U.S. Gold Corp. (USAU) Earnings Call Transcript & Summary

Hi, everyone, and thanks for joining. We're just waiting for a few more stragglers to join on. Then I will introduce George in today's proceedings. Okay. I think that's good enough, a little bit of a lead in here. Okay. Look, by way of introduction, I'm Luke Norman, I'm the Chairman and a co-founder of U.S. Gold Corp. Thank you, everyone, for taking the time to join us here today to give an update and more information around the pre-feasibility study that we released earlier today. The 2025 report, which is a follow-on to our 2021. Firstly, I'd like to thank George, his team, the executive team from the Board for their diligence, their effort and work into CK so far to date. What they've managed to achieve has been quite remarkable. I think everyone with an understanding of just how difficult it is to permit to operate in North America these days as a mining company in a very short period of time from August of 2020, when George joined the team and -- joined the company and built his team, where he has -- they have initiated and executed a reserve calculation into a 2021 pre-feasibility study which was then advanced into completing and executing an industrial citings permit alongside of and completed fully permitted mining ready, bucket ready in November of 2024. I think a lot of that also in thanks to the fact that we are operating and working within the state of Wyoming. And that also reflects the diligence and efforts of the Department of Environmental Qualities of Wyoming, mining-friendly state to say the least. Today, George team will take you through this updated pre-feasibility study. A couple of points I'd like to highlight to everybody who's listening in today is keep in mind, this pre-feasibility study and the economics therein, they're merely a snapshot of this mineral system at CK. We initiated, again, our pre-feasibility study, our reserve report in 2020 of drilling that we felt was relative to the amount of interest that we could generate to sustain a 10-year mining life. This deposit is open to depth and laterally. In fact, 80% of the drills that we used in this reserve report continued in mineralization or bottomed out in mineralization. So a lot of upside within the deposit. Some other upside that will be touched on, but I just want to reiterate because people have heard us talk about it in the past. There is 0 influence on this pre-feasibility report from any kind of waste rock or aggregate sale whatsoever. However, that does reflect another potential very big upside to the project and the economics in the future. And lastly, the level of engineering that has gone into this pre-feasibility, I think, has put us into a fast track to be able to get to a full bankable feasibility when we choose to do so later this year. Right now, we are exploring other optimizations beyond what you see in the pre-feasibility and bringing in and bringing forward some additional economic benefit to CK. So enough out of me. I will hand over the microphone to George B. And again, thank you all for taking the time.

