Kinross Gold Corporation

Thank you for standing by. My name is Tina, and I will be your conference operator today. At this time, I would like to welcome everyone to the Kinross Gold First Quarter 2026 Results Conference Call and Webcast. I would now like to turn the call over to David Shaver, Executive Vice President.

Thank you, and good morning. In the room with us today on the call, we have Paul Rowlinson, CEO, and from the Kinross Senior Leadership Team, Andrea Freeborough, Claude Schimper, Will Dunford, and Jeff Gold. For a complete discussion of the risks and uncertainties which may lead to actual results differing from estimates contained in our forward-looking information, please refer to page three of this presentation, our news release dated April 29th, 2026, the MD&A for the period ended March 31st, 2026, and our most recently filed AIF, all of which are available on our website. I will now turn the call over to Paul.

Thanks, David, and thank you all for joining us. This morning, I will discuss our first quarter results, provide high-level updates from across our portfolio, comment on sustainability, and confirm our outlook. I will then hand the call over to the team to provide further details. Following our outstanding performance in 2025, we continue to deliver strong results in the first quarter. Our culture of technical excellence and financial discipline combined with the recent gold prices resulted in strong operating margins, which again outpaced the increase in the gold price. As a result, in Q1, we delivered our fourth consecutive quarter of record free cash flow of approximately $840 million. Our financial position and cash flow outlook remain excellent, and we continue to return meaningful capital to our shareholders through buybacks and our quarterly dividend. We are targeting to return approximately 40% of our free cash flow in 2026. And in Q1, we continued our buyback program. Turning now to operational highlights. Q1 was a great start to the year with production of 493,000 ounces. Both Tassius and Perica II had strong orders and together accounted for more than half of our production, driving significant free cash flow. Cherokee II delivered another excellent quarter on the back of record mill recoveries, and TASIA saw strong output in Q1, supported by higher grades and stronger recoveries. With regards to our projects, we continue to make strong progress in Q1 across our pipeline of mine life extensions and growth projects. In the U.S., the team continues to advance the three projects we announced in January. At Great Bear, both the advanced exploration program and the main project are progressing well with key permitting milestones achieved, which Jeff will comment on later. At Lobo Marte in Chile, I'm pleased to report that we submitted the environmental impact assessment earlier this month, marking a significant milestone as we formally initiate the permitting process. And we look forward to providing a Lobo Marte update in the second half of the year. Turning now to sustainability, our annual sustainability report will be published later this quarter. This comprehensive report, which is in its 18th edition, provides an update on all the progress we've made in 2025 and what we aim to accomplish this year and beyond. Turning to our outlook, following a strong first quarter, we are on track to achieve our production, cost, and capital guidance again this year. More specifically on costs, Given the recent geopolitical events, I would highlight that we continue to benefit from an attractive relative cost position, which is supported by our longstanding approach to mitigating cost pressures. This includes, among other things, our grade enhancement and hedging strategies. Andrea will comment on our hedge book strategy later. With respect to grade enhancement, we have Phase X, Curlew, Great Bear, and Lobo Marte, all bringing higher grade ore into our future production profile. Looking forward, we will continue to maintain our financial discipline and prioritize cost management to consistently deliver strong margins in free cash flow. With that, I'll now turn the call over to Andrea.

