Iamgold Corporation Ordinary Shares

Thank you for standing by. This is the conference operator. Welcome to the IM Gold second quarter 2024 Operating and Financial Results conference call and webcast. As a reminder, all participants are in listen-only mode and the conference is being recorded. After the presentation, there will be an opportunity to ask questions. To join the question queue, you may press star then 1 on your telephone keypad. Should you need assistance during the conference call, you may signal an operator by pressing star then 0. At this time, I'd like to turn the conference over to Graeme Jennings, VP Investor Relations and Corporate Communications for IM Gold. Please go ahead, Mr. Jennings.

Thank you, operator, and welcome everyone to the second quarter 2024 Operating and Financial Results conference call. Joining me today on the call are Renaud Adams, President and Chief Executive Officer, Martin Finucin, Chief Financial Officer, Bruno Lemelin, Chief Operating Officer, and Tim Bradburn, Senior Vice President, General Counsel and Corporate Secretary. We are joined today from IM Gold's Toronto office, which is located on Treaty 13 territory on the traditional lands of many nations, including the Mississaugas of the Credit, Donoshenavec, Chippewa, Bhutan-Noshoni and the Wendat peoples. At IM Gold, we believe respecting and upholding Indigenous rights is founded upon relationships that foster trust, transparency and mutual respect. Please note that our remarks on this call will include forward-looking statements and refer to non-IFRS measures. We encourage you to refer to the cautionary statements on disclosures on non-IFRS measures, including the presentation and the reconciliation of these measures in our most recent MD&A, each under the heading Non-Gap Financial Measures. With respect to the technical information to be discussed, please refer to the information in the presentation under the heading Qualified Person and Technical Information. The slides referenced on this call can be viewed on our website. I will now turn the call over to our President and

CEO, Renaud Adams. Thank you, Graham, and good morning everyone, and thank you for joining us. It was another exciting quarter for IM Gold, with the first full quarters of operations at Kote and another strong operating performance from Mississaugas Westwood, putting us in a position to increase our overall guidance for the year. At a high level, I believe this quarter begins to paint a picture of what, ultimately, IM Gold would look like. Kote Gold is now ramping up, providing for higher production base, lower cost profile, and shifting the density of our value to Canada. At steady run rate, Kote Gold will be among the largest gold mines in Canada and a model for mining, for modern mining done right and for many decades to come. This is then coupled with strong and predictable productions in cash flow from Mississaugas Westwood. In addition, as a company, we are seeing our financial position growing stronger, quarter over quarter, with the potential for significant step change and improvement next year when Kote is running at full steam and our prepay commitment are behind us. This will position us with a clear roadmap for success, with strong free cash flow generations will be essential to ultimately deliver the balance sheet and drive value accretions for our shareholders. In next quarter, we continue to improve the business and get closer to our objectives. With that, we will now dive into the operating and financial results and highlights for the quarter. Starting with health and safety, IAMGOL has continued to demonstrate a non-glazing commitment to safety excellence. At IAMGOL, it is our priority to ensure everyone goes home safely. In the second quarter, a total recordable injury frequency rate of 0.6, an improvement from the prior quarter. I want to commend and congratulate the ESSA PAN team, which recently surpassed the record health and safety milestone of 5 million hours work with our recordable safety incident. Reaching triple zero over such a period is a monumental achievement in our industry and a testament to the professionalism and commitment to a culture of safety of our people in Birkenau-Fassos. Looking at operation, on an attributable basis, IAMGOL produced 166,000 ounces of gold in the second quarter, bringing the -to-date production to 317,000 ounces of gold. As we will get into a moment, the second quarter production results were driven by ESSA PAN being unable to operate without disruption and benefiting from continued positive rate reconciliation. In the second quarter, the first quarter production results were driven by ESSA PAN being unable to operate without disruption and benefiting from continued positive rate reconciliation. Looking at our guidance, the strong first half positioned the company to beat on operating guidance for the year. Accordingly, we have increased our production guidance and lowered our cost estimate for the year. On production, IAMGOL has increased its 2024 attributable gold production guidance for a second in Westwood to 495,000 to 440,000 ounces of gold, up from 430,000 to 490,000 ounces previously, as both of these mines have a strong first half of the year. At Cote, we are maintaining our guidance of 130,000 to 175,000 ounces on a 60% basis, but we now expect productions to come in the lower end of this range as improvements are made to mill availability. But we will get more into this in a moment as we walk through each asset. On operating costs, the 2024 cost guidance for a second in Westwood combined is now expected to be in the range of $1,175 to $1,275 for cash cost per ounce sold, and $1,700 to $1,825 for ASIC per ounce sold. This compared to the previous guidance estimate of cash cost per ounce sold of $280 to $1,400 and ASIC per ounce sold of $1,780 to $1,940. While we have brought our cost expectation lower this year, the updated guidance ranges are above our -to-date performance, as the increased guidance reflects the outperformance we saw in the first half, and grades are expecting to come down at a second as we enter new mining phases. While inflationary pressures are easing, pricing for certain consumables, including finite and grinding media, remains in line with the level of experience in 2023. With that, I will pass the call over to our CFO to walk us through our financials results and position.

