Heiko Ihle

Heiko Ihle with H.C. Wainwright & Co., LLC inquired about any quantifiable unexpected costs or shipment issues encountered in Q1 2026, particularly given the volatility in metal prices and reports of refineries suspending financing or delaying product intake. He also asked about the costs and availability of rigs for the planned 266,000 meters of exploration.

Answer

CEO Keith Neumeyer explained that while refineries have suspended financing, impacting retail buyers, First Majestic Silver is not affected as they do not finance their metal. President and Chief Corporate Development Officer Mani Alkhafaji added that the company uses a long-term contractor for most drilling, ensuring contained costs and access to necessary rigs for their exploration program.

Heiko Ihle asked about any quantifiable impacts on costs, shipments, or unexpected issues encountered in Q1 2026, given the extreme metal price volatility and reports of refineries delaying product intake.

Answer

CEO Keith Neumeyer explained that refineries have suspended financing due to market tightness and volatility, which primarily affects small retail buyers. He clarified that First Majestic Silver is not impacted as they do not finance their metal. Mani Alkhafaji, President and Chief Corporate Development Officer, added that the 266,000 meters of exploration planned for the year are cost-contained due to long-term contracts with a drilling contractor, and rig availability is not an issue.

Heiko Ihle asked about exploration at Keno Hill, specifically any unexpected findings, the ongoing costs per meter for exploration, and the modeling for the remainder of the year. He also sought clarification on whether Hecla would receive all cash flows from Casa Berardi through the closing date of the transaction.

Answer

Russell Lawlar, Senior Vice President and Chief Financial Officer, responded that a new high-grade ore shoot was intercepted at Keno Hill, open for expansion, with a budget of $13 million for the year and direct drilling costs around $180-$190 per meter. He confirmed that Hecla would receive all cash flows from Casa Berardi through the closing date.

Heiko Ihle inquired about unexpected exploration findings and associated costs per meter at Keno Hill, along with the modeling for the remainder of the year. He also sought clarification on Hecla's entitlement to cash flows from Casa Berardi through the closing date of the transaction.

Answer

Russell Lawlar, Senior Vice President and Chief Financial Officer, indicated that exploration at Keno Hill in 2025 intercepted a new high-grade ore shoot off the deep Bermingham, which is a focus for expansion. He noted the budget for Keno Hill exploration is $13 million, with direct drilling costs around $180-$190 per meter. Rob Krcmarov, CEO and President, highlighted the spectacular exploration potential. Russell Lawlar confirmed that Hecla will receive all cash flows from Casa Berardi through the closing date.

Heiko Ihle from H.C. Wainwright & Co. asked for specifics on the expected decline in the stripping ratio at Casa Berardi in Q4, requesting quantification and the current cost to haul waste. He also inquired about the permitting timeline for new pits at the asset.

Answer

VP of Technical Services Matt Blattman explained that the stripping ratio improves geometrically as the pit deepens, projecting it will be near 10-to-1 and decrease further. He noted that while haulage distances will increase, cost improvements will come from reducing contractor reliance. President & CEO Rob Krcmarov reiterated that the permitting process for new pits is lengthy and referenced a previously mentioned five-year permitting hiatus.

Heiko Ihle inquired about the impact of recent tariffs on input costs, parts, and availability across Hecla's operations. He also asked for details on the upcoming shutdown at Keno Hill for the Yukon Energy turbine repair, including its duration and potential financial impact.

Answer

Russell Lawlar, SVP & CFO, addressed the tariff question, stating that while the company anticipates some higher costs for items like steel, its contracting strategy has so far insulated it from direct impacts on concentrates sold to China. Carlos Aguiar, SVP & COO, explained the turbine repair is planned for a six-day period in August, with the downtime already factored into projections. He estimated a delay of approximately 90,000 ounces of silver production.

Heiko Ihle asked about potential efficiency improvements at Lucky Friday, requested quantifiable quarterly cost guidance for Casa Berardi as it transitions, and followed up on how long it would take for cost savings to be fully realized post-transition.

Answer

VP of Technical Services Matt Blattman explained that efficiency gains at Lucky Friday will be incremental and steady, not quantum leaps. CEO Robert Krcmarov and CFO Russell Lawlar declined to give quarterly guidance for Casa Berardi but confirmed costs would fall in the second half. Lawlar added that Q4 results should fully reflect the savings better than Q3 due to transition-related carry-on costs.

Heiko Ihle of H.C. Wainwright & Co. inquired about labor cost trends for the fourth quarter and asked incoming CEO Rob Krcmarov about his long-term strategic plans for Hecla, particularly concerning M&A.

