IAMGOLD Corporation (IAG) Q1 2026 Earnings Report, Transcript and Summary

Thank you for standing by. This is the conference operator. Welcome to the IAMGOLD First Quarter 2026 Operating and Financial Results Conference Call and Webcast. [Operator Instructions] The conference is being recorded. [Operator Instructions]. At this time, I would like to turn the conference over to Graeme Jennings, VP Business Development. and Investor Relations for IAMGOLD. Please go ahead, Mr. Jennings.

Thank you, operator, and welcome, everyone, to our conference call this morning. Joining us on the call are Renaud Adams, President and Chief Executive Officer; Martin Jason, Chief Financial Officer; Bruno Lemelin, Chief Operating Officer; Ankit Shah, Chief Strategy Officer; and Annie Katie Legacy, Chief Legal Officer. We are calling today from IAMGOLD's office, which is located on 2013 territory on the traditional lands of many nations, including the Miscageof the credit, Donabate and Hotusoni and the WindaPeoples. At HANGOLD, we believe respecting and upholding indigenous rates is founded upon relationships that foster trust, transparency and mutual respect. Please note that our remarks on today's call will include forward-looking statements and refer to non-IFRS measures. We encourage you to refer to the cautionary statements and disclosures on non-IFRS measures included in the presentation and the reconciliations of these measures in our most recent MD&A, each under the heading non-GAAP financial measures. With respect to the technical information to be discussed, please refer to the information in the presentation under the heading qualified person and technical information. The slides referenced on this call can be viewed on our website. I will now turn the call over to our President and CEO, Renaud Adams.

Thank you, Graham, and good morning, everyone, and thank you for joining us today. Before I start, I'd like to welcome a will join IAMGOLD on Monday as our Chief Strategy Officer. Ankit, who many of you on the call are familiar with brings to our team nearly 20 years of strategy, corporate development and capital markets experience at a very exciting time for this company. So welcome Ankit. IAMGOLD is off to a strong start to 2026. In the first quarter, we produced 183,600 attributable ounces of gold. positioning us well to achieve our full year guidance of 720,000 to 820,000 ounces. The quarter was marked by robust financial results. with revenue exceeding $1 billion and mine-site free cash flow of $525 million. The cash flow we are generating is allowing us to execute on all fronts. As in the first quarter alone, we returned $260 million to shareholders through our share buyback program and repaid $100 million of debt on our credit facility while increasing our cash position. These results reflect the significant leverage of our business as to the current gold price environment and more importantly, the quality of the asset we have built and the teams that operate them. But what excites me most is where IAMGOLD is head. I believe we are entering 1 of the most catalyst-rich period of company's history. Over the next 12 to 18 months, we expect to deliver updated technical reports across each of our assets. Core gold, Westwood, Essakane and the Nelligan Mining Complex. These studies are expected to outline a larger, longer life production profile that we believe will redefine how the market views IAMGOLD. At Cote, the year-end technical report is expected to contemplate the significantly larger scale operations incorporating both the Cote and Gas, supported by an updated mineral resource estimate coming this quarter. At Nelligan, we are advancing 1 of the largest preproduction gold camps in Canada towards a preliminary economic assessment next year. And at Westwood and, we see meaningful potential of mine life extension and production growth. We will get into the detail on each of these through the presentation today. When I look at IAMGOLD today, with $2 billion of EBITDA generated over the last 12 months, a strengthened balance sheet and increasing production profile, catalyst that has every asset and meaningful capital being returned to shareholders. I see a company that is delivering on its promises and building something very exceptional. We are well positioned to create significant value in 2026 and beyond. and I look forward to walking you through the details. And with that, let's get into the quarter. Starting with health and safety. In the quarter, our total recordable injury rate was 0.44, a measurable improvement from the prior year period. I would like to highlight 2 big achievements in the quarter. As the Essakane mine achieved a milestone of 000 in the first quarter, and Westwood achieved its first full quarter at the 0 trip. Gold every mine side strives to reach. I want to thank our teams across our operation and in the field for the continued commitment to safe and responsible mining as safety is where it starts. for us. Looking at operation. And as I noted, IAMGOLD produced 183,600 ounces to our account in the first quarter. At -- good day, attributable production of 52,300 ounces was impacted by reduced throughput due to unplanned downtime associated with Warner on a conveyor belt as crushed ore volumes significantly increased following the commissioning of the second compressor. This belt will be replaced in May, after which we expect to operate at full capacity with an improving cost profile through the year as debottlenecking of the secondary crusher allows us to phase out the aggregate crusher. Meanwhile, Essakane and Westwood, both had a very strong start to the year, demonstrating the value of having a diversified portfolio of producing assets. Cash costs, including royalties, were $1,301 per ounce in a quarter, tracking well within our full year guidance range, including royalties, cash costs were $1,608 per ounce, and all-in sustaining costs were $2,124. It is worth highlighting that both Code and this carry significant royalty structure, which are directly linked to the gold price in a quarter where the gold price realized was nearly $4,900 an ounce. The royalty component is naturally higher than what our guidance assume at $4,000. As a reference, this worked out to around $115 per ounce increase in cash costs for $1,000 per ounce increase in the gold price from a royalty alone. Meanwhile, on the input cost, the ongoing conflict in the Middle East has introduced additional volatility to energy market, and we did see oil prices move higher towards the end of the quarter. scan in particular, has meaningful exposure given its reliance on diesel and heavy fuel oil to power both the processing and the mining fleet. On a consolidated basis, a $10 per barrel increase translates to approximately $12 per ounce increase in cash costs. We are actively monitoring energy price movement and potential supply chain impacts across all of our operations. With that, I will pass the call over to our CFO, to walk us through our financials matter. Martin?

