Endomines AB (publ)

Hello, everyone, and welcome to End of Minds first quarter results webcast. My name is Anni Turpenen. I'm the chief communications officer here at End of Minds. And with me today, we have our CEO, Kari Vyhtinen, and our CFO, Minna Karttunen. Our agenda today is that first Kari will start by sharing the exciting results for the first quarter. He will also give you an update on our exploration work. After Kari's part, Minna will continue with giving you a deeper look into the financials. And after Minna's part, Kari will come back to the stage with giving you the update on our strategy and our future plans. And as always, we will have questions and answers session right after the presentations. So please feel free to send your questions via chat during the presentations. And please remember to type your questions in English. I think we can start now. Let's enjoy the great results.

Thank you Anni. Q1 26, it was a fantastic quarter for Endomines. Not only did we achieve record financial result, but we also achieved several significant strategic milestones that I will describe later. If you look at the financial highlights of Q1, our revenue growth was significant. Really remarkable 77% revenue increase to 18.5 million euros. The group EBITDA grew by 139% to 8.8 million. And then the EBIT almost tripled to 7.3 million. The net result was 7.1 million. It grew by 390%. It was almost in the same level as the whole net result last year. And the EPS was 0.6 euros per share. We had a very strong operational cash flow, 8.7 million. And also the balance sheet got stronger and our net gearing dropped to 6.8%. So really remarkable record result for Endermine. So I'm very pleased about the result. But we also achieved several significant strategic milestones. In January, we launched the strategic project status application to European Union, and this is related to the tungsten production in Southern Gold Line, what we are permitting at the moment. Then also in the southern gold line we launched the environmental impact assessment program to authorities in February and this includes to increase the gold production to 70 000 to 100 000 ounces and take the tungsten and molybdenum into production around 2030. Then we completed the divestment of three of our assets in the USA. So we divested Friday Deadwood and Buffalo Gulch, and that was also completed in February. And then we signed also a letter of intent regarding the Tungsten Corporation. And here the purpose is that we work together. to ensure that the tungsten product that we will produce is something that is suitable for the market. And I think both parties aim to have an off-take agreement, but this is a non-binding letter of intent. It's still early days, but a very significant milestone. And what I'm really pleased about, we also got this most inspiring workplaces in Finland award after we did the employee satisfaction survey. So very happy that our people like to work with endomines. And that's something that we really need to achieve our ambitious goals. And we also did a lot of successful recruitments, and I'm extremely pleased that we have a now team that can take the next growth leap forward. I really want to thank the whole EndoMinds team for the excellent result and excellent work that was done during the Q1 26. Thank you. If we go back to the basics, EndoMines is a gold production company and gold exploration company, and we operate in the Karelian gold line in Eastern Finland. It's an Archean greenstone belt, very similar greenstone belt than the world's biggest gold production areas, for example, Kalguuli in Australia, Abitibi in Canada, and so on. If you have been looking at the news, there was also a big transaction in Lapland, and that's also on a greenstone belt, where Agnico Eagle acquired assets of three companies on a greenstone belt. So these are very prospective places for gold production and also gold exploration. The Karelian Gold Line is a 40-kilometer-long belt. Our production facilities, they are in a place called Pampalo. There we have an underground mine, open pit mine and processing plant. So we produce a gold concentrate that we sell to Buuliden in Finland. Then the exploration, it focuses on the southern gold line and northern gold line. And the Southern Gold Line we are permitting to be in production around 2030. And that will raise our production to 70,000 to 100,000 ounces, which is approximately five times more than in 2025. And then at the same time, we aim to start tungsten and molybdenum production. Part of our strategy is to increase production volumes each year. And we have done it successfully since we changed the strategy in 22. So we have almost doubled. Like if you look at the annual figures first, we have almost doubled the production from 22 to 25. And if you look at the