Hello to everyone, and welcome to our twenty twenty Investor Day. We appreciate you taking some time here today to join us. What I'll do is quickly show the cautionary language slides, before we start off with a brief video. And then after the video wraps up, I'll come back on afterwards and kick things off.
And to provide the country and the world with the essential minerals it needs. While mining remains essential to our lives, just as it was in the 1920s, Coeur is not the same company it was ninety years ago We to to strong
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business. We delivering on on priorities. Are are on delivering to the year. We committed delivering shareholders This is exemplified by our consistent focus on overhauling our corporate governance profile over the past decade to further align our strategic objectives with stockholder priorities, keeping the health and safety of our people paramount, fostering a diverse and inclusive culture and developing our future leaders, having a positive impact on each and every community in which we operate and protecting the environment by improving areas of our operations that can be more sustainable and by producing the precious minerals that are key elements of the technologies that enable a cleaner future. Despite how far we've come, we're just getting started.
We continue to set bold ESG executing the largest exploration 19. Program in our ninety plus year history with a commitment to sustaining higher levels of exploration to add resources and further extend our mine lives and are poised to benefit from an expansion project that transforms Rochester into our top performing operation. Core Mining is on track to fundamentally reposition the company
Okay, great. Well, we've been looking forward to this day for quite a while. We're super excited to share details around several initiatives that we think can really move the needle for our investors in coming quarters and years. Joining me here today virtually are six of my colleagues shown here, And together, we'll cover each of the topics shown here. Each presentation will be about ten to twenty minutes.
I couldn't be any prouder or more enthusiastic about what we'll be sharing with you today in each one of these areas. And then after the presentations, we'll hold a Q and A session. You can submit questions at any time during the day, during any of the presentations, and then we'll consolidate them and cover them during the Q and A. For those of you new to the company, Slide six provides a brief snapshot. We're a mid tier U.
S.-based, U. S.-listed gold and silver producer with a balanced U. S.-centric and North America only footprint. When you combine that profile with the quality and quantum of our growth, our multi asset platform and our metals mix, we feel we're a unique company within the precious metals mining sector. We've summarized here what I consider the most important takeaways from the presentations that you'll hear today.
First off, we have a great culture here. From the Board to our dedicated frontline operators and everyone in between, I truly believe the famous saying, culture eats strategy for lunch. You can have the best strategy in the world, but an unhealthy culture will keep you from succeeding and realizing that strategy every time. And it's been absolutely critical in a year like 2020 to be able to rely on and lean on the kind of strong foundation and culture that we've developed here over the past few years. Our culture here is all about proudly protecting our people, places and planet, developing our human capital and our assets and delivering results and value for all stakeholders and doing it as a team.
To be a high performing organization, a company's culture, strategy and capabilities need to be aligned. And this company now has these three pieces in place: a healthy culture, a solid strategy and the team to deliver it. Emily Skouten will talk more about our terrific people and culture shortly. The second takeaway is that we are a true ESG leader. You won't find many other mining companies with a more tangible set of results, with a more credible program and effort than us.
This is not just lip service. We pride ourselves on our strong ESG platform, and there are countless examples across the company of our employees pursuing a higher standard each and every day. We've also received outside recognition for our efforts, including a number one ranking among our peers by Sustainalytics, a number one governance score from ISS, and just last week, we were listed by Newsweek magazine as one of America's most responsible companies. Casey Nalt will go further into our ESG efforts in a few minutes. The third headline is that this Rochester expansion is the real deal.
It is going to totally transform that operation and in turn our company. You'll hear from Mick, Terry, Hans and Tom about more of the details, but here are a few of the headlines. The reserves only NPV is $634,000,000 with an IRR of over 30%. There's an initial eighteen year mine life, and that includes four fifty nine million tons of proven and probable reserves. Now that's a 70% increase year over year.
