Hello, thank you for standing by. My name is Regina, and I will be your conference operator today. At this time, I would like to welcome everyone to the Great Bear Project update. All lines have been placed on mute to prevent any background noise. After the speaker's remarks, there will be a question and answer session. If you would like to ask a question during this time, simply press star, then the number one on your telephone keypad. If you would like to withdraw your question, press star one again. I would now like to turn the conference over to Victoria Barrington, Senior Director of Communications. Please go ahead.
Thank you, operator. Good morning, everyone, thanks for joining us today. Please be advised that this presentation contains forward-looking information about expected future events and outcomes related to the Great Bear Project. For complete discussion of the risks and uncertainties which may lead to actual results differing from estimates contained in our forward-looking information, please today refer to page two of this presentation, the cautionary statement in our Great Bear news release dated today, February 13th, 2023, and the risk factors in our most recently filed AIF, all of which are available on our website, kinross.com. Joining us on the call today are Paul Rollinson, President and CEO, Ned Jalil, Chief Technical Officer, Nicos Pfeiffer, VP of Geology, Graham Long, VP of Greenfield Exploration. With that, I'll now turn the call over to Paul.
Thanks, Victoria. Before we get started, I'd like to respectfully acknowledge the indigenous lands of Wabauskang and Lac Seul, on whose traditional territories the project is located. Thank you all for joining us today. I'll provide a few opening remarks about today's exciting milestone and then turn it over to our technical team. I would also like to point out that today, along with the press release, we have filed a voluntary technical report focused on geology and metallurgy. We closed the acquisition of Great Bear on February 24th of last year, and at that time, we had high confidence that this property would become a world-class mine. In the 1 year we have owned the property, we have made excellent progress on drilling out this world-class deposit and releasing a substantial initial resource.
Today, we are even more excited and confident about the project than we were at the time we closed the acquisition. The drilling results have continued to prove out our thesis that the project could host a multi-decade, high-grade open pit and underground mining complex. On our Q3 Earnings Call, I highlighted one specific hole that I thought was particularly exciting as it demonstrated the mineralization we were encountering at depth. That hole intersected mineralization at a vertical depth of 700 meters. We now have a drill intersection at a vertical depth of approximately 1.3 km. With that, I'll now turn the call over to Ned and his team.
Thanks, Paul. Our focus in 2022 was drilling out the first 500 m of the LP zone in order to confirm our thesis of a high-grade open pit and underground mine. We drilled over 225 km, which when you combine with drilling completed by Great Bear Resources, brings the total drilling on the project to more than 560 km. The results are spectacular. Within 12 months, we have declared a 5 million ounce resource, 2.7 million ounces of indicated, and 2.3 million ounces of inferred. This validates our view that the LP zone can host a long life, high-grade open pit and underground mine. In addition to the diamond drilling, we drilled 35 km of grade control. This is a practice that is common just before production.
Nevertheless, we decided to bring this forward because this drilling is at a tighter spacing and provides a larger sample size, which increases our confidence in the resource model. The grade control drilling has confirmed our expectation that the abundant visible gold will potentially generate a positive reconciliation. We also have developed a lithology model and a structural model, which has informed the estimation domains and led to a deeper understanding of the mineral resource. This work has given us the confidence to release a voluntary technical report with a focus on geology and metallurgy. We've done more work than is typical at this stage. Furthermore, to confirm our hypothesis at depth, we drilled 1 kilometer plus deep holes which intersected mineralization.
I would like to share with you that last week, one of our deepest holes hit visible gold at a depth of 1,280 meters below surface. We're very pleased with the robust resource estimate. I would like to point out that this resource includes 140,000 ounces from Hinge and Limb. The resource was run at $1,700 gold price, which is what we are using for resources this year. It's important to point out that we have selected a $1,400 pit shell. We ran pit shell optimization and underground stope shape optimization. The open pit resource cutoff is 0.5 gram per ton, while the underground cutoff is 2.3 grams per ton. This high grade underground and open pit resource is only based on the top 500 meters of the LP.
