Q4 2024 Centerra Gold Inc Earnings Call
And one moment, everyone, we appear to be having some technical difficulties. Please remain on the line one moment.
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Speaker Change: And apologies everyone. This is the conference operator once again, we would like to welcome you to the Sentara Gold fourth quarter 2024 conference call.
Speaker Change: And at this time I will turn that floor over to Lisa Wilkinson and once again, the vice President of Investor Relations and corporate Communications with center of Gold Ma'am you may begin.
Lisa Wilkinson: Thank you operator, and good morning, everyone welcome to send terrible fourth quarter 2024 results conference call.
Tamari: Joining me on the call today are called Tamari, President and Chief Executive Officer, Co Chairman, Chief operating Officer, and Ryan Snyder Chief Financial Officer.
Tamari: Our release yesterday details our fourth quarter 2024 results it should be read in conjunction with our MD&A and financial statements both of which can be found on SEDAR Edgar and our website.
Tamari: All figures are in U S dollars unless otherwise noted presentation slides accompanying this webcast are available on <unk> web site. Following the prepared remarks, we will open the call for questions.
Tamari: Okay.
Tamari: Before we begin I would like to caution everyone that certain statements made today may be forward looking and are subject to risks, which may cause our actual results to differ from those expressed or implied.
Tamari: Please refer to the cautionary statements included in the presentation as well as the risk factors set out in our annual information form.
Tamari: Certain measures, we will discuss our non-GAAP measures. Please refer to the description of non-GAAP measures in our news release and MD&A issued yesterday.
Speaker Change: I will now turn the call over to call Tomorrow.
Tomorrow: Thank you Lisa and good morning, everyone.
Speaker Change: In the fourth quarter, we had steady operational performance producing over 73000 ounces of gold and $12 8 million pounds of copper and we ended 2024 near the low end of our consolidated production guidance range.
Speaker Change: We generated strong free cash flow both operations in the fourth quarter, driven by robust contributions from Mount Milligan, which increased our cash balance of $625 million.
Speaker Change: It's only 24, we made meaningful progress in executing on our strategic plan to maximize the value of our assets.
Speaker Change: Since the restart of operations that are shipped in June 2023, the mine has generated over $480 million of free cash flow.
Speaker Change: Mount Milligan, our additional agreement with Royal Gold created the opportunity to assess the mine's long term potential.
Speaker Change: In September we announced the restart of operations at Thompson Creek, and a progressive ramp up but like la marking a major step in unlocking value in our U S molybdenum operations.
Speaker Change: At current metal prices, the $397 million of capital investment to restart Thompson Creek is expected to be funded largely from our cash flow from operations and Mount Milligan offices.
Speaker Change: Yesterday, we published an initial resource at goldfield of 706000 ounces of gold.
Speaker Change: After a thorough evaluation, we decided the resource size does not meet our requirements to support near term developments.
Speaker Change: We remain committed to maximizing the project's potential while exploring strategic and commercial options for goldfield.
Speaker Change: Looking ahead to 2025, we're focused on Mount Milligan, and <unk>, which are the.
Speaker Change: <unk> for our future growth.
Speaker Change: At Mount Milligan, the technical studies are progressing better than planned and we did.
Speaker Change: Sorry to move straight to completing a pre feasibility study for the mine.
Speaker Change: This upgrade together with an extensive drill program plan for this year has the objective of significantly increasing proven and probable reserves at Mt. Milligan. Once the study results are announced in the third quarter of 2025, making another key step in unlocking the full value of this asset located in the top tier mining jurisdiction.
As we look to the future of Mount Milligan, the establishment of the new mining and critical minerals Ministry.
Speaker Change: An encouraging step forward, demonstrating the province of British Columbia, its commitment to streamlining permitting and regulatory processes for critical mineral projects, including Mount Milligan.
Speaker Change: We are optimistic about <unk>, which could be a future source of gold and copper production.
Speaker Change: Property has substantial golden copper resources in a highly prospective district with significant infrastructure already in place which includes.
Speaker Change: 300 kilometer 230 kv power line, one of the longest privately owned power lines in British Columbia.
Speaker Change: A 50000 ton per day nameplate processing plant, which would require some refurbishment of equipment replacement.