Answer

SVP & COO Carlos Aguiar and SVP & CFO Russell Waller addressed labor costs, noting they expect contractor usage to decrease in Q4 as project work concludes. Incoming CEO Rob Krcmarov stated that the immediate focus is on internal growth and maximizing the value of the existing asset portfolio. He emphasized that any future M&A would be approached with discipline from a position of strength, subject to thorough due diligence.

Heiko Ihle of H.C. Wainwright & Co. asked about potential factors that could accelerate or delay the Q4 2027 production timeline and questioned management on key risks and recent positive surprises, referencing the company's "adapt or die" motto.

Answer

Chairman and CEO Gerard Barron stated that he sees no significant regulatory risks to the Q4 2027 timeline, only normal business risks, as the board is now confident in deploying capital. He highlighted numerous positive surprises, including unexpectedly strong and coordinated support from the US administration and the deepening commitment of strategic partners like Korea Zinc to invest in the US.

Heiko Ihle inquired about the current ramp-up progress at the Terronera mine, asking for recent throughput and recovery figures and whether the pace is exceeding initial expectations. He also questioned if the integration of the Culpa acquisition is limiting the company's capacity for further M&A.

Answer

CEO Dan Dickson stated that Terronera is very close to commercial production, with the primary focus on optimizing the grind size to improve silver recoveries, which are lagging slightly, while gold recoveries are near target. COO Donald Gray confirmed the focus on grind size. Regarding M&A, Dickson explained that while the team needs a 'breather' to focus on Terronera's cash flow, the company is not done looking for accretive, silver-focused growth opportunities.

Heiko Ihle inquired about the latest operational progress at the Terronera mine, asking for recent throughput and recovery figures and whether the ramp-up is proceeding faster than anticipated. He also asked if the integration of the Culpa acquisition limits management's capacity for further M&A.

Answer

CEO Dan Dixon stated that Terronera is very close to commercial production, with the primary focus on optimizing the grind size to improve silver recoveries. He confirmed they are not actively seeking another acquisition until Terronera is generating positive free cash flow, allowing the company a "breather" to strengthen its balance sheet. COO Dawn Gray added that the ore's recovery is highly dependent on achieving the design grind size, which is the team's current focus.

Heiko Ihle of H.C. Wainwright & Co. asked about the extent of cash outflows to Terronera during Q2 and inquired about the near-term exploration priorities for the recently acquired Kolpa mine, given that only 10% of the property has been explored.

Answer

CEO Dan Dickson confirmed that while cash was still being sent to Terronera in April for commissioning, the major capital spending is complete. For Kolpa, he explained the focus is on validating the 118-million-ounce historical resource, exploring new discoveries like the Poderosa vein, and applying Endeavour's exploration expertise to identify new structures on the vast property, supported by a significant 24-month exploration budget.

On behalf of Heiko Ihle from H.C. Wainwright & Co., a representative asked for the expected timing of the remaining $45 million drawdown for Terronera and for insights into aspects of the construction process that went better or worse than planned.

Answer

CFO Elizabeth Senez confirmed the company plans to draw down the remaining funds during Q3, as the majority of the remaining construction spend will be incurred then. CEO Dan Dickson added that while there are daily challenges, the team has been highly flexible, citing the management of a small construction footprint and evolving the mine plan as examples of successful adaptation.

Heiko Ihle of H.C. Wainwright & Co. asked about the expected impact of strong gold by-product credits on cash costs for the remainder of the year and whether this could offset the strong Mexican peso. He also questioned if analysts should anticipate inflationary cost pressures for the Terronera project.

Answer

CEO Dan Dickson responded that while higher gold prices provide a beneficial by-product credit that lowers cash costs, the company's focus is on managing direct operating costs per tonne. For Terronera, Dickson confirmed it is fair to assume operating costs will be higher than the 2023 estimate of $81/tonne, potentially rising to the $95-$100/tonne range due to peso appreciation and industry-wide inflation since early 2023. Updated guidance will be provided closer to the 2025 operational start.

Heiko Ihle of H.C. Wainwright & Co. asked for color on the potential challenges and key milestones for entering production, and inquired about current trends in construction and equipment costs versus expectations from a year ago.

Answer

President and CEO Frank Bakker explained that the operational qualification line, which uses the same equipment as the main line, is a significant de-risking milestone that provides valuable operator experience. CFO Steven Cates addressed costs, stating that with 85% of equipment already purchased, they feel shielded from inflation and tariffs, and remain confident in the $245 million Phase I construction budget.

Inquired about the potential risks and key milestones for entering production and asked about the current trends in construction and equipment costs compared to previous expectations.

