SSR Mining Q3 2023 Earnings Call Transcript

Quartr
Provided by Quartr
November 1, 2023

There are 8 speakers on the call.

Operator

Hello, everyone,

Speaker 1

and welcome to SSR Mining's Third Quarter 2023 Conference Call. This call is being recorded.

Speaker 2

Thank you, operator, and hello, everyone. Thank you for joining SSR Mining's Q3 2023 conference call, during which we will provide an update on our business and a review of our financial performance. Our Q3 2023 consolidated financial statements have been presented in accordance with U. S. GAAP.

Speaker 2

These financial statements have been filed on EDGAR, SEDAR, and are also available on our website. To accompany our call, there is an online webcast and you will find the information to access the webcast in our news release relating to this call. Please note that all figures discussed during the call are in U. S. Dollars unless otherwise indicated.

Speaker 2

Today's discussion will include forward looking statements. So please read the disclosures in the relevant documents. Joining us on the call today are Edward Farid, Chief Corporate Development Officer Alison White, Chief Financial Officer and Bill McNevin, Executive Vice President, Operations and Sustainability. Now, I will turn the call over to Eddie for his opening remarks on Slide 3.

Speaker 3

Thanks, Alex. Good afternoon to you all and thank you for joining us today. First of all, I want to communicate that our Executive Chairman, Rod Entol, sends his regrets for not being able to join us today. Unfortunately, he is dealing with a family health emergency and is currently in transit. With respect to the quarter, As planned, we are pleased to report a strong Q3 operationally, which included record production for Marigold as well as record throughputs at Puna.

Speaker 3

3rd quarter production of 192,000 Gold equivalent ounces at all in sustaining costs of $12.89 an ounce was a meaningful improvement over first half results. These metrics drove nearly $100,000,000 in free cash flow generation in the quarter, and we anticipate Further production and cost improvement in the Q4 of this year as we continue to track towards the lower end of our full year production guidance of 700,000 gold equivalent ounces and as a result, the high end of our all in sustaining cost guidance. We are also proud to have marked a significant milestone in the Q3 with the delivery of first production from Cakmaktepe Extension. This timeline is well aligned to our internal expectations and most impressively was delivered just 6 years after the initial drill hole was completed at the project. Since our 2021 technical report, we have had significant exploration success at Cakmaktepe Extension and are excited about the continued growth potential of the project.

Speaker 3

As a result, we are now evaluating opportunities to optimize the flow sheet and meaningfully improve gold recoveries. I will discuss these opportunities in more detail along with other aspects of our organic growth profile in a few moments. I wanted to also communicate a number of other key highlights from the Q3. First, at HOTMADIM, initial earthworks, Site preparations and infill drilling have begun as we advance the project towards a construction decision in mid-twenty 24. Second, our overall liquidity position was enhanced during the quarter with an amendment to our revolving credit facility, expanding the facility's total capacity to an undrawn $500,000,000 at a reduced margin and bringing our total liquidity position to more than $900,000,000 3rd, our brownfield exploration portfolio continues to advance successfully As we look to extend mine portfolio including 46 grams a ton intercept over 6 meters at Seabee's Porky West target and 190 meters of 155 gram per ton silver and 10.6 percent zinc from the Cortaderas target of Puna.

Speaker 3

These are truly spectacular results and a strong reminder of our brownfield organic growth plans. And finally, remarks, we continued our track record of robust capital returns with nearly $90,000,000 return to shareholders over the year to date period as we track toward a minimum total return yield of 3.6% for the year. As we head towards the end of 2023, it is worth noting that we have committed substantive efforts towards the advancement of refreshed technical reports for both Marigold and Choeppler. As we evaluate the interim results of the technical analysis being completed at both remarks, we are working to maximize value while also ensuring an optimized production profile for the portfolio over the long term. At Choeppler, as I have noted, our continued success expanding the scale of the Cakmaktepe extension has triggered a revision to the prior life of mine plan, which featured 1,200,000 ounces of production with the majority of the project's ore are stacked on heap leach pads and averaging approximately 60% recoveries.