Speaker Change: Significant site infrastructure camp admin facilities truck shop warehouse, and lastly, significant available capacity through a combination of in pit deposition and expansion potential at the existing TSS.
Speaker Change: Last year, we started evaluating technical concepts, an engineering tradeoff studies natural restart options that cemex.
Speaker Change: Early concepts include a combined open pit than conventional underground operation, which is expected to be less capital intensive and have better cash flow profile and the previously permitted underground block cave concept.
Speaker Change: This year in addition to an exploration campaign to further delineate the resource we are continuing to advance technical studies.
Speaker Change: Early indications show potential for a long life operation that takes advantage of our significant infrastructure already in place.
Speaker Change: We expect to provide an updated resource estimate and an accompanying update on the technical concept for <unk> in the second quarter of 2025.
Speaker Change: Finally, I'd like to provide an update on our sustainability initiatives.
Speaker Change: We remain committed to responsible mining and continue to make meaningful progress in our environmental and pruning efforts.
Speaker Change: At Mount Milligan, we are actively engaged with the government of BC as we prepare to submit an amended application in the coming months for permits and expansions related to our ongoing operations.
Speaker Change: As I mentioned earlier, we are encouraged by the provinces approach has streamlined the permitting process for critical mineral lines.
Speaker Change: Mount Milligan going forward.
Speaker Change: And actually if we successfully obtain permits for expanded infrastructure and activities and align with our 2023 EIA and optimize infrastructure.
Speaker Change: This was achieved through ongoing constructive engagement with government authorities, ensuring we continue to meet all operational requirements, while maintaining compliance with environmental and regulatory standards.
Speaker Change: With respect to our efforts on climate change, we have completed a thorough analysis of potential greenhouse gas reduction initiatives across our operations.
Speaker Change: These findings have identified key opportunities that will help shape, our long term strategy, ensuring that we pursue emission reductions in a way that is both economically and operationally viable.
Speaker Change: And with that I'll pass the call over to Paul to walk through our operational performance for the quarter.
Paul: Thanks, Paul.
Paul: On Slide 10, we show operating highlights at Mount Milligan for the quarter and the full year.
Paul: Mount Milligan produced almost 38000 ounces of payable gold and $12 8 million pounds of payable copper in the fourth quarter.
Paul: Full year 2020 for gold and copper production was over 167000 ounces 54 million pounds, respectively, which was below our guidance range due to lower grades encountered in an area of phase six and nine that are at the periphery of the ore body.
Paul: Gold and copper sales were up 4% at 15%, respectively quarter over quarter, which was anticipated due to the timing of shipments.
Paul: In 2025.
Paul: Elegant gold production is expected to be 165000 to 185000 ounces and copper production is expected to be 50 to 60 million pounds.
Paul: In the fourth quarter, all in sustaining cost on a byproduct basis were $1114 per ounce 50.
15% lower quarter over quarter, driven by a decrease in sustaining capital expenditures.
Paul: Full year, all in sustaining cost on a byproduct basis were $1078 per ounce at the low end of the guidance range.
Paul: The site wide optimization program at Mount Milligan continues to progress.
Paul: The site has reduced operating costs and we continue to see productivity improvements and a load haul cycle at the mine as.
Paul: As well as improvements in the unit processing costs.
Paul: In the full year of 2020 for milling cost at Mount Milligan were $5 33 per ton processed.
Paul: 11% lower than 2023, despite a slight decrease in throughput.
Paul: In 2025, all in sustaining cost on a byproduct basis are expected to be 1100 to $200 per ounce.
Paul: In 2024, Sentara identify our opportunity to accelerate the use of in pit mine potential asset generating waste storage.
Paul: Which has increased the available capacity in the existing tailings facility.
Paul: As a result minus operating costs are expected to improve over the life of mine and there was an increase in the state of reserves at the end of 2024.
Paul: This resulted in a one year mine life extension to 2036.
Paul: As Paul mentioned earlier, we have made the strategic decision to move directly to a pre feasibility study for the life of mine plan.
Paul: We are optimistic the mine life can be extended beyond 2036, which is currently constrained by tailings capacity.
Paul: We are evaluating options for additional tailings capacity.
Paul: Spanning the existing storage facility or constructing a second facility.
