Imperial Metals Corporation (III) Earnings Call Transcript & Summary

Hello, and welcome to the Annual and Special Meeting of Shareholders of Imperial Metals Corporation. Please note that today's meeting is being recorded. If you participate in today's meeting and disclose personal information, you will be deemed to consent to the recording, transfer and use of same. If you disclose personal information of another person in today's meeting, you will be deemed to represent and warrant to Computershare and the company that you first obtained all required consents for the disclosure, recording, transfer and use of such personal information from all appropriate persons before your disclosure. [Operator Instructions] It is now my pleasure to turn today's meeting over to Larry Moeller, Director and Chairman of Imperial Metals Corporation. Mr. Moeller, the floor is yours.

Thank you. Good afternoon. My name is Larry Moeller, Director and Chair of Imperial Metals Corporation, and I will chair the business of today's meeting. I welcome you to the company's Annual and Special Meeting of Shareholders. We are pleased to host the meeting through this virtual meeting platform, accessible to all our shareholders regardless of physical location to participate, submit questions and vote. The polls will close after the vote has been called for the last motion, so we encourage you to vote now if you have not already done so. I'm joined today by Brian Kynoch, Director and President; Darb Dhillon, Chief Financial Officer; as well as Sophie Hsia, Chief Legal Officer and Corporate Secretary. I will now proceed with the formal business of the meeting, followed by a presentation, after which we will accommodate questions. I officially call the meeting to order and appoint Sophie Hsia to act as Secretary of the meeting. For the purposes of this meeting, I appoint Computershare through its representatives to act as scrutineer of the meeting to compute the votes of the polls taken at this meeting and to report to the Chair. Only registered shareholders who hold shares in their name as of April 4, 2025, the record date of this meeting or their validly appointed proxy holders are entitled to vote at this meeting. Those that are not registered shareholders or duly appointed proxy holders are not able to vote at this meeting. If you have questions about the matters before this meeting [Operator Instructions]. I would ask you to limit your questions to those matters directly relating to the specific matters being considered and we'll respond to any other questions at a later time. Note that after the formal portion of this meeting, there will be an opportunity for questions. I will now commence the formal business of the meeting. The business of the meeting is described in the Management Information Circular dated April 4, 2025, which accompanied the notice of meeting. We will conduct the votes on the matters before us by a poll. On a poll, every shareholder entitled to vote on the matter has 1 vote in respect of each share entitled to be voted on the matter and held by that shareholder. You may vote online any time during this meeting until I announce the polls are closed. The final voting results will be available on SEDAR+ and Imperial's website. The notice calling this meeting and the other required materials were mailed to shareholders of the company on April 11, 2025. These documents and the proof of service is retained with the records of this meeting. A quorum is present. I have before me a preliminary scrutineers' report indicating that 62 shareholders have voted, representing 43,580,430 common shares of the company by proxy, representing approximately 26.9% of the issued and outstanding common shares of the company. I therefore declare that a quorum of shareholders as required under the company's articles is present and that the meeting is regularly called and properly constituted for the transaction of business. The last Annual General Meeting of the company was held on May 22, 2024, and I direct that the reading of the minutes of that meeting be dispensed with and that the minutes be approved as if read. Darb, are there any questions on that matter?

None at this time.

Thank you. The next item of business is the presentation of the annual consolidated financial statements of the company as at December 31, 2024, together with the report of the auditors. The consolidated financial statements, together with the related management's discussion and analysis were mailed to shareholders who had requested a copy and are available on SEDAR+ and Imperial's website. Darb, are there any questions on this matter?

None at this time.

I declare that the financial statements of the company for the financial year ended December 31, 2024, and the auditor report thereon have been received. We'll now proceed with the election of directors for the ensuing year. The following people have been recommended by management as nominees, Carolyn D. Anglin, Pierre Lebel, Janine North, Edward A. Yurkowski, J. Brian Kynoch, Larry G. Moeller and James P. Veitch. These people have been recommended by management as nominees for election as directors to hold office until the next Annual Meeting of Shareholders or until their successors are duly elected or appointed. Given that the company has adopted an advanced notice policy, and the company has not received notice of any nominations pursuant to such policy, I declare the nominations closed. Darb, are there any questions on this matter?

