New Gold Mine in Mongolia | Erdene Resource Development CEO Interview
Summary
Company Overview: Erdene Resource Development, listed as ERD on the TSX, focuses on gold mining in Mongolia, specifically the Bayan Khundii project, with a market cap of under 500 million CAD and significant insider and institutional ownership.
Share Structure: The company recently underwent a 6-for-1 share consolidation, resulting in 61 million shares outstanding and a potential 8% dilution if all options and DSUs are exercised.
Financial Position: As of June 30, 2025, Erdene had 6.5 million CAD in current assets and 31 million USD in undrawn liquidity, with plans to achieve commercial production by year-end.
Debt and Financing: The company has a total debt of approximately 160 million USD, primarily from a shareholder loan and working capital facility, with plans to repay the debt quickly using cash flow from gold production.
Project Details: The Bayan Khundii project aims for 87,000 ounces of gold production annually, with a 6-year reserve life and an ASIC of $940, targeting 93% recoveries from a high-grade open pit.
Exploration and Expansion: Erdene plans to expand resources around the Bayan Khundii pit and explore additional targets like Dark Horse and Altan Nar, leveraging higher gold prices for potential heap leach opportunities.
Strategic Partnership: The partnership with Mongolia Mining Corp (MMC) provides operational and construction expertise, essential for developing a multi-mine district in Mongolia.
Market Strategy: With a focus on maximizing shareholder value, Erdene plans to increase marketing efforts to attract institutional investors and potentially consider dividends or buybacks once debt is repaid.
Transcript
Today on the CEO barbecue, we're looking for gold in Mongolia together with Erdine Resources. If you want a bullet point summary of this and all the other CEO barbecues in your inbox once a week, go to resource.com and subscribe to our free newsletter. Now, although the company you're about to hear from has not paid us for the production of this interview, you should still not treat this video as research. Research is conducted by reading the company's official filings which you can find on setterplus.ca. In any case, please only watch this if you absolutely know what you're doing. This interview is intended only for experienced junior mining speculators because mineral exploration, development, and mining is an extremely tough business where failure is the norm and should be the expectation. This is going to be a conversation that is general and impersonal in nature and it is also going to contain forwardlooking statements. I am not a licensed financial adviser and my business sells content producing services which also makes me biased. Although this company has not paid for the production of this interview, it doesn't mean they won't become a client in the future. They might. So before continuing on, please talk to an independent investment advisor with a good long-term track record because your capital might be at risk. If you're not 100% sure you understand 100% of the disclaimers I just showed you, please go to the last section of this video and do not consume this content unless you fully understand and agree with everything said therein. That all said, Erdine is listed as ERD on the TSX mainboard exchange where the average 3mon volume is about 75,000 shares. Now, the company just went through a 6 for one share consolidation which was completed at the end of August. So, do keep that in mind as I'm going through these numbers here. But taking that into account, the stock's 52- week high is now $8.68 and 52-we low is $3. With a market cap of slightly under 500 million Canadian dollars and just over 61 million shares outstanding post roll back today, this is an $8.7 stock with a 50 and a 200 day moving average at respectively 6.48 and 5.08, 08, which means that the stock is now trading well above both of them. Moving on to the share structure, insiders here are noted as owning about 7% of the company, while the biggest individual shareholder is Eric Sprat. He's noted at 20% as of the latest presentation. 30% is in the hands of institutional investors and family offices. 8% in the hands of EBRD which is the European Bank for Reconstruction Development and the rest so that's about a third of the company is in the hands of retail investors including some local ownership by Mongolian shareholders. Post roll back there are now 3.5 million options outstanding and about a million and a half DSUs for a total of now 66.2 2 million fully diluted shares. Meaning an increase of about 8 and a half% in shares outstanding could happen if all dilutive securities get exercised, which would then result in just under 8% ownership dilution if, and that's always a big if, but if all dilutive securities get exercised. And of course, none of this accounts for potential dilution down the road, which is not unlikely given that Erdine operates in what is a very capital intensive industry. But hopefully more about financing strategies later on in the conversation. Talking about capital, I'll now go through their latest financial statement which shows me the numbers as of June 30, 2025. And again, do keep that in mind that this was in the last leg of development of their uh mine, but they weren't they weren't pouring gold at the time. It was not commercial production either. So these numbers will have changed. At the time though, the company had in total about 6.5 million Canadian dollars in current assets, mostly in the form of cash and cash equivalents to the tune of $5.8 $8 million with some receivables and some prepaid expenses. On top of that, they also had uh at the end of Q2, they had about $31 million US of undrawn liquidity, which they said that they will be using to achieve commercial production, which is targeted by the end of this year. In terms of liabilities, the current liability side of the balance sheet had about $1.1 million on it. And there was no long-term debt outside of a $76,000 lease liability, which may sound a bit strange on first glance because they just, you know, built the mine and they sure didn't do it without spending any money, but the debt here is actually it sits at the associate company level. So, it's technically off ERD's balance sheet, but it's still there. And as of June 30, that liability showed as $145.4 4 million in non-current and 13.3 in current liabilities. So that's about $160 million of total debt. The plans for which will also be discussed later on um in a conversation. As a bit of a background on that, the financing was actually an $80 million U that's US dollars. Um it's uh it's a 5-year shareholder loan from Mongolia Mining Corp. carrying an almost 14% bullet as well as a $50 million US TDB 24-month working capital facility which carries almost the same rate but 13.3% so a bit lower of an interest rate and u moving on from here on out to the P&L for the 6 months that ended on June 30 again no commercial production for Ardine yet so the um the operational P&L is really mostly L the total amount of which sat at $3.6 $6 million split in about a 60/40 fashion between GNA and exploration activity. So there was $2.15 million went toward GNA for that 6-month period. Although this does include almost $700,000 of sharebased compensation, which is of course a non-cash expense. So the actual out-of- pocket expense recorded for the period was about a million half dollars, which is give or take $250,000 a month on average. The largest chunk was on $800,000 spent on administrative services for that period. So that's about 55% of the total spend. While investor relations and marketing, they were just about $25,000 a month. So that's just under 10% of the overall spend. As the $1.5 million spent on exploration, that was mostly accounted for by employee compensation costs. Uh so this is where I normally provide the drilling to marketing ratio. But since there was no drilling for Ardan in that period, that's not going to work here. But the overall exploration to administration split is again but 60/40 in favor of administrative expenses. As always though, I'd like to remind you to be cautious. Your capital may be at risk. So you have to visit setterplus.ca and review the company's full financials and specifically pay attention to their fullear financials once those become available because expecting again commercial production by the end of this year. That might change a lot about the financial situation. Hopefully of course all of which will be discussed later today. Enough accounting for now though because uh I've got a brief overview of the company here and ultimately the story of Erdine is one of gold and gold production uh to be specific and and and gold production in southwest Mongolia to be even more specific. The main asset is called Bayan Kundi of which owns 50% of with Mongolia Mining Corp. owning the other 50%. So that's a company that was doing the loan as well as I mentioned earlier. Now, this is a high-grade open pit project with almost 2,000 TPD CIP circuit that's targeting 93% recoveries on what is a relatively small deposit with about half a million um ounces uh in resource at an average rate of 4 g per ton, which Erdin believes can result in about 87,000 ounces of gold production per year. And that's specifically for year two to five, which gives it about a 6-year reserve life with a $940 ASIC after initial capex of $115 million, which again, uh, most of which again has already been expensed, but more about that later on as well. Now, Erdene doesn't think that's where the story ends, though. So, hopefully Peter will be able to tell me why that is later on in the conversation. And of course, more about the risks of the jurisdiction, their plans for managing the bull market, the new exploration potential, their financing financing strategy, and much more later on in the conversation as well. But for this to actually become a conversation, I'll have to shut up already. And Peter, I'll give you the word here. But first of all, thank you so much for sitting down with me today. Thank you, Antonio. It's a pleasure to be here. Pleasure is mine. And since this is your first time on the barbecue, we'll have to go through the smell test first. But just before that, uh, when I started looking into Erdine, which is which is actually relatively recently, one of your guys reached out, I started thinking about with the bull market now kind of ramping up, you know, there's many new gold companies popping up left and right, most of which of course are are not at the least serious. And there's also older projects that get revamped and and people start doing more marketing and they're out there and just doing more, right? and and they present sort of this new potential opportunities often times opportunity for a discovery or opportunity to go from that dip in the lan curve um you know in the PA stage to production whereas again arrine as I mentioned has just gone into what just is about to go in into commercial production and if if we look at that lan curve that's where the real sort of problem start that's where the price kind of curls down right so why would I want to look at Erdine in this market versus something you know something else with or near-term, I guess, toric or or excitement. Mhm. Well, in fact, I think we're right at that point where we're coming up that Lison curve. We're we're beyond that trough. Um, you know, we've passed that high-risk period of permitting a plant, getting it built, finding the uh cash to to actually build that uh facility. So not only are we at a point in this high gold price environment to take advantage of coming into that production profile, but as a geologist, I have not seen the expiration upside that we have in front of us in the Bayundi district. So I think you really have the best of both worlds. You've got about to be stable state commercial production of a high-grade open pit gold mine, but the expiration upside is phenomenal as we'll get into. Well, it's you're you're trying to fight the Lan curve here essentially is what what you're telling me and I have heard that before. So, I do have a couple of questions about that which we'll hopefully get to. We'll be back to some of those things uh that you're talking about here later on. But for now, I want to I want to kind of kick it off with with what I call the smell test. And that includes starting off with the person running the company um which happens to be yourself. So, why do you think you're the right man for the job? And and have you made money for shareholders before? Well, thanks for that. I am a geologist that uh entered the business 38 years ago. Um fairly early on, began working internationally. Uh spent time in South America, largely in British Guyana, moved on to the Philippines and most of that work has been focused on uh gold and copper exploration. Um found myself in the mid 1990s having an opportunity to go to Mongolia when it first opened up to foreign investment. So I was a corporate development uh senior geologist working for a group out of Toronto called international pursuit and found myself leading what became the largest ever foreign invested regional exploration program in the country. This is 1997 to 1999. During that period uh with Mongolia just opening up for the first time, we attracted Bareric Gold as a joint venture partner and we mounted what became, as I said, the largest program ever employed in the country. We had 10 500,000 hectar licenses, 100 geologists uh made some discoveries of epiothermal gold in the northeast and it really provided me with a um probably the best training country 101 course you could get to understand a new jurisdiction and what I saw was very impressive largely that central Asian origenic belt that comes through the southern part of the country one of the world's most prolific that sat there unexplored at that time what you Jogoy hadn't been identified. Uh it started to emerge in the coming years. But I made a decision at that point as a as a relatively young geologist that this was an opportunity to focus on. I uh set out to um line up investors to support that that new enterprise. Unfortunately, it was impacted by what was the Asian financial crisis and some of the lowest commodity prices we'd seen um probably in the last 30 years. And it really kind of shut down the Mongolian opportunity. That that window had opened for about three years. But I stepped away from it. Uh very impressed, put together a group of private investors that launched our dean in 2002. And since 2004, we have been the most active regional explorer in the country. We've uh assessed over 3,000 prospects. We've had 100 expiration licenses and converted three of those to mining licenses. And you know when you talk about who's the right person to run this country c company company um we've proven our ability to explore find and bring to production now uh gold mines in in this country. I would qualify the last part of that with we recognized a deficiency in our experience in at the point we decided that this was a project we wanted to move to production and we set out to find a partner who could complement what we lacked which was the operation skills, the construction skills and we'll get into that in more detail but um yeah we're we're a company that has more experience than any other western invested uh company active in Mongolia. We've proven we can do what we need to to get uh from grassroots exploration to production. Do you currently hold any other executive or board positions with other companies? No, I'm 100% focused on her, Dean. Okay. Insider ownership Peter is noted at 7%. What percentage of that is you personally? Uh so between my shares and DSUs, I would hold approximately 1%. Okay. What's the average cost of those uh shares that you mentioned there that you've paid for it? Probably in the mid30 cent range preconolidation. I have to do the math now since this consolidation. Six to 180. Yeah, because it was 630. Yeah, 180. So 180 something like that. If I'm uh this is actually surprisingly fast for me. Like I would normally stutter at that at that math maybe even almost faint. But uh yeah, so I've paid I think I've invested close to a million of my own money into the company's shares through both purchases, private placements, exercise of options and the DSU portion of my holdings. Uh much of that is taken through reduced salary, cash salary and applied to taking DSUs as an alternative. Well to to someone like me a million bucks is a lot of money. Is it a lot of money to you? Is this a significant investment within your personal portfolio? Yeah, this would be my primary investment. Okay. Well, now that we finally seem to be in a bull market and and you seem bullish in the story, you said you want to again fight the Landon curve there. Um hopefully defeat it, but as you put it at the beginning, do you plan to be in the open market and and buying some erd stock and and especially interesting to me here because of the size of the company? I oftenimes interview much smaller companies. So, how is that for you? Is that something you you you do as as yourself as a CEO but also as a group as you know management and directors? Is that something that still happens and is incentivized? Personally um I would say with the option exercise opportunities in front of us most of the investments will come through that direction. Um and there may be some open market buying but more likely through investments through option exercise. Talk to me a little bit more about the board here that I just mentioned. It's always something that's not discussed enough out there in my opinion, but with you, I see some Mongolian names in your management registry. Uh, none on your board. Uh, so do do any of them I I believe you reside in Mongolia, but do any any of the board members here reside in country or do you plan on making any changes to the board now that you're again hopefully soon moving into commercial production? I think in terms of having a Mongolian on the board, it's something we always look at. It's finding the right fit and what disciplines do we need at the board level when we have a vacancy. But I would just um I guess note that when you look at the makeup of our board, we have Canada's first ambassador to Mongolia who lived there for four years. We have our chairman who spent 20 years in Mongolia. And we have uh the former CEO of um Outo Togoy who I guess spent probably eight years in Mongolia. and I've been there for the better part of 28 years now with much of my time spent in country. So certainly a good understanding on the ground. Um but as I said I'd love to have a Mongolian person added to the board if we can find the right fit depending on the vacancies that come up. You live in Eastern Canada yourself if I'm not mistaken. I'm in Halifax Dartmouth Nova Scotia. That's right. Right. How long is a trip from there to I picked the furthest place away from Hellifax Dartmouth to go to to do my employment? Um, we spend anywhere from 24 to 40 hours traveling from here to there. Um, yeah. So, it's a it's a long journey. Do you fly what what do you do? Do you fly into Turkey and then through a do that? That's an option. So you know it's it's um Toronto, Estanbul uh direct on to Ulatar or more frequent frequently for us is Toronto soul soular. Yeah that's interesting. I just I I went to Kazakhstan myself this year to visit a project and I remember that for me you know coming out of Belgium much easier you know flying into um Istanbul and then directly to Austin it was actually an easy easy commute but I I um just wondering how it works from there. So yeah how how often do you do you actually visit and you said you're a lot there. Do you go every quarter or how does that work for you? I'm there at least every quarter. So usually a week or two every uh two months. Um I just spent the last almost four weeks there. Returned um about a week ago and I'll travel there again u around mid end of first week of October. uh you know we've been through a bit of a I guess I'd say a bit of a hiatus on what we're typically active on which is the expiration front and as we moved into the build we lessened the expenditures in that area but now as we move towards cash flow will pick that up and we'll get into that a little bit more so I expect my activity um which has been increased just to be there as we go through wet commissioning into first goal but now it'll pick up as well as I interact with the exploration teams not only on joint venture ground but we activity on our other two licenses as well. Do you plan to, you know, talking about who's the right person for this job? Do you plan on remaining CEO as the company goes into production? Yes, I um I see myself as remaining in CEO role for the next several years. Um but we're always looking to add to the team. But yeah, the short answer to that is is yes. um you know from a operating perspective the team that's sort of in the control seat has come over from the joint venture partners so my job will remain much of what I did previously which is to help guide the uh growth side of the business. Do any of the insiders or their related parties personally own a royalty on any of these projects? No. Okay. What I um I always like it when the answer to that question is is short and sweet like that uh because that is the right answer. What I'm really trying to understand though here Peter is what the real incentive is and and what's really driving insiders essentially