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Thank you all for joining us this morning. Before I turn the call over, I need to advise that certain statements made during this call today may contain forward-looking information, and actual results could differ from the conclusions or projections in that forward-looking information, which include, but are not limited to, statements with respect to the estimation of mineral reserves and resources, the timing and amount of estimated future production, cost of production, capital expenditures, future metal prices and the cost and timing of the development of new projects.For a complete discussion of the risks, uncertainties and factors which may lead to actual financial results and performance being different from the estimates contained in the forward-looking statements, please refer to Yamana's press release issued yesterday announcing second quarter 2021 results as well as the management's discussion and analysis for the same period and other regulatory filings in Canada and the United States.I would like to remind everyone that this conference call is being recorded and will be available for replay today at 12:00 p.m. Eastern Time. Replay information and the presentation slides accompanying this conference call and webcast are available on Yamana's website at yamana.com.I will now turn the call over to Mr. Daniel Racine, President and CEO.
Thank you, operator. Thank you all for joining us, and welcome to our second quarter 2021 Conference Call and webcast. Presenting with me today is Jason LeBlanc, our Chief Financial Officer; Yohann Bouchard, Chief Operating Officer; and Henry Marsden, Senior VP, Exploration, will be available to answer questions.I will start, as always, with health and safety. Our total recordable injury rate was 0.58 for the first 6 months of 2021. Earlier this year, we introduced our climate action strategy, continue to advance the strategy during the quarter with work ongoing to determine baselines and gather data to develop abatement scenarios. The strategy is one pillar of our approach to ESG. Health and safety, environmental management, governance and community engagement are all deeply rooted within our organization.We're proud to have been named one of Canada's Best 50 Canadian corporate citizen by Corporate Knights. Yamana ranked 31st overall and was the top-ranked Canadian mining company. The best 50 ranking are based on a series of criterias, including 8 environmental metrics, 5 social metrics, 6 governance metrics and 3 economic factors. To learn more about our ESG performance, I invite you to look at our latest material issue report and global reporting initiative report. Both are available on our website.Turning now to our Q2 operational highlights. We had a strong production with 217,402 ounces of gold, led by standout performance at Jacobina, Canadian Malartic, El Penon and Minera Florida. Jacobina and Canadian Malartic, I'm pleased to note both reach all-time quarterly heights. And Cerro Moro production increased compared to the second quarter of last year, both, but as we indicated previously, we're expecting the mine to see much stronger results in the second half of this year.Produced 1.63 million ounces of silver during the quarter. GEO production was 241,341 ounces. Quarterly cash costs were $7.8 for GEO and all-in sustaining costs were $1,081 per GEO, in line with plan.Our strong cash flow generation and increased cash balances continue to position us well to return cash to shareholders in the form of a higher -- higher dividends. As reported yesterday, we are increasing our annual dividend to $0.12 per share, up nearly 15% from the previous dividend and a 500% increase compared to Q2 2019. We also announced a normal course issuer bid that allows for the purchase of up to 5% of the company's issued and outstanding common shares over the next 12 months.First half production and costs were in line with our plan set out at the beginning of the year. As with prior years, we expect Q4 to be the strongest quarter.I would like to remind everyone that we guided production to be a 57/53 split between the first half and the second half, and this is exactly what we have achieved in the first half.Taking a closer look at our operations. As mentioned, Jacobina posted record quarterly production of 47,503 ounces of gold. As you may have seen in our release yesterday updating progress on the phased expansion of Jacobina, average throughput for the quarter was 7,200 tonnes per day, up 5% over the prior quarter with throughput averaging 7,500 tonnes per day for the entire month of May. I'll talk more about the phased expansion in a moment.At El Penon, GEO production for the quarter was 52,607 ounces, including 39,492 ounces of gold and 891,255 ounces of silver. We continue to expect planned production in Q3 and Q4, with the second half production to account for approximately 57% of the operation and world GEO production.Canadian Malartic had a record quarter, producing 92,106 ounces of gold, exceeding plan due to higher grades and recoveries from ore found deeper in the Malartic pit. The operation remained on track to complete the progressive drilling and blasting at the Barnat by -- at the end of Q3 of 2021.Minera Florida was a standout