Iamgold Corporation Ordinary Shares

Thank you for standing by. This is the conference operator. Welcome to the IM Gold First Quarter 2025 Operating and Financial Results Conference Call and Webcast. As a reminder today, 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 one on your telephone keypad. Should you need assistance during the conference call today, you may signal an operator by pressing star then zero. At this time, I would like to turn the conference over to Graham Jennings, VP Investor Relations and Corporate Communications for IM Gold. Please go ahead, Mr. Jennings.

Thank you, operator, and welcome everyone to our conference call today. Joining us on the call are Renaud Adams, President's Chief Executive Officer, Martin Venusten, Chief Financial Officer, Bruno Lemelin, Chief Operating Officer, Annie Torquilla-Lagasse, Chief Legal and Strategy Officer, and Doreena Quinn, Chief People Officer. We are calling 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, Anishinaabeg, the Chippewa, Putno-Shoni, 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 and disclosures on non-IFRS measures included in the presentation in the reconciliation of these measures in our most recent MD&A, each under the heading non-GAAP 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 Evans. Thank

you, Graham, and good morning, everyone, and thank you for joining us. And I know it's a busy morning with earnings results, so we'll do our best to move things along. IM Gold began the year with the modest production of 161,000 ounces, but you have achieved several key milestones that further position the company for a much stronger remainder of the year. We remain very confident in our 2025 attributable production guidance target of 735 to 820,000 ounces, with stronger quarterly production expected from each of our operations over the remainder of the year. As COTE, we have recently celebrated the best months of operations in March and April, achieving monthly throughput of 1 million tons processed with the plan operating now at the 90% plus of Namplate. This progress positions us well to complete the ramp up to Namplate production of 36,000 tons per day by the end of the year. Meanwhile, we believe we have a significant amount of value yet to uncover. This year, we are conducting a significant drill program in the Coate and Gosling zones in support of a technical report in 2026. Incorporating a mine plan that will bring these zones together into a unified superfit at online and larger scale operation, build up a significant portion of the over 20 million ounces of resources in this zone, making Coate one of the largest gold mines in Canada. At FKAN, we will continue to the safe operation of the mine, prioritizing the ability to maximize cash flow generations and dividend payment out of the country. As mining moves deeper into the pit in Q2, we expect to see improvements in great reconciliation and stronger quality gold productions for the remainder of the year. And at Westwood, our focus is on expanding our underground mining areas and continuing our strong record of resource to reserve conversion. Westwood made significant strides last year to become a positive cash flow generating asset. And we believe there is a significant potential to improve the value further through the drill bit and are increasing the feed of higher grade materials to the mill. Financially, we are quickly working through our gold prepayment arrangement, which in and of itself is a form of debt retirement. Taking together with the prepay behind us by mid-year, IMGOLD will be an 800,000 ounce per year producer with full exposure to gold price and significant cash flow generation from three pre-cash flowing assets. But yet trading at a fraction of our mid-tier peers on the price to cash flow basis. Further, with the Cote expansion scenario and the rapid growth of our Neligan and Monster Lakes assets in Quebec, which combined have nearly 9 million ounces of global resources, this means IMGOLD offer a robust organic growth portfolio within our own backyard. Now let's dive into the first quarter. Operating performance always starts with safety as ensuring all of our employees and contractor go home safely is priority number one. In the first quarter, our total recordable entry frequency rate was 0.67. A slight uptick from the prior quarter. Management Institute instituted a new safety program and control with a focus on critical risk management and visible leadership to reduce high potential incidents. Additionally, yesterday the company released its 2024 sustainability report, which mark the 18th year of IMGOLD disclosing the sustainability topics and information that are most material to our stakeholder and our business. As an organization and member of the community, we are proud of our dedication to responsible mining practices, the core element of the IMGOLD culture. Looking at operation, IMGOLD started the year with a tributal production of 161,000 ounces as both Cote and Westwood production was lighter than the prior quarter, partially observed by modestly higher production in the second quarter. The first quarter was expected to be the lightest quarter of production this year due to the ramp up in associated maintenance activity at Cote, limiting throughput early in the year and the expectation of the transitions to higher grade in the second half at the second quarter. At Westwood production decreased from the prior quarter, what is expected to resume its recent track record of strong performance has still development continues to improve flexibility in the mine. Cash cost average 1,459 per ounce and all in sustaining cost average 1,908 per ounce of the first quarter. Costs are expected to decline quarter over quarter as production ramps up and we remain confident in our cost guidance for the year. While lighter, the first quarter production of 161,000 ounces represents a net increase of 7% year over year at an increased margin, largely driven by the additions of -A-Gue, which moved from first of all in March 2024 to 90% plus nameplate in March 2025. This resulted in an increase of mine size free cash flow to 140 million in Q1 compared to 46 million in the same period of the prior year. With that, I will pass the call over to our CFO to walk us through our financial results and position. Martin.

