B2Gold - Q1 2024

Transcript

Clive Johnson (CEO)

...Welcome to our call to discuss our first quarter 2024 operating and financial results, and to give you a corporate update as well. Many of you or all of you will have seen the news release that's come out. It gives quite a lot of detail. We're off to a solid start for 2024. We produced over 225,000 ounces of production across the facilities and the places in line with what we expected, with all three B2Gold operating mines performing well. Importantly, cash operating costs and all-in sustaining costs in the first quarter both came iinn well below our annual guidance ranges, and Mike Cinnamond can give you a lot more. Mike Cinnamond will be talking shortly to give you a lot more detail.

But very strong quarter, excellent financial position, going forward, the mines are operating very well. For 2024, and what we have described as a transitional year for B2Gold, we have made strong progress on two of our most important items for the year. Firstly, we've had some encouraging discussions with the Mali government, throughout the start of 2024. It's really important to stress that despite some rumors out there and irresponsible journalists out there, the fact of the matter is, as Barrick confirmed recently, there's been absolutely zero indications that the government of Mali is considering nationalizing western-owned gold mines. On the contrary, we have had productive dialogue with the government on how our opportunity in the Fekola region could fit in the long-term future of the Fekola complex.

The government has expressed a desire to fast-track the granting of an Exploitation Permit once the Implementation Decree in the new 2023 mining code is finalized. We believe over the next few months, we have potential to agree with the government and look forward to starting to truck ore from what we call the Anaconda Area to the north, down to the Fekola mill. The roads are built. We're ready to go, and we need an Exploitation Permit to do that. As I said, which we're hoping to secure shortly. It's definitely a mutual interest we have with the government. We want to increase production by potentially 100,000 ounces a year by trucking this good grade material down to the Fekola mill, and the government wants more revenue from gold mining.

This is one of this, and going after our illegal artisanal mining are the two best opportunities for the government of Mali to increase revenue from gold mining. So we'll keep you posted as we move forward, hopefully, shortly, as soon as the plans are going forward with the trucking ore from the Fekola region. The other most important area of business we are focused on is the construction progress at Goose. Clive can give you an update on how we're progressing. Very encouraging in the sense that we just closed the Ice Road. The Ice Road was extremely successful this year in getting everything up we need or everything up the road, we need 160 km of Ice Roads, everything up to complete construction.

So it was a major year of getting equipment in for construction and, of course, running the operations as well. Excuse me. That was a great success, and that's a real tribute to our logistical team, our experienced partner of building ice roads and just a great team on site to make all of that happen. That has significantly de-risked the project by doing that. We did announce today a slight delay or last night, a slight delay on the estimate of first gold at the Goose Project from Q1 2025 to Q2 2025. Bill will give you detail on that, but I think it's really important to point out that the construction team has delivered, the B2Gold construction team has delivered despite picking up a project that was partly...

Some equipment had been ordered, a lot of things had been done in terms of the previous owner looking to move the mine into through construction. So we inherited some good things, and we inherited some challenges. So we'll talk a bit about what we've done to turn the Goose Project into a B2Gold project. The main reason for the shift from the quarter was the fact that the mill could be built on schedule at the end of the first quarter of 2025, but because of some delays in the open pit and underground mining schedule, we won't have ore to feed through the mill. So that's the driving force by it moving to the second quarter. The construction is actually on track. We expect it to remain on track.

So Bill will give the details on that. I think it's really important to underline the fact that one of the things that we benefited from in the acquisition of Sabina was that they did a very good job in exploration, in permitting, and an excellent job in relationships with the Inuit population and also the government. So that part of the team that was involved in the Goose Project has remained with the project, and they are very important to the success of the project. Was just up in Iqaluit, the capital, a couple of weeks ago for the Nunavut Mining Symposium. It was an excellent conference, very upbeat.

