Kinross Gold Corporation (NYSE:KGC) Q4 2022 Earnings Call Transcript

Kinross Gold Corporation (NYSE:KGC) Q4 2022 Earnings Call Transcript February 16, 2023

Operator: Good morning, my name is Devin and I will be your conference operator today. At this time, I would like to welcome everyone to the Kinross Gold Fourth Quarter 2022 Results Conference Call and Webcast. All lines have been placed on mute to prevent any background noise. After the speakers’ remarks, there will be a question-and-answer session. Thank you for your patience. I’ll now turn the call over to Chris Lichtenheldt, Vice President of Investor Relations, you may begin the conference.

Chris Lichtenheldt: Thank you and good morning. With us today, we have Paul Rollinson, President and CEO; and from the Kinross Senior leadership team, Andrew Freeborough, Claude Schimper, Ned Jalil, and Geoff Gold. For a complete discussion of the risks and uncertainties, which may lead to actual results differing from estimates contained in our forward-looking information, please refer to page 3 of this presentation, our news release dated February 15th, 2023, the MD&A for the period ended December 31, 2022, and our most recently filed AIF, all of which are available on our website. I will now turn the call over to Paul.

Paul Rollinson: Thanks, Chris and thank you all for joining us. Most of you will be aware that we hosted a conference call earlier this week to provide an update on Great Bear. If you haven’t had the opportunity to listen to our presentation, we encourage you to access the replay through our website. Today, we will focus on our fourth quarter and full year results and our outlook going forward. We faced a number of headwinds in 2022, most significantly related to geopolitical events and substantial cost inflation. I’m proud of how we navigated the challenges and believe we are well-positioned going forward. I believe we have the right team in place to meet our commitments and deliver strong results from our portfolio. Looking at the fourth quarter specifically, we had our strongest quarter of the year in terms of production and cash flow.

We made progress across the portfolio, producing just under 600,000 ounces in the quarter and approximately two million ounces in 2022. Paracatu had an exceptional quarter, Tasiast had record production and grades, and La Coipa continue to improve reaching our targeted production levels in the fourth quarter. In today’s environment, our business is well-positioned to continue generating significant cash flow going forward. Last year through our regular dividend and our enhanced share buyback program, we returned approximately $455 million to shareholders and on a cumulative basis, we have repurchased approximately 100 million shares since we launched our buyback program in the second half of 2021. This year, we will continue to pay our quarterly dividend of $0.03 per share and continue with our flexible buyback program.

Moving to our outlook. Andrea will elaborate on some of the detail, but we are reaffirming our stable production outlook of 2.1 million ounces in 2023 and 2024 followed by two million ounces in 2025. With our portfolio anchored by Paracatu and Tasiast and further complemented by La Coipa, the Tasiast 24K project, Manh Choh coming online next year, we are well-positioned to maintain our production. Costs are expected be slightly higher in 2023 relative to last year, mainly as we have a full year with elevated input costs, that we experienced in the second half of 2022. Looking longer term, our portfolio maintains excellent optionality. In particular, we’ll continue to evaluate opportunities for expansion in Nevada and remain excited about our underground potential.

Before turning it over to Andrea, I want to comment on ESG. We are proud of our consistently strong performance in this area. In 2022, we were awarded the Alaska Miners Association Environmental Stewardship Award for our abandoned mine restoration initiative. We advanced our commitment to diversity, equity and inclusion across the company. We allocated financial aid, humanitarian aid, other contributions in Mauritania to help the country manage the impact of extreme weather events, and we invest our green energy targets with the construction of the Tasiast solar plant, which is expected to come online in the second half of this year. With that, I will now turn the call over to Andrea.

Andrea Freeborough: Thanks, Paul. This morning, I’ll discuss financial highlights from the quarter, provide an overview of our balance sheet and capital allocation program, and comment on our guidance and outlooks. As Paul noted, we finished the year with production of nearly 2 million ounces. In the fourth quarter, we produced 596,000 ounces which was up by 13% over Q3 and was the highest production quarter for the year, as our operations continued to show improvement. Our Q4 cost of sales was $848 per ounce, which is down from the previous quarter and represented the lowest cost quarter of the year. For the full year, our production cost of sales was $937 per ounce. All-in sustaining cost was $1,236 per ounce in the fourth quarter, a decrease from the third quarter, driven primarily by the increase in production.

For the full year, our all-in sustaining costs, was $1,271 per ounce. Our fourth quarter adjusted Operating cash flow was $496 million, up from $259 million in the third quarter on higher production and lower costs. For the full year, adjusted operating cash flow was over $1.2 billion. Free cash flow in the quarter was $158 million and with $238 million for the full year. CapEx was $317 million in Q4. Full year CapEx of $764 million dollars was in line with our revised guidance. Turning to the balance sheet. Our financial position is strong and is expected to remain strong this year and beyond. We ended the year with $418 million of cash and approximately $1.8 billion of total liquidity. Our trailing 12 months net-debt-to-EBITDA ratio was relatively stable as of year end at 1.7 times.

