Allied Gold Corp (AAUC) 2025 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 could differ from the conclusions or projections in that forward-looking information, which include, but 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 last night announcing Q2 2025 operating and financial results.

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.

Operator, thank you very much, and thank you to everyone for participating in this call. With me today are members of management, including our Head of Exploration, Daniel Racine, whom you know who will speak to our operations.

Johanne is at operations, and so he is available on the call for questions, but Daniel will take the charge relating to the better explanation or at least continuing explanation of production, and Jason LeBlanc is here, our Chief Financial Officer.

Let me begin into the presentation. In the first couple of pages of this presentation, we talk a little bit about some of the things that are fundamental to the mining business and often take a little bit more time to complete.

Drilling for high grades in Cote d'Ivoire and in Sadiola refining block models, which will continue into the second half of the year and the importance of it. And that allows us to be able to get confidence into higher-grade areas for forecasting, certainly better short-term planning and more reliability and predictability.

One of the things that we did in the second quarter was we made a decision to do more stripping, more waste removal at Agbaou. We continued with the waste removal at Bonikro.

And we began certain cost reduction initiatives in Cote d'Ivoire and Sadiola and procurement improvements. What's the objective though?

The objective, particularly with improvements to block models and the waste removal at Agbaou is to access higher grades in the second half of the year and beyond. We publicly said that we expect production to be weighted in favor of the second half of the year to the tune of 55% to 45% with a whopping increase and higher production with much lower costs in the fourth quarter.

I think it's important to explain a few things that perhaps come out of our MD&A and our financial results, but I think it's important to highlight. Our guidance at the beginning of the year did not consider that waste removal at Agbaou.

That added roughly $850 per ounce to its costs, which would have a large impact on the total production given the order of magnitude, roughly $160 to $180 per ounce. This was an executive decision. We did not have to make that executive decision.

But without waste removal, our costs for Agbaou would be more in line. However, we developed a plan for Cote d'Ivoire, which includes underground drilling, along with drilling of adjacent areas to our mining tenements.

It also includes maximizing production and mitigating costs to pay for that. Waste removal at Agbaou provides for roughly 4,500 ounces of increased production this year.

And we estimate based on drilling alone and based on the efforts that we've undertaken so far with some of the waste removal between 11,000 ounces and 15,000 ounces of increased production next year. Without that, we would be winding down the operation beginning next year.

Now this gives us cash flow and runway to carry out the balance of the program that we've begun and we will continue to highlight to the end of the year and into the first quarter of next year to increase mine life. The worst-case scenario for any operation, as most of you know, is to shut down or suspend an operation, particularly in the situations where there is daylight improvements and increases in mine life.

Let me be blunt. This is a decision that this management made in the second quarter. More precisely, it's a decision that I made.

The sacrifice was one quarter's costs in favor of lifeline and longevity. And more to the point, while that waste removal came at a cost as we disclosed, my reasoning was that the value of an extra almost 20,000 ounces of production over 18 months, the second half of this year and all of 2026 at that operation by far exceeds the cost.

That's in value alone. And then the value of maintaining a continuing operation without suspension and shutdown and what to do with reclamation and closure costs and employees adds to that value.

We are now comfortable saying to you that we will be at 180,000 to 200,000 ounces of production for Cote d'Ivoire in 2026. I anticipate that when we give our guidance at the beginning of the year, we will comfortably tell you that we can get closer to that higher end of production.

I want to make one more observation, and that's this. We should have explained two things better. One is the complexity of mining, particularly at these operations.

And on that, consider what we refer here as the refinement to the block models. Consider how long it takes to overhaul a block model with all of the drilling and informational data that relates to the operation on so many deposits at current and planned mining areas.

It's not just one open pit, it's several areas of mining, particularly at Sadiola and Cote d'Ivoire. I give that just as an example.

I'm not defending poor behavior. What we could have done is we could have gone faster. But the decision that was made, the executive decision, my decision was to take time to get it right.

The other is that we are heavily weighted in the second half of the year. And in the second half of the year, we expect to get higher grades, operational flexibility at Sadiola, consider that we can process more of the fresh ore, which is in ample abundance by comparison to the oxides.

And just to give you an indication, in July, our production is in line with our budget. We expect to produce, as we've guided, roughly 91,000 ounces in the third quarter comparable to the second quarter, but our costs are coming in at considerably improved levels.

