Amaroq Ltd. ($AMRQF)

Okay. Thanks very much, and welcome, everyone, to the full year 2025 results webcast. Thanks for joining us. We're going to do a slightly different format usual business conference call line. So all questions will be written in via webcast service. So please if you have any questions at those in, and we'll deal with those at the end of the call. We'll follow the normal form today Eldur Olafsson Chief Executive, will take you through the summary for the year and some strategic areas. Ellert Arnarson will take you through some of the financials. I'm not going to show up and host the Q&A at the end. So thanks very much for joining. Welcome. Eldur, I'll hand over to you.

Thank you. Good morning, everybody. Good be with you here today. I'm going to turn your attention to the first slide. I'm going to start this meeting here just to kind of set the scene where Amaroq is at the moment. Now we have an operating mine where we've guided 25,000 to 35,000 ounces for 2026 or full year -- first full year of production for o Amaroq Mine. We have the West Greenland Hub, which is our next development project, which we are focused on putting together a feasibility study and some reserve development this year to start the development of that mine in '27 and '28. And then we have a Nalunaq project, which we are actively pursuing to bring into resources. Now in GardaQ, we are drilling 2 early-stage projects for very import project, both in rare element and iron ore. And then the 2 enablers to allow us to do all of this is Solid being service venture that we set up, and we just announced this morning about cooperation with IPO and other prenote funds on that. This will help our working capital. It will help other mining companies interest of the company agreeing on working capital. And then IMEQ, we have finalized our feasibility study to start producing free energy at a site, which will decrease our uses of diesel by 1.6 million liters, which will lower our operating costs and give more stability. Now at a glance, you can see we are 1 of the largest license holder, very prospective licenses. We have developed a mine now in Greenland. We are operating a mine. We are actively pursuing exploration. We have a large resource scale both in Black Angel and in Nalunaq. And effectively, we have multiple company makers within a number of asset ends and we intend to use the experience from the great team that we've built up today to develop these other opportunities as fast as possible. Now taking you over to the next slide. So this is how we do it. This is effectively -- you can look at this as our 5- to 7-year plan within Amaroq. Now -- what you see here on the right is the Nalunaq Phase 1 operating, which is now in formal production, where we are producing through gravity recovery, making a dore bar on site every month now, generating good cash flow. Phase 2, we will have -- which is the flotation recovery. That means that we are taking moving recovery of the gold from its tonne from 65% all way above 90% recovery. Phase 2 is progressing on plan and on schedule. We will have that operating by June. And Phase 3 is what we are analyzing now is to grow the potential production in Nalunaq 300 tons per day to 450 tons a day. So that is still being assessed but we've designed that. So this is where the production is going, where the free cash flow is providing the group. Now Black Angel has a previous feasibility study that we are updating. It was on mine. We know the operating procedure. We're doing the same thing again, similar kind of scale in terms of investment and in terms of timing from a very high-yielding asset. And then we're moving up the -- which we call the elephant in the Nalunaq, Kangerluarsuk, Elara core by drilling them and defining them. So we can see that there's a huge value potential that we are building up within Amaroq. Now if we turn to focus on the next slide. So year-to-date, the production was above 6,000 ounces last year. And we've got our initial revenues. We went through various different aspects of selling and moving the gold out, selling it. We've got an average gold price of about $6,000 -- $3,000 and $600 per ounce. We transitioned our mining operation from an owner operating from kind of a contract to an over operating operation. This means that on site, our biggest cost on site is effectively people. We now control all of our mining equipment, our own people. This has given us more efficiency and more control and lower cost in the end. And this has been very, very successful process so far. We acquired the West Greenland hub in May last year. This sets us up. So as you can see, now we're operating and generating for Nalunaq. We have a full development team that is now moving towards the best in help to bring that mine into production. And while we've been doing that, we've been had a very successful exploration program in other assets and mainly that was what we drilled about 5,000 meters last year. And I just want to put this into perspective to the market that none of was -- we drilled about 27 holes, more than 63% of the wholesale we drilled were hit gold mineralization. To put this into perspective, in Nalunaq, 1 out of 8 holes gave us grade in this instant, we were getting more than 53% of the hole. We're getting big intersection, all the way from 1.5 meters up to 9 meters with really, really high grade. So our intention this year is that we are starting the interest drilling of this idea, focusing on creating a main resource and then multiplying the scale of drilling to declare hopefully, what we think could be a resource and a scalable kind of potential world-class resources. So last year, we obviously finished getting to a 300 ton per day. We finalized our Phase 1 activities in terms of construction. So the last quarter last year was very construction heavy which was a great result because it gave us the opportunity to produce really well during this first quarter and finalized Phase 2 during this quarter and next quarter. I'm going to turn now over to Ellert to walk you a little bit through our finances before we go again on giving you a bit of an outlook for this year.

