Q1 2026 Endeavour Mining PLC Earnings Call
Operator: Results Webcast.
Operator: At this time, all participants are in a listen-only mode. After management's presentation, there will be a question-and-answer session. For those who wish to ask a question, please dial in to the phone line. Please note that due to time constraints, we will be prioritizing questions from covering analysts. Today's conference call is being recorded, and a transcript of the call will be available on Endeavour's website tomorrow. I'd now like to hand the call over to Endeavour's Vice President of Investor Relations, Jack Garman. Please go ahead, sir.
Speaker #2: Results webcast.
Speaker #1: At this time, all participants are in the listen-only mode. After management's presentation, there will be question-and-answer session. So for those who wish to ask a question, please dial into the phone line.
Speaker #1: Please note that due to time constraints, we will be prioritizing questions from covering analysts. Today's conference call is being recorded. And the transcript of the call will be available on ENDAVOUR's website tomorrow.
Speaker #1: And I'd like to hand the call over to ENDAVOUR's Vice President of Investor Relations, Jack Garman. Please go ahead, sir.
Jack Garman: Hello, everyone, welcome to Endeavour's Q1 2026 Results Webcast. Before we start, please note our usual disclaimer. On the call today, I am joined by Ian Cockerill, Chief Executive Officer, Guy Young, Chief Financial Officer, Djaria Traore, Executive Vice President of Operations and ESG, and Sonia Scarselli, Executive Vice President of Growth and Exploration. Today's call will follow our usual format. Ian will first go through the highlights of the quarter. I will present the financials, and Djaria will walk you through our operating results by mine before handing back to Ian for his closing remarks. We will open the line up for questions. I will now hand over to Ian.
Speaker #3: Hello, everyone, and welcome to ENDAVOUR's Q1 2026 results webcast. Before we start, please note our usual disclaimer. On the call today, I'm joined by Ian Cockrill, Chief Executive Officer, Guy Young, Chief Financial Officer, Jaria Traoré, Executive Vice President of Operations and ESG, and Sonia Scarselli, Executive Vice President of Growth and Exploration.
Speaker #3: Today's call will follow our usual format. Ian will first go through the highlights of the quarter, Guy will present the financials, and Jaria will walk you through our operating results by mine.
Speaker #3: Before handing back to Ian for his closing remarks. We'll then open the line up for questions. I'll now hand over to Ian.
Ian Cockerill: Thanks, Jack. Welcome to everyone joining us on the call today. Q1 2026 was a record quarter for Endeavour, with a strong operational performance and elevated gold price underpinning a very strong financial result. Production of 282,000 ounces was in line with our plan. We expect to see progressive improvements as we move through the year as stripping activity opens up progressively higher-grade ore through to Q4 later on this year. All-in sustaining costs on a royalty-adjusted basis also came in towards the lower end of our guidance in the quarter. This performance translated into a record free cash flow of $613 million, that's equivalent to $2,176 per ounce produced. That's a 29% increase over the prior quarter.
Speaker #4: Thanks, Jack, and welcome to everyone joining us on the call today. Now, Q1 2026 was a record quarter for ENDAVOUR, with a strong operational performance and elevated gold price underpinning a very strong financial result.
Speaker #4: Production of 282,000 ounces was in line with our plan, and we expect to see progressive improvements as we move through the year as stripping activity opens up progressively higher grade ore through to Q4 later on this year.
Speaker #4: While all in sustaining costs on a royalty-adjusted basis, also came in towards the lower end of our guidance in the quarter. This performance translated into a record free cash flow of $613 million.
Speaker #4: And that's equivalent to 2,176 per ounce produced, that's a 29% increase over the prior quarter. Through the year, we'll continue to focus on our margins and maximizing free cash flow from every ounce that we produce.
Ian Cockerill: Through the year, we'll continue to focus on our margins and maximizing free cash flow from every ounce that we produce. This free cash generation transformed our balance sheet. We moved from net debt of $158 million in the previous quarter to now a net cash position of $405 million at the end of this quarter, a $563 million swing in just three months. Given the strong balance sheet position and our outlook, we're gonna look to increase our shareholder returns through supplemental dividends within our H1 2026 dividend announcement and through continued opportunistic share buybacks. At prevailing gold prices, we expect supplemental returns to be at least double our $1 billion minimum commitment over the next three years.
Speaker #4: This free cash generation transformed our balance sheet. We moved from net debt of $158 million in the previous quarter to now a net cash position of $405 million at the end of this quarter, a $563 million swing in just three months.
Speaker #4: Given the strong balance sheet position and our outlook, we're going to look to increase our shareholder returns through supplemental dividends within our H1 2026 dividend announcement and through continued opportunistic share buybacks.
Speaker #4: A prevailing gold prices we expect supplemental returns to at least double to be at least double our $1 billion minimum commitment over the next three years.
Ian Cockerill: On organic growth, as we announced last week, the Assafou DFS confirms a high-quality, long-life asset that has very strong project economics. Early works are underway, and we're targeting a final investment decision before the end of this year. On the exploration front, we're accelerating resource definition of our Vindaloo Deep target, and we expect to deliver main resource in H1 of this year. Simultaneously, our new ventures exploration program continues to expand our exploration footprint into the most prospective tier one gold provinces with the latest strategic investment into Guyana. I'll take you through each of these areas in a bit more detail. On slide 7, you see production was 282,000 ounces, down from Q4 due to planned lower grades mined and processed, but in line with the mine sequence.
Speaker #4: On organic growth, as we announced last week, the Asset Food DFS confirms a high-quality long-life asset that has very strong project economics. Early works are underway, and we're targeting a final investment decision before the end of this year.
Speaker #4: On the exploration front, we're accelerating resource definition of our Vindaloo Deeps target, and we expect to deliver made-in-resource in the first half of this year.
Speaker #4: Simultaneously, our new ventures exploration program continues to expand our exploration footprint into the most prospective Tier 1 gold provinces, with the latest strategic investment into Guyana.
Speaker #4: I'll now take you through each of these areas in a bit more detail. On slide 7, you see production was 282,000 ounces. Down from Q4 due to planned lower grades mined and processed, but in line with the mine sequence.
Ian Cockerill: All-in sustaining costs were higher in the quarter, largely due to higher gold price-driven royalty costs, with some small impacts from the stripping activity and the higher power costs at Wana. Despite the higher costs, our all-in sustaining margin of $2,976 an ounce was $751 per ounce higher than in Q4 as margins continue to consistently expand alongside the higher gold prices. On slide 8, on the full-year guidance, you can see group production and all-in sustaining costs remain on track to achieve guidance.
Speaker #4: All in sustaining costs were higher in the quarter, largely due to higher gold price-driven royalty costs, with some small impacts from the stripping activity and the higher power costs at miner.
Speaker #4: But despite higher costs, our all in sustaining margin of 2,976 an ounce was 751 per ounce higher than in Q4, as margins continue to consistently expand alongside the higher gold prices.
Speaker #4: On slide 8, on the full-year guidance, you can see group production and all in sustaining costs remain on track to achieve guidance. The Q1 production of 282,000 ounces represents approximately 26% of the low end of our guidance range, and we're expecting higher production in the second half of the year peaking in Q4 as per our planned mining sequence.
Ian Cockerill: The Q1 production of 282,000 ounces represents approximately 26% of the low end of our guidance range. We're expecting higher production in H2, peaking in Q4 as per our planned mining sequence. On costs, while Q1 all-in sustaining costs of $1,834 an ounce sits slightly above the guidance range, this reflects higher royalty costs as a direct result of the rising gold price. On a gold price-adjusted basis back to our budgeted level, underlying all-in sustaining costs of $642 an ounce were in the lower half of the guidance range. Let's say that's based on our $3,000 gold price. On capital, we expect both sustaining and non-sustaining capital to be weighted towards the first 3 quarters of the year, aligned with our stripping program.
Speaker #4: On costs, while first quarter all in sustaining costs of 1,834 an ounce, sits slightly above the guidance range, this reflects higher royalty costs as a direct result of the rising gold price.
Speaker #4: On a gold price-adjusted basis, back to our budgeted level, underlying all in sustaining costs of 642 an ounce were in the lower half of the guidance range, and that's based on our 3,000 gold price.
Speaker #4: On capital, we expect both sustaining and non-sustaining capital to be weighted towards the first three quarters of the year, aligned with our stripping program.
Ian Cockerill: Growth capital of $500 to 100 million is now expected to support early works at Assafou, mostly in the second half of the year. Overall, we're confident in our full-year outlook and expect to see improvements throughout the year. Free cash flow reached a record $613 million in Q1, up 29% from Q4, and equivalent to $2,176 per ounce of gold produced. We remain focused on maximizing free cash flow for every ounce that we produce. As operational performance improves throughout the year, we expect to at least partially offset some of the impact of higher taxes in Q2 and Q3.
Speaker #4: While growth capital of 500 to 100 million is now expected to support early works at Asset Food, mostly in the second half of the year.
Speaker #4: So overall, we're confident in our full-year outlook and expect to see improvements throughout the year. Free cash flow reached a record 613 million in Q1, up 29% from Q4, an equivalent to 2,176 per ounce of gold produced.
Speaker #4: But we remain focused on maximizing free cash flow for every ounce that we produce and as operational performance improves throughout the year, we expect to at least partially offset some of the impact of higher taxes in Q2 and Q3.
Ian Cockerill: The strong free cash flows enabled us to rapidly deleverage the balance sheet in Q1, reducing net debt by $563 million and moving to a net cash position of $405 million at quarter end. This provides the financial flexibility to deliver our world-class organic growth project, Assafou, whilst we pay out sector-leading returns to shareholders. As you know, our leverage target through the cycle is less than 0.5 times net debt to adjusted EBITDA. That remains the case, we do not intend to maintain a very large net cash position either. We'll stick to our capital allocation model and look to increase shareholder returns while prioritizing Assafou's development as well as our exploration program. On slide 11, our shareholder returns program is quite clear.
Speaker #4: The strong free cash flows enabled us to rapidly deleverage the balance sheet in Q1, reducing net debt by 563 million and moving to a net cash position of 405 million at quarter end.
Speaker #4: And this provides a financial flexibility to deliver our world-class organic growth project Asset Food whilst we pay out sector-leading returns to shareholders. As you know, our leverage target through the cycle is less than 0.5 times net debt to adjusted EBITDA, that remains the case, but we do not intend to maintain a very large net cash position either.
Speaker #4: So we'll stick to our capital allocation model and look to increase shoulder returns while prioritizing Asset Food's development as well as our exploration program.
