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

All right. Thanks, everyone, for joining us today. We have -- I wouldn't say an update because we've never actually hosted Newcore Gold before. First time. So excited to hear the story. As many of you have probably seen, they're supporting our charity webinar initiative. So I appreciate them donating to a food bank. I'll let Luke tell you about that in a few minutes. Just some housekeeping items. I think we'll do a presentation for about 10 or 15 minutes, then we'll jump into Q&A. So if anyone has any questions, feel free to put them in the Q&A box at the bottom and we'll get to those. And as I'm sure you know, this presentation will contain forward-looking statements. If you'd like to know more about those. You can find them on the company's presentation on their website and with that out of the way, I'd like to introduce Luke Alexander, President and CEO of Newcore Gold. He's going to tell us about their very exciting Enchi Project in Ghana.

Yes. Thanks a lot, Deb, and thank you very much to the entire Adelaide team for putting this together. I think it's a great initiative and especially at this time of the year. So I guess with that, yes, I'm Luke Alexander, President and CEO of Newcore Gold. Our project is in Ghana, the Enchi Project. It's a development exploration stage project. We're moving it from a PEA to a PFS, and then we have district scale exploration that I'll get into talking about as well. But before that, obviously, the goal of this webinar is to raise money for charities and the charity that we've chosen to donate to is near and dear to us at Newcore. They sponsor a number of programs in Ghana and in Africa. Specifically, they donate to a number of children, underprivileged children who, without the support of FACE wouldn't be able to necessarily attend school. So through donating school supplies as well as money for lunches, this group has been able to support a number of children to be able to go to school, and we're going to support them with that initiative for 2026, and we'll be able to support over 20 children going to -- helping them go to school. A number of these children are either orphans or children of single parents. So their ability to be able to go to school without the support of FACE would be very challenging. So we think it's a great group, it is a Canadian charity. So if anyone is listening who is based in Canada, there are tax receipts available. You can see the website here faceforafrica.com, so you can go on there and if you want to also donate then we think it's a great cause to donate to. With that, I will jump into the presentation. Deb already mentioned that we will be making forward-looking statements -- so Newcore gold, as I mentioned, district scale exploration project fundamentally underpinned by very robust economics that we put out in a PEA in 2024, which we're now taking from PEA to PFS, and we think that will create a lot of fundamental value for shareholders. And then beyond that, we're in the midst of a 45,000-meter drill program to unlock additional value from our district scale exploration project. We are listed on the TSX Venture Exchange. We also trade on the OTCQX I would also highlight, first and foremost, that management and Board are truly aligned with shareholders through our 15% ownership in the business. This is stock that we've bought alongside shareholders along the last -- over the last number of years. So there is true alignment from that perspective. As I mentioned, we put out a PEA in 2024, which we're now derisking to a PFS and then we're in Ghana, which is a Tier 1 jurisdiction. We're on 1 of the 2 prolific gold belts that sits within Ghana, and we're in the midst of a 45,000-meter drill program. So lots of news flow, lots of drill results to come. And we think with that drilling, we can create significant value for shareholders as well. In terms of my background, I spent the first 20 years on the investment banking side of the business as in 12 year -- in London for 12 years, covering all the big global natural resource funds and in the U.K. and Europe, advising different ASX, TSX, London-listed, primarily, mining companies. That's where I did a lot of work on -- in Africa and ultimately was very attracted to the Enchi Project and since we -- since I joined, we've drilled over 120,000 meters across the Project. We've put out pre-resource updates, 2 PEAs. We've grown our institutional ownership from 0% to 55%, so a lot has happened over the last number of years. And the team as a whole is a team with a proven track record of creating a lot of value for shareholders with a number of very successful companies that the team has been involved in. From a capital structure perspective, we've got a good capital structure, about 260 million shares outstanding today -- or at the end of September, we had about $10 million, $11 million in the bank. We then important to highlight having 19, almost 20 million warrants that have started to come in over the last few weeks, and we expect to continue to come in between now and the end of February. That will bring in an additional $10 million of cash. About 75% of those warrants are held with 4 key institutional investors. And again, we're expecting that money to start coming in, in January, which will then increase our cash balance by roughly $10 million. So everything we're going to talk about today is fully funded from our existing cash position of $10 million. But then obviously, that additional capital will allow us to expand drill programs, do additional work beyond the 45,000 meters and the PFS that we're going to talk about in some detail. We've also got very strong coverage from the investment banking community. If anyone does speak with any of these groups, I would encourage you to get the research. There's a lot of very bullish sentiment within the research community on our Enchi Project in Ghana. We then also have very strong institutional support. We currently sit at 55% institutional ownership. We've grown that from 0 over the last number of years. Ghana, again, from an ESG and CSR perspective, we ultimately look to adhere to as many of the UN sustainable development goals as possible for a development stage company, so working with the local communities working with the national government is a real focus for us. And as a result, we've got a tremendous amount of support from the local communities, but also from the national government to push this project from where we sit today and ultimately into production. In terms of Ghana, we always refer to it as a Tier 1 jurisdiction. It is Africa's largest gold producer, sixth largest gold producer globally. Mining is very important for the economy. It's important for the tax base. And for us, at Newcore, it means there's a huge amount of highly skilled labor in country for us to leverage off of and push our project forward. But what we always say is, listen, don't listen to us, but look at what the major mining companies are doing. We currently have 4 of the top 10 largest gold producers on the planet with significant operations in country, including Newmont, Anglo, Gold Fields and Zijin. Newmont has recently invested another $1 billion into the country, into their Ahafo Project. And they've highlighted that it is one of their cornerstone assets globally. So again, the largest gold company on the planet to be investing that kind of capital into 1 jurisdiction, I think ultimately speaks to what a great country it is to be operating in. The other thing I'd highlight is we have seen a lot of M&A activity in country, which again speaks to what a favorable jurisdiction it is, that all of these companies want to be getting into the country. In terms of where our project is located, we're down in the southwest corner of Ghana. When we then zoom in and have a look at that. You've got 2 prolific gold belts in Ghana. You've got