Good morning, everybody. Thanks very much for joining us today. We're delighted to be here to tell you about a new, growing North American precious metal company with high-quality assets in one of the world's truly great gold camps in northern Ontario, and what we think is the leading silver development project in a known gold region in northern Mexico. The time we announced the Porcupine acquisition, we were restricted from doing much marketing because we were in a public distribution. We talked about it, and we've come through that. We've done a little bit since. We were at BMO last week. But we thought PDAC was a very good opportunity to have an event for the investment community and get people an opportunity to meet the team and get a sense of what we've done and where we see ourselves going.
Today's presentation will be given by our CEO, Tony Makuch, and I will say that virtually all of our leadership team is here today, and I invite you to they'll participate in the Q&A, and also I invite you to grab them and talk to them after we're finished. Just before I turn it over to Tony, I will do the task of talking about the cautionary language. These are on our website, these next two slides. We will be making forward-looking statements. We're very excited about the future, so please give the information on this slide and on our website due consideration. Just the one other cautionary language slide, excuse me, cautionary language slide. Two things. Not a lot, but there are a few non-IFRS measures we'll be talking about, and similarly, the cautionary language around the use of those measures is available on our website as well.
I will say that a lot of the numbers you'll hear in this presentation come from a technical report we did as part of the deal and part of the financing. It was done at the level of preliminary economic assessment. It's preliminary in nature. We will be doing additional work, a great deal of additional work going forward, to prove out numbers and advanced studies, as we move forward. With that, I'm pleased to introduce our CEO, Tony Makuch.
Hopefully, you're clapping for Mark. Good, anyway, it's nice to come here and nice to be a friendly crowd as well. And I know we got a lot of people here. And it is an exciting time in terms of, you know, as maybe as we talked to him when we did the equity offering and I know with the BMO guys, what they mentioned, but it's been the first time in like 30 years.
It is really somewhat of a once in a generation or once in a lifetime opportunity where you get, we got the chance to create a whole new mining company out of, you know, and it's not like we were, there's nothing wrong with Discovery Silver in terms of what we were, owning a, you know, a silver project in Mexico. But what this does is it enhances our ability not only to finance and build a world-class project in Mexico, but we can talk to you about how we have a world-class project, a tier one project in the Porcupine Gold Camp in Canada.
You know, to get here, I mean, it you know, you have a lot of support and we do have a lot of supporters in the room, but you know, I really have to acknowledge Franco-Nevada being really backstopping right from the beginning and sticking with it in terms of putting it together. Tim Lafferty, who was championing, came to see me as soon as he heard about, you know, Newmont or coming close to it and say, "Hey, this is something we've been talking about for a long time. Can we do it?" Peter Grosskopf is very helpful in BMO. We had a lot of good support in terms of getting this over the line.
We do have a lot of, as Mark mentioned, the management people here and a lot of the sort of the team here. Some of it is people been, you know, been a team of people working together for a long time. I think we can got a good chance to build on success and expand the team and bring some new people on. Anyway, it is, you know, as this slide talks about a couple of things, and I'm not sure if it all tells everything, but you know, in terms of what we're doing with Porcupine and Porcupine Complex and as we talked to get an opportunity to come into a world class gold camp.
You might sit there and say it's 120 years of mining. It's all mined out. And then as we talk about it, you can see that it's not mined out yet, right? There's still lots left. There's still lots of low-hanging fruit. There's still lots of good stuff left. It just needs, you know, sometimes new energy. And, you know, I was just reflecting on that, man, but when we started Lake Shore Gold, Alan Moon, who was the chairman of Lake Shore, and he would have been about my age right now. And one thing Alan said to me, he said, you know, youth is wasted on the young, right? And we still have a lot of youth in this company. So, you know, we have a lot of excitement that we can have.
But in terms of what we had picking up the Porcupine assets from Newmont, you know, and we become a base case, 285,000 ounce a year producer in a going concern, proven mining in a proven jurisdiction with infrastructure. We don't have to invest to build all this stuff. There's billions of dollars worth of investment already in place here and history and people, etc . And you know, if you look at the valuation, we come up with that, you know, at consensus pricing and you know, and really $21,050 gold, long-term gold price, you know, a very good acquisition. I mean, we're you know, we definitely didn't overpay to acquire this. A good entry point in terms of picking this up.
Part of that is definitely a testament to, you know, some support of Newmont in terms of trying to get this over the line. Even the way we've financed with Newmont, you know, this, you know, $200 million upfront and takes some more money off, but in four years, three or four years from now, and, you know, $37.5 million a year for four years. So, you know, able to set it up.
I mean, again, with the support of Franco-Nevada to start off, it's great to have these great projects, but we're also well financed as well and have the money to invest to build a project, which I think is going to be really, you know, what definitely is important in terms of what we can do in terms of creating value. I can say we talk about a lot of good people or people with a lot of experience in working in the region and even working and building these types of companies before and knowing that, you know, these pitfalls and it's not an easy business. If it was easy, it would, somebody else would be doing it or it'd be all done.
So we, you know, we can't sit here and walk into this thing and get too cocky and get too overconfident of ourselves. We know it's going to be a lot of hard work and a lot of things, but we do have a lot of good people, a lot of good backing in terms of where how to get there. Just go on. Oh, I'm sorry. I'm supposed to move the slides. Sorry. I'm not used to this. I don't have to maybe go through this too much. And this is just a transaction overview. I don't know if everybody's familiar with this. We can always ask questions about this later.
Timmins is in terms of, you know, again, acknowledge the support of Franco-Nevada in terms of getting to this place and, you know, and where we're going to use the financing, the funds and demonstrate where we are, you know, so that, sorry, that we have a strong balance sheet and the ability to execute, you know, and I always go back to when I was in grade eight and we studied American history and we had an assignment. I had to pick a great American and I had Theodore Roosevelt and I don't remember anything about it. I just remember one thing he said is you have to have money to make money. So, you know, definitely having a strong balance sheet is important.
