Aquila Resources: Developing Americas Next High Grade District

0:05 Hi, my name is Bianca Pachola. I'm the COO of 6 and welcome to the KeyLab Resources Live Investor Summit. I'd like to start today by introducing our presenter, Barry Hilgert. To kick things off, Barry will be telling the company's story and then we'll be accepting questions. You can submit your questions in the Q&A panel on the right-hand side of your screen. Now, without further ado, take it away, Barry.

0:28 Thanks, Bianca. Good afternoon, everyone. Welcome to our webinar. And hopefully everyone's healthy and safe out there. We thought it'd be a good idea in this current environment to give everyone, our stakeholders, a virtual update. So we're gonna be going through a full corporate presentation that does come on the heels of a new preliminary economic assessment that we press released last week on the Back40 project. So for those of you that have been following the company, we did put out a Feasibility Study on Back 40 back in 2018. That Feasibility Study focused on the open pit operation only. So this PEA kind of gives an enterprise view of the project incorporating the underground.

1:19 There still is a lot of work to do on the underground, we still need to do further geotech investigation, we still need to do additional drilling. And of course, It will have to be permitted. The underground isn't expected to start until 2030, so about 10 years from today. But the ore body is open at depth, so we did want to demonstrate that there is currently an in the known resource, underground resource of about 6 million tons. So we want to incorporate that into the mine plan. And the idea would be in the future to continue to drill at depth and add tons as we move forward. So I'm just going to start off with some highlights on Aquila. So these are some things that certainly we're excited about at the company. First of all, we're in a good tier 1 jurisdiction. So we have a portfolio of high grade assets, good metals, gold, copper, zinc.

2:20 In the upper Midwest, we own 3 assets on what's called the Pinocchian Volcanic Belt that spans the upper peninsula of Michigan down through northern Wisconsin. We do think that this belt offers new district potential. It's a safe jurisdiction, has access to infrastructure. There are 24 known mineral occurrences on the belt, only one past producer. So we think there's a lot of opportunity here. It's good to be a first mover, I think, on this belt, and we will continue to look for opportunities on the belt as we go forward. We continue to try to push back 40 towards shovel-ready status. We have been advancing through the permitting process.

3:08 We have received the 4 state-issued permits that we applied for back at the end of 2015, and I'll talk about that a little bit in the future. We have a strong stakeholder base, Orion Mine Finance, Ruffer and Hudbay own a little more than 50% of the company, and Asisco Gold Royalties has a gold and silver stream on the Back 40 project. I'll talk about the details of that stream in a minute. We think we have an attractive relative valuation versus our peers. If you look at us on a gold equivalent basis, we trade at $15 US an ounce versus a pure median close to $60. And we're trading at a price than that asset value of 0.3 times versus a pure median of 0.5.

4:00 And there's no value, in our opinion, being attributed to not only the upside of Act 40, but the other exploration assets that we have on the Pinocchian Belt. So just some recent accomplishments. We did, again, on the permitting side of Act 40, we have continued to move forward on the permitting and we have received the 4 major permits that we applied for in 2015. 2 of these permits were challenged and did receive contested case hearings. So far, all legal rulings to date have been in favor of the mine and permits have been upheld. We're still waiting on a ruling on a wetlands contested case, and we hope to receive that at any moment.

4:51 We've been working constructively with our stakeholders, including Asisco. So recently we did amend our gold purchase agreement with Asisco and it accelerated access to a portion of funds. So it has provided some short-term funding for the company. And we continue to have ongoing discussions with other stakeholders and other investors about funding the long-term development of the project. At the same time, we have been reviewing opportunistic M&A opportunities. We do think there's an opportunity in this market for some consolidation, and we will continue to

5:32 look at those opportunities as they become available. We again continue to advance BAC40, working on getting us the site compliant with all of our permits. The permits have a number of conditions associated with them. We have to get the site compliant before we begin construction. And we also recently evaluated and completed the evaluation of the underground mining potential with the release of this PEA, which we spoke about last week. So just looking at the area we're in, that sort of shaded area in the middle of the map is the Pinocchian Volcanic Belt. Again, it spans the upper peninsula of Michigan down through northern Wisconsin. We own through it 3 assets on this belt, Bag 40 being our flagship, which resides in Michigan, and Bend and Reef, which are earlier stage exploration.