Thank you, Renaud and good morning everyone. In terms of our financial position, at the end of the quarter, I'm called at $316.6 million in cash and cash equivalence and net debt of $882.3 million. The company has 210 million drawn on the credit facility and approximately 428.5 million remains available, resulting in liquidity at March 31 of approximately 745.8 million. We note that within our cash and cash equivalence, 200 million was held by Isakhan Bikina Faso, 46.9 million was held by Dakota Gold and Incorporated Joint Venture and 16.6 million was held in the corporate treasury. Regarding our excess cash at Isakhan, this cash is repaid areas through dividend payments of which the company will receive its share based on its ownership. So 90% currently net off the dividend taxes. The size of the dividend is dependent on cash held and the projected cash narration at Isakhan. Last year, we declared 180 million dividend in the second quarter with the company receiving its net share in September and October. We expect a similar process this year in which we will be declaring our dividend the second quarter with disbursement in the second half of

the year.

On the dead side of the balance sheet, this year offers a significant inflection point for our gold with the increase in gold prices are providing us with the ability to accelerate our plan to reduce the amount of costs of our debt, the amount and cost of our debt. One element of this that we are making good progress on is our delivery into the gold prepay arrangements. During the first quarter of this year, the company delivered 3,500 ounces into the gold prepay arrangements and we are 75% complete with the last 37,500 ounces deliverable during the second quarter. This is a considerable amount of debt that the company has repaid. The cash flow impact of delivering into the 37,500 ounces totaled approximately 107 million during the quarter. Subsequent to the quarter end, a further 12,500 ounces was delivered in April, reducing the outstanding balance of ounces remaining to be delivered into the prepay arrangements to 25,000 ounces as of today. Once we have completed delivering into the gold prepay arrangements, as part of our plan to reduce our carrying costs of debt and debt levels, the company can start to repay its 400 million term loan at the end of May in 20 million dollar installments at 104% of the face value and 101% of the face value that we paid after May 2026. The term loan has relatively higher interest in our other debt in our capital structure and responsibly paying down this facility would achieve our objective to reduce the amount of cost of our debt. Looking at the cash flow waterfall for the first quarter at the bottom of slide seven, we can see the impact of delivering into our gold prepayment has had on our operating cash flow. It's cash from operating activities, including the non-cash revenue of 77.7 million before financing charges that was received when the gold prepay was entered into and IMGOL would have received 107 million if the 37,500 ounces were sold in the market during the quarter. By July this year, the prepay obligations will be completed and IMGOL will be fully exposed to gold price at a time when we expect to see increases in production. Looking at the quarter and our financial results, revenues totaled 477.1 million from sales of 174,000 gold ounces at an average realized price of $2,731 per ounce, including the impact of the gold prepayment arrangement. Excluding the impact of the gold prepays our average realized price was $2,909 per ounce. The strong gold price translated to an adjusted EBITDA of 204.5 million compared to 152.5 million in the first quarter, 2024. Adjusted earnings were 55.2 million in the first quarter or 10 cents per share. Mine site free cash flow was 57.6 million at Carte, 65.4 million at Issa Can and 16.6 million at Westwood, totaling 139.6 million for the quarter. As we look ahead for IMGOL, we are continuously analyzing what the appropriate capital structure is for an organization of this size with expected cash flow generation. Ultimately, we look forward to discussing the potential of returning value to our shareholders with a through share buybacks of the evidence. But first we need to ensure that we achieve our targets and that the business is appropriately funded and we have produced our date to appropriate levels. And with that, I will pass the call to Bruno Levenen.