the Ashanti Belt which has some of the largest deposits on the planet, including Obuasi at 66 million ounces, Tarkwa, 25 million ounces. We're then on the Sefwi-Bibiani Belt, which we've got great neighbors along trend, Chirano and Bibiani sitting at 5.5 million and 6.5 million ounces and then here's that Ahafo Project that Newmont owns, which is at 20 million ounces and growing. So lots of very large deposits along trend from us. Directly on the other side of the border in Côte d'Ivoire is the Afema Project which is sitting at 4 million ounces and growing. So again, when we talk about being on a prolific belt, this is one of the key things that we point to in terms of the potential size that our Enchi project could grow to. Looking at the project itself, 248 square kilometers in size. We've identified roughly 25 targets to date, of which we've only drilled on 9 of them and 5 of them make up our resource today. So lots of greenfield targets for us to go after as well as the average vertical depth of our pits that constrain our resource today is only down to 80 meters. So the ability to drill deeper, which we'll talk about, is where we think we can add a significant amount of ounces and unlock additional value for shareholders. We are, as I mentioned, in the midst of a 45,000-meter drill program. The first part of that or Phase I portion of that drill program has primarily been focused on infill drilling, so resource conversion, taking ounces from the inferred to the indicated category. That's one of the key things that will allow us to go from a PEA to a PFS. At this stage, we feel we've completed the number of meters required to convert the ounces we're looking for. And now with this Phase 2 portion of the drilling, we're back to resource expansion, greenfield exploration, which, again, we think can create a lot of value for shareholders. So with that Phase 2, there's a few different things we're looking at. To orient you, this is our Enchi project from the north to the south, you're looking at 40 kilometers of strike length, so a very large project. Sewum is our largest deposit followed by Boin, Nyam, Kwakyekrom and Tokosea. All of these deposits remain open along stripe. So systematically stepping out and chasing these structures is something that we will continue to look to do. We see that as near surface easier drilling that can add ounces and ultimately expand mine life. We've then identified a number of parallel structures that we're excited to be drilling that we think can ultimately grow the overall size of the mineralized footprint at some of our existing deposits. And then we have previously drill-tested areas like Eradi, Kojina Hill, Nkwanta, Sewum South. These are areas where we put limited drilling in historically that we've been going back, doing additional drilling, following up on the discoveries that we've made will allow us to grow the overall size of our global resource over time. The last thing that we're excited about and a lot of our investors have been waiting for is the ability for us to drill some deeper holes on the project again. So at the moment, we've got 3 diamond rigs that we've got drilling focused on some of the deeper opportunity on our project and we're looking to get first results out from some of that drilling in January of next year, and then we will continue to have a steady flow of drill results coming from this deeper drilling and expect the drilling to continue right through 2026 with some of that additional capital coming in from the warrant proceeds that will start to or continue to come in between now and the end of February. So what we're looking at here is a long section of our Enchi Project, and we're comparing it to the Chirano Mine. Again, as I mentioned, the average vertical depth of our pits today is only down to 80 meters. And where you see a lot of these Greenstone hosted deposits along the Sefwi-Bibiani Belt from us really grow in size and increase in grade is as you start to test some of these high-grade feeder zones. So when you look at that 80 meters on our project and you compare it to Chirano, it's pretty clear to see where some of that growth can come from. One of our analysts actually put out a really interesting report looking specifically at this deeper opportunity. And one of the things that he highlighted is that since Chirano put out their initial reserves on their project that our overall resource has grown by about 6.5x and where the bulk of that growth has come from, is these high-grade feeder zones that sit on their project. Historically, we've only drilled about 45 deeper holes on our project, and we have had some good success and we're excited to be following up on that success that we've had with the first drill results coming out in January. So when we look at some of those results, if we go to our Nyam deposit, for example, historically, 15 holes drilled here. And you can see some of the grades that we're getting 6.5 over 4, 5.5 over 8, 5.8 over 7, 5.4 over 9. So these are the types of grades and the high grade that we're ultimately targeting with this additional Phase 2 drilling. So very excited about that and keen to get those results out to shareholders starting in January. So that's the exploration side of Newcore. So unlocking the district scale potential of the project is something we're laser-focused on. getting into this deeper drilling is something we've been excited about for a number of months and can't wait to get these results out starting to come out for us and investors. But there is a fundamental underpinning of value for the company, which we often talk about. So in 2024, we put out a very simple open pit, heap leach PEA. When you look at the results from that at a $3,000 gold price, you're looking at an after-tax NPV of $971 million after-tax IRR of 136%, nice production profile of 122,000 ounces over a 9-year mine life. That NPV compares to a market cap today of roughly, call it, $122 million to $125 million U.S. market cap. So when we talk about the ability to fundamentally re-rate the company, we think by taking it from a PEA to a PFS, we will create a multiple re-rate in the market for shareholders. One really simple way of looking at our project is for every $100 move in the gold price, the project adds roughly USD 50 million to the NPV of the project. So we're adding about 40% of the market cap of the company today for every $100 move in the gold price. So a tremendous amount of leverage to the gold price for investors is something that our project provides as well. when you get up to trading ranges in the, call it, $3,000 to $3,500 range, which is where long-term consensus is these days. you're looking at $970 million to $1.2 billion of after-tax NPV. So again, going from PEA to PFS, that process of derisking the project commands a higher multiple from the market, and that's where we think we can unlock some fundamental value for shareholders. So with that, maybe I'll just kind of recap and then we can jump into questions. So 45,000-meter drill program underway. Phase 1 is completed, which was the resource conversion. We're now focused on resource expansion and the thing we're most excited about is this deeper drilling and looking forward to getting those results out in -- or starting to get those results out in January and continue to aggressively drill right through 2026. We are getting a lot of that work completed that's required to feed our PFS and we'll look to commission that PFS in Q1 of next year. And then at the end of the day, you've got a management team and Board, as I mentioned, who are truly aligned with shareholders through that 15% ownership, very strongly backed by deep pocketed long-term institutional investors as well as great support from the capital markets. in a Tier 1 jurisdiction that has a lot of desire to see mining projects built. So with that, Deb, maybe I'll kind of hand it over to you for any questions.

