$610M Gold Asset in a $50M Company | Fortune Bay CEO Interview

Summary

Fortune Bay (FOR): Management pitched the Goldfields project as a derisked open-pit gold development with a recent PEA showing strong economics and a financing just closed to advance work.
Goldfields PEA: At $2,600 gold, the study indicates ~$610M after-tax NPV5, 44% IRR, 1.7-year payback, with significant upside at higher gold prices; robust resource quality (97% indicated) and historical reconciliation support confidence.
Permitting in Saskatchewan: Existing 2008 EIS can be amended, targeting sub-5,000 tpd to keep approvals in-province; early First Nations/community engagement planned, with studies indicating manageable environmental risks near Lake Athabasca.
Fast-Track Concentrate Option: Gravity plus flotation concentrate pathway could halve plant capex, fit within the original EIS footprint, and accelerate timelines; SGS testwork underway to confirm mass pull and recoveries.
Exploration Upside: Planned 4,500–5,000m program focuses on down-dip step-outs at Box, targets near Athona, and historical showings (Frontier, West Mine Granite) to add ounces and assess underground potential.
Financing & Execution: $8M raised (no warrants) with $2M flow-through for drilling; remaining funds allocated to PFS-enabling studies, permitting, and team expansion to accelerate project delivery.
Mexico Theme: Chiapas project community agreements are 70–90% along by management’s estimate, with aim to start drilling in Q2/Q3 once permits are secured; large porphyry potential noted alongside acknowledged social-risk management.
Uranium Exploration: Partner-funded uranium projects in northern Saskatchewan continue, providing potential discovery optionality and fee income to offset G&A without diverting core capital.

Transcript

[snorts] Today on the CEO barbecue, we're going to be looking mostly for gold in northern Saskatchewan, but maybe we're going to stumble on to a bit of uranium, as well as we might jump down to Mexico and go looking for copper together with Fortune B. For a bullet point summary of this and all other CEO interviews, please go to resource.com and subscribe to our free weekly newsletter. >> [snorts] >> The company you're about to hear from has paid us for the production of this interview, but this interview is still intended only for experienced speculators because this is venture capital and mining is a very risky industry where failure is the norm. All conversations are general and impersonal in nature and they contain forwardlooking statements. I'm not a licensed financial adviser and my business sells content producing services which also makes me biased. So before continuing on, please talk to an independent investment adviser with a good long-term track record because your capital is at risk and also visit setterplus.ca where you'll find the company's official filings. If you're not 100% sure you understand all the biases and the disclaimers that 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 herein. That all said, this is Fortune Bay's second time on the CEO barbecue. So, I'll save you the 10-minute company overview and I'll instead link the previous interview in the description of this video. So, please watch that if you haven't yet. The reason why uh Dale and this time Garrett are are back on or why Dale's back on and Garrett is joining us on the barbecue today is is multiffold but primarily it's the company's updated PA on their 100% owned gold fields project which is actually again in northern Saskatchewan which is uranium country and it's about 13 km away from uranium city um up there. So the base case economics were done at $2,600 gold and uh the after tax NPV5 at that price showed a $610 million asset requiring 300 $31 million of initial capex to be specific and resulting in a 44% IRRa and a 1.7year payback with that MPV more than doubling at $3,600 gold and uh so it's up to $1.2 $2 billion at 3,600 and the IRRa almost doubling to 74%. So that's um well that as well as the recently closed $8 million financing will be the focus of conversation today and again maybe hopefully a bit of an update on Mexico towards the latter part of the conversation as well. [snorts] Just briefly, Fortune Bay is listed as four. So that's FOR on the TSX Ventures Exchange where the average three-month volume is about 45,000 shares. Post financing today, this is a $66 million company with about 66 million shares outstanding and thus also a $1 per share stock price. This is where I normally start going over the financials and uh so on. Uh but again, I'm not looking to put anybody to sleep. And Dale and I talked about that two months ago. So, I'll I'll save you the details and uh we'll touch upon again some of the the future expected financials as well as the plans for that 8 million bucks here later on in the conversation. Now, for this to actually become a conversation, I'll have to shut up and gentlemen, I'll let you do the talking. But first of all, thank you for being here today. >> Yeah, thanks Antonio for having us >> and and and Garrett, thank you for uh taking the time to join us. Pleasure to meet you. Um I definitely have some technical questions here, so um we're going to have some fun with rocks, if you will, later on. And um I'm I'm going to waste no no time here though because I want to know I want to know what the catch is here essentially. I mean the the stocks um up a little bit since we last spoke uh Dale, but I I don't I really don't mean to blow any smoke, but even at at $2,600 gold, you're now trading at about a 0.1 EV to MPV. And I understand it's a PA, so preliminary nature and so on, but but still, what's what's the catch? >> Well, there is no catch, Antonio. You know we've our P is a a robust study. It's done by Osena engineering. You know people it's posted to the technical reports now posted to our website. it's been filed, you know, anyone can go through that in detail and see, you know, this is a a solid project and while it is a PA, I think everyone should also realize, you know, it's considerably derisked for a PA stage project, you know, and we can talk a little bit more about that, but just in terms of having an existing approved EIS for the project, the established infrastructure located in a historical mining area with a community that understands mining where we have, you know, wellestablished relationship ships already. So, it really checks a lot of boxes for a a near-term uh development project and something we believe we can move forward very quickly, you know, through that um production case of just under 5,000 ton per day, which means we can keep the permitting in province and leverage that existing valid EIS for the project. >> That's a it it is a good summary. And um I do want to talk about permitting and everything else. And I also want to talk about economics. And uh we'll we'll get to the MPV specifics later on, but first of all, maybe uh costs again. Uh something that I typically look for is is your um MPV to capex. Um for you, it looks really good. I mean, you have a your MPV 5. It it's higher. It's almost twice the capex uh initial capex about 300 million sustaining capex 142. And then you have closure cost 15 million bucks there within the initial and sustaining haptics. What is the biggest line items there? What's really driving those expenses? >> Yeah, perhaps you know Gareth would like to comment on that. >> Uh well the process plant right it's a it's a 5,000 ton a day process plant with a whole or leech. So and the ore itself is uh is pretty abrasive. So there's quite a big crushing plant on the on the front end of that. So o overall definitely I think the process plant is the is the biggest line item there but again it's a it's a far northern project right we we're very spoiled in being a far northern project in that we have barge access straight from the the regional road network and we have a a winter ice road that gets put in by the government every year. So, you know, we are a fly and fly out project, but we're not one of those completely isolated remote ones. But that said, it is still far northern Saskatchewan, right? So, getting things up there, putting everything in, all of these higher transport and infrastructure development and um and construction costs have been built into that. So, I think our biggest line item is definitely our process plant, but uh yeah, it's uh it is an expensive place to work, but that's all been built in. And I think one thing to remember is that uh that $31 million capex up front does have a $50 million um contingency built into it as well. >> Yeah. What's um how conservative were you in in in determining those prices essentially? That's what I'm what I'm getting at when I'm asking what's what's the biggest driver here is essentially trying to figure out like could you know could this go over budget? Um so yeah, how conservative were you in determining those um those expenses? Well, I think the reason you build a a contingency in is to be conservative on it. Your your estimates, you always want them to be a best estimate, right? So, you don't want to overall underestimate things. You want to put a realistic price forward. Um, and that's we've had to lean largely on Oseno's um experience and expertise in that in that regard. They they did a lot of lot of benchmarking style um cost estimates, but they also reached out and actually price these things with North American suppliers. So, you know, we're not looking to find the cheapest possible thing that we can buy out of China. We're looking to get realistic prices to get good machinery and equipment and get it to site in a way that will actually work for the for the the duration of the project. >> Well, you also mentioned, you know, fly in, fly out. Uh what does that mean for your OPEX? What's the biggest line item there? You have the AI um or or the ASIC. You have it at about 1,300 bucks. What's the biggest driver there? Uh well I don't have exact details in mind but when we say fly in fly out that would be staff uh staff and general sunaries and equipment. Um in terms of operational the one of the biggest drivers of the high operational costs there is the need to get uh diesel and reagents to sight. So your cyanide your lime or your plant reagents your explosives right? So your mixer your mixer components for your explosives and that's going to be barging to sight in winter and then ice road loading up when you can getting making the most of that. Um, and that is expensive and you do have to have storage on site, right? So, there's been quite a a big cost built into that for handling and storage of diesel and explosives and reagents on site. Those those all it adds up, right? It's it's where you are and where you're working. It's a it's the nature of the beast. [clears throat] >> I think if you mention explosives one more time, YouTube is going to flag us and then Chad GPD is no longer going to want to work [laughter] with us. Uh jokes aside though, having seen the numbers, uh Dale, has your