Speaker 3

By planning to install grinding and leaching capacity at Choeppler, we can materially improve those recoveries and potentially deliver a significant valuation uplift for the entire operation. However, this will mean a slower ramp up to full production levels until later in 2026 when this additional processing equipment is installed. Combined with the expectation of a positive construction decision for HOTMAD in next year, It is clear our business is moving into a reinvestment cycle over the next 3 years that will see production lower expect that the near term reinvestment in our portfolio will drive production growth in the medium to long term timeframe as Marigold production profile improves, the grind leach circuit comes online at Troopler and the hot Madden project build is completed. We are excited by what's ahead both into year end and over the coming years. Our portfolio features an abundance of High return, low capital intensity growth opportunities that we expect will drive further NAV expansion going forward.

Speaker 3

SSR Mining has a proud history as explorers, mine builders and operators as well as a long track record of prudent value additive M and A. Our business is in a strong position supported by a robust balance sheet, including more than $900,000,000 in total liquidity, and we are keen to continue building on our solid foundations. On to Slide 4, where I'll comment on ESG. ESG is and long has been a core value and focus for the company as it firmly underpins our success. We continue to prioritize the health and safety of our employees and business partners and are seeing positive results with respect to our safety metrics across the portfolio.

Speaker 3

In 2023, we reinvigorated a focused and formal leadership in the field initiative To drive engagement and improve safety performance across the operations. This has been met with enthusiasm from our teams and is already showing positive results. Additional key initiatives this year include continued development of an action plan on our journey towards decarbonization, including evaluating remarks, we are enhancing our water management plans for each of our assets And fine tuning our efforts on integrated mine closure plans to ensure we leave a positive and lasting legacy for our local communities. Finally, over the coming months, we expect to become a signatory to the International Cyanide Management Code. While Marigold is already a signatory, bringing our entire portfolio to this level is another positive step forward on our ESG journey.

Speaker 3

As we have done previously, we continue to work hard to advance our ESG initiatives and look forward to sharing additional updates on that journey going forward. On to Slide 5, where I'll turn over the presentation to Alison.

Operator

Thank you, Eddie. I will start with an overview of the results from the Q3. 3rd quarter production of 192,000 gold equivalent ounces was largely in line with expectations and brought year to date production to 496,000 gold equivalent ounces. Sales in the Q3 were 196,000 gold equivalent ounces and were impacted slightly by the timing of concentrate shipments from Puma. We expect similar impacts at the end of the Q4 based on prior history, particularly given the holiday season and as a result, expect 4th quarter sales to lag production.

Operator

All in sustaining costs of of $12.89 an ounce was a meaningful improvement over the first half results and included costs associated with the scheduled maintenance shutdown at Schirpler. We expect to see continued cost improvement in the Q4 of 2023. Attributable net income was $15,200,000 including a $37,000,000 or $0.18 per share charge we will be conducting a reconciliation of our financial results associated

Speaker 4

with the increased corporate tax rate in Turkiye.

Operator

As previously announced on July 15, Turkiye announced 5% increase in the corporate tax rate from 20% to 25% that is retroactive to January 1, 2023. The entire impact was recorded during this quarter. Despite the change in the overall tax rate to 25%, it is important to note that our cash Taxes paid in Turkiye are not impacted in the near term given existing incentive tax credit eligibility within the country. Adjusting for this tax rate change and other one time items, adjusted attributable net income was $53,000,000 or $0.26 per diluted share. In the quarter, we delivered positive free cash flow of $88,000,000 or $95,000,000 before working capital adjustments, bringing year to date free cash flow to $54,000,000 or $173,000,000 before working and capital adjustments.

Operator

We expect another quarter of strong free cash flow during Q4 given our expectation of stronger production and to close out the year. Now turning to Slide 6, we can talk about SSR Mining's financial position. As a result of the strong free cash flow in the Q3, our cash position is now $438,000,000 and net Cash is $207,000,000 In the Q3, we accelerated the repayment of the final $36,000,000 outstanding on the term loan, Leading the $230,000,000 convertible notes as the only debt outstanding on our balance sheet and further solidifying the strength of our financial position. The payoff of the term loan also removed the restriction on $34,000,000 in cash, supporting our overall liquidity position as those and funds transitioned to cash and cash equivalents. Balance sheet strength is one of the pillars of our approach to capital allocation and is further supported by the refinancing and extending the maturity of our revolving credit facility that also occurred during the quarter.