Thank you, Renaud, and good morning, everyone. The current golf market and our operating results have resulted in good financial results and considerable free cash flow being generated, which is which allows us to continue to execute on our capital allocation strategy to maximize value. We produced $524.6 million of mine site free cash flow that is operating cash flow minus capital expenditure from each operation. $228.4 million of the funds was used to strengthen our balance sheet by repaying $100 million of the credit facility and we also increased cash by $128.3 million. For the shareholder return component, we purchased $260 million or $12.9 million of shares as part of the share buyback program. Subsequent to quarter end, we purchased an additional 2.1 million shares for $40 million, which brings the total shares repurchase by IAMGOLD since the start of the program last December to $350 million. or 18 million shares. In addition, we completed the debt repayment component of our plan and paid down the remaining $100 million balance of the credit facility, making the full facility available. The company tend to continue to use cash flow from Essakane to fund its share buyback program at approximately the same rate of cash generated and we parted from Essakane over the course of 2026. Naturally, the actual number of common shares that may be purchased if any, and the timing of such purchases will be determined by the company based on a number of factors, including the gold price, the company's financial performance, the availability of cash flows, consideration of uses of cash and our strategic allocation. In terms of the financial position, at the end of the quarter, IAMGOLD at $505.2 million in cash and cash equivalents with $100 million on the credit facility, resulting in liquidity at the end of March of approximately $1.1 billion. With the $400 million term loan we paid at the end of last year, and the repayment of our credit facility, IAMGOLD today is the net cash position, a significant milestone for a company that a year ago was carrying over $800 million in net debt. Within cash and cash equivalent, we note that $281.9 million was alpaca at the end of the quarter. The cash balance at this account increased during the quarter and will be used to fund tax payments in April. and the government Burkina Faso's portion of the 2026 dividend payable in June. The company uses dividends and shareholder account structure to repatriate funds in excess of working capital requirements from. Turning to our financial results. Revenues from operations totaled $1 billion from sales of 211,500 ounces. On a 100% basis, at an average realized price of $485 per ounce. The record gold price and operating results resulted in adjusted EBITDA of $666 million in the first quarter of the year. which brings the trailing 12-month EBITDA to a total of approximately $2 billion. At the bottom line, adjusted earnings per share for the quarter was $0.67. Looking at the cash flow reconciliation for the quarter, offers a good visualization of the major drivers in the quarter. We see good conversion of EBITDA into operating cash flow with $629.5 million of operating cash flow before working capital changes. As stated earlier, the significant operating cash flow allowed for the funding of our capital expenditure of $101.6 million $260 million under the share buyback program. We paid $100 million of the credit facility, while still resulting in an increase in cash of $128.3 million. As we look ahead with the debt prepayment golly, we will continue to see the share buyback flow by using cash flow from Essakane and the remaining cash going to our balance sheet. to further strengthen it as we evaluate the best use of the funds to increase value of the business. We are evaluating an appropriate time to induce a dividend that would likely be at the end of the year or early next year. It is worth reinforcing on how we think about our capital allocation framework today. The Canadian platform, consisting of Protego and Westwood is generating sufficient cash flow to fund the company's Canadian operations and corporate activities as well as our internal growth plans over the next 3 years. This is important because it means that the cash revenues account can be directed to fund our capital return to shareholders. that currently consists of the share buyback program. And we believe there is compelling logic to that. The market has historically applied the discounted cash flows generating with kinase. By repatriating those funds to Canada, and using it to repurchase our shares at current market value, we are effectively converting cash with the market discounts into full value equity for our shareholders. We continue to evaluate the program and believe that this is currently the most prudent use of capital. And with that, I will pass the call to Bruno Lemona, our Chief Operations Officer, to discuss our operating results and outlook. Bruno?

