Thank you for standing by. This is the conference operator, and welcome to the Artemis Gold fourth quarter 2025 results conference call. As a reminder, all participants are in a listen-only mode, and the conference call is being recorded. After the presentation, there will be an opportunity to ask questions. To join the question queue, you may press Star then one on your telephone keypad. Should you need assistance during the conference, you may reach an operator by pressing Star then zero. I would now like to turn the conference over to Ms. Meg Brown, Vice President and Investor Relations. Please go ahead.
Thank you, operator. Good morning, everyone, and welcome. Thank you for joining our Q4 conference call and webcast. Before we begin, I would like to remind everyone that certain statements made on today's call may be forward-looking, and we encourage you to refer to our public filings and disclosures, including the cautionary language in yesterday's news release, for a more detailed discussion of potential risks and uncertainties related to these statements. I will now hand the call over to Artemis Gold's CEO, Dale Andres. Over to you, Dale.
Thanks, Meg, and thanks, everyone, for joining the call this morning. In addition to myself on the call today, we have our President, Jeremy Langford, our CFO, Gerrie van der Westhuizen, our Chief Business Development Officer, Tony Scott, our Chief ESG Officer, Candice Alderson, and our VP Finance, Eric Marchand . So in addition to myself, Gerrie and Jeremy will help present the highlights for the quarter, and then we'll open up the call to your questions. Before I discuss the quarter, I would like to highlight our dividend announcement yesterday. Our Board did approve a progressive dividend policy, and that's with an inaugural base quarterly dividend commencing in the second half of this year.
As the slide illustrates on Slide 4 , we plan to start with a relatively modest base dividend of CAD 0.05 per quarter in the second half of this year, rising to CAD 0.08 per quarter in 2027. Shareholder returns are expected to progressively increase as we move through the end of our EP2 construction period, when we plan to return 40% of available cash flow to shareholders starting in 2028 and beyond. And that's both through a base dividend and then incorporating a variable return component, which may be a combination of further dividends as well as the potential for share buybacks. We may consider potential share buybacks in addition to the base dividend as early as 2027.
This dividend policy reflects our confidence in both the strength and sustainability of our operating cash flows and in our disciplined development of the Phase 1A and EP2 expansion projects at the Blackwater Mine. As an important part of our capital allocation framework, this policy positions Artemis among leading peers and balances reinvestment for growth with shareholder returns, and while providing flexibility in the near term to grow Blackwater to be a +500,000 ounce annual producer, and we're on track for that. Turning to Slide 5 , and as I reflect on the year, 2025 truly was a transformational year for Artemis, and it really is a testament to our team's ability to deliver. So much has happened over the last year. It is amazing to consider.
We poured our first bar of gold just about a year ago on schedule and on budget, and from there, we moved very, very rapidly from first gold to commercial production in May, hit nameplate capacity before the middle of the year. We produced almost 193,000 ounces of gold for the first full year, and that was within our original guidance range. We locked in our next phases of growth with the Phase 1A expansion to 8 million tons per annum processed, that we announced in September, and then in December, announced the EP2 project, a transformational growth project, growing processing capacity by over 250% to 21 million tons per annum.
These projects, and Jeremy will discuss our progress on these a little later on, will make Blackwater one of the three largest gold mines in Canada. Our finance team has also been very busy refinancing the Project Loan Facility with a revolving credit facility in July, gave us greater flexibility for the expansion project funding. The team has now set up the balance sheet with an incredibly priced long-term debt that is a good match for this long-term asset. Gerrie will provide a few more details on that shortly. It's been quite a year, and I'm really proud of the team for delivering on all of these accomplishments. On Slide 6 , this shows the operating highlights for the quarter. We achieved a new record for gold production despite shutdowns, including a full ball mill reline and an unplanned mill motor replacement.
