AGI Greenpac Ltd (NSE: AGI) Q2 2025 Earnings Call dated Jul. 31, 2025
Corporate Participants:
Unidentified Speaker
Scott Parsons — Senior Vice President of Corporate Development & Investor Relations
John A. McCluskey — President, Chief Executive Officer & Director
Luc Guimond — Chief Operating Officer
Greg Fisher — Chief Financial Officer & Corporate Secretary
Analysts:
Unidentified Participant
Cosmos Chiu — Analyst
Don DeMarco — Analyst
Ovais Habib — Analyst
Presentation:
operator
Good morning. I will now turn the call over to Scott Parsons, Alamos Senior Vice President of Corporate Development and Investor Relations. Please go ahead.
Scott Parsons — Senior Vice President of Corporate Development & Investor Relations
Thank you Patrick and thanks to everybody for attending Alamos second quarter 2025 conference call in addition to myself, we have on the line today John McCluskey, President and Chief Executive Officer, Greg Fisher, Chief Financial Officer and Luke Guimond, Chief Operating Officer. We will be referring to a presentation during the conference call that is available through the webcast and on our website. I would also like to remind everyone that our presentation will be followed by a Q and A session as we will be making forward looking statements during the call. Please refer to the cautionary notes included in the presentation, news release and mda, as well as the risk factors set out in our annual information form.
Technical information in this presentation has been reviewed and approved by Chris Boswick, our Senior vp, Technical Services and a qualified person. Also, please bear in mind that all of the dollar amounts mentioned in this conference call are in US Dollars unless otherwise noted. Now John will provide you with an overview.
John A. McCluskey — President, Chief Executive Officer & Director
Thank you very much Scott and good morning everyone. Draw your attention to Slide 3. Second quarter production totaled 137,000 ounces in line with quarterly guidance and up 10% from the first quarter, reflecting stronger performances from all three operations. With a further increase in production expected in the second half of the year, we remain on track to meet our full year production guidance. We’ve been providing guidance like this for a very long time. We take it very seriously. We put a lot of effort into coming up with these numbers and we’re very confident in our forecast.
The stronger operational performance contributed to an 18% reduction in all in sustaining costs compared to the first quarter. Costs are expected to decline further in the second half of the year as production continues to increase driven by higher grades and tons processed. In mid July, the Island Gold mill was shut down with a higher grade underground ore now being processed within the larger and more productive Magino mill. This transition will allow us to start realizing significant processing cost synergies at the Island Gold District for years to come. With the stronger production, lower costs and higher gold prices, we realized record revenues and cash flow from operations.
We also delivered strong free cash flow of $85 million while funding our growth projects and exploration programs. At current gold prices, we expect strong ongoing free cash flow while reinvesting in our high return growth projects that will support further free cash flow growth. As a result of higher than budgeted share price compensation and royalty expense through the first half of the year and a slower start at Magino and Young Davidson, we are revising our 2025 cost guidance full year all in sustaining costs are expected to be 12% higher than our original guidance with approximately 40% of that increase attributable to external factors.
From a cost perspective, our first half performance was not reflective of our long term track record of meeting or exceeding expectations, nor is it reflective of our strong outlook. We expect a significant improvement in both production and costs into the second half of the year. That trend of growing production and declining costs expected to continue over the next several years anchoring one of the strongest outlooks in our sector. Turning to slide 4 a key driver of that strong outlook is our expanding Island Gold District. During the quarter we released the base case life of mine plan for the Island Gold District integrating the Island Gold underground and Magino open pit operations as outlined in the study.
The Island Gold District is expected to become one of the largest, lowest cost and most profitable gold mines in Canada. The base case life of mine plan was prepared using mineral reserves only. An outlined average annual production of 411,000 ounces at mine site, all in sustaining cost of $915 per ounce over the initial 12 years. As a base case, this is a very attractive operation and we believe there’s a significant upside to come. Turning to Slide 5, an expansion study is currently underway and is expected to outline an ever larger and more profitable operation. Our base case plan is based on combining milling rates of 12,400 tons per day.
