Allied Gold Corporation

Thank you for joining us this morning. Before I turn the call over, I need to advise that certain statements made during this call today may contain forward-looking information, and actual results could differ from the conclusions or projections in that forward-looking information, which include but are not limited to statements with respect to estimation of mineral reserves and resources, the timing and amount of estimated future production, cost of production, capital expenditures, future metal X prices and the cost and timing of the development of new projects. For a complete discussion of the risks and certainties and factors which may lead to actual financial results and performance which being different from the estimates contained in the forward-looking statements, please refer to Allied Gold Press Release issued March 26 announcing fourth quarter and full year 2023 results. as well as the management discussion and analysis for the same period and other regularity feelings in Canada. I would like to remind everyone that this conference call is being recorded and will be available for replay later on today. Replay information and presentation slides accompanying this conference call and webcast are available on Allied Calls website at alliedcalls.com. I would now like to turn the meeting over to Mr. Peter Moroney, Chairman, NCU. Please go ahead.

Operator, thank you very much, and thank you to everyone for participating on this call this morning. Let me begin by saying that the importance of and some of the achievements in 2023, we set out to establish the sustainability of the production platform for the existing operations of the company, and Q4 certainly demonstrates the capacity for sustainable production at a run rate that we have said we expect to be at 375,000 ounces per year. We began the year with 79,000 ounces in the first quarter. We ended the year with approximately 95,000 ounces in the fourth quarter. We had a second half of the year that was stronger than the first half. We had an uptick in production quarter over quarter. We expect we'll have more to say on this in a few moments, but we expect that the pattern will continue in 2024, although from a higher base. EU4 is also important in that it allowed us to evaluate the potential of the assets, the strengths and weaknesses not only of the assets, but also of the people involved in the organization, management, contractors, and others. It allowed us to assess where and how to better plan, create consistency, and optimize. In 2023, we also advanced the Kermuk project. It is now planned at 6 million tons per year as capacity. We've increased the capacity expectation of the project. We are optimizing throughput, increasing production, and taking into account significant exploration upside that will increase mine life. 2022 is also important because we implemented the phased expansion at Satiola. Although more importantly, rather than saying that it is a phased expansion, we should be referring to Stadiola as an optimization of the mine. We're finding new oxide areas. We're taking a phased approach, although it is an integrated approach. Phase one will move immediately into phase two. We see this as an integrated project that ultimately gets production to a level that is in excess of 300,000 ounces per year. This will see us increase production and reduce costs beginning in the second quarter of this year with the contributions coming from DBA in particular. We will be increasing production from 175,000 ounces to a range, depending on the year, of 200 to 230,000 ounces. And ultimately then, by 2029, we expect it to be in excess of 300,000 ounces with a range of 300 to 400,000 ounces. We're stabilizing production and processing, and we're moving forward with this optimization plan. 2023 also saw the increase in mineral reserves and mineral resources. We demonstrated the importance of exploration to increase our in-the-ground inventory, and we saw mineral reserves increasing by a full 190% over mining depletion. We expect that to continue in the next several years, given that exploration potential that is there. And we began to tackle mining and processing inefficiencies, including changing mine contractors and improving performance at our operations. As we move then into 2024, we expect then that we will be at a production level, as I mentioned, of 375,000 ounces minimum. Our range is 375,000 ounces to 405,000 ounces. And we will see cost reductions that set the foundation for what to expect in the years to follow. We are advancing and will continue to advance the CREMUC project. In respect of CREMUC, we are advancing detailed engineering and procurement, early works, and civil and infrastructure works. We intend to spend approximately $155 million this year. We expect soon to award the mine contract, the mine contracting to advance the mine preparation beginning as soon as this year. And we must remember that we already own the sag mill. It's in storage, ready to be deployed. We look at Satiola, and we have completed the access road to Diba, the Diba satellite area. We've begun mine preparation. We're advancing other oxide satellite areas. We are conducting studies to further increase recoveries. And we're preparing the mine for the higher mining rate and the higher throughput through the new plant. Initially, the modifications to the existing plant and then the new plant going forward. In terms of outlook, we've already indicated where we expect to be this year and then into the years to follow. Daniel will be providing a little bit more color and view on that outlook. The important thing that I would like to mention is the impact of that on operating cash flow. While the production growth of this company increases significantly to an excess of 100% in the next several years, less than a handful of years, it is outsized by comparison to operating cash flow because all these new ounces are coming in at lower cost. We expect to continue with the drill bit successes, and particularly at Cremonc and the Cote d'Ivoire that extends mine life. And we have a budget that is commensurate with that. With $32 million that is allocated for exploration in 2024. We've talked about before about financial flexibility. 2023 saw us generate $83 million in operating cash flow. That was on the basis of 343,000 ounces at roughly $1,600 all-in sustaining costs. We expect production this year to be in excess of that in the range of 30 to 50,000 ounces more at better costs And we must emphasize that we're at higher gold prices, roughly $250 to $300 better gold prices presently than what was the average realized gold price last year. So between cash available, although modest credit, including a revolving credit facility, operating cash flow, and further non-equity financial options that are available to us, we are fully funded to develop the projects that we have and to advance our growth. The order for the balance of this presentation will be the following. As you will go into detail on the operations, Jason will discuss our financial performance. Daniel, as I mentioned, will deal with our outlook. I'll come back with some closing comments. And with that, perhaps if I can pass the call to Pat.

