Contango Silver & Gold Inc. (CTGO) Earnings Call Transcript & Summary

Good. Just because people are settling in fairly quickly, I'm going to go ahead and get started, and I'll say good afternoon, good evening, depending on where in the world you're tuning in from. Looks like a North American and European audience today, so I appreciate you joining us very much. I'm excited to be joined by Contango ORE's President and CEO, Rick Van Nieuwenhuyse for both an update on Manh Choh and also the upcoming work at Johnson Tract. But before I leave it to Rick, I've got just a bit of housekeeping to do. So bear with me for just a couple more seconds. Today's event is being recorded, and the recording will be available early tomorrow morning. It won't be available this evening. [Operator Instructions] That's enough out of me. I'll leave it to Rick for our presentation.

Perfect. Thanks, Romeo, and good afternoon, everyone. Yes, today, I want to update you on our first batch gold production and then talk about our drilling that's underway at Johnson Tract. I was out there last week, so I want to give you sort of an update from the field, if you will. So forward-looking statement. You guys know this well. So [ we did ] our first production up from the Manh Choh mine, it's a great milestone to achieve. Meanwhile, we want to move our other projects forward, Johnson Tract. We're out there drilling now. Lucky Shot is on care maintenance right now, but we're working on getting a plan together for next year to get back drilling on that project and continue to advance both these projects and do the same thing we've done with Manh Choh, do a direct shipping ore-type of approach where we're not building a mill and a tailings facility and a power plant for all that. Obviously, that [indiscernible] our model of reducing our environmental footprint, reduces our capital outlay and gets things into production quicker, with a good return for our shareholders. So just a location map just to talk about our Manh Choh project located in Central Alaska over towards the Yukon border where production is now underway, and then I'll talk about the Johnson Tract project, which is located in South Central Alaska on the west side of Cook Inlet, kind of just opposite Anchorage. If you look south, southwest on Anchorage, you're looking right towards Johnson Tract. So first batch production statistics. It's been a very good -- July was a really good month for us. We started the gold pour. They started batch processing, I think, ore through the mill on the 3rd or so. They process 210,000 tons, average grade 0.276, which is 9.46 grams per tonne. The average grade of the deposit is 8 grams per tonne. That's a gold equivalent grade. So we're a little bit -- 18% better than the average grade was processed in that first batch. Really good news on the recovery. The recoveries were 95.2%. The feasibility study had our recovery at 90%, so it's good to get basically 5% extra gold. That's a good thing. What was produced on-site, we produced a doré bar on-site -- or, I should say, Fort Knox produces a doré bar on-site. There were 49,000 ounces of gold contained in the doré and about 11,000 ounces of silver, and then there's another 6,000 ounces that are sort of held in inventory, if you will. They're still -- they're on the carbon, on the activated carbon, and they'll get processed probably in the next batch when we do that in September. Now in terms of -- that's on a 100% basis. So on our 30% share, as a 30% shareholder of the Peak Gold joint venture, our production, our allocated production is 14,700 ounces of gold, 3,218 ounces of silver. Now out of that, we delivered, into our hedge, gold to the tune of about 8,900 ounces at an average price of $2,025, and then we sold spot gold -- or sold about 5,800 ounces of gold at the spot value. And that's -- it obviously moves around a little bit, but our average price realized was $2,440. So when you blend those 2 out, the 8,900 ounces and the 5,800 ounces [ had to do ] different gold prices realized, that averaged out to $2,188. And of course, the spot price as shown there is plus $2,440. We also sold 3,000 ounces of silver at an average price of $27.58. So that meant for total gold sales, gold and silver sales, of just over $32 million. Of that 6,000 ounces, that's in inventory on the carbon. That's about 18,000 -- sorry, 1,800 ounces to our benefit. Now we're also giving guidance that we're going to have 2 more batches this year. We're shooting for sort of September, end of batch before the end of the year. And so our total gold production should be somewhere between 30,000 and 40,000 ounces, probably in the neighborhood of 35,000 ounces, is what we're targeting. And that's pretty much in line with a half a year's worth of production. Remember if you go back to the feasibility study, we had an average of 67,500 ounces produced in a year. We started production on schedule early in Q3, and so it's roughly half of a year's worth of production. If we do a