Within the expansion study, we expect to be evaluating an expansion to 20,000 tons per day which we expect to support higher mining rates from the underground and the open pit. Additionally, through ongoing infill drilling, we expect to incorporate a larger mineral reserve through the conversion of a significant portion of the 5 million ounces of resources not incorporated into the base case. The expansion study remains on track for completion during the fourth quarter of this year. There is also longer term growth potential beyond the expansion study and is expected to the outline support Significant increase near mine and Regional exploration Late in the second quarter we provided an exploration update that demonstrated the potential across the Island Gold District.
Recent drilling continues to extend high grade mineralization across the island gold deposit as well as within several hanging wall and footwall structures. Turning to Slide 6 the Regional Exploration program has also been successful in intersecting high grade gold mineralization in proximity to past producing mines including Klein, Pick and Edwards mines. Some of those highlights include drill holes grading 8 grams per tonne over 21 meters, 19 grams per tonne over 5 meters and 56 gram per ton over 2 meters. The early results have been impressive extending high grade mineralization beyond the extent of historic mining. These targets are located within 7km of the Magino Mill and represent opportunities for additional high grade mill feed with a larger mill expansion.
They also highlight the significant potential we see across our 60,000 hectare land package within the underexplored Mitchpeikoten Greenstone Mill. Our portfolio of high return projects supports one of the strongest growth profiles in in the sector. We expect steady growth and declining costs over the next several years driven by the completion of the Phase 3 expansion. Towards the latter part of 2028, we expect Lynn Lake to take our consolidated production rate to over 900,000 ounces per year at well below industry average, all in sustaining costs. Longer term, there’s excellent potential to increase production to approximately 1 million ounces per year through a further expansion of the Island Gold District.
We expect to outline this upside in the expansion study that we will release in the fourth quarter. Turning to slide 5 pardon me, turning to slide 8 we expect strong ongoing free cash flow while funding this growth. Following the completion of the Phase III expansion, we expect to generate even stronger levels of free cash flow starting next year. This growth is expected to continue with the completion of our PDA and Linn Lake projects such that at current gold prices we expect our annual free cash flow to exceed $1 billion. I’ll now turn the call over to our CFO Greg Fisher to review our financial performance.
Greg Fisher — Chief Financial Officer & Corporate Secretary
Thank you John. On to Slide 9. We sold approximately 135,000 ounces of gold in the second quarter at an average realized price of $3,223 per ounce for record revenues of 438 million. The average realized price was below the London PM fixed price for the quarter, primarily as a result of delivering over 12,300 ounces into the gold prepayment facility based on a prepaid price of $2,524 per ounce. We will continue to deliver the same quarterly number of ounces in into the facility until the obligation is completed by year end. As a reminder, the prepaid facility was executed in July 2024 with the proceeds utilized to retire 180,000 ounces of forward sale contracts inherited from Argonaut Gold across 2024 and 2025.
With an average price of $1,840 per ounce, total cash cost of 1,075 per ounce and all in sustaining cost of $1,475 per ounce decreased 10% and 18%. Respectively from the first quarter. Costs are expected to trend lower through the remainder of the year as production increases driven by higher grades and tons processed. Our recorded net earnings were 159 million in the second quarter or 38 cents per share. This included 17 million of unrealized losses on commodity hedge derivatives net of tax, 34 million of unrealized foreign exchange gains recorded within deferred taxes and foreign exchange laws and other adjustments totaling 2 million. Excluding these items, our adjusted net earnings were 144 million or $0.34 per share. Operating cash flow before changes in non cash working Capital was a record 233 million in the second quarter or $0.55 per share.
Capital spending totaled 115 million and included 34 million of sustaining capital, 72 million of growth capital and 10 million of capitalized exploration. FreeCastle for the quarter totaled 85 million, a significant increase from the first quarter driven by strong contributions from all three operations. This included 55 million from the Mulattos district, 52 million from the Island Gold District and a record 59 million at Young Davidson. Following the release of our first quarter. Results, we were active on our share buyback, repurchasing 400,000 shares at a cost of 10 million including our quarterly dividend of 11 million. We returned 21 million to shareholders in the quarter. Our cash balance at the end of the second quarter grew to 345 million and combined with the undrawn balance on our credit facility, Our total liquidity is 845 million. With production increasing and cost decreasing through the remainder of the year. Supporting strong ongoing free cash flow, we are well positioned to internally fund our growth plans. Moving to slide 10 as John outlined earlier on the call, we have increased our full year cost guidance.
