Q3 2023 TRX Gold Corporation Earnings Call
Hard fresh rock went through the plant and a good recovery rate, which opens up a much broader deposit to mining and that will be now incorporated into our mine plans. We've also upgraded the plant from our learnings from that and recently a cone crusher was installed as well as the conveyors in other parts of the crushing system got upgraded in order to accommodate.
At harder rock so that's in the very very exciting.
Extremely important value creation piece that occurred in Q3, and we'll get into that in much more broader detail in the presentation.
So on the slides here.
So the next slide obviously I got to say the cautionary note and forward looking statements you can find this don't on or on our website.
And we will just leave it at that and move forward.
Today's speakers will be myself.
Andrew our COO Who's next to me across the table, Mike who is also across the table Kristina Kristina who is sitting next to you.
For new people in the Trs.
There's a lot of shareholders on this call as well as analyst for new people. What is Trs. We are a team of experienced leaders who have been executing on the.
Gold project very rapidly we've gone from zero ounces production to an annual run of 25000 ounces and growing.
Very quickly it's a high margin operations as positive cash flow and as we will get into further in the presentation. The exploration upside is still here Gary. It is an under explored property. There is still a lot of opportunity to increase mineral resources mineable ounces.
Upgrades.
Hello again.
Yes.
Very high level around the buffet called property. The last resource statement had two plus million ounces of measured and indicated.
The resources come to surface, that's where you'll see us mining the oxide deposit is Y to 20 meters were.
We're consistent with mineralization over two kilometers.
We say easy metallurgy, because it's growing crush CIL and that is in the oxides and improvement in the sulfides through the bulk sample Theres a met study being done for the broader deposit, particularly deeper parts of the deposit.
With SGS and South Africa.
We're fully permitted to 2032 and that special mining license is renewable for the life of the mine the deposit the.
The processing plant and mined consistently been meeting the production guidance that we provided we have a minimal environmental footprint. We recycle of water. We have good tailings management connected to national power grid, which is predominantly hydropower julie's nyerere facility to come online.
And we have exploration potential a lot of blue sky potential in this property over time.
So with regards to the Q3.
2023 highlights.
The 1000 ton per day plant.
To run very efficiently as well a lot of the audience knows or <unk> ball mills, there 15 tons per hour ball mills, and equals 1000 tonnes per day, which gives us flexibility in our operations.
Over 15000 ounces and sold over 16000 ounces gold respectively in the nine months.
Ended may 2023, we recorded positive operating cash flow that will continue to fund growth at both the operation exploration levels I believe Mike to Q3, 2023 is almost $50 million of investment that's already just under Stephen correct scan and so we have a strong profit margins of 42%.
<unk>, 49% respectively.
And in Q3, it was down a little bit given that the houses weren't as high given the wet season. So we expect that to pick up, particularly with oil prices being higher now as well.
Continue to reinvest the cash flow as we mentioned.
Or is that a new ball mill that will be upcoming to basically double the production rate, 75% to 100% of the production processing capacity that mill now shipped Sadat pictures of it on a truck last week Gander leave in China on the way to the pulse on the ways. It apart. So that is that's the longest lead item.
But it's well underway and we're getting on top of other long lead items here now.
We've successfully processed the sulfide bulk sample, which I had mentioned that at the beginning of this call is a game changer really from a planning and operational perspective.
We continue to achieve pause near surface drill results at Anfield niche offering we are now evaluating where best to go next in order to bring in mineable ounces and increased overall resources out of the property, so and any exploration program.
You have what I'll call. It fits of starts and stops to reevaluate marine that reevaluation phase down before we ramp it up again.
We reported no environmental or a community related incidents during the nine months ended May 31, and continue to have a very strong social license in Tanzania, So with that I'm now going to hand, it over to Mike Our CFO , who will go through our Q3 financial highlights.
Thank you Stephen and good morning, everybody. Thanks for joining us today.
<unk> continued to report strong financial results during the quarter and this was a vast tobacco again lots of gold prices as well as production from the 1000 ton per day plant.
Steve you touched on that continues to produce very very efficiently.
<unk>.
In the quarter, we produced and sold.
