Peter Nixon, Marie-Anne Tawil, Anthony Walsh, and Don Young. During this formal portion of the meeting, only registered shareholders present and in person and holders of valid proxies are permitted to participate in the voting. Following the formal business, Richard Howes will introduce his executive team, provide an update on the business strategy and finance of the company, and respond to questions. Shareholders and guests are welcome to participate. Appointment of Secretary and Scrutineer. Kelly Stark-Anderson, Vice President, Legal and Corporate Secretary of the company, will act as Secretary of the meeting. The list of shareholders entitled to vote at this meeting has been tabled. Computershare Investor Services Inc., by its representatives, Daniella Munoz and Shirley Tom, are acting as scrutineers of the meeting. You got to love this script. It keeps saying, "Chairman," there's no. Has everyone entitled to vote registered with the scrutineer?
If not, please do so now. The notice calling this meeting was mailed to shareholders of record as of March 28, 2018. The declaration as to such mailing is available for inspection by any shareholder and will be retained with the records of the company. I have been advised that there is a quorum present, and as notice of this meeting has been properly given, I now declare that this annual meeting has been properly called and is regularly constituted for the transaction of business. The scrutineers have advised that the proxies received have voted in support of all the matters on today's agenda. Voting will be by a show of hands. The minutes of the previous shareholders meeting of the company are available for review by any shareholder.
Unless someone wishes to have them read now, I present the minutes to the meeting and advise that such minutes will be retained with the records of the company. Are there any objections to that procedure? You have all received a copy of the circular, which outlines the business for today's meeting. I now place before the meeting the consolidated financial statements of the company for the year ended December 31st, 2017, together with the auditor's report to the shareholders, copy of which have been mailed to shareholders of the company. There are additional copies available at the entrance for anyone wishing one. PricewaterhouseCoopers LLP, the auditor of the company, is represented here today by James Lusby and Jennifer Cameron. Are there any questions on the financial statements of the company for the year ended December 31st, 2017?
The next item of business is the election of directors by the company shareholders to hold office until the close of the next annual meeting of shareholders. Following such election, or until their successors are elected or appointed, as outlined in the circular, management nominates Peter Gillin, Richard Howes, Jeremy Kinsman, Juanita Montalvo, Peter Nixon, Marie-Anne Tawil, Anthony Walsh, Donald Young, and me, Jonathan Goodman, as directors for the ensuing year or until our successors are elected or appointed. In accordance with the advanced notice bylaws of the company for nominations of directors by shareholders, we report that we did not receive any notice of any director nominations for this year's meeting. The only persons eligible to nominate for election as directors of the company are the persons nominated by management. I will now entertain a motion nominating these persons as directors of the company for the ensuing year.
Mr. Chairman, I nominate for election as directors of DPM Metals the nine persons whose names have been read.
Is there a seconder?
Mr. Chairman, I second the motion.
Thank you. I have been advised by the scrutineers that a sufficient number of proxies deposited for the meeting have been voted for the election of each of the directors. Unless there is an objection, rather than hold a formal ballot, I'll now put the motion to the meeting and call for a vote by a show of hands for the management nominees. For the motion? Against the motion? Carried. I declare Peter Gillin, Jonathan Goodman, Richard Howes, Jeremy Kinsman, Juanita Montalvo, Peter Nixon, Marie-Anne Tawil, Anthony Walsh, and Donald Young elected as directors for the ensuing year or until their successors are elected or appointed. The next item of business is the appointment of auditor of the corporation for the ensuing year. I will now entertain a motion for the appointment of the auditor for the ensuing year.
Mr. Chairman, I move that PricewaterhouseCoopers LLP Chartered Professional Accountants be appointed auditor of the company until the next annual meeting of the shareholders or until the next appointed.
Is there a seconder?
Mr. Chairman, I second the motion.
By the way, I was supposed to press that button earlier so you could see pictures of all the directors. I screwed up my one technical challenge. Thank you. I now put the motion to the meeting and call for a vote by a show of hands. For the motion? Against the motion? Carried. I declare the motion carried and that PricewaterhouseCoopers LLP Chartered Professional Accountants is appointed auditor of the company for the ensuing year. The next and final business item. Am I supposed to press this thumb again or do something here? Nope. Okay, I'm done my technical challenge for the day. Is to pass a non-binding advisory resolution accepting the company's approach to executive compensation. The form of this resolution is outlined in the circular and must be passed by a majority of votes cast at the meeting.
I will now ask for a motion to pass a non-binding advisory resolution accepting the company's approach to executive compensation. Is there a seconder?