Marching? Thank you, Rimo, and good morning, everyone. In terms of our financial position, Armgold ended the quarter with cash and cash equivalents of $511.4 million, and our credit facility remains undrawn, equating to total liquidity of approximately $915.7 million. We note that with the cash and cash equivalents, $55.9 million was helped by Kocagold, and $188.2 million was helped by Esacan. Esacan declared a dividend during the second quarter of $180 million, for which the minority interest portion and withholding taxes were paid during the second quarter 2024. The net portion due to the corporation of $151.9 million is expected to be paid by the end of this year. However, this is dependent on Esacan's estimated future cash flow operations to leave a sufficient working cash balance in country. Any unpaid amounts will be paid during 2025. We continue to see a risk on the ability to recoup all of the VAT receivables, though the company was able to sell a small amount to a local bank in Burkina Faso during the second quarter. The company still has considerable obligations and factors which will influence our liquidity during the next 12 months. During May, the company completed a board deal equity financing for aggregate gross proceeds of approximately $300.2 million or $287.5 million net of fees. The company intends to use the proceeds from the financing to partially finance the repurchase of the $9.7 million interest in Kocagold from Sumitomo on November 30, 2024, with the difference funded from available liquidity. Additionally, the company has to deliver 150 ounces under its gold prepay arrangements from July 2024 to June 30, 2025. The prepay arrangements were funded at the time of entering into the arrangements. The company will receive some cash payments at the time of delivering into the gold prepay arrangements based on the amount that the market price of gold at the time of delivery as follows. For 50,000 ounces that will be delivered from July to December of this year, the company will receive the difference between the spot price and $1,700 per ounce, capped at $2,100 per ounce. For 31,250 ounces that will be delivered during the second quarter in 2025, the company will receive the difference between the spot price and $2,100 per ounce, capped at $2900 or $2,925 per ounce. Lastly, the company expects to receive $84.4 million in gross proceeds in 2024 in respect of the closing of the remaining transactions arising from the remaining Bambooke asset sales. Please refer to the liquidity outlook section of the MD&A for further details. Looking at our Q2 financial results, high production resulted in lower unit costs as our operating costs remain in line with costs incurred during Q4 2023 and Q1 2024. With costs remaining in line with prior periods, the high realized gold price resulted in higher margins and higher free cash flow. Revenues from continuing operations totaled $385.3 million from sales of 167,000 ounces on a 100% basis at a record average realized price of $2,294 per ounce. The realized price includes the impact of the gold prepay arrangements delivered into during the quarter that reduced the realized price by $60 per ounce. The strong second quarter operating results coupled with the high gold price resulted in an adjusted EBITDA amount of $191.1 million compared to $152.5 million in the previous quarter of the year, which is $127 million higher than the $63.8 million adjusted EBITDA number in the second quarter of 2023. Adjusted earnings per share was $0.16 for the quarter compared to $0.11 in the previous quarter and a $0.01 loss in the second quarter of 2023. Looking at minesite free cash flow, which is calculated as cash flow from minesite operating activities, less capital expenditures from operating minesites, Westwood and Esacan produced a recent high of $140 million, including Westwood, which returned its second quarter of positive minesite free cash flow since the restart in June 2020, bringing its -to-date title for the mine to $32.3 million. At Esacan, we note minesite free cash flow in the second quarter was $118.2 million, that is $81.8 million higher than the $36.4 million during the second quarter of 2023. And with that, I will pass the call back to Renaud. Thank you, Renaud.

