Newcore Gold Ltd. (NCAU) Earnings Call Transcript & Summary

Hi, everyone. Thanks for joining us today. Most of you likely already know me. My name is Mal Karwowska. I'm the VP of Corporate Development and IR for Newcore Gold. I'm joined today by Luke Alexander, President and CEO; as well as Greg Smith, our VP of Exploration. Before we get started, I do want to highlight that we are going to be making some forward-looking statements today. I encourage you all to visit our website where you can find the full cautionary language. We look forward to taking the opportunity today to provide you with an overview of the significant developments that we have made to continue to derisk and advance our Enchi Gold Project in Ghana throughout 2023. This year was a busy year. It kicked off with the mineral resource estimate update that derisked Enchi with an inaugural indicated resource while also continuing to highlight the significant longer-term exploration potential as we added an additional resource area at Tokosea, and we also proved out the first high-grade underground resources at Enchi. We also completed a significant amount of metallurgical test work, which continues to highlight the amenability of our project to heap leach processing. Lastly, we did kick off the process of updating our PEA economics, and we expect to have those results out in the first half of 2024. So with that, we're going to kick off the presentation, after which we look forward to answering your questions. So please do make sure to submit those questions in the chat. And with that, I'm going to pass it off to Luke to kick things off.

Yes. Thanks a lot, Mal, and thanks, everyone, for joining us today. So Newcore Gold as a recap, we're advancing the Enchi project in Ghana. It's a district-scale exploration project that's fundamentally underpinned by very robust economics that were put out in a 2021 PEA. All of our ounces are pit constrained. We are in the process of updating our PEA on the back of the resource that we put out earlier this year, which ultimately outlined a larger overall resource. Right now is a great time to be looking at Newcore. We've sold off of the rest of the market on the back of tax-loss selling, and we're trading at about $8 per ounce in the ground and less than 0.1x the NPV of the project. Management owns 20% of the company. We participated in the most recent financing and all financings that have been done since I joined the company. So we're ultimately putting our money where our mouths are. The project, again, is based in Ghana. It's a great jurisdiction, Tier 1 jurisdiction to be operating in. You've got 3 of the top 10 largest gold producers there who continue to put significant capital into the country. Mal touched on it. But in 2023, we did achieve a number of milestones. We put out our mineral resource update, which we'll talk about in some detail. We did complete a financing in July of -- or at the end of June of this year, which grew our institutional ownership to 45%. We brought on additional deep-pocketed long-term investors who recognize the tremendous fundamental value that we've got within our company as well as, obviously, that district-scale exploration upside. As I mentioned, management owned 20%. I think this is crucial for any company to make sure that there's that true alignment in the company. If you're buying Newcore today, you're buying it at a discount to where the entire management team and Board have invested. So we are truly aligned from that perspective. Greg will talk a little bit more about some of the results that we've had with the deeper drilling on our project. We put out some results in August of this year, which highlighted that high-grade potential on our project as well as I'll talk about the first underground resource that we put out on the project. We've continued to derisk the project with metallurgical test work, which we'll talk about in some detail. And again, one of the big catalysts for us in the next 6 months will be the updating of the PEA to incorporate that larger resource that we put out. In terms of the capital structure, very good capital structure. We've currently got 170 million shares outstanding. Crucially, we've got in this environment, $5 million in the bank. So everything that we're going to be talking about today is fully funded. So we've got runway for the next 12 to 18 months. So the PEA that we're going to be completing, the environmental, social baseline studies, the additional network that we're going to be completing and the continued exploration work that we do on the project, all of that is fully funded and should be good catalysts for the company going forward. As I mentioned, we are sitting at 45% institutional ownership. These are deep-pocketed long-term investors who recognize the district-scale potential of our project, but are also keen to see us put it into production, given the tremendous economics that it presents. We do have decent volume in the stock, about 150,000 shares per day. This can be a benefit, but in a tax loss selling environment, it can also be a bit of a detriment. So I think because of the good volume that we have for a junior stock, we've been sold off a little more than other companies out there. And as a result, I think we will also rally quicker as we get through the end of the tax loss selling and towards the last week or 2 of the year. So again, great opportunity to be looking at Newcore today. As we've mentioned, we did put out an updated resource earlier this year, and we accomplished a number of key things with this. So we moved 740,000 ounces into the indicated category. This is the first time ever that we've had indicated ounces on our project as well as we added an additional 970,000 ounces of inferred. So we grew the overall size of the resource from the previous resource that we put out. The grade currently sits at 0.55 grams per tonne. That grade is driven by the economics of the PEA that we put out, which outlined a very simple heap leach project. When we look at heap leach projects globally, you're typically looking at more like 0.3 to 0.4 grams per tonne. So one of the things when we get into talking about the PEA in more detail is, remember, the grade is one of the key things that helps drive those economics. Within the updated resource that we put out, we also put out our first-ever underground resource at 135,000 ounces, it's not a mine today, but those ounces are spread across 3 different deposits, and they're really a proof of concept for us, which Greg will get to in a little bit more detail, which highlights the potential there is at depth on this project. We also added a fifth resource area at Tokosea. So again, this highlights the growth potential. We've identified about 25 targets to date across the project, of which we've drilled on only 9 of them and 5 of them make up our current resource at Enchi. So tremendous growth potential on our project as well. And then importantly, about 40,000 meters from our recently drilled 92,000 meters was not included in any of this resource update. So these are greenfield areas. These are some