Q2 2022 Yamana Gold Inc Earnings Call

On participants, please continue to stand by. The conference will begin momentarily. Once again, please continue to stand by. We thank you for your patience. Nous vous remercion de bien vous loi un patienté. La commune de bToddre soe peux Nous vous prior de bien vous lois rêtendre PW 15 Islam Kappa

Okay.

Participants please stand by. Your conference is ready to begin. Thank you all for joining us this morning. Before I turn the call over, I need to advise that certain statements made during this call today may contain forward looking information and actual results could differ from the conclusions or projections in that forward looking information, which include but are not limited to statements with respect to the estimation of mineral reserves and resources.Barnie Guzzir identity

the timing and amount of estimated future production, cost of production, capital expenditures, future metal prices, and the cost and timing of the development of new projects.

For a complete discussion of the risks on certain decent factors which may lead to the actual financial results and performance being different from the estimates contained in the forward looking statements, please refer to Yamuna's press release issued yesterday announcing second quarter 2022 results as well as the management discussion and analysis for the same period and other regulatory filings in Canada and the United States.

I would like to remind everyone that this conference call is being recorded and will be available for replay today at 12 pm Eastern Time. Replay information and the presentation slides accompanying this conference call and webcast are available on Yamana's website at yamana.com. I will now turn the call over to Mr. Daniel Racine, the President and CEO . Please go ahead, sir. The meeting is adjourned.

Thank you, operator. Thank you all for joining us and welcome to our second quarter 2022 conference call and webcast.

Presenting with me today is Jason LeBlanc, our Senior VP Finance and Chief Financial Officer. Peter Morrone, our Executive Chairman, will also talk about the Goldfield Agreement. The rest of the senior management team is also available for the Q&A portion of the call. Peter is in transit returning from meetings with South African shareholders, so we hope his connection will be made adequate throughout the call.

The health and safety of our employees always come first. Our total recordable injury rate was 0.81 for the first six months of 2022. And I would like to thank all our employees for remaining focused and committed to our safety values.

Despite our excellent track record, this is something we are always working on improving and getting better at.

The company continued to implement its climate action strategy during the quarter, including work on the analysis to support the conversion of approximately 50% of Cerro Moro's electricity requirement from diesel to wind power.

This will help meet the greenhouse gas emission reduction required between now and 2030 to achieve the company 1.5 degrees Celsius science-based target and also reduce operating costs. We should mineral reserve and extend the mine life.

Work also continued to progress on other climate action objectives, including advancing the evaluation of other operational projects to reduce green-ass gas, emission and the estimation of our scope tree emission. Commissioner founder of the Association of Westernplaces of Education dog emission and the estimation of our scope tree emission.

I'm very pleased.

With Yamada names, one of the Canada's best 50 corporate citizens by corporate night magazine for the second consecutive year. The company is ranking improved to 30th overall, and we remain the top rank Canadian mining company on the list, who are very proud of this exceptional recognition, achieved by the dedication and hard work of our all employees and business partners.

Further demonstrating our deep commitment to ESG Exonance earlier this week, Yamanas ESG rating as determined by the MSCI was upgraded to a A from BBB, Torque Triple B.

The upgrade is the result of improvement in our corporate governance rating, which reflects our effort to further improve our corporate governance and management policies and practices.

Yamana has the longest survey of prioritizing the health and safety of its people, protecting the environment and the community where we operate. And we are committed to continuing to improve our responsible development strategy.

Turning now to our second quarter highlight, we continue our track record of Operation Excellence and produce over 232,000 ounces of gold exceeding our plan for the quarter. The stand-out results were driven by Canadian malartic Céromaro, Jacobina and El Pinon. Notably Jacobina achieved record quarterly gold production.

The verpoduction of nearly 2.36 million ounces was in line with land at several more or the delivered strong results with increased milk feed from higher grade zones.

Geo production of nearly 261,000 ounces was in line with planned despite the goal to serve issue, being near an all-time height and significantly above budget.

With the strong here-to-date performance, Yamano is well positioned to meet its annual guidance.

As you know, during the quarter, Yamana entered into an arrangement agreement with Goldfield. More information will be provided by Peter later on the call.

While I won't spend too much time on the numbers on this slide, given that we pre-release our operating result, I do want to take the opportunity to comment on our operations staff.

Comment on our operational staff and the excellent result achieved to date.