We can have all kinds of great ideas, but if we can't execute because we don't have the financial resources, we're not going to get anywhere. And so it's important. But just a couple of things here, you know, again, yeah. And, and, you know, somebody might look and say, well, it's a hundred-year-old mining camp. You know, how come a lot, you know, people didn't line up? A lot of people didn't line up to buy this camp. But if you look at it and maybe people don't understand what's here, like the Hoyle Pond Mine, it's one of Canada's highest, but probably one of North America's highest grade gold mine, probably one of the highest grade gold mines in the world.
It is, I mean, it right now, it's, you know, it's produced over four million ounces at 11 grams per ton or even higher. I mean, and there's still significant life left at Hoyle and there's significant exploration upside at Hoyle Pond. And then you have Borden Mine, which is a fairly new mine. And at first you look at it and you wonder, well, is it mined out or is it out towards Chapleau. It's not in the traditional region north of the Porcupine-Destor. And it's not quite where Hemlo is. But if you look at it, you own the whole Greenstone Belt and, you know, it's got all the right markers geologically, the right alteration, the right structures.
You know, we got people in a room here, Eric Kallio here, Gernot here, who have significant more knowledge and things in terms of excitement in terms of what we could do from an exploration point of view out there. But we might not even have found the deposit yet at Borden, right? To me that's exciting. We got Pamour, which is a new open pit mine, which is an open pit mine on an old underground mine. Excuse me. It's an extension of an old open pit. You know, the Pamour open pit mine, I mean, and we'll show you, we did a PEA. I mean, it's 3.9 million ounces at reasonable strip ratio, but graded like 1.3, 1.4 grams per ton.
A regional strip ratio under five to one. Infrastructure is already in place in terms of processing and et cetera. So you don't have to invest a lot in that from a CapEx to get it built. And it's already got a mine life up to 2041, but it's probably only half the pit that we're showing you. It may even be only a third of the pit, depending on what we do. We can move a railroad track. I'll show you some stuff. We do some other things, do some more drilling and see what's there. And then, you know, even talk about the exploration upside. I think Pamour is probably one of the more exciting exploration opportunities in the camp. We talked about that.
And then you have Dome, which is the longest running underground mine in the region, right? Over a hundred years of underground mining at Dome. And it's still surprising where you know you can still come up with a fairly large resource. 11 million ounce inferred resource. We don't know if that's the total resource we can mine. We do know that that doesn't go down throughout that deep as the project goes. But we know there's significant upside. There's something there and there's something that can be produced. And as John Tumazos said, you can it wouldn't be hard to get that thing in production, right? And Eric's here. Eric's got a lot of history and knowledge of Dome and in terms of what can be done there.
Yeah, this was again just some summaries that came out of our PA with 3.9 million ounces of resources being mined and you know another 12.5 and sorry, the PA total resource of mines was about 5 million ounces. Still got another 10 million shown here, but there's a lot of other deposits not even included in the valuation and came into the plant such as Dome, such as I'll talk about TVZ. There's I can talk to you about a lot of other deposits. But you know and again the upside is you're getting a lot of this. We're paying like maybe $25-$27 cents on the dollar to buy these assets. And you're getting a lot of the other parts in here.
All the exploration is free. All the things like the Dome is free, right? All the upside is free for coming into here. This is showing the production profile in, you know, at 10 years, about 285,000 ounces a year. Definitely, you know, we talk about, you know, increasing a mill throughput capability in here, but this is really just a view. We had the use of view coming out of Newmont's plant. It's got Newmont's cost structure in here. It's, you know, there's a lot of things in here that, you know, we see as being opportunity. I think I've made a few other presentations before it.
Maybe I'll say it again: if this is all we do over the next 10 years, you can give us a good swift kick in the butt because I think we're going to do a lot more than this. There's upside in productivity at each one of these operations. There's upside in terms of adding new production and there's upside in extending mine life. This is just showing you, you know, we're coming out of the gate with a profitable business, right? Even in the worst case scenario, we're going to pay taxes and generate free cash for shareholders that we can reinvest back into the operation. I mean, I don't necessarily have to go through this.
I mean, I can arm wave and talk about this stuff all day, but you know, where do we see upside? We, you know, as I said, we think we can extend mine life, we can increase productivity, each one of these assets, plus extend mine life, reduce costs, add new sources of production, such as Dome, such as TVZ I've talked about. And you know, we haven't even started drilling yet. And you know, it's a perfect storm in a company with what the new discovery is, you have the ability to grow value with diamond drilling and exploration success.
You got ability to grow value with good investment in development, investment in infrastructure, whether we're building Cordero, is a great project, you know, $600 million to build it. At these metal prices, $2.4 billion valuation. So, you know, you invest a dollar, you get four dollars. That's a pretty good investment, right? You got investment in Porcupine. As we invest in Porcupine, we can not only reduce costs, but actually increase production.
And then you have the other aspect where you're going to build tier one assets that are, you know, the whole goal here is to be the low cost of the cost, low value portion in the cost curve that we can sort of set ourselves apart from the rest of the industry in terms of being a company that can survive. You know, I just come back from BMO conference and everybody was talking about, you know, everybody is saying, well, yeah, the gold is at $2,900, but the equities haven't, are still valued around $1,900-$2,000. Well, I mean, I don't mean to date myself, but I've seen ups and downs in gold price and all metal prices.
We got a plan for the low metal prices, not for the high metal prices. We are at high metal prices. What we should be doing is that doesn't mean we should let costs get out of control. This doesn't mean we should stop investing and just get into farming. This is the time when we should take advantage to invest really strongly and set ourselves up at low cost so that when the price of gold does go to $2,150 or $2,000, and I don't mean to be a Debbie Downer on that, but we're the company that's different than anybody else. I think that's and still be able to create new value for our shareholders.