Thank you, Martin. Starting with Cote go. Looking at the quarter, Cote produced 74,700 ounces on a 100% basis. Mining activity totaled 9.3 million tonnes of material mine with 3.6 million, representing a strip ratio of 1.6. Total tonnes mined were lower in January and February. The operation completed overburden removal activity required to open up the bid while managed seasonal winter condition. Mining activity in pre March drilling and blasting command in the pushback area. We mined in the quarter was 0.99 grams per tonne, in line with the mine plan. Net throughput in the quarter was $2.3 million as we noted in our results, was limited due to some time on the Citycon conveyor, which feeds material from the primary and secondary crushers to the screen of building. This downtime was primarily due to the increased load on the conveyor following the installation of the secondary crusher. putting additional stress on areas of the company or belts that have prime were in license. We were able to refine our repairs in early April. We then saw improved performance of the belt when the debt plant averaged 32,000 tonnes per day over the month. Later this month, we are installing a new heavier gauge belt, which will allow for the circuit to resume full operations above the -- in summary, the Citadel situation is not structural in nature, but an isolated, nonrecurring early mine item. We are seeing fewer of these as the operations stabilize margin and then we step forward versus the past 12 to 24 months. Cordis transitioning into a phase for first on operating discipline and consistent execution. Net grades for the first quarter was 1.07 gram per ton, in line with the guidance for the year of 1.1 gram per tonne with recoveries of 93% -- we continue to be very pleased with the reconciliation between reserve model, group, grade model to life and production. Production is expected to increase quarter-over-quarter as throughput increases in Q2 and on higher grades in the second half of the year. We remain on track with code-based production guidance of 390,000 to 440,000 ounces for the year. Looking at costs Coty reported first quarter cash costs, excluding real fees of $1,359 per ounce and an in sustained cost of $2,109 per ounce. We have been clear with our plan to lower our cost this year, and that 1 is still in place. Our goal is to exit the year at sub for that refund mining cost and processing cost in the mid-teens. The primary driver is to lower costs this year are fourfold. -- on increased from the mill and higher production. Second is to significantly reduce and remove the reliance on the contracted aggregate crusher. Third is with improved maintenance cycle inter-sales performance improvement and for is to realize the operational efficiencies and the fifth year of ducts. The second goad crusher is operating well, which has removed the bottleneck on this area of the secondary crushing circuit. Later this quarter, the increased capacity will allow us to phase out the usage of the aggregate crusher, which we contracted last year to allow the plant to its 2025 goal. We have already realized benefits beyond the additional volume capacity with the HPGR seeing an immediate debt reduction on where of its growers, which will translate to less rotor replacement over the course of the year. As Rene pointed out, cost at growth are affected by higher gold prices. In the first quarter, royalties accounted for $335 per ounce or 20% of cash costs. Further, and this is something that we've been asked about frequently of late is the impact of rising on price. The benefit to is that the plant in our are connected to the low-cost hydro risk. So effectively, only our mining fleet is directly impacted by fuel prices. Based on our estimates, this translates to about $7 per ounce increase in cost per $10 increase in the price of oil. With a fast forward this year to a higher production and lower costs, -- all eyes turned to what the next 2 is once. The first step is the upcoming of the mineral resources estimate, which will combine both the Coty and Galindo into a single block mall. The goal is to see additional upgrading of ounces into measured and in scale. The resource base will form the foundation of the Cote Garten expansion mine plan, which is still on track to be announced in the fourth quarter of this year. The report will envision a near-term expansion of the Cote plant to 50,000 to 55,000 tonnes per day targeting a significantly larger resurface from the updated resource. We expect the expansion to be highly accretive on a not basis as the near-term capital required for the plant expansion is relatively modest. The permitting and larger requirements for additional savings management and opening of Gardline will likely be staged out many years in the most time. Turning to S1. The mine continued its strong production proceeding 26,300 ounces of the quarter as underground activities very well with excellent marking and foisting performance. Underground mining totaled 106,000 tonnes in the quarter with an average head grade from underground of 9.85 grams per ton. Regards to compensate a lower or termed mine of 60,000 tonnes, operations prioritized waste stripping to open up access to additional or with opportunities to further extension maturity expansion. Net group in the third quarter was in line at $303,000 and turn at a blended average grade of 4.4 grams per tonne and recoveries of 92%. Together, Westwood produced $110 million of mine free cash flow in the first quarter, bringing the last 12 months of cash flow generation to $242 million. Westwood demonstrates what disciplined execution and incremental optimization can deliver safe operations stable collection, expanding optionality and strong free cash flows without step-change capital. As a result of the strong quarter, cash costs averaged $1,270 per ounce and all-in sustaining costs averaging $1,733 ounce, well below the guidance ranges for the year. We have seen a modest mining cost increases on a per unit basis associated with increased driven securities and higher explosive costs. Looking ahead, our teams are quite excited for the future of this year. This year, we are spending about $30 million on expansion capital that has been used to explore MTESthe Eastern extension of the mine, which you can see circle here on Slide 13. We are seeing the sticking of mineralization in this area -- our project teams are currently drifting into this area to come back both testing. The company plans to publish an updated technical report or westward in the second half of 2027, which is expected to extend the life of mine and highlight the potential for both mining in this Eastern zone. This approach would potentially support higher overall underground throughput, and this conceptually would allow for increased gold production at improved mining costs, allowing the mill to be filled with higher-margin material. Turning to Essakane. The mine reported record production of 111,900 ounces on a 100% base, as rates continue to benefit from the positive reconciliation as mining progresses deeper into Phase 7. As a result of the strong performance minifree cash flow from Essakane was $302.7 million in the quarter, bringing the total cash generated by Essakane the last 12 months to $803.6 million. On operation, mining totaled 11.9 million tonnes versus 2.2 million tonnes, translating to a strip ratio of 4.4:1. The higher proportion of waste was a result of the initial pushback of the DIP expansion in the now it. The mill reported in line throughput of 3.1 million tonnes, which was a good achievement as the plant completed its annatto. Head grade averaged 1.24 grams per ton coming off the record grade last quarter. Despite the positive reconciliation impact in Page 7 we are maintaining our guidance for the year of 1.1 grams per tonne additional ore from Gavin talk into the mine plan. Isaac came within guidance ranges with cash costs excluding core fees of $1,083 per ounce and all-in sustaining costs of $2,125 per ounce. Mining costs benefited in the quarter due to freely gain of the initial satellite ventures of the level pit, resulting in reduced exclusive consumption. While on a project basis, these savings were offset by higher synergy and consumable costs and the replacement of the liners. Atacand costs also have exposure to the gold price. In the first quarter, the strong oil price conflated royalties accounting for $597 per gram or 35% of cash flows. Further, Essakane heavily reliant on nice raise on the usage between living and mining, it is estimated that a $10 increase in the price of oil per barrel would equate to about $20 per ounce increase in cash costs and in all-in sustained costs respectively. At this time, our fuel supply has not been impacted by the conflict in the Middle East, to risk, the price and supply have increased. the company access effectively monitoring the situation and supplementing measures that are within its control. This account continues to be a highly cash-generative assets, delivering strong free cash flow while operating optionality to an updated mine plan for being a potential 5-year expansion of its current life of mine. In the first half of 2027, IAMGOLD going expect to release the updated plan, which would exemestane 2033. This work will also support the discussion with the government of Burkina Faso at end of license renewal in 2028. Today, this account post 4.4 million ounces of measured and indicated resources with ferro suppose by ongoing drilling. With that, I will pass it back to Renaud.