So our exploration and our engineering work has been very successful in bringing in much larger proportion of total tons. What's not included in this plan is equally exciting to me. There's over five twenty five million tons of resources not in this forty three-one hundred one technical report mine plan. Also not in this mine plan or in this report is anything over at West Rochester, which is more than double the land package and has historic higher grade material waiting to be drilled. Hans will tell you more about that later today.
The mine plan shows average annual production of over 8,000,000 ounces of silver and about 80,000 ounces of gold over the first decade. That's double recent production levels. It will make Rochester the country's largest primary silver mine, and it will generate around $100,000,000 of free cash flow each year. And the construction capital of $397,000,000 is fully supported by a well balanced and well conceived funding plan comprised mostly of cash flow from our other operations. Another key takeaway from today is just how much exploration has become a differentiator for us.
We'll invest about $50,000,000 in exploration in 2020, and we plan to keep investing heavily in exploration going forward. You'll be hard pressed to find another company allocating this level of capital to exploration on a relative basis and one that is able to consistently grow its reserves and resources over time like we've been able to demonstrate. About 80% of this program is taking place near our existing underexplored operations, which is leading to longer mine lives and opening up new opportunities for us as we evaluate ways to optimize our mines and unlock untapped potential. From that other 20% of the program, we've made a new major gold discovery in Southern Nevada called Seahorse. With more successful drilling like we've seen, we think this area has the potential to become a multimillion ounce gold district and be a future source of growth for us.
Hans will provide more details on our exploration success and the potential for continued success at Rochester and Seahorse. He'll also give you an update on the results of our exploration investment at Silvertip this year. And speaking of Silvertip, a restart there looks encouraging. We're really encouraged by the technical work that's been completed this year, and we're really excited about the exploration results we're seeing. Although Rochester will remain our number one growth priority, we think there's a path forward for Silvertip to become a meaningful long term source of cash flow for the company.
The PFS work this year has led to a new flow sheet for a seventeen fifty ton a day expanded mill that would replace the existing undersized, antiquated and poorly maintained equipment. The MET program indicates materially improved recoveries and concentrate grades. And as I mentioned, the exploration program has validated the quality and the prospectivity of the district. Our priorities at Silvertip in 2021 will be to optimize the capital requirements, complete additional test work, incorporate more drilling results and then complete a 40 three-one 101 technical report in the second half of the year that demonstrates an attractive path forward for our Board to consider. And then finally, Tom Whelan will show you what this all means for our production and cash flow over the next three years.
We expect to deliver strong silver production growth, mostly from Rochester, and modest gold production growth compared to 2020 levels. Operating cash flow is expected to increase 2.5 times from 2020 to 2023. And most importantly, strong free cash flow is expected beginning in 2023 after we complete the Rochester expansion in late twenty twenty two. Tom will also show you how our balance sheet and our leverage levels look over the next three years as we work to deliver this plan. From the prior slides, you probably get a good sense of our priorities and what our overall strategy is.
But just to be clear, our strategy is to safely and responsibly discover, develop and operate quality precious metals assets in low risk jurisdictions to maximize cash flow, returns and net asset value. We want to maintain a balanced portfolio of five to seven assets located in top tier jurisdictions with a unique metals mix weighted toward gold. We want to return high we want to deliver high return growth in cash flow by advancing a set of near term and longer term organic growth projects, by sustaining an industry high level of exploration, especially near our existing assets and by pursuing selective M and A that can enhance the quality of our assets, differentiate the company and generate attractive returns. With this road map, we think we can become a 4,000,000,000 to $6,000,000,000 market cap S and P 500 company and distinguish ourselves based on returns, responsibility and reliability. We possess many of the ingredients of this strategy already.
We have a balanced set of assets now, which is serving us well here this year. Wharf, Kensington and Palmarejo, we're all generating excellent results this year, which is why you won't hear much about them today. Instead, we'll be focusing, more on the catalysts, at Rochester and Silvertip. We operate in top jurisdictions. We've really compressed down our footprint over the last decade to focus really on lower risk nearby jurisdictions to mitigate geographic and geopolitical risk.
