All right, good morning everyone, and welcome to Amaroq Minerals Q3 2024 results presentation. On this call with me today, you've got Eldur Ólafsson, Amaroq CEO, and Ellert Arnarson, CFO. The presenters will walk through the presentation, and then after the call, we're happy to address any questions you might have. You should be able to submit written questions using the Q&A panel, and you should be able to submit these at any time during the call, so I hope that answers any questions, and I will hand over to Eldur Ólafsson to open the call.
Thank you, Alette. Good morning everybody. It's a pleasure to be with you all here. I will be walking through the, this relatively short presentation together with Ellert Arnarson, our CFO, today. And I will kind of give you a little bit of background, but then we'll go into the actual quarter and, and, and give some feedback also what, what, what is happening, going, going forward with the company. So I'll start here. Actually, on this first picture, what you can see here is our new processing plant that has been built, and enclosed, and it's effectively ready. So I will just go on through here. Right, just, as I started here, so we have now followed our strategy for the past few years with these four sectors, which is development, mining, exploration, logistics, servicing, and, and energy. We've now built our first mine.
98.9% of focus has been to build the Nalunaq mine. The processing plant, phase I, is ready. It's been tested. The mining has been ongoing since May, and we've been stockpiling ore, and we've been ramping up, developing the mining, which we'll go through a little bit later in the presentation. The focus here with this asset is to not only mine and ramp up production, but also grow the resources within Nalunaq. For the past two years, we've been drilling on the surface, and now we're also drilling underground, which opens up a whole new possibility for the company where we can be drilling all year round and expanding the resources and then start building up what we call reserve. This is, you know, a very exciting moment for the company, where we're getting into the stage where we always wanted to be.
The focus is then to produce gold, generate cash flow, grow the resources, and then we focus on exploration. And we have twofold exploration. In the exploration, we are obviously trying to find world-class deposit, scalable potential deposit that has an impact on demand supply in the world. That's, that's the purpose. And we have twofold. On the one hand, we have the gold, which we own 100%, and they are assets that can be more near-term production assets. And I want to highlight especially Nalunaq that we drilled this year, but also Vagar and other satellite deposits around Nalunaq. Now that we've built the plant, we then have the opportunity while we are exploring and developing the next few assets to actually start using that plant and the potential scalability of the plant because we can scale that up to process more ore and build up more resources.
That has a huge impact for the growth of the company and cash flow generation, immediate cash flow generation and growth of the company. We have the strategic minerals where we drilled three different sites this year. We are effectively carried there, with our great friends and partner, ACAM LP. We're in a partnership or joint venture with them. They put in, in 2022, CAD 30 million, and we're in our second year of program there, looking for copper, nickel, predominantly. Logistics and servicing. We are in Greenland. We have to take care of all of our logistics and servicing because this industry doesn't exist in Greenland. This has meant that we had to acquire servicing assets, such as drill rigs, mining equipment, all of these different things, and manage it, maintain it directly ourselves.
The reason why we have to acquire it is that other service providers, when they come to Greenland, they try to amortize their equipment sometimes over one year or even less, whereas we can do that over a much longer period, and therefore we can lower our cost, which we are doing both in development, mining, and exploration. What we are effectively doing is that we're moving all of these assets that we had to buy to lower our cost into a separate vehicle where we actually start leasing this asset into these two companies. Why are we doing that? There has been a huge demand and a lot of discussion with other operators in Greenland where they ask, you know, can we also borrow your equipment? Can you also provide something for us?
And that's something we see as an opportunity we can do and to actually lower cost for everybody. Last but not least, and we'll go through it in a minute, is energy. We also have to build our own power plant. We have a power plant for approximately 3.5 MW in Nalunaq to date. We also have to run our equipment, and we measure all of our power, and more importantly, we measure all of the diesel we're using. In the valley of Nalunaq, you have a small river, a very simple small-scale hydro, which we have already advanced on with a project that we will have a feasibility study on that in Q1, next quarter.
