Gold Fields Limited (GFI) Earnings Call Transcript & Summary

Good day, ladies and gentlemen, and welcome to the Gold Fields and Osisko Mining joint venture to develop the Windfall Project. [Operator instructions] As a reminder, this conference is being recorded. It's now my pleasure to introduce your host, Martin Preece. Please go ahead, sir.

Thank you, Chris. Good afternoon, ladies and gentlemen, and good morning to those on the other side of the world, and welcome to this call. I think a special welcome to John and his team from Osisko, who are joining us from Toronto. In terms of our -- the rationale for the call today is just to update you all on the recently announced partnership we're going into with Osisko Mining related to the Windfall Project in Quebec, Canada. I'm going to finish all these introductory remarks and ask John if he's got any further remarks to add. And then I will go through some of the basics around the deal, and then John is going to take us through the project itself. And at the end, we will take some questions. The presentation is loaded on our website, for those of you who would like to watch it. John, if I could maybe hand over to you. I'm sure you have some introductory remarks.

Good. Thank you, Martin, and welcome, everybody, to today's call. I'll keep my points brief. We're very excited, very happy to make today's announcement with Gold Fields. Windfall is an absolute world-class deposit. We've worked on this one for about 7.5 years with some very stunning results in terms of the drilling, the grade, the scale of this deposit. It's an exciting deposit. It's an exciting day for us. Really, this kicks off the first day of marching towards mining, which we expected about 2.5 to 3 years' time from now. Martin will walk you through the deal, and I will try and give you that same sense of excitement that we feel jointly, both as at Osisko and Gold Fields for how we see this deposit developing in the future. So back over to you, Martin.

Thanks, John. So as John said, a very exciting day for all of us. We're pleased -- very pleased to be partnering with Osisko. They've put a lot of effort over many years into this. Our teams have been working on this jointly for the past year and a little bit. And I think what really excites us is working with Osisko, they're an experienced partner with vast experience in that jurisdiction. It's a world-class asset with all-in sustaining costs of just below $800 an ounce. We've got a 10-year reserve life on the project. I think really importantly for us is the upside we see and the analog with our operations in Australia, where we see significant expansion and exploration potential. I mean John and his team have got a really strong ESG track record, which does tells with what we're doing [Audio Gap], the power line that they're doing with local communities and completely renewable power to come to the [ start ]. We're going to share project development acceleration, each contributing skills to create a unique partnership. We're really excited about going into a really strong jurisdiction with a great track record of Osisko with exploration permit in construction and operating in Quebec. We know it's a tough environment. I think the really important thing around the upside is the 50-50 joint venture over the Windfall Project, but importantly, the Urban Barry and Quevillon camps, that's over 2,400 square kilometers of land package, which we believe has got significant upside potential. In terms of the acquisition cost, it's -- we're going to be buying in at CAD 600 million, paid in 2 tranches, one tranche today and the second tranche once permitting comes through. And we've also committed to CAD 75 million for the exploration spend to unlock that long-term upside potential. In terms of funding, we're going to fund this through cash reserves and debt facilities. And we, in no way, see this affecting the payment of dividends, and we remain committed to paying 30% to 45% of our normalized earnings as we had announced during the [ quarter ] last year. Growing the quality and value of our portfolio and strengthening our pipeline, this is really important for us, asset coming in at under $800 all-in-sustaining-cost with a nice long life, and I've touched on the ESG. In terms of the commercial terms and operating structure, it's an immediate formation of the 50-50 partnership, which will be jointly run by both parties in equal representation at both Board and committee level. The partnership covers a feasibility stage Windfall Project as well as the highly prospective Urban Barry and Quevillon camps. In terms of the consideration, which I touched on, basically, the 2 tranches of $300 million, the first of which is transferring through today, which is approximately USD 220 million. In terms of development, we have 50-50 share in the interim programs and the construction costs going forward, which is CAD 1.1 billion on a 100% basis. And then as I've touched on the exploration part, we will, for the first 7 years, fund an amount of CAD 75 million to drive the exploration. I think the headline for us is that this is a measured entry into Tier 1 jurisdiction on an exceptional asset, which John referenced in his introduction, and something that we're really excited about. I think just touching very briefly on our strategy. This transaction supports both Pillar 3 and Pillar 2 around growing the value and quality of our portfolio of assets and then building on our leading commitment to ESG. So fully aligned to our strategy and where we're going as a business. I think -- just in summary, I think in terms of our strategic criteria for improving the [ value ] and quality of our portfolio, I think asset quality, the first one, at $800 all-in-sustaining-cost and below life of mine of 10 years just on reserves, not including resources. So we've got asset quality, we've got jurisdictional quality been in Quebec in Canada. The strengthening of the pipeline, as we've touched on, the exploration assets and growth potential at Camp Scale, long life and the project is at pre-construction stage already. Osisko has invested a lot of money in getting the site to where it is. And then we touched lastly on the ESG practices. Osisko has ranked very highly and the MSCI rating was A in 2021. So for us, it's an accretive incremental portfolio improvement that follows the same principles as the AngloGold Ashanti JV in Ghana that we announced some weeks ago. John, if I could maybe hand over it to you to talk more competently about the project.