Thank you, Martin. We will walk through our operating performance at Esacan and Westwood before we dive into Coté. At Esacan, the mine reported a tributal gold production of 111,000 ounces in the second quarter, up 26% from prior year periods and bringing the -to-date total to 329,000 ounces. This was not a very strong quarter of operation for Esacan and made possible by our mining operation being able to perform decline in the quarter, compounded with continued higher than expected grades. Mining activities totaled 11 million tons in the quarter, with only 2.2 million tons of ore mined as mining worked through a higher strip sequencing of the mine, coupled with limited mining in a part of phase six due to localized instability which required enforcing and has been addressed since then. Head grade remained high at 1.46 grams a ton due to the continued positive reconsolations of grade from the reserve model as we continue to mine deeper into phase five. This positive grade reconsolation in the deeper portions of Esacan was seen previously in phase five and is continuing in phase four and continuing in phase five. However, we are seeing head grades decline in line with the Life of Mine plan as volumes from phases six and seven increase and from increased proportion of stock pipe are included in the mill fee. On a cost basis, Esacan reported second quarter cash costs of $1,081 per ounce and all-in sustaining costs of $1,481. A slight increase from the prior quarter, way below our previous guidance to the strong productions and gold sales. With a strong first half of operations in 2024, Esacan production guidance has been revised upwards with a tributal production expected to be in the range of 380,000 to 410,000 ounces. This compared to the prior guidance of 330,000 to 370,000 ounces of gold. The mill is expected to continue operating at nameplate capacity, though at average head grade slightly lower than in the first half of the year as per the Mine plan. The cost guidance for Esacan has also been revised onwards and is expected to be in the range of $1,175 to $1,275 for cash costs per ounce sold and $1,575 to $1,675 for ASICs per ounce sold. Approximately $100 to $125 per ounce improvement on both metrics due to the outperformance in the first half of the year. Capital expenditure guidance has been increased to approximately $175 million, primarily due to an increase in the strip ratio, not total tons mined, resulting in more mining costs being included in capitalized waste and equipment replacement. Esacan continues to be a significant cash flow contributor for IOMG. With the current mine life through 2028, this operation has the capability to generate over a billion dollars of cash flow at current gold prices. We are continuing to examine the opportunities to extend the mine life of Esacan, targeting options within the fence to ensure the safety of our teams. Turning to Westwood, I want to congratulate the team on another improvement in the quarter, as the mine continues to test new highs in quarterly volumes from underground grades and production since the mine restarted in 2021. This improvement has meant that Westwood has generated, as Marty noted, positive mine-free cash flow of nearly $22 million in the second quarter, bringing the -to-date total to just over $32 million. On operation, Westwood produced 35,000 ounces in the quarter, a significant 84% over prior year period and bringing the -to-date total to 67,000 ounces a year today. Our mines from underground continue to step up and at a higher grade, with 89,000 tons in the second quarter contributing to an average head grade from underground ore of 9.2 grams a ton. Milled throughput also increased in the quarter to 302,000 tons per se, at an average blended head grade of 3.92 grams a ton and 92% recovery. The increase in throughput was driven by improved availability of 89% due to the ongoing maintenance program. The cost profile for Westwood continues to decline as operations improve. Cash costs averaged $1,131 an ounce and all in sustaining cash averaged a promising $1,663 an ounce in the second quarter, continuing the trend of -over-quarter cost improvement. Looking ahead, we have raised our guidance for this year, with Westwood now expected to produce between 115,000 to 130,000 ounces of gold at lower cash costs of $1,200 to $1,300 per ounce and a stake of $1,775 to $1,900 per ounce. In the fourth quarter, we will be issuing an updated technical report and mine plan for Westwood, which will provide an updated mineral resource and reserve estimate and life of mine based on the last 2.5 years of mine optimizations efforts at Westwood. Turning to KodiGol, we couldn't be more impressed with the work of our teams on the ground as they brought Kodi to commercial productions only four months after the initial gold pour on March 31st, 24th, which was achieved within 90 days of our first pre-commissioning activity. The ramp-up of Kodi has seen the project hit significant milestones in its first few steps as a mine. We took the path of testing first the capacity of the main equipment that drives the ultimate nameplate objective and then build availability as we ramp up. From early on, the primary components of the processing circuits, primary and secondary crushing, HPDR, conveyors, ball mill, leaching, etc. all have proven their capability to operate on their design load when provided with stable conditions. During the same period, we also took the time to all of the team to stop and correct several deficiencies that it is usually the case that early days of ramping up a large scale facility. The first week took about the whole first half, the second quarter, where 45 days go fast. In the second half of the quarter, efforts were made on slowly but surely cranking up the engine and testing the stability and the overall availability of the processing facility. While identifying all potential limiting factor to objective of exiting the year at 90% nameplate. In early July, the team pushed a commercial production button and reached our objective 30 days later with nameplate production of 36,000 tons achieved on August 1st as the last day. On the drive side, we can report that we are very pleased with the performance of our HPDR and believe that it will bring great value down the road. During the ramp up phase, we have identified some improvement required on the drive side in order to achieve design availability and performance. The first one has to do with mitigating the effect of abrasiveness on the wear parts. The art Cote is highly abrasive, which was always known, but with actual effect to be experienced. Availability of the crushing and screening circuits in the second quarters was somewhat impacted by accelerating wear on the liners, feeders and chutes due to this abrasiveness. The new lining material has been identified and tested with good results in some critical area. Second, the continued core screening performance was also limited during ramp up and you and you panel design are being proposed. Finally, dust management was challenging in the early days and in particular in the screening building. And while significant improvement has been made more corrective action needs to be made. We have tested addition of suppressions both water and surfactant system in critical area with great results. So all in all, everything is solvable. We have identified corrective actions and we have initiated implementation of that. The company is planning a multi-day shutdown in September, at which time we will deploy key optimization to address all of the issues and improve the long term availability of the plant. We are very confident in the ability of Cote to ramp up well this year once we address these issues. Further, the power requirement of the plant has been lowered and unsuspended, providing important available capacity for down the road. In the second quarter, mining activities achieve a new high of 10.5 million tons of total material mined. Further, great mines are continuing to come largely in line with our great control block model in the current life of mine. Mining costs in the quarter, despite not yet running at full run rate, were comparable to Canadian open pit piers at just under $4 a ton. An increase from the prior quarter to temporarily optimization activities on blasting patterns and production drilling, as well as some powers, retailments experienced in June due to unseasonal heat wave. On processing, mill throughput in the second quarter was 834,000 tons at an average head rate of 1.4 grams a ton for a total of 34,000 ounces produced, at a 100% basis. The revenue circuit was successfully commissioned toward the end of the quarter, and recovery has responded well to the ramp up of the operations, averaging 90%. In July, Cote Gold processed over 620,000 tons of ore with productions of nearly 26,000 ounces of gold. We have maintained our guidance at Cote for this year, though we have guided to the lower end of the range of 220 to 290,000 ounces on a 100% basis. As improvement to mill availability are made during the ramp up of raising during reducing expecting tons prior to completing those solutions. We believe that exiting the year at nearly nameplate will set Cote and I am go for huge success starting early 2025. I will now hand the call back to Martin for a brief update on projects ending this year.

