Nova Minerals Corp (NVA) Earnings Call Transcript & Summary

Okay. I'll get started. We've had a few people on. Louie Simens here, Director of Nova Minerals. We got Chris, who is on webinar. Hope to answer questions. I know there's been a bunch of questions and all very similar questions, and we'll have all the answers for you. And we've got a few questions on the -- through e-mail, and I'm sure some questions will come through as we go through the process. To start off, I wish to introduce myself. We'll start from scratch. We'll start from scratch. We built the company from $5 million up to $400 million. Now we've taken it from 1 hole to 9.6 million ounces with spun off Snow Lake Resources that's given us $100 million value from a $4 million investment. We've got about $4 million -- in fact we've got $4 million entire from about $400,000 investment. We've created value everything we can control, we have controlled. I'll let Chris talk more about the geology and with the scoping study, how were limited with indicated resource under the ASX listing rules and how we couldn't expand into the inferred resource that -- Chris will talk much more in advance on that. And where the CapEx is where it is, what the production portfolio is where it is and whatnot. To answer one critical question that's come up, and I hope answers -- there's 4 or 5 questions on the info e-mail and 4 of them about capital raise. To clear that up, as I said, we have $100 million in liquid securities -- listed securities. We have strategic holder -- strategic private equity, natural resources funds, generalist funds that want to take positions in Snow Lake. At these prices, under IPO price, we don't want to -- we wouldn't take the money. It's not like there's so much going on the day that we just wouldn't do it. There's so much upside inside like that, that we just wouldn't do it. We have cash in the bank to last us -- to get us going again, get us drilling, get into RPM. That's why we're looking for to the most. The RPM is -- the hole speaks for itself. If there's a capital raise coming, you can see over the last couple of days, the directors to close the $500,000 bought on market. if there's a capital raise coming, the directors would not have bought on market. That's the reality. That would have taken -- that we participate in a capital raise. Chris, I'll leave it over to you to go through the scoping study and we'll answer -- let me just -- if there's any questions that I've missed from the info e-mail. Hang on Chris. Sorry guys, on the call at this point, mid-teen mining companies that couldn't -- they were struggling to understand why we didn't used it. Because under NI 43-101 you can use the inferred resource, where -- under the ASX listing rule, your limited to indicated resource, which was a bit bobber to us. But Chris will go into more detail on that. That says about the capital raise. Again, on that capital raise, the CapEx, there's a question here, Chris, on CapEx. And I'll let you answer that, Chris, with your -- introduce yourself and the CapEx on -- well, what the CapEx is and what it's allowing for? All questions on capital raises. I don't know where these capital raise came from, where that rumor came from why we have to -- I'll also add that we've been consolidating our accounts for 3 years now with Snow Lake Resources. It's been a consolidated entity. It's an IFRS accounting standard. We control the Board. We did control the Board till recently. We have over 50% equity position in the company. And it's just an accounting standard that we have to report as a consolidated entity. We are working towards deconsolidating the entities of Nova standalone, it's not like these are stand-alone. That will -- that's happening now. That's the reason why we have to report those figures, unfortunately, the issue with showing you in the last quarter that large sum of cash in the bank is twofold. One, we can't break it down. First of all, it's a consolidated entity. So it's part of Nova, the consolidated group. Second issue, if we broke -- if we had broken it down puts Snow Lake in an awkward position with the SEC because they haven't reported their accounts. So we couldn't -- there was no way in the world we could break that down. And that's why we were pushing. And now we're working towards to deconsolidate the accounts. From next quarter -- from half early next quarter onwards, we hope to have it deconsolidated and everyone will have a better picture of Nova. But what Nova has a good cash position to continue what we're doing. We have $500 million in listed securities, and we've got plenty of interest. So cash is not an issue. Cash is not an issue. Chris, over to you. Over to you. Go into the specifics of the scoping study and expand on the inferred, Chris, expand on the inferred what it looks like we've seen further than if we're done under NI43-101.

Sure. Yes. So this is Christopher Gerteisen here, CEO, Director of Nova Minerals. And a topic here today is scoping study. Now shareholders will have -- you see the brutal share base drop in the last couple of days. So obviously -- is that all due to the scoping study release or other things that's going on it's the scoping study. So there's obviously some we believe are misconceptions or some questions that shareholders would have to understand the scoping study more and as well as us as the company, we're baffled by the whole situation because we see this as a very positive scoping study, and I hope we can illuminate that for you today with some questions in that. I'll just say just as an intro. So if you look at the -- what we've built here. So we're not just -- it's not just one project, right? You're not just the scale, you have to understand the project. We're on a gold trend, the Estelle Gold Trend. It's like the Carlin Trend in Nevada. This is a company-making type of project. And that's the way we see it, and that's the way we intend to develop it. And so the plan, the capital costs to understand that better, we've scaled that -- to scale that in the scoping study to cover the project. And so this is the plant, this is the plant because we know what resources we already have all the resources, including the indicated, inferred at Korbel and RPM, 9.6 million ounces. And so the way we set up the plant as it scale to -- with an understanding to accept that material in the future. And so people have talked, we've heard questions like IRR and these numbers that 20% IRR and all these kind of things. Now we're going to go in there, we could be a fly-by-night type of a company, Raven Village, get 6 to 8 years out of just when we got there at Korbel, a huge IRR and walk away. But building in these projects, especially one of this size and proportion that we're dealing with at Estelle, it takes a lot of time, effort. And it's excruciating on some days to get these projects permitted approved and resources is built and drilled season by season, it's about the long game. And so you have to understand the capital of the plant that we built there is set up to accept the project as a whole, to set the budget as a whole. And -- so that's the first thing. Now in terms of production with the scoping study, as Louie alluded to there, we're limited from the ASX to what we can report in terms of what we produce. We're constrained to the indicated portion of the Estelle starter pit because that's only half of the deposit has been infill drilled and been proved up to indicated level resources. And so that's what the production profile represents right, just the indicated resources. Now of course, that's only 3 million ounces available to us to report production from in the scoping study because I think it's -- you have to have at least 80% of the resources have to be indicated in that first payback period. And then over the life of the mine, the number is like 75% have to be indicated. So we're very constrained about -- with that. So what we -- with this plant, we have plenty of flexibility now because that is the plant. So as we continue to infill the Korbel resource and capture more of that 8.1% current resource and capture more of that and prove it up and you indicated, that will come into the picture as well as, importantly, RPM will come into the picture. Well, to understand the flow sheet as well, you have to understand. So over the last couple of years, we've got a lot of test work. We've done a lot of studies. We have a lot of ideas. And so what we've done here to release this is to start to get us an indication, do we have a viable project is our test work and our studies and our ideas are -- is this viable. And so what we've done is we've taken all this material and we've handed it over to independent experts to say like, "All right, compile it all, compile it all for us and tell us, do we have a viable project. And the answer is demonstrably, definitely, yes. Even with the constraints with the indicated that we have to deal with. And so we definitely have a viable project with the flow sheet. What the flow sheet also now tells us and the scoping study is where are those critical sensitivities. If you look at the sensitivity analysis, what are those critical sensitivity -- sensitivities and now we can hone in on those sensitivities, the sensitivities that we can control, being grade and recovery and these type of things and find the improvements as we go forward, right? So one of the things that you saw on the scoping study was a production profile, which showed the ounce production. And so what we're really concentrated on in the scoping study, what we're really focused on is that early payback period, those first 3 years. And so you can see the production there is 200,000 ounces the first year, 150,000 ounces. And then there's a dip, then there's a couple of troughs there. I think it's around year 4 and 5. If I bring up the scoping study here, here it is, years 4 through 6 there's a trough and years 8 through 10, there's a trough. And so how do we fill in those gaps. Well, those gaps will be filled in with additional indicated resources at Korbel as well as don't remember -- remember we have additional targets outside of Korbel Main within the wider Korbel project area, namely one would be Cathedral that are right on the surface that can be picked off and sent in to fill in those gaps. The other item that's hugely sensitive in the scoping study.