Agbaou is already $1,000 below the Q2 level. Bonikro is roughly $1,800 per ounce, and that will trend down through the year, through the rest of the quarter. And Sadiola is at about $400 to $500 better than what we delivered in the second quarter.

So we are in July, we're producing gold at approximately $2,000 to $2,100 per ounce, and we expect that, that will continue to trend down for the balance of the quarter and certainly into Q4. Mobilization of new mining equipment, again, critical.

The mines that we have in this company were delivered with a former mine contractor. When a new mine contractor took over, it was with the historical mining equipment, and it was coming to its last legs. We were bandaging that equipment.

We now have new mine fleets, much of which has arrived. And that improvement means that we have fleet availability that gives us the confidence to be able to tell you that, that second quarter and into 2026 will have higher throughput, operational flexibility, and that will lead to improvements to operations as well.

Exploration. We've been getting some significant feedback on what's happening on the exploration side. And let me begin with the punchline.

We've increased our exploration budget from $20 million to $37 million. We're confident in our balance sheet, confident enough that we can spend another $17 million.

It's performance-based. On our three operations. We are targeting an increase of mine life at Agbaou, as I mentioned before, by a pit expansion, high-grade underground prospects and targets that are outside of the compensation area.

Oume is at development north of Bonikro, where we're seeing significant increases in resources that will extend its mine life. We're targeting a large increase in Sadiola of total inventory.

But just as importantly, we've made discovery of new oxide ounces. And those new oxide ounces will provide further flexibility on operations and also improvements to production and to costs.

At Kurmuk, we achieved our project milestones for the second quarter and equipment is being delivered to site, and we expect to advance the resource model later this year. Daniel will speak to the operations.

He will speak to Kurmuk and go into some of the detail, but I will give you the high level. In terms of the high level, these are the important milestones.

Substantial mechanical completion by the end of the year, the power line before the end of the first quarter, mining and sequencing, which we've already begun, and we expect to have at least four months of stockpile at surface by the time we start operations. And some of that stockpile will be much higher grade.

We don't want to process that high-grade material as we commission the plant from April through to the end of the second quarter next year. And production, production starting formally in June next year.

So we're on track to be able to deliver that for the partial year next year, 175,000 ounces of production. At Sadiola, we're near complete on the Phase 1 expansion.

And as I mentioned, that will give us increased operational flexibility because we can process more of that abundance of fresh ore through that plant. And in terms of the long term, we've always talked about the second phase expansion, but we're now looking at the opportunities for us to do an incremental expansion that would allow us to get to a comparable production level as Phase 2 without having to spend that full $400 million for that larger plant, and we'll have more to say on that by the end of this year as we complete our technical studies.

I want to make a few other observations that relate to Mali, and these are important points in my view. The environment in the country has significantly improved. There is a better geopolitical environment.

There's more support for mining investment and for private investment. We've had improvements to the asset from a geological point of view with exploration, as I mentioned, with optimization and improvements of the asset and with that Phase 1 expansion now nearer to completion.

So the result of all of that is that it led us to a further point, which is that we decided that we were in a far better position to deliver value to shareholders by taking a progressive self-reliant approach relating to power and not looking at corporate transactions that would mitigate our engagement in and our ownership of that asset. We listed on the New York Stock Exchange.

We completed a share consolidation, and we reduced the holdings of some of the larger shareholders through secondary trades. The result of all of that is that we have significantly advanced from a market point of view as well.

And that is just to give you a summary of some of the things that we've undertaken through to the second quarter this year. And with that, please let me pass it to Daniel to talk about our operations.

Thank you, Peter, and good morning, everyone. I will now go through some highlights of the operation and the project in the second quarter. Our production was solid at 91,017 ounces and in line with plan and tracking well with our guidance for the year.

All-in sustaining cost was $2,343 per ounce of ounce sold. This was driven by sales lagging production due to the timing of gold shipments, which will reverse and benefit us in Q3.

Also, as we've described with our guidance, higher gold price impact all-in sustaining costs due to higher royalties, especially with the Ad valorem component. In general, we have said that every $100 per ounce increase in the price of gold results in $15 per ounces higher and all-in sustaining cost.

