Kinross Gold Corporation (K) Earnings Call Transcript & Summary

Good morning, everyone. Thank you all very much for joining us here today in person and on the webcast. Before we get started, I just have a couple of housekeeping issues to go through. This morning, we will be making forward-looking statements. So I would encourage you to have a look at this slide as well as our accompanying press release that we issued this morning. In terms of our plans for the morning, we'll have an introduction first by Paul Rollinson, President and CEO; and then we'll pass it over to Paul Tomory and his team to go through some of our North American projects and give you a bit of a review and an update on where we stand. So namely Great Bear, Manh Choh and Curlew. We plan to spend just under an hour on the formal presentation, followed by 30 or 40 minutes of Q&A. So ideally, if you could hold your questions to the Q&A session, that would be appreciated just so we can get through all of our material. We'll also stick around at the end for a short period just to address any follow-ups if there are any. So that's it for me. With that, I will turn it over to Paul.

Thanks, Chris. Yes, I'm just going to give a quick welcome. Good to see everyone. Lots of familiar faces. We're pretty excited to have everyone here this morning. This isn't something we've done in a while. So we've got our technical experts here, we've got drill core, we've got sections, and it's a great opportunity to get into that next level of detail. We chose this time because we didn't want to overload the quarter. I know it's a busy time at the quarter. There's a lot to digest, and we thought we'd get in early and try to give you a preemptive look and save time for the quarter. Look, it's really all about the team here today. I'm just here to make an intro. My brief overture here is we've come through a lot this year. Everyone is aware. The company has fundamentally changed from its geographic footprint perspective. We are now largely an Americas company, Alaska to Chile with a world-class asset over in Tasiast in Mauritania, which, of course, as many of you know, Tasiast is coming into some of its best years ever. As we're winding up into the 21k is established, we're going to be over 600,000 ounces, 24k on track for next year. So we're firing on all cylinders. We've got a great balance sheet. We've got good visibility in our organic pipeline out into the next decade. And today, it's all about giving you guys a little bit more insight into that pipeline. We're not happy with our share price. We think we were over-rotated to the negative, and we're going to be double timing on our marketing effort, telling our story and trying to get you guys all back up to speed. So with that, I'll turn it over to Paul to introduce the technical team we've got here today.

All right. Thanks. Good morning, everyone. Just before we get into the introductions, these 3 projects, what they have in common is that, in general, they're probably under understood by the market in general. Obviously, we've talked a lot about Great Bear, a big splash on acquisition. But even so, we think that the potential of the asset is not well recognized by the market. And that's one of the reasons we're here today to really convey our enthusiasm and show you how great we think that this asset will be. And Manh Choh and Curlew on another level, they are just 2 assets we haven't talked a lot about. We're excited about the geology, we're excited about the transformative nature of Manh Choh at Fort Knox's production profile, and we're cautiously encouraged by the prospectivity at Curlew. If we go on to the next slide -- who's got the clicker? We've got a good team here in front of us. Jeremy, to my left here is our VP and General Manager for the Ontario asset. So he's in charge of all aspects of the Great Bear, from the drilling, the project studies, and most importantly, the stakeholder engagement plan. Jeremy spent 4 years up in Alaska running the Fort Knox mine and is also intimately familiar with what we're doing at Manh Choh. Richard heads up our global Brownfield exploration program. There's Richard, and he's been instrumental over the last few years at mine life extensions at Chirano, Kupol our U.S. assets and has been one of the key proponents internally of the Curlew project. Guy Bourassa, he is the Project Director right now on Manh Choh, and has led the engineering work. He previously led the feasibility study and the execution of the Tasiast 12k project, and after that, worked on the Vantage Complex project. Graham Long, up here at the table with me. He's our Global Head of Greenfields exploration and has a long history in Canada, really understands its rocks in Ontario and Quebec, and has been one of the champions internally on the Great Bear asset long before we made the acquisition. And then Nicos, down at the left, heads up our global resource geology function. He is involved with all of our assets and building our resource models and has been taking the lead on putting the Great Bear model together. So welcome to the team, and they will be helping me answer question. I should also mention that in the audience are Ned and Eve right behind. Eve heads up Metallurgy Processing and Ned is our Senior Vice President of Technical Services for Mining and Geology. So let's get on to Great Bear. We were just up there last week. I was telling some people who were walking the site and one thing I can confirm is there are a lot of mosquitoes, black flies and ticks. We walked out to where the portal -- the underground portal that we want to put in starting in a couple of years, and the group of 5 of us walked out with about 12 ticks and one of them even jumped from Luke on to Nicos in the core shed. Fortunately, they're not lime disease-type ticks, but it was fun. So we want to begin with acknowledging the partnership that we're developing with the First Nations. Truly, we are envisaging a partnership here with the Lac Seul and the Wabauskang First Nations, and we've begun early consultation with them. Jeremy spends a lot of time with the 2 respective Chiefs, and we look forward to working with the First Nations and advancing the project. So where are we? I think everybody knows Red Lake. It's just outside of town. It's a 20-minute, half an hour drive from the Principal Hotel, the Tim Hortons is beside it on a good road. As you can see on the map, the power line runs through the property. The power is probably not quite enough to supply what we envision here down the road, but it is more a question of what upgrades needs to be made to both transmission and distribution infrastructure rather than piloting a new power line into the site. Good access, like I said, it's out on the road, heads South to Dryden and connected to the TransCanada there. So there's no issue bringing heavy equipment and other things to site. One other thing I should touch on is the land. One of the big focuses of the study over the next year will be understanding overburden conditions and water and making sure that we don't run in some of the pitfalls that other developers in Northern Ontario have run into. I should also add that the property is under active logging, and there's a couple of operating gravel pits so the land is already disturbed. And in a way, that's a good thing in that some of the area has already been cleared, made it easier to access this site with our exploration and our RC rigs. Geologically, I hope you had a chance to have a look at some of the core out there. We're seeing in the core visible gold, like we really haven't seen anywhere else on any of our projects. For example, last week, we pulled a hole at 600 meters depth that's had 30 meters of visible gold throughout that 30 meter. So really, really impressive. And again, if you haven't had a chance to see it, there's our large diameter metallurgical hole, which wasn't meant to necessarily find gold or VG, but it had some of the most spectacular instances of visible gold that we've pulled there. And truly, every single hole, every single hole that we've put into the deposit has returned gold, and that's also quite remarkable. Key thing is that we have the LP zone, which is the main event here. We're looking at about 11 kilometers of strike length, very attractive. Somewhat analogous to Hemlo, we'll be talking about that a little bit more. That's where we see the potential for a high-grade open pit, meaning 2 to 3 grams, depending on how we adjust the cutoffs. But a really robust open pit at high grade and low cost. And then strong continuing mineralization below that into the LP depths where we envisage a medium tonnage underground mine. And again, very attractive grades. In general, what we're imagining here is 2 to 3 grams out of the open pit, depending on where we picked the cutoff and the pit size, transitioning that into a 6-, 7-, 8-gram underground after that. And we're sizing the mill based on building up a stockpile during the open pit period and then using that to supplement the high-grade feed from the underground. And then just to the south, you can see the Hinge and Limb and associated deposits has more of the classic Red Lake mineralization. That is on the property, which was what's the reason why Great Bear went there to begin with. And even there, we see really good grades and the strong possibility of developing an underground mine. Nicos will talk about the advanced exploration decline we intend to put in, in a couple of years. But the program there will be to target drilling into both the LP and the Hinge and Limb deposits. The other thing that we really like about this asset, and in the last 15 years at Kinross, we really haven't had a true Greenfield project, and this allows us to shape this mine to be a mine of the future. And there's many aspects of that is a really strong collaboration, as I mentioned earlier, with our stakeholders, with our local communities, with the First Nations, but also to aim towards a zero emission mine of the future. So we're looking at different technologies. We're already advancing the discussions with vendors on how we would work on not only underground electrification, but also in the open pit. So it's a real opportunity to get things right, ground up, not just on optimizing the flow sheet, the scope and the ultimate objective of the project, but also how we get there on some of these more future reviewed topics. All right. I'll hand it over to Graham. As I said, Graham has been looking at this project for years and has been really pounding the table for us to take a look at this project for years now. And Graham, over to you on what the setting looks like.