We are in the right place at the right time, and the population and the government at every level is very excited about B2Gold completing the Goose mine and looking forward to great success there. Obviously, exploration is a big part of what we do historically, and there's a reason why half of our large exploration budget for this year, $63 million. Over half of that, half of that exploration budget is focused on Baffin Island for a reason. We see extraordinary potential there, and I've had some very good encouraging results so far in our drilling campaign. Vic can answer questions about that.

Just in terms of catalysts going forward, and I'll pass over to Mike, I think the catalyst going forward, obviously, as I mentioned, is the resolution in Mali and being able to move forward with trucking ore. Looking forward to a very good construction season this year at Goose, and we'll continue to update. Also, I think another exciting potential is looking at Gramalote. As everyone probably remembers, we had a joint venture with AngloGold Ashanti and looking to build a big mine to justify that for two companies. Now it's owned by just by B2Gold, and we've been looking at a number of different cases. We will come out with results of a new study before the AGM.

And what they're targeting now is something around 6 million tonnes a year case, and that could produce 200,000 ounces of gold a year. We're waiting anxiously to look at the economics of that. We're not quite there yet, but we've had some encouraging signals from the engineers that we can reduce our footprint and reestablish our permit. But actually could be looking at quite a potentially interesting economic opportunity. So if you add it all together, you look at the catalyst and the future of gold production potential for this company, we have the potential for 100,000 ounces a year to come from trucking ore for Fekola, as I mentioned.

Over 300,000 ounces a year is expected from Goose, with gold production starting in the middle of 2025, as I mentioned. And then if we wave our arms a little bit, although soon, if Gramalote is economic, that can add another 200,000 ounces of gold production potentially to the company, subject to our study coming out and being positive. So there's 600,000 ounces of growth from existing assets. In addition to that, robust exploration programs, also our investments in junior companies will continue. So when we look to the future, it's very bright. We're in extremely strong financial position, paying an industry-leading dividend on a yield basis. So we're excited about where we're going, and this is a transitional year, and yes, there's been some challenges in the first quarter.

We've met them, but seems to get lost in the shuffle here, but we performed yet again, another quarter of strong financial results. This will be, we're on track for our ninth year of delivering on our guidance about production and about costs. So with that, I'm gonna hand it over to Mike Cinnamond to give you an overview of the quarter and the financial point of view. Thank you.

Mike Cinnamond (CFO)

Thanks, guys. So I'll just jump into the operations. Firstly, Fekola, we produced just under 120,000 ounces of gold, which is in line with our guidance. Cash operating costs were well below our annual guidance range and all-in sustaining costs of $1,436 per ounce of gold sold. It was at the low end of our guidance range. So also as a reminder, I think Fekola, 2024, Fekola is a transitional year, where we, we'd estimated that gold production would be lower than prior years, and we have a lot of capital programs ongoing this year that are scheduled to complete in the year. For 2025, we, this trend should reverse, and in 2025, gold production should increase, and all-in sustaining costs drop as capital programs get completed.

Moving to Masbate, we had another excellent quarter at Masbate, with the mine producing almost 48,000 ounces of gold. Cash operating costs and all-in sustaining costs were both well below our annual guidance ranges. Fuel, lower fuel prices definitely contributing there at all operations at Fekola, Masbate, and Otjikoto. Masbate, this led to very strong operating cash flow, and we anticipate continuing through the year at today's gold prices. Finally, last but not least, at Otjikoto, we continued our momentum from a very strong fourth quarter in 2023. In the first quarter of 2024, Otjikoto produced just over 45,000 ounces of gold. Like Masbate, both cash operating costs and all-in sustaining costs were well below our annual guidance ranges. I'd say for Otjikoto as well, we also benefited from a weaker Namibian dollar.

