Q1 2026 Aura Minerals Inc Earnings Call

May 7, 2026

Operator 2: Good morning, ladies and gentlemen. Welcome to Q1 2026 Earnings Call. This conference is being recorded, and the replay will be available at the company's website at auraminerals.com/investidores. The presentation will also be available for download. This call is also available in Portuguese. To access, you can press the globe icon on the lower right side of your Zoom screen and then choose to enter the Portuguese room. After that, select Mute Original Audio. Para acessar nossa conferência em português, clique no ícone do globo ao lado inferior direito da sua tela Zoom e selecione a opção Portuguese Room. Ao acessar a nova sala, certifique-se de mutar o áudio original. We would like to inform that all attendees will only be listening to the conference during the presentation, and then we will start the question and answer section when further instructions will be provided.

Operator: Good morning, ladies and gentlemen. Welcome to Q1 2026 Earnings Call. This conference is being recorded, and the replay will be available at the company's website at auraminerals.com/investidores. The presentation will also be available for download. This call is also available in Portuguese. To access, you can press the globe icon on the lower right side of your Zoom screen and then choose to enter the Portuguese room. After that, select Mute Original Audio. Para acessar nossa conferência em português, clique no ícone do globo ao lado inferior direito da sua tela Zoom e selecione a opção Portuguese Room. Ao acessar a nova sala, certifique-se de mutar o áudio original. We would like to inform that all attendees will only be listening to the conference during the presentation, and then we will start the question and answer section when further instructions will be provided.

Speaker #1: This conference is being recorded and the replay will be available at the company's website. At aura minerals.com/investidores. The presentation will also be available for download.

Speaker #1: This call is also available in Portuguese. To access, you can press the globe icon on the lower right side of your Zoom screen and then choose to enter the Portuguese room.

Speaker #1: After that, select Mute Original Audio. Para acessar nossa conferência em português, clique no ícone do globo ao lado inferior direito da sua tela Zoom e selecione a opção Portuguese Room.

Speaker #1: Ao acessar a nova sala, certifique-se de mutar o áudio original. We would like to inform that all attendees will only be listening to the conference during the presentation.

Speaker #1: And then we will start the question-and-answer section when further instructions will be provided. Before proceeding, we would like to clarify that any statements that may be made during this conference call regarding the company's business prospects operational and financial projections and goals are the beliefs and assumptions of Aura Executive Board and the current information available to the company.

Operator 2: Before proceeding, we would like to clarify that any statements that may be made during this conference call regarding the company's business prospects, operational and financial projections and goals are the beliefs and assumptions of Aura executive board and the current information available to the company. These statements may involve risks and uncertainties as they relate to future events and therefore depend on circumstances that may or may not occur. Investors should be aware of events related to the macroeconomic scenario, the industry, and other factors that could cause results to differ materially from those expressed in the respective forward-looking statements. Present at this conference we have Rodrigo Barbosa, President and CEO, and Kleber Cardoso, CFO. Now I will turn the conference over to Rodrigo Barbosa. You may begin your conference, sir.

Operator: Before proceeding, we would like to clarify that any statements that may be made during this conference call regarding the company's business prospects, operational and financial projections and goals are the beliefs and assumptions of Aura executive board and the current information available to the company. These statements may involve risks and uncertainties as they relate to future events and therefore depend on circumstances that may or may not occur. Investors should be aware of events related to the macroeconomic scenario, the industry, and other factors that could cause results to differ materially from those expressed in the respective forward-looking statements. Present at this conference we have Rodrigo Barbosa, President and CEO, and Kleber Cardoso, CFO. Now I will turn the conference over to Rodrigo Barbosa. You may begin your conference, sir.

Speaker #1: These statements may involve risks and uncertainty as they relate to future events and therefore depend on circumstances that may or may not occur. Investors should be aware of events related to the macroeconomic scenario, the industry, and other factors that could cause results to differ materially from those expressed in their respective forward-looking statements.

Speaker #1: Present at this conference, we have Rodrigo Barbosa, President and CEO, and Kleber Cardoso, CFO. Now, I will turn the conference over to Rodrigo Barbosa.

Speaker #1: You may begin your conference, sir.

Speaker #2: Sure. Thank you. Thank you all for this first part of the year. As always, I'll be talking about a summary of the results and strategic movements during this quarter and then Kleber will follow with a more detailed information about the financials and cash flows.

Rodrigo Barbosa: Sure. Thank you. Thank you all for this Q1 of the year. As always, I'll be talking about summary of the results and strategic movements. During this quarter, Kleber will follow with a more detailed information about the financials and cash flows. Before I start, I think it would be good to recap that this was a very solid quarter for us, where I can show to you that we move forward under the three avenues that we propose to deliver value to our shareholders. This story has been shared with the market since 2020 and reinforced since the Nasdaq listing last year. We're gonna build value to our shareholder by three different avenues. Number 1, we're gonna increase production.

Speaker #2: Before I start, I think it would be good to recap that this was a very solid quarter for us where I can show to you that we move forward under the three avenues that we propose to deliver value to our shareholders, and this story has been shared with the market since 2020 and reinforced since the Nasdaq listing last year.

Speaker #2: We're going to build value to our shareholder by three different avenues. Number one, we're going to increase production. We're going to develop a greenfield project and reach over 600,000 ounces after all the projects are developed.

Rodrigo Barbosa: We're gonna develop greenfield projects and reach over 600,000 ounces with after all the projects are developed. Number two, we still have a significant area unexplored and room to increase life of mine. We should also see, together with improvement and increase in production, a significant increase in resources and reserves along our the next years. Number three, we should tackle also our price per NAV multiple through growth and also improving our daily trading volume to the market. What I'm gonna share with you during the next few slides is consolidates as a partner that consolidates solid steps towards these 3 avenues. If we jump into the first slide. In summary, again, we reached a new record high production as we already disclosed to the market.

Speaker #2: Number two, we still have a significant area unexplored and room to increase life of mine. So we should also see together with the improvement and increase in production a significant increase in resources and reserves along our the next two years.

Speaker #2: And number three, we should tackle also our price per NAV multiple through growth and also improving daily trading volume to the market. So what I'm going to share with you during the next few slides is consolidates, as a partner that consolidates solid steps towards these three avenues.

Speaker #2: So if I jump into the first slide, so in summary, again, we reached a new record high production as we already disclosed to the market.

Speaker #2: Of course, now including MSG acquisition that was last year including only in December, reaching 82.1,000 ounces of gold equivalent ounces. And then that together with a higher gold prices summed 380 million dollars in terms of revenues.

Rodrigo Barbosa: Of course, now including MSG acquisition that was last year, including only in December, reaching 82.1 thousand ounces of gold equivalent ounces. That together with the higher gold prices, summed at $380 million in terms of revenues. Now, when we add, comparing to Q1 last year, Borborema, that was still beginning to ramp up. Now full year of Borborema, stable productions in our mines. Plus MSG, we're gonna see even higher gold prices. We see the EBITDA 3 times higher than Q1 last year, now reaching $244 million, another record high EBITDA for the quarter.

Speaker #2: Now, when we add comparing to first quarter last year, Borborema that was still beginning to ramp up, then now full year of Borborema stable productions in our mines plus MSG, we're going to see and higher gold prices are we see the EBITDA three times higher than the first quarter last year.

Speaker #2: Now reaching a 244 million dollars another record high EBITDA for the quarter. Together with our EBITDA, then we can see the all in sustaining cash costs reaching 1,829.

Rodrigo Barbosa: Together with our EBITDA, we can see the all-in sustaining cash costs, which in 1,829. This is a significant increase compared to last quarters, mostly because of now we are consolidating MSG. As we disclosed to the market since early stage when the acquisitions, we understand that MSG has a higher all-in sustaining cash cost and will be higher during this year once we are focused on the turnaround, preparing the mine and to put production levels above 80 or close to 80,000 ounces, and an all-in sustaining cash cost close to 2,000.

Speaker #2: This is a significant increase compared to last quarters. Mostly because of now we are consolidating MSG and as we disclose to the market since early stage when the acquisitions we understand that MSG has a higher all in sustaining cash cost and will be higher during this year once we are focused on the turnaround preparing the mine and to put a production levels above 80 or close to 80,000 ounces and all in sustaining cash costs close to 2,000.

Speaker #2: But during this first quarter and actually during the second quarter, I also we should see MSG with a high all in sustaining cash costs when we are focusing on our underground preparation, underground safety standards underground development so that we can prepare this mine for a better production throughout the Q3 and then Q4 and actually an even better than next year.

Rodrigo Barbosa: During this first quarter, and actually during the second quarter, also we should see MSG with a high all-in sustaining costs when we are focusing on our underground preparation, underground safety standards, underground development, so that we can prepare this mine for a better production throughout the Q3 and then Q4, and actually, and even better than next year. I will talk mine by mine and in following slides. Higher EBITDA also translated into strong recurring free cash flow, now reaching $95 million, which is 109% higher compared to last quarter.

Speaker #2: And now we'll talk mine by mine and then the following slides. So higher EBITDA also translated in a strong recurring free cash flow. Now reaching a 95 million dollars, which is 109% higher compared to last quarter.

Rodrigo Barbosa: This strong recurring cash flow, recurring cash flow on $95 million, stronger even after a payment of $33 million on hedges due to the Borborema, which is a non-recurring but should happen this year and should also happen next year. A temporary working capital consumption of $42 million. Kleber gonna walk you through in more details about the transition from EBITDA to free cash flow. In terms of net debt, super stable, despite the payment of $55 million during the quarter regarding Q4 of last year. Investment also in production, we saw a company that has been able to grow and pay solid dividends to our dividends while maintaining a very low net debt to EBITDA ratio.

Speaker #2: This strong recurring cash flow recurring cash flow 95 million dollars stronger even after a payment of a 33 million dollars on hedges due to the Borborema, which is a non-recurring but should happen this year and should also happen next year.

Speaker #2: And a temporary working capital consumption of 42 million dollars and Kleber going to walk you through in more details about the translation from EBITDA to all in to free cash flow.

Speaker #2: In terms of net debt, super stable despite the payment of 55 million dollars during the quarter regarding the last quarter of last year. Investment also in production we saw a company that has been able to grow and pay solid dividends to a dividends while maintaining a very low net debt to EBITDA ratio.

Rodrigo Barbosa: As we are stable in net debt and the EBITDA continue to increase, we'll see the leverage of the company actually being deleveraged after all the growth acquisitions, payment of dividends and strong results from our mines. In terms of net income, as now we see, unfortunately, this quarter, there was not a significant higher gold price as we were seeing in the last quarters along the year 2025. That translate in the lower mark-to-market losses in terms of the gold hedges. That translating to $95 million of net income. Kleber also gonna walk you through in more detail how we got to the 95 and also see what would be the adjusted net income without the non-recurring events.

Speaker #2: As we are stable in net debt and the EBITDA continue to increase, we're going to see the leverage of the company actually being deleveraged after all the growth acquisitions, payment dividends, and strong results from our mines.

Speaker #2: In terms of net income, as now we see unfortunately this quarter there was not a significant higher gold price as we were seeing in the last quarters along the year 2025.

Speaker #2: That translates in the lower market-to-market losses in terms of the gold hedges. So that translated into 95 million dollars of net income. And Kleber also is going to walk you through in more detail how we got to the 95.

Speaker #2: And also see what would be the adjusted net income without the non-recurring events. As we continue to grow, as we continue to grow EBITDA, we are non-leveraged and margins are continue to improve.

Rodrigo Barbosa: As we continue to grow EBITDA, we have no leverage, and margins are continue to improve. We see a room to maintain a high level of dividends to our shareholders. Another record high dividends now reaching $65 million of dividends or $0.76 per share. The dividends we paid in Q2 last year, Q3, Q4, and now this Q4, we see that the last 12 months on the quarterly basis reaching 4.6% of dividend yield.

Speaker #2: We see a room to maintain high level of dividends to our shareholders another record high dividends now reaching 65 million dollars of dividends or 0.76 cents per share.

Speaker #2: And then with annual add the dividends we paid in Q2 last year, Q3, Q4, and now this Q4, we see that the last 12 months on the quarterly basis reaching 4.6% of dividend yield and as we progress in the production as we progress during the second semester, we're going to see a higher production compared to the first semester.

Rodrigo Barbosa: As we progress in the production, as we progress during H2, we're gonna see a higher production compared to H1, then we need to think that we can continue to distribute a significant amount of dividends to our shareholder without jeopardizing the growth plan that we have. As additional events, and that will reinforce the three pillars that I was mentioning to you earlier this call, we see that our growth plan continue to be super solid. Number one, we got the agreement signed by DNIT to move a road that unlocked significant amount of resources reserved in Borborema, increasing the life of mine to 36 years now.

Speaker #2: Then we're into to think that we can continue to distribute a significant amount of dividends to our shareholder without the jeopardizing the growth plan that we have.

Speaker #2: As additional events, and that we reinforce the three pillars that I was mentioning to you earlier this call, we see that our sorry, that we are growth plan continue to be super solid.

Speaker #2: Number one, we got the agreement signed by the need to move abroad that unlocked significant amount of resource and reserves in Borborema increasing the life of mine to 36 years now.

Speaker #2: Of course, we don't want to we prefer to have a lower life of mine and higher production. So that's why we've been disclosed to the market that we are now finalizing all the studies to increase significantly the production of Borborema so that we can actually then stretch a little bit more can decrease the life of mine with increased production of Borborema.

Rodrigo Barbosa: Of course, we prefer to have a lower life of mine and higher production. That's why we've been disclosing to the market that we are now finalizing all the studies to increase significantly the production of Borborema so that we can actually then stretch a little bit more. We can decrease the life of mine with increased production of Borborema. We are finalizing all the studies, and should we have any news to the market between now Q2 or Q3 this year. Very important milestone is that we updated our resources and reserves on the report 20-F. That was a significant addition of reserves.