Speaker #4: On slide 11, our shoulder returns program is quite clear. Between 26 and 28, we're committed to return at least $1 billion to shareholders, and we'll maintain this commitment down to a gold price of $3,000 an ounce.
Ian Cockerill: Between 2026 and 2028, we're committed to return at least $1 billion to shareholders, and we'll maintain this commitment down to a gold price of $3,000 an ounce. At prevailing gold prices, we could return more than double that minimum commitment to shareholders. Given the strong gold prices so far this year, we're on track to return a significant supplemental dividend when we announce our H1 2026 dividend in our Q2 results. So far this year, we've already completed $54 million of share buybacks, and we'll continue opportunistically and make up a significant component of our supplemental returns. Onto our sector-leading organic growth on slide 12. Now, last week, we published the results of our definitive feasibility study, strengthening our confidence in the Assafou project and its potential to transform our portfolio, driving production growth, lowering costs, and delivering long-term value.
Speaker #4: And a prevailing gold prices, we could return more than double that minimum commitment to shareholders. Given the strong gold prices so far this year, we're on track to return a significant supplemental dividend when we announce our H1 26 dividend in our Q2 results.
Speaker #4: So far this year, we've already completed 54 million of share buybacks, and we'll continue opportunistically and make up a significant component of our supplemental returns.
Speaker #4: Onto our sector-leading organic growth on slide 12. Now, last week, we published the results of our definitive feasibility study, strengthening our confidence in the Asset Food project, and its potential to transform our portfolio driving production growth, lowering costs, and delivering long-term value.
Ian Cockerill: We discovered Assafou for $13 million in 2022. Based on the DFS at a $4,000 per ounce gold price, the project now has an after-tax value of over $5 billion with an internal rate of return of 55%. Now, that's value creation and reflects the highly prospective region and the ability to accelerate projects quickly from discovery to production. The Assafou project will be relatively similar to other mines that we've built, albeit bigger. The DFS outlines a 5 million tons per annum gravity and CIL processing plant optimized to support a smoother production ramp-up and to add additional redundancy to give optionality to expand the plant in the future as we develop and further expand the resource, the exploration resource, in the immediate vicinity of the mine. Early works are already underway. Procurement of long lead items has started.
Speaker #4: We discovered Asset Food for 13 million in 2022, and based on the DFS at a 4,000 per ounce gold price, the project now has an after-tax value of over 5 billion with an internal rate of return of 55%.
Speaker #4: Now, that's value creation, and reflects the highly prospective region and the ability to accelerate projects quickly from discovery to production. The Asset Food project will be relatively similar to other mines that we've built, albeit bigger.
Speaker #4: The DFS outlines a 5 million tonne per annum gravity and CIL processing plant optimized to support a smoother production ramp-up and to add additional redundancy to give optionality to expand the plant in the future, as we develop and further expand the resource the exploration resource in the immediate vicinity of the mine.
Speaker #4: Early works are already underway; procurement of long-lead items has started, and detailed engineering and design is progressing in key areas. Tenders are already out. We have also launched land compensation negotiations as part of the resettlement action plan, which we need to finalize ahead of starting the resettlement, as this is on the critical path.
Ian Cockerill: Detailed engineering and design is progressing, and key tenders are already out. We have also launched land compensation negotiations as part of the resettlement action plan, which we need to finalize ahead of starting the resettlement, which is on the critical path. We're targeting a final investment decision before the end of this year, and then a construction period of 24 to 30 months. Once construction starts, the resettlement, mining pre-stripping, and ore commissioning are on the critical path to production. The resettlement is required for mining to start, so developing the resettlement action plan is a key part of our early works program.
Speaker #4: We're targeting a final investment decision before the end of this year, and then a construction period of 24 to 30 months. Once construction starts, the resettlement, mining pre-stripping, and all commissioning are on the critical path to production.
Speaker #4: The resettlement is required for mining to start, for developing the resettlement action plan is a key part of our early works program. Asset Food has the potential to be one of our largest lowest-cost assets with the longest mine life.
Ian Cockerill: Assafou has the potential to be one of our largest, lowest cost assets with the longest mine life, capable of producing 320,000 ounces of gold per year at an all-in sustaining cost of $1,026 per ounce over the first 8 years of its planned 16-year mine life. The DFS also reflects our increased confidence in the mine plan, underpinned by nearly 100,000 meters of additional close-spaced drilling. This has increased reserves and resources and introduced maiden proven reserves and measured resources, providing a much higher level of certainty over what we will mine and when, de-risking the ramp-up and early production profile.
Speaker #4: Capable of producing 320,000 ounces of gold per year, at an all in sustaining cost of $1,000 in 26 per ounce over the first eight years of its planned 16-year mine life.
Speaker #4: And the DFS also reflects our increased confidence in the mine plan, underpinned by nearly 100,000 meters of additional close spaced drilling. This is increased reserves and resources and introduced maiden proven reserves and measured resources providing a much higher level of certainty over what we will mine and when, de-risking the ramp-up and early production profile.
Ian Cockerill: Importantly, we see significant exploration upside in the immediate vicinity of the mine that will support continued growth in reserves and resources and further enhance the mine plan over time, with the potential to sustain production higher levels over this period for much longer. Looking at the exploration at Assafou on slide 14. Most of our drilling has been focused on the Assafou deposit itself. We've just started to step out beyond Assafou. We've already identified 20 highly prospective targets on this property that we are prioritizing with a guided $2 million spend for this year. We'll focus on advancing the Pala Trend 3 deposit for in the 2025 maiden resource, defining Pala Trend 2 maiden resource, and exploration drilling at the Pala Trend Southwest and Kume Nagari.
Speaker #4: An importantly, we see significant exploration upside in the immediate vicinity of the mine that will support continued growth in reserves and resources and further enhance the mine plan over time.
Speaker #4: With the potential to sustain production higher levels over this period for much longer. Looking at the exploration at Asset Food on slide 14, most of our drilling has been focused on the Asset Food deposit itself, and we've just started to step out beyond Asset Food.
Speaker #4: We've already identified 20 highly prospective targets on this property that we are prioritizing with a guided $10 million spend for this year. We'll focus on advancing the parlor trend 3 deposit following the 2025 maiden resource, defining parlor trend 2 maiden resource, and exploration drilling at the parlor trend southwest and Kume Nagari.
Ian Cockerill: At Assafou, we've discovered a new and highly fertile mineralized greenstone belt. Through our own land package and our strategic partnership with Koulou Gold, we expect to unlock significantly more value across this belt. Now, Assafou is key to our organic growth outlook. Along increased production at Sabodala and Massawa, we're targeting 27% growth in production to 1.5 million ounces by 2030, with a solid position in the first cost quartile. On slide 16, following the launch of our new exploration strategy late last year, we've increased our exploration guidance to $100 million for this year. We will prioritize adding near mine resources across the portfolio, expanding resources at the Assafou deposit and nearby targets, while advancing new ventures to replenish the longer-term organic project pipeline.
Speaker #4: At Asset Food, we've discovered a new and highly fertile mineralized greenstone belt and through our own land package and our strategic partnership with Kulu Gold, we expect to unlock significantly more value across this belt.
Speaker #4: Now, Asset Food is key to our organic growth outlook and a long increased production at Savadar and Msawa. We're targeting 27% growth in production to 1.5 million ounces by 2030, with a solid position in the first cost quartile.
Speaker #4: On slide 16, following the launch of our new exploration strategy late last year, we've increased our exploration guidance to 100 million for this year, and we will prioritize adding near mine resources across the portfolio expanding resources at the Asset Food deposit and nearby targets.
Speaker #4: Whilst advancing new ventures through replenish the longer-term organic project pipeline. And as you can see on slide 17, we're pleased that we signed a strategic investment of 20 million with Altair for a 9.9% stake.
Ian Cockerill: As you can see on slide 17, we're pleased that we signed a strategic investment of $20 million with Altair for a 9.9% stake. The Guyana Shield is one of the four tier-1 gold provinces that we are targeting through our greenfield and new ventures program. Given the Guyana Shield is a continuity of the West African Birimian, we have a good understanding of the geology as well as the structural context. Now, Altair has one of the largest consolidated land packages in Guyana, covering highly prospective ground to the south of recent significant discoveries at Oko West and Oko Gagni along the same shear zone. We're excited about the prospectivity, and the proceeds from our investment will be deployed to accelerate these exploration programs. Before I hand over to Guy, I just wanted to touch shortly on ESG.
Speaker #4: The garnish yield is one of the four tier one gold provinces that we are targeting through our greenfield and new ventures program, and given the garnish yield is a continuity of the West African Peruvian, we have a good understanding of the geology as well as the structural context.
Speaker #4: Now, Altair has one of the largest consolidated land packages in Ghana, covering highly prospective ground to the south of recent significant discoveries at Oko West and Oko Ghani, along the same shear zone.
Speaker #4: So we're excited about the prospectivity and the proceeds from our investment will be deployed to accelerate these exploration programs. Before I hand over to Guy, I just wanted to touch shortly on ESG.
Ian Cockerill: As a long-term partner in West Africa, we will always strive to deliver sustainable value to all of our stakeholders. In 2025 alone, we contributed $2.8 billion to host economies, and over the last 6 years, we've contributed $12.9 billion. This consistent delivery of value, alongside continued improvements in governance, stakeholder engagement, and ESG management systems, is increasingly being recognized. As a member now of the Extractive Industries Transparency Initiative, we met all transparency expectations in 2025, performing strongly relative to our peer group. In addition, our ISS rating has been upgraded, placing us in the top 10% of our sector, in line with the other strong ESG ratings we continue to maintain. With that introduction, let me hand you over to Guy, who can take you through the Q1 financials. Guy, over to you.
Speaker #4: As a long-term partner in West Africa, we will always strive to deliver sustainable value to all of our stakeholders. In 2025 alone, we contributed $2.8 billion to host economies, and over the last six years, we've contributed $12.9 billion.
Speaker #4: This consistent delivery of value alongside continued improvements in governance, stakeholder engagement, and ESG management systems is increasingly being recognized. And as a member now of the Extractive Industries Transparency Initiative, we met all transparency expectations in 2025, performing strongly relative to our peer group.
Speaker #4: In addition, our ISS rating has been upgraded placing us in the top 10% of our sector in line with the other strong ESG ratings we continue to maintain.
Speaker #4: And with that introduction, let me hand you over to Guy, who can take you through the Q1 financials. Guy, over to you.
