Allied Gold - Q1 2024
May 10, 2024
Transcript
Operator (participant)
Thank you all for joining us this morning. Before I turn the call over, I need to advise that certain statements made during this call today may contain forward-looking information, and actual results could differ from the conclusions or projections in that forward-looking information, which include, but are not limited to, statements with respect to the estimation of mineral reserves and resources, the timing and amount of estimated future production, cost of production, capital expenditures, future metal prices, and the cost and timing of the development of new projects. For a complete discussion of the risks, uncertainties, and factors which may lead to actual financial results and performance being different from the estimates contained in the forward-looking statements, please refer to Allied Gold's press release issued yesterday announcing first quarter 2024 results, as well as management's discussion and analysis for the same period and other regulatory filings in Canada.
I would like to remind everyone that this conference call is being recorded and will be available for replay later on today. Replay information and the presentation slides accompanying this conference call and webcast are available on Allied Gold's website at alliedgold.com. I will now turn the call over to Peter Marrone, Chairman and CEO. Please go ahead, Mr. Marrone.
Peter Marrone (Chairman and CEO)
Operator, thank you very much. So let's dig right in. We have a portfolio of mines which we said would be subjected to optimization initiatives, and the improvements would begin in 2024, and we would show sequential quarter-over-quarter improvements. These key operational initiatives were advanced in this last quarter, and they support a planned production and cost improvements which we expect to show meaningfully, particularly in the second half of the year. Production during the quarter was just over 8% higher than the comparative period where we produced 78,000 ounces by comparison to our over 85,000 ounces for the first quarter of this year. That 85,000 ounces is consistent with guidance, sequencing expectations, and positions us very well for the expectations for the year. As Basie will speak to, Sadiola was a main focus with a standout masterclass performance.
Cost of sales, cash costs, and all-in sustaining costs on a per ounce sold decreased since the fourth quarter. And we want to emphasize that when we report our costs, we report on a per ounce sold, not per ounce produced. And despite the fact that the number of ounces sold in this most recently completed quarter was lower than the fourth quarter, we still delivered all-in sustaining costs, cash costs, and cost of sales per ounce sold that were lower than in the fourth quarter. Operational cash flows improved significantly with over $38 million being generated. And we have to again emphasize that the costs are better and revenue per ounce is better than in prior quarters.
In the first quarter, cash flow was generated at an average realized gold price of $2,053 per ounce, and spot prices are now significantly exceeding this realized price with over $300 better in terms of spot price. It appears as if the gold price will continue to trend higher. In order to be prudent, we entered into zero-cost gold collars for approximately 30% of our production, roughly 10,000 ounces per month from May to March of next year, a total of 110,000 ounces. What we have done with that is that we have secured a floor of $2,200 per ounce on that production. That is well above our budgeted expectations for gold price. We also have all of the upside to above $2,800 per ounce. So we protect ourselves on the downside, and we have significant exposure to the upside.
We emphasize that this was a should have, not a must have. Our operational and financial position is strong, but we think it's prudent to mitigate price risks. In this case, we have almost complete upside with significant downside protection. Moving on to how we create sustainability and improvements in our operations, and that was the point of the first quarter. We prefer beginning with contract mining and owner mining. We prefer owner mining, recognizing that it takes time for training and it requires capital to be in an owner mining situation. Ultimately, that is the objective. In the meantime, we have been taking steps to better integrate mine contracting efforts into our performance drivers. We transitioned mining operations at Agbaou to a unified contractor.
We've said we're treating the Côte d'Ivoire assets, given their proximity, given that we have an access road between Agbaou and Bonikro as a complex, and with a unified contractor, this assists us in delivering operational synergies in future quarters. We're not finished with this program. We expect to continue to integrate mine contracting efforts into our performance drivers. And that will also allow us to be able to determine how we deal with mine contractors at our Kurmuk project and what we do with further optimizations and improvements at our existing mines. Processing improvements and mine sequencing at Bonikro were an important part of what we were doing in the quarter. We completed these processing enhancements in the first quarter. It did require a plant shutdown. We went through that process.
