Deluxe Q1 2024 Earnings Call Transcript

Quartr
Provided by Quartr
May 8, 2024

There are 9 speakers on the call.

Operator

Welcome to our call to discuss our Q1 2024 operating and financial results and to give you a corporate update as well. Many of you are all you will see the news release that's come out. It gives quite a lot of detail. We're off to a solid start for 2024. We produced over 225,000 ounces of production across the consolidated basis in line with what we expected with all 3 beach gold operating lines performing well.

Operator

Importantly, cash operating costs and all sustaining costs in the Q1 both came in well below our annual guidance ranges. And Michael will give you a lot more on that, and then be talking shortly to give a lot more detail, but very strong quarter and excellent financial position. Going forward, the mines are operating very well. For 2024, what we have described as a transitional year for each goal, we have made strong progress on 2 of our most important items for the year. Firstly, we've had some encouraging discussions with the Mali government throughout the start of 2024.

Operator

It's really important to stress that despite some rumors out there and irresponsible journalists out there, the fact that the matter has been controlled recently, there's been absolutely zero indications that the government now is considering nationalizing Western gold mines. On the contrary, we have had productive dialogue with the government how our opportunity in the Kona region can fit in the long term future of the Fekola complex. The government has expressed a desire fast track the mandate of an exploitation program once the implementation decree with the mid-twenty 20 3 minutei code is finalized. We believe over the next few months, we're potentially to agree with the government and look forward to starting to truck ore from what we call the Anaconda area, that's the north down to the Pekola Mill. The roads are built.

Operator

We're ready to go. We need an exploitation permit to do that. As I said, which we're hoping to secure shortly. It's definitely a mutual interest we have with the government. We want to increase production by potentially 100,000 ounces a year by tracking this good grade material down at the Fekola Mill and the government wants more revenue from low mine.

Operator

This is one of this and going after illegal Artuso Mining have the 2 best opportunities for the government in Mali to increase revenue from gold mining. So we'll see the process as we move forward shortly as soon as we move forward with the regular board from the Kola Regional. The other most important area of this we are focused on is construction progress at Goose. The Lyle will be giving you an update on how we're progressing, very encouraging in the sense we just closed the ice road. The ice road was extraordinary successful this year and getting everything up we need, well, everything up the road we need, the 160 kilometers ice roads, everything up to complete construction.

Operator

So it was a major year of getting equipment in for construction and of course, running the operations as well with that. That was great success and that's a really contributing to our logistical team. Our experience factor of building Ice Rose and it's a great team on-site to make all of that happen, that is significantly de risk the project prior to that. We did announce today a slight delay or last night a slight delay on the estimate of first quarter projects from Q1 2025 to Q2 2025. Bill will give you detail on that, but I think it's really important to point out that the construction team has delivered, the Beach Global construction team has delivered despite picking up approach that was partly some equipment had been ordered and other things have been done in terms of the previous owner looking to move the mine into construction.

Operator

So we inherited some good things and we inherited some challenges. So we'll talk a bit about what we've done to turn this project into a B2Gold project. The main reason for the shift from the quarter we received is the fact that the build could be built on schedule at the end of Q1 2025, but because of some delays in the open pit and underground mining schedule, we won't have more to feed through the mill. So that's the driving force behind moving to the Q2. The construction is actually on track.

Operator

We expect it to remain on track. Details on that. I think it's really important to underline the fact that one of the things that we benefited from in the acquisition of Speedo West. They did a very good job in exploration and permitting and an excellent job in relationships with a new population and also the government. So that part of the team that was involved in this project has remained with the project and they are very important to the success of the project.

Operator

We were just always just on the around the capital a couple of weeks ago for the innovative mining symposium. It's an excellent conference, very upbeat. We are in the right place at the right time. And the population and the government at every level is very excited about B2Gold completed this mine and looking forward to great success there. Obviously, exploration is a big part of what we do historically and there's a reason why half of our large exploration budget for this year is $73,000,000,000

Speaker 1

over half of that or

Operator

half of that exploration budget is focused on back urban for a reason. We see extraordinary potential there. And I've had some very good results so far in our drilling campaign. I'm glad you answered questions about that. Just in terms of catalyst going forward, and I'll pass it over to Mike.

