Everyone, welcome to the Q1 2025 results for Amaroq Minerals. I am Edward Westropp, I'm the Head of BD and Corporate Affairs here. We'll follow the usual form where Eldur Olafsson, our CEO, will take us through the highlights, hand over to Ellert for some financial highlights, and then Eldur will take us through some of the operational detail before finishing off with the outlook. James Gilbertson, unfortunately, isn't joining us today because he's actually in Greenland flying up to site at the moment, so we'll miss him today, but he'll be with us later. Q&A-wise, we'll do the Q&A at the end of the call. If you have any questions, use the Q&A function at the top of your screen, and we'll take those in order at the end once Eldur's finished the presentation. Thanks very much for joining. Eldur, I'll hand over to you. Please begin.
Thank you, Ed. Good morning, everybody, and welcome to the call. I want to start this meeting by reminding us on the Amaroq Minerals strategy or the business unit. We have four units, which are Nalunaq, which is our gold business. This is not only a mine that we are now largely built and are in construction and commissioning of. It's also an exploration unit where we're building up a district-scale gold path. This also serves as a unit to demonstrate to the business world and strategic powers of the world that mining can be done in Greenland. How you employ, how you operate with governments, how you do your environmental impact assessment, social impact assessment, all of these fine details are all done within this business unit. Secondly, we have Gardaq, which is a joint venture. This is a joint venture to explore for strategic minerals.
As you might be well aware of, Greenland is one of the oldest rocks in the world. It has a huge scale, and therefore it is the last frontier in the Western world on land. However, exploring for these things takes time, and we are very fortunate to have a joint venture, long-term joint venture partner in JCAM and Moore Capital, who has now been with us for two seasons, exploring for copper, nickel, and rare earth. Here, Amaroq, both as a team and as a licensed holder, delivers its strengths, and then we get financial investors alongside with us to support us in finding world-class deposits. This work has gone tremendously well. In Greenland, it is a country that is starting its development and mining. Therefore, services are something we've had to build up on our own. These are not only equipment, these are also skill sets.
Skill sets in, for example, understanding how you import explosives into a country, how you manage it, various different things. You can look at Amaroq also as an infrastructure company because we know how to tunnel, we know how to build harbors, roads, hydropower, anything you can think of. That is something we know how to do. Within the service unit, we can then develop more projects, drilling, exploration, etc., etc. We can also joint venture and partner with more projects throughout the country. Last bit, which is energy. In mining and in exploration, in all of these realms, you need energy to power your mines, but also to process. This we know really well in the Nordic countries.
Therefore, Amaroq is developing alongside its mine hydroelectric energy potential, where we can use the current infrastructure, so think of it as harbor, roads, environmental bond, and permit to invest in hydroelectric infrastructure to be able to lower our operating cost in the mine. The same thing applies with our services. Holistically, you are looking at a company that gives you a proxy to Greenland, which we are in a very favorable position compared to many of our peers, both in country and in the Nordic region. I'm going to ask you to turn to the next slide, please. In the Nordic region, why is that of importance? That is Greenland within the Nordic region. Greenland, as I said earlier, is the last frontier within the Nordics.
The good thing about the Nordics is that Nordic is one of the regions that has one of the best cooperation angles between the countries who are part of the Nordic nations. What I mean there is that the legislation is very similar, the support in terms of social support, infrastructure, and various other things. Greenland is also known around the world right now, and it is being sought after by the world powers, being the U.S., European Union, and the Nordics, that want to support Greenland in its development. What we are seeing in Greenland is that the exploration expenditure and development cost in Greenland, both in infrastructure and in mining, is increasing significantly. We are seeing increased activities by majors, and we are seeing increased activity, obviously, on the geopolitical front. Someone needs to do this.
Someone needs to conduct all of the work, and therefore Amaroq is actively looking at further license acquisitions within the country to strengthen its position and to also support the powers to be to supply raw material to the market. These markets can very easily be the Nordics because the Nordics are very strong on processing minerals and in mining, especially in Finland, Sweden, and to some extent Norway. If I could go to the next slide, please. If we look a little bit into the actual Q1 and how that relates to what we are trying to achieve on the kind of our larger scale, is that we have now, last year, constructed largely the Nalunaq mine. To put that into context, we are the only mine that was built last year and being commissioned this year in all of Nordics.