Chris, just back on that. I want you to talk more about that where we couldn't drill the -- in the sense of the resource where we couldn't indicated the Saddle area.

Right. So we've infill drilled, the indicated resources come primarily from the Southern portion of the Korbel Main deposit. And if you look at the images there, it's like a bit of a barbell, it's a bit of a barbell, I'll just bring up the image. So you can see here, there's -- we dig down on the starter pit area here. And then up in this area, we have another area that we drive down on. The area in between is the Saddle area, we call that. And so those are still inferred resources. And so as we drill that out and infill drill that area, there's a massive potential there as well for more indicated resources within the existing pit. We've had to leave that behind at this stage. And so that's what Louie was alluding to there. So there's more indicated resources there. And then one of the main components in the sensitivity analysis, of course, is the grade. So what we've shown in this flow sheet and it's so important to us and what we've proven is that we can have a viable operation and make money off 0.4 gram material resources there. And so it's very sensitive to gold price as well. So of course, any 10% increase, as you see on the graph here, any 10% increase in the grade will add an additional 200 million ounces -- or $200 million to the overall NPV. So enter RPM. RPM is a 2-gram per tonne deposit, which is 5x to 6x of the current grade that we're mining. So you do the numbers at home. What that outcome would be in terms of the bottom line, NPV and these kind of things. So an IRR and then they'll just flow through the entire project. So we can't report those numbers because as you know, the RPM deposit is still at inferred resource category. But it's a very, very big upside, and I'll leave it at that. Very huge upside. The other thing that we need to look at is, let's just look at some of the costs. If you look at the OpEx. So in those first 3 years, which is really the critical time period for us, right? Those first 3 years, the back end of the evaluation period for past year 3 out to year 15 -- 15 years just on the starter pit, but all of that will change with the addition of the more indicated and more resources at Korbel and RPM that I've been talking about. But in that first 3 years, the OpEx, the cost per ounce is ASIC now, ASIC now $879 per ounce production, far less than $1,000 per ounce that we were hoping to get. And so we've proven that our 0.4 gram per tonne resources, we can produce at $879 per tonne. That number is only set to go down with the addition of further material from Korbel and, of course, RPM. You plan at RPM, the plan -- one of the things that we'll be studying for RPM for a very minimal capital. We're looking at taking the material at RPM and crushing it down and slurry piping it over to the main processing hub at Korbel. That's a very minimal capital increase in capital cost to do that and the benefits are just -- are huge with that 2-gram material coming into the picture. So really, I guess my point is that what we've shown is we've shown our flow sheet works, our flow sheet works and our operating costs are more than acceptable. Our -- the sensitivities are in areas that we can control, and it's only upside from here with all the other resources that will be coming online here in very short order. So one of our main priorities this year is obviously to get out to RPM as soon as possible. We've had a very warm winter here in Alaska. And so on some days, that's created a bit of a slushy atmosphere in our snow road, but we're getting through -- we're getting it through. And -- but what that does mean, perhaps if this holds has been going on for like 3 weeks is that we might be able to get into RPM a lot earlier, maybe in April, May, something like that, I'm hoping for. So that's our first thing. We have up to 20,000 meters planned there right around that 1.5 million ounces and inferred resource that we currently have. And in short order, we'll convert that into indicated and be able to flip that into our scoping study. Remember, the framework of the scoping study is the same. The plant will be the same. It will just be additional high-grade resources coming from RPM that will plug into the picture. And I think people will be pleasantly surprised. I wish you could come out and say what to indicate what that would be looking like at this stage, but we just can't do that according to the ASX. And so that's a bit of an intro, and we'll just open it up for questions there.

Chris. So if you can add, Chris, just on the why we went down this path. Heap leach is from 40% to 60% recovery. We're getting 88.3% recovery here. The...