Answer

The company responded that the operational qualification line is a major de-risking factor for production startup. Regarding costs, 85% of equipment is already purchased, shielding them from tariff impacts and inflation, and they are maintaining their $245 million budget guidance.

Heiko Ihle from H.C. Wainwright & Co. asked for expectations on Q2 mine operating income, the timeline for meaningful income contribution from La Preciosa, and if any other significant maintenance-related downtime is anticipated.

Answer

CFO Nathan Harte explained that Q2 operating income is subject to metal price volatility but should remain consistent if conditions hold, with meaningful income from La Preciosa not expected until 2026. VP, Technical Services, Peter Latta, confirmed that no other major projects requiring significant downtime, like the recent crusher replacement, are planned for the current or next calendar year.

Heiko Ihle of H.C. Wainwright & Co. asked for an outlook on Q2 mine operating income, the expected timing for meaningful contributions from La Preciosa, and if any other significant operational downtime is anticipated.

Answer

CFO Nathan Harte indicated that Q2 operating income depends heavily on metal prices but should remain strong if conditions hold, and that meaningful income from La Preciosa is expected in 2026. VP, Technical Services, Peter Latta, confirmed that no significant downtime events like the recent crusher replacement are planned, only ongoing improvement projects.

Heiko Ihle from H.C. Wainwright & Co. asked for a quarterly breakdown of 2025 capital expenditures for La Preciosa and inquired about potential mill bottlenecks.

Answer

CFO Nathan Harte clarified that the $5-6 million CapEx for La Preciosa would be lighter in Q1, heavier in Q2 and Q3, and then taper in Q4. VP, Technical Services, Peter Latta, stated the mill is near its maximum throughput but could be expanded with a fifth circuit, a process the company has successfully managed in the past.

Heiko Ihle of H.C. Wainwright & Co., LLC inquired about the sustainability of operating cost reductions into Q2 2024 and sought clarification on whether Q1 production levels imply an anticipated increase in the latter half of the year to meet annual guidance.

Answer

CFO Nathan Harte responded that costs remain under control despite the strong Mexican peso. He noted that improved silver grades and significantly higher metal prices since April 1 are expected to create a "very positive swing" in operating cash flow margins. Harte also confirmed the company is hopeful for production improvements later in the year to meet or exceed the midpoint of its guidance.

Heiko Ihle inquired about Galiano's drilling program at the Abore pit, asking for long-term expectations and a comparison of recent results versus the resource model. He also sought details on the secondary crusher project, including costs versus budget, payments made, and the expected operational downtime for its installation.

Answer

Chris Pettman, VP of Exploration, explained that drilling results at Abore exceeded expectations, showing wider and higher-grade intercepts and expanding the high-grade zone's strike length while also making a new discovery. CFO Matthew Freeman confirmed the secondary crusher project remains on budget, with key equipment in-country. COO Michael Cardinaels added that installation downtime will be minimal (a few days) and is already factored into the annual production guidance, as noted by executive Matt Badylak.

Heiko Ihle of H.C. Wainwright & Co. inquired about Galiano's drilling strategy at the Abore pit, comparing recent results to expectations, and sought details on the secondary crusher project, including costs, payments, and expected operational downtime.

Answer

VP of Exploration Chris Pettman confirmed that Abore drilling results exceeded expectations, with wider and higher-grade intercepts that expanded a key high-grade zone and led to a new discovery. CFO Matthew Freeman stated the secondary crusher project remains on its ~$5 million budget. COO Michael Cardinaels clarified that installation downtime will be minimal, lasting only a few days for the tie-in and will be coordinated with other maintenance. Executive Matt Badylak added that this downtime is already factored into the full-year production guidance.

Heiko Ihle of H.C. Wainwright & Co. inquired about Galiano Gold's drilling strategy at the Abore deposit, specifically asking about long-term plans beyond the South pit and how recent results compared to expectations. He also questioned the secondary crusher project, focusing on final costs versus budget, payment status, and the expected operational downtime for installation.

Answer

Chris Pettman, VP of Exploration, confirmed that drilling results at Abore exceeded expectations, with intercepts being wider and higher-grade than modeled, and noted a new high-grade discovery. CFO Matthew Freeman stated the secondary crusher project remains on budget, with equipment now in-country. COO Michael Cardinaels added that installation downtime will be minimal (a few days) and is already factored into the annual production guidance, a point reiterated by executive Matt Badylak.

Heiko Ihle of H.C. Wainwright & Co. inquired about Galiano Gold's drilling strategy at the Abore pit, asking about long-term plans and how recent results compared to expectations. He also questioned the secondary crusher project's budget, payment status, and expected installation downtime.