None at this time.

As Chair, I propose the following motion, the 7 nominees to whom I have referred be elected as the directors of the company to hold office until the next Annual General Meeting of Shareholders or until their successors are duly elected or appointed unless the office is earlier vacated. The next item of business is the appointment of auditors. Deloitte LLP, the current auditor of the company is proposed as auditor of the company to hold office until the next Annual General Meeting of Shareholders. As Chair, I propose the following motion: That Deloitte LLP be appointed auditor of the company until the close of the next Annual General Meeting of Shareholders and that the directors be authorized to fix the auditor's remuneration. Darb, are there any questions on this matter?

None at this time.

The next item of business is to approve all unallocated stock options. As Chair, I propose the following motion: That all unallocated stock options under the amended and restated stock option plan 2007 of the company be approved, the wording of which resolution is set out on Page 27 of the Management Information Circular dated April 4, 2025. Darb, are there any questions on this matter?

None at this time.

There being no questions, I declare the polls now closed for the approval of all matters before this meeting. Based on the interim scrutineers' report, I have been advised by the scrutineer that the majority of the proxies deposited for the meeting have been voted in favor of each of the foregoing resolutions at that meeting. I would ask that the scrutineer compile the final report regarding the results of voting on all business matters, and results will be published by the company on SEDAR+ and by news release. I direct that the results be included with the minutes of this meeting. If you have any questions, you can submit them now. Imperial knows of no other matter to properly come before the meeting, therefore, as Chair, I propose the following motion: That the meeting be terminated. Darb, are there any questions on this matter?

None at this time.

Seeing no questions received, I declare the motion carried. Thank you for your attendance. I now turn the meeting over to Brian Kynoch for his presentation.