of the deeper targets that maybe only have 1 or 2 or 3 holes into them. So don't have enough drill density to be included in our resource today. But obviously, they give us the opportunity to follow up and look at growing those areas over time. Maybe I'll just take you into our project and just kind of highlight a couple of things and how they tie into our recent resource update in March of this year. So 216 square kilometers in size. So a very large land package. When we look at the airborne geophysics on the property, what we're looking at here is you've got the main Bibiani Shear, which runs to the west of us. And then where you see the mineralization is the second and third order splays coming through our projects. So we've got about 100 kilometers of shearing going through our projects. So again, that's another way to look at the district-scale exploration opportunity that we've got at our Enchi project. When we look at the deposits themselves, again, we've got 5 resource areas, Sewum is our largest, Boin's our second, Nyam, Kwakyekrom and then Tokosea are our most recent deposit area. What the PEA contemplates is a heap leach pad centrally located, which obviously is very easy to access from all of these different pits. Importantly, though, all of these deposits remain open along strike. And that's something that we obviously need to go and do follow-up drilling. But ultimately, we see those as low-risk ounces to grow the overall size of the resource over time. If we look at Boin, for example, this is our second largest deposit. It sits at about 600,000 ounces. The average vertical depth of the pits on our property today, only average and that constrain our current resource, are only down to about 80 meters. So again, one of the big opportunities is for us to continue to drill deeper and look for that -- those ounces that sit below the pits. Also, again, these deposits remain open along strike. So systematically stepping out and continuing to chase these structures from north to south. To put that in perspective, Boin today, the pits sit within an area of about 5 kilometers on a structure or anomaly that we've identified of about 15 kilometers. So continuing to drill along strike is one of the things that we're obviously excited about and see as low-risk ounces to add to our resource over time. We're now looking at Sewum, which is -- pardon me, which is our -- sorry, which is our largest deposit. So these pits here obviously constrain the ounces at Sewum. Again, they remain open along strike, so continuing to chase those ounces by systematically stepping out. Over here, we've got Tokosea, which is our newest deposit. Again, we need to continue to step out and drill along strike. And interestingly here, Tokosea looks like it's colliding with our Sewum deposit. And this specific area here at Checkerboard Hill is one of our highest grade areas, which ultimately coincides with where that Tokosea structure is coming in. So, lots of exploration upside for us to go after. And that's something that we'll build on with the updated resource that we put out earlier this year. The other thing I'll highlight is some of the higher grade potential on our project. I outlined the heap leachable material that we've got using a -- our PEA used a roughly 0.2 gram per tonne cutoff. If I were to take that material off here at Sewum, the less than 0.5 gram per tonne material, this really highlights a lot of the plus 0.5 gram material and plus 1 gram material in red there within that block model. What's interesting about that is that we've got a lot of ounces that sit above that 0.5 gram cutoff. Our resource was ultimately driven by roughly 0.2 gram per tonne cutoff, so that's the 740,000 ounces and 970,000 ounces of inferred. If we were to take that, as I was showing you in the block model there to roughly a 0.5 gram per tonne cutoff, we're now sitting at 0.5 million ounces at just under 1 gram per tonne within the indicated category within the inferred category, again, at a 0.5 gram cutoff, we're sitting at roughly 580,000 ounces plus an additional 135,000 ounces within the underground material. So we're sitting at about 1.2 million ounces of just over 1 gram per tonne using that 0.5 gram per tonne cutoff. So there is the opportunity in a lower gold price environment, let's say, $1,450 or $1,550 for us to continue to have a very economic project. The gold price that was used for this resource update was $1,650. And again, we see that as quite conservative. But obviously, that drives very economic ounces for us. What we did outline within the 2021 PEA and what we're doing in our updated PEA is highlighting a heap leach project. And what's important, obviously, for a heap leach project is that you have lots of oxide and transitional ounces. So what we're looking at here is the different classes of resource that we've got on our project. So again, we've got over 1 million ounces of heap leachable material, so oxide and transitional material. We've got very large oxidized areas on our project, which is ultimately one of the real -- which is ultimately one of the real advantages that we've got. Typically, the oxidized material sits anywhere between 40 and 50 meters and in some cases, goes as thick as 120 meters. So this is one of the key attributes that really helps with a heap leach project. As part of the update that we put out, we did put out our first-ever underground resource. So roughly 135,000 ounces of underground resource. This came from 3 different areas, Sewum, Kwakyekrom and our Nyam deposit. At 135,000 ounces, it's not an underground mine today, but it's a proof of concept for us and something that we see as very important in terms of highlighting the longevity of the project. To illustrate that, what we're looking at here is a long section of our Enchi project. What we've done is we've superimposed the depth of the oxide and transitional zones. So the average vertical depth, again, of the pits that sit on our project or constrain our current resource is about 80 meters. So really that kind of oxide transitional zones. We've then started to drill a little bit deeper below some of that material and getting into the fresh rock, and we've had some really good higher-grade results from those areas. When we then compare that to the Chirano Mine, which sits 50 kilometers to the north of us and has a historical endowment of over 5.5 million ounces or if we were to look at a long section of Newmont's Ahafo half project, which has a 20 million ounce endowment and we superimpose the depth of the oxide transitional zone, you start to really see a number of these deposits grow in size and increase in grade as you start to get deeper. To put that in perspective, at Chirano, they're currently mining at roughly 800 meters below surface 1.5 to 2 gram material. So again, we've really just scratched the surface with the current resource that we have, which is constrained within an 80-meter area. With that, maybe I'll hand it over to Greg to get into a little bit more detail on the -- on some of the higher grade that we've discovered below our current resource areas.