Thank you, Peter, and good morning, everyone. Let's take a look at our operating results, starting with an overall summary as follows. In the fourth quarter, we produced 94,725 ounces of gold, bringing our full year total to 3,043,817 ounces. By producing much, I expected to exceed the minimum annual production level of at least 275,000 ounces, as evident by the delivery in the fourth quarter. And this is before the further efficiency and optimization and cost improvements currently underway. Production and order sustaining costs during the fourth quarter were impacted by the mining performance at Appel. The mining contractor was put on notice and subsequently replaced in early 2024 to improve our future bus performances. The full year cost of sales, cash costs, and order sustaining costs per ounce sold were $1,300, $1418, and $1,569, respectively. This is within the 2% variance from our current order sustaining of $1,550 per ounce for 2023. Looking at the quarterly results by mine, starting with , we produced 41,150 ounces and sold 40,863. The cost per ounce sold stood at 1541, cash cost 1429, and all in sustaining 1592 per ounce. The course's performance aligns with our projections, a direct result of optimizing the oil blends with high-grade fresh oil stockpiles. After closing the DEBUG transaction, we started road construction in December, setting up for drilling and the build-out of the mine infrastructure in early 2024. Moving to Bonnie Crow, production for the quarter was 34,232 ounces, the sales in line with this production. Cost of sales was $1,502, cash cost $107.6, and all in sustaining $1,022 per hour sold. During the quarter, we benefited from a high rate of growth from the main mining group BIT, as anticipated by our mining sequence. A Q4 circuit audit highlighted some losses, prompted us to tighten controls. We are now applying these enhanced audits across our other assets to ensure best operating practices. Moving to Atmel, production was 19,373 ounces, with sales at 70,800 in H2. Costs were higher, with cost of sales at 2,100, cash costs 1,947, and all in sustaining $2,308 per ounce sold. Reportage results were significantly influenced by the performance of our manufacturing sector. Peter referenced in his opening remarks, in pursuit of improved performance and cost efficiency, he made the decision to replace the contractor, especially considering the extended mine life of this asset. With this overview completed, I'll pass the floor to Jason for the financial review.