We produced over 68,000 ounces of gold in the fourth quarter at an all-in sustaining cost of $925 per ounce of gold sold. On a post-commercial production basis, we finished the year at $869 per ounce. And importantly, that was within our revised guidance range, and also importantly, without a lost time incident. Our mill throughput was slightly lower than Q3 due to those shutdowns that I mentioned, but that was more than offset by higher grades as we moved down in the pit and as well as higher recoveries as we continue to optimize the processing plant. Our low-cost position, coupled with continuing strong gold price environment that we find ourselves in, translates into industry-leading all-in sustaining cost margin, and that was about $2,300 per ounce for the fourth quarter.
On Slide 7 , this shows how we continue to perform and through 2025 on a consistent basis throughout the year and how we continue to optimize. Just a few comments, mining is generally going very well. The ore body continues to show that more medium and low-grade material than we had expected is being mined, and we now have a stockpile that's ready to feed the mill of nearly 14 million tons. We continue to nudge up our gold recoveries as we adjust the feed blend to the plant, as well as various parameters and reagent consumptions. And this has improved our recoveries to over 88% for the quarter. On Slide 8 , this shows a few of the capital projects that we've been continuing to push forward in the last quarter.
Water management infrastructure is a key part of our environmental stewardship. Our tailings dam and freshwater reservoir, shown in the lower couple of photos, are key parts of that management system. We commissioned a metals water treatment plant near the mill in the fourth quarter, and a new membrane water treatment plant at the tailings facility will be completed in the summer of this year, and we made good progress on that in the fourth quarter as well. There are still a number of rectification and improvement projects around the processing plant that are still underway, and that includes continuing to expand the ore stockpile footprint, faster than expected, again, due to the higher stockpile tonnages I mentioned. But we are making very good progress on these items, and we're well set up to achieve our targets and guidance for this year.
I'd now like to turn the call over to Gerrie to discuss our financials. Gerrie?
Thank you, Dale, and good morning, everybody. Turning to Slide 9 , I should probably just note that the amounts I'll be discussing are in Canadian dollars, unless otherwise specified. In the fourth quarter, we reported revenue of CAD 334 million, adjusted net income of CAD 146 million, and adjusted EBITDA of CAD 237 million. During the quarter, our average realized gold price for ounces sold into the spot market was over CAD 5,800 per ounce. Notably, this quarter marked the first significant delivery of 22,000 ounces into our mandatory hedge book, which is associated with our former project loan facility at a price of CAD 2,820 per gold ounce.
Looking at one or two of the early analyst notes that I've seen, there seemed to be some suggestion of a bit of a surprise at the 22,000 ounces that we delivered into the mandatory hedge. So just by way of reminder, our schedule of remaining mandatory hedge deliveries is actually disclosed in note 21 of the annual financial statements and in our MD&A, and it was also disclosed in our previous MD&As. Now, if shareholders look at that disclosure, you will note that 68,000 ounces of gold of the mandatory hedges are due to be delivered in 2026. I'd like to make use of this opportunity just to provide a bit more color as deliveries for 2026 are front-end weighted.
So 25,000 ounces of the mandatory hedge will be due in Q1 of 2026, 16,000 ounces in each of Q2 and Q3 of 2026, and then the 12,000 ounce balance in Q4 of 2026. You can also find our disclosures on the voluntary hedge in the same notes. We have 21,000 ounces to go at CAD 3,350 per ounce, which will be delivered between March and the end of Q3, 2026. Well, this is probably longer than anyone ever hoped to listen to me talk about hedges, so I will point out that overall, with record production in Q4, we sold 8% more ounces in Q4 compared to Q3.
We incurred fractionally higher production costs, but at all-in sustaining costs, that is in the lowest decile of the global cost curve, and therefore, industry-leading margins on ounces sold into the spot market. The higher production simply translates to record cash flows from operations of CAD 198 million. That deals with the various factors that impacted EBITDA and adjusted EBITDA. Overall earnings for the quarter also benefited from lower borrowing costs on the Revolving Credit Facility, following the extinguishment of our former Project Loan Facility at the end of Q3, and this was partly offset by higher non-cash deferred income tax associated with the higher earnings that we posted for the quarter. Maybe if we turn to Slide 10 . Subsequent to the quarter end, we announced and closed on a CAD 450 million corporate bond offering.