6:27 Bend is a copper gold project, Reef is a gold copper project. Again, they're exploration stage, we think very promising assets, both located in Wisconsin, also on the belt. This region has been experiencing a bit of a mining resurgence. Both states, Wisconsin and Michigan, have recently updated their mining laws and Michigan's actually permitted 3 mines under that new mining law, including Eagle, which you can see on the map, which is about 130 miles north of Back 40, and that project is owned by Lundin. That mine went into operation in 2014. So I'm just gonna spend a few minutes talking about Back 40.

7:16 So again, it's 100% owned by Aquila. It is a gold copper zinc deposit, so it's polymetallic. We reacquired the asset from Hyundai back in 2014. Again, we received the 4 major permits that we applied for back at the end of 2015. We did complete an open pit feasibility study in August of 2018, and the permits pertain only to that open pit operation. Recently, again, we did announce the results for PDA last week and it did incorporate the underground resource. Again, we think there's a lot of attractive exploration opportunities at Back40, it's open at depth, so we think there's a real opportunity to expand the resource and add tons at depth.

8:12 It is also VMS deposit. They do tend to occur in clusters and there are a number of targets near deposit that we will be looking to pursue in the future as well. It's a strategic location on the Pinokian Belt. Again, we think it's a district scale opportunity and there will be opportunity for synergies between these different projects in the coming years. So this is just a site plan of the Back 40 mine. This really hasn't changed since the peaceability study back in 2018. You can see that the active project area is 1,200 acres, but we do control mineral rights in the area of a little over 3,200 acres.

9:01 So just focusing back on the PEA, I'll just take you through some of the economics and maybe some of the key updates or changes from the feasibility in 2018. First of all, obviously, it incorporates the known underground resource. The second thing we did is we reduced throughput in the mill from 4,000 tonnes per day on a sulphide plant to 2,800 tonnes per day. And the reason for that was to better align the operation with the mining rate in the underground. It also has the effect of reducing the capex, so that lower throughput did effectively reduce the capex by $44 million and brought the initial capital to $250 million, which we think is a very financial, financeable project in this market.

9:58 With the addition of the underground, you increase the mine life. So the mine life went from 7 to 12 years. And as I mentioned, the ore bodies open at depth and we do think there's a real opportunity to add tonnage and further expand mine life down the road. This PEA also includes all the permit conditions from permits that were issued since the feasibility study. So we've incorporated those permit conditions into the PEA that's reflected in the economics. There is some opportunities. We did speak in the press release, there may be some opportunities to increase gold recoveries in the future on the flotation side of the mill. We're recovering about 68, 69% of the gold with gold above $1,600 an ounce, there may be an opportunity to invest and to tweak that flow sheet to improve those recoveries on a go forward basis. So these are things that we'll continue to evaluate as we go forward.

11:03 In terms of the economics, utilizing a discount rate of 6%, the project produced an MPV of $176 million. That's on an after-tax basis. And the internal rate of return was 26%. If you translate that to spot today, and we used 1998, which was the spot when we put out the press release last week, currently gold is having a bit of a sell off today, but we used a dollar for zinc for this spot calculation, and zinc today is trading at $1.09. So given the polymetallic nature of the project, when some commodities fall, others go up, but it kind of balances out the economics.

11:49 But using current spot prices, you generate an after-tax MBV north of 300 million US, and your internal rate of return starts to approach 40%. So the average annual production, you're looking at about 120,000 gold equivalent ounces on an annual basis, and the mill head grade is over 4 grand. So the next slide just looks at the production highlights and you can see on a gross revenue by metal basis given the current you know sort of base case metal prices that we used and we used 1485 gold in our model, and we used $1.08 zinc.