Thank you, Martin. As I mentioned, Windfall is truly an exceptional deposit. As it stands right now with our 7.4 million ounce total -- all combined resource, it is the largest high-grade underground deposit ever found in Quebec in the last 100 years of exploration. It's located in a similar Akyem greenstone belt to the well-known, or at least better known, Val-d'Or camps and Timmins camps, both of which have produced over 100 million ounces in the last 100 years. There's really no difference between the potential for the Windfall belt. It's just less explored, literally a fraction of the exploration over the last 100 years of those other belts. On Slide 7, you can see on the top left corner, there's a comparison of Windfall to other Canadian gold discoveries. It ranks within the top 10% of superior province discoveries that were over 5 million ounces. So it's already a highly ranked deposit as it stands. We expect it will grow over time and continue to move to the top of that list. Where we stand today, if we were in production of the current reserve grade that we used in the feasibility of 11.4 grams per tonne, it would be in the top 10 high-grade producers globally. We have good reason to believe that, that head grade as we go into mining may increase and it may increase substantially. That will be the big question as we get into the first sort of 12, 18 months of mining. We look forward to a very strict triple capping on this deposit because of the preponderance of coarse gold. We've taken 3 bulk samples to date of about 15,000 tonnes total and we covered 15,000 ounces of gold. We've had recoveries and positive reconciliation between plus 26% up to plus 89%. So it is an exceptional deposit as it stands capped. We fully expect to commence at what we stated in our feasibility of 306,000 plus or minus ounces per year. We have good reason to believe that once we get mining, we may actually see additional grades come in. And just to let you know, every 1 gram of additional grade that we do capture -- and we have been capping out about 25% of the gold metal from our resource. Every additional 1 gram per ton grade that we capture would add about another 35,000 ounces per year. So there's good reason to believe that as we move forward with additional work on deposit, we see this sort of creep up and surpass things like 400,000 ounces a year plus. Where this deposit sits compared to other very well-known Canadian gold camps and gold mines like Red Lake, Macassa, LaRonde, we've drove the deposit over the past 7 years with nearly 2 million meters of drilling. It's very well drilled. Somebody on the call may not be familiar or as familiar with Osisko Mining, but our group, Bob Wares, Sean Roosen and myself started Osisko back in 2003 in the space of 6 years in a month. We defined the Canadian Malartic deposit, Canada's current largest single gold producer at about 700,000 ounces a year, put that into production. Very big money. So this is a little different in terms of it's a high-grade mine. But where Windfall sits right now with the 2 million meters of drilling, we have it defined from surface down to 1,200 meters. We've done extensive drilling on the deposit with some deeper holes as well below that. We have good reason to believe we can double that [ reserves ] as we go forward. We literally had to pick a place to stop. The target over the last 2 years, 3 years was to come up with something just over 4 million ounces, and that -- by the time we added mine dilution, we were starting with 3 million ounce reserve that we could then project a 10-year mine life on. The deposit certainly doesn't stop at 1,500 meters. We've drilled the deeper [ toll ] in Canada. That's about 3.4 kilometers long. We wanted to take a look at the roots of the system, and we had economic intercepts as deep as 2.8 kilometers vertical. So there's a lot of room for this deposit to grow, and we can probably spend the next 5 years plus just expanding the deposits, internally even above that through that 1,200-meter level. But certainly, as we go down [ plants ], we are seeing higher grades and wider widths of this deposit. So it is very -- truly a very exceptional deposit. And I think it stands alone in this class globally today as one of the very highest grade near-term development assets. On the next slide, on Slide 8, the feasibility highlights. Again, we chose a 10-year life of mine based on that 4.1 million ounce reserve that we valued, would be down to 3.2 million. But there we didn't include 3.5 million of the other ounces. They're still there. Our conversion success has been well over 90% in terms of bringing those ounces from inferred into measured and indicated. And there's at least another half of the deposit in our minds as we go down [ plunging ] the ladder to add on as we move forward in mining. We're looking at first production in 2025. Permitting was commenced in March. It's