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spk04: Good day and thank you for standing by. Welcome to AYA Gold and Silver's fourth quarter and year-end 2023 results conference call. At this time, all participants are in a listen-only mode. After the speaker's presentation, there will be a question and answer session. To ask a question during the session, you will need to press star 1-1 on your telephone. You will then hear an automated message advising your hand is raised. To withdraw your question, please press star 11 again. Please be advised that today's conference is being recorded. Ms. Hanna, you may begin your conference.
spk03: Thank you, operator.
spk02: Good morning, everyone, and welcome to AYA's fourth quarter 2023 results conference call. My name is Ruth Hanna, and I'm the IR and communications manager dialing in with some of the AYA team in Montreal and Morocco this morning. On the call today, we have Benoit Lassalle, President and CEO, Hugo Landré-Tolsuk, Chief Financial Officer, Raphael Beaudoin, Vice President Operations, and David Lalande, Head of Exploration. We'll finish today's event with a Q&A session with the team. Please contact our IR team directly with any follow-up questions that are not addressed during the call. Before we begin, I'd like to remind listeners that today's event will contain forward-looking statements that involve risks and uncertainties that could cause actual results to differ materially from those in the forward-looking statements. Details of the forward-looking statements are contained in today's news release, as well as on CEDAR Plus and at www.iagoldsilver.com. With that, I would like to turn the conference over to AYA's President and CEO, Bunwala South. Benoit, please go ahead.
spk13: Thank you, Ruth. Hello, everyone. We can summarize the year as saying that 2023 was an exceptional year for AYA. We've delivered a very strong year with record revenue, record earnings, and record cash flow. We generated 42.8 million in revenue, and we generated 21.2 million of cash flow. The net profit of $5.3 million is a 281% increase year-over-year. Furthermore, we have low total cash costs at $12.50 per ounce sold. We are also on track to deliver our plant expansion, the 2,700 tons per day Gunder mine expansion, We are today on time and on budget for commissioning in Q2 2024. To start the commissioning, we have a stockpile of 250,000 tons of ore at year end for commissioning of the new mill. And we also have a combined mining rate, underground and open pit, of 2,300 tons per day at year end. Remember that we need to be at 2,700 tons when we will achieve nameplate capacity. We're fully funded, and we have a really healthy balance sheet. The cash at the close of the quarter stands at $17.3 million US, and that does not include the $57 million bought deal in Canadian dollars, $77.6 million that was done in Q1 of 2024. We've also delivered the milestones on the EBRD CTF financing loan, and it's the reason why they have this burst so far as per the schedule. So we've continued to invest in our growth opportunities. You remember that last year we doubled the boom-adding budget. extending the strike length of the structure to 4.2 km and discovering new types of mineralization. We've also signed a 20-year renewable PPA, which we will be connected to the grid shortly, and that has also an effect of reducing the cost of energy for the new project. we've increased our land position by 20% at Goudin and by 200% at Boumadine. So this will take me to the next page, if you're following on the slide, to page four. And just to review quickly the actual production versus the guidance, because we know it's extremely important. So for the year 2023, our guidance was between 1.7 to 1.9. and we've achieved 1,970,000 ounces, so beating our production guidance. Our cash cost in the guidance was estimated at $1,440, and we ended the year at $1,250, and we all know that this is in the low quartile of our sector. The average grade process, our guidance was $264. We were at $250, which is in line. And the mill recovery, so the KPIs for the mill, the mill recoveries, the mill availability were all good. The mill recoveries, 86%, and the guidance was 86%. So we've done extremely well. And in the total ton process, we were budgeting $245,000. for the year, and we did 281,000. So the plants have worked above nameplate capacity throughout the year. As you know, the nameplate capacity is 700 tons per day, and the average for the year is 772 tons per day. So we've done extremely, extremely well. Going to page five, just a quick summary of the last five years. You see the production growth when we took over in 2020 to 2023. Obviously 2024 and further, there'll be a major change as the new plant will be commissioned and in production. So you see the silver grade process as well at the bottom from 2019 to 2023, you know, being constant between 225 and 250. The recoveries when we arrived were around 60, and now we are more towards the 86, 87%, which is excellent. And the ore process as discussed, that is based on the availability of the plant we now are extremely good with the availability of the plant and that's why we have the ore process at 281,000 tons for the year. Moving on to page six of the presentation. On a cash flow basis, it's quite interesting to see that