Q2 2025 Amaroq Ltd Earnings Call

August 14, 2025

Edward Westropp: For the normal course today, Eldur Olafsson, the Chief Executive, will take you through some highlights and then some operational detail. Alex, the CFO, will take you through some of the financial highlights, and then Eldar will finish off with a summary. We'll head to Q&A. If you have any questions, please use the Q&A tab on the screen there, and I will read those out, and we can deal with them point by point thereafter. Thanks again for joining. I'll hand it over to you, Eldar, to start proceedings.

Eldur Ólafsson: Thank you very much, Ed. It's a pleasure being with you here on this relatively good summer day here in Iceland. I hope you had some good holidays already finished. I want to take your attention to the first slide, which is Amaroq Minerals today. What we have been working on creating within Amaroq is effectively a integrated infrastructure and mine development company. We need to do that to make sure we can unlock the potential in Greenland. Our companies and business plans are a gold business, which we own 100%, called Nalunaq A/S. We then own Gardaq A/S, 51% of Gardaq A/S, which is a strategic mineral company.

Eldur Ólafsson: We own Suliaq, which we just formed, and we speak about later, which is a servicing entity, which acquires critical equipment and consumable to be able to conduct work in mining, and infrastructure in Greenland. Last but not least, we are about to form EMEC, which is a renewable energy company mainly focused on hydro. As you know, hydro has a great potential within all Greenland. By doing this, we can leverage the management of Amaroq in things like permitting, governmental relation, engineering, and various other aspects of things to give investors a exposure on Greenland in the main industries that are important. We are solely focused on Greenland, and we'll be focusing on developing these opportunity until the end of this year and obviously into next year as well. Go to the next slide, please.

Eldur Ólafsson: On main things in the Q2 highlight, our continuation of the trial mining and ongoing construction of the plant has been progressing well. We had our first gold export and made a revenue of CAD 3.4 million by the end of Q2. As previously told, we were ramping up more slower in the beginning of the year. What we are seeing already right now is that the gold being produced over the just the past few weeks is increasing a lot, and we're really happy about that. The stability of the operation is just very, very good.

Eldur Ólafsson: We also got certified through a Single Mine Origin gold, meaning our gold from Greenland can be bought with the understanding of how it's being produced, what are the sustainability characters of it, et cetera, et cetera. Our initial gold for purely purposes will be sold only in Greenland, but we will then look together with the government to increase that exposure elsewhere. As I mentioned earlier, the sequential improvement of processing rate during the quarter and actually post-quarter in July and August have been very good and gives us a good confidence that by the end of the year, we should reach our 300 ton a day, which sets us up for a full year of production next year. Okay. We successfully completed an oversubscribed and outside equity raise of GBP 45 million.

Eldur Ólafsson: Approximately 36 international investors participated in this fundraise. It strengthened, obviously, the balance sheet and our working capital, but more importantly, it also gave us a strong backing by US and European as well as Icelandic investors. We acquired the past producing mine in the West Greenland hub called Black Angel, as well as the high impactful license called Kangerlussuaq, which gives us the opportunity to continue developing our critical mineral business, which we intend to do exactly the same model as we have now done with gold. You start with a past producing mine, you bring that through a bulk sample and into production, you use that foundation to further explore in the region to look for elephant or world-class deposit.

Eldur Ólafsson: Last but not least, we've incorporated our joint venture company, which is our servicing company called Suliaq. We signed a third party with a third-party investor to be a joint venture party in that. This is highly important in Greenland. Greenland, as you can imagine, is a very large country. It does not have a lot of people in there. Therefore, services are not abundant. We understand exactly what services we want and what we need, and we also understand the services that other parties in Greenland will need. Due to the fact that we are ahead of the curve with all the developers in Greenland, this both gives us the opportunity to service it better, but also to access potentially other projects within Greenland, and do that in conjunction with us.

Eldur Ólafsson: I'm gonna hand over now to Alex to walk through our financials, and we'll come back to operation.

Edward Westropp: Thanks, Eldar. Before diving into the balance sheet, worth mentioning, as Eldar mentioned, before we had our first exports and recorded our first revenues in Q2.

Ellert Arnarson: Thanks, Eldar. Before diving into the balance sheet, worth mentioning, as Eldar mentioned, before we had our first exports and recorded our first revenues in Q2.

[Company Representative] (Amaroq): Of CAD 3.4 million, at the cost of sales, G&A, and other expenses, the operating loss for the quarter is CAD 4.9 million. Next quarter, we'll discuss these numbers in more detail, by which time you'll have a quarter-over-quarter comparison. The main movements on our balance sheet in Q2, as before, are related to an increase in capital assets of CAD 17.3 million, to CAD 200.8 million at quarter end, which is attributable to the Nalunaq project as we continue to capitalize site costs in the quarter and will continue to do so until the plant reaches commercial production.

Ellert Arnarson: Of CAD 3.4 million, at the cost of sales, G&A, and other expenses, the operating loss for the quarter is CAD 4.9 million. Next quarter, we'll discuss these numbers in more detail, by which time you'll have a quarter-over-quarter comparison. The main movements on our balance sheet in Q2, as before, are related to an increase in capital assets of CAD 17.3 million, to CAD 200.8 million at quarter end, which is attributable to the Nalunaq project as we continue to capitalize site costs in the quarter and will continue to do so until the plant reaches commercial production.

[Company Representative] (Amaroq): Prepaid supplies inventory and escrow is more or less in line with last quarter end, but we are seeing a continued increase in metals inventory, which stands at CAD 9.2 million at quarter end compared to CAD 7.8 million at the end of Q1. This represents our gold contained in ore stockpiles outside the mine and processing plant, as well as gold in circuits associated with processed but not yet smelted material. On the bottom, you can see the associated cash flow movements, which represent the main quarter-on-quarter variance in capital assets and metals inventory. Worth mentioning as well is cash inflow due to finalizing the equity capital raise, Eldur mentioned earlier in Q2, with net proceeds of CAD 81.2 million, which you will see reflected in our cash balance in the next slide.