Mr. Chairman, I second the motion.
Thank you. I now put the motion to the meeting and call for a vote by a show of hands. For the motion? Against? Carried. I declare the motion carried and that the non-binding advisory say-on-pay resolution is approved and confirmed. This concludes the formal business of the meeting, as there is no formal business to be brought before the meeting. I'll now entertain a motion to terminate the meeting. Mr. Chairman,
I move to terminate the meeting.
Is there a seconder?
Mr. Chairman, I second the motion.
Thank you. I now put the motion to the meeting. For? Against? I declare the motion carried. This concludes the formal business of the meeting, and I declare it terminated. I now turn it over to Rick Howes, who's going to talk about the company and show you how all this technology really does work, because he's much better at it than I am. Thank you.
Thank you, Jonathan. We are going to try something a little different this time around. We're probably not going to reach out to reach the kind of Steve Jobs type presentation level that you see with Apple. We'll try and do it a little different and try to make it a little more interesting for you this year in terms of walking through the company's latest results and performance and direction that we're taking. I'll just start. Everybody knows Google Earth, this is just zooming into our corporate head office here, and I'll introduce the Senior Management Team. If I could ask each of them to stand up as I mention their names. Hume Kyle, CFO. David Rae, COO. Michael Dorfman, our Senior Vice President of Corporate Development. Richard Gosse, our Senior Vice President of Exploration.
Nikolay Hristov, our Senior Vice President of Sustainability. John Lindsay, our Senior Vice President of Projects. Paul Proulx, who's not here today, is our Senior Vice President of Corporate Services. Mark Crawley, our Vice President, Commercial. Kelly Stark-Anderson, our Vice President of Corporate and Legal. Theo, who is one of the newest members of the team, Theo Yamego, who is our Vice President of Digital Innovation, and the guy that if the technology doesn't work, we can just blame him. I'll just remind you, forward-looking statements, there'll be cautionary on the forward-looking statements.
I think the reason why we wanted to show off a little bit of advanced technology is we truly are trying to be innovators in our own field of mining, and we think the mining industry does need a push to try and be more leading on the digital technology change that most industries are going through. That's really a key theme behind what we're doing here. I'll just talk about copper and gold prices. You can see that both copper and gold really had bottomed out in 2015 and 2016, and both have sort of rebounded in recent year or two now, and certainly that's helped with our share price. That's helped with a better outlook. I think the key to keep in mind is that the industry is cyclical. Metal prices are cyclical.
To be a good mining company, I think you have to basically be focused on being a low-cost competitor in the industry and able to manage yourself through these cycles well. If you look at our share price performance just in the last-- since the beginning of 2017, we've actually done quite well relative to the GDX or GDXJ. The GDX has gone up about 4%. GDXJ has gone down about 1% since the beginning of 2017. We've gone up about 26%. In terms of the key achievements the company's made, we certainly had a very good track record and trend on our safety performance. You can see they're continually improving the safety results of the business. We have actually, I think four or five consecutive years been declining.
Actually, since 2003, probably safety's improved probably tenfold in terms of the safety results of the company since we started. Record gold production last year, 198,000 ounces. You'll see the trend every year is going up in gold production, and that's really just coming primarily from the growth at Chelopech. We sold Kapan in 2016. That used to be a small part of our gold production. You can see despite selling Kapan, we're still going up in gold production, and we expect this year to produce somewhere between 165,000-195,000 ounces. Cost trends have been good for us. We're still a fairly low-cost producer. We're operating last year at around just under $700 an ounce, all-in sustaining costs. This year, we're projecting somewhere between $640 and $865.
When we bring Krumovgrad on stream, which is next year, we would expect to be moving down towards $600 an ounce. One of the lowest cost producers, lowest quartile cost producers in the gold space, and certainly sets us up for what I talked about is running a business as a low-cost producer is probably easier than running a business as a high-cost gold producer. EBITDA numbers pretty strong. Last year, $92 million EBITDA, this year we're on track to deliver close to the same numbers again. In terms of funds from operations, two years ago it was $72 million, last year it was $90 million. We expect very strong contribution this year again, but we expect a big burst once we get Krumovgrad on stream as well.
Capital expenditures, of course, were up a little bit this year, mainly due to the construction build of the Krumovgrad project, which was about 60% through now, we're actually coming towards the end of that capital spend. We should be in pretty good shape following that with very little debt and an ability to carry forward, generating a fair bit of free cash flow to the business. Liquidity, very strong. As I mentioned, we only have about $60 million-$70 million to spend on Krumovgrad. We have liquidity of $294 million made up of our revolving credit facility, plus our cash, plus our investments.