Operator

I need to catalyst going forward. Obviously, as I mentioned, to see resolution of Vale and being able to move forward with trucking ore. Looking forward to a very good construction season this year at Goose and we'll continue to update. Also, I think another exciting potential is looking at Gramalote. As everyone is probably or members, we had a joint venture with the Angi and looking to build a big mine to justify that for 2 companies.

Operator

Now it's owned by just by each of those. And we've been looking at a number of different cases. We will come out with results of new study before the UGM. And what they're targeting now is something around 6,000,000 tons your case and that could produce 200,000 ounces a year. We're waiting to see where we look at the economics of that.

Operator

We're not quite there yet, but having some encouraging signals from the engineers that we can reduce our footprint and reestablish our permit. But I'll actually be looking at quite a potentially interesting economic opportunity. So again, altogether, you look at the catalyst and the future of well production potential for this company. We have the potential for 100,000 ounces a year to come from trucking oil for coal as I mentioned. Over 300,000 ounces a year is expected from Goose with coal production starting in the middle of 2025 as I mentioned.

Operator

And then if we wave our arms a little bit, we'll go soon. If Gramalote is economic, that can add another 200,000 ounces of gold production potentially to the company subject to our study coming on being positive. So there's 600,000 ounces of growth from existing assets in addition to that robust exploration programs. Also our investment in junior companies will continue. So when we look to the future, it's very bright.

Operator

We're in externally strong financial position, paying an industry leading dividend on a yield basis. So we're excited about where we're going. And this is transitional year and yes, it's been some challenges in the Q1. We've met them, but seems to get lost in the shuffle here, but we performed yet again another quarter of strong financial results. This will be we are on track for our 9th year of delivered on our guidance, a little bit of production and our costs.

Operator

So with that, I am going to hand it over to Mike Sibin to give you a note view of the quarters and the

Speaker 1

financial review. Mike? Thanks, Todd. So I'll just jump into the operations. Firstly, Fekola, we produced just under 120,000 ounces of gold, which is in line with our guidance.

Speaker 1

Cash operating costs were well below our annual guidance range and all in sustaining costs of $14.36

Operator

per ounce

Speaker 1

of gold sold. It was at the low end of our guidance range. So also as a reminder, I think Fekola 2024, Fekola is a transitional year where we'd estimated that gold production would be lower than prior years and we have a lot of capital programs ongoing this year that are expected to complete in the year. And for 2025, this trend should reverse and 2025 oil production should increase and all in sustaining costs drop as capital programs get completed. Moving to Masbate.

Speaker 1

We had another excellent quarter of Masbate with mine producing almost 48,000 ounces of coal. Cash operating costs and all in sustaining costs were both well below our annual guidance ranges. Jewel lower fuel prices definitely contributing there at all operations, I think, for full of Masbate and in Chikoto. So Masbate, this slight very strong operating cash flow and we anticipate continuing to renew the year at today's gold prices. Finally, last but not least, at Otjikoto, we continued our momentum from a very strong Q4 in 2023.

Speaker 1

In the Q1 'twenty four, Otjikoto produced just over 45,000 ounces of gold. And like Masbate, both cash operating costs and all in sustaining costs were well below our annual guidance ranges. I'd say for Ojekota as well, we also benefited from a weaker Namibian dollars as well as higher production, lower fuel prices, we also had a weaker Namibian dollar which helped our cost to dollar terms. And also, we look forward to continue to advance the antelope discovery, which

Operator

we think has the potential

Speaker 1

to expand underground mining in Otjikoto perhaps into the 2030s. And we remain at the end

Speaker 2

of Q1, we remain in

Speaker 1

a very strong financial position. Current gold prices of course are only helping that, enhancing that and I think you can see those going forward. And as we note in January, we completed a $500,000,000 prepayment of gold with some of our bank syndicate members which fully fortified our balance sheet for the growth projects we want to accomplish in the near term and the medium term. And at the end of March, we had cash balance of $568,000,000 and nothing going on our revolver. So got a $700,000,000 facility available in that revolver.

