Good morning, welcome to Wesdome Gold Mines' Kiena Preliminary Economic Assessment conference call. I will now turn the call over to Heather Laxton to begin today.
Thank you, operator. Good morning, everyone. We hope you're all keeping well, and we thank you for joining us today. I'll just cover off a few housekeeping matters here before we begin. First off, during this presentation, we'll discuss our business outlook and make forward-looking statements. These comments are based on our predictions and expectations as of today. Actual events or results could cause outcomes to differ materially due to a number of risks and uncertainties, including those mentioned in the detailed cautionary note contained in yesterday's press release. Please note that the preliminary economic assessment for the Kiena Complex is based on the updated mineral resource estimate prepared as of September 25th, 2019, and filed on SEDAR on November 8th, 2019.
The PEA is intended to provide an initial high-level review of the project potential and design options, and the economic model and mine plan include numerous assumptions, including the use of inferred mineral resources as permitted in National Instrument 43-101 for PEA studies. There is no guarantee that inferred mineral resources can be converted to indicated or measured mineral resources, and as such, there is no guarantee that the project economics described in the PEA and during this call can be achieved. Please note that all figures discussed on this call are in Canadian dollars unless otherwise stated. The full PEA will be filed on SEDAR and posted to the company's website within 45 days of yesterday's news release. Finally, the slides used for this presentation and a recording of this call will be posted on the company's website. I'll throw it over to you, Duncan.
Well, welcome everybody. If we go to slide number four, what we see here is the company strategy. Really, the company strategy is quite simple. First and foremost, expand production sustainably from the Eagle River Mine, increase our reserves and resources through an aggressive exploration program, optimize the operations in order to drive value, and produce at a minimum rate of 100,000 ounces per annum and continue on our trend of incremental increases. The second pillar of our strategy is to bring the Kiena Mine back into production and establish a high-grade, low-cost operation capable of producing at 100,000 ounces per annum. This independent PEA indicates at a high level those criteria have been met. We believe the pre-production cap that is required for a potential restart is entirely self-funded with free cash flow from the company's operating asset, the Eagle River Mine.
Additionally, the company's balance sheet is strong with CAD 49 million in cash and equivalents as of March 31st, 2020, and an available CAD 45 million revolving line of credit associated with no debt. The results of this PEA are very supportive to our strategy that Wesdome has the ability to become Canada's next mid-tier gold producer. Despite COVID-19 setbacks and challenges, the company intends to deliver an updated resource in Q4 and start work immediately on our next phase, which is the pre-feasibility study, which is intended to provide us with a construction decision. The assets I mentioned, both of them are in world-class mining jurisdictions, Ontario and Québec. The company's third asset is the Moss Lake property, which is also located in mining-friendly Ontario. However, the company's focus so far has remained on the assets which can quickly deliver value.
The company has not suspended production guidance and currently intends to produce 90,000 to 100,000 ounces through extremely challenging times. This will also serve to bolster our balance sheet, especially in the gold market we are currently experiencing. I take this opportunity to thank our employees and contractors for working safely through the COVID-19 pandemic. Challenging, to say the least. Let's get into Kiena. As we know, Kiena Mine was a great past producer with a great address, 10 km outside of Val-d'Or. 12.5 million tons at a grade of 4.5 grams or 1.75 million ounces produced. All the required infrastructure is in place. The 2,000 ton per day mill, the 930 meter deep shaft, the ramp system going down now to nearly 1,100 meters below surface, and the tailings management facility, all operational.
The mine has never been flooded despite being put on suspension since September of 2013. Additionally, all permits are in place to conduct our advanced exploration program and the resumption of productions. Looking at the resources considered for the PEA, the company took the decision to include only those resources proximal to the mine infrastructure. Since resuming underground exploration in 2016, our focus has been exactly that and an emphasis, of course, on the high-grade A Zone. Since our last resource update at Kiena, we have been very focused on the A Zone plunge extensions and the conversion of the inferred mineral resources up into the indicated mineral resources category. Since the upcoming PFS can only consider measured mineral resources and indicated mineral resources, we wanted to ensure there would be no disjoint with the inclusion of the remaining resources on the Kiena property.