Thank you, Paul. This morning, I'll review our financial highlights from the first quarter, provide an overview of our balance sheet and returning capital, and comment on our outlook. As Paul noted, Q1 was a strong start to the year for us. We produced 493,000 gold equivalent ounces as planned. Q1 cost of sales at $1,380 per ounce, and all in sustaining costs of $1,732 per ounce were also on plan. Margins were a record $3,476 per ounce and outpaced the increase in the gold price. Our adjusted earnings were 71 cents per share, and our adjusted operating cash flow was a record $1.1 billion. Our earnings and adjusted earnings were impacted by the timing of a $65 million withholding tax expense, recorded in Q1, but pertaining to tax payable in future quarters. This accounting requirement caused our earnings per share to be lower by 5 cents and skewed our effective tax rate higher in Q1. We expect our effective tax rate to be lower from Q2 to Q4 and our full year effective tax rate to be within our guidance range of 28 to 33%. Our taxes paid are also expected to be in line with guidance with approximately 70% of our payments expected in the first half of the year. Attributable free cash flow was a record $838 million, despite making significant tax payments of approximately $450 million in Q1, largely related to 2025 earnings. Turning now to our balance sheet, our financial position continued to strengthen in Q1 as we added $440 million in cash after funding our planned CapEx and returning $300 million to shareholders. We ended the quarter with $2.2 billion in cash, $3.9 billion of total liquidity, and $1.4 billion in net cash. With respect to return of capital, we're targeting to return approximately 40% of our free cash flow back to shareholders through both dividends and share repurchases. Our shares continue to remain a strong return on invested capital, considering our attractive valuation and free cash flow yields. In Q1, we repurchased a total of $250 million in shares, representing approximately 7.7 million shares, or 0.6% of our shares outstanding. Subsequent to Q1, we repurchased an additional $50 million in shares. I'm pleased to report that since we restarted our share repurchases one year ago, we repurchased approximately $900 million in shares, representing over 3% of our outstanding share count. Including our quarterly dividends, we've returned approximately $350 million to date in 2026 and over $1 billion since the first quarter of 2025. Turning now to our guidance, following Q1, we remain solidly on track to produce 2 million ounces at a cost of sales of $1,360 per ounce and all in sustaining costs of $1,730 per ounce. And we're also on track with our capital guidance of $1.5 billion. As a reminder, our cost guidance was based on a $4,500 gold price and a $70 per barrel oil price. In terms of production, the second quarter is expected to be in line with our first quarter. As a result, the second half is expected to be slightly higher than the first half to meet our full year production guidance. In terms of operating costs, we expect costs to be relatively stable throughout the year. Given the current situation of elevated oil prices, we're providing additional information on our oil price sensitivity. To start, I will note that impacts of higher oil prices within the first quarter were minimal. Fuel currently represents approximately 11% of our total cost. And as I noted earlier, our 2026 cost guidance was based on $70 oil. Our stated sensitivity is for every $10 per barrel change in price, we expect an impact of $3 per ounce on our cost of sales. This captures the direct impact of crude oil prices on refined products that are used in our operation, primarily fuel and including diesel. However, in the current volatile environment and contemplating other factors that impact the price of refined products, such as refining, distribution, and taxes, the sensitivity for 2026 is estimated to be $10 per ounce for every $10 per barrel change. this impact is not overly significant. To put it in perspective, if the oil price stays at $100 for the remainder of the year, we would expect an impact of approximately $20 per ounce on our full-year oil and sustaining costs, representing approximately 1%. And if we go one step further and consider potential secondary cost inflation from a prolonged elevated oil price on other consumables and freight, we estimate a further $10 potential impact for a total $30 per ounce to our full year all and sustaining cost guidance representing less than 2%. Overall, putting cost sensitivities into context, our grade enhancement strategy, which started in 2022, has already put us in an attractive relative cost position. And in the short term, we're not expecting a significant impact on our costs because of higher oil prices. This is, in part, a result of our longstanding hedge strategy. We have favorable oil hedge positions in place under this program. For 2026, we've hedged 63% of the oil component of our fuel consumption at our U.S. and Cassius operations at an average price of $62 per barrel. This accounts for approximately 75% of our company-wide fuel consumption. And in the medium and long term, we have our grade enhancement strategy bringing higher grade ore into our future production profile and providing organic offsets to inflationary pressure. Lastly, in terms of supply of fuel and other consumables, we're not currently experiencing any disruptions at our operations, and we continue to receive regular deliveries. I'll now turn the call over to Claude.

