Hello everyone and welcome to our webcast. Today we will present our new long-term business targets and the updated strategy for the years 2025 to 2029. Our CEO, Kari Vyhtinen, will soon explain the strategy, detailing its components and describing how we plan to achieve our goals. My name is Anni Turpeinen. I'm the Chief Communications Officer here at Endomines. I will be hosting the questions and answers session right after Kari's presentation. Feel free to send your questions via chat during Kari's presentation, and we will go through them together afterwards. Please type your questions in English. Thank you already for joining us. Now let's get started, Kari. The stage is yours.
Thank you, Anni. Welcome everybody. Very happy to be here today. I will try to answer three questions today. Why this was done? Why was the strategy update done? What were the main reasons? What does it mean? What are the long-term targets? How do we get there? What actions are needed? How do we get to the targets that we have published? At the end, we will also discuss about financing. How do we finance the strategy journey during the years? If we start with a little bit of history, in 2022 we introduced a new strategy for Endomines and it had four main points. Pampalo was the center of production, very strong focus in exploration. USA, we concluded that we do not want to invest in the USA. We want to have a partner to help us in the local market.
ESG is really important and center for the business development and also our strategy. Since then we have achieved exceptional turnaround. We have managed to go forward in the strategic fronts and the revenue has increased by 113%. It comes from two main points that we have successfully increased production volumes each year. There is also the gold market, which is very strong and supports the revenue growth. In exploration, we have gone from less than 200,000 ounces gold resources in the Karelian Gold Line to almost 500,000 ounces in the Gold Line. Significant increase, 148%. If we continue with the resource upgrade, here you can clearly see that before we changed the strategy, the gold resource level was almost the same for some years. Since the startup, we have successfully increased the resource every year.
This means the amount of gold that we know exists in the Karelian Gold Line. Now we are entering a new phase and therefore it requires an update in the strategy. We are entering a phase where we have to prioritize permitting. We have to prioritize permitting and technical financial planning. How do we get these assets into production? Like we are now confident that there is gold in the Karelian Gold Line. There is more potential. We know how we will find and upgrade the gold resource in the future. How do we get it to production and what kind of production facilities will exist in the Karelian Gold Line on a long term? We also want to incorporate tungsten and molybdenum. Tungsten is a critical mineral. We will come back to that later. We want to incorporate that into our long-term plans.
The sustainability program. We have a very ambitious sustainability program and that is something that we want to ensure that program gets also implemented into the actions that we conclude. Really important to note is that we want to use, now we have a lot of information from 2022 to 2025. Like when we started, for example, the exploration in 2023, we were mainly using the old data from the Geological Survey of Finland or Outokumpu. Now we have a lot of Endomines data. We are very confident that this data will guide us through the next strategy period and we can deliver the results. The new strategy, we have five main points. It is updated, it is not completely new. It is an updated strategy. There are also same points existing as in the previous. Pampalo remains the center of our production.
We want to focus in Finland. We want to focus in the Karelian Gold Line. It's our key and greenstone belt with a lot of potential. That remains the same. Exploration, that's the tool that enables the long-term growth. Also, that point will remain the same. However, now we have a lot more clearer targets for what we want to do and how we are going to do it. Before, it was more generic. The next point is very interesting. We want to lift the critical minerals into the strategy. We see that this is very important for the company and during the next five years, the importance of the critical minerals will grow. We truly believe that we have just seen the start of this kind of geopolitical tension and countries trying to secure the minerals.
There is a lot of potential to develop the tungsten and molybdenum into products. The financial stability, that's very important also, that we want to separate us from many junior mining companies who are making many financial rounds per year, so that we have a more stable financial backing in the business. The sustainability, that we perform all the actions in a sustainable way, is very important. That's the only way we want to do things. We want to do things in an ethically correct way, and therefore we have published new targets. We start from the exploration. We want to define a gold resource of 1.5 million -2 million ounces by the end of 2030. A more long-term target gives us flexibility between the years, but a clear target that this is ambitious level, requires a lot of actions to get it done.