This is just trying to go through what, where the opportunities and a lot of the opportunities at Hoyle Pond, Borden, and Pamour that we talked to. These aren't difficult. This isn't anything that's earth shattering. We're just doing some normal stuff. We've got a mill here and Gord's here. He can ask him questions about the mill. I think, you know, we have a mill plant. Actually, it's actually fairly well built. I mean, you got two circuits, which is neat. One's about 8,500 tons a day. Second circuit, about 3,500 tons a day. They're not running it at that level. They've allowed it to slip a bit, and rightfully so, you know, they're selling the mine.
So maybe they didn't want to invest back, but we, you know, there's at least another million, you know, we got a million tons of capacity back in this plant. It's going to add significant value. We've got to get the costs back down. The unit costs have gone high, gotten a lot higher than they used to be back in 2013 or 2014 when we were building the Bell Creek Mill at Lakeshore. I mean, I thought the costs were about CAD 11. Now the cost is like $23. So, you know, there's room to pull the costs down here. And we think we know what we would do and how we would get there. And it's, you know, it's going to take some investment. It's going to take some work, right?
And then, yeah, talk about new production sources. And this is where, like, again, talk about, you got this 285,000 ounce a year production base. I think we can, you know, a hundred tons a day increase at Hoyle Pond. That's a lot of ounces, right? And especially at those grades, a hundred tons a day increase at Borden is significant. There's that there. Another million tons or two million tons a year in processing capacity. There's upside there. So we have that. Plus we have new sources of feed. We have the TVZ zone just sitting there. I'll show you some slides of what it looks like. It's a zone that's been well studied, had been studied in the past, but just left because, so we said, well, the metallurgy is a little difficult, right?
And it grades seven, maybe seven grams, right? So it doesn't shock you at Hoyle Pond because it's not 11, 12, or 15 grams. But it's a significant deposit and it's got significant upside. Similarly, there's the whole Dome. So if you take those two and just bring them online with what we got here, you're easy at 500,000 ounces. And you got over 100 million tons of tailings in the area. Some of the tailings are in legacy sites. Some of the tailings, these tailings areas are set up as being liabilities. But some of these tailings are one to two gram material, right? No zero strip ratio, no drill blast, right?
You know, there's this, you know, so you take a liability, you turn them into assets and we get to do things like help in terms of progressive rehabilitation and cleaning up a lot of what's going on here, so, and then, yeah, there's actually, maybe I'll just show you some exploration slides. This is, to me, we're at the PDAC and, you know, we can talk about mining all we want, but the exploration is the story here in terms of what we're looking at. This is where the TVZ zone sits at Hoyle Pond. So this is Hoyle Pond where the mine sits underground right now. Currently, you've got the blue is showing extensions of mineralization. This has to be continued to be explored at depth. Sorry, I'm kind of messing this up. I'm not making you dizzy.
You know, so that's where the TVZ sits in relation to all the different veins. And you can see the exploration upside here at Hoyle. And you know, there's a lot of these zones. Some of them you just have to go back in with a jackleg and a stoper. Some you got to say, we're going to mine three meter wide instead of five meter minimum mining width. We're going to mine them narrower. There's significant things here that can be mined, right? Even two and a half meters. This slide here is really, to me, one of the better slides. This is you know, the Hoyle Pond mine. And you know, this is the original Hoyle Pond mine. And actually the Hoyle Pond deposit sits about right here.
This was really the 1060 deposit that sits over here. And then as you went to the west, you know, out this way, we had mineralization, but never really been followed up on. You got Owl Creek, which was, you know, started as a small pit and then it started, but you got grades like this underground at Owl Creek, you know. And I can tell you that, I mean, it's never been followed up on, right? We just said, well, it's refractory. Let's just walk away from it. Same as TVZ, it's refractory. Let's walk away from it.
When I was a manager of Hoyle Pond, the 1060 zone, which was our main production source, or sorry, half of our main production, we were getting Hoyle Pond produced about 75,000 ounces from the Hoyle Pond veins and about 75,000 ounces from the 1060 veins. The 1060 veins were all refractory. There were three veins. One, you got 50% recovery, but it was 20 grams. The other one we got, the other two, you didn't get more than 80% recovery, but you always got 25%-30% gravity recovery in each of them. The TVZ zone, you got 25%-30% gravity recovery. Maybe this needs to be looked at. Maybe it's been looked at as bulk. Maybe it's a couple of really high grade veins, similarly to Owl Creek.
But again, if we go by time, back then we had a thousand ton a day mill that we expanded to 1,500 tons a day. We had a mine that was producing 1,500 tons a day. So if you had 1,500 tons a day of 18 gram material, you're not going to chase anything that's five or seven gram. And the real thing about it is 25 years later, they never chased it yet, right? So there's you know, the exploration upside at Hoyle is good. You have a deposit that's still open at depth. So you know, what's the depth? We're showing this stuff on surface, but what's the depth potential here, right? And I did have the pleasure of working with Dynatec at the Goldcorp Red Lake Mine, at Dickenson Mine , right?
Dickenson Mine ran for 40, 50 years, 0.35 ounces per ton, right? Campbell, we were next door, 0.6 ounce per ton. They were always a poor sister. It was on the 4,350 feet below surface. And the zone, the high grade zone was no bigger than this, the width of this room, not as thick as this room, no bigger than the width of this room at 4,350 level. And that zone continued on down to 8,000- 9,000 feet, produced over 8 million ounces. So, you know, you don't know what's here yet, right? You got to explore these deposits. And then you got Borden. This is showing Borden. And, you know, Borden, you know, we don't have, I don't think we have quite everything here. We know there's open pittable resources at Borden.
There's, you know, the deposit continues to extend at depth, but there hasn't been, you know, it's in a somewhat of a folded sequence, right? Am I correct there, Gernot and Eric? Right? Folded sequence, a lot of the right alteration. Nobody, no looking for, is there a second one below? Is there a second one parallel? What's happening here as you go? It's just been following down at down at depth. Sorry. So, you know, you can see the density of drilling, very minimal density of drilling as you go further down plunge, right, on the deposit. And then there's Pamour, like I mentioned to you earlier about, you know, it's just showing you the where the current pits look like. This is the railroad, right? It's right there. Right there.
