K92 Mining Inc. (KNT) Earnings Call Transcript & Summary

Thank you for standing by. This is the conference operator. Welcome to the K92 Updated Kora Resource and Maiden Judd Resource Conference Call. [Operator Instructions] and the conference is being recorded. [Operator Instructions] I would now like to turn the conference over to David Medilek, Vice President, Business Development and Investor Relations. Please go ahead.

Thank you, operator, and thanks, everyone, for attending K92 Mining's updated Kora resource and maiden Judd resource estimate conference call. We hope you and your families are doing well. In addition to myself, we have on the line John Lewins, Chief Executive Officer and Director. I would also like to remind everyone that after the remarks from management, the call will be followed by a Q&A session. As we will be making forward-looking statements during the call, please refer to the forward-looking and cautionary statements on Page 2 of the resource estimate presentation, which can be found on our website at k92mining.com. Additional risk disclosure statements are also found in our MD&A. Also, please bear in mind that all dollar amounts mentioned in the conference call are in United States dollars unless otherwise noted. Now I'll turn the presentation over to John.

Thanks, David. We're obviously very excited to be presenting our updated resource estimate for Kora and maiden resource estimate for Judd. It's a major milestone for K92 and sets us up well going forward. In the presentation, I'm going to cover 5 areas: the resource estimate highlights, Kora deposit updated resource estimate overview, Judd deposit maiden resource estimate overview, production expansion plans and resource growth and then close with questions and hopefully answers. So as I mentioned, we're very pleased with the outcome of the resource estimate on so many levels. Firstly, we exceeded our measured and indicated target of 2 million ounces for the -- which feeds into the Stage 3 definitive feasibility study, reporting 2.3 million ounces, a strong grade of 9.29 grams per tonne on a combined Kora and Judd basis. Measured and indicated increase of about 110% from the April 2020 resource estimate and important to remember that this is net of 18 months in depletion, where we've mined 182,000 ounces at 16.33 gram per tonne from Kora as gold equivalent and 25,000 ounces at 12.2 grams per tonne gold equivalent from Judd and almost entirely from measured and indicated. We add those ounces back in and 2.5 million ounces, 9.8 gram per tonne gold equivalent. Secondly, the inferred resource continues to be very significant with a combined Kora and Judd resource, 2.6 million ounces at a very solid rate 9.05 gram per tonne gold equivalent. Important to remember that our conversion of inferred to measured and indicated historically has been very high. Thirdly, high grade at both Kora and Judd is [ extensive ]. We'll go over the grade tonnage curves and tables later in the presentation, but I've given a preview here that illustrates the high-grade operational flexibility of both deposits. And we'll certainly look to leverage that in the upcoming economic studies. Fourth point, over 4 years of mining, that significantly reduced the resource and mining risk. Previous resources have delivered a positive reconciliation largely on grade. The updated Kora resource depletion versus actual shows a 7% positive reconciliation, very encouraging going forward. I think it's also important to note the updated resource was estimated by the same consultant that we've used for the last 2 resources updating some of the parameters and only slightly refining them. Fifth point. With extensive exploration upside potential, both deposits are open in multiple directions. And after 18 months of infill drilling for the updated resource, drilling will now focus far more on resource growth. Drilling is currently underway at Kora, Kora South, Judd, Judd South and also the Blue Lake porphyry. Kainantu is a world-class asset with a world-class resource. Later in the presentation, we'll present a peer analysis completed by BMO of the plus 5 million-ounce gold equivalent systems that show K92 ranks among some of the best in the world. So before we start to present the individual resources for Kora and Judd, we provide a consolidated basis resource table for your reference. For the first time, measured and indicated they are almost equal to inferred. In addition to Kora and Judd, we've also got the Irumafimpa deposit, which currently isn't being mined, however, will be at some point in the future. In terms of where these deposits are situated, looking to the -- this is looking to the West long section. You can see Irumafimpa which is to the north on the right side. It's a low sulfidation system that quite abruptly transitions into a intermediate sulfidation system, which is Kora. And then you've got Judd running subparallel to Kora and to the east of it. So now moving on to discuss specifically the Kora deposit and its resource estimate. So we'll start by perhaps giving some background on the deposit. We've been mining Kora since October 2017, and we've established a strong understanding of the deposit through extensive underground development plus production still being from both cut and fill and long hole stoping. Deposit is an intermediate sulfidation system with the resourcing, including K1, K2 and Kora Link, although there are also additional veins such as K3 and K2 hanging wall that require further drilling. The deposit is high grade and importantly, has the right ingredients for successful underground mining. [ Some ] vertical solid thickness, high continuity, efficient access, competent ground conditions and to date has delivered a positive reconciliation versus the previous resource models of over 10%. Importantly, from a metallurgical perspective, we've seen recoveries of over 92% booked for both gold and copper and potential to take it up to 95% at a relatively [ close ] kind of just over a 100-micron. And using flotation, we are producing a high-grade, high-quality [ topical ] concentrate. We've just commissioned our gravity circuit. We're now producing [indiscernible] as well, and that will also be incorporated into the into the new plant with about 10% to 30% of our gold expected to be recovered through gravity. Looking at the operational performance, you can see that all those positive factors have translated into strong production results. Even with the headwinds from the COVID-19 pandemic, we've continued to grow production and reinvest cash flows to expand the operation. As noted earlier, Kora has consistently delivered a positive reconciliation just about every quarter, and that's largely driven by grade. This is the third resource estimate that's been completed by Simon Tear of H&S Consultants. And in each estimate, the resource assumptions have been slightly refined from the last estimate. The geological model is based on the 3D wire frame of the 0.1 to 0.2 gram per tonne cutoff and a minimum mining width to 5.2 meters, Ordinary Kriging interpolation method. Classification, search parameters are largely unchanged, except the [ ex rate ] is for the inferred, which was increased from 8 to 12 meters. Based on additional data, top cutting was increased from Kora Link to 400-gram per tonne from 150 grams per tonne and density reduced by 3% for K2 and for Kora Link and 5% for waste. Cutoff for the resource has been changed to 1.75 grams per tonne from the previous 1 gram per tonne, and that's to better align it with our long-term economic cutoff grades. The updated resource estimate has an effective date of 31st of October 2021, measured and indicated and now standing at 2.1 million ounces at 9.20 gram per tonne, which is an increase of about 90% from the prior Kora resource. Inferred remains a significant 2.5 million ounces at 9.5 gram per tonne gold equivalent. We're certainly pleased with the high grades in all confidence categories. And as previously