today for 2023, we're looking at 21 million of operating cash flow compared to the previous year. It is a record year. On gross margin, We are also on a record year, as you can see on page six. Cost of sales is a function, of course, of our cash costs and all costs. It's quite aligned with where we should be at $25 million of cost of sales. And the cash cost is, as I said, extremely good, being at $12.50. per silver ounces sold. So page seven is just the picture of the new construction. I know we give you a video every month that you watch carefully, but it's coming very well. And again, we can say that this project is coming on time and on budget. So there are a couple of weeks left. It will be, we will start commissioning towards the end of Q2. So on page eight, you have the Gunder expansion. We have some statistics. So we are on budget. We have incurred 110 million so far, and we have the other 38 million committed. So we are within the budget and the capex that we had identified in 2022. The underground development is on track. That is doing extremely well. 90% of the lateral development is done. 80% of the vertical development is done. And if you recall, the most sensitive item of the project expansion was to make sure that the mining was going to be at 2,700 tons a day. So that is on track and developing extremely well. The plant is all on site, so now it's a question of assembly. So the power line, the substation, the Merrill Crow, the silver room, the ball mill, obviously, all of that is on site. And it's just a matter now of putting it all together. So we gave you a little progress chart of the processing plant, the underground, and the open pit mine, the tailings, the water management, the electrical infrastructure and the onsite infrastructure. So again, moving smoothly, all this being done with our team and with our EPC contractor. So you have here a picture of a brand new water reservoir and tailings dam. Now you know that our $100 million loan with EBRD is ESG driven. So those elements were extremely, extremely important. And they come to site every quarter. They review the work that's been done. And as you can see, this is state-of-the-art execution for the water reservoir and the water basin and the tailings dam. The pylons are 90% up. We have a few left to go. The cables have been pulled and the station has arrived on site. The exploration program is always a major focus because as you all know, we create value by increasing the ounces in the ground and by finding new deposits. So for 2024, and we've put that in the press release of this morning. At Secundaire, we will be drilling, at the main mine, we will be drilling 15,000 meters minimum, because often, as you know, over the years, once we've been through the budget, we looked at what needs to be done and we increase it. At Boumadine, we've completed last year 76,000 meters. This year, we are going to do 120,000 meter. That's the budgeted amount of drilling, which is 60,000 meters on the known structure, which we refer to as the 4.2 kilometer strike, which we follow with geophysics on six kilometer. And we will also do 60,000 meters to test new targets because the team has identified parallel targets, that are within our permits, the reason for us to augment the number of permits that we have. So we will divide that half and half. Obviously, the second half, the 60,000 meters, is something that will move based on what we find with geophysics, and that's something extremely important. We are doing the geophysics right now. It's really generating targets, and it's ongoing. Zgoundaia Regional also a very important aspect of our strategy as we're looking for an additional mine or deposit to feed the three plants that we have at Zgoundaia or that we will have. So the budget there is 10,000 meters. We're looking for similar mineralization that we have at Asgundat, which is silver. But we also are doing the geophysics at Tirzit. And that, we know, was a copper-silver mine historically. We know that there is a structure there. Is it just a structure for artisanal mining, or can it be a structure for us? We will find that out with the geophysics, geochem, and, of course, drilling throughout the year. Now, there's a new project where we're going to do a little bit of work called AmizMiz. It's a project that's been in our portfolio for a long time. It was actually one of the first projects that this company acquired in 2010. It was a gold mine. Historically, it's a very high-grade mine, and the team looked at it and believed that It's worth a bit of work, not a lot of work, but to go and find out what is really the size of this deposit. So that's something to look forward to as the year goes by. on page 11 you have uh the main structure uh that we refer to uh every time we make a presentation and we've been drilling this we're a little late on our drilling so last year we were supposed to do 20 000 meters we didn't do it because we focused more on the development of the underground for the mine and we did not have access to the lower level to drill so we we know that we were a little late but we're making it up right now something very interesting happened in the past month and is we found that the real light which is the foot wall of the deposit we found that the real light was carrying mineralization and one