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19:59 that will not be able to receive the banking research. We also have Laurentian and Coremark who have put out either watch lists or smaller unofficial research as well. So we're certainly growing our bank coverage and I think that will continue to grow in the future 0.25. So we should expect maybe 1 or 2 more banks in the next 120 to pick up coverage for the stock. So further endorsement of what we're trying to accomplish here. In terms of investors, over the last 12 months, we've been successful to add 2 major shareholders, Eric Sprott last summer and Fidelity International over the last few months have picked up on market and post the resource update have doubled the position to just less than 5%. I think you'll also see that institutional ownership grow over the next few months as well as we move to the BFS and expansion to phase 2, as well as the back of the exploration restart, I guess on A2 and Mung, as well as a start at UK imminently.
21:07 So I just want to reiterate what we've accomplished and where we started. We bought an asset for US$20M and we built it for US$20M. That's now in production. We've listed our company in the US on the OTCQX markets. We have a strong balance sheet, which allows us to be much more aggressive this year than last year. We've shown we can execute and we have a strong pathway to grow here through exploration in the coming months on both properties. So we're going to start UK exploration, we think, in the coming weeks. We're mobilising a drill rig as we speak and within a few weeks we're hoping to start exploration there for the first time ever. So it's a very exciting project that has never been drilled and we'll finally get down to drilling. On the back of that, we'll have our targets identified for restart of exploration at ATO and MOOC.
21:55 And I think early summer, we'll be able to start a drilling program there, both at ATO at depth, where all 4 deposits remain open at depth, but also now, as I mentioned before, stepping out for the first time ever. And hopefully we have some new discoveries or satellite deposits we can uncover. We've also confirmed the backing we have in-country. Over the last 12-14-months, we've received endorsement in capital from within Mongolia, from the sovereign bank, the Nui Stavros Sovereign Fund Development Bank in Mongolia, and then later on in the year through the Gold II program, the 10.5M USD received. That's the major update so far, where we think we're going in very short order this year.
22:41 I think now is a good time to open up to Q&A. This is really a Q&A format. We want to handle as many questions as possible. Cam, if you can kick off any questions, it'd be great. Yeah, absolutely. Thanks a lot, guys. We've had a number of live questions come in during the presentation, and so I'll just start them off. Feel free to answer any of you that know. So Nigel Reed asks, is the current choke point our crushing capacity? If so, I guess the new crusher will fix that. Yeah, I mean, well, I'll speak to that first and what else can I add into it? So that was, I would say a choke point last summer. So As we advanced production and actually announced commercial production in July, certainly that was a bottleneck that we've dealt with now.
23:27 Even today, our crushing capacity, we're probably on track for 100,000t crushed per month. That's actually as planned, as per the original Life of Mine plan. So I think we've actually addressed it. The new crusher that's coming in will certainly help and assist and can actually increase potential crushing and stacking rates, but the bottleneck has already been addressed. So I think that's where we're at now. Great, he also asked, So another question from Nigel Reed, what would be the normal overall effective tax rate? Are we aware of any 2021 tax reliefs or holidays? What Jeremy? Yeah, no, no, no, we're paying 25% tax this year. There may be an additional some accommodation because Mongolia obviously, you know, we're not out of this pandemic. That was a pandemic related tax break.
24:29 We got a little bit lucky to be honest with our cash flow, the timing of that cash flow relative to the timing of the pandemic. But we aren't budgeting for any exemption in 2021. We might get some accommodation, but we're not banking on it. Awesome. Harry Sanders asked right around the same time, so if there's any overlap, you can point that out if there's anything new, absolutely. But Harry Sanders asked, can you kindly remind us regarding 2021, whether you'll pay Mongolian corporate income tax on the full amount offset of the losses. What is the tax rate? Also at the projected production and revenue, what will be the streaming payments in 2021? Well, I mean, reasonably straightforward. I mean, the tax rate is 25%.
25:14 We expect to pay 25%. We do have some loss carry forwards. They're reasonably modest. And we are always attempting to ensure that we have a tax effective structure in place and we're working on that. But I think it's fair to budget 25% on taxable income would be would be the way to model it in terms of triple flag triple flag We stream 25% of our gold and 50% of our silver the silvers, you know you know, I guess if we hit our silver numbers, that's probably a couple million dollars on the on the If we just to just to use a round number if we if we produce 60,000 ounces in 2021 Will will essentially stream 15,000 to triple play. So we deliver ounces, not dollars to them.