Speaker 1

And we do anticipate refreshing that facility a bit later in the year. Based on our existing Goose budget that we announced in January, we've just over US400 million dollars left to bring Goose into production. And now that the winter hydro campaign has finished successfully, you'll hear more about that from Bill and we brought materials to site. And we have announced our decision to push back the Goose shut schedule as clients set by 3 months. We've undertaken as well as updated our cost to complete estimates for Goose by the end of June, I think the end of Q2, and we'll come out with those.

Speaker 1

But I can say that based on where we are today, we're very confident that we have the resources to not only complete this, but we also have the liquidity for potential organic growth projects in Namibia and Colombia, as well as continue to pay an industry leading dividend. So not only are we very comfortable with the financial situation, but it's also expected to be further strengthened in 'twenty five when the Goose capital is completed, consolidated gold production is expected to increase and all in sustaining cost of growth capital is expected to decrease. So high level summary, it's Q1. It was a good quarter, I would say, operating wise. And so with that, I think I will pass the call over to Bill for discussion on the Goose construction progress.

Speaker 2

Yes. Thanks, Mike. So I'll quickly touch on the Goose construction progress. I think we signaled very clearly that this was on a critical path to have success. And I'll tell you that I think the team did a phenomenal job bringing everything down.

Speaker 2

Despite high snow year and El Nino year, which was a bit of an anomaly, we were able to bring everything down from the marine landing area. This significantly derisks the remaining construction schedule and now we have everything that we need basically to build out the Goose project on-site. And just to remind everybody out of what we brought down, some of the key things that we brought down almost 19,000,000 liters of fuel, all of the modular units necessary to expand the camp to 500, which will allow us to get through construction, all of the stuff necessary to build the mill, all the steel and rebar, all the cement necessary, more than 3,000 bags, more than 4,000 bags actually. And one of the key things is all the reagents necessary to commission and operate the mill starting in 2025. So at the end of the day, as Mike said and Clyde alluded to, the mill itself is ready would be ready to go in Q1 2025.

Speaker 2

The construction team has done a great job of coming in and grabbing all this project and making a B2 type construction. The mill construction does remain on schedule. We had previously told the market that we are in fact ahead in some areas. Installation of the ball mill is progressing ahead of schedule. All the shell sections are in, the discharge heads, trunnions, pinions and bearings have all been completed.

Speaker 2

What really is slightly behind schedule is the open pit and underground and that really relates to the commissioning of the equipment and getting some of the people in during some of these heavy snow days. The current schedule indicates that approximately 3 months must be added and that really is to allow us to mine out some of the open pit and underground to allow us to get the appropriate amount of material on the stockpile to start the mill. So, with that, we are talking about 1st gold pour in Q2 2025. And that of course does reduce what we're going to produce in 2025. But I do want to indicate that it's not like those ounces are lost.

Speaker 2

They've just been pushed into 2026. So instead of having the 1st 5 years at plus 300,000, now we're talking the 1st 5 years at 310 plus. So overall, I guess, I'd say, I remain very confident in the path forward for Goose. And this is absolutely a world class operation that moving in production in Q2 2025. With that, I will

Operator

turn it back to you Clyde for questions. Can you talk a little bit about the trade offs going forward about capital that

Speaker 2

Yes. And there were some questions on whether or not we were going to be on budget given the new schedule. And I'd say we're working through that right now, but just because the road just closed, I can't tell you exactly where we're at. There's going to be some over, there are going to be some unders. But remember, right now, the 2024, 2025 winter ice road season is opening.

Speaker 2

So, what we're seeing is we're actually anything which would be kind of in that critical spares for 2024, 2025, we're ordering right now. So we'll be able to give you actual costs for what our carrying costs are going to be. But also, we've done a good job kind of looking at what a B2 gold design would look like. Certainly, John Rajal has looked at reagent consumption. Can we bring those down?