Thank you, Bruno. This brings us to the Nelligan Mining Complex. The first quarter was the first full quarter that we controlled the consolidated district and our exploration teams have been drilling to expand mineralization at Filber Milligan and Monster Lake, while prioritizing targets for further discovery. This year, we will be drilling over 60,000 meters to advance the project so we can release our initial PEA study to the market in the first half of next year. The Nelligan Mining Complex already has a significant mineral inventory of over 4.3 million ounces of measured and indicated and 7.5 million ounces of inferred resources. And we believe there is meaningful upside to those numbers. Many of these deposits and targets have not had a sustained or well-funded exploration program behind them. That is changing now, and we expect the mineral inventory to continue to grow as we put capital to work across the district. We expect the study to outline a project with a central processing facility being fed from multiple ore sources within the 17-kilometer radius, considering the minerals wealth and potential for growth and the fact that IAMGOLD owns 100% of the Nelligan mining complex has the potential to be among IAMGOLD's largest mine. The Nelligan Mining Complex is already positioned as 1 of the largest preproduction gold projects in Canada. What makes truly compelling is the combination of district scale consolidation across multiple million ounces deposit. The ease of access, the combined of underground and open pit mining and the fact that is located in Quebec, 1 of the premier mining top premier mining jurisdictions in the world. Taken together, we believe this attributes positions Nelligan as a premium asset in our portfolio. and 1 where we expect to unlock significant value as we amend the project through the study process. So with that, I want to thank our shareholders for your support. We truly believe it will be an exciting year for IAMGOLD with significant value growth opportunities ahead, including the upcoming resource update at Cote, the code expansion study later this year, followed by next year where we outlined a mine life extension in face in the first half the year, an initial study wrapping economics around Milligan mining complex also in the first half of next year and a mine life extension expansion under goat Westwood in the second half of next year. So altogether, we have significant value accretion catalysts ahead. With that, I would like to pass the call back to the operator for the Q&A portion of the call. Operator?