In terms of where we sit hedged, usually most of the hedging activity we did was really around managing the risk of the Krumovgrad build, making sure that if metal prices took a downturn, we were able to manage through the build without interrupting that. We're in very good shape in terms of that. Mainly it's copper hedging this year, but no hedging beyond that. Gold, we generally speaking do not hedge gold as a rule. We think our investors want to be exposed to the gold price. We do have a minor amount of gold hedging, and we did do a forward gold sale as part of the financing arrangements for Krumovgrad. Essentially, very little hedging on the gold side.
The only other hedging we're doing really is around the exchange rates, we hedge the construction activity at Krumovgrad, some of the euro. That's 100% hedged on the construction capital. Then some of the South African rand, which is linked to the Namibian dollar in terms of costs at Tsumeb. I will pass this off now to David Rae. Dave's just going to show you some of the work we've been doing around optimizing the performance of our operating assets, both Chelopech and Tsumeb. I'll hand it over to Dave.
Hit the Chelopech button. Thank you.
Should be good that time.
All right. I'm going to talk about the outcome from the work we've been doing on continuous improvement as opposed to necessarily all the different things that we've been doing. Chelopech is our flagship asset, just under 200,000 ounces produced in 2017. Mine life 8.5 years. We're basically replacing roughly half of the mine's production each year, therefore it's going to be longer than 8.5 years. It's an underground operation. This is an asset that receives a lot of attention from our peers. If we have a look at the Chelopech highlights, as Rick already mentioned, we've seen an increase in the production of product over the last number of years. I would suggest to you that since the expansion was completed in 2012, the bulk of that has been through optimization and not through capital spend.
It's a good example of what can be done. Here again, if we were to look back a little further in time, you'll see we got this continuous rise in payable gold, and you can see, basically Sorry, for metals contained. We're already almost 30% of guidance in the first quarter. Now we do expect the grade to fall off for the rest of the year and be more towards the resource average. As Rick was saying, 165 to 195 is what we can expect in terms of gold ounces, but a very solid start to the year and at good ounces. That increase, as I said, has really largely been because of good work done in terms of identifying opportunities and realizing those opportunities.
This is the type of thing that we're developing as a particular capability that we want to use for Chelopech and other assets. If we see how that's translated with the work that's been done, and I don't know if you can actually see this, but let's just stop this for a moment and we can sort of zoom in a little bit. If we have a look, the work that's been done at Chelopech has taken us from roughly 250 tons an hour through the mill to 283 tons with no capital spent on the mill. Similarly, if we have a look at the other elements, we'll find other benefits, but this particular one is roughly CAD 9 million-CAD 10 million per year in benefit with a 10% increase in tonnage.
At the same time, what we've seen is that we've been better utilizing what's coming out from underground, so we've seen a fairly dramatic change in gold recovery. Just in 2017 alone, that corresponds to a 2% increase, which is roughly a CAD 7 million benefit, again with no capital spent. This is just better understanding what's going on in the operation, recognizing things early when you've got the opportunity control, identifying opportunities, and then building those into what we do every day. That's translated with all of these elements into power cost savings as well. You can see the kilowatt hours per ton processed because of efficiency, better utilizing the asset. You can see we've had a 9% power consumption decrease, and that alone in 2015 to 2017 is a half a million CAD per year benefit.
All of these things are contributing to the benefit that we see both in terms of production and also in terms of our costs. If we then have a look at what's still happening at Chelopech, there's been a lot of good work going on with optimization of our underground assets. What I showed you was the mill. Well, in order to supply the mill, you've got to be able to feed it. We've got to be able to doing the right things underground. What's been happening here is that if you go back over the last few years, we've seen an increase in what we refer to as our mucking intensity, which basically means it's the tons per day per stope increasing, which with the same equipment, with the same people.
This has gone up by 29% in this window that I'm showing you here. Most exciting in this is, this actually came from a number of different initiatives, one of which was stope design, which allows us to actually get more tonnage out of the stopes by purpose of making sure that we have the most optimal way of operating our loaders. In this particular case, individual stopes have run anywhere between, and just refer to this one now, 2,600-3,600 tons per day. There's still plenty of room here for optimization. Currently, we've actually moved 61% of our stopes to the new design, with the potential to take this further. There's still tremendous upside in potential in what's going on with our mining.