of the drill hole that went into the real light uh gave us a thousand eighty nine eighty nine gram per ton over 13.5 meters. So that was quite a surprise. Of course, David and the team immediately went back to the core shack, pulled out all the drill logs and all the core that went into the RioLite to reassess it. It was a relief locally and with everybody on site that the real light was not mineralized until we then got those results and found out that it could be mineralized. So that's a very interesting development. Now on page 12, you have the results of the work that has been done by the team on site in identifying another zbunder look-alike because that's what we're looking for to debug a little bit this good their mind and not and when i say debug is because it's there's a lot it's going to be very busy at 2 700 ton a day that is the traffic capacity of that deposit i mean it'll be many trucks up and down and so we would like to find another pit and other underground structure where we could have autonomous mining that could also feed the plant. So, the team has identified similar structures to Gounder on the Far East, and we are currently drilling the one to the Far East, and there's one to the South as well, which we are currently drilling right now. So we are looking forward for these results. The team is very positive. It's the same geological sequence that we have at Gounder. And as we know, historically, Ménagème at Imitay, which is a kind of a lookalike, not identical, but pure silver mine, they have discovered around their main pit and their main underground mine many satellite deposits. And that's what we are looking with this work that we're doing. Now, coming to Boumadine, which is on page 13. Boumadine is a very, very interesting project, as you know. We've talked about it. We've had very good results, very good drill results. We raised the money in Q1 because we've announced that we're going to put that money to work at Boumadzin. So we have budgeted, as we said, 120,000 meters this year. Again, 60 on the main zone, 60,000 meters on these new targets that are being generated, which we are some we already have. Others will come from the ongoing geophysics. It's really, really interesting. Now, you've also seen that we're adding permits. So at here end, we had added four new permits. We announced more permits last week, and there'll be more coming. We are in the process of hopefully controlling the whole district, as we did at Zbunder, by the way. You know, when we arrived at Zbunder, we had not a lot of ground, and now we have close to 400 square kilometers of ground and and and we have you know most most of the permits that we want to have as good there we want to do the same thing at boom so our land position which originally was at the very beginning was very small is now it was 36 square kilometers the original mining permit now we are at 141 square kilometer and that is will keep growing last year we did some metallurgical testing because It's always a question that we all have, is how are we going to treat this material? The initial test gave us, you know, mid-80s to high-80s recovery using different methods. We have not yet decided on the flow sheet. We've looked at four methods. We are continuing, Raphael has a team on this, and we are continuing the work. to have the optimal flowsheet and method that we will be using. Obviously, it's a function of the ore, and David is finding different types of ore to the north or to the south, so all of that will be taken into account, but ultimately Boumadzine is now becoming a Tier 1 project in size, in grade, and we will be spending a lot of money and a lot of time on this project. On page 14, you have the geophysics that we've been using and some of the hits that we've had over the year, 2023. So you see that the grade is 1,000 gram per ton over 23.5 meters. I mean, it is It's a very good grade project. It's gold, silver, lead, and zinc, and a little bit of copper. And it really is well set in this, as you can see with the geophysics, in the pyrite structure. Now, furthermore, if you look at the press release where we announced the results, there was figure number three was showing some grab sample towards the north. where copper you know was really really uh present uh six to twelve percent copper so those were graph samples so obviously we you know we know what they mean but it's also interesting to see that there's copper in this system i mean again i want to take much more time but but it's it's it's it's a it's a small project yet but we think that with the gold price and this currently the historical mining and the historical resource which is you know it's not ours it was there way before our time they were looking at about 13 gram per ton it's an underground system but uh we're gonna take you know the work that was done historically we will uh review it we will do a little bit of work and we'll see what what's out there before we you know we we do corporate transaction on it or we you know we need to know what's there before we do we make a decision now to close of course the ESG is extremely important in this world of mining for us it's always been it will continue to be to the point where we we teamed up with EBRD for a hundred million dollar facility So the ESG component is extremely, extremely