Well, thank you very much, Luke. Let me first introduce you to Eric Alexander, who is our CFO, joining us there; and also Kevin Francis, Vice President of Exploration and Technical Services. So thank you for that intro, Luke. We are going to go through a short presentation. This presentation, along with the updated TRS is available -- the TRS is available on our website. We've updated our corporate presentation. And this presentation will be up shortly. So without further ado, I will be making forward-looking statements. So here are some cautionary notes that you can look at your leisure. And essentially, what I would like to cover today on the agenda is just looking mostly at the top line economic key performance indicators. We'll give you a little bit of project description. The project really hasn't changed at all. A little bit of a deep dive into the opportunities, just to reiterate our permitted status. We'll give you an insight as to what we see as the schedule for development and some thoughts on financing as well as environmental, social and governance. So here we go. We are now looking with increased gold, copper, silver prices at a reserve, a P1, P2 reserve on a gold equivalent basis of 1.672 million contained ounces. That's up 16% from where we were in December of 2021. And you can see the top line economic performance. We've kept this in a 10-year mine life. Just to reiterate, we haven't spent a lot of money and a lot of treasury expanding the resource. We know the resource is going to get bigger. We'll show you a slide on that later. We've kept that into a 20,000 tonne per day process rate. And the mine plan now is set to produce about 110,000 gold equivalent ounces per year. AISC at $937 initial capital up a little ways from December '21 at $277 million. But importantly, as you look at the NPV of the project, we're looking at a pretax NPV of $459 million. That's up from $323 million. That's a % increase in our pretax NPV. On a post-tax basis, $356, and that's a 39% improvement on where we were. The payback period has also improved. I think it's important to note that we have set our base case at $2,100 gold, $4.10 copper. And as you look at those prices today, I was just looking, we're -- I think we're $2,927 gold and $4.58 copper. So you can cast your gaze up to a $3,000 and $4.50 copper case and look at the NPV, just shy of $1 billion, internal rate of return, 60%. So we're already there, but we've been conservative in the numbers that we have presented here. So let's just talk a few -- about a few of the assumptions, and I won't go into the great detail of these. But when you look at the gold at $2,100, that represents 62% of the revenue. Copper at $4.10 represents about 36% of the revenue. So it really is a copper-gold project and copper being a strategic mineral, we're very excited to be a producer in the good old U.S. of here. You can see mining cost per tonne, process cost per tonne. What makes this thing work and what holds down the costs. You can see a strip ratio, 0.9:1 waste to ore ratio, and we've got very short hauls. This is a very compact site. We're also operating in the state of Wyoming. We've got a great power cost indicated from our local power provider at $0.079 per kilowatt hour. We -- our power provider is a power producer within the state. And we're just down the road from a refinery, diesel cost at $2.66. Also, we're going to benefit from low labor costs being so close to Cheyenne. It's going to be a great place for our workforce to live and work. So capital cost, total initial capital cost, it -- $277 million, that includes a little bit of -- when you look at the list to the left, it includes a little bit of holdback from the initial preproduction phase, but $277 million sustaining capital at $13 million to essentially increase in phases, the tailings management facility. So the project really hasn't changed that much from where we put out our initial PFS. But we're going to go and just chat about the resources and reserves, what's happened there, the mine plan, the process, which is really very simple, all plain vanilla technology here employed in this project. Reserves and resources. So I'm just going to explain a little bit about this image. The image with the topography, that is the resource pit shell, and that is floated on $1,860 per ounce gold, $392 copper and silver plays a fairly minor role. Overall, about a 45-degree slope. We've got very good rock. The reserve pit, and that's projected up above the topography in actual fact, the project outcrops on surface. And the gold on the reserve pit is set at $1,755, $3.77 per pound copper. And you can see the ore body extends at depth. We haven't spent treasury on extending the drilling and the drilling campaign below the pit and to the southeast of the pit. What we wanted to do, and we've said this many times, is put the value proposition together, get the permit so we know that we can mine it. And in due course, we can then expand this resource beyond where we are now. We are part of the Silver Crown mining district. It's a historic district. from back in the late 1800s. And there are additional opportunities and certainly within extensions to our ore body. So the mine plan, the mine plan is, again, very simple. We are going to be mining 30-foot benches. We'll be employing 100, 150-tonne class trucks, 20-yard loaders. We will be producing enough material to feed the mill at 20,000 tonnes per day. We've done all the geotechnical work on the pit shell. We have Piteau Associates do that to feasibility study level, including extensive drilling into the pit walls. We will be mining it in 4 pushbacks. 