i-80 Gold Q4 2023 Earnings Call Transcript

Quartr
Provided by Quartr
March 13, 2024

There are 5 speakers on the call.

Operator

Good morning. My name is Lody, and I'll be your conference operator today. At this time, I would like to welcome everyone to the IAT Gold Corp. 4th Quarter and Full Year 2023 Financial and Operating Results Conference Call. All lines have been placed on mute to prevent any background noise.

Operator

After the speakers' remarks, there will be a question and answer session. Thank you. Mr. Downey, you may begin your conference.

Speaker 1

Hi, and thank you for attending today's Q4 year end 2023 financial and operating results presentation. We on the second slide of the presentation, the people who are attending on behalf of the company are myself the CEO, Matt Gille the President and Chief Operating Officer Ryan Snow, our CFO and Matt Gollat, Executive Vice President. At the end of the presentation, we will take a few questions. We've got another commitment shortly after it ends. So we will only be taking 2 or 3, but as always, people can contact the company if they have any further questions.

Speaker 1

Slide 3 is our standard disclaimer statement. I urge everybody to read it prior to or in conjunction with this presentation today. On Slide 4, 2023, despite the challenging market conditions, was a year that we realized numerous achievements. The Ruby Hill property was consolidated through the acquisition of Paycor that secured 100% of the high grade FAD deposit. That is expected to be one of the highest grade polymetallic deposits, if not the highest grade polymetallic deposit in our portfolio once we bring it to 40 three-1 101 Resource.

Speaker 1

We completed more than 60,000 meters of drilling to increase the quality of our mineral resources and also to expand mineralization and we realized significant success in those exploration and expansion programs. We also completed nearly 4,000 meters of underground development as we continue to do the test mining program at Granite Creek. And we also secured a long term dewatering strategy that included the installation of a new deeper well to enhance our dewatering capabilities there. That will allow us to progress to develop the South Pacific zone that is expected to become the primary deposit in that at that project. We also were able to secure in the difficult market sufficient capital to advance our strategy to become the 2nd largest producer in the state of Nevada.

Speaker 1

The realization of a joint venture, we announced during the year our intention to bring in a partner to assist in the advancement of the Ruby Hill project. That was done partially to assist with our financing capabilities and also a partner who can assist when it comes to polymetallic mineralization. That partnership agreements are actively being advanced and we expect those to that partnership to be announced during the Q2 of this year. The exploration success we had at all projects was in my opinion very significant. The reconciliation in the definition drilling both at McCoy Cove and at Granite Creek has been quite exceptional.

Speaker 1

We'll be touching on that in our upcoming slides. The delineation of the expansion in the Hilltop target at Ruby Hill, that remains wide open. Result was Saw some of the best results we released as a company to date. And we also demonstrated that both the FAD deposit and the Blackjack deposits are also wide open for expansion. And we get to Ruby Hill, I'll also talk about some single hole we drilled for the expansion of gold that intersected a very significant intercept.

Speaker 1

So with that, I'm going to hand over the next few slides to our Chief Financial Officer, Brian Snow, to talk about the gold we did sell. We haven't yet declared commercial production. We are still doing additional drilling to firm up reserves. And with that, we expect to ultimately deliver our first feasibility study on Granite Creek and also the announcement of full production for that site. So with that, I'll hand it over to Ryan.

Speaker 2

Thanks, Ewan. Yesterday after market closed, the company reported our financial statements and MD and A for the 4th quarter and full year of 2023. They can be found on SEDAR, EDGAR and our website. On Slide 5 of the presentation, we provide a graph of our production and sales by quarter for the year. This production is from residual leaching activities at both Ruby Hill and Lone Tree and the oxide material on leach from Granite Creek that we have produced and sold.

Speaker 2

In addition, in the Q4, we sold 29,512 tonnes of sulfide mineralized material from Granite Creek containing approximately 7,700 ounces. Sales were 11,049 ounces for the quarter and 22,312 ounces for the year, including the sulfide mineralized material. As discussed in the Q3 update, the company saw a significant increase in gold sales in Q4 related to the sale of the sulfide material. In addition to the gold ounces sold, the company sold 31,711 tonnes of mineralized material under the ore purchase agreement in the quarter, bringing the year to date total to 54,421 tonnes of mineralized materials sold. These sales generated revenue of 6,500,000 $13,800,000 respectively.