The main purpose there is that by generating about up to a megawatt of electricity from hydro mainly, we can save CAD 2 million annually in cost by not purchasing that diesel that is then provided. You can see with this strategy what we have done maybe for the first time is that we quantified all of these different aspects. If we are not owning our own equipment, we need to bring them in. It's very high cost for us, and therefore we rather buy it ourselves, amortize it over a longer period of time, and we rent it directly to us rather than having it rented from someone else who takes too much of a charge. Renewable energy, we're trying to find ways to make the profit of Nalunaq higher by reducing the diesel amount that we have to purchase every year.
This all centers on the whole overall strategy for the company. This all happens because we've unlocked and built the first project. Okay. A background of Greenland, and I think this is important because in different markets, it's important to understand what Greenland is. Greenland is part of the Nordics, not only geologically. You can see Greenland here on the picture, Norway, Sweden, and Finland. It follows the same geological features where Greenland has the biggest growth potential. There is growth potential also with new technology and new ways to apply exploration in places, obviously, especially in the north of Norway, Sweden, and Finland. The legislation is similar. Most of these legislations in these countries are either built on Danish legislation or similar legislation. We're working within the same legislative framework. The legislation in Greenland is very clear.
It's based on how you operate, how you develop your project through various different environmental impact assessments, social impact assessments, Impact Benefit Agreements, how you get the license, how you operate. This is all then verified by various markets around the world who are now investors in Greenland. That can be the Australian market, the New York Stock Exchange, London Stock Exchange, and Toronto Stock Exchange. So make no mistakes, this is one of, if not the best, jurisdictions to operate within, and that has been verified by all of these different markets and the legislation that the Nordic works in. And you can see that the interests by the U.S., obviously with the new president and the previous, well, the Biden administration in Greenland, as well as the European Union, and of course, most importantly, Denmark is supplying a lot of investment and support to Greenland.
To put this into perspective, Greenland has now; they're now building three airports at the same time in the country. Me, myself, I'm from Iceland, and I don't think we have built an airport for, well, a size of place, ever since probably 50, 60 years ago. It gives you an idea of airports, large hydropower opportunities. The infrastructure and scale in Greenland is coming to a par with the Nordic region. Exploration spend is going up more and more year-over-year, so it's gone up 350% since we start. Yes, this is just starting, in terms of a country. However, I would say we are the first metal mine. There is another mine called Lundin, which is a North Atlantic, which we call an industrial miner.
So these two mines, but in Finland and Sweden combined, they only have five operating gold mines. So, the scale here is also quite dramatic, and it's interesting that how the Nordics have this kind of a potential to grow very rapidly. Last but not least, I would say that in Greenland, where you have different to other jurisdictions, is that this exposure of the resources. So we can see the bedrock, we can see what we are drilling into, and that makes the time and the risk of developing this asset more favorable than many other locations. Make no mistakes, it's not easy to build a mine. It's very challenging. There's a lot of different risks, et cetera, et cetera. We had to experience that, and we've learned that.
And therefore, as I would tell you as well, there are only a handful. I would argue there's well, we are the only Arctic mine that is built in the Nordics, and I think Europe. There is, I think, one other in Canada being built, but there are very few companies building mines currently today. So that is also an IP. I would also argue that our exploration team has now done five different sites in gold and copper, nickel during this season and the previous season, and we are one, if not the most active and strongest exploration team in Europe to date, which is very exciting for us when we're going into the next chapter of the company. So back to what we achieved in this quarter.
We continue to progress Nalunaq mine into development, meaning we, we've been mining and the process plant construction is effectively ready to start receiving ore. The first gold production is imminent. As you saw this morning, if you have managed to look into your inbox or had time in your morning, we signed an off-take agreement with Auramet and Metalor. They will buy all of the gold at market from Amaroq, and then the gold bars that we sell, we will effectively sell a bar out of the plant, and then these bars will be refined in Switzerland.
So this agreement is a good testament to our team, Ellert and his finance team, and the side team of understanding how we actually, which I won't go in detail due to security matters, but we will effectively have a very smooth transition from delivering the gold, and then sell it once it has gone through the from site all the way to Switzerland. The company also has a stronger balance sheet. We converted our current loan. Convertible loan notes were converted this quarter. We have completed all of our exploration season. To put this into perspective, when we start our exploration season, we do this usually around mid-June, and we then are working as long as up to maybe mid-October.