is I believe incentive is one of the most important concepts in finance. So, so talk to me about um you mentioned those DSUs and everything, but talk to me about KPIs here and how you plan on incentivizing your your people during this next chapter of of Erdine and and both like what what are what are paychecks based on? What are what are benefits based on DSCUs and everything else? When you're looking at senior management team and into executives, each has their own well-defined um goals and objectives which we review annually and based on that there are uh performance bonuses that are issued and approved by the board that range from 30 to 60% of annual salary um depending on the performance be depending on hitting those KPIs. Um, in addition to that, I'll just add, and I think you mentioned earlier, there was a $1.1 million um, debt that sits out there at corporate level back in 2020 as COVID first hit. We put in place a uh, first gold bonus and that was largely driven because the company didn't have access to cash to actually cover salaries and people agreed to reduce salaries at the time. So there was sacrifice and at that time we put in place a one-time annual salary bonus for the five executive team members and that gets paid out once we hit I think it's 10 million in initial cash flow from the uh first goal production. So that's um the other incentive that sits out there but that's basically it. There's a annual performance bonus and then there's a first goal bonus that sits out there. When you say annual performance, is that based on new discoveries? Is it based on share price, market cap? Is it on production? Anything else operationally? What's that based on for for like for you and let's say the main the main guys and gals? Yeah. So mine would be partially weighted. There's I think five categories. There's quite a well prescribed um waiting that goes towards performance which might go from you know 10% on the safety side up to 30% for new discoveries. Uh in my case it would be uh well weighted towards getting to that uh operational uh milestone of commercial production. Um yeah so there's a number of wellprescribed sort of uh waitings within that index for key performance. This might actually be a good segue into talking specifically about the business plan or or your aspirations for Erdine here. Going back to what you talked about at the beginning there, I suppose, but do you see yourself as not yourself personally, but Erdine is as building out this production camp essentially over the years and remaining as the operators or are you looking for an exit sometime during this bull market? Mhm. You know, it's worthwhile to get into this relationship that we formed with MMC to answer that question. So, as I mentioned earlier, we are we've been very good at exploring, discovering, and bringing projects towards the uh production stage, but we're not we're not builders and we're not operators. So, I sought out a partner that could bring us that strength, which they've now proven they can do, and we'll continue to prove that as we move through to commercial production. But if you step back to 2019 when we made a decision to build by Hyundai, it was based on the fact that we believed we had discovered a significant new minerals district. It wasn't a one-off. We weren't looking to build a six-year mine life. We thought that we had the ability to do a multi-mine multicommodity district over perhaps decades. And in order to do that, we needed to bring in that partner that brought that strength, not just to build a mine, but to build out a district. And I can get into the wherewithal they have to do that, but my sort of overall business plan isn't that six-year mine life. It's to have that multi-mine opportunity brought to fruition for the benefit of our shareholders. And to look at us as whether or not we would be the operators of that, that's not really the case. We've joined forces with a group that brings the strengths on the operating and construction. Some of our people have moved over that line and they're part of that operating team, but we're still truly focused as their dean on what's next. Where do we add that expansion opportunity? Where do we add that second development? Uh what do we do with the zoom modum copper pfery? That 38 years in this business, I've worked in or visited most major mining jurisdictions and what we have out there is something quite unique. Let's maybe talk more specifically about those catalysts as to how how you achieve that though because again going back to fighting the Lan curve as I call it. Um that's kind of like eating an elephant and and the way you do it is is one bite at a time I suppose. Um you know I know I've said it a dozen times already and you touched upon it at the beginning and now as well but if we can put some rough estimates in terms of dates on on what your next few catalysts are. I understand again first uh commercial production is you know first pour just happened commercial production is coming soon hopefully um but yeah the other catalyst I mean you mentioned exploration and and so what do you do is it it you know permit by 3 months and the drill rigs there by you know 5 months from now so just examples like that what do you do yeah sure so you know first off the low hanging fruit is we have um let's say half a million ounces in that economic pit at buying Hyundai defined at $1,800 gold So already at this higher gold price, we have expansion opportunities just by pushing the envelope around that economic pit. And we've drilled some of those areas and had tremendous success particularly to the west and south of the pit. So as we speak, we're about to be mobilizing drill rigs out there to firm up that expansion opportunity in those areas. Uh I would suggest that in that area to the south and west there's another 150,000 ounces of target resource that won't be at the four grams but let's say in that two 2 1/2 g range that we can immediately start to bring into the reserve uh rapidly. You know there's no additional permits needed. We're on a mining license. We're just expanding the footprint. So that's first off and those drills will be turning soon on the Bay Hundai expansion. In addition to that, if you look to the north, we have the Darkhorse Discovery, which includes a a satellite pit um that we rushed into a reserve shortly after discovering it. Because it was so high-grade, it allowed us to improve the economics overall of that first 6 years. So there's 50,000 ounces of 7 g sitting at surface in a super gene zone, oxide zone that has not been explored along strike. Now, do I expect 7 g continuity? Uh probably not. But nonetheless, there's a kilometer and a half of uh oxide type material that follows that structure to the north and the northeast. So lowering fruit that we can quickly establish into the reserve on the mining license that we can also add into the mix for development in the future. The qualifying point to all this is that when we did the $1,800 gold uh pit, it was a cutoff of let's say 75. With the gold price where it is today, that cutoff drops down to let's say 35.4. So we find ourselves uh holding a whole lot more gold in that low grade category. And what do we do with it? We don't necessarily want to push our grade down uh in the initial years at this gold price, but we are now looking quite closely at a heap leech to complement the CIP plant. and that is going to be very applicable to the oxide material we have at Darkhorse and uh Alton Arrow which is just a continuation of it. So that's why there's some urgency in getting that work done now. And that's pretty much I wouldn't say it's a new opportunity, but it's changed dramatically in the last year with the gold price move and probably is the most rapid lowest cost uh complement the CIP plant if we can work out the technical uh well answer the technical questions around that. Get the drilling done. Do we have the volume? How does the metallergy uh work? We have done early work on heat bleach bottle roll tests. So feel pretty good about that. So those two areas provide us with potential extension and perhaps expansion. And then you know we come back to this because there's a whole lot in our pipeline but Alton Nar is our second project 16 km north a gold poly metallic that we'll start to move into more aggressively next year with cash flow and that has the potential to be another let's say 70 to 100,000 ounce per year producer but a gold in concentrate uh sold into the Chinese market as opposed to a gold dory. Uh, I can keep going there, Antonio, but uh, probably best to pause there. There's a couple of other projects outside of the alliance. What I've just described to you is in the 50-50 alliance, but I'll pause there for a minute. Well, I think outside of operations and and production here, the main unanswered question would be, is the extension potential real? Is it is it actually going to result in something tangible? How long before you can prove up an answer to that question where you're entirely sure? Um yeah, what's the timeline for having that answer? And I understand there's, you know, a million moving uh pieces that go into that, but how long before you have a definitive answer? You know, at these gold prices, I'm entirely confident today that our mine life is in excess of 10 years of the Bay gold mine. Um we will update our resources and reserves as we move into Q1 next year. um in terms of the heat bleach uh opportunity drilling that off and then Alton N those things will start to become more apparent as we move through mid 26 into mid 27 because there's not just the drilling then we'll move through the u sequence of studies because one of the benefits of being in production uh is that we don't necessarily have to go through all of the hoops of pea prefeasibility feasibility we need to prove to ourselves that it's economic and and move on and that's why the Bayern Hyundai and Darkhorse opportunities are so um I guess urgent in a way but we can move them very rapidly. You know if we were to prove to ourselves that we have let's say 100,000 ounces of lowgrade material that's amanable to heat bleach then let's start moving it let's start getting that uh constructed we'll have the cash flow to do that. Um and the same for the expansion of the mine site. drilling those areas to the south and west doesn't necessarily mean we're going to move immediately into those areas but it's good to have that knowledge so we can juggle best uh mine schedule and optimize the economics of the mine what is very rapidly in this case I mean essentially you run out of ore according to this plan you run out of war in six years is it realistic to expect that you've you've completed that plan within that six year period or is it something that you expect within 3 years or does it take longer Yeah. So, as I say, I'm completely confident today, assuming these gold prices hold up where they are, that we have um in excess of 10 years from the Bay Hundai complex and the Darkhor satellite pit. Now, the grades will drop off as we move past that year six, but I'm confident that's in place. We will do some additional drilling and that will be added to the updated resource that you'll see as we move through Q1 and an updated reserve. So that timeline, let's say, you know, to answer your question, let's say that's eight months that we have in the public domain an updated uh mine plan and reserve that that satisfies that time. Um the other two, you know, I think there's they're a bit open-ended. So on the heat bleach side, we will do the necessary drilling this year to establish uh the continuity of those zones. Assuming on our first scoping of the potential there and the first heat bleach tests are uh are positive, then we would look to firm up the reserve next year and ideally complete technical studies uh to have our own internal feasibility done by the end of 26 so we can make a decision on a heat bleach build timeline. It took us 22 minute to 22 minutes. I wish it was 22 minutes. 22 months to build the um the Bayern Hyundai CIP plant. Heap leach should be significantly quicker. We have much of the um permits in place, infrastructure in place. So let's say it's 14 months to get a heap leach facility uh built. So then you're into early 28 would be the timeline for that. Um Alton NAR is a bit longer term. I'd say it will take us two years to go through drilling studies, permitting. um that is a mining license, but it's not at the level of permits obviously that buying Hundy is. And then um use the 22 months uh just to be conservative on that side. So four years out, you're into uh 2029, 2030 to be adding that second complex at uh at Alton. That first phase though that you talked about that that could happen relatively quickly. You mentioned something under one year. How much is all that going to cost? How much money did you need to make it happen? Uh, it's pretty limited. I mean, we have 10,000 mters of drilling uh this year. Our drilling costs are in the60 US range all in. Um, with that work behind us, we can upgrade what is currently a resource into a reserve. Um, so yeah, there's not uh what are we talking here? Maybe, you know, a few million dollars of expenditures to get that resource up. There's no metallurgical work to do. There's nothing else that needs to be done. Maybe a bit of geotechnical drilling, but effectively that's also been done to some extent along the west side of the pit. So that's truly lowhanging fruit to move that into the into the mix. How much cash do you have right now? So in the subsidiary there is remaining 20 million ondrawn in the working capital loan which was a total of 130. Um, we expect to be in cash flow fairly rapidly. Well, in fact, I guess you could say we are because we've uh sold our first gold bar. That was on the smallest side. But um I think, you know, as of today, just after a week or so, we have um 12 kg of gold loaded on our carbon. So, we expect to start to hit some pretty good cash flow here quickly, which will start to fund the expiration. So all of that expiration I've talked to you about is funded by the subsidiary. Cash in parent co is about 5 million but that's largely unallocated with uh with some work expected on our other two projects that I can come back to. So what essentially you think you may not have to raise capital again to to complete that plan and and you can do that all from cash flow. How do you see that? Yeah, we have no needs within the subsidiary, within the gold project family, if you will, to source additional cash. If there's any additional cash required in the future, it's for expansion of projects outside of that alliance that are hold direct held directly 100% by your team. Well, what about the um MCM debt here? What uh or wait Mongol? So, MMC um what? Yeah, what about that debt? I mean, they I believe it's to get a bullet loan. carrying some balloon risk there if you will if I'm not mistaken. So how do you take care of that and and is there a refinancing plan in place or how do how does that get taken care of? So the total debt the two uh packages of debt are the 80 million that was made available as a shareholder loan from MMC and the 50 million from TDB. The 50 million was fully drawn and the t the MMC loan uh 20 million remains onrawn and that's the way we'd like it to remain. So that leaves us with a total uh debt of 110 uh with interest being capitalized that probably gets us into the 118 119 range today. Uh our intent is to pay that back as rapidly as we can beginning now. Um the only exception to that will be to keep some retained earnings in the company um as a buffer and also to begin to fund expiration. So, the expiration spend will begin to ratchet up this year. We haven't finalized our budget uh update, but over 2 million Canadian will be spent on drilling in the areas I just mentioned as we move through the latter part of this year. And I think we've dedicated close to 10 million uh next year. It was 6.7 million US is allocated for drilling and technical studies next year. Um so that gets funded directly by the cash flow. you know, the cash flow at 85,000 ounces per year at these gold prices is um quite substantial and uh so there's not a shortage of funding available assuming we can get up steady state to commercial production. Mhm. What So what percentage would go toward paying back that debt versus you keeping it for exploration in that case? 90%. Oh, okay. How quick So how quickly would you be able to have paid that debt off? uh 16 months. Okay. Well, why I'm asking is this because I'm go where I'm going with this is just thinking of um a distribution of sorts. So, a dividend or something like that when or um you know or a buyback. Is that something you want to do and if you do when do you see that happening? Yeah. So, I think the first uh question well this the timing for this will come up as we move towards mid next year. um additional developments that I talked about uh whether it's heap leachch andor altonar or expansion at the buying hyundai site could potentially draw some of that money back before we look to distribute to shareholders but that distribution will take place likely as we move into next uh late next year so MMC and erd will receive 50/50 split on the excess uh cash proceeds and that would be provided back to parent co and Canada from which we would make a decision on how to distribute that to shareholders, whether it's through a share buyback um or through uh dividends. I'll be back on track in a minute here, Peter, but I'm just reminded because you mentioned that 50/50 split there. I and and I wasn't following the company when you did the initial deal. It was almost 3 years ago now, I believe, but uh two and a half. Uh but some shareholders were unhappy with the structure of the deal and and and the portion of the the I suppose upside that you were giving away. So looking back at that deal now as well as the overall partnership with MMC, would you do it again? Yeah, absolutely. You know, it's a lot easier to say that now than it might have been to have those discussions with shareholders at the time. But, you know, to put yourself back in that position in 2019 to 2021, 2022, it was very near impossible for companies in our stage of life to go out there and raise money without diluting shareholders down well below what we gave up in this 50% interest of our subsidiary company. Um, so to be able to look back on that and recognize that not only did it get us to that objective we wanted to, it did it ultimately with less dilution than we would have incurred otherwise, but it brought us a partner that enabled us to do this faster and more efficiently and closer to budget than likely anybody else in the world could have done for us. We brought in Western companies, uh, some of the top gold mining companies in the world and I don't believe it would have made a difference. certainly wouldn't have been able to do do what we've just done with this partner. Uh I'll I'll expand on that a little bit. You know, when we selected MMC and they selected us as as partners for this enterprise, they had made a decision that they wanted to diversify away from coke and coal into gold and copper. We both had known each other for a decade. So there was an understanding between the two of how we did business. So that was that was good and somewhat unique um for that area to have a company that familiar with western business practices. But importantly, they're controlled by a company called MCS, which is one of Mongolia's largest business conglomerate. And when I look back on wanting to build out a district, they bring sister companies that are the leading mine construction company in the country, the leading power transmission power plant construction company. They're into logistics. They ship back and forth across the border regularly. We've just built a 240 km power line to China to access power. Couldn't have even thought about that. No other company that we would have done business with could have done that. Um so the intangibles or the side value that was brought to this enterprise is uh extremely high. Uh so yeah, I look back on it and and I'm very happy we made that decision at that time. It is an interesting relationship though because they hold they hold your debt. They're a partner at the project level and they also hold equity if I'm not mistaken. How do you how do you I mean that's it's it opens potential I'm not saying that it is but it opens potential for conflicts of interest there. Uh how do you how do you manage that situation? So they don't own own any equity in the parent company. uh when we selected MMC as the senior debt provider, we had other options. We were in discussions with European Bank, who's one of our shareholders with Export Development Canada, and we supported that route because it was faster, more efficient, and at the end of the day, probably about the same price as it would have been to take on the development bank money. So, yeah, that was a decision made jointly uh to secure that that debt from MMC. um they're very uh strict in terms of their uh conflicts of interest given they're listed on the Hong Kong stock exchange. Much more strict in terms of reporting than uh you'll see with the TSX reporting. So all conflicted party transactions have to go through uh fairly rigorous review including the fact that we have two members of the board of the subsidiary both the CEO and the chief development officer who have to review these things. So we have uh input there's unonymity required at