G Mining Ventures Corp. (GMIN) Earnings Call Transcript & Summary

Good morning and welcome to G-Mining Ventures. second quarter 2026 results conference call. participants are in listen-only mode. Following prepared remarks, we will open the line for questions. Please note that today's call is being recorded. I will I will now turn the call over to Jean-Francois Lemaude, Vice President, Investor Relations.

Thank you, Operator, and good morning to everyone joining G-Mining's 2026 Second Quarter Operational and Financial Results Conference Call. In addition to myself, we have on the line Louis-Pierre Gignac, Chief Executive Officer, and Julie Lafleur, Chief Financial Officer and VP Finance. I would like to remind everyone that after management's remarks, the call will be followed by a Q&A session. As we will be making forward-looking statements during this call, please refer to the cautionary notes and risk disclosure in our MD&A and on slide two of the webcast presentation. Also, please bear in mind that all dollar amounts mentioned during the call are in U.S. dollars unless otherwise noted. Now, we'll turn the call over to Louis Cargignac to provide an overview of the quarter.

Good morning and thank you, JS, and thank you everyone for joining us today. I want to start by recognizing the dedication of our teams across all our sites, whose commitment to safety, operational excellence, and responsible mining continues to drive our success. Q2 2026 was a strong quarter for Gmin, operationally, financially and strategically. Tocantinsino delivered a solid quarter and construction of OcoWest is advancing in line with plans. Strategically, Jimin closed the transformational acquisition of G2 during the quarter, consolidating Jimin's Oko West and G2's adjacent Okogane project into a single large-scale and long-life Tier 1 gold mining complex. Importantly, TZ continued to deliver in the quarter, producing 36,845 ounces, 16% increase over Q1, 2026 with 37,439 ounces sold. The improvement was driven by a higher grade mining sequence and stable mill performance. as we advance towards accessing the higher grade phase two mineralization. Free cash flow grew more than 50% to $85 million quarter over quarter, generating approximately $2,300 of free cash flow per ounce of gold produced. Throughout the year, we'll remain focused on protecting margins and maximizing the free cash flow generated from every ounce we produce. Second quarter gold production exceeded plan, supported by higher grades and strong metallurgical recoveries. TZ maintained plant performance during the quarter, processing just over a million tons of ore at an average throughput rate of 11,120 tons per day. The average process grade was 1.23 grams per ton golds with an average recovery of 91.9%. Mining activity also remains strong with a record 6.3 million tons of ore and waste extracted from the open pit during the quarter, representing a 15% increase from Q1 2026. The corporation maintains its 2026 production guidance of 160 to 190,000 ounces with approximately 61% of output expected in the second half of 2026 as higher grade materials accessed in accordance with the mine plan. Safety performance remained strong at TZ and across all projects during the quarter as G-min recorded zero lost time injuries. We continue to deliver strong margins during the quarter, supported by a record average realized gold price of 4,197 per ounce and all in sustaining costs of 1,690 per ounce sold. Q2 2026 cash costs of 1,046 per ounce sold were 1% higher than Q1 2026, while all in sustaining costs increased 6% to 1,690 per ounce sold. largely reflecting the impact of stronger Brazilian real relative to the US dollar. As a result, we have revised our full year 2026 cash cost and all unsustainable cost guidance to $836 to $965 and $1,330 to $1,544 per ounce sold respectively. compared with previous guidance of 736 to 865 and 1,230 to 1,444 per ounce sold. The revisions primarily reflect the impact of the stronger Brazilian real on our cost base. I will now invite Julie to take you through the financial results, cash flow, and balance sheet.