Thank you, Andrea. I'd like to start with our safety culture. This quarter, we have continued to focus on our safe ground brand through practical leadership training with a focus on prevention of high potential incidents. Visible leadership activities are engaging the workforce and strengthening our safety excellence program, which is resulting in strong leading indicators. Starting with Baraka 2, the mine had an outstanding quarter with strong production driving significant free cash flow. Production of 161,000 ounces increased over the prior quarter due to record mill recoveries driven by continuous improvement programs across the processing plot. The initiatives included enhancements to the CIL circuit, improved operational controls and carbon management practices, as well as targeted improvements in the Acacia Reactor performance. Cost of sales of $1,119 per ounce increased over the prior quarter, and Farrakhan II remains on track to meet its guidance of 600,000 ounces at a target cost of sales of $1,214 per ounce. Taziest had another strong quarter. Production of 130,000 ounces increased over the prior quarter Cost of sales of $990 per ounce decreased over the prior quarter due to strong grades. Continuous improvement efforts at the Tassius solar facility has led to 15.5 gigawatts of power generation, accounting for 23% of the site power in the first quarter, and offsetting 3.5 million litres of hydrocarbons. TANSIAS remains on track to meet its guidance of 505,000 ounces at a target cost of $1,050 per ounce. At the COIPA, we produced 54,000 ounces at a cost of sales of $1,526 per ounce. Production decreased over the prior quarter due to a planned 16-day mill shutdown, which also included several opportunistic continuous improvement initiatives aimed at increasing reliability and uptime in the plants. Grades and production are expected to increase in the second and third quarters as we mine phase seven off. Coipa remains on track to meet its guidance of 210,000 ounces at a target cost of sales of $1,320 per ounce. Moving to our U.S. operations, production was higher quarter over quarter, benefiting from strong contributions Alaska. Combined, the U.S. site delivered production of 148,000 ounces at a cost of sales of $1,982 per ounce. At Fort Knox, first quarter production of 94,000 ounces and cost of sales of $1,761 per ounce was higher than the prior quarter due to timing of the ounces processed through the mill and the heat pitch fat. At Bald Mountain, production of 28,000 ounces was lower than the prior quarter due to the timing of ounces recovered from the heat leach fats. Cost of sales of $1,934 per ounce was higher due to the fewer ounces produced. At Round Mountain, production of 26,000 ounces was lower quarter over quarter due to the processing of lower grade, lower recover stock power feed as we continue to transition towards higher grade, higher recovery ore. from Phase S in the second half of the year. A cost of sales of $2,776 per ounce was higher due to the few ounces produced. With that, I will now pass the ball over to William.

Thanks, Claude. Recall our project pipeline is backed by a significant resource inventory with over 27 million ounces of M&I plus an additional 17 million ounces of infert, all calculated at $2,500 that our in-house technical team is advancing while also leveraging ongoing exploration to support future production potential. We continue to see several value-creating investment opportunities emerging across our portfolio to leverage the strong gold price and enhance our production profile in the 2030s and beyond. The 3D high return projects in the U.S., which we announced earlier this year, are strong examples of the potential to progress ounces from that extent of resource inventory into our production profile. enhancing our asset value. Project and operations teams are making excellent progress across all three of these projects. At Phase X at Round Mountain, we are pleased to announce that we have received all major operational permits ahead of schedule, including a federal permit to increase our underground mining rate above 3,000 times per day. In terms of the project, underground development is well advanced, with 7.2 kilometers completed to date. We've already exceeded the planned development rate of 12 meters per day for 2026, and they're slightly ahead of schedule, which significantly de-risks our path to first production in 2028. Engineering work for both surface and underground infrastructure is advancing well, and procurement of long lead items such as the mining equipment is underway. The Bald Mountain mining of Redbird is advancing well, fully realizing the anticipated efficiency benefits of mining closer to quayside infrastructure with improved equipment utilization. Construction of processing infrastructure for Redbird extensions and detailed engineering of the SAR plant is also progressing well. Turning to our Curlew project in Washington, with a mild winter, we had a successful construction season, allowing us to make good progress on project infrastructure. field engineering for the mill refurbishment is largely complete and procurement is well underway. We have selected a contractor for the mill refurbishment, mobilization activities commencing in Q2. We also pulled forward some underground mining development into Q1 to de-risk our mine plan and first production. In parallel, we continue to progress exploration at Curlew, strong results both at North-South and at the Roadrunner Zone, which provides potential to enhance and extend the mine plan. As you can see on the slide, at North Stealth, we intersected 12.5 meters at 7 grams per ton, 4.5 meters at 8.5 grams per ton. And at Roadrunner, we intersected 2.4 meters at 9 grams per ton. With the U.S. project advancing well and expected to come online in 2028, our team is also focused on advancing studies on opportunities across our resource base that are value-accretive to our production profile in the 2030s. Here you can see updates on a few of those opportunities. At Bald Mountain, technical studies are underway for the next layback, the top open pit, which has potential to extend production in the 2030s. The top pit would be sequenced after Redbird and is the next potential anchor pit, with the current indicated resource of approximately 1 million ounces. Similar to Redbird, the top open pit is a layback of an existing pit, and we will be exploring and studying additional satellite pit optionality bring in alongside this anchor pit. At Fort Knox, we are progressing technical studies focused on advancing Phase 11, which is the next layback of the current open pit mine following the same well-understood ore body at depth. Phase 11 resource contains approximately 2 million ounces and has potential to start producing in the early 2030s, meaningfully extending mine life at Fort Knox. Additionally, we are studying optionality to mine the Gill satellite deposit alongside current phase 10, and future phase 11 to augment our overall production profile in Alaska. Moving across to Chile, at La Coypa, last year we submitted an environmental impact assessment for the Pure N4 extension, and we remain on track with our permitting timeline. Pure N4 is also a layback of a prior pit, which we expect to extend production into the early 30s, at which point we plan to transition to Lobo Marte. Lastly, at Lobo Marte, we submitted our EIA earlier this month, preventing our regulatory review process. Lobo Marte is expected to be a low-in-life, low-strip, low-cost heap leach operation with potential to produce 4.7 million ounces over a 16-year mine life. The strong heap leach grade of 1.3 gram per ton and significant production potential of 300,000 to 400,000 ounces per year makes this an anchor tenant and our grade enhancement strategy alongside GraveBear in the 2030s, providing significant free cash flow with a low expected ASEC. We are in the process of updating and reviewing the 2021 FS for LOBO while progressing our permitting and will provide a more fulsome project update in the second half of the year. I will now hand it over to Jeff for an update on permitting at GraveBear.

