Bausch Health Companies Q4 2023 Earnings Call Transcript

Quartr
Provided by Quartr
March 28, 2024

There are 10 speakers on the call.

Operator

Good day, and thank you for standing by. Welcome to IAA Gold and Silver's 4th Quarter and Year End 2023 Results Conference Call. At this time, all participants are in a listen only mode. After the speakers' presentation, there will be a question and answer Please be advised that today's conference is being recorded. Ms.

Operator

Hanna, you may begin your conference.

Speaker 1

Thank you, operator. Good morning, everyone, and welcome to Aya's Q4 2023 results conference call. My name is Ruth Hanna, and I'm the IRN Communications Manager dialing in with some of the AYA team in Montreal and Morocco this morning. On the call today, we have Benoit Lafalle, President and CEO Hugo Landry Tolstook, Chief Financial Officer Rafael Baudoin, Vice President, Operations and David Lalonde, Head of Exploration. We'll finish today's event with a Q and A session with the team.

Speaker 1

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 SEDAR Plus and at www.aiagoldsilver.com. With that, I would like to turn the conference over to IEA's President and CEO, Benoit Assau. Benoit, please go ahead.

Speaker 2

Thank you, Ruud. Hello, everyone. We can summarize the year as saying that 2023 was an exceptional year for IEA. We've delivered a very strong year with record revenue, record earnings and record cash flow. We generated $42,800,000 in revenue and we generated $21,200,000 dollars of cash flow.

Speaker 2

The net profit of $5,300,000 is a 2 81% 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 ton per day Gundair 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 ton of ore at year end for commissioning of the new mill.

Speaker 2

And we've also have a combined mining rate underground and open pit of 2,300 ton per day at year end. You remember that we need to be at 2,700 ton 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 $70,300,000 and that does not include the $57,000,000 bought deal in CAD 77,600,000 that was done in Q1 of 2024. We've also delivered the milestones on the EBRD CTF financing loan, hence the reason why they have disbursed so far as per the schedule.

Speaker 2

So we've continued to invest in our growth opportunities. You remember that last year, we doubled the Boumazen budget, extending the strike length of the structure to 4.2 kilometer and discovering new types of mineralization. We've also signed a 20 year renewable PPA, which will be connected to the 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 Goodwill and by 200% at Boumedin.

Speaker 2

So this will take me to the next page, if you're following on the slide, to Page 4. And just to review quickly the actual production versus the guidance because we know it's extremely important. So we for the year 2023, our guidance was between 1.7 to 1.9 and we've achieved 1970,000 ounces, so beating our production guidance. Our cash cost in the guidance was around was estimated at $1440 and we ended the year at 12.50 and we all know that this is in the low quartile of our sector. The average grade process, our guidance was 2.64, we were at 2.50, which is in line.

Speaker 2

And the mill recovery, so the KPI for 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 at the plant, I've worked above nameplate capacity throughout the year.

Speaker 2

We as you know, the nameplate capacity is 700 ton per day and the average for the year is 7.72 tons per day. So we've done extremely, extremely well. Going to Page 5, just a quick summary of the last 5 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 being constant between 225% and 250%.

Speaker 2

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 ton for the year. Moving on to Page 6 of the presentation. On a cash flow basis, it's quite interesting to see that today for 2023, we're looking at 21,000,000 dollars of operating cash flow compared to the previous year.

Speaker 2

It is a record year. On gross margin, we are also on a record year as you can see on Page 5 on Page 6, sorry. 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 $25,000,000,000 sorry of cost of sales. And the cash cost is, as I said, extremely good, being at 12.5 dollars $12.50 per silver ounces sold.

Speaker 2

So Page 7 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, and we can say that this project is coming on time and on budget. So it's there are a couple of weeks left and it will be we will start commissioning towards the end of Q2. So on Page 8, you have this Gundyr expansion.

Speaker 2

We have some statistics. So we are on budget. We have incurred EUR 110,000,000 so far and we have the other EUR 38,000,000 committed. So we are within the budget and the CapEx that we had identified in 2022. The underground development is on track.

Speaker 2

That is doing extremely well. 90% of the lateral development is done, 80% of 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.

Speaker 2

So now it's a question of assembly. So the power line, the substation, the Merrell Crowe, the silver room, the ball mill obviously, all of that is on-site. And it's just a matter of 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 on-site infrastructure. So again, moving smoothly, all this being done in with our team and with our EPC contractor.

Speaker 2

So you have here a picture of a brand new water reservoir and tailings dam. Now you know that our $100,000,000 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.

Speaker 2

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, whereas 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 Gundair, 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.