What we've seen, we've seen a significant increase in benefits and CAD value, costs, translation, less capital fleet required, and so on. Instead of having to operate at this rate, six operating stopes, we can get away with two, basically. If we have a look at what else is going on, near mine exploration is obviously important, too. As I mentioned, we have on paper a nine-year mine life. We want to extend that obviously. A lot of activity going on. Richard's here this afternoon, you'll be able to get more information from him if you wish. We basically have a number of areas that we can look at. The top here, this is the Chelopech license, and you can see in yellow the specific assets. Sorry, let me just do this so you can see this a little better.
The mining blocks are in here, and what we've identified in the work that Richard and his team has done is an opportunity in the southeast corner of this asset, which we can explore from the mine. With that drilling, we see prospect of finding additional resources. If we have a look at that, this new zone of breccia pipes, which are effectively the feeder pipes to the Chelopech assets, we found a 1,500-meter strike, which is still open to the east. What we're doing is we're doing 10,000 meters of drilling on this to try and identify additional resources. So far, very interesting. These are the points at which we've got the drilling either planned or occurred. The very first hole, we identified 25 meters averaging 4.53 grams in a previously mined area where we didn't expect to find anything.
This is part of block A, but we didn't expect to find that resource. More importantly then in terms of prospectivity, the next 132 meters had gold grade, and the conditions are good for us to find more. Now, the spacing is very wide, and you have to do a lot more work, and that's basically what Richard and his team is doing at the moment. Oops, sorry. All right, let's move on to Tsumeb. A lot of what we've been doing in the last number of years has really been focusing on getting better operating practices and changing the way we work. The behaviors, the relationships, the interactions, the performance, and this type of thing. Tsumeb has seen a lot of investment, in excess of $400 million.
We've seen a slow increase in tonnage, and I think we're now set to see something really interesting. Last year was almost a 10% increase at 219,000 tons per year. If we have a look a little bit more closely at some of this, you can see this capital profile that I was mentioning, peaking at $140 million in 2013, dropping to This is actually a low number. I wouldn't say this is what you can expect. The $12 million-$18 million is much more likely what we can expect to see from the smelter going forward. We can see that major spend has fallen off, and we can see now a steady increase in tonnage, and we're set basically for something different. The smelter is so leveraged to tonnage.
In terms of cost, 75% fixed cost, any movement up the production curve makes a significant difference to your cost per ton. If we have a look at some of the highlights in a bit more detail, you can see that the tonnage has been increasing with Tsumeb. We can see that we're set to do 220,000-250,000 tons. The EBITDA is set to respond accordingly. Q1 was only 54,000 tons. We would expect to do north of 60. We're coming to the end of the cycle of the life of the furnace, and we can expect, once we rebuild the furnace, to see a significant upside once that's completed. Once again, suspending capital. What I really wanted to show you is what's going on in terms of our work on improvements and what that can mean to the performance of the smelter.
This is the Ausmelt. It's the heart of the smelter. This is a vessel where we inject oxygen-enriched air, and we consume the concentrate and generate energy, which heats up the vessel, plus all of the off-gases and produces molten metals into the aisle. This refractory lining is roughly 450 millimeters thick, and it gets consumed. If we have a look at the variation that we had in the control on that temperature, you can see from this quite a cycle of variation. We have peak temperatures up to 1,300 degrees Celsius, and average temperature is just below 1,200. If we advance this video a little bit, by working on the optimization of this asset, what we were able to do is to decrease that variability. The impact of that variability decrease, sorry, let's just take that back. I fall back.
Get this back to the right pages, sorry. By decreasing that variability, what's happened is it's increased the refractory performance. Now instead of having a refractory life that's measured in, say, 30-40 weeks duration, now we're running something closer to 70 weeks, and that has a very material impact on the overall character of the smelter and its performance. We've taken this asset in 2013 from 150,000 tons a year treatment. The material going into this is roughly 240,000-260,000 tons per year rate. The long and the short of this improvement, and some of the other things that we've been doing has led to this change. Where we started off at 150,000 tons of capacity at just under a year of operation, dropping all the way down as we brought in the new oxygen plant.
This is running at 240,000 tons, where we dropped about half a year. We've actually increased that tonnage now to 240,000-265,000 tons and reversed this. By this activity, this control and continuous improvement, we're now going to do 70 weeks when we take this asset off. That's a 60% increase in the amount of concentrate processed, and the impact of that is we're now doing in one shutdown what we would previously do with three. Every shutdown is CAD 2.5 million worth of direct costs and CAD 14 million worth of revenue loss. A very significant impact to the operation of this smelter. I think that completes the optimization piece, and I'll hand back to Rick. Okay.