And then in terms of our metals mix, we have really flipped that around over the last decade from what used to be a primary revenue base silver revenue base company to now mostly gold, but we still want to maintain that significant silver exposure, which we do, and we think that turns out to be a unique metals mix. We have no shortage of high impact organic growth opportunities to help us deliver this strategy. This slide highlights the attractive mix of near term, medium term and longer term opportunities that we possess, which are spread across the exploration, expansion and optimization categories. Now Rochester represents the greatest opportunity across all these categories and over all these time horizons. However, there are many more than that, as you can see, some of which you'll hear a little bit more about today.
So in summary, I'm really enthusiastic about our strategy, the opportunities we have to create value already inside the company and the team we have to prioritize and deliver it. Now let me turn it over to Casey Knoll to talk about our ESG initiatives, which will hopefully give you a better appreciation for who we are as a responsible company. Casey, over to you.
Thanks, Mitch. I'm excited to share an update on recent achievements and upcoming milestones for Core's ESG initiative. We have been a leader in ESG since before it was called ESG and we're committed to continuous improvement. This slide shows what matters to CORE, the results of our internal materiality assessment to identify the ESG factors that are most relevant to our company. These are not static.
We review and update them over time. For recent ESG accomplishments, 2020 has been a year of big achievements, recognition and leadership. In terms of achievements, we published our first responsibility report, which included SAS Violined reporting and mapping to GRI. In the responsibility report, we set specific long term goals. We also developed a TCFD reporting roadmap in 2020, completed a community relations assessment and strategic planning exercise, and completed an internal pay equity analysis.
In terms of recognition, as Mitch mentioned, we've been ranked number one among peers by Sustainalytics. We also won best proxy statement by Corporate Secretary magazine for the second year in a row and Best Miner Governance North America by Capital Finance International. We have maintained a number one governance rating from ISS for several years. In terms of leadership, Mitch Krebs was recently named Vice Chair of the National Mining Association's ESG Task Force. And Cory Hickel, our Manager of ESG, has been named to the SASB Extractive Sector Standards Advisory Group.
We'll go through each component of ESG starting with G. I'm reversing the order and starting with governance because it's the most important ESG factor for investors according to a recent ISS survey of asset managers. And who are is the strongest in what matters most to ESG investors? Our goal is best in class corporate governance, not just among our peers, but among any company of any size. There are many highlights of our governance program listed on the slide, but I'd like to call out in particular a few.
Board refreshment. We have actively refreshed our board, adding high caliber directors directly aligned with our strategy. We now have a quality balanced board with distinguished independent directors possessing complementary skills and experiences. We have two NACD 100 directors on our board, Rob Mellor and Ken Thompson. We're a leader in diversity and inclusion.
Emily will touch on this more in her section, but I'd like to note that 50% of our outside directors contribute either gender or ethnic diversity. We have proactively adopted leading corporate governance reforms, including proxy access and an enhanced clawback policy that covers misconduct in addition to financial restatements. On this slide, our 2020 incentive plan is outlined. Executive compensation is a key component of corporate governance and a driver of strategic priorities, including ESG. 2020 highlights include increasing the ESG components of our annual incentive plan to 20%.
We also added return on invested capital and major project awards to our equity plan, demonstrating alignment with long term strategy and stockholder value creation. And 60% of our equity plan continues to be performance based, showing accountability and alignment. Moving to the S prong of ESG and beginning with our people. Our goal is to maintain CORE as an employer of choice. In terms of safety, our primary goal is zero harm.
We have a target to reduce total reportable injury frequency rate by seven point five percent on a three year trailing average basis. Emily will talk about our culture and diversity and inclusion efforts more in her section. But at a high level, our goal is to strengthen our culture and foster a diverse and inclusive workplace. Some 2020 highlights. On the safety front, we made decisive and proactive decisions in response to COVID-nineteen.