Speaker 2

Additional highlights on slide 6 of the presentation show our revenue for the quarter of $25,800,000 bringing year to date revenue to $54,900,000 The company generated mine operating income of $2,600,000 for the 4th quarter, reducing the year to date mine operating loss to $5,100,000 The mine operating losses year to date were primarily the result of write downs of leach pad inventory at both Ruby Hill and Lone Tree totaling $9,900,000 The company reported a net loss for the quarter of $31,900,000 or $0.11 per share. When adjusted for the impact of mark to market losses on the company's convertible debt, outstanding warrants, gold prepaid and silver purchase and sale agreements, The loss was $21,500,000 or $0.07 per share. For the year, the company was in a loss position of $65,200,000 or $0.24 per share and when adjusted for the items previously mentioned reported adjusted loss for the year of $86,900,000 or $0.32 per share. During the quarter, the company continued to invest in exploration, evaluation and pre development with $8,800,000 invested bringing the total 2023 investments to $38,900,000 This investment continued to produce many great assay results, a summary of which were provided in our press release yesterday and will be touched on later in this call.

Speaker 2

Slide 7 of the presentation highlights the company's liquidity position. In 2024, the company raised sufficient capital to advance our strategy. We made the 1st, 2nd, 3rd and 4th contingent payments related to the acquisition of Ruby Hill, totaling $47,000,000 of which approximately half was cash. And we ended the year with $16,600,000 in cash, dollars 44,000,000 in restricted cash and had an inventory balance of 11,400,000 Finally, I'd like to point out that the subsequent to year end, the company completed a private placement of shares totaling approximately CAD23 1,000,000. Now I'll turn the call back over to Ewan Downey.

Speaker 1

Thank you, Ryan. So I'm going to talk a bit about what we've done as a company during 2023 and what we're looking to achieve here in 2024. I think we've seen a pretty significant increase in gold price early this year and that's starting to translate into some additional interest in the gold sector, interest that we didn't see very much in 2023 as most gold investors and gold mining companies can attest to. However, I think there's the debt of various countries, including the United States, I think underpins the value of gold. And assuming that there is going to be some reduction in the interest rate levels, I would expect that that will be a perfect storm for gold to appreciate significantly higher.

Speaker 1

So I'm looking forward to a very strong year for the gold sector, for the gold price. And with that, we should see improved interest for gold companies. So looking at Slide 8 of our presentation, Ivy Gold is a pure play gold producer focused entirely on the United States. 100% of our projects are in Nevada. Nevada is currently ranked as one of the world's most favorable mining jurisdictions and is currently ranked number 1 by the Fraser Institute.

Speaker 1

We are currently one of the largest holders of gold and silver resources in all of the United States and we're looking to transition those resources into production over the next several years to become the 2nd largest gold producer in the United States on a gold equivalent basis. We've been very successful at building a very strong management team and operations team in Nevada and that's headed by Matt Gille, who's our President and runs the Reno office for the company. Looking at some of the team on Slide 9, we've this team has very deep experience in building operating mines in Nevada and also in construction of plants, including refractory plants, which is very important for the longevity of a company in the state. On the next slide, Slide 10, why are we in Nevada only? Primarily because it is a great state for working.

Speaker 1

There's a security of land ownership, very stable government, long standing history of being able to permit and build mines almost like no other place I've ever worked. And an interesting statistic is that if Nevada were a country, it would rank amongst the world's top 5 gold producing nations. And that's significant, especially when we see some of the issues that have been happening globally with the Russia, Ukraine conflict. We've seen mines in Russia taken away from North American companies. We've recently seen issues in Panama, also in Kyrgyzstan where a mine was confiscated.

Speaker 1

So that I think it's never been more important with the kind of political turmoil we're seeing around the world to be in safe jurisdictions to develop mines and never for the U. S. Importance has it been more important to see development of operations in their own country rather than looking for metals elsewhere. Nevada is currently ranked number 1 by the Fraser Institute in terms of investment attractiveness and policy perception. And we operate on brownfield sites that are either fully permitted or essentially on their way to being fully permitted for operations.