12:36 You can see that gold represents 45% of the gross revenue generated by the project. Zinc represents 38%. When we put the feasibility study together, it was sort of evenly split. It was 41% gold and 41% zinc. But because of that change in pricing, we're starting to see the sensitivity of the project to gold. And we have put a chart there on the bottom left corner of the slide. And you can see we track gold prices all the way up to $2,400 an ounce. And you can see at $2,000, close to where our spot is today, obviously, the IRR benefits, but also the gold percentage of gross revenue goes north of 50%.

13:23 So above $2,000 an ounce, all other things staying equal, it really does become a gold project. And In year 1, you produce 107,000oz of Gold, 206,000oz of Gold equivalent. Again, the project contains 2 high-grade Gold Gossens near surface. You mine those in the early years. So in the first 2 or 3 years, you're generating a lot of revenue. So this is a production profile. I won't spend too much time on this chart, but you can see the split between gold, so that's actual gold production and non-gold production. It's pretty evenly split throughout the project, but certainly more heavily weighted to the gold side in the first 3 years, and then after year 4, starts to turn more to the base metals.

14:20 The flow sheet really hasn't changed very much at all from the feasibility study. Again, we brought the throughput down a little bit and on the oxides, We did add a SART plant. The SART plant does have some initial capital involved, and you have to spend money to build that SART plant inside the facility. But it does improve the quality of the gold-silver door ring, and most importantly, it has an impact on operative expenses going forward because it requires us to use less cyanide in the processing of the gold ore. So that reduction of cyanide helps the operating expenses going forward.

15:07 So just looking at capital and operating costs, first on the capital cost side, we've sort of broken it down into major categories on the left. We did use a contingency of 14%. Might be considered low for some people per project in sort of PEA stage. I just remind everybody that we are coming up a feasibility study that we did in the end of 2018. And a lot of these costs have been updated and we're supported by vendor bids as well. So we feel quite confident on the capital costs going forward. The operating costs, you can see our total site op-ex is $52 per tonne and sustaining capital for the open pit is 46 million.

15:58 In the underground is 99 million and we do include full mine closure costs in there of 75 million. So the pit will be backfilled and the site will be fully reclaimed. So just looking at the cash costs, C1 cash costs are $733 an ounce on a gold equivalent basis. And our life of mine, all in sustaining costs are $926 on a gold equivalent basis.

16:33 Slide 14 just looks at the resource estimate. This has not been updated since 2018, actually. This was the resource estimate that was used when we did the feasibility study in 2018. It's important to note that 94% of our resources are in measured and indicated category. We only have 1 million tons of inferred material. Most of that is in the underground. The M&I grade is on a gold equivalent basis is 4.3 grams per tonne. We believe it's a very high-grade deposit. You can see on slide 15 again, when we compare it to our peer groups, and we certainly think GRADE is king for these types of projects, you can see that we're on top of the range when it comes to GRADE.

17:31 So we do believe, again, the ore body is open at depth. You can see there's 2 limbs here on this slide. This is sort of a 3D model of the current ore body. We have drilled more than 130,000 meters to date. 130,000 meters to date. And there is, you know, we're open at the bottom of the pit. You can see that limb number 1 and limb number 2, you know, We do have drill intercepts down there. One is at 400 meters. The second limb is at 700 meters, but we have intercepts down at those depths where we're getting grades of better than 6 grams per ton of gold. We've had a couple of intercepts well above 10 grams per ton.

18:21 This will require additional drilling, but we certainly think there's an opportunity here at DUP to continue to add tonnage to the ore body going forward. These 2 limbs, number 1 and number 2, actually move south of the pit. So we do have a river that runs up the western side of the pit, and these 2 limbs extend down south of the pit and sort of parallel to the river.

18:52 So just a quick permitting update. So the 4 permits I spoke about that we applied for in late 2015 were a Part 632 mine permit that was issued in December of 2016. And there was a contested case in Michigan. Anyone can challenge a permit that's been issued by the state. You have 60 days to challenge a permit. Permit was challenged, a contested case hearing took place and the permit was upheld in May of 2019. Air permit was issued in December of 2016. We then amended our air permit, and that amendment was issued December of 2019.

