Erdene Resource Development (TSX:ERD) Q3 2026 Earnings Call

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10:08 Welcome to the Erdene Resource Development Third Quarter 2026 Financial and Operating Results Conference Call and Webcast. As a reminder, all participants on the telephone are in listen-only mode, and the conference is being recorded. After the presentation, there will be an opportunity to ask questions. To join the question queue, You may press star 1 in your telephone keypad. Should you need assistance during the conference call, you may signal an operator by pressing star 0. Participants on the webcast may type in their questions in the chat feature of the webcast.

10:55 Now, let me hand over the call to Jon Vincic. Please go ahead.

11:01 Thank you, operator, and hello, everyone, and thank you for joining our call today. A few housekeeping items to note. The accompanying presentation for today's call is available for download from the company's website at www.erdene.com. The press release, financial statements, and MD&A related to this quarter are posted on Erdene's website and on CDAR+. I'll point out that management's remarks on the Buy & Hundy Goldmine's operating performance are at the Erdene-Mongol level, a 50-50 joint venture between Erdene and Mongolian Mining Corporation. It is also important to note that this conference call contains forward-looking information that is based on the company's current expectations, estimates and beliefs and may also use terms that are non-IFRS performance measures. The conference call will also make reference to results from the company's recent Preliminary Economic Assessment for the Zoon Mod Molybdenum Copper Project and Mineral Resource Estimates for several of the company's properties.

12:08 Please review Erdene's latest disclosure materials, including the company's most recent annual information form, for the risks associated with this forward-looking information and the use of non-IFRS performance measures. And finally, all dollar amounts mentioned on today's call are in Canadian dollars unless otherwise noted. Today's speakers from Merdine are Peter Akerley, President and Chief Executive Officer, and Robert Jenkins, Chief Financial Officer. Peter, please go ahead.

12:42 Thank you, Jon. Hello, everyone, and thank you for joining us today. I'll start on slide four. Over a year ago, Erdene made the transition from developer to producer with the first gold pour at the Bayan-Hundi gold mine. That came just 10 years after our greenfield discovery in what was then a relatively isolated corner of southwestern Mongolia. During this period, that region has changed. New mines, roads, including blacktop highways, power transmission, and border infrastructure. Yet, exploration in the Hundi Minerals District is still in its early days. and in my view, and that of many others, the district has exceptional potential for further discoveries of gold and copper deposits. That was clear in September when we hosted field evaluations by some of the global leaders in exploration.

13:34 Our strategy has been consistent for many years. Generate cash flow at the Bayanande gold mine, then use that cash to ramp up exploration and fully test the potential of this district. Bayan Hyundai is now generating strong cash flow, we're paying down debt, and the mine continues to make improvements, putting us in a strong position to act on our opportunities. In addition to the operations of Bayan Hyundai, our exploration efforts have already advanced a number of prospects to deposits. Three of those, displayed on slide five, are now entering the economic evaluation stage, with studies recently completed, or underway, on the Zunma Molybdenum Copper Project, the Dark Horse Heap Leach Gold Project, and the Altanar Gold Deposit.

14:20 At the same time, Mongolia's government is recognizing that change is needed to stimulate exploration and bring new projects on stream. To that end, Parliament approved amendments to the Minerals Law in October, including a more competitive copper royalty and clearer rules for exploration and license issuance and approvals. With near mine growth at Bayan Hyundai, three projects moving toward investment decisions, and a strong pipeline of new discoveries, we are entering a very exciting period for our company with a compelling multi-decade growth platform. Moving on to slide six, I'll start with the highlights for Q3 2026. The Bayan Hyundai Gold Mine, which we co-own with our strategic partner, Mongolia Mining Corporation, produced nearly 12,000 ounces of gold in the third quarter, slightly ahead of Q2.