This was not only oversubscribed by 3.5 times, it was also the first Canadian mining bond issuance in more than a decade, and the largest B category Canadian dollar issuance in approximately 14 years, and a coupon of 5.625% , sorry, is the lowest inaugural coupon in 12 years. Artemis, due to the undeniable quality of the Blackwater asset, also became the youngest company to receive a credit rating from S&P. We used the proceeds from the bond offering to substantially pay down the RCF, and we now have a balance of just about CAD 15 million dollars owing on the RCF, and we're actually in the process of paying that down in the coming days.
On a pro forma basis, considering the CAD 168 million dollars Canadian cash that we had available at the end of December, along with the CAD 685 million dollars that we have available under the RCF, immediately following the closing of the bond, our available liquidity on a pro forma basis is CAD 853 million dollars Canadian. In summary, we're in a very strong financial position with an increasing cash position as we speak, and financial flexibility to fund organic growth and start returning capital to shareholders. If we turn to Slide 11 , I just want to reiterate our 2026 guidance that we recently issued.
We're expecting another strong year at Blackwater, with full year guidance of 265,000 ounces to 290,000 ounces of gold produced at an all-in sustaining cost of $925 per ounce to $1,025 per ounce. This is one of the lowest all-in sustaining costs in the industry, and that translates into very attractive margins at both current and even at substantially lower gold prices. In line with our growth strategy and the Phase 1 and EP2 plans we announced during the latter part of 2025, we're expecting to spend a total of approximately CAD 670 million to CAD 745 million in 2026.
Jeremy will highlight a little later where this money will be put to work to ensure that 2026 is another transformational year for Artemis Gold as we continue to deliver on our growth plans. I'd now like to turn it back to Dale.
Thanks, Gerrie, and, yeah, hopefully everyone appreciates the additional color Gerrie provided on the hedge deliveries for 2026. Looking ahead, we're in the middle of an exciting growth phase at Blackwater, with plans to achieve gold production of more than 500,000 ounces of gold per year by the end of 2028, and that's through ongoing optimization of the current Phase 1 build, delivery of Phase 1A by the end of this year, and completing construction of the EP2 project in Q3 of 2028, and ramping up to full capacity by the end of that year. So we'll be at that production rate of 500,000+ ounces, starting in 2029. Beyond EP2, we believe Blackwater offers tremendous potential for further growth.
We are advancing studies on various technology initiatives, including conveyor systems, electrification of our haul fleet, and autonomous haulage, which could drive a meaningful improvement in unit costs. We are also actively drilling to support our resource conversion, resource expansion, and regional exploration programs, which will feed back into our strategic planning process as we assess both life extension and further growth opportunities beyond EP2. I'll now pass the call over to Jeremy, who will provide progress updates on both Phase 1A and EP2 over the next couple of slides. Over to you, Jeremy.
Thanks very much, Dale, and good morning, everyone. Things are advancing pretty well on Phase 1A with all major equipment packages being ordered and the engineering design teams have completed the material takeoffs respectively across the mechanical, piping, and electrical bulk disciplines. In December 2025, we completed the foundations of the two new leach tanks, as you can see in the photo on Slide 13 . And in parallel, we've now started pouring the Vertimill base foundations. And once those are complete, we'll continue the new purpose-designed mill building foundations. We expect to hit a number of key milestones across the 1A expansion as we move through to mid-2026, such as completing engineering, design, and drafting of the 1A scope of work, commencing leach, leach tank erection on site of Blackwater, as well as commencing the Vertimill building construction.
It's worth noting that as this is a brownfields expansion, the team's actively looking to performing some works on an opportunity basis without impacting the current operating asset. Things are working pretty well there. Overall, we're on track to hand over the new facilities as we progress through the year, and we're expecting to realize the increased 8 million ton throughput per annum late this year in 2026. As we move across to Slide 14 , with respect to EP2, in addition to the orders of the 18-megawatt SAG and ball mill, which we placed in Q3 last year, we've also placed several orders for other long lead equipment, such as the gyratory, secondary, and pebble crushers, the oxygen plants, sulfur burners, CIP cells, and we believe that these orders and secure delivery times have clearly de-risked the construction schedule overall.