19:40 Our NPDES, or National Pollutant Discharge and Elimination Systems permit, this is a surface water discharge permit, was issued in April 2017. And our wetlands permit was the last permit to be issued. It was issued in June of 2018. And we do have very small wetland impacts, about 11 acres of direct wetland impacts. And we did have a contested case hearing on that permit. And we are expecting a decision at any moment. Coming out of the permit amendments, we did apply for some permit amendments after we published our feasibility study at the end of 2018. Our mine permit amendment and air permit amendment were issued.

20:28 What came out of those amendments is the requirement for a dam safety permit, and that permit application is pending. You know, like a lot of companies in sort of these last several months during the pandemic, we sort of dropped tools and we went on sort of a shutdown period. We have just started to reopen and re-engage and so we do expect that that permit application will go in before the end of this year.

21:05 So again, I just want to talk quickly about the relative valuation. I spoke about this at the outset. But when you look at the company on an enterprise value to M&I Resource, again, we're looking at this on a gold equivalent basis. We're trading at about $15 per ounce, whereas our pure median is closer to 60. So we think there's significant room for improvement there. Also on a price to net asset value, you can see that we're on the left side of the chart again, at 0.3 times where our pure median is more like 0.5 times. So again, we think opportunity to improve going forward. I'm just gonna talk a little bit about our other assets and the district scale potential on the belt. And again, this is our asset, Bend and Reef, both are located in Wisconsin.

22:02 Both we think have significant exploration potential. Just to give you some scale here. So this belt is very similar in size to the Flint-Plom belt up in Canada. Bend is about 130 miles from Back 40. Reef is 80 miles from Back 40. So we're all in close proximity there. Again, we think there are additional opportunities on the belt. There are 24 known mineral occurrences and we continue to look for opportunities where we can. Bend is a VMS deposit. It has underground potential. So far, historically, there's been about 14,000 meters that have been drilled to date.

22:50 The resource is non-43-101 compliant. Most of this drilling took place before those regulations went into effect. But you can see from that historic drilling, grades were good, 2.4% copper, 4.7 grams per ton of gold. This is on federal land, and we did strengthen our land position back in 2019. We actually acquired an adjacent property for the mineral rights, which contain the remaining portion of the deposit. And what we'd like to do going forward is we'd like to obtain a prospecting permit on the whole package area. That is in process as we speak. We do plan in our planning a drill program as we speak. We'd like to update the resource, make it 43-101 compliant, and then do some further evaluation, including technical and environmental studies. So those are the milestones for Bend as we move forward.

23:51 Aquila did do some drilling in Bend back in 2012. This was before my time, but Aquila completed 11 drill holes, totaling 63 meters. Drill results were good, favorable results. And so we look forward to getting back on the property and conducting more drill programs. Reef is a high-grade Gold deposit. It is open pittable. It's a quartz vein style ore body. We did, Akila completed a drill program again back in 2012, drilled 42 holes, totaling 4,400m, so very shallow holes. The resource extends from surface to about 450 feet.

24:38 Currently, there's been no real deep holes drilled at Reef. Different than Ben, this is private land And it is 100% owned by Aquila. Most of the historic drilling that was done at Reef and the historic exploration was done at Inco or by Inco and Miranda. Again, this was before 43-101 regulations. So it is non-compliant, but again, shows promise, you know, close to 500,000 tonnes and significant grades for grading close to 11 grams per tonne of gold. So upcoming milestones for REEF are we do want to put together a drill program for REEF.

25:23 Once we conduct those drill programs, like to update the resource estimate again, make it compliant with 43-101 standards, and then evaluate the future prospects for the project going forward. This next slide just shows, you know, sort of a, it's a profile perspective of the ore body. Interestingly, we included a photograph here, which is a boulder that was part of the sampling that was done on reef early on. And you can see there's visible gold in the boulder. Actually, this small rock returned an assay of 379 grams per ton of gold so very high-grade material.