This reflects higher than budgeted share based compensation and royalty expense through the first half of the year as well as. A slower start to the year. At Magino and Young Davidson, full year total cash costs are now expected to be between $975 and $1,025 per ounce and all in sustaining costs between $1,400 and $1,450 per ounce. This represents a 12% increase in all in sustaining cost guidance with approximately 40% of the increase attributable to external factors. This included the revaluation of previously issued shareholders based compensation given the significant increase in our share price during the first half of the year and higher royalty expenses given the sharply higher gold price. Consistent with our updated guidance, we expect a significant improvement in our costs in the second half of the year.
We expect costs to continue to trend lower over the next several years driven by low cost production growth. I’ll now turn the call over to our coo Luc Dimont to provide an. Overview of our operations.
Luc Guimond — Chief Operating Officer
Thank you Greg over to Slide 11. Production from the Island Gold District totaled 64,400 ounces, a 9% increase over the first quarter driven by higher combined milling rates from the Island Gold and Magino Mills. Production is expected to increase further through the remainder of the year, reflecting higher mining and processing rates. Island Gold delivered a strong quarter with both underground mining rates and grades in line with annual guidance. Magino’s mining rates averaged 13,700 tons of ore per day in the quarter, a 16% increase over the previous quarter. Mining rates are expected to increase in the second half of the year to be consistent with annual guided levels of 14,800 tons per day.
Costs declined slightly from the first quarter with a more significant significant decrease expected in the second half of the year. This is expected to be driven by higher milling rates within the Magino Mill and increasing underground mining rates at Island Gold Mine site. Free cash flow increased to 52 million, more than double the first quarter, an impressive performance given the ongoing reinvestment in growth through the Phase three plus expansion and a significant exploration program. The Island Gold District remains well positioned to self fund its expansion plans with significant free cash flow growth expected from 2026 onwards.
Moving to slide 12, the performance of the Magino Mill continued to improve during the quarter with milling rates increasing 18% from the first quarter to average 8,500 tons per day. Following the installation of a redesigned liner and bolt configuration within the SAG Mill earlier this month. Throughput rates have steadily improved to average approximately 9,500 tons per day in the second half of July. We will remain on Track to reach 11,200 tons per day later this quarter, reflecting the improved performance of the Magino Mill, the Island Gold mill was shut down mid July and underground ore is now being processed within the larger and more productive Magino mill.
Since the introduction of higher grade underground ore, the mill has performed well with recoveries from the blended ore consistent with expectations. Moving to slide 13 the phase 3 + expansion continues to progress well with the shaft sink currently at a depth of 1,265 meters representing 92% of its ultimate planned depth. The remainder of the shaft sink is on track for completion in the fourth quarter of this year. Other progress during the quarter included completing cladding and roofing for the bin house, advancing work on the Pace plant which is now 70% complete, and completing bulk earthworks for the administrative complex and the mill expansion to 12,400 tons per day.
Lateral development also continued to advance which is expected to support higher mining rates later this year and following the completion of the overall expansion over to slide 14, work is also underway on the evaluation of a larger expansion of the mill beyond 12,400 tons per day. Detailed engineering for the larger mill expansion is ongoing and expected to be completed by early 2026. To support a potential larger expansion, the earthworks for the new mill building was sized with a footprint that can accommodate an expansion up to 20,000 tons per day. The new building will be configured to allow for additional leach tanks as well as a second sag and ball mill, all of which can be sized to support increased processing rates of up to 20,000 tons per day.
The larger mill is expected to have a parallel circuit dedicated to processing a higher grade blend of underground and open pit ore. Given the increased capacity, a larger expansion is expected to allow for higher underground and open pit mining rates. We look forward to outlining the upside potential within the expansion study later this year. Over to Slide 15 as of quarter end, we spent and committed 79% of the total Phase III expansion capital of $835 million. The expansion is expected to be completed in the second half the of of 2026. It will be a significant driver of low cost production growth and free cash flow generation.
Over to Slide 16 Young Davidson produced 38,700 ounces, a 9% increase from the first quarter with further improvement expected in the second half of the year driven by higher mining rates and grades. This is also expected to drive costs lower compared to the first half of the year. Mining rates improved over the first quarter but were lower than targeted levels. Higher than average snowfall and precipitation earlier this year led to a significantly higher than normal spring melt. This resulted in the increased inflow of groundwater into parts of the underground mine. This impacted the ability to skip ore to surface resulting in nearly one week of downtime in May.