Paul: It is also expected that the pre feasibility study well incorporate an increase of annual mill throughput in the range of 10% through ball mill motor upgrades and additional downstream flow sheet improvements at a modest overall capital expenditure, which may also provide the benefit of improved overall recovery.
Paul: The pre feasibility study and associated mineral reserves estimate are expected to be announced in the third quarter of 2025.
Speaker Change: Now moving on to <unk>.
Speaker Change: On Slide 11, we show operating highlights centered suite for the quarter and the full year.
Speaker Change: Fourth quarter production was over 35000 ounces, Oxford has now completed processing the excess inventory that was accumulated in 2022 and 2023.
Speaker Change: A total of $4 4 million tonnes of ore mined in the quarter and $1 1 million tons were stacked at an average grade of <unk> 99 grams per tonne.
Speaker Change: Full year production in 2024, it was over 200000 ounces of gold, which was the midpoint of the guidance range.
Speaker Change: In 2025 gold production of Oxy is expected to be 105 to 125000 ounces driven by a return to normal production levels as flat.
Speaker Change: In the fourth quarter, all in sustaining cost on a byproduct basis were <unk> hundred $27 per ounce, which is higher compared to last quarter due to lower sales and higher royalty costs from the elevated gold prices, which also contributed to higher cash flow isn't margins.
Speaker Change: Full year 2024, all in sustaining cost on a byproduct basis were $1015 per ounce near the upper end of the guidance range.
Speaker Change: 2025, all in sustaining cost on a byproduct basis are expected to be <unk> hundred 75 to $575 per ounce.
Speaker Change: Up year over year, primarily due to a lower production profile and partially due to the impact of inflation in Turkey, which has not been fully offset by the devaluation of the lira.
Speaker Change: On slide 12 in the fourth quarter, we made great progress on the restart activities at Thompson Creek detailed engineering work for the plant refurbishment was initiated with a focus on engineering and procurement for long lead items.
Speaker Change: <unk> fleet refurbishment is on track and approximately 80% complete with most of the work on trucks Shovels Dodgers and road graders completed.
Speaker Change: By the end of 2020 for Thompson Creek at 170 people on site to.
Speaker Change: <unk> electric rope shovels and 14 trucks in operation.
Speaker Change: The project schedule and costs are on track and in line with the feasibility study targeting first production in the second half of 2020.
Speaker Change: We expect to commission the remaining haul trucks shovels and drills to achieve the planned mine production with the ramp up of the tonnes mined per month and the early part of 2025, we expect to substantially complete detailed engineering work and procurement of long lead mill equipment by the end of the third quarter 2025.
Speaker Change: Yes.
Speaker Change: I'll now pass it to Ryan to walk through our financial highlights for the quarter.
Ryan: Thanks, Paul Slide 13 details our fourth quarter financial results adjusted net earnings in the fourth quarter were $37 million or <unk> 17 per share.
In the fourth quarter sales were almost 84000 ounces of gold and $16 4 million pounds of copper.
Ryan: The average realized price was $2207 per ounce of gold and $2 88 per pound of copper, which incorporates the existing streaming arrangements at Mount Milligan.
Ryan: At the molybdenum business unit, approximately $2 9 million pounds of molybdenum was sold in the fourth quarter at the wing lock facility at an average realized price of $22 67 per event.
Ryan: Consolidated all in sustaining cost on a byproduct basis in the fourth quarter were $1296 per ounce full year 2024, all in sustaining costs were $1148 per ounce in line with the guidance range.
Ryan: Slide 14 shows our financial highlights for the quarter.
Ryan: In the fourth quarter, we generated strong free cash flow at both operations driven by robust contributions from Mount Milligan.
Ryan: Cash flow from operations on a consolidated basis for the quarter was $93 million and free cash flow was $47 million, which includes spending of $23 million on development costs for the Thompson Creek mine.
Ryan: In the fourth quarter, Mount Milligan generated $77 million in cash from operations and $65 million in free cash flow.
Ryan: In the fourth quarter, <unk> generated $52 million of cash from operations and had free cash flow of $41 million.
Ryan: The molybdenum business unit as a whole used $12 million of cash in operations and had a free cash flow deficit of $35 million this quarter, mainly related to spending on the Thompson Creek restarts.
Ryan: Returning capital to shareholders remains a key pillar in our disciplined approach to capital allocation.