The mineralization comes to surface directly below the overburden, making it easy for us to access the high-grade material at the start of the pit. This open pit has the potential to be one of Canada's highest-grade open pits, which again continues to support our view that the LP zone is expected to host a long-life, high-grade open pit, and underground mine. As we presented earlier, the resource was developed using a $1,700 gold price, which translates to a 0.5 gram per ton cut-off grade for the open pit material and 2.3 gram per ton cut-off grade for the underground. What is even more exciting for us is that most of the resource is high-grade material. We have this high-grade core.
If we raise the cutoff grade for the open pit from 0.5 grams per ton to 0.9 grams per ton, we get 3 million ounces at an average grade of 3.5 grams per ton. If we raise the cutoff grade for the underground from 2.3 grams per ton to 3.5 grams per ton, we get 1.1 million ounces at an average grade of 6 grams per ton. This resource, the high-grade resource of 4 million ounces, will potentially be the source of mill feed for the first 8 years of the project life at an average grade of 4.2 grams per ton.
We have not completed the studies yet. Assuming a potential 10,000 ton per day mill with a feed grade of 4.2 gram per ton and a recovery of 95%, one can see how this will potentially generate between 450,000-500,000 ounces per year. Thinking about the future, as Nicos and Graham will show, the deposit is open at depth. We go underground with the exploration decline and continue to grow the resource, we see the first 10 years of the open pit and underground complex transitioning to a large, high tonnage underground mine going forward. To visually demonstrate to you what I just covered, please look at these figures. On the left-hand side, you can see the block model with material above 0.9 gram per ton in red and the low-grade material in blue.
On the right-hand side, you see the high-grade material, only the 0.9 gram per ton and above. See how the high-grade core hangs very well together and how the low-grade material occurs around it. This low-grade material will potentially be able to segregate and stockpile. Let's talk about the resiliency of the pit to changes in gold price. As I mentioned earlier, this resource was based on a $1,700 gold price. Nevertheless, we have conservatively selected the $1,400 pit shell. If you look at the figure on the right, at a higher cutoff grade of 0.9 gram per ton, even higher than a potential reserve cutoff grade, most of the resource remain intact and yields 3 million ounces at an average grade of three and a half gram per ton.
Our intention is to continue expanding the high-grade underground over time, which, combined with the high-grade open pit, will provide the blended feed to the mill. Now pass it over to Nicos.
Thank you Ned. At the LP zone, we see a robust underground resource that complements the open pit. The deposit is characterized by wide mineralization and stacked lenses with exceptionally competent rock. With an average stope width of 6 meters and parallel panels, we envision high productivity, low development intensity mining. We see the initial resource as just the beginning at this project. We have drilled a series of holes below the resource and see mineralization extending to depth in high-grade northwest plunging shoots. Holes like BR-579, which was drilled last quarter and intersected 25 m of 15.5 gm, highlight the tremendous potential of these shoots sitting immediately below the LP resource. These initial drill holes have extended mineralization to depths of more than 1 kilometer vertically and will continue to be followed up throughout 2023 and 2024.
You can see here a view of our resource constrained by pit optimization and MSO stope shapes, as well as the design for an exploration decline we intend to begin developing next year. The decline will facilitate more efficient exploration of the depth extensions of our deposits and enable continued resource growth at LP, Hinge, and Limb. While this decline is advancing, we will continue to conduct deep exploration, resource development, and regional exploration from surface. I'll now pass the call over to Graham.
Thank you, Nicos. Our extensive 2022 drill program has demonstrated that our geological and structural analogy to the Hemlo gold deposit is reasonably accurate.
With the strong deformation corridor hosting mineralization continuing along strike and developing high-grade shoots that extend at depth. Mineralization starts at surface for all of the zones. When comparing the two deposits, our drilling has shown that the LP zone is more robust from surface down to 500 meters, and that the broad and high-grade mineralization we are seeing at depth potentially would coalesce as seen at Hemlo and many other mines of orogenic nature. The land package has potentially significant prospectivity, with roughly 20% of the 91 sq km property having been explored to date. Our 2023 drill program is intended to grow the inferred resource category to depths up to 1 km while simultaneously carrying out condemnation and exploration programs as we look to place future infrastructure and hunt for the next ore body.
