Status Update

Sep 25, 2019

Slides

Great. If we can get everyone to take our seats, we can commence here on time. I hear that. Yes. Anyways, I'd like to welcome everybody here today to Kiena's complex updated mineral resource presentation. I'm joined here today by Michael Michell, our Vice President of Exploration up here at the podium. Also with Karim Brusso, our Senior Engineer in Mineral Resources situated at the Quina mine in Quebec and Bruno Turcotte, our Senior Project Geologist at Quina. So I'm also joined here by Marc Andre Pelcie, our Chief Operating Officer Lindsay Dunlop, our Vice President of Investor Relations and Heather Laxon, our Chief Government Officer. So without further ado, we'll get into this. I'm the mode of this presentation is really I've got a few overview slides, and then we're going to have Michael come up and give a more detailed explanation of the changes in the resource estimate and the really high quality job I believe that everybody associated with it has done. So we'll get on with it. Of course, there'll be some forward looking statements, so I'll mention that. Off to our strategy. Really, we talk about building Canada's next mid tier gold producer. And really, the concept has always been in order to get to the mid tier status, we'd like to get a minimum floor of about 200,000 ounces. In order to do that in the shorter term, we always saw the potential for the Wawa operations to get up to 100,000 ounces in that range. And we also saw really good potential for the Keno mine for a restart and to get that up to a minimum of 100,000 ounces. And that way, we sort of redefine ourselves as not being a junior gold miner in Canada. And beyond that, we're able to show some growth. So essentially, the cornerstone of our existence really here at West Elm is we're in great jurisdictions, Ontario and Quebec. Quebec is by far the best jurisdiction I've ever been involved with in terms of mining projects. I mean these assets are already built. So really the level of capital expenditures for infrastructure has really been reduced. What essentially we're doing here is optimizing what we already had in the Wawa region. Kena really had great infrastructure, and the fact was we just need some resources in order to convert those to reserves. So really, that's the plan in the short term. So we sort of see this as a moving ahead from sort of one to three years. We see that sort of mid tier status being attainable. Corporately, the company has been around for thirty years now. We've got about 137,000,000 shares outstanding, dollars 27,800,000.0 in the kitty as of the June 30. We have no debt. We're well covered analytically in Toronto. We've got a very supportive shareholder base. We're 55% institutional, 45% retail. And really, I think everybody is very focused on the fact that we're able to execute on our strategy. And I'd have to say, so far so good. Now just a quick overview of our projects. So our number one asset, of course, is the producing asset just outside of Wawa, Ontario. That's Eagle River Complex. Eagle River Mine has been in existence for over twenty five years now. It's a narrow vein, high grade mine, currently operating at around 500 tonnes per day. This is really the cash generator for everything we do here at West Elm. And it's been going rather well there in terms of reserve replacement and new exciting exploration developments there. So I think things are well in hand for the Wawa operations to basically take that sort of, I'd say, one of the two pillars for this company moving into the mid tier status. At the Wawa complex, we have an eight fifty tonne per day mill. And currently, in this time of good production and high gold prices, we're certainly investing into infrastructure, both at the mill, the tailings and the mine, we are building this for the future, and we do see a good future here in Wawa. Over to asset number two, we've got the Keno Mine. Keno Mine is a great mine, great pass producer, really built by Falkinbridge Gold, bought out by Placerdome back in the early '80s. Kiena Mine produced about 1,750,000 ounces, so a really credible producer. I think the noteworthy thing about Kiena is it's fully built, fully permitted, 2,000 ton per day mill. This does not require a lot of infrastructure money in order to get this operational. Kena, as you know, put on care maintenance back in 2013, ran out of mineable reserves. And since that point, really 2016 and onward, the company spent a lot of time, money and effort in order to follow-up on some high grade hits that were historically drilled from the throughout the mine life and just never really understood. It was only upon us developing the ramp and getting a much better understanding of what we had and found out it was a different structure that we are on that this all came together. So there we are with Kiena and obviously the resource today. And the third company asset that we have, of course, is the Moss Lake. And Moss Lake is actually the largest inventory of resource ounces we have. It's almost 4,000,000 ounces, low grade, 1.1 grams per ton. I would say sort of a large open pittable type deposit and that's really the concept for that one right now. Quite frankly, Moss Lake is not on the front burners, it's on the back burners. We're very focused on getting Eagle up to 100,000 ounces and getting some sort of a restart plan for Kiena. So that's where we are today. Eagle River overview quickly. I mean, we've got about 404,000 ounces in reserves at 12 grams. We've really been doing very well in terms of our production this year based on some high grades that we've encountered. I think that we've got an emerging resource here now. We've got about 190,000 ounces of indicated and inferred, something which previously wasn't there. Exploration results at Eagle River have been excellent. We've got some new, I'd say, emerging mineralization outside the mine diorite out into the mesic volcanics. That's very exciting for us because this just really unconfines us from the diorite. So I look forward to continued exploration success there, and I'm sure we'll have some. Just quickly about our guidance. We've guided the market at the start of the year 72,000 to 80,000 ounces. The first half of the year, we're somewhat over 41,000 ounces. I've been saying lately that really we're going to be towards the top end of guidance or just beyond, really driven by grade. We're really right on plan in terms of our production and where the volume is supposed to come from. Think the exciting thing about us is that currently the grades for the first half of the