Thanks, Will. In terms of our advanced exploration, I am pleased to announce that we have now received the remaining permits from the Ontario Ministry of Environment, Conservation, and Parks. This is a testament to the team at Kinross and the Ministry of Environment, Conservation, and Parks under the leadership of Minister McCarthy to continue to advance the permitting process forward. Turning to the main project, we continue to advance permitting with both federal and provincial authorities. Federally, and as planned, we submitted the third and final phase of the impact statement to the Impact Assessment Agency of Canada in Q1, and we will continue to work with them as they progress their review and obtain public and Indigenous input. As a reminder, receiving the final impact assessment report is the critical first step to obtaining other federal and provincial permits we require to construct and operate the Great Bear Mine. We would require this final report in certain provincial early works and construction permits in the spring of 2027 to allow us to take advantage of the summer construction season in order to maintain targeted first production in late 2029. Provincially, we continue to work with the Ontario authorities to advance the permitting process for the main project under the One Project, One Process, which is overseen by the Ministry of Energy and Mines. One project, one process is a multi-phase process. We have submitted our final project description and are awaiting final approval from the Ministry of Mines and Energy so that we can proceed to the next phase, which is the integrated authorization and permitting plan. Submission of individual Ontario permits will proceed in accordance with this plan once approved by the Ministry of Mines and Energy. On the Indigenous community front, we continue to progress the negotiation of benefits agreements. We are pleased to report that in relation to Lac Seul and Wabaskang First Nations, on whose traditional territory the main project resides, negotiations on the impact and benefits agreement continue to advance based on a recently signed and confidential memorandum of understanding that captures the key economic, compensatory, and procurement elements. With that, I will now turn it back to Will for a technical project updated on Great Bear.

