Allied Gold Corp (AAUC) 2024 Q2 法說會逐字稿

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 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 reserve 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 these forward-looking statements. Please refer to Allied Gold's press release issued yesterday, announcing second-quarter 2024 results as well as the 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 webcast at alliedgold.com

I will now turn the call over to Peter Marrone, Chairman and CEO. Please go ahead.

Thank you very much and thank you to everyone for participating on our call this morning. With me are the following executives of the company, Jason Leblanc, Greg Winch, Daniel Racine, and Gwennael Guillen.

And I'd like to introduce Johann Stoltz. Johan is our Senior Vice President of Operations. Operations have been reporting to him. He is working with Basie and he has assumed the role of operations management and oversight.

And while Basie could not be with here with us in person due to his travel plans, he is on the line, but he wanted me to say that we have considerable bench strength including with Johan. And while Basie has worked on improving our plans, Johan as a mining engineer along with Basie has been focused on improving our mine plans, mine optimization and management.

We improved production in the second quarter, the second quarter production of just over 88,000 ounces, that's 2.5% higher than the comparative period. It is consistent with our guidance and what we said at the beginning of the year, which is an expectation of first half to second half of the year of 45% to 55%. As Jason will note, we are positioned to be in guidance in the guidance range for the year.

But let me also comment that this production level is not truly representative of the true production platform of our mines. It does not reflect the full potential of Diba plus the other higher grade oxide areas at Sadiola as we began processing those ores late in the second quarter, nor does it reflect the CDI complex where we mined far more ounces that are now in stockpile than we processed as we sorted out temporary power situations in the country.

We were processing at partial capacity in Cote d'ivoire given load shedding until backup generators were installed which are now in place in the company. And we advanced stripping at Bonikro to get to higher grade ores. And all in all our minds showed that the total production capacity was closer to 100,000 ounces, which really sets us up nicely for the second half of the year.

Our costs improved. So cost of sales, cash costs and all the costs sequentially decreased since the fourth quarter of last year and the first quarter of this year, all as we anticipated. And as we guided diesel generation, a Cote d'ivoire for the partial periods when there is load shedding is for backup only as thermal generators that defaulted in the second quarter in the country come back online.

We don't see that as a cost pressure given increasing production and low levels of reliance on that backup power, operating cash flows increased. So operating cash flows before income taxes paid and movements in working capital were strong inflows of just under $57 million in the second quarter and significantly higher than the first quarter and comparative period the comparative period last year.

Some of these issues in the second quarter did result in a buildup of working capital. Jason will speak more to that. Mostly that is in stockpiling and inventory buildup which reverses in the third quarter and the fourth quarter this year, we had a strong second quarter gold, realized gold price of just over $2300.

Now gold price is just about $120 higher than that. And again, that positions us comfortably for where we expect to be in the second half of the year, starting in this quarter with a stronger second half beginning in this quarter, higher gold prices that will allow us to get to higher levels of cash flow as we had anticipated, we're investing in the future.

So we have additional oxide ore feeds at Sadiola, Diba proves its potential in the second quarter. And we have many other sources of oxide feed at Sadiola that we're now continuing to advance into mine.

We discussed investing in self-reliance and operational flexibility. We created self-reliance with better mine plans, better performance management and evaluation of mine contractors and that backup power at the Cote d'ivoire complex. We already have this backup at Sadiola and we plan for it at Kurmuk.

We want to be on the grid, but we don't want to be overly reliant on it and we should always have backup power available to us.

We progressed our exploration and growth projects, advanced exploration points to growth in resources and mine life and Greg will speak more to that and we began executing on a financing plan during the quarter.

So let me deal a little bit with the financing plan and the financing strategy of the company. The streaming deal with triple flag finances, the Cote d'ivoire complex. Remembering that we have a $16 million per year exploration budget, so we can repurpose that $16 million per year. As a result of this transaction that brings that money into our treasury, we can repurpose the cash flows that would otherwise be allocated to that exploration program.

