Lundin Gold Inc. (LUG) Earnings Call Transcript & Summary

I think we're probably just going to get started. Thank you so much, everyone, for attending today, everybody in passing and everybody on the webcast. Just a couple of quick things. We reckon this the entirety of today's presentation should probably take about 3 hours. We think we'll be done by about mid-day. For any of you guys wanting to ask questions, we want this to be an open discussion really. So feel free to ask questions whenever you have one. And the guys are happy to answer those for everybody on the webcast, you can ask questions through the portal. That will come straight to me and I'll ask those questions once they come through to whoever the question is directed at. We will be making some forward-looking statements today. So as usual, when you get the chance, please take a look at this slide. The agenda will be split into four speakers today. Ron will be giving some introductory comments. Followed by Terry, our COO who will be talking about operations. That will be followed by Andre, who will be giving an update on our exploration strategy and some of the things that we've seen and the developments that we've seen over the last year, particularly. I was looking at the presentation that Andre gave yesterday, last year, funny enough, and it really is how much the exploration side of things has developed is pretty amazing in the last year. And then finally, Juan Jose will give an update with regards to our business sustainability activities. So with that, thank you so much, everybody, and I'll hand the mic over to Ron.

Thanks, Finlay. Yes. And thanks, everybody, for taking the time this morning, on Friday morning to hear a little bit about Lundin Gold. When we're putting this together, we're coming up on 10 years. It was June of 2014, my first time I ever put boots on the ground in Ecuador, but Lukas, Pablo, [indiscernible], and Peter Rockandel. And we look back to that journey now from 10 years and where we've got to today. And it's a pretty exciting and a time stumbling experience to look at how many people's lives have been changed by the construction and operation of Fruta del Norte. But then when I look where we're at today, and honestly saying this, it's not is something to say because we're in front of a Capital Markets or Investors Day. I'm even more excited about what the next 10 years are going to show. You're going to hear about today about where we've got to, what we're looking at in terms of expansion of the existing facilities, but the exploration. Where we are in exploration is essentially showing that the next 10 years are going to be just as exciting, if not more exciting than the past 10 years of building this operation. And so for us, this is -- it's -- it is a very time where we now are generating a cash flow to be able to have a lot of opportunities in front of us. If we look just at real, get on a low level, we've done what we said we wanted to do in 2023. Cleaned up to -- proceeded to start cleaning up the balance sheet. We met guidance, and paying our dividends into 2024. You'll hear that we're well on our way to meeting both our production and our cost guidance. We've now fully cleaned up the balance sheet. And just a few weeks ago, we announced that we're actually going to be doubling our dividend from $0.10 a share quarterly to $0.20 a share quarterly to further take that cash that we used to be giving it to the banks and now giving it to shareholders. Just real cap, you guys have all seen -- everyone seeing these produced just under 134,000 ounces in Q2, bringing the year-to-date to just under 245,000 ounces. So we're well on our way to meeting guidance. Interestingly enough, we are -- as many of you have seen, all of us carry these backpacks around rolling milestone of 1 million ounces this month. Within the next couple of weeks, we're actually going to meet another milestone of producing 2 million ounces at Fruta del Norte in just under 5 years of operation, which really shows whether a remarkable ore body this is. Cash costs for the quarter were about $875, year-to-date about $872. So we're well on our way to meeting the guidance for the year. But this is -- we're not happy with $872, $875. Our team at site and you're going to hear about a number of initiatives that we have underway from Terry about what we're trying -- what we're doing to really continue to reduce cost, either by increasing productivities or through just cost-cutting initiatives. And as I mentioned, we're well on our way to our guidance. The 450,000 to 500,000 in production for this year. The -- in terms of all-in sustaining, we're kind of just in the upper range a little bit, but we're going to continue to push those costs down. We will be updating the '25 and '26 guidance. We're right in the middle of the budgeting process right now. But based on preliminary indications, we don't see a lot of significant change in '25 and '26. With those costs and with that production, we're generating a lot of cash. This is the history of the free cash flow of the operations since the start. First gold was November 2019. Commercial production February 2020. We were extremely blessed, lucky, however you want to put it, to have managed to get through construction and actually get into commercial production prior to March of 2020 when we all know what happened then. The country of Ecuador shut down for 3 months. We were able to get ourselves back up and running and never look really back since then. So just in the first half of this year, we generated just under $200 million in free cash flow. You're going to hear from Terry about our expansion. We've constantly looked at ways of improving and increasing throughput. Fruta del Norte was originally designed for a 3,500 tonne per day mill. The mine has always exceeded expectations. The mine was -- everyone thought it was going to be wet, really bad ground conditions, and that was going to be the bottleneck. We have not ran into a bottleneck in the mine to date. The mill, yes, we originally expand -- spent $18 million to take it from 3,500 to 4,200 tonnes per day. And we're in the process of spending about $37 million, and Terry's going to walk you through the details to go from now 4,500 to 5,000. The team at site have told me and Terry that based on what we see today, we've been debottlenecking after we get everything done here and the expansion. We should be able to get to 5,500 tonnes per day. We saw continued debottlenecking, not a lot of capital. The other part that hasn't quite met our expectations is recoveries. And that's what we've determined is the metallurgy has really been the challenge, but we've done a lot of work. We now think we have the solution to this. We're losing our goal in very fine grade sulfides. And with the technology we have in place today, we can't grind finer, recoveries actually go out. So we are now implementing some new technology and Terry will walk you through that as well. We've cleaned up the balance sheet. We took advantage of some opportunities. Gold was low at the start of '23. Ideally, we wouldn't have been able to do this in '22 when gold was at 1,600, but we didn't quite out of the cash. But we did it in '23, pay debt off in full. And obviously, where gold prices have gone, that's been -- turned out to be a very astute decision. By the time we got to the end of last year, our debt was down to $72 million, paid it off without any penalties or any like that. And then with the acquisition of Newcrest by Newmont, we thought there may be an opportunity to open up the discussion to buy the stream back in full. We did have the right to buy 50% of that back for $150 million at -- in June of this year. But we approached Newmont, they say make us an offer, and we did, and we came to an agreement, and we had announced that we buy back the stream in full for $330 million. That's the stream and the offtake agreement. So as of June, as you've seen in our balance sheet, zero debt now. We paid off $750 million in debt in the 4 years. You're going to hear about exploration, that's growth. That's our organic growth. But you're going to hear a lot about that today. We have three programs, and Andre will walk through them, I just real quickly, conversion focused on our existing resources, near mine in and around Fruta del Norte and regional in that brown area that you see here, that's the -- where we -- what we determine is our regional effort here. Every Lundin group company is focused on increasing shareholder value. Next year will be my coming up, makes me feel old, but I'm also very happy to say it will be 30 years working for the Lundin family. So I'm now on my third generation of family. I first met Jack and Adam when they were in elementary. Now they're my boss. And I can't be more -- this -- I honestly say this I can't be more excited than where we're right now with what we see for the Lundin group. We're driven by the shareholder value. Where we're doing by that Lundin Gold, we'll see an operational excellence. It's a great ore body. And we know, unfortunately, I've been mining now for over 30 years, there have stories where good grades make good miners. Or also good grades make lazy miners. We don't let that get into our culture. Our culture is always what can we do better? And I give a lot of credit to the Ecuadorian people. That's their culture as well. And so we're always focusing on costs, how can we get more out of the operations. We're talking about the expansion and then what can we do more? We're generating a lot of cash by keeping our costs low and improving productivity. So clean up the balance sheet, return capital to shareholders. Now focus on growth, both primarily organic, but never stop looking at inorganic opportunities. So you're going to hear about what we're doing over the last 3 years. We've really started exploration in 2021 with conversion and a little small little regional program, but you're going to see how it's changed a lot. The key is none of this could have happened without the strong ESG culture that is also part of the Lundin group. Shareholder value and ESG, creating wealth, changing people's lives. I can't remember meaning add off when I was much younger just starting with the group. And that was one of the things that impressed me is that's why the family actually got into resources because they felt this is a way they could change people's lives. Taking something that's in the ground at the time it was primarily oil. It's worth zero to the people of the country, the government, since everything as long as it's sitting on the ground. But if we can extract that responsibly, we can really create wealth for a lot of local people. And I think Fruta del Norte, and I remember hearing from locals that it has really been sort of almost the epitome of one of these stories of coming into a country that had no mining. Remember the very first meeting with the government, look and said, this is Ecuador's gold. It's worth zero. What we want to do is coming to Ecuador and show you how we can create wealth from the resources you have in the ground, create wealth for local people, create wealth for various levels of the economy and also create wealth for our shareholders, obviously. But Fruta del Norte is now showing that this can be done. And nothing we can do. ESG is something that is part of everything we do every day. It's not just three letters that we are worried about our stores with all the various rating agencies and everything. It's part of our culture and it's part of the, I think, one of the secret sauce going say or key success of the Lundin group. On that note, I'm going to turn it over to Terry to talk more about detail about some of the things we have going on in the operations.