Ryan: In the fourth quarter, we remained active on our share buybacks repurchasing one 8 million shares for total consideration of $12 million.
Ryan: The board also declared a quarterly dividend of seven Canadian per share in.
Ryan: In the full year 2024, we returned $88 million to shareholders, including $44 million in share buybacks and $44 million in dividend.
Ryan: A key focus for us in Tara is returning capital to shareholders and we expect to remain active on the share buybacks dependent on market conditions.
Ryan: At the end of the year, our cash balance was $625 million.
Ryan: This provides us with total liquidity of over $1 billion and positions us well to execute on our strategic plan and deliver shareholder value.
Ryan: Slide 15 shows our 2025 outlook.
Ryan: This year, we expect to produce between $270000 and 310000 ounces of gold on a consolidated basis, driven by oxy returning to normal production levels.
Ryan: Copper production is expected to be between 50 and 60 million pounds.
Ryan: 25 consolidated all in sustaining costs are expected to be 4500 to 500 per ounce up compared to last year, driven mainly by lower gold production at oxy and the impact of net inflation in Turkey.
Ryan: We remain disciplined to protect margins through our initiatives at our sites, including at Mount Milligan through the site optimization program, which will continue in 2025.
Ryan: Sustaining capital expenditures in 2025 are expected to be $97 million to $119 million non sustaining capital expenditure guidance is 140 to 160 million, mainly driven by the restart of operations at Thompson Creek.
Ryan: In 2025, we expect to rose, 13% to 15 million pounds of molybdenum and increase in volume compared to 2024, as we work to incrementally ramp up laying off to its full capacity of approximately 40 million pounds per year over the next several years as we previously announced in September.
We expect to increase volumes in 2025 will lead to landmark moving to an EBITDA positive business.
Ryan: We continued to invest in exploration this.
Ryan: This year, we expect to spend $35 million to $45 million, including $20 million to $25 million of brownfield exploration and $15 million to $20 million of Greenfield and generative exploration programs over 80.
Ryan: Percent of our exploration expenditures are expected to be expense.
Ryan: We are expecting a solid 2025 with continued strong cash flow generation at our operations, allowing us to fund the restart of Thompson Creek and continue to return capital to shareholders, while preserving our cash for strategic opportunities.
Speaker Change: I'll pass it back to Paul for some closing remarks, thanks very much Ryan looking at the 2025, we are advancing key growth catalysts at both Mount Milligan and chems.
Ryan: To expand our exploration efforts.
Speaker Change: With great progress on the PFS study at Mount Milligan and ongoing technical evaluation of Cemex, we remain focused on unlocking long term value and strengthening our asset base for the future to.
Speaker Change: Operator, we can open the call to questions. Please.
Speaker Change: Ladies and gentlemen at this time, we will begin the question and answer session.
Speaker Change: To join the question queue, you May Press Star and then one on your telephone keypad, you will hear a tone acknowledging your request.
Speaker Change: We're using a speaker phone, we do ask that you. Please pickup your handset prior to pressing the keys.
Speaker Change: To withdraw your question you May press Star two.
Speaker Change: Once again in order to join the question queue. Please press star and one we will pause a moment as callers join the queue.
Once again, if you would like to ask a question. Please press star and one.
Speaker Change: And our first question today comes from loss in Winter from Banc of America Securities. Please go ahead with your question.
Speaker Change: Operator, thank you very much and Paul Hello, Good morning, and Hello to your team.
Speaker Change: I just wanted to get an idea for your thinking around that.
Speaker Change: Growing in gold going forward.
Speaker Change: So in particular oxy.
Speaker Change: We saw reserves decline there is there an interest too.
Speaker Change: Expand the presence in Turkey in any way and then when you think about goldfield is an option that debt.
Not really there any longer.
Speaker Change: Is M&A.
Speaker Change: On the table when you think about.
Speaker Change: Thank you.
Speaker Change: Thanks for the question Lawson.
Speaker Change: Our principal focus so the straight up answers, yes, we are since Marigold Corporation, we intend to.
Speaker Change: Keep hold as our primary metal.
Speaker Change: In terms of where we look for valuations for production assets as you've seen in the market are very high right now.