15:12 In Q3, Bayan Hyundai continued to generate positive cash flows with US $30 million of debt repaid. The plant continues to perform very well and mining operations made significant strides in Q3, providing access to higher grade ore and positioning us for a stronger Q4. On October 14th, we delivered a preliminary economic assessment for ZoonMod, our wholly owned molybdenum copper project. The study confirmed ZoonMod is one of Asia's largest undeveloped molybdenum deposits with strong economics at current metals prices. Finally, we launched a 16,500-meter drill program to test gold, molybdenum, and copper targets across the Hyundai Minerals District.

15:57 As shown on slide 7, The Bayan Hyundai plant processed 164,000 tons of ore in the third quarter, an average of 1,788 tons per day, a 6% increase in throughput over the second quarter. Gold recoveries of 96% were consistent with the prior quarter and continued to exceed our projected 93% target. Bayan Hyundai produced 11,853 ounces of gold in the quarter at an average realized price of $4,313. Turning to slide 8, mining performance continued to improve in Q3. The team moved 4 million tons of material, 7% more than in Q2. We mined 415,000 tons of lower grade ore, a 68% increase in ore tons over Q2 as we positioned the mining team to access higher grade ore in Q4.

16:54 We sent the higher-grade ore averaging 2.3 grams per ton to the plant and stockpiled the lower-grade material for later processing. The mine is also changing shape, moving away from the single-level operation employed during the startup phase, with mining now advancing into the deeper, higher-grade striker and midfield zones, as the photo shows on this slide. Our feed grades are close to double that of your average open-pick gold mine. However, they remain lower than we would like. Although the Bayan Hyundai deposit has wide zones of low-grade ore, the high-grade gold mineralization is highly concentrated. Roughly 80% of the value sits in about 20% of the ore. Getting the full value depends on precise mining, accuracy in identifying high-grade, low-grade, and waste, and grade blending.

17:42 And keeping dilution and ore loss to a minimum is all of critical importance to achieving target grades. While the overall geometry of the mineralized zones is relatively consistent, at the scale of individual high-grade mining blocks, their location and continuity can differ from what the resource model predicts. These learnings allow us to continually inform and upgrade our models moving forward, improving our accuracy. Our response has been to build the capability to mine this deposit selectively and to blend plant feed to the target grade. The Erdin Mongol team has brought in experienced specialists to work alongside our mine geologists and engineers on resource modeling, Great control program design and drilling blasting techniques that control or movement or definition dig lines that protect grade and supported by a high precision GPS fleet management system. That work is starting to show results.

18:37 The match between our grades predicted by our grade control drilling and the grades delivered to the plant is improving and we expect that trend to continue as we move into 2027. We will continue to refine our modeling, reconciliation effort, and update mine plans with an improved understanding of the deposit. With mining in Stryker and Midfield, where the high-grade zones are modeled to be more consistent, we are working towards higher head grades in Q4. Higher grades should drive increased metal production and lower unit costs. The results over the coming months will be the real measure of our progress. We are building the same approach into the 2027 mine plan, which is now being finalized with plans to introduce the high-grade Dark Horse Sothor body mid-year and further out considering the timing for expansion into the Bayan Hyundai West area, both of which offer further grade upside.

19:30 I'm now on slide nine. Our Q4 expiration is well underway, with three diamond drill rigs turning at Bayan Hyundai, Dark Horse, and Zunmad, completing 16,500 meters of drilling this quarter. Our immediate focus is on two expansion areas next to the Bayan Hyundai gold mine, the Bayan Hyundai West and Dark Horse areas. They are part of the same Bayan Hyundai hydrothermal system and we expect them to add ounces that support a longer mine life and potentially an expansion of the Bayan Hyundai complex. The Hyundai West expansion offers substantial upside to push the Bayan Hyundai pit westward, laying the groundwork for a much larger pit. Over time, that could extend toward the Haram Saab and Ulaan resources subject to agreement with the adjacent license holder.