opinion changed about whether it's it's you who wants to build a mine or whether you'd like to find a partner or a buyer to push it forward? >> Yeah, we obviously, you know, we set up um at the moment to really advance this project through um you know, the PFS stages now and continued exploration. You know, our team's built around that and it's really all for us around building value for the project at this time. you know, we you know, we can't speak exactly to the long term how things unfold and we'd certainly, you know, look at transactions down the road, but we feel there's a lot of value to create out of the project, you know, in the near term for the company. Obviously, companies can evolve into developers themselves and actually construct and operate. I mean in that in that light you know we did mention in our PA news release that you know outside the updated PA mine plan which is you know the main road we're going down we're advancing down that path diligently now um there is another scenario where we could even accelerate um production um and that would be producing an on-site concentrate that would then be you know it's really the front end of a plant it's a lower capex hurdle that could then be taken off site sold and would allow for a you know a much lower capex hurdle and it could be executed uh within that existing EIS. So it's a even shorter time frame um to production. So that's something we're looking at at a scoping level. It's not you know we we still have the updated PA mine plan but at a scoping level we look at this looking at that scenario and under that scenario you know we could we could see ourselves perhaps getting something into production in the near term. Obviously, we we we'd beef up in terms of operational uh you know on the mining side and engineering side, but we certainly have a good range of contractors we're using at the moment. So, we're not ruling anything out at this stage. You know, we want to derive value from this project and that's our primary ambition and we're taking the next steps toward unlocking that value. >> Did you how did you come up with that decision essentially? Did you talk to I mean last time we talked about SSR mining so I suppose it's fair to mention that as well. Did you talk to them? Is that something you know you you come up um the plan that you came up with? Is that something you come up with after having spoken to you know potential buyers or or potential partners here or how did how did you come up with that decision? Yeah, that was something that's been, you know, mold around internally, you know, for some time. And it it was really, you know, some of the the outputs coming out of the PA, obviously the gold price. Um, you know, just the nature of our our mineralization. It's high grade, you know, it's among the highest grade uh deposits for open pit developments in the Americas. It has a very favorable metal. You know, it's mostly free gold. There's a little bit occurring around, you know, sulfide. The sulfide content is low. There's very little delitterious elements. These deposits stick out of the ground. You know, the initial parts there's there's no strip. Um, it's just easily accessible or it's in a very favorable setting. So, you start thinking, well, you know, there could be a a fast track here to just start producing this concentrate at a low capex or low initial capex um, you know, hurdle and and get something moving. So it's something you had moldled around amongst you know our board and and management and together with you know some consultants and uh we said look let's start doing some work toward that and maybe Gareth can talk a little bit around some of the testing that's underway to evaluate that um that alternative scenario. [clears throat] >> Yeah Garrett, do you talk to me about that? I mean what exactly do you have to do before you can answer that unanswered question? How long is it going to take you and how much money is that going to cost? >> Yeah, for sure. So it it's a pretty low hurdle to get an initial answer and then of course it turns into you need to do more studies to flesh out the exact details of it. So at a high level we're basing this on results from 2015 metallurgical studies that were done at SGS where we came up with the whole that that provided the basis for the the PA process that we have at the moment. But if you look at that carefully and you read through it, this deposit by nature is extremely nuggy. It's got a lot of very free coarse gold in it that can come out in gravity. So, every single metallological study and and analysis of this that's been done says put gravity on it. It's a no-brainer. You have to do that. You scalp a significant amount of the gold out. Um, and it's quite cheap. It gets that out into a concentrate. And the numbers around that initial gravity concentrate are almost 1,000 g a ton. So, you're pulling out a small concentrate from this uh or stream that has 1,000 g a ton in it. And then you know we focused on the whole or leech with carbon recovery but part of the study also looked at flotation and the first flotation pass the results indicate it's possible the second flotation failed because the mass was too small but the first flotation pass showed that you could potentially combined with the gravity put those two together and get a mass pull from this or stream as low as 7.8% 8% of the total mass and you could put almost 90% of the gold into that into that mass. And [snorts] you know, I think you look at where we are and you think, well, getting a concentrate out of there is, you know, it's not going to it's just not going to fly, right? Because the ops and logistics around that are just too challenging. But when you put gold where it is now and you generate those types of concentrates, I mean, your your one ton bag of concentrate is going to be worth it's going to be worth more than a million dollars, right? And that starts to become feasible when you look at the fact that you're shipping in diesel and your reagents. I'll I'll I'll exclude that one word there and other requirements for site. Um you you you look at a situation in which you could just be shipping material out at the same time. And with gold where it is there there smelters around the world that are screaming for this type of product, right? It's a very clean product. It's just going to be a sulfide pyrite gold concentrate. And if you can get that grade over three 400 grams a ton um yeah it becomes something that you can definitely look at. Now, now this is I mean just to emphasize we're we're advancing this project on the basis of the PA as it is now, but we do need to do more scoping around this alternative scenario because another key thing here is that we have an existing EIS back from 2008, right? And if we go the the PA route, we're going to have to make some additional amendments to that. We're going to have to increase the scope of the project. We'll talk more about that later, but I just want to highlight the fact that if we went down this route of a a fast track and generating a pyate production, you're looking at a scenario in which you can almost exactly conform to the the requirements and the stipulations of that original EIS. So that gets us from the realm of having to update and redo things and getting us into the realm of just having to refresh data and, you know, fast track. It takes a year or so off of the the production or off the timeline into production. And built into that, of course, is now you're taking away your entire cyanide leech and recovery and electroinning process part of the of the recovery plant. That's you're almost having the the cost to actually build the the the process plant. And that that's a massive deal as well, right? Your your money is expensive to to get. The the capital hurdle is one of the biggest biggest issues here. So, if you can enormously reduce your upfront capex requirements, it gets a lot easier to get that money and then it's a it's a streamlined production scenario because the environmental permitting stuff becomes easier because it's the same footprint that was originally permitted in 2008. Um, yeah, and in terms of what we are currently doing to support that, we collected a a metaly sample and sent that to SGS. It's underway right now. They were processing the gravity side of that right now. And as soon as we get the flotation results for that, we'll be in a position to actually see is this a viable option. We need to actually confirm what that mass pull is from the total or stream and what percentage of the gold we can get into that. And then of course you need to scale up your metaly testing. We'll have to do more testing, do some variability testing, do it on a larger scale and and actually pin down the exact numbers around that. Sounds to me like you might like talking about rocks. uh which I actually appreciate because this this opens the door nicely for me pretending to be smarter than I am later down the road, which I'll do in a couple of minutes, but uh just to go back to that permitting, I know you've rightsized the the project to optimize for for permitting here. So that's the 5,000 TPD. What more do you know about that right now? What are you going to have to do here essentially to besides stay below that below that 5,000 TPD? What else do you have to do? And what more do you know about permitting now as is? >> Yeah, there's a there's a process there. You know, it's well established in Saskatchewan and what it really kicks off with a a project description. So, we have this existing EIS and it's a it's a it's valid and it's something we can build upon. And under the Environmental Assessment Act in Saskatchewan, you can amend these permits. There's a section 16 for that. So we're looking to make an amendment to the permit um for two main reasons. The one is that it is from 2008 and some of the the data that went into that EIS, you know, is before that obviously. Um so that's there's a bit of a time lapse. So regulators say, well, this data, yes, your EIS is valid and you can move forward, but this data is quite quite old. Has anything changed in the environmental baseline conditions since 2008? So that's the one thing we've already completed work this summer. We got ahead of that. That work's done. We're waiting for final results. Um the other the other change is is not just it's the time lapse, but then also this the under the the PA plan. There's also the the mining of Athona which wasn't originally included plus a larger TSF. So those are new areas that have to be assessed. So yes, and we've also collected data from those um areas now that will go into our plan. So all this comes together um at the end of this year and the process then is to define what the project is going to be for us. Um it looks you know we've got a great robust updated PA that looks that's the main path here that's look we're driving toward that will submit as a project description in the event this alternative production scenario Gareth was talking about looks very