Speaker 1

And we have 2 existing permitted and constructed processing facilities. Slide 11 is really an introduction to where we are. We're not all over Nevada, we're actually located in what I call the central the North Central District of Nevada. That's the portion, the postage stamp you see on Slide 11 within the State of Nevada that is host to the Carlin, Battle Mountain and Getchell Trends. These trends collectively represent the world's most productive gold district and the largest producer in this area is Nevada Gold Mines, which is the Barrick Newmont JV.

Speaker 1

All of their operations are shown in this picture. And if Nevada Gold Mines were a separate company from its two owners that are the largest and the 2nd largest gold producers, Nevada Gold Mines would actually be the 4th largest gold producing company in the world. And all of their production comes in this region. We've been very successful at assembling a portfolio of projects. We have 5 active project areas within this North Central District collectively now with 6,465,000 ounces of measured indicated resources, over 8,000,000 ounces of inferred gold resources and combined M and I inferred over 180,000,000 ounces of silver.

Speaker 1

In addition to that, we have demonstrated that we are or we have defined 3 very significant polymetallic deposits at Ruby Hill. Those deposits are not yet included in this resource as we are currently working now towards resource moving those 3 deposits to 40 three-1 101 resource for release to the public, probably about mid year this year. That will include the FAD, the Hilltop and the Blackjack deposits. So we do expect to see a pretty material increase in our overall resources. The projects that you see in this area are range from being down in the South, our Ruby Hill project, which is our flagship project is in the what we call the Eureka District at the south end of the Carlin Trend.

Speaker 1

McCoy Cove, immediately south of the Phoenix operation of Nevada Gold Mines is our core gold project. The Lone Tree processing facility sits right on the Interstate 80 or the I-eighty Highway and to the north of that up adjacent to the Twin Creeks operation or Twin Creeks and Turquoise Ridge operation of Nevada Gold Mines is our Granite Creek project. On the next slide, Slide 12, we show the location of our 2 processing facilities. And this is what I believe really gives us a competitive advantage is in the mining industry, one of the more difficult initiatives after you complete drilling out a successful deposit is actually getting a permit and then building your facility. So we are quite blessed to have 2 existing permitted and constructed processing facilities.

Speaker 1

The Lone Tree facility includes an autoclave. And autoclaves and roasters are extremely important in Nevada as the easier to process oxide deposits have been largely depleted or at least the higher grade oxide deposits in the states have been largely completed. And over the past couple of decades, most production at least for Nevada gold mines has transitioned to deeper sulfide or higher grade sulfide mineralization, which is most often refractory in the state of Nevada. So if you don't have the ability to process refractory mineralization, your future in the state in my opinion is very limited. And we are quite fortunate that we were able to secure the Lone Tree facility from Nevada Gold Mines about 2 years ago and are looking to implement it to becoming a core part of our growth strategy over the next several years.

Speaker 1

We are also mining significant oxide mineralization out of the Granite Creek operation and we were able to secure a sale of that material. So we reported as revenue rather than ounces sold. But we have been successful at negotiating a contract to sell those ounces and you see that in the revenue of the company for the year of 2023 with really a record quarter for sales both of our gold and oxide material occurring in the 4th quarter. Slide 13, I'll just quickly touch on our total resources. This graph shows total resources held by companies in the state of Nevada.

Speaker 1

Obviously, Nevada Gold Mines, the large producer in the state is the largest, has the most significant resource base. We currently sit number 3, but we are expecting to see significant increases in resources over the next couple of years as we continue to drill out our deposits and we bring more importantly the polymetallic mineralized deposits this year into 40three-1 101 resource. The other thing that I think really stands out in terms of our projects as shown on Slide 14 is the grades. We don't want people to forget that we do have 3 significant open pit deposits within our portfolio that in our opinion represent the next stage of growth for production for the company. These deposits are not included in our near term plans, but are going to be included in our longer term, sort of our 10 year vision for the company.