year have almost been 21 grams where we thought they would be 16. So we've had some very positive reconciliations, especially from the 303 area, but all the other mining zones have really been performing well. So I think that certainly helped to fund everything that we do here. When we go to Kena, as I mentioned before, fully built, great infrastructure, never been flooded, great mining jurisdiction. I mean, Val D'Or, Quebec, it's pretty hard to beat that one. It's an exciting prospect that we have now. We see emerging high grade resources developing, which we're going to talk about today and the estimation of that. And I think we just get one step closer as we go on here, just by getting closer to that sort of restart plan potential that we have. So there's the property. I think the takeaway from this is we're surrounded by great producers, great past producers. The property is encompassed by all sorts of mineralization just north of the Cadillac Break. I think there's a lot of potential on this property right now, the 65 square kilometers we have. The one thing I will point out, I think we're probably exploring about 1% of that. So again, totally focused on a restart plan here. This is exploration done within the shadow of the head frame. So this is where our focus is. But as we get going and hopefully, into this restart plan, I think we can concentrically go away from the shaft and really start some good, I'd say, property wide exploration. So without that, I'm going to pass this over to Mike Mishaw, our Vice President of Exploration for a detailed review of our resource estimation. Mike? Good afternoon. Really, what a difference a year has made. And actually less than a year, about eight months or so. I mean, let's face it, our resource that we put out on this project in December of last year was really for us somewhat underwhelming for what we thought the property could hold. And really what we wanted to do at that point was say, let's go in and start to do a better job. And I think an important part of that is the team that we've built there at Kiena. Bruno has done a great job here exploring and extending this deposit. Corinne has been with us now for eight or nine months and she's really been doing the heavy lifting on this resource estimate. And they're both going be available for detailed questions after this. But I just want to recognize them because without having the great team there, we wouldn't get to where we are today. And that's having a good geologic understanding of this deposit to be able to explore for it, extend the zone and better understand it, so we've got future exploration targets in the area, which we're going to sort of go over in detail. And as my old boss used to say, Henrik Thelenhorst, there's no substitution for good data. And I don't think this resource estimate would have been completed without all of the diamond drilling that we've done since October twelve of last year until August six of this year, that's really given us the information to build out a resource that we actually have confidence in. Because when you look at how we capped, when you look at how we project between holes, without that data, we would have never been able to do it. And really what has changed since December 2018, we've changed the geologic interpretation. That's just not the resource models, but the structures, the hosting lithologies, we've done all of that to better guide us how this deposit formed, where would the mineralization be going along certain structures. And therefore, when we model this now, we have confidence in it, where I think in December of last year, we really didn't have confidence in that resource. So I'm happy where we are today. And to take a quote from Duncan about a snapshot in time, I think we are at a snapshot in time still for this deposit. We're still drilling. We're still finding more gold outside of the resource. But I think it was critical at this time to get this resource estimate out there, so we could sort of get rid of that December resource and say, look, this is really where we are in this A Zone. And it's growing and it's getting better. But look, it's been pretty fabulous for us. And when you look at the image there, you can sort of see we've also been looking on updating the resources in other areas, the South Zone, the S-fifty Zones, the VC Zones. And really you can notice that this is all around workings. So this is all going to be part of a potential restart here. And this is why we want to better define all of them. So as we go forward here, a lot of work is going to be continued drilling of A Zone, but also getting the other zones up and ready for mining. And as part of that, you can sort of see where our new 79 level development is going. We chased the A Zone up plunge. When we got above the ten fifty level, it looks like it's a little more folded. We're still getting high grade hits there. But again, we're blowing our mind out trying to drill it from 67 level from a drilling platform that probably wasn't optimal. So we said, hey, let's put in that 79 meter level development halfway in between six seventy and ten fifty And that will allow us to drill that area off much easier. As well, it gives us an opportunity to further drill off the VC zones. And what's interesting here is as we've been drilling off those zones, we've had some pretty high grade hits from VC and VC1. And what we're sort of seeing overall for the mine is up near surface, the material that was mined out, was wider zones, it's brecciated mafic volcanics, a lot of sulfide mineralization, disseminated gold. And as we're getting to depth, seems like somewhere around we go through a transition zone, maybe around 800, 900 meters down, and it's turning into more discrete structures, sheer structures that host quartz veins with visible gold. So that means that opens up all the VC for visible gold, which we are finding there now, as well as the North Zone, the three thirty eight Zone to the north that we haven't even touched, plus a lot of other zones in this area. If they all follow that sort of that pattern, then they're all going to have high grade zones underneath them. And that's, I guess, not unlike things you might see at Hoyle Pond where they said they had a more branch type. And then as you get deeper, it kind of gets into one unique structure. And that makes for good gold mineralization. So anyway, we're starting to understand it. We had University of Western Ontario here this year. They had a student there all year. And we've taken a lot of samples, and we're looking at the gold mineralization, quartz