Speaker 2

At Boumaudin, 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 6 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 amend 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.

Speaker 2

It's really generating targets, and it's ongoing. Zugunde 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 Gounder or that we will have. So the budget there is 10,000 meters. We're looking for similar mineralization that we have as Gundaert, which is silver, but we also are doing the geophysics at Tildes And that we know was a copper silver mine historically. We know that there is a structure there.

Speaker 2

Is it just a structure for artisanal mining or can it be a structure for us? We will find that out with geophysics, geochem and, of course, drilling throughout the year. Now there's a new project that we're going to do a little bit of work called Amismeeze. It's a project that's been in our portfolio for a long time. It was actually one of the first project that this company acquired in 2010.

Speaker 2

It was a gold mine. Historically, it's a very high grade mine and the team have looked at it and believe 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 we as the year goes by. On Page 11, you have as Goundere, the main structure that we refer to every time we make a presentation. We've been drilling this.

Speaker 2

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 focus more on the development of the underground for the mine and we did not have access to the lower level to drill. So 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 rheolite, which is the footwall of the deposit, we found that the realite was carrying mineralization and one of the drill hole that went into the realite gave us 10 89 gram per ton over 13.5 meters.

Speaker 2

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 real life to reassess it. It was at the least locally and with everybody outside that the real life was not mineralized until we then got those results and found out that it is 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 Gundair look alike because that's what we're looking for to debug a little bit the Gundair mine and not and when I say debug, it's because it's there's a lot it's going to be very busy.

Speaker 2

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, another underground structure where we could have autonomous mining that could also feed the plant. So the team has identified similar structures to Gundyr 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.

Speaker 2

The team is very positive. It's the same geological sequence that we have at Bundere. And as we know, historically, Managem at Imitaire, which is a kind of a look alike, 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 Boumagin, which is on Page 13.

Speaker 2

Boumagin 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 Boumazin. So we have budgeted, as we said, 120,000 meters this year, again, 60,000 meters 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.

Speaker 2

It's really, really interesting. Now you've also seen that we're adding permits. So at year end, we were we had added 4 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 Bandera by the way.

Speaker 2

When we arrived at Bundera, we had not a lot of ground and now we have close to 400 square kilometers of ground and we have most of the permits that we want to have at Gunda. We want to do the same thing at Boumeda. 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 we'll 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.

Speaker 2

The initial test gave us mid-80s to high-80s recovery using different methods. We have not yet decided on the flow sheet. We've looked at 4 methods. We are continuing, Rafael, as a team on this, and we are continuing the work to have the optimal flow sheet 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.

Speaker 2

So all of that will be taken into account. But ultimately, Boumazin is now becoming a Tier 1 project in size, in grade and it's we will be spending a lot of money and a lot of time on this project. On Page 14, you have the geophysic 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.

Speaker 2

It's gold, silver, lead and zinc and a little bit of copper. And it really is well set in this and as you can see with the geophysics in the pyrite structure. Now furthermore, if you look at the press release where we announced results, there was figure number 3, which showing some grab sample towards the north, where copper was really, really present, 6% to 12% copper. So those were graph samples. So obviously, we know what they mean, but it's also interesting to see that there's copper in this system.

Speaker 2

Amisbees, again, I don't want to take much more time, but 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 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 we're going to take the work that was done historically. We will review it. We will do a little bit of work and we'll see what's out there before we do a corporate transaction on it or we need to know what's there before we do we make a decision.

Speaker 2

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 teamed up with EBRD for $100,000,000 facility. So the ESG component is extremely, extremely important. So on health and safety, we've done quite well.

Speaker 2

We had very few lost days. We had a lot of training, 10000 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 we are pleased with the results. Obviously, 2024 is a more delicate year because we're increasing the number of employees.

Speaker 2

We're increasing the throughput. We have more production. So we have to be extremely careful, and we know that, and we're acting accordingly. So the Clean Technology Fund, the milestones were achieved this year, milestone number 1. So that reduced our rate on the CTF tranches to 6.98%.

Speaker 2

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 highlights, 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 mind doctor is also available for the community.

Speaker 2

Water access, we've 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 launched a saffron farm and we've had our first harvest. You may know that, but Morocco is a saffron producer like Iran and countries in the Middle East, and the quality of the saffron is extremely high. So to conclude, our year, it was a very, very good year for 'twenty for Aga in 2023. Silver production and cost guidance done.

Speaker 2

The milestone on the for the Gunther silver mine expansion, not totally done, but almost done. And again, you're following it with the video that we put out all the time. These good there 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.

Speaker 2

The Boumediene resource estimate is just about ready. It will come out in 2 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.