Yes, sounds good. And I'll start with a few of my own questions. But like I said, if anyone from the audience has any, feel free to put them in the Q&A box. So I guess just starting with like Enchi's positioned as one of the few district scale under export gold systems in Ghana, still in the juniors hand. How do you frame Newcore's competitive advantage in a country where most producing assets are owned by majors and mid-tiers?

Yes. So if you look at our project and the stage it's at, going from PEA to PFS, as I've mentioned a number of times, we're 1 of the 2 most advanced gold projects in the country from a development perspective. So there's an interesting dynamic in Ghana, where you've got some of the biggest gold producers on the planet as well as mid-tiers, as you've highlighted, there's over 5 million ounces of production per year coming from Ghana, but then there's really a dearth of development stage projects in the pipeline. So that's one of the real advantages for us is that we've got a lot of support from the government to take this project from development stage and into production, they're very keen to see mines built in country. As I mentioned, it's important for jobs. It's important for taxes. It's one of the biggest contributors from an FDI perspective in the country. So we've engaged a lot with the government over the last number of years. Our entire team in Ghana is gone in, and we don't have any expats in country. And they've talked about the support and the desire to see our project move into production. So that would be, I'd say, probably the key element is where we sit in the country relative to the other projects that are in country. There's production and then there's us. So that support that we've got is probably one of the big differentiators. And one of the things we can really leverage to fast track this project forward.