the EM level both from the executive and the board side. So I feel quite comfortable with that relationship. Yes, there's potential conflicts, but um but I think we've covered those off in some of the things I've just mentioned. Well, I promised I'll be back on track, so I'll try to get back on track there. Now, what do you think are the main risks for the company between now and having completed that plan where where you have proved up that the LOM is is longer than what you have right now? Well, I think the risk for a company at our stage is always in that startup phase. you know, things are going well. I I'm very impressed we're able to achieve first gold as we said we would by late Q3, but you know, like any of these startups, it's the known unknowns. You know, there's there's going to be tweaks and there's going to be things that need to be adjusted as we move through the next few months. And uh hopefully none of those are significant, but I think you have to realize that it's still the growing pains of going through an initial startup. Um so getting to that commercial stage and when we get to that commercial stage is probably the first uh risk. I think when you look at the uh local uh political and local relationship side you know one of the benefits we have of working with a company that is recognized as one of the most credible uh enterprises in the country. They employ 10,000 people. We now employ I guess 350 people at the mine site. It's peaked at 700. and the benefits of that starting to bring improved livelihoods into the local jurisdictions um help our situation in terms of local support. But I I flag that as it's a constant education. You know, it's important for us to be out there ensuring that people understand what we're doing and sharing those benefits. And to that extent, I think you flagged this at the outset. One of the things we did back in 2017 was helped the federal regulatory agency in the Mongolian stock exchange rewrite their rules so we could become a dualistic company so that today we're the only dualistic company with 7,000 Mongolian shareholders including everyone that lives within about a 100 km radius of our site has uh shares in the company. So we've taken steps to try to mitigate what could be uh risks from the from the stakeholder side. But I come back to I guess the first thing is just getting that planned up and uh ticking along at near name plate which will take place over the next few months and then there is expiration risk. You know there's new permits that we'll need as we move through startup. Um so there's there's other things that are just normal course of business. What what about and I do want to get to the jurisdiction there in in in a couple of minutes here but what about operationally something like uh the strip ratio for example attracted my attention off the bat. It was it's almost 11 to1 here. Uh you know pit ball angles are great or recovery. Is there something else that you still I guess lose sleep about or or at least wonder about? Mhm. Yeah. Well, when you look at that uh I guess the the pit itself at at 4 g per ton can have a lot of forgiveness in terms of strip ratio and that's why you can drive it so deep at that uh at that grade. um that strip ratio actually drops somewhat significantly with the decrease in uh cutoff grade at the higher gold price. So the 11:1 is that $1,800 gold. So that probably drops down to 7:1 albeit we're stockpiling much of that material. It becomes economic and was waste. Um you know it's a fairly dry pit. It's it's a solicious rock. So your your pit's quite stable. The um the blending of that is something that will be as much art as it is science as we move into keeping that 4 gram head stable. Um the plant you know again this is a very uh clean ore. It's almost completely devoid of sulfides has great recoveries in the 93 to 95% range. I think as you move to the back end of this plant and we're doing a dry stack tails for the first time in Mongolia. So we have filter presses that are um having that waste taken and stored in a dry stack tails facility about half a kilometer to the east. That um will be interesting to see how we deal with that as we move into the minus 20 temperatures in Mongolia. Um you know ideally you're smoothing out that wet filter cake material and then enclosing it with waste rock. Um so winter conditions will be um I'm sure full of its challenges and learning curves in Mongolia. Um, so that's probably one of the things that I think about as we move through this ramp up. The other one is small population, limited labor pool, increasing competition for the best of the best in the mining business. You've got Rio Tinto over there with I think 8,000 employees who uh are probably the highest salary uh provider in the country. uh you have a multitude of new startups mainly in the gold space who are also drawing people in. So it's a competition out there to maintain a high quality workforce of 350 400 people. Um so that's the other one. I'd say winter weather and labor uh are probably two of the big ones. That's um labor is something that I wanted to uh touch upon as well. What about the uh what about competition? Are there no outer exploration companies operating in in the region or what does that look like for you? Competition? Yeah. Is that Yeah. Um so one of the limitations of Mongolia's growth in the mining business has been their inability to get their licensing system on track. when I was there, I guess from maybe 97 right through until 2010, 2009, they had uh map staking and everything was pretty much wide open. Uh it was probably too wide open and they due to some aggressive speculation that was happening and uh I guess I call it middlemen coming in and picking up licenses without doing any work. They closed that system. They didn't issue any new licenses under that system and they opened up a tender process and that tender process has kind of gone in fits and spurts uh up until now. But what it's effectively done is really shut down the ability to get good quality large licenses and it's limited the competition. Um there's a couple of licenses uh adjacent to us that are interesting held by um one in one case publicly listed company but there's a very large area in our Hyundai Minerals district that remains um closed which the government has indicated they plan to open to staking but a long answer to the competition is limited because of the lack of product. This is also typically a question that I ask when I see stuff like that is why has this not, you know, the discoveries that you're after. Why hasn't anybody discovered them before you and developed them already? And and I suppose it's it's a similar answer relative to to the government framework that was in place before you got in. You know, it's interesting and I think it's a bit more than that in that this is the least densely populated region in Mongolia given the geographic location a thousand kilometers from the capital city, lack of infrastructure up until now, um poor climate conditions for herdsmen to have um a herd in the area. Um proximity to China, which was really not something that was open up until 20 years ago. So for a number of reasons the area that we are focused on had not previously seen any modern exploration. We mounted a regional program there in 2009. Explored with satellite imagery and followed it up with um geochemical stream sediment surveys, boot and hammer and spent 6 million a pure grassroots exploration 2009 2010 with nobody else in this area and discovered Alton NAR which was the first gold discovery in that district. You know, our first hole from surface, I think, was 23 m of of 2 g. And the first discovery at Bayern Hyundai 5 years later was we picked up 4,000 g samples at surface. Our first hole was 7 m of almost an ounce of gold starting a few meters from surface. So really just uh right place, right time, unexplored, great belt. And um yeah, we were the first, you know, people say they're first movers. This is truly not just maybe first modern geology, but first people to walk across some of these areas because everybody can notice uh 4,000 g samples. I mean, some of these samples are just spectacular at surface. We drilled a hole within 10 meters of surface that we just announced uh I guess about five or six weeks ago that was 2.4 kilograms of gold. Uh so just spectacularly rich and a testament to these these are areas that nobody's walked across before. H how are the community relationships up there? Now you can talk to me more about that specifically. I know you mentioned it and and employees and everything, but who are you? How does that work? Like let's say in Canada you have First Nations, you got to get their approval. How does that work for you in terms of access uh rights to the ground and so on? Yeah. So, you know, as I mentioned, we're in one of the least densely populated places in the country. So very rare for us to see any inhabitants in the vicinity of our mine. The nearest um town is 110 km north place called Shinjzhinst and it uh it provides in the winter dormitories and schools for the herdsmen in the area to come in and uh and bring their kids to school and I guess it blows up to about close to 2,000 people uh over the winter months and maybe half of that during the summer as herdsmen spread out. So that's the area we focused our attention on in terms of improved livelihoods uh improved facilities really focused on health and education in that area. But importantly when we began to look to staff our mine and this goes back you know probably a year and a half ago we quickly identified and and asked people to provide their interest in in long-term employment at the site. And we because of our relationship with MMC were able to identify 160 people in the province and put them into a training program at the UHG mine of our partner and for a year and a half they had salaried uh training and they've now been brought back. I think we have 110 of that initial 160 that are our heavy equipment operators on site and that's paid great dividends in terms of just demonstrating right out of the gate to a large number and you can imagine the spin-offs of 100 people in a small community like that to have well-paying long-term jobs. So that's really helped. I think um there's always uncertainty when you go into a new area in terms of lack of understanding of the mining industry uh what impacts this mine will have and you know the best way to satisfy that curiosity or or provide that education is to get people in your enterprise and have them be able to talk to their families and friends about that experience. And that's what's we've had the luxury of doing. Going back to that partnership with MMC, another one of those intangibles that's paid dividends. Um, you know, I think importantly there's a a very um amazing culture and history in this country and in the area that we're working and it's important that we do everything we can to protect that. And when I talk about the herdsman, there's always going to be some that want nothing to do with mining and we have to be respectful of that and find uh ways to prove to the community this is a win-win. we can still find ways for the the hurting uh culture and community to um to be able to recognize we can have a win-win in this situation. When you do get some push back from the community, what is it based on? Is it are you affecting any agriculture or is is water a touchy subject and and what's that situation? So, you know, if you were to visit this location and much of Mongolia, you wouldn't imagine that there's any um livestock that survives off of the what you wouldn't even recognize as as feed. But, uh almost every square inch of this country has some um animal, sheep, goat uh that that visit it. There's 90 million livestock in a country of three million people. There are boats. Um, so their largest concerns of those herdsmen that may wander through that area or those flocks is dust and water. And that's really what it comes down to when there's legitimate concerns. Is is my water going to be impacted? Is it going to be uh is there effluent questions? Is there draw down question and dust? You know, um don't make any new roads. So, it's really those simple things that are legitimate concerns. I think um there's always those that look for, you know, commercial or political angles. Uh election time in Mongolia can always prove to be a more heated period for um mining companies. Uh so those things sort of filter in and out depending on seasonality of election periods. But when it comes to real legitimate concerns for those impacted locally, it's uh water and dust. H. So, how does that sit for you or the LOM or if you if you are successful in that plan and you add more ounces, you might need more water. Um, how does that look like in terms of permitting and everything else? Yeah. So, we're um we're actually recovering about I think it's 84% of our water going back to the dry stack tails. Our water consumption is uh about 6 L per second. So quite low for for this plant. We have identified um well in excess of that through a series of connected bore fields that use fracture uh related aquifers and those are all within sort of a 5 kilometer radius of the site. So in terms of today and in terms of expansion say double the size of what we have today we uh feel comfortable that um that volumes available to us. But in the case of Alton Nar and in the case of uh Zun Mod, we've gone ahead and spent considerable sums on exploring large aquifers further from the mine sites. But if you look at Zun Mod for instance, if we were to consider that, you know, that's 40 times the scale of a Bayern Hyundai and obviously, you know, 40 times or more the water consumption. So we've invested, I think, um just over a million US in identifying a bore field there. 30 kilometers to the north. Uh so we're ahead of the game in terms of making sure you can provide that. The issue is one that's technical in terms of identifying it, making sure you can pipe it to site, but you still have to go through that education and that discussion and negotiation with the local in our case called AIMAG, which is province and soon, which is the subprovince centers. And there's a lot of work, a lot of community effort that still has to go under the um has to be completed to advance those other projects. I think you know what we have at Bayern Hyundai with Darkhoran and that entire area there that gives us that next 10 years plus those issues are already uh behind us but they will come with other projects in the future. Talk to me more about skilled labor here and and how much you're having to train u your your primary staff. You said you what did you say 350 people uh from from the locals you've employed so far? I think I heard or saw talk of 500 at a certain point. So yeah, talk to me more about that. How many people do you need? Who's going to be local? How much you have to train them? Just everything there. Sure. Yeah, we um we peaked at over 700 personnel. That was during the construction period and that was an EPC contract. So that uh body of uh labor was provided by MCSP and we are keeping some of those people employed kind of their top engineers, pipe fitters, electricians as we move through the commissioning but that'll continue to Wayne and we'll continue to upgrade our uh workforce in that 350 probably closer to 400 uh persons. Um, Mongolia has a legislated two week two two weeks on and two week off. Um, which you know we get to as we get the name plate. Um, so typically you'll see a couple hundred people in our accommodation village at any given time. Um, starting at the top uh, Erdine and MMC have contributed two people to the uh, executive. So we've provided the CEO and the chief development officer and they have the chief operating officer and the CFO and those two those four form the executive. Underneath that we have the general managers that have largely come over from the MMC group. So when you look at MMC they employed 2,000 people in two large coke and coal facilities, a wash plant and power plant in eastern Mongolia. Uh many of those people that we brought over had previous experience on gold mines in the country. There's u a large one previously run by Centara that um was called is called Boru and then another one that our partners affiliated with in the northeast called Bioneric. So we've been able luckily to bring in skill sets that have uh mining experience in some cases gold process and gold mining experience and the core of that team uh was brought over to form the general management team underneath that you know into the next level of uh management into the heavy duty equipment process operators. We've we've sourced those from other places around the country. Uh I think we're probably at about 80% of those positions now filled. So, we're getting there, but as I said, it gets harder with the limited labor pool in Mongolia to fill that remaining 20%. So, we have a workforce that's capable of doing the operating now, but it's still a slug to get that final piece in place. Um, yeah. So, that's a bit of a snapshot of the of the team. Yeah. And from the government's perspective, I understand you have the needed permits for production. what is the process for exploration permits and um and everything else and and and does having that team in place and that that local part of it does that help does that speed things up for you and yeah talk to me about that I think it's huge I think uh and not so much when you start with the expiration that's really what our team has been uh trained on for the better part of 20 years you know with 100 expiration licenses moving those through the various uh steps to get it to a mining license. Uh our team's excellent at that site. And then when it gets into the construction permits, that's where the MMC family comes into the mix. But fairly well prescribed system. You have up to 12 years uh with an expiration license uh term. Um fairly low cost in terms of annual payments and uh work commitments. Although that is an area that we agree should be uh inflated somewhat because it does result in companies coming in and just picking up properties and sitting on them without doing much work. Uh but nonetheless, lowc cost, fairly wellprescribed 12-year period of expiration. Um before you get to that 12-ear expiration date, you have to have registered a resource with the state to convert it to a mine license. And that process uh involves u public meetings. It involves uh work with the ministry of mining and department of environment. You have to do a DEIA study. So a fairly uh intense process of converting to a mining license perhaps not to the level let's say of a prefeasibility but uh more pea level with a DEIA and public meetings. And it, you know, typically I use kind of as a rule of thumb, it costs about a million dollars to move from expiration to mining. Once you have that mining license, however, you have uh up to 70 years of tenure. Uh and again, relatively low cost. I think, you know, for our license renewals on three mining licenses we have would range from 80 to $200,000 per year to renew. Um, and in many cases, again, something that probably should be changed in Mongolia, you can sit on those indefinitely and do no work. Uh, just basically report to the government that it's on economic at this time, but it's it's created a log jam of properties that could otherwise be worked. Um, but yeah, 12-year expiration, 70-year mining, uh, 10ear to u to secure your your lease. Well, on the topic of government in Mongolia, how's how's nationalization risk there? Is is that is that has that ever been a thing? Is it still a thing? How does that work? I think when you look back at the history of foreign companies in Mongolia, there's two things that stand out as as negatives in the history. And one is the um the Outo Togoy Rio Tinto negotiation stretched on longer than they should have. I think you could probably take both sides of the argument and take a position that both sides perhaps uh acted in a way that caused it to be drawn out longer than it was, but ultimately was resolved. And now you have what's about to be the fourth largest copper gold in the planet, copper gold mine on the planet in production, 15 billion spent by Rio. And uh that's worked out very well relative to other mega copper gold projects around the globe. The other one was uh back in I want to say 2009 10 thereabouts. Um Mongolia is very active in the uranium exploration space and a Canadian company um had done quite well. They were looking for suitors to come in and acquire them and they'd attracted Chinese and Russian uh investment interest. The project they had was dually held minority interest by Russian and Mongolian interest. And they publicly stated that they were going to sell this uranium asset to the Chinese uh Chinese company. And that was taken very poorly by the government just leading up to an election period. And shortly after that they nationalized the uranium exploration industry in Mongolia. Ultimately resulted in people having to give up their licenses. That company in particular I think won an arbitration award. ultimately. But I'd say those are the two um negative times that stand out when you talk about nationalization in the country. Other than that, when you look at, you know, now a multitude of public companies that have brought things public and private have brought things to production without any uh suggestion of any interference from the state. Um you have step gold and boru