Speaker 1

The Granite Creek open pit project, which is an oxide pit, has a grade of over 1.3 grams per ton, which would make it one of the highest grade oxide projects in the United States. That, as I said, isn't being constructed in the next couple of years in our plan, but it is definitely the next project when we look at what we want to do. The underground deposits rank amongst the highest you'll find anywhere in North America. Both Cove and Granite Creek have M and I grades in excess of 10 grams per ton. We haven't released the new resource yet for Ruby Deeps, but based on the work we've done and some of the preliminary economic work we've completed, we are definitely expecting to see a significant increase in the grade of Ruby Deeps when we publish our next resource.

Speaker 1

Slide 15 is showing our longer term plan. Our plan is to sequence our 2 processing facilities. So at Lone Tree, we have the autoclave facility. The plan is to construct 3 underground operations or high grade underground gold mining operations to feed that facility. And we need those 3 facilities running in order to start the autoclave facility.

Speaker 1

Cove is, even though we have done the underground program, the first phase of the underground there is actually the 3rd that we expect to come online. It's the timing of Cove that we'll realize the timing of our plan to start Lone Tree. In advance of that, though, we are looking to potentially start up the Ruby Hill complex. Ruby Hill, we have completed the first phase of engineering work or the work that would be required to convert the plant you see in the lower image from a gold plant to a flotation base metal plant. The estimate for the capital for that project was well under $100,000,000 So a very limited capital project to construct that or to convert that facility to meet our polymetallic needs is something we are looking at potentially fast tracking as early as later in 2024 or in 2025 more likely would be the startup of the conversion of that plant.

Speaker 1

That funding of that we expect would largely come from our incoming partner once we complete all of the transactional documents that are required to instill the formal joint venture between ourselves and the 3rd party. Slide 16 is a view of the Lone Tree Mine. The Lone Tree Mine site, we are continuing to do residual leaching on the heap leach pad you see in the background. We are continuing to get gold ounces as you could see in our year end results And that is continuing into 2024 from this facility, our central core cutting facility and assay lab. We have our own operational assay lab at this site and we have the autoplay facility shown here.

Speaker 1

I will point out that only 2 companies in the United States have autoclaves, ourselves and Nevada Gold Mines. So that's what really gives us competitive advantage. And the fact as you can see here that this site is permitted, it is constructed, there's grid power as you can see roads. If we were able to permit and rebuild this site, I would expect it would be multiples of our current market cap to get a facility like this. It also contains a 1,800,000 ton a year flotation circuit.

Speaker 1

And that flotation circuit could be used for alternative types of deposits if we were able to either find 1 or secure 1 in the area. Or if we were able to develop sufficient refractory ore, we could look at using that flotation circuit as a second crushing facility and add an autoclave vessel. If we wanted to increase our refractory production coming out of this site. So there is a lot of optionality that this plant gives us to grow in the future if we continue to be successful at finding new deposits and making those large enough that we may one day consider going larger in terms of production. Granite Creek, as shown on Slide 17, is our most advanced project.

Speaker 1

Essentially, this is what we're looking to repeat almost identically at both Ruby Hill and Cove, which is putting underground declines either proximal to or within existing pits or historic mine workings. So these are already disturbed areas as you can see and makes the permitting process much smoother because these are not greenfield sites. On Slide 18, really like to highlight the location of the Granite Creek project on the image on the right. So immediately to the north, you can see at Twin Creeks is where the processing facility of Nevada Gold Mines is in this area. The Turquoise Ridge Mine occurs immediately on strike to the north of our Granite Creek Mine and is the 3rd largest gold producing mine in the United States currently.

Speaker 1

It's a very large operation. Twin Creeks and Turquoise Ridge have 40,000,000 to 50,000,000 ounces of production reserves and resources, making it what we truly term as an elephant type deposit. Our mineralization at Granite Creek is immediately on trend to the south in the same rock types and essentially the metallurgical characteristics of the mineralization is identical. The large fault structure that runs along the east edge of the intrusive complex is a controlling feature for the gold mineralization here. And our property covers approximately 6 kilometers of that stratigraphy along strike from the Turquoise Ridge operation.