20:18 The broader Hyundai Ulaan hydrothermal system covers some 4,000 hectares and includes more than 10 kilometers of mineralized structure from Ulaan's southwest onto the northeast Hyundai license. It's still early in its exploration life with excellent growth potential. Turning to slide 10, we're currently in the midst of a 9,000 meter drill program to expand resources in the Bayan Hyundai West expansion area. We are about halfway through the program with results anticipated in Q1, 2027. The Hyundai West resource is now part of the planned BK development through a revised pit that reflects today's gold prices. However, the area has seen little close space or extension drilling, despite the substantial mineralized zone shown in the table, and significant zones outside the defined resource. The program's goal is to improve confidence in those high-grade zones and in some cases bring new zones into resources and reserves.

21:15 That will let us finalize plans and designs in the first half of 2027 to feed Bayanhande West Door into the Bayanhande plant. As shown on slide 11, about 2.5 kilometers north of the Bayanhande mine is the Dark Horse area. It hosts the Dark Horse Resource, a high-grade gold deposit of about 67,000 ounces with an average resource grade of 4.8 grams per ton exposed at surface. In Q3, we completed grade-controlled drilling at that deposit, supporting plans to bring it into the mill feed in the second half of 2027, ahead of its original year three schedule in 2028. Dark Horse Soap sits within a three-kilometer mineralized trend that remains open.

22:01 with multiple gold bearing structures exposed at surface and exceptional exploration potential. We recently started a 3,000 meter program in the Dark Horse South and Alton Arrow area. It will extend the shallow oxide resource for the CIP plant and for a potential heap leach operation and test new targets identified during the recent expert field visits. The Dark Horse Alton Arrow area has a substantial volume of lower grade gold oxide. Heat bleach amenability testing by Blue Coast Research on low-grade samples from Dark Horse is complete, and the results appear supportive for heat bleaching. We are also evaluating low-grade by and under stockpile material and Altenar oxides as additional heat bleach feed. An internal scoping study will be completed in Q4 to develop plans for heat bleach development, leading to a development decision later next year.

22:55 Together, Dark Horse South, Dark Horse North, and Alton Arrow give us excellent potential to keep adding ounces and extend mine life at the CIP plant, and a very real opportunity to expand production through a heap leach operation. Everything we've just reviewed sits within the Hyundai-Ulan system, but what we see is perhaps our most significant gold growth opportunity, and likely our second mine, is 16 kilometers north at Alton Arrow. As shown on slide 12, Alton NAR is already a substantial part of our total high-grade gold resource base of measured and indicated resources totaling 835,000 ounces at 2.9 grams per ton and an inferred resource of a further 265,000 ounces at 1.5 grams.

23:42 Of that total, Alton NAR holds close to half of the district's combined gold resources and almost all of its silver with tremendous growth potential. Altanar sits on a granted mining license with a 30-year initial term, and production there would also fall under Dene's 5% royalty, NSR royalty, once the first 400,000 ounces have been recovered. We believe we've only scratched the surface at Altanar. The majority of the resource comes from just two of the 18 mineralized targets shown in red on slide 13, along a 5.5-kilometer corridor. Those two targets are Discovery Zone and Union North. Altanar is a deposit type of the same family as some of the largest and highest grade gold deposits globally. Porguera, Kellyanne, and Fruta del Norte are examples.

24:31 These systems can extend more than 500 meters vertically, while most of our drilling has been very shallow. Our most recent drilling added continuity, but also provided targets for additional drilling with up to 23 meters of 17 grams per ton in the gap zone of the discovery deposit. Recent metallurgical testing returned gold recoveries of about 89% with potential to produce separate lead and zinc concentrates. We are planning a large drill program at Alton Narr in 2027 aimed at significantly expanding these resources. Moving on to our wholly owned Zoon Mob molybdenum project. On October 14th, we announced the results of the preliminary economic assessment. Slide 14 summarizes the highlights of the study.