now with two gold mines in production. You have the Kerry Group that owns the Shangrila hotel chain with a gold mine in northwestern Mongolia. You have the Reuben Brothers out of the UK with a small gold mine in the same province we're in that's been operating for 10 years or so. So, you know, there's a there's a mid-tier to large tier of uh companies that are active uh on impacted by government uh other than the fact that they have a royalty on gold of 5% and a corporate tax rate of 25%. Um I would flag one other thing however and that is that the government back in 2007 designated a number of projects as strategic and if it's a strategic deposit they can own up to 34% of that which is the case with Ogoy um which uh was part of the investment agreement that was reached between Ivanho Rio and and the government that that list of 16 includes mostly old um historic Soviet period uh mines that most of which are not in production or perhaps even economic include coal mines, tungsten and things like that. Um the government has an interest in being involved in projects that have a material impact on the GDP of the country. It's defined in the law that if a project has uh over 5% of the GDP of the country um as annual revenues then that project could be deemed strategic. Doesn't necessarily mean it will be but it could be and that would give them the right to up to 34% interest. Um, in the case of um, you know, a project like ours, we'd have to be at current GDP or over a billion dollars of annual revenues to get into that framework. But that is an area that is out there. And uh, for let's call it mega projects in Mongolia, something you have to be cognizant of when you're looking at that investment. Well, because naturally when you start talking about Mongolia, people bring up Oo Tocoy and Rio Tinto's whole I don't want I don't know if you want to call it drama or whatever you want to call it, but it's been a lengthy process, whatever whatever you want to call it. Um, so so you're essentially you're saying that you don't fall within that range or or what what are you saying within that regard? Yeah. Well, that's right. I mean, in order to hit that threshold of strategic deposits, we're well below that in the scale. You'd have to be, let's call it a mega project, but a midsize project doesn't hit that threshold, right? Okay. What about is there a risk for a windfall tax though now that gold is much higher than than where it was when you first started doing the studies, which means you're going to make more money? Are they going to want a larger share? If anything, we've seen push back from parliament. I had a chance to meet with some of the parliamentarians during this last trip and uh gold has stayed quite stable between currently 5% but has been as low as 2% and actually during co they lifted the royalty on gold altogether partially because gold is not something that's just big company u throughout the country there's a number of artisanal miners there's small um u I guess business people that have gold mines throughout the country and so that's not something that we've seen interfered with and I don't expect to see any of that in the future in terms of that 5% royalty on gold. But in fact, they do have an outsized royalty on copper and a graduated royalty on some other commodities that parliament now recognizes is too high. And there's a move of foot by the current minister of mines to have that copper royalty drawn down. and that's expected to be put to parliament this fall as is um further solidifying the rules and regulations around those strategic deposits which are a little bit too loose. So there's some very positive moves of foot by the current my minister to um to make the environment more I guess stable more clear and uh preferential in the case of copper royalties for investors as a h how fixed is that if that makes sense like how quickly could it change is is it does it need like approval in parliament or like yeah how quickly could it change? It would need approvals in parliament. uh the proposal being put forward is more of an amendment to existing laws than actually a wholesale change of laws which could happen more rapidly. I would say you're looking at a year for that to go into parliament and get approved. Ideally, this fall session it could happen, but I'd expect it's more likely to drag on until the spring. Okay. Yeah. When's um when's the next election again? 2027 is the presidential election. That's right. Just to to I guess go back to another issue that's tied to the stakeholders and um and changes. You know, one of the things that we've seen that's been unfortunate in Mongolia is that although you pay a 5% royalty and a 30 or sorry 25% corporate income tax and there are supposed to be rules around how that flows back to the local community, we've rarely seen that. you know, a new mine starts up 100 kilometers from a subprovince and they don't see any benefits of that. So, that's created a bit of um a wedge between stakeholders and uh mining investors because they're not seeing the benefits. And that's something that, you know, we haven't seen the government move fast enough on and that's something we are trying to work on through a local cooperation with um with the local province in Sum. Uh we've invested roughly a million dollars a year over the last few years into those local communities largely as I mentioned earlier into health care and u and education but that's something we'll look to solidify even more uh and perhaps even increase as we move into the latter part of this year and hit commercial state. How's um corruption on the government level or in general in country? I think there's corruption well there's corruption everywhere. I've had the privilege of working in many jurisdictions around the world and you know my view in Mongolia is that it's there if you want to dip your toe in it but we've been able to survive without any uh of that. Um, I think at one point we might have had a mid-level tax person approach us uh to speed things up and we said no and it took a little bit more time, but I think, you know, we're well known as a company that plays above board and if you want to uh stay in that side of the of the checkerboard, then you can get things done in Mongolia and we've proven that. all of our licenses, expiration licenses converted to mining, uh, and now getting to a mine site, um, have been able to be handled without having to involve ourselves in corruption. But it's always it's always there. What about, uh, crime sort of from the perspective of, if you organized crime or or mafia when you think about, you know, countries that are that are close to Russia and stuff like that? What's the situation there? you know, one of the safest countries I've ever worked in. Uh, very little interference from organized crime groups, if any. Um, yeah, it's it's uh devoid of of that. I shouldn't say devoid because I'm sure it's out there to some extent, but not something we've experienced whatsoever. Yeah. Okay. Um, how anything China related? Because it's I just mentioned Russia, so it's close to Russia, but it's also close to China. How's the uh how's that, you know, international relationship there? It's been, you know, kind of a student of history here in terms of my involvement with Mongolia going from just as they came out of the socialist period where, you know, almost overnight a quarter of a million Russian service people, teachers, soldiers left the country within days. It was quite amazing. I wasn't there at the time, but I was certainly there right after and saw the the results of that. I I went to a town in northeastern Mongolia called Choan and there's these massive vacant apartment buildings that are sort of crumbling that uh were left overnight and uh you know the largest air base um military air base in the eastern part of the Soviet Union sat there unoccupied you know make fighter bunkers all over the place and just uh almost like a ghost town. So amazing how quickly that transition happened and it resulted in Mongolia being in destitution for the better part of three or four years. you know, bread lines, uh, almost post-war environment, um, for Mongolians, which I think led to a lot of, um, the entrepreneurs we see today, the adversity they faced really kind of resulted in a lot of today's most successful business people. But jumping to today and sort of that transition from a Russian influenced country to now Chinese influence um you know the Chinese business people have come in and struck good um you know transparent deals in the cases I've seen they have slowly over the last 10 years uh become more comfortable working in Mongolia because it wasn't the case. there was a completely closed door um between Russia and China up until probably the 70s 80s and that really didn't open in Mongolia until um the early 2000s. But today you have um a major zinc mine, you have oil and gas operations, you have Zjin who's come into a copper project in the south. Um you have a number of other midsized uh opportunities. You have them heavily involved in the coke and coal business, both building infrastructure and joint ventures. They're involved in the iron ore uh buildout. And if you look at the southern part of the country and you see this, you know, call it explosion of infrastructure because there was nothing there at all when I arrived in 1997, that's largely all been paid for by um Chinese enterprises to bring infrastructure into the southern part of the country. The Mongolian government's investing in their own rail and road now. In fact, black top highways have been built to every provincial center again that didn't exist when I first arrived. But China's there. Uh China's there in an economic way. Uh increasingly political dialogue between the two countries that again didn't exist previously. But um yeah, the lay of the land has shifted uh entirely to the south in the 20 years I've been there. Are there any obligations for you as to who you should partner with? And uh well I believe your your final production does go into the government. Are there any other obligations like that? Yeah. So no obligations. Um the gold dor that's sold into the state is gold sales in Mongol are incentivized to be sold to the state. So I mentioned the 5% royalty. That 5% royalty is only if it's sold uh domestically. If you were to export then you have a 10% NSR. Um and many people do look to uh to sell gold outside of the country if they produce a concentrate. For instance, Outo Togoy sells their copper concentrate concentrate heavily gold laden into China. There's a couple of others that are in the process of doing that and we would look to do that as well uh with Alton NAR. you can enter into investment agreements with the government and you can negotiate different uh rules, but for today's conversation, I'd say just expect that anybody that sells gold outside of the country, it's a 10% NSR as opposed to five. Um just to carry on on that conversation though, you know, we employ people in the China region today to look at relationships with uh Chinese companies in the future because we will need to sell a concentrate for Maltinar and we also will be planning to sell a malibdum copper concentrate or a malibdum and copper concentrate into the Chinese market. The infrastructure is being built up as we speak in that area and so we see a real opportunity to start to align with potential partners whether it's offtakes or direct partnerships in the future on some of our other projects. Do you have the liberty to make that as a business decision or would it have to be a political decision? Um, no. We have the liberty to make that as a business decision. That's not an unusual circumstance by any means amongst Mongolian or foreign invested companies. Um, Xanadu, which is Canadian and Australian listed, which recently went away because it was acquired by a company called Bastion, had already entered into a joint venture deal with Zjin. Uh, Zjin was, I believe, had a right to a 50% interest in their harmag type project. So there's many precedents for those uh types of relationships relationships to be unencumbered um from a Mongolian government perspective. So So when the government sort of you know buys your door essentially do are they going to be buying at its spot or is there an offtake agreement with predetermined prices? How does that work? Yeah, it's spot and actually we have the liberty to sell to Mongolian commercial banks too but it's effectively spot. I think there's there's some um minor charge but in the uh you know tens of dollars uh range on on the uh sale process. And that's all of your production. So there's no like hedging strategy in place then? No. Um we have and continue to regularly work with a group out of Australia named Noah's Rule. Um who we uh you know keep tabs on the hedging opportunities and puts and call opportunities. So, we're well educated on that front, but at this point, given what we believe are the fundamentals for gold moving forward, don't have a plan to use a hedging uh facility in the near future. Talk to me more about why that is. I mean, it it is probably or well, potentially it's it's the best idea to hedge exactly when you don't feel like hedging. Uh because that's when when the music often stops. So, why why do you not feel like hedging now? Well, I think you have to again coming back to the fundamentals. Um we as a board and our investors have a strong view as to the direction that gold price will take in the coming months and years. Um and we're willing to um I guess make a bet on that. That's uh that's why people have invested in us. uh the majority of our investors are heavily uh of the belief that gold price will continue to rise and um that's the fundamental reason for avoiding a hedging um position at this point. I wouldn't say that that's necessarily never going to change but at this point that's the position we've taken. Right. What are you budgeting for GNA going forward again as you're going to go into that commercial production? I mentioned it was 250 over the last reported 6 months but that ended in Q2. So potentially different. Yeah. What are you budgeting for, GNA? You know, I'd say we'll maintain that. We're pretty lean team here in Canada. Some of our people are also lended into the EM management. So that's part of our uh salary costs here in head office. But no, we'll maintain that. I'd say we will probably pick up our investor relations activities a little bit more than what we have done over the past year or two as we hit commercial production. So maybe, you know, maybe you add a few hundred,000 on that front, but largely our GNA cost should remain the same. Now, keeping in mind that, you know, we're a team of we're probably 10 employees between the office here in Halifax and our office in Mongolia, but that's separate from the subsidiary that maintains a head office of uh I think it's probably 35 or 40 people today in addition to the 350 people at MindsAT. is as I mentioned marketing was just about 10% of that budget. Do you plan on changing that? Do you want to increase uh marketing spend? Seems like you've been on a couple of podcasts here and there and again I mean there's been no spend for this video, but um I do know that you've been spending a little bit more marketing. Are you going to increase it now that there's a bull market? Yeah. No, we're doing that. I you know we'll take in a couple more conferences. Um we'll do a little bit more of these awareness type um interviews, podcasts. I think it's important to get the news out. I don't think, you know, we're not that well known entity and particularly as we've gone through this consolidation with uh interest in expanding our holdings or our shareholder base in the US uh and in Europe uh and Asia as well. We have plans to be in Switzerland uh next year as well as through Singapore and Hong Kong at various conferences. So yeah, there will be an increase. Like I say, you know, you're probably in that $250 $300,000 range that you'd see increase over the um over the year. Why though? I mean, why why do you have to go market if you think you can carry everything through cash flow? So, you don't foresee as you said earlier, you don't foresee issuing equity or anything like that. So, what's the, you know, you you want to develop the district, so it's not like you're chasing higher premium for potential takeover. So, yeah. What do you need marketing for? Yeah. Well, as a public company, it's a responsibility of me and an executive to ensure that we have reflected in our share price the maximum value or the full value that we should get for our company. Um, so it's always a question of, you know, our shareholders being rewarded for what we think we've created. So I think you always have to keep that awareness up and and as I say as we transition into a production company it's important that we have more institutional eyes on the prize than we might have been more focused on retail previously. So that's part of it. I think you can never underestimate or you can never suppose that you're not going to have somebody show up at your front door that's interested in offering to purchase the the company. Uh so obviously the best um defense of that or again to achieve maximum value is to make sure that our we are fully valued. Uh I don't think you can ever say that there's never going to be a financing in the future. If we were to find the best project available in the industry tomorrow and we had an opportunity to secure it, you may want to tap into equity markets and again you want to be in the best position for that. So there's a number of reasons to ensure that we have maximized value as it's reflected in the share price. I know you almost have to run here so I try to be more respectful of your time. There's a couple of um housekeeping questions that I had here. Um PA on the Molly stuff. When do you want to have that out by? So we will firstly have a resource update out in the next uh few weeks. um that has included remodeling and sort of reconsidering our development strategy and might actually lead us to some additional drilling at zun mod prior to finalizing a pea. So resource by early Q4 and we'll make a decision as we move through the next several weeks on whether or not we employ this additional drilling. Just trying to understand what that impact would look like and if we do that then we're probably into a Q1 mid Q1 late Q1 PA on Zoom mod. Right. Okay. um with inflation, everything that's happened between your uh final investment decision and your and right now essentially what do you think that's going to have done to the ASIC? So when I look at the ASIC, you know, it's it's um a great number at 869 in our feasibility study. But first off, there is a combined 6% royalty on gold. So we have 5% to the government and 1% to Sandstorm. So that 6% has uh inflated alongside gold price which probably moves us into the let's say mid9s uh when you add in that increased royalty. And then consider as well that our uh capital build was about 15% higher than we had estimated. So if we just use that as a rule of thumb to apply to all in sustaining costs, I think it's good to be thinking of something in that 1,00 range is probably a good benchmark for us to be aiming for as we move into steady state. And we really won't know until we get to that point as we get a quarter or so behind us. But I think as opposed to the 869 and the feasibility, think 1100 as a benchmark for today. Okay, that's fair. Um what do you think? Um let's see. No, actually we covered that already. Um yeah, I think I've been through most of the um most of the questions that I have on here and uh just looking at some of the additional notes that I had taken here. Um yeah, and we've been through that as well. What do you think is the most criticism of Erdine right now when you talk to investors? Uh what's the thing that they push back on the most? Um, you know, it's changed recently because, you know, it's it was what are you crazy? You're going to go build a gold mine. You know, in our business, you're not supposed to do that. Uh, in most cases as a junior explorer. So, you know, that's behind us. I'd say Mongolia and I, you know, I've explained to you my view of the jurisdiction, but I'd say it's the unknowns. you know, there's so few companies that are active in the space that are out there talking about Mongolia, pros andor cons that there's uh just a lack of knowledge and lack of knowledge leads to people just making a decision that, you know, I'm not going to go to a place I don't understand. So, that's probably the criticism is um it's not a criticism as much as an avoidance because of a lack of knowledge. Right. That's I suppose that's fair. Um, and and those are things that little things that you're touching upon there that I I would like to follow up on potentially in a in a future interview here. Uh, Peter, but it's been a good first time of you for for people listening and watching. If I'm forgetting to ask something, which I'm sure I am, it is a large story. Do let me know what I forgotten to ask and what else I I should ask during our next conversation. Peter, what about yourself? What do you think I'm forgetting to ask? What did you come here hoping to talk about that I failed to bring up? That was that was quite uh wholesome, Antonia. I appreciated the opportunity to expand on a number of things that I don't often get the chance to do. I think um you know when I look at what we've built here, it really is about building that foundation so we can get to what I think is going to be a very unique opportunity to build out a new district and it takes time and there are risks as we've explored, but I truly believe there's a multimine opportunity in front of us here in southwestern Mongolia. Well, thank you so much for your time, Peter. I really appreciate you sitting down with me and hopefully speak to you again soon. Thank you, sir. 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New Gold Mine in Mongolia | Erdene Resource Development CEO Interview