Thanks, Ron. Good morning, everybody. Yes, I'm Terry Smith. I've been with Lundin Gold for about 1.5 years. That's gone by pretty quick, working with Ron and the team. And it's been exciting for me to be part of the success that Ron was just describing. We've got a world-class ore body down in Ecuador, arguably the best precious metal asset outside of a major, at least that's what I think. We've got a great team in Ecuador and that has delivered results and we'll continue to. But the key thing for me in this Investor Day, if you take one thing away, it's the exploration story like Ron was saying, it's is starting to come together. Andre is going to go through that. But for me, the geological endowment that we have in this epithermal field in this district that we're starting to unlock is really exciting. And for me, it just is a milestone where we're just getting started here with Fruta del Norte. So very exciting times. I am going to give you a bit of a site overview. We've got Vrify going here. So I'll do some magic with the iPad. I'll get into our life of mine plan and just give everybody a sense of how that looks from our underground, talk about reserves, our health and safety performance. I'll get into the plant expansion that's underway, and then talk a little bit about ops excellence. So this is a site overview. I'll walk through, for those of you that haven't been to Ecuador or to Fruta del Norte. This is Southern Ecuador. And if you were to come see us, you would fly to a Quito and you would then fly to a little town called Loja. And from there, you've got about a 4-hour drive to get to Fruta, that's close to the Peruvian border here. We've got a paved highway that goes all the way to town called Los Encuentros. That's where a good bulk of our employees come from just in our rig 1 and 2, there's about 40% of our employees come from that local area. And you would then take a 22-kilometer access road up through some mountains terrain to FDN. So the green line in this slide is our access road. The blue line is a 40-kilometer power line that we have that connects FDN to the Ecuadorian grid. And you can see just off in the distance, that's the Peruvian border in the background. So as we zoom in on site here, I'm going to step through all of these facilities. So this is just sort of an overview to give you a sense of the footprint that we have. We're very conscientious of the [indiscernible] environment that we're operating in, in Ecuador. So we try to maintain a small footprint. This is a great sort of eagle eye view of the site. I'll walk you through the process plants. We'll take a look at the mine. The paste plant. Wherever here is our Las Penas camp, that's where we stay. And if I pan to the right here, you can see our TSF off in the distance. And so we'll have a closer look at that in a moment. So this is our process facility. And I'm not a metallurgist, I'm a mining engineer, but I take a pretty keen interest on this plant. As Ron was describing, one of our big opportunities is increasing throughput and improving our recoveries in the plant expansion that I'll talk about a little bit later. But just to walk through the flow sheet, we crushed the ore as jaw crusher. It makes its way into our combination circuit with Ball and SAG mills. We've got a gravity circuit and a flotation circuit. That's here, and then we leach the tails out of that circuit and then it goes to tailings. So it's a very kind of standard gold flow sheet, and we're operating at the moment around 4,600, 4,700 tonnes a day. This is our paste plants. Paste backfill is -- uses tailings so that we -- we don't have to deposit as much tailings on surface. We combine it with cement and it becomes a structural part of our underground. So this paste plant takes about 40% or 50% of our tailings and since an underground is paced. You can see up on the hill side here, this is a self ventilation raise. I'll highlight that when we look at the underground. This is our Las Penas camp. So I just spin around here. This road is about a 15-minute drive from the mine to get back to Las Penas camp. And here, we've got a really comfortable camp. We've got a soccer field, basketball courts, volleyball, a little gym. So this is a great place to unwind at the end of the day. Some of the best camp food is in our cafeteria I have ever had in my career. I've never heard anyone complain about the food, quite the opposite, actually. And just in the hill side here, and I'm going to use a gold color is what Andre is going to talk about shortly, which is the Bonza Sur deposit. So it's just on the reach line behind our camp. So very close to our existing infrastructure. And the other thing that I'll point out is our South exploration decline is just past the hill there. So I'll touch on those when we look at the underground in a little bit more detail. This is our Tailings facility. This photo was taken when we are constructing Stage 4 last year. We're completing a lift next year, Stage 5, and we'll carry on with construction as planned. And this is a facility that's permitted till about early 2030. We're just completing some permitting now that will extend this facility out into the 2040s. So we're planning on exploration success to fill this basin in the future. So planning for a long mine life. This is near the mine portal area. So we've got our mine administration facility. This is where the mine dry is, where the miners get ready to go underground. Tech services is located here, all the engineers that do all the planning. And behind is our maintenance shop where we do a lot of our mobile maintenance. And if I just spin around here, you can see our two portals. So we've got twin declines that access the underground. These are ventilation intakes for the underground as well. So here we are underground. This is a 3D view of the underground. We were just looking at the portals up here. And to get underground, you sync your way down to these declines a couple of kilometers and you can access FDN from there. I was pointing at the south ventilation raise near our paste plant earlier, that's there. And these are two key levels that I'd like to highlight. We drove these levels out further last year, so that Andre could do some drilling, and you're going to hear a lot about FDN sale, which these two levels allowed us to do some drilling, and we're still drilling and in filling some pretty exciting results out there. And this is a self exploration ramp that was completed during the Kinross signs. So now I'd just like to highlight, I'll be talking about operational excellence a little bit more. This is one example. This is an underground shop that we just completed. This is about a $2 million shop. This just brings our maintenance folks closer to the equipment underground, so you don't have to bring all the equipment surface to repair all the time. And if I can zoom-in on, can be dangerous here with Vrify. Bear with me. I can zoom in a little bit, gives you a sense of the scale of this facility. It's -- we're really proud of this and brought it online, and it's absolutely helping keep our equipment availability up. This is showing in gray, what we've mined out from the deposit, and red is what we're mining this year from FDN. I'll just step through the life of mine, and we'll see some different colors pop up. Yellow is what we'll be buying next year in 2025. And you can see actually the -- let me just go back one, I wanted to point one more thing out here. The -- pardon me -- we actually connect into the ventilation raise next year. There will be some auxiliary ventilation for us, and it's also another exploration heading for us. So I'll get back to the animation here. We're jumping now at a 5-year block between 2026 and 2030. And then this is completion of mining to the end of 2035. So that's our current life of mine. Now if I look at the 2019 reserves, this is kind of an interesting view. You can see sort of how small the original deposit looks. We had quite a bit of drift and infill, that's now been converted into long haul. You can see all the small development down there. And if I compare this shape to what we now have for reserves. You can just see how much we've grown the reserves. And as Ron is talking about shareholder value, the longer we can make the mine life, more NPV we can generate. So this is a key for Andre and I to infill this deposit and keep finding the edges and pushing this out. One area that Andre will be talking about is here called FDNS or FDN South. And if I just rotate this a little bit, you can see the reserves that we have in this area, but the interesting thing is, is that we're finding lots of high-grade mineralization, just literally going through the two exploration declines that we drove. So we're finding more on all kinds of different directions there. So Andre will talk on that, so that's pretty exciting in terms of adding more ore and adding more reserves in the future. And as you see, we've got this inferred resource halo that sort of represents the edges of the mineralization as we know it. So we're still, still a long ways to go to keep, keep adding reserves. This is our -- you've probably seen this slide before, this is view of our 2019 reserves at just under 5 million ounces to where we are today. So we've more than replaced the 2 million ounces that Ron was talking about that we've mined so far. And it's still a very high-grade resource. We're at almost 8 grams, 5.5 million ounces, 22 million tonnes. So -- that's -- and we're not even adding any of the exploration upside that Andre will touch on. So we see a very long mine life at FDN. I want to touch on health and safety for a moment. This is a key part of our ESG. And it's a value for me. It's a value for the company. And I think -- what we're looking at here is our total recordable incident rate. And this is the way the industry looks at safety performance. And it's a calculation of the injuries and the number of hours that your workforce is occurring. And so you can see in 2013, we had a fairly low TRIR, and in 2024, it's increased. And we're seeing a number of these injuries as hand injuries. And these are all preventable. We feel if we can get our workforce to understand these hazards a little bit better, and that's going to take some management time in the field, some supervisor leadership to help get that ingrained into everybody's mindset. And I think if we look at the injuries we've had, we could do a better job of investigating these things and driving to the real root cause. If there's a latch that falls in somebody's hand, we could engineer that latch from slamming shut, put something in place or put a spring in place to prevent that from happening. So we're moving in that direction with our injury prevention program, and we'd like to see these injury rates come back. We're still -- in terms of the industry, I'd say that we're still a leader in terms of our safety performance, but that doesn't mean that we stop and rest on our laurels. From a plant expansion, Ron touched on this earlier. This is a 5,000 tonne a day expansion. We foresee pushing us beyond 5,000 tonnes a day once it's up and running. We'll see a recovery improvement of 3%. I'll talk about the Jameson Cells that we're adding. We actually just received the three Jameson Cells on site earlier this week. So that's kind of an exciting milestone for us. And one of the other things that we don't talk about very much is the advanced process control aspect of this project, really taking this plant and adding a layer of technology to make the plant easier to operate, more stable, and it will help us in terms of recovery and pushing the throughput side of things. From the project perspective, the detailed engineering is complete. Procurement is complete. We're making good progress on the construction. Our tailings line has been completed, and we've got our grinding circuit on advanced process control already. Fabrication and other things are well advanced. So we're on track to complete this by year-end. We do see a few things trickling into 2025 in terms of capital spend. But largely, the project will still deliver the headlines that we've been looking for here.

By year end.

By year end. Yes. Yes. So I'll just walk through some photos that we have. These are a couple of weeks old from our construction on site. I'll highlight a couple of things. It's probably hard to see for those that aren't familiar with FDN. These two areas, this is -- the first one is our concentrate, an area that we're adding a third filter, and this is the Jameson Cell area that's riding through Jameson cells. In this photo, it's here and here. So this is the Jameson Cell area. This photo on the left is pump box. It's just been placed on top of some concrete. And we're pretty proud of this pump box because it's the first structure that we're putting on top of a lot of hard work that went into getting these foundations in place. And just to compare this to the 3D drawing on the right, that pump box is sitting in all of that steel and infrastructure there. At the top of all of this are the three Jameson cells that we're talking about. These Jameson Cells are strategically placed in our flow sheet in three locations, one at the head end of the flotation circuit to capture those fine grains sulfides that Ron was referring to. Another is ahead of the cleaner circuit so we can have the opportunity to regrind that ore and extract more of those fines. And then finally, another Jameson Cell is right at the tail end of the flotation circuit before we moved to the CIL circuit. So we feel like by placing the Jameson Cells in these three locations will really capture a lot of that finally disseminated gold that we're losing at the moment. From the concentrate area, if I zoom in here, you can see the structure that's going up, both in these two images. Sort of the similar view here with the engineering model turned on. You can see these air tanks are also here. And the structure that we're just assembling is the left side of this. So you can see we're making pretty good progress on installing the third filter press as well. I want to talk about operational excellence. This is a key to unlocking cash flow and really setting up the mine for future success. We know that we may not have 8, 9, 10 grams to work with all the time. So we really want to drive our cost down on a per tonne basis. Even though we report on an all-in sustaining cost basis. From an operations team's perspective, we really focus on a cost per tonne. Two of the things that I'll point out here are recovery and throughput. And these are really things that the plant expansion is going to address. We're going to increase throughput, like I've been saying for over 5,000 tonnes a day. Our Jameson Cells will help us from a recovery perspective. Something that we don't talk about a lot is the geometallurgy program. It's a pretty technical discussion. I'm happy to have a few, but we're really understanding the geology and the deportment of gold and the deposit and the technological advances that we're making with the plant will help us really tie that geology to the recovery side of things, and integrate the plant team and our geology team. So that's kind of exciting. And we haven't had to do anything really from the mine perspective to support this plant expansion, and that's been largely because our mine fleet has really been available to push the tonnes. So we're squeezing more hours in the equipment we have to match the throughput rates that we're seeing in the plants. I won't go through all of these. But from an operating cost perspective, I have a few examples and a couple of slides that I'll dive into. And from an environment perspective, there are some interesting things that we're looking like a lot of companies, we're evaluating battery electric equipment to be implemented underground. And we've already got a number of good projects underway that are making our diesel consumption more efficient and using less power. So we're very mindful of our carbon footprint, even though we're a very low carbon emitter from on a per ounce basis already. Now if you want to drive revenue, you focus on debottlenecking your plants. And this is a great history of how our process team has driven throughput over the years. You can see that on the far right here, we're already at around 4,600, 4,700 tonnes a day. And that's even in advance of any of the construction work that we've implemented from the project perspective. So we're pretty optimistic that we'll be able to push well beyond 5,000 tonnes a day once we are complete with that project. But the thing that really stands out for me is here, driving from 89% to 93% availability, it sounds pretty subtle, but the amount of work that it's taken for the process team to drive that level of improvement is very significant. So kudos to them for this. This is a great sort of history of operational excellence over the years. From an operating cost perspective, this is a small sampling of some of the projects that we have underway. We've -- I'll just touch on a couple of these. We've reduced our cements costs in our backfill by playing with our recipe, figuring out how much cement we really need to add. We've also switched suppliers. So we found a cheaper supplier for cements. So we've made that switch, and that's saving us about $1 million a year. We are doing some basic things like measuring our tires. It sounds really simple, but you go through a lot of tires as a mining company. And so if you can run your tires a little longer, it saves you quite a bit of money, in this case, around $0.5 million a year. We've talked about rigid ducts in the past. For those of you that have been underground, this is a smooth ducting and it's just a more efficient way to move air through the underground. And by doing that, we don't need as many fans. They don't draw as much power. And so it saves us on our energy costs significantly. Well, the process plant has continued to look at different segment line configurations. And we used to have to shut down twice a year to realign both SAG and Ball mills. Now we can push that out to 8 months. So we're doing that about 1, 1.5x every 24 months. So it's the some nice additions. But those projects, I would call them low-hanging fruit. And to get to the next tier of OE projects, you really need to leverage technology. And so I've got a couple of examples here. I'll focus on the mining for a moment. This Starship Enterprise photo on the bottom right is a mine dispatch [ Audio Gap ]. We can see where the bottlenecks are. We can make maintenance improvements. We can do all kinds of things with this kind of information. The gentleman on the left is actually operating our underground vent fans from surface. So that's a nice way to save power. On the other side, I've talked about advanced process control with the process plant and the expansion project that were completing. This is just a couple of examples of how the advanced process control will help us. Not only will we collect a lot of data and have visibility similar to the mine and the dispatch system, but we'll see a lot of process improvements. This graph on the bottom right is a SAG mill pump box level. So you're taking a slurry from the SAG mill and you're pumping in the flotation circuit. The flotation circuit likes nice, continuous flow. And so what the advanced process control did for us is really took a lot of noise out of that pump box level. So the flotation circuits really improved in terms of the stability that it's seeing. On the left side are some flotation cameras that we positioned above the flotation cells. And this is a view looking down on one of the flotation cells and the froth is moving off the edge of the flotation cell and the camera is actually monitoring the bubbles and looking at how fast they're moving the size of the bubbles and what that's going to enable us to do is to manage the flotation circuit better than we currently do. So we're managing these variables by the minute as opposed to by the hour that the manual operations are currently. So with that, I'll hand things over to Andre.

Terry, one question.

Yes, I was just going to say, if anybody wants to ask any questions before Andre starts, I recommend we can open the floor out for those.

So the 2040 tailings expansion, I may not heard exactly just on the 5,000 tonnes a day or 5,500?

That's based on 5,000 tonnes a day.

5,000 tonnes a day. And when you complete that 2040, is that enough capacity for the current reserves? Or do you need to raise?

No, it's all our reserves plus all resources. So we're planning for success, like I was saying, and you'll see why when we get into Andre's presentation. So that expanded facility is a significant increase.