vein in particular to find out just better understand this, are there some clues in this zone that's going to help us later explore for more of these A Zone type structures. And we think there are and we'll sort of see that as we go through the presentation. So really where we are, you can see historically over 6,000 holes here. Yes, it's been drilled a lot, but a lot of that's in the mined out area. But there's over 700 holes now that we're using in this resource estimate. And there's about twenty minuteeralized zones in these other areas, the S50, South Zones and whatnot, and then four zones that have been modeled for the Keno Deep A Zone. And really, we closed up the data in August 6. The five drills we have there right now are still going. We're still getting good hits, which we're going to release publicly at some point down the road here, but up plunge and down plunge. So we're still really happy with things that are going. I think that as we get the 79 meter level developed, when that's ready, I think we'll add to the drilling capacity that we have there, bring in a couple more rigs and really get this thing ready for the next resource estimate, which could be near the end of the year or early in 2020. Because really we have that up plunge area. We know we have the holes. We just need the drilling. And when that's done, we'll update the resource of that. And again, that has a big impact on a restart and the economics of this project. So we're pretty excited about that. You can see that we've added about another 140 drill holes so far since October of last year. And that's in some of the other zones and really 66 new holes in the Kiena Deep A Zone, which is just about double what we had there before. So we've really added a lot here. And a lot of it was infill drilling. I mean, I guess we could have always taken the big step outs and try to do that. What we thought this was a good deposit and we really want to get it to a stage where we understand it well and something that we can get into a prefeas as fast as we can to convert these two reserves and be able to make a production decision. So just I'm sure you've seen some of these slides before. Just as a quick reminder here. So this is the long section of the deposit. You can see the mafic volcanics in the hanging wall and the Kamadiye or ultramafic, sheared ultramafic in the footwall, and the A Zone really occurs along that contact. This has been extended now over 700 meters down plunge and it is very straight and very continuous. And I think that's going to make it really nice to mine. And one of the things that we want to do in this infill drilling is not just for building a resource estimate, but we wanted to test the continuity of the geometry. So when we go in here and mine this thing, is it going to be torn apart or boudinaged or locally folded, something that's going to interfere with our the mining of the zone. So I think we've proven to ourselves that this thing holds together. We've got a good zone. It varies anywhere in thickness from three to 10 meters, say. Obviously, we've had some thicker areas where it flattens out in some spots. But I think that's really going to bode well for us when we come to mind this. And now we're going through a geotech review, a detailed geotech review as part of our PEA that we're doing. And this will be able to guide us on stope size and what we're going to need for ground support and things like that. So as we start to look at how we mine this out and what's the production rate we could get out of this, it's all going to come from how well this holds together, what are the size of the stopes and what will the rock there allow us to open up. So that's all ongoing as part of this PA. So I think it's a PEA, but really there's a lot of aspects of this PEA we're going be doing to a level that's much beyond the detail required in the PEA. But that just will make the PFS go a lot faster later on next year. Again, in cross section, you can see again the folded nature here and it's plunging down. So essentially take a piece of paper, fold it up, put a plunge to it and that's really what the zone looks like. It's been consistent over 700 meters. It certainly seems consistent going to depth and up plunge now. That structure still exists, but now it's been folded, it looks like by a later stage fold. So it's a little bit harder to chase, but certainly the gold values are there. So that's what we're starting to sort out now with the drilling that we'll be doing from 79 level. Okay. So really in this three d image, this is taken from our last press release just to kind of put you in perspective where the ten fifty level is. And you can see where we've been focusing the drilling infill drilling. That's really we wanted to better understand this deposit and its geometry and the continuity of that and at depth. And it is deep, but we have fantastic results from down there. So it's hard to walk away from that. In fact, we think the A Zone where it plunges down eventually because these structures are two it's a linking structure, maybe a second or third order structure that links two regional shears. And when they come into the shear, we think that could be the best area to look. So down plunge of this A Zone should intersect the regional shear that host really the Kena deposit above and that may be a really great area for us. So again, that's why we want to deepen this particular ramp on 1050 to be able to better drill that area. And also again, it sets us up for future development and mining of the higher grade A Zone. Okay. So one important aspect of the resource estimate is I think previously, of course, the drill spacing was too far apart. And in fact, when we did the resource estimate last time, we had a search ellipse that wouldn't even reach, you know, the other hole so that we had uninterpreted blocks in a lot of areas of the model in between some drilling area. And when that happens, you start to get an average grade for those blocks that is really lower than the average grade. So the infill drilling helped a lot here, but what we really did was we wanted to separate out what really isn't mineralized. So you have a structure, you might have a quartz vein, but really where is the gold mineralization? Where did the gold precipitate out? We were able to define that boundary with the more drilling, and that's what you see is the white dash line on that figure. So that's low grade. It's not part of the mineralizing population. So let's just get rid of that stuff because it's not part of the same process how it was