Fortuna Mining Corp (FSM) 2024 Q2 法說會逐字稿

Greetings. Welcome to the Fortuna Mining Corp., Q2 2024 financial and operational results call. (Operator Instructions)

Please note this conference is being recorded. I will now hand the conference over to your host, Carlos Baca, Vice President of Investor Relations. Sir, the floor is yours.

Thank you, Jenny. Good morning to all. I would like to welcome you to Fortuna Mining second-quarter 2024 financial and operational results conference call. Hosting the call today on behalf of the company will be Jorge Alberto Ganoza, President and Chief Executive Officer; Luis Dario Ganoza our Chief Financial Officer; Cesar Velasco, Chief Operating Officer, Latin America; David Whittle, Chief Operating Officer, West Africa.

Today's earnings call presentation is available on our website as a reminder, statements made during this call are subject to the reader advisories included in yesterday's news release, the earnings call, webcast presentation and MD&A and our risk factors in our annual information form financial figures of contained in the presentation and discussed in today's call are presented in US dollars unless otherwise stated.

Technical information in the presentation has been reviewed and approved by Eric Chapman Fortuna's Senior Vice President of Technical Services and a qualified person.

I would now like to turn the call over to Jorge Alberto Ganoza, President, Chief Executive Officer and Co-Founder of Fortuna.

Thank you, Carlos, and good day to all. I'm pleased to report that Fortuna remains well positioned to continue capitalizing on the rising prices of gold and silver while strategically maintaining a business capable of performing across varying market sites.

Q2 was marked by significant operational and financial results. Specifically, we made strides in three relevant areas, advancement of key capital projects, capturing high-value exploration opportunities and consolidating a fortress balance sheet.

Our mines produced 116,000 gold equivalent ounces, benefiting from the upward trend in precious metal prices. The average realized gold price increased to $2,334 per ounce from $2,087 per ounce in Q1.

The average realized price increased to 2030, as I thought I saw if I lost the line for a second here, $2,334 per ounce from $2,087 per ounce in Q1. This led to total sales of $260 million would go contributing 81%, silver, 10%, and by-product zinc and lead making up there remain the business generated $93 million in cash flow before working capital adjustments equivalent to $0.3 per share and achieved $39 million in free cash flow from operations.

Our adjusted EBITDA was $113 million, reflecting a robust margin of 43% or so. I want to highlight two major capital projects. Firstly, building then on leach pad expansion has reached 60% completion with a total 2024 construction budget of $42 million. This is our largest capital project.

This significant project weighs approximately $400 on the Lindero all-in sustaining costs and $90 on our consolidated all-in sustaining cost. For this year, we anticipate the leach pad to be concluded and ready to receive or by Q4, setting the stage for the next decade of reserves.

And secondly, the signal processing plant exceeded expectations operating at an average rate of 208 dry metric tons per hour, which is 36% above its design capacity of 154. This optimization has delivered significant value and helped mitigate the power outages of the national grid in Cote d'Ivoire during the quarter, ensuring no material effects on our guided production for the year.

On our high value exploration opportunities, we are thrilled about the emerging Kingfisher discovery at the Seguela mine, through 14,000 meters of drilling, we have identified continuous mineralization over a two kilometer strike length.

We plan to continue drilling with the aim of producing a first resource estimate by year end. Kingfisher is a remarkable discovery as it does not have surface expression. The prospect is located just four kilometers from our processing plant and main antenna depots.

This discovery highlights the significant discovery potential within the 35 kilometer long belt and there are out of controls and on the strength of our balance sheet the successful placement of $172 million in convertible notes in the quarter was three times oversubscribed.

This has increased our liquidity to $350 million and lowered our cost of capital from 7.7% down to three and three quarters. We also maintain a low total net debt to EBITDA ratio of 0.2 the strong balance sheet allows us to pursue value focused opportunities in our regions throughout markets site.

All in all, Q2 performance demonstrates the strength of our business. We remain focused on delivering value to our shareholders through strategic investments, operational excellence, unlocking the geologic potential of our properties and responsible mining practices. Now David will give you an overview of the performance of our business in West Africa. David?

Thanks, Jorge. I'm pleased to report on the strong operational performance and significant milestones achieved by our West African operations together, and we are remarkably during the second quarter of 2024.

