You. Peter Nixon. Marie Anne Tawill. Tony 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, Rick Howes will introduce his executive team provide an update on the business strategy and finances the company 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 gotta love this script. It keeps saying chairman, chairman.
There's no, like, it's just, has everyone entitled, to, to vote registered with the scrutineer? If not, please do so now. The notice calling this meeting was mailed to shareholders as of March 28, 2018. The declaration as 2 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 constitute 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, Accordingly, 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 31, 2017, together with the auditors 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. Pryce WaterhouseCoopers LLP, the Auditor of the Company, is represented here today by James Lusby and Jennifer Carey. Are there any questions on the financial statements of the company for the year ended December 31, 2017?
The next item of business is the election of directors by the company's shareholders to hold office until the close of the next annual meeting of shareholders. Following such election or until their successes are elected or appointed, as outlined in the circular, management nominates Peter Gillen, Richard Howes, Jeremy Kinsman, Juanita Montalvo, Peter Nixon, Marie Anne Tuil, Anthony Walsh, Donald Jung and me, Jonathan Goodman, as directors for the ensuing year or until our successes are elected or appointed. In a 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. Accordingly, the only persons eligible to nominate for election is directed to the company as a persons nominated by management. I will now entertain a motion, nominate these persons as directors of the company for the ensuing year.
Is there a secondary? Thank you. I've been advised by the scrutineers that a sufficient number of proxies deposited for the media have been voted for election if each of the directors Therefore, unless there is an objection, rather than hold the form of out, I'll now put the motions in 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 Gillan, Jonathan Goodman, Richard House, Jeremy Kinsman, Juanita Montevo, Peter Nixon, Marie Anne Tuill, Anthony Walsh and Donald Young elected as directors for the ensuing year or until their successors are elected or appointed.
The next annual business is the appointment of Auditor of the Corporation for the ensuing year. I will now Is there a secondary? By the way, I was supposed to press that button earlier so you could see pictures of all the directors, but I, I screwed up my one tech Nicole Challenge. Thank you. I now put the motion to the meeting and call for a show of hands for the motion.
Against the motion carried. I declare the motion carried in the PricewaterhouseCoopers LLP Charteried professional accounts is appointed auditor of the company for the ensuing year. The next and final business item, am I supposed to press this some again or do something here? Nope. It's like, okay.
So I'm done my technical challenge for the day. It's 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 secondary
Thank you. I now put the motion to the meeting and call for a vote by show of hands. For the motion, Against? Carried. I declare the motion carried and that the non binding advisory sand pay resolutions approved and confirmed.
This concludes the formal business of the meeting as there's no formal business to be brought. Before the meeting, I'll now entertain a motion to terminate the meeting. Is there a secondary? Thank you. I now put the motion forward to the meeting for.
Against, I declare the motion, carry. This concludes the formal business of the meeting and it declared it terminated. And I now turn it over to Rick Howes, who's going to talk about the company and show you how all technology really does work because he's much better at it than I am. Thank you.
So, thank you, Jonathan. So 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. But 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.
So I'll just start. Everybody knows Google Earth. So this is just zooming into our corporate head office here and only reduce the senior management team. So if I could ask, each of them to stand up, as I mentioned their names, Jim Kyle, CFO, David Ray, COO. Michael Dorpman, our Senior Vice President, Corporate Development Richard Goss, our Senior Vice President, Exploration Nikolai Hristoff, our Senior Vice President, Sustainability Sustainability, John Lindsey, our Senior Vice President of Projects.
Paul Prue is not here today as our Senior Vice President of Corporate Services. Mark Crawley, our Vice President, Commercial. Kelly Stark Anderson, our senior vice vice president, corporate legal. And, Theo, who's one of the newest members of the team, Thiel Yamago, who's our vice president of digital Innovation, and the guy that if the technology doesn't work, we can just blame him. Okay.
So I'll just remind you, forward looking statements. There'll be cautionary on the forward looking statements. So I think, you know, the reason why we wanted to show off a little bit of advanced technologies, 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. So that's really a key theme behind what we're doing here.
So I'll just talk about copper and gold prices. You can see copper, both copper and gold really had bottomed out in 2015, 16. And, both have sort of rebounded, in recent, year or 2 now. And certainly that's helped, with our share price. It's helped with, a better outlook.