And the railroad is only being used to support a little load out right here, which is a company that takes cement delivery, custom concrete, which is a supplier, and somebody who works here that ships out the sulfuric acid that they get from Kidd Met Site. You can move those to here on the rail line. Easy. And then if you, you know, so then if you again think outside the box and you drill, is that there, right? I don't know. But that's not just the case at Pamour, right? Actually, before I get off this even, I talked to you about liabilities and synergies. So, I mean, this is Pamour.
This is one of the liabilities, is the tailings area, the old Broulan Reef tailings area. The grades are better than a gram. It's a liability. You can either cover that liability by going across the train track instead of storing the low grade or the clay tills over here. We can store them over here and cap that and clean it up. Or we can take that, reprocess it, send it to the mill, right? And clean it up. And then, you know, you probably want to do that because we're probably going to extend a pit across there anyway. So is it a liability or is it an asset, right? Anyway, this is the Pamour underground. And I won't get too much caught up in here.
I know it's a little bit of arm waving, but the Hallnor deposit, which is one of the deepest, highest grade gold mines in Timmins, it sits about right here and down about, you know, about 1,700 meters and open at depth. The Hoyle Pond mines, a little bit off structure, sits over here and down 1,600-1,700 meters and open at depth. And no drilling. Right. And on the other side, really, you know, I know there's some difference in geology, but a lot of the Pamour sits across in the contact between the sediments and the volcanics and not a lot of work deep into the volcanic sequences, right? Am I a little bit too arm waving there, Eric? Anyway, so you can see the exploration upside and this is showing you.
So as much as this is a great production story, much as a great cost story, this is, you know, an year and 100 year old camp, one of the best 100 year old camps in the world. There's still lots of exploration that could be done. And yeah, this is just showing where the current Dome pit is. This is the mill, current mill. That's the current pit. And this is the underground mine. I could turn on the resources here in terms of where the resource is here. And I think if I do this, I could probably do something where I do. And I guess you could, you know, there is talk about, do you mine out the mill? Well, yeah.
If you look at the red things, you eventually do mine out the mill, but you don't mine out the mill in the first five years, ten years, right? But there is potential for a much larger pit. And then there's still upside potential as you go deeper and look, look at what else is here to do. So, you know, is it mined out? We definitely at these gold prices, it's not. And definitely the way of thinking, right? So this is just showing you, show you the pit line line. Yeah, this is, this is where the mill is. At some point in time, some of this can go. Definitely, we know we had the talks about this is, you know, depending on what you do, this is the crushing plant.
This, you know, that this could all become redundant and converted to a SAG mill. So you could, you know, do all the work you want to do around a pit. It's only when you want to do pushback in this area that you get concerned, right? So, you know, there's ways to structure it that you can keep things going over time. So, and we got other deposits, other places to look. Like you got Dome, which became an open pit, underground mine, became an open pit. We got Hollinger underground mine, became an open pit. You got Pamour underground mine, became an open pit. What about Aunor? What about Delnite? What about McIntyre? Actually, as a matter of fact, McIntyre.
I mean, if you really look at the camp, and if you look at this, maybe I better do. We can do this. If you look at the camp, I mean, the heart of Timmins is right here, right? We do have some. I don't think I have them on here. We do have some slides that talk about, that show what the underground is between Hollinger and McIntyre and what can be done. There's deposits, underground deposits accessible at McIntyre that have not been accessed. There's a community above. Hey, you know, Osisko had a vision 20-25 years ago, moved the community. You created a world-class mine. Sometimes these things have to happen. Maybe it's Timmins 2050. I guess part of what I'm getting at here is we see a vision.
You can see where you can be mining and growing production here and mining to at least 2050. And you know, I don't know what the people after 2050, somebody else can take this to 2075, 50,000, but there'll be a lot of gold mining in Timmins and a lot of success built here. I think. I mean, just a couple of quick slides, you know, sustainability and stewardship. I mean, we've got a track record. You definitely have managing your social license is important. I mean, we live in these communities as well. And it's our families, it's our, you know, it's our relatives and it's also our friends and neighbors that live in these communities just like us. So, you know, I like to treat everything we do in the same fashion.
You know, you want to recruit your people from the communities. You want to have your supply and your resources done from these communities. That's what builds, it helps to build and keep your costs down and build the legacy you can create from these communities. But also, you know, we also got to be responsible in terms of, and stewards in terms of how we manage our, you know, what we do.
And I talked to you a little bit about we do progressive rehabilitation, like I was just saying that Broulan and tailings, but even how we do Tailings deposition, a strategy around breaking it up into cells about going to high density or even dry stack tailings, trying to do things that minimizes our, the long-term impact of what we do, be able to do reclamation as we progress. So don't, you know, don't leave your dirty socks by the front door for two weeks and then pick them up only on when somebody's coming over. Clean, keep your house clean all the time, right? Keep everything in order.
Create that type of environment and then you can not only, you know, in the long term, you reduce costs and improve what we're doing here and really give ourselves a social license. I always, you know, I come from the mining industry, a child of the mining industry. We don't get the respect that we should get. We're the good guys. I used to say the good guys, we're the good guys and girls or the good girls and guys. We do a lot of good stuff. We got to start getting recognition for it, but we also got to demonstrate that we can do things right.
And then I don't mean this, you know, I don't just have one slide here on Cordero because we, you know, that's where it sits in terms of portfolio. It's just that this is a theme of what we're talking about is the new acquisition and the start of a new company. But again, with Cordero project and we got José and Roman here, they can talk to you about a lot of things, but this is a world-class silver project, the best, to me, the best silver project undeveloped, globally. And it didn't matter if this was a silver project. This could be a base metal project. This could be a gold project. This could be a lithium deposit. This could be a, you know, you name it.