We are advancing plans to modify the Agbaou plant so that it can take on more fresh ore rather than only oxides. We can process that fresh ore that will also allow us to be able to bring into inventory more ounces.

We're advancing on our plans to develop booming and optimize the plant at Bonikro as well.

This is at an attractive cost of capital based on reserves and even with a meaningful increase in mine life and overall production. The cost of capital is still very competitive and indeed, I would say that it is modest but this is part of a broader financing plan for the company.

We are well advanced on a package of stream and prepay on Kurmuk. We are bringing forward what we previously had said that we would do a prepay in the first quarter of next year that will fully finance the project.

I am asked the question, why are we pursuing this approach?

And I want to make sure that this is clear, this is a should have, it is not a must have but the cost of capital is modest. The transactions allow us to capture the optionality of the mines and projects that are best captured when they're actually in production. We de-risk the projects certainly on the financing side.

And by taking these actions, we can repurpose our cash flows as an example. We can now look bringing forward the Sadiola expansion and other uses for our cash flow.

So with that, ladies and gentlemen, let me pass the call now to Johan on our operations.

Thank you, Peter and good morning to everybody on the call. During the quarter, the company produced just north of 88,000 ounces and sold 84,611 ounces. Our total cost of sales cash cost and all and sustainable cost. Look at 1547, 1355, and 1498 respectively.

If you look at the quarter by operation Sadiola ended up strongly with an increase of 13% year on year increase in production and closed off the quarter on 51,784 ounces versus 45,799 ounces in the same period last year, initiatives undertaken at Sadiola was the implementation of crushing and screening provided the ability to mill higher volumes with an increased grade feed from stockpiles as well as oxide supplies, Diba the Diba ore was exposed late in June.

And we did an industrial scale test at the Sadiola plant to confirm the optimized processing parameters. This test was yielded better than expected results in higher grade and we've also managed to expose a significant portion of the ore body after waste stripping, current stockpile levels sits at 74,000 tons of oxide grade higher than 1.9 grams a ton and a total stockpile of oxides and 175,000 tons available for processing at the Sadiola plant post the approvals

If we go to the Bonikro, as Peter mentioned earlier, was impacted by power interruptions, but that has been resolved with the generator capacity being installed successfully for both Agbaou and Bonikro.

The production at Bonikro have seen an increased rate of 10% quarter on quarter and we've managed to advance the pushback five way stripping for to access higher grades later in the year for processing.

If we look at the alcohol production for the quarter was stable and many of the bit has been matured and was stripping done completely and that exposed higher grades for processing and stable outlook for the rest of the year.

The Agbaou has also in the outlook seen the successful execution of [CSAT] three that will enable us to access higher grades as well as the maturity of West at seven.

I will now hand over to Greg Winch. Our Chief Geology. Thanks guys.

Thanks, Johan. Good afternoon. Good evening. I'll speak briefly on the company's efforts around increasing the resource and reserve base and future production opportunities through engineering. There's always been a strength of allied and continues to be that we continue to grow resource and reserve bases at all the operations and new operations that that remains the focus of what we're doing.

A very healthy exploration budget and that's now backed up with a, with a world class construction team that's Kurmuk and on the back of all the positive operational outcomes that are improving quarter on quarter, we continue to explore, we continue to add resource and reserve base and we continue to engineer solutions that we can leverage off those and increase production for the company.

So just briefly, I I'll run through the project Sadiola, you know, from the day of acquisition, we have continued to drill and increase the resource base there both in oxide and in transition. All that has been focused on oxide that continues to be the case during the last quarter with discovery of two new oxide resources that previously weren't identified.

So you know, what it speaks to is not only the world class nature of Sadiola mine as a deposit and a project. But also the, the large mineralizing system in that 330 square kilometres of mining license that, that represents it continues to generate good resources and reserves.