So, as well as higher production, lower fuel prices, we also had a weaker Namibian dollar, which helped our costs in US dollar terms. And also excitingly, we look forward to continuing to advance the Antelope discovery, which we think has the potential to extend underground mining in Otjikoto perhaps into the twenty-thirties. And we remain, as at the end of Q1, we remain in very strong financial position. Current gold prices, of course, are only helping that, enhancing that, and, you know, I think you can see those going forward. And as we announced in January, we completed a $500 million prepayment of gold with some of our bank syndicate members, which completely fortified our balance sheet for the growth projects we want to accomplish in the near term and the medium term.

At the end of March, we had a cash balance of $568 million and nothing drawn in our revolver, so we've got a $700 million facility available in that revolver. We do anticipate refreshing that facility a bit later in the year. Based on our existing Goose budget that we announced in January, we've just over $400 million left to bring Goose into production. Now that the winter ice road campaign has finished successfully, you'll hear more about that from Bill, and we've brought materials to site. We have announced our decision to push back the Goose schedule, as Clive said, by 3 months. We've undertaken, as well, to update our cost to complete estimates for Goose by the end of June, I think, the end of the second quarter; we'll come out with those.

But I can say that based on where we are today, we're very confident that we have the resources to not only complete Goose, but we also have the liquidity for potential organic, organic growth projects in Namibia and Colombia, as well as continuing to pay an industry-leading dividend. So not only are we very comfortable with the financial situation, but it's also expected to be further strengthened in 2025 when the Goose capital is completed, consolidated gold production is expected to increase, and all-in sustaining costs and growth capital is expected to decrease. So a high level summary, it's Q1. It was a good quarter, I would say, operating-wise. And so with that, I think I'll pass the call over to Will for discussion on the Goose construction progress.

William Lytle (COO)

Yeah, thanks, Mike. So I'll quickly touch on the Goose construction progress. I think we've signaled very clearly that this was on a critical path.

... to have success, and I'll tell you that I think the team did a phenomenal job bringing everything down. Despite a high snow year, an El Niño year, which was a bit of an anomaly, we were able to bring everything down from the marine laydown area. This significantly de-risked the remaining construction schedule, and now we have everything that we need, basically, to build out the Goose Project on site. And just to remind everybody out of what we brought down, some of the key things are we brought down almost 19 million liters of fuel, all of the modular units necessary to expand the camp to 500, which will allow us to get through construction.

All of the stuff necessary to build the mill, all the steel and rebar, all the cement necessary, more than 3,000 bags, more than 4,000 bags, actually. And all the reagents necessary to commission and operate the mill starting in 2025. So at the end of the day, as Mike said, and Clive alluded to, the mill itself is ready, would be ready to go in Q1 2025. The construction team has done a great job of coming in and grabbing hold of this project and making it a B2-type construction. The mill construction does remain on schedule. We had previously told the market that we are in fact ahead in some areas. Installation of the ball mill is progressing ahead of schedule.

All the shell sections are in, the discharge heads, trunnions, pinions, and bearings have all been completed. What really is, is slightly behind schedule is the open pit and underground, and that really relates to the commissioning of the equipment and getting some of the people in during some of these heavy snow days. The current schedule indicates that approximately three months must be added, and that really is to allow us to mine out some of the Umwelt open pit and underground, to allow us to get the appropriate amount of material on the stockpile to start the mill. So with that, we're talking about first gold pour in Q2 2025.

And that, of course, does reduce what we're gonna produce in 2025, but I do wanna, I do wanna indicate that it's not like those ounces are lost. They've just been pushed into 2026. So instead of having the first five years at +300,000, now we're talking the first five years at 310+. So overall, I guess I'd say I remain very confident in the path forward for Goose, and this is absolutely a world-class operation that moving in production in Q2 2025. With that, I'll return it back to you, Clive, for questions.

Clive Johnson (CEO)

Can you talk a little bit about the trade-offs going forward, about capital that's there?