typically about an 18-month plus process. We had some hopes that it might be shorter. But once we come out of permitting, we're looking at a few months to get the actual construction [ lease in ] Quebec government and about a 12-month construction cycle. So that would put us into late 2024, early 2025, if everything works perfectly, which we all know happens every single time in the mining business, with exceptions. The feasibility was predicted 306,000 ounces per year based on the diluted grade of [ 8.1 ] from that initial 11.4 gram per tonne grade in the reserve. We added some inferred material in there that we're obliged to mine through as part of the development work. We counted it at 0. We know it's not 0, it's actually at about the same resource reserve grade. It's subject to more drilling before we can add it into the M&I categories. If we were to include that as drilled out material, we're probably looking at something more like 326,000 ounces per year on that basis. And this is before we start thinking about adding additional grams that we may see coming through the mining as we move forward. Construction costs in the feasibility were estimated at CAD 789 million. We are seeing some cost reduction -- have seen some cost reduction in the past 3 to 4 months as we move through detailed engineering. We're currently about 30% to 40% through the detailed engineering. We're looking on like CAD 720 million CapEx costs, [ as ] increase about CAD 59 million contingency. The AISC at USD 758 per ounce is certainly a very good AISC. But again, adding those other ounces that we excluded and counted at 0, we expect that number to come down. And certainly, if we see additional grade we're getting on for free and just dividing by a bigger number, So we should see the AISC if we are correct about that additional grade coming in, drop below [ USD 700 ]. We -- As Martin mentioned, we are in partnership with the First Nations in a very big way. The Waswanipi Economic Development Corporation, [ Yukon ], is currently building a hydro line to site from their substation in their town. This is about 85 kilometer long hydro line. They're currently about 20% complete. There's spring break up there right now. So it is a couple of weeks from when the [ track ]is on multiple ground. We are expecting that hydro line to be complete by the end of this year or early in 2024, all on schedule. The mine will be creating over 1,000 direct -- new direct jobs during construction and about 670 direct jobs during the operations. We currently employ about 30% as First Nations employees from the region. Our workforce is very diverse. We have very good balance from the Board of Directors through management and through our technical and operations staff at site of all genders, and certainly a big First Nations component. And many, if not most, of the employees are Quebec-based. On to Slide #9, the ramp-up and expansion potential. This is my favorite slide of all the slides that we typically put in our deck. When we started with Windfall back in 2015 -- it's a longer story, but I'll try and make shorter. But with the original Osisko Mining, which we were forced to sell back in 2014, Bob Wares developed a list of targets. This camp was on that list. We drove on target and then luckily, because we didn't see the size potential there -- and then we spent the next 10 years with Canadian market drilling it out, putting it into production, building it, building the team. We produced the first 1.2 million ounces of gold from that mine before we were forced to sell it in 2014 because the hostile pick [ was ] attempt from Gold Corp. So we do have production experience in Quebec, basically all the way from concept to acquisition to drilling to construction to operations. Windfall will be no different. It's only tractions I think of this partnership for Gold Fields, is we have a fully functional [ fighting ] team, not only on the exploration and discovery front, but also in the development and operations side. In terms of the discovery potential, the members of our team have an exceptional record in Quebec. We've discovered the last 3 world-class deposits, discovered in Quebec, and that is: Canadian Malartic, Windfall going -- and [indiscernible] with members of our team over the past 17, 18 years. And hats off to members of the group. Back to the slide. You can see on the left-hand side of the cross-section, we showed the 1,000-meter level. Just a little bit below that, from 1,200 meters of surface is where we have our entire resource, the 7.4 million ounces in all categories. That includes the 4.1 million ounce reserve that we used in the feasibility. And you can see the deep hole in the middle, which we call the Discovery One. If this was a larger diagram, you would see a project down quite a lot deeper, but there's wide open potential to expand the deposit pulling these areas down plunge. We know they're