So the whole focus of the team is to drill, drill, drill, finish the program, get everything on time, on budget. And as a testament to the team, they did this ahead of schedule. We did more drilling than we anticipated on a lower budget. We are still, our cost in Greenland are still higher than in Canada and Norway, but they are coming rapidly down. And then we see that with more ownership of what we do, because time is money in Greenland, the lower the cost is. And our aim is in the next few years is to get to the same cost center as we would have in, Nordics or, and or in, Arctic Canada. The site QP, QP is a Qualified Person. He visited the site. He needs to basically, it is an individual who will then do a Measured Resource estimate.
So currently our Measured Resource estimate is 320,000 ounces at 28 grams per tonne. This individual was on site. He's done the work, being on site, checked all of the procedures of how we do our work. And then he has been modeling the resource. And then once the results will come in from our drilling, both on surface and underground, as well as the results from last year, we will then be ready to update our Measured Resource estimate in Q1 next year. That means how much larger, hopefully, is the resource from where it is today at the time when we will update, which has a direct impact on the NPV of the company. I'm gonna move over to Ellert now, if you can kindly walk us through these slides.
Yep. Thank you. Good morning, everyone.
So the main change to note in our balance sheet and cash flow this quarter is, due to continued ramp up and progress in construction of the process plant, as can be seen both on the balance sheet and cash flow side, with capital assets increasing by roughly CAD 32 million. Also worth mentioning is that we increased our environmental escrow account in July by an additional CAD 1 million, bringing that total up to CAD 6.9 million. So if you just go to the next one, thank you. On the liquidity side, cash balance is at CAD 26 million at the end of the quarter. In the quarter, we drew on our construction loan facilities for an amount of CAD 25 million to finalize phase I of the process plant construction.
Aside from that, we have an undrawn cost overrun facility of CAD 13 million, and the overrun facility nets out against trade payables for short-term liquidity of roughly CAD 26 million at the end of the quarter. Due to continuing exploration activities and associated costs in our Gardaq JV partnership, where we have a 51% stake, our position there decreases by CAD 4.8 million, and against that, our receivable balance towards Gardaq increased, and just as a reminder, this receivable balance represents allocated overhead and general administration costs to manage the exploration work programs and the day-to-day activities of the joint venture, and this balance will in the end be converted to shares in Gardaq, and the Gardaq cash balance at the end of the quarter was CAD 8 million for continued exploration activities in that JV.
All right. Thank you, Ellert.
It's an interesting point that Ellert mentioned there, and I think we should also. It has been the focus of the company to become and develop a good operatorship within Greenland and elsewhere. That means to have the knowledge of building a mine exploration program, so on. And the belief of the company was that when you do that, then both capital and/or project will come our way. And with Gardaq, it's a good testament of that. What Ellert was explaining there, about CAD 3 million every year, we get in-kind for managing an exploration program every year. And we see this not only for Gardaq, but other opportunities, as well as other projects in Greenland. This is something that we can continue using as a strategy to increase value for our shareholders. I'm gonna start on the gold portfolio.
I wanna remind you all of the gold assets we own, we own 100%. To set the scene, here's the Nalunaq mine. I will make this very quick, but Narsarsuaq is the airport we fly into. There is another airport being built in Qaqortoq, which is the largest town in South Greenland. It's a 3,400-person town. Then Nanortalik is a town that is about 1,100 people who live there, only half an hour away from the mine. In total, there's about 6,000-7,000 people who live in this area here in South Greenland. This again is, there's a huge infrastructure project obviously going on. This has a 5G signal. There's a cable that comes into Qaqortoq from Iceland, actually, internet cable.
