Kinross Gold Corp Q4 FY2024 Earnings Call

Thank you for joining us. My name is Prila, and I will be your conference operator today. I want to welcome everyone to the Kinross Gold Fourth Quarter 2024 Results Conference Call and Webcast. I will now hand the conference over to David Shaver, Senior Vice President of Kinross Gold. Please proceed.

Thank you, and good morning. With us today, we have Paul Rollinson, CEO; and from the Kinross Senior Leadership team; Andrea Freeborough, Claude Schimper, Will Dunford and Jeff Gold. For a complete discussion of the risks and uncertainties, which may lead to actual results differing from estimates contained in our forward-looking information, please refer to Page 3 of this presentation, our news release dated February 12, 2025, the MD&A for the period ended December 31, 2024, and our most recently filed AIF, all of which are available on our website. I will now turn the call over to Paul.

Thanks, David, and thank you all for joining us. This morning, I will provide an overview of our fourth quarter and full year results, discuss our operations, projects, and provide an outlook for the business going forward. I'll take a few comments on our achievements in sustainability. I will then hand the call over to Andrea, Claude, and Will to provide more detail. With respect to Q4, we delivered a strong quarter, producing just over 500,000 ounces. With respect to the full year, once again, we achieved our market commitments, delivering over 2.1 million ounces. We also delivered on our full year cost of sales and sustaining cost guidance, which demonstrates our strong focus on rigorous cost discipline. As a result, we generated record free cash flow of more than $103 billion, which more than doubled against the prior year. This record cash flow generation also benefited from a strong operating margin, which outpaced the relative increase in the gold price. Our operating margins increased by 37% compared to a 23% increase in the realized gold price, maximizing the benefit of the gold price for our company. With respect to our operations, our 2 largest assets, Tasiast and Paracatu, were both outstanding. Together accounting for approximately 1.2 million ounces or more than half of our production. Tasiast had an exceptional year, delivering record annual throughput, production, and cash flow and once again was our highest margin operation in the portfolio. Paracatu continued to deliver full year production exceeding the midpoint of guidance, exceeding 500,000 ounces for the 7th consecutive year. At La Coipa, we delivered our full year production guidance as work continues on long-term optimization of the mill. In our U.S. operations, we had another solid year with production and costs on plan. Turning now to updates on our projects. In 2024, we continue to make excellent progress across our pipeline. In particular, we reached an important milestone at Great Bear with the release of the PEA in September. With the PEA, we have confirmed the top-tier potential of this asset—an estimated average annual production of approximately 500,000 ounces at an impressive all-in sustaining cost of approximately $800 per ounce. The Great Bear advanced exploration program has received all the necessary permits for our current activities, and we expect to receive the two remaining permits when they are acquired later in the year. The yearly works activities, including tree clearing and earthworks, commenced prior to year-end, and construction of the exploration decline is planned to commence later this year. Regarding permitting for the main project, we continue to work with the Impact Assessment Agency of Canada, and we plan to file the impact statement later this year. At Round Mountain, underground development at Phase X is progressing well with over 3,300 meters developed to date and 21 kilometers of drilling completed last year. As noted in our news release, we are continuing to see strong exploration results from Phase X, reaffirming our vision for a high productivity and low-cost underground mining operation. At Bald Mountain, we have unlocked additional value from the approximate 4 million-ounce resource base with the conversion of nearly 1 million ounces into reserves. This conversion marks an important first step in extending the mine life of Bald. We now see a strong case to proceed with initial mining at the Red Bird pit. We are proceeding with a disciplined approach, expecting that Red Bird could ultimately extend production from Bald through 2031. Will is going to discuss more on this opportunity later. We also continue to advance work on Curlew in Washington State and Lobo-Marte in Chile. Before moving to our outlook, I'd like to comment on our year-end reserve and resource pricing update. Given the stronger premium gold price environment, we have revised our gold price assumptions, which align with industry peers. Our reserves are now determined on a $1,600 per ounce gold price. Our resources are on a $2,000 per ounce gold price. Although our price assumptions have moved higher, we are not planning to reduce the cutoff grades to our mills as our focus remains on maintaining strong margins. Moving to our outlook. We are reaffirming our stable multiyear production profile. Production of 2 million ounces for 2025 remains consistent with our previous guidance. As previously guided, based on mine plan sequencing, production from Tasiast will be lower this year and Paracatu remains on track to deliver higher production this year. Looking to 2026, our production outlook of 2 million ounces remains consistent with previous guidance. And we are introducing a new year of production of 2 million ounces for 2027. Beyond 2027, we expect production to remain around 2 million ounces through the end of the decade. Maintaining production at this level will be based on future production from our pipeline of project opportunities, which include Red Bird extensions at Bald, open pit extensions at Maricunga, Phase X underground at Round, Curlew in Washington State, and Great Bear throughout the decade. We will continue to invest in these initiatives. We plan to update you on our progress as we move forward. With respect to capital allocation, in 2024, we prioritized debt repayment, and we have now fully repaid our $1 billion term loan. Our quarterly dividend remains in place as our baseline return of capital. In the current gold price environment, our business is generating significant cash flow. If this current gold price holds, we are planning to return additional capital to shareholders later this year in the form of a share buyback. Andrea will speak more on this shortly. I'd like to comment on some of our achievements in sustainability. In 2024, we once again demonstrated a strong commitment to sustainability by operating responsibly and advancing our strategy across important areas. In May, we will publish our 2024 sustainability report, which will provide a detailed overview of our sustainability performance and initiatives throughout the year. Some highlights of this past year include completing more than 15 energy efficiency projects across the portfolio, placing us on track to achieve a 30% reduction in emissions intensity by 2030. We provided food relief aid to communities in Brazil and Mauritania. We received a Sustainability Award from the Canadian Council for the Americas, and we were the top scoring gold company and top 10% overall in the Globe & Mail's Annual Corporate Governance Survey. Lastly, I'd like to take a moment to thank Catherine McLeod-Seltzer for her significant contributions to Kinross and the Board over a 20-year directorship with Kinross. Catherine has been an independent Board member since 2005 and chair of the Board since 2019. Catherine will be retiring from the Board at our AGM in May, and we are pleased to announce that Talison will take on Catherine's previous role as independent Chair. With that, I will now turn the call over to Andrea.