So the total tonnage you can store in that, that moment in 2040 would be only time you said.

I think it's upwards of 40 million tonnes, yes.

Sorry, what's the capacity up until now, like without [indiscernible] expansion?

We have another -- we have another 10 million tonnes to go before we need this expansion. Yes.

Around how many years?

Around 2031.

[indiscernible]

It's a downstream, yes, quarry, rock, construction.

Downstream construction. We meet the Canadian mine standard construction, and we're in the process of moving towards GISTM.

What is the distance from the portals to the underground?

Yes, it's a couple of kilometers. It's a little more than 2 kilometers in portals to the underground.

Terrence Ortslan. Quite impressive. Technical presentation, I must say, as an operator, that's a lot of details here. That's very impressive. Dollars per tonne is very important for us as analysts. What is the target that you can see the range you into?

That's a good question. I think we're -- our tech report, even though it's a little bit old now, has us in sort of a $145 $150 a tonne range. And we've been able to maintain that. A lot of the OE initiatives that I was highlighting are really offsetting a lot of the increases that we see. So we're sort of maintaining that level. I do think that as we ramp up production, you're going to see those fixed costs diluted out by the denominator. So I don't have a number that I can give you, but I know it will be lower than 150 as we ramp things up.

Can you break that out for mining, milling and G&A.

Yes. Let me get back to you. I don't want to...

Process is about 32, mining is $56 per tonne mill, right?

Yes.

G&A and site services surface op would make up the rest.

You get to 150.

Yes, around 32. All right. Thanks everybody.

So, first of all good morning. Thanks for the presence. I'm going to talk -- I'm going to cover the exploration. I have to speak for four sections. And exploration is the future, right? But the best way to start to talk about exploration is with the best how the deposit was formed, how this unique gold system occurs. So I'm going to start with the geology of Fruta del Norte. Fruta del Norte is a deposit formed around 150 million years ago. For those of you that are not familiar with the geology of Fruta del Norte. Fruta del Norte is also part of the Andes. That's the home of some of the largest gold and copper deposits in the world. Specifically, Fruta del Norte is located in the Subandean zone in the eastern foothills of the Subandean zone of the Andes. And this is a new frontier for major deposits has been only explored more systematically in the last 25 years. And since then, some important discovery have been done, not only Fruta del Norte, that's the main example of a gold epithermal system in this part of Ecuador, but we also have another important gold deposit that is colder located to the south of the Fruta del Norte. But several of the copper, porphyry deposits, some of them with gold like Mirador, that's another operating mine located to the north of Fruta del Norte. Another important deposit is Warintza actually being developed by Solaris Resources. Other important is copper site porphyry [indiscernible]. And we believe that actually we do have several exploration projects active there and additional scopes are still to be done. When Lundin Gold acquired Fruta del Norte, they also got a significant length of mineral concessions in this highly potential geological environment. Our long 65,000 hectares covers 90 kilometers along the north and south direction. Since the North where Mirador -- sorry. So since the North where Mirador is located crossing to Fruta del Norte, the south extension of Fruta del Norte. So it comprises 100% of the geological environment that cross through Fruta del Norte, and I'm going to talk later about this. Gold deposits, the north of gold deposits and then the south. And when we look at the data, we see that exploration has been done systematically only where Fruta del Norte is located. Now let's add more color for [indiscernible]. So Fruta del Norte has most of the epithermal gold systems is hosted by a magmatic arc. In our map, our magmatic arc is represented by two main units. They are presented by light pink color [indiscernible]. As you can see, a significant part of our concessions cover this plutonic rocks that has a high potential, especially for porphyry but also for skarn systems. And the green units that are the volcanic rocks. This is the main environment for epithermal systems like Fruta del Norte and we cover almost 100%. We cover 100% of the south extension of this geological environment. And we also have Chinapintza. It's a much younger epithermal systems. We also have part of those geological environment. As you can see, we have different episodes of mineralization. We believe that this is an important aspect that provides us several exploration opportunities for new discoveries. In this high geological environment, we see different types of gold deposits. Of course, the most important is Fruta del Norte, sublime epithermal target. As you can see it's covered by the sedimentary rocks of the Suarez basin. But another great example is our most recent discovery that is Bonza Sur that's seminated epithermal season. That's exposed on surface. So now let's move to the Fruta del Norte deposit. That's our most important deposits so far. So Fruta del Norte is one of the premier discoveries in the last 20 years. I always like to say to Ron that it is possibly one of the highest gold concentration 3 kilometer in the world. I did not find any other example like that. We are talking about more than 12 million ounces of mineral resource in only 1,500 meters along the north south strike. As you can see, we can divide Fruta del Norte in two main parts, the North, present in breccias and veins. This is where most of our mineral reserves are, this is where we are mining today. But also the south. The south is an important aspect, mainly for the future of our operation. That's composed mainly by volcanic and veins domain. These were part of our exploration is today. As you can see, Fruta del Norte is also covered between 200 and 300 meters of a sedimentary surface. And this is one of the visions that make this a depository special. It was -- it is for -- an epithermal systems, 150 million years, is really old. So sedimentary cover a lot of the preservation of the system against the erosion in this long period. So as a high-quality deposit, the Fruta del Norte as allowed us to maintain a minimum, minimum reserve base of 8 million ounces since we have start to operate. As Terry mentioned, we have already mined more than 1.8 million ounces. Even though we still have a sustainable mineral resource base, we have not only convert year-over-year, but also add new mineral sources at Fruta del Norte. And now let's move to an important part of the presentation that is our exploration strategy. And before we start, I would like to mention the following statements that, The true size of a given resource is not fully recognized until we starts to mine these. And this is exactly what happened with us when we started to -- so we acquired, we built, we had the ramp up and then the operation. And after that, we started to realize the high potential geological environment that we had on our hands. We decided to refine the exploration strategy and especially prioritizing all the large and explore the areas that were around Fruta del Norte closer to our plant. We do understand that our high surveillance ounces are those that are close to our processing plants. At the same time, we keep the exploration problem in our regional concessions, looking for the next FDN, mainly because the geological environment is still needs to be much better explored. We have five main pillars in our strategy. I'm going to cover each one of them. What are we going to start for me is the most important. That's the land. Because whatever we invest, how many man we do or we can also have the best people, but if you are not in the right place, in the right search space, you do not find anything. So Fruta del Norte is truly world class deposit, right? So it's located in a highly prospective land. As you can see on the top of the map, this is where we have more than 10 million ounces in only 1.5 kilometers. We realized that 95% of the drilling was concentrated in this area. And the deposits, as we are going to discuss, this is still open for expansion, several directions, especially at the depth. But we started drilling five that, in fact, the Fruta del Norte footprint, the hydrothermal alteration footprint was much larger. We're talking about 50 kilometers. And this is not only the hydrothermal alteration, we're talking about geochemical anomalies that had not been took live. Because the main focus had been to discover and the development of Fruta del Norte. For example, the first anomaly that we tested, we found Bonza Sur. We are talking about this later. But it's just a first anomaly and it still had several other. This is most Bonza Sur, and look at how larger is are the anomalies and hydrothermal alteration footprint in relation to those -- to both deposits. What is interesting is that part of those targets are covered by sediments, by the sediments of the Suarez Basin that provides us opportunities like Fruta del Norte. But some of those are also on surface that provides us opportunities like Bonza Sur. I always like to say that epithermal systems are [indiscernible] epithermal system make generational mines. We have great examples in the world, epithermal system that has added more than 30 years life of mine, because as soon as it starts to mine and it start to explore it continue to find more, we're never alone. So when we realize this potential, we started to invest. We started to. We started to invest, we started to explore. And as you can see, we have seen a large increase of our exploration budget since 2022. It's important to mention that it's not only driven by the near mining program, but especially driven by the results that we have had so far. Our exploration budgets in 2024 is going to be around $43.5 million, mostly dedicated to near-mining program around 7%. They remain for the regional program. And recently we had added additional -- we have added additional $2 million to increase [indiscernible], especially to accelerate our exploration program at Bonza and targets around. I would say that this was possibly one of the largest exploration budgets in the industry today. It's important to remember that this is fully dedicated to exploration, we will not add any conversion drilling in this budget. It's fully to explore. So as increased our budget, we also increased our drilling. We have completed a minimum of 8,000 meters of drilling. This is -- as you can see, that is the largest drilling program ever done at FDN. Moving to in the near mine, a significant part of this in the conversion, but it's still an important part, looking for another the next FDN in our regional concessions. I always like to talk about this because for me it is a key part of our strategy. So that's our team. So we have a team that was involved in this amazing discovery. We have plenty years of cumulative expertise in this geological environment. But we had also revigorated our team with 18 new geologists, 10 women geologists, which for us is very important. And all of them, 100% of there are from areas around Fruta del Norte, so they possibly saw Fruta del Norte being discovered when they were young. And now they are part of this history we shares. A new leadership, we have a new expansion manager starting to develop, not the Fruta del Norte exploration culture but also the Lundin Gold exploration culture. We have also international expertise who have international geologists that has experienced in other epithermal systems around the world as part of our exploration group. And another important part of Lundin Gold, this is -- we happen to say this is because we are a company that we do not field the technology. We never forget that exploration are boots on the ground, but technology can really help us. Many in order to advance in the exploration targeting process, reducing the time when the core box, the drill core box alive, generating data and accelerating our process. Some examples, we are going to spend around 7% of our total budget in different kinds of technologies, not only geological artificial intelligence units, but different types of geophysical surveys, and directional drilling as well. We're in fact have a very simple exploration approach. Three main thoughts. A very important one for me is a conversion drillings is that what that allow us to keep replacing what we mine day after day, year after year. Our near-mining program that aims to add new inferred resources, not only exploring Fruta del Norte, but also defining new sectors around Fruta del Norte. And our regional program, that's part of our long-term program, looking for the next FDN in our regional concessions. I could say. I could say, I could release several equipments and my response we have had in the 3 years, but I think that you can summarize this, we have replaced it all that we have mined, but we have been also grown our reserves have added inferred resources at FDN. But also we have understood that we have a really large system. Explore, where several sectors have been discovered only in the next -- in the last 18 months. And we have no doubt that this is just a start of the exploration history at Fruta del Norte. Again, epithermal systems like Fruta del Norte make generational minings and possibly this is a history that we're going to have with us. Now I'm going to jump to the results, jump to the program itself. And let's start with the conversion program. As I said to you, this is a key aspect of our strategy. It's very important, it was, it plays a significant role in the extension of the life of mine at FDN. We have converted more than 30,000 meters of drilling in the last 3 years. As you can see those areas represented in the yellow color are areas that we have drilled in the last 3 years. And we see a significant expansion of the indicated resources along result of the deposit. In 2023, 1 million ounces of reserves were added as part of this program. And we believe that there's more to come represented in the gray areas as you can see we're planing to drill holes for 2024 and 2025. So we continue to add new indicated resources in the north on that and also along the south extension of Fruta del Norte. Now I'm going to start to explore the Vrify model. So this is where we were in 2019 before we started the conversion problem. And since then we have drilled several parts of the south also on that and to the north. These are early results so far. In the areas that we have expanded our indicated resources that support the addition of the new mineral reserves. And when we look at this in relation to the existing. Inferred resources we see that there is still to come. This is -- just let me go back. Our current program 2024 are mainly concentrated along the north extension and several sectors add that, and on the top of the deposit, and possibly in 2025, we should continue to cover in the southern extension of Fruta del Norte. These are just some of the results that we have reported in the first and in the second quarter, I would not highlight of them. But just showing that we still have high grade and wide drilling intercepts in our inferred resources. Some great examples are 60 meters, 63 meters, 14.61 grams per tonne. 69 meters, 8.6 grams per tonne. So this is still -- is still not on our life of mine. This is still not part of our reserves. And possibly, we will be part of the process of the mineral resource estimate that we should present to the market next to you. Now let's jump to the exploration program, right. Our new focus has been really to explore the Fruta del Norte system, but we are also exploring FDN. A great example is FDN depth where we have identified mineralized sectors inside Fruta del Norte that is to open for expansion. As soon we start to move around FDN to the north, to the west, to the east, and to the south, we found Bonza Sur. Then we found FDN east. And now we are developing FDNS in the southern limits of FDN. As you can see, we've seen a consistent track record of new sectors identified in the last 18 months. This is just an overview of our current exploration targets. Most of them are -- we do have positive economic drill holes showing mineralization. All of them are still very close to Fruta del Norte, so they are located in the link of the main deposit. Most of our drilling completed since the third quarter of 2022. And now I'm going to talk in more detail about FDN depth. This is an important target. This is the first, and in fact is the first target that we since started to explore in 2022. It has allowed us to add a 350,000 ounces of new inferred resources last year. Our first job in 2022 was give away Fruta del Norte and see if there was some exploration opportunities there. And one of the things that we realized is that we still have some positive drilling intercepts in the deepest boundary of the deposits are also in the deepest or in the boundary of some high-grade geological domains inside the FDN. We did a very simple approach where we saw -- where we did find a positive intercept with no additional hole. We just decided to redrill. As you can see, we should cover several sectors of the mine by the end of the year, but we have just started, we have identified, for example, intercepts above 80 grams per tonne or above 12 grams per tonne outside our mineral envelope, that we have no doubt that should represents additional inferred resources in the short term to FDN. We should accelerate this program mainly in the last quarter when we stopped the conversion drill after we have one full dedicated drill for the start of program and two underground drilling for the conversion program. Now I'll move to the FDNS. FDNS. So we have just reported some positive holes at FDNS, I guess, 2 months ago as part of our second quarter exploration press release So representing in green what we see is the volcanic domain. This is important. This -- it comprises most of the southern extension of Fruta del Norte. It's a lower grade envelope when you compare to Fruta del Norte. We're talking about 4, 4.5 but not more than 5 grams per tonne, the average grade of this envelope. And we had some former drill holes that showed to us a different geological mineralization in this environment, in this area of Fruta del Norte. As Terry had mentioned, when we decided to develop -- when we decided to start to build underground development, then 1080 and 1170, we started to mine, we started to find some narrower but high-grade material along the development. We started to interpret the target, and we have defined it. So I would say a typical epithermal system have vein style mineralization in this part of the deposit. We defined a geological represented a new geological domain represented by the events. And of course, let's test that. So this is just showing the evolution of this program, right? So this is where we are. The new domains that we have defined. We have [indiscernible] we've exploratory program. And we have intercept a high-grade mineralization in the part of FDN. We have intercepts like 30 meters 27 grams per tonne. This is the best intercept ever, ever hit at this part of Fruta del Norte and the most important that it started to show to us that this mineralization start really exists in this part of this deposit. We also have things like 90 meters, 7 grams per tonne, 80 meters, 8 grams per tonne, 80 meters 17 grams per tonne. These are just the five first results. We have several results, and I can say to you that 100% have confirmed. This mineralization system and different from what we thought about this part of Fruta del Norte. It's a bit narrower when we compare to the main breccias in the north, but it's really -- it still preserves the high-grade metric of the Fruta del Norte system. As you can see is we can really access. It's really -- it can be easily accessed from our underground development. And now let's move to Bonza Sur. I think that it's possibly the target that we have most -- that has concentrated most of our drilling in the last 2 years, the last year, in the last 18 months. Fruta del Norte, Bonza Sur is a new epithermal system, right? As I said, located to the south of Fruta del Norte, how we discovered Bonza Sur was just drilling. A geochemical anomaly that was on surface, we did a drill hole, they drill hole in '22, 2022, '16, that intercepts at the time, 243 meters, 1.5 grams per tonne including 39 meters, 8.2 grams per tonne. When we reported this in I think that was in the first quarter of 2023. We just reported the higher grades zone. At that time, we had not realized that, in fact, Bonza Sur was high-grade core comprised inside a much lower grade mineralized zone. It's hosted by the same volcanic rocks that were at Fruta del Norte. The only difference that these volcanic rocks in this case has exposed on surface. And Fruta del Norte is under cover. We have just completed 50 holes and of then shows the continuity of the mineralization for more than 1,800 meters along the north and south direction. And now we are planning our first mineral resource estimates by the first half of 2025. So this is actually the end. And this is the anomaly of Bonza Sur. And this is the location, as you can see of the discovery hole in 2016, the '22 to '16. Since then more than 50 holes, as I said, have been completed. An overview in relation to Bonza Sur in relation to Fruta del Norte. As I said, it's exposed on surface. And now I'm going to show you a cross section in the middle of the deposit. So it's a shallow mineral envelope different than Fruta del Norte, right? As you can see, what we have at Bonza Sur it's a inner core, inner high-grade zone that usually has around 4, 5 grams per tonne average rate. And this is what we have reported in the first exploration press releases -- a higher-grade zone because this is a vein system. But in this vein system is also enveloped by a large mineralized zone. Just, for example, some intercepts the drill hole 2024-107, it has 113 meters at 2 grams per tonne including, inner core of 54.8 meters, 3.1 grams per tonne, but also includes a vein, the vein part of this system within 9 meters, 8.5 grams per tonne. So this, the rig system was our first target until started realizing that Bonza Sur was, in fact, much larger. What is interesting at Bonza Sur is that this discovery gives us mining optionality, we can -- maybe you can decide to mine just the best part in the system, the vein. We could even start to mine the higher-grade part of the system, especially those -- the higher grade part of the system as [indiscernible] exposed on surface. But even go to the entire low-grade mineral in the rock. We are talking about low grade, but again, we're talking about more than one [ brics ] per tonne in all the intercepts that defined Bonza Sur. The other drill hole, I think that's the best drill hole of the target so far. 123 meters, 4.34 grams per tonne, 79 meters, 6.4%, including 14 meters, 32.3. This is not fair because this was a new hole that was parallel to the main zone, right? But just shows to us how interesting can be Bonza Sur for the future of Fruta Del Norte. This is the current status of Bonza Sur today. as I said, more than 1,800 meters along the north and south direction, well defined along discontinuity by good drill holes that show the continuity of the mineralization. Our exploration program today is fully dedicated to fill the gaps inside of the deposits. But also flexing mainly this high-grade ore. And as you can see, this high-grade ore exposed on surface and the deposit is still remaining open to the south add to the depth as well. We see it Bonza Sur a very good continuity between the surface and the first 300 meters. But we also have some great intercepts on depths as well. For example, our deepest hole that intercepts Bonza Sur show the continuity of 500 meters at depth. Now I'm going to show you just an overview of Bonza Sur in relation to Fruta Del Norte. So as you can see, it's been positive that for exposed on surface as I said to actually our program is dedicated to expand this high-grade core to the west expand the mineral envelope to the south and also covering some parts inside the main deposits.

