Q4 2019 Earnings Call

This time all participants are in they listen only mode. After the speakers presentation, there will be a question and answer session.

Yes. Good question during the session you want me to press Star one on your telephone if you require any further assistance. Please press star zero I would now like to handle the conference over to your speaker today, and Dave Vice President Investor Relations. Please go ahead.

Thank you operator, and good morning, everyone. We appreciate you joining us today for new Gold fourth quarter 2019 earnings conference call them webcast.

As long as our Texas technical session webcast, where we will discuss the updated life of mine plans or both or rainy River and the Webdam mines that we released this morning.

The order events will be Oh.

CFO will present, our Q4 and yearend financial results following which we will open the lines for a brief <unk>.

Once we complete the call we'll pause for a brief I've met a period as we reset for the technical sessions.

The technical sessions will be led by Renaud Adams <unk> CEO, along with other members of the management team.

But before the team begins a presentation today I'd like to direct your attention to our cautionary language related to forward looking statements found in the presentation.

Today's commentary include forward looking statements relating to new gold in this respect we refer you to are detailed cautionary note regarding forward looking statements in this presentation.

If you weren't cautions that actual results and future events could differ materially.

And that was expressed or implied forward looking statement.

Slide two provides additional information that should be reviewed.

I'll refer you to this section entitled Risk factors in the new gold latest Mdna another filings on SEDAR, which set of certain material factors that could cause the actual results to differ.

Please note that all amounts are presented in us dollars.

In addition included in the presentation, there a number of and knows that provide important information that should be reviewed in conjunction with material presented.

I'll now turn the call over to eruption say.

[noise] good afternoon, and welcome I'm going to touch on the 2019 year.

And I'll do this in a brief fashion as a.

The most important part of the days is looking to the future.

Slide two on our operating highlights.

It was details are consistent with our February press release for people that congratulations.

Both like performed well within with results within guidance for the year and fall spend more a little bit more time on Q4 overall our quarter was that was impacted by planned lower grades as we shifted and spent the entire corridor in phase two the open a rainy river.

As we had exhausted phase one of the pet not was a released in our with our Q3 results and also higher sustaining capital or capital intensity for though for the quarter was planned.

And it came in at around $80 million sustaining capital and I'll get into more details on that on this slide shortly.

And that is expected to continue by the way until the first quarter next year, So I'll hit on that as well in our guidance presentation.

During Q4, the company produced 101000 ounce gold equivalent ounces lower than 2018, primarily due to the lower grades that I just mentioned higher cost resulted from those lower grades and the higher sustaining capex spend again on the here we were in line with with guidance on all can follow.

Today, the production and cost metrics.

Turning to slide three our financial results fourth quarter revenue was $139 million driven by sales of 72000 ounces of gold at 13, 66, announce and 17.3 million pounds of copper up to 69 pound.

Our revenue was 11% lower than the prior year quarter due to lower grades offset by higher prices in the prior year term.

Operating cash flow before working capital was six cents or 39 million.

For the quarter again lower than the prior quarter, primarily due to lower grades into higher strip at rainy.

How many recorded net earnings from continuing operations of zero cents.

Or $300000 compared to a loss of $1.28 last year last year's loss included a an impairment charge.

Rainy adjusted for certain charges, the net loss of $28 million or four cents chair.

Her to one cents fourth quarter of 18.

Our adjusted earnings include adjustments related to the inventory write down that's been noted in our disclosure along with other gains and losses, including an adjusted or unrealized adjustments on our gold price option contracts and our stream mark to market a lot more detailed in our mdna on any of those are any of those measures.

Our capex a this provides a breakdown it can see as I said it was an intense quarter, we spent $90 million or the majority of that work was finishing up some tailings when some with drains equipment components and also some cap and other refurbishments our growth capital was primarily in new out.

And focused on C zone, as we start to move and ramp on that project.

Liquidity at year end.

Cash balance was $83 million with approximately 335 million in total liquidity.

<unk> guidance as presented in our press release, this morning, and well be talk to a in detail in the next next session I'm not gonna have to dig dig deeply into it as as a renewal will be in a few minutes, but as a company we're expecting to produce four between for 65.

Having 515000 equivalent ounces and 2020 on lower costs and in 2019, when compared to 2019 of sustaining capital is decreasing and our growth capital is increasing again due to work at a season.

More to come on guidance I'd as I've mentioned.

With that I'll close out the the yearend discussion and open the floor to to questions. I guess I would look good to see if there's any questions in the room first and if there is.

Just the microphone drawn to the after the side of the right.

And then I.

We can open up to the phones, if there's any.

At this time I would like to remind everyone in order to ask a question. Please press Star then the number one on your telephone keypad again that is star then the number one on your telephone keypad. Our first question comes from the line of Matthew Fields from Bank of America Merrill Lynch. Please go ahead. Your line is open.

Oh, Hey wanted to talk about kind of 2020 guidance and.

You know capex spend over the period understanding you know that that is gonna be an intense period. So a few years at new Afton.

But you intend to be self funding I mean, I think throwing in your kind of 2020 consolidated guidance numbers into the model yields a pretty good free cash flow burn.

Over 2020.

So I guess the answer is the question is here what do you think about your liquidity at this point.

Are you comfortable do you need to sort of raise more now would you go about doing that over the course of the year.

No, we're very comfortable with our liquidity and meeting our commitments for 2020 and beyond.

We see a accompanying again all dip into the next next session. We see two Canadian assets generating free cash starting next year at current pricing.

1300, and three dollar gold three dollar call themselves.

Our liquidity is fine we can meet our commitments, we can build our minds and we can get ourselves into the position of generating free cash beginning at the end of this year at rainy and stay a neutral at a new afton as weve, a neutral to better at new Afton as we build season. So our models are in our numbers or.

Are fun.

And that you I'm just sorry, so at the mine level you expect to be.

Neutral assets.

New Afton on a free cash flow basis at the mine level. After this year.

No it already going.

Over the next four years, we were expecting to generate cash 21 is the year that we come close to being neutral or slightly below.

At current pricing, we're above but the years around that we left solid cash flow and like I said.

The project will be funded and will have positive cash flow over the four year period with 21 being.

Most of the of the four years.

And then at at the mine level, you anticipate rainy river to be free cash flow positive this year too.

At the end of this area.

At the end of this year at the end of this year, we expect it to turn.

And we expect to be free cash flowing for the here for the remainder of its life.

Okay. So starting at 21, okay. Thanks very much.

Okay.

Our next question comes from the line of John Tumazos from John Tumazos very independent Research. Please go ahead. Your line is open.

Thank you for your service through the company and for taking my question.

The 700 million of data of course is a good size number.

If you wanted to place a priority on reducing it.

How would you rank the following five alternatives I know there not only five selling blackwater selling new afton, selling rainy river selling stock or selling the company.

So we're selling everything [laughter] well I'll answer it sounds like some people don't like to live with a lot of debt.

No well, there's two ways to solve for our balance sheet and I'm going to talk to it there's a capital markets alternative is strategic alternative.

And again I'm going to repeat myself later, but the strategic brings money from or heavy cash flow in years and when you see our cash flows.

Post 24, we're generating a significant amount of it the other ways to leverage capital markets and move your commitments forward into those.

Cash flow in years, we're going to do a combination of both we're working very hard and we're active now that we have two plans in place that a that I can look to and show how we're going to deliver our business and our cash.

Will solve our 700 million dollar a bond issue.

The immediate issue was 400 million, it's still doing 22, it's it's not imminent, but we're we're going fast, but we're not hurting in dealing with or without issue.

And so ranking and.

It's just not something that I want to get into there's a lot of alternatives beyond stripping out the company we're gonna look.

Look to those two are to solve our balance sheet issues and the 22 bonds, but that we see.

Thank you.

Yes, I think that's that's it from a.

With regards to the yearend call. So we're going to us and mentioned shutdown for for five minutes, and then come back with a great tech session and explain or future. Thanks.

This concludes the earnings portion of today's call. Please stand by for the technical section.

[music].

[music].

Yeah.

Well come back.

Renaud Adams, President and CEO.

Are we gonna open to technical fashion and.

So I had mentioned at the beginning.

If you a few odder speakers would include <unk> rigs going and general manager Vice President General manager off for a rainy River.

And John Ritter awful general manager of our new Afton operation.

Something very important in 2020, we really wanted the exploration story.

This is mining after wrong.

In mining starts with the ability.

Oh, discovering and adding and growing your resource base as we go.

We believe that we're poised as we advance in the future to reintegrate really.

But strategically should be doing a proper and strategic approach in terms of drilling so somebody kelway Libra, our director exploration, we entertain your four and a few minutes on that.

And very importantly, those plan.

What does that mean.

For the next phase of this company.

We have been engaged in what we called a phased approach 2019.

Beyond the coughing production guidance and meeting those guidance had purpose.

And I meant purpose was to position the company.

So we could effectively.

And for the next phase.

Where beyond the numbers in a cost and the capital all in the Ace it can be ounces is a tremendous.

Goal and objective to answered insects, and improve our balance sheet in financial and returned as Karen fitting me.

To what it used to be a profitable and free cash flow.

So Rob would entertain once we complete on the technical sorry, what does that mean for this company moving forward why do we think that different plan really represents the best Krapfel word, which we're not out successfully.

Transition.

And improve.

And referring.

And what was and used to be very possible.

So before I go further and deep dive down into.

The 2020 long and on let me just make a quit stopped here on the 2019 year.

Robert entertain you R&D cost of production the meeting of the guidance.

But beyond that which is very important because when we came in early in 2019.

And presented our plan.

He was absolutely her mom for off.

And in order to read give our credibility as operators. So when we present the plan, we're going to freeze them today and it comes with the confidence or we could be.

If we could what production and cost guidance at rainy River after three years or a three months of Relooking at IP and delivering in 2019 at a time, where we were basically completing the construction or something to start realizing.

Yes, we're pretty confident.

And confidante men and knowledgeable about the future.

And yes, we believe that this plans are achievable.

And provide for further offline.

So in 2019 as I said beyond the production flight of the cost which was really a transition on the year transformation.

Why if it's successful.

Roche and execution on both sides.

So by the end of December and as we entered this next phase both assets were perfectly vision.

Two entered this new phase.

I'd rainy most are the most of what we called and defer capital was put behind off.

Yes, we're thrilled to have some work to do enter Q on Q2 with rich rager continue to triggers from higher costs.

But they are far.

I'd be assets under group there diligently.

Put in place of infrastructure.

Realizing of gold price superior Cortone hundred that was our original plan Eric anything good price rise the.

Stripping or be I said this is big because now as a b M December the pit is now because station.

So we could turned a corner of in 2020.

The strip ratio off originals for free short three to one you would that be taken beyond 2020 to reach our objective of turning the corner.

So we could forthright with stripping.