Staying on the theme of Ghana, can you speak to the merits. I know you mentioned it briefly, but maybe talk a little bit more about Ghana and what differentiates it from its neighbors.

Yes. So, as I mentioned, it is Africa's largest gold producer, sixth largest gold producer on the planet just behind Canada and the U.S. Interestingly, it actually produces more gold on a per square kilometer or per mile basis than Nevada does. So you have a huge concentration of expertise in a relatively small country. So we can obviously leverage all of that, there's a lot of service companies in country. Ghana is ultimately an exporter of mining services around West Africa, they're an exporter of mining talent around West Africa. So all of those things, when it comes time to development and production are real benefits for us that we've got those down the road from us. A small example is drill rigs. Our main drill rig company that we use Geodrill is 4 hours down the road. So the ability to have all of those services at our doorstep is a key thing. I'd also highlight that we're seeing, obviously, a number of countries and governments around the world revising their mining codes and looking to squeeze more out of the -- out of the extractive industry. And last month, in Ghana, we actually saw the government come out and get rid of VAT. So the value-added tax. So for exploration stage companies, they've gotten rid of taxes on the exploration that's being done in country. So where we're seeing other countries try to squeeze more, we've actually seen Ghana go and take taxes away to encourage additional investment into the country. They want to see more exploration. So obviously, us already being in country with a very large land package, that's a real advantage for us. It will just mean back of the envelope, we can drill 15% more meters, which is what the tax is today.

Can you talk a little bit about foreign ownership rules, royalties, permitting time lines, et cetera? What do you see as the major jurisdictional risk today? And how is your local engagement strategy positioned you for a smoother permitting path?

Yes. So from a jurisdiction perspective, obviously, Ghana is in West Africa. West Africa gets a lot of press for a number of the wrong reasons. There are countries where you've got security issues, you had coups, you've got a number of those issues in neighboring countries. They're primarily the French West African countries. Ghana has had a very stable -- it's been a very stable country for a number of years. If you go look at the various groups that cover elections, for example, you'll see it's been free and fair elections for decades now, there's a good rule of law. From a security perspective, it's a very safe country. whenever I'm there. I just get in a car and drive across the country. We don't have to have secure those things that you see in other parts of West Africa. So those are all real benefits. And then again, because there is 5 million ounces of production, you've got a lot of the majors in country already. There's a very, very strong kind of mining code already in place. That's been kind of worked on and negotiated over the last number of decades. So all of those things are real advantages for us in terms of pushing the project forward from a labor perspective, as I mentioned, a number of our employees have worked for the major mining companies and the mid-caps in Ghana. So very well-trained workforce. And then beyond that, you've got 2 mining universities in Ghana. So lots of students coming out of that program. We do internships of a number of them at our projects. So all of those things really contribute to why I talk about Ghana being a Tier 1 jurisdiction. And we're very fortunate to have been able to amass the land package when we did and now be at a point in a good gold market to be able to move it to a construction decision and ultimately into production.

What are the government royalty -- what is the government royalty structure? And are you subject to any other royalties?

Yes. So there's a 10% free carried interest for the government. There's been a 5% royalty, which is standard across all projects. We then specifically at Newcore, have an additional 2% royalty with Triple Flag. And then from a tax perspective, 35% tax in Ghana.

Can you talk a little bit about your management team and Board of Directors.

Yes. So as I mentioned, my background is I spent the last -- I started my career in the investment banking side of the business was 20 years in that area. If we look at -- at the Board, so Doug Forster, he's our Chairman. We worked very closely, Doug, Blayne, Ryan King, they were all involved in Newmarket Gold. That was a $10 million company, vended in the Fosterville asset in Australia, eventually sold to Kirkland Lake for $1.4 billion. That was a very successful company. I worked very closely with Doug, Blayne and Ryan when I was in London, helped to raise a lot of the capital for Newmarket Gold out of investors in the U.K. and Europe. After that, we worked really closely together on Caliber to buy B2Gold's assets in Nicaragua. If you fast forward to today, they've now sold to Equinox Gold and the management team from Caliber has taken over at Equinox and have added over $6 billion, $7 billion of value to that company since those 2 companies have merged. So, we actually have a lot of overlap in terms of our Board and the Equinox Board, 4 of their board members also sit on our board. And that's really Doug and Blayne who helped found Caliber and when that merger happened, a number of the Board members moved over. In terms of the management team, Greg Smith, over 35 years of exploration experience. He's worked on these greenstone hosted deposits around the world. He's been leading the efforts here for the past 10-plus years. Mal Karwowska, she is a key part of our team. She heads up our Corporate Development, Investor Relations side of the business. Has worked in private equity, has worked in investment banking and then has worked on the corporate side, including projects in Africa for a number of years. Dan Wilson, he's our country manager. We've got over 50 employees in Ghana led by Dan Wilson, so he's got a wealth of experience. And then lastly, I'll just talk, Alan Pangbourne, we brought him on as a technical adviser. Alan's got over 35-plus years of mining experience with BHP for 15 year, was COO at SSR has worked on heap leach projects, has worked in Africa. So we've really leveraged a lot of his experience as we take this project from PEA to PFS. So high level, that's the Management Team and Board.

