Good morning, everyone, and welcome to the Wesdome Gold Mines fourth quarter and full year 2018 financial results conference call. I will now turn the call over to Heather Laxton to begin today's call.
Great. Thanks, operator. Good morning, everyone. We appreciate you all taking time to join us today. Before we begin, we'd like to take this opportunity to remind everyone that during this call, 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, in the company's management discussion and analysis dated February 21st, 2019. Both documents are available on our website and on SEDAR. Please note that all figures discussed on this call are in Canadian dollars, unless otherwise stated. The slides used for this presentation and a recording of this call will be posted on the company's website.
Here in the room this morning, we have Duncan Middlemiss, President and CEO.
Good morning.
Ben Au, Chief Financial Officer.
Hello, this is Ben Au.
Marc-André Pelletier, Chief Operating Officer.
Hello, this is Marc-André.
Mike Michaud, Vice President, Exploration.
Good morning.
Lindsay Carpenter Dunlop, Vice President, Investor Relations.
Good morning, everyone.
With that, it's over to Lindsay for a review of the agenda for today's call.
Thanks, Heather. We will begin today with Duncan going over our 2018 results and 2019 guidance. Marc-André will provide a more detailed operational review. Ben will then take us through a financial review. After this, Duncan will discuss the Eagle River Complex reserve update. Mike will detail the resources and upcoming exploration strategies. Duncan will conclude with a summary and outlook before we open up the line for the question and answer session. Duncan, please go ahead.
Great. Thanks, Lindsay. First and foremost, I'd like to congratulate the Wesdome team for delivering a solid year, incorporating safety with strong operational and financial performance. On behalf of management and the board of directors, I just wanted to thank everyone for a job very well done. We started 2018 thinking we would produce about 62,000-68,000 ounces from the Eagle River Complex. After the second quarter, we were already 15% ahead of our own internal budget, with year-to-date production of about 35,000 ounces. This, combined with the commencement of mining the first stope in the wide, high-grade 303 lens in the second half of the year, necessitated a raise in production guidance.
At that time, we raised guidance to 70,000-75,000 ounces, finishing the year at the midpoint of that guidance, with about 71,600 ounces of gold produced, with grades at Eagle averaging about 11.7 grams per ton, the top end of our grade guidance. Our cost performance in 2018 has also beat expectations. When we increased guidance after Q2, we consequently lowered our cost guidance. Both our cash costs and our all-in sustaining costs came in below our re-guidance due to higher mine grades, better underground efficiencies, and tighter dilution controls. Our costs are becoming much more competitive. We have lowered our costs year-over-year and expect a further reduction in operating costs in 2019. This year, we expect to produce 72,000-80,000 ounces of gold, primarily from the Eagle River Underground Mine. Mishi's contribution will be much less.
I'll talk about that later in the call. Eagle grade guidance for the year is 15.5- 16.5 grams per ton, higher than the reserve grade just due to where we are in the stope sequence. As a result, we expect lower cash costs this year, but flat all-in sustaining costs due to more sustaining development and in-mine exploration. I will now hand the call over to Marc-André to detail some of the operational results in the fourth quarter of this year.
Thanks, Duncan. The fourth quarter was lighter on production and grade due to stope sequencing, preventing maintenance work at the mill, resulting in a lower mill availability of around 80%, and a focus on development work in the underground mine. In mid-2017, we announced our strategy to increase production from the Eagle River Underground Mine and taper off production from the Mishi open pit to eventually fill the mill with 100% of Eagle River ore, which is approximately 800 tons per day. For the year, production at Eagle River increased by 32% over 2017 to 67,300 ounces of gold. Ores from the Eagle River Mine increased by 18% over 2017, and grade increased by 11% to 11.7 gram per ton, very close to our reserve grade.
The contribution of ore from Mishi in 2018 was reduced by 54% to 70,600 tons from 152,500 tons processed in 2017, as more selective mining is employed for purposes of improving ore grade. In 2018, the Mishi pit achieved a head grade of 2.3 gram per ton, producing 4,300 ounces of gold as compared to a grade of 2 gram per ton achieved in 2017, producing near 8,000 ounces of gold. As a result of the above, combined throughput in 2018 decreased by 17% from 2017 as Wesdome strategies to refocus production from the higher grade, higher margin Eagle River Underground Mine. In connection with this strategy, in 2019, we expect to further reduce the tons from Mishi for an 80/20 Eagle River Mishi production split for the year.