performer during the quarter. Production of 23,818 ounces of gold was above plan and higher than the same period in the prior year. Linear development continues to advance well ahead of plan, and exploration results continue to demonstrate extension of identified areas of mineralization and new discoveries.Production at Cerro Moro was 25,313 GEO compared to 15,451 GEO in the prior year period. This includes 14,488 ounces of gold and silver production was at 736,820 ounces in the latest quarter. Challenging water condition, limited travel and impacted shift change. However, the company took the opportunity during this time to fast-track certain health, safety and other site improvement, originally planned for the second half of the year, which will benefit future quarters. The transition to more mill feed coming from the underground ore at higher grade than the open pit ore will continue through the second half of 2021.We have a number of compelling growth opportunities in our portfolio, and that we're very excited about. One of these is the phase expansion at Jacobina. We've made significant progress on Phase 2 expansion to increase throughput to 8,500 tonnes per day and raised production to 230,000 ounces per year. The Jacobina plant continues to exceed expectations. As mentioned, our success underscores the simplified approach that we are now taking to complete Phase 2. This includes debottlenecking, the processing plant and tailing system as well as operational improvement that derisk the project, greatly reduce CapEx and eliminate the needs to install an additional ball mill.Our capital costs are expected to be only a fraction of the original estimated amount not exceeding $15 million to $20 million. The key takeaway in yesterday's update is the greater certainty and reduced risk as we now require incremental optimization and operational improvement to achieve the Phase 2 throughput.Subject to the successful completion of required permit modification, we expect Jacobina to begin producing the new 8,500 tonnes per day in the second half of 2023. As we advance Phase 2, engineering for Phase 3 expansion to 10,000 tonnes per day will advance in parallel with the planned modification originally planned for Phase 2 now consider adequate for the Phase 3. The feasibility study for the Phase 3 is scheduled to be completed in 2023 and project commissioning is still on track for 2027.In addition to the Phase 2 update, we also disclosed strong exploration result at Jacobina yesterday. The results included exceptional drilling from Canavieiras Central and Morro do Vento, as well as the discovery of a new zone at Joao Belo Sul, with 536,000 ounces of mineral resources. The results support the phase expansion and demonstrate Jacobina's exceptional long-term growth potential and ability to further extend strategic mine life.Turning now to Wasamac, our wholly owned gold project in Quebec's prolific Abitibi-Temiscamingue region. We are excited to be growing our presence in Quebec, which is also owned to our Canadian Malartic operation. Wasamac is a great project. And since acquiring it early this year, we have made it even better. We've carried out several studies that have expanded reserve and average annual production while increasing throughput and plant nameplate capacity. As a result, we've made the decision to advance the project to construction. We expect to receive all permits and authorization by the third quarter of 2024.We have identified opportunities to improve ramp up and decrease the processing plant construction period. Development will be fully funded from available cash and cash flow. Once development is completed, production will ramp up quickly and we'll achieve full production of approximately 200,000 ounces per year in year 2 and sustain that level for at least the next 4 years with costs well below the company's average.Wasamac has a reserve of 1.91 million ounces, along with indicated resources of 326,000 ounces and inferred resources of 258,000 ounces, with excellent additional exploration potential. We believe Wasamac will be a very long mine life of 15 years or more. Assuming this strategic mine life, NPV will be in the range of $850 million to $900 million at $18.50 gold price. Just 100 kilometers down the road from Wasamac is our Canadian Malartic operation, where we're advancing the Odyssey underground project with our partner. This is another outstanding project that will extend Canadian Malartic's mine life through at least 2039.The second quarter, we've completed overburden excavation and grouting to prepare for the construction of the production shaft and head-frame. We've also made progress on the underground ramp. Development is ahead of schedule with approximately 764 linear meters completed this year and 1,587 linear meters completed since the start. The exploration ramp is expected to take about 2 years to complete, with the first drilling platform established in early July.We have also completed construction of the shaft collar, and engineering is progressing on the head-frame, hoist room, base plant, power line, substation, the workshop and the warehouse. Construction of the head-frame and hoist room is slated to begin in the third quarter of 2021.And with that, I will turn it over to Jason.
