How a Strong Gold Market May Impact Juniors in 2024

0:07 All right, everybody, let's get started here. My name is Trevor Hall. I'm the CEO of the Clear Commodity Network and also host of the Mining Stock Daily podcast. Been going at it for a number of years. You can find all of our content, which we publish almost daily, anywhere you get your podcast feed at. And I'm really grateful to be asked to host

0:33 this 6 presentation on how a strong gold market may impact the junior sector in 2024. We've got 3 great individuals here from 3 different companies working in 3 mostly different parts of the world. Luke Alexander of Nucor Gold, Jim Atkinson of Advanced Gold Exploration and Brian Skanderberg of GFG Resources, excuse me. So just for pleasantries, we're gonna make sure each of these individuals gets about 2 minutes of a quick introduction to their companies, and then we will start in on the discussion at hand. But before we get there, just a quick housekeeping note. If you do look at the platform here in the webinar, you are allowed to kind of raise your hand and ask questions.

1:21 We will try to get to those questions towards the end of the presentation. All right, everybody. Luke, why don't you go first since you're right next to me on the screen. Yeah, sure. Thanks, Trevor, and thanks everyone for joining. Yeah, so my name's Luke Alexander, President and CEO of Nucor Gold. Nucor Gold is advancing the Enchi project in Ghana. Last week, we put out a PEA, which outlined very robust economics for the project at an 1850 gold price, after tax NPV of US 371 million, after tax IRR of 58%. So fundamentally underpinned by a very robust PEA that we think will ultimately re-rate the stock as the market starts to recognize the fundamental value that this project has. But then we've also got huge district scale exploration upside across our project.

2:18 248 square kilometres, we've only drilled on 9 of 25 targets identified to date and the pits that currently constrain our resource are only down to 75m, so lots of opportunity at depth as well as greenfield targets across our project. So Newcor Gold, district scale exploration, fundamentally underpinned by very robust economics outlined

2:45 in a PEA and very well backed by institutional investors and management and board who own 22% of the company. So we're truly aligned with shareholders from that perspective.

2:59 Jim, you wanna take the stage here? Sure, Yeah, Jim Atkinson from advanced gold exploration. We are a little farther down the line from from Luke We are strictly exploration. We have gold properties in Ontario and gold properties in South Carolina In Ontario, we have 4 4 gold properties including a former gold producer in the Kirkland Lake Camp, which we've drilled on in the past. That's exemplified by high-grade veins with visible gold at surface. We're a little bit more excited that after we've done the drilling because we've now identified some other targets there that have never been explored. We have another project in the Batchewana Greenstone Belt which has basically been compared to Hemlo by people that discovered Hemlo and sort of probably know what they're talking about. We have some high-grade gold intersections on that property and it has not been worked on since the 1990s.

3:59 And the reason they stopped working on it in the 1990s was because of the price of gold fell to $300 at that time. The other properties we have in Ontario are a little farther,

4:11 more sort of greenfields, including a property which sits right beside

4:19 the open pit of one of the companies in the area. The property that we're interested in in South Carolina includes a former producer. It has a resource of maybe 70,000 ounces of gold. But South Carolina is starting to pick up. We're getting some of our neighbors are intersecting some pretty spectacular intersections in the area. And we're kind of hopeful that the same kind of geology continues onto our property. We have 2 aspects of this property. As I said, 1 is the former gold producer. The other one is a highly altered intrusive, which has epithermal gold veins around it. The one gold vein that's known there is only had 1 drill hole in it. It was 28 metres over 2 and a half or 28 grams over 2 and a half metres. So we're a little bit excited about that. So we're kind of still at the stage of grassroots exploration, although we do have some gold on some of our properties.