little better than that, that would be great. We certainly go up the gold price of $2,500. Actually, we finalized some of our gold sales to date, and we did put some of those gold sales at about $2,500, so that should creep our blended realized price of gold sales up a little bit. So if I go back to the economics that were in the feasibility study, this table came out of that, our all-in sustaining cost of $1,116 per ounce. We don't have cost yet for the processing end of the thing of the gold core or gold processing. We'll get that in Q3 when Kinross reports. So we'll probably be reporting on that probably in October, November time frame, but we think we're on track. Our mining costs are on budget, our transportation costs are on budget, admin cost at the mine site, we're on budget there. So we'll get finalized numbers on the processing into things, but I think I feel reasonably confident that we're going to be plus or minus in that $1,100 to $1,200 range there for our all-in sustaining costs. So that's giving us our blended price, certainly giving us a good $1,000 plus margin on our gold sales. So -- and I want to talk a little bit about the hedging. We've had a number of questions on the hedging, and when our financials for Q2 came out, we had people concerned that we'd lost money on selling gold. And the financials are for Q2, and we hadn't sold any gold at that point, so I want to make -- I'll spend the next slide here just talking a bit about that. But we didn't -- we hedged -- it's 40% of our total gold, anticipated gold production based on the feasibility study reserves, and those -- that represents 60% of the next 2 years of production, so just to kind of frame it there. Obviously, we put the hedges in place to appease the bankers when we borrowed $60 million from ING and Macquarie. One of the conditions was is that we get a guaranteed lock-in price of our gold sales, and so we -- that's why we put the hedges in place. And the other alternative was to go and raise $70 million, which as I think everybody can appreciate in these challenging gold markets for equities, that would have been a very, very tough job and no doubt, very, very dilutive for shareholders, so -- which is why we chose the debt path. But debt doesn't come below $60 million without a few strings attached, and the hedges represent those strings. So if I look at our Q2 financials, I'll draw your attention to just a few numbers here and the highlighted yellow highlights, derivative -- the derivative in the liabilities section there, the derivative contract liability. So that $17 million number, [ $17.8 million ], that refers to the hedges that are in place, that are current, so current being this year, and that's a derivative value. So you take your hedge book -- and I won't try to explain how this is calculated. If you want to know how that's calculated, I'll refer you to our CFO, Mike Clark, who's actually on vacation. He's [indiscernible]. But it is -- it's a calculation that basically looks at sort of the optionality of the value, option value, of those hedges. And then clearly, there's a short term, meaning this year and then a longer term, the noncurrent liabilities, is a bigger number because that represents the balance of the hedge positions for 2025 and 2026. So -- but those numbers are -- they're a calculation. They're not realized. We haven't lost $18 million this year. They're just something you have to gear on your books as a potential liability, particularly if you don't deliver into those hedges. The other number is on our statements, our income statement, and that's the unrealized loss on the derivative contracts. So on a quarterly basis as you're delivering into these things, you have another potential loss is if -- when the gold price is -- the spot price is higher than your contract price of delivery, there's a delta there, and so you have to report that. Now it's -- there's a level of -- that's why they call it unrealized because it doesn't actually happen. We don't actually lose $12 million. We just didn't make the $12 million on those sales because the gold price is $2,400, not $2,025. So we realized a price of $2,025 on the ounces that were delivered in the hedge. We didn't realize a higher price because we committed we'd enter into a contract to deliver the gold at $2,025. Now just keep in mind when we put these in place, the gold price was, I don't know, $1,750 -- in that $1,750, $1,800 neighborhood. So when we're putting price, the gold price was significantly lower. But it's not a bad thing that the gold price is higher, because obviously, we're making more money than anticipated in the feasibility study and more prices -- or higher prices than were realized by the hedge price 2 years ago. That's sort of a geologist's explanation of how the hedge book works. Happy to answer more questions on it, and maybe Romeo, just ask if there are any more specific questions in the chat room that you can direct before we switch gears and talk about Johnson Tract.