Thank you, Martin. Starting with Cote-Gaulle, it was a critical first quarter at Cote with the first winter at full production. As it is the case for any ramp up of a large mining project, there's a learning curve for the operations and maintenance team. They learn the stress points in every process and make adjustment to adapt to real conditions. During the first quarter, we experienced accelerated maintenance in our grinding area. However, we managed to operate without major interruption due to weather. We also hit new records for stability and utilization in March with continued improvement through April. This is very positive progress for an operation of this site. A year ago on March 31st, Cote poured its first goal bar. Commercial production was then achieved effectively four months after starting production. And now we have hit the 90 person monkey milestone about 11 months after pouring first goal. This is a great achievement and we remain on target towards our goal to achieve full main plate of 36,000 tons per day before the end of the year, again, within the 20 month estimate as projected initially. Looking at the quarter, Cote produced 73,000 ounces on a -on-one basis in the first quarter. Production was lower in the quarter due to lower tons process in the revised grade profile of the mine. We need to note that the mine moves away from segregated profiling to a more efficient and streamlined bulk mining model. Mining activity totaled 10.8 million tons in the first quarter, essentially flat from Q4, 2024. Our mine decreased slightly to 3.1 million tons with an associated increase in the strip ratio to 2.5 to one. The average grade of mined ore was 0.78 grams per ton in the quarter, which reflects the updated mining schedule as mining activities expand the pit. As Cote transition towards a bulk mining model and reduces re-handling. Further, we saw an increase in the volume of blasted ore in the pit provide greater flexibility in supporting the planned mill feed this year. The mining process improvements and the starts of the transition towards bulk mining saw some image of benefits as we saw a decrease in our mining units cost to $3.49 per ton, down from $4.19 per ton in the prior quarter. Costs are expected to continue to decrease over the course of the year. As mining operations continue to ramp up closer to the target of 1 million tons a week and re-handling is reduced. On the processing side, mill throughput in the first quarter totaled 2.1 million tons as a result of maintenance in repair activities on the HPGR in January and February, as we discussed on our last earning calls. The changeover of the HPGR roles was completed in February, 2025. And we continue to make improvements to increase the lifespan of the planned equipment. For the HPGR, this includes adding some water to reduce the generation of abrasive dust, revising the ruler liner material and ensuring that a replacement set of rulers is always at site and ready to go. Once the repairs were completed in February, the plant was able to resume its momentum, achieving a record monthly throughput of 1 million tons in March or 90% of main place. This performance continued in April as over the last 30 days, COTE averaged 34,500 tons per day or 96% of main place. With a record 14 days in which the plant operated above main place capacity. Headgrades in the first quarter averaged 1.17 grand per ton, which were in line with our guidance of 1.1, 1.2 grand per

ton,

which feed material comprised of a combination of direct feed ore and stockpiles. Recoveries in the plant averaged 93% in the quarter, a modest step up as we saw the gravity circuit come online in the quarter. The reconciliation between the reserve models, rate control models, the mill feed continues in line with the expected tolerance. Mining cost was $20.18 per ton mill during the first three months. Unit costs were elevated in the first quarter due to the lower tons process, higher parts and contractor costs from the increased maintenance activity and costs associated with the refeed circuit to support the mill feed during maintenance period. Unit costs are expected to decrease over the course of the year as throughput increases towards main plate capacity and as operations and maintenance processes stabilize. For example, in March when COTE processed 1 million tons, processing costs averaged around $15 a ton. Further improvement can be expected with the installation of the additional secondary pressure that should reduce the use of the refeed circuit and related costs. Looking ahead, we remain confident in our COTE gold production guidance of 360 to 400,000 ounces on the one other person basis, which is actually a doubling of production from last year to this year. The primary focus continues to be the ramp up of the processing plant toward the goal of achieving design capacity of 36,000 tons per day by the end of this year. The installation of the second comb crusher in Q4 will provide further capacity and redundancy in the dry side of the plant in support of the operation and potential future expansion. The installation will require a move today shutdown, which is accounted for in the current guidance estimate. Of course, achieving main plate is just the start of our plans for value creation at COTE. Since initial design, the project has seen considerable resource growth where the original main plan called for a 36,000 ton per day plan, targeting just over 7 million ounces of reserves. And yet now COTE and Gosling zones combined for over 16.2 million ounces of measured and indicated, and 4.2 million ounces of inferred and resources, or over 20 million ounces together. Therefore, our plan this year is to conduct a total drill program of 45,000 meters focusing on the resource conversion at Gosling in support of a technical report in 2026 that outlines the significantly upside reserve base combining COTE and Gosling into a super pit. In the first quarter, we completed about 12,000 meter of this program prior to spring breakup. Operationally, we will continue to look for opportunities to include including options to increase processing plant capacity. Several components of the plant has been designed for 42,000 tons per day. And we have seen many, many days about 40,000 tons per day over the last year. Longer term, a prudent strategy for mining and the point that particularly in the gold environment where we are in is to maximize and monetize the number of tons of ore mines as they become available for processing. As currently designed, COTE has a mining capacity to average an annual ore mining rate of approximately 50,000 tons per day versus our current many plate processing of 36,000 tons per day. As part of the 2026 technical report, we will look to find the right balance to increase the scope of processing rates with the mining rates targeting a larger reserve base of the COTE Gosling super pit. We believe the results of this will outline a low capital intensive path forward, reinforcing COTE gold's position as one of the largest gold mines in the operation. Turning to Quebec, the first quarter at Westwood saw a step down with production of 24,000 ounces, which was about 10,000 ounces less than the quarterly average last year. Underground mining volumes were generally in line with 89,000 tons mine or 987 tons per day. However, underground head grade came in at 6.28 grams per ton compared to 78 gram per ton in the same period last year. Grain mine from the underground mine was lower than the prior year due to temporary equipment challenges impacting blasting efficiency that required stope re-sequencing and increased dilution in certain stokes. We have seen blasting efficiencies and improvement in April and we expect to see strong volumes from underground this year as the number of stokes, drills and loaded is nearly double what they were last year. Male throughput in the first quarter was 282,000 tons as an average blended head grade of 2.89 gram per ton and 91 person recoveries. Male availability averaged 94 person in the quarter, a good achievement and reflective of our team's ongoing maintenance effort. Cash cost and audience sustained costs came in above our guidance ranges for the year due to the lower production volumes with cash costs averaging $1,527 an ounce and audience sustained averaging $2,124 an ounce. Costs are expected to fall within guidance range seen here as volume increase in the remaining nine months of the year. Looking ahead, we remain confident in Westwood's ability to meet our production guidance with production of 125 to 140,000 ounces. Open pit activities from Grand Zic are currently planned to be completed by the fourth quarter of 2025 though Grand Zic stockpile material will contribute to the mill seat into 2027. However, should gold price remain where they are, there's a strong potential for further expansion and extension of the Grand Zic pit which will be evaluated this year. Finally, looking at the second, we saw a modest step up in production from the fourth quarter last year with attributable production of 86,000 ounces. Mining activity total 10.9 million tons mined in the quarter with 2.4 million tons of ore mined translating to a strip ratio of 3.4 to one. A decline from prior quarters as stripping activities required to open up phase six and seven move into the review mirror. Build throughput in the first quarter was 3.1 million tons which is in line with the typical quarter at this time with no constraints on supply chain. Average head grades were 1.08 gram per ton in the quarter which reflects mining in the upper benches of phase seven. Grade, grade tend to reconcile slightly below the reserve model during the earlier stages of mining a new phase. And conversely to the positive as mining moves deeper into a phase as was experienced in the first half of 2024 when mining activities were on the later stages of phase five. On a cost basis, ESSACAN reported cash costs of $1,557 per ounce and audience sustained costs of $1,845. As the six dollars announced to start the year. Costs are expected to improve as production improves through the year. As a whole, ESSACAN's costs have increased over the last few years due to higher landed fuel prices in country as well as higher supply chain and transportation costs impacted by the security situation. Further, as the gold price increases, there's an impact to cost due to royalties. For example, in the first quarter royalties accounted for $203 per ounce. Looking ahead, ESSACAN is on track to achieve its attributable production guidance target of 360 to 400,000 ounces at the cost seen here. The mill is expected to operate at throughput and head grade in line with the current life of mine. Though as mining moves deeper into phase six and seven, in the second half of the year, grades are expected to reconcile positively over this period. While the cost of operations in the country has risen over the recent year, ESSACAN remains a world-class mine position to generate strong pre-cash flows as waste-preparing expenditures are expected to decrease year over year. Finally, it is worth highlighting the work ongoing at our second largest gold mining camp, the Nittigan and Monster Lake Project in Shibugami, Quebec. The first quarter, we completed over 8,000 meter of drilling on our 13,000 meter program targeting the extension of the Nittigan deposit. Nittigan's mineral resources estimate was updated earlier this year, which saw indicated ounces increased to 3.1 million ounces with an average rate of 0.95 grams per ton and an additional 5.2 million ounces in inferred at similar grades. Then again, mineralization remains open at a long stride and at depth with some of the most encouraging results at fifth, as you can see in the diagram here. In addition, the drilling program at the Monster Lake Project is also ongoing targeting high-grade underground structure. With that, I will pass it back to Bruno.