So Seguela and Yaramoko had a successful second quarter regarding production. Combining for 64,430 ounces of gold for the quarter and 126,163 ounces for the first half of 2024, while both Seguela and Yaramoko had power supply limitations.

They remain on target to achieve production targets. Both mines also maintain their excellent safety record in the second quarter, Seguela Mine 420,000 tonnes of ore at an average grade of 3.03 grams per tonne and 2.5 million tonnes of waste, achieving a strip ratio of 5.91.

The processing plant treated 318,000 tonnes at an average gold grade of 3.47 grams per tonne, producing 32,983 ounces of gold for the quarter totaling 67,539 ounces in the first half of 2024. Despite our limited interruptions from the National Grid resulting in a reduction of 455 hours for 19 days of processing time, we were able to mitigate this by optimizing mining schedules to provide higher grade ore to the plant and increasing plant throughputs, which averaged 208 tonnes per hour for the quarter, with a high of 213 tonnes per hour have reached in June.

In the third quarter, Seguela experience full power availability from the National Grid backup power generating capacity has been expanded on site to mitigate any future power supply issues and construction of the on-site solar power plant is still scheduled to commence this year.

As a result, Seguela remains ahead of schedule year to date and is on track to achieve annual production guidance of between 126,000 ounces and 138,000 ounces. Mining activities at scale are being focused on the antenna pit to deliver higher-grade ore to the processing plant. Additionally, over 75,000 tonnes of ore being mined at TMCL and cool a bit year to date, surpassing the mine plan targets.

Continued exploration success of the body or cash from Gambro North Sea's, providing further opportunities with a life of mine plans and opens the potential for underground mining at some bird and ANSI and deposits. These developments, along with the emerging Kingfisher discovery, bode well for the future of this again on mine.

Despite this power supply issues, the strong production performance has again resulted in a cash cost of $564 per ounce. And then I seek a $1,097 per ounce of gold. At Yaramoko,111,000 tonnes were mined at an average grade of 8.0 grams per tonne for 28,709 ounces of gold from the second quarter, the processing plant treated 121,000 tonnes at an average grade of 8.4 grams per tonne, producing 31,447 ounces of gold, outperforming the mine plan and totaling 58,624 ounces for the first half of 2024.

During the quarter, mining operations were paused in the 55 zone ore body due to a fall of ground caused by a seismic event. Access to the working areas of the mine was reduced by 10 days whilst rehabilitation works were conducted during this time, the QVP orebody continue to produce mill feed, which was supplemented by existing stockpiles to mitigate future seismic risks.

Mining operations have been rescheduled, resulting in a revised production profile that will lower production expected production in the third quarter, but enhance output in the fourth quarter. Yaramoko was also affected by power availability in Burkina Faso resulting from power supply reductions in Ghana and Cote d'Ivoire.

Yaramoko already has backup diesel generating capacity, which was complemented by the mobilization of additional gen set, thereby mitigating any significant effects on the mining and processing operations as I experienced. Once again, a normal power supply has been provided from the national grid in the third quarter.

Mining and drilling operations at both the 55 Zone and the key the ore bodies have revealed strike extensions beyond the initially anticipated mining bounds. Consequently, 55 Zone development operations are now projected to continue until the first quarter of 2025, although we say extension will likely elevate the forecasted all-in sustaining cost per ounce in 2024, potentially reaching or exceeding the upper end of our current guidance, it will significantly enhance the production and cost profile for 2025.

Originally, the 55 site development was scheduled to conclude in June 2024. Our exploration operations at Yara Mozal have identified a promising satellite open pit opportunity in the one oh nine zone located just to the north of the processing plant this opportunity has undergone all required studies and as being permanent assisted by the keen FSI government, we are currently evaluating tender submissions with mining expected to commence in the fourth quarter of 2024.

Yaramoko strong production during the quarter resulted in a cash cost of $953, either a sale of $1,389 per ounce of gold and remains on track to achieve its production guidance of 105,000 ounces to 119,000 ounces of gold.

Overall, our West African operations has demonstrated resilience and a strong performance. We remain focused on optimizing production, advancing our exploration opportunities while maintaining our commitment to safety and operational excellence. Thank you. Back to you.

Thank you. David. Cesar, can you please share with us the highlights of the Latin business?

Thank you, Jorge, and good morning to everyone, in digital San Jose and Teoma had a strong second-quarter, selectively producing 28,286 ounces of gold, bringing our total to 56,231 ounces for the first half of 2024. Silver production was also robust with a combined total of 990,574 ounces for the quarter. And 2.1 million ounces for the first half of 2024.

