Hello everyone, Welcome to SSR Mining's conference call to discuss the recently announced acquisition of an up to 40% ownership interest in operatorship and the Hod Maden Gold-Copper Project. This call is being recorded. At this time, for opening remarks and introductions, I would like to turn the call over to Alex Hunchak from SSR Mining. Please go ahead.
Thank you, operator, and hello everyone. Thank you for joining today's discussion on SSR Mining's acquisition of the world-class Hod Maden Gold-Copper Project through an earn-in structured transaction. To accompany our call, there is an online webcast featuring presentation material, and you will find the information to access the webcast in our news release relating to this call. The presentation materials can be found on our website. Please note that all figures discussed during the call are in US dollars unless otherwise indicated.
Today's discussion will include forward-looking statements, so please read the disclosures in the relevant documents. Unless otherwise disclosed, all project level figures discussed during this call are sourced directly from the 2021 Hod Maden Feasibility Study, which is available on SEDAR. Today's call will be led by Rod Antal, President and CEO of SSR Mining.
Edward Farid, Chief Corporate Development Officer, and John Ebbett, Executive Vice President of Growth and Innovation, are also available during the question and answer period at the end of the call. I will turn the call over to Rod for his opening remarks.
Great. Thanks, Alex. Hello to you all, and thanks for joining us. I'm thrilled to be discussing an extremely attractive transaction that we feel will deliver significant value to our shareholders and provides us the opportunity to participate in one of the best undeveloped gold-copper projects in the world. As you all have seen, we announced the acquisition of a 40% ownership and operatorship in the world-class Hod Maden Project in northeastern Türkiye.
This is an on-strategy transaction in an asset we have been closely monitoring for years. We believe this acquisition not only enhances the quality of our portfolio, but leverages our core strengths and competitive advantages to deliver sector-leading economic returns and cash flows to our shareholders in a region where we have a clear track record of success.
Hod Maden is one of the best quality and highest returning near construction projects in the sector. On a 100% basis, Hod Maden features over 3 million ounces of gold equivalent Mineral Reserves at an impressive reserve grade of more than 11 grams per ton. It averages approximately 200,000 ounces of gold equivalent production annually at first quartile, all-in sustaining costs below $600 an ounce over a 13-year mine life, with the further upside likely from exploration and optimizations. At feasibility study commodity prices of $1,599 gold and $3.19 copper, the project represents an after-tax IRR above 30% and generates more than $160 million in free cash flow annually. In aggregate, these metrics are truly remarkable.
We believe Hod Maden perfectly complements our diversified portfolio of high quality, long life assets and reinforces our commitment to generating strong free cash flow. The deal structure provides, in aggregate, an earn-in consideration of $270 million to Lidya Mines. This includes $120 million, which was paid today to acquire the initial 10% ownership in the project, as well as operatorship and control.
The remaining $150 million is structured as milestone payments to acquire the additional 30%, taking our overall ownership up to 40% by the time the asset is operational. Based on our due diligence outcomes, the transaction consideration implies a 0.5 times price to net asset value and delivers SSR Mining an all-in internal rate of return, inclusive of the $270 million consideration above 15%.
Important point to note is all Türkiye regulatory approvals have been received and the transaction is now closed. Over the next 12 months, we will work to optimize the project and prepare for a formal construction decision later in 2024. With the EIA granted in 2021, Hod Maden is significantly de-risked from a permitting standpoint, and we currently expect to bring the asset into production in 2027. Our proven project development team, the team who successfully built the $700 million Çöpler Sulfide plant on time and under budget, will take stewardship and are very keen to get started. With that overview, let's turn to slide number 4. Before diving into more granular details of the transaction and the value proposition, I want to start here by reiterating the unique and world-class nature of the project.
Amongst its peer group, Hod Maden features an unparalleled mineral reserve grade above 11 grams per ton on a gold equivalent basis. Those grades help drive the industry-leading life of mine costs, as shown on the right-hand side of this slide. Note, these costs are on a co-product basis, so this is simply not a result of copper by-products representing an artificially low cost profile. This slide also demonstrates how Hod Maden positively sets itself apart from others.