favorable we'll have numbers by then that may become the way we take it forward but what's essentially need is we need to go to regulators with a plan that's summarized in a project description and then that is used for any they will advise Then on that what additional assessment might be needed that will also trigger the duty to consult. In other words, they will say right now with this plan, you need to go start talking to the communities. On that front, we have an established relationship. We already have an expiration agreement. Um but and we also getting ahead of that by having initial community meetings in November this year. So we we've uh scheduled a tour for late November to visit all the communities to start talking about this project plan and it's it's viewed very favorably when companies engage early rather than mandated by the government at a later stage and that's been our operating um you know the way we operate and our commitments to the community is to always be transparent early um and we've always done that on the project even prior to the expiration agreement. So, we're just following through with who we are as a company there and um and and getting that engagement done um earlier than we actually need to and really trying to stay ahead of things here on the permitting front because at the end of the day, we believe regardless of how we develop the project, that's the critical path. You know, that's the path that we think will take potentially the longest. Um and other studies can can fall within that. So we we really want to get ahead on that and obviously it's a key topic nowadays um in terms of getting mines into production. >> Did you have a chance to present the PA to to the First Nations you're working with or or the local communities already? So that is the plan for late November is to talk through that updated PA plan um with the communities um the the community representative and the communities they've seen the updated PA you know they follow us on social media a lot of them follow our websites we had inquiries so they're aware of it they've you know we have notified the representative for all the communities that the PA is out they've had a look at it so they're all anticipating the meetings where we can sort of break down in simpler terms what the what the P is about what the you the impacts are and start to um you know basically discuss um the the the plan and the impacts and benefits with a a future mining operation. >> Does you being on the shores of Lake Aabaska pose a challenge from a community or or maybe even from a government perspective? >> No, there's nothing identified there that would pose a challenge. You know, if you go to any of these mines in northern Saskatchewan, it's just there's lakes everywhere, right? Yes, it is a big body of water, but you know that area has seen mining of mining over the years. Um, right along that shoreline, there's been numerous uranium mines. I mean, Gunnar mine was right up against that. That's now being, you know, fully rehabilitated. It was handed back to the the what's being handed back to the province. So, there's no there's nothing um identified there or any specific concerns. you know, with our project in particular, the the geology is it's very competent hard rock. You know, there's been no indication from the previous um hydro and geotechnical studies as well as historical mining in the area which went below lake level to suggest there's any major you know mine to water interactions there. In fact, it it's it's it's planned to design on an annual water water deficit where actually water would be required from the lake and you know it's handy it's right there that water can be taken to the processing plant and and there's there's nothing discharged. So it's um you know no concerns raised. Obviously, it does need to be derisked further, but there's been no concerns from community or identified in in our technical report or or previous studies and the project has a lot of those, you know, dating back to previous operators who had done, you know, a feasibility on box. There was a prefease from 2011. There's a huge amount of data for this project and there's really never been a major red flag there. The the the valid EIS for the project really does set a positive permitting precedent. you know, it's from 2008, so it is dated. And there's been some changes in in regulations, but none to the to the scope that would would affect uh that that precedent. You know, it's still a positive precedent. And you know, the main changes since 2008 in terms of legislation is really around the duty to consult, which wasn't really done properly, but we've got a good foundation to advance on that and and obviously engaging with communities in November. >> I think I think if I can just jump in, sorry. Another point to make on that, sorry about that, is um I mean the the uranium city is a mining town, right? Everyone knows mining in that area. They understand it. It's an industry that they they can relate to and they what they do understand is the difference between uranium and gold, right? So uranium is a is is a is a commodity where you have environmental concerns. One thing about and this is what we need to communicate about about box and the owner is that they're granites, right? They're mine granites. They'd make a nice kitchen countertop. They are they've got gold in them and they've got pyite in them. A little bit of pyite and then they have some minor accessories minerals like felorite and galina and things like that. But this is not a deposit that contains any kind of what we call delitarious or problematic elements in it. You know this is just granite that you're crushing and putting into a waistrop pile. You need to do the studies to see if it's going to leech any significant metals or if it's going to generate any kind of acid. But we do have data on this and one of the things we need to do is derisk and improve those data sets. But every single indication we have, all the geochemistry we have say that this is an incredibly benign piece of rock and that nothing you crash or generate out of it is going to generate any kind of outcome or effluent that is going to contaminate or poison any kind of water body there. It's just not the type of material that does that, right? And I think the community has an has a basic or or a very good understanding of the difference between uranium and gold mining. And that's, you know, it's it's it's something that we want to continue to talk about as well um in in the story that we put to them. I think my my Europeanism showed in that question because if you try to do something like that in most of Europe, you know, close to a leak, uh it would probably be a non-starter. Not everywhere. There's there's other spots in Europe that do work, but uh it is it is quite different and and uh I've not been to Saskatchewan, but I've flown over it, I think, and lakes upon lakes that you can see there. So, >> and I think, you know, it's important to note, you know, some of the uranium mines there, you know, there's been mines um sort of at Rabbit Lake which have actually opened pit mines that have gone into lakes through the construction of coffer dams. Um there's uranium development, you know, fish at at pls that's now paladin that's going under a lake. And that's not to say that Saskatchewan allows uh you know, they don't do the proper reviews. I mean they're very strong on the environmental side you know very strong on the community side but but there's precedent that these things can be done responsibly they can be mitigated and you know those are examples from uranium which as Gareth pointed out it's far more complex there's far more in the way of delletterious elements so it's certainly not an unprecedented you know to be mining close to lake we're not going even into the lake with coffa dams we're not proposing that you know we we keeping everything within the uh the distances required from shorelines and um advancing on that basis. So you know we don't foresee any uh real issues there moving this forward provided obviously of course as a responsible operator we show that um we doing we we planning everything in accordance with the regulations and and um any risks will be appropriately mitigated uh through the through the life of mine. >> Mhm. Are there any competing users who who could theoretically object? Like is there is there is there someone else using um any any of the of the water from the Aabaska lake? >> No, I mean there's no there's no interactions with the lake itself. So uh you know the lake is is used for fishing primarily. Um it's it's a obviously a huge body of water. there there's there's a there are some communities around the lake but the because there's no interactions you know we don't uh and that will obviously be communicated to um to to communities and that based on our plan. So we we don't envisage anything particular there but we've got to obviously do the step by step and in line with uh new data as it comes in. But certainly to date based on the our work and and all the the the legacy the the large legacy of historical data there's been nothing uh flag there. How does being near near I suppose lake influenced structures influence um your geology here though I mean or your slop slope angles and and therefore I suppose your your strip ratio and I suppose Garrett this is where you step in again but yeah could could that could that be any kind of um challenge or could there be any kind of influence? >> Um well I think like Dale mentioned we we do have hydrogeeological data here which shows no significant water ingress. We there was mining operations that went below the level of the lake and there was never any reports of water ingress there. So we're not concerned about that at this point. We need more data. I mean we have enough data to support a pea study which is what we've done. Um but in order to go to a prefee we would need to do more groundwater study. We would need to do more geotechnical drilling and we would we would need to make all of those assumption. We'd need to pin all of those kind of criteria down for the planning stages. We've adopted a an average 50° slope angle and we've pushed it back as far as we can at this point. Um maintaining a 30 m offset from Lake Aabaska and the rocks the like I said they're very competent. We don't have significant geotechnical concerns. Um and we don't foresee any major issues there. It needs to be derisked. We need to do more drilling. There's potential that you know you could have to slightly shallow that. Um there's potential that you could also steepen it slightly. And if you can steep it, then you can access deeper or deeper portions of the or body without actually further encroaching and getting closer towards the lake. It's just one of those things that we need more data on. We we do have data. Like I said, there's been geotechnical studies before and they recommended a 55° slope angle. Oseno took a slightly conservative