Alamos Gold Inc.

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Your conference is ready to begin. Good morning. I'll now turn the call over to Mr. Scott Parsons, Alamos Senior Vice President of Corporate Development and Investor Relations. Please go ahead, sir.

Thank you, operator, and thanks to everybody for attending Alamos' first quarter 2025 conference call. In addition to myself, we have on the line today John McCluskey, President and Chief Executive Officer, Greg Fischer, Chief Financial Officer, Luc Guimond, Chief Operating Officer. We will be referring to a presentation during the conference call that is available through the webcast and on our website. I would also like to remind everyone that our presentation will be followed by a Q&A session. As we will be making forward-looking statements during the call, please refer to the cautionary notes included in the presentation, news release, and MD&A, as well as the risk factors set out in our annual information form. Technical information in this presentation has been reviewed and approved by Chris Boswick, our Senior VP of Technical Services, and a qualified person. Also, please bear in mind that all of the dollar amounts mentioned in this conference call are in US dollars, unless otherwise noted. Now, John will provide you with an overview.

Thank you, Scott. I'd like to turn your attention to slide three. We produced 125,000 ounces of gold in the first quarter, consistent with the lower end. of quarterly guidance. Island Gold continues to perform well, offsetting a slower start to the year from Young-Davidson and Maginot. As we will outline through this call, we have seen a significant improvement from both operations in April and expect this to contribute to a stronger production in the second quarter, with a further increase in production expected into the second half of the year driven by higher grades and mining rates at Island Gold and increasing grades at Liaki Grande, we remain well positioned to meet our full-year production guidance. All in-sustaining costs for the quarter were above our first-half guidance, reflecting lower production at Young-Davidson and Maginot, increased royalties due to the sharply higher gold price, and higher share-based compensation given the 45% increase in Alamosa's share price during the quarter. Through a combination of higher tons and grades processed, we expect rising production and a significant improvement in our costs through the remainder of the year. We expect this to drive a 20% decrease in all end-sustaining costs in the second quarter, with further decreases into the second half of the year. Turning now to slide four, we continue to advance our high-return, permitted, and fully-funded organic growth projects that are expected to support further production growth and declining costs in the coming years. Following our construction decision at Lynn Lake earlier in the year, we attended a groundbreaking ceremony alongside the Premier of Manitoba as well as representatives from the First Nations and local communities. Construction activities are ramping up and will be completed over the next three years, with initial production expected in the first half of 2028. In February, we announced a 31% increase in our global mineral reserves to 14 million ounces. This included another substantial increase in reserves and resources at Island Gold, highlighted by a 32% increase in reserve ounces and an 11% increase in grades. We will be incorporating this growth, along with the large mineral reserve at Maginot, into an expansion study to be completed in the fourth quarter that we expect will outline significantly larger and more valuable operations. Turning to slide five. Our outlook has never been stronger, and we have never been better positioned. We have one of the strongest growth profiles in the sector, underpinned by three high-return projects. All of this growth is fully funded. We started last year at a run rate of 500,000 ounces per year. With the addition of Maginot, we expect to produce approximately 600,000 ounces this year. With the Phase 3 expansion in its final full year of construction, we expect further growth to 700,000 ounces per year by 2027, with all-in sustaining costs trending lower to approximately $1,200 per ounce. With initial production from the Lynn Lake project expected in the first half of 2028, our longer-term production rate is expected to increase to 900,000 ounces per year, with a further decrease in costs. At current gold prices, our all-in sustaining cost margin is expected to exceed $2,000 per ounce, supporting over $1 billion in annual free cash flow. Longer term, we see excellent potential to take the company-wide production to 1 million ounces per year with a further expansion of the Island Gold District. Turning to slide 6, we expect stronger free cash flow through the remainder of 2025 at current gold prices, while funding all of our growth initiatives, and record exploration program. With the Phase 3-plus expansion on track for completion in the first half of 2026, we expect considerably higher free cash flow starting in the second half of 2026. We expect further growth into 2027 and beyond, driven by higher production, lower costs, and decreasing capital with the start of production from the PDA and Lynn Lake projects. I will now turn the call over to our CFO, Greg Fisher, to review our financial performance.