2019's primary focus is to develop additional underground reserves along the parallel structures to position the mine to fill the mill with 800 tons of underground ore consistently in approximately 18- 24 months. I will now hand the call over to Ben to take us through the financial review.
Thanks, Marc-André. For the year, we generated a total of CAD 2.8 million in free cash flow, compared to a cash outflow of CAD 12 million in 2017. Net adjusted income in 2018 was CAD 14.9 million or CAD 0.11 per share, as compared to a net adjusted income of CAD 6.8 million or CAD 0.05 a share for 2017. We have a healthy balance sheet with cash balance of CAD 27 million and no debt. In 2018, the Eagle River operations generated CAD 30 million in free cash to fund the CAD 20 million+ exploration and development program at Kiena. As Duncan mentioned earlier, Wesdome beat its 2018 cost guidance on both cash and all-in sustaining costs.
Despite an approximate 7% increase in production planned for 2019 and a lower cash cost profile, we expect to incur similar all-in sustaining costs due to increased underground exploration and development work at the Eagle River. I'll now turn the call over to Duncan for a review of the reserves.
Great. Thanks, Ben. We had a slight reduction in Eagle River reserves this year from 416,000- 404,000 ounces, because most of the first half of the 2018 exploration effort was really focused on the up-down extensions of the existing reserves on the western flank of the mine. The development of the drill platforms in order to properly test for the extension of the parallel zones toward the east part of the mine came later in the year. This was successful in our resource generation, which Mike will talk about later. We completed one exploration platform late in the year, which has great potential to grow our reserves towards the central part of the diorite, and we are definitely focusing on this throughout the year with one drill.
The focus of exploration for the last couple of years has remained on drilling out the 307 parallel zones, testing the theory that they possibly could replicate the Eighth Zone across the entire mine diorite. To date, Eighth Zone has produced over 1 million ounces of gold, which gives absolutely great potential for the parallel zones. Drilling and development throughout the year have resulted in almost complete replacement of what was mined in 2018, which was about 70,000 ounces from Eagle, based on the additions at the Seven, 300 East, and 300 West Zones. For instance, the Seventh Zone is now defined over 146 meters in strike length, grading 30.5 grams per ton over an average true thickness of 2.6 meters. Really great expansion here of the resource and the reserves, especially in Seventh Zone.
We see great promise in expanding strike lengths and better widths at depth for all zones. The 300 Zones, including the high-grade 303 lens, which hosts 50% of the underground reserve. We will continue to focus on the exploration program this year of that, and especially the conversion of the resource to reserves. We are very confident that we will be able to discover another workplace towards the east part of the mine in the medium term. 800 tons per day of 12 grams per ton certainly translates into about 100,000 ounces of production, which is really one half of the mid-tier story. We need Wawa to produce about 100,000 ounces minimum. A review of the mineral resources and reserves during 2018 has resulted in a significant decrease in mineral reserves at the Mishi Pit.
Poor ore reconciliation on the lower benches, which in turn has increased the stripping ratio of waste to ore, negatively affecting the pit economics. The company's strategy remains to maximize the throughput of the high-grade underground ore, and we feel that that's very tangible within the next one or two years. We will continue to mine Mishi this year for that material we have deemed to be economic and as an operational benefit in the winter months to keep the mill running. We are not quite in the position yet to generate 100% of all mill feed from Eagle River. However, we do see some pathway to that. I will now give the call to Mike to take us through the Eagle River resource and exploration plans.
As Duncan mentioned, significant underground development was completed in 2018 that provided platforms allowing the exploration drilling to step out further along strike and down plunge of known zones of mineralization, as well as to test for the existence of parallel zones further to the east of the 7 and 300 Zones. Drilling has further extended the 7th Zone to the southeast side of a northeast-trending diabase dike that is interpreted to offset the eastern extension approximately 1,020 meters and has potential to continue to grow. As a result of this step-out drilling, the indicated and inferred resource base at Eagle River has increased substantially and will be one of the 2019 objectives to convert these additional inferred resources to indicated resources.
