Transcript
Automated transcript · Written by software from the replay's audio. It can mishear names and figures; the replay is the record.
0:05 Can you talk about Core Management's track record?
0:12 My background is exploration. I've been an exploration geologist my entire career. I started companies like NovaGold. It's close to a $4 billion market cap. We developed the Donlan Creek project and brought in our joint venture partner Baric on that on a 50 50. We did similar thing with trilogy. She started about 10 years ago. Developing the Amber Money District and bringing in South 32, an Australian diversified company there to advance the Arctic and Boronite projects. So we've done this before. I liked the idea of developing resources and advancing them to pre-feasibility level of stage and then bringing in the major company to go the distance. So it's a model that's worked for us. We've had a lot of shareholder value with that approach over the years and over a variety of companies.
1:03 Can you talk about your key institutional shareholders? Sorry just before we do that, how long was that? It was under a minute. Let me time the next one exactly. I'm going to get my phone real quick. Okay. I should have a timer here.
1:26 Yeah, maybe do you have your cell phone on you? You can kind of like put on the, in front of like against your monitor or something. But my stopwatch on. OK, go ahead. All right. So the second question is, Can you talk about your key institutional shareholders? Yeah, we've got some interesting sort of usual suspect shareholders. John Hathaway with Tocqueville became a shareholder. Tocqueville, of course, was bought out by Sprott. So that's a big group that's involved with the company and has been for a bit of time here. Chris Mancini over at Gabelli Fund is another
2:11 sort of more typical, if you will, gold investor. They certainly see the value here that we've created, especially with this partnership with Kinross, where we can see generating cash flows of in excess of $10 per share in a very low risk approach to developing our project using the Fort Knox mill and using Ken Ross's expertise. So it's a good situation for us and I think both those shareholders recognize that. Awesome, so that was 49 seconds-ish. Cool, Question number 3. How is the listing on the NYSE coming along?
2:54 Yeah, we've we're putting our documents together for listing, upgrading to the New York Stock Exchange American Exchange. I think we're we're pretty well through the getting our documents put in place. So we'll make the application. We'll have to meet some criteria. I think our trading liquidity is one area that we'll have to work on. I'm hoping by the end of November, we'll have a good idea of all the criteria and whatever criteria we don't meet, we can then maybe address. So hopefully by the end of the year, we're up and trading.
3:31 Awesome. Next, can you speak on the division of responsibilities between CORE and Kinross on the JV?
3:42 Yeah, so Kinross is the manager and operator of the Peak Gold joint venture, and I think that's a great thing because it's their mill and their tailings facility that we're processing, that we'll be processing our ore at. It really leaves, frankly, very little for us to do. We'll be involved at the joint venture committee level in coming up with a plan and approving budgets. We've approved a $3.9 million budget for the last quarter of 2020. We'll meet again in December to approve next year's budget, but our guidance is between, is around 17 million for that budget on 100% basis, so our share will be a little over a little over 5 million. This work will be
4:28 directed mostly at metallurgy geotechnical and preparing the the project. So we're working on that technical and preparing the permitting for the project. Awesome. Move it on. Any worries about the Fort Knox facility having consistent extra capacity to take on the or that's being checked up from peak. Yeah, the facility. The 4 knocks facility. I mean, the whole reason why we did this agreement with Ken Ross is because of the excess capacity of the Fort Knox mill and tailings facility. And obviously it's only being utilized a little, right around half of the capacity of the mill. So on average, that's about 10 million tons per year. Our 1 million tons per year coming from the peak gold deposit will only incrementally increase that. But the grade of the Fort Knox ore is around 0.6 grams per tonne, whereas the ore that we'll deliver to the Fort Knox mill will be about 6 grams per tonne, so about 10 times the grade.
5:27 So this really is a great thing for the Fort Knox mill.
5:32 It certainly adds mine life and expectations of higher gold production out of the Fort Knox facility. And if you look at Ken Ross is corporate deck. You can see that this made this plays a major role in in longevity of the Fort Knox operations. Awesome, moving on. So Alaska in winters, how much of an impact will this have on operations at peak and on logistics?
6:00 And have you taken this into consideration in your financial models? Yeah, certainly Alaska weather here can be tough in the wintertime. It's, it was started out 20 below this morning and it's warmed up to a brisk 10 below. Interestingly enough, snowfall and precipitation are what are the most difficult for mining operations? It's not cold weather. The equipment actually operates better in the cold weather in terms of its fuel consumption. Because the lower temperatures have more oxygen, so fuel efficiencies actually improve. Obviously you got to keep people warm and safe. That's the main main directive in terms of any mining operation and. And whether it's cold weather or any other aspect of safety, that's the most important thing for anything that has to do with mining.
6:55 Did that go over and did that email that came in interrupt things? I didn't hear an email. Okay, I did on my end. I wasn't sure if you did or not. No, not on my end. And again, anything we're going to cut it up and then we'll send it to you for review obviously. We can't post it for approval. Yeah. If that interrupted things we can redo it. Yeah. Yeah. And if we hear it later on in the recording, we can always come back and record it one more time. Sure. So yeah, but I didn't hear it this time. Okay, moving on. How's the In-Field Geotechnical and Metallurgical Drilling Program coming along?
