Predictive Discovery Limited ($PDI)

Good morning, and welcome to the Predictive Discovery Investor Webinar and Conference Call. [Operator Instructions] I'll now hand over to Predictive Discovery Managing Director and CEO, Matthew Wilcox. Thanks, Matt.

Thanks, Nathan, and welcome, everyone. Thank you for joining us for Predictive Discovery's March 2026 Quarter Investor Update this morning. The presentation outlines our operational performance and financial results for the quarter as well as the strategic processes we've made as we continue developing a leading West African gold company, targeting 400,000 ounces of production per year by 2029. We recently achieved a major milestone of completing the merger between Predictive Discovery and Robex, which was finalized post March quarter end on April 15. I thank everyone who is involved in this process and help see it through to completion. We are all excited about what the future holds for the company and look forward to achieving our first milestones. This followed the achievement of commercial production in Kiniero in February, and we will talk more about Kiniero's operations through the quarter in the slides to come. Skipping over the disclaimers, we'll now move to Slide 4, which sums up our newly combined business. Following completion of the merger, we now have a unique platform, 2 producing mines being Kiniero in Guinea and Nampala in Mali as well as our Tier 1 Bankan development project, which is near Kiniero in Guinea. Together, these assets underpin our pathway to more than 400,000 ounces per year by 2029. We now have 9.5 million ounces in resources, including 4.5 million ounces in reserves and a management team with a strong track record of mine development in Africa. As the slide highlights, catalysts ahead include consolidating Kiniero's production, securing the Bankan and Mansounia mining permits and making the final investment decision for Bankan and obviously commencing construction post that. Slide 5 -- sorry, PDI is now USD 3.3 billion-cap company with strong institutional shareholder base, including BlackRock, VanEck, Franklin Templeton, Helikon, Vanguard, Merk and others. As of 31st of March, pro forma cash was USD 263 million and pro forma debt was USD 130 million. As you can see, there is strong coverage. This is an excellent platform for us to continue to grow the company and drive further shareholder value. Here, we show our key highlights for the quarter. This included gold production of 48,000 ounces and gold sales of 42,000 ounces. We achieved all this at an all-in sustaining cost of USD 1,192 an ounce across the group with Kiniero performing particularly well with an AISC of USD 1,043 an ounce. This generated $201 million of revenue, and we finished the quarter with a cash balance of USD 263 million, plus an additional USD 15 million in gold bullion on hand. In addition, we provided gold production guidance of 190,000 (sic) [ 198,000 ] to 220,000 ounces for 2026 calendar year with cost guidance to follow next quarter. The March quarter marked a major step change in production at Kiniero as we move through commissioning and into ramp-up. Gold production was 48,178 ounces, up 308% from December quarter, mostly thanks to Kiniero's being production. We achieved gold sales of 41,799 ounces for the quarter, which was up 271%. Revenue increased to USD 200.8 million, a 321% increase quarter-on-quarter. All-in sustaining costs or AISC decreased to USD 1,192 per ounce, down 37%. Robex ended the quarter with $240.4 million in U.S. cash and PDI with USD 22.2 million. Group production for 2026 is 198,000 to 220,000 ounces with Kiniero contributing the majority. As we stated here and in the quarterly report, we plan to provide cost guidance for the year in June quarter as we -- when we have 2 full quarters of production from Kiniero completed. As you can see from this slide, PDI is now a scaled low-cost producer with a near-term growth funded from free cash flow. Focusing more closely on Kiniero, it delivered an exceptional ramp-up during the March quarter with mining and processing performance exceeding plan. Ore mined increased to 2.14 million tonnes and total material mined to 5.1 million tonnes (sic) [ 5.11 million tonnes ]. Processed ore rose to 1.61 million tonnes, reflecting the first full quarter of production. Recovery improved to 90.1%, supporting gold recovered of 40,573,000 (sic) [ 40,573 ] ounces. AISC for the quarter was USD 1,043 per ounce, demonstrating the low-cost nature of the operation. The key takeaway here is that Kiniero exceeded plan in every major metric and is a testament to our development team and our operations commissioning teams on site. Nampala continued to deliver steady and reliable performance during the March quarter. Gold production for the period was 10,000 ounces, which represents a 9% decrease compared to the prior quarter, but is consistent with the planned mine schedule. Mining performance remained strong. Ore mined increased 27% quarter-on-quarter and total material moved increased 11%, reflecting improved access to ore zones following the completion of higher waste stripping in the previous quarter. Processing throughput averaged 291 tonnes per hour with 504,354 tonnes of ore processed. This reflects stable plant performance even though throughput was lower than the December quarter. Head grade improved 4% to 0.71 grams per tonne, which helped offset the lower throughput and supported overall gold production. AISC for the quarter was USD 1,699 per ounce, a 10% reduction from the prior quarter, driven by an improved strip ratio and disciplined cost control. I'll hand over to our CFO, Ross McLean, now for the presentation of the finance for the quarter.