5:21 Thank you, Jim. Brian, go ahead. Thanks very much, Trevor. Brian Skanderbeg, the President and CEO of TFT Resources. We're a Timmins focused exploration vehicle and control about 800 square kilometers of ground, both east and west of Timmins and in 3 large blocks of ground. The most advanced project would be our Gold Arm project. It has 2 targets, Montclair and Eljo, one of them being a historic producer, namely Eljo and Montclair being drilled since the 30s all the way through to the 80s. A nice looking system there as well. The ground and tenements we have are a full pipeline of projects here. When we look at the ground west of Timmins, this is Dore and this is Penn Project. These are large-scale land positions, 50-60km in strike length, and really buttress the holdings of both IM Gold, Newmont, Evolution, Pan American. These are all our neighbours in the Timmins belt. When we think about our philosophy here, we really feel Timmins is a

6:24 great belt to work in from an infrastructure point of view, from a discovery point of view, and obviously a long history of mining. Advanced Explorer focused in Timmins, we're about a $25M market cap company. Our management formerly of Clode Resources has been involved in relevant discoveries before in Saskatchewan, taking Clode through to a successful transaction and a pretty good track record in both discovery and production side of things. We have a secondary asset in the US called Rattlesnake Hills which we own 100% of. Haven't been active on that for a few years but we're hoping to come to the market here in the next short term with a strategic path and really finding the right path to advanced rattlesnakes. So Timmons focused exploration vehicle, small cap exploration consolidator would be the main theme here. Goodbackers, Alamos and the Lundin family are our largest shareholders.

7:17 All right, thanks, everybody. Let's kind of get into the topic at hand here and really talk about how this gold market is affecting the junior exploring equities here. We've seen a very meaningful move in the gold price. Unfortunately, today it's kind of taking it on the chin and we're down 2% about just over $2,300 per ounce in the futures basis from a futures basis. Looks like we might be heading down to that 50-day moving average, but there was a huge spread. We were completely overbought here in the gold market as far as the physical metal goes. But, you know,

7:56 at least from our screens, it necessarily wasn't the rising tide that lifted every single boat, especially the juniors. So I guess my basic question for the 3 of you is, you know, kind of what you're seeing from your desk as far as interest in precious metals exploration equities. Are you starting to garner a few more insights and phone calls from people that maybe had been absent the last couple of years? Are these investors moving back into gold exploration yet? And I guess, Brydon, you've been around this block a few times here in a couple of different cycles, a couple of different companies. Give us maybe a sense of what you're saying. Yeah, I think it's still yet to move down to the exploration space. GFG's completed a financing year just a couple of weeks back and we closed on about $2.6M.

8:49 Look, that went well. We had good backers from the Alamos and our long-term supporters. But if I had to say, is there new money coming into the space? I would say it hasn't quite filtered down to the explorers yet. One of the graphs I like to talk about is the gap between explorers, developers, producers and the other one is between equities and the metals. And those 2 trends really show that the sector hasn't really moved yet at the explorer level. So I would say it's coming yet. It's also involved in a company called Westdome at the producer side and you know at that level of the space you do see the multiples improving, you see improved liquidity, you see the share price performance on most of the mid-tier graphs, and that's a very strong portion of the sector. But developers and explorers, I think, have a lot of room yet to move, and I would argue, particularly in the explorer space, we haven't moved far yet.

9:45 Luke, you've seen some good volume into your equity after that PEA and what are you seeing in the last few days here? Yeah, I mean specifically for us, obviously the PEA that we put out was very well received by the market. I mean, stocks have been up every day since on big volume and there's lots of big bids in the market today. So, I think ultimately when you deliver a study like we did, that can be a real catalyst and a game changer for companies. On the exploration side, similar, if you deliver great results, then that can be a real catalyst

10:25 and game changer for a company. So, over the last few days, we've seen a huge number of inbound calls from different groups, and investors, investment banks, corporates, just really wanting to get a more fulsome update on what, you know, on the economics of the PEA and get into a lot more detail on it. I mean, yesterday I was in meeting with one of the investment banks and there was a dozen people around the table and that's more than we've seen

10:57 with that same group in the last couple of years. So, I think we are starting to see more interest, you know, coming into the sector as gold ultimately, you know, holds in around the $2,300 level. And I think that's a good sign from that perspective. Jim, do you have any feedback or insights on what you've seen in the last couple of weeks or months? Yeah, I mean, even in our small little market cap where we are, we actually are starting to get some trading. I'm agreeing with Brian. I think it still hasn't filtered down to our level yet. I think it will, and I'm sort of hoping and waiting that FOMO will kick in and people will start to realize that they're missing the boat here. You know, certainly there are a lot of letter writers, a lot of people that you read, you know,