There is hydropower that was built by another Icelandic company called Ístak that connects these two towns here. Overall, it's a good operating jurisdiction. I also wanna remind you that all of the meat product that we purchase in for our mine, we actually purchase from the farmers of South Greenland. Many of these farmers, to the Icelanders on the call, were most of the time trained in Iceland. So, a lot of people here in South Greenland actually speaks Icelandic, which we are very pleased, it's very pleasing for us. Coming back to the project, the Nalunaq mine is here. The most advanced exploration asset is Nanoq. I'll go through that. We drilled that asset this year. Then, Vagar and Eagle's Nest, we sampled those assets. We had drilled Vagar before.
In terms of development scenario, Nanoq is soon to be producing, and the resource development. Nanoq would effectively be the next one subject to results. Then Vagar and Eagle's Nest is something where we found gold on surface, but we are still developing the geological model for these. I often mention this to everybody. Geological model in oil and gas, geothermal energy, minerals, it's a key thing to understand that. Then physically you can build up resources and develop your deposits. This is the mine site. Few pictures here. We've actually added another wing here. So these, if you look at the camp, these are the new facilities. These are the older facilities that then will be slowly and gradually removed.
Then we will build the recreational facilities here next summer, and effectively, build up a longer-term hotel, as we call it here on site. The mine, as you can see here, is in full operation. We've built up the harbor, built up a smaller harbor here. All of this is operational. This is our explosives facilities. We keep explosives there for a minimum of quarter each time. We might actually expand that. This is the plant. This is actually this plant is fully enclosed. This part here is the phase II area of the plant, which where you see my mouse. This, all of the civils, all of the work that has to come in here has come. The steel for this part is coming in before end of November. We'll erect that.
Most of the, well, all of the phase piping electric, is effectively done for phase I and the generators and so on, and so that is all in order. When we have a lab also on site, the lab turnaround is supposed to be within 48 hours from the time we actually mine and then bring to site. So all of this is in good order and we are operating that from a day-to-day basis. Currently we have about 170 people, 107 people on site. There are more of a contractor now towards the end of the project. This means electrical contractor, piping and various different things. This will then reduce to about 90 people on site in January. We will still be finalizing some of the phase II project.
Overall we will have in the operation there between 75-85 people once this is in full operation. 43% of the personnel currently are Greenlandic, but that ratio will go up once we are in more of a steady state focus. We are investing a lot in various different initiatives in Greenland, such as we would do here in Iceland. That could be music or that could be handball teams, that could be various different initiatives, Siu-Tsiu, which is in young generation. The key focus here for us is, of course, to do good and work with the community there.
But more importantly, you can also look at it in the way that the more of the community that participate in our mine, the less will be our cost in the long term, because it costs us a fair bit of money to move a person in and out, like we are doing with the Canadians and/or the Europeans who are coming on site working for us, but it has an economical benefit also to participate in those kind of investments. Lost time incidents to five. These are mainly we are starting to get a little bit of icing, so there are some slippery zones. These are all very, very minor, but we track all of those different health and safety metrics, so you will see that on every single quarter, and the total work hours is about 130,000. Permitting is effectively ready.
We are waiting for Impact Benefit Agreement, which we are planning to have signed and delivered before end of the year. Most of the work and initiatives in the Impact Benefit Agreement we've actually been working on for the past two years. So that is in good order. Contract and then procurement finished, engineering finished, construction for the phase I effectively finished. Mining, kind of note there. We started mining in May. We did a kind of a trial mining process with our Thyssen Schachtbau contractor up until July. We wanted the mining to be quicker and a ramp up more. So we started as early as in July to then bring on our own technical mining team and our own personnel. So from end of August, we have now 15 of our own personnel mining together with Thyssen Schachtbau.
This has resulted in that the development rate doubled during September and October. We still want that mining development rate to go even further up. So we are also adding in more equipment. And the company is preparing itself also to take over the mining in full once the Thyssen Schachtbau agreement has finished, to kind of operate the mine on an ongoing basis. So that is happening ongoing. And then the team will then make sure that the cost is lower than efficiency is more, using then Thyssen Schachtbau and these kind of a contract mining for other development within Nanoq mine and/or with other assets that we have in our portfolio. So we try to build it up in that kind of a setup.