We are confident we can do it. The annual gold production level, raise it to 70,000-100,000 ounces around 2030. This is a target that we have had before, but just to highlight it, this is also our strategic target. The tungsten and molybdenum production that we started at the same time when the gold production level is increased to the higher level. The fossil-free gold production by 2035. One of our main targets from the sustainability program is lifted to the long-term strategic target. If you look at the sustainability program as a whole, this was approved by the board of directors in December last year. It has ambitious targets. The biggest focus, I would say, if we think about the environmental side, will be the water. Finnish people love lakes, love nature.
We want to ensure that the water is always clean. If there is something discharged from the mining area, then that does not pollute any rivers or lakes or other water reservoirs. The climate is very important, and we make the actions towards the fossil-free production. Biodiversity, there we have that we want to do the restoration of sites or areas that are not used ongoingly. When we go to the new place, then we restore the previous place and do not leave a big backlog for the future. It is all about the personnel in every company. Personnel make the success. We want to keep the people that work for us, that they are safe and they are also happy. They want to work for Endomines today and also for the long term. Community, we keep a lot of information sessions in the Karelian Gold Line.
We want to be a partner that openly shares the information, continuously has dialogue with the local people and local businesses. The governance ensures that the businesses have ethical practices. Most importantly, our people know what the practices are. If they are faced with difficult situations, they know how to act in those situations and that there is a certain way of working within the company. How are these ambitious targets achieved? We see that these two targets are very closely connected, that we have the gold resource and then the production. The current level is that we have approximately 500,000 ounces gold resource in the Karelian Gold Line. The production last year was 14,300 ounces of gold. The long-term target on the exploration is 1.5 million-2 million ounces by 2030.
Then 70,000-100,000 ounces of production around 2030. We increase the resources and that enables the growth in the production as we have more resources that we can utilize in production. It requires significant focus on exploration activities. The exploration is done in two main areas. We have the production in the Pampalo area. We have the Southern Gold Line and we have the Northern Gold Line. If we think about today's situation, we have the 500,000 ounces resource and a little bit over half is in the south. It is in the Southern Gold Line. That has increased by almost 400% during the last year. In 2022 there was only 70,000 ounces and now 270,000 ounces. Very significant increase. In the area there is also tungsten and molybdenum.
This is the area that we want to take to production in 2030. In the north, however, we have defined very interesting mineralization. However, there is no resource yet because the resource is what you need to do to classify that you have a resource is that you need to have a certain drill, like the spacing between the drilling that you do in the area. We have been looking at the wider space until now. We do not have the resource yet, but it is very simple to change it to resource by doing additional drilling within the same area. That is something that we will focus in 2025, 2026. How it is done, like we have now identified that for example in the Southern Gold Line we have drilled approximately 20,000, a little bit over 20,000 m The resource has increased by 200,000 ounces.
We are using the same guidance that when we drill 10,000 m, we believe that we will get approximately 100,000 ounces of gold resource. We also have to support this. We have these areas like the Northern Gold Line where there is yet to be defined a resource. However, we are very confident that we know where it is. A lot of the work has been done, but there is no resource. It just requires a little bit more drilling. If we think about last year, $500,000, now we see that in the next five years we need to drill approximately 120,000 m That means that the investment is approximately EUR 20 million-EUR 30 million within five years, so EUR 4 million-EUR 6 million per year. That will result in a much higher resource.
We estimate that that will be somewhere 1.5million-2 million ounces of gold in the Karelian Gold Line. At the same time, we are also doing drilling to define the tungsten and molybdenum resources. When we do the drilling to define the gold resource, we are also looking at the tungsten and molybdenum and making the resources that supports later to take also those metals into production. The larger resource enables us to increase the production volume to the higher level. Here, if we think about last year, approximately 14,300 ounces, we have excess capacity in Pampalo. We do not need to invest a lot in the production plant. We can increase the production volume steadily. We see that in 2029 it will be somewhere approximately 25,000 ounces. Could be a little bit more or a little bit less, but approximately 25,000.