I am pleased to report that all our Latin American operations are on track to meet their production guidance for the year. Our safety performance across all operations this quarter has been exemplary. Management at site continues to effectively implement our active leadership philosophy program, yielding excellent results starting in Argentina seeing Lindero's gold production in the quarter plus 22,874 ounces, a slight 2% decrease compared to the previous quarter.

This was due to a longer than expected maintenance pause of the HPGR and agglomeration plant, which required more spare parts than originally anticipated. During the quarter, 1.8 million tonnes of ore were mined at a stripping ratio of 0.7 to 1, a total of 1.4 million tonnes of four were placed on the leach pad at an average gold grade of 0.621 grams per tonne containing an estimated 27,663 homes. The operation experienced lower front end loader mechanical availability, which mainly impacted the waste mining plan for the period.

The mine plan has been adjusted to reflect higher waste mining during the third and fourth quarters with higher head grades on ore tonnage to be placed on the leach pad. This remains a line we have the annual guidance for the year.

As of the end of July, the $51.8 million leach pad expansion project, of which $41.7 million is to be spent in 2024 is approximately 64% complete. The construction package of the project commenced in January 2024 with contractors on site to undertake in airports, construction of the ocean line and a liner deployment procurement. It's practically complete with important items on site.

The new impulse new impulse online farm arrived on site in July, liner installation has progressed and contracts for the major mechanical works have been executed. The company expects to start placing ore on the leach pad expansion in the fourth quarter of 2024.

Gold production for the first six months of 2024 totaled 46,136 ounces. Lindero had a cash cost of $1,092 and a basic of $2033 per ounce of gold for the quarter reflects timing of sales as the company maintained higher inventories in default as of the end of July.

If we exclude the microeconomic effect related to inflation and devaluation for the second quarter our cash cost remains in line with company expectations at approximately $1,000 per ounce. As anticipated in our guidance for the year, our AC carries a heavy component related to the leach pad expansion project. If we were to exclude the leach pad expansion and inflation devaluation effect, EAC accounting delta would be between $1,400 to $1,500 per ounce.

For the second half of the year, the company expects in debtors cash closed on a six to remain in line with annual guidance. If the Argentine microeconomics do not worsen moving up to Mexico. San Jose produced 684,136 ounces of silver and 5,269 ounces of gold at an average take rates of 140 grams per tonne of silver and 1.09 grams per tonnes of gold, respectively, reflecting a 10% decrease and a 16% increase when compared to the first-quarter of 2024.

The processing plant yield 136,214 tonnes, averaging 1,980 tonnes per day. And the grade profile for the period was consistent with the geological model, silver and gold production for the first six months of 2024 total 1,443,287 ounces and 9,802 ounces, respectively, on track to meet annual guidance.

For the first half of 2024. In alignment with the mining sequence and production plan, the operation conducted an intensive preparation campaign to position the mine for higher silver and gold production in the second half of the year.

Mineral Reserves are scheduled to be exhausted by year end. The company continuously evaluating its options whether to execute a multi-year progressive mine transition and monetary plan for putting the mine on care and maintenance or maintaining operations at the mine.

San Jose had a cash cost of $24.91 and an ACV of $27.55 per silver equivalent ounce for the quarter when compared to the previous quarter. The increase in cost is mainly explained by lower head grades, lower production and a stronger Mexican peso as 50% of our costs are denominated in pesos.

Nonetheless, as previously indicated, San Jose's mine planned for the second half of the year, it counts for higher production, lower development and lower preparation meters, which will reduce both cash costs and AC in alignment with our annual guidance for the year.

Exploration drilling continues at the JSE vein to provide better understanding of the of the economic potential of the mineralized zone.

Moving to Peru, the Caylloma mine produced 306,398 ounces of silver at an average head grade of 83 grams per tonne of silver in the second quarter of 2024, 3% and 5% lower, respectively. When compared to the previous quarter.

Deferred production for the first six months of 2024 totaled 621,858 ounces in line to meet annual guidance. Zinc and Lead production was 13.0 million pounds and 10.5 million pounds at an average head grades of 4.8% and 3.83%, respectively, a 7% and 10% increase when compared to the first quarter.