Summary
Transcript
Today on the CEO barbecue, we're looking for gold in Mongolia together with Erdine Resources. If you want a bullet point summary of this and all the other CEO barbecues in your inbox once a week, go to resource.com and subscribe to our free newsletter. Now, although the company you're about to hear from has not paid us for the production of this interview, you should still not treat this video as research. Research is conducted by reading the company's official filings which you can find on setterplus.ca. In any case, please only watch this if you absolutely know what you're doing. This interview is intended only for experienced junior mining speculators because mineral exploration, development, and mining is an extremely tough business where failure is the norm and should be the expectation. This is going to be a conversation that is general and impersonal in nature and it is also going to contain forwardlooking statements. I am not a licensed financial adviser and my business sells content producing services which also makes me biased. Although this company has not paid for the production of this interview, it doesn't mean they won't become a client in the future. They might. So before continuing on, please talk to an independent investment advisor with a good long-term track record because your capital might be at risk. If you're not 100% sure you understand 100% of the disclaimers I just showed you, please go to the last section of this video and do not consume this content unless you fully understand and agree with everything said therein. That all said, Erdine is listed as ERD on the TSX mainboard exchange where the average 3mon volume is about 75,000 shares. Now, the company just went through a 6 for one share consolidation which was completed at the end of August. So, do keep that in mind as I'm going through these numbers here. But taking that into account, the stock's 52- week high is now $8.68 and 52-we low is $3. With a market cap of slightly under 500 million Canadian dollars and just over 61 million shares outstanding post roll back today, this is an $8.7 stock with a 50 and a 200 day moving average at respectively 6.48 and 5.08, 08, which means that the stock is now trading well above both of them. Moving on to the share structure, insiders here are noted as owning about 7% of the company, while the biggest individual shareholder is Eric Sprat. He's noted at 20% as of the latest presentation. 30% is in the hands of institutional investors and family offices. 8% in the hands of EBRD which is the European Bank for Reconstruction Development and the rest so that's about a third of the company is in the hands of retail investors including some local ownership by Mongolian shareholders. Post roll back there are now 3.5 million options outstanding and about a million and a half DSUs for a total of now 66.2 2 million fully diluted shares. Meaning an increase of about 8 and a half% in shares outstanding could happen if all dilutive securities get exercised, which would then result in just under 8% ownership dilution if, and that's always a big if, but if all dilutive securities get exercised. And of course, none of this accounts for potential dilution down the road, which is not unlikely given that Erdine operates in what is a very capital intensive industry. But hopefully more about financing strategies later on in the conversation. Talking about capital, I'll now go through their latest financial statement which shows me the numbers as of June 30, 2025. And again, do keep that in mind that this was in the last leg of development of their uh mine, but they weren't they weren't pouring gold at the time. It was not commercial production either. So these numbers will have changed. At the time though, the company had in total about 6.5 million Canadian dollars in current assets, mostly in the form of cash and cash equivalents to the tune of $5.8 $8 million with some receivables and some prepaid expenses. On top of that, they also had uh at the end of Q2, they had about $31 million US of undrawn liquidity, which they said that they will be using to achieve commercial production, which is targeted by the end of this year. In terms of liabilities, the current liability side of the balance sheet had about $1.1 million on it. And there was no long-term debt outside of a $76,000 lease liability, which may sound a bit strange on first glance because they just, you know, built the mine and they sure didn't do it without spending any money, but the debt here is actually it sits at the associate company level. So, it's technically off ERD's balance sheet, but it's still there. And as of June 30, that liability showed as $145.4 4 million in non-current and 13.3 in current liabilities. So that's about $160 million of total debt. The plans for which will also be discussed later on um in a conversation. As a bit of a background on that, the financing was actually an $80 million U that's US dollars. Um it's uh it's a 5-year shareholder loan from Mongolia Mining Corp. carrying an almost 14% bullet as well as a $50 million US TDB 24-month working capital facility which carries almost the same rate but 13.3% so a bit lower of an interest rate and u moving on from here on out to the P&L for the 6 months that ended on June 30 again no commercial production for Ardine yet so the um the operational P&L is really mostly L the total amount of which sat at $3.6 $6 million split in about a 60/40 fashion between GNA and exploration activity. So there was $2.15 million went toward GNA for that 6-month period. Although this does include almost $700,000 of sharebased compensation, which is of course a non-cash expense. So the actual out-of- pocket expense recorded for the period was about a million half dollars, which is give or take $250,000 a month on average. The largest chunk was on $800,000 spent on administrative services for that period. So that's about 55% of the total spend. While investor relations and marketing, they were just about $25,000 a month. So that's just under 10% of the overall spend. As the $1.5 million spent on exploration, that was mostly accounted for by employee compensation costs. Uh so this is where I normally provide the drilling to marketing ratio. But since there was no drilling for Ardan in that period, that's not going to work here. But the overall exploration to administration split is again but 60/40 in favor of administrative expenses. As always though, I'd like to remind you to be cautious. Your capital may be at risk. So you have to visit setterplus.ca and review the company's full financials and specifically pay attention to their fullear financials once those become available because expecting again commercial production by the end of this year. That might change a lot about the financial situation. Hopefully of course all of which will be discussed later today. Enough accounting for now though because uh I've got a brief overview of the company here and ultimately the story of Erdine is one of gold and gold production uh to be specific and and and gold production in southwest Mongolia to be even more specific. The main asset is called Bayan Kundi of which owns 50% of with Mongolia Mining Corp. owning the other 50%. So that's a company that was doing the loan as well as I mentioned earlier. Now, this is a high-grade open pit project with almost 2,000 TPD CIP circuit that's targeting 93% recoveries on what is a relatively small deposit with about half a million um ounces uh in resource at an average rate of 4 g per ton, which Erdin believes can result in about 87,000 ounces of gold production per year. And that's specifically for year two to five, which gives it about a 6-year reserve life with a $940 ASIC after initial capex of $115 million, which again, uh, most of which again has already been expensed, but more about that later on as well. Now, Erdene doesn't think that's where the story ends, though. So, hopefully Peter will be able to tell me why that is later on in the conversation. And of course, more about the risks of the jurisdiction, their plans for managing the bull market, the new exploration potential, their financing financing strategy, and much more later on in the conversation as well. But for this to actually become a conversation, I'll have to shut up already. And Peter, I'll give you the word here. But first of all, thank you so much for sitting down with me today. Thank you, Antonio. It's a pleasure to be here. Pleasure is mine. And since this is your first time on the barbecue, we'll have to go through the smell test first. But just before that, uh, when I started looking into Erdine, which is which is actually relatively recently, one of your guys reached out, I started thinking about with the bull market now kind of ramping up, you know, there's many new gold companies popping up left and right, most of which of course are are not at the least serious. And there's also older projects that get revamped and and people start doing more marketing and they're out there and just doing more, right? and and they present sort of this new potential opportunities often times opportunity for a discovery or opportunity to go from that dip in the lan curve um you know in the PA stage to production whereas again arrine as I mentioned has just gone into what just is about to go in into commercial production and if if we look at that lan curve that's where the real sort of problem start that's where the price kind of curls down right so why would I want to look at Erdine in this market versus something you know something else with or near-term, I guess, toric or or excitement. Mhm. Well, in fact, I think we're right at that point where we're coming up that Lison curve. We're we're beyond that trough. Um, you know, we've passed that high-risk period of permitting a plant, getting it built, finding the uh cash to to actually build that uh facility. So not only are we at a point in this high gold price environment to take advantage of coming into that production profile, but as a geologist, I have not seen the expiration upside that we have in front of us in the Bayundi district. So I think you really have the best of both worlds. You've got about to be stable state commercial production of a high-grade open pit gold mine, but the expiration upside is phenomenal as we'll get into. Well, it's you're you're trying to fight the Lan curve here essentially is what what you're telling me and I have heard that before. So, I do have a couple of questions about that which we'll hopefully get to. We'll be back to some of those things uh that you're talking about here later on. But for now, I want to I want to kind of kick it off with with what I call the smell test. And that includes starting off with the person running the company um which happens to be yourself. So, why do you think you're the right man for the job? And and have you made money for shareholders before? Well, thanks for that. I am a geologist that uh entered the business 38 years ago. Um fairly early on, began working internationally. Uh spent time in South America, largely in British Guyana, moved on to the Philippines and most of that work has been focused on uh gold and copper exploration. Um found myself in the mid 1990s having an opportunity to go to Mongolia when it first opened up to foreign investment. So I was a corporate development uh senior geologist working for a group out of Toronto called international pursuit and found myself leading what became the largest ever foreign invested regional exploration program in the country. This is 1997 to 1999. During that period uh with Mongolia just opening up for the first time, we attracted Bareric Gold as a joint venture partner and we mounted what became, as I said, the largest program ever employed in the country. We had 10 500,000 hectar licenses, 100 geologists uh made some discoveries of epiothermal gold in the northeast and it really provided me with a um probably the best training country 101 course you could get to understand a new jurisdiction and what I saw was very impressive largely that central Asian origenic belt that comes through the southern part of the country one of the world's most prolific that sat there unexplored at that time what you Jogoy hadn't been identified. Uh it started to emerge in the coming years. But I made a decision at that point as a as a relatively young geologist that this was an opportunity to focus on. I uh set out to um line up investors to support that that new enterprise. Unfortunately, it was impacted by what was the Asian financial crisis and some of the lowest commodity prices we'd seen um probably in the last 30 years. And it really kind of shut down the Mongolian opportunity. That that window had opened for about three years. But I stepped away from it. Uh very impressed, put together a group of private investors that launched our dean in 2002. And since 2004, we have been the most active regional explorer in the country. We've uh assessed over 3,000 prospects. We've had 100 expiration licenses and converted three of those to mining licenses. And you know when you talk about who's the right person to run this country c company company um we've proven our ability to explore find and bring to production now uh gold mines in in this country. I would qualify the last part of that with we recognized a deficiency in our experience in at the point we decided that this was a project we wanted to move to production and we set out to find a partner who could complement what we lacked which was the operation skills, the construction skills and we'll get into that in more detail but um yeah we're we're a company that has more experience than any other western invested uh company active in Mongolia. We've proven we can do what we need to to get uh from grassroots exploration to production. Do you currently hold any other executive or board positions with other companies? No, I'm 100% focused on her, Dean. Okay. Insider ownership Peter is noted at 7%. What percentage of that is you personally? Uh so between my shares and DSUs, I would hold approximately 1%. Okay. What's the average cost of those uh shares that you mentioned there that you've paid for it? Probably in the mid30 cent range preconolidation. I have to do the math now since this consolidation. Six to 180. Yeah, because it was 630. Yeah, 180. So 180 something like that. If I'm uh this is actually surprisingly fast for me. Like I would normally stutter at that at that math maybe even almost faint. But uh yeah, so I've paid I think I've invested close to a million of my own money into the company's shares through both purchases, private placements, exercise of options and the DSU portion of my holdings. Uh much of that is taken through reduced salary, cash salary and applied to taking DSUs as an alternative. Well to to someone like me a million bucks is a lot of money. Is it a lot of money to you? Is this a significant investment within your personal portfolio? Yeah, this would be my primary investment. Okay. Well, now that we finally seem to be in a bull market and and you seem bullish in the story, you said you want to again fight the Landon curve there. Um hopefully defeat it, but as you put it at the beginning, do you plan to be in the open market and and buying some erd stock and and especially interesting to me here because of the size of the company? I oftenimes interview much smaller companies. So, how is that for you? Is that something you you you do as as yourself as a CEO but also as a group as you know management and directors? Is that something that still happens and is incentivized? Personally um I would say with the option exercise opportunities in front of us most of the investments will come through that direction. Um and there may be some open market buying but more likely through investments through option exercise. Talk to me a little bit more about the board here that I just mentioned. It's always something that's not discussed enough out there in my opinion, but with you, I see some Mongolian names in your management registry. Uh, none on your board. Uh, so do do any of them I I believe you reside in Mongolia, but do any any of the board members here reside in country or do you plan on making any changes to the board now that you're again hopefully soon moving into commercial production? I think in terms of having a Mongolian on the board, it's something we always look at. It's finding the right fit and what disciplines do we need at the board level when we have a vacancy. But I would just um I guess note that when you look at the makeup of our board, we have Canada's first ambassador to Mongolia who lived there for four years. We have our chairman who spent 20 years in Mongolia. And we have uh the former CEO of um Outo Togoy who I guess spent probably eight years in Mongolia. and I've been there for the better part of 28 years now with much of my time spent in country. So certainly a good understanding on the ground. Um but as I said I'd love to have a Mongolian person added to the board if we can find the right fit depending on the vacancies that come up. You live in Eastern Canada yourself if I'm not mistaken. I'm in Halifax Dartmouth Nova Scotia. That's right. Right. How long is a trip from there to I picked the furthest place away from Hellifax Dartmouth to go to to do my employment? Um, we spend anywhere from 24 to 40 hours traveling from here to there. Um, yeah. So, it's a it's a long journey. Do you fly what what do you do? Do you fly into Turkey and then through a do that? That's an option. So you know it's it's um Toronto, Estanbul uh direct on to Ulatar or more frequent frequently for us is Toronto soul soular. Yeah that's interesting. I just I I went to Kazakhstan myself this year to visit a project and I remember that for me you know coming out of Belgium much easier you know flying into um Istanbul and then directly to Austin it was actually an easy easy commute but I I um just wondering how it works from there. So yeah how how often do you do you actually visit and you said you're a lot there. Do you go every quarter or how does that work for you? I'm there at least every quarter. So usually a week or two every uh two months. Um I just spent the last almost four weeks there. Returned um about a week ago and I'll travel there again u around mid end of first week of October. uh you know we've been through a bit of a I guess I'd say a bit of a hiatus on what we're typically active on which is the expiration front and as we moved into the build we lessened the expenditures in that area but now as we move towards cash flow will pick that up and we'll get into that a little bit more so I expect my activity um which has been increased just to be there as we go through wet commissioning into first goal but now it'll pick up as well as I interact with the exploration teams not only on joint venture ground but we activity on our other two licenses as well. Do you plan to, you know, talking about who's the right person for this job? Do you plan on remaining CEO as the company goes into production? Yes, I um I see myself as remaining in CEO role for the next several years. Um but we're always looking to add to the team. But yeah, the short answer to that is is yes. um you know from a operating perspective the team that's sort of in the control seat has come over from the joint venture partners so my job will remain much of what I did previously which is to help guide the uh growth side of the business. Do any of the insiders or their related parties personally own a royalty on any of these projects? No. Okay. What I um I always like it when the answer to that question is is short and sweet like that uh because that is the right answer. What I'm really trying to understand though here Peter is what the real incentive is and and what's really driving insiders essentially is I believe incentive is one of the most important concepts in finance. So, so talk to me about um you mentioned those DSUs and everything, but talk to me about KPIs here and how you plan on incentivizing your your people during this next chapter of of Erdine and and both like what what are what are paychecks based on? What are what are benefits based on DSCUs and everything else? When you're looking at senior management team and into executives, each has their own well-defined um goals and objectives which we review annually and based on that there are uh performance bonuses that are issued and approved by the board that range from 30 to 60% of annual salary um depending on the performance be depending on hitting those KPIs. Um, in addition to that, I'll just add, and I think you mentioned earlier, there was a $1.1 million um, debt that sits out there at corporate level back in 2020 as COVID first hit. We put in place a uh, first gold bonus and that was largely driven because the company didn't have access to cash to actually cover salaries and people agreed to reduce salaries at the time. So there was sacrifice and at that time we put in place a one-time annual