Thank you, Matt. Good morning, everyone. We appreciate you joining us on the call today. Turning to the financial performance and cash flow. The strong ramp-up in production in the March quarter translated directly into a very strong financial outcome and associated cash generation. All figures in the cash flow waterfall are in U.S. million dollars. Robex started the quarter with $146 million and finished March with $240 million, reflecting a cash increase of $94 million over the quarter. When combined with PDI, this results in $263 million of pro forma cash after completion of the merger. The increase in cash was driven primarily by strong operating performance. Cash margin from operations was $139 million, underpinned by excellent production, cost outcomes and an average realized sales price of USD 4,803 (sic) [ USD 4,806 ] per ounce. After moving CapEx, this translates into free cash flow of $90 million for the quarter, demonstrating the strength of the business as a cash generator. Total capital expenditure for the period was $37 million, largely comprising growth capital at Kiniero following construction activities at year-end 2025 and into Q1. This figure will materially reduce in the next quarter, improving free cash flow performance. Other investing activities contributed $11 million, driven by the maturity of short-term investments and interest received. The key takeaway from this slide is that the Q1 financial performance establishes PDI as a scaled cash-generative gold producer. Importantly, one of the key synergies from the merger was financing, specifically the ability to leverage free cash flow from Kiniero to fund the Bankan development. The performance delivered in Q1 lays a strong foundation for PDI to deliver on this strategy. Thank you very much, and I'll hand back to Matt.

Thanks for that, Ross. We'll now move on to discuss our development project Bankan and provide a bit more detail on the company's combined assets and outlook. At Bankan, execution planning continued to progress well during the March quarter with strong collaboration between PDI and Robex teams. The focus remains firmly on the critical path of long lead items so that construction can commence as soon as the exploitation permit is awarded. Primero was awarded the front-end engineering design contract, the optimized flow sheet and process design criteria nearing completion. Process and instrumentation diagrams are advancing and layout development is progressing well. The primary and oxide crushing areas is already well defined. Long lead items have been fully identified and tendering processes are underway on major mechanical packages. The packages for the power station and SAG mills, the primary crusher -- the primary feeders, the vibrating grizzly feeders have all been issued for tender with evaluations advancing. Tender packages for structural steel and plate work fabrication are also in development. Environmental and social work streams continued to advance during the quarter, including baseline monitoring, technical studies and ongoing engagement with authorities. These ensure that Bankan remains construction ready once permit is granted. Let me just highlight key achievements from the March quarter and outline our priorities for the rest of 2026. From a safety perspective, the group delivered an excellent performance. PDI maintained a total reduced reduction -- sorry, TRIFR of 0.0 and Robex improving to TRIFR of 2.3. Safety remains our highest priority, and these results reflect strong culture and discipline across all sites. Total production for the quarter was 48,177,000 (sic) [ 48,177 ] ounces at an all-in sustaining cost of USD 1,192 per ounce. Our average realized gold price was USD 4,806 per ounce, supporting strong margins and Kiniero really started to show what it is capable of with 38,178 ounces at USD 1,043 per ounce, demonstrating the strength of the ramp-up. At Bankan, execution planning continued to advance, so the construction commenced immediately following the award of the exploitation permit. This remains a major strategic milestone for the company. Financially, the group is in a very strong position. We generated significant cash during the quarter, ending with USD 263 million of pro forma cash and USD 130 million of debt following the completion of the merger. The balance sheet strength provides the platform to advance Bankan while continuing to optimize Kiniero and Nampala. These achievements set us up well for 2026, and we focus on operational delivery, permitting progress at Bankan and disciplined capital allocation. We also show here our objectives for 2026, including our production guidance of 198,000 to 220,000 ounces of gold, including 157,000 to 174,000 ounces at Kiniero, and 41,000 to 46,000 ounces at Nampala. We hope to see the exploitation permits granted for Bankan and Mansounia as we move closer to final investment decision or FID at Bankan and get construction underway. We have strong drilling and exploration programs out in 2026, aiming to increase our reserves and resources and extend our mine life while continuing to develop a pipeline asset. Opportunities to leverage our competitive advantage as a reliable and efficient mine building team, particularly in Africa. With that being said, I'll open up the floor for questions before I move forward to closing remarks.