quarterly production this year, Q1 was a record production. So the production increased by almost 10 percent compared to 25 and over 30 percent compared to previous quarter. What is important here is actually to look at the quarterly figures. We acquired the business activities of our underground subcontractor in September last year, and that affected our production during Q3 and Q4. And we can see clearly that there was a lower level of production during Q3 and Q4. But now in Q1, it really shows that this was the right move and we can actually increase the production levels. And our production has been a lot more steady than ever before. We are very pleased about the progress in the production side. On the gold market, the war in Iran has affected the gold market. One of the key factors here is that the forecast for interest rate cuts that has been delayed and there is a lot of forecasting that the interest rates might rise. Then there has been some profit taking also from gold to other investments as there is more risks in the market. How we see the gold market is that the basic fundamentals, they support gold price. There is a lot of geopolitical uncertainty. There is a lot of central bank buying. China has been buying gold. Poland has been buying gold, for example. The BRICS nations, especially, they want to decrease the dependency on the U.S. dollar. There is a lot of global debt. A lot of the countries are struggling with high levels of debt. Finland, for example, is one of the examples here. And then there is a lot of uncertainty in the USA. And with the Trump administration, it's very difficult to predict what is the future outcome. And therefore, we see that there are strong fundamentals in place that support gold. Our forecast is that next three, four months, the gold will trade at current levels. However, we expect that we can see gold moving towards the 5000 level later this year. The Q1 average price was 4,879, so a very strong record price for gold. Currently, the gold is trading at 4,700, so quite close to the average price of Q1. So we had a record production. There was a record gold price. So that resulted in a record revenue growth of 77%. And here is also the annual graph. So it shows that we have steadily increased the revenue. And then this quarterly revenue, as we had some production difficulties during H2 last year, there is a very significant jump on the quarterly revenue now in Q1. So a very significant change. And that also can be seen directly also on the EBITDA. We have increased the EBITDA steadily on an annual basis, but now due to the difficulties we had last year on the production side of the lower volumes, Now there is a huge jump to the current 8.8 million and 48%, close to 48% of the revenue level. So excellent financial results and Minna will share more details on the results. Sustainability program sustainability is the most important item for us. And on the environmental side, the most important item is the water. So we are doing a lot of actions to ensure that the water that is released from the mine site is as clean or cleaner as the water into nature. And this is what we have as a target when we design the expansions and when we take new production areas into production. On the climate side, we want to have a fossil-free coal production by 2035. That's the key target. Biodiversity, ongoing restorations of sites. So we do the restoration when some part of the mine is destroyed. ended so that there is no big backlog after the mining is ended in some part. Very important. And take care of the nature values in general. Then the personal safe and pleasant place to work is the It's the key message. We had a quarter without any lost time accidents. Very pleased about that. And we got this reward. Most inspiring workplaces in Finland, which I'm also very pleased about. So things are going to the right direction. Community, we keep a lot of community sessions, talk with the local people, talk with the town so that we share our plans and take the feedback which we can then incorporate into our future plans. For example, last week we had two information sessions near the mine site. And then the good governance so that we have ethical practices and then everybody knows what those ethical practices are so that we always do things in the right way. Very important. We want to be proud of the work that we do. Exploration, very exciting. Just a little bit background here. We have a multi-stage approach, which means that we have activities on different phases. Usually when we go to the new area, we start with geophysics. So we use drones, for example, and measure activity. magnetic or electromagnetic anomalies. And that gives us information that maybe here is something that should be more investigated. Then we have people who go to the field and just