IAUX - AMEX

Hello, and thank you for joining us for i-80 Gold Corp. Q1 2025 Financial and Operating Results Conference Call. At this time, all lines are in listen-only mode. Following the presentation, we will conduct a question-and-answer session. [Operator Instructions] This call is being recorded on Monday, May 5, 2025. Before we begin, please note that some of today's comments may contain forward-looking statements, which involve risks and uncertainties. Actual results could differ materially. So, I ask everyone to view Slide 2 of the presentation, which is available on i-80 Gold's website to view the cautionary notes regarding forward-looking statements made on this call and the risk factors related to these statements. So, today in the room, we have Richard Young, President and Chief Executive Officer of i-80 Gold; Mr. Ryan Snow, Chief Financial Officer; Paul Chawrun, Chief Operating Officer; and Matt Gili, former President and COO. So, following today's formal presentation, we will open up the call to your questions. So, I would now like to turn the conference over to Mr. Richard. Please go ahead.

Thank you, Rachel, and good morning to everyone. Beginning with Slide 3. Last fall, we announced a new development plan to create a Nevada-based, mid-tier gold producer alongside a timeline to file technical studies in the first quarter in support of the new growth strategy. In February and early March of this year, we filed five press releases summarizing the operating and financial results of these studies. Following these announcements, we hosted an Investor Day on March 6, which provided further details on the five gold projects, the path forward and the opportunities for expansion. A replay is available on our website. The supporting technical reports under both Canadian and US reporting requirements were then filed and made available on our website at the end of March. In summary, these technical studies, one, highlight the solid operating and financial potential of our asset base, and two, outline a clear, staged, credible development path towards producing 0.5 million ounces of gold by the early 2030s. Filing the tech reports was the first step in the recapitalization plan. We are now actively engaged with a variety of counterparties regarding a senior debt facility, non-core asset sale as well as royalty sales to provide most of the capital required to execute on our new development plan. While we finished the quarter with $13 million in the bank, we have since been able to complete a working capital facility with Auramet, a trusted partner, that increases our pro forma cash balance to approximately $25 million, putting us on better footing as we execute on our recapitalization plan. While our share price has performed in line with the gold price, we're not yet trading on the new development plan. And while we continue to manage a period of balance sheet constraints, which is reflected in our share price, the underlying value and long-term potential of our portfolio has never been more evident. To escape this, we need to execute on at least one of the capital sources in our recapitalization plan. The goal is to begin to put cash on the balance sheet over the next three to six months. While the balance sheet is a work in progress, our project portfolio is largely low-risk brownfield projects with infrastructure in place. With the technical and permitting work planned this year, we remain on plan to execute on our development plan. We'd also like to welcome Paul Chawrun as i-80's new Chief Operating Officer. His strong technical background and experience in operating and developing mines from permitting, feasibility and construction through to production will be a key asset. At the same time, we extend our sincere gratitude to Matt Gili for his leadership and significant contribution to the company. His impact has been instrumental in positioning i-80 Gold for its future success as a mid-tier gold producer. We're confident in the plan we put forward and equally confident that the work we're doing today will serve as a catalyst to unlock the meaningful shareholder value. Moving to Slide 4. Recapitalization to align our financial capacity with the scale of opportunity in front of us remains a top priority. We remain in active discussions, as I mentioned a minute ago, with several parties to put capital on the balance sheet through a number of financing options while thoughtfully balancing near-term needs and long-term value creation. The feasibility work for three of our five gold projects as well as the class 3 engineering study on the autoclave refurbishment are commencing, and we expect to have those completed by Q4 into Q1 of next year, further derisking these projects and supporting our conversations with the senior lenders. We're considering a royalty sale on Mineral Point, and that is -- process is well underway. We're also considering the sale of a non-core FAD property. To maximize proceeds for the sale of that, we may choose to complete additional drilling and update the tech report, which could then push that sale into early '26. We're also considering a possible royalty on our autoclave, but that process can't begin until the feasibility study work that I just mentioned is complete. So that would likely be a first quarter 2026 activity. And lastly, we have finalized the $12 million working capital facility with Auramet, that's a prepay for our sulfide material. With that, I'll now pass the call over to Ryan for our financial and operating update. Ryan?