Additionally, mining rates were impacted by power outages caused by storms in the region. Managing groundwater is a normal part of operating an underground mine. The increased inflow in the second quarter and resulting downtime was the first occurrence in 15 years of operating Young Davidson through enhanced regional watershed management practices and increased pumping capacity. This is not something we expect to recur in the future. Mining rates are expected to improve in the third quarter following a planned five day shutdown for rope changes in the Northgate shaft that was completed in July. We expect a further increase to targeted levels of 8,000 tons per day in the fourth quarter.
Grades mined and mill were consistent with the low end of full year guidance. Grades mined are expected to be at similar levels in the third quarter but increase in the fourth quarter reflecting higher milling rates through the remainder of the year and higher grades in the latter part of the year. We expect a much stronger second half. Young Davidson generated record mine site free cash flow in the quarter of 59 million and 98 million in the first half of the year, putting the operation on pace for another annual record in 2025. Over to Slide 17.
The Mulattos District delivered a solid quarter and achieved a significant milestone producing its 3 millionth ounce of over its 20 year history in operation. With at least another decade of production defined within PDA and a number of other emerging opportunities for higher grade ore within the district, we expect more milestones to come. Production during the quarter totaled 34,100 ounces, a 12% increase over the first quarter reflecting higher grades stock. Further increases in quarti production are expected as a significant portion of the higher grade stock in the second quarter will be realized over the second half of this year.
Cost decreased 18% compared to the first quarter with a further reduction expected in the second half of the year. Lattice remains well positioned to meet its production and cost guidance for the year. EDA development continues to advance with a focus on detail engineering during the second quarter. Spending will accelerate in the second half of the year with the commencement of underground development and placement of long lead time orders for the mill. The Mulados district generated mine site free cash flow of 55 million in the second quarter with stronger free cash flow expected in the second half of the year driven by higher production and lower costs.
The operation is well positioned to continue generating strong ongoing free cash flow while funding the construction of pda. With that I will turn the call back to John.
John A. McCluskey — President, Chief Executive Officer & Director
Thank you Luke. Our operations demonstrated a significant improvement in the second quarter. We expect this trend of growing production and declining costs to continue into the second half of the year. And over the next several years. The Island Gold district will be a key driver of this improvement. Transition of processing High Grade island or within the Magino Mill was one of the last key steps towards integrating the operations and realizing significant cost synergies going forward. I’ll now turn the call back to the operator to open the call for your questions.
Questions and Answers:
operator
Thank you. We’ll now take questions from the telephone lines. If you have a question, Please press star 1. You may cancel your question at any time by pressing Star 2. Please press Star 1 at this time. If you have a question. There will be a brief pause while the participants register for their questions. Thank you for your patience. The first question is from Ovais Habib from Scotiabank. Please go ahead.
Ovais Habib
Thanks. Operator. Hi, John and Alamo’s team. Really great to hear that Magino Mill is ramping up and that island gold ore is being processed at Magino. John, a couple of questions for me. The first one, it was widely expected that you would increase the ASIC guidance. So glad that’s out of the way. And I’m glad you maintained the production guidance as well. John, you know, I’m getting a lot of questions on this. So I just want to make sure that I’m asking this on this conference call. How confident are you in meeting the production guidance comfortably and what levers you have within your portfolio to make sure the production guidance remains on track?
John A. McCluskey
Let me put it in this perspective. Ovais. I’ve been the CEO of the company since 2003. I’ve participated in close to 90 quarterly calls. We’ve been giving guidance all along. Starting from the time when we were trying to get the mine built, which we managed to achieve the first mine mulatto. So we achieved it in record time and brought it in on budget. This was in 2005. Very, very difficult time in the market. And we were operating those days in a wing and a prayer. And we’ve been giving guidance all through that period. And we are remarkably accurate over that period of time.
You can check it out for yourself if you look for 14 consecutive quarters up to Q1 of this year. We basically either met or we beat our production and cost guidance. So here we are. We got off to a slow start this year. We had very difficult conditions in Canada this year that affected both our operations at YD and Island Gold. But we got through. Has had an impact on our Cost guidance for this year. We just won’t be able to catch up from a cost perspective to met our cost guidance. And so we revised it. But with respect to production, we’re very confident. We’re very confident. We would not have reiterated guidance. If we did not have that type of confidence. I mean, we revised costs. We could have just as easily revised production guidance if it was required.