7:36 Yeah, right now we have a $3.9 million program that we approved for the last quarter of 2020. Just right after we signed the agreement with Kinross, we immediately approved that budget. That program's being undertaken right now with 2 drill rigs on site. We have a little bit of snow on the ground, but not a huge amount. And we're basically all set up for winter operations. So no issues there. We'll follow that up with a $17 million program. It's not been approved yet technically or officially, but that's we anticipate the 2021 budget to be. 100% basis, so our share will be a little over $5 million. Again directed mostly at metallurgy, geotechnical hydrology work in preparation for feasibility study, for 2022 and permitting starting in 2022. So a lot of work yet to do, but.
8:29 We've got a good partner, and we're pretty well set up to execute the plan. Okay. Awesome. How's your relationship with the Tetlin tribe?
8:42 The Tetlin tribe, we've had a strong working relationship with, we at Contango at least, have had a strong working relationship for the last 10 years, and so we've you know, we've tested the agreement on a number of fronts, and we've always found solutions were, you know, like in any agreement. You don't you don't know
9:03 all. You can't anticipate all outcomes, and so we've been able to work together to overcome shortcomings of the original agreement. And, good working relationship, and I'm very confident that with Ken Ross coming into the picture, They'll particularly focus as we have. On jobs and job training for the Tetlanders. And it's a very important aspect of this project from our side, and I think Ken Ross will view it very much the same way. Okay. Are there any concerns with COVID-19? And if any, what measures do you have in place to mitigate risks?
9:45 Yeah, certainly this year was a complicated year to try and execute a program with COVID-19. We proactively took the position not to have an exploration program this summer so that we would not interact with the village. Of course, in Alaska, Alaskan native communities have been devastated in the past by previous pandemics. So there's certainly a high level of concern about that. So we decided not to have an exploration program in the summer. And until we were able to put together a solid plan that we were comfortable. We're not going to introduce any chance of having bringing the virus into the village in the local community. Now that we're we've done that we are executing a program as a.
10:33 In the last quarter of 2020 here. It's a $3.9 million program where we've got 2 drill rigs working on site. And we're confident that we're executing that program in the appropriate manner.
10:51 Okay, are there any environmental concerns including migrating wildlife? Yeah, obviously there are always environmental concerns whenever you permit a major project. On a scale of 1 to 10, I would say this is at the low end of the scale. Our mine is located on top of a mountain, or on top of a big hill, actually. So we're out of the wetlands. We don't have any migrating caribou herds. Moose are important for the local population. So that's something we'll have a mitigation plan around. But from a permitting standpoint, this is a pretty simple project. We're located on private lands owned by the Tetlin tribe. We've obviously been working with them over a long period of time to over 10 years now on on how to best work with the community and avoid interrupting. They're normal hunting season, avoid interrupting their normal hunting season.
11:51 And I'm confident we can develop a mind around those same parameters. Can you expand on the potential exploration upside with the JV property as well as the 100% on lands.
12:06 Well I'm an exploration, Jaldis and one of the things that excites me most is the exploration upside of this project. Having an average grade of 4 grams over 1.3 million ounces is a great starting point for any mine, particularly when it's connected to infrastructure like we are at Peak. We have explored only a very small fraction of the 675,000 acres of the Tetland lease. And then the Tetland lease is part of the joint venture with Kinross. We have, you know, 90 plus percent of the Tetland lease to really explore in any level of detail. And then beyond that, we have our 100% owned state mining claims, north and northwest of the Tetlin lease.
12:51 And we've got a number of very high quality targets already identified, a lot of work
12:55 done to, they're basically drill readies on 3 or 4 targets. And so I'm very excited about the exploration potential and the exploration upside of Contango.
13:10 Okay, moving on. With 35 million cash on hand, Do you expect to be able to fund obligations, or excuse me, with 35 million in cash on hand, you expect to be able to fund obligations to production without dilution? What factors, if any, could endanger this? Can you hear me? Is it saying that you couldn't hear me there for a second?
13:33 Yeah, no, I can hear you. Okay, sorry. I just came to flash, no came flashing across the top there. So yeah, Tintago has $35 million. So we expect over the next 2 years to get to a construction decision that will spend probably on the average 5 to $6 million a year on the Pico joint venture. So that's a total of say $12 million looking to the upside. And at that point, we would look to, when it's time to construct this project, we'd probably look to a debt financing facility or a convertible note to finance the balance. Keep in mind that if we spend $17 million a year. On 100% basis that's deducted from the $110 million capital.
14:22 So because that's all towards feasibility and permitting, which are, of course, all deductible from, Project capital, So we're feeling we're in very good shape from a financing standpoint, and we can get all the way through to production
14:39 with cash on hand and by putting a debt facility in place say 2, 3 years from now. Awesome. Continuing onwards, major upcoming catalysts in the rest of 2020 as well as the first half of 2021. Yeah, we're we're exploring right now carrying out a $3.9 million program. It's in Phil. It's metallurgy and geotextile have some results from that to share with everyone. Probably early next year. And then we'll be executing our, In December will approve and execute our 2021 program and plan, which we estimate will be about $17 million additional drilling work. Some additional infill metallurgy, geotech, etcetera. And as results for that program come along, we'll be executing.