25:17 The PEA outlines a large, long-life operation, including a 34-year mine life processing about 25 million tons a year through a conventional flotation plant. Over its life, the project is expected to recover about 670 million pounds of molybdenum and almost a billion pounds of copper. In regards to the economics, the PEA base case of $25 per pound and $5 copper results in an after-tax NPV at an 8% discount of US $745 million with a 16% IRR. This is on capital expenditures of approximately $687 million. However, at recent prices, we're of about $33 milliliter and 650 copper. That NPV rises to about $2 billion and the IRR increases to 28%.

26:08 The deposit and the broader license has significant expiration potential. and we have started a 4,500-meter drill program to add further value. More on that in just a moment. The scale of Zunmad makes it a world-class deposit, but that is only part of the story. There's two other elements that make this project truly compelling. The first is location, a strategic location. Going back to the earlier map, slide 15, Zunmad is about 280 kilometers by road from the Shiviharan-Seike border crossing and railhead providing access to key Asian markets including China, Korea, and Japan. Within the past year, a coal haul road has been built within 35 kilometers of the project, and the 240 kilometer power line was built for the Bayanhandi Gold Mine runs within about 30 kilometers of Zumad.

27:01 As shown on slide 16, the second element is the molybdenum market itself, which is very supportive. Molybdenum is a critical mineral in short supply with demand rising. Its main use is in high-strength, corrosion-resistant specialty alloys, and it's increasingly used in renewable energy, defense, and electronics. Over the past five years, demand has grown at more than 4% a year. Asia, Zumad's natural market, now accounts for roughly two-thirds of global consumption. Supply, however, is a different story. Around 60% of the world's molybdenum is produced as a byproduct of copper mining, so supply does not respond quickly to price. That byproduct supply is constrained by aging copper molybdenum porphyries with falling grades and operational issues at many of the largest operations in South America.

27:52 At primary molybdenum mines, particularly in China, we are seeing lower grades as they approach end of their lives and very few new primary mines in development. Industry forecasts point to a structural deficit of about 13,000 tons in 2026, growing in the years ahead. That is why we've seen prices rise to the $33 a pound range. With the PEA in hand, we are now advancing discussions with potential downstream consumers, financing, and strategic partners, with members of our own management team in China in the coming days. Its economics, location, scale, and longevity, together with the long-term dynamics of the mobility market, are why we believe the time is right to advance the ZoonMod project. I'm now on slide 17. Zunmad sits in our wholly owned 6,000 hectare Hoevenhaar mining license. It lies within a large porphyry system, roughly 16 kilometers in circumference, which hosts multiple targets, including the Hoevenhaar copper prospect, where drilling has returned 34 meters of 1.3% copper and 30 meters of 1.25.

28:58 Recently, several porphyry copper experts visited the site and reinforced our view that Zunmad and Hoevenhaar have exceptional potential for additional discovery. At ZUNMOD, a 4,500-meter drill program is underway, with the majority dedicated to confirming mineralization in the upper 100 meters of the molybdenum deposit, including areas previously modeled as waste, and to test extensions adjacent to the current resource. Converting that material could improve the economics, particularly in the early years, with the potential to significantly impact payback in MPV. In 2027, we will start technical and infrastructure studies and begin upgrading inferred resources to measured and indicated, starting with the first five years of the PEA Mine Plan resources.

29:44 At Hoevenhaar, we are testing shallow copper targets this quarter, while Quantec Geoscience carries out an advanced 3D geophysical survey across the entire ZoonMod Hoevenhaar license. This will define deeper targets for drilling in 2027, building on this year's high-grade copper intersections. As you can see, Erdene is very well positioned to pursue growth on several fronts in the emerging Hyundai Minerals District. I'll now turn the call over to Bob for the financial highlights.