Yes. So that's based solely on test work and the economic benefits of our current flow sheet why we've developed this flow sheet. So what you see in the flow sheet, of course, is that through overall 88% recovery. And so if you look at the sensitivity analysis, again, any kind of increase in recovery here, just a 1% to 2% increase in recovery has a $25 million increase in the bottom line in the NPV, all right? And so when you're going from 60% recovery up to 88% recovery, again, you can do the numbers. It just makes sense that when you -- an important part of the flow sheet, of course, is ore sorting. When we discussed the heap leach early on, we envision that ourselves as our peer -- as some of our peers here in Argentina Gold province. We envision ourselves both minable heap leach of course, similar to those projects. But as we did our test work, it's shown that the ore sorting works so exceptionally well here at -- with the type of ore bodies that we have here, especially at Korbel. And we can get an additional 28% increase in recovery. It's just a no-brainer that we have to go with this flow sheet to achieve maximum profit. The other thing to look at in the scoping study is what we're interested in is getting the most value out of these projects, right? Getting the most value out of these projects. And as I said, once you start up a project in these mining projects it takes a long time, you want to get out there and extract maximum value. One measure of that is the longevity of the project, we want a long life project, and we want to have a consistent long life cash flow. So the scoping study currently shows that over $700 million in cash flow just from that starter pit at Korbel. So what that allows us to do in these projects look at any large project, I mean, I believe some of the ones in the local area here, the very large ones are 6% to 10% IRR. 10% anything over about -- Barrick uses a measure of 15% IRR. But the real value comes on the longevity of the project and that constant cash flow over decades of mine life, which we plan to do here at Estelle, there's no kidding when we say we want to be out here 50 million ounces over 50 years, that's -- or 50 years of mine life, consistent cash flow to allow us to continue to develop and open up the Estelle Gold Trend as well as who knows in those later years build Nova into a company and look at acquisitions. Cash flow is the game. And so that's what we really have to look at having that long life and cash flow. So I hope that answers your question, Louie. Just specifically the test work, the test work did take and the economics did take what type of processing route you take. And so the flow sheet that we've currently developed made sense from early on from an economic standpoint and now it's been proven in the scoping study.

Chris, just on that with the additional where the geology took us and the ground disturbance, the wetland studies and the permitting. The critical factor of why we chose this route rather than a heap leach operation?

So like -- okay, so in terms of environmental permitting. So a heap leach requires the footprint of a mine with the heap leach, this is just an added benefit is massive. You can't just stack it up like normal waste. You have to do it in levels and Estelle have a massive footprint. What we've seen here when we've done our environmental work we've completed wetland surveys now and these type of things. We have very minimal wetlands anyway. So it's very easy for us with a tight operation that we're looking at now with the plant, and the ore sorting in the plant and the flotation and the intensive leach that type of flow sheet. We can easily move things around to avoid Wetlands, no problem, much more difficult to do when you're dealing with a massive heap leach type operation which we initially envisioned this to be. And so that would create a situation where we have to go for a full-blown EIS, versus the EA route, just a simple economic assessment route that we're looking at now. What the economic assessment means less time, less resources required because we're all on state land here, we just basically deal with state entities to get the project permitted. When you go for a full-blown EIS, which most -- almost certainly would be the case, if we had a massive footprint for heap leach, we would have to deal with federal entities, EPA and these type of department. So that's just an added benefit to -- that will streamline our permitting process and get this project going here as soon as possible. Next question?

We'll open it up. How much cash do we have at present and how long will it last? We have enough cash for the first drilling -- 10,000 meters drilling at least, at least. We're drilling at about $230 a meter. To put that in perspective, $200 a meter is you calculate. Our efficiencies have gone down and I think they're going to get better with on site prep lab, independent on site prep lab. So we've got more than enough cash. Also, we have mandates on the table that bridging -- from bridging facilities to hybrid funding solutions -- options. And as alluded to earlier that we have almost $100 million in liquid securities that guys were pleased of that. We're not in a -- we think there's a lot more upside in that.

So I'll just add, if you look at the scoping study, if this share price hit is due to -- just simply due to the scoping study, then I mean, it seems that some investors are treating the scoping study like some kind of bankable feasibility study and that's just simply not the case. It's a scoping study, right? And the main value that we extracted out of it was to test our flow sheet. Can we make money on our starter pit area at 0.4 grams per tonne. And yes, we can. Yes, we can. That's what we've proven, and that's a huge milestone to be reached. And as I said, now we can hone in on those sensitivities and build the project here. This is a great foundation to build from. And as these -- as RPM comes into the picture, I think we're all going to be pleasantly surprised, and we expect that to have news on that this year for sure with all the drilling that we have planned out there. It's a starting point. It's a starter scoping study, the starting point, and it's positive, very positive.

There's no other question here. If that indicated resource, does that mean that the scoping study was actually because we not only had inferred resources at the time? No, not the case at all. We could have done a scoping study light. There isn't, we held off as those few extra holds that came in the engines assets to push ourselves into the resource, but we felt scoping study like we couldn't put a net present value, internal rate of return or cash cost would be just a very high level almost digital type scenario scoping study light. We -- as just ASX-listing rule to have indicated. I think Chris answered the CapEx.

CapEx, right. So the plant -- the central processing plant at Korbel is scaled for the project, for the project, okay? For the life of the project that we envision here and that we have with our -- if you were to include all the resources, including inferred in the project, right? And so we're constrained by only being able to produce from indicated ounces or report from indicated ounces. That's a big point to add. The other thing about the flow sheet that kind of comes to mind is the ore sorting. The ore sorting is a huge component of what we're doing. It's a grade control step. So you can't view this project as like a typical let's say, Western Australian project, where you take the ore, you mine it, and that's basically your feed to the mill. That's your feed to the mill. And there's that grade control step with the ore sorting what the ore sorting allows you to do, of course, you can upgrade, it's an upgrading process. But what that allows you is it gives you flexibility. So when there's market fluctuations and things like the gold pricing, you need to ramp up your grade or conversely bring you grade down because you're -- maybe you're -- the market conditions allowed you to extract more gold from the resource, exploit more of it and make a decent profit. What that allows you to do is bring your grade for mill feed up and down. And so say, remember, our test work showed that we take 0.4 gram material and upgrade it up to 6 grams per tonne. Now of course, that comes at a lower mass pull. So it comes out at an additional rejected material, so you might only be capturing 50%, 60% of the gold and putting the rest aside, the rejected portion. But you can bring up your gold grade accordingly. It allows you great flexibility to work with gold price and market forces. And it's a very, very powerful tool to be able to do what we need to do and take on any headwinds or take advantage of any tailwinds in the market. And so it's a really critical point. What that ore sorting allows us to do and the flexibility it gives us in terms of controlling what goes into the mill. We're not just dictated by what goals in the ground, we can -- we have that grade control step with the ore sorting that allows us to bring those -- bring that mill feed grade up and down. And extend -- ultimately extended life of the project and extend years onto the project to really optimize to get to extract the most value out of this project because it's not just one project, again, right? We're not just talking about Korbel Main starter pit. We especially in the state, we're extracting maximum value out of this trend that we're developing. The Estelle Gold Trend. And we're coming out of here, and we're going to be a part of this community for decades to come, and especially in this age our sustainability and ESG, we plan to be a major, major component of the economy out here in Alaska. Next question?