mentioned, we've had a very high historical conversion of inferred to measured. In terms of those the Kora resource, mineral load wire frames, the left image is a long section, middle image is a cross section and the right image is a plan [ for ] [ you ] the geological wire frames created for plot modeling purposes. You can see K1 there, the Cayan and K2 blue have extensive strike and vertical extents defined by our drilling and underground development, some 1 kilometer in each direction. In terms of resource confidence category, long sections, both K1 and K2 are shown here. And with the block colors corresponding as follows. So red is your measured indicated is green and cyan is your inferred focus. As I previously mentioned, the infill drilling program was to upgrade inferred to measured and indicated, and that's really focused on about a 350 to 400-meter vertical extent centered around our existing development and about a kilometer long strike. This K1 is closer to the drill drive than K2. You've got tighter drill spacing, which obviously results in a greater portion of the resource being measured. This slide shows the cutoff grade versus ounces and tonnage curves for measured and indicated on the left, inferred on the right. Important highlights, I think a cutoff grade increase. There's a significant drop-off in tonnage with a significant increase in grade but only a moderate reduction in the overall ounces. This is not typical for most deposits. In fact, it's obviously an attractive feature is telling us as we increase our cutoff grade Kora remains substantial in size as a large proportion of the resource is underpinned by a very high-grade core. So presenting this in a tabular form. You can see that just a small increase in the cutoff grade from 1.75 to 2.5 gram per tonne increases the grade by approximately 20%, but reduces the ounces by less than 10%. If we move to a 5-gram cutoff grade increases to over 0.5 ounce per tonne, but still with a substantial 1.5 million ounces of measured and indicated, 1.6 million ounces of inferred. This implies that Kora has significant potential for operational flexibility to access high-grade mining areas. And visually, we'll show this over the next couple of slides. So here, if you look at the long sections of K1 and K2 are well mineralized, kilometer vertically kilometer long strike. When we drill Kora, we're essentially grid drilling a vein system as essentially all of our drill holes into [ seg ] mineralization, and that's evidenced by the resource covering such a large area. The Long section also shows very large discrete areas of high grade that you can see there. The extensive high-grade areas imply significant long-term operational flexibility, as previously mentioned from mine design and planning purposes. And again, it's open along strike and a dip. The next slide, we're showing a cross-section of the Kora resource looking north [indiscernible] about 160 meters vertically and includes K1, K2 and the Kora Link veins. In the area where these 3 are present, there's a potential for bulk mining, and this is something that we're going to be looking at as part of our Stage 3 definitive study. Now moving on to the Judd deposit and maiden resource estimate. The Judd deposit is located 150, 200 meters east of Kora. It's very similar in geology and it's high grades. Resources based on the J1 vein, [ but ] at least 3 other veins, which are known, and that will require additional drilling. Judd is a recent addition to our mine plan. Long-hole stoping commenced in fourth quarter of last year and has performed well very competent geo-tech, solid thickness, high continuity and high efficiency in drill and blast. Largest single blast was completed here last quarter with over 4,000 tonnes. Very efficient to access because we're leveraging Kora's infrastructure to access. So only limited waste development. Metallurgically, performs very, very similar to what we see in Kora. And so co-mingling at the plant is not an issue. So maiden Judd resource estimate given its similarities to geology at Kora has taken a very similar approach, employing a 3D wire frame 0.1 to 0.2 gram per tonne cutoff, minimal mining with 5.2 meters, Ordinary Kriging as the interpolation method and same search parameters for measured, indicated and inferred as Kora. Top cut of 40-gram per tonne has been applied and a slightly lower density 2.71. Maiden resource estimate, 130,000 ounces, 11-gram per tonne for the measured and indicated, 180,000 ounces, 5.6 for the inferred, both at a 1.75 grams per tonne cut off. Effective date 31st of December 2021. And as we -- as I think we've mentioned previously, we only pivoted from Kora to Judd in Q4. So Judd is based on a pretty limited amount of drilling data and only covers an area with a vertical extent of 100 meters to a maximum of 700 meters and a maximum strike of 700 meters. So area-wise, less than 20% of what we have drilled at Kora at this point. Deposit, however, is open in all directions and a major exploration focus going forward with the majority of our underground drilling rigs targeting Judd this year. In terms of the Judd resource model, load wire frames, left image is a long section, middle image cross action, right image is a plan view of the geological wire frames. As you can see from the long section, drilling is concentrated around the existing development due to the time constraints. And with an effective resource state of 31st of December, we didn't have sufficient time to complete significant step-out drilling, which, of course, we've now got planned for this year or to follow up on the high-grade areas as we saw them which are highlighted here in the 2 red [ ovals ]. So as mentioned, this is going to be a major focus of our drilling going forward. As you'd expect, the measured and indicated is very proximal upto the 2 underground sublevel developments at Judd that then surrounded by your inferred. I think like Kora, at Judd, we observed very favorable grade versus ounces and tonnage curves for both measured and indicated and inferred, where as a cutoff grade increases, so significant drop-off in tonnage, a significant increase in grade but only moderate reduction in total ounces. And so this implies like Kora, there's operational flexibility to access high-grade mining areas, which were similar to leverage. And presenting that in the tabular form, I think particularly impressive for the measured and indicated 5-gram per tonne the grade increase is 67% from 11 to 18.35 while total allowances reduced only 15%. Inferred resource still requires a lot of drilling, particularly up and down the high grade development. On the left is a long section of J1, 1.75 grams per tonne cut off. And on the right, we've got it at 5-gram tonne cutoff. So you can see Judd like Kora has discrete high-grade areas, and we'll certainly plan to leverage our mining plan to exploit these exploration that Judd is still very much early days and great potential in every direction. Looking at Judd in cross section, on the right, over 120 meters vertically, you can see considerable continuity of grade. Stoping at Judd, as I mentioned, commenced in Q4 2021. And performed very, very well today as shown [ on ] the 2 images. Stope dimension, relatively large, 40-meter strike, 30-meter height, 4.5 to 5 meters and obviously, as you can see there, held up very well. So looking at production expansion and resource growth opportunities. The Kora resource and the update on the maiden Judd resources certainly [ set ] can end to up well for the next 2 stages of production, while also providing high-grade large resource base to expand through exploration. So we now move on to looking at some of that potential. Firstly, on production expansion, we achieved Stage 2 run rate in Q4 2021, and we plan to expand again in 2022 with Stage 2a, increasing throughput, 25% to 500,000 tonnes per annum, and we expect to achieve that in late in the third quarter, early fourth quarter of 2022. In