Greg? Thank you, John. On to slide seven, we sold approximately 118,000 ounces of gold in the first quarter at an average realized price of $2,802 per ounce for revenues of $333 million. The average realized price was below the London PM fix for the quarter, primarily as a result of delivering over 12,300 ounces into the gold prepayment facility based on a prepaid price of $2,524 per ounce. We will continue to deliver the same quarterly number of ounces into the facility until the obligation is completed at year end. As a reminder, the prepaid facility was executed in July 2024 with the proceeds utilized to retire 180,000 ounces of forward sale contracts inherited from Argonaut Gold across 2024 and 2025 with an average price of $1,840 per ounce. Total cash cost of $1,193 per ounce. and all-in-sustaining costs of $1,805 per ounce were both above the top end of guidance for the first half of 2025, driven by higher costs at Young-Davidson and Magino, as well as higher royalties and share-based compensation. Given the 45% increase in our share price in the first quarter, long-term incentives outstanding were revalued and resulted in a $230 per ounce increase to all-in-sustaining costs compared to our guidance. Own sustaining costs are expected to trend lower through the year with a 20% decrease expected in the second quarter and a further decrease in the second half of the year. We are monitoring our full year cost guidance given the higher share based compensation and royalty costs compared to guidance which is challenging to forecast given the nature of these costs. Excluding the impact of these variables which are outside of our control we remain confident with our full year cost guidance. Our reported net earnings were $15 million in the first quarter, or $0.04 per share. This included $46 million of unrealized losses on commodity hedge derivatives for the legacy Argonaut 2026 and 2027 gold hedges and other adjustments totaling $2 million. Excluding these items, our adjusted net earnings were $60 million, or $0.14 per share. Operating cash flow before changes in non-cash working capital was $131 million in the first quarter, or $0.31 per share. Capital spending totaled $100 million and included $27 million of sustaining capital, $66 million of growth capital, and $7 million of capitalized exploration. Free cash flow was negative $20 million and was impacted by $53 million of cash taxes paid, primarily related to year-end mining and income taxes in Mexico, as well as the settlement of 25% of the prepayment obligation. Cash tax payments are expected to decrease through the remainder of the year of between $10 and $15 million per quarter. We expect stronger free cash flows through the remainder of the year, driven by higher production, lower costs, and lower cash tax payments. combined with a strong cash position of $290 million and nearly $800 million in total liquidity, we remain well positioned to internally fund our growth plans. I'll now turn the call over to our COO, Luc Guimond, to provide an overview of our operations.