While maintaining and delivering on our Cogs guidance.

Well, we have significantly shift.

Position now the asset to turned a corner.

We work with the regulators.

We're very established our baseline.

We understand the Geo technical not the Geo technical as an engineering exercise.

What do you pack.

What's good.

Often work what should be and what should be out everything has been taken into account or experience of 19 with regards to water treatment baumann managing water.

Sure if they're completely the needle to another level.

These plans takes into account and reality.

Takes into account and experience.

Understands the impact of the 30 or 40 meters.

Back to chop.

Pat and on the log detailing and the impact into weighs down.

To a point.

What does that due to keep chasing and the big path and chasing a lot of ways.

We're not deanna going to be what triggered our dolls baseline guard good food.

I had the mail were forced to now there was some days up to 31000 weren't there on the phone.

Some days below one the hardware.

As far as hard we understand better the recovery and the effect or future fight or tight.

We've been capable to maintain a 20 424.5 for the fourth quarter and as we move forward.

Missing as well the impact here, what's gonna be when we launched a pebble crushing we've just shifted this asset to a point where beyond pushing for tons and lower costs without shooting and we thought carting Turner.

We've literally and significantly physician disaster for success in the future.

At new Afton, not a surprise 678 years in their own delivering to production and cost.

Which obviously served a calls with this company with more than 80 million or free cash, though again generator and helping the college the financial.

Same thing liquidity to your and so forth.

Big achievement.

Well when I look out [noise].

New Afton.

I look beyond that.

I look at our ability to have learned he sees on in a have significantly advance.

So we shortened.

The impact or if not having started earlier.

It's a great achievement everything is ongoing now.

We've initiated strategic procurement as well for the tax component.

Second or the Amanda tailings <unk> right.

But more importantly.

We have significantly I've been far knowledge again technical.

So in order and now with this plan.

We believe that the knowledge in turn merger technicality, Pmsix vitamins and impacting tailings and start realization.

True level now we could execute.

And permit.

And then over time and budget.

So with that in mind that same ball.

An amazing group both faster both on during the leadership of their respective general manager would support a big technical services in the office.

Financial team opted to see.

Amazing group of expert Canadian International Alsbury, your with all their names varies a full.

Slide.

Showing you all to Q peas in a wonderful people that have contributed to it.

We were now bear and we really truly partner.

<unk> Gmbh figure would be the truly experts or with their risk.

The only with your risk when we put the plan for war.

I see a lot of commitment I see a lot of teamwork and see a lock them very importantly in this case create CVT endorsement.

It takes a fixed got.

The fixed thinking outside the box.

To come up with a plan to Bury that has a significant reduction in ounces.

And still believing.

No, we would achieve better profitability and free cash flow when NPV over the life of mine.

Those are three core values or just kind of funny.

So without a mine.

[noise] make us talk a little bit than the global thinking behind it and I would spare you with the detail mass there Rick and Jon will entertain your after him a detail about.

Well there for thinking about when we said at rainy River.

The profitable operation.

At 12, 75 gold price.

We've picked welfare bona Fide gold price for our reserve.

Gold price for mineral reserves.

By definition, a cut off grade.

His watt create and secured a breakeven.

Well the most important thing is what goes bad generate interim or Fibrates, great what does your business.

Sort of focus here, what's truly to data over what we considered a malls optimal profitability up 75, meaning one.

Meaning that using the mineral reserves.

And it caught up grade.

No point in 46, and two for foreign and mine, which is really based on the medium high grade.

You would not only secure what we call it had been cut off grade.

The breakeven, but do you would generate significant value what happens is I like to say each asset each resource base has a unique.

Something unique about it.

Sometimes it's good from things that can make I'd say we've.

<unk> beat and make it looks like a good faster.

Well what was good and this exercise where is the ability as you would look I'd be open pit by his own.

Wants to eliminate some area.

Where you would significantly eliminate and amount of waste.

The strategy hasn't changed since 2018 them. It sounds like you would still feed the mill with the media migrate and you would still stockpiled inorganic.

The difference.

I do not gonna design and operate you're chasing too slow Greg.

You would design and operate focusing on the medium high grade and you would keep.

Stockpiling than the old right you have to mine it anyway.

And when you consider the knowledge and understanding today are been Geo technical aspect and you understand what this over 400 million tons of ways by wasn't reducing their new plant.

Means in term of operating costs means and for or Fibest and north cap at all from mining equipment.

Maintenance sterilization the ways barrels extra appealing.

Truly pigs get back in the envelope.

I realize.

Got you better under a higher gold price enjoy free cash flow and higher margin.

That was the spirit.

For the underground.

Obviously I've also been in five.

Knowing that what is the most important aspect of what triggers the profitability is the ability to keep a low milling cost per ton.

This is Pete.

That's the reason why the importance of stockpiling, the low grade and having low grade available so when mix with the underground portion.

Same thing and attractive.

<unk>.

So why these included there is up 12 75, what makes sense I do you have some stockpiled there you bring that back stoping on top.

But very importantly is a significant reduction of capital.

Rather than chasing these underground at the early stage, forcing you from surface to go below that path and engage in significant development capital cost.

You would actually benefits and perfectly sequence your underground.

As you go down with <unk>.

And you would benefit from Florida.

I think the plan is a clever.

I think the guy views and hardness creates the with its about Fran.

And as a result, we're sitting now and the strip ratio up to 53 to one.

And we still have an average grade of more than one grams over the life of mine.

Somehow supported with some underground snow.

And you know the mining in Canada.

And you know how attractive it is.

For any open pit at the one gram in a 2.5 strip ratio.

Strip ratio was truly what drives the <unk>.

The cost structure or for that.

At new Afton.

The self funding aspect of it was absolutely pre more than was the key part of it.

Yes, there were some obviously.

A lot of information that we got or doesn't improve among the geo technical side and as John will entertain you.

I think you would dissipate significant question Mark are more ability.

<unk> technically execute.

Despite.

But a very important aspect of it was the ability to put forward a plan where got $1300 in threeq copper dollar tree, daughter copper price.

Our current spot price, a 50 50 with 255 or any combination in between.

Wont secured the self funding approach.

And not only that and as we're going to see in a minute.

It triggers the upside or even generating free cash flow during this period.

In a more specific for rainy river.

I, probably would be easier to look at it that's a two faces.

There is a phase of 20 to 24.

And there is a phase of 20 528.

So when it went before is that face it'd be open fifth were slowly you're going to ramp up your underground.

Your cost will remain higher in the first part of 2020 yards you complete capital everything there wasn't complete last year you push on your stripping.

You are really expose the or.

And eventually as you advance in this period, you're going to slowly ramp up your underground.

The beauty about this period you got $1300, we're very confident we're gonna turned a corner towards the fourth quarter or before a better price.

And become free cash flow.

We're in a mission here, we initiated something in 2019, and we're not going to change our view on their pressure because that's the right thing to do.

We still have a few quarters ahead or boss to finalize but we will turned a corner.

The average what I like as Bob defined as well to hit shows five consecutive years of production girls and sustained growth.

From the 250, achieving to three fiftyth or was it 25 and sustain again.

It's a it's a very interesting and as you grow.

And your costs will go down.

With a significant milestone and 22.

Where the stripping.

Our fault is bad ground sitting on top of the fifth will be over.

And for the first time be asset will benefit.

Oh from mining what I call like any odder Canadian one on their pure hard rock with no background to do with.

Which should create a significant upside to the operation.

As a result, we see our hesik for that period through words, a thousand dollars for many programs.

And will trigger a $3900 as high as 250 million with cash flow.

Which significantly countries with price.

The second phase I was really to do.

With the underground portion of that so your ramp Bob brings when 2024.

And you reach your peak between the 25 in 28, you enjoy some stock for all that you have put on surface. During the 20 to 24, which will keep your melding cause them and will also trigger very attractive basic off of $773 just made or programs.

Obviously, triggering significant free cash flow.

Well what is really important in that aspect, if you're familiar with it freebies. When you see this the growth Cabot all family $50 million.

Associated with the underground.

And you looking out to your sustaining capital.

End of period of 20, 528, or fondly 60 minutes a significant reduction in the approach.

Very important news.

Is there some ounces there are left behind in the picked as a result of this new approach.

Some very good down so far and now it's a movement and transfer if you're well to the underground.

A lot of the freight reserve mineral reserve, establishing a reason there underground are now sitting.

And the resource category.

At 12, 75 with no more stockpile they may be sitting in the resource.

But as we move forward and establish the underground reside the tremendous upside I.

At the better gold fries with or without the exploration to turn dozier sources into reserve.

So in short.

A higher gold price in the period of 22, and therefore will not change our mine so how we mined effect.

The pit shell will get locked.

In a higher gold price, where do you think trees the free cash flow in the reason I bet.

Is trying to and try to use a higher gold price and milk or not and create a bigger pet will create and our view.

Between 506 700 million, if additional costs and therefore.

We're doing it.

Better using and enjoying profitability and free cash flow.

However, in the underground or higher gold price well triggered a significant not flights to extend the life of mine.

At new Afton.

We've looked at about the same way.

We look at the period of 2024, and but look at a period of 20 528.

This is key when you matching as Rob will show you at the end how is the superior court inside and allowed us to engage.

And then everyone on met space. So the 2024.

Obviously, the period, where as John will show you, we deplete the current cave.

We entered a bit to be three zone, we have some period, where the production goes down a little bit, but which could be offset by keep adding some good resources and reserves from itself is almost surrounding.

But now the laugh and taking into account pagans aspect.

The 2024 remain very attractive in term of production and cost.

And cash flow, which could be re injected into their drilling capital that we've estimated about 460 million for the C zone over that period.

With some sustaining capital.

You take the combination of the sustaining and the growth capital for the whole plan.

It has somewhat increase a bit from the last land, but not the plan, but not significantly has a little more has been added two.

Remember that over the years.

Yeah, the asset has been very successful to replace and maintain.

The level of reserve, which have stronger with time, a little more sustaining capital and so forth.

Free cash flow of approximately $1 billion, if you're looking at a three daughter copper in 13 or if you're looking out at 50 50 to 75 or any combination in between.

[noise], including a potential total cumulative cash over $100 million during that period you built.

The plan is very sound.

And very interestingly as I said.

We believe that we have pretty interesting exploration upside as we returned to drill with way.

With that in mine I will turn it over to a rig Vinay Vice President General manager.

For a little bit more details regarding the plan and the year by year. Some aspect key element on the technical fine.

Eric.

Thank you.

Thank you very much.

Good afternoon everybody.

I will serve Gertrude this.

Sorry.

Oh positioning I noted that some of the words that we're going to use in the presentation. When we're talking about the mail. That's located here with the offices were talking about Intrepid portal is around here crushers. There you open pit and phase two will be referring for phase two position over here and then regarding.

Tailings management water treatment that water management bone is in the back your properties around 23000 acres.