Speaker Change: Our first order of priority is to unlock value within the portfolio. So we think that the best path to go continued gold exposure is through the extension of Milligan that we described but also this work we're advancing at <unk> you quite rightly pointed out we're putting goldfield on the shelf right now, but <unk> is a major area of focus and that is a very significant.
Speaker Change: Mineralized.
Speaker Change: Asset and we're looking at different ways to mind that that doesn't involve a blockade. So first and foremost our continued exploration of oil will come through the assets that we already own we are though.
Speaker Change: Always on the look out for.
Speaker Change: Assets that may that may fit our portfolio makes it our strategy you asked about Turkey. We are committed to Turkey, We think it's a great place to operate.
Should assets become available there principally in bold, we'd certainly would be interested in looking at them and I should add that we are active on three or four greenfield exploration programs in Turkey.
Speaker Change: Okay that's interesting.
Speaker Change: Also wanted to.
Speaker Change: Just kind of it kind of stay in the capital allocation theme.
Speaker Change: You guys continue to be remarkably consistent.
Speaker Change: With your buyback and both the dividend.
Speaker Change: Since those levels of capital return where sets the gold prices of $1000 higher.
Speaker Change: Is the thinking evolving any further along the lines of potential higher capital return I know I've asked you this before but the.
Speaker Change: Gold prices keeps going higher and higher and so.
Speaker Change: At some point is there is there a need to maybe rethink that little dividend or maybe get more aggressive on the buyback.
While we are committed to the buyback we think that our shares are cheap and we think they are a great investment first and foremost.
Speaker Change: What we're doing right now and this is a discussion we've been having over the last little while on that capital allocation point, we think that we have some credible projects potentially on the horizon here at Milligan and chems. So our preference is to.
Speaker Change: Allocate capital to the gold growth point to your earlier question, while maintaining our current levels of dividend and buyback. So to answer your question, our preference on incremental investments or capital allocation. Our preference is to put those to work in gold assets.
Speaker Change: Principally the organic opportunities, but also potentially in M&A.
Speaker Change: And then just a final question, which.
Speaker Change: Often talk about is the potential to materially increase gold recoveries at Mount Milligan.
Speaker Change: It is kind of the the.
Speaker Change: The target now is that has that evolved in any way.
Speaker Change: Essentially higher than you had thought last quarter.
Speaker Change: Or even a year ago at this time and what is now the timeline on getting to a point, where those gold recoveries are materially improved versus the 2024 level.
Speaker Change: Yes, that's a great question loss in minutes and it's a very key area of focus for us internally. So the first thing I want to say is Q4 was lower recoveries, both in copper and gold and the primary reason why.
Speaker Change: You have to go back to the low end that we negotiated with Royal Gold. What's happened is we're re sequencing overall and in periods of time like in Q4, just open up to get more into storage down. The track. We opened up an area that there was a little bit periphery of the ore body and then what happened was nears.
Speaker Change: Surface the oxidation, partially how we were able to still put it through the plant was a little higher than expected and there was some faulting that so that we didn't have mapped as well.
Speaker Change: So that's why Q4 was somewhat lower but on the positive side. It is because we're expanding and we're looking at this as a 20 year 30 year mine life.
Speaker Change: Short term.
Speaker Change: And to really answer your question when we expect it to get better well, we are better than we were in Q4.
Speaker Change: And we I think in terms of numbers in between I would say mid sixties should be.
Speaker Change: Good target, we're looking at ways that we can recover better both with yellow M work that we're doing and in the short term with better understanding of the genome that model and doing some better blending because there are some mineralogical changes throughout the ore body that we're getting better at understanding.
Speaker Change: Okay I look forward to deluxe models evolve. Thank you Paul and thank you both gentlemen.
Speaker Change: Thanks, Paul.
Speaker Change: Our next question comes from Jeremy <unk> from Canaccord Genuity. Please go ahead with your question.
Jeremy: Hey, Paul and team Thanks for taking my question.
Jeremy: Realizing its difficult to anticipate what's going to happen over the next four years could you comment on the potential impact of tariffs on elegant.
Jeremy: Milligan costs.
Hey.
Jeremy: Plans that may be put in place too.
Jeremy: So alleviate those.
Jeremy: Thank you.
Speaker Change: Yes, thanks for that we're we're not terribly worried about that.
