Good morning. My name is Lara, and I will be your conference operator today. At this time, I would like to welcome everyone to Lundin Gold's Third Quarter 2022 Results Conference Call. 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 1 on your telephone keypad. If you would like to withdraw your question, please press star followed by the number 2. Thank you. Mr. Ron Hochstein, President and CEO, you may begin your conference.
Thank you, Lara. Good morning, everyone. Thank you all for joining us on this conference call today, where Terry Smith, Chief Operating Officer, Chris Kololian, Chief Financial Officer, and I are going to take you through our results for the third quarter of 2023. Please note Lundin Gold's disclaimers on this slide. This discussion includes forward-looking information. Actual future results may differ from expected results for a variety of reasons described in the Caution Regarding Forward-Looking Information and Statements section of our press release. Lundin Gold is a US dollar reporting entity, and all amounts in this presentation refer to US dollars unless otherwise indicated.
Lundin Gold reported gold production of just over 112,200 ounces, and gold sales of 112,711 ounces this quarter, at a cash operating cost of $704 per ounce sold and all-in sustaining cost of $907 per ounce sold. We maintained a high average throughput rate of just over 4,500 tons per day, which was offset by lower grades than previous quarters, which was expected based on our mine sequencing and lower recoveries. Terry will talk about our initiatives to improve recoveries in a bit more detail. Our cash operating costs and AISC were higher than previous quarters, but they are in line with our expectations.
Our operating results put us firmly on track to meet our revised AISC guidance of $820-$870 per ounce sold, and near the upper end of our revised production guidance of 450,000-485,000 ounces. Lundin Gold's track record of generating strong cash flow continued during the third quarter, with free cash flow of approximately $81 million or $0.34 per share achieved, resulting in a cash balance of $302 million at September 30. Given this robust cash balance and low cash requirements, we have elected to fully repay our senior debt facility early. The remaining balance, plus accrued interest, totaling approximately $72 million, will be repaid next week on November 14, well in advance of its original maturity date of June 2026.
Upon completion of this repayment, Lundin Gold will have extinguished two of its three project finance facilities, the Gold Prepay and senior debt, which had an original combined principal amount of $500 million after only three years of operation. The Stream Credit Facility now makes up the last component of the outstanding debt on our balance sheet, the first half of which we have the option to buy back in June of next year of $150 million. We have, and will continue to progress our debt reduction strategy for the benefit of Lundin Gold shareholders. With that, I'd like to turn the call over to Terry now for a more detailed look at the operating results.
Thanks, Ron, and hello, all. Another quarter in the books for Lundin Gold. Operating results in Q3 were highlighted by quarterly gold production totaling approximately 112,000 ounces, comprised of 72,000 ounces of concentrate and 40,000 ounces of Doré. Gold sales totaled around 113,000 ounces. In the same period last year, gold production and sales totaled roughly 122,000 and 135,000 ounces, respectively. I'm also pleased to report that we completed another quarter without any lost time or medical treatment incidents, further extending our exceptional safety performance. Mine production was close to 398,000 tons of ore at an average grade of 9.3 grams per ton.
Mine tons were less compared to previous periods as part of a stockpile reduction strategy to help reduce oxidation of ore on surface, which can impact recovery, that I'll talk more about shortly. The mill processed about 416,000 tons of ore at an average throughput rate of 4,523 tons per day, which is consistent with the throughput rate achieved during the second quarter. The mill has averaged 4,494 tons per day during the first nine months of 2023. Compared to previous periods, strong mill throughput was offset by a decrease in head grade and recoveries. Finely disseminated sulfide minerals in the ore continued to impact the flotation circuit during the quarter, resulting in average recoveries of 86.5%. Recovery improvement initiatives remain a key focus for us.
We continue to carry out various tests with different ore types, including grind size, flotation reagents, flotation operating conditions, with consideration for the impact of oxidation from stockpiling mentioned previously. We expect to implement changes to operating strategies to improve recoveries in the coming quarters. In addition, we have completed pilot testing of the Jameson Cell technology, which yielded positive results. Basic engineering has been completed, and detailed engineering is underway to incorporate this technology into our flow sheet. This recovery improvement project will be done in conjunction with the contemplated plant expansion to further increase mill throughput from the current 4,500 tons per day to 5,000 tons per day. Based on current schedules, the Jameson cells are to be in place at the same time as the ramp-up to 5,000 tons per day, anticipated in Q4 next year.
