Generation Mining 2023 in Review - Preview of 2024

0:04 Good afternoon, everyone, and welcome to the generation mining update on the highlights from 2023 and a preview of 2024. Joining me today are our chair, Carrie Noel, Jamie Levy, our president and CEO, and Drew Anwell, our chief operating officer. And with that, I'm going to turn the proceedings over to Jamie.

0:32 Thank you, Anne. Thank you all for joining. As we're all familiar this presentation will have some forward-looking statements so if you can't read it here please go to our website and you could read it in its entirety. But thank you for joining and it's good afternoon or good morning depending where you are and it's nice to be out here again. I know we've been a little quiet as of late and we're not hiding. It's just been a tough sort of market but markets like today where we see palladium up over $100 and copper up 10 cents, maybe we should have some more webinars here. Maybe it's our doing that has created this uptick in the market, but thank you all for joining us. And, you know, as Anna mentioned, we would like to go back and give a little recap of what happened in 2023 and what's going to happen in 2024.

1:22 And as always, Ann, Kerry, and myself are always here to answer questions from investors or other investors who are here. Half the time it seems like we're answering questions from some people writing stuff in the chat rooms. So, please call us and please don't believe what's in the chat rooms. We'll tell you some more entirety than what people might read. But we're very happy where we're at in this time right now. You know and we'll start off with the location map here. For those of you that don't know we're in the north shore of Lake Superior, about 10 kilometers from the town of Marathon, 30 kilometers from the famous Hamel Gold Camp. You know, and one of the interesting things about having this location slide up here is we've all read in the news that there's been some issues down in Panama with the first quantum mine. And then we've also read some issues. I'm sure we've read about it in Columbia right now with the South 32 nickel mine having some issues right now. So it's good to be in Ontario, Canada, what we believe is the number 1 jurisdiction in the world. It's great to be here and we're happy to keep developing this project.

2:28 So, and the next slide, please. Again, just more of a location where we're at, you know, mentioned numerous times infrastructure is great for being in northern Ontario, Canada. We do have supportive first nation community of bit of garnish now beg a very supportive town of Marathon. Great to have the clean power, carbon-free nuclear from outside Toronto. It's great to have the highway. You know, we're, again, very rare to get infrastructure like that in a mining project in Canada.

3:04 Next slide. Just to go back, those of you that don't remember what we have, it's a very large resource, over 4 million ounces of palladium, over a billion pounds of copper, and 1.3 million ounces of platinum. As you can see just underneath it, it'd be a very large

3:21 production per year of just over 165,000 ounces of palladium, 41 million pounds of copper, and 38,000 ounces of platinum. So we don't like to look at it as what it would cost per pound in the ground, but if you're starting to look at copper, where I think Kerry and I worked at, it was around 2 cents a pound in the ground, and palladium was around $15 an ounce. So it's very cheap relative to our market cap right now. We're not alone, we're not the only one that is underperforming right now, but we just like to take a note that is substantial resource. Obviously, our reserves are a lot smaller than that in our feasibility study, but it's a very large project. Some of the highlights, again, from 2023, we did update our feasibility study for new capital numbers from some of the COVID escalating prices.

4:10 We did get our mandate letters of senior security of upwards of $400 million from Society General Expert Development Corporation in Canada and EDC. And obviously at the end of 2022, we closed in the 2022 was the wheat and precious stream of 240 million, which we've already drawn down 40 million. Of note at the end of 2022, we did get our EA, environmental assessment from the joint review panel. So we're able to apply for our permits. We've already got the phase 1 permits approved, which were not as easy as we anticipated, so a little bit longer, but we got them all completed from the closure plan to the species at risk permit to the permit to remove trees have all been there, and we're starting to receive.

4:59 Our face to permits, which true will talk about later on the presentation. Other notes that we did do this year that are in the highlights here, I'm just thinking of right now, we did close the financing late last month, which enabled us to have this cash position, which is very favorable for us and like some of our peers right now, we have just over 17 million in the bank, which is a great way to start the new year. We also do have some marketable securities of a company called Moon River, which we had this Davidson Linden project that we ended up selling to Moon River for 600,000 in cash and about $9 million worth of stock at today's prices. So it's great to have this asset that was not getting any value on our balance sheet and now we're getting some value on marketable securities.

5:46 So it's a great finish to the year and I think we did a great job last year in a very weak market. Next slide please Ann. And you know we're getting lots of phone calls and about how underperforming we are. This is just a chart, it might not show up so well on there, but just us compared to Impala, which is I think the second largest platinum producer, and Sabania, which is the largest platinum producer, and ourselves and actually the price of palladium. As you can see, we've all pretty much gone down the same direction. We all went up at the beginning of 2021 and then we ended up going up again in December 2022, but we've all fallen off together. We're all down 60, 70, 50 percent, somewhere in that range. If we could put in a few more charts, Even the TSX Venture, I believe, is down around 40, 50% since the same timing.