Key exploration target areas will be the strike extents of the LP zone, and then as deep drilling will have us position drill collars further to the northeast, we will be testing the stratigraphy for potential parallel zones. Unlike the LP zone area, the portion of the property hosting the Hinge and Limb deposits are underlain predominantly by deformed basalt and interflow sediments similar to the units hosting the Red Lake gold mines. Detailed airborne magnetic geophysics shows us that there are numerous targets that resemble the Hinge and Limb structures that remain to be tested.
Thanks, Graham. The network also shows favorable results. The initial test work indicates a recovery of approximately 95%, with no indications of deleterious elements. With abundant visible gold found in the LP zone as well as the Hinge and Limb, our expectations are for high recoveries. Within that, another positive is that we expect 40%-50% of the recovery be by gravity. Our overall schedule for Great Bear is driven and subject to the permitting process. Our estimated timelines are in line with comparable Canadian projects. Environmental baseline activities are progressing well, and we plan to begin preparing the impact statement later this year. We are continuing to target start of production in 2029, with the potential for 2028 in the event the permits are received quickly. With that, I will hand it back to Paul.
Thanks, Ned. We are extremely pleased with the initial resource estimate and believe the best is still to come. We are targeting releasing the first details regarding mine plans and economics with the upcoming study results in 2024. In closing, let me say we are committed to developing this project through a genuine partnership with the Wabauskang and Lac Seul First Nations, and with full respect for their values and traditions. Thank you all for joining us today. Operator, we would now like to open up the line for questions.
As a reminder, in order to ask a question, simply press star then the number one on your telephone keypad. Our first question will come from the line of Anita Soni with CIBC World Markets. Please go ahead.
Hi, good morning. Can you hear me?
Mm-hmm.
Yes, we can hear you, Anita.
Okay. I just have a few questions, then I'll pass it off. Firstly, in terms of, a little confused on the presentation between the, you know, the elevated cutoff grade, and the baseline. That the baseline is done at $1,700 gold, right? The elevated cutoff grade, that was done at, I think Chris was telling me around $900 per ounce. Can you just explain to me the material that falls off because it used a very high gold. Sorry, a very low gold price there. Why is it included in the resource estimate? Why wouldn't you just not bother going after that material?
It seems like it's 0.6 gram per ton material in the open pit, and it's only, you know, 300,000 ounces. It doesn't seem like it's worth bothering with.
Thanks, Anita, good morning.
Morning.
As you know, we, as I mentioned on the call, for this year, we are using $1,700 for declaration of the resource. As the standard practice in the industry is that you report everything above the cutoff grade that the $1,700 gold translates to. The material that's in the low grade bin has to be reported. That being said, I wouldn't discount completely the material. You know
Mm-hmm.
The material is part of the open pit. We're gonna go through it anyways. We're gonna mine it, whether we mine it as waste, low grade, it doesn't really matter. We're gonna mine that material. The proposal or the vision for this would be to stockpile that material as low grade and, you know, whether it's 0.6% or 0.7%, that material could supplement mill feed in the future of the deposit, say in the next 10 years of the project as a supplement to the, for example, high grade underground feeds that would come from an underground-only mine at that point.
Okay. Second question. As I look at the resources that have been delivered in the open pit, there's shown there's a gray area, Sorry, the a brown area in the some of the, in the slide. Is that what your indicated resource shell is gonna look like in the mineralization that's at the bottom that's You know, that's what's gonna be mined out eventually? If so, could you just kinda give us an indication if the strip ratios are still coming in at 6%-8% to 1%, as you had previously indicated, I think in June?
You wanna take that, Nicos?
Sure. Hi, Anita.
Yeah.
Yeah. What you see the brown area there, that's our LG shell, so that's our actual resource pit shell. The material sitting directly below that, those are our resource stope shapes. Those are actually MSO stope shapes that we run to constrain the underground resource.
Okay.
With respect to the strip ratio, I can pass that over to Ned.