Speaker 1

Slide 19 is just showing some of the success we've had over the last couple of years. The delineation of the South Pacific zone, which is shown in red to the north of the OG zone on this image has been a real success story for this property. The strike length of mineralization from what you see in the upper parts where the auto item peak zones are to what we see at the deepest extents of our drilling right now have gone from about 100 meters of true of strike length of mineralization in the upper parts of the existing mine to over 600 meters when you look at the OG and South Pacific zones at the deeper part of what we've drilled to date. The Northmost intercept that we've drilled so far intersected 6.6 meters of 15.7 grams. I was demonstrating this deposit is completely open to the north.

Speaker 1

The deepest intercepts have are in terms of true widths are our widest intercepts to date. And in the 2023 program, the deepest hole we drilled during 2023 intersected almost 20 meters of over 15 grams per tonne. We also began in the second half of the year some delineation drilling in the upper parts of the South Pacific zone from underground from some of the workings we have over in the OG zone. And this was we've only put out the initial results from this drilling. But as you can see in this image, very, very high grade mineralization, considerably higher grade on average to date than what we see in our current M and I resources.

Speaker 1

The some of the analysts did publish notes on this drilling. And as we show here, one of those notes said that the average of these intercepts was 22 grams per ton over 7.4 meters. And that is demonstrating that this zone does have really good continuity of high grade mineralization when we tighten up the drilling. And with the dewatering well that we have actually commissioned here in the Q1 of this year, we can now drop the water table to provide access to the South Pacific zone. In the lower image on the left, what we point out here is hole 2,226, our Northmost hole that hit 15.7 grams.

Speaker 1

And we interpret that that contact, the upper and lower Comas geological contact will continue north up to the very northern extents of our properties and is almost untested at these depths, all the way up to the boundary, which from hole HPC 175, that's a historic homestay coal that intersected similar mineralization to what we're seeing in the South Pacific zone, a further 400 meters to the north. And north of that, there is no drill holes into that structure all the way to the boundary, which is another mile to the north and then immediately north of that boundary is the Turquoise Ridge operation. So we see the very significant expansion potential. And on Slide 20, what we show is the conceptual mine plan we're putting together. As we do the infill drilling, we're defining what a long term mining operation would look like here.

Speaker 1

Here, we're inferring going at least to 28. And some of the drilling we did from surface, we drilled 12 of 28 holes that were planned during the year. That was a bit because of budget constraints. But we did do drilling to start expanding our mineralization there and had a very high hit ratio of high grade mineralization. The similar to what we saw from earlier drilling from surface, we do see some pinching and swelling, but every hole but 1 intersected in excess of 8 grams per ton.

Speaker 1

And I believe 10 of the 12 holes intersected higher than 10 grams per ton with intercepts up to nearly 30 grams. We also need to do some drilling around 2,218, which was drilled in 2022, where we intersected 6.4 meters of 44.4 grams and a plan to do some additional drilling there either from surface or underground to expand that and bring it into the M and I category. As you can see around and up dip, there are other intercepts of very high grade mineralization that have yet to be followed up. So we see the upside of this project as being very significant. Slide 21 is an introduction to Ruby Hill, one of Nevada's largest gold deposits when you combine the open pits to the open pit mineralization with the underground mineralization and soon the polymetallic mineralization we're looking to bring to resource.

Speaker 1

On Slide 22, we see this property as having the ultimate optionality. We have polymetallic mineralization, both CRD and Skarn proximal to the historic Archimedes pit and also to the south at FAD. There is numerous types of gold mineralization that includes refractory Carlin type that we see in Ruby Deeps, the 428 and Lower Jack deposits. We have an oxide open pit project. It's actually the largest deposit in our portfolio, which is the Mineral Point.

Speaker 1

That's a disseminated oxide gold deposit. It is part of our longer term growth plans. And we also have gold sulfide in intrusive mineralization Taiki target down to this over to the east. So what's really unique about this project is the multiple types of gold mineralization and multiple types of polymetallic mineralization essentially fit either on top of or beside each other, allowing for an operation that we envision will produce both gold and base metals, the base metal mineralization being processed on-site. Slide 23 really highlights some of these mineralized zones.

