Okay. Thanks very much. Welcome everyone to the Amaroq Minerals Full- Year 2025 Results Webcast. Thanks for joining us. We're gonna do a slightly different format to usual. There's no conference call line, so all questions will be written in via the webcast service. Please, if you have any questions, add those in, and we'll deal with those at the end of the call. We'll follow the normal form today. Eldur Ólafsson, the Chief Executive, will take you through the summary of the year and some strategic areas. Ellert Arnarson will take you through some of the financials, and I'll finish off and host the Q&A at the end. Thanks very much for joining. Welcome. Eldur, hand over to you.
Thank you. Good morning, everybody. It's good to be with you here today. I want to turn your attention to the first slide. I wanna start this meeting here just to kind of set the scene a little bit where Amaroq is at the moment. Now, we have an operating mine where we've guided 25-35,000 ounces for 2026, a full year, first full year of production for our Nalunaq 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 resource development this year to start development of that mine in 2027 and 2028. Then we have the Nanoq gold project, which we are actively pursuing to bring into resources.
Now, in Gardaq, we are drilling two early-stage projects, but very impactful projects both in rare earth elements and iron ore. The two enablers to allow us to do all of this is Suliaq and IMEC. Suliaq being service venture that we set up, and we just announced this morning about cooperation with IFU and other Greenlandic funds on that. This will help our working capital. It will help other mining companies and interested company in Greenland working capital. IMEC, where we have finalized our feasibility study to start producing green energy at site which will decrease our usage 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 one 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. Effectively, we have multiple company makers within Amaroq at the time, and we intend to use the experience from the great team that we've built up to date 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 a 5-7-year plan within Amaroq.
Now, what you see here on the right is the Nalunaq phase I operating, which is now in full scale production, where we are producing through gravity recovery, making a doré bar on site every month now, generating good cash flow. Phase two, we will have in, which is the full plant recovery. That means that we are taking the recovery of the gold from each ton from 65 all the way up above 90% recovery. Phase II is progressing on plan, on schedule. We will have that operating by June. Phase III is what we are analyzing now is to grow the potential production in Nalunaq from 300 tons per day to 450 tons per day.
That is still being assessed, but we've assigned that. 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 a mine. We know the operating procedure. We're doing the same thing again, similar kind of a scale in terms of investment and in terms of timing from a very high-yielding asset. Then we're moving up the, which we call the elephant in Nanoq, the Kangerluarsuk, Pit Minertil, Ilua, up the value curve by drilling them and defining them. We can see that there's a huge value potential that we are building up within in Amaroq. Now, if we turn the focus on the next slide.
Year- to-d ate, the production was above 6,000 ounces last year. We got our initial revenues. We went through various different aspects of selling and moving the gold out, selling it. We got an average gold price about $3,600 per ounce. We transitioned our mining operation from kind of a contractor to an owner 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, more control, and lower cost in the end. This has been very successful process so far.
We acquired the West Greenland Hub in May last year. This sets us up, as you can see, now we're operating and generating cash flow from Nalunaq. We have a whole development team that is now moving towards the West Greenland Hub to bring that mine into production. While we've been doing that, we've had a very successful exploration program in other assets and mainly Nanoq. That was what we drilled about 5,000 meters last year. I just wanna put this into perspective to the market that Nanoq was, we drilled about 27 holes, more than 63% of the holes that we drilled hit gold mineralization. To put this into perspective, in Nalunaq, one out of eight holes gave us a grade.
In this instance, we were getting more than 63% of the hole. We're getting thick intersection all the way from 1.5 meters up to 9 meters with really, really high grade. Now our intention this year is that we are starting the infill drilling of this area, focusing on creating a maiden 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. Last year, we obviously finished getting to a 300 ton per day. We finalized our phase one activities in terms of construction.
The last quarter last year was very construction heavy, which was a great result for us because it gave us the opportunity to produce really well during this first quarter and finalize phase II during this quarter and next quarter. I'm gonna 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. The average prices we were able to sell at was $3,920 per ounce. In comparison, gross revenue in Q3 was slightly higher at CAD 12.8 million, and it was lower in Q4 due to the plant shutdown for commissioning activities that took place in the quarter. As Eldur mentioned, for the year as a whole, we recorded revenues of CAD 27 million from the sale of 5,310 ounces. Exploration and evaluation expenses were CAD 4.6 million in the quarter.