We didn’t think that was required. You want to add something, greg?
Greg Fisher
I could just touch on the drivers a little bit. As ovais asked about. I mean, we outlined our Q3 guidance to be between 145 and 155,000 ounces. And we expect Q4 to step up even higher than that. And really, the key drivers are going to be at yd. At young davidson. It’s higher milling rates. Higher milling rates and grades Are going to drive that in the second half of the year. And we had expected that from when we released our original guidance in january. With island gold, magino’s ramping up. So we’ll have higher milling rates from magino.
But we’re also looking to step up. The underground mining rates. Coming from island gold. Given the fact that we have the bigger mill now and then at la yaqui grande, we stacked very good grades in Q2. We’re going to continue to stack good grades or higher grades in Q3 and Q4. So it’s just a matter of the ounces coming off the pad. So all of those things are going to drive our production. Significantly higher. In the second half of the year.
Ovais Habib
Thanks for the color on that, John and greg. Just want to move on to the exploration side then. John, when we were visiting the island gold site in june, your team was really highlighting exploration potential, you know, in close proximity to the magino mill, the regional kind of exploration work. Plus, you guys were hitting some interesting intersections. On the west side of island gold. Any of these drill targets really standing out? And are we expected to see more results from this area? That’s part one. And then part two of the question is, also, is the plan to delineate a source.
To feed the magino mill from these areas. Before you release the expansion study?
John A. McCluskey
Look, we have exciting exploration results Coming from right across the company. We’ve made some interesting new discoveries down in mexico. We’ve been hitting into some fabulous grades, As I outlined in my comments, as far away as 7km from our mill in areas of woodworkings. We had high expectations for those areas. They’ve come in very well. We’ve been drilling. We’ve Actually been focusing quite a lot of our effort. Converting resource to reserve. So we can incorporate more reserves. Into this big expansion study. We’re coming up with on the fourth quarter. We’re having excellent results on that front.
But I’ve got Scott RG Parsons sitting next to me here. And I’m going to turn it over to him to give further color to your question.
Scott Parsons
Thank you for the question. There’s a number of opportunities, as you touched on, that our team is very excited about. But I’m equally excited. Off to the west. You touched on some of the surface drilling. And underground drilling. We’ve been doing between island gold and Magino. And that area is essentially the up plunge extension of the island west zone. And as we establish underground drill platforms and continue drilling from surface, we continue to find high grade mineralization in that area. So that’s no surprise to us. And just a matter of time before we could get there and start drilling it.
We continue to have success in the hanging wall footwall zones. Those are all incremental ounces in terms of ounces per vertical meter in proximity to existing infrastructure. So those all continue to expand. And we defined, as we define new zones as well. And the most exciting part is island down plunge. It continues to remain open at depth below 1,500 meters. This is shallow in terms of these gold systems. We have indications from earlier drilling. That island continues down plunge. And later this year, once we’ve pivoted back from our delineation drill program, we will continue exploring island at depth.
And then as John touched on as well, near mine opportunities, Including Klein and Edwards and pick. These are historic mines 7 km from the Magino mill. They’ve gone through a series of different operators over the years. We’ve consolidated all the land there. And really it’s a new gold system we’re just starting to explore. And you can see the results already this year. Quite encouraging. And we’ll be continuing to drill at those targets Going into the second half of the year.
Ovais Habib
And Scott, I mean, based on this drilling and drilling results expected. I mean, is the plan to kind of have these results incorporated into the expansion. Or is this kind of the next phase of that expansion. That these opportunities will be brought into any sort of production profile at the island gold complex?
Scott Parsons
Our absolute focus right now is getting the inferred mineral resource base at island. Converted to indicated. To bring that into the expansion study before year end. There’s about a million ounces sitting there. That we’re actively drilling on from surface and underground right now. And we and we’re on track to complete that program for the year end expansion. The other targets I referenced will be more longer term midterm targets in terms of Klein, Edwards and pic. There’s also the north shear which I didn’t touch on, but those will come in as new. What I would anticipate as new resources in the midterm that would provide potential opportunities for higher grade mill feed at Magino.