Sure. Thanks, Paul. So we're in the Red Lake Greenstone Belt. And as Paul mentioned, we're 25 kilometers southeast of the town of Red Lake, right along the Highway 105. And basically, the underlying geology is bimodal volcanics. What you see in dark green and light green are the mafic volcanic rocks, Basalt and endocyte; the yellow is the felsic volcanic package; gray is the sediments, and these are all cut by late intrusives pink. These are granitoid type stocks. There are 2 styles of mineralization, and we can't emphasize this enough on the property. There's the Hinge and Limb zone, which are classic Red Lake style mineralization. And then there's the atypical LP Fault Zone, which is a large deformation corridor, and the analog here is the Hemlo-style deposit simply for the reason that it occurs in felsic -- predominantly felsic volcanics, which you can see in yellow and some sediments. That's pretty much it for the project. 4.5 kilometers of the main zone is in the -- of the LP Fault Zone is in the felsic volcanics, and there's lots of strike length to explore, and we'll discuss that a little later on, and we'll go into more details in the next slides.

And Graham, we're quite pleased by the fact that there's not a lot of faulting and diking. It's actually quite homogeneous and predictable, and it's helping us build the model that Nicos will talk about.

That's right.

Okay. So a little bit of an overview on the dimensions of the LP zone. You can see there the 10.8 kilometers of strike length that we have some drill testing on. We anticipate the LP zone extending the full length of the property, so roughly 18 kilometers based on our geophysics data sets. Inside of the dense drilling, we have about 4.6 kilometers really well defined down to about 500 meters. We have 11 drills currently turning on the property, and we're starting to see holes between 500 and 800 meters. What we're encountering with those holes is very consistent with what we find in the above 500 meters. We're hitting the same domains we have modeled just deeper in the system at consistent grades. We do see a lot of visible gold at depth, and I think you've had the opportunity to see some of that core today. So we like the Hemlo analogy for LP. Recall that Hemlo has produced more than 20 million ounces, and the vast majority of that occurred at depths below 500 meters. We like Hemlo as an analogy for LP because, as Graham mentioned, it's hosted in the same felsic volcanic rocks. I spent time working at Hemlo, and I can tell you the geology bears a lot of similarities. We know we have a deep high order structure that acts as the primary fluid conduit. We know that the zone of mineralization occurs at a flexure along that structure, and the ore body manifests itself as a series of wide continuous stacked lenses that are easy to trace. So not red -- traditional Red Lake style at all here. I wanted to highlight a few of our recent intercepts. I won't go through everything here, but this gives you an idea of the extent of our exploration outside of what could be considered a conceptual open pit target. Worth highlighting our BR-537, which intersected 3.6 meters of 18.6 grams, and that's at a depth of below 700 meters in the Yuma area. Some of the holes that Paul was referencing are occurring in the Auro area, so that would be BR-623,BR-624, and we have a couple of others going in there. We don't have assay results for those yet, but what we see is an incredible amount of visible gold occurring at depths around 650 meters.

So Nicos, this gets back into what we're studying here. So we're looking at the open pit, as I said earlier, and we are now very confident that under the open pit, there's another, in effect, replicated zone down below, which we will mine from the underground. And some of the things that we're looking at in the study right now or when do we ramp up that underground mine? Is there an opportunity to mine the open pit and the underground at the same time? And certainly, as we do the deeper drilling that Nicos described, we are absolutely seeing those grades that would support a robust underground mine in the LP depths.

So to date, we have about 55 highly continuous domains modeled through the LP zone. So this is a recent increase. We're working through our geology model update, and our, ultimately, our estimation domain update that will serve for our year-end resource estimate. So we've got 55 of these domains. In any given section, your 20 to 25 domains across strike, these are very continuous stacked systems. So I think the cross section does a good job of depicting that. We're seeing consistent width, 20 meters in some cases. And we're seeing robust grades as we extend deeper below our conceptual open pit target. On the right-hand side there, you can see an example, long section. So that's through our Auro zone that I discussed earlier. You can see the entire average grade of that single bulk domain is coming in at about 3.5 grams of 13 meters of true width. And then within that, we're seeing higher grade plunges. So you can see there, we have 7 grams over 18 meters of width. We're now starting to get a sense of where these plunges are going. We think it's predominantly controlled by folding and it's extending steeply vertical, but to the north. Just an example of some of the visible gold we're seeing, the hole on the left there is the Auro zone hole that we drilled for metallurgical purposes. It's here today. I'd encourage you to take a look at it. And then the Yauro zone hole, intersected 80 grams per tonne over 10 meters. And so those are kind of 2 examples that span the proposed open pit target. And then given the immense potential we're seeing at depth, we're considering driving an exploration decline. So this would occur in 2024. It would serve as drill access for LP at depth. So it would go in on the footwall side at a depth below 500 meters and facilitate dense drilling down to about a kilometer of depth. We would also run a spiral on the Hinge and Limb, and this would allow for infill drilling on Hinge and Limb. Eventually down the road, it could also serve for potential production access.

Let me talk a little bit about our strategy for resource characterization and resource to the market. We've used analogies here with Hemlo. We deliberately picked Hemlo to indicate what we think might be a quantum of total ounces here but it's all drill constrained. So we've got a 200,000 meter program this year. And the goal of that program is to get to a declaration, principally of inferred focus on the open pit with some indications in the underground. We think that number will land in the 4 million to 5 million range, so plus/minus that range depending on how the resource model comes together. That is step 1. As Nicos alluded to, we are drilling at the depths below the open pit that won't yet -- most of that won't yet be at a drill density that we can declare a resource on. There will be some indication of it. That will form the basis of this program here is as we get underground at Hinge and Limb and LP, we then see, as I said, we're using analogies here, a replication of what we see in the LP open pit down below. So you can take -- you can estimate there, but what we think will be in the LP and the Hinge and Limbs in terms of a quantum. But it will take years to build up to that. So that's one of the important things to convey here is that we see tremendous potential in the mineralization here, but it will come out in steps rate limited by our ability to drill and to put in this decline. So the decline is going to be really strategic from the perspective of getting ahead on the underground drilling. So Graham, we'll hand it back to you to talk more about the broader prospectivity.