Speaker #2: And we are finalizing all the studies and should be have any news to the market between now Q2 or Q3 this year. Very important milestone is that we updated our resources and reserves on the report 20F that was a significant addition of reserves adding 3.8 million ounces of proven and probable and also reaching when you add proven and probable also with the emerging indicator you're going to see that you can get close to 10 million ounces in our inventory.

Rodrigo Barbosa: We're adding 3.8 million ounces of proven and probable, and also reaching, when you add proven and probable also with the measured indicator, you're gonna see that we can get close to 10 million ounces in our inventory for the long year. That's a significant increase compared to what we had before. While we continue to do exploration investments and see also room for further improvement in our resource and reserves as we move along the next years. Very important project, Era Dorada. Earlier this year, as we shared with the market, we got the license to initiate the construction. That was followed by a full board approval to initiate the construction of Era Dorada then. We are in full force for the year.

Speaker #2: For the long days, that's a significant increase compared to what we had before, while we continue to do exploration investments and see also room for further improvement in our resource and reserves as we move along the next years.

Speaker #2: Very important project at Adorada. Early this year, as we shared with the market, we got the license to initiate the construction. That was followed by a full board approval to initiate the construction of Adorada.

Speaker #2: Then we are in full force for the year. And CapEx will be divided between this year and next year. And then we expect production to come now in 2028.

Rodrigo Barbosa: CapEx will be divided between this year and next year. I expect production to come now in 2028. We talked about how we increased production. Now go back to another slide. We talked about that we increased production. Last year, we had the Borborema ramp up. Actually, this quarter, we continued to increase a little bit more in terms of production. That's the growth this year. We come from last year of 284,000 ounces of production. This year, the guidance is between 340 to 390. We continue to grow by developing the project and doing acquisitions. Second, we increased significantly our resource and reserve.

Speaker #2: So we talked about—we increased production. Now, go back to the other slide. So we talked about that; we increased production. Last year, we had the Borborema ramp up.

Speaker #2: Actually, this quarter we continue to increase a little bit more in terms of production. We so that's the growth this year. We come from last year of 284,000 ounces of production.

Speaker #2: This year the guidance is 340 between 340 to 390. So we continue to grow by developing the project and doing acquisitions. Second, we increase significantly our resource and reserve.

Speaker #2: And third, to tackle the price NAV, we know that we had to address daily training volume combined with a solid walking the talk and delivering on the projects.

Rodrigo Barbosa: Third, to tackle the price NAV, we know that we had to address daily trading volume combined with a solid walking the talk and delivering on the projects and growth. We could see that Aura is narrowing a little bit the gap, price per NAV, while you still have a lot of room to continue to narrow this gap as we are maintaining a high daily trading volume and continue to grow. There is a very strong correlation between size and price per NAV in the gold sector. As we come from, in the past, 200,000 ounces of production, now on guidance 340 and 390, and we know how to get close to 600, we should see this continue narrowing the gap of price per NAV.

Speaker #2: And growth. So we could see that Aura is narrowing a little bit the gap of price per NAV. While you still have a lot of room to continue to narrow this gap as we are maintaining a high daily trading volume and continue to grow.

Speaker #2: There is a very strong correlation between size and price per NAV in the gold sector as we come from in the past 200,000 ounces of production.

Speaker #2: Now on guidance 340 and 390. And we know how to get close to 600. We should see this continue narrowing the gap of price per NAV.

Speaker #2: One of the factors that's being well accepted by the market and widely amplified when we listed in Nasdaq is that we are now trading 94 million dollars.

Rodrigo Barbosa: One of the factors that's being well accepted by the market and widely amplified when we listed in Nasdaq is that we are now trading $94 million. That was the daily trading volume on the last average on last quarter. Compared to quarter of last year, $31 million. If I remind the investors that where we were one year ago, it was $2 million per day. Now we are on average $94 million per day, which is now attracting very large and more sophisticated investors that now pay attention to our and also invest in our portfolio. Next slide. In terms of safety, after a long time without any lost time incident, unfortunately, we had a lost time incident in Borborema.

Speaker #2: That was the daily trading volume on the last average on last quarter. Compared to last quarter of last year, 31 million. And then if I remind that investors that were aware we were one year ago, it was 2 million dollars per day.

Speaker #2: Now we are on average 94 million dollars per day, which is now attracting a very large and more sophisticated investors that now pay attention to Aura and now also invest in our portfolio.

Speaker #2: Next slide. In terms of safety, after a long time without any lost time incident, unfortunately, we had a lost time incident in Borborema that was one of the maintenance on the filter.

Rodrigo Barbosa: That was on a maintenance on the filter. We are reinforcing all the procedures. There was not followed some of the procedures, we are reinforcing training all the managers and all the maintenance team in order to follow the procedure and reinforcing the standards. This person is already back to work. There's no major injury. There was some lost time incident related to that accident. In terms of stability of structures, again, all geotechnical structures are in satisfactory level. On the left side of this slide, we can clearly see on the line on the left side shows the last twelve months of production.

Speaker #2: We are reinforcing all the procedures that was not followed some of the procedures so that we are reinforcing training all the managers and all the maintenance team in order to follow the procedures and reinforcing the standards.

Speaker #2: This person has already is already back to work. There's no major injury. However, there was some lost time incident related to that accident. In terms of stability of structures, again, all geotechnical structures are in satisfactory level.

Speaker #2: So on the left side of this slide, we can clearly see on the line on the left side, it shows the last 12 months of production.

Speaker #2: As we are now increasing getting from the standard of 60, 65 between 60 to 70 thousand ounces of production that happened during the 24, 25.

Rodrigo Barbosa: As we are now increasing from the standard of 60, 65, between 60 to 70,000 ounces of production that happened during 2024, 2025. Now with Borborema and then MSG, we are now increasing to levels above 80,000 ounces and perhaps close to 90,000 or even above during the H2, which is now on the last 12 months, ramping up our production coming from 265, that was on Q3 2015, 280, 302. We should see these last 12 months continue to increase as we are very comfortable, in line with the guidance that we set to the market to finish the year between 340,000 and 390,000 ounces of productions.

Speaker #2: Now with Borborema and then MSG, we are now increasing to levels above 80,000 ounces and perhaps reach close to 90,000 or even above during the second semester, which is now on the last 12 months ramping up our production coming from 265.

Speaker #2: That was on Q3 2015, 280, 302. And we should see these last 12 months continue to increase as we are very comfortable in line with the guidance that we said to the market to finish the year between 340 and 390 thousand ounces.

Speaker #2: Of productions. In terms of mind by mind, where we saw which was expected and due to the mine sequencing due to the budget and the guidance that we sent to the market, Arans Azul we now going to a lower grade during this quarter.

Rodrigo Barbosa: In terms of mine by mine, where we saw, which was expected and due to the mine sequencing, due to the budget and the guidance that we sent to the market. Araçá Azul, we will now have going to lower grades during this quarter. We should not expect a significant improvement through Q2, and then some improvement during H2 in Araçá Azul. Yeah, the same happens with Apoena, that Apoena can relate it to other years, where we start the year, normally is slower, and then production pick up during Q3 and Q4. Mineração super stable.

Speaker #2: We should not expect a significant improvement during the second quarter. And then some improvement during the second semester in Arans Azul. That's the same that happens with Apoena that Apoena can relate it to other years where we start the year normally it's lower.

Speaker #2: And then production pick up during the third and fourth quarter. Minota super stable. It's just a rounding number here from 18 to 17, but it's actually 2% of decrease compared to Q4.

Rodrigo Barbosa: It's just a rounding number here from 18 to 17, but it's actually 2% decrease compared to Q4, and we should continue to see a stable production in Minosa and perhaps some improvement during the second semester. Almas, we continue to have a strong production at 15,000 to 16,000 production. Implementing an investment where we are increasing the capacity of Almas up to reach up to 3 million tons per year by the end of the year. While we are doing underground development so that we can, along the next year, continue to improve efficiency and also production in the project.

Speaker #2: And we should continue to see a stable production in Minota. And perhaps some improvement during the second semester. Almas we continue to have a strong production.

Speaker #2: At 15,000, 16,000 production. And implementing an investment where we are increasing the capacity of Almas up to reach up to 3 million tons per year by the end of the year.

Speaker #2: While we are doing underground development so that we can along the next year continue to improve efficiency and also production in the project. While exploration efforts on the near mine and on the regional continue to give us a strong and strong indicators that this mine is not only going to have a very extended life of mine, but I'll be able to even expand above the 3 million tons per year.

Rodrigo Barbosa: While exploration efforts on the near mine and on the regional continue to give us strong and strong indicators that this mine is not only going to have a very extended life of mine, but I'll be able to even expand above the 3 million tons per year. Morro do Ouro, we had a stronger quarter compared to last quarter, mainly due to a higher throughput and stabilization of the milling process, stabilization of the filter. There's still some room to improve production for the second semester. MSG, this increase is mainly due to we are now consolidated 3 months compared to December last year. That was only 1 month. We should not expect MSG to improve.

Speaker #2: Borborema we had a stronger quarter. Compared to last quarter, mainly due to a highly throughput stabilization of the milling process, stabilization of the filter.

Speaker #2: And there's still some room to improve production for the second semester. MSG there's this increase is mainly due to we are now consolidating three months compared to December last year.

Speaker #2: That was only one month. We should not expect MSG to improve actually. We expect MSG to decrease production during the second quarter while we are totally focused building the infrastructure underground in order to prepare this mine to do the proper production for the 27 years.

Rodrigo Barbosa: Actually, we expect MSG to decrease production during Q2 while we are totally focused building the infrastructure underground in order to prepare this mine to do the proper production for the 2027 year. We should see on Q3 and Q4 productivity improving, costs going down and also production going up, but not on Q2. Next. In terms of all-in sustaining cash costs that we see that reaching $1,829 compared to $1,521. If we were not by MSG, that is acquisition that we understand that would have a higher all-in sustaining cash cost along the year of 2026. That's because we paid only $76 million on this mine. We understand that they had to go on the turnaround process.

Speaker #2: But we should see on Q3 and Q4 productivity improving costs going down and also production going up, but not on the second quarter. Next.

Speaker #2: In terms of all in sustaining cash costs that we see that reaching 1,829 compared to 1,521. If we were not by MSG, that is acquisitions that we understand that would have a higher all in sustaining cash costs along the year of 2027, 2026.

Speaker #2: That's because we paid only 76 million dollars on this mine. We understand that there had to go on the third round process. If in one hand all in sustaining cash costs is above as expected, in the other hand, the underground development is being well within the our expectations and significantly higher what this mine was performing in the past.

Rodrigo Barbosa: If in 1 hand, our all-in sustaining cash cost is above as expected, on the other hand, the underground development is doing well within our expectations and significantly higher what this mine was performing in the past. For example, the advancement on the underground tunnels, when last year was close to 35, 36 meters per month. Now we are reaching 60, 65. The all efficiency that we want to implement underground to do preparation for a higher production is moving as fast as expected, sometimes even faster than we expect.

Speaker #2: For example, the advancement on the underground tunnels when last year was close to 35, 36 meters per month. Now we are reaching 60, 65.

Speaker #2: So all efficiency that we want to implement underground to do preparation for a higher production is moving as fast as expected. Sometimes even faster than we expect.

Speaker #2: So that if you take out the MSG, which should pollute our average during first quarter, second along the full year, then we would have been on all in sustaining cash costs close to 1,500 dollars per ounce.

Rodrigo Barbosa: That, if you take out the MSG, which should pollute our average, during Q1 and Q2, during along the full year, then we would have been on our all-in sustaining costs close to $1,500 per ounce. Next. Very importantly, that happened also during the quarter, is Serra Dourada project that now we have a full approval. This is an outstanding project that is getting attention from many stakeholders in the world because of its potential to be one of the highest standard in ESG. Why I say so? Because this project is gonna put many different variables in the same and learnings from other mines in the same product. Number one, we bought a bluestone combined with a geothermal project.

Speaker #2: Next. Very importantly that happened also during the quarter is that Adorada project that now we have full approval. This is an outstanding project that is getting attention from many stakeholders in the world because of its potential to be one of the highest standard in SG.

Speaker #2: Why I say so? Because this project is going to put many different variables in the same and learnings from other mines. In the same project.

Speaker #2: Number one, it is we bought a Bluestone combined with a geothermal project. So this project as we develop the geothermal project that is coming in the upcoming years, we'll have a renewable access to energy.

Rodrigo Barbosa: This project, as we develop the geothermal project that is coming in the upcoming years, we'll have a renewable access to energy. Now, actually, we are thinking about increasing the megawatt in order to supply Guatemala with extra energy and with the renewable energy. Number 2, we understand that clean water and treated purified water is an issue in the area. There's not many, if there is any municipalities that has a purified water, we use the water that we have on the ground that we would have to treat anyway in order to put this water back to the rivers. We are now improving, and we approved additional investments on water treatment in order to have this water as purified and potable to the cities.

Speaker #2: And actually we are thinking about increasing the megawatts in order to supply Guatemala with extra energy and with the renewable energy. Number two, we understand that clean water and treated purified water is an initial in the area that's not many if there is any if any municipalities that has a purified water we will use the water that we have on the ground that we would have to treat anyway in order to put this water back to the rivers.

Speaker #2: We are now improving and we approved additional investments on water treatment in order to have this water as purified and potable to the cities.

Rodrigo Barbosa: We are now negotiating and offering the municipalities and the communities on a possibility to have access to a potable water. Renewable energy and a clean water for the population together with all the local training and focus on having local people working with us, local suppliers. If we don't have suppliers, we train them, we form them so that we can improve the conditions of living for everyone that is around us. In terms of production, this is a project that starts on the feasibility study that we mentioned, with annual production 111,000 ounces. Yet with potential to further access upside as we've been doing in Almas, as we've been doing in Borborema.

Speaker #2: We are now negotiating and offering the municipalities and the communities and possibility to have access to a potable water. So renewable energy and clean water for the population.