Speaker 2

The answer is yes. We've talked about the actual fuel cost that Mike alluded to already that some of the other operations are under cost. So, we're seeing how that impacts the Goose projects. We're working with vendors to see if they can carry stock as opposed to us ordering it and putting it into our critical spare inventory. Probably one of the big ones is the labor.

Speaker 2

So, labor obviously is a function of what has to be done. Given the fact that we're actually ahead of construction in some areas, we feel like we can certainly flatten those costs a little bit to make sure that we remain materially on budget.

Operator

I think the operator will now move to Q and A.

Speaker 3

Certainly. We will now begin the analyst question and answer session. The first question comes from Ovais Habib with Scotiabank. Please go ahead.

Speaker 4

Hi, Clive and B2Bour team. Congrats on completing a successful ice road season at Goose. Just a couple of questions from me, Clive. Number 1, starting off with Mali, in regards to the 2023 Mali mining code, obviously, B2 is having discussions with Mali, Barrick is having their own discussions with Mali on Lulu and Resroot is likely having discussions as well. So the question is, are you all asking for the same terms or are the terms specific to each of your projects?

Speaker 4

I'm just trying to figure out how is Mali looking to form a new kind of set of terms for the 2023 Mining Corp?

Operator

Sure. Good question, Orest. Everyone is in a slightly different situation because of the timeframe in terms of some of the mining conventions that were signed with the government. So we are, as you know, the government has acknowledged sometime and again that Fekola is grandfathered by law. But in the 2012 mining code, we have a 3,000 sat mining license till 2,040.

Operator

It is 2044. 2044. 2044. So that's very positive for our point of view. And now the conversations with the government are really around the implementation of the 'twenty three code, which of course the regional opportunity, they're all under an exploration license.

Operator

So we need to move to an exploitation license. So the regional will be subject to the 2023 planning code, yet we feel confident that we've got some pretty robust economics there. And I'm looking forward to the final agreement. I can't speak for Barrick or anybody else, but everyone has their own different particular license and issues and Barrick will and others are going to be down there as we will be over the next while to try to finalize the government. But we are in a different situation.

Operator

So we're the only company in Maui that I know of that has something that can quickly turn into more revenue for the company and for our partner to cover the MAUI by trucking the ore. And that could be a significant amount of revenue when you look at what we're projecting now, when we look at our numbers, the regional production is very can be very important to the future of Fekola. Of course, checking the ore down, the roads are built, we're ready to go. So we're in a different situation, except Barrick and Marissa speak for themselves. But we're confident with where we sit and we definitely have a good relationship with the government.

Operator

We're concerned about the 23 code, I guess in terms of future production for Mali. Mali has been despite some of the issues and rumors and stuff that we see out there, Mali has been a very good country to invest in gold mining when you look at Randgold and now Barricka and ourselves and others. So the issue there is the government wants to take too big a piece of the pie in 2023. The big question is who's going to go on a sport for the next Fekola in Mali. If the economic terms are much less attractive than they have been.

Operator

Just a reminder, we built the Fekola mine for over US500 $1,000,000 100 percent of our risk. To date, the development of the Mali has realized a little over 50% of the economic benefit of the Fekola mine with no risk. I think that's the deal any business would take all day every day if someone wants to spend all the risk capital, we get 50% plus of the upside. So I worry that the new code is going to be is going to change those economics. So it doesn't speak to what we're doing, but it speaks to because of our fairly robust economics in the trucking opportunity, but it does speak to the future of mining in Mali.

Operator

And I hope the government over time will consider whether they want to become one of the less attractive countries to invest in the grow mining as opposed to be one of the ones that's been attractive. So anyway, but our discussions are ongoing and they've been positive because I think we're on the same page with the government, which is to support Fekola going forward and also with the beach and opportunity.

Speaker 4

Thanks for the color on that, Duaiv. And just a follow-up on that. In terms of assuming the negotiations goes well and all the terms are agreed upon, how fast can you get the exploitation permit once everything is set in motion?