6:34 So misery doesn't like company. I'm a large shareholder as most people are on this phone and on this call as Kerry, but we're hoping that this last little sort of blip up in our stock will continue and we can hopefully get some appreciation of our share price. So on that, next slide, please, Adam. And Kerry, I think you can take it away from here. Do you wanna add anything in on that last slide before I jump over to. Well, that's good. Thanks, Jamie. And yeah, so I'm gonna talk a little bit about metal prices and where they've been and where they're going, at least where we think they could be going and also kind of the state of the market right now. And this is a graph that we took out of a Nurilsk report. And for those of you who follow Palladium would know that Nurilsk is the largest producer in the world.

7:27 Out of Russia, it produces about 40% of the mined palladium. They are also listed on the London Stock Exchange and they put out these regular reports on palladium that are surprisingly candid and full of really interesting information. You should read them if you don't already subscribe. But this graph actually is very similar to 1 that we have actually prepared in-house. And what it does is it compares the all-in sustaining cost of producing palladium in all these different mines around the world. And interestingly, the average cost to produce an ounce of palladium is about the same as the average cost to produce an ounce of gold worldwide, which is around 1200 to 1250 per ounce.

8:16 So that shows that at today's palladium price, literally 2 thirds of the mines in the world are losing money. And that can't obviously be sustained. So either the price of the metal has to come back up or some mines are going to close, which would probably in turn push the price of the metal up. The metal has been in deficit. It only goes here along the top there back to 2018, but actually going all the way back to 2012, there's been a deficit in palladium each year. And it's a bit opaque as to where the difference is made up. Some of it is made up from stockpiles and ETFs that were holding the metal. There's also been a much rumored selling by the Russian government, especially in the last 2 years since the war started. But what's interesting here is that the total supply and demand, how closely it is in balance. And the 2023 number, the 100,000 ounces is what was estimated earlier in the year in the spring by Johnson Matthey and the 900,000 ounce deficit was updated just in the past couple of weeks by Narelsk.

9:28 So If that deficit is true, then we do have to see a correction. But I'm going to talk a little bit going forward about why we think the price has been down to where it is. But as you can see, very, very closely balanced. And here it is, 2023. Again, on the left there is the Johnson-Matthew number I believe on the right there. No, on the left is the number that was predicted earlier this year, upgraded to 900,000 ounces and expected to be 400,000 ounces in 2024.

10:06 This is a real interesting one as to some explanation of what has happened to the price in the last 6 months. And look at those short positions coming in that's a million ounces going short in a market that's only 10 million ounces in in that's all in the past 6 months so that's got to get covered that that's future buying so

10:32 and in fact it's to the point where Norilsk is predicting the possibility of a short squeeze happening next year, which I, you know, that would be a messy market, but it is something that could happen. So the shorts have really been hammering it. And why are people shorting it? Well, there was so much talk about electric cars. Electric cars are gonna devastate palladium. Well, you know what? With all the electric car sales in Europe and China, and you're hearing about all the time, Palladium demand was down 1% in 2023. 1%, that's it. Why is it only down 1%? Well, because another type of vehicle, other than EV called a hybrid, and there's plug-in hybrids and regular hybrids, they use more palladium than a regular car because they don't burn as hot. And so they have to put a little more palladium in each car. And so what that means is, and hybrids are outselling EVs by more than double worldwide.

11:28 So that is one of the things that has really made up some of the difference. Another thing that's made up some of the differences is the emissions regulations in Europe and China especially and probably coming into the US are requiring them to scrub out from 98% of the gases that they scrub out now to 99. And that's gonna take a little bit more palladium in each car everywhere, every internal combustion engine car in the world, including hybrids. So we've got increased loadings in each car. We've got hybrids wildly outselling electric vehicles. And in our opinion, hybrids are the only way that the world can really go. You know, if a hybrid car that is going 100 kilometers on a single charge before it has to switch to gasoline, they've shown in studies that 90% of the driving in that car is on electricity.

12:21 So you can switch over to 90% electricity and you don't have to have that big battery. You don't have to have the weight. You don't have to have the long charging cycle. You can plug it into a 110 and charge it overnight at home. So hybrids, that's why hybrids are more popular. And as the hybrid range increases, and then you don't have any range anxiety, because you can still go to the gas station and fill up, hybrids we expect are going to be the way to go. And that's going to only be improving the outlook for palladium going forward. There's a couple of other issues, battery electric vehicles have started to stall. You might've read about that. And then the last thing is, is even they're stalling, even though there are still government incentives and those government incentives won't be around for much longer.

13:13 And just a little story, I was in a taxi in London a couple of weeks ago and the taxi driver was telling me he had to find a new place to park his car because it was electric and his parking garage would not allow him to park in there because of the weight of the car and they're worried that if the garage fills up with electric cars it's going to collapse. So that's another yet another issue that people haven't really thought about is where you're going to park these things. Go on to the next one, Anne. So this one just have a quick look. This is a 1 company's forecast. If you look at the gray numbers there in the middle, those are the hybrids. And you can see that going across from today, it really, if this graph is correct, the consumption

13:59 of palladium in cars is only gonna increase because all of those gray ones need more palladium than a regular internal combustion engine. And those are going to increase. And if it if these numbers stay the same, so the electric car will be important, but hybrids will be more important. And that's that's that's our feeling as well in our company.