[Operator Instructions] Your first question comes from Richard Knights at Barrenjoey.

Just wondering if you could give an update just on your expectation timing for the Bankan license? And also just how far -- I suppose, how much money you're willing to spend prior to the receipt of that license? Just in terms of...

Yes. I mean it's a good question. I mean the answer is how long is a piece of string. We have been waiting for a significant amount of time. We have a project or 2 mining licenses that deliver about $0.5 billion a year in revenue once they're both in operation. So we see it as a highly accretive project for the government in terms of taxation, royalty and free carried interest dividends. So we have no reason to think that it's not going to be issued in the next 3 to 6 months. But again, we've been saying that for a while. So I don't want to want to temper expectations. The Guinean government is still going through a cleanup process of some of its tenements, mainly in the bauxite space, but we're expecting actually permits to be issued any day. I can't give you much more detail than that. It's somewhat out of my hands. In terms of what we're going to spend, we'll keep our expenditures rather modest. We've got a few million dollars allocated at the moment. We haven't sort of set out a program for the Board for the next quarter of spending and what we're comfortable to do, we're going to have relatively minor spending up until the process of that mining permit is granted.

Yes. So ex, sort of, long lead time items, it's pretty much minimal spending.

Well, I mean long lead items, we've essentially done the procurement and bought the vendor data, but we haven't actually locked them down or we haven't -- procurement processes take 1 to 2 months at least. So having them done sort of gets rid of a couple of months of lead time. So you're ready to actually place those POs on the exact day that you actually get the permit, I guess, the exact day that the Board makes the FID, which [indiscernible].

And just one more on Nampala. Just wanted to get a sense of how you're feeling about production sort of potentially rolling into 2027. Is there any sort of juice left to squeeze there?

Yes. Look, there's still juice left to squeeze. We've still got a mine plan for the rest of 2027. It's -- and we're still predicting sort of 40,000 to 45,000 ounces coming out of that. So it's not completely dead. There's a lot of stockpiles. There's some relatively easy ore, but it's obviously become a much more difficult jurisdiction to operate in, and there may be divestment processes run this year.

Your next question comes from Paul Howard at Canaccord Genuity.

Great quarter, as Richard alluded to there. From my mind, just on the -- going forward with Kiniero, 157,000 to 174,000 guidance, quite a bit above the 141,000 in the DFS at 1,000 ounces in 2026. What's driving that primarily? Is it throughput? Is it better grades, better recoveries, a bit of everything?

Mostly, it's throughput through the mill, where on our best days, we can -- the mill is sort of doing somewhere between 900 to 1,000 tonnes an hour, which translates -- well, even better than that, translates to somewhere between 7 million and 8 million tonnes per annum. The grades pretty much remained as per plan and as per the resource model and grade control models. And we've just yes, it's just been a very efficient ops team, I guess. We've had lower energy uses, lower reagent usages than planned and yes, just absolutely pumping tonnes through the mill.