Our intent is to come to a restart decision and become an established producer, meanwhile commencing a systematic evaluation of the remaining resources. What we see here are those resources. You can see the model wireframes within the Kiena Mine, and you see the proximity to existing mine infrastructure, which have been considered for this PEA. With that, we'll hand it over to Marc-André. Marc-André, go ahead.
Thank you, Duncan. Good morning, everyone. Slide number nine shows a short summary of the 43-101 PEA. The price of gold used for this PEA was $1,532 US at an exchange of 0.76 US/Canadian, which represents CAD 2,016. The price of gold, Wesdome decided to engage an independent firm called CPM Group to provide the long-term price projections for the PEA. CPM Group is based in Brooklyn in New York. The discount rate for this PEA was 5%. You see a quick snapshot of the mineral resource, indicated and inferred, a total of 850,000 ounces. Grade caps between 20 grams to 200 grams. You see the technical information for the indicated inferred based on the drill spacing. Of course, the majority of those resources are from the Kiena Deep. The total of ounces from the Kiena Deep was 737,000 ounces, which represent 87% of our mineral resources.
Stope shapes for the PEA were done with a software called Deswik. D-E-S-W-I-K. Deswik stope optimizer software generates optimum configuration of stopes for underground mining. An extraction factor, a mining extraction factor of 90% was used for the Kiena Deep and 80% for the other zones. The 90% for the Kiena Deep is higher, mainly because of the good continuity of the zone. You see the breakdown of the dilution for each zone. The dilution grade used was 0.0 grams per ton, and a higher dilution factor was applied to the Kiena Deep, mainly due to the presence of the schist in some of the zones. The mill recovery used for the PEA was, of course, based on the historical mill recovery for the other zones. Part of the PEA, we've done some metallurgical testing with SGS Lakefield, located in Lakefield, for the A Zone.
The metallurgical testing has demonstrated that the current mill circuit, which is a basic cyanide and CIP circuit, is very well-positioned to maximize the gold recovery for the Kiena Deep. We use a mill recovery of 97% for the PEA. Total life of mine for the project, as it is with the current resource statement, is eight years. All right. Next slide. This picture shows the Kiena Deep. As you can see, we have about 600 meters of vertical ramp to develop. What you see on top in gray is the current development ongoing at the Kiena Deep, below 1,050 level. Development is underway. Underground development is going to be the main capital expenses for the project, mainly in the Kiena Deep and in the VC Zone as well. The Kiena Deep zone has been divided in seven zones, for five level each for the 35 levels.
Each mining front will become in production as the ramp goes down. The development rate used in the Kiena Deep is 11 meters a day. Ventilation rates will be developed from top-down as the ramp go down to sustain production. Next slide. A quick look on the life of mine production. What you see on this table, you see the production, tons, grades, ounces, mine ounces, sorry, for each zones for each years. As per the PEA, the development starts in 2021. The production basically ramp up from a low tonnage and up to 800 tons per day over the years. The first full year of production is 2022, and at the beginning, we see the contribution from the other zones, and it ends in 2026, when the production comes from 100% from the Kiena Deep at this time.
The daily tons from the Kiena Deep vary from 250 tons per day at the start, up to 720 tons per day near the end. Next. This shows the production tons per year. The blue bars are the ore from the Kiena Deep, and the other color is the contribution from the other zones. As you can see, 80% of the tons are coming from the Kiena Deep. The average tonnage through the life of mine is 684 tons per day, with a peak of 870 tons per day, for 310,000 tons per year. Future mining, with basically long hole mining. This mining method has been used in the past at Kiena in the S50, with success. We are also using the same mining method at Eagle, so we believe we have a pretty good handle on this mining method.