Thanks, Paul. This morning, I will review our financial highlights from the quarter and full year, provide an overview of our balance sheet and our capital allocation plans, and discuss our guidance outlook. As Paul noted, we delivered production in line with guidance in 2024. Full year attributable production was 2.13 million ounces with production of 501,000 ounces in the fourth quarter. Q4 sales of 518,000 ounces were slightly above production due to timing. Cost of sales of $1,096 per ounce and all-in sustaining costs of $1,510 per ounce in the fourth quarter were higher compared to the prior quarter as expected, mainly due to lower planned production from Tasiast and Paracatu. Full year cost of sales was $1,021 per ounce and full year all-in sustaining costs were $1,388 per ounce, both in line with guidance. Margins were strong at $1,567 per ounce sold in Q4 and $1,372 per ounce for the full year. Our adjusted earnings were $0.20 per share in Q4 and $0.68 per share for the full year. Adjusted operating cash flow was $640 million in Q4 and approximately $2.1 billion for the full year. Attributable CapEx was $279 million in Q4 and $1.05 billion for the full year, in line with full year guidance. Attributable free cash flow was a record $434 million in Q4 and was also a record $1.34 billion for the full year. Turning to the balance sheet, we ended the year with $612 million in cash and approximately $2.3 billion of total liquidity. We repaid an impressive $800 million against our term loan in 2024, and after making a subsequent repayment of $200 million, our $1 billion term loan has now been fully repaid. We have fully paid for the acquisition of Great Bear on just the 3rd anniversary with fewer shares outstanding than prior to the transaction. Over the last 24 months, we have reduced our net debt by approximately $1.4 billion and our net debt to EBITDA from 1.7x to 0.3x as of year-end. Our business has generated strong cash flow in the current gold price environment. And with the term loan now fully repaid, we are well positioned to consider additional return of capital to our shareholders. We are in the process of renewing our NCIB and based on recent gold prices, we expect to initiate a share buyback program later this year. As typical for us, we expect Q1 to be a cash outflow quarter in addition to the $200 million term loan repayment that we made in February. We also have our annual income tax payments in Brazil and Mauritania and our semiannual interest payments. As such, we'll provide an update on our return of capital plans with our Q1 results in May. Turning to our guidance and outlook. As Paul noted, we're forecasting production in the range of 2 million ounces for 2025 remaining consistent with previous guidance. For costs, we're guiding $1,120 per ounce for cost of sales and $1,500 per ounce for ASIC. Cost of sales and ASIC are both up approximately 10% compared with 2024. The expected increase is driven by 3 factors, which mainly include structural changes to our portfolio this year. First, production guidance of 2 million ounces relative to 2.1 million ounces last year results in a denominator impact on our fixed costs. Second, the lower planned contribution from Tasiast this year will see a smaller benefit from our lowest cost mines. Last, modest overall cost inflation of 3% to 4%. Our capital expenditure guidance of $1.15 billion for 2025 reflects annual sustaining and planned higher capital spend as we continue to advance Great Bear. Approximately $650 million of our total CapEx is expected to be nonsustaining. Looking ahead to 2026, our production guidance of 2 million ounces remains unchanged from our guidance update last year. Beyond 2026, we have introduced another year of production guidance of 2 million ounces for 2027, in line with 2025 and 2026. Due to ongoing inflation, attributable CapEx is expected to be consistent in 2026 and 2027 in order to continue to bring projects within our pipeline into production.