Speaker 1

The Blackjack deposit that you see underneath the pit is a Skarn, a Zinc Skarn deposit. To the south of that, we've discovered and are now delineating the East Hilltop zones and that includes the CRD and the Skarn zone. The Upper Hilltop zone is partially oxidized sulfur CRD deposit that we discovered in 2022. And the Lower Hilltop zone was a zone that's been partially delineated. It's our deepest of the CRD deposits located along the Hilltop fault.

Speaker 1

The 428 Zone is a target that's only being tested by 2 holes, one hole by I-eighty and the 428 Zone is situated between Ruby Deeps and Blackjack. That's a target that we would like to continue drilling this year to hopefully bring it into a resource because of its grade. The only hole we drilled at that target was to follow-up historic 15 gram intercept and we had 12.3 grams over 10.7 meters, which is significantly higher than the existing Ruby Deeps deposit resource grade. But the Ruby Deeps deposit has significant widths, true widths of almost 70 meters in places. The deposit is open for expansion.

Speaker 1

And in 2023, we only drilled one hole, a step out to the south to test for the extension of Ruby Deeps. And that hole successfully intersected 50.7 meters of 6.9 grams, including an intercept of 8 grams over nearly 25 meters. So there is a really good potential to continue stepping out to the south to build resources in the Ruby Deeps deposit. Slide 24 is really highlighting the polymetallic mineralization. The Skarn deposits are East Hilltop, the furthest left or furthest right, which would be the furthest to the East and the Blackjack deposits.

Speaker 1

These two deposits occur along the intrusive. The intrusive contact is shown in pink In both areas that the intrusive contact has been tested, which is at East Hilltop and Blackjack, we have seen Skarn mineralization. The south most drill hole drilled in Blackjack intersected 19.4% zinc, nearly 20 grams silver and half a gram gold over 30.4 meters. There's no drilling along that contact all the way to East Hilltop, where we just really started delineating that deposit in the second half of twenty twenty three. And the south most hole we've drilled to date into that Skarn zone intersected 9.5% zinc, 0.3% copper and over 12 grams silver over an impressive 114 meters, meaning it's completely open to the south.

Speaker 1

Within that we had 17.7 percent zinc over 36.6 meters with 0.4 copper. One thing I'd like to point out is we're really seeing elevated copper mineralization as we're drilling to the south and drilling deeper into this zone. And in future drilling, we'll be testing the potential theory that this zinc scarn could transition into a copper scarn at depth or a long strike. We'll also want an infill. The Hilltop zones, the East Hilltop CRD and the Lower Hilltop CRD zones are completely open for expansion.

Speaker 1

We do see very high green intercepts of lead zinc mineralization in these holes. It is CRD mineralization, so there is combination of lead and zinc. And some of the holes we did for definition of Upper Hilltop and final metallurgical work included intercepts as you can see in 2,354, we intersected 8.8% zinc and nearly 19% lead and over 8 ounces per ton silver with 0.6 grams gold over 32 meters. So extremely high grade mineralization in these deposits that are not yet part of our official resource, but we are looking to upgrade those. Slide 23 is our vision for a longer term growth plan.

Speaker 1

We are partially permitted now for the underground program. So we can start putting in the facilities or the surface facilities within the pit is now permitted and we're just waiting for the final permit for going ahead with the decline. That decline will provide us access to both gold, refractory gold mineralization and polymetallic mineralization in the Hilltop and Blackjack zone. So effectively, when we drift to the north, out of the north side of the pit, essentially an identical plan is what we have at Granite Creek. When you turn left, you go in the gold deposits, when you turn right, you go to the base metal deposits.

Speaker 1

These deposits are completely open for expansion. So we do expect to add significant resources in the future. In addition to that, approximately 2 kilometers to the south, as shown on Slide 26, we now own the FAD deposit. FAD is a very high grade polymetallic CRD deposit. We have done initial metallurgy that we show here on this slide where we're getting very good concentrates on mineralization, very good recoveries, very high silver with lead concentrate.