Speaker #2: Together with all the local training and focus on having local people working with us, local suppliers. And if you don't have suppliers, we train them, we form them.

Speaker #2: So that we can improve the conditions of living for everyone that is around us. In terms of production, this is a project that starts on the feasibility study that we mentioned.

Speaker #2: With annual production 111, 111,000 ounces. Yet with potential to further access upsides as we've been doing in Almas, as, as we've been doing in Borborema.

Speaker #2: We understand that Adorada also has room for further upsides as we move forward in the operations, as we move implement the project and go to commercial production.

Rodrigo Barbosa: We understand that Era Dorada also has room for further upside as we move forward as operations, as we implement the project and go to commercial production. Now, the very important factors is that the significant increase in terms of reserves of this project that when we acquired as an underground, it was close to a million ounces. Now we have 1.7 million ounces in terms of reserves, and yet with some potential on the regional side to increase our resources and reserves. Next slide. I talked about ramp-up of Borborema now reaching record high production. That's a significant increase of production profile last year and this year, with also lower all-in sustaining cash costs.

Speaker #2: Another very important factor is that the significant increase in terms of reserves of this project that when we acquired as an underground, it was close to a million ounces.

Speaker #2: Now we have 1.7 million ounces in terms of reserves and yet with some potential on the regional side to increase resources and reserves. Next slide.

Speaker #2: So I talked about ramp up of Borborema now reaching record high production that significantly increase our production profile last year. And this year with also lower all in sustaining cash costs.

Speaker #2: Number two, now I'm going to share with you about increasing resource and reserves and we saw a major change in our inventory in reserves and reserves and resources coming from the last report that we filed on the F1 for the Nasdaq listing was 3.4 million ounces in terms of reserves.

Rodrigo Barbosa: Number 2, now I'm gonna share with you about the increase in resource and reserves, and we saw a major change in our inventory in reserves and resources coming from the last report that we filed on the F-1 for the Nasdaq listing was 3.4 million ounces in terms of reserves. Now we are reaching 7.2 million ounces. This is more than double the size of the reserves in 1 single year. Meanwhile, we come from resources of 4.6 million ounces down to 3.1, but that's a very good news because we converted 2.5 million ounces of resources, measured and indicated, into proven and probable. If you add this back to the 3.1, you would see that we also continue to increase our measured indicators.

Speaker #2: Now we are reaching 7.2 million ounces. This is more than double the size of the reserves in one single year. Meanwhile, we come from resources of 4.6 million ounces down to 3.1, but that's a very good news.

Speaker #2: Because we converted 2.5 million ounces of resources American indicated into proven and probable. If you add this back to the 3.1, you would see that we also continue to increase American indicated.

Speaker #2: So this is a major milestone that is helping us to improve our life of mine. While we are also increasing production per year. Next slide.

Rodrigo Barbosa: This is a major milestone that is helping us to improve our life of mine, while we are also increasing production per year. Next slide. I talked about increasing production, I talked about increasing resource and reserves, and now an important factor also to tackle the price per NAV, which is the daily trading volume. As I mentioned to you, we come from a $2 or $3 million, $4 million per day. Along after the listing, we started reaching $20, $10, $30, $40 million. Now we are on last month, we closed April with $120 million per day in daily trading volume. On average, close to $95 million on Q1.

Speaker #2: So I talked about increasing production. I talked about increasing resource and reserves. And now an important factor also to tackle the price per NAV, which is the daily trading volume.

Speaker #2: As I mentioned to you, we come from a two or three million, four million dollars per day. And along after the listing, then we started reaching 20, 30, 40 million dollars.

Speaker #2: And now we are on last month we closed April with 120 million dollars per day in daily trading volume. And on average, close to 95 million dollars on the first quarter.

Speaker #2: So that is attracting way more quantity and quality of investors to our portfolio. So I turn now the presentation to Clever and I'll come back for Q&A.

Rodrigo Barbosa: That is attracting way more quantity and quality of investors to our portfolio. I turn now the presentation to Kleber, and I'll come back for Q&A.

Speaker #2: Thanks, Rodrigo. Good morning, everyone. So I'm going to go over the summary of the main financial KPIs for the quarter. What we can see in a summary is an improvement in basically all of them with revenues at new record high, closing the quarter with 383 million dollars.

Kleber Cardoso: Thanks, Rodrigo. Good morning, everyone. I'm gonna go over a summary of the main financial KPIs for the quarter. What we can see in a summary is an improvement in basically all of them, with revenues a new record high, closing the quarter with $383 million. Now, the last 12 months is we have exceeded revenues of $1.1 billion. Going forward, we expect this trend to continue. When we see the adjusted EBITDA, as Rodrigo commented before, we have reporting it for the sixth quarter in a row, a record high again. A substantial increase compared to Q4 2025, mostly because a higher average gold price in that quarter.

Speaker #2: Now the last 12 months is we have exceeded revenues of 1.1 billion dollars. And going forward, we expect this trend to continue. When we see the adjustability as Rodrigo commented before, we have reporting for the sixth quarter in a row a record high again.

Speaker #2: A substantial increase compared to Q4, 25. That mostly because a higher average gold price in that quarter. So 244 million dollars in the quarter.

Kleber Cardoso: $244 million in the quarter and now exceeding $700 million already in the last 12 months. Also a trend that we expect to continue. When we analyze the net income, we see a substantial improvement compared to the last quarters. That's a combination mainly of two factors. First is the improvement of the operational results, and second is, on this quarter, gold price increased between the beginning and the end of the quarter, but at slightly lower rates than the increase we had in the last few quarters. As a result of that, we had lower mark-to-market losses with gold hedged derivatives that is impacting less our P&L this quarter than previous quarters. Later I'm gonna go over more detail on this as well.

Speaker #2: And now exceeding 700 million dollars already in the last 12 months. Also a trend that we expect to continue. When we analyze the net income, we see a substantial improvement compared to the last quarters.

Speaker #2: That's a combination mean of two factors. First, is the improvement of the operational results. And second is on this quarter, gold price increased between the beginning and the end of the quarter, but at size lower rates than the increase we had in the last few quarters.

Speaker #2: So as a result of that, we had a lower market-to-market losses with gold derivatives. That is impacting less our P&L this quarter than previous quarters.

Speaker #2: Later, I'm going to go over more detail on this as well. But with that, we are reporting 95 million dollars in net income. And then 190 million dollars in adjusted net income.

Kleber Cardoso: With that, we are reporting $95 million in net income and $109 million in adjusted net income. In terms of cash and net debt, mostly stable compared to the year-end. We closed the quarter with $115 million in net debt. And we see an important reduction in the financial leverage of the company as a result of stable net debt and increasing accumulated EBITDA. Our net leverage coming from 0.28 to 0.16 at the end of this quarter. We jump to understand the main items between the adjusted EBITDA, adjusted net income for this quarter.

Speaker #2: In terms of cash in net debt, mostly stable. Compared to the year ends, we closed the quarter with 115 million dollars in net debt.

Speaker #2: And we see an important reduction in the financial leverage of the company as a result of stable net debt and increasing accumulated EBITDA. Our net leverage coming from 0.28 to 0.16 at the end of this quarter.

Speaker #2: Now we jump to understand the main items between the adjustability, adjusted net income for this quarter. Out of the 244 million dollars adjustability we see the three larger gold mines contributed the most.

Kleber Cardoso: Out of the 244 million dollars adjusted EBITDA, we see the 3 larger gold mines contributed the most. Morro do Ouro had the highest EBITDA as we are already anticipating $61 million. Mina and Almas coming strong as well, $58 and close to $50 million respectively. Aranzazu also strong for $1 million. Apoena, which we expect a much stronger H2 than the H1, but already contributing with $24 million. MSG despite we're just starting the turnaround, so contributing as well with $17 million in EBITDA for this quarter. Depreciation and amortization, it's been in line with our expectation. It's been increasing the last 2 quarters basically because we added 2 new operations.

Speaker #2: Borborema had the highest EBITDA as we already anticipating. 61 million dollars. MINOS and ALMAS coming strong as well. 58 and close to 50 million dollars respectively.

Speaker #2: Aranzazu also strong for 1 million dollars. Apoena, which we expect a much stronger second semester than the first semester, but already contributing with 24 million dollars.

Speaker #2: And MSG, despite we're just starting the turnaround, so contributing as well with 17 million dollars in EBITDA for this quarter. Depreciation and amortization is being in line with our expectation.

Speaker #2: It's being increasing the last two quarter basically because we added two new operations. Borborema commercial production in Q4, 25. And now MSG full quarter production in 2026.

Kleber Cardoso: Morro do Bema commercial production in Q4 2025. Now MSG full quarter production in 2026. The net financial expenses, once again, the main items are the non-realized and realized losses with the gold derivatives. The non-realized portion, $24 million. We paid $33 million with realized losses. Combined, it was $55 million compared to over $100 million we had in losses with derivatives in the last quarter. That explains a portion of also the improvements in our net income. Income tax expense is coming as well as expected considering strong results from the operations. Some small other expenses bringing the net income to $95 million.

Speaker #2: The net financial expenses once again the main items are the non-realized and realized losses with the gold derivatives. The non-realized portion 24 million dollars.

Speaker #2: And we paid the 33 million dollars with the realized losses. So combined, it was 55 million dollars compared to over 100 million dollars we had in losses with derivatives in the last quarter.

Speaker #2: So that explains a portion of also the improvements in our net income. Income tax expenses coming as well as expected, consider the strong results from the operations.

Speaker #2: Some small other expenses bringing the net income to $95 million. And then here to the right side, we excluded the typical non-cash items.

Kleber Cardoso: Here to the right side, we excluded the typical non-cash items, the unrealized portion of the losses with the gold derivatives, some non-cash impact in deferred tax income. Excluding those items, the adjusted net income would have been $109 million by the end of the quarter. We bring a detailed analysis of the change in the cash position of the company throughout the quarter. We see on the red on the left side, here, we start with close to $290 million in cash. Here on the left side, we have what we call the recurring free cash flow to firm, which is the cash flow generated now by the six mines in production.

Speaker #2: The unrealized portion of the losses with the gold derivatives. Some non-cash impact in the freight tax income. Excluding those items, the adjusted net income would have been 109 million dollars by the end of the quarter.

Speaker #2: And here we bring a detailed analysis of the change in the cash position of the company throughout the quarter. We see on the red on the left side, here we start with close to 290 million dollars in cash.

Speaker #2: Here on the left side, we have what we call the recurring free cash flow. To affirm, which is the cash flow generating now by the six mines in production.

Kleber Cardoso: That portion of the business generated $95 million. It's pretty much stable compared to the previous quarter. That's mostly there are two items that consume the cash proportionally higher in Q1 than we expected for the rest of the year. First is working capital. We have some temporary increases in accounts payables and inventory in this quarter that should improve in the next few quarters. Also income tax payments, where we paid $52 million in Q1. The Q1 is usually the quarter that we paid most of the taxes where you have annual tax adjustments, especially in Mexico. That will not repeat in the same proportion during the rest of the year.

Speaker #2: That portion of the business generated 95 million dollars. It's pretty much stable compared to the previous quarter. That's mostly that are two items that consume the cash proportionally higher in the first quarter than we expected for the rest of the year.

Speaker #2: First is working capital. We have some temporary increases in accounts payables and inventory in this quarter that should improve in the next few quarters.

Speaker #2: And also income tax payments where we paid 52 million dollars in the first quarter. The first quarter is usually the quarter that we paid most of the taxes where you have annual tax adjustments, especially in Mexico.

Speaker #2: So that will not repeat in the same proportion during the rest of the year. Then in the middle of the chart, we see the investment for growth where we invested 26 million dollars.

Kleber Cardoso: In the middle of the chart, we see the investment for growth, where we invested $26 million, mostly in expansion CapEx, already including Era Dourada. The CapEx, especially the expansion CapEx, is one that we expect to increase throughout the rest of the year, especially as we advance in construction of Era Dourada and also in the expansions in Almas. Here to the right side, we see how we allocated cash in the financial items. We paid close to $20 million in gross debt, reducing the gross debt of the company, and distributed $55 million in dividends, ending our cash close to $207 million by the end of the Q. With this, we end the presentation, open to questions. Thank you.

Speaker #2: Mostly expansion CapEx already including Era Dorada. The CapEx especially the expansion CapEx is one that we expect to increase throughout the rest of the year.

Speaker #2: Especially as we advance in construction of Era Dorada. And also in the expansions in ALMAS. And then here to the right side, we see how we allocated cash in the financial items.

Speaker #2: We paid close to 20 million dollars in gross debt, reducing our the gross debt of the company. And distributed 55 million dollars in dividends ending our cash close to 207 million dollars by the end of the quarter.

Speaker #2: With this, we end the presentation. Open to questions. Thank you.

Speaker #1: Thank you. We are going to start the question and answer section for investors and analysts. If you wish to ask a question, please click on 'raised hand.'

Operator 2: Thank you. We are going to start the question and answer section for investors and analysts. If you wish to ask a question, please click on Raise Hand. If your question has already been answered, you can leave the queue by clicking on Put Hand Down. Our first question comes from Enrique Marquez with Goldman Sachs. You can open your microphone.

Operator: Thank you. We are going to start the question and answer section for investors and analysts. If you wish to ask a question, please click on Raise Hand. If your question has already been answered, you can leave the queue by clicking on Put Hand Down. Our first question comes from Enrique Marquez with Goldman Sachs. You can open your microphone.

Speaker #1: If your question has already been answered, you can leave the cue by clicking on put handout. Our first question comes from Enrique Marquez with Goldman Sachs.

Speaker #1: You can open your microphone.

Speaker #3: Hey. Hi, everyone. Can you hear me?

Enrique Marquez: Hey. Hi, everyone. Can you hear me?

Henrique Marquez: Hey. Hi, everyone. Can you hear me?

Speaker #4: Loud and clear.

Kleber Cardoso: Loud and clear.

Rodrigo Barbosa: Loud and clear.