Operator

The revolving credit facility now has a total capacity of $500,000,000 at an improved borrowing cost and brings total liquidity for the organization to $938,000,000 We view this facility as another tool available to us As we enter a period of reinvestment within the business. Reinvesting in organic growth is the 2nd pillar to our capital allocation strategy and we expect it will come to the forefront over the coming 3 year period as we commence construction at Hod Madden and move forward with the Schirpler expansion project. Capital returns represent a third pillar of our strategy and let's flip to Slide 7 to discuss those further. Through the end of September, we have returned nearly $90,000,000 shareholders through our base dividend and share buyback program this year and are on track to return at least $103,000,000 to shareholders for a minimum total return yield of 3.6% in 2023. This follows yields of 5% in both 2021 and 2022 and will bring total capital return to shareholders over a 3 year period to more than $450,000,000 Approximately 16% of our market cap and something we are proud of.

Operator

Our capital returns initiatives are generally meant to reflect the free cash flow profile of the business and the buyback is a dynamic component to this strategy. While we are entering a period of investment in growth, our dividend currently yielding 2% will continue to provide a baseline to our approach to capital returns. Overall, our company remains in a strong financial position and we expect further free cash flow generation into year end. We are proud of our history of capital returns and going forward anticipate sharing opportunities to reinvest in the organization. Now, I'll turn the call over to Bill, our Executive Vice President of Operations and Sustainability to review the operations.

Speaker 4

Thanks, Alison. I've committed a significant portion of my time this year at the operations working with our teams and local stakeholders to ensure operational delivery and continued improvement at each asset. It's pleasing to see these efforts beginning to bear fruit with a strong third quarter, including record gold productions from Marigold and record average daily throughputs at Puna. There's a lot of work ahead, So there's no doubt that our teams are fully aligned on delivering our production targets for the remainder of the year. Before I dive into a review of the individual assets, I want to start with a discussion about safety.

Speaker 4

The most important thing we do each and every day is ensuring our people get home safe. As a core value for SSR Mining, this has always been a focus. We are continuing to drive increased leadership engagement and implementing simple tools to enable our people. Whilst this is improving safety, is also improving the quality of work and results in the field as safe production delivery is an integrated approach

Speaker 5

to our

Speaker 4

long term success. Now on to Copler. The mine delivered 3rd quarter production of 57,000 ounces at an ASIC of 13.78 ounce, reflecting the planned maintenance shutdown that was successfully completed in the quarter. As Eddie has noted, we received 1st production from Kakwaktepe Extension in the quarter, in line with our internal timelines and we continue to inspect the project will contribute 10,000 to 15,000 ounces to Copler's production total in the 4th quarter. We've already spoken to the excitement around the future of Cakmaktepe Extension and we're currently now hard at work translating that excitement into an updated life of mine plan to the operation, while the opportunity to add additional processing capacity at Copler has potential to meaningfully improve the life of mine cash flows of McTepe extension.

Speaker 4

The installation Of that additional equipment will delay the ramp up to full production levels until later in 2026. We will continue stacking oxide ore to the heap leach pads over that time, but a lesser rate than what was anticipated in the 2021 TRS. More details on Kakwetepe Extension and the overall triple expansion program are forthcoming and the updated technical report that will be released alongside updated multi year guidance in the Q1 of 2024. Exploration work has also continued across the Copler District, including at regional targets at Slog Mabadere, where we expanded our ownership to 80% in Q4 of 2022. Airflow has had more than 20 years of mine life since 2016, which is a testament to our continued success replacing depletion and still expanding the resource base.

Speaker 4

With a full suite of near and longer term growth opportunities across the district, we believe there are opportunities to continue this track record of mine life extension going forward. Marigold. Marigold produced impressive 83,000 ounces kilo ounces in the 3rd quarter. This is a quarterly record for the operation and it's more than 30 years operating mine life. At an AISC of $11.06 per ounce in the quarter, this reflected planned reduction in spend after a capital intensive first half of the year.

