Q3 2023 B2Gold Corp Earnings Call
Thank you for standing by this is the conference operator welcome to be to go corporations third quarter 2023 earnings results Conference call. As a reminder, all participants are in listen only mode and the conference is being recorded after the presentation, there will be an opportunity for analysts to.
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I'd now like to turn the conference over to Clive Johnson, President and CEO of B to gold. Please go ahead.
Thanks, Jason.
Welcome everyone.
To us it is.
So to our conference call to discuss the results of two quarter.
So 2023, I want to say a few introductory words and then pass it on.
We have you know.
Worded here Vancouver wharves.
Our executive team.
Do you hear from me again.
Mike will walk us through some.
Some of our CFO, who will walk us through.
For the quarter.
So viable Shaw will walk us through an update on that.
Okay.
Sure on the buys but also on the development projects, what we're doing is.
Bruce update also a doctor and also talk about the way forward and the.
Potential for Bally expansion that gives you a good update on that.
You've seen the results of course through the.
The installation followed that was said yesterday, we were pleased with our results for the third quarter.
We had another solid quarter.
So good some good costs.
And one of them that are well run and clarify our sterling.
Good operating teams swap book on Oh.
Those sites are like Oh, well take you through some of that.
The results for the quarter are I think we're feeling very comfortable about people attracts.
Our guidance for sure.
For 2023, so we'll update you on that and tell you why obviously working first of course is scheduled for a good quarter coming up in the fourth quarter, we'll talk more.
Can you talk about that.
Yes.
In terms of where we are and our.
Focus so I'll talk about looking forward a bit.
Our strategy.
The key point as always is to continue to be irresponsible.
Right off the base of oil production from our existing mines.
When you are in the works on the ESG front. So many different places obviously the focus now going forward.
Besides this the goose.
You'll hear more about Colombia extremely well the construction.
And.
We're on schedule and attract that's expecting first gold production in the first quarter of 2025.
We'll hear from bill, but that's going extremely well they place without also have quite a bit of exploration.
Children going on.
So George and they're starting to get actually rolls back.
Of course, where we're pleased with what we're seeing.
Both have been looking at.
So let's see.
Infill drilling we're doing but also some of the step outs looking to see is the potential as well.
Well I mean, I'll have Jason beyond what are controlled.
But remember they have very small exploration budget.
Appropriate for a single asset company trying to finance the building, but all over the news release, So next week.
The other piece draws those for you next.
Next week or so.
We're excited about that.
We're also of course, I mean going forward looking at the alternatives and timing to potentially expand.
By production by truck more from the North.
So there was some talk about maybe went into on road building up a second bill to further.
Increased production from initial cooler complex, we've had some we've been waiting for a permit from the government. The government is everyone's probably aware has come out with the new mining code, we're looking how that works.
We're available on railroads here as well to walk us through some of what we're expecting there. We're looking for at least the government in the near term to try to discuss the implementation of the new code and how that might look for in terms of expansion and talk about everything we're doing down there with the government silver for two two having a positive result, there we do have heard repeatedly from the government.
Recently, the governance aren't going to be a bit too.
Coal mining at Florida, desperate to go buying it and we definitely had some they are coupled.
Coupled with recently about the way the beach and gold has operated in Bali.
We're confident that we can continue to work with the government as we always have to find the best way forward for all stakeholders.
I'll talk more about that obviously as you know was exploration.
M&A and looking at opportunities and as always very important thing of what we do I haven't seen that in the.
Exploration point of view, where we're still up it went up another significant budget for next year.
And you have some questions about that if you'd like but I've. Another looking at brownfields exploration was always something cool weather out there but.
And also additional original exploration, but also looking at some new opportunities over Finland.
We are establishing the company's exploration company in the Philippines to look at other potential opportunities we see in the Philippines. So Philippines is a good place to be in the mining industry, but it's largely been explored for decades, we see ourselves as one of the real success stories here in a couple of degrees in new government do you think the new.
Government has shown that they are quite open to support investment including in the mining sector. So we see an opportunity there. So we have a 100%.
All told our Philippine exploration companies to look at further opportunities New York's Codebook logistical things.