26:11 So I'm just going to talk a little bit about our relationship with Asisco. We did complete an investment with the Cisco back in 2017. It included an equity private placement of $10 million and a gold stream with staged payments. We did receive 7.5 million of those payments on closing of the facility back in November of 2017, a further 7.5 million dollars when we put out the feasibility study in October of 2018. And the terms of the gold stream are, Cisco purchases 18 and 0.5 percent of the refined gold from back 40 for a price of 30% of spot. That goes up to a cap of $600.

26:59 So once spot price of gold exceeds $2,000 an ounce, they're capped at $600. Once we deliver 105,000 ounces of gold under that stream, the stream percentage gets reduced to 9.25% and runs in perpetuity. We did recently amend this and we do have $10 million now tranches that are due in the course of the next 12 to 18 months, they're based on specific project milestones, But on closing those amendments in June of 2020, we did receive an additional $2.5 million. Then there'll be a final $25 million payment that will be due on drawdown of the project debt facility.

27:48 Some of that stream money will go towards the construction of backport.

27:56 Just a quick look at the management team. Again, We've been on sort of a bit of a pause over the past 3 or 4 months while we were in this COVID environment. We did elevate Dave Anderson recently to general manager. So he is the GM down at site in the US in Michigan. And recently we started to add back to our team. We brought back anyone that had been furloughed during the COVID with the exception, I think of 1 individual. And we've made 2 recent hires, 1 being Bob Mann, who's very recent. In fact, I think his starting date is today. And he's taking on the position of Director of Exploration.

28:46 He's got 30 years of experience, a lot of that experience being in Michigan and Wisconsin on the Pinocchian Belt, and most recently he's the Senior Manager of Exploration at Lundin Mine. That's the Eagle mine specifically.

29:04 And we hired Mike Foley as director of environment and infrastructure. Mike's a civil engineer. He's worked in the Upper Peninsula and Northern Wisconsin for the past 32 years. He was instrumental in helping Highland Copper obtain their mine permit on the Copperwood project. So look forward to working with those folks going forward. And again, as we continue to move back 40 towards a shovel ready status, we will look to add to the team moving forward. And then the board, no real changes here. Again, we have a cross section of individuals that have a collection of backgrounds, from mining operations to development to finance.

29:56 Again, as we move forward, as we evolve and we look to upgrade and expand the team. We'll be looking not only at management and leadership but at Akila, but we'll also be looking at the board. In terms of value creation milestones, So these are things that we're focused on going forward. So number 1, which we have a checkmark beside, is just putting out the PDA. Again, giving that enterprise view of the project, showing the potential for underground mine expansion. We then want to do some additional drilling at the back 40, some geotech investigation, some infill in the underground, so looking to convert some of those inferred tons that exist in the underground. And then we'll look to do some step-out drawing at depth to add tons to the inferred resource.

30:55 We'll then look to do a resource update. We'd like to do that in the early part of 2021. We'll then do a feasibility study update. And then again, this is sort of in parallel, but we continue to advance with pre-construction activities. And at the same time, we'll look at opportunities in Wisconsin for exploration. Right now, we've got a lot to focus on with grief and band and will continue to put those programs together. And hopefully look to execute a program at leaf and bend in the near term. And then long term. It's all about back 40 project execution and getting back 40 into construction. Just a quick look at the capital structure and as we just conclude the presentation, you can see we've got about 338 million shares outstanding at a share price in the 17 cent range. We're trading at about $58 million.

31:56 And that's a Canadian dollar market cap. We're trading in Canadian dollars. And our cash position on March 31st was a little better than 2 million. Again, we did secure some additional financing in June with Cisco. And we continue to work with our financial partners to look for additional means to raise capital to fund all the initiatives that I've spoken about here today. Major shareholders, Orion, Ruffer and Hutt Bay, again, collectively they own better than 50%. And I think that brings us to the end. So I can hand it back to you, Bianca, and certainly would be happy to take any questions.