And on the back of that, we've been doing a lot of engineering work later in '26. We'll move into a phased expansion whereby we'll be able to treat process more hard rock than historically that project has. It's -- this is to be a phased expansion as we move through to 2029 whereby we'll be able to crush more fresh rock, then we'll be able to process more. Then we're moving towards how we're finally going to achieve much better recoveries through engineering.

And we've had some really promising results from metallurgical test work during the quarter. That, show the true potential of that Auckland and our ability to extract the maximum amount of gold from that which is a world class gold deposit.

So those phased by expansions will continue through 2009. The first one is Phase one, that's well advanced in detail, engineering and procurement and they'll be starting work on that late next year. And that gives the flexibility of the operation to be able to treat predominantly hard off but also be able to increase the production through adding on total at Kurmuk and the exploration continues to be successful.

We keep adding resources every year quarter on every quarter to quarter. Construction started, we're well advanced during the quarter and the first-half, 2024 construction teams on site EPCM contract has been awarded.

The construction camp is well underway for being occupied and built importantly, the construction water dam was completed through the wet season, which is, you know, a big step for the company has been involved in that project for seven or eight years and we've started construction team on site.

I've identified good local contractors as well as a good choice of international contractors that are willing to come and work on the project. So it's an exciting time to be a in addition to that we continue to explore, we continue to explore on the mining license and around the mining license.

You know, it's our view that, you know, the Kurmuk project sits within a Mineral province, a gold mineral province that will continue to provide additional resources and reserves to the project. To the point where we'd like to get the reserve base up to 5 million ounces and that's the aim, that's what the board's asked us to do. And I think for our experience there over the last decade. That's eminently achievable and possibly better.

So, you know, we continue to deliver those. We'd like to see, you know, Kurmuk, we'll be producing 290,000 out of the gold per annum for the first five years and over 240,000 ounces of gold per annum over the life of mine, you know, we'd want to extend that mine life to 15 years to get in excess of 250,000 ounces of gold a year. I think we're well on the path to do that. We are drilling gold with older rigs and people support the construction.

The ore briefly, you know, it is a large focus of our exploration where we've got a week working there at any one time, working up at a drilling around [Bonikro] and (Inaudible) once again, we continue to increase the resource and reserve base and we stay in front of the mine production is, you know, and improve the optionality going forward.

And Peter mentioned briefly before about changes to the milling circuit potentially or [Kurmuk] and you know, the new resource and reserve bank to support that so that we continue to focus on that and the engineering around being able to optimize the results of this story.

So that's the general overview of what we're doing outside of operations and where we're taking going forward. So I can pass over to Jason who can give us a report on the financials.

Yeah, thanks Greg and good morning everyone for the quarter. We generated revenue of over $195 million and a gross profit excluding depreciation and amortization of $77.7 million.

The attributable net earnings for the quarter were $8.3 million. However, after adjusting for non-cash and non-recurring items, adjusted earnings for the quarter were $15.9 million or $0.6 per share.

Operating capital before tax and working capital for the quarter increased significantly to $56.9 million compared with the prior year quarter of $23 million. This was due to higher sales volumes and realized gold prices added to lower cost of sales per ounce.

Operating cash flow was negatively impacted by working capital outflows during the quarter but was largely caused by one off events that will reverse in coming quarters.

We had a large stockpile build at Sadiola as mining started later in the quarter at Diba. Although we didn't process that material and over a Cote d'ivoire where mining continued uninterrupted throughout the quarter despite constrained processing rates because of power interruptions.

A quarter end cash and cash equivalents were $78 million after spending $43.5 million on exploration, sustaining capital and development CapEx in the quarter.

As recently announced, we entered into a new streaming transaction with triple flag which brings $53 million into treasury.

Our unit costs are expected to continue trending downward over the remainder of the year in line with plan from higher production and consequently expect strong cash flow generation for the balance of the year.

Our ability to generate increased cash flows and profits is supported by our 2024 guidance. As previously disclosed production is expected to be weighted to the second half of the year with quarter over quarter variances due to mine sequencing and accessing higher grades as per the mine sequence.