Similarly, 4800 ounces that realized price of almost 90 to $160 an ounce that's up from Q2.
Gold prices were printing around <unk> thousand $850, an ounce. So we did benefit from an uptick this quarter and we continue to see gold prices maintaining guidance.
It was somewhere around 1975 or so.
We continue to benefit from top line net revenues on gold price and production.
<unk> recorded revenues of over $9 million for the quarter and on a year to date basis as you can see almost $30 million of revenue.
Generated operating cash flow of over $3 million for the quarter or almost $15 million year to date as Steven touched on.
Again.
Abstentious reinvested.
Operating cash flow right back into the business.
Steve you touched on one example of that with the new ball mill that we've recently purchased but.
We've also expanded our tailing storage facility for example, quite significantly which will accommodate much much much larger production, we relocated a road, which will allow us life client access to a domain.
Hi, great blocks.
And we've also purchased other pieces of capital equipment. For example, new Gen sets new generators this quarter in good shape.
So those will replace units that we had previously rented.
You know, we're quite costly on a on a rental basis and impact our cash cost so by purchasing pieces of capital equipment like that.
Benefiting longer term and the payback on those pieces of equipment is very very very short so very value accretive.
So those are the key.
Takeaway I would say again this is our philosophy and our model, we're using organically generated cash flow to help grow the business by reinvesting right back into Epocrates.
On the cash cost side, just maybe a slight Steve maybe one or two ahead.
One or two more comments for the benefit of the audience.
Cash costs for the quarter were just over $1000 announced I think it might.
Sequence during the quarter had us undertake stripping campaign, which we touched on in Q1 and Q2, that's stripping campaign.
Involves sort of going wider and deeper in the pit as well as undertaking blasting activities, which unlocks out of high grade ore blocks, which we really expect to see benefit Q4 production and certainly production into into early next year.
Even touched on this but Q3 is the traditional rainy season in Tanzania, which was extraordinarily wet this year compared to prior years.
A bit of an impact on head grade quarter on quarter, but again on a cash cost basis, we still expect to fall within that 750 to $850 full year guidance range that.
We put out at the start of the fiscal year, albeit towards the higher end of that.
Importantly, being a low cost operation gross profit margins continued to be very high you can see on a year to date basis gross profit almost 50%.
It was 42% for the quarter what that shows is that the plant in the order that we're bringing out of the ground against really really.
Efficient and effective and important.
Recently from a financial perspective profitable.
On a year to date basis, we produced over 60000 ounces Steven touched on again revenues of almost $30 million so year on year quite a significant achievement as we continue to grow this.
Business and again importantly, operating cash flow of around $15 million will be put right back into the ground again, we'd use of cash flow from operations to make value accretive investments back into the business.
And you touched on a bit one thats dealing with the new ball mill that we expect to be on.
On the ground in the coming weeks.
The balance sheet continues to be strong at a cash balance of over $7 million.
On our pumps at quarter end as well as lots of other pieces of liquidity that we.
We can we can access working capital was positive at over $3 million EBITDA over $3 million as well again, all demonstrated strong liquidity, which helps fund organic growth.
We do expect Q4 to be our strongest production quarter of the year and we'll touch on guidance here shortly but we're certainly on track to meeting our full year numbers that Steve touched on between 20 and 25000 users I think I'll leave it there for now on the financial highlights that keeps them. Thank you Mike So on the next side.
I'm going to hand, it over to Andrew to go through the preliminary bulk sample that was done on the sulfides in our supplement your comments Andrew around us as I said.
This is a game changer, what we.
Found in that bulk sample as what we anticipated defined.
Which is the buck grief or it's really about the right size at the end of the day, so defining a grinded higher recovery rate of the goal that you will get so when.
When we grind it to 75, passing 80, which we did in this bulk sample we got what we expected which was around 89% recovery rates.
Lined up very well to what was achieved in the Sps preliminary met study when you really go through that study we presented a number that was over 90% that was with a slightly different flow sheet.
All patients followed by and re grind and CIO, but if you just do a straight.
Grinding and CIL.
Came out to what we anticipated to come out to if we grind define them, we'll get higher recovery rate. So it's a trade off between how much energy you use in the Capex you put in to get a finer grind to get the higher driving size. So that would be tradeoffs studies that will be done in the future, but Andrew go ahead.