Our net debt maturity is in 2024, when we have $500 million of senior notes coming due. We expect to refinance these notes sometime this year. Turning now to our capital return program. We purchased $240 million of shares in the fourth quarter at a total of $300 million in 2022, completing our 2022 buyback commitment. We’ve effectively now repurchase the shares issued in the Great Bear transaction and add some. Through dividends and share repurchases, we returned $455 million to shareholders in 2022. As Paul noted, this year we will continue paying our annual dividend of $0.12 per share and continue executing our enhanced buyback program, which now becomes dynamic and based on cash flow generation. As a reminder, we plan to allocate 75% of excess free cash to share repurchases in 2023 and 2024.

We will evaluate the buyback quarterly based on cash flow generation as a reminder, we also have guardrails in place to protect our balance sheet in a downside scenario, for example, the buyback will be paused in the event their leverage ratio increases above 1.7 times net debt to EBITDA. For next year, we’re expecting production in the range of 2.1 million ounces, cash cost of $970 per ounce, and all-in-sustaining costs of $1,320 per ounce. Capital expenditures are expected to be in the range of $1 billion roughly evenly between sustaining and non-sustaining items. For 2024 and 2025, we would expect cash costs and all-in-sustaining costs to be in a similar range. With respect to CapEx in these years, we expect a decline each year based on currently approved projects.

However, in order to sustain our 2 million ounce production profile beyond 2025, we expect to approve additional capital projects, which would likely maintain CapEx around the $1 billion mark. Q1 of this year is expected to be a particularly low production quarter, as a result of seasonality of Paracatu and the US heap leach operations as well as planned operational shutdowns at Tasiast and La Coipa, Claude will elaborate on the operational shutdown. Cash flow is also expected to be lower in the first quarter because of lower production as well as timing of certain cash flows, including related tax payments in Brazil and interest payments. I’ll now turn the call over to Claude.

Claude Schimper: Thank you, Andrea. This morning, I’ll provide a brief update on our operations. We saw a strong performance out of our two cornerstone assets at Tasiast and Paracatu. Tasiast has continued to ramp up achieving its highest production quarter yet and Paracatu achieving its second highest producing quarter on record. These two assets provide over half of our answers company-wide, and we are confident in their ability to hit production targets and provide significant cash flow in 2023 anchoring our portfolio. The rest of our portfolio is also performing well, with a combination of our four other mines hitting the highest production of the year in Q4, and achieving a 35% increase in production in the second half when compared to the first half, primarily due to the ramp-up at La Coipa and the seasonality of the US heap leach.

Q4 saw continued strong performance out of the US assets, with the highest production of the year, and a 26% increase in production in the second half of the year compared to the first. Starting with Fort Knox, production increased further last quarter driven by record tonnes and ounces tacked on to the leach in 2022. With 50 million tonnes and over 300,000 ounces stacked on the pad. At Bald Mountain, we continue to see high production levels in the fourth quarter driven by higher grades stacked earlier in the year, resulting in a 37% increase in production during the second half of the year. Round Mountain maintain high production levels throughout the second half of the year and saw an increase in grades stacked which we expect to contribute to the overall increase in production in 2023.

Paracatu had exceptional results in the fourth quarter, achieving its second highest production quarter on record, producing a 181,000 ounces for the quarter and 577,000 ounces for the year. We continued to see outperformance on both grades and recoveries at Paracatu, a strong performance in both the mine and the mill. This cornerstone asset continues to deliver high production levels at our lowest cash costs with the fourth quarter providing the lowest cash costs of the year at $711 an ounce. At Tasiast, the operation delivered a quarterly record production of 143,000 ounces, driven by record processing grade of 3.2 grams a tonne and achieves a full year production of 539,000 ounces. Let me expand a bit on what is going on for 2023, and why we expect that we’re going to hit our 610,000 ounce guidance this year at Tasiast.

The clock is currently undergoing, one of the plant shutdowns associated with a 24,000 expansion project. As such, throughput in the first quarter of this year is expected to average around 17,000 tonnes a day and based on the schedule for shutdowns and ramp-ups, we are targeting average throughput between 20,000 tonnes and 21,000 tonnes a day in 2023 to produce our plan 610,000 ounces. We have already accounted for the 24,000 expansion shutdowns and the time to ramp-up throughput in our guidance and expect to achieve a 610,000 ounces on the back of strong grade and ore supply from both stockpiles and the pit in 2023. We achieved another monthly production record at Tasiast in January with 54,000 ounces produced and have already hit our February production target prior to our shutdown.

Tasiast 24,000 construction is progressing well and the project remains on schedule to initially reach throughput of 24,000 tons a day by mid-2023, followed by a ramp-up period before sustaining that level At La Coipa, we saw substantial progress in the fourth quarter with production of 68,000 ounces. Throughput continues to improve an average over 13,000 tonnes a day for the last two weeks of December. However, La Coipa has a plant most shutdown in February for maintenance works, aimed at increasing reliability. We are pleased with our progress at La Coipa and expect to produce 240,000 ounces in 2023, which with plant shutdowns is based on more achieving average throughput of between 12,000 tonnes and 13,000 tonnes a day. I’ll now pass the call over to Ned for an update on our projects and exploration.