Very similar questions about the CapEx. I think...

Again, the plan is for the project.

We've got many, many options.

We don't have to -- this plant will handle RPM ore and any additional indicated resources that we get from Korbel and beyond. It's basically our plant for the project.

There's a question here, what are your plans with your Snow Lake Holding, I know you have to progress the management there? Absolutely, absolutely. They're doing a great job. They are drilling now, they will be drilling through the summer they'll be looking to increase their resources, they're doing a phenomenal job out there. And that's why we're holding tight. And we've answered most the questions -- apologies, guys. A lot of these questions are the same, repeating and there's a few questions here. Does the company have any Russian exposure? No, no. We had our Russian, look very interested to take on, but we -- you had U.S. sanctions on him. There is no Russian exposure. Would also be required RPM product being transported in the slurry pipeline? Now that's a good question. No, but absolutely -- we'd love look at it.

I just spoke to the process engineers about this today. I can allude to that. So the core of the deposit, no, what we're looking at is probably a crushing step, and a crushing step, getting it down to a size that we can slurry it to RPM. But remember, that's the core of the 2-gram material, where the 1.5 million ounces. Remember, that historic intercept of 132 meters at 10 grams per tonne came from a much wider intercept of 400 meters at 3.5 grams per tonne. And so while that 1.5 million-ounce core of the deposit is 2-gram material. There is a large halo of 0.5 to 1 gram material at RPM as well, and we intend to drill more and more of that material here. So in the later years at RPM, past year, however long it takes to mine out that high-grade core. In the later years, there's all this 0.5 to 1 gram material there that perhaps at that stage, you would -- you might put some kind of ore sorting in there to increase the grades before you send it off to the Korbel plant. But initially, I would expect initially for the first 5 to 10 years, whatever the mine life initially tends to be, that is not part of what we're envisioning there. And then again, this slurry pipeline concept is a trade-off study that we'll be looking at. Perhaps it will be trucked down there. You can truck things at some projects above $50 a tonne for trucking costs. But this is the trade-off study that we'll be doing. But we envision that the most ideal scenario will be to have a crushing step and slurry it off to Korbel. And of course, where we're planning the -- that type of crushing plant will be right centrally located just to the north of RPM. And not too far away will be the train Shoeshine prospect. So as we get in to that prospect, in the years to come. That will also be able to use that same facility to slurry or transport down to the Korbel central processing hub. So all those have a material handling studies that something we're looking at now and that will all come into the PFS.

Just to add to that, Chris, on the trucking, it's not additional CapEx on Yellow Gear. It's you're borrowing trucks from Korbel to truck it from RPM.

That's correct. All the capital -- that's why I'm saying, the capital is for the project.

The 3 things investors should waiting for in the next 3 to 6 to 12 months near term? Phase 2 scoping study, more metallurgical test work, drilling, more drilling a Korbel, absolutely more drilling RPM. Well, PFS was 18 months. Let's see how we go. We see could come sooner. We will see how it all travels. But I think we've given ourselves 18 months on that. A lot of new slides to come, a lot of new slides to come. And obviously, Snow Lake Resources as we've got a PEA, working on a PEA, and their resource drill out and the resource upgrade there.

That's right. And what Louie said there. So what we're -- it's very frustrating that we couldn't put RPM into the picture this time. But what we're planning to do is the scoping studies there once RPM is ready to plug that in and rerelease another update to the scoping study, if at all possible, before the PFS. But really the big one is the PFS, which we're expecting to the way things are going to have out at the end of 2023. That's our goal. That test work has already started. We've started metallurgical test work at RPM now. We've started the material handling studies, and all of these things are underway to feed into our -- the next level of test work at -- for the Korbel deposits to hone into some of these areas to improve recoveries and these kind of things, also environmental hydrology, groundwater and surface studies are -- we're putting in all those monitoring wells and monitoring stations here in the spring. And all of that's underway to feed into that PFS, which my feeling, it's going to be great. It's going to be a cracker.

Ripper, a ripper. Do you have any arrangements of funding for development? Another great question. Yes, we signed confidentiality agreements with a couple of private equity group funding -- debt funding groups resource focus and generalist funds reason we did this early on is we want to show the good, the bad, the ugly with a project, you can have teething problems on start-up, on ramp-up and they noticed. And it's going to have good set of the funders are comfortable enough and comfortable -- not ever comfortable with funders as we move it into production -- potential production in the future.

What you got for me, Louie?

Management continue buying more additional shares when funds permit, it's up to individual share management family friends. Everyone has been buying, you're even getting the overhead...

My mission is all let me mortgage the house. I want you.

If you are in it for the gold, you're getting the lithium for free. If you are in it for the lithium, you're getting the gold for free. I can give a bit of better value than this.

Right. Currently, you have to look at, I mean, which 1 is it, either side of the coin, you're either getting the lithium for 0? Or are the Estelle Gold project for 0, insanity, insanity. So I mean, to view the project, I'll say, again, to view the scoping study as like a bankable feasibility study and to judge the Estelle Gold project based on a starter scoping study is -- and everybody has to do their own research and draw their own opinion. But we're here to stay and the project is moving forward full scheme ahead. And so I personally think it would be a mistake to judge the project on a starter scoping study. On this starter scoping study. It's a great part of scoping study. It's really possible.

I will add to that, that we will limit it to yesterday to buy. So we're limited to buy to yesterday afternoon as directors. I'm talking for directors. So we're limited with the half yearly accounts. And there's any windows when we can and come by. I wish we could clear our funds and put more in that, we put millions in as you all know, directors and management. The logical studies for RPM. Yes, they have commenced that process is underway, and I think Chris has touched on that or Chris, do you want to add to that?

Yes, it's underway. It's an intrusive related gold system. I expect them to be similar to Korbel, but that will be confirmed with the study -- I expect that metallurgical results -- these labs are pretty slow this year, but it will come out this year, hopefully, mid this year, we'll get an idea. And then by then, I would expect the initial phases of the core of the RPM deposit to be drilled at a density that will allow indicated resources. So all coming together, and then we can plug that into the picture.