mineralized. Because if you go from 50 grams to zero grams along an edge, obviously, that's not part of the same system. And I think what you can run into with this problem, if you don't try to have a hard boundary in there, is when you have 50 grams and then you have a zero gram somewhere, you get a lot of moderate blocks in between like 25 grams at a much higher tonnage. So that's gold ounces that you're going to think you're going to go in and mine above a cutoff grade that's much lower, say three grams per ton, and you're just not going to do that. So I think that's where you can kind of fool yourself about the number of ounces. So we want to make sure we limited the high grade area, so it didn't bleed out into other areas and give that false number. So that's really what we did. And I think what's important about this is when we did this, part of the problem before in the old model, we had a bimodal distribution. It's possible to cap two populations at the same time with one cap. So when you look at a histogram, you get this sort of camelback look to it. So that's impossible. When this domain was done and it really separated out the population. So then when you get a single log normal bell curve, you say, well, I can easily figure out where the cap is on this now. And that helped a lot on determining the right cap. And it gave us a lot of confidence because had the sort of the data to do it. And when you see that bell curve, you know it's one population. So okay, I won't go through this in too much detail, but I want to give you an example of remember there's 20 zones in the rest of the sort of the Kiena Mine area and there's four in Kiena. So imagine there's 24 zones here. We looked at the capping for each one. We looked at the variography for each one. They're all separate had separate grade interpolations, the whole bit. So you can imagine Bruno and Corinne here had a lot of long days trying to go through all this information, but having the data to do it made it possible. But really when we look at the capping strategy, it's pretty straightforward. You don't want to have a couple of samples hold all your metal, right? And really we look at it and we said, well look, there's 30% of the metal in this resource based on 1% of samples doesn't seem right. So we made sure that any one composite didn't have more than 10% of the metal, right? So that was an important thing. So how do you get down to that? Well, you have to look at the grade population, see the probability plot in the top right corner. You look for breaks in the probability plot. You look at the coefficient of variation in the top left corner. And you can see that for the A Zone here, when we did the cap, we capped about 3% of the composites. These are one meter composites, which is very close to the length of the assays. We did look at the assay averages versus the composite averages and whatnot, but they were pretty similar because the sample length is almost always one meter. So I think we've kind of put any argument there to bed. But even with the capping that we've done, you can see we've taken off 30% of the metal just from a sort of an arithmetic evaluation. But you'll see later, we've actually done this work in the blocks model. So you can sort of see the what it actually is in a block model. How much gold did we lose at each step, the grade capping, right? So I think that's important because you know if you got the grade capping right or not, then you can say there's an opportunity or maybe not. So really this is how we went through it. And I think that was something that was really different here is you can see the cap here is for 165 for Kena, the A Zone, which is the top zone, which is the well mineralized zone. Of course, 165 grams per ton, I guess for a lot of deposits I worked on probably would have scared me. At Eagle, we have a capital 145 and it's way under calling mineralization. We're getting that three zero three zone and this zone is better. So certainly don't have any problem with that cap. But what we wanted to do again was to make sure we looked at the population and we said, okay, well, is there any other breaks in the curve? And Corinne really spent a lot of time on this and you can sort of see we have what's called a high grade limit at 100 grams per ton. And the reasons that is there is so when we do interpolation, you got a block, you're trying to put a grade in that block, it's searching for drill holes for data. And so what we're saying is, look, if you have to search too far, maybe a cap of 165, it might be right. But let's be maybe a touch conservative here. And let's say that any values like and I'll show you this when we get into the second and third pass here. Later in the interpolation profiles, I'll show you. We take all those values and everything over 100 and we zero them out. That's it. So not to say we're being overly conservative, but everywhere where we have good spacing, tight drilling, we're happy with 165 grams per ton because that's what it is. Anywhere where the drill spacing gets a little further, we're saying, take it out. If it's higher than 100, make it zero. And you know what? That's going give us some opportunities for later. And I can show you on the sensitivities. You can see what those numbers are. But really it says, hey, go back in there and drill this off properly, then we'll know for sure. We don't want any surprises when we get into this beast and start mining it out. Okay. So that was really the strategy and a lot of great work here at site. If we look at here's the A1 zone, again the cap is 110, the high grade limit is 55. When we go down, we split this A2 zone in two separate areas. Obviously, a lot less data. And this is one of the issues. It's great to get to the A Zone, which holds about 60 or 70 of the gold ounces in the A Zone. It's right at the contract between the mafic and the underlying shift. No problem. We drill in there. Good rock qualities in the mafics. No problem to find that zone. When we try to push it through the shift, it's a little harder to get through, especially from some of the platforms we've had in the past, which probably weren't optimal. And we have a lot less data to work with. And that's why we have a lot less data here to work within these zones. But for this zone here, cap at 50, no need for a high grade limiter because cap is already at 50. And then we get to the bottom part there, we have a cap of 200 and a high grade limit of 50, not a lot of drilling. So when you do the first, the second and third passes, of course, all those values get zeroed out. So we're not