Ned Jalil: Thanks, Claude. Today, I’m going to focus my comments on our reserve and resource update Round Mountain underground and then show projects update before providing an overview of our exploration initiatives. We have kept our reserve pricing at $1,200 for the past eight years. However, we have seen gold prices rise several $100 over the past few years and we believe that 1,400 reserve price better reflects the current environment and is still sufficiently conservative getting where gold prices are today. It is important to note, we are not making changes to our mine plans as compared to last year on the back of this change and reserve price. Looking at our total mineral inventory, year-over-year, excluding our divestments, our combined reserves and resources were stable, as the significant additions at Great Bear offset depletion.

Moving to Round Mountain. We are focused on progressing our underground opportunities while continuing to mine in Phase W1 and Phase W2 open pit. For Phase X underground, we have started to develop our trans-portal area in the bottom of the pit and we expect to start underground development of the exploration decline in the first half of this year. At Gold Hill, we are continuing exploration drilling and advancing permitting, targeting start with an exploration drift next year. Our exploration results of both Phase X and Gold Hill over the last quarter continue to reaffirm our decision to progress underground opportunities. We are excited about the potential for higher margin underground production as I will highlight shortly. We’re also continuing to evaluate and optimize the open pit pushbacks, Phases S and W3, which remain in reserves and are economic.

We will study the potential mining of these pushbacks with sustained improvements in macroeconomic conditions. Construction at Manh Choh is progressing on schedule and on budget. We remain on track for first production in the second half of 2024. The 2022 early works construction program was completed on budget and no modifications to process Manh Choh or at Fort Knox are underway. Permitting is progressing well and a public comment period is expected to open in 2023 regarding the company’s application. 2022 was a successful year for our exploration team. Beyond the exploration results at Great Bear that we covered in detail on Monday, we also had an active year with exciting results from our brownfields and greenfields portfolios, and I would like to spend a few minutes speaking about these.

We drilled an additional 190 kilometers on the brownfield and greenfield projects beyond the 225 kilometers drilled at Great Bear for a total of 334 kilometers of exploration drilling in 2022. Our brownfields team identified and expanded on exciting opportunities across our operating assets as you will have seen in our press release. In Alaska, drilling at Fort Knox provided high-grade mineralization extends 300 meters outside the current life of mine pit along the . At Paracatu, we have begun a brownfield exploration program, testing advanced targets with known mineralization and within trucking distance of the mill. We are particularly excited about the exploration results at our underground targets in Nevada and our potential for resource expansion at Curlew.

Top under underground drilling at the Bald Mountain yielded one of our best holes of the year with 24 meters at 19 grams per tonne and also confirmed that our oxide mineralization extends known mineralization down pit. We will cover Round Mountain and Curlew in more detail on the next slides. From a greenfields perspective, we continue to focus on areas that have potential for high-grade gold mineralization in Canada, Nevada, and Finland. During 2022, we completed approximately 49,000 meters of drilling on our projects, which returned encouraging results to follow-up on this year. At Curlew, exploration drilling resulted in an increase in resources with just under 400,000 ounces of measured and indicated and just over 500,000 ounces of inferred, both at around six grams per tonne.

We continue to intersect high-grade mineralization, confirming continuity and extensions to previously modeled veins resulting in the discovery of multiple new veins. With the access from the exploration drift completed in 2022, we expect to continue to expand the resource through our 2023 drilling campaign. As discussed earlier, the exploration drilling at Round Mountain continues to reinforce our decision to focus on underground opportunities at Round Mountain. Drilling over the last quarter confirmed the continuity of Phase X underground, with continued results showing wider mineralization in the 4 to 6 grams per tonne range. And then Gold Hill, our drilling extended two major vein zones and intercepted several new veins, reinforcing our view of this as a higher grade opportunity with a narrower width than Phase X, but still clearly sufficient widths for mechanized mining.

As discussed last quarter, the combination of the higher productivity 4 to 6 grams per tonne mineralization at Phase X and narrower high-grade mineralization at the Gold Hill is an exciting opportunity that we will continue to pursue. We are looking forward to getting underground at both targets to better explore the down-dip extension of the mineralization. Now, I will turn over the call back to Paul.

Paul Rollinson: Thanks, Ned. In closing, reflecting on 2022, we face several challenges and significant change. We have now addressed those challenges. I’m confident we are coming into 2023 well positioned to deliver on our commitments and produce strong results from our portfolio. Looking forward, we have a solid production base and attractive return of capital program supported by a strong balance sheet, a great pipeline of projects, and promising exploration opportunities. With that operator, I’d like to open up the line for Q&A.

Q&A Session

Operator: Our first question comes from Fahad Tariq with Credit Suisse.