Speaker #3: Awesome. Yeah. So two questions from my side. First regarding the cost in ALMAS. I think it did came above expectations and even the guidance range for the year.

Enrique Marquez: Awesome. Two questions from my side. First regarding the cost in Apoena, I think it did came above expectations and even like the guidance range for the year. At the same time, this was the only mine you haven't commented on the mine sequence you weighted on the H2 of the year. I just wanted to make sure, first what really drove the higher cost in Q1. Second, do you see any risks to your cost guidance for Apoena? If not, when can we expect some improvement in terms of cost for this mine specifically? Second one, just if you could give us a bit more color on the maintenance stoppage of the CIL plant in Borborema. Is the situation resolved?

Henrique Marquez: Awesome. Two questions from my side. First regarding the cost in Apoena, I think it did came above expectations and even like the guidance range for the year. At the same time, this was the only mine you haven't commented on the mine sequence you weighted on the H2 of the year. I just wanted to make sure, first what really drove the higher cost in Q1. Second, do you see any risks to your cost guidance for Apoena? If not, when can we expect some improvement in terms of cost for this mine specifically? Second one, just if you could give us a bit more color on the maintenance stoppage of the CIL plant in Borborema. Is the situation resolved?

Speaker #3: But at the same time, this was the only mine you haven't commented on the mine sequency weighted on the second half of the year.

Speaker #3: So, I just wanted to make sure first—what really drove the higher cost in Q1? And second, do you see any risks to your cost guidance for Almas, and if not, when can we expect some improvement in terms of cost for this mine specifically?

Speaker #3: And second one, just if you could give us a bit more color on the main and stoppage of the CIL plant in Borborema. Is the situation resolved?

Enrique Marquez: Should we see any impacts on the Q2? That would be great. Thank you.

Speaker #3: Should we see any impacts on the second quarter? That would be great. Thank you.

Henrique Marquez: Should we see any impacts on the Q2? That would be great. Thank you.

Rodrigo Barbosa: Sure. Well, in Almas, while you mentioned, that Almas had a higher cash cost compared to the guidance. I would also invite you to take a look now in sustaining cash costs. That was actually below the guidance. In Q1, what we had is the highest strip ratio and slightly lower grades, but along that will improve during the H2. We are very much in line with the guidance for Almas. We should also see improvement in MSG during the H2. We should also see some improvement in Borborema. Mina is stable, and Aranzazu some improvement also during the H2.

Speaker #4: Sure. Well, in ALMAS, while you mentioned that ALMAS had a higher cash cost compared to the guidance, I would also invite you to take a look.

Speaker #4: No insustaining cash cost. There was actually below the guidance. In the first quarter, what we had is a highest repo ratio. And slightly lower grades.

Speaker #4: But along that, we improved during the second semester. So we are very much in line with the guidance for ALMAS. And we should also see improvement in MSG during the second semester.

Speaker #4: We should also see some improvement in Borborema. Minnosa stable. And Aranzazul some improvement also during the second semester. So as we saw over in the past, where the first semester is lower production and we see we should see actually significant improve on the second semester in terms of production.

Rodrigo Barbosa: As we saw in the past where the H1 is lower production, and we should see actually significantly improve on the H2 in terms of production, not on Q2, but Q3 and Q4. This varies about a mine sequencing. As just a quick remind for investors is that when we have a gold mining is very different from a major copper or iron ore, where it's a disseminated. The grades doesn't vary and the strip ratio doesn't vary. Gold, the nature is not homogeneous. It's always, they always vary quarter by quarter. Sometimes you reach higher grades or sometimes lower grades. Sometimes you need to push back the pit increase a strip ratio.

Speaker #4: Not on the second quarter, but third and fourth quarter. This varies about a mine sequencing. As just a quick reminder for investors, is that when we have a gold mining, it's very different from major copper or iron ore where the disseminated, the grades doesn't vary and the strip ratio doesn't vary.

Speaker #4: And gold, the nature is not homogeneous. It's always very quarter by quarter. Sometimes you reach higher grades or sometimes lower grades. Sometimes you need to push back the beat, increase strip ratio.

Speaker #4: Sometimes you just collect what you already pushed back the beat. So there is some volatility in terms of the quarter. Which if you look back on the last four years, that's what happened throughout volatility in quarter to quarter.

Rodrigo Barbosa: Sometimes you just collect what you already pushed back the pit. There is some volatility in terms of the quarter, which if you look back on the last 4 years, that's what happened to our volatility quarter to quarter. Actually, when we go to the average of the year, we are very much in line with the guidance that we provide to the market. We are very, very much comfortable that we are moving ahead with our guidance actually, on the upper hand of the guidance in terms of production.

Speaker #4: But actually, when we look at the average for the year, we are very much in line with the guidance that we provided to the market.

Speaker #4: So we are very, very much comfortable that we are moving ahead with our guidance. Actually, on the upper hand of the guidance in terms of production.

Speaker #3: Thank you. Yeah. I just wanted to clarify.

Enrique Marquez: Thank you. Yeah, I just wanted to clarify.

Henrique Marquez: Thank you. Yeah, I just wanted to clarify.

Rodrigo Barbosa: Borborema, you mentioned about the CIL. Borborema, it's now producing very well. There's still improvements that we can do, mainly on filters. This is the filters where we have the bottleneck. Although we overestimated now, the filters are performing very close or slightly below the plant capacity. We are now, we already ordered, we are already in construction of additional filters, already preparing them for further expansion. The new filters will also unlock some bottlenecks and that those filters will be started during Q3 and Q4. We should see also some improvements in Borborema in terms of production during the years, while we are finalizing our expansion plan for Borborema to reach 4 million tons on the upcoming years.

Speaker #4: And Borborema you mentioned about the CIL. Borborema it's now producing very well. They're still improvements that we can do mainly on filters. This is the filters where we have the bottleneck.

Speaker #4: Although we overestimated, now the filters are performing very close to or slightly below the plant capacity. So we are now—we've already ordered, we are already in construction of additional filters.

Speaker #4: Already preparing them for further expansion. So the new filters will also unlock some bottlenecks and those filters will be started during Q3 and Q4.

Speaker #4: So we should see also some improvements in Borborema in terms of production. During the years, while we are finalizing our expansion plan for Borborema to reach 4 million tons, on the upcoming years.

Speaker #3: Great. Thank you.

Enrique Marquez: Great. Thank you.

Henrique Marquez: Great. Thank you.

Speaker #1: Our next question comes from Rafael Barcelos with Bradesco BBI.

Operator 2: Our next question comes from Rafael Barcellos with Bradesco BBI.

Operator: Our next question comes from Rafael Barcellos with Bradesco BBI.

Speaker #5: Good morning. Thanks for taking my questions. Rodrigo, despite being solid results, I think there are some watch points when we compare the numbers with your production and cost guidance, right?

Rafael Barcellos: Good morning. Thanks for taking my questions. Rodrigo, despite being, you know, solid results, I think there are some watch points when we compare the numbers with your production and cost guidance, right? I just wanted to get a sense of which operations bring some concerns to you when you compare the production and cost evolution versus the guidance for the year. Lastly, if you can give us more details on your expectations for H2 of this year in terms of, again, of production and costs. As a second question, particularly on the cost side, I mean, a lot has happened since you announced the cost guidance, right? I mean, we have the outbreak of the Middle East conflict.

Speaker #5: So, I just wanted to get a sense of which operations bring some concerns to you when you compare the production and cost evolution versus the guidance for the year.

Speaker #5: And lastly, if you can give us more details on your expectations for the second half of this year in terms of, again, of production and cost.

Speaker #5: And as a second question, particularly on the cost side, I mean, a lot has happened since you announced the cost guidance, right? I mean, we have the outbreak of the Middle East conflict.

Speaker #5: So I just wanted to understand what sort of cost pressure you're seeing driven by the conflict. And if you can give more details on the specific impacts on the cost side.

Rafael Barcellos: I just wanted to understand what sort of cost pressure you're seeing driven by the conflict, and if you can give, you know, more details on the specific impacts on the cost side? Thank you.

Speaker #5: Thank you.

Speaker #4: Sure. No, thank you for the question, Rafael. Where it has been more challenging on the short term and not structural for us is MSG, of course.

Rodrigo Barbosa: Sure. No, thank you for the question, Rafael. Where it has been more challenging in the short term and not structural for us is MSG, of course. We were not expecting as low standards compression, what we can put in terms of infrastructure and underground mine. We are now putting more effort, improving underground conditions, in order to bring that mine into the productivity that I believe that can be achieved. Every time we have any kind of issues in MSG, as I was mentioning to the market in the last quarter, we will always focus on the underground development, even if it has to jeopardize the production of the mine.

Speaker #4: We were not expecting as low standard compared to what we can put in terms of infrastructure and underground mines. So we are now putting more effort improving underground conditions in order to bring that mine into the productivity that we believe that can be achieved.

Speaker #4: And every time we have any kind of issues and in MSG, as I was mentioned to the market in the last quarter, we will always focus on the underground development.

Speaker #4: Even if it has to jeopardize the production of the mine. So if you have any equipment, bottleneck, we'll divert all the equipment into underground development, not focus on production.

Rodrigo Barbosa: If you have any equipment bottleneck, we will divert all the equipment into underground development, not focus on production. That's what the main mistakes that the past owner was doing, is focusing too much on production and not doing the underground. We need to unbottleneck the underground mine. This is taking more time than we expected. That's things that we can correct, things that we can manage. That's within the budget that we were projecting to invest $20 to 30 million in order to improve that conditions in the mine. On the other hand, structurally, the mine is actually better than what we expected.

Speaker #4: That's what the main mistakes that the past owner was doing is focusing too much on production and not doing the underground. So we need to unbottleneck the underground mine.

Speaker #4: This is taking more time that we expected. But that's things that we can correct, things that we can manage. And that's under the within the budget that we were projecting to invest 20 to 30 million dollars in order to improve that conditions in the mine.

Speaker #4: On the other hand, structurally, the mine is actually better than what we expected. We saw a significant increase in the life of mine and resource and reserves of the mine coming from 340, 350 thousand up to 700 thousand ounces.

Rodrigo Barbosa: We saw a significant increase in the life of mine and resource and reserve of the mine come from 340, 250,000 up to 700,000 processing. Still a lot of room to continue to improve our resource and reserves in that mine that we have not yet even started to take a look on the exploration we are focused on the mine. Long term, medium to long term projections on this mine is actually way better than we expected. Short term, more challenging. This is where we should see at the low range of the guidance. While some other mines also, we can go beyond what we were expecting to offset part of this.

Speaker #4: And still a lot of room to continue to improve resources and reserves in that mine that we have not yet even started to take a look on the exploration.

Speaker #4: We are focused on the mine. So long term, medium to long term, projections on this mine is actually way better than we expected. Short term, more challenging.

Speaker #4: And this is where we should see at the low range of the guidance. While some other mines are also we can go beyond what we were expecting to offset part of this.

Speaker #4: But yet it's not our focus to have a high production this year in MSG. It's our focus is to improve underground mine conditions and finish the year with a very clear view that we can bring that mine above 80,000 ounces of production per year and close to $2,000 of all-in sustaining cash cost.

Rodrigo Barbosa: Yet, it's not our focus to have a high production this year in MSG, our focus is to improve underground mine conditions and finish the year with a very clear view that we can bring that mine above 80,000 ounces of production per year and close to $2,000 of all-in sustaining cash costs. That hasn't changed. Actually, as I mentioned, where we're doing underground development, we are moving far more efficient than we're doing in the past. Again, we're moving about 35 meters per month. Now we're reaching 60, 65 meters per month. This is being very satisfactory to see that we can, once we put them underground into our efficiency on the stable conditions, so that we can improve efficiency according to our plan.

Speaker #4: And that hasn't changed. Actually, when as I mentioned, where we're doing underground development, we are moving far more efficient that they were doing in the past.

Speaker #4: Again, they were moving about 35 meters per month. Now we are reaching 60, 65 meters per month. And this is being very satisfactory to see that we can once we put them underground into our efficiency on the stable conditions so that we can improve efficiency according to our plan.

Speaker #4: In terms of the cost of diesel, this is all across the world that's happening. Our impact in all-in sustaining cash cost of the diesel should be between depend on the mine 6 to 8 percent.

Rodrigo Barbosa: In terms of the cost of diesel, this is all across the world that it's happening, or impacting all the sustaining cash costs of the diesel, should be between, depend on the mine, 6% to 8%. Even if you increase 10% or 20%, that will have a 1% or 2% impact on our sustaining cash cost. That. Of course, then higher diesel triggers some inflation, many other different matters, but there's no other sector that is way protected to inflation, against inflation, that's gold and slightly copper. If inflation picks up, gold is gonna increase. Somehow the investors are very well protected in this sector through inflation in US dollars.

Speaker #4: Even if you so even if you increase 10 percent or 20 percent, that will have a 1 or 2 percent impact on our sustaining cash cost.

Speaker #4: So that and of course, then higher diesel triggers some inflation, many other different metals. But there's no other sector that is way protected to inflation.

Speaker #4: I guess inflation is that's called and slightly copper. So if inflation picks up, gold is going to increase. So somehow the investors are very well protected.

Speaker #4: In this sector, through inflation in US dollars.

Speaker #5: Thanks, Rodrigo. Just to sorry. No, just as a follow-up on the first question. So I understand that you're flagging more challenges on the EMS on the MSG side.

Rafael Barcellos: Thanks, Rodrigo.

Rafael Barcellos: Thanks, Rodrigo. Sorry. No, just as a follow-up on the first question. I'm understanding that, you know, you're flagging more challenges on the MSG side. Is there any other, you know, operation that you'd like highlight as a watch point or anything that, you know, we should look at particularly in the H2? Thank you.

Rafael Barcellos: Sorry. No, just as a follow-up on the first question. I'm understanding that, you know, you're flagging more challenges on the MSG side. Is there any other, you know, operation that you'd like highlight as a watch point or anything that, you know, we should look at particularly in the H2? Thank you.