30:13 Thank you, Peter. Moving to slide 18, let me provide the financial highlights for the quarter ended September 30th, 2026. Before I start, let me remind everyone that Erdene's investment in FineHyundai is held through its 50% joint venture stake and the Mongolian company, Erd & Mongol LLC, with our strategic partner, the Mongolian Mining Corporation. Included on this slide are financial highlights representing 100% of the joint venture financial performance, as well as consolidated results for Erdene Resource Development, representing our proportionate share of Erd & Mongol's performance and our corporate operations. All figures are in Canadian dollars, unless otherwise noted. Starting with Erd & Mongol, In Q3, the business generated $71 million of revenue on sales of nearly 12,000 ounces of gold and over 3,000 ounces of silver.

31:07 Revenues were 5% lower than the prior quarter, as slightly softer metal prices offset the impact of a modest increase in production. Total cost of sales for the quarter was $32 million, largely in line with the prior period. Cash costs for the quarter were US$1,742 an ounce, and all unsustaining costs were $18.48 per ounce compared to $18.99 and $19.91 per ounce respectively in the prior quarter. Erdmongel ended the quarter with U.S. $19 million of cash and during the quarter the company repaid U.S. $30 million of debt reducing the total balance outstanding to U.S. $93 million or $132 million Canadian. The business will continue to prioritize debt repayment while investing in the exploration and development programs Peter discussed earlier.

31:59 Turning to Urdine's consolidated financial performance in Q3, our share of income from Urdine-Mongol totaled $10.6 million, in line with the income from the second quarter. Exploration evaluation expenses for Urdine Resource Development, represented the work by our team on our controlled properties, totaled approximately $500,000 compared to $700,000 for Q2 2026. The quarter-over-quarter reduction was primarily due to the timing of exploration programs, as our team completed the maiden drill program at Taragool during the second quarter. Corporate and administrative expenses representing Erdene's public company costs total $700,000 in Q3, largely in line with the second quarter. In total, Erdene generates net income of just under $10 million, or $0.14 per share, largely in line with the second quarter.

32:47 Erdene ended the quarter with just over $25 million Canadian cash, sufficient to advance our Zoon Mod project and finance corporate operations in the period until we see returns of capital from our investment in Erdvangel. On June 30th, the company launched normal course issuer bid. In Q3, we bought back 130,000 shares at an average price of just under $560 per share. A further 68,000 shares were repurchased in October at an average price of just under $570. We will continue to be active under the NCIB where we view our shares as trading at a discount to intrinsic value. That concludes my review of our financial performance for Q3. I'll turn the call back to Peter now.

33:29 Thanks, Bob. Turning to slide 19, the health and safety of our employees, the contractors and local communities is our top priority and the core foundation of our operational success. At the end of Q3, there were 580 staff and contractors on site with a total of 572,000 person hours worked during the quarter. The 12-month rolling average lost time injury frequency was 1.4 million person hours. While this is a respectable result, we continually strive towards zero. One of our many ongoing community initiatives is our Operator Training Program, conducted in partnership with Mongolia Mining Corporation and focused on local employment, a high priority for us. More than 180 people have now completed the training, and most have been employed at the Bayanhande Gold Mine.

34:19 Over 40% of Erdem Mongol site personnel are residents of our host province, Bayanhangor. Erdem Mongol also supports community development through microfinance, local procurement, public health services, youth education, and agricultural initiatives. In addition, as part of our expert site visit, we worked with the Government of Canada to bring Mongolian geology professors and students to the field, followed by a one-day symposium in Ulaanbaatar for industry, academics, students, and regulators. The goal is to build expertise in Mongolia's university and industry to strengthen the country's ability to make the next exploration discoveries. 2026 has been a year of delivery. Nerdene is now a gold producer with an attractive future as an explorer. Buy and Hyundai is Mongolia's newest gold mine and its cash flow funds our growth without relying only on the equity markets.