Yes, fair. So there are 2 questions right now related directly to hedging. I think you've covered it, but it's probably good just to reiterate, just in case anybody else has these questions. So the 2 are -- one from [ Tony ]. How does price hedging work on the Manh Choh balance sheet? And then [ TB ] asks how many ounces have to be sold at the hedge price.

So I'll do in reverse order there. So the commitment is here on this slide, the 124,600 ounces of gold are sold forward at the $2,025 gold price. Now we obviously delivered the first batch here. The 8,900 ounces were delivered. So it's 124,000 minus the 8,900. So each batch that we produce a portion of the gold, roughly 60% of the gold will be hedged at the $2,025 price, and the balance of the shares, in this case was 5,800, were sold at the spot. So that's why we end up with what we call that blended price on a weighted basis between what's sold in the hedge and what's sold at spot. So again, that hedges -- if the gold price goes up on you, it's not a bad thing. Obviously, we wish we would have not had the hedges and made $400 more on ounce, but we would have -- the only way we would have been able to do that was to raise another $60 million of equity 2 or 3 years ago, and that was a bridge too far back then. So you put the hedges in place to protect your downside. And so if gold had gone the other way, we just played out that scenario, let's say gold went down to $1,500, we'd be laughing about delivering -- going and buying gold in the market for $1,500 and realizing a $2,025 price, but then we have to sell the rest of our gold at $1,500. So that would -- that's a worst scenario, right? So by protecting our downside with those hedges at $2,025 -- we've protected the downside, obviously, that limits the amount of upside you have by the amount that you've hedged, but you're still making money. Again, our all-in sustaining costs, we think we're on track to deliver into those, plus or minus, and we'll be reporting on those when we report our Q3 financials in November.

Perfect. So if there are any other questions about hedges, please do pose them. I will get to them at the end, but I'll let Rick continue with this presentation for now.