Thank you, Daniel, and good morning, everyone. Turning now to our financial performance. Adjusted net earnings for the second quarter were $70.7 million or $0.07 per share. Combined cash and cash equivalents at quarter-end totaled $702 million, an increase of approximately 8% over December 31 yearend. This includes about $223 million that has been made available for the MARA project.Cash balances, along with further liquidity and cash flows, are more than sufficient to fully manage the company's business and capital allocation objectives, which includes further returns of capital to shareholders. We continue to generate robust cash flows, with cash flows from operating activities increasing to $153.5 million in Q2 versus $129.4 million in the same period last year.Cash flows from operating activities before net change in working capital were $167.8 million, and free cash flow before dividends and debt repayments increased 34% year-over-year to $51.4 million -- $51.2 million. We expect cash flow to improve in the second half of the year, with Q4 expected to deliver the strongest performance in line with the production and costs.For Q3 and Q4, capital spending will be a little higher than the first half of the year as expected. For sustaining capital, we'll average about $50 million of spend per quarter. For expansionary CapEx, the average will be about $40 million per quarter with about half that attributed to Odyssey. And for exploration, we'll spend between $25 million and $35 million -- $25 million and $30 million with a 70-30 split between capital and OpEx.We continue to see a strong performance across our portfolio with production and cost tracking to plan. Our first half results are well-aligned to our 2021 guidance released at the start of the year, which called for 53% of production to be weighted to the second half of the year. Our costs are also tracking in line for where they thought it would be at the end of Q2, and prospectively, with minimal impact from inflationary pressures for the balance of the year.As noted, we expect stronger production and lower costs in the second half. Q4 is expected to be our strongest quarter, with the highest quarterly production and lowest quarterly costs continuing to trend from previous years.And with that, I'll turn it back over to Daniel.
Thank you, Jason. Before we begin the Q&A, I want to talk a little bit more about Wasamac, and our growing presence in Quebec. I want to highlight the points raised by our Executive Chairman, Peter Marrone, in his most recent blog. If you haven't, read it yet, the blog. I encourage you to do so. It's published roughly once a month as Peter shares his perspective on a wide range of topics related to the gold mining sector. His message in that blog can be summed up in 5 words, focus on big pictures.Our long-term production profile in Quebec, including Wasamac and Odyssey, is 450,000 to 500,000 ounces per year between 2028 and 2035. While that's a strong profile in its own right, we believe it's just the starting point that the mineral resources and exploration profile at Wasamac and Odyssey will generate significant production and mine life upside. That's where we're forecasting a 15-year strategic mine life for Wasamac and why we believe Odyssey will be in production far from beyond 2039.We know that projection like this call for an element of trust on your part. And trust and benefit of the doubt are in short supply in our industry, perhaps for good reason as a result of event in the last cycle. However, there have been many changes in our industry and in our company, in particular, along with many successes.We believe we merit the benefit of the doubt that our long-term track record of converting resources to reserve at El Penon and Jacobina and our success at Canadian Malartic had good reason for your faith in confidence. Without diminishing the success of our other mines, Odyssey is a game changer at a mine that has been a significant win for us on cash flows. But before Odyssey, Canadian Malartic was seen as limited only to its well-established open pit. Today is a top-tier generational open pit and on the ground mine.So we urge you to look at the bigger picture. Wasamac has the potential to become another generational mine in our portfolio, a mine that will be in production for at least 15 years carried in our strategic mine life. We look forward to advancing this mine and realizing its full potential, and we hope you join us and enjoy the full episode upside. And that -- in term of our Canadian profile in short -- in few short years, we have established a platform.This is among the biggest in Canada internal production, with a production platform that will reach an initial roughly 500,000 ounces of gold, all concentrated in 2 mines in the same region of the country.And with that, I will turn it back over to the operator for questions. Operator?
[Operator Instructions] And the first question is from Anita Soni from CIBC World Markets.
My question is with regards to the indications that you've given for inflation going forward. Can you give us a little bit more color on some of the offsets that you're seeing? I think you mentioned that you are seeing some inflationary pressures, but you've got some operational -- sorry -- operational synergies that can offset that. And areas where you might not have operational synergies, and we might see some cost escalation?