Thank you, Renault. I want to note that as we discuss project expenditures, all costs are being quoted on a 100% basis. Project and capital expenditures were 92.6 million in the second quarter and 288.9 million year to date. The expenditures include project expenditures of 30.7 million to support the completion of commissioning and certain scopes of non-critical path earthworking infrastructure. Prior to the first call for on March 31, project expenditures were 151.7 million, totaling 182.4 million for the year. 24.5 million of operating expenditures related to milling and surface costs have been capitalized in the second quarter and 51.5 million year to date in support of the commissioning and ramp up efforts in advance of achieving commercial production. Capital expenditures related to operations for the second quarter were 37.4 million and 55 million year to date. Capitalized waste stripping and capitalized operating costs are expected to be higher when compared to guidance, which is offset by lower capital related to operations due to some of the equipment being purchased through our increased leasing facility. The total of all of our capital expenditures of 454 million, as well as the timing of the expenditures, are in line with the forecastings guidance for the year. Back to you, Renaud.

Thank you, Martin. So that is that. Our goal this year is very clear. We need to ramp up the plan availability and utilization to exit the year at a throughput rate of approximately 90% of nameplate and start 2025 on a very strong footing. This brings us to the slide we always like to finish on, and this is what the future is for Cote. We are continuing to advance in our understanding of the impact of Goslin and potential of the project. At the end of 2023, we updated the Goslin Mineral Reserve and Resources Estimate with an additional 35,000 meters of drilling, which was drilled over the two years prior. This year itself, we are conducting a 35,000 meters drill program targeting the central zone between the pit shells, where we see indication of continuation of mineralization and heterothermal breaches. As well as some deeper holes to understand the continuity of the mineralization below the current pit shell. When we look at the resource and reserve statement, the Cote deposit has estimated mineral reserve on a 100% basis of 7.6 million ounces. These reserves form the basis of the current economics of the project. On a measure and indicated resource basis, the Cote pit is currently estimated at a total of 12.1 million ounces. The adjacent Goslin pit has an additional 4.4 million ounces of measure and indicated resources and nearly 3 million ounces of inferred, bringing the project to a total of 16.5 million ounces of measure and indicated and an additional 4 million ounces of inferred. The size of Cote and Goslin together put the project, the mine, and the very exclusive company amounts large scales producing Canadian assets. We expect to have the results of this program later this year, which will greatly inform our understanding of how to incorporate Goslin and remaining measure and indicated into a potential future mine plan. So, thank you all. And I look forward to a very exciting year ahead. With that, I would like to pass the call back to the operator for the Q and A. Operators.