salary bonus for the five executive team members and that gets paid out once we hit I think it's 10 million in initial cash flow from the uh first goal production. So that's um the other incentive that sits out there but that's basically it. There's a annual performance bonus and then there's a first goal bonus that sits out there. When you say annual performance, is that based on new discoveries? Is it based on share price, market cap? Is it on production? Anything else operationally? What's that based on for for like for you and let's say the main the main guys and gals? Yeah. So mine would be partially weighted. There's I think five categories. There's quite a well prescribed um waiting that goes towards performance which might go from you know 10% on the safety side up to 30% for new discoveries. Uh in my case it would be uh well weighted towards getting to that uh operational uh milestone of commercial production. Um yeah so there's a number of wellprescribed sort of uh waitings within that index for key performance. This might actually be a good segue into talking specifically about the business plan or or your aspirations for Erdine here. Going back to what you talked about at the beginning there, I suppose, but do you see yourself as not yourself personally, but Erdine is as building out this production camp essentially over the years and remaining as the operators or are you looking for an exit sometime during this bull market? Mhm. You know, it's worthwhile to get into this relationship that we formed with MMC to answer that question. So, as I mentioned earlier, we are we've been very good at exploring, discovering, and bringing projects towards the uh production stage, but we're not we're not builders and we're not operators. So, I sought out a partner that could bring us that strength, which they've now proven they can do, and we'll continue to prove that as we move through to commercial production. But if you step back to 2019 when we made a decision to build by Hyundai, it was based on the fact that we believed we had discovered a significant new minerals district. It wasn't a one-off. We weren't looking to build a six-year mine life. We thought that we had the ability to do a multi-mine multicommodity district over perhaps decades. And in order to do that, we needed to bring in that partner that brought that strength, not just to build a mine, but to build out a district. And I can get into the wherewithal they have to do that, but my sort of overall business plan isn't that six-year mine life. It's to have that multi-mine opportunity brought to fruition for the benefit of our shareholders. And to look at us as whether or not we would be the operators of that, that's not really the case. We've joined forces with a group that brings the strengths on the operating and construction. Some of our people have moved over that line and they're part of that operating team, but we're still truly focused as their dean on what's next. Where do we add that expansion opportunity? Where do we add that second development? Uh what do we do with the zoom modum copper pfery? That 38 years in this business, I've worked in or visited most major mining jurisdictions and what we have out there is something quite unique. Let's maybe talk more specifically about those catalysts as to how how you achieve that though because again going back to fighting the Lan curve as I call it. Um that's kind of like eating an elephant and and the way you do it is is one bite at a time I suppose. Um you know I know I've said it a dozen times already and you touched upon it at the beginning and now as well but if we can put some rough estimates in terms of dates on on what your next few catalysts are. I understand again first uh commercial production is you know first pour just happened commercial production is coming soon hopefully um but yeah the other catalyst I mean you mentioned exploration and and so what do you do is it it you know permit by 3 months and the drill rigs there by you know 5 months from now so just examples like that what do you do yeah sure so you know first off the low hanging fruit is we have um let's say half a million ounces in that economic pit at buying Hyundai defined at $1,800 gold So already at this higher gold price, we have expansion opportunities just by pushing the envelope around that economic pit. And we've drilled some of those areas and had tremendous success particularly to the west and south of the pit. So as we speak, we're about to be mobilizing drill rigs out there to firm up that expansion opportunity in those areas. Uh I would suggest that in that area to the south and west there's another 150,000 ounces of target resource that won't be at the four grams but let's say in that two 2 1/2 g range that we can immediately start to bring into the reserve uh rapidly. You know there's no additional permits needed. We're on a mining license. We're just expanding the footprint. So that's first off and those drills will be turning soon on the Bay Hundai expansion. In addition to that, if you look to the north, we have the Darkhorse Discovery, which includes a a satellite pit um that we rushed into a reserve shortly after discovering it. Because it was so high-grade, it allowed us to improve the economics overall of that first 6 years. So there's 50,000 ounces of 7 g sitting at surface in a super gene zone, oxide zone that has not been explored along strike. Now, do I expect 7 g continuity? Uh probably not. But nonetheless, there's a kilometer and a half of uh oxide type material that follows that structure to the north and the northeast. So lowering fruit that we can quickly establish into the reserve on the mining license that we can also add into the mix for development in the future. The qualifying point to all this is that when we did the $1,800 gold uh pit, it was a cutoff of let's say 75. With the gold price where it is today, that cutoff drops down to let's say 35.4. So we find ourselves uh holding a whole lot more gold in that low grade category. And what do we do with it? We don't necessarily want to push our grade down uh in the initial years at this gold price, but we are now looking quite closely at a heap leech to complement the CIP plant. and that is going to be very applicable to the oxide material we have at Darkhorse and uh Alton Arrow which is just a continuation of it. So that's why there's some urgency in getting that work done now. And that's pretty much I wouldn't say it's a new opportunity, but it's changed dramatically in the last year with the gold price move and probably is the most rapid lowest cost uh complement the CIP plant if we can work out the technical uh well answer the technical questions around that. Get the drilling done. Do we have the volume? How does the metallergy uh work? We have done early work on heat bleach bottle roll tests. So feel pretty good about that. So those two areas provide us with potential extension and perhaps expansion. And then you know we come back to this because there's a whole lot in our pipeline but Alton Nar is our second project 16 km north a gold poly metallic that we'll start to move into more aggressively next year with cash flow and that has the potential to be another let's say 70 to 100,000 ounce per year producer but a gold in concentrate uh sold into the Chinese market as opposed to a gold dory. Uh, I can keep going there, Antonio, but uh, probably best to pause there. There's a couple of other projects outside of the alliance. What I've just described to you is in the 50-50 alliance, but I'll pause there for a minute. Well, I think outside of operations and and production here, the main unanswered question would be, is the extension potential real? Is it is it actually going to result in something tangible? How long before you can prove up an answer to that question where you're entirely sure? Um yeah, what's the timeline for having that answer? And I understand there's, you know, a million moving uh pieces that go into that, but how long before you have a definitive answer? You know, at these gold prices, I'm entirely confident today that our mine life is in excess of 10 years of the Bay gold mine. Um we will update our resources and reserves as we move into Q1 next year. um in terms of the heat bleach uh opportunity drilling that off and then Alton N those things will start to become more apparent as we move through mid 26 into mid 27 because there's not just the drilling then we'll move through the u sequence of studies because one of the benefits of being in production uh is that we don't necessarily have to go through all of the hoops of pea prefeasibility feasibility we need to prove to ourselves that it's economic and and move on and that's why the Bayern Hyundai and Darkhorse opportunities are so um I guess urgent in a way but we can move them very rapidly. You know if we were to prove to ourselves that we have let's say 100,000 ounces of lowgrade material that's amanable to heat bleach then let's start moving it let's start getting that uh constructed we'll have the cash flow to do that. Um and the same for the expansion of the mine site. drilling those areas to the south and west doesn't necessarily mean we're going to move immediately into those areas but it's good to have that knowledge so we can juggle best uh mine schedule and optimize the economics of the mine what is very rapidly in this case I mean essentially you run out of ore according to this plan you run out of war in six years is it realistic to expect that you've you've completed that plan within that six year period or is it something that you expect within 3 years or does it take longer Yeah. So, as I say, I'm completely confident today, assuming these gold prices hold up where they are, that we have um in excess of 10 years from the Bay Hundai complex and the Darkhor satellite pit. Now, the grades will drop off as we move past that year six, but I'm confident that's in place. We will do some additional drilling and that will be added to the updated resource that you'll see as we move through Q1 and an updated reserve. So that timeline, let's say, you know, to answer your question, let's say that's eight months that we have in the public domain an updated uh mine plan and reserve that that satisfies that time. Um the other two, you know, I think there's they're a bit open-ended. So on the heat bleach side, we will do the necessary drilling this year to establish uh the continuity of those zones. Assuming on our first scoping of the potential there and the first heat bleach tests are uh are positive, then we would look to firm up the reserve next year and ideally complete technical studies uh to have our own internal feasibility done by the end of 26 so we can make a decision on a heat bleach build timeline. It took us 22 minute to 22 minutes. I wish it was 22 minutes. 22 months to build the um the Bayern Hyundai CIP plant. Heap leach should be significantly quicker. We have much of the um permits in place, infrastructure in place. So let's say it's 14 months to get a heap leach facility uh built. So then you're into early 28 would be the timeline for that. Um Alton NAR is a bit longer term. I'd say it will take us two years to go through drilling studies, permitting. um that is a mining license, but it's not at the level of permits obviously that buying Hundy is. And then um use the 22 months uh just to be conservative on that side. So four years out, you're into uh 2029, 2030 to be adding that second complex at uh at Alton. That first phase though that you talked about that that could happen relatively quickly. You mentioned something under one year. How much is all that going to cost? How much money did you need to make it happen? Uh, it's pretty limited. I mean, we have 10,000 mters of drilling uh this year. Our drilling costs are in the60 US range all in. Um, with that work behind us, we can upgrade what is currently a resource into a reserve. Um, so yeah, there's not uh what are we talking here? Maybe, you know, a few million dollars of expenditures to get that resource up. There's no metallurgical work to do. There's nothing else that needs to be done. Maybe a bit of geotechnical drilling, but effectively that's also been done to some extent along the west side of the pit. So that's truly lowhanging fruit to move that into the into the mix. How much cash do you have right now? So in the subsidiary there is remaining 20 million ondrawn in the working capital loan which was a total of 130. Um, we expect to be in cash flow fairly rapidly. Well, in fact, I guess you could say we are because we've uh sold our first gold bar. That was on the smallest side. But um I think, you know, as of today, just after a week or so, we have um 12 kg of gold loaded on our carbon. So, we expect to start to hit some pretty good cash flow here quickly, which will start to fund the expiration. So all of that expiration I've talked to you about is funded by the subsidiary. Cash in parent co is about 5 million but that's largely unallocated with uh with some work expected on our other two projects that I can come back to. So what essentially you think you may not have to raise capital again to to complete that plan and and you can do that all from cash flow. How do you see that? Yeah, we have no needs within the subsidiary, within the gold project family, if you will, to source additional cash. If there's any additional cash required in the future, it's for expansion of projects outside of that alliance that are hold direct held directly 100% by your team. Well, what about the um MCM debt here? What uh or wait Mongol? So, MMC um what? Yeah, what about that debt? I mean, they I believe it's to get a bullet loan. carrying some balloon risk there if you will if I'm not mistaken. So how do you take care of that and and is there a refinancing plan in place or how do how does that get taken care of? So the total debt the two uh packages of debt are the 80 million that was made available as a shareholder loan from MMC and the 50 million from TDB. The 50 million was fully drawn and the t the MMC loan uh 20 million remains onrawn and that's the way we'd like it to remain. So that leaves us with a total uh debt of 110 uh with interest being capitalized that probably gets us into the 118 119 range today. Uh our intent is to pay that back as rapidly as we can beginning now. Um the only exception to that will be to keep some retained earnings in the company um as a buffer and also to begin to fund expiration. So, the expiration spend will begin to ratchet up this year. We haven't finalized our budget uh update, but over 2 million Canadian will be spent on drilling in the areas I just mentioned as we move through the latter part of this year. And I think we've dedicated close to 10 million uh next year. It was 6.7 million US is allocated for drilling and technical studies next year. Um so that gets funded directly by the cash flow. you know, the cash flow at 85,000 ounces per year at these gold prices is um quite substantial and uh so there's not a shortage of funding available assuming we can get up steady state to commercial production. Mhm. What So what percentage would go toward paying back that debt versus you keeping it for exploration in that case? 90%. Oh, okay. How quick So how quickly would you be able to have paid that debt off? uh 16 months. Okay. Well, why I'm asking is this because I'm go where I'm going with this is just thinking of um a distribution of sorts. So, a dividend or something like that when or um you know or a buyback. Is that something you want to do and if you do when do you see that happening? Yeah. So, I think the first uh question well this the timing for this will come up as we move towards mid next year. um additional developments that I talked about uh whether it's heap leachch andor altonar or expansion at the buying hyundai site could potentially draw some of that money back before we look to distribute to shareholders but that distribution will take place likely as we move into next uh late next year so MMC and erd will receive 50/50 split on the excess uh cash proceeds and that would be provided back to parent co and Canada from which we would make a decision on how to distribute that to shareholders, whether it's through a share buyback um or through uh dividends. I'll be back on track in a minute here, Peter, but I'm just reminded because you mentioned that 50/50 split there. I and and I wasn't following the company when you did the initial deal. It was almost 3 years ago now, I believe, but uh two and a half. Uh but some shareholders were unhappy with the structure of the deal and and and the portion of the the I suppose upside that you were giving away. So looking back at that deal now as well as the overall partnership with MMC, would you do it again? Yeah, absolutely. You know, it's a lot easier to say that now than it might have been to have those discussions with shareholders at the time. But, you know, to put yourself back in that position in 2019 to 2021, 2022, it was very near impossible for companies in our stage of life to go out there and raise money without diluting shareholders down well below what we gave up in this 50% interest of our subsidiary company. Um, so to be able to look back on that and recognize that not only did it get us to that objective we wanted to, it did it ultimately with less dilution than we would have incurred otherwise, but it brought us a partner that enabled us to do this faster and more efficiently and closer to budget than likely anybody else in the world could have done for us. We brought in Western companies, uh, some of the top gold mining companies in the world and I don't believe it would have made a difference. certainly wouldn't have been able to do do what we've just done with this partner. Uh I'll I'll expand on that a little bit. You know, when we selected MMC and they selected us as as partners for this enterprise, they had made a decision that they wanted to diversify away from coke and coal into gold and copper. We both had known each other for a decade. So there was an understanding between the two of how we did business. So that was that was good and somewhat unique um for that area to have a company that familiar with western business practices. But importantly, they're controlled by a company called MCS, which is one of Mongolia's largest business conglomerate. And when I look back on wanting to build out a district, they bring sister companies that are the leading mine construction company in the country, the leading power transmission power plant construction company. They're into logistics. They ship back and forth across the border regularly. We've just built a 240 km power line to China to access power. Couldn't have even thought about that. No other company that we would have done business with could have done that. Um so the intangibles or the side value that was brought to this enterprise is uh extremely high. Uh so yeah, I look back on it and and I'm very happy we made that decision at that time. It is an interesting relationship though because they hold they hold your debt. They're a partner at the project level and they also hold equity if I'm not mistaken. How do you how do you I mean that's it's it opens potential I'm not saying that it is but it opens potential for conflicts of interest there. Uh how do you how do you manage that situation? So they don't own own any equity in the parent company. uh when we selected MMC as the senior debt provider, we had other options. We were in discussions with European Bank, who's one of our shareholders with Export Development Canada, and we supported that route because it was faster, more efficient, and at the end of the day, probably about the same price as it would have been to take on the development bank money. So, yeah, that was a decision made jointly uh to secure that that debt from MMC. um they're very uh strict in terms of their uh conflicts of interest given they're listed on the Hong Kong stock exchange. Much more strict in terms of reporting than uh you'll see with the TSX reporting. So all conflicted party transactions have to go through uh fairly rigorous review including the fact that we have two members of the board of the subsidiary both the CEO and the chief development officer who have to review these things. So we have uh input there's unonymity required at the EM level both from the executive and the board side. So I feel quite comfortable with that relationship. Yes, there's potential conflicts, but um but I think we've covered those off in some of the things I've just mentioned. Well, I promised I'll be back on track, so I'll try to get back on track there. Now, what do you think are the main risks for the company between now and having completed that plan where where you have proved up that the LOM is is longer than what you have right now? Well, I think the risk for a company at our stage is always in that startup phase. you know, things are going well. I I'm very impressed we're able to achieve first gold as we said we would by late Q3, but you know, like any of these startups, it's the known unknowns. You know, there's there's going to be tweaks and there's going to be things that need to be adjusted as we move through the next few months. And uh hopefully none of those are significant, but I think you have to realize that it's still the growing pains of going through an initial startup. Um so getting to that commercial stage and when we get to that commercial stage is probably the first uh risk. I think when you