Guy Young: Thanks, Ian, and hello to everyone. As Ian said, Q1 was a very strong quarter financially, driven by the higher gold price and consistency in our operational performance. The realized gold price increased by $937 an ounce to $4,810 an ounce, supporting our record financial performance. Whilst quarter-on-quarter production was down slightly and costs were up partially as a result, adjusted EBITDA increased by 29% and adjusted net earnings increased by 64%. On the cash flow side, operating cash flows were up 21% and free cash flow was up 29%. On slide 21, you can see that adjusted EBITDA reached a record $880 million, up 29% quarter over quarter, and our adjusted EBITDA margin also increased significantly by some 12% to 65%.
Speaker #2: Thanks, Ian. And hello to everyone. As Ian said, Q1 was a very strong quarter financially, driven by the higher gold price and consistency in our operational performance.
Speaker #2: The realized gold price increased by 937 an ounce to 4,810 an ounce, supporting our record financial performance. Whilst quarter-on-quarter production was down slightly and costs were up partially as a result, adjusted EBITDA increased by 29%, and adjusted net earnings increased by 64%.
Speaker #2: On the cash flow side, operating cash flows were up 21% and free cash flow was up 29%. On slide 21, you can see that adjusted EBITDA reached a record 880 million, up 29% quarter over quarter, and our adjusted EBITDA margin also increased significantly, by some 12% to 65%.
Guy Young: The higher EBITDA reflects the combination of higher gold prices and lower operating expenses due to the lower production, while the improved margin demonstrates our ability to leverage the benefit of increased gold prices in our earnings. Moving on to slide 22. Operating cash flow was up 21% to $737 million compared to Q4 2025, due to higher gold prices and lower operating expenses, despite increased cash taxes and an increased working capital outflow related to trade and payables, inventory, and receivables. Looking now at the operating cash flow improvement in some more detail on slide 23. The increase in the realized gold price added $169 million to operating cash flow. Gold sold decreased by 24,000 ounces to 278,000 ounces in Q1, which impacted operating cash flow by $99 million.
Speaker #2: The higher EBITDA reflects the combination of higher gold prices and lower operating expenses due to the lower production, while the improved margin demonstrates our ability to leverage the benefits of increased gold prices in our earnings.
Speaker #2: Moving on to slide 22, operating cash flow was up 21% to 737 million dollars, compared to Q4 2025, due to higher gold prices and lower operating expenses, despite increased cash taxes and an increased working capital outflow related to trade and payables, inventory, and receivables.
Speaker #2: Looking now at the operating cash flow improvement and some more detail on slide 23. The increase in the realized gold price added 169 million to operating cash flow.
Speaker #2: Gold sold decreased by 24,000 ounces to 278,000 ounces in Q1, which impacted operating cash flow by 99 million. Operating and other expenses were 156 million lower than Q4, due to a number of factors.
Guy Young: Operating and other expenses were $156 million lower than Q4 due to a number of factors. Firstly, lower nominal mining and processing costs on the back of the lower production. The completion of the hedging program last year, where we recorded a loss in Q4, and these were partially offset by higher royalties. Income taxes paid increased by $23 million to $46 million, reflecting the timing of corporate income tax payments as expected and provisional withholding tax payments at Sabodala and Massawa. On that point, please note for the full year, we've increased our cash tax guidance from $600 million to $700 million. To the revised total of $660 million to $770 million, reflecting higher withholding tax payments related to an increase in cash repatriation on the back of higher gold prices. Cash income tax guidance is unchanged for the year.
Speaker #2: Firstly, lower nominal mining and processing costs on the back of the lower production. The completion of the hedging program last year, where we recorded a loss in Q4.
Speaker #2: And these were partially offset by higher royalties. Income taxes paid increased by 23 million to 46 million, reflecting the timing of corporate income tax payments as expected, and provisional withholding tax payments at Sabadar and Msawa.
Speaker #2: On that point, please note for the full year, we've increased our cash tax guidance from 600 to 700 million, to the revised total of 660 to 770 million dollars, reflecting higher withholding tax payments related to an increase in cash repatriation on the back of higher gold prices.
Speaker #2: Cash income tax guidance is unchanged for the year. Finally, working capital was a $91 million outflow—a $75 million increase on last quarter's. Key drivers of the increase were a reduction in payables, which we expect in Q1, along with increased VAT and stockpiles.
Guy Young: Working capital was a USD 91 million outflow, a USD 75 million increase on last quarter's. Key drivers of the increase were a reduction in payables, which we expect in Q1, along with increased VAT and stockpiles. Turning to VAT first. VAT balances increased in Q1. Sorry. Whilst VAT balances increased in Q1, we've seen some positive developments in April with a resumption in direct VAT reimbursements in Burkina Faso, a reduction in processing times in Senegal, and high levels of reimbursements in Côte d'Ivoire, which, if maintained, will positively impact our Q2 working capital. The stockpile increase is due to some deferral and stripping at Houndé and the concomitant stockpile drawdown, along with higher mining volumes at Ity. Both these trends are expected to normalize through the rest of the year.
Speaker #2: Turning to VAT first, VAT balances increased in Q1, sorry, whilst VAT balances increased in Q1, we've seen some positive developments in April, with a resumption in direct VAT reimbursements in Burkina Faso, a reduction in processing times in Senegal, and higher levels of reimbursements in Côte d'Ivoire, which, if maintained, will positively impact our Q2 working capital.
Speaker #2: The stockpile increase is due to some deferral in stripping at Hyundai and the concomitant stockpile drawdown. Along with higher mining volumes at Iti. Both these trends are expected to normalize through the rest of the year.
Guy Young: Although less material, we have built up supplies of some critical consumables like fuel and explosives to help mitigate any potential impacts from the closure of the Straits of Hormuz. Turning to slide 24. Free cash flow reached a record $613 million in Q1, up 29% from Q4, despite the lower production and higher AISC, taxes, and working capital outflow. Free cash flow has increased each quarter since Q2, 2025, as we are benefiting from higher gold prices and successfully converting the majority of additional margin into free cash. The outlook remains very strong at current gold prices, particularly in H2 of this year. I would remind you, however, that for Q2, we expect free cash flow to be lower as a result of seasonal tax payments.
Speaker #2: Although less material, we have built up supplies of some critical consumables, like fuel and explosives, to help mitigate any potential impacts from the closure of the Straits of Hormuz.
Speaker #2: Turning to slide 24, free cash flow reached a record 613 million in Q1, up 29% from Q4, despite the lower production and higher ASIC taxes and working capital outflow.
Speaker #2: Free cash flow has increased each quarter since Q2 2025, as we are benefiting from higher gold prices and successfully converting the majority of additional margin into free cash.
Speaker #2: The outlook remains very strong at current gold prices, particularly in H2 of this year. I would remind you, however, that for Q2, we expect free cash flow to be lower as a result of seasonal tax payments.
Guy Young: This is normal regional tax seasonality with higher corporate income and withholding tax payments, representing approximately 65% of our full-year payments to be paid in the quarter. On slide 25, our cash flow has significantly improved our net debt position, as shown here. We started the quarter with net debt of $158 million and ended with $405 million of net cash. As detailed on the previous two slides, operating activities generated $737 million of cash flow in the quarter. Investing outflows were $125 million, including $75 million of sustaining capital, $45 million of non-sustaining capital, and $6 million of growth capital. Financing activities included a net $75 million drawdown on the revolving credit facility alongside $27 million of share buybacks, $8 million of lease payments, and $4 million of financing fees.
Speaker #2: This is normal regional tax seasonality with higher corporate income and withholding tax payments, representing approximately 65% of our full year payments, to be paid in the quarter.
Speaker #2: On slide 25, our cash flow has significantly improved our net debt position, as shown here. We started the quarter with net debt of 158 million and ended with 405 million of net cash.
Speaker #2: As detailed on the previous two slides, operating activities generated 737 million of cash flow in the quarter. Investing outflows were 125 million, including 75 million of sustaining capital, 45 million of non-sustaining capital, and 6 million of growth capital.
Speaker #2: Financing activities included a net 75 million drawdown on the revolving credit facility, alongside 27 million of share buybacks, 8 million of lease payments, and 4 million of financing fees.
Guy Young: All of which leaves us in a net cash position of $405 million at the end of the quarter. As Ian mentioned earlier, we do not intend to build a large net cash position, and we'll continue to follow our capital allocation model of increased shareholder returns after prioritizing asset for development and exploration requirements. Finally, moving on to net earnings. Earnings from mining operations increased to $776 million, reflecting the higher gold price, partly offset by royalties and sustaining capital. Other expenses decreased, with the higher Côte d'Ivoire royalties in the prior quarter now being reported as part of our cost of sales. Deferred tax was a $97 million expense compared to a $53 million recovery in the prior quarter.
Speaker #2: All of which leaves us in a net cash position of 405 million at the end of the quarter. As Ian mentioned earlier, we do not intend to build a large net cash position and will continue to follow our capital allocation model of increased shareholder returns, after prioritizing asset-free development and exploration requirements.
Speaker #2: Finally, moving on to net earnings. Earnings from mining operations increased to 776 million, reflecting the higher gold price partly offset by royalties and sustaining capital.
Speaker #2: Other expenses decreased, with the higher Côte d'Ivoire royalties and the prior quarter now being reported as part of our cost of sales. Deferred tax was a 97 million expense, compared to a 53 million recovery in the prior quarter.
Guy Young: The change reflects the accrual of additional withholding taxes ahead of expected increased cash upstreaming as a result of the higher gold prices, as I referenced earlier. Adjusted net earnings were $442 million for the quarter or $1.53 per share, up 65% from Q4. Thank you, I'll now hand over to Djaria to walk you through the operating performance.
Speaker #2: The change reflects the accrual of additional withholding taxes, ahead of expected increased cash upstreaming as a result of the higher gold prices as I referenced earlier.
Speaker #2: Adjusted net earnings were 442 million for the quarter, or $1.53 per share, up 65% from Q4. Thank you, and I'll now hand over to Jaria to walk you through the operating performance.
Djaria Traore: Thank you, Djaria, and hello, everyone. Before discussing our operating results, I want to talk about safety, which remains our top priority. We were deeply saddened that one of our contractor colleagues suffered a fatal injury at Wana on 6 March, as we have previously reported. Following the incident, we've launched a comprehensive investigation. We've identified several areas for improvement, particularly around contractor onboarding, supervision, and ongoing training. These actions are now being implemented across all our operations. Despite this incident, our total recordable injury frequency rate of 0.72 on a trailing twelve-month basis has improved during the quarter, remains one of the lowest in the sector. We continue all our efforts to eliminate fatal risks. Before turning to the mine-by-mine review, I wanted to touch on our Q1 performance compared to guidance on slide 29.