Turning to the individual drivers of our performance, Canadian Motor Arctic delivered a strong second quarter which exceed our plan.

We are also continuing to advance the development of the Underground RDC project, which remain on budget and on schedule. The Underground RDC is now at...

380 meter vertical depth below surface, and 2.3 kilometers of ramp completed to date.

Chef Sinking is scheduled to begin in the fourth quarter of this year as we and we are expecting first production from Odyssey South during the first quarter of 2023.

We continue to see huge opportunities at Odyssey in the future. Exploration work has delivered promising results at East Goldie, extending mineralization to the east, as well as the Odyssey South Internal Zone, which demonstrate the potential to add mineral resources.

Jacobina had a record quarter driven by higher ore-tonne mine with production for 2022 on track to increase the ninth month for the ninth consecutive year.

Underground mine development work continues to gain access to new mining panels.

Alt and Alt and together with the higher auto and mine provides additional flexibility to the development of stockpiles supporting higher throughput expected from the ongoing phase expansion.

These positive trends should continue as the face to expansion throughout throughput objective was realized in July . Establishing the Jacobine Sustainable Production Profile at 230,000 on subs per year.

Servo Mauro continued to benefit from access to additional mining phases, which supported the increase in mill feed coming from higher grade underground ore, which account for over 80% of the now stabilized throughput.

At CERO Moro we are continuing to advance in parallel the scalable plant expansion study and potential E-pliche project and are evaluating option for alternative source of power, which include a connection to the grid and wind power.

Increased mill field feed coming from higher grade underground or an improved recovery is contributed to step change in year-over-year production. This strand is expected to continue in 2022 with additional contribution of or forms away.

As Plan El Pinon delivered solid gold production, results driven by access to higher gold grade. We expect that gold production will remain stable throughout the year, but a strong second F will account for approximately 60% of the silver production due to mine sequencing.

One of the key strategies to increase value at Alpinion is to establish additional mining sectors and increase mining flexibility.

With exploration success, the objective at Elpinion is to utilize the excess plant capacity and increase production.

Minera Flaugida delivered production in line with plan and we expect annual results to be in line with the plan.

Operational efficiencies remain an area of focus at Minera Flogida, and we have identified several new opportunities to increase recovery at the processing plan as we continue to work towards the plant-dependent aching study, which is expected to allow the increased throughput in 2025 when it's received its permits.

Yamana continues to advance strategic initiative across its portfolio and we were pleased with our partner and eco-eagle to announce positive exploration result at Odyssey and was a Mac on Wednesday. These result further support the strategic outlook and the company's effort to meaningfully extend its sustainable production platform.

Notable highlights at Odyssey include East Goldie exploration and in-field drilling, which continues to highlight significant expansion potential.

recent drilling as extended the E-Scoldy deposit to the west by approximately 225 meters.

and to the east and depth by approximately 500 meters to more than 1700 meters from the current mineral resource outlined.

Shallow drilling at the East Goldie Extension also extended the mineralized plane an additional 900m update from previously reported drilling.

With 12 drills

12 surface diamond drill active on East Goldie as well as four underground drills on Odyssey South. Ongoing drilling is expected to convert a significant portion of the 2021 year-end inferred mineral resources to indicated mineral resources for 2022 year-end reporting and as well significantly expand inferred resources envelope.

These new indicated resources will provide the basis for the updated technical study in 2023 that will allow definition of mineral reserve for Odyssey underground project over the next few years starting at the end of 2022. Over the next few years starting at the end of 2022.

We are very excited about the generational mind life potential at Odyssey, and the project represents one important step towards realizing the board approve Yamana 1.5 plan, as it will establish a large sustainable annual global production platform between 500 and 600,000 on the 100% basis with a strategic mind life well into the 2040s.

Importantly, only 47% of the current mineral resource are included in the 2021 mine plan. And as our exploration success has shown, we believe this potential for significantly higher production well into the future.

Equally as important, the capital expenditure to achieve this is largely offset by pre-commercial production. Assuming the current gold price, 72% of the initial expansionary capital through 2020 weight.

28 will effectively be upset by pre-commercial production as we move into the upper part of the body starting in early 2023.

Success continued at our WazaMAC development project. In Fills Relling, resolve continued to confirm or exceed expected grade and width. In Fills Relling, resolve continued to confirm or exceed expected grade and width.

highlighting the continuity and tenor of mineralization.