As for a dashboard for you to look at our operation, we're effectively ramping up production this quarter until end of next quarter from 130 tonnes per day all the way to 300 tonnes per day. So this is the tonnes that go through the plant. Recovery of the gold is the next point that I want to focus on. So we are estimating in the beginning when you start running your plant, you kind of you wanna get all of the screws and bolts to operate. So we started relatively low, but the phase I design should give you about 70% recovery from shaking the gold out. And then we ramp that up to 90%. So 94%, sorry, of the gold should be retrieved from each tonne, by the end of next year. So this is the kind of a ramp up period.
Our grade, we are estimating within that is 12-16 grams per tonne. The reason for this gap in between is that we are allowing ourselves to be very careful how we distribute the grades from the current resource grade, which is 28 grams per tonne, which is obviously much, much higher. That's the average resource grade due to the fact that we are kind of working our way to minimize what we call dilution. It's actually how we do the mining underground. So taking as much of only the white quartz range rather than any of the black rock. So this is something that we allow ourselves to be quite careful how we automate it. In any case, this grade is obviously fantastic and one of the highest kind of a grade you can run.
We operate that on that basis. So we kind of are focusing on a linear production grade update. And then we are working off our all-in cost of between CAD 5-6 million annually, sorry, monthly, which basically splits into mining, corporate processing, site interact, and so on. These are the things that we will be tracking and following. As for the resources, we sit at 320. We have an exploration target at 2 million. We then have, if you remember, found another vein called 75 Vein, which we are also mining. We think the potential size of that vein could be as large as this Main Vein, which you are seeing here. So we are waiting for our resource estimation to get all of the results we got this year.
But the idea here is just so you don't see as much of this ounces here, or sorry, this ounces here go into the resource statement. That's our target. And then therefore, when we are drilling, we're not only adding resources for the sake of it, we're also adding value. And then we start building up reserves, which is the kind of a, you know, effectively your one or two year ahead of you how you mine the resources. So this is all in good order. I will now kind of a all of the sustaining capex, we're looking to be 5%-10%. So this basically is ongoing current resources, resource drilling, and we will be able to do that underground all year round from now on. This is what we drilled this year. So this is our current resources.
This surrounds the current mine. We've been drilling last year above the line here. This year we drilled above the line and we sampled the outcrop. This is more than one kilometer, but this is the 2 million, the light yellow. This is the 320. So we're going higher up in the deposit and effectively adding, if we are successful, our resources, but we feel very comfortable about our geological model and how we follow the vein. Nanoq is a asset that we drilled this year to give you a little bit of a background. Nanoq was a deposit. If you think of a deposit, our deposit, both in Nanoq and in Nanoq, we have a white portion, so completely white vein, and there are black rocks on the one hand and black rocks on the other.
The gold mainly sits within these white porcelain. Nanoq in 1997 was discovered by a helicopter flying over it and a company called Goldcorp, which is a world known company, owned the license there. There was only 300 meters of an outcrop that they could see because the glacier was so close and covering this vein. Due to various different reasons back in 2000 when gold price fell and so on, Goldcorp basically relinquished its license, and the kind of the legislation at that time was different than it is today. We picked this license up in the midst of a low gold price and have been doing work on Nanoq for the past three to four years.
The work we have been doing is that we now, because the glacier history, we have a one kilometer on a flat surface, a vein coming to surface. So we know it's there and it's dipping. So it goes vertical into the ground. The highest grade samples we have already confirmed are 175 grams per tonne over a vein that is ranging from one to two meters in thickness. So this is, you know, very high grade, very similar to Nanoq. And when we did our geophysical survey, that is to see into the ground, we can see how the vein is dipping into the ground. Nanoq is a short distance from Nalunaq. So you, it's basically sits at the, at the fjord, so next to the fjord.
So you can effectively drill and then when you start mining this, you have the potential to do a bulk sample or move material from Nanoq subject to the fact that it has the grade profile that we think on site and move it to the Nalunaq gold mine. In the Nalunaq processing plant, it's right now it is designed 300 tonne per day, but it has the potential to increase that throughput. We've already designed it and everything is ready to 450 tonne, you know, for about $2 million. You only have to add a small mill and some flotation cells. And this we did with the view that we can see these resources are on surface and how we could potentially grow the resources through that. At Nanoq, we drilled this year two holes at that and we are waiting for results.