We are now in an excellent position to be able to deliver better production at Bonikro over the course of the next three quarters for this year and into 2025 and 2026. In terms of Agbaou, and again, as Basie will speak to, it's expected to be second half of the year weighted with a 40-60% production profile, reflecting an anticipated improvement of operations after the transition to this new mine contractor, which we completed in the first quarter. We had a strong performance at Sadiola, and we significantly increased production with over 48,000 ounces and all-in sustaining costs that were more than $300 per ounce better than in 2023. We made advanced new oxide discoveries. We previously reported that in an announcement relating to our exploration efforts.
That was at the mine, and that will provide further oxide feed at the existing plant and the future plant for longer. We're integrating the high-grade ore from Diba to boost 2024 production. This will represent a significant component of Sadiola's output for the year and into 2025 and a part of 2026, supplemented by these new oxide discoveries that we've made at the mine itself. We've progressed Kurmuk. We spent on budget of $11 million. We're on track for the year. We've completed the EPCM team mobilization. We're advancing engineering and formal procurement. We're defining project procedures, logistics. We're advanced in our discussions relating to a power purchase agreement, the importance of power at that mine with the very low cost in Ethiopia. So all in all, then, we're advancing Kurmuk, and we'll see some significant improvements occur over the course of the next several quarters.
The results to conclude for the first quarter are in line with our guidance for production and costs. We do expect sequential increases in production in the second and third quarter, with production in the fourth quarter consistent with the third. And while Agbaou stands at about 40-60 split in terms of production second half weighted to first half, we expect overall to be at a range of about 45% for the first half and 55% for the second half, all for the reasons given. And very significantly, to recap the improvements at Bonikro that were made to the plant, the effort that we've undertaken at Agbaou to integrate mine contractor management, and the significant production expectations that come from Diba at Sadiola. And with that, let me pass it to Basie, our Chief Operations Officer, for more detail on the operations.
Daniel Racine (President)
Thank you, Peter. Good morning to everyone. During the quarter, the company produced 85,177 ounces and sold 85,136 ounces. The cost per ounce sold stood at $1,614 for cost of sales, $1,397 for cash costs, and $1,562 for all-in sustaining costs. Looking at the quarterly operating results by mine, Sadiola had a strong quarter and fully met expectations with production of 48,330 ounces compared to 40,533 ounces in a comparative prior year period, representing an increase of 19%. The initiatives undertaken at the end of the fourth quarter, predominantly focused on crushing and screening initiatives, continued throughout the first quarter and were successfully maintained and operated. Results were also positively impacted by the higher feed grade. Diba continues to progress on plan and is expected to deliver its first production later in the second quarter.
Our cost per ounce sold stood at $1,263 for sales, $1,172 for cash costs, and $1,240 for all-in sustaining. Moving to Bonikro, production was 18,631 ounces. Following a detailed operational assessment which was conducted at the end of last year, certain operational improvements and process adjustments were identified and planned for 2024. A short stoppage on the processing plant was carried out during the first quarter, allowing the company to undertake in certain areas of the flow sheet some improvements, as well as to improve management matters on the mine. The plant throughput variability reduced significantly after these improvements, and processing performance has now fully stabilized. Despite the processing impact during the quarter, consistent positive mining performance has ensured mining activities remain on plan. At Agbaou, production came in 18,216 ounces. The first quarter performance was strong despite the transition to a new mining contractor which is now complete.
The oxide feed blend ratio at the Agbaou plant was enhanced by continuous production from Agbalé, which has consistently met great expectations and provided significant flexibility during the first quarter. At Agbaou, expected cost reductions are to be achieved mainly through the increase of production in subsequent quarters and after a contractor changeover, as well as mining and processing optimizations. With that, I will pass over to Greg, our Chief Financial Officer, to discuss our financials.