I'll start, and I'll let Jason to give more detail. But talking about inflation, a big part of our cost is manpower. And then we have negotiated 2 contracts this year successfully within our budget. So we have not seen really inflation in that part. There's been some inflation pressure in the first half. But like we mentioned, we were able with our -- some synergies, some good operational excellence again to limit the impact and then we were right in light.So maybe, Jason, you can give some detail of what we see coming and how we plan to mitigate these cost pressure.
Yes. Sure, Daniel. Daniel mentioned, we're seeing inflation, those headline items like everybody else out there, they're trickling down to consumption level of grinding media and the like, explosives, et cetera. And those are all up year-over-year, up a little bit more than our plan. But we indicated it is not significant.With the guidance range that we provided previously, it's accommodated in there with a little bit stronger foreign exchange. I'd probably peg that at $15, $20 of negative impact compared to where we were at the start of the year. And obviously, we're working to try to offset that with all of our procurement efforts. I think we feel pretty good about that.And then also operational excellence. I think it's been a big part of our success over the last number of years, and that program is just that much more mature in advance.So we feel like we're in a pretty good position to offset some of these impacts. And we do think they are cyclical in nature. They are -- all these direct inputs are up quite a bit from recent cycle loads. So they come off from highs earlier this year. So they do seem to be moderating, but there is definitely an element of uncertainty here, and we have to do our best to manage it.
Okay. And then the second question is just on Jacobina. I think you guys mentioned that you'd be pulling lower grades for the second half of the year as the mill is now outpacing the mine. As we go forward -- and that was temporary and it's going to be -- you're set up into 2022. But how do we think about grades in Jacobina in 2022 and 2023? I think previously we were kind of targeting towards a 2.3 gram per tonne material to achieve those production targets, is that still your target?
Yes. Anita, coming from the underground mine itself, that's the grid you can expect. But you can understand that our Phase 1 was 6,500 tonnes per day. We budget a bit higher than that at 68%. But you saw our number, we're achieving 72% and 75%. So the mine is not ready to produce that amount of tonnes, but we have stockpiles at a bit lower grade. So this is why the grades will be a bit lower. So we're going to process more tonne a bit lower grade. And then in total, that will be a higher production at the end of the day.I think we have to take advantage that we can put that supplemental incremental ore into the mill. And that's what we do. We're making a lot of money even with 2.1 grams per tonne at Jacobina, that's what. And then eventually, when we're going to catch up to the production, the underground production to what the mill is able to do, then the grade will come back to that 2.3 to 2.4.
Okay. So yes, I guess I was just asking, when do you think you'd get back to that 2.3 or 2.4? And then secondly, as you mentioned, you're making a lot of money at 2.1. So then what kind of -- is there any kind of I guess processing cost reduction with the higher throughputs that I should be thinking about in the model while you're still processing 2.1?
Yohann, why don't you answer that question.
Yes, Daniel. We're going to see for sure -- I mean, we're doing step-by-step implementation to the processing plants. So for sure, with what we have in mind by increasing to 8,500 tonne per day without having [indiscernible], you can understand that we're going to be much more efficient. So yes, for sure, at 8,500 with that new, I would say, approach -- I would say, I would expect to see some decrease with processing.
Regarding grade, Anita, that's when Phase 2 was planned. So around the second half of 2023, you should see grade going back, even maybe next year, you should see grade coming at that 2.3 to 2.4.
Okay. Very nice. And then lastly on Cerro Moro. As we look at the -- just taking a look at the production year-to-date overall, is it fair to say that it might undershoot the original sort of guidance range for that specific asset where other assets that are outperforming like Minera Florida and El Penon versus your budgets might make up the difference?
Sure. The other 4 mines will do better, but we're still targeting to achieve our guidance for Cerro Moro. So second half at Cerro Moro is planned to be a very good half. We're going to see it as always a risk, but we're still aiming to achieve our guidance at Cerro Moro.
All right. So that was on throughput reverting back to normal throughputs after that sort of health and safety shutdown that you guys had? And then secondly, on I guess really good grades, right?
Yes, exactly.
The next question is from Fahad Tariq from Credit Suisse.
Just on the dividend, I noticed there was some commentary around just maybe a different methodology or a slightly different perspective based on minimal cash that's needed. Can you just touch on kind of the thinking around how the dividend is increased if that has changed, given there's obviously some capital commitments that are coming up over the next few years with Wasamac and Malartic, you add that up, it could be almost $1 billion of CapEx over the next few years. Just -- maybe just any changes to the way you're thinking about the dividend?