14:20 So just another few things, they're really looking at hydrogen storage and using palladium for hydrogen storage. Nor Nickel has given the Chinese researchers a hundred million dollars to look for ways to do that, to use more. Most of the research into hydrogen has used platinum because it was a lot cheaper. But now that palladium has come down, they're looking at new things that they can use it. And then there's other things like e-fuels that are in cars and they will need more palladium. I don't know if you've been following the e-fuel market, but they're actually creating fuel out of carbon dioxide. It's expensive now, but it's another alternative where so you can keep internal combustion engines on the road and still have no carbon footprint. And there's a few other initiatives as well. There's also a company called Platinum Group Metals and their partner is Anglo and they have done some research into this Lion battery technology that uses palladium and lithium in a car battery with a much longer range. So that's another thing that could also hugely impact palladium. So palladium is not just a 1 trick pony. There's a bunch of other things happening in the palladium market.

15:35 And then going to about supply going forward. So Norelsk announced earlier this year that they're gonna be down 8% this year due to smelter maintenance. And that's maintenance is gonna continue at least into the first half of next year. So that's a decline in production. Anglo has slashed next year's production by 500,000 ounces of BGMs. A third of that is palladium. Sabanier has laid off workers in Montana. They're talking about 5,000 workers in South Africa closing some of the shafts.

16:03 Impala the same in that chart that you saw on the the cost of palladium. The one on the far right there was Impala's project in Ontario. It's over $2,000 an ounce so that you know these things can't continue and And the Chinese company that owns the Babubung mine in South Africa has cut its workforce by 75%. And then another thing happening, there's elections in the spring in South Africa and ahead of an election it's predicted that the power company, the state-owned power company, will be much favoring households over industry when it comes to who gets the electricity. And that of course is gonna impact South African production going into the, certainly in the first half of next year. So you've got all this stuff happening that is gonna reduce production and yet consumption is maintaining the same. And that's why we're predicting a good year. You know, we were blindsided by Palladium this year as were Sabanier, as was Impala, as were most of the analysts, but it looks like it was the shorts oversold it and it looks like it's ready to come back, especially in light of all these closures and cutbacks.

17:26 So just talking now about our copper. So we have a really unusual thing for a palladium mine, and that's we have a big copper credit. And, you know, if we're wrong on palladium, if palladium doesn't come back, our problems can be fixed with copper. Because copper, if electric cars do take off or even hybrids take off more than they are now, we got a big copper shortage. You know, we had 4 new copper mines come into production in the world in the last 18 months going into early next year. And we predicted, even though we were wrong on the palladium price a year ago, I was saying,

18:04 look for copper to get weak because copper, we have all these new mines coming. But then after those 4 mines, there is really nothing in the world for the next 4 or 5 years. So I think we're going to see a sustained period of increases in copper prices due to the simply lack of new supply. And just looking at the supply now, of course, everybody was talking about a big surplus this year due to those new mines coming in, But then guess what happened? Cobre Panama happened. Anglo slashed their guidance by 200,000 tons. La Bomba keeps having strikes in Peru, cutting out further. Escondida, the biggest mine in the world, the grades keep going down.

18:46 And analysts have now switched their expectations to looking at a big deficit in 2024. Another reason we think copper is going to be strong next year. So we've got 2 metals. And if you just go back 1 slide there, Ann.

19:03 Can you go back? Yeah. So just look at the middle table there. What's interesting is that $5 copper and today's palladium price, we become a copper mine. More than more of our 45% of our revenue will be coming from copper compared to 41% from palladium. So we do have 2 ways to increase our revenue and if either one of these metals take off, we're good to go.

19:32 And these are just some of the quotes by some of the people in the know. And I love the one from Friedland in the top left that, you know, his big Ivanhoe deal, which he's done a great job on. But we need 8 new ones by 2030 to keep up the demand. 8. Well, you know, he started that Kamakakula in 1996, I believe he acquired that property and it's taken until now to get it going. So that's how long these things take. And these 8 new mines are not going to happen. So we're looking at a shortage in copper.

20:11 And just to finish up then, some of these numbers have been mentioned earlier, but you know, ours is a good size mine, 166,000 ounces of palladium a year, 38,000 of platinum and 41 million pounds of copper. This is a big mine. And you saw that table with all the different, all in sustaining costs. We would be on the very left-hand side of that table, $813 an ounce.

20:38 And there was only 1 or 2 mines that are around the $800 level. The rest of them were all higher and more than half of them were above $1,200 all in sustaining costs. So we look good in the comparison of the rest of the palladium world.

20:54 Thanks Kerry and just before I pass it off to Drew here, there is a box here for question and answers. We will answer those questions at the end of the presentation. So if you could please ask your questions there or in the chat box and we'll read the questions. I have no chance to look at them yet, but we'll leave some time at the end so we could answer your questions. Just Before I hand it over to Drew, there's one other quote that we weren't able to get on there, but I think it's been said by Freeland, but by numerous other people, that over the next 27 years, the volume of copper needed to reach net 0, we will have to double production of all the cumulative production over the past 3000 years. So for 23 years, we'll need to double the production over the past 3000 years. So we pretty much realize how important copper is and how important this project is because of the copper component of our deposit.