[Operator Instructions]. The first question comes from Sathish Kasinathan with Bank of America.

My first question is on Essakane. Are you seeing any risks in terms of potential supply disruptions for diesel or fuel oil over there? How much inventory do you currently have on site? You also talked about the direct cost impact from higher oil prices, but how should we think about the indirect inflationary pressures?

So maybe, Martin, you take that.

Satish, we are we are derisking the fuel supply at Essakane. We have supply at site that's 5 to 6 weeks, and we try to maintain that at maximum capacity. But then what we've also done is we continue to secure additional fuel up the supply chain. So we have secured that field. So for the next 2 to 3 months, Acan has already secured sufficient fuel -- the impact, as we stated for the direct impact on the actual cost per fuel that is linked to the market price is about $20 per ounce for per barrel. There is other costs at Essakane as well there's taxes on fuel and those impacts. But we have not seen other inflationary pressures at Essakane or the other mines at this point, and it's hard to estimate those. If you look at our energy cost as a company, it's about 20% of our operating cost and our consumables is about 15% to 16%. So that's kind of like the level of our cost structure that could be impacted by inflationary pressures. But it's hard to, I think, for anyone to predict at this point. what exactly that would look like.

Okay. My second question is on Cote. How should we look at the quarterly guidance of production and cost, especially for the second quarter with the reduced operating capacity and the scheduled maintenance shutdown in May, should we expect the average milling rates and cost to improve versus the first quarter? Or is it more like a second half story?

On -- we expect that once we have completed the shutdown in middle of May, like it's meant to be on the May 20 -- we're going to be replacing the conveyor belt, we're going to be replacing also the HPGR tires that were supposed to be change earlier in the year. And -- we are going to make some adjustments in certain areas. But after that, we're going to resume to full operation and even going beyond the nameplate capacity. So it's what I did is that the expectations both on the mining side and mining side, the unit costs are expected to decrease and to have a sharp improvement in terms of gold production quarter-over-quarter.

This is Graham. And you'll note in our news release that we refined our throughput guidance for Cote for to 12 million to 13 million tonnes for the year.

Okay. congrats on a strong year-to-date buybacks.

The next question comes from Anita Soni with CIBC.

I just wanted to ask a little bit about Westwood. So this quarter, a little bit lower production from the Grande deposit or from the open pit, I'm not sure if it's still granted. But how long does that -- how long do you expect to have that or I think I said into 2027? But I was just trying to figure out when it ends in sort of the ramp-up in 2026 in terms of the tonnage over the course of the year.

It, this is Bruno. Good question. We are seeing net new from grade to be extended even beyond 2027. We have also options Phase 5 that put through even beyond till 2029. That's what we're doing right now. We are currently evaluating those options. So been like a great support for Westwood. And the moment that it will be tailing off, it would be also a great moment for the Eastern zone that I'm referring to the thicker part of the underground from at Westwood to replace that material.

If I may add, Anita, -- so what I really like about the work that's been done and the drilling that took place in the last 2 years. our effort has always been to protect the production profile on the upside basis. the potential Phase Grand Duke should we be able to maintain this up to 2029, '30 followed after that by an increase of the underground in the East. So this is the focus right now. So you don't see any gap. And if anything, continue to increase profile -- it's a bit of about the same thinking, and I appreciate the kinases are different situations we monitor and so forth. -- the best, of course, would be to completely offset the gap and Ciplan can also being capable to maintain the production profile. So that's really the focus at this stage, understanding that we would be continuing to monitor the situation in the West Africa.