Along with the implementation of operational improvements, production is expected to increase sequentially in the third and fourth quarters, which aligns with Allied's guidance of 375,000 ounces to 405,000 ounces for 2024 at mine-sit AISC of about $1400 per ounce.

For the year, production is expected to be weighted approximately 45% in the first half and 55% in the second half of the year.

In terms of investments, we plan to allocate $32 million exploration activities and another $30 million to sustaining capital, not including deferred stripping of $25 million which is accounted for in AISC. We've also allocated approximately $200 million for expansionary CapEx primarily for Kurmuk, cost improvements are expected to come from better performance at Sadiola and Agbaou with Bonikro in the middle of a stripping phase to access higher grade ore during the strip, the guidance period which would cause higher AISC now but result in lower costs for lower stripping in future years starting in May 25 and into 26.

The expansion of 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.

And lastly, spending on exploration is focused on several strategic objectives including increasing oxide or inventory, particularly at Sadiola, extending mine life in Cote d'Ivoire and expanding mineral inventory at Kurmuk.

With that, I'll now pass the call over to our Chief Sustainability Officer, Gwennael.

Thank you, Jason and good morning. All our operational improvements and growth are 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 and six months ending June 30, 2024. And we remain focused on ensuring the health and safety of our employees year-to-date. We are on track to achieve our 2024 sustainability public target.

In the second quarter, the company published its 2023 sustainability report highlighting key sustainability achievements.

The report details the activities undertaken by Allied Gold during '23 and outlines the company's plan for 2024 and beyond.

We also implemented new sustainability policies which introduced commitment around the governance of our sustainability performance, specifically promoting a strong sustainability culture across the company, fostering leadership and accountability for the company's sustainability efforts and establishing sustainability objectives and targets, these efforts underscore a lifeguard commitment to responsible mining and I will pass the call back to Peter now.

Gwennael, thank you very much. And so to conclude the presentation, at least the formal part, in terms of upcoming milestones, we expect to have an update on exploration and resources in November that would include on Kurmuk as Greg mentioned Oume north of Bonikro, our plan for Bonikro that is broader than exploration, but the plan going forward for what we do with the plant and how that is expected to increase inventory and of course more oxide ounces at Kurmuk as Greg mentioned, our third quarter, financial and operating results are scheduled to be released on November 8.

We will update the financing plan of the company to demonstrate that is fully financed. We are well advanced for the completion of that financing.

We will update the plans on how we accelerate the expansion at Sadiola. And finally, as part of our plan for increased liquidity, we will begin trading in the over the counter market in the United States commencing this month under the symbol AAUCF

My apologies. There's one more thing. We will plan a site visit at Kurmuk sometime in November. And with that, ladies and gentlemen, let me open up the call to questions.

(Operator Instructions)

Don DeMarco, National Bank Financial.

Thank you operator and good morning, Peter and team. So Peter, congratulations on the stream proceeds at the Kurmuk assets. It's great to see the benefits of the previous messaging had mentioned Sadiola as a candidate for a small stream.

I didn't see it in the press release but is this off the table for the time being? I see you also mentioned that you expect to be fully funded at current gold prices.

Don, thank you for the question. With the financing eco d'ivoire and the financing that is pending for completion at Kurmuk. We believe that the expansion, the phased expansion of Sadiola can be funded and possibly even brought forward with cash flows.

So it is, we described as the repurposing of cash flows and that's really the point here. So we don't have to go down the path of a further financing at Sadiola. We believe that cash flows can allow us to advance the expansion of that operation. But bear with us. We're not at that point yet, but it does appear to us that we should be able to advance that project. We're aiming for at least a year, possibly more than that, but we're just working through our cash flow models at this point.

Okay. Thank you. That's encouraging. Then on the Agbaou, I see in Q2, the costs are still elevated. I mean, recall that Q4, Q1 may have been impacted by a change in contractor. It seems that Q2, the grid outages weighed a bit. But is there anything else that contributed to the cost differential that we're seeing between Agbaou and Bonikro?