21:51 From here, Drew, you can take it over. Thanks, Jamie. Thanks, Kerry. People are going to be asking what are we doing going ahead now? I'll talk about the engineering and costing side and Jamie will subsequently chat about the financing.

22:09 What we're doing right now is, as you folks remember, earlier this year in March, we completed an updated technical report or an updated feasibility study. And that was really more than your average feasibility study at that time where the prices were from 2002 and into 2003 before we published.

22:30 82% of the plant costs were largely fixed. So we knew what those were. Now some of those have gone stale. So in this, into Q1 next year and going forward, we wanna make sure we keep the feasibility prices valid, consistent, on top of things so we know what they are. And frankly, we also have the opportunity to make some incremental optimizations, be that in some of the designs and advancing the engineering where we can, understanding the start of the project and also more importantly we'll finish up the construction permitting. Permitting in Canada, in Ontario

23:18 is a process in air quotes but our team has been doing exceptionally well in bringing them in. As Jamie mentioned, not all of them came in as quickly as we had anticipated, but frankly, we're meeting a lot of benchmarks, we're exceeding and coming in faster. And also we have the opportunity, we talked a lot about copper and I have a couple of slides and in the new year, we can talk further and we'll communicate further about the explorations. Next slide, please, Anne.

23:56 So in terms of the optimizations that I mentioned, we will look at the capital costs. We will look at where designs can be optimized. We have the opportunity now to look at alternative mine sequencing to see if we can target higher grade domains, better NSRs in the short time frame. This is typically what operations would do in that phase coming up

24:28 to production or pre-construction. And that's exactly what we'll do. We will advance the detailed engineering smartly. We wanna manage our cost burn, but we certainly wanna advance the engineering in addition to where we can optimize. And again, the timing of the spend will largely be driven by the timing and the opportunistic of the financing. Like I said, as Jamie will talk about in a couple of slides.

25:03 So where are we with the permitting? As was mentioned up front, we've broken the permitting into 3 phases. Phase 1 is really what would be necessary to start the early works as in tree harvesting. And we have all the regulatory approval to get started on that.

25:25 Then the phase 2 is really what's necessary to start the drill blast and and the main part of the construction. And as you see from the technical side of that, all of the documents on the technical and supporting documents have been submitted. And we're in the final phase of discussions with the government. We may see some of them before the end of this year, but as you see, we flagged the bulk of them to come in in the winter of 2024. And then the final phase, phase 3, that's for a federal permit from ECCCC, which is on the schedule too. We expect to have that in the first half. That isn't contingent on starting or the first phase of construction, but it certainly is down the path.

26:15 And you'll see subsequently when we start into construction, we'll also start applying for the operational permits. So all of the dozen or so permits here are all directly related to the construction phase. That being said, they're also linked to the operations phase, so the government and certainly Ontario has done a good job to make this file a priority, understanding that we have 3 critical minerals in both Canada and Ontario. So both federal and provincial governments have been attentive to our files. Now, let me chat quickly on the exploration. So as you folks know, the main area of interest for generation over the last 3 years has been the deposit itself, the main zone and W horizon.

27:11 That's the South pit, the North pit and the designs we have that are outlined in the feasibility study. Now, the other things we're looking for, we've got a target rich environment across the site. Part of the targets we have, maybe Anne, you can go to the next slide for me and I'll talk about the goals for this program. We have raised with a recent financing, we raised $3 million of flow through. So what we're targeting and the goals for the 2024 program is to look for those copper dominant prospects. And again, what are we looking for? We're looking for areas that are close to the current footprint that could easily fall into a future pit design or mill feed.

28:00 So the targets we're looking at is Bawobig, which is in Ojibwe, that means metal. So that's a prospect, not a resource yet, but it's just north and west of the existing main zone. What we've seen in the historical drilling is we're getting intersections in drill that's higher than the average grade of the main deposit. So we are targeting that. We'll understand that a little further. A little further to the west, we've got another target called 4 Dams, which is a Copper dominant target. What we've seen there from historical drilling and surface expression is we have seen high-grade Copper there and low PGMs, which is very different than the main deposit.

28:55 And incidentally, very similar to Sallie. Sallie is further to the West, so That's not something that would come into the production profile in the short term, but in the past we've had extremely high-grade surface samples that indicate extremely high-grade, a lot of Copper, a lot of PGMs. So again, a very interesting area. It's tough to get to, but that's part of the challenge on this property. It's a good thing and a bad thing. We've got a lot of targets and Historically, our company and previous operating groups have been targeting PGMs. As Kerry outlined, the future PGMs, we've got a bucket load of that in the main deposit.

29:46 What we're looking for is, let's see what this property holds in terms of Copper. So it's a very interesting, it's not a huge program. Like I said, it's about $3M, but we will look through all of the past work that's been done. We'll compile that. And what we also wanna do is we wanna get a third set of eyes on this, where historically we've been looking for PGMs, we believe it's worthwhile to look for some new copper targets as well. So Just a couple of sketches and you'll probably see these coming ahead with subsequent news releases. Bewobik is a long section where we're looking east. You see some of the drilling we've done historically.