Increased production is the result of higher head grades sourced from the lower levels of the Animas vein, zinc and lead production for the first six months of 2020 for a total of 25.2 million pounds and 20.1 million pounds respectively. Well on track to meet the upper end of guidance for the year.

Cash cost, presumably silver equivalent ounce for the quarter was $13.94, driven primarily by lower treatment and refining charges. The basic per ounce of payable silver equivalent was $19.87. Both cash cost and AISC are aligned with annual guidance for the year.

Back to you, Jorge.

Thank you, Cesar. Luis, a briefing on the financial results.

Sure, thank you. For Q2 2024, we have recorded net income attributable to for tuna shareholders arm of $43.3 million, as previously stated by Jorge or $0.13 per share. This is compared to $3.4 million and $0.01 per share in Q2 of 2023.

Net income in the period includes a large, deferred tax credit related to the issuance of our convertible notes. Adjusting for this and other noncash nonrecurring items. Adjusted attributable net income was $30.4 million, or $0.09 per share compared to $2.5 million and $0.01 per share in Q2 of 2023.

Main drivers for the higher net income were an increase in gold volume sold of 66%, as well as higher gold prices of 17% as has been noticed, the increase in gold sold is explained by the Seguela mine, which contributed 33,000 ounces in Q2 or 36% of total gold sold.

Our consolidated cash cost per gold equivalent ounce was $988, slightly above our Q2 2023 cash cost of $968, excluding San Jose, for which we are currently expensing all capital items. Our consolidated cash cost in the quarter was $879 per ounce, representing a reduction of approximately $90 per ounce year over year.

The reduction was due to the low cost contribution of Seguela with $564 per ounce, partially offset by higher costs per ounce at Lindero and Yaramoko. As in the case of Lindero assist or has mentioned, we expect we can remain for the year within the ASIC guidance range.

However, it is worth noting that we have been seeing an increasing impact on our costs from the growing appreciation of the peso as even though inflation is trending down, the peso is devaluation has been lagging the inflation rate. We have this trend to continue for the remainder of the year.

A few comments on the financials. Some depreciation in the quarter was $57 million, which includes $:17.5 million in depletion of the purchase price related to the acquisition of Roxgold in 2021.

On general and administration expenses, we recorded $22.4 million. And as shown in the breakdown we provide in the news release and in page 10 of our MD&A, this was comprised of close to $10 million of in-country G&A at our mining operations, $6.6 billion of corporate G&A and $5.8 million of share-based compensation compared to Q2 of 2023. \\

We have a higher mine G&A related to the addition of Seguela and higher share-based compensation explained by the rise of our share price in the second quarter. To a large extent, our effective tax rate for the quarter is distorted by the $12 million deferred tax recovery I previously alluded to. Excluding this effect, our effective tax rate was 39%, which is in the high end of the range of what we expect on average, which is up between 32% and 36%.

Moving on to our cash flow and the cash flows statement, we generated $73.5 million of net cash provided by operating activities, which includes $20.6 million of taxes paid, the majority of which is related to the Seguela mine in Ivory Coast. There is a pronounced timing effect impact in the quarter as the bulk of taxes beta at Seguela are concentrated in Q2.

In the investing section of the cash flow statement, we recorded $50.4 million under additions to mineral properties, plant and equipment costs consisting of $32.8 million of sustaining capital, including brownfields exploration and $17.6 million of non-sustaining capital expenses. This includes $6.5 million to acquire one half of the 1.2% NSR royalty held by Franco-Nevada at Seguela, $5 million spent at the number set and $6.2 million of exploration.

Our free cash flow from ongoing operations was $38.6 million, which considers corporate expenses and sustaining capital and our net free cash flow. After all capital expenditures was $21 million. We expect to see a peak in sustaining capital expenditure levels in Q3, mostly associated to the progression of the leach pad expansion and the Lindero mine and as Jorge has emphasized and as we have communicated before, 2024 is a heavy CapEx year at Lindero with a total budget, including capitalized stripping of $64 million comprising around 60% of our consolidated capital expenditures, excluding exploration activity.

While we're moving on to the balance sheet, we closed the offering of $172.5 million of convertible notes on June 10. The notes have a 5-year maturity, bear a 3.75% coupon and a conversion price of $6.59 per share at quarter end. The proceeds from the offering were partially used to fully repay the outstanding $125 million under our revolving credit facility.

Subsequent to the end of the quarter. The $46 million of convertible notes issued in 2019 were settled with approximately $10 million redeemed in cash and $36 million converted into shares.