approach and averaged the the the southeast side of that slope, which is up against Lake Aabaska. They average that out at 50°. Um we're we're lucky and the the shape of the all body is actually very beneficial in terms of the the strip ratio. So, it's actually the morphology of the body itself that gives it such a positive strip ratio. It's a it's a flat it's a sill. It's a flattish body that dips at about 38° towards the southwest. So, that northwest side of the body, that side of the pit actually just follows the exact base of the deposit itself. So, you're not mining any waste on the northwest side of the of the or body. You're only mining waste on the southeast side of the body as you mine down the dip of this thing. So you're taking out the rock that lies on top of it and pushing back away from that. So because that northwest slope is actually quite shallow at 38°, we've been able to build the the ramps in on that side, which allows us to steepen up that angle towards your kind of optimal geotechnical outcomes of of the studies suggest 55, but we went slightly conservative and stuck with 50 in the in the in the PA plan. How sensitive is the the NPV to changes in the slope by I mean yeah by 5 degrees as you mentioned there. >> Uh not very I I don't think that that would be a huge thing. Um because once you get down to the very bottom of the pit your mining costs everything is starting to increase at that point. Right. It's so much cheaper to pull your shallower ore out with less strip ratio that I I I think as you get towards the the deeper portion of the body, you're just increasing the life of mine and adding marginally to the MPV. You're not adding significantly to it by accessing those deeper resources. It's it's good to get them. It's good to increase the life of mine derisk the overall project from an economic standpoint, but I don't think that losing a little bit of the bottom of the deposit will make any major difference to the the NPV. M >> and I should just maybe just add in here at this stage Antonio what we're talking about is specifically the box deposit. This is 80% of the resources. It's it's the higher grade. It's the prim primary [clears throat] driver for value. Athonone is AON is a smaller deposit. It's 20% of the resources. Aona has a one to one strip. So it's it's even a lower strip. Um but we're talking more about box in this particular case which is the primary driver of value for the project. Mhm. Mhm. >> Well, I I just wanted to talk about grade in that case because I think that that matters here as well. You're going for 28 g per ton at at $2,600 cut off. Is that um how did you come up with that? How again just how conservative is that or how realistic is that cutoff grade to actually mine at? >> Well, that's that's the recommendation from Wenko. They did their full analysis of the benching the the grade distribution um the the overall cost of working there and they came up with the the lower economic cut off for this body should be 28. So that's what we that's what we used that was their recommendation. >> Yeah. What what do you what do you think? I mean how conservative is that that recommendation? >> Uh well with with gold at $2,600 you're.3 g a ton is still paying, right? So you're you're adding it into your or flow and recovering gold from it rather than hauling it to a waste rock storage facility. So yeah, uh you it's that balance between increasing your resource and slightly decreasing your grade, right? It's that fine balance on what ends up making the overall sense of making a slightly longer and bigger um project and mine life as opposed to shortening it and just focusing on the shallower, higher grade stuff as best you can and optimizing it to a very short. Overall, we want to make this the most reasonable and reliable project that it can be. You know, we want to put something out there that's going to have legs and derisking it by making it a bigger project and extending the mine life slightly is something that we feel is is beneficial for the overall project and and beneficial for its development. >> Mhm. How sensitive is the project to changes in cut off overall? Like if we push it up to 35 and just just naming numbers here, but what happens to what happens to your strip ratio? How sensitive is it? And also what percentage of the MPV would you would you affect that way? >> Again the the most sensitive thing that this project is to is is simply gold price. If you change your bottom cut off marginally you might reduce your overall recovered ounces. Again don't quote me on this and I I probably shouldn't be saying these kinds of things out loud because I'm just eyeballing this at the at this point. If you change your cutoff grade from 28 to 35, I think you might reduce your total recovered ounces by something like 60,000 ounces um 50 to 60,000 ounces. And you know that's the lower grade material as well. So you'd be excluding that lower grade material hauling it to waste rock instead of processing it. So your overall costs and things would go down too, right? So it's that that juggle. you're slightly you're making it a slightly bigger project and extending the mine life. Um, but you're lowering the average grade very slightly by doing it. I I don't think it would have a any kind of significant impact on the on the MPV in the long run. >> Just as maybe a bit of a side note, I'm going to be back to what you just said here, Garrett. Uh, but but the the LOM, you mentioned the life of mine. Um, was that part of the, you know, determining that LOM and making off that balance there? Does does does that have something to do with permitting more the community? Like did you have to consult them and be like, you know, we want to show them a long life um acid um and and yeah, did that play any role in your decision-m process? >> Yeah. So, I mean the the mine life's primarily driven by the throughput, you know, that sub 5,000 ton per day pushes that mine life out a little further than, you know, what we did in 2022 with the original PA. So we have a longer mine life that's attractive obviously from a financing point view you know financeers like to see um sort of a longer mind life so that is attractive it's not it's not you know it it it's really a case of the throughput that's determined that [clears throat] >> um yeah fine uh just is kind of an in between note Garrett I'll go back to what we were talking about um just before and really why I'm asking about grades and cut off grades is is not because I think gold's going lower and and hopefully definitely not below 2600 but because I'm thinking about the type of system you're dealing with which again does show negative behaviors in some of the different domains and I think that means that reality won't always necessarily be the same as theory here right so what is what what's kind of the um great reconciliation tolerance if you will in the first two years like is it 10 15% or could it be be is it lower could it be higher >> well we're in the um very kind of happy position of actually being able to do a great reconciliation already. You know, normally your process plant would have to go into production for a year before you could do a meaningful reconciliation here. This this box deposit was actually mined back in the 1930s, early 1940s. They mined out about 1.3 million tons of ore and they processed that and recovered about 65,000 ounces of gold. So, we have very accurate STO models of what's been mined out from from the body. And if we cut those STO models against our resource estimate, we get 1.3 million tons of ore. It's an almost exact tonnage reconciliation against what was mined out uh before. And we pull out an amount of gold that you know, so so the resource estimate has the total amount of gold in it, right? There's a process plant. So you don't get the total amount of gold. It's the recovery efficiency of your process plant that drives exactly how much gold you get out of that. So Kaminko, they're the ones who did the underground mining back in the 40s. They said that they recovered 96% of the gold. Um, which seems a bit like wishful thinking, but we've used that because it's their official number. If you apply that 96% correction to the amount of gold that we extract from our resource estimate using those STO models, we reconcile to within 1% of the historical production of 65,000 ounces. So, and let's just take a little backtrack here and think about a process plant on the northshore of Lake Aabaska back in the 1940s. They reckon they were getting 96% of the gold out of that, which is what we think we could get with a modern whole or leech plant out. We reckon we can get about 96% of the gold out. If you go through and you read the production reports from the process plant themselves, they the the engineers were screaming for a finer grind. They were screaming for they were screaming for more cyanide. They were screaming for longer longer leech times on the reagents. They were they were asking for improvements to the process plant themselves. And the production reports reckon that they were getting between 91 and 93% of the gold out. And [snorts] if you look at the tailings, we've done some limited or not we historically the operators did some some sampling of the tailings that are are lying around next to that old production plant. And the average sample grade from that is about 0.15 g a ton. Now golden tailings is a very wishy thing, right? You can it all settles, especially in these areas where there's freeze and thaw. The gold all goes to the bottom. It's very difficult to sample because it's very anomogenous. But there's gold in those tailings. It's not. So, they didn't get 96% of the gold out is the point I'm making. And if you think about that, it means that actually our reconciliation is being extremely conservative. It means that if they got 90% of the gold out or 85% of the gold out, our resource estimate is actually on the conservative side. There's actually more gold there than we're estimating, which I think is a it it it really ties to the way that our resource estimate was done by by SRK. They used a a very aggressive to take a step back here. We inherited a resource estimate because there were previous studies done on this project, right? So we when we activated the project in 2020, we inherited a resource estimate with it and we reviewed that and said we need to redo this. So we got SRK in and they came in with a very modern approach and they used a very aggressive capping approach. they they just cap the gold numbers to reduce the influence of these very nuggy coarse high-grade individual samples because these these things when you use them in interpolations they can smear high grades all the way through the deposit right so they they cap these numbers down and then I won't get into the details of how they did it cuz it's a little bit beyond the scope of this but they used another stage of capping where they they they used the structural controls on the mineralization to only allow the high