terms of Stage 3, the updated Kora and Judd resource estimates will provide the basis for the DFS, which is through the first half of 2022, and we're looking to increase our throughput as to 1.2 million tonnes per annum. And we're pleased with the updated resource estimate, which exceeded our $2 million ounce goal for measured and indicated. Importantly, we will also be completing an updated PEA which we'll look to bring in the inferred resource and show the potential that, that provides. Stage 3, the twin incline is well advanced. The first incline at 933 meters as of the end of January. And after some COVID-related travel and other restrictions were lifted in the second quarter 2021, advance -- our advance rates have tracked at or above budget. To an incline, as many would be aware, significantly over side simply because we don't know how big these deposits will ultimately be. And we're really just scratching the surface here. So the twin inclines have been designed to handle initially up to 3 million tonnes per annum using trucking, but an ability to go up to in excess of 5 million tonnes with the conveyor system. Looking at our high-priority near mine targets. And this slide, you'll see actually incorporates some of the results from our recent aerial geophysics. So proximal to underground infrastructure, there are multiple high-grade targets, being near mine infrastructure, tremendous advantages. Targets can be explored at low cost and discoveries can be quickly translated into a positive impact both in mine production and cash flow. As an example of Judd, we discovered the high-grade underground in Q4 2020 and develop 2 sublevels and a year later, first long-hole stopes before we even had a resource. This discovery has opened up entirely new production, which definitely gives our operation greater flexibility in the fourth quarter, and we'll do so going forward. And as I've mentioned previously, we're currently drilling at Kora, Kora South, Judd and Judd South. We also plan to commence drilling Kora deep in the second half of the year from the twin incline as it gets into position. From the Kora, Kora South long section that you can see here, I would say there are several key takeaways. Firstly, Kora is open at depth. The deepest drill hole continue to show a well mineralized system. And as we develop our twin incline at the 900 level near the bottom of the resource, that will provide us an excellent platform to extend the resource into the second half of the year. Kora is wide open to the south with 1 kilometer strike length towards the A1 porphyry. A1, we believe, is the main heat source and is feeding multiple vein systems. Our very first drill hole at Kora South from surface, which was the first ever drilled in the target, delivered very strong results, high grades and solid thicknesses from K1, K2 and K3 veins. 1 to 2-meter massive sulfide veins in K1 and K2 grading over 20% copper and quite exciting, a dilatant zone incorporating K2, K3 35.9 meters at 5.98 gram per tonne gold equivalent. And that's the widest intersection we've seen at Kora. So from this long section, you can see there is a very strong potential for resource growth. Now looking at the long section for Judd and Judd South, very similar story to Kora and Kora South. The main difference is that Judd is 3 years behind where we are at Kora. Recall that Kora North was first drilled in May 2017, whereas the Judd high-grade drilled from underground fourth quarter 2020. We view Judd as highly prospective and plan for the majority of our underground drilling to be focused on in 2022. Judd South runs parallel to Kora South and is projected on surface all the way to A1 porphyry, so another kilometer and like Kora had never been drilled until the first results we reported last week. And the results were outstanding. High grades were reported in both Tier 1 and Tier 2 veins. And as you may recall, the maiden Judd resource is only on the J1 vein. Secondly, discovery of a dilatant zone. And this is approximately 150 meters to the size of previous historic drilling near the surface, a major, major positive. Over 66 meters at just over 5-gram per tonne gold equivalent. This is the widest hole ever recorded at Kainantu. And while this is still very much early days, the dilating zones at both at both Judd and Kora have the potential to significantly increase and give us something of a step change in terms of both the Kora and Judd resources. This slide shows us a cross-section from the first 2 holes drilled at Kora South and Judd South. As you can see, with dilating zones are punctuated by high-grade veins with the bonus of having mineralization between the veins. Hole KUDD0001 also encountered a previously unknown vein [indiscernible] 30 meters depth, 75 meters east of Judd, recording 3.45 meters and 10.36 gram per tonne gold equivalent. Drilling has never been conducted this far to the east of Judd before and our program has been designed to test this potentially new an system, both from surface and from underground. At Kora South and Judd South, there's 1 rig operating currently. We're about to add a second rig, and we're also looking to add a third rig. Looking at the lay of the land at Kora South and Judd South. I think it's important to highlight the very strong vectors on surface, including historical working [indiscernible] crops on both pains extending towards the [ lithocap ] with the A1 porphyry, which makes us particularly excited by the potential in this area. So in addition to drilling, we recently completed an advanced mobile MT deep penetrating airborne geophysics program, which was completed in Q4, and that's delivered some really, really promising results. It's the first major geophysical program flowing for over 10 years, and I think it's the biggest impact in Papua New Guinea for about 20 years. A highlight from the results is the high conductivity zone that extends from Kora and Judd along Kora South, Judd South and beyond the A1 porphyry for several kilometers and show on the map and long section along the high conductivity zone on the bottom right. Previously, vein exploration was focused west of A1 and this opens up kilometers to the east of the highly prospective terrain. The geophysics also correlated well with known deposits and connected bodies and also identified multiple new vein and porphyry targets on all of our licenses. These new targets will be presented and named in due course. I think it's also important to highlight the higher perspective porphyry potential at Kainantu drilling as many would be aware, as Blue Light porphyry continues, leveraging the new information from the geophysics program as well now. The geophysics program [ actually ] on the previous slide shows that Blue Lake is among the most potential district of porphyries, but there are others and there are indications potentially certainly some of these are all linked. So I'd like to wrap up the presentation with a slide courtesy of BMO Capital Markets, which looked at the relative position of Kainantu globally after the mineral resource update BMO [indiscernible] companies is primary listed in North America, Australia or European stock exchanges and focused on large plus 5 million-ounce gold equivalent assets at high grade, defined as over 6.5 grams per tonne gold equivalent for underground and over 3 grams per tonne for open pit. Based on this analysis its remarkable how rare these deposits are with only 10 underground projects in total and most of them owned by senior mining companies. Amongst these deposits, Kainantu is the third highest grade underground deposit. It's also important to note, I think, that Kainantu has the lowest cutoff grade of the underground projects, as shown earlier, I think in the presentation, the grade tonnage curve grade increases significantly in Kainantu as cut-off grade increases with only moderate reduction in the total ounces. So with that, I'd like to thank you and now turn it over to the operator for the Q&A session.