Great. Thank you, Vasily, and good morning, everyone. Turning to our financial performance for the quarter, we generated revenue of $179.7 million and a gross profit, including DD&A, of $44.5 million. Attributable net earnings for the quarter were $5.4 million. However, after adjusting for one-time tax and non-recurring items, we had an adjusted net loss for the quarter of $4.6 million, or two cents per share. The fourth quarter was our first full period following the transformative GoPublic event in September last year. As a result, we incurred expenses and cash flow impacts stemming from the business combination, resulting in earnings and cash flow volatility in the third and fourth quarters. with volatility stems from transaction costs, normalization of working capital, and various one-time accounting and other events. Net cash generated from operating activities was negative $4.8 million, reflecting outflows related to the transaction expenses accrued previously but paid out this quarter. These outflows are not indicative of the underlying efficiency of our mining operations, nor of the company's capacity for cash generation. Adjusting for these items, normalized cash flow from operating activities was shipped from the recorded outflow to an inflow of about $10 million. At year end, the company's cash and cash equivalents stood at $158.6 million after spending $24.3 million in Q4 on CapEx and capitalized exploration. Looking beyond near-term volatility, our growth is expected to deliver a significant increase in earnings and cash flow from 2024 onwards. Our ability to generate higher cash flows and profits is supported by our 2024 guidance. We're projecting cash growth production per year to range between 375,000 and 405,000 ounces. Our cash costs are anticipated to be around $1,250 per ounce, with mine site own sustaining costs estimated at approximately $1,400 per ounce. In terms of investments, We plan to allocate $32 million to exploration activities and another $29.5 million to sustaining channels, not including pre-stripping of $25 million at Bonner Trail that is included in ASIC. We've also allocated $198.5 million from growth capital primarily for Cremoke. Expected increase in gold production for 2024 is attributable to the supplemental oxide 4 feet at Saviola and improved seed grades at Agbao from McValley. Keeping the upper end of our guidance relies on the transition to a new contractor at AgVal, which is currently in progress and nearing completion. Mindsight, all participating costs are expected to show significant improvement over last year, with year-over-year savings of approximately $170 per ounce. Cost improvements are expected to come from better performance at Staduola and AgVal, while Bonnetra was entering a stripping phase to access higher-grade ore during the outlook period that temporarily causes higher ASIC. objective, namely, increasing oxide ore inventory, particularly at Sadiola, further extending mine life in Cote d'Ivoire, and expanding mineral inventory at Kermode to increase strategic mine life. I'll now pass the call back to Daniel to discuss our longer-term outlook.

Thank you, Jason. Although not factored, I write official on your guidance. Our operating outlook, informed by our mineral reserves and exploration potential, align with our aim to deliver substantial growth at much lower costs. At Sedona, we anticipate year-over-year increase in gold during the off-the-period targeting 230,000 ounces annually. This expected increase is driven by the incorporation of additional oxide ore depot and compromising targets such as Secagoto West, FE4, and S-Wall, which will complement the Phase I expansion. For 2025, we expect that U.S. oil and sustaining costs to remain between $1,150 to $1,250 per ounces. Although there might be a modest increase in oil and sustaining costs in 2026, we're looking to maintain it below $1,350 per ounces, accounting for preparation for the second phase expansion later that year. With the availability of upside ore on DEBA and other targets, Phase I execution is now targeted to start in late 2024, with production commencing in early 2026. In the near term, Bonnie crew was on track for modest annual increase in bulk production, aiming to surpass 110,000 ounces per year. The 2024 stripping phase is set to of the outlook period. The full potential of Oomei, including advanced resource training at Oomei West and North, along with the Akisisu target, could lead to additional gain. At Akbao, consistent annual gold production is expected with a floor of 90,000 ounces, and that's why additional mineral reserves in Akbaale and Operation Enhancement are driving improvement with the mill effectively processing harder rock land and increasing upside feed. Significant investments are being made to progress the thermal project, which we anticipate will begin production by mid-2026, contributing over 175,000 ounces of gold in the latter half of that year. We're investing significantly to explore the significant exploration upside at near mine target around Dish Mountain and Ashashiri in addition to the Tsenkei Bulge prospect. To support a strategic mine life of at least 15 years at mine site while in sustaining cost below $900,000. with the establishment of highlight project management framework, the appointment of the NPCM contractor, the initiation of the detail engineering and early work, and the procurement of critical project services and infrastructure along with strengthening relationship and engaging with local stakeholders. We are on track to deliver the project on time and on budget. Putting this all together, I'd expect significant near-term improvement in production and costs going optimization and exploration. And with the wrap-up of PERMUC in 2026 envisions reaching production level of over 600,000 ounces at a cost below 1,225 ounces for 2026. In the longer term, the Cellula Phase II expansion completes its transition to a world-class mine and brings our production to approximately 800,000 ounces Underpinning our long-term growth and our commitment to sustainability, let's look at our safety and environmental performance. In 2023, we achieved a last-time injury rate of 0.49 and recorded no significant environmental incident throughout the year. We've also laid the groundwork for Highlight ESG Target for 2024. To which one side? coincide with the rollout of our revised ESG framework, which is an important activity for us this year. We are establishing a multi-year strategy with specific targets and objectives, which will be impactful for supporting the UN's Sustainable Development Goals. This will enhance our health and safety culture and promote the inclusion and fairness across our operations. to national employment and gender equity targets. Furthermore, we're developing a sustainability management framework focused on risk management, integration, and adherence to international best practices and standards. We are committed to sustainable, safe operation at Allied, and Guadalena and her team, along with the rest of senior management, are committed to fostering and achieving the best possible result for employees and stakeholders. With that, I'll let the call back to Dr. Peter.