Sustaining capital expenditures accounted for $140 per ounce sold in the third quarter, another increase compared to recent periods. A large portion of this is attributable to the construction of the fourth tailings dam raise, where significant progress was made in Q3, with completion expected in mid-. During the third quarter, the conversion drill program also continued to advance and has now been completed. We plan to update our resource and reserve estimate in Q1 2024 with these results in hand. Ron will go through this program in a little more detail later. In addition to the drilling, development advanced on our two exploration headings, 1170 and 1080, that will facilitate the 2024 conversion drilling program at the southern extension of the current FDN resource. Development for these two headings is estimated at 765 meters.
I'm also happy to announce that commissioning of the underground mine maintenance facility is now complete, and we're moving into the facility. This new underground shop is expected to provide several efficiencies and cost savings by bringing our maintenance teams closer to the work underground. Other sustaining capital projects, such as implementation of a mine dispatch system, upgrades to the sewage treatment plants, purchase of mobile equipment, and other efficiency improvement projects, are expected to ramp up during the remainder of the year, with some projects carrying over to 2024. Cash operating costs and all-in sustaining costs in the third quarter were $704 and $907 per ounce of gold sold, respectively, which are both higher than previous periods.
Cash operating costs per ounce sold was impacted by lower gold production due to expected lower grade and recoveries, partially offset by increased mill throughput, while the higher all-in sustaining costs also reflects the increase in sustaining capital activities during the quarter. Over the first nine months of 2023, Lundin Gold achieved an all-in sustaining cost of $807 per ounce. Fourth quarter production is anticipated to be lower than Q3 due to lower grades. In August, we increased production guidance and decreased cash costs and all-in sustaining guidance.
Given our strong performance during the third quarter, we anticipate being at the upper end of our revised production guidance of 450,000-485,000 ounces sold, and remain firmly on track to meet our revised all-in sustaining guidance of $820-$870 per ounce sold. I'll turn the call back to Ron now to discuss our exploration programs.
Thanks, Terry. During the third quarter, conversion drill program continued to advance in distinct sectors of the FDN deposit, focusing on the Northern, Central, and Southern portions of the resource envelope, with approximately 6,200 meters drilled across 46 holes. A total of approximately 11,000 meters of underground drilling from 79 drill holes was completed as part of the now completed 2023 conversion program. Conversion drilling in the southern sector of FDN has returned several high-grade intercepts, associated mainly with vein and/or veinlet zones associated, hosted in volcanic porphyritic intrusive rocks. In the North Central sector, results show gold mineralization in breccias and stockwork zones, very similar to the mineralization found in the mineral reserves of this sector.
Results are currently being incorporated into the geological model and will form the basis of an updated mineral reserve, the resources estimate, to be completed during the first quarter of next year. The largest exploration program of our three programs, the Near Mine Program, continues to explore distinct sectors located in the long trend of the FDN deposit and within extensions of its major controlling structures. The Near Mine Program includes drilling from both surface and underground. The surface drilling program continues along the south extension of the East Fault, where the FDN South, also known as FDN S, and Bonza Sur targets were identified. During the third quarter, 10 surface drill holes were completed, mostly at Bonza Sur, where the drilling program continues to confirm the continuity of the mineralization. Exploratory holes were also completed along the north and south extensions of the FDN deposit.
Five surface rigs are currently drilling. Two of them are at Bonza Sur, two along the south and north extensions of FDN, and one to the east of FDN. The underground drilling program continues to explore the continuity of the FDN deposit at depth and beyond the major faults. Four drill holes were completed in the third quarter, and all of them intercepted structures, zones of hydrothermal alteration, and gold mineralization beyond the current limits of the FDN resource boundary. In the north part of FDN, one underground drill hole confirmed hydrothermal alteration zones related to the breccias and veins at depth below the current resource mineral envelope of FDN.... In the central part, another underground drill hole intercepted hydrothermal alteration zones along the down-dip extension, again, below the current resource envelope.