At Blackwater, we've largely been focused on advancing the new construction camps, which will allow us to ramp up the construction workforce as required as we move into full construction activities later this year. We've already constructed and commissioned over 100 additional rooms in 2026 on time and on budget, and are working towards adding another 500-odd rooms prior to midyear. The camp building supports some of the foundation work are currently being fabricated off-site. Some of this stuff's already been delivered, and we're currently receiving the additional triple stack or three-level camp buildings on-site as we speak, ready for the next tranche of camp expansion.
We're expecting to have this camp completed, as I mentioned, prior to midyear, and we're also turning, in parallel, our attention to the EP2 plant site earthworks, of which we're on target to commence during Q2 this year. Of note, we plan to ship the first of the 18 megawatt ball mill components from the European fabricator to Blackwater in the coming weeks, with other main ball mill mechanical components arriving gradually across the rest of this year. Certainly, another de-risking tool to have this in our own yard at site well before we need to build it.
As I hand back to Dale, I can say the growth projects of Stage 1A , the 13 million tons per year, EP2 early works and EP2 plant engineering and design works, are progressing very well to date, with the owners and engineering team collectively hitting their short-term targets and objectives, which in what's been a pretty solid performance thus far this year. Dale, back to you.
Thanks, Jeremy, and yeah, I really look forward to Jeremy providing further updates as we progress the year on both Phase 1A and EP2. So turning to the last Slide 15 . In summary, we do have an asset that is not only robust in size and scale, and we'll show that as we build it out with Phase 1A and EP2, but it's located in what we believe to be one of the world's best mining regions, including having access to renewable, low-cost hydroelectric power. We have had a very solid start to operations in our first year, our inaugural year, where the team achieved nameplate capacity in a very short period of time, and we are in excellent shape to meet our guidance for the current year.
We are establishing a track record of capital discipline and cost control and delivering one of the lowest all-in sustaining costs in the industry. Our balance sheet is strong, with a growing cash balance expected as the year progresses, which is expected to support our numerous and transformational near-term growth, in particular, as I mentioned, the Phase 1A and EP2 projects. I'm proud of where we're taking this company and, and how we value our people and the communities we operate in, and we continue to focus on building long-term value for our shareholders. And now I can say, and very pleased to say, including capital returns. And that concludes our presentation. Now back to the operator for, for the Q&A. Thank you.
Thank you. We will now begin the question-and-answer session. To join the question queue, you may press star then one on your telephone keypad. You will hear a tone acknowledging your request. If you are using a speakerphone, please pick up your handset before pressing any keys, and to withdraw your question, please press star then two. We will pause for a moment as callers join the queue. The first question will come from Harrison Reynolds with RBC. Please go ahead.
Hi, Artemis team, and congratulations on closing out the first year of Blackwater, and great to see the new capital allocation framework. Just wondering if you could provide any detail on how operations are progressing so far in 2026. You know, there's some downtime in Q4, and wondering how the mill has been performing and how grades are reconciling.
Yeah, thanks, Harrison. And, you know, obviously, it's, we're about halfway through the quarter, and it's still early in the year, but as I said, we're set up very well. I would just make maybe a few points of color around this. Like, when we started up the mill last year, it was pouring first gold and commissioning the mill in the dead of winter at the end of January or early February. And, I'd say we're much better prepared going into this winter. We incorporated those lessons learned, did the winterization ahead of this winter, and, I will say we had, you know, what I believe is a very, notwithstanding some of the downtime in Q4, a very good finish to the year.
I'll say things are going very, very well to start this year, as well.
Great. And then maybe just taking a step back, and kind of in relation to this capital allocation framework. Wondering if you could talk a little bit about the company's philosophy as it relates to growth from 2029 onwards. Obviously, you know, how to focus on the here and now and, you know, building EP2 is the focus, but wondering, you know, when you consider like M&A longer term, is that part of the strategy? You know, the team has substantial mine building and operational expertise. Wondering if the company's philosophy is more on capital return from 2029 onwards or looking to grow both organically or inorganically.
