From Developer to Gold Producer: Montage’s Next Move

0:16All right, everybody, welcome back into Mining Stock Daily. We are going to head back to West Africa here to talk about one of the really the highlights of the next gold producer out of the region. on the doorsteps of first production with Montage Gold. They do trade on the TSX with the symbol MAU and on the OTCQX with MAUTF. It's been a number of months, actually. Martino DeCiccio, CEO of the company, joining me today. I don't think we've actually chatted this year. Martino, if we have, it was earlier in the year. I hadn't gone back to my records. But it's a pleasure to have you back on because the remainder of 2026 really is going to be an incredible catalyst for the company in the next stage for Montage.

1:05So thanks so much for spending some of your time with us today. Well, thanks, Trevor, for hosting us. It's definitely been a busy year thus far. We're very excited to be closing in on the first GoldPour. Yes, you are very close. I think the last time you and I chatted, we talked about Kone being a construction story. That construction is almost complete. Now you're talking about year-end, first gold, while at the same time, Montage has added Didievi. You've advanced Wende. You've also moved into Mauritania. Has the investment thesis already shifted from the build Kone story to what's next? What can we build around Kone?

1:53Is that what's happening? So we've been executing on our strategy. So we joined Montage in early 2024 to create a multi-asset company focused on Africa. So the first priority was to get Kone funded, permitted, and into construction. So that's been going well. And because the build of Kone has been going so well, we've been able to focus on building out the rest of the portfolio. So today, beyond the KONE project, we have the DDV project that we're currently working on. There's 85 ,000 meters of drilling going on this year to be able to increase the resource base. Then through the regular granting process, we got awarded the Wenday permit in Cote d 'Ivoire, followed by permits in Mauritania.

2:43So we're very pleased to be executing on the strategy that was set almost three years ago today. You're now more than 80 % committed on the upfront capital. The major infrastructure required for that oxide circuit at Conate basically looks like it's essentially complete. Dry commissioning has began. So what are those two or three things between today and maybe that first gold that can maybe still meaningfully affect or impact your schedule? Do you see anything on the horizon there? Well, we started mining in July, so about a month ago. So that's been going well. All the key infrastructure has already been completed.

3:28So now it's left to, you know, electrical piping and commissioning. So it's exciting times on site as we speak with the first gold pour planned for the fourth quarter of this year. yeah uh that's going to be from the oxide circuit correct yes correct so the addition of the oxide circuit allows us to bring production forward uh so initially we're planning to pour gold in q2 of next year we've been able to pull that forward by about six months by adding an oxide circuit what this does is it allows us to mine and process the oxides up front rather than mining the oxide stockpiling them and then blend them through the heart circuit at a rate of five to five to seven percent per year so this lowers our working capital working capital requirements brings production forward benefits from the higher gold price environment and of course we're eager to start increasing increasing our exploration activities post first gold pour and looking beyond that with the next build, with DDV, all while looking to quickly reduce our debt and look to build a story that's able to allocate capital to all the key buckets.

4:51All right. Walk us through a little bit, if we can, walk us through a little bit more of the economic decisions of bringing that oxide circuit pour as forward as quickly as possible. does that generating cash from that oxide material does it dramatically change how you manage the remaining construction and ramp up for KONE plus the expiration results or is this always kind of been a part of the plan study as she goes what it does is it lowers our peak funding by about 100 million so between finishing the oxide circuit and finishing the full build with the with the hard circuit it's a 100 million dollar gap which means that we can use cash flows to then fund the rest of the build well rather than potentially drawing down the last that facilities it means that being in production sooner allows us to reuse that cash obviously to try and create more value for shareholders quicker okay one thing that might be interesting when the project was financed, KONE looked geologically different than it was now.

6:03I think it was a while back you did report a new resource estimate. You're taking that higher grade satellite M &I resource from just about half a million ounces to 1.7 ounces at one and a half grams. How much of that can realistically change that first five years of the mine plan rather than simply just extending the mine life here, Martino? Yeah, the impact is obviously quite meaningful. The overall resource, if I look at M plus I plus I, has increased from 5 million ounces to almost 8.5 million ounces. So we're currently working on converting that inferred material to indicate it as well, which eventually will be converted to reserves and into a new mine plan.

6:49Beyond that, we're still drilling. I mean, this year we're drilling 130 ,000 meters. That's up from the initial budget of 90 ,000 meters. So we expect, you know, the current resource has already grown and we expect to continue to grow it. But as you mentioned, the important is not only growing it, but increasing the grade profile. So all the new discoveries we've made are at least 50 % higher grade than the reserve grade we started with with the coin deposit. So our goal is to displace the lower grade ounces and bring in the higher grade deposits up front. So to reflect on your question, rather than having the first eight years average 300 ,000 ounces per year, we see potential to boost meaningfully the production profile with a target of having at least 350 ,000 plus ounces over at least 10 plus years.