Ellert Arnarson: Prepaid supplies inventory and escrow is more or less in line with last quarter end, but we are seeing a continued increase in metals inventory, which stands at CAD 9.2 million at quarter end compared to CAD 7.8 million at the end of Q1. This represents our gold contained in ore stockpiles outside the mine and processing plant, as well as gold in circuits associated with processed but not yet smelted material. On the bottom, you can see the associated cash flow movements, which represent the main quarter-on-quarter variance in capital assets and metals inventory. Worth mentioning as well is cash inflow due to finalizing the equity capital raise, Eldur mentioned earlier in Q2, with net proceeds of CAD 81.2 million, which you will see reflected in our cash balance in the next slide.

[Company Representative] (Amaroq): On liquidity and assets, at the end of the quarter, our cash balances are sitting at $86 million. In the quarter, we made a drawdown on our revolving credit facilities, resulting in $10.7 million of net proceeds, decreasing our undrawn facilities to $9.7 million. Subtracting payables of $19.8 million results in $75.1 million in liquidity compared to $23.4 million at the end of Q1. This liquidity position is on the back of a very healthy balance sheet, with $342 million in total assets and 80% equity ratio. The last four lines on the slide are connected to our investment in the Gardaq joint venture. Gardaq's cash balance sits at $3.6 million at quarter end compared to $4.4 million at the end of Q1.

Ellert Arnarson: On liquidity and assets, at the end of the quarter, our cash balances are sitting at $86 million. In the quarter, we made a drawdown on our revolving credit facilities, resulting in $10.7 million of net proceeds, decreasing our undrawn facilities to $9.7 million. Subtracting payables of $19.8 million results in $75.1 million in liquidity compared to $23.4 million at the end of Q1. This liquidity position is on the back of a very healthy balance sheet, with $342 million in total assets and 80% equity ratio. The last four lines on the slide are connected to our investment in the Gardaq joint venture. Gardaq's cash balance sits at $3.6 million at quarter end compared to $4.4 million at the end of Q1.

[Company Representative] (Amaroq): Amaroq's receivable balance from Gardaq increased and amounted to CAD 7.7 million at quarter end. As a reminder, this represents allocated G&A costs to manage the joint venture, which will be converted to shares in Gardaq in 2026. Activity has now been picking up in Gardaq in Q2, where the focus has been on initiating exploration activities after finalizing all planning and scheduling. More on that later in the presentation. Back over to you, Eldur.

Ellert Arnarson: Amaroq's receivable balance from Gardaq increased and amounted to CAD 7.7 million at quarter end. As a reminder, this represents allocated G&A costs to manage the joint venture, which will be converted to shares in Gardaq in 2026. Activity has now been picking up in Gardaq in Q2, where the focus has been on initiating exploration activities after finalizing all planning and scheduling. More on that later in the presentation. Back over to you, Eldur.

Eldur Ólafsson: Thank you for that. Just as a reminder where we are with Nalunaq, we have a resource that was upgraded from approximately 320,000 ounces to 484,000 ounces. It's approximately 10 years worth of mine life. We have an Indicated Resource which is a higher confidence in the resources of 151, and we're working towards getting into resource with underground drilling that is happening right now, as well as increasing the resources with the south Greenland, south block drilling, which is in the valley. Our Long-hole stoping and development on the mining activity have been progressing well. We have developed the ramp fairly advanced, and we have many levels ahead of us.

Eldur Ólafsson: Our kind of a reconciliation from mine development to mine model, it looks good. We have approximately or will have approximately by the end of the year, about 150, 160 people on our payroll. There are a few things that are of importance here. Towards end of September or on 3 October, the agreement with Thyssen will come to an end. We had a two-year agreement. We will be taking over mining to gain obviously more control, and we have been building up our mining team over the past one and a half years. Through that, we are also leasing equipment ourself rather than renting it from Thyssen, and that equipment will be coming into site in Q4.

Eldur Ólafsson: We will continue improving the rates on mining and processing as we have been doing so far. We are on the permitting side of things, all permits are in good standing, in good order. The government has pushed back the Impact Benefit Agreement to have in place by end of December. Otherwise everything else is in good shape. On the construction and commissioning activities, we are installing already and doing work on Phase Two flotation. That is why we have already committed to 5,000 ounces this year. It is to be allow us to finalize as much of the work pre-winter in both gravity or Phase One and Phase Two.

Eldur Ólafsson: This will include finalizing the building, finalizing all of the concrete work, and installing as much of the equipment as humanly possible. Higher recovery means more cash flow quicker, and we wanna set ourselves up for a full year of production next year. Furthermore here, that means that we will shut down the plant in October to keep all of our staff focused on that. Currently in our processing plant, we are operating the plant on a single shift per 24 hours, that means 12 hours. The processing plant is operated during the night, whereas the construction activities are during day. What we're seeing so far is the processing plant per day now have been operating on full capacity in within the shift.

Eldur Ólafsson: Once the people who are in construction activity will be leaving site, we can then start running both shifts on processing, meaning reaching that 300 tons per day, which we feel very confident about. To give you an opportunity, we have picked a shift of gold bars. These gold bars were all made within the last 25 days. We are seeing more and more recovery and throughput already, which is a great success for the team on site and gives us great comfort for the year to end.

Eldur Ólafsson: Last but not least, also the decision to focus on 5,000 ounces versus reaching somewhere in the mid point of the range is the fact that when we run our material through the plant, and if you imagine we are running 12 gram, sorry, 15 gram per ton through the plant, effectively where the processing or gravity where it stands right now, we're getting in around 50% recovery. This means that you would have to run this material through the plant, and then you have to run it again through the plant later time. This means double handling of the ore. It's much better for next year that we double handle as little amount of the ore and actually get as high recovery once all the way through.

Eldur Ólafsson: Again, this is where we are taking the prudent decision to focus on constructing everything as we can this year by winter hitting, because obviously last Q that was not very successful road for, to try to build during winter. The second part is we don't want to be moving ore back in and out the plant and try to get as much out of it in one go. We feel very confident on what we're seeing in the process, what we're seeing in the mine, what we're seeing in the drill core, and the construction is also developing very, very well. That gives us all of those targets we want to do, and we are very optimistic on next Qs.

