of Goose, which is now well underway, we were pleased restate and reiterate our production guidance for 2025 unchanged with full-year production expected to be between 970 and 1,075,000 ounces.
Speaker #6: And we expect Goose to still contribute between 120,000 to 150,000 of those ounces. Again, on the positive side with lower than expected cash costs per ounce at the the the existing pre-operating mine sites for coal, as that in North Dakota, we're pleased to announce that the company has reduced its consolidated cash cost guidance range those three operations to between 740 and 800 dollars per ounce.
Speaker #6: So our produced, sorry. This is lower than the previous guidance range of between 835 and 895. And then with the inclusion of post-commercial production estimates for the Goose mine, I remind you that we expect Goose to come into commercial production in September.
Speaker #6: Consolidated cash operating guidance is now forecast to be between $795 and $855 per ounce. Overall, on a liquidity basis, we continue to maintain a good amount of financial flexibility that allows us to complete our remaining ramp-up and construction activities at Goose.
Speaker #6: to fully repay our deliver into the gold prepays entered into in early '24, and to complete the other sustaining and growth initiatives across the portfolio, and we'll continue to fund healthy expiration programs as well, which we expect will extend mine lives.
Speaker #6: And with that, I'll turn it to Bill for an operation and project update.
Speaker #7: All right. Thanks, Mike. I just got back from, the Goose, so maybe a little feral during this. So bear with me. as Mike said, on the three operations, we expect to meet or exceed all of our targets.
Speaker #7: For the year, but probably what everyone wants to talk about is Goose. So just going back to going back to what has been completed there, Goose all the major construction activities, which required or were nearly completed at the end of the quarter, and the mine ramp-up is now well underway.
Speaker #7: The focus for the third quarter now turns actually to optimizing the current operations and increasing the throughput to full capacity. As Mike indicated, a ramp-up to commercial production is expected in September 2025.
Speaker #7: Things which were completed in the first half of 2025 at the Goose include the completion of the mining of the EcoPit. Remember, that was our tailings facility and commissioning.
Speaker #7: So we are we are now placing tails in Echo. full ramp-up of mining of the of the open pit in the second quarter. We also had continued development of the well underground, we completed the fresh air raise one already, and in the process of developing fresh air raise number two, which will be needed in the second half of 2025.
Speaker #7: We commenced dewatering of the llama pit all these things are required to the mill correctly. This provides fresh water and reclaim water to the mill.
Speaker #7: We developed the well open pit and underground in that remains a priority to ensure that the adequate mill feed volumes are maintained. If you look around the other operations, Molly continued a strong performance for 2025.
Speaker #7: Exceeding gold production expectations again in the second quarter. As Mike said, cash costs per ounce were also lower than expected. Underground, after meeting with the government last quarter or last month, the underground production has commenced.
Speaker #7: as announced on July 30th, the underground development is well advanced with over 9,300 meters of development work plus the installation of all required underground mining infrastructure, having all been performed prior to commencing production.
Speaker #7: If you remember, we were actually given a permit to do all the development. So even even though we were 30 days late on the starting of, mining of ore, we in fact continued to develop right up until July 30th.
Speaker #7: So the the question I've ard being asked several times is whether or not we think we're going to get the ounces required from underground.
Speaker #7: We absolutely see a path to make sure that all the required ounces from underground will be delivered in 2025. Regarding the regional project, we continue with our meetings with them, and we continue to work with the state of Mali to finalize the approval of the regional exploitation permit in the third quarter of 2025.
Speaker #7: Just kind of late breaking, we've actually had our first technical session with them this morning. We absolutely see a path towards getting this permit.
Speaker #7: B2GOLD is ready to commence pre-stripping activities with the Pecola Regional Infrastructure. Remember, once in, this was one of those facilities where they allowed us to do all of the, infrastructure development.
Speaker #7: So the haul roads in place, and all the infrastructure is already in place. We're just we're just waiting on a permit to start pre-stripping.
Speaker #7: subsequent to June 30th, 2025, the Pecola Mills celebrated a significant milestone. With 4 million ounces of gold produced since the inception of the project.
Speaker #7: At my body, the operations continue to perform well. With a world-class safety track record, we have announced more than 2,400 days without a lost-time incident.