Thank you, Greg. Over to slide eight. Production from the Island Gold District totaled 59,200 ounces in a quarter. with the strong performance of Island Gold offsetting lower production from Maginot. At Island Gold, mining and milling rates as well as grades were all consistent with annual guidance. This included 1,200 tons per day process with grades averaging 11.36 grams per ton. Milling rates at Maginot were lower than planned, averaging 7,200 tons per day. As I will review shortly, deficiencies in the airflow design limited throughput rates earlier in the quarter. These have since been rectified, which has driven significantly higher throughput rates into March and April. Grades processed at Maginot averaged 0.86 grams per ton, slightly below annual guidance. Given the lower mill availability in the quarter, mining activities were focused on waste stripping. With less ore mined, less of the relatively higher grade ore was available for processing. Mining rates have improved to average over 15,000 tons per day of ore in April, and are expected to remain at similar levels through the rest of the year. This is expected to support the availability of higher grades for processing through the remainder of the year. Combined with higher milling rates, we expect significant improvement in production and decrease in costs from the Maginot portion of the operation through the remainder of the year. With a strong contribution from Island Gold, the combined operation generated positive mine site free cash flow of $19 million and a quarter, net of significant capital investments in the Phase 3 Plus expansion and a robust exploration program. The operation is expected to continue self-funding the Phase 3 Plus expansion at current gold prices with significant free cash flow growth following its completion in 2026. Moving to slide 9, Maginot had a challenging start to the year, but we believe we have now turned the corner with milling rates steadily improving and nearing planned levels. Milling rates were lower than planned due to restricted ore flow through the crushing and conveying circuit. This was caused by deficiencies in the initial ore flow design for winter conditions, which created blockages within the feeders and undersized transfer chutes. Chutes were expanded during the quarter and combined with the various optimization activities undertaken in the second half of 2024, milling rates increased substantially towards the end of the quarter. Milling rates increased to average 8,200 tons per day in March and approximately 9,500 tons per day in the last two weeks of April, with further improvement expected in May. In advance of the transition to processing island gold ore through the Maginot mill, approximately 8,000 tons of high-grade ore from island gold were blended with Maginot ore and processed through the Maginot mill in April. The batch test was successful, with recoveries averaging 96% from the blended ore in line with expectations. With the significant improvement in Megino's milling rates and successful batch test of Island Gold's high-grade ore, Island Gold's mill is expected to shut down in early May, following which ore from Island Gold will be trucked and processed through the larger and more cost-effective Megino mill. Given the significantly lower processing costs from utilizing the Megino mill, this is expected to contribute to declining costs through the remainder of the year. Moving to slide 10, the transition to the Maginot Mill is an important step towards the completion of the Phase III Plus expansion. The Maginot Hall Road is now substantially complete and will be used to transport ore from the Island Goal Portal to the Maginot Mill. Progress is being made on the mill expansion to 12,400 tons per day with bulk earthworks underway and detail engineering ongoing to support a larger, longer-term expansion of the mill. Within the shaft site area, We continue to make progress, having recently completed the second shaft station breakthrough at the 1,050 level. At quarter end, the shaft sink had reached a depth of 1,055 meters and remains on track to reach the ultimate depth of 1,373 meters in the third quarter of this year. The construction of the PACE plant is also advancing well, with 30% of the building steel now erected. and boreholes for the delivery of paste underground completed in advance of liner installation. Over to slide 11. As of quarter end, we spent and committed 75% of the total Phase 3 Plus expansion capital of $796 million. The expansion remains on track for completion in the first half of 2026. It will be a significant driver of low-cost production growth and free cash flow generation. Over to slide 12. Young-Davidson produced 35,400 ounces in the first quarter, lower than planned due to lower mining rates. Lower production drilling and scoop availability in the first two months of the quarter impact stow productivity and mining sequence. Production drilling meters and scoop availability improved within the quarter and mining rates were back to design capacity of 8,000 tons per day in March and April. and are expected to remain at similar levels throughout the rest of the year. Through higher mining and processing rates, as well as increased rates, production is expected to increase and cost decrease the remainder of the year. With another strong quarter of mine site free cash flow of 39 million, Young-Davidson is on track to deliver more than 100 million of free cash flow for the fifth consecutive year. Over to slide 13. Total production from the Milatos district was 30,400 ounces in the quarter, with two-thirds of production coming from La Yaqui Grande and the remainder from residual leaching at Milatos. As previously guided, grades of the La Yaqui Grande were expected to be at the low end of the guidance range in the first quarter and steadily increase throughout the year. With lower grades stacked in the quarter at La Yaqui Grande and higher contribution from residual leaching, costs were above the top end of the annual guidance range. Costs are expected to trend lower through the year as production increases driven by higher grades from La Yaqui Grande. The environmental permit amendment for the PDA project was received in late January, allowing for the start of construction activities. The focus during the quarter was on procurement of long lead items and detailed engineering. Construction activities are expected to ramp up towards the middle of the year with first production on track for mid-2027. Mine site free cash flow totaled $1 million in the quarter, net of $48 million in cash tax payments for the 2024 year. With production increasing and cost decreasing, the Mulattos District is expected to generate strong mine site free cash flow through the remainder of the year while funding the development of PDA and a robust exploration program. With that, I will turn the call back to John.