There's a question here. You didn't say how much cash? We can't give you direct figures. We've got presenting it to the whole market. What we can say is we've got enough to continue drilling and continue on our trajectory and we'll go have our funding facilities mandates sitting on the table that we can tap into and we got access to capital. We've had diluting shareholders, we've had diluting shareholders. As I said earlier, if we're looking for a capital raise directors would be buying on market almost $0.5 million over the last couple of days. Answer that about the capital raise again.

I think we put that to rest now.

Yes, that's right. Phase 2 scoping study -- what is Phase 2 scoping study? Phase 2 scoping study will be -- once we get all the test work done for RPM and that federal area drilled out, it will be the numbers again. The only -- from that point, holding us -- the only thing that will hold us up is the environmental studies that going to PFS. And then Chris, anything to add on that? That's basically...

We're well advanced with the environmental studies. The environmental studies include wetlands complete. Fish habitat complete, and that's basically not existing fish up here where we are. Hydrology is the big one that we'll really get into this year. And that, like I said, that's groundwater bores and surface monitoring stations. And then you need like 12 to 18 months of data collection for that to get it to a stage where you can submit that the applications for permitting. And then the other one is the geochem-- the rock geochemistry and early tailings design and facilities. And that's underway. We commenced that now as well. In fact, they're going out to site to start to take the samples for the geochem work. And geochemically, in terms of -- with mines, it's always I think, a concern is the acid mine drainage potentially from the sulfide from the pyrite and arsenopyrite and these kind of things. So what's beautiful about this deposit is that our host rock is very neutral. So it's just a granodiorite, a neutral host rock, anything that has any sulfides in it, which is always the case when you have goals associated with gold, is that will all go through the processing plant. And so any type of potentially asset-generating material, there's not much of it will be contained within the TSF. And so we can use our waste rock because it's so neutral for constructing roads and foundations for the plant site and other infrastructure. And so it's a -- it's really shaping it nicely. But that test work and that geochem studies and TSF designs will be happening this year as well. Again, all to be fit into the PFS nerve. And we expect -- we're looking to get the PSF out at end of 2023, if all goes well.

There's one here, does management have confidence that they will be able to raise the CapEx given the uncertainty of the market and whether the project would -- at this stage, yes, there's no reason why it shouldn't. What we -- from PFS, there's different funding options that are available, your conventional -- from conventional loans to gold loans, the hedging facilities, the royalty facilities, there's all sorts of funding options that will become available at this stage. But what the world presents in these times is anyone's guess. We've been around for a long time. We've seen the GST, if anyone remember this year, see the banks do want to then to the banks that allowed the project. Have you considered significantly higher gold production than 200,000. Chris you want to answer that? Have you considered significantly higher gold production than 200,000 ounce per year?

Yes, of course. Yes, of course. So with a slight grade increase, for example, RPM coming to the picture, you can easily, easily. It's 2 grams per tonne. So now we're looking at a mill feed grade after ore sorting of 1 gram per tonne, producing 200,000 ounces. So if you bring an RPM material at 2 grams per tonne, you lift that mill feed up to, of course, RPM then will bypass the ore sorter because it will just be at such a grade as it's just direct mill feed, right? And so then if you increase the grade to 1.5, 2 grams per tonne, you basically -- you double the production, you double the production.

How does -- how do you think progress on Donlin coming into production will affect Nova Minerals? Chris, that's your buddy.

So we've spoken to Donlin. And how will that affect nominal. So one thing is, Donlin, we'll have a huge drain on the resources here in Alaska drill rigs, people geologists and engineers. And so what we've done is now that we've been -- we have very good relationships and contracts with our contractors, and they're committed to Estelle. And so they're not taking any rigs office and some of these operations are struggling to get rigs, but we have them all here on site. And so I would expect the biggest -- so that will be a challenge when they really get up and going. But I think we've secured ourselves in such a position and have a good relationship that our contractors and people are committed to our project. The other -- the major benefit how it will affect us is if that Donlin, once that Donlin gas -- natural gas pipeline goes out that's what they're planning for their power. It will pass about 10 miles to the north of us. We've already spoken to them Dan Graham, the guy there at Donlin, the main guy, he's my neighbor here in Palmer. They would love an offtake agreement. They're very open to that. Of course, they are. And so that's how it would benefit we'll get very, very cheap fuel out that Donlin pipeline. So that would be a major benefit. So we're really pushing for that project to go forward. But we have other power options as well, of course. We're working -- the critical thing there is we're working with Aggreko. Aggreko is a world-leading power solutions company and this is how we actually generated our estimates for power. We used $0.12 per kilowatt hour, which was referencing Aggreko. We have numerous analog projects here in -- throughout the Arctic that are doing $0.09 to $0.12 per kilowatt hour. And so they have a number of solutions in-house proprietary technology to find efficiencies and battery storage and all these kind of things. And so working with Aggreko, we feel very, very comfortable that we'll be able to get the -- get our power requirements.

Another question here for the last quarter. The cash equivalents. I answered that early on. As a consolidated entity, we have the report as such, that will be deconsolidated in the new accounts. We can't say too much more than that. The market will see that. Would consideration be given to selling alike to NVA shareholders as a means or generating cash if required, while giving investors opportunity to retain? I don't really understand the question. But we have strategic interest in Snow Lake. But at these prices, Snow Lake are doing an incredible job. It's just not worth for us to block trade any of it out. We've got a large holding there and more to come on that. I'm not in the operations. I don't know what happens later today, but on a high level, and what you guys see that's announced they're drilling up their project and going -- looking to grow their resource and put out a PEA in short order. That's about it for questions. And -- give it a few more minutes and...