Speaker 2

So we're 10% done and it's ongoing. We will have or we have, I mean, it's a question of day 7 drill turning. And on the ESG front, which is again a major, major component, we did meet all the milestones. EBRD has disbursed $85,000,000 of the $100,000,000 EBRD is going to site in a couple of weeks with the team. They will review again all the their questionnaires regarding the loan, and we will draw on that $15,000,000 that last $15,000,000 dollars in the month of April, June May June, sorry, May June.

Speaker 2

So operator, this concludes the official portion of the presentation, and we will open the floor to questions. Thank

Operator

Our first question comes from the line of Puneet Singh from 8 Capital.

Speaker 3

Thanks. Good morning, Benoit and Timah. A couple of questions for me. You guys have a habit of beating guidance to better again this year on production cost beat 2. I know this is an expansion year, so probably better to on the side of caution.

Speaker 3

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 upfront. So just asking, how conservative are you being there because it will 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?

Speaker 2

Puneet, I'll pass this over to Rafael, who runs this on a daily basis.

Speaker 4

Hi, this is Rafael. So the grade of Gunday 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.

Speaker 4

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 at 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 was that's a classical strategy that we're certainly not inventing.

Speaker 4

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 rung at main plate and only then we will slowly increase the grade to the mill. Does that answer your question?

Speaker 3

Yes, that makes sense. Thanks. I had one more question on exploration. David is 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.

Speaker 3

And my final question is, it's been a couple of years now since you've updated that Zagun der 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.

Speaker 5

Hi, David Lalonde speaking. Concerning the Ryallite, yes, 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 conduit to bring the mineralization in. It definitely changed our approach in the coming drilling program.

Speaker 5

And as Mehdi Benoit mentioned, we are also re logging, resampling all the dry light 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 Scunpa.

Speaker 3

Okay. Sorry. So the second half of this year, you'll look to update that?

Speaker 5

Yes, the beginning of the second half, hopefully.

Speaker 3

Okay. Sounds good, David. Thanks very much.

Operator

Our next question comes from the line of Eleonore Magzinski from SCP Resource Finance.

Speaker 6

Good morning, everyone, and great work putting together the last quarter in year end results to all of us today. As always, a great presentation. I had a couple of questions. First on the underground versus open pit splits of tonnes 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

Speaker 7

Eleanor, can you speak up

Speaker 4

a little bit, please?

Speaker 6

Yes, absolutely. Sorry, I think it's my headphones. Is this better?

Speaker 4

Yes.

Speaker 1

Is it better, sorry?

Speaker 2

Yes.

Speaker 6

Okay, wonderful. Yes, I just had a question, the first one on split between underground and open pit for tonnes and grade. I see the totals were reported, but I was just kind of curious of the breakdown on that first.

Speaker 4

The open pit you mean for last quarter of 2023?

Speaker 6

That's right, yes.

Speaker 4

So we mine on the underground 114,000 ton at 210 gram per ton for the underground and the open pit was 60,000 ton at 186. So the open pit obviously has the strip, we mine on the mountain side and we will have quarter at 180,000,000 and we will have quarters at 280,000,000. So the split right now, we mined the open pit at a rate of between 500,001,000 ton per day and the underground more around 1,000 to 1500 tons per day. And we can expect over the next 2, 3 years the open pit to feed the mill to about 25% to 35% of the mill feed.

Speaker 6

Okay, awesome. Thank you very much. My second question, I guess, has to do with the ramp up schedule. I know there was 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 in the Q4 that would be the major kind of step up and in terms of like things being commissioned and getting to nameplate? Or is it a 6 month kind of process to get there?

Speaker 6

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, yes, just curious on kind of the timelines in the ramp up schedule.

Speaker 4

So we look at commissioning the plant towards the end of Q2, like Benoit said. Now we are towards the end of construction, talking about electrical and piping and quite in a construction crunch right now. Things are good. Ramp up, it's always ramp up 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 and there's nothing new in that.

Speaker 4

It's the co commissioning or verification, co commissioning, hot commissioning and so on. So we'll start that around June and then we'll need a couple of months to bring that 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 2 or 3 weeks or we fronted by 2 or 3 weeks, it has huge difference on production because the new plants will carry the bulk of production as soon as it started. Hence, the spread into the guidance for 2024.

Speaker 6

Awesome. Yes, makes perfect sense. Thanks very much for that. I just had one more question related to the expansion or actually maybe 2 more, but just quick ones. Just a question on infrastructure progress.

Speaker 6

Every quarter you've been reporting 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 I was just wondering kind of what's included in the on-site 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, on-site infrastructure, just curious kind of what's included in that type of stuff?