And in addition to that we will continue to look at investing.
Investing in junior companies.
Where they have what we feel is.
Your next patient people have good exploration.
Aspects, we know the market is gold equities today that solution, so that allowed us an exploration company. So.
So companies like so like where we're at that point in time.
Yes sure.
Marathon is et cetera.
Matador would just give us a.
Batteries horse races.
Oh, yes.
So we like the exploration upside that.
That's about a door.
Close to going well there.
Yes.
The other thing that May change going forward as our fiscal and financial discipline. Much 90 shown for a long time at the end of the day, where a very strong financial position still paying the industry leading dividend.
That's sort of a 5% yield.
At the moment and we're basically debt free so extraordinarily strong cash position and sitting on a substantial cash balance. So we'll have somebody to spend next year of course with dose. So you had a couple of spaces, we have absorbed significant way for us to maintain at all times and very strong.
Financial position so.
In terms of it just eliminated we've made it clear I think that will continue to do that with all of that what they're looking for new development projects. We're very focused on what we have.
They reduced construction and then also along with the expansion.
That's especially that.
And they'll be able to launch it you know we did acquire theater has a pair of glasses and a deal of the day, we really looked at it as a project or by one company and what size and scale should it be you're always pushing it because it was such a T J P with Anglogold Ashanti.
To actually make it big enough for two companies. So we were looking at 354000 ounces of years now there is a there's a higher grade core of the government's your deposit can significantly reduce the capital costs and make it a better project. It was close before can where it makes sense economically and trucks approach to unfortunately with us doing it our way.
And building something maybe that to produce 200 or 250000 deaths a year.
It was a good bit lower capital costs. So we're kind of a treat but added what others will do the study next year, probably a P. Eight it's about at sea. So that's what we see down the road, but we do think that.
That's a joke is a good place to be in Colombia, and Theres lots of local support government and local citizens and even the federal government civil debate, what some call them I need to go ahead.
The country of Columbia So.
I think.
That helped us a lot of maintenance.
Some more details on the results.
Okay.
Great. Thank you guys are so good.
For the quarter and give you also an overview of how we see it out turning for the year the guidance, we'd give them for full year.
So a solid quarter starting on the revenue side, we sold 249000 ounces at an average price of $19 $20 per ounce for.
Our revenues of $478 million.
I should say overall.
Sales were a bit higher than budget, we're about 16000 ounces I had probably on the budget side, where we felt ourselves and we think we will see that all three without those were sales that were sold out what we can give them a treaty. We think for the year will see us between that as well. So it should be slightly had sales wise versus production.
Yeah.
On the production side for the queue.
Total coal produced from our three operating mines 225000 ounces.
Which is just slightly 8000 ounces less than budget and that's that's a tale of some offsets I think on the Colo side. So cold. It was about 13000 ounces are under budget and it was impacted really by the grade and lower mill feed grade that was going through them.
All was hit by significant precipitation.
The third quarter that didn't allow us to mine some of the phase six higher grade material as quickly as we thought so it was supplemented with.
Stockpile low grade lower grade stockpile material, we do expect that we are done with the basics of running that material and we expect that wheel well more than catch up in Q4, we actually expect to beat budget for for coli in Q4, so that was that a temporary rain induced demand I think that you'll see us catch up as we go.
Through into Q4, I missed that you know what you've put up both of those operations are actually ahead of budget production wise someone's buying 51000 doses 5000 ounces ahead of budget or would you call. It a 45000 ounces 2000 ounces ahead of budget.
They both benefited from a great site.
Mill throughput episodic.
What did you go to the better grade stuff.
Definitely at least partially is not significantly impacted by the war check material, we're mining material from goldstrike underground.
That's an average of about five five grams per ton and I think just to put it in context I think year to date, we've taken a mine approximately 50000 ounces for Chegg and we expect will show material to to continue underground material continue to be minded at least until 2026.
We continue to look at underground potential there.
Yeah.
On the cost side that taken into account those production results. Our overall total cash operating cost from all of our operating months, we were $741 per ounce.
Including our share of caliber $755 per house, so approximately $50 lower than budget.