Actually to the East probably, right?

Yes, to the East, I'm sorry. Yes, that's [indiscernible]. So just to return again and just to show the location of Bonza Sur in relation to FDN and to the surface as well. Now we're going to move to the next discovery, to the oldest discovery that we have that is Fruta del Norte East. I always like to remember that when we started this program, it was assumed that the potential of gold demineralization stopped in the east fault. This is the east fault. So it's -- intermoved the gold demineralization at Fruta del Norte. And there was no drill hole in this part in the East block, but at the end, we decided to do some [indiscernible] holes. An intersect the gold demineralization had some good initial results, like 5 meters 76 grams per tonne in one zone, it was exactly in the zone, 6.4 meters, 12 grams per tonne in another completely different store. In fact, it's short for us that we've not only had mineralization in this lot, both mineralization with hybrid. This area is very large. The Fruta del Norte east is at least 3x larger than the area that causes FDN as you can see, I am also comparing here take a look Fruta del North and this is the area that holds Fruta del North east. This is also exploration challenging to us because it's not covered by this Suarez Basin, but it's covered by the Hollin formation. This Hollin formation generates several views that are -- they call like [indiscernible], important operational challenges for drill. We have just completed geophysical survey in order to have a better targeting at Fruta del Norte east. And now we are starting to accelerate the exploratory program. I'm going to show Fruta del North east in relation to Fruta del Norte to the main deposit and just note how close Fruta del Norte east in relation to the main deposits, but also in relation to our underground development. One of the plans that we have now in the last quarter, as soon as we finished the conversion problem, is to start some exploratory holes from the mine -- inside the mine at Fruta del Norte exploring the continuity of this system in several parts. But again, we believe that Fruta del Norte here is a great opportunity, not only to other unique searches, but still keep the hybrid nature of this mine. All that I showed to you so far is concentrated here. It's important to note how large is the near mining distance. Bonza Sur was just a first and only to be tested, and we still have more than 30 to test, to drill. For this region, we have started very aggressive and more aggressive drilling program that intends to pass systematically all those anomalies. I think this is one of the importance of Bonza Sur that showed to us a new type of mineralization. And showed it to us that the entire areas that I had presented in green that are [indiscernible] are a potential to environment for covers. But at the same time, as you can see, we still have several gold anomalies along the south extension of FDN that could provide us additional opportunities for new FDN. We are also exploiting our regional concessions. This is also an important aspect of our exploration program. What intended to find with our original problem, what -- the main end of our original problem is to explore the same geological environment that host Fruta del North in our rational concessions, right? As Ron mentioned in the start of his presentation, this is a Suarez basin presented in brown color. And this as well. This is the geological environment that also FDN and the objective of this problem is test systematically for the presence for another FDN. In 2024, we have found some gold mineralization have [indiscernible]. And honestly, we believe -- we hope to provide good news to the market soon. As part of our innovation and technology program, as I said, 7.5% of our total budget is fully dedicated to acquire data in different ways. This is one of our initiatives that was to cover the entire near mine but also the regional -- some regional areas by IT and deep [ ANT ]. As you can see, it's not only includes all geochemical anomalies, all the targets that are going to start to drill, but also includes the extension of the faults that hosts FDN and we have already identified some great targets, especially at Fruta del Norte east. As you can see, this is where Fruta del Norte is located. And this is the extension of Fruta del Norte East several important geophysical anomalies that are pretty similar to the FDN and these are our high priority targets [indiscernible]. We have already started to do some of those. We are also were to complete a seismic program -- at the seismic program by the end of this year. We vacated also to the extension of the structures that's closest to Fruta del Norte to the north, to the central part and also to the south. This is another initiative, so we have no artificial intelligence at this time. The main aim of this technology is advancement. So buying data that we needed 30 days to get in our database now we need just need maybe 5 to 10 minutes, especially for the multi [indiscernible] analysis, right? So we don't need to send. We still send all the samples to the lab, but we have those at the same time that we are drilling. It allows us to take much faster drilling decisions, accelerate our exploration process for our new [indiscernible]. And in order to summarize our exploration strategy we have [indiscernible]. The first one is continue to maximize what is Fruta del Norte, continue to maximize the good quality of this amazing gold deposit, not only by converting Fruta del Norte, but also extending Fruta del Norte, keep exploring opportunities inside FDN. These are an important source of mineral resource in the short term to us, but at the same time, explore the Fruta del Norte system is the large hydrothermal footprint, where -- we're just beginning, but we have already identified the mineral sectors that possibly could provide additional resources to us in the short term. We have seen a constant track record in five new sectors outside FDN. And we believe that seminal part of the system has explored so far, we are just in the early days of the exploration. So all that I have to talked with you is located in this white square. And take note how large are our exploration concessions in relation to where we are today. And again, our exploration concessions cover one of the most exciting geological environments, not only for external systems, but also for current or systems have large copper ore deposits is covered in the geological environment. And we have several important geochemical anomalies that were not even explored by us. This is one of our priorities is part of the medium and longer-term problem to accelerate our exploration in this highly potential geological environment, covering value, setting, physical setting and possibly generate new targets for drilling in the future. Great example is one of the belts that we have that's called -- that we internally call guidance over our head, Los Lobos, it has 13.5 kilometers with several gold and copper anomalies in areas that we already filed, the hydro-thermal [indiscernible] and that are ready to be developed. I always like to say too long that [indiscernible] system is also another important access to a large mineral book inventory then we can ask David to the company exploring those regional concessions. So, that's far ahead.

So, any questions? Fellas?

Several actually. I mean, starting off with FDN obviously, FDN is looking like just moving on to conversion, you're looking on to expansion. Obviously, you're kind of hitting that 5,000 tonnes per day right now. Where is this going to go? Like I mean you obviously got a or -- but how do we -- how are you looking at this?