[Operator Instructions] Our first question is from Ovais Habib with Scotiabank. Our next question is from Alex Terentiew with Stifel.

Yes. So look, great to see news out last week and this week. Good to see you guys making some great progress here. So I've got a whole bunch of questions. I'll just ask 1 or 2 and then I'll jump off and circle back in. But just to start, on the Judd resource, the M&I grade is as good or better than Kora. But I just wanted to ask on the inferred resource, I know very limited drilling so far, only 180,000 ounces, but the grade is there 5.66 grams per tonne gold equivalent. What's driving that lower grade? Is it just drill spacing, just the total number of holes? Or are you seeing something different there?

Well, good morning. Thanks for the question. Look, I think the reality is that we've got a very limited number of holes right now in Judd. We -- as I think everyone is aware, we -- the focus really for the last 18 months, 2 years has been ramping up the measured and indicated in -- primarily in Kora for the feasibility study. And Judd came very late in the piece. We have -- I mean, we've got 6 rigs underground drilling right now [indiscernible] and I think for about the last 6 months, we've had 6 weeks having ramped it up from 2 originally. And when you look at the number of holes, I think -- we've done over 500 holes in Kora, but in Judd, we've done, I think now we're up to about 60 holes. I think we've reported about 40 holes. So it's less than 10% of the drilling. We do think that Judd is probably more variable than Kora, but that's an opinion rather than, let's say, a fact based on a lot of drilling. And the other thing is that we think we can see specific trends where you get higher grade. And the reality is that we've sort of recognized that from the drilling that we've done, and we have an [indiscernible] case that higher grade because we've been very much applying the same criteria, the same methods we have at Kora, wejust basically drill out on the grid pattern. And so where we think, for instance, there is a high-grade shoot, if you like. We actually haven't drilled a lot of it. It's evident from drilling, but we haven't chased it per se. And in fact, it turns out the drilling that we've done, if anything, has avoided those areas, and that's just because we're drilling a grid pattern. So I guess our expectation is that overall, as we do more drilling, we'll bring the inferred up the same as we did at Kora. Originally, Kora's inferred was significantly lower than the measured and indicated. And certainly, the 2 holes that we've drilled going south have probably reinforced that view. And the historical holes which were up at the surface, which actually don't come into the resource, although we could have actually put a resource around the surface holes also reinforce that view. I hope that answers your question.

Yes. No, it does. Just 1 more question before I jump off. So given that resource drilling is really just starting off you're at Judd, and you guys last week identified some very interesting hold these dilatant zones. I mean what's -- how should we think about that with the upcoming PEA? Is there a chance where you guys considering doing a kind of another resource uptake to be included in that, especially given how you talked about this the dilatant zones, how thick they are? Maybe there's an opportunity for these to be I wouldn't necessary say a game changer, but quite significant to the projects. Do you want to incorporate those in the PEA? Or how do you plan on going forward.

At this point in time, the PEA will just be based on the results we just released. We do expect to do an updated resource on both Judd and Kora in about a year's time. And we -- right now, I think we've got 7 rigs drilling, 6 underground 1 on the surface. We should have a second rig up on the surface in Kora South next week. And then we're actually busy planning for a third rig to go up on the surface as well at Kora South. So by second quarter, we should have about 9 rigs operating, 6 of those underground. One of those underground will also be drilling what we would call Kora South from underground. We are -- should be by next month, we will have 1 of the rigs in most [ suddenly ] drill [ cuddy ], which I'll actually be drilling out -- outside of the mining lease and below where we've drilled from surface. So at this point in time, we anticipate sort of this time next year, we'll have an updated resource on both Judd and Kora. And we'll be -- yes, we'll have to figure out what we do with that. Do we put it into an updated PEA or whatever. And I guess, that will probably be the case.

Our next question is from Don DeMarco with National Bank Financial.

A couple of questions. First off, at Kora. So the M&I copper grades are 50%. And we saw that the recent Kora South drilling is showing some copper intercepts that are exceeding 20%. So can you comment on the copper grade trends, both for this infill drilling at Kora that step out drilling to [indiscernible] to Kora South? And talk about maybe where you expect the heat sources might be? And whether we would expect this trend of copper grades to increase with step-out drilling?

Okay. Thanks, Don. Look, I mean, we've always said as you go south, it appears that the copper grades are picking up. The other point being that K1 has always been where we've mined primarily in the northern part of it. K1 tends to be lower in copper and K2 is higher in copper. So if you look at the very first hole we ever drilled, which was KMDB888, it was over 10 grams per tonne gold and almost 1% copper. Meanwhile, the -- then that was K2. Meanwhile, K1 that we went through there before it picked up grade, but you're running at about 0.3% -- 0.2%, 0.3% copper. As we go south, we do see overall a trend in higher copper. And if you look at the original inferred resource at Kora, which was sort of 700 meters -- 500 to 700 meters to the south of where we put that first hole in. The historical original resource at Kora was running at 2.1% copper. So -- and that was still the south. We've only drilled really 1 hole so far into Kora to the South. And obviously, the copper has picked up more. So it really reinforces our view that the copper grades appear to pick up going to the South, both in K1 and in K2 and potentially there in K3 as well. The view has always been, and I think our initial results from drilling to the south and our geophysics that we just recently flown really reinforce the idea that the A1 porphyry is the heat source for Kora and potentially for Maniape and Arakompa as well. And I think that we showed that in the release, and obviously, you saw it in the presentation. And it's also sort of indicating that maybe there's a larger system. And in fact, that even Blue Lake is part of that larger system. But certainly, right now, our view from the geophysics and from the recent drilling is that A1 headwater is the heat source. And obviously, as you move towards the heat source, your expectation is to see higher copper.

Okay. Great. And certainly, the copper was important in offsetting the gold grades easing a little bit in the Kora M&I. So can you talk about that too? I think, the ease to maybe 7.6 grams per tonne from 9 plus. Was that partly a function of the depletion? Or was there other factors involved there, too?

Yes. Look, if you look at the M&I and you put back in the ounces that we took out from -- and I'm talking specifically Kora and not Judd, you go up to about 9.8 grams per tonne, and that is driven primarily by -- sorry, gold equivalent, and that is driven by the higher the higher grades that we mined in gold from that area and that we mined significantly more K1 than K2. So again, that would also drive an increase, if you like, a slight increase in the copper grades as well because you've depleted more of K1 than K2. And so you've depleted gold higher grades and you've depleted copper, lower grades. Okay. So that's certainly a driving factor.

Okay. Got it. That's good. And maybe just a final quick question. For the PEA that's coming up, what throughput rate would you consider?

