i-80 Gold Corp. (IAU) Earnings Call Transcript & Summary

It's great to see some familiar faces who've been here for quite a while and people I've worked with for a long part of my career. I know last year, I sent a thank you to a lot of the people that have been important to me and my now 26 years of doing this. And I'd have to say that this 26th year of every year standing at the podium as the CEO of a company was definitely the most challenging, I think, I've seen in those 26 years. Despite the strong performance of metals, the translation of that into the equity markets, I think we've yet to see. Now I say that yet to see because I do think there will be a significant catch-up and the companies who have put themselves in a good position to perform will perform very strongly this year. And with the support of several banks and a lot of our shareholders, some long-term shareholders, we were able to be one of the few companies in recent months who have been able to complete a large-scale financing. And in 2023, we were consistently slowing down the progress of our projects just because of the inability to raise capital. So with this completion of the financing, I'm pretty happy to say that we're looking forward to a very strong 2024, and we are accelerating the advancement of our project. Our next important piece of business, I want to welcome Cassandra Joseph to the Board of our company, a new addition and very strong credibility and experience in our industry that I think will be important to our company. So welcome and look forward to working with you. I have our standard disclaimer statement. So I urge everybody to read this. There could be some forward-looking statements made in my presentation. So as most people know, i-80 Gold is a Nevada-only company. We've been fortunate, I think, to assemble one of the largest resource bases that you'll find in any U.S.-based company with significant gold and silver resources in our portfolio, and multiple polymetallic deposits that we've been delineating over the past 24 months. A Nevada remains currently the #1 mining jurisdiction. And we found it to be a tremendous place to work as we advance our projects. And very fortunate to have assembled a very high-quality team, some of our team who are here today who have a vast strong, long-term history of exploring, developing and mining in the state. We're one of only 2 companies in the state of Nevada with an autoclave facility that for the long-term development of our company, I believe, gives us a true competitive advantage to grow because -- for the most part, most projects in Nevada, 20 years ago were oxide projects. And as they go to depth typically transition to sulfide or refractory and the inability to process refractory mineralization in Nevada to me is a barrier to entry into the state. So this is a key acquisition for our company and the start-up is key to our achieving our goal to become one of the largest producers in the United States. As everybody knows, I'm an explorer at heart. So I enjoy the exploration that we do. And the thing I like about our project portfolio is that these are very high-quality, high-grade assets. But every single one is open for expansion. We have yet to cut off one of our primary deposits, and I look forward to our resources to continuing to grow as we go forward. Importantly, these are all brownfield sites. So we have these images here. So you can see there's a lot of companies working in the Rocky Mountains or remote sites. And when you look at the future of that company, how many years it's going to take? I use Greenstone, the Greenstone mine that's just being commissioned in Geraldton as an asset that Premier Gold forward. As an example, we acquired the project in 2008, and it's just going into production. So 16 years from first [ rumble ] to permit to build the mine. So it's not -- it's not an easy business that we're in. It's capital-intensive, and it's time intensive. And the portfolio that we've assembled, as you see here, we have 2 existing processing facilities. So trying to process a mill and a tailings pond is not -- what we're trying to do right now is making modifications to existing permits so that we can achieve our goals and getting 3 projects ready for development over the next several years. In 2024 or leading up to 2024, we have made several significant milestones despite working on a balance sheet that was less than we wanted. Recently, we raised sufficient funds to advance our company's strategy to become the second largest gold and polymetallic producer. In the state of Nevada in fact, we are aiming to become the largest pure-play gold producer in the United States. We have more than 45,000 meters of drilling plan this year, whereas last year, we're backing off all year. This year, we're accelerating what we do. And this is designed mainly to increase the quality of our mineral resource base. We have, in all categories, 14.5 million ounces of gold, but a lot of that's inferred. And one of the big challenges for companies is the capital required to convert inferred resources to indicated or measured and indicated, which is -- requires a lot of drilling. You can drill at 100-meter spacing, they got this nice resource, but in order to move it through to a development scenario, you have to tighten that up and then do your engineering studies in order for that to happen. So we're in a good position to do that. And we did say we want to deliver our first feasibility study in 2023. We weren't able to achieve that because of as I said, difficulties in financing the programs required, but we have now embarked on a pretty major drill campaign at the Granite Creek property for it to move into measured and indicated resource and become our first true feasibility study. And on the back of that, we expect the first operation that