Most of it was incurred at the Nanoq campaign, where we drilled roughly 5,000 meters this year with good results, as mentioned. After incorporating other income and expenses, the company recorded a net loss of CAD 3.2 million for the period. Moving on, please. On the balance sheet side, cash balance at year-end sits at CAD 21.5 million, compared to CAD 55 million at the end of September. This is mainly driven by continued CapEx, which was quite heavy in the quarter, at Nalunaq, mainly processing plant construction, as well as stocking up of spares and consumables in relation to finalizing, commissioning of phase one, and also driven by investments in a new mining fleet alongside taking over mining operations in Q4.
We continue to see an increase in metals inventory, which stands at CAD 15.8 million at quarter end, compared to CAD 11 million at the end of Q3. This represents our gold contained 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 two is operational in Q2. So that puts us at total current assets of CAD 67 million at year-end. On the non-current assets, the main movement here consistent with prior periods is a CAD 30 million increase in capital assets to CAD 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 payables, they're roughly the same between quarters at around CAD 20 million. The main change here between current and non-current liabilities is the amendment to our RCF facilities we announced in Q4, where we extended the facilities to February 2028. That takes them from current liabilities to non-current liabilities. Total liabilities at CAD 74.4 million at year-end, which results in an equity ratio of 79%. On the bottom there, you will see cash balance at Gardaq, our joint venture, at CAD 2.6 million with not very much activity in Q4. Moving on to cash flow. We recorded a net loss of CAD 18.6 million for the year.
After adjusting for non-cash items, cash flow used in operating activities, negative CAD 30 million, roughly, and cash flow used for investing activities at CAD 84 million roughly, which represents the CapEx at our Nalunaq project predominantly. Against that, we had positive cash flow from financing activities of CAD 90 million, which is mostly due to an equity raise that was closed in June of last year of CAD 80 million roughly, and a drawdown on our facilities of about CAD 10 million. All in all, this results in a reduction of cash of CAD 23 million throughout the year, 23.6.
Our cash balance was sitting at CAD 21.5 million at year-end, and in excess of that, we had undrawn credit facilities of CAD 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 to completion, we had a total of about 25, roughly, outflow of cash due to additions to capital assets. Then we had, as previously stated, we were stocking up on supplies and consumables in relation to the commissioning of phase I and increasing our metals inventory as well. I think that's it on this one. Thank you . Back to you, Eldur.
Thank you. Now, kind of turning our attention to 2026 and walking you through a little bit what you know really exciting year we have ahead of us. If we look at you know our guidance for 2026, so this will be our first full year of operating the Nalunaq mine. Our guidance is 25,000-35,000 ounces. Now, using the current gold prices today, we are looking at a cash flow of anywhere between $112 million-$160 million within this year.
If we then look at the cost for the overall year, that sits, if you take into account all in sustaining cost for Nalunaq, investments in Nalunaq, as well as the base case of exploration outside of Nalunaq, of a total of CAD 100 million. The free cash flow generation will be or is targeting on these kind of gold prices to be very, very good. Now, to give us ample liquidity throughout the year, and to even fast-track 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 CAD 35 million, taking it from CAD 35 million to CAD 70 million, doubling it and lowering the interest rate at the same time. This shows really the development of where we are going from, you know, more of a development or exploration company to more of a cash flow generating business, which is great. To help further on the enabling our strategy of developing faster, creating value quicker, we have now come to an understanding with one of our largest investor, IFU, to support us in the venture of setting up Suliaq, which is a servicing venture we have in Greenland.
Now, to give you an idea why this is important, not only for our company, but for all mining and interest of the company in Greenland, working capital in Greenland is of importance. You need to buy equipment, drill rigs, maritime equipment, and mining equipment up front, and that obviously binds a lot of capital. Having a servicing venture in Greenland 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. We're extremely pleased with that, not only for this year, but for those four years to come. This will allow a lot more equipment availability in a country like Greenland, as well as consumables and others. We're extremely pleased with that.