We're thrilled to bring a project of this quality into our portfolio as it will supplement our free cash flow and shareholder returns for decades to come. Let's walk through the strategic rationale on slide number five. Given our expertise and track record in Türkiye, Hod Maden has been of interest to us for several years.
Amongst the strategic opportunities we have reviewed, I can confidently say that no other project has subsequent to our extensive due diligence process, presented returns on this magnitude across our core geographies. With that in mind, let's walk through the strategic rationale. With this transaction, we're adding a near-term and significantly de-risked project to our excellent development pipeline that provides us with superior returns. The staged and risk mitigated nature of this earning structure transaction represents a compelling acquisition price at approximately 0.5 attributable NAV, which maintains our peer-leading balance sheet strength. The transaction is complementary to our focus on free cash flow generation, and Hod Maden is one of the lowest capital intensity projects in the gold sector. With respect to development capital, we will be accountable for our pro rata 40% share of total pre-production spend over the three-year construction period.
Given Hod Maden's robust economics, we believe the project could support a project finance facility, and this is something we will evaluate. With our proven track record in Türkiye, we expect considerable synergies between Hod Maden and our Çöpler Mine. Our expertise in country and our track record of success was an attractive driver of this deal for our joint venture partners. We completed an extensive due diligence process on Hod Maden, including multiple site visits, and came away impressed with the quality of the work completed at the project to date. At the same time, we see potential to surface additional value from Hod Maden. We will work to begin on an updated Technical Report Summary to incorporate these opportunities, which will lead to a project construction decision next year. We will also take the opportunity to account for inflation and other updated market conditions at the same time.
Lastly, more importantly to our business and our shareholders, this transaction is accretive to SSR on all key per share metrics. Let's turn to slide 6, and I'll talk more about the expected accretion. On an attributable basis, this transaction adds 1.3 million gold equivalent ounces to our Mineral Reserves or a 15% increase. Our Measured and Indicated Mineral Resources increase by 9%.
Annually, the project is expected to contribute approximately 80,000 gold equivalent ounces and $66 million in free cash flow to SSR, implying a more than $800 per ounce in free cash flow generation using the 2021 feasibility commodity prices I mentioned earlier. On a per share basis, the attributable free cash flow from Hod Maden is 14% accretive to our projected annual free cash flow.
The transaction is also accretive on a NAV per share, and we see potential additional upside at Hod Maden through asset optimizations and exploration over the longer term. On an attributable basis, Hod Maden's first quartile cost will drive a material improvement to our overall company cost profile, furthering our position as a free cash flow leader over the long term. Overall, it's clear to us that the transaction checks all the boxes and delivers material accretion on all meaningful metrics. Moving on to slide 7.
Moving back to the asset and the plans ahead. On this slide, you will see a number of the metrics reflecting the 2021 feasibility study that reiterates the world-class nature of the Hod Maden project. Our due diligence process supports these metrics, and we continue to see potential pathways to add value to what is already a compelling investment opportunity.
Moving on to the next slide. I'm gonna take some time to walk through the details of the project and what makes it so attractive. The ore body will be mined underground via longhole stoping. The Mineral Reserve grade at over 11 grams per ton is truly world-class and includes a meaningful copper contribution of about 20% of revenue. The processing plant envisaged in the 2021 feasibility study will scale at 800,000 tons per annum or around 2,200 tons per day, producing a clean gold-rich copper concentrate and a pyrite concentrate. Hod Maden is located just off a major highway and close to the Black Sea, providing multiple options to access port facilities within 200 kilometers of the project site.
Work is currently underway at site to connect to the national power grid. Having access to fantastic infrastructure is clearly one of the benefits of working in Türkiye. Combined, these factors drive a first quartile life and mine cost profile. Moving on to slide number 9. In addition to the opportunities for operational upside, we see significant potential across the district from a geological perspective. The main zone of mineralization at Hod Maden was discovered in 2014, and our joint venture partners worked quickly to delineate and prove up the target into a more than 3 million ounce Mineral Reserves that are currently defined. However, that focus meant limited exploration was conducted across the broader 3,500 hectare property.