Yes. Thanks, Romeo. So I was at our Johnson Tract last week. It was a good visit. I've been out there many times before, but this is the first time as Contango and as the owner of the property. I've been a -- I guess I've been a [indiscernible] before. And again, this property, Johnson Tract fits our DSO approach. It's right next to the water. We're about 10 miles from coastal Alaska. It's on land owned by CIRI, Cook Inlet Region, Inc., Alaska Native tribe's private land. They have a right of way to the coast. It's good grade, and it's a simple, very nice orebody. It averages 40 meters wide. We're going to come in with -- as you'll see in the next few slides here, we're going to come in with an incline at it that will tap into the bottom of the deposit, so you're mining up with the 40-meter widths. You're doing relatively cheap underground bulk-type mining. So I think our mining costs are going to be very, very competitive for this project. Just a number of pictures out there. The camp is in really good shape. Their crew is really motivated. It's a great crew. They've been out here a number of years, and they got it dialed in. So we're drilling, we're logging core. And we'll be -- actually, we just had our first shipment of pulps go out to date, and -- it's just -- everything is just working as planned and on schedule. So safety is a key part of running any operation. We've got all of our policies and procedures in place and the emergency response plan. Obviously, it's a remote location still. You can just -- you can fly in there with a fixed-wing or helicopter. But we've got a good plan in the event that something does happen. Hopefully nothing does. Camp opened on July 11. We moved the helicopter in on the 19th and the barge in there, got everything mobilized, the drills up on-site and started drilling on the 26th. We're averaging about 22 people in camp. It goes up to about 30 or so. We've got capacity, I think, for about 70. So it's a good, solid camp. We'll probably go to early October with the program. A couple of other things that we're working on besides the drill program, which I'll get into in just a sec. We've engaged a group to do a preliminary economic assessment for us. We think we've got enough data to put our arms around getting a sort of a scoping-level document to say that this project really does add a lot of value for the company. Our 404 permit with the Corp of Engineers, COEs, Corp of Engineers. That's -- [indiscernible] the agency for what are typically called a wetlands permit. That's the 404 permit. We've been working on that. We expect that to happen. I think we've been guiding by the end of the year. I think we'll actually get it by the end of the quarter here. So I think that's looking pretty strong. We signed a Memorandum of Understanding with the Alaska Department of Natural Resources. It's the office of project management and permitting. So that will be the group state permitting agency for permitting the underground at our incline that will access the orebody. So that work is underway. Obviously, the drill program that's underway is -- it's kind of 2 major aspects to it. One is just straightforward infill drilling, and the other is to collect a lot of hydrology data, rock quality data, RQD and geotechnical analysis. We're doing oriented core, and then a whole host of other environmental studies, fish habitat, metrological weather stations and FAN and everything else. So quite a bit going on at site. A meeting later this week with representatives from the Cook Inlet -- the senior leadership team from Cook Inlet Regional Inc., the Alaska Native corporation that owns the land that we have a lease arrangement with, typical -- pretty typical mining lease arrangement. They'll receive a royalty as part of their -- part of the lease arrangement. And then along with that, there's a number of engineering studies that CIRI's leading, along with environmental work for that conveyance of the easement down to the port site along the coast there. So just some photos from around camp, obviously drilling up on the mountain. It's a very steep terrain. We're building these big pads. It's a big job. Safety is our first priority. I'd say that these guys are doing a fantastic job. That middle picture there, that's the oriented core. Very technically-oriented work. Chris Brown's our adviser on that. He's one of the best in the world on doing oriented core. We've got a Niton out there. Dave Larimer, our exploration manager, is testing new skills with the Niton, so that gives you a good estimate of copper, lead, zinc, gold, silver right away. Not so good on the gold, but pretty good on silver and the base metals. We need over a gram of gold. So we're actually -- we do see gold with a Niton, but it's really more for base metals and silver. We know that our silver is in the galena. That was one of the things we were testing here is just to figure out where the silver is. And we did a bunch of tests, and it seems to be pretty consistently in the galena, which is a good thing, because that's -- galena is an easy thing to concentrate. So we should end up with a really good concentrate. We [ are lead con ] here. Just working with the team there on logging the core and just getting everybody having good geologic discussions. And then the other middle photo there in the bottom, we have a prep lab on site, and this is -- it's a really high-tech lab. It's really well run. We produce a pulp on site, which means we can get our turnarounds in probably 2 to 3 weeks once we ship those pulps out, and the first set of pulp went out today. So hopefully, within, I don't know, 3, 4 weeks, we'll be reporting results to you. So very exciting to see that get underway. The drilling to date, we've completed 3 holes. We're numbering it from the top end down towards the bottom end. But hole 8 there, the green one, goes right through the -- guts of the orebody, and that's -- we're not trying to wow anybody with a fantastic gold. I'm sure it will be a fantastic gold, but it is infill. And it's mainly just to get the metallurgical variation of the orebody. We've got a number across the strike of the orebody. We really want to understand what it looks like on the long direction as well. So we've kind of crisscrossed it with the other 2 holes. And then the other big thing here is hydrology, spending a lot of time putting pumps in and VT stations. So we're getting all that work covered off here as well to get a good handle on the hydrology, both in the hanging wall rocks there and in the orebody itself. So we'll -- all the rest of the holes are relatively shallow holes. They're just crisscrossing the orebody right from -- just right near the surface there, so there'll be another 8 or 9 holes like that. The Yukon camp, we've shown this before, but it just shows the road that's currently being permitted. Basically just a couple of tunnels about 3 miles long and it's up -- actually no, sorry, less than 2 miles long up here at the base of the, we call it [indiscernible], and that's a post-mineral rock. It's a good rock to put our development work in right in the footwall of the orebody. You can see, in this perspective, the Johnson Tract orebody sits in his gut right here, makes it really difficult to drill down dip because it's dipping underneath the mountain, and the mountain is going up a couple of thousand feet there. So your holes get deep in a hurry, and just get it at a bad angle. So this [indiscernible] in the footwall will really solve that in terms of getting access to the rest of the orebody, so we can do infill where it will also be our development ramp. So once we combine this thing starting at the bottom, where we know it now and then mining up, which is, of course, is cheaper when you let gravity do the heavy lifting or the heavy dropping, if you will. And then obviously, it opens up this whole area for exploration. So the plan, again, is to get the drilling done this year, supporting the permit application for the tunnel in 2025, and then by 2026, we should be in a place to [ deal with ] the tunnel preparations in place and get the contractor in place to get that accomplished in 2026. Roughly a year to build the tunnel and then a year to drill the orebody out. Those are rough time lines. And of course, as part of our overall plan here with, I call it our 5-year plan. We are now in production at Manh Choh. We're on schedule, and we're now delivering into our expected production profile averaging 67,500 a year. And we've -- $2,100 blended gold basis, we should be clearing over $60 million of free cash flow. And obviously, some of that will get used to advance Lucky Shot, which we'll plan to do next year. We've got a plan there to outline 300,000 to 400,000 additional ounces on top of the 100,000 ounces that we've got outlined, and then develop a mine plan that can deliver 30,000 to 40,000 ounces a year. Give us a couple -- give us 2, 3 years to do that. And then meanwhile, we're advancing Johnson Tract permitting, and by 2027, we should be drilling underground and developing a mine plan by 2028 for Johnson Tract. So a lot of work outlined, but I think these projects -- on a project basis, we should be able to be in a position to produce over 200,000 ounces of gold equivalent here. And obviously, a lot of work between now and then to demonstrate that. But I think we've got a good plan here and a good team to execute. So happy to answer more questions. I'll turn it back to you, Romeo.