This is a perfect project to build. It's located in sparse land. No community interaction that you're not going to just place anybody. You're going to have an impact on the environment, but it's going to be minimum impact on the environment. There's no acid generating potential. It's a buildable project, and it's buildable. Like it's a two and a half year build with a reasonable CapEx, definitely well understood scope. And I mean, that's where a lot of times these projects go out of control and where you have a lot of CapEx growth because the scope changes. This is one where you pretty much know what the scope is, right? Technically, the scope is easy to define.
There's no water courses. There's no water bodies around here. There's not enough stuff to deal with. So this is a project that should be built for a lot of reasons. One is it creates value, value for shareholders and from an investment point of view, it creates lots of value for the communities and you train people. It's a long life asset. It produces the right mix of metals for what the world needs. And it also provides, you know, community, you know, it pays a lot of taxes because it's going to make a lot of money, which is a good thing about what really mining is all about. So anyway, I, you know, I probably should leave some room for answers.
I know we got a friendly crowd, so maybe I didn't have to manage time so much, right? Didn't have to look at a clock second down, but hopefully, we kept it interesting. You know, I think this, again, it's a time where we get to start to spawn the build of a new Canadian gold company. We don't know what it's going to be called. It's just called Discovery Silver today. It's not a bad name, but, you know, we have to make sure we find something that we can do that can lead us into as we go forward. Maybe we just call it DSV Mining and Metals, right? Keep the same stock symbol and we go forward.
So anyway, I don't know if anybody's got any questions or thoughts. We'll cause them to put up the hand first. Sorry, John. And there's a lot of people up front, so they might have to answer the questions.
Thanks, Tony. This is a pretty simple question. So I don't know if you need any backup for it, but in terms of arm waving, Tony, you talked a lot about different opportunities in terms of exploration opportunities at the different deposits. I don't know how much you can tell us at this point in time, but what's the criteria behind how you're going to prioritize some of these exploration targets? Is it going to be grade? Is it going to be proximity to your mill? Or is it metallurgy, as you said, some of these deposits might have a refractory nature to it? Could you maybe enlighten us in terms of how you might prioritize some of these targets?
Well, I mean, first and foremost in terms of targets, and we've had it, because we have a plan. We sit there and say, first off, we need to understand better. We like to understand the current resources we have better, right? So we, you know, you want to drill within some known resources, known areas, upgrade the quality of resources. There are some areas within the existing mines that I think are near-term production. I think that's important. So drilling within Hoyle Pond, within Borden, within Pamour, within these assets, I think it's going to be really important because that helps us in the first few years.
Part of that question goes on as we progress, right? The other thing is, you know, when we talk about grade, it's not necessarily grade, it's margin, right? It's sort of like, you know, I know when we picked up Detour before, we got criticized, got sued for being in a low grade, low grade gold mine. We're supposed to be a high grade mine. Well, actually, Detour was a high grade gold mine in an open pit sense, right? It's all about margin. It's all about value. So it's not going to be about just growing and getting bigger for being bigger's sake. It's going to be about how do we bring things on and create more value. You know, there's a lot of synergies and other things that we can extract.
I haven't even talked about that in the camp, right? And some of that, you know, maybe we can keep it as we go. But, you know, if we can extract some synergies and everything, they can just build upon it, right? So I guess the short term is we've got to stabilize and, you know, first year or two, understand what we got, use that to help grow and get this, how do you want to, we're highly predictable production. But in terms of grade, it's really all about, first thing you want to do is stay within your existing operations that feed your existing mills. And then second part would be what might feed some of the synergies we have in terms of our plan.
But, you know, I look, look at, look at it in terms of how big can the deposit be and what's the margin's going to be, not, not necessarily what the grade is, right? So, John,
Tony, some of us might not have been to Timmins for a couple of years or vividly have it in our mind. Could you put the Timmins photo back up and walk us through what are the community sensitive points? Where is the 2,500 seat McIntyre Hockey Arena? Where used to be the Shania Twain Centre? Maybe that's not really so important.
But Shania Twain Centre is, is in, is in the Hollinger open pit right now.
Right. But where,
where all do I have that slide here, Mark? Where are all the, you want to camera? You should be, you can't zoom it.
I don't know if that, that'll go enough.
Walk us through the community sensitivities first and then where you would have to, where the houses are, where you would need approvals to put a 20,000 or 50,000 ton a day grinding mill if you were going to make it a big camp.
If we're going to build another mill at Dome, I mean, I can show you Dome, but that's, it's sort of this is Pamour. So first off, maybe I'll talk to you about, you can see there's no real community involvement around Pamour, in this area, but it's somewhat away, right? But just to give you, this slide doesn't really show it, will it, Mark?
No,
No. This is the Kidd Met site here. That's a met site, that's a tailings area. That's a Kidd Met site. This is Pamour. Talk about synergies if you can ship your ore there, right?
Versus all the way. So go to Dome. The town is south of here. The town is like five kilometers from here. You're in the Porcupine. Oh, sorry. If I go this way, so you can't see what I'm doing with my finger. If I go this way, the town of Porcupine is about 2,000 people. So I go this way, town of South Porcupine is about 4,000, 5,000 people, right? But it's about three, five kilometers away, right? Not very good writing, sir, but that, and the town of Timmins is still like 20 kilometers away from that, but I don't know if I have that slide in here, Mark.
Go to Dome. I might be able to show where you would, you know, you could land in mining surveys.
If I could bring up a, yeah, in terms of Dome, like this is a Dome and you can see there's no community necessarily left around Dome. South, South Porcupine is right here. Oops! I'm going backwards here. So this is the town of South Porcupine here, right? This is the Dome, the Dome pit and everything would sit sort of right in here.
Where's the hockey arena?
The hockey arena, well, there's a hockey arena and the real hockey arena, depending on who you talk about it, one of them is right there. That's the Porcupine Arena, that's where Frank Mahovlich played and all those guys. But the other one is in, in McIntyre Arena is in Timmins. So maybe, maybe I can see it here. Yeah, you know what? There's Schumacher. And the hockey arena is right here. Yeah. Yeah, there's the town of Timmins. Sorry. That's Hollinger. So the McIntyre Arena is probably sitting right there.