I rental mentioned a few times freak accident. So on this terrible Newtek ripple technical reports and life of mine as to objective is to demonstrate that we can bring rainy river back into their free cash flow position and that after that that the life of mine that we're presenting can generate.

The best NBV.

Now.

In order to do so and the question is always went into this happened and the question. You answer is in Q4 of 2020, and we can say sustain this all through the life of mine.

Now we need it there you'll get the pit and two you'll get the on the around looking at the fifth.

We look at a small or below that.

Like rental mentioned, which is focused on on medium and high grade, but very important is that when you were leaving behind 150 million tons of ways.

And when you take this amount with our fleet capacity, which is around 55 million fund. This is almost remind three years of mining fewer ways.

So we're leaving just behind and this is going to help improving the NPV. When we're looking at the underground mine and colored blocks are the ones that we will be mining.

The fact that we're looking at the stopes and the zones that are very close to the pit reduces dramatically the DVF and compared to previous plan for which we had a portal entering and trip. It and then going through all the way below deal with young zone, So and now the ventilation raises we we didnt.

Did that and now we're entering the difference zone from didn't fit for portal closer shorter.

Now the Grey zone represents the resource resource that still can be a mine, especially if you have development done and really close with the blocks and colored.

Degrees, a modicum of what could be done to go and get these resources, depending on the price at the time.

Now the general approaches that we need to use the costs you actual costs that we're dealing with in 2019 was a very good year for which we kind of understand and Weve trace than we followed with different stick chart or cost. There's also the geo technical from the site.

We're dealing with with drains we're using which you're hoping we're dealing with buttressing at the I did see any so we needed the factored this and it wasn't in the past now of course all of these.

Opposite all of these jet Geo technical challenges.

In capital so we needed to re optimize the capital increases capital that certain places, but then we need to see how we can reduce it at the other places.

When we were looking at young around and it's to go and to go where it's profitable now there's a question of timing here of building young around so we can maximize you had great from the underground and the you'll read towards the end of the life of mine. So there's a question of timing here when we're looking at the open pit.

What it does it's that the strip ratio from the original project going from 372 to two Fivethree I. We're looking for a team to construct a t. a me that there's going to take 92 million tons processed on instead of 120.

And we're also looking at a an impact on on killer cost because we're gonna have like a smaller west mine rock stockpile that smaller T.N. make unfair from before.

On the case up the underground.

Significant reduction by accessing five portals for from inside the field I closer to the to the ore bodies.

We're looking actually before this higher grade to be to be.

Factored in and a I did with <unk>.

Yes.

So I'm our lights, we're looking at to produce 2.3 million ounces cash costs at 65.

Cash flow 557.

Capital fiber you fix.

There's a 56 minions, which is related to younger ground portals ventilation raises adding back the ones that we will need for Britain different zones, 5% discount that and then be the 421 million.

The mineral reserve.

What we need to understand is what's the situation with the with the reserve now the beautiful with lines. Then you feel the orange outlines the open. So we haven't really lost the metal is just that it's not economical to minus and when you look at all the while all around this is the 150.

The million tons of voice that I'm talking about.

If we look across section again D. N between we can appreciate the big amount of waste that this everywhere in between the ore zones that we need to pull out. So if we don't pushed a bit from W. line to the Orange line. Then we don't want to open up on the side. If we don't open it up then.

The reserve resource that measured and indicated and the inferred which are in between the two lines are not going to be taken.

So basically this plan is looking at.

Producing medium and high grade for 46.3 million done we're going to my 21 million tons. Our peak stockpile is going to being 2024 four D. A they don't agree.

We already have 5.9 on the property for which 1.7 is medium grade. The underground is going to produce 4 million times and so we're going to mine or total of 70 577.5 million tons at 1.06.

Now the impacts in between the two projects on the reserve is the cost the cost is the big or the big driver and the other one is recovery based on the metallurgical model.

But again like where new mention the reserves that were going to the mine would this this this bit will bring a stronger free cash flow starting in Q4 of 20 Duane.

Now if we're looking at the impact on the underground reserve not the small to blue lines that we have here and here or a transfer from the open pit reserves to the underground reserve.

But the gray is the underground reserves duty.

Underground resources, so basically from the original drawing that we saw we could still go and get that was really those resources. It's all depends on the price of old. So that we can actually continue with this development. So we're looking at mining more profitable underground areas, if it price ago, let I wasn't.

Again here measured and indicated and inferred small drops if not pushing that that towards the boggan. We're not opening decide we're leaving it.

Yeah.

He milestone where we're looking through the life of mine 2020 is a very important here are we're working with and optimizing shouldn't firm to improve on our process or we can see that during the year. We're doing small raises at the T. M me on every year, we're talking about like a meter and meter and a half yes.

On 8.5 kilometers this is what we need to do.

We're we've done it started to address the Geo technical issues at the East My remarks talk filed with weak drain that we started towards the end of this summer we will complete.

This year.

We will start a portal in the intrepid wrap we want to drive 600 meters and to go and see that see that that ore body and we want to discharge big Big thing. This year, we need to discharge water like if it's a normal activity. The 5000 discharge water yet we're always looking.

Reading and we'll building too old water and this is one of the problem we need the started discharging, but weve put all a lot of the elements in place during 2019, and we're completing and when it when you. So we're in position to discharge water.

Looking at Twentytwenty, one will be mining and raising that the army twentys went into overburden stripping we will finish the overburden. So we'll be in a position just a minor off like any other open pit.

Hi, It's also will have the first the internet portal, which is going to be that was own 17 that there's going to free up.

When it went a tree mind you open it start ramping up the underground production.

I read the tea and me again when Eattwenty four third portal is going to open up as we finish a phase two we will be able to go at this 0.33 NHS zone from the underground.

Raise the T. M editor between 25, this is where the fifth is going to be exhausted and a in Q1.

We're still need to do with the EMEA raise at that year. So we can process for 2026 to 2020.

Now when we're going to finish and 25, the a bit that's going to allow us to open up to order portal to go video and continue mining right and there are a bit.

[noise] pointed to when you eat it took us at this is where we're going to process. The low rate and this is where the mine needs to be at its peak production. So we can use the best great coming from the underground and makes it would there though right.

We're looking at mining the assumptions that we used when we're looking at the mine physicals. Okay is that we need to use occur in the current prices.

Everything that this costing us at the moment, we need to use this and this is what we're doing we're assuming productivity performance.

With a little moderate improvement this is what we views into modeling this.

Slope oversee the opening of the open pit was not really considered than previous report. It was a it was done with shovels and trucks and actually have to put some dozers and bring it to the to one so there's an increase costs here that we're addressing the week drains and of course in these condition is that then that the fit.

Can supply dynamic that we need to would do the about the down so buttressing of the T. I mean, if it is can supply all the life of mine in 2019, we actually had to.

You will worry just to supply. This if we're looking at the underground we had the an updated cost.

What a with the with AMC that we're working at four with them on the underground. So you underground was factored with the cost of today, what's on going out of them on it.

Our looking at five portals.

And we're using the same mining that does in the previous reports show we stayed consistent from when I when I reported that the other.

And again, we're looking at starting this year 600 meters of ramp to go and Cdns rebid.

I for just technical report, we didn't you a.

Yeah.

Sorry, metallurgical model based on the hardness and a their recovery. So we're applying this new model through the life of mine on the process portion.

Oh I graph of the different a at great and a mine production is going to be followed by the table. We can see the profile of the agreed have dipped as we advancing towards 2025.

Quite important there isn't 2019, we can see the mine production in terms of war. So on the yet 6 million 6.8 million tons, and then 2020 were going towards the 13 and the 15, So we'll understand where there's a bit later on and then the associated ounces, so creating a more profitable.

But in the underground at two of 75 and these conditions.

2019, we need to understand when you 19 here because we we produced was 6.8 million tons. We produce expedite on that 43, we just strip ratio of 5.33.

If we're looking at 2020, we're going out 13 million tons, and then 15 and then but we're looking at DXL fit the 55 million funds.

In a row and this is this is where it's the big differences in 2019, we needed to mine, what we've called Phase one I've reported several times on it. So we had the equipment have to go at the bottom of phase one.

Sometimes we took out 16 million tons of <unk> overburden.

We need it to bridge you snack before the buttressing the T I mean.

The pit was not supplying that because going in phase one is bad country and then we're in a wind overburden. So nothing for it at the EMEA. So we actually mine 6.3 million done outside of that bit Isaac worry.

And then since that did produce only 6.8 million tons during that year, we needed to take 1.2 million tons from the stockpile. So you've got all these big equipment during the year going from face to the phase one to the quarried back to the.

Back to the stockpile and they were running around like that so you're not set up to have really efficient mining and bringing.

Some lower cost. So so 2019 was done we had to do it. It is there when you're looking at 2020 and so on we're looking at freeze to all the equipment. This year is in phase two and three street is right beside it. So the equipment is actually working on ventures big long benches and.

And we're just mining it like we should be mining instead of being having the equipment that do it replaces differently.

So this is going to change and this is why we can produce this 55 million done during the year of expense because everything is at the same please.

These are just expedite on offer is going to help us with the tonnage factor a one or the impact on edge for reducing cost is going to help us also.

Here, we're going to see if you if you slide similar to this one which represent spit protection.

One thing they're all at the end of the year for 2020 until Twentytwenty fight. So phrased do is this one and this is the one that we're advancing this year and for with the bulk of the mining in 2020 is going to come from display initiate the bottom in the back here, which is a little bit of phase three at the same thing.

We're going to advance in 2021, but then in Twentytwenty too that portion of the fifth is going to be completed we will be able to initiate our first in fifth portal for what we call. The 17 zone right here.

We're still continuing for the fourth retreat and DHS zone, and phase, two which is which is over here.

So we're progressing.

And then in Twentytwenty for Phase two is completed zone for Threeq rezoning is available we can start to another portal and Dragon underground mine from that base.

Another year end, we finished a bit yoder yeah.

We're in position to start the other two portal go beyond if it and takes woods there.

If we're looking at the underground physicals.

Now we've said that we wanted to start the development. So that we can maximize production around 2025, and then do that million tons, a year and 2026. So we'll have to slow year ramp from within three to 24.

But we need to look at the nice said, great that there's going to come from the underground and this is why we need to go there and maximizes right with the lower grade towards the end of life 20 627 here.

Okay.

Yeah, and around physical mine and same mining that though as I said previously we're mining for 4 million tons from underground peak production is going to be 3100 tonnes per day or beginning of 20 to 26 average we saw the grade that the average grade for the life of minus force.

70.

Our fleet is going to pick up but the or is going to come out from from the underground portal, there's going to be a smells a small stockpile and our defeat is going to go where the order pick the material and bring it to differ.