Daniel, thank you very much, and thank you to everyone else who's participated on the call. As part of my concluding comments, I would like to say that as we are close to completion of the first quarter, it's important to showcase what we expect for the first quarter and what that portends for the 2024 full year. We anticipate a stronger second half by comparison to first half, not dissimilar to last year, where we began the year with 79,000 ounces, and we ended the year in the fourth quarter with approximately 95,000 ounces. We're beginning this year with a production platform of approximately 85,000 ounces and guidance indication of 85 to 88,000 ounces, and we expect that to increase quarter over quarter due to mine sequencing, operational enhancements, and a similar pattern to 2023. that saw a steady rise in that production, as I mentioned a few moments ago. Production enhancements are anticipated with the completion of the mine contractor transition at Agbao, as Bazzi touched on, process improvements at Bonnecro and the introduction of high-grade oxide ore from Deepa at Sadiola. Unifying the mine contracting at Bonnecro and Agbao will lead to higher expected production. That transition is in progress and is expected to be completed within the next few weeks or so, certainly by the early in the second quarter. We have engaged in process plant maintenance and improvements of Bonnecro in the first quarter that will lead to reduced production for the quarter, still within that 85 to 88,000 ounces that I mentioned a few moments ago, although mining was strong in the first quarter, and it is very similar to what it was in 2023. At Stockpile Delors, will be processed through 2024 that will lead to increased production quarter over quarter, as I mentioned. And we've already highlighted the contributions that DEBA and other satellite areas will make to Sadiola beginning in May. In terms of upcoming milestones, we expect to provide a detailed exploration update on Kermuk in early April, followed by insights on drill results at Sadiola and Bonnegro. We're focusing on oxide at Sadiola, as Daniel and others mentioned, Sekikoto at P4, S12, and of course, DEPA. We will be updating the drilling at Senge at our permup project to support the strategic goal of total mineral resources of in excess of 5 million ounces that will support an expanded production of 275,000 ounces per year. not for the current mine life of just over 10 years based on proven and probable reserves, but well over 15 years of mine life. We are carrying 2.6 million ounces in inventory as reserves presently. We are carrying 3.6 million ounces in resources. We want that number to increase, and our strategic goal was at least 5 million ounces. We will provide drilling and resource model updates for UME at Bonnegrove that supports a transition from a strategic mine life of 10 years to an established plan supporting that outlook. You've heard us say strategic several times. There is exploration potential we're drilling, and we're finding that that potential is manifesting itself into ounces in inventory. We want to take the word strategic out, taking strategic goals to life of mine plans as soon as possible. We expect Q1 results to be delivered on May the 9th, And we will provide an update on key corporate initiatives, including the contribution from DBA and the phase one expansion of Sadiola throughout the year, and a Kermuk construction update in the fourth quarter of this year. So, ladies and gentlemen, that's our presentation, and we'll open it up to questions.

Thank you. We now take questions from the telephone lines. If you have a question, please press star one on your device's keypad. If at any time you wish to cancel your question, please press star two. Thank you. And the first question is from Mr. Justin Chan, SCP Resource Violence. Please go ahead.

Hi, thanks for the update and for taking questions. My first one's on Catiola. Clearly, there's a big ASIC improvement. I'm just wondering, especially given your remarks on this year being back half-weighted, How quickly should we be modeling improvement on ASIC as we go through this year? Will we see a big step down in Q1, or is that a pretty sharp step down in the second half instead?

Yeah. Hey, Justin. I think Peter referenced it during the call. Really, it comes with the contribution of the DIVA ore, so we expect that into Q2. So, consider Q1 more like what we saw last year in 23, and then with DIVA Q2, we really see those costs come down with more oxide feed and a better grazing recovery.