This is probably the very exciting part of the story for us now is the Krumovgrad project. Just probably those who've been around with the company for a while, this is a long journey to get here. We're at almost 60% through construction now. If many remember the history, we were in the permitting phase for about 10 years. To get to this point is pretty exciting for us. I'm not sure I'm doing it right now. For those who know some of the numbers, it's a very good project. It's got an after-tax return of 28%. It's a high-grade open pit, low cost, running about $400 an ounce cost. It's an eight-year life. On the first five years, on average, we'll produce over 100,000 ounces a year at a cost of just around $400 an ounce.
It's very exciting to see it now this close to startup. As we look at where we are now, we're actually very close to the commissioning phase. We're just doing mechanical installations in the process plant. We'll probably start cold commissioning in a couple of months, and hot commissioning in the third quarter. We expect first concentrate to come out in the fourth quarter, that's not far away. You can see some of the activities that are going on. We'll show you a bit more of a close flyover, but what you're looking at here is I'm gonna show you an activity around the blasting. What's that? Previous slide? Oops. This is where I get myself into trouble.
The other way.
I got to go back here. Where's that blasting? Here we go. In here, you're just looking at one of the reservoir blasts that we did. This is one of the water reservoirs. There's another one over here. Two water reservoirs beside each other. One's for the process water, one's for the water capture from the site. You see that? This is a video flyover of the site. I might just zoom in, stop here for a second. In terms of the overall layout, what you're looking at here is this is looking in the direction north. This is on the top of a hill. The town of Krumovgrad is probably about five or six kilometers away in terms of the road distance.
The hill itself, you can see the massive work that was done on earthworks to excavate the necessary flat pads that we needed to build the main plant components. What you're looking at If I could just went back a little bit on this. I don't know if I can. I'm going to try my skills at this. No, I didn't stop far enough. Just hold on. Not very good at this. What you're looking at here is the main site facilities over here. What you're looking at on this side is the actual, gonna be what's called the integrated mine waste facility. That's in two valleys here. They're essentially where the tailings and waste rock is going to be stored in this particular project. There's a couple of unique aspects to the project.
One is this dry storage of the tailings and the waste rock, the extremely small footprint that the entire project is built on. If you know the history of the project, we originally tried to permit it way back in 2005 and 2006, and we had some opposition to the project from the local community around a couple of key things. One was the use of cyanide, one was how much area we were occupying on the project footprint because we were using a wet tailings facility, and the concerns about the dam on the wet tailings side.
We went and repackaged the project back in 2009, 2010, then we resubmitted it. Now the project has really got very little opposition, good support from the local community, and really a much more benign project from the risk point of view that we're concerning the local community. Certainly a case of successful listening of what the community concerns are and what's possible. Now we're just looking at the site itself. If I could, I'd just show you some of the elements of that site. Oops. I can't stop it. What you're looking at here, if we're working from this way back, the open pit is over here. This is actually just some topsoil storage here, but you're starting at the end. The pit roads come back into this area where the main maintenance buildings are.
If you keep coming along here, this is the crushing facilities here. This is the main conveyor running out from there. This is the stockpile area here. This is where the ore stockpile will be. Right here is the That's the crusher. Sorry. I mixed that up. That's the primary crusher. This facility here is called the pebble regrind. It's basically the recycle from the SAG mill. This area here is the main grinding section. This is the main flotation area. This is the thickening area. This is a maintenance shop for the process plant. All these facilities are under construction, you can see, and all progressing on schedule. We're so quite happy to think that's going to all come up on the schedule we had talked about fourth quarter.
Because I'm not erasing those, you'll see those on the. I'll keep rotating around here a little bit more. I can erase those too while I'm doing it, I suppose. Just so it doesn't block your view. Now you're looking at the other side, and again, a much closer view of the open pit. We're just preparing the open pit because there's not much pre-strip on this. We won't start actually blasting in the open pit to start stockpiling ore until about July. If you're looking here at one of the water reservoirs or one of the blasting. This is the reservoir you saw that was being blasted. This is another water storage pond. You can see the regreening that's already started. We've taken the time to start what I call progressive decommissioning or regreening of the site, even though we're still in construction.
That's the nice thing about the integrated mine waste facility, that we'll actually be progressively decommissioning that as well and regreening that. To make the site look good as early as we can and to make it have a minimal eyesore footprint, we're trying to do as much regreening as we go. You can see even some of these slopes are already in the process of being regreened. I think that's probably enough of that. Eight years of life for Krumovgrad, but we think really it's got some upside. If you look at the immediate area, here is the Ada Tepe. Well, here's a number of licenses. I'm trying to get this not to move too much on me. That's hard to do. David's better at this than me.