You said it also very well.
But perhaps I could just talk a little bit about that.
So we do take advantage of.
Operational sequencing and the web Susan to take that six months, how close in terms of sulfide Sam.
Sample, we're obviously delighted with the results as you say, we've got the recoveries here.
7%.
Which is pretty much in line with the <unk>.
So thats just dumb.
Prior year.
But.
It's also very important.
Work is what we learned.
What we learned is we do have two.
Particularly crush plan has been put puts us getting the cone crusher, which is the on sites commissioned and is available for me to freshwater.
The whole call without as you said is to get the best and grind and throughput.
Like as soon as you can so simple.
Obviously, I don't going up those <unk> service business.
We want to see popcorn side brokerage going up into the bowl will the hardware.
Grinding down.
What do you use it for ball mills are going to find a seat.
And then when we do that too.
For 2000 tonnes, a day, but again sort of somebody ensure we get the.
Select popcorn going next couple months.
So what does it really mean at the end of the day.
What is really leads us.
<unk>.
We'll go through the existing plant Thats, correct, and we recovered at a good rate.
So that means that.
There is no need to come up with a new circuit at this point in time for the sulfide ore.
Well it means we can continue to expand <unk>, b and expand it which is expanding existing plants and equipment overtime or maybe faster.
It doesn't mean, a whole new processing facility for sulfide ore.
So industrial related capex of a much more complicated system.
Several times, a very most humans touch.
Touching on that.
Some of the more detailed metallurgical studies, we're doing now.
So that's pretty cool.
So on that point what are we doing so obviously there was a 2018 PFS at the company did prior to the management team ramp table coming in.
Talking about this.
At year end.
Work has gone into the infill drill program.
That's been completed we're doing the match study as we mentioned a couple of times that's across the deposit to make sure. What we found in the bulk sample and in a preliminary study that there is no changes in the euro across the deposit both along strike and at depth. So thats what that meant study will do.
The Geo Tech study is ongoing that determined to pit stops about briefly have heard rock. There. So we're optimistic that we'll get some good pit stops and are planning currently our Pittsburgh and you're around 45.
Yes about 40 degrees matching the soft rock, so I want to get into the harder rock, we expect that to be higher there is long term TSS planning ongoing obviously, it's easier to take it out of the ground in the store, it's got to be stored somewhere afterwards after going through the processing plant. So that is continuing ongoing identifying land purchase for that all.
So taking a really good look at reload at dry stack tailings that will be done over the next couple of months we're.
We're updating the mineral resource model to make sure that.
We have all our ducks in a row as we've put in place a an updated mine plan and now all ramp into one a life of mine plan looks like today.
Obviously, we anticipate that to improve over time as more and more drilling is done around upgrades given the blue sky potential around the <unk> field eastern porphyry in other parts of the deposit as well as what's at depth and along strike in the main zone.
Our anticipation.
That this will be a deposit given the width and the green and the deposits that will go underground overtime. There will be eventually to tradeoff between do you do more stripping to go wider to get deeper or do you just do your underground development and there will be a point in time in any mine plan where that trade off.
Row crops.
And you will go underground.
And so that is something that will be looked at as we.
Due to my modeling of the broader deposit overtime, so anything to add to that Andrew did I forget anything.
And we'd like to do so even as the receipt of some of the exploration slide.
As to get a couple of satellite up and running get built.
Bill its auction MFC for the mine plan. So for instance in Q3.
We had that optionality, because we had crushed stockpile we had stockpiles we had our main pit now we're going to supplement that as everybody knows my mindset is to have redundancies.
And in any operation to reduce risk. So that's essentially what youre doing in opening up either Eric you made a minor right away, but if something happens over here in the main pit for instance, you can pivot over to the satellite pits. It's the same concept of having three ball mills operated if one goes down or are you going to replace miners.
On the whole operation Desert shutdown when Youre a single mine company. So we're very positive on putting in place those redundancies overtime.
Yes.
Okay. So on the exploration side, Andrew just to tell everybody what they had here where you go I think those are the same with us on previous presentations will remember the.