Then when we take the Southern Gold Line into production, around 2030, that will take it to 70,000-100,000 ounces. If we think about the situation in 2029, 25,000, and then the situation in 2030, 70,000-100,000 ounces. The difference is approximately 60,000 ounces. We see that to make it happen, we should have 600,000 ounces clear resources in the Southern Gold Line, which means approximately 10 years production. We need to increase the resource in the Southern Gold Line to be able to increase the production level to this level that we want it to be in 2030. At the same time, we will then also take the tungsten and molybdenum into production. That is a big step for the company. After that, the goal is to look at the next areas.
Like this could be the Northern Gold Line, for example, the Kartitsa. We take that one into production two, three years later. The journey will not end in 70,000-100,000 ounces. Our longer term targets are much bigger. The Southern Gold Line development plan in a little bit more detail. Last year we did the nature surveys. We also started the environmental impact assessment program. That will be launched in around August. We continue to the report phase. We continue to the environmental permitting phase. We will also start next year to prepare the pre-feasibility study. The situation with Endomines is a little bit different than with many greenfield projects as we have production in Pampalo already today. We know exactly how much it costs. We know how much the mining costs in this area.
We know how much the processing costs. We are very confident with the results that we have today that at the end this will be also financially feasible to take into production. From the environmental permit side, we are estimating that we would get the permit in 2028. We continue with the financing negotiations, have an investment decision, and proceed to building and then commissioning and lifting the production level to the new level. The next step after 2030 and also the activities that we are doing this year and future years is the Northern Gold Line. There is a very potential deposit called Kartitsa that we defined last year. This year we want to investigate it more so that we can define a gold resource late this year, early next year. It seems to be very potential.
Like there is a wide continuous high-grade gold mineralization, which is not common anywhere in the world. The Northern Gold Line development plan, it will focus a lot in exploration and then planning during the years. Next year, the plan is to start nature surveys in the area and then start the permitting activities a little bit later. We will see and define next year, year after, that what is the actual realistic schedule to take it to production. First we need to just do the exploration activities and really define the resource and then grow the resource. After that we will start the activities towards production. Critical minerals. This is a very interesting subject. If we think about tungsten, it's one of the 14 critical minerals defined by the European Union. It's used in the defense industry.
It's used in applications where you need extreme hardness. It is very much controlled. The supply chain is very much controlled by China. Approximately 80% of the world's tungsten comes from China, or is controlled by China. The other suppliers are Russia, Canada, Bolivia, Vietnam, Portugal, and Congo. It really is a mineral that is desperately needed in many applications and very much controlled by China. If you have been following the news, when Trump published the first trade tariffs, China replied that they will not deliver tungsten anymore. Tungsten was used as a weapon in the trade war. This is clearly seen, that this kind of activities are more and more increasing in the world. Tungsten and molybdenum are found in the Southern Gold Line, in the area that we are currently permitting.
We estimate that if we think about the current supply, global supply, then approximately 0.5-2.5% of the global supply could come from the Karelian Gold Line. Of course, we need to define the resource, need to do more drilling. There is a lot of potential in the area. The base of till samples, like in the exploration, it starts with this base of till samples. After that you do drilling. The base of till indicates where the gold is. You do the drilling to define the resource. In this slide on the left side, you can see like all these blue colors near Kuittila, they are actually base of till samples with tungsten in the area. The base of till samples indicate that there is a significant amount of tungsten near the gold resource.
We have not investigated that area yet. That is something that when we do the drilling to increase the gold resource, we will at the same time perform activities to define the tungsten and molybdenum resource. They are very much linked together. In the area where there is tungsten, there is also very often molybdenum. In that sense, it makes the investigations easier. We are also assessing the opportunities to get critical mineral producer status. That is something that is currently not clear when the next applications can be launched. We cannot give the exact date. Next time there is a window that you can actually apply for the status, we will do it. Most likely it will be within 2025.