Thanks, Eldur. In Q4, we had sales of 1,949 ounces for gross proceeds of CAD 10.7 million. And the average prices we were able to sell it was USD 3,920. In comparison, gross revenue in Q3 was slightly higher at $12.8 million, and it was lower in Q4 due to the shutdown for commissioning activities that took place in the quarter. And as Eldur mentioned, for the year as a whole, we recorded revenues of $27 million from the sale of 5,310 ounces. Exploration and devaluation expenses were $4.6 million in the quarter. Most of it was incurred at the Nalunaq campaign where we drilled roughly 5,000 meters this year with good results, as mentioned. And after incorporating other income and expenses, the company recorded a net loss of $3.2 million for the period. And moving on, please. On the balance sheet side, cash balance at year-end sits at $21.5 million, compared to $55 at the end of September, and this is mainly driven by continued CapEx, which was quite heavy in the quarter at Nana, mainly processing plant construction as well as stocking up of spares and consumables in relation to finalizing commissioning of Phase 1 and also driven by investments in the new mining fleet alongside taking over mining operations in Q4. We continue to see an increase in methods inventory, which stands at $15.8 million at quarter end compared to $11 million at the end of Q3. This represents our gold content in ore stockpiles, gold in circuit in the processing plant and as well as gold bearing tailings, which we will be bringing back to the processing plant once Phase 2 is operational in Q2. So that puts us at total current assets of $67 million at year-end. On the noncurrent assets, the main movement here, consistent with prior periods is a increase $30 increase in capital assets to $252.7 million at year-end, again, driven by the Nalunaq project and the 300 ton per day processing plant. On the liability side, accounts payable stay roughly the same between quarters at around $20 million. The main change here between current and noncurrent liabilities is the amendment to our RCF facilities we announced in Q4, where we extended the facilities to February 2028. So that takes them from current liabilities to noncurrent liabilities. So total liabilities at $74.4 million at year-end, which results in an equity ratio of 79%. And on the bottom there, you will see cash balance at Gardaz, our joint venture at $2.6 million with not very much activity in Q4. So moving on to cash flow. So we recorded a net loss of $18.6 million for the year after adjusting for noncash items, cash flow used in operating activities, negative $30 million roughly. And cash flow used for investing activities at $84 million roughly, which represents the CapEx at our Nalunaq project predominantly. And against that, we had positive cash flow from financing activities of $90 million, which is mostly due to an equity raise that was closed in June of last year of roughly and a drawdown on our facilities of about $10 million. So all in all, this results in a reduction of cash flow of $23 million throughout the year, $23.6 million, and our cash balance was sitting at $21.5 million at year-end. And in excess of that, we had undrawn credit facilities of $8.9 million at year-end. The table on the bottom is where we show the main cash flow movements in relation to the Nalunaq project in and of itself. Now that, that is closing completion -- closing to completion. We had a total of about [ 25 ] roughly outflow of cash additions to capital assets. And then we had, as previously stated, we were stocking up on supplies and consumables in relation to the commissioning of Phase and increasing our metals inventory as well. I think that's it on this one. Back to you, Eldur.