It's in between the two lakes.
And the McIntyre Arena is sitting right here. Sorry. Yeah, right there. That's McIntyre. This is where Loon Lake and there never used to be a lake after it . And then this is the Hollinger pit. But if I were to show you the underground, do I have an underground on here? I don't know if the underground's on here.
I'm not sure whether you'll get it. Oh, you'll have it.
Don't have it on that slide? And if you wanted to build a big mill, 20,000-50,000 ton a day and attack the 11 million ounce inferred resource, there's really not a community restriction. It's really infill drilling and capital. Yeah, yeah. It's infill drilling and capital.
But there are other opportunities, John, like there is, without, well, there is, yeah, maybe I can, maybe this will show enough of it. No, this won't show enough of it. I have to go back to the Pamour. So there is the Bell Creek Mill. There is the Kidd Met site. There is the Kidd tailings area that needs, it is 140 million tons, 170 million tons of acid generating tailings that needs to be covered with 140 million tons of gold tailings. Right? The processing facility right there, you could build it, you could build a processing facility there. There is power, there is everything here. You could build a refractory circuit right there. There is a flotation circuit there. That is just being shut down. Right? So you got 2026. Right?
So there's lots of opportunities, but you could build, you know, at the same time, you could build right now the Dome, the plan that Newmont had and Goldcorp had is this is the Dome Mill is sitting right over here. Right? So it's trucked about 14 kilometers, am I correct there? Yeah. And it's trucked over to here, right? So, and is this at the Bell Creek Mill? It's about six kilometers away, right? And there's the Kidd mill, which is one kilometer away. So, you know, at the point in time when, you know, again, we, you know, you look at what's the best way to create good business, right?
And that's, if you look at the history of Timmins and a lot of mining camps, you know, there's 50 gold mines in Timmins. There'd be 50 companies. That's why I have all these different tailings areas. There'd be, you know, 30 different mills and they're all gone by the wayside, but a lot of the stuff's there. This is an opportunity way now. You can own it all and have an ability to explore regional and look for things and not everything, all outcrops to surface. Sometimes some stuff starts at 4,350 feet below surface, right? So.
Thanks, Tony. It's me again. Before we go down the path of building a new mill, could you maybe talk about, you know, the current capacity at Dome? And as you mentioned, you circled Bell Creek. You don't own Bell Creek. You used to. Mm-hmm. Kidd Creek as well. Can you talk about the area opportunities in terms of sort of continued consolidation?
Okay. So first off, we talk about Gord here. So I'll start. And if I want, you can get Gord to really get involved in talking about the underground. But you know, this is actually a good slide here. Good spot. So this is where the Kidd, where the mill is right now, currently sits. The mill sits right in here, right? Yeah. Right? The mill and you know, right now with the way the mill works is still tied in with the old underground infrastructure. The old number eight shaft is sitting about right in here, right?
So the crusher, the actual jaw crushers right here, everything gets sent down a raise from the jaw crusher and gets conveyed up a conveyor way to a final bin sitting here. And it's conveyed. I don't know what that distance is, kilometer and a bit, two to second stage and third stage crushing. So two cone crushers sitting here, you know, recirculating lower back and forth this way. And there's the mill, right? We could take all this out, probably drop $10 a ton cost, put in a primary crusher here at this location right here, and then maybe put it into a SAG mill, maybe a few tanks they go at, maybe a thickener, and you could be a 25,000 ton a day plant right there, right? And it's, you know, what's the cost of that?
Maybe it's $60-$100 million. What's the payback? One year. And you're going to reduce $30 million of environmental liabilities by getting rid of this stuff. And you're probably going to get, you know, $5-$10 million worth of gold when you clean up all this stuff just by cleaning it up, right? So it's opportunity. And you know, you could do that, like you say, and yeah, eventually the Dome pit might mine it up, but if you do that, make that investment in 5-10 years, you get your money back, but you can make a lot of money till you make a decision on what to do there. And we might be able to do some of that on Dome underground, from underground, right?
Could be. Go back to, they did a lot of, like, basic caving at the time at the Dome. You might be able to do some of that. You don't want to cave underneath your mill, though. That's for sure. Don't want to, and that's happened to Teck-Hughes mine in Kirkland Lake. We don't want that to happen to us. Right? But that was the first question, right? Then you asked you to talk about consolidation.
Yeah.
Yeah. So again, I mean, there's mines in different parts of Timmins. There's other, sorry if I'm making this go across too much. So I mean, I go back to here where the mills are. Oops. I don't know why I can't get this to go properly for myself. Sorry about that. Okay. So this is one, a really good shot, right?
Again, Dome Pit, Pamour Pit, Kidd Met Site, Kidd Tailings Area, Bell Creek Mill, Bell Creek Timmins Area, all kinds of exploration upside. This is that Owl Creek extension. This whole area here is all exploration potential. Bell Creek mine sits in this way, everything, you know. So definitely consolidation here would help, but you can, you could be taking alkaline tailings, covering up an acid generating waste, tailings pile. You could be using silty clays and tills to help you clean up environmental liabilities, right? You got a water treatment plant here. You can be diverting water from the Porcupine River, which is sitting sort of in here. You can divert that water here and clean it up before instead of any of these waters discharging directly into the Porcupine River. There's lots of synergies that can happen.
Tony, one follow-on, you know, it's been a while since I've been up to Timmins myself. How would you comment on the labor situation in Timmins at this point in time? You've had a chance since the announcement of the deal, I'm sure, to go visit Timmins. How would you compare today to the last time you operated in Timmins in terms of market tightness, in terms of opportunities, in terms of inflation, anything that you can comment on?
Well, I mean, in terms of, first off, I mean, you know, we date ourselves, some of the, there's a younger workforce now that we've seen. Some of them are kids and even grandkids of the people that you've known when you were younger, right? So to date ourselves a bit, right, Gord? Right.