11:45 that are actually talking about this gold price. I heard it for the first time a couple of weeks ago on Bloomberg News and that just blew me away. They don't talk about that stuff. They talk about meta and all that. So to me, I think it's starting to filter down to our level. I think what's going to have to happen is, you know, once the big guys take up the ones that they can, and then the next level takes up, you know, it'll filter down that way because

12:12 even the mid-tier producers, they need resources. So they're going to be looking around for resources and I think the really intelligent ones will get in very early into some of the explorers and you know, like Luke's company or even some of the ground that Brian has, you know, this is stuff that you know, companies can get into relatively inexpensively and promote and develop it. I think, you know, that's where it's going to happen. I think what's going to be the next big investor in the junior mining space is going to have to be other bigger mining companies because I agree there's not a whole lot of interest

12:51 amongst the investors that I see anyway at this level and I think that's where we're going to have to start looking for help is from the other bigger companies. Just as a note, you know, every day during the prospectors and developers convention, the price of gold hit a record every single day and nobody was talking about it and that really

13:14 surprised the heck out of me because I've been at many conventions in the past and that's usually one of the things that's the top of the topic. So there's a, I think there's still a bit of a gap there before people start to come into our space. Yeah, it's a rare occurrence that usually we get the PDAG curse where the gold price gets slammed during PDAG. This was a different year. Yeah, it was really interesting. I had a similar

13:42 kind of feel when I was in Zurich a couple of weeks ago for the European Gold Forum, and at the same time gold was hitting a record high and there wasn't a whole lot of new people or new investors there. It seemed like a lot of the same group. But maybe this turns around. Jim, you did mention something pretty interesting. You mentioned the big producers perhaps coming in and providing support and strategic investments for exploration development companies here. And maybe for the 3 of you, there's an open-ended question. Isn't it pretty relatively cheap right now for those,

14:20 because the speculative money hasn't necessarily trickled down into the exploration sector, isn't it pretty cheap for those big producers to maybe allocate capital and acquire those ounces than it is for them to just go out and explore for it themselves? Well, it certainly is. And I've been in the business long enough to remember when that was the case, when you had Tex and Miranda's and Ecos and those guys supporting junior exploration companies. And I think that's something that should come back and may in fact come back, because I think it is a hell of a lot cheaper to support 5 junior companies than it is to support 5 exploration departments of your own. And I think that, I think it's, I'm really hopeful

15:06 and pretty optimistic that that's going to start to come back. And, you know, it already is a little bit, as Brian says, he's got Alamos and Lundin. These are, you know, These are people that understand that you have to get in at early stages. All right, Brian, ask me, I'll ask you a little bit about kind of what you're seeing. I mentioned before you've seen a number of cycles in gold with a number of different companies. Have you ever seen a gold price rise $600 and then it was still crickets on Howe Street? Yeah, I mean, it's no is the answer. But the driver of the gold price is different this time. Right. So I think we have to look at, you know, what's what's really moving gold price and why those investors are moving to the metal and why they're not moving the equities. And I think we all understand maybe the delta this time is central bank versus ETFs.

16:00 And that's a that's a key distinguishment in terms of gold price move, maybe now versus the historic 2 cycles.

16:07 And so, you know, when I think about that, it hasn't filtered yet to equities. So then what does drive the filtration down to equities? And I think it's when you see the balance sheets really move and the big guys, you see the free cash flow move of those and that's the trigger point to me. So when you think about a producer right now making $3,200 Canadian gold on a budget that might have been around at 2400 and I'm just using an example that's close to me, but that's a huge delta in the free cash flow. Those will start showing up in Q1 here and Q2, Q3. So the big guys financials in Q1 look pretty strong. Most of them are outperforms. So I think that's a tipping point here to start driving the corporate participation and moving the investors, bringing in more investors, because the reality is the central bank's never gonna buy the equities, it's gonna buy the, it's been showing to buy the metals.

