Q2 2022 Yamana Gold Inc Earnings Call
<unk> continue to standby we thank you for your patience.
Yes, we locked a silty duckenfield they'd be touched soup the level pre owned a beautiful I have someone to look at it because that's the renewable isn't that he owns the best healthy.
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This conference is being recorded so it's gonna stay home as it always is.
Yes.
All participants please standby your conference is ready to begin.
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.
<unk> and resources, the timing and amount of estimated future production cost of production capital expenditures future metal prices and the cost and timing of the development of new projects.
For a complete discussion of the risks uncertainties and factors, which may lead to the actual financial results and performance being different from the estimates contained in the forward looking statements. Please refer to Yamana press release issued yesterday announcing second quarter 2022 results as well as the management <unk>.
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 P. M Eastern time.
Replay information and the presentation slides accompanying this conference call and webcast are available on Yemenis website at Yamana Dot Com I will now turn the call over to Mr. Daniel Racine, President and CEO . Please go ahead Sir.
Well. 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 days under the block, our senior VP Finance and Chief Financial Officer, Peter Marrone, Our executive Chairman will also talk about the Goldfield agreement. The rest of senior management team is also available for the Q&A portion of the call. Peter then transit returning from meetings with South African shareholders.
So we hope this connection or we made adequate throughout the call.
The safety health and safety of our employees always come first our total recordable injury rate was <unk> 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.
Despite our excellent track record. This is something we are always working on improving and getting better at that.
The company continues to implement its Scott.
If its climate action strategy during the quarter, including work on the I know, there's this to support the conversion of export.
Some at least 50% of Cerro Moro several morals electricity requirement from these and diesel to the wind power.
This will help meet the green gas greenhouse gas emission reduction required between now and 2032 achieved a company one five degree Celsius science, the science based target and also reduce operating costs.
<unk> mineral reserves and extend the mine life.
Work also continued to progress on an auto climate action objective, including advancing the evaluation of other operational projects to reduce greenhouse gas emission in the estimation of our scope three emissions.
I'm very pleased.
With Yamana named one of Canada's Best 50, corporate citizens by corporate Knights magazine for the second consecutive year, the company's ranking improved to 30% overall and we remain the top ranked Canadian mining company on the list. We are very proud of this exceptional recognition.
<unk> by the <unk>.
Dedication and hard work of our all the employees and business partners.
Further demonstrating our deep commitment to ESG excellence earlier this week Yamana ESG rating as just to remind by the MSCI was upgraded to <unk> from BBB trip.
Triple B.
Great 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.
<unk> is our longest therapy of prioritizing the health and safety of its people and 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 highlights we continue our track record of operational excellence and produce over 232000 ounces of gold exceeding our plan for the quarter. The standout result, or driven by Canadian Arctic settle model Jack will be not in our opinion, notably Jack will.
<unk> achieved record quarterly gold production silver.
Production of nearly $2 36 million ounces was in line with plan a civil model delivered strong results with increased mill feed feed from higher grade zones.
Geo production of nearly 261000 ounces was in line with plan. Despite the gold to silver ratio being near an all time high and significantly above budget with the strong year to date performance Yamana is well positioned to meet its annual guidance as.
As you know during the quarter Yamana entered into an arrangement agreement with goldfield more information will be provided by Peter later on on the call.
While I won't spend too much time on the numbers on this slide given that we pre released our operating result, I don't want to take the airport.
I do want to take the opportunity to comment on our operations staff.
Comment on our operational staff and the excellent results achieved to date.
Turning to the individual drivers of our performance can eat and Mark take deliver a strong second quarter, which exceeded our plan.
We are also continuing to advance the development of the underground, obviously project, which remain on budget and on schedule. The underground is now at 380 meter vertical depth below surface and two three kilometers of Ram companies are to date.
<unk> thinking is scheduled to begin in the fourth quarter of this year.
And we are expecting first production from Odyssey South during the first quarter of 2023.