The skill set that we are gaining and building on is a huge value for the shareholders of Amaroq. The construction and commissioning has been continued. We did experience some weather issues during the winter, as many other companies in the Arctic. However, we also had a lot of learnings. What did help us is to think mostly on our kind of logistics and other things related to people. This has now been ramped up and is going really well. The key result we brought out in the quarter was a 51% increase in the Nalunaq mineral resource. This is, we had a six-year mine life, we now have a 10-year mine life, and also we increased the grade within the resources.
What we are seeing is that this is our key denominator to increase value within our portfolio and where you can actually put your finger on value in the portfolio, how long our mine life is. The mine operation and ramp development has been going really well. As we said previously, we've been focusing on ramp development, ramp based in waste, to allow us to access the ore in mine in Q1. We blasted our first stops in March. Both the ramp development and where we are breaking into ore has been very, very positive. We are seeing grades that are very good and are supporting our mine plan. We also have enough material in front of us to reach our targeted throughput by the end of the year. This is a key in any mining project.
If the grade is not there or if you don't have the material, that can be an issue, but that is something we have now proven looks very good. If we then look into kind of going forward, we are seeing then we have more and more stops available in front of us, which means that that can support more and more throughput of material. The daily processing has been increasing now in Q2. We were running the plant mechanically mostly during Q1, and we are now finalizing all of the electrical scatter system as well as water system that was delayed. We are seeing more and more ramp up. We are also seeing more and more operational excellence by our team. We have been manning our stations and getting all of the teams up to date.
We have been actually seeing both on the mining and ramp up to 220 or 300 tons a day days where we are processing, which is a very good result for us. The key here is that the mine works, the processing plant works. Yes, we have some construction and commissioning yet to do, like we previously said to the market, and we will be targeting to get to that throughput by the end of the year. I want to hand over now to Ellert, our CFO. Next slide.
Thanks, Eldur. Main movements in Q1 are, as before, related to an increase in capital assets in this quarter of CAD 22.6 million, which stands at CAD 183.5 million at quarter end. This is attributable to the Nalunaq site as we continue to capitalize site costs in the quarter and will continue to do so until the plant reaches steady-state production. Prepaid supplies inventory and escrow is more or less in line with last quarter, but we are seeing a considerable increase in metals inventory, which stands at CAD 7.8 million at quarter end compared to CAD 2.9 million at the end of 2024. This represents our gold contained in ore stockpiles outside the mine and processing plant, as well as gold in circuits within the processing plant itself.
On the bottom, you can see the associated cash flow movements, which represent the main quarter-on-quarter variance in capital assets and metals inventory. Moving on to the next one, please. Thank you. On liquidity and assets, at the end of the quarter, our cash balance is sitting at CAD 16.7 million. In addition to our undrawn credit facilities of CAD 23.7 million, we have access to funds totaling CAD 40.4 million. Subtracting accounts payable of CAD 17 million gives CAD 23.4 million in liquidity, as we've defined it, compared to CAD 50.5 million at the year-end 2024. This is on the backdrop of a very healthy balance sheet with CAD 252 million in total assets on a 78.3% equity ratio. The last four lines are connected to our investment in the Gardaq joint- venture. Gardaq's cash balance sits at CAD 4.4 million at quarter end compared to CAD 4.8 million at the end of 2024.
Amaroq's receivable balance from Gardaq increased and amounts to CAD 7.3 million at quarter end. As a reminder, this represents allocated G&A costs to manage the joint venture, and the balance will be converted to shares in Gardaq in 2026. Other than that, there is generally little activity in Gardaq in Q1. It is a seasonal business with a focus more on receiving and analyzing assets from previous year's exploration activities and planning of the 2025 exploration program, which will take place in Q2 and Q3 of this year. More on that later in the presentation. Back over to you, Eldur.