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 Citigroup to assist us in that process. All we can say right now is that the work is progressing really well, and we're getting a lot of very good feedback from the market there. We have subsequently delisted from the Toronto Stock Exchange. The key focus here is a little bit of plumbing of the business, so to say, in the 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 a whole. Overall, our...
You know, we couldn't be more excited about the strategy going forward. We have extremely strong team, both on the ground and operation, development and exploration. We're standardizing everything within the business and this will be a transformational year for the business, as we see it. On to you Ed.
Thanks, Eldur. 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. It's the first time we've been so polymetallic in our exploration campaign. Clearly focusing on the Nalunaq mine to begin with. We're gonna continue underground exploration. We're looking at, if you take our current MRE, we're at about 485,000 ounces, which gives us around a 10-year mine life. The idea is we're gonna replace resource each year through underground exploration to try and tap into some of that over 2 million ounce exploration target that we've got.
That will be the strategy going forward at Nalunaq and we'll continue to talk about it in that way and give detail on the results of that this year. 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 gonna continue drilling this year on that. We've already winterized the rig. They're outside already. There's infrastructure there in place. As soon as the exploration season starts, we'll be there drilling, looking to target a maiden mineral resource estimate, as I highlighted earlier. You know, again, look out for that this year. That's a very exciting next gold project for us.
And then around that, you've got the satellite gold. We'll continue to define targets there. We'll continue to do some geophysical work on those, as we look to de-risk that whole gold, the Nanortalik Gold Belt 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, the geos, and his geological team have been doing quite a lot of work on the data set that they've now received post-completion, and they're quite excited about that. Clearly, since the successful reassay of the stockpiles, there's also really interesting internal discussions going on around the commercialization of the germanium and the gallium that we have there, which is quite a topic at the moment generally in the world.
Outside of that and within our Gardaq JV, the Minturn IOCG and iron ore prospect in the far north, we had some really interesting and successful surface work done on that, which indicated it's a very high-grade magnetite iron ore. This year it's gonna be all about doing some scout drilling on that to see the depth and volumetrics of that. This asset is right in the far north, right up just quite near Canada actually, in an area that it seems to be an Arctic desert, very flat. We're looking at all the logistics of that at the moment as well. Down in the south again, we've got the Ilula rare earth element exploration campaign. Again, scout drilling on that after some really interesting surface work that we did last year.
This is a pegmatite rare earth, so a sort of conventional rare earth. It's gonna be working out the volumetrics of that through scout drilling, which will give us the opportunity then to potentially do some resource drilling on that thereafter. Stendalen, we still, that's still very much in the portfolio, still looking to target a high-grade copper nickel there. We'll be doing some further geophysical work on that. 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 really. This is just some photos showing you the work to date on phase two progress with Nalunaq.
Clearly, you can see a lot of the civil works that are already completed and a lot of the equipment's now being installed in there, as you can see. Really just to highlight that, things are on track, very much on schedule, and a lot of work is going on there at the moment, which is great to see. Certainly having gone through the you know, the winter season so far to date, we're really pleased with the progress there.
Absolutely.
I think we'll wrap up there. What we're gonna 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 in some of those questions there, and I'll crack on and start asking them in the meantime. First question, can you please discuss the timeline to profitability and any potential significant investments from government agencies?
Yeah. I mean, profitability is something we see within this year from our absolute free cash flow. And we're in a positive EBITDA territory already this year. That is very good. As we mentioned earlier, in relation to I mean, I reiterate here, in the current gold prices, you know, the range from 25,000 ounces to 35,000 ounces, it ranges from $112 million-$160 million in cash flow. Now, that is on a $4,500 gold price. All of the capital investment within the group, both in terms of all-in cost of Nalunaq, further investment 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.
In addition to that, we have the new loan facility to give us even more wiggle room if we intend to do more this year. That puts us in a very good position. Now, on what we said on various different agencies being Denmark, European Union, and/or U.S. agency, we maintain a good dialogue with all of these different agencies. We have been in dialogue with all of these agencies now for four or five years, and we will continue to doing so going forward.