Yes. I'll just say just in the big picture, Nova Minerals, the Estelle Gold project is, we've had a few articles in the local media here. Very positive reception. We're becoming a very important part of the community here. We support the AIDEA, we support a lot of these really big events and local kids sports and these kind of things. And so this -- in terms of sustainability and kind of the bigger picture in this world today, we're not here -- as I said, we're not here just to go in and rip the flesh out and Raven Village of these deposits. We're here to develop the district to benefit ourselves and our shareholders and the company and including the local community here and become a major part of the economy. And that's the message and the -- how we built the confidence here in Alaska with the state government, the local government, the Matanuska local borough here, very excited about the project coming online. And that's how we built the relationships to be able to do what we do. And so people need to consider that as well that we're developing a district. We're developing a trend. It's -- we're going to have decades of mine life out here at the end of the day. This is just a small portion. The scoping study represents a small portion constrained by our indicated resources at the moment. Of -- and it gives you a small part of the picture and the picture for what we wanted to get out of the scoping study, again, positive, very positive. We can mine, we can make a profit and get very good numbers out of mining 0.4 gram material, and it's only upside from here. It's only upside from here. It has more -- we just continue our work systematically, continue our work because we're on the long game here. It's a long game to get these projects going to do all the resource drill outs to get the environmental permitting going and we expect to ultimately achieve our objectives. Listen a few ups and a few bumps in the road on the way, of course, but there's no doubt that we're here to stay and we're here to produce gold.

There's a question here. Yes, we're looking to improve. We've engaged a PR firm. We've updated our website. Another one improved in the near term, we're -- obviously, the mandate only started less than a month ago. So you can see a lot of improvements from the website and that are on improved. That's the thing on. There's a few questions here. I can't answer for asking for individual shareholders or we can't answer. Sorry, Chris. We'll, hold up if any more questions come up.

Exciting year ahead. So as I said, 20,000 meters planned at RPM, 20,000 meters at Korbel. We currently have 5 rigs on site, 5 rigs. Last year, we were drilling pretty much with 3 rigs through the year. This year, we have 5 rigs on site. So we've secured those rigs. Our RPM coming into the picture here, more and more -- clearly, more and more into focus as the year progresses. We've got the -- now we have the flow sheet in place, we've got the resources that we just need to prove up here and continue to add to our production profile. We have the social license. And so couldn't be more confident than ever that we're on the right track, and it's all upside from here.

Okay. Why increase predict the CapEx would be $250 million was? $450 million is including Yellow Gear and expanding the resource, including RPM with RPM hit.

I think it was a pretty close prediction, right? So again, when I make a prediction and do any interview, I'm trying to bring out to our shareholders and people our ideas, what we're thinking and be open and transparent with these things, right? And so that's what the scoping studies are for to actually pin it down. And so I try to present in interviews what we're thinking, what our ideas are and we'll continue to do that. And so I think it's a very close prediction. Actually, if you look at the plant itself, it's about if you break it down, the plant infrastructure itself is about $250 million then you add plus ore sorters about, say, $300 million Yellow Gear. We did include inflation in a lot of these costs, right? All these inflations and contingencies are in these costs. So the Yellow Gear alone which is the Yellow Gear for the life of the project comes close to $100 million. And these are early-stage predictions. We'll continue to do so. And this is the reason why we come out with these studies along the way to actually compile it all and report what -- report the actual numbers at that point in time.

Yes. We can -- there's a question -- it's come up about the cash. We can only report our cash in our quarterlies and half yearly accounts to the wider market. We can't individually report. There's a few questions here. Capital raise in 2020 was not out of funding options? Capital raise, we wouldn't be contemplating a capital raise. Like I said, directors wouldn't be -- wouldn't have planned 500 -- $0.5 million in -- over the last couple of days if there's a capital raise contemplated. Again, I don't know where this rumor has come from. We have cash is -- I see someone say 5 rigs, but those 5 rigs will be -- it won't be 5 rigs starting up at once. So it will be different times and we've got cash flow projections on that, Phase 2 to come out.

I was making a note on resources.

Look this in -- this is a cracker, a ripper. Chris, guys think big, make this 1 million-ounce per year company, huge resource, make it work hard.

That's the spirit.

Look, I don't want to mention your name, but I'm with you. Once we get a inferred into indicated, if we were reporting on the NI 43-101 as a TSX company, we could have gone a lot bigger, a lot big on the production profile. But unfortunately, we're limited with the indicated resource.

Right. And just a note on our resource. So we're at 9.6 million ounces with what we have planned this year. We're going to crack the 10 million. I can confidently say that. We're going to crack the 10 million and upwards of 10 million considerably, I would think. But importantly, a significant component of that will -- we've got 3 million in indicated resources. And so if we can crack -- if we can double that, that would be a fantastic outcome for this year, and a big part of that will be the very high-grade resources coming from RPM. That's really what we're focused on to get that average total global resource grade with the RPM sources coming online. So easily 10 million-ounce plus company by the end of the year.

Whichever quote that...

I think there's...

Sorry, Chris?

I'm being conservative there. I mean...

Yes, yes, yes, which are prospects will NVA target this year?

Okay. So our main focus right now because remember, we're on the fast track to production. We're on the path of production here is obviously, Korbel it would be about 50-50 with the drilling, Korbel and RPM. Now we'll continue -- this year, I just don't see us getting out to train Shoeshine although it's just a low-hanging fruit there. We're trying to get to PFS by the end of next year and get into production here as soon as possible. So I would expect us to -- what we'll do this year is we'll continue our recon exploration. This is how we discovered Train and Stoney and that these things I expect us to -- with the recon exploration this year, what I want us to do is you saw a recent in January, I believe it was a news release that showed the geophysics at RPM. There's another -- there's some outer-lying anomalies there at RPM that aren't within the current drilling area that are looking really hot. And so I want our recon geologists to go around that RPM area of influence and really have a good look and kick rocks around there to see if we can't get some near some close to RPM North type of more resources and more drill targets there. As well with RPM, remember, the RPM current resource is on RPM North, right? RPM North, that's for the 1.5 million ounces at 2 grams per tonne is. RPM South, which just sits a few hundred meters away, is currently the rock chip samples there showed a surface footprint much larger than RPM North. So at RPM South, we'll get the first drill holes into RPM South this year as well. We have that plan. And so just if it's anything, if RPM North is anything to go buy an RPM South is similar, it could be a serious addition of high-grade ounces to the RPM resource there as well. So we have a continuous open -- wide open RPM North as well as the RPM South and additional potential that the recon exploration teams will be looking at this summer. And also, I think the recon exploration teams will also go to Korbel. There's some real around that Korbel Valley some areas there that we need to have a look at. Remember, the geological or deposition model is a bit different between RPM and Korbel. Korbel is all in intrusive. Intrusive is the host rock only. At RPM, we see the deposit there is sitting on the intrusive horn falls, it's altered sentiment is sitting on that contact. Obviously, that contact is some kind of conduit or it's an ideal site of ore deposition of high-grade mineralization, and we have that same kind of model, and we have a number of targets at Korbel that we want to drill into that intrusive contact at Korbel and potentially intersect similar RPM style mineralization at Korbel. So I think we'll really start focusing this year on Korbel and RPM area of influence to start to bring more and more resources in anticipation for the PFS. But -- and then in 2023, we'll start to go out to Train, Shoeshine and really start to get serious about that area. And I expect 2023 and beyond, further discoveries throughout the Estelle Gold Trend. Remember, we have -- it's a 35-kilometer trend, right? 35 kilometers long, from Korbel, just north of Korbel to south of RPM. And within that, we have so many other numerous gold prospects and gold showings, we need to systematically go through those and start advancing, continue to advance those projects. And it's not -- it's pretty virgin territory out here. So we're looking for mineralization on the surface. We don't require any deep searching exploration techniques yet. It's just old school, boots on the ground, kicking rocks, finding things that are right on the surface and for the next -- I expect that to feed our Korbel processing plant for the next couple of decades. And then who knows what's deeper than that, but that's the way off in the future, and we'll consider that when the time comes. But the plan for recon exploration right now is around RPM and Korbel for this year.

