Thank you for standing by. This is the conference operator. Welcome to the 1st Majestic Silver Production and Guidance Update Conference Call. As a reminder, all participants are in listen only mode and the conference is being recorded. After the presentation, there will be an opportunity I would now like to turn the conference over to Keith Neumeyer, President and Chief Executive Sir, please go ahead.
Thank you and welcome everyone for joining today's Call. It's been some time. It's been about 6 months since our last call. With us today, I just want to introduce our team. We have Larry Foreman, our Chief Financial Officer, we have Steve Holmes, our Chief Operating Officer.
We also have Connie Lyrico, our Corporate Secretary. Todd, I have these also on line with us, VP, Corporate Development and Mark Carruthers, our Manager of Investor Relations is also with us today. Before I get into the call, I'd like to pass the call over to Connie Lillico.
Prior to us beginning today, I'll read our disclaimer and forward looking statements. Certain statements contained in this conference call regarding the company and its operations Statements regarding future estimates, plans, objectives, assumptions or expectations of future performance constitute forward looking statements. We caution you that Such forward looking statements involve known and unknown risks and uncertainties that could cause actual results and future events to differ materially from those anticipated in such statements. Such risks and uncertainties include the duration and effects of the coronavirus and COVID-nineteen and any Other pandemics on our operations and workforce and its effects on global economics and society fluctuations in precious metal prices unpredictable results of fluctuation activities, uncertainties inherent in the estimation of mineral reserves and resources, fluctuations in the cost of goods and services, Problems associated with exploration and mining operations changes in legal, social or political conditions in the jurisdictions where the company operates Lack of appropriate funding and other risk factors as discussed in the company's filings with the Canadian U. S.
Regulatory agencies. Resources and production goals The forecast may be based on data insufficient to support them. The company expressly disclaims any obligation to update any forward looking statements. Back to you, Keith.
Thanks, Connie. Quite the mouthful. Okay. So I'm assuming that people Online today, if I looked at our announcement yesterday, it's showing our first half of the year Production, also filling our 2nd quarter production and our forward looking guidance, which We generally update twice per year in January July. So I'm just going to cover highlights and then we'll go into the question and answer period.
Pearl production was a record, all time record for us on a silver equivalency basis. It had everything to do with Chadda Canyon's addition To the portfolio, quite excited about that. We'll be talking about Terra Canyon as we get through this presentation obviously. The LNG plant that we've been working on for almost 2 years is finally completed with some delays due to COVID last year. It got back on track and it's now finally producing 100% of the energy needs at Thanks Elena.
Pretty exciting. We have no longer any mine in the business that's working 100% on diesel. Of course, diesel still gets used here and there, but the primary energy source is no longer diesel, which is a great thing for the environment and It should resolve the lower costs. The Yirmatano development is continuing at a quite a hefty clip. We're committed to extracting 40,000 to 50,000 tons of material or as we bring on surface prior to The end of the year for production in the Q1 of 2022 is looking really good.
It's a fantastic project and it's really going to change Santa Elena for Many years into the future. The Jarekania acquisition was completed as well. Gold in Nevada, obviously, a bit of a new Area for us, we've been in Mexico for 19 years or close to 19 years and brought the step into New Jersey. And I think Nevada was a great choice and It's one of the best mining characteristics in the world and we're a new player in the area, but we're really adding to The team there are changing management. We're doing all kinds of exciting things that will result in a lot of improvements coming at Chiric Canyon.
I'm sure there'll be questions around that. Super active in the exploration area, 26 rigs operating throughout the business, Pretty exciting. We're spending a lot of money on exploration, which is pretty key. And it's actually adding to reserves, which is Obviously, should be. So the success is there from the drill bit, which is what we want to see.
Going to just quickly before we get into question and answers, the Jared Canyon optimization plans, we know that the Costs at Jared Canyon are a little bit on the high side. It's something that we're addressing. We're going to have a couple of quarters here of elevated costs. Right now, We're building a tailings list, which is costing around $13,000,000 and that's getting our all in sustaining costs in the next couple of quarters. That will die off at the end of the year or mid Q4.
So we're going to see about a $200 Drop in all the sustaining costs we're expecting by the end of the year just due to that one cost item. But there's many other things that we're doing at Jared Canyon to even Optimize it even further. The management team, of course, is key, and that's in the process of being changed out. I'm not going to get into a bunch of details on that, but it's the team there is being assembled to really achieve the growth that we're hoping to achieve over the next couple of quarters. One of the couple of the short term objectives, which are laid out in the news release, is really joining the Essex Mine And the Smith mine underground and just having a single exit point for the ore and then using that development for exploration drifts, which is pretty exciting to me.
Number of the open pits or several open pits have been operated since the '90s, which we're hoping to We have could potentially get going again. We're doing that evaluation now. So we'll have news on that over the next couple of quarters as things develop. And the exploration, the targets there are just amazing. We've got 25 targets that we've identified that we're going to be drilling over the next couple of years.