Speaker #1: Thank you, Gary. And hello everyone. Before discussing our operating results, I want to talk about safety, which remains our top priority. We were deeply saddened that one of our contractor colleagues suffered a fatal injury at Mana on 6th of March, as we have previously reported.
Speaker #1: Following the incident, we've launched a comprehensive investigation and we've identified several areas for improvement, particularly around contractor onboarding, supervision, and ongoing training. These actions are now being implemented across all our operations.
Speaker #1: Despite this incident, our total recordable injury frequency rate of 0.72 on a trailing 12-month basis has improved during the quarter, and remains one of the lowest in the sector.
Speaker #1: And we continue eliminate fatal risks. Before turning to the mine-by-mine review, I wanted to touch on our first quarter performance. Compared to guidance on slide 29, as Ian mentioned, we are on track to meet full year guidance with performance weighted towards H2.
Djaria Traore: As Ian mentioned, we are on track to meet full-year guidance with performance weighted towards H2 as production and costs are expected to improve at Houndé, Kalana, and Ity in H2, and this in line with the mine plans. For Q1, group production was lower compared to last quarter of 2025 due to lower grades at Sabodala-Massawa, Kalana, and Ity. Again, in line with the mining sequence. The AISC were higher this quarter due to gold sales, higher royalty costs, and increased stripping activity. Overall, we are pleased with our progress to date. Starting with Houndé on slide 13. Production increased as we mined and processed higher grades from the Kari West and Vendome main pits.
Speaker #1: As production and costs are expected to improve at Hyundai, Mana, and Iti in the second half of the year, and this in line with the mine plans.
Speaker #1: For quarter one, group production was lower compared to last quarter of 2025, due to lower grades at Sabadola Masawa, Mana, and Iti. But again, in line with the mining sequence.
Speaker #1: The oiling sustaining costs were higher this quarter due to gold sales, higher royalty costs, and increased stripping activity. Overall, we are pleased with our progress to date.
Speaker #1: Starting with Hyundai on slide 30, production increased as we mine and process higher grades, from the Carry West and Vandalumen Pits. Oiling sustaining costs have increased.
Djaria Traore: All-in Sustaining Costs have increased, but largely due to higher royalty costs at higher realized gold prices and to higher sustaining capital from increased waste stripping at Kari West and heavy mining equipment improvement. We will continue stripping at the Vendome main pit pushback, which should support access to better grade to improve production through the year, with costs only expected to realize the benefits later in the year once the majority of the stripping has been completed. On slide 31, at Ity, production decreased as we mined lower grades from the Bakatu and Walter pits, while we also processed lower tons due to scheduled mill maintenance in Q1. All-in Sustaining Costs at Ity has improved due to lower sustaining capital and the benefit of by-product silver sales, despite the higher gold prices and lower gold sales.
Speaker #1: But largely due to higher royalty costs at higher realized gold prices. And to higher sustaining capital, from increased wet stripping at Carry West and heavy mining equipment improvement.
Speaker #1: We will continue stripping at the Vandalumen Pit pushback, which will support access to better grade to improve production through the year. With costs only expected to realize the benefits later in the year, once the majority of the stripping has been completed.
Speaker #1: On slide 31, at Iti, production decreased as we mine lower grades, from the bucket tool and Walter Pits. While we also process lower tons, due to scheduled mail maintenance in quarter one.
Speaker #1: Oiling sustaining costs at Iti has improved. Due to lower sustaining capital, and the benefits of byproduct silver sales, despite the higher gold prices and lower gold sales.
Djaria Traore: Similar to Houndé, Ity's performance is expected to be weighted towards H2 as blended grades are expected to increase through the year. On slide 32, you can see that production at Kalana was lower quarter-over-quarter due to lower grades and the wind down on mining activity in the Sewe underground deposit, where the reserves are nearly depleted. Similarly, all-in sustaining costs was higher due to the lower levels of productions and sales, as well as higher royalty costs related to gold prices and the continued use of higher cost self-generated power. On cost, we expect that the grid power availability will improve during Q2 as the grid in Burkina Faso adds new capacity.
Speaker #1: Similar to Hyundai, it is performance is expected to be weighted towards H2, as blended grades are expected to increase through the year. On slide 32, you can see that production at Mana was lowered quarter over quarter, due to lower grades and the wind down on mining activity in the Sioux Underground Deposit.
Speaker #1: Where the reserves are nearly depleted. Similarly, oiling sustaining costs was higher due to the lower levels of production and sales. As well as higher royalty costs related to gold prices.
Speaker #1: And the continued use of higher cost self-generated power. On cost, we expect that the grid power availability will improve during quarter two. As the grid in Burkina Faso adds new capacity.
Djaria Traore: We are also continuing to improve the resilience of our grid connection at Wana through the automation of the underground ventilation system and the installation of a new transformer and capacitor bank, which is expected to improve productivity and operating cost. In H2, the mining feed from the Wana underground deposit is expected to supplemented with ore from the open pits of Banakem, supporting slightly higher grades, throughput, and production. Moving to Sabodala-Massawa on slide 33. Production decreased due to lower grades mined and processed compared to Q4 2025, in line with the mine sequence. All-in sustaining costs increased due to lower gold sales, higher royalty costs related to the increased gold price, and higher sustaining capital. As 2026 progresses, we expect to see steady performance from the CIL plants as improved grades are offset by slightly lower throughput.
Speaker #1: We are also continuing to improve the resilience of our grid connection at Mana, through the automation of the underground ventilation system, and the installation of a new transformer and capacitor bank.
Speaker #1: Which is expected to improve productivity and operating costs. In H2, the mining feed from the Warner Underground Deposit is expected to supplemented with oil from the open pit of Banakem, supporting slightly higher grades throughput and production.
Speaker #1: Moving to Sabadola Masawa on slide 33. Production decreased due to lower grades mine, and processed compared to the quarter four 2025. But in line with the mine sequence.
Speaker #1: Oiling sustaining costs increased due to lower gold sales, higher royalty costs related to the increased gold price, and higher sustaining capital. As 2026 progresses, we expect to see steady performance from the CIL plants as improved grades are offset by slightly lower throughput.
Djaria Traore: While on the BIOX side, we expect continuous improvement in throughput and recovery as the ongoing optimizations work continues. At the end of Q1, we published a technical report for Sabodala-Massawa, and it is also important to remember that this is a conservative reserve-only outlook that we intend to optimize and smooth out through additional explorations and sequencing. The study outlines significant production growth into the high 300,000 ounces by year 2029, with an average production over the next 5 years of 335,000 ounces per annum. The significant increase in production is expected to be driven by the ramp-up of underground mining at the Karekunda and Golouma deposits. As the mining ramps up, it is projected to deliver higher grade to the CIL plants, coupled with high grades to the BIOX plants from the Massawa North Zone deposits.
Speaker #1: While on the bioc side, we expect continuous improvement in throughput and recovery. As the ongoing optimizations works continues. At the end of quarter one, we published technical report for Sabadola Masawa.
Speaker #1: And it's also important to remember that this is a conservative reserve-only outlook. That we intend to optimize and smooth out through additional explorations and sequencing.
Speaker #1: The study outline significant production growth into the high 300,000 ounces. By year 2029. With an average production over the next five years of 335,000 ounces per annum.
Speaker #1: The significant increase in production is expected to be driven by the ramp-up of underground mining at the Karakunda and Guloma Deposit. As the mining ramps up, it's projected to deliver higher grade to the CIL plants: copper with high grade through the bioc plant from the Masawa North Zone Deposit.
Djaria Traore: We will expect to smooth this production profile through sequencing of Massawa North Zone and conversion of additional reserves, which will allow us to achieve and maintain production in the mid 300,000 ounces range for longer. Lastly, turning to Lafigué on slide 35. Production increased as we mined higher grades from the main pits. We also benefited from improved recovery, which have increased following the completion of processing plant optimizations project. All-in sustaining costs have also increased due to significant increases in sustaining capital related to the planned waste stripping this year and higher royalty costs due to the higher realized gold prices and the increased royalty rates. As stripping continues, we expect grades to decrease through the next quarter before again improving as we move into the next pushback in the H2 of 2026.
Speaker #1: We will expect to smooth this production profile through sequencing of Masawa North Zone and conversion of additional reserves, which would allow us to achieve and maintain production in the mid-300,000 ounces range for longer.
Speaker #1: Lastly, turning to Lafige on slide 35. Production increased as we mine higher grades from the main pits. We also benefited from improved recovery, which have increased following the completion of processing plant optimizations project.
Speaker #1: Oiling sustaining costs have also increased due to significant increases in sustaining capital, related to the planned wet stripping this year. And higher royalty costs due to the higher realized gold prices and the increased royalty rates.
Speaker #1: As stripping continues, we expect grades to decrease through the next quarter. Before again improving as we move into the next pushback and the second half of 2026.
Djaria Traore: Overall, as you can see, the performance has been consistent and predictable during Q1. As a result, we're well-positioned for the rest of the year. Thank you for your time, and I will hand over to Ian.
Speaker #1: Overall, as you can see, the performance has been consistent and predictable during quarter one. And as a result, we're well positioned for the rest of the year.
Speaker #1: Thank you for your time, and I will hand over to Ian.
Ian Cockerill: Thank you, Djaria. As you've heard, we're off to a strong start operationally. We've delivered another record quarter financially. Our key priorities from here are quite clear. Firstly, deliver on production and cost guidance. Secondly, maximize free cash flow for every ounce that we produce to ensure an optimized balance sheet so that we can deliver sector-leading organic growth and sector-leading shareholder returns whilst remaining a trusted partner to our host countries. We certainly look forward to updating you on our progress throughout the year. With that, I say thank you, and now I'll hand back to the operator, who will be in a position to open up the Q&A. Thanks very much.
Speaker #2: Thank you, Jeria. As you've heard, we're off to a strong start operationally. We've delivered another record quarter financially. But our key priorities from here are quite clear.
Speaker #2: Firstly, deliver on production and cost guidance. Secondly, maximize free cash flow for every ounce that we produce to ensure and optimize balance sheet. So that we can deliver sector-leading organic growth and sector-leading shareholder returns.
Speaker #2: Whilst remaining a trusted partner to our host countries. We certainly look forward to updating you on our progress throughout the year. With that, I say thank you.