30:34 Some of that was previously called the Chonolith zone. We were looking for some of the feeders to it on these lineations. It's slightly north and west of the existing main zone. You can see it's largely an open pit target. It's at similar depths to the main deposit. So we're very interested in this. It's not at a resource level yet. You see some of the grades there, the Copper equivalents, and certainly has some interest for us. 4 dams, it's a slightly smaller target, but has the possibility for some high-grade massive sulphides in an ultramafic pipe. This is a different sort of deposit, a different sort of genesis to the main deposit, but it's on the rim of the contact.

31:33 Back in 2020, if I'm not mistaken, we had an MT target that was very interesting that we haven't fully tested yet. We'll be nimble with this program and we want to see what exists here. It is still an exploration program that we're looking for the high-grade potential copper. As you folks may recall, we do have a resource at Sallie. The real estate, the topography out in the Sallie area is pretty rugged. So last summer we did do some some boots on the ground prospecting and what we see here is a few trenches that we want to expose later on in the summer. We'll expose that that ground there. There's not a lot of overburden as you folks would remember across the site.

32:29 So The challenge here is simply getting the equipment out there to do these trenches, we'll expose the area and we'll help inform ourselves of what the bedrock looks like on top of that existing resource. We don't plan to be drilling this target this year, but we certainly want to get a better view of some trenching on this property. Trenching has been hugely important for us and actually a very valuable exploration tool just because of the lack of overburden. It makes it very efficient. You can expose a lot of ground, but you get more insight than simply a drill hole. I think that's it, Anne. Over to you, Jamie. Thanks Drew. And just to follow up with what Drew was saying about focusing on copper, the previous operators being Sabani and prior to that Stillwater, who acquired this project for Marathon PGM in 2010, very little exploration has been done. My guess would be 2025,000 m.

33:35 So it's a huge church. It's a large property package of 220 square kilometers. There's a lot of work that needs to get done, and we plan on doing that over the next year and more. Just to look, as you can see by that pyramid, we do have lots of targets. I think there's over 16 different targets, and I'm sure there's a lot more targets. We're drilling some of the least risky targets, part of that pyramid. So there is a lot more risky targets that we might choose to drill later on but we have to do a little bit more work. You know, and this Jordy deposit as well is copper rich that we're not planning on working on now but we'd like to follow up on that as well. Anyways, going back to the marathon mind financing. We could just we've already talked about this, but sorry, just to go back on the exploration. We plan on having an update. As Drew mentioned, whether it's another webinar or something early next year when we get our drill mobilized and we'll have our geologists and our exploration team discuss our potential upside to the marathon project early next year.

34:41 Sorry, so back to the marathon mine financing, As Drew mentioned earlier, our feasibility study, we updated our feasibility study with a capex of 1.1 billion. Some of the work we would like to do is to look at some of the projects that have been completed in our area, whether it be Maginot, Cote Lake, or the successful of Greenstone, which is on budget on time, to look at our costs as compared to their costs. Maybe we could reduce some of our costs, maybe we increase some of the costs, but our hope is that we can look to optimize some of that capital going ahead. And again, phase 1, which we've already completed with a stream of 240 million from Wheaton. Phase 2, we anticipate we're hoping to get some certainty from the banks. By the end of this year, it looks like it's going to get pushed into 2024 about getting term sheets and definitive documents, what the senior lenders will be able to provide to us. Phase 3, we started doing phase 3 with a little financing we completed last year of $15 million, but obviously we need some more money. So we could talk about some of the critical metals strategy money that's available from the federal and the provincial government of Ontario, also the private equity funds that are out there.

35:58 But we're looking to move this project along and have a fully financed project when the market allows us to raise that final money to have that going ahead decision, a sanctioning event. Part of the government funding for those of you that don't follow like we do, there's a cleantech manufacturing which is an investment tax credit of 30% on your processing plant. There's a company that's already put it into their study. We haven't done that yet, but that would be huge savings for us if we were able to use that 30% tax credit. It's supposed to be coming out by the end of this year, the federal government. So hopefully we'll get some certainty or understanding whether our project being Critical Metals will be able to access that investment tax credit. There's also Canadian Infrastructure Bank, which is given, it says $5 billion, but I believe it's just over $1.9 billion to critical metals projects like ourselves. We like to tap into that. And then There's another bucket of funds that Critical Metals, which is another branch of the Infrastructure Bank, but this is called CMIF, Critical Metals Infrastructure Bank, and this is another $1.5 billion that we're having calls with to find out if we could access some of that funding as well. And of note is the Ontario Infrastructure Bank is just earmarked to the $3 billion. We have no idea if it's for private companies or public companies like ours, but we're going to get some understanding

37:28 from the provincial government in the next coming weeks whether we can access some of that funding as well. So there's lots of money available. It's a question of whether our project is allowed or our companies allowed, and if it is, we're certainly going to be first in line because we're one of the few development projects that I know of critical metals in Ontario or in Canada. That's developing and near construction decision. And we're supposed to be under 40 minutes. I think we're here to answer some question and Thank you for your time. Muted. Go ahead. And you're muted. Apologies.