Thank you. We'll now begin the question and answer session. To join the question queue, you may press star then one on your telephone keypad. You'll hear a tone acknowledging your request. If you're using a speakerphone, please pick up your handset before pressing any keys. To withdraw your question, press star then two. The first question comes from Linda Solley with CBC World Markets. Please go ahead.

Good morning, everyone. My first question is this respect to Cote. What factors are, what are the main factors that drove the indication that you're going to be near the bottom end of the production guidance range at Cote? Is it throughput grade, recovery rate? And then the second one probably relates to that. How long will that shutdown last in September?

Thanks for your questions. And as you're also the one that asked me early in the year how we set the original guidance. I would say that it's mostly a matter of the total tons mills. So if you recall, we set the guidance early in the year, the 220 to 290. Specifying that we were confident in the high grade, which is happening, but also basically saying that at a perfect commissioning without any need for further down time and so forth with the 6.5 million ton process or so, we'll set the 2.290. As I explained in my comments, we really did take the time in Q2 to properly stop and correct things as we move forward. This has been our philosophy since day one and I'm very pleased in its thing. Maybe a little pain in the short term on the total announcers, but we're definitely going to shift the profile starting in 25. So we did that in Q2. And as I mentioned, so to your point is originally speaking, we were probably thinking of the five days in September, but we're prepared to go further. So if it takes if it takes additional downtime and not a five, seven days, but total of 10, 15, whatever it takes to correct all those issues, if it takes less, we may perform better than the lower end. But we just want to make sure that we're prepared to take the time in September. So let's call for a 10 to 15 max and we'll see how it goes for the remaining. So largely the time process and as we correct things as we move forward.

Okay, thank you. And then I noticed you provided mining costs pretend for the Q2. Thank you for that. I know. And I also know that relatively short period of time since you've declared commercial production on on August 7th. But can you give us an indication how the processing costs are going at this stage?

Market

marketing well, good

morning, Anita. The processing cost on a total basis is actually well within our expectation and our plans. There is, of course, some additional costs being incurred as they are fixing or replacing certain things. But when we look at where we are, we expect the dollar per ton cost when we get to the end of the year to be in the ranges that we guided and discussed previously. So in line with the 43 101 with slight increases because of inflation, but also just we won't be at 100% yet. But our expectation on the cost of them all have not reduced at this or have not changed at this point.

I think I think Martin, it's fair to say that the range of the 10 to 15 is just a matter of the tons. So we were still low globally low with 839,000 tons in the 2nd quarter. Well, with only 1 month of 620, so what we're expecting to get closer to the 10 objective 10 to 11 objective as we exit the year, but it's really a matter of time.

And that power, as you mentioned that you're using less power or is that factoring into that lower benefit on con?

Yeah, but but also power, even though it's a massive, it's a big operations power cost per kilowatt or would be extremely low at coating. As we manage peace and we're expecting one of the lowest cost, you know, clear water, you know, pretty much in the industry. So yes, this is, but the real benefit beyond potentially saving is the opportunity of using this extra power down the road. As we will, there's some, you know, certain that, you know, like the 72 megawatts, so you use it how you want. Right? And and this is what we're the most excited about is we feel that the main equipment and the web on the website. And they drive more tons down the road. That's the main play. It has to be proven on a steady basis, but what we've seen so far is we're definitely using less power for the same throughput.

And then just an idea in terms of the, the build out in the summertime, I noticed they might be mining rates on or were similar to last quarter. So I'm just assuming you guys are a little bit more focused on building the tailings dam over the summer months. Is that correct? And when how much how much how many times do you have to deliver to the tailings dam in Q3?

I don't have the details of the time, but if you recall, and as described as well in the 43 101, so we're basically executing the whole phase two. Right? And this will combine with the fact, you know, of the throughput, the rep up will position will position towards the 18 months of capacity. And then as we move forward this summer, we'll add. But yes, we're completing the phase two that we've initiated last year. We're completing it this year and that and then by fall, we should have minimum of 18 months ahead of us. And then we'll continue on the on the yearly basis to raise. And our objective is to be comfortably sitting at least on the 24 months beyond. I had a lot.

And my last question, just in terms of stockpile levels, can you tell us how many how many tons of or you have stockpiled ahead of the mill right now and what the average grade is there?

Breno, you got this?

Yes. Good morning Anita. So, so far we have 8 million tons grading at point 75. We have different category of stockpiles with direct feed, high grade ore and high grade ore and low grade ore. So, so far we are pretty satisfied with the level of stockpile and also with the reconciliation on the high grade category.