And that's a good result against the Cola was a little over budget. It was $688 or just under $40, an ounce higher than budget and that's a function of the lower gold production was up from call. It the.
And like I say that a lot of that was weather driven and we expect to see some catch up in Q4.
MS body in North Dakota were all significantly under budget. That's been a story that's maintained as we gone through the year and it continues and that their beats on budget or a function of more production to each site and also a lower fuel costs, particularly if its bad he was bodies being both a chipboard these old Crosby.
But with 20% less than budget.
Oh Your code was also seen lower diesel costs, but again, because it's on the grid now it's not impacted by age at all anymore. We don't we don't run the mill.
Power is an issue for generators anymore, we take that part of the great. So diesel did have an impact there.
And then when we when we take that and we look at the all in sustaining costs.
So the Q total from all of our operating mines, 1200, and $73 pronounce approximately $90 less.
Less than budget and a game that's firstly a function of the lower cash cost that we've seen lower than budget cash costs.
And higher than budgeted sales as I mentioned, we are a little bit ahead of ourselves and all in sustaining costs are measured on per ounce sold.
And then also some some lower Capex and then we thought it's certainly a mezz body, though in Chicago, So some of the Capex.
It's lower than budgeted and we think there'll actually be a permanent beat for the year. So I think we guided for what would you call. It would be probably the first stripping out somewhere in the region of $10 million up we're not going to incur through the balance of the year affirmed its daddy probably someone to reach the 4 billion for the balance of the year it will be permanent.
Against budget.
So call it did see some higher capex, we did see some I haven't budgeted sustaining capex really.
A lot of that believes in fleet, the new fleet our fleet rebuilds.
And as we look forward.
But maybe it's just a comment that's where our year to date.
Production wise, we are very close to budget, where we were at 3000 ounces from normalized lower than budget like I say, we are expecting to do some catch up at all in Q4. So we're confident.
To meet our budgeted guidance range for production.
I should mention as well that we didn't have any for polar resume production. This too we had we had forecast that we would see a start with polo reasonable production. However, as we've mentioned on other calls there aren't delays are with them.
Mining on Meli, and then you might even could be an issue there were delays in getting new mining permits.
So we haven't been able to get coal result production up and running this year and that Bill will talk a little bit more about that what the plans are for next year, but notwithstanding the fact that we didn't have full cola regional what with what we see for call. It during Q4, we still expected for all our production for the full of complex, which included regional in our original guidance.
Do expect that we will be able to meet our guidance range, which was 580000 and 610000 doses.
And on the MS data you know what you call to say confident I think that we can maintain the beats that we've seen so far this year and so overall, we think there's value will come in somewhere at the high end of its guidance range of 170 to 119000 ounces.
Kona will come in and its range of 190 to 210000 doses and overall, we reiterate our consolidated guidance for the year don't change over the hole there.
When you look at the cost performance year to date, it's so cold is pretty close to budget on the on the cash cost side year to date and it's bad you know what your code, we're still significantly under so when the cash cost side for the full year guidance. We said, we expect to be within range for Colette.
But we have re guided cost down downwards for both Mezz body I know in Chicago, We Havent re guided overall consolidated range. When you when you blend all that through but we do we have guided that we expect to commit and so were below the low end of our consolidated guidance range for cash costs.
On the all in sustaining cost side, a similar story.
Oh did you called them as bad in significantly under budget year to date. So we have we got it there all in sustaining cost guidance down but.
With the cold weather as I mentioned in the Q, we saw some buyers sustaining capex and we've also improved some some additional sustaining capex. The game most significantly related to new fleet and fleet rebuilds for colon might add some additional solar plant costs.
And with those.
We see the coal sustaining capex could be somewhere around $50 million higher for the full year than budgeted and so with that in mind, we re guided for.
Coal is all in sustaining.
Cash cost guidance upwards for the period, but when you when you marry that up with where you guys out for the Miss but I didn't know what you'd go to overall, our consolidated guidance ranges are unchanged again and again, we expect to come in at the low end of that guidance range.
And just another common between the Capex, although we have the highest for coal sustaining capex upwards. There are other for colon non sustaining capex expenditures that haven't all been incurred this year are unlikely to be so we think they're upset and when you look at the total capex for the year that was budgeted and where we see the forecast coming about total capex, including.