Yes. Appreciate that, Rick. There's one kind of broad one from the audience I think is worth chatting about. [ DLB Ross ] asks, how's your experience in Manh Choh informing Contango's decisions on other Alaska projects and prospects in the future? What have you learned? And what are you taking into new projects?

Yes, I think the main thing is really -- well, it's a couple of things. One, looking for simple orebodies, specifically from a permitting standpoint, one of the things that just impressed me is the fact that we were able to permit Manh Choh in 9 months. We only needed -- when the only federal permit we needed was the wetlands 404 permit for building the road, the [ 6% ] road that connects the deposit to the highway, and that disturbed 5.6 acres, if I remember right. And -- so that was -- being able to permit something, any mine, inside of a year is a pretty amazing feat. And obviously, we have a lot -- what -- more straightforward time permitting, getting state permits. So your mine operating permit, you have a good mine plan and a good plan and you can manage water, that's what the state is concerned about. And so again, that's relatively easy to do in a year period of time is putting a good, sensible mine plan together. And if you've got water that needs to be treated, you can build a water treatment plant to do that. In fact, we don't -- I don't know if we'll ever use the water treatment plant we have at Manh Choh. We might, if we get a lot of water, but we have a very large area where we can contain the water, any water, that falls on our head. We have to -- that becomes our water, so we have a big water pond that we put out all the water in, then we reuse the water for all sorts of purposes. So that's -- again, that's relatively easy to plan for and to permit for. So I think that's -- really the big takeaway is if you've got good quality deposit, good grade that can afford the transport costs to get to a mill, then the next thing is that -- first is great, then the next thing is, is it a relatively easy ore body to permit? Things that are above the water table are a lot easier to permit than things below the water table because you have to worry about a lot more water when you're building the water table. It's nothing you can't do. It's just it's a much bigger permitting issue, a lot more data to collect over a longer period of time. And, obviously, it's going to cost you a lot more to handle all that water. So I think those are probably the 2 real takeaways in terms of what really focuses our model, and that's why we acquired Lucky Shot, and that's why we acquired Johnson because they fit all those conditions. They're near infrastructure, they're good grade, they're good quality orebodies. And sometimes it's a good quality orebody just because of grade, and that's the case of Lucky Shot. At 14 grams per tonne, it's really high grade, so you can afford to mine it even though it's not at the best of geometries. It dips at 30 to 40 degrees, which is not ideal geometry for underground mining. You can do it. It's just -- cost a little more. But when you got 14 grams, you can afford to pay for it. So -- and the other thing is land ownership. Owning -- working on private land and working on private land that's on by an Alaska Native tribe or Alaska Native corporation, in the case of Johnson, that also makes it easier. And when the landowner wants to mine, obviously, that's what -- that's the first order of business. When you're working on federal land, it's public land. You have to go through that whole debate about whether that's the best use of public land, and there's lots of folks out there who don't think it is. So when working on private land, you get to kind of lead with the fact that, that was -- that's what the purpose of that land is for, patented mining claims. And in the case of CIRI, land that they selected as part of their Alaska Native Claims Settlement rights. So yes, those -- I think those are the important takeaways. That's a good question. Great question.