All the ore in the Kiena Deep will be hauled by truck to the shaft, to the existing shaft accesses already established in the mine. All the waste rock generated from the development will be used for backfill underground. We also have a backfill system on surface, which will allow us to send the tailings material back into the underground voids. The overall strategy is to maximize throughput from the high grade of the Kiena Deep zone and to augment the production with the other zones. Next slide. Production forecast. This slide shows the ounces mined over the years. Of course, again, Kiena Deep is 91% of the mined ounces come from the Kiena Deep. The ounce profile increased over the year, of course, as the production increased from the Kiena Deep and the grade also actually increases as the production from the other zones declines.
To eventually reach a mine production over 100,000 ounces a year, with the contribution of the Kiena Deep zone. A quick look at the operating cost. You see here the breakdown for each department, the mine, mill, surface, and G&A. The operating cost used for the PEA was CAD 163 a ton, which includes definition drilling. I'd like to note there's no royalty cost at all at the Kiena for the Kiena Deep. The operating cost was basically based on the historical information and also on our good knowledge of the operation since we've been there for a long time. There is an additional cost there related to the tailings management of CAD 275 a ton, which will come with the new tailings facility that will commission eventually in 2024. Let's have a look at the capital cost.
As Duncan mentioned, it's a fairly low capital cost, pre-production and sustaining. The pre-production cost for the Kiena Gold project is estimated at near CAD 44 million. That includes the indirect and the contingency cost. The contingency cost was applied on some items where additional study is required. The pre-production capital expenditure includes refurbishment in the mine, the process line, plant, mine development, mining equipment, engineering, and fields program. There are CAD 8.9 million sunk costs included in the pre-production, which basically will be spent in 2020. That money is going to be spent this year as we are doing some underground work in the main ramp, the Kiena Deep, and also in one of our main exhaust ways. Site reclamation cost, which is CAD 3 million, is on top of this existing CAD 7 million obligation.
If we remove the sunk cost and the site reclamation cost, we come with a pre-production cost of about CAD 35 million-CAD 36 million. The total sustaining cost for the project is estimated at CAD 121 million, which includes CAD 5.6 million contingency. There is no exploration cost as it is in the capital cost. The mine sustaining cost of near CAD 93 million, which consists of the bulk of our capital cost, includes underground development, equipment purchase, and construction work. As I mentioned, a new tailings storage area will be required for the long term, and a new water treatment facility will be built as well. The cumulative life of mine expenditure costs include pre-production and sustaining of CAD 165 million. The cumulative life of mine forecast to spend amount, which includes reclamation and closure bond and excludes sunk costs, is estimated at CAD 158.7 million.
The mine capital cost, as I was explaining, is the major capital cost of the project. Development, of course, is a key in the Kiena Deep and in the VC. It's mostly ramps and ventilation raisers. As it is at Kiena, we do not have a lot of equipment, so in the PEA, we included the new equipment fleet, which will be composed of jumbos, scoop, haulage trucks, production drills. Construction work, basically, as you know, we have an existing mine. We have a shop. We have current infrastructure. As we go down, we have to develop an escape way, and eventually, as we get deeper, we will need another shop facility in the Kiena Deep. Let's talk a bit about the mill and the TMA facility. The last time the mill was in operation was in 2013.
The mill has been put in plant maintenance properly at that time. In the PEA, there's only CAD 4 million of repairs to put the mill back in operation, which consists mainly on electrical upgrades and some repairs on the CIP tanks, and of course, purchasing of the equipment and supplies. A detailed plan restart audit was achieved during the PEA process, and we are at the stage to do the planning and the engineering to recommission the mill. We have remaining capacity in our existing storage facility, which consists of the north and the south basin, and a polishing pond. It is expected to reach the capacity in about four years after the restart of the operation. Of course, it all depends how much tailings we are going to send back underground for backfill. In the PEA, we assume there was 38% of the tails going back underground.