The map on the right here.
So those are just very quickly.
Each of the blacks grows as two by two kilometers.
Congrats.
Special mining license and the red boundary of existing <unk> Zimbra docs on you can see where the classes.
And then highlighted in the dash lines ex.
Exploration areas.
So we continue to be very.
Excited I think he is right on the Georgia tumors.
As such it is getting very very familiar with the geological models.
Controls on Goldman organization.
So just for you.
In summary, we did 239 leases in Q3.
Over 11000 meters so far.
This fiscal year.
In terms of results for the quarter. The came out we did get some drilling on these two pull freed and I'm thrilled you spoke quite a few.
Hundreds of pieces to the.
East of the main zone.
As you would expect the best results up here for you to see so but it was very very encouraging but because this is a 14 pieces of three and a half comes upon including distributors of 10 is to poultry.
We also have another news section of the same holds a 26.
So none of those Hum.
Contains some very very significant intersections more drilling to do.
Another intersection again shrimp <unk>.
Great.
Two two.
And then I'm sure in Germany, where we have some grab samples previously from the <unk>.
Mine shafts.
Sure that's coming back a two point mindful leases so two seven grams a tonne.
He is a geologist exploration is thats very significant throw the first drill hole to goods by Congress.
Again, some really some good widths and grades.
The second Hull from the 6.1 visa credit cohorts four one grams a tonne.
Due to our attention also to the segment of these sections are shallow.
Obviously, that's very encouraging.
That's correct.
Thanks, you soon and thank you Andy.
So with regards to the yearend sort of guidance.
As we mentioned we are a low cost low risk approach to growth in the gold space 1000 ton per day plant has been operating at nameplate capacity since the end of October .
We're going to reiterate our production forecast of 20% to 25000 ounces I think we're almost 20000 ounces.
We did we did 15000 as at Q3 and again, we've obviously been reducing system. So well on track, yes, yes. So we're almost there anyway so as of today.
Should we expect Q4 to be the highest production quarter, so well on track towards meeting that goal, yes, yes. So the cash cost guidance, we really really iterate that as well.
We're advancing the <unk> mill expansion in less than 18 months.
And that will put 2000 tonnes per day, which is roughly around 750000 tonnes per annum, and that's kind of a small operation.
Two decent size so.
And that will obviously increase the production levels at Greif, and we don't expect it to double instantaneously, because he got a grade profile as well to deal with.
And putting it through the mill, so I think let's assume just remote when unexpected substantially.
Essentially increased our fixed costs, yes, we are going to see some benefits.
Customers, Yes, we're going to see yes, exactly so all in all things are going as expected and in any time, we'd run into extra ream for instance, and things of that nature, we're able to pivot and new value, creating opportunity conversion the reg.
For our audience.
Over the season. This year was about three times versus the prior year, yes exactly.
Does that actually say it built some others.
Bench strength.
Yeah.
So with regards to ESG is something that as a public company in the mining space that we need to talk to and be participatory in.
Our Clos.
Philosophy on ESG is that it's mindful it benefits and is integrated with the business.
If you hire more local people if you don't have to have them on site.
It helps to muddy the community reduces social risk.
And it also increases your productivity and governance procedures by hiring a lot more people so our.
Sure.
The mindset is the biggest beneficiary of our mining operations is always local community because if the workers come from local communities. They are the biggest beneficiaries of the spend at the mining sites that.
That helps reduce cost at corporate social risk of the project and then you want to reinvest in that community of your points are from that community at schools and in medical facilities, because that's where your employees are growing or children are going so actually really the philosophy that we have with regards to ESG you won't continue to do so students like you just said.
One quick comment again from the shareholders and I think there was not much.
For the stroke before.
As far as any of the game.
As we also take a very clear approach to deliver procurements.
For example, the CIL tanks were procured three or four hours away still works coming from shipbuilding industry in Monza.
Substantially reducing cost their cost substantially reducing risk in terms of supply chain and giving us a lot of credits.
The local government people, so shareholders communities governments and everybody is really more around.
Little bringing tanks from say Asia Tokyo.
Africa.
Both of them.
So with regards to milestones that are upcoming we've continued to deliver on the milestones that we put into the market.