William Lytle (COO)

Yeah, there were some questions on whether or not we were gonna be on budget given the new schedule. And I'd say we're working through that right now, but just because the road just closed, you know, I can't tell you exactly where we're at. There are gonna be some overs and unders. But remember, right now, the 2024/2025 winter ice road season is opening. So what we're seeing is we're actually ordering anything which would be kind of in that critical spares for 2024/2025 right now. So we'll be able to give you actual costs for what our carrying costs are gonna be. But also, you know, we've done a good job kind of looking at what a B2Gold design would look like.

Certainly, John Rajala has looked at reagent consumption. Can we bring those down? The answer is yes. We've talked about the actual fuel costs that, you know, Mike alluded to already, that some of the other operations are under cost, so we're seeing how that impacts the, the Goose projects. We're working with vendors to see if they can carry stock as opposed to us ordering it, and that's putting it into our critical spare inventory. And probably one of the big, big ones is the labor. So the labor, obviously, is a function of what has to be done. Given the fact that we're actually ahead of construction in some areas, we feel like we can certainly flatten those costs a little bit to make sure that we remain materially on budget.

Clive Johnson (CEO)

Okay, thanks, Will. I think, sorry, questions? Yeah. I think, well, the operator will now move to, to Q&A.

Operator (participant)

Certainly. We will now begin the analyst question and answer session. To join the question queue, you may press star, then one on your telephone keypad. You will hear a tone acknowledging your request. If you are using a speakerphone, please pick up your handset before pressing any keys. To withdraw your question, please press star, then two. The first question comes from Ovais Habib with Scotiabank. Please go ahead.

Ovais Habib (Analyst)

Hi, Clive and B2Gold team. Congrats on completing a successful ice road season at Goose. Just a couple of questions from me, Clive. Number one, starting off with Mali. In regards to the 2023 Mali Mining Code, obviously B2 is having discussions with Mali. Barrick is having their own discussions with Mali on Loulo, and Resolute is likely having discussions as well. So the question is: Are you all asking for the same terms, or are the terms specific to each of your projects? I'm just trying to figure out, you know, how is Mali looking to form a new kind of set of terms for the 2023 mining code?

Clive Johnson (CEO)

Sure, yeah. Good question, Owais. Everyone is in a slightly different situation because of the, the timeframe in terms of some of the mining conventions that were signed with the government. So we're, we are, as you know, and the government's acknowledged time and time again, that the Fekola is grandfathered by law under the 2012 mining code, and we have a three-stage flat, flat mining license till 2040. I think it's twenty, 2040-

William Lytle (COO)

Twenty forty-four.

Clive Johnson (CEO)

2044. So that's a very positive thing from our point of view, and now the conversations with the government are really around the implementation of the 2023 code, which of course, the regional opportunity, they're all under an exploration license, so they need to move to an exploitation license. So the regional will be subject to the 2023 mining code, yet we feel confident that we've got some pretty robust economics there, and are looking forward to realizing the final agreement. I can't speak for Barrick or anybody else, but everyone has their own different particular license and issues, and Barrick will, and others are going to be down there, as we will be over the next while to try to finalize the government.

But we are in two different situations, so we're the only company in Mali, that I know of, that has something that can quickly turn into more revenue for the company and for our partner, the government of Mali, by trucking the ore. And that could be a significant amount of revenue. When you look at what we're projecting now, when we look at our numbers, the regional production is very, can be very important to the future of Fekola. Of course, trucking the ore down, the roads are built, we're ready to go. So, we're in a different situation. It's up to Barrick and Resolute to speak for themselves, but we're confident where, where we sit, and we definitely have a good relationship with the government. We're concerned about the 2023 code, I guess, in terms of future production for Mali.

Mali has been, despite some of the issues and rumors and stuff that we see out there, Mali has been a very good country to invest in, in gold mining when you look at Randgold and now Barrick and ourselves and others. So the issue there is, the government wants to take too big a piece of the pie in 2023. The big question is: Who's gonna go and explore for the next Fekola in Mali? If the economic terms are much less attractive than they have been. Just a reminder, we built the Fekola mine for over $500 million, 100% at our risk. To date, the government of Mali has realized a little over 50% of the economic benefit of the Fekola mine with no risk.