Sure. So when we're looking at this huge project, we've divided it up into future exploration targets into some broad bins here. So one is definitely the target area where we're concentrating right now. Our 11 drills are doing the down dip extension and infill drilling on the LP Fault Zone that's been delineated itself. Two, are the northwest and southeast extensions of the LP Fault Zone. As we mentioned, Great Bear has delineated or has some indications that it exists 10.8 kilometers in strike length, but there is about 18 kilometers of strike length that still remains to be tested and totally infilled. Three is the hanging wall zone to the felsic volcanics. So this is an area that Great Bear has put a couple of holes down. They have identified a fault zone called the North Fall, and it does have some felsic volcanics in it that does contain low-grade goal. So this is definitely an area of interest to us, and we'll get to that in the future. And then four is the very large basalt package Again, the Red Lake style mineralization that hosts the Hinge and Limb, Arrow and Midwest zones. I'll show you in the next slide some of the detailed geophysics. And the targets are incredible out there. There are so many different targets and the potential to find new Hinge and Limb zones is very, very high. So looking a little closer. This is the photo on the left of BR-85 is a Limb-style mineralization. This is a silica sulfide replacement that does occur in the Red Lake camp. And in this case, this BR-85 ran 9.7 grams per tonne over 20.1 meters. So this is the panel, which is the Limb zone itself, and it's continuous for about a kilometer on strike, and we have indications that exist below 900 meters vertically. And on the right-hand side is the classic Red Lake-style mineralization, cords veins with incredible visible gold. This sample here ran 68.7 grams per tonne over 7 meters. So looking at the plan map and then a section on the right. As I mentioned, the geophysics, the magnetic system, shows the Limb, Hinge and the Southwest zone very clearly. These are tight isoclinal folds, and the hydrothermal fluids have used the weak planes, the contacts between the basalt and the andesites and the sediments as weak planes for fluid migration path. So you can see the Dixie limb zone, again, a kilometer in strike length, it forms the north limb of the fold. The south limb of the zone is the new zone that was discovered called Midwest. And then the Hinge zone is the actual plane cleavage of these tight isoclinal folds. And this can be continued, you can see is interpreted in the MAG when Great Bear tested, one of these areas, they discovered the Arrow zone, which was pretty incredible, 19.3 grams per tonne over 2.1 meters. And there's not a lot of holes in there. So you can see in the interpretation of the MAG, the other targets, there are just so many targets in this large upside potential area. And then if you look on the right-hand side, this gives you a spatial perspective of how the LP zone in the felsic volcanics in yellow sits with relation to the Hinge and Limb areas. There's about 800 meters horizontally between the 2 of them. And you can see here that the Hinge and Limb have been tested down to about 900 meters, and it's open at depth and along strike. And the LP zone itself, the deepest hole is about 850 meters in the gap zone vertically and the upside potential for the down-dip extension is absolutely incredible.

Okay. So getting into immediate activities here, we're advancing the project and we talked about the exploration program. And let me just paint the picture for what we're seeing here. 7, 8, 9 years of high-grade open pit, that's 2 to 3 grams, the reason I hedge down to the 2-gram is because we're actually finding more low grade than we initially thought, which allows us to actually pull more inventory into a pit. So that's not a bad thing to take the grade down to, let's say, comes down closer to puling more gold. Phase 2 is right now very high confidence on an LP bulk tonnage underground at those 5, 6, 7, 8 grams. And then third phase is prospectivity on the property. So we see 3 buckets of production. So 7, 8, 9 years of the open pit at LP, replicate that in an underground at LP with prospectivity beyond, and then as we do our studies right now, we're looking at how do we layer in Hinge and Limb undergrounds, how do we manage the grade profile and ultimately how we look throughput. We're probably -- we've indicated publicly that we're in that 10,000 to 15,000 range. We're probably biasing to the upper end of that range because of the preponderance of low-grade we're now finding in the pit, and it will give us a good amount of flexibility on managing high-grade feed from the pit, stockpiling lower grades, pulling high grades at the same time as from Hinge and Limb, blending up the grade, building up stockpiles, which is why we bias that 15,000 tonne a day as we look at these 3 big buckets of potential. So Jeremy, we'll talk a little bit about what's going on in the ground right now.

Yes. So we set ourselves for 2022 a very ambitious program for 200,000 meters purely diamond drill, and we're so far 83 kilometers into that, in out about the mid-year. We're very comfortable with achieving the other 117. We've ramped up from 6 diamond drills at the beginning of the year to just in the last month 11. So things are going very well there. For the first part of the year, leading up to the fall, we've been purely focusing on LP and building out that inferred maiden resource. Starting in the fall, we'll start to divert some of those drills, but not all, to drilling out some of the inventory to indicate it for the future PFS. Some of the other rigs, though, we'll continue to focus on growing that inferred resource and hitting some of our exploration targets. So things going very well on the ground. The other activity on the ground in addition to those 200 kilometers is 35 kilometers of RC drilling. So these are 2 RC drills dedicated solely to what we're calling grade control drilling. So picture, instead of the 75-ish meters for inferred, this is drilling about 8 to 10 meters apart and drilling out about a quarter's worth of future open pit production. The reason we're doing this is, of course, because it informs what will actually happen when we start mining in a specific area, and that informs our capping strategy, for example, in our resource model. Is this a little early to be doing this type of drilling? Yes. But as we are very confident in building a mine and mining there in the future, we would rather have this information sooner than later. Other activities on the ground revolve around permitting. Of course, with permitting in any jurisdiction, best practices come down to submitting a project description that we stick with, and that is why we're doing the PEA study this year. Second is building the right team, and we are working with a team of experts and consultants who have essentially permitted a lot of the big name mines in Ontario over the past decade. And the third is getting the clock ticking as soon as you can. And with that, with baseline studies comes down to developing about 2 years' worth of baseline data. And so those studies, there's about 8 of them, have already kicked off. We kicked off our last ones in May of this year. So that 2-year time line for the baseline studies, the clock is already ticking there. And of course, the fourth area of getting permitting right is relationships with our First Nations partners. As Paul mentioned, we are partnered with Wabauskang First Nation and Lac Seul First Nation. Before us, Great Bear resources did just an excellent job of establishing good genuine relationships with the 2 nations, and Kinross has continued that since the acquisition. We currently have in place an early exploration agreement or framework, and we'll continue to work with Wabauskang and Lac Seul on an advanced exploration framework, and then ultimately, the larger project framework as well. But both nations are very positive on mining and on us building a mine. As Paul mentioned, I have gotten to know Chief Petiquan and Chief Bull very well. And the question I get most of the time is when can we build a mine together? So they're very positive there. I'll hand it back to Paul to talk about some of the longer-range aspects of the project.