Thanks, Jeff. At Great Bear, work on the AEX program and the main project is progressing well. With final AEX permits in place, we expect to commence construction of the AEX decline this summer. The AEX decline will provide drilling access for exploration and extension of the underground resource, as well as delineation work. In terms of the main project, with the impact assessment now submitted, we have already started to make meaningful progress on procurement, with early packages awarded and requests for proposals issued across several workstreams, including key mill equipment. Detailed engineering is also advancing well and is approximately 45% complete. Upon completion of detailed engineering in early 2027, we will provide an update on the initial capital. This update will include both the impact from inflation since the 2024 PEA estimate and the impacts of any scope changes and enhancements we make as we move through detailed engineering. As an example, we've been progressing detailed engineering alongside permitting, and through that work, we have chosen to enhance the scope in select areas, including water management. These enhancements go beyond standard practices and reflect a proactive approach to environmental protection given the long-expected mine life of the assets. Through detailed engineering, we are working to ensure we are building a robust, reliable, world-class operation given the multi-decade potential high-margin production we see at this asset. Turning now to exploration, we continue to see positive results that are validating that view of potential for multi-decade high-grade operation at Great Bear. 2026 exploration is focused on our 18-kilometer LP structural corridor, as you can see on the slide. Drilling identified a new zone of mineralization 2.4 kilometers on strike from the southeast edge of the LP resource called the Strider Zone, where drilling intercepted encouraging wets around two meters at double-digit grades. Drilling is continuing in this area following the structure on strike and down dip to define the extent of mineralization. With that, I will now turn it back to Paul for closing remarks.

Thanks. After a strong start to the year, we are well positioned to meet our targets in 2026. And we have a strong set of upcoming milestones this year, which include ongoing return of capital to our dividend and share repurchases, continued strengthening of our balance sheet supported by strong operational performance and cash flow generation, advancing our projects pipeline, including the U.S. projects we discussed in January, as well as Great Barren Logo Marte, and continued exploration and studies of our resource inventory to bring in new projects to extend my lives. Looking forward, we are excited about our future. We have a strong production profile. We have an attractive relative cost position. We are generating significant free cash flow. We have an excellent balance sheet. We have an attractive return of capital. We have an exciting pipeline of both exploration and development opportunities. We are growing our net asset value and our per share metrics, and we are very proud of our commitment to responsible mining that continues to make us a leader in sustainability. In closing, we believe that our shares offer attractive relative value across a number of metrics. And with that, operator, I'd like to open up the line for questions.

To ask a question, simply press star 1 on your telephone keypad. Again, that is star 1 to ask a question. And your first question comes from the line of John Wolfson with RBC Capital Markets. Please go ahead. Hi.

Thank you very much. First question is on a Great Bear project. With the AEX permit now in place, what is the pathway to be able to start some of that deeper exploration? Basically, what timeframe would you be at the levels that you'd need to be at to start some of that deeper exploration?

I mean, the timeframe now, the key path, there's more work we just need to do over the summer once we saw on water management to get ready for underground decline. So we expect August or September to actually be blasting and getting underground. Um, and following that, obviously it's, uh, you know, we're going to focus in a few different areas at the beginning. We'll do infill and extensional drilling in the main part of the LP ore body. There's also hinge and limb, which wasn't in our PEA, which we'll hopefully explore over the next couple of years. Um, so I think it's, it's progressive really. It's, uh, you know, we won't be deep at the very bottom of the ore body for a number of years. We'll kind of follow ahead of, ahead of the mining.

Thank you. And then back to sort of the conversation on inflation. You know, the company has some very good protections in place with the hedges. I guess sort of two parts of this question. One is when you're looking at the non-energy related items, you know, reagents, labor and so forth. And I'm curious to know, you know, where is inflation tracking into next year? And then also, you know, when you're thinking about these capital updates, for Lobo Marte as well as Great Bear. What's the sort of thought process there in terms of CapEx inflation trends? Thank you.

Hi, Josh. It's Andrea. On inflation more broadly, I'd say we included a 5% inflation factor in our cost guidance back in February, so we're still on track for that. It's early in the year, and we'll see where things go with... with oil price and fuel costs and energy-related costs we've given to sensitivities, but as we sit here today, we're still feeling good about the 5% overall inflation factor.

And then maybe just to jump in there as well, as it relates to capital for both Global Marte and Great Bear, look, I think, yeah, it's there. I don't think inflation is going away. Our PEA, which we put out in 24, at some point in the future here, we're expecting to update, but there will definitely be an inflation component as between where we started with the numbers in 24 and where we're likely to end up. I think you'll see that on both projects. Really just a macro effect, really, you know, something we're going to be price receivers on. We'll continue to want to sharpen our pencils where we can, but we're working in that overall macro inflation environment.