Here, it's a plans you have the sequencing from the underground we have the Intrepid zone on the right 17, it's going to start from the first one from inside the fit then for three or three and finally, the OEM when the fifth is going to be completed.

Cross section.

Of the site.

Interrupted again, the too and this one we're all new showing a what we are going to mine with this life of mine, but remind you that than the original slide in the first at the beginning although resource that this there is below and again if the gold prices. There we will be able to continue mining.

Depending on their condition that design.

When you're looking at.

Mill production.

Again, we can see that the head grade is 2020, winning is that your own <unk> fine, but when you coming coming up a what's very important hazards maximizing throughput over the life of mine.

Mining, meaning just 9.5 9.6 million ton steady four to eight years is what we're shooting for now the there's the up different degrade during 20 425 and in 20 627, mainly come from the underground.

We're looking at the 20 2019, Milford action, we did 8 million tons and we're going after it out for 9.29 0.6, maximizing the truthfully here.

Coming back to what Renault was mentioning island gold production is this going said he said he increasing steadily from 2020 up to 2025, 2024, which will be in the 300000.

All of this is model, which would then you are hardness and recovery model is factored in here.

Okay.

Now coming back to that the I mean.

When we're talking about the team and we're talking of the nor damaged. Some people are worried about is the nor damage. This section when we're talking about the with them. This is that portion and the south them as this portion.

A large grey zone is the buttressing that we need to do to.

Maintain our safety factor of 1.1.

At 1.5, sorry.

And when we're looking at the T. M aim weve addressed and Abbas seller, one cell to cell tree, but in the month of October of 2019. All of this is one big cells. So today when we're talking of the T M a or to tailings management, it's one big sale.

Water management bond this out here Bcr, one is here and Bcr too, which is our final stage for cleaning the water and having complaint water is right is being constructed this out here.

Now sailings in Warner increment water management this represents 30% of our capital.

Since we need to buy trusts and keep these slopes of 11 to one we need to rock from there.

There's a significant work that was done in 2019 to allow us to discharge the water.

Water treatment that was commissioned in September and Weve process up to 20000 cubic meters of water per day in October.

We've managed to install the diffuser in the find wood River.

It's late November. So this is one of the conditions for us to discharge that was done and Bcr too which is the final treatment stage. So we can have complained water was initiated had yet another 2019.

And we're looking to compete is by spring of 2020.

Now the data, we will be able to control this water balance and it's coming during this year, we need to discharge, we will be able to get back at the GMI and you look at how we can re optimize these no because if we're at the moment to construction has done to hold water because we haven't discharge, but I've. After this year when we will be able.

The discharge water as a normal activity, we could go back and receive we cannot.

We optimize these this at the end making friction.

Operating cost.

Now the cost of the open pit and 29 thing we're talking of Threethirty too.

We factored like I've mentioned the improvement that we've already realized there's going to be and in fact on edge, but there's also a monitoring and the optimization to contractors contractors were used but there's a moment for which a we need to start working.

With with our own team and this is what we Oh, we started to do with the with this life of mine is to start manager and optimize our contractors.

In the different departments. So we're looking at this profiling cost for you open pit it starts going up and 2024 because.

Theres the a portion of the underground that's factored in here, so who just want to look at the 20. The open pit portion is from 20 2023.

The table of supporting the graph the 332 of 2019.

The open pit, we're going forward to 74 to 57 two before this is more of in line of with what we're living at the moment.

And we're shooting for.

ER if I go back to the 2019 and I take the work that was done in.

The east out crop to 6.2 million tons and I bring back that cost that was done I would have actually a cost more around to 95.

Oh, sorry.

After.

Yes.

[noise] you underground mining operation.

ER 2020 to 23 is a development.

So it's the higher cost, but after that the objective is to bring in line mine production around 2025 like the graph isn't to produce this this million tonne per year.

Of course, a mining cost is going to go down as the government is finished.

[noise] stable for the underground mining.

Peak production and again for 2025 that were working for.

Hi processing since were.

Optimizing.

The males with a maximum true portray the life of mine and the answer is gonna be in fact tonnage here.

Actually the life of mine, reducing their costs for us.

Loss the effort and the work that was done on the reagents the different grinding media all the small optimization that is done working with a contractor.

Reducing them helps us bring their cost now, but it's maximizing throughput the big driver here.

[noise] processing cost.

Again, we're looking at passing from 8 million.

Just a 9.29 0.5 and the cost profile from seven five to 728 over the life of mine here.

Hi, Jenny I, mainly driven by processed on.

For 25 in 2019 going to 350, there's a small reduction as we go the difference we purchase the camp. So we're not a renting to camp anymore and also there is another reduction here, but the it's because even though there's an increase and manpower for the underground mine is chartered young.

Around mine and not that you open pit Jenny.

[noise] when we're looking at the capital spent 642.

301 is 40 open pit so what's what's entry hundred and one.

We're not we're talking here about PCR the principal component repairs track frame motors, maintaining the fleet of there was a shovel trucks throughout the life of mine is in here.

Everything that is overburden deferred waste is in here sloping isn't there. So this is a cost that we need to have for them at their to move the material. If it's not in the capital. It's in the operation. So we have to.

We have to work with this one to move the material when we're looking at the underground sustaining is up 64 million.

And then there's the underground non sustain and 56, which is mainly related to the ramp and the ventilation system Youre passes.

Process and failing hundred 85.

Here, it's the several damned if that we need to do that buttressing. The barge that booster station that we need to it to install all of this this factor in here.

Now.

When we will be able to when we won't miners just said this.

Water or this water and we will be able to discharge, we will be able to come back and work on this 185. So we can.

Design or the them differently and improve their cost here.

Infrastructure is mainly related to competing the or disrupt drop that we started yet warehouse and a week Dream campaign on East mind Rock stockpile is included in the 26.

When we're looking forward at that moment, where we're looking we're working with a firms. So we can improve their cost.

On the operation, we already had made significant improvements on their drilling on the blasting, which improves also the a the cycle time, we're looking at odds seating. So we can have their trucks running for 11 hours 11.5 hours and change the operators over.

Overburden read or there's going to be finishing twentytwenty too.

And when we're going to have the new truck shop, and the warehouse on sites is going to.

Plus a lot and.

Giving better availability due to the equipment.

Looking at the DNA.

The tailings bcr to again, we're focusing to finish this I by spring.

And started discharging water a compliant water as our normal activity, we're going to be able to do that we'll be able to go back again, and then work on the scoping and tried to see to improve this.

It may construction.

Concerning young around we saw in the winter the slides degree portion of the resource depending on how it's going to be the gold price towards the end of the mine.

The life of mine is to see where we can we can go back and continuing transfers from reserve resources into reserve and my knees, but decided this technical report does a window on seven years and this is right after those seven years.

Exploration a will not dark I'll leave me daily when he is going to have it is portion.

You are much I'll pass it to John for New Afton.

Yes.

Excellent welcome to new Afton.

Like the stuff from key features that are important to in this presentation to the top we see our current tailings facility.

Recalled at new Afton tailing storage facility and a T F.

To the right of the pages, our historic Afton tailings facility H.A.T.F. stuff.

To the left is our historic pit.

Over the past year, we've worked hard to further de risks seasonal and then there's five key items I'd like to discuss during this presentation, we're going to talk about how we've fully integrated the be Threed C Zone mine plan.

Talk about our Geo technical studies or mine design subsidence.

And tailings update how we're going to dispose of our tailings and the historic pit and how we're going to stabilize important to the success of this is our permitting timeline.

And we'll go through capital and operating costs.

Some key highlights of the technical report.

We have a low production period 2021 through 2024, we'll talk a little bit about that we've got some upside potential.

With this further levels lower in the seasonal or SLC area.

As well as sees on production begins Q4 2024.

Most importantly, as Renault mentioned, we're self funded project, creating 1 billion free cash flow dollars.

Some highlights over life of mine 918000 ounces of gold 746 million pounds of copper at an attractive price 610.

Our equivalent the goal.

And then NPV of 735 million.

2019 year end reserves keeps us flush with a million gold ounces and 802 million pounds of copper could see on the chart on the right. We've managed to maintain a relatively stable reserve resource statement.

What's what's as Renault explained.

Exploration has some great upside potential my colleague Mccamey, we'll talk about SLC D Zone East extension.

We managed to convert some of these up near term levels NFL fee convert them into the mine plan.

And going after them.

This chart depicts the detail of our mineral reserves and resources fully vetted by our Q piece.

Talk about mining.

This chart shows our schedule on the left if our lift one.

East and West Cave.

Ending around 20, 122, we've ramped up be three during that period.

That we wrap season went up in late 2023 with full production in 24.

As I mentioned this period here in the low production has some opportunity for SLC resources, if we find them.

[noise] mine production.

I want to talk a little bit about the back story.

To date.

New Afton has developed.

44000 linear meters.

Important in 2019 here as we ramped up our development program.

Our team dedicated team.

Came through met the total.

Meters.

And come in on cost and on schedule. This six this is very important for our future success as we further drive the development period in 2020.

Through 24, bringing and sees a C C zone.

Lots of potential upside for incorporating any near term or resources refined.

That's a chart explains.

We could see some great out production.

From 216000 ounces here to 97, reaching 450000 ounces in 2027.

Realizing almost 3 million.

Ounces of gold.

Equivalent.

Talk about mine development.

22020 through 2020 fours are key capital development parent you could see a dropping off in 2024, which Flanders in with our 20.

With our C zone ramp up period.

The chart illustrates we'll be adding major capital development and 2023.

Finishing off capital development in 2026.

Want to talk about be three.

So be three.

It.

Is that our ore body that will utilize trucked for.

Through loading shoots up to our current gyro facility.

It's anticipated with 61 drop else.

It's got to optimize apacs level and our standard undercut extraction in college.

Let's talk about.

He's all we've introduced the split level cave design on the north itself Perimeters. This split level cave design lowers our horizontal stressful further down to the bottom of the cave, leaving.

Reduced geo technical risk.

And less convergent risk.

As well as.

Less potential rehab, which lowers our cost overall.

Talk about fees all sees owns a dual axis decline three conveyors.

Heading down to our main footprint.

142 drop belzer anticipated, we remove the apex level in this design optimizing that I've mentioned, we introduced our split level caved design on the perimeter.

We have a gyro crusher.

At the bottom here.

Where we will transport the or up we've done extensive drilling and stressed modeling to understand as we head down those declines and into our lower footprint.

She is on located 550 meters below lift one.

We'll have a chat about processing and tailing.

We understand.

Our or very well since 2012.

Our grind throughput recovery Marty's recovery models are great.

Hence why we've set.

These mill rates to maximize our throughput through the life of mine.

Complementing that we can look at the chart on.

Gold recovery, we see values of 86% over the average life of mine and copper.

Reaching 90%.

With 2.6 million ounces recovered through the mill.

This chart illustrates our hyper gene or and blue.