Exploration drilling also delivered positive step-out drill results from wildcats out, where drill holes provided confirmation of the new mineralized plane, which remain open at depth and along stride.

Additional exploration target on their property, including the adjacent Franca, Enfield, and Lackfotsoon properties, provide further upside. and Lackfotsoon properties, provide further upside.

The positive infill and exploration result to date provides support for an expanded production scenario within and adjacent to the known mineral envelope. We believe there is a potential for a strategic mine life of 10 to 15 years at 200 to 250,000 ounces of gold per year compared to the life of mine average of 169,000 ounces.

in the feasibility study.

at very attractive all-in sustaining costs.

These explorations result together with Jacobina's reaching the phase two target throughout Tuttput and the Waza-MacBot sample approved by our board demonstrate that we are delivering step-by-step on the sensible growth and value creation paid laid out in our Yamana 1.5 The Waza-MacBot sample approved by Jacobina's reaching the phase two target throughout

Our board-approved YMCA 1.5 plan has identified a path to progressively increase production to 1.5 million gold equivalent ounces via a series of projects and optimizations with very modest capital requirement and low capital intensity.

This responsible growth is fully aligned with our capital allocation strategy, with balances.

which balanced the shareholder return, balance sheet and low capital intensity growth. This low capital growth will strengthen our already leading free cash flow generation.

It's also important to note that this responsible growth is underpinned by multiple low-risk, low-capital project that have the ability to be mixed and matched to optimize free cash flow generation.

Such flexibility allows us to rearrange, adjust, defer, or move forward projects at our discretion, thus having confidence in achieving our overall growth plan.

while answering cash flow growth and growing shareholder return.

And with that, I will now pass the call over to Jason, who can go over our quarterly results in more detail.

Thank you, Daniel and good morning everyone. Turning to our second quarter financial performance, our continued operational strength helped revenue reach $485.6 million up over 11% from the same period last year. Gross margin excluding DDNA rose nearly 17% to $292.9 million up from $250.9 million in the year earlier period.

Earnings during the quarter were $72.1 million or 7 cents per share compared to a loss of $43.9 million or 5 cents last year.

But on an adjusted basis, earnings were $0.09 per share versus $0.08 per share last year.

We delivered strong cash flows again in the quarter, with cash flows from operating activities before a net change in working capital at $195.9 million, up nearly 17% from the same period last year, while cash flows after working capital were $187.8 million during the quarter, paired with $153.5 million last year too.

We also generated free cash flow before dividends and debt repayments of $53 million during the quarter, or up about $2 million from last year, despite about $30 million of higher capital spending as planned, primarily from the advancement of the Odyssey project.

And we ended the year with cash and cash equivalent, or we ended the corridor, sorry, with cash and cash equivalent of $545.1 million, inclusive of $218.3 million available for use at the MARA project.

The Daniel already noted we expect pre-cash low to increase quarter over quarter with the strongest pre-cash low generation anticipated in the second half of the year. And in particular during the fourth quarter, which is expected to result in cash balances steadily increasing throughout the year.

Lastly, although inflation has been a headwind to our financial results, we have successfully mitigated the impact with our strong production and productivity initiatives at our operations.

In addition to our ongoing procurement efforts and provisional inventory builds from earlier this year, we are confident we will be able to continue this trend for the balance of year. With that, I will hand it back to Daniel for some final remarks.

Thanks, Jason. Before completing our presentation, as we have Peter on the call, perhaps Peter, you can give a summary of the status of the Yamara Gold Shield deal.

Daniel, thank you very much. And as you can see from our second quarter results, the motor tractor is stuck. The motor tractor is stuck.

a business as usual approach. This is a forum for, as you have adequately done, a discussion and promotion of Yamana's operational strengths, financial performance and prospects and opportunities.

Our board felt that there were forums for discussion of the deal. This was a forum for discussion of the second quarter results. However,

An important point is that the substance of the Goldfield Yamana deal is Yamana and its value and its prospects and In taking a business as usual approach We are implicitly promoting the deal with further explanation of what we see as value and What Goldfield saw as that value in its diligence?

as an update on the deal itself.

We have begun an engagement with our and Goldfield's shareholders.

Some are aware that we were invited by Goldfield shareholders in South Africa to present our company to them.