32:46 Great. I'm back. Can you hear me, Barry? Yeah, I can hear you great. Great. Okay, well, let's definitely jump into some questions here. So let's start with this one. This one comes from Paul Rankin. He asks, do you have any budget for the other portfolio projects this year? Again, it's subject to finance. We are putting the, and just in process, on putting those drill programs together as we speak. It's going to be subject to budget, but our intention is to do drilling at both Back 40 and at one of our Wisconsin assets in the next 6 months. Great. This one comes from Mark Erickson, and he wants to know, when do you think you will put out a 43-101 resource estimate on your Wisconsin projects?

33:43 It's a great question and again it's going to be subject on the size of the drill programs that we do. I think that's a goal for us to get. 43 1 to 1 compliant resource estimate out on those projects as soon as possible. It is going to require some twinning and it's going to require some updating of the existing resources and twinning some of the existing drill holes. But that plan is in motion. We do have, As I say, we just added a resource on the Director of Exploration front, Bob Mann, who's going to be looking at these programs. And so we should be able to update folks where we're at there in the next 3 to 6 months and how long that will take. But right now, what's most important for us is to get out there and to start drilling.

34:38 Makes sense. This one comes from Gary Williams. He says, at PDAC, I was told 1 permit was being contested by Wisconsin First Nation. Can you please provide an update on this? Thanks. Yeah, so we've had 3 permits that have been contested. The mine permit, which as I mentioned, was resolved. And so that permit was upheld. So it went through the full contested case hearing and the judge upheld the permit. The second permit to be challenged was our wetlands permit. That permit, again, the contested case hearing has passed and we are now just awaiting the judge's ruling. And we expect that's gonna come pretty much any day.

35:26 We did submit for some permit amendments that were based again on the design in the feasibility study in 2018. Those permitted amendments were granted in December of 2019 and they have been challenged as well. So that contested case process is ongoing as we speak. You know, again, the major permits, you know, have been challenged and we'll wait to see what happens with the wetlands permit. But as we move forward, these smaller permit amendments or other ancillary permits, they'll become a lot more focused in terms of subject matter for challenging. But yeah, there is a Native American group out of Wisconsin who's opposed our project and continue to oppose the project. We have had them to cite on a couple of occasions.

36:26 I have been to their tribal legislature to present to them in the past. And you know, it is what it is. We continue to be open to dialogue. We'd love to talk to them and we'd love to work with them. But right now, these challenges are ongoing. And we do think that they will be resolved. At least the wetlands permit should be resolved here, literally in the coming days. Makes sense. This next one comes from Stefan Iwano. Hi, Stefan. He says, hi, Barry. Will the underground mine plan significantly impact Back Forty's footprint as permitted under the open pit plan? Or will you be able to utilize the open pit and mined out portions of the underground for underground waste and tailings deposition once the project, I assume, goes live?

37:22 Yeah, we didn't see big changes to the footprint. I mean, I will just caveat again that it's subject to permitting. So we have not started the permitting process. There's still a lot of work to be done, you know, feasibility study. So still additional drilling, baseline environmental work. So there's a lot of work that still needs to be done on the underground, but a big part of the tailings that come out of the underground would become part of a paste backfill. So there is a paste backfill plant or a paste plant that will be built as part of the underground, and that will be put back into the underground workings. But again, as we move forward, as we continue to do further work on it, we have more information related to a feasibility study, we'll be able to update everybody.

38:22 And ultimately it will then be subject to permitting. This next one comes from Hugo Del Rue. He asks, are you planning a rollback? We're not, you know, not that we're not, we're not adverse to it, certainly. I think that, you know, we would look at a consolidation in the context of a transaction. So if there was a major transformative transaction or financing, and we felt that at that time it was a good opportunity to consolidate shares, we would look at it at that time. But just doing it for the sake of doing it, we don't think makes sense right now. And again, although there's 338 million shares outstanding, it is quite closely held. As I mentioned at the outset, 3 holders own more than 50% between insiders, other institutions, and other high network investors.