38:16 It's like a seance. I've gone through the questions and put them in buckets or categories so that they'll be easy to answer. So gentlemen, first up, what criteria are being used to drive a sanctioning or go decision? I think I'm trying to understand the question, but the sanctioning decision would come on a fully financed package, So we would need to have the remaining capital required to make that decision. So that's as mentioned in that last slide, we're aiming to get that fully financed package out to the shareholders. And once we do, that's when we can make that sanctioning event.

39:05 Anything to add on on that, Kerry? Nope. I think they just, other than to say, the last thing you want to do is start a mine without having all of the money in place. You really want to have it all there before you start. On the economics, what is your NPV at an 8% discount and why are you using 6% or why did you use 6%? So 6% was somewhat in between, obviously 5 and 8. 80% of our revenue being precious metals, which gets discounted at 5%, and then the 25% being copper at those prices that we use in the feasibility study if you did a weighted average that would work out to 6%.

39:55 So if you look at our sensitivities within our technical report you could see what this project would be at a 5%, 6%, 8 or 10% as well. So they can do the sensitivities themselves. Sorry, Kerry, go ahead. No, no, I just wanted to make that point. And as companies get further along, you lower the discount rate a lot of times and obviously being in Canada versus some other countries, not in a first world jurisdiction, sometimes the discount rate goes a little bit higher and that's being in Canada, the QP's decided 6% was applicable. So next question, what are the conditions that Gen M needs to meet in order to draw additional friends from funds from Wheaton.

40:48 We we tens money would come on a sanctioning event as well on construction decision, so we would need to have the banking syndicate arranged and we'd have to have the remaining money to be spent before we draw down on the weed money. So the weed money would come in prior to the bank money, but we'd have to spend that first money before the weed money is available for us. And is additional streaming being considered? I would say everything is being considered. That is not our first choice, but all would be considered at a higher price. Streaming would be advantageous as well, But our first choice is not to stream any more metal, but we would look at all alternatives right now.

41:39 Okay. When will generation mining start harvesting trees? As Kerry had mentioned before, the last thing you want to do is start a project and then not finish it. It would occur on a sanctioning event or when we knew we were close to a sanctioning event. So we have very good support from the town of Marathon, the First Nation groups and from the government. The last thing I think we'd wanna do is harvest a bunch of trees. Maybe some trees would be okay, but we'd like to have a fully financed package before we got into doing too much early works. Okay. And when will generation mining start pulling ore out of the ground?

42:31 Drew, what was it, 20 months, 24 months construction? Yeah, the construction phase from early works to completion is roughly 24 months. And That's part of the optimization that we'll do now. We are looking for opportunities to advance construction. We're looking on modular construction for some of the key parts of the plants with support of the OEMs. As you know, it goes from the start to the end and what's the cheapest, best model to expedite that. So at this point in time, from a sanctioning decision, at about 6 months for early works and preparation, and then 24 months for construction, and then 3 to 9 months to reach commercial production.

43:29 So A new question in, and while you're at it, Drew, could there be room to lower the all-in sustaining costs with the increase in market pricing for gold and silver credits? I guess the simple answer is, it's 2 parts of the equation. So we certainly wanna look at opportunities to lower the capital costs, to allow for the ease of financing and support of the construction phase, but also any operation will live on margins. So whatever we can do to lower the operating costs and the equivalent of the all in sustaining costs, we will certainly look at those things.

44:15 So the simple answer is yes. And while we're on the discussions of financing and sanctioning decisions, is a joint venture an option and has that been discussed with any potential partners? Joint ventures have been discussed. We did have a joint venture earlier with Sabani, but we are looking for other joint ventures as well as part of our phase, I think it was phase 3 of our financing to help alleviate the final capital needle for a sanctioning event. So Drew, I'm gonna bundle the next 2 questions and they came in timing before you gave your exploration presentation, but do you expect to initiate any copper exploration next year?

45:09 And can you give additional color on exploration on Sally, Jordi, et cetera? So I'll back up. So if I didn't answer clearly, the answer is yes. We certainly want to look for copper. We've got a bunch of PGMs on site. And as we all know, copper is one of the critical minerals. So Are we looking at Sally and Jordi? The answer is yes. With the $3M we raised, the access into both of those properties is a challenge. Again, like I said, the goal we have, we want to look for Copper dominant, which Sally and Jordi would both meet those at potentially higher grades. So yes, those meet the criteria.

46:00 But we're also looking at lower risk targets that are more proximal to the main deposit, so the main pit. So, but Wobik fits that one very well. 4 dams is within 4 kilometers. So, should we have a great discovery there and we have an operation, then that could certainly be trucked in. Jordy and Sally, those are the most advanced projects we have, we have resources on both of them. We would want to drill more, but frankly, I think there's more understanding we need on both those deposits. We will get boots on the ground, certainly at Sally. Our exploration team is chomping at the bit to get into Geordie as well. If I could just add in, the challenge to Sally is the cost.