But I think the key to keep in mind is that the industry cyclical metal prices are cyclical. And so 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. So if you look at our share price performance, Justin, in last since the beginning of 2017, we've actually done quite well relative to the, GDX or GDXJ GDX has gone up about 4%. GDXJ has gone down about 1% since the beginning of 2017. And we've gone up about 26%.
In terms of the key achievements the company's made, we certainly had a very good, track record in trend on our safety performance. You can see that continually improving the safety results of the business. We have actually, I think 4 or 5 consecutive years been declining. And actually since 2003, probably, safety has improved probably a tenfold in terms of the safety result. The company since we started.
Regular gold production, last year, 198,000 ounces, but you'll see the trend every year is, is going up in gold production. And that's really just coming primarily from the growth at Chelopech. We we sold Japan in 20 16, that used to be a small part of our gold production. But you can see, despite selling Japan, we're still going up in gold production. And we expect this year to produce somewhere between 165,195,000 ounces.
Cost trends have been good for us. We're 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 $6.40 $8.65. But when we bring Krumovgrad on stream, which is next year, we would expect to be moving down towards $600 an ounce.
So one of the lowest cost producers, lowest quartile cost producers in the, 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, $92,000,000 EBITDA, in this year, we're on track to deliver close to the same numbers. Again. So there's a fund from operations.
You know, it's it's last year or 2 years ago, it was $72,000,000 this year's $90,000,000. We expect very strong, contribution this year again, but we expect a big burst once we get the Krumovgrad on stream as well. Capital expenditures, of course, were up a little bit, this year, mainly due to the the construction build of the Krumovgrad project, which was about 60% through now. So are actually coming towards the end of that capital spend. And, 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. So as I mentioned, there's only have about 60,000,000 to 70,000,000 to spend on Krumovgrad, and, we have liquidity of $294,000,000 made up of our revolving credit facility plus our cash plus our investments. And in terms of where we sit hedged, usually most of the hedging activity we did was really around or 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. But maybe it's copper hedging, copper hedging this year, but no hedging beyond that.
And gold, we bet, generally speaking, do not hedge gold as a rule. We try to, we think people want to be, our investors want to be exposed to the gold price. And, 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 but essentially that that very little hedging on the gold side. And the only other hedging we're doing really is around the exchange rates and we hedge the construction activity at Krumovgrad. It's over the euro.
So that's 100% hedged on the construction capital. And then, some of the, South African rand, which is linked to the Namibian dollar in terms of costs that, at, So I will, pass this off now to David Ray. And 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, so I'll hand it over to Dave. Thank you. All right.
So 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. So Chelopech is our flagship asset just under 200,000 ounces produced in 2017. Mine life 8.5 years, but we're basically replacing roughly half of the mines production each year. So therefore, it's going to be longer than 8.5 years. It's an underground operation.
And this is an asset that receives a lot of attention from our peers. So 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. And 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. So it's a good example of what can be done.
So 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. So as Rick was saying, 165 to 195 is what we can expect in terms of gold ounces, but a very, very solid start to the year and at good ounces. So that increase, as I said, has really largely been because of good work done in terms of identifying opportunities and realizing those opportunities.
And this is the type of thing that we're developing as a particular capability that we want to use for Chelopech and other assets. So 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. So 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 2.83 tons with no capital spend on the mill. And similarly, if we have a look at the other elements, we'll find other benefits, but this particular one is roughly $9,000,000 to $10,000,000 per year in benefit the 10% increase in tonnage. And 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 So just in 2017 alone, that corresponds to a 2% increase, which is roughly a $7,000,000 benefit, again, with no capital spend. 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 do every day. And that's translated with all of these elements into power cost savings as well. So you can see the kilowatt hours per ton process 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 $500,000 per year benefit. So all of these things are contributing to the benefit that we see both in terms of production and also in terms of our costs.
So 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. So what I showed you is the mill. Well, in order to supply the mill, you've got to be able to feed it. So we've got to be able to do the right things underground. So 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 stop increasing, which with the same equipment with the same people, So this has gone up by 29% in this window that I'm showing you here, but most exciting in this is this actually came from a number of different initiatives, one of which was Stoke design, which allows us to actually get more, 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 263600 tons per day. So there's still plenty of room here for optimization. And currently, we've actually moved 61% of our stopes to the new design. With a potential to take this further.