Fahad Tariq: Hi. Good morning. Thanks for taking my question. Could you talk a little bit about the puts and takes on the underlying inflation that’s really driving the year-over-year increase in costs next year. I mean, production is increasing, some input costs presumably are coming down, diesel, et cetera. I’m just trying to get a better understand — I do appreciate it’s a full year of inflation. I’m just trying to get a sense of what is still driving from an input costs perspective, the higher overall cash costs and ASIC? Thanks.

Paul Rollinson : Yes. I hand off to Andrea here. I think as we narrow into it, one of the things we’ve said last year about inflation is while we see it everywhere in the world. We have actually felt that mostly in the US, in Nevada. And that’s a key part of our story here as to what’s happening in the US, but maybe Andrea you can elaborate.

Andrea Freeborough: Sure. Maybe I’ll cover some overall comments on the costs guidance and addressed that as part of my answer here. So we do have a bit of an obsolescent production in 2023. And that’s coming from Tasiast and La Coipa, which are lower costs. So there’s a bit of a tailwind, but that’s been offset by well generally the US, so we get provided country-by-country costs guidance in the appendix to our press release. Paul mentioned in his opening remarks and then just now that, if we’re factoring in inflation basically on reflecting where costs were in the back half of 2022. So we did see them increase throughout 2022. So we’ve got a full year impact of costs at that level and we’ve estimated that at around a 5% factor.

You commented on oil prices, we’ve used a $90 oil price in our cost guidance. So, we haven’t we haven’t factored in a benefit beyond basically $90 an ounce and there’s some sensitivities in the press release as well. But we continue to see oil prices, where they’ve been so far this year. So the increase is really in the US sights and as Paul said that’s where we saw the highest levels of inflation. And we also have lower production coming from the US in 2023 as compared to 2022. So we’ve got a bit of a denominator impact where cost per ounce goes up as a result. And then the last factor on costs in the US is the way our inventory accounting works on the heap leaches, we added cost to the heap leaches in 2022. And those were the inflated costs.

And so we see that coming through the P&L through our cash costs in 2023 of those items that have come off the pad.

Fahad Tariq: Okay, great. And maybe just as a quick follow-up, the one element that we didn’t really talk about is labor inflation. Can you just touch on that in the US is that something that is also a headwind?

Paul Rollinson: Yeah, like quickly, I can touch a little bit on that. So we are still seeing the demand is still high in Nevada, for example, in the US, and labor costs are still at high levels compared to early 20s.

Fahad Tariq: Okay, great. Thank you.

Operator: Our next question comes from Anita Soni with CIBC World Markets.

Anita Soni: Hi. Good morning, everyone. Thanks for taking my questions. So firstly, can I go to the reserve statement and try to understand what happened at Round Mountain and what the path forward is? I think one of my questions is you’re guiding to two million ounces for 2025. And I think that’s a new outlook, like, the first time you’re providing 2025 guidance. And I’m just trying to understand what Round Mountain looks like, because I think on the last Q3 call you were saying maybe 50 days, 100,000 ounces and I have a few things in my model coming off in 2025, which is a Round Mountain level of production. Bald Mountain you can see from the reserves, it’s probably not got much more than two years left at the stage in the reserves.

And then Tasiast been wondering how long these grades continue? So those are my three questions, sort of, trying to understand the reserve statements as they relate on Round and Bald and how that translates into 2025 production? And similarly on Tasiast, what the grades are going to do into 2025?

Paul Rollinson: Yeah. Thanks for your question. I’ll start with the with a number of points that could help you understand how 2025 looks like. So in terms of Tasiast, I think maybe you’re comparing back to the TR and what we’ve done is we’ve flattened the grades over the next several years to sustain a high production on Tasiast. So, in 2025 for example, Tasiast, we’re looking at a production of 420,000 to 450,000 ounces. When it comes to Round Mountain, again, I would like to say, on Round Mountain, as you know, we talked last time that we’ve placed Phase S and Phase W3 on hold as inflation was still rising. Gold prices were softening a little bit and we continue to evaluate these pushbacks, because they are part of our reserves.

We just need to understand, where the gold price is and understand, where inflation is, basically the macroeconomic condition confirmed that, do a little bit more of an optimization regarding the design of these pushbacks, and potentially at one point, they could be turned back on. But if I don’t consider Phase W3 or Phase S, we look at a production of approximately 70,000 ounces from Round Mountain prior to the start of the underground. So that’s on Round Mountain, focused on 2025 specifically. Again, that is, if we do not turn back Phase S or Phase W3. If we just finished W1 and W2, then start the underground.

Anita Soni: So, Can I stop you there and ask you then on the 2 million ounces that you’re saying in 2025, does that consider Phase S and Phase W3 coming in or does that exclude phase those two things?

Paul Rollinson: It excludes Phase S and W3.

Anita Soni: Okay.

Paul Rollinson: The 70,000 ounces only come from the production from W1 and W2 that we’re going to mined over the next two years.

Anita Soni: Okay. All right. Continue to default I guess?