Operator

Well, if we reach agreement in the near term, which we're hoping to do, then the exploitation license apparently the government is interested in fast track and that could be better, hopefully, a few months potentially. And then we've got some basically some pre stripping to do, but we're pretty much ready to go. We de risk the project in the sense that we have built facilities, we built the roads, we're ready to go. So that could be a fairly quick opportunity. But that will be just shipping for

Speaker 1

3 months.

Operator

3 months of stripping and then we'll be in the order.

Speaker 5

Got it. Thanks for that.

Speaker 4

And then just switching gears to the project, as you mentioned, B2 is currently in the midst of an infill drill program in the underground component of Goose. I just wanted to understand and maybe this is a question for Bill or Rick as well. Is the purpose of the drill program to increase confidence in the ore body to include it into the mine plan kind of going into 2025? Or is there a worry about the geological model that was built by the previous owners? Maybe some color on that, please.

Speaker 6

Yes, Avesh, not at all. The info that we did that we've done to date, we did quite a bit last year, has certainly corroborated or supported the Sabina model. The infill is nearly to get the indicated resources to our standard and that also improves or helps improve the design that the engineers need to do. But there is no question about the model. It's solid.

Speaker 6

We understand what controls are and the results we've got pretty much concerned our model.

Speaker 4

Thanks for that, Vic. And I mean in terms of has the drilling commenced and what are the results have been so far? Any color on that?

Speaker 6

Yes, we started drilling in April. We have 4 rigs turning. No results yet from the drilling this year, but we expect them to be pretty much in line with what we saw last year.

Speaker 4

Okay. Thanks for that. And just on remaining Tagus, my last question would be regarding the CapEx update expected in June, Bill, what are you worried about that could take CapEx higher or any opportunities to maintain or even reduce the current CapEx estimate?

Speaker 2

Well, I went through some of them already for sure. Like I said, it's tough to say some of things because we're right now in the process of ordering for 2024, 2025. So those RFPs are out. We're in the process of shutting down the winter roads. We're in the process of evaluating that.

Speaker 2

But if you look at, like I said, things like reagents that we think that's going to be an under, for sure. I think some of the critical spares, so of the things that we can hold off of site, I think those are going to be unders. Remember, in theory, you would have one more shipping season. So anything you didn't wouldn't have to fly in, that could be an under. But the counter also holds true that if there's something critical we need for the mill that you might fly it in this year, that might be an over, right?

Speaker 2

Or maybe on the mining side, because we didn't commission the trucks as quickly as we thought, a lot of those operating costs for those trucks are going to be an under for this point up to this point, which is not to say it's not going to catch up. So that's why I can't really tell you exactly, but I certainly feel very good that we are currently on budget or under budget at this time.

Speaker 4

Okay. Thanks for that, Will. And Clive, that's it for me. Thanks for taking my questions.

Operator

Thanks, Subash.

Speaker 3

The next question comes from Braav Rafiki with 8 Capital. Please go

Speaker 7

ahead. Thanks, operator. Good morning, Clive. And maybe a question for Mike. And I just want to ask sort of a follow-up or in a different way, the Goose CapEx question, because at the time we get the update in June, we're still sort of 6, 9 months ahead of first gold production.

Speaker 7

Will all of the outstanding spending be committed or locked in at that time? Or I'm just kind of trying to get a sense of what state of finalization will be in when we get that June update?

Speaker 1

Can you clarify what you mean by locked in? Yes,

Speaker 7

basically, yes, thanks for that. Just the amount of committed CapEx, right, in the context of total by the time we get to June?

Operator

How much should we spend so far, Dimitos?

Speaker 1

We've spent like so far in cash terms for the we've spent $840,000,000 at project. We haven't spent all that, but project today, that's 8 $40,000,000 And there's probably another $60,000,000 plus in table. So total cost $900,000,000 in that ballpark. And we've got to compare that to the total that we're talking about for construction of $1,050,000,000 pre development $200,000,000 and working capital another $205,000,000 so $14.50 basically.

Operator

So we've seen that we derisked it. The amount has been spent, good question, but the amount has been sent so far, I think they've been ordered. I do suggest we de risk it by the amount we expect to order.