Speaker #7: mine production significantly outperformed expectation. And we anticipate consistent production in the second half will result in strong 2025 performance and robust margins. Old Dakota is also going very well.
Speaker #7: The open pit and ground, went well during the second quarter with production also exceeding expectations. During the second quarter, remember, we were working on this antelope deposit.
Speaker #7: So we continue to focus developing that. With the target released in the third quarter of 2025. And then the other development project is Gramma Lote.
Speaker #7: We released deposit of feasibility study. Work has commenced on the modification of the work plan and environmental impact study. And we expect to be complete in late 2025 or 2026.
Speaker #7: We anticipate that the permit modification timeframe should be approximately 12 to 18 months. With that, Clive, I'll turn it back over to you.
Speaker #8: Okay. Thanks, Will. Operator, we're ready to turn it over to estions.
Speaker #1: Thank you. We will now begin the analyst question and answer session. As a reminder, to join the question queue, you may press star then one on your telephone keypad.
Speaker #1: You will hear a tone acknowledging your request. If you are using a speakerphone, please pick up your handset before pressing the keys. If at any time your question has been addressed and you would like to withdraw it, please press star then two.
Speaker #1: We will now pause momentarily to assemble our roster. And today's first question comes from Fahad Tariq with Jeffries. Please proceed.
Speaker #9: Hi. Thanks for taking my question. In the press release, it mentions lower-than-anticipated fuel costs and the number of places, not just at Pecola, but also Matbati.
Speaker #9: Can you just maybe talk about what the expectation was at the beginning of the year when you set guidance? And I'm curious why it's trending lower than expected.
Speaker #9: Thanks.
Speaker #10: Mike, do ou want to take that? You want me ?
Speaker #9: Well, I can start. I'll start. So well, you know, we when we budget, we typically have a look at the forward curves on the on the fuel side.
Speaker #9: usually around September, October. So we use those as the base. And and then what we just what we've en and and what's been realized with the sites is that HFO is being about 9% lower than those prices over the first six months.
Speaker #9: Of 2025 and diesel, it's actually been more. It's been something more like 13% below. So you know, we we made our best estimate back when when we set the budget, probably set some somewhere around the October price.
Speaker #9: It was because we do our budgeting sort of finalize it up in early November. And all I can tell you is as we've looked forward, we have taken into account those lower fuel costs when we're looking at the re-guidance that we put out in the cash operating side.
Speaker #9: Okay. That's helpful. And then on Goose, there was a comment about the CapEx guidance for the second half of this year, 176 million. I'm just ying to reconcile just the overall CapEx at Goose relative to, I guess, at the what the project guidance project CapEx guidance was before and think it was reiterated in the May release.
Speaker #9: Can you just maybe help us walk through that? Like, is I guess the other way of asking is, is that second half CapEx guidance of 176 million, is that consistent with what ou were expecting?
Speaker #9: Thanks.
Speaker #10: Yeah. Again, I can I can start with that and Bill can jump in. I an, overall, on the project, we did see some acceleration of costs as we as we worked our way up to the first Gold Core.
Speaker #10: At the end of half one, so we probably saw somewhere around about 5% overall. cost increases against the the budget. then what we also experienced as we as we ran up to that is we did we did accelerate some CapEx.
Speaker #10: CapEx that would have been in in half two. And the tech report and actually a little from future years and that that totaled about somewhere in the region of 60 million.
Speaker #10: and then we also had what we've described in the in the MDNA and disclosures, we had some mill and process plan upgrades somewhere in the region of 40 million.
Speaker #10: So approximately 100 million between those two where we pulled stuff forward. from second half, or and and then about 40 that we've added in to the second half, I ink that's for further mill and process plan upgrades and I think Bill can talk to those a little bit.
Speaker #7: Yeah. Really relating to upgrades, I I would say once again, it was really operability or availability of the mill. One of the things that, as as we got in and building, we realized, a lot of the a lot of the lines didn't have the necessary valving and piping.
Speaker #7: The redundancy built in and the ability to do maintenance on the mill while it continues to operate. So we added I think I saw from the finance group approximately an additional $26 million on the mill side related to what I would call upgrades or improvements in availability.