Currently, there are a number of existing and untested soil anomalies along the main trend of mineralization, and the property is also conducive to geophysical surveying, an exploration technique that has not been extensively utilized at the property and could lead to new targets being identified. Excuse me. In addition, a zone of zinc mineralization exists on a separate structure to the east of the main zone.
This mineralization was not targeted or evaluated in the 2021 feasibility study and represents another longer-dated upside opportunity. The detail to note here is the transaction also includes an $84 million upside sharing contingent payment to Lidya. This payment will be made upon the delineation of an additional 500,000 ounces of mineral reserves, not included in any ounces currently defined in the mineral resources.
Overall, we feel very positive about the exploration potential and our exploration team, working with our joint venture partners, are excited to get boots on the ground. I want to slide 10 just to outline some next steps. The transaction closed today and our initial $120 million payment has been made. We now own a 10% interest in the project and have been granted sole operational control. On a 100% basis, there is approximately $30 million in pre-commitment capital spend that we expect to incur before project construction approval. This expenditure will allow our project development team to advance asset optimization and site establishment activities ahead of that formal construction decision next year.
These efforts will be incorporated into a Technical Report Summary in 2024, refreshing some of the project economic assumptions and include some of the upside opportunities we identified during our due diligence. Once a construction decision is made, the earn-in component of the transaction will commence and we will pay a total of $150 million to Lidya between the start of construction and the first anniversary of commercial production. Slide number 11.
To drive home the opportunity, it is important to remember that we have a proven track record of project delivery, execution, and M&A. We have shown our ability to deliver projects on time and under budget, most meaningfully with the Çöpler Sulfide plant, where we've clearly demonstrated our capabilities in Türkiye.
Our project execution plan utilizes the same core project team who will leverage our in-country experience and existing market knowledge of delivery partners to de-risk the project. We've also built a track record of operating success in the country, furthering our confidence that we are the right party to bring this world-class asset into production. We also have a history of adding value through M&A, and our previous assets and corporate transactions have all resulted in material value creation for our shareholders through free cash flow generation and NAV additions. Moving just to make some concluding remarks before we open up to Q&A. As I've illustrated throughout the call, this is accretive transaction providing an extremely compelling opportunity to deliver material value to our shareholders.
The transaction is well-aligned to our long-term strategy with Hod Maden complementing our diversified portfolio of high quality, long life assets that will generate strong free cash flow. We are confident in the work completed on the project to date and look forward to leveraging our skills as mine builders and operators to ensure a positive long-term future for the project.
Hod Maden checks all the boxes. It's in a core jurisdiction where we have demonstrated a proven track record. It's low capital intensity, and once in production, it will contribute significant free cash flow to SSR. With that, I'm gonna open up the call to Q&A.
Thank you, Mr. Antal. We'll now begin the question-and-answer session. To join the question queue, you may press star then one on your telephone keypad. You'll hear a tone acknowledging your request. If you're using a speakerphone, please pick up your handset before pressing any keys. To withdraw your question, please press star then two. We'll pause for a moment as callers join the queue. The first question comes from Ovais Habib from Scotiabank. Please go ahead.
Thanks, operator. Hi, Rod and SSR team. Congrats on the Hod Maden transaction. Just a couple of questions from me. Number one, Rod, SSR is also working on C2 and other, kind of, organic projects that you guys have on the go. How does Hod Maden change the development timelines or priorities of those other projects?
Thanks, Ovais. Look, we're also obviously very excited to be able to talk about it today. It's been a long time coming for us. You know, it's a terrific project for sure. I think, look, from a perspective, how does it fit in? You know, it fits in like a glove to what we're doing. There's really no change to our outlook on the C2 development in particular, which is the one you talked about. In some ways, it sort of does complement the timeline and the development of C2, given it's really more around the copper extraction for that project in particular.
It fits in quite nicely that we can probably deploy the same team doing the work on Hod Maden into C2 as well. There will be maybe some synergistic benefits as we think about it in the future.