35:12 On the operating front with mining now in the higher grade striker and midfield zones, we anticipate an increase in fee grade and expect the fourth quarter to be our strongest quarter of the year. The district behind the Bayan Hyundai gold mine has scale. Dark Horse, Bayan Hyundai West, Altanar, and the potential for heaped leaching all point to more ounces and a longer mine life. As the district grows, Erdene also holds a 5% net smelter royalty return on all production from the Hyundai, Altanar, and Nuland licenses once the first 400,000 ounces of gold have been recovered. At Zunmad, the PEA positions us as a supply option for Asia's critical minerals. Japan and Korea both treat molybdenum as a critical or strategic mineral and are large net importers. Zunmad would supply about 20 million pounds a year, just as aging primary mines elsewhere decline and demand grows.

36:06 Mongolia itself is changing. Infrastructure that was once a constraint is now an advantage. The government has reformed the mining law to encourage exploration and investment. Weitogui, about 10 kilometers from our Taragu property, shows that world-class mines can be built and operated here. With our listing on the Mongolian Stock Exchange, Erdene is also a bridge between Canadian and Mongolian investors. Looking ahead on slide 21, our catalysts include continued progress at BK, achieving higher feed grades, results from the 16,500 meters of drilling now underway, the Quantex survey results at Houvenhaar in early 2027, the heap leach evaluation at Dark Horse, Final plans for Bayan Hyundai West expansion in the first half of 2027 and high-grade ore from Dark Horse South entering the mill feed in the second half of the year.

36:59 Continued progress with partners on ZoonMod, including our visits to China this month. As we deliver on each of these, we expect to continue to unlock substantial value for our shareholders. Thank you. With that, I'll hand it back to the operator to begin the Q&A session. Thank you. Ladies and gentlemen, as a reminder, to join the queue, you may press star one in your telephone keypad. Should you need assistance during the conference call, you may signal an operator by pressing star zero. Participants on the webcast may type in their questions in the chat feature of the webcast.

37:47 One moment, please, for your first question. Ladies and gentlemen, as a reminder, if you have a question, please press star one.

38:09 Operator, it's Jon Vincic. I'll take the first question from the webcast if there's nobody in the queue. Yeah, go ahead.

38:20 Okay. First question from the webcast. You've spoken at a high level about the potential for a heat bleach facility and how that might fit into the Dark Horse and BK expansion. Can you provide a bit more detail about which resources would lead to a longer life for the CIP facility and which would lead to expansion of the total annual ounces from a heap leach?

38:43 Sure, thanks for that, Jon. So, just to think about the staged approach that we have for the heap leach evaluation, the first part of that is to establish the resource base from the oxide zones along the Dark Horse-Alton Arrow trend. So we have a substantial amount of low-grade in addition to that being delivered to the CIP plant in 2027, but we're expanding on that with the drilling that's underway. So we're testing about a kilometer and a half of strike length as Alton Aero joins into Dark Horse, and we'll have the results for that as we move into the early part of 2027. Ideally, we get up into that 100,000-ounce low-grade resource base coming from the Dark Horse, Alton Arrow area to form the foundation for the heat bleach. But in addition to that, we have the low-grade stockpile that's being built up at Bayan Hyundai, which we're also doing test work on.

39:42 We currently believe that the Dark Horse oxide should give us somewhere in the mid-60s in terms of recoveries. Bayan Hyundai won't achieve that. Perhaps it's in the 40-ish range. But nonetheless, that's a large value or stockpile that's sitting there for as much as 10 years that could potentially earn money early or put into the heat bleach. So those two sources are also complemented by what we believe to be a very large oxide blanket that sits over top of Alton NAR. Currently over 60,000 ounces are in that category. So when you combine all of that, we may have as much as 150 to 200,000 ounces of low-grade material available to us without further expiration, which we believe gives us the substance required from a resource base to move forward.