important. So on health and safety, we've done quite well. We had very few lost days. We had a lot of training, 10,000 hours of training. We had no fatalities, which is something you never want to have. So 2023 has been a big year of transition. of training but uh all but you know we are pleased with the results obviously 2024 is is a more delicate year because we're increasing the number of employees we're increasing the throughput we have more production so we have to be extremely careful and we know that and and we're acting accordingly so the clean technology fund the milestones were achieved this year milestone number one so that reduced our rate on the ctf tranches to 6.98%. Excuse me. We have other milestones to meet over the years. And as we meet them, the rates are going to be coming down even further. On the community I like, something of great importance to all of us, education. We organize classes and online classes for the schools in our community. Health, we have mobile clinics, and our mine doctor is also available for the community. Water access, we help villages in securing water access, and we do that for all the communities where we are. And as well, we have the economic project, which creating of sustainable development. And we launch a saffron farm, and we've had our first harvest uh you may know that but morocco is a is a saffron producer like iran and and countries in the middle east and uh the quality of the saffron is extremely extremely high so to conclude our year it was a very very good year for 20 for aya in 2023 silver production and cost guidance done The milestone for the Zgounder silver mine expansion. Not totally done, but almost done. And again, you're following it with the videos that we put out all the time. The Zgounder underground and regional drilling, that's ongoing. We did some. It's ongoing this year to complete all the drilling that we want to do. The Boumadine resource estimate, It's just about ready. It will come out in two weeks, plus or minus a few days. We're just about ready. It's an ongoing process, but the drilling is ongoing. Out of the 120,000 meters that we wanted to do this year, we're already past 12,000 meters already, so we're 10% done, and it's ongoing. We will have, or we have, I mean, it's a question of days, seven drills turning. And on the ESG front, which is again a major, major component, we did meet all the milestones. EBRD has disbursed $85 million of the $100 million. EBRD is going to site in a couple of weeks with the team. They will review again all their questionnaires regarding the loan, and we will draw on that $15 million, that last $15 million in the month of... April, June, May, June. So, operator, this concludes the official portion of the presentation, and we will open the floor to questions.
spk04: Thank you. As a reminder, to ask a question, please press star 1-1 on your telephone and wait for your name to be announced. To withdraw your question, please press star 1-1 again. Please stand by while we compile the Q&A roster. Our first question comes from the line of Puneet Singh from 8 Capital.
spk08: Thanks. Good morning, Benoit and Tima. A couple questions for me. You guys have a habit of beating guidance to better again this year on production cost B-2. I know this is an expansion year, so probably better to err on the side of caution. But just wondering how much conservatism you're baking into those numbers, especially on the grades. Because I remember the tech report was calling for you to mine some of that 300 gram per ton material up front. So just asking how conservative are you being there? Because it'll be a cost driver. And do you think you could be into some of that higher grade material by the end of the year if things go well?
spk12: I'll pass this over to Raphael who runs this on a daily basis.
spk01: Hi, this is Raphael. So the grade of Gundai is obviously the driver of this mine and also quite a challenge considering the geology of the deposit. And as we increase tonnage, obviously to keep the grade stable is our focus. In 2024, there are many things coming up to play. We are, once again, almost doubling our mining rate. We need to commission the new plant, and we also will include the open pit ore within the new mill as we will commission it. Throughout 2023, we've kept the grade fairly high during production, which ensured us very good production in 2023. And we have stockpiled, let's say, lower grade to ensure a smooth commissioning and not wasting any ounce. And that's a classical strategy that we're certainly not inventing. That being said, we really need to focus on commissioning the mill, making sure to bring availability up, to bring recovery up, to make this mill run at main plates, And only then we will slowly increase the grade to the male. Does that answer your question?
spk08: Yeah, that makes sense. Thanks. I had one more question on exploration. David's on the line. I'd like to hear maybe the expanded take on that rhyolite because it looks like it could be a game changer for you guys. And my final question is, it's been a couple years now. Since you've updated that Zegunder resource, when do you think you'll update the market next on that? Because you've been hitting some great intercepts. So just wondering when you'll let's update the market on that. Thanks.