17:03 So what has to happen is we have to show the yields, we have to generate the financials to drive the generalists into space. So it's a little different path, I think, than historical cycles. And that's why I think it's a little different results in terms of how quickly it's translating through to a new core or an advanced or a GFG.

17:24 Let me stick with you, Brian, if I may. We had talked about kind of we haven't seen that speculative money come into the exploration. I'm actually really, I'm highly anticipating to see what the big gold producers financials look like for Q2 when they're published, you know, August, August time frame, or late July. Anyways, in I'm wondering if that I make, I am expecting an improved margin for the producers. But I'm wondering if that kind of brings people back into the gold equities. And by back, do we start seeing more speculative

18:02 capital come down into the developers and exploration stocks. And I just wanted to ask, based on your experience, what you've seen, is there usually like a catalyst or a time where it's like the rest of the street realizes that they've missed this and there's your opportunity and then it actually brings money back down into exploration stocks. Yeah, I mean, to me it is the translation of the financials.

18:28 So if you're not going to move on the metal price, you're going to wait for the translation of financials and see if inflationary pressures have been appeased and if we can actually translate it through to AISC margins of 40 plus percent, which is where we hope things go within the producer side of it. So that to me, that Q2 is critical. You're seeing a bit in Q1, but I think the metal price move only impacted about half the quarter from the big move of metal price here in Q1. Yeah, so I'm optimistic that it will come with those. And let's say it doesn't come. And then you're forced with an equity that hasn't moved but a full bank account. So you're gonna buy your stock, right? So I think a normal course bid or, you know, other sorts of sorts of shareholder return from the big guys will become even more prominent than they are now if you don't see the equities move.

19:21 I want to move the conversation over to financings and raising capital now. When Luke tells me that he was in a room with 12 bankers, I can only assume the conversations of what's happening on that term sheet negotiation.

19:39 To be clear, Trevor, it's 12 investors who work for an investment bank. We're not paying the street enough money to have 12 bankers in a room.

19:57 These are high net worth investors. But yeah, those 12 bankers are sitting in the BHP room at the moment trying to figure out how to go hostile on Anglo. Yeah, these are portfolio managers within investment banks. Well, we can talk about that big merger news here, potential here later in the discussion. But I do want to ask you... The only bigger news last week, Trevor, was the PEA out by Nucor. That's absolutely correct. I couldn't agree more with you, Luke.

20:31 But let's talk about financing. Listen, the market, the bear market we were in, and perhaps we arguably maybe still could be trying to climb out of currently, it was really tough. I mean, there was a lack of ability to finance. If you were able to finance, it really wasn't, I guess you can arguably say poor terms for the companies needing the capital incredibly dilutive many times but costly and necessary for the light I mean that's just kind of you know it was it was a tough time It was a tough market to need capital and raise in. Are we getting to a point where we can, you at companies can go in and talk to those dealers and maybe improve the terms where you can for bringing in capital for your work. Luke, let's start with you, because you had a tough financing at 15 cents about a year ago, you had to do it. And it turns out those people that participated are doing okay now.

21:37 Yeah, I mean, so we benefit from the fact that we've got 45% institutional ownership, deep pocketed, long term focused investors who recognize the district scale upside of our project. So we're fortunate in that sense that we've got backing that takes a 5 to 10-year view and regardless of where the market is, they see the value and look through the peaks and troughs

22:04 of the market. In some ways, I actually hope the floodgates don't open again from a financing perspective because the issue is that as soon as they do, all these PowerPoint presentations get dusted off and dozens of companies are showing up raising capital, hundreds of millions of dollars are raised. And then the market rolls over again. Investors lose a ton of money and ultimately

22:30 have a negative view towards the sector. So I think, you know, yes, having the market open from a financing perspective is helpful. But I think limited opening, I think would be ideal because, you know, there's still too many companies overall in the sector and projects that shouldn't be getting financed in a bull market ultimately do get financed and investment bankers are looking to clip fees. So Yes, I think there is opportunity for projects to get finance. But the reality is public companies, investors can go buy the stock in the market. So it isn't necessarily that you need to have for investors to invest through placements.

