Q3 2024 Wesdome Gold Mines Ltd Earnings Call
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Speaker Change: Good morning and welcome to Westdome's Goldmines conference call to discuss the company's financial and operating results for the three and nine months ended September 30th of 2024. As a reminder, this call is being recorded. Your host for today is Trish Moran, Westdome's Vice President of Investor Relations. Ms. Moran, please go ahead.
Thank you and good morning everyone. Before we get started I would like to point out that during today's call we may make forward-looking statements as defined under Canadian securities law. I ask that you view our slide presentation for cautionary language regarding forward-looking statements and the risk factors pertaining to these statements.
Please note that all figures discussed on this call are in Canadian dollars unless otherwise noted. Our press release, MD&A, and financial statements are available both on CDAR Plus and on our corporate website, westone.com.
With us on today's webcast is Anthea Bath, West Dome's President and CEO, Guy Ballou, our COO, Fernando Ragone, our Chief Financial Officer, Raj Gill, our Chief Financial Officer,
Anthea Bath: Senior Vice President, Corporate Development and Investor Relations, and Neil DeBrandt, our Director of Geology. Following management's formal remarks, we will then open the call to questions. And now over to Anthea.
Anthea Bath: Thank you, Trish. Good morning, everyone. The third quarter was a successful one, with solid quarter-over-quarter and year-over-year improvement in production, ASIC, and cash flow. I'd like to acknowledge how the team came together in aiding us to achieve these results.
Anthea Bath: Eagle River continues to be a strong contributor to the bottom and top line. The team's achievements to date are due to consistent execution to plan and rapid implementation of processes and procedures at site. There's a heightened focus on health and safety, eliminating waste, and capitalizing on efficiencies.
We expect much the same in Q4 as we build on our momentum, reinforce this culture and empower our team to make changes required to improve productivity and to reduce costs.
Anthea Bath: Kina delivered an impressive reduction in all interfanning costs compared to the second quarter and last year.
Anthea Bath: At US$1,119 per ounce, they are in the bottom quartile of the gold mining industry. At current gold prices, this supports record margins for the asset and the company overall.
Anthea Bath: Just as impressive as the financial performance in the quarter, from a health and safety perspective, our supervisory team at Kena was recognized for its efforts during a banquet organized by the State Mining Association. This achievement is also reflected in Kena's combined incident frequency rate, which remains at zero year-to-date.
Anthea Bath: The focus at TINA this year was to maintain safety standards, to reach the high-grade 129 level horizon and to execute against ramp-up plans. To date, we've checked most of these boxes.
Anthea Bath: After progressive ramp-up in the 129-level horizon since April, we're consolidating what we've learned to identify areas for improvement. The fourth quarter will emphasize closely managed operations with a focus on predictability and efficiency.
Reflecting learning today.
We are now adjusting our 2024 guidance slightly for QNAP.
Anthea Bath: As of the end of October, our internal forecast indicates production at the lower end of our initial guidance range.
Anthea Bath: to account for this, to reduce the lower end of the range by 3000 islands.
Anthea Bath: while retaining overlap with our regional targets. This adjustment supports a more deliberate approach as we refine our processes and set up for AHIPA Stronger 2025.
Anthea Bath: As an offset in reflecting art performance at EGLE today, we're increasing the upper end of EGLE River's 2024 Production Guidelines by the same amount of 3,000 ounces. On a consolidated basis, we're benefiting from the portfolio effects, as the midpoint of our Consolidated Production Guidelines remains essentially unchanged.
Anthea Bath: We're still targeting the midpoint of approximately 170,000 ounces for the full year. Furthermore, we are reaffirming our 2025 production guidance for 175,000 to 210,000 ounces.
Anthea Bath: That said, when we updated our 2024 form cost for this shift in production from Q to EGLE and certain tactical investment decisions, we determined an adjustment to cost guidance was required.
Anthea Bath: Given our focus to date at Kena has been on RASM execution and not specifically on cost control, the upside for the asset from a value perspective is tremendous. Next year we expect to allocate more attention towards the cost structure of the mine with potential to incorporate some of the recent improvements we've seen in Eagle River.
Anthea Bath: I'll be remiss not to mention our efforts on the exploration front at both assets shown in this quarter. At Eagle River, we're seeing promising results from various near-mines burned, which should support a positive update to reserves next year.
