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Amaroq Minerals Ltd (AMRQ) reported significant operational and strategic developments during its Q1 2025 earnings call, highlighting a 51% increase in mineral resources at its Nallnak Gold Mine and plans for future expansions. According to InvestingPro analysis, the stock currently appears undervalued, trading at $1.08. With a beta of -0.09, the stock typically moves independently of broader market trends, making it an interesting diversification option. Despite these positive updates, the company’s stock saw a decline of 4.65%, influenced by broader market conditions and investor sentiment.
Key Takeaways
- Amaroq’s Nallnak Gold Mine resources increased by 51%.
- The company plans to extend the mine’s life from 6 to 10 years.
- Stock price dropped 4.65% following the earnings call.
- First revenues are expected in Q2 2025.
Company Performance
Amaroq Minerals showcased robust growth in its mineral resources, particularly at the Nallnak Gold Mine, which saw a 51% increase in resources and an extended mine life from 6 to 10 years. This positions the company as a significant player in Greenland, a region gaining geopolitical interest. Amaroq has also ramped up its processing capacity to between 220 and 300 tons per day, with plans to expand further.
Financial Highlights
- Cash balance: NOK 16.7 million
- Undrawn credit facilities: NOK 23.7 million
- Total assets: $252 million
- Equity ratio: 78.3%
- Metals inventory increased from $2.9 million to $7.8 million
- Capital assets increased by $22.6 million to $183.5 million
Market Reaction
Amaroq’s stock experienced a 4.65% decrease, closing at $1.08. This decline may reflect investor caution despite the company’s positive operational updates. Analyst consensus remains bullish, with price targets ranging from $1.11 to $1.68, suggesting potential upside. The stock has demonstrated strong momentum with a 24.64% return over the past year, though year-to-date performance shows a -15.69% decline.
Outlook & Guidance
Amaroq provided a gold production guidance for 2025, targeting between 5,000 and 20,000 ounces. The company aims to refine this range as operations stabilize. InvestingPro analysis indicates expected net income growth this year, with analysts forecasting positive earnings of $0.05 per share for FY2025. Additionally, Amaroq is exploring further licenses in rare earths, copper, and niobium, with phase two construction planned for Q4 2025 and full mine commissioning expected in 2026. Subscribers to InvestingPro can access 8 additional key insights and a comprehensive Pro Research Report for deeper analysis of AMRQ’s growth potential.
Executive Commentary
CEO Eldar emphasized Greenland’s strategic importance, stating, "Greenland is the last frontier within the Nordics." He also highlighted Amaroq’s position as one of the largest license holders in the region, reinforcing the company’s commitment to operational excellence: "Our main focus is to make sure everything works really well."
Risks and Challenges
- Geopolitical tensions could impact operations in Greenland.
- Fluctuations in gold prices may affect revenue.
- Potential delays in achieving full processing capacity.
- Regulatory changes in Greenland could pose challenges.
- Dependence on joint ventures for strategic growth.
Q&A
During the earnings call, analysts inquired about the expected timeline for revenue generation, to which Amaroq confirmed that first revenues are anticipated in Q2 2025. The company also addressed its conservative approach to commissioning, reflecting a cautious but optimistic outlook for future operations.
Full transcript - Amaroq Minerals Ltd (AMRQ) Q1 2025:
Ed Westrop, Head of BD and Corporate Affairs, Amarok Minerals: Everyone. Welcome to the q one twenty twenty five results for Amarok Minerals. I am Ed Westrop. I’m the head of BD in corporate affairs here. We’ll follow the usual form where Elder, our our CEO, will take us through the highlights, hand over to Ella for some financial highlights, and then Elder will take us through some of the operational detail before finishing off with the with the outlook.
James Gilbertson, unfortunately, isn’t joining us today because he’s actually in Greenland flying up to site at the moment. But so so we’ll miss him today, but he but he but he he’ll be with us later. So q and A wise, we’ll do the q and a at the end of the call. If you have any questions, use the q and a function at the top of your screen, and we’ll take those in order at the end once Elder’s finished the presentation. So thanks very much for joining.
Eldar, I’ll hand over to you. Please begin.