Thank you, Andrea. In the fourth quarter, we officially launched our Health and Safety brand called Safe Ground and commenced work on establishing Safe Ground leadership development programs that will be tailored and delivered to four specific groups: executives, managers, frontline supervisors, and operators. In 2024, our operations delivered on our full year production and cost guidance, and we are encouraged to see operational excellence continuing to drive strong results from our operations. Production of 501,000 ounces in the fourth quarter was as planned. Starting with Tasiast, the mine delivered a record throughput, production, and cash flow. Record full year production of 622,000 ounces at an impressive cost of sales of $681 per ounce drove record free cash flow from our lowest cost operation. In the fourth quarter, Tasiast delivered production of 139,000 ounces at a cost of sales of $725 per ounce. Production was lower than the prior quarter due to a planned reduction in grade. Production and costs are expected to be lower in 2025 as the mine continues transitioning into lower grades. Tasiast is expected to produce 500,000 ounces with a target cost of sales of $860 per ounce and is expected to be our lowest cost operation once again this year. Paracatu delivered another strong year with production of 529,000 ounces, exceeding the midpoint of guidance and a cost of sales of $1,039 per ounce, which was below the midpoint of guidance. As planned, mine sequencing continued to transition into higher grades in the fourth quarter. Production of 124,000 ounces was lower than the prior quarter as stronger grades were offset by lower throughput resulting from the timing of some mill maintenance and mine sequencing. Paracatu is expected to produce 585,000 ounces at a cost of sales of $1,025 per ounce in 2025. At La Coipa, fourth quarter production of approximately 59,000 ounces improved over the prior quarter on stronger mill throughput, which offset lower grades. Full year production of 246,000 ounces was in line with guidance. The site team continues to manage throughput while long-term mill optimization initiatives are being implemented. La Coipa is anticipated to produce 230,000 ounces at a cost of sales of $1,060 per ounce in 2025. Moving to our U.S. operations, production was stronger in the second half of the year as expected, following the start of production from Manh Choh early in the third quarter. Collectively, the U.S. site delivered full year production of 731,000 ounces at a cost of sales of $1,313 per ounce, which was in line with guidance. Production of 179,000 ounces in the final quarter was on plan. In Alaska, fourth quarter production of 92,000 ounces was lower compared to the prior quarter, and cost of sales of $1,320 per ounce was higher due to the timing of the processing of the Manh Choh wall. At Bald Mountain, we produced 45,000 ounces, and a cost of sales of $1,144 per ounce, while production was in line with the prior quarter, costs were slightly lower due to the timing of sales. At Round Mountain, production of 3,000 ounces was in line with the prior quarter. Cost of sales of $1,764 per ounce was higher due to the accounting of higher cost ounces from the leach pads. Mining at Phase X remains on schedule, with initial production expected to begin in the second half of the year. With that, I'll now pass the call over to William to discuss our projects.