We're waiting to see the core, soon enough. And we're very excited to see because if at that this continues and it is high grade mineralized, we will be wanting to fast track this development to, actually complement Nanoq as soon as possible because this can add value quite significantly for us. But result, it's a result spending. We will look at the market on that once those results are in-house. In strategic minerals, we have defined three geological focus targets for us. We have basically built a full copper belt and understanding of what this copper belt consists of. And all these are gonna be technical explanation, but I'll try to make it simple. The copper belt that we have starts here in Josva and ends here in Johan Dahl Land. It's a porphyry copper belt.
Porphyry is what you find in the Andes in South America and so on. So you need a certain element of geology to have a porphyry. The reason why this was not looked at before in Greenland is that the age of this rock is older than in the Andes. This is Archean. But what we have already confirmed is the following. Josva is the skarn. We had drilled Target West last year and we found a porphyry. And then on surface in Johan Dahl Land and Target North, we have seen epithermal. This is what you need in a big copper porphyry system. To test this, we sampled Johan Dahl Land this year. We drilled Target North into an epithermal. We drilled obviously Target West last year and found copper and molybdenum. And we drilled Josva copper this year.
All of these results are presented to the market and are quite exciting for us to show. In the more epithermal part, you have the potential to have copper-gold, whereas in the kind of a more porphyry and skarn part, you're, you're more into just pure copper. Second program is nickel-copper play in Stendalen, Lichtenau and so on. So Stendalen, again, we drilled that last year. We found copper-nickel in high tenor inside the sulfide. The sulfides were disseminated. That means that there are not many sulfides, but still very thick intersection. This means that you have all of the conditions to have a deposit of a large-scale deposit like you have in Voisey's Bay in Labrador.
It might take you many, many years to find it and where it's centered, where the massive sulfides are, but you have all of the checks in the process that it is there. And more importantly, by doing this work in Stendalen, we've identified Lichtenau and a few other projects who have the same characteristics that was unknown. So the geological model is quite well known. Now it's about finding economical resources. In Stendalen this year, we drilled about four kilometers with three rigs. So we're excited to see what the results are. But mind you, these things can take time. And that's also how we have identified our risk here. So we sold down 49% of this company, kept 51%, and then we run all of the operation, all of the geological team and everything.
So we are effectively carried, and this is more longer term, but it has the potential to have large scale resources, right? So on the gold side next year, we're gonna continue increasing, focusing on increasing Nanoq resources. That is the closest to cash flow for us, closest to direct value for the company. Subject to results from Nanoq, we will then go, if Nanoqs are positive results, we will then want to assess and look at that, how quickly and possible we can go to resource drilling in Nanoq and even and relatively quickly start doing bulk sample from there to increase throughput in Nanoq. Then we will continue with a smaller exploration for the satellite deposit. We are trying to build up a large gold camp in this region. That's a focus.
On the strategic minerals, we'll continue all of our copper, nickel, and rare earth, exploration work. But you can see from this year's season, we have done resampling of 75 Vein. We drilled through 75 Vein and Nanoq. We've done outcrop of Nanoq sampling with mountaineers. We drilled Nanoq, as I've mentioned before, on surface. We have done surface sampling on the kind of a satellite deposit in Eagle's Nest and Vagar. We have done a very large drilling program in Stendalen. We've done downhole geophysics to try to find where the body exactly sits within Stendalen. Target North we drilled, which is an epithermal. And then we drilled also in the Josva copper project, as well as sampling on surface, what we see as interesting potential copper place. So this is all now coming to the market in the next few weeks and months ahead.
So that's gonna be quite exciting for us. And mind you as well, this is not something that is valued currently, which is fine. This is an addition to what we have already as a, as from a kind of a main value driver, which is, which is Nanoq. I'll quickly on sourcing, just to kind of give you a little bit of a background here, is that the drill rigs, we own them ourselves now. This has meant that when we're doing the drilling in Nanoq and/or elsewhere, we are doing it on a lower cost and we have been doing it, we have been operating it in a more efficient manner because we have to run our maintenance shops in Nanoq and all of this can be actually centralized there. Mining equipment, we are currently renting it on an 18% yield from Thyssen.