So I talked about the study and sizing the mill. And I'll just want to touch on one of the permitting points here. Ontario is a super friendly place to permit. Virtually every mine that's ever been advanced has been permitted. We just need to make sure we do the work, because on the 1 hand, yes, every mine has been permitted, but we have many examples in Ontario mines that ran into road blocks or delays or CapEx blow out. So we want to make sure we do our work and we do it all early, particularly in the permitting, but also on the test work side. The ore is very clean. We're very confident in the recoveries we're going to be able to get here. And as I mentioned, we're targeting the upper end of the 10,000 to 15,000 tonne a day range. And given the amount of visible gold, we're also looking at a gravity type circuit to get that easy gravity type gold out of it. The conceptual schedule, this is the 1 we get a lot of questions on. I get a lot of pressure from my boss on. And basically, it relates to the schedule. And the way to look at the schedule is twin tracks. There's the technical work stream, which is drilling, resource modeling, metallurgical test work, engineering studies and construction. We have a pretty good handle on that. Kinross has a long history over the last decade of advancing and delivering projects successful. We're very confident in that work stream. The other work stream broadly is the stakeholder management, 1 principally as it relates to advancing the permitting process in Ontario. There's a First Nations agreement. But as Jeremy mentioned, we have an excellent relationship with them. But it's really around the time line of baseline studies, EIA submittals and getting all the many, many things that the Ontario process requires to have in place to advance a permit successfully. What we don't want to have happen is advance down the road and then there's some sort of scope change. And when you look at other projects in Ontario that have gone wrong, it's ultimately because of the scope change or something was changed. It almost resets the process and introduces another 1 or 2 years. So we just want to get that right. We do see a path to schedule acceleration, but we're not -- we don't yet want to say that. We want to do our work on, as I said, the technical and the stakeholder management work streams. But we do see a path to potential schedule compression as we advance Great Bear. So that concludes our commentary on Great Bear here. I hope we're conveying the enthusiasm that we feel for this project. I mean, it's really exciting whenever we get out to site, to have a look at the core to see what's emerging on Nicos' hypotheses around what the resource model will look like. It's exciting as we look to the time line of things we'll be able to release. We're chomping at the bit to get you more information. But obviously, we have limitations on the regulatory side. And so what we're trying to provide here to you is a glimpse of that enthusiasm that we feel internally for this project. So with that, we'll do a bit of a switch. We're going to save questions to the end, and I'll ask Guy and Richard to join us up here. You stay here as we switch to Kinross Alaska. So while Guy and Richard are getting set up, let me just give a context on how we look at Kinross Alaska, and that's a deliberate name. We are now mining the Gilmore deposit. We have commissioned and successfully built again on schedule, under budget the second leach pad, the Barnes Creek leach pad at Fort Knox. The mill has significant idle capacity, and the pit is permitted for tailings. So we have an asset there that can take additional feed. And that's why we brought online the Gil mine, which is a satellite very proximal to Fort Knox. That is going well. We are mining there actively this year, and this was the principal thesis on the acquisition of the Manh Choh deposit is to bring it into Alaska -- into Kinross Alaska. We are planning on finishing -- well, the feasibility study is right in the -- we're now dotting the eyes and crossing the Ts on the FS, and we are going to have more detailed results on the FS with our Q2 numbers, but we thought we'd give you a sneak preview on what we're looking at here. The grade is in good shape. You can see the measured and indicated and the inferred ounce totals. We're still targeting first production in the latter part of 2024 with 4, 4.5 years of mine life, but probably 6.5 years of employment when you look at predevelopment, stripping and mining. The total production contribution is in that range of 60 to 650. Those are produced ounces, and we're targeting initial CapEx, 170 to 190 plus some potential reallocations of what was previously OpEx into CapEx, and we'll provide more detail on that on the quarter. But those would be reallocations. So the big one we're looking at there is on the ore haul, the road haul. That was going to be 100% contracted in the original version of the model. We're now looking at buying those trucks and then contracting out the operations of the ore haul. And what that gets us to for Fort Knox where Kinross Alaska is an average production of 350 to 400, gets it up to be a very solid mine there for a number of years and upping the grade, I mean, as you know, Fort Knox is the lowest grade mine in the portfolio. It ups the grade to 0.45 on a blended basis with a resultant ASIC in the 1,100 to 1,200 range in those 3 principal years. Obviously, Fort Knox continues producing beyond there, but those are the principal years for Manh Choh feed. So in a nutshell, that's what we're looking at for this project. Richard will describe what we're finding in the rocks there and the nature of it.

So geologically, the Manh Choh deposit is purely a metasedimentary types of rock that is being hosted and it's got a series of gold, copper and a lot of sulfides. The good thing is that one of the pits, which is the north pit, is almost oxidized. So we have about 50 meters of complete oxidized material. And then the main pit is the one that is not oxidized. So basically, we are looking at purely metasediment material that has been metamorphose and hosted into skarn projects. That's it, Paul.

All right. Guy Bourassa, over to you.

Okay. So just to locate the project. You can see up on the top, where our Fort Knox gold mine is located to the north of Fairbanks. And the Manh Choh project is down to the right along the Alaska Highway, about 400 kilometers southeast of Fairbanks. Ore will be transported in tandem trailers, as you see in the inset photo. So those are designed, they will be loaded about -- with 50 tonnes of material each and we're going to be running about 60 of those trips per day. In terms of the capital project on this slide, a bit of -- we'll have to modify the Fort Knox mill to allow for the higher grade of the Manh Choh ore, so that means increased use of cyanide. So we have to build up our facilities there for additional cyanide. And commensurate with that will be additional detoxification. So we're going to have to add some detoxification for that cyanide. Project will create about 400 to 600 new jobs. That's both with trucking. The trucking operation will run 24 hours a day, 7 days a week. So you can imagine that -- and a round trip takes a full day for a worker, that's going to be like a 12-hour shift. And at the mine, of course then, a lot more jobs at the mine. Next slide, please. When we get closer to the mine, as you see on the right, along the Alaska highway, for Manh Choh this year and next year, essentially, we've just got to build a road to get there. It's about 18 miles long so 40 kilometers of which we're going to do about half of that this year, subject to getting our permitting. So our permit applications were done last year -- at the end of last year. And we are confident that we will get our permits in July, and we're ready to -- we've about ready to award a contract, so that's being tendered and start the road construction for this year. In Alaska, work stops in the winter time because of the harshness of winter. So there will be a gap in the wintertime. And then next spring, we will start and finalize the construction of the road all the way up to the pit, as well as mobilize the mining contractor probably in end of Q1, early Q2 next year.

We had previously signaled completion of this FS in the latter part of this year. We've advanced it to midyear to take advantage of the construction season in the summer here.

And as you can see in the top picture, there are 2 pits, the 2 relatively small pits at Manh Choh. The top one is the North pit, and then further one to the South, that will be mined first and then the South pit. And the North pit would then be used to store waste material as well. So we'll fill in the North pit as we go along with that. So we're currently -- we've in the process of finalizing the ore haul contract. We've gone out for tender for a second time for firm prices. So we expect to award that shortly after sanction, which we're hoping for the end of this month -- end of July, excuse me. And we're also out for tender for mining contract. We've gone through different studies as to evaluate whether we should self-perform the mining or contract mining. And as part of that analysis, we're going out for tender on the -- we're actually out for tender today for contract mining.

As you all know, I mean, this is a tough time to be doing projects. Inflation has hit particularly major construction projects pretty heavily. We've kept a cap on it here. But I certainly wouldn't want to be entering a $1 billion project into this environment right now, given what we're seeing on inflation. In terms of our global portfolio, where we see the strongest inflation is Brazil and Alaska, and Alaska is really driven by a very tight supply chain as many others ramp up, both resource and infrastructure development in state. A quick snapshot of the mine plan here. Richard talked about the deposit. I think we'll skip over this in the interest of time, but as Richard and Guy said, there's 2 pits that we're going to be mining and trucking to Fort Knox. And lastly, on community development.

Yes. I have the great pleasure of being the General Manager in Alaska for the last 4, 5 years. And a project like this would not be possible without the excellent, excellent reputation that Fort Knox has built. It's the biggest gold mine in Alaska. We're mining there responsibly for the last 25 years. In terms of the land of the land package, it's on Tetlin native land. It's a land package of 675,000 acres. So it's a little bit under Rhode Island in terms of size. And it's a very unique setup in terms of tribal land. The Tetlin tribe owns the surface and subsurface rights there. And so this is very much their project. They were the ones who invited developers onto their land in about 2008, 2009 to start looking for resources and they've found it, and then they were looking for the right partner. So it's a great combination. That's a photo there of Chief Michael Sam and the Tetlin council there who are very, very supportive of the project and have gone to back for us many times. The community, both of the local community of Tok, and then also in Fairbanks, are excited about the job prospects that Paul and Guy both mentioned and the investment in both communities as well.