We're not going to get it all done immediately, but it's a long term sustainable investment that this mine requires that Over the last 15 years and I've said a number of times, we're expecting to see production in 2024 To be in the 200,000 ounce range from the current about 110,000 ounce range. So in order to get to those types of growth numbers, we need to And that's why the CapEx has increased as probably people have already noticed. We did have our guidance out in January showing Our CapEx of $168,000,000 our new CapEx number of $205,000,000 most of that is really Jaricania related. So and it's necessary capital to be spent, but it's going to really bring a lot of growth into the business. I mean, in terms of rate of return on that spend, I think It's quite good.
And that's really it for me. Why don't we just go to questions? And I see there's a few people in the queue.
Thank you. We will now begin the question and answer session. Our first question comes from Heiko Ihle of H. C. Wainwright.
Please go ahead.
Hi, guys. This is Tyler Bissett on for Heiko. Thank you for taking our questions and congrats on closing the deal. It's nice to see almost 19,000 ounces Thanks. In your release, you state that you have more than 25 near mine and greenfield targets that you want to follow-up on.
Any idea as to your total expenditures for the site? I assume it's fair to say that the 5 drill rigs you have at site right now will be expanded?
Will the 5 drill rigs will be expanded? Is that what your question is?
Yes. Just how much you guys plan on spending on exploration and if you plan on expanding those drill rigs?
Yes, I don't have the breakdown on the exploration per mine. Todd Anthony Has that information available? I'm not sure Todd, do you want to address that now or you'd like to address it separately? We can follow-up with HC after the call. So, yes, let's
Sounds good. And I mean speaking
of Yes, look, it's a big land It's just 30,000 hectare land package. It's one of the things that excited us most about this acquisition was its exploration upside. These 25 targets were not identified by us. They were identified prior to us purchasing the asset. And we, of course, through our due diligence, Some identified these as real targets that need to be tested.
So it's going to take a while to do it. That's a lot of targets. It's not going to happen But just based on what we know and what we're and because the drilling program has started. And just based on what we know, it's looking very exciting. So we think life of mine, we think resources are going to expand Quite nicely over the next couple of years, but putting numbers out to the public is a different thing altogether, right?
So we're highly optimistic, but you have We've only had the asset in our portfolio since April 30. So we need some time. We need time to reduce costs because that's our first Objective is to reduce costs. The costs are too high. And we need to knock $400,000 $500 off the costs, and we're going to We work on accomplishing that over the next 6 to 12 months.
The other focus is development because this mine needs development To extract ore, this mill is only operating at 2,100 tonnes per day. The capacity is 4,500 tonnes per day. We want to fill that mill. We think we can fill that mill, But we need to spend money on development. Exploration is also key for long term life of mine.
So that's the focus. We've only had it in our portfolio for A couple of months, we need time to prove we could really show value for this asset. We've done it before. This is our forte. You go back over the 19 years and look at our acquisitions strategy and what we've done when we bought new And how we've turned them around.
This is a turnaround asset and we're super excited about it and it's going to be successful as far as we're concerned.
I appreciate that. Can you disclose how much cash you guys have spent at sites since closing the deal?
I'm not quite sure. There's normal G and A and stuff like that, but the 2 Maybe Steve wants to jump in, but the 2 primary, well, I guess exploration we've been spending money on, the tailings lift we've been spending money on. And Steve, is there anything else you want to add to that?
No, I would just say that regarding Expiration, we're going to have a program all in this year, the total year of about 70,000 meters, 25 targets Keith talked about. Since we've acquired it, we'll be close to $14,000,000 in terms of our investment. We've got the rigs on-site and we're a little late in the season. We recognize that. But we're moving really quickly.
So that will be part of the investment. And the other bigger investment on the CapEx side is this 12 foot TSF2 lift We have a contractor lifting now and we received permits from NDEP in June. And so that lift is coming up nicely. Once that lift is done, we're going to be solid there for the next 4 to 5 years in terms of tailing capacity. So these are the kind of Projects that we've been tackling and as Keith said, what I see is the potential for Production improvement and cost reduction exploration success in the district is extremely high and that's what attracted us to this asset To begin with, it's going to require some investment and some time, but there's a lot of low hanging fruit here and As I've said to the officers before, we're picking it just as fast as we can go.
I appreciate that. And finally, I know you provided some production and cost guidance for Jerrott Canyon this year, but Can you discuss your longer term outlook for the site and sort of walk us through your assumptions and what kind of impact your optimization plans could have on production and cost at site Next year and beyond?
Well, we're not we haven't put out 2022 guidance and nor are we prepared to do that today. We've said quite clearly to the market, and this is very back to the envelope type of estimate that I don't want to be Hung to this number and I've said that previously, but we're global by spending the investment that we're currently spending and you can get into the Details with Todd Anthony over our telephone call, but the investment on exploration and development, our target Is to reach 200,000 ounces of gold production in 2024. And that's really all we're willing to say. What that means from a guidance perspective, costs and in fact numbers, we're not prepared to get into those details. It appears that we have very few callers on the call today And there's actually no other questions in the queue.
So thanks for everyone's time today. And If you do have further questions about the company, please go to the company's website. There's a very good PowerPoint There on the website with lots of information covering all our assets. Also, if you have further questions regarding anything else that you might not be able On the website, please feel free to call Todd Anthony, our VP, Corporate Development or Mark Carothers, our Manager of Investor Relations. Thanks again and have a great day.
This concludes today's conference call. You may disconnect your lines. Thank you for participating and have a pleasant day.