23:21 The best thing for a company is for them to go buy the stock in the market because that re-rates the stock and pushes it higher. So, I mean, there's a balance there. Yes, we're in an environment where, you know, money is going to be more available. I just don't hope it becomes easy money because that has adverse effects for the overall industry.

23:42 Yeah, I agree. I think the other thing that we have to avoid, and this happens, we've been through a few cycles, What happens is everything goes crazy and you can't get workers, you can't get drillers, you can't get geologists. And so the money that's raised is basically sort of wasted. And I've seen that happen a couple of times in massive bull markets where, like you said, tremendous amounts of money gets raised and basically gets wasted. And that does hurt the industry in the end, you know. I've been through a few of these in the past and

24:14 I've seen them. I think the one thing that's, just a point, just a little bit on your point, you know, we were having trouble during the bear market because, you know, why would you go out and try to sell somebody's stock at 5 cents or 10 cents when they can go in the market, like you said, and buy it for 5 or 3 or whatever. And that was a big, a real big problem if you're not getting any kind of volume. I think volumes are starting to pick up. I know ours is starting to pick up and like you said, that's really where at this

24:45 point in time I think you want to support is in the market to get your price up, get it re-rated so that when you decide that it's time to do a financing, it can be done at a reasonable level. I think that's the thing that I think we're all looking for. I'm pretty sure it's gonna turn over. It's turned over many times in the past. And you know, the foremost dangerous words in the investment business, this time is different. I don't think this time is different. It's gonna happen again. And we just have to be sure that we don't, like you said Luke, that we don't destroy the whole thing by being silly about it.

25:25 Brian, do you have any feedback or anything on financing terms right now?

25:30 Yeah, it's still pretty tough. I mean, to me, it's you started off, you said, accept the dilution. And my flip side of that is or accept irrelevance. Right. So we might not like a term of 8 cents or 10 cents or 15 cents for whichever group we are. But we're certainly not going to like it and our shareholders won't like irrelevance.

25:51 So yeah, it's kind of tough to find the capital in these but those companies that have strong backers that have done good work through this cycle continue to get financed. And I think Luke's comment is absolutely right that there's still far too many stories out here and there needs to be a rationalization of the community of those effective parties that can access capital or have quality assets that need to move together. And hopefully that can happen. And you're seeing pieces of that where companies are choosing strategic paths that include consolidation of market neutral premiums, things like this that you feel taken off. Alamos recently bought Orford and that was right at the bottom of the cycle and it provided shareholders some liquidity that probably really, really desired it. And from an Alamos perspective, they've got a great district for a relatively low cost. So, you know, I think you're seeing the pieces of the sector that indicate,

26:56 you know, people are needing to make decisions to move forward. Some of them will include consolidation. Some of them include doing the dilutive deals and accepting that's where it is to go forward. But those are all still signs you're pretty low in terms of valuation in the sector norms and where we are in the cycle. Yeah, and then I also think, Trevor, just to add to that, and Brian makes good points there, is that through the downturn or the lows in the cycle, managing the amount that's raised is also important, obviously, in terms of work programs and how you move a project forward. So you know for us for instance over the last 2 years we you know we managed the amount we raised and we raised less than we had historically but continue to work on the project, move it forward, so that as we see the market starting to come back, the companies that have been doing work through those down times should be the ones to ultimately re-rate the quickest, because that work that had been done over that period starts to get reflected into the stock. Whereas, if you've been irrelevant for 2 or 3 years, well, there's nothing really to re-rate the stock. So I would agree with that point that yes, you need to be continuing to move projects forward and managing the value that's being added

28:27 according to dilution and where the company sits. Let me ask you somewhat of a. Now, maybe rub people the wrong way, but I can see it because I'm American and not affected by it. Luke, Luke can't maybe you can comment, but since his project is based in Ghana, he can benefit from this. But I want to ask you, Brian and Jim, about the charity Flow Through financing opportunities for Canadian projects in the last 2 years. Was it to benefit, to keep projects going and put exploration dollars into the ground? Or was it, did you see it overused and perhaps the flip side not killing projects that the market itself would have liked to see go away?