As mentioned earlier, I'm returning from that engagement and meetings, and it seems to us that those meetings and presentations, including also some in London and New York, have gone well both on substance and governance grounds.

Value proposition and the industrial logic of the deal is in focus. And while shareholders are expressing an understanding of the deal and support, a good governance principles tell us that it's critical that shareholders should want to see full detail and that full detail is provided when we end goal fields provider information circulars.

And for formal commitments and support, we certainly expect that that will be forthcoming once those circulars are present.

Interestingly, our circular will provide context of the deal in background, which is typical.

We will go into great detail on that background, not only on the deal, but more broadly.

But similar to London Stock Exchange rules, Daniel.

The Johannesburg Stock Exchange requires that we include evaluation.

on the company and that valuation will demonstrate that the implied value in the offer is modest and there is considerably more value in our company than what is on offer.

Next steps include continued engagements with our and Goldfield shareholders.

Gofield's publication of its first half-year results in August , likely in late August .

publication of information circulars in September and share all the votes in October .

One final comment that I'll make before passing the call back to you.

On operational synergies, we have been taking a responsible and almost literal view of these operational synergies and optimizations.

We have identified several and are critically assessing the dollar value of these.

However, they are substantial and more than support the deal terms.

Some of the obvious ones are Salada's nothe.

The acid and chili that is in development by goal fields.

likely garnering more production based on a faster and better transition from development stage to operations.

particularly with Elpinion Steering that transition.

A possible fast cracking of Phase 4 Dracovino.

Advancing a more aggressive exploration program on the Jacobena Greenstone Belt with gold fields, generations of experience with paleo-plaster deposits, such as these.

possible development and even optimizations of MARA, given goal fields experience along with ours, in South America with development of large open-pit projects. In South America, with development of large open-pit projects.

Finally, and as we reported on Wednesday, and as you mentioned earlier on the call, Daniel.

Odyssey is bigger and better, and with the extension to the west and up dip, as you mentioned, our and Goldfields Deep Chef underground experience will look at how we can...

with the support of our partner at Canadian Mallartic, FastTrack for a possible second shaft.

Canadian Malartic fast track for a possible second shaft to the west.

We will have more to say on these synergies and optimizations, likely before our information circulars, and we expect to be able to do that in time for the Denver Gold Forum in September .

And without, I'll pass you back to you then, you know.

Thanks, Peter. This quarter, third of the month's rate are Operation Accident, and that our America's focus portfolio is continuing to deliver as we progress towards the Yamada 1.5 plan, and financially product matter, with exploration, optionality, providing even greater upside.

With that, I will turn it back over to the operator for questions.

Yes, thank you. We will now take questions from the telephone lines. If you have a question and you're using a speakerphone, please lift your handset before making your selection. If you have a question, please press star 1 on your device's keypad. You may cancel your question at any time by pressing star 2. So please press star 1 at this time if you have a question and there will be a brief pause while participants register. We thank you for your patience.

Our first question is from Anita Soni from CIBC World Markets. Please go ahead.

Hi, good morning, Peter, Daniel and team. I just had a couple of questions. Peter, you sort of addressed it. Firstly, I was going to ask why the Wassermack update was with this release and perhaps not with the life of, or so the investor day that you had where you targeted the 1.5 million ounces and you kind of showed the market all of your projects on tap but didn't release this one. So is this, was out not ready yet at the time? Three months ago and we had that investor day.

It wasn't ready, Anita. Yeah, we got the result from exploration after that. So we knew it was coming. We knew that the drill holes, we knew that we intersect the zones, but we didn't have all the information at that time. But we didn't have all the information at that time.

Okay, and then the second question was with regards to shareholder engagement. This is probably with a question for Peter on the Goldfields deal. Could you just give us a little bit of more color in terms of what you're seeing with the investors that you meet with and the kinds of color and detail that you're giving them that's incremental to what you've put out there publicly.

But mostly it is informational in it. There's nothing that is new. Other than of course what we publish as new information, similar to what you asked about Wasimac. But it's informational. In some respects, it shouldn't be startling to us that we feel that we are a company that should be well known in market, but it's a big market. And many people don't know the company. And many people don't know the company.