Our baseline for our guidance was $2,500 per ounces. At an average realized gold price in excess of $3,250 per ounce in the second quarter, consolidated all-in sustaining cost was impacted by over $100 per ounces.

At Agbaou, as part of our revised strategy to access more ore in the future and allow more time for exploration to extend mine life, we prioritized waste removal over ore extraction to better manage storm water in the pit and to secure access to higher grade ore in the second half of 2025 and beyond. Mine sequencing and the increase in stripping resulted approximately $850 more in all-in sustaining cost per ounces in relation to the first quarter of 2025.

While waste movement is expected to continue at similar level for the remainder of the year, ore feed, gold grade and production are expected to materially increase quarter-over-quarter, resulting in reduced costs in the second half of the year. As we discussed earlier this year, we expected production to be skewed toward the back half of the year with a 45-55 split across between the first half and the second half of this year.

Q3 production should be similar to Q2, while Q4 production is expected to be meaningfully higher between 118,000 to 122,000 ounces. Costs are expected to trend down as production increase in the second half, driven by higher gold and reduced expenditure.

Assuming gold at $3,000 per ounces, we expect all-in sustaining cost to average $1,850 per ounce in the second half of the year with declining costs quarter-over-quarter. Due to ongoing exploration successes, a further $17 million has been committed in 2025 on an incremental program in Cote d'Ivoire, Kurmuk and Sadiola.

The total 2025 exploration budget is now $37 million. For Cote d'Ivoire, we have allocated $7.5 million on new funding to pursue opportunities to extend mine life, including drilling the Agbaou West and East pit extension, the ErayAkisiso underground target and other new targets.

At Sadiola, we are allocating an additional $5.7 million to continue testing and extending structure at Sadiola Main, Tambati, FE2 trend, Seckoto trend and FE4. The exploration is focused on both oxide and fresh mineralization with the preference for oxides in the near term.

For Kurmuk, we have assigned a further $3.7 million in budget with a goal to add new mineral resources and convert inferred to indicated. Drilling will continue at depth and along strike at Dish and Zenke as well as drilling the Urchin target located near Ashashire.

This work is aligned with the goals of the company to achieve an inventory of over 5 million ounces at Kurmuk. At Sadiola in Q2, production was 49,283 ounces with an all-in sustaining cost of $2,471 per ounces.

Costs, as previously mentioned, show the effect of higher gold price in the royalty construct, especially at the higher relative contribution from Korali Sud in the quarter, which is subject to higher royalties than Sadiola. It is worth mentioning that we are finalizing the first phase of Korali now.

And going forward, the plan focuses with Sadiola within Sadiola mining license, reducing the royalty impact into the cost structure. Construction at Phase 1 expansion continues to advance according to plan with expected completion in Q4 2025.

And I will speak more in detail about it in the next slide. At Bonikro, production was 25,775 ounces with an all-in sustaining cost of $1,592 per ounce.

This strong performance was driven by higher grade, increased throughput and improved recoveries. First half stripping is expected to result in substantially lower costs beginning in Q4 of this year, which will carry in 2026 and beyond as grades are expected to be higher and waste removal will be minimal.

At Agbaou, production was 15,959 ounces at an all-in sustaining cost of $3,104. As I already mentioned, mine sequencing and increased waste removal drove the cost up.

And this is expected to result in higher production at lower cost for the remainder of this year, and it allows us to access more ore in 2026, allowing for exploration to focus on long-term target to increase mine life. Moving to our Kurmuk project. We're pleased to say things are progressing very well.

We have achieved several significant milestones in the second quarter. The first picture described graphically what was our focus during the first half of this year and in the second quarter. We went from the planned concrete contractor to the structural and mechanical contractor at the end of the second quarter.

We started and ramped up the delivery of key components to the site such as the CIL tank, the ball mill, which we see in the bottom picture and fabricated steel among others. While other major components were on route to the site according to the schedule, the mechanical contractor was mobilized earlier in the year along with the equipment.

And in Q3, the focus is on ramping up activities. A very important milestone was achieved in Q2 that is relevant for the start of the operation was the substantial advancement of the key bulk earthwork outside of the process plant area, which we achieved ahead of schedule.

This includes the main water dam, which is receiving water as we speak and the tailings facility, which is well advanced. It was key for us to advance these two areas ahead of the rainy season, so we can store water for the plant start-up in 2026.