look at the uh local uh political and local relationship side you know one of the benefits we have of working with a company that is recognized as one of the most credible uh enterprises in the country. They employ 10,000 people. We now employ I guess 350 people at the mine site. It's peaked at 700. and the benefits of that starting to bring improved livelihoods into the local jurisdictions um help our situation in terms of local support. But I I flag that as it's a constant education. You know, it's important for us to be out there ensuring that people understand what we're doing and sharing those benefits. And to that extent, I think you flagged this at the outset. One of the things we did back in 2017 was helped the federal regulatory agency in the Mongolian stock exchange rewrite their rules so we could become a dualistic company so that today we're the only dualistic company with 7,000 Mongolian shareholders including everyone that lives within about a 100 km radius of our site has uh shares in the company. So we've taken steps to try to mitigate what could be uh risks from the from the stakeholder side. But I come back to I guess the first thing is just getting that planned up and uh ticking along at near name plate which will take place over the next few months and then there is expiration risk. You know there's new permits that we'll need as we move through startup. Um so there's there's other things that are just normal course of business. What what about and I do want to get to the jurisdiction there in in in a couple of minutes here but what about operationally something like uh the strip ratio for example attracted my attention off the bat. It was it's almost 11 to1 here. Uh you know pit ball angles are great or recovery. Is there something else that you still I guess lose sleep about or or at least wonder about? Mhm. Yeah. Well, when you look at that uh I guess the the pit itself at at 4 g per ton can have a lot of forgiveness in terms of strip ratio and that's why you can drive it so deep at that uh at that grade. um that strip ratio actually drops somewhat significantly with the decrease in uh cutoff grade at the higher gold price. So the 11:1 is that $1,800 gold. So that probably drops down to 7:1 albeit we're stockpiling much of that material. It becomes economic and was waste. Um you know it's a fairly dry pit. It's it's a solicious rock. So your your pit's quite stable. The um the blending of that is something that will be as much art as it is science as we move into keeping that 4 gram head stable. Um the plant you know again this is a very uh clean ore. It's almost completely devoid of sulfides has great recoveries in the 93 to 95% range. I think as you move to the back end of this plant and we're doing a dry stack tails for the first time in Mongolia. So we have filter presses that are um having that waste taken and stored in a dry stack tails facility about half a kilometer to the east. That um will be interesting to see how we deal with that as we move into the minus 20 temperatures in Mongolia. Um you know ideally you're smoothing out that wet filter cake material and then enclosing it with waste rock. Um so winter conditions will be um I'm sure full of its challenges and learning curves in Mongolia. Um, so that's probably one of the things that I think about as we move through this ramp up. The other one is small population, limited labor pool, increasing competition for the best of the best in the mining business. You've got Rio Tinto over there with I think 8,000 employees who uh are probably the highest salary uh provider in the country. uh you have a multitude of new startups mainly in the gold space who are also drawing people in. So it's a competition out there to maintain a high quality workforce of 350 400 people. Um so that's the other one. I'd say winter weather and labor uh are probably two of the big ones. That's um labor is something that I wanted to uh touch upon as well. What about the uh what about competition? Are there no outer exploration companies operating in in the region or what does that look like for you? Competition? Yeah. Is that Yeah. Um so one of the limitations of Mongolia's growth in the mining business has been their inability to get their licensing system on track. when I was there, I guess from maybe 97 right through until 2010, 2009, they had uh map staking and everything was pretty much wide open. Uh it was probably too wide open and they due to some aggressive speculation that was happening and uh I guess I call it middlemen coming in and picking up licenses without doing any work. They closed that system. They didn't issue any new licenses under that system and they opened up a tender process and that tender process has kind of gone in fits and spurts uh up until now. But what it's effectively done is really shut down the ability to get good quality large licenses and it's limited the competition. Um there's a couple of licenses uh adjacent to us that are interesting held by um one in one case publicly listed company but there's a very large area in our Hyundai Minerals district that remains um closed which the government has indicated they plan to open to staking but a long answer to the competition is limited because of the lack of product. This is also typically a question that I ask when I see stuff like that is why has this not, you know, the discoveries that you're after. Why hasn't anybody discovered them before you and developed them already? And and I suppose it's it's a similar answer relative to to the government framework that was in place before you got in. You know, it's interesting and I think it's a bit more than that in that this is the least densely populated region in Mongolia given the geographic location a thousand kilometers from the capital city, lack of infrastructure up until now, um poor climate conditions for herdsmen to have um a herd in the area. Um proximity to China, which was really not something that was open up until 20 years ago. So for a number of reasons the area that we are focused on had not previously seen any modern exploration. We mounted a regional program there in 2009. Explored with satellite imagery and followed it up with um geochemical stream sediment surveys, boot and hammer and spent 6 million a pure grassroots exploration 2009 2010 with nobody else in this area and discovered Alton NAR which was the first gold discovery in that district. You know, our first hole from surface, I think, was 23 m of of 2 g. And the first discovery at Bayern Hyundai 5 years later was we picked up 4,000 g samples at surface. Our first hole was 7 m of almost an ounce of gold starting a few meters from surface. So really just uh right place, right time, unexplored, great belt. And um yeah, we were the first, you know, people say they're first movers. This is truly not just maybe first modern geology, but first people to walk across some of these areas because everybody can notice uh 4,000 g samples. I mean, some of these samples are just spectacular at surface. We drilled a hole within 10 meters of surface that we just announced uh I guess about five or six weeks ago that was 2.4 kilograms of gold. Uh so just spectacularly rich and a testament to these these are areas that nobody's walked across before. H how are the community relationships up there? Now you can talk to me more about that specifically. I know you mentioned it and and employees and everything, but who are you? How does that work? Like let's say in Canada you have First Nations, you got to get their approval. How does that work for you in terms of access uh rights to the ground and so on? Yeah. So, you know, as I mentioned, we're in one of the least densely populated places in the country. So very rare for us to see any inhabitants in the vicinity of our mine. The nearest um town is 110 km north place called Shinjzhinst and it uh it provides in the winter dormitories and schools for the herdsmen in the area to come in and uh and bring their kids to school and I guess it blows up to about close to 2,000 people uh over the winter months and maybe half of that during the summer as herdsmen spread out. So that's the area we focused our attention on in terms of improved livelihoods uh improved facilities really focused on health and education in that area. But importantly when we began to look to staff our mine and this goes back you know probably a year and a half ago we quickly identified and and asked people to provide their interest in in long-term employment at the site. And we because of our relationship with MMC were able to identify 160 people in the province and put them into a training program at the UHG mine of our partner and for a year and a half they had salaried uh training and they've now been brought back. I think we have 110 of that initial 160 that are our heavy equipment operators on site and that's paid great dividends in terms of just demonstrating right out of the gate to a large number and you can imagine the spin-offs of 100 people in a small community like that to have well-paying long-term jobs. So that's really helped. I think um there's always uncertainty when you go into a new area in terms of lack of understanding of the mining industry uh what impacts this mine will have and you know the best way to satisfy that curiosity or or provide that education is to get people in your enterprise and have them be able to talk to their families and friends about that experience. And that's what's we've had the luxury of doing. Going back to that partnership with MMC, another one of those intangibles that's paid dividends. Um, you know, I think importantly there's a a very um amazing culture and history in this country and in the area that we're working and it's important that we do everything we can to protect that. And when I talk about the herdsman, there's always going to be some that want nothing to do with mining and we have to be respectful of that and find uh ways to prove to the community this is a win-win. we can still find ways for the the hurting uh culture and community to um to be able to recognize we can have a win-win in this situation. When you do get some push back from the community, what is it based on? Is it are you affecting any agriculture or is is water a touchy subject and and what's that situation? So, you know, if you were to visit this location and much of Mongolia, you wouldn't imagine that there's any um livestock that survives off of the what you wouldn't even recognize as as feed. But, uh almost every square inch of this country has some um animal, sheep, goat uh that that visit it. There's 90 million livestock in a country of three million people. There are boats. Um, so their largest concerns of those herdsmen that may wander through that area or those flocks is dust and water. And that's really what it comes down to when there's legitimate concerns. Is is my water going to be impacted? Is it going to be uh is there effluent questions? Is there draw down question and dust? You know, um don't make any new roads. So, it's really those simple things that are legitimate concerns. I think um there's always those that look for, you know, commercial or political angles. Uh election time in Mongolia can always prove to be a more heated period for um mining companies. Uh so those things sort of filter in and out depending on seasonality of election periods. But when it comes to real legitimate concerns for those impacted locally, it's uh water and dust. H. So, how does that sit for you or the LOM or if you if you are successful in that plan and you add more ounces, you might need more water. Um, how does that look like in terms of permitting and everything else? Yeah. So, we're um we're actually recovering about I think it's 84% of our water going back to the dry stack tails. Our water consumption is uh about 6 L per second. So quite low for for this plant. We have identified um well in excess of that through a series of connected bore fields that use fracture uh related aquifers and those are all within sort of a 5 kilometer radius of the site. So in terms of today and in terms of expansion say double the size of what we have today we uh feel comfortable that um that volumes available to us. But in the case of Alton Nar and in the case of uh Zun Mod, we've gone ahead and spent considerable sums on exploring large aquifers further from the mine sites. But if you look at Zun Mod for instance, if we were to consider that, you know, that's 40 times the scale of a Bayern Hyundai and obviously, you know, 40 times or more the water consumption. So we've invested, I think, um just over a million US in identifying a bore field there. 30 kilometers to the north. Uh so we're ahead of the game in terms of making sure you can provide that. The issue is one that's technical in terms of identifying it, making sure you can pipe it to site, but you still have to go through that education and that discussion and negotiation with the local in our case called AIMAG, which is province and soon, which is the subprovince centers. And there's a lot of work, a lot of community effort that still has to go under the um has to be completed to advance those other projects. I think you know what we have at Bayern Hyundai with Darkhoran and that entire area there that gives us that next 10 years plus those issues are already uh behind us but they will come with other projects in the future. Talk to me more about skilled labor here and and how much you're having to train u your your primary staff. You said you what did you say 350 people uh from from the locals you've employed so far? I think I heard or saw talk of 500 at a certain point. So yeah, talk to me more about that. How many people do you need? Who's going to be local? How much you have to train them? Just everything there. Sure. Yeah, we um we peaked at over 700 personnel. That was during the construction period and that was an EPC contract. So that uh body of uh labor was provided by MCSP and we are keeping some of those people employed kind of their top engineers, pipe fitters, electricians as we move through the commissioning but that'll continue to Wayne and we'll continue to upgrade our uh workforce in that 350 probably closer to 400 uh persons. Um, Mongolia has a legislated two week two two weeks on and two week off. Um, which you know we get to as we get the name plate. Um, so typically you'll see a couple hundred people in our accommodation village at any given time. Um, starting at the top uh, Erdine and MMC have contributed two people to the uh, executive. So we've provided the CEO and the chief development officer and they have the chief operating officer and the CFO and those two those four form the executive. Underneath that we have the general managers that have largely come over from the MMC group. So when you look at MMC they employed 2,000 people in two large coke and coal facilities, a wash plant and power plant in eastern Mongolia. Uh many of those people that we brought over had previous experience on gold mines in the country. There's u a large one previously run by Centara that um was called is called Boru and then another one that our partners affiliated with in the northeast called Bioneric. So we've been able luckily to bring in skill sets that have uh mining experience in some cases gold process and gold mining experience and the core of that team uh was brought over to form the general management team underneath that you know into the next level of uh management into the heavy duty equipment process operators. We've we've sourced those from other places around the country. Uh I think we're probably at about 80% of those positions now filled. So, we're getting there, but as I said, it gets harder with the limited labor pool in Mongolia to fill that remaining 20%. So, we have a workforce that's capable of doing the operating now, but it's still a slug to get that final piece in place. Um, yeah. So, that's a bit of a snapshot of the of the team. Yeah. And from the government's perspective, I understand you have the needed permits for production. what is the process for exploration permits and um and everything else and and and does having that team in place and that that local part of it does that help does that speed things up for you and yeah talk to me about that I think it's huge I think uh and not so much when you start with the expiration that's really what our team has been uh trained on for the better part of 20 years you know with 100 expiration licenses moving those through the various uh steps to get it to a mining license. Uh our team's excellent at that site. And then when it gets into the construction permits, that's where the MMC family comes into the mix. But fairly well prescribed system. You have up to 12 years uh with an expiration license uh term. Um fairly low cost in terms of annual payments and uh work commitments. Although that is an area that we agree should be uh inflated somewhat because it does result in companies coming in and just picking up properties and sitting on them without doing much work. Uh but nonetheless, lowc cost, fairly wellprescribed 12-year period of expiration. Um before you get to that 12-ear expiration date, you have to have registered a resource with the state to convert it to a mine license. And that process uh involves u public meetings. It involves uh work with the ministry of mining and department of environment. You have to do a DEIA study. So a fairly uh intense process of converting to a mining license perhaps not to the level let's say of a prefeasibility but uh more pea level with a DEIA and public meetings. And it, you know, typically I use kind of as a rule of thumb, it costs about a million dollars to move from expiration to mining. Once you have that mining license, however, you have uh up to 70 years of tenure. Uh and again, relatively low cost. I think, you know, for our license renewals on three mining licenses we have would range from 80 to $200,000 per year to renew. Um, and in many cases, again, something that probably should be changed in Mongolia, you can sit on those indefinitely and do no work. Uh, just basically report to the government that it's on economic at this time, but it's it's created a log jam of properties that could otherwise be worked. Um, but yeah, 12-year expiration, 70-year mining, uh, 10ear to u to secure your your lease. Well, on the topic of government in Mongolia, how's how's nationalization risk there? Is is that is that has that ever been a thing? Is it still a thing? How does that work? I think when you look back at the history of foreign companies in Mongolia, there's two things that stand out as as negatives in the history. And one is the um the Outo Togoy Rio Tinto negotiation stretched on longer than they should have. I think you could probably take both sides of the argument and take a position that both sides perhaps uh acted in a way that caused it to be drawn out longer than it was, but ultimately was resolved. And now you have what's about to be the fourth largest copper gold in the planet, copper gold mine on the planet in production, 15 billion spent by Rio. And uh that's worked out very well relative to other mega copper gold projects around the globe. The other one was uh back in I want to say 2009 10 thereabouts. Um Mongolia is very active in the uranium exploration space and a Canadian company um had done quite well. They were looking for suitors to come in and acquire them and they'd attracted Chinese and Russian uh investment interest. The project they had was dually held minority interest by Russian and Mongolian interest. And they publicly stated that they were going to sell this uranium asset to the Chinese uh Chinese company. And that was taken very poorly by the government just leading up to an election period. And shortly after that they nationalized the uranium exploration industry in Mongolia. Ultimately resulted in people having to give up their licenses. That company in particular I think won an arbitration award. ultimately. But I'd say those are the two um negative times that stand out when you talk about nationalization in the country. Other than that, when you look at, you know, now a multitude of public companies that have brought things public and private have brought things to production without any uh suggestion of any interference from the state. Um you have step gold and boru now with two gold mines in production. You have the Kerry Group that owns the Shangrila hotel chain with a gold mine in northwestern Mongolia. You have the Reuben Brothers out of the UK with a small gold mine in the same province we're in that's been operating for 10 years or so. So, you know, there's a there's a mid-tier to large tier of uh companies that are active uh on impacted by government uh other than the fact that they have a royalty on gold of 5% and a corporate tax rate of 25%. Um I would flag one other thing however and that is that the government back in 2007 designated a number of projects as strategic and if it's a strategic deposit they can own up to 34% of that which is the case with Ogoy um which uh was part of the investment agreement that was reached between Ivanho Rio and and the government that that list of 16 includes mostly old um historic Soviet period uh mines that most of which are not in production or perhaps even economic include coal mines, tungsten and things like that. Um the government has an interest in being involved in projects that have a material impact on the GDP of the country. It's defined in the law that if a project has uh over 