Yeah. Did we answer your first question, Anita, I guess, just to confirm?
Yes, I was just waiting for.
That is our pit.
Yeah, I was waiting for the strip after. So.
Okay, yeah. The strip ratio for the overall resource is approximately 7% as the number within the range you mentioned. As you know, as we start doing mine planning work in the next phase of studies, we will optimize this in the sense that the starter pit and the first couple of push backs will have a significantly lower strip ratio. The overall strip ratio for the resource for that pit shape that you see is the 7% you've asked about.
Okay. second to last question. The dilution that I should be considering when I move these resources to reserves in my model in the open pit is a 5%-10% level fair, and in the underground, a 20% level fair. Is that.
This is Nicos again. With the open pit, we reblocked the model, we actually have a 10x5x10 block model informing that resource. There is some amount of dilution already considered in those underlying numbers. With the underground, there's a minimum stope width of 2.5 m, we force our stopes to be at least 2.5 m wide, which is incorporating some dilution. I would guide you to go lower on your dilution figures.
I think you mentioned stope width of 6 m, you said 2.5 m minimum, but it was 6 m by something that I noticed that you guys.
Mm-hmm.
Yeah.
Yeah. The average stope width is six meters.
Okay.
We have stopes, you know, above 20 m. We're thinking about a pretty high productivity underground setup here. We've got multiple panels running parallel to each other, you know, you can imagine what that will do from development intensity and just tons generated from the underground.
Okay. The last question.
Yeah, Anita, this.
I think you threw out the 4.2 gram per ton material at 10- K ton per day. That's how you get to the 450-500. Can you sort of give us an idea of how many years of pit, at what grade do you envision and then how many years of underground at what grade do you envision?
You know, Anita, at this point, we haven't completed our studies. We're actually just kicking off the study work. We don't have the details between an open pit and an underground split that one would put in a economic model. That being said, back of the envelope calculation, you know, you look at the 3 million ounces in the pit, right?
Mm-hmm.
You look at the 1 million ounces in the underground as high grade. We have access to both materials at the start, at the potential start of a mine, because we're driving this advanced exploration decline early in the project. As such, you know, we have access to high grade material from underground and a high grade material from the pit. To bring to your attention this average grade for the 3 million ounces that you see in the presentation, we have the potential as we start the detailed mine planning work as part of the next coming phases of studies to elevate even that average grade higher in the early years.
As a back of the envelope calculation, we provided you with that chart so you can model the first eight, 10 years of the mine life.
Okay. I lied, one last question. This is more of a corporate question. You're using 17% for your resources. Is it fair to say that the rest of the assets will be done at 17 this year?
Yes.
Okay. Similarly, the reserves were, I would guess, 14 then?
Yeah, we're jumping the gun a little bit. We'll talk a little bit more about that later in the week.
Well, I know. I'm getting questions on why you're using 17% for your, versus the 16% last year, so. Okay, thank you.
Yep.
Your next question will come from the line of Greg Barnes with TD Securities. Please go ahead.
Yes, thank you. Just on the, your evolution of your thinking around how you develop this. I know last year we were talking 12,000-15,000 tons a day, biasing towards the higher end of that, you know, blending grade, stockpiling. Seems like you've moved away from that, lower tonnage, higher grades. Is that where your thinking has gone here?
Yeah. Good morning. I think, you know, as one go through the drilling, which is the first phase of a project and starts with the initial resource which we're doing right here, you go through multiple phases of back-of-envelope calculation. What we see today with this high-grade resource, we don't see the need to go for a larger mill. Again, we have not completed our studies yet. As such, we'll go through that in the next phases of defining what is the optimum pit size, what is the underground, where does it start, and we zoom in and lock in the mill size. With what we know today, a 10,000 ton per day mill, with the grades we're feeding is a very attractive for this deposit.
I think the other thing, Ned, though, which is we have the advantage here of really, you know, the time to really design this in a way that we have the flexibility. Our sort of cardinal rule here is never to build a mill that we'll be struggling to fill, because ultimately, this will be a longer life underground. We're trying to optimize the economics in the early years with the open pit, which makes you wanna have a bigger mill, but we're mindful of, you know, the longer term underground and not having an oversized mill. We've seen that many times where people struggle to keep the mill full and it really hurts you on the economics. We're balancing the two.