We continue to see huge opportunities at Odyssey and the future exploration work is delivered from rising result at east Goldie extending mineralization to the east as well as the Odyssey, South internal zone, which demonstrate the potential to add mineral resources.
Jack will be another record quarter, driven by higher ore tonne mine with production for 2022 on three on track to increase the nine months for the ninth consecutive year.
Underground mine development work continues to gain access to new mining panels.
All in all and together with the higher ore tonnes mined provides additional flexibility through the development of stockpiles supporting higher throughput expected from the ongoing phase <unk> expansion.
These positive trends should continue as the phase two expansion throughout object.
Throughput objective was realized in July establishing Jack will be in a sustainable production profile at 230000 ounces per year.
Several more will continue to benefit from access to additional mining faces, which supported the increase in mill feed coming from higher grade underground ore, which accounts for over 80% of the now stabilized throughput.
At Cerro Moro, we are continuing to advance in parallel the scalable plant expansion study and potential EBIT. Each project and are evaluating options for alternative source of power, which include a connection to the grid and wind power.
Increased mill feed coming from higher grade underground ore and improve recoveries contributed to a step change in year over year production. This trend is expected to continue in 2022 with additional contribution from of ore from <unk>.
As planned out opinion 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 half will account for approximately 60% of the silver production due to mine sequencing.
The key strategy to increase the value with helping you on is to establish additional mining sectors and increased 19 flexibility.
With exploration success the objective opinion.
And you're on is to utilize the excess plant capacity and increase production.
And then lastly, I'll get that 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, Florida, and we have identified several new opportunities to increase recovery at the processing plan as we continue to work towards the plant Debottlenecking study, which is expected to allow for increased throughput in 2025 receive its perm.
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Yes, My now continues to advance strategic initiatives across its portfolio and we were pleased with our partner Agnico Eagle to announce positive exploration results at Odyssey and was that Mac on the Wednesday. These.
These results further support our strategic outlook and the company's effort to meaningfully extend its sustainable production platform.
Notable highlights Odyssey include East Goldie exploration and infill drilling which continues to highlight significant expansion potential.
Recent drilling as extend into east Goldie deposit to the west by approximately 225 meters.
And to the east and debt by approximately 500 meters to more than 700 meters from the current mineral resource offline.
Shallow drilling at the East Goldie extension also extended the mineralized plane, an additional 900 meter up from previously reported drilling.
With 12 Thrills 12.
12 surface diamond drill active on <unk> as well as for 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.
If you can please 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.
We are very excited about the generational mine life potential at Odyssey and the project represents one important step towards realizing the board approve yamana one five plan.
It will establish a large sustainable annual gold production platform between 500, 600000 ounces on a 100% basis with a strategic mine life well into the 2014.
Importantly, importantly on a 47% of the current mineral resource are included in the 2021 mine plan and as our exploration success is shown we believe this potential for significantly higher production well into the future.
Equally as important the capital expenditure to achieve this largely offset by is largely offset by pre commercial production at <unk>.
The current gold price, 72% of the initial expansionary capital through 2020 and weight.
Eight will effectively be offset by pre.
Commercial production as.
As we move into the upper part of the ore body starting in early 2023.
The exploration success continued with our <unk> development project in fill drilling.
Our results continue to confirm or exceed expected grade and width.
Highlighting the continuity and tenor of memorization exploration drilling also delivered positive step out drill results from Wildcats out or drill holes provided confirmation of the new mineralized plane, which remain open at depth and along strike.
Additional exploration targets on their property, including the adjacent Fokker on field and Lockbox and properties provides further upside.
The positive infill and exploration drilling results to date provide 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 250000 ounces of gold per year.
To the life of mine that ratio of 169000 ounces in the feasibility study.
At very attractive all in sustaining costs.
These exploration results together with <unk> will be not reaching the phase II target throughout throughput and there wasn't a bulk sample approval by our board of months III that we are delivering step by step on this sensible growth and value creation paid late laid out in our <unk> five plan.