Thank you, Richard, and good morning, everyone. Turning to Slide 5. At Granite Creek Underground, we mined approximately 16,000 tons of oxide mineralized material at a grade of 11.9 grams per ton and approximately 15,000 tons of sulfide material at a grade of 8.3 grams per ton, plus an additional 22,800 tons of low-grade oxide material with a grade of 2.8 grams per ton of gold, which is all incremental as we don't design stopes for this material. The pace of underground development improved at Granite Creek in the quarter. Mining rates were higher year-over-year, and the main decline advancement is on plan. Water levels are dropping throughout the mining area and water ingress rates are anticipated to continue to decrease in the near term, following increased pump availability and system capacity. The predictive groundwater model completed in the first quarter has helped the team proactively assess and plan future dewatering needs. We have plans to further upgrade dewatering infrastructure in the remainder of the year to support sustained development. As of quarter-end, 3,100 ounces of gold were sold and approximately 26,600 tons of sulfide mineralized material were stockpiled for processing at our third-party process facility in 2025. With the third-party processing agreement in place, we anticipate catching up to steady state as we run through the stockpile inventory through the next couple of quarters. At Lone Tree and Ruby Hill, we continue to recover gold from existing heap leach pads using previously placed material, with approximately 1,200 ounces recovered and sold in the first quarter. Company-wide, we expect to extract between 30,000 and 40,000 ounces of gold in 2025 with 20,000 to 30,000 gold ounces from Granite Creek Underground and approximately 10,000 ounces from the Ruby Hill and Lone Tree heap leach operations. Turning to Slide 6 for a construction update at Archimedes Underground, the next project we plan to bring into production. Construction activities commenced in the fourth quarter and continued through the first quarter of 2025 for the surface infrastructure at the Archimedes portals. We expect to begin underground construction in the third quarter of this year. It is expected to be the company's second underground mine contributing to production at the end of 2026 or early 2027. Moving to Slide 7. Permitting continues across our properties. At Archimedes Underground, we received the decision record from the US Bureau of Land Management to commence underground portal work in March. The state permits are in process and are expected by the end of the second quarter. At Cove, the permitting process remains on track with necessary approvals anticipated by the end of 2027. We continue planning the start of the environmental impact statement process in the second half of 2025, which is required given the project size and potential impact on environmental surroundings. And lastly, we are commencing the permitting process for both Granite Creek open pit and Mineral Point open pit. A further priority for our technical group through the course of 2025 is to bring Granite Creek Underground and open pit as well as Cove to the feasibility stage and to publish a class 3 engineering study for the Loan Tree Autoclave refurbishment. The feasibility study is expected to be completed in the fourth quarter. Hatch Engineering, a recognized leader in autoclave systems, was on our site last week to initiate final engineering studies. Feasibility studies are required by lenders to support senior debt. Looking at Slide 8. The 2025 drill program is modest and strategically focused for maximum impact. At Granite Creek Underground, we expect to complete the underground exploration drift by the end of the second quarter, allowing the infill drilling program to wrap up before year-end. This work supports advancing the Granite Creek Underground project to feasibility and evaluating the potential step-out of the South Pacific zone to the Northeast. At Cove, we completed approximately 15,000 feet of core drilling during the first quarter, bringing total drilling over the course of the infill campaign to approximately 145,000 feet. Results from the 2023 through 2025 program will feed into the upcoming feasibility study update. Finally, at Ruby Hill, we are completing some infill drilling within the upper zone of the Archimedes Underground in preparation for mining. The infill drilling at Mineral Point is expected to commence in the third quarter to support geotechnical, metallurgical and hydrogeology studies for baseline data to initiate permitting and the next stage of technical reports. Now, moving on to a financial review, starting with Slide 9. Gold sales totaled approximately 5,000 ounces for the quarter, representing a modest increase over the prior-year period. Sales were lower than total ounces mined as a portion of the material was stockpiled for third-party processing as the agreement was finalized towards the end of the period. Total revenue from gold sales increased to approximately $14 million for the quarter, driven by higher ounces at Granite Creek and a higher average realized gold price of $2,825 per ounce. The quarter concluded in a net loss position, primarily due to non-cash losses from revaluing the gold prepay and silver purchase agreements. This was driven by increases in the forward gold curve price. Moving to Slide 10. During the quarter, we undertook several financing initiatives to enhance near-term liquidity and balance sheet flexibility as we continue to focus on the best way to secure capital to advance our development plans. On March 31, we entered into a new gold and silver purchase agreement with National Bank of Canada, under which National Bank purchased approximately 6,800 ounces of gold and 345,000 ounces of silver from the company for delivery by September 30, 2025 or earlier upon an infusion of capital. The proceeds were used to satisfy all outstanding gold and silver delivery obligations due to Orion on March 31. As Richard discussed, we also finalized a $12 million working capital facility with Auramet. Over the short term, we continue deferring non-essential costs. Our cash position was approximately $13.5 million at the end of the first quarter, in line with expectations, excluding the expected proceeds from the Auramet facility, which recently closed in the second quarter. On a pro forma basis, the quarter-end cash balance would have totaled $25 million with the inclusion of the facility. We believe the National Bank and Auramet arrangements underscore the confidence of our lending partners have in the quality of our assets and the path we've outlined for growth. Our growth expenditures over the next three years will focus on the following three key areas to support our broader development strategy: first, advancing permitting activities; second, investing in feasibility studies to move projects forward with a clearer understanding of their economic and technical potential; and third, continuing development work at Archimedes Underground. We continue to expect total growth expenditures in support of these three initiatives to range between $40 million and $50 million in 2025. With that, I will now turn the call back over to Richard.