Thank you. Now kind of turning our attention to 2026 and walking you through a little bit what a really, really exciting year we have ahead of us. If we look at our guidance for 2026, so this will be our first full year of operating the Nalunaq and our guidance is 25,000 to 35,000 ounces. Now using the current gold prices today, we are looking at a cash flow of anywhere between USD 112 million to USD 116 million within this year. If we then look at the cost for the overall year, that's it, if you take into account all in sustaining costs from Nalunaq, investments in Nalunaq as well as the base case of aspiration outside of Nalunaq of a total of $100 million. So the free cash flow generation will be always targeting on these kind of gold prices to be very, very good. Now to give us ample liquidity throughout the year and to even faster some of our programs because we have the potential to grow our exploration budget and develop faster this year. This means that we're effectively doing more this year. We have announced this morning that we have increased the loan facility we have by another $35 million, taking it from $35 million to $70 million doubling it and lowering the interest rate at the same time. And so this shows really a development of where we are going from more of a development or exploration company to a more of a cash flow generating business, which is great. See -- to help further on enabling our strategy of developing faster, creating value quicker, we have now come to -- and understanding with 1 of our largest investor, EIFO to support us in the venture of setting up Sul, which is the service inventory we have in Greenland. Now to give you an idea why this is important not only for our company, but for all mining and an interest of company in Greenland, working capital in Greenland is of importance, we need to buy equipment, drill rigs, made home equipment and mining equipment upfront, and that obviously finds a lot of capital. So having a servicing venturing agreement will help us and a lot of other opportunities in Greenland, and it will be a very good business because this is a very growing market. So we're extremely pleased with that. Not only position but pool for years to come. And this will allow a lot more equipment availability in a country like Greenland as well as consumer good others. So we're extremely pleased with that. And underpinning all of that, we have announced to the market in this quarter that we are going on the main market in London this year. We appointed city group to assist us in that progress. And all we can say right now is that the work is progressing really well, and we are getting a lot of very good feedback from the market there. We have subsequently delisted from the Toronto Stock Exchange and the focus here is a little bit of plumbing of the business, so to say, in a way that we want more and more liquidity to remain within fewer markets to help with indexing and various other liquidity for the company as. Overall, our -- we couldn't be more excited about going forward. We have extremely strong team, both on the ground in operation, development operation. We're standardizing everything within the business. And and this will be a transformational year for the business as we see it. Over to Ed.