Sees on on the right has plenty of pipe for gene or predominant less altered minerals at the top hyper gene or as well understood.

Easily processed has great flotation characteristics. We know this because we had a nice lot of it and lift one.

Well talk a little bit about our thick and and tail.

Project, we call cat.

Phase one comprises of a pay sector on the left and our mixing platform to on the right. That's this project is well defined well planned we're breaking ground on phase one in the near month, we've got a team of.

Experienced professionals.

And consulting engineers that has helped us with this.

What is cap I know everyone's asking that.

So what we're doing is the pace tecnor will bring our solid to a range of 50% to 61% will add a 1%.

Binder amending it ticking in amended tails, which brings this to a non flammable state that's an important item to to remember.

Why this is important.

It is our preferred area for deposits this isn't the historic often pet.

Were taken advantage of this pit.

From the old that 10 days.

So what we're doing is we're putting the entire sees on volume there's plenty of volume for sees on and additional volume for D zone, SLC et cetera.

An opportunity we're looking at is the percent ratio here in the future. We believe there's some potential savings of reducing that's meant cost.

With some further work.

Putting this into the pit.

Improves worker safety and minimizes our environmental impact the key item that we strive for and our sustainable program of mitigating minimizing our environmental influence.

So 2019.

Well go through some sequences of 2019 till the places fully stabilized so back to our key features on the top is our historic pet.

Our current facility is where we're depositing.

Sales right now and to the left bottom left is the historic AFE entails facility.

2020, tailings offshore operations brings us in the blue zones, we start stabilizing these areas.

For our be three operations.

[noise] first half of 2021 2022.

We bring our Tecnor online, we start bringing second tails up to our new Afton tailings facility. This is advantageous as we could remove more water, which will help and our ultimate de watering effort.

We further advance on the historic pit in the Blue shaded area.

The increase stabilized.

Zone.

Looking at close look this illustration not to scale gives us an idea of b three in.

First half of 20, or 21, and 22 Athree area will be stabilized.

And this is the contemplated zone for C zone.

Hey Blind station.

So we'll be taken a swath of the current facility in making that non flow.

Bringing it all together.

In 2022, we'll have our current facility stabilized on the lower right.

The historic will be stabilize to for sees on production.

We'll be depositing are thinking and amended tails into the new Afton pit.

Supplied.

Illustrate it.

On the left and right our subsidence influence zone. We received an updated back model January 20, twond either our modular for this program. The modeling demonstrates on the left there will be no interaction.

To the.

To the tailings facility due to lift one operation.

On the right.

Be three shows no potential interaction with the dam this needs to be further vetted with our you ours and consultants systems Hot off the press.

We're still not sitting on our Laurel fear will continue de watering as if we're going to.

I have that interaction earlier contemplated in the design.

Hi, this important this really helps us with our design scheduling an operations sequence and maintaining the stability of our dams safe safety for our workers.

Our modeling correlates well with our actual field measurements.

So the purple here is our model.

And then blue.

Blue Diamond our actual results this is important to understand.

Again when we.

Where do we anticipate interaction and setting back or milestones in sequence for stabilization.

Our subsidence areas well instrumented instrumented as you can see.

These are tied into real time data.

Why is this important.

Helps us understand our modeling or actual.

Results correlation.

Helps our scheduling of stabilization Keats, most importantly keeps our.

Dams.

Solid workers safe.

We've done an extensive program of subsurface monitoring understanding and improving on our Geo lock geological structure data. This is important tied to the bedrock subsidence Andy.

Surface geological structures, helping tie that in.

As I mentioned permitting we have to keep permits be three permit which we expect to receive first half a 2021.

And our sees on permit.

First half of 2022, how are we going to do this while we've been working hard.

With early and intentional transparent engagement with our first nations group are very important partners and our key skid stakeholders.

We've got a positive relationship with our government positive I say as our recent newly appointed BC Minister of mines came to our site last week.

Committing to keeping our operating mines operating and our BC minds competitive we went through our permitting me.

Further commitment to take back to his office to work hard on permitting in a timely fashion meeting our.

On tax paid it needs.

For the milestone dates.

Want to go through this is a smidgen never left as Renault mentioned Weve reached nationally and internationally.

For the best consultants engineers that we can to help us make this project successful.

We've talked a little bit about our mining costs. During the period 2020 to 2024 as I mentioned the costs.

Our higher due to the volume this decrease during that production period as well as we're tracking.

Trucking for B, three we could see we level off in 2024 to a stable.

Attractive mining.

Great.

And cost structure.

As I mentioned 2021, we see a change in our cement addition, due to second an amended tails here, which remains relatively flat.

Lightly degrees decreasing through the life of mine. This is the opportunity we're going after to drop that cost structure now.

The numbers, we could see suppliers and consumable 20 122, we go from Buck 82 to three Bucks stops the opportunity we're going after.

DNA costs remain relatively stable over the period slight increase due to the lower production period and volume accordingly.

Let's talk about capital.

635 million 460.

Non sustaining.

We can see during the 2024 through 20 2020 period through the 2024 period is our largest span.

I want to talk about the mine development mine development costs or 33% of that and as I've mentioned before we've done 44000 meters developments. So we're confident in.

The cost and the certainty of this combine that with our projects we bought a excellent integrated operations and projects team. This is important to ensure the best.

Capital certainty that.

And success of our capital allocation during this period.

We can see tapering off 2024.

Through life of mine.

Other opportunities.

Focusing on focusing in on tap we're going to go after.

Our cement.

Big contributor to our Opex cost, we're going to go after that and reduce that.

Subsidence in stabilization, we have opportunity to look at the area of stabilization closely and the mechanism of how we're going to stabilize.

Importantly.

One of our key values is innovation and creativity as well as minimizing our impact to the environment.

So work on electric with fees on this is going to reduce our carbon footprint.

Leased 50% or more and.

And we're going to automate this thing.

So thank you.

[noise] like to introduce Mckamy.

Good afternoon everybody.

Louis that Oh, we did they explorations lies.

Two.

See what we advise during 2019 of both us it renewed even we are dealing the baby step of the exploration activities. So we got to speed in the recognizes the level and well done during 2019 combined with a is federico they.

The.

Shaped out to two important the and priority targets for a full off three linger on the northeast and size of Ah Ah.

New goes to grow their tenement an idea that we called northeast.

Trend Andy's related with the of approximately 315 kilometres sort of shear zone. So we are trying to define a completely different communitization than that.

When kind of massive sulfide to dispose. It does he is a renewed Eva and focus on a unlock a a potential for I agreed the shear zone or shield the type Oh the phone.

You asked can you ask Tony is a lot more mature.

The expiration, we never pools, Oh, a CVC during the last the iOS and do a.

So they assess this a quota and the definition of a season then into fast here, we are no and thing getting the new phase that to see an addition of offensive.

It was sort of going to source to extend the life of mine nothing else.

This year, we had the two oh targets underground near mine and one on the these two scale.

And we add the another one that they will.

Go through a in the next just by the first one.

The thought of good was that delineation infill program, but we add that to improve the confidence Oh. They asked us see immunization, we were successful to both Oh delineate a day, the reserves and resources that where.

That's a targets and we we see the and we increased two full did the volume of Ah So csfc.

As.

John mentioned before has already the three leave to Ah Ah the to the life of mine.

We do have a little more resources and what's we also defined he is a new settlement unitization the coral vessel to see.

He is a high grade the for both golf and goals.

Second targets was a exploration or don't lunch to the season to the fine or the new or different cold the diesel.

It is a a three key architects are structurally and we went reeling from the available database underground so not a they really.

Best angles to achieve.

The targets a week three to five Olson one even from a sort of fees that are.

It was abandoned for technical problem, what we have seen a through good the drilling and they asked the result is that the.

At the body's pinching and we couldn't get through a ended the depth of the drilling is around 5900 to meet the below sort of phase so we postponed the.

Additional drilling to Twentytwenty when when the development, though the mine reach should the baseball season.

But something interesting and is there anything we'd they still Rico data, we have a under need the base of the season. They will open the block cave that he is and we already have a inventory of mineral resources in a I mean I infer that but these are.

Around that 10 million.

So with the outrage ore grades like season and is that within a day the dashed line.

Line underneath the.

Season.

These these area where do we.

Have these inventory and do you see it opened a bit.

Another it's out to get that they mentioned before wasn't a isn't really that they did.

The thought to get that where we add to us.

The status of the is what we call that so Cds and now we changed to east extension.

He's a new mineralization that Oh, we have a defined that he is a beneath that the C and the parallel to the east the Odcs on and visa is an area that the easing plan 300 meet with 300 meet the by fourth D. and we thought column to death the.

We know right now he is a 700 me.

What does into things that those zone that so we drilled the oh, so having a good result from all the I see all that extend and down deep.

This day, then you know they certainly seem at a assessment fee and again, we have really I agreed coal for both gold and copper and you can see the highlights I said results on this slide.

What a happen how soon we define do news on these heath expansion.

We have a we went back and try to find a and refine our geological model. The geological model at New Afton was related with the tablet body that was a bad thing from sort of face the on the old thick opened fees down to the diesel we the new data and the in the definition.

No beef so.

[noise] east extensions phone.

We are trying get too to remodel and the D and obviously, we need a lot more data to the final to find his mother, but as today. So we're thinking that the instead of being got one sabal everybody. We have to fight on the dilation zone one with.

The pizza, he's cave SFC and east so.

East extension song and another on that he's containing the west case be three seasons in diesel.

And you can see on the on decide that both the long section and.

On view, we said two oh in surfaces additions of why is important because because if these is the case and we will assess a they they are the mother is that the if we have to dilation of some better that's opened to the the falsely BDC, Florida.

<unk> and so to find the numerator communities.

And last at the new Afton unimportant target that we are chasing.

It is a a disease to escape is up 12 kilometre longer a structural trend the called the Cherry Creek friend.

And is only if you could almost that away from the me like nothing so has the potential for discovered in so up a bunch of two of the life of mine.

Well done so far or was that well was the inclusive of a jewel cameco survey own old through the the land package.

And.

The Geophysical survey.

The interpretation of both data and and Ah has the fine so anomalies both for a close to sort of face a if he settlement gold and deep seated the copper and gold the.

For free.

Seeming to New York.

Thank you very much.

I will now turn to Rob.

Okay.

Thanks, very much I guess my job here now is to.

Take all of that detail and to still it into a my favorite thing cash flow.

The.

<unk>.

[music].

So this is a chart that shows up two lines and really it speaks to how we're looking to solve the balance sheet issues that we face and that is a a 400 million dollar bond maturity and 22, and a 300 million dollar bond maturity in 25.

Bottom line.

Under each of the scenarios that are there on a base case scenario at 1300 goal three dollar copper, we generate over $1.6 billion of operating free cash and not a a optimize case or the a they expected or a sensitivity pricing case, the expected that cash flow generation is over 2.2 billion.