Speaker #2: And now I'll hand back to the operator who will be in a position to open up the Q&A. Thanks very much.
Operator: Thank you. Alain, your line is open.
Speaker #3: Thank you. To ask the question now, please press star one and one on your telephone and wait for your name to be announced. To withdraw your question, please press star one and one again.
Speaker #3: There may be a short pause while we compile the Q&A roster. Once again, that's star one and one. For questions. We will now take our first question from the line of Alan Gabriel of Morgan Stanley.
Speaker #3: Please ask your question, Alan. Your line is open.
Alain Gabriel: Yes, good afternoon, thank you for taking my questions. The first question is for you, Ian. The cash balance is building very rapidly on today's gold prices, and you can easily finance Assafou, meet all your capital returns commitments, and still have significant cash piles that is left. Although that's a good problem to have, it also brings some scrutiny on capital allocation. How are you thinking about M&A at this point in the cycle, and do you think you have the capacity to take on a sizable project like Assafou and pursue M&A at the same time? That's my first question.
Speaker #4: Yes, good afternoon. And thank you for taking my questions. The first question is for you, Ian. The cash balance is building very rapidly on today's gold prices.
Speaker #4: And you can easily finance ASAFU, meet all your capital returns commitments, and still have significant cash pile that is left. Although that's a good problem to have, it also brings some scrutiny on capital allocation.
Speaker #4: So how are you thinking about M&A at this point in the cycle? And do you think you have the capacity to take on a sizable project like ASAFU and pursue M&A at the same time?
Speaker #4: That's my first question.
Ian Cockerill: Thanks, Alan. Yeah, look, it's a bit of a Hollywood problem, you know, having the cash, and, you know, the already well-defined organic growth pipeline. You know, irrespective of, you know, how much cash we have on our balance sheet, you know, we are, as you know, we're really focused on growing this business in an organic fashion. We have lots of opportunities to do that. That's our principal focus. Our other focus is obviously on the exploration side, and I think the investment in Altair gives you another clear indication. You know, that's where we would, you know, we're happy to sort of put our money. We are patient capital investors. We seek, you know, the right opportunities to go in to create, you know, a, you know, really outsized value returns to shareholders.
Speaker #2: Thanks, Alan. Yeah, look, it's a bit of a Hollywood problem. Having the cash and the already well-defined organic growth pipeline. Irrespective of how much cash we have on our balance sheet, we are as you know, we're really focused on growing this business in an organic fashion.
Speaker #2: We have lots of opportunities to do that. That's our principal focus. Our other focus is obviously on the exploration side and I think the investment in Altair.
Speaker #2: Gives you another clear indication. That's where we would we're happy to sort of put our money. We are patient capital investors. We seek the right opportunities to go in to create really outsized value returns to shareholders.
Ian Cockerill: It would be nice to do it, you know, every quarter, but, you know, we're taking a longer term perspective on those. With respect to M&A, you know, we constantly look, and if the right opportunity came along, obviously, we would look at it. To date, you know, we've looked at several opportunities, but they've, you know, nothing has eventually turned out to be positive. We're not averse to M&A, but our principal focus obviously is on organic growth.
Speaker #2: It would be nice to do it every quarter. But we're taking a longer-term perspective on those. With respect to M&A, we constantly look and if the right opportunity came along, obviously we would look at it.
Speaker #2: To date, we've looked at several opportunities, but they've nothing has eventually turned out to be positive. But we're not averse to M&A. But our principal focus obviously is on organic growth.
Alain Gabriel: Thank you. That's very clear. The second question is probably for Guy on the costs of or the energy cost impact on the business. Maybe if you can talk to us a little bit more about the diesel exposure across the group. How do you see the conflict impacting your cost base? Are you seeing any supply stress emerge on the supply chain? Because you seem to have managed this very well in Q1. How are you thinking going forward of these dynamics? Thank you.
Speaker #4: Thank you. That's very clear. And the second question is probably for Guy on the costs of or the energy cost impact on the business.
Speaker #4: Maybe if you can talk to us a little bit more about the diesel exposure across the group. How do you see the conflict impacting your cost base?
Speaker #4: Are you seeing any supply stress emerge on the supply chain? Because you seem to have managed this very well in Q1. So how are you thinking going forward of these dynamics?
Speaker #4: Thank you.
Guy Young: Hi, Alain. Let's just talk a little bit about the difference in our minds anyway, between the security of supply and then the pricing risk. To the first part, security of supply, as a general comment across all of our sites, we do not rely particularly heavily on fuel or any other related consumables that transit through the Strait of Hormuz. We've got refineries that we rely on, broadly regional, but in particular in Côte d'Ivoire and Senegal, and the crude input into those refineries is predominantly coming from Nigeria. We do have some other refined products that are coming from North and Western Europe.
Speaker #2: Hi, Alan. So let's just talk a little bit about the difference. In In our minds anyway, between the security of supply and then the pricing risk.
Speaker #2: So to the first part, security of supply, as a general comment across all of our sites, we do not rely particularly heavily on fuel or any other related consumables that transit through the Strait of Hormuz.
Speaker #2: So we've got refineries that we rely on broadly regional. But in particular in Côte d'Ivoire and Senegal. And the crude inputs into those refineries is predominantly coming from Nigeria.
Speaker #2: We do have some other refined products that are coming from North and Western Europe. But as a result of all of that, and in discussion with our suppliers and the test of their business continuity planning, we don't perceive security of supply to be the key issue.
Guy Young: As a result of all of that, and in discussion with our suppliers and a test of their business continuity planning, we don't perceive security of supply to be the key issue. It is what you've referred to, more a question of pricing. When we look across the portfolio, and again, just bearing in mind the fuel is anywhere between 10% and 15% of operating costs, so it's significant, but not that material. When we run numbers bearing in mind local pricing, then we come up with a $10 per ounce AISC impact, roughly, for every $10, on the price of a barrel of oil. That is what we've seen so far, and when we look forward into the remainder of the year, that's what we're anticipating.
Speaker #2: It is what you've referred to more a question of pricing. When we look across the portfolio, and again, just bearing in mind that fuel is anywhere between 10 and 15 percent of operating costs.
Speaker #2: So it's significant, but not that material. When we run numbers bearing in mind local pricing, then we come up with a $10 per ounce ASIC impact, roughly for every $10 on the price of a barrel of oil.
Speaker #2: That is what we've seen so far. And when we look forward into the remainder of the year, that's what we're anticipating. So if I look purely at price variance at the moment, we can expect to see roughly a 25 increase in our Q2 costs relating purely to the price of fuel.
Guy Young: If I look purely at price variance, at the moment, we can expect to see roughly a $25 increase in our Q2 costs relating purely to the price of fuel. The one other thing I would just quickly touch on, and Djaria mentioned it in her presentation, but the volume of our consumption of fuel does depend to some extent on grid availability. Where we see declines in grid availability, we will see higher volumes for self-generated power, and that in and of itself will drive a cost increase. Subject to the grid availability, roughly $10 per ounce for every $10 per barrel.
Speaker #2: The one other thing I would just quickly touch on, and Joram mentioned it in her presentation, but the volume of our consumption of fuel does depend to some extent on grid availability.
Speaker #2: So where we see declines in grid availability, we will see higher volumes for self-generated power. And that in and of itself will drive a cost increase.
Speaker #2: So, subject to grid availability, it's roughly $10 per ounce for every $10 per barrel.
Alain Gabriel: Thank you. That's very clear. Thank you.
Speaker #4: Thank you. That's very clear. Thank you.
Operator: Thank you. We will now take our next question from the line of Ovais Habib of Scotiabank. Please ask your question, Ovais. Your line is open.
Speaker #3: Thank you. We will now take our next question from the line of Oveis Habib of Scotiabank. Please ask your question, Oveis. Your line is open.
Ovais Habib: Thanks, operator. Hi, Ian and Endeavour team. You know, congrats on Q1 beat and really a great start to the year. Ian, couple of questions from me. The first one was answered in regards to the supplies as well as the cost impact on the Middle East side, so that was good. Thank you very much for that. Just moving on to Assafou. Ian, you released a robust DFS on Assafou. Permits have been received. What's keeping you back on pressing the green light to start construction on the project?
Speaker #2: Thanks, Operator. Hi, Ian. And Endeavor team. Congrats on Q1 beat. And really a great start to the year. Ian, a couple of questions from me.
Speaker #2: The first one was answered in regards to the supplies as well as the cost impact on the Middle East side. So that was good.
Speaker #2: Thank you very much for that. Just moving on to ASAFU. Ian, you released a robust DFS on ASAFU, permits have been received. What's keeping you back on pressing the green light to start construction on the project?
Ian Cockerill: Yeah. Thanks, Ovais. Look, as you know, as far as Assafou is concerned, we already have the environmental permit. We have the exploitation permit. We're currently in negotiation with government around the mining convention. Obviously, it's important that we get that done. A part of that process involves the creation of a local entity, and that's a normal administrative process. I have to say, the government of Côte d'Ivoire have been incredibly supportive on this project. They recognize the importance to the country, as well as to us, and in fairness, are really sort of trying their best to make sure that all necessary permits, approvals, whatever, are, you know, sort of timeously being expedited.
Speaker #5: Yeah, thanks, Oveis. Look, as you know, as far as ASAFU is concerned, we already have the environmental permit. We have the exploitation permit. We're currently in negotiation with government around the mining convention.
Speaker #5: Obviously, it's important that we get that done. Part of that process involves the creation of a local entity and that's a normal administrative process.
Speaker #5: I have to say the government of Côte d'Ivoire have been incredibly supportive on this project. They recognize the importance to the country as well as to us.
Speaker #5: And in fairness, a really sort of crying their best to make sure that all necessary permits approvals, whatever, are sort of timelessly being expedited.
Ian Cockerill: In terms of what is it that is still outstanding, obviously, one of the key issues, as we mentioned in the presentation, was finalization on the resettlement. We have 2 villages that sit on top of the ore body. We're in negotiations with those communities and seeking their assent and approval for to get moving. That is necessary before we can actually start mining activities, because both those villages would potentially be within the normal sort of blast perimeter for the start of it. One of the other issues to be addressed is there is a national road that runs through the footprint of the pit. That needs to be diverted.
Speaker #5: In terms of what is it that is still outstanding, obviously one of the key issues, as we mentioned in the presentation, was finalization on the resettlement.
Speaker #5: We have two villages that sit on top of the ore body. We're in negotiations with those communities. And seeking their assent and approval for to get moving.