Thanks, Claude. We've just released our annual reserve and resource update, so I'd like to start out by providing that update and then I'll discuss the growth projects that underpin our potential future production profile. We are currently in a phase where we are focused on drilling and developing our earlier stage, higher-grade growth projects like Great Bear, Phase X, Lobo-Marte, and Curlew. As a result, the majority of our additions this year came in the inferred category, where we saw a 2.7 million increase. We did also see some additions in the M&I category, which were largely offset by the conversion of 1 million ounces out of M&I into reserve at Bald Mountain. We have updated our reserve and resource gold price assumptions from 1,400 to 1,600 and from 1,700 to 2,000 respectively. The intention of this change was to be more reflective of the current gold price environment. The increase in our gold price assumptions originated from a balanced approach; our objective was not to drop cut-off grades to grow resources. Instead, we are focused on margin and quality of our resource additions to extend our mine lives and bring on higher-grade growth projects, as you can see by the overall increase in resource grade. To that end, you can see on this slide an overview of the significant resource optionality for both mine life extensions at our existing mines and new production from growth projects. With 26 million ounces in M&I and another 13 million ounces in inferred, these resources form the pipeline of potential opportunities that we are progressing to support our production profile through the end of the decade and into the 2030s. This slide gives an indication of the level of study of these opportunities. We have our base case, which includes reserves and already approved projects and provides the production in our guidance window through 2027. Second, we have several growth projects at an advanced stage of study that offer potential to add production both through the end of the decade and beyond. Third, we have several opportunities within our project pipeline that are at an earlier stage of study and offer potential to contribute to our 2030 production profile. We remain excited about our internal prospects, which are further augmented by today's strong gold price, and we will continue to maintain a disciplined approach to progressing these projects into our production profile with a focus on margin and return. Bald Mountain offers a recent example of bringing these pipeline opportunities into our production profile. In mid-2024, we received our permits for the Juniper package, and on the back of this, we have converted approximately 1 million ounces of resource to reserve in the Red Bird pit. We have split Red Bird into two phases. We have approved and already started mining Phase 1, which contains 270,000 ounces and will take production into 2028. Phase 2, containing approximately 690,000 ounces of M&I, could begin in 2026 and extend production from Bald Mountain through 2031. This phased approach lowers the initial CapEx and risk and pulls forward earlier production from Phase 1 into 2027, while we continue to optimize our desired execution plan for Phase 2. The initial CapEx of $120 million for Phase 1 is primarily pre-stripping costs, as Phase 1 leverages the existing leach pad capacity, thereby minimizing our initial capital risk. The project has an all-in sustaining cost of $1,500 per ounce and a strong return at today's gold price. We also continue to focus on additional optionality at Bald Mountain outside of Red Bird, including looking at small satellite pit opportunities that could be combined with Red Bird 2. At Tasiast, we have completed a new mine plan on the back of the 2024 reserve update. As we progress over the next three years, Tasiast's production is expected to be lower, driven by mine plan sequencing and lower mill grades as we focus on stripping and operational efficiency. It has been a focus for the Tasiast team to increase production in the '25 through '27 window through operational improvements, design optimizations, and unlocking satellite opportunities. This work has added approximately 100,000 ounces over this three-year period compared to the mine plan update we provided in 2023. Optimization at Tasiast is ongoing, with additional exploration opportunities being evaluated. Studies to explore underground potential are also progressing with recent drilling at the West Branch intersecting wide mineralization, 700 meters down from the existing resource. Moving from our operations to our growth projects. The Curlew team has been successful in adding high-quality resources over