We've also achieved a significant long term improvement in safety performance, reducing total reportable injury frequency rate by fifty three percent in the last nine years. In terms of culture, we have supported our employees through the COVID-nineteen pandemic. And on diversity and inclusion, we held a day of understanding involving our entire corporate office in March 2020 before the pivotal events that occurred later in the year, such as the death of George Floyd. Continuing with the social problem and talking about our communities, our goal is to positively impact our communities. In terms of 2020 highlights, this slide shows the impact of each operation on its local community.
The theme is long term support through significant investments that will last beyond the life of the mine. As noted before, in 2020, we completed exercise to ensure community relations across sites is aligned with strategy. Turning to the environmental prong of ESG. Our main goal is to improve environmental impact, but also to reduce costs. We don't see any trade off between environmental excellence and profitability.
We see them as directly aligned. In terms of specific environmental goals, there are several listed on the slide, but I want to call out in particular greenhouse gas reduction. We will announce measurable long term goals in next year's responsibility report. And another goal is to invest in energy efficient operations. Key 2020 environmental highlights include climate change and greenhouse gas emissions progress.
Specific initiatives at Rochester And Wharf to reduce greenhouse gas emissions will result in 14,500 metric tons per year of reduced emissions. At Rochester, an improved crushing system and mining process has resulted in nearly 27,000,000 kilowatt hours of energy savings, equivalent to about four months of demand at the operation and a greenhouse gas reduction of over 8,000 metric tons. For this, Rochester was awarded a grant of $435,000 from NV Energy's PowerShift program, the largest award in NV Energy's history. And at Wharf, the operation plans to source over 40% of its electricity from wind in 2021. In terms of biodiversity, CORE was the first private company to participate in the state of Nevada Sage Grouse Conservation Credit System, funding preservation of over 3,000 acres of critical sage grouse habitat.
In terms of ESG disclosures, we recognize that a big part of a leading ESG program is clear and transparent disclosure. We report to leading frameworks, including SASB, which is a preferred framework of ESG investors focusing on financially material items. We debuted our SASB aligned reporting in last year's responsibility report and will enhance in the coming year's report. And as noted before, Cory Hickel, our manager of ESG, has been appointed to the SASB Extractive Sector Standards Advisory Group, which provides us greater insight into SASB standards as they evolve. In addition, will begin reporting to the TCFD standard in next year's responsibility report.
This is a preferred framework for ESG investors, which focuses on the risks associated with climate change. Mitch Krebs' leadership of the National Mining Association ESG Task Force will allow Core to contribute to and benefit from the broader industry's progress on ESG disclosures and practices. We're excited to build on our strong ESG foundation in 2021 and beyond. And now I'll turn over to Emily to talk about our culture and organization.
Thanks, Casey. I'd like to start with a quote I read recently. If a culture is left to chance, it can absorb precious energy and put the handbrake on the organization achieving its purpose and strategic goals. But if led and managed well, culture is the rocket fuel for delivering value to its stakeholders. At Core, we believe our culture and organization is truly the rocket fuel to delivering value to you, our stakeholders.
I'm thrilled to spend a few minutes to share three things with you today. First, how do we define and measure our culture? Second, how do we define successful leaders in our organization? And third, what are the elements of diversity, equity and inclusion that bolster our organization and ultimately set us apart from our peers? In 2019, we conducted our first culture survey at Core Mining.
Our results confirmed much of what we had hoped. We're a safe, ethical and proud company. Our employees feel safe coming to work and raising concerns. They believe we're an environmentally responsible company, and 90% of our employees said they're proud to work for Core Mining. We've purposely waited eighteen months since we conducted this survey to create and implement action plans and identify areas for continuous improvement based on those survey results.