overstepping what we think is contained in these deposits. But the same approach was used everywhere for every zone. So we're pretty consistent that way. And just to kind of give you an overall look at how the range varies. You can see in the upper part of the mine, the grade caps are anywhere from 15 to 20. Then when you start getting into the A Zone, of course, they're much higher. And you can see the mean grades there without capping. They're 700, 800, 400. It's just a lot of high grade in this zone. And we'll just make sure we dealt with that correctly, so we're not overestimating everywhere. Okay. Variography. I just want to show this that, you know, again, you can sort of see the nice logarithmic distribution here, the bell shape. This is what we used for doing the variography. We did it for every zone. Pretty comfortable with what we've what we came up with for where the the direction of maximum continuity was. It gave us a really good feel for what the continuity is. So when we put that into the the block model, you know, it's following some science here about why we're putting the grades in these models. And really when we look at a variant, without going into detail how this really works, is the top line is really your total variability and of the population. And the nugget, which is the part on the left hand side where that curve actually intersects the Y axis, that is called the nugget and that's the local variability. So if you took two samples really close together, how much would they change? And you can see that nugget is very low, which means if I drill a hole here and I drill a hole here, they're going be pretty close, which most deposits or a lot of deposits I worked on in the past, you know, you drill 10 holes, four of them have good gold, six of them don't have any. And then you look at the variography and that nugget might be 40% or 50% of the total variance of the population. And here, it's very low. So that means there's good continuity in the gold grade. So you can believe it. If it's there, you can believe it. And when you go to mine it there, it's going to be there. So I think that's an important aspect of this deposit. And that probably explains why when we drilled 50 the first 50 holes into this deposit, 48 had visible gold. It's just a very continuous zone of mineralization. So I think that's really positive and that's why we're getting such great resource grades now is because there's a lot of high grade and it joins up from hole to hole, right? So I think we're pretty happy with that. Just to give you sort of a little bit of how we handle, how this high grade limiter comes into effect here. You can see in the red square, okay, so this would be the interpolation parameters for the A Zone. And you can sort of see in pass number one at the top, the search rate is 26 sort of in one plane, 30 in the other and 10 across the thickness. So not a real great sort of plunge to the mineralization on that plunging sheet that we have. And so that's good. So again, fairly regular distribution there. And the way that the first pass works within that, we had to have you can see, we had to have a maximum sorry, minimum of 12 composites. And that means that, four, from any one holes. We had to have three holes within that range, 26 by 30, to interpolate a grade into that block unrestricted. So it uses the cap of 165. When we look at the next line down, you can see so we expand the range, goes from 40 to 40 to 10. And now we have to have two holes. But you look on the far side there, it says 26, thirty, ten, which was the original variogram range. If there's any values over a 100 in that pass in that area, it's zero. So that's how that high grade limit works. So far they get away from a hole, the harder we hit it. So that's why we're pretty comfortable with this resource estimate. And in the inferred especially, we think there's a lot of opportunity for upside. So that's how we use that high grade limiter, which they use that some other deposits in the area. Okay. So and really this is just a sketch of the three d block model. This is for the A Zone. What's sort of interesting here is that we actually had to have because of this A Zone, we had to change our company grade scale to put in something over 50, which is a bit weird. And like I said, it would have scared me before, but seeing the values we got at Eagle, I mean, this is just a high grade deposit. So I think that was a pleasant sort of surprise. And really how we did the resource classification, you can see now we're somewhere around fifty-fifty and before around 30% had indicated. But we have a lot more data and a lot better understanding of this deposit. And really, the drilling had to be 25 meter space drilling and we have to be able to find three holes or there's no way it's getting indicated really. And then the inferred is something where we have a wider range of say 80, but still have to have two holes. And that's why because that longer range, obviously, don't have as much drilling out there. That's why we wanted to hit the high grade stuff a little bit harder and that's why we put the high grade limiter in there. Okay. So then we look at the classification, just to really show you the process here. On the left hand side, you can sort of see that's what pops out of the model for the what we find for the interpolated during the past one. Then we don't like to see isolated blocks of anything, so we go through and manually group it together. I mean it's inferred or it's indicated. It's one or the other, but it's not block by block off isolated bits. They have to form, you know, regular shaped zones of similar categorization. So that's what we see here. And just for a comparison, this is A Zone. You can sort of see A Zone best drilled, highest grade, large part of the resource and the majority of the ounces here we do have up to indicated. And when we look down at A2 Zone, you can see we have a lot less indicated and that's just a function of not getting enough holes into this. So as we have a lot of inferred there, you can imagine a lot of the high grade hits that we had down there have been whacked, you know, hard, I would say or conservatively maybe. And say, look, when we get more drilling in here, know that's these zones are going to improve as well. So we're going to get better grades and more ounces as we do more drilling. So there's a reward for going through all that work. Really just a quick look at the cutoff grade. We're using the 1,700 Canadian, which is probably a bit low for today or maybe not depends how far the goals come down in the