Furthermore, 2 underground drill holes completed at the FDN East target intercepted a new mineralized zone represented by breccias, veins, and veinlets with sulfides hosted on porphyritic intrusive rocks or in volcanic rocks. I'd like to spend a little time on Bonza Sur, though, where exploration continues to advance in defining this new epithermal system. 7 drill holes have been completed here and confirmed the extension of this new mineralized zone. Recent results indicate that the gold mineralization is hosted by the same volcanic sequence found at the FDN deposit, with occurrences of disseminated to semi-massive levels of sulfide. Since the discovery of Bonza Sur, numerous drilling intercepts suggest the occurrence of 3 sub-parallel vein or veinlet zones, which we have called Colorado Central, West, and East.
This epithermal system is believed to extend to surface and stretches for 850 meters along the north-south strike, and for at least 500 meters at depth in the central area. Gold mineralization remains open in all directions. Over the coming months, the drilling program at Bonza Sur will focus on better understanding the mineralized zones through reducing drill spacing and focusing on further exploration at depth and along strike. Two rigs are currently turning at Bonza Sur, and I'm excited to see the progress we continue making at this high-priority target. The regional drilling program continues to advance in distinct sectors along the southeastern and southwestern borders of the Suarez Basin. In total of 2,544 meters across four drill holes were completed in the third quarter.
Regional drilling focused on the Crispell target, where 3 drill holes were completed, testing an unexplored geochemical and soil anomaly along the southwest contact between the Suarez Basin and the volcanic sequence. All drill holes intercepted hydrothermal alteration zones with important quantities of sulfides hosted on brecciated volcanic rocks. One drill hole returned low-grade values of gold. Lundin Gold's exploration programs are continuing to demonstrate the significant untapped exploration potential near the current FDN deposit. Nine rigs are currently turning on our exploration programs, and we now expect to drill 53,000 meters in 2023. 11,000 meters already drilled on the conversion program, 9,000 meters anticipated on the regional program, and now 33,000 meters on the Near Mine Program. That is more than the 50,000 meters we had communicated previously, while we maintain our cost guidance.
Very exciting times for us at Lundin Gold. I'll now turn the call over to CK to provide a more detailed look at the financial results.
Thanks, Ron, and good morning, everyone. In the third quarter of 2023, Lundin Gold recognized revenues of $211 million from sales of approximately 113,000 ounces of gold at an average realized gold price of $1,931 per ounce. Income from mining operations increased to $100 million compared to $84 million a year earlier, primarily a result of the higher gold price. From this, Lundin Gold generated adjusted earnings, which exclude the derivative gain and related deferred income tax expense, including net income of $45 million or $0.19 per share this quarter, compared to $20 million or $0.09 per share a year earlier.
For the first nine months of this year, Lundin Gold recognized revenues of $712 million, and income from mining operations of $357 million. The company generated adjusted earnings of $171 million or $0.72 per share. Adjusted EBITDA was $121 million in the third quarter. For the first nine months of this year, Lundin Gold achieved EBITDA of $430 million. Performance during the third quarter of 2023 continues Lundin Gold's track record of generating strong free cash flow. The company generated net cash from operating activities of $120 million, and free cash flow totaled $81 million or $0.34 per share, compared to $65 million or $0.28 per share a year earlier.
For the first nine months of 2023, the company has generated free cash flow of over $200 million, which impressively also includes interest and finance charges of $129 million from the full repayment of the Gold Prepay facility in January. We expect to continue generating significant free cash flow in the future based on our production and AISC guidance, especially given increased exposure to strong gold prices with the benefit of the full repayment of the Gold Prepay. Lundin Gold ended the third quarter with a very strong cash balance. As at September 30, the company had cash of $302 million and a working capital balance of $314 million, compared to cash of $363 million and a working capital balance of $195 million as at December 31, 2022.
The change in cash during the first nine months of the year was primarily due to the full repayment of the Gold Prepay facility of $208 million, principal repayments, interest, and finance charges, including associated taxes under the Stream Credit Facility totaling $61 million, interest and principal repayments under the Senior Debt of $121 million, dividends of $71 million and cash outflows of $40 million relating to sustaining capital expenditures. This is offset by substantial cash generated from operating activities of $427 million, and proceeds from the exercise of stock options and anti-dilution rights of $13 million. As Ron mentioned, given our robust cash balance and forecast cash requirements, we are going to fully repay the remaining principal and accrued interest under the Senior Debt Facility of approximately $72 million, which will take place next week.