And that sort of the this chart itself is the bar chart has done that base with a with the dark.

Color being new Afton in the they are the lighter blue.

Being rainy River you can see in both cases Ah Ah post 21, as I said earlier today, we've got two assets in Canada that are generating free cash.

In in those scenarios.

This chart is again, bringing together a some of the bits and pieces that Oh, the guys I presented earlier I think as a point out just a couple of things here and not as in the 20 to 24.

Time period, all in sustaining costs that rainy or just over a thousand dollars and just under 800 at new Afton as we move along and some of the sustaining capital gets removed and gets cleared out of the way. We see a are all in sustaining cost dropped dramatically coming to our our life of mine.

Cost of under $1000 and in both both at both sites the.

The one of the key a pieces of this is when you look at sensitivity versus base case, a rainy river's NAV and cash flows double or more than double so very very elastic to to gold price new afton not so much the case, the tradeoff between copper and gold kind of keep some.

Positive, but it keeps on in the same range.

So I'll go back to the slide that I, just presented and speak to it a little bit, but really as I look out of our balance sheet and what we need to solve for it really comes down to the two alternatives and arrows that I'm that are on there and that's their strategic alternatives and their capital markets alternatives the strategic alternatives.

Obviously have us bringing back.

Cash flow from the big years into this year and utilizing it to take care that $400 million Alternatively, the capital markets alternatives as us moving some of that 400 million until later years to match up with our cash flows and just as a side note capital markets. A alternatives don't include equity and this piece.

So I can tell you that we're working very hard on this there's not a happier guy on Earth to have two plans that I can speak to and I expect that there'll be solutions that combine both of US both of these alternatives.

In the near term, we're not going to let this go till 2022 and hub and talk about our balance sheet consistently from from here until then.

With that I'll turn it back to a rental.

[noise].

Okay I hope you can.

[noise] [noise] looks like there's maybe a problem with the right.

But with the microphone.

What we just heard about their last Oh, we're and a half or so.

Which take for granted of course, we'll be filing our technical report within them back 45 days. So we believe that this presentation and any other information you can find on our website will provide a lot of details for everyone.

But if you on a lift in the room here today I will be out there are telling our story of course in answering questions over the next few weeks down the road.

Beyond this presentation as you heard today is.

The tremendous opportunity how should we entered into new phase.

To improve on our balance sheet, returning to profitability and free cash flow.

Which will position this company for a very interesting and exciting time down the road.

I'd rainy River you heard Eric detailing use plan the prior to your obviously other in your river will be two turned a corner somewhere in 2020 and should the price Friedman higher gold price. There is obviously an important did have turned the corner earlier.

We expect to kick offs to remain high in the first half the year as we complete and put the capital behind on.

Well once we turn the corner into Q3 Q4 will will remain at a price of 3100 and above we will remain a free cash flow and.

Quite frankly, as you saw as well the cost going down as we advance in the period of 20 to 24.

This will position rainy river in a very attractive free cash flow, which will allow that the same time.

To improve and you know and our and our impact in the community as well we haven't talked much about it. This is a technical fashion, we havent talked much about the sustainability aspect and what it does.

And our tremendous commitment to our people in a community and extending the life of mine wall in the short term you may looks like a reduced life of mine.

Actually provide a profitable path forward.

Which is the basic returning money in the ground.

And providing.

Providing stability around.

And only stability in profitability it creates a fortune.

So we believe when the sustainability sites in all aspects of the people and for you and stakeholders.

Not a very important core value of this company.

Worms will significantly ship and move the needle as well.

We haven't talked much about ER for nothing at all on the Blackwater I just want to touch a quick <unk> based on the Blackwater as in 2019, we've completed an internal scoping.

Which stop me unlimited meet the talked about the result of it as it was not a 43, one on compliance, but a pretty detail.

For those are you going milled me.

Usually not thing too much and that superficial.

And we dive down pretty pretty deep in the on the airports and that the a and learning from the rainy River exercised.

[noise], where you could benefit and improve great and lower waste lower strip ratio. The question at Blackwater was always could you make it higher grade while you would not lose the most important aspect of it which is the strip ratio.

So we're very pleased with the result, we've seen internally and over at a few months as we advance they will be some decision made what's the next.

As we entered this next world and fix and improve our balance sheet and we become for profitable.

And free cash flow, while I'm, not saying I'm here to tell you today, we're going to announce tomorrow, we're going to bill like water in injector billion, well with him wedding opened a tremendous door.

What do we do with 8 million ounces that we thing when we thought.

Good generate.

Something interesting.

With the view that block water and 8 million ounces currently valued I bet. The news that means you too.

Is.

The best Optionality for this company.

So we'll start paying much more attention then as you know in 19, we would we receive a tremendous support there for partners first nations and Gavron men and we shifted significantly with the approval under the federal provincial.

And unfortunately with the situation we were before there was not much we could do in the short term and as we are advancing improve.

Through partnership or others.

It could be some interesting are fortunate.

Too early stage or heard Rob.

We're still hog the transition all up improving our balance sheet, but just want to remind everyone.

But eventually.

We will be talking or the Bachelor Optionality of this company moving forward.

In short this presentation was.

Was it a huge update.

Our story with different it looked on for there to be a that they want to a new phase, where we're going to historically if a discount.

We've been struggling for a few years.

And now we feel that we're turning the corner.

And on that.

I would open the floor.

For some Q anyway.

And I would I would ask anyone in the room I want to address a question to please use the microphone and introduce yourself. So anyone at home could benefit them here your question.

Yeah.

Maybe I'll start on the on the financial side on slide when 23, there's there's some pretty good details here just to understand our the free cash flow projections your net of a corporate items, including interest expense Genie.

And then charges so our our rainy river streams, all that sort of stuff are included okay. So.

You know any in the current situation, we're not the full sort of expenses are included a and you know you've $400 debt and 2022 and you'll be generating lesson that what do you think is realistic outcome data points.

To resolve Situationally Tonight first maturity.

Like I said I will not going to get into details, but there's a lot of a strategic in capital markets options available to us.

So we're not waiting till 22 to solve it and we're we're working hard in the near term to take care of it obviously, you're right, it's not coming out of our immediate cash flow. So that's where the the model of you know how to leverage later cash flow or move that further down.

Ultimately, we don't want to see the same level of debt either in a <unk>. That's part of the answer we're not just going to kick and don't expect to kick the full 400 down and sit there sitting in our business with 700 million a debt.

So our solution includes a reduction and maybe a combo of of those capital markets and strategic alternatives.

And when you when you think about sort of managing the cash balance what would you see the minimum requirements are for that business $50 million to $100 million, we have and that's really centered around or concentrate sales and and the working capital.

Issues around that.

Thank you and then on Ah on slide one or two there's a sort of timetable on the milestones upcoming for new Aftons permits.

How does the permitting for the into killings tie into these items or is it included within those milestones listed.

Maybe John.

Yes, three be three permit include.

As well as stabilization.

Activity.

Okay.

Interest or just to clarify soon.

When would be three productions are BT production start second half 2021.

And.

The latest possible point to receive the permit would be.

Yeah first half 2021 or is there a buffer period.

Isn't there yet or.

There's a buffer.

Hi.

And there.

And then for for.

He's me.

Rainy River.

There were there's a bunch of different tables, you did mining cost for certain cost Genie costs and there were declines forecast for 2020 over 2019, roughly 10% to 15%.

What's driving those changes for that schedule Eric.

The biggest impact can DXP is done.

If you're looking at the mine portion.

There's a significant difference between $43 million 55, yes.

Mine units when you 19, we did 6.2 million outside the pit that it's not considered in the experts done. So this strikes 29 up towards comparing to 2020 120.

Now if you're looking at mailing. It's the same thing you're meeting 8 million tons and 20, a in 19, but then you're going to 9.2 million done.

When 20.

The impact on it resolved.

Other small efficiency and tweaks that weve updated drink 2019, whether it's with the gravity circuit.

Talking about like.

Cyanide consumption there so do consumption all the d. that we've worked on your year.

All factors in and reducing the cost, but the big driver is the impact.

As the same for did you nails.

And what I could or could maybe on the Josh.

Yeah.

You know like this ramping up.

Seven lies Asian Syria.

Likes to say that are the successful ramp up in commissioning should have happened within 12 months right.

And then you start from the 12 to 30 month becomes your observation period.

And ER and unfortunately other I know you did say wait too long and we've expanded door.

14, and I must say on as much as I. Appreciate every single one person external services that outcome and help us.

It has extended wait too long.

It is time now to do or things are cells.

And I think now with the satellite station that took place.

I will provide Eric and his team really now where they're focused on doing are thinking.

Removing a lot of service external services will also be are big driver.

And last question in terms of the the tailings dam water management items. There were some discussion about focusing on that just rainy river.

What is the outlook for that sort of risk in 2020 versus some of the issues account.

Good question, because 2019, when I arrived in April wasn't ready to manage the water.

He myself, but the work that was done during swimmers summer 29.

Okay to address and the way we're preparing for 2020.

We did that 1.5 nanometer niche.

On the north.

Yes on the North East side, the eight water. We did another 680, yeah metered ditch Bcr two is almost are ready.

We've looked at the.

Fusion the river because we need to install this so we can discharge actually in the river.

We're in a much better situation to address the volume there is a big volume that this coming from outside on the property because you didn't have eased. It so that principle that he clean water team wasn't really a flight so everything that was coming from the surrounding mountains work coming inside that Yeah me. So now we're eating.

For forward that we use that during the you there your fourq to bump back some water or.

Since since the site can't discharge then you have to accumulate water. So if you want to accumulate water than you have to build your Dan hired and required you build your them forward. This now.

For the water, yes, but since you can't discharge and you go higher.

And and this is the situation for which we're in now.

Looking at the Bcr do which was the final events over the final finals, I'd say system to treat water, bringing some flying and were in much better shape in a in 2020, but then you go back at the beginning of 2019 water water treatment that was not done and we only commission this and.

In the month of September and started to process water in October so you aren't ready and I asked to address the water. So if you don't have a water treatment plant I cant discharge.

Discharge, because I don't have easy or so so then I'm keeping this water in the system.

Now.

We've built for them in 2019 to be able to all the water and when you're looking at the construction up to the life of mine. It is still factored that way because we haven't discharge I'm not going to factor in cost saving on a future improvement if I've never realized it and it's the same 40 operating costs.

Yes, sorry, if I can achieve something I can say oh, I can optimize here, even more and I have achieved that and I'm applying husk off but I'm not forecasting an improvement if I haven't at east touched it wants. So it's the same 40 I mean, we're looking at the T. I mean, there's upside to bring to cause on inventory is because if we can managers water.