Thanks, Ellert. I just thought we might dive a little bit into that exploration program. It is the busiest we've done to date. And it's across the whole portfolio. And it's 1 the first time we've been to linearity in our expression campaign. Clearly, first thing on the Nalunaq begin with, we're going to continue underground exploration. We're looking -- if you take our current MRE, we're at 485,000 ounces which gives us around a 10-year mine life. The idea is we're going to replace resources each year through underwriter exploration to try and tap into some of that over 2 million-ounce exploration target that we've got. So that will be the strategy going forward in a pond we'll continue to talk about it in that way and give detail on the results of that this year, but we're extremely excited about the opportunity there. Nanoq, which Eldur has talked about briefly there is an incredibly exciting opportunity for us. Given the results we got from last year, we're going to continue drilling this year on that. We've already winterized the rigs. They're outside already. There's infrastructure there in place. So as soon as the exploration season starts, we'll be there drilling looking to target a mineral resource estimate, as highlighted earlier. So again, look after that this year, that would be -- that's a very exciting next gold project for us. And then around that, you've got the satellite go. We'll continue to define targets there. We will continue to do some physical work on those as we look to derisk that whole gold note go up that we talked about down in the south there. Outside of that, we've got our critical minerals asset base. Black Angel, we talked about, clearly, after the acquisition last year and the completion of it, there's been a lot of work on the technical data. James and Will and the team, his generical team have been doing quite a lot of work in the data set that they've now received post completion, and they're quite excited about that. And clearly, since the successful assay on the stockpiles, it's also a really interesting internal discussions going on around the commercialization of the germanium guarding that we have there which is quite a topic at the moment generally in the world. Outside of that, within our GANA JV, the midterm IOCG and iron ore prospect in the far North. We had some really interesting and successful surface work done on that. We indicated, it's a very high-grade magnetite iron ore. This year, it's going to be all about doing some scarring on that to see the depth and volume metrics or that. And this asset is right in the fall quite Canada actually in an area that we -- it seems to be an object that is very flat. So we're looking at all the logistics of that at the moment as well. Down in the south, again, we've got the rare element expression campaign. Again, scarring on that closed some really interesting surface what we did last year. And this is a pegmatite rare, so sort of conventional rare. And again, it's going to be working out the volumes that through Scoring, which will give us the opportunity then to introduce some resource thereafter. Stendalen, we saw that's still very much in the portfolio still, if you're looking to target a high-grade copper nickel there. We'll be doing some further geocell work on that. So we just wanted to lay out some of the exploration catalysts this year, which we're very excited about. The last slide is a sort of nice to have read. This is just 1 photo showing you the work to date on Phase II progress within Nalunaq. Clearly, you can see a lot of the civil works that are already completed and a lot of the equipment is now being installed in that, as you can see, to really just to highlight that things are on track, very much on schedule. And a lot of work has gone on there at the moment, which is great to see. And certainly, having gone through the winter season so far to date, we're really pleased with the progress there. So I think we'll wrap up there. What we're going to do is we'll take some questions from the line. I'll just give a couple of seconds for people if they want to just take a minute to type on those questions there, and I'll crack and I'll start at any time.

So first question, could you please discuss the time line to profitability and any potential significant investments from government agencies?

Yes. So I mean profitability is something we see within this year from a absolute free cash flow, and we are in a positive EBITDA already this year. So that is very good. And as we mentioned earlier, in relation to -- I mean I reiterate here, in the current gold prices, the range from 25,000 ounces to 35,000 ounces it ranges from $112 million to up to $160 million in cash flow. Now that is on a $4,500 coal price. All of the capital investment within the group, both in terms of all-in cost of, Nalunaq further investments in Nalunaq as well as all exploration expenditure within all of the group. We're still well above the free cash flow there for this year. And in addition to that, we have the new loan facility to give us even more vigor if we intend to do more this year. So that puts us in a very good position. Now on what we said on that situation being the mark European Union and/or U.S. Agency. We maintain a good dialogue with all of these different agencies defines. We have been in dialogue with all of these agencies now for 4 or 5 years, and we will continue to do so going forward.

Thanks, Ellert. Next one. Does the potential RCF upside and equity projection to see that? I mean you can now spend more than the minimum on exploration in 2026.

Yes, it does. However, we also need to take into account operational efficiencies, meaning we need to make sure we have the people in the rigs and all of that estimate now. The good thing with our programs is that most of the programs start around mid-summer, June, July when a lot of our cost this year, as we said in our release, in the first half of the year, we're looking at 7,000 to 10,000 ounces and in the second half of the year, we are looking to produce more because then we're getting the flotation. Now that helps us assessing how much we want to spend and how much we want to do, but we need to make sure we can secure the rigs and secure all of that people to be able to do the work. So that is also an element there that we need to look into.

Yes. A question around Julia. Do you already have potential clients or customers contacting us for these services or do you -- and do you currently have leases out of the equipment to other companies?