Jason LeBlanc (CFO)
Thank you, Basie, and good morning, everyone. The company's primary focus, which is well underway, is to transition from accumulating a portfolio of high-quality, high-potential assets to stabilizing and optimizing operations. As a result of this transformation, we incurred expenses and cash flow impacts stemming from the business combination and the ongoing transformation resulting in some earnings and cash flow volatility, particularly in changes to working capital as previously accrued items are paid. For the quarter, we generated revenue of $175.1 million and gross profit excluding depreciation of $51.8 million. The attributable net loss for the quarter was $5.7 million. However, after adjusting for non-recurring items, adjusted net earnings for the quarter were about $1 million. Net cash generated from operating activities was -$7.9 million, mainly due to working capital outflows related to year-end accruals.
These outflows do not reflect the underlying efficiency of our mining operations or the company's cash generation capacity. Before these items, net cash from operating activities was a strong inflow of $38 million. At year-end, the company's cash and cash equivalents stood at $125.4 million after spending $26.2 million in Q1 on exploration, sustaining capital, and development plans. Despite near-term volatility, our growth path is expected to significantly increase earnings and cash flow starting this year. Cash flows from operating activities are expected to significantly increase throughout the remainder of the year, with increased production contributions and lower costs driving sequential improvements. Annual production is expected to be distributed 45% in H1 and 55% in H2. Expenses are expected to continue trending downward over the remainder of the year, with quarter-over-quarter savings and improvements anticipated, particularly in the second half of the year.
Given the current gold price, the company anticipates being fully financed through existing cash flows and cash on hand. However, to reduce dependence on the gold price, Allied is proactively pursuing several non-dilutive treasury options, including streams on producing assets and a gold prepay. We are in final discussions to implement a stream for about $50 million on our Côte d'Ivoire assets. The proceeds, which are expected to result in a negligible cost of capital based on proven and probable reserves and remain competitive when assuming mineral resource conversion, will bolster and ensure self-funding for the company's extensive exploration and optimization program in Côte d'Ivoire, where $16.5 million is allocated this year to advance highly prospective targets such as Oumé, Agbalé, among other targets.
The stream proceeds will enable strategic enhancements distinct from the current life of mine plans and designed to increase asset value and unlock upside that would otherwise not be readily funded in the short term as the company pursues the advancement of Kurmuk and Sadiola projects. With that, I'll hand the call over to our President, Daniel Racine.
Daniel Racine (President)
Thank you, Greg, and good morning, everyone. Our ability to generate increased cash flows and profits is supported by our 2024 guidance. As previously disclosed, production is expected to be weighted for the second half of the year with quarter-over-quarter variances due to the mine sequencing and accessing higher grades as per the mining plan, along with implementation of operational improvements. Production is expected to sequentially increase in the second and third quarters, with production in the fourth quarter consistent with the third quarter, all of which aligned with Allied's guidance of between 375,000-405,000 ounces for 2024 at an all-in sustaining cost of $1,400 per ounce. For the year, production is expected to be weighted 45% for the first half and 55% for the second half.
In terms of investment, we plan to allocate $32 million to exploration activities and another $29.5 million to sustaining capital expenditures, not including pre-stripping of $25 million, which is accounted for in all-in sustaining costs. We've also earned $198.5 million for expansionary capital expenditure, primarily for Kurmuk development. Cost improvement is expected to come from better performance at Sadiola and Agbaou, with Bonikro entering a strip phase to access higher-grade ore during the offload period. Expansionary capital is being directed towards advancing the Kurmuk project, which is expected to result in a significant increase in production and profitability starting in 2026. Spending on exploration is focused on strategic objectives, namely increasing oxide ore inventory, particularly at Sadiola, extending mine life in Côte d'Ivoire, and expanding mineral inventory at Kurmuk. With our success in exploration and increasing reserve, our outlook for 2025 and 2026 shows substantial growth at much lower costs.
At Sadiola, we anticipate year-over-year increase in gold production during the outlook period, targeting 230,000 ounces annually. This expected increase is driven by the incorporation of additional oxide ore from Diba and promising targets such as Sekekoto West, FE4, and S12, which will complement the phase one expansion. For 2025, we expect Sadiola all-in sustaining costs to remain between $1,150-$1,250 per ounce. Although there might be a modest increase in 2026, we're looking to maintain it below $1,350 per ounce. Most of it is accounted for the preparation of the second phase expansion later that year. With the availability of oxide from Diba and other targets, phase one execution is now targeted to start in late 2024, with production commencing in early 2026. In the near term, Bonikro is on track for modest annual increases in gold production, aiming to surpass 110,000 ounces.