Anthea Bath: At Kena, we're also seeing significant brownstone oxide, with various zones showing extensive potential. We're looking forward to providing the market with updates on both exploration programmes in the coming weeks.
Speaker Change: Now over to Eva Luce with First Quarter Operating Review as our Chief Operating Officer. Welcome to our team.
Eva Luce: Thank you Anthea and good morning everyone. Bon matin à tous. Very excited to join the West Dome team under Anthea's leadership.
Anthea Bath: I had the immense privilege to serve in the industry over the last 30 years. I am passionate about driving changes and to deliver value.
Anthea Bath: The third quarter set another new record for consolidated quarterly gold production, with 45,109 ounces produced as Eagle River continued its outperformance against Glamis.
Anthea Bath: This was achieved while also holding the line on safety performance at both sites.
Anthea Bath: As previously disclosed, gold production at Eagle River came in at 23,688 ounces in Q3.
Taking this year-to-date production to 67,860 ounces.
Anthea Bath: An increase of 7% over the first nine months of 2023.
Anthea Bath: The increase is mainly driven by higher grades and additional time due to mining sequences.
Anthea Bath: Eagle River processed 57,984 tons, an increase of 7% versus the prior year quarter due to improved access to ore and additional stockpile speed with mill availability.
Anthea Bath: Rate at Eagle River was 13.1 grams per ton, 10% higher this quarter than in Q3 of last year.
Anthea Bath: primarily driven by stoke sequencing and a greater share of production coming from the high-grade 300 zone.
Anthea Bath: All in sustaining costs were U.S. $1,700 for the third quarter, which marks an improvement over last year and is expected to improve as ongoing operational improvements begin to bear fruit.
Anthea Bath: These improvements are two-fold and will target the numerator and the denominator of daughters per ton.
Anthea Bath: First, we aim to leverage Eagle River's existing fixed-cost structure, which offers potential efficiencies as we increase throughput.
Anthea Bath: Secondly, we are continuing to drive the first significant continuous improvement project in the site's recent history.
Anthea Bath: As we have indicated in the past, one of these strategies involves utilizing underground tons located closer to the surface and near established underground development and infrastructure.
Anthea Bath: Supported by Exploration, we will prioritize the opportunities that incrementally fill the 1,200 tons per day mill over time.
Anthea Bath: thereby compounding the benefits of the continuous improvement initiatives to drive costs lower.
Anthea Bath: Second, as part of the Renew Continuous Improvement Project, we are focusing on areas where we are confident that we will obtain material savings and productivity improvement, such as moving from contractor to an owner-operated model to help reduce development and drilling costs.
Anthea Bath: So, improving the reliability of our equipment maintenance program to increase productivity and reduce sustaining capital requirements over the life of mine.
Anthea Bath: Looking at supply chain synergies across the company to increase our buying power on key consumables and inputs, and consolidating and optimizing our surface infrastructure to improve workforce productivity.
Anthea Bath: These initiatives, integrated with technology, will help create a more safe, efficient, and productive workforce at SAI.
Anthea Bath: On the development side, the 300 zone has been advanced laterally and overall is well positioned to facilitate mining of high-grade ore at depth next year.
Anthea Bath: Eagle River is having a great year and we expect it to come in at the upper end or potentially exceed initial 2024 production guidance.
Anthea Bath: At Kena, the team have now shown consistent performance through the ramp-up of production from the Kena Deep Zone, with excellent safety results to date.
Anthea Bath: Produce Duns are in line with budget. Development is on track. Establishing areas for 2025 production.
Block models are reconciling to actual.
Anthea Bath: Compared to the corresponding period in 2023, Q3 production tripled to 21,421 ounces.
Anthea Bath: and the whole process rose 8% at a consistent 99% recovery.
Anthea Bath: Year-to-date, the Kena mine has produced 54,607 ounces of gold, an increase of 133% over the first nine months of 2023.
Anthea Bath: Q3 throughput was up 5% year over year, but down 9% to Q2 2024 due to re-sequence.
However, on average, both quarters beat budget.
Anthea Bath: Grid at Kena this quarter was slightly lower compared to Q2 due to slightly higher than expected dilution in some zones.
Anthea Bath: That said, as mining has ramped up from the 120 level in April, we have recalibrated our near-term mine plan as we now expect short-term congestion of production stokes in the final quarter of the year.