There's the open pit, Ada Tepe open pit, and then all of our surrounding mining licenses, and we're very active on the mining exploration side now. There was a period where we weren't exploring too heavily while we were waiting for permits, but we picked that program up as we get closer to startup. Obviously, with an eight-year life, we really have to be in action to make sure that we got additional feed to extend that life. That whole area, 20-kilometer radius, is economic trucking distance. We think that with anything that we find in that area, it can be a source of feed to the mill. If you zoom in on this area just around the open pit here, you can see the open pit itself. You can see that we've already discovered a number of satellite zones, Skalak, Surnak, Kuklitsa.
There's about six commercial discoveries already found. Some of them have been partially drilled, some of them haven't been drilled too much yet, we're in the process of obviously finishing up each one. This is the first priority, is to drill out the Surnak zone. It already has identified about 160,000 ounces at 1.8-2.4 grams, or sorry, 1.5-2 grams material, which is going to be quite economic to truck to the Krumovgrad mill. With an additional five after that, we're quite excited by that potential. Each one could add one to two years of life to the project. The program this year, 6,000 meters of diamond drilling planned for these satellites. Early results have started to come in, still pretty early yet. An additional 1,600 meters on these regional licenses that you can see surrounding Krumovgrad.
Now we're just going to move on to Serbia, which is our advanced exploration project in central Serbia, called the Timok Gold Project. Timok Gold Project, we've had for quite a while and been exploring. We've been quite successful there already, finding about 1.7 million ounces of gold, roughly 1.5 gram material in near surface deposits, a number of near surface deposits, the Korkan deposit, the Bigar Hill deposit, the Pester deposit, and most recently, discovery in what's called Korkan West, which is somewhere very close to in between Korkan and Bigar Hill. Quite active on the exploration front, still finding more ounces of gold, and we think a lot of potential with this whole land package. Timok Gold, not to be confused with the Nevsun's Timok Copper Project, which is actually not very far away.
It's about 30 km south and east of our project. Is really quite an exciting project in its own right. We just can zoom in on the zone around here. This is one of the three deposits I mentioned. This one is the Korkan deposit. You can see, what we're showing here is the block models and the block model grades on the left-hand side here. Also what's interesting is originally the deposit was seen as a pure sulfides deposit, and focus of the metallurgy was around how to float this concentrate. It was seen as somewhat refractory, so the recoveries were not that good. In recent times, with the discovery of the Korkan West deposit, which really is a fully oxidized deposit, we started to re-look at the data.
It appears that the Korkan West and Bigar Hill both contain a fair amount of oxides on the top of the deposit, that's really what we're focusing in on now. The potential for oxides, from the previous resource, we're re-quantifying what that looks like, how much pure oxides, how much transitional material, how much sulfides, and doing some initial metallurgical work. The metallurgical work is quite promising so far. We've done what's called bottle roll tests on the coarser material, that's getting us on the Korkan deposit and the Bigar Hill, which is the two largest sources of oxides, 90%-95% recovery. These could be quite a game changer for the project. Obviously, we need enough ounces to make it viable, we're continuing with both exploration and the metallurgical work. We'll be doing column flotation tests, column leaching tests next.
If things look good, we'll redo the ore resource estimates based on the quantities of oxides and sulfides, we will do a scoping level study to evaluate that potential for the project. This is a little zoom in on where Korkan West is. This is the Korkan West discovery. This is the Bigar Hill deposit. This is the Korkan deposit here. It's a near resource target we found in 2016. The first hole actually that we intersected was 105 meters at 1.2 grams straight from surface down. There's been two phases of drilling that have been completed on it now. There's a total of 41 holes, 7,000 meters, and the gold mineralization really found over about 220-meter strike length. All of them are all oxides, really.
We've got an additional drilling program that we're starting now, phase 3 program on Korkan West and several other targets, and these will all be included in the updated resource estimate later this year. I'll just mention, still have holdings in Sabina Gold & Silver, 10.2% stake, plus our 5 million shares of warrants that we have on this project on a production decision, as well now active in Quebec with this Malartic Gold Project, which is a very nice land package. We're just north of the Malartic Gold Mine that Agnico and Yamana operate, along this Cadillac-Larder Fault System, which is in between Val-d'Or and Rouyn. It's a very, I'll call it, prize package of land. It was assembled by a group, a junior explorer, into a package that was made up of a bunch of individual, I'll say, claim stakers that held this.