Speaker 4

As we have noted and we focused on delivering our consolidated full year production guidance, some of Marigold fleet originally scheduled for waste stripping at Red Dot was reassigned to ore mining at the Mackay pit. As this week sequencing is incorporated into our 2024 budget forecast, We expect initial production from Red Dot will be late for the second half of twenty twenty four and also deferring associated production and into 2025 and 2026. This work will be incorporated into the updated life of mine plan for Marigold, which will also be presented alongside our multi year guidance in the Q1 of 2024. Initial review of the ongoing technical work completed at Marigold suggests our near mine exploration programs to successful and replacing depletion. The refreshed life of mine plan will incorporate first contributions from New Millennium And we are also evaluating the potential to include a first mineral resource statement for the Buffalo Valley target at the southern end of the Marigold property.

Speaker 4

Our portfolio. Moving on to Slide 12, we'll talk about Seabee. Seabee's 3rd quarter production was an improvement over the first half results, but also reflected planned downtime as a result of Thanks to the Regional Power Grid. The mine produced 20,000 ounces of gold at AISC 13.82 per ounce in Q3. And we expect further improvement from this level in the Q4 as mine grades are expected to average between 6 7 grams a tonne.

Speaker 4

Overall, however, it is important to note Seabee's mine plan does not forecast the very high grades we have encountered in the Santoy ore body over the last few years ahead. With increased contribution to the more medium grade Gap Hanging Wall area In 2024, we expect Seabee's mine grade to be aligned with our mineral reserve grades and drive annual run rate production of Approximately 80,000 ounces going forward. As you have seen, we have some very exciting medium term growth potential from the Porqui targets remarks on the horizon and technical work is now underway to evaluate opportunities for these targets to be presented and a new mining plan for the Seabee in future. In the near term, we are focused on improving operating efficiencies and delivering increased mining and milling rates On to Slide 13 with Puna. Puna once again delivered an outstanding quarter with 2,600,000 ounces Silver production at AISC at $13 per ounce as the processing plant averaged record throughput of 4,900 ton per day.

Speaker 4

It is a testament to the team and their focus on continual improvement that they're able to deliver this level of performance and cost control Despite the period of currency fertility in Argentina, exploration continued in the 3rd quarter and we are pleased to highlight some very high grade assays at the Cortadera's target, including a 190 meter intercept at At 155 gram per tonne silver and 10.6 percent zinc. As we continue to evaluate Opportunities to extend mining life from Chichilla's open pit in the near term, Cortadiers is presenting itself as a very And the trailing medium term mine life extension target going forward. Moving on to Slide 14 now to discuss Hod Martin. After closing the acquisition in the Q2, we now commenced initial earthworks and site preparations at Hod Martin. As part of our preparations towards construction, we began in fill drilling program in the quarter and with the goal to derisk the initial years of the mine plan.

Speaker 4

There are only 3 holes have returned assays today. It is encouraging to see the world class The nature of the ore body affirmed with the highlighted intercept of 17 grams per tonne gold and 1.6% copper over 90 beers. Mobilizing the project execution team is well advanced and includes bringing a number of key members of the Copler sulphide tank construction team over to Hodman. As a reminder, Hodman is expected to average life of mine production Nearly 200,000 ounces per annum gold equivalent ounces at AISC below $600 per ounce. At our 40% stake, we expect the mine will contribute an average annual free cash flow of more than $65,000,000 to SSR.

Speaker 4

We're thrilled to have a development project of this caliber in our portfolio and continue to advance towards a construction decision for the project mid next year. Now I'll turn it back over to Eddie.