grades to influence blocks that were directly in line with these structural orientations. So they didn't allow any kind of smear of high grades out across through in this block model. They only allowed the high grades to populate narrow corridors along where these mineralized vein sets would be. So you know all in all they generated a block model that looks like the mineralization we see at this body. It's extremely inhomogeneous and yes there is a lot of variability like you say there there's absolutely a lot of variability here. It's a very nugget nuggety deposit. There are vein sets that carry high grades. their vein sets there and and there's background rock rock um portions of the deposit that aren't that pervasively veined and don't carry that much grade. But we've got I mean box has got 430 holes in it. It's got 24,000 assay samples. This thing has been pin cushioned into absolutely >> and and you know sampling of development drives channel sampling. >> Yeah. Yeah. That that includes that too. So you know if you look at just the sheer volume of sampling the the spatial distribution of those samples there there's no assumption of continuity here there's demonstrated we know exactly what the mineralization looks like in this body and we've represented that in the block model. So we've come up with a very reliable resource estimate that we can make decisions on and if you and the reconciliation with the historical production I think really just just highlights that right we've we don't have any real concerns around the resource estimate other than that it might be slightly on the conservative side >> and and perhaps just worth mentioning again you know this updated PA plan includes you know 97% indicated resources you know I think people used to seeing PA it's based on inferred resources this is almost all indicated resources is supported by a huge amount of data plus it reconciles to within 1% of historical production. You know, we're very confident in what we have there and and you know advancing on that and that's why we like to say this is derisk for a PA stage asset because you know the resource itself is particularly solid in our opinion. When you talk about the historic operations and the great reconciliation there, they did do underground mining as you mentioned. You're doing open. So, they were able to be a little more selective, I suppose, with what they were mining and leaving out, right? Is is that going to have an influence for, you know, again, real life scenarios here? >> Well, I think the the historical operations were challenging. Um, it's it's difficult to to get I you're you're you're basing your understanding of what happened there on these old PDF reports, right? They did their first resource estimates and they thought that they were going to get four to five grams a ton out of this because they were smearing grade. They were ignoring the nugget effect and they were not doing a great job of of handling that. Right. It's it's difficult to deal with those this type of inomogenous deposit where you've got very high grades up against very low grades. It's difficult to deal with that. And then they they went through a stage where they just thought that their process plant wasn't working at all because they were only getting 1.7 g of ton out when they were expecting to get four grams of ton out. And then, you know, they did audits of the tailings, realized there wasn't that there was gold in the tailings, but not a huge amount, right? They weren't recovering 40% of the gold. And then they kind of realized that it was the nature of the the deposit itself. So, I'm [snorts] not convinced that they were that effective in following specific mineralization systems. And I think it's it would be quite challenging to do that here because you would need extremely detailed drilling to define these quite narrow, very high-grade systems down. They took out 1.3 million tons of ore in fairly big consolidated STOs, right? These are not little channels that are following the specific high-grade material. I think if they did that and they followed specific high-grade systems, they would have been mining 10 g a ton, but I think they had requirements to get tonnage out of the ground and they were just pulling larger stoopes out. And you know those bigger bodies or those STOs, those larger volumes of material that they pull out are, you know, they they contain high and low grade material, which is why they averaged out at at the lower grades is because they they just didn't selectively follow the specific high-grade systems that are there. >> And to be fair, gold was like a dollar a kilo at the time. So So times where for a northern project, there was no way this was going to fly as an underground as an underground development. >> Yeah, I'm sure someone's going to correct me in the comments by the I didn't actually mean it is a dollar a kilo. Um but it was cheap. >> Uh I do also see that that you know 70 g per ton uh cap. What if um again what happens because because you said you have those that variability and so spikes what happens if you cap that to let's say 50. What happens what happens to the early years um headrade in that case if if you cap that? >> I'm I'm not I didn't understand the question. Sorry. Could you say that again? >> If if you so you're capping it at 70 grams per ton, right? If I if I get that correctly, >> I I I don't remember saying that. So the actual capping itself of the samples was done by grade domain. I think samples that were 100 150 grams a ton depending on what domain they in, they were capped down to either 30 or 40 grams a ton. I can't remember exactly this the the the bulk of this resource estimate was done three or four years ago. I can't remember the exact capping numbers. I can pull it up if you want, but it was very aggressive. They they took substantial amounts off of those those bigger high-rade numbers. >> Yeah. Because it's kind of like a it's really a balance here, right? Because if you if you just go out there and it's uncapped completely, you risk being overpromotional. And then if you cap too much, you risk like not showing a lot of value there. So over underpromising, it's kind of a >> balance. You That's what it's supposed to be, right? It's supposed to be a best estimate. You don't want to be too conservative because then you're not allowing yourself to actually make the best decisions you can about the thing, but also you don't want to be promotional. You want the thing to be what it is, the best the best representation that that you can make. >> Yeah. Yeah, that's fair. Um Dale, you and I talked about uh last time we spoke, we touched upon Metallergy and you saw that you said it was simple. Um numbers are looking good across the two deposits now as well. So you're uh again 96 is is Garrett what you said you' taken just from their estimate and then 93 and a half% respectively for box and um um Athona um respectively. And but but how's how's overall variability within the deposits like box and maybe per rock type really? I'm wondering because there's different hosts, right, as well. Uh what's kind of the lowest versus the highest recovery you you get across the different methological domains? >> Well, maybe, you know, just I'll start off there and maybe Gareth can sort of finish there, but you know, there's really not different domains here. It's a single or or rock types. It's a single rock type is the host. It's a it's a granite. And you they're quite similar between box and AONA. These they're called the mine granite. And it's in these mine granates you have these these veins. They brought in the gold. A lot of the gold is in the veins but some has been disseminated out into the granite itself. So it's you know while there is variability of grade across the deposits you know there's it's really within a single um host rock and I don't know Gareth you want to talk a bit about the variability there. just G before you start because this is why I asked that just maybe so you can kind of um see where where I'm at with this where where my understanding is. But I I was I was thinking like is most of the grade in in the vein domains or or like kind of what's the split between how much gold there is in in the granite versus what's in the vein domains. That's where I'm coming from. >> Well, all of the gold is associated with the veining. So the veining is carried these goldbearing fluids into it. It's it's hit a reducing environment and it's precipitated out the metals. um it's just the extent and the density of those veins and the size of those veins and how they're distributed within that mine granite host. So a and that's where all the kind of variability comes into it, right? You get these ma these major vein systems that come through where the veins themselves are a meter wide and they're they've got more pyrite and more gold in them. And then right next to that you can have 5 m of mostly granite where there's this slightly pervasive smaller vein sets in them that do carry gold but it's obviously significantly lower content. Right? So that's that's [snorts] primarily what drives it. It's how the rock is broken and it's how these veins have come into it and the density of veins in any one the the overall density and the thickness of these veins in any one location. And again it gets even more complex than that because the different there are different generations here. There are are different orientations. There's a vein set oriented northwest southeast. There's there's a a vein set that's oriented northeast southwest. And all the some of these carry slightly different grades to the other ones. That's why they've used different domains. When we spoke about different domains there, we're talking about grade domains, not geological domains. They're the they're the same overall host rock. It's just a way of representing the grade and the the density and gold content of those those vein sets that are inside of them. And in terms of variability, I mean, it you're looking at a 5,000 ton a day process scenario. So you're putting through significant volumes here. So you know reconciling block against block in a in a in a block model is just not something that is meaningful or useful when when you're when you're looking at production reconciliation on a mine like this. You're going to be reconciling against monthly production or or quarterly production, right? That and at that level you're pulling in significant volumes that contain all the the scale of variability inside of that, right? and it averages out that the point of this resource estimate that it gives you a really good representation of the grades that are there on the scale of monthly to quarterly production. So that that's what we're trying to do is it is an open pit thing, right? You're digging out all the ore. You're processing it as best you can. You're segregating the low from the higher in the block model, but you're pulling out bigger volumes that encapsulate all of this variability and you're putting