Eldur Ólafsson: As for the exploration program that has been ongoing, since June, July, we have been doing copper, target generation. That means sampling on surface, looking at various different outcrop of copper and various different things. We have been doing some exploration into the rare earth licenses that are in blue on surface, which are next to the big rare earth deposits in Greenland called Tanbreez and Kvanefjeld. We have been doing a lot of exploration work, looking at satellite deposits in the gold system, so Vagar, Eagles Nest, and we are now starting to drill in Nanok. I actually just got news from site that we're starting that drilling campaign as we speak. What does this all mean?

Eldur Ólafsson: Well, Nanok we have built and put a serious amount of effort in permitting, getting the processing plant up to date. We're increasing the resources, getting the throughput, generating more cash flow. The intention is to drill up Nanok, define Nanok to hopefully become a world-class deposit. We can, in the beginning stages, move material from Nanok to Nalunaq and increase cash flow from that perspective. This is why it's important to have permits and licenses in a different state to have the infrastructure and then be able to leverage that infrastructure to bring in more material within the area. Again, this is exactly the same as we're doing in the West Greenland Hub. If we look at the West Greenland Hub, similar to South Greenland, what do we see in South Greenland?

Eldur Ólafsson: Well, we have the golds district. You have the rare earth district which is being very well sought after by various different governments and companies. Same thing here in the West Greenland Hub. Here we are operating a past producing mine called Black Angel. A lot of knowledge is on that mine. It historically produced around 11 million tons of combined 16% zinc, lead, silver, first by Cominco and Teck and later Boliden over 17 years, a very profitable and good mine. It already has a resource of 4.4 million tons of approximately 12% zinc. It has a camp. It has a conveyor system to go into the mine. It has a full mine. It has a large shipping harbor. It has a hangar.

Eldur Ólafsson: All of this infrastructure is in place, and most importantly, it also has a huge potential to grow resources. Up in Black Angel, the glacier has been retreating, which means that zinc layers are coming to surface quite dramatically. Again, we also acquired Kangerlussuaq. If you think Black Angel is similar to Nalunaq and then Kangerlussuaq would be similar to Nanok, it's the same model where we will be drilling next year in Kangerlussuaq, looking at a world-class potential there, and again, utilizing the infrastructure in Black Angel. This whole foundation of this is that there is a saying in mining, where you start mine, where they stop.

Eldur Ólafsson: There's more known things, there's less risk, and you can actually develop and build a base for our strategic mineral company to grow within all Greenland, and that is our intention with Black Angel and Kangerlussuaq. As for Isua, as I said earlier, we've formed the company. We put in place a board and a manager for that entity. We will be acquiring drill rigs, the new mining equipment, the remote exploration camp, maritime vessels, and other things, and leasing them back both to our businesses but also to other businesses within Greenland. This gives us the equipment that is needed to operate in Greenland. To give you example, our mining equipment to date was in the ownership of our contractor.

Eldur Ólafsson: Now we will be owning or having equipment in Greenland, servicing equipment in Greenland, which will be able to service hydroelectric project, infrastructure project, as well as mining projects. Understanding how you get consumable in, explosive in, these are all quite complex items. We are there as the only developer in Greenland who understand all of these aspects. We can leverage on that not only for our projects, but also other projects. That is a very exciting business unit that is being set up at the moment. On the hydropower, we are forming a hydropower company, which we intend to call Imak. Imak is water in Greenlandic.

Eldur Ólafsson: This hydropower feasibility study we put or develop under the leadership of Asger Markussen is next to our processing plant or very close to our processing plant and the road. The installation of this plant should be relatively simple. It's approximately 1 MW of plant. It will reduce our diesel consumption on site by 1.3 million liters a year, which is a significant saving. Diesel is one of the things that we have to acquire and bring on site, and are quite expensive for us. More importantly, we will be the first private individual to build something of this scale in all of Greenland. There is a huge interest for data centers, for heavy industry in hydroelectric opportunities in Greenland.

Eldur Ólafsson: There are not many people or companies that have gone through all of the permitting process, all of the design process, and understanding of how you can do that. Again, this is something we are looking towards having in place or starting up, which is construction of end of next year, 2026. As an outlook going forward, we're gonna continue the uptime in the mine development and with the processing rate is running on a single shift. That de-risk that 300 tons per day part.

Eldur Ólafsson: It's not only about the fact that now the machines and the crusher and the mill and all of that is working very well, it's also about training our people, it bringing all of these commissioning standards in place, which are going really, really well. We have a better, much better liquidity position than when we started looking at both rehiring of ore as well as giving us time to finalize construction before winter. It tees us up for a full year of production next year. Whereas rather than if we try to delay that long into next year, it will not give us as good opportunity to have a full year of production next year. We have not much left to finalize on construction.

Eldur Ólafsson: We are gonna have a shutdown in October to finalize certain things in connection, and we are focusing on 5,000 ounces, which for sure is on the kind of a lower end of our outlook, but it gives us that tees us up for this full year next year, and we feel very confident about what we're gonna achieve there. We have a very ambitious exploration program this year, which we will be reporting on in September, October, November, and all the way into March. We will have a very busy reporting season coming up. We finalize our initial sustainability report in July, where we are focusing on key areas of corporate governance, environment, people, and community, which is important.

Eldur Ólafsson: You know, we've said to the market that we have our aspiration to look towards the main market in London. These are all items that we're putting in place, so we are in the best position to attract investors if and when we would take that decision. In July, we also changed the name to Amaroq. It is not Amaroq Minerals. It is to represent obviously Greenland as a focus. Therefore, this is a very Greenlandic name. More importantly, it's also to emphasize on the fact that we have four different business branch underneath the company. We are effectively an infrastructure company who can generate cash flows through mine development and services, and the support units there are exploration and hydroelectric. All of this is coming really well in place.

Eldur Ólafsson: We feel very good about all of the progress to date, and we will continue to update the market as we go by.

[Company Representative] (Amaroq): Thanks, Eldur Ólafsson. I'm gonna move to some questions that we've received online, and I'll just take them from the top if that's okay. This from an anonymous attendee. It's very disappointing how you raise money from investors then miss on production numbers straight after. This is especially frustrating considering your track record of delays in the past. Indeed, one of your lead brokers has been cutting your numbers and price targets. How do you plan on addressing these realistic expectations going forward and hopefully meeting or beating those?