Speaker 1

And this deposit is wide open as well. Hole 28 is the furthest east hole that we've drilled to date, leaving the deposit open to the East. We intersected 25 meters of nearly 4 grams gold, 185 grams silver and combined nearly 15% lead zinc. Hole 22 is the westernmost hole we drilled intersecting 14 point 6 meters of 9 grams gold, 92 grams silver and over 13% combined lead zinc, the bulk of that being zinc mineralization. So these deposits and the success we've had attracted during 2023 significant external interest.

Speaker 1

And because of market conditions and our significant growth plans, we decided to consider a partnership and chose one that we believe will be a very accretive deal for our company. The particulars of that, as I said earlier, we expect to release in the Q2 of this year. Slide 27 is the introduction to our anchor gold project, the Cove property. When you look at I-eighty in Nevada, even though I-eighty is less than 3 years old as a company, this project Cove was part of Premier prior to the formation of IED. It was acquired more than a decade ago.

Speaker 1

So our assembly of projects in Nevada started approximately 12 years ago with the first acquisitions we did in the state. So we didn't build this portfolio in just a couple of years. It was built over more than a decade and coal was a project that we successfully took from an exploration concept to being permitted to go underground. With the acquisition of the autoclave facility, we went ahead with the first phase of underground. This program was completed in 2023.

Speaker 1

So when you look at where we spent dollars in 23, a good portion of that was in completing the 1st phase of underground here at Cove and that provides us for a platform as you see on Slide 28 to begin delineating what we believe is one of the highest grade development stage gold projects in all of North America. The Helen and CSD gap deposits have now been partially drilled from underground. The green shows the holes that have been completed and the gray lines that you see are the planned holes to continue delineation of these deposits to upgrade this deposit to as much M and I as possible for a full feasibility and final permitting to go ahead. We also did a large scale pumping test in the Q4 of 2023 that will go into the final dewatering strategy for this project. As you can see, the majority of our resources are inferred.

Speaker 1

So this program is designed primarily to upgrade to indicated. And just last week, we announced the results from 2023 are still flowing in, but you can see just below the image, the intercepts that we achieved in the last three holes that we've got assays for into this deposit as the delineation of the Helen zone continues. I'd really like to highlight the upper and main zones in each hole, the upper zone in these three holes graded between 13.825.3 grams per tonne over between 9 10 meters, close to true width because these are flat lining zones. And the main zone in these intercepts graded anywhere from 22 grams per ton 22 grams to 32.9 grams with intercept widths of between 12.8 and nearly just over 19 meters. So the reconciliation and the continuity of mineralization is definitely being demonstrated.

Speaker 1

The deposit remains open underneath the historic cove pit. So the underground platform will give us the underground exploration platform that you see there will position us where we continue to expand mineralization under the pit following the delineation program. That drilling is shown on Slide 29, where the gap, the area we call exploration potential, there are a few drill holes that were drilled historically when this open pit mineral deposit was being mined up until the early 2000s were drilled to depth and did hit similar mineralization to what we saw in the gap zone with intercepts again up to over 20 grams per ton. So we believe that there is very significant expansion potential to this deposit due to its location underneath the pit and the water in the pit. We just haven't been able to drill that area as yet, but the underground platform will provide a great place to continue expanding mineralization.

Speaker 1

We also have a deeper deposit that isn't part of our near term development plans called the 2,201 zone that is actually in a deeper rock unit than the, Karlin type mineralization we're defining that has a number of very high grade intercepts. And the previous resource we did demonstrate a grade of this zone of over 20 grams per ton and it remains open as well. So with that, we're actually at 10:45. Just quickly show our ESG strategy and the summary of the company. And we were supposed to be done by now because we have a few calls set up for today, but we'll take a quick call or 2.

Speaker 1

And then as always, feel free to call the company and get any greater detail that you'd like to see. I believe we have Justin Chan on.

Operator

Your first question comes from the line of Justin Chan from SEP Finance. Your line is open.

Speaker 3

Justin Chan. Hey guys, thanks. I was just wondering, on the terms of the on the ore selling agreement, I kind of back out roughly about 5.3 grams implied, but I'm sure there's this whole processing fee on that. I'm just trying to get a better sense of I guess how to model the either grade and or capability for the coming quarters. So maybe just to regather my question.