46:53 So I just want to make sure, it's a little bit more expensive to get up there to drill because it would be helicopter support versus road access that we'd have at Fort Ames and Bewobic, which is much easier to drill in the wintertime with road access than it would be helicopter support in the winter. Yeah, thanks for the clarity, Jamie. Great point. Just Pivoting back, and this is interesting. So, Kerry, this is a comment for you, and possibly Drew, do you have all the technical data from the Anaconda exploration for copper way back in the 60s? I logged a lot of the core for Copper and we had lots of Boronite at depth, etc. PGMs were not reported. So yes, we do have all that data set and I mentioned it in passing.

47:43 What we want to do this year is each of these deposits, each of these more than a dozen targets that we have on our pyramid, they all have signatures to it. So what we will be doing is we're going on a per project basis, per target basis, and we're compiling all the fundamental data on that. So exactly to your point, when we look at the main deposit and the W Horizon, which are certainly from a similar genesis, but different deposits. We see that there's a different ratio of Copper to PGMs. It's pretty consistent through the main zone and it's different but consistent through the W horizon.

48:30 We see similar signatures across the targets. So really what we want to do in this year is compile all of that information so we can get effectively the unique signatures that exist for each of those deposits. So we can relook at them and evaluate which ones we want to prioritize. And Drew, if I could just add on to that individual, we begin our site visits at this 2 duct discovery, which was the discovery hole by Anaconda. And we could still see the color of that hole back in the 60s. So we're well aware of the initial drilling that was found by Anaconda back then. And that only PGMs later on were found to be in there in the core as well. So, but it's a great question.

49:21 So Final question that would appear on geology and constituent metals. Is there rhodium present in the ore body? The answer is yes, there's Rhodium in the deposit. It's commonly found with PGMs. The concentration that we see in a drill hole would be very tough to pick up on a regular basis. When we did our phase 3 met testing, we actually produced a concentrate. And in that concentrate, we did see, I think again, Jamie, you may remember, I think it was 3 grams of Rhodium in one of the concentrates we picked up, one of the concentrates we developed.

50:10 It certainly exists in the deposit. It's not at a concentration where you could put a resource around it, because it is almost at detection level in the drill core. Okay. So pivoting back to questions about all in sustaining costs and capital costs, What might equipment leasing save on the CapEx as, and I'm struggling to remember, GGM stock symbol went down that road. Do you want to tackle that, Jamie, or Do you want me to jump on? I don't know who is Greenstone GGM. Is that who it is? Yeah, I think so. That's Equinox's stock symbol. Anyway, it doesn't.

50:56 So it's just a question on equipment leasing and its effects on the CapEx. So maybe I'll start, Jamie, and you can finish up. So in our discussions with the OEMs, we certainly have talked about, and we have term sheets for the equipment financing, and that is part of the capital, the capital costs of the project. So what we included in the feasibility study is we buy the mining fleets and then we refinance it through 1 or multiple OEMs. So the OEMs are very receptive on equipment financing. And then related, some miners have reported a reduction in construction costs from last year as inflation has started to abate, e.g. Stainless steel, has generation seen any reduction in CAPEX costs since the last issued CAPEX estimate? If so, can you guide us on the items you're seeing this in?

52:00 Yeah, 100%. So on the, great question, on the mechanical pieces, the big chunky gray things, What we saw with inflation is largely those have have plateaued, they're certainly not increasing at the same rate. And now more importantly, or equally importantly, is on the execution costs, on the construction labor costs. That's large. So that's the largely the earthworks projects and the cost associated with contractors to install the mechanical and electrical equipment. So the labor side of the construction is very much a supply demand driven costs. So there's fundamental diesel costs that go into a truck and there's dollars per hour that goes into labor, but contractors, when there's a lot of work going on, they're in higher demand and the costs typically go up.

53:02 The advantage we have is Cote will be finished soon. Greenstone is coming to an end and they'll be in the first half of next year. And Magino has been completed. So When we were doing a lot of the cost estimates in 2022 and 2023, we had to do the phone calls to the contractors. What we're seeing now, both on the earthworks and mechanical contractors, is folks are calling us back and our VP projects and the conversations are, hey, when are you guys ready to start? So the supply and demand has certainly gone the other way, and we see 3 large projects in Ontario that are winding down, and that's excellent timing for a new project to start up. So in that context, yes, and that's why we wanna keep these project costs current is because we're hoping, and we expect in some areas we're actually gonna get physical savings.

54:01 And Drew, if I could just add on, I mean, the Fed comments from yesterday about 3 potential rate cuts next year would certainly help out our operating costs and our capital costs as well going ahead of interest rates can fall like they anticipate, or at least as Powell said yesterday. So it'd be very good for us and our shareholders. So stepping sideways to the economics around palladium demand and supply, maybe Kerry, developing countries utilize enormous numbers of gas-powered motorcycles for transportation. Are catalytic converters a possible addition to this mode of transport?

