Montage Gold

Us. We just got told that we need to finish on time in 20 minutes. Montage will not have that issue. We’ll finish on time, on budget for this one as well. So it’s a pleasure to be here. It’s the third time we present since we’ve joined Montage, and our story’s been rapidly evolving. The reason we joined Montage in the first place was to be able to go from development to production in record time, and I feel that we’ve been able to advance very quickly given the opportunity we had in front of us with Montage. But when I look at West Africa in general, we’ve seen this time and time again, companies able to go from discovery to production in less than ten years.

So our portfolio has rapidly evolved since the last two and a half years. We started with Koné. Koné’s got even better given the high-grade discoveries made, and of course, we’ve de-risked it with the first gold pour that happened over the weekend. In the meantime, we got the DDV project. DDV will be our next development asset. This came through the African Gold transaction. We’re working on further drilling this asset with the view of publishing maiden resource, increased resources later this year, and wanna fast-track that one into development as well.

What’s great is that in the first step, we grew the portfolio through partnerships, so smaller companies wanted to partner with us. That led to the African Gold transaction. But governments are also taking note of the fact that we’re able to explore, build, fund, and of course, we’re very serious. So that led us to being able to get more permits in Côte d’Ivoire with the Ouandé permit. That’s not so greenfield, as it already has 70,000 meters of drilling on it, and permits in Mauritania, where we’ll start drilling later this quarter.

So looking at each of the assets, Koné first. What you see here on these stats are already outdated. That was the stats that were in the feasibility study that was published prior to our arrival. So about 300,000 meters of drilling went into that. Since then, we’ve drilled 350,000 meters. So we expect to publish a new mine plan in Q1 next year. But in terms of highlights, we’ve already grown the resource from 5 million ounces and plus i plus i to over 8 million ounces. More importantly, all those ounces are at a higher grade, at least 85% higher grade on average. So that allows us to swap out lower grade with higher grade material and boost production more.

So quick video. So you see the plant here. That stretches about 1.7 kilometers long by 1.2 kilometers wide. All the infrastructure’s of course been built. You see the oxide sizer. So to get into production early, what we did was add an oxide circuit that allows us to not need to stockpile the oxides and feed them straight into the plant, as you see here. We’re still on track to complete the full circuit with the HPGR in Q2 next year. That’s one of the largest ball mills in the world right now. Classification areas. So you see that the rock is quite soft. It’s free dig for the time being. TSF is a line TSF, so all the infrastructure was finished earlier this year.

So I’m getting to my favorite part, where we just poured gold earlier this weekend. So we’re connected to the grid. Power has been great so far. So you see the nice layout we have here between the primary, secondary crusher. In this first gold pour, we poured 42 kilos of gold, two big gold bars. We’ve been ramping up very quickly in the last week since we started to feed ore into the plant. So a few more pictures there.

I’d like to just pause and take a moment to thank, first off, our team for the tremendous efforts over the last two and a half years to not only help us fund, engineer, and obviously get this off the ground, but for the enthusiasm that they’ve had throughout. As soon as we poured the first bar, most of the reaction was, “This is great. When can we do it again?” And started talking about the DDV project. It’s a good opportunity to thank, of course, the shareholders for the strong support. We were very lucky to have the Lundin family as strategic shareholders with a 20% stake. I see some of our finance here, such as Wheaton Precious Metals in the room. So all of that has allowed us to develop the project in record time.

What’s great is that we’ve made the project even better. So that’s twofold, one, by getting better grades into the mine plan and second, the strategic operational improvements that we’ve made. So we’ve talked about the high-grade deposits, but we’ve also done 56,000 meters of infill drilling, advanced grade control last year in the two deposits that were in the study, and that showed an uplift in grade. We’ve improved the plant where we could prior to launching it, so we’d expect to run above nameplate capacity quite quickly. And of course, we’re seeing it already with the ramp-up that we’ve had, the enhancements that were done before. We’ve also went owner mining. This allows us to have the operational flexibility to shift our mine plan very quickly without needing to negotiate with a mining contractor to bring into the mine plan the new high-grade deposits that we found.

So talking about the high-grade deposits, because there’s three mineralized trends that converge at Koné, we have over 50 targets that were identified on the property. We drilled half of them. They all came back with good intercepts. So to be able to prioritize our efforts, we drilled the resources to have a maiden starter resource on each of them to be able to assess grade. We stepped out a little bit to be able to assess size, and then that’s how we built our priorities. So we went from two deposits on the property to now twelve. As I mentioned, eight from five to 8 million ounces and climbing. So it’s not impossible now to see where 10 million ounce potential can come from. We’re now finishing off a 130,000 meter drill program for the year and expect to publish resource updates later into the year into next year, which will lead to a new mine plan.

Looking at the mine plan, the last one was only two deposits, Koné and Gabongo. We now have the ability to put these higher grade deposits into the mine plan starting day one. So we expect to boost production to 350,000 to 400,000 ounces over ten years by being able to integrate these higher grade deposits.