the last couple of years, further enhancing the potential of the project. As part of our year-end resource update, we are pleased to report a high-grade resource addition at Curlew, which is an addition of 125,000 ounces at 9 grams per tonne in the area, which continues to be open both along strike and at depth. Not only are we seeing strong grades in the area, but it's also coming in at a very minable width averaging just over 5 meters. This focus on high-grade extension will continue in 2025 with an expanded drill program targeting further extensions at depth. Now shifting focus to Phase X, where development and drilling continue to progress well. We have now expanded drilling into the upper zone of the exploration target, and you can see the results continue to support our thesis of a bulk underground operation in the range of 3 to 4 grams per tonne, providing potential for higher-margin supplemental production at Round Mountain. In 2025, we will be completing our initial infill drilling program at Phase X, and we anticipate the release of an initial underground resource with our year-end resource update. At Great Bear, early works construction for advanced exploration commenced in November. As can be seen on the slide, tree clearing is now complete, and first quarter excavation for the exploration infrastructure has commenced. We are excited to have broken ground and are focused on pressing civil works and permitting over the coming quarters to allow us to start the exploration decline later this year. Moving to the broader exploration update, our team had another strong campaign in 2024 with approximately 320 kilometers of drilling completed across our Brownfields and Greenfields. As detailed in our press release, this program produced notable results across several locations. We provided an update back in September, highlighting the successful addition of over 500,000 ounces of high-grade inferred resource net debt and the strong results of our PEA. We also highlighted the drilling at depth below the PEA inventory and resource that demonstrates the significant upside potential for further resource additions. Following the success of this 2024 drilling and the results of the PEA, we've shifted our focus at Great Bear to regional exploration on the 120 square kilometer land package. We've already provided updates on Curlew and Phase X, so I will move on to our other U.S. assets. At Fort Knox, the program focused on two main areas: growth around the Fort Knox pit and around the nearby Gilat. We saw some good intercepts across both areas, indicating potential for additional mill feed, and this work will be followed up on in 2025. At Bald Mountain, with near-term mine extensions established through the approval of Red Bird 1, the 2025 exploration campaign will focus on conversion of the inferred resource in Red Bird 2 and on generative projects. At Tasiast, we added 110,000 ounces to reserves in 2024 through the addition of the FENICS satellite pit. Exploration in 2025 will focus on further expanding mineralization at the underground target and drilling additional satellite pit opportunities on the wider land package. Moving to Chile, our Brownfields program further delineated porphyry mineralization. In 2025, we will follow up on these results and also address exploration of known trends on the license. In Brazil, our Brownfield program focused on testing targets along the Northwest corridor from Paracatu, with results showing similar style and grade of mineralization to the Paracatu deposit. Moving to our Greenfield program, approximately 45 kilometers of drilling was completed on targets located in Canada, the U.S., and Finland. In Manitoba, our drilling has continued to define high-grade shear-hosted vein systems. In 2025, we will focus on increasing the critical mass of mineralization to support further work. In Nevada, drilling was completed across several prospective properties with the potential for Curlew and low-sulfidation gold mineralization. This drilling included an initial diamond drill hole in the PWC JV project in September, which successfully intersected lower plate carbonates associated with the district. In Finland, we progressed both basic till drilling for target delineation and follow-up diamond drilling, which shows some high-grade intercepts at Long East. In Finland, we will follow up on these successes in 2025 and continue our exploration of this underexplored Greenstone Belt. Overall, we are in a strong position with our success identifying and progressing earlier-stage opportunities, such as Phase X, Curlew, and Great Bear. I will now turn it back to Paul for closing remarks.