54:50 And the answer to that is yes, it's already required in most, I wouldn't say most in a lot of countries, the countries that have vast numbers of motorcycles, They either don't require them or they're at some point taken off and sold because they're worth something. So yes, as countries want to clean their air further and further. Countries like Vietnam and Indonesia, they absolutely will be introducing more and more catalytic converters. And I don't have any kind of numbers. Don't forget a motorcycle doesn't use a lot of palladium, So it's a small amount per vehicle, but there's a vast number of vehicles. So I don't know at what point each country might decide to do that, but as it happens, certainly it will impact the market.

55:44 And I'll make a comment on another one of the comments as opposed to questions. We had a comment that for cars and ICE or internal combustion engines, which are 95% of the market, some of them have switched to platinum for emission scrubbing as it's cheaper. And what we're discovering about that is we think that that market's about 600,000 ounces, which in the platinum market would be just under 10% and under the entire supply demand market. And for Palladium, that would be about 10% of auto catalysts. What we noted is that when you get substitution palladium out for platinum in, it tends to happen in the first year of a new model.

56:38 And what we're seeing now is there's actually a predilection to switch back to palladium because the demand for platinum and the deficits in the platinum market are going to get quite interesting. And platinum tends right now with the technology advancements tends to be the preferred metal for use in hydrogen. So we think that that 600,000 ounces may be the top end. So switching back kind of to bigger picture on financing, sorry, I'm gonna collate some questions here. Gentlemen, Any comments on Darnley Bay or any additional color on the sale to Elton of Darnley Bay? No comments other than that.

57:30 Karen, I really like that target, and we hope that he can raise the money and do some work up there because I think that's got a lot of potential. As most people on this call are aware, it's a very difficult market for raising funds, and that's a very risky project. So I've got all the time in the world for Elton and Carson, and I hope he gets it done. Okay. So, we have a number of very thoughtful comments and questions. So how impactful has the palladium price drop in 2023 been on acquiring or obtaining the remaining financing and the discussions around the financing and how knowledgeable are these parties regarding palladium and copper markets? Do they take a longer term view or are they simply moved by the headline of the day?

58:29 Any comments? Kerry, why don't I start and you could finish, but I would say investors would look at our stock price as we showed on one of the earlier slides with the other PGM producers, along with developing gold companies. So I think it was the whole market being in that position. So certainly the palladium market, it wasn't just the palladium market. Lithium was also gone, I believe, down 70% as well. And that's a commodity that was in favor. So it's not just palladium. I think the lenders, investors, private equity funds will take a long-term view as they know that, as Kerry had well talked about the Norell's model about the all-in sustaining cash costs that a thousand dollar palladium is not sustainable to companies they will lay off everybody and shut down production so we all know what happens when that supply comes off the prices have to go back up. So we're in that position right now.

59:36 You know, Kerry jumped over the rush effect as well. There's more news about British citizens getting, I think, penalized now for doing any work with the Russians or anything involved on palladium. So there's, there's lots of, I believe, good news for, for PGMs. And I believe the whole market coming out of the stats loss selling season early in 2024. Carrie, did you want to add to that or should I move on? No, I think that covers it. Okay, so you know, part B, when do you expect the financing to close and how are the efforts proceeding to access government funding? I would like it to close as soon as we can. That's as much as I could say, we're working tirelessly.

1:00:29 We're working as fast as we can to get it done. Governments work fast, but not fast enough. You know, I think Drew had a little saying, hurry up and wait. And I think that's kind of what we're doing. We're waiting for the market to able us to get that final funding and to start. So I would, you know, cautiously optimistic, very eager to get this thing done, but we need support from the market, not just the palladium market and the copper market, the general market, and obviously our share price as well. And would you comment on any of the challenges or sequencing risks on advancing the offtake discussions given today's challenging palladium price and the copper price volatility?

1:01:18 I see no issues with our offtake. We have a very clean concentrate, very valuable. As Kerry answered the question about rhodium or drudid, we do have rhodium in our concentrate. We're not able to get economics of it. I'm sure there's other material in there, other rare earth metals that the refiners or the smelters will get. I'm not worried whatsoever about the offtake. There's capacities at the smelters, the Western smelters to send it to. So I'm not concerned at all by that. And so I think we're at our final question and we're a little bit over time, but we will proceed. So with all the partner financing, How much is going to be left for the company for overall profit once it gets this project going?

1:02:06 And it will depend on metal prices, which we can only estimate, but I'll turn this over to Carrier Jamie. How much will be left for investors? It depends on what avenue we go through. As mentioned, a phase 3, so there's different. We could be left all of it, we could be left with a lot less than all of it. It just depends on how much dilution we need to occur, whether it's a part of the project on the asset level, or if it's in shares, whether it's a stream. So I can't quantify, I can't give a number to that. So I think as most investors know, Cary has a substantial amount of shares. I own a bunch of shares. I bought more, I think yesterday, the day before.

1:02:54 We bought some in the financing. So we would like to be as least dilutive as possible for our shareholders. And I believe that's it. So I'm gonna leave this slide on the screen for just a minute. If we've missed any of your questions, please do reach out to us. Jamie, Kerry and I are available to answer your questions. And with that, I'd like to thank you for attending today and Feliz Navidad, Happy New Year, Merry Christmas, Happy Hanukkah, and we'll talk soon. Happy holidays. Thank You