we declare commercial production on. And we continue to advance. We announced earlier a nonbinding term sheet for a joint venture in one of our properties. A lot of people ask questions about that event. For us, as a company, you always want 100%. You never want -- really want to partner. But when you're trying to do what this company is trying to achieve with multiple operations, we felt that it could be prudent to get some help advancing these projects. So utilizing other companies, and we continue to advance this joint venture. Joint ventures are complicated. If you recall what happened to us in our joint venture at Greenstone with Centerra, we're cognizant that structuring a JV properly and ensuring you have the right rights to advance the project is pretty key. So we continue to do that. It's not an easy process and does take time. We have a large, very high-grade resource base. Two of our projects that we're advancing currently for development are plus 10 gram. 10 gram deposits aren't the norm when it comes to underground operations. They're actually very rare. And the grade of mines around the world every year declines. When you look at the gold grade -- average gold grade being produced worldwide every year, it goes down. So we're chasing lower and lower rate deposits with price of gold at 23, 23.50 helps in those developments, but there aren't a lot of projects that really survive the tough times. And really, the mines that survive best in difficult gold conditions because we are going to see ups and downs. This is not a straight up business. It's not like the S&P 500. Metal prices go up and they go down. And the companies have to deal with that and the higher grade assets typically do much better. When you look at our resources, we stand as one of the largest holders of resources in the state of Nevada. And we expect that to increase. We haven't released any new resources. We've been working on new resource work based on drilling for the Ruby Hill project. Granite Creek will be the big one for us here in 2024. And as we look to significantly increase our M&I resource for a feasibility study. And none of the polymetallic deposits in our portfolio, and we're currently part of our resource. We aren't moving forward with those resources. We're not drilling right now. We completed our drill program. And we're just waiting on one -- or assuming once we get the JV completed we will make a decision as a joint venture as to what we release and how we release resources and when we release those resources. We -- so we're working through those items as well. As I mentioned, we do have some of the highest grade development stage projects you'll find across North America. But one thing I think that gets overlooked is we actually have 3 open pit projects in our portfolio. And these are significant resource bases. The largest deposit in our portfolio is at Ruby Hill and it's a heap leach open pit project that was drilled off by Barrick prior to our acquisition. It's about a 5 million-ounce open pit project, which if you look at it as a comparison project, in terms of ounces, about the same size as Greenstone. Greenstone is what Premier basically was. The Hilltop discovery we made at the Granite Creek project is what I believe to be one of the highest grade new polymetallic discoveries in the world, and that discovery was made about 18 months ago, just over 18. And the exploration success we've had at these projects has been phenomenal. And the work we've been doing to upgrading resources, if you're following the drill bit has been demonstrating that our 10-gram grade is holding up really well. And in several instances, we're seeing increased grade. I'm not going to dwell on this slide here, Slide 7 of the presentation, but one of the things that if you look at the history of i-80, we came from Premier. Premier was Canada, U.S., Nevada and Mexico. And as you can see with the new company, we're just in Nevada. And it's nice to see that the Fraser Institute and the peer companies who kind of vote on this, the people in our industry who are responsible for voting to see these type of things done by the Fraser Institute that Nevada ranks #1 in terms of both investment attractiveness and policy perception. We're fortunate that even that's a good thing to have when it comes to, if I want to build a mine. But we -- these sites that we have are all rolled accessible. They all have grid power. It's a different situation than you typically find in our industry. And again, as I mentioned at the beginning, Matt Gili, our President and Chief Operating Officer, has done a tremendous job at attracting what we feel is some of the top talent in the state for developing operations. I'd even point out one gentleman, Mark Miller is not on this, and one of the top permitting people you'll find. So the quality -- not only the quality but the experience these people have of working in the state of Nevada is what I believe is going to be key in this company, achieving our goals of becoming a significant producer in the state. We operate entirely in North Central Nevada. I refer to where we work. Here on the slide, we got Nevada. It's a posted stamp within North Central Nevada. And within this area of the Great Basin are what I referred to as the Carlin and Battle Mountain Trends and the Getchell Trends. And a lot of arguments about what is the real trend of mineralization in these places. But there are definitely these districts are large structural features through the Great Basin that are significantly endowed in gold. If Nevada Gold Mines who operate entirely in this picture, we're a separate producing company, it would actually be the fourth largest gold producing company in the world on an annual basis. The only company is larger than it would be the 2 owners, Newmont Barrick and Agnico Eagle, and