And then you mentioned, I think, in the, that you're directing more higher grade from the, from the pit to the mill. What would that high grade be on average?

We define high grade whatever is above the point 7.8 gram per tonne category. So right now we have a good fair amount of stockpile at 1.6 gram per tonne in front of us. And we have also some run of our mine at 1.14.

So we'll try to, we'll try to keep the mill towards, you know, the 1.5 till the end of the year. We did very well in July as well. So, so there is no, there is no issues or reason to believe, you know, we won't deliver the grade. So it's, it's really about cranking up the tonne that should through. But the mine has been doing very well so far.

Thank you. That's just my question. Congratulations on hitting commercial production.

Thank you so much.

The next question is from Wayne Lam with RBC. Please go ahead.

Yeah, thanks guys. Morning everyone. Just wondering maybe Akote if you might be able to speak to the performance of the autonomous operations to date on the haulage and drilling and just where the challenges have been and how you've mitigated those risks.

I would, I wouldn't call that too many risks to be mitigated. I think more every quarter that goes by, we get more comfortable with, with autonomous haulage and has been operating very well. And Bruno just mentioned the stockpile and everything that's been processed. So basically every single tonne that's been put on the stockpile, you know, has been with, with autonomous trucks. And it's been performing extremely well at a very high availability and so forth. So I honestly do not see any issues with them. And, and hopefully over time we could be even better. And with our drilling automation as well. So working hard on both. But, but autonomous is, is absolutely working beautifully and, and, and not to underestimate as well the health and safety aspect of not having operators behind the steering. It's not about cutting job. It's really about improving modernizing operations and make it safer, safer. But so far so good. Excellent. I'll give a very high score to the implementation of autonomous haulage. I will redo it anytime.

Great sounds like things are going pretty well. Maybe moving to Westwood just on the grade there, which seem pretty positive relative to the relative to the reserve. Do you see those grades continuing through the year? And then with the upcoming technical report, do you see upside to the targeted run rate from the underground beyond the 900, 900 tonnes per day? And given the strong performance of the mine now with the underground now rehabilitated, do you envision that asset as one to keep in the portfolio longer term or could it potentially be classified more as non core?

The, I'll go another. My KPI is in every quarter. I've seen the asset ramping up with more time from underground. The overall grade improving from underground. We're sitting on the reserve of roughly 10, 10.4 grams a ton reserve. And that's the ultimate objective. You need to position yourself at some point where you start mining at the reserve grade at Westwood. And this is where you're going to feel that you have reached a certain stability and sustainable. So pretty close to we could be basically one quarter away of reaching. Once you get that, you want, like I said, you know, to to continue to operate along those lines. We're extremely, extremely pleased to how Westwood has performed and continue to perform and the cash flow. So comfortable to say that at this at this stage, you know, we're very pleased with both. It's a canning Westwood and we definitely can see this two mines continue being a big, big. Collaborator, if you will, you know, to our and contributor to our story. Having said that, I don't think so. We've seen the end of the optimization of Westwood. So we're going to put the 42 101. We want to see what we could do, where we could get. And and as I said, you know, strong production profile and improving and and free cash flow. So we're very, very pleased on the total times we see. Bruno getting wet a bit here. So what what do you see down the road?

Thank you. No, actually, the the performance from underground is getting better and better due to the other work we've done over the last two years and a half. This group to be very beneficial for us in our ability to reach our targets at 900 tons per day. Of course, we have vision to increase this closer to the 1100. Those are the kind of targets we're looking at again with the new 43 101. We'll be able to express with more clarity what those targets are going to be and also the extent of the life of mine with the new block model. So at that time, we'll be able to get more insight related to that mining plan.

Okay, great. Thanks. And then maybe just last one just on the bamboo cassettes. Can you provide a bit more clarity on the final payment and whether there's any credit risk associated with that? Just seems like it's been a bit delayed and wondering what the risk is to that final payment coming in.

Yeah, I, it's a fair comment that it's been a bit long and I can assure you it's been a bit long for us as well. But but I think we're making great progress, honestly. So we're still comfortable of the closing of Guinea in the second half. And and following that, well, well, address the closing and Molly. So can we close both? You know, we still think that we're still saying that they're both. We're working towards closing both remaining talking about roughly 80 million of gross proceeds. And for both, so it's it's meaningful. It's important. It's important for for for people as well, because as you mentioned, we've got to move on here and allowed everyone to move on. So. So we're very active and remain confident. We're going to close.

Okay, great. Thanks. Thanks for taking my questions.