So there's still tremendous upside in potential in what's going on with our mining. So, you know, what we've seen, we've seen a significant increase in benefit and dollar value costs translation less capital fleet required in someone. Instead of having to operate at this rate, 6 operating stopes, we can get away with 2, basically. So if we have a look at what else is going on, so, near mine exploration is obviously important to, as I mentioned, we have on paper, a 9 year mine life. We want to extend that obviously.
Lot of activity going on. So Richard's here this afternoon, you'll be able to get more information from him if you wish, but we basically have a number of areas that we can look at. So the top here, this is the Chelopech license and you can see in yellow, the specific, assets, sorry, if you just do this. So you can see it's a little better. So 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.
And have a look at that. This new zone of Breccia pipes, which are effectively the feeder pipes to the Chelopech assets, we found a 1500 meter strike, which is still open to the east. And what we're doing is we're doing 10,000 meters of drilling on this to try and identify additional resources. And so far, very interesting. So these are the points at which we've got the drilling either planned or occurred.
The very first hole, we identified twenty five meters averaging 4.53 grams in a previously mined area where we didn't expect to find anything. So it's part of block 8, but we didn't expect to find that resource. And 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. So 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. So the behaviors, the relationships, the interactions that performance and this type of thing.
The Tsumeb has seen a lot of, investment. So in excess of $400,000,000, We've seen a slow increase in tonnage and I think we now set to see something really interesting. So last year was almost a 10% increase at 219,000 tons per year. So 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 $140,000,000 in 20.13. Dropping to this is actually it's a low number.
I wouldn't say this is what you can expect. The 12 to 18 is much more likely what we can effect to see from the smelter going forward, but 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 tonnage in terms of cost 75 percent fixed costs, any movement up the production curve makes a significant difference. To your cost per ton.
So 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, cell up with us. Tsumeb, we can see that we set to do 220,000 to 250,000 tons. The EBITDA, is set to respond accordingly. Now Q1 was only 54,000 tons. We would expect to do north of 60 But 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.
And once again sustaining 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. So this is the osmelter. It's the heart of the smelter. This is a vessel where we inject oxygen enriched dirt, and we consume the concentrate and generate energy, which heats up the vessel plus all of the off gasses and produces molten metals into the isle.
This refractory lining, is roughly 450 millimeters thick and it gets consumed. Now 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. And we have peak temperatures up to 1300 degrees C and average temperatures to below 1200. So 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. And the impact of that variability decrease, sorry, let's just take that back.
Get this back to the right page here, sorry. So by decreasing that variability, what's happened is it's increased the refractory performance. So 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.
So we've taken this asset in 2013 from 150,000 tons a year of treatment Now the material going into this is roughly 240,000 to 260,000 tons per year rate. And the long and the short of This improvement and some of the other things that we've been doing has led to this change. So 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. So this is running at 240,000 tons, but we could drop to about half a year. We've actually increased that tonnage now to 240,000 to 265,000 tons and reversed this.
By this activity, this control and continue 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 3, every shutdown is $2,500,000 worth of direct costs and $14,000,000 worth of revenue loss. So it had very significant impact to the operation of this smelter.
So I think that completes the optimization piece, and I'll hand back to Rick.
Well, this is probably the, very exciting part of the, story for us now is is the, Krumovgrad project is probably those who've been around with a company for a while. Sort of this is a long me to get here. But we're, almost 60% through construction now. And, if many remember the history, we were in the permitting phase for about 10 years. So, so to get to this point is pretty exciting for us.
I'm I'm sure I'm doing it right now. Okay. So for those who know the 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, That's an 8 year life. But on the 1st 5 years on average, we'll produce over 100,000 ounces a year.
At a cost of, just around $400 an ounce. So, 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 were just doing, mechanical installations are in the process plant. We'll probably start cold commissioning, you know, in a couple of months.
And, hot commissioning in the 3rd quarter. We expect 1st concentrate to come out in the 4th quarter, so that's not far away. And you can see some of the activities that are going on. We'll show you up a bit more of a close flyover, but what you're looking at here, is we're gonna show you a an activity around the blasting. What's that previous slide?
Whoops. This is where I get myself into trouble. I gotta go back here. And where's that last thing? Here we go.
So in here, you're just looking at, one of the reservoir blast that we, did. This is one of the water reservoirs. There's another one over here. 2 water reservoirs beside each other. One's for the process.
Water, one's for the water capture from the site. Let's see that. Okay. So this is a video flyover of the site. I might just zoom in and stop here for a second.