Thank you, Louis-Pierre, and good morning, everyone. During Q2, GMIN delivered excellent financial results, reflecting the quality of our asset portfolio, solid operational execution, and continued leverage to the gold price. Second quarter revenue rose 21% year-over-year to $157 million, driven by 37,439 ounces sold at an average realized goal price of $4,197 per ounce. for the six months and that June 30, 2026, GMIN also reported higher revenue growth, returning 31% increase year over year, reporting 297 million in revenue for the period. Net income reported for the quarter grew by 48% to $72 million, or $0.30 per basic share, compared to net income of $48.6 million, or $0.21 per share, for the same period last year. On an adjusted basis, net income was $79 million in the second quarter, or $0.33 per share, versus an adjusted net income of $36.5 million, or $0.16 per share, reported for the second quarter of 2025. adjusted net income excludes a $1.4 million unrealized for an exchange loss, a $4.9 million loss on the change in fair value of financial instrument, a $0.4 million deferred income tax expense, and a $0.5 million present value adjustment on VAT received Second quarter EBITDA was $106.9 million and adjusted EBITDA was $113.7 million, both matrix performing better than the same period last year. TZ continues to generate strong free cash flow, demonstrating its strong margin profile as we advance OCO-West and our fully funded exploration programs across the portfolio. Cash generated by operating activities was $104 million in the quarter, with free cash flow of $85 million after accounting for sustaining capital and other adjustments. During the quarter, cash used in investing activities was $153 million, primarily reflecting local West construction spend. Cash and cash equivalents decreased from $287 million at March 31, 2026, to $226 million at June 30, 2026, reflecting continued heavy investment at Oklahoma West during a peak construction period. We moved from net cash of $248 million at the end of Q1 to net cash of $193 million at quarter end, a strong balance sheet position as we fund OCO West through the remaining construction period. including the on-drawn $350 million revolving credit facility, Available liquidity was approximately 576 million. Capital expenditures was approximately $158 million in the second quarter of 2026, comprising of $10.6 million of sustaining capital, $8.3 million of capitalized waste stripping, million of capitalized exploration expenditures and 131.3 million related to development activities at OCO. For the first six months of 2026, capital expenditures totaled $266.2 million, comprising of $12.9 million of sustaining capital, $18.9 million of capitalized waste stripping, $0.8 million of sustaining exploration, 13.9 million of capitalized exploration expenditures, and 219.8 million related to development activities at OCO. OCO West Capital guidance remains unchanged with 514 million to 568 million expected in 2026. 217 million to 240 million expected in 2027. At OCO, cumulative spend-to-date reached approximately $423 million, or about 44% of the approved initial capital budget, leaving $550 million remaining to be spent through completion. Total commitments reach approximately 628 million or 65% of the approved budget. This continues to be a meaningful de-risking point with nearly two-thirds of the initial capital budget now in committed scope. For the six months ended June 30, 2026, GMIN achieved approximately 39 percent of full-year gold production guidance, which was in line with mine plans. Our 2026 production guidance remains unchanged at 160,000 to 190,000 ounces of gold. Total cash cost guidance and ASIC has been revised upwards, as previously noted, to 836 to 965 per ounce sold, and 1,330 to 1,544 per ounce sold, respectively. For 2027, production guidance remains unchanged at 200,000 to 235,000 ounces of gold, with total cash costs expected to decline to 633 to 743 per ounce sold and ASIC expected to decline to 633. to 977 to 1,146 per ounce sold. The 2027 profile reflects a full year of higher grade phase two contribution, lower sustaining capital compared with 2026 and continued operating maturity at TZ. This concludes my remarks. I will now turn the call back to Louis-Pierre to discuss OCO-West and Guru-P.

Thank you, Julie. OCO continues to advance on schedule and on budget during the quarter. At the end of Q2, overall project progress reached 28% on an earned value basis. Detail engineering continues to advance on schedule and remains on track for completion in Q3 2026, while procurement is approximately 99% complete. On-site, construction is advancing on schedule across the key work areas, including the process plant, power plant, tailing storage, and site infrastructures. The power plant remains on track to be operational by the end of July, 2027, and the grinding mills by August, 2027, with major component deliveries continuing on schedule. Key achievements during the quarter included continued concrete pours across the power plant, sag and well mill foundations, primary crusher, CIL, CIP, tanks, and pre-leach thickener. Other key infrastructure work streams also advanced, including the permanent camp, which now has more than 1400 beds, with the welcome center, kitchen, and dining hall all operational. The work first also continued to grow during the quarter. My personnel now totals 1,779, with Guyanese nationals representing 77% of the workforce. cumulative hours worked exceeding 2.3 million hours to date. I would like to take a moment to share some visuals of our progress on the ground as of June 30th, 2026. Our power plant continues to advance well with more than 1,350 cubic meters of concrete poured to date and structural steel framing for the engine hall now complete. All six generators have been delivered and are being stored at our barge landing facility. The sag mill foundation is complete with anchor bolts and embedded plates in place while the first concrete pour for the ball mill foundation is planned for August. The primary crusher has also advanced significantly with the mat foundation concrete pour complete and rebar and concrete work for the first level scheduled to begin in August. Progress on the pre-leash thickener also continues with construction of exterior rings 2 and 3 now more than halfway complete. The current OKO West project remains on schedule with first goal targeted for the second half of 2027 with commercial production expected in January 2028. An updated feasibility study integrating OkoWESPs and Okogani is targeted for mid-2027. In support of the study, we plan to complete definition drilling at Okogami and advance technical studies to optimize mine sequencing and throughput for the expanded project. The integrated development plan is expected to support an expanded production profile in 2029. I will close with a recap of our priorities for the remainder of 2026 and into 2027. At TZ, our priority for the second half of the year is to execute on the planned production profile while driving lower unit costs. Key areas of focus include advancing access to phase two, improving mining productivity, building drilled and blasted inventory, optimizing throughput and recoveries, and executing sustaining capital programs. At OcoWest, execution remains focused on key project milestones, including mill deliveries, power infrastructure, camp expansion, process plant construction, and advancement of the tailing storage facility. At GRUPI, the key deliverables are the updated mineral resource estimate, the preliminary economic assessment, and the ESIA filing, all of which is targeted for year-end. With the G2 transaction now complete, we can focus our attention on advancing the technical work required to validate the combined district plan to establish a Tier 1 production profile. We are entering this next phase with a stronger balance sheet, a producing mine generating steady cash flow, and a Tier 1 asset advancing through construction and strengthening our district position in Guyana and Garupi moving toward key catalysts. the assets, liquidity, and team required to execute this next phase of growth.