Speaker #7: And you know, like I say, that really relates to a lot of that small stuff, additional pumping, piping, valves, and installation of all that stuff.
Speaker #9: Okay. Thank ou.
Speaker #1: Our next question comes from Wayne Lam with TD Securities. Please proceed.
Speaker #11: Yeah. Thanks, guys. congrats on a good quarter and and, getting the Pecola underground permit. seems like you some good momentum in Molly now. Just just wondering what the mechanics would be in terms of getting the Pecola regional permit and what the final points of negotiation might be and and any potential hurdles to getting that permit by the end of Q3.
Speaker #7: Yeah. So we've as I said, we went down and met with we met with the Minister of Mines and and during discussion, it it almost seemed like for them, the regional permit had kind of dropped off because they were dealing with some of the other government the other mining houses' issues there.
Speaker #7: Yeah, with shall not be named on this call. but once we once we brought it forward, the quite frankly, they were a little embarrassed that they hadn't done it yet.
Speaker #7: And so they they immediately agreed to try and get this thing pushed out by the end of Q3. That was their schedule, not ours.
Speaker #7: and they immediately agreed to set up a commission and start working on that. So that happened this morning. We haven't heard any outstanding issues.
Speaker #7: other than to hear that that, that, that it wasn't a a yell fester. It wasn't a it wasn't an argument. It was it was very constructive discussion.
Speaker #7: which we think leads to the permit.
Speaker #9: Really great. Thanks. I was just wondering, in terms of the ramp-up of Goose, relative to the mine plan, you guys had outlined in the plan 125,000 ounces this year, which would be at the lower end of the guidance.
Speaker #9: seems like ou've been you've been making some good progress there. just on the stripping of the echo pit and the development. But just wondering where you guys kind of see the opportunities to outperform what what's been outlined in the plan.
Speaker #9: Is that on the plant performance or is there upside on the grade profile as well?
Speaker #7: I would say both at this point. Once in, you're you're asking questions right at the front of commissioning. So certainly, certainly we we have an aggressive ramp-up plan, but historically, we've been able beat that.
Speaker #7: So there is some potential there. there's also some potential as we start to move out of kind of the eco low-grade material, which you know remember the eco pit was never designed to be a kind of a a high-grade feeder into the mill.
Speaker #7: Into the well pit, if if we if we can get our head around how can we mine that quicker, certainly there is some potential there.
Speaker #7: And so I I would say not only on the mill ramp-up side, which admittedly, a three-month ramp-up is is aggressive versus many other of our peers, but not really aggressive versus what we've historically done.
Speaker #7: And then on the well side, if we if we can get additional grade from from the open pit.
Speaker #9: Okay. Great. Thanks. And then maybe just last one. maybe just a follow-up on the CapEx side. just given the the increase in CapEx relative to the 270 in the in the mine plan, just wondering how much of that would have been brought forward from 2026?
Speaker #9: Just try to figure out if maybe we should be anticipating a lower CapEx number relative to the $140 million outlined for next year in the mine plan.
Speaker #7: Mike, would you go head?
Speaker #10: Okay. So you're talking about what may have been pulled forward from '26?
Speaker #9: Yeah.
Speaker #10: And in the second half?
Speaker #9: Yeah.
Speaker #10: That's what you're king? Yeah. Well, I think there's there's, you know, there's there's there's some site infrastructure upgrades where Bill's doing, I think, what he wants to do to to pull to to enhance both the MLA and the site that they're about 15 million there's as Bill mentioned, there's 26 roughly related to the mill.
Speaker #10: So there's 40 let's say that that are are things we didn't have to do this year, but we want to do to enhance it.
Speaker #10: And then there's some prepayments on some generator additions that we have. There's other 24. So it would be more than 60, that would be pulled forward from future years.
Speaker #9: Okay. Got it. Okay. Cool. thanks for taking my estions.
Speaker #7: Welcome.
Speaker #1: And the next question is from Ovis Habib with Scotiabank. Please proceed.
Speaker #12: Thanks, operator. Good morning, Clive and B2 team. congrats on a good quarter. just a couple of questions from me. starting off with the Pecola maybe.