Answer

Chris Pettman, VP of Exploration, stated that Abore drilling results exceeded model expectations with wider, higher-grade intercepts and a new high-grade discovery. He outlined plans for deeper drilling to test extensions for potential open-pit or underground mining. CFO Matthew Freeman confirmed the secondary crusher project remains on budget, with key equipment in-country. COO Michael Cardinaels added that installation downtime will be minimal (a few days) and is already factored into the annual production guidance, a point reinforced by executive Matt Badylak.

Heiko Ihle of H.C. Wainwright & Co. inquired about Galiano Gold's exploration and operational outlook, focusing on the Abore drilling program's results versus expectations and future plans. He also sought details on the secondary crusher project, including budget adherence, payment status, and expected installation downtime and its impact on production guidance.

Answer

Chris Pettman, VP of Exploration, reported that Abore drilling results exceeded expectations, with intercepts being wider and higher-grade than modeled, expanding a key high-grade zone's strike length from 90 to 180 meters and making a new discovery. CFO Matthew Freeman confirmed the secondary crusher project remains on its ~$5 million budget, with a couple of million spent in the quarter. COO Michael Cardinaels noted that installation downtime will be minimal (a few days) and combined with other maintenance, with minimal production loss expected. CEO Matt Badylak clarified that this downtime is already incorporated into the 2025 production guidance.

Heiko Ihle of H.C. Wainwright & Co. inquired about Galiano's long-term drilling strategy at Abore, the comparison of recent drill results to the resource model, and the financial and operational details of the secondary crusher project, including costs, payments, and expected downtime.

Answer

Chris Pettman, VP of Exploration, confirmed that Abore drilling exceeded expectations, expanding a high-grade zone and making a new discovery. CFO Matthew Freeman stated the crusher project remains on budget, with key equipment now in-country. COO Michael Cardinaels added that installation downtime will be minimal and is already factored into the annual guidance, a point reiterated by executive Matt Badylak.

Heiko Ihle of H.C. Wainwright & Co. questioned Galiano's capital allocation strategy, asking when the company's substantial $123 million cash balance might be used for shareholder returns like dividends or buybacks. He also sought clarification on mining service contract costs and their sensitivity to gold price fluctuations.

Answer

CEO Matt Badylak responded that the current focus for cash is on long-term value creation through investments in the life of mine plan and pursuing strategic M&A opportunities, though shareholder returns are not ruled out. CFO Matthew Freeman clarified that mining contract costs are fixed-rate and volume-driven, not linked to the gold price, ensuring any upside from higher gold prices flows directly to the company's bottom line.

Heiko Ihle from H.C. Wainwright & Co. inquired about Galiano's capital return policy, asking when shareholders might expect dividends or buybacks given the company's substantial cash position. He also asked for clarification on mining contract costs and their correlation to the gold price.

Answer

CEO Matt Badylak explained that the current focus is on long-term value creation by reinvesting cash into the life of mine plan, particularly the Nkran pit, and pursuing strategic M&A opportunities, though buybacks are not entirely off the table. CFO Matthew Freeman clarified that mining costs are based on fixed-rate contracts driven by volume, not the gold price, ensuring that Galiano retains the full benefit of a rising gold price.

Heiko Ihle inquired about Galiano's capital allocation strategy, asking when the company might consider shareholder returns given its substantial cash balance, and sought clarification on mining contract cost trends and their correlation to the gold price.

Answer

CEO Matt Badylak stated the current focus is on long-term value through reinvestment in the life-of-mine plan and strategic M&A, though shareholder returns are not off the table. CFO Matthew Freeman clarified that mining costs are fixed-rate, volume-driven contracts with no gold price participation, ensuring any upside from higher gold prices benefits Galiano directly.

Heiko Ihle inquired about the potential for more stream-to-royalty conversions, citing the recent Pandora NPI deal, and questioned the outperformance of Franco-Nevada's U.S. energy assets compared to other major energy investments.

Answer

President and CEO Paul Brink clarified that the Pandora conversion was a one-off situation tied to a specific transaction and not indicative of a broader trend. Jason O'Connell, SVP, Energy, explained that Franco-Nevada's passive royalty model differs from an operator like Occidental Petroleum, providing broad, diversified exposure across major U.S. shale plays without direct operational costs or risks. He added that the company continues to evaluate quality oil and gas opportunities.

Heiko Ihle from H.C. Wainwright & Co. inquired about pricing improvements in the deal pipeline for both mining and energy streams and whether sellers are shifting preference between fixed fees and percentage-of-spot pricing.

Answer

President & CEO Paul Brink explained that the high gold price environment makes it attractive for companies with precious metal byproducts to sell streams, driving an active deal pipeline. Executive Eaun Gray added that the market standard has shifted towards percentage-based fees for ongoing payments to the seller, rather than fixed fees.