Currently, we don't have leases out to other companies, but we have encountered it by various different parties. I mean the whole idea behind Suliaq being Suliaq is servicing Amaroq. It can be servicing various different project within Amaroq who we either own 100% or partly. And the idea here is that we need to have agreement. So meaning we will offer the same terms to any 1 operating Greenland. So it's a cost-plus model. And therefore, we've already had 3 inbounds to us and more actually. And the 33 company in mining agreement. But mining is 1 thing. There's also a lot of infrastructure that is hyproprojects. There are governmental services, this defense project. So there's a lot of interest here to say something of. And I do want to emphasize the fact that this company comes as a servicing opportunity a site with all of the great Greenland servicing company who lack often the equipment but have the people. So there is a win-win scenario here for all parties involved.

Thanks, Eldur. Can you -- Ellert probably 1 for you. Can you just confirm the 2026 cash flow numbers, whether in Canadian dollars or U.S. dollars?

I think that's in relation to Eldur's comments earlier, and that would have been in the U.S. in line with the guidance that we gave out.

When do you expect to move to the main market, when will that be completed? And what are the costs involved? Do you want me to take that.

Yes. So we are -- as always suggested, we're right in the midst of that process at the moment. We're looking to do that expect to see there's a CPR being drop in the background as well. So the 2 windows normally the end of June window and then the autumn window where -- we're working towards the first window if we can. But if we're not, then it will be in September. But currently, our expectations were trying to do it by the end of June. And one of the reasons we're coming to the main market is because dropping a listing in Canada, et cetera, is to drop costs. So whilst not only give the exact cost of the process, the point of it is to crop cost in. So thanks to that.

it be possible for Eldur to comment on data points coming in from were possible obviously comment on the dose point you look at that are coming in from none, which gives me comfort on the 2026 gold target.

Yes. No, I can certainly. I think the data points you want to be looking for there is the following. I mean, we are estimating full production this year, meaning in terms of tonnage. So we are estimating about 75% of tonnage of the total production. Just to give us to become on the cautious side. Now what then controls the -- what the ounces will come out is the great and it's the recovery. And I can say without going into details here because we will ask it in the Q1 is that both the grade and the recovery are very good in this first quarter. We are seeing them. And so we are confident on that. And furthermore, from the drilling underground drilling and the resource drilling we are doing and resource conversion drilling, we're also seeing the grid as well as what we call a coal factor. That means what the mining model is telling us and what then actually comes out the grade. These are all positive indicators so far. And therefore, yes, these are already positive for us. And therefore, we are very confident for this guidance.

A question just on diesel and energy costs. Obviously, lower impact from leading less diesel, which is great. But can you talk a bit about the sensitivity forecast for the diesel price?

Yes, certainly. I mean our -- to give you a little bit of kind of ideal cost base, I mean, about 50%, 60% of our cost base is actually people or something related to people. then we have travel and we have consumer book and on. So actually, the energy cost in Nalunaq for the year, we're estimating about $8 million, which is only about 8% of our total cost in that all in sustaining cost number. So we don't see a massive impact there. What is also important, we purchased all of our diesel or energy up until mid-summer. So we are quite well protected from there. There is another angle year as well, Greenland due to the fact that they are very much dependent on diesel for the heating of the accounts and operator. They purchased much of their diesel and they fix their prices usually for 2 years in a time that can be negative because sometimes the prices are higher than the market, but you can also post that because then you're operating on a diesel price that it doesn't have the impact of something that is happening in the Middle East at the moment. But very much is -- and because it's not a big item in our cost category effectively, we have diesel now up until midyear. And thirdly, the agreement of the government or Polaroid has purchased a fair bit of diesel for the next 2 years for the country.

Thanks, Ellert. Maybe 1 for you. Are we looking at putting a hedging with gold prices high at the moment?

So we haven't hedged gold prices at all up to this point. And we are looking into whether we can opportunistically hedge a part of our cost -- capitalized costs this year. Other than that, will continue -- we'll be optunistic. We're not too precious with kind of 100% non-hedging at all, but we haven't done so far. If you were to do it this year, it would be to cover the rest of the CapEx.

