Akobo Minerals AB (publ) ($AKOBO)

Good morning, and welcome to Akobo Minerals Fourth Quarter Presentation. I will take you through the latest developments, both from the quarter and also into 2026. So let's dive right into it, latest key information. This is for end February, a lot of it. But first of all, of course, we're delivering the strongest quarter ever. It's a considerable development for the company with strong revenue of $3.2 million and the second consecutive quarter with a positive EBITDA of USD 1.4 million. You can see from the production in Q4, we had a good increase up to 21.5 kilos produced and exceptional grades, 22.2 gram per tonne. As we will see a bit later, this is way above industry average. Looking into 2026, we have done the January, February production. We're about 15.5 kilos divided by 8 and 7.5 kilo per month. And as you can see, the grades are even better, up to 25 gram per tonne in average. So it means that we're following and delivering on what has been part of the resource estimates that we're looking at an average of 22.7 gram per tonne overall. So we're well into that model. Just an estimate for the January, February production, around $2.5 million. Of course, that's at a $5,000 per ounce price. We know there is a lot of volatility these days, both in the market in general, and that also reflects on the gold price. So we will report, of course, once we have sold it and what we get from the National Bank and also further from our export that will happen soon. We also have an additional stockpile that will be used to balance the processing, the processing plant. It's about 500 tonnes at 20 gram per tonne. That's an estimate. So there's a buffer there, about $1.6 million at the current gold price levels. We have a very strong cash and gold dore balance these days at the end of February, approximately $6 million. So that tells you that the company is now positive, cash flow positive from an EBITDA level, and we have increased our cash balance from the end of the year. On the capital structure side, we have converted all the earlier convertible bonds into equity. And what's now remaining on the debt side is the loan, the gold loan to Monetary Metals. And just to give you the final highlight, we produced around 80 kilos of gold dore so far at the end of February. And from what we can see, Q1 is also going to deliver positive operational cash flow. On the operations side, a lot is happening. Of course, the momentum will increase considerably as the vertical shaft development progresses. We will get more shifts in. We will work towards 24/7 operation, both from the mining side, also on the processing side. So a lot of increase in activity will happen during this year. But for the moment, the vertical shaft civil work has been completed. The temporary head gear and winch has been installed, and the shaft sinking activities has recommenced. So that project is moving forward. On the processing side, we're doing a lot of optimization. That's a continuous and ongoing work. The tailings storage facility, the construction of that is well underway. And the CIL, the cyanide part of the processing plant is being upgraded and being improved. And once we put that into production, it will improve our recovery in general. We also have a lot of tailings from the current gold, the 80 kilos we have produced, that will be reprocessed, and we believe there's a considerable amount of gold to be also processed and recovered from that once we take that through the CIL, the cyanide plant. On the exploration side, we're doing trenching and geological interpretation. So main thing is actually try to now develop a plan on where to drill next, where to go next. So that we -- when we do start the drilling and when we do the drilling, we have a higher confidence of hitting mineralized zones and more interesting structures. So the Gilo license that we've talked about before, it's still pending final approval. We're working on that continuously, and it will be there at some point sooner rather than later. But this is just work in progress, and there's nothing really material stopping it as such. On the community side, of course, that's something we are working on every day. Right now, we're providing water supply to our local village. That's a big milestone for us and for the village to have clean water. General road and infrastructure repair. That's something we're working on together with the local community, keeping the infrastructure in place, preparing for the rainy season so that we can all move around freely. That's important for all of us. And we're also now supporting them to provide an established a waste disposal area. That's important also for the local village, but also for us to keep the environment as clean as possible in our surroundings. So going back just to highlight a bit the uniqueness of the Segele mine. It's an extremely high-grade operation. We remain far above industry average. And of course, that will support the low unit cost and stronger margins that we're already seeing from our current production. Again, the picture here, I think, tells a lot or tells it all, this is unique, this golden wing. This is from our shaking table. And normally, you would not even see visible gold in it. And just from the table here also, you can see that we're far above the average, industry average for underground mine. These numbers, we've talked about before. It's opened at that, it's 69,000 ounces, average 22.7 gram per tonne. Right