Yes, following from that, I suppose, is it particularly softer material like the all-in sustaining was very low as well. And is that sort of something we can expect for the next couple of years?

Yes, you can definitely expect it for the next couple of years. We don't have any real fresh joining the plan for the next 3 years. But I mean oxide, and this has been -- bear in mind my whole career, it's always given a higher Bond work index than is sort of required during physical testing, mostly because it's difficult to recover an oxide core and that they generally choose the most competent piece of that core for the compression testing, which derives that Bond work index. So it's always given a higher power rating than what's required through the mill. So when you actually do start grinding it, you find that it requires almost very little power to actually pass through your circuit. So it is the oxide holiday I've spoken about previously. So it really does help you a lot. And you've got to -- we've designed our circuit knowing that, that was likely to happen. So we're getting the recoveries to match.

Excellent. Just a couple for Ross, if you don't mind. Ross, is all-in sustaining costs calculated on gold sales or produced or recovered even?

It's based on gold produced, Paul.

Produced. Yes. Okay. Cool. And then on that $37 million CapEx, can you perhaps help me with a bit more of a breakdown? I know you say a lot more -- a lot of it's at Kiniero, but like is there any spend at Bankan there? Is there anything that -- obviously, there must be something at Nampala in a sustaining sense. Maybe break down by the 3 assets first and then a bit more detail on what's been spent at Kiniero, if that's possible.

Yes, sure. So there was $32 million of development CapEx at Kiniero and...

That's essentially a hangover from production.

Yes. And then we had -- so maybe -- and then sustaining capital, we had $2.2 million at Kiniero. And then at Nampala, we had about $0.5 million of sustaining CapEx. And then the remainder was sort of CapEx -- sort of growth CapEx at Kiniero.

Your next question comes from Mike Millikan at Euroz Hartleys.

A very good quarter. Just a very quick one for me. Given the recent news in Mali, any impacts at Nampala or everything is just business as usual?

Yes. I mean surprisingly, there was very little impact. I mean besides the sort of 24 hours itself where the -- it was very quiet on site. The local village and surrounding communities were quiet. Yes, we had a few flights canceled, but everything seems to be landing and working again now. So it's surprising that, that kind of thing has become business as usual in Mali, but it really just -- it went on business as usual.

Well, good to hear. And just a very quick one for me. Last one is just exploration spend. What should we expect? And what should the split be between, say, Kiniero and Bankan, for example?

Well, we've got $13 million left for exploration spend at Kiniero. For Nampala, I don't have that number on the top of my head. I think it's about $6 million for the year, but I can't really pitch that to anyone. It should be in one of our slide deck.

Yes, I'll check all that noise.

I'll get back to you on -- but there is an exploration spend to extend the mine life at Nampala just sort of stepwise, but I can't remember the exact number.

Yes. Matt, it's $6.6 million for the year.

And any update on the Argo license and a few other licenses within country as well in Guinea?

Look, there's no updates on them. It's -- Yes, we -- like if there was any updates, I'd be announcing, [ Paul ]. We're not really chasing a lot of a third Guinea asset anyway. So yes, obviously, we'd like to get Argo back. But the other permits fall away, we're not overly upset.

There are no further questions at this time. So I'll now hand back to Matt for closing remarks.

Thanks, Nathan. So wrapping up, I think our March quarter demonstrates the strength of the platform we are building, having brought these 2 companies together. We're delivering a step change in production, strong cash flow generation and safe, disciplined operations, both Kiniero and Nampala. PDI is now a scaled low-cost African gold producer with near-term growth funded from free cash flow. Bankan continues to advance towards construction readiness, positioning the company for its next phase of growth once the exploitation permit is awarded. Across the portfolio, the strategy is clear. Stabilize and optimize our producing assets, advance Bankan as a Tier 1 development project and continue to unlock value through targeted exploration at both Kiniero and Bankan. Thanks very much for joining us.