4 phases and the initial phases have a very, very low strip ratio, and that leads to a very quick payback on the project because some of our best rock is right there at surface. So here's the mine layout. You can see the pit in the background. There's a mine ready line, very short haul from the pit to the primary crusher. We then crush the rock onto a primary rock stockpile. We go into the grinding section. We're essentially grinding down initially to 90 microns. There's a pebble mill within the circuit. We would then go into rougher flotation in the filtration section. We'll have a regrind down to 30 microns to produce a concentrate with froth flotation. The water is a big issue in the Southwest, and we are very conscious of our water consumption. So we went straight to a dry stack tailings scenario. So we filter the tailings. We filter the concentrate. The concentrate gets shipped off site and the tailings get mechanically handled onto a tailings facility. So it's with a 4-mile access road from essentially public roads. We have access and warehousing. But we don't have to carry a lot of inventory because of our location. We can rely on a lot of the OEMs in the area, whether it be Gillette, Salt Lake City, Denver, we're well positioned to draw stores and equipment from there. So just looking at upside opportunities, Luke did mention the fact that we have not included any value to the rock. And what we're going to be doing is essentially mining our ore, processing the ore, producing the concentrate. We then take a little bit of our rock and we take it to buttress the dry stack tailings and then cover the tailings before we revegetate. And we're left with about 40 million tonnes of rock from our current mine plan sitting in 2 piles. That rock has been sort of presorted. We've tested that rock. We're going to use it for our own construction purposes. And when we did that work on looking at that rock for construction, we found that it was really good aggregate. We also found that it's really good rail ballast, which is a higher specification. So -- we've got 40 million tonnes of rock there. And we looked at our neighbors, Martin Marietta Minerals, about 3 miles to our south that's selling their rock for $20, $25 a tonne. Really, we've paid for the mining already. So there's a great source of rock there for sale to the local market. And as a reminder, we're situated 100 miles from Denver. You've got Boulder, Colorado, Loland, Fort Collins, Cheyenne, a lot of growth in that area. So that rock is going to be worth quite a lot of money. We haven't included it in our economics at all. But just say you've got a $10 margin. There's another 400 million tonnes of potential revenue just in our current mine plan. Our mine plan is going to get bigger as we go for the additional resources. And then the rock continues on beyond. So there's a huge opportunity aggregate. Obviously, we haven't permitted that. So we see an avenue to permitting it, but it's a great opportunity beyond the copper and gold mine. So the reserves and resources will grow. We're currently working on a metallurgical potential upgrade. That's using the Jameson cells from Glencore Technologies. We're still looking into that with the potential of improved recovery. And the Jameson cells occupy a smaller footprint, and we're told that they have lower operating costs. So they may very well be an enhancement there. And as a reminder, we're just using flotation to produce a copper concentrate. We haven't included anything which looks to reclaiming any residual gold in tailings. And there's a potential to improve gold recovery by treating the tailings. But that's something we can look at in the future. Reclamation and closure, if we do sell our waste and we can reduce that -- those waste stockpiles, we could reduce the footprint. And we also want to see whether we can work with the city of Cheyenne to use the mined out pit for water storage, which would also help with our closure. So at the moment, our design construction period is 30 months. We think we can tighten that up, which would further improve the internal rate of return. So permits, yes, as Luke mentioned, in May of 2023, we were approved on our industrial siting permit. That's a mechanism in Wyoming to the state to put money into a big capital expenditure to mitigate the impacts of the influx of people or the need for additional infrastructure. Our miner operating permit approved -- fully approved by November. It was approved earlier in the year, but we had to get our air quality permit, which was approved in November of '24. So we're ready to go. Essentially, we'll have to deal with the county. We just need to send them a site plan and then normal course building and fire inspections with the county. As a reminder, we don't have any federal engagement with being on private land. We're in the Wyoming jurisdiction. U.S. Army Corps of Engineers, certainly for our current footprint, stated that we have no permit necessary, and we have clearance from the U.S. Fish and Wildlife Service. So when can all this happen? Look, the PFS, we're just checking out the Jameson technology, looking at that project execution schedule. The feasibility study is well advanced, and that's because we hired Samuel Engineering back in April of 2022 to actually fast track towards feasibility. So we've done a lot of the work towards the feasibility study. There's no additional drilling required, except for the resource beyond our current 10-year reserve. And we essentially are just doing the engineering work. So what is the fastest that we could do things. And this would all be subject to Board approval and financing. But we could look to finishing our feasibility study toward the end of Q2, maybe into Q3, financing. I think we can start that in parallel with the possibility of breaking ground toward the end of the year. On a fast-track basis, that would give us gold in the end of 2027. A lot of things to do in the meantime. So that's the fastest it could potentially occur. So how are we going to pay for all this? Well, we would hope that we have a pathway to project financing through 80% debt and perhaps 20% on equity. But we've been very careful with our capital structure. Management insiders, we're owners. We don't want to blow up the cap table. So we will look for equity financing on attractive terms while we pursue potential financing avenues, and it includes all of the possibilities from equipment, certainly equipment financing, maybe forward sale of our initial production royalty options, offtake agreements and so on. So we feel that there's definitely a lot of interest in the project. And certainly, as we produce a very clean copper concentrate, we think that, that's going to be in demand, and that certainly offers an avenue. Now have we been doing things the right way? Well, our Board insisted back in 2021 that we look at our environmental, social and governance. We had an audit at that point. And since then, we've actually followed that up with an independent audit through Digbee. We had a maiden Digbee rating, BBB, that's pretty good. We certainly have identified where we will be improving, but we're a formative development company. So it's a pretty good rating right out the gate. So with that, we're also -- it also complements the work that we're doing on Equator principles to ease the financing aspects. So with that, we're going to have this presentation on the website, but I think we can now hand over to the audience and perhaps answer some questions to follow up on any queries.