All right. Thanks, Luke. Yes, as Luke mentioned, there are 3 areas that make up the current 136,000 higher-grade ounces. About half of those are located here on the depth extensions to the Nyam deposit. So like our other deposits, the main part of the deposit that we've studied now and the oxide and the transition is pit constrained. And what we'll look at now are some of these depth extensions, the shoots that have been developed and again, some of which we haven't actually started to drill yet, but which we continue to see expanding to depth. So taking a step back, again, Lucas has shown this, the larger deposits at Boin and Sewum, where we look at now is here at the Nyam deposit. It's our third largest deposit that make up the resource, but the one where we've done the most amount of deeper drilling, and I think that's something to keep in mind is that when I'm talking about this deeper drilling, Luke mentioned several times, the sort of 80-meter average depth of the pits that highlighted here, the gray areas are the limits to the pits, the blocks that we're looking at here are the block model, so up to 0.5 gram in blue, up to a gram in yellow and greater than 1 gram per tonne in red. And again, this is a structurally controlled zone. So you see, in this case, about a 3-kilometer length to the resource. And as we focus in on some of these higher-grade areas, we can see 2 main things. One is that they do start at surface. So we've got higher grade material at surface. So this is not something that's a big change so much as it's us following this higher-grade material right from surface to depth. And all of these block images here have all of the drill holes that we've drilled to date. So also important to keep in mind that when we sort of look at these areas where we're not projecting grade at this point, largely it's because we haven't drilled any holes in there. Very significantly, you look at the drilling that has been completed to depth and all of these holes are intersecting economic grades and width of mineralization. So here, 6.25 over 6, 3.5 over 9, 7.4 over 7, 3.2 over 9, this being associated with this southernmost of the 2 main shoots that we've now followed to depth. And again, depth for us is if this is about a 50-meter depth here, this is about -- a little about 100 meters here. So really, we're defining these resources anywhere from 100 to as deep as 250 meters below surface, but very close to the projected infrastructure for the open pits. Again, if you look at the second area here that we redone some drilling to depth, looking at the grades and the widths, again, almost 5 grams over 8, 2 grams over 17, 5.4 over 9, almost 7 over 4, 5.7 over 8, almost 6 over 7, and these are all of the drill holes that we've drilled into that area. We did release some additional results in -- earlier in the year, in particular, this hole here, hole 63 at Nyam. The significance here being that this is actually below the resource area here. So we've extended the zone to depth here. And again, I mentioned that there's no deeper drilling in these areas yet. This is the high-grade shoot that we're following. And we do believe we see a third one here in the north, and all of these are open to depth. And as Luke highlighted in that sort of Chirano model, that's what you would expect from these structurally controlled deposits as they do tend to continue quite significantly to depth. So you really expect these zones to continue to depth, and that's sort of what happened at Chirano is, again, a whole series of relatively shallow pits, taking out the oxide and transition material primarily, and then after that, focusing on some of these higher-grade zones 3.2, 5.6 gram per tonne, 3.3 over 11 and almost 7 grams over 4 meters. So real good potential to continue to follow this to depth. And again, the advantage being that for us at depth is still less than, say, 250 to 300 meters vertically below surface. I've also talked about the fact that we've done a lot of metallurgical test work. This has been a bit of a focus for us as we define these oxides and transition zones. Certainly, that's been the focus on a lot of the test work that we've done. We've done now more than 360 tests, of which 340 of which have been done over the last couple of years. So a very significant program advancing the understanding of the metallurgy and we're very pleased, and we put out a series of news releases, 6, 7 news releases that included over the last couple of years, metallurgical results and projecting really good recoveries here ultimately in the sort of plus 90% to 95% range. And we've, again, basically got 3 areas. We've got the bottle rolls and column tests that we've done on the oxide and transition material. We've started doing testing on the sulfide mineralization primarily from the Nyam area. So that hole that we were just looking at, hole 63 would be included in these results here, composite samples created from those drill holes. So again, giving us anywhere from 83% to 98% recoveries averaging about 92% in the sulfide material. We've got ongoing work on some of our other deposits, Sewum -- we've got sulfide samples from Sewum where we're doing some additional work now. The -- again, the oxide and transition material, the importance there is that we've got these column tests, 60- to 90-day column tests. These are basically a reasonable facsimile of what you expect in the heap leach scenario. You've got really good recoveries, quick recoveries in the first, say, 20 to 30 days, excellent recoveries beyond that and then a little bit slower at the end as you would expect as you recovered the majority of the gold. And then most recently, we've announced results from 2 large 15-tonne bulk sample tests. There's the material here that we collected at our 2 largest deposits. So that includes a 15-tonne sample from Boin and a 15-tonne sample from Sewum. Again, in similar to what we saw in the column tests, excellent recoveries here in terms of leach tests after 60 days. We're looking at 91.9% recovery. That includes 93.5% from the sample from Sewum, 90.3% from the sample from Boin. So good consistent recoveries from the 2 samples. And then similarly to the column test, and again, that's good to see that this sort of larger scale, even closer to reality kind of test that we have here with the bulk sample, gives us the same sort of curves where we've got really fast recoveries in the sort of 20- to 25-day range, good recoveries all the way up to 40 days, and that you're already up to about 90% there. And then what you would expect is a little bit more recovery, but flatter curves as you, again, essentially gotten the majority of the gold out of the material. Along with the recoveries, we've got good low consumption rates. Again, this is in line with what we're seeing with all of the column tests that we've done and that really validates those -- that column work. So we've got obviously more columns. The columns are on different geographic areas of the largest deposits. So it's good to be able to rely on those columns and again, advance that work to the point of pilot heap testing with the larger 15-tonne samples. So in terms of the near-term catalysts, I'll pass it back to Luke. And basically, this updated resource, all of this metallurgical work will be what we'll incorporate into the updated PEA that's currently underway.