This year, very much production planning and permitting to get those also part of the overall expansion that we will do by 2030. The financial stability. Like mentioned already in the beginning, we want to separate us from junior mining companies that make several financing rounds each year. Have the stability to make more long-term planning and to have the flexibility to perform actions and scale up actions if needed, look at the opportunities that exist in the marketplace. We now are very happy that this year we got the financing arrangement done. That includes up to EUR 8 million of loan. There is no commitment to withdraw all the loans. It is flexible, but it gives us the flexibility. We also agreed to have an account limit of EUR 3 million from OP.
There is a bank guarantee and financing limits with total up to EUR 1 million. It was altogether a EUR 12 million financing package. I am very happy about it and very happy that it is a flexible package. We can use it when we need it. We do not have to use it so that we can also save on interest cost and so on if we want to. The plan is to use these funds on exploration activities, use them for permitting activities and process and technical planning. Also, to have the stability. I cannot emphasize it enough that we have the stability that we have financing secured for a longer time period and do not have to think about it all the time. Part of the financing, of course, is the operational cash flow.
To conclude the presentation, just to show the gold price development. The gold price development has been very favorable. We are currently above $3,200 per ounce of gold. The reasons for that, they are the global geopolitical uncertainty and uncertainty, especially in the U.S.A., what will happen with the Trump administration. There was the trade tariffs. Now it seems that they are a little bit lower than was feared maybe a few weeks ago. Who knows about the future? Also, what is the next item that will come to the surface in the coming months? There are also countries that would like to be less dependent on the US dollar. Gold might have their very important role, how that will be introduced.
If you look at the history, if you look at 25 years history, when there has been interest rate cuts by the Fed, the gold price has increased. Now those interest rate cuts have been delayed if you look at the last six months. When those are commencing again, the forecast is that will affect the gold price positively. The gold price exceeded $3,000 in March this year. That was the first time ever. Since then we have increased approximately 6%-7% to the $3,200 level. The outlook is very strong. Of course, we want our operations to be profitable. This cash flow from the operations will fund part of the strategy implementation.
We have the financing package, which also gives us the flexibility and the possibility to scale up activities if we so want to. Thank you very much. Now we have the questions and answers session.
Yes, yes, it is time to move on to the questions and answers session. We have had plenty of questions here. Thank you, every one of them. We have plenty of time as well. Let's start. The first question is related to the exploration and the huge target that we have there. The exploration target is quite massive. Is it really possible to define 1.5 million-2 million ounces of gold resources on the Karelian Gold Line by the end of 2030?
Yeah, that is a good question. I think absolutely it is.
If I think about the situation in the beginning of 2023, when we started the exploration activities and we used as a base for the planning, we used a lot of the historical Geological Survey of Finland and Outokumpu data that was quite old. From the data, we defined that here is the potential. We started to do the activities. During the last few years, now we have a lot of own data. We have more, also the team is a lot stronger. We have hired more people. We have done modeling of the geology in the area. We are very confident that we know several places where there is very high potential of increasing the gold resource. We can target those areas with our activities and increase the resource. We are in a much better position now.
We have also published that we have this Northern Gold Line, Kartitsa. It is something that is yet to be a resource, but we are confident it will be in the next 12 months. Ukkolanvaara, we published a lot of potential. We still do not have even the results, but there could be a lot of potential there. We definitely believe that this can be done. We can scale up the activities if we see that we need to do even more than 120,000 m of drilling, we can scale it up.
How do you see production developing between 2025 to 2029? When will the 25,000 ounces production rate be reached?
We have not given an official time, but we are increasing the production levels. We have had the target to increase the levels each year.
Like this year, we had a very good start, over 19% increase from previous year during Q1. We were very happy about it. Our guidance this year is that we increase it between 12%-54%. The communication is that we are estimating that this year it will increase a lot. After that, the goal is to increase it each year in steps towards 2025 when it will be there. Do not know yet, but we will see in the coming years.
Could you elaborate the role of Pampalo, Southern Gold Line, Northern Gold Line in the current strategy period?