Our board approved the <unk> 1515 plant as identified a path to progressively increase production to $1 5 million gold equivalent ounces, a series of project and optimization with very modest capital requirement and the 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 the slow capital growth will strengthen our already leading 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 app.
The ability to be mixed and matched to optimize free cash flow generation.
So flexibility allows us to rearrange adjust deferred.
Move forward project at our discretion, thus having confidence in achieving our overall growth plan.
<unk> 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 reached $485 $6 million up over 11% from the same period last year.
Margin, excluding DD&A 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 <unk> <unk> per share compared to a loss of $43 9 million or <unk> <unk> last year.
But on an adjusted basis earnings were <unk> <unk> per share versus <unk> <unk> per share last year, we delivered strong cash flows again in the quarter with cash flows from operating activities before net change in working capital.
$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 compared with $153 5 million last year Q2.
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.
We ended the year with cash and cash equivalents, we ended the quarter, sorry, with cash and cash equivalents of 500, $545 $1 million inclusive of $218 3 million available for use at Tomorrow project.
Daniel already noted, we expect free cash flow to increase quarter over quarter with the strongest free cash flow 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 product.
Productivity initiatives at our operations in.
In addition to our ongoing procurement efforts and provision provisional inventory builds from earlier. This year. We are confident we'll be able to continue this trend for the balance of the year and with that I will hand, it back to Daniel for some final remarks.
Thanks, Jayson before completing our presentation as we have Peter another call, perhaps Peter you can give a summary of the status of the amount of goldfield deal.
Okay, Daniel Thank you very much and.
As you can see from our second quarter results our board of directors took.
Business as usual approach this is a forum.
For as you have adequately done.
Discussion and promotion of Yamana is operational strengths financial performance and prospects and opportunities. Our board felt that there were a forum for discussion of the deal.
This was a forum for discussion of our second quarter results. However.
An important point is that the substance of the Goldfields Yamato deal.
Humana and its value and its prospects and taking a business as usual approach. We are implicitly promoting to deal with further explanation of what we see as value.
And what goldfield saw value.
And its diligence as an update on the deal itself.
We have begun and engagement with our and Goldfields shareholders. Some are aware that we were invited by goldfield shareholders in South Africa to present, our company to them.
As mentioned earlier I am returning from that engagement in 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.
New proposition and the industrial logic of the deal is in focus.
And while shareholders are expressing an understanding of the deal and support.
Good governance principles tell us that it is critical that shareholders should want to see full detail and that full details provided when we end goldfields provider information circulars.
And for formal commitments and support we certainly expect.
But that will be forthcoming once those circulars are.
Yeah.
Interestingly, our circular will provide context for the deal and background, which is typical.
We will go into great detail on that background not only on the deal but more broadly.
Similar to London stock exchange rules Danielle.
<unk> stock exchange requires that we include evaluation.
The company and that valuation will demonstrate that the implied value and 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 Gulf.
Goldfields publication of its first.
Half year results in August likely in late August publication of information Circulars in September and shareholder votes Kober.
One final comment that I'll make before passing the call back to you.
On the operational synergies, we have been taking a responsible and almost literal view.
These operational synergies and optimizations.
We have identified several 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 so a lot is north day.
The asset in Chile that is in development by Goldfields.
<unk>, garnering more production based on a faster and better transition from development stage to operations, particularly with opinions during that transition.
Possible fast tracking a phase for jacobina.
Advancing our more aggressive exploration program.
The jacobina greenstone belt with Goldfields generations of experience with Paleo <unk> deposits such as these.
Possible development and even optimizations of Mara.
Goldfields experience along with ours.
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.
Sure and Goldfields deep shaft underground experience, we'll look at how we can.
With the support of our partner at Canadian <unk> 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.
In September .
And with that I'll pass it back to you didn't know.
Thanks, Peter this quarter further demonstrate our operational excellence.
Our Americas focused portfolio is continuing to deliver as we progress towards the Yamana one pipeline in a financially prudent matter with exploration optionality, providing even greater upside.