Why did you get involved Luke? What was it about this project specifically?

So I -- when I got involved, I had obviously done a lot of work in Africa. Specifically, Ghana, I've always viewed as a Tier 1 mining jurisdiction for all the different reasons that we talked about and ultimately saw this project as an opportunity that had district scale exploration in a country that ultimately wanted to see mines being built and viewed it as with additional capital, drilling, exploration, we could ultimately create a lot of value for shareholders. And backed by a Board and team that had a lot of very successful companies that they had been involved in. I had worked with the team involved here for a number of years, as I mentioned, Newmarket, Caliber, those different groups. So that was really what attracted me to the project was the asset, the country and then the team involved. So Yes, that was how I got involved. So when I came in, Doug stepped up as Chairman, Greg Smith came back full-time VPX, Mal came in to head up our corporate development and IR side of the business. So we really relaunched the company at that point. We've since grown the institutional ownership from about 0% to 55%. We brought on 3 investment banks who seen the tremendous upside opportunity and are now covering us from a research perspective. So a lot's happened since we relaunched the company at that point.

Yes. You've done a great job building a really strong institutional following.

Thank you.

Congrats on that. So moving on to this week's news. So earlier this week, you announced additional drill results, which marks the completion of the resource conversion portion of your drill program. Can you talk a bit about these results?

Yes. So these results come from Boin Northwest. So it's one of these parallel structures that I've kind of referred to that we're going back and drilling or that we've identified new parallel structures. So it's a combination of stepping out at Boin Northwest as well as a few resource conversion type holes there as well. So it's an area that we've identified again that we're going to want to go back, do additional drilling, continue to step out and chase that structure at Boin Northwest to ultimately look to grow the size of that specific mineralized footprint and over time add additional ounces into our global resource. Nice consistent grades with where our resource is today. But then within that, some nice higher grade as well, which we're always encouraged by.

Got it. And so your -- I believe you've announced 30,000 of the 45,000-meter drill program that's underway. What do you think have been the key achievements with the drilling completed to date, what should investors take away from the first phase?

Yes. So resource conversion would be the main thing. Obviously, a lot of it was focused on converting those ounces. But we've also had some real standout results, and I can kind of point to some of those if that's helpful for people. But -- so resource conversion has been a big focus. So converting ELS within the pit was the big focus to be able to get indicated ounces to take us to a PFS. But also some real standout results. I mean, 2.25 grams over 56 within that, almost 4 grams over 15 within this first 30,000 meters, we also had our best grade meter intercept ever. So 204 grams over 1 meter. I would argue that results like these 3.6 over 28 within that almost 7.8 grams over 11 meters. So we've had some real standout results as part of the resource conversion program. So that's been the big focus is converting ounces. But obviously, any time you start to see these types of results as well, you're very encouraged. And a lot of these will warrant additional follow-up. I mean this hole over here is similar 4.4 grams over 20 meters, I mean that's over 100-gram meter intercept. So yes, so very pleased with the results. And now with the second phase, we're obviously back to focusing on pure resource conversion type drilling.

Moving on to your development path. So your potential development path involves a series of satellite pits feeding a centralized processing facility. As you've highlighted, your current PEA focuses on the shallow open pit mineralization that's amenable to heap leach processing. Why was a heat leach process determined to be optimal? And how do you envision the longer-term transition with deeper, fresher mineralization and higher-grade theater zones transforming the path forward at Enchi? I think that was the longest run-on question I've asked this week. So good luck, good luck, Luke. If you need, I could ask it in pieces, let me know.

I should have been taking little notes just to break down the question so I could ultimately look at that. So -- but yes, in terms of -- maybe I'll just try to pull it back up here.

I'll ask -- do you want me to...