Not a lot of testing's been done on it yet. This is early days. We put nine scout holes in so far, and we're getting already signs of gold mineralization. We're now refining sort of the geological models and doing some of the geochemical, geophysical work and basically narrowing down our targets to drill on. Early days on this one, but certainly in a good jurisdiction in Quebec, and pro-mining and attractive from a development point of view. It's trying to build our pipeline out with future projects and carry on with that. We'll leave the growth side and just touch a little bit on our innovation work.
David touched on some of it, but I'll sort of try to put some perspective because people have been asking a lot of questions about why did we acquire MineRP, what are we thinking about in terms of the value we can create from this. Really, I can say that really the value that we've already seen from the work we've done is quite substantial. We started really way back in 2003 when we first acquired Chelopech to transform that mine by changing the mining method, introducing more modern techniques and methods and equipment. Modernizing the facilities in 2009 to sort of 2013 with the expansion from 1 million to 2 million. We're really looking now at digital transformation, and we really started that in phase 2 to test out our ideas.
It really started with what we called taking the lid off, which really was about trying to take mines into the real-time environment from what I would call the paper systems and the sort of, I'll say, managing by reactionary basis. There wasn't really knowledge of what's happening in real time to run these mines, and still isn't today for many mines. Most of the information comes up in the form of paper data for management to react to. We're trying to move it to a real-time basis. That was successful. We started that in 2012, and we've really seen the benefits of being able to know what's happening, how we control and manage the operation, where the waste is in the processes, and starting to see the benefits of tighter management, better scheduling and planning, and better execution.
We're now moving to what we call the next phase. I would say the next phase is mostly about leveraging data. The industry probably uses about 1% of its data today, but there's a huge amount of data being collected. This is not unique to the mining industry. Other industries also recognize this, but we are probably on the extreme end of the spectrum of how we use data. We see that we can leverage data in many forms into an ability to get insights into our business that we didn't really see before. You're hearing lots of stories now about that, about our ability to use analytics. With those analytics on the big data that we have, we can actually see things that intuitively we don't know and by observation we don't know. We only know it through analyzing data.
Lots of opportunities in the mining industry. Probably at least most mines, I would say, easily 30%-40% more efficiency gains by just analyzing data alone and getting the power out of that. We're taking certainly that a lot further into the concept of a fully dynamic way of managing the business and a fully integrated way of managing the business as well. That's requiring us to do a lot more thinking about how we manage the business and integrate all the pieces of the business to make better decisions, and use the tools to enhance our decision-making, and also get the change that's required in the way that we, as people in the business, behave. There's a lot of change going on in the company.
The good news is we're seeing the change already taking hold in our workforce in Bulgaria and in our operations in Namibia. People are buying into these things. We're not so focused on the automation side and the displacement of people at this stage. There's a lot more low-hanging fruit by eliminating waste in the business right now. That's where we're focused. With this, we see automation as maybe down the road some point. We'll push more automation. We may automate some of our backroom office processes and some of our labor-intensive, I'll say, paper processes. For the most part, automation of the operations end, we're still leaving that to a later stage. The real benefits we see now are around how we use data and how we manage the business. Let me do that way.
I think not to say that everything's about the operations focus that we have or the digital focus. One of our success factors has really been about how we dealt with the corporate responsibility side of things. We've certainly received a number of awards. We continue to receive a lot of awards for the work we've been doing in all the countries, in Bulgaria, in Namibia. Our leaders and our people in those areas are exceptional leaders and the people that we have are exceptional in that they create the success around these awards because they're so engaged in the community, they're so engaged in terms of what's going on with how we can help the community that we're working in. These are, I think, just an outflow of that work that our people do in the areas.
We do invest a fair bit of our time and energy and money into our community relations, into our country relations in terms of how we build this out. I think that's probably the other secret ingredient of the company is this focus on that relationship with the local communities, and our responsibility to be a good corporate citizen, to act and behave environmentally responsibly, to act and behave socially responsibly, to help out where we can in these communities. You can see that some of these countries are not rich countries. They're very poor countries. There's a need for a lot of help, and there's a need for a lot of participation from the corporations, the businesses that operate there.
We're moving towards, very shortly, a Black Economic Empowerment agreement with a local group in Namibia that will really allow them to participate in the benefits of the success of our company in developing and growing the Namibian economy, creating small-medium enterprise opportunities and jobs for locals. That's going to be an exciting phase we're just coming into. This is an area we spend a lot of time on, and it's very important to us. If I could just summarize. There's a lot of good things happening in the company, and I think there's a lot of exciting things happening, and I think this company is poised for quite a dramatic, I'll say, ramp-up in its share price performance, really resulting from all the efforts that have gone in.