Like we're talking about Dan I'm, not been I'm, not creating a leak and creating a tailings facility at the moment and creating a late night and keeping the lake, but I don't want to do this.

And you said, Josh the [noise].

Something gave before I pass through or anything but.

Something here I mean, when you design your project, Berkeley with all the definitely good there's a lot of.

Hey, good value.

One of it was the water baumann.

And I think what we've learned in 2019 is.

We'll go through its point.

The estimated was that you really need for discharging would occur.

<unk>.

And.

This massive.

Slide events.

And ER.

We're seeing things today [noise].

Got you better planned for more room, and that's exactly what we're doing there was a lot of catch up but it was a lot of as well because everything was design.

Only discharge in 2020, where the reality and Thats, what I was thinking about my opening comments.

The thing with the Geo technical.

There was no at the start the need to stabilize weighs down today, we know we do.

Those are the adjustment and all new baseline, though we have built.

In 19, and it's all know properly.

Properly weighted in the new plant.

So just going back so they need to Sony from said he going back to the.

[noise] mine plan that you have for rainy River I'm not sure it's fine, but it's the one where you talk about the mining cost per ton.

And Ah.

There's I think the last three years, there's like $30 million spent each year that three handle.

I find it.

That's an actively kathleen.

Those and spend last few years.

[music].

Uh huh.

Uh huh.

Yeah.

Getting there.

We're talking about Lifepoint, if they handled okay.

Yes 46.

So you got 20, 421, and 3.6 million tons that the re handles that's not something we need to see its I don't I don't see sorry.

Well it almost looks.

Wanted to ask a question at the time, Yeah I know.

It's a bit if a challenging yeah, so nice navvis fully [laughter], yes.

We're actually we're talking at the top the topline open pit mining Hans.

Yeah, and 20 123.

Yes victory is Randall and.

Yeah.

Right.

At that time as wireless and he lottery, that's trying to keep it takes me mothers.

Okay then.

Moving backwards and.

Any we handle its embedded within that topline for prior years right, yes, exactly that weve tried to that second line below that.

And.

Here.

Okay.

In the stripping you've got 2.53 as your overall like money I'm not includes capitalized everything over burden or otherwise.

So if you take out that the the capitalize time, that's including the 159 common capital right.

Well would be to strip ratio, if you remove the capital.

Can calculate that on what you have I'm just wondering if the capital number that you have.

I think you said 159.

Capitalized stripping.

Is that encapsulating, what youve recorded there.

[noise] grew 24.

And then not just in terms of I guess, you know you've got significant cost dropped coming through in front us in mining you touched upon for such cost improvement.

I guess my question, when exactly where you're going to get.

Start to do one rafi threats.

Uh huh.

Are there is there would be already an impact in the first water as we speak.

Engage we also are something we haven't mentioned a much like.

Back in December we abroad.

Did the full thing.

In general.

Engaging.

And another thing.

Ramping up where there are now fully engage in a reduction in operating and improvement of operation.

And ER as much as January is usually a tough one you know to start kick off for winter and so from where we already.

Things happening in the mining mining rate.

And slowly.

Large things for me back from now.

As we advance we're not taking ownership of everything as we speak but if you recall we bought from.

Here as well, which slowly you know.

Peter as you've drilled yourself with allowed your personal ports, so you'll see something back and already into Q1.

And as we advance horse in the year.

Decision.

Okay. Then my last question I guess would be the mining rate that you a has for this year and I noticed Q3 was 136 I know you've talked about the exit tons and the tailings impact.

But you've got if you're doing 151 case on what you said the prison capacity to sleep maintenance ran at capacity.

For the entire year doesn't leave a lot of room for ramp up over you know.

Yeah.

Tough winter or a three star cycle of the spring and we all know happens in April in me a in that part of the in that part of Ontario. So you got to hit the ground running on the mining rate. How how are you doing right now on the Moines, we're doing more than 151 went.

And the key thing that Eric mentioned and if it's not it's no no not even close to be an excuse is the fact.

All 19.

With all the mining our plant of the past them in and out in music and equipment <unk>, the inefficiencies driven by that with the drilled with the drilling issues, we had compared to you could see it into Q4 to something what's happening.

We didn't reached a plateau in Q4 Regis.

[noise] to go.

And like I said than they are like we're in a pretty tough month.

And very very encouraging progress.

And then one last one on rainy, but more philosophical question I mean, you talked to the entire year about stockpiles and you know when you have the stockpiles are at surface and you know you don't want to mine stockpiles are gonna be there too in a time and I've got protest.

You do have you know three years at the end of life of mine that or is it.

Smaller, but similar to the original any rainy River mine plan. So why did you stick with mining that 0.35 material because the problem is not that it doesn't make sense when it's going to process, but doesn't make sense as to design your picked an operation and Jayson.

And pay.

[noise] extra 150 million tons of ways to go to chase them to accommodate while now you have to mind them in a way with fan.

Design to medium or high grade, which is completely different.

The challenge again, I've never been it doesn't make sense just to reprocess stockpile.

The problem is your word driving losses and tremendous cost 2026 period.

To accommodate longer life on the ground through that Scott.

Now we've come to new with the strategy of the two three years of stockpile, which will contribute to lower but will not drive one dollar extra.

I'm 21 to 26 reported there you have to mine it you have to stockpile.

No extra car.

Zero.

Before the we're driving extra cost because you were design towards mining.

That's a huge difference.

I think this strategy has always been very very good.

The question is what are you in comparing as extra costs to do it now.

Okay.

Maybe a little more color on the.

The plane Wood River discharging what the critical path items are.

And cannot handle another.

Hundred year event.

Like we seem to get.

For the waterfall in the spring you mean.

For the question for fall or just for incoming well for there's two elements to it and one is can you handle with the existing set up.

Hi rainfall spring.

And then you're shooting for Q3 discharge and to find would.

What are your critical path elements.

Got to Q3 as opposed to.

You have seen many times delays what happens if it gets lead six months or eight months and what might be the cause.

Q3, 2020, yes, correct, okay well.

The Big thing is Bcr Bcr do as a final treatments stage to bring water complying we're working on this and we want to compete despite spring. So when you have bcr do online water treatment plant and ghost water management bought which is holding a water yet to be CRT after that.

Water should be comply or it into the model and then you can start discharging.

Okay, but then there's a ratio would define wood river you can discharge would define would flow now to accumulate it's at the moment. The dam is designed with the 99% plus the f. So we've got like a buffer on top of a buffer at the moment. This is why we're doing these these big damn because we haven't been able to discharge.

So with the last lift that we did and then we competed in the month November we've created like 7 million cubic meters of space.

That we're she'll we feeling at the moment, so I'm pretty confident arriving in spring that we will be able to absorb this water, but we don't want to absorb it too long we want to discharge. It now with the at 1.31 0.5 kilometer ditch that surround it the other 680 decided on and then.

Fall, we estimate that it deviated about 700000 cubic meters of water that would have entered yummy led that went around.

With the principle of getting he gain deep water clean okay. So these ditch are in place and there are there for us in the spring.

So, yes, we will probably be hole, so again, but we have the capacity now the damn half of this this this summer.

Another 2.5 on the south them and that allows us another 5 million.

Cubic meters a face that we're having with the damned if of this this coming summer.

So we're much better shape. So the answer is yes, we can handle the volume.

What I've them as Rick said.

We're not building to hold on water. This is not the practice right you need to discharge proper practices to keep your.

Your them dry you know with feelings and no water again, nothing that I'm teaching here.

More than there was a fight situation and 90.

Unfortunately in spring we cannot use this though three if you recall for the first two years the operation was doing by Phase Sal.

This will all these appear now and it's all one big thing very soon or we could not to use the sell through in the short term commitments for tailing is that factor factors safety or 1.5 at the end of the construction.

And you know the Jody technical situations that we had to do more extra work and eventually I mean, it wasn't catching up type of thing with the prior to the that we would stop the mailing if you have to to protect the integrity.

[music].

The operation.

We knew that he was a matter of fine.

The team up or upside or Eric is a humble guy he went with them what's important but oh my goodness. The unbelievable amount of work that was done there and not just with a construction team.

Their relationship and how we work technically with the regulators as well I am sure. We have significant. This just said you know the understanding as well at the regulator.

So he was.

He wasn't a ride itself, but on believable knowledgeable.

And I'm the CEO.

You bet held for answering that question.

It very tight.

Very good.

I think we're very well position.

So just to clarify then the bcr too as it was the key item.

It's where you're just last one and and do you need any other permits once you've got it built.

Yeah.

It's not it's not so much of the permit more than it is complete and then you know you let them know, there's an especially on something and then you know we're not gonna open to evolve and discharge just like that but everything is in place.

Thanks.

It's compliance to the.

With this.

And then just on top of the newness comments or questions. When you look at the processing costs you have basically a dollar drop per tonne because of outside services being cut off I mean does it as easy as the economy of scale is a is one right.

Remember that last year maintenance golf, there was a lot of things going on there were extraordinary that should not be there.

Oh.

Just like a mining and Gionee will we're going through optimization.

We're comfortable we can give there but.

While we need to the but I'm innovation right.

So this golf to be clear.

You can achieve this cars when you do your things yourself and your run Mighty 92% of the time.

What really killed the cost structure last year.

Was everything you're down your triggered dollars flowing through the window and there was so much to do you couldn't do it yourself.

Southern lights age.

Optimization.

Cost reduction no doubt.

And then lastly on new Afton.

You talk about effect model and subsidence and you've got I task and there could we get sort of a lehman's description of the issues related to subsidence what would.

What are the as you're dealing with what you have accomplished.

With.

All the studies of you've done something that doesn't just try to drop on.

Diagrams from a backlog.

Yeah.

You got the perfect layman to answer that [laughter].

So subsiding.

Apply to originally wasn't contemplated to interact with the down.

When you back and 20.

27.

<unk>.

[music].

2007 2008.

So essentially as part of the caving process.

Subsidence creates a to look ball as we draw the Cape town.

Just to look ball as also latched into the overburden area near the.

Circular downs.

That's what's been the work over the past year was tying the bedrock and the overburden layers together the bedrock players have always been while model.

So being able to latch into that.

Modeling, which is why we got back as really give enough the.

Confidence.

That we can understand the interactions.

Due to subside.

Good.

[laughter].

Okay.

You're tying in your overburden and your bedrock. So the studies into what to look at.

To what extent one supports the other wherever you are Chris <unk> right behind it why chat.

I've a chat Chris.

Maybe your introduce themselves.

Sure. So my name is Chris Mccain I work for BGC Engineering I represent the engine your record for the new Afton tailings facilities, I guess to explain a little bit more about the substance that back is trying to model.

There is there's I mean as John was mentioned, there's a bedrock and there's there's a sole component and went back is trying to do is trying to have a model it and integrate both prior to that there wasn't a good wasn't as good an integration of those things and what we were monitoring on surface John should plots of monitoring.