Yes. Thanks a lot, Greg. So in terms of the updated PEA that we've just kicked off, as I've highlighted, it's going to incorporate a larger resource, which we put out in March of this year as well as we've significantly derisked the ounces within it by moving 740,000 ounces into the indicated category as well as all of that net test work that Greg just talked to you about that's been completed over the last couple of years. Again, that derisks the project that's going to be presented within that PEA as well as we're doing environmental, social baseline studies. We're doing some hydrological work. So again, all of those things contribute to derisking the PEA that we're going to put out in H1 of next year. If we look at the PEA that we put out in 2021, that fundamentally underpins the value of the company. It presented very robust economics. So a very simple heap leach project at a $1,650 gold price, which is the base case that we used within that PEA, which is also the gold price that we used within our updated resource earlier this year. We have an after-tax NPV of $212 million, after-tax IRR of 54% and just over a 2-year payback. If we look at it now at an $1,850 gold price, we're looking at an after-tax NPV of $300 million, after-tax IRR of 54% and under a 2-year payback. This is one of the reasons why we talk about there being deep value within our company and one of the things that attracted new institutional investors to our share register when we did that financing in June. At a $1,850 gold price, we're trading at roughly 0.05x the NPV of the project. So one of the motivations for us, obviously, updating the PEA, highlighting robust economics on the back of the updated resource that we did is to get the company to rerate from that less than 0.1x NPV of the project to something higher than that. So that's the motivation for us. Obviously, the 2021 PEA outlined a very nice production profile, roughly 92,000, 93,000 ounces over -- just over a 10-year mine life. And one thing that's important to highlight is the strip ratio on our projects. What we always say is if companies are not advertising or highlighting in their presentation what their strip ratio is, you better dig through the technical report or ask management what it is. One of the things that really helps drive the economics of our project is the fact that we've got a very good strip ratio on the project. In terms of near-term catalysts, we are -- as we've talked about in some detail in the process of updating our PEA to incorporate that [ larger ] resource, we think that will create a further fundamental underpinning of value for the company and lead to the stock rerating as the market recognizes the opportunity. We are in the process of continuing to derisk the project through additional metallurgical test work. We've done 20 column tests today, 2 bulk samples. We've done hundreds of bottle roll tests, but one of the crucial elements to pushing a project forward is to continuously do network across it. So that's something we're very active on. We are in the process of completing an environmental and social baseline study. This is something that we will incorporate into our PEA as well, which, again, is another derisking event for the company. So we're excited about everything that we accomplished in 2023. Yes, it was a difficult market for the exploration sector. But one of the nice things about Newcore is we've got a buildable project today that -- in a tough environment for the gold sector. We can continue to derisk the project and create tremendous shareholder value for relatively low cost to the company. Everything that we've talked about today in terms of the work plans we've got, we are funded for all of that with the $5 million that we've got in the bank. So we've got runway for 12 to 18 months, a number of kind of catalysts on the horizon. And today, I think, is a great time to be looking at Newcore, given we have sold off, not based on the fundamentals of the company, but because of tax loss selling in my opinion, we're trading at roughly $8 per ounce in the ground. These are ounces that have been derisked through the economic study that we put out. These are pit-constrained ounces as well as, obviously, we're trading at less than 0.1x the NPV of the project. With that, I think we'll take any questions that people have.