Anthea Bath: This will allow the team to continue the transition to optimal performance and set ourselves up well for 2025.
Anthea Bath: Having now established multiple mining fronts in Kenai Deep, and while successfully mining through the zone associated with shift material, we have identified opportunities to increase production rates.
Optimize stoke design parameters and enhance maintenance practices going forward.
Anthea Bath: We see this as a learning curve as we advance the operation and support the management team as we gradually improve performance.
Anthea Bath: We are also being prudent by initiating independent ground control reviews that will continue to validate and potentially refine our approach.
which
Anthea Bath: Regarding ramp development, the Kina Deep Ramp is expected to reach the 134-136 level.
Anthea Bath: in Q1 2025, with stock production expected by the end of 2025 at Preskill. RAM development also continues to advance, establishing explorations during platform for the highly prospective Preskill ore body in the short term.
Anthea Bath: In the long term, the Preskill Ramp will provide an important secondary hauling route and be used to improve on-the-ground ventilation.
Anthea Bath: The proximity of the ramp to the Presquilor body facilitates first production from the zone in late 2025, and provides a material handling route for the targeted resource.
Anthea Bath: and Reserve Edition from level 33 as the Kena mine takes first steps in our strategy to fill the mill.
Anthea Bath: Recall, the 33-level essentially released several bottlenecks underground and could eventually facilitate the 1,000-tonne-per-day or more of production from various near-surface zones to surface.
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Anthea Bath: surface zones, including Zubuissan. The final diamond drill bay on the level is expected to be completed mid-Q4 and will allow us to begin underground exploration drilling in 2025.
Speaker Change: So overall, a good quarter where our teams continue to deliver and improve, and have done so with excellent safety results. While it has only been five weeks for me at Weston, I am excited by the untapped potential I see, and the great team in place to unlock these opportunities.
Speaker Change: Gail will now provide an update on our Exploration program. Over to you, Gail.
Gail: Thank you, Guy. Good morning. I am excited to update you on our exploration programs at our Keenan Eagle River Mine.
Gail: At Kena, we drilled approximately 34,000 meters in the third quarter. As of the end of September, we have drilled about 60,000 meters at Kena, including 15,000 meters of infill drilling, 18,000 meters of gleneration drilling, and 28,000 meters on exploration.
Speaker Change: We plan to issue a press release showcasing the latest info on exploration drilling at Kena soon, but let me give you a general update.
Speaker Change: At the high grade Kena Deep football zone, the focus has been on Virginia delineation completing 14,000 in 48 drills in the Kena Deep area.
Anthea Bath: We are seeing high-grade results that contribute to the growing of our resource base and provide us with crucial data to improve our understanding of continuity and geometry.
Anthea Bath: Exploring the football zone remains a top priority for us, with its potential for growing ounces per vertical meter across future development levels.
Anthea Bath: The second zone we continue to explore is the downed lunge extension of the reached area from the 33-level drift.
Anthea Bath: Follow-up drilling is yielding promising results, highlighting the potential extension of bridge and validating geometry optimisation structure, which is typically a prerequisite of an economic zoning agreement.
Anthea Bath: A total of 40 drill levels and 9,950 metres have been completed to date.
Anthea Bath: Another exciting project for Kino was the completion of a 300-meter exploration platform on the 109 level in Lake Kiltree. This platform will allow for testing the downpip potential of the VC Zone and K109.
Anthea Bath: Diamond Roll Bay development at the end of the drift is expected to be completed in early Q4.
Anthea Bath: Turning now to our new surface draw program at UNO where year-to-date we have drawn 17,000 meters.
Anthea Bath: This summer, we conducted a surface drilling program from Barches, targeting several new surface deposits.
Anthea Bath: While we have limited time frame for barge drilling, efficient drilling allowed us to exceed our planned drill meters within the time frame permitted. This enabled the team to target additional growth and conversion targets for promising results highlighting the potential for reserve and resource growth at the Dubuisson deposit.
Anthea Bath: During the barge season, we completed 38 drill holes and 11,967 meters of drilling at the Dubuisson zone, which will focus on drilling to potentially upgrade the portion of the current infrastructure source of 140,000 ounces to the indicated category.
Anthea Bath: This draw program provided both critical data verifying the model announcements and a base for resource drove downplush off the zone.