Sounds good. Thanks for that color, Rod. Just in terms of the feasibility study, obviously pointed out a CapEx around $300 million. Color you can provide on where you see, kind of, total CapEx kind of settling in with all these inflation pressures we've been recently seeing across the industry?
Sure. I, Ovais, I'm gonna share these questions around, so I'm gonna let Eddie talk to this one.
Hey, Ovais. How are you? , look, our experience in operating in Türkiye has indicated to us that on average, we've seen a 10%-15% inflation factor to that 2020-2021 Feasibility Study number. As such, as we kind of work to update that thinking will go into our analysis. 10%-15% over a 2-year timeframe.
Okay. That's thanks for that, Eddie. Then again, I think, Eddie, in terms of, or Rod, in terms of opportunity to increase your stake in Hod Maden over time, is that something that you're, you know, thinking about internally, or are you gonna assess that as you kind of go through the development of the project?
Look, I think firstly, Ovais, you know, we're.. this is again an extension of our existing partnership with Lidya, who have done a terrific job on the project to date, and we're very complimentary of their work. That's a natural extension for us. You know, with that partnership's evolved over, you know, 10 plus years now into these type of strategic opportunities. We welcome, you know, having a new partnership with Horizon/Sandstorm. You know, going into this, we were comfortable at 40%. If we remain at 40%, we'll remain comfortable as well. You know, there's no burning platform for us to increase it. It's still a meaningful contribution to us as a business.
You know, it's, just because I think because of the quality of it. You know, we welcome actually having, you know, another party, if you like, in our portfolio of partners that we, you know, we wanna work with. At this stage, we're very happy.
Perfect. That's it for me, guys. Thanks for taking my questions.
Great. Thanks, Ovais.
The next question comes from Cosmos Chiu from CIBC. Please go ahead.
Thank you, Rod, and I guess Edward. Maybe my first question is on timeline. You know, I've known Hod Maden for a long time now, and it's always been talked about as a very good project and high grade, and I agree. You know, in terms of timeline, it still hasn't been built. If I were to look back, I think at one point in time, production was gonna start in 2024 and then 2025, and now I believe, you know, Rod, earlier you said maybe 2027. So what has happened? You know, why now? Maybe if you can talk about the timeline.
. Thanks, thanks, Cos. I'll take this one, and then if John wants to pipe in, he can. I think look, I think it's important we, you know, I can't talk about the past on how it was communicated to the market in terms of its timeline to having it into operations. What I can tell you is, you know, since we've looked at it and done the DD on it, the important factor for us is to apply the same rigor that we apply to all of our projects to ensure that we're gonna be very successful when we bring it to market into operation. That requires us to do some more work like we've articulated on the existing feasibility study.
Some of it is to capture, some of the potential upside. But some of it is also to get the fidelity around the actual details to ensure, you know, that years 1, 2, 3 are highly successful and we have a higher level of confidence to be able to bring that into operation. I think that's the sort of, you know, the way we do things, Cos, and I think that's the important, the important factor here. We now have control of it. We need to do it the way we want to do it to make it successful. If it means we take the time to update the feasibility study, I'm sure our partners, and our partners are happy for us to do that piece of work.
You know, patience is a virtue, but when it comes to market, it will be.. you can trust us, it'll be in good shape.
Great. Rod, you know, how much can we depend on the 2021 Technical Report at this point in time that highlighted, you know, $1.1 billion after-tax, $1.3 billion pre-tax? You know, as you said, you're not gonna make a final decision until 2024, and Eddie mentioned, you know, what your experience in Türkiye. What do you need to see? Like, what do you need to see to, you know, go ahead with a positive sort of construction decision and other circumstances that, you know, you might not proceed with, you know, your 10% up to sort of 40%. I guess the other question is, you highlight 15% IRR today, even with the acquisition costs. What if, you know, CapEx goes up and that percentage is kinda eroded down?
You know, is there a point where, again, you kinda just walk away?