Yeah. No, I think it's primarily the ounces produced. If you look at that, it's just your kind of your unit effect is going to be a big, big driver there and then you got some lingering effects from what you mentioned. You know the results in late last year in Q1 trickling into Q2 a little bit dealing with a lot of stuff for the power. It is.

Okay-- go ahead.

I was just going to say to be perfectly transparent, Agbaou and Sadiola and Bonikro performed as expected Bonikro even with a weakness resulting from power Agbaou underperformed. And so Johan has put plans in place to improve that performance in the end, the bottom line. However, is that we do believe that we have to increase the inventory of ounces mostly in fresh ore.

We have to make modifications to that plant so that we can capture some of the ounces in the ground that are there. But it will come from the threshold rather than the oxides. But even on the short basis, we should expect an improvement to production in the third quarter and fourth quarter and into next year. And that means that the unit costs will come down.

Okay, good to hear. And then just final question at the Sadiola. So we see that Diba is advancing. Can you confirm that you expect processing and actual production from Diba in Q3? I see that there was some final approvals needed on processing.

We expect that to be the case, we are going through an approval process. Sometimes the approval processes take longer than, than we anticipate. We do expect that we'll be processing more of that or in in this quarter. We should mention, I think we've said this in our [R&D, M&A] that we already have a stockpile at Diba, that has a significant number of ounces.

We estimate more than 6,500 ounces that can be processed very quickly, literally over the course of a week at Sadiola. But what we've done is we've said, let's not be overly reliant only on Diba, let's not be overly reliant on what is outside of our control or at least mostly outside of our control, which is approvals. We do have other areas at Sadiola that have higher grade and is oxide.

And as we've taken those from exploration to more exploration, we're now at the point of the development of those and then bringing those ores into the plant. And that's the message that we're trying to communicate, which is that. And we tried to say that earlier this year as well, including with our guidance that while Diba is a significant contributor, it is not the only contributor to the improvement of operations at Sadiola.

Okay, good to know. Okay, well, that's all for me. Good luck with Q3. Thank you.

Anita Soni, CIBC World Markets.

Good morning, Peter everyone. Just Don actually asked most of the questions I was going to ask but just another follow up. Could you give any color on the negotiations with the Mali government? I know you guys are grandfathered in but any color you could give would be appreciated.

So, what we said in our [MDNA] is, is what I think is, is a very accurate description of where we are grandfathered. But the 2023 mining core has now been decreed part of the approval process if it was not apparent before. For Diba goes to compliance with the 2023 mining law, it is likely that we would have to comply with the 2023 mining law on to that or, but that's part of the discussion that's taking place with the government.

And, and so, while we are grandfathered, as we said, in our disclosure, we're also sensitive to context and to the state of discussions that we and all the other mining companies are having in the country. We're actively engaged in those discussions and we expect that the result of that will be some modification to our existing convention, some adoption of what's in the 2023 mining code, but we're still at the discussion phase at this point.

Okay. Thank you. That's it for my question.

Carey MacRury, Canaccord Genuity.

Good morning, Peter and the team. Just a question on Kurmuk. I think the guidance for the CapEx is like $155 million. I believe you. You've only spent I think 18 to date. So how do we think about the, you know the CapEx wrapping up there? Should we still be assuming you'll spend the balance this year or is part of that going to go into next year?

Let me wait in and then I'll pass it to Jason if he has any supplemental comments. My expectation at this point is that we're likely going to be light on capital for this year, but we're still aiming toward the capital that we indicated at the beginning of the year in our guidance.

But our experience over the course of many decades of working on these projects is that what we've got is the CapEx is likely going to be slightly less and some of that will move into 2025. Jason, I don't know if you would add anything to that.

Yeah, I mean, Peter, just a little bit more precision for, you know, Q3, Q4 at Kurmuk, you know, I think I book and between $40 million and $60 million per quarter. At, Kurmuk, I think it all on topic of expansionary just to the point that we, I mentioned we guided about $200 million for the year.