Speaker Change: The tariff situation, we've done the internal assessment and we don't think we're really exposed but there may be some details and Ryan you may want to talk about yes. We've looked at this share we've looked at our operating sites.
Ryan: Global scale, we think we're generally not going to be too adversely impacted so 95% of mill against costs are from Canadian suppliers.
Ryan: We know what's going to happen with supplier to supplier arrangements and how those cost pass through but our supplier base is largely Canadian and so we don't see even in a tariff world or a retaliatory tariff world a big change the Milligan cost base I think we're still hammering away at the EM plus program to try to drive costs down, which offsets any cost creep that may.
Ryan: So we feel pretty good about cost and then all the Milligan concentrated sold into Asia.
Ryan: Those into the U S. So there shouldnt be any noise there.
Ryan: Hopefully that answers your question Jim.
Ryan: It does thank you very much and I'll step back in the queue.
Speaker Change: Our next question comes from Anita Soni from CIBC. Please go ahead with your question.
Anita Soni: Hi, Good morning, Paul and team. Thanks for taking my question I, just wanted to ask about the reserve and resource update.
Speaker Change: The green.
Speaker Change: No.
Speaker Change: Just wondering.
Speaker Change: But can you just give me a little bit.
Speaker Change: Uh huh.
Speaker Change: Yeah. So Paul the question was what an EW youre a little bit faint there, but I think your question was what drove the great increase in the reserve at Milligan is that correct.
Speaker Change: Yeah, that's correct.
Speaker Change: Yeah, it's primarily domain ing of where the mineralization is occurring and we're actually still working on that.
Speaker Change: You do get what's called soft boundaries on the domains and then where do you actually draw that boundary and we re modeled based on the drilling from 2023.
Speaker Change: And fundamentally we tightened up the domain, so that lowers the amount of war and increases the amount of waste and increase the debris and we're still working with where that balances as we worked through the ore body.
Speaker Change: Okay I'm just wondering if you guys did that have any impact on the near term.
Production profile that we should be aware.
Speaker Change: Yes, so that's actually one of the reasons why.
Speaker Change: We didn't quite get the production that we had expected at Mount Milligan is because we did get more tons and.
Speaker Change: And lower grade overall, so we're looking at readjusting that factor it won't affect the overall metal and it won't affect the strip ratio, it's really fairly minor difference, but that's the that's the work on the grade and it does vary throughout the ore body as well so we're continuing to understand that better.
Speaker Change: Okay, I guess I'm not could you maybe I'm a little bit confused now.
Speaker Change: So originally we were talking about higher grades and sort of losing some of the waste in the or I'm, sorry, some of the waste and the lower the more marginal ore, but now like was it. The fact that you were in Q4 with presenting.
Speaker Change: Problems Okay.
Speaker Change: Yes.
Speaker Change: What I should do with my model at this stage.
Speaker Change: Okay. So the new model update as higher grade because you lowered the amount of tons and you've tightened up where the mineralization of court occurs in the domains and then when you go ahead and mine. It you expect to get those grades what's happening in some areas, including phase six and nine.
Speaker Change: Mine It and then you actually have more ore than you thought but at a lower grade. So in essence, the mineralization is spread out over a wider area.
Speaker Change: And so that balance is what we're working through on the reserves estimate.
Speaker Change: The grade is higher because of that.
Speaker Change: Mount of ore is slightly less.
Speaker Change: So it's a balance between how much where you have and how much waste you have.
Speaker Change: Okay got it.
Speaker Change: Did you can you tell me what kind of statistical modeling that was for was it but the <unk> 83.
Speaker Change: <unk>.
Speaker Change: No we use ordinary creating and we used a soft boundaries.
Speaker Change: So the key focus though is the mineralization domains.
Speaker Change: Okay.
Speaker Change: Alright, thank you.
Speaker Change: And once again, if you would like to ask a question. Please press star and then one to withdraw your questions you May press Star and to our next question comes from Brian Macarthur from Raymond James. Please go ahead with your question.
Brian Macarthur: Good morning, and thank you for taking my question I apologize I was cut off if this has been answered but I have two questions. Just first of all on goldfields. So what.
Brian Macarthur: What is the strategy now obviously resources narrow and it's not near term development does that mean youre willing to sell it.