That's a, that's a lot of questions there, Cos. Let me try to break them down for you. I'll let Eddie talk about the 15% in a moment. Let's just sort of more talk about what happens between now and project construction approval. What we'll be doing is, again, as I sort of have already mentioned, you know, updating some of the technical assumptions in it and doing the higher level of detail around particularly around operational planning and project execution, similar to what we did at the Çöpler Sulfide project. When we went through the technical report, which was prepared by Lidya Mines, we're very complimentary of the work that they've done.
There wasn't anything in there from a technical perspective that highlighted to us, you know, a risk. It was more that we just needed some more time to do some of the work that we wanna do to make the project successful. I don't think it's a question of, you know, if, it's a question of when next year when we make the project decision. We did factor in elements of inflation. We did factor in elements of opportunities that we saw in through the DD process to get to our final, our final consideration before we pulled the trigger to go into the project.
But I'll give you a sense also, Cos, we are currently as we start to take over operatorship now, continuing with the early stage site works, which are taking place at Hod Maden with about $30 billion to be spent between now and construction approval. I don't think it's a question, you know, do we have an area of doubt? It's really more a question of getting that fidelity so we have a high level of confidence in the execution. Eddie, do you wanna just talk about the IRR?
Thanks. Hey, Cos.
Hi, Eddie.
As Rod said, look, from our perspective, the feasibility study post the extensive due diligence had a high level of fidelity. We were incredibly impressed with the work that was completed on the study, and we did not identify any material flaws in the analysis, and we're going to go away and take our time on optimizing some of the things we've identified in the study, as well as update for market conditions. With respect to our returns, the IRR, which is in excess of 15%, already incorporates our views on capital and operating cost inflation in the project. While we are going to take our time to reflect that in the updated Technical Report Summaries, our analysis and our returns and our board approval processes already accounted for this.
I guess, Eddie, in part, that's the reason why the 2021 Feasibility Study highlighted a +30% IRR, and you're saying, you know, +15%. In part because there's the acquisition cost as well.
The plus 15% is inclusive of the $270 million nominal acquisition price, which on an NPV basis is around 250. With respect to the project level IRRs, they continue to remain above the 30% threshold post due diligence, after accounting for updated commodity prices as well as the improvement optimizations we had found during our due diligence exercise and some of the inflationary pressures and market conditions that we've also reflected.
Great. Maybe one last question. I'll jump back in the queue. Exploration potential. My understanding always, has always been Hod Maden. There seems to be a high-grade sort of zone, the high-grade breccia zone in the middle, surrounded by like a lower grade halo. Is that sort of still the understanding, or are you finding, you know, better stuff, through your exploration or are you not there yet?
I'll let John take this one, Cos.
Hi, Cos.
Hi, John.
For the main ore body, yes, it's structurally controlled, and it's very well defined in what the project is based on. Around the 3,500 hectares we've got, there are the targets identified, and they are similar controlled anomalies that we're seeing in the geochem, and they're along the trend of the main Hod Maden ore body.
Okay. So are you finding more stuff, or do we need to find more stuff, or are we really just focused on the 13 years right now in the high-grade core for now? Is that what you mean?
, I think what we're focused on is the defined resource reserves cost as they currently are. What we also identified during the due diligence was other exploration techniques which we think are applicable to other areas on the property. That's really, I think, where we generated the excitement that, , the previous joint venture was really focused on getting this project to market. Now we will still do that, but we'll also start looking at some of the other opportunities on the property. It's certainly prospective.
Of course. Thank you. Those are all the questions I have. Thanks once again.
Good on you, boss. Thanks.
The next question comes from Lawson Winder from Bank of America Securities. Please go ahead.
Hey, Rod and Eddie. A very intriguing transaction. I wanted to ask, first of all, on the synergy comments in the slide. What are they? Are you able to quantify them? Did you factor those into your IRR analysis at all?
It's, it's simply the synergies around the fact that we've got an infrastructure and a presence, you know, within striking distance to Hod Maden. You know, we've already got a team, we've already got the anchor structure, we've got a corporate overhead, we've got a supply chain. And all of that will be shared through the operatorship, which I think is important. The presence around the exploration on in country. The fact that we've got our project development group still within Çöpler that will be used, et cetera, et cetera, et cetera. Some of these synergies are the intangible ones, I think, Lawson, to think about it like that.