The 2024 stripping phase is set to reveal higher-grade material, significantly reducing all-in sustaining costs below $1,050 per ounce by the end of the outlook period. The full potential of Oumé, including advanced resource drilling at Oumé West and North, along with Akissi-So target, could lead to additional gains. At Agbaou, consistent annual gold production is expected with a floor of 90,000 ounces. Identifying additional mineral reserve in Agbalé and operational enhancement are driving improvements, with the mill effectively processing harder rock blend and increasing oxide feed. Significant investments are being made to progress the Kurmuk project, which we anticipate will begin production by mid-2026, contributing over 175,000 ounces of gold in the latter half of that year.
We are investing significantly in the project and also continuing to explore the significant exploration upside at near targets around Dish Mountain and Ashashire, in addition to the Tsenge project to support the strategic mine life of at least 15 years, with an all-in sustaining cost below $950 per ounces. With that establishment of Allied project management framework, the appointment of an EPCM contractor, the initiation of detailed engineering and early works, and the procurement of critical project services and infrastructure, along with strengthening relationships and engagement with local stakeholders, we are on track to deliver the project on time and on budget. Putting this all together, Allied expects significant near-term improvement in production and costs through ongoing optimization and exploration. And with the ramp-up of Kurmuk in 2026 and Sadiola reaching production level above 600,000 ounces at an all-in sustaining cost below $1,225 per ounces for 2026.
In the long term, the Sadiola phase two expansion completes its transition to a world-class mine and brings our total production to approximately 800,000 ounces at a targeted all-in sustaining cost below $1,000 per ounce. I'd like to hand the call to our Chief Sustainability Officer, Gwenaël Guillen.
Gwenaël Guillen (Chief Sustainability Officer)
Thank you, Daniel. Good morning, everyone. All of this is grounded in our ongoing commitment to sustainability and the communities where we operate. The company did not report any significant environmental incidents for the three months ending March 31st, 2024, and we remain focused on ensuring the health and safety of our employees. We plan to release a formal sustainability report in June, and we are developing and implementing a sustainability framework based on key principles like risk and opportunity management, integration, and a dedication to evolving international best practices, standards, external reporting, and assessment. I'll pass the call back to Daniel to discuss upcoming milestones.
Daniel Racine (President)
Thank you, Gwenaël. As we continue to deliver on our operating plan and achieve consistently higher production throughput throughout the rest of the year, we'll share updates on several key milestones. For instance, we're currently exploring Bonikro, where we're drilling and updating the resource model at Oumé. This should establish a solid 10-year mine life based on a formal mine plan, transitioning our strategic goal into a concrete plan. We're also building on successful exploration at Kurmuk, with exploration result expected from Dish Mountain, especially at Black Duck Hill and Discovery Hill. We'll report Q2 operational result on August 8th, and we'll continue to provide updates on incorporating Diba and other oxide ore sources at Sadiola, construction progress at Kurmuk, and our financial flexibility plan. With that, I'll hand it over the call to Peter.
Peter Marrone (Chairman and CEO)
So, gentlemen and ladies, let me conclude with 2, perhaps 3 observations. We will provide, as Daniel mentioned, another exploration update, primarily for Kurmuk. Dish Mountain is one of the two initial open pits. It is showing an extension. We expect more ounces, and it will be a new contributor or a continuing contributor, perhaps, to our goal of over 5 million ounces at Kurmuk. Oumé is planned likely to extend mine life at Bonikro. With our exploration successes, we think it's important to highlight the direction that that's taking before we deliver a resource estimate over the course of time. Oxides, oxides, oxides at Sadiola to process through the current plant and the new plant by 2029.