We have another aggressive exploration program planned for 2019 to complete 51,000 meters of underground exploration drilling and 43,000 meters of definition drilling using four drills that will be focused primarily to extend the 7 and 300 Zones. One underground drill will be dedicated to exploring new parallel zones of mineralization in the eastern half of the mine diorite that remains relatively underexplored. To further these efforts, a 20,000 meter surface drilling program is planned to identify new zones along strike and to the east of the 7 and 300 Zones at the upper levels of the mine. Given the existing infrastructure on the 8th Zone, any additional parallel zones could provide additional workplaces for increased mine production. Additionally, a surface mapping and prospecting program is planned for this summer to start exploration along strike in the surrounding volcanic rocks, where limited exploration has identified several zones of mineralization at surface.
At Kiena, what a great year of exploration, where 35,000 meters of drilling in 2018 has really improved our understanding of the potential of the A Zone that has now been extended over 500 meters up and down plunge, with exciting exploration potential remaining. An interim resource estimate was completed on December 12, 2018, based on 23,000 meters of drilling, with total indicated resources of 574,000 ounces of gold and an additional inferred resources over 1 million ounces. Within this resource, the A Zone totals almost 100,000 ounces of indicated resources grading 10 grams per ton, and inferred resources of 240,000 ounces grading 11.4 grams per ton, confirming the high-grade nature of this exciting new discovery and existing permitted mine. Resources proximal to the existing workings now totals over 200,000 ounces in indicated and almost 300,000 ounces inferred and would play a significant role in any potential restart plan.
One of the benefits to completing the interim resource estimate was to complete a review of the grade capping factor, which is now established at 90 grams per ton for the exploration drilling. Since the interim resource estimate was completed, ongoing underground exploration drilling has continued to return high-grade results from both the up and down plunge extensions of the Kiena Deep A Zone that are not currently in the mineral resource estimate, including hole 6384A, that returned 33.7 grams per ton over 30.6 meters core length or capped 28.4 grams per ton over 15 meters true width. Drilling to date has defined a moderate plunge of approximately 45 degrees to the southeast to the gold mineralization that occurs predominantly along the basalt chlorite-carbonate schist boundary.
Four drills are in operation on the 1,050 meter level, completing the infill and plunge extension drilling, and a fifth drill is now in operation at the 670 meter elevation to test the interpreted up-plunge extension of the A Zone towards the VC Zone area. This up-plunge extension is interpreted to be in excess of 425 meters and would be in addition to the 500 meters of plunge length already defined by drilling. It is important to recognize that this has the potential to significantly add to the resource base and could be a vital enhancement in any restart scenario. In 2019, we plan to drill 59,000 meters at Kiena and publish an updated, upgraded resource estimate and preliminary economic analysis. I will now hand the call back to Duncan for conclusions.
Great. Thanks, Mike. In summary, 2018 was a very strong year, hitting on all cylinders, and perhaps most importantly, has laid the foundation for Wesdome transitioning to a mid-tier gold producer in the near future. At Eagle River, we continue to make strides towards our goal of filling the mill 100% with the high-grade Eagle River Mine ore. The exploration work this year has identified some very promising resource extensions of the parallel universes in diversified workplace areas, and our drilling this year is focused on converting these resources to reserves. The Eagle River Mine delivered CAD 30 million in free cash this year with 71,600 ounces produced, and we expect this upward trajectory in production to continue going forward. At Kiena, we had a very successful year in better understanding the geology of this asset and advancing our development and drilling.
We're in much better position this year in terms of drill platforms and are confident we will complete our 59,000 meters of drilling in the year along, again, as Mike said, with the upgraded resource statement later in the year. I'd just like to turn the call back over to the operator. I think that right now, looking back at the year, I think execution of strategy on becoming a mid-tier producer in a great jurisdiction is certainly on track. I think that the progress we're making to date is as we would expect and have enjoyed. Hopefully, 2019 will continue to be along those paths. Over to questions.
Yes, that concludes the formal portion of this call. I'll now turn the call back over to the operator to open up the lines for the question and answer session.
Thank you. Ladies and gentlemen, if you have a question at this time, please press the star then the number one key on your touchtone telephone. If your question has been answered or you wish to remove yourself from the queue, please press the pound key. Again, that's star then one to ask a question. To prevent any background noise, we ask that you please place your line on mute once your question has been stated. Our first question comes from George Topping with Industrial Alliance. Your line is now open.
Great. Thank you. Hello, everyone. Duncan, on the reserve rate is 14.7 grams at Eagle underground. The head grade guidance is 15.5 grams+ . Does that mean you're expecting to add more higher-grade tonnage over the next few months over and above the December 2018?