Speaker 4

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 plant. And many other 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.

Speaker 4

So it's not as near it's not as critical as the rest. So sometimes it falls on second priority, but it will get done and it's on a critical path. So that's what explains the other on-site infrastructures that might be a bit lower as opposed to everything else.

Speaker 6

Okay, awesome. Yes, that's kind of what I figured. It just seems obviously you prioritize 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 yes, it's kind of they'll eventually get done and get tacked on and it's not as

Speaker 8

it's a

Speaker 6

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 $159,000,000 There's still about $49,000,000 total of spend. So that in addition to the $36,000,000 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 the or for that total over the next, whatever, I guess, 3 quarters at this point now or 4 quarters, if you could kind of speak retrospectively a little bit?

Speaker 6

Sure.

Speaker 7

Yes. 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 number of meters down

Speaker 2

at Boumediene. So it's a

Speaker 7

little bit pushed towards H2, but exploration is pretty linear. You can divide it by 4 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.

Speaker 6

Okay, awesome. Thank you so much. Appreciate all of the feedback.

Operator

Thank you. One moment for our next question. Our next question comes from the line of Don DeMarco from National Bank Financial.

Speaker 9

Thank you, operator. And Benoit, congratulations on the guidance beat in 2023 and hopefully you have a guidance beat in 2024. For 2024, clearly it's going to be 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 fully ramped

Speaker 7

up? Don,

Speaker 4

it's a bit fortune telling.

Speaker 7

We're not going to guide quarter by quarter. I think we've known and I think the history of the product that company has shown here 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 ramping up mine production or in commissioning. I think for us, we're going to stick to an annual guidance here.

Speaker 9

Okay, fair enough. What's the grade of the stockpiles? Maybe you can tell us like how you plan to use the stockpile throughout the commissioning and maybe as a percentage of total feed?

Speaker 4

Well, so we've been mining in 2023 about 2.15 gram per tonne and we've processed 2.50 gram per tonne. So obviously, the stockpile is quite a bit lower in the range of 160,000 and we have about 250,000 tonne of it. That will be the sole theme for the say couple of 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 is no good or bad ounces, but there is lower and higher grade ore.

Speaker 4

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.

Speaker 9

Okay. Okay, that sounds reasonable. And then for my last question, shifting to Boumediene. So David, you've got a large airborne geophysics campaign plans being flown over Boumediene in the area. What do you expect to find from this?

Speaker 9

And when do you expect to release results?

Speaker 5

Sorry?

Speaker 2

Go ahead.

Speaker 5

Yes. 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 surveys, we wanted to cover the new license, of course, but took the chance as well to take a different resistivity to 2,000 meters or 2 kilometer at depth. When we had the original survey at Boumaden, the depth coverage was about 600 meters, if you can recall.

Speaker 5

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 a 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.

Speaker 9

Okay. That's all for me. Good luck with the ramp up and commissioning of Zugunger.

Speaker 7

Thanks, Don.

Operator

Thank you. One moment for our next question. Our next question comes from the line of Justin Chan from SCP Resource Finance.

Speaker 8

Hi, guys. Congratulations. Believe it or not, we have a couple more questions. Maybe just the first one on boomedine and the exploration budget. In the past, you've expanded budgets later in the year.

Speaker 8

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?

Speaker 4

Yes. So on the exploration budget,

Speaker 7

I think at Boumedzin, we've taken a 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

Speaker 2

have to

Speaker 7

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.

Speaker 4

As Gundair,

Speaker 7

again, I think there's quite a few targets, especially in the regional that are interesting and that will really depend on what we find and follow ups on that. So it's because it's such early like in the past we've had a lot of targets kind of last year the team generated several targets. We've budgeted to follow on those targets and then now it really depends on results. So it's hard to say to project forward, okay, how are we going to modify it or not? The results will dictate that.

Speaker 7

We have the capital if we wanted to extend it to extend it, the results have to be there. On what's next for Ploomazin 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.

Speaker 7

So hopefully there's still a lot of nice surprises associated to Bumazin. We think there are. And so I think we'll do a scoping study when we're confident in that the resource we have is a good representation of what Boumedzin is as a project. So it's an ongoing thing. I think 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.

Speaker 7

But we have to make sure that the deposit and the resources that we present are a good representation of the project.

Speaker 8

Okay, got you. 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 resources is where it is or it can be growing?

Speaker 7

Seems like a reasonable

Speaker 2

it seems like

Speaker 7

a reasonable hypothesis to me, Justin.