Heiko Ihle of H.C. Wainwright & Co. inquired about the expected quarterly production cadence for 2025 and the primary sources of potential variability and upside in the company's long-term outlook.

Answer

Jackie Przybylowski, Vice President of Capital Markets, stated that Gold Royalty anticipates a significant production step-up in Q2 as the Vares, Cote, and Borborema mines continue to ramp up, followed by more incremental growth in the second half of the year. Regarding the long-term outlook, she identified potential upside from exploration at Canadian Malartic's Odyssey project, where new zones are trending towards the company's royalty coverage area, and from a planned mill expansion at Borborema, which is not yet widely reflected in analyst estimates.

Heiko Ihle of H.C. Wainwright & Co. inquired about the expected production cadence for the remainder of 2025 and the key sources of variability and upside in the company's five-year outlook.

Answer

Jackie Przybylowski, VP of Capital Markets, explained that Q2 would see a significant step-up in production as key mines ramp up, followed by incremental growth in H2. For the long-term outlook, she highlighted potential upside from exploration at Canadian Malartic (Odyssey) and the uncredited expansion plans at Borborema.

Heiko Ihle of H.C. Wainwright & Co. inquired about the expected quarterly production cadence for 2025 and the key sources of potential variability and upside in the company's strong 5-year outlook.

Answer

Jackie Przybylowski, VP of Capital Markets, explained that Q2 2025 production will see a significant step-up as the Vares, Cote, and Borborema mines ramp up, with more incremental growth in the second half. For the longer-term outlook, she identified potential upside from exploration at Canadian Malartic's Odyssey project, where new zones are trending towards Gold Royalty's coverage area, and from the planned expansion at the Borborema mine, which is not yet fully reflected in analyst models.

Heiko Ihle inquired about Gold Royalty's long-term outlook beyond the new 2029 guidance, the expected breakdown between gold and copper revenue in the very long term, and the company's five-year plan for debt repayment.

Answer

Peter Behncke, Director of Corporate Development, noted that cornerstone assets like Canadian Malartic and Cote have 20-plus year mine plans, suggesting the 5-year outlook is sustainable. Jackie Przybylowski, VP of Capital Markets, added that copper's portfolio share will decline as major gold assets ramp up. CFO Andrew Gubbels explained that debt was used to build the asset base and will be paid down with upcoming free cash flow. CEO David Garofalo affirmed that the objective is to repay debt quickly while keeping the facility available for future non-dilutive, accretive acquisitions.

Heiko Ihle of H.C. Wainwright & Co. inquired about the impact of significantly higher gold prices on Gold Royalty's portfolio, operator investment levels, and the current M&A pipeline.

Answer

David Garofalo (Executive) and Jackie Przybylowski (VP, Capital Markets) explained that the company has immense leverage to the gold price, which could drive revenue to over $70 million by the end of the decade. They noted that while key assets like Cote and Vares are ramping up regardless of price, higher prices could accelerate development at other projects. Regarding M&A, Mr. Garofalo stated that despite juniors needing capital, the company must remain highly disciplined due to its own share price weakness and will prioritize paying down debt with its growing cash flow.

An analyst on behalf of Heiko Ihle asked about any unforeseen supply chain issues at the Pinyon Plain mine and planned Q2 spending. They also inquired about the potential to convert more cash into uranium inventory and if there was a maximum purchase price for doing so.

Answer

CEO Mark Chalmers reported no significant site issues at Pinyon Plain, with the main challenge being truck availability for ore transport. He stated that spending is focused on production, with the mine largely developed. Regarding inventory, Chalmers said the company would remain opportunistic, considering purchases if they see a profitable resale opportunity, guided by their own production costs of $35-$40 per pound.

Heiko Ihle of H.C. Wainwright & Co. asked about the integration progress with Base Resources since the deal's closing and inquired about recent trends in long-term uranium contract pricing and duration with utilities.

Answer

President and CEO Mark Chalmers responded that the Base Resources integration is proceeding as planned with no negative surprises, emphasizing the positive collaboration between the two teams. On contracting, he confirmed that utilities are accepting higher prices as the new norm, leading to rising floors and ceilings in new agreements due to growing nuclear power demand.

Heiko Ihle of H.C. Wainwright & Co. inquired about Energy Fuels' pricing power with its customer base given its increasing production scale and geopolitical turmoil. He also asked if there is a maximum uranium inventory level permitted at the company's mill site.

Answer

Executive Mark Chalmers stated that pricing power is improving, evidenced by a recent, favorable long-term contract, although utilities still desire low prices. He confirmed there is no regulatory maximum for ore inventory at the mill, noting the company has substantial capacity and has held over a million tons in the past. He added that current inventories are north of 900,000 pounds and growing daily.