I said when we started, this is what's actually really exciting because now we're seeing FDN is now that it's just the start. We actually -- you've seen what Bonza Sur looks like through those models. Let this be an open pit type operation. We have done preliminary metallurgy at our site, samples are at the labs right now asking full metallurgical program. Metallurgy actually looks a lot simpler. Essentially, we're getting 90-plus percent recoveries just with the con, location and gravity. We could be looking at what could this look like, building another mill that's 10,000, 15,000 tonne a day with open pit operation yes. We're talking about -- we've been continually trying to improve production to give us and be able to maintain that 500,000 ounces a year, we could be looking at now is a step change and we're going to be going through -- we've got a couple of days planned at the end of October really kind of blue skying it. The key is all this work on your mind is on the [ Lasarte ] concession that's covered by our exploitation agreement. And all of this actually is within the operative area as defined by our environmental management plan. So we definitely would have to look at an amendment to our environmental permits, but we're not looking at a sort of like a brand-new baseline type environmental. It is exciting times, like what does FDA look like in five years.

And then just -- I mean you've touched upon Bonza Sur, obviously, and in terms of -- it could be an open-pit opportunity here. In terms of the resource update that you're planning to kind of provide in 2025 where is the cutoff point there? And then secondly, it just keeps getting -- the stride keeps extending you've got potential on the East and West, I think..

I've been kind of pushing the team to say we want to put our resource estimate out Q1. I would love for you to be calling, "Ron, you said Q1, and now it's H1. " I'd love for you to call me a liar because the reason we push it to H1 is because we don't know some of the drilling that Andre has just started. We just started putting some holes to the East. Yes, when do we put a pin in it if there's a math problem to have. So it may get pushed, we originally -- not that long ago, we're talking about Q1, but that may get pushed out to a latter half of first -- latter part of H1.

And within that resource then, I mean, what kind of spacing are you looking at? Is this going to be more inferred? Are you going to move towards...

Andre?

So this is on the top in the first 300 meters we obtained this to cover a minimum of 100 meters drilling space. But of course, for example, if you do assume that we are going to mine just the best part of the system, the veins and [indiscernible] development around operation possibly, we need to have a target drilling spacing. Actually, even for FDNS, for example, that's a vein type of mineralization, we do understand that's a minimum of 50 meters drilling space is acquired, right? But actually, what we obtained in Bonza Sur is to cover the entire 1,800 meters by 100 meters spacing between holes.

Now stop there and pass on.

And that would the 100 meters spacing would get you inferred category or NII?

Possibly, we know that easily for inferred. Let's see what the biography that was, but maybe I have no doubt, I already worked on deposit, that's 100 meters working enough for indicate open-pit search, right? So let's see. But in [indiscernible] no doubts that we're going to cover 100 by [indiscernible], but possibly part of this, we could even consider as indicators. So it depends of the [indiscernible] and that was the geological model is reliable as well. Just remember that it has only 15 months of drilling. Bonza Sur just now became a high priority target just after the second quarter of 2023. So just now really accelerating the exploration at Bonza Sur but as I saw, it's a really continued mineral envelope and can be a great opportunity for us.

We have 11 rigs in total churning, right?

Yes.

And how many of those 3 underground and 8 surface. Of the 8 surface, how many?

4 [indiscernible] in order to accelerate. Of course, comparing Fruta del Norte to several other exploration sites that I worked in the past, so it's much are more challenging. Technically say in terms of where we can build [indiscernible] have several. We have been to follow several environmental procedures. The area of the building platform, things like that. So sometime takes more time. But after we have 4, they could even have more rigs at the Bonza Sur in the near future.

And how many more drills would you need to drill to that 100-meter spacing along that 1,800 strike of Bonza Sur?

Obviously, we're almost there.

How that drilling?

Yes, we are almost there. We have a several volume resource that it could be reported, but we didn't do that.

What's changing, Kerry, is that instead of drilling to the east, we've started moving to the east of Bonza Sur.

East of Bonza Sur?

Yes.

The east is where you get higher grade?

No, we haven't announced anything yet on [indiscernible].

The east of Fruta del Norte, yes. Based of Fruta del Norte, [indiscernible].

No, we're tied to East of Bonza Sur.

Maybe I can return. But yes, because we're still exploring the east of Fruta del Norte. And now we are concentrating in the east of Bonza Sur and we have announced some -- all our new holes that we have reported are in the main Bonza Sur. And now we have just explored the hydro-thermal operation to the east and we are [indiscernible] is still set the same system.

So the outdated resources, what areas will it include?

Well, we're looking at an updated resource estimate for FDN which would be in Q1 of next year. So that's FDN proper. Bonza Sur it would be a new resource because it has a potential to be like a different type open pit and that sort of thing, and we've looked at it, probably separate 43-101. Not H1, I guess, now I used to be saying Q1, Maria, as you know, but now probably H1 based on continued success he's having.

What about the East areas -- Okay. That's fine but is it inclusive of east areas? Like as other areas?

No, I think the East is still too early I mean you've still got, we have just scratched the surface opportunities.

Yes. We have just received the first results.

And you've seen the geophysics is generating a lot of targets for us. So and just some work we need to do in the east.

After the Norte east.

If you put at 10,000 or 15,000, that's the kind of nail that that's your [indiscernible] you're thinking also that the grade will be lower, if I understand?

Yes. If your open pit, we're probably preliminary, just blue sky, we were hoping to this probably 2 gram per tonne. So another 200,000, 250,000 ounces, actually.

Just on [indiscernible]. So I mean you're going to be trying to get ahead of myself here. So when do you expect to put out like a PE or some sort of reports post the actual result.

We're lending group company, so you never take the foot off the accelerator. So ideally, we'd be looking at a resource assessment in H1 a PEA by the end of next year.

Next to 2025?

Yes.

And will that main MRE for Bonza Sur include Bonza east? Or that's...

Depends on how much continued success Kerry he continues to have, right? That's the whole -- it goes back to what was said about [indiscernible] . Key is when you put a payment.

After we have 2 rigs who will cater to the East especially because most of the drill holes inside the [indiscernible] have been concluded. Let's see what the results was.

And if you want to deliver an MRE in second quarter when would you have to cut the drilling off, but that has to be February?

Yes, maybe in March because physiological model has been built day after day. So I think -- and that is how it fill the source categories. So I don't think that's going to be so difficult, so critical. I think that full-time can reduce.

What about the cost on the open pit? I mean, it would be -- because you -- it's a lower grade.

It's too early to tell. That's some of the stuff we're going to be going through later this year.

But it's really high. I mean because they're not mining it.

[ Harry ], do you have a comment on that?

Yes. I mean 10,000 to 15,000 tonne a day mill like we'd be mining at I don't know, 5 or 6 strip or something like that. So we'd be mining at 70,000, 80,000 tonnes a day of an open pit at a total mining rate. So I mean this would be comparable to some of the big open pits that you see here in Ontario, where you're getting unit costs that are in the like $2, $2.50 range per tonne mined. So process costs would be $10 a tonne like -- so your -- it's a totally different scale of operation than underground mining with a 5,000 tonne a day mill, we would rightsize it to generate enough margin for an open pit like that -- a lower grade open pit.

Kerry?

Just kind of a leading question on what you said earlier about the concession discussion, the environmental issues. When does that trigger again in terms of ownership or operation? Otherwise, you bring a joint venture partner at one point in time, I have to say -- does it trigger a different format than what we have?

Bring a joint venture partner, and we're generating in on time. Joint venture partners in is because they don't have the cash to do it when we've got the cash. So why wouldn't we want to share something? So juicy as they. Just one question then we'll move on to sustainability.

So just in terms of then obviously, Bonza Sur looks like your next leg in terms of how you're looking at [indiscernible] in Ecuador right now.

Today, as he hits the way he's going...

Based on that then, how are you then looking at any sort of M&A outside? Clearly, you don't really need to do anything based on...

That's a good question. Our focus obviously is on organic. What you're seeing today is why we say that now. As our focus is organic and where we see some great opportunities to create shareholder value is organic. It doesn't mean that we're not looking for opportunities. We did look at something and unfortunately, weren't successful earlier this year. But it doesn't mean you stop and -- you never know when something may turn itself up. You got to remember, Lucas Lundin used to say, "I don't want to get after rent-backs I'm never getting into the gold again." I don't understand gold then you have lunch just down the street. Just across the street here in 2014, with Peter and Jeff at Kinross. And I got the phone call after lunch, what do you know about Fruta del Norte and it has Lundin Gold is today. You've always -- the Lundin Group company, we're always looking for opportunities. So this is our focus, but doesn't mean we stop looking.

And let's say, if Bonza Sur becomes go ahead or green light. Obviously, it's looking like an open-pit situation. There's going to be a development, obviously, according to that. Then would your strategy change in terms of how you're looking outside in terms of development versus a producer?

Possibly. But yes, I think, again, what really drives us is looking for opportunities.

What stage is?

Yes. I think sometimes you don't like to put the blinders on yourself. You need to stay focused, but you never know when an opportunity presents itself. And I think that's one of the real -- if you look at the history of the Lundin Group, that's what's been -- I think one of our key successes is always keeping your eyes open and always -- don't shut yourself in to say, I'm only focused on this station. Always be looking for opportunities. But at the same time, you don't allow yourself to get scattered or whatever, you have to quickly just know if that doesn't work, but keep your eyes open.

I think it's a good point as well as that. Now maybe a year or 18 months ago, and we talked to all of you guys about how, from an M&A perspective, ideally, the perfect in that we would have been looking at was something development, right? But now we do potentially have some of this development in front of us, which allows us maybe to start looking at some late-stage opportunities. Sorry. Sorry, that's what I meant. I said later down the line. So in fact, if anything, it grows, what we've be looking at and kind of extends the different opportunities that we can look at. So it grows that pool even larger.

Okay. Well, we have time for questions later on, but let's go over to lunch break. Thanks Andre. [Break]