Yeah. I don't know where the 14 gram. Actually, the new reserve at Eagle is 12 grams, George. It was 12.2 previously. It's now what? 12.
Yeah. Sorry, I was meaning on proven, which is near production.
Yeah. I'd put it this way, we have great potential. The extension of the strike here of the parallel zones seems somewhat evident right now, and I think that what we're seeing, especially in the 711 Zone at depth, is fantastic. The widths are higher than average widths at 2.6 meters. The grade being 30 grams per ton is fantastic. The strike lengths here, typically, these zones don't have that kind of a strike length. We're almost over 150 meters here. Seems to just be getting better and better. Yeah, definitely, I think we've got some upside, but hard to quantify right now. We have to keep drilling, and we're quite prepared to do that.
I think when we look at sort of the evolution of the reserves here, we really wanted to get some reserves and some workplaces happening away from the bottom of the ramp and that, and get it back more into the central part of the diorite. I think we're going to be successful on that strategy, and that, I think, is really going to unlock the productions. Really, production right now has been about 450- 500 tons per day from Eagle. One workplace, George, over towards the shaft, sort of in the mid part of the diorite, is certainly going to be a very effective and efficient workplace. I think that our goal of 800 tons per day from Eagle River is going to be quite tangible.
Right. Just to follow up on that, can you give more details on the evolution of the throughput, the production from underground? Is it going to be more increase in tonnage in the back half of this year? Is it really a step function into 2020? Do you have to have any plant upgrades on the back end to accommodate the higher production?
Right. Basically, what we plan for this year is an increase of production level from Eagle in the second half of the year as we access to the 711 Zone and 300 zone at depth.
Yeah, we do have more tons going through the mill in the second half of the year. We're really concentrated right now on reserve development, George. We've had a pretty significant change out of our development contractor, and we're really enjoying what we see here now. Really, it's a function of our stope sequencing and our developed reserves. Yeah, for sure we are back half loaded, there's no doubt. I think we've put out 31,000-35,000 ounces in H1 and 41,000-45,000 ounces in H2. Again, a function of this high-grade pipe that we have, this 303 lens, which it's just difficult to kind of smooth it out. When you're in it, you're in it. Certainly, it is a great high-grade area.
Great. The plant, do you have to have any modifications to the back end for that 100,000 ounces?
No, we don't. Actually, George, right now, the strategy for the 100,000 ounces coming from Eagle, that's really 800 tons per day at 12 grams per day and 97% recovery, and I think that works out to about 105,000 tons. If Mike's able to get the grade up, it's going to be better, and I think that's a pretty conservative actual mill availability. We are tweaking the mill. I think it's really based on more really solidifying it and making sure that it's capable of performing with good availability.
Good, thanks.
Yeah, our pleasure.
Our next question comes from Phil Ker from PI Financial. Phil line is now open.
Yeah. Congrats, guys. Thanks for hosting the call this morning. A question on Kiena. Could you give an estimated CapEx for 2019? I know you've got the 59,000 meters planned. With other underground development for drill stations and whatnot, what are we looking at for CapEx there this year?
Yeah. We're looking at CAD 27 million total. For Kiena, we've got a few projects in there. The drilling, though, the 59,000 meters of drilling is certainly a big part of that. We are also doing upgrades. Marc-André's been able to entirely rehab the shaft with new guides, and the manway's been all upgraded. We continue to work on things that'll really ready our restart when that may happen. That's really what it is. The 59,000 meters of drilling is a big part of it. Of course, the 50,000 meters, Phil, really on the A Zone entirely. The other 9,000 meters is really for the, I'd say, the exploration of what we call the parallel universes, where we think that we have other connecting structures to the northeast of the existing structure. I don't know, Mike, if you want to add anything on that as to
Yeah. Certainly, as we do the drilling on the A Zone, because it's a new style of mineralization, we've been looking over some of the old data. We're updating the 3D geologic model, not just for the Kiena area, but elsewhere on the property as well. We have some interesting targets that we've been able to select from the geologic data and from the recent mag survey that we did. We want to test a couple of these, at least just in the preliminary way. Obviously, our focus is still on drilling off Kiena Deep A Zone. We believe we have capacity to complete a small 9,000 meter surface drilling program that'll, again, help our understanding and test some of these new targets that we have.
Of the CAD 27 million, how much is drilling related then?
CAD 6 million.
The scheduling on the other upgrades, shaft rehab and so forth, is this front-end loaded this year, or starting over the summer period, or?
