Akobo Minerals Ab

Good morning and welcome to the first quarter presentation for Acobo Minerals. We are sending out of Addis Ababa today. The weather is fine so far. It is rainy season down here. So I hope the internet will be with us all the time. If not, you'll have to bear with me. So I will take you through the update on my own this time. And we'll just start with the short summary of Akobo Minerals, an Ethiopian gold producer. We've been operating in Ethiopia for 15 years. We have a mining and an exploration license. You can see on the map that we're located close to the border of South Sudan in the southwestern part of Ethiopia. We're listed on the Euronext Growth in Oslo, and we have started commercial mining of our Segele mine. You can see some of the results here on the right hand side. Some very nice, very high grade gold coming out of the shaking table. This is not often seen, so this is extremely exciting when we get this out of a shaking table. so as you can see from the text here this is part of the mineral resource of the 69 000 ounces where the indicated part of 41 000 ounces has an average of 40.6 gram per ton and that's close to the upper part of the ore body and in the areas that we are mining these days. We've seen that some of the ore that we are producing these days are actually outside of the block model, which is encouraging, but still we expect the main ore body to be followed going forward. It's still open at that and we expect it to continue and also that we will be able to continue finding new targets in vicinity so that the life of mine will continue way beyond the 69,000 ounces. Now that the Segele mine is up and running and producing gold, we expect also the growth in our cash flow and we will be looking at targeting more areas also in the wider exploration license area that we have. So for the latest key events, worth mentioning that the gold price is still at record high levels. That's encouraging and that will boost our revenues going forward. On the mining side, We're making good progress. We are reaching more or less the capacity of the existing winces on the infrastructure that we have. And we're accessing now the higher grade ore. We hit that more or less in the middle of May and have been mining that since. The processing plant, we've done a lot of changes to it. we have gone from a hybrid solution that has worked okay in the beginning, when we had high grade coming out of the mine, in the period with lower grade that we've seen in the last few months, it has not been a very good solution because the ILR set up here requires high gold concentrate to be efficient. So what we've been doing is moving over to a call it industry standard, which is based upon pure gravity and the use of shaking table. It's what you saw in the first picture. This is for the moment going to improve recovery somewhat, but most importantly, improve the purity of the gold coming out. Our collaboration with Sutton is continuing and we are also now focusing on Safety side more, we have a senior paramedic, Leon, already at site, both training and working and making a big impact on life at site and life in camp. So very happy to have him on board. We did close a small convertible bond here in May, 11.5 million Norwegian kroner. That provided us with a short-term and it's being used to fund the operations as we speak, and will give us the time to figure out what our next steps will be. We'll come back to that a bit later in the presentation. Very important is that we have also signed the MOU with Monitore Metals, giving us the opportunity to restructure the current gold loan that we have with them, and making it more aligned with the new production schedule and the new vertical shaft that we will continue to develop and build and finalize before the end of the year. So far, we've smelt 20.5 kilos. We are seeing a strong momentum from the mining operations these days. And the team is very busy at site processing a lot of fine gold that is what you saw on the picture coming off the shaking table, but also a lot of coarse gold that is more mixed with sand. And that also needs preparation in addition to continued processing of all the material coming out of the mine. So a lot of work is being done. It's the first time we're smelting based upon the pure gravity circuit. So a certain team is in place helping our local team to make sure we get as much gold out as possible this first smelt with the new setup. So we're looking forward to see the results. I expect we have the final results by the end of next week, probably. That's what we're aiming for. A lot of work going on these days. Going back to the current mining operations, as I said, we are reaching the limit of what the current infrastructure can handle, which is great. We're managing two blasts per day, meaning we will have a daily production reaching 15 to 20 tons per day. We should see a 400 to 500 ton production on a monthly basis going forward. And we are mining into the higher grade, higher tonnage areas. So, of course, we're also... working on developing infrastructure further and always having, trying always to have access to high grade ore body. So we will continue with some development, but we expect that will not affect the general ore processing out of the mine. And as I mentioned, a good portion of the current ore mine lies actually outside of the existing resource model. The processing plants, mentioning that we've gone to the gravity system, certain team at site doing maintenance. We have upgraded the cyclone