Ovais Habib
That’s great color, Scott. Appreciate that. That’s it for me, guys. Thanks for taking my questions.
operator
Thank you. The next question is from Cosmos. Chu from cibc. Please go ahead.
Cosmos Chiu
Thanks John, Greg, Luke and Scott times two, maybe. My first question is on Young Davidson, just to talk about the higher levels of groundwater due to the spring milk. Has that been fully resolved? Just to confirm that the groundwater is now normalized.
Luc Guimond
Hi Cosmo. Yeah, Luke here. Yes, it has been resolved. As we mentioned, it was kind of a bit of a perfect storm there with a quick spring melt and significant precipitation during the spring melt as well, which added more water within the regional watershed and resulted in more groundwater flowing into the mine. We’re more adherent to making sure that we understand the whole regional watershed and keeping an eye on that moving forward for the longer term as well as we’ve actually added some additional pumping capacity as backup to both our open pit dewatering as well as our underground dewatering.
So we don’t expect that event to happen again. And as we’ve mentioned, we’ve been operating for 15 years. It’s the first time this sort of significant event happened. But we feel we have it addressed moving forward. Right.
Cosmos Chiu
I guess there’s no pun intended. When you said perfect storing maybe on the throughput here, you know, you did 7,190 tons per day in Q2, reading your MDNA, you know you will get to 8,000 tons per day, but likely not until Q4. Am I correct in that interpretation?
John A. McCluskey
Yes. I mean, we had a rope change scheduled part of this year for the head ropes at the Northgate shaft and that occurred early July post completion of that rope change. We’ve been running at 8,000 tons per day. But obviously when you factor in the number of days over the course of the quarter, we’ll probably come in around 75 to 77,600 tons per day for the quarter. But as we move into Q4, we don’t have any significant scheduled maintenance requirements for the plant and would expect to be running at 8,000 tons per day. Great.
Cosmos Chiu
And then also at YD, I think you mentioned that in Q3 grades will remain at the lower end of full year guidance at closer to 2.05 gram per ton. Is that as expected? And was there any ability on your end to potentially, you know, mine higher grades in Q3, even maybe in Q2 to offset the lower than 8,000 tons per day throughput?
John A. McCluskey
I mean, we’ve got a pretty committed schedule with regards to the extraction sequence for the underground. And again, it’s just to manage the overall, you know, regional extraction of the ore body to be responsible as far as the mining phase of what we’re doing for young Davidson. So, I mean, really the lower grade being at the lower end of guidance has been a function of obviously the slower first half of the year not mining all the tons that we expected. And as well as a slight change in sequence has resulted in us being more at the lower end of guidance as opposed to maybe being near the mid or upper end of guidance guidance.
But as we move through the mine plan through the second half of the year, it is pretty flat line between Q2, Q3. But as we move into Q4, as per our mining sequence that we expected, we will be getting into higher grades that would be more near the higher end of our guidance. And then the other point I would make is based on where we have been mining, Even though there has been a slight sequence change or we haven’t mined all of the tons From a reconciliation point of view, the plan grades that we were expecting are aligned with the actual grades that we’ve been seeing from a reconciliation point of view.
Great.
Cosmos Chiu
And then maybe just a few numbers question on island gold. As you mentioned, with the transition of the island gold ore to the magino mill, Recovery looks to be as expected. So how should we look at Recovery? Like in Q2, it was 98% for Island Gold, 95% from a geno. So should we just take a weighted average and that should be kind of the expectation we should expect on a go forward basis?
John A. McCluskey
Yeah, our expectation based on a blended mill feed into the magena mill with the island ore as well as the magino ore, the expectation should be an overall Recovery of about 96% is what you should expect. Great, great.
Cosmos Chiu
And then in terms of the redesign liner and the bolt configuration on the sag mill, Just to kind of confirm, you now have the configuration needed at the Magino mill to achieve your near term target of 11,200 tons per day. So it’s just really down to kind of getting it up and running availability and things like that. You don’t need to change anything else.
John A. McCluskey
Correct. I mean the last step really there was just having more plant availability for the Sag mill. And by making the change that we did in early July with the line of configuration as well as the bolts, that will give us more industry standard plant availability for the Sag mill moving forward to be able to continue that ramp up, to strive for the 11.2 that we’re expecting as we move through the quarter.