No, no, no. Right here. So in terms of looking at the project, so talking about where the heap leach is located. So we're looking at putting it right in between Boin and Sewum, which are our 2 largest deposits. So ultimately, being able to truck material from those 2 areas to a centralized processing facility. That's only about 1 kilometer away from those 2 deposits there. We've then got Nyam and Tokosea, which are a little bit longer trucking distances. But that's kind of the, call it, hub-and-spoke centralized facility area. So we've got very large zones of oxidized material on our projects. So that's one of the things that attracted us to looking at a heap leach operation. We've also had very good column test recoveries in the oxidized material. So kind of some of the tests that we've done are averaging 92% recovery. So very strong recoveries, plus very large oxidized resource kind of led to looking at a heap leach operation, and that has obviously produced very strong economics. In terms of the mid- to longer term, one of the things that we're looking at and specifically in this gold price environment is, if you look at our PEA, the base case that we used was $1,850. That was in middle of 2024. I know a lot of people probably can't believe that gold price of $1,850 was used for an economic study when we're trading at $4,300 today. But that was the environment we were in, in 2024. So one of the things we're looking at is, obviously, there's been a complete change in the gold price environment and in today's world of $4,300 or $4,000 gold. Obviously, every single percent of additional gold that you can recover could add a lot of value to the overall project. So in the mid- to longer term, what we're looking at is at what point does it make sense to potentially put a CIL plant in to ultimately capture some additional recoveries through that CIL process. So we're looking at a number of those things internally at the moment, doing some trade-off studies as to would it make sense to put a CIL plant in? And does that justify the additional CapEx when you can increase the recoveries of the -- from the project. So those are some of the things that we're looking at right now. And what that could also do is create a real step change from a production perspective. So obviously, processing the oxidized material through a heap leach operation can create a lot of production. But if you then went and layered a CIL, for example, on top of that, that could create a step change from a production perspective. So we're doing some trade-off work at the moment to look at the additional recoveries that would come from the CIL and what that would mean from a production perspective and ultimately, the economics of the project, which one creates the most -- the best economics for the project. So I don't know if that can -- answered all of those questions within the question?

Works for me. And you actually answered another question, too. So you saved yourself time later. I guess the last question I have on development is what development work is currently underway that's critical for advancing the project to pre-feas and how much of the current inferred resource do you think could be reasonably moved into the indicated category?

Yes. So there's a lot of work going on in the background, and this is all work that's required to derisk. And again, a big part of the reason you see a multiple re-rate for companies at a PFS stage is because of all the derisking work that needs to happen. So we're doing hydrological work. We're doing geotech work. We're doing additional metallurgical work on the project. We're doing additional environmental work as well as other baseline studies. We're doing compactability test work. So there's a lot of work that's been happening over the last year, that is moving us to that point of being able to commission our PFS in the first quarter of next year with the goal of getting that completed by the middle of next year. As well as, obviously, all of that drilling infill resource conversion drilling that we've been doing. If you look at our resource that fed our PEA and I can pull it up here, if that's helpful. If you look at our resource that fed our PEA, we sat at 970,000 ounces in the inferred category. And our goal is to move that from -- move 570,000 ounces from the inferred category to the indicated category. And the reason we look at 550,000 ounces is because ultimately, what fed our -- so I just lost the slide here. What fed our PEA was 1.3 million ounces and at 970,000 ounces in the inferred 740,000 ounces in the indicated category, we're ultimately looking to -- here we go. All right. So if you look at our resource today, we sit at 740,000 ounces in the indicated category. We've then got another 970,000 ounces in the inferred category. If you look at our PEA, it was fed with 1.3 million ounces of resource. So our goal is to ultimately convert roughly 550,000 ounces from the inferred to the indicated category, that would get us to our goal of roughly $1.3 million, which would allow us to then wrap the PFS around what we outlined within the PEA. So with that initial, call it, 30,000 meters of drilling, we think that we've been able to accomplish that goal from a resource conversion perspective. And now, obviously, with the second phase of drilling, we're back to that more exciting resource expansion drilling and going after a number of these targets.

We talked -- you already talked a lot about the upcoming targets that you're focused on for the exploration phase. Do you want to revisit them? Do you want to tell us what you're most excited about?