And with that I will turn it back over to the operator for questions operator.
Yes. Thank you we will now take questions from the telephone lines.
And you're using a speaker phone please lift your handset before making your selection.
A question. Please press star one on your devices Keypad you may cancel your question at any time by pressing star too. So please presto and at this time. If you have a question and there will be a brief pause while participants that gesture. We thank you for your patience.
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 Watson Act update.
With this release and perhaps not with the life of the Investor Day that you had where you targeted the one 5 million ounces.
And you kind of showed the market all of your projects on top of it but didn't release. This one so.
Is this without not ready yet at this time.
Three months ago, when we had that Investor day, it wasn't it wasn't ready Anita.
Got.
The results 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.
Okay.
And then the second question was with regards to shareholder engagement and that's probably with a question for Peter on the on Nick Oldfield steel.
Could you just give us a little bit more color in terms of what youre seeing with the investors that you meet with them the kinds of.
Color and detail that youre, giving them that's incremental to what you've put out there publicly.
Mostly it is information.
Nothing is new.
Other than of course, what we publish as new information is similar to what you asked about it wasn't mark.
But it is informational.
You start.
In some respects it shouldnt 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.
So what I mean by information elicit what we're doing is we're educating.
The shareholders of Goldfields Mountain was all about.
I said.
Earlier that.
The substance of this deal is the amount of what's being paid for it is there more value there how do you recognize some of the synergies, which we which we have alluded.
So mostly this is about engaging with your 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.
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 London that Avast.
How can we get to this point I think that they've taken comfort on that.
The substantive side.
Certainly seemed.
It seemed to us in particular based on sidebar discussions. After these presentations if you can guys.
It was a refresh.
Sure.
We're becoming very comfortable with what Yamana was all about and the value proposition to which obviously.
Okay, and then just one more in terms of I think when you.
Presented a couple of weeks ago and increase the sorry, I noted that you guys were going to be.
The increase the dividend and noted that.
Geoff gold fields will be lifting and in Canada.
You mentioned something about.
Other approaches and that information will be in the circular I didnt follow up on that call, but I was wondering if you could provide a little bit more color about sort of the approach that <unk> had and if anybody.
I approached you since the deal was announced.
Well, we would not be in a position to be able to say anything about that.
What I would say is if you see our arrangement agreement 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 would not be superior proposals.
But I think the more important point is the first part of your question in that in that first part of your question.
It goes back to.
For our board of directors in 2020.
I don't know if you agree but our board of directors came to the conclusion.
Well substance and quality will always matter.
We are increasingly in a world where we are.
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 that plan and what we announced at our.
At our Investor Day earlier this year, how do we get to that $1 5 million ounces, Daniel will discuss that on this call earlier and how that number could also be larger as a result of what's in the portfolio.
Look at a host of other things as well what can we buy.
What.
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 those deals make sense.
So it was a broader engagement that 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 the goldfields assets 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 knee.
Nature of the geology there.
Ore bodies and their mines by comparison to ours.
And where we can get some synergies as a result of a combination of two companies. So and of course, what the result is the result is not just the size of the company.
But also the quality and again im repeating things that we discussed on that call a few weeks ago, but it's not just that we become a bigger company and amongst the super elite solar industry, but it's also that we have longer buying life better free cash flow generation better growth, although managed growth as you said this is growth.
It comes at very low capital cost.
And with a true value proposition because of our market capitalization is combined is still well below those of the companies.
Okay. Thank you very much and.
<unk>.
Solid quarter in keeping costs under control in this inflationary environment. Thank.
Thank you Anita.
Thank you next question is from Fahad Tariq from Credit Suisse. Please go ahead.
Hi, Thanks for taking my questions Firstly on <unk> and I. Appreciate there's a lot of information. That's been provided can you just remind on the.
Basic.
Commentary.
Likely to be below.
Feasibility study average of around $830 an ounce.
And that the Capex 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 offset so I'm just trying to understand how that's factored in.