Brian Macarthur: Or does it just mean, there's can be some more work or it's just going to be kind of like chemists, what's for year year, just put it in the Q and hold on for a while.
Brian Macarthur: I think it's more of the latter there. So we have three objectives in the year. One was to see if we can get run of mine recoveries that was a check to see route segment was so you can get lower capex that was a check and the third was to see if we can grow the resource and we didn't do it at least it didn't meet our thresholds for continuing to advance the projects. So it is going on the shelf right now.
Brian Macarthur: You'll have seen that reflected in the impairment we took on the asset.
Brian Macarthur: You also asked in there is it open to a sale or a JV or something absolutely. Yes. So what were the phase. We're in right now with goldfield is more strategic or commercial rather than technical.
Brian Macarthur: Sure.
Brian Macarthur: I will say, there's gold in the ground there.
Brian Macarthur: Isn't yet meet our thresholds for amount, but we arent going to be doing a lot of drilling there. So the focus is more strategic.
Brian Macarthur: Great. Thanks, that's very clear and just on another strategic issue.
Any update or comments on potentially partner on the molybdenum operations I mean with what's going on.
U S assets may become more strategic going forward is there any comment you can make on that.
Brian Macarthur: Well I'll say that we notwithstanding the fact that most people don't seem to like it we love our molybdenum business, we view it as a high return high NPV relatively low risk project and the metal that is in fact strategic particularly when you look at more macro.
Brian Macarthur: Political situations in the United States, So we really like the business.
Brian Macarthur: We are open to.
Brian Macarthur: Some sort of strategic outcome, there, but it would have to it would have to meet our minimum requirements on valuation and there's always interest in the assets, particularly now that we are moving forward with the project, but I'll just reiterate we do like it notwithstanding fact that its kind of out of favor with some.
Brian Macarthur: Some more general market sentiment as it relates to since era, we do like the business.
Brian Macarthur: Okay.
Brian Macarthur: Okay.
Brian Macarthur: Okay and just my final question just on <unk>.
Brian Macarthur: Mentioned earlier, obviously the reserve life, there is not that long.
Brian Macarthur: Is there a lot of potential there.
Brian Macarthur: Extend that.
Again, I sort of with all the stockpiling of inventory.
Brian Macarthur: Inventory of sort of the mine plans sort of lost a little bit of where we are on everything so it's sort of four or five years that sort of a 100000 ounces now I think but is there anything.
Brian Macarthur: Possible to go beyond that.
Brian Macarthur: Hi.
Brian Macarthur: I wouldn't I wouldn't guide you towards any significant exploration potential to suit. However, we need to understand just how much Gould isn't those heaps and there may be some potential for.
Brian Macarthur: A period of residual leaching, our exploration efforts in Turkey, our focus as I said earlier at Greenfield sites targets and we do see some.
Brian Macarthur: Certainly Turkey is extremely attractive geology, and we're trying to take advantage of that.
Brian Macarthur: More through our Greenfields program, rather than a brownfield expansion at <unk>.
Brian Macarthur: <unk>.
Speaker Change: Great. Thanks, very much for answering my questions Paul.
Brian Macarthur: Thank you.
Speaker Change: And our next question comes from Mike Parkin from National Bank. Please go ahead with your question.
Mike Parkin: Thanks, guys for taking my question I'll start with oxo.
Speaker Change: Given the fact, we're sitting at almost $3000 gold.
Mike Parkin: Is there an opportunity there is always kind of a bit of a.
Speaker Change: Perfect balance on the economics on it.
Speaker Change: With the amount of chemicals, you are putting on it but.
Speaker Change: But at an elevated gold price environment like we're at is there a potential but kind of shock the pad.
Speaker Change: But temporarily pull additional ounces out by putting in.
Speaker Change: For instance, like a higher cyanide nation com.
Speaker Change: At Centralia, and where you might get.
Speaker Change: Very short term kind of boosted recoveries that would normally.
Speaker Change: Not be economic but in this gold price environment, they would probably be to drive some of that potential.
Not expected to be recovered gold at your standard base case operating metrics, but at elevated one you would get some additional ounces.
Speaker Change: Okay.
Speaker Change: Yeah, that's actually a great question and we look at that all the time as well as cutoff grades both at Oxford and elsewhere just due to the.
Speaker Change: The run up on the gold price.