Paul Rollinson: I think you asked about Bald Mountain, if I’m correct. So, we are — starting Bald, we’re looking at our production of 150,000 ounces to 170,000 ounces for Bald Mountain. And then, regarding main show maybe, it’s not in your model, but we see main show coming in and potentially 220,000 ounces to 240,000 ounces for main show.

Anita Soni: And that with the main show deposits specifically just itself?

Paul Rollinson: That’s with main show. And then Knox would be 250,000 to 280,000 ounces.

Anita Soni: 250,000 to 280,000 at Fort Knox. Okay. And so Nashville right now is kind of like at that rate is maybe two and a half years, right, on the reserve?

Paul Rollinson: More like it’s not the same production level. We were seeing it, you know the highest year of production is potentially going to be 2025 with the numbers I just told you, and then we see production in ’26 and ’27 approximately 150,000 ounces for those two years.

Anita Soni: Okay. All right. And then the other question that I had and I apologize to everyone. I was just wondering when you look at your buybacks? You said, you’re looking at 75% threshold on that. What gold prices — I mean, are you projecting to have any more buybacks this year?

Andrea Freeborough: Yeah, Anita, I mean obviously, it’s gold price dependent. So €“ but the gold prices we’ve seen so far this year, we would be expecting to be doing that buyback this year. Having said that, it sort of on a quarterly basis that will assess it and given the lower production quarter in Q1 and lower cash flow quarter. It’s probably more towards the second half of the year.

Anita Soni: Okay. Thank you all. I leave it there, and let someone else ask questions. Thanks.

Operator: Our next question comes from Lawson Winder with Bank of America Securities.

Lawson Winder: Great. Thank you, operator, and good morning Paul and team. Thanks for your comments today. Can I please ask about the 2024 CapEx guide? Would you be able to provide us a breakdown and sorry if I missed it between sustaining and growth in the $850 million? And then also give us an idea if €“ so if you’re going go to a billion dollars that that extra $150 million, is that going to be just growth or is there a sustaining element there too? And what are kind of some of the key projects that you might see driving that in 2024? Thanks.

Andrea Freeborough: So, I mean, I’ll start €“ I’ll start by saying that, 2023, we said it’s sort of route roughly split between sustaining and growth. We haven’t given €“ we haven’t given detail on where the CapEx is in 2024. But 50/50 is probably a good rule of thumb going forward. We’ve said that, $850 million is based on approved projects. So my comment about it potentially floating back up to a billion is just, looking to maintain that 2 million ounce production beyond 2025. So there’s likely room between the $850 million and a billion to if we end up coming back to some of the round mounts €“ some of the Round Mountain open pits. But TBD on that, we’ll report back on that as we go through the year here.

Lawson Winder: Yeah. Got it. And then so just €“ just to be clear on the €“ on the sustaining CapEx, it’s about $510 million that you’re expecting this year plus minus 5%, obviously, and then that that would drop to $425 half of the $850 million. What is it that’s driving that expected decline in 2024 sustaining CapEx cut?

Andrea Freeborough: I think that’s €“ that’s main show. It’s really driving that decrease.

Lawson Winder: Okay. Thanks, Andrea. That’s super helpful. I wanted to touch on Nevada as well to five questions in regards to inflation there and perhaps a little bit more color on the labor situation. So there’s a lot of robust mining operations that are growing and hiring, there’s a new operation are ramping up. And I was just curious, if you’re seeing any impact on turnover and whether or not you can maybe help quantify that and give us an idea of like, if you look at 2022, what would have been your turnover at your Nevada operations versus say 2019?

Claude Schimper: Yeah. It’s Claude here. Just very briefly, I think two elements there, one, our turnover is relatively stable, albeit that it’s higher than anywhere else in our organization. So we do have a lot more programs in terms of recruitment, and doing things a little differently. We’re going further afield in Nevada to recruit, but all of the operations as you know, there’s a lot of activity are under significant pressure to supply labor. On the flip side of that, as we move into these underground operations and different things, it’s a different skill set. And so we are doing some more a higher level of contracting work than we normally would. And that’s providing us with the stability to be able to execute these projects.

Lawson Winder: Okay, thanks for the comments. And if I can actually follow-up on the on the buyback question. Andrea, thanks for your comments on that. That it’s going to be driven by the gold price I mean, that’s abundantly clear. There was also like a net debt to EBIT element to that too. And if I just look at where your net debt to EBITDA was at the end of the year, I mean, it was kind of around the 1.7 times threshold, which is great and implies that I mean, you certainly have the room on the balance sheet to be active in the buyback and I was just curious how that factors in to your thinking, or if it still does?

Andrea Freeborough: Yes, that’s sort of one of our as we call them guardrails. So, as long as we’re, you know, as long as we don’t get above that 1.7, then we would be executing on a buyback. So, as you said, gold price dependent, but we wouldn’t expect that to be an issue at least in the second half of the year. But as I said, you know, Q1 is going to be a little bit lighter.