We will be conducting another survey in early twenty twenty one and look forward to sharing those future results as a method of keeping our culture measurable, actionable and accountable. In addition to aligning the executive compensation with the company strategy that Casey spoke about as a part of our emphasis on governance as a company, we drive that same alignment throughout our organization by leveraging very simple goals and objectives, and we use three pillars: protect, develop, deliver. These provide a simple visual framework for each and every core employee to align their daily, weekly and annual goals. However, we don't just measure what's accomplished, we measure the how it's accomplished through our core leadership principles that you can see here. These same pillars provide a framework for assessing how not only our current, but our incoming talent performs in terms of safety and conduct, individually and overall teamwork.
Ultimately, these pillars, along with our goals and our compensation alignment, allow for our employees to know where they stand today and where they're headed tomorrow. So our industry has many factors to consider when we talk about diversity, equity and inclusion. To support our communities, we hire locally. Those communities can be remote with limited technical candidate pools. We're a global industry, so diversity in Mexico looks quite different than that in The U.
S. And we maintain strong relations with our indigenous communities, providing training, scholarships and job opportunities. All that being said, we factors and then measure, prioritize and focus on our key priorities to continue to grow diversity throughout our organization. And there's four key wins I'd like to highlight for you today. First, our partnership with Women in Mining has increased awareness of CORE as an employer of choice.
And having 66% of our females in leadership positions provides a great pool of spokeswomen to drive the awareness of CORE as a great place to work, and we continue to increase our female hires. Next, Mitch was the first and only precious metals mining CEO to pledge the CEO Action for Diversity and Inclusion. This pledge has provided us with resources to leverage from some of the world's biggest companies, and we drive important practices like gender and race pay equity throughout the business. Third, our U. S.
Military hires continue to be a wonderful source of young, diverse talent through our CORE HEROES program. And finally, our impact training for all frontline supervisors provides a window into our up and coming talent as well as ultimately driving the strong culture we have created at Core. Now we have all heard how 2020 has impacted various industries and even eroded companies' cultures. At Core, I would argue the opposite. As an essential business, our team and the culture I've just described to you has thrived and become even stronger together.
Our focus since March has been twofold: first, keep our employees and our communities as safe as possible and two, minimize our business disruption. In the video that you're about to watch, you'll hear how our aggressive testing strategy, conducting over 16,000 tests on our 2,900 employees and contractors, along with our Triax contact tracing technology, has helped us in achieving those two objectives.
In early twenty twenty, Core Mining realized that the novel coronavirus was potentially going to be a very serious issue for the operation and its employees. The company quickly made the decision to form an internal committee made up of the executive team, the general managers, the health and safety managers, and the HR managers to organize a response plan. The goal was to prepare for possible exposure to novel coronavirus within the company. The action taken involved the formation of the multidisciplinary internal committee. Its purpose was to evaluate and address any ongoing concerns, risks and challenges of COVID-nineteen.
On 02/27/2020, Core provided its first guidance to site health and safety teams. From the start, the company looked at the guidance from several key agencies, including the CDC, the World Health Organization, and others on what mitigation should be. Core incorporated those foundational pieces into its response plan, including site access controls, temperature checks, symptom checklist and verification, travel protocols and more. The intent was to safeguard the health, safety and well-being of employees, contractors and communities and to also minimize business interruption. CORE formalized an approach around testing, tracing, technology utilization and communication plans to communicate with employees.
STC Health was the primary outside partner that CORE engaged with to address the issues around testing for COVID nineteen. Here's STC chief epidemiologist, Doctor. Kyle Fries.
So we've been involved with Core Mining for several months now. Us at STC Health, in collaboration with some other industry leaders, have developed a return to work strategy that we've, entitled SAFE. What that means is that now testing and preventive measures are more important than ever. And the reason why that is is because if we're looking at a community and looking to kind of stem the spread of COVID nineteen within a community, we need to know who is potentially infectious to others so that we can educate them to remove themselves from circulation so that we let them the virus naturally die out. So that's one of our strongest tools at this point as we're working towards a vaccine and keep people safe.