Sustaining and non sustaining for both.
All the mines, we think we're going to come in very close to right on budget. So theres no overall change, but there is a bit of a change between the sustaining and non sustaining mix.
But as the operating results a few other comments on on where we are as I mentioned for bold original delayed until we get into next year and I understand Hum.
Our 2020 to be mining portal, we applied and get an updated study for reasonable but ill talk to that.
But I'm a lot to you as you saw and as we announced last period, we did play out the second half a G as half of the JV. So we know when to grab a larger project to the 100% and that that purchase was used as a measure the trigger to measure the cost that we had all the barrels you forgot.
Lots of you. So we did trigger an impairment of goodwill left for accounting purposes noncash are impacted.
Impacted by $112 million at the earnings.
Related to that impairment, but the rationale for that.
The transaction was that we now want to grab a lot T, 100% and where we're now able to look we think.
A single order, we can analyze it maybe a lower skill operation lower capital intensity higher hopefully higher return.
Lower production, but overall I agree operation. So that's the goal. The goal is to look at that as I think our internal goal is here is to have an internal studies available with our first look at that by the end.
The end of the first half of 2020 for us.
Goes again, I think bill will leave out with build to give you the update there.
Most exciting new project is going to be a big one would be to as we go forward are still on track to bring it online first quarter 2025 year to date from a V. Two point of view, we spent 157 billion of cash and Goose capital expenditures and we started funding.
Goose working capital.
The Arctic operations.
<unk> has limited shipping season, he would make sure that we actually get the right raw materials are consumables up there that we need to derisk that operations keep our money so.
Year to date in 'twenty four we spent just over 40 million of those inventories and we are working on a plan to look at exactly what we think we need as we go through the next year. The next shipping season, so that when we break those up and running in early 'twenty five will significantly de risked it and get the materials that we think we need on site. So I think we'll come out.
But that you estimate for that when we get into the 2020 for budgeting.
Release.
Or would you go to what Luc just last couple of calls to make I did mentioned so we've had 50000 ounces from Wolfgang you to date.
We have also disclosed that we are we can see the end of the old Chicago open pit operations come in so there are there won't be retrenchment those operations in 24 completed in 25.
In the income statement there was in total a charge of $12 million in the current year related to our recognition of upcoming severance costs for the Chicago operations. Those are the main.
Charges for the severance cost you will see some other attached and stuff as we go forward, but then they'll really be because of the passage of time with amortization purposes, but those.
The initial recognition of the bell curve.
So just a couple of things I think on the income statement I think just to highlight what the main impact that we saw all of them. Good operating results was the grandma impairment of $112 million.
It does of course gets adjusted out of adjusted earnings.
And so when you look at the bottom line for the years income attributable to shareholders.
I was 43 million and net income was $43 million loss.
Or <unk> <unk> per share EPS, but if you if you adjust out the non cash items, including that kind of a lot to your impairment.
Adjusted income net income was $65 million adjusted EPS was <unk> <unk> per share.
And then just on the cash flow side.
Operating cash cash flow from operations after working capital of 110 million for the Q are approximately eight cents per share.
I mentioned that that did get impacted by a buildup of some consumables inventory items. It back reverts to the tune of $40 million and also a little bit more of a longer delay in getting some of the VAT tax receivables refunded.
Financing side nothing too significant this new to comment on all of them, we did pay dividends the normal or the rate that we haven't paid over quite a few quarters now four cents per share.
Uh huh.
And then for the year, we are for the period ended up $309 million in the bags, but since then some pretty much debt free at the end of the quarter, we did draw $50 million of her life.
In early Q4 as disclosed and we do expect that we'll be drawing on that line as we go through the significant capex buildup for it go through the next year.
And I think that really summarizes everything I wanted to comment about it.
Results of the operations.
Okay. Thanks.
Mike just maybe adult North Dakota, as we said we're going to machine. He had this open pit mining, but we do have some low grade stockpiles from him in the future we'd had some encouraging results.
Potentially.