There will be clear, tangible benefits that we will, enjoy as we execute the project. We did not build any of that into any of our analysis. I mean, that's upside to be had later on.
Okay. Fantastic. Also wanted to ask about the remaining spend. How much do you guys anticipate spending between today and making a final decision and completing your feasibility study? Rough idea, what have you guys factored in for CapEx from decision to first production?
I'll look at the up until construction decision, Lawson, it's on a 100% basis, it's $30 million. That will take us up to a construction decision. That'll allow us to continue with the site works that are already underway to connect to the power grid, and do some of the roadworks to connect to the freeway. Then the work on the actual feasibility study itself. That takes us up to that decision. Then Eddie, do you wanna answer the next one?
, sure. 2 separate, I think, you know, answers to your question. The first is, in terms of our payments, that are coming through, the $120 million of acquisition price to gain the 10% ownership and operatorship was paid today. The remaining $150 million will be payable between construction decision in 2024 and commercial production in 2027. That will be paid pro rata to capital spend. It's on a very predetermined schedule. In terms of the capital payments, we will fund our 40% share of capital. As I said, earlier on the call, to Cosmos' question, the feasibility study in 2021 identified a $309 million capital figure.
What we've seen is approximately a 10%-15% annual inflation in Türkiye since that time.
Okay. Fantastic. Then what are you guys assuming for life of mine average recovery rates?
Do you want to take that one? That's probably it.
We're assuming what's in the feasibility study, which is approximately 85% for the gold and 93% for the copper.
Okay. Then is there any debt that you guys are assuming with this? Or is this sort of clear and free of any liabilities or assets, I guess?
The asset itself is clear and free of all liabilities. There is no debt being assumed. In terms of funding the construction as well as the purchase price payments, some of that will be funded via debt. As we said, the project itself can support a potentially a project finance facility, as well as some of our acquisition payments, which we intend to fund via debt.
If I could, just two more. What are the key outstanding permits, first of all?
Yep. The, as we mentioned, the EIA has been approved or was approved already. From that point, the normal permits around operations, some of the private land acquisitions are well underway, that will complete. That's really the biggest ones, it's more normal course from this point, Lawson. I think if you just think about it that way, you know, having the EIA was really the most important one to get behind us. Clearly it's de-risked from that perspective.
Okay, great. Just finally, like, kinda stepping back, like, this is really intriguing acquisition. It makes sense. It's consistent with what you said. When you look around the jurisdictions in which you operate, do you see additional opportunities like this? Particularly, do you see more opportunities to grow further in Türkiye? What about the other jurisdictions?
Look, it is not only intriguing, I think it's compelling actually, Lawson. I think the fact that after acquisition costs of $270 million, that we can still generate, you know, a +15% IRR is amazing. I haven't seen any deals, you know, in the last two years at least, of asset acquisitions that are, you know, pre-operations that have had the same type of quality returns. From that perspective, it's fairly compelling to us, and that's really the reason, you know, we wanted to pursue it. Our own experience around some of the due diligence we've done on other opportunities hasn't turned up anything close to the returns of what this one has in our core jurisdiction.
You know, it does set itself apart. It'd be nice to find more of them for sure. You know, they're hard to come by after acquisition cost is usually the part that kills the deals.
Can I maybe follow up and ask, do you still have appetite to do more M&A if the right deal comes along?
Look, I think what we've always been very clear on is, you know, we have a strategy. We have a process. We have a clear objective to grow the business. If the right opportunity presents itself in the right frame for the business that's on strategy, which Hod Maden is, we will bring it to market. You know, we have that capacity in the business to be able to do it. The answer to that would be yes. You know, I think it's more difficult to find as we've, you know, found over many years now, these types of, you know, unique and fantastic outcomes. That's just our job, is to keep on uncovering them. , definitely.
Great. Thanks very much.
Thanks, Lawson.
The next question comes from Justin Stevens from PI Financial. Please go ahead.