Lawson Winder: And is that €“ is that just a free cash flow calculation? Like are you guys just looking at expected free cash flow and if it’s not going to be positive, then you’re very unlikely to be active in the buyback?

Andrea Freeborough: Well, it’s free cash flow. You know, operating cash flow after the needs of the business, after interest and after dividend, so it’s kind of take our free cash flow and then after interest and dividend and that’s what we’re calling excess cash and then the 75% factors into that. So, you know, I mentioned that Q1, the lower production quarter, as well as, sort of seasonal cash outflows that we always have in Q1. So that’s why I’m kind of going into the second half of the year.

Lawson Winder: Super helpful. Thanks very much.

Operator: Our next question comes from Carey MacRury with Canaccord Genuity.

Carey MacRury: Hey, good morning, everyone. You mentioned Q1 being the low quarter from a production standpoint, just wondering how low should we be thinking and you know, is the quarterly profile going to sort of strengthen through the year kind of like it did in 2022?

Andrea Freeborough: I think Carey, if you look at Q1 is probably in the low 20%, the proportion of our total production guidance for the year. I don’t think it’s as pronounced one quarter-to-quarter, two, three, four. So I don’t think about the second half of the year being in kind of low like 52% ish. Its how I would €“ that’s how I would look at it.

Claude Schimper: Yes, I’ll comment. That it’s not as extreme as it was last year. The two major pieces being La Coipa and Tasiast off for February, and then we pick it up again. And that’s what’s driving the low first quarter. The rest of the quarters are pretty average across the board.

Carey MacRury: Okay. That’s awful. And then maybe just back on the CapEx decline over the next couple of years. You mentioned Round Mountain but other than Round Mountain, what other projects could slot in there before you get to Great Bear kicking off?

Paul Rollinson: Yes. Thank you very much for the question. So as you know, you know, we have the two corner assets at Tasiast and Paracatu and then we have La Coipa, Fort Knox, Round Mountain, Bald Mountain and main show coming on line with Fort Knox. So when we look at the future, we’re looking at an extension of La Coipa. We’re very excited on that. The potential there is great. We’re also looking at the Round Mountain Underground and like what you mentioned — that we mentioned earlier, the restart of the open pit pushbacks either Phase S or W3. We also have Curlew We have exciting exploration results from Curlew. So, the combination of these projects in addition to Great Bear will put us comfortable 2 million ounces towards the end of the decade.

Carey MacRury: Thanks. Maybe one last one. In terms of the US operations, it sounds like some of the higher costs this year really costs that were incurred last year, when we think about 2024, should we be assuming a similar level to the guidance this year, or should we assume that costs come down a little bit in 2024, or is it too soon to say?

Andrea Freeborough: No, I provided the comments that I would think about costs as kind of being similar to 2023 for 2024. We’ll see how we go here and get more precise as we get through 2023. But I would expect the US, in particular, Round Mountain to continue to have higher costs. We’ve talked about that on previous calls and we see those costs being similar to the second half of 2022 to higher in 2023. And so that’s likely to continue through 2024 as well.

Carey MacRury: Great. Thanks.

Operator: Our next question comes from Mike Parkin with Bank — sorry, National Bank Financial.

Mike Parkin: Thanks very much. Can you just — are we going to get a update on the Mike Parkin life of mine extension or is that something internally that you guys are only reviewing?

Paul Rollinson: Thanks very much, Mike, for the question. We’re at the early stage of the project, we actually have an internal project kicked off. So, in terms of drilling, we’re almost complete, but geological models are being developed and mine plans are being evaluated. Geotechnical work is advancing metallurgical testing is also advancing. Again, these are not necessarily new pushbacks for us. These are extensions of what we know so we’re familiar in the area. Nevertheless, we will go through our robust gate process of PA, PFS, FS and at the point where we see there’s material information to release we would do that in the future. Again, we do have solid production coming from La Coipa through 2025 and then 2026. So, we do have several years ahead of us before we turn on the La Coipa extension.

Claude Schimper: Necessarily just getting in front of the permitting and pushing the permitting for the stuff that we see around us.

Mike Parkin: Okay, so we probably aren’t looking for an update on that this year then?

Claude Schimper: No.

Mike Parkin: And then with the Curlew Basin like you’ve got just shy of 1 million ounces at a pretty good grade. Can you just walk us through high level what you’re kind of thinking of where you need to kind of get to on resources or if you’re already there to warrant kind of the kickoff of work to — for restart? And can you just remind us where asset sits with respect to permits like is it a very straightforward restart or is there a bit of a permit reinitiation phase that has to be conducted?

Paul Rollinson : Thanks for that, Mike. On Curlew, we’re really excited about the potential. It’s an amazing ore-body when it comes to Curlew to understand it very well. It keeps giving. I personally believe the answers that we just shared with you that’s the start of that deposit. And we are now going to kick off. I believe our schedule is April to kick off our pre-feasibility study on Curlew as a project. Again, permitting is the next step for us. And we’ll update you as we progress.

Mike Parkin: Okay. That’s it for me. Thanks so much.