Underground mining further we'll know more about that as we keep the keep drawing but so theres the potential to produce beyond when they open pit.
Whether it's a low grade stockpiles or whether it's liberty separate was complemented by some other go better clinical grade material. So just so people are aware of that because they'll be there for a significant amount of time.
<unk> Hunter just last few years in the future than the 200000 ounces without right now so that we'll see how that develops.
With that I'll pass it over to uphill battle.
Yeah. Thanks Clive.
I think a lot of the things I was going to talk about had been hinted at or even talked about a little bit I. Just wanted to provide some more color to some of the issues in the I'll start.
Operationally, Mike did a great job of explaining everything I think I think the key really there is to is to really highlight is that we as far as Q4, we see everything on track, we're going to have a really good quarter in particular ethical are not getting out to eat in the bottom of phase six and I know what your quota, we're going to have a big quarter as well.
So as Mike said, we're on track to beat our guidance looking at for Cola regional a little bit I, just put a little bit.
History, and playing so everyone remembers we originally had internally last year come out with a preliminary economic assessment and then doing a feasibility study, which we which we were presenting to the government when they halted us to kind of take a look at this new mining code and this new local content law, but the key thing is you need now is that study was done and it was economic.
Part of that the government actually let us start to build all the infrastructure. So the infrastructure for mining in that area is actually complete and the reason I tell you that it's a it's important to understand kind of the process. As we go forward now that they've got these these laws in place they have to create an implementation decree for both of them we were down there.
I guess it was just a couple of weeks ago talking to our team down there about the local content and how does that impact what we're doing in and basically we saw a path forward and how we were going to resolve any outstanding issues on local content and so right now what we're waiting for is that those implementation decrease to come out whether it be at the end of this year or the beginning of next year.
When we can sit down with the government and it assuming.
Assuming that those that those are all finalized we will be able to quickly submit our documentation based on the new laws and if it's still economically if you believe it will be.
Look at putting this into production, we probably need a quarter.
You know three months once once we get our licenses and our conventions in place. So what we're talking about internally is that we're talking about in the second half of the year. So if you assume kind of Q1, you do all negotiations get all your permits in place Q2, we do all of our pre stripping and finalize all of our infrastructure, we can be ready in the second half of the year to go and so that's the way we're looking at that.
But for the regional stuff.
As far as goes is concerned.
We did have we had an analyst trip up there not too long ago in an area that went very well I think.
We're very pleased with with the work that's been done up there and we continue to say that we remain on schedule for that but if you remember we always talk about kind of some key areas that had to be done the camp was done that way.
That opened up in early summer, we had to get through three major buildings up that being the mill building the workshop and the powerhouse all of those buildings are now stood up with a concrete we're busy cladding them and quite.
Quite frankly, we were three quarters of the mill has been clouded and we'll have that closed up here in the very near future. So much. So we've moved.
Installation of the of the mill ahead of schedule. So that is actually going to happen this month and the teams on site.
Cranes have been installed to help us there and so that's where and then in regards to the construction of the mill. We're ahead of schedule so really what.
It remains outstanding is and it is on the critical path is the logistics all the procurement for the 2024.
Construction season was done everything was shipped everything arrived at the M. L. A so we're sitting there with more than 3000 containers ready to be dragged up the winter road.
Winter Road construction.
Construction team is onsite now all of the equipment has been run through as far as the maintenance checks and really now we're just waiting for cold weather. So the plan really is to start in December on that work our way through the first couple of months and then start.
Parking things up the road in early February so that would give us a nice long window to the first part of me to make sure that we get everything yet.
So we really remain on track I guess, one of the questions, which has been asked a couple of times is the mine plan. The updated mine plan. We've always said that that's it's going to come out at the end of this year and certainly it will form part of our budget that we released for next year, but we don't see any issues. There that's going kind of as we had expected and kind of.
Forecasted before and then I guess, maybe the last thing I'll talk about it as grandma locked in and Mike hinted a little bit. So grandma Ot is a project that we've looked at a couple of times already but we've always looked at it with a lens that it has to be bigger than it has to be within the confines of the permit that we already had we now have.