Yes. Look, the base is 1.2 million tonnes per annum because that's obviously what's going into the feasibility study. That forms the base, and then we're looking at whether or not within that context, it drives bringing back in to operation the existing plant. So the feasibility study is based on a brand-new 1.2 million tonne per annum plant. We [ would see ] existing plants, which currently is 400,000 tonnes per annum, but well [ short ] be a 500,000 tonne per annum capacity. That goes on care and maintenance. Certainly, in the PEA, we'll look at whether that's justified to bring that back into production after the first couple of years of 1.2 million. But right now, we haven't got a view on that because we're not far enough into the PEA. We're busy doing the feasibility study, mine design right now.

Our next question is from Craig Stanley with Raymond James.

First off, the [ host ] rock. Does it extend to the east side of A1?

Yes.

Any work been done over that way?

No, nothing.

Okay. Secondly, you talked about netting out the actual mining depletion from these resource estimates. So for Judd, that was around 25,000 ounces. I assume was that all taken then in Q4. So that means you guys reported production of 36,000 ounces. So 25,000 of that was then from Judd?

Plus or minus 60%, I think, was taken in Q4 and the rest of it was Q2, Q3 as we develop the 2, the 1,235 and 1265 [ drives ]. So when we talk that grade, that grade is obviously the diluted grade and the drives we're going through it 5, 5.5 meters. Whereas the stopes as you would see from the photograph in the presentation, we've taken out at around 3.5, 4 meters. Stopes obviously came out at higher grade than the [ drivers ], which were diluted.

My last question is surface drilling the [ exploration ] license, so just south of the mining license where you reported those first 2 results last week. Are there any plans to turn the rigs around and come out those some of the veins from the opposite direction? Because they are steeply dip.

The reality is that 1 hole goes -- yes, the [indiscernible] what we've seen certainly from that hole where we picked up another vein 75 meters to the east of Kora is that there is still potential for parallel or sub-parallel vein systems. We see that certainly 400 meters off to the west [indiscernible] Karempe. And in drilling Karempe, we saw that there were a number of parallel vein systems. So in fact, the plan in the future is to drill Karempe for instance, from underground and to develop out towards it. And that development itself by going perpendicular to the strike of Kora and Judd becomes an exploration, if you like, development in that it potentially goes through other parallel vein systems. So there have been a couple of holes that were drilled originally at Kora from surface that actually did drill from different directions. And we've also got people up on the ground doing mapping and all the rest of it, but there is quite a strange enough, it's a mountain, but there is a lot of cover up there as well. So you don't necessarily get [ outcrop ] that you might expect because it's not a rocky style of mountain, if you like. This is the [ topics ] and therefore, there's been a lot of one's a lot of cover. So drilling kicks up things that you don't expect which is great. And what it does show is there is the -- and that's why the aerial geophysics is so important because it does show you corridors that you should be targeting, which is what we are doing in. And those corridors also quite clearly show you Maniape and Arakompa, for instance, off to the east and that structure going off to the East. So they are going to be focus points for us going forward, no 2 ways about it.

Our next question is from Andrew Mikitchook with BMO Capital Markets.

Congratulations, John, and to you and your team. Just 2 quick questions. Number one, to what degree does your infill drilling experience shown that you're able to expand or better define areas of higher grade? And can we infer whether this can be -- or could this then extrapolate into the large areas of inferred on the K1, K2 veins that haven't seen anything near the denseness of drilling required to get to M&I potentially regain or define maybe more accurately define more [ access ].

Yes, good question. This is very much a work in progress, although it's 500 [indiscernible] holes and counting, I think. We do think that there is -- that we can see the higher grade trends. And for instance, with the twin incline coming in at the 900 RL or thereabouts and coming in under Irumafimpa. Certainly, some of our guys have a view that there's a high-grade zone that actually goes down and trends down from south to north and that trend potentially goes down underneath Irumafimpa. And that whole area has obviously never been tested. And so there is, we think, some very good potential to extend Kora to the north [indiscernible] that's in part based on interpretation that we do have higher-grade shoots, if you like, that generally trend from south to north -- south of surface north [indiscernible] but it is still a work in progress. And the same thing with Judd, as I mentioned earlier. We think we're seeing the same sort of trend, but as you know, with the geology, once you get an IV in your head, you can start you can start generating information that supports your view. And so we're quite cognizant of that and not trying to sort of fit it into, if you like, an idea that, that is the case. But certainly, I think most of our guys believe that we do see some higher grade trends. And would argue that they have been able to at predict a given hole would be higher grade than another hole. Although often, of course, we say after the event rather than before the event, I knew that was going to be a high-grade hole and that wasn't going to be a high grade. But I think overall, we're reasonably confident that, yes, there are the high-grade and the low-grade zones and that we can -- we're starting to see a picture there.

Okay. And then my second question is just trying to extend today's resource into the upcoming feasibility. The mineable shape optimizer was run at looking at these footnotes here, 5.5 grams on the PEA. Is that at all -- sorry, that's gold equivalent, 5.5 grams. Is that at all apples-to-apples with the cutoffs you put in your tables this morning? Or is even that benchmark of 5.5 grams to be significantly reviewed here for the feasibility?

The feasibility study is not being set up on a 5.5. The feasibility study is establishing its own criteria in that area.

So we shouldn't use 5.5 as a starting point. That's not what people should be expecting?

No.

Could it be a redone and entirely new mine plan?

Absolutely. I mean one of the things that we said when we did the original PEA at 1 million tonnes per annum was it dropped out. It dropped out 4 million tonnes at around 4 grams per tonne that actually made you money, but in the original PEA, you're being driven by simple financial criteria of maximizing NPV 5, and that doesn't necessarily optimize your mining of deposit. And so we would look at bringing that to account, and that's certainly something that we're doing in the feasibility study. I think it's important to remember in the feasibility study that you can only focus on the measured and indicated in the ideal world, of course, we have drilled out the entire non deposit, which we think is actually a small part of what potentially the deposit is, but we would have drilled out the entire 5 million ounces of measured and indicated and put that into the feasibility study. We can't do that. Well, we could but we'd be sitting here for another couple of years, waiting to complete a feasibility study. And we wouldn't be optimizing the financial performance of the deposit because we would at the current throughput rate while we drilled and drilled and drilled and drilled and quite frankly, we could be drilling here for the next 20 years. We come up with now here is the optimized view of what we should do and would have waited 10 years or 15 years or whatever the number is of higher throughput. So the nature of the deposit is that it will be developed in stages, that's our view, and that's what we've done to date. We've had Stage 1, we've had Stage 2. We've got Stage 2A [ now ] happening. We've got Stage 3. And we honestly believe that there will be a Stage 4 and probably a Stage 5. And that will be based on extending our drilling. And at no point should you be constraining it by your original views of, for instance, cutoff [ you ] got 1.2 million tonnes per annum is your MSO might be 4, whatever that figure is. You go to 2.5 million, you'll drive it down again because you'll be obviously getting the economies of scale from your underground. And we have built that in to a large degree in our design of the twin incline, which I think is looking more and more at the conservative design that we put in to give ourselves capacity to do a Stage 4, even a Stage 5 and maybe even Stage 6. I think it's starting to show that was the correct decision.