Speaker 2

Yes, I think a lot of

Speaker 1

the capital is being ordered, certainly like Bill said, I can't give you the number right now. But if you're saying what, at the end of the journal, we're saying it's fully committed. But everything that all the key stuff that we thought we needed has not only been ordered, it was delivered to the MLA and it's now being driven up the road for construction purposes. So as you get into the latter part of this build, a lot of the costs are going to be us building up the worth of capital, right, that we need to labor, a lot of labor going in there and fuel and all of consumables as you move forward, but a lot of those are ordered and brought up the ice road. But I mean, we'll certainly focus on that.

Speaker 1

I guess, we'll try to give you some guidance on that when we get a new cost estimate, not only price that cost.

Speaker 7

Yes, okay, got you. That's exactly what I was

Speaker 1

looking for. Thanks.

Speaker 7

Clive, Finland, can you talk a little bit about your role in the country given some of the decisions out there that we're waiting for? Should we think about your approach as sort of more or less or different than what we're seeing now and just sort of how you're thinking about that country as a jurisdiction when you approach exploration and future potential?

Operator

Yes, we've been out for a while there and we had some exploration success for sure. We didn't get out of the park and find millions of ounces of gold. It doesn't mean there's a potential for that. Obviously, our ground is very important to Rupert. It's the ultimate development of an open pit and also because of the 600,000 ounces or more potential that we see there.

Operator

But I think it's an elegant deal and we are happy to be shareholders of improvement in the closing of the soon to be closing of that deal, allows us to recoup our expression expenditures today potentially by owning better shares, but also be part of the future. That's a very good deposit. Someone's going to build it at the end of the day. So we thought it was a really good way to stay involved in the sense of true share ownership and on the upside potential, but also focus our exploration on some of the things we consider to be higher priorities such as Goose. And as we get back into trucking ore Fekola as we start out, we will be looking at more exploration there as well.

Operator

Great potential of this there, the regional not only for additional oxide heavily weathered saprolite material but also in sulfides as well. So that's the rationale. I think it was a very good deal, good for Rupert, good for ourselves and hopefully good for our joint venture partner as well.

Speaker 3

The next question comes from Anita Soni with CIBC World Markets.

Speaker 8

So I just wanted to understand the delay and specifically what's the pinch point? I'm assuming it's a tailings dam. And I just want to sort of understand what the mechanics are there in terms of why the 3 months was added?

Speaker 2

Yes, well, kind of, but not 100%. It's the combination of putting ore on the pad and completing the echo pit, right? So basically, we've got 10 trucks on-site. When we took over and were commissioning the trucks, we identified that we didn't have some of the personnel resources that were appropriate for the scope and they couldn't they didn't get the trucks commissioned on time and there were some issues there. So basically, we fell behind mining in both ECO and Umwell pit.

Speaker 2

And so like I said, a combination of the 2. I can do 1 or the other and still make the schedule. And I can put a wire on the pad or have no tailings or I can do echo pit and have no ore. But I couldn't do both given the schedule I have got now. So that's the delay.

Speaker 8

Okay. Sorry. And is the echo pit the one that's where the tailings at, like where the tailings going

Speaker 3

to be deposited? Is that what's happening?

Speaker 2

That's correct.

Speaker 8

Okay. And then long term, like when does the echo pit tap out on capacity? Do you build another tailings dam after them?

Speaker 2

Absolutely, we do. We start, It's going to go from well and then I think it goes into LAMA eventually.

Speaker 8

Okay. And so just in terms of the truck on-site, you said you had 10 originally. How many do you need to get to get to the full production rate?

Speaker 2

I think it's I might have to get back to you. I think it's 15% is where we ultimately get. But I can't remember exactly. If I'm wrong, I'll come back to you.

Speaker 8

Sure. And the other question that I would have is the ultimate mining capacity of the entire fleet at 15.

Speaker 2

Yes, I don't have that number right in

Speaker 5

front of me. Sorry.