Thank you, Ellert. Thank you. Turn one page, please. These are just stats to update the market here a little bit or remind everybody our key metrics in Nalunaq. We have, as I previously said, 484,000 ounces in resources. This is an increase of 51% from our 320,000 ounces. This is a huge milestone for us. We have a 30 gram per ton as a resource grade. Maintenance indicated resource is now standing at 151 ounces. This is a very positive step for us because maintenance indicated resource is part of all of that, will then be looked to bring to reserves. This will strengthen our potential for liquidity and further debt finance for the company in the future if we so wanted to bring that onward. Our targeted mining rate, as I said earlier, is 300 tons a day.
We are working on long-haul stopping method, which we have now kind of blasted our first stops. Our headcount is about 150 in Greenland, of which approximately 50% are Greenlandic. The mine now has a 10-year mine life. Our health and safety stat is very good. We had 27 hours of lost time injury and total man hours of approximately 95,000 hours. Turn the page, please. On the Nalunaq resource growth, here on the picture on the right, you can see where we are developing our majority of our resources. It's really important for our shareholders to understand that the key value for us is to increase resources as close to the mine workings because those are the most valuable ounces for us as a company.
They can both help us reaching our target in terms of throughput and total ounces produced this year and, more importantly, next year. More importantly, they can also help us to expand our production and the resource base. As you can see, we are developing upwards from mountain block, target block, and then downwards also in valley block. This gives us huge potential, and we've just scratched the surface really here in terms of resource buildup. One of the key elements here is that we are now operating an underground rig, which both helps us in our near-term production and mapping of our resources, but also extending the resources and giving us the opportunity to drill all year round to replace all resources that we will then mine. Go to the next slide, please. There we are.
For the 2025 program, as I said earlier, on the gold side, where it is the yellow licenses and yellow marks, that is the gold regional belt. We will be focusing on the majority of our resources at Nalunaq to grow and increase the resources there. We have resource drilling at Nanoq, which we drilled very successfully last year, is planned for this year as well. In green, which is kind of a more longer-term exploration, we have now undergone two years' worth of exploration there. For this year, we will be focusing continuously on, on the one hand, on the Copper Belt, which you see there on the left on the screen. In the Copper Belt last year, we drilled Josva Target North, and we sampled Ukaleq. Ukaleq is amongst the most promising copper deposit that we have. It is early stage.
What we are learning is that there is an epithermal porphyry system in this Copper Belt. We received extremely high-grade grab sample on surface in Ukaleq of 5% copper and 12 gram per ton gold, which makes this a very interesting area. Also, in the area there, it has been less eroded by glaciers and other things, which means that there is more potential for larger resources to sit there. We have employed Steve Garwin to be our main advisor on the Copper Belt exploration, and we'll continue that. On Stendalen, Stendalen is a huge project, which we have now drilled in total only six holes. We are trying to target a Voisey's Bay deposit. We did six holes this year. We found similar mineralization as we found in our first hole this year.
Of that mineralization was not that economical grade, even though it was thick, but we are our thick intersection, I want to say. What we are seeing is that we are trying to find the heart of the system. What we did to do that, or that directs us to the heart of the system, is that we did downhole geophysics in those holes, which is suggesting that the heart of the system is giving us more indication where that is. These are large-scale projects. They have large-scale potential. We have just scratched the surface here, but we are getting tremendous success here. To put this into perspective, Voisey's Bay in Canada, I think they had more than 200 holes drilled before they declared larger resources on the whole system. The deposit or the massive sample were only found in the eighth or ninth hole.
This takes a little bit of time, but we are checking the boxes and getting all of the right elements there. We are finding similar systems elsewhere. We are also applying for new licenses in blue there, both in rare earths. These rare earths are the Carvar Intrusion. These are very similar outcrops to Tambris and these kind of deposits. We will be exploring them on surface, as well as in other places in Greenland, niobium rare earth and copper in mini turn. We can see that we have been fortunate to apply and build up this resource base ahead of other operators because most of these areas we have managed to apply for licenses or take on licenses before other parties are doing so. We see a lot of activity now in Greenland, and therefore we are fortunate to have done that already.