Ryan, thank you very much. And at this point, Rachel, we'll now open up the call for questions.

Thank you, Richard. So, ladies and gentlemen, we will now begin the question-and-answer session. [Operator Instructions] Your first question comes from Don DeMarco from National Bank Financial. Please go ahead.

Thank you, operator, and good morning, Richard and team. My first question, looking at -- it's encouraging to see the outlook for production at Granite Creek over the rest of the year. Some of the dewatering seems to be moving along in the right direction. And the ore sales are expected to go higher. It sounds like there's also some opportunity with the residual leaching. How should we think about these potential gains in production in terms of increases in revenue over the rest of the year? Because the spot gold price is moving higher, maybe we don't have total clarity on cost. But maybe if you just think about revenue, what are you expecting in terms of revenue gains over the rest of the year on these potential increases in production? Thank you.

Don, thank you for that question. So, just -- and it was -- Matt Gili took a lead in negotiating that toll milling agreement. But under that toll milling agreement, the between date of shipment and receipt of proceeds is about 120 days. And that's the reason for the Auramet working capital facility. However, the toll miller has begun toll milling material. So, we may start to catch up through the course of the year in terms of that lag. But we are currently running our forecast for the year assuming a full 120-day delay. And so, with that, we'll use the Auramet facility. So, from a cash basis, it's as if we ran it through our own mill, but from a production sales basis, there still will be a lag through the balance of the year, Don, unfortunately. Whether it will be 120 days, 60 days, 90 days, we just don't know yet.

Okay. Great. Richard, I also see that on your financials, there was a somewhat modest proceeds from an ATM draw, maybe $2.5 million. Is it fair to say that, that was prior to your press release regarding the ATM and the ATM has not been renewed since?

Yes. So, the proceeds that we recorded in the first quarter were through the 8th of February. We did not reenact that ATM through the balance of the quarter. And with the filing of our year-end financial statements and a transition to US GAAP, that ATM has fallen away. And there are no plans to reactivate the ATM.

Okay. Well, thank you for that. That's all for me. And so, good luck with Q2 and your next recapitalization steps.

Don, thank you.

Thank you. [Operator Instructions] Your next question comes from Mr. Omeet Singh from SCP Resource Finance. Please go ahead.

Hi. Thanks, team, for presenting to us about your Q1. I'm curious, and this question is directed to Paul here. Paul, you've obviously just come on the team, and congrats on that. And I'm curious to hear a bit about if you've had a chance to review the operations and get a sense of the economic studies that have been released. What are your overall thoughts on that versus what was, say, presented in the Capital Markets Day?

Yeah. Well, I'm on day three here. So, I don't really have a whole lot on the details, but what I will say is I've had a chance to review the technical reports. And I'm here in Reno with the team. I can say it's an excellent set of assets, and we have a very clear plan to go towards creating value. And I'm really excited about doing this. I've had experience doing this in the past, as you likely are aware, and that's what this looks like. So, I'm really excited, but I can't really speak to the details because I'm just now with the team here in Reno, and I'm about to go on a tour of all the sites. So, ask me in about a month.

Will do. Appreciate it, Paul. Thanks.

Thank you. [Operator Instructions]

Rachel, are there any other questions coming?

Hi. I think there are no further questions at this time. So, I will now turn the call over to Mr. Richard. Please continue. Thank you.

Thank you, Rachel. We hope you share our confidence in what lies ahead for i-80 Gold. With the technical groundwork now in place and a clear development path forward, our goal is to become a mid-tier gold producer. Based on the recently published technical reports that demonstrate combined net present value of all five projects is $1.6 billion at a gold price of $2,175 per ounce and $4.5 billion based on $2,900 per ounce gold. We also believe these studies represent base-case scenarios and will continue to improve with the work the team will complete in between now and the anticipated release of the feasibility studies. We appreciate the continued support of our investors as we advance our strategy and work to position i-80 Gold for the long term. And a special thank to Matt Gili for putting this development plan together for us and the great job that he's done and the success that he's put forward and the team that he built that Paul will now get to inherit. And so, we look forward to speaking to all of you in the future. And please have a good day. Thank you.