Speaker #5: That is necessary before we can actually start mining activities because both those villages would potentially be within the normal sort of blast perimeter for the start of it.
Speaker #5: The other one of the other issues to be addressed is there is a national road that runs through the footprint of the pit that needs to be diverted.
Ian Cockerill: We are very close to concluding the optimal diversion of that road. There's been some toing and froing on that, but, you know, we're close to getting that concluded. Those, I think are the two key outstanding issues. Obviously, I think it's always important, as far as negotiations are concerned, the government know that we're keen to progress. They're keen for this project to progress. It's important that we, you know, we keep our options open.
Speaker #5: We are very close to concluding the optimal diversion of that road. There's been some toeing and throwing on that. But we're close to getting that concluded.
Speaker #5: Those, I think, are the two key outstanding issues and obviously I think it's always important as far as negotiations are concerned the government know that we're keen to progress.
Speaker #5: They're keen for this project to progress, but it's important that we keep our options open. But to give you some idea of our confidence that the project is going, we've already committed up to it's about 80 million dollars worth of pre-expenditure principally aimed at long lead items, such that this is another way that we can help de-risk the project by making sure that long lead items can be manufactured, transported, and delivered well on time and they don't delay any of the build program.
Ian Cockerill: To give you some idea of our confidence that the project is going, we've already committed, you know, up to about $80 million worth of pre-expenditure, principally aimed at long lead items, such that this is another way that we can help de-risk the project, by making sure that long lead items, you know, can be manufactured, transported, and delivered well on time, and they don't delay any of the build program. We're running several things in parallel. You know, I'm still reasonably comfortable that by the end of this year, we will formally announce the project.
Speaker #5: So we're running several things in parallel. I'm still reasonably comfortable that by the end of this year, we will formally announce the project. But I think you can see just by what we're actually doing already, we do believe that this is it's not a question of if this project goes, it's merely a question of when.
Ian Cockerill: I think you can see just by what we're actually doing already, you know, we do believe that this is, it's not a question of if this project goes, it's merely a question of when. It's as simple as that.
Speaker #5: It's as simple as that.
Ovais Habib: Got it. Thanks for that, Ian. Just maybe moving on to the exploration side, and maybe this is a question to Sonia if she's online. Obviously you guys have a large exploration program for 2026. I just want to hear in terms of which, you know, target or area Sonia is most excited about. When should we start receiving some exploration results?
Speaker #2: Got it. Thanks for that, Ian. And just maybe moving on to the exploration side and maybe this is a question to Sonia. She's online.
Speaker #2: Obviously, you guys have a large exploration program for 2026. I just want to hear in terms of which target or area Sonia is most excited about and when should we start receiving some exploration results?
Ian Cockerill: Yeah. Look, I'll pass on. Sonia is with us. I'll pass on, but I can tell you she's excited about all the areas.
Speaker #5: Yeah, look, I'll pass on to Sonia is with us. I'll pass on, but I can tell you she's excited about all the areas.
Sonia Scarselli: Yes. Thank you. Yeah, thanks, Ovais, for the question. It depends how much time you have for me talking about the exciting pipeline. Look, if I just start with to talk about a couple of areas, definitely we have a great result at Vindaloo Deeps in Houndé, and we are planning to actually report the results of the maiden resource in the H1. More to come on that with also a clear understanding of the upside potential. If we move into the other areas, we have exciting results in Sabodala-Massawa. We have completed a full portfolio review and identified over 20 new opportunities in the pipeline with the first one coming with a very clear resource, maiden resource by the end of the year as Kawsara.
Speaker #6: Yes, thank you. Yeah, that's part of the reason for the question. It depends how much time you have for me talking about the exciting pipeline.
Speaker #6: Look, if I just have to talk about a couple of areas, definitely we have a great result, a Bengaluru dip. And we are planning to actually report the results of the median resource in the H1.
Speaker #6: So more to come on that with also a clear understanding of the upside potential. But then if we move into the other areas, we have exciting results in Sabudala Masawa.
Speaker #6: We have completed the full portfolio review and identified over 20 new opportunities in the pipeline, with the first one coming with a very clear resource—median resource—by the end of the year as a causata.
Sonia Scarselli: That's very exciting. In parallel, we also have identified more underground potential in the area both in Sabodala and Sofia. More to come toward the end of the year with the concrete results. If we switch gear to Côte d'Ivoire, there is plenty there to look at. It's more around which one we prioritize first. Ity continues to surprise us in a positive way. We had a very great result at the back end of last year, both into the greenfield and brownfield opportunities, and we are now infill drilling on the brownfield close to the Sierre plant. Assafou, a lot of the work that we did in Assafou in the past couple of years was really due to get the confidence on the Assafou resource. We have that.
Speaker #6: So that's very exciting. And in parallel, we have also identified more underground potential in the area, both in Sabodala and Sofia. More to come toward the end of the year with the concrete results.
Speaker #6: Then if we switch gear to Côte d'Ivoire, there is plenty there to look at. It's more around which one we prioritize first. But Iti continue to surprise us in a positive way.
Speaker #6: We had a very great result at the back end of last year, both into the greenfield and brownfield opportunities. And we are now in field drilling on the brownfield close to the CIL plant.
Speaker #6: And then ASAFU, a lot of the work that we did in ASAFU in the past couple of years was really to get the confidence on the ASAFU resource.
Sonia Scarselli: It's moving on with the DFS. There is now quite a large potential of underexplored brownfield opportunities that we are progressing in parallel to get a better feeling. Those are less mature in terms of exploration activities. We will be able to give a little bit more better understanding both toward the end of this year as well as next year. Overall, it's a very exciting pipeline within our existing areas.
Speaker #6: We have that. It's moving on with the DFS. And there is now quite a large potential of underexplored brownfield opportunities that we are progressing in parallel to get a better feeling.
Speaker #6: Those are less mature in terms of exploration activities. We will be able to give a little bit more better understanding both toward the end of this year as well as next year.
Speaker #6: But overall, it's very exciting pipeline within our existing areas.
Ovais Habib: Excellent. Thanks for that, Sonia.
Speaker #2: Excellent. Thanks for that, Sonia. Sorry, go ahead.
Sonia Scarselli: Now, the rest.
Ovais Habib: Sorry, go ahead.
Sonia Scarselli: No, I was just going to see.
Speaker #6: No, I was just going to.
Operator: Thank you. We have the speakers back. Please continue.
Speaker #7: Ladies and gentlemen, please remain on the line. Your conference will resume shortly. Once again, please remain on the line. Your conference will resume shortly.
Speaker #7: Ladies and gentlemen, please remain on the line. Your conference will resume shortly. Ladies and gentlemen, please remain on the line. Your conference will resume shortly.
Speaker #7: Ladies and gentlemen, please remain on the line. Your conference will resume shortly. Ladies and gentlemen, please remain on the line. Your conference will resume shortly.
Speaker #7: Thank you. We have the speakers back. Please continue.
Jack Garman: Sorry, could the last speaker please re-ask the question? I think we just completed Ovais' question, and we're moving on to the next.
Speaker #2: Sorry, could the last speaker please reask the question? I think we just completed Ovese's question and we're moving on to the next.
Operator: You have any follow-up question, Ovais?
Speaker #7: You have any follow-up question, Ovese?
Ovais Habib: No, I'm good. Thank you so much for answering my questions.
Speaker #8: No, I'm good. Thank you so much for answering my questions.
Jack Garman: Thank you.
Jack Garman: Apologies for cutting you short there, Ovais, but we had an electronic glitch here.
Speaker #7: Thank you.
Speaker #5: Apologies for cutting you short there, Ovese, but we had an electronic glitch here.
Operator: Thank you. We will now take our next question from the line of Richard Hatch of Berenberg. Please ask your question. Richard, your line is open.
Speaker #7: Thank you. We will now take our next question from the line of Richard Hatch of Barenberg, please ask your question, Richard. Your line is open.
Richard Hatch: Yeah, thanks. Yeah, thanks for your time and congrats on a very good call. You're delivering as you promised you said you would, and you're generating that free cashflow, which is really good to see. Look, just two questions. Firstly, just given the volatility that we're seeing in Mali, can you just talk a little bit around, you know, if that's creating any kind of instability in the broader region, if you're seeing anything in that regard, to your operations?
Speaker #4: Yeah, thanks. And yeah, thanks for your time and congrats on a very good call. You're delivering as you promised. You said you would and you're generating that free cash flow, which is really good to see.
Speaker #4: Look, just two questions. Firstly, just given the volatility that we're seeing in Mali, can you just talk a little bit around if that's creating any kind of instability in the broader region, if you're seeing anything in that regard?
Speaker #4: To your operations, and then secondly, just on Vindaloo Deeps, you did sort of talk briefly about it there, but I just wonder if you might just be able to expand a bit more about what you're hoping to show the market on that when you update on the resource and how we should think about that into the short, medium, and longer term.
Richard Hatch: Secondly, just on Vindaloo Deep, you did sort of talk briefly about it there, but I just wonder if you might just be able to expand a bit more about what you're hoping to show the market on that, when you update on the resource and how we should think about that into the, you know, short, medium and longer term. Thanks.
Speaker #4: Thanks.
Ian Cockerill: Yeah. Richard, thanks. Look, I think as everybody knows, Mali does not fall into any of our jurisdictions where we have operating assets. We have an old legacy asset, the Kalana mine, that we're in the process of selling. That sell process continues. Certainly our understanding is that the type of activity that's the civil unrest that's taking place does not appear to have migrated, you know, right down towards Kalana. It's a relatively in Mali terms, much more benign region. We have no immediate impact on our operations due to Mali. The potential for spread across from Mali to elsewhere, at the moment, no.
Speaker #5: Yeah, Richard, thanks. Look, I think as everybody knows, Mali does not fall into any of our jurisdictions where we have operating assets. We have an old legacy asset, the Kelana Mine, that we're in the process of selling.
Speaker #5: That sale process continues. And certainly, our understanding is that the type of activity that's the civil unrest that's taking place does not appear to have migrated right down towards Kelana.
Speaker #5: It's a relatively in Mali terms, much more benign region. So we're not we have no immediate impact on our operations. Due to Mali, in terms of the potential for spread, across from Mali to elsewhere, at the moment, no.
Ian Cockerill: I mean, the obvious place where there might have been some spread was into Burkina Faso. The situation in Burkina appears relatively calm. We're not seeing any deterioration in the local situation. The security forces are, you know, sort of on top of things in that country. We're working hand in glove with them. Again, we're not experiencing any current issues, and we're not anticipating any issues into the immediate future. As far as Vindaloo Deeps is concerned, as Sonia said, you know, we will be in a short period of time, we'll be coming out with an update on the size of the resource, and, you know, timing of when that would start coming into the plan.