system and we are introducing a so-called set table, which is going to separate the gold from the sand. in a very efficient way. You can see that on the picture here on the lower right hand side. This is when we pan the coarse gold. You can see there is still a lot of gold left in that material and a lot of that will then be separated using this set table. We have also ordered two new larger shaking tables so that the plant will be able to accommodate for all the material also coming out of the vertical shaft. That's important because that gives us time to get the vertical shaft up and running, producing significant cash flow before we have to build a new TSF and then turn on the remaining part of the processing plant involving the cyanide system. This will be a very solid solution until we get to that point. You can see on the top right here, this is a small oven that is drying out the gold concentrate that comes off the shaking table. That includes some water, so it needs to be dried. The gold production and sales update, as I said, we've produced close to 20.5, or we have produced 20.5 kilos of gold. We are stockpiling some still in the tailings, and we will continue to do that even with the new setup. We will not let any gold be lost, so all of the remaining gold will be recovered once we start CIL plant. And as I mentioned, the existing ILR setup, it was not optimal for processing lower-grade material, and it has affected the purity. And you can see that from the numbers. It's dropping from regular 85% purity down to 74%, 80%, and all the way down to 30%, which is not really something we can work with. So the transition has been a very, very good thing to do. We have had lower grades and volume in the early months of 2025. As I said, since mid-May, we have been mining consistently at higher levels, and we are mining also the ore body these days instead of a lot of development mining that has been done previously. So our operational ambition going forward is to at least mine and process and smelt five kilos of gold per month. That will cover our ongoing operational cost. and that will keep us going until we get the vertical shaft up and running. At that point, we expect the vertical shaft to be able to deliver somewhere between 40 to 60 kilos a month, so a significant increase in our monthly production. ESG health and safety, still a very important area for us to focus on. Happy to receive here, as you can see from the picture, a letter of recognition received for the work we're doing and the impact we're having on the local community. We strive to be a good neighbor and help where we can. In general, we're doing continuous environmental monitoring of water, the TSF, noise and air quality. On the regulatory side, we are filing and we've also had site inspections with positive feedback from the Environmental Protection Agency. And an important part of our day-to-day life in camp is the clinic. We have a full medical service for the mine and camp staff. We're working with regional health authorities. We're recognized as a regional health post. And we are working together with the authorities on vaccination and malaria prevention in the area. Of course, with Leon, our new paramedic at site, workplace safety is being looked at and improved every day. And we're also doing a lot of emergency preparedness training and just preparing for the worst or what might not come, even though What we're seeing on a day-to-day basis is very good. We have very little accidents or any kind of incidents at all. So we have a good work environment. On the exploration side, we started some drilling in Q1. Unfortunately, our drill rig has broken down. It is starting to age. Getting all the parts needed is not that easy. So we're looking into what we can do with the drill rigs we have and what the strategy there will be going forward. But in the meantime, we are not sitting still. There's a lot of activity going on, on just general re-logging, getting a better understanding of the data we have. but also a lot of geological mapping being done and trenching and sampling, so trying to give us a good indication of where to focus our resources going forward. It looks promising, a lot of the areas we're looking into. You can see here the picture. We always have a big following since we are the experts. and they would like to follow us and see where we find the gold and if they can find something also that is fine we work well with the artisanal miners on that level and and it's mutual understanding that we give them some information we help them access areas and in return we also use their findings into our mapping and into our models so that's uh that's a good working relationship there. So a fun update on the funding process. We're working actively on two different offtake agreements. We will see where we will end there. We're looking at a deal up to $6 million. It's working progress. It's a positive work and we will see where that ends. On the equity side, we are also coordinating with SB1 Markets, to look at alternatives there. I'm also engaging here in Addis with local Ethiopian investors who have expressed interest in supporting mining and the general sector here in Ethiopia. They find this interesting and it's an asset that is not easily accessible for Ethiopian investors to actually invest in and support. So working on that, coming back to the strategic partnership discussions we've had, those discussions are currently on hold. We don't see any reason to continue that discussion until we have