Thanks, Stefan Good question look the guys are working on constant basis to see on the costs 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 2% make a big difference. So this is on the cost side that we think are 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 one 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 toyo onto to complement on my answer.
Hi, Fabio on here thanks for the question.
Just wanted to see I mean answer Daniela thing here to support the bulk sample we did the cost analysis and mining sequence and all of that and for sure we adjust slightly to 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.
Additional I would say capex investments.
And the processing plant and basically the underground still about the same because it's a wider scope of a really wide. We have some good results with infill drilling we've kind of stopped slightly bigger so that support nicely I mean that I think we set up a new plant. So for now I mean.
Considering the costs I mean, we came up to about the same capex.
Okay, great. So would it be fair to say that 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 potentially lower capex if things normalize.
Yes, Didnt normalize yes, but.
This is why I said and Youll I'd said, we're working and looking constantly all we can improve and at the end of the day if costs normalize and they go back down to where they were before and that means that the capex will be similar or even lower.
Like I mentioned to one of the big things, we're finding is the.
The flow sheet that we have for the meal that we where we design at 700 7500 tonnes per day and then you know we're going to process 7000 ton per day, we see that even that mill can process a lot more time, Jack will be known as a good example is the 6500 tonnes per day that we're running at 85% now so thereby optimizing.
Recoveries by optimizing the flow sheet.
Reducing and even in some areas some costs or changing equipment. This is all we arrive that now in today's world with today's cost of equipment and everything at the same capex. So it's possible by 2024, when we get the permit and go ahead with construction then cost will be similar.
Or hopefully lower.
Okay understood and just maybe one question for Peter or not to belabor the point on the Goldfields transaction, but.
Are you finding that at a high level is there a different sentiment when you talked to humana's shareholders versus a sentiment when you talk to goldfish goldfield shareholders.
Are you finding different lines of questioning from each shareholder base. Thanks.
We've only begun to.
The engagement with goldfield shareholders is a new thing for us.
Only recently begun that.
Literally over the course of the last two days in this past week.
I would say that the engagement is similar to the extent that our shareholders are.
Looking to learn a bit more about goldfields. So is at least that do not know.
The company will.
Finding something very similar with the goldfield shareholders.
As it relates.
It relates to us.
Our shareholders are not.
As interested in the question of.
What is being paid for your mono and understand the legal field shareholders are more interested in that.
The implied price when the deal was launched with $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 manage the growth of the company is.
Modular as Danielle mentioned can be sequenced and the capital intensity is comparatively light.
In other words, it doesn't impinge on our free cash flow and there is certainly is a tendency to focus on free cash flow not dissimilar to our shareholders and other shareholders the importance of free cash flow and balancing between spending money on growth projects.
Returns cash returns to investors.
And one interesting point.
Think might resonate with us.
One of the things that was not well understood is that.
Consensus models your model others.
He has not taken fully into account all of the value. That's in your model our internal model certainly shows a net asset value is substantially.
Substantially in excess.
The net asset value.
Consensus.
But one of the things that was comforting is that what is the implied price that $6 7 billion to which I referred which is roughly let's say 850 Canadian to $9 Canadian.
This is actually an average of.
The target prices of the analyst community that covers the company and Thats something that was.
It was not understood and resonated so in other words.
Goldfields, saying in wheat punctuate. It is is this this was essentially a normalization a bit of an equalization payment to reflect what is likely on the come in the next few months and quarter and no longer than the next year.
But implicit in that is considerably more value.
And this is where we highlight that greater value.
So thats the distinction I think I'd make between the amount of shareholders and what they focus on.
What we're now seeing is 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.
Our next question is from Ralph <unk> from eight capital. Please go ahead.
Good morning, Humana team, thanks for taking my questions.
Daniel if I can start with you.
Just some rough estimates in the context of the strategic life, plus 10 to 15 years at Wassa that gets me to around sort of a 3 million ounce deposit in terms of the reserves required to support that.
Conceptual plan, which is yes.
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.
Good question, Ralph do you have it right.
We have about one two.