Yes. We mentioned in the past that we might look on formula too for dividend, but we've decided not to do that. We look at our -- like you mentioned, we look at our future capital, our future cash flow generation and then what we can afford as a dividend. And then when we look at what's coming at Malartic, at Wasamac, you saw that Jacobina is a lot less now that we can afford to increase our dividend to $0.12 per share. And then we're going to continue to look at it in the future. And then we want that -- like we mentioned many times, that dividend to be sustainable. So if we were able to increase it from $0.105 to $0.12 per share, it's because we believe our profile in the next many years can -- we can't afford to pay it at that level.
Okay. That's clear. So if gold prices stay above $1,350 an ounce, it's fair to assume that this dividend would be consistent?
It will be consistent at $1,350, absolutely.
The next question is from Josh Wolfson from RBC Capital Markets.
Focusing on Cerro Moro, is there anything -- is there any details you can provide in order for us to sort of connect the dots as to what's required to see improvements in the second half of the year? Historically, and last year, obviously, COVID being a bigger impact, getting the development rate seems to be a challenge. What's maybe giving you more comfort on the outlook now in terms of expected improvements?
I'll let Yohann answer, but I'll say development as the rates are improving, they're growing a lot better now. So maybe Yohann, you can give color of why we're very confident that the second half will be quite a good half at Cerro Moro.
Yes, for sure. So as Daniel said, I mean, we did progress very well to catch back on our development. So that will turn a lot of flexibilities with mining. Just to give you an example, when we start July, we were only -- we had only to do 70 meters development to meet all the requirements for the next 6 weeks. So we're getting in better position. We have higher reconciliation, I would say, better reconciliation between what we mined versus what we see to the mill within some progress as well with controlling dilution and what's already in our mine. So all that together, I think that the operation now reach a point where we see, I would say, Q3 and Q4 reached the target that we wanted.So again, that's going to be a progressing approach quarter-over-quarter at Cerro Moro. So for sure. And I will not hide, it would be challenging to meet our budget and guidance on that one. But the plan that we have in front of us is showing a good trend if we succeed to maintain a high level of development.
And for the heap leach study, what was the grade of the material that was used for the column tests?
It's about 1 gram per tonne.
1 gram. And when you're thinking about this 5 million tonne target I guess initial resource, is that a comparable grade we should think about for this opportunity?
Yes. I think it will. Yes. That's correct. For sure, I mean we're going to see -- we're going to see opportunities as well. I mean we don't dilute if we don't have to, but that can be our rig well. But I would say 1 gram per tonne is our minimal heap leach grade for sure.
The next question is from Mike Parkin from National Bank.
With Odyssey, has there been a good plan developed in terms of what will ultimately be involved with the Canadian Malartic mill in terms of what it will be scaled down to, right now, you've got the big [indiscernible] feeding into the 3 ball mill lines, if I remember correctly. I know there's been some preliminary talk about potentially removing the sag. Is the idea to kind of run a couple the ball mill lines and kind of keep the third one as a spare? Or what's the thoughts there?
Yohann, maybe you can put some color on it, but we know exactly what needs to be done to achieve. But again, Mike, we're, what, 6, 7 years away to be in full production underground at Odyssey, so things might change. We -- our partner announced, and then we said the same thing, a new discovery at Malartic during the second quarter. So if we find more -- or more areas to be mined, then throughput might increase in the future at Malartic. But for now, we know exactly what it's needed to achieve 20,000 tonne per day. So maybe, Yohann, on the mill, what needs to be done.
Yes. I will not go into detail, Mike on your question, but what you need to -- what we need to understand here is we cannot batch the ore because the processing time because we need to keep all these running all the time to accommodate the mining sequence. So as you said, we need to, I would say, right-size the processing times about 20,000 tonne per day. And the idea here was going to be to be -- to do it efficiently.So we're going to park some of the grinding units. Some of the -- many equipment can be parked, but that's going to be removed in case of something that is coming. So we're going to have -- we're going to remain with that flexibilities. So from the current, I would say, from the current costs, processing costs by processing less tonnes, we believe that the processing cost will increase by about, let's say, the top of my head, $1.50, USD 1 per tonne more for processing going at 20,000 tonne per day.