there. We didn't stop growing them because we didn't believe in the potential, so we had to physically stop at some point. Having the access underground, we've got approximately 12 kilometers to 13 kilometers of underground ramp and surface to under 630 meters vertical right now, has allowed us to put in underground drilling stations and drill it even more efficiently. Our discovery cost of Windfall has been approximately USD 45 per ounce, including all of that [ 2 million ] ounces of drilling. It's a world-leading cost of discovery and we expect that to continue for a long time at Windfall. These are growing deposits. Again, honestly, my personal belief is that if we were to do nothing but drill for a while, this would easily go over 10 million, 15-plus million ounces in time. It's not the [ needed ] objective, the [ needed ] objective is to complete the work permitting and build the mine and get into production. But certainly, in terms of the overall exploration potential around Windfall and in the belt, we don't have to go far to find a lot of additional ounces by just looking where we are laterally even with deposits staying above the 1,200-meter level, and then as we desirable down plunge and replace the reserves as we mine. The next slide, with respect to our ESG credentials and back to our prior experience as an operator, again, I'll say that we produced the first 1.2 million ounces of Canadian Malartic. We were a mining company just about 8 years ago. And before they called it ESG, it was called sustainable development. And before that, it was having the social license, and before that, it was just plain good operating practices. We've always done this. We report to a standard of an operating mining company already. So it's a very good fit with Gold Fields in terms of how we treat our ESG responsibilities. We are generally sincere about it. And this will be one of the newest and most ESG-friendly and responsible mines to open in the country in the coming couple of years. We mentioned the power line. It's well in progress. This is the first time in Quebec that hydro production has not built a power line to a site. This is truly a groundbreaking agreement that we have with the Cree First Nation of Waswanipi and [ Crown ] Development Corp to build this line. And I truly believe that this is going to become a model for other companies operating in places like Quebec and across Canada in dealing with First Nations to share the benefits of mining in the northern areas. At that point, I believe we're just going to touch briefly on the regional exploration. Outside of Windfall, back to the 2 million meters of drilling that we've done in the last 7 years, 7.5 years, almost all of that has been conducted within about 5 square kilometer area. We have a property that is district scale. It's 2,400 square kilometers of coverage. We control about 65% of the favorable geology. Early on, when we started back in 2015, the [ age ] dated all of the [ intrusives ] and the belt related to gold mineralization were all 2.69 billion, to 2.72 billion years old, spread across the belt. So [ it ] told us that the Windfall deposit is not a singularity. This was a true mineralizing event very much identical to the Val-d'Or camp or the Timmins Camp where, again, they have over 100 million ounces of production over the last 100 years. We expect the same thing fully through exploration that we will find additional Windfalls and gold type deposits as we move forward and get [ on with ] that big regional exploration program that is part of today's announcement. Just one last slide to zoom in around the deposit. Again, we don't have to go far from Windfall to have additional targets. We've had 5 or 6 surface [ showings ] and discoveries through minimal exploration drilling. The problem that we've had over the last 3 years to 4 years as we drilled out the deposit and put that 2 million meters is underground deposits are really different from open pit mines. We have drilled a long way to [ sterile ] before you get your economic intercept that builds into your resource. So we had to heavily focus on drilling up the resources of the deposit. We had up to 35 drills, one of the largest drill programs that I have been associated with. We've calmed that down a lot. We only have 15 rigs right now. We've got 7 on surface right now, doing regional exploration. But we can occupy ourselves very handily, again, just doing near deposit exploration on some of the highest potential areas. We do have surface showings on the property, 45 kilometers to the east. We've been returning results of multiple ounces on surface that we're hoping to start drilling soon. But I think you can expect that there will be future discovery success on this property as we get more rigs out and start doing exploration [ properly wise ]. At that point, I'm going to hand it over to Chris, and I think we're going to go to questions.