Thank you, both Luke and Greg for the detailed presentation. And for those of you in attendance, there is a little text box chat icon on the bottom right. In case you didn't see that, you can pop that open and ask questions. So I'll kick things off by asking Luke a question around the oxidation depth. I know we've commented on this. We do have some 360s that potentially help highlight this as well, but can you go into a bit more detail on how deep the oxidization typically is? And at what point do the sulfide start?

Yes. Thanks, Mal, and thanks for Martin who's asked that question. So in terms of the oxidization, it's typically and probably average is around 40 to 50 meters. So this includes both oxide and transitional material. The transitional material on our project is very well oxide. And one thing that's important to mention, when you look at the network and what Greg was talking about in terms of the network, they are blends of anywhere from 50-50 oxide-transitional material, 40-60, 60-40. So the transitional material on our project leaches very well, and that's been proven out with all of the test work that we've done. So 40 to 50 meters is the average depth and they go anywhere to up to 120 meters. What I'll maybe do to illustrate that because it is an important element to our project given you don't see a lot of projects with this amount of heap leachable material. So what we're looking at here is a 360 of our Enchi project and the different deposits that we've got. Maybe it will take us to Boin and just illustrate the -- what I'm talking about here. So what we've got is we've got rolling hills throughout our project. And typically, the mineralization sits along these hills. So if we're looking here, for example, if we go from the top of the hill all the way down to the bottom, you'll be looking at anywhere up to 120 meters of oxidized material. So from a mining perspective, you mine all of that. When you get down to the bottom of the hill, for example, you may pinch out at 20 meters of oxidized material. So anywhere from, call it, 20 to 120 meters with an average of about 40 to 50 meters.

And I'll just jump in there and add then. And significantly Luke was highlighting Boin there. The 2 largest deposits at Boin and Sewum also happened to be the 2 areas where we've got the greatest depth of oxidation. And that's what's allowed us to build a large oxide and transition resource in those 2 areas. And there, it would average closer to 70 to 80 meters vertically.

Great. Thank you both. So I've got a -- I have a few questions around the metallurgical test work. So over to Greg. Firstly, considering the latest met results, would it make sense to use a lower cutoff grade?

Yes. We've talked a bit about the cutoff grade. So, currently around 0.2. And yes, would be the one word answer. However, as you go a little bit lower with the cutoffs, then that also drives your average grade lower. So it's a real balance between getting all of the economical ounces that are based on the inputs that you put in there. And you balance that with maintaining an average grade that allows you to reach a certain production profile with a set amount of tonnes that you're mining and processing. So we think that the sweet spot is still around 0.2. That gives us very economic ounces, keeps the average grade of the material coming out of the pits in that sort of 0.6 gram per tonne range. As Luke mentioned, maybe as much as 2x the sort of global average for these type of heap leach operations. And we think that's where the economics drives best and gives us probably that little bit of a cushion that you always like to see. If you really drive that cutoff grade too low and you lower the average grade, then your margins start to get squeezed and obviously no project wants that. So we like the average grade where it is at about 0.6 grams per tonne, and we like the point to cutoff.

Yes. And maybe another way just to kind of elaborate on Greg's kind of margin point. If you look at, again, the 2021 PEA, it outlined an all-in sustaining cost of around $1,050 to $1,150. I think it was -- $1,066 was the exact all-in sustaining costs within that. So again, really good margins by kind of focusing in on that 0.2 -- roughly 0.2 gram per tonne cutoff or greater.

Sticking with met test work, Greg, I think it might be helpful if you could elaborate on the differences between bottle roll tests, column test [ or both ] scale test and what advantages do each provide with our knowledge based on the met.