Okay. Good morning, everyone. It is a pleasure for me to be here today. Very difficult to match Andre's presentation, you saw in that presentation, the potential of FDN. But also, I have seen some other projects with high potential, amazing potential but also with bad relationship with communities, the governments and those projects have many challenges to move forward. So that is why I think it's very important today to cover three main topics. First of all, the political and economic and mining landscape of Ecuador, very important. You saw from Ron, Terry and Andre's presentation that FDN has a remarkable potential that goes beyond FDN and that FDN is doing great. So that is very important why -- that is why it's very important for you to understand the context in which we operate. And more importantly, the role that we, as Lundin Gold play in that context. We have sustainability strategy that implement as part of -- in that environment, it is important for you to understand, at least in a broad level, our sustainability strategy and the main impacts -- economic social impacts that sustainability strategy has caused. So to start with politics, a lot of things have happened during the last 12 years. For the ones that were here in the last Investor Day, many things have happened in Ecuador, the most important one is that we have a new president. So President Daniel Noboa to go office in November 23 that happened after a process called muerte cruzada, so cross death. That is basically a constitutional mechanism in which former President, Guillermo Lasso, he called the National Assembly and called for early elections. So basically, the resolvement of the government and the Congress. He was having some challenges with the National Assembly. He was in the middle of an impeachment process. So he needed to activate that muerte cruzada mechanism. Daniel Noboa managed to position himself as a clear outsider of that election. So after that, he became President but it is important to mention that he inherited first an unprecedented security crisis, I'm sure you all have heard of that, but also an unprecedented fiscal and economic crisis, which I will elaborate later. The security crisis escalated to its highest level early this year. I'm sure you read a lot about that. And as a response to that, he activated actually another constitutional mechanism that it is called internal arm conflict, basically an internal war. So that war earned him a lot of political support. He should mainly decrease focus on the state of emergencies that allows him to send military, especially to the coastal provinces and cities in which the situation was harder. He were with the police. And that earns him a lot of support that basically -- he reached approval ratings of about 80%. So he became a very popular President in Ecuador early next year -- early this year. And that allows you to work with other key institutions in Ecuador. So first, the constitutional court and also the National Assembly. He passed many bills. He sent many bills to the National Assembly that then became law through a mechanism called [ organ ] economic laws. So those were mainly focused on tax reforms, energy reforms and others, but the tax reforms included, for example, increase in the VAT from 12% to 15% and also temporary taxes that were mostly focused in the private sector, so private banks and also whether [indiscernible] calls large taxpayers. In April, so later that quarter -- first quarter, he called for a national referendum, that national referendum had many questions, most of them focus on security. Again, you wonder most of the questions of the referendum and that allows him -- allowed him to keep those high levels of support. After that, he took many challenging decisions, for example, the elimination of subsidies for the ones that follow Ecuador that has for former presidents such as Lasso and Moreno that has caused massive national protest. So they needed to revert that decision. This was not the case, he managed very nicely the situation. He reached agreements with the transport sector, for example, and we didn't have those massive protests. As a result of this unpopular measures, his support has declined in recent months. Although his support is now lower he is still a very popular President in Ecuador. And if you compare his approval ratings with other countries from the region, he is one of the most popular presidents in the region. He has high possibility of relationship in '25. I will elaborate on that. After all these politic dynamic, he distanced himself from the COGS -- from the National Assembly. That is, I think, to maintain his like name of his position as an outsider. So he calls himself and his cabinet and his government the new Ecuador, nuevo Ecuador against all the old Ecuador, so viejo Ecuador. And that it is very attractive for the young population and general for the population in Ecuador, the citizens. So another important aspect to highlight is that his opposition is very weak now. It's weak and also it's fragmented. As an example for that, next year, in 2025, we will have elections, and we now have confirmed 16 candidates for president. So you can imagine how divided his opposition is. As I said, he remains favorable to win the next year's election. But now this is a different moment because he's the favor. He has possibilities to win next elections in what we call first round. But if not, he will be definitely the first during that first period, and that will allow him to have majority or at least an important part of the national assembly. That didn't happen last time. And that is why he is having now some challenges with the congress. That will be definitely useful for him to move forward with other tax reforms or other legal frameworks that he wants. This will depend. We are having many challenges. I will elaborate on that, but this will depend also in how he manages, he keeps managing security and other economic issues that are now challenging for Ecuador. As I said, we will have elections next year, first around February 9. And the second round will be in April, if we have a second round. So we have a new President and a new Congress in May 2025. Regarding economics, and I said that he inherited a very challenging fiscal and economic situation. We have a weak macro figures, so GDP debt, deficit, et cetera. This is not a new thing, not a 1-year thing. This has come from several years due to multiyear economic stagnation that also causes an important lack of investment in certain areas that are key for Ecuador, such as health, infrastructure, education, agriculture amongst others. What are the key areas of concern of citizens now in Ecuador? Security #1 by far, you know why. But all the others are somehow related with the economic situation. So unemployment, arrears amongst others. IMF, World Bank, other multilaterals are -- even our central bank are forecasting almost 0 growth in Ecuador for next year and for the foreseeable future. And as I said, there are persistent government challenges. Arrears is definitely one of them with local suppliers, with public sector suppliers, with local governments and with important institutions such as the social security. This government has improved that situation, but it is still a structural challenge. As I said, many, many new taxes, tax reforms, structural reforms, such as the reduction of subsidies and that has allowed him to improve the fiscal situation. They are very positive about the second half of this year. Public investment will increase. The government said that on an ongoing basis, thanks to these reforms. Another key issue here and good news is that the IMF approved a couple of months ago a loan -- a $4 billion loan to Ecuador. And that has also opened the door for other multilaterals to start conversations with Ecuador about another and complementary loans, which is very important. And that actually stabilized our economic situation that was critical at the beginning of the year. Equity for all these aspects that I mentioned Ecuador is formally in recession. That is because we have faced consecutive economic construction in many quarters. And Noboa and the next president will need to deal with structural challenges of the economy, such as labor flexibility, there's a political situation stability, historical low foreign reinvestment, among others. And after these two slides, I want to have a quick reflection as an Ecuadorian. Last two governments. The last two governments were ineffective and inefficient, a lot of industries, a lot of sectors were basically frozen on hold for many years. Some of them faced important setbacks. And now we finally can see how in just -- remember, just 10 months, less than a year, things are moving forward. So I can -- despite all this challenging situation, I am optimistic about the future of Ecuador. What role mining in place in that landscape is key. Every stakeholder, analysts in Ecuador, economic analysts, political stakeholders recognize the importance of mining in this context. For example, the World Bank just published a report a couple of months ago about what are the three main alternatives in the short term for our economic situation. What they call responsible mining is by far the most important alternative in the short term. And as I said, this new government has publicly back up responsible mining. I am sure you all know that the presence that the government had in PDAC, during PDAC early this year, the president himself can hear and back that money. And that has been translated into improvement in permits, licensings and other things that I will elaborate after. So what is the role that we play as Lundin Gold in that environment? We are a very important part of the industry. Ron talked about production, exports but we represent between 35%, 40% of the total mining exports in Ecuador and mining itself is the fourth most important product for exports of the country. So you can imagine our role in this debate. We have a very good partner for that, the CME, that is the Chamber of Mines of Ecuador. And we both together are having constant relationship and ongoing conversations with the President himself, his cabinet, his advisers and his main -- his team. That is not only focused on the executive, and that is important to mention. The National Assembly, the Congress has on their plate now important reforms that can either benefit or harm the mining industry. So that is a key stakeholder. And we have an ongoing relationship with them, conversations. And for example, proof of that is that Ron and I were a couple of weeks ago at Fruta del Norte with more than 10 principal National Assembly members, the most important ones in what was our first ever visit from a group like that towards the end. And what it was amazing is to see how their mindset change before and after the visit regarding mining and what they are saying now about mining. So important to mention. Illegal mining is a problem. It has expanded a lot in the country. There is a clear link between illegal mining and narco traffic. These oil prices also exacerbates that challenge. So there is an increasing problem with illegal mining in the country. And last but not least, we have experienced very good news for the sector for the mining industry. So as I said, last governments, almost 0 advances regarding mining. There were many projects on hold. Now two of the main projects received their main permits and move through several judicial decisions and now have green lights to advance. These are midscale mining projects, so Domo and La Plata. And not only that, well, those will be, important to mention, those will be -- those are about to start construction and will be the first mining projects that starts construction after at the end. That was '17, '18. So you can see how the mining industry has been frozen for a while. Besides from that, the government just signed exploitation agreement, for example, with Cascabel SolGold. The government has announced that the final stages of the negotiation of the exploration agreement with Candrecos, another important project, and they are about to sign an addendum to the exploitation agreement for Mirador, the other operating mine, Chinese. So you can see how the sector is advanced. That was not happening with the previous governments. So what is our role? And just to update you, Terry showed some of these maps. But where we are now? This is the Amazon region -- oops. This is the Amazon region in Ecuador. We are located in a province called Zamora-Chinchipe, which is the green here, you can see. And that province is what we call ring 3, we divide our area of influence, our closest area of influence into rings that basically means our priority is focused towards those rings. So ring 1 is Los Encuentros, ring 2 is the county of Yantzaza and ring 3 is the province of Zamora-Chinchipe that I just showed you. So within that province of Zamora-Chinchipe, remember ring 3, we are located in the cantons so is a city of Yantzaza. This is the city of Yantzaza, more than 20,000 inhabitants. And this is what we call ring 2. The closest town, we call it in Ecuador Paris. Parroquia to our area of influence is Los Encuentros. So Los Encuentros, you can see here, is a town of almost 4,000 inhabitants. And it is what we call Ring 1. So our priorities, our local procurement, our local hiring, our community investment are focused divided on rings. Another important aspect to mention is that within FDN, direct area of influence, no one lives. There's no one there. That is important when you think about [ EPIC ], for example, and other permits that are part of our environmental plan. Sorry about that. So if you read about other mining projects in Ecuador, you can see how they kind of have challenges at the national level with local authorities, with national authorities or with politicians, but they have many challenges. They face many challenges at the local level, either with politicians or also with indigenous or activist groups. That is not the case for FDN. So in our case, we have an ongoing engagement and sound relationship with local authorities and local communities. And also, we have developed from the very beginning, a sound relationship with the main -- the main indigenous group from the province, that is the Zamora Chinchipe Shuar Federation. What are the key local issues, illegal mining, as I said, is number one, and security. But also you can imagine due to the central government fiscal crisis, they have priorities towards local procurement, local hiring, increase of investment from the mining companies. And also local governments and citizens are concerned about the increase of the presence of gangs and criminal groups in the province. And I cannot stress enough point #6. We have a very good relationship with our local stakeholders. That is the government, but that also is communities, means company -- private companies, among others. And when I say this, it's not just PR, we measure this, and I will elaborate later on that. So what is our role in the middle of this challenging context, national and local context. We have a comprehensive stakeholder engagement strategy. That strategy is focused on delivering tailored messages to these key stakeholders on the importance of mining, but most importantly, on the impacts that FDN -- social and economic impacts that FDN is having. We have very good partners for that. One of them, I already talked about it, is the CME, the Chamber of Mines of Ecuador, but we also work with a range of partners, for example, a group of ambassadors that want to foster responsible mining in Ecuador. We monitor the implementation, and I will elaborate on that of a community dialogue process, [indiscernible] roundtables. And we have an important component of our stakeholder engagement strategy is the communication strategy, internal, but also external. So we measure how we are communicating to our -- to the main stakeholders, nationals and locals. And we divided that for ranges of agents, for example, and we measure how we are getting to them. It's important to develop capacity in the local governments to access other sources of funds, not just mining. And given the national level constraint, maybe international sources of funds. I will talk about, but we have a comprehensive community investment plan, which is key at the local level. And also, as I said, visits to FDN. We are the industry. This is a new industry. No one knows at the national level the industry. So we organize permanent visits to FDN. We receive between 2, 3, even in some months, 4 visits a month from different stakeholders, so media, politicians, NGOs, other mining companies, among others. And I said that we have a good reputation that we have a strong social license and we measure that. So this, what you see here is an international rigorous methodology to measure social license. So basically, the acceptance that stakeholders have towards the mining industry. That has been taken by a Colombian group into a report that is called Brújula Minera, so Mining Compass and basically compares how is the perception of mining industry among all these countries. What we did is we took their methodology, applied into our yearly perception surveys and make it comparable. So you can see there where Yantzaza is located, which is the city in which we operate. And you can also find where Ecuador is located. So 2 things to highlight. Ecuador is increasing its acceptance towards industrial mining. Now it is in the threshold of acceptance, but still a lot path to follow there. But if you see Yantzaza, when they can now experience the impacts, social and economic impacts of mining, we are in the top of this chart. So this is very important to highlight.

It's important to mention Juan Jose, Ecuador last year in '23 was actually in a legitimacy threshold. It's moved up now to acceptance.