Yes, Pampalo is the center for production. We have the underground mine, we have an open pit mine, and then there is the Hosko mine a little bit north. Everything is processed at Pampalo.
The Southern Gold Line is the tool to lift the production levels to 70,000 ounces-100,000 ounces. There we have different options that we increase the size of the plant in Pampalo and deliver the material from the Southern Gold Line or build a new plant in the Southern Gold Line. We are evaluating this year and next year. We make a decision which is the option that we want to pursue. The Northern Gold Line is, it just looks so potential. Like, we, of course, we could focus just in the south and get the resources higher and focus on upgrading the production level. However, the results we got last year, they are so promising that we really want to see what's there. It is a different kind of geology.
It goes a little bit technical, but in the south there are a lot of these small veins and requires a lot of drilling to define where they all are. In the north, it seems to be sort of wide continuous gold mineralization. It is a lot easier to predict, to follow it and predict where it goes. That could be a lot faster way to increase the gold resource because then you can sort of plan that it seems to go there, let's drill there. Like in the south, you just have to drill everywhere and then the gold is there. It is more complicated, let's say.
Which is more likely, processing facility in the Southern Gold Line or expansion in Pampalo?
Yes, I have always said that personally I think often, like if I look at the history where I have been, often the result is that the existing plant gets upgraded just because there is the infrastructure and so on. Here I'm not sure actually. They both look potential options. There is the distance between, is it 20 km or so? You do not have to transport the materials. Here the situation is that it is so much bigger. The expansion is so much bigger than the existing. It could be actually feasible to just make a new production plant and have two. That is yet to be defined. I think currently it is 50-50 which we will choose.
What is the tolerance regarding the around 2030 production target?
We wanted to leave to say that it is around 2030.
We see that if you think about just the time schedule, the biggest item there is the permitting and how quickly the permitting goes. Like we have permitted four mines in the Karelian Gold Line. We know how it goes. However, there are, of course, items which could change a little bit. Therefore, we have put this around 2030. We believe that it is very close to the actual time. There are items that could move like one year there. There is also the critical mineral status that if we get it, will it enable us to make things even faster? That is also yet to be seen.
Regarding the exploration targets, why the gold resource range is so wide?
I have not thought about that before, but I think we just believe that it will be there during that time. It is a good range. I think when we had the previous target of one million ounces, it has become quite evident that target is too small. We are now at the 500,000 ounces level. We have the past experience that seems to indicate that when you drill 10,000, you get 100,000 ounces. We drill approximately 20,000-30,000 per year. The end result, according to our estimations, will be somewhere 1.5 million-2 million. We just chose the range because we think that it will be there.
When do you think you can publish pre-feasibility study regarding Southern Gold Line?
Twenty twenty-seven, during H1 2027. That is our schedule.
Like we are doing a lot of the calculations. We have, of course, we have internal calculations and we are doing the studies. Just to get the process design done, it will take time. Twenty twenty-seven is the time.
We have questions about U.S. assets. Why there is no mention about U.S. assets in the new strategy or long-term targets?
They are not a strategic focus area for us anymore. Of course, we are doing now currently activities to get a solution for the U.S.A. It has been an item that we are disappointed that we have not been able to get it done until now. The work still continues. We are also confident that we find a solution during the strategy period and hopefully as soon as possible. It is not a strategic focus area at the moment.
Like after we have the solution and we know what's the future in the U.S.A., of course we can highlight it if we want to. Currently there is just so much potential in the Karelian Gold Line. We just don't want to look the other way. It just looks very promising. We are confident we can achieve great things in the area.
We have also a question about Friday Mine. Why don't we open the Friday Mine even though there are a lot of resources there?
Yeah, it has been tempting to think about it, that you can increase the production. It's just due to the focus. We want to focus in the Karelian Gold Line. If we think about investing that, do we spend EUR 5 million in Karelian Gold Line or do we spend EUR 5 million in Idaho?