Speaker 6

Thanks, Bill. As you have heard,

Speaker 3

we are clearly excited about the future of our business and don't believe that today's share price performance reflects this. We are on track for a strong Q4 to achieve both production and cost guidance targets, And we expect to present a comprehensive portfolio update in the Q1 of 2024, including refreshed technical reports at Schoepler and Marigold, updated mineral reserves and resources and an optimized multiyear guidance profile. While we are entering a period of reinvestment, it is important to note that our portfolio of growth projects feature some of the highest returning, we will cover the capital intensity projects in the sector. Top Madden, a truly world class ore body with 1st quartile costs and a compelling IRR in excess of 30% will move towards construction mid-twenty 24 and we expect the project to deliver 1st production in 2027. At our flagship Tropeller mine, we delivered 1st production from the Cakmaktepe extension project just we expect to be approximately $6,000,000 in capital.

Speaker 3

We see potential to expand the project's existing one point At Marigold, New Millennium and Buffalo Valley are showing potential as low CapEx mine life extension opportunities. And you have also seen meaningful exploration success at growth targets at both Seabee and Puna. We have the balance sheet to advance this multitude of growth projects and see potential for meaningful expansion to our production profile as a result. Combined with our track record of building assets successfully, the business is well positioned to deliver value to our shareholders. At the same time, we will not stop our relentless efforts to drive costs out of the business and will also continue to return capital to to our shareholders alongside investment in our organic growth pipeline in the near term.

Speaker 3

We have a proven track record delivering high return growth projects and are excited

Speaker 1

Thank you, Mr. Fareed. We will now begin the question and answer session. The first question comes from Cosmos Chiu with CIBC.

Speaker 6

Thanks Eddie, Allison, Bill and Alex. Maybe my first question is on your 2024, that's called guidance. As you mentioned, 2024 production is going to be lower year over year. And thanks, Eddie, for giving us a bit of guidance in terms of 10% to 15% below previous guidance. But could you clarify a little bit?

Speaker 6

Is it 10% 15% based on the mid range of the previous guidance, which was 270 to 7 or 670 to 7.50 or is it 10% to 15% below the lower end. Yes. Thanks, Coz. It is 10% to

Speaker 3

15% to both the lower end and the high end of the range.

Speaker 6

Got it. Okay. And then looking further ahead, I'm just taking some of your commentary here. It sounds like with Chekatate, the Granite Leach potential, it's not going to reach production until or full production or full potential until 2026. However, it sounds like a Marigold, Red Dot could come in, in 2025.

Speaker 6

So I'm just wondering, The lower production, is it contained to 2024 and we should see Hopefully, 700,000 ounces potential again in 2025 or we're talking multi years in terms of potentially Lower production than what we had previously thought about. Yes. Thanks, Kaz. Look, we're obviously we're

Speaker 3

still working through and completing the in progress technical report summaries, and we're continuing to complete the work on our infill drilling, the metallurgical test work, And the trade off studies and finalizing the pitch all optimizations. So I'm unable to give you a exact sense of the relative production profiles on an annual basis. However, what I would say is the inflection point for The operations and for the production profile really will come into play as the grind leach circuit

Speaker 6

Okay. And then on that, the ground and leach Sir, could I guess you've talked about that in the past, but you didn't really talk about that in Q2, but you've talked about that in Q3 again. Could you maybe talk about what the potential CapEx need might be? And is that a goal? Like is that it sounds like It is.

Speaker 6

It sounds like you're pretty committed to it, but it also sounds like you haven't made the final decision yet. So I'm just trying to get a sense in terms of where we're at On that decision point at this point in time.

Speaker 3

Yes. Look, it is a high probability we do pursue The Grindleach circuit, obviously, we are finalizing the technical reports. And with the release of the technical reports and the full definition of the economics, including the capital estimate and the returns, the decision will be made to pursue the Grind Leach circuit. That is part of the work that is currently undergoing. We do not as we look at our capital profile over the next for years, we do not expect a significant departure from what you already have incorporated into your estimates, Because the Grind Leach circuit capital would be prioritized over investment into C2, which would be delayed.

Speaker 3

And so it would come into play in place of the C2 capital that would have been Deployed over that same period of time, plus or minus the refinement of the capital estimate in the technical report.