Edward Westropp: Thanks, Eldur Ólafsson. I'm gonna move to some questions that we've received online, and I'll just take them from the top if that's okay. This from an anonymous attendee. It's very disappointing how you raise money from investors then miss on production numbers straight after. This is especially frustrating considering your track record of delays in the past. Indeed, one of your lead brokers has been cutting your numbers and price targets. How do you plan on addressing these realistic expectations going forward and hopefully meeting or beating those?

Eldur Ólafsson: I think one of the key things here, and I get the frustration and fair enough, but the decision here is a prudent one, right? We learned that from last winter that you don't want to be constructing or doing complex thing over January, February, March, right? We also saw the amount of material we are running through our plant and so on will mean a backlog of handling it. We can handle it. We can produce 11 or in that mid-range. It just means that we then have to reduce construction, more double handling, and we're not as well set up for next year. This is why the decision was taken to focus on this. We also feel confident that we will reach our goal towards the end of the year. Hope that answered that question.

[Company Representative] (Amaroq): Thanks. Question here on grades or gold grades and how they're looking and what grades are we sort of getting at the moment?

Edward Westropp: Thanks. Question here on grades or gold grades and how they're looking and what grades are we sort of getting at the moment?

Eldur Ólafsson: Yeah. In the mountain block, we are seeing that the reconciliation between the mine model and actually what we are mining is very good, especially in the Eastern drive, are really high grade. That is from the run towards outcrop. On the Western drive, it is more erratic, and that's what we're drilling right now. Effectively, we have developed all the way up almost up to 800 meters, and we're only mining or sloping at 720 meters and 730. We have a lot of levels ahead of us. Again, this is to prepare ourself for full year production next year.

Eldur Ólafsson: Saying that, what we have to remember, this is a trial mining, which means that a lot of the grades and the development we see through the development tunnels. So far, so good.

[Company Representative] (Amaroq): Thanks, Eldur Ólafsson. This is from Duncan from Panmure Gordon. How long do you expect the plant to be shut down for? How long will phase two construction commissioning take? Can this work be finalized through winter if needed?

Edward Westropp: Thanks, Eldur Ólafsson. This is from Duncan from Panmure Gordon. How long do you expect the plant to be shut down for? How long will phase two construction commissioning take? Can this work be finalized through winter if needed?

Eldur Ólafsson: The construction in October, we're taking all of October as the current plan. We're obviously in to try to reduce this as much as possible. That will allow us to connect all of the electrics and automate the system to a gravity process. It will allow us to enclose the whole building, which again, will then allow us to operate it inside of the building all the way while we're commissioning Phase Two into Q1 next year.

[Company Representative] (Amaroq): Thanks, Eldur. Next one's from Tim Huff at Canaccord Genuity. With regards to your Phase Two construction, is it currently expected to be completed mid Q4? How long should it take to transition the second shift personnel back to site along with the new released equipment?

Ellert Arnarson: Thanks, Eldur. Next one's from Tim Huff at Canaccord Genuity. With regards to your Phase Two construction, is it currently expected to be completed mid Q4? How long should it take to transition the second shift personnel back to site along with the new released equipment?

Eldur Ólafsson: On the phase two construction, what we said is that majority of the item for the phase two's construction, such as civil works, equipment and so on, will be constructed during Q4, I should say, not mid or towards, during mid Q4. We will be ramping up the flotation production from then onward. The second question, let me transition. On the second shift personnel, we have a very good started on the kind of a second shift for the plant. As soon as we have finished the kind of our October work and into November, we will be looking towards bringing those people on board, possibly even sooner, but we'll update you on that.

[Company Representative] (Amaroq): Super. Next one is about the Black Angel and Kangerluarsuk acquisition. Have we started conversations yet with Gardaq A/S, and what's the status there?

Edward Westropp: Super. Next one is about the Black Angel and Kangerluarsuk acquisition. Have we started conversations yet with Gardaq A/S, and what's the status there?

Eldur Ólafsson: Yes. Just a background, Gardaq is 51% owned by us and 49% owned by a group called...

[Company Representative] (Amaroq): Gicam.

Edward Westropp: Gicam.

Eldur Ólafsson: Well, Ecam and or Gicam, which is has investors like Gicam and Louis Page in it. We have started the discussion with Gicam and to give them the opportunity to effectively acquire the Black Angel and Kangerluarsuk into Gardaq A/S, and we'll be updating the market in the next coming weeks or months on that, those discussions.

[Company Representative] (Amaroq): Thank you. Last question we have online, for the moment. Please, if you have one, please write it in now. Have you seen any interest from other operators in Greenland for your services business?

Edward Westropp: Thank you. Last question we have online, for the moment. Please, if you have one, please write it in now. Have you seen any interest from other operators in Greenland for your services business?

Eldur Ólafsson: Yes. There are various operators that have shown us interest there. Again, we have tent equipment, fuel, drill rigs in country. Just to give you an idea, what is the difference? Well, if you don't have that in country and you cannot service it in country or cannot maintain it in country, you effectively need to buy a rig from elsewhere for a sometimes short program of exploration. As we have those rigs all over the country, and therefore we can bring those equipment to the drilling sites that people are looking at. We also have the experience of bringing things like camp and the drill rig in and out over 10 years.

Eldur Ólafsson: We understand how all of that works, which is much harder for any operator who doesn't understand Greenland. The answer to your question is yes, and we see this as a huge benefit for the venture.

[Company Representative] (Amaroq): Thanks, Eldur. One last question just come in at the end there. Why are you confident you'll reach the 300 tons per day processing rate by the end of the year?

Edward Westropp: Thanks, Eldur. One last question just come in at the end there. Why are you confident you'll reach the 300 tons per day processing rate by the end of the year?