This is something we want to focus on acquiring over time ourselves and then ideally more be using the servicing vehicle for more opportunities. Maritime service equipment, if we can't get things in and out of Greenland logistically, this can be food, energy, anything, then, you know, you can't operate there, and this is a country that is not necessarily easy to operate in, so you have to run these things yourself, and then things like surface equipment, operating equipment is something we want to be able to use, so over time, by putting this into a separate structure, you can have different kind of a financing around this, asset-backed financing.
And then more importantly, there is a huge demand within the mining community and the infrastructure community in Greenland to use equipment and have a party who understands how to bring in equipment for these opportunities. So this can also be developed in that. But I want to stress, we have to have this. If we don't have this, you can't be successful doing the work you're doing in Greenland. So this is certainly a support business to what we're doing. If you don't have this, you can run into huge problems, because you need to be controlling your destiny and how you operate and how, because time costs money in Greenland more than anywhere else. Last but not least is that, the energy.
We have talked about energy, with the market and renewable energy, and we want to make it very clear is that when what we are looking at are simple applications, inexpensive, simple application. Why are we looking at it? Processing plant in the beginning, it'll take about two megawatts. It has to use diesel for that. If we can reduce that, we reduce our cost. We look at this river that you see here on the bottom here. It sits next to a road that we have built. It has a 70 meter drop. Effectively, we can put a pipe from that initial drop all the way down to the end of that road and put power tower turbines, which are four generators.
These are as rudimentary and simple applications we can build to increase, reduce energy dependency from diesel, but more importantly, save cost. In mining, we are looking again. This also comes into the mining equipment. How can we go into applying more and more battery equipment? Those kind of equipment don't, in our size of equipment, they don't exist. But over time, companies like Epiroc and Sandvik are developing those that reduces ventilation underground by using battery run equipment. It reduces energy cost. We try to build this into our five year plan, how we replace these things. Having a battery, for example, a windmill can then charge that. We have a 38% uptime momentum. Again, we are looking at something that is Arctic conditions, small, and can reduce energy cost. The same thing with camp and infrastructure.
It runs on low voltage, solar cells, small windmill, with a diesel generator backup, can be of great use as well as in camp and services. Just to kind of quantify this for people, the hydropower project that we have, in South Greenland, it's a CAD 6 million. It saves about CAD 2 million annually. That's it, right? So that's no bigger. And Ásgeir Margeirsson is running that project for us, in the group. And there are various different opportunities, lending opportunities here in Iceland and with the European development to get all of that, funded relatively easily with those kind of margins. So I've gone on and on. Nalunaq, we're starting our first gold. We are very excited about that. This has been a 10-year journey for us. We're commissioning, and ramping up, slowly and gradually.
We're increasing our focus next year is to increase Inferred Resources and resources for years ahead. And then commissioning phase II, which we bought all of the equipment, we've done the design, it's effectively just people costs to get that in place and then have a steady state operation from then on. The numbers on that dashboard I showed you, you can easily put them together and run your own numbers on your gold price and your grade profile and so on. And you can see that this can have a very interesting economic benefit for the company. As for exploration results, they will be coming out now, gradually. The more support for longer-term businesses that is there within the kind of a five-year strategy, services and energy, we'll do quarterly updates on how we are advancing that.
But this is no rush for us, but we just want to make sure that you understand that this is a core to our strategy and how we actually operate within the Amaroq way of doing things, in Greenland. I think this is roughly where we are at. I don't think we have more slides, so we are effectively ready for questions and hopefully we can give you some answer if there are any.
Thank you very much, Eldur. And just as a reminder to everyone on the call, if you'd like to submit a question, please send in a written question via the Q&A tab. We'll just pause for a moment to allow any questions to come in. We had a question in from Yuen Low at Panmure Liberum. Yuen's asked, will Auramet be processing the flotation concentrates or will another party do this?