it took Agnico taking over Yamana to achieve producing more gold than what Barrick and Newmont do in the state of Nevada. And we've been fortunate to assemble a very high-quality portfolio of projects. We actually have 6 active projects in the state, not developing all 6. We're working on 3 of them. But we actually have 6 projects in the state. We have the processing infrastructure that's going to be critical to achieving success in the future. And importantly, we didn't start 3 years ago when I came out. We actually started working at buying projects in Nevada about 15 years ago with a project that's called Saddle, the Saddle project in the Rain district. So we acquired an obscure piece of ground in the Carlin trend, we traded that property essentially to get gold. And what we've done at Comus is delineate what I believe is one of the highest grade undeveloped gold deposits in North America. And we took that project from a concept to a resource. We permitted to go underground, which we successfully put in place in 2023 to begin the underground drill campaign in advance of the feasibility study. So Lone Tree is what we believe gives us a long-term competitive advantage in the state. I'd point out that Lone Tree also has a resource. They're -- the Lone Tree was a significant mine in this day. It was an open pit operation right beside the Interstate 80, hence our name I-80. It's the only refractory processing facility that actually sits on the highway. The other one is you have to drive up dirt roads to access them. And in this image in the center, right under where it says advantage, there's little white things. Those are transport trucks on the highway. So it's a very well-located facility just across the highway, it's in Nevada central railway. So in the future, if it comes to looking for third-party concentrates, et cetera, it's the primary spot to be used in the state. There's significant upside though. One thing that we don't talk about the resource we have at Lone Tree, but there is a pit expansion of about 3 million ounces in all categories. Most of that's in the inferred category. But the power line fault structure where this deposit exists has sections of it that have significant high-grade refractory mineralization. These deposits could be, if it wasn't for the water situation, could be company makers in their own rights. They're tremendous wits, really good grades, the [indiscernible] fault structure is something that I wanted to do more work on. We haven't because we've got other higher priorities. But -- and then we have the Buffalo Mountain project just to the southwest of Lone Tree. And Buffalo mountain, we don't talk about much in our portfolio. It's kind of between us and Marigold and off to the side. But just so you get the picture, the Marigold mine of SSR is immediately south of us. And our last step out hole our South most hole we drilled in the deposit was 134-meter interceptive a gram, which is an exploration guys, wow, we got to go drilling there because oxide mineralization at a gram is actually really good. A lot of the open pit oxide projects working in Nevada today are 0.5 gram or less as an average grade. So when you see those type of grades, it's something you do want to follow up on. So there's -- there's a lot of other opportunities in our portfolio that we haven't fully been taking advantage of. Our most advanced projects in our portfolio [indiscernible] conversion must be a different power point. So I apologize for how the work -- some of the words are over top, just the conversion, I guess, different computers. Granite Creek is our most advanced project. It was the one where we targeted providing our first feasibility study in late 2023. And we didn't achieve that goal again, made primarily because of difficult financial conditions in the market that limited our ability to complete the drilling that was necessary to get there. As you can see, a lot of our resource is inferred, and we need to upgrade that. We did do an underground drilling campaign. You can see some of the results here up to 21.9 meters at 31 grams extremely high-grade mineralization. It sits immediately on strike from the Turquoise Ridge operation. Turquoise Ridge, as you can see just to the north is one of the largest gold deposits ever discovered in the United States, and it is, I believe, the third-largest producing complex for Nevada Gold mine in the state. And we discovered a zone called the South Pacific zone or have delineated in the zone called the South Pacific zone just north of where the historic work was done. It is really, we believe, the future of this operation. And that's where the drill campaign will just started ramping up with 4 drill rigs here that will be going basically for the balance of this year to not only infill and increase our M&I resource measured and indicated, but also look at stepping out. The deposit is completely open at depth and a long strike. Our northernmost hole we drilled in 2022, which is still our Northernmost hole, with 15.7 gram intercept over 6.6 meters. Our deepest intercepts, which were drilled early in 2023 we're up to 15.5 grams over 19.7 meters. This is world-class grades in a world-class mining camp. And this year, we look to expand on that given our improved financial position. But to put it in a perspective, this project is the first that we're looking to move or transition from exploration to development to what we hope to be a full production decision on the back of a full feasibility. And if you look at our preliminary models that we're doing on that mine plan as we advance the feasibility work, the one you see on the left on this slide here, Slide 13, is what the mine plan would have looked like in the feasibility study in 2023. If you jump forward -- and we only did a limited program in 2024. You can see