spk07: Hi, David Lalonde speaking. Concerning the Royalite yesterday, we believe it can be a game changer. It's still early to fully understand it. But so far the take is related to flat faults through the rhyolite that most likely could have served as a conduit to bring the mineralization in. It definitely changed our approach in the coming drilling program. And as Benoit mentioned, we are also re-logging, re-sampling all the rhyolite intervals that was historically not sampled because believe in Barron. That's one thing. Concerning the resource update, we are in the progress of making them. We expected to make it earlier, but the underground development was slow and the drilling last year was slow, but currently this year we're already 58% complete with our underground drilling program, so we expect by beginning of H2 to be able to update the market on the resource at Scunda.
spk08: Okay, sorry, so the second half of this year, you'll look to update?
spk07: Yeah, the beginning of the second half, hopefully.
spk08: Okay, sounds good, David. Thanks very much.
spk04: Thank you.
spk03: One moment for our next question.
spk04: Our next question comes from the line of Eleanor Magzynski from SCP Resource Finance.
spk05: Good morning, everyone, and great work putting together the last quarter in UN results for all of us today. As always, a great presentation. I had a couple questions. first on the underground versus open pit splits of tons and grade for the quarter. I didn't see that when I was kind of looking through, and I was just curious kind of what- Eleanor, Eleanor, can you speak up a little bit, please? Yeah, absolutely. Sorry, I think it was my head stung. Is this better? Yeah. Is this better, sorry? Yeah. Okay, wonderful. Yeah, I just had a question, the first one on splits between underground and open pit for tons and grade. I see the totals were reported, but I was just kind of curious of the breakdown on that first.
spk01: The open pit, you mean for last quarter of 2023? That's right, yeah. We mine on the underground 114,000 tons at 210 gram per ton for the underground and the open pit with 60,000 tons at 186. The open pit obviously has the strip. We mine on the mountainside and we will have water at 180 and we will have waters at 280. So the split right now, we mine the open pit at a rate of between 500 and 1,000 tons per day, and the underground more around 1,000 to 1,500 tons per day. And we can expect over the next two or three years the open pit to feed the mill to about 25, 25 to 35% of the mill feed.
spk05: Okay, awesome. Thank you very much. My second question, I guess, has to do with the ramp up schedule. I know there was, you know, the range of guidance, but in terms of how things are expected in your view with commissioning towards the end of Q2, do you feel, you know, in the fourth quarter, that would be the major kind of step up and in terms of like things being commissioned and getting to name plates? or is it a six-month kind of process to get there? I know, obviously, you're set up well with the stockpiles and everything and kind of finalizing the process plant and things like that. But, yeah, just curious on kind of the timelines in the ramp-up schedule.
spk01: So we look at commissioning the plant towards the end of Q2, like Benoit said. Now we are towards the end. the end of construction, talking about electrical and piping and quite in a construction crunch right now. Things are good. You know, REMPOP, it's always... REMPOP is never hit or miss, but it's never quite smooth either. So we can expect... There's a sequence. Obviously, there's a sequence. There's nothing new in that. It's the... the coal commissioning, well, verification, coal commissioning, hot commissioning, and so on. So, we'll start that around June, and then we'll need a couple months to bring it up to a certain rate, which we hope to be close to 80 to 90% capacity, and then we'll stabilize the production towards the end of Q3. and hopefully have a very good Q4. So that's the plan. And about the guidance, as you can imagine, if we push back commissioning by two or three weeks or we front it by two or three weeks, it has huge difference on production because the new plant will carry the bulk of production as soon as it started. Hence, hence the spread into the guidance for 2024. Awesome.
spk05: Yeah, makes perfect sense. Thanks very much for that. I just had one more question related to the expansion, or actually maybe two more, but just quick ones. Just a question on infrastructure progress. You know, every quarter you've been reporting, you know, how things are going. it seems in my view anyways, maybe that's probably not as critical path as some of the other ones. And it was just wondering kind of what's included in the onsite infrastructure development that's still required. So that's aside from obviously the process plant and electrical commissioning, which I mean, obviously they're pretty big ticket items, but for the remainder onsite infrastructure, just just curious kind of what's included in that type of stuff.