Thank you, Luke. I'll now turn the call over to the operator who will open the call for your questions. After that, I'm going to ask the operator to turn the call back to me for some final remarks.

Certainly. Thank you. We will now take questions from the telephone lines. If you have a question, please press star 1. You may cancel your question at any time by pressing star 2. Please press star one at this time if you have a question. There will be a brief pause while participants register for questions. We thank you for your patience. Our first question is from Cosmos 2 from CIBC. Please go ahead.

Thanks, John, Greg, Luke, and team. Maybe my first question is on the Maginot Mill. Sounds like some of the issues in terms of the restrictions with conveying and crushing bottlenecks have now been rectified. Now looking at, you know, you're getting close to 9,500 tons per day in terms of throughput. But I guess my question is, previously you had expected to get to 11,200 tons per day by the end of Q1. Is that still what you're trying to aim for near term in terms of getting up to 11,200 tons per day? And do you need to reach that level? before you can fully integrate the Island Gold and Maginot and shut down the Island Gold mill?

Yeah. Hi, Cosmo. It's Luke here. As I touched on in the communication, our expectation is actually we're going to make that transition at the beginning of May, actually at the end of next week. We've seen some continuous improvements, certainly over the last three quarters, as we've talked about with regards to the jaw crusher, cone crusher. And the last component, which kind of held us back from actually making the transition by the end of Q1, was some of the bottlenecks that we saw in the crushing and conveying system. We've since addressed those. And as I mentioned, at the end of April, we were running at 9,500 tons per day. We had a couple of smaller, minor operational issues, to be frank with you, that would have actually put us well above 10,000 tons per day with regards to running the processing plant. And really the final step for us was to be able to complete the higher grade batch test of Island Gold ore commingled with the Maginot ore just to validate the metallurgical recoveries in the processing plant from a plant scale perspective and we did that and we had no issues with regards to the overall performance of overall recovery as well as overall leaf circuit performance. So we're now quite comfortable to make that transition and our expectation is at the end of next week we will start actually bringing all of the island ore, underground ore, over to Maginot and being processed on a commingling basis with the Maginot ore.

I guess, Luke, in terms of numbers, I bring up the 11,200 tons per day. I know that was a number that was given out previously. Is that a number that we should stick to, or is that still a number that we should look at as a target, or not so much these days? I guess that's really the crux of my question.

No, that's still the number we expect to deliver on, Cosmo, is the 11,200 tons per day as we move forward here through the remainder of the year.

Okay, sounds good. And then maybe moving to young Davidson here, just a quick question, young Davidson. You know, it's always been steady as she goes, very steady operation. I was kind of surprised that throughput on mining output was a bit lower in Q1. as you mentioned, due to kind of equipment availability underground. Is that due to kind of the age of the equipment? Can you maybe comment on that? Is there any kind of renewal of the equipment needed at this point in time? Or is it just really kind of like a maintenance? Actually, I don't know. Maybe you can just touch on what happened and should we be concerned about the age of the equipment?

Sure. It was really more mining sequence related, to be honest with you, Cosmo. Typically, with the lower mine infrastructure, from 95-90 down has a direct feed into our crushing and conveying system, where the upper mine, the legacy from the upper mine from the early years of mining, there's a transfer point required to be able to provide that ore distribution down into the lower mine. And as a result of that, we had some more productive stoves that we were expecting through the first quarter in the lower mine that are much more productive for us to be able to maintain the 8,000 tons per day. We typically like to keep about a 50-50 blend. And as a result of some of those stoves not coming online in a timely fashion in the first quarter, in combination with a couple of production drills that we actually had working in the lower mine to get those stoves online, we had a couple of unscheduled maintenance issues with a couple of those drills that we had to address. And that really affected the performance in the quarter. But as far as the overall fleet management and replacement management of our equipment, it's always done in a timely fashion. The equipment that we're currently utilizing still has useful life. It was more just in relation to some unscheduled downtime with the drills, as well as a couple of scoops, which also puts a bit more pressure, obviously, for rehandling from the upper mine to the lower mine. But as part of our equipment replacement strategy, I mean, we do have a couple new units that we brought in last year. We have a couple more new units coming in this year as far as scoops and another production drill as well, you know, based on operating hours and the life cycle of those pieces of equipment.