Another achievement that is very important to the execution schedule is the progress we made in the permanent accommodation camp to near completion in the quarter, allowing the project and mining operation to ramp up their manpower requirement as per the schedule in the second half of the year. Speaking of mining, the mobilization of the mining fleet is ongoing with the shovel and truck, which delivery to site occurred in July and mining pioneering was completed during the quarter.

In terms of what comes next, we plan to start pulp mining activity with the new fleet now in Q3, so we can stockpile ore ahead of commissioning. We will complete engineering in Q3, and we expect to make substantial mechanical progress in the plant area by the end of the year.

We expect the EEP to energize the power line in Q1 2026, and we expect commissioning and first gold pour to occur in mid-2026. Turning to Sadiola. Phase 1 expansion is also progressing well.

During the second quarter, we completed engineering. The team basically finished the concrete work and added over the areas to the mechanical and structural contractor. And similar to Kurmuk, we took delivery to site of steel and the ball mill.

We've also secured the power supply for Phase 1 and the shipping of crushing plant is in progress. Upcoming, we expect the Stage 1 crushing to be operational in Q3, and the new mill is expected to ramp up in Q4.

As a reminder, the Phase 1 expansion is a key development for Sadiola as it will allow the plant to process 5.7 million tonnes per year of ore with a blending up to 60% of fresh ore. And most of the near the reserve, 7 million ounces in reserve are fresh mineralization and with higher grade than the oxide in inventory.

With Phase 1 in production, Sadiola is expected to produce between 200,000 and 230,000 ounces per year in a sustainable way and in anticipation of the next expansion phase. On this, we are advancing the progressive expansion studies, which is aimed to define a growth strategy with lower capital commitments, leveraging the installed capacity after Phase 1.

We expect to finalize the trade-off study by the end of this year, which will include an update on the opportunity to increase recovery using the flotation and Albion. In Q2, we advanced the second phase of metallurgical testing for Aldeion, and we are advancing the flow sheet development now, and we expect to complete the studies also in Q4 to inform the path for expansion I just mentioned.

Last but not least, we spent a significant amount of time and effort in refining our power requirement and updating our power supply strategy for Sadiola throughout its expansion phase. As Peter mentioned, we have landed on a short list of solution we are busy negotiating at the moment and that we expect to be completed by Q4.

With that, I'll pass it to Jason.

Thank you, Daniel. We had solid financial performance in Q2 with adjusted earnings per share of $0.14 and operating cash flow before taxes and working capital of $116 million. The balance sheet is strong with cash and cash equivalents of about $219 million at the end of the quarter.

We have an undrawn credit facility of $50 million and further liquidity available from future draws on the Kurmuk stream, which totaled approximately $88 million. Aiding in liquidity during the quarter, we closed on a bought deal offering and facilitated a block trade, improving our balance sheet and increasing our float.

Looking forward, we expect 55% of annual production to come from the second half of the year, although more weighted to Q4. More significantly though, we'll have a magnified effect on cash flow generation from lower unit operating costs that are expected for the balance of the year.

With that, I'll hand the call back to Peter.

So ladies and gentlemen, let me pick up again on the guidance point, 175,000 ounces in the first half of the year versus expected and planned 210,000 ounces in the second half of the year, that 45%-55% split, $1,850 all-in sustaining costs. We are no longer reliant on Korali as of the end of the second quarter.

We have better economics with the ore that we process from Sadiola proper. In the mining tenements, we have oxide ounces at Sadiola that come in at lower cost that we process through our existing plant.

Phase 1 will be completed by the end of this year, which gives us more flexibility to mine fresh ore, which is in abundance and comes at lower cost. We will have higher grades beginning this quarter and into next quarter at Agbaou through 2026, and that's true for Bonikro as well.

And finally, in terms of the longer term into next year, we're still forecasting roughly 600,000 ounces of production next year at improved costs and that production contributes to better EBITDA. We are now eight months away from commissioning at Kurmuk.

In terms of upcoming milestones, an exploration update based on the successes to date that has justified that extra $17 million to which Daniel referred for Sadiola, which is expected in October, Kurmuk in November and Cote d'Ivoire in January with a more comprehensive plan in the first quarter next year, by the end of the first quarter for how we intend to extend mine life and the successes we will have had at extending mine life at Agbaou.