Speaker #5: But is there any other operation that you'd like highlight as a watch point or anything that we should look at, particularly in the second half?

Speaker #5: Thank you.

Speaker #4: No, you should see upsides coming from Almas. as. We continue to do exploration. We are increasing capacity. That mine, we are as I mentioned, we know and we already expanded to 3 million tons per year.

Rodrigo Barbosa: No, you should see upsides coming from Apoena as we continue to do exploration, we are increasing capacity. That mine, we are, as I mentioned, we know, we already expanded to 3 million tons per year. We are just waiting for more confirmation and more exploration information in order to go even further and perhaps go to 4 million tons per year, which will combine several open pits and also underground development. That's a very important upside that can, should be tackled by the market in the upcoming quarters. Together with Borborema, that we are also now, as we signed the contract to relocate the road, now we are finalizing all the engineering for improving capacity up to 4 million tons.

Speaker #4: And we are just waiting for more confirmation and more exploration information in order to go even further and perhaps go to 4 million tons per year, which we'll combine several open pits and also the ground development.

Speaker #4: So that's a very important upside that can and should be tackled by the market in the upcoming quarters. Together with Borborema, that we are also now, as we sign the contract, to relocate the road.

Speaker #4: And now we are finalizing all the engineering for improving capacity up to 4 million tons. Also, we have several alternatives for more access to water, which is important in order for us to increase capacity.

Rodrigo Barbosa: Also, we have several alternatives for more access to water, which is important in order for us to improve, increase capacity. In the following couple of months, we should have a decision on that, wrapping up with the new engineering so that we can approve in the board in the, between Q2 or Q3, expansion for Borborema. Expansion coming up in Almas, expansion coming up in Borborema. While we continue to develop Era Dourada now going into full construction.

Speaker #4: And on the following couple of months, we should have a decision on that wrapping up with the new engineering. So that we can approve in the board between Q2 or Q3 expansion for Borborema.

Speaker #4: So expansion coming up in Almas, expansion coming up in Borborema. While we continue to develop Era Dorada now going into full construction.

Speaker #5: Okay, perfect. Thank you.

Rafael Barcellos: Okay, perfect. Thank you.

Speaker #1: Our next question comes from Lucas Lagi with XP.

Operator 2: Our next question comes from Lucas Laghi with XP.

Operator: Our next question comes from Lucas Laghi with XP.

Speaker #5: Hi, everyone. Good morning. Thank you for taking my questions. To follow up from our side, the first one is MSG. And Rodrigo, you commented on some of the improvements that we expect throughout the year.

Lucas Laghi: Hi, everyone. Good morning. Thank you for taking my questions. Two follow-ups from our side. The first one on MSG. I mean, Rodrigo, you commented on some of the improvements that we expect throughout the year, but just wanted to better understand the timeline regarding the turnaround on the project. I mean, now that you're much more familiar with the operations, what could we expect in terms of run rate production by year-end? You mentioned that we should expect some decrease by Q2, but just wanted to understand what could be the run rate by the year-end. What are the most important milestones that we should be aware on such turnaround? Finally, still on MSG.

Speaker #5: But just wanted to better understand the timeline regarding the turnaround on the project. I mean, now that you're much more familiar with the operations, what could we expect in terms of run rate production by year end?

Speaker #5: You mentioned that we should expect some decrease by second Q. But just wanted to understand what could be the run rate by the year end.

Speaker #5: And what are the most important milestones that we should be aware on such turnarounds? And finally, still on MSG, I mean, just to clarify, but do you see any upside considering the potential normalized volumes for the operations by the end of this turnaround?

Lucas Laghi: I mean, just to clarify, but do you see any upside, considering the potential normalized volumes for the operations by the end of this turnaround? My second question on Borborema, another follow-up, but you mentioned the expansion, right? The 4 million tons of plant feed after the expansion. Just to get a better idea on timeline, I mean, how when could we see such investments being deployed? If you could give us any idea on CapEx and production improvement considering the marginal grades for the expansion would also be very helpful. Thank you.

Speaker #5: And my second question on Borborema, another follow-up, but you mentioned the expansion, right? The 4 million tons of planted after the expansion. Just to get a better idea on timeline, I mean, when could we see such investments being deployed?

Speaker #5: And if you could give us any idea on CAPEX and production improvement considering the marginal grades for the expansion, would also be very helpful.

Speaker #5: Thank you.

Speaker #4: Okay. No, for MSG, the idea is to finish the year with a very clear view that we will be able for the next year to be close to 80,000 ounces of production per year.

Rodrigo Barbosa: Okay. No, for MSG, the idea is to finish the year with a very clear view that we will be able for the next year to be close to 80,000 ounces of production per year and close to $2,000 of our sustaining cash cost. That's our main objective. Our key drivers for you to take a look on that is how far, how fast we are advancing on the underground development. That's why I reinforced that. In the past year, we're doing 30, 35 meters per month. Now we are close to 60, 65 meters. We should continue to advance underground development so that we can invert the methodology, right? Now the mine is operating from up to down, and now we need to do underground development in excess so we can start doing bottom up.

Speaker #4: And close to $2,000 of all-in sustaining cash cost. That's our main objective. A key drivers for you to take a look on that is how fast we are advancing on the underground development.

Speaker #4: That's why I reinforced that in the past we were doing 30, 35 meters per month. Now we are close to 60, 65 meters. So we should continue to advance under the ground development so that we can invert the methodology, right?

Speaker #4: Now the mine is operating from up to down. And then we need to do underground development in excess so we can start doing bottom up.

Speaker #4: This is what will change structurally our efficiency and dilution and also productivity at the mine. So and we need time to do that, right?

Rodrigo Barbosa: This is what will change, structurally, our efficiency, recover, dilution and also productivity at the mine. We need time to do that, right? We cannot do all those underground development in a couple of months. It takes several months, and we believe that we'll be able to conclude that preparation by the end of this year. You should not see strong numbers, very strong numbers on Q1. Q2, as I mentioned, slightly and gradual increased progress on Q3 and Q4, not because of the structurally the diversion of the methodology, but now we are gaining efficiency, reducing costs all across the board with contracts, redefining some scope with suppliers and so on. That's all happening at the same time.

Speaker #4: We cannot do all those underground development in a couple of months. It takes several months. And we believe that we will be able to conclude that preparation by the end of this year.

Speaker #4: So you should not see a strong numbers, very strong numbers on Q1. Q2, as I mentioned, slightly and gradually increase progress on Q3 and Q4.

Speaker #4: Not because of structurally the diversion of the methodology, but now we are gaining efficiency reducing costs all across the board with contracts redefining some scope with suppliers and so on.

Speaker #4: So that's all happening at the same time. And we are very comfortable that we will achieve this goal by the end of the year.

Rodrigo Barbosa: We are very comfortable that we will achieve this goal by the end of the year. In terms of our Borborema, we have not yet approved in the board and disclosed the CapEx. Unfortunately, I cannot yet give you a guidance on this, but we will do so as we approve the information, the board. Investment, relocating the road, preparing our water assessment and everything should take close to two years. We will get more precise information as we approve in the board. As you well mentioned, we should not expect, for example, to keep exactly the same grades or doubling the capacity does not necessarily mean that we will double the production because then we can supply the additional capacity with a lower grade.

Speaker #4: In terms of Borborema, we have not yet approved in the board and disclosed the CAPEX. Unfortunately, I cannot yet give you a guidance on this.

Speaker #4: But we will do so as we approve the information in the board. And the investment relocating the world, preparing water assessment and everything should take close to two years but we will get more precise information as we approve in the board.

Speaker #4: And as you well mentioned, you should not expect for example, to keep exactly the same grade. So doubling the capacity does not necessarily mean that we'll double the production.

Speaker #4: Because then we can supply the additional capacity with a lower grade. Of course, when you have a restricted capacity, you focus on higher grade.

Rodrigo Barbosa: Of course, when you have a restricted capacity, you focus on higher grade. When you increase capacity, then you can have both high grade and medium grade. That will translate into a higher production, will translate in lower cash costs as well, but not necessarily will double the gold production.

Speaker #4: When you increase capacity, then you can have both high grade and medium grade. So that's what we will translate into—a higher production will translate in a lower cash cost as well.

Speaker #4: But not necessarily will double the goal production.

Speaker #5: Got it. Perfect. Thank you very much.

Lucas Laghi: Got it. Perfect. Thank you very much.

Speaker #1: Our next question comes from Lawson Winder with Bank of America.

Operator 2: Our next question comes from Lawson Winder with Bank of America.

Operator: Our next question comes from Lawson Winder with Bank of America.

Speaker #6: Thanks. Thank you very much. And hello, Rodrigo. Nice to hear from you. Appreciate the update today. First question I'd like to ask about staging there's a number of projects happening at the current moment.

Lawson Winder: Thanks. Thank you very much. Hello, Rodrigo. Nice to hear from you. Appreciate the update today. First question I'd like to ask about staging. There's a number of projects happening at the current moment. There's the Borborema expansion. You're looking at going underground at Almas. There's Matupa waiting right after Era Dorada. Are you confident that you have a large enough team in place that you guys can handle all this? Then in answering that question, how do you think about the staging of all these projects and making sure that you have the best people in the right place at the right time?

Speaker #6: There's the Borborema expansion. You're looking at going underground at a mass. There's Matthew Paa waiting right after Ero Dorado. Are you confident that you have a large enough team in place that you guys can handle all this?

Speaker #6: And then, in answering that question, how do you think about the staging of all these projects and making sure that you have the best people in the right place at the right time?

Speaker #4: Thank you. For the question, Lawson, and that's our main discussions that we have internally. It's about people. We have a lot to perform in our a lot of to increase capacity.

Rodrigo Barbosa: Thank you for the question, Lawson. That's our main discussions that we have internally. It's about people. We have a lot to perform in order a lot of to increase capacity. Very few companies in the world can come from close to 300, 285,000 ounces of production last year and in the upcoming years, reach over 600,000 ounces without new M&As, which we are also planning to do. That, of course, drags a lot of management attention. We have a very strong team to build new mines. It's the same team that built Almas. It's the same team that built Borborema. It's the same team that's now in Era Dorada. Of course, this team is increasing.

Speaker #4: Very few companies in the world can come from close to 300 to 185,000 ounces of production last year. And the upcoming years reach over 600,000 ounces without new M&As, which we are also planning to do.

Speaker #4: And that, of course, drags a lot of management attention. We have a very strong team to build new mines. It's the same team that built Almas.

Speaker #4: It's the same team that built Borborema. It's the same team that's now in Era Dorado. Of course, this team is increasing. The good thing is that's why we are not overlapping the construction of Era Dorado and Matopá, right?

Rodrigo Barbosa: The good thing is that we are not, that's why we are not overlapping the construction of Era Dorada and Matupa, right? We don't wanna build both. We could start building Matupa right now. It's fully licensed, and we have the feasibility study. We are updating 'cause we are gonna incorporate new deposits. We wanna create a lag in order not to overlap the same functions of the team. During the construction, we have the preparement early works, then we have then the plant and the ramp up, right? We don't wanna overlap exactly the same. We want to lag. Perhaps build, start construction of Matupa during next year, where we will be already on the final phase of Era Dorada.

Speaker #4: We don't want to build both. We could start building, but Matopá right now, it's fully licensed and we have the feasibility study. Although we are updating because we are going to incorporate a new deposits.

Speaker #4: But we want to create a lag in order not to overlap the same functions of the team. So and then during the construction, we have the preparement, early works.

Speaker #4: Then we have, then, the plant and the ramp-up, right? So we don't want to overlap exactly the same—we want to lag. So perhaps start construction of Matopá during next year, when we will already be in the final phase of Ero Dorado and Ero Dorado.

Rodrigo Barbosa: In Era Dorada, we already be on the very good speed. The team also combined with the local team in Borborema and Almas. It's not taking full attention from the construction team in Borborema and full attention of the construction team in Almas, where there's some shared activities. We have also, we're gonna bring the engineers and construction team also into the sites, not only using the Era Dorada team. It is things that we need to pay close attention. That's most of why we are not overlapping construction of Matupa and Era Dorada. It's something that we cannot disregard, and that's a concern that we have. That's what, where myself, Glauber, the technical team is spending a lot of time.

Speaker #4: We already be on the very good speed, and while the team also combined with the local team in Borborema and Almas, so it's not taking full attention from the construction team in Borborema and full attention of the construction team in Almas, where there's some shared activities.

Speaker #4: And we have also—we’re going to bring the engineers and construction team also into the sites, not only using the Era Dorado team. So, these are things that we need to pay close attention to.

Speaker #4: That's most of why we are not overlapping construction of Matopá and Era Dorado. But it's something that we cannot disregard. And that's a concern that we have and that's what where myself, Glauber, the technical team is spending a lot of time.

Speaker #6: And I think you read my mind because you mentioned M&A as another demand on the time of management. Could you just describe the current pipeline of M&A opportunities, particularly vis-à-vis last year and the year before?

Lawson Winder: I think you read my mind because you mentioned M&A as another demand on the time of management. Could you just describe the current pipeline of M&A opportunities, particularly vis-à-vis, you know, the last year and the year before? I mean, would you describe the opportunity as increasing or decreasing? Any commentary on sort of valuation where sellers are thinking of valuation and where buyers are, and whether there's a gap there or whether you think there's room for negotiation.

Speaker #6: I mean, would you describe the opportunity as increasing or decreasing? And any commentary on sort of valuation where sellers are thinking evaluation and where buyers are and whether there's a gap there or whether you think there's room for negotiation?

Speaker #4: Yeah, good question. It was increasing opportunities. But not for the right reasons just because in the past just a couple of months ago, when gold price reached 5,500 or 5,400, increased the number of opportunities.