take soil samples. And here you can get indications that in this area there is a little bit more gold and we should continue doing more detailed investigations. Outcrop mapping, so in Finland there is approximately 3% there are outcrops. So we go to the outcrops and take samples and then analyze if there is any gold in the outcrops. For example, the Ukko deposit was discovered from an outcrop. So even it sounds very simple, it's an effective method. And then when we know from these three early stage activities, when we know that this area is potential, then we take the base of till machine and this goes through the soil. It goes to the top of the bedrock, takes a sample. And if there is gold, then there is gold somewhere in the bedrock. So then we take the drilling machine, analyze the drill core and then make the resource estimate. So the resource estimate always comes from the drilling and then the resource explains that how much gold we know that there is in the ground that can be mined at later stage. And in our pipeline, we have several stages, like there are a lot of potential places in the Southern Gold Line and Northern Gold Line and also near Pamplona. And if you look at the pipeline, the most closest one to production is the Southern Gold Line. So that is in the permitting phase and we are doing a lot of drilling and plan to take it to production around 2030. And then the Northern Gold Line will follow two to three years later. And then after that, we have some other active places that we are doing early stage exploration that we can take into production at later stage. So this gives the growth pipeline towards the future. And it has been very successful. We started the exploration in 23, and now we updated the resource this March. We gave the resource based on last year's activities, and we got to the level of approximately 620,000 ounces, which is three times more than what it was when we started in 2023. And what makes this year very exciting is the fact that we are planning to drill And we are drilling 50,000 meters this year, which is almost as much as the last three years together. So it's a very significant volume. And if I think about back, what kind of results we have received during the last three years, it's really exciting times and I cannot wait to get these results from this year's drilling, because there is currently three machines drilling and a lot of activities. And the key targets for what we had last year and what we have this year are Ukko on the southern gold line and Kartica on the northern gold line. Kartica will have less attention as we need more information on the permitting side in the south. And then in the south, we will also go to Kuittila and Kuittila-Korholansuo area. And there, one of the key targets is actually the tungsten. So this is like the first time in the company's history that we will go after really tungsten in our drilling planning. And those results will be done during this late spring, early summer. And like when we look what has happened during the Q1, we published in the northern gold line Kartitsa, we published the first resource estimate that was 124,000 ounces. That was done in March. And now after the Q1 in April, we published actually drilling results, which are south from Finland. from the resource area. So these were actually really good drilling results, which clearly show that the Kartitsa mineralization continues south from the resource area. So these results we will use to update the next resource late this year or early next year or so. But Kartitsa is very promising. We have identified that it's approximately 1.5 kilometers long. However, it's open to north and south and also at depths. So there are a lot of potential for large scale deposit. And if you look at the area, On a larger scale even, there are other similar potential areas near this one. So Kartitsaa will remain as a focus area for endomines. And then Ukko. This is a banded iron formation type of deposit, the first one in Finland, which means that the gold is associated with iron. A lot of big gold deposits in the world, they are similar with type of deposits. And what makes it unique is that the iron you can actually see in the magnetic and electromagnetic maps as here in the picture. And the iron formation in this area is really huge. It's approximately seven kilometers long. And very wide. And when we discovered the Ukko approximately one year ago, it was in the northern tip. And this is an area that we have continued to drill. And then we have done some selective drilling in the other parts of Ukko. And we plan to publish these in mid-May, so it's very, very, very close. So we actually have one result that we are still waiting, and then we will publish the next Ukko results, hopefully in a few days. But now I will give the floor to Minna.