Eldar, CEO, Amarok Minerals: Thank you, Ed. Good morning, everybody, and welcome to the call. I want to start this meeting by reminding us on this Amrok Minerals strategy or the business unit. We have four units, which are Nalnak, which is our gold business. This is not only a mine that we’ve are now in largely built and are in construction and commissioning of.
It’s also an exploration unit where we’re building up a distilled scale gold theft. 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 Cadillac, 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 JCOM and Moor Capital, who has been now been with us for two season exploring for copper, nickel, and rare earth. Here, Amarok, both as a team and as a licensed holder, delivers its strengths, and then we can financially master alongside with us to support us in finding world class deposit. And this work has gone tremendously well.
In in Greenland, it is a country that is starting its development and mining. And therefore, services are something we’ve had to build up on our own. These are not only equipment. These are also skill set. Skill set in, for example, understanding how you import explosive into country, how you manage it, various different things.
So you can look at Ambroke 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. And within the service unit, we can then develop more projects, drilling, exploration, etcetera, etcetera, and 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 Israel, you need energy to power your mines, but also to process. This we know really well in the Nordic countries. Therefore, Amrok is developing alongside its mine hydroelectric energy potential where we can use the current infrastructure. So think of it as harbor roads, environmental port, and permit to invest in hydroelectric infrastructure to be able to lower all operating cost in the mine, and the same thing applies with our services. So 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, in country and in the Nordic Region.
Alec, CFO, Amarok Minerals: I can
Eldar, CEO, Amarok Minerals: 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 region 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’s being sought after by the world powers, being US, European Union, and the Nordics that wants to support Greenland in its development. And so 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. But someone needs to do this. Someone needs to conduct all of the work, and therefore, Amorg is actively looking at further license acquisitions within country to strengthen its position and to also support the powers to be to supply raw material to the market.
And 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 if we go to the next slide, please.
Alec, CFO, Amarok Minerals: So if we look a little
Eldar, CEO, Amarok Minerals: bit into the actual q ’1 and and how that relates to what we are trying to achieve on the kind of larger scale is that we have now, last year, constructed largely the Nallnak 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. So the skill set that we are gaining and building on is is is a huge value for the shareholders of Amur. The conversion and commission here has been continued. We did experience some weather issues during the winter as many other companies in the Arctic.
However, we also have a lot of learnings, and and and what did helped us is to think mostly on our kind of logistics and and other things in related to people. This is now being ramped up and and is is going really well. The key result we brought out in the quarter was a 51% increase in the nylon mineral resource. This is we had a six year mine life. We now have a ten year mine life.
And, also, we increased the grade within the resources. So what we are seeing is that we this is our key. The number is to increase value within our portfolio and where you can actually put your finger on value in the portfolio at how long our mine life is. The mine operation and and ramp development has been going really well. As we said previously, we’ve been focusing on ramp development.
Ramp It’s to allow us to access the ore in mine in q one, and we blasted our first stopes 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 and are supporting of of our mine plan, and 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 that that can be an issue, but that is something we’ve now proven is is is is is looks very good. If we then look into kind of a going forward, we are seeing then we have more and more stopes 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 q two. We were have been we were running the plant mechanically mostly during q one, and we are now put finalizing all of the electrical skater system as well as water system that that was delayed. So we are seeing more and more ramp up.
We’re also seeing more and more operational excellence by our team, we’ve been manning our stations and and getting all the p teams up to stage. So we have been actually seeing both on the mining and ramp up up to 220 or 300 ton per day days where we are processing, which is a a very good result for us. The key here is that the mine works, the process and plan work. 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 wanna hand over now to Alec, our CFO, on the next slide.
Alec, CFO, Amarok Minerals: Thanks, Alec. So main movements in q one are, as before, related to an increase in capital assets in this quarter of 22,600,000.0, which stands at 183,500,000.0 at quarter end. And this is attributable to the Nylonock site as we continue to capitalize site costs in the quarter, and we’ll 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 $7,800,000 at quarter end compared to $2,900,000 at the end of twenty twenty four. 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 quartile cost of variance in capital assets and metals inventory. And 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 NOK 16,700,000.0. In addition to our undrawn credit facilities of 23,700,000.0, we have access to funds totaling 40,400,000.0.