Thanks, Eldur. Next one. Does the potential RCF upsize and equity injection to that 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 as of mid. Now, the good thing about our programs is that most of the programs start around mid-summer, June, July, when a lot of our cash flow this year, as we've said in our release, in the first half of the year, we're looking at 7,000-10,000 ounces. 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 wanna spend and how much we wanna do.
We need to make sure we can secure the rigs and secure all of the people to be able to do the work. That is also an element there that we need to look into.
Yeah. Right. A question around Suliaq. Do you already have potential clients or customers contacting you for these services, and do you currently have leases out for the equipment to other companies?
Currently, we don't have leases out to other companies, but we have been contacted by various different parties. I mean, the whole idea behind Suliaq being Suliaq is servicing Amaroq. It can be servicing various different projects within Amaroq, which we either own 100% or partly. The idea is that we need to have an arm's length agreement with Amaroq, meaning we will offer the same terms to anyone operating in Greenland. It's a cost plus model, and therefore, we've already had three inbounds to us, and more actually, and you know, there are 33 companies in mining in Greenland. Mining is one thing. There's also a lot of infrastructure. There is hydro projects. There are governmental services. There's defense projects.
There's a lot of interest here to set something up. I do wanna emphasize the fact that this company comes as a servicing opportunity alongside all of the great Greenlandic servicing companies who lack often the equipment, but have the people. There is a win-win scenario here for all parties involved.
Thanks, Eldur. Ellert, this is probably one for you. Can you just confirm those 2026 cash flow numbers? Were they in Canadian dollars or US dollars?
I think that's in relation to Eldur's comments earlier, and that would have been in U.S. dollars.
Yeah.
In line with the guidance that we gave out.
Um-
Yeah.
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?
Yeah.
As Eldur suggested, we're right in the midst of that process at the moment. We're looking to get the draft of the prospectus in. There's a CPR being drafted in the background as well. There are two windows. Normally, the end of June window and then the autumn window. We're working towards the first window if we can. But if we're not, then it'll be in September. But currently our expectation is we're trying to do it by the end of June. One of the reasons we're coming to the main market is because dropping listing in Canada, et cetera, is to drop costs. While I'm not gonna give you the exact cost of the process, the point of it is to drop costs in the first place.
That's that. Would it be possible for Eldur to comment on the data points he looked at that are coming in from Nalunaq, which gives him comfort on the 2026 gold targets?
Yeah. No, I can certainly. I think the data points you wanna be looking for there is the following. I mean, we are estimating not a full production this year, meaning in terms of tonnage. We are estimating about 75% of tonnage of the total production, just to give us, to be kind of on the cautious side. Now, what then controls what the ounces will come out is the grade and the recovery. I can say without going into the details here, because we will update in the Q1, that both the grade and the recovery are very good in this first quarter we're seeing them. We are confident on that.
Furthermore, from the drilling, underground drilling, the resource drilling we're doing and resource conversion drilling, we're also seeing the grade as well as what we call a core factor. That means what the mining model is telling us and what then actually comes out of the grade. These are all positive indicators so far, and therefore, yes, these are all very positive for us. Therefore we are very confident for this guidance.
A question just on diesel and energy costs. Obviously lower impact from needing less diesel, which is great, but can you talk a bit about the sensitivity forecast for the diesel price?
Yes, certainly. I mean, to give you a little bit of kind of idea of 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 consumables and so on. Actually the energy cost in Nalunaq for the year, we're estimating about CAD 8 million, which is only about 8% of our total cost in that all-in sustaining cost number. We don't see a massive impact there. What is also important, we've purchased all of our diesel or energy up until mid-summer, so we are quite well protected from there. There is another angle here as well.