spk01: So on-site infrastructure includes essentially everything else. So we're talking about here some housing for extra workers, some small roads we need to finalize. I can think also of different pipe works that we need to do between water basins and plants. And many of the things of which are not necessarily critical for the commissioning of the new plant or the ramp-up of the mine, but has to get done at one point or another. For example, our underground garage, who's been dragging along a bit, but we have a surface garage, so it's not as critical as the rest. So sometimes it falls on second priority, but it will get done and it's not a critical path. So that's what explains the other on-site infrastructures that might be a bit slower as opposed to everything else.
spk05: Okay, awesome. Yeah, that's kind of what I figured. It just seems obviously your priority has anything that could be more critical path in terms of the commissioning. And then, like you said, those are just things that need to get done. But yeah, they'll eventually get done and get tacked on and it's not as, It's a lot of smaller jobs, let's say. I guess my last question, I'm cognizant I've been hogging the line here, so this will be my last one. But just in terms of the anticipated spend, so if you take the budgeted capex of $159 million, there's still about $49 million total of spend. So that, in addition to the $36 million of exploration spend allocated for this year, I was just kind of curious on if there is a timeline or an expected timeline of spend for that over or for that total over the next, you know, whatever, I guess, three quarters at this point now or four quarters, if you could kind of speak retrospectively a little bit. Sure.
spk11: Yeah. So on exploration, you can kind of see that pretty evenly split a little bit back. H2, and you can see here we had an image or a number of meters down at Boumezine. So it's a little bit pushed towards H2, but exploration is pretty linear. You can divide it by four or take 60% or 65% H2 versus H1. And in terms of construction, I would say it's the reverse. It's probably 75% of that, 80% of that in H1 and the remainder in H2.
spk05: Okay, awesome. Thank you so much. I appreciate all of the feedback.
spk04: Thank you. One moment for our next question. Our next question comes from the line of Don DeMarco from National Bank Financial.
spk06: Thank you, operator, and Benoit, congratulations on the guidance beat in 2023, and hopefully you have a guidance beat in 2024. For 24, clearly it's going to be a back-end loaded year. Can you give us some color on the grades and costs quarter by quarter? And what costs would you expect in Q4 when the plant's fully ramped up?
spk11: Don, you're out there. It's a bit fortune-telling. We're not going to guide quarter by quarter, I think. We've known, and I think the history of the company has shown here in the last few years, like there's some good quarters and there's some less good quarters. That's a function of the grade that's at the mill. We're wrapping up mine production. We're in commissioning. I think for us, we're going to stick to an annual guidance here.
spk06: Okay, fair enough. What's the grade of the stockpiles? Maybe you can tell us how you plan to use the stockpile throughout the commissioning and maybe as a percentage of total feed.
spk01: Well, so we've been mining in 2023 about 215 gram per ton and we've processed 250 gram per ton. So obviously the stockpile is quite a bit lower in the range of 160 and we have about 250,000 ton of it. That will be the sole feed for the, say, couple months of commissioning, and then we'll slowly include our high grade on the open pit, our high grade on the open pit ore that will follow, and we will bring up the grade as we stabilize production. Our key target here is not to waste ounces, essentially. So there's no good or bad ounces, but there's lower and higher grade ore. and we want to make sure commissioning is done with the lowest stockpile, and as soon as recovery gets up, we will diminish the blend of the stockpile in the feed of the plant, and we will bring up the grade.
spk06: Okay. Okay, that sounds reasonable. And then for my last question, shifting to Boumediene, so David, you've got a large airborne geophysics campaign plant being flown over Boumediene in the area. What do you expect to find from this? and when do you expect to release results?
spk07: Sorry? Yeah, the geophysical survey right now is about 70% complete, and we like the results so much that we are planning to extend it. The idea of the survey is we wanted to cover the new license, of course, but took the chance as well to take a different technology that will allow us to measure conductivity all the way down to one kilometer of depth and resistivity to 2,000 meters, so two kilometers of depth. When we had the original survey at Boumadin, the depth coverage was about 600 meters, if you can recall. So the idea is to look for deep roots of the system, eventually start looking for porphyry type mineralization, and of course to identify any massive sulfides that we could find in the new areas. So hopefully the survey will be completed in May with final reports and data process probably late H1. And as soon as we have nice, colorful maps, I'm sure we'll have lots of pressure to feed the market with the news. And we're quite confident about it.