Heiko Ihle of H.C. Wainwright & Co. inquired about Energy Fuels' pricing power with customers amid its production ramp-up and geopolitical turmoil, and asked if there are any maximum uranium inventory levels permitted at its mill.

Answer

Executive Mark Chalmers explained that while customers still seek low prices, there is a growing willingness to pay a premium for secure, U.S.-sourced uranium, as evidenced by a recent favorable contract. He confirmed there is no regulatory maximum for ore stockpiles at the mill, noting the company currently holds over 900,000 pounds of uranium in finished and unprocessed forms, with inventories growing daily.

Heiko Ihle inquired about the assumptions for the Greenstone mine's contribution to the 2025 production guidance, particularly for Q1, and sought confirmation on the scope of the Fruta del Norte royalty.

Answer

Executive Nolan Watson explained that while Q1 was an 'abnormality' for the Greenstone mine, the company sees evidence of a stronger Q2 and remains positive on the asset. He declined to provide specific quarterly figures to avoid conflicting with the operator's guidance. Watson also confirmed that the 0.9% NSR royalty on Fruta del Norte covers the entire site, including all future expansions.

Heiko Ihle of H.C. Wainwright & Co. inquired about Sandstorm's annual guidance of 65,000 to 80,000 ounces, seeking specifics on the company's internal modeling for the Greenstone mine's quarterly contribution, particularly for Q1. He also asked for confirmation that the Fruta del Norte 0.9% NSR royalty covers the entire site, including all future plant expansions.

Answer

Nolan Watson, an executive at Sandstorm, explained that while he couldn't provide specific internal figures for the Greenstone mine to avoid conflicting with partner guidance, Q1's performance was an "abnormality." He expressed confidence that the mine has "turned a corner" and expects Q2 to be significantly stronger. Watson also confirmed that the Fruta del Norte royalty does indeed cover the entire site and any future expansions.

Asked about the possibility of exceeding the year-end debt reduction target of $350 million due to high gold prices and strong cash flow. He also inquired if there have been any discussions with mine operators about buying back their streams.

Answer

The company confirmed the goal is to get debt below $350 million and that strong cash flow is already allowing for share buybacks alongside debt repayment. They will continue to pay down debt as much as possible. Regarding stream buybacks, the company stated they do not engage in such conversations and quickly refuse any requests, a policy well-known in the industry.

Heiko Ihle asked about Sandstorm's debt reduction target, questioning if a stretch goal below $350 million is achievable by year-end given strong gold prices. He also inquired if any mine operators have approached Sandstorm to buy back their streams.

Answer

CFO Erfan Kazemi-Esfahani confirmed the goal is to get debt below $350 million and that higher cash flow is already enabling share buybacks alongside debt repayment, with potential for further reduction if commodity prices stay strong. Executive Nolan Watson stated definitively that the company does not engage in stream buyback conversations, a well-known industry stance that has led operators to stop asking.

Heiko Ihle inquired if Sandstorm could surpass its year-end debt reduction target of $350 million, given strong gold prices and cash flow. He also asked if any mine operators have approached the company to buy back their streams.

Answer

CFO Erfan Kazemi-Esfahani explained that while no new formal target is being set, continued strong commodity prices make it possible to beat the $350 million goal while also buying back shares. Executive Nolan Watson stated that the company does not entertain offers from operators to buy back streams, noting this is a well-understood industry practice.

Heiko Ihle inquired about the recent increase in investor interest in Vista Gold, its connection to the strong gold price, and the specific impact of the record-high Australian dollar gold price on the Mt Todd project's profitability.

Answer

President and CEO Frederick H. Earnest confirmed that the rising gold price is driving renewed interest. He emphasized that the new feasibility study, which significantly lowers initial capital costs, has resonated strongly with institutional investors and potential partners. Earnest added that since many project costs are in Australian dollars, the record-high AUD gold price bodes very well for the project's economics, and the timing of the new study is advantageous.

Heiko Ihle of H.C. Wainwright & Co. inquired about the recent increase in investor interest in Vista Gold, driven by spot gold prices, and the impact of the record-high Australian dollar gold price on the Mt Todd project's profitability.

Answer

President and CEO Frederick H. Earnest confirmed that higher gold prices and the new feasibility study's lower initial capital cost are attracting significant interest from institutional investors and potential partners. He added that with most project costs in Australian dollars, the record AUD gold price bodes very well for the project's economics, making the study's timing highly advantageous.