Speaker 8

Okay, great. Thanks. And then on just a question on the mine sequence at Schoondere. I mean, if the ramp up is going quite well and the recoveries are where you want them, will the I know, Raph, you mentioned that the open pit will be contributing high grade before first once you go through low grade stockpiles. But I'm just curious on the underground sequence.

Speaker 8

Will you have is there much high grade plan 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?

Speaker 4

I think in 2020, 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 stopes. And I think once we'll be ready with long haul stope, we will attack some of those high grade pillars in the lowest levels to 1925 1900. That being said, because we worked on the infrastructure for quite a while, we have done many stope access over the last 2, 3 months. So I mean, we do have a stockpile management plan, and we do stockpile the high grade, especially at the open pit.

Speaker 4

The rest has been fed more or less to the mill over the last couple of years of what we've been mined. So right now, the focus of the underground mining team is to prepare a stope access. And we will mine those high grade stopes as we are as the mill needs them and as we are ready for the stopes that require long haul stoping.

Speaker 8

Okay, thanks. That's really good color. Appreciate it.

Operator

Thank you. One moment for our next question. Our next question comes from the line of Steven Hsu from Stifel.

Speaker 3

Thanks, operator. Hi, Benoit and team.

Speaker 8

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 orebody, but how has it been reconciling versus your call it year ahead year 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?

Speaker 8

Thanks.

Speaker 4

So reconciliation has gone by the ongoing battle and ongoing technical fund. I don't know how else to put it. What we see as Gundyr is historical stopes. They always give more than we hope for, so which is very good. On the new stopes, when we do things right, we tend to get things right.

Speaker 4

Now it's excessively variable. I mean, we've seen the quarters we've got. We've got quarters and they're 300,000,000, we've got quarters in the lower 200,000,000 and the long term trend is somewhere in between. What we see at Gundag is when we take a whole quarter and we reconcile it, we're not far off on the grade side. But stop by stop, it can vary like 5 times the grade or 20% of the grade when we look on the stope by stope basis.

Speaker 4

We always have more than 20 stopes that's operating at the same time as Gundyr, out of which sometimes 80% of our production comes from 2 or 3 stopes. So yes, 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 of reconciliation of Gundyr is to have many stores 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.

Speaker 4

When we go stop by stop, sometimes it's a mess. So the key to solve that is to have is to prepare the stope access a long time before we need them. And this is what we've been doing last 3 months. And what is comforting though is when we look at it quarter by quarter and we put the stopes together, we're not too far off.

Speaker 8

Yes, it makes sense. I know it makes it tough to plan around, but good to hear that overall kind of shaking out where expected in the big picture. Appreciate that. The last one for me here is just on the Boumadin resource. I think this was originally kind of guided to come out mid February.

Speaker 8

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?

Speaker 2

Yes, Steven, 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 2 mining permits or 1 mining permit, now it's 1 permit. And so you saw that we've added probably close to 10 permits so far, 4 last year, I think 6 this year. We're in negotiation on probably 5 or 6 more. And we wanted to do this because we think that once we put out the resource, it will be a bit more difficult. So we are very happy where we are right now.

Speaker 2

We have targets or permits that we target and we want to have. And but that being said, the geophysics that we're doing covers all the ground that we want to have and that we have. So we're in a very good position. We have good information. And hence it was the reason for pushing it out of it.

Speaker 2

And we're almost there now. The early April, probably the 2nd 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 on as we explained on that main structure 4.2 kilometer long. And that will be the resource that we will present.

Speaker 8

Perfect. I appreciate it. That's all from me guys. Thanks again.

Operator

Thank you. At this time, I would now like to turn the conference back over to Benoit Lassalle, CEO and President for closing remarks.

Speaker 2

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.

Speaker 2

We will continue on this trend. I think 2024 will also be a very, very good year for I know some of you were looking at a bit of a higher guidance on production, but we've always been very conservative, and that's something we will maintain and we will maintain. It's discipline. The Rafael is going to site next week for a couple of weeks or a couple of months as we're getting into commissioning. So it's we're confident that this will continue to deliver.

Speaker 2

We're certainly confident that the geology will continue to deliver at Gundyr and at Boumazin. 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.

Speaker 2

And we really will probably be talking to you in the next few weeks on a bumadin update call with you separately or maybe some of you will do it all together, but it will it's coming in the next few weeks. So thank you

Speaker 8

very much.

Speaker 2

And again, we had a great 2023. The team is motivated, and we're continuing on the same trajectory for 2024.

Operator

This concludes today's conference call. Thank you for participating. You may now disconnect.

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Earnings Conference Call
Bausch Health Companies Q4 2023
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