spk06: Okay. That's all for me. Good luck with the ramp-up and commissioning of Zegunder.
spk12: Thanks, Don.
spk04: Thank you. One moment for our next question. Our next question comes from the line of Justin Chan from SCP Resource Finance.
spk09: Hi, guys. Congratulations. Believe it or not, we have a couple more questions. Maybe just the first one on Grumadin and the exploration budget. In the past, you've expanded budgets later in the year. I guess how much potential is there for that? And then in terms of the timeline from the first resource onward, Should we expect a scoping study or would the next update be another resource update before you start wrapping economics on it?
spk11: Yeah, so on the exploration budget, I think at Boumezine we've taken quite a bit bite here to move from 76,000 to 120,000 meters. A lot of it is greenfield as well, and so we're going to have to see kind of what those results of that greenfield exploration gives us in that, like in the past, has driven what we'll do in the future. David already mentioned the results of our regional geophysics has been exciting, and we've already extended that a little bit. Again, I think there's quite a few targets, especially in the regional that are interesting, and that'll really depend on what we find and follow ups on that. So it's because it's such a really like in the past, we've had we've had a lot of targets kind of established and there was a lot of things that we want to do. Now we're in now we're in last year, the team generated several targets we've budgeted to follow on of those targets, and then now it really depends on results. So it's hard to say, to project forward, okay, are we going to modify it or not? The results will dictate that. We have the capital if we wanted to extend it to, to extend it, the results have to be there. On what's next for Pumat Zind after the resource estimate, again, I think a lot of that will be driven. We've done some work where we've budgeted some engineering work this year. But it's still a new project. We haven't been working on it for a very long time. So hopefully there's still a lot of nice surprises associated to Boumedzen. We think there are. And so I think we'll do a scoping study when we're confident that the resource we have is a good representation of what Boumedzen is as a project. So it's an ongoing thing. Rafael's team on the engineering side is following closely to make sure that when we want to do a scoping study, a lot of the field work that needs to be done, which is the long part of doing the study, is executed. But we have to make sure that the deposit and the resources that we present are a good representation of the project.
spk09: Okay, gotcha. So probably... Just reading between the lines, it's probably a scoping study would be less likely this year, more likely next year, given that you have a lot of results to come in that could determine whether or not you think the resource is where it is or it's going to be gone.
spk11: Seems like a reasonable hypothesis to me, Justin.
spk09: Okay, great. Thanks. And then just a question on the mind sequence, Ed. If the wrap-up is going quite well and the recoveries are where you want them, I know, Raf, you mentioned that the open pit will be contributing high-grade first once you go through low-grade stockpiles, but I'm just curious on the underground sequence. Is there much high-grade planned this year in the mine sequence that you could blend in if you're happy with how the plant is performing, or is that mostly coming in maybe next year.
spk01: I think in 2024, the high grade of the mill is certainly not the priority. As we've been going down the level, what we want is also to switch our mining method to include some long-haul stoves. And I think once we'll be ready with long-haul stove, we will attack some of those high-grade pillars in the lower levels to 1925 and 1900. That being said, because we worked on the infrastructure for quite a while, we have done many stove access over the last two or three months. So, I mean, we do have a stockpile management plan, and we do stockpile the high-grade especially of the open pit. The rest has been fed more or less to the mill over the last couple of years of what we've been mining. So right now, the focus of the underground mining team is to prepare a stope access, and we will mine those high-grade stoves as the mill needs them and as we are ready for the stoves that require long-haul stoping.
spk09: Okay, thanks. That's really good, Kyle. I appreciate it.
spk03: Thank you. One moment for our next question.
spk04: Our next question comes from the line of Steven Su from Stifel.