So 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. And, the town of Krumovgrad is probably about 5 or 6 kilometers away. In terms of the road distance. And then the hail itself, you can see the massive work that was done to on earthworks to excavate the necessary, flat pads that we needed to build the, main plant components.
So what you're looking at, I just went back a little bit on this. I don't know if I can. I'm gonna try my skills of this. Yeah. I didn't stop far enough.
Just hold on. Just going back to the Okay. So what you're looking at here is the main site facilities over here. And what you're looking at on this side is the actual, going to be the what's called the integrated mine waste facility. That's in 2 valleys, valleys here.
And, and, and they're essentially the where the tailings and waste rock is going to be stored in this particular project. So there are a couple of unique aspects to the project. 1 is, is this, dry storage of the tailings and the waste rock. And the extremely small footprint that the entire project is built on. And if you know the history of the project, we originally tried to permit it way back in 20 5 and 6.
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 tailings wet, wet tailings facility and the concerns about the dam on the wet tailing side. And so we went and repackaged the project back in 2000 and 9, 10, and then we resubmitted it. So now the project is 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.
So certainly a case of successful listening of what the community concerns are and what's possible. So now we're just looking at the site itself. I could just show you some of the elements of that site. I can't stop it. So what you're looking at here, if we're working from this way back, the open pit is over here.
And the start of the, and this is actually just, some hot soil storage here, but you're starting at the end. So the pit, the pit, pit, pit, roads come back into this area where the main maintenance buildings are. And 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 here, area here.
So this is where the ore stockpile will be. And then right here is the, That's the crusher. Sorry. I'll mix that up. That's the primary crusher.
And then this facility here is, called the pebble regrind. It's basically the recycle from the sag mill. And then this area here is the main grinding section. This is the main flotation area. This is the, thickening area.
And then this is a, a maintenance shop for the process plant. So all these facilities are under construction. You can see, and all progressing on schedule. And we're so quite happy to think that that's going to all come up, on the schedule we had talked about fourth quarter. Now because I'm not erasing those, you'll see those on the So we'll keep rotating around here a little bit more.
I can erase those 2 while I'm doing it. I suppose. So it doesn't block your view. So now you're looking at the other side and getting much closer view of the open pit. So 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 of the here at the, one of the water reservoirs or one of the blasting water. This is the reservoir you saw that was being blasted. This is, 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 regreting of the site, even though we're still in construction.
And that's the nice thing about the integrated waste facility that will actually be progressively de emissioning that as well and regreting that. So to make the site look good as early as we can and to make it have a minimal sort of, eyesore footprint we we're trying to do as much regreening as we go. You see even some of these slopes are already in the process of being regreened. So I think that's probably enough of that. So, 8 years of life for Krumovgrad, but we think really it's got some upside.
If you look at, the immediate area, here is the, Iran Tepe. Well, here's a number of licenses. Trying to get this not to move too much on me. That's hard to. Dave's better at this to me.
So there's the open pit, how to tap the 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 8 year life, we really have to be an action to make sure that we got additional feed, to extend that life. So that whole area, 20 kilometer radius is economic trucking distance, so we think that with anything that we find in that area, it can be a source of feed to the mill. So 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, Scalak, Cernak, Cretza. There's about 6 commercial discoveries already found. Some of have been partially drilled. Some of them haven't been drilled too much yet. So we're in the process of obviously finishing up each one.
So this is the first priority is to drill off the Cernac zone. It already has identified about 160,000 ounces at 1.8to2.4 grams. Or sorry, 1.5 to 2 grams material, which is going to be quite economic to truck to the, Krumovgrad bill. So the and with an additional 5 after that, we're quite excited by that potential. Each one could add 1 to 2 years of life to the, to the project.
So the program this year, 6000 meters of diamond drilling planned for these, satellites. Early results have started to come in, still pretty early yet, and, an additional sixteen hundred meters on this regional licenses that you can see surrounding, krumovgrad. So now we're just gonna move on to Serbia, which is our advanced exploration project in Central Serbia called the Timok Gold Project. So Timok Gold Project, we've had for quite a while. I've been exploring.
We've been quite successful there already finding about 1,700,000 ounces of gold, roughly 1.5 gram material in, near surface deposits, a number of near surface deposits, the Corkan deposit, the Bigger Hill deposit, the Pestar deposit, and most recently, discovery in what's called Corkan West. Which is somewhere very close to in between Cork and Bigger Hill. So quite, active on the exploration front, still finding more ounces of gold. And we think a lot of potential with this whole land package. Now, Timok Gold, not to be confused with the, Nevson's Timok Cocker project, which is actually not far away.