it through the processing plant and you're coming up with an average that reconciles well with your resource estimate. Is the the the expectation and this is with regards to host rock and minerality. Is the is the expectation for some of the nearby exploration targets that you have. Is it do you expect that that it it would be kind of the same gold essentially or or the same type of system? [snorts] >> We're expecting there to be parallels and we know that there are there's a a showing called Frontier nearby which is logged as a mine granite. It's a hematized grrenitic looking rock. Um it's highly metamorphosed and resolicified and it's broken and it's got quartz veins in it with with gold. And there's some very compelling grades there. Frontier, it's significantly smaller. You know, these are exploration targets and things that could potentially with more drilling add some ounces to the to the project. Frontier, it was worked by SMDC back in the 80s. They put in 300 m of underground drifting because and then they did some underground drilling and they they got compelling results, but the the problem was there's not enough drilling there to actually pin down any kind of resource. The body is small. So, you know, they they left it because on a standalone basis, it was never going to fly. It's a it's a small thing, but it's got a couple of hundred meters of strike length. It's 10 m 10 to 12 m thick. It dips to the southeast. It's got a lot of parallels with boxing and that the morphology, the dip angle, the type of rock are all the same gold bearing vein sets in these hematized granites. And this thing sticks out at surface again on a ridge line and it dips at about 35° to the southeast. It's an extremely favorable strip ratio. So it's the kind of thing where what we want to do and I know we've talked about this this exploration not here but we have been talking about it quite a lot in in our materials is we want to go in now and look at these historical occurrences where people looked at it and went this is on the smaller side where it doesn't fly right now so we're going to walk away from it or they drilled followed up by drilling in the wrong place and they didn't do a proper job of it. We want to go in and drill some very kind of strategically located holes just to test out mineralization continuity between intercepts and to demonstrate mineralization continuity and to see what the size potential is. And I with with not a lot of holes, we can go in and get a lot more information about these these other occurrences that we have on the site to to support decision-m going forward as to whether or not at this stage, [snorts] you know, it's expensive to drill out resources and it's something that we could potentially leave for later on, right? we see that it's a smaller body that yes, it can add ounces, but we're going to have to spend this much money to drill it out and that's too dilutive at this point. It's it's a balance between how much it costs to pull those ounces into your your into your um portfolio at this stage, right, of the process. It's something that can be done later when the mine is in production. You can go in and drill it out as part of your ongoing development. >> That's actually a good point. Um and and it will tie nicely into some other stuff that I want to cover here later. But really what I'm what I'm asking there is if you find more gold would it be and forward looking and to your best of the best of your abilities and everything but would it be similarly deposited and therefore would it be similarly processable without too much again additional upfront cap could you find something that reasonably makes it into you know either an updated PA here or or PFS on on these two deposits? >> Yeah, for sure. everything we've seen, we haven't seen anything that's saying that the type of gold you might recover in these other other occurrences would be something that we couldn't recover through our our current process plant, right? They're all it's it's all hosted in granites. It's they have similar properties. They're gold bearing veins. It's it's simple minology from what we can tell. There's been no metallological studies done on these things, right? So, we're basing it on visual uh visual interpretations of the logging in the core in that it looks similar to box at Athena. You know, we've talked about that West mine granite. It's a body of ore right next to Aona. It's small. It's not big, but it's it's mineralized and there's not enough drilling in it to support a resource estimate. It's it sticks out of the grounded surface and the pit that they designed on this PA actually partially overlaps the body. So, we could go in there and it's it looks exactly the same as the Aonomine Granite. There's a chance to add some more ounces there. And yes, I mean there there's no indication that that wouldn't be something we could just throw through the process plant and and and add to and add to the production. Yeah. So next time you go uh exploring where where do you go, where do you step out, how much, what direction. >> Yeah. So so that's something that we're busy looking at at the moment with our financing just closed. We're we're we're wanting to get going on the drilling as soon as we can. And there there are a couple of different targets. I can talk about that more more generically. I at Box there is more to do. There are there's a big gap um that I've been eyeballing for a while now on the north kind of eastern side of the the body. It's it's at depth and it's below the the pit extents, but there's a gap of about 200 m um in drill coverage directly down dip from the from the body that just hasn't seen any drilling, right? There's a big hole in the coverage there that we want to put probably two holes into. And it's yeah, it's deeper down, but it's down dip from a from a gold deposit, right? You you want to test these things and make sure you're not missing anything significant down there. Um that's gold. Uh sorry, that's box at at a mention. Yeah, maybe I'll just jump in also at Box, you know, we we did some drilling there in 2021 and there wasn't, you know, the market, you know, didn't really respond. There wasn't much going on in the the the equity markets at that stage on on the gold projects, but we had some really compelling um intercepts um intersections outside of the mineral, you know, below the the PA pit, outside of the the mineral resource estimate um just down dipper box, you know, on the on the more on the southern side. You know, Gareth's talking more about the eastern side, but there we had, you know, 9 g a ton over 5 m. We had a 13.2 g a ton over 8 m, 8 g a ton over 12 m. Those were some of the highlights, but a lot of these intersections are in these what we were talking about these higher grade vein sets. So, there's more quartz veining. And what we could see from that initial wide space drilling down dip is what there's apparent sort of continuity. You know, it looks like these things could connect along these single or shoots or vein sets and could provide underground mining. Now, you're looking at like 9 g a ton, 13 g ton, 8 g a ton, you know, over substantial widths. These are very compelling underground grade. So what we need to do as part of this exploration program is go back in there and infill you know drill between these 50 to 75 m space holes and and look to establish that continuity and around which we can then start to look at a underground mining scenario because across that goldfield scint line it's the box deposit is wide open. There's one hole between box and Aona. It was drilled in 1988 and it's 4 g a ton over 3 m. uh it's at depth so it's it's part of our underground mining plan potentially but it really you know there's a lot of potential down there it's a matter of it's all underground potential but it's a matter of more drilling defining where these things sit the structural controls and then ultimately delineating resources but you know that's got the real potential there to also move the needle on the resource side so really excited to be be working that angle at box as well in addition to you know the frontier and the other targets that Gareth spoke about >> the money you you've just raised the 8 million bucks. How much of that is going to be step out versus infill? >> So, you know, we've got 2 million of $2 million of the 8 million is flow through. Um, obviously that's got to be spent in canon expiration. So, naturally, all of that will go toward this expiration drilling program. You know, we could get 4 and a half to 5,000 m of drilling there. It might be 20 holes. But again, what you know, to Gareth's point, we're looking to strategically locate holes. Now there's lots to do uh but locate holes to to pinpoint the best areas to point to that resource growth potential and then allow for you know some further followup. But I think this phase of drilling will be really important for the project as a whole in terms of tying together a potential larger resource growth plan and where to focus and yeah really looking forward to that. So it's you know none of it's going to be in full to the extent of getting indicated or anything like that at the stage in full to to tie together continuity. I think it will then start producing inferred resources on that on the underground scenario, but a lot of it's more just testing um you know stepouts and testing other targets across the property as well as you know some holes like at Golden Pond Triangle Frontier um these are all historical results you know we'll need some holes just to start to validate some of the historical results and then we can sort of do those those bigger stepouts to point toward resource growth. Um, how how far does this money carry you? It's 8 million bucks. You said 2 million flow three, which is which is all exploration. Um, yeah. How far is that the the the 6 million hard dollars going to carry you? >> Yeah. So, you know, there we've got obviously some key sort of PFS uh studies underway on on the on the engineering side. Um there's you know some in money obviously toward permitting some of the baseline work and um community side. So you know across gold fields you know it's another um you know call it five four to 5 million um and then obviously there is provision there for some starting expiration Mexico to the tune of around a million dollars once um expiration agreements are in place. >> Um I like the confidence there with regards to Mexico and and I'll definitely ask about that. the money that you have. I mean, it is um it's a bot deal that you that you raised without a warrant, which by the way, congratulations. Um not a huge fan of warrants myself. Uh but where it is a bond deal though and so it is a charity flow through as well. So, do do you know who who who the back end is? Do you have an an idea as to who who the end buyers are going to be or who will end up, you know, owning the stock in the end essentially? >> Um yeah, for sure. I mean we've obviously spoken to a lot of