With this, we will have extinguished all bank debt, with only the stream credit facility remaining. I would like to express our appreciation to our lenders for their participation and trust in Lundin Gold, the country of Ecuador, and Fruta del Norte over the past five years. Their financial support allowed Lundin Gold to introduce responsible mining in Ecuador and create opportunities for the people of Zamora-Chinchipe that may have not otherwise existed. In addition to the senior bank debt, we have the option to buy back half of the stream in June next year for $150 million, and the second half in June 2026 for $225 million. The company continues to evaluate these options, and in the absence of other more attractive capital allocation opportunities, we expect exercising the first option will make sense for our shareholders.
Free cash flow is fundamental to Lundin Gold's growth story, and we have generated a lot of it in 2023 so far. We've made some serious headway in our debt reduction strategy. Lundin Gold shareholders already benefit from the additional cash flow generated from the 11,500 ounces quarterly that no longer service the gold prepay, which was repaid in early Q1. Now, going forward, shareholders will also benefit from the additional cash flow that would otherwise have serviced our senior debt. I can't talk about cash flow without mentioning Lundin Gold's dividend policy of $0.10 per share, declared on a quarterly basis. The third dividend of 2023 was paid at the end of Q3, bringing year-to-date dividends paid to a total of $71 million.
The fourth dividend is payable on December 22nd for shares trading on the TSX and OTCQX, and December 29th for shares trading on Nasdaq Stockholm, based on a record date of December 7th, 2023. Even after the payment of dividends, we still retain a healthy treasury and continue to generate significant operating cash flow for other value-generating initiatives, such as our near mine and regional exploration programs, future throughput expansions, and other strategic opportunities. With continued progress on strengthening our balance sheet, we expect to reevaluate our dividend policy in the latter half of next year. A great first nine months for Lundin Gold. The company is in a robust financial position to benefit from prevailing gold prices and remains in a strong position to meet our improved guidance for the full year. For a more detailed discussion of our financial results, I encourage you to turn to our MD&A. Now, I'd like to turn the call back over to Ron for his concluding remarks.
Thanks, CK. Before I conclude, I want to quickly provide a few important corporate updates. Near the end of the quarter, Nathan Monash, Vice President of Sustainability, departed Lundin Gold. I want to thank Nathan for the incredible, important work he has done since joining the company in 2015. Nathan has been instrumental in building the industry-leading ESG practices that Lundin Gold today incorporates in our activities and helping to develop a responsible mining industry in Ecuador. We wish him well at Lundin Mining, where I'm certain he will do a fantastic job. In his place, Sheila Colman has taken on the role and is now Vice President, Legal and Sustainability and Corporate Secretary. A number of changes have also occurred on Lundin Gold's board of directors.
Upon the acquisition of Newcrest by Newmont on November 6th, Craig Jones and Jill Terry, former Newcrest nominees, resigned from the board. In their place, Lundin Gold has appointed 2 new directors, Melissa Harmon and Scott Langley, as Newmont nominees. Melissa has a mining engineering degree and an MBA. She has been employed with Newmont for over 20 years in increasingly senior roles in operations and is currently Group Head, Non-Managed Operating Joint Ventures. Scott is currently Vice President of Corporate Development at Newmont and worked in investment banking for more than 15 years prior to joining Newmont. We are pleased to welcome both Melissa and Scott to the Lundin Gold board of directors. In closing, another strong quarter of free cash flow generation, and as a result, we are advancing our debt reduction strategy with repayment in full of the remaining balance of our senior debt facility.
Operationally, while results were strong, we continue to focus on improving recoveries and have made progress in identifying and implementing solutions. Thank you all once again for your continued support, and with that, I will now open the call to questions. Over to you, Lara.
Thank you, sir. Ladies and gentlemen, we will now begin the question and answer session. Should you have a question, please press star followed by the number one on your touchtone phone. Again, that's star followed by the number one on your touchtone phone. You will hear a three-tone prompt acknowledging your request. Should you wish to decline from the polling process, please press star followed by the number two. If you are using a speakerphone, please lift your handset before pressing any keys. We have our first question coming from the line of Wayne Lam from RBC. Please go ahead. Again, this is Wayne Lam from RBC. Your line is now live. Please go ahead.
... Oh, hey, morning, guys. Just wondering what needs to be done to kinda expand the mill beyond the current capacity? What's the cap on the throughput there? Is there a cap around 4,750? And I guess, what's required in terms of permitting, and would you have to throttle back output to remain within the capacity limits?