Rodrigo Barbosa: Yeah, good question. It was increasing opportunities, but not for the right reasons, just because in the past, just a couple of months ago, when gold price reached $5,500 or $5,400, increased a number of opportunities, but the expectation of the seller was completely out of what we would also paying. Now we see some. It's accommodating the expectation of the seller and expectation of the buyer. There's still some gap, there's more room to work. We are confident that now we can Can get more traction in M&A activities along the year. Of course, it's unpredictable. M&A is, it's a combination of what we want and or what is available.

Speaker #4: But the expectations of the seller were completely out of what we would also pay. But now we see some, it's accommodating the expectation of the seller and the expectation of the buyer.

Speaker #4: There's still some gap, but there's more room to work. So we are confident that now we can engage in a more attractive can get more traction in M&A activities along the year.

Speaker #4: Of course, it's unpredictable. M&A is a combination of what we want and what is available. But the fact is there are opportunities. We are looking few alternatives.

Rodrigo Barbosa: The fact is there are opportunities. We are looking for alternatives. There's nothing that is advanced. There's nothing that is close to happen. We are, of course, prospecting and engaging few different conversations. M&A is like an investor, what the investor does, right? They select 10 companies, start analyzing, deep diving in six, start negotiation five to get only one, right? That's. It takes time.

Speaker #4: There's nothing that is advanced. There's nothing that is close to happen. But we are, of course, prospecting and engaging in a few different conversations. M&A is like an investor.

Speaker #4: What the investor does, right? They select 10 companies, start analyzing, deep diving in six, start negotiation with five to get only one, right? So that's—and it takes time.

Speaker #6: Okay. Thank you. That's all my questions. Today's update has been very helpful. Thank you for that.

Lawson Winder: Okay. Thank you. That's all my questions. Today's update has been very helpful. Thank you for that.

Speaker #4: Thank you, Lawson.

Rodrigo Barbosa: Thank you, Lawson.

Speaker #1: Our next question comes from Tatyani Kanjini with JPMorgan.

Operator 2: Our next question comes from Taciane Condini with JP Morgan.

Operator: Our next question comes from Taciane Condini with JP Morgan.

Speaker #7: Hello, everyone. Good morning. Can you hear me well?

Taciane Condini: Hello, everyone. Good morning. Can you hear me well?

Tathiane Candini: Hello, everyone. Good morning. Can you hear me well?

Speaker #8: Yes.

Rodrigo Barbosa: Yes.

Speaker #7: Okay. So I think I just have a couple of follow-ups from the questions that you already answered. So my first one and I would just follow up on the question that you just answered on M&As.

Taciane Condini: Okay. I think I just have, like, a couple of follow-ups from the questions that you already answered. My first one, and I would just follow up on the question that you just answered on M&A. As you already flagged, I think we have, like Matupa already under the radar. The company still have a very, like, comfortable cash flow and actually balance sheet position at this point. My first question here is when it comes to M&A, you mentioned that you know what you want. Can you share just a little bit on what are the main perspectives that you search when you are thinking about the M&A, if you have, like any specific region that you see more availability, if you want to grow more in Brazil.

Tathiane Candini: Okay. I think I just have, like, a couple of follow-ups from the questions that you already answered. My first one, and I would just follow up on the question that you just answered on M&A. As you already flagged, I think we have, like Matupa already under the radar. The company still have a very, like, comfortable cash flow and actually balance sheet position at this point. My first question here is when it comes to M&A, you mentioned that you know what you want. Can you share just a little bit on what are the main perspectives that you search when you are thinking about the M&A, if you have, like any specific region that you see more availability, if you want to grow more in Brazil.

Speaker #7: So, as you already flagged, I think we have Matopá already under the radar. The company still has a very comfortable cash flow and, actually, balance sheet position at this point.

Speaker #7: So my first question here is when it comes to M&A, you mentioned that you know what you want. So can you share just a little bit on what are the main perspectives that you search when you are thinking about the M&A if you have any specific region that you see more availability if you want to grow more in Brazil?

Speaker #7: So just to understand a little bit of the profile that you are looking to the next M&As. And I will do my question after.

Taciane Condini: Just understand a little bit of the profile that you are looking to the next M&As. I will do my question after.

Tathiane Candini: Just understand a little bit of the profile that you are looking to the next M&As. I will do my question after.

Speaker #4: No, I think it's clear that we are America's player. North America, Central America, and South America player. We are not focusing and looking alternatives in Africa, Asia, or Australia.

Rodrigo Barbosa: No, I think it's clear that we are Americas player, North America, Central America, and South America player. We are not focusing in looking alternatives in Africa, Asia, or Australia. We are gold and copper, we look in both sides. We like combination of gold and copper. We used to be 30% copper, 70% gold. Gold price has improved. We are investing in gold mostly in the last 3 years, the copper is being reduced. We would like preferably to increase copper in our portfolio, but yet the alternative that we've been seeing gold is way more attractive. That's why we are now more on gold. In terms of, we don't look for state-of-the-art projects. Those projects are state-of-the-art and flagship assets.

Speaker #4: We are a gold and copper so we look in both sides. We like combination of gold and copper. We used to be 30% copper, 70% gold, gold price has improved.

Speaker #4: We are investing in gold in mostly in the last three years. So the copper is being reduced but we would like preferably to increase our copper in our portfolio.

Speaker #4: But yet the alternatives that we've been seeing gold is way more attractive. So that's why we are now more on gold. In terms of we are not we don't look for state-of-the-art projects.

Speaker #4: Those projects state-of-the-art and flagship assets they tend to be overpriced and overvalued. So normally companies overpay for state-of-the-art projects. That is a full feasibility big production higher grades and no concern in any kind of jurisdiction or so ever.

Rodrigo Barbosa: They tend to be overpriced and overvalued. Normally companies overpay for state-of-the-art projects that has full feasibility, big production, higher grades and no concern in any kind of risks or so on. I think if you look, what we've done in the past is a very good example in what we look, we would look in the future. Take Borborema, that was already. We don't like also to take full exploration risk. We are not exploration developer. We don't feel we have the skills to find new mines out of the blue. We need, we like to enter in projects that already has good progress in terms of exploration, significantly de-risk also in exploration. Borborema has already resources and reserves, had problem with water access.

Speaker #4: So I think if you look what we've done in the past it's a very good example on what we look we would look in the future.

Speaker #4: Take Borborema. That was already we don't like also to take a full exploration risk. We are not an exploration developer. We don't feel we have the skills to find new mines out of the blue.

Speaker #4: We need we like to enter in projects that already has good progress in terms of exploration significantly that risk also in exploration. Borborema has already resources and reserves had problem with our access.

Speaker #4: We had an angle to solve the water access and then we could implement the project. Era Dorada could be defined as state-of-the-art in terms of grades and capacity but had a strong local and community opposition because the project was open pit we converted back to underground.

Rodrigo Barbosa: We had an angle to solve the water access, and then we could implement the project. At Era Dorada, could be defined as state-of-the-art in terms of grades and capacity, but had a strong local and community opposition because the project was open pit. We converted back to underground, so we could unlock the opposition from the community. Actually, now they support the project. That's why we are moving forward with them. Those are greenfield projects close to construction. Not a lot of exploration risk, but had some issues that we had to put our people to work and unlock the value. Other example, MSG, a mine that's already operating, but not core or major players.

Speaker #4: So we could unlock the opposition from the community to actually now they support the project. That's why we are moving forward with them. So and so those are greenfield projects close to construction.

Speaker #4: Not a lot of exploration risk but had some issues that we had to put our people to work and unlock the value. Another example MSG a mine that's already operating but not core or major players.

Speaker #4: That is underperforms in terms of productivity that we understand that we can buy for a good value implement all that we know how to do the turnaround improve efficiency gains and then put that mine into higher production.

Rodrigo Barbosa: That underperforms in terms of productivity that we understand that we can buy for a good value, implement all that we know how to do to turn around, improve efficiency gains. Then, put that mine into a higher production. There's always going to be a very strong eyes on where are we adding value to that project, not just buying for full price to increase capacity by size on objective.

Speaker #4: So there's always going to be a very strong eyes and aware are we adding value to that project not just buying for full price to increase capacity by size on the objective.

Speaker #7: Very clear on that one. And the second question is still on MSG. I think that's the main subject here today. So when we check your guidance on cost, of course, they are higher than the average of your projects.

Taciane Condini: Very clear on that one. The second question is still on MSG, I think that's the main subject here today. When we check your guidance on costs, of course, they are higher than the average of your project. This kind of implies that your H2 costs are going to be like almost half. How confident do you feel that this is going to be delivered? What is your main struggle to actually reach that guidance? Do you feel that, like we discussed a lot of moving parts, right? With the underground development, with the effects, also with the diesel. Do you feel there is, like, a room for this to get even, like, further than the top of your guidance here?

Tathiane Candini: Very clear on that one. The second question is still on MSG, I think that's the main subject here today. When we check your guidance on costs, of course, they are higher than the average of your project. This kind of implies that your H2 costs are going to be like almost half. How confident do you feel that this is going to be delivered? What is your main struggle to actually reach that guidance? Do you feel that, like we discussed a lot of moving parts, right? With the underground development, with the effects, also with the diesel. Do you feel there is, like, a room for this to get even, like, further than the top of your guidance here?

Speaker #7: But this kind of implies that your second half costs are going to be almost half. So how confident do you feel that this is going to be delivered?

Speaker #7: Do you have any what is your main struggle to actually reach the guidance? Do you feel that anything we discussed a lot of moving parts, right, with the underground development with the facts.

Speaker #7: Also with the diesel. So do you feel there is a room for this to get even further than the top of your guidance here?

Speaker #4: No, I don't know where you got the number that we need to now perform as a health during the second semester because that should be also have a higher production so on the weighted average.

Rodrigo Barbosa: No, I don't know where you got the number that we need to now perform as a half during the H2 because that should be also have a higher production. On the weighted average, maybe, I'm not sure which calculations you made. There will be.

Speaker #4: Maybe not sure which calculations you made. But there will be improvement on the second semester. Structurally.

Taciane Condini: No, no. Yeah.

Tathiane Candini: No, no. Yeah.

Rodrigo Barbosa: -improvement on the second semester. structurally-

Taciane Condini: Yeah. Sorry. Just mention that is like, just thinking on cash costs per ton, as an average. That, that's fair.

Tathiane Candini: Yeah. Sorry. Just mention that is like, just thinking on cash costs per ton, as an average. That, that's fair.

Speaker #7: It's mentioned that it's just thinking on cash cost per ton. As an average. But that's fair.

Speaker #4: Yeah. But structurally we will see improvement in Q3 and Q4. Structurally is a mine that will not have the average of our aura. Structurally is a mine actually that will push our own sustaining cash cost above the average that we have.

Rodrigo Barbosa: Yeah. Structurally, we will see improvement in Q3 and Q4. Structurally is a mine that will not have the average of our Aura. Structurally is a mine actually that will push our all-in sustaining cash costs above the average that we have. That's not a problem, because we paid only $76 million to this, and the internal rate of return of this project will be significantly high to our shareholders. Particularly now. It was already high, and now you added a new resource and reserve. It's a project that we feel very comfortable. It's coming more challenging on the short term, as we expected. On the other hand, is way above expectations on the long term. We are not focusing too much on production.

Speaker #4: And that's not a problem. Because we paid only 76 million dollars to this and the internal rate of return of this project will be significantly high to our shareholders particularly now if you add it was already high and now you added the new resources and reserves.

Speaker #4: So it's a project that we feel very comfortable. It's coming more challenging on the short term. As we expected in the other hand is a way above expectations on the long term.

Speaker #4: And that we are not focusing too much on production we are not focusing too much on cash cost during the first second quarter and we'll see improvement on the second semester.

Rodrigo Barbosa: We're not focusing too much on cash costs during the Q1, Q2, and we see improvement on the H2. Our main objective, which is the KPIs and the variable remuneration on this project, is way more towards preparing this mine to get close to 80,000 ounces of production and close to 2,000 ounces of all-in sustaining costs, so that we can plan that for next year.

Speaker #4: But our main objective which is the KPIs and the variable remuneration on this project is way more towards preparing this mine to get close to 80,000 ounces of production and close to 2,000 ounces of our sustaining cash cost so that we can plan that for next year.

Speaker #7: Okay. Very clear. My last question. Sorry.

Taciane Condini: Okay. Very clear.

Tathiane Candini: Okay. Very clear.

Rodrigo Barbosa: And-

Taciane Condini: My last question. Sorry.

Tathiane Candini: My last question. Sorry.

Speaker #4: No, go ahead.

Rodrigo Barbosa: No, go ahead.

Speaker #7: Yeah. No, my last question. And I think we didn't discuss this a lot here in this call. But just kind of understand your view on gold prices.

Taciane Condini: Yeah. No. My last question, I think we didn't discuss this a lot here in this call, just to kind of understand your view on gold prices. I think overall market remains very bullish on the overall story. We agree with that, just wanted to hear your thoughts on how do you see this, like, all this impact from the recent war developments and how your perspective for this year.

Tathiane Candini: Yeah. No. My last question, I think we didn't discuss this a lot here in this call, just to kind of understand your view on gold prices. I think overall market remains very bullish on the overall story. We agree with that, just wanted to hear your thoughts on how do you see this, like, all this impact from the recent war developments and how your perspective for this year.

Speaker #7: I think overall market remains very bullish on the overall story. We agree with that. But just wanted to hear your thoughts on how do you see this all this impact from the recent war.

Speaker #7: Developments and how your perspective for this year.

Speaker #4: Well, if we see the variables that we've been first I'd like to also disclose that I don't feel that I am an expert in gold price, right?

Rodrigo Barbosa: Well, if we see the variables that First, I'd like to also disclose that I don't feel that I am an expert in gold price, right? I think investors are way more informed than on that. We don't take decisions in order expecting gold price to go up and down. We take decisions based on what is the higher production I can achieve at the lowest cost. That's it. Gold price is just an input. Nevertheless, I need to learn, I need to participate and analyze, and I talk to many people, participate in other boards. I need to follow. The idea is that on the big picture is what has been pushing gold prices up is been two major variables.