Great, thank you.

Your next question comes from the line of Fahad Tariq with Jefferies. Please go ahead.

Hi, thanks for taking my question. Maybe first on TASIUS grades, they were really high. I think the highest since the third quarter of 2024. Just the outlook for grades through the rest of this year, that would be really helpful.

Fahad, thanks for the question. Taz, we're working through different areas. We're finishing off on West Branch 4, and that's why the grades were higher. We still had some of that stockpile inventory, and we pushed that through in the first quarter. We expect it to taper off for the rest of the year, slightly lower. But we are constantly looking at opportunities to obviously enhance what we're putting out from Taz's.

Okay, and then maybe just staying in Mauritania, can you just remind us, so diesel prices are regulated, I believe, by the government. So that probably factors into the sensitivity you provided, if you could confirm that. And then also, anything you've heard in terms of security of supply specifically in Mauritania? Thanks.

So first of all, the diesel prices are regulated by the government for the country, but not necessarily for us. we have long-term contracts with the suppliers coming to our system so both for hf and fuel and then the second part of it from a supply point of view it's very similar to brazil and these other countries we don't get our product from the middle east comes from the other side of the track so we don't have an issue with supply The impact will be on the unhedged fuel from a cost point of view. We don't have an issue as far.

Okay. That's super clear. Thank you.

Our next question comes from the line of Ralph Profiti with Stifel Financial. Please go ahead.

Thanks very much. Lobo Marte EIA submission would have had to us as a baseline include, you know, some type of water usage strategy. Just wondering what that baseline is and what can you tell us about the strategy around that?

Sure. Maybe I'll start and Wilkie jump in. I mean, it's a good question, Ralph. I mean, our whole TLA strategy is really around what is our water strategy. As you may recall, you know, whilst we have many thousands of liters of water rights, what really matters is permitted pumping capability. And we have permitted pumping wells that have been running for many years. And that's a good thing because with pumping comes monitoring. So as we've been pumping, we have monitoring wells and we've got a very strong sort of history of monitoring. There's absolutely no detrimental impact to our draw. So our strategy really, we call it our base case because there are upsides, but the base case is that we, the water wells that we're currently using supply La Cuypah They're actually physically closer to Lobo Marte. And we've spoken with the regulators. There's no guarantee with regulators, but the concept is we take that existing permitted pumping water and we just move it in a different direction closer to Lobo. That would be our base case. Using the water, we already have but we've got many years of history and monitoring. The upsides from there really relate to if we could get more water and we've got a few initiatives underway, we could actually do more. But as it relates to LOBO, the linear factor is that to have permanent pumping capabilities. Sorry, Will, did you want to add?

yeah no i mean i think that's exactly right that's what we submitted in the eia lobo is the exact same you know water consumption uh that we have at lacroix bus so it's been designed that way for the eia so that because you said we just continue to use the same water with well-proven history so all of that water modeling and data has already gone into the ia submission providing that strong base case and then we're working on all that other you know you mentioned the water rights we're working on all of those water rights to identify other potential water sources for deployment longer term or other optionality in Chile.

I agree. Yeah, that's very helpful. And just as a sort of a minor follow up, I'm looking at the Round Mountain recoveries for the quarter and just wondering, is that sort of the normal grade and recovery relationship there? Was that expected? And, you know, is there any change in the metallurgical assumptions around sort of that phase X underground transition when I think about those recoveries?

There are multiple parts to that. So first of all, when we feed from those stockpiles relative to where we are in the pit at the time, and this was the first quarter was really a lot of stockpile material, that grade is significantly lower than the grade recovery curve as, you know, changes. So we anticipated that sort of recovery. We're doing a whole bunch of things to continue to optimize that. And then phase X is a different grade and a completely different piece, very similar to what we had in phase W or higher up in phase W. So we do see that recovery changing as we put different types of material through for the year. And yeah, it remains our

Okay, great. Yeah, I appreciate that clarity. Thank you.

Your next question comes from the line of Terry McCurry with mechanical ingenuity. Please go ahead.

Hi, good morning and congrats on a strong start. I'm just following up on the second half guidance being slightly higher than the first half. Just wondering what assets in particular should be thinking about as stronger in the second half?