Speaker #12: In terms of the mine plan sequencing for Pecola, going into 2026, does that change now that you have the Pecola underground permit in hand?
Speaker #7: So, remember, we always talked about having it after Q2. So our life of mine showed it really coming online in July. So the underground permit doesn't ally change it other than we have done a little bit more development than what was in the life of mine.
Speaker #7: So we may be able to steal some additional ounces, but I really think that's more of a 2025 issue, not a 2026 issue. And as far as 2026, we're still working on the budget.
Speaker #7: And and where we're going with that. So I don't really want to comment on where the ounces will come from in 2026 just yet.
Speaker #9: Got it. And then just Bill, in terms of what would be the current grade of the underground stockpile that you will have on site?
Speaker #9: And what would be the grade that you're expecting from the stops that you're currently mining?
Speaker #7: You're talking at Pecola?
Speaker #9: Pecola underground, yes.
Speaker #7: Well, I don't, I'd have to look that one up for sure. Let me just, I did actually report to the board what it is.
Speaker #7: So, let me come back to you on that during this call.
Speaker #9: Sounds good. Sounds good. No worries. And just kind moving on from there, you know, in terms of you know your targeting about 25,000 ounces from the underground in 2025, I guess this is kind of my follow-up question from my previous one, but is there a target that ou have in mind for 2026 for the Pecola underground?
Speaker #9: That you kind of, you know, is there a range that you can talk about, right?
Speaker #7: Yeah. So remember, we always talk about the fact that we we thought we could produce about 80 or 100,000, between 80 and 100,000 ounces out of underground.
Speaker #7: But remember, that replaces lower-grade ounces. So the reality is, you're going to get kind of 50% of that. So, you know, we're kind of targeting that 50,000 ounces a year.
Speaker #7: And just coming back to your previous question, I see the total the total underground tons mined, this is pre, this is kind of development.
Speaker #7: which is on the stockpile right now is about just about 35,000 ounces that just like 2.7 grams per ton. And then I once again, I'm I'm speaking out of turn, but we're we're at ast double that.
Speaker #7: It in the stops will be mining.
Speaker #9: Got it. Thanks for that, or. Bill, and and didn't just moving on to the regional permit side, assuming ou get the permit by the end of Q3, is that what you're targeting?
Speaker #9: Are you comfortable with the 160,000 to 180,000 ounces of production in 2026? That kind of aligns with the tech report that was presented earlier this year.
Speaker #7: Yeah. I mean, there's no there's changes to what the actual mining looks like from the tech report. Clearly, ce again, in in the in the budgeting process on where where the ounces are going to come from, that may shift around some.
Speaker #7: But the ounces haven't changed from the regional from from what was in the tech report.
Speaker #9: Sounds good. Okay, thanks for that. And then just quickly moving to Goose, I am really looking forward to the commissioning of the Goose in September.
Speaker #9: Bill, how's underground development progressing there? And and do you have kind of you ow now the right people and equipment in place in terms of what you were targeting for for the underground?
Speaker #9: This is at Goose.
Speaker #7: Yeah. First, yeah. So first of all, remember like when I first joined these calls, Clive declaring, I ink to you that you only get three questions.
Speaker #7: So let's start with that. but see, this is question number four. 'm going to take . things are going well. You know, we we kind of we've kind of hit our stride.
Speaker #7: We have, as you know, turned over a bunch of people in the underground. There's a new mining manager who came in this year, and a new technical services manager.
Speaker #7: All those people are in place. We also brought in additional equipment on the HERC program this year for the underground. So the answer is yes.
Speaker #7: We now have the right people. And yes, we now have the right equipment that really isn't an excuse for the site not to be able to deliver.
Speaker #9: Okay. Good stuff, Bill. Thanks so much for all this, Color. And thanks for taking my questions. And congrats on a good quarter.
Speaker #7: Excellent.
Speaker #1: And as a reminder, if you do have a estion, please press star then one. And our next question is from Anita Sony with CIBC World Markets.
Speaker #1: Please proceed.
Speaker #13: Good morning, Clive, Mike, and Bill. I'm just going to ask too so that that'll make up for Ovis's extra question there. first question was your commercial production.