Operator: Our next question comes from Anita Soni with CIBC World Markets.

Anita Soni : Hi. Thanks for taking some follow-ups. Just in terms of Paracatu, so has got good grades this quarter. As we go into 2024 and 2025, what should we expect from that asset?

Paul Rollinson : Yes. Thanks, Anita. In 2024, we — the grade does differ a little bit again, as we earn a different location in US based. There’s also a different phase that we’re in. But we see that coming back up 2025.

Anita Soni : So 2024 is down between backup in 2025, right?

Paul Rollinson : Yes. So we expect the Paracatu is up just over 500,000 ounces produced in 2024. But in 2025, it comes back to the same level as what we were experiencing last year and this year.

Anita Soni : Okay. And then similarly, Tasiast is also good grades in the quarter. So what should we be looking for in terms of grades between 2023 and 2024?

Paul Rollinson : Again, we’ve been able to during this significant work on the plant, we’ve been able to adjust stockpiles. So we’re balancing the feed to maintain the — as I mentioned earlier on the call, 610 target for this year and then over 600 again for next year. We have as Ned alluded to smoothes the profile a bit more, so that we don’t drop off dramatically like in the previous iterations it dropped right down to below 300, which is not really a great position to be, so 2025 is a bit higher as well.

Anita Soni : Now I go back to the US and the reserves. I apologize. That’s Bald Mountain, you added in terms of the additions base, it seems like there’s a lot of tonnes added at very low grade. Can you walk me what happened? I got the calculations a depletion less and then the additions, it seemed like there was almost 12 million tonnes, but 2.2 grams per tonne material was added. And I’m just wondering how that was work given the cost structure there and like what was the reason for that?

Paul Rollinson : Yes. Your question and it is specific to Bald Mountain, right?

Anita Soni : Yes. Yes.

Paul Rollinson : Okay. So on Bald Mountain, well, first let’s start with reserves. So the 2P material, so the main change there would be depletion. There’s a little bit of redesign, that added 100,000 ounces approximately, that’s on the 2P material. On the measured and indicated part of the resource, I believe we’ve added around 100,000 ounces also in terms of additions, and then as for the inferred material, I believe we — it was a wash between the measured and indicated and then the inferred. So measured and indicated went up by 140,000 approximately, and the inferred material came down by 140,000.

Anita Soni: Okay. Can I — maybe we could do this one offline. I was specifically asking about that 100,000 that you added in the reserves. It seemed like it was a bit low grade, so I was just wondering what the engineering around that was? But — can I get more importantly on Round Mountain — yes, sorry, go ahead.

Paul Rollinson: No, no, sorry. I was just going to say for sure we can take it offline. I can go back and check

Anita Soni: And then secondly, I just want to understand really the changes at Round Mountain, I know there’s a lot of phases going on, and I’m trying to keep up with Phase X, Phase S, Phase W3 and phase whatever. But just looking at the actual reserve resource update, essentially, we lost about 400,000, 500,000 ounces, and when — I assume it went back into the M&I category. And I’m just wondering, which phase that was that went there. You’re saying Phase S and Phase W are still in reserves. But did — which phase went into the resources right now?

Paul Rollinson: Yeah. To simplify it on you, the previous Phase W is comprised of four sub-phases; W1, W2, W3 and W4. W1 and W2 is what we’re mining now for the next two years. W3 is the one we pause and that’s in reserves and remains economic. And then W4 is the one that got moved from previously being Phase W in reserves to now being in resource, the gold is in the ground, but it changes the categories.

Anita Soni: Okay. And that was the one where you would have had to do a major lay back without the reasoning and the capital?

Paul Rollinson: That is correct.

Anita Soni: and the evaluation now is whether or not you want to go from underground on that one, is that?

Paul Rollinson: I can expand a little bit more on that. So you have W3 that’s like I mentioned it’s in reserves in open-pits reserves, and that’s a decision to start stripping that phase and investing the capital stripping. When it comes to W4, W4 actually, it would be nice to show you one day a cross-section but W4 sits above Phase X. That’s the underground that we’re starting to decline to go towards. So, yes, now to go straight to your question. The bottom of W4, the higher grade material of the W4 has the potential to be combined with Phase X underground. But again, there’s more engineering and drilling that needs to be conducted. As we go down, we’re going to drill all this area from underground, because now it’s only drilled from surface. Then we can define better the underground resource and potentially have a chunk of W4 ounces moving into Phase X underground.

Anita Soni: Okay. Thank you that was very clear. It’s been a while since I’ve actually understood that. So that was very good explanation. Thanks.

Paul Rollinson: You’re welcome.

Operator: Our final question comes from Tanya Jakusconek with Scotiabank.

Tanya Jakusconek: Okay, good morning. I think that’s me. Thank you for taking my question. I’ve been called Anya before, so that’s a new one. And that’s the easier part of my name. So, let’s start with just a clarification, Paul. You mentioned, I’m just looking at my notes here that, you have opportunities for expansion in Nevada. Should I take that as expansion in what you already own, i.e. all have these underground targets Gold Hill et cetera, or are you looking for other opportunities in Nevada to grow, given the infrastructure of Bald Mountain is going to be available very shortly. The mine life is short there. So, that’s my first question.