Taken full control of this project on 100% of it and so it really allows us to take the blinders off take that take take the directional engineering off and really focus on what is the best design for this project and so we're looking at a smaller project that a single company could operate and we're really looking at consolidating some of the infrastructure.
<unk> into some of the basins altogether and that would allow us to cut down on some of the high capital costs of resettlement and some of the other issues of the infrastructure that had to be built so the plan really is to.
Start in Q1 of next year and just after the first year and to have a P E out by the middle of the year, but I caution once again Clive always says that all <unk> are not the same. The fact that matter is as we have a very good resource there of indicated material and so at the end of the day, while we will just be putting.
Just laying out the infrastructure, we can move very quickly if it was positive after that.
Okay, and anything else you'd like me to talk about.
No I think that's true.
Good uptake.
So I think that will.
Open up to two questions.
Okay.
Thank you we will now begin the analyst question and answer session to join the question queue. You May Press Star then one on your telephone keypad.
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Thank you operator.
BDO team.
Congrats on a good quarter.
Again this is despite the rainy season in West Africa.
And great to see the development of Goose is progressing well.
Actually also great to see costs coming in below guidance as much. So just a couple of questions on me from me. My first question is regarding the new mining code in Mali.
So what I'm from what I understand once the decree has been provided to.
B to B to then apply for the for the permit or the exploitation permit.
And then kind of move forward with.
Some sort of a trucking option.
Does that.
Negotiations that you're having with the with the Malian government right now does that.
You know impact how youre looking at the Standalone operation as well.
Can you provide a little bit more color on that.
Stick to that.
I'll I'll have to take it of course the base I mean everything has to be on the table now well you know certainly the new twenty-three code does apply to anything regional and quite frankly without the degree we can't really say, which which way we're going to go but we have to look at both of them within the lens of the new decree for sure.
And what I'm trying to ask Bill is is if if you do get the decree I mean, then you go do go forward with them.
Trucking option.
It's been a chance that that negotiation could continue and and then you get a better kind of understanding and better economics for the Standalone mill or is that kind of set in stone. Once you get the degree for let's say the initial start of Anaconda.
Yeah, So I think conceptually, what you're saying is right, but we just don't know at this point right.
Because it's free hasn't come out we haven't had the discussions sit down with the government I mean climate he hinted at it but when we were down there just recently talking about local content. We did meet with the minister of mines and the one thing you did say he likes what Btu does and they do want mining in the country. So you know how how that all plays itself out is yet to be seen but you.
That will all come out of the discussions after the degree I think one of the interesting thing Zero-base was the fact that bill touched on it was that even though we were really didn't get into permit because of the.
Mining audit the new code et cetera, the government encourage us to go ahead and build the infrastructure for trucking horse. So most of it infrastructure is in place ready to go. So therefore, the government was anticipating bye bye.
She has to go ahead and build infrastructure, even though we didn't have the permit to actually trouble or what's assumed from the government that they clearly want to see that happen for sure obviously, everyone knows about.
Our values.
Looking for increased revenue everyone's doing difficult times et cetera in many ways. So clearly combining the two.
80% ownership or wherever it's going to be more than that under the new code of the area.
The potential expansion area lots of core, but the potential expansion area. So difficult complex in the north are of great interest to the guy with insurers.
<unk> revenues, so they shouldn't be highly motivated.
To get a perfect yeah, there has to get mining.
It is possible. So we're encouraged by that and we'll see.
Discretion scope.
Okay sounds good. Thanks, thanks for the color and from my boat or something but I just.
Switching gears I guess to the goose that project.
You know you guys were doing a lot about exploration work drilling in the area.
When do we expect some resolves and how it kind of remains the results are looking so far.
Okay.
Yeah, I think you touched on that earlier about where we are a lot of drilling going on we're starting to get to ask the results show that we're going to have a news results, where you next week, giving you detailed updates well, what we're seeing from them about that.
As children, including some assays. So we're very encouraged by what we're seeing so far once again and replicating some of the greatest before but also looking further down pleasure to other opportunities I think you know of our view of exploration potential there and of course as I said earlier it.
To me that was understandably to show US a company trying to go try that and build that provide do not spend a lot of money on exploration it was $5 million a year.