Okay. That's perfect. Another question with the Jacobina kind of revisit on the Phase 2, simply just kind of looking at it in terms of where the bottlenecks are and unlocking the potential by addressing those rather than going ahead with the bigger capital spend. Can you just give us a couple of ideas where the bigger bottlenecks are within the mill and how you're working to address those?
Yes. For sure. I mean, Jacobina, we go -- we had a really good surprise of team all working like we did a really good job. I mean, to do those debottlenecking little project, and it just creates a price. And it bring us to just reconsider what we have for our Phase 2 expansion. So I would say on the short term, Mike, they're going to work on the -- like what all be the water pumping system and slurry pumping system. And we also want to do some modification to our tailing line.So even if we did some, we still have to do some modification there to release over the system. So in parallel, I mean, what we see there is we have -- we're using a power draw of about 92%. And I mean, the sweet spot for mining is about 95% to 97%. So we're going to take advantage of [indiscernible] power grinding units. I would say we also underutilized the crushing circuits, primary circuit is about 38% and the secondary crusher circuit is in up about 50%.So we see some opportunities there by optimizing usage. And I would say, maybe decrease [indiscernible] of these -- of the crushing. So that will help. And I would say the second one is that we see the third point is going to be to optimize grinding size and also screening and fine-tuning performance to, for sure, unload the running units and be able to push more tonnes through the mill.
Do you expect any loss in recovery? Or have you already kind of done some studies on that where you're not seeing material [indiscernible]?
Yes, a good question. I mean, maybe you saw that in our release that we've given 2 tests in Q2, and we went up -- we put the mill up to 8,600 tonnes per day on a day, and we averaged a really high tonnage over a short period of time. So for sure, we saw a decrease of recovery during that time, but that was within 1%, I would say, and I'm generously saying that. So I mean, by doing all that, and for sure, now we're looking at like a [ PED ]. We actually have designed 160 micron. I mean, between 160 and 180 micron doesn't make a big difference. We believe that we can push that a little bit further, and we don't see at the inflection point. So that means by being -- cutting a little bit by processing, I would say, [indiscernible] material, for sure, we're going to cut on power requirement as well.So as I said, this is something that come up like in Q3, and we're very excited, and we still try to understand what's going to be, I would say, the positive impact on cost going forward and really to find where it's going to be a sweet spot for processing rate.
Okay. That's good. And then last question. With respect to the NCIB, how should we kind of think about the execution of that? Are you going to be strategic or looking to kind of just be a regular participant in the market with it and buying kind of a fairly steady pace of shares throughout the next 12 months?
We're going to be strategic, Mike. We would not intend to buy a small amount of shares. It's -- we're going to -- when we're going to decide to do it, if we do it, it's going to be on a strategy point of view.
[Operator Instructions] The next question is from Ralph Profiti from Eight Capital.
There's quite a comprehensive tailing strategy being built around Jacobina. And I'm just wondering, is substitution of the surface tailings to the highest degree possible the goal here, where you're taking more sort of an ESG perspective? Or are you coming away with more of a strategic mine life at the increased processing rate of 10,000 tonnes per day, when you're managing the surface tailings capacity?
Good questions. There's a lot of strategy behind the 10,000 tonne per day at Jacobina, where we have to think about tailing. We mentioned already that we're going to go with an hydraulic backfill system to start -- we're probably going to switch eventually or have both also a base fill system to put more detailing underground. And even now, we're studying a dry stack tailing on surface to have to use less space on surface.And all of that is include in our strategy. We would like to use as much as possible in the maximum the actual tailing. And that's what we've been successful to. At 16 -- 6,500 tonnes per day. We added 13 years -- 13 -- 16 years tailing in mine life. We will increase to 85, and we will have the same because we're going to implement a backfill system. So the next step going to a higher tonnage is to use the same strategy. What we can do to maintain our attaining mine life still increasing the underground mine life, but putting more tailing.So you're absolutely right. That's part of our strategy to put as much or more tailings underground or reduce our footprint on surface with tailing. We're doing already quite good, but we see opportunities in the future. And that's going to be part -- one of the big part of the Phase 3 expansion.