Speaker #13: What’s your definition of commercial production? I just want to clarify because everyone has a different definition.
Speaker #7: Yeah, I think it's the same thing we used at Pecola and at Old Dakota. So that's like an average of 65% nameplate throughput over 30 days.
Speaker #13: Okay. And then what's an for from your perspective, what's the next milestone in in terms of like you know the ramp? Like I ess year-end, what do you what are ou targeting for like at what's this throughput ramp-up ou're hoping to get to by year-end and then for how long?
Speaker #7: By year-end, we want to be at that nameplate 4,000 for re.
Speaker #13: Nameplate 100% for the whole quarter?
Speaker #7: Well, I I think that I think it's like 92 or 93% availability. It's something like that. I
Speaker #13: Okay.
Speaker #7: Forget what it'll be in the report.
Speaker #13: Okay. and then last question, I guess that I did ask three. just in terms of of the the optimization plans that you're looking at, in terms of the the the doing a winter ice road less than, I think you said less than annually, what like what how what would that entail?
Speaker #13: I I would assume that it would kind of a like a is there is there a way to do an ice road that's you know not like not at the ice road timing?
Speaker #13: Or like what was it every other year or what like what you looking at? Like you know every 15 months or so? ike I'm just trying to understand that phrase.
Speaker #7: Yeah. Well, it it can't be every 15 months. The ice road must almost always between February and kind of that May 1, let's say May 6th.
Speaker #7: so that is the ice road date. The estion you're asking is actually one that that's almost like a engineering engineering interest. So the question really revolves around fuel as the first problem.
Speaker #7: If, in fact, you need 80 million liters of fuel—which is what we're sending down the road every year right now—it would have to be every year.
Speaker #7: But now let's say because we just don't have the tankage to do anything less than that. But now let's say that we actually are successful by by putting these medium-speed generators in, which saves about 10% of that.
Speaker #7: And then ou say, okay, now we're going put our wind farm in, which is 50 megawatts. Could you get to a point where the number is less than half?
Speaker #7: Then you suddenly say, okay, now can I increase my reagents to make up that difference in the off years and do it? Those studies that obviously very preliminary, so much so I'm not convinced that 80 million liters is actually what 're going to use this year for example.
Speaker #7: Right now, we're sitting here in August. And we still have 70 million liters of fuel sitting on site. So how does how does that really add up once you get into full once you get into full production?
Speaker #7: And we just don't know yet.
Speaker #13: Okay. All right. That's it for my questions. And congrats on some strong ops this quarter.
Speaker #7: Excellent.
Speaker #1: The next question is from Lawson Winder with Bank of America Securities. Please proceed.
Speaker #14: Thank you, operator. Good morning, gentlemen. Thank you for today's update. Well done on the permitting success in Molly. What I wanted to ask is more around jurisdiction and as it pertains to Columbia in particular and Canada.
Speaker #14: So, acknowledging B2Gold's historical success at being jurisdictionally agnostic and focusing on asset quality instead, I think feedback from the market would suggest that the market likes the pivot to Canada.
Speaker #14: How do you view assets in Canada? And will B2Gold's appetite be to add more assets in Canada? Conversely, how does Colombia then stack up in terms of jurisdictional risks?
Speaker #14: And is that at all a headwind today for a potential sanctioning decision on Gramma Lote? Thanks.
Speaker #7: Yeah. I think we’re definitely interested in doing more and more things in Canada. But once again, you know, we’re driven by our push.
Speaker #7: from a geopolitical point of view, we we want more diversification. So definitely we're looking for additional opportunities in Canada. Gramma Lotte, in Columbia, we we quite like what's been happening there.
Speaker #7: I mean, we do have a permit for a larger operation. So, we need to go back and modify that permit now. But we've had very positive support in Antiochia.
Speaker #7: Local population and government in Antiochia, and also some signals of support from the federal government as well. But I'm glad you raised the question because I want to segue that a little bit into talking about M&A.
Speaker #7: You know, we will not surprise the shareholders with a development project M&A. It's very disciplined. We build one line at a time. And we think Gramma Lote looks very interesting.