Yeah. Okay. That makes sense. I think, again, when we talked about this last summer, there was a fairly significant percentage of stockpiling going on of this lower grade material for later in the mine life. Then you'd blend it through. It sounds like that's still part of the plan, but perhaps less so.
Well, I think, I mean, Ned, I would say, Ned, Nicos, based on what we're talking about today, preliminary, you've probably got a minimum of 10 years of stockpile that we'd be able to work with, as we transition underground, minimum. We've got lots of comfort, you know, as we think about the future and the transition from the open pit to the underground, both with the stockpile and just how we build that mill and our flexibility on if we wanted to even potentially derating it at some point in the future if we wanted to go from 10-eight years or something like that.
Mm-hmm.
I think we've got two levers to pull there.
Great. Thank you.
Your next question comes from the line of Jackie Przybylowski with BMO Capital Markets. Please go ahead.
Thanks very much. I think most of my questions have been answered. Maybe I'll just ask, if you could just take a step back and maybe from a high level, talk about how you see this property over time. I know you've sort of alluded to it. You've got the starter pit, you've got an open pit, and then a longer life underground. Can you maybe walk through how the different deposits maybe fit into that, overall plan, at least as far as you're thinking right now, Ned?
Yeah, I think you got it there. If I guess, if you go to the cross-section, you can see that,
With the decline.
Slide 10.
To slide 10, you can see there are multiple zones in the mineralization. The pit focuses on these zones. You can see on the slide after, slide 11, you can see the exploration decline, which we are planning on driving next year or starting to drive next year. That goes underground to enable us to access both the LP zone and the Hinge and Limb zone. You have the pit covering the LP zone. You have the underground decline covering both the LP zone and the Hinge and Limb. All of this material will potentially be sources of ore in the future of this project. Again, we would like, typical to these deposit, you start with a pit. The pit starts with a starter pit.
You phase it out, several pushbacks to optimize strip ratio over the life of the mine. You go from that into blending it with underground material. Then at one point in the future, say, with what we know today, 10 years, after 10 years of the initial life, you transition to an underground-only complex. Given what we see of LP, we see it as a potentially high tonnage underground mine, you know, similar to the analogy we did with Hemlo, for example.
In terms of the underground, is it LP is going to be, like, the initial source of underground? How does Hinge and Limb fit into the plan? Are they going to be starting concurrently with LP for underground or later or earlier?
Yeah. Like, again, you know, one answers these questions when you have a detailed mine plan, which we don't. We're gonna start this work, you know, we're gonna commence this work this year. Like what Paul mentioned, we'll release next year the early view of economics, mine planning, and as such. I can tell you just knowing the mineralization, Hinge and Limb is a Red Lake style mineralization. It's high grade, while LP is orogenic, similar to Hemlo, it's high tonnage. We have access to both at the beginning of the mine life. We don't have a mine plan.
I don't have a mine plan, but just from experience, what I would say is that potentially one would go after the high grade open pit in the starter pit, blend it with the high grade stopes from the underground, whether it's Hinge and Limb or LP, you know, feeding the mill with the highest grade in the first couple of years to pay back capital and have a great IRR.
Okay. No, I appreciate that. I know, I know this is all very early stage. I appreciate any color you can give. I'm just trying to get my head around the sort of sequence of events. Thank you. That's, that's it for me. Thank you.
Thanks.
Your next question comes from the line of Carey MacRury with Canaccord Genuity. Please go ahead.
Hey, good morning, guys. Just a question on the 2024 PEA. I guess my question is really how many meters are you planning to drill this year? Is that PEA gonna be based on this resource, or should we expect a resource update sort of in the interim prior to that PEA?
Yeah. We're forecasting about 180,000 m of drilling this year, and that will inform our PEA in 2024.
Okay, great. Maybe just on the underground, now that you're, you know, you're obviously getting good results there. Can you just remind us what you're thinking of there in terms of like tons per day from the underground, potentially?