It's about 30 kilometers south and east of our project, is, is is really quite an exciting project, in its own right. So we just can, zoom in on the zone around here. So this is one of the 3 deposits. I mentioned this one is the Corkan deposit, and you can see what we're showing here is the, block models and the block model grades on the left hand side here. And also what's interesting is originally the deposit was seen as a pure sulfides, deposit.
And focus of the metallurgy was around how to how to float this concentrate. It was seen as somewhat refractory. So the recoveries were not that good. But in recent times, with the discovery of Cork and West deposit, which really is a fully oxidized, deposit. We started to relook at the data.
And it appears that the Cork and West and Bigger Hill both contain a fair amount of oxides on the top of the deposit. And that's really what we're focusing in on now. The potential for oxides, from the previous resource. So 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. And the metallurgical work is quite promising so far.
We've done what's called bottle roll tests on the coarser material, and that's getting us on the cork and deposit and the Bigger Hill, which is the 2 largest sources of oxides, 90% to 95% recovery. So these this could be, quite a game changer for the project. Obviously, we need enough, ounces to make it, viable, but we're continuing with both exploration and the metallurgical work. We'll be doing column flotation tests, leaching tests, next. And, if if things look good, we'll redo the, ore resource estimates, based on the quantities of oxides and sulfides, and we will, do a scoping level study to evaluate that potential for the project.
This is a little zoom in on where Corkin, West is. This is the Corkin West discovery. This is the bigger hill deposit. This is the Corkin deposit here. So it's a near resource target we found in 2016.
The first hole actually that we intersect, it was 105 meters at one point two grams straight from surface. Down. So there's been 2 phases of drilling that have been completed on it now. There's total forty one holes, 7000 meters. And the gold mineralization really found over about 2 20 meter strike length.
And all all of them are all oxides, really. We've got an additional drilling program that we're starting now, phase 3 program on Cork 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, and silver, 10.2% stake. Plus our, 5,000,000 shares, 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, with just north of the Malartic gold mine that, Agnico and Yamana operate, along this Cadillac Larder fault system, which is in between Battle Dore and Ruan. So it was a very, I'll call it price 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, claimstakers that held this. Not a lot of testing has been done on it yet. So this is early days.
We put 9 scout holes in so far. And we're getting already signs of, gold mineralization. So we're now refining sort of the geological models and doing some of the geochemical geophysical work and basically narrowing down our targets to to drill on. So early days on this one, but certainly in a good jurisdiction in Quebec, and pro mining and attractive from a development point of view. So it's trying to build our pipeline out with future projects and carry on with that.
So I'll leave the growth side and just touch a little bit on our, innovation work. So 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? You know, what are we thinking about in terms of the, the, the, value we can create from this? And really, I can say that really the value that we've already seen from the work we've been 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 and modernizing the facilities in 2009 to sort of 13 with the expansion from $1,000,000 to $2,000,000.
But we're really looking now at digital transformation and we really started that in phase 2 to test out our ideas. And it really started with what we called taking the lid off, which really was about trying to take minds into the real time environment from what I would call the paper systems and the sort of, I'll say managing by, reactionary basis. So there wasn't really knowledge of what's happening in real time to run these mines and still isn't today for many mines. So most of the information comes up in the form of paper data for management to react to. So we're trying to move it to a real time basis.
So 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. So now moving to what we call the next phase. And I would say the next phase is mostly about leveraging data. And the industry probably uses about 1% of its data today, but there's a huge amount of data being collected.
And so This is not unique to the mining industry. Other industries also recognize this. But, but we are probably on the extreme end of the spectrum of how we use data. And 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 analytic And with this 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. So lots of opportunities in the mining industry, probably at least most mines, I would say, easily 30 to 40 percent more efficiency gains by just analyzing data alone and getting the power out of that. But we're taking search 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. So that 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 changes that's required in the way that we as people in the, in the business Dave.
So 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 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. So that's where we're focused. And, with this, we see automation is maybe down the road at 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, but for the most part, automation of the operations end.