We have a very large inventory of proven and probable reserves in fresh ore, but our objective has been, for the short term and intermediate term, to increase our inventory of oxide ounces. Diba is a contributor toward that, but we have discoveries in the main Sadiola tenements that assist us in that regard. Greg touched on the potential stream in the Côte d'Ivoire assets. We did not plan to fund improvements to the plant, and we have a large budget. This is at Agbaou, and we have a large budget for exploration because of the successes that we're seeing, the opportunity that is there. It's not part of our budget or our guidance, but we think it is prudent to advance these efforts.
A stream that is at very, very low cost of capital, certainly on the basis of proven and probable reserve, will allow us the opportunity to do that. Let me conclude by saying, again, we have short term, intermediate term, and long term goals or longer term goals. Short term, more oxide feed coming to Sadiola and increasing the number of ounces in inventory at Bonikro and Agbaou or Côte d'Ivoire complex and continuing to advance Kurmuk. Intermediate term, really punctuate the importance of production improvements, cost improvements, operational initiatives, and then ultimately bringing Kurmuk into production with an initial production profile of 175,000 ounces in 2026. But to remember that the production profile is closer to 300,000 ounces, between 250,000 and 290,000 ounces life of mine at that asset. The longer term, of course, is to complete the expansion.
We're in a phased expansion at Sadiola and to finalize that transition to what we think will become a world-class mine with close to 400,000 ounces of production and all-in sustaining costs below $1,000 per ounce. With that, ladies and gentlemen, let's open up the call to questions.
Operator (participant)
Thank you. We will now take questions from the telephone lines. If you have a question, please press * one on your device's keypad. You may change your question at any time by pressing * two. Please press * one at this time if you have a question. There will be a brief pause while participants register. Thank you for your patience. Once again, please press * one if you have a question. And the first question is from Don Dudek from National Bank Financial. Please go ahead.
Don DeMarco (Analyst)
Thank you. Thank you, operator. Good morning, Peter and team. Congratulations on a strong quarter at Sadiola. I see AISC guidance. So, of course, it implies that costs are going to be lower as you execute on a backend-loaded year. I was just wondering, does the Sadiola AISC guidance, $1,150 an ounce, include contributions from Diba?
Yes, it does, Don.
Okay. Okay. Well, I see that you're into Diba now in Q2. And can you give us any more color on how much contribution from Diba you might see at the mill in Q2?
Peter Marrone (Chairman and CEO)
Well, we said in our disclosure that it would be a significant contributor. We haven't given a number, but that number is expected to be a large one of roughly 200,000 ounces of production. It should not come as a surprise that somewhere in the range of 40% will come from Diba. However, we want to emphasize again that we're making these discoveries, as Daniel mentioned, at Sekekoto and S12. We're advancing those discoveries. Those could be brought into production comparatively quickly. So while the current mine plan contemplates about 40% of our production coming from Diba, we'll look to see whether or not we can supplement that with some of the ore that comes from the existing tenements, as I mentioned.
Don DeMarco (Analyst)
Okay. Thank you. Just shifting over to expansion CapEx then, just company-wide, it's below maybe an expected quarterly pace one would expect for guidance. Is there any reason for this? And have you seen spending at Kurmuk pick up so far in Q2?
Peter Marrone (Chairman and CEO)
Well, I can pass this to Greg for further comment, Don, but it is consistent with our budget. So we didn't underspend or overspend in our budget for the quarter. So it's a very typical ramp-up. The best way that I can describe it, and you've seen this before in development-stage assets, is the worst thing that could happen is to rush into the development. The best thing that could happen is to plan and plan and plan and plan and make sure that we've got the plans done right, make sure that we've got the logistics right, the infrastructure, the support. So the result of all import and export, making sure that all of that is in place.
The result of all of that is that we expected that that ramp-up would occur throughout the year, but the first quarter would be lighter than the balance of the year.
Don DeMarco (Analyst)
Okay. Thank you. This is the final question.
Peter Marrone (Chairman and CEO)
Greg, do you want to add to that?
Don DeMarco (Analyst)
Sorry. Go ahead, Don. Yeah. That's a final question. Just a question on Mali then. The 2023 mining code has been topical for some other companies. Is there any exploration or other assets at Sadiola that might fall under that 2023 mining code?