29:17 Go ahead, Tim. Well, that is an interesting question because the driving force behind flow through or charity flow through is not the exploration in some respects, the driving force behind it is actually the tax benefits and that may not be the proper driver for or let's call it efficient exploration. I know that there have been cases, you know, where I think money has been not properly spent. I think that's less common than it was when it first started, but I agree with you. There may have been cases where the projects, and there may still be cases where the projects should actually die. And, you know, we're geologists.

30:04 One of the bad things that happens is we fall in love with our projects. And we have to get to the point where we can say, listen, this is a dead project. Let's go spend our money somewhere else. And with flow-through and the ability to have that money there I think that's that becomes a real challenge it becomes a challenge because your flow-through subscribers expect you to spend the money and you know they expect you to spend the money you know quickly in the years that that you get it And so it doesn't really necessarily allow you for deep thought about what you're actually going to try to do. You know, theoretically, you're supposed to have your plans in place before you get the money, but we all know that that doesn't necessarily happen. So I think you could make a negative case for flow-through, although it certainly has helped a lot of companies make discoveries and move ahead. So like anything, I think it has good sides and bad sides. And that would be sort of my quick take on it. It can be good or bad.

31:11 I would maybe add a bit. For us, It's almost like how you choose to use it. And we use both traditional flow-through and charity flow-through in our last 3 or 4 financings. And there's utilization of a charity flow-through into a corporate structure where from a corporate standpoint, there's a strong net benefit to the company. And so in this tough market where capital's maybe a little more difficult to come from, the additional component that charity flow through, and I would add life exemption to that as well, and even traditional flow through does in terms of the dilution side, I think is a huge benefit. So, you know, there's definitely commentary around the change of tax legislation of charity flow-through and traditional flow-through that's eroding the benefit.

32:00 I personally think that will have quite a negative impact on the exploration dollars going into the ground. And that's just the feedback I've had from the charity flow-through providers. But you also see it in the effect of even a traditional flow-through participant, where alternative minimum tax starts impacting a traditional flow-through participant and it erodes their motivation. Now, if you're gonna put a flow-through investor in that only wants to hold your stock for 4 months, yeah, I think the argument is there's not a big benefit. But if you're gonna sell a charity flow through to an Alamos or to a Lundin family, like that's just makes good sense from a dilution standpoint. So- That's a different, yeah, that's a different thing. I think there's 2 sides to that, but I personally think for us as TFT, both of those structures are very useful and beneficial and they're being eroded under the current sort of legislation.

32:55 Well, just as a quick aside from that, you know, the fact that they're changing the capital gains, we all know that our investors, they're looking for 10 baggers, they're looking for make big bucks. So if you say, well, we're gonna take 2 thirds of that away from you, that's gonna make people think twice about if they wanna be in this space or not. That question was maybe a little bit off topic to the point at hand, but I did think it was pertinent to be asked. So I appreciate. Yeah, and Trevor, I'd just add to that. I mean, if you look at, you know, Canada consistently, you know, it ranks at the top of the board in terms of the amount of exploration dollars spent on an annual basis. And I think that big part of that is because, again, regardless of what the cycle is, the Canadian government is supporting the industry through those flow-through tax credits. So, it kind of means that the industry can survive through the cycles And that's why Canada ranks consistently at the top of the board.

34:05 My last big topic I have for this discussion, gentlemen, is about economics. And not just Luke's Enchi economics that he published, but really about general economics on the back of inflationary pressures. The rising gold price, it's improved the economics of many projects, but the lesson of the past years has been if companies can manage inflationary pressures, those expectations and CapEx overruns as they move into more pre-feasibility, definitive feasibility type of studies. What effects has this had on Explorer's messaging in the market? Has this rising gold price subdued those expectations?