Cosmos Chiu
And then one last question on the grades at Magino, the open pit, as you mentioned, 0.82 gram per ton in Q2. How should we look at the mine grade on a go forward basis? I think before your guidance is anywhere between 0.8 to 0.9 gram per ton, your reserve grade is 0.91. So could you remind us how we should look at grade or the. Does it really matter given that you stock plasma at a lower grade anyways and what’s actually going through the mill is high?
John A. McCluskey
Yeah, I mean if you look at what we processed in Q2, we averaged about 0.94, which falls within our guidance of that 0.9 to 105. So obviously the mine grade overall is always going to be a bit lower because we’re stockpiling the low grade and feeding the best grade material. So really the way you should look at it is on a basis of what we’re going to be processing in the quarter on a quarter by quarter basis moving forward. Certainly in the second half of the year, we should be within that range of 0.9 to 105 coming from a genor.
Cosmos Chiu
Perfect. Great. Those are all the questions I have. Thanks everyone. Thanks.
operator
Thank you. As a reminder, you may press Star one if you have a question. The next question is from Don DeMarco from National Bank. Please go ahead.
Don DeMarco
Thank you operator and good morning John and team. Good to see the strong free cash flow in Q2 while keeping the projects on track. So first question for me is at island and congratulations on the shutdown of the island mill. Now Magino Mill throughput. Understand it’s running around 9,500 tons per day in the last couple weeks of July. So what do you expect the throughput profile to be through the rest of the quarter over August and September? Like do you expect a quick ramp up to 11k ton per day and potentially even exceed it or a more moderate increase maybe reaching 11k tonne per day in September?
Luc Guimond
Yeah, Don, hi, it’s Luke here. It’ll be a bit of a gradual ramp up as we continue to move forward through the quarter. But certainly as we hit our stride in Q4, we’d be more consistent to be running at 11.2. You know, just with the liner change that we’ve just completed, the liner and bolt change, we’re, you know, we’ve got the ball charge setting that we’re looking at optimizing certainly as well as there’s a little bit less volume with the new liners. So that’s part of where the gradual ramp up occurs through the quarter. But we would expect Adar stride certainly in Q4.
John A. McCluskey
Yeah. And just to add, the critical thing for us is to ensure we’re maximizing the amount of underground ore that’s coming from island and that’s continuing to be where we expect it to be.
Don DeMarco
Okay, great. It was mentioned in response to an earlier question that you plan to step up the processing of the high grade ore at the Eugeno mill. Should I take this as that island might contribute more than 1200 tons per day to the mill in Q3 or Q4?
John A. McCluskey
Yes. I mean, as part of our Phase 3 plus expansion and our ramp up, our mining weeks were starting to gradually increase from the island underground components. So yes. See, the second half of the year you will start to see there would be more contribution from island underground ore going into the Midgeno mill. On a combined basis, we’d be targeting about 1400 tons per day.
Don DeMarco
Okay. Should that be through 1400 for the entirety of of H2 or how should we look at Q2? Q3 versus Q4?
John A. McCluskey
Q3, you’re running around 1,300 tons per day. Q4, we’d be running at about 1400 tons per day.
Don DeMarco
Excellent. And it’s great to hear that, John. As a final question, he reiterated the consolidated production guidance. Are you expecting to achieve production guidance at all the mines? Of course, Young Davidson and Island are currently running at the low end of their respective ranges. So just wondering if it’s on a consolidated basis or if there’s any additional color on a mine by mine basis.
John A. McCluskey
Well, they hit it on a consolidated basis. You’ve got to hit it mind by mine. So we give variations across each of those operations. Just given the unforeseen things that can happen in mining operations, but all things being equal, we’re quite confident in the guidance we provide on a mind by mind basis and on a consolidated basis. Okay, great.
Don DeMarco
Okay, well, that’s all for me. Thank you for that and good luck with the rest of the year.
John A. McCluskey
Thank you.
operator
Thank you. Thank you. There are no further questions at this time. This concludes this morning’s call. If you have any further questions that have not been answered, please feel free to contact Mr. Scott Parsons at 416-368-9932. Extension 5439. Thank you. The conference has now ended. Please disconnect your lines at this time. And we thank you for your particip.