I think that's a deal any business would take all day, every day, if someone wants to spend all the risk capital, we get 50% plus of the upside. So I'm worried that the new code is going to change those economics. So it doesn't speak to what we're doing, but it speaks to, because of our very robust economics and the trucking opportunity, but it does speak to the future of gold mining in Mali. And I hope the government, over time, will consider whether they want to become one of the less attractive countries to invest in the gold mining, as opposed to being one of the ones that's been attractive.

Our discussions are on the way, and they've been positive, because I think we're on the same page with the government, which is to support of Fekola going forward and also with the regional opportunity.

Ovais Habib (Analyst)

Thanks for the color on that, Clive. And just follow up on that, in terms of, you know, assuming, you know, you know, the negotiation goes well, you know, and all the terms are agreed upon, how fast can you get the Exploitation Permit once everything is set in motion?

Clive Johnson (CEO)

Well, if we reach agreement in the near term, which we're hoping to do, then the exploitation license, apparently the government's interested in fast-tracking that, so that could be a matter of, hopefully, a few months, potentially. And then we've got basically some pre-stripping to do, but we're pretty much ready to go. We've de-risked the project in the sense that we have built the facilities, we've built the roads, we're ready to go. So that could be a fairly quick opportunity. There'll only be just stripping to do for-

Ovais Habib (Analyst)

Three months.

Clive Johnson (CEO)

Three months of stripping, and then we'll be into ore.

Ovais Habib (Analyst)

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

Victor King (VP Exploration)

Yes. Not at all. The infill that we did, that we've done to date, we did quite a bit last year, has certainly corroborated or supported the Sabina model. The infill is merely to get the indicated resources to our standard. And that also improves, or helps improve the design that the engineers need to do. But it's. There's no question about the model. It's solid. We understand what the controls are, and the results we've got have pretty much confirmed our model.

Ovais Habib (Analyst)

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

Victor King (VP Exploration)

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

Ovais Habib (Analyst)

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

William Lytle (COO)

Well, I went through some of them already, for sure. Like I said, it's tough to say some of them, because we're right now in the process of ordering for 2024, 2025. So those RFPs are out. You know, we're in the process of shutting down the winter roads, we're in the process of evaluating that. But if you look at, like I said, things like reagents, that we think that's gonna be an under, for sure. I think some of the critical spares, some of the things that we can hold off of site, I think those are gonna be unders. Remember, in theory, you would have one more shipping season, so anything you didn't wouldn't have to fly in, you know, that could be an under.

But the counter also holds true that if there's something critical we need for the mill, that you might fly it in this year, that might be an over, right? Or maybe on the mill, on the mining side, because we didn't commission the trucks as quickly as we thought, a lot of those operating costs for those trucks are gonna be an under up to this point, which is not to say it's not gonna catch up. So that's why, you know, I can't really tell you exactly, but I certainly feel very good that we are currently on budget or under budget at this time.

Ovais Habib (Analyst)

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

Clive Johnson (CEO)

Thanks, Ovais.

Operator (participant)

The next question comes from Ralph Profiti with Eight Capital. Please go ahead.

Ralph Profiti (Analyst)

Thanks, operator. Good morning, Clive, and maybe a question for Mike. I just wanna ask, you know, sort of a follow-up or in a different way, the Goose CapEx question, because, you know, at the time we get the update in June, you know, we're still sort of 6-9 months ahead of first gold production. Will all of the outstanding spending be committed or locked in at that time? Or, you know, I'm just kind of trying to get a sense of what state of finalization we'll be in when we get that June update.

Mike Cinnamond (CFO)

Can you clarify what you mean by locked in or committed? We won't have spent-

Ralph Profiti (Analyst)

Yeah, basically, yeah, sort of, yeah, yeah, thanks for that. Just the amount of committed CapEx, right? In the context of total, by the time we get to June.