Sure. Basically, the 3 that you've mentioned are sort of an advancement in the size of the sample that you're using and advancement in terms of its closeness to what you -- the conditions that you actually expect in an operating heap leach operation. So the bottle rolls are -- they're just that. You put the material in a bottle and you roll it around for anywhere from 24 to 48 hours. You've got the cyanide in there. So really, what they are, are tests of whether or not direct cyanidation is going to work on this material. So they're faster and quicker than the other 2 sets of tests. So that's their advantages. Their disadvantage is that they're -- they deal with smaller sample sizes, so 0.5 kilo to 1 kilo typically. And they're not a really good reasonable facsimile for heap leach operations because you've got this material that's rolling around. But again, what it does tell you is it tells you that the material under, say, ideal conditions, you can get the gold into solution using cyanide. So once you make yourself comfortable that you can do that, you move on to the column test, which is where you're putting larger samples, anywhere from 40 to 60 kilograms of material in these vertical columns, you're then leaching it for a longer time, anywhere from 30 days up to 90 days, and this is much more similar to what you would expect out of an actual heap leach operation. So again, the benefits there, your -- larger samples, it's more representative of the actual process that we ultimately are proposing here. The downside, I guess, is that it takes longer. But obviously, as we've seen on these curves, we've got the really quick recoveries for the first 20 to 30 days, significant recoveries after that for another 20-plus days. And then as you would expect, as most of the gold has been brought into solutions, slower recoveries on the end. And then the pilot heap of course is just that. It's a series of tests, the 2 tests that we've completed on each of our 2 largest deposits. It's closer still to what the actual conditions are that you would expect in an operating heap leach mine. So again, the samples are larger. They're more representative of what you would expect when you're mining this material because basically that's what we did. We just dug this material out of a trench that identified with a backhoe and dumped it on these pads and again, put solution on them for 60 days, and you see the recovery curves there where after the first 20 days, you're already to plus 80% after the first 40% to plus 90%, and then ultimately, again, 92% after the 60 days. So yes, it's all about getting bigger and I guess better samples. It's [indiscernible] getting a sample system that's as close as possible to the actual operating conditions we expect for the heap leach mine.

Great. Thanks, Greg. And on the bulk heap leach test work, so the material have crushed or run of mine type material?

So the only crushing that was done, I would say that we could say it was run of mine. The only crushing that was done was there was -- as we were digging this, some larger pieces of quartz vein material that is associated with this mineralization and by larger than sort of 15 centimeters and that was actually crushed manually by hand. So very little crushing there. And one of the things that we're studying now is the balance between -- we actually don't want to crush this material too much. Those larger chunks of quartz assist with the percolation and the solutions getting to all of the material in these sort of heaps. So in actuality, which is a good thing, we want to crush this material as little as possible.

Thanks. Over to Luke, if you don't mind pulling up the property map, there is a question around who controls the donut hole and the project to the north of Nyam.

Yes. So just right here is where I assume you're referring to. We actually have 1 point control that. And ultimately, in Ghana, when you first start working on a project over a number of years, you've got to shed off about 50% of the acreage. So far the shedding off, there's actually a local community in this area. So we decided to actually shed that off. We understand it's a private group who currently controls that area and that there's a small community mining operation that's taking place there. So throughout Ghana, it is Africa's largest gold producer. It produces about 5 million ounces per year. About 1.5 million ounces is actually produced by the small scale and mid-scale -- midsized producers who are primarily private companies. A number of them are actually community mining operations. And when it's in this area, there's a small underground community mine that's currently operating there, a high-grade vein below surface, which again speaks to some of the high-grade opportunity on our project.

Yes. I'll follow that up Luke just quickly, and it obviously doesn't highlight really well on this satellite image, but a large part of that is alluvial as well. There's quite a large flat area adjacent to the town. And yes, again, as Luke mentioned, we had controlled that area for a number of years. So when I was there running the exploration from 2010 through 2016, and we did a lot of work in there. They generated some anomalies, but they all tended to be -- or a lot of them associated with these alluvial areas. We did a bunch of trenching and some very limited drilling and didn't generate any results that we weren't comfortable giving that back as part of the 50% reduction.

Thank you, both. So now moving on to catalysts and coming up in the next 6 months or so, how much drilling is planned between now and the scheduled PEA release?

We're -- we don't have any current drilling plan. We are doing some condemnation drilling on areas where we've identified that we want to potentially put the heap leach pad. So we're kind of actively doing that. We're doing a bunch of soil sampling trench work on the project. But really, the big kind of push for us is focusing in on getting that PEA completed, which we'll look to get out in the first half of next year. And then on the back of that, we'll kind of assess whether it makes more sense to focus in on infill drilling. Obviously, today, we sit at roughly 740,000 ounces of indicated to take this to a PFS. We probably want to get that to roughly 1.1 million to 1.2 million ounces of indicated. So Greg and his team are kind of looking at what would be required from an infilling perspective. And then from a pure exploration perspective, we're obviously continuing to look at the results that we've had and identify where we see the best opportunity to create value with drilling. So that's kind of the focus for us at the moment.