34:54 Has it cleared the pathway for companies to show positive economics when the market is still kind of questioning what is feasible to get built and what is not? I think in terms of if it goes back to the discussion as well about, you know, we've got gold prices hitting all-time highs, but the equities haven't necessarily responded the way you would have expected them to. And I think that's partly a result of margin compression. So we've had all in-sustaining costs going up in line with the gold price. Obviously we've had a big move in the last 3 or 4 months in the gold price. So you'd expect that to help from a margin expansion perspective. But we've started to hear a number of the senior companies talking about how, you know, they're expecting costs to flatten and in some cases even come off as you know, we start to hit peak inflation from a cost perspective. So I think that's one of the big things we need from a market perspective is to actually see margin expansion and that flow through to the bottom line for a lot of these companies. Because, I mean, You know, $2,000 Gold and $1,500 all in sustaining costs, it's the same as $2,500 Gold and $2,000.

36:23 There's $500 in margin. So if we actually look at a lot of these companies in the way generalists do, they look at these as businesses. And what is your margin? You know, what's your EBITDA? All those metrics that, you know, once you get into certain areas of the mining sector aren't a focus. But for the big senior companies and the generalist investors to really see that wave of money flow in, we need to see consistent margins for the seniors. And I think we're starting to ultimately see that with a lot of them. In terms of the benefit, obviously, for development stage projects, Well, I mean, that's pretty clear that when you start to run your studies at a $1850 versus a $2050 versus a spot price of $2350, the economics that come out of those studies are huge. I mean, for us, we go from $370M at $1850M to $630M at $2,350M.

37:30 Our IRR goes from 58% to 92%. So the impact there is obviously significant. And then from a project development perspective, when you then go to the banks to borrow money, they're obviously looking at the various metrics of coverage ratios and payback periods and all those things. So all of that obviously helps in terms of the development of a project. Luke, how did your CapEx get affected from the previous PEA compared to this one? Our upfront CapEx went from $97M to $106M. What we were specifically able to do was move our crushing and the capital for that into years 4 and 5, because we have very soft oxide transitional material in the first 4 years. So if you look at on an apples to apples life of mine capex, we went from $142M to $216M.

38:35 We did increase the overall size of the project. So we went from 89M to 122,000oz. So it's not apples to apples because we're looking at 8.1Mt versus 6.6Mt. But roughly speaking, that's the increase we've seen. Interestingly, from 2021 to 2024, we've actually seen some costs that have been the same or in some cases actually gone down. So again, I think that's positive for the sector as a whole that some of that peak inflation that will lead to that margin expansion that I'm referring to for the seniors, the numbers we're looking at, some of that should be flowing through into Q2, which Brian obviously highlighted as an important quarter for the sector.

39:30 Brian or Jim, how is this inflationary expectations, how have they affected exploration? Do you think the market... Well, they certainly have affected exploration because, you know, costs are going up. Although, It is interesting to sort of just go on with what Luke said. Drilling costs, for instance, right now, are pretty similar to what they've been for the last few years. So there is some inflation going on in the exploration side of things, but I think not as much as 1 would expect. And mainly because, well, one of the reasons was it was a lot of work. So that helped kept the prices down. But as far as that, I think, I'm interested what Luke says about that, that when bigger mining companies or even the intermediate guys start making money, then people look at the whole sector and say, wait a second, this is a sector that can make money. Maybe this is a sector I need to be involved in, you know, and it would be the same as looking at a shoe manufacturer or something, you know, this company makes money, this sector makes money, and I should be in that, and rather than the speculative, you know, mining investors, you know, they would be the more generalist people that are in it looking at, like Luke says, looking at it like a business and saying, does these businesses make money? Is this somewhere where I could make money, notwithstanding

41:01 the 10 bagger or something. And I think that's going to be a slightly different perspective that's going to be brought onto the sector. Yeah, I would add a couple of points, maybe 1 around the gold price. So when we think about where consensus is, which is where projects are modeled on. So consensus is still hugely lagging spot and most consensus models are at it 17, 17, 50, 1800. Most reserve resources are still around at 15 and 1600 in this space. So that takes time to catch up and as the market gets more comfortable with long-term prices of gold being higher, that will be reflected in the economics of the projects where it currently isn't yet. So there's still a lot of margin yet to be adopted or adjusted yet as consensus evolves upwards.