Eldur Ólafsson: That's because what we are seeing is, there are two things to it. One thing is the mining needs to deliver the 300 tons per day. We've seen it with our mining team that they have reached a very good throughput, and we will intend to make sure the mining can deliver what it needs to deliver. That is looking good. Secondly, what I wanna say, we are running the plant now over the past, well, call it July and all the way into August, on a one shift. They are reaching every single day, the 144 tons over 12 hours versus 24 hours. This is a very good sign for us that we are seeing all of these, commissioning and issues are retreating away.

Eldur Ólafsson: We're understanding how the flow rate and the recovery. This is all in a very good nick, and therefore it's only a question of adding then the second shift, which will be a combination of the current shift and some of the construction team will also join.

[Company Representative] (Amaroq): Thanks, Eldur. That actually ends the questions we've got from the line here. If anyone has any further questions, please drop me a line. Edward Westropp, I'm the head, IRBD here. With that, I'll say thank you very much for everyone's time, and look forward to speaking to you next time at the Q3 results in November. Thanks very much.

Edward Westropp: Thanks, Eldur. That actually ends the questions we've got from the line here. If anyone has any further questions, please drop me a line. Edward Westropp, I'm the head, IRBD here. With that, I'll say thank you very much for everyone's time, and look forward to speaking to you next time at the Q3 results in November. Thanks very much.

Eldur Ólafsson: Thank you.

[Company Representative] (Amaroq): Thank you.

Ellert Arnarson: Thank you.

Eldur Ólafsson: Thank you.

Edward Westropp: Thank you.

Speaker #1: Normal course today, Al Donaldson, the Chief Executive, will take you through some highlights and then some operational detail. Elliot will, the CFO, will take you through some of the financial highlights, and then Elder will finish off with a summary.

Speaker #1: We'll then head to Q&A. if you have any questions, please use the Q&A tab on the screen there and I will, I'll read those out and we can deal with them point by point thereafter.

Speaker #1: So thanks again for joining. I'll hand it over to you, Elder, to start, please.

Speaker #2: Thank you very much. at, it's a pleasure being with you here, on this relatively good summer day here in Iceland. and I hope you had some good, holidays, already finished.

Speaker #2: I want to take your attention to the first slide, which is, Amaroq Minerals today. what we have been working on creating within Amaroq is effectively a integrated, infrastructure and mine development company.

Speaker #2: And we need to do that to make sure we can unlock the potential in Greenhold. our companies and business plans are a gold business, which we own 100%, called Null Life AS.

Speaker #2: We then own Gala, 51% of Gala, which is a strategic mineral company. We then own Suliap, which we just formed and we speak about later, which is a servicing entity.

Speaker #2: which acquires critical equipment and consumables to be able to conduct work in mining and infrastructure in Greenland. And then last but not least, we are about to form EMEC, which is, a renewable energy company mainly focused on hydro.

Speaker #2: And as you know, hydro has a great potential within all Greenland. By doing this, we can leverage the management of Amaroq, in things like permitting, governmental relations, engineering, and various other aspects of things to give investors a exposure on Greenland in the main industry that are important.

Speaker #2: And we are solely focused on Greenland and we'll be focusing on developing these opportunities within the until the end of this year and obviously into next year as well.

Speaker #2: Go to the next page, please. on, main things in the Q2, highlights, I'll continue the trial mining and ongoing construction of the plant has been progressing well.

Speaker #2: we had our first gold export, and made a revenue of 3.4 million by the end of Q2. As previously, told, we, were, wrapping up more slower in the beginning of the year, but what we are seeing already right now is that the, the gold being produced over just the past few weeks is increasing a lot.

Speaker #2: And we are really happy about that. And the stability of operation is, is very, very good. we, also, got certificated through a single mine, origin gold, meaning our gold from Greenland, can be bought with the understanding of how it's being produced, what are the sustainability characters of it, et cetera, et cetera.

Speaker #2: And our initial gold for purely purposes will be sold only in Greenland, but we will then look together with the government, to increase that, exposure elsewhere.

Speaker #2: As I mentioned earlier, the sequential improvement of processing rate, during the quarter and actually post-quarter in July and August have been very good and gives us a good confidence our 300 tons a day, which sets us up for a full year of production next year.

Speaker #2: Okay. we successfully completed an overseas rise and outside equity rate of 45 million sterling. approximately 36 international investors, participated in, in this fundraise. It strengthened obviously the balance sheet and our working capital, but more importantly, it also gave us a strong backing by US and European as well as Icelandic investors.

Speaker #2: we acquired the past producing mine of, in the West Greenland top called, Black Angel as well as the, high impactful license called Kangaluso. Which gives us the opportunity to continue developing our critical mineral business, which we intend to do exactly the same model as we have now done with gold.

Speaker #2: So you, you start with a past producing mine, you bring that through a bulk sample and into production, you use that foundation to further explore, in the region, to look for, elephant or world-class deposit.

Speaker #2: last but not least, we've incorporated our, joint venture, company, which is our servicing company called Suliac. and we signed a third-party, with a third-party investor to be a joint venture party in that.

Speaker #2: This is highly important in Greenland. Greenland, as you can imagine, is a very large country. It does not have a lot of people in there, and therefore services are, not abundant.

Speaker #2: We understand exactly what services we want and what we need. And we also understand it, understand the services that other parties in Greenland will need.

Speaker #2: And due to the fact that we are developers in Greenland, this both gives us the opportunity to service it very, but also to access potentially other projects within Greenland.

Speaker #2: and do that in conjunction with others. I'm gonna hand over now to Ella to walk through our, our financials. And we'll come back to operation.

Speaker #3: Thanks, Arthur. before diving into the power sheet, worth mentioning, as Arthur mentioned, before we had our first, exports and recorded our first revenues in Q2, of 3.4 million.

Speaker #3: at the cost of sales, GNA and other expenses, the operating loss for the quarter is 4.9 million. Next quarter, we'll discuss these numbers in more detail by which time you'll have a quarter-on-quarter comparison.

Speaker #3: The main movements on our balance sheet in Q2, as before, are related to an increase in capital assets of 17.3 million. to 200.8 million at quarter end, which is attributable to the Null Life project.

Speaker #3: As we continue to capitalize site costs in the quarter and we'll continue to do so until the plant reaches commercial production. Prepaid supplies inventory and escrow is more or less in line with last quarter end.