Maybe we have over 20 million this year and even more for looking forward into next year. So you'll get a good update on that next week.
Okay. It sounds good and then and then just in terms of the drilling that you're doing I mean, you guys had when we were at that site you guys give us an update on the underground development that had already been completed is there any drilling that's going from a you know taking place from underground as well or is it just mostly surface drilling right now.
But big or Brian.
That.
The plan is set in the first half of the year the priority is actually to develop.
Towards the old.
So that's the priority and we'll continue drilling from surface as soon as we have cubbies opened up for us to drill from underground will be added there is already an underground rig onsite. So as soon as soon as we can we will.
It tastes that surface drilling with underground drilling my base.
Sounds good thanks, Mike glad that's it for me and thanks for taking my questions.
That's right.
The next question comes from Anita Soni with CIBC World markets. Please go ahead.
Hi, Good afternoon, guys I just wanted to go a little bit further in <unk>.
Options for Cold I know you touched upon it a little bit but can you just sort of reiterate what do you think.
Where do you think additional ore sources would come from should you not get your permits for satellite deposit.
Well, if we don't get the so if we don't get any approvals for the satellite deposit you would have to stay outside and inside of the men and Andy permits. So that's the Cola that's cardinal.
And that's continued develop difficult underground, but we wouldn't see any or in 'twenty four there.
Okay. So basically like I know you mentioned that you were looking at ways to mitigate the 18000 ounces that you would expect to book your own by accelerating Cardinal.
What I was just wondering if that that could extend into 2024 or not.
Absolutely.
Okay.
Alright, So you do have.
Off the case could you just quantify like what cardinal could potentially have to default.
No.
I can't really quantify it because we're right in the middle of doing that as far as our budget season. So it would be a bit premature, but I will tell you that you know we are looking at and how does cardinal fit in it are there additional ways to mine Cardinal and an advance rate while weight all of those things are on the table.
Okay.
And then I just wanted to ask about Oh in Chicago could you just tell me what the levels of the stockpiles are I don't think I have that anyway. So.
You'll be might that you'll be processing once the one the underground and the open pit Oh.
In tonnes and grade if you have them.
Yeah, I don't I don't have it in tonnes and grade.
Dennis maybe you know, but I I know I'm speaking just from memory and I'll I'll correct myself, if it's wrong, but I I know, we have more than 10 million tonnes on the stockpile and I believe with that 0.4 point, yet I think 0.4 grams.
Yes.
So it's a little bit higher.
So you'd still want.
Yeah.
Alright.
Two questions.
I was just trying to think.
On the mill did you want did you want to continue to run it at the current levels. If you want when you're processing stockpiles and.
So where we can.
But before we get to that I need to Brian.
And that's where I'm at greater different answers I think.
Anita.
There'll be close to 20 million tonnes of low grade sort of in the 0.44 to four eight gram per ton range, it's kind of a blend of low grade and base grade.
So that's kind of where it will be at the end of the mine life. So definitely you know six to seven years of Oh throughput available there to supplement with underground at the end of the open pit.
Can you talk about the Bill I think he was asking about what would be tortured yeah. So so we have we have looked at would we in fact, bringing the mill back down and the answer is we can but.
But we don't necessarily have to right now the current the current life of mine shows us continuing to operate in that kind of two and a half to 3 million tonnes per annum, and making a profit making a profit. It does require us as you heard clients indicate or Mike indicate we're gonna have to retrench all of the open pit workers and we're gonna have to bring our cost down but it is profit.
At those grades and you know that that's what the economic show for the next through 2031.
Okay and can you just remind me what the closing liability on it is.
And 10 years from now or seven years that.
So as well.
Well I guess, we recorded 12 million, but it will probably I don't have the exact number probably a little probably insulate itself up to somewhere more like $20 million was overdone.
Yeah.
And remembering that because of the open pit is closing next year. We've already started concurrent reclamation. So a lot of the waste dumps are already under reclamation right now.
Okay. All right. Thank you that's it for my questions.
It's actually.
The next question comes from Gary Mackenzie.
Canaccord Genuity. Please go ahead.
Hi, good morning, guys.