Yes, there's a lot of key learnings moving forward, so that's great. One question, just changing tacks a little bit just to ask what's the plan for the Amanita prospects?

Yes. So early days there. We just saw an opportunity. A company that was [ ahead of ], I don't know, trading at a $1 million or $2 million market cap, and they had a nice land position in Alaska. We like the Fairbanks district. There's a lot of gold being produced out of the Fairbanks district. I mean Fort Knox has produced -- I think they're running close to 10 million ounces now, and I think they'll celebrate that at some point here. And there's just been a lot of alluvial gold found all around Fairbanks. I mean that's why Fairbanks is here. It's here because of the gold, and it's here because it's an important transportation hub for Central Alaska or interior Alaska. So yes, it's more of a long-term strategy of looking at the Fairbanks district, which has a lot of good geology. And so we don't have a specific plan yet put together for Amanita, but we're certainly working on it. We see the potential there for 0.5 million to 1 million-ounce deposit in the historic area that's been identified, but there hasn't really been any significant work done on probably, I don't know, close to 10 years, I'd say. So we're going to spend some time digging through all the information, all the data, and put together a good plan. We'll definitely get out there next year. I'm just -- I won't commit to drilling it just yet, but -- because we want to really go through the data and decide what we're going to do there. And the other property that came along with it is Golden Zone. That's a nice good grade copper, gold [indiscernible] associated with a series of porphyry-type deposits. So very, very interesting geology there, and again, right off the highway. So we like it for those reasons.

Great. One question about Johnson Tract. What's the distance from the future portal to the seacoast by future road?

So the -- as a crow flies, it's 10 miles. As you build a road, roughed in, it'd be sort of somewhere in the 15- to 20-mile range, as you sort of wind around up across over the valley there.

Makes sense. [ Ran Dosway ] from the chat asks...

Just so I can put that in context, that's the same distance of road that we built for Manh Choh.

There you go. Correct. Ran Dosway in the chat asks, what are your thoughts on extending Manh Choh's production life?

Exploration. So we've got a $4.7 million exploration program ongoing now. We'll probably wrap that up in the next month or so here. Winter seems to be fast approaching here in Alaska, at least [ we're ] heading south. Yesterday I was barbecuing on the deck. So we'll probably be reporting results from this year's program. It was mostly drilling. There's a little bit of reconnaissance work that we're doing in the south end of the -- further south in the than the Tetlin lease area, but most of the dollars were spent drilling. So I mean, look, it's a very high-grade deposit. It's a skarn, it's [indiscernible]. You have to drill a lot of holes in these things to find an orebody. So we will report results here in the fall time, I'm going to guess November-ish time frame. But I'm pretty bullish. There's a strong geochem anomaly associated with the outcropping neutralization, and it just trails on down the ridge, and there are several other nice anomalies that are certainly undertested, as is the area between the 2 deposits, the north and main deposit or the dip towards each other. So that was a natural place to test out. So yes, I'm confident we'll find more ore, and hopefully, it's good enough grade to be able to send up to the Fort Knox about.