Anthea Bath: We also completed drilling in the North-West and North-East zones and in the Duchenne zone.
Anthea Bath: The Historic North West Zone, which was discovered in 1986, is an important target due to its optimal location north of the future Pasquo Ramp and its potential to be another zone to be mined near infrastructure.
Anthea Bath: This summer we drove 5,616 meters across 21 drill holes, targeting the northeastern area of the zone. The drilling provides valuable information on the northwest zone extension potential and highlights the existence of additional mineralization to the north of the zone.
Anthea Bath: As part of this summer's glass drilling program, we completed a 10-hole limited exploration program of about 3,500 meters towards the Northeast Zone, the historical zone north of the Kena Mine.
Anthea Bath: Initial drilling completed to date in the Duchenne zone south of the 53-level infrastructure included a total of 1,880 meters, confirming the zone's potential and providing data to improve the historic interpretation of the zone.
Anthea Bath: Our exploration approach for PASCUIL incorporates targeting, upgrading of resources, the outlaws of current Maruti zones, and testing the potential of the zone and tech for resource growth.
Anthea Bath: Year-to-date, we have completed 20 holes for a total of 6,600 metres and results continue to demonstrate the potential of this new surface deposit with two in-fill drill holes showcasing BG, highlighting potential high-grade areas within the zone.
Anthea Bath: Our focus for the fourth and final quarter of 2024 will involve continuing to target keynote leads from the 127-level platform, complete the draw platform to target the DC zone, and assess geological potential of underexplored regions proximal to the DC zone.
Anthea Bath: Complete sampling, assaying, and data analysis of the surface rolling program will also remain a priority.
Anthea Bath: Another 5 holes comprising 2000m targeting the football zoning scheduled for completion in Q4, bringing the total to 53 holes totaling 16,000m in the Kena Deep Zone.
Anthea Bath: On completion of the draw platform for the VC Zone, two holes for 800 meters will be completed, with another 2,000 meters planned in the reach area.
Anthea Bath: Let's take a look at Eagle River, where our exploration approach incorporates continued assessment of extensions of known zones, delineation of zones to replace reserves, and regional surface exploration work identifying targets for long-term developments.
Anthea Bath: Year-to-date at EGLE, we completed approximately 83,000 meters of drilling, including 16,000 meters of delineation drilling, 22,000 meters of infill drilling, and about 45,000 meters of exploration drilling at the mine, and about 10,000 surface-drawn meters.
Anthea Bath: In the third quarter, we completed a total of 8,000 meters of infodrilling to enhance resource conversion efforts at four areas, the Falcon 7, 311 West, 5 and 711 Zones.
Anthea Bath: Additionally, we conducted an underground exploration drilling program totaling 7,500 meters that focused on several key areas such as the Six Central Zone, Falcon 311 Zone, and 300 Zone at Depth.
Anthea Bath: The 6th Central Zone with year-to-date 21,700 metres of drilling across 81 drills completed highlights continuous high-grade modernisation. This area holds significant potential for our future mining operations.
Anthea Bath: It is located at intermediate depth near existing underground infrastructure and offers exceptional prospects for growth and conversion. Therefore, targeting this zone remains a top priority.
Anthea Bath: At Falcon 3-11, we have completed a total of 11,800 metres across 43 drills, focusing on the avalanche potential of the zone.
Anthea Bath: Our aim is to upgrade the resource classification here and extend the zone in the uplands direction.
Anthea Bath: Additionally, in 2025, we plan to explore the downplunge extension of the zone as previous drilling results have indicated higher-grade mineralization at depth.
Anthea Bath: Our primary focus continues to be the conversion of high-grade mineral resources in the Friana zone to take it below the 1300m elevation.
Anthea Bath: This year, we have completed several drone holes, taking 27 holes of 16,000 meters.
Anthea Bath: The latest drilling results have yielded significant values, further emphasizing the continuity and quality of the zone.
Anthea Bath: Exploration Drilling Targeting the Downplus Extension of the 300 Zone is assisting us to better understand the structural geometry of the zone at this time.
Anthea Bath: The six central Falcon 311 and 300 zones are essential for exploration and infodrilling programs aimed at reserve and resource replacement. Drilling will continue in Q4 with the majority of the 2025 drilling focusing on these zones.