Thank you, Bruno. So we look forward to the result of this program as Nelligan has seen rapid growth from a relatively conservative drill program over the last two years. When you combine Nelligan with a high-grade satellite Monster Lake deposit, they are nearing nine million ounces of resources in this mining camp already, positioning Nelligan at a relatively early stage among the largest gold projects in Canada with significant potential for greater growth. Taken together, there is no question that our Shibugamo assets offer significant organic growth potential in a very mining-friendly jurisdiction in Canada. So thank you all. It is really an exciting time for IMGolf and we're very, very positive about what the rest of 2025 holds for the company. Kote is entering the second quarter at 90% plus throughput rate with further improvements to come, including the second cone crusher installation later this year. Westwood currently has record underground inventory ready to blast to drive up productions for the remainder of the year. Esa Khan is moving into higher grade in the second half of the year, and there is substantial growth to come through the drill bit at Kote and Nelligan. So stay tuned and thank you for your support. With that, I would like to pass a call back to the operator for the Q&A. Operator.

Thank you. We will now begin the question and answer session. To join the question queue, you may press star then one on your telephone keypad. You will hear in tone acknowledging your request. If you're using a speakerphone, please pick up your handset before pressing the keys. If you would like to withdraw your question, please press star then two. We will now pause momentarily to assemble our roster. And today's first question comes from Anita Sony with CIBC World Markets. Please proceed.