people leading into this financing you know various you know funds uh family offices um you know groups of that nature so yeah we we do have some indication of where that will end you know the the final book hasn't been provided we just closed this morning um so yeah we'll we'll have a look at that but certainly you know credible group and obviously working with a company like Coremark you know they've got a really strong reputation and we've always been about trying to put our our shares in in the right hands. Uh we've done that effectively to date and and looking to continue that while also, you know, broadening our shareholder base. >> Mhm. >> Who who's taking um the financing or how how's that um how's that how's that from the perspective of of you know is it is it mostly retail? Is it a lot of institutions? What's kind of that breakdown for the financing? >> Yeah, it's you know it's it's more family offices um you know investment funds, things of that nature. Yeah, it's not there are some retail investors coming in. I mean, some existing shareholders, you know, buying again. Uh, you know, they some of those shareholders got in earlier at 30 cents and they're still, you know, coming in at a dollar here. They they, you know, they're not selling. They they see the big picture. We $60 million company, you know, 3 million ounces across our two projects and plans to unlock that value. >> Um, timeline. I mean, you said you're going to be spending some money on a PFS, of course. Uh is it is timeline fixed now or would you want to see what exploration uh brings sort of next season? >> Sorry I missed that first part of the question. Antonio >> just asking about PFS timeline essentially when's the PFS going to be out and and what's the decision going to be? >> Yeah, so you know we haven't we haven't provided any guidance on that yet. Um the uh you know we we doing studies now toward PFS. Uh you know we've got uh the drilling we we plan to start right away. There's you know a combination of drilling here. There's the the flow through it's going to fund exploration drilling. We also need to do some drilling on the PFS side geotech mology. Those studies are all going to come together and then we'll look to you know to commission the the actual PFS uh later in the year. So there's no specific timeline committed to for PFS completion and that will make a you know statement down the road once we've collected some of these additional data sets needed. Do you think why am I asking about timeline is is because I'm thinking whether whether you think it makes sense to shop the project uh before that before you've gone you know and tested the other targets or before you have the PFS numbers there. Are you going to be you know actively looking for partners or potential buyers out there in the meantime or are you kind of going to you know sit quiet and and see what the PFS brings? Yeah, I think from that perspective, you know, we've we've obviously engaged with part with potential suitors for the project over, you know, the past few years, there's been continual sort of stream of interest and and some very reputable interest. And there's, you know, while, you know, production companies looking for new assets, you know, they sometimes will do their own PFS, FS, the there there's been some a few themes there in terms of identifying like just some key d-risking items, you know, in terms of some of the geotech, metaly, power, things of that nature toward the project. So, we we see the merit in in in d-risking those aspects. For one, it's going to help, I think, attract sooters, you know, number two, it's going to, I think, add value to the project itself. So, we, you know, we're looking to address some of those items um as we move the project forward, but also with the lens of, you know, should we actually look at an alternative production scenario as we described earlier where we we produce an on-site concentrate. These things would need to be done for ourselves anyway um if we're going to move the the asset forward. So, you know, we we are looking to gradually derisk it, address the priorities first and move this project along. You know, I think as we move it along, everything's shown in the past, it becomes more attractive and we feel there's opportunity to unlock value there with with more spend. >> Would any of those decisions depend on what happens in Mexico? like if you get the permit and then you know you have a you raise money, you do a drill program, you like what you're seeing there, would you would your opinion on gold fields change? Uh would you be thinking about I don't know spitting it out at that point or or selling it quicker so you can focus more on Mexico? Yeah. What's kind of the you know the combined thinking there? >> Yeah. Well, Mexico's look, it's an incredibly exciting asset. uh and you could quite quickly see a scenario where that project does become the focus for the you know the bigger focus for the company. Um it's got that type of potential for sure. Um you know we look at it more as a pipeline. Um you know we we try to march assets up that Lan curve. You know goldfields is is further up. You know it's we still believe it's got we can unlock a lot of value there. Um still through expiration through some key drisking. As I mentioned, uh, Mexico is a little bit further down the the curve there. We think there's, you know, the enormous, um, expiration upside there. So, we we see it as a pipeline, moving these projects gradually up and and looking to potentially transact along the way while also bringing in um, other projects, you know, new acquisitions over time, you know, perhaps if there's a divestment on gold fields, you know, using some of the the proceeds um to then look for for additional assets. We continue to do that being opportunistic. The uranium projects we generated reflects our you know entrepreneurial spirit there. So you to answer your long question answer to your question but Mexico could become a focus but obviously not taking the eyes off a gold fields where we we see the moving assets along that pipeline and creating value on all our assets. So, correct me if I'm wrong. Um, I don't want to be putting words in your mouth, but essentially Goldfield's backstopping value, Mexico upside optionality. Does that make any sense? >> 100%. You know, I think that's a lot of people see it. We see it like that. And that I think what's unique about our story is we have we have some, you know, real stability in gold fields. It's a robust development asset, top tier jurisdiction. Uh, it's it's it's comparatively derisked for PA stage project. It really more than underpins our value. If you look at a $60 million market cap and then you got Mexico essentially it comes for free and you know tremendous opportunity to unlock value there. I've spoken to a few people in um who work in Mexico and and since since you and I talked about this because the asset does interest me and and they've confirmed that it's not the easiest place to get community approval uh just historically because there hasn't been much operations and and uh whatever there has been history hasn't always been too kind to it but have you have you made any progress there already? What's the situation? Uh h has it changed between now and the last time we spoke? >> Yes. So I mean you're absolutely right. I mean Chapas is is not a well-known mining province. Um I mean what the project has going for it is it it does have a legacy of operating. You know, there's been around 90,000 mters drilled there between 2003 and and 2009 and and a lot of that was done by our predecessor linear gold who was able to very successfully you know through community programs um some key people on the ground there those people are back with us you know the people established relationships respected by the communities known by the communities so we working through that process now there is a process in in in Mexico for this it's a legal process it's controlled by the agrarian authorities and it's all about you know getting consent and getting expiration agreement signed through through a majority vote from the the land owners who hold the surface rights and that process it it takes time so we've you know we've continued to get support um you know these process are never straightforward but we are moving in the right direction with that and um in terms of timing you know it may be weeks it may be a few months it's hard to say. We need to go through the process and we don't control that process. You know, we've been providing the information. We continue to do that about the project, about the stage, uh you know, the impacts, the benefits. You know, we've we've spoken about the the specifics on agreements, but there's a process that we still need to go through there. So, uh we're working on it. We've got the best people we believe on it and uh you know it we we will continue to move that forward and with the view of of hopefully getting those exploration agreements um completed in the in the nearest possible time frame. >> Who's we in this situation? Do you have um people specifically working on the community situation in in Mexico kind of full-time? Is that something you deal with personally? Yeah. What does that look like? Yeah, we have a team um you know the the the main lead or community manager there um worked on the project previously back uh with linear gold 2003 to 2007. So he's leading the efforts there and then we have a few other people on the ground who've also previously been associated with the project you know some of them from the community. Um so it's it's a team of you know three to three three to four people you know different areas who engaging with various stakeholders from the communities to the church to the uh the the municipal leaders to the the state government. So it's really about um getting broad-based support across all the stakeholders for the project. You know we we we see that if we going to build a sustainable expir operation there for expiration and beyond we need to broadly engage across um all the stakeholders and build that foundation of support have everyone informed about who we are exactly how we're going to work and then we have to deliver on who we are and what we've said that that is key you know you can't just say things and do something different and we've been about that you know we've done that in in Saskatchewan and it's all about then implementation and managing things from a community perspective because um it it does it will require that on an ongoing basis and we've identified the people uh to do that once we we we able to start exploration. >> What does it really look like on on the ground right now? What are they what's the community telling you? Do do they have any any push back or concerns or requests? Uh you what's kind of the stage at which you are right now? >> Yeah, of course. You know, any engagement process is going to have questions, concerns. There'll be there'll be push back. There'll be certain