Downgrade to Hold: Treading Through an Investment Cycle

研报英文原文证据摘录

Downgrade to Hold: Treading Through an Investment Cycle

: C$7,456 tailings infrastructure projects to supplement the planned expansions and similar investment

continuing through 2027-28 alongside the EP2 build. As such, we view a more tempered near-Working Cap ($mm): $(9.3)

term outlook through this investment cycle with longer term fundamentals remaining intact in

NAVPS: C$34.22

Enterprise Value building towards increased production levels of ~500 Koz/yr over the coming decade.

C$8,581.1

(MM):

Dividend: C$0.00 A low cost mine working through some potential cost pressures

Yield: 0.0% We continue to view Blackwater as a high quality, low-cost asset helped by project specific

General: Notable Ownership: Board & Management (38%) factors including a downhill haul to the mill, relatively shallow pit and low strip ratio, and

connection to the low-cost BC Hydro grid. However, we anticipate cost pressures via (1)

FY 2025A 2026E 2027E larger scale open pit resulting in greater exposure to energy pricing (currently guided at a

(Dec) $5-10/oz AISC impact for every $10 change in oil), (2) anticipated decline in milled grades

EPS (f.d.) given processing at ~2x the 0.75 g/t reserve grade since start up in early-2025, (3) ongoing

Q1 C$0.11 C$0.54 - optimization of cyanide consumption and rising transport cost of supplies to site, and

Prior Q1 - C$0.65 - (4) increasing labour costs in Canada. As such, while Q1 was a solid result in spite of an

Q2 C$0.43 C$0.66 - unplanned 7-day shutdown at the mill, we view potential for modest cost pressures ahead.

Prior Q2 - C$0.75 - ARTG is now targeting upper end of AISC guidance for the year ($925-1,025/oz) including

the planned maintenance shutdown in Q4 for the Phase 1A tie-in, which compares vs ourQ3 C$0.59 C$0.70 -