Peter Marrone (Chairman and CEO)
Everything that we have in the company is under a convention that was entered into in 2020, an amendment to the convention. That convention extends for the next couple of decades. We do not see that we're subject to the 2023 law. What we said in our disclosure is important. We recognize the importance of being cooperative and recognize the importance of communication with the host nations. The host nation is looking to improve the split of economics between the owner and the state. We're having discussions. They recognize that we have a convention, and we recognize some of the economic issues that the state is facing and how we need to find a way to deal with it. That's the best way that I can describe it at this point. It is a discussion, but there's nothing that is in our tenements.
There's nothing that is in our exploration efforts that would be outside of the convention.
Don DeMarco (Analyst)
Okay. Okay, Peter, thank you for that. That's all for me. Good luck executing on a backend-loaded year. Thank you.
Peter Marrone (Chairman and CEO)
Thank you.
Operator (participant)
Thank you. The next question is from Ingrid Rico from Stifel. Please go ahead.
Ingrid Rico (Analyst)
Yeah. Good morning, Peter and team. Congratulations on the exploration success that you guys are having at the operations and the updates on the initiatives that are happening at all the sites. I have two questions. I'll start with Diba. If you could maybe elaborate a little bit more on the ore control drilling, what have you been seeing, and what can we expect on sort of that grade this year?
Peter Marrone (Chairman and CEO)
Greg.
We, at the moment, we're busy with a lot of infill drilling at the moment at Diba. The results are coming out and it's being modeled at the moment. The results are very close to what the initial exploration results are coming out, and the grade is higher than what we're currently treating at Sadiola. We expect something in an order of, if I have to put to a range here, 1.5-1.8 grams per ton going forward with Diba.
Ingrid Rico (Analyst)
Okay.
Peter Marrone (Chairman and CEO)
And Ingrid, part of that infill drilling, there had been historical artisanal miner activity at Diba. So we included a dilution factor that, with the infill drilling, is demonstrating that we were being overly conservative in that dilution factor. So the result of that is we may actually have more ounces of Diba than we anticipated.
Ingrid Rico (Analyst)
That's good to hear. Just keeping with Diba, what are sort of the remaining critical items that you have to complete to get to that production at the end of this quarter?
Peter Marrone (Chairman and CEO)
At the moment, we're busy mobilizing mining equipment to site, the initial phases of preparing the site, fencing off, having offices there, diesel bowsers, all of the basic operational stuff together. But going again, that's about 20 km away from the existing infrastructure. That is all in place now. So as of next week, we're going to start moving mining equipment, and we expect towards the end of this month to start with pre-stripping and going in full mining phase in the following month.
And Ingrid, outside of operations, we've made commitments on community matters. So we are now in that discussion. Again, it is going well. And part of that discussion is how do we provide employment, particularly to some of the youth in the local communities. So that is advancing very well as well, but that is one of the important factors for us before we're finally mining there in the end of this quarter.
I think just something I forgot that's important to mention is that the whole route between Diba and the mine site is now 95% complete. There's one or two sections where we just have to make it a little bit safer and wider, and we're busy putting spotters in place on that road when we start hauling.
Ingrid Rico (Analyst)
Great. Okay. Moving on to maybe the Ivory Coast, I was reading in the MD&A that the country is having some power generation issues or some issues with power generation plants. What are sort of the things that you guys are doing to have sort of reliable power and sort of not affecting the operations in the coming quarters?
Peter Marrone (Chairman and CEO)
So this has happened before in Côte d'Ivoire. Interestingly, in the private company, this is before this management's involvement. In the private company, there'd been a recommendation early last year, late 2022, for backup power. We've initiated that program. We're now deeply involved in bringing generators to the two operations so that we can provide that backup so that we are self-reliant. And that's the important point here. It is not just about power, though, in the company. We've initiated an entire program of self-reliance. But in the case of Côte d'Ivoire, it is about power. And so we want to make sure that we've got that consistency. And we've now mobilized on those generators as a short-term implementation. In terms of the intermediate term, we're now deep into discussions on solar.