Yes. Just to clarify that, George. By way of audience, we've just to keep everything in order today listeners, we're just opening the table up to the analysts who are on the call. But I think the analyst questions will probably encompass everything that you as shareholders might have way of questions. And of course, most of you know how to get in touch with us. All our information is on the website. If you do have questions outside of what you could be covered today, you can reach out to any one of us by way of our contact within the website. I see Andrew up and speaker ready to go. So we'll get you far off.

George and Luke, thank you for a very comprehensive presentation. Just a couple of questions. To be clear, the feasibility that's coming. Is that just essentially the basic engineering or a portion of the detailed engineering going ahead? Is that the difference?

No. We -- as I mentioned, we -- the Samuel Engineering have been -- have done this update for us, but we contracted them a long time ago, my background at Barrick, we could fast track projects. And I'm just sort of the bank role at the moment to be able to go and build this thing. But they have done a lot of work on -- certainly on the plant design and so on. So in terms of moving to the feasibility study, it's essentially desktop work. We've done all the site due to technical. We've got 140 test pits across the property. So we know what the substrate looks like. We've done seismic lines. We've done split in. We've done the feasibility work on the pit. So it's really just seeing the information that we've gathered over the last 4 years, and it's largely desktop. So that's why we can produce the feasibility study in fairly short order. Does that answer your question, Andrew?

It does. And then maybe just on a different question to come back to this -- to the CapEx, that roughly, call it, 20% increase. Is there anything specific in there that carried more of the inflation? Or is it just kind of the broad-based inflation any of us is suffering when we go to a restaurant or purchase things?

Yes. Look, I think it's generally the inflation. We were looking post COVID at the problems with supply chain, with scarcity because factories have closed down. I think things have normalized now, but we essentially are just seeing the effects of inflation there. There are a couple of aspects that we did have to include as a consequence of our permitting exercise. We felt initially that a membrane, that a soil liner was adequate because we don't see any acid rock drainage from the project. But to satisfy the authorities, we've put a composite liner with a membrane down just to be absolutely double shore Belt and suspenders that we don't have any potential for acid drainage. So there are a few enhancements associated with the things that we had to do for the permitting. So yes, we -- that accounts for most of the increase..

Okay. Just last question before I hand back the microphone. This concept of the aggregate or waste rock or ballast, you guys highlighted that this would require an amendment to the permitting. I'm not sure if that's the accurate wording or is it completely different permit for something completely different, but what is the process and time line of something like that?

Okay. So the -- we essentially have -- during the course of the project life, we will be accumulating just on the current mine plan, 40 million tonnes of rock. That rock is going to be excellent source of aggregate and rail ballast. We can -- we -- in speaking with the Department of Environmental Quality Land division, we would have to essentially go and talk to them about any impact on the air quality. And because most of the processing equipment would be electrical driven, there wouldn't be a great impact. So we would need to work with our local community and so on, but we think that there's a very plausible pathway to a permit to be able to market that certainly by truck in the short term. And then in the longer term, perhaps through rail transportation. And as the project grows and the opportunity increases, then there would be additional amendments to the current permit. But it essentially would be an amendment to our existing permit at the moment.

Yes. So look, we'll move on here, and thank you very much again, Andrew. Don Blyth, I see you there now. We'll hand the microphone over to you.