Yes, absolutely. And we can -- I'll just pull up a couple more slides here. Hopefully, these visuals are helpful, and I'm glad everyone's being patient with me as I bounce around a little bit. So again, we looked at this long section here compared it to Chirano. So these high-grade structures that you see on these greenstone hosted belts is obviously something -- here we go. These shoots here that we see along the Sefwi-Bibiani Belt and other greenstone hosted belts around the world is something that we're obviously very excited to chase and explore. We looked at Nyam and where some of these structures ultimately sit on our projects. So just as a reminder, these are the pits that average 80 meters in depth Historically, we've only drilled 15 deeper holes here at Nyam. As I mentioned, some very good results, 5.8 over 7, 5.6 over 8, 5.4 over 9, 500 meters to the south, 3.2 over 9, 7.4 over 8, 3.5 over 9. So this is one area that we're going back to and drilling some additional follow-up holes to ultimately look to continue to chase these structures at depth. We've also been drilling some holes over at our Boin deposit. So just as a reminder for everyone, Boin is our second largest deposit. So historically, we've drilled 15 deeper holes here at Boin. It's important to highlight that for us at Enchi, at Newcore, 250 to 350 meters is what we consider deep, so on a global scale that as you would know, is relatively shallow. But with that deeper drilling we've done historically as well as all the drilling that we've done near surface. We think we've started to identify where some of these high-grade structures ultimately sit on our project. So getting back in here and doing some follow-up is what are some of the targets we've been drilling at the moment. And we're very excited again to get those first set of drill results from the deeper drilling back and out to investors in January. And then we'll have a steady flow of deeper drill results coming after that. So I know this is something that a lot of investors have been waiting for and have been very key we all recognize the tremendous upside potential these deeper holes can have from a share price perspective. And yes, that's kind of the focus is targeting some of these high-grade deeper structures. And based on the results, we'll then obviously go and look at doing follow-up drilling and continue to prioritize the areas where we're seeing those nice drill results come back from. We're also over at Sewum, which is, again, our largest deposit. We've got some holes that we've been looking at drilling and starting to drill there at Sewum below those existing pits as well. So it's really a culmination of targeting our 3 main areas from a deeper drilling perspective at this stage.

Since you have this map up, maybe you can talk a little bit about the full district scale potential.

Yes. So when you look at this map here, you're looking at 248 square kilometers in size. So it's a very large land package. Again, we've identified about 25 targets to date across our projects. So lots of targets for us to go after. One kind of simple way of looking at it is when we look at the airborne geophysics, what you'll see is at our project, and this looks very similar up at Chirano and Bibiani, is you have the main Bibiani sheer which runs to the west of us, north-south. You then get the second and third order splays coming off of that main Bibiani sheer. And that's where you'll see a lot of the mineralization sitting and where a lot of our targets ultimately sit. When you add up the total strike length of all of that sheering going through our project, it adds up to about 100 kilometers of stripe. So when we talk about district scale, it's a combination of the number of targets, the sheering going through our project as well as, obviously, the fact that we've had very limited deeper drilling on the project. So all of those have the potential to add a significant amount of ounces to the project, and again, when you look at neighbors along trend from us, you're looking at Chirano at 5.5 million ounce historical endowment, Bibiani at 6.5 million, Newmont at 20 million ounces and growing. So we think there's significant opportunity for us to grow this resource with additional drilling across the project. We've then also gone and done tens of thousands of soil samples across the project as well. So this is another way that we look to help identify the various targets on our property.

Right. That's -- I mean, it's massive, right?

Yes, very large land package. This is a new area that we added a couple of years ago called Omayte, that added about 36 square kilometers to our project. So we're in here right now doing a bunch of soil sampling, trenching that type of work to look to prioritize some of the targets in that area as well.

So moving on to valuation. So when you benchmark Newcore against other West African developers, particularly those with district scale land packages, where do you see the largest valuation disconnect? And what do you believe the market is not fully appreciating about Enchi?

I mean the district scale exploration potential, obviously, can create huge upside for investors. But ultimately, one of the things as an investor in Newcore that I really like is the fundamental underpinning of value that the company has. I mean this is a project that we're able to move to a construction decision and ultimately into production without finding another ounce on it today. And when you look at that, again, at, let's say, a $3,000 gold price, the project produces an after-tax NPV of $971 million, 136% IRR. That compares to a market cap today of roughly USD 125 million, so when you look at PEA stage projects, they'll typically trade in that, call it 0.2 to 0.3 range. I mean based on the NPV here, we will be trading around 0.1x the NPV of the project. So we think there's a disconnect in terms of the fundamental value of the project. And we think, and I think that through derisking it to a PFS, we can unlock some of that value disconnect, but then beyond that, again, we could wake up tomorrow morning and find out that we've had a huge intercept at Boin, which could add incremental value beyond the project that we're moving to a construction decision today. So -- and I would argue that ultimately, the exploration investors get for free today, because of that fundamental underpinning of value that we think we can re-rate through this derisking process to a PFS.