Speaker #4: I think investors are way more informed than on that. So we don't take decisions in our expecting gold price to go up and down.

Speaker #4: We take decisions based on what is the higher production I can achieve at the lowest cost. That's it. And gold price is just an input.

Speaker #4: Nevertheless, I need to learn and need to participate and analyze and I talk to many people participate in other boards. So I need to follow.

Speaker #4: The idea is that on the big picture is what is being pushing gold prices up is being two major variables. Number one, is the excess of capital, the excess of liquidity in the world.

Rodrigo Barbosa: Number one is the excess of capital, the excess of liquidity in the world. You see United States at $39 trillion now on debt, and plus $2 trillion per year in terms of deficit. Now changing Treasuries, paying Treasuries that cost 1%, 2% to a Treasury that costs close to 4%. That's increasing significantly the financial expense over excess of debt, over excess of deficit. The world is starting to think about where this can go, right? Maybe we might have to print, maybe they'll have to lower interest and live with inflation. That has not changed.

Speaker #4: So you'll see United States at 39 trillion dollars now on that and plus 2 trillion dollars per year. In terms of deficit. And now changing treasuries paying treasuries that cost 1, 2 percent to treasury that costs close to 4 percent.

Speaker #4: So that's increasing significantly the financial expense, over excess of debt, over excess of deficit. And the world is starting to think where this can go, right?

Speaker #4: Maybe we might have to print. Maybe they'll have to lower interest and live with inflation. So that has not changed. And actually that is the wars are even getting this worse because countries that that is the same situation with Europe.

Rodrigo Barbosa: Actually, that is, the wars are even getting this worse because countries. That is the same situation with Europe. Actually, Europe is way worse than the United States or comparable to every other country in the world. The United States is not that bad, but yet, it's not easy to tackle that deficit. The whole war now of the United States is reducing the amount they spending on army in Europe and other countries. They were now talking about increasing the budget for defense while they should be decreasing the deficit. That's only pushing deficit to higher levels. That's only pushing the need to print money higher. That's one thing that the world is happening now.

Speaker #4: Actually, Europe is way worse than the United States compared to other countries in the world. The United States is not that bad. But yet, it's not easy.

Speaker #4: To tackle that deficit. And the whole war now United States is reducing the amount they spend on army in Europe and other countries. So they will now talking about increasing the budget for defense while they should be decreasing the deficit.

Speaker #4: So that's only pushing deficit to a higher levels. That's only pushing the need to print money higher. So that's one thing that the world is happening now.

Speaker #4: It's all situations only deteriorate in terms of public accounts and deficits. And the most interesting touching is that we don't hear any single conversation the deficit.

Rodrigo Barbosa: It's all situations only deteriorate in terms of public accounts and deficits. The most interesting, Taciane, is that we don't hear any single conversation about governments, about tackling the deficit, right? There are many other subjects to talk, but reducing costs. It has not been politically talked in any country so far. That can continue to push gold ahead.

Speaker #4: Right? There's all many other subjects to talk but reducing cost has not been a politically talked in any country so far. So that is we'll push can continue to push gold ahead.

Speaker #4: Another the second point that pushes gold ahead has not changed and actually is also improving in terms of pressure is the result of the war of Ukraine and Russia.

Rodrigo Barbosa: The second point that pushes gold ahead has not changed and actually is also improve in terms of pressure, is the result of the war of Ukraine and Russia, where the world confiscated all the U.S. dollars from Russia, has just hit the alarm that the countries don't feel aligned with United States, they should not have super high exposure to U.S. dollar, which means treasury. What we've been seeing now in the world is that China continue to do, continue to import and produce higher gold and continue to central banks are also on high, very high purchase last quarter. Another record high purchase from central banks particular in China, which they disclose. We do not know what they do not disclose.

Speaker #4: Where the world confiscated all the US dollars from Russia has just hit the alarm that the countries that are not don't feel aligned with the United States they should not have super high exposure to US dollar which means treasury.

Speaker #4: So what we've been seeing now in the world is China continue to do continue to import and produce higher gold and continue to central banks also on high very high purchase last quarter.

Speaker #4: Another record high purchase from central banks particular in China. Which they disclose. We do not know what they do not disclose. So that's just getting worse and worse.

Rodrigo Barbosa: That's just getting worse and worse. The factors that push gold higher are there and getting even more present. On the short term, there is this volatility that happens. If my humble opinion is that we will continue to see gold prices going up. Actually, I would also invite, that was just reading the other day that, who is buying the treasury now, right? We see now Fed buying treasury in internal market in the United States. The world is not yet, not anymore, giving that much of support for the US debt. That is a structurally significant change in the world, while perhaps US will not be that important in the upcoming years and the upcoming decades as a major country.

Speaker #4: So the factors that push gold higher are there and getting even more present. But on the short term there is this volatility that happens.

Speaker #4: But if my humble opinion is that we will continue to see gold prices going up. Actually, I would also invite that was just reading the other day that who is buying the treasury now, right?

Speaker #4: So we see now Fed buying treasury internal market in the United States. The world is not yet not anymore giving that much of support for the US debt.

Speaker #4: So that is structurally significant change in the world while perhaps US will not be that important in the upcoming years and the upcoming decades.

Speaker #4: At the major countries. We continue to be important but perhaps losing some importance. And gold plays a major role on this rebalancing of currencies.

Rodrigo Barbosa: We continue to be important, but perhaps losing some importance. Gold plays a major role on this rebalancing of currencies.

Speaker #7: Thank you very much, clear.

Taciane Condini: Thank you very much, Rodrigo. Very clear.

Tathiane Candini: Thank you very much, Rodrigo. Very clear.

Speaker #1: Our next question comes from Edgar de Souza with Itaú BBA.

Operator 2: Our next question comes from Edgar Pinto de Souza with Itaú BBA.

Operator: Our next question comes from Edgar Pinto de Souza with Itaú BBA.

Edgar Pinto de Souza: Hi. Hi, everyone. Hi, Rodrigo, Kleber, Natasha. Thank you for the questions. I want to start, and sorry to insist in this point, Rodrigo, on the cost front. I think that you were super clear about the gradual improvement in production throughout the year. This makes us comfortable that you are going to achieve your production guidance for the year. On the cost front, we are a little bit disappointed in Q1. We understand that there are some mine sequencing, there is the infrastructure works at MSG and so on and so forth. We have something that is important, that is the FX impact, right? I want to understand from you, first, which was the average FX that you considered during the guidance.

Edgard Pinto de Souza: Hi. Hi, everyone. Hi, Rodrigo, Kleber, Natasha. Thank you for the questions. I want to start, and sorry to insist in this point, Rodrigo, on the cost front. I think that you were super clear about the gradual improvement in production throughout the year. This makes us comfortable that you are going to achieve your production guidance for the year. On the cost front, we are a little bit disappointed in Q1. We understand that there are some mine sequencing, there is the infrastructure works at MSG and so on and so forth. We have something that is important, that is the FX impact, right? I want to understand from you, first, which was the average FX that you considered during the guidance.

Speaker #8: Hi. Hi everyone. Rodrigo Kleber. Natasha, thank you for the questions. So I want to start and sorry to insist in this point, Rodrigo, on the cost front.

Speaker #8: I think that you were super clear about the gradual improvement in production throughout the year. This makes us comfortable that you are going to achieve your production guidance for the year.

Speaker #8: But on the cost front, we are a little bit disappointed in the first Q. We understand that there are some mine sequencing. There is the infrastructure work that MSG and so on and so forth.

Speaker #8: But we have something that is important, which is the effects impact, right? So, I want to understand from you first, which was the average effects that you considered during the guidance.

Speaker #8: Do you have any sensitivity about the impacts of a stronger BRL and also the stronger Mexican peso on your cost guidance? Because this despite you being very comfortable about the operational performance maybe could put your performance in the year more closer to the upper end of the guidance, right?

Edgar Pinto de Souza: Do you have any sensitivity about the impact of a stronger BRL and also the stronger Mexican peso on your cost guidance? Because this, despite you being very comfortable about the operational performance, maybe could put your performance in the year more closer to the upper end of the guidance, right? Or do you think that there is room to be even better in terms of operational and more than offset the impact of the effects here? My second question is related to the hedge, right? We have been discussing this a lot, how are you going to think about hedging policy going forward? The fact is, for Almas and for Borborema, you started building the hedge once you approved the projects, right?

Edgard Pinto de Souza: Do you have any sensitivity about the impact of a stronger BRL and also the stronger Mexican peso on your cost guidance? Because this, despite you being very comfortable about the operational performance, maybe could put your performance in the year more closer to the upper end of the guidance, right? Or do you think that there is room to be even better in terms of operational and more than offset the impact of the effects here? My second question is related to the hedge, right? We have been discussing this a lot, how are you going to think about hedging policy going forward? The fact is, for Almas and for Borborema, you started building the hedge once you approved the projects, right?

Speaker #8: Or do you think that there is room to be even better in terms of operational, and more than offset the impacts of the effects here?

Speaker #8: And then my second question is related to the heads, right? We have been discussing this a lot. So how are you going to think about hedging policy going forward?

Speaker #8: But the fact is for Almas and for Borborema you started building the heads once you approve the projects, right? Now you approve the Era Dourada.

Edgar Pinto de Souza: Now you approved the Era Dorada, and I wanted to understand what are you going to do in terms of hedges for Era Dorada, if you are doing something or not, and when you want to build that. Also, to connect this with my first question, do you consider any structure in terms of hedges for the FX, zero-cost collar, and so on and so forth? We know that some companies, not gold companies, but other companies that we cover, they are using a lot of structures of zero-cost collars for FX, for costs, and so forth. How do you think about that also? Thank you.

Edgard Pinto de Souza: Now you approved the Era Dorada, and I wanted to understand what are you going to do in terms of hedges for Era Dorada, if you are doing something or not, and when you want to build that. Also, to connect this with my first question, do you consider any structure in terms of hedges for the FX, zero-cost collar, and so on and so forth? We know that some companies, not gold companies, but other companies that we cover, they are using a lot of structures of zero-cost collars for FX, for costs, and so forth. How do you think about that also? Thank you.

Speaker #8: And I wanted to understand what are you going to do in terms of hedges for Era Dourada if you are doing something or not?

Speaker #8: And when you want to build that? And also to connect this with my first question. Do you consider any structure in terms of hedges for the effects?

Speaker #8: Zero cost collar and so on and so forth. We know that some companies not gold companies but other companies that we cover they are using a lot of structures of zero cost collars for effects.

Speaker #8: For costs and so on and so forth. So how do you think about that also? Thank you. Good. I will start the first question and then I'll ask Kleber to finish.

Rodrigo Barbosa: Good. I will start the first question and then I'll ask Kleber to finish. Talk more specific of the FX, and then we go back to the hedges. Right. In terms of our cash costs, you know, sustaining cash costs, I think I just as we all highlighted and I will reinforce, is that it varies quarter by quarter and mine by mine according to the mine sequences, mainly due to rates, strip ratio, and whether if you are pushing back the pit or not, right? We'll see a progress in terms of production during the H2 that give us very comfortably that we can reach a production at the middle of, if not above the middle of the guidance, right? Close to that.

Speaker #8: Talk more specifically about the effects and then we go back to the hedges, right? So in terms of cash cost and non-sustaining cash cost I think I just as we highlighted and I'll reinforce is that it varies quarter by quarter.

Speaker #8: Mine by mine according to the mine sequences. Mainly due to rates. Strip ratio and where if you are pushing back the PEAT or not, right?

Speaker #8: So, I will see a progress in terms of production during the second semester that gives us, very comfortably, that we can reach a production at the middle of, if not above the middle of, the guidance, right?

Speaker #8: Close to that. And then that will reflect also in cash cost. So we'll see higher production and lower cash costs also very comfortably. That will be in the guidance.

Rodrigo Barbosa: That will reflect also in cash costs. We'll see higher production and lower cash costs also very comfortably. That will be in the guidance. Cleber, if you wanna talk a little bit more on FX impact in Brazil, Mexico, I think that'll be good.

Speaker #8: Kleber, if you want to talk a little bit more on effects impact in Brazil, Mexico, I think that would be good. Yeah. So Edgar, yeah, the effects was around the 530 that we use in the guidance.

Kleber Cardoso: Yeah, Edgar, the FX was around BRL 5.30 on that we use in the guidance. Yes, there is some challenge, but so far as we see and we do our rolling forecasts is that we would still be comfortable in delivering the cash costs and our sustaining cash costs of the Brazilian operations. We have also cost reduction initiatives in, you know, the business units. Considering the levels where the Mexican peso and the Brazilian real are now, we are comfortable with that guidance without needing to review the guidance considering the current appreciation of those two currencies. I can comment on the hedging as well.

Speaker #8: Yes, there is some challenge but so far as we see and we do our rolling forecasts we would still be comfortable in delivering the cash cost and our sustaining cash costs of the Brazilian operations.

Speaker #8: We have also cost reduction initiatives in all the business units. So considering the levels where the Mexican peso and the Brazilian real are now we're comfortable with that guidance without the needing to review the guidance considering the current appreciation of those two currencies.

Speaker #8: And I can comment on the hedging as well. Yeah, you can comment. Yeah. So on the hedges and you compared with what we did for Borborema and Almas.

Rodrigo Barbosa: Yeah, you can comment.

Kleber Cardoso: Yeah. On the hedges, and you compared with what we did for Borborema and Almas, it's important just to first understand the context when we do the hedges, and second, where we are now. Historically, we did the hedges to protect the company because it was major investments we did at those times. If gold prices had some reduction, sharp reduction that could put the company at the risk at the time. And then, historically did a zero-cost collar because it was a way, selling the calls was a way to finance the insurance, which was the put options now to hedge until we got the payback and make sure that the money we invest in the project, we got the payback. What's the difference now?