Another question here from disclose additional information and transparency. Absolutely, absolutely. But we have to do it in a manner where we disclose to the whole market. We can't disclose on this forum or personal. Just under continuous discussion obligations we have to disclose to the water market. We can't disclose in any of the forum. Slurry pipeline to go past other prospects, EG, Stoney and Shoeshine. Absolutely. That's the plan. Chris, the slurry pipeline to run all through the project.

Yes. So certainly, where we're planning the slurry pipeline to start of it, it will sit right between just north of RPM there in the value, which is kind of almost equidistant between RPM and Train, Shoeshine. So Train, Shoeshine will be able to use that infrastructure to get over to Korbel. I just make a note, you said Stoney there. I'll make a note on Stoney. So Stoney -- if you recall, Stoney, the main Stoney vein there is we can fall out over 4 kilometers in strike 300 meters in vertical extend up to 10 to 12 meters of thickness on the main Stoney vein and then also in parallel on that on either side, they didn't get a lot of time to follow them up, but they did see -- we did see more veins sticking up on either side of the main Stoney vein that -- and remember, this is a bit of a different beast. It's not only gold, high-grade gold, 48 grams per tonne, we got in some of these samples, but thousands of grams per tonne silver up to 2.4% copper in this Stoney. So it's a polymetallic stacked vein system in there. And so that's a bit of a different beast. And so it's not -- at this stage, in the game. We're after the gold, right? So we're after the gold. And so that creates certain complications when you have silver and copper as a co-product. But what it does with the plant that we've set up there at Korbel, remember, we have a flotation plant there because something like Stoney when you eventually develop it, and that will require you to produce a concentrate rather than doré gold bars. And so we have the flotation plant there at Korbel, which can also be utilized to generate a concentrate sometime in the future when we decide to get in -- when it's time to get into deposit style like Stoney. So right now, we're just focused on the gold, but that's out there. And actually, we're getting a lot of interest from different type of investor and people interested in these kind of polymetallic vein systems and polymetallic systems because it's not just gold, all commodities on the up and up and silver and copper are certainly in that not just money but also in that industrial uses.

There's a question here on the gold price. External advisers. We've had external advisers and bankers range anywhere from 2,000 up to 5,000 give us. And you can see that gold is cheap now with what's happening in Russia and Ukraine. Hidden in all the news with Russia and Ukraine. If you saw the U.S. is still at 7% inflation rate. And that's -- and the U.S. in the inflation gauge, they've taken out housing and the oil price. So we -- you can double that and probably -- and you're still being conservative on the inflation. So we're bias. We see gold a lot higher. There's no question from what the external advisers thought.

If you look at -- last night, I was looking at, what's the average gold price realized for most of the major mining companies in the world. The last 2 years, it's closer to 1,800. So for 2 years now, the average gold price that actual miners have been realizing from their actual gold sales has been 797, I think, is the average, somewhere between 790 and 1,800. And so to the upside, of course, we can take advantage of that. So if gold price does go to the downside, I don't believe it will do to the reasons you just -- you just mentioned. But if the gold price does go down, remember, that's the power of ore sorting, right? With ore sorting, you can dial it in to increase -- if you need to increase the grade, you dial it in and you get a higher grade mill feed, it's such a powerful thing. People really need to research what we're doing here with the ore sorting and all the big companies that we talk to are using ore sorting more and more across all their projects. And so it's a really, really powerful part of our flow sheet and so you can't -- when you compare what we're doing here, some people will never get it. But I get that. But when you compare with what we're doing here to the typical project of just being dictated what you're mining, and that goes straight to the mill a whole of ore processing, that's different than what we're doing here. We have that great control step where we can tweak it and dial it up and down according to market conditions. And so I think it's I think in terms of growth, we're really resilient to any fluctuations in the gold price. And most importantly, I think with what our I don't really predict gold prices I'm out of that game, who knows the market, but I think it's going up. Most people in the gold space today would probably be thinking that, and we're certainly poised to be able to take advantage and get maximum benefit out of gold price moves here especially if we can take advantage of 0.4 gram material, right? We can make money up 0.4 gram material at a $2,000 gold price -- that's huge. That just adds big, big numbers to our economics.

The question at what point would you see offtake agreements. I'm assuming hedging if we would hedge it. That all depends on the funding arrangements. We'll see if hedging what -- and that's the wall off yet. Pretty much I think we answered. I'll give you a few more minutes and see if anyone else has any more questions. Look it will be drilled this year? Our main priority is that Korbel and RPM. Chris, I'll let you go on this, we'll -- we certainly want to get to configure, we want to increase that, we do it one on the development phase now.

I don't want to again continue, we discussed that those gaps in the -- or those troughs in the house production profile. Cathedral is just daylight and take that right off the surface. So they're easy ounces. We're just finalizing the drill programs for Korbel now. And I'm leaning towards yes, I'm leaning towards yes. And so I think we need to do that this year for sure. I'm leaning towards, yes, we got to get that into the equation.

So many more just comments and thank you guys for the support. All those comments are supporting. Thanks for the support. We're doing all we can 24/7 operation.