last hour here, but 1,300 U. S. And really that works out to be about three grams per ton for us the way we envision that we would mine this out. So really we're reporting all these resources at three grams per ton. But I'll show you a slide here in a bit. The average grade is so much higher than the cutoff grade, whether it's two or five or four, it's not really going to make much difference here anyway because you're in ore or you're out of ore. And that's really the function of this new A Zone. So really when we look at these resources and it's important here to note that this is all over three meters thickness. So nowhere in this model and we made sure this by taking out the geology solids, putting them in the LeapFrog, bringing them back in the GemCom to make sure that there's no areas that are less than three meters in thickness. So we want to make sure that we've kind of already have some sort of minability built into this. Obviously dilution will be added in any assessment for future mining. But at least we're at three meters to start with, which is really what we do at Eagle. So it can be done and trying to limit the dilution when we go forward. But really where did we get to? The Kena Deep A Zone indicated resources went from about 100,000 to 400,000. So that's you know, kind of a four bagger, I guess. And that's, you know, pretty good. The inferred, we went from about two forty up to three thirty, which is good. But the grade has really been fantastic. You've gone from, you know, under 10 to over 18. And that's really spectacular. Mean that's really these are the kind of numbers that we thought we would sort of be seeing in our first resource estimate back in December just from the drill hole data, but you know we just didn't get there because of we just didn't have enough data. Now we have the data. We're very comfortable with these grades because we have the drilling and we have a good understanding. And I think we've been we haven't been optimistic. I don't think at any stage of this process. We've been realistic or conservative in some aspects even. Really we've gone from a 50% of the A Zone being indicated to or 30% previously to about 50% now. So it's good. So we have lots more drilling to do. Obviously, we still have 50% that aren't indicated. So that's going to be some of the continued drilling going forward here. So again, just a summary here. Can see I guess it was kind of mentioned in the slides before, but just a reference under the blue line to what we had previously, big increases in the number of ounces and the average grades for both indicated and inferred. When we look at the coal key to mine area, really we've got about 450,000 ounces in indicated at just under 15 grams and inferred another 400,000 at 11, right? So that's a lot of ounces that are right accessible to our workings and obviously that's going to grow as we continue to drill and that chart on the table on the lower right corner there, you can see if you look at the different cutoff grades, you can see it's relatively insensitive to small changes in cutoff grade and that's just because the average grade is so much higher. So whatever that cutoff grade changes to based on gold price or whatever, doesn't matter. This is going to have a we're going to mine those ounces. Okay. Additionally, outside of the Kenia mine area, some areas easier to access than others. So this includes things like West Elm Deposit and Martin and Duboisin and Presque Gill. There's still another 340,000 ounces in indicated and 400,000 ounces in inferred. Yes, and these are zones we're going to get to and evaluate. And this is other things that we can bring into the bring into production at some point down the road here. And all of these zones are going to now get a second look because we have something different that we're looking for in these areas. And really a lot of these zones just need more drilling as well. We haven't really concentrated on them because we've got the Kiena Deep A Zone to worry about and the in mine area first. But there is a large amount of ounces that are sitting out there that would certainly help when this project gets started back up again. So when we look at the global, of course, we've got about almost 800,000 ounces at 8.7 in the indicated and another 800,000, 8.5 in the inferred. So a lot of ounces that are really good grade, and that's including everything on the property. So some of the old low grade zones at four or five grams per ton of whatever is all in there and all average out 8.5. So not a bad start here. So this is the sensitivity tables here. Maybe a little bit hard to read out there. But really if we tried to compare tried to compare a couple of different things, capped and uncapped. So I'll just pick a zone, try to do that. So I'll pick the A zone. And when you go, you sort of the top left. We have uncut and restricted really when we look at that. So we had it restricted. We went from essentially 380,000 ounces at 23 grams sorry, 27 grams. When we cut that, of course, we come out to 21 grams per ton and two and ninety thousand ounces. So just on that zone that is welded off, when we remove the cap, we add it goes down to two ninety. So we add about 90,000 ounces there from that we knocked off from the cap. So pretty significant, right? And then we take that excuse me, the next table down and it kind of goes from and this is the biggest hit because this is gold, that's capped, that's restricted and let's sip the wire and then we compare it with gold uncut and unrestricted. So this would be the biggest difference. And even in that zone, you can see we go from 290,000 ounces to 415,000 ounces. So if we were too hard on the cap or if we were too hard on that restriction, yeah, there's some there's some meat on the bones that we're going to get when we go back in and better drill this off. And I think when you look at the last table down on the last line, this is sort of the A2 zone because this is the one that really has a lot of inferred. And when you take something that is it's capped, they're both capped on either side here on this last line, but one is unrestricted. And you see the difference it makes for the A2 zone for inferred, we go from 166,000 ounces up to two and fifty thousand and grade goes from 16,000 to 22,000. And because the drill spacing is far apart there, having a restriction hits it the hardest. So you can see 170,000 to 250,000 is another 30% of ounces we can get there. So again, more meat on the bones and just means we got to get out there and properly drill it and then we'll add that in. So I think