Thank you, Larry. Good afternoon, and thank all of you for attending our Annual General Meeting. And we have a presentation today, update you on our major projects with a focus on Mount Polley. And as noted before, there'll be a chance to answer -- ask questions after I finish this. Just so you know -- the photo on this slide is dawn at the top of the Phase 5 pushback. Next slide. So I'd like to note that some of my comments may contain forward-looking statements, which are uncertain, and the actual results may differ from those that I express today. On this slide here, we've got a slide of all our projects in BC, and we're a BC focused company. We have 3 mines, 2 of which are operating, 1 on care and maintenance. We also have about 23 exploration projects in BC, a number of which have historic resources. And we will be conducting small exploration programs in many of these this year, including a drill hole in each of the Pelican and Bronson properties located in the heart of BC's Golden Triangle. Might some excitement there if we run into some gold there. But the exploration, you'll see later, I'll be talking about it's going to be focused at Mount Polley. With an operating mine, we can turn exploration success into cash flow more quickly than we can on a greenfield project. This slide is the quarterly production slide. A couple of things I'm going to highlight. One of them, last year, I said, and we continue to be impressed by the metallurgical performance of the deeper Phase 4 pit ore. It exceeds what we thought we were going to get out of that ore, it's really good milling ore. Secondly, at Mount Polley, you'll note that we're up over 19,000 tonnes a calendar day now. And this year, we'll be working hard to get back to the historic. Historically, we were able to get a maximum of about 20,000 tonnes per day. So we're getting close, we'll keep pushing and get it up to that. I think the other big thing to note at Mount Polley, if you look in our quarterly information. Our cash cost to produce a pound of copper was negative. The gold production at the prices these days pays our operating costs. Go to the next one. This is the photo of the Springer phase -- this is both Phase 4 and Phase 5. You see I got a little arrows pointing to them. And now actually, the Cariboo and the Springer pit merged into 1 large pit. But on this slide, you'll see down in the center at the bottom, that's Phase 4, it's nearing the end of its life. You can see we're getting down, it's getting relatively small at the bottom of that cone. So that will end at about September this year. Down there, it's virtually all ore now. There's very little waste coming out of the bottom of the pit. If you go up on to the right-hand side, I got a little arrow to -- through a drill there, you can just see it, that -- pretty close to where that photo was taken. You could see the beginnings of the Phase 5 pushback. Now that Phase 5 pushback goes from there all the way down to and below the elevation of the end of Phase 4 and that pushback -- the Phase 5 pushback is largely to the east and north. So we're pushing this big, combined Cariboo-Springer pit to the east and to the north. And when we come to the next phase after the 6th, it will be a push mainly to the south and the west. Phase 5 is actually producing some ore now and it's actually Cariboo pit ore as the ramp into Phase 5 goes down through the east wall of the Cariboo pit. And I guess the other big thing there, much of the non-mineralized rock from Phase 5 coming off the top there is being hauled down to the TSF to buttress the dam. Exploration. So exploration is actually underway right now at Mount Polley. And as I said, that will be the focus of our effort in 2025. The zone we're focusing on in the -- since we started this year is called the C2. And you'll see it on this slide. It's immediately -- it's immediately south of the Cariboo pit. And you'll see there's a little divot there, a little, small C2 pit. So the C2 has provided ore historically, but very little. Like the Cariboo and the WX zones, gold values in the C2 exceed the copper value. Also in this zone, a lot of the copper mineralization near the surface, is highly oxidized and so we get low copper recovery. So the C2 zone is driven by gold and gold prices. So with the current gold price, it's a good place to go look if you want some more gold. So right now, we're drilling gaps in the historic drilling, kind of almost right in the -- just to the south of the small historic pit there and headed down to where, I don't know, the C is in C2 on that slide. So we're filling in gaps in the historic drilling. And then with the idea that we can get an expanded pit in that area. And we're also, and I'm going to show you on the next slide, targeting a higher-grade zone at depth. Now the higher-grade zone is higher grade and not oxidized. So it looks like it'd be really good ore. In addition to that, we're going to do a little bit of exploration drilling way to the north at Mount Polley in an area we've never drilled before following up on geophysics and other basic geology that we've been doing over the last 5 or 6 years. And this is the deeper zone I was talking about. So it's a deep target in the C2 area. And this zone given the grades, and you can see some of them there. Like the first hole we drilled there was actually in 2011, you see -- anyway, if you dig it out, you'll be able to see C2-11-97. It was 57 meters of over 1% copper and over 2 grams per tonne gold. So quite deep, probably not open pit-able but very good grades. Last year, we drilled a couple more holes there, 127 meters of 0.72 and 1.4 grams per tonne gold. Another hole, 64 meters of 0.72% copper and 0.99 grams per tonne gold. At any rate, great grades, should be good metallurgy, We haven't tested it yet, but it's not oxidized. And we have the history. We have mined underground at Mount Polley before in the boundary zone. So it's not a completely new concept. And as I say, with today's gold price, it's a