Gotcha. So, it'll be a pretty steep transition, you could say, on the numbers, at least. Yes. Okay. Thanks. And just in terms of on your CapEx, especially at CareMuck this year, I think Sadiola is pretty understandably, you know, back half-weighted. On CareMuck, how is the spend profile for the year?

So we mentioned $155 billion for the year. You're asking, Justin, sort of how does... Yeah, just scheduling in terms of, yeah, quarter to quarter.

Yeah, Justin, the Q1 is pretty, pretty light. It'll be similar to what we spent in Q4 last year, Colin, and then it, you know, go fat pencil if you want average balance out over those last three quarters.

Okay, gotcha. And then are there any kind of seasonality or anything to note in terms of I see your guidance on taxes about $60 million through the year. Again, is there any specific timing issues that we should think about there or is that kind of similar to when profits are accrued or maybe one quarter delayed?

Pretty flat Q2 tends to be the largest. I mean, Q2, Q3 are the biggest ones. Maybe all that super Okay.

Okay, great. Thanks. I realize there's a lot of just asking quarter-to-quarter stuff, but it's always helpful to get a sense, especially for new reporting entities. Thanks, guys. I'll free up the line and maybe join again if I have more.

Justin, anything else you or others need for your models on a quarter-to-quarter basis, please do reach out. Thanks very much. Thanks.

Thank you. And the next question. So just a reminder, once again, please press store one on your device keypad if you have a question. And the next question is from Ms. Anita Soni from CIBC Broad Markets. Please go ahead.

Hi. Good morning, Peter, everyone. So a few more quarter-to-quarter questions. Just one on looking at Q2. You mentioned the costs come down dramatically, but is there a – Should we expect the production to also rise as much in Q2? Or is it more sort of like a modest change from Q1 to Q2 and then a big change in Q3 and Q4?

It would be very similar to last year. So we expect an increase in production in Q2 and Q3. And there will be a reduction in costs quarter over quarter as well. Not all of that is the result of increase in production. Some of that is a result of better recoveries. The processing of oxides, for example, coming from deep bed satiola, that would allow us to be able to improve costs as a result of grade and as a result of other factors. So it's a combination of things that would allow for production to bust beginning in Q2. We will see a production uptick in Q2 that will continue to

And then the second question was.

We start, sorry, my apologies. We start with a production. We, as I mentioned in the presentation, we're now in development at DFAP. We start production, we're expecting to start production May, June of this year. So there will be some impact coming from DEPA in the second quarter, but a more significant impact coming in the third quarter.

Okay. And then the second question was with respect to capital. Is there anything that we should be aware of in the timing of the sustaining capital spend and the development capital spend?

Nothing significant, Anita. You can average it at expiration. You can more or less average it at sustaining. Maybe it's a little bit more weighted to the middle of the year. Like most, we tend to be slow out of the gates in terms of our sustaining, so it's a little bit weighted. in terms of the development capital, as I mentioned, it's really Kermoke driving that, and it's the spend really average between Q2 and Q4 there.

Thank you. All right, now there are no further questions registered. I would now like to turn the meeting over to Mr. Moroney. Please go ahead.

Thank you very much once again for those who participate on the call or who will be listening in on a rebroadcast. As we mentioned, this call is recorded. We spent a significant amount of our effort this morning talking about the prospects of the company, but we can't have the prospects without the efforts that we've undertaken beginning in 2023, but more particularly in the fourth quarter of 2023 that will continue through this year. The future does look bright for the company. We do expect to see an uptick, as Daniel and Jason mentioned, an uptick in production this year over last year. That will continue again with an uptick in 2025 over 24. And then we see a very robust increase in production beginning in 2026 as a result of Cromuck coming into production. And we're taking all the steps that are necessary to ensure that we've managed capital effectively, that, you know, there have been questions about back-end loading or the timing for the spending of capital. We want to make sure that we're generating cash flows and building up cash balances in order to pay for those capital expenses. But just as importantly, we also want to make sure that we're driving toward a responsible production expectation from Satiola's expansion and just as critically from Kermuk. We expect to be in production in the second quarter. We are very early in the process, but it does look as if we've taken steps that have actually advanced the project, and we're ahead of schedule on those steps that we've taken. So with that, ladies and gentlemen, thank you very much for participating on the call, and we look forward to hearing from you further on the next one.

Thank you. The conference has now ended. Please disconnect your lines at this time. Thank you for your participation.