Heiko Ihle of H.C. Wainwright & Co. inquired about the recent surge in investor interest in Vista Gold, linking it to strong gold prices. He asked for management's perspective on market sentiment, investor awareness from recent conferences, and the specific impact of the record-high Australian dollar gold price on the Mt Todd project's profitability.

Answer

President and CEO Frederick H. Earnest confirmed that rising gold prices are driving interest. He emphasized that the strategy to significantly reduce initial capital costs for Mt Todd is resonating well with institutional investors and potential partners. Earnest added that with many costs in Australian dollars, the record-high AUD gold price is highly advantageous for the project's economics, making the timing of the new feasibility study very favorable.

Heiko Ihle of H.C. Wainwright & Co. asked about Vista Gold's capital allocation plans for the $20 million in cash from the Wheaton royalty deal and sought details on the financial impact of the new 3.5% ad valorem royalty in the Northern Territory.

Answer

CFO Douglas Tobler outlined the spending plan, noting that recurring corporate and site costs remain stable at approximately $6 million annually. He specified that funds would be used for a ~$2 million drilling program in 2024 and a feasibility study costing ~$0.5-1 million this year and another ~$1-1.5 million in early 2025. President and CEO Frederick H. Earnest reinforced the company's commitment to capital discipline. Regarding the royalty, Tobler explained the new 3.5% ad valorem rate is a flat, life-of-mine payment that reduces the total royalty burden by nearly 50% from the ~$765 million estimated in the previous study. Earnest added that this new regime simplifies the system and improves the project's competitiveness.

Heiko Ihle of H.C. Wainwright & Co. inquired about the expected trajectory of head grades and recovery rates for the remainder of the fiscal year, particularly for Q2, and asked for details on quantifiable operational improvements at the plant since its commissioning.

Answer

Executive Stephen Mullowney stated that Q2 head grade would likely be slightly lower than Q1, with a dramatic improvement expected in Q3 and Q4. He detailed long-term plans to boost recovery rates by adding a flotation and regrind circuit. He also outlined recent operational enhancements, including crushing circuit tweaks, ball mill refurbishments, and the installation of a new generator set. Executive Richard Boffey added that a flotation circuit is the key to achieving recovery rates well into the 90s.

Heiko Ihle of H.C. Wainwright & Co. questioned the cause of lower grades at the San Jose mine and its long-term outlook, and also asked about the company's internal assessment of the recent U.S. election's impact on its business.

Answer

CFO Perry Ing explained that the lower grades at San Jose were temporary and had been rectified by October, with Q4 trending well to meet guidance. CEO Robert McEwen commented on the election, stating that the incoming administration's pro-resource stance is viewed as a positive for its U.S. operations, particularly for streamlining regulations, but it was too early for a detailed internal analysis.

Heiko Ihle from H.C. Wainwright & Co. questioned the cause of lower-than-expected grades at the San Jose mine and asked for management's perspective on the potential impact of the U.S. election results on the company's operations.

Answer

Executive Perry Ing addressed the San Jose grades, explaining they were a temporary issue related to resource model reconciliation that was rectified by October, with Q4 trending well. CEO Robert McEwen commented on the election, viewing the outcome as potentially positive for the U.S. resource industry by streamlining regulations, but noted it was too early for a detailed internal assessment.

Heiko Ihle of H.C. Wainwright & Co., LLC requested details on the input factors for the $170 million fairness opinion on the American Metals division and sought a breakdown of cash inflows from recent corporate activities and projections for the remainder of the year.

Answer

Chairman and CEO Mark Jensen explained that the fairness opinion was conducted independently by the SPAC partner and details would be in the forthcoming S-4 filing. Regarding capital, Jensen outlined subsidiary-level financing plans, including a $10-20 million targeted raise for ReElement, a potential large prepay order for American Carbon, and capital from the SPAC merger for American Metals, stressing no planned equity raises at the parent company level.

Asked for details on the input factors for the American Metals fairness opinion and for a breakdown of cash raised and expected capital inflows for the various divisions.

Answer

The company cannot provide details on the SPAC's fairness opinion but will include what's possible in the S-4 filing. The company detailed its capital strategy for each division: a $10-20M raise for ReElement, a potential large prepay for American Carbon, and capital from the SPAC merger for American Metals, all supplemented by existing credit facilities and a low-CapEx model, minimizing the need for further capital raises at the parent level.

Heiko Ihle of H.C. Wainwright & Co. inquired about the utilization of the $45 million tax-exempt bond for the Wyoming County Coal project and the estimated cash costs for the planned spin-offs of ReElement Technologies and American Carbon.

Answer

Chairman and CEO Mark Jensen stated that approximately $20 million of the bond funds have been spent on equipment and development, with the remaining $25 million allocated to bringing the mine into production. He estimated the spin-off costs to be low, specifically "sub $0.25 million," emphasizing the company's focus on cost control as significant equity owners.