Okay. And then we'll move on to our last project here. And this is one that, if it weren't for Great Bear, this would be probably the most exciting thing in the company from an exploration point of view. We've had a really good run here on the drill bit for the last 18 months. This is an overhead drone shot of the site. The entire Curlew site fits onto that what you see there. You see the portal near the top of the photo with waste rock out there in front and then office and maintenance facilities, as well as the mine dry in the bottom right. So it's an extremely compact land package. Just to orient you, geographically, you can see in the top left, the Buckhorn Mine, which we ran 1.3 million ounces at 13 grams and then some of the other historic mines in the district. You see the Kettle River mill down at the bottom right, that was a probably 120-kilometer trucking that we did from Buckhorn, and you can see that the Curlew project is more proximal about half the distance away. And you can see some of the historical production. And when you look at the Curlew, the K2 mine, that was operated by Kinross Echo Bay, and you can see the quantum of production there historically. That mine did end in grade. There were open phases of ore. But at the time, gold prices were lower, the grade wasn't quite enough and the Buckhorn mine was being brought on string. This is what we're looking at from a geometry perspective, if you can see it on the top left there, the K2, that was the original mine. There was an underground mining workings there. There's a deposit called Emmanuel Creek that had been mined out. And over on the right is the old K1 mine, which we call the Granny mine, which is the first of the feeder mines to the Kettle River mill. And the hypothesis here is continued mineralization from K2 to K1. What we've done here in the program is we did some surface drilling. We knew that the mineralization continues. So about 1.5 years ago, we approved both the rehab of the old K2 mine access as well as new development to get down into some of the targets that Richard is about to talk about. So we have successfully -- we will be completing that decline in September, we'll demobilize a contractor, but we've advanced a lot of underground mining. We've opened up a lot of ore faces along the way, and we've made several new discoveries, and Richard will talk about those now.

So basically, the Kettle deposit is purely an andesites volcanic material. And in this type of deposit, it is the vein structures, there's very little sulfide and it's like 99% gold. And most of the time, all that you're trying to hit is the veins. And so when we started drilling from surface, we were missing some of the veins. But then when we devoted the ore underground and started putting in a drift, we got closer to the veins. And any time we drill, we hit a lot more veins than we had previously predicted. The stealth area is part of the old K2 mine that was mined some years back. But then drilling on the western side of it, we found out a lot more wider veins than previously mined, which is something of interest and the veins are also becoming a lot more sequential than previously. So that is 1 advantages of drilling from underground, especially for a typical epithermal deposits like we have. For example, the hole that we have shown over there is 6 meters at 20 grams was quite one of these new additional vein target that we picked out during the course of the drilling. The next area is very interesting, the Galaxie vein structures. We actually drill a hole from surface in 2014 and '15 when we're putting a few holes. We went underground, realized that we missed a particular vein by just 12 meters. And so we drilled the vein again and we hit it. We went back to surface to test it. We don't miss it then. We decided to drill all these Galaxie veins from underground. And subsequently, we've been getting a lot more veins that is coming through and the grades are also significantly as high as we expected. And the good thing here is that not have we been able to model the veins well, you predict where you expect the next vein to be and then you put in a hole the minimum deviation that you might get is probably in a few 5 or 10 meters. Then the lower portal, this is also quite interesting. This is on the northern end of the veins that we currently drill in. Interestingly, this structure comes a little towards the paleo surface. And the paleo surface is basically mudstone type. And in fact, some of the holes when you get into the closer, you think probably it's a gas station because of the hydrocarbons. But the good thing is that these hydrocarbons are not carbonaceous hydrocarbons. So is not going the impact on any of the recovery. And what we've also found out is that just underneath of it, we have resumed we call the [ Paramineralized ] zone to the paleo surface. And 4 out of the 10 holes that you drilled into those areas, you will hit quite significant high grade. Now what is happening here is that we're seeing a lot more higher grades from the underground drilling than when we drill the lower portal from Southeast around 2015. K5 has been drilled, but it wasn't part of the old mining. Subsequently, in our current program, we earmarked to drill that in the third quarter. But when we did the drift, which we are calling the Roadrunner Drift, we mapped the drift, we picked in a series of veins that shows that at least there is a continuation of the K5 about 100 meters east of where we're known and towards an area where we have this sand Barracuda target area, which we have driven from surface and pick that. So what it means is that we believe when we get to K5 and start drilling, we will be able to increase the material as opposed to what it used to be there. It's quite an interesting area to drill because of what we've seen in Barracuda and we've seen in the Roadrunner Drift. Apart from the underground targets that we've mentioned. We've also done a series of drilling on the southeast, what we call the Curlew district. And we've been picking a series of these targets. And then also one issue from the first table, you saw that Curlew is not just only a epithermal type deposit. There are a series of various types of deposit. We have the skarn and the magnetite-sulfide like with mine at Buckhorn. So one of the targets that we will be looking at is like a Buckhorn type mineralization within the district. And also, we, geologically, we believe that we are in an area where there's a lot more to find. And we will be able to leverage on the odd infrastructure and what is currently at play. So once we get Curlew itself running, the opportunity to get a lot more of this material is high. The good thing is that here, you will see a series of short strike probably 300 to 500 meters strike ore bodies. But any time you hit these ones, they are quite of higher grade as we've seen that within the area, always you get around 7 to 8 grams. And Paul?

So we'll conclude our presentation here on Curlew, just to say, Richard and I were underground there. And it's really remarkable to walk down the decline to see how many of these veins are faced up in our development headings. So what's our strategy there is to continue drilling, finish the decline and put out a resource at the end of this year. We're targeting a pretty decent number there, somewhere in the total resource in the $800,000 to $1 million range. And then we need to advance permeating works on a potential reopening strategy at the Kettle River mill. So with that, Chris and team will open up for questions. And Chris, what's the format here on the Q&A?

[indiscernible].

Perfect. I'll ask Eve and Ned to come up as well.

Can you go back to Red Lake? And you talked about -- and inflow, a tight RC drill program 35,000 meters. Can you give us a sense of how deep there is that RC program? Is it fleshing out the full 500 meters or less?

Sure. So what we're doing is we're drilling an 8x10-meter grid. And we're drilling down 50 meters. So approximately 5 benches. We have about 20 meters or so of overburden to get through and then we're testing about 5 benches, looking at approximately 1/4 of open pit production to reconcile our resource estimate against.

And the principal objective there is to make sure that the first several years of production that we put into any study are rock-solid. Anita?

So again, on the Dixie project. What is -- so if we go back to the slide with the LP faults, I think you've got 4.6 kilometers that you say is the -- I guess, what you've got good drill density on. But the central zone, how -- what's the extent of that? And what's the drill density that you have right now? And what are you guys targeting before you put it into a reserve category?

Yes, Nicos, you take that again.

Sure. So in the core there, we do have some drilling sub-50 meters, which we're hopeful we'll have a portion of the resource had indicated. The bulk will be inferred, and we're talking about kind of 75-meter centers for that material.

So by -- is that by year-end that you will get that?

That will be by year-end, yes.

By year-end, 75 meters inferred. And I'm looking at it, it looks like about a like 1.5 kilometers in that central zone. Is that the only zone that you're going to be targeting right now?

So we'll target for resource, we'll target an open pit portion in the central area and then as well as an underground portion at LP, which will be dominantly inferred.

Sorry, the pit would be indicated or inferred?

It will be a combination.

Our strategy is to push to a bigger inferred number in the early to give you a perspective of what this could be. And then as we advance through a PFS, we will do the infill on indicated. So our strategy is to paint the picture to what this could be via an inferred and then move to indicated.

Okay. I think you mentioned the First Nations are positive on building a mine, but is there any community consultation? Like my understanding of Red Lake is that there's not a lot of big open pits, it's mostly underground in there?