26:09 So the way to look at it is essentially there's attributable ounces of 45,000 ounces to Step Gold in 2021. Okay. Albert Sung asks, what is the budget for UK project drilling this year? I think we're going to start with about a 10,000m drill program. That's roughly about US$1.5M. We think we can grow that. On the back of success at UK, we can mobilize a second drill rig potentially later on in the summer, in the year, and maybe crank that up to 20,000m. Currently, we're budgeted at 10,000m per property actually, which could double. So 10,000m at ATO and Moong, 10,000m at UK.
27:01 On the back of success and our ability to continue, hopefully more aggressively, we can double that and go up to 20,000m on each property. I think that's where you saw the exploration budget ranging from 200 to 500m because of that. Awesome. Harry also asked, when it comes to mining ore, am I correct that you now have a significant ore stockpile that couldn't be placed on the leach pads yet? Will there be a point that you will stop adding to the ore stockpile to catch up? Would this also be dependent on timing of construction of the CIL plant? Well, I guess I can confirm on the ROM pad, yeah, we have over 420,000 tonnes sitting there. So yes, a lot more can go on the pads very quickly and process.
27:55 So that's a big plus for us. In terms of the second question, I Believe it will there be a point that you will stop adding to the ore stockpile to catch up with this also be dependent on timing of construction of the CIL plan I Don't think so. I mean I can just jump in I mean, I mean we we we we can expand the wrong pad. That's a run of mine pads. We call it a wrong pad As an eel mentioned it's about 424 40, you know, we can certainly go higher than that without with our crusher now sort of crushing at plan rates and And we continue to do blasting work as we go deeper. And we don't see an issue with having to stop crushing. And in fact, that's one of the reasons why we're buying a new crusher, in order to bring that ROMPAD down a little bit. But we're quite comfortable with the current ROM pad.
28:55 That's awesome. What are the drivers of cash cost change from $607 to $550, 2020 to 2021, apart from higher 60% production? Well, the main thing is a reasonably small element of fixed costs that will be absorbed in that higher denominator, essentially. Yeah plus some efficiencies in mining you know that there are you know most of your costs and most of your cash costs, most of your mine site costs the variables but some of them affect you. How are grades and recovery rates leaching times progressing when compared to original assumptions? Any change in assumptions before 2021?
29:50 I don't think so. I'll jump in first and Jeremy can add it. But our model, the ultimate recovery rates are 70% on the gold and 40% on silver. But usually you get, you know, obviously this is the heap breach, you don't get your ultimate recoveries in the first year or the first 2 0.25. It can happen over time, it can happen in 2, 3 or 4 years or it can happen over the next year. I think usually you get about 50% of the recoveries in the first year. I think we saw that on the Gold and we'll look for that remaining 20% over time and stay on Silver. In fact, we think our ultimate recoveries may be higher than the model 70% on gold and 40% on silver. That's exactly right. Exactly right.
30:38 Cool. Nigel Reed asks, how are the worker and family community benefits programs going? Has COVID prevented the company from substantially delivering on such? Batya. I'm the corporation agreement with the local province, regarding social programs for 5 years, and we continue to do in that we still provide the scholarships to the students and based on the contract we are cooperating with the province and we continue to do all the works as promised in the contract. So during this pandemic period the company helped with the delivery of masks and first aid kits and so on. So we are helping each other. I think it's important to note also, just COVID so we don't overlook that, that I think today 70% of our staff are already vaccinated and should be 100% in the next, what, 2, 3 weeks, Vata?
31:37 Yeah. And in country, I think they're already 20 percent vaccinated, and the whole country should be vaccinated by June, July. So quite impressive in terms of execution. Britain's some of the countries we know. So in terms of vaccination, a third of the total population in UV, capital city is all of the vaccinated. After the first shot, By June everybody should be vaccinated. Great. We did have some questions come in via email ahead of the summit, so I'll move to those now. In regards to the key 2021 dates that you've talked about, do you expect to stick to those dates or do you foresee any delays?