Thanks, Will. After delivering on our commitments in 2024, we are well positioned for a successful 2025. Our business is in great shape both operationally and financially with a number of key milestones for the year ahead, including repayment of our term loan, restripping at Red Bird, advancing permitting across Great Bear, Curlew, La Coipa, and Lobo-Marte, advancing exploration decline infrastructure at Great Bear, restating our share buyback plan, initial production from Phase X, satellite mining at Bald Mountain, and an anticipated year-end resource at Phase X. In summary, we are excited about our future. We have a strong production profile, we are generating significant free cash flow, we have an excellent balance sheet, and we have an attractive dividend. We plan on returning additional capital, and we have an exciting pipeline of both exploration and development opportunities. We're very proud of our commitment to responsible mining that continues to make us a leader in sustainability. With that, operator, I'd like to open up the line for questions.

We will now start the question-and-answer session. Your first question comes from Mike Parkin with National Bank.

Great presentation. I really liked Slide 20 and 21 in terms of all the upside you've got that you're working on, so I'm looking forward to updates there. Just a question on Kinross's Tasiast operation in the fourth quarter. How many days was it down?

Mike, it's Claude. Yes, we did shut down for about 4 to 5 days. We did some relining and changed some wells and things, so we're right on track. From a production point of view, because we entered into the lower-grade section in anticipation of the year going forward, we still maintained our throughput average for the quarter.

Yes, that's what I was kind of getting at. Based on operating days, you were over 25,000 tonnes per day. So that's like the second consecutive quarter you're not quite 10% above nameplate, but consistently hitting above the target. What's kind of driving that? Is that just you've got some spare capacity in the front of the circuit that you're utilizing? Do you see that kind of continuing going forward? And what was the baseline assumption just for throughput quick guidance?

Mike, all of that is as planned. In order to do an average of 24,000 a day, you need to do some days at 26,000 or 27,000. So we're well within the nameplate. It's really just about our ability to use our continuous improvement initiatives and all of these things to have more and longer extended runs at a higher rate. So we had a tremendous quarter in terms of throughput. And as we move forward, I don't know the specific percentage, but we're well set up, and we've started the year very strongly as well now.

Okay. And in terms of the limiting factor there, is it more mill constrained or pit constrained in terms of getting throughput either at the mill or through the pit?

And I think the ultimate constraint is the plant because we've got some stockpiles, and as we manage through from Phase 4 at the bottom of the pit now going to Phase 5 stripping, we will balance production through stockpiles and mine performance. Ultimately, we've designed this plan to run an average of 24,000, and we have been averaging slightly above that. Other times, we may be slightly below it. We're seeing strong progress after some tough years, and we're pushing the boundaries and the limits and constantly learning more about the plant and operations.

And then switching over to the exploration side of things in the reserve resources. The underground at Round Mountain, you keep hitting these really high-grade structures. How is that being captured in the reported reserves and resources? What's your capping brand grade?

We don't have an underground reserve or resource at Phase X that Round Mountain yet. The resources on the book and reserves are all open pit. We're hoping that after the infill drilling that we're doing now—that's the reason we're doing it— we can provide an initial underground resource at the year-end this year with our annual update.

And I think I remember you guys guiding the market to kind of 3 to 4 grams historically in terms of where the underground could shape up? Is that the feeling that's maybe a bit conservative with the consistently good results you're putting in the market on that?

I don't want to get ahead of ourselves, and that is why we're doing the infill drilling. You can see on the slide we have a pretty extensive table that shows all of the drilling in that area. You can see both the wider intervals and the better intervals with the higher-grade highlights. We want to get a bigger resource, and we want to present the bulkier deposits. We still see it being in that 3 to 4-gram per tonne range, which is ultimately how we're going to maximize the economics.

And your next question comes from the line of Anita Soni with CIBC.

Congratulations to the whole team on a very successful year on many fronts. And I agree with Mike on those slides. It's good to see those slides again, especially from companies with a track record of actually acting on what they say they will do. A question on the Red Bird additions. On Phase 2, could you give us an idea of what additional impact would be needed to get that additional 700,000 ounces in?

Yes. We're still working on Phase 2. That's why we've approved Phase 1. The main benefit of Phase 1 is that the cash flow from those early ounces is intended to pay the majority of the CapEx for Phase 2 to keep that site relatively cash flow neutral as it strips Phase 2. So we don't have an exact sense of the CapEx yet; we need to complete our work to understand that.

Okay. And then just a question for the finance team and Paul. Just wondering when it comes to the share buybacks that you were talking about in the second half of the year, is it just getting through the cash outflow that you're expecting in Q1, and then if gold prices stay where they are, you can start executing on that in Q2? Or is it more a back half of the year?