Sure, I'll start, and someone else may want to jump in. I think, you know, the U.S. in particular we've pointed to as expected to be higher in the second half. Some of that is Brown Mountain as we expect, you know, higher production there as we get into the heart of .

So we'll continue to be on plan at some point.

Okay. And then just follow up on the oil hedges. I think, Andrea, you mentioned you're 75% hedged for 2026. Was that the number? in terms of exposure?

So we're 63% hedged for the exposures in the US and at Cassius. That on the total portfolio is somewhere around 50%. We don't hedge in Brazil because there is price controls in Brazil. So the prices don't move necessarily directly with spot in Brazil. For example, SO FAR SINCE EARLY MARCH WE'VE SEEN PRICES INCREASE EVERYWHERE ELSE EXCEPT THEY'VE BEEN PRETTY FLAT IN BRAZIL.

OKAY. AND THEN FOR 2027?

I THINK THE 75% COMMENT WAS THE U.S. AND TASSIUS MAKE UP 75% OF OUR FUEL USAGE.

OKAY. GOT IT. AND THEN FOR 2027, I GUESS WE COULD JUST PRORATE BASED ON THE NUMBERS ON SLIDE 11 THERE.

Yeah, sorry, 42% were 42% hedged for those for U.S. and Cassius for 2027. That's about 30% company-wide.

We'll look at opportunities to chip away at it. Yes. Okay, that's very informative.

And your next question comes from the line of Anita Soni with CIBC World Markets. Please go ahead.

Hi, guys. Good morning and congrats on a strong start. I just wanted to ask a lot of the questions I wanted to ask or have been asked already about TASIUS grades and Phase X grades. But just could you give us a little bit more guidance or is it the same as it was at the beginning of the year on the cadence of sustaining capital and gross capital spend over the next few quarters?

Sure. I mean, we were slower to start, which is typical for us. Q1 is always, you know, a bit of a lower CapEx quarter. So, we're still on track for the full year with, in particular, the growth capital spending kind of ramping up on the U.S. projects as we go through the year.

Okay. Thanks. That's it for my questions.

And your next question comes from the line of Tanya Jakuskonik with Scotiabank. Please go ahead.

Oh, great. Good morning, everybody. Thank you for taking my question. Andrea, can I just come back? And you mentioned that you're seeing no issues in terms of getting supplies to mine sites, et cetera. Is there anything with your suppliers that you talk to that they are monitoring? Just, you know, things are moving now, but is there anything tight that they're watching?

Yesenia, it's Claude. I'll take that. From a supplier point of view globally, as our teams work and these things change because it's quite dynamic, we do follow up with the suppliers on a consistent basis. Obviously for us, it's about what's the high priority items, explosives, cyanide, these kinds of things. And we haven't seen any tension from any of them yet. You'll recall that a couple of years ago with the issue in Ukraine, we shifted a lot of where our supply comes from along with our suppliers of explosives, cyanide, all those types of things live. So we feel like we're in pretty good shape relative to the current situation as well.

Okay, so they're not seeing anything. So that would imply, Andrea, I shouldn't see any increase in, you know, working capital at mine sites. You're not accumulating anything there.

We are targeting more fuel in country for TASIA. So there was already a little bit of a buildup of supplies inventory, you know, starting in March, but nothing overly significant.

We're not going back to sort of the COVID period? No. No. Okay. And my second question is still on the costing side. um you know we talked about fuel a lot and thank you for that information that's very helpful um but i wanted to come back and focus on labor as well i mean you you mentioned you know number one i i want to understand whether um you are seeing any tightness in in the labor market um and and any contracts that you are seeing that that are renewing renewed for this you have to to renew and and that's with your 5% inflation estimate?

No, Tanya, as we mentioned in the previous quarter, we've now signed the major sites that have collective labor agreements. Tassius, Brazil, and Chile, we have signed all of those agreements with the teams for the longer term. Chile's a two-year, Tassius is a five-year, and Brazil is a three-year. So we're in pretty good shape this year when it comes to that. From a labor supply point of view, there's always tension in the system, but we're seeing a lot less turnover in Nevada than we're used to. So we're in reasonable shape. So from a supply point of view, it's fine. And then from an agreement point of view, it's relative to the, other than the inflation, as Andrea mentioned, we don't see any pressures

Okay. Because on your side, you mentioned that, you know, you have a strategy for, you know, you have your hedging, so your fuel, your currencies, and then your grade optimization as we get better grades. I'm just wondering if your productivity and your turnover is where you want it to be as well.