Speaker 6

Great. And that leads well into my next question in terms of, you talk about 3 year growth capital investment period, But at the same time, you say, you know, capital and lowlowcapitalintensityhighreturnorganicprojects. So for those investors are somewhat concerned about CapEx and I see CapEx was $123,000,000 in terms of budgeted In 2023, I guess my question is, should we be concerned about CapEx? Is it going to go Higher than 2023 or is it right now, I've modeled actually lower in 2024. Should I be concerned at all about any kind of CapEx increases due to your comment on a 3 year growth capital investment period?

Speaker 3

Yes. Look, as I look at the next 3 years, the market is fully aware A lot of the large chunks of capital ahead of us. So we have Hot Madden, which we are responsible for 70% of the capital estimate for. We have the Grindleach circuit, which we just covered together. And those represent the largest Components of the growth capital associated with our growth profile in the coming 3 years.

Speaker 3

And so again, I do not believe that the market will be surprised as they look through the outcomes of our technical report estimates,

Speaker 6

which will

Speaker 3

fully define all these figures to a higher level of fidelity.

Speaker 6

Of course. And then maybe one last question, Hedi. In terms of CapEx for hot medan, it sounds like you got to make a decision by mid-twenty 24. So when you're budgeting in the studies that are coming out remarks and the guidance for 2024, we should expect some kind of hot matted number for 2024, right,

Speaker 3

Yes, let me pass that over to Allison to cover.

Speaker 6

Great. Hi, Allison.

Operator

Hi, Cosmos. Thanks for the question. Yes, we will definitely be including the CapEx expected for Hod Maden we may issue our guidance in the upcoming year. So you can anticipate that it will be released at that time.

Speaker 6

Thanks for answering all my questions, Eddie, Allison, Bill and Alex, and I'll pass it on. Thanks, Kaz. Thank you.

Speaker 1

The next question comes from Owaiz Habib with Scotiabank. Please go ahead.

Speaker 5

Hi, Adi and Sisar team. I guess most of my questions have been answered, but a couple of follow-up questions asked by Cosmos, at Marigold, now obviously, you're looking at deferring stripping at Red Dot Into 2024, does that also mean that ASIC could be kind of first half weighted for 2024? I know you're not giving guidance yet, but any kind of color on that would be appreciated.

Speaker 3

Yes, sure. Look, I'll pass that over to Bill. What I'll say is, given Red Dot is second half weighted, Production is likely going to be weighted further to the second half in 2024 on Marigold. But let me pass it over to Bill for more color.

Speaker 4

Yes. So with the lower Production profile, the ASIC will go up commensurate. But along with that, we're doing a lot of work associated with and with some good Success associated with improving the productivities associated with the fleet. So, we're actually improving on a lot of fronts, The spend profile at Marigold, we'll definitely see the ASIC come up with that reduction In gold production for the year. No surprises with that.

Speaker 4

So Bill, just on again.

Speaker 5

Yes, that makes sense. So at Red Dot, like I mean, how much more additional stripping Is kind of required at Red Dot? I mean in terms of Tons or in terms of kind of maybe in terms of quarters, can you give us some color as to what needs to be in place going into 2024 To complete Red Dot, will it be done by, I guess, the second half or is that going to continue

Speaker 6

in the

Speaker 4

second half? It will be the middle yes, It will be the middle of 2024 we get into the ore zone, 1st major ore zone proper. So essentially, we're delayed, say, a quarter and a half. And that tonnage was just directed to another part of the mine, Supporting this year's production. So in other words, it's nothing's changed in terms of the profiles or anything.

Speaker 4

It's just about a quarter and a half of stripping.

Speaker 5

Got it. I appreciate that. And then just switching gears to Jopler at Checkmate, As you wait for a decision on Grand Lease Circuit, are you looking to continue mining and stockpiling or would you defer essentially all mining To mid to late 2025.

Speaker 4

We'll still continue mining. We just won't be mining at the rates that were projected previously. So we won't be increasing the mining rate to the rates we projected remarks, we will continue mining and that ore that's coming out between now and when we talk about that potential plant Expansion will be going on to the heap leach as previously planned.

Speaker 1

The next question comes from Michael Cypherko with RBC Capital Markets. Please go ahead.