Congratulations, George Luke, the whole team there, great PFS update, pretty similar to the 2021 PFS in terms of the scale of project and very much in line with what you've been telegraphing, making the analyst job easier. A few questions. First, I was impressed the -- normally, you see the gold price assumption move up. Your reserves increase, and that's usually because you're bringing in marginal material. In this case, your grade seems to have stayed the same or even got a little bit better. How did you manage to pull that off?

Okay. So look, we are drill limited. If we have more density of drilling, we could have pulled in additional reserves and resources. But the increase in the metal prices, gold and copper allowed us to pull in a few of the surrounding resources into the proven and probable reserves. Now we -- as I've said, we know that our mineralization continues at depth. We've got a nice trend down to the Southeast. We need to get after that. But Don, it's been hard raising capital. We haven't raised capital without due consideration to dilution. And as a consequence, we focused the treasury on proving up what we have into an economic assessment and then permitting that. So I think that the -- at the moment, the increase is merely producing or pulling in some of the resources, which are now above cut-off grade.

Got it. You also mentioned that your initial assessment of the Jameson cells was sort of inconclusive. So you went at just used the conventional flotation circuit for this PFS, but, actually, it's obviously not a no. So you will be looking at it for the feasibility study. But given the timetable of the -- getting that, if you're getting the feasibility out in midyear. When would you have to kind of make that decision of a go or no go on the Jameson.

All right. So what happened was we were approached by Glencore Technologies. We saw them down at the mine expo in Las Vegas. We had a little bit of a hiccup getting a test unit up to the lab that we were using base metal labs up in Kamloops, British Columbia. We managed to get that test unit up and running. We had a certain amount of sample which was sitting there or which we sent to, which was over from our previous metallurgical testing. We were able to get that up. We were able to essentially mirror and confirm with Jameson the conventional results, but we think that there's opportunity to improve recovery. And so Kevin Francis is going to go and collect another sample so that we can get that up to the Glencore Technologies lab up in Sudbury, a larger sample so that they can really essentially find the secret source that is associated with their technology. And we feel confident based on this technology having been around since 1986, so that there's potential there. So we need to get a larger sample up there, get that sampling and test work done, and we think that we can probably do that in the next couple of months. So stay tuned for that.

Certainly. And in intriguing possibility. And I guess on the aggregate, everybody's favorite there's rock that does not contain the level. How are you going to give a sense of the commercialization potential of that? Obviously, you've talked about this 40 million tonnes at, call it, 10 bucks, rough value. But how will you play the -- I know there's all sorts of rules about what you can say in a feasibility study. So will you be able to give some sort of sense of the time frame you're looking at and how much you think you could sell over what periods? Or are you really allowed to do that?

Look, we've conducted a study. There's a consultant or Bergfex out of Salt Lake City. We've conducted a study with Bergfex. They have done a market study. There's a certainly within our area and within probably trucking distance, there's a 6 million tonne per year demand for aggregate. Things are just growing in leaps and bounds along the Colorado front range between Denver and Cheyenne. So that demand isn't going away. There are infrastructure projects. There's potential improvements or renovation to the missile defense situation. There's wind farms going up. There's a huge demand, which is difficult to serve at the moment. So as a consequence, we didn't want to confuse the issue. We've got a very good copper and gold project. And as we conduct these additional studies, talk to the authorities about how we can benefit them, the state of Wyoming would get $0.60 per tonne for every tonne that we sold on a royalty coming off the state ground. So we will be looking at that in the future. And hopefully, we have been in conversations with some mining contractors, construction contractors. They have expressed interest in the rock that we're going to produce. And maybe we can trade mining for rock. Maybe we can forward sell some of our rock because it's very, very tough in our area and certainly in Colorado to permit a quarry. So it would be putting this rock rather than bearing it, putting it to beneficial use just makes sense for the state, for ourselves and ourselves and our shareholders and reduces the footprint of a project. So it's something that we pursue vigorously. Don.