Anthea Bath: Our 2024 Surface Exploration Strategy includes limited drilling in the two-zone area alongside the detailed structural analysis that begins with a regional focus before narrowing down to a mine-wide scale. We have also conducted the geophysical chargeability and resistivity survey using reduced polarization.
Anthea Bath: This integration of geophysics and structural analysis will help us prioritize drilling targets cost-effectively while minimizing drilling risk.
Anthea Bath: The processing of the outbreak survey will conducted west of the Maida high-rise is expected to be completed in the fourth quarter.
Anthea Bath: Several target areas have been evaluated through the Structural Surface Mapping Program, allowing the team to identify priority drilling targets for 2025. We plan to continue detailed mapping of various areas following the end of the winter season.
Speaker Change: As press release updating, the status of the Extentive Exploration Program at Eagle Road Project is expected in the coming weeks. And now over to Fernando who will take you through the quarter's financial results.
Fernando Ragone: Thank you Neil, and good morning everyone. In the third quarter, we achieved record gold production of 45,109 ounces.
A 62% increase over Q3 2023.
Fernando Ragone: This was driven by accessing a greater proportion of high-grade zones at both of our Eagle River and Kenemai.
Fernando Ragone: On a per annum basis, this quarter all in sustaining costs were the lowest this year, as well as over the past two years at $1,408.
Fernando Ragone: as we continue to ramp up mining from the high grade.
Tina Dibson, and benefit from favorable foreign exchange rates.
Financially, we delivered strong results across the board.
Fernando Ragone: Revenue increased 111% year-over-year to $147 million, driven by both high-end production and a 33% increase in realized gold price.
Fernando Ragone: During the quarter, the company recorded a net income of $39 million, or $0.26 per share.
Fernando Ragone: A significant increase over the prior periods due to higher production and realized prices.
Fernando Ragone: For the quarter, cash generated from operation was $61 million or $0.41 per share.
35% higher than prior year.
Fernando Ragone: Impacted by the time of cash taxes during the period of 26 million.
Fernando Ragone: I would like to highlight the cash taxes during the quarter, including a catch-up payment from early in the year. Going forward, we expect to be fully taxed at about 35% effective tax rate.
Fernando Ragone: In addition, we are capturing record margins. For example, compared to Q3 2023, cash margin of 2,206 per ounce was up 168%.
The beta of 84.6 million was up 6.5 times.
Operating cash flow was up 35%.
Fernando Ragone: And free cash flow of $30.9 million was nearly triple the prior year put.
The End of the World
Fernando Ragone: Our liquidity position continues to improve as we repay the balance of our revolving credit facility earlier this year, leaving us debt-free. With the further increase in free cash flow from the third quarter, our balance sheet has continued to strengthen with a working capital increase to $70 million at the end of September from a negative $18.8 million at the start of the year.
Fernando Ragone: Essentially, we improved our net position by over 88.2 million in the first three quarters of 2024.
All supported by INCREASE IN PRECAUTIONARY MEASURES.
Fernando Ragone: At slide 10, we summarize our revised guidance for 2024 and reiterate our outlook for 2025.
Fernando Ragone: The midpoint of the consolidated 2024 guidance remains the same at 170,000 ounces. However, we are now narrowing the range to between 166,000 ounces and 176,000 ounces.
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Speaker Change: Despite production trending well and costs declining sequentially year-to-date, we're refining our 2024 guidance for consolidated per ounce cash costs and all-year sustaining costs.
Speaker Change: We note that a material component of the cost update also includes tactical investment decisions.
Speaker Change: which were not originally contemplated, such as reducing the risk to the 2025 mine plan by increasing waste development, boosting exploration spending in high potential areas, and opting out of using capital leases this year.
Fernando Ragone: which would have offset initially all in sustaining cost guidance for about $30 per ounce. We presently opted to purchase rather than pay double-digit interest rates on mobile equipment.
Fernando Ragone: In doing so, we will save nearly $1 million a year in cash interest over the life.
of the Light of Belief.
Fernando Ragone: We are well capitalized with a strong balance sheet and we will continue to look for other similar cost savings opportunities.
Fernando Ragone: Lastly, one housekeeping item, we renewed our best-served prospectus last night as a matter of process, as it was set to expire shortly in the next few months.
And now, over to Anthea to wrap things up.