And so what I mean by informational is that what we're doing is we're educating the shareholders of goldfields and what Yamana is all about. I said earlier that the substance of this deal is Yamana. What's being paid for is there more value there. How do you recognize some of the synergies to which we've alluded. So mostly this is about engaging with each shareholders and presenting the company.

and giving an indication based on our experience and knowledge of the company, of what the company is all about, and value proposition to which I referred. And I have to say that those meetings have gone well. Certainly on some of the governance side, shareholders, principally in New York and in London, that have asked, how do we get to this point? I think that they've taken comfort on that. And on the substantive side, it certainly seemed to us, in particular based on sidebar discussions,

after these presentations, it seemed to us that it was a refresh, that those shareholders were becoming very comfortable with what Yamana was all about and the value proposition to which I referred.

Okay, and then just one more. In terms of, I think when you presented a couple of weeks ago and increase the, sorry, noted that you guys were going to be...

The increase of dividend, I noted that the GF Goldfields will be listing in Canada. You mentioned something about other approaches and that information will be inserted. I didn't follow up on all that. I was wondering if you could provide a little bit more color about the approaches that you've had and if anybody approached you since this deal was announced.

Well, we would not be in a position to be able to say anything about that, Anita. What I would say is, if you see our arrangement agreement, it contemplates what is the level of engagement that we have with this company, why we're committed to this deal. It also talks about, as is typical under governance principles with boards of directors, it talks about what would be and would not be superior proposals.

But I think the more important point is the first part of your question, and that first part of your question, it really goes back to...

for our Board of Directors in 2020. I don't know if you would agree, but our Board of Directors came to the conclusion.

that while substance and quality will always matter, we're increasingly in a world where relevance.

comes from size. And so we looked at it from a number of different lenses. One is how can we grow organically? And you are aware based on our 1.5 plan and what we announced at our investor day earlier this year, how we get to that 1.5 million ounces. Danielle discussed that on this call earlier. And how that number could also be larger as a result of what's in the portfolio. But we looked at a host of other things as well. What can we buy?

What are the possible transactions where it is closer to business combinations of mergers of equals and if we were to sell ourselves who would be the interested parties and how would those deals make sense?

So it was a broader engagement than only this one. This one was the one that was the bright shining light for our board of directors, and understandably so, because of the level of experience that Goldfields has that's comparable to ours. The fact that we are a plug and play with this Americas portfolio by comparison to the assets that they have, the nature of the geologies of their ore bodies and their mines by comparison to ours.

and where we can get some synergies as a result of a combination of the two companies.

And of course, what the result is, and the result is not just the size of the company.

but also the quality. And again, I'm repeating things that we discussed on that call a few weeks ago, but it's not just that we become a bigger company in amongst the super elites in our industry.

but it's also that we have longer mind life better free cash flow generation better growth although manage growth is that you said this is growth that comes at very low capital cost and with the true value proposition because our market capitalization combined is still one of the videos of the company

Okay, thank you very much and congratulations on a solid quarter in keeping costs under control in this inflationary environment.

Thank you very much and congratulations on a solid quarter in keeping costs under control in this inflationary environment. Thank you Juanita.

Thank you. Next question is from Fahad Terri from Kiddiswiz. Please go ahead.

All right, thanks for taking my questions. First on the last Mac and I appreciate there's a lot of information that's been provided. Can you just remind on the ASIC commentary that it's likely to be below the feasibility study average of around $830 an ounce and that the catback for the project is unchanged at 416 million. Can you just talk about how to think about that in relation to inflationary pressures? Has that been considered?

Or are there production offsets? I'm just trying to understand how that's packed or done. I'm just trying to understand how that's packed or done.

Thanks, Safad. Good question. Look, the guys are working on constant basis to see on the cost. And then we have identify opportunities to reduce costs on some areas. And as you mentioned, we have pressure on other areas. We're looking at improving the recoveries, including improving recoveries by one or two percent, make a big difference. So this is on the cost side. We take our, and if we produce more ounces, the divider is higher. So this is why we're very confident that we're going to come.

with a revised feasibility study at some point, with the success we have in exploration to reduce the all-in sustaining costs. It will be one of the best. And then maybe I'll pass it to Johan to compliment on my answer.