39:25 We think about 75 to 80% of the shares are in pretty safe hands, But we're not adverse to it. I mean, it's certainly something that we would continue to evaluate as we go forward. And if there's an opportunity to do it and make sense in the future, we'll certainly look at doing it. This next one comes from Paul Rankin. He wants to know your cash position and burn rate during 2020. Well, again, 2019 or 2020, I should say, we did, we put out our Q1, which was at the end of March, had a cash position of 2.5 million. We've since brought in an additional 2.5 million. And as we mentioned in that press release, we also had a favorable tax settlement, believe it or not, related to HST here in Canada.

40:18 And so that brought in another 600,000 change. So, you know, we did in June bring in an additional $3 million. You know, we do certainly know that we need to come to market and we're gonna have to raise capital at some point in the future. But we do have some runway here right now. We are running pretty lean. We have a small team. Most of the work that's being done, permitting related, legal, et cetera, we are obviously using outsourced resources. So those are internal resources that we're using. And so, and I think as was the case with a lot of companies just over the past 3 or 4 months, We did operate very, very lean. We watched our expenses very closely. There was a lot of uncertainty around the whole pandemic.

41:11 And now that things are starting to move in a different direction, We've seen the gold market turn around quite substantially. But even more interestingly, just zinc, copper, this whole reflation trade has caused a lot of these commodities to move higher. So we certainly think it's a better financing environment, which will be good opportunity for us going forward. But the burn is quite lean. I don't want to say too much because we're putting out our quarterly tomorrow. Paul, if you want to call me and talk to me after the quarter goes out tomorrow, happy to talk about it in more detail. This one comes from Joe Finkler. He says, how many jobs do you think will be created throughout your process?

42:01 Yeah, so during construction, it's a bit of a surge. So it's 400 to 500 jobs will be required while we're constructing BAT 40. But During steady state operations, it's about 250 jobs. Great. This is another one from Joe Finkler, who's a local minister. He wants to know, when do you think the project will be shovel ready? Well, shovel ready is subject to a couple of things. Number 1 is finalizing the permitting activity, getting our site compliant with all existing permits, and updating our feasibility studies. So this is all work that's currently in the pipeline and, you know, the feasibility study will be updated in 2021.

42:52 And right now we're targeting a start date. And again, we're trying to sort of position it in a window, But we're looking at a shovel ready sort of date sometime in 2022. This next one says, you mentioned the deposit remains open at depth. How much deeper do you think the resource goes? Well, it's a tough question to answer. We haven't done a lot of drilling at depth. Most of the drilling has been concentrated in the open pit and sort of some of the shallower underground workings. So we haven't put a lot of deep holes in the ground. That's certainly something we'd like to do going forward.

43:43 During my tenure, we just have not done a lot of exploration simply because of the costs associated. Certainly deeper holes, there's a lot more costs associated with deeper drill holes. It's sometimes easier to drill those holes when you're in operation. But we are planning on conducting additional exploration. We do think those areas that I pointed out on the map. That you know, 3 D schematic of the or body that limb one and limited. Those are focuses of ours going forward. And we will look to drill those areas in the immediate term. The one is 400 meters underground, the one area is 700 meters.

44:29 The ore body is dipping at an angle. And the question of how deep is pretty much anybody's guess. But we do think it continues and we'd certainly like to know how deep it goes. This next one is about the underground mining permitting process. He says, how does the underground mining permitting process work in Michigan? That's very similar to, you know, what we went through on the mine permit for the open pit. Again, more study is required, more works required. And I think it's important to note that the underground mining really starts at the end of the open pit light. So you know, we really are talking about 2030 and beyond proposition, so we certainly have a lot of time.

45:25 To work on the underground and but you know, there are a number of baseline environmental studies that will have to do. There's engineering that we'll have to do. And then we'll have to put together a permit application that would be submitted to the regulatory authorities in Michigan for approval. That's subject to a public comment period and a public hearing, just like the mine permit was. We hope shortly thereafter we would obtain that permit and that ability to mine underground. Having said that, that process isn't going to start for a few years now. Will you be able to mine in Wisconsin if the deposit continues under the river?