Anthea Bath: Thank you Fernando. Looking beyond this quarter, Western's future looks bright underpinned by three key initiatives.
Anthea Bath: Firstly, our 4-in-1 strategy at BOSAR is an overarching critical initiative aimed at bringing near-surface deposits into production to leverage our relatively high fixed cost structure.
Anthea Bath: The Preskill Zone and QNA's TAG is the first of these opportunities.
Anthea Bath: It is a shallow zone of a planned mine infrastructure with an increased utilization level of 250 to 400 tons per day.
Anthea Bath: At this time, we believe Preskill will be followed by Dubuisson. While the strategy is expected to enhance our operational flexibility, we are committed to ensuring that we fully capture the benefits as we increase throughput, as Guy mentioned.
Anthea Bath: Secondly, we are excited about the exploration of our extensive and largely unexplored land packages.
Anthea Bath: We have an aggressive multi-year exploration program in place, as you have heard, and we are drilling for discoveries, to convert resources and to better understand and gain insight into our own bodies.
Anthea Bath: Ideology is so interesting. The more we explore, the more we are really starting to understand the potential of Eagle River in Quinet. We look forward to Fiona Lawrence joining us as our new SVP of Exploration Resources at the beginning of 2025 and getting his perspective.
Anthea Bath: Thirdly, the optimisation of our production planning through the development of a global resource model represents a significant initiative for Western.
Anthea Bath: We've begun by building and digitising the data for Eagle River over the last year. The comprehensive model looks at everything from 300 Zone to MISI to MagnaCon, providing us with valuable insights to guide future investment. We'll have more to say about the potentially game-changing initiative in 2025.
Anthea Bath: We believe these three key initiatives, the Full Mill Strategy, IGRESSIVE Exploration Program, and the development of this global resource model will have the potential to add tremendous value to Esther and to our shelters.
Anthea Bath: I want to take some time today to share how we think about wisdom.
Anthea Bath: It's simple. West Ham holds two of the highest grade gold mines, which translates to a high return on capital. They're low cost, high margin, and generate significant cash flow in one of the best jurisdictions in the world for mining.
Anthea Bath: Production will continue to grow on the back of our significant geological endowment.
Anthea Bath: With record gold prices and costs that will continue to decline, our cash flow yield is very compelling. And as we leverage our incredible ore bodies to reflect on this exploration, increase our mill and mine utilization, and become more efficient, we expect this yield will expand even further.
Anthea Bath: We are confident in Westerm's ability to continue delivering results that reward our shareholders over time. Thank you for your continued support in Westerm. With that operator, we will now hand over to you for questions.
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Speaker Change: At this time, I'd like to remind everyone, in order to ask a question, press the star and the number one on your telephone keypad.
Speaker Change: Our first question comes from the line of Ralph ProCity with 8 Capital. Your line is open.
Thanks, Operator. Good morning, everyone.
Speaker Change: Anthea, I was intrigued by your commentary at EGLE about the transition from a contractor to an owner model. Just wondering, when could we think of that transitioning as starting? And do you think there is material performance pickups and improvements that could be realized in the areas of things like dilution and development rates? And I'm just wondering if this is a, you know, sort of more of a, or is this more of a cultural change towards, say, increased operational control?
Speaker Change: Now, I mean, thanks, Ralph, and thanks for your question. I mean, it's just to answer the first one regarding the contractor conversion or looking at how we optimise our efficiency productively with our people and from a cost perspective as well. We will see that happening during 2025. There's a lot of work being done for us to implement that. So you can expect from March to September that this programme will be executed across the operation.
Speaker Change: I think if you look at the focus that we have on both operations regarding
Speaker Change: optimizations,俐 few assets? You know, your comments on understanding how we can optimize that sits, my parameters are well within the mandate of the team right now. And there's a lot of work going on to see how much more value we can add to leveraging those parameters.
Speaker Change: And I want to come back to some of the commentary around EGLE development, and specifically this sixth central zone.
Speaker Change: where certainly the advantages on infrastructure are great and the shallow depth are evident. I'm just wondering, what are the mining widths in that area and how could that impact your thinking about the sixth central zone coming into this near-term mine plan?
Thank you.
I will let Neil answer that one for you, Rob.