where we go from here is we drill all this material off. We add this additional inferred and indicated. We get more ounces that way. And then we also have the drills running to extend in the up plunge area. We're extending in the down plunge area where we're hitting. So that's why I say it's sort of a snapshot in time because really we see this thing growing and just needs the drilling. And it's always kind of just get the drilling done and we're going to increase that capacity going forward here. So if you look at the next one slide here, it's really the next steps. And really, it's the five drills. They're ongoing. We want to drill along the plunge line, of course. We want to drill the other zones to get them improve their level of conscience or the categories for incorporation in the prefeas. I think one thing that's really important here is just developing the 79 meter level. And this is really to give us access into the up plunge area of the A Zone between ten fifty and sixty seven meter level. And really that we're putting that in. We have enough high grade hits there that putting this ramp in is really a slam dunk for us to do that because it's going be great and that's going to give us access not only to the A, but the VC zones at dip, which seem to be turning into these high grade quartz veins. So that's really awesome. And then really this resource base will go into the PEA that were expected sometime in the New Year. And like I said, lot of aspects of that are going to be up to the prefeas level. And really when this 79 meter level development in, which is going to take another three months or so, right, Marc Andre? About three months or so. And then after that, those guys are going down to the main ramp, the ten fifty ramp we've been doing our drilling from, and we're going to start driving that down to give us better platforms for the future, give us access for bulk sampling in the future and also that can be used for production. If everything works out the way we planned, we got 79,000,000 to $67,000,000 $79,000,000.10 50 we'll have something below that for immediate access to get started on. So already we're going to be starting with a lot of working areas. So you can see that this will when it starts up here, we'll be ready to go. The other thing is, I should maybe go to this next slide here. So you can sort of see where again, where that new 79 meter level development is going. You can see our interpretation coming up there. They merge into the VC, but there's folding. There may be some offsets in between. But like I said, we've had some very good hits there. And we're excited to get in there and do the drilling. But what's nice is if we have VC1 coming down through this area, VC6 coming down through this area and the A Zone going up, albeit folded or not, the ounces per vertical meter is going to go up a lot. I think with the ounces that we have on the books now, I think we're north of 1,200 ounce per vertical meter. So pretty good start for getting going. And that's not including a lot of little structures that we haven't even modeled yet. So pretty important. The other thing that's of interest is we just hired on another person, Matt Kiena. She's our surface exploration geologist and really she's putting together all the historic data and really her goal is to track down more of these zones. And you can see everybody's drilled this deposit or this area off on structures that are essentially East West. And you can quite clearly see that the old Kenia deposit and VC zone and the North Zone three thirty eight zone and now the new A zone are trending closer to North South. So we think there's more based on the geophysics that we have there. We've had Dave Riesen there to help us out. He believes that structure is real and we see them in the mag and you can kind of see where we've sort of maybe highlighted a couple of them where we think they're trending on this map. So really it's matter of just getting out there. We have showings on these structures. But was it drilled the wrong way? Does it need more work? That's what we're going to be doing with our surface exploration program. So really we're going to have that going on next year as well. It's already started this year and it's defined again additional mineralization or additional A Zone mineralized A Zone style mineralization that we can easily access maybe from the underground. So with that, I'll pass it over to Duncan. Great. Well, thanks very much, Mike. It's hard not to get excited about what's going on here at Keno Mine, I'll tell you that. I guess at this point, really and then just in summary here, again, reiterating the mid tier status that we aspire to. The jurisdictions we're in are low risk really in terms of Quebec and Ontario. Everything is built. We're optimizing Wawa. Infrastructure is fantastic and permitted at Keno mine. Just really looking for the next deposit, we're next to mine. And really highly executable, I'd have to say that the team we've been able to attract into West Elm is exemplary. And I think that really the development of us into the next phase, I think, is quite likely. So I congratulate everybody, Karin and Bruno, I think that that's a fantastic job. Mike, you've done a great job and everybody else on the team. So with that, I think we can open it up for questions. If you have any technical questions, I've got a panel full of experts up here, which is good because I'm the mining engineer and just looking where to break the rock, right, Marc Andre? So anyways, if there's any questions here in the audience, that would be great. Yes, Mr. Topping? Michael, you want to you guys have yeah. Average true width, Tim. Yeah. It's around four meter for A Zone. Yeah. Yes. Yes. The zone varies in thickness. So yes, the zone the A zone varies in thickness. So in some area, it's thick with high grade, but in other zones, there's less than three meters with high grade. So yes, somewhere in some case, they will have dilution. Is it very few cases or is it It's few cases for A Zone particularly, yes. Sure. Fewer cases, yes. Few. Few. Okay. Thank you. Yes, Don. We're just going get a mic to you. There you go. Yes. Thanks. Could you describe how the dimensions of the resource have changed from the maiden resource to this? Like I'm talking along the vertical extent along plunge, for instance, of the A Zone? I think it was quoted as 400 meters with the maiden resource. And I know you've done a lot of infill drilling here. So I'm just trying to understand if this increase in grade is largely due to infill drilling or to what extent has the