Certain mill expansion will have that online hopefully early next year.
We will have planning and execution on a much larger one.
My than we currently have in the next 12 to 18 months.
Could you just progressed match that ACO Tech studies resource modeling and mine plan updates all of that and is continuing to go as well as continued nation in trailing so more of the same but just continuing.
We continued to execute at.
With coal project.
On that front.
This is a stock chart over the last year.
Year of software as you can see we've been in a range from a trading perspective, we've had peaks and valleys in that relative to the market I would say, we've held up really well relative to a lot of our single asset producers as well as the the preproduction comp set that we look at them.
From a trading perspective, we've come up decently markets that concept.
On that front.
Find anybody for any questions.
Thank you we will now begin the question and answer session. If you wish to ask a question. Please click on the Q&A icon on the left hand side of the screen, you'll see options to raise your hand to join the queue and ask your question verbally or write a question to submit your question in writing.
When you are introduced to your line will automatically be on mute.
Analysts, who have dialed into the conference call.
And then one on your telephone keypad to join the question queue.
Our first question is from Jay Zukowski with Alliance Global Partners. Please go ahead.
Hey, guys. Thanks for taking my questions.
Hey, good morning, Jake Jake.
Good morning.
First on on the rainy season, and you guys touched on it a bit with it being a bit more severe this year than in the past I'm. Just curious what was the duration. The same the typical March to may time frame or does it extend into drilling or even to why is that.
Yes, I can answer that one.
So Jake is it started a little bit earlier.
So on a little bit later as.
As well.
Quite consistent.
That said as the team oversee.
Knuckle down and go into the job.
But.
There was obviously some.
Something a bit tougher for us.
We go through it.
And to be prepared for next year, and then Andrew I think.
Isn't it didn't trickle too far into June though from memory I think it largely sort of subsided towards the back end of May So I think where youre going with that in terms of modeling Q4 don't expect it to have a significant impact.
Yes.
Yes, yes, yes.
On that.
In Tanzania that either a range or it does.
There's really no in between so it is quite dry at site at this point in time.
As you can see where the guys on the bottom right.
The lineup, yes, it was great that would've been a couple of weeks ago, So thats right yeah.
Take one question from from the Q&A from the queue.
Right now the question is why.
What do you foresee as being the biggest threat to overall cost I earn gross net margins are great would anticipate a rising cost in gold price and multiple expansion could look stunning. However, controlling cost is a premium so yes, having in control on cost is always number one.
The operation has grown quite rapidly.
A lot more controls going in place even as we speak around cost and following those cost. So that is one area, where we're managing costs. We continue to procure vocal which is reducing cost.
And it also reduces supply chain risks.
We're also what I would say as I ran next expansion.
It is proceeding.
As quickly as the other two expansions as part of that is to control cost.
Make sure that.
The operations are currently cash flow positive. So we can control the cost of that build.
A lot better than if we were to Russia.
Obviously, we got a double mining rates as well in that.
And that equation fuel prices have stabilized so fuel is always a large component of cost in any mining operation. So we're good there and I don't see any.
Over early bearing inflation pressures, Mike no no.
You touched on this earlier in the plan as scalable as well so.
Don't expect to see a lot of additional fixed.
Fixed costs, so as we grow and expand our platts.
Don't expect head count to expand dramatically.
Again, the big benefit from the sulphide bulk samples as we can.
This facility is you've touched on a few times that again expect cost to come down as a result, yes, exactly so as Mike mentioned, there's a lot of what I'll call. It infill capex on tailings has been expand it we look at things like generators that cost us a lot of money. So we bought them and that IRR or payback is quite good on that so that reduces cost.
Lower load loaders to Smarten right. So we currently rent a lot of loaders. So we're now purchasing those and that's got a payback for three months or something like that right. So so we're looking at that across the entire operation. So.
That's the answer that question, Steve you mentioned.
Fuel systems as an example, just drilling down a little bit.
We haven't met Vince.
Two.
Fuel station.
That's about a brief but to access controls the adult prisons got college, they have to be slides that all goes into our electronic system and enterprise the system might be.
So the end of the ERP, it's fully integrated.