now, we're doing a steady production of 6 to 8 kilos a month. That will probably continue up until once the shaft -- the new vertical shaft is commissioned. So with current gold price, we're looking at about $1 million to $1.3 million per month in sales revenue. And the EBITDA breakeven for us right now is around 4 kilos of gold per month. That includes corporate cost and overhead. So everything above 4 kilos a month will be a positive EBITDA for us. And due to the nature of the gold that we're doing, the coarse gold that we're having, we're already getting 86% recovery from pure gravity. We expect this to increase above the 90s once the CIL is up and running by the end of the year. And we can see that we're already delivering pretty good purity by having 22 to 23 carats on the gold that we deliver and sell so far. The vertical shaft development, the most important project that we're doing, you can see from the pictures, we've come a long way from the first digging of the hole and all the way through everything being erected and the wires in place and the hoisting up and down is happening. So it's fully funded. It's development underway. We do not see any major equipment procurement risk in this project now. The most significant here is that the capacity will increase from 10 to 20 tonnes per day that we're having right now out of the current tunnels, winzes, up to 100 to 150 tonnes per day. That will, of course, have a material impact on the amount of gold we're able to produce every month. So we're looking at up to 50 kilos gold per month, and that's up from the 6 to 8 kilos we're producing right now. We don't see a material increase in operating costs. Of course, there will be some based on the fact that we'll be using more diesel to run the operations 24/7 and some -- and a bit more workforce to run shifts continuously. But compared to the increase in production and gold being produced, it's really not affecting the overall margin picture much. So you can see that we're increasing at current gold price from about $1 million a month to up to $8 million a month at full ramp-up capacity. And again, this will replace the current winzes we have. They will be still used for ventilation and escape routes, but we will not continue to run mining out of them as such. So it will lower the unit cost overall. It's much more effective to produce through this new vertical shaft. You can see here on the right-hand side, just an illustration of what we're looking at, the shaft in the middle going down, then with vertical drives going into the ore body. So we're already quite a good way down, but we have some 80 meters remaining that's being worked on as we speak. From a rough time line here, we're looking at March, April to continue the vertical shaft sinking. We do not know how the rock will look like going deeper, if it's competent or not, we have a good idea of it, but we cannot say for sure if it's competent all the way down. If it's not competent, of course, we need to do extra support and extra reinforcement. But from the overall picture that we're seeing, we should be able to continue without too much trouble going all the way to the bottom here. And by May, June, we're looking at completing the shaft sinking with the continued or in parallel installation of key underground infrastructure, that being electrical, water and air services. In July, August, looking at installation of the main head gear, the winch and the hoisting and shaft systems with pre-commissioning starting, testing. And if there are issues to be resolved, we will resolve them at that point. And then looking into August, September, we'll start commissioning of it, and we'll transition from development to the operation, and we'll commence ore hoisting as soon as we hit the ore body in the vertical -- in the drives, the lateral drives that we're seeing going into the ore body. So the latest policy approvals. So this is a very important point, at least from an international investment perspective. The first question I always get is, how can you get your money out of Ethiopia? Isn't it very difficult to operate in Ethiopia? Yes, it has been for a long, long time. It's been a country with very restricted currency -- foreign currency regulations. It's been very difficult to send money out of the country. The first thing we saw that changed this was, of course, the investment that we had from the Ethiopian Investment Holding, the Ethiopian Sovereign Fund. That was the first time, I believe, ever that an investment and money has been sent out of the country like that, the $3 million they invested into Akobo Minerals. And after that, it's really a lot has happened. This is, of course, due to the fact that Ethiopia is following a strong adherence to the IMF and the World Bank program. They are star pupil so far and really following the program, and they're seeing good results. And the key takeaways here is that we have now managed to establish an offshore account with Standard Bank, and it's approved and supported by the National Bank. It means that we can now hold the proceeds from the gold sales in an offshore account and use that to make international payments, to repay loans, to repay dividends and more. So this is an extremely important point, not only for us, but for the general mining industry in Ethiopia and the development of the mining industry. We're now working on our first gold export to Switzerland, and that's in preparation. We're working on the practical steps