I would say the hard work phase of the company in getting the Tsumeb smelter to where it is, the hard work to get Krumovgrad to a stage where it's going to be operating soon, and the Chelopech improvements and all the efforts there, all lead to really some very impressive, I'll say, financial business results for the company. Also, the strong social relationships we've developed sets us up very well to be immune to what I call the vagaries that tend to affect a lot of companies operating in international settings, which is they're not always sure about their social and political license to operate, and they're not always sure about what the next steps are that are going to happen to them. We're feeling quite comfortable about all this.
We like the jurisdictions we're in, we like the places that we operate in, and we're obviously very comfortable with being successful in those countries. I think the outlook for the company is extremely good in terms of our growth. Krumovgrad will bring us to about 370,000 ounces gold equivalent from our current level of about 260,000, 280,000 ounces, almost a 50% increase in gold equivalent production. Our all-in sustaining costs, as I said, with Krumovgrad coming online, be a very low-cost company. You can look at here our annual earnings, less sustaining capital. Our annual EBITDA is a form of measuring the earnings. 2017, EBITDA was $102 million, less sustaining capital. If you take it once Krumovgrad comes online, it's $183 million less sustaining capital. Then if you look at our market cap, it's $455 million.
Clearly, and this just shows up here, on all measures, we're still a very attractive valuation, despite sort of what the progress has been, as I mentioned, 26% share price improvement. This is where we sit relative to peers on a number of measures, enterprise value to reserves, enterprise value to gold production, enterprise value to our 2018 estimated cash flow, and our all-in sustaining costs. On all those measures and more, if you look at our price to NAV and our balance sheet strength compared to our peers, we really are sitting at a very, very attractive valuation. People say that, but I think this is really illustrating that quite clearly.
If you look at some of the concerns, I think, that there were about the company going back recent times, one was the concern that we're operating in jurisdictions like Eastern Europe and perhaps Namibia that are not well understood, and they're unstable jurisdictions and they're risky jurisdictions. We've seen that. We've been there. A good example would be we've been there in Bulgaria since 2003. That's 15 years. In 15 years, we've never had one single interruption to our operations, and we've never no union strikes, no political disruption that affected our operations, no change to the tax regime, nothing. That's a bit unheard of in this business. You can see we're very comfortable in those jurisdictions. The same with Tsumeb. Similarly, the capital program that we had and the debt we built up over it, the capital program's complete.
Our debt is now pretty much retired. The permitting and near-term growth of Krumovgrad, all of those things which were probably historically somewhat concerns about the company have all been knocked off. They're all no longer a concern. The only thing that's a concern now is the valuation of the company and why were we so undervalued. I think what you're seeing in the share price move is really a reflection of people are recognizing, markets are recognizing that this company is probably valued too low and needs to be re-rated. I'll just summarize by saying, I think we operate in mining-friendly jurisdictions. We have a strong reserve and resource base. We have high-quality, low-cost assets. We have near-term, low-cost growth in gold production, growing exploration pipeline, strong balance sheet, strong management team, and attractive valuations. I think that says it pretty much all.
Thank you very much. If I could maybe just open the floor to any questions Jonathan or any of the management team might have, be able to answer. If I can't answer them, I'll surely pass them off. Okay. We should have planted a few questions. Yes. Is there what, sorry?
Budget. The budget for the company.
The budget for the company?
Yeah.
The amount of money we're going to spend?
Yeah. Do you have the capital numbers?
Yeah. Capital this year? Sorry?
I think that we have the capital numbers.
Yeah, we're fully funded for any capital spending that we have. We mentioned earlier that we have a significant revolving credit facility that's untapped yet and cash. Numbers?
Yeah. The capital flow is there. You have money to continue.
We have money to continue on.
Yes. How much money?
I don't know. Do you understand?
I think your answer was correct. We're fully capitalized.
We're fully funded to complete the Krumovgrad capital spend, which is about, I'll say, $60 million-$70 million left to spend on that project. We're sitting with, I'll say, good liquidity, I'll say, if that helps. That's the build of the next mine, which is our Krumovgrad mine, and the other mine is generating a fair bit of cash flow already, so it's contributing to the Any other questions? Yes. Hi. Thank you. Just one question. How much long-term debt do you have? Long-term debt? Currently $33 million. Okay. Yeah. Thank you. Thank you.
Okay, well, I'm going to hold everybody back from having a snack and a drink, please welcome you to come up to the front, ask questions of any of the management or board members, and just enjoy, have a drink. We'll put on a sort of a walking video here on the screen here, which you can also show you some things if you're interested. Thank you very much.