Speaker #3: But we are seeing a continued increase in metals inventory, which stands at 9.2 million at quarter end. Compared to 7.8 million at the end of Q1.

Speaker #3: This represents our gold contained in our stockpiles outside the mine and processing plant. As well as gold in circuits. Associated with processed but not yet smelted material.

Speaker #3: And on the bottom, you can see the associated cash flow movements, which represent the main quarter-on-quarter variance in capital assets and metals inventory. worth mentioning as well is cash inflow due to finalizing the equity capital raise.

Speaker #3: Elder mentioned earlier in Q2 with net proceeds of 81.2 million. Which you will see reflected in our cash balance in the next slide. On liquidity and assets, at the end of the quarter, our cash balances are sitting at 86 million.

Speaker #3: and in the quarter, we made a drawdown on our revolving credit facilities. resulting in 10.7 million of net proceeds. Decreasing our undrawn facilities to 9.7 million.

Speaker #3: Subtracting payables of 19.8 million results in 75.1 million in liquidity. Compared to 23.4 million at the end of Q1. This liquidity position is on the back of a very healthy balance sheet.

Speaker #3: with 342 million in total assets and 80% equity ratio. In the last four lines, on the slide, are connected to our investment in the GARDAC, joint venture.

Speaker #3: GARDAC's cash balance sits at 3.6 million at quarter end compared to 4.4 million. At the end of Q1. Amaroq's receivable balance from GARDAC increased and amounted to 7.7 million at quarter end.

Speaker #3: And as a reminder, this represents allocated GNA costs to manage the joint venture, which will be converted to shares in GARDAC in 2026. activity has now been picking up in GARDAC in Q2.

Speaker #3: With a focus has been on initiating exploration activities after finalizing all planning and scheduling. And more on that later in the presentation. And back over to you, Elvis.

Speaker #2: Thank you, Ella. yeah, so, just, as a reminder where we are with Null Life we have a resource that was upgraded from, about approximately 320,000 ounces to 484,000 ounces.

Speaker #2: it's a, it's approximately 10 years' worth of mine life. we have an indicated resource, which is a higher confident in the resources of 151.

Speaker #2: And we're working towards getting into reserves with the underground drilling that is happening right now. as well as increasing the resources with, the south, Greenland, south, block drilling, which is in the valley.

Speaker #2: our long-haul stopping and development on, on the mining activity have been, progressing, well. we have, developed around, fairly advanced and we have, many levels ahead of us.

Speaker #2: And, our kind of a reconciliation from mine development to mine model looks good. we, we have approximately, or will have approximately by the, end of the year, about 150, 160 people, on our payroll.

Speaker #2: there are a few things that are, of importance here. towards, end of September or around 3rd of October, the agreement with Teeson will come to an end.

Speaker #2: They had a two-year agreement. We will be taking over mining to gain obviously more control and we have been building up our mining team over the past one and a half year.

Speaker #2: through that, we are also, leasing equipment ourselves rather than renting it from Teeson. And that equipment will be coming into, into site in Q, four.

Speaker #2: we, will continue improving the rates on mining and processing as we have been doing so far. we are on the permitting side of things.

Speaker #2: all permits are in good standing and good order. The government has, pushed back the impact benefit agreement, to have in place by end of December.

Speaker #2: but otherwise everything else is in, in good, good shape. On the construction and commissioning activities, we are installing already, and, and doing work on phase two flotation.

Speaker #2: that is why we have already, committed to 5,000 ounces this year. it is to be allow us to finalize as much of the work pre-winter in both, gravity or phase one and phase two.

Speaker #2: This will include, finalizing the building, finalizing all of the concrete work, and installing as much of the equipment as humanly possible. Higher recovery means more cash flow quicker and we wanna set ourselves up for a full year of production next year.

Speaker #2: Furthermore, here, so that means that we will shut down the plant in October to, to keep all of our staff focused on that. Currently in our, processing plant, we are operating the plant, on a single shift per 24 hours.

Speaker #2: So that means 12 hours. So the processing plant is operated during the night whereas the construction activities are during the day. this what we're seeing so far is the processing plant per day now have been operated on full capacity in within the shift.

Speaker #2: Once the people who are in construction activity will be leaving site, we can then start running both shifts on processing, meaning reaching that 300 ton per day, which we feel very confident about.

Speaker #2: to give you an opportunity, we have picked a share of gold bars. These gold bars were all made within the last, 25 days. So we are seeing more and more, recovery, and, and, throughput already which is a great success for the team on site and, and gives us a great comfort for, for the, to, to end.

Speaker #2: Last but not least, also, the decision to focus on 5,000 ounces versus reaching, somewhere in the mid, point of the range is the fact that when we run our material through the plant, and if you imagine we are running 12 gram, sorry, 15 gram per ton through the plant, effectively where the processing or gravity where it stands right now, we're getting in around 50% recovery.

Speaker #2: This means that you would have to, you have to run this material to the plant and then you have to run it again through the plant later time.

Speaker #2: This means double handling of the water. So it's much faster for next year that we double handle as little amount of the water and actually get as high recovery once all the way through.

Speaker #2: Again, this is where we are taking the prudent decision to focus on constructing everything as we can this year prior to winter hitting because obviously last quarter that was not very successful for to try to build during winter.

Speaker #2: And then the second part is we don't want to be moving all back in and out, the plant and try to get as much out of it in one go.

Speaker #2: So, we feel, very confident on what we're seeing in the process, what we're seeing in the mine, what we're seeing in the drill court, and, and the construction is also developing very, very well.

Speaker #2: So, so that gives us all of those, targets we want to do and we are very optimistic on, on next quarters. As for the expiration program, that has been ongoing, since June, July.

Speaker #2: we have been doing copper, pellet target generation that means sampling on surface, looking at various different, outcrop of, of, of copper and various different things.

Speaker #2: We have been doing some expiration into the rare earth, licenses that are in blue on surface with some next to the big rare earth, deposits in, in Greenland called Tampere and, and Fanefield.

Speaker #2: we have, been doing a lot of expiration work, looking at system. So Vagar, Eaglenest, and, and, and, and we are now, starting to drill in Mammoth, actually just got news from site that, we are starting that drilling campaign as we speak.