What we're monitoring on surface wasn't matching very well the a the modeling so now that's been rectified with box model.

Just a ticket a step further we are very concerned with with substance or I should say as the engineering, we're very concerned that the intent of the dam or the dam is doing as it's supposed to do which is to contain the toolings and so as substance approaches the dams and causes defamation bad things can happen. So we're very.

Keenly monitoring and trying to understand what is the substance behavior and we can come up with some defensive strategies, namely stabilization feelings in cheese <unk>, the substance and the chipsets interact.

So just to summarize the original modeling was bedrock only.

Never contemplated the soil layer.

So the modeling as tied them together.

Which has given us a better understanding of the interaction.

Vyvanse draws down the soil lever soil level react accordingly, and how it.

Goals.

Potentially into Iraq or not the dams.

That's the key difference original modeling modeling was bedrock only.

It's not really a buttress layer.

Just.

Chris.

Yeah, I guess it was a way of gaining confidence the what we were seeing on surface. What was what was in the model and like I said before we didnt have good agreement between the bedrock model we didn't have.

The defamation that was model before at the top of the bedrock was not trend transposing onto the surface. So we weren't like those two things weren't lining up and so that's why the the.

The new models was ER with was.

Yes, part as a result in that part of the soil layer was the old Tac workings, which.

They adopt their waste rock from the old it so.

Tying that waste rock soil lever sole levels bedrock.

How the dam is constructed year and on those layers woods.

Important connection require.

It is a challenging topic [laughter] and there's a lot of technical and work in the years buffer.

Analysis to it but.

Any following.

Especially.

Good.

James Huntington from Scotia, I'm, just wondering if you just some more color on the stabilization of what the actual work is involves it's.

Just getting a bit lost in held the tile tick and tie Lngs gets you deposit it runs extracts extreme networks going there as well too should dolton.

There's a there's a number of plans to stabilize the downs.

Watering wells 20.

14, 15, we did a.

Stabilization program on the historic often facility.

Brought in.

With grains.

Just a large load and essentially.

[noise] pushing the.

The tailings.

And.

Switching the tailings precipitate waters, OTA and were able to the water.

Similarly, we're looking at the historic.

I often.

Realty in different matters, but essentially we're going to be de watering.

Well there are some low feature.

And Additionally to your point why these uptick in demand appealing.

We brought pick in an amended tails and predominantly.

To recover excess water for our process.

As we add some that we need water.

So part of our sustainability pull around what.

Introduced the pace.

So to recover the water.

Second tails will advance though.

Earlier than the amended tails, which is meant to.

Hello.

The watering.

We're not sending out as much water.

And.

Eventually we will be put that in an amended into this story.

It's part of.

No. It's there's less cap less cost required to buy a pace thickener then to keep the current tail density in hot.

Bunch of Smith.

[music].

The rationale.

Thickener minimizes.

Okay.

And then just one question for rainy or could you just give some more color on the underground you money Mr., Dan like Transmissive and smoking alone should news sources.

And that sort of detail.

The it the way it's considered as apples system mining that that's.

Okay for which you might longitudinal.

Okay, not transversal, but longitudinal or you go from the top and then you you mind top down basically and you're putting in.

Now different optimization and this deal would be to you look if the bodies with.

Okay, and you can mine down hole in the last you can go transverse if its wide enough. Okay. And then you could look at going 25 meters in between instead of to winning these are all different optimization that you could you sort of mine and longitudinal two levels and third level transfers. This is.

Different things that you could be looking.

But then you need hasn't easily good six seven meters will you can enter.

Okay. If your two or three meters wide. You then have the laundry and stayed on attitude.

And that's the beauty and what good eventually contribute to an extended the life of mine for the underground like at this stage it wasn't to import than you know in spending like so much time effort and tried to want to spend right away with detail because we got some claim as you could imagine right.

At this stage it is important with what we know.

To have the stockpile component in basically if you look at the plan the underground stopped when the stockpile stop because the main assumption at this stage of the increase of milling costs as you do that.

As Eric mentioned, and we continue to optimize down the road one of the priority is okay. How do we do it.

Kind of stand alone is it possible to make it the Standalone and then of course you have to look at the mailing which is a big thing. It's a mouse month, there compared to what you would need.

But it Doesnt mean over the next few years, we will find a clever way.

To make it.

In alone should exploration. Unfortunately does not provide any additional resources open beautiful.

We already committed to extend is beyond.

And one is improving in the mining method of finding their way reduce your costs more productivity.

I'll do you eventually shifted milling and make it work at the reasonable.

Currently our assumptions are pretty hard if you would try to turn this male and accommodate low throughput you're talking about a pretty high cost with that type of machine right.

But you have a lot of pumps.

There is another thing I'll find that your mining from due to report those hey, prior you only had one portal to mine 2500 tons right now would do tree portal ease of mining.

When you five up to 3100 tonnes per day is quite different mine you that you always have to have the service moving expenses as a that geologists people going up and down. So then you have to block. This ramp that actually moved in material now when you have to treat portal for which you can work with its it gives you a little.

It more flexibility to increase this on it and are at least to assure it would one portal you know it can be maybe challenging with their requirements about a full 24 hours when you bring material on the ground.

Okay. Thank you.

I want to introduce a Ken Brower who's our other you are back there.

He is working extensively with.

Second an amended tales program so is available.

As well as Chris on some side as you want to really.

The Nitty gritty.

Just on the thinking in many tails actually a new afton.

So as I recall with the original plan eventually to let that when your deposit into that Stuart.

Afton open chant.

If it eventually subsiding keyed into the.

The old mine workings like eight Joni b.

Yeah, so fee or anything it will not be stable at the time.

It will be stable up at top lift one and.

The three and fees own does some latching yen.

Minimally we don't expect it.

Traveler connect.

Through to the B three or C zone.

Right.

Okay and then just in terms of then it went back to the rainy River underground that you were talking about.

What kind of mining fleet or either conditioning, and where's that cost in within the capital spend.

Can you I can you break out the underground like that cost you got 56 million.

And underground at 64 million.

I'm just wondering what's associate I would if he was 64 million that.

Sustaining is.

Its development.

The 56 its fleet.

Well it is the end around three that you're looking at like Jumbo and small trucks now you want to know when.

Where is it in terms of whereas no. There is just that breakout of like what fleet and what still but then what's development work.

Greetings and I'd just say just after you give you a holiday break it up there.

But the indeed non sustaining as you mentioned a portion of it is the Predevelopment Oh, you know preproduction, if you're well so it's not.

Just equipment.

So.

And cost and eventually as you start producing.

Thing.

Learn is doing a lot of numbers here. If you want to go to the next question. If you do we'll get a decent size.

Oh, I didn't really haven't done [laughter] make when I'm now you always do.

[laughter].

Yeah.

Okay.

[noise] sustaining bucket so that is initially.

Sure.

<unk>.

Initial capital development prior to production for Florida after that we in sustaining capital we have.

39 million related to you and continued development of those underground portal and then 25 million.

Subsequent infrastructure and Clinton.

So it's kinda captured in three different buckets.

Say 25 million for infrastructure, and how sustaining and fleet.

Okay. Thank you.

Yeah.

Maybe I'm single line, it's in the Broncos from being <unk>, but just a study with interest that youre looking to put these would to deploy some electrical battery technology down and you asked and.

There's some savings that on a ventilation.

Has that old incorporated in the capital budgets that we can see in terms of most the savings and the cost as the new fleet or is are we going to see a capital budgets is should it reflects traditional equipment and is possible savings will sustainability benefits on the back of that.

We did a feasibility update this year, including a study of diesel versus electric and they come in within error. So within.

Marginal error.

Electric slightly.

Couple of million Bucks higher so that's incorporated in the budget.

As well as we have reduced.

Diesel consumption in the outer years savings.

Good so you say it doesn't really make much of a difference no no.

Okay, and I guess, no that I've seen a dead horse I want to kick it so I'm going to get back to the subside and stuff on a new one <unk> punishment.

So fun word to say, yes, that's true just having a quick look here at the a two pictures on slide 97, obviously, the one of the lift is smaller than the one of the right. That's my layman's terminology for Simpson's I guess.

But I do note at the bottom underneath that picture on the right. It's a it mentions that is SLC mining incorporated in that.

And as you'll see is incorporated sort of an upside throughout the document or would we be pretty safe incorporating a an initial see mine mining in a you know models today or how do we look at that given that you obviously incorporating it into some SUNS models, but no annual mining model at the moment.

Yes, the F.L.C. representation there the three upper levels that we've incorporated in the mine plan. So we haven't.

We need more drilling from materially for the lower levels before we can out into this particular model.

So this is this is aligned with that tons and Oh.

Okay. So this is just what we'd go on its we'll see in I guess.

Good luck with a better way to go about it.

Does it look different when you put the season in as well or I mean.

Yeah. The C zone, if we go to.

[noise] [noise] fees on we go to.

Slide 94.

[music].

So we see sees on production will.

We'll take a swap out of the current often facility that needs to be stabilize.

The particular model, we're looking out here would be.

Much larger concentric rig into the damn that's showing.

So.

Another way I mean, I'm sure you're not the next burden, but I'm looking at this is like.

You managed or risk of it.

Things are wait to look at it into the sequencing by the time is getting a initiate the see a the sees own blockade.

The stabilization or whatever they can play.

The question was really when you need.

Right.

And even though we will be im proud all dewatering.

It was quite a potential breakthrough to see.

But you would not have financially this answer right right.

Once you get the seasonal differences you would have already pre stabilized which is very good.

Stabilize additions complete end of 2022.

And then we start wrapping seized going up in 2023.

So there was other flex time Theres no doubt that the C zone will start interacting with the other facilities.

Differences.

Again, I'm just trying to fund the page views and I'm, just gonna be overly pedantic again, sometimes the there's a comment on this thing that you have enough genetic material and you've touched on this feature phones with having to do some quarrying in 29 scene.

No no no material to do the buttressing of coming from that.

There's no need to touch like worried again that your fair statement. So yes. It is okay and that's the older Lucky because as we currently understand yes, but before we would incorporate any additional potential low grade resources that may be required eventually to to mine additional underground material to keep the mills.

Hello.

Then perhaps it would be another need to go back for more nag material from some of the source and I understand there would be nice problem to have yes, yes for sure.

Yeah.

Yeah.

Thank you Brian.

[laughter].

Good.

So I believe this is going to.

We're just sticking to last question about it there's no more questions from the floor.

We would and this.

I appreciate.

[noise] your presence or anyone that was live thing.

Im home and if you need and if things please reach out and they Investor Relations you go through the day, one up and you face and I'm sure will elaborate more [noise].

In the near future.

Got it thank you very much.

So safe travels thank you.

[noise] [laughter] today's conference call. Thank you for your participation you may now disconnect.

[music].