Morning, Wayne. What's needed to go to that is we're not talking about a lot of capital. We're presenting that to the board here in a few weeks with our 2022 budget, but it's in the neighborhood, thirty, thirty-
30-40.
30-40, but probably, yeah, it's close to $30-$35 million. And from a permitting standpoint, we've done the work. We're still within our environmental envelope that was the original EMP or Environmental Management Plan for the operation. No further disturbed areas. We're still with all our discharges are within the environmental envelope, so it's essentially a notification to the Ministry of Environment that we're increasing throughput and that we're within. So there's really not much on the permitting side. The way that Terry and the team are laying out the project, it's, we've got the way the mill was built and everything, it's actually pretty neat in that we're gonna be able to carry on this project through the year with minimal downtime.
Really what we're doing right now is scheduling our downtime to bring that project in when we're doing mill relines and that sort of thing, to really minimize the impact for 2024 production and be able to almost do this seamlessly and be able to ramp up in Q4.
Okay, perfect. Thanks. And then just wondering on the additional tailings raise, how much capacity does that give you at the current run rate? And is there sufficient, sufficient capacity in doing additional lifts going forward to support the expansion capacity, or at some point, are you gonna have to contemplate a new TSF?
Well, if Andre keeps having the success he's having on the exploration programs, you know, we've put 14 holes into Bonza Sur and 13 have hit our grade mineralization. So with that continued success rate, I hope you're right, and that we will have to be looking at another TSF because we're gonna be way beyond our current mine life. But going back to what we have right now in the throughput, Wayne, we're fine with our existing at the current. With the increased throughput rate, our next raise will be tail end of later 2025, when we have to do the next raise, and then it's kind of every other year after that. And we have sufficient capacity with our existing tailings facility to handle our current reserves and a good chunk of our resources, actually.
We're in good shape with the current facility.
Sounds good. Sounds like Andre's putting a bit of pressure on Terry over there. Maybe just, maybe just last one for me. What's, I guess, required in terms of the equipment for the additional improvement in recoveries, and do you have a kind of quantum of CapEx, CapEx spend related to that as well?
Hey, Wayne, it's Terry here. Yeah, and the 30-35 that we were talking about, that included the Jameson cells that we mentioned in the earnings script. So there's three cells that we're looking at purchasing, and you know, we're obviously encouraged from the pilot testing and excited to get them in. So we're, we've already started procurements to get them fabricated and into the operation next year.
Okay, perfect. Thanks for the detail. That's all for me. Thank you.
Thanks, Wayne.
Our next question comes from the line of Arun Lamba from TD Securities. Please go ahead.
Hi, Ron. Just high level on-
Hi there.
Hi. Just high level on the new president, Daniel Noboa. Just kind of your thoughts on that. My view has generally been pro-mining, and you've never really had any kind of political issues at your mine in southeastern Ecuador, but maybe just high level on the new president, any interaction that you may have had or are going to have, would be helpful.
Yeah. Thanks, Arun. That's a good question. No, we're... So the National, new National Assembly is taking their seats on November fifteenth, and the new president, President Noboa, will be taking his seat on December 1st. I personally, having spent as much time as I have in Ecuador, I'm really personally excited about what I see from this new government, and also I think the new National Assembly, not just the president, but the new National Assembly. I think a lot of people have learned the mistakes or the errors of their ways over the past few years, and lots of things have happened with the government, and so it's exciting times.
The challenge we're gonna have, Arun, is, as you well know, Noboa coming in, and the National Assembly, they only have an 18-month term, so they're only finishing out, which was Lasso's original term. So they're essentially, almost the day they start, they're gonna be campaigning again to get reelected. And so it's, it's encouraging. There's probably gonna be some really good things happen within the country, but they're gonna be focused on things that are gonna get them votes, which is the security, health care, jobs. He's really focusing on jobs for young people. Those are the things he's gonna... So in terms of what the impacts on the mining industry, I, I don't see much happening within the, the next, during this term, but I, I'm encouraged overall.
I think, I think he's gonna be great for the country, and I think the National Assemblies, they're gonna find ways to work together.
That's helpful. Thanks. And then just one more, with the Newmont- Newcrest acquisition closing, I know you guys had a great relationship with Newcrest, and they kind of gave you a sign-off to, if you found something that made sense for you guys, you kind of, I mean, they're generally supportive of anything you guys did. Have you been in discussions with Newmont during this past six months in the deal process, or now that it's closed, dialogue will kind of pick up, and then what you're thinking, just kind of terms in M&A? I think before you mentioned looking at potential developers, if it makes sense. Yeah, any color on that would be great.