Speaker 7

Hi, guys. Thanks for taking my question. Yes, a lot of my questions have been answered as well. Maybe just and I know you don't want to do this necessarily, but I'm struggling a little bit with The 10% to 15% that you mentioned in 2024, can you put it in context a little bit in terms of The split between Chilper and Marigold in terms of where the bulk of the impact will be, And I assume that there will be an impact on Marigold's guidance versus the prior outlook. Is that fair to say?

Speaker 3

Yes. Look, Mike, I think it's a bit early Until we release our guidance targets to give you the exact split of ounce impact, that will have to come through As our technical reports are finalized and our budgets are closed out. That being said, if you thought about Cakmaktepe extension as a 90,000 ounce And then a delay of half a year out of Red Dot, it should begin to give you a sense that the distribution It's largely I can't give you an exact percentage, but certainly split between both operations and burdened by both

Speaker 7

Okay. That's helpful. That was going to be my follow-up on Trac Mcdeaf and the contribution expected for next year. So Would it be fair to say, I think the guidance was $15,000 to $20,000 this year. Would that be a fair sort of run rate to look at For ongoing operations at Chek Mottepe in 2024?

Speaker 3

Yes. This year, the Q4 4 is going to operate at 10000 to 15000 ounces is the target. Next year, we are currently still working through what I'll call as the trade off studies Of how much in terms of production gets contributed from Cakmaktepe and gets placed on the leach pad. The key again here and I'll make sure we reiterate it is that with Cakmaktepe, there's a 1,700,000 ounce reserve. That reserve has grown substantially as we have continued our drilling and both our step out drilling And our infill drilling converting some of the resources to reserves.

Speaker 3

That is what's triggered this decision to build the grind leach circuit because At the moment, all these ounces are going to be stacked on the heap leach pad and get recoveries in the range of 60%. By installing a growing leaf circuit, we could get recoveries north of 80%. And as you think about the quantum of ounces there, it's NPV accretive for us to And so we may be sacrificing a slower or taking on a slower ramp up remarks, at Cakmaktepe in exchange for NAD accretion. And so what we're doing right now in the trade off studies Seeing how many ounces that we should stack at the moment and how many ounces are going to go through the grind leach circuit. And so hopefully within the coming 2 months, you will have a very good picture as to what that distribution is.

Speaker 7

Okay. That makes sense. So it's not so much you're looking at whether or not to do it.

Speaker 4

It's the I suppose the pace

Speaker 7

of putting material on the heap leaches Versus the longer term NAV appreciation from running them through the plant that you're looking at. Is that Did I hear you right? Yes, okay. Is there still a scenario being considered where you could see, Let's say full speed production on the leach pads for the next couple of years while you get the expansion done at the plant Or is that something that's already been tossed as a consideration?

Speaker 3

Look, the preliminary work we're seeing at the moment, and again, this is work in progress indicates that it is more accretive to wait for the grind leach circuit to get to full run rate As that work is tied up, if the conclusions change for any reason, certainly we'll evaluate the other option. But at this stage, we're working under the impression that we'll be building the Grindleech circuit.

Speaker 7

Okay. Last one for me. Just a comment on if If we're talking about 2024 now, any comment on Seabee given the lower production this year? Should we expect And impact versus the 2024 outlook for CV as well?

Speaker 3

Yes, let me pass that over to Bill.

Speaker 4

Yes. I think I made reference to the fact Seabee has been a fabulous mine, particularly in the Santoy area. And whilst we're continuing to mine there and we're continuing to do some exploration, We see ourselves on the edge, and that's where the higher grade was coming from. So what that will mean is a reduction. We expect to stay around That 80,000 kilo ounce part and what we're doing is we're ramping up our mining rates and ramping up our processing rates Keep it at those levels.

Speaker 4

That is a slight reduction versus what we were projecting last year. I think it's down about 10%. And we're completing that work at the moment to pull it together, but it will be a reduction, but not major.

Speaker 1

This concludes the question and answer session. I would like to turn the conference back over to Mr. Fareed.

Speaker 3

Thank you, operator, and thank you to everyone for participating. Have a great day.

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