No, I think that's exactly as you described it, Anita. Again, from a perspective, we have been consistent with our capital allocation philosophy. As we say all the time, the needs of the business, needs of the balance sheet, and return of capital to shareholders. We did, of course, repay the debt; that was our priority in '24. But as Andrea said, on the cash we've built up while paying down debt, we're about to pay a lot of that out as we do seasonally in Q1. We want to get through that to get our cash back up. Hopefully, we're still in the same gold price environment, and we think that is the right time to be thinking about turning back on the buyback.

Okay. Another question just on a big picture regarding Great Bear, I'm just wondering if you've seen any change in the government standpoint in terms of how motivated they are to get the permit process moving?

Yes. Look, I think it's a safe assumption that when there's an election, things slow down in terms of the bureaucrats. But I'll get Jeff to expand on it; he's on the front line of that one.

Thanks, Paul. Yes. No, Paul's right. As a practical matter, there is a little bit of a slowdown, but we've spent a lot of time both provincially and federally connecting with the regulators and building relationships there. As a result, those permits will continue to advance. We're still expecting to get the remaining permits that we require without delays.

Okay. And then roughly, I just wanted to ask on Fort Knox, Manh Choh. There's a bit of variability in the tonnage that's coming through. I understand some of it has to do with the weight restrictions and winter, and I believe ice, and the way why I could be wrong about that, but I just wanted to get an idea of what the standard tonnage that you would expect out of Manh Choh would be. Those are pretty good grades this past quarter as well. So I just want to comment on that.

Yes, Anita, you're correct. As we go through seasonal operations in the north, we end up with different load restrictions. We also have one load restriction that came after the feasibility study that we had to adjust for, and given the balance of trips on a daily basis, we expect to do an average of 200,000 to 220,000 tonnes when we do Manh Choh because as you can appreciate, we switched from very low-grade material back to the high-grade Manh Choh and then back to Fort Knox. Our average is about 220,000 tonnes, and we expect to maintain that at least throughout the quarter.

And your next question comes from the line of Josh Wolfson with RBC Capital Markets.

On the capital returns program, I understand the motivation to act conservatively, repay the debt, wait for some higher cash flow periods. Just wondering how the team is going to be evaluating the buyback in the context of share prices, which have been phenomenal year-to-date, and year-over-year. Is that going to influence the quantum of the buyback? Or is it going to be a more mechanical or formulaic process?

Yes, I'll take that. And Andrea, feel free to jump in, good question. Look, I think it's all about the right balance. I mean, number one, we still see our shares as undervalued. We'll think about that in the context of spot pricing and our valuation share price in the sense of consensus, as well as the consensus gold price. We believe we're undervalued. Having said that, it's not lost on me or us that we've had record gold prices and really good share prices. We still think this is the right time to be buying back your shares, but it requires balance and focus. That's how we're approaching it—it won't be just necessarily an automatic formula.

Got it. And then one other question on the tax guidance that was issued. Should we be assuming going forward, I guess, full tax rates at both Tasiast and the overall number seems to have gone up year-over-year, and I just want to make sure that it's a combination of capital being repaid as well as gold prices having increased?

Yes, it is both, Josh. So starting with Mauritania, we became income taxable in Mauritania in 2024. If we look at the tax cash guidance, about $200 million of it is payments that we'll actually make in Q1 that are related to 2024. So yes, that is both Mauritania coming in as well as higher gold prices impacting Brazil and Chile, where we're also paying more significant taxes. The rest of that guidance is just tax installments that we expect to pay throughout 2025.

Got it. And sorry, just to clarify for the tax issue, should we be assuming the full corporate tax rate of 25%? Or is there a lower tax year versus steady state?

No, it’s the normal tax rate.

And your next question comes from the line of Carey MacRury with Canaccord Genuity.

Just maybe back on capital allocation. I know there's more details to come there, but just in terms of the cash balance, are you guys thinking about building up a cash balance to fund Great Bear? Is there a minimum cash balance that you want to maintain? And I guess the second question is that the term loan is gone, there's no debt due until 2027. Just broadly speaking in terms of debt, are you comfortable with maintaining that leverage going forward? Or would you even consider repaying down debt in the future?