The Kurmuk reserve and resource update by the end of the fourth quarter this year. We will provide an update for Oume as part of our effort at Cote d'Ivoire later this year.

As Daniel mentioned, the completion of the Sadiola Phase 1 expansion later this year. We remind everyone of the investor and analyst tour at Kurmuk in January of next year.

The Sadiola expansion update, again, what Daniel referred to as the interim steps or the modified expansion rather than Phase 2 by the first quarter next year. As I mentioned a moment ago, the Agbaou reserve and resource update for the second quarter of next year and the start-up of Kurmuk operations within eight months with commissioning beginning in April and production in June.

Operator, let me hand the call back to you for any questions.

(Operator Instructions)

Carey MacRury, Canaccord Genuity.

So Peter, it looks like you're making good progress at Kurmuk. I'm just wondering with the costs incurred to date, how you're tracking along your budget assumptions.

Carey, Gerardo. Yeah, we're tracking well according to cost. We do see some trends like in any project, but also we have levers to pull in terms of what comes next.

So we're busy right now detailing the plan for the rest of the project and then making some tweaks obviously, with the aim to remain within the budget allocated to the project.

Okay. And then just regarding the balance sheet, obviously, without the $145 million coming in from Ambrosia, do you think you have enough buffer on the balance sheet to kind of see it through at these oil prices?

Yeah. So again, a really good question. And while we touched on it, I think it's important to go into a bit of a better detail. So Carey, we talked about $145 million of upfront payment for the 50% interest of our interest in Sadiola.

In the course of negotiations, there was some back and forth of when a portion of that would be paid. Was it paid upfront? When would the closing occur.

Let's call it a full $190 million to $145 million that would be completely upfront, the difference within several quarters, which was what the negotiations where the negotiations were at. I think we have to look at it from the lens of what does it mean from a 12 month or 18 month perspective based on the higher gold price.

Where were we in February with gold price? Where are we today? And with the higher gold price, particularly with the floor of the collars that Jason has put in place with at least $3,000 into next year, our conclusion was that we generate at least that much in cash flow for that period.

So we're not getting any benefit for selling a portion of Sadiola for that $90 million to $145 million, even at that $145 million upfront amount because we're generating that in cash flow and the balance of the payments were actually made over time over the course of a five to six year period.

So that's one of the reasons that led us to the conclusion that we were in a better position in part because of gold price, but in part because of improvements to the asset. And also in the context of improvements, we're now at the back end of the completion of Phase 1's expansion, which gives us, as Daniel said, a very comfortable, reliable 200,000 to 230,000 ounces at better costs.

We've got an abundance of fresh ore. The challenge for this operation is that it was designed for as an oxide mine with a plant that accommodates oxide ore.

That's up until present date with the exploration effort, we're now beginning to see some clarity to that. But up until present date, that's been the challenge, which is finding oxide ore.

But with the ability through the first phase expansion to process more fresh ore, we're in a position to more comfortably produce that 200,000 to 230,000 ounces at better costs, generating better cash flow. And at a $3,000 gold price, that cash flow matches what was the upfront payment.

Okay. That's helpful. And maybe one last one for me. Just on the $1,850 cost guidance, you know that's at $3,000 an ounce.

Should we still be using the $15 per $100? We've got gold prices sitting just south of $3,400 now?

Carey, Jason here. Yeah. No, it's going to be higher just because that guidance was provided, call it, at the margin for movements in gold prices. We've seen gold prices move quite a bit.

So the impact on royalties isn't purely linear. There's a curve to it, right, because of step-ups. So I'd put it closer to $20 on a $100 basis go forward here.

Carey, look, it's difficult. We'd love to be able to give like a raw number and say this is exactly what it is, but we can't predict what the realized gold price is, and we do have these ad valorem royalties that are predicated on gold price. Jason's, $20 per ounce is a reasonable number on the back of a $300,000 gold price.

Why did we use $3,000? If we look at the average for the first and second quarter, we were roughly a realized $3,000 gold price. So that's the reason for using that as a baseline.

Mohamed Sidibe, National Bank Financial.

Maybe to start with Sadiola and your decision not to go ahead with the sale of any interest in the mine and the power solution. Could you provide us with some more color on the power solution and how you expect Allied Gold to participate in that?

Should we expect some financial investments from you in that? And then how would that potentially impact your cost profile into next year?