Heiko Ihle inquired about the current cash flow impact of the Largo Clean Energy division and the anticipated cash outlay for the kiln maintenance scheduled for Q4 2024.

Answer

CFO David Harris clarified that the cash burn for Largo Clean Energy is significantly reduced, now in the range of $200,000 per month, and is not a major drain on cash balances. COO Celio Pereira added that the annual kiln maintenance, rescheduled to November, is expected to have a cash cost between $2 million and $3 million.

Heiko Ihle asked for a follow-up on operational disruptions, seeking a dollar-value impact from Q2's weather and election-related delays. He also questioned the current pricing and outlook for drilling costs.

Answer

President and CEO Allen Palmiere quantified the Q2 disruption as a loss of roughly one week of production, equating to about 6,000 tonnes of ore or one-sixth of the month's revenue. On drilling, Palmiere noted that a recent change to a Mexican drilling contractor has significantly decreased cost per meter, and he does not forecast any significant cost increases going forward due to a strong working relationship.

Heiko Ihle inquired about the specific operational improvements seen in the second quarter following reduced plant throughput and lower recoveries in Q1. He also asked for quantification of cost-saving initiatives, particularly in light of the company's aging mining fleet.

Answer

President and CEO Allen Palmiere explained that the Q1 throughput reduction was by design and aligned with the budget. He attributed lower recoveries to two factors: a trial-and-error optimization process in the concentrator circuits and a change in process water composition due to a tailings storage facility closure. Palmiere noted that stability was achieved late in Q1, with benefits emerging in Q2. To address costs, he detailed a plan to replace aging equipment, such as low-profile trucks, which is expected to significantly reduce high repair and maintenance expenses. He provided an example, stating that replacing development jumbos could lower development costs from approximately $2,800 per meter to as low as $2,200 per meter.

Inquired about entering long-term contracts for cost certainty (e.g., treatment charges, power) and whether the strategic review was prompted by poor Q4 performance.

Answer

The company is actively renegotiating supplier contracts and will tender new treatment charge contracts soon, though full long-term fixing isn't possible. The strategic review is not due to Q4 performance (which is improving) but is a proactive measure to address the significant undervaluation of the company's assets in the market.

Heiko Ihle of H.C. Wainwright & Co. asked about recent changes in long-term contract pricing and demand, the impact of the U.S. Senate's Russian uranium ban, and the projected timeline for significant demand from Small Modular Reactors (SMRs).

Answer

CEO John Cash explained that while the Senate's decision was largely priced in, it adds upward pressure on prices. He noted a clear shift to a seller's market, allowing for contracts with market-related collars and strong floors, though he declined to give specific pricing details. For SMRs, Cash projected that material demand would likely begin to emerge between 2028 and 2030, cautioning that regulatory hurdles at the NRC could pose a risk to this timeline.

Heiko Ihle inquired about recent changes in long-term contract pricing and demand, particularly following the U.S. Senate's decision to ban Russian uranium imports, and asked about the timeline for small modular reactors (SMRs) to create meaningful uranium demand.

Answer

Chairman and CEO John Cash explained that while no new RFPs had arrived post-Senate vote, the spot price rose, and he believes the ban was already priced in. He noted the shift to a seller's market allows for contracts with market-related collars and strong floors. Regarding SMRs, he projected significant demand would not materialize for 3-5 years, potentially becoming material around 2028-2030, while citing the NRC's regulatory speed as a risk.

Heiko Ihle from H.C. Wainwright & Co. asked about the impact of broad inflation on the company's operations, including wages, supplies, and assay costs, and what mitigation strategies are being employed. He also inquired specifically about any inflationary effects on care and maintenance expenses at the Velardeña property.

Answer

President and CEO Warren Rehn acknowledged seeing wage inflation in Mexico, aligning with the country's CPI, as well as increased fuel costs. He explained that while the company pushes back where possible, some cost increases are inevitable but remain manageable. For Velardeña's care and maintenance, Rehn noted the primary cost is security, and any price increases from their provider would likely lag by about a year due to annual contract renewals.

Heiko Ihle from H.C. Wainwright & Co. questioned the company's strategy on balancing heavy investment in exploration against the need for short-term cash flow and profitability, and later asked for a breakdown of exploration costs.

Answer

President & CEO Warren Rehn responded that reinvesting revenues into exploration is crucial for long-term growth. SVP & CFO Robert Vogels provided a breakdown of the year-to-date exploration costs, noting over $1 million at Rodeo and significant spending at Sarita Este. Rehn added that exploration spending might decrease next year as the company prepares for the Velardena restart.