Back to you Jorge.

Thank you. We can move on to Q&A. Operator?

(Operator Instructions)

Adrian Pay, Adrian Pay Asset Management.

Yeah, hi. I had two questions, if I may. Of the first question was on the on base metals and zinc and the lead. What proportion, I should know I could work this out, but what proportion of the revenue from the mine. Is that and how do you see that going over the next term 6 to 12 months? That's the first question.

Hello, Adrian, I would see base metals. I can stand to be corrected here by laser sensor. But my math doesn't fail me base metals account probably for two thirds of revenue today at the mine.

And how do you see that changing in the next 12 months or so?

In the previous cycle, just as a quick reference, talking about 2011, some years ago now a silver and base metals were pretty much 50-50 in terms of revenue contribution that has shifted and to add some more base metal reach component.

And we expect this break of silver and base metals will remain as what we have in our plans for 2024, 2025. Can we adjust that? Yes, we could have some silver reach veins. But those veins at these prices today are not in the mine plan.

Okay. That's helpful. And then secondly, I don't know, I know you've talked a little bit about San Jose, but can you expand maybe a little bit on what your current thinking is about San Jose for next year?

Yeah. At San Jose, we have currently three options in front of us. We are set to exhaust reserves as they were the reserves we estimated early late last year, early this year, and we've been working on several fronts. If one is exploration. And yes, even something that we have been talking about.

Second is, you know, or they're changing scenarios, higher prices if the peso over the last weeks has weakened against the dollar. So all of those variables are being assessed as we continue optimizing the resources we have.

We are short on reserves right now, but we have close to I would say around planning, 29 million ounces of silver in resources. And all of the work we are doing is trying to optimize our processes to see how many of those houses we can bring into our reserve.

So we have three options in front of us. One by year end, we call a progressive closure. Second, we go into care and maintenance as well or exploration and evaluations continue or third, we have the opportunity to continue mining depending on the success of the work we carry over the coming weeks months. Before the end of the year, we certainly need to have clarity on which of those three avenues we will take in the third quarter. Right now, we are updating or mine closure plan where conducting exploration, we are doing several iterations on the optimization of existing resources.

All of that is taking place right now, but we certainly need to have a position where we expect we can have a position during the third quarter.

Okay, super. That's very helpful. Thank you.

Thank you.

Tony Christ, Odyssey Investments.

Yeah, thank you. It's Chris pronounced like Chris, anyway, thank you for taking the question for you. Congratulations on the quarter. You're experiencing dramatic growth idea. I have a two to actually a two-part question. I wondering if you could give an update on the share repurchase that you announced after the last quarter announcement and if the company is able to participate, then share repurchase and any guidance or color you can give on it?

And then and I and secondly, I'd like to know if your team might consider coming on a Zoom call with Water Tower Research there English and they handle smaller companies. I was what I call would be two Golden. I was impressed. They had 12 research analysts and they have I think more stability?

Well, they have less variability in the price of their stock. And I think it helps get the word out to an entity through an entity that's not vested interest entity. So I'd like to ask if you'd consider that if I can call them and arrange it having that. But thank you and congratulations again, just an astronomical quarter and you're growing even if gold prices stay constant, so congratulations.

Thank you for that. With respect to the share repurchase program, yes, we have a program in place. We have not been active on the program over the last month. But that is something that we are revisiting a constantly and the when we participate in the market response to our use of funds at the time or view on valuation and movements in the market.

So, yeah, we you can expect to see us active in the market anytime in with respect to a meeting and learning about other as I understand you potential houses that can give be interested in learning more about the company.

Yes, absolutely. There, you see a channel through Carlos backup info for tuna, and we can certainly arrange a conversation anytime.

Yeah, I will contact Carlos. Thank you so much.

John Pereira, Private investor.

Good morning, gentlemen. Again, I've got to iterate. Congratulations on the quarter. Just as a follow-up to the previous question on San Jose and others, exploration going on with on with the SC vein? And when do you expect that we're going to see and update on that exploration again, I guess that part, I guess, ties into one of the three options for that for the San Jose mine. So first question is and when do we expect to see an update on that exploration program?

The bulk of our drilling is done. We are currently assessing the results and run durations with the results we have in place. As I said, it is in this third quarter, but we must have clarity on the path forward bringing into consideration these exploration results, the iterations of the optimization of existing resources for reserves and the updating of the mine closure plan also?