32:24 At the moment, I think for 2021, what we've just forecasted, we're on track for. We have started leaching just a few days ago, just like we did last year. We started leaching at the end of March. For now, I think our production forecast remains the same. I think on top of any adjustments as we see that, I think on our next update, we can reiterate what our forecast is and if there are any delays or changes, we'll certainly update the market accordingly. For now, we've seen no change, but as you know, COVID is changing daily. Back Borders are still closed, lockdown still exists in both Angola and everywhere else. So, it's very tough to forecast in the Covid world. But As of now, our cap flow, our production forecast, our feasibility delivery, our expirations starting and construction and debt, I guess, packages and construction starting in the summer have not changed as of now. So those are our current forecasts and I think we're sticking with it.
33:36 So your team is working towards the Mongolian exchange listing. Is this meant to be a capital raise or a financing tactic? Not at all. As Bhakta mentioned, we're only issuing 1% of our shares. It's an immaterial raise. It's a requirement to raise capital part of it. So there's no dilution. It's not to raise money or dilute shareholders at these levels. We don't like raising money at these levels. We're shareholders. We own 20% plus of the company as management and board people. So we're heavily aligned with our shareholders. So we don't necessarily want to dilute by any means. But it's a way to obviously open up additional shares to that market and at that point allows connectivity to our market so now they can now purchase shares on market.
34:27 So it's not a capital raise, it's very minimal as Bhatia mentioned, 1% of our shares will issue, new shares will issue and it's just a way to obviously open up the market there where there is a lot of demand for locals to want to own businesses in their own backyard. Right now it's very tough for them to do so. I think we mentioned before it's also another way for our employees to actually see, you know, we have 200 plus employees probably today and they'll continue to grow as we go to create the expansion. They're owners of the company as well, through our R2 program, and They actually see the value of their own shares on the market. So that makes anything else, Vlada? Yeah, it's not about raising capital, it's more about engaging local people, local stakeholders.
35:17 We've been receiving a lot of requests asking us how they can buy shares, especially the smaller amounts. It's very difficult for Mongolian shareholders to invest in the smaller amounts, send them back, wire transfers to Canada, waiting for the next day, and so on. So we want to be able, our employees and other people involved in the project to be able to easily buy and sell shares in the Mongolian Stock Exchange. It's also a policy from the stock exchange and past days. They asked for the specialist mining companies to be able to be tradable in the gold stock exchange. And more from our side, we want to get more exposure in the world.
36:05 Great, we have another live question come in while we're answering some of these other questions from Dr. Per Michaelson. How's the Mongolian IPO progressing? Yeah, so we just submitted our prospectus to Mongolia Stock Exchange and now the financial regulatory commission is going to go through the documents and I think it's going to take about 1 month, right Jeremy? Yeah, that's right. Yeah, 30 days. So we should be, we should be listed in your in May. Yeah. Yeah. Wonderful. We do have an underwriter in place, so the author should be in front of me. Stepgold continues to seemingly be undervalued and research analysts and industry influencers have also highlighted that fact. Even though you've delivered on everything, what else do you think you need to do to get more investors to see your value proposition?
37:01 Well, we're doing things like this, obviously, regularly. We do institutional meetings through our bank coverage as well on an ongoing basis. A lot of it has to do with the education process, so you have the people not understanding Mongolia and the risks, or the perceived risks, and When they hear things about Rio Tinto and Oetogo, they think that that also has to do with us and it doesn't. So I think there's some of that element. And then, you know, I think in the last couple of years, while we're building a mine, there's an execution story. Can we build? Can we get a permit? Can we produce? And then people were focused on the short mine life of the heap leach without looking beyond that, which we've now shown with the resource update. So I think this resource update was a good checkbox to show the scale potential, show that we do have the ability to grow to a much larger production profile in mine in phase 2.
37:54 So I think now people will start paying more attention, they're looking at our cash balance and how that can grow on its own. So no need for equity will certainly help close that gap. Now it's more marketing, and I think the final piece when we got back from the feasibility study, we'll probably bring it home. At that point, it'll be kind of undeniable that we have a permanent expansion project that's already underway and now you have a BFS to back it up. I think that will be the final piece of the puzzle to kind of close the valuation gap. And hopefully there's some sizzle and expiration in between all that. We're certainly going to close the valuation gap. We can't control when and how it happens. All we can do is continue to market, update shareholders, get in front of new prospective investors and continue to deliver on what we've just said for this year.