There will be analysis.
Sure.
We had one.
And then one.
But when we look at the drilling we're doing.
You all had mentioned earlier that we're.
We have we're finding what are resolved.
We have the new discoveries that we have.
What.
I mentioned before we are going to start drilling on our feeling is that function.
And when you can complement but so far exploration is returning amazing result, or in 2020 tool 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 and build the mine put it into production.
<unk> reached out to.
That number.
<unk> easily and then remember that.
We're in the process to ash water permit to start to ramp so we will develop that ramp.
<unk> next year for the next few years to get the mine ready for production when the mill will be built and then we will have the chance to drill from underground because everything stays open. It's open on all directions. It's open going deeper it's not drill deep very deep because it is drilled from surface, but it's still open on all direction all of those on and it's open <unk>.
In the West So and then we're finding new zones. So we don't think it will be a challenge to reach that.
Yes, Ralph maybe to add to that.
I mean, we do have about 2 million ounces in our plan and we have <unk> and inferred.
Can be transfer as well, we're talking about 400 to 500000 ounces there.
We also excluded some zone initially that's going to be put into production, maybe we'll look at cut them to feel a little different mining method and we also have to realize a big block around the oldest condition that can be put into into the plant as well.
You also have to consider that there is on the mining sequence that we have we have focal years up 250000 ounces per year with what we have.
It means that it would give us until 2030 to find those additional ounces and sustain that plan. So.
Now in 2030, I think we have plenty of time to.
Two to increase the value to a project that we bought about no more than two years ago.
It is really promising and we have to consider Concord, I'll turn that to a close by that we're kind of starting to explore and we.
We see really good.
Good news coming up on that on those two projects as well.
Okay great.
That's a good update.
We'll have a question for Peter.
Peter I'm, hoping you can help me to help us qualify the shareholder engagement as it pertains to the 75% thresholds for gold sales, which in some circles is seen as a high hurdle rate is the goal when it's all said and done to reach a substantial portion of the shareholder base at the end of the.
A day.
Is that is that one of the main goals.
At this juncture, we're in the information.
Communication stage, we have not asked any shareholders goldfields is not asking you to 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 wanted to make sure that they have checked all the boxes and that includes looking at the disclosure and information circular thats very typical and of course related to that is the proxy advisory services glass Lewis and ISS in their commentary.
On.
On one deal over another.
That would apply in this case.
In this case as well.
But I would say to you that.
My impression in our broader management and crushing.
Is that the 75% hurdle has to be seen in the context of a 66% and two thirds hurdle, which is of the shares that are represented at the meeting.
So 75% is higher than 66% two thirds, but its not.
It took more than incrementally higher, but it's not substantially higher as a hurdle and I go further I would say that.
If we look at the shareholder profile of your model and the shareholder profile.
Goldfields Goldfields is 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% two thirds. So on balance we're not seeing difficulty of 66% and two thirds for us.
But equally we're not seeing the difficulty of 75% of the shares that would agenda would be represented by proxy.
A meeting.
At a meeting for that.
And there are large shareholders, particularly those who take a longer term view.
Who are going through that information gathering stage, who are learning about our company and about the value proposition.
Being created.
And our impression is that ultimately those shareholders I don't mean to be presumptuous, but ultimately those shareholders would be supportive supportive of the deal.
I take comfort in what we're saying because it underpins where gold fields has been saying, which is that we've conducted I'm speaking for them, but we have conducted several 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 evaluation. So we are required similar to what we've done with the London stock exchange, we are required to provide a valuation in the proxy materials and that valuation I think will give even more comfort.
To our shareholders and to the goldfield shareholders.
The offer price is not reflective of the true value of the company.
Yes, much better understood. Thank you Peter and thank you Daniel Thank you Ralph.
Thank you Sir we have no further questions at this time, so Mr. Christian and I will return the meeting back over to you.
Thanks, operator, thank you all for joining us today on our second second quarter conference call and the webcast. Please take care and stay safe Bye for now.
Yeah.
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