Like I said, certainly the big three labor groups, We continue to focus on being the employer of choice, and certainly those areas we believe will be quite successful, but it doesn't take us off the focal point. And then just from a point of view of cost, as I said, there's no pressure.

Okay, thank you.

And our final question is from the line of Lawson Winder with Bank of America Securities. Please go ahead.

Thank you, operator. Good morning, Paul and team. Thank you for today's update. You submitted the Lobo Marte Environmental Impact Assessment in April. So that formally starts the permitting process, and you are expecting to provide an additional update in the second half. What are you anticipating in terms of timelines at this point? And, you know, what I'm ultimately getting at is, you know, when do we expect a full funds decision? And then, you know, when should we be thinking about penciling in first production, just conceptually, even if we're not going to put it in our models yet? Thanks.

Yeah, maybe I'll start and then turn it over to others. But, you know, with the EIA, you're sort of looking at a couple of years to kind of complete that process.

Yeah, and then again, you know, so again, you know, following that couple of standard, I would say pretty standard, a couple of years of work to finalize the impact statement. Then you're into, you know, sort of the approvals, the early works and the construction, which would at a minimum be another couple of years. I think when you take all of that, and we've always anticipated Lobo to come in behind Great Bear in the early 30s. So that's kind of what we've got in our, our timeline we always look at opportunities for schedule compression but i think we're comfortable saying early 30s in behind in behind great bear okay thank you for that and then if i could ask on the solar power at tazia's i mean i mean it appears there's been a clear cost benefit to that are you able to quantify

the cost benefit from the solar? So, for example, I mean, if there were no solar in Q1 versus, you know, full exposure to self-generate with heavy fuel or diesel, I mean, do you have a sense of what that benefit would be? And then, like, taking that to the next conclusion, to what extent could you expand solar capacity at Casius, you know, particularly considering the stability of the overall electrical supply?

Yeah, so I mean, the calculation is pretty simple. It's about 14 million liters of fuel that is additionally transport and then used at the fuel cost. So for us, right now it's representing 22 to 24% of our electricity supply to the whole site. So it is significant. To your point on expansion, the challenge is the system 25% is a quarter of the day, so it works through daylight hours. The real issue is battery capacity. So adding additional solar panels will not influence it in any way because we reach the peak supply of power for the site. So you're just going to create power that you won't be able to use.

Storage is the bottleneck.

Storage is the bottleneck for those very large capacity plants.

But I think, glad to add, I mean, you know, the solar plant was really kind of the first beachhead. We got the direct savings on fuel, but now we're established with the beachhead. We've got buses, light vehicles, more and more use of battery-powered light vehicles at site, and I can see that trend continuing.

Yeah, so And as we look at the larger mining fleet as well, we're starting to look at how do we capitalize on using that solar piece. And then the other part now is looking at the opportunity for wind, and we're currently doing a wind study as well in the area. So looking at a lot of different alternatives to heavy fuel.

Okay, that's very helpful. Thank you both. And if I could just ask just one quick clarification question on Fort Knox. The conveyor belt repairs during the quarter, I guess they were unexpected, and that's why they were backed out of earnings for adjusted earnings. But just any additional costs or shutdowns expected with that for the balance of the year?

No, the incident didn't have any impact on our actual production and processes. It's given us the opportunity to refurbish a 50-year-old installation, and we're right on track. And ironically, right at this point, we're busy doing commissioning and testing of the new system, and we've replaced nearly a kilometer of belt. And so we're on track, and we expect the operation to just continue as normal. Fantastic. Thank you very much.

And with no further questions in queue, I will now hand the call back over to Ken Roskos for closing remarks.

Great. Thank you, operator. And thanks, everyone, for joining us this morning. We look forward to catching up with you in person in the coming weeks. Thanks for joining us.

Thank you again for joining us today. This does conclude today's conference call. You may now disconnect.