Yes. And I guess what I was driving at was on the Westwood was this quarter, you had very good cost and very lot of mining from the underground and with the Grand Duke ramping up. I'm just curious to see how the -- like the -- theoretically, the overall mining cost per ton should actually drive down more with more underground -- sorry, more of the open pit ore coming in. So I'm just trying to get a handle on, you've had a significant cost beat in the first quarter at Westwood relative to your guidance. So I'm just trying to figure out how those like how should be thinking about costs for the rest of the year.

It's Martin. So I agree, we had a great quarter, if you look at the dollar per tonne for the underground mine. We do expect it to maybe increase just above the 300 level again for the rest of the year that it might not be signed at that level. So it tries to do that $325 million for the full year, again, as we saw in the past. So Yes, we don't expect Q1 to be the norm for the recipe.

We wish so, but we do understand that there are some zones, some areas in the mine that requires maybe more support and so forth. So you cannot really just it really depends where the guys would be where the team would be mining. But our focus is to remain at the lower cost, but I appreciate that we'll be mining out the sector as well, but higher comp.

Okay. And my other question on Cote on throughput was after in 1 of the other questions going above nameplate. So I'll leave it there and get back in the queue if I have any follow-up.

The next question comes from Tanya Jakusconek with Scotiabank.

Kreat.on,. Maybe I'll do the financial 1 first. Martin, over to you to maybe talk about the $400 million dividend after tax that you're getting in from Essakane. Should I do think that all of that now could be going to share buyback in like Q2 or Q3? How should I be thinking the payment of the $400 million over for the share buyback from a quarterly perspective?

Dana. So -- we have about $200 million left on the shareholder account for last year's dividend. We expect that cash to be repatriated by June or July of this year. And then the reason why this is a bit of a slowdown is because of the tax payments we have to make in Q2 as well as the government is getting the $100 million portion of the dividend. So the cash that we bring in, we expect for the remainder of this quarter to spend EUR 40 million to EUR 50 million a month. We readied EUR 40 million in April, so kind of like getting to that EUR 400 million for the year, likely on the this share buyback, we will continue to evaluate. But that EUR 400 million that we declared in June is then a new shareholder account of EUR 400 million and then as we then repaid at cash from Isaka, we would then continue to use that to potentially fund share buybacks for the second half of the year into next year. Gold price dependent is the exact sequence of that. But we could cut vision on the next quarter setting us through the middle of the year.

Okay. Great. That's very helpful. And then my other financial question is just on the taxes were quite low in Q1. When I look at your guidance and what you paid significantly lower, maybe just a little bit about what's happening there and how you see the rest of the year. coming out in terms of taxes?

So from a cash tax perspective, we've paid about 14%, if you take our guidance, cash taxes. We still think our cash tax guidance is impact. And maybe if you look at it for how we spread over the course of the year, like 14% to 15% in Q1 and Q4 and then the remainder is spread over Q2 and Q3 and that's again driven by a cash tax payment in Q2. And the withholding tax payment on the dividend, that's normally either end of Q2 or beginning of...

Okay. Yes. Okay. Perfect. And then just moving to some of the technical questions. maybe Rena over to you to -- as I think about this updated resource that is coming out on Cote Osland at the end of, I think, it's this quarter or in Q2. Should I be thinking, and I think I heard that we're upgrading the measured and indicated category. So should I be thinking that, that 20 million ounces that you have outlined should I be thinking that $2 million of inferred gets moved into measured and indicated and there will be no increase to the reserves that you reported of 7 million ounces or should I also be thinking that, that $20 million overall should get bigger? Just trying to understand what to expect.

No, thanks for the questions. And we've been socializing this quite a bit. If you look at our year-end mineral resource where we're sitting below the $19 million and the $18.5 plus million of measured indicated. There were still some holes to be integrated in the database. We've done some work in the saddle as well. So in short, our confidence remain, as you say that there would be additional conversion to MI to our objective of 20 million ounces of measured indicated and as you drill, as you continue to improve your inferred as well. So we would all clarify this, but the most important thing is our objective remains $20 million of measure indicated, and that will form the basis for the reserves. We will not disclose the reserve, obviously, because we'll trigger the need for the report right away. So we're going to clarify in Q2 our resource and the reserve then will be a measure of a factor of conversion of the $20 million. Obviously, we're expecting a significant increase in reserves out of the $20 million. but that will be clarified in the study as we come out at the end of the year.