Speaker 2

I'll give you

Speaker 8

some people. The stumpers. Okay. The other question that I had in terms of next year, and I know that Ralph has sort of asked a little bit about this, but I'm just curious about, if you've got 3 months that you didn't anticipate, would there not be standby costs in terms of like G and A and people running the site that would be additional and what would be the sort of run rate on that? I would assume somewhere in the range of about $5,000,000 to $10,000,000 a I guess, but just that would be what I know from comps in Northern Ontario, might be a little bit more costly up there.

Speaker 2

Yes. The answer is that if we didn't manage it, if we just let everything run wild, then you could see those kind of numbers. That's what we said. We're trying to manage that down by making sure that the appropriate staffing is on-site and making sure that the appropriate fuel consumption, all this stuff. Basically, we're just trying to take the construction curve and flatten it out by 3 months.

Speaker 8

Okay. And then just another thing that I would is, as you get closer to construction, what would you think outside obviously of the critical path items that you've addressed at this point? Is there anything else that we should be thinking about like enclosing truck shops and things like that? Is that something that you're also watching? Like what else keeps you up at night?

Operator

Well, a lot of stuff keeps

Speaker 2

me up at night. But let's start with

Speaker 1

no?

Speaker 2

Let's start with fuel tank construction, right? As you know, we've got to bring in almost a little bit more than 80,000,000 liters of fuel at both the MLA and at site, those tanks have to be built. In particular, the one at the MLA because in September, that boat is going to arrive. We have already paid for it. And so if there is no tankage there, we have got a problem.

Speaker 2

So, that's probably the next thing on the critical path. Giving us additional kind of 3 month buffer, and I don't ever tell the construction guys that there was a 3 month buffer now because they're still heading towards the original schedule. But if you look at like the underground stuff that really gives us some opportunities to look at various options and that's what we are going through right now is how do we really optimize it given this kind of bit of reprieve from an operational perspective. But everything else is going quite well.

Speaker 8

Okay. And last final question, are

Speaker 3

you guys going to do the

Speaker 8

site tour again in September so we can recalibrate ourselves?

Operator

Yes.

Speaker 8

Okay. All right. Thanks. Yes. Thank you very much for taking my questions.

Speaker 1

Okay. Thank you.

Speaker 3

The next question comes from Don DeMarco with National Bank Financial. Please go

Speaker 5

ahead. Thank you, operator, and good morning, Clive and team. Congrats on a strong start to the year. So, I'll start off with Goose. So, we've seen updates on budget and schedule.

Speaker 5

Do you plan to release any updates on, say, OpEx after the mines in production? I think the view is that AISC will increase versus the technical report, but do you have any color on maybe the magnitude of the increase or a more precise estimate at this point?

Speaker 2

So, the answer is yes. As you know, one of the things that we've kind of been waiting on is to update the resource model. And so when that comes out, we certainly want to put together a whole package, I think, and update it.

Speaker 5

Okay. And when do you think that would be?

Speaker 1

We expect to update the resource model into AIF. So that data resource will come on to AIF next year. So we'll talk about some quick follow on that update.

Speaker 5

Okay, great. Maybe shifting over to Fekola, we saw that there was a tech report filed in March and 2026 was highlighted an opportunity for the underground. When do you expect to have to realize some of the potential of the underground or do the necessary conversion to reserves that might be needed?

Speaker 2

Yes. So we're going to reach the pace at the end of this year. And we fully plan to be in mining operationally in kind of late Q1, Q2 next year.

Speaker 5

Okay.

Operator

The regional drilling continues and once as we said when we get the when we succeed hopefully getting the expectation permit then we would accelerate some more drilling of the regional area to further remember the technical report is a regulatory requirement that do not include any inferred. And as you guys know, not all inferred is traded equally. We have a great track record there and elsewhere in turning inferred into indicated. So there'll be ongoing work there plus additional step out drilling numerous zones up and down the belt to test the ultimate potential ride life of the trucking award.

Speaker 5

Got it. Okay. Thanks. I think my other question has been answered. That's all for me.

Speaker 5

Good luck on the rest of the build.

Speaker 3

This concludes the question.

Operator

Thank you all for your time and we look forward to continuing to update you on our progress. Thanks for that.

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Earnings Conference Call
Deluxe Q1 2024
00:00 / 00:00
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