In 2024, a new facility will be required to store tailings that will be generated for the future. This tailing, what we're looking at is a dry stacking facility comparable to what we have at the Eagle Mine, which will allow us to store tailings with cyanide- free. We are working at the moment with a consultant on the permitting of this facility. Next is the sensitivity analysis, after-tax 5% discount. Of course, as you can see, the price of gold has the most significant influence on the NPV compared to the other parameters based on the range of values evaluated. After the price of gold, the NPV is mostly impacted by changes of the exchange rate, U.S., Canadian, as we sell our gold in Canadian dollars. To a lesser extent, by a variation in operating and capital cost.
What is interesting is the economic viability of the project will not be significantly impact by the variation in the capital and operating cost within the margin of error associated with the PEA cost estimate. At current gold price today, the NPV is more than CAD 425, sorry, CAD 525 million Canadian at current gold price. I will now turn the call to Mike to talk a bit about the next steps.
The next steps really for the project, we want to continue on with the drilling, of course, and the conversion of inferred to indicated resources. We want to proceed to the pre-feasibility study. As you know, a lot of parts of the PEA have been done to almost a pre-feasibility level. There is a lot of work still to do on the metallurgical test work, some geotechnical work, which is going to involve some drilling and some geotech logging, some hydrogeology, some additional environmental and permitting, particularly around the new tailings facility. We're going to update the resource estimate. Really, I think on the exploration side, I think that we're as happy as we've ever been. Certainly, we've resumed drilling now as of May 11th.
Prior to the suspension in March, seven underground drills were in operation, really tasked with infill and the up-and-down plunge extension drilling of the Kiena Deep A Zone. This drilling has continued to confirm the overall continuity of the A Zone and successfully identified additional mineralization outside of the most recent resource estimate, which was used in the PEA. The A Zone now extends down plunge in excess of 830 meters. Since the September 2019 resource estimate used in the PEA, a total of 47,800 meters and 164 new holes have been drilled. As you can see from the recent press releases, this drilling is expected to expand the September 29th resource base. We plan to use this drilling as well as the current drilling we are doing to update the mineral resources in Q4.
Two of the seven drills have been positioned in the new 79 level exploration ramp and are now following up on several encouraging drill results in the potential up-plunge extension of the A Zone, as well as the down-dip extension of the VC Zones between the 67 level and the 105 level. It is interpreted that the VC Zones are folded as they extend down plunge to and possibly could connect with the A Zone. The 79 level exploration ramp could also serve as a haulage strip for any future production from this area as it accesses the main shaft level dump pocket. Over the past several years, our primary focus has been the Kiena Deep A Zone.
Although it remains the focus of the drilling to add additional mineralization, we have also started to work on the remaining eight historic zones on the property that have returned positive results from limited exploration. In total, on the Kiena property, the resources all together total 2.83 million tons at 8.7 grams per ton for 790,000 ounces in the measured and indicated, an additional 798,000 ounces in the inferred category. In addition, we have commenced our property-wide exploration campaign, which includes updating the geologic interpretation, which is really important given that the A Zone represents a new style of gold mineralization on the property. A regional magnetotelluric geophysical survey has been completed on the lake ice covering the Kiena deposit and the immediately surrounding volcanic rocks. The survey was designed to identify deep structures up to 1.5 km below surface.
This data, combined with the airborne mag and historic drill information, has identified a number of new and exciting exploration targets and will be the testing that will be done later from surface drilling. Over to you, Duncan.
Great. Thanks, Mike. In summary, I think what we can see here is that it's quite compelling currently with the parameters that we've used. I think that in retrospect, because we have been operating the Kiena Mine for a number of years now, we really do have a good confidence in the parameters that we've used. There's always going to be some unknown, and of course, we're going to definitely address those areas and get some comfort around that within the PFS process. I think overall, I would have to say that this assessment's been conservatively done. Again, I emphasize that our operating experience at Kiena Mine certainly does give us some confidence in moving forward here into the next phases of the resource update and the PFS. I think with that, I'd open it up to some questions and answers.
Operator, can you please remind everybody how to ask a question?
At this time, if you would like to ask a question, press star one on your telephone keypad. To withdraw your question, press the pound key. We will pause for just a moment to compile the Q&A roster. Your first question comes from the line of George Topping with Industrial Alliance.