Good morning, Renault and team. Just firstly, congratulations on getting Kote up to the 96% throughput rate in the last 30 days. Secondly, I had a question on the mining rates and the grades that you were delivering from the pit. I think it was 0.78, and which was a little bit lower than what you delivered at the processing head grade. Can you just give me an idea of where your stockpile levels stand, particularly the high grade and medium grade portions, and kind of give me some color on how that... One, firstly, how long is that 0.78, the lower grades, while you try to open up the pit gonna persist? And then are you mining higher grades? Are you upgrading the direct ore feed and supplementing that to the mill while you do that 0.78? Just trying to get an understanding how the grades and the throughput are gonna evolve over the course of the year.

So I'll ask Renault for more detail, but just as a general comment, Anita, so I just wanna bring this conversation back to when we release our guidance for the year. And just remind everyone that for the first six months of the year, there was already a plan to be at the lower grade as Renault, the teams, and the Kote focused on repositioning the faces and so forth. So we were already kind of planning that we would be a little bit lower, but we will be using stockpile and in a second. So I'll pass it to Renault for more detail on that. But to me, there's no real surprises there. Maybe slightly a little lower on the mining side, but because we continue to mill, or we were mining milling at the lower rate than the mining, so you could still increase your grade to the mill for the one, one to the one, two, as well as your plan. But no real surprises, and maybe reminded last year was a bit the same too. You could mine at the reserve grade, but increase your milling grade by nearly 50%. But now we're slowing down this, we go more direct feed, we avoid any unnecessary selective mining and so forth. So Bruno.

Good morning Anita, that's exactly right. In the coming quarters, the grade mine is going to increase more toward the one gram per ton. We're also going to be mining more ore grades, ore mined over time. So there will be some selectivity for sure, but we're trying to minimize that segregation so we can mine closer to reserve grade. So all in all, we're going to be within 1.1, 1.2. We have close to 2 million tons grading at over 0.8 gram per ton, and we have eight million tons grading at 0.55 gram per ton. So whenever, sometimes we need to use a stockpile to feed the stockpile varies in average around 0.8 gram per ton. But for the next quarter, the grade of the ore mine is going to be higher than 0.78 to answer your question.

Okay, thank you. And then just in terms of the grade at FK, and I think you said the back half of the year was positive grade reconciliation. I think I also had a declining grade profile for the year. So does that mean with positive grade reconciliation that should be more of a flat profile for the year?

It's going to be quite flat to be honest. For the remainder of the year, it's going to be a grade that is going to be above the one gram per ton. And because we're mining more ore than we are processing, we're going to be slightly selecting the higher grade material to the new. But we also expect to see some good or to see the reconciliation to be as good as what we see right now.

Okay, and then

just a reminder. It's a bit of the, so maybe Anita, just to add to this, like if you look at 2004 was a bit of the opposite, right? So we, as we move from phase five, to eventually exiting it and train those bases. So I wish and hope that we're going to see very good results as the transitions to the higher grade. Of course, we need to use what we see in reserve to plan and support, but as very likely that we see the same phenomena that we've seen in other phases and as we transition to the better zones that you will see the significant kick in the head grade. So we're definitely expecting a stronger than Q1, but as Bruno said, we remain consciously present to not overstate what we could potentially see as great, but we should normally see the same phenomena as we are in some better zones, in deeper zones.

And then just on the unit cost that Efekeen, the processing cost came in better than I had expected or I mean, better than any of the quarters you posted last year. So is there anything driving that in particular? Is it currency or is that something that will persist over the rest of the year? Or is that just maybe just sort of a one-time new one?

No, nothing specific to

our, go ahead, Martin. Morning, Anita. One thing that is happening is I believe is the CAN is running at a bit higher throughput rate, which is driving down the ZipZone. So it's a bit absorbing some of the fixed costs.

Okay, I'll leave it there and get back into the queue. Thanks.

Yeah, yeah. Thank you.

Again, if you do have a question, please press star then one on your telephone keypad. And the next question comes from Mohammed Siddita with National Bank. Please proceed.

Hi, Renaud and team out. Thanks for taking my question. And maybe just to follow up on Anita's unit cost improvement at Efekeen. I was just wondering if this was also maybe positively impacted or if you expect to see any positive impact from the lower fuel prices or diesel prices that we're seeing. Any comments on that?

So the total cost that we spent at Efekeen was actually in line with what we expected to spend and in line with prior years as well. Fuel cost in Burkina takes a bit longer to adjust to the market prices. So we've not seen the reduction in fuel prices coming in there. So it is really because we have processed a bit, it's more a unit throughput impact that is driving it.

And maybe I could add to this. I mean, when you look at the previous quarter, I wouldn't necessarily say that the mining costs were necessarily lower. I think it were in line with previous. But we did notice reductions of the mailing processing costs in the one quarter. And Martin noticed compared to that quarter. But in the last year, we were systematically more like in the 1850 and so far achieved 1750. Yes, some good results, but we'll see in the next quarter. Sometimes it's just a bit of a timing of certain expenses and so forth. But we're definitely confident that we could repeat at least minimum repeat, but we achieved that.