Yeah, Arun, you know, we've been having discussions with Newmont for several months. It's developed more as they became clear the transaction was gonna occur. Like, I'm really looking forward to, or we are looking forward to the relationship. We've got a lot of discussions right at the very senior levels and through the organization. CK has good contacts there. And really, we've had Melissa and Scott took part in their first board meetings yesterday and really excited to have them on the board. I think right now, what we can say, Arun, is Newmont, everything we're hearing from Tom and the senior people and the board nominees, is they're aligned with Lundin Gold's goal to create shareholder value.
They are supportive of the Lundin family, and you know, I think there's some longer relationships with Newmont and the Lundin family than there even was with Newcrest. So I think we overall are excited about the new horizon here with our new shareholders, Newmont.
That's helpful. Thanks so much. That's it for me.
Our next question comes from the line of Don DeMarco from National Bank Financial. Please go ahead.
Thank you, operator. Good morning, Ron and team. My first question, just Ron, taking a look back at the technical report, I mean, of course, we're seeing grades over 10 grams per ton the next couple of years, production topping 500,000 ounces a year. Is this trend still intact after you've worked your way through 2023? And I guess we're just trying to get a little bit of flavor ahead of the guidance release next year.
You know, we're just, we've seen preliminary life of mine plans. We're putting that forward to the board in a couple of weeks with our 2024 budget. But, yeah, we're based on the current life of mine plan, Don, yeah, we anticipate a good couple of years in front of us getting up to 5,000 tons per day by the end of Q4 and the grades that we see over the next couple of years.
Okay. Also, you know, another question on the mine plan. We see after the next couple of years, grades moderate a little bit, still fairly robust, but come down. Is there, with your exploration, near mine exploration success and so on, is there potential opportunity to lift those grades ever, even ever so slightly beyond, say, 2025?
That one, Terry?
Sure. Hey, Don, it's Terry here. What Ron was describing in the call from some of the exploration work going on around the peripheries of Fruta. Certainly, we're seeing very similar tenure of grades and widths as the main ore body. So obviously, as we incorporate that into our resource model and redo our reserves and update our life of mine plans, that's, of course, going to extend, you know, the really good high-grade heart of our life of mine plans. So we're hopeful to see that, but that process is underway at the moment. So, we'll report back on that resource reserve updates next year.
Excellent. Okay. And as a final question, just shifting to recovery in Q3. Of course, we saw recovery dip slightly, and I know you have work in place to bring them back up to recent run rate. Was it really just largely a function of grade then? You know, lower grade, we might expect lower recoveries, or are there things you can do, and do you have the expectation to kind of bring those recoveries back up, even if-
No, it was-
comparable? Thank you.
Yeah, it was a little bit grade, but no, it was more just a type of ore. Remember, Don, you know, we've been covering this for a while with the SBR and that, and now we're getting into different parts of the ore body. Excuse me. And so, yeah, it was... I would say it was more, excuse me, a mineralogy issue than a grade issue because the following month, we saw similar grades and recoveries 3%-4% higher than what we had in the tail end of the quarter. So it was really, it's really a mineralogy issue.
Okay. Are you able to adapt the plant? Like, now you have some familiarity with the different types of mineralogy. Are there adjustments to make when you enter zones like you mined in Q3?
Yeah, there's definitely adjustments we're making with the blending strategy. We're looking at, as Terry mentioned, some different reagents to help, but where our losses are. What we've determined where our losses are is in the finely disseminated sulfides. And that's really in the wheelhouse of the Jameson cells. That's what they really focus on, is the fine grain flotation. And so, as Terry mentioned, we had a pilot cell on site. We got really interesting results. They've done a bunch of simulations for us, which has led to the installation of 3 cells at different stages within the flotation circuit. And, you know, I guess what I want to say, John, is that we're not just sitting on our laurels and waiting until those Jameson cells are installed.
We continue to do work, and we are learning to improve, but, we're pretty excited about what we anticipate to see with the Jameson cells.
Okay. Thank you. That's all for me, Ron. Appreciate it, and good luck with the rest of the year.
Great. Thanks, Jon.
Our next question comes from the line of Kerry Smith from Haywood Securities. Please go ahead.