So given how much consolidations happen in West Africa and Ghana specifically? Do you view Newcore as a future producer in its own right or a likely M&A candidate as you derisk the merits of the project. How do you think about that?

Yes. So we've obviously seen a lot of M&A activity in Ghana. I mean, here are some of the recent transactions, again, I think this speaks to the desire for companies to get into Ghana because they recognize it is a Tier 1 jurisdiction to be operating in. I mean the most recent transaction we saw was Zijin came in and paid $1 billion for the Akyem mine, which is Newmont's non-core project in country -- that was in -- that was the beginning of this year. So obviously, we've got another major company who's come into the country. Cardinal, a number of the listeners may remember that company, Aussie listed, there was a full-on bidding war between Nordgold and Shandong. Shandong ended up winning out in that. And they've actually just last year poured first gold on that project. So -- and it will produce 350,000 ounces per year. So to go from buying a project to pouring first gold on a project of that size and scale, 350,000 ounces, again, I think, speaks to what a great jurisdiction Ghana is to be able to build projects in and the reason why we want to see -- the reason why the government wants to see companies come in and ultimately build projects. We've then got sovereign wealth fund that they've set up in a country that's also making direct investments into companies and projects. to help move those along and provide that additional government support that helps get projects into production. So for us at Newcore, it's not lost on us that obviously, as we derisk this project, Typically, where you'll see M&A is around that PFS/FS type stage that someone will potentially come along and make an offer to us that we then ultimately need to take to our shareholders and let them decide as to whether they're in favor of that or not. So our kind of goal is to ultimately get the valuation to a point that creates a win for all shareholders if that were to happen down the road.

All right. Last question for me it's for coming up to the top of the hour. So what are the top 2 to 3 catalysts over the next 12 to 18 months that you believe could start to unlock and value and re-rate Newcore.

Yes. So I think exploration is obviously a big one. As we've talked about a number of times on this webinar, we're now focused on that Phase 2 portion of our drill program. So targeting those high-grade feeder zones that with drill success, we think can create outsized returns for shareholders. But then fundamentally, we think there's a re-rate opportunity as we derisk this project from PEA to PFS. Our target is still to have that completed by the middle of 2026. So drill results first half of the year and beyond, but then a major catalyst could be that PFS that we put out in the middle of next year. And the re-rate that we expect would happen with that. We've also got another $10 million worth of warrants that have started to come in and we expect are going to continue to come in between now and the end of February. Again, about 75% of those are held by 4 major institutional investors of ours who are very supportive, want to see us continue to aggressively drill and push this to a construction decision. So that additional capital coming in would allow us to potentially expand the overall drill program that we're doing, start to get some of the FS work that will be required once we've got our PFS completed. So all of that, I think, could also be a catalyst for the company. So drill results, more cash coming in from the warrants, potential for expanded drill programs and then the PFS, we think, could be a major catalyst. I mean if you go back and look at the PEA and where we were trading when we put that out and the catalyst that, that was for the company, we think that the PFS could have a similar impact for Newcore and for our shareholders ultimately.

Great. Well, it sounds like you've got a ton of news flow, a very clear strategy to advance the project and unlock value. And in a great jurisdiction. I love Ghana, I don't know if I ever told you I went there.

You have mentioned that in the past. And I think one of your colleagues is from Ghana.

Yes, actually, I think she's in Namibia right now, but she is Ghanaian and spends part of her year there. Actually, my friend, not my colleague, but my colleague is my friend too, but my friend that I went to her wedding her uncle was Adam Mills, who's a former Prime Minister who unfortunately died in office. But yes, I love Ghana, it's a wonderful place.

Yes. It's a wonderful place. And again, Deb and the Adelaide team, I think this is a great cause that you guys have organized for the holiday season and kind of donating your time in return for companies donating to various charities, I think, is a great thing to do. And obviously, just to reiterate the charity that we wanted to donate to and would encourage anyone watching this webinar to donate to is FACE and yes, we -- faceforafrica. You can see the website there. It does a lot of great work. It allows a lot of kids who wouldn't necessarily be able to go to school otherwise to be able to get a good education, which ultimately is the fundamental foundation for success and growth. So we think this is a great charity. And again, Deb, thanks to you and the team for organizing this.

Well, thanks for presenting Luke. Thanks to you and your team for being incredibly organized. And yes, thanks to all the participants for your questions and your participation. If anyone has any follow-up questions or wants a meeting, feel free to reach out, and I can have that organized. And yes, I guess, happy holidays, everyone.

Thanks a lot.