38:46 Great. Harry Sanders also asks, How are you thinking about acquisitions or new tenements? Or are you happy with your current portfolio and focus? Certainly we have a pipeline of our own that allows us to grow without acquiring any other assets, which is a fantastic position to be in, given that we have production, we have expansion and we still have exploration on both properties to grow them significantly. So we don't need to buy anything to grow. Certainly we want to look at opportunities, as Spatha mentioned, we are looking at other opportunities in country and so we're looking at exploration, advanced exploration and potential development assets in country. And at the right price, right time, if it makes sense, we're certainly going to do so. Going back to what I mentioned before, we're not looking to dilute at these levels. If we have to use our currency for some of these transactions, we'd rather wait for that re-rating beforehand, but if there's an opportunity to use some of our cash, a small amount, to lock up assets, we'll certainly do so. We do have that advantage of execution. We're the only guys who have built a mine in the last couple of years. We are in production. We have a strong balance sheet. We have strong backers.
39:55 We have strong support in country and we have, I would say, a first mover type advantage given the country is still pretty closed until this vaccination is complete in the summer, maybe there's some less competition internationally. So we want to take advantage of that. So we're certainly aggressive in the background trying to lock up assets. I don't know if you have anything else to add, Bata? Yeah, I mean, we received quite a lot of proposals from the local Mongolian companies willing to cooperate, especially with the listed company, the public company. So we always go into, We always check and review all the projects, and we're focusing mostly on the dormant, where the ATO mine, and also in the Biohunger province where our Exploration UK project is located.
40:43 We're trying to mostly focus on where we are, looking at the neighbouring blocks and neighbouring licenses and so on. We are definitely going to, I mean, we're happy to expand. We're always looking for the new business. Great. I think this might be in that vein. Do you have any big plans for Silver given the recent trends? You seem to have indicated that recently. Yes. Well, obviously Silver has increased. We have over 20Moz of Silver in the measure indicated and Again, we think that will grow. Certainly Silver is becoming more material to our production and our cash flow as we grow. Jeremy mentioned we have 150,000oz production in Silver this year. We have an inventory that we're sitting on as well.
41:32 I don't know the exact amount of ounces that we're sitting on. Jeremy could confirm that. It's about 23,000oz. Okay. So we have certainly some more Silver inventory sitting in country today that we could monetize at the right time. But as you move to phase 2, you're going to see your recoveries go up. So certainly Silver production will grow and become more meaningful to us. As you know, Mung has a lot of silver as well Yeah, we are an old and silver producing Yeah, 20 20 million ounces at $25 is a material number so 500 million dollars, so, you know, that's you know, it's going to be a material number for our Phase 2 project for sure.
42:30 Thanks. You recently started trading on the OTCQX. Are you seeing any uptake with the US investors? How are you planning on attracting more US-based investors to the Step Gold story? Sure. Yes, I mean, we just started trading a few weeks ago, maybe not into the best market for Golds, but that's okay. We were trading probably 7-figures on the pig sheet, so we have seen some volume uptick from that. We did a virtual OTC event just last week and we had some one-on-one meetings from that and follow-on meetings as well. We're actually looking at growing our banking coverage through US channels as well.
43:16 As you may know, Stifel Nicholas in the US has a very big reach there. They have a retail arm and the Canadian bank side here that covers us now gets to distribute all mining research through that channel in the coming months. So that's certainly going to grow where you have circa 500 billion worth of assets, I believe, 500 billion or something like that in retail hands through their channels and we're still talking to other banks in the US who have retail arms as well that can help grow that. Any marketing we're doing is pushed out to the US as well. Okay, wonderful. Well, I think that's all the questions we have right now. So I'd like to thank everyone who submitted questions as well as Bata, Jeremy and Neil.
44:03 Great presentation guys. If you guys didn't get a chance to get your questions answered or if you think of 1 after the summit, we'll be sending out a short survey where you can leave your contact information and the Step Gold team will reach out to you directly. You can also find more information of course at stepgold.com. I'll hand it back to you guys for the final word on the summit. Great, thanks Cam and thank you everyone again for joining this update. Hopefully in a couple of months we can do another one and track our progress from where we are today to what we've achieved again. I think we have a great story to tell here. Last year was, I would say, a difficult year, but we would say successful for the team. And this year is going to be even bigger for us given that we have a stronger balance sheet Quite a lot of milestones and catalysts ahead of us and we appreciate everyone's support and please do reach out if you have any questions We're always available to speak to shareholders or prospective shareholders Yeah, Thank you very much for your support.
45:06 Thanks a lot. Thank you. Thank you. And with that, have a good day, everyone. Stay safe. Thank you.