Speaker Change: The sensitivity to the concentration of the cyanide and then the recovery is not all that high so you might get a small amount of gain.
Speaker Change: But we don't really look at that because when you do the column tests theres not a whole lot of SSAT to the to the concentration of the cyanide.
Speaker Change: With respect to recovery.
Speaker Change: What about waste.
Speaker Change: Classified at a lower yield.
Speaker Change: Gold price is their ability to potentially reclassify some waste materials or now.
Speaker Change: Not at <unk> no.
Speaker Change: Future you may look at cut off grades but.
Speaker Change: Really at the end of the day the way <unk> the mineralogy is put together.
Speaker Change: Youre not really looking at lower grade a whole lot of lower grade going into the waste dump.
Speaker Change: Yes, so Mike it's not like Nevada, where you have mineralized waste dumps that you could release here its really its not quite that simple, but its either or waste.
Speaker Change: It's much more delineated and I'd say it would be in Nevada.
Speaker Change: Okay, and then I apologize I joined the call a little late so you've got a interesting slide on premise.
Speaker Change: Just from a cross section that looks like the cross section on slide eight isn't really going through.
Speaker Change: The planned 23 year in pit.
Speaker Change: Limit so am I correct that if you move that to the I assume that's northwest.
Speaker Change: Line AA you'd actually see deep.
Speaker Change: <unk> pits pulling in more of that mineralization that we're seeing in the cross section.
Speaker Change: So, let's just take a step backward here on <unk>. So the concept that sentara had.
For a block cave and that's the rate of that cross section on that page.
Speaker Change: Well, we've done over the last six to eight months as we've re looked at all the drill data and we've recreated a site wide resource model to see where else there might be mineralization on the property.
Speaker Change: And what we've concluded and I think the slide illustrates that is that we are no longer focused on the blockade which is over on the right there, but rather on a whole string of near surface mineralization.
Speaker Change: Way from what was formerly the underground concept and by the way away from the old North Gate pit.
Speaker Change: And.
Speaker Change: So to your question that's exactly what we're doing is we're doing a bunch of infill drilling there to see if we can connect those various.
Speaker Change: Open pit deposits the area, we call the saddle there the central area and can we get to a fairly low strip.
Speaker Change: Reasonably.
Reasonably accessible set of open pit Bull resources. So our focus right now is is drilling.
Speaker Change: And technical studies looking at potential concepts, there and as I said in my prepared remarks, I want to put out.
Speaker Change: Our resource here.
Speaker Change: The early part of the year with.
Speaker Change: A description of our what we might look at.
Speaker Change: There's a lot of mineralization or <unk>, it's a very significant mineralized system.
Speaker Change: And the property that we control is quite large.
Speaker Change: That might be dating myself, but I remember calibrate north gate with camera sales and that being a bit of a cash cow of the asset for them.
Speaker Change: Where does that would that be on that slide are further off to the left no.
Speaker Change: This these deposits are north and west of the old North Gate pit.
There is some like eight or nine or 10 kilometers away and so.
Speaker Change: I'm getting ahead of myself here, but what we would look at is how would we transport material from these new deposits should they prove up over towards the old pit and the old facilities.
Speaker Change: We really like about <unk>. If you were to build a 50000 ton a day concentrate or in that part of BC today you'd be looking at a two to three maybe higher $1 billion project, what we have and I've said. This in my prepared remarks, we have a power line probably the longest privately owned <unk>. We have an airstrip we have or can we have the <unk>.
Speaker Change: Process plant.
Speaker Change: And.
Speaker Change: That is really valuable that infrastructure is really valuable and the combination of our re look at the site wide resource model and of course higher commodity prices have given us a degree of optimism in looking at these deposits, which are not near the old North gate.
Speaker Change: On the property, but they're not particularly close to the old pit.
Speaker Change: Okay.
Speaker Change: Interesting I'll look forward to the update.
Speaker Change: Thanks, Mike.
Speaker Change: Yeah.
Speaker Change: And ladies and gentlemen, with that we will be concluding today's question and answer session as well as today's conference call. You may now disconnect. Your lines. Thank you for participating and have a pleasant day.
Speaker Change: [music].
Speaker Change: Yes.
Speaker Change: Yeah.
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Speaker Change: Yeah.
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