Greenland, due to the fact that they are very much dependent on diesel for the heating of their towns and operations, they purchase much of the diesel, and they fix the prices usually for two years at a time. That can be negative, you know, because sometimes the prices are higher than the market, but it can also be positive because then, you know, you're operating on a diesel price that is, you know, doesn't have the impact of something that is happening in the Middle East at the moment. But very much this energy cost is not the big item in our cost category. Secondly, we have diesel now up until mid-year. Thirdly, the Greenlandic government purchased or Polaroil has purchased a fair bit of diesel for the next two years for the country.
Thanks, Eldur. Ellert, maybe one for you. Are we looking at putting a hedge in with gold prices high at the moment?
We haven't hedged gold prices at all up to this point. We are looking into whether we can opportunistically hedge a part of our costs, capitalized costs this year. Other than that.
We'll be opportunistic. We're not too precious with kind of 100% no 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. Yeah. As an example, when we pre-sold 1,500 ounces a couple of weeks ago on a $500 per ounce. There are opportunities like that. I don't wanna say we are very good at predicting the prices yet, but there are opportunities to cover your capital cost, for sure.
Thanks. Thanks Ellert . Working capital outflows. Working capital outflows were consistent through 2025. How do you see them growing this year?
Yes. It will be different this year.
For the first six months, we'll continue CapEx and construction of the processing plant facilities, but that should recede quite quickly post Q2. The non-sustaining CapEx that we've guided on will be front heavy. Once the flotation recoveries kick in and the CapEx recedes for the second half of the year, working capital will become quite benign. We should see that reflected in the cash balance, especially in H2.
Super. Thank you. I think the next one is around CapEx and capital spend. Can you confirm the 2026 capital spend? Was it $100 million? And this is with the minimum exploration?
Yes. About that number, yes.
Is any of the 2026 capital spend on expanding to 450 tons per day?
We will do some assessment on that. Just to give you a little bit on the assessment there and the idea of increasing to 450. When we designed the plant in Nalunaq, the only thing we need to expand is to put in a second mill. The rest of the plant is designed for 450. We are doing the assessment now on the lead time of the mill and the construction. That and we will be updating in the next quarter or the following quarter with that plan. Now, that needs to be followed with more mining, of course.
Having 450 tons today doesn't only potentially give us more cash flow, it also gives us the opportunity to have lower grades for the plant, if that would be the case in future years. Because the operating cost stays really the same if you're doing 450 tons per day versus 300 tons per day. It gives you an idea of why we're looking at that.
Thanks, Eldur. This is a question regarding sort of reconciliations or grades. Can you give us any indication on how the grade in Nalunaq is now when you've experienced the processing compared to the drilling results?
Yeah. What we're seeing the core factor from the mine plan towards what we're mining is positive. We're getting higher grades.
That is not only to look for is that we are getting higher grades, but we also have to kind of look into is, you know, what is the dilution, how well we mine it. That has also been going really well. Those are the two elements. Positive and positive on both how we're mining it and also the grades so far.
Thanks, Eldur. Ellert, maybe one for you here. 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 for the long term? Yeah.
We don't have a target margin in the long term, but I would say that the point to the AISC really that we've guided on in Q4 being in the range of $1,250-$1,450 per ounce. Then depending on the gold price, you can calculate kind of net margins from those numbers. A question on likely impact, obviously very pertinent at the moment. What's the impact from the current Iran situation on costs, and will our AISC 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 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. We're not, yeah. We're reiterating our guidance today. Yeah, and clearly, as I highlighted, the slight hedge we have on diesel costs and things. That's it.
Yes. I 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, you need a lot of power to power big mills and so on, right? The impact of higher oil prices does have an impact.
Whereas in an operation like we have that is high grade, high yielding, the impact of power and so on is much lower, right?
Thanks, Eldur. Last question. If anyone has any more 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 receives from the board in relation to any negotiations it has to have with government agencies in Denmark, Greenland, and the U.S.? Do you feel that the existing board is providing all the support and contract basis that it has?
Yes, the existing board is doing that, and the board is kept abreast to any discussion or potential opportunities within discussion with these agencies and government.
Thanks, Eldur.
There are no further questions currently, but please, if you have any, please send them through to me, Ed Westropp. My email 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 one of these at the time of the Q1 results in May. Look forward to speaking to you all then. Thanks very much.