Thanks, operator, and thanks for taking my question, Ron. Just on the test work, the test work that you've done with the Jameson cells, what sort of indicated recovery are you, or recovery improvement are you seeing? And I know you probably won't get that in the commercial plant, but what is the kind of the order of magnitude that you're targeting?
Hey, Kerry, it's Terry here. Yeah, the pilot work that we did really simulated the three positions that we're looking at of putting these Jameson cells. One's at the head end of the flotation circuit, one's sort of in the middle of the flotation circuit, and then one is at the end. And we, you know, we tried to introduce as much variability into the feed as we could to really understand the performance. And so the modeling work that we've done, and of course, Glencore Technology, have taken the results and we're estimating that we'll see about a 3% recovery bump once these Jameson cells are installed.
Okay, okay, great. That's, that's 3% expected in the commercial plant, not, not 3% from the pilot work and, and expected to be slightly lower than that?
No, that's correct. 3% sort of over our historical averages.
Okay. Okay, okay, that's great. Awesome. And you'll have those cells installed and running by the end of the year as, sorry, by the end of next year, as part of the expansion to 5,000 tons, and that's the intention, correct?
You got it.
Okay. Okay, and when... Just to, maybe you can answer this question too, Terry. When will we see the new life of mine plan that's, that's been generated and is going to be presented to the board? Is that something that we'd see with your guidance, or, or will that be a new technical report, or how would we, how would we see that?
We're not planning on updating our technical report, Terry and, Terry, so, we'll just be issuing new, three-year guidance, following the approval of the budget.
Okay, so in the three-year guidance, we would only see the three-year guidance. We wouldn't see necessarily the total life of mine plan then?
No, we'll wait till we get sort of material changed to update our technical report.
Okay.
We don't anticipate doing that next year.
I got you. Okay. Okay, and then just the last question I had, and maybe Terry can comment, just on the current run rate for your unit costs at the operation. You know, like, cost per ton mine, cost per ton milled, and site G&A. Could you give me some flavor for what you're kind of seeing these days in your costs?
Yeah, I think our third quarter costs per ton, you know, we're in that $170-$180 a ton range. You know, so nothing really significantly different than what we've talked about in the past, Kerry.
Okay, and just remind me the milling cost again.
30, low 30s per ton of milled.
Okay. Got you. Okay. Okay, that's great. Thank you very much.
Ladies and gentlemen, just a reminder, should you have a question, please press star followed by the number one on your touchtone phone. We have our next question coming from the line of Jonathan Egilo from Desjardins. Please go ahead.
Hey, thanks, guys. Most of my questions have already been answered. I guess the one remaining one is, how well understood and modeled are these finely disseminated sulfide zones? And I guess, did their appearance in Q3 or surprise you, or were you expecting to have to deal with them this quarter?
It was a little bit of a surprise, but we're getting ahead of... With all our infill drilling now, Jonathan, we're collecting samples and again, doing metallurgical tests on them. Our geometallurgical model, we've been working on it now for about a year as we get into different parts of the ore body, and it's really coming together. So I think we're gonna be a lot better, and we'll be able to blend better as we go forward. So it's been a work in progress, but we're making some serious headway.
Okay. And I guess, is it too early to know then, if there's expectations of some signs in the upcoming quarters then, or is that something you're doing right now, and it'll come out with guidance?
We'll take that into it. You know, we're taking all our efforts to improve recovery. That'll be incorporated into our 2024 budget as the, you know, some things we're implementing, some new reagents. Terry, we're implementing this quarter, aren't we, in Q4? So we'll take that, we'll take that into account in our, right off the start of the year.
All right, thanks. That's it for me.
There are no further questions at this time. I'd now like to turn the call back over to Mr. Hochstein for final closing comments.
Thanks, Laura. Thank you, everybody, for taking the time this morning to hear a little bit more color on the Q3 results. And as I mentioned, the call it is really exciting times. Our exploration programs are really, really showing a lot of opportunities for us. We're starting to work on even now as a result of those five-year, ten-year plans for milling throughput rates, tailings capacity mining alternatives. And so, yeah, look forward to talking to you a little bit more about the upcoming announcement of our new three-year guidance. And thank you again for taking the time this morning.
Thank you, sir. Ladies and gentlemen, this concludes your conference call for today. We thank you for participating and ask that you please disconnect your lines. Have a lovely day.