Speaker 3

I guess on a per ton basis, what if any guidance would you have on how to model that? Either should we assume a grade and then a payability or maybe just if you could give guidance on maybe similar dollar per ton, that would be quite helpful.

Speaker 1

I would say that the oxide mineralization that we are mining other than development ore, which would be more lower grade material. But when we're scoping that mineralization, it would be at about the resource grade as we show as our resource. It's a difficult one to answer because we sell it as whole ore and there is a charge obviously. So we don't get paid for 100% of the ounces under that arrangement. But with the party that we have that contract with, they would prefer us not to release who they are and what the terms of that are, but maybe Ryan or Matt Gilly can give a bit better clarity on that mineralization.

Speaker 4

I can jump in on there. Yes, as Ewan pointed out, we're close lipped with the terms, but I understand your question, Justin, it's very justified. We get so think of it this way, think of the grade model the grade as the resource grade as you pointed out. And then know on top of those that we are getting a recovery loss and assume that the toll milling charge, so to speak, is essentially kind of the same as that recovery loss.

Speaker 3

Okay, got it. Okay, that's really helpful. And then just in terms of, I guess maybe follow on that. Just in terms of your tonnage this year, it was a pretty good tons sold number in Q4. I'm just curious how you see this year.

Speaker 3

I know the second half here at the South Pacific zone, I guess. So for the first half and the second half, how you see tons evolving?

Speaker 4

I'll touch on that from the tons mined, the ounces mined standpoint, then hand over to Ryan. So we are continuing to ramp up. We have tough months and we have some quarters that are better than other quarters, but we're continuing to ramp up as we develop more phases. If we were giving you mined guidance throughout the year, you would see a very steady ramp up in production and you would see that essentially 1 third of our production for the year came out of the Q4 from the mined ounces standpoint. We're continuing with that trend of ramping up.

Speaker 4

And as we develop into the South Pacific, that's when you're going to see the real inflection. And that heat, the entry into the South Pacific is happening around right around the middle of Ryan, did you have anything you want to add on regards to the way that we're doing that where did that big spike come from the consumer?

Speaker 3

No, Matt, I think you covered it. Okay.

Speaker 1

Yes. And Justin, please feel free to call Matt Gilly afterwards if you have any further questions.

Speaker 3

For sure. All right. That's a good plan. I'll clear up the line. Thanks guys.

Speaker 1

Okay. So I think that was our only question we have lined up. So if anybody wants additional clarity on some of the items that were presented today, please feel free to either call the Nevada or the Canadian office and we'll be available most of the day or at least one of us should be available at all times and we can take you through any additional detail you'd like to have on the company. Thank you everybody for attending today and we look forward to talk to you again soon.

Operator

Thank you, presenters. And ladies and gentlemen, this concludes today's conference call. Thank you for participating. You may now disconnect.

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Key Takeaways

  • Acquired PayCor, consolidating 100% of the high-grade FAD deposit at Ruby Hill and completed 60,000 m of drilling plus 4,000 m of underground development to advance NI 43-101 resources.
  • Sold 11,049 ounces of gold in Q4 (7,700 oz from sulfide material) and reported Q4 revenue of $25.8 million (FY $54.9 million), Q4 mine operating income of $2.6 million and a net loss of $31.9 million ($0.11/share).
  • Secured growth capital, including $47 million in contingent payments for Ruby Hill (50% cash), ending 2023 with $16.6 million cash and $44 million restricted, plus a CAD 23.1 million private placement, and expect a JV partner announcement in Q2 2024.
  • Maintains a pure-play Nevada strategy with two existing permitted processing facilities (Lone Tree autoclave and Granite Creek oxide plant) and aims to become the second-largest gold producer in the US.
  • Achieved significant exploration hits at Granite Creek (e.g., up to 20 m @ 15.7 g/t in the South Pacific zone), high-grade Cove delineation (up to 44.4 g/t over 6.4 m) and Ruby Hill polymetallic intercepts (19.4% Zn over 30.4 m).
AI Generated. May Contain Errors.
Earnings Conference Call
i-80 Gold Q4 2023
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