Yes. So in Red Lake, mostly underground mining, but very pro-mining community and of course, with the provincial government very pro mining as well and pro on development in the north as well. It will be one of the first and largest open pits. So that will be part of the consultation in terms of bringing that to life for folks that they understand, both what that will look like during the mining phase, but also during closure as well.

And then my last question before I pass it off is on Manh Choh. So I'm just taking a look at the prior estimates that we, I guess, got in October of 2020, so 1.5 years or so now. I think you were targeting ASIC of 750 and the mill feed was supposed to be 6-gram per tonne material, which is what's in the press release. So I'm just trying to understand why the all-in sustaining cost went up so materially? And I also see a footnote saying it's at $1,500 per ounce. Now that's the resource. So I'm just wondering what you're going to do to reserve that? I'm assuming those parameters that you've given us are at the reserve.

So the ASIC question, this is blended Fort Knox ASIC. That 750 was Manh Choh segment to ASIC. So because we're blending it in with Fort Knox, this is how we're going to look at it. We look at it as 1 mine. So the ASIC itself for Manh Choh has gone up, but that's not an apples-to-apples number. This is blended Fort Knox ASIC. Your second question remind me was?

I guess I'm trying to get a read through on what you're doing the reserves at if...

Yes. So we've had inflation, and we -- what we're doing right now is if you layer on 2 years of inflation on the $1,200 number, we're looking at something in $,1350 to $1,400 range. We haven't settled on that for sure, but we are likely to go with a higher reserve price at year-end. So let's say you pick $1,400, what we would do for our sites more broadly is the instruction that run the $1,400 pit shell, but don't allow it to pull any more materials. So in other words, keep the 1,400 simply to preserve our reserves.

Okay. But I guess the second question would be then when you're doing the reserves, it's only the operating cost, right, not the sustaining capital that you're including its...

No, no. We do fully loaded reserves. Fully, completely.

Okay, so be on like -- basically on an ASIC basis?

Essentially, yes. We fully load our reserves always.

Sustaining is blowing up more than operating cost right now. So you'd get margin erosion if you didn't ensure that.

That's right.

We do it because it's better for mining.

Yes. And it's a true representation of how much we actually make. We do every single reserve fully loaded. If we could just -- if you don't mind just saying your name and firm before you ask your question, that would be helpful.

Sorry, that was Anita from CIBC.

Jackie Przybylowski from BMO. Paul, I just had a question. You mentioned in the presentation on Great Bear that you see opportunity for scheduled compression. Can you give us a little more color on maybe what the opportunity is there?

So as I said, technically, if you draw a perfect line through the technical work, meaning resource, geology, mine planning, engineering, construction, we can get to 2028. The tougher part is the permitting. And that's going through all the baseline studies that Jeremy talked about, you need 2 years of baseline. And then all the various submittals that have to take place along the way. I mean, we can get into detail on that, but it really is a question around whether or not all the steps can be done to get that permit in time to enable the early construction. So we do see the window on construction. We just want to get comfortable with the permitting. Maybe Jeremy put a little bit more color on that.

Yes. I think the few things that we want to make sure that we get right, to make sure that the straight line on the technical side is also straight on the permitting side, is the baseline study is getting them kicked off as soon as possible, which we've done, maintaining positive relationships with First Nations and making sure they are genuinely collaborating from the beginning. So including things like coming on site to do environmental monitoring, for example. Not changing our minds is the third one. In other words, making sure that we -- the first project description that we submit is the one that we stick with, and that's where it marries up with the technical side of things. The other area of play that we will look for in terms of schedule compression is what can be done before we have the permits with only leases in hand. And if we can do any early civil works, we will -- you better believe that we'll be ready to do it, if we can. So that's another area of schedule compression that we're looking at.

And maybe 1 completely different question for Richard. On Curlew, it looks like because it's so veiny, it looks like it's going to be really difficult to drill a long mine life at least. Can you talk a little bit about what the targets are in terms of like how long a mine life you'd be looking at before you make any kind of decision on that?

So that is why we said that our target is to find a minimum of 1 million ounces inventory because we've been drilling around for some few time, some years ago. And now that we've got the drift in, we have assets to the veins. And as I said, the closer you are in the underground, the better you are able to define a vein and then even the strike extension of these veins. So within the last few years, starting from last year when we started drilling from underground, the understanding of the vein structure, and understanding of the geology is been so high since that the guys on site will always interpret that this drill is going to hit these various types of veins. And the good thing is that we have always come very, very close to it. So the whole target is for us to get that minimum of 1 million ounces, then we'll run the economics. And based on that, we'll also continue the exploration. We will not end exploration in that once it makes money at 1 million ounces. And then also knowing that we have a very nice prospective district. And also we have the infrastructure. So if that first pass make money, then we'll continue the exploration within the distributor and also in the underground veins.

The critical path to having a mind here will also run through permitting, not through the technical work. We will almost certainly have a mineable reserve or resource before we have a permit.

So a couple of questions -- sorry, it's Greg Barnes from TD. On Slide 17, just if you pull it up, there's multiple stacked zones in the LP zone, I think. That was just dozens of them. What defines those?

Nicos?

Yes. So it's a combination of geology and mineralization. So we do have a series of different geologic units that make up that felsic package. What we're doing is making sure that where you have mineralization, it's consistent because there's a lithologic control. And then we're also looking for the context of the mineralization. So if it's a little more brecciated, we want to be sure we're joining up brecciated zones together, right? So we're not mixing populations. But essentially, it's a combination of grade and geology, typical estimation domains.

Is it continuous along the package like this the 4.5 kilometers looks like that across the entire strike line?

Yes. So our video shows it well. We've got 55 domains. There's kind of 20 to 25 in any given cross-section. There are crosscutting shears that control some of the higher grade plunging zones. And we've got those modeled up really nicely now. So kind of offsets and moves around. There's flux shears and bends, but it is consistent across the package for the full. I think we've got it modeled actually for 5.5 kilometers.

And the width of that package is?

It's pretty consistent on the far strike extensions. It does get a little narrower. But certainly, in the core -- in this 4.6 kilometers, we've got some really good with and especially when you get into those flux shears zones or as I mentioned, with the cross-cutting shears, it kind of bulges out, and that's where you get the really nice juicy open pit stuff.

As Nicos has done the preliminary resource work, there's 2 key findings that are emerging, which are both positive. The high-grade core, the high-grade domains are really robust. So this hangs together at very high elevated cutoffs. And as I alluded to earlier, we're picking up more low grade. And so we've been signaling an open pit of 3 grams. It will probably be closer to a 2, but it's not a bad thing because we're pulling a lot more material that was previously either waste or not mined, which would support a higher throughput. So the more the domaining work we do, the more we understand the behavior of the high and the low grades.

So that leads right into the next question then...

Greg, can I -- I just want to take advantage of the video that Nicos mentioned. It's playing in the other room, but there's a link to it in the press release. And Greg, I think you'd really enjoy it because you could actually fly around in it and see the structures that Nicos is talking about. So please make sure you don't miss that.

If you know me, you know I get motion sickness if I do that. So the next question that leads directly into that is the 15,000 tonnes a day seems pretty modest for what you're lighting up here.