target worth going after. Next slide. The next 2 slides kind of go together, and I put 2 slides together about the historic annual gold and copper production at Mount Polley. And a couple of points. One, Mount Polley has now produced over 1 million ounces of gold in its history since 1997. And the second thing, and it fits into this thing about different deposits at Mount Polley have quite different copper and gold grades. And so they're highly -- the gold and copper production is highly variable. And if you look on this graph and you look at the 1998 to 2000 period, the average production was about 100,000 ounces of gold a year and 30 million pounds of copper, which you'll see on the next one. If you look at 2006 -- or yes, 2007, '08, '09, that's about 30 million pounds of copper. So we go to the next one. And you'll see in those early years, about 30 million pounds of copper. And then in the low gold production year, 55 million pounds of copper. And so the second period there was the White pit, when we mined the White pit. So as we go to different places at Mount Polley, you can get a different ratio of value between gold and copper. That's looking in the C2 for gold. Go to the next one. This is Red Chris production. So Red Chris had a good Q1 production too on good grades. You can see grades up substantially from last year, especially the gold grade. And 2025 should be a good year for Red Chris, Newmont guidance being 88 million pounds of copper compared to 85 million pounds in 2024. And for gold, 86,000 ounces of gold compared to 59,000 ounces of gold. So given the current gold price, 2025 is a great year to be producing more gold. Go to the next slide. And the block cave at Red Chris is the big thing at Red Chris and the Newmont guys put this model together. And I thought I'd put it on here just to give everyone who doesn't know kind of a little bit more idea about what a block cave is. So this slide shows the process then. It's an underground method where you actually -- you get access to the bottom first, and you actually mine it from the bottom-up rather than top-down. So you go to the bottom, you establish a level underneath, you establish draw points, and you open it up, and the rock mass actually breaks up under its own weight, you don't need to drill and blast. The rock is then extracted from the draw points. You can see there the scoop trim, getting rock out of a draw point and then we convey it to surface. And one big thing to note here is conveying to surface, we're moving all that rock to the mill with electricity rather than trucking it with diesel. So you get a low carbon footprint mine when you do it this way. And we'll talk about it a little bit later, but much of this access decline is completed. Quite a bit of the ventilation -- I think 2 of the ventilation raises are done, and they're working on the conveyor galleries in the advanced development work that's been authorized. Go to the next one. So one of the -- this one shows where the East Ridge deposit that's discovered over, I guess, the last 5 years as well. So it's another deposit. It looks similar to the main East zone at Red Chris. And I guess the thing there at Newcrest in March 2023, has created an exploration target where they estimated what they're targeting in the East Ridge and that was between 400 million and 500 million tonnes containing something like 4 billion to 6 billion -- or 4 billion to 5 billion pounds of copper and 5 million to 6 million ounces of gold. Any rate, another big deposit there, and that one is not included yet on the mineral resource statements and we're hopeful that this year, it will be included -- well, it will be next year. When Newmont next updates the reserve resource statement, we're hoping that they'll have a resource statement for the East Ridge. Slides outlining the progress that's being made on the Red Chris block cave project. So a total of 11,300 meters of underground development. 7,500 of that in the Nagha is the access decline and the conveyors is conveyor gallery. And right now, they're doing about 110 meters a month and plan to do that through Q1 of 2026. And you see another raise bore for another ventilation raise in Q4. The other progress a batch plants, some more lodging and working on permitting the block cave at Red Chris. And so we're hoping the block cave, the feasibility study for the block cave and the permits required for the block cave will come by the end of the year. One more slide. We've taken off -- taken on a fair amount of debt over the last 5 years and just did this slide to show that we've spent all that money on the Red Chris block cave mine exploration or restarting Mount Polley. And now we've actually spent more than we borrowed on those 3 projects. Anyway, we've been putting the funds we borrowed to good use. And then one kind of final slide here -- or a couple of words before we do the question period. So as I said last year, I still think copper is going to be needed in massive amounts if we're going to decarbonize the world's economy. And we're in a great position with 30% of Red Chris, Mount Polley and Huckleberry, all of which can produce copper. The gold -- and then we also have the gold price increase this year that have benefited both Red Chris and Mount Polley as at those 2 mines, gold is a significant part of the revenues. In fact the last time I looked at that same history of Mount Polley, the production when I did it in terms of dollars, Mount Polley was basically 50-50 over its life, half its revenues from gold, half of its revenue from copper. And it also -- it builds even -- it's even more important to the block cave where gold production in the block cave will be more significant than it is in the current open pit operation. So thank you all again for attending, and I'll take questions if you have. Okay. If there's no questions, thanks so much for attending. Appreciate it.

Thanks, Brian. I call the meeting to a close. Bye.

Bye.

This concludes the meeting. You may now disconnect.