All right. Thank you, Kari. So good afternoon, everyone. My name is Minna Karttonen. I'm a CFO with Endermine since beginning of February this year. And it's, of course, a big pleasure to be able to publish a result like this, like we have now in the first quarter. And it's also our first quarterly report. Like in the past, the company has published results only twice a year. So half year results and full year results. And now we are moving to quarterly reporting from now on. So let's have a closer look at the numbers. Like I said many times already, it was a record-breaking year on year revenue growth, 77% for the first quarter. And that was, of course, due to two factors. It was the increase in production. Gold production in the first quarter was 4,955. Ounces that is nearly 10% up from a previous year and over 30% up quarter on quarter. So from Q4 25. Average gold price during this time was 4879 euros and it's an amazing 70% higher than in a year before. and 42.4% higher than last year on an average for the full year. Then profitability-wise, our EBITDA was 8.8 million euros. And in euro terms, that's actually over 50% of our previous full year's total EBITDA. Our EBITDA margin was 47.5. And Pampalo production segment actually did even better. So the EBITDA for that segment was 11.6 million euros with a margin of 62.9%. And then, by the way, I will mention here for our analysts, especially because we are starting the quarterly reporting now, you do not have the comparison numbers, but I've tried to add these previous year's quarterly numbers now in this presentation in these graphs for your use, so I hope that will be useful. of help going forward. So some of the key numbers, you will have the 25 quarterly numbers here in the presentation. Looking at the operating expenses side, so what yields the EBITDA for us, we had a change in ore inventory that improved our EBITDA by 1.4 million euros. 6.4 million euros was spent on materials, goods and services. That's an increase about 30% compared to previous year, same time. Employee expenses increased mainly due to increasing number of employees. So the total spend on people was 2 million euros and that entails an increase of 31 persons year on year. So quite significant increase there. Other operating expenses were 2.8 million euros. Unfortunately, these were inflated by approximately 1.1 million euros of non-recurring costs, of which 0.9 million euros were fees and other entries related to closing of the sale of these three gold deposits in the USA. And then there were other non-recurring items of around 200,000, and these occurred at the parent company. And then also to note, it's good to note that the mining mineral tax will increase for this year quite significantly from previous year, and now we have recorded... 0.5 million euros, so 500,000 for the first quarter, whereas last year in the same time it was less than 100,000. And this mining mineral tax is actually recorded in the other operating expenses, so it is affecting our EBITDA. And talking about the operating expenses, we can get to cash cost. There is good to mention here that for the current year, we have changed a little bit of the calculation method since last year. So we have removed the changes of inventory in these numbers. And we did this. This has not been an issue before because we haven't really had inventories. But now we have accumulated some and we wanted to provide the number that actually not fluctuating with the changes in inventory. So there is a small change in the calculation for this year. For Q1, cash cost was 1481. euros per ounce, and that's an increase of about 20% versus previous year at the same time, but only an increase of about 3% versus last year's average for the full year. And the increase in cash cost now was particularly affected by a lower gold grade of the ore, especially in the underground mine, and then the higher price of electricity. And these two items together accounted for 93% of the increase in the cash cost. So it's mostly covered by these two items. And I wanted to also mention the electricity price here, which is... nearly 90% higher this year than it was a year before. So there you can see the prices we pay in Pampala for the electricity audit pay for Q1. Net result, 7.1 million. Like Kari already mentioned, it's nearly at the same level as we did for the full year last year alone. The margin was 38.8%. We had net financial expenses of around 300,000. Expenses were reduced by a foreign exchange rate gains of about 200,000. And our interest expenses for the quarter were about half a million euros. And as mentioned, the group earnings per share, the basic number increased to 60 cents per share compared to 10 cents the year before. And also happy to share the balance sheet and cash flow items. I don't know, for some funny reason, it's always been important for being this total of the balance sheet. Now when we've passed the 100 million threshold, it's somehow... significant for me. So the total assets and the total balance sheet was 100.2 million euros. Our cash position was good. We had cash 9.4 million compared to 3.9 at the year end. Total interest-bearing debt, there was no big change there. It was 13.8 million, of which long-term was 10.4, short-term 3.5. And then net debt was only 4.4 million. And this is, of course, thanks to the high cash number. And also because of that, net gearing decreased to 6.8%. versus 17.4% at the year end, and our equity ratio was 64.9%. Cash flow also improved, so cash flow from operating, net cash flow from operations were 8.7 million, Investing cash flow was 3 million, but there is good to note that that includes the first installment of positive 1.9 million euros for the sole deposits in Idaho, the cash we received. And net cash flow from financing was about 100,000. And the investment cash flow that was mainly associated with Pampalo mine and then the Ukkolanvaara exploration drilling. Thank you. Back to Kari.