The next question is from Mike Parkin with National Bank Financial. Please go ahead.

Hi, guys. Congrats on the solid quarter. Most of my questions have been answered. Just a couple of follow ups. You gave us good color on expected shutdowns at Cote. Can you give us any guidance around shutdowns planned at Westwood or Esekant?

Definitely nothing extraordinary beyond the regular. So you're looking at the average availability of an Esakani and Westwood. We achieve 89 percent. So I think it's fair to think that we're going to try to maintain around that level to the end of the year. And this is basically done through plan shutdown a little bit of on plan, but we don't have anything struggling. And I think the same comment goes for Esakani as well. There's always, of course, things to be addressed, but we're not planning beyond the regular availability. So both mine should be in the availability or better of what you've seen in Q2. Okay.

And then the target at Cote to be at 90 percent of nameplate by year end is that like, obviously, you put out a daily number just recently and it's well on it. You know, it's at nameplate. But what's the 90 percent based on? Is that like a trailing four week average?

I'll be very, very happy by accumulating for a week. Let's say if what we've done in commercial using 60 percent of name plane, if we repeat that in December and we feel very strong, this is what we call exiting the year. So, so thanks for asking, but internally, this is how we would feel. It's not about a few days. We know we've done it one day. We know it's capable to be done. But as you ramp up, you want to make sure that you're solidly on the saddle, you know, and comfortably sitting on the saddle by the end of December. So let's call 30 days. Averaging 90 percent will be our key objective

in December. That's it for me. Thanks.

The next question is from Carrie McCrory with can accordion. Please go ahead.

Good morning. Just to follow up on the mail throughput, obviously, you hit commercial production. Should we be assuming that the mill is kind of going to run at around 60 percent through August up until the shutdown or is the mill performing a bit better than that now?

Yeah, no, definitely. From the moment you get the 60 percent, I would exclude September because, like I said, September is the big month, you know, where we're where we're going to be making a lot. But, yeah, so 60 percent has been reached and and becomes the baseline now. So from that, from that point on, we need to continue to improve. So, I think that's the goal of August. September will be for the time of fixing, but definitely some kind of steady ramp up with with a little bit of a dip in September allowing for the shutdown. But but 60 percent is and will remain the new baseline.

Okay, and then just maybe a question for Martin and the Sumitomo buyback. I see the option there is I think 380 million given the ramp up. Is that more or less where it's going to be? Or is that do you expect that to move around plus or minus?

Good morning, Kerry. We don't expect that number to change significantly, but it is dependent on the August cost and the August sales because that still gets the July and August cost and sales because that still gets incorporated into that. And the gold price has an impact, but but we don't expect it to change materially from the 380 million expected previously as well.

Great.

That's

it for me.

Thanks. The next question is from Stephen Green with TD Securities. Please go ahead.

Yeah, good morning, everyone. Just a quick accounting question for you. Up until now, you've been capitalizing your interest on Cote. Can we expect that will all start being expensed after the August 2nd date?

Yes, we will start appreciating the asset and we will stop capitalizing of our end cost after achieving commercial production, which we it would be either beginning August or beginning September, but probably beginning August.

Okay, great. That's all I had.

Once again, if you have a question, please press star, then 1. The next question is from Tanya Jekuskanic with Scotia Bank. Please go ahead.

Great. Good morning. Thank you very much for taking my questions and congrats on getting Cote commercial. I just wanted to come back. I know a lot of questions have been asked and needed it quite a bit on starting off on Cote. Okay, can I just go back to starting on the just on the pitch? You said the grade meets the block model. Just remind me right now on the availability of your truck. What are they operating at availability wise?

We're definitely on the in the in the specs. So, 85%, you know, just confirm 85% or so. So this is how you want to see a new Cote.

Okay, and then can I ask just looking at so going back to the processing facility before the processing facility, just the stockpile you gave us the 8Million tons for the 0.75. Can you just give me what the stockpile panages for the 1.6 grams per ton? Because I know that's what you're going to be feeding in the short term to the processing facility. So what do we have in 1.6 grams per ton?

Hello, we're talking about half a million tons right now. And we have packets in front of us directly in the pit.

We use a bit of stockpile of course during the ramp up and the mine was getting a new facing prepare and so forth. So we've entered we've entered now much like good grades and long and continuous benching. So expecting pretty good grade till the end of the

year. End of the year. Yeah, and you mentioned the 1.4. Okay, perfect. And then, yeah, we did

1.4. Sorry, just to clarify. So we did 1.4 and Q2. But, but now that we're, we're primed, if you will. So we'll like to maintain more towards the 1.5 in the end of the

year. Okay, so you are going to take a bit more of that higher grade stockpile through as well.