Great. Thank you, operator. Marc-André, just a couple questions for you here. The three-meter minimum thickness, I saw that in the slides, do you know roughly, ballpark, what's the average over the eight years for the average mining thickness?
You mean in the past, George?
Well, no, in the PEA plan.
Yeah. I believe it was the average overall. It varies from basically 3 meters - 8 meters. The average is probably around 4 meters or 5 meters.
All right, great. No real changes there. Good. Next, just on the long hole, the dilution that was settled on for the PEA, for the grade dilution. Are you getting grades coming in from that dilution or are you counting it as zero?
I think what we put in the PEA, George, is very conservative. You cannot go lower than zero, so zero is fairly conservative. One thing we noticed, George, is in those DSO shapes, there is actually internal dilution included as well. As we progress through the project with more detailed design. We believe that we can improve on that for sure, at maximizing the ore recovery and minimizing the mine dilution.
Yeah. The dilution used, I didn't see it. Maybe I missed it.
At 21% for the Kiena deposit.
Got it. Thank you. Lastly, before I hand it over, just on the mine plan, how far ahead of production will you run the ore reserve development? Will you be able to get a year ahead when you're starting up?
What has been done, George, is a very high-level mine planning and mine design. Of course, that's something that is going to be optimized at the PFS level. What it is now, it's based on development productivity assumptions, and the key asset is the main ramp. As the main ramp goes down, and I believe the productivity used in the PEA for the main ramp is about 150, 160 meters a month. That is the bottleneck, if I can say that as the main ramp goes down, it will allow to open more mining front, more mining stopes. The key is definitively the ramp, and we believe in our current PEA, there's lots of potential to optimize and maximize the production from the Kiena Deep.
Okay, good. Thank you.
Your next question comes from the line of Don DeMarco with National Bank Financial.
Well, thanks for taking my call. Good morning, everyone. Just had some questions about your rationale for the throughput. I see that the throughput commences around 350 tons per day, and then gets up to about 850. Are there any constraints that are stopping you from getting to greater than 1,000? Maybe it was just mentioned about the main ramp, but if you could just add any more color on constraints getting throughput high.
Well, it's all based on assumptions, Don. The main ramp is one, and it's all about productivities and the mining cycle. That's something, again, that we believe we can certainly optimize and improve. Our overall strategy, Don, is going to maximize throughput from the higher-grade Kiena Deep zone. That's gonna be our main focus and that's what we're gonna be working on. If you look at the table in detail, you see that the production goes much higher in the Kiena Deep once the development is completed. There's probably some optimization work to do there to maximize the development productivity, the usage of waste rock for backfill to short the haulage distance for trucks. Those kind of things that we'll be looking at in detail in the PFS. We definitively see opportunities to increase the throughput.
Great. Just to sort of highlight that AISC, I see life of mine average just over CAD 500 an ounce. Pretty remarkable. Can you tell me a little bit about how the AISC varies in the early years of the mine plan? I think you got lower grades then versus later years.
I'm not sure if I understand your question, Don.
I can take that, Marc. No, definitely, Don, as obviously production rates are lower and the ounce production is lower. Our all-in sustaining will be higher. I don't have it in front of me right now. The full report is, of course, going to come out probably in June, I would think.
Okay.
I would totally expect that, obviously, when we sort of hit our mark of over 100,000 ounces. I think the thing to emphasize here, though, really is this is a conservative base case. I got to tell you that the team at Kiena is salivating to get their hands on the stope optimization and actually carve out the mining shapes within Datamine. As Marc mentioned before, the Deswik stope optimizer is a good tool on a preliminary basis, I would say, that's never how you would I don't think we do a production plan and go right into mining like that. We do see a lot of opportunities within this. The other opportunity, of course, is exploration, okay?
I think that, by the time we come to do the PFS, any sort of additions we have above the 1,050-meter level, I think are just gonna be so additive to what we are, and especially in the early days of this. I'd look for that in the upcoming resource estimate.