7:43I mean, it's just kind of fascinating. You got to the point already, Martino, where you haven't, you're yet to have your first gold port, but you're already having to think about replacing depleted ounces and doing so either by scale or by grade. I mean, that's just a fascinating story as you are, like I said, knocking on the door of first construction. But you have to think, you know, months if not years down the pipeline. I mean, is this a strategic, I mean, this has to be somewhat of a, is it a hard shift for you and the team to kind of think knowing it's taken a number of years just to get to this point?

8:16So if I backtrack a little bit, you know, the reason that we joined Montage at the beginning of 2024 is because we identified an asset that we can move quickly into construction and production. that has already a low-cost profile, but most importantly, that has exploration potential. So at the time, there was only two deposits in. We had identified the potential to increase the size and add satellite, high-grade satellite deposits. So we went from two deposits to 12 deposits. Those are growing in scale, and we're making new discoveries on the property as well. So it's a quite unique position to be in, to be able to build and explore at the same time.

8:55but given the team that we brought onto montage, that was the goal from the get-go, to be able to create value with a two-fold approach of de-risking it through a build and being able to add ounces while we're building so that once we're in production, we have a significantly different asset than what we started with. Right, absolutely. All right, can we move on to Didier, because I think this is obviously one of the next chapters of montage because I think it's one of the most important changes to the story. You acquired this project with just under a million ounces at two and a half grams. You've already extended Blafogueto beyond 1.3 kilometers of strike, and you're now drilling over 60 ,000 meters.

9:40So what does Didierie have to become before you are willing to make this the next development decision here? What's that timeframe look like? Yeah, well, look, if I backtrack a little bit, We know the assets very well because in April of last year, Montage took a 20 % stake in African gold. But the uniqueness of that deal was that we negotiated operatorship. So it was the Montage team that was exploring the asset and managing it in country. So the resource doubled to a million ounces at two and a half grams by June of last year. On the back of that, a 40 ,000-meter Joule program was launched, and the Joule results were coming back quite interesting.

10:31So by year-end, we had enough confidence in the asset to weren't launching a full offer for the remaining 80 % stake in the company that we did not own. So the transaction closed in April of this year. as soon as it closed we launched a 65 ,000 meter drill program so about 85 ,000 meters is being drilled this year so in our in our minds you know we identified an asset that we believe has standalone potential and we believe has the skill necessary or the potential to have the skill necessary to warrant launching a construction so in the back of our minds and we're gearing up to be able to move our construction team and equipment because we're in our mining so we bought our self-performs we bought all the equipment so the idea is to transition the team and the equipment from one build into the next so we're still working on obviously increasing the scale of the asset we're also working on the environmental study and permitting so that we're able to quickly fast track this asset into into development do you have any sort of kind of timeline of what that looks like here, Martino?

11:46I think a lot of shareholders would be really interested in what maybe that pie in the sky looks like. Yeah. Well, look, you know, if I would have given you my expected timeline for Kone when we joined, I don't think you would have believed me. So I'm not going to start arm-waving a timeline on DTV, but, you know, safe to say that we're moving as fast as we can. Well, I think it's fair to say you and I have had these chats once or twice a year for the last couple of years, Martino, and you've basically been right on schedule. If not, it's been expedited. If I may editorialize and say myself, you're doing a fantastic job with KONE.

12:23But the DDFV is like, look, it doesn't necessarily feel like, can you say you replicate KONE with this project? Or it seems like a completely different kind of mind strategy. It's very different. So at Kone, we started with the Kone deposit. So that's four to five million ounces, lower grade versus circa one gram for the first eight years, but low strip as well, one to one strip ratio. And the benefit was having all these other satellites that are higher grade to give scale. So to do that, we had to build 11 million ton per annum plant to be able to have economies of scale, et cetera, et cetera.

13:08ddv what's interesting is you know it's it's in the montage portfolio but it's it's a completely different asset than than cone this we're talking here uh significantly higher grades at two and a half gram open pitable it would rank as one of the highest grades open pits in the world right now and we see potential to continue to increase the ore body, both at depth and laterally. On top of that, African Gold had already published on other targets that existed on the property. Not much drilling has gone into it, but the goal for us is first increase the scale of Blafogeto and then be able to start to look at and drill out the other targets as well to have the same approach as KONE with one deposit and multiple other smaller satellites around.