Understood. Maybe just one last question turning to likely Greg here. Two things on the guidance and costs. Number one, Greg, could you remind us what kind of gold price assumption you factored into your cost guidance for the year? And number two, a bit more of an accounting nerdy question here, but the $230 an ounce was in part due to higher management compensation with the increase in the share price of Alamos this past quarter, maybe this past year. But how does it work? Like normally higher kind of revaluation of management compensation that was issued in a previous quarter, the revaluation, does it usually get into your on sustaining cost number for the quarter? And number two, you know, yeah, it's up 45% year to date, but today your share price is down 11%. So doesn't that mean later on it might get revalued again in terms of those management compensation expenditures. Does that mean we're going to see a reversal of today's $230 an ounce sometime later on? Doesn't that introduce a lot of volatility into that number?

Yeah, Cosmos, it's Greg here. So I'll answer the easy questions first, which is the gold price assumption. That was $2,400. So we had budgeted that, and obviously the increase in the gold price above that $2,400 has an impact on royalties expense as well as other charges that are related to mine site performance. On the stock-based compensation, I mean, it relates to the fact that we issue PSUs, RSUs, DSUs, and they all have terms of, you know, call it three years or longer. Those all need, so it's all from units that have been issued in the past. And because we settle those in cash, they're considered liability-based instruments. And therefore, under accounting rules, they are required to be marked to market every quarter. So to your point, could we see a reversal of this? Yes. I mean, if the share price drops, you have a negative mark to market. And if the price increases, you have a positive mark to market. Why it was so profound this quarter was because we were up 45% in the quarter, which we've never seen before. And, you know... Frankly, it's a good thing. So, yeah, I mean, that's just how the accounting works on that. And every company will include stock-based compensation in their definition of all sustaining costs.

Great. Thanks, John and team. Those are all the questions I have. Thank you.

Thank you. The following question is from Michael Ciperco from RBC Capital Markets. Please go ahead.

Yes, thanks very much for taking my question. Just on the Maginot, I know you said higher grades over the rest of the year on the higher milling. Apologies if I missed it somewhere, but are you able to quantify that? Should we be thinking back in line with original guidance, or is there potential for a bit of a catch-up and some higher grades?

Yeah, we'll track to being within guidance for the rest of the year with regards to Maginot, with regards to the grade profile that we would have put out at the beginning of the year. I mean, we were slightly below on the Maginot side, certainly for the head grades that went into the mill, but that was really a function of not actually mining the entire mine plan through the quarter because of some of the challenges that we had with regards to the crushing and conveying, with regards to those drop shoots that we had to replace. So that prevented us from getting all of the higher-grade portion of the ore that we were expecting in the quarter, which would have put us within guidance.

Okay. Makes sense. And then just another question on the testing you were doing, blending the Magino and Island ore. What sort of grade were you testing there in terms of the Magino material? And are you confident – at those levels of recovery sort of no matter what you're putting into the mill between the island ore and the Maginot ore?

Yeah, we're comfortable. I mean, the high-grade test, we ran about 8,500 tons of island ore co-mingling with the Maginot ore. The island ore was running, you know, from a day-to-day perspective, anywhere from 7 to 10 grams on average in that range. with Maginot ore that was running at about 0.9 at that point. So that's typically the sort of blend that we would expect to see as we start to continue to commingle this ore for the long term, running that entire plant with both ore sources feeding into the one mill. And the overall recoveries that I mentioned were in our expectation. We ended up with about a 96% recovery overall on the combined ore stream, which is what our expectation was.

Okay, great. Thanks. That makes sense. And then maybe one more if I could, if you look out longer term, obviously, you've got a lot of growth on deck through through 2030. But construction really starts to ramp up in the second half, you'll soon have three projects on the go. Can you give any color on how you're managing that sequencing it or otherwise managing risk over the next couple of years?