Speaker #8: It's important just to first understand the context when we do the hedges and second where we are now. So historically we did the hedges to protect the company because major investments we did at those times.

Speaker #8: So if gold prices had some reduction, sharp reduction that could put the company at the risk at the time. So and then historically we did a zero cost collar because it was a way of selling the calls.

Speaker #8: It was a way to finance the insurance which was they put options, no to hedge until we got the payback and make sure that the money we invest in the project we got the payback.

Speaker #8: So what's the difference now? First is in terms of company we're much more diversified. If you remember when we started building Almas we had only three other mines.

Kleber Cardoso: First is in terms of company, we're much more diversified. If you remember when we started building Almas, we had only three other mines. Now we have six. We are less exposed at risk when with one single project. Second, also our margins now are much stronger, much higher in both the EBITDA margins and the cash conversion than at the time. We have much more buffer and the risk, financial risk, is much less. Regardless that, we are analyzing, we still are discussing with the boards. Potentially, we have now an opportunity not to do zero-cost collar like we did in the past. We might buy put options because gold price moved so much in the last few years, and that might be much cheaper today to buy put options.

Speaker #8: Now we have six. So we are less exposed at risk when with one single project. And second also our margins now are much stronger, much higher and both the EBITDA margins and the cash conversion than at the time.

Speaker #8: So we have much more buffer and the risk financial risk is much less. Regardless of that we are analyzing we still are discussing with the boards potentially we have now one opportunity not to do zero cost collar like we did in the past.

Speaker #8: We might buy put options because gold price moves so much in the last few years. And that might be much cheaper today to buy put options.

Speaker #8: So we might put the insurance in place without giving up on the upside. But it's still because we have that less pressure and because there is there has been so much volatility in the gold prices in the last couple of weeks.

Kleber Cardoso: We might put the insurance in place without giving up on the upside. It is still because we have that less pressure and because there has been so much volatility in the gold prices in the last couple of weeks, any option becomes more expensive. We are analyzing and we keep quoting and seeing the cost of these structures and discussing with the board the scenarios and the right timing to implement this kind of hedging.

Speaker #8: Any option becomes more expensive. So we are analyzing and we keep quoting and seeing the cost of this structures and discussing with the board the scenarios and the right time to implement this kind of hedging.

Speaker #8: Yeah. And for exchange rate there's nothing you can do against or in favor in the long term. You can hedge short term that has a cost.

Rodrigo Barbosa: Yeah. For exchange rate, there's nothing you can do against or in favor, in the long term. You can hedge short term, that has a cost, but structurally, you don't change, you don't protect your business of the hedging short term. If you have a important milestone that you need to achieve, and if you have a CapEx to do that, you know, you've already calculated on internal rate of return and half of the CapEx in $, half of CapEx is in BRL, then we might think. Structurally, there's nothing you can do. You're just gonna pay every quarter to do a hedge that won't change your business overall.

Speaker #8: But structurally you don't change you don't protect your business of hedging short term. If you have important milestone that you need to achieve and if you have a capex to do that you already calculated or integrated return and half of the capex in dollars half of capex is in reals.

Speaker #8: Then we might think but structurally there's nothing you can do. You're just going to pay every quarter to do a hedge that won't change your business overall.

Speaker #8: What we can do is get more the exchange rate pushes our cost up more focus more attention and try to bring back the cost down by a new efficiency gains or cost reduction.

Rodrigo Barbosa: What we can do is get more if the exchange rate pushes our cost up, more focus, more attention, and try to bring back the cost down by a new efficiency gains or cost reduction. AI is coming deep, right? It will give many companies alternatives to find places to reduce costs.

Speaker #8: And AI it's coming in, right? So it will give many companies alternatives to find places to reduce costs. Okay. Thank you, Rodrigo. Really like the pictures from Era Dourada.

Edgar Pinto de Souza: Okay. Thank you, Rodrigo. Really like the pictures from Era Dorada. Very interesting.

Edgard Pinto de Souza: Okay. Thank you, Rodrigo. Really like the pictures from Era Dorada. Very interesting.

Speaker #8: Very interesting. Oh yes. It's coming. Advancing there. Thank you.

Rodrigo Barbosa: Oh, yes. It's coming.

Edgar Pinto de Souza: to see the team, advancing there. Thank you.

Edgard Pinto de Souza: to see the team, advancing there. Thank you.

Speaker #1: Our next question comes from Marcelo Arazi with BTG.

Operator 2: Our next question comes from Marcelo Arazi with BTG.

Operator: Our next question comes from Marcelo Arazi with BTG.

Speaker #9: Hi guys. Good morning. Two questions on my side as well. I think the first one is a simpler one. The company has been delivering several triggers and milestones especially since the IPO last year.

Marcelo Arazi: Hi, guys. Good morning. Two questions on my side as well. I think the first one is a simpler one. The company has been delivering several triggers and milestones, especially since the IPO last year. Looking forward, what else can we expect to be announced until the end of this year? What are the next milestones for the investment case? If I may have a second one, just a follow-up on the M&A discussion. We have been seeing other bigger gold projects being developed in Latin America. I think especially in Guyana, with productions in the north of 250 ounces. Can we expect Aura to be looking at this kind of projects?

Speaker #9: And looking forward what else can we expect to be announced until the end of this year? So what are the next milestones for the investment case?

Speaker #9: And if I may have a second one. Just a follow-up on the M&A discussion. We have been seeing other bigger gold projects being developed in Latin America.

Speaker #9: I think especially in Guyana, with productions in the north of 200, 250 ounces. Can we expect Aura to be looking at these kinds of projects?

Speaker #9: Rodrigo mentioned that it has to be something that Aura can add value to, and despite being bigger assets, I think they are still sitting on more challenging jurisdictions that you guys can operate quite well.

Marcelo Arazi: Rodrigo mentioned that it has to be something that Aura can add value to. Despite being bigger assets, I think they are still sitting on more challenging jurisdictions that you guys can operate quite well. Just wanted to hear your thoughts on that as well. Thank you.

Speaker #9: So just wanted to hear your thoughts on that as well. Thank you.

Speaker #8: Thank you. Thank you, Marcelo. So in terms of triggers I think we have expansion of Borborema. We have exploration and further expansion perhaps in Almas but that will be more towards the end of the year.

Rodrigo Barbosa: Thank you. Thank you, Marcelo. In terms of triggers, I think we have expansion of Borborema. We have exploration and further expansion perhaps in Almas, but that will be more towards the end of the year. We are also updating feasibility study for Matupa towards also the end of the year. We should. And of course, the improvement of the progress we make with the turnaround in MSG. Those are important factors for us to monitor along the next quarters. In terms of M&A, well, we monitor those transactions. Some of them we participate, some of we don't. Some we like, some we don't like.

Speaker #8: We are also updating feasibility study for Matupá. Towards also the end of the year. So we should and of course the improvement of the progress we make with the turnaround in MSG.

Speaker #8: So those are important factors for us to monitor along the next quarters. In terms of M&A we monitor those transactions. Some of them we participate.

Speaker #8: Some we don't. Some we like. Some we don't like. But it's not that we do not like bigger mines. 200, 300 thousand ounces. But we need to find where we're going to find where is Aura going to build value.

Rodrigo Barbosa: It's not that we do not like bigger mines, 200,000, 300,000 ounces, but we need to find where we're gonna find our, where is Aura going to build value into that operation, right? That will always depend on the entry price. We are very, very concerned and very focused on internal rate of return. If you overpay and then your internal rate of return is gonna be reduced, normally you overpay for very big assets. Then you leverage or you put a lot of capital in a lower return project that can jeopardize the average. Our story has been super successful so far.

Speaker #8: Into that operation, right? So that will always depend on the entry price. So we are very concerned and very focused on internal rate of return.

Speaker #8: If you overpay and then your internal rate of return is going to be reduced and you just and normally you overpay for very big assets.

Speaker #8: So then you leverage or you put a lot of capital in a lower return project that can jeopardize the average. So our story has been super successful so far.

Speaker #8: We believe we can continue to do projects between 100 and 150 where shows ability to have a higher internal rate of return. Up to a million ounces.

Rodrigo Barbosa: We believe we can continue to do projects between 100 and 150 where shows our ability to have a higher internal rate of return up to 1 million ounces. After that, then we would have to rethink our strategy. For sure then we would have to go into a high bigger project that has lower returns. I think there's still room for us to continue to grow in the high return projects up to 1 million ounces. After that, we'll have to reshuffle and rethink the strategy and go to a lower return projects.

Speaker #8: After that, then we would have to rethink our strategy, and for sure, then we would have to go into a bigger project that has lower return.

Speaker #8: So I think there's still room for us to continue to grow in the high return projects. Up to a million ounces. After that we'll have to reshuffle and rethink the strategy and go to a lower return projects.

Speaker #8: That's very clear. Thank you.

Marcelo Arazi: That's very clear. Thank you.

Speaker #1: The Q&A session is over. We would like to hand the floor back to Mr. Rodrigo Barbosa for the company's final remarks.

Operator 2: The Q&A session is over. We would like to hand the floor back to Mr. Rodrigo Barbosa for the company's final remarks.

Operator: The Q&A session is over. We would like to hand the floor back to Mr. Rodrigo Barbosa for the company's final remarks.

Speaker #8: No. Just a recap. We are moving forward very solid steps toward our story that we share with the market that first in 2020 and recently with the Nasdaq listing.

Rodrigo Barbosa: No, just to recap, we are moving forward, very solid steps toward our story that we share with the market at first in 2020 and recently, with the Nasdaq listing, in 20 mid 2025. We are increasing production. We developed Borborema last year. Borborema continued to improve production this quarter. We mentioned that we would continue to grow through acquisitions. We acquired MSG. MSG now is in a turnaround process very much. On our focus is to buy greenfield projects that are ready to build or mines that is in operations that we have an angle to add value, do the turnaround. We did that also with MSG.

Speaker #8: In 20 mid 2025 we are increasing production with developed Borborema last year. Borborema continue to improve production. This quarter we mentioned that we would continue to grow through acquisitions.

Speaker #8: We acquired MSG. MSG now is in the turnaround process. Very much on our focus is to buy greenfield projects that are ready to build, or mines that are in operations that we have an angle to add value.

Speaker #8: Do the turnaround. So we did that also with MSG. We mentioned to the market that we would start construction of a new greenfield project during this year—either it was Era Dourada or Matupá.

Rodrigo Barbosa: We mentioned to the market that we would start construction of a new greenfield project during this year, either Era Dorada or Matupa. We just approved the construction of Era Dorada. We also mentioned to the market that we would increase resource and reserves. We just published the Form 20-F with a significant increase in reserves to over 7 million ounces, and now resources above 3 million ounces. That is also extending the life of mine, of our mines, while we are also increasing production. We also mentioned to the market that we would have to increase our daily trading volume. We are delivering on average the last quarter $95 million. We are doing very solid steps towards our strategy to reach above 600,000 ounces, which is already defined.

Speaker #8: We just approved the construction of Era Dourada. We also mentioned to the market that we would increase resources and reserves. We just published a 20-F with a significant increase in reserves to over seven million ounces, and now resources above three million ounces.

Speaker #8: So that's also extending the life of our mines while we are also increasing production. We also mentioned to the market that we would have to increase our daily trading volume, and now we are delivering, on average, last quarter, $95 million.

Speaker #8: So we are doing very solid steps towards our strategy to reach above 600,000 ounces which is already defined. We know how very well how to get there.

Rodrigo Barbosa: We know how, very well how to get there. We would like to continue to grow through M&As. I just mentioned that we aim to achieve 1 million ounces, but that would require a new M&As that we should do perhaps in the upcoming years. As home, it was also solid quarter in terms of results as the market and analysts question are we sustaining cash costs above the other quarters. Most of these come from MSG, which was expected. Secondly, also from mine sequences, which was also expected. We should see H2 coming in strong, which will improve production and also reduce the our existing cash costs.

Speaker #8: But we would like to continue to grow through M&A, as just mentioned, that we aim to achieve one million ounces, but that would require a new M&A that we should do, perhaps in the upcoming years.

Speaker #8: So it was also solid quarter in terms of results. As the market and the analysts are question how we sustaining cash costs above the other quarters.

Speaker #8: Most of these come from SSG which was expected and secondly also from mine sequences which was also expected. So we should see second semester coming in strong which will improve production and also reduce the oil sustaining cash costs.

Speaker #8: While doing all of that, we continue the very solid step with dividends. We continue to be one of the highest dividend yields in the sector, despite the fact that our shares have significantly appreciated.

Rodrigo Barbosa: While doing all of that, continued a very solid step with dividends, continued to be one of the highest dividend yield in the sector. Despite that, our shares has significantly appreciated. Our dividend yield, of course, reduced compared to what we were 1 year ago, not because of the lower dividends, just because now the market start to pick up. Yet there's still a lot of room to increase the multiple, and we will be tackling this multiple by increased liquidity, more conversations with investors, telling more the story, walking the talk, and increasing our size. I thank you all for participation, and we'll be following up with the market as we have any kind of news.

Speaker #8: Our dividend yield of course reduced compared to what we were one year ago. Not because of the lower dividends just because now the market start to pick up.

Speaker #8: Yet there's still a lot of room to increase the multiple and we will be tackling this multiple by increased liquidity, more conversations with investors, telling more the story.

Speaker #8: And walking the talk and increasing our size. So I thank you all for your participation, and we'll be following up with the market as we have any kind of news.

Operator 2: Aura Minerals' conference is now closed. We thank you for your participation and wish you a nice day. Goodbye.

Operator: Aura Minerals' conference is now closed. We thank you for your participation and wish you a nice day. Goodbye.

Speaker #1: Aura's conference is now closed. We thank you for your participation and wish you a nice day.

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Q1 2026 Aura Minerals Inc Earnings Call

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Aura Minerals

AUGO

Earnings

Q1 2026 Aura Minerals Inc Earnings Call

Thursday, May 7th, 2026 at 1:00 PM

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Aura Minerals

Earnings