Okay. Yes. Thank you. And my second question is coming back to some of these wage inflation pressures. You talked about the 2 contracts secured. Would it be safe to say that those are in that sort of plus 2% to 5% range that we're seeing in the industry benchmark? And specifically, when does the Cerro Moro wage negotiation come due?
We did El Penon and Jacobina this year. Cerro Moro, I don't remember, maybe Yohann, you know.
Daniel, I don't recall, sorry.
Yes. Get back to you. But I don't think it's this year.
2023, guys.
'23. Okay. So we're 2 years away.
The next question is from Tanya Jakusconek from Scotiabank.
Just wanted to come back on the share buyback. I know you commented on it being strategic. I'm just trying to understand how you view your dividend versus your share buybacks, dividends about 115 million, your share buyback, should you do all of it. That's over 200 million, it's probably double your dividend. I'm just wondering how you're balancing that. Do you have a target in mind that share buyback would be similar to your dividend? Just trying to understand the strategy.
Go ahead, Jason.
Yes. I think, first, Tanya, it's got to start with the overall capital allocation. So we still have that balance across all those priorities. That's the first kind of point of reference. And as Daniel said, with the $0.12, that's effectively fixed in our mind. It's sustainable. We make sure it's sustainable through the cycle. And that's going to be the first priority. And then once we look at those other capital allocation opportunities, then we can look at the NCIB, so straight give you first, and then there'll be a component going to the NCIB.
Okay. So there isn't a target within the component. It's whatever you -- so there isn't a target, basically?
Well, we can't look at just the dividend in and of itself. We've got to look at all the capital allocation. I think we've got the transparency on capital now. It's very well laid out with the 2 projects in Odyssey and Wasamac now. It's spread out manageable in every year, and we will still continue to chip away at the balance sheet, too. So we're going to be balanced across everything like we have been for the last several years.
And we mentioned many times, Tanya, that we have like 3 buckets. So our capital allocation, the dividend and reducing the debt. And then the debt is reaching a level now that we are very comfortable. It will continue to improve. So at one point, when there's enough cash and we might decide to do the NCIB. So it's all included in our strategy. We look at all the time, the 3 -- these 3 buckets. And then if there's money available at one point, we might do -- we might do the share buyback, but it will all depend what happened with so many other factors like gold price that we don't control.
Okay. No. That's fair enough. And maybe just coming back to the inflation, I know Anita asked this, and I just wanted to come back, and you talked about efficiencies offsetting this inflation. And Jason, thank you for the currencies, the $15 to $20 was due to strengthening of the currency. Just for ourselves, are you seeing the inflation when you look at all of these numbers going forward in that 3% to 5% range that you're looking to offset? I'm just trying to see if that you're similar with your peers in that sense?
Yes. And maybe just start to clarify, the $15 to $20 would be both FX and inflationary pressures baked together. I kind of gave you a one-stop there. So that's the 2 of them. And the -- it's coming through on a component of items. We highlighted a few in our disclosure. But we're seeing the results of our procurement efforts showing lower costs on other stuff.So I think that's part of it as well. To the extent we are seeing higher costs on like the straightforward stuff like grinding media, we're actually seeing lower cost on cyanide, by example, because of consolidation work that we're doing.So it's a bit of both, but the net is a little bit more inflation for sure. So we've got to focus on more of those bundling and consolidation opportunities to try to take the edge off it. And then back to our pure operational excellence. So that's more of a productivity avoidance type approach there. So it's -- we're coming at it from all angles.
Okay. So it seems as though you're probably then on the lower end of that sort of range in terms of what you were seeing inflationary-wise?
Yes. For sure. That's fine, the 3% to 5%, I think that fits squarely within the labor component that Daniel mentioned very much within our -- very much within our planning. And then on a line item basis, we may see higher than 3% to 5%. But when you look at the aggregate of all of our work, it's going to come out more of that 3% to 5% range for sure.
There are no further questions registered at this time. I'll turn the meeting back over to Mr. Racine.
Well, thank you, operator. Thank you, everyone, for joining us. We look forward to updating you on our third quarter call in October. Please take care. Stay safe and enjoy the rest of the summer. Thank you. Bye-bye.
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