No, about the shaft, we actually started in 2017, and we're almost done with the shaft repair. We'll be in very good position with the shaft infrastructure to restart the production.
Okay. I'm still fuzzy on when and where the remaining CAD 21 million is going to. Because if the shaft rehab's complete, what other projects are there?
Yeah. The other projects, of course, when we talk about the CAD 6 million for the exploration, we have money engaged to support that program. We called it the mine services. I would say it's about CAD 6 million-CAD 7 million just to support the exploration. We are planning to do some backfill on the ground. We have some open stopes, some voids. We believe the budget's about CAD 5 million for that. We do have some rehabilitation going through the mine, as the main ramp at the mine is basically our main escape way. We are putting quite a bit of money, I think it's about CAD 1 million or CAD 2 million this year, to do the basic rehabilitation of the ramp to make sure our escape way remains in good shape.
Okay, perfect. Outside of sustaining items at Eagle River, is there any other capital projects going on there?
We have money for the mill, to repair the mill, to maintain the mill. We have some money to purchase and refurbish equipment, which nothing outstanding for the equipment. We have electrical upgrade that we've been working through a couple of years ago, and we continue. Every single improvement we're making on the electrical side at Eagle is a plus. We're in the right direction there. We have some money going to our Tailings Management Area expansion. As we grow our reserves, we have to make sure we have enough capacity. What else? I think I talked about the main one, Phil.
The total budget for those items is approximately what?
I think it's CAD 20 million-CAD 23 million. A big chunk of it, of course, Phil, is development. It's about half of our capital expenses.
Right.
The ramps, basically, as we work down there.
Okay. Duncan, maybe could you just touch on the development being completed up into the 303 Zone and sort of your thoughts on how things have been progressing this year and when you think things would be your expectations to crank up the tonnage coming out of there?
Yeah. The 303 development's going great. It's basically a sublevel mining, so we're accessing basically development off the Alimak and getting the sublevels up there. Let's face it, in terms of volume, it's pretty small, but in terms of ounces, it's pretty large for us. It's that sort of a development that we're doing. We did change out the contractor this year. We used to have two, we only have one now, and it's going much better. Really, one of the functions we see, and we already signaled it, our all-in sustaining costs are probably going to be relatively flat compared to this year, just under USD 1,000. It's the flexibility which that's going to give us in terms of developed reserves, I think, so moving ahead.
I think, it's a two-part question, how and when are we going to get to the magical 800 tons per day? I'm looking at Mike and just the progress that we've been making with the expansion of these parallel universes along strike. We're pretty buoyant about that reality happening. Right now, we sort of said a year to two years kind of thing. As it becomes available, we'll definitely be scheduling in new workplaces. The nice thing about this, Phil, is some of these extensions could only be less than 100 meters away from existing infrastructure, right? It's not ramping or anything else. It's like lateral development because everything's been developed on the southernmost structure, the eight structure. Quite tangible for us. When we look at it, 300 tons a day additional is really nothing, especially from a place like that.
Right now as it is, the bottom of the ramp, we've got all three zones in production there. It's 500 tons per day of ore generally, and match that with a 500 tons per day of waste, and that's 1,000 tons a day. Quite frankly, that's getting close to capacity. That's what the mine can sustain right now. I think that really the development of these hopeful reserves sort of in the central part of the dike would just be so beneficial to us in terms of getting our 800 tons per day.
Okay. That's it for me. Thanks a lot.
Okay, great, Phil.
Our next question comes from Craig Stanley with Eight Capital. Your line is now open.
Thank you. Good morning, everybody. Just a quick question. If you guys can, if the drilling proves up the up plunge potential of the Deep A Zone towards the VC Zone, do you guys have a rough estimate of what the difference in CapEx would be? Like for starting up everything there at Kiena?
Yeah. Really that takes the pressure off having to get the ramp down to 1,450, right, Craig? I think that really if the up plunge is there, what we've always looked at it as, okay, if the up plunge is here, all of a sudden, the timeline to development and the CapEx is reduced. Obviously coming up within the mine infrastructure, you're going to have a ventilation already established. You're going to have access very easy to establish, probably have 4 phases into it immediately, right? Compared to the one sort of single heading down ramp, and I mean, it's not that you have to go all the way down to 1,450 in order to reestablish production from the ore, which is emerging from below 1,050. Certainly, the up plunge is beneficial.