Yes. Okay. So there's 2 points on that. One is capital complexity. We have a view that anything more than the 12,000 to 15,000 tonne a day range leads to the introduction of degrees of freedom and capital project management around engineering construction that lend themselves to projects going off track. And look at it. I mean, you look at scope and things blow out at that 15,000 range. So that's reason number one, but it's not the principal reason. The real reason we're targeting that 15,000 tonne a day is to maintain a very high grade, high cash flow, high-margin mine. We don't want to push low grade for the sake of pushing low grade. So with 15,000 tonnes a day, we can run, call it, 2 grams for 8, 9, 10 years, build up a stockpile and then get into the LP here, I'm just looking at it sequentially. And then you have 6, 7, 8, 9 coming out of the mine, blend it with a lower grade stockpile so that your average grade stays in that 2 to 3 range. A 15,000-tonne a day mill at 2 to 2.5 grams is a super high cash flow, super resilient to different moves in the gold cycle. What we don't want to do is go 2025, have a capital blowout or increase the risk of a capital blowout and then maybe get into a cycle where you're at a low gold price. So at 15,000 tonnes a day, it's a super high quality, very high cash flow line. That's the bottom line.

And you're going to be building a huge stockpile then, I assume.

It's going to be a fairly substantial stockpile, Yes. One other point there. We think we can improve that, too, by concurrent Hinge and Limb mining, which is higher grade. So it's not -- it doesn't -- the story doesn't just stop there, and which, of course, we'll build an even bigger stockpile.

Paul, related question. Carey MacRury from Canaccord Genuity. Related question, you talked about a medium tonnage underground operation. What are you thinking there in terms of tonnes potential from the underground?

So we're -- there's 2 underground potential there. There's the more bulked tonnage LP type, which we're looking at 3,000 to 5,000 in that range, 3,000 to 5,000 tonnes a day. And then in the Hinge and Limb, which is more selective Red Lake style, we're probably looking at 500 to 1,000 tonnes a day. In a conceptual plan, we could see ourselves ramping up to between 6,000 and 7,000 tonnes a day out of an underground combined Hinge and Limb and LP. But that would be a gradual ramp up. We don't think it's responsible to say, we're going to do 7,000 tonnes a day from day 1.

And then in terms of stockpile grade, you're thinking something like 1 gram?

Yes. Ned, why don't you take that one?

On stockpile grade, we'll probably stockpile anything above 0.3 grams per tonne, and we'll probably have 2 stockpiles between 0.3 and 0.5 and above 0.5.

Robert Koren from 1832 Asset Management. You haven't mentioned any drilling on the northern fault. I think that could possibly be another repetition of the LP. So I'm just wondering, have you done any drilling on it since the acquisition? Are you planning on doing any drilling? If not, why not?

Graham?

Yes. So Robert, we do plan on drilling that. But right now, we're focused on trying to build the largest inferred category on the LP, the main 4.5 kilometers. Great Bear did do a couple of drill holes out there, and they did hit mineralization, as I mentioned, but it was sub 1 gram per tonne material. So we know the system is auriferous, but we're looking forward to. That's going to be one of the main targets when we probably in Q4 when we dedicate a drill to that area.

This is actually speaks to drilling strategy. We were concerned at the time of the acquisition that we would have a hard time, given supply chain challenges, ramping up drills. We've done a better job than we thought we could on ramping up drills, which opens up the door to doing some of that exploration. We're absolutely gung ho on doing some exploration work like that. But it's also managing the priority of getting to as big an infer to paint a picture on what the open pit looks like. And so talk about what we're doing here on potentially adding drills here as we look at ramping them up. Just talking about drill productivity.

Yes. So the notion originally was that come the fall, we would take all of the drills, and at the time, it was 6 or 7 and dedicated strictly to indicated. But we've seen as we've grown to 11 that we have the capacity from a people standpoint, from a core shack and storage standpoint and lab standpoint. So the strategy will now be 2 or 3 different prongs. One will be dedicating some of the drills to indicate it. And as Nicos has grown the zones from 16 to 55, that means a little bit more indicated drilling than we had thought, which is a good thing. But also then taking some of those drills and striking along the length of LP. One of the biggest challenges we have is having to do condemnation drilling. We don't want to put the mill somewhere where there's a lot of gold. So some of the drills will be dedicated to condemnation drilling, and then drilling out along the strike length of LP as well. And then I'll just add as well. There are some targets that for any other mining company, that would be where they put all of their drills, like Arrow and Midway. We had to walk away from those. We had to pause them because we wanted to focus everything on LP. So we're very much looking forward to taking some of those drills and focusing back on some of those generative targets.

I'm just going to bring a question in from the webcast. Someone is asking, how are we going to manage around the complexity around the number of domains when it comes to underground mining?

Nicos and Ned?

Yes, we see that as a benefit, right? Our ounce per vertical meter is going to be relatively high. Capital development intensity is going to be relatively low. Whenever we have that many stack veins we're in a good position in terms of infrastructure. Some of the veins will be mined together. And as we said, midsized underground mine at LP. So we will be kind of bulk mining in some areas. In other areas, it will make more sense to be more selective and look at conventional long-haul mining. Yes, I think it will be case by case, but we won't be focused on a single mining method for the entire 4.6 kilometers.

It's Tanya Jakusconek from Scotiabank. Maybe for Paul, just coming back to Great Bear. I think when you originally thought about this pit, I thought you were thinking more in originally higher grade material in the sort of 500,000 to 600,000 ounce production range or there about 400,000 to 600,000, sorry, I think was what we were originally thinking. So with this lower grade material, are we more in that 400,000 to 500,000 or...

No. So when we -- so net-net, the move to a lower grade is a good thing because we're putting more material and it allows us to pin the mill at the 15,000. So when we talked originally, we were probably modeling a 12,000 tonne a day mill. So what we're doing right now is we're going -- we're thinking 15,000 tonnes a day. We haven't landed for sure, and that allows us to pull some lower material, which will push the production profile up to 500,000-plus. So we're not down in that 400,000 anymore. So the combination of throughput, more lower-grade material and potential concurrent underground mining of Hinge and Limb pushes us to that 0.5 million plus range. As you can appreciate, we're running multitudes of mine plans, but these are all moves that solidify a production profile towards the higher end of the previously communicated range.

Okay. And so then I just still think about that $1 billion CapEx for this, plus the $200 million we need to spend to get the studies and the drilling done and the $600, $800 per ounce and all-in sustaining costs, are those still numbers we can think about?

Yes, all of all those.

Yes. And then just maybe on the resource that is going to be released in, I guess, with your Q4 financials in 2023. We've got -- how many holes would the resource be defined by? I think we have 75-meter interval. And then just how do we treat this visible gold within there?

Yes. The question on VG is a really good one. We'll come back to that, but Nicos talk about the resource model.

Sure. So I think we're up to 480 holes or so on LP right now. As we mentioned, we'll continue marching towards more than that -- sorry, it's double that. That's where we started. So we have twice that amount of holes. I think it's 988 in our current refinement that we're doing here with the geology domaining. And we'll continue drilling, right? So we mentioned another 120 kilometers or so to come. So that's what will feed the estimate.

And the VG, we view the preponderance of VG as a very positive thing, obviously, because they will indicate that the asset will likely bias to the positive when we mine it, as we talked about earlier. It's very difficult to perfectly model the incidence of VG. So we view it as a very positive indicator.

And in our initial work, we're being fairly conservative, limiting how far we allow that visible gold to spread. So anything between 10 grams and 150 grams, we're really controlling how far that's spreading. And the RC will ultimately answer that question of how far we're allowing that to extrapolate.

So 150 is your cap off. Your capping factor.

It is in terms of getting rid of true outliers. But like I said, we're really restricting distance on anything above 10 grams right now.

Okay. And then just 1 final question, if I could, just moving on to Curlew. Can we just talk about the permitting process because you've got, one, the permitting of the trucks to get to the mill? And then at the mill because it's been down, it's just an amendment to permits there. So could we potentially see this, if everything goes well contributing to production in '26, '27?