I think that leads in nicely to a bigger question around, can you talk a little bit about the district-scale potential of the property.

Do you want to take that one on, Greg, or do you want me to?

No, yes, sure, I can jump in there. Mal, I'm not sure, yes. So there's the geophysics there. And as Luke mentioned, the -- that's the primary control as the splays come off the Bibiani Shear Zone, and this is exactly the same sort of structural setting with Chirano and Bibiani to the north. So it's all of these splays coming off of it. There isn't any gold associated with the main structure itself. It was just too darn big and the structures kept flowing, but where we see these zones and Boin is probably the best example. Our deposits, it's [ very long leach ] conductors. These are electromagnetic conductors that we're seeing here. And what we combine this with in terms of our exploration is the soil anomalies and the soil sampling. So we've completed soil sampling over the entire project in terms of some of the areas where we've been focusing our efforts, our trenching efforts recently. These are some of the areas. We've got Sewum South here as well, where we've done a large trenching program and very limited drilling and again, adjacent to our actual Sewum deposit, but it's one of the largest anomalies we have in Nkwanta here as well. Again, Tokosea, we just started sort of scratching the surface with our drilling there. And then the Nyam, Kwakyekrom structure, again, very much open to the south there. So we've got a number of areas. As Luke mentioned, we've identified 25 individual targets, a number of those we have trenched, a number of those we put individual or limited amounts of drilling into. I'll highlight here Kojina Hill, where we've released in the last couple of years some very positive results, Eradi all the way up to the north as well. I mentioned Sewum South where we put a dozen holes into an area that's 6.5 kilometers by 3 kilometers. So lots of room to expand and then the Nyam, Kwakyekrom corridor here as well, which is real strong, both in terms of its geophysical signature and the geochemical anomalies that are open there. So yes, we've got a number of these targets. We've been doing some trenching work. Again, some infill soils here. There's one of the new discoveries that we've kind of made over the last 1.5 years is here at Adjeikrom, where we've done some fill-in soil work and a bunch of trenches there and generated anywhere from 10 to up to 50 meters at sort of 0.5 gram in the trenches. So no drilling there, and it had never been trenched previously. So that's kind of one of the highlights of the actual sort of expansion and regional potential work that we've done over the last 1.5 years.

And just add to that, I mean, it's obviously great that we've got all of these targets across our property, 25 targets identified to date. But the nice thing is we've got exploration opportunity from infill to easy step outs along strike. As I mentioned at all of our deposits, we can continue to systematically step out Boin. We've only drilled and our resource sits within a 5-kilometer area on a 15-kilometer anomaly that we've identified. We, for the first time, put out an underground resource, which we talked about a little bit, but that's probably around 25 holes that we've kind of drilled deeper, which for us deeper is down to 200 to 300 meters. So those are all, in our view, lower risk opportunities for us to continue to meaningfully grow the resource. So yes, we've got the greenfield opportunities, and Greg just talked about those in terms of early-stage trench work. But we've got very derisked targets on our property that can reward us with a tremendous amount of ounces as well. So when you look at Newcore, recognize that you've got all exploration opportunities within the company from, again, infill drilling, easy step outs, following up on high grade that we've identified at depth as well as obviously virgin greenfield targets that are earlier stage.

Thank you, both. I think that covers the exploration potential -- the district-scale exploration potential on Enchi. And Luke, so with that, with that updated PEA that's coming out next year, will that only cover the economics of an initial open pit heap leach?

Yes. At this stage, it's -- our view is, let's say, 100,000 ounces over a 10-year mine life for $100 million for an after-tax NPV of $300 million. I mean, that for Newcore is a very buildable project that's got very robust economics. If we were to kind of paint the blue sky production opportunity, we would look to put the 100,000 ounces into production with the cash flow from that, aggressively drill out some of the fresh rock, the sulfides as those ounces get proved up and we obviously strip all the oxide transitional material, what we would look at doing is ultimately putting a CIL plant in using the cash flow from that. And at that stage, you could, let's say, go from 100,000 to 200,000 ounces of production. So that's the opportunity is create a self-funded district-scale exploration company who currently has primarily oxide transitional material, but as those sulfides grow, then you would put a CIL plant down the road.

Thanks, Luke. Can you elaborate on that? So our focus currently is on the updated PEA, but what is the strategy for Newcore Gold post PEA completion?