40:36 The next step is the testing. As I talked about in the presentation, we've been doing the column leach testing on dark horse. Results look good. So we'll now take all of that information and move that into a a decision point with our boards in Q4 of this year. Assuming that's a go decision then we'd move into definitive studies in 2027 and ideally be moving into engineering late next year and construction in 2028. There's a number of gateways involved in that but I just cap it off with saying it looks very positive to date. In terms of scale, we'll know better as we get through the scoping study but we're thinking about something in that 15 to 25,000 ounce per year range over a five year plus period would be sort of the bookmarks I put on that for now. But again, it's a bit early from a detail perspective, but certainly looks very promising.

41:36 Thank you, Peter. Next question from the webcast. What average head grade are you anticipating in Q4 and what is your target in 2027 H1?

41:47 So what we'd like to see in Q4 is in the range of about three grams per ton. As I talked during the call, as we move into the deeper, more consistent high-grade zones in striker and midfield, we believe that's achievable. As we look out into 2027, that'll be somewhat influenced by the timing within which we can bring on the dark horse material. As again, I mentioned during the Thank you very much. Thank you. When we first began the process of operating the Bayan Hyundai mine, dilution was very high and losses as well. As we've moved into the second half of this year, we've seen the dilution reduce significantly. We are now running at around 15% dilution.

43:05 We're assuming losses at about 2.5%, but both figures are well down from earlier this year.

43:14 And another question from the webcast, Peter, is the mine grade consistent on average with the geologic model and the resource estimate?

43:25 You know, I think it's important to, well, to separate some of that from what's delivered to the mill and what's in the model, but it's important to remember that this is a, we're modeling a very high grade ore body that has grades that range up to as high as 2000 grams per ton. So there is a high degree of variability. The grade control program that takes us down to as close space as five meters is what lets us define the deposit more precisely as we mine it. And I'd say that too has been a learning curve. And just now we're getting to the point where we're comfortable in the reconciliation between the global resource model, the grade control model, and the delivered to mill grades. and I'd say that variability ranges around plus or minus 10% over the last month, but that also is a significant improvement over what we saw earlier.

44:18 And one of the issues that we saw in the early days is that the dilution of the high-grade moving into the low-grade material is very hard to track. You've got a very large stockpile that has likely consumed some of your high grade material. And it's very difficult to come up with an average grade on that course material. So, you know, that was a challenge for reconciliation early on. But as I said, at this point, we're seeing significant improvement. And as we get towards the end of this year, we'll have a much better body of work to look at the entire grade control database for at least that period from mid-2026 and be able to start to compare that back to the global resource inform the model and make adjustments where necessary.

45:05 It's moving in the right direction, particularly with the results we've seen over the past month.

45:13 Another question from the webcast, Peter. There are many molybdenum deposits of similar grade as Zunmod. Why should investors get excited about Zunmod and what are the key differences?

45:27 Zunmad is, you know, probably many of the callers familiar with molybdenum would recognize some of the British Columbia deposits and there's some down into the southern or western U.S. as well. But not unusual to see them in a similar grade range of 0.04 to 0.07, which would be considered a medium to low grade molybdenum deposit. But we're sitting next door to the largest consumer of molybdenum, which is currently in deficit. We can say the same about Japan and Korea. This area consumes, I think it's 66% of the world's molybdenum and can't find enough of it. So, you know, that's the first thing is a very strong market and us sitting right next door to it. The other thing I would mention that sets us apart is scale. You know, Zunmad currently in the PEA is going to produce over 650 million pounds of molybdenum and a billion pounds of copper over 34 years.

46:24 but it's a deposit that's open in all directions. We're proving that up as we do some drilling today. So when you think about those key consumers or producers of molybdenum in the Asia region, particularly in China, they're looking for that long life, multi-decade opportunity that has growth potential and ZoonMod serves up that opportunity. So it's scale, life of mine, Thank you very much. they're in very challenging weather or geographic locations. So I'm really optimistic that those things set us apart and ZoonMod's really in a great place to move forward and supply that deficit of supply in Asia region.