That is roughly how we're looking at it. The principal permit is around the tailing. So the Kettle River mill has a traditional wet tailings disposal. What we're looking at from an engineering point of view as a dry stack, and that is the principal permit. But that time line, '26, '27 is roughly what we're looking at internally.

Mike Parkin from National Bank. Just back to Great Bear. In terms of your proposed underground mine life potential, what conceptual kind of depth are you thinking and do you have pretty good confidence that you've got further extent at depth?

Ned, why don't you take how we're looking at the mine plan?

In terms of mine planning, in terms of the mine plan, I guess, Nicos mentioned from a geological standpoint, we have drilled down to 500, and we're seeing that continues down to around 1,000 meters, right? In terms of the way we're looking at the mine plan, so underneath that pit, we'll go with -- in the LP zone, it's most likely going to be high productive open stoping method. And that extends from, let's say, the pit potentially goes down 400, 450 meters all the way below that pit and it's open at depth. So will go down to a kilometer on that. But then when you go to the discovery or the south side of the pit or Hinge and Limb, it's potentially more selective, high-grade methods like what Paul mentioned, like 500 to 1,000 tonnes per day.

And there's no geologic reason why it should end at a kilometer, right? We see these undergrounds going down 2 kilometers. So it's -- we just don't have drill holes down there yet.

Graham says it goes down to the mantle.

That's right.

I'm going to pass this on here, but we just had 1 more question from the webcast. A couple have asked just any preliminary indications on the strip.

At Great Bear?

Yes.

Again, it will depend on how we characterize the grade and what cutoff we use, but we're looking at with a bigger pit something in the 6 to 8 range.

Anita Soni at CIBC again. So just in that strip and your continuing on with that 6 to 8 is that the -- that's the overall of the pit, right?

Yes.

And how much of that -- like with the stockpiling, how much do you think that that's going to be capitalized, like the operating strip ratio?

[indiscernible] that one.

Too detailed?

Yes, I think it's very early to see that.

All right. So I'm going to follow on to Tanya's question, because if I modeled just 2-gram per tonne material, I'm getting into like for 384, or if I was just trying to fill a 15,000 tonne per day mill, a 97% recovery rate getting in the 300. So will you be mining the Hinge and Limb at the same time? And is that possible? Like and that's supplementing? Because if I want to get to 500, I've got to have like 284 grams per tonne.

Yes. So as you can imagine, we're running a lot of these scenarios. So there's if we pull the grade down to 2, then you're right, but it probably won't be as low as 2. Certainly in the early years, it will be higher grade than that. And in one of the scenarios we're working on, where we do pull that to the lower end of that profile, we are concurrently mining Hinge and Limb, and that's how we build up to the $0.5 million plus. But we're a mid scoping study here. There's still a lot of moving parts on this. I think the point to communicate here is that we have a lot of optionality on sequencing stockpiles grade open pit and underground as we look at this to build up to 0.5 million ounce a year or better mine.

And I think, Paul, to add, maybe this will help understand the ore body. I think you mentioned it, and Nicos mentioned it, but I'm going to say it with my words from a mining standpoint. Although we're seeing this low grade coming in, the high-grade core is still there versus when we updated you several months ago. So the high grade is still there. We're adding this low-grade zones to it, which means we can target the same high-grade material and stockpile below grade. So it's not like a dilution as such. We can achieve -- again like Paul said, it's early...

So put it another way, the 2-gram includes a whole bunch of stockpile material that doesn't go through the mill at the beginning.

Exactly.

So in other words, the mill grade is probably closer to 3. And we don't know exactly if that's going to be higher.

We don't know even from the pit, it's higher than 2. It's too low for the pit to be 2 grams.

Yes, I was just wanted to do the math on to it.

Yes. No, it will be a 2-gram pit, but much of the lower end of that, maybe everything until -- I don't know what the cutover is on field.

I'd say, again, it's very early, like what Paul is saying. But if you want to run some sensitivities on models, I would assume the pit is somewhere in the 2.4 to 2.6 in the beginning, and add a little bit of the underground to get 500, 600 range. And then the low grade comes in the pit.

And you said with the low grade, it was 0.3 and 0.5. So those are the numbers I thought I heard. But 0.3 -- like anything from 0.3 to 0.5 is considered low-grade stockpile and then do you have a medium-grade stockpile that's...

So this is what we've done at Tasiast. So Tasiast, we have great bins. We have the reserve. We had a low-grade reserve and then we had the resource bin and we're going to employ the same strategy. And then we'll probably even going to have mineralized waste. Stuff that doesn't -- is not intended to go through, but if gold prices go to 2,500, it's going to be sitting there as supplement. So yes, we -- on all our open pits, we will run bins, and we'll sequence those bins, obviously, from a cash flow perspective.

And Paul, just to add to that, when I said 0.3. We've learned throughout the years that stockpiling that maybe in the 15,000 tonne per day case, it could be a mineralized waste. But as time goes by, gold price goes higher, and those lower grade mineralized waste stockpile becomes ore later in life, so...

Well, Fort Knox for a year subsisted on what was essentially a waste stockpile but was separated as low-grade material that wasn't reserved at the time. So there's a lot of moving parts here on grade bins, throughputs, what is the actual feed grade in a given period of time. And these are all the optimizations that we're working on right now. But we're not targeting a 300,000 ounce a year mine. That's not -- we're targeting a 0.5 million plus mine here.

Yes. The flip side, though, is that, I mean, you've got to 6:8 strip ratio and high energy prices right now. So you're moving all of this material upfront, stockpiling it, rehandling it, pushing it back. And we know lots of mines where the stockpile just sits on surface and...

Yes, the 6:8 strip ratio is the ultimate strip ratio. Obviously, in the early years, it's not going to be anywhere near that.

Josh Wolfson at RBC. Just on Manh Choh, the permitting that was talked about for July, is that for the final permits whole project? Or is that just to start kind of the road construction?

Can you take that, Jeremy? Or you wanted to? Yes, go ahead.

The July permit is the wet lands permit that allows us to roll construction. The operating and closure permits are expected in Q3.

And I recall at some point, there was some complexity with trucking and there was some pushback against that. Has that been resolved? Or is that still in progress?

It's not resolved. What we found out is that the trucking -- everything we're doing is completely legal and authorized. We're having a lot of cooperation from DOT in Alaska. And they've recently set up a committee of stakeholders of people all along the route from school boards to the various communities to put a plan together to address some concerns that the community might have. And also to influence the federal government is spending a lot of money on improving the Alaska highway, widening certain zones or passing zones. So this is starting this year, too. So that committee will influence those aspects to make the trucking as safe as possible.

Got it. Okay. And sorry, for the full permit, that would the resolution for trucking as well?

I don't think there's a resolution that's needed for trucking.

There's no permit required.

There's no permit required. Those types of trucks run on the highway currently, daily. And we see, we've been doing some test halls, and we see those kinds of vehicles and they're allowed.

Okay. I think that would be -- and sorry, the full permit that was third quarter of '22 or of '23?

'22.

And sorry, 1 final question. Because the project is not included in 2024 guidance, if you were to meet all these scheduling items, what sort of incremental production could you see there?

We'll talk more about that at our Q2 numbers there. This was a bit of an awkward timing here coming a month before the actual FS is done. So let's hold that thought until Q2.

All right. When we -- if there are no more questions, any -- just checking once more. Okay. I think that's it. So thank you very much for coming. I don't know, Paul, do you want to...

No, just to add, we're going to hang around if you want to ask some questions one-on-one [indiscernible]. Thank you all for coming today.