Maybe just a follow up on the coli.
The original plan before the delays on the regional perfect color to kind of be in that.
600000 ounce range next year I guess my question without the regionals or you'd be expecting production to be down up Nikola or was that expected to be growth ethical alone.
Yeah. So the answer is yes production production will have to be less but you have to make if you go back I think you really need to go back to kind of the technical studies we had.
When we put out our last technical.
<unk> Technical report it did show 24 is a down year.
So we we always projected maybe less than 600, but it will be whatever we were going to produce.
And whenever we get into regional stopped for 'twenty 'twenty four or so it will be down.
Okay. Thank you and now that you're back in the high grade can you give a sense of what sort of grades we should be expecting for Q4 ethical.
You could you could you yeah.
It's I think it's plus two grams, but Gary you could you could calculate it if you just looked at what our range was and where we're at and you can do the calculation because we're saying we're going to be kind of at the lower end of our range.
Okay fair enough. Thank you.
Yeah.
The next question comes from Don Demarco with National Bank Financial. Please go ahead.
Alright, Thank you operator, and good morning, Clive and team.
And maybe we'll start off with goose.
Bill you talked about the ice road and so the answer is going to start in early September you're waiting for it to be cold enough can you give us an idea of what specifically what kind of temperatures their sustained temperature she's looking for before you can start.
No what I can tell you is that we're looking for ice thicknesses right. So basically I think once again I hear up there you want to start out with like a meter thick advice. Then you can start dragging some of your containers up and then as you get as it continues to freeze it gets too sometimes in excess of two meters. That's when you can bring your heavier loads up.
You said September but its actually will probably start in December on the tundra, which freezes first and work our way out towards the water sources.
Okay.
So I mean, it sounds like the team is ready to go right now on site and so you just basically measuring ice thicknesses or we're kind of waiting for the green light to go ahead.
You said you're targeting early December just to clarify.
Yeah, well that's right. So basically with the tea will be put into place early December that there obviously you got to make sure.
Is that all the equipment is operating as I said, we've already done a full maintenance on it but we've got to identify right now in the process of identifying which containers are going to come up first.
Loads weights all of that stuff is happening at MLA right now so that's kind of the early stuff we're working on right now.
Hey.
And the total distance that runs about 163 kilometers did you build that over two two months 60 days I guess your target is roughly three kilometers per day.
You're you're building it from maybe three different fronts right from the Middle and then from both endpoints got it yeah.
Yeah, that's correct and in the key really is remember we're going to do the sea ice last and so that that's really where I think there's you know 20 or 30 kilometers of sea ice maybe 40, if I remember correctly, that's really the key stuff that has to freeze up picking up before we can go.
Okay great.
Maybe just shifting on to.
Our questions on for coal have been answered, but on collaborating can you share what your strategic intentions are with this with your 24% share in this I mean I see from our financials, the asics still attractive it's running around $200 an ounce.
But what are your thoughts medium or longer term with the Kona brand.
I'm just kind of shows you all have done a good job I think there was a great deal with everybody one.
Rather than employees.
For the B two types stayed almost completely in place.
Caliber has got some good type of people who've done a good job of of what they've done and they continue to look to us.
To grow there.
Section profile, so we're happy shareholders and their kids are.
Good guys or friends, who are doing a good job, we're happy that our investments and as they go forward.
What we said to the caliber guys. If you. If you are doing in whatever you're doing going forward as things go I was looking for.
Great.
Sure.
Considered of middle southern portion of our position, but we're not in there.
To do that and we're not we'll work with Devin if that were to come about we like what they're doing and we're happy to be true.
Okay.
Great well, thanks for that and good luck with the rest of the year and that's all for me.
They can't ship.
Sure.
This concludes the question and answer session I would like to turn the conference back over to Clive Johnson for any closing remarks. Please go ahead.
Okay.
Thanks, all for your participation and your good questions.
We look forward to continuing to.
To update you as I said next the next thing up in terms of those would be the.
Update on exploration of back group around that.
But some of the coastal Georgia drunk. So thanks for your attention.
This concludes today's conference call you may disconnect. Your lines. Thank you for participating and have a pleasant day.
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