47:41 We have another question from the webcast. This one comes from Don McLean, analyst at Paradigm Capital. Don asks, the Zunmod PEA highlighted how this 100% owned asset could be a major value creator largely overlooked by the market. The MPV is sensitive to the molybdenum price assumed, and the spot moly market is not a highly liquid one like copper is. A big spread exists now between the current spot price for moly and the three-year average and consensus amongst analysts. In Q3, your team continued to engage with potential buyers. Molly, are you able to share with us what buyers' indications have been about pricing and how different these indications were to the spot price?

48:25 Yes. So, as I mentioned, our team is on the ground in China in the next week or so, but they have been visiting multiple purchasers of molybdenum over the past 18 months. And so we do have probably as good a first-hand understanding of that market as anyone else in the Mali space. And we're seeing a very strong demand for molybdenum, effectively a demand that would be paying spot prices that we see reported in the public domain today in that $33 a pound range. There's a number of upstream producers of feral molybdenum that just can't get enough supply. Some of them are working on 60% of the molybdenum supply that they require to keep their plants at full capacity. So yeah, we can share with the audience that we're seeing that spot price confirmed on the ground.

49:22 I'd also use an example that we saw recently in Mongolia where the Mongolian Stock Exchange has been selling commodities to traders directly. They've opened up auctions for coke and coal and copper and recently held one on molybdenum and the spot price that was paid or the price that was paid in that auction was bid up 20% from the starting price and actually achieved a $34 a pound price, largely from Asian buyers. Molybdenum from Mongolia is currently sold into China and Korea. and that spot price was for a concentrate that was inferior to what we would have produced at Zoon Mod. I think it was mid-40s Mali Con.

50:07 So yeah, we can say there's some real solid touch points that we're seeing in current time for Mali pricing in this range. I'd also say that based on the potential for supply to come on that could meet demand We just don't see those major primary Mali deposits coming on with the exception of one in China that comes on at the end of the decade that can fill that deficit. We'll continue to see that supply deficit exist even with future supply coming on from other producers. So very encouraging set of events on the Mali market side.

50:48 Another question from the webcast, Peter. What is your anticipated timeframe for identifying parties for Off-take agreements and or a potential joint venture partner at Zunmod.

51:00 I don't know if I could put a time frame on it. I think I can say that we have a number of very interesting discussions going on with parties that include financial partners, operating partners, off-take partners, and those discussions will continue until we find a partner that works for all parties. But yeah, it's certainly a high priority for us to move forward with that type of engagement.

51:33 Another question from the webcast. Where do you see all-in sustaining costs settling as grades increase?

51:41 I'll let Bob speak to that. He's across those numbers.

51:46 Thanks, Sean. We continue to expect our ASIC on a per ounce basis to come down. Between Q2 and Q3, there's a relatively significant reduction. This is driven primarily by an increase in the overall production, given somewhere in the neighborhood of half of our costs are fixed. Overall, ahead to next year, our team at EarnMongol is undergoing a business planning and budgeting process as we speak, so we expect that we'll have good numbers from them in the Thank you, Bob.

52:37 Operator, that looks like that's all the questions we have currently from the webcast. Did you want to re-poll for the live call? Sure. Ladies and gentlemen, Just a reminder, if you have a question, please press star one. We don't have any other questions on the queue right now.

53:10 Okay, well, thank you, operator and Peter and Bob, there's no more questions from the webcast. So I'm going to turn the call back to Peter for closing remarks.

53:20 Well, thank you, Jon. I just wanted to reiterate, I guess, the exciting year we have in front of us. We've set the stage with a commercial operation at Bayan Hyundai, but I think the value that can be created through exploration is tremendous. So thank you all for joining us, and if you have any questions in the future, please reach out directly. Thank you. Ladies and gentlemen, this concludes today's conference call. Thank you for your participation and you may now disconnect.