spk10: Thanks, operator. Hi, Benoit and team. Congrats on a great 2023. Just a few quick ones for me here. First one is around reconciliation of the underground specifically. I know it's a difficult kind of potty ore body. But how has it been reconciling versus your call it year ahead, your look ahead geologic model? Again, just kind of focused on the grade guidance here for 2024 and wondering if there's any kind of longer term implications or if that's just a function of the ramp up. Thanks.
spk01: Reconciliation at Gundag is an ongoing battle, an ongoing technical fun. I don't know how else to put it. What we see at Gundag is historical stops. They always give more than we hoped for, which is very good. On the new stops, when we do things right, we tend to get things right. Now, it's excessively variable. I mean, we've seen the quarters we got. We got quarters And the upper 300, we've got quarters in the lower 200. And the long-term trend is somewhere in between. What we see at Gundai is when we take a whole quarter and we reconcile it, we're not far off on the grade side. But stope by stope, it can vary like five times the grade or 20% of the grade when we look on the stope by stope basis. We always have more than 20 stopes operating at the same time as Gundai, out of which sometimes 80% of our production comes from two or three stoves. So yeah, if you miss one of them, grade goes sideways very fast on the good side sometimes and obviously on the bad side sometimes. So the key here at Reconciliation at Gunda is to have many stoves open to make sure to scan everything right and to make sure to be ahead in definition. That's what we've been working on. So what I can say in a nutshell on reconciliation is when we look at the big scheme of things as Gundar, things do reconcile not too bad. When we go stop by stop, sometimes it's Yeah, sometimes it's a mess. So the key to solve that is to prepare the stove access a long time before we need them. And this is what we've been doing the last three months. And what is comforting, though, is when we look at it quarter by quarter and we put the stoves together, we're not too far off.
spk10: Yeah, it makes sense. I know it makes it tough to plan around, but good to hear that overall kind of shaking out where we're expected in the big picture. Appreciate that. The last one for me here is just on the Bumadine resource. I think this was originally kind of guided to come out mid-February. So can you provide any more color on kind of the delay here now that we're looking at kind of mid-April for potential release?
spk13: Yeah, Stephen, you know, when we decided to push it out a little bit, it was really a question of making sure we were able to negotiate permits around our two mining permits or one mining permit. Now it's one permit. And so you saw that we've added probably close to 10 permits so far, four last year, I think six this year. We're in negotiation on probably five or six more. And we wanted to do this because we think that once we put out the resource, it'll be a bit more difficult. So we are very happy where we are right now. We have targets or permits that we target and we want to have. But that being said, the geophysics that we're doing covers all the ground that we want to have and that we have. We're in a very good position, we have good information, and hence it was the reason for pushing it out of it. And we're almost there now. The early April, probably the second week of April, we'll be done acquiring what we want to acquire. Others may not be done, but we will wait for them a little bit later. and the resource will be coming out as we explain on that main structure, 4.2 kilometers long, and that will be the resource that we will present.
spk10: Perfect. I appreciate it. That's all from me, guys. Thanks again.
spk04: Thank you. At this time, I would now like to turn the conference back over to Benoit Lassalle, CEO and President, for closing remarks.
spk13: Thank you very much. Thank you all of you for assisting today. 2023 was a stellar year. It was a very, very good year production-wise, construction, exploration, ESG. We had a very, very good year. We will continue on this trend. I think 2024 will also be a very, very good year for AYA. I know some of you were looking at a bit of a higher guidance on production, but you know we've always been very conservative and that's something we maintain and we will maintain. It's discipline. Raphael is going to site next week for a couple of weeks or a couple of months as we're getting into commissioning. So we're confident that this will continue to deliver. We're certainly confident that the geology will continue to deliver at Gunda and at Boumadine. And we will follow with our ESG program as well, which is extremely important. So thank you for being there. Thank you for following us. and we are always available for comments and discussion, and we really will probably be talking to you in the next few weeks on a Boumadine update call with you separately, or maybe some of you will do it all together, but it's coming in the next few weeks. So thank you very much, and again, we had a great 2023. The team is motivated, and we're continuing on the same path for 2024.
spk04: This concludes today's conference call. Thank you for participating. You may now disconnect.
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