Yeah, it's work that its ongoing and hopefully before the end of the quarter, we can be in a position to make a decision and where shared with the market.

Right, okay. And then the second question is thank you for that. And the second question is on the sustainable capital costs that the Company is incurring and is indicated that when Lindero was a $64 million cap CapEx plan for the leach pad and so on.

I didn't maybe I missed it, but I didn't get an understanding of how much is left to be spent of that $64 million. And I did read that the remainder of that was going to be spent here in Q3. Maybe just give a little bit more clarity too. And that component of CapEx, how much more is to be spent on the two leach pad and what additional capacity they're going to provide?

And then maybe when that kind of CapEx number dropped. And if you can give some clarity on when that CapEx number drops in. So to end to what it's going to you expect it to drop to as a normalized quarter on quarter CapEx rate for sustainable capital?

Yeah, just a clarification. The total sustaining capital for later this year is the $60 million-plus you mentioned out of that figure. The leach pad is $42 million this year, right? So A., we are the six the leach pad is over 60% complete 60%, 64% complete by the end of the quarter. And we do expect to see a still CapEx execution in the third quarter and that CapEx execution tails off in the fourth quarter.

The leach pad expansion is a project that was always in the technical report. It was a project scheduled to be executed on years, three of operations and a etc. It sets up the mine to receive or the path to receive a reserves for over a decade.

There are also, you know, throughout the next decade all other minor investments that will have to be done periodically as would be expected, but the bulk of the investment is being executed now and it sets the mine for the next deck.

Right. So perhaps say seven or eight or Luis have a detail right now on our expected CapEx for the fourth quarter, but the project is complete on the fourth quarter. So CapEx still heavy CapEx on Q3 and then tails off in Q4.

Okay. So that $64 million number was the overall total half the total of which you're saying $40 million for the leach pad, 60% spent on that, so say $24 million to spend on the leach pad. And then and then the remainder of the $64 million will be spent between the third and the fourth into the fourth quarter?

Yeah, I understand. You'll have ongoing nominal amounts for it's a CapEx cost for maintenance on any mine, but the bulk of the leach pad and the other CapEx for Lindero will be we'll it's I'd say it's somewhere around $30 million, $35 million still to be spent in Q3 and Q4 in terms of larger CapEx spend on Lindero, would that be you can see there has been perhaps release or says I can help complement here and that is we still see it.

It's Luis here. That is that is accurate. That is a fair estimate of what we should expect in the second half of the year.

And just to complement on that on an ongoing basis annual CapEx for the middle, we should expect to see more in the range of $20 million on a nonrecurring basis, right beyond 2024.

So annualized basis $20 million to $25 million ongoing CapEx or we are yes. And that is yes further. And then that there is a component in Argentina for a larger component in CapEx as well for now. Did I have that wrong?

Again on an ongoing basis here? Go ahead, Luis.

Sorry and I was just wondering, I wanted to provide a clarification on. So for 2024, I think we have just recapped what we should expect for the second half. And as you correctly pointed out, what we had indicated for the total year in terms of total CapEx, including the leach pad.

And we're clarifying now is that beyond the leach pad expansion, the $20 million $25 million is a fair estimate for the recurrent annual CapEx for Lindero moving forward. There's nothing else.

Okay. So yes, I mean, again, thank you for taking all the time guys, but I guess what I'm also saying is you'd offer anywhere else any of the other mines? Is there any and on additional major sustainable CapEx? Obviously you've got your CapEx for exploration that's second line item there. But is there any or any other major sustainable CapEx expected here in Q3 and Q4 and going forward, as you're aware of, but no, no, no.

No, we have a lot of visibility and control and are going to be capital projects for 2024 and 2025 and 2026. We have at every mine, always an expansion of the tailings facility and things like that. All of those are scheduling our lumps. But certainly the elephant in the room here is a leach pad expansion with $42 million.

Right. In the early we had none, no, yes. And no other projects of that nature in the portfolio today.

Okay. And then sorry. And then the last clarification on the question is when that the completion of that you have a completion of that leach pad, it's not it's not essentially going to enable additional throughput is just it's just going to allow you to process, as you indicated, process product, you know, for the next several years, the next decade or so is correct?

That is correct.

Okay. That's great. Thank you very much for taking the time to answer those questions and elaborate. Appreciate it.