because this hasn't been done for a very, very long time in Ethiopia. And this is also approved and supported by the National Bank. There is now also FX convertibility in place, meaning we can use our local bid, the local currency and exchange that to dollars within our local bank in Ethiopia and use that to pay outside of Ethiopia. So these are very, very important points, not directly related to the operational side. But without this, it will be difficult also to develop the mining industry and developing Akobo Minerals further. So we're very pleased to see this happening now. The financial performance overview, you can see the development on the sales side, and on the EBITDA side, it's going in the right direction. The cost side is more or less the same as we had in Q3, a bit more increase due to, of course, project-related costs that is going into the shaft. But we're very happy with the current situation. We are cost conscious, and we're not spending money if we don't have to. We are focusing on the shaft and the processing and producing gold. That's the main thing. The equity and debt development, nothing new here. The debt side is related to our Monetary Metals loans, the gold loan that we have. And as you know, this will go up and down together with the gold price and the fluctuations in the gold price. Just to touch upon that once again, and this is just for illustration. The higher the gold price, the better it is for Akobo. Yes, the gold loan will increase in the U.S. dollar value. But if you look at the value of the deposit and the cash flow that we'll get out of it, it will increase significantly more. So this is a natural hedge, as we're saying. The gold price goes up, the cash flow from the deposit goes up, the gold loan goes up. And the other way, if it goes down, the gold price, the cash flow will go down, but so will also the value of the gold loan. So this is a natural hedge. And for us, it's been a very good structure, and it's been a solid partner to have with us from the beginning. So this is just to give you an idea and an illustration again on how this mechanism is working. On the corporate structure, top shareholders, nothing much has changed there. We see the same top shareholders. They have been supportive and they are still being supportive. They know this is a long-term investment. And they are also, as I am pleased to see the development and us moving into positive charters these days. We're listed on the Euronext Growth in Oslo. We're also trading at the Frankfurt Stock Exchange. As you can see, we still hold 9,240 ounces in the gold loan from Monetary Metals. And from time to time, I get questions on where can we trade the share. You can usually find it in the normal platform, the trading platforms like Avanza, Nordnet, Saxo and Interactive Brokers and more. So if you have any issues, of course, you can always reach out to me. So looking ahead, we're working a lot now on the first gold export. That will be a significant milestone for us and the industry in general in Ethiopia. I haven't touched that much upon exploration, where really the big upside lies in Akobo Minerals, not only within our existing license area, but also on the Gilo license area that we will get at some point. Important for us now is to hire a senior exploration manager with international experience, who is used to finding big deposits and who would like to help us discovering our 1 million ounce project that we believe is there. So this is a key hiring that we're looking at right now to refocus and make proper plans and build a team that can drive the exploration part forward. So that's a key activity for us these days. Of course, needless to say, but the completion of the vertical shaft is there, enabling higher and more stable production. So this is the main focus right now. On the financial side, I will leave that for you to look at all the details, and you can ask me any questions you would like with regards to that. And we have reached the end of the presentation. And I will see if we have some questions here.

Okay. A question about the likelihood of dividend in 2028. That's a good question, of course. A lot of investors are looking for dividend. I think it's a bit too early to say and to promise on behalf of the Board and the shareholders on what they want to do in 2028. But if there is capacity to pay dividend, I'm quite sure that will be looked into. The alternative is, of course, to reinvest into the project and create more activity. So when time comes, I'm quite sure that will be discussed properly amongst all shareholders. And if there's a possibility for a dividend, I'm quite sure that will happen. Let's see. Another question related to the Monetary Metals repayment and the structure of how that is happening. So we restructured and refinanced Monetary Metals last year. It's been refinanced into a flexible and a flexible structure that's fit for the ramp-up and the production that we're seeing. It's going to be a gradual ramp-up in repayment on a quarterly basis. And with that also a larger part of that being a bullet at the end of the loan. So that's fit for purpose and according to the production plan that we have made together. Let's see. I don't think there's anything else here today. So I assume it's all clear. I'm always available, and I'm happy to discuss and happy to answer any questions you might have. So please reach out. But for today, I think we're done. So thank you for listening in, and we'll see you next time.