The other part though is it doesn't mean that the skill and the abilities there. I think there's, there's definitely a motivated workforce. They've been, they've been sitting somewhat unloved for a few years and there's a lot of opportunity. There's some people that have retired that probably we could probably get back into the workforce to be good mentors and help, help others to come back. It's a, you know, you got 525 people coming with this. They're all well trained, you know, Newmont trained the people there, trained the people well and trained them well. And so they're well trained, you know, good safety, good work ethic, good safety record there.
I mean, the wages and et cetera, I mean, you know, you're, it's competitive in terms of wages for people, but one of the benefits, one of the advantages you have, an in-town operation where you can have people that live in the community. There are other operations around, some fly and fly out, whether it's Côté Gold, whether it's Detour Lake, there's other things around. Borden is more of a fly and fly out. You know, the one advantage of being able to be more regional and sorry, look at that camp or stuff is that you can recruit nationwide as opposed to just recruiting in the region. But I mean, there's a lot of good skill set in the region. Definitely, you got to train.
There's a community college there. You got to train. You're going to have to train, you know, apprentices. You're going to have to continue your training program and bring new people on. But there is a fairly young workforce, a lot younger than I would have thought it was, because they did have somewhat of a turnover in the workforce. But, you know, that's on Gordon Duncan and you guys were there. I mean, I don't, and Pierre, I don't know what you're feeling on the workforce.
Like you said, there's people I hired there in 2002 that their kids are now working in many of the mills. Pretty funny when you, with Stinson who you belong to. Yeah. It's crazy.
Hey, John. Okay. José, Roman, José. You got a microphone?
José, José Jabalera, José is our Vice President of Corporate Affairs and runs Mexico. Go ahead, José.
Yep. We're still working on the permits since the EIA has been submitted. And now Mexico started to release permits for mining lately. So we are online. So we're hoping the first half of the year we have the EIA approval.
Yeah, I think, you know, there's been, again, not speaking on alternative, there's been, you know, progress. First off, there's been no negative discussion about, well, we want a bad mining, a bad open pit mining. As a matter of fact, that's not been on the table. That's a, I recognize we do need investment.
The second part is we recognize, you know, there's three projects that have been brought forward for approval for investment in Mexico. You know, what do we have, Cordero? You're investing $600 million-$700 million, two and a half year build, going to employ 2,500 people, jobs that we're going to pay four to five times a minimum wage, so higher wage than national average. We're going to do, you know, pay like $1.2 billion in direct taxes to the community, $800 million in that tax, other taxes to the region. We're going to take 80% of our suppliers from the area. You're going to employ 1,000 people for over 22 years. Just happens to be an open pit mine, right? But I think there's a lot of social part about it.
With the water, we've secured water, we've secured power, we've secured the land and all the aspects of it. And in terms of our project, we, yeah, we got to get a permit. Right now it's probably just waiting for approval, right? And somebody wants to get everybody involved in tariffs and everything. Maybe there's other things people are focused on, right?
Tony, could you break the 11 million ounce Dome resource into the underground and open pit categories? It sounds like it's really two or more projects, not one project.
No, that's all, that was an open-pittable resource. Am I correct there, Eric and Gernot? That's all went within a Whittle pit shell.
So that's how much is the underground on top of that?
Oh, we haven't even, you know, the underground still continues on. You could decide to do some of it by open pit, some of it by underground. That's a Whittle pit shell, right? Yeah. That's an open pittable resource.
Yeah, they got it. They're showing the pictures with the proposal you're doing on it. So none of the underground has been considered in that 10.9 million ounces resource. And all those grays that you saw in the slides were outside of the mined-out stopes. So the disturbance data is already defined minable stopes underground. But we have to work on optimizing the underground.
Yeah, see, so it just, all the resource is incorporated within the red pit. Sorry, I didn't. Yeah, it's all, it's a pittable resource. It was done, I think, five-to-one strip ratio of five and a half somewhere.
Evaluation was based strictly on the open pit, because of the time frame mostly. But I mean, with a resource like this, we know there's high grade pockets and, you know, they were mined with a whole bunch of different mining methods. Some were cave stopes, like Tony mentioned, some were narrow high grades and that sort of thing, and often when you have a project like this where you have high grade pockets, there's always a trade-off studies done. You know, people look at, well, what's the best value pit and what's the best point to start the underground? We haven't done that, and that's going to be an important part, I think, what we do.
And that's where I said, John, like the mill doesn't necessarily have to disappear to do this pit. You could, you got a good five million ounce pit you can run before you even have to move that mill if, if you want to. And or you can do some combination underground, et cetera. It needs to be studied. That's all. We'll drill some holes, get a better understanding of it, do some, you know, the easy thing is you already have, if you needed to get back underground, you can get back underground pretty quick and take a look at some of this stuff, right? And that's here. If I showed you what Hollinger and McIntyre looks like, you'd get even more excited, but that's another story. Yeah.
Tony, you didn't know what your priorities are going to be for exploration that I both, but let's imagine that it's inside of the next six to 12 months.
I think, as Tony mentioned, I mean, there's the projects we're focused on eventually will be the ones that we think add the most value. But I mean, there's a lot of different targets to look at at each of the properties. And I think that, you know, some of them are going to be high grade type of things that can contribute to, you know, to the mill scenario. Some of it's going to just add more bulk. But I think that we're going to have to go through the list of targets to see what adds the most value.
But I think that we also, at the same time, a big part of it is, is building up the replacing resources and reserves, reserves on an annual basis, because Newmont was really not doing that. I mean, when they left, I mean, we've got to, so big, so initially we'll be doing work to, convert, inferred, expand that in the mine, make sure we got that fully under control, and then, look at high grade opportunities. But then the Dome is going to be a big thing, the TVZ, I think those are probably, and Pamour, I mean, I mean, we wouldn't, with that, that's already a handful.