Yeah, we're, I mean, you know, our phase three plus expansion is well underway. I mean, we're well over halfway through, certainly. The shaft depth is nearing completion there by the end of this year. Pace plant, we're starting construction. It's not on critical path, but we expect to have that completed by the end of the year. And the next phase, obviously, for us is the continued mill expansion to support more throughput through the Magino mill. And we're working through that time-wise, expecting to have that completed in the second half of 2026. But we've got a solid team built there. We've got lots of people to be able to manage the Phase 3 Plus expansion. With regards to Mexico, PDA, we've done a number of projects down there over the 20-year period. And we basically have the team that's seconded within our operations team to be able to manage these projects. That's the way we've always done it in Mexico over the 20-year period. So we already have the complement of people that we need to be able to deliver on PDA, certainly with regards to the construction on the milling infrastructure that we're going to be building there. On the mining side, it's going to be managed also with our operations team, but it'll be contract mining, so there'll be a complement of people that obviously will oversee that on the contract side. And then Lynn Lake, you know, certainly we're in the early stages of that, but we're in the process of building our team. All of the key figures that we need as far as management as we start the project are in place. So we're quite comfortable certainly moving on those three areas of growth over the next couple of years.

Okay, great. Thank you very much. Appreciate it. I'll pass it on.

Thank you. Our following question is from Oves Abib from Scotiabank. Thank you. Please go ahead.

Thanks, operator. Hi, Alamos team. Just a couple of questions for me. Most of my questions have been answered. One question that's been coming up since my calls this morning is just on the ASIC side. Basically, in terms of based on your Q1 results and you're expecting that 20% decline in ASIC, we're estimating you would need to hit about $1,000 to $1,050 per ounce in order to achieve your cost guidance or ASIC guidance. How confident are you in terms of achieving these cost levels?

It's Greg here. So we are very confident in what we can control, which is our operating costs, our sustaining capital. That is tracking well against the budget. What we really don't have any control over and don't have any foresight on is where the gold price is going to go and the share price. Those are two things that we have some control over, actually don't have control over, and therefore can't manage the impact on the cost. So really what we're saying is From what we have oversight on, we're very comfortable with respect to budget. We are over budget on what we had put in the guidance for our share-based compensation and the royalty expense. And if that continues to impact us, then it could have an impact on our overall cost guidance.

Okay, thanks for that, Greg. And just moving on quickly on to on the exploration side at Island Gold, you guys hit some pretty good results on the western side of Idle Gold. Is there plans to continue drilling on that side and any sort of color on that front?

Hi, it's Scott Parsons, VP of Exploration. Yeah, those results were encouraging and positive, and drilling is ongoing as we speak in the western part of the island, both from underground and surface, following up. on the up-plunge extension of the Western Orchard. So that continues to grow and expand as we step out. We had a good increase in resources there at the end of last year, and we continue to step out both closer to surface with surface drills and underground from our underground platforms in that area.

And with those underground platforms, Scott, is there a possibility that you have infrastructure to actually mine those areas as well?

Yeah, that's our approach with basically establishing our exploration drift underground is utilizing them initially for exploration. We'll put a drill at the end of the platform's drill. We hit mineralization and define a resource. We'll extend that platform further to be able to infill, drill, convert it to reserves, but also to continue exploration. And ultimately, those will be used for production in the future.

That's it for me. Thank you for taking my questions.

Thank you. The following question is from Kerry Mercury from Canaccord Genuity. Please go ahead.

Thank you, Martin, guys. Just a couple of follow-ups on Magino. You've made a lot of upgrades to the processing circuit there. Are there any more upgrades that you still need to do to get to the 11.2, or are you kind of there now?