So that's still a number of what we have out there despite having spent what we disclosed $14 million in Cote d'ivoire doing during Q2. So that was an unbudgeted expenditure to put in place those, those generators. So we were able to accommodate that. Still stick within our overall guidance for the year.

Okay, great. And the working capital was pretty negative this quarter and I think last quarter and I know you have commentary that it should normalize going forward. But is there any other sort of big moving parts on working capital we should expect for the back half of the year.

No, nothing carry though, like I say, it's going to reverse into Q3, Q4 of those inventories or stockpiles to primarily get released.

That's it for me, thanks.

And Carey. That's an important point. So most of that working capital in the quarter was stockpile and an inventory build-up. And on the stockpile side, which accounts for the majority of that working capital that those ore are now ready to be processed. And the reason why they were not processed as an example of Bonikro is because of the power situation in the quarter that's not rectified.

And so we're beginning to process that through the plant. And so we'll reverse that working capital increase in the quarter and we'll begin, begin to get the benefit of that production and that cash flow coming in the third quarter.

That's good to hear. Thanks, Peter.

Justin Chan, SCP Resource Finance.

Thanks Peter and team for hosting the call. Maybe just a further follow up on working cap. Maybe just first on the on the ore stockpiles. Are they, is it fair to, I guess for the modeling because we don't have mine grade? Is it fair to assume that there are similar grades to what you process or what you plan to process or is there some grade differential just as we run those stockpiles through and on the Diba or is that, is the processing of those stock calls still pending on the permit?

We missed the last part, Justin, because the phone went a little bit bad. Let's come back to that. But on the first part, the grade is comparable in the stockpiles. But as you can anticipate, we're going to try to process some of the higher grades first so that we can catch up on, on the reversal of working capital and the increase in cash flow. Your second question though, the line went bad a little bit. What was the second question?

So, the second question was just regarding the stockpile or from Diba, are those ounces in the processing of them contingent on approval?

Yes. So we want to get that approval first before we, we process those ounces. And we're very much in active discussions with the government at this point on advancing that and doing it quickly.

Okay. Got you. Thanks. And maybe just a couple more on, on working cap, sorry to zoom in on this issue. But I was wondering a few other companies reported increased the [AG] receivable build up in Mali or Bonikro this quarter was that also a component of the of the working capital flows in the quarter.

Yeah, definitely. I think number one is what we mentioned with the stockpile and we did have different production sales of finished goods. I think next, in order of magnitude would probably be, [AG] receivable increase call order magnitude $5 million.

Okay. Got you. And I guess looking forward, can you offset that with tax payables or? I guess what is your expectation on VAT in the second half?

Yeah, that's the way it works is, as we, pay cash taxes and it's, in directly offset that with the [AT] receivable.

Okay. Got you. So it's probably best to model that, that, that kind of working capital outflows is not the case in the second half.

No, I know -- we think we may have said it earlier in the call, but no, we expect kind of a flat to slightly positive inflow over the balance of the year if you look at it that way.

Okay. Got you. And then, and then just one more is tables have, have come down quite a lot from, what's fair to say, an elevated level at the end of the year. Do you think they're now at a level that you're happy with, or I guess, do you expect tables to come down more or stay the same?

No, it's been, you know, the better part of, you know, three going on into our fourth quarter, just normalizing everything as we've gone through the [RTO] process. So I'd say your normalized now.

I see. Okay, thanks. And then just maybe on just kind of a longer term question at in Cote d'ivoire. So, you know, I think previously you talked about kind of integrating the two operations together as one operation. You've got the, the power in now, is that still your expectation? And I guess in the long run, what do you think is a, you know, what's an aspirational, long term AISC or production profile for Cote d'ivoire?

Yes. So two really good questions. On the first question, the technical detail and then the practicality, the technical detail is Agbaou and Bonikro because they were owned by two separate companies have two separate conventions and two separate fiscal regimes.

And so from the technical legal point of view, they would not integrate, but from a practical point of view, administration management that is in progress. And so we're treating it as a complex as we mentioned before.