Hi, Rod and team. I think most of my questions have been answered already, but a couple last stragglers here from me. As a project operator, is the construction decision and timing associated with that yours alone? Also, is there a dilution mechanism if one of your joint venture partners doesn't fund their full share of the capital?
Look, the process up to the construction decision will be obviously very collaborative with our joint venture partners. It won't be a surprise that we get to a date, and we make a decision and then announce it. It will be a collaborative effort up to that. Ultimately, it will be the SSR board that will make the decision to move ahead. , that would be the process as we set it out. What was the second part of the question?
Dilution. . Hey, it's Eddie. Justin, how are you? Yes, there is a dilution mechanism that's in place under the tri-party shareholders agreement that would allow for dilution in the event that a party is unable to fund its share of capital. Our understanding at this stage is that all three parties are capable of funding their share of capital.
For sure. . I just, I know Horizons only got, you know, they've got a decent amount in the bank, but they're probably not 30% of, you know, $300 and some odd million. I'm sure they could get there if they need to.
. We intend obviously, Justin, as part of the financing of the project, to arrange a project finance facility at the asset level will help assist the financing of the project for the joint venture.
For sure. Last one from me. Do you still see the likely path for the pyrite con being an overseas buyer, or is there potential maybe to treat it in country given the existing autoclave operations at Çöpler? You know, especially if that operation might be moving towards being more of a copper project and having a sort of a waning sulfide gold feed stock. Any opportunities there?
I'll let John answer that one.
As part of the tech report update, we are engaging with the market again and look for the best place to sell the pyrite. We'll explore in-country and international opportunities there.
Got it. Great. That's it for me. Thanks.
Good on you. Thank you, Justin.
Once again, if you have a question, please press star then one. The next question comes from Mike Parkin from National Bank Financial. Please go ahead.
Hi, guys. Did the structure of the payment have any weighting on just the ability to leverage in-country cash flow and avoid incurring any kind of repatriation dividend tax back to the North American unit? Just seems quite advantageous for you to have a perfect use of that cash for the next several years, assuming you go ahead with the construction decision.
Hey, Mike, it's Eddie. I'll take this one. , that's a very good observation on your part, certainly was a key part of our negotiation and agreement structuring, where we do have the abilities to fund the payments from in-country and to avoid any repatriation or withholding taxes as needed on some of those funds. In addition, we are looking at financing in-country both for the milestone payments and the capital contributions.
All right. Good. Then just with respect to the EIA, Does it kind of put you in a position where you rather move ahead with as designed rather than discovering something else and requiring an amendment to it before you're producing?
We found no issues with the current project design and the overall content of the project in line with the EIA. The JV partners and Lidya have done a great job at defining this project for us to optimize and really, as Rod said earlier, define the baseline for project execution decision for us to move forward with. We don't see any major-
I'm just thinking more from like an exploration upside. If you found additional ounces through one of these regional targets, would that be a bigger challenge to, you know, get an EIA that supports that if you're not producing, and therefore maybe you're gonna hunt for some of that bigger fish potential after you're cash flowing out of this asset?
I think it's just simply, look, if that opportunity did present itself through a pretty rapid discovery, that would mean, , it would necessitate, like Chirala does, a refresh to EIA or a new EIA, depending on what it is. You know, that's, that's for the future, I think, Mike. I think we sort of have straw manned out, you know, all of these different pathways. The beauty of what we have is we understand the processes and how to go about our business in country very well, clearly. If it does present an upside and it did require a new EIA or a refresh EIA, we'd tackle it then.
At the moment, we're focused on the project and, within the, as John mentioned, within the current EIA as it is.
All right. Thanks, guys. It's a deal.
Good on you. Thanks very much, Mike.
Thank you.
This concludes the question and answer session. I return the call back to Mr. Antal.
Great. Thanks, everyone. Look, I really appreciate you joining us today. Clearly, we're very excited by this transaction. It's gonna be a terrific deal for all of our stakeholders, and we look forward to talking more about it in the future. With that, say good day to you all. Thank you.
This concludes our conference call. Please feel free to disconnect.