Speaker #5: I mean, the obvious place where there might have been some spread was into Burkina Faso. The situation in Burkina appears relatively calm. We're not seeing any deterioration in the local situation.
Speaker #5: The security forces are sort of on top of things in that country. We're working hand in glove with them. And again, we're not experiencing any current issues.
Speaker #5: And we're not anticipating any issues into the immediate future. As far as Vindaloo Deeps is concerned, as Sonia said, we will be in the short period of time we'll be coming out with an update on the size of the resource, and timing of when that would start coming into the plan.
Ian Cockerill: We've still one or two minor things to finalize. As soon as that is ready for publication, we will come to the market. What I would say is I don't think the market is going to be disappointed. I think they're gonna be very pleased with what's coming out of Vindaloo Deeps.
Speaker #5: We're still one or two minor things to finalize. But as soon as that is ready for publication, we will come to the market. What I would say is I don't think the market is going to be disappointed.
Speaker #5: I think they're going to be very pleased with what's coming out of Vindaloo Deeps.
Richard Hatch: Okay, very clear. Thanks. Look forward to that. Cheers.
Speaker #4: Okay, very clear. Thanks. Look forward to that. Cheers.
Operator: We will now take our next question from the line of Amos Fletcher of Barclays. Please ask your question. Amos, your line is open.
Speaker #7: We will now take our next question from the line of Amos Fletcher of Barclays. Please ask your question, Amos. Your line is open.
Amos Fletcher: Good afternoon, everyone. Had a couple of questions. First one was just on working capital. Obviously, there's quite a lot going on within the working capital line this quarter in particular. It was, you know, I guess, quite surprised how big the build was. I was just wondering, Guy, whether you can give us a bit of a steer on how you expect it to play out over the next few quarters. Thanks.
Speaker #9: Yeah, good afternoon, everyone. I had a couple of questions. The first one was just on working capital. Obviously, there's quite a lot going on within the working capital line this quarter in particular.
Speaker #9: But it was, I guess, quite a surprise how big the build was. I was just wondering, Guy, whether you can give us a bit of a steer on how you expect it to play out over the next few quarters.
Speaker #9: Thanks.
Guy Young: Sure, Amos. Thank you. Yes, working capital outflow was relatively significant. I touched on it in the presentation, but maybe just walk through that again with a focus on stockpiles. It's roughly 2/3 of that outflow. The stockpile increase is obviously in relation to mining tonnage. The difference between our original expectation and our actual Q1 was an element of defer or some of the waste stripping, particularly at N’Doulé, revolving around both production profile and fleet availability. This is something that we expect to see pick up again in Q2 and marginally at the start of Q3. As we pick up in stripping activities, we should be seeing naturally something of a drawdown on stockpiles. Further stockpile drawdown is anticipated at Sabodala and Massawa going into the H2.
Speaker #2: Sure, Amos. Thank you. Yeah, working capital outflow was relatively significant. So I touched on it in the presentation, but maybe just walk through that again with a focus on stockpiles, which is the it's roughly two-thirds of that outflow.
Speaker #2: The stockpile increase is obviously in relation to mining tonnage. And the difference between our original expectation and our actual Q1 was an element of deferral, some of the waste stripping, particularly at Hyundai.
Speaker #2: Revolving around both production profile and fleet availability. So this is something that we expect to see pick up again in Q2. And marginally at the start of Q3.
Speaker #2: As we pick up in stripping activities, we should be seeing naturally something of a drawdown on stockpiles. Further stockpile drawdown is anticipated at $7 a solar.
Speaker #2: Going into the second half. So with regards sorry, and La Figae continued increase in stripping activity as well. So with the majority of our sites looking to do some stockpile drawdown, the types of build that you saw in the first quarter should not be repeating over the remainder of the year.
Guy Young: Lafigue continued increase in stripping activity as well. With the majority of our sites looking to do some stockpile drawdown, the types of build that you saw in Q1 should not be repeating over the remainder of the year. Without going into any detail, as it wasn't part of the question, but I think there are positive trends indicators on both the VAT and the consumer builds as well. Hopefully, the level of working capital build does not repeat through Q2, Q3, and Q4.
Speaker #2: And then without going into any detail as it wasn't part of the question, but I think there are positive trends indicators on both the VAT and the consumables as well.
Speaker #2: So hopefully, the level of working capital build does not repeat through Q2, 3, and 4.
Amos Fletcher: Yeah. Potential for further builds but smaller levels over the next couple of quarters, you'd say?
Speaker #9: Yeah, but potential for further builds, but smaller levels over the next couple of quarters, you'd say?
Guy Young: Yes. We could see build depending on sites. As an example, we'd love to see some more stock at Kalana, making sure that we've got plant utilization. Lafigué, N’Doulé, and Sabodala should see some stockpile drawdown.
Speaker #2: Right. So we could see build, depending on sites. So as an example, we'd love to see some more stock at Manor. Making sure that we've got plant utilization.
Speaker #2: La Figae, Hyundai, and Sabadallah should see some stockpile drawdown.
Amos Fletcher: The second question, I just wanted to ask for, I guess, a broader update on the Senegal mining code revision process. Has there been any developments to report over the last few months on that?
Speaker #9: And then the second question, I just wanted to ask for, I guess, a broader update on the Senegal mining code revision process. Has there been any developments to report over the last few months on that?
Ian Cockerill: Yeah, Amos, no new developments to report on that as yet.
Speaker #2: Yeah, Amos, no new developments to report on that as yet.
Amos Fletcher: Okay, great. That's all my questions. Thanks.
Speaker #9: Okay, great. That's all my questions. Thanks.
Operator: Thank you. We will now take our next question from the line of Carey MacRury of Canaccord Genuity. Please ask your question. Carey, your line is open.
Speaker #7: Thank you. We will now take our next question from the line of Carrie McMurray of Canacor Janoty. Please ask your question, Carrie, your line is open.
Carey MacRury: Hi, good morning, and congrats on the great start. Maybe just another question for Guy. You've got over $1 billion in cash now, but still have some money drawn on the credit facility. Just wondering, I assume you're gonna pay that down later this year. Is there any plans to pay down the Côte d'Ivoire debt early or just leave that as is per the schedule?
Speaker #8: Hi, good morning and congrats on the great start. Maybe just another question for Guy. You've got over a billion dollars in cash now, but still have some money drawn on the credit facility.
Speaker #8: Just wondering, I assume you're going to pay that down later this year, and is there any plan to pay down the Côte d'Ivoire debt early, or just leave that as is for the schedule?
Guy Young: Carey, to the first question, the RCF drawdown. I think you know us very well, so you'll remember we've got a cycle, effectively, that means predominant offshoring capacity comes via OpCo dividends. OpCo dividends, we will pay our withholding tax in Q2, effectively allowing us to commence with the repatriation in Q3. Speed of that repatriation dependent on mine site cash levels. That money comes offshore, utilize that to pay down the RCF. From current forecasts, we should have the RCF paid down in Q3, as soon as we get our OpCo dividends up.
Speaker #2: Carrie, to the first question, the RCF drawdown, I think you know very well. So you'll remember we've got a cash cycle effectively that means predominant offshoring capacity comes via opco dividends.
Speaker #2: Opco dividends we will pay our withholding tax in Q2. Effectively allowing us to commence with the repatriation in Q3. Speed of that repatriation depends on mine site cash levels.
Speaker #2: That money comes offshore. Utilize that to pay down the RCF. So current forecasts, we should have the RCF paid down in Q3 as soon as we get our opco dividends up.
Carey MacRury: On the Côte d'Ivoire debt?
Speaker #8: And on the Côte d'Ivoire debt?
Guy Young: Thank you. I was really struggling to try and remember the second part of your question, but I appreciate it. The Côte d'Ivoire debt, no, I think we'll keep that in place, Carey. As you can probably imagine, there is both cash
Speaker #2: Thank you. I was really struggling to try and remember the second part of your question. I appreciate it. The Côte d'Ivoire debt, no. I think we'll keep that in place, Carrie.
Speaker #2: So where we see as you can probably imagine, there is both cash and liquidity plus tax advantages for us to be holding local debt.
Guy Young: Liquidity plus tax advantages for us to be holding local debt. No, we wouldn't look to pay that off early. We would have alternative uses for that cash. I expect the Côte d'Ivoire facility to remain in place and amortized as already disclosed.
Speaker #2: So no, we wouldn't look to pay that off early. We for that cash. So I expect the Côte d'Ivoire facility to remain in place and amortized as already disclosed.
Carey MacRury: Okay, great. Thank you.
Speaker #8: Okay, great. Thank you.
Operator: Thank you. We will now take our next question from the line of Anita Soni of CIBC. Please ask your question. Anita, your line is open.
Speaker #7: Thank you. We will now take our next question from the line of Anita Soni of CIBC. Please ask your question, Anita. Your line is open.
Anita Soni: Hi. Good morning. Thanks for taking my question. Most of them have been asked and answered, but I just want to ask about, have you had any recent conversations with the S&P/TSX about index inclusion? I understand from the tech process that the S&P has reached out to stakeholders to look at including companies that are not incorporated in Canada in the TSX. I know you were removed a couple of years ago, so I'm just wondering if you had any recent discussions with them.
Speaker #10: Hi, good morning. Thanks for taking my question. Most of them have been asked and answered, but I just wanted to ask about have you had any recent conversations with the S&P TSX about index inclusion?
Speaker #10: I understand from the tech process that the S&P has reached out to stakeholders to look at including companies that are not incorporated in Canada, in the TSX, and I know you were removed a couple of years ago.
Speaker #10: So I'm just wondering if you had any recent discussions with them.
Ian Cockerill: Anita, Jack has informed me that there is obviously talk of inclusion in the index of companies on TSX that are not Canadian domiciled. That would obviously be a tailwind for us. We haven't had any detailed conversation. Our understanding is it's early doors, but nothing tangible from our perspective in terms of contact. No.
Speaker #2: Anita, Jack has informed me that the there is obviously talk of inclusion in the index of companies on TSX that are not Canadian domiciled.
Speaker #2: So that would obviously be a tailwind for us. But we haven't had any detailed conversation. So our understanding is it's early conversation. It's early doors.
Speaker #2: But nothing tangible from our perspective in terms of contact, no.
Anita Soni: Okay. Thank you. That's it for my questions.