Clive Johnson (CEO)

How much have we spent so far, do we know?

Mike Cinnamond (CFO)

We've spent, like, so far in cash terms. We've spent $840 million. Project to date, we haven't spent all that, but project to date is $840 million, and there's probably another $60 million+ payable, so total cost, $900 million in that whole part. And you've got to compare that to the total that we were talking about for construction of $1.06 billion. Pre-development, $200 million, and working capital, another $205 million. So $1.45 billion-

Ralph Profiti (Analyst)

Yeah.

Mike Cinnamond (CFO)

Basically.

Ralph Profiti (Analyst)

Okay.

Clive Johnson (CEO)

So we've de-risked it. The amount that's been spent... Good question. The amount that's been spent so far, on things that have been ordered, was substantially de-risked by the amount we've spent or-

Mike Cinnamond (CFO)

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

I guess, we're trying to give you some guidance on that when we get a new cost estimate, and not only breakeven cost.

Ralph Profiti (Analyst)

Yeah. Okay, gotcha. That's exactly what I was looking for. Thanks. Clive, Finland, can you talk a little bit about, you know, your, your role in the country, given some of the, you know, decisions out there that we're waiting for? You know, should we think about your approach as sort of more, less, or different than what we're seeing now? And just sort of how you're thinking about that country as a jurisdiction when you, when you approach exploration, and future potential.

Clive Johnson (CEO)

Yeah, we've been at it for a while there. We had some exploration success for sure. We didn't get out of the park and find millions of ounces of gold. That doesn't mean there's still potential for that. Obviously, our ground is very important to Rupert in terms of the ultimate development of an open pit, and also because of the 600,000 ounces or more potential that we see there. But I think there's an elegant deal, and we are happy to be shareholders of Rupert with the closing of the, soon-to-be closing of that deal, allows us to recoup our exploration expenditures today, potentially by owning their shares, but also be part of the future. That's a very good deposit. Someone's gonna build it at the end of the day.

So we thought it was a really good way to stay involved in the sense of through share ownership and on the upside potential, but also focus our exploration among some of the things we consider to be higher priority, such as Goose. And as we get back into trucking ore for Fekola, as we start that, we will be looking at more exploration there as well. Great potential there, the regional, not only for additional oxide, heavily weathered saprolite material, but also the sulfides as well. So, that's the rationale. I think it was a very good deal. Good for Rupert, good for ourselves, and hopefully good for our joint venture partner as well.

Ralph Profiti (Analyst)

Hmm. Thanks for your thoughts. Appreciate it.

Clive Johnson (CEO)

Thank you.

Operator (participant)

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

Anita Soni (Analyst)

Good morning, Clive, Mike, and Bill. So I just wanted to understand the delay, and specifically, what's the pinch point? I'm assuming it's a tailings dam. And I just wanna sort of understand what the mechanics are there in terms of why the three months was added.

William Lytle (COO)

Yeah, well, kind of, but not 100%. It's the combination of putting ore on the pad and completing the Echo Pit, right? So basically, we've got 10 trucks on site. When we took over and were commissioning the trucks, we identified that we didn't have some of the personnel resources that were appropriate for the scope, and they didn't get the trucks commissioned on time, and there were some issues there. So basically, we fell behind mining in both Echo Pit and Umwelt pit. And so, like I say, a combination of the two. I can do one or the other and still make the schedule, right? I can put them on the pad or have no tailings, or I can do Echo Pit and have no ore.

I couldn't do both given the schedule I've got now. That's the delay.

Anita Soni (Analyst)

Okay, sorry. Is the Echo Pit the one that's the, that's where the tailings at, like, where the tailings is gonna be deposited? Is that-

William Lytle (COO)

That.

Anita Soni (Analyst)

Is that what's happening?

William Lytle (COO)

That's, that's correct. That's correct.

Anita Soni (Analyst)

Okay. And then long term, like when does the Echo Pit tap out on capacity? Do you build another tailings dam after that?