... Yeah, I think, you know, I'll make a few comments around that. You know, you know, as we highlighted in our capital allocation priorities, you know, maintaining a strong balance sheet, reinvesting in our current projects, is key, and that is our current focus and our priority. And now, importantly, with this policy now announced, returning capital to shareholders and giving, you know, transparency and certainty around 40% of free cash flow being returned, as EP2 comes online in 2028. That does leave, you know, remaining cash flow. We do believe we're gonna be very strongly cash flowing if gold price stays anywhere close to the current target.
You know, throughout the build, to support the capital cost, but importantly, in 2028 and beyond, there should be lots of cash flow to consider both additional capital returns to shareholders and other growth prospects. And that could include organic growth opportunities beyond EP2, and we're gonna do a lot of work in 2026 around mine plan optimization, resource to reserve conversion, resource expansion, exploration in the district. So we're really gonna advance our longer term organic growth strategy as we progress in 2026. I think from an M&A perspective, I'd just say our main focus is on our internal growth. We do have a team that is both capable and has capacity to look for opportunities.
We'll continue to do that, but right now, our focus is on internal growth. And I think we'll... Yeah, it's probably best just to leave it, to leave it there.
Great. Sounds good. Thank you for the detail and for taking my questions, and congratulations again.
Thanks, Harrison.
The next question will come from Jeremy Hoy with Canaccord Genuity. Please go ahead.
Good. Good morning. Thanks for taking my question. I actually have the same question as Harrison on 2020, 2028 and beyond. As I look at the cash builds quite rapidly in my model. So appreciate the color there. Stepping back to, you know, the current focus and build of EP-2, have there been any safeguards or extra conservatism built into this schedule? I'm thinking about, you know, fire season in the summer or something that interrupted Phase 1 construction and, you know, notably, you guys worked through it and, you know, the project was delivered. But I guess, you know, wondering what lessons have been applied in EP2 in terms of risk mitigation.
Yeah, maybe I'll start, and then I'll kick it over to Jeremy to add what he'd like as well. But I just wanna highlight the early works phase. And just, you know, one of the key de-risking elements that we've built into our strategy for EP2 is this early works phase and really advancing on the four fronts that Jeremy spoke to. You know, first and foremost, advancing detailed engineering and that supports long lead procurement. As Jeremy highlighted, we're making really good progress on those. And then from an execution perspective, you know, starting the earthworks early ahead of major works and importantly, getting the construction camps built ahead of starting major works.
I'm hoping we can even start a bit of concrete, you know, as early as we can. But, you know, getting those four elements, engineering, procurement, earthworks, and camp, ahead of starting major works, that's really de-risking things. But just around lessons learned, you know, just to comment, you brought up specifically, Jeremy, the fire season. Last year, we made out very well. We didn't get impacted by that, even though there was fires close. I think a lot of the area has been burned, and we are protected a little bit from, you know, on half the perimeter, so to speak, or because there's a mountain that's bald on the top.
So, I think we're well set up from that. But Jeremy, do you want to add anything on risk management and lessons learned?
Thanks, Dale. Good day, Jeremy. No, I'd just like to say that I think, to give you know, the listeners comfort, the key activities in the EP2 schedule have a lot more rigor in when we start and stop those activities. We also have some periods of the year where we haven't decided to double shift them as yet, but we have allocations in the budget and the schedule to, for example, work a night shift across a different period if we needed to. So, so Jeremy, to answer your question, in short, we've got enough rigor and protection in the schedule, I believe, to hit the milestones and the deliverable dates that we've communicated.
Okay, great. Gents, thanks for the, the color. Much appreciated. And I'll step back in the queue.
The next question will come from Dale DeMarco with National Bank Financial. Please go ahead.
... Thank you, operator, and good morning to Dale and Jeremy and the rest of the team. So Dale, it's encouraging to hear that the ops and winterization steps are performing well. Looking at recoveries, I mean, recoveries have been trending higher. Do you expect this trend to continue progressively through 2026, or would it occur maybe in a step change after, you know, timing with the completion of adding an extra leach tank or regrind mill and so on?