41:51 The other piece of this is still about, you know, to me, when we think about jurisdictions where we want to develop projects and conduct our exploration, and the market is still very much capital off, you know, definitely capital restricted. So I think from a jurisdictional point of view, our view and I think Benny's is still working in belts where there's relevant infrastructure existing, gives you a shorter path and a broader exit strategy within the exploration space. So I would take, you know, why do we explore in Timmins? We explore in Timmins because there's 5 mills within 25 kilometers or 50 kilometers of us, which is trucking. And they're going to be anywhere from 3000 to 36,000 tons a day. And that filter and that capital investment de-risks the belt.

42:38 And so I think when I view the challenge of margin compression, inflationary pressure, it's reflected in the capital investment piece of the space. And finding an area to work where there's lots of capital that's been invested already makes exploration more likely to be successful because your size thresholds are smaller and the returns likely to be better because there's probably 3 or 4 people that might be interested in you if they have a mill that's within tracking distance of your discovery. So that's the other piece. So I think both consensus and this jurisdictional focus of back to infrastructure rich areas is valid still at this point of the cycle. We're going to be wrapping things up here.

43:23 Anybody in attendance who has a question or anything, you can feel free to type that into the chat box for any of our guests or for the collective. Just make sure to do that here as we're kind of getting here. You know, it has been a pretty exciting late winter into a spring here, but we have the old adage as investors that you sell in May and go away. Here we are in late April, approaching May. It is pretty interesting here. Does that old adage kind of hold up in this sector? And I know you don't want to say yes, but If you could put on that investor cap, do you think it might be some seasonality to this? Yeah, there's definitely that theme there that's historically, I don't think that people would use a lingo if it didn't happen a number of cases.

44:16 I think you have to ask yourself, is this year's stack out modestly maybe different, are the drivers different? In the end, I still go back to some of the real key graphics and ratios that show when investors should be paying attention to a space. And those are all really screaming buys right now. So yeah, I think the sell in May and go away and, or, you know, thesis may be there, buy in May and, you know, whatever it is. But I think the fundamentals of where the space is right now would argue against that. Yeah, I think because there hasn't been a lot of work going on and there hasn't been a lot of opportunity to actually sell and may go away. People may hang on a little bit longer. You know, I think your point about what's going to be coming out, hopefully, in the second, third quarter as far as earnings and stuff, that's going to keep people interested, I think, even throughout the summer.

45:14 Yeah, I guess, Trevor, if you look at that as a generalist comment, sell in May, go away. And you actually want to, you know, you're most likely doing that from a portfolio protection perspective than instead of sitting in cash, sitting in gold or sitting in gold equities is something that I think a number of generalist investors will look at as opposed to just selling and sitting on cash. So from a portfolio protection perspective, it could be good for the gold sector if I were to put a positive spin on it. I think the other thing, in the past, I think people made enough money that they could afford to sell it and go away. I don't think there's been a lot of money made in the last little while, so people may not have the money to go away.

46:02 You know, after the last couple of years, I think I'd welcome a much, a typical seasonality of this market, cause you kind of know how to play it, rather than just seeing more and more selling for 18 to 24 months is what kind of what we we did experience. So let's see, we did have Mike says to Brian, I'd rather be irrelevant with GFG at 15 cents than relevant with GFG at 5 cents. I think that's a compliment. So. Well, it's an interesting point because, Mike said, what a small shareholder and he's an investor that's came into the story over time. And there's an example where somebody might prefer of us not to done a financing 8 or 10 cents or at least take a more modest approach to your financing strategy and pull back on your exploration expenditures.

47:02 So there's this trade-off of trying to manage relevance versus irrelevance. And I think Luke's comment is valid where you might choose to pull back on your exploration expenditure at this point in the cycle to not end up at 5 cents because you've granted up 25% of your equity and maybe you wanna grant 10% of your equity and keep your head above water at 10 cents. And those are the discussions we have, but I think Mike's point is quite valid. Okay. Luke, Jim, Brian, thanks so much for your time. No questions rolling in. Best of luck as you roll into the season of expiration and best of luck. We'll catch up with you again shortly. And everybody in attendance, Thanks so much for tuning in. Have a great rest of your day.