individuals that aren't in support of you know we've had comments they aren't in support of mining and and mining is different. You know we we looking to explore here. Yes. The end goal is mining. Absolutely. There's no question you explore to but they're different processes right like we we talking about a process here to do some more drilling on the projects see how the potential of the resources are um take that forward. That process has certain impacts, certain benefits. When you get, it's the same as in Saskatchewan. When you get to a mining process, it's a whole new consultation. You know, you need to have how are you going to mine? What are the impacts? The benefits are substantially larger. That's a different conversation. Yes, they are interlin and you need to have that visibility through the process, hence the broader stakeholder support. But yes, of course, any engagement process be it will have not everyone necessarily in favor, but it's a matter of information sharing, educating about who we are, what we plan to do, and building stronger and stronger support for the project, and then being able to do it responsibly, able to the concerns or push back you've received during the engagement process, make sure you mitigate or address those so that those don't become issues in the future. So, it's a delicate balance, but we have, you know, the right team there to to to do that and manage it going forward. >> How far along that process are you like if if you had um I don't know like in a video game you had a progress bar and it says you know loading 67% whatever it might be. How what's the percentage going to be for you if you had that? >> Yeah, I mean we we are far along. uh you know we we've done you know we I'd say 80% along and some you know it's hard to gauge an exact percenture it might be 70 to 90 I don't know it's somewhere in that that region sometimes these process they aren't a straight line right you you take many steps forward and then there maybe one step back and then you take a few more steps forward and it's an iterative process you know it's you're dealing with people this these issues can become sensitive it's not a no well-known mining area. So there's more questions, there's more um input, but the you know the potential upside and rewards here for a project and I don't just talk from our shareholders perspective. I think you know definitely from a community perspective is is considerable. You know it's got the type of legs to be a a truly like a substantial project. You know, if you look at the historical resources, the opportunities just in the the cover rocks and then you got this big porefree system at depth which hasn't been evaluated to any extent. Um there's a significant opportunity there for for our shareholders but also for the community in terms of obviously all the benefits that can come you know through through employment procurement um you know socials and or economic stimulus to the community. So it's it's it's a process but we see the the potential there and we've we've had a lot you know from the land owners themselves a lot of strong strong support to see the company back and working. you know, it was actually we went down there because we did get interest from the community going back a few years like would linear gold, you know, come back and and do some work and that's uh, you know, come from some of the leadership there and they they've been truly supportive, but it's we need to complete this process and get it the foundation established to advance the project. Mhm. Well, as long as the progress bar doesn't get stuck at 99%, then um I suppose we'll be we'll all be happy. >> Well, you know, and that we like we look, we got to own the risks there and this is the risk. I'm glad we talking about it because it is a real risk for the project, but it's you know, also the opportunity there is large and uh you know, we working way and we believe we've got the right team and approach to to make this a success. So, we we'll keep at it and you know, linear gold worked there successfully. is I don't see any reason why it can't happen and and then go beyond um to do something you know substantial there and I think broadly speaking chapters are you know looking for investment foreign investment opportunities. It's it's a it's a very you know this it's an amazing state um in southern Mexico. It's actually rated the second safest state in Mexico. The you know the the rule of law and order there has been brought firmly under control by the the new governor. Um it's really on a good trajectory. So very proud to be working there, but obviously we we we've got a few more steps to take here before we can get there. And um but it's it's an exciting opportunity for us for sure. >> Is it reasonable to the best of your guessing abilities here to expect to see some work there uh in 2026? >> Absolutely. Yeah, we would we would, you know, we'd want to see that. You know, we we've worked diligently at this community engagement over the certainly over the past, you know, few months has been sort of a increased effort. You can't keep knocking on a door forever. You know, you've got to you've got to move this thing forward or or not. So, we we that's that would be the goal. You know, I think the earliest we could get drilling there given we have to first get expiration agreements then uh drilling permits and we've already spoken to the federal officer on the drilling permits. We've they've indicated they would support that. Um obviously, they need to get all the the details before they can approve anything. But earliest we could start drilling would be Q2 um next year but it may be Q3. But that that is the absolute goal and we need to respect the timelines the community's request for their processes but also you know in reciprocal requests like we need to also make in investment decisions uh for the company you know and there's certainly there's no lack of a things to do at Goldfields in terms of the expansion potential etc. But we need to we need to um look at that pragmatically and make the you know the best decisions. But we are very positive about moving Mexico forward and and uh you know hope to report some some good outcomes there in the near term. In in the sake of time I know you gentlemen almost have to run here. What's going on with the uranium assets? I know you've started drilling uh one of those with the partners. What's uh what's an update there? What's going on there? Yeah. [snorts] So, we've, you know, work's [clears throat] ongoing and it's, you know, great to have these these projects partner funded. We we we obviously like the projects. There's potential there, but, you know, we really focus on our our gold story now. So, it's, you know, it's non-dilutive partner funded. We can retain upside in those projects. We also do generate some revenues through option fees, um, some management fees there as well as like rental of our gear out of the uranium city area. We facilities there. So, that helps all to cover GNA. It's really a case of moving those assets forward. Um, and and hopefully a discovery upside there in the future for us. >> Um, when are you going to have some assays out of that or what's uh how's the drill program looking like right now? >> Yeah, we've got to um we've got to get those results in, you know, all this the full set of results before we can um report anything there. Obviously, Aerero Energy, our partner is is the funding partner. So we we work with them on that and they they drive the exploration sort of processes forward there. >> I ask you this um last time we spoke I'll ask to again it's been about two months. What's the most criticism been of Fortune Bay that you've heard in the meantime? >> Um criticism Gareth I haven't heard anything particular. I've heard I've had some compliments. Um I think we could get out more and talk to people like yourself and you make more calls. You know I think that we are working at the marketing side and it's sort of steadily increasing. Um but you know we Gareth and I are technical guys so we often like to just have our heads down on the on the technical side. Um Gareth, anything from your side? >> I'll actually I'll actually change up the question for you Gary because I didn't ask you that last time but from the technical side if you had a magic wand you could wave it and and make one challenge go away. What would you wave it at? >> Uh getting a few more employees to to help us get through all of [laughter] that, >> which I think we're going to be working on pretty pretty soon. That that would be my magic wand. >> It's it's busy. It's busy times at the moment. >> Are you guys looking to increase um GNA by any meaningful amounts and and take on any any like a lot of new staff or what would that look like? >> Yeah, we're looking Yes, for sure. We we need we need um you know we went through a period uh you know the last couple years where we were quieter right and we we've always operated trying to keep our burn rate low that's how we only have 58 million shares outstanding here you know we've been able to keep things lean and mean uh between you know the the core of it being Gareth and I um but as we now you complete this financing and we're looking to drill and and really get things moving we do need to um build up some staff you know obviously they will be fully allocated to the project so they they can draw down on on flow through there. So it's not really necessarily directly a bigger GNA for us. Um so we we definitely be be interviewing um candidates over the next week or so here and then be you're ready to enlarge the team um to support plans for the projects. >> Well well if you need a a professional joke maker although I'm not a very good one I I would still like to offer myself up for that job. We we'll have to get you into the field. Antonio, you you've got some good questions and be nice to show you the rocks at some stage. >> That would be that would be really cool. Um especially in uh Saskatchewan, although I think this time of year, Mexico is preferable in terms of weather. But uh no, I've been um it's been a good overview. You got to run here in a couple minutes, so I'll just uh close it off here. What do you guys wish I would have um I would have asked or what am I what did you come here hoping to talk about that I've failed to bring up? I think we've covered covered it all. Uh you know I think you know it was nice to dive into that the goldfields PA more. Um we hadn't had an opportunity to talk about that before. So um yeah no thanks. I think a great set of questions and always always good to talk to you. >> Thank you so much Garrett. Anything you want to add here? >> No. >> Thank you so much for sitting down with me today and hopefully speak to you again soon. >> Yeah. >> Bye. >> 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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$610M Gold Asset in a $50M Company | Fortune Bay CEO Interview

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