No, it's Luke here. No, we're there now. I mean, as I mentioned, we've made, obviously, a A few modifications there from the original design that was installed. I can't emphasize that enough. It was some poor design considerations there with regards to the crushing circuit and conveying circuit. We've made all of those changes. We made some other modifications to the grinding circuit that we felt would improve the overall throughput. We've completed the batch testing with regards to a low-grade and a high-grade component of island oracle mingling with... with Maginot ore, and so we're confident on the metallurgical side of things. So there's nothing stopping us now from moving forward and starting hitting our stride to that 11,200 tons per day.

And as you think about the expansion to 15,000 plus, can you just remind us what sort of components are going to need upgrades to get to that level?

It's basically twinning the infrastructure that we have now, Kerry. It's talking about another crushing circuit, so two-stage crushing as well as two-stage grinding with additional leach capacity, both CIP and CIL, upsizing the elution circuit and upsizing the refinery to actually handle higher gold content overall coming in on a bigger processing plant, potentially up to 20,000 tons per day.

And that's twinning the grinding circuit as well? Correct. Yeah, okay. Okay, great. Thank you.

Thank you. Once again, please press star 1 at this time if you have any questions. The following question is from Don DeMarco from National Bank Financial. Please go ahead.

Thank you, operator. And good morning, John and team. First question, it looks like a bit of a catch-up on sustaining CapEx over the rest of the year. Is this as expected and aligned with your planned ASIC reductions and lower costs in H2?

Yes, that's correct. I mean, sustaining capital is always going to be timing-based, and we had expected it to be a little bit lower in the first quarter and catch-up over the rest of the year.

Got it. Okay. And so, you know, sticking with costs, I mean, full-year guidance was issued before some of the tariff announcements in the States. Are you seeing any impacts from the tariffs on your costs here or maybe some of the FX volatility weighs on them?

We aren't seeing any of the impact on tariffs now. I mean, I'll step back and say that about 50% of our cost structure is labor and contractors, and contractors are predominantly labor as well. So no real exposure there as well as on – there's another 15% that's energy and fuel. So the majority of our cost base is not really exposed to anything that could potentially have tariffs on it. But right now we aren't experiencing anything. What we are experiencing is the last part of what you said, which is a weaker Canadian dollar compared to what we had budgeted, so we are benefiting from that.

Okay. Good to hear. Then maybe just looking ahead, you indicate potential for a million ounces a year with further expansion of island. Can you add some color on the island expansion study that's pending release in Q4, including maybe the scope, the timing, and magnitudes of CAPEX that might be related to that study?

Well, as far as the larger mill complex, we're still working through that. We don't have specific numbers that we can talk to at this point. It's a bit too early. But I think we've communicated that we're going to put out a development plan by the end of the year, which would talk about what the larger mill complex would look like, both from supporting Maginot mining rates, but as well as looking at Island underground mining rates to see if we can go certainly beyond the 2,400 tons a day. As part of what we're contemplating is looking to bring the underground component of that mill feed to about 3,000 tons per day from Island underground.

Okay. Okay, great. Thank you. That's all for me. And good luck with Q2 and the rest of the year.

Thank you. We have no further questions registered at this time. I would now like to turn the meeting back over to Mr.

Thank you, Operator. I just wanted to say in conclusion that we have a long history of meeting or exceeding our guidance, and we take pride in that record. I think it's at least five years where we've either met or exceeded guidance. So coming in at the low end of production and higher on costs, it's not illustrative of our track record. and it's not indicative of our expected performance for 2025. We're already on track for a much stronger second quarter and further improvement in the second half of the year. And furthermore, if you take a look at our three-year outlook, it continues to demonstrate that we're going to have further growth in production and further declines in costs. So our outlook, it looks better than ever. So from that point of view, As a management team, we remain very confident in what we're doing. We saw the market reaction this morning to the quarterly result. We think it's certainly overdone. We have a strong year in front of us. We've come through a tough quarter, but stronger quarters lie ahead. And we're very, very confident in our ability to deliver on that. So with that, I'll conclude my remarks and turn it back to you, operator.

Thank you. The conference has now ended. Please disconnect your lines at this time, and we thank you for your participation.