And that is thanks to our like work through the CME through the Chamber of Mines. We have seen how the mindset at the national level regarding industrial mining is changing. So when people see these acceptance levels, our reputation at the national level and local, they ask me a lot, what is your secret sauce for that in such a challenging environment. So my first response is we have a comprehensive sustainability strategy. So as Ron said, everything what we do is embedded in ESG. So everything what we do is respond to a sustainability strategy. What I should highlight here is that this strategy is not part only in my team, in my department, but it is comprehensive, cross-cutting to all the departments and areas of Lundin Gold. So we have headline targets for each of these pillars. We measure how we are advancing towards those targets. We have a set of KPIs for that, and we monitor how we are doing every quarter. As I said, community investment is a key part of the sustainability strategy. And as mentioned too, this community investment responds to that strategy, and we track every of those agreements, covenants that we signed at the local level, how they are moving towards the targets I mentioned. So you can see here that we have invested since the very beginning, almost $40 million in this regard, a big part of that through one of our main partners, the Lundin Foundation, and you can see the main areas of investment. I will not spend much time in these 2 slides, on the next 2 slides. But what I want to highlight here is that since the beginning, we had a strategy. This was -- these are our main milestones of the sustainability strategy that we implemented during FDN construction. The context was different. The priorities of the communities and local stakeholders were different. So you can see how many projects and milestones that we achieved during this time. You can find projects focused on education. There was a gap there. But also the main priority was creation of labor opportunities and other economic opportunities. So we needed to close that gap. We needed to develop suppliers, and we also needed to develop capacity in local people that wanted to work for FDN during operations. During the pandemic, a lot of our community investment was focused more on the health issue. But after that, we developed and now we are implementing the sustainability strategy you just saw. So now we have infrastructure projects, education projects focused on both infrastructure, but also the quality of education. And all of -- most of our investment is focusing on Los Encuentros Parish, So in 1 Los Encuentros town. And you can see here many projects such as the urban renewal or all the projects that we are implementing that are focused on key infrastructure for that parish. We are changing their lives, and I will show you that afterwards. I will just go through some of the main community projects that we're implementing now in the last year. So the first one is a recreational, educational and mental health program. This initiative responds to many challenges, situations that are very common in rural Ecuador and especially in the Amazon region. Name it alcohol abuse, drug abuse, family violence, for example, and a lot of other difficult challenges to approach, teenage pregnancy is another one. So what this program do is approach that issue through 2 components. The first one is extracurricular activities, keep these kids, young students occupied during their free time. And the second component, and I think that is the beauty of this program is mental health. Because -- and actually, this is a very innovative approach in Ecuador, and it is becoming a more relevant issue. That second component is directly connected with the first one. So there's a methodology for that. We partnered with an international Mexican NGO called Educación para Compartir, so education for sharing. They have a methodology to approach challenging structural issues through the game through soccer, basketball, dance and other activities. And we are registering how the situation on those challenging and social aspects are changing. So to move on with Junior Achievement Ecuador. As you should know, there are many challenges in rural Ecuador, especially in the Amazon region. One of them is education. So we needed to fill that gap. When we arrived, almost 0 students were accessing to university. So this program basically focused on, first, eliminating dropout rates in school, to get these kids until high school, at the final years of high school. Once they are there to access the main universities of Ecuador. And the third component is to avoid dropout from the universities. So it has 3 components, and it closes that circle. And I just want to highlight with this slide Evelin's case. Evelin is a girl, a lady from Los Encuentros from the Parish that was beneficiary on each of these stages. So Evelin received support to get to the final years of school. Then to access university, and we understood that she was having challenges to keeping university. So we supported through that path. Now Evelin is one of the first clinical psychologists of Yantzaza, so the city, and she is about to be a master's in human resources. So you can see how that circle is closed. She's back in Los Encuentros working for the mental health program. And this is just an example of one person whose life has been changed. I am proud to say that we have many examples of that. Kids are returning from universities to Los Encuentros and that almost 70% of them now have a job. Agriculture. This is a traditional and historical activity in Zamora Chinchipe. So how we can improve that activity. You can find here many components for that. First of all, technical assistance through veterinarians, but also vaccination, for example, of livestock, very important. Once they have improved their products, how they can access markets. ECOLAC is focused on milk. They want to explore new products, Pitahaya, so dragon fruit. And the most important here is Somos Semilla former Takataii. That is our local -- our main local suppliers, local procurement program. So [indiscernible] is a local supplier, now is the third largest private company of Zamora Chinchipe. They need a lot of food. As Terry said, we have the best food at FDN [indiscernible]. So they need a lot of food. That food as a Canadian company has very high standards. So how the Lundin Foundation can support local farmers to reach those standards and to become suppliers of COP, [indiscernible]. And we have many cases, successful cases here, eggs, pork, meat, fruit, vegetables of local farmers that are now selling to COP. And you can see through Takataii, now Somos Semilla, the linkages we are creating. Indigenous groups, indigenous people, I talked about the importance of them for the mining industry. If you see some other cases in Ecuador, indigenous organizations are the main opposition for certain mining projects. In our case, that is very different. We have a sound relationship with Zamora Chinchipe Shuar Federation. We created a trust with them from the very beginning. And now we have a general agreement, so a [indiscernible] that it identifies their priorities and also how we can contribute to those priorities. This is just a sample of the programs that we implement with them. They have 2 main priorities: rescue of their values, cultural values and a fair one from my side -- from my point of view, that is the generation of income for their people. So you can see how we are implementing productive projects such as the Cocoa farming, now the Phase III. They want also to explore in other projects such as panela processing through sugarcane farming. And they want also to become part of our health education program. That is difficult because there are bigger gaps with Shuar. But for example, now they are part of the Junior Achievement Program that I mentioned, and they are going now through the university. And I want to highlight the Shuar Num Company case. This is a 100% owned Shuar company that at the beginning was focused on tourism. Now it's a company that is focused on all those aspects and that uses the inputs, for example, from the Cocoa farms to sell their products, chocolate, Guayusa water, coffee and others. They have a brand for that now. They are accessing other markets outside Zamora Chinchipe. And what is the next step that for me, it will be a challenge, definitely, but it is a nice challenge to have is that they want to become mining suppliers. So we are working in early stages in a project focused on the distribution of supplies for our mine fleet. It will be challenging, but we have a path for that, and we will use the Lundin Foundation to implement that project. Hopefully, next year, I will have very good news about that project. Women. Women is -- they are another vulnerable group, especially in rural Ecuador and in the Amazon. There's -- you can call it a historical debt towards women, especially in the Amazon. So what this program, Soy Emprendedora, I am an entrepreneur, seeks is to position the importance of their role into business. So far, we have more than 100 beneficiaries that have received training. And from that group, we have picked 24 businesses to receive seed capital and also and most importantly, technical assistance for 1 year from the Lundin Foundation to accelerate their businesses. You can see here, for example, Sonia Sarango, she sells tonic water with Amazon plants. Actually, it is very good for [ GNZ ]. And she is only one example of those 24 small businesses that now are accessing to other markets outside Zamora Chinchipe. You can see in the bottom of the slide that this initiative has now become one emblematic project in Ecuador and all the awards and recognitions that they have received. Local procurement is very important to create employment, to create linkages at a local level. So the Lundin Foundation has a methodology for that. It is called NEXO program. It has been applied in other places of the -- in other operations of the Lundin Group, and you can see here what is the process of NEXO program. Through NEXO, we have developed many stages for local suppliers. During construction, we develop big local suppliers as [indiscernible], the case I mentioned it, but also many other cases such as light vehicles companies, heavy vehicle, hardware stores, among others. Once those business were consolidated, we started with the creation of next -- new programs, new local suppliers through NEXO II during our first years of operations. The beauty of these programs are that most of them were created from scratch, and you can imagine the challenges that we faced. I am glad to say that now those companies are consolidated, and we are moving forward to NEXO III. That is looking other alternatives to develop local suppliers. It is challenging. We are pushing a lot supply chain team, but we will give an extra mileage here. Shuar Num will be one of the first beneficiaries of this NEXO III program. And just to end with this section, I want to talk about our enablers of success. The most important 1 definitely is participatory dialogue. Upon our arrival to Ecuador, we needed to create a solid base of trust among our stakeholders, national and local. At the local level, we developed and implemented a dialogue process. And I should highlight some unique things about this process since it has been an ongoing process from 2016. We don't own the process, it is not our process. It is led by other parties, in this case, during the last years, the local authorities are the ones that own the process. We are part of it, senior managers and senior staff of Lundin Gold and of FDN are closely engaged with the process. They are decision makers. So a lot of decisions should be taken during the dialogue roundtables. As I mentioned it, it happens every 6 weeks. It could be 6 to 8 weeks, but since the very beginning in 2016 this has been an ongoing process. So that talks about the importance of the process for local people. We have been through different local governments and also through a pandemic and people keep considering this an important process. You can see here what are the key thematics that we discussed during the process, but as I said, is one of our main enablers of success. Partnerships is the second one, you saw our sustainability strategy. Many topics, many projects and we are a mining company. So we need the best partners to implement those projects. This is just a sample of our partners, all come from public sector. So national level. You can see there are the public institutions, but also local authorities. NGOs, national and international, academia amongst others. And the final enabler of success is being transparent. Being transparent with you and being transparent with all our stakeholders. So we have one important mechanism for that. That is our sustainability report. I encourage you to read it, but also at the national level, we have, as I said a strong communication strategy that is based on social media. I also encourage you to follow those. And just to finalize, I just want to talk -- to touch base on the impacts that strategy is having in Ecuador, social and economic impact. To start with you can see here, what we call the FDN virtuous economic cycle. It is for '23 and you can see the main components of it. Ron already talked about our production. That production is translated into exports. Remember Ecuador is a dollar economy. Those exports are key. But more importantly to get that production we create many employment -- a lot of employment, direct, indirect and through linkages and we also buy a lot locally. And by locally I mean national, but especially in Yantzaza. So you can see how we bought more $200 million in '23 in Ecuador in '23 and a big part of that was in Yantzaza. For reference, Yantzaza is a canton, a city that before our arrival had a GDP between and $60 million and $65 million dollars. So you can imagine that level of local procurement. The impact that it has. And last but not least, that tax is very important. The mining industry now is the fourth largest tax payer in Ecuador and we are an important part of it. In '23 we paid about 110 taxes and royalties. And just to close this presentation, I want to talk about 2 realities that we are changing here. One is Zamora Chinchipe. The mining industry is changing the reality of Zamora Chinchipe, the province. And afterwards, I will talk about the reality of Los Encuentros that is our main area of influence. But for Zamora Chinchipe some context there is important. The Amazon region has always been the poorest region of Ecuador. And you pick any social economic indicator, the Amazon region has always been -- faced challenges on those indicators. Important to mention that in the North Amazon most of the oil industry is located there. Despite that a lot of poverty. So now what is happening with Zamora Chinchipe is that reality is changing. Here you can see employment. Now Zamora Chinchipe is close to the national average and you can see how it was one of the few provinces that increased their formal employment during the last years. And again it is by far the highest -- it has by far the highest formal employment among all the Amazon provinces. Poverty, there are 2 ways to measure poverty. By income, it is commonly used by economists and also by national institutions -- national statistics institution, but you will see later by unmet basic needs that from a social perspective is very important. So regarding poverty, you can see here that Zamora Chinchipe now is a green province that has been, again, one of the few provinces that reduced poverty and that reduced it significantly. And as you can see the trend, it is the lowest -- it is the province that has the lowest income poverty amongst all the Amazon region. And if we analyze UBN, so unmet basic needs poverty, Zamora Chinchipe is doing even better. What I want to highlight here is that Zamora Chinchipe, an Amazon province is basically at the same level that the national average. That for me is remarkable. When you talk about the economic situation, sales is a nice indicator to analyze that. It is related to taxes, to wages, to employment to others. And here, you can see the comparison between the first half of '24 versus the first half of '23 regarding this indicator, sales, for all the country. Remember that this is a period in which we have faced 1 of our major economic crisis. Zamora Chinchipe increased its sales by 36% and was the province with the highest growth rate in sales of all Ecuador, which for me again, is remarkable. And this is my final slide, and it is focused regarding Los Encuentros, the parts, the town that is our house, our home, basically. We are changing the reality of Los Encuentros. We are changing lives. And you can see here why. I will not go into detail in all these aspects, but you can see, for example, regarding the employment that more than 90% of the economic population has a job. That means from every 10 persons in Los Encuentros that want a job, 9 have a job. An indicator that always surprised me is poverty again, UBN. We saw for Zamora Chinchipe. Now we are seeing poverty -- UBN poverty for Los Encuentros, a rural town with the spread communities in the Amazon region. Poverty now is basically at the same level than the national average. And if you compare that with 2010, poverty was in the levels of 84%. And just to close on 1 emblematic case for us. I think we all know here the importance of Internet in our lives. So in Los Encuentros, the household with Internet, so the access to Internet by households was 16% in 2015, I think. That makes sense. This is a town with a lot of spread communities, almost 1,000 -- yes, I would say, 1,500 people live in the main part of town. The other live in spread communities. Now 100 of Los Encuentros has access to Internet. That is the first parish in Ecuador that has this kind of access to Internet. And I will say, if you compare with other towns of the region with similar characteristics, will be 1 of the only that has it. So you -- I'm sure Finlay will share with you this slide. I encourage you to read it. We have a lot of data. I happen to be a data freak. So we measure everything in what we do. The impact that we are having, it is not just PR. We are changing lives, and we can prove it. With that, I will pass the floor back to Ron, unless there are any questions.

Just a quick question. Typically, mining attracts a lot of population because the income, steady income. How much population that went up in Los Encuentros?

Los Encuentros, it is a very good question, and we measure that. We have local census. So we did a census in 2015. And then we updated a household based census in 2021. And what we have found about that is that the migration rate to Los Encuentros is very close to the normal migration to any town in Ecuador. I think that is also a result of the location of FDN. The workers, maybe Terry can talk more about it, but in other parts of Ecuador, workers move with their families to work in sites, right? In our case, we have different shifts, and that also have contributed a lot for that reality. But yes, we measure that. And as I said, the increase in migration is very close to the normal rate in other -- that other cities have in Ecuador.

I've not seen the most interesting and most expensive spice vanilla. I think the other centers have vanilla plantations, and you don't have any?

No. And we also make sure inflation, for example, inflation is also another...

Vanilla spice?