Hi Fabio, I'm here, thanks for the question. I just want to say, I mean, I have to Daniel, what's saying here that to support the bulk sample, we redid the cost analysis and mining sequence and all that. And for sure, we adjust slightly the cost, but we also find some cost saving initiative that's offsetting those costs. So overall, even by increasing throughput, we don't see additional, I would say, capex investments.

in the processing plant and basically the underground still about the time because it's a water, the stove are really wide. We have some good results in field railing. We find the stove's slightly bigger. So that support nicely, I mean, that increase in that new plant. So for now, I mean, considering the cost, I mean, we came up to about the same catac.

Okay, great. So would it be fair to say that, you know, by 2024 when maybe the production begins?

There's productivity offsets you've mentioned, but it could be the case that maybe we're in a more normal cost inflation environment, right? Would you, is it fair to say that you could even see the extent you lower capital that things normalize?

Yes, if they normalize, yes, but you know, this is why I said and Yohan said we're working and looking constantly how we can improve, and at the end of the day, if costs normalize and they go back down to where they were before, then that means that the capex will be similar or even lower. And like Yohan mentioned too, one of the big things we're finding is the flowsheet we have for the mill.

that we were, we designed at 7500 tons per day and then you know we're gonna process 7000 tons per day. We see that even that milk and process are a lot more ton. Jack will be nice with example, this is 6500 tons per day that we're running at 85 now. So, you know by optimizing recoveries, by optimizing the flow sheet, reducing in even in some area, some costs or changing equipment, this is how we arrive that now in today's world to this cost of equipment and everything at the same cap actually. It's part of the cost of equipment and everything.

different lines of questioning from each shareholder base. Thanks.

We've only begun to, the engagement with GoPield shareholders is a new thing for us. We've only recently begun that, literally over the course of the last two days in this past week. you

I would say that the engagement is similar to the extent that our shareholders are looking to learn a bit more about Goldfields, those at least that do not know or did not know the company, were finding something very similar with the Goldfields shareholders as it relates to us.

Can our shareholders are not as interested in the question of what is being paid for your mana and understandably gold-filled shareholders are more interested in that. In the implied price when the deal was launched was $6.7 billion.

And so they want comfort that that amount is not reflective of total value for the company. And the flip side of that is that the way that we've managed the growth of the company is...

Modular, as Daniel mentioned, can be sequenced.

and the capital intensity is comparatively light in other words it doesn't be in your free cash flow and there certainly is a tendency to focus on free cash flow not to similar to our share was another share was importance of free cash flow balancing between spending money on on growth projects and uh... returns cash returns uh... to investors uh... and what interesting point that that i think might resonate with you with with you uh... one of the things it was not well and assured is that

comparatively light. In other words, it doesn't pinch on her free cash flow. And there certainly is a tendency to focus on free cash flow. Not dissimilar to our shareholders, but another shareholder. The importance of free cash flow and balancing between spending money on growth projects and the cash returns to investors. One interesting point that I think might resonate with you is one of the things that was not well and assured is that...

consensus models, your model, others, is not taking fully into account all the value that's in your model. Our internal model certainly shows a net asset value that is potentially an excess of.

the net has a value that's in consensus.

but one of the things that was comforting is that what is the implied price that six points of the bid into whichever for which is roughly let's say eight fifty canadian to nine dollars could be an eight in is is actually an average is of

the target prices of the analyst community that covers the company. And that's something that was not understood and resonated. So in other words, what Goldfield's saying and we've now punctuated is, this was essentially a normalization, a bit of an equalization type payment to reflect what is likely on the common in the next few months and quarter and no longer than the next year.

But implicit in that is that there's considerably more value and this is where we highlight that greater value. So that's the distinction I think I'd make between the Yamana shareholders and what they focused on and what we're now seeing as the focus of the Goldfield shareholders.

That's very helpful. Thank you.

Thanks.

Thank you. Please press star one at this time if you have a question. The next question is from Ralph Prociti from age capital. Please go ahead.

Good morning, humanity team. Thanks for taking my questions.

Daniel, if I can start with you.

Just some rough estimates in the context of the strategic life of 10 to 15 years at WASS, and that gets me to around sort of a 3 million ounce deposit in terms of the reserves required to support that, you know, that conceptual plan, which is, it's about 60% higher than where we are now. Is that the right way to think about deposit size in terms of growth potential? And how long do you think it will take you to get there?

That's a good question. Ralph, you have it right. We have about 2 million ounces now on what we had, what we bought, and then what we did the...