Our next question is from Ralph Profiti with Eight Capital.

I have 2 of them, if I can, John. Firstly, with respect to Stage 3 DFS and the upcoming PEA, and in the context of your commentary on more selective mining, would you see the opportunities are evident earlier in the mine plan for more selectivity later in the mine plan? Or is this something we should think about as an opportunity that's evenly distributed throughout the mine strategy?

Well, I think in relation to the DFS, you're obviously very focused on the 1,200 level and 200 meters basically vertically either side of that because that's where we've been able to focus our drilling from underground in terms of measured and indicated and you're pretty much going to take out that whole area. We are, if anything, looking at the potential within some of those areas, and that was shown in the presentation, where we could be taking out, I think the widest intersection that we've seen is about 26 meters, where it takes in K1, K Link and K2. So there's actually potential within the areas that we've got measured and indicated to actually be taking out quite substantial stopes and part of what we're looking at is the potential to take out that entire zone. So we're certainly not intending to be selective and leaving material behind. Obviously, because we've got development along the entire strike, we do have some ability to look at our planning to make sure that we've got higher grades coming out earlier in the piece, so that we're maximizing NPV. So from that perspective, yes, you have some ability to do some selective mining, if you like. But to date, pretty much we haven't left behind any areas and said, well, they don't meet our criteria. And they don't make sense to mind. They don't make money. Everything that we've done, we've gone along, we're able to mine the entire strike. And of course, we will be -- right now, we're backfilling stopes with waste rock, but we are moving. We will be moving to a paste fill plant has been designed and that will be one of the first things that's going in will actually be the paste fill. So we can be backfilling those stopes. And again, that gives us a little bit more flexibility in our mine scheduling.

Okay. Yes. That's helpful. And my second question, you did in your preamble commentary talk about bulk mining opportunities. And are you looking at sort of a singular operating stope strategy incorporating, say, K1, K2 plus the dilatant zones? How far are we away from that body of work being looked into? And what's your current thinking on that approach?

Well, yes. So right now, our view is primarily long-hole stoping K1, K2 separately. Some areas you may still do cut and fill and then Judd long-hole stoping as well. As I said, there are certainly areas right now we're [indiscernible] looking at in the study is a more bulk mining type opportunity. It's still very early days to the [ safe ]. Obviously, the mining guys are pretty excited by what they've seen, but it's really, really early days. We've only got a couple of holes in there. We do have the third hole which I guess, probably yes. We have not talked about the third hole. It's certainly on people's mind, let's put it that whole bulk mining but it's still really, really early days, especially to the [ size ] [indiscernible] couple of holes. But yes, it's certainly on the radar.

Okay. No, I understand the early nature of what you're saying. So I appreciate your answer, John.

Our next question is from Mike Ferdan with Canaccord Genuity.

Just 1 for me on the inferred grade at Kora. If we normalize the cutoff grades and take a look at the inferred grades, it actually came down quite a bit from the prior resource estimate. Just wondering if you can give any color as to what this was? Was it a function of higher grade material being converted to M&I? Or is there any reinterpretation of existing information?

Yes. Thanks for that, Mike. I think First off, you have converted some of that higher grade material into measured and indicated. So that's certainly an element of what you have I think in addition to that, we have -- we brought in areas to the north which would probably be lower grade that perhaps wasn't in there in the past because you get into the extremity of the deposit. And of course, our whole thing is to drill on a grid basis, especially with the relation to the inferred. So we don't see it as, if you like, an indication of overall reduction in our expectation of the deposit. The reality is that we haven't really extended the resource the toll to the south in this update. We haven't extended core much at all. So therefore, if you like, some of our best potential as we see it is actually going to the south, and we really haven't done anything at all on that in terms of bringing that into the resource. That's certainly going to be the focus together with Judd over the next, yes, a few years. So yes, that would be my -- I think it's a combination that we have taken some of that higher grade that's gone into the measured and indicated we've also pushed the resource a bit to the north, which was always anticipated, quite frankly, to be a lower grade, but it's also about closing off your deposit and understanding your deposit not just chasing grade.

Our next question is from Geordie Mark with Haywood Securities.

I might have missed a few things there. But yes, just coming in and picking up on a few things there, and you mentioned obviously had the dilation of sort of wider zones intersected last week -- presented last week that showed potential for broader cell stoping or some other method. And you're talking about the potential of link zone and come to play for exploiting the resource in the different with at least within the current resource envelope. I mean can you give a sort of an idea at least holistically what the potential strike length of [indiscernible] system you have there that could be exported in maybe a transverse stoping method or something different [indiscernible] redefined including our K1 link in K2? And at least from a sort of a high level point of view, whether the dilatant zone, particularly on Kora, I guess, identified to the South looks similar to what you're seeing at J1 Link, et cetera. Just trying to get an idea of what that intervening material or intervening material that are bound by K1 and K2 to sort of [ handsets ] [indiscernible] last week, it looked like relative to what you see within the deposit already. And I've got a few other questions thereafter.

Okay. Thanks, Geordie. Yes. Look, first off, the K1, K Link, K2 as I think one of the slides in the presentation showed it has a vertical extent that can run into 100 to 200 meters. Strike-wise, it's -- we've picked up K Link over 300 meters. We originally had a K Link1, K Link2, K Link3 and then sort of realized it was a bit more sort of consistent, if you like, that in fact, you just got a K link structure. And when you look at overall, I think it's 5% or 6% of the resources I see in the link structure. So it's not a major part of it, but there is certainly that area where it is pretty consistent. And it does require us to [ look ] very carefully at a wider stoping regime. We need more drilling in it. And it is one of the things that we're going to be focused on in the next 12 to 18 months in the context of Kora is tighter drilling around that link area. And it's the question of dilatant zone to the south is a really, really good question because it's a question we're asking ourselves. The evidence from the core says it looks different from what we see in the linked structure, which is -- which I guess we see as -- when we look at the link structure you've got zones that have opened up and you've had the fluids coming through and providing obviously mineralization. The dilatant zone looks different, bearing in mind that we've gone in out 2 holes, but both of which are actually showing dilatant zone 1 in and around Kora and 1 in and around Judd. So whether they are a continuous feature, whether they are a localized feature is still too early to say. They don't structurally look the same as the link structure. But to be honest, it's really early days. So we can't honestly say that we have a specific view, if you like, that it's a repetition, if you like, of the link zone. Right now, geologically, it looks different. And of course, the copper is an entirely different feature that we don't really see in the link zones. So it's different also from that perspective. And I think there's a photo of some of the copper, some of the [indiscernible] that is in the release, I think we put out last week. And I have to say, when you see it, I literally have just come up to Vancouver after 4 weeks in P&G and obviously, some time on site. When you see that in the core, it's bloody impressive. It really is. And yes, you can't help but get pretty excited when you see it. Gold is worth a lot of money and all the rest of it, but you know [indiscernible] when you see it over meters and meters in core gets you pretty excited.