Speaker #7: As a project for us to do financially, we'll be in a strong position to do that. And we like what we've seen in the feasibility study, and I think it would be a very good project for us.
Speaker #7: We've got you know to get through the permitting process and then make a decision when we go forward. But I just want to underline again, no M&A for development projects.
Speaker #7: Potentially in the future, if we find an opportunity to increase our gold production through some kind of a deal, then we would have a look at that, of course.
Speaker #7: It just makes sense. But at the end of the day, we're not going to surprise the market with a major acquisition of a development project.
Speaker #14: Fantastic. And if I could just get one more in. On Goose, in your update earlier in the year, you you highlighted the potential for an expansion in the processing capacity.
Speaker #14: You know, today, now that you're approaching commercial production, what's the latest thinking on the timing of that expansion in processing capacity? And has there been any change in thinking on the magnitude?
Speaker #7: Is this a what have you done for me lately question?
Speaker #14: Sort of. Thanks, Bill.
Speaker #7: All right. So so so the answer is, as ou know, we've got several studies in the hopper. One would be you know, we got a flotation circuit, which you might be able to add.
Speaker #7: the other is, would you put would you put expand the the mill capacity? go to go up to ething like 6,000 tons a day.
Speaker #7: those are all due really first look by the end of this year. And and so I I think we're I I I can't remember if we're talking Q1 next year as we're talking about putting it out.
Speaker #7: The results, but at the end of the day, those are very, very early on in the study. You know where they go. But we think they're very real.
Speaker #7: And just so you know, we've talked about some of these optimizations. The mill will run at more than 4,000 tons; it's just a question of whether you can keep the availability up.
Speaker #7: So by doing by increasing some of these optimizations we've already put in, like I said, these valves piping and everything, you know, there there is the potential we get it squeak out some additional capacity as it currently stands.
Speaker #7: No promises. we're saying 4,000 tons a day.
Speaker #14: Fair enough. Thank you very much for taking my questions.
Speaker #1: And the next question comes from Francesco Costanzo with Scotiabank. Please proceed.
Speaker #15: Hi, guys. sorry, I I didn't mean to jump into question Q here. I think Ovis and Nita and the others have already asked all the pertinent estions.
Speaker #15: So apologies for that.
Speaker #1: And the next question comes from Don Demarca with National Bank Financial. Please proceed.
Speaker #14: Thank you, operator. And good morning. Clive and team. So so it sounds like things are moving moving along well in Maui now. I mean, you've we'll look to the regional permitting.
Speaker #14: But you know, what was the reason for the delays? I mean, was it the government focusing on Barrick and maybe under... or is this kind of just a norm in Maui?
Speaker #14: I mean, off-permit benefits from optimal mine performance from a tax point of view.
Speaker #7: Yeah. So maybe I'll take that as soon as we were just down there. There are a couple of things there. Remember, there was this whole shift in the government, and they readily admitted that they didn't really know who was doing what.
Speaker #7: So you had the Minister of Finance working on this kind of updated mining code, and the Minister of Mines didn't know where his mandate ended and where the Minister of Mines started.
Speaker #7: we highlighted that. We had a chance to meet the Prime Minister. and they they were visibly embarrassed and said that that that that's the non-starter for them and they will get it rectified.
Speaker #7: So certainly I I think some of the other mining issues in Maui play a factor. I think I think the the fact that that they were that there were some big disputes out there that that they had to pay attention to.
Speaker #7: took up some of their bandwidth, but also ultimately they also didn't really know what each other was doing. I I I will say that that all three ministers we met we met Minister of Mines, Minister of ance, and the Prime Minister, they all apologized profusely.
Speaker #7: They all said that they're committed to getting this done. Remember, this is they've got a big stake in this too. So that they want to go as quickly as they can.
Speaker #7: Of course, legally, to get us this permit and get us going.
Speaker #14: Okay. Great. Thanks for .
Speaker #15: Yeah. Go ahead.
Speaker #7: You may. Maybe just to add a
Speaker #15: Thank you.
Speaker #7: ittle bit. If I could add a little bit to that, some of the one of the questions you had asked about further negotiations with the to get the permit for for for the regional, there is no further negotiations.