That's something that is encouraged by the state, and it's something that we think should be pursued, and we're pursuing it.
Ingrid Rico (Analyst)
When do you think are you intending to do some studies ahead of making a decision on the solar plant, or is that something that would move to the execution pretty quickly?
Peter Marrone (Chairman and CEO)
Well, we're at the discussion phase with providers at this point. They're advancing well. I would expect that over the course of this year, we would be in a better position to be able to say what we can do on that. But most importantly, we do have power. There is power that is generated off of the grid. We're doing this because we think it is prudent to do. I said at the beginning, Ingrid, that it's about risk mitigation and allowing us to take advantage of opportunities. So if there is a risk of inconsistent power in any jurisdiction, that applies to Toronto. It applies to any place in the world. Then we should have backup. And so we think it is prudent to take advantage of what was a recommendation made last year to the private company. We're taking advantage of that opportunity. We're already well advanced.
We're already mobilizing on that. So I think the important thing is the generators are the first step. Solar, I think, is a longer-term solution, but we're beyond the investigative phase at this point. We are in discussions with providers, and we're looking at studies to be completed over the course of this year.
Ingrid Rico (Analyst)
Great. My last question, Basie, if you can remind us, any other sort of plant shutdowns that we should be expecting in Q2?
Peter Marrone (Chairman and CEO)
No. What we've done actually with the power is, when we were asked to stop operations every now and again from the, we had very good cooperation from the supply entity. They would give us advance warning of power outages. We did a lot of maintenance during that period so that when we go back on full power, we would get the benefits of that opportunity maintenance, which we've already executed on.
Ingrid Rico (Analyst)
Perfect. Thank you.
Operator (participant)
Thank you. Once again, please press star one at this time if you have a question. Your next question is from Anita Soni from CIBC World Markets. Please go ahead.
Anita Soni (Analyst)
Hi, Peter and team. I just wanted to ask a quick question on the financials. So I think I just wanted to get an idea of the run rates for the year on things like depreciation, interest, and G&A. Is Q1 typical, or how will those three things evolve over the course of the year?
Jason LeBlanc (CFO)
Yeah. I mean, it's pretty typical. Maybe a little bit of variability just with units of production, but.
Anita Soni (Analyst)
Okay. And then on the taxes, the same thing, same question?
Jason LeBlanc (CFO)
Yeah. We were a little bit lower than the initial plan, I would say, in Q1. So I think we guided $60 million. It's a little bit higher in Q2 and then the balance over Q3, Q4, but pretty even.
Anita Soni (Analyst)
Similar question on the cadence of capital spend over the course of the year.
Jason LeBlanc (CFO)
Oh, capital is a little bit different, Anita. As you said, we've scaled. That scales up primarily on Kurmuk, heavy planning on the front end. So it literally scales by quarter in terms of spend. The sustaining at the other operations are more modest, but it's really driven by the profile at Kurmuk. So yeah, we fully expect to spend our budget for the year.
Anita Soni (Analyst)
Okay. Thanks. And I noticed you had disclosure by each asset for production weighting, so I appreciate that. And I think Ingrid's asked my other question, so I'll leave it there.
Peter Marrone (Chairman and CEO)
Thank you, Anita.
Operator (participant)
Thank you. There are no further questions registered at this time. I'd like to turn the call back over to Mr. Marrone.
Peter Marrone (Chairman and CEO)
So ladies and gentlemen, on a somewhat uneventful quarter, we delivered on production expectations and cost expectations. The trend is showing favorably. We expect that to continue for the year. And we expect, just as importantly in the intermediate term, to continue to advance Kurmuk and to demonstrate by the end of the year that we are on track for that production expectation in 2026 for 175,000 ounces and the longer term, of course, for the full year of between 250,000 and 290,000 ounces per year. So with that, we'll conclude our call, and we'll look forward to seeing you at our shareholder meeting later this morning.
Operator (participant)
Thank you. The conference has now ended. Please disconnect your lines at this time. We thank you for your participation.