Again, Carey, is we haven't done the studies, but seeing the mineralization that we see today and seeing the widths and the shape of the deposit at the LP especially, it's high tonnage. If I would say a number very early today, I would see something in the range of 6,000-8,000 ton per day underground.
Okay. Fair enough. Thank you.
Your next question will come from the line of Mike Parkin with National Bank Financial. Please go ahead.
Hey, guys. I know, again, this is kind of preliminary, but is the thought process of balancing the mill to be better kind of situated with the future of the underground? Is that a bit of an insight that you see, and you've kind of alluded to it, I think, a bit, that you see potentially more ounces in the underground than you do at the pits?
Well, let me jump in. Yeah, it's a good question, Mike. I mean, we think we've defined pretty clearly the first 500 m, and we see a mine right there. We've modeled it out in terms of the pit shells. Our thesis, the Hemlo thesis is that this is orogenic. As you may recall, Hemlo went down over 2 km. We've been piercing now the mineralization where we expect it to be down to 1.3 km. I don't think we can just keep doubling sort of the ounces contained as we go from 500 m to 1 km- 1.5 km. There'll be some, as you know, where ounces can kinda be what you want depending upon the cutoff grade.
As we move to pure underground, the cutoff grades will come up. We'll be focused on a more higher grade mine scenario. It's not a linear kinda doubling of open pit as you go down another 500 m. Yeah, I do think based on that expectation, we probably have a longer life underground than we will open pit. We're thinking about all of that and retaining flexibility.
Okay. Thanks for that. I know that's kind of a big ask to answer that question at this point, but. That's a pretty impressive drill program budgeted for this year. Is that gonna be a bit more focused on the 500-1,000-m level or a bit balanced of that plus along strike extensions as well? As you've kinda noted, you've already pretty well defined that first 500 m.
I'll just start and hand off to Graham, who's. I must say, has done an excellent job of running the drill program this year. It's really been, like, run like a Swiss clock. I mean, we had excellent execution to get the drilling done and to achieve what we did within the year. That's, that was a huge accomplishment. The only thing I would point out, and I'll turn it over to Graham, is, you know, just to remind, these 1-kilometer pierce points, those are pretty. To get to 1 km, you gotta drill about a 1.5 km . These are deep, long holes that take over a month to drill. You know, the rate of access as we go deeper just becomes slower.
Our strategy, which I'll turn over to Graham, is to contemplate some of that, but also along the property.
Exactly, Mike. It's broken up into different bins, if you will. Right now, we have eight drills on the property. We'll probably ramp that up to 12, and we're gonna be hitting different areas at the same time. We still have about 15,000 m of pit infill to bring that all into indicated. Then we'll have roughly 20 km of work planned to do condemnation because the engineers are waiting for us to condemn areas so that they can start planning infrastructure. That's also exploration as well. We're placing those condemnation holes in areas where we wanna see more about the lithology.
In terms of pure exploration, we have about 20 km planned, and that's strike extents on the LP parallel zones. The hinge and limb area, the Red Lake-style mineralization, where we see a lot of geophysics signatures, that have to be drill tested, so they look exactly like the hinge and the limb. The majority of the drill program is going to be that 500 m- 1 km depth in infer drilling. It's about 125 km that we have planned right at the moment, but it's gonna be based on whole intercepts. We hit, we might wedge holes off or, you know, go deeper or start new holes to go up and infill these areas.
It's tough to precisely hit a target when you're drilling 1.5 km deep holes at 75 m spacing.
I definitely appreciate that. If you're moving into this getting approval with this exploration decline, what's just the timeframe? Are you gonna take that down to kind of the 500 m level to be able to do much closer infill work on that, call it medium zone of 500-1,000 m?
You can see in the, in the slide, I think it's slide 11 there, we put a exploration drive across the strike lengths of kind of the central area of the ore body. I think that's coming in at about 575 m right now in our current plan. That'll facilitate infill to get underground ounces up to indicated, as well as deep exploration, and inferred growth. The same on the hinge and limb side. We're really excited to get underground and do some work there. We did add a small hinge and limb resource this year. Those are challenging targets to drill from surface, we were pretty cautious in what we included there. Underground will help us get that across the line.