Sure. Thanks, Carey. I'll start with the debt part. We look forward to 2027 and note the next maturity, and we do plan to repay those notes. So that's kind of in the back of our mind as we think about the cash balance. If we think about what we'll allocate to share buybacks, we're balancing as we always do the needs of the business. That includes CapEx for this year, and with an eye on the balance sheet. Again, that's in the back of our mind because we want to make sure we can repay those 2027 notes, balancing that with additional return of capital. That's sort of how we're considering it. Our cash balance was a bit higher at the end of the year, but as Paul noted, a lot of that gets paid out in Q1 with the $200 million payment to finish repayments on the term loan as well as the tax payments and our interest payments in Q1. So we'd like to get back to where we started the year, and then we'll look at allocating some of the excess cash in the form of buybacks.

Okay. Great. And then maybe just a mechanical question. In terms of the quarterly sequence of production, you did 500,000 ounces in the quarter, 2 million ounces as the guidance—should we be expecting relatively consistent production through the year? Or is there a sort of seasonality that we should consider?

It's relatively even consistent as we look out to this year.

Okay. And then maybe just one last one on La Coipa. You mentioned permitting and some laybacks. Just wondering if you could give us a bit of color on what that potentially leads to?

Yes. We’ve got our current reserve life on the reserves. It takes us through 2027 in terms of the mine, and the permitting that was discussed there in the press release is really just for further extensions of the open pit there. We have additional oxide that's very similar to what we've been doing. It’s steady as she goes, but there is some permitting required as part of that to bring that in through the end of the decade.

So there's potential to take it to 2030?

Yes, those projects should be able to take us at least through 2030. We do have a meaningful inventory, as you can see on our resource statement, so we could potentially go beyond that.

Okay. Great. And maybe just one last quick one. You mentioned the Tasiast new mine plan. Should we be expecting a 43-101 report or no?

Yes, we'll most likely update that report with our annual this year.

And your next question comes from the line of Lawson Winder with Bank of America.

Thank you, operator. Good morning, guys. Nice update. Wanted to ask about your commentary on exploration at La Coipa. I just get a sense in terms of your optimism around the ability to add resources there. Is that something we could expect to see as soon as 2025?

Yes. I mean, our focus there really is we already have the resources on the books to carry us through 2030. So we're not massively focused on expanding a lot beyond that. But there is a lot of good exploration targets in that area. We have mentioned we will be conducting some tests around some of those pits looking for lower strip, higher margin kind of pushback in those targets. There's a lot of exploration potential there, but as you saw this year, our real focus is drilling off our new growth projects that are coming in at the higher grade to support pulling those into our production profile and reserves. We will have exploration at La Coipa as well.

And I'll just jump in on that. I mean part of the consideration in that part of Chile where we're operating is the availability of water. We've got existing permitted pumping water wells there. And we want to think about La Coipa's future while also considering Lobo-Marte, which we're advancing, so we're trying to find the right balance between continuing to grow resources and to bring those to market.

That's perfect to address my follow-up question. And then I'd like to also just ask again about capital return and your thoughts on the dividend level, which I think is abundantly sustainable at the current level and potentially sustainable at a higher level. Is that something you're also considering?

Yes. What I think we just want to be careful about is we want to be balanced. There was a question earlier: does it make sense at the share price? We think it does, given our relative value. As I mentioned, the needs of the business and maintaining a well-capitalized business reduces operating risk. We focused on paying down the term loan, which we just completed. We want to strengthen the balance sheet and that balance will help determine the appropriate distribution of free cash flow to allocate toward the buyback.

And there are no further questions at this time. I would like to turn it back to Paul Rollinson for closing remarks.

Thanks, operator. Thanks, everyone, for dialing in this morning. We look forward to catching up with you all in person in the coming weeks and months. Thank you.

Thank you, presenters. Ladies and gentlemen, this concludes today's conference call. Thank you all for joining. You may now disconnect.