William Lytle (COO)

Absolutely, we do. We start, it's gonna go from Umwelt, and then I think it goes into Llama eventually.

Anita Soni (Analyst)

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

William Lytle (COO)

I think it's... I might have to get back to you now. I think it's 15-

Anita Soni (Analyst)

Okay.

William Lytle (COO)

-is where we ultimately get, but I can't remember exactly. If I'm wrong, I'll come back to you.

Anita Soni (Analyst)

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

William Lytle (COO)

Yeah, I don't have that number right in front of me.

Anita Soni (Analyst)

Sorry.

William Lytle (COO)

I'll get back to you on that.

Anita Soni (Analyst)

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

William Lytle (COO)

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

Anita Soni (Analyst)

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

William Lytle (COO)

Well, a lot of stuff keeps me up at night, but let's start with... Hello?

Anita Soni (Analyst)

I'm still here.

William Lytle (COO)

Let's start with fuel tank construction, right? We've got to, as you know, we've got to bring in almost a little bit more than 80 million liters of fuel at both the MLA and at site. Those tanks have to be built, and in particular, the one at the MLA, because in September, that boat's gonna arrive. We've already paid for it. And so if there's no tankage there, we got a problem. Right? So that's probably the next thing on the critical path. Giving us additional kind of 3-month buffer. Don't ever tell the construction guys I said there was a 3-month buffer now, because they're still heading towards the original schedule.

But if you look at, like, the underground and stuff, that really gives us some opportunities to look at various options, and that's what we're going through right now is how do we really optimize it, given this kind of bit of reprieve from an operational perspective. But everything else is going quite well.

Anita Soni (Analyst)

Okay. The final question, are you guys gonna do the site tour again in September so we can recalibrate ourselves or?

William Lytle (COO)

Yes.

Anita Soni (Analyst)

Okay. All right.

William Lytle (COO)

Yes.

Anita Soni (Analyst)

Thanks. Yeah. Thank you very much for taking my questions.

William Lytle (COO)

Okay, thank you. Thanks to you.

Operator (participant)

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

Don DeMarco (Analyst)

Thank you, operator. And good morning, Clive and team. Congrats on a strong, strong start to the year. So to start off with Goose, so we've seen updates on budget and schedule. Do you plan to release any updates on, say, OpEx after the mines in production? I think the view is that AISC will increase versus the tech report, but do you have any clarity on maybe the magnitude of the increase or a more precise estimate at this point?

William Lytle (COO)

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

Don DeMarco (Analyst)

Okay. When do you think that would be?

Clive Johnson (CEO)

Yeah, we expect to update the resource model into AIF. So the updated resource will come out the AIF next year. So,

Don DeMarco (Analyst)

Okay.

Clive Johnson (CEO)

We're still talking about the quick follow on that update.

Don DeMarco (Analyst)

Okay.

Operator (participant)

Mm-hmm.

Don DeMarco (Analyst)

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

William Lytle (COO)

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

Don DeMarco (Analyst)

Okay.

Clive Johnson (CEO)

The regional drilling continues, and once, as we said, when we succeed, hopefully, getting the exploitation permit, then we will accelerate some more drilling up in the regional area to further... Remember, the technical report is a regulatory requirement. It did not include any inferred, and as you guys know, not all inferred is created equally. We have a great track record there and elsewhere in turning inferred into indicated. So there'll be ongoing work there, plus additional step-out drilling, numerous zones up and down the belt to test the ultimate potential, mine life of the Fekola Underground.

Don DeMarco (Analyst)

Got it. Okay.

Operator (participant)

Mm-hmm.

Don DeMarco (Analyst)

Thanks, I think my other question's been answered. That's all for me. Good luck on Q2 and the rest of the build.

Operator (participant)

This concludes the question and an-

Clive Johnson (CEO)

Okay, so-

Operator (participant)

This concludes the question.

Clive Johnson (CEO)

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