What's the intermediate term plan for those operations? Well, intermediate including into next year, late this year or next year at Bonikro is with the stripping done. We expect to get into higher grade, we expect production to increase and we expect that the costs will come down pretty dramatically as we provided in our outlook, the costs declined to well below $1,200 per ounce from this year's more than $1,600 per ounce, but more holistically in terms of the complex, we stand by what we said, we've said strategically, we want to be in 10 years of mine life at least 180 ounces to 200,000 ounces per year between the two mines in the complex.

And we want to take that word strategic out and we want to do that within the interim, the intermediate period of time. So how do we do that? Well, Bonikro seems to have an extended mine life as a result of the contributions coming from.

We're actually investigating the merits of expanding that plant so that it can actually process more and give us more ounces of production more than that roughly 100,000 ounces that we're getting today about. We're now very close to being convinced that we need to make plant modifications on the front end that allow will allow it to be able to take on fresh ore.

There is a large inventory of fresh ore, some of that is near to surface but underground. We're investigating how we evaluate how we deal with those mine plans, both for near to surface but also access to underground, but making modifications to that plant so that it can take on more of that fresh air where we have as a plan then for, we is to get to [100,000] ounces to 110,000 ounces per year, Bonikro or at least 100,000 ounces per year.

There's our 200,000 ounces per year and we will give more guidance on that on what we intend to do, as I mentioned on the conclusion of the formal part of the presentation before the end of this year and then we'll continue to advance that into next year.

Got you. And I know that you haven't made a formal decision on this. But in a broader sense, like what do you think is an appropriate timeline for that investment into [AGBS] processing circuit is that kind of like a potentially next year or is that, you know, longer term?

I don't know this next year, I'd say that we will have completed the studies for that including the development of mine plans at least preliminarily by next year. But Agbaou has in terms of oxides a 2.5, 3 years of mine life.

So we would expect that before the expire of that, we would expect to have completed the implementation of those changes to the plant and the mine plan for how we, we access some of those, those some of that for sure. So we should expect that within the next couple of years will be an entirely different mine with an entirely different plant.

Okay? Got you.

And let me just let me say that was the reason one of the primary reasons, this was not part of our mind plan, right? This was not part of the guidance that we provided part of the outlook that we provided. So one of the reasons for the should have versus must have on the financing that we completed with triple flag is that it allows us to advance, we're spending $60 million a year on exploration.

We strongly believe we see that there are more ounces there. We should be spending money on the, the modifications to the Agbaou plant, possibly expanding the Bonikro plant. It would be foolish for us to say, let's wait to do that until we've done everything else. That was the purpose of this financing, which is, it allows us to advance the plans on Bonikro, so that we can take, as I said, that word strategic out where we want to be with, this is not 180 ounces to 200,000 ounces per year, but a number that is higher than that.

Bonikro should be able to do more than that with modifications to its plant, more than that 100,000 ounces per year with about 110,000 ounces. We want to be able to come back in the next couple of years and say that that goal of 200,000 ounces is now a higher goal.

We know the inventory is there, we know that there are these modifications that could be made to the plant. Now, we're checking all the boxes on how we go through concept and internal study to full feasibility study, third party review and then engineering

Understood that makes a lot of sense and I appreciate the both the timeline and kind of how it fits in to your financing and the other moves you made. Thanks very much. I'll free up the line.

Thank you. There are no further questions registered at this time. I will turn the call back to Peter Marrone.

So, ladies and gentlemen, thank you very much for making the time for us this morning. We hope that this was informative and gives you a better sense of what we've done in the quarter and what to expect for the rest of the year and then into the intermediate and longer term, we are advancing our initiatives for advancement and enhancement of our minds and development of our projects and of course, the discovery of nuances as Greg mentioned.

So with that, we look forward to our conference call on November 8, for our third-quarter report. Thank you very much.

Thank you. The conference has now ended, please disconnect your lines at this time and we thank you for your participation.