Speaker #2: And what this is all mean? Well, now that we have built and put a huge amount of effort in permitting, getting the processing plant up to date, we're increasing the resources, getting the throughput, generating more cash flow.

Speaker #2: And then the intention is to drill up Mammoth, define Mammoth to hopefully become a world-class deposit. Then we can, in the beginning stage, move material from Mammoth to Nallnack and increase, cash flow from that perspective.

Speaker #2: And this is why it's important to have, permits and licenses at different stages to have the infrastructure and then be able to leverage that infrastructure to bring in more material within, within the area.

Speaker #2: And again, this is exactly the same as we're doing in the West Greenland hub. And if we look at the West Greenland hub, similar to South Greenland, what do we see in South Greenland?

Speaker #2: Well, we have the gold, district. You have the rare earth district where, which is being very interesting, being very well sought after by, by various different, governments and, and, and, and companies.

Speaker #2: Same thing here in the West Greenland hub. Here we are operating at past producing mine called Black Angel. a lot of knowledge is on that mine.

Speaker #2: It historically produced around 11 million tons of, combined, 16% zinc-led silver. First by Cominco and TAC and later Boliden over 17 years. A very profitable and good mine.

Speaker #2: It already has a resource of 4.4 million tons of, of approximately 12% zinc. It has a camp. It has a conveyor system to go into the mine.

Speaker #2: It has a full mine. It has a large shipping harbor. It has a hangar. All of this infrastructure is in place. And most importantly, it also has a huge potential to grow resources.

Speaker #2: Because up in Black Angel, the glacier has been retreating, which means that zinc layers are coming to surface, quite dramatically. Again, we also acquired Kangla Lusak if you think Black Angel is similar to Nallenack and then Kangla Lusak would be similar to Nannock.

Speaker #2: It's the same model. Where we will be drilling next year in Kangla Lusak, looking at a world-class potential there. And again, utilizing the infrastructure in Black Angel.

Speaker #2: this, whole foundation of this is that there is a saying in mining, where do you start mine? Where they stop. There's more known things.

Speaker #2: There's less risk. And you can actually develop and build a base for our strategic mineral company to grow within all Greenland. and that is our intention, with Black Angel and Kangla Lusak.

Speaker #2: As for Suliac, we're, as I said, only we've formed, the company. we put in place a board and, and, a manager for that entity.

Speaker #2: we will be, acquiring drill rigs, the new mining equipment, we, the remote expiration camp, maritime vessels, and other things. and leasing them back both to our businesses, but also to other businesses within Greenland.

Speaker #2: this gives us the equipment that is needed to operate in Greenland. To give you an example, our mining equipment to date was in ownership of our contractor.

Speaker #2: Now we will be owning or having equipment in Greenland servicing equipment in Greenland, which will be able to service hydroelectric projects, infrastructure projects, as well as mining projects.

Speaker #2: Understanding how you get, consumable in, explosive in, these are all quite complex items and we are, we are there as the only developer in Greenland to understand all of these aspects and we can leverage on that not only for our projects, but also other projects.

Speaker #2: and that is very exciting business unit that is being set up at the moment. On the hydropower, we, are forming a hydropower company, we, which we intend to call EMEC.

Speaker #2: EMEC is, water in Greenlandic. this hydropower, feasibility study we put, or, or develop under, under the leads of Auskir Markusson, is next to our processing plant or very close to our processing plant and the road.

Speaker #2: So the installation of this plant should be relatively simple. It's approximately one megawatt plant. It will reduce our diesel consumption on site by, 1.3 million liters a year, which is a significant saving.

Speaker #2: Diesel is one of the things that, that we have to acquire and bring on site and are quite expensive for us. But more importantly, we will be the first private individual to build something of this scale in all of Greenland.

Speaker #2: and there is a huge interest for data centers, for heavy industry in hydroelectric, opportunities in Greenland. but there are not many people or companies that have gone through all of the permitting process, all of the design process, and understanding of how you can do that.

Speaker #2: And so again, this is something we are looking towards having in place or, or starting a, construction of end of next year, '26. So, as an outlook going forward, we're going to continue the uptime in the mine, development, and with the processing rate, at least running on a, on a, on a, on a single shift.

Speaker #2: that de-risk that 300 tons per day target. It's not only about the fact that now the machines and, the, the crusher and the mill and all of that is working very well.

Speaker #2: It's also about, training our people. it are bringing all of these de, commissioning standards in place, which are going really, really well. we have a better, much better liquidity position.

Speaker #2: And when we started looking at both re-handling of ore as well as giving us time to finalize construction before winter, it teases up for a full year of production next year.

Speaker #2: Whereas rather than if we, try to delay that long into next year, it will, won't, will not give us as good opportunity to have a full year of production next year.

Speaker #2: And, and we have not much left to finalize on construction. we are going to have a shutdown in October. To finalize certain things in connection, and we are focusing on 5,000 ounces which for sure is on the kind of a lower end of our outlook.

Speaker #2: But it gives us that teases up for this full year next year and, and we feel very confident about what we're going to achieve there.

Speaker #2: we have a very, ambitious expiration program this year, which we will be reporting on in September, October, November, and all the way into March.

Speaker #2: So we, we will have a, a very busy reporting season coming up. We finalize our initial sustainability report, in, in July. where we are focusing on key areas of corporate governance, environment, people, and community, which is important.

Speaker #2: And, and, you know, we've sat to the market that we have our aspiration to, to look towards the main market in London. These are all items that we're putting in place.

Speaker #2: So we are in the best position to attract investors, if and when we would take that decision. On, in July, we also changed the name to Amaroq.

Speaker #2: It is, not Amaroq Minerals. It is to represent, obviously Greenland as a focus. Therefore, this is a very Greenlandic name. But more importantly, it's also to emphasize on the fact that we have four different business tracks, branch underneath the company.

Speaker #2: We're effectively an infrastructure company who can generate cash flow through mining development and services, and, and the support units there are expiration and, and, and hydroelectric.

Speaker #2: So all of this is coming really well in, in place. We feel, very good about all of the progress to date and we'll continue to update the market as we go by.