When we look at the drilling we're doing, Johan mentioned earlier that we're interested in drilling, what we have, we're finding water zones and with Better Grid we have the new discoveries that we have. I mentioned before we're going to start drilling on Parker, Artfield and that option. And we can complement, but so far exploration is returning amazing results. We're in 2022, we have still half of the year to drill.

next year and 2024. So we're pretty confident by the time we get the permit to go ahead, build a mine, put it into production, that we will reach that number quite easily. And then remember that we're in the process to ask for the permit to start the ramp. So we will develop that ramp starting next year, for the next few years, get the mine ready for production when the mill will be built, and then we'll have the chance to drill from underground.

because everything stays open. It's open on all direction. It's open going deeper. It's not real deep, very deep because it's real from surface, but it's still open on all direction, all the zone and it's open east and west. And then we're finding new zones. So we don't think it will be a challenge to reach that.

Johan? Yeah, Ralph, maybe too hard to that. I mean, we do have about 2 million ounces in our plan, and we have MI and ensure that can be transferred as well. We're talking about 400 to 400,000 ounces there. We also have suited some zone initially that gonna be put into production. Maybe we'll look at cut and field, but different mining methods. And we also sterilize a big block around the oldest caveats that can be put into the plan as well.

You also have to consider that there is on the mining sequence that we have, we have four good years of 250,000 answers per year with what we have. So it means that it gave us until 2030 to find those additional ounces and sustain that plan. So between now and 2030, I think we have plenty of time, I mean, to increase value to a project that we bought about no more than two years ago. So it's really promising.

And we have to consider applying car and act of turn at our close by that was starting to explore. And we see really good news coming up on those two projects as well.

Okay, great, that's a good update. I do have a question for Peter. And Peter, I'm hoping you can help me to help us qualify the shareholder engagement as it pertains to the 75% thresholds for goal sales, which in some circles has seen as a high hurdle, right? Is the goal when it's all said and done to reach a substantive portion of the shareholder base at the end of the day? Is that one of the main goals?

At this juncture, we're in the information communication stage.

We have not asked any shareholders. The goal field does not ask any of its shareholders.

to indicate its support for the deal and understandably as I mentioned earlier Ralph shareholders would normally from a governance point of view want to make sure that they have checked all the boxes and that that includes looking at the disclosure and in an information circular that's very typical and of course related to that is the proxy advisory services glass Lewis and ISS and their commentary on

on one deal or another and that would apply in this case as well. But I would say to you that my impression and our broader management impression

is that the 75% hurdle has to be seen in the context of a 66 and 2-3rd hurdle, which is of the shares that are represented as a meeting.

So 75% is higher than 66 and two-thirds, but it's more than incrementally higher, but it's not substantively higher as a hurdle. And I'd go further. I'd do that.

If we look at the shareholder profile of Yamana and the shareholder profile of Goldfields, Goldfields has a greater concentration of shareholdings.

which means that a smaller number of shareholders will be in a better position to be able to carry the vote, whereas we would have to outreach to more shareholders, in our case, to get to that lower threshold of the 66-2 thirds. So on balance, we're not seeing the difficulty of 66-2 thirds for us.

But equally, we're not seeing the difficulty of 75% of the shares that would attend and would be represented by proxy at a meeting at a meeting for them. And there are enough large shareholders, particularly those who think a longer term view.

who are going through that information gathering stage, who are learning about our company and about the value proposition and what's being created. And our impression is that ultimately those shareholders, I don't mean to be presumptuous, but ultimately those shareholders would be supportive of the deal. They take comfort in what we are saying because it underpins.

what Goldfields has been saying, which is that we've conducted, I'm speaking for them, but we've conducted seven months of diligence, and this is what we've come up with. One more comment that I think is germane here is this requirement of a valuation. So we are required, similar to what we've done with the London Stock Exchange, we are required to provide a valuation in the COXI materials, and that valuation I think will give even more comfort.

to our shareholders and to the Goldfield shareholders that the offer price is not reflective of the true value of the company.

Yeah, much better understood. Thank you, Pierre. And thank you, Daniel. Thank you, Ralph.

Thank you. So we have no further questions at the stand. So Mr. Reisin, I will return the meeting back over to you.

Thanks operator, thank you all for joining us today on our second quarter conference call and the webcast. Please take care and stay safe. Bye for now.

Your conference has now ended. Please disconnect your lines at this time and we thank you for your participation.