Really the way I would view it is the up plunge development and mining of the up plunge would definitely fund the down plunge development. I would think that, as it was previously with the ore below 1050, we sort of said, oh, it's about CAD 50 million. Really what it is, it's all development really. I mean, the mill doesn't cost much to reestablish. It's probably a million and a half or CAD 2 million. Other infrastructure, I mean, that's the nice thing about having a great brownfield asset like Kiena because everything's there, right? It's really just the ramp development and the escape way and things like that. I would estimate for the up plunge only, I think that we'd probably get a good chunk of the development done for probably CAD 35 million, I think we said.
The single heading ramp, if that was the only ore that was at Kiena, we've always said it's about CAD 50 million to get the ramp down to 1450. Yeah, I think that's what we would see, sort of a reduction of sort of CAD 10 million, CAD 12 million, CAD 15 million, just for that difference, right?
Okay, thanks. Just secondly, with the updated Kiena resource that you guys work on, do you think the top cut might change?
Yeah, I missed that. Sorry, I missed that, Craig.
Oh. The grade cut.
Oh.
Will it change?
Yeah. You think the top cut might go up with the updated Kiena resource?
I think we want to review it again as we collect more data. We're definitely going to look on that area again, especially for the A Zone because one of the lenses in A Zone was capped at 45 previously for the last resource estimate. We think that might be a little conservative, so as we collect more data, we're going to reevaluate that in the new resource estimate.
Awesome. Thanks so much.
Our next question comes from Ryan Walker with Echelon Wealth Partners. Your line is now open.
Hi, guys. Congrats on a great year. Just back to Eagle River, the parallel zones obviously are going to take on greater importance. I wonder what extent of historical drilling is there out along those trends in general, along the mine dyke to the east?
There's really a fairly limited amount of information historically because all these zones are to the north of 8th Zone, and all the drilling previously was done from the south. We went in 2016, we drilled a campaign of 200 meter spaced holes from surface, and we did intersect a number of high-grade values. More importantly, from that, we were able to complete our 3D model. We were able to map out the structures, and we're using that sort of geologic model plus some of the previous hits we've had out there to sort of focus in the drilling this year. That's why we have one drill underground dedicated to following up on some of those previous hits and the surface drilling. It's not like we're just going out there and just doing a first-pass drilling over this.
We do have information that gives an indication that those structures do continue to the east. Now it's really just following up on some of the high-grade hits and starting to define resources that exist there. I think we're pretty confident in our model, and we're pretty confident that we're going to drill out these additional resources. Yeah.
Great. Thanks very much. That's it for me.
Okay.
Our next question comes from John Tumazos from Very Independent Research. Your line is now open.
Thank you for taking my question, congratulations on the good results. Are you far enough along in the Kiena planning to have the stopes laid out? How many stopes do you think might be in production in 2020 or 2021, 2022, et cetera? With the rise in your cash balance, the good gold price, the higher output, do you think you might use your cash balance as cash flow and a tiny bit of borrowings rather than issue stock for the development monies?
Okay, two questions, John. Okay, does Marc-André have any stopes laid out at Kiena? I would say no.
No, I think honestly it would be very preliminary to answer that question. I think that the PEA that we plan to do later on this year will help us to understand better what kind of production of stopes and development we have to do to be able to maintain our production level for a long time. I would say there starts to be a lot of development ore, and going to eventually more production stope. I think we'll be able to have a better answer later on this year on that.
Getting back to your funding question, John, I mean, really for us, to really hammer down the CapEx requirements for Kiena, obviously the drilling of the resources and trying to understand the resources exactly, I think that's the most important thing. We can't get the cart ahead of the horse here. In terms of our ability to cash flow, yeah, definitely, we budget at CAD 1,550 Canadian conservatively. We're at CAD 1,750 right now, a CAD 200 per ounce kind of makes a CAD 15 million-CAD 16 million difference on the revenue side for us. It's pretty significant. We'll cross that road, that's a preliminary question right now. I think what we really need to do is, let's understand what the resources look like. Let's do the proper job of mine planning, I think that we'll be much more comfortable to answer that question.
Thank you very much. Excuse me for my enthusiasm.
Oh, I know. That's okay, John.
I am not showing any further questions at this time. Ladies and gentlemen, thank you for participating in today's conference. This does conclude today's program. You may all disconnect. Everyone, have a wonderful day.