Speaker #7: We're actively terms negotiated in the MOU last September. That's sort of clarified that we're in a negotiation mode. We're getting the permit done and working closely with the government to do it.
Speaker #7: As Bill touched on, revenue aside from the government of Maui, which obviously they they asked for further revenue. New year. This is the fastest way for them to get revenue from gold mining.
Speaker #7: Would be to get us that permit. Because they own 35% of the regional. So there's their they're on the same page as us. We need to get that permit and get going with the charging war as soon as possible.
Speaker #15: Okay, that helps. That certainly clarifies things, because that would have been our impression as well. So, that's encouraging for the future. But sticking with the Pecola then, in Maui, I saw productions up 35% quarter over quarter.
Speaker #15: Grades are elevated. So Bill, do you ect this to continue into H2? What was some of the rivers here Q2?
Speaker #7: Well, some some of the drivers really revolved around being finding additional lower kind of on the margins of what where the resource model was.
Speaker #7: And it was, quite frankly, it wasn't higher grade ounces, but it was ounces or it was tons that would have been considered waste that we ended up being able to process through the mill.
Speaker #7: We also had a very good run with the mill. The mill had a very good quarter, and those were the two main things. Obviously, I can't predict what's going to happen outside of the resource model in Q3 and Q4.
Speaker #7: But the mill is kind of firing on all cylinders. And, you know, one of the things that we've been very open about is that even if we don't get tons or get ounces from the regional stuff into the mill in 2025, we still feel very comfortable with our range that we put out there.
Speaker #7: And so that obviously would mean that we're going to get additional ounces from somewhere else. Yeah, there's a stripping.
Speaker #15: Yeah, yeah. Just Clive, it's actually a good point. Even if we get the permit in kind, let's say August or September, there is still a pre-stripping campaign that we have to do before we can start trucking tons down to the mill.
Speaker #15: Okay. Okay. And then, just for a final question, we're shifting over to Goose. I see that the ASIC for Goose is lower than what it was in the tech report by a bit.
Speaker #15: You know, so what are some of the efficiencies that would explain this favorable delta? And is there a read-through for lower costs at Goose in 2026 versus the technical report?
Speaker #15: Or is some of the CapEx that you've kind of pushed forward also providing read-through for a lower ASIC in 2026?
Speaker #7: Yeah. Maybe I'll count. I'll talk and then I'll let Mike correct me. So when we wrote the technical report, really the information we had was what was created by Sabina for the feasibility study and the actuals we had during construction.
Speaker #7: Right? And so in construction, there's all these inefficiencies. Where ou're flying stuff in, you've got wrong crew. you know, what we've seen as we've now been able to tighten up, and particularly around the mining side, is that we're ably a little bit worse than what Sabina had had promised the world.
Speaker #7: But a lot better than what we had seen as kind of a developer and so I do I do believe that that the cost that we're presenting on the mining side, in , and hopefully on the milling side, will carry through.
Speaker #7: And we're going to see those. I think I can't remember what we said they were ultimately going to be our all-sustaining costs.
Speaker #7: But they were coming down, and we do see those as real.
Speaker #15: Okay. Thanks for that, Bill. I'll only add on part of the part of the impact in in the 25 numbers is we're we're using post-commercial production, which is basically post-September.
Speaker #15: But as we are familiar with it. So you have a you have a production split there between Q3 and Q4. And but you also have some of this CapEx that we pulled forward and accelerated.
Speaker #15: You know, so it's already incurred. So that has some impact on the post-commercial production numbers. Okay. Great. Thank ou. Well, that's all for me.
Speaker #15: Good luck with the rest of the quarter.
Speaker #7: Thanks.
Speaker #1: And the next question is from Kerry McCreary, with Canacor Genudi. Please proceed.
Speaker #14: Hi. Good morning, guys. And congrats on the quarter. Maybe just a question for Mike on the accounting around Goose now that you're ramping up production.
Speaker #14: Are we going to see OpEx starting from now on at Goose? Or is that going to come after commercial production?
Speaker #15: No. Yeah, you're right, Don. It like the in the new world order has been for a few years, all results will go through. And P&L and and all production reported, it's just so you'll see everything from Q3, whatever production we have, whatever operating costs we have, whatever sales we have, you'll see them in our financial results.