Okay. Well, thanks so much, and congratulations.
Great. Thanks.
Your next question comes from the line of Phil Ker with PI Financial.
Good morning, everyone. Most of my questions were already answered, but if you could just maybe follow up and elaborate on the potential optimization of the ramp and bringing in some of that Deep A ore earlier on in the mine life, that'd be great.
The key, it's to get to cycle development heading every single shift, every single day as you get deeper. We're working with a contractor at the moment. We are in the ramp at the moment, so we are improving our systems, development productivity, moving the waste, gas clearing. It's all work that is ongoing as we speak, as we are trying to improve the productivity as it is. I think the key, I don't want to repeat myself, but the key is going to be to keep the waste under ground. Reduce the haulage, speed up the mucking cycle, the development cycle, and also allowed us to continue mining as we are going to backfill the stope with waste. I think that is definitively a key. Ventilation is important as it is with the current ventilation system. We do have enough air.
We will need some upgrade. In the long run, electric equipment could be used. It's not considered in the PEA. That's something that will be looked at in the PFS level. The electric equipment will allow us to use, obviously, more equipment in the Kiena Deep with the same amount of fresh air. That, I think, it's something that we really need to look at to maximize the development going down in the Kiena Deep.
Just touching on the limitations of the production volumes, particularly coming from Kiena Deep. What limitations, just given the likelihood of large size stopes down there, what's limiting the volume from increasing and to better utilize the 2,000 ton per day capacity at the mill?
It's the ramp, the haulage distance, basically. It's something we are experiencing at the Eagle Mine. It's the same thing, every single mine, as the ore gets deeper, the haulage distance gets longer. You really have to optimize your haulage production activity.
What about with the ongoing exploration success, both testing up plunge and even down plunge, you are getting obviously deeper in the system. Based on the timeline of receiving some of the results, is there an opportunity to evaluate perhaps internal winze or something to increase those volumes and reduce the dependency on that ramp to bring up that deeper ore faster and more effectively?
Discovering the up plunge would make a significant change in the production of the mine. We actually have resources in the VC zones from level 67 down to almost level 100. The addition of the up plunge from the Kiena Deep would be located in the same area of the VC zone. We will have the existing ramp already in place with more additional ore to mine. That'd be significant. That'd be a game changer for the project. Maybe Mike can talk a bit more about that.
Certainly, with the completion of the exploration ramp on 79 level, we have two drills there now, which are chasing the VC down and also going to be testing the potential up plunge of the A zone. I would like to think that in the next several months that we could hopefully get onto some new mineralization in this area and really drill away at that at a good pace so we could include that in the next resource update. We're going to be updating the Kiena Deep resource sometime in Q4. That's our current plan. If we could find any mineralization in that plunge area, we certainly would like to include that in the resource as well before going into the PFS, because obviously that could have a very positive impact. We're hopeful we're going to find more mineralization there.
We have a good geologic model, now it's really about drilling the hole. That's what we're doing now with the seven rigs.
Okay, great. Just final question, I guess, would be related to the mill and turning that on. Are you looking at the latter half of 2021, more like processing a bulk sample and working out the tweaks in the mill?
Where we are now at the mill. We are actually at the engineering planning level. The mill is in fairly good shape, and we believe we can get that mill start up fairly quick. Our key priority now on the ground is to develop exploration accesses and establish vent raises. That's our current plan. We're not going to be that far away from the ore. It's something that, as it is, we do not plan, but we could certainly access the ore in a fairly close future. Maybe Duncan can add something on that.
Yeah, I think, Phil, there's definitely merit to us getting into some of this deep ore. We definitely want to examine the geotechnical. I know we'd love to have a look at the geology, really see what we have. Of course, the processing of that could be the final phase, more or less for, I suppose, mill test and just basically grade confirmation. However, we don't look at the mill as being a bottleneck. We're quite convinced the mill's in really pretty good shape. I think that, as Marc-André alluded to, the fact that we're doing the engineering on it and have really only identified very relatively minor rehabilitation or restart things to focus on, I don't believe it's going to be an issue.