Do you think there is the possibility that, that the aggregate may play a sense in part of the financing solution?

That we've had initial discussions with a number of companies and whether nothing's done until it's done. But certainly, there's a great level of interest in this rock resource. Again, it's so difficult to find good rock for the aggregate and certainly for rail ballast. So yes, I think there's a possibility.

Yes. Thank you, Don. Okay. So I'm going to continue here sequentially in terms of how the analysts have popped up just so that I'm not showing any favoritism either way. And apologies to everyone who's having to wait. But Heiko, you've got the microphone.

Question for you. Why is the gold price that you guys used in your study you so low? I mean you're at $2,100. I was looking through the full document online earlier, you do have the middle price sensitivity in table 19.9 on Page 92 46. I mean, $3,000 gold, which is a whole lot closer to where we are today, you're looking at IRR of 60%. What is the market and frankly, that might sell for that matter? What are we missing? And why did you elect to use $2,100 gold in the base of the study?

Look, I think $2,100 gold, you can correct me if I'm wrong, but I think that's -- we felt that, that was consistent with some of the long-term projections that we saw and certainly consistent with a 3-year rolling average. One wants to be conservative. You want to make sure that you've got a robust project. And I think it reflects that it's a robust project at the moment. So yes, we -- I think it was just a conservatism on our part.

Yes. If you like us at $2,100, you'll love us at $3,000.

And that's exactly what I wanted you to say, okay. So there was not anything obvious that I'm missing. This was just essentially conservatism because it was just one of the first figures that popped out at me when I looked at the release this morning. Okay. And then just a quick follow-up, so I don't hog the question queue too badly here. What was the total cost of the study?

Oh gosh. Total cost of the study. We -- I haven't separated that out. And Luke, I think the last 4 years, when we look at what we've raised for drilling and what we've put into studies and keeping the company going. we have been judicious as we've raised money.

Yes, I'll step in there, actually, George, because look, I mean, we do have numbers, and we're happy to get into that. Just we don't have them in front of us, Heiko. However, it is something I'd love to reiterate to the marketplace, especially when we are out in a platform like this today is the hard yards have been done by this company. The money has been raised and spent well in advance, of $30 million into combined efforts of engineering and reserve reports, et cetera, et cetera. That dilution has been gone. We're not staring down the barrel of any other large dilutive events. There's not a bunch of drilling that needs to be done to further engineering to get to bankable feasibility. As George has alluded to, a lot of that is now essentially desktop undertaking. It's also down to when we're ready and prepared to sort of time stamp a bankable feasibility study because we are looking at so many other advances and optimizations to this project that just further improve the economics of it. I think for a starting point for a base case with a very conservative metals price to show -- to be able to showcase CK as just the reserve portion of this big mineral system, it's pretty exciting for us. So we will continue to advance this project, but the large dollars have been raised, the short answer, other than obviously the development dollars.

It's nice to see the stock up today on a day when gold is marginally down.

Okay. So again, just following the order sequentially, Jake, we have a Jake, you've got the microphone. Jake Sekelsky, of course, sorry, from AGP Capital.

Most of my items have been touched on, but I'm just curious on the financing package. I think, George, you mentioned you're sort of targeting potentially an 80-20 split. I'm just curious, given the copper component at CK and obviously being a critical mineral here in the U.S., are there any low-cost state or federal funding programs that you're exploring to take a bite out of that CapEx figure?

Yes. Look, we're obviously aware of that. We obviously would like to take advantage of that. We stayed away from federal funding, bringing us into Nepha, but I don't -- now with the status of where we're at, I think that's certainly something that we could look to. But, yes. I think that financing is something that we're going to be turning our attention to. We've got a lot of the engineering done. We can get people into the data room while we conclude some of these additional studies. And...

George, let me add on that, if I may. Jake, I mean, there's a great point you raised there on -- with the inclusion of copper as a critical material, not a critical mineral, we're still waiting for that to sort of make its way through and hopefully have some grants or federal funding. But one of the other areas that we're looking at, and we're hoping that with some of the administration changes, recent administration changes, there's potential for some tax credits and/or deductions, again, with copper being included as a critical material and that could save -- if we get some tax credits, that's right off the top on having to pay federal income taxes. So I don't have what that is at this point, but that could potentially really help the economics.