Yeah, thanks, Dale. I would say both. I think we are getting deeper in the deposit. We're getting better at our blending as we're doing more ore characterization and you know, planning in the mill feed that we're feeding. And I think we're also getting better at how we're managing that through the process and management of reagents and just good, you know, good continuous improvement optimization efforts. In conjunction with that, as we layer in the Phase 1A components, I think we'll start to see additional benefits. And whether that's the improvements we're making to our reagent addition systems, the additional oxygen supply, the additional tankage, all of those are gonna help on recovery. As you know, this is always a throughput versus recovery trade-off.
We're trying to find the right balance between those two. And I would say importantly, as we build out the EP 2, new plant, that will be, you know, a whole separate and adjacent plant, you know, that is still designed and planned to achieve our ultimate 93% recovery target. And like I said, we'll always make throughput versus recovery trade-offs, but we're still marching down that path. I would say all the way to 93% is still our target, but that's gonna be over that kind of 2-3-year period as we do the full build-out. But I think it's gonna be a continuous improvement from where we are through to that target over the next 2-3 years.
Okay, great. And then, Jerry, shifting to you, thanks for the clarity on the pro forma liquidity at about CAD 853 million. The sizable amount, are you comfortable with this level, or you think there's scope to maybe reduce the RCF limit, you know, given that you've got some pretty elevated cash flow from operations at current metal prices?
Oh, yeah, thank you for the question. We're certainly very comfortable where we are right now in terms of the sufficiency of the liquidity position. At the time of closing the bond, we did flag that in the short to mid-term, we may evaluate opportunities and situations where we might reduce it. As we approach the completion of Phase 1A, I think that'll be an appropriate time for us to consider that even more closely. But to answer your original question, certainly comfortable where we are. We do know there's an opportunity to reduce, but yeah, certainly with the cash flows, as you mentioned, this thing printing money, it's a great position to be in and to fund our growth opportunities from.
Okay, great. Thanks for that. And then a final question, Dale, just going back to you. I think we're still waiting for the year-end resource update that might be coming, I guess. But, I've heard it mentioned before that if you were to reoptimize at a higher gold price, it adds significant tonnage. I'm just wondering if you could comment on that. Would we expect to see that higher gold price with the pending release in an updated, you know, we're seeing it across the street right now at a number of different levels. Some are even above $2,000 an ounce. But just curious, you know, when we might see that potential significant addition and what the impact on grades might be as well?
Yeah. I would, thanks for the question, Dale. I would say from an optimized mine plan and how that translates into. And I think there is lots of mine plan optimization potential for EP2, and I would say that is both the additional low and medium grade ore that we're finding. How can we, you know, with our current stockpile, and if we can segregate the higher grade portions of that stockpile, that opens up opportunities for optimization of EP2 once that's up and running. And then, as you pointed out, you know, higher gold prices and resource to reserve conversion. And we're also doing resource extension drilling currently.
So for the full optimization of that, you can expect it at the end of the year, because we want to incorporate all of those elements I just spoke to, including drilling that we'll be doing in the first half of this year, and that positive reconciliation into an optimized reserve and resource. We will come out with our kind of you know update for the end of the year in the coming weeks, which is more just you know taking into account what we've mined to date, but it won't have the full optimization. That needs some time to go through, and you can expect that at the end of 2026.
Okay, great. That's very helpful. That's all for me. Good luck with the rest of the quarter, guys. Appreciate it.
Yeah, appreciate that, Dale. Thank you.
As we are out of time today, this concludes our question and answer session. I would like to turn the conference back over to Mr. Dale Andres. For any closing remarks, please go ahead.
Thank you, operator, and thanks again to everyone who joined the call. We hope we've been able to answer all of your questions, and we are available to follow up for any other questions. We are really looking forward to reporting on our operational progress, our optimization efforts, and importantly, our growth progress on Phase 1A and EP2 as we progress through the year. Thanks again, everyone.
This brings a close to today's conference call. You may now disconnect your lines. Thank you for your participation, and have a pleasant day.