Yeah, I guess, you know, if you're looking at deliverables for 2025, I think first off, we got to become a PEA, we've got to come up with a PFS.
So we got to understand Hoyle Pond, Borden, and Pamour within the existing resource and mine plan. That's one deliverable. Second deliverable, though, you got this big opportunity at TVZ. We got to, I think we should bring that forward. Third deliverable, you got this big opportunity at Pamour, at Dome. We got to bring that forward, right? And then, so if those things are 2025 deliverables, and then 2026 would be advancing those, but then, you know, we talk about Pamour and that whole extension of Pamour and what we can do there. I mean, you got to move track and stuff like that, but you know, we got drilling there. You got this, I mean, I don't know, there's too many places to drill. We got to focus, right?
But you know, you got this whole area, you can find a whole new deposit here. You got Pamour Deep, yeah.
If you bought a slice 24, you could demonstrate the Dome underground potential, better than we saw.
24? This is Hoyle Pond. That's like 24.
24. I got a live presentation. If you come below this, if you look at, we got a slide for underground.
Underground potential at Dome?
Yeah, it just shows the Dome. Yeah, there you go. So those are the holes that are outside the mine. Oh, yeah. So that's what illustrates.
There's a lot to do. I mean, we talk about, and rightfully so, like a $50 million USD budget for exploration, right? We can spend more money in one or two years here than been spent in the last 20.
And you know, actually, Simon sent me a note about, you know, somebody in Australia, but they didn't. Same thing, you know, imagine what you can do with a drill bit, like, and you know, and diamond drilling, like. We, there's so much value creation we have with that, that we can bring forward. And then the diamond drilling supports your development plans. And then, if you invest, if you build proper mines with proper mills and keep your costs down, then you run profitable businesses against the low cost of the cost, half of the part of the cost curve. So you're making money three ways, right? Making value three different ways for people. Right now, I think there was a lot of focus on one way to just farm it out.
We got and we come back to first principles here. Okay. Let's go ahead, John.
Don José can ask you a question about the Mexican economic outlook or social outlook.
José?
10 days ago, Mexico reported 0.6% decline in GDP, and they blamed it on an 8.5% decline in farming, fishing, and mining. I don't believe that. And I don't want to insult Mexico, but in America, we underreport inflation 3% a year. So I think for 20 years, America has negative GDP. So if I question the Mexican statistics, please don't be personally offended. So my calculation is human trafficking is 6% of GDP, but they don't have a category for that. And then there's drug movement, and then there's legal things from that, from the trade agreement, where if Trump closes the border, the GDP goes down for that too.
So what do you think, because of the economic impacts of closing the border, do you think Mexico opens their arms to mining, to have legal commerce, or they have some kind of socialist rhetoric? Or what do you think comes next? With the coyotes can't move people, what do they do next?
Well, personally, I think that Mexico is open and they are trying to get investments. They are open to mining. That's why you start to release permits of modifications, expansions, and things like that. And they are talking about new mines right now. We know that they are talking. And yeah, it's an opportunity because they know that mining will increase jobs on the outside the big cities. People, it's coming back from the United States, a lot of people. So they need to create jobs.
Well-paid jobs is better for them, just not manufacturing jobs. So yes, I think that that Mexico will open and start to open and will open arms for investment, for mining, for other industries to keep the economy running for, for Mexico. Yeah, it's a lot of threats or things around the, the globe that Mexico need to go ahead. And I think there is a, a smart president that it will start to, to move on, on those economic and attract investment and do things right the way in Mexico.
José, can I follow up on that, some of the three priority projects for the Mexican. You mentioned there were three priority projects, of which Cordero is one for the Mexican government. Is, is there a timeline? Is there a process by which the government's moving these projects forward? What does that mean for Cordero?
We know there is a committee, an investment committee that leads the president, Sheinbaum. So the approval and the talks are around President Sheinbaum, Marcelo Ebrard, the economic branch around that. And we don't know certainly yet the process, but the president will approve. We know that the president will approve the permits for new mines in Mexico. And they, like we said before, it's a lot of pressure for investment, for creating jobs and things like that. And they got those priority or those numbers on the desk. So we know there will be soon.
And has Discovery got anything else to do to get Cordero ready to comply with government requirements for a permit?
Yeah, we already comply all the permits. That's why Cordero is on the desk, all these three projects that they said, because the opinion on the government is they completed, they are ready to go. We hope that they are right, all the things are completed and right, and it's approved or pre-approved. That's why it's in the last decision to just that. We believe that it, all the things are evaluated before, and they said it's good for it, good to go.
Yeah, so from SEMARNAT perspective, we have, there's no more technical questions and nothing, they're not asking us for any more. They said, okay, we pass it forward. And the Economic ministry is saying, we understand what you're doing. So there's nothing else we have to submit. Now it's just waiting for that approval.
Thank you.
Okay, so go ahead, Roman.
That's correct. We submit all the environmental formats to SEMARNAT, but basically we update them with a social license that has been done in the last two years since we submitted the EA application to SEMARNAT. So that's basically what's been done.
Within the town of Parral, we got full social support. Within the state of Chihuahua, full support, not just at the federal level, right? Yeah, so it could be an exciting time. You know, we're in the middle of closing, just get this thing closed at March 31st at the maybe price of gold, $2,900 an ounce. Like, you know, pitter patter, let's get at it, right?
And we do that and then we get our permit from Mexico and we know how to get that financed and move forward as well. You got the chance to build a company that could be, you know, as I remember having a discussion with Eric Sprott, maybe a little bit more forward looking with Eric Sprott here, but he was really excited and you know, you can. This is a 10 bagger, right? There's a lot of upside in terms of what we're going to be a $ 10-$12 billion Canadian company and four or five years from now. This is a unique opportunity and we're definitely pretty excited.
Like I say, there may be a lot of seasoned people in the room, but as I said, youth is wasted on the young. There's a lot of youth here. So, right? So, anyway, thanks a lot.