Great, thank you. And then just my second question would be at Westwood, given the lower grade in the quarter because of the temporary equipment challenges. Could you maybe give us a little bit more color into what the grades may look into Q2? Is Q2 expected to be slightly still impacted by that? Or should we see a material improvement into Q2 at Westwood? Thank you.

So I'll ask Bernal to add some comments to it. So definitely we're gonna see an increase as we advance in this year. So with the change of the mining sequencing, of course we went to lower grade. The throughput is there, the total is done. So it's just a matter of transitioning back into. And there is no reason that you do not see the same as we were mining last year, as we were approaching the end of the year. Over a year,

Bernal. Yeah, so the grade for Westwood is going to be for the underground mine is going to be around over in between eight and 12. So depending on the sequencing that we're going to be in. So the goal for us is always to try to be as close to the reserve grade on the round as possible, like nine, 10 grand per ton. So this is what we see for the next quarters and for the year.

Right, thank you. And if I could maybe cite in one last question, Jason Burkina on the security situation and maybe the commentary made recently by the prime minister. Renaud, did you have any additional comments on color on that?

I think internally we remain extremely confident. Like in the security situations, we wouldn't see worse in severe there. So we continue to operate another quarter without any disruptions in the supply chains and so forth. To me and to us, there is really nothing new happening. There's a lot of talking and so forth, but it's the same information has been reposited from the last year and so forth. There is a question a bit on the timing of certain of the aspect, but no, I think we're relationship and work with the government remain very strong. We never even remotely close to think that as that can be referred and those common, if any, a lot of it is the interpretation. So no, we remain very confident to continue to operate, strong operations, maintain the security, allowing us to operate at 100% capacity and so forth. And so far we haven't seen anything but the strong support from the government in all matters. So no, we do not see it as an increased risk.

Great, thank you and congrats on a good core equity.

Thank

you. And the next question comes from Tanya Jekuskinec with Scotiabank, please proceed.

Yes, good morning, everyone. Thank you for taking my questions and you know, congrats on getting the mills back up again at Cote doing quite well. I have a few questions. The first one I wanted to start on was just on Asican. When you put out your cost guidance, seem to remember it was a cost guidance much lower pricing than $3,000. And now that we have the increased royalty rates from the government, it's over $3,000, they get to 8%. Can you remind me if your cash cost guidance reflects that? Is this for Asican?

So

I'll pass

it to Martin, thanks for that. Good morning, Tanya. So our cash cost guidance assumes the dividends and the increases, but our gold price assumption in our guidance was $2,500 an ounce.

So

if we look at our forecast, even with that increase, we still expect to come within the guidance range. Okay,

okay, I just wanted to make sure because everyone's guidance is at that 25, 2600 and all of these things that are moving up and you just wanna make sure that that still is reflective and in that guidance. Okay, so thank you so much for that. And then just maybe continuing on just again, I think when we last spoke, we were expecting a weak Q1 and then the strongest would be the Q4 with a stronger second half. Do we have an ability to, so we obviously have improvement happening as it can seem to be flattish. We have improvements at Westwood and Cote, I think quarter on quarter at Cote and Westwood, I don't know if it's evenly divided in the next three quarters, but can we kind of try and break, are we at that 48, 52? We have 45, 55, just to have an idea of how the year shapes out.

There's

a lot of component into this, but I'll let Bruno start and maybe I'll.

So at this I can, it's going to be clearly a stronger H2 than H1 thing because as you know, as we dig deeper into phase six and seven, we're going to see the higher grade in the second half of the year. For Westwood, we should see like, the resume of the average production that we have enjoyed over the last quarters, over 30,000 rollouts per quarter. And Cote, that's going to be a continuous ramp up, gradual ramp up, almost linear toward the end of the year.

So clearly the second half, so clearly the second half will be stronger, right? As you combine the three elements that Bruno is mentioning, of course we have some tie in to do with the crusher and so forth, but globally speaking, we see the three mines pretty strong in the second half with some sort of a bit of a transition in Q2, right? To all of those aspects that we have. And it's really the second half that's going to highlight the year.

Yeah, so maybe Q2 just a bit better than Q1 and then you have to bump up in Q3 and Q4. Yeah, okay. Yeah, the three

mines should perform well in Q2 compared to Q1.

And then maybe coming back to what Martin was just saying on when he talked about the balance sheet and he said, ultimately looking to return to shareholders through share buyback dividends, et cetera, maybe we can kind of review what do you need to see both from an operational standpoint and a balance sheet standpoint before you would be comfortable in thinking about shareholder returns.

Well, I will let Brent Martin describe how we think, but definitely we don't see this company and difficulties in all to carry a certain level of debt, but I would definitely see on this year, we wanna see a reductions of our net debt cost and volume and eventually, of course, with the priority on the expensive 400 million term loan, that would be a priority. We don't necessarily see this company with the need to go absolutely free, as you know, that's pretty bad and now that's free in a very short term, but Martin maybe you could, I can't, you know, you could add to this, but for us, it's really about bringing the level that costs to the, what we call the best in class and then after that, rethinking our capital allocation, Martin.