We have chosen that we only spend the money in Finland. At the current gold price, of course, it's tempting to increase the volumes. We are a fairly small company. We just want to have all our people to have a 100% focus in Karelian Gold Line and our golden journey.
We have questions about critical minerals. What are the benefits for Endomines to become a producer of critical minerals? Wouldn't it be better to focus only on gold?
There are many benefits how we see it. Like there is the critical mineral status. I think it could lift the importance of the Karelian Gold Line to a new level because there is also this kind of really shortage of tungsten in the world and especially in Europe. It could also open opportunities.
Like there are many cases in the mining world that when there is this kind of side product, you have a partnership agreement with an industrial partner. What they offer is financing and might build the factory, for example, give some other financing so that this can be produced. They take the offtake at a little bit lower price. It is a tool that we can also increase financing opportunities within the company. That is clearly one. There is also a financial side that we believe it can be a business to have tungsten and molybdenum as a product. That is something that we are very confident on gold. With tungsten and molybdenum, we still need some more calculations. It is changing very fast. It is also like the price of those products is changing because of this shortage of supply.
We want to do it that there is also business sense. Like we believe there is. That comes mainly from the fact that within Southern Gold Line, the gold is in one area, but then the tungsten and molybdenum is usually on the side. We would need to mine the material anyway because it is just next to the gold. It would be this kind of side rock that is not used anywhere. We would have to use a lot of the expenditure anyway to get the gold out. This gives us the opportunity to mine it in an efficient way and hopefully also produce it to the final product in an efficient way and get a good payment.
Let's continue with this topic.
Do you think that the tungsten opportunity in Southern Gold Line is meaningful enough to achieve the critical project status?
That's interesting because currently the European Union is changing the criteria and we don't know exactly what the criteria will be. We would like to emphasize that whatever the end result will be, that will we get the status or not, we will go ahead. That's the current view because our planning has already started in 2024. We are in the middle of the permitting. We want to go ahead with these plans. If it shows that it's feasible, then we want to go ahead even if we don't get the status. The status would have benefits and like lift the whole importance of the Karelian Gold Line.
But it doesn't affect our decision process, I would say, that we will evaluate it based on the financial feasibility and also if there are any other opportunities within the industry that we have, for example, industrial partner financing, some other benefits. Those are the main factors. Difficult to evaluate if we get it or not. We will apply and then we see if we get it. What about permitting? Will the recovery of tungsten and molybdenum complicate permitting and technical planning for the Southern Gold Line mine and processing facility? It complicates the technical planning and the process design for sure. However, permitting, it improves the permitting process for sure. That's something that, like, when we have discussed with the authorities, for example, they see it very important that this kind of production would be in Finland.
We see that it eases the permitting side, makes the process faster. Of course, there are the same criteria and the same actions need to be taken, but it could fasten the process. Otherwise, yes, it complicates the production planning.
Let's continue with the timeline. Is the timeline realistic for Southern Gold Line even without the possible critical project status that would fast track the permitting process? Yes, we see it and it is realistic. Like we started the permitting in January last year. We have done zoning for now almost one and a half years. Also, the environmental impact assessment program is almost completed. We have also completed the nature surveys. We have started and now it goes more into technical planning.
Because in the program phase, you still have options that, like for example, the production is 100% in Pampalo or there is the Southern Gold Line. The next phase is there is only one road that we need to choose. We are well on track and we have a very good team doing the work. I'm confident that we can achieve in the timeline presented. I think the following question would be the last one and it's about dividends.
When is the company mature enough to pay dividends? Last fall, you mentioned that a production of 25,000-30,000 ounces would be such a stage. At that time, the price of gold per ounce was $2,400. Now it's $3,200.
That's a good question and that's something that we have to evaluate every year.
Currently, just the focus is to ensure that all the activities we have to make the company bigger and in a sustainable way, that they go ahead according to our timeline. Each year we have to evaluate that when is the time that we pay dividends. Do not know yet. Have to review it annually.
Thank you. I think that concludes our questions and answers session. Thanks for the excellent questions.