Okay. That's it for me. Thanks a lot.
Okay. Bye.
Your next question comes in the line of Barry Allan with Laurentian Bank Securities.
Hi, good morning. Mike, you've already touched on it to a certain extent, but I'd like to get a little bit more specific. What I'm trying to really visualize is the vertical plunge of the resource that was used in the September estimate compared to where you are now, where you say you have about 830-odd meters of vertical plunge, and where you will be at the time you have a cutoff date for the updated resource. Could you walk me through those three steps?
Certainly. I would say in the September resource, since that time, we've probably added about 100 meters down plunge with the drilling. Really, we've had some pretty spectacular results down there as you've seen, and we're infilling that because what we'd like to do in this resource, really it was about 50/50 indicated and inferred. With the five drills we've had underground, we did do the extension drilling on the A Zone. We know it's there. Then we sort of pulled back a little bit from expansion to more infill drilling, because we'd like to take that 700,000 ounces of indicated and inferred that was used in the PEA. We're going to add to that for sure with the drilling that we've done.
What we'd really like to do is get enough infill drilling done so we can take all the numbers in the PEA, get them into indicated status, so that when we go to a PFS, then we can use all that to convert into a reserve. That's really our goal now for the next five or six months of drilling with those five rigs. At the other end, the two drills are really the up plunge. I think we're probably going to add some ounces on VC compared to what we had before, which is good. We're certainly testing in that up plunge area of the A Zone where we had some good hits, but it's a little bit more complicated than what we found on the A Zone. The A-zone was complicated, too, when we first got in there.
Now we understand it seems easier, hopefully with more drilling, we'll get this all settled and add to the resource base on both ends. Really, it's a lot of drilling that we've got on the books now. We're going to see definitely increased proportion of indicated and more ounces, I'm pretty sure of that.
Right. Could you just remind me, Mike, the gap between where you think the VC bottoms out at and the top of the deep A Zone?
Right now, I think in the resource, we were maybe 100 meters deeper or so than the 67 level. Of course, our exploration ramp is on the 105 level, so that's about 400 vertical meters or so. I would say for the PEA, we were maybe down about 100 meters since then. You can see from some of the drilling results we've had, we've extended it down past the 79 level now. We're down around 100 level. We've actually brought that down, say, 250, 300 meters now. We're still drilling in there right now. That's going to be an add, but the really high-grade A Zone stuff we've brought up above the 105 level, maybe to around the 100 meter level.
If we could connect those two or if they're parallel zones, but in between the 400, sorry, the 67 level and the 100 and 105 level, yeah, that would really be great because then we'd be buying more zones off one particular horizon between 67 and 105, and our ounces per vertical meter would start to go up because now we're mining two zones off the same level. I think that could be really positive, but we're really just getting that drilling going now, and it's going to go pretty fast because that 79 level exploration ramp we put in was really going to help us a lot for drilling that because the holes are shorter. They're at good angles, they're not going to get stuck in any ultramafics in the area and stuff.
I think that two or three months back, we'll have a pretty good idea for what I think we've got in front of us. A couple of months of infill drilling that, and we could add that onto the resource as well.
Okay. Just finally, are there any real deep holes planned in this program before the next resource, or are you going to largely keep it to the infill when it comes to the deep zone?
Right now, we're really concentrating on the infill, but it's hard to keep off some of that stuff at depth there because we've got some good ideas about where it's going down plunge and the intersection with the B Zone. They're all ideas that we have. If we're in the right position, certainly as we put this exploration ramp further down, because right now we're coming down from 105 down to the 109, then 111 areas, and that's all being done in the mafics. It is a great area to drill from. I think if we can maybe get a rig in there just to take a couple shots at some deep stuff, I think we probably will. Really the focus is on infill for sure.
Yeah. Okay, great. Thanks, Mike.
There are no further questions. Thank you, ladies and gentlemen. This concludes today's conference call. You may now disconnect.