5% of the GDP of the country um as annual revenues then that project could be deemed strategic. Doesn't necessarily mean it will be but it could be and that would give them the right to up to 34% interest. Um, in the case of um, you know, a project like ours, we'd have to be at current GDP or over a billion dollars of annual revenues to get into that framework. But that is an area that is out there. And uh, for let's call it mega projects in Mongolia, something you have to be cognizant of when you're looking at that investment. Well, because naturally when you start talking about Mongolia, people bring up Oo Tocoy and Rio Tinto's whole I don't want I don't know if you want to call it drama or whatever you want to call it, but it's been a lengthy process, whatever whatever you want to call it. Um, so so you're essentially you're saying that you don't fall within that range or or what what are you saying within that regard? Yeah. Well, that's right. I mean, in order to hit that threshold of strategic deposits, we're well below that in the scale. You'd have to be, let's call it a mega project, but a midsize project doesn't hit that threshold, right? Okay. What about is there a risk for a windfall tax though now that gold is much higher than than where it was when you first started doing the studies, which means you're going to make more money? Are they going to want a larger share? If anything, we've seen push back from parliament. I had a chance to meet with some of the parliamentarians during this last trip and uh gold has stayed quite stable between currently 5% but has been as low as 2% and actually during co they lifted the royalty on gold altogether partially because gold is not something that's just big company u throughout the country there's a number of artisanal miners there's small um u I guess business people that have gold mines throughout the country and so that's not something that we've seen interfered with and I don't expect to see any of that in the future in terms of that 5% royalty on gold. But in fact, they do have an outsized royalty on copper and a graduated royalty on some other commodities that parliament now recognizes is too high. And there's a move of foot by the current minister of mines to have that copper royalty drawn down. and that's expected to be put to parliament this fall as is um further solidifying the rules and regulations around those strategic deposits which are a little bit too loose. So there's some very positive moves of foot by the current my minister to um to make the environment more I guess stable more clear and uh preferential in the case of copper royalties for investors as a h how fixed is that if that makes sense like how quickly could it change is is it does it need like approval in parliament or like yeah how quickly could it change? It would need approvals in parliament. uh the proposal being put forward is more of an amendment to existing laws than actually a wholesale change of laws which could happen more rapidly. I would say you're looking at a year for that to go into parliament and get approved. Ideally, this fall session it could happen, but I'd expect it's more likely to drag on until the spring. Okay. Yeah. When's um when's the next election again? 2027 is the presidential election. That's right. Just to to I guess go back to another issue that's tied to the stakeholders and um and changes. You know, one of the things that we've seen that's been unfortunate in Mongolia is that although you pay a 5% royalty and a 30 or sorry 25% corporate income tax and there are supposed to be rules around how that flows back to the local community, we've rarely seen that. you know, a new mine starts up 100 kilometers from a subprovince and they don't see any benefits of that. So, that's created a bit of um a wedge between stakeholders and uh mining investors because they're not seeing the benefits. And that's something that, you know, we haven't seen the government move fast enough on and that's something we are trying to work on through a local cooperation with um with the local province in Sum. Uh we've invested roughly a million dollars a year over the last few years into those local communities largely as I mentioned earlier into health care and u and education but that's something we'll look to solidify even more uh and perhaps even increase as we move into the latter part of this year and hit commercial state. How's um corruption on the government level or in general in country? I think there's corruption well there's corruption everywhere. I've had the privilege of working in many jurisdictions around the world and you know my view in Mongolia is that it's there if you want to dip your toe in it but we've been able to survive without any uh of that. Um, I think at one point we might have had a mid-level tax person approach us uh to speed things up and we said no and it took a little bit more time, but I think, you know, we're well known as a company that plays above board and if you want to uh stay in that side of the of the checkerboard, then you can get things done in Mongolia and we've proven that. all of our licenses, expiration licenses converted to mining, uh, and now getting to a mine site, um, have been able to be handled without having to involve ourselves in corruption. But it's always it's always there. What about, uh, crime sort of from the perspective of, if you organized crime or or mafia when you think about, you know, countries that are that are close to Russia and stuff like that? What's the situation there? you know, one of the safest countries I've ever worked in. Uh, very little interference from organized crime groups, if any. Um, yeah, it's it's uh devoid of of that. I shouldn't say devoid because I'm sure it's out there to some extent, but not something we've experienced whatsoever. Yeah. Okay. Um, how anything China related? Because it's I just mentioned Russia, so it's close to Russia, but it's also close to China. How's the uh how's that, you know, international relationship there? It's been, you know, kind of a student of history here in terms of my involvement with Mongolia going from just as they came out of the socialist period where, you know, almost overnight a quarter of a million Russian service people, teachers, soldiers left the country within days. It was quite amazing. I wasn't there at the time, but I was certainly there right after and saw the the results of that. I I went to a town in northeastern Mongolia called Choan and there's these massive vacant apartment buildings that are sort of crumbling that uh were left overnight and uh you know the largest air base um military air base in the eastern part of the Soviet Union sat there unoccupied you know make fighter bunkers all over the place and just uh almost like a ghost town. So amazing how quickly that transition happened and it resulted in Mongolia being in destitution for the better part of three or four years. you know, bread lines, uh, almost post-war environment, um, for Mongolians, which I think led to a lot of, um, the entrepreneurs we see today, the adversity they faced really kind of resulted in a lot of today's most successful business people. But jumping to today and sort of that transition from a Russian influenced country to now Chinese influence um you know the Chinese business people have come in and struck good um you know transparent deals in the cases I've seen they have slowly over the last 10 years uh become more comfortable working in Mongolia because it wasn't the case. there was a completely closed door um between Russia and China up until probably the 70s 80s and that really didn't open in Mongolia until um the early 2000s. But today you have um a major zinc mine, you have oil and gas operations, you have Zjin who's come into a copper project in the south. Um you have a number of other midsized uh opportunities. You have them heavily involved in the coke and coal business, both building infrastructure and joint ventures. They're involved in the iron ore uh buildout. And if you look at the southern part of the country and you see this, you know, call it explosion of infrastructure because there was nothing there at all when I arrived in 1997, that's largely all been paid for by um Chinese enterprises to bring infrastructure into the southern part of the country. The Mongolian government's investing in their own rail and road now. In fact, black top highways have been built to every provincial center again that didn't exist when I first arrived. But China's there. Uh China's there in an economic way. Uh increasingly political dialogue between the two countries that again didn't exist previously. But um yeah, the lay of the land has shifted uh entirely to the south in the 20 years I've been there. Are there any obligations for you as to who you should partner with? And uh well I believe your your final production does go into the government. Are there any other obligations like that? Yeah. So no obligations. Um the gold dor that's sold into the state is gold sales in Mongol are incentivized to be sold to the state. So I mentioned the 5% royalty. That 5% royalty is only if it's sold uh domestically. If you were to export then you have a 10% NSR. Um and many people do look to uh to sell gold outside of the country if they produce a concentrate. For instance, Outo Togoy sells their copper concentrate concentrate heavily gold laden into China. There's a couple of others that are in the process of doing that and we would look to do that as well uh with Alton NAR. you can enter into investment agreements with the government and you can negotiate different uh rules, but for today's conversation, I'd say just expect that anybody that sells gold outside of the country, it's a 10% NSR as opposed to five. Um just to carry on on that conversation though, you know, we employ people in the China region today to look at relationships with uh Chinese companies in the future because we will need to sell a concentrate for Maltinar and we also will be planning to sell a malibdum copper concentrate or a malibdum and copper concentrate into the Chinese market. The infrastructure is being built up as we speak in that area and so we see a real opportunity to start to align with potential partners whether it's offtakes or direct partnerships in the future on some of our other projects. Do you have the liberty to make that as a business decision or would it have to be a political decision? Um, no. We have the liberty to make that as a business decision. That's not an unusual circumstance by any means amongst Mongolian or foreign invested companies. Um, Xanadu, which is Canadian and Australian listed, which recently went away because it was acquired by a company called Bastion, had already entered into a joint venture deal with Zjin. Uh, Zjin was, I believe, had a right to a 50% interest in their harmag type project. So there's many precedents for those uh types of relationships relationships to be unencumbered um from a Mongolian government perspective. So So when the government sort of you know buys your door essentially do are they going to be buying at its spot or is there an offtake agreement with predetermined prices? How does that work? Yeah, it's spot and actually we have the liberty to sell to Mongolian commercial banks too but it's effectively spot. I think there's there's some um minor charge but in the uh you know tens of dollars uh range on on the uh sale process. And that's all of your production. So there's no like hedging strategy in place then? No. Um we have and continue to regularly work with a group out of Australia named Noah's Rule. Um who we uh you know keep tabs on the hedging opportunities and puts and call opportunities. So, we're well educated on that front, but at this point, given what we believe are the fundamentals for gold moving forward, don't have a plan to use a hedging uh facility in the near future. Talk to me more about why that is. I mean, it it is probably or well, potentially it's it's the best idea to hedge exactly when you don't feel like hedging. Uh because that's when when the music often stops. So, why why do you not feel like hedging now? Well, I think you have to again coming back to the fundamentals. Um we as a board and our investors have a strong view as to the direction that gold price will take in the coming months and years. Um and we're willing to um I guess make a bet on that. That's uh that's why people have invested in us. uh the majority of our investors are heavily uh of the belief that gold price will continue to rise and um that's the fundamental reason for avoiding a hedging um position at this point. I wouldn't say that that's necessarily never going to change but at this point that's the position we've taken. Right. What are you budgeting for GNA going forward again as you're going to go into that commercial production? I mentioned it was 250 over the last reported 6 months but that ended in Q2. So potentially different. Yeah. What are you budgeting for, GNA? You know, I'd say we'll maintain that. We're pretty lean team here in Canada. Some of our people are also lended into the EM management. So that's part of our uh salary costs here in head office. But no, we'll maintain that. I'd say we will probably pick up our investor relations activities a little bit more than what we have done over the past year or two as we hit commercial production. So maybe, you know, maybe you add a few hundred,000 on that front, but largely our GNA cost should remain the same. Now, keeping in mind that, you know, we're a team of we're probably 10 employees between the office here in Halifax and our office in Mongolia, but that's separate from the subsidiary that maintains a head office of uh I think it's probably 35 or 40 people today in addition to the 350 people at MindsAT. is as I mentioned marketing was just about 10% of that budget. Do you plan on changing that? Do you want to increase uh marketing spend? Seems like you've been on a couple of podcasts here and there and again I mean there's been no spend for this video, but um I do know that you've been spending a little bit more marketing. Are you going to increase it now that there's a bull market? Yeah. No, we're doing that. I you know we'll take in a couple more conferences. Um we'll do a little bit more of these awareness type um interviews, podcasts. I think it's important to get the news out. I don't think, you know, we're not that well known entity and particularly as we've gone through this consolidation with uh interest in expanding our holdings or our shareholder base in the US uh and in Europe uh and Asia as well. We have plans to be in Switzerland uh next year as well as through Singapore and Hong Kong at various conferences. So yeah, there will be an increase. Like I say, you know, you're probably in that $250 $300,000 range that you'd see increase over the um over the year. Why though? I mean, why why do you have to go market if you think you can carry everything through cash flow? So, you don't foresee as you said earlier, you don't foresee issuing equity or anything like that. So, what's the, you know, you you want to develop the district, so it's not like you're chasing higher premium for potential takeover. So, yeah. What do you need marketing for? Yeah. Well, as a public company, it's a responsibility of me and an executive to ensure that we have reflected in our share price the maximum value or the full value that we should get for our company. Um, so it's always a question of, you know, our shareholders being rewarded for what we think we've created. So I think you always have to keep that awareness up and and as I say as we transition into a production company it's important that we have more institutional eyes on the prize than we might have been more focused on retail previously. So that's part of it. I think you can never underestimate or you can never suppose that you're not going to have somebody show up at your front door that's interested in offering to purchase the the company. Uh so obviously the best um defense of that or again to achieve maximum value is to make sure that our we are fully valued. Uh I don't think you can ever say that there's never going to be a financing in the future. If we were to find the best project available in the industry tomorrow and we had an opportunity to secure it, you may want to tap into equity markets and again you want to be in the best position for that. So there's a number of reasons to ensure that we have maximized value as it's reflected in the share price. I know you almost have to run here so I try to be more respectful of your time. There's a couple of um housekeeping questions that I had here. Um PA on the Molly stuff. When do you want to have that out by? So we will firstly have a resource update out in the next uh few weeks. um that has included remodeling and sort of reconsidering our development strategy and might actually lead us to some additional drilling at zun mod prior to finalizing a pea. So resource by early Q4 and we'll make a decision as we move through the next several weeks on whether or not we employ this additional drilling. Just trying to understand what that impact would look like and if we do that then we're probably into a Q1 mid Q1 late Q1 PA on Zoom mod. Right. Okay. um with inflation, everything that's happened between your uh final investment decision and your and right now essentially what do you think that's going to have done to the ASIC? So when I look at the ASIC, you know, it's it's um a great number at 869 in our feasibility study. But first off, there is a combined 6% royalty on gold. So we have 5% to the government and 1% to Sandstorm. So that 6% has uh inflated alongside gold price which probably moves us into the let's say mid9s uh when you add in that increased royalty. And then consider as well that our uh capital build was about 15% higher than we had estimated. So if we just use that as a rule of thumb to apply to all in sustaining costs, I think it's good to be thinking of something in that 1,00 range is probably a good benchmark for us to be aiming for as we move into steady state. And we really won't know until we get to that point as we get a quarter or so behind us. But I think as opposed to the 869 and the feasibility, think 1100 as a benchmark for today. Okay, that's fair. Um what do you think? Um let's see. No, actually we covered that already. Um yeah, I think I've been through most of the um most of the questions that I have on here and uh just looking at some of the additional notes that I had taken here. Um yeah, and we've been through that as well. What do you think is the most criticism of Erdine right now when you talk to investors? Uh what's the thing that they push back on the most? Um, you know, it's changed recently because, you know, it's it was what are you crazy? You're going to go build a gold mine. You know, in our business, you're not supposed to do that. Uh, in most cases as a junior explorer. So, you know, that's behind us. I'd say Mongolia and I, you know, I've explained to you my view of the jurisdiction, but I'd say it's the unknowns. you know, there's so few companies that are active in the space that are out there talking about Mongolia, pros andor cons that there's uh just a lack of knowledge and lack of knowledge leads to people just making a decision that, you know, I'm not going to go to a place I don't understand. So, that's probably the criticism is um it's not a criticism as much as an avoidance because of a lack of knowledge. Right. That's I suppose that's fair. Um, and and those are things that little things that you're touching upon there that I I would like to follow up on potentially in a in a future interview here. Uh, Peter, but it's been a good first time of you for for people listening and watching. If I'm forgetting to ask something, which I'm sure I am, it is a large story. Do let me know what I forgotten to ask and what else I I should ask during our next conversation. Peter, what about yourself? What do you think I'm forgetting to ask? What did you come here hoping to talk about that I failed to bring up? That was that was quite uh wholesome, Antonia. I appreciated the opportunity to expand on a number of things that I don't often get the chance to do. I think um you know when I look at what we've built here, it really is about building that foundation so we can get to what I think is going to be a very unique opportunity to build out a new district and it takes time and there are risks as we've explored, but I truly believe there's a multimine opportunity in front of us here in southwestern Mongolia. Well, thank you so much for your time, Peter. I really appreciate you sitting down with me and hopefully speak to you again soon. Thank you, sir. And as always, thanks to everyone for watching Resource Talks. I have a couple of more things to say, though. The fact that this company was interviewed here today does not mean that they're necessarily a good or a bad company. I'm not here to endorse nor attack anyone. I am simply here to ask some questions. If you find that I have failed in asking a question that you would have liked to hear an answer to, which will happen as I'm not an experienced interviewer, please let me know and I will try to correct that mistake in a future interview. As mentioned at the beginning, please understand that mineral exploration and development is an extremely risky business. Losing money is the norm and should be the expectation. 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