With that, I would like to turn the call back to the operator for questions. Thank you. We will now begin the question and answer session. To ask a question, press star 1 on your telephone keypad. To withdraw, press star 1. We ask that you limit yourself to one question and one follow-up. We will pause momentarily to assemble the queue. Thank you. Thank you. Your first question is from Ralph Profetti with Staple. Please go ahead.

Okay, thanks, operator. Good morning, everyone. Thanks for taking my questions. with Pieter, is there going to be any operational impact that comes from this implementation roadmap on some of the tailings governance works that was delivered at TZ in June of 2026, or perhaps impact to growth capex or sustaining capex? I'm just trying to get a sense of whether or not these assessments are within sort of manageable expectations. And you're referring to TZ, right?.

Yes, sir. Yes. No, I mean, right now, as part of our sustaining cap X for this year, we're doing a tailings raise to the flotation tailings facility that that we have. But that's all been permitted and it's going according to plan. in terms of costs. And yes, we're even permitted beyond the raise that we're doing right now to basically another subsequent lift. So there's no real permitting challenges or, you know, issues in front of us. Okay.

Great, great to hear. And then moving to Oko, seeing as we're 90% on detailed engineering and essentially there on procurement, I'm wondering if you're taking advantage of ordering some of the long lead for the potential expansion case and whether or not it's possible that we can see some of that spending timeline that's going to come on for that production actually amalgamated into some of the spending that gets committed in, say, 2027.

Yes, that's a good question. Obviously we're looking at the long lead items that we would need for the expansion as we speak. And actually we expect to place orders before the end of the year for some of those long lead items and that's in particular another ball mill and some additional gen sets that would be required to power, you know, an increased site. So that, you know, will be small money really this year, which is be like milestone driven payments for the down payments on those equipment this year.

Okay. Thanks for that. I appreciate being proactive. Thank you.

Yes. Your next question comes from the line of Andrew.

Mickey chip with BMO capital market. Yes. Thanks for taking my question. Just a follow-up on on OCO. I appreciate you guys giving us guidance that you'll have the combined mine plan happening. But you know, as you've indicated, you're thinking about ordering long lead equipment. Are you in a position where there could be short term changes to the model mine plan, you know, or even the sequence of mining or stripping or stockpiling, you.

you know well ahead of that Actually there likely could be in the sense that We've received other authorization from the government to start some initial mining in Ghani. So that's going to allow us to do some optimization to the mine plan and Yes, make a few changes, but basically we still need to go through a permitting process with the government to basically make an amendment to the permit that we have. But yes, we, we have been granted already some flexibility that will allow us to to make some optimizations there.

Okay, and maybe just a quick follow-up on the OCO. monthly photos and on your PowerPoint updates, what are the big kind of key deliverables in terms of activity on site or stuff being pulled up out of the ground, equipment arriving on site that we should be watching or that your managers are watching in the construction process.

process so we can follow along. Yes, so basically you've seen some of the monthly photos and a lot of concrete's been poured for the process plant. So now they're going to be starting erection of tanks, tankage as part of this leach and CIP circuit. So that's going to be one thing that'll show a lot of progress. Obviously, the primary crusher, we're pouring foundation, you know, concrete work for the caisson. And then obviously one priority for the team is the assay lab. So we want to get that built so that we can do our grade control on site and have quick turnarounds. So that's a key priority for the construction team. But yes, other than that, we expect to be continually receiving equipment related now to the process plan. And as we speak, our mills are on the water being shipped to Guyana. So that's one milestone that was very important to achieve and that's been achieved now.

I'll hand the microphone over. Thank you. Thanks, Anne. Your next question comes from Anita Soni with CIBC. Thank you.

Good morning LP and team. I just wanted to ask about the cost guidance for next year. So you raised this year's cost guidance but there was no impact to next year. Is there a reason for that?.

Yes, I'd say we, you know, part of the increase that we made here is related to FX and gold price. So I think we'll just wait to see further how those metrics change for us by the end of the year. So, yes, essentially a hundred dollars of that increase is more than half is related to FX and royalty costs with a higher goal price assumption. So we'll just take a pause and wait to see how that could potentially impact 27.

Okay, so it's just typical to budget assumption changes then? Yes. Okay. Okay, all right, thank you. That's it for my question. Thanks.