Okay. You might not have this handy, but if you wanna follow up with me, that's totally fine. Can you give us a sense of what percentage of the holes making up the resource were impacted by a capping rate?
Yeah. We can, let me get back to you on that one.
Okay. Thank you.
We do have a sensitivity. In the technical report, there's a sensitivity to capping table, which I think will get you most of the way to your answer.
Okay.
Our CapEx changes by domain, but yeah.
Okay, perfect. That's it for me. Thanks very much.
Your next question will come from the line of Tanya Jakusconek with Scotiabank. Please go ahead.
Great. Good morning, everyone. Thank you for taking my question. A lot of them have been answered already, but maybe just from a bigger picture, can we still think about the development of this property in that $1 billion-$1.2 billion of capital that you initially talked about last year and costs it all in sustaining in that $600-$800 per ounce range? Have those changed at all in your mind?
Hi, good morning, Tanya. you know, when it comes to this question, again, as you know, we focused our effort last year and early this year on defining this resource and releasing this resource. Drilling. Obviously we're excited on the result that we have to date. you know, I would say looking at CapEx, right? Let's look at the projects that are being built in northern Canada now, similar projects. I think the $1 billion that you mentioned is in line with those projects, and we don't see any significant material difference for Great Bear versus those other projects. That's regarding CapEx.
When it comes to, you know, AISC and cost and cash cost, you can see the cost in the technical report. It won't have the AISC in it, but you can see the cost that supports the resource, right? You can use that to guide your calculation on cost. Knowing the mineralization and knowing, our costs from, you know, mining globally, I'm confident and we anticipate that the AISC will be well below $1,000 per ounce.
Okay. Thank you.
Your next question will come from the line of John Tumazos with John Tumazos Very Independent Research. Please go ahead.
Thank you. I'm enjoying the geostatistical tables in the technical report, a little like a math puzzle. How much of the gold content was erased by the top cut factors first? You alluded to a table. I have it. I'm on page 164. I haven't seen it yet.
Let me take a look here. Sorry, did you have another question? I'll just take a look through the technical.
Sure, sure. I'm looking at pages 163 and four, where the top cut factors were described, the 32 domains where, I think eight of the top cut factors, eight of the domains were between 60 and 205 gm. There were 11 of the 32 domains where after a top cut, the coefficient of variation was still greater than four. Wouldn't that suggest that maybe those top cut factors could have been a little deeper? Thirdly, final question. Do you have a coefficient of variation for the global deposit without slicing it into 32 domains? You know, if you have 500 domains, then there's no variability. I'm sure the.
Yeah, sure.
Domains have a justification in qualitative geology. Sometimes I like to just look at the raw math.
Sure. I would guide you to the statistics on that page that show the uncapped versus capped CVs. As you can see, most of our domains, call it 1 through 10, these are the high-grade domains, that's controlling most of the most of the grade in the block model, most of the ounces. You see those CVs are falling in well in the two line. We're not expecting, you know, we think we did a really, a reasonable approach with our capping there. When you move into the 1,000 domains, those are more of our bulk domains. Those are controlling more disseminated mineralization. We're not as worried about the CVs being a little above two there. I think the other important thing that I would point you to is our comparison against the RC.
We did about a one-quarter production volume of RC drilling. We were sampling 10-kg samples, so wide hole diameter and 8x10 grid. This was all done dry, and we used that to reconcile our block model against and get comfort in our capping levels. Something we normally wouldn't do until closer to production, but we wanted to make sure we got it right on this one.
Thank you.
Our next question will come from the line of Anita Soni with CIBC World Markets. Please go ahead.
Hi. While, while John was asking his question, I managed to scroll a little bit further, and, I noticed the cost numbers that you're using. Could you just give us a little bit of a color on, like, how you came up with those costs? I think it's on page 172 of the technical report. Normally, I guess for resources, you generally tend to go a little bit, I guess not as conservative, so that you can capture everything in the cost numbers. Like, could you just give us an idea where, like how you got to the process cost number? Was that kind of benchmarked to things and, you know, sort of envision the 10K ton per day similarly for the mining cost numbers?