Yeah. So Mohamed, another really good question and amongst the many drivers of why we chose to go down this path. Solar is comes across as an admirable solution, right?

We had contemplated as part of the corporate transaction, we contemplated 20 megawatts coming from solar with battery backup. But as we look at it from the lens of what's the installed capacity versus the utilizable capacity because solar doesn't work in cloudy period, certainly won't work at night.

So when we looked at the installed versus utilizable, and then what is the order of magnitude difference between a smaller solar field, a smaller array of solar panels versus a larger one, it's an order of magnitude difference. So to get 20 megawatts with the installations between 100 and 120 megawatts and the ratio is even greater than that on the battery backup that goes with it.

So that's a very large solar field. It's a very large battery backup system. And the cost is not an incremental, hey, what if we go from 8 megawatts to 20. It's not the difference between 40 million to 2.5 times that.

It's an order of magnitude difference. And that was affecting our costs. And so we publicly said we want to get to an average somewhere in the range of $0.16 to $0.17 per kilowatt hour, but we want to get there from the get-go.

And so the best way to be able to deliver that is with a combination of thermal, some diesel and solar. But solar should be substantially smaller. We're estimating in the range of 8 megawatts, perhaps as much as 8 to 12 megawatts, but also make it scalable.

There's one more point that I think is important here. And that is that we do want to make it scalable. The original proposal provided us with the power that we required, but only for the first phase, we still have to go from 20 megawatts to 38.

With this approach, we now have the flexibility to be able to do that and to do it modularly. We can actually expand on the thermal with an extra engine.

We can expand on the solar with the installation of a greater array of solar and battery backup. And that incremental is consistent then with the approach that we're taking on the expansion to the asset.

You asked the question, is there an upfront amount that we need to invest? And the answer is we're looking at this from the point of view that this is installed, that it's turnkey.

We pay an amount per kilowatt hour in the range that I've just described to you and as an average. And that's what we would be doing. However, we do have the flexibility to say that we would be an investor.

And that's part of the discussion that's taking place in the context of the broader geopolitical environment in the country. Power is increasingly important in the country in order to fulfill some of the objectives of government to encourage investment.

There is some inflexibility, some challenges on the power grid, as you are aware, or the two power grids. So one of the options available to us is to actually scale this greater than what we need to provide us with backup for when we need it, but also to provide power back into the grid.

So these are some of the things that we are advancing near complete in the discussions, and we are considering the possibility of having a direct investment, which would give us a stake in the game, not just an offtake from those who install it.

If I could maybe shift to the operations. So Sadiola, specifically on the feed coming from Korali Sud given the fact that it's higher royalties. I know that it's substantially done by the end of Q2, but should we still expect some contribution in Q3 from that could potentially impact the royalties and the cost there?

So the answer is no. In the short term, we did not plan any additional ore sources from Korali Sud. The focus is on Sadiola with oxides and then also the fresh material going forward.

Great. And then just on Agbaou, I just wanted to confirm in terms of the CapEx and the waste stripping into the second half of the year. So I understand the higher production with the higher grade and throughput into there.

But waste stripping, I'm guessing it will continue at these levels for the second half in order to better gain clarity on 2026? Or should we see that trending lower as well?

Stripping will continue. So the waste removal will continue, but the cost per ounce will become substantially lower because we will be getting into higher grades.

And so in other words, the denominator becomes larger, the number of ounces increases relative to second quarter. Jason, go ahead.

Yes, Mohamed, just to carry on to what Peter mentioned there. Yes, I think so as we said, waste, the total tonnes are going to be similar, but we've got more ore coming from that activity.

So the strip ratio drops pretty substantially. So that results in a lower cost, as Peter mentioned there.

And there are no further questions at this time. I will now turn the call back over to Peter Marrone for closing remarks.

So ladies and gentlemen, thank you very much for participating in this call. And we do have a number of presentations to sales desks and meeting with our investors, and we are looking forward to that. And we're looking forward, of course, also to our third quarter results.

And I want to reemphasize the importance of why we're saying that, that guidance for the second half of the year and into 2026 is well within our reach as a result of all of the steps and approaches that we've taken through to the end of the second quarter of this year. Ladies and gentlemen, thank you very much for participating on the call.

And this concludes today's conference call. Thank you all for joining. You may now disconnect.