14:03But the key difference here is that at KONE, we're focused on big focuses on the satellites to get that grade profile, whereas with this asset, the main ore body is already very rich. So we need to increase the scale of that first ore body as a priority before looking at the satellite targets around. Given the higher grade nature, it means that we would expect the DDV project to be lower capex, smaller plant versus cone A and sizable production profile given the grade profile. Yeah. A technical report as far as mineral resource, updated mineral resource or like an economic assessment on DDV, is that something that's in the works for 2027 perhaps or what's the game plan there for reporting?

14:50Yeah, correct. So look, we're drilling as we speak, and the goal will be to have an updated resource by late this year or into early next year. We are already working on everything to DFS standards, so the metallurgy, geotech, etc., so that we don't waste time having to just do a little bit and then go back to it to DFS standards. So, you know, we're already doing the work with the intent that, you know, the goal is to eventually build it. And therefore, we need data as robust as possible day one. So we're looking at infrastructure layout already. We'll have to start doing some condemnation drilling later this year, et cetera, et cetera.

15:32As I mentioned, we launched an environmental study late last year because you need 12 months of data. So we don't want anything to be a bottleneck into the potential development of DTV. And as for a study, correct, we would expect a study to be published at some point next year. Okay. Well, for those listening, maybe for some reason, KONE is not enough, DDAV is not enough. We got one more for you. Let's talk one day. This is obviously a little bit earlier stage, Martino. But it was ground awarded late last year. But you quickly turned around and confirmed mineralization. and I think you've even mentioned a potential maiden resource here at Wenday eventually.

16:16So how do you rank the return on capital from something like Wenday versus buying another advanced project in today's gold market? Return on capital seemed like 100%, right? It's because it was awarded. Look, at the end of the day, I think it's a question for shareholders of how do you value optionality, right? You look at a company, it's quite easy to look at a technical report and put an NPV value and then decide whether you want to put a discount or a premium and assume that's your target price. But then for some more sophisticated shareholders, you tend to look at what is the optionality. At this time last year, we only had Kone you pass forward one year later we have Kone, DJV, Wendee and Mauritania we believe that DJV was a very creative transaction Wendee, I mean this is the optionality of having a well-regarded team that smaller companies want to partner with but it goes beyond that if we do the right things in country where we do what we say We explore, we build, we employ over 95 % nationals, et cetera.

17:39What that leads to is other countries taking note as well. So the current host country we're in, Cote d 'Ivoire, saying, well, you've done such a good job. You're able to unlock value for all stakeholders. Here's more permits. So we're able to get the one-day permit to the regular granting process in Cote d 'Ivoire. we have a strong team in in in the country strong knowledge of you know what's interesting what's interesting grounds in the country and similar to when we were in our previous employers we found through the you know organic pipeline through exploration efforts we found the the figure deposit and the being built and then as if and that's how you create lots of value when rather having to acquire you're able to find it organically of course that takes more time and therefore for us first we bought ddv and then you know building out the expiration pipeline uh and so that that was the case for cote d 'ivoire and that was the case as well for mauritania where uh through a tender process we're able to apply for uh over 2 000 square kilometers of land package now going back to to your initial question on d on wendy and we're we're very excited with one day because it's not so greenfield.

18:58There was already 60 ,000 meters of drilling that occurred on the property historically. So we're now following up on the previous drill results. We put an additional about 10 ,000 meters of drilling since the beginning of the year. And based on all the data we see, we have strong confidence that this drilling plus upcoming dual programs will yield a material resource. And that's more than you can say for many properties that are less than six months in your portfolio, right, that you got from the granting process. So we're looking to also fast track the one day exploration to be able to show that we have potentially a third project in the pipeline that was found through our ability to stake and explore grounds.

19:52So there's a lot to manage here, a lot to juggle, but being so close to real cash flow, which very few people in this industry actually get to achieve here, but you're there. how disciplined do you have to be about spreading the company too thin? Is that something you, how do you manage that? What's that filter that determines whether money goes into perhaps more exploration or anything, something new here, Martino, you know, that this is, you're talking about capital allocation, something you have to be very mindful here in 2027. Well, I have to say it's, it's a little bit the other way around where when we joined Montage back in early 2024, it seemed a little bit, you know, odd feeling to only have one asset in the portfolio.

20:44Since, you know, since I've been working, you know, starting in 2006, we've always had a portfolio of four plus minds, two to four projects in the portfolio. And the team that we brought on board to montage was used to managing multiple assets in multiple countries so you know you see the results you know putting all our heads into one project managed to you know fast-track that and then it's just a question of being prudent how you allocate capital but also human resources so we wanted to first solidify our presence in Cote d 'Ivoire so we did that we We consolidated grounds around Kone. We've got other exploration properties in Cote d 'Ivoire, and we bought African gold with the DDB project.