Very true. Yes, certainly looking at last week's [ stage ] and [ suitable ] data, there seem to be at least 2 populations of geochemical data that showed high copper relationship with high silver and low gold and high gold with the lower parts of copper and they're still good grades, but there seem to be 2 populations of data that you [ could ] see that. Is there a difference? Are you seeing a different geological evolution or multiple overprints to present that high-grade copper, silver in the holes to the south versus what you've seen in the North? It's too early to tell or any information there?

Look, I think it's probably too early to tell. I mean, you're right, there's definitely overprint, definitely. We're talking geology, you can't be definite on anything because we weren't around them. But it certainly looks like there is different events. So you've got that overprinting. Certainly, we interpret that you're getting closer to the source. And a couple of holes at depth as well within Kora within the mining lease we've seen, for instance, evidence of [ bornite ] which, of course, would be suggesting you're getting towards the source and that drilling is as we've gone further south [indiscernible] . So it's not necessarily that you're simply looking at it from the context of going to the site, you're getting closer to the source, and therefore, you've got more copper, which is perhaps a simplistic view, but you may have multiple sources, if you like. I mean, 1 source, but you may have multiple entry points where that mineralization has come in, not simply a long strike, but also coming at depth. And I think it is still early days. I mean we'll look at getting at least a couple of PhD students looking at different aspects of the deposit. And I suspect we could get -- if we get half of those, just we could all be doing some really interesting work on this, yes.

Okay. And maybe just 1 last 1 on the [ holistic ]. Looking at the system holistically now and the drilling has gone in and the extension you see to the south and the potential given from the broader geophysics physical data that you presented. Where are you positioned do you think in terms of when you're looking at the current feasibility and in [ scalability ], as you said, in the 4, 5, maybe 6, in terms of the capacity in place for the drive development you're doing, dominantly up to 3, I guess, but maybe that's going to be revisited 3 million tonne per annum. And in terms of where -- what you can do for plant footprints and not putting yourself in a corner in terms of limiting capacity or capacity growth. Can you speak to that a little bit? And that's it for me.

Okay. Look, I think where we're sitting is we are feeling right now, probably a little bit vindicated. I know a couple of people questioned why we were putting in a 5 x 5.5 and 6 x 6.5 given the resource that we had. I think it's -- I think now that's shown to be the right decision. Ultimately, it may be oversized. But because we've only got a feasibility that's going to look at 1.2 million tonnes per annum. At 1.2 million tonnes per annum, yes, the twin incline is oversized. We've done some very prelim work on it and believe we can get at least 5 million tonnes per annum out of it. So it's got potential to be what 4x at least what we're currently allowed for. So the twin incline, I think, is -- we're pretty happy with where we're sitting in that. We've actually got our first [ raisebore ] scheduled to start late Q3, early Q4, putting in a vent shaft to the south. I think it's going to be about 700 meters, 600 to 700 meters be the biggest [indiscernible] biggest [indiscernible] that's been done in PNG not [ big ] by Canadian or Australian standards, but by PNG standards, it's a fair one. In terms of the plant footprint, important point is where the plant is and where the tailings [ dam ] and the offices and all the rest of it, we're actually in the [ MarkanValley ]. And where we are is around 20 kilometers wide. It's pretty flat. So we've got all the real estate that we need to expand. And in fact, the plant itself, we're looking at right now is a SAG ball configuration with the design such that we can basically add a second ball and push the throughput to double what's right now, so 1.2 being able to double it to 2.4. And that has been one of the criteria that we've put on the plant design as an ability to basically double the throughput. And of course, you've still got it sitting near the existing plant. It will be right next to the existing plant. In terms of other things like tailings dam, there's multiple places where we can put new tailings dams eventually, although the design is that we will be putting 60% plus of our material back underground as paste fill, which obviously reduces the footprint, the environmental footprint of what we're doing. It's a flow plant and gravity plant. So there's no there's no cyanide, it's pretty benign, and yet we get incredibly good recoveries. I mean the metallurgically this stuff is best I've seen certainly in terms of response to flotation/gravity, where we're running right now with sort of 92%, 93% and think with plant design, we can tweak that a little bit more out of it. People often don't sort of focus and recognize these issues. You spend a hell of a lot of money getting your ore out and getting it to surface, but a 1 or 2 percentage point difference on your metallurgy is pretty significant. And for a floor plant to be sitting where we're sitting and an expectation of 92% to 95% recovery is pretty bloody good. So that's an important aspect. But yes, we think we could comfortably get to 5 million with the infrastructure that we're putting in right now and then potentially beyond that.

[Operator Instructions] Our next question is from Alex Terentiew with Stifel.

Sorry, just 1 quick follow-up. Just with COVID these days, obviously, there was a big challenge for everybody, especially you guys in 2021. What are you seeing in country right now? And how is it, if at all, impacting your guys' operations and your ability to execute primarily on the Phase 3 expansion.

Sorry, COVID?

Yes. Just curious if there's any new wave or.