Yeah. Thank you very much. I think, you know, one thing to point out is that when we run our resources and our reserves, we're very rigorous, right?
Mm-hmm.
As an operator, right, we have mines around the world, open pit and underground. We have our internal cost data. We also benchmarked across Canada. The project team did that. That's how we arrived on the numbers that you see. You know, I would say it's reasonable and comparable to open pit and underground mines that are similar tonnage in Canada.
Okay. No, I was only asking. From, I just wanna know what kind of background, like, work has been done so that I can, you know, say should I be using this as my, as my estimate, or is it just sort of like broad strokes at this point? It sounds like you've done some work on that. Secondly, I just wanna understand how you say you used $1,400 for volume, but then $1,700 for the grade. When you're using a lower gold price to estimate your resources, right? You're basically deciding whether or not, you know, you should be moving that material in the first place, and then the reserve calculation later is going to be whether or not you should actually send that to the Miller stock pilot.
How does using two different like resource prices impact that sort of trade-off decision? I'm just trying to understand that.
Yeah. Like, this is, I recognize your question, and this is.
Yep.
Common when you have this, deposit that has both open pit and underground.
Mm-hmm.
Sorry, I'll give you a little bit more technical detail here just so we can wrap our heads around it. When you have this grade deposit that can be accessed by both open pit or underground, when you run the resource, we run the pit optimization, like the LGs. You run it freely, and that runs a series of pit shells, you know, starting from a low gold price going up to $1,000, $1,400, and then you get to the $1,700 pit shell. All of these are incremental, and that's how you end up with the, what we call technically the ultimate pit. You do the same in the underground. You run MSO, which is Mineable Shape Optimiser process, and you run that through surface, right? Like, you run all of the deposit.
You come in a selection point. You could decide to go with a large pit, a smaller underground, or go with a medium pit, larger underground or a smaller pit and more underground. Whatever doesn't get mined by the open pit gets transferred to the underground. Why the 1,400 shell? Which comes to your question. The cutoff grade for the resource tables is based on $1,700. We selected the $1,400 shell because that's lines in terms of volumetrics well with the reserve price that we will be running for the rest of the portfolio starting this year. Inside that $1,400 shell, the cutoff grade is 0.5 grams per ton, which relates to the $1,700 gold price.
If you elevate that cutoff grade in the $1,400 shell to the $1,400 price, you're looking at something in the range of 0.65 grams per ton, which would lower a little bit of that low-grade material. I know there's a lot of technical detail, but when it comes to actually.
No, I'm following.
Yeah. Okay, good. That's what we did mechanically, right?
Okay.
For the definition of the resource. When you go into mine planning and economics, then it's another layer above that because then you wanna feed in what maximizes your cash flow year-over-year. You can raise the cutoff grade over the $1,400 to what we demonstrated to you, to something like 0.9 grams per ton.
Yeah.
That gives a higher average grade coming out of the pit.
Okay. The last question, which relates to what you just said. That's, I guess, if you raise it again, then you're making a decision whether or not you sort of stockpile that low-grade material that's maybe below 0.65 gm for later in the mine life. If you do that, when you're talking about the 6%-8% strip ratio, is that with the like, is that the overall strip of the whole ore body or is that including, like, once you do things like elevating the cutoff grade in that scenario? I mean, I guess you get a higher operating strip ratio in that sense in the early years and then lower later. Is that correct?
No, no. Like, the reverse. They're actually the reverse.
Okay.
What we'll do is we'll start with a starter pit, a smaller pushback and a bigger pushback. Those initial pushbacks early in the mine life will look at, say something around 3.5, 4 strip ratio and slowly extend till you get the full resource at a 7 strip ratio.
Okay. All right. Thank you.
Again, for any questions, please press star one on your telephone keypad. We have no further questions at this time. Ladies and gentlemen, that will conclude today's meeting. Thank you all for joining, and you may now disconnect.