Speaker #2: Thanks, Ola. so I'm going to move to some questions that we've received online and I'll just take them from the top if that's okay.

Speaker #2: So this was an anonymous attendee. It's very disappointing how you raise money from investors. They miss on production numbers straight after. This is especially frustrating considering your track record of delays in the past.

Speaker #2: Indeed, one of your lead brokers has been starting your numbers and price targets. How do you plan on addressing these realistic expectations going forward and hopefully meeting or beating those?

Speaker #2: I think of the key thing here, and, and I, I get the frustration and, and fair enough, but the decision here is a prudent one, right?

Speaker #2: We don't, we learned that from last winter that you don't want to be constructing or doing complex things over January, February, March, right? we also saw the amount of material we are running through our plant and so on will mean a backlog of handling.

Speaker #2: We can't handle it. We can't produce 11, or, or, or, or, or in the, in that mid-range. But it just means that we then have to reduce construction, more double handling, and we're not as well set up for next year.

Speaker #2: This is why the decision was taken to focus on this. And we also feel confident that we will reach our goal towards the end of the year.

Speaker #2: hope that answered, answered that question. Okay. question here on, on grades. a gold grades and how they're looking in what grades are we sort of getting at the moment?

Speaker #2: Yeah. So in, in the mountain block, we are seeing, that the reconciliation between, the mine model and actually what we are mining is very good.

Speaker #2: Especially the eastern drive, are, are, are really, really high grade. So that is from the round towards outcrop. On the western drive, it is more erratic and that's what we're drilling right now.

Speaker #2: But effectively, we have developed all the way up almost up to 800 meters and we're only mining or stopping at 720 meters and 730.

Speaker #2: So we have a lot of levels ahead of us. So again, this is to prepare ourselves for a full year of production next year.

Speaker #2: Saying that, what we have to remember this is, a trial mining, which means that a lot of the grades and the development we see through the development tunnels, but so far, so, so good.

Speaker #2: Thanks, Ola. this is from Duncan from Pamir. how long do you expect the plant to be shut down for? and how long will phase two construction commissioning take?

Speaker #2: And can this work be finalized through winter if needed? Yeah. So the construction road probably we, we're taking all of October as the current plan.

Speaker #2: We're obviously into trying to reduce us as much as possible. that will allow us to connect, all of the electrics and, automated system to our gravity process.

Speaker #2: It will allow us to enclose the whole building, which again will then allow us to operate it inside of the building all the way while we're commissioning phase two into, into Q1 next year.

Speaker #2: Got it. Thanks, Ola. next one's from Tim Huff at Canaccord. With regards to your phase two construction, is it currently expected to be completed mid-Q4?

Speaker #2: And how long should it take to transition the second shift personnel back to site along with the newly released equipment? Yeah. So on the phase two construction, what we said is that majority of the item for the phase two construction, so, such as civil works, equipment and so on, will be constructed, during, Q4, I should say, not mid or, or, or towards, during, mid-Q4.

Speaker #2: and then we will be, ramping up the flotation, production, from, then onward. the second question, in terms of, yeah, so on the second shift personnel, we have a very good, started on the kind of a second shift, for the plant.

Speaker #2: So as soon as we, have finished the kind of our October work and into November, we will be looking towards bringing those people on board.

Speaker #2: Possibly even sooner, but, but we'll, we'll update you on that. Super nice. next one is, about the Black Angel in Kangaloosa, acquisition. Have we started conversations yet with Goddak?

Speaker #2: and what's the status there? Yes. So just a background, Goddak is 51% owned by us and 49% owned by a group called, well, ECAM and, or, GCAM, which is, has, investors like, GCAM and, and Louis Payton.

Speaker #2: So we have, started the discussion with GCAM and, and to give them the opportunity to effectively, acquire the Black Angel in Kangaloosa into Goddak.

Speaker #2: And we'll be updating the market in, in, in the next coming weeks or, or months on, on that, those discussions. Thank you. last question we have online, for the moment.

Speaker #2: Please, if you have one, please let it, please write it in now. Have you seen any interest from other operators, in Greenland for your services various operators that have, have shown us interest there.

Speaker #2: again, we have, tent equipment, fuel, drill rigs in-country. Just to give you an idea of what, what, what the, what, what is the difference?

Speaker #2: Well, if, if you don't have that in-country and you cannot service it in-country or cannot maintain it in-country, you, you effectively need to buy a rig from elsewhere for a, sometimes short program of exploration.

Speaker #2: But as we have those rigs over all of the country, and therefore we can, bring those, equipment, to the, the drilling sites that people are looking at.

Speaker #2: We also have the experience of bringing things like camp and the drill rig in and out, over 10 years. So we understand, how all of that works, which is much harder for any, operator who doesn't understand Greenland.

Speaker #2: So, to answer to your, your question is yes. And, and, and, and we see this as a, a, a, a huge benefit for the venture.

Speaker #2: thanks, Ola. One last question just coming in at the end there. why are you confident you'll reach the 300 tons per day processing rate by the end of the year?

Speaker #2: That's because what we are seeing is, there are two things to it. One thing is the mining needs to deliver the 300 tons per day.

Speaker #2: We've seen it with our mining team that they have reached, a very good throughput and we will intend to make sure the mining can deliver what needs to deliver.

Speaker #2: So that, that is, that is looking good. Secondly, what I want to say, we are running the plant now over the past, well, call it July and all the way into August on a one shift, and they are reaching every single day, their 144 tons over 12 hours versus 24 hours.

Speaker #2: So this is a very good sign for us that we are seeing all of these, commissioning, issues are, are retrieving away. We're understanding how the flow rate and the growth and, and, and the recovery.

Speaker #2: So this is all in a very good nick. And therefore, it's only a question of adding then the second shift, which will be a combination of the current shift and, and, some of the construction team who are on site.

Speaker #2: Thanks, Ola. that actually ends the questions we've got from the line here. If anyone has any further questions, please drop me a line at Westrop.

Speaker #2: IR and BD here. but with that, I'll say thank you very much for everyone's time. And, look forward to speaking to you next time at the Q3 results in November.

Q2 2025 Amaroq Ltd Earnings Call

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