So it's all integrated as normally as can be observed.
We would expect two.
Cameras as well yes.
These examples are just controls.
Got it.
But I think we.
We got a little ahead I think Jake is probably still on the line Jason back to you.
You had any further questions.
One moment, please I need to mute his line again in second.
Your line is open.
Great just one more quick one for me.
On the sulfide.
You mentioned the resource estimate due out around the end of this year.
How quickly do you expect to move forward with an updated economic study.
The back of that resource update.
Yes.
In the throws of that at the moment. Thanks for the question and we're anticipating to close out on that in the next quarter.
Yes, I would expect by the end of the year.
Okay. So you think you think we might see that economic study sometime in the first half of next year or before that.
We're going to be doing an economic analysis on the concurrency.
Got it okay. That's helpful. Thanks.
Yes, Thanks Jay.
Thank you operator.
There are no further questions in the queue.
Alright, so I'm going to answer a couple of questions.
Yeah.
In the chat so.
One was not paid engine Sinclair.
Jamie is currently chairman of the.
The company I spoke to him yesterday so.
You as well.
Still.
Working part time and.
And it is more in what I'll call <unk>.
Semi retirement.
Given he has.
Age of 83, but he is doing extremely well.
Another question is I keep on getting asked this one is the dividend paid in goal so.
That company has changed significantly over time.
Back in the day when I believe the dividend paid in global as mentioned the company would have been much different than it is today, but the buffering property has a joint venture agreement with steaming coal in Tanzania, and as part of that the goal is sold to <unk>.
Array is in Switzerland The fund.
Operations in that revenue then comes back into a bank account in.
And in Tanzania, So I wouldn't expect to see a dividend paid in gold in the short to medium term.
It is the quick answer to that question.
Hum.
And then I think the next one I think that's it for the questions because they are evolving.
Been answered and operator any other questions maybe one on the bottom.
Right.
Yes, yes.
We actually do have two questions now from the meeting.
I'm going to announce Stephen right. Sir your line is open.
Oh, hi, thanks, very much and I hope you all can hear me. Thanks very much for the update appreciate the strong operational performance coming out of <unk> I wanted to ask you you indicated on one of the Powerpoint slides.
Expanding cooking or aiming to expand the scope of the PFS by two to four times.
Talked about 18200, Steven metric tons in that original study by two to four times.
What actually does that mean is that expanding the metric tons by two to four times.
Or is there another way to think about what that means tangibly, yes, so I'm going to go back to that slide steep and and answer that question and what how we think about this.
So we're now about half way through the annual or billing.
Tom.
One 5 million tons. So once we do the next expansion were at around 750000 tons.
So our goal here.
And ironically almost at the average annual gold production amount.
In the next expansion so what our goal is the way I always think about value from a mining operation is the goal is to have 10 plus years.
Mine production and over 100000 ounces of annual production, then you get into the metrics of having a valuable mining operation and so that is how we think about two to four times. The PFS levels, we want an increase in the gold production and hopefully an increase in.
The life of mine of the project.
Okay.
16 years, and maybe less than that but certainly a lot more in the ounces in production.
Which expands over time with additional resources through the drop it.
That answer your question.
Yes, I appreciate the clarification Steven.
Thanks, Steve Thanks, Steven.
There are no more questions at this time from.
Meeting participants by voice.
Oh pardon me.
We do have another question.
It is from Christopher Taylor Christopher Kelly Your line is open.
Yeah.
Mr. Taylor Your line is open.
It doesn't seem to have a connection.
The floor back over to you.
So theres a couple of more questions in the queue.
With regards to Mr. Sinclair No. He is not sold the company you're still a shareholder in the company.
Were to sell the company all shareholders would have to sell their shares there as well.
We're 50000 shareholders in <unk>.
With regards to share based payment expense.
Mike you want to just answer that question, what that relates to maybe get that rolled down a little bit. So I can see the rest of the question in the queue. Just says under okay. Very good so I presume is referring to relying on our G&A.
Section of our P&L or income statement.
Basically the mark to market on.
Share based compensation for the management team and our site based employees.
We recognize those shares on our books.
Yes, and part of that is.
Okay.