Yes.
Yeah, sorry, Ellert, you go ahead, sorry.
That's fine. Auramet is the off-taker, which will buy the gold and the concentrate as well, but they won't be processing it. It will be processed in Switzerland at the Metalor refinery. But we're still finalizing who will do the processing of the concentrate when that kicks in after phase I is complete.
Okay. And we've got a question in from David Tate regarding sort of funding availability.
Yes. As for funding availability, we obviously have built in both additional availability of lending. We are now receiving cash flow from Nalunaq and from our own operations. Yes, we have all the things we need for the current operation in Nalunaq.
As we say and have said before, if there are growth opportunities for the company, we never say no to. Will we ever raise again? But the whole focus here is to try to build this on an organic growth if we can.
And we've had another question in. How do you see the 2026 cash flow for Amaroq's?
So we haven't given guidance, but if you look at the dashboard, you can look at. You can use these three parameters. So you have. We are looking to be at 300 tonnes a day, 94% recovery, and then you can either use 12 grams or 16 grams. If you use 12 grams, that should mean 40,000 ounces annually. If you use 16 grams, that's 50,000 ounces.
You then say that times the current gold price, and that should give you somewhere around $130 million for that year. And then you run your all-in cost, which is 5-6 million CAD, call it $50 million on an annual basis. So that, that's kind of a, and you can have a different view on gold price. You can have a different view on our capability of ramping up, but that's the dashboard that we're working off. So that, if that makes sense.
Thanks very much, Eldur. And one more question from Yuen Low at Panmure Liberum. Which refinery in the UK are you partnering with?
So that will be a Betts refinery that will refine and make coins and other things of that nature that we can then sell to locals.
Yeah.
Can I just on that, because it's quite interesting, one of the aspects there with the local government in Greenland was interesting that there are jewelry manufacturers in Greenland, a few of them who are interested to see, and also a lot of interest in the Greenlandic people to see, you know, can we buy the first gold that has been produced in Greenland and such. So what we've done with Betts is that you effectively can build up a site where you can order gold from the Nalunaq mine, jewelry grade gold and/or bars. It's a very good service that we can have directly with them.
Therefore part of this gold is being moved there because of the ease of providing the product that not only Greenlanders, but, you know, it could be Danish jewelers, possibly Icelandic jewelers, and/or UK jewelers who could be using that. I think there is a value there to tell you that there are ETFs, there are funds who are focusing on a single origin gold, meaning you can understand where the gold is coming from, how was it produced, what was the, for example, carbon impact of that gold, what's the legislation there operated again. That's important for everything from a central bank who are now buying gold quite frequently and/or phone makers, Apple, who use gold in their application and/or jewelry in general.
This part is also that we take quite seriously is that we can actually deliver the same product. We're not estimating any higher prices, but there is a, you probably rather want to buy gold from a place where you can understand fully how it has been made and how it has been built, developed to the market.
Thank you, Eldur. We've got a question from Tim Huff from Canaccord. What is your rough grade profiling in the first few quarters of production within your guidance range of 12-16 grams per tonne?
I would say we are most likely on the upper end of that, but we will give more once we have produced our first gold. We'll give more guidance on kind of how we are initially starting our grade. But we are effectively with lower throughput.
You can run the plant with a higher grade. Once you have more throughput, you can justify a lower grade because your fixed costs are always the same. We will be able to utilize that to our advantage. I want to remind everybody we have been stockpiling somewhere between 5000-10,000 tonnes of material, outside of the plant in three different piles: a high grade pile, mid grade, and low grade. We can also mix the grade into the plant.
Thank you, Eldur, and thank you, Ellert. Thanks very much, everyone, for your questions. If you do have further questions post the call, please do send these into the IR team and the team can address these over email. I'll hand back to Eldur to close the call.
Thank you very much, everybody.
Stay tuned for reports and results. Thanks for the support and the interest. On behalf of the Amaroq team and site team, we are very excited to continue bringing you our results and updates from all of our different programs and more importantly, our first gold, which we are focusing on having this quarter. Thank you.
Thank you.