[Operator Instructions] Our first question is from Adrian Hammond of SBG Securities.

I'd like to start with some questions, firstly for Martin. 3 for you. Firstly, so could you just clarify who will be the operator of this new JV? And also, how do you see -- typically JVs in the past haven't been too successful, seen this time and time again. How do you expect to manage that with a new partner? And then secondly, you guys have got another project coming online soon. You'd be managing 2 now. So just some color on how management will stretch themselves and how you stretch the -- tested the balance sheet for the funding of this project? And then thirdly on the feasibility study, the numbers that you've given us here today. What are the dates of these numbers? And any sort of considerations for CapEx given the inflationary environment we're in today? John did mention that the CapEx numbers could actually fall. And then I just want to clarify that number from John. Is that number that you quoted for first construction versus the total CapEx bill of $1.1 billion, including sustaining CapEx? And I think that's it for me.

I'll have a go, and then I'm sure John will add to it. So this is not going to -- neither of us are going to be operator. It's a true 50-50 JV operated in a very similar mechanism like Canadian Malartic was operated. We will each allocate 50% of the Board members, and this will be run as a separate company where we will have 3 people from each organization on the board. It will be -- they will employ management. And the entity will be run separately. There will be 3 subcommittees underneath that, that will support the Board and the management is executing on the duties. I think you're very right about JVs, are always typical, but I think it's around having the right personalities, the right leadership. And we've run a very successful JV in Australia, where we are the operator. It's about mutual respect and about how do we look at the interest of all parties, not just one party. So I'm very comfortable with the arrangement. I think John and his team have run this model before. They've run it very successfully. And we've got a great deal of comfort with the model. I think, Paul, do you want to just touch on the funding quickly?

Yes. Adrian, I think you need to bear in mind that Salares Norte comes online next year, and we've guided circa 500,000 ounces, all-in cost of [ $650 ]. So you can imagine how much money Salares is going to make. So as we said, initially, it will be provided from debt facilities, but then this -- the funding will come from basically operational cash flows going forward.

And then, John, I had a question for [ him ], but perhaps if I can just change that one. I just -- what I haven't seen here today is, how will Osisko fund a portion?

John, do you want to answer that?