size of the footprint expanded to? In last December, there were already some depth holes that were not included because they were too far from the main body. But with the infill, we were able to include those depth holes. So it extended the length of the zone. We have about 700 meters of plunge now within the resource, I believe, so up significantly from the 400 or four fifty. And really, the next goal for us is to get that up. A seven ninety drift is very important aspect. And we'll be done that shortly, I'd say, the next six weeks to two months. It's going to be an ideal drill platform for us to get that really understand what the upper plunge is and how the VC zone and the A zone relate to each other. It looks really, if you ask me, it kind of looks like a wishbone. And so we'll be right in the middle of the wishbone in order to get both limbs of it. Okay. And maybe just a couple of administrative things. I see under the next steps that it indicates that the PEA will be based off of this resource, yet I also heard there might even be a resource update by the end of the year. So what are your thoughts there? Would you maybe base are you actually going to put a resource out by the end of the year? Or would and would you base the PA off that? Or what should we think? No, I don't expect to have another resource update by the end of twenty nineteen, you mean? Yes. When is the next resource update? Yes. I think when we get I think a substantial amount of drilling done and I think to get established on the 79 drilling platform in order to understand that. Let's face it, we've got some great mineralization at depth here. What we see at fifteen fifty down to 1,600 is phenomenal. And I just referenced this whole 6,299. And we look at the A2 zone and at that point and that depth, I mean, I think the intercept we got there was like 77 grams over 14 meters. So we're very excited to get down there. We also see a point of inflection where it starts to flatten out. And we all love that because we know that, that tons of dilation and some great gold. So really the plan for us right now is let's establish seven ninety and let's get the up plunge understood into the VC zones. The development crew is not taking a break. They're going go right to the bottom of the ramp and try to get us out to the, I would say, more to the east in order that we are able to better define that area down below. So I would say comfortably at the next resource, we would definitely have incorporated much better information within the A2, which I see as being a really good event for us because I think there's great mineralization down there. But also that would probably be the next course of action. What I'd say about the PEA right now, I think we're really looking at the metallurgical aspects right now. I mean, obviously, Kena mine was a 4.5 gram. There's no gravity circuit in there at all. So definitely, we probably need to add something like that. We're also looking at the geotechnical aspect of it. We do have some kamadiate shifts in the footwall there. We need to understand how best to deal with it. The A Zone thankfully has got a great basalt hanging wall, so that's not an issue for us. That's good. Environmentally, of course, we're looking at those aspects. So as Mike said, I think a lot of the aspects of the PEA are actually going to be sort of at a PFS level. So it's going to be quite quick for us to kind of turn the switch over to the next level on that. So I don't know if that answers your question, but I think the current resource we have right now is certainly going to feed into the PEA. Super. And maybe just one final question then. How should we model the timing of a restart? Should we look ahead to maybe Q1 twenty twenty one? Or it sounds like there's a few moving parts though. Okay. I'm going to go back to my forward looking statement and point that out. Depending on how the PEA goes, and this is going to define us with the best next steps, okay, as to what to do. Really, as we speak right now, the development I don't see the development stopping at Keno Mine right now. And we're developing right now. And the next phase of developing the down ramp is to get, number one, a better exploration platform, but it also gains us depth, which we need to do in order to get production. I would love to be in some form of preproduction based on the right conditions occurring and the stars aligning, hopefully by the end of twenty twenty. But that's a very forward looking statement right now without having the PEA in front of us. The results of that, I think that that would be a little guessy, I think, right now. Yes. Thanks. Will you do a prefeas or a fees? Well, as Michael mentioned, we would probably do a prefeas in order to upgrade our resources into reserves. Again, the PEA is going to give us some sort of semblance of capital outlay. I've been the guy for the last year thinking that really we don't have a lot of investment to do in the mill of the infrastructure. Really the investment we need to do here is in mine development in order to access the reserves. I've got a hard time when I talk about preproduction, I simply mean that amount of money to get this thing into a sort of self generating, self sustaining cash flow situation. And I have a hard time right now seeing above CAD50 million to CAD60 million. So currently, conditions stay the same, I think that Eagle River is going to be able to fund the majority of that. So it's certainly a good situation we have. Yes, George. Yes. Just a follow-up. Do you have your eye on an area where you would start a bulk sample and what you have to do to get there? Well, if you look at the resource right now, we do have some of the resource coming through just above the of ten fifty elevation. I mean, obviously, that would be kind of just drive straight ahead and you could get into it. I think I'm not sure without really looking at the resource at that point. But yes, I mean, bulk sample certainly is a great way. It really has a good look at our capping levels and see what sort of recovery we get. I think I'd like to have a gravity circuit in place at the Kiena Mill prior to doing that, though, as I think that that's going to be an important aspect of our milling here. So great. Well, we're all out of questions here in Toronto. So without further ado, I'd like to thank everybody for attending and thanks to management and of course, to Karin and Bruno for coming from Val d'Or. Again, they're available for questions after this. So but this will conclude the formal part of the webcast. So thanks very much for joining us.