Subtracting accounts payable of 17,000,000 gives 23,400,000.0 in liquidity as we’ve we’ve defined it compared to 50,500,000.0 at the year year end ’24. This is on the backdrop of a very healthy balance sheet with 252,000,000 in total assets on a 78.3% equity ratio. The last four lines are connected to our investment in the Cardak joint venture. CARDAQ’s cash balance sits at 4,400,000.0 at quarter end compared to 4,800,000.0 at the end of twenty twenty four. Amarok’s receivable balance from CARDAQ increased and amounts to 7,300,000.0 at quarter end.
As a reminder, this represents allocated G and A costs to manage the joint venture, and the balance will be converted to shares in in 2026. Other than that, there’s generally little activity in Gardek in q one. It’s a seasonal business where the focus is more on receiving and analyzing assays from previous year’s exploration activities and planning of the 2025 exploration program, which will take place in q two and ’3 this year. More on that later in the presentation. So back over to you, Antti.
Thank you, Alad.
Eldar, CEO, Amarok Minerals: You turn. Thank you. So return one page, please. So these are just starts to update the market here a little bit or or remind everybody our key metrics in Nanolac. So we have, as previously, that’s 484,000 ounces in resources.
This is an increase of 51% from our 320,000 ounces. So this is a huge milestone for us. We have a 30 gram per ton as a resource grade. Maiden indicated resource is now standing at 51 ounces. This is a a very positive step for us because maiden indicated resources, a part of or all of that will then be looked to bring to reserves.
This will strengthen our potential for liquidity and further debt finance to to to for for the company in the future if we so wanted to bring that onward. Our target and mining rate, as I said earlier, is 300 ton per day. We then we are working on long haul stoping method. We’ve said we have now gone on our first stopes. Our headcount is about 50 in Greenland, of which approximately 50% are Green Atlantic.
We the mine now has a ten year mine life, and we have our health and safety start is is very good. We had twenty seven hours of off time industry and and total man hours of ninety four thousand approximately for ninety five thousand hours. Turn the page, please. On the nonlack resource growth here on the picture of in the right, you can see where we are developing our maturity 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.
And they can both help us reaching our target in terms of throughput and ounce of total ounces produced in in the this year and and more importantly next year. But more importantly, they can also help us to expand our production and the resource base. And as you can see, we are developing upwards from mountain block, target block, and then downwards also in. And this gives us a huge potential, and 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 and and mapping of our our resources, but also extending the resources and being giving us opportunity to drill all year round to replace all re resources that we will then mine.
Go to next slide, please. There we are. For the 2025 program, as I said earlier, on the gold side where it’s the yellow licenses and yellow marks, that’s the gold regional belt. We will be focusing on majority of our resources at Nalna to grow, increase the resources there. We have resource drilling at Nalnak, which we drilled very successfully last year, is planned for this year as well.
And then in green, which is kind of a more longer term exploration, we have now undergone two years worth of exploration there. And and 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 the Joshua target North, and we sampled Ukulek. Ukulek is amongst the most promising copper deposit that we have. It’s early stage.
But what we are learning is that there is some epithermal porphyry system in this copper belt. We received extremely high grade grab sample on surface in 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’s more potential for larger resources to sit there. We have employed Steve, Caroline to be our, main adviser 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 voice based out deposit. We did six holes this year. We found similar similar mineralization as we’ve found in our mid first hold this year. Of that mineralization was not that economical grade even though it was thick, but we are or or thick into session, I want to say. What what we are seeing is that we are trying to find the half of the system.
So what we did to do that or direct us to the half of the system is that we did downhole geophysics in those holes, which is suggesting that the half of the system is giving us more indication where that is. These are large scale project. They have large scale potential, and we again, we’ve just throughout the surface here, but we’re getting tremendous success here. And to put this into perspective, Boshi Bay in Canada, I think they had more than 200 holes drilled before they declared larger resources on the on the whole system, and and the deposit or the massive sulfur were only found in the eighth or ninth hole. So this takes a little bit of time, but we are checking the boxes and getting all of the right elements there.
And we are finding similar system elsewhere. We are also applying for new licenses in the in Glu there, both in rare earths. And these rare earths are the Carver intrusion. So these are very similar outcrops to Tampere’s and and these kind of a deposit. And so we will be exploring them on surface as well as in other places in Greenland, niobium, rare earth, and copper in Minoturn.