Awesome. We're bouncing back and forth on projects, so I apologize if that [indiscernible]. Back to Johnson Tract. I know it's still a long ways out, not long, comparatively, but long in time. Any idea or thoughts on logistics in regard to moving the material out, who's going to be processing, et cetera?

Yes. Short answer is no, not at this time. I mean, obviously, we'll have to build a road to connect to a barge site. It's been referred to as a port. All we need is a barge site. It's not -- it will be a fairly small barge-type access, or just build a ramp out of gravel material. We have plenty of materials from the development work from the underground at Johnson to build sort of a barge site and to help build the road out there and all that. In terms of where the ore will go, having a number of early stage discussions, but that's really all we can say. There's -- when you have good grade, lots of people like good grade going through their mill. So I think I've said this before, if you've got somebody who's running 5 grams per tonne of ore through the mill, and somebody brings 9 or 10 to them, there's always a discussion to be had, there's a deal to be made. So stay tuned on that. This isn't going to happen with respect to Johnson Tract. We're going to take our time. We've got a number of options of folks to talk to that are all, let's say, barge-accessible. That's obviously the first step, wherever it goes. It's going to be on a barge, where it goes after that, whether it goes on a rail or it goes on a highway to an existing facility. There's certainly a number of folks to talk to, and we're in those early stages at this point.

Great. Now jumping projects yet again. So everybody knows the potential contribution of Lucky Shot is significant. Just curious what were the acquisition costs for Lucky Shot? And then looking forward, are there other such opportunities that are similar?

Yes. Short answer is the acquisition cost, I'm going to -- that's a rusty file [ cap ] in my brain now, but I think it was $10 million. I have to look at our disclosure on that. There are some milestone payments if we achieve certain milestones of production in the future, but in terms of sub costs, that's what we acquired for. And the -- in terms of -- what was the other part of the question, sorry?

Are there any other similar opportunities you can pursue?

Yes. The short answer is there's, what are there, 3,000 or 4,000 junior exploration companies all looking for something. When we apply our filter to it: near infrastructure, good grade and relatively simple, you get rid of about 95% of them. Most everybody is looking for big things, and when you look for big things in today's world, they seem to be mostly a gram or a [ sub a gram ]. People who are developing 10 million-ounce resources at 0.5 gram, I just don't have a lot of time for. So -- the short answer is, yes, there are. There are not a lot of them, especially when we go do due diligence on things. I think the things that we're going to take, we'll be looking at -- and we've got plenty on our plate right now, so we're not in a hurry to go do something else. But you always look around and see what else is out there, but things that are in a hub-and-spoke camp type situation where you've got a central mill, and there are other things in the neighborhood that are of quality and can afford the truck ride or the barge ride or the rail ride or whatever it is, those are -- I think they are out there. And not to get off topic of here, but we have a $2,500 gold price, and the market hasn't moved a lot yet for the junior space. Majors are starting to get some respect on their cash flows, and I think Contango should attract that same attention because we're -- we just sold $32 million worth of gold. And again, I don't have my cash cost yet, but you can do some quick math and we're making over $1,000 margin on that. We're doing pretty good. So I think we'll get re-rated as the market understands that we're going to have 3 more -- or 2 more gold pours this year, and we're going to deliver 30,000 to 40,000 ounces of gold in a good margin. That will put us in a good place. So we've got 2 other really good projects, and of course, exploration, as we talked about, at Manh Choh will continue, and that's about adding years to the mine life. But I think we're in a good place, and we're going to be very selective. If we look at other things, it's going to be very, very selective, and it's definitely going to have to be very accretive to the company.