Okay. So on to Joe Reagor and Joe is with ROTH Capital in the U.S., of course.

No questions for me, Luke.

Okay. Wonderful. All right. We'll head on O'Brien with Velocity Capital.

Congrats on the update. Just a couple of quick clarifications. On the royalty, as in the press release, 2.1%, is that the entire project state royalty? And does it also apply to the aggregate opportunity? Or is that a different royalty structure?

Yes, 2.1% on the copper gold, silver and the aggregate would be separate that a separate royalty structure, and it averages out at about $0.60 per tonne.

Okay. So yes, it does apply to the entire property?

Yes, the royalty, the 2.1% would apply to all of the copper and gold production, and the aggregate would apply to only the waste that we sold off site.

Yes. Got it. Great. Secondly, just in terms of the sustaining capital, it looks like you applied inflation across everything, but I think the sustaining capital actually decreased as low as it is anyway to start with. Can you explain why it's so low from the last study to this study? I think it went from $15 million down to $13 million total.

Yes, you're right. So we -- what we've done since that first study, and I mentioned a little bit about the tailings storage facility, we got Tierra Group International involved in redesigning our tailings storage facility. We additionally constructed it from -- as a light on the site plan from west to east. So we changed it to construct it from east to west. The sustaining capital essentially in the initial capital, we build the first phase and then we have 2 subsequent phases to expand the tailings management facility to where it goes. So that $13 million essentially is mostly associated with 2 additional expansions to the tailings management facility. And some of the rock associated with stabilizing that, we are viewing that as essentially waste dump and operating cost to cap the tailings [indiscernible] facility. So the sustaining capital is pretty low. We don't have big equipment rebuilds. Everything is based on new equipment and so on. And so I imagine as the mine life increases if and when it does, there would be additional sustaining capital. We don't have any expansions plans. We build it at 20,000 tonnes per day from the get-go. So that kind of explains those figures.

Great. So all right. I think we can wrap this up here. I'd just like to add some of the key takeaways, at least from my perspective. Obviously, having a fully permitted project in the U.S. shovel-ready with a very tight capital structure, share structure is a huge advantage to us. Even using $2,500 gold, if we look at those headline numbers, pretax $680 million NPV, post-tax, $510 million NPV, a very manageable CapEx at $277 million. We're approximately around 2:1 NPV CapEx ratio, which is far more attractive than we were in 2021. Very low AISC relative to, I think, the peer group, around $2,000 -- sorry, about $940, excuse me, all-in sustaining cost. Very low payback to years. We didn't touch on this, but in the future, I think a few analysts or anyone has any questions about it. Our IRR, of course, within the realm of 2021's IRR, our years to payback have dropped by half a year. So clearly, the economics are a little bit more robust than 2021 from that standpoint. And that's all in part to this very low strip, 0.9:1. And look, when we go following this ore body to depth, whether we do so with a future drill program to increase resources, reserves under SK-1300, the rules are definitely different to NI 43-101. That strip could come up, but as we reflected today, outside of the economics of our pre-feasibility study that a higher strip would mean more of an aggregate, more of a potential economic boost to this overall project through the future years. So look, that's me. That's us in terms of wrapping up. George, I'm sure, might have a little cap off himself. But again, thank you, everyone, for taking the time joining us today. This has been recorded. We'll release the recorded link at some point, it will be on the website. So if anyone wants to come back or go back and go through the highlights or check on something we had stated or have claimed, by all means, that will be up on the website. So thank you all again. And George, I'll give you the final closing remarks or comments.

No, no. Thank you for your time. Look, we are delighted to talk about this project. We -- and it's so easy to get to if you're in Denver, we're 1.5 hours away. We'd be happy to host a visit, really seeing is believing, and we are there to answer any questions. So with that, thank you for your attention, and have a great day.