We're still leaving that to a later stage, but the real benefits we see now are around how we use data and how we manage the business. So I think, it's not to say that everything's about the operations focus that we have or the digital focus know, one of our success factors has really been about how we dealt with the corporate responsibility side of things. And we've certainly received a number of awards, and we continue to see what auto awards, for the work we've been doing in all the countries, in in Bulgaria, in Namibia, And our leaders and our people in those those areas are are exceptional leaders. And the people that we have are exceptional. And 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. And so these are, I think, just a an outflow of that work that our people do in the, 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. And 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.
And you can see that some of these countries are not rich countries. They're very poor countries. So there's a need a need for a lot of help, and there's a need for a lot of of participation from the corporations, the businesses that operate there, we're moving towards, very shortly a black economic empowerment, agreement with a, 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. So that that's going to be an exciting phase we're just coming into. But this is an area we spend a lot of time on, and it's very important to us.
So 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 this company is poised for quite a dramatic, I'll say a ramp up in its, its share price performance. Really resulting from all the efforts that have gone in. And so, you know, I would say the hard work phase of the company in in getting the Tsumeb smelter to where it is, the hard work to Krumovgrad, you know, to a stage where it's going to be operating soon and 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.
But also the strong social relationships we've developed sets us up very well to be immune to what I call the vaggeries, that tend to affect a lot of companies operating in international settings, which is not always sure about their social and political life to operate, and they're not always sure about what the next steps are that are gonna happen to them. So we're feeling quite comfortable about all this. We like the jurisdictions we in. We like the the the places that we operate in, and we're, obviously, very comfortable with, being successful in those in those countries. I think the outlook for the company is, extremely good in terms of our growth.
Krumovgrad will almost, will bring us to about, 370,000 ounces gold equivalent from our current level of about 260 180,000 ounces, so almost a 50% increase in, gold equivalent production, are all in sustaining costs. As I said, we Krumovgrad coming online, be very low cost company. And you can look at here our annual earnings less sustaining capital. So our annual EBITDA is form of measuring the earnings. 2017 EBITDA was 102,000,000 less sustaining capital.
And if you take it, once Krumovgrad comes online, it's 183,000,000,000 less sustaining capital. And then if you look at our market cap, it's 455,000,000. So 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, 20, and our all in sustaining costs. So On all those measures and more, if you look at, our price to NAV, and our balance sheet strength on our compared to our peers. We really are sitting at a very, very attractive valuation.
So people say that, but I think this is really illustrating that quite clearly. And then if you look at some of the concerns, I think that 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. You know, we've seen that we've been there. A good example would be there in Bulgaria since 2003. That's, you know, that's 15 years.
In 15 years, we never had one single interruption to our operations, and we've never, you know, no union strikes, no political disruption that affected our operations, no change to the tax regime, nothing. So that's a bit unheard of in the, in this business. But you can see we're very comfortable in those. And the same with Tsumeb, similarly, the the capital program that we had and the debt we built up over it, you know, the capital program is complete. Our debt is now pretty much retired, the permitting and near term growth of Krumovgrad.
I mean, all of those things which were probably historically somewhat concerns about the company. I've all been knocked off. They're all no longer a concern. The only thing that's a concern now is evaluation of the company and why why were we so undervalued. But I think what you're seeing in the share price move is really a reflection of people are recognizing.
Markets are recognizing that that that this company is probably valued too low and needs to be rerated. So 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 pipelines, strong balance sheet, strong management team, and attractive evaluations.
So I think I think that says it pretty much all. So thank you very much. So 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. We should have planted a few questions.
Is there what? Sorry? A budget for the company? The the amount of money we're gonna spend. Yeah.
The capital numbers?
Yeah.
Yeah. So capital this year sorry?
Think, yes, do we have the capital?
Yes, we're fully funded for any capital spending that we have. We mentioned earlier that we have, significant revolving credit facility untapped yet and, in cash. Numbers? We have money to continue on. I don't know.
Do you understand?
I think your answer was correct. We're fully
fully funded to complete the Krumovgrad capital spend, which is about, I'll say, $60,000,000 to $70,000,000 left to spend on that project. And we're sitting with, I'll say, good liquidity also, if that helps. And so that's the build of the next mine, which is our Krumovgrad mine. And the other mines are generating, the other mine is generating, a fair bit of cash flow already. So So there's it's contributing to the.
Any other questions? Yes. Long term debt, currently 33,000,000. Yeah. Okay.
Well, I'll hold everybody back from having a snack and a drink, but 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. I believe 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. Well, thank you very much.