Paul Rollinson: Sure. It’s what we already on and what we’re getting at. I mean, the way I would think about, staring with Round is number one. We’re pretty confident that our underground opportunities will be standalone economic. We’re driving the decline, but we see the woods, we see the grades. And so, first exercise is to satisfy ourselves that we can run those underground’s as a standalone underground and they make sense. When we think about optionality or flexibility, it’s really coming back to this business of, of turning back on. The things we’ve just paused. And I think, we will continue to study that through the year, I think, it looks promising. I think we’d be in a better position to reevaluate that as we get to the middle of the year.

But if we turn back on the S, W scenario in conjunction with the underground, it has almost a bit of a multiplier effect with the economics. So, that’s really what we’re getting at when we talk about optionality, it’s the flexing of the underground and the restarting of those, some of those lay backs. Again, I would also say, there’s some Greenfield activity in Nevada. But we just got one of our best holes ever in Nevada, over at Bald where we’re seeing the oxide, extended depth with pretty attractive grades, so again, will — that may not happen on a timeline that provides for continuous production at bald. But it’s certainly very prospective.

Tanya Jakusconek: Thanks. I was going to ask the fate of Bald Mountain. I mean, does that look like it’s a noncore asset now, but maybe with this exploration news, you’re rethinking that?

Paul Rollinson: Yeah, it’s always a tough one. It’s — but I mean for us, as we say, what constitutes core versus noncore is how does it compete for capital internally, and when you pull holds like that, it’s pretty — it is pretty attractive and we’ll want to understand it more. So, we’re not there yet, but it’s a fair question.

Tanya Jakusconek: Okay. And maybe just moving on to Curlew, just for myself, a reminder. So this prefeasibility that you’re kicking off in April is going to take about a year to do. Is that about right?

Paul Rollinson: Yeah. That’s a fair estimate.

Tanya Jakusconek: And then so you’ve done the €“ you’ll do the prefeasibility, you’ll see what the additional drilling you have this year, how much more you can add to this. But just from for €“ not following up on another question, but just on the permitting side, can you remind me is it just do we have to reapply for permits to just reopen the mill and then permits to truck the ore to the mill, or is it more substantial than that? I just forget.

Paul Rollinson: Yeah. I think, part of the prefeasibility study, Tanya would be to actually zoom in on that and answer that question. Our strategy, if you asked me today is €“ is closer to what you just mentioned. So you’re thinking close to our thinking, basically a restart of the mill and dry stocking in terms of tailing and then trucking of the ore from the mine to the mill. These are the main components.

Tanya Jakusconek: Okay. And then, I guess, my final question, just to finish off the 2025, we had once €“ just should we think of La Coipa running in that 250,000 ounce range production?

Paul Rollinson: For 2025?

Tanya Jakusconek: Yeah.

Paul Rollinson: I would say just over 200 in 2025 as we tape it down what we currently know, but of course, it will be an objective for us to try to maintain it flat from the 240 that we’re having this year.

Tanya Jakusconek: All right. And then I think we phased that out by 2026. Is that a fair comment?

Paul Rollinson: It’s a fair comment with the understanding that we’re starting the work to have a look at the extensions to try to maintain that little piece of that Ned mentioned, we’ve done a lot of drilling. We’ve done a lot of work. We’re now entering some of the permitting phases for those extension pieces.

Tanya Jakusconek: Okay. So really La Coipa and Bald are the two that we’re facing sort of phasing out in that for 2026, 2027 timeframe or thereabout before €“ unless we have extension and/or other that is discovered?

Paul Rollinson: We’re looking to extend the La Coipa, Tanya, would permitting on stuff we can see out towards the end of the decade. So that’s more of a Bald question. That’s more of a situation with bald than it is La Coipa.

Tanya Jakusconek: Okay. Okay. And for La Coipa, do you have €“ you have that on property and permitted it could be easily brought through?

Paul Rollinson: It’s €“ it is permitting, and it’s €“ it’s on our property at an existing mine. So one would expect that makes it more straightforward, but we’ve still got a, we’ve got to push it through the system.

Tanya Jakusconek: All, right. So you do need permits for it?

Paul Rollinson: Yeah.

Tanya Jakusconek: Okay.

Paul Rollinson: The satellite pits is what we’re permitting round in existing infrastructure.

Tanya Jakusconek: Okay. Okay. Great. Thank you so much for that. So just trying to follow-up on a need as on what mines are fading out in sort of the next couple of years.

Paul Rollinson: Great. Thank you.

Tanya Jakusconek: Yes.

Operator: There are no further questions at that time. With that said, concludes today’s conference. Thank you for attending today’s presentation. You may now disconnect.

Paul Rollinson: Thanks everyone. We’ll see you hopefully in person in the coming weeks. Thank you.