the difference in scale, especially as -- when it comes to adding the South Pacific zone. And this year, we hope to make that footprint even larger and complete all of the engineering required to release the 43-101 compliant resource. And we're targeting about a 3x increase or expansion of the M&I resources here with the current drill program. Cove is, I guess, near and geared by heart. We've had it for 12, 13 years. We've been working on this project, put our first holes in, had some great exploration success. Steve was involved in that, and at the back. We turned it into what is now almost 1.7 million ounces of gold in all categories at nearly 11 grams. Truly one of the higher-grade advanced stage gold projects in all of North America. We did put in the underground Phase 1 underground infrastructure that you can see in the image in the middle. A few of us, including my wife, we stand there in the initial blast when we're opening up that portal, and it was nice to see a project after I think 13 years go from the first drill holes to where it is today. And we have 2 drill rings now defining that deposit to move forward with the full feasibility. Our goal is to release that feasibility study in 2025. So we are now moving forward with the plan to elevate our projects on an expedited basis based on our improved balance sheet. The advanced stage project drilling we've done. This is an image you see, the primary image on this slide. The green is what's being completed, the white are the holes that we're going to be drilling over the balance of this year and probably into 2025 as we complete the full definition of this deposit. But in addition to the known deposits, there's significant exploration upside. We've made new discoveries. We have a polymetallic discovery that we did when Barrick was working with us here. It created 5-gram -- 5.1 grams gold, 410 grams silver and nearly 11% led zinc that has yet to be followed up. So there's a lot of upside in this project, not just it's a 1.7 million ounce deposit, and that's it. And that deposit is open. So you can see our last step-out holes in the image where it says open are significant high-grade mineralization. So the upside here is substantial, and we do intend to do some step-out drilling from underground once we get to the tail end of the definition of this project. Our flagship asset is Ruby Hill mill, mainly because it is our largest resource, and it has such optionality for the company. The project is host to oxide gold mineralization. As I said earlier, one of the largest deposit is in red here, the Mineral Point project. It's a silver, gold oxide deposit that was drilled off by Barrick but wasn't constructed. And in terms of scale, it would be fairly similar to the scale of what Greenstone is. We also have the Ruby Deeps deposit. Ruby Deeps is a refractory gold deposit that sits underneath the Archimedes pit. Also underneath the Archimedes pit is Blackjack. That's a scaring zinc deposit. Just south of that is Hilltop and further south fab, which are CRD polymetallic deposits. So it's a really remarkable project in the fact that there's all of these styles of mineralization is essentially sitting right on top of each other. And we believe that somewhere in this area is a large porphyry center that is the heat engine or feeds the mineralization here. And if we're lucky, we'll get to do some extra exploration this year, and maybe we'll be successful at delineating where that [pour free] source is because right now, we have lead, zinc, silver, gold and we started to get a little bit of copper at the end of our mineralization. So adding copper to this project would just add another opportunity here. And we will be doing a step-out drilling and expansion of the area that we believe some of this mineralization exists. The longer-term plan that was developed, Ruby Hill is our third -- actually, we expect it to be our second operation in Nevada. The infrastructure are almost identical to what we have at Cove in the lower image you see here on Slide 17 is to put the portals in the pit. It reduces how much spiraling down you have to do or ramping down, you have to do to depth. So it reduces your cost of building an operation, you're closer to the deposit. But when you look at this, the larger image here, it has Blackjack and Ruby Deeps, this is a refractory gold deposit sitting right beside a skarn zinc deposit. So this development will allow access to base metals and gold. And that was the reason we had a significant amount of interest in this project and have chosen that perhaps one of the best paths forward here is to work with a partner to develop the project who is mostly interested in the base metal, where we continue to be -- well, I guess, we're interested in both. But gold is an important part of our business. The deposits are completely open for expansion. The Southmost hole we drilled in the East Hilltop discovery. That discovery was made less than 12 months ago, was 114-meter intercept of 9.5% zinc contained within that was 13.6 meters of 17.7 zinc, 0.4 copper and 10 grams gold. This is the area where we're tending to see a potential transition of zinc skarn to copper skarn and that is something that definitely warrants additional work on in the ensuing year. But we're also advancing this project for our long-term development plan of setting up the 3 operations. The slide you see here on Slide 18 is the work we're doing. A lot of this is internal, but we do have a consulting group. We work with on a lot of our planning at what does the gold operation look like? And these are some of the preliminary mine designs for Ruby Deeps coming out of the pit and accessing multiple high-grade zones. We've completed also on the base metal. We've done significant work on the metallurgy. We just recently received the final metallurgical