Okay. That's what I thought was going to happen, but I just wanted to make sure -- and then just maybe on -- I know we talked a little bit about these costs coming down at Cote on both the mining and the processing. As we think about this new study that's coming out in Q4 for this complex, should I be thinking that the new study should have cost under $4 a tonne for mining and processing in that $12 to $14 a ton as a combined entity. I mean, they were quite high this quarter, as we know, for various reasons, but I'm trying to understand if going to be benchmarking on that under $4 a ton and $12 to $14 on the processing.

The -- you're absolutely right. I appreciate you know that in the short term, cost has been hired. And as we highlighted in Q2 last year, the use of the Gregor plan is a big portion of it. not having the capacity and the dry and short. All this have been tested. We've been using as well some external view as well to revalidate all this. We're talking about visibility level type of studies. So we remain extremely confident. We understand and appreciate our costs are higher, but I think we have good visibility about what has to be done. So this is a focus as we partly aggregate and focus on reducing. It's not going to be all in 1 year. It's going to be spread over a couple of years to 3 years. Our are highlighted heading to the expansion. So maybe Bruno just quickly what you see as the main focus in the second half of the year in terms of customers.

Yes, like for the mining cost, you will see those mining cost rein the second and for the rest of the year, mainly First of all, it was a volume really good thing for Q1. And as we expect volume to increase or net costs are going to go down. Second is we have also made like great improvement in drill and blast increasing our performance by 65% of late. We're also going to receive 4 additional 7 mines increasing arm. So we're putting everything in place to be successful to be below the $4 a ton before the end of the year. Same thing happened for the mining costs at the moment that you take out to remove the aggregate crusher, the contractors and demonetization of other contractors, you will see also a sharp reduction in cost. We are also making improvements here and there. The is part of the optimization phase. And as Rene pointed out, that optimization phase is going to take a good 3 years make sure that we see within a downward pressure for the cost. So we're quite confident that the 43-101 is going to be well spotted by assumptions that are realistic.

Okay. Understood so a basis to go forward on that. And maybe just my final question, as I thought about the rest of the year. And I know in the previous in February, the guidance has been that Essakane production would be relatively stable through the year was Westwood and then Cote would see quarter-on-quarter improvement and we saw a stronger second half. So how are we looking at the overall company for production profile for first half, second half?

Yes. It's going to be much stronger as we mentioned for Cote, the grades are going to be overing between and -- so we have to expect as far H2. For Essakane, it's going to be quite stable. We need to -- and we mentioned that we remain within guidance as we start implementing the ore into the mine plan. Westwood is just like the only thing that we use for was what it's just been a stable operations, stable and safe operation, 1,000 -- 1,000 ounces a month on average and coupling more, we can be a. So overall, you will see much stronger H2 as opposed to H1. And I think this is what we also disclosed last quarter that H1 would be the softer to take into account the winter conditions and soften changes for the HPGR changes and confidence. So I think right now, we're being.

Yes. No, that's what you had that. I just wanted to make sure.

The next question comes from Hamed idea with National Bank.

Maybe if I could maybe ask a question on the underground -- we've now seen 2 quarters a mining rate above the 1,100 tonnes per day and grades over that 9.8 grams per tonne mined. So could you maybe help me understand how to think about the next few quarters in terms of mining productivity, Integrate over the coming quarters?

The oiling, the marketing is going very well. Our targets are close to 1,000 tonnes per day. And in fact, we're exceeding those metrics every day now. It's done through our optimization and better engineering, better preparation. Hosting, you know we have a 4,000-tonne capacity at Westwood. So we have plenty of capacity at Oi. So it's not constrained. Therefore, the additional gives us great hope that whatever improvement that will be done at Fort will become new mags catalysts into the gold production in the -- but overall, what we plan is we grew we've done what we do and we do work on -- so trying to make sure that we have stabilized the patient, and we improve in an increment manner the Westwood operation on OmiFixbutemeter of admin per day, meter per manship -- the drilling is doing very well also, and we have a new Simberi coming in -- so the drilling performance is also improving very well. The ability of our mining crews to a new zone or improving also with the algorithm that we have developed over time. So overall, it's going well.

I appreciate that you've seen like quite a significant increase. I mean, again, it's a little bit of the questions on the cost side, depends a bit where you mine as well. what we want is reliable and safe operations. Are we going to see a continued increase. The focus is really to deliver sustainable and safe operations. So we're very comfortable, really like the last quarter. But I think like being in the zone of the 1,000 to the 1,200 is a good zone, and we're going to always prioritize the safe operations, Mohamad I appreciate your question.