Yes, certainly. Pro forma this deal and fully diluted will be somewhere north of CAD 900 million of cash. We currently have CAD 200 million in our bank account subsequent to the payments at [ Timmins ] facility [indiscernible]. We have other instruments in the company and investments that are going to take us well over CAD 900 million. So our half of the CapEx is fully funded because we have a very comfortable cushion. I think you had a question as well about the partnership and the CapEx. We do believe the CapEx will come down. When we put other feasibility during this peak inflation in terms of where numbers were going, but half of that was probably supply chain related in terms of whether we're doing [ gold tanks ], and ships they're stocking up in ports. We saw the same thing happen in 2009 post the financial crisis, and we were building Canadian market, at the time tires that were $20,000 each. We're shooting up to $80,000, $90,000 per tire. But that pressure came off. We don't expect it to go back down to pre-inflation levels, but we do see some cost reductions certainly just in the terms of pricing. But we're also [ funding ] economies in terms of how we are designing them. So we would expect a significant reduction in terms of whether the overall CapEx will be from the stated number and our feasibility. The partnership question. We've been doing project evaluation with Gold Fields for some time now. The teams get along extremely well. Gold Fields has a very highly skilled technical team, and we have a very highly skilled technical team. We've got great discoveries in our growth and grade engineers and a very young, very keen group of members of our staff who are very exceptional in what they do. They're cutting edge. And I think these 2 teams are going to get together very well, and there will be good efficiencies, but also some very good trading of ideas that [indiscernible], what is, I believe, already a spectacular deposit being even more spectacular than that.

This document was published in December last year -- 28th of November last year.

The next question is from Josh Wolfson of RBC.

I guess a question first for Gold Fields. Could you comment on whether there is a standstill associated with this or any ROFRs for the 50% stake that's not owned? And then also, why hasn't the company looked at acquiring the 100% stake or maybe that was not an option given the company's financial resources and, I guess, the appeal of the asset that, that seemed to be a way forward [ for you ] as well?

Sure. Yes, I can answer that one for you, Josh. We weren't looking to sell the deposit 100%. We've very publicly been looking at joint venture partnerships for over 1 year now. And -- so that's my simple answer to that.

And then the standstill or ROFR associated with the other 50% then? What's -- are there any details that can be disclosed there?

I think we have got agreements and over the fullness of time, we'd be quite happy to release that. But there is an element of a standstill, and we tend to respect that, Josh.

And then just another question for the Gold Fields team. The size of this transaction looks to offset some of the declines, at least that we forecast for Salares. The team it sounds like has been reasonably active on M&A. What is Gold Fields' perspective on further pursuit of M&A after this deal has been announced?

I think, Josh, we're going to take some breathing space now. I think we've got enough to keep ourselves busy now. As Adrian said, we've got the deal in Ghana. We're commissioning Salares at the moment. So I think we've got more than enough to keep us busy for a while now, and we want to make this work.

The next question is from Ovais Habib of Scotiabank.

Congrats on the JV. Just a couple of questions from me and primarily for John. Now that you've kind of had a JV partner to build Windfall, does this give you or provide you and your team the chance to look at other projects to build on Osisko's project portfolio? Or will you kind of focus on Windfall for -- is that the focus for the near term?

Yes, we're absolutely going to focus on Windfall near term. Ovais, it's a good question, but our 100% focus is still on the deposit itself. As I mentioned earlier, we can spend a long time just continuing exploring internally and laterally from where we have defined mineralization. I'm certain we're [ not aware of ] targets for a long time. The down plunge potential of this deposit is exceptional, as we've shown from deeper drilling. The near deposit potential is very high. Every time we try to pull the drills out there, it lasts 3 or 4 years. We have to pull them back because of shortage of drillers, and then you have a lot of infill holes to get that resource that we're really paying for. So no, we're certainly not going to go out and look for other things in other parts of either Quebec or the country. We've got our hands full here for the foreseeable future and certainly for the balance of my career, just finding the deposits around with that.

I think, John, and the 100 years, I think it's enough to keep us all busy there. I think it's going to go past the mine and John's retirement.

Yes. Again, the nature of the main deposit itself is exceptional, but we are certain that there are more to be found.

And I guess that's kind of the reason why you wanted to keep that 50% on the JV side and not give it away 100%?