Thank you.

Thomas [Besson], Private Investor.

Yes, I have a question of because of all the lack of power and the amount of tonnage that you could produce through your mill.

You use a higher grade of material to compensate for the less amount of tonnage going forward into the third and fourth quarter. Are you still going to use that same amount of high grade or of two mill.

And if you do, I'm assuming that that would be on much higher output of all of gold. And that's just what I want when I kind of know is on Is that how you're going to do things going forward? Thank you.

Yes, you are right in how we mitigated the power outages, we lost this again a mine in 19 based 19 one nine 19 base of operation in the quarter, not an aggregate of 19 days due to the intermittent power outages throughout the quarter.

The way we mitigated that was we had the capacity to run the mill at a higher rate. So we did and because we had some flexibility in the mine plan in the mine schedule, we were able to source higher grade. That was a mitigating plan put in place and executed well by or site team.

And in July, we have received 100% power from the grid almost. So we are reverting back to or, you know, mining schedule, you should expect to see grades decline with respect to what we saw in the second quarter and we what we should do is continue.

What we're working to you should expect to see is us continuing pushing the throughput now our de-bottlenecking efforts, initiatives optimization, and you should continue to see a higher throughput. So that's where the game is. It's more than grades right now.

Thank you very much for answering my question. And I look forward to when Chris Marcus interviews you on for two-minute silver on his site.

And I'll be listening to that when you're on the air with him very shortly. Thank you very much, sir.

Thank you.

Don DeMarco, National Bank Financial.

Thank you, operator, and good afternoon, Jorge and team. I was disconnected Just getting back in the queue. So I apologize if my questions have been asked, but I wanted to get a little bit more detail on Kingfisher.

In June, you released some exploration updates, some intercepts, some seeing some wide intercepts, high grade and certainly garnered some attention by auto, what the next steps that are acting Fisher and namely and how much infill drilling you acquired And how about like in terms of is there a potential to or is it too early to say to supplant some of the that or that's queued up over the next quarters or years with this higher grade? Thank you.

Yes, at Kingfisher up to seize the discovery hole to now, no. So basically throughout this year, we have already drilled about 14,000 meters and the 14,000 meters kind of outlined the gold mineralization in a shear zone that was not previously identified for a strike length of two kilometers and our plan right now is to continue drilling nonstop until the end of the year with the aim of producing a first a resource estimate.

We expect the bulk of that resource estimate will be in the first category. We are not focused on a tight infill drilling now to upgrade the quality of the resource, but rather fully understand the lateral and vertical extent of mineralization at this point.

So that is the focus of the program right now. Something exciting about this discovery is that it's a blind discovery has no surface expression. If you are acquainted with West Africa. You know that a lot of the deposits, most of the deposits in production today throughout the region have some sort of artisanal mining on top of and this one doesn't is a virgin ground and we are currently running orientation, geophysical surveys to see if we can pick up a signatures that we can extrapolate a as part of or a larger exploration program in the property.

We control 35 kilometers here on developed a lot of ground to cover still. So going back to Kingfisher, we expect to produce a first resource estimate by year end. You should expect most of it to be in the first category in this first half. If we expect to have a good sense of size and dimension.

And then broadly follow with infill drilling in 2025, early 2025, Kingfisher needs to first blows a resource upgrade, the resource in certain peak of February to indicated, we need to work on permits now for these one deposit to incorporate it into our mine plan and schedules it, but still early days but we're thrilled about what we are seeing wide zones of mineralization on a well-defined shear that has not been identified before striking for over two kilometers.

It remains open with a vertical extent that just remains open as well. It's shaping up to be broadly the largest deposit we have in inventory at figure Seguela today. So give us a bit of time to have the drill rigs through the deposit and probably in early 2025, we can start thinking about time lines for when these can contribute to a mine plan. I don't want to put the courage in front of the horses. So but we are thrilled. We're excited. It looks meaningful. We just have to do our work.

Right. Okay. Well, thanks for that. We'll keep an eye out for the remaining resource and any updates in the interim. That's all for me. Good luck with Q3.

Thank you.

(Operator Instructions)

We have reached the end of the question-and-answer session, and I will now turn the call over to Carlos for closing remarks.

Thank you, Holly. If there are no further questions, I would like to thank everyone for listening to today's earnings call. Have a great day.

This concludes today's conference and you may disconnect your lines at this time. Thank you for your participation.