So we can see that and we have been fortunate to apply and build up this resource base ahead of other operators because most of these areas we’ve had managed to apply for license or or take all licenses before other parties are doing so, and but we see a lot of activity now in Greenland, and, therefore, we’re fortunate to have done that already. So 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 join 20 or secure more licenses to to further increase value for our shareholders. Next slide, please. So the outlook for the year is that we will build on the positive progress we’ve already had so far and improve continue improving our operations and and and activity construction activities in q two.
We will have some stoppages in commissioning and calibration and rotation that is all built in our schedule, and we feel very confident we will reach where our target is this year, which is 300 ton per day by by year end. And looking towards 2026, we then want to be in full fully commissioned mine. We are looking to finalize phase two construction p in q four, and our assessment continues to increase the throughput in the plant to 450 ton per day. This will allow us to utilize the same building and the same generator set up and buy these different things and install this 450 ton per day. And the aim here is to be able to then utilize the same cost cost base for more throughput now that we’re finding more and more resources.
We have good progress in our one megawatt hydro pro power project. We finalized the feasibility study for that, and and the focus is to have that finished by year end with a view that by end of twenty six, we could then be building this 2627, we could be building this hydropower plant. As a as a outlook for the year, we have given a outlook of five to 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. And, therefore, there is a potential to narrow this range as the year progresses, and and and we intend to do that.
We
Ed Westrop, Head of BD and Corporate Affairs, Amarok Minerals: are
Eldar, CEO, Amarok Minerals: in this position where gold price is is very, very strong at the moment. We can see that the outlook for gold price remains very strong with with the banks that we see as well as cost of oil and other things are are dropping down. So so 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 workplace in Greenland, and we have equipped ourselves to be able to be ready to take on, obviously, another like, other projects and develop more value for our shareholders using the know how that currently consist within the company.
And we see a lot of interest in supporting Amarop in its development going forward, which is a which is a great place to be for for our shareholders.
Ed Westrop, Head of BD and Corporate Affairs, Amarok Minerals: Okay.
Eldar, CEO, Amarok Minerals: And by that, I I will hand over to Edvestor. Thank you, Paul.
Ed Westrop, Head of BD and Corporate Affairs, Amarok Minerals: Thanks thanks very much, Alden. So if you have any questions, please use the top of your screen and the q and a function and 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?
Eldar, CEO, Amarok Minerals: 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. So once we full ramp up is achieved, the company will provide its outlook for the full year in in 2026. So we are we we’re trying to be in all of our messaging and all of our focus to be conservatives, and then that that is a key aspect here. And and 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 cost.
Ed Westrop, Head of BD and Corporate Affairs, Amarok Minerals: Thanks, Zelda. The next question comes from from Edison. You told us that metal inventory was $7,800,000. Can you tell us how many ounces that relates to, please?
Alec, CFO, Amarok Minerals: Well, the metals inventory is is accounted for at cost. So it doesn’t represent the mark to market value of the gold contained. So it is either the the the the cost of inventory or the value to be gotten from that inventory, whichever is lower. So this number is the cost connected to the to the inventory, not not the value of of the goals.
Ed Westrop, Head of BD and Corporate Affairs, Amarok Minerals: Thanks very much, Elliot. It looks like there’s no further questions in the line. I’ll I’ll I’ll give them another few seconds to see if there’s any other questions gonna come up. So as I said, please, if you have any questions, please type them in in the function at the top of the screen, and we’ll get to them. Okay.
There’s no further questions. But I would say to all all all 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?
Alec, CFO, Amarok Minerals: Well, we’ve already achieved, that in in q two. So so, yes, in once we have a quarterly for q two, we will see first earnings. Thanks,
Ed Westrop, Head of BD and Corporate Affairs, Amarok Minerals: Elliot. So thanks all for for listening to this call. Very much appreciate your time. As I said, if you have any further questions, please contact me offline, and and and we’ll help you as best we can. So thanks very much.
Again, we’ll be coming back in the next quarter of the the half yearly results in August. But until then, thanks very much. Have a good day.
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