finalized the monetary metals loan restructuring and have a good view on The current operations and the production going forward. So as you can see, we're of course pursuing all these options in parallel and we will get back once we have clarity on what we would like to do. So our focus going forward important for us now to stabilize the production at current levels. but also increase the focus on safety. We will strengthen our on-site security and screening procedures with the kind of gold we're mining and getting out of the mine today. It is, of course, a risk that someone will be tempted. It has happened and we have made changes to our procedures and all of the whole area is now under camera surveillance. So we're looking at not being naive and also strengthening our searching and screening procedures. Of course, enhancing further deficiency and improve the goal recovery, that's important. So hopefully the work being done this week by Sutton and the team will set the stage for a good recovery process going forward. It looks very promising. We're also going to advance deeper into the eastern winds to unlock new high-grade areas. That's important because we need to always now try to keep areas of ore open for extraction so we don't end up in a situation where we suddenly only do new development mining to access these areas. So we will do that in parallel as we mine out ore bodies in other areas of the mine. So this is well planned now by the team. The preparation for the vertical shaft is ongoing. We're looking at the final costing. Right now, we have an estimate around 1 to 1.5 million dollars. And that work will start immediately upon the funding availability that we are working on. So in general, of course, we need to maintain cost discipline, even though we're seeing money coming in. We are looking to ensure a stable cash flow. And important also to close the restructuring of the monetary metals loan agreements. And again, also close the funding that we're looking for. On the financial performance, it's good to see that we now can add in some revenue in the overview here. So for the Q1, the company had revenues of 4.5 million Swedish kronor and an EBITDA of minus 10 million Swedish kronor. As you can see, it covered part of the operational expenses. Doing a quick calculation here, and as I said earlier in the presentation, we are aiming for around five kilos in order to cover all our operational expenses. Looking at the right-hand side on the equity and debt development, that is what it is. It's not affecting our operations as such. cash flow generated going forward, that will also start to improve. No major changes to either corporate structure or top shareholders. We're listed still on the Euronext growth. We're trading at the Frankfurt Stock Exchange and on the OTC market platform in the US. We still have some 3000 shareholders and the monetary metals loan is around 8,680 ounces. Currently, according to the new agreement, we are under a three-month peak interest period where interest accumulates, and then we will move over to a six-month interest-free period that will go until mid-February next year before we start a repayment of that loan. On the top shareholder side, no major changes. We have the same shareholders and we expect that to continue going forward. No major changes there. So I think that's where I will leave you all today. You can have a look at the financial updates and more in detail. If you have questions, of course, feel free to reach up. Let's see if we have some questions here. We have a couple of questions. When you say that you're opening new high-grade areas underground, what does that mean for reliable, predictable, ongoing gold production? Well, it means that we are always now aiming to mine ore. and not waste truck, which is what you usually do when you do the development of the mine. So it's important now to have several openings into the ore body. The model and the ore body in itself is not in one big piece. It has pockets of high grade here, pockets of high grade there. So right now we are working in two different areas. so important for us to open up new areas while we still continue to mine this high-grade ore. That's what's going to keep the production consistent and also get us gold out on a monthly basis. Okay, another question here. With the new high-grade areas accessed underground and the vertical shaft installed, what can you say about profitability? Yes, so the whole idea behind the Segele mine and why we did it was the extreme margins we saw coming out of this high-grade resource. The high grade is directly correlated to high margin. And you can look at it like if we cover our costs at five kilos per month and going to production, that will not increase our operating cost much, if any at all. We'll go to around 50 kilos a month. That will give us a significant increase boost in margin and of course that's what the whole model is built upon and also how we will be able to down pay the loan from monetary metals so um we are really looking forward to starting the vertical shaft and get into that next phase of operations so that will be very very interesting um see if there are any more questions uh i think that's it here um yeah so i'll thank you all for participating uh reach out if you have any questions we expect a monthly update by the end of next week or beginning week after to report upon the the latest melting that is ongoing so um We're all looking forward to that and we'll share that information as soon as we have it. Thank you all.