21:34So this means that we're able to utilize the same teams. Our regional office is in Abidjan. All the skill sets we have, all the people are in Abidjan between finance, procurement, exploration projects, et cetera. So it was very easy and quick to be able to integrate more assets in that one country. Then, you know, we need to be very selective where we expand our footprint to. In Guinea, we did that through partnership with taking a 20 % stake in Sanyu. And in Mauritania, we went in directly. And I have to say, I mean, there's history there with Mauritania. Our key shareholder was one of the large shareholders in Redback Mining that built a Tazias mine before being acquired by Kinross.

22:23Our CFO worked for Kinross for a 15-year period, being the regional CFO, and under his leadership was the asset in Mauritania. So, you know, there is a coherent strategy around, you know, how we prioritize assets. So we did a screening of the geological potential and our ability to move quickly and identify great opportunities with those few strategic moves that we've done. I do want to ask you about valuation here, currently sitting about a$7.5 billion Canadian market cap. Montage has spent the last couple of years really removing those obvious risks from KONE. Financing hasn't been an issue.

23:17construction right on track, if not expedited, resource growth, project pipeline. It's all there, Martino. I mean, incredible execution. The market stops value, but once you kind of start producing gold, a lot of times the market stops valuing you as a developer and starts judging you as an operator and capital allocator. So this maybe goes back to this prior question, but But what do you think Montage has to prove in the next 12 to 18 months for that transition to create even another leg higher for shareholder value rather than just becoming, you know, the next, you know, gold producer on the market?

23:56Yeah. Look, I think it's natural to look at a share price chart and, you know, you see where we started two years ago. You see where we are now. Of course, the share price has re-rated. But there are many reasons for that. Of course, the gold price has increased, but outside of that, we've been de-risking our project by building it successfully. We've increased the quality of the asset by bringing other higher-grade deposits in. And now we're almost at the finish line, about to transition to cash flowing. And above that, we've added other assets that were very value-accretive. So when I look at the history and where we expect to be, I'd say that, you know, job's not done yet, right?

24:44So we continue to expect a strong re-rate based on a number of factors. I mean, we've seen many companies in our situation that, you know, re-rated a little bit before, but really it's when they started to produce cash flows and start to allocate that to dividends, buybacks, you know, reinvesting in the business, etc. that that's when you've seen the the second leg of the rewrite there's examples close to home such as lending gold that's you know we have the same common common shareholders common directors etc outside of that there's other examples I take you know G mining I think I've done a good job bringing an asset from development to production and then looking to continue to to build I I look at Artemis, where we also have common director with Jeremy Langford, who did a great job bringing assets from development into production.

25:40And you see that we're in a market where investors are looking for 300-plus thousand-ounce producing companies. And when you create an asset of scale, such as Kone, there's not that many out there, and that attracts a different class of investors. So today, the way I would view ourselves is we're either starting to be a well-valued developer or one of the cheapest producers out there. And that's exactly where you would expect the stock to be because we haven't yet finished to fully de-risk the asset because the last step missing is to show to the market the free cash flow profile. and then once we show that you have the other cows coming in with increased production profile through a new life of mine new discoveries coming in on Kone and then you start to direct the next attention to the next asset with DDV Martino if I may say in the conversations you and I have had over the last few years I've always found you uniquely and quietly confident now that you are like at the precipice of real production of gold?

26:54How are you feeling now? Is it, are you nervous? I mean, I know you're still confident, but like what's going on, if I may ask, you know, like what's keeping you up at night here? Or is nothing keeping you up at night? I mean, work continues, right? We came in with a strategy and we're executing against that. So, you know, I've been with companies that have started small and grown into one of the larger producers in the area. We've seen what's required at companies at every step of their evolution. So we're able to plan. The best way to be calm and collective is to know where you need to go and know what skill sets are required within the company, who are the people required to be able to achieve success.

27:42So we're very pleased to be executing against the plan that we set out. you always wish you can go faster, but when you take a step back, you realize that a lot has been achieved thus far, but there's also still a lot that remains to be achieved. So when you ask me, what's our headspace at? In my mind, the team is doing a great job advancing the KONE project with its development, construction, and exploration. And that allows us to look at the future. So a lot of efforts internally are now oriented towards the next project with DGV and looking at building out the future with Wendy and eventually Mauritania.

28:26So as long as the business is doing what it should, it allows us to be able to think strategically. Very good. All right. Martino, thanks so much for your time. Always a pleasure to have conversations with you from every once in a while, at least once a year, we get to make this happen. And it's an important year, an exciting couple of weeks and months ahead for you. Montage Gold trading on the TSX with MAU and on the OTCQX with MAUTF. Martino will be seeing you around some of these conferences here this fall. Thanks for your time again. Great. Thank you for hosting us. The information presented should not be considered investment advice.

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