46:14 Right now, there's no plans on drilling under the river or near the river. As I mentioned, those 2 limbs that are extending out of the bottom of the pit that form a big portion of the underground, they are dipping South. The river moves to the west of the project and kind of moves a little bit more west as you go south. So there's a little bit of separation as you start to move south between the ore body and the river. So right now there's no intention to drill under the river. The PA noted that FAC 40 is a well-defined project that also holds tremendous exploration potential. Do you view the open pit phase of the deposit to be well-defined and the underground offers the exploration potential?

47:09 Yeah, I mean, the open pit is very well-defined. It's been very well drilled. It's 98% measured vindicated. So again, I think there's only 200,000 tons of inferred material in the underground. Most of the inferred, sorry, there's only 200,000 tons of inferred material in the open pit. Most of the inferred is in the underground. So it's very well defined. The pit is also constrained by the river, right? And so the pit can only be so big. And again, because of the way the ore body is dipping and it's going to depth, the rest of the ore body would be mined via underground method. Is there an opportunity to discover satellite deposits near Back 40 that would benefit from the existing infrastructure?

48:01 This is a very mineral-rich area. As I mentioned at the outset, BMS deposits do occur in clusters. There are a number of targets. We have identified some of those targets. I think in the future there is an opportunity to drill some of those targets. Again, we wanna be a little bit more selective in terms of where we spend that money. And the focus for us right now is at back 40 because the deposits are open at depth. We'd like to continue to focus on that. We did discover a new lens in 2016, so the pit, it was actually referred in that 3D model as our 2016 zone, not very original name, but it does look very similar to the existing deposit. It's about A0A kilometre away. And that is something that we'd like to further investigate, you know, as sort of a satellite lens or a satellite deposit as we move forward. But it is a rich area, there are a lot of targets, and I think that, you know, just again contributes to the long-term growth potential of the project.

49:18 In the PEA press release, you mentioned that the price of BAC40 has an NPV in Canadian dollars of $420 million. By that math, that's over a dollar a share in value. What do you think investors are missing and what do you think it would take for the stock price to go up? Well, you know, what are investors missing? Certainly we think we're undervalued and I'm probably not the 1st CEO to be on this webcast to say their stock's undervalued, but we certainly think it's undervalued and we certainly think for those individuals that do think that we are gonna continue to see commodities move higher, specifically gold, it's gonna be very beneficial to projects like Bag 40, just in terms of the existing resource, not even talking about any of the exploration upside that we've spoken about.

50:17 But yeah, I mean, listen, we think we're undervalued and we think that in the past, a lot of people have looked at us as a base metal project. And although base metals have had, again, a comeback over the past 2 or 3 months. You know, copper has come back from close to $2 a pound. It's back, you know, pushing up against $3 again. Zinc, you know, hit a low, I think of 82 cents. It's back up to $1.09 today. So those quantities have certainly come back. And zinc's a big part of the economic component of our project. But I think what people need to recognize is how sensitive our project is to gold prices. And gold has got a lot of the attention of, you know, investors, certainly in the last 3 months.

51:08 And I just think we're one of those sleeper gold projects. There is a lot of gold here. There's over 1 million ounces of Gold in the current resource, just at back 40. And again, if you're bullish on Gold, it will be very beneficial for back 40 going forward. Great. And with that, I think that's the end of the Q&A period. I have one last question for you. What are you most excited about in the next 12 to 16 months? I think we're most excited about drilling, right? I think that we're in a market environment that I think is interested in exploration again. And so we're excited to go out there. We're excited to drill. You know, we're certainly excited about the upside opportunities at Back40, but we're also excited about Bend and Reef. You know, These are 2 projects that show a lot of promise, and they're close by, they're on the same belt.

52:08 So we're very excited about the opportunity to drill and to move forward on the exploration front. Awesome. Well, a big thank you to everyone who attended and everyone who submitted questions. If you have a question that you weren't able to get answered today or if you just thought of a good question for Barry, feel free to reach out to them directly. Their contact information is on the slide in front of you. And now I will pass it back to you Barry for the final word. Okay, I just, I wanna say thanks everyone for attending. Appreciate your time here today. We look forward to updating you on our progress going forward and I hope everybody stays safe. Take care.