Perfect. I got one question about Johnson Tract and then to kind 2 recap finance questions, so we can jump back to slides if we need to. The one question on Johnson Tract. They note there's a petition going on to create a beluga protection zone in the Tuxedni Bay Area. So they're curious if the road to the port would be outside of this area and generally, how would it affect the project.

Yes, that's really early. That's -- I think it was just announced here maybe a month ago or so. It's the Center for Biodiversity, and I can't remember the name of the other group now. It's certainly something we're aware of and we're tracking. And very importantly, Cook Inlet Region, Inc., is tracking as are, I'm sure, a number of the oil and gas producers in the Cook Inlet. It's a very productive oil and gas basin. So yes, there'll be a fair bit of scrutiny on that. There certainly are belugas in the area. I've certainly seen them in the Tuxedni Bay there. It's a beautiful area. So it definitely is something we're tracking, but it's pretty early days to say how that will be implemented. These things definitely take time. And I'll note that CIRI definitely has rights to build an access road in a port facility. So CIRI's a pretty serious Alaska Native corporation, and I think their rights will be upheld because they were per passed by the federal government. So I think -- there's definitely -- we want to do things in a way that obviously where -- nobody is interested in destroying the beluga population, so we'll conduct our business accordingly.

Perfect. Three finance questions. I'll just rattle through. If you want to throw the slide up, feel free. [ T Decker ] asks what the cash flow projections for this year and next year are.

If I can just do a simple math, and this is obviously a very forward-looking statement, I guess. But if we're producing, let's call it, midpoint 35,000 ounces of gold and our -- and we're in the neighborhood of that $1,100 all-in sustaining costs, we should be -- we should have $35 million come out of that. So that's total production. So we've already gotten money for it. Now we don't have the costs for it yet, but that last -- if I say $35 million, that would be net of the $1,100 costs. Obviously, we got to pay the bankers off. That's an important thing. So the hedges just don't pay the bankers off. They just guarantee a price at which we can pay them off. So that's -- but we're paying the bankers off and we're reducing the hedge book as we go along here. So I think -- hopefully, that answers your question.

Yes, I think so. There's another question. Same-ish topic, but considering the hedge book, is there a minimum amount of ounces that have to be delivered monthly, quarterly, et cetera?

Quarterly. We put the hedge book together was based on the mine plan. And so -- and that's something you can revisit. You can move these hedges around a little bit. There's a little bit of a cost to it, but not huge. So if we're going to have a really good quarter, we might want to load up a few more hedges into that and deliver into it. So there's a little bit of flexibility in it. But short answer is we're hedged roughly 40% -- sorry, roughly 60% of the ounces delivered in a quarterly period.

Perfect. One last question unless somebody sneaks one in. [ Roe Bov ] asks, sorry if this has already been addressed, but any chance of a TSX listing in the near future?

Yes. So I've had that question a couple of times. I really don't see any advantage to paying the extra fees associated with TSX. Canadian shareholders can very easily trade stock through the various platforms that exist today. So there's not really an advantage. I would say the only time we might think about it is if we had a Canadian property and that might make sense then. I don't know. Flow-through is [ a blasting ] that occurs. I think it's helped make the difficult markets that we have for junior companies because everybody gets used to that flow-through financing, and I'm reading today about Canadians complaining that a foreign company, Gold Fields, bought Osisko and it's like, well, because we don't have a really good market for raising money in Canada anymore. So I don't want to get too political or anything, but it just -- it's not really a good situation that the Canadian markets are in for raising money, particularly for raising larger money. I think it's just not going in a good direction. So I'll stop there before I dig a hole for myself. But short answer is no plans for right now.

As a Canadian, we do just like to complain, so you can expect that in any direction. Rick, thank you so much for running through this, and everybody who joined today. I know it's a pretty big audience. And for the folks asking questions. really, really appreciate your time. If you have anything else, any additional questions, please do reach out. We'll make sure that Rick and his team get back to you as soon as possible. Otherwise, everybody, have a great day. Thanks for joining us.

Thank you much. Bye-bye.

Cheers.