15:37 Sorry we'll be announcing that to the public.
15:41 In addition, we'll next summer will start exploring our own 100% own lands and. I'm looking forward to sharing results of that. Probably next fall on drilling at Triple Z and on our own Eagle and, Don't create projects, so should be a very exciting news flow for next year from an exploration standpoint and from an advancing. The people trying venture as well.
16:07 Awesome. Can you talk about existing infrastructure on and around the Peak property? One of the big advantages the peak gold project has obviously, you know, in Alaska, a lot of projects are in remote locations, and we're not. We're 15 miles off of the Alaska highway. We have, an access road linking our project up right to the highway right now. We would need to improve that to allow for constant or haulage on the Alaska Highway. But it's just improving a road, not building a road, not permitting a road. So huge advantage there from a project development standpoint. And of course, with our project being connected to that infrastructure, we're connected by road to the Fort Knox mill. So we mine at site, we crush at site, we load the ore up into the trucks and haul it to the Fort Knox mill. So very, very simple execution plan.
17:10 Awesome. The, that rig on your phone did register through. I don't think it's a huge, I don't think it's a huge issue. It wasn't like- I just turned it on silent, sorry about that. No worries. I'm just letting you know, I personally don't think it'd be a big deal, but if you feel comfortable, we can record that question again. Up to you. Sure. That's fine. Do You want to do it again? Sure.
17:37 So can you talk about the existing infrastructure on the Peak property? Yeah, one of the huge advantages that we have with our Peak Gold project is that it is just off the Alaska Highway. So we're literally about 15 miles off of the Alaska Highway. We have, so we don't have a road to build or to permit. We have to improve the road and upgrade it so that we can haul ore from the peak site down to the highway and then up to the Fort Knox mill. But that's a huge advantage over a lot of projects in the state where that have to, or they're located in remote areas and have to either build 300 mile pipelines or 200 mile roads. So. Very easy execution plan for us, improving the road.
18:25 Mining on site crushing on site loading the crushed or into trucks. These are highway trucks, not mine trucks, but highway trucks that then haul the ore up to the Fort Knox mill, dump it on the stockpile, and then feed it into Fort Knox mill. So incredibly easy execution plan. Awesome. Next one, Just 3 left. Can you talk about the high-grade nature of the deposit? One of the other advantages that we have at Peak Gold is grade. And as they say in our business, grade is king. We have 1.3 million ounces of gold outlined, measured in indicated categories, so it's well drilled, well defined, and it averages around 4 grams per tonne. So that's high grade for an open pit in anybody's book.
19:18 We've only explored a small percentage of 5 kilometer long trend along the peak and North Peak deposit lines, and then there's several other. Major target anomaly trends over on the Discovery and on the Saddle that we have only done a very little bit of exploration work on. So a lot of exploration upside yet to be found along trend and along these structural corridors that we've already identified the 1 million ounces of resource. Okay. Can you talk about Alaska as a mining jurisdiction? Alaska is a great place to work. Of course, I grew up here and I know the state very well, but it is we are the second largest gold producing state in the United States.
20:07 Rule of law resources is the backbone of the economy up here. So we have a very well executed permitting environment, both at the state and the federal level. The Corps of Engineers is great to work with. We've done a lot of work with them over the years on different projects from Don Lund to the trilogy. And in the current project, 404 permit is the only federal permit that we'll need to develop our peak gold deposit. So I think Alaska is a great place to work and I think we're in a great position because we only need 1 federal permit and by developing a very, just a small mine, relatively small mine, and not building a tailings facility and not permitting a tailings facility or a mill, it certainly makes the execution a lot easier.
21:07 Okay, a very last question. Can you talk about some of the other elements, such as silver or copper, in the deposit? Yeah, I think gold deposit is certainly mostly gold. There is a nice little silver credit as well. But the region is known to have a lot of gold, silver and copper. And all 3 of those metals are particularly associated with porphyry style deposits. The peak Gold deposit is the Scarn deposit, so it's mostly Gold and Silver, but What generated that deposit is most likely a porphyry related system and we've yet to find it. We're still exploring for it and we'll continue that effort.
21:55 One of our targets nearby is called the ZZZ. That's a project that we own 100% of and it is a porphyry system. We've established that based on drilling and the geophysical characteristics. So we certainly see the potential for all 3 metals, gold, silver and copper. And we'll continue to explore the properties for all 3 metals. Awesome. So that is everything. Computer has been super slow. Can you hear me? There you go.
22:55 This is your Dan Daniel Beriken. Yeah, that's our CEO. Yeah, I logged in using his account by accident. Because it's got all the admin access, so it just needs to be a few things. There you go. But yeah, are there any other questions that maybe the process of answering you want? Yeah, no, I think that covers a lot of ground. So I think that's a good... So if that email that came in and chimed, if that bothers, if that comes in a bad place, we can just re-record that if you want to later.