Putting our blood, sweat and tears into this. I assure you.

And on the initial CapEx. Is your funding, is it potential enough for plant like Korbel sooner and then finish the plant, as more targets were more. It is just initial CapEx and the need for funding, is there potential to get enough of the plant built to start Korbel sooner. It's always -- I won't mention the name. There's always ways of optimizing the production profile. We can go smaller, smaller, high grade. That's the beauty of the interest-related gold systems. You can squeeze them and turn them twist them. Maybe you can...

You'll be reoptimizing constantly.

Yes. We can go much larger. It's the beauty of the interest there. Homogenous just -- it's a great thing. And -- so the answer to that is yes, we can get more initially. But we want to go bigger to tell you to be honest. Another question on Snow Lake Holding. We have a substantial amount of holding there and the strategic part is that we want to take a position of us, but they are doing a lot of work over there. And so like we view is very undervalued relative to fees and -- but yes, we will take money off the table, but to a strategic party.

Just on that smaller -- again, with the -- actually to go smaller. We -- you could get massive IRRs and all of these indicators, if you just go in there and you get -- you rip the guts out of the deposit and out of any deposit. But then that comes at a detriment of not having a long life, a permanent long-life cash flow. And so we're trying to get maximum value out of the deposit, both for our shareholders and for all the parties involved. And so to really build a major -- mid-tier to major gold company over the decades to come with this type of a gold trend, again, we're not just a one-hit wonder, we're not just like Korbel starter pit. We have all of these things we've talked about today, all of these resources and potential upside on those resources and additional prospects that, of course, you have to look at this in the broader context and the scale just tells you that you have to think bigger, think bigger. Nova is a long-term project to build ourselves into a major gold producer. We're -- it's not -- like I said, we put our blood, sweat and tears in this. We're not here to be a lifestyle company. We're an aspiring gold producer. We're an aspiring gold producer, and that's where we're going.

Just to clarify to make sure that sort of we went higher CapEx to be longer-term larger mining operations. This is just to say that the higher CapEx to enable longer-term larger operating facility designed to absorb or from other prospects in addition to Korbel? Absolutely.

Yes. Absolutely. That's it. That's the plan for the project. You're looking at it. And as I said, for minimal additional just for haulage and minimal increase in capital for -- there won't be a whole plant at RPM it's not going to be a whole another plant processing site. And it will all get -- there'll be some basic infrastructure there to get it into a slurry pipe to get it into the Korbel processing facility. Again, this comes back to the small mine. So what if you were to build a small little rip the guts out -- start up operation at Korbel, then what? Then you have to go to RPM, build a whole another new plant site and then another one at the other prospects that you find, that's not how we envision this thing and that doesn't make economic sense. And so yes, so absolutely, this is the plant. This is the infrastructure. These are -- this is the capital required to develop and produce from the Estelle Gold Trend for decades to come. That needs to be understood. That needs to be crystal clear.

Yes. This is a great comment and question. Just another comment. Between Nova and PFS, just improve the NPV CapEx ratio? Absolutely, absolutely. The reason we couldn't do that, we couldn't include the inferred. If we could include the inferred pretty short years ago, I was speaking to a mid-teen mining company. They said, "Why didn't you include the inferred, then we show them the listing rules, the ASX listing rules that we have to have a certain percentage of indicated resource. And that would have increased the NPV considerably. Once RPM comes in, again, it will increase it as well. It's great comment and question. Again, I think Chris has answered that. This question is about giving guidance. As Chris mentioned, alluded all through the -- for the webinar that -- you gave guidance at the time. And the guidance was on the plan. This included contingencies and inflation to the capital cost. And -- it's been the planned capacity with the RPM hit. We thought we are now at RPM. So our CPs in Canada use a 5%, I'm assuming this discount rate. The reason we use 5% is we have $70 million in losses, in capital losses, in losses over the ease. Alaska. In Alaska, we have expenditure that gives us credit where we are free from royalties for ease. So it made the most sense to use the 5% discount rate for the initial period. Once we pay back, that's the same cost done, it's the some cost is in, you're pretty much covered from that point. We can do what we want. And Fort Knox is a casing point. They've got some cost in the CapEx paid for and the mining suffered 0.1 -- 0.1 grams the high grade stuff is 0.3. Again, I can't -- there's a question here for individual shareholders. I can't comment. For Phase 2 scoping study as soon as possible with RPM, as soon as possible. We're on to it now, as soon as possible, we'll update that scoping study. And we'll have news flowing through -- until we get to the updated scoping study with RPM. Are you concerned about potential takeover? Absolutely. You're getting something for free. You're getting the gold for free or you're getting Snow Lake for free, absolutely. But I'm sure we have enough -- just the support that people are writing on this Q&A and the shareholding of directors and management and friends and family I'm sure we have enough to fight off a takeover bid if it was eventuate. Absolutely, it's been discussed, and it's a concern. Particularly getting -- you're getting something for free. Any more questions, I'll give it another few minutes, then we'll wrap it up. That's it. No other questions. Thank you, guys. Thanks for the support. A lot of supportive comments on there. A lot of great questions. Ian and Chris, I'll let you close it off with closing comments, and we'll wrap it up. Thanks for joining, and thanks for your support.

Sure. Yes. So I hope we clarified and any questions or concerns that shareholders might have with the scoping study. And thanks for those questions. This gives us an idea of the type of things that we need to address as well. We always value our input from our shareholders. And I'll just kind of leave you today with the old adage, right, an old adage that they say mines are made, they're not found. And so you just don't happen upon a mine somewhere to build the mine, mines are made, right? And so that's what we're doing here. It's a step-by-step process. I think we've reached a major milestone with this scoping study, which we view as very positive for the reasons we outlined today. And I hope with these insights that we've explored today that people will see it for what it is, which is a big, big milestone, a stepping stone to much larger things to come, and we hope to deliver on those in short order. So an exciting year ahead with RPM and more drilling to go. So no matter any bumps in the road, as I said, we're putting in our blood, sweat and tears in this project, and we're going to get it over the line and we're going to deliver for our shareholders. Thank you very much, and I hope to see you out on the airwaves as we do interviews and more -- as we move forward this year and beyond.

Thank you guys. Ian, do you want to close it up?

Thank you.