No, we just well, maybe, maybe, but also the line will be producing more until the end of the year of that. I agree.

Okay, that's helpful. And then as we get into the processing facility, and we're down for that 10 to 15 days. Just wanted to make sure like, you know, you're, you're, you're tacking the liners, the screens. Do we have all of this inventory on site right now? Are we still having to purchase or have this come to site?

A lot of that already, Tanya, the some will come later on in August. Some, some of the latest will be kind of very early September. So, we know we feel that we're going to be fully equipped to to address all those issues. So we're not expecting any issues on that.

Okay, and then just on the stuff that you talked about with that just, you know, a lot of dust that you're having to fight against the permit or what was it about the dust in general that you needed to, you know, I understand you need to control that. But I'm just wondering if it was a permit or if it was just a normal operating stuff.

I would, I would say more operating things. I mean, like, the objective is very clear. You, you, you visited a lot of assets and know what it is. And in the screening building and the crushing building using a mask should be a second layer of protections and not the main layer. So that's, that's the bar. It's like our commitment to health and safety rules are very strict as well, of course, in Ontario, as it should be. So we're going to bring this to basically the zero, the zero dos fugitive and dos and so forth. So, so we were not there at the beginning, of course, a lot of adjustment. But, but as we advance in August, we have some sectors now that really looks like a zero. So, so this is basically what has to do. So, most likely, we're just going to extend to every single critical area, the suppression system. We're working with a manufacturer as well to make the dust collecting system and more efficient as well. More and some optimization. So the combinations of both were very, very confident that will solve the problem once for good in August, in September.

Okay, just on the, on the processing costs that was quoted, the 10 to 15 dollars a ton. I just want to make sure that usb.

Yes.

And then thank you for that. All my questions on and congrats on getting this up. It looks like it's coming along nicely. Can I just move to my final question, which is just on the guidance for the remaining portion of the year for the company as a whole? We do have the lower grades coming in at as a can. Is that coming in like, you know, slowly? I e two, three is lower than Q two and then a lower Q four or are we already in the, in the low grade? And it's sort of even

in the two quarters. Yeah, the first part, like, July was somewhat like a transitions and remain good. And I think, you know, from there, like, as we enter August, like, slowly, we see this ramping down, but it has, it wasn't like a dry cut at the end of Q two. So, so we had a good July and we continue in our transitioning slowly. So, and, and, and on that, I know when you're looking at the guidance is, as I mentioned, you know, looks like we're performing better the year to date and, and how we look at it. And then, and then, and then, and then, and then, and then, and then, and then, and then, and then, and then, and then, and then, and then, and then, and then, and then, and then, and then, and then, and then, and then, and then, and then, and then, and then, and then, and then, and then, and then, and then, and then, and then, and then, and then, and then, and then, and then, and then, and then, and then, and then, and then, and then, and then, and then, and then, and then, and then, and then, and then, and then, and then, and then, and then, and then, and then, and then, and then, and then, and then, and then, and then, and then, and then, and then, and then, and then, and then, and then, and then, and then, and then, and then Okay.

So, looks like Q3 a bit lower and then Q4 will be the lowest. And then for Westwood with the revised numbers, are we still looking at quarter over quarter improvement Q3 over and then better improvement in Q4 on the grade side? Yeah,

but yeah, but as I mentioned, we're almost now already at the reserve grade, right? So, so there would be a point where you don't want to over, you know, mind this. So, so you're going to be following. So we're almost there. So. If if everything goes as well, well, Fayol is over. So there's about 1000 ounces of the first half of the year that came from Fayol. So this one is so we had a very good. A very good grade in the Gramsik as well and kind of the second half of phase one. So that's also so. So all those elements will maybe not be there in a second. So when you're looking at, I think the underground will continue to improve. But you may lose a bit of grade towards the Gramsik and you won't benefit the ounces from Fayol. So could we repeat H1 and H2? A little more challenging. But if the mind continues to ramp up well on the ground, we could be well positioned as well under this new guidance.

Okay, so kind of looks like, you know, you're almost there on grade. So mainly evenly distributed for the second half. Yeah, thank you so much for taking all my questions. I really appreciate it and congrats again.

Thank you so much.

This concludes the time allocated for questions on today's call. I'd now like to hand the call back over to Graham Jennings for closing remarks.

Thank you very much operator. Thanks to everyone for joining us this morning. As always, should you have any additional questions, please reach out to Renault or myself. Thank you all. Be safe and have a great day.

This brings to a close today's conference call. You may disconnect your lines. Thank you for participating and have a pleasant day.