That's very helpful. And maybe if I can ask a second question on AkoteGold on the improvement on the process cost, and sorry if I missed this, but is the improvement of the maintenance time line for the HPGR already reflected in that expected cost improvement you have for the end of the year? Or is that a positive surprise following the installation of the.

No, I wouldn't call a positive surprise. I would say a validations of what has been our belief since the start, again, with the short of capacity in the dry. We knew we were feeding the HPGR slightly outside of its design criteria with the course of ore, which was accelerating the wear on the machine. So since we've commissioned the second column, we've been in capacity to return to the design criteria within an automatic and overnight change. And we expect the change of the tire now to get back to the life spend that we're expecting. So yes, we're not expecting another change of tire this year, and therefore, it is built in the reductions of cost post change.

The next question comes from Josh Wolfson with RBC.

I apologize. I just want to clarify a couple of things. I'm having trouble hearing some of the data points. Just going back to some of the details on Cote. -- this comment about the plants operating above nameplate in the second half of the year and some of the tonnage numbers that was provided. -- the numbers look to imply about maybe 10% to 15% above nameplate in the second half. I just want to clarify, does that sound correct? And then -- is it reasonable to assume that those throughput levels can be sustained beyond 2026 even before the expansion takes hold?

Yes. When we say that we can produce about mantras we have more than many days above 36,000 tonnes per day, even 42,000 tons per day remit. With the addition of the second on crushers and also allowing the gain-of there protecting now the HPGR, which is going to be running very efficiently. We expect to remain into that loan between the 36,000 tonnes per day and 42,000 tonnes per day in average. So that's very promising for us. We with the shutdown that we have in August and other shutdown that we have in certain areas, we are still evaluating and planning an overall average throughput of 36%. But overall, like when you have a very well run rate, it goes well.

What we've experienced, Josh, with the second column is we're for only a few weeks, unfortunately, before we started to have the issues on the conveyor. So the objective has always been to stabilize at the 36%. So what we've seen is effectively, of course, if you want to reach 36 when you upgrade, you need to be above. But we also had Brunel earlier talking about slightly better grade as well. So it's not just a matter of throughput. It doesn't matter that we should access as well better grade in the second half. But the priority at this stage is to demonstrate that minimum 36 average all time in the dry in the wet, as you cross finer, you will unlock more potential in the web as well. So for the first stage 1 is as soon as we change the tire, we change the bell, we parked the aggregate plan. The focus in June is to demonstrate that we actually get operated an amply then will come the optimizations on a step-by-step basis. But so far, so good for what we've seen with the crusher.

Okay. Got it. And then your comments about the better grade, as the number was mentioned on the call, again, I apologize for nothing of it here. It was said it was 1.1 to 1.2 in the second half. Is that correct?

Between 1 and 1.2.

Yes. So we did $107 million in the first quarter, and we're you could see a quarter above the $107 million. So we said $1 million to $1.2 million -- and hopefully, we'll see quarters about the 11.

Okay. And then last question. I know it's sort of been mentioned by some of the other participants just on mining costs for Cote. I mean I wouldn't necessarily extrapolate the current quarter. And obviously, there's a lot of volatility on the energy side of things. But what is a reasonable sort of mining cost for us to assume in the second half of the year would you factor in maybe I'm not sure what sort of energy price us. I'll let you guys figure that out. But maybe just at least high level, what would be the target steady state?

Martin, you can get some details, but I can say that at this stage, the focus is absolutely to bring those mining costs below the as we exit the year. Martin?

Just 1 thing we didn't mention earlier was that we've actually put in some price protection for oil at Cote. So for June as well as for all of Q3 9% Cote oil is hedged at a price of about $80 per barrel. So if the price goes above $80 per barrel, it doesn't impact our cost further during that period. And we still participate if the price goes below that. So that will help offset some of that cost as well to get us close to that fall. So as we exit the year, as we achieve our objective to drop our mining below the floor and get the mailing more towards the 15% as we exit. That is the main focus at this stage, knowing that there would be some more optimization to continue to take place.

This concludes the question-and-answer session. I would like to turn the conference back over to Graeme Jennings for any closing remarks.

Thank you very much, operator, and thanks, everyone, for joining us this morning. As always, if you have my initial questions, please reach out to Reno or myself. Thank you all. Be safe, and have a great day.

Thank you. This brings to close today's conference call. You may disconnect your lines. Thank you for participating, and have a pleasant day. Thank you.