So post PEA, we'll obviously look at the economics of the project. We'll talk about that with our major shareholders who are very keen to see us continue to push this project forward and we'll make a decision, okay, does it make sense for us to take this to an advanced stage PFS. One of the important things to mention is that a lot of the work that we are doing and that we've already done, I mean those results that Greg has taken you through from a metallurgical perspective are already pushing a PFS or FS stage. That level of work is not required for a PEA. But as a management team and a company who's looking at building this project, we want to have 100% confidence in the work that we're doing. So we're going above and beyond within the PEA on a lot of the work that we're doing. Same thing with the environmental, social baseline study, the hydrological drilling, the condemnation drilling, all of that stuff isn't necessarily required for a PEA. So we'll make the decision as to whether we go to a PFS. The key thing that's required and the capital-intensive piece that's required for a PFS is the infill drilling. So we'll look at whether it makes more sense to do some infill drilling to be able to complete a PFS or whether we focus on continuing to grow the resource and focus on drilling or whether we do both. So those are the decisions that we'll make on the back of the PEA. And obviously, at that stage, we'll see what the market is doing as well. But the key thing for us today is we are fully funded for the next 12 to 18 months and all of the work that we've outlined over the last hour on this call.

Thanks, Luke. A couple of additional questions before we wrap things up. Are you considering low-grade stockpiles for the material below the 0.2 grams per tonne cutoff?

I'll jump in there, Luke, just to say that, again, yes would be the one word answer. However, the challenge there certainly is that at those sorts of average grades, you really can't move this stuff too much. So there will be lower-grade stockpiles that will be created and the economic viability of those will be evaluated when time comes to move them a second time. So obviously, if we're in a good positive gold price environment, then having that material on surface is going to be a benefit. But under other gold price or cost situations, then maybe it's going to stay right where it is. But keep in mind that, again, at the point to cutoff, that's where we have the global amount of 1.7 million ounces. So we do have quite a lot of ounces to work with. And as we've talked a couple of times, we've got expansion potential, both in terms of oxides and then, obviously, longer term with the sulfides. But yes, it really gets down to the economics. And I guess I'd say you'd have to expect to see a pretty healthy gold price before you want to move 0.1 gram material a second time.

Thanks, Greg. And then, Greg, are there any artisanal miners active on your property?

So yes, generally speaking, again, we've been there for 13 years now. So we've been able to manage the situation. They're certainly very active all over Ghana. This image here is of our Sewum area. Luke's mentioned the Ridge, and this is a really good example. The Ridge that's on the lower right-hand side of this image, that's where our resource sits is on this ridge. That's actually the Checkerboard Hill area there that Luke has mentioned. The town of Sewum is off to the right-hand side. And then where it's labeled private mine there, that's actually a very small scale, but historic underground operation that's been active there since the early part of the 20th century. So currently not overly active, but -- and you can see in some of the lower lying areas there as well, some small-scale alluvial operating. So yes, it would be -- there is some activity, but the very significant factor is that none of it occurs right on top of our resources. So it's certainly largely concentrated on the actual alluvials in the creeks and the drainages. But this is one example of a very historic underground operation that's been developed on several levels down to probably 180 or 200 meters below surface, but again, at a very, very small scale over the last 150 years.

Thanks, Greg. So Luke, as we wrap things up, any parting words, any last -- what are you excited about for the coming year?

I mean I'm extremely excited about the PEA that we're currently working on. We've obviously run the numbers internally. And hence, the reason we're investing in the update is that we see a very robust project. I mean for investors looking at Newcore today, I mean, we got hit by tax loss selling. We're trading at $8 per ounce in the ground, less than 0.1x the NPV of the project. So there's deep value within the project as well as obviously that big exploration upside, but we're not beholden to exploration only. We've got a very robust project that we're going to take to a construction decision with the ability to, at any point, pull the lever to ultimately aggressively explore at our existing resource areas, at greenfield areas, at depth and systematically along strike from all of our deposits. So all of those things give a huge amount of optionality for us as a management team as well as us as 20% owners of the business. So those are the things that I'm extremely excited about. And obviously, Ghana is a Tier 1 jurisdiction for us to be operating in. It's got 3 of the top 10 largest gold producers on the planet. Historically, 200 million ounces of gold have been discovered in Ghana. We've got a number of multimillion ounce deposits along the step with Bibiani Belt from us. And we still just scratched the surface in terms of the exploration that we've done on our project. So those are the things that I'm extremely excited about, and I'm very fortunate to have a great team to work with to ultimately create the value within Newcore. So I mean with that, I'd encourage anyone to go and visit our website. We're also very active on social media, so whether it's LinkedIn or Facebook or I guess, X now. I'd encourage you to follow us on those different platforms. A number of our existing shareholders had found the content that we provide there very useful.

Thank you, both, and thank you, everyone, for joining us today and for the great questions. We are out of time. As Luke mentioned, please do reach out, follow us on social. We post a lot of great content. And more recently, Greg was at site with our VP Projects, Branden Fraser. So we do have some more content coming on that. And with that, we look forward to continuing to update you all with our developments going into next year, and we wish everyone a very happy holiday season. Thank you.