Looking ahead, we have the Didivi project. So in March of last year, we did a strategic partnership with African Gold, where we took a 20% stake, but we also negotiated operatorship. This allowed us to staff the project with our own team. So between March and June, the resource had doubled to a million ounces at two and a half grams. Since then, we’ve drilled over 80,000 ounces. Over a hundred will be drilled by the end of the year, which will lead to a further resource update. So you see on this page here, all the red dots are the new drill holes that have been done. They’re all outside the current resource envelope. You see the high grade results, 15 meters at 20 grams, 27 and 8, et cetera. So we have high confidence that this will continue to increase in scale.

We’re trying to fast-track this obviously as quick as possible. We’ve launched the environmental study as soon as we launched the acquisition in December of this year. So we’re working on everything already to DFS standards, whether it’s metallurgy, geotech, mine planning, et cetera. So our goal is to get the team from Koné straight into Didivi and then maybe into the next one. So we might not need to look too far for the next one, when they already have 70,000 meters of drilling on it, and it had 60,000 meters historically. We just finished a 10,000 meter drill program to validate the historical drill results. And again, the results are quite great. 8 meters at 8 grams, 13 at 4, et cetera. So given what we’ve drilled so far and then what was there historically, we have high confidence in our ability to be able to deliver the maiden resource next year.

So by the time standing here next year, it’d be great to say Koné, of course, is in production, has been ramped up well, is doing great. Didivi, we have sights on when we can launch construction and, ahead of that, right after that, we have sight on what could be the next asset with Wende. So the first step was partnering with other companies, and the second step, you have governments that obviously have taken notice. So they see, as I mentioned, that we’re serious, we’re exploring, and we’re having success. And that’s led us to take over 2,700 kilometers of prospective grounds in Mauritania, a country where historically the wider group had a presence there. So we’re gonna be starting to drill in the fourth quarter with our first program of 15,000 meters.

So in terms of upcoming catalysts for the group, now that we’ve poured gold, all eyes on when will commercial production be declared. I think it’s gonna be quite quickly given how the plant has already performed. Remaining on Koné, we expect resource updates later this year and into next year in a new mine plan into Q1 with the full completion of the hard circuit in Q2. In terms of the grade profile, we’ve started with Koné oxides. We’re gonna move into Gabongo oxides, which will lift grade and show an increasing production profile. At Didivi, all eyes on the next resource update and timeline of how we can get that into construction as quick as possible. And then Wende, we expect to have more resource updates, our first resource update into beginning of next year.

So when I reflect on Montage, I think the share price has obviously increased and re-rated based on what we’ve done so far, but there’s still a lot left to unlock. When I look at free cash flow yields, we’re trading now as one of the cheaper gold producers, which I expect to re-rate as we start to show that the cash flow is there. But it also means that the market is not yet valuing the growth potential we have at Koné and of course, Didivi, Wende, et cetera. So I think the option value of Montage and in the team you have at Montage is the ability to say, “Okay, we started with Koné. We’ve been able to add assets to it in a manner that’s non-dilutive.” It’s been two and a half years on the job, and our goal is to be able to keep our construction team and exploration team busy for the next decade.

So with that, I’d like to open the floor to questions. We have a few minutes for questions. If anyone would like to raise their hand, and please wait for the mic. Yes. At the front here.

Can you give us more color on what fast track means on that higher grade mineralization?

Yeah. So we’re currently working on updating the resource by year-end. We’ve been working on studies in parallel, with a view to be able to fast-track permitting into next year and move our team from one build into the other.

Martino, can you talk a little bit about your experience in country when it comes to this owner-operator transition? How do you de-risk the operator productivity challenge?

Well, you see the results already, right? The plant is running well and mining is running well. We have a team that’s done this four times over now. But because we were self-perform on the build, and we’re owner mining, we’ve been able to train our employees and move them across to the mining side. The ore body itself is 300 meter widths that starts on surface, without much selective mining. So it’s been a smooth transition from construction to operations. That being said, we’re still finishing the build on the hard circuit. So lots of people on site, but everybody pushing in the same direction.

Okay. Great. And maybe one more from me. Can you talk a little bit about the stream mechanics, the buyback and the strategic options that you have and when that buyback could come?

Yes. It’s been quite a win-win relationship with Wheaton’s. Because we were just starting off on the asset, we wanted to retain a significant portion of the exploration upside. So the stream is on the two deposits that were in the initial study, Koningabogo plus 500 meters. We owe Wheaton for 20% of production for the first 400,000 ounces, and it steps down to about 11% for the next 130,000 ounces, and there’s a tail on the two deposits that were in the study. But we’re all incentivized to make the asset better because if we’re able to find higher grade deposits, that increases production upfront. We benefit because we have more cash flows, but it also means that Wheaton get more ounces quicker, and therefore it boosts their IRR.

And maybe last one from me, Martino, if I can. Just on the capital commitments, the $607 million, can you talk about when we see the remainder fixed price, what FX exposure and how financially can you be locked into those numbers?

Most of the CapEx has already been incurred. We’re over 90% now committed. So there’s not much [chuckles] risk on CapEx overruns now that we’re obviously in production. So there’s about a $100 million gap between having finished the oxide circuit and finishing the rest of the build.

Great. Please join me in thanking Martino for his presentation. Well done. [audience applauding]

Great. Thank you so much for everyone’s support.