No, I'm only kidding, I'm only kidding, no, no, no. I arrived later than I intended into Vancouver because I got COVID while I was in PNG. And they seem to have this thing they're concerned about you're getting on a plane if you've got a positive PCR so you have to wait until you get a negative one. Look, Omicron is in PNG, and we are currently in an Omicron surge. It's been surprising in many ways to a lot of people that, given we've got a very low vaccination rate in PNG, it's about 3%, within the mine, we're running at about 50% of our people are fully vaxxed and another 17% on top of that, I think, got a single vax So we've been very successfully getting our people vaccinated. We are seeing an increase in COVID right now, and it's not just operationally, but we're seeing it throughout the country, and we expect -- we certainly expected that to be the case. The general view is Omicron surge is going to be going through until the end of March. One of the things I did while I was in PNG was I did the official opening of the COVID isolation facility center that was -- that we built up in Goroka with the provincial government. We're in the Eastern Highlands province Goroka is the capital of the Eastern Highlands, and that's where the mine is. We put PGK 1 million about USD 350,000 into a modification of an interesting facility to make it into an isolation facility. I went up there and did the official opening with the governor. So we are -- a, we're doing our bit in relation to COVID. We've so far put in -- sorry, PGK 2.5 million in to government for COVID mitigation, which is almost $1 million. And we've got a lot of recognition for that within the country. We certainly -- when we gave our guidance, our guidance was quite wide and it was quite wide because we weren't sure what the impact will be of COVID going forward. It certainly appears that COVID hasn't been a serious in PNG as it has in many other countries. And there's a lot of discussion and speculation on why that would be and things like the demographics where you've got a very young population, you've got a population that generally does not -- doesn't have access to pharmaceutical drugs. So therefore, they've got a higher natural resistance to infection. You've also got the prevalence of malaria and therefore, a lot of natural resistance to that sort of thing. All of these things appear to be contributing to the impact perhaps being less than we've seen in Western countries. And of course, the counter to that is that, that may well be also contributing towards the lack of vaccination is that it's not as serious as it has been in many countries. We do believe that it will continue to impact us certainly in the first half of the year. And right now, we still operate in a situation where we basically quarantine anyone before they come to site for a week, and we do testing of them. And once they're they've been in quarantine for a week and negative they can come on to site. Our plan at this point in time is April. We will start easing that dropping it first of all from 7 days to 3 or 4 days and then ultimately dropping out entirely. We've already got our systems in place, let's say, it's about whether or not you have got symptoms rather than saying, if you're positive, then this is what [ we're ] going to do. We're now moving towards that. Okay, do you have symptoms and looking at it, more as it's just one of the other things that you have to manage rather than try and totally keep off site, which we've been able to do very successfully. So we do expect this to have it on site. It is -- in fact, we've got some cases on site right now, but it's something that we believe we can manage, but it will give us hiccups. We certainly expect in the -- especially in the first half of the year, our expectation is that it will give us some issues, and we're just going to have to manage those. You've also got this whole thing of the supply chain, et cetera, et cetera. And we've certainly seen the impact in the supply chain. We just had a new [ TwinlomJumbo ] arrive on site that actually should have been in last quarter. We've got a loader and a truck, I think coming in our crusher for the expansion to 500,000 tonnes per annum has now arrived in country. But again, it's over a month later than it should have been, and it's all part of that supply chain issue. We have had to increase the amount of material stocks that we have on site quite significantly over the last 2 years, just recognizing that there is that impact in the supply chain, and therefore, you need to hold more stock on site. So you've got an impact there as well. I mean I think we increased our stocks by 10% over the last couple of months alone.

Our next question is from Myles Kalai with Agentis Capital.

John, congrats on the milestone and thank you for the color on all the previous questions that have been asked, much appreciated. I'd like to start by confirming I may have missed this [indiscernible] asked previously, should we be expecting a mineral -- an updated resource [ that ] to make that job by the end of the year?

We'll certainly have an update on the resource, I would think probably the first quarter next year.

Okay. And if I may, secondarily, you can provide some additional color on that new vein discovery announced in last [ revisions ] potential implications that have been interpreted to the north itself.

The color was it was a sort of a coppery color in the main part, I think, might which is probably the [ charcoal ] you weren't talking literally, okay. Yes. Yes. Yes. The [ guys ] it's a debate every day on this. And you're drilling up on top of the management and every day, I want to see the follow on what the core looks like, et cetera, et cetera, for hole #3. And what does that mean? We've got 2 holes. We've got dilatant zones in both of those holes, but it is still really, really early days. I think, yes, there's a lot of speculation. There's a lot of excitement certainly in the company because we can obviously see the potential that's there. And it's not evident on a lot of the [ surfing ] because it's got cover. And yes, I think at this point in time, we really look at it as it's early days yet. We need to get that second rig. We need to get the third rig out there. The new vein that we identified 3.45 meters over 10 grams per tonne gold equivalent. Even underground now, we're on the most southern drill [ cuddy ], which is just being finished right now, we're targeting to -- when we're drilling to get through get through Judd and push that 100 meters plus past Judd to really start understanding is it continuity in that vein. So it's -- things like that are getting us to rethink or doing even underground. And surface-wise, yes, we're, as you said, looking second rig, I'm hoping we will have by the end of the month and third rig in the next quarter. So we'll have 3 rigs working up there. So there's a real focus in that core South area to really start putting in the meters and seeing what exactly we've got. So [ early ] days. Color is rosy would be my best.

[Operator Instructions] There are no further questions registered at this time. I would like to turn the conference back over to John Lewins for any closing remarks.

Thank you for that, operator. Look, I guess, takeaways in many ways are, okay, it's an update, who we are at a point in time. It's a pretty good point in time. We've got 2.5 million ounces of measured and indicated another 2.6 million or whatever it is inferred totally in our deposit. So we are happy with where we got to, but we recognize that we're just at a point in time. And the more we drill, the more we know and we have got a heck of a lot of drilling ahead of us, and we're pretty excited by that. We've got a feasibility study that's now going to come out based on the resource. And again, we could sit and wait another 2 years to do the feasibility study, and it would look different to what we're going to do right now. But we've always taken a view that this deposit is -- has got so much potential that you have to develop at stages, and that is -- that's been our approach, and that will continue to be our approach and to do that within the context of, quite frankly, using the cash that we're generating to expand our project. We've been able to do that very successfully, we think, over the last 3 years, and that's where we're going to continue to do. We've got 9 rigs, 10 rigs operating, generating data, and they're going to continue to operate, and if anything, expand. So we got a lot of information that will be continuing to come out from the drill bit, which will be mainly focused over the next couple of years on expansion of resource rather than bringing up more and more measured, indicated. So it's a point in time. I'd say it's early in the story. And many of the people on the call the analysts on the call I would say, have recognized that potential, have written about that potential. And we're starting to see some of the results coming out, which vindicate, I think, the position that many analysts have taken on the deposit on the company. And we're certainly intending to keep delivering. And we really appreciate the interest this morning. And thank you for that. We'll keep doing what we do and hopefully keep delivering to the market. So thanks, everyone.

This concludes today's conference call. You may disconnect your lines. Thank you for participating, and have a pleasant day.