Yeah, thanks Renaud. And our focus will remain over the next 12 months to continue to perform in line with our production guidance and depending on the gold price, it depends on how we would look at it. First priority is reducing the level of debt and our cost of debt and then once we get to the backend of that, depending on what the gold price is, it will impact the middle of next year or end of next year to see if there are options available, but it's hard because as you know, the gold price has been very volatile, so our approach would just be to continue to focus on performing and executing on our date and then evaluate options when we're ready.

You have a net debt to EBITDAB target that you wanna get to before and that would capture a gold price that you wanna get to before you would start thinking about capital return.

Our net debt to EBITDAB ratio at the moment is about 1.1. We would like for it to be at one or less than one, but you can't look at that when the gold price is about 3,000, so you need to look at what it would be if the gold price is lower as well and that's why we say we continue to look at that, not just based on what the current gold price is, but also what it would potentially be when we are making those decisions.

Okay, and I seem to think that you mentioned within 12 months out, so it wouldn't be something that we should think about for 2025, it would probably be in mid-26 and thereafter, would that be a fair statement?

Yes, that would be a fair statement. The gold prepay, but with the big repayment, the big impact on cash, we continue doing that and then there's a lot of, we've 200 million going on at our credit facility and 400 on the second lien, so those are our big plans we have.

But I think as you mentioned, Tanya, so as you hit mid-next year, should the gold price remain in the RSS delivers, I think we're gonna be in pretty good shape in the second half of next year.

And can I ask an exploration question? I wanted to go back to Shibugamu Camp and that emerging district and maybe just a little, someone can explain to me, like so what are you, how do you see this camp evolving and how do you see yourself in this camp? Do you think you can do this on your own? Would you bring a partner in for this? Maybe some color on how this camp and your involvement in it.

No, thank you for that. So what I like about this is not like a kind of a one source of if you're looking at the map and sketches, you know, there is a, it's really a trend, it's really a camp, it's not just limited to one. So yes, we're thinking big when it comes to an elegant Montes de Lait. We have seen as well the hit ratios of our drilling in the last two years, which is also pretty exceptional. And it comes to New Zealand, it opens. And there's other area within the camp we haven't barely touched. But how do I see it? I see it eventually a large and low resource base in the camp that combines open pit of all type of average Canadian grape with underground higher grade. Like two things that we're good at doing and the combinations of both approach from day one will give you a lot of flexibility. Over the next two years, what I keep reminding everyone internally, because everyone excited about now again is drill, like our objective in the next two years, you know, 25, 26, benefiting some through a flow through we've taken this earlier this year is to build a resource base, a large open pit of all resource base combined with a pretty decent underground high grade. So this is the objective of the next two years. I don't like to look at too much of the mineability of it and then in the short term, I prefer to think that we don't know yet how big that could be, but I don't see how this camp could not be a 15 million plus this over the overtime. And this is what we're focusing on. So by the time we put the next day of Kote out there, it is our objective to have position already now again to a certain point as we can look at it as the next. When it comes to bringing partners, I think the situation has changed significantly. This company over the last few years, I don't see any need in a too early timeframe. I think we have more than the capacity, talent and resources to bring this resource base to the next level, but we would always consider the derisking aspect when it comes to the next phase and so forth. It's early stage at this stage, we don't have plans to bring, but we have an excellent experience of partnering with someone and building world class. So we don't necessarily say that before it happened, but we just don't need to absolutely don't see the need for a partner at this stage and prefer to bring this a large little resource base at 100% on.

I was looking at it from a talent perspective, right? Cause there's only so much, yeah. Well, good luck with the drilling and thank you for the slide. Look forward to hearing more about it as you drill away over the next two years.

Awesome, thank you.

Our next question comes from McCarrie McRurry with Canaccord Genuity, please proceed.

Hi, good morning guys. Just a question on the con. Your reserves are at 1500. I'm just wondering if you can just remind us what the mine life you're assuming there is. And if your reserves were at 2000 or 2500, what's the mine life extension potential there?

I'll pass

it

to Brigham.

So good morning, Terry. Of course, with the gold price increasing by close to a thousand dollars over the last six months, we'll have to revisit our gold price assumption when revising our mineral resources and mineral reserves. So this is a good question. We're going to change our current assumption and it will certainly have an impact on our SICAN mine. Right now we have enough material up until 2029. This year we decided to have a more intense drilling campaign to see what would be the full potential of SICAN inside the fence. As you know, with the security situation, we're not exploring too much outside the premise of the mine. And so far what we're seeing is we're seeing the deposits continue to extend north and south and up there. So we're looking at different phases and that will have to be evaluated with any new gold price assumptions. So I think we'll be able to come up with new information once we have a new mining plan that will dictate how many years we could gain according to those new gold price assumptions and according to those new block model coming from exploration.