Speaker #10: Okay. Thank you. That's it for my questions.
Operator: Thank you. We will now take our next question from the line of Mohamed Sidibé of NBCM. Please ask your question. Mohamed, your line is open.
Speaker #7: Thank you. We will now take our next question from the line of Mohamed Sidibe of NBCM. Please ask your question, Mohamed. Your line is open.
Mohamed Sidibé: Thank you. Good morning, Guy. Good morning again, team. All of my questions have been answered. Just wanted to maybe ask a question on the timing of CapEx for Assafou as it relates to the pre-expenditures of $50 to 100 million that you guided to for the year. Thank you.
Speaker #9: Thank you. Good morning, Guy. Good morning, young team. And all of my questions have been answered. Just wanted to maybe ask a question on the timing of CapEx.
Speaker #9: For ASAPU, as it relates to the pre-expenditures of 50 to 100 million that you got into for the year. Thank you.
Ian Cockerill: Mohamed, very simply, what we have done is we've identified the long lead items. You know, basically, buying in to the queue for mill shells, you know, big HPGR kit, and what have you. We flagged the level of expenditure around about ±$80 million. I think you could say that that expenditure would be spread over the year. It's not all gonna come in one lump sum. We are in the process of discussing with various suppliers, you know, getting the final quotes from them. Once that's done, you know, obviously there will be an element of timing of that spending. You should assume it will be spread out over the balance of the year.
Speaker #2: Yeah. Mohamed, very simply, what we have done is we've identified the long lead items, basically buying in to the queue for mill shelves, big HPGR kit and what have you.
Speaker #2: So we flagged the level of expenditure around about plus minus 80 million dollars. I think you could say that that expenditure would be spread over the years.
Speaker #2: It's not all going to come in one lump sum. We are in the process of discussing with various suppliers getting the final quotes from them.
Speaker #2: And once that's done, obviously, there will be an element of timing of that expenditure. So you should assume it will be spread out over the balance of the year.
Mohamed Sidibé: Thank you, and congrats on a great quarter.
Speaker #9: Thank you. And congrats on a great quarter.
Ian Cockerill: Thank you.
Speaker #2: Thank you.
Operator: Thank you. We will now take our next question from the line of Felicity Robson of Bank of America. Please ask your question, Felicity. Your line is open.
Speaker #7: Thank you. We will now take our next question from the line of Felicity Robson of Bank of America. Please ask your question, Felicity. Your line is open.
Felicity Robson: Thank you for taking my question. You've provided an update on Sabodala's production profile. Could you provide some color on where you see further scope to supplement this, maybe with resource conversion or exploration in the near term? Thank you.
Speaker #11: Thank you for taking my question. You've provided an update on Sabadalla's production profile. Could you provide some color on where you see further scope to supplement this, maybe with resource conversion or exploration in the near term?
Speaker #11: Thank you.
Djaria Traore: Thank you, Felicity. I think we, as you mentioned, are very happy to have published our NI 43-101, whereby we are stipulating that there will be an increase in production. Sabodala-Massawa is purely currently on the mineral reserves. We've seen already an increase when you look at the production profile, 2026 versus 2025. What we're also seeing is that from 2029, we'll see a significant increase all the way to 3, in the mid 360, at least for the next 5 years. However, I think to answer your question, definitely there's an additional upside at Sabodala-Massawa through resource conversions and additional exploration. For this year, we've actually have a budget of almost $15 million to increase those resources at Sabodala-Massawa.
Speaker #12: Thank you, Felicity. I think we have to mention we're very happy to have published our NI43101. Whereby we are stipulating that there will be an increase in production.
Speaker #12: Sabadalla Masawa. It's purely currently on the mineral reserves. We've seen already an increase when you look at the production profile 2026 versus 2025. What we are also seeing is that from 2029, we'll see a significant increase all the way to 3 in the mid-360.
Speaker #12: At least for the next five years. However, I think to answer your question, definitely there's an additional upside at Sabadalla-Masawa. Resource conversion is an additional exploration.
Speaker #12: For this year, we've actually have a budget of almost 15 million. To increase those resources at Sabadalla Masawa. Maybe Sonia will have additional information.
Djaria Traore: Maybe Sonia will have additional information.
Sonia Scarselli: Just to add to what Djaria has said, continue to see the increase of production in the late 2020s, driven mainly from the underground development, coming to the pipeline, and that's bringing in a very high-grade ore for our Golouma and Karekunda, which is very exciting. Beyond what Djaria already talked about in terms of exploration upside, we have identified several opportunities both in the exploitation permit and exploration permit that we started to add to the profile in the next couple of years. Starting with the Makana, which is brownfield, nearby the CIL plant of non-refractory oxide, moving to Kawsara, as well as we are looking at some of the farther underground potential.
Speaker #13: Yeah. Just to add the two of the giants that say that finishing the increase of production and the late 20s driven mainly from the underground development and coming to the pipeline high-grade ore for column and caliconda, which is very exciting.
Speaker #13: And then, beyond what Jari already talked about in terms of exploration upside, we have identified several opportunities both in the exploitation permit and exploration permit that we’ve started to add to the profile in the next couple of years.
Speaker #13: Starting with the Makana, which is brownfield nearby the CIL plant of non-refractory oxide. And then moving into Kawsara as well as we are looking at some of the further underground potential.
Sonia Scarselli: We definitely have identified opportunities to maintain the pipeline and that profile beyond the end of 2024.
Speaker #13: So we definitely have identified opportunities to maintain that pipeline and that profile beyond the end of the 2020s.
Felicity Robson: Great. Thank you.
Speaker #11: Great. Thank you.
Operator: Thank you. We will now take our final question for today from the line of Frederic Bolton of BMO Capital Markets. Please ask your question, Frederic. Your line is open.
Speaker #7: Thank you. We will now take our final question for today from the line of Frederick Bolton of BMO Capital Markets. Please ask your question, Frederick.
Speaker #7: Your line is open.
Frederic Bolton: Good afternoon, and thank you for taking my question. I just want to follow up on Ovais' and Mohamed's questions on Assafou. There is a $396 million in non-sustaining capital, which I think is on top of the great CapEx you have in your financial model. Can you please give me some color on what is within the non-sustaining CapEx? Then within your great CapEx million allocated for owner's costs. That seems to be quite high when I comp that against other projects of similar size. Can you sort of dive in into what might be driving the $215 million? Thank you.
Speaker #9: And good afternoon. And thank you for taking my question. I just want to follow up on it raises and Mohamed's questions on ASAPU. So there is a 396 million in non-sustaining capital which I think is on top of the growth CapEx you have in your financial model.
Speaker #9: Can you please give me some color on what's within the non-sustaining CapEx? And then within your growth CapEx million for a critical earnest cost, that seems to be quite high when I comp that against other projects.
Speaker #9: Or similar size. Can you sort of dive into what might be driving the 215 million? Thank you.
Guy Young: Frederick, it was breaking up a little, but I think I've got more or less what you were after. The key element of the non-sustaining is effectively stripping. I would just remind everyone, Assafou is relatively deep, so we have a very substantial pre-mining and stripping requirement at Assafou before we get into the ore body. The fundamental driver of the non-sustaining CapEx. At that point, Frederick, on the owners, we do have elements within the owners cost that when we compare it to our previous projects, would be regarded as slightly higher. I think what we've attempted to do is ensure that we have incorporated, encapsulated all specific costs associated with Assafou.
Speaker #2: Hello. Frederick. It was breaking up a little, but I think I've got more or less what you were after. So the key elements of the non-sustaining is effectively stripping.
Speaker #2: So I would just remind everyone ASAPU is relatively deep. So we have a very substantial pre-mining and stripping requirement at ASAPU before we get into the ore body.
Speaker #2: So the fundamental driver of the non-sustaining CapEx at that point, Frederick, on the owners' we do have elements within the owners' cost that when we compare it to our previous projects, would be regarded as slightly higher.
Speaker #2: I think what we've attempted to do is ensure that we have incorporated encapsulated all specific costs associated with ASAPU. So wherever we have people working on ASAPU, bringing teams in, one of which, for example, we are going to be doing, which is a more fundamental cost management team that is being brought in as well as lessons learned from previous projects where we felt that we needed to be able to ramp up slightly earlier in terms of operational readiness.
Guy Young: Wherever we have people working on Assafou, bringing teams in, one of which, for example, we are going to be doing, which is a more fundamental cost management team, that is being brought in. As well as lessons learned from previous projects where we felt that we needed to be able to ramp up slightly earlier in terms of operational readiness. Those are the key factors driving the owner team costs.
Speaker #2: Those are the key factors driving the owner team costs.
Frederic Bolton: Thank you. Does that also include the management for the resettlement and the preparation for the highway diversion?
Speaker #9: And thank you. And does that also include the management for the resettlement and the preparation for the highway diversion? We have the costs associated with the road diversion and power diversion.
Guy Young: We have the costs associated with the roads diversion and power diversion in the infrastructure line. You're absolutely right. There is a fairly significant effort going into the resettlement that Ian touched on earlier, and that would be included in the owners costs. Yes.
Speaker #9: In the infrastructure line, but you're absolutely right. There is a fairly significant effort going into the resettlement that Ian touched on earlier, and that would be included in the owners' costs, yes.
Frederic Bolton: Okay, brilliant. That's all for me. Well done on a great quarter. Thank you.
Speaker #9: Okay. Brilliant. That's all for me. Hold on. I'm a great quarter. Thank you.
Operator: Thank you. That's the end of the question and answer session.
Speaker #11: Thank you. And that's the end of the question and our discussion.
Ian Cockerill: Thanks. Thanks, Frederic. Thank you, everybody.
Speaker #9: And thank you, everybody.
Operator: Please continue, sir.
Speaker #11: Please continue, sir.
Ian Cockerill: Okay. Thank you, operator, and thank you, everyone, for your time. I hope you've heard how pleased we are with the Q1 and how it's set up to continued success throughout the rest of the year. We look forward to meeting up with you again in the mid-year when we give our Q2 and H1 results. Thank you all for listening today. Much appreciated. Thank you and goodbye.
Speaker #9: Okay. Thank you, Operator. And thank you, everyone, for your time. I hope you've heard how pleased we are with the first quarter and how it set up to continue the success throughout the rest of the year.
Speaker #9: And we look forward to meeting up with you again in the mid-year when we give our Q2 and H1 results. Thank you all for listening today.
Speaker #9: Much appreciated. Thank you and goodbye.
Operator: Thank you for your participation in today's conference. This does conclude the program. You may now disconnect your lines.