All in all, the activity will be very high this summer. We will be exploring and developing this, and we managed to secure, in our opinion, the best licenses, and we will continue to either joint venture or secure more licenses to further increase value for our shareholders. Next slide, please. The outlook for the year is that we will build on the positive progress we've already had so far and continue improving our operations and construction activities in Q2. We will have some stoppages in commissioning and calibration and rotation. That is all built in our schedule. We feel very confident we will reach our targets this year, which is 300 tons a day by year-end. Looking towards 2026, we then want to be in a fully commissioned mine. We are looking to finalize phase two construction in Q4.
Our assessment continues to increase the throughput in the plant to 450 tons per day. This will allow us to utilize the same building, the same generator setup, and various different things, and install this 450 tons per day. The aim here is to be able to then utilize the same cost base for more throughput now that we're finding more and more resources. We have good progress in our one megawatt hydropower project. We finalized the feasibility study for that. The focus is to have that finished by year-end with the view that by the end of 2026, we could then be building this. In 2026-2027, we could be building this hydropower plant. As an outlook for the year, we have given an outlook of 5,000-20,000 gold production.
We do know that this is a wide range, but because we are in a trial mining and commissioning year, our main focus is to make sure that everything works really, really well so we can actually have a full year guidance for 2026 where we are producing as efficient as possible. Therefore, there is a potential to narrow this range as the year progresses, and we intend to do that. We are in this position where gold price is very, very strong at the moment. We can see that the outlook for gold price remains very strong with the banks that we see, as well as the cost of oil and other things are dropping down. We are in a very, very favorable position as a company at the moment. Last but not least, there is huge increased geopolitical interest.
I think I'm not saying any news here to anyone here. We are actively looking to leverage on this increased interest. Why is that? We are one of the largest license holders in Greenland. We are one of the, if not the largest private investors in Greenland. We are one of the largest workplaces in Greenland. We have equipped ourselves to be able to be ready to take on, obviously, Nalunaq, but other projects and develop more value for our shareholders using the know-how that currently exists within the company. We see a lot of interest in supporting Amaroq in its development going forward, which is a great place to be for our shareholders. By that, I will hand over to Edward. Thank you all.
Thanks very much, Eldur.
If you have any questions, please use the top of your screen in the Q&A function and write them in there. We've got one question from the line at the moment, which is in regards to the guidance range for the end of the year. How confident are you in that range, and why is it so wide?
I mean, this is due to the nature of the trial mining and commissioning we are currently in. I mean, we expect to narrow this range, as I said earlier, as operations stabilize. Once full ramp-up is achieved, the company will provide its outlook for the full year in 2026. We are trying to be in all of our messaging and all of our focus to be conservative. That is a key aspect here. To make sure once the commissioning of this mine is ready, we are actually getting the most efficient cash flow out of the mine as humanly possible.
Thanks, Eldur. The next question comes from Edison. You told us that the metal inventory was CAD 7.8 million. Can you tell us how many ounces that relates to, please?
The metal's inventory is accounted for at cost. It does not represent the mark-to-market value of the gold contained. It is either the cost of inventory or the value to be gotten from that inventory, whichever is lower. This number is the cost connected to the inventory, not the value of the gold.
Thanks very much, Ellert. It looks like there's no further questions from the line. I'll give them another few seconds to see if there's any other questions going to come up. As I said, please, if you have any questions, please type them in the function at the top of the screen, and we'll get to them. Okay, there's no further questions. I would say to all listeners on here, if you have any questions, please don't hesitate to drop us a line. Oh, sorry, there's one more question coming again from Edison. When can we expect first revenues this year?
We've already achieved that in Q2. Yes, once we have a quarterly for Q2, we will see first revenues.
Thanks, Ellert. So thanks all for listening to this call. Very much appreciate your time. As I said, if you have any further questions, please contact me offline, and we'll help you as best we can. So thanks very much again. We'll be coming back at the next quarter or the half-yearly results in August. But until then, thanks very much. Have a good day.