Speaker #15: Okay. But we'll be presenting the tax costs and all in post-commercial production. And that's baked into OpEx guidance you've given us. Yeah.
Speaker #15: I presume. Yeah. Okay. And then maybe just back on Pecola Regional. Assuming the permit comes in the near future here, is that still an attractive area from an exploration focus, or do you see better opportunities elsewhere?
Speaker #15: Just given the economics of that area now.
Speaker #7: I'll get that team to work on that from the exploration upside point of view. Yeah. Well, one of the areas that we see outside is beneath the oxide resource that we've pretty much covered, and we have sufficient oxide ounces to keep us going for quite a while.
Speaker #7: So, I think the big push is to actually pursue higher-grade fresh or sulfide material beneath the pits or beneath the oxide zones.
Speaker #7: Within the Pecola regional, and that's really where a lot of the upside is. The other is looking at the underground; you know, obviously pursuing that. As we develop the underground, we'll be able to drill down plunge.
Speaker #7: So there's nothing to suggest that that is closed off. We'll certainly be pushing that forward. There's also a potential for picking up parallel shoots to the main zone at Pecola underground as well.
Speaker #7: So that's really where the potential is. On Dandoka, which is part of the Pecola regional, I think we've pretty much covered that. There's not a hell of a lot more there.
Speaker #7: but that's that's it. Really. If you speak to your oration budget. Yeah. We have a a 60 62 million dollar budget US for globally.
Speaker #7: Bulk of that is at Goose. just about half. and then obviously ongoing drilling in Maui. pursuing extensions of the antelope deposits in in Namibia.
Speaker #7: And also looking at potential for service material in Namibia to complement and to help the throughput as we look down the road at Old Dakota, at least more than just the stockpile to blend the high-grade ore material that we have there.
Speaker #7: So that's where where it's at. And then also pursuing new areas you know, using and leveraging off our experience in in in Masbati, in the Philippines, we're oking at opportunities in Eastern Mindanao at the moment.
Speaker #7: But that's all very early stage. And then I guess that's where we're.
Speaker #15: Okay, great. And maybe one last question for me just on Gramma Lote again. Did the feasibility study kind of meet with what you were expecting?
Speaker #15: And I guess what I'm saying is if we get through the permitting for the XT in 12 to 18 months, we're at a $3,000 gold environment.
Speaker #15: Is it, you know, how likely is this to move forward?
Speaker #7: Well, I think we like what we saw in the Q2; it didn't come as a surprise to us. You know, it's been a ton of work done.
Speaker #7: Over the years, by AGA and by ourselves, and by the combined joint venture over a long period of time, we know at 100% of e. But there's a lot of technical work, a lot of studies that happen before that. Everybody really, you can't... it's what it is.
Speaker #7: so I think it's worth the world to find. So we'd expected the feasibility study to be close to the to the to the VA and you know, I I think when you look project and the potential to produce you know $240,000 a year out of the gated Gramma Lote, there aren't many of those around.
Speaker #7: We own 100%. We don't buy it. We like the economics. And I don't know how you would, you know, if you don't build that, what are you going to do in terms of projects in today's gold environment that you own? We believe it's in a good jurisdiction.
Speaker #7: So you know, at the end of the day right now, I would say it looks very favorable for us. What's the part of the upside?
Speaker #7: the CapEx for this company.
Speaker #15: Okay. Great. Thanks. Thanks, sir. Thanks, guys.
Speaker #7: Thanks.
Speaker #1: Again, if you are an analyst and you do have a question, please press star, then one. And at this time, there are no further questioners in the queue.
Speaker #1: And this does conclude today's question-and-answer session. I would now like to turn the conference back over to Clive Johnson for any closing remarks.
Speaker #7: Thanks. I think we have good questions, and I think we covered a lot of ground there. You know, one final question I have for the analysts.
Speaker #7: If anybody can figure out the market, I'd like to know how we can come up with that. Not good core like that. And then see the stock down.
Speaker #7: That's a bit of a surprise for the market. I've always had surprises as far as guess. So thank you very much for participating in the call.