Absolutely. I mean, look, if you go back to what happened with Canadian Malartic, Ovais, that would have been the only thing that Sean, Bob and I ever did, if we would manage to keep it. We -- When we sold the company, it had 13 million ounces. We put the discovery holes into Odyssey, which is really just part of the [ old East ] Malartic system, but we didn't have enough time during the hostile takeover to drill it out. We eventually want to get to it. And everybody doubts that the guys who drilled 1 million meters a year almost, you can be -- certainly define it. So it's -- there's enough meat on the bone here to find a lot of things in the future. And really, this is going to keep us fully occupied as we go forward. And certainly, the value for Osisko shareholders, even though we are taking a partner for 50% of this deposit, the market hasn't been paying us for 50% of the deposit. They haven't been paying us for a fraction of this deposit. We honestly believe that this is much larger just as a standalone Windfall. But certainly, everything else has been discounted. And certainly, with a partner like Gold Fields, we're going to knock over some tables and grow [ futures ] around some more deposits in the near term, I'm quite certain on it.

And second question, just -- can you just provide us what we should expect over the next 12 months just in terms of any sort of updates? As well as can you just touch upon a little bit on the permitting side as well, John?

Yes. Sure. Completion of power line, completion of IDA, coming up the other side of permitting next year, construction release from the Quebec government and started construction. Really, the project has de-risked to that point. And I remember this from the last -- the mine build we did at Canadian market. This is all just time driven. We do have an exploration progress -- exploration program in progress that we started back in January. We will, I think, accelerate that now with emphasis with our new partner, Gold Fields. So you stand by any given week where -- depending on how the drills do, we may churn up some other interesting things. But really, it's the market progress of the deposit moving forward and coming to that production date. The project has gone very smoothly over the last 7 years. It has been a lot of drilling, but it's a very big deposit. And certainly, I think will be [ newsy ] as a joint venture going forward. Certainly, we expect to hit those milestones relatively within the schedule that we presented previously as a standalone company. We don't see any obstacles [ around this ].

The next question is from Kerry Smith of Haywood Securities.

Martin, just on the feasibility study, was Gold Fields comfortable with the capital operating cost estimates that were developed by the feasibility? How did you view that study?

So we've obviously, as I said earlier, been talking to Osisko for over a year now. Our team, obviously, as part of the due diligence has looked through that. I think John referenced a short while ago that our technical teams from our technical office in Australia has been actually doing some detailed work on some parts of the feasibility with John, more specifically around the process plant I think where a lot of the capital sits. And I think John can talk for himself, but I'm sure we've added value to each other there. So we've looked at the capital. I think we believe the capital is reasonable. I like John's comment that it obviously was in when the inflation was running wild and you see some upsides between -- within that capital. So I think we've spent 12 months doing due diligence, so we're comfortable. So -- if you -- we recognize now while we go through the permitting, we're going to do more work with John and his team. I think one, you want to get that engineering up from that 30% to 40% to closer to sort of 85%, 90%. That's going to give us all a lot more confidence. But I think we're going to complement each other and come out with a great technical solution, but I think more importantly, a great techno-economic solution. John, you might want to add to what I've said?

Yes, sure. Maybe I'll let Don Njegovan, our Chief Operating Officer, just say a few words about what we're seeing in capital reduction and some opportunities we have in terms of maximizing the efforts of the 2 teams now being together?

Yes. Thanks, John. I mean, really, what we see at Windfall is we have a lot of infrastructure in place already. So how do we use what we've got? As John mentioned on the call, we have 12.5 kilometers of underground development already finished. How can we work within the [ ore ] body of that infrastructure, so we can use what we got. And also if we have to expand the ramp-up, we can expand the throughput multiple phases, open up different zones within near volumes. That will give us a lot of flexibility. It also gives us lots of optionality to reduce cost throughput. There won't be any bottlenecks on the ramp at all because all the infrastructure will be in place before we start production. With respect to the mill, the footprint is going to be fairly small and compact. Everything will be under one roof, the warehousing and everything. So you won't be driving all over the place to find things and it'd be right at your fingertips. So we're really trying to set ourselves up for success here. We visited a lot of different operations over the last few years. How do we do things right, taking the good from what everybody has to offer, so we can avoid the bad. Those are really the things that we're focused on here to make Windfall a world-class operation.

And John, can you talk a little bit about the process that you went through to get to this JV? Were there other parties interested? Can you talk at all about that?