Yes. As an example, when we presold 1,500 ounces couple of weeks ago on a $500 per ounce. So there are opportunities like that. I don't want to say we are very good at predicting the prices, yes, but it's -- there are opportunities to cover your contest for sure.

Working capital outflows. The working capital outflows were consistent through 2025. How do you see them going this year?

Yes. So it will be different this year. So for the first 6 months, we'll continue CapEx and construction of the processing plant facilities but that should recede quite quickly post Q2 and the nonsustaining CapEx that we've guided on will be front heavy, but then once the flotation recoveries kick in and the CapEx receipts for the second half of the year working capital will become quite benign. And we should see that reflected in the cash balance in -- especially in H2.

I think the next 1 is around CapEx and capital spend. So can you confirm the 2026 capital spend? Was it USD 100 million? And let assume the minimum exploration?

Yes. Ballpark number, yes. On the 2026 capital spend on bonding to 450 tonnes per day, we will do some assessment on that, but just to give you a little bit on the assessment there and idea of the increasing to 450. When we designed the plant in Nalunaq, the only thing we need to expand within a second well, the rest of the plant is designed for 450. So we are doing the assessment now on the lead time of the mill and the construction. So -- and we will be updating this quarter or the following quarter with that plan. Now that needs to be followed with more mining, of course. And so having 450 some today doesn't only potentially give us more cash flow. It also gives us also the opportunity to have lower grade for the plan, if that would be the case in future years. because the operating cost as being the same if you're doing 450 days -- ton a day versus 300 per day. So that gives you an idea why we're looking at that.

Thanks, Ellert. This is a question in regards sort of reconciliations of grades. Can you give us any indication on how the grade in Nalunaq is now when you experience the processing compared to the drilling results.

Yes. So while we're seeing the call for on the mine plan towards what we're mining is positive. So we are having higher grades. That is not only to look for it at the raining high grades, where we also have to -- what we also have to kind of look into is what is the dilution, how well are we mined that has also been going real really well. So those are the 2 elements. But positive and positive on both how we're mining it and also the grade so far.

Maybe 1 for you. Could you give us more insight on the gross profit margin? And how you see that going forward with increased scale? Do you have a target margin in mind the long term.

Yes. So we don't have a target margin in the long term. But I would say that the point to the ASIC really that we've guided on in Q4 being in the range of USD 1,250 to USD 1,450 per ounce. And then depending on the gold price, you can calculate kind of net margins from those numbers.

Question on likely impact obviously very present at the moment, what's the impact from the current Iran situation on costs and will our ATIC be impacted by it.

We don't see that as changing anything for now. Obviously, we are impacted by kind of general inflationary effects. But again, as I alluded to earlier, fuel costs are quite a low percentage of our overall costs so that we don't see a large effect at this moment, no. So we're not yet. So we're reiterating our guidance today. Yes. And clearly, as I highlighted the slight hedge we have on diesel cost and things that. And just maybe just as a comment, I mean it's a very reasonable question to ask in a mining operation where you have low grade a lot of power to power big mills and so on, right? So the impact of higher oil prices that does happen, whereas in an operation like we have, that is high grade, high yield, the impact of power and so on, it's much, much, much lower, right?

Last question. And so if anyone has any other questions, please add them in now, but this is the last question for the moment. Can you please elaborate on the support that the executive management received from the Board in relation to any negotiations it has to have with government agencies in Denmark, Greenland in the U.S. Do you feel that the existing board is providing all the support and contract base that it has?

Yes. Christian Board is doing that. And the Board has kept the brush to any discussion or potential opportunities within discussion with these agencies and government.

Thanks, Eldur. So there are no further questions currently.. But please, if you have any, please send them through to me at West, my e-mails and details on the bottom releases, et cetera and we'll get to those if you need them. Thanks very much for joining. We will be coming back for another 1 of these at the time of the Q1 results in May. So we look forward to speaking to you all there. Thanks very much.