Neil DeBrandt: Thank you, Ralph. So in terms of Six Central Zones, we do see
Neil DeBrandt: Geological work of vein width in excess of one and a half, one to six meters.
Neil DeBrandt: So we actually, this year, with the budget process, we are seeing an increased number of reserves that we are going to plan to mine from this year.
6 Central, NewNeota.
Speaker Change: Okay, great. That's encouraging. Thanks to the team for your answers.
Thanks.
Speaker Change: Once again, if you would like to ask a question, please press the star and one on your telephone keypad. Our next question comes from the line of Don DeMarco with National Bank Financial. Your line is open.
Speaker Change: Thank you, Operator, and good morning, Anthea and team, and welcome to Guy and Jono. So first question, there's a modest revision to Kena guidance. Can you elaborate on the drivers behind this?
in Ramp Advancement or Stove Development or other factors.
Speaker Change: I think, thanks Don and Anthea as well, we continue to learn as we ramp up and we're applying these learnings to our plan Don, that's really what it is. I think the important thing here is that the block models reconcile well, which is great.
Speaker Change: But we will continue to apply the production measures or the productivity measures and drivers to maximise that value. So there's nothing that's changed, it's just we are taking a prudent approach to making sure we deliver the best value out of the ore body.
Okay.
Speaker Change: Well I guess it's encouraging that the block model is reconciled but we do see the guidance also tweak the grade down a little bit. Is that because of maybe some increased dilution or something or some other factors?
Speaker Change: It's a re-sequencing issue, Don. It's not another factor. There's nothing fundamental in that.
Okay, and then just shifting over to EGLE, I think...
Speaker Change: Guy mentioned there's a number of initiatives to further advance EGLE. Are these going to fall within normal sustaining CapEx or would you expect a growth CapEx line item for next year?
Speaker Change: But I mean, it's a really good question. I think some of it is part of everyday operations you probably can imagine so when you look at maintenance practices and those sort of things you can imagine that
Speaker Change: Typically, productivity drivers and those leaders, your pools, I would argue, very limited capital expenditure there. But there will be initiatives which could have capital implications, which will line the growth side, where you'll understand the value of that directly. So I think you can assume there'll be a combination of that coming forward. But the ones that Keith specifically mentioned are mostly aligned with operational productivity improvements.
Speaker Change: Right, okay. And he also, one of the initiatives I thought I heard him mention was to increase throughput. And I think he cited about maybe doing some development in the upper portions of the mine.
Speaker Change: But are you also considering maybe bringing the Nishi pit back online in order to increase throughput a little bit? Yes.
Speaker Change: Yeah, so all of this has been evaluated at the moment and I'm hoping in quarter one next year we can give a bit more insight here as well Don. So the global model work and the sizing of the data
Speaker Change: And your next question comes from the line of Jeremy Ho with Canaccord. Your line is open.
Jeremy Ho: Hi, Anthea and team. Thanks very much for taking my question. Mine is on Kiana.
Jeremy Ho: I just wanted to understand with the Priske wheel ramp and the shaft
Jeremy Ho: That's two paths for Oro to resurface but they're also sharing capacity with people and equipment as we discussed in the site visit last year. I'm just wondering what do you think the the max movement rate with the shaft and a ramp
Speaker Change: is from underground surface and how does that match up with the throughput of the plant once it's improved with that $25 million of CapEx you plan to spend?
Speaker Change: So they're not, that's the nice part about all of this, Jeremy, I just maybe to clarify that the Preskill-Remp
Speaker Change: is from the service, and it's separate to the underground shelf, as you know. Once you unlock the ramp, you basically unlock the material handling constraints that Kino previously would have had at depth.
Speaker Change: So now we've become fully capable to leverage the full capacity inside the moor of 2,040 tonnes a day, but probably even beyond, way beyond that. So I think what you, how you should think about this is the Briskill ramp essentially unlocks
Speaker Change: Material handling as a bottleneck. Your bottlenecks will then become something different which you'll need to unpack and review.
Okay, so it will be plant constraint going forward.
Yep, that's correct, once it's unlocked.
Speaker Change: And once again, if you would like to ask a question, please press the star and one on your telephone keypad. We'll pause for just a moment for anyone to queue.
Speaker Change: Thank you. And there are no further questions at this time. This concludes this morning's call. If you have any further questions, please contact Trish Moran at investatwestholm.com. Thank you for participating today.