There are some liabilities and in the equity for chairs to two management, which we have not received yet and have done that in order to maintain capital balances as company, yes. Good luck to you.
We do have another question verbal question from a meeting participants Craig Sutherland. Your line is open.
Hi, everybody continued success, so I like what I'm seeing I came onto the call a bit late so I apologize if this question's already been answered but.
Spansion of existing resource base I know there's been.
Production with other drilling is there a time period on what that might look like and can you comment on possible size of expansion of the resource.
Andrew.
Alright, Thank you very much.
Great.
We're in the process of updating the mineral resource.
Eluded too earlier that service.
To that in the next quarter, along with an updated economics.
Modal.
No.
As you're probably well aware.
Comments on any numbers.
So what youll see in that update to give you some guidance on on how mineral resources are now classified as <unk>.
B you have impaired amounts so.
What is looked at is what's mineable ounces.
You can take out today in mine at a profit.
Pat or in an underground.
The area that is really what the focus is as a real big focus on mineable ounces and that is where the new standards came in.
That all companies now have to fall.
We all standards were.
Whereas all your gold and will it be mined.
In the fullness of time is the way to put it.
And so these are what we're looking at is.
What is minor.
Got it.
So it definitely is more global GAAP nowadays the reporting has to be more focused more focused on <unk>.
Underground.
What are the pit constrained mineral resource.
Working first of all remind yes.
So one question that we have here is explained initial plant capex over three years of 76.
$5 million. So this is this is a good question and <unk>.
So.
In this 2018 PFS remember the company had no production.
In 2018, so the engineering firm went to win about it's worth saying if you were to construct the plant.
What it cost.
And in order to get the level of production that we couldnt get folks those sort of things and in that 2008 Etfs to get their average annual production of 51000 ounces of what it costs $76 5 million in.
In 2018, we've.
We've got to develop this property differently and a production profile and property differently by going putting it into production and building the plants on our own not utilizing for instance, EPC contracts so to get to the level of production that we're anticipating.
At 2000 pounds per day.
With the plant costs all in of that will have ended up being around $13 million, Mike just but right. Now. It's also so significantly under that $76 $5 million. So even if you double it to get the $1 5 million tonnes per annum, we'd be looking at $25 million roughly versus.
Is $76 million.
And obviously the 76, that's client capital so.
We're coming in a lot under that number and this is the beauty of.
Testing, the sulfides and as we mentioned before.
We don't need to go into the buildup leap plant right away if we don't.
Want to or don't have the capital resources to do it. We can continue just incrementally increasing this plant size.
Over time or if the economics make a lot of sense doing a lot more quickly.
I mean, Andy IRR and payback in the EBITDA increase is there to make it accretive to all shareholders. So we have options now that we didn't have in the 2008, the PFS I hope that answers the question.
Operator any more questions.
There are no further questions at this time.
Yeah.
Okay.
Now SME one clarification so.
So.
Chairman selling the company.
The go through the way companies are are bought and sold in the mining industry as a public company.
So.
If the company were to be sold shareowners would have to bolt on it.
They would go through it.
A process in which it is marketed to a lot of companies under a strategic advisory type of mandate.
And then it would have been you would take the highest probable price.
And by.
By a party that would have the full financing in place and then the shareholders would have to vote on the chairman.
In and of itself cannot sell the company.
I cannot sell a company. This is sort of would need to be approved first by the board of directors and then taken to the shareholders for approval interval.
The board would have a recommendation.
The shareholders would then get to vote on it.
Operator.
We have no further questions at this time.
Excellent.
Well, thanks, everybody for joining our Q3 2023.
Conference call a lot of good things going on a lot of moving parts, but we're pretty positive.
Whats upcoming we reiterate our production guidance, our cash cost guidance on where we're going in in our planning.
Brief and we continue to look forward to positive operating and exploration results going forward.
<unk> everyone for joining the call today greatly appreciate it you can call any one of us anytime with any questions.
And finally, China.
Goodbye everyone. Thank you.
This concludes the meeting you may disconnect. Your lines. Thank you for participating and have a pleasant day.
The conference is no longer being recorded.
Okay.
Thank you operator.
Thanks Sterling.
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