Vanilla, no, I don't think we have it, but no.

No. We have never been a producer of vanilla.

Which was up north, further north, inland?

No, we were talking with Terry today about that. And the beauty of Los Encuentros is that it has different altitudes along the town. So there are a lot of things growing there. The people experiment growing products. Farmers experiment a lot, but no, I haven't heard of it.

You had said that Congress was considering some reforms, which would potentially be negative for mining. What are those?

Well, there are many there. Some of them focus on mining. For example, there's actually mining reforms, reforms to the mining law. So you can imagine how they can -- that can benefit or harm the industry. But there are other private sector laws, such as, for example, disability law. They want to increase the percentage of people with disabilities working in private sector, including mining. There are many other -- many other laws. We have a track and a mapping of which of those laws can be more, let's say, can harm more the industry and which others and we try to advocate at least for the most important ones. What is important to mention here is that we have laws that can affect us as an industry. For example, there's an Amazon law. That is focused on local procurement and local hire for people from the Amazon. Very high percentages and numbers there that makes impossible to have that kind of workers. But there are other laws that can affect the industry as a whole. So we work as Lundin Gold. We have a national assembly strategy, you can call it, but also a CME. Of course, the first 1 is more focused on the laws that affect us. But the second 1 through the Chamber of Mines is more focused on the laws that can affect the industry. So we have both arms to advocate on those laws.

Two questions. First, what is the deficit in relation to GDP in Ecuador now? And the second one, is your workforce unionized?

Unionized? Well, we don't have...

No, we're not unionized.

So far, we don't have a union. What I should mention about the second question is 50% of our workers are local, which is a very high number if you consider that mining is a new industry. Mining is new in Ecuador. More than 90% of our workforce is Ecuadorian, which is very important, too. What -- for example, what you asked about the laws, what the Amazon says, the Amazon law says is that it establishes that 80% of our workforce should be from the Amazon region, which is impossible to reach. So we are talking to them and educating them to understand how the mining industry works. But I think your first question, I will get back to you later with that number.

And what is your plan to deal with the illegal mining problem in the province?

You say the plan from the government?

Not just the province, it's the country.

The country? Well, as Ron said, there are many hot spots of illegal mining. For example, provinces such as Imbabura in the highlands, but also in the coast, El Oro, those in the North Amazon, Napo. Those have more challenges with narco traffic groups, so a lot of violence. There are provinces such as El Oro with cities like Portovelo or [indiscernible] in which there are assassinations, basically the gangs have -- so 1 specific gang, the Los Lobos gang, has basically taken the process plant...

[indiscernible]

Well, the plant from the government is basically using military. Some of the questions that I mentioned are focused on that. So seize machinery, even destroy that machinery or use the machinery for the government. In Zamora Chinchipe, the situation has not escalated to that level. We see an important increase in illegal mining. But it is not at the level of El Oro, for example, that has a lot of involvement with narco traffic groups. The plan basically is to use the military. However, now the military is focused on the security situation in the coast region but that is current. The government is working with international organizations such as UNODC, the illicit crime agency from the UN, to address this issue. They are...

Yes, they are trying to get a lot of international support, U.S. support, but also dealing with corruption within the government. Because part of this is, too, is corruption within the regulatory agencies that they say -- when we see -- if we see artisanal or illegal mining on any of our concessions, we file with ARCOM to have them go in then and [indiscernible] but what happens is the military goes in and boom, they're gone. Because they've got the inside sources that they're paying for this information. So the government is really trying to focus on trying to clean up that corruption. And so kind of trying at 2 levels here.

Big part of it is the strength. They try to improve the regulation agency. So now they have divided again the energy regulation agency into 3. We are back into ARCOM, which is the mining regulations agency that deals with illegal mining issues. But it's a big issue now.

Okay. Thanks a lot, Jose.

Thank you.

I think -- the same with what Juan Jose just talked about is for me personally having lived this now for 10 years is this is showing the vision that Lukas Lundin had. When we went to Ecuador and we told the -- I remember some of the first visits with the church and with local politicians and everything and he said responsible mining can change people's lives. And I think you're seeing over some of these recent slides, how that is really coming to fruition. But just in closing, we've talked about the exciting growth and exciting things. One of the things is capital allocation. And what we want to assure you is that we're disciplined. We're disciplined in how we're approaching this. Number one, pay a sustainable dividend. We get asked a lot, well, why didn't you do a dividend that floats with gold price or cash flow or all this sort of thing? And we've always said from the start, no. What we want to do is pay a dividend that is sustainable, whether gold prices fall, whether we do something on an M&A front and issue equity, we can still afford to pay that dividend or we see some phenomenal growth opportunities, we can still pay the dividend. We've now gone and doubled it because now that money, like I said before, that was going to pay the banks now is -- we can return that capital to shareholders. But again, it's sustainable. The other thing, create organic opportunities. That's what you've just started to hear today about all the work that Andre and his team is doing is creating opportunities for us that then we can use that cash flow to develop those. Some of the questions today, I think many of you are starting to see the potential of Bonza Sur. Well, we've got the cash, the capital allocation to be able to do that. One of the things, too, that we're talking -- Chester and I are talking about, too, is now okay we're debt-free. Well, we got some -- let's add -- let's maybe look at doing something on that side to have an additional tool in the toolkit, if we do more, want to do more to potentially have some -- just a small revolver or something along the line. We should do that. Our balance sheet is there to be used. And last but not least, continue to look for opportunities. And when we see something, pursue it. That's the key. So this is how we look at our -- essentially our capital allocation. It's discipline. You've seen discipline when we talked about how we're approaching the operations. Exploration, I hope you got the feeling that, yes, there's lots of opportunities there, but what really keeps driving and increasing our exploration success is not because we've got the money and we just throw more drills at it. No. It's because of the success we're seeing. By that success, we're increasing our drilling program, and we still have opportunities. It's a growth story. Growth in so many respects, and none of it can be done without the foundation of the ESG that you just talked about. And you had a question?

Yes. So I mean, you talked about -- broadly about what you were looking for in inorganic opportunities. I mean, could you narrow it down? Just like as you see -- okay, so you've got your operation expanding to 5,000, maybe 5,500 then you've got Bonza Sur. Like to you, what's the ideal sort of complement to that sort of 750,000 ounce producer that's focused in Ecuador? Like do you look at diversifying your geographies? Do you look at -- like what specifically are you looking for?

Definitely diversifying geographies for us. It -- we've got so many opportunities within Ecuador. And we get asked that question a lot, well, you guys have done so well, why not take that political capital you have in Ecuador and expand this, there's lots of opportunities there. But no, shareholders, if they want us to do something and do something different, it would be outside of Ecuador. Ideally, today, we've been looking at development stories because that's how we got to where we are today. That's the skill set we have, and that's where we feel we can best leverage. The things we've done that you just heard about, the sustainability side, being able to go in those types of regions. And that's the 1 that we had identified, unfortunately, we were unsuccessful. But that's kind of where we're looking at. But again, that may change, but that's really -- and look, we're not looking at Australia or West Africa, that sort of thing. Our fair way is the Americas.

Would you look at more developed to sort of reduce the risk like a developed country to say, okay, I'm not just -- Ecuador is very risky?

It's depends. What's really going to drive us is the asset. And then those other factors really come into play. But yes, there's -- there are opportunities. There are places that would be challenging.

You have to think, one of the things is the potential opportunities out there, let's call it, the vast majority of them are smaller than what Fruta is right now. So ultimately, your main jurisdictional risk is still going to be in Ecuador? The majority of it will still be there?

So I mean I guess you would be looking for geographies that maybe lessen than your geopolitical risk? Is that fair to say?

Or diversify it, yes.

Yes. I think in general, we're very comfortable in Ecuador, right? And we feel that we have a strong social license there. And so we really don't -- and obviously, we've got a great growth story in country as well that's upcoming. So we don't necessarily feel pressured to diversify for the sake of doing so. We look at it with a disciplined approach. And it doesn't need to be a Tier 1 safe jurisdiction. It's, as Ron said, it's going to depend on the assets.

Sorry, when you said developed, did you mean like a developer that's maybe just about to go into development mode? Or it's like you want to build the [indiscernible]?

That may be [indiscernible] type thing or maybe even a little bit earlier, yes.

Yes, I was going to say I think your cost position puts you in a very competitive side of things. But I mean, on the flip side, if you will look for an asset out there, I don't think there a lot of assets that are sub $1,000 per ounce. Would cost be [indiscernible]?

Yes, cost should be, yes, we're not [indiscernible]. We're not going to grow for the sake of growing. That's the key thing. We're going to grow because it makes sense for our shareholders. I think that, if we look back, that was 1 of -- why investors aren't moving into gold today is because this industry grew for the sake of growing. In the past, it didn't really grow, but didn't generate any cash flow or any returns for shareholders, really. So yes, cost will be definitely a factor.

And so what's going to be like a sweet spot for you? Would it be something along -- at the end or just slightly able...

Again, it's going to -- there's a variety of sweet spots that we've seen, and there's lots of opportunities.

You're not going to use your shares? That would be...

Well, no. We got cash, we share -- we're going to do a combination of cash and shares. We got a strong balance sheet. Again, we've got flexibility. We don't feel pressured because we've got a 12-year mine life. We've had a 12-year mine life now for 5 years, and so what Andre is saying that we have a 12-year, potentially more. It's not like we've got 5 years of mine life, and we are out there racing to try and replace it. We got the balance sheet. We've got -- generating cash flow. So we've got a lot of flexibility. I think the key is -- is that we're not going to take that flexibility. We're going to stay disciplined.

Where is Newmont in all of this, like what's your position on all of this in terms of...

Newmont is a great partner. Our level of discussion with at the highest levels with the Lundin, Jack and Adam and myself, regular conversations with Tom Palmer and Peter Toth. We have 2 members, fairly senior people within Newmont on our Board, Scott Langley, VP of Corp Dev. And Melissa Harmon, who actually just got a new promotion, Head of Technical Innovation and Nonoperated Assets, I believe. Yes. So she's got responsibility for all the things they have with Barrick. Very good conversations with them. You have to ask them what their thinking is, but we've seen a change in their appreciation of Ecuador and Fruta del Norte. The very first discussion right after the announcement of the transaction, Jack and Adam and I had with Tom and Peter, we're focused on Tier 1 jurisdictions, Canada, Australia and the United States, and that's where our focus is, and we'll see how things pan out. You've seen them now talk about Ecuador as a top-tier jurisdiction. And they have sent people to Ecuador. They also have their interest in SolGold. They have now sent people to Ecuador to our site and learn more about Ecuador. I think they have to get their -- the rest of their things sorted out. And it's a very good relationship, and they've been very supportive in supporting us as management and the company.

One of the things that -- success story out of was the construction costs at the time G Mining build a mine for you. Would you be using G Mining again for the open pit?

We'll see. We'll see. G Mining is very good at what they do. They've just successfully built TZ and others. But I do remind people that [indiscernible] you need a strong owner's team as well.

You are not going to build another [indiscernible]?

No. Not at all.

Chester, if you're considering a line of credit or facility, how big might that be or what are you looking at? $500 million?

Well, we'll have to have discussions, [ Turley ], it's going to be a balancing act as to how much we think we need. It's looking at our treasury as well, minimum treasury levels that we plan to hold. So there's going to be a balancing act between how much we really need and the cost of doing that. It's pretty early stage right now. So we'll have those discussions for other...

Yes. Okay. So should we expect that you would make that announcement this year or is that for '25?

No, no.

So you are [indiscernible].

Historically, you guys like to buyback. Any thoughts on that, any changes?

Buyback? That makes no sense for us really because -- you have the Lundin family at 27% and Newmont at 32%. One of the issues that is the free float for us. We were -- we originally had CD Capital and Orion in there. They were just under 10%. When they sold their block, that improved our free float enough that we were able to get on the TSX index. That significantly improved our liquidity, right, think that doubled our liquidity by getting on that index. So yes, there's -- we see that that's not necessary. I think we hear more about liquidity, the thing that shareholders would like versus us buying back shares. Well, I'd like to thank all of you that attended. It's very much appreciated, for all those online for sitting in today, and thank you very much. And as I started out, it's been 10 years. It's been a pretty exciting 10 years, but the excitement hasn't died. And we're very excited about what we can see potentially for the next 10 years at Fruta del Norte in Ecuador. So thank you very much.