results for all of the polymetallic deposits and we're working on when are we going to publish a resource for the multiple deposits we have done. At mineral point, we are planning to a little bit of work this year. That's the large open pit project, getting a better understanding of silver recoveries as part of a future. I think in our 10-year plan, we envision that mineral point will be an important part of that and working through hydrology and long-term permitting of that project. The polymetallic zones are one of the reasons we acquired this project. The -- as we are really looking for a refractory gold deposit, which was Ruby Deep, when we did our due diligence on this project, we -- well, Barrick had identified a very high-grade skarn zinc deposit right below the pit and they didn't develop it. And we felt that because this region is more of a base metal region, if you look at its 150-year history that, that's something that Homestake and Barrick did not pursue. They did very little work if it wasn't just for gold. And we've had significant success in our first grassroots exploration program. We discovered in our first hole, we discovered the CRD zone. And our second hole was a step-out that discovered another lens that's not what we call the Upper Hill top zone. And we started stepping out, we found East Hill top, and we discovered what's likely the extension of lower Hilltop further to the west in this image . This horizon or this fault structure is brand -- we brand newly identified it in mid-2022. So just I guess, about 20 months ago now, and it is completely open for expansion. -- between us and fan, which is about 2 kilometers to the south, this CRD system under alluvial cover is essentially untested. So it's a huge exploration target here. And at the right time, we will look to embark on more exploration here. The fab project was acquired by the company in 2023. We did complete drilling. This is, in my belief, 1 of the highest-grade polymetallic deposits you'll find anywhere in the world right now. If you look at 1 of the more recent mines put into production in the world was Adriatic, a polymetallic mine in [indiscernible] and if you look at the grades of FAD and what we're doing at Telecom, I'd argue that you'll see that when we publish resources, our grades are likely to be higher. This deposit remains wide open for expansion. It's the down dip extension of 1 of the largest mines -- historic mines in this district. And though we don't intend to focus on that in 2024, it is truly a significant upside opportunity in our company. So going forward, we're in a much better position than we were saying when I was at the podium last year, last year, I think. -- sorry language. How do we get to keep this ship going. Tough markets. We're slowing projects down rather than speeding things up. And I look at this graph, and I'm going to end here is how does this company achieve success? One is converting our resources to reserves. That's going to be a very important part of our 2024 work. Delivering technical studies to enhance our financing options. When you don't have feasibility studies, getting a debt financing to build a mine is not there. So as we elevate the engineering work on these projects, it will just enhance our financing options going forward, and that will allow us to deliver on our long-term production growth plan. I think we need to better message and execute a concise plan and how we're going to achieve the company's goals. I like saying, "Oh, look at that drill hole, it's wide open", but we need to convert that into mine success. So my final point of this year's presentation is how do we turn exploration success into operational excellence. And I thank everybody for attending this year. And I don't know if we're taking questions or are we -- take a couple from the room if there are any. And if not, is -- every year, let's do that way and we'll go for refreshments.

Ewan, I just wanted to confirm or maybe clarify what I heard on a recent podcast that you did, where you were asked when the company will have a positive cash flow. And the response was, well, it will be after the Ruby Hill Base Metals is up and running and maybe '26 or '27. Is that correct or?

As a business, it's going to be several years. So right now, we believe that the first project of ours that will generate positive cash flow as a project is expected to be Granite Creek. But the cash flow that we realized from that portion of our business will not build Cove and Ruby Hill and [indiscernible]. So as a company to be truly cash flow positive, when we're publishing right now, we give no guidance, but we expect to in the future once we start delivering feasibility study is at that point, when we've got all of the technical studies upgraded, then we'll be able to give better clarity on when we expect to become a cash flow positive company. But we are -- as we are still termed as a developer, not a miner and that development will continue over the next several years.

I was just wondering -- I don't want to preach to the quire because you all know what is exactly you have to do. But since we mentioned there are 4 projects, and each of them are big and each of them are [swallowing] a lot of money. So to me, I get you are the darling of the market those days. And all of us have [indiscernible] because when the investment banker sees that you are [swallowing] so much money, it has become afraid to the investment bankers. So I was just wondering, since you were mentioning Ruby Hill is almost like a green hard rock project, 5 million ounces. Why not is it possible to just develop that project and leave everything on care of maintenance, and then you will get lots of money and then you can start doing it so that you don't spend so much money and then become free to the investment bankers?