I'd like to add to this that while definitely we see the industry and I think it's just a matter of time, you will see some increase in the gold price use for reserve. We have quite a bit of a gap here. But I also want to stress that our strategy is largely to improve and increase through the drill bit. So don't want this company to be depending on the gold price to perform or to increase and so forth. So the gold price helps in a lot of ways in the debt repayment and so forth and through cashmilling. But it's important to us to measure performance and financial by how good we are to execute. And I think we've come along in the last two years in that way. So expect POS to use the gold price to increase our drilling efforts. So this is where I want to see most of the answers coming in the drill

bit. Hey, great, that's it for me and congrats on the progress at Kote. Thank you.

The next question is from Lawson Winder with Bank of America Securities. Please proceed.

Oh yeah, thank you, operator. And good morning, Renault and team. Thanks for the update. Can I ask about Westwood and the potential to expand the or extend the life at the open pit and add additional resources from Brando. What is it that's being considered there? Is there a conversion of some of that inferred resource to the plan and would you be able to give us an idea of what we're talking about in terms of ounces? Like there's about a 1.8 million ounce inferred resource there is a large piece of that open pitable material.

Sure. Good morning Lawson. So the GANZUK is what we call specifically a swing producer. It's very low grade and what it does is it helps stabilizing the mill. It's a constant feed as opposed to the feed coming from underground that's a little bit more coming in a heuristic manner. So we extract from the underground mine close to 400,000 tons a year, but we have mill capacity that exceed that. So we want to capture that excess capacity to monetize any kind of source that would be in and around the Duion Westwood complex. So GANZUK so far, it takes all the checkbox however, now I think we are at a certain limit under which we need to evaluate if a further expansion would be making sense because it will require capital and moving some infrastructure. So there's always like a limit which you can expand and that's what we're going to be evaluating. Otherwise GANZUK has been very good for us, giving us like 30, 40,000 go downs, a year, 20 something. And it's a stabilizer. We see it as a stabilizer as the underground operation progresses.

And about the same thing too, as my previous comment, I think there is an unbelievable opportunity at Westwood here to increase the valuation through crystallizing more reserves for a worse. We have a resource base over three million ounces and just really easy last year and technical report limited to a million ounces. Our confidence of course, and how we see Westwood over the next year is more than three, three million. So there is a good room and opportunity as well through the drill bit to convert some and put maybe a book a bit on modelizations in my mind. But we've been in place, interesting opportunity to have to increase reserve and valuation.

No, I agree. It is very interesting. Can I ask about the underground mine? So you're targeting about a thousand tons per day in terms of a mining rate. What, okay, I guess to put this question two ways. One is what are the underground process improvements that you're actually working on? And then thinking of those, what is the potential to expand beyond that thousand tons per day? Like what's kind of, what's the theoretical limit given the ground conditions and other considerations around the geology and geotech?

Yeah, so to answer the question, actually we're aiming at a thousand tons per day. We are seeing good days at 1100. Ultimately, what we'd like to achieve is 1200 tons per day. And we believe that the limit would be closer to 1300 ton per day without changing too much the infrastructure. Most of the improvement would come with an improvement in the underground transportation of the earth. That's what we did. We made some capital investment on our trucks and scoop trams and colleague and our past system. And as well in terms of mine design and blasting techniques using up holes, upper holes instead of the regular sub-level long-term fuel drilling. So all in all, we're doing a lot of great improvement month after month. And we see, I would say 30% improvement potential, but yet to be captured.

Okay, very helpful. And look, I appreciate you guys making time here. I just realized we're about two minutes past the hour. If I can, I'd like to ask one more question just thinking around capital allocation in the ballot sheet and how it's set to improve quite materially here. In the context of the recent Canadian asset sales from like Newmont and Barrick now having this ongoing process to sell Hemlow, how does M&A compete with the internal options, including expansions at Cote and the projects at Chibougamo?

How is it on base? To me it's more than on base. If you're really looking at our portfolio, we're next year we're gonna put them to a new technical report out there. COVID has had a significant increase in reserve resources and of course, I would just talk about the Nelligan and so forth. So when you're looking at our, you know, organic potential, organic growth for the next years to come, we truly do not see at this stage of our company the need to, in the short term, absolutely not. We're gonna focus on our assets. Down the road, I mean, we'll see, right? Down the road we'll see, but at this stage, for us it's more than complete. It would create more value to focus on organic growth. And sorry for the background noise. We're competing with the window cleaners, so perfect timing. Sorry about that. I saw the

back of the person,

the noise.

That's great. You're coming through loud and clear. Thank you so much. Thank you.

Thanks.

And this does conclude today's question and answer session. At this time, I would like to hand the call back over to Graham Jennings for any closing remarks.

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

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