It's a really robust testing strategy. So as epidemiologists, we wish that more companies would like for it, to be the truth. It's really nice to have an engaged employer who listens to the science and is so obviously, involved with their employees' health.
Hi, everyone. Thanks for spending some time with us today. I'll start this part with a brief highlight of the organizational changes that we made We created a project organization under the leadership of Terry Smith, and this was essential because we have two major projects in the portfolio that are going to be coming online, and that needed some more focus. And Terry has two great leaders for those projects.
If we take a look at this slide, you'll see that Bassi Marie, a seasoned operator, is in there to lead the Silvertip site, and he's based in British Columbia at Silvertip. And Patrick Hickey, a very experienced project professional, and he's leading the Rochester PW11 project in Nevada. And Terry will give some more details on these projects in a little while. On the operations front, we have Cody Sutherland, and he's going to continue to lead The U. S.
Operations. And Elena Ware has joined us, and she's leading the Nevada sites. The team is critical to success, and this strong team is just getting stronger. If we move on and take a look at the portfolio overview, it shows that we'll have a great portfolio of Sylvain gold assets with an exciting three year outlook. That three year outlook is going to deliver a million ounces of gold, actually nearly 1,100,000 ounces, in fact, and over 38,000,000 ounces of silver.
All of those assets are in North America, which continues to be a good mining jurisdiction. Now let's cover a little bit on operations and projects and that strategic alignment with those areas and exploration and the rest of the organization. The overall organization is well aligned under a management operating system. This includes clear accountabilities and a very solid schedule to get things done. We run a collaborative approach, developing long, medium and short term plans.
And internally, we call that a tiered approach. Tier four, our long term plans, Tier three, our strategic plans and Tier two and one, our more tactical plans for budgeting and forecasting. The Tier four plans, they're more aspirational, but they're grounded generally on data, some kind of science, drill holes, technology in the market. So it's Tier four with high potential, but it's within the realms of reality. Our Tier three plan or medium term plans are the strategic plans, and they are largely a five year window of objectives but linked firmly to the life of Maine for each of the assets and projects where applicable.
Then we have the short term Tier two and Tier one plans, and they're in the zero- to three year window, and they form our budgets and forecasts. This structure is supported with a clear and robust process for transforming assets into solid opportunities and driving them down into strategic plans and then on into the short term operating agenda. Exploration and projects are the main vehicles for that transformation, but it is an integrated approach. So we involve the disciplines of team development and risk management and financial performance. It's a higher standard, and we've got control and we're driving it.
If we take a look at some more detail of the operational framework and our commitment to safety, this is the foundation of these processes, and it really is a risk management based approach. And it leads us to understand better what the threshold, the target and the stretch are for each of the measures and the expectations that we look at on key objectives across the core balance scorecard. This understanding built into the management operating system allows us to control the potential downside and focus on the programs and realizing more upside for the business. We'll talk a little bit more about that in a second, but the same risk management framework and processes are applied to health and safety challenges. There's nothing more important than keeping our team safe.
If you look at the graphs at the bottom of the slide, we're making great progress in driving towards zero harm. Now a little bit more detail on the upside, the business improvement program and the project delivery system. As we drive towards longer main lanes, we also have programs to make those lanes more efficient. Our business improvement program consists of a portfolio of projects, and we use a rigorous stage gate process that ensures we execute the highest value priorities based on a robust business case each time. The improvement targets within those projects have KPIs, and we track those beyond the end of the project to make sure that those values that we drive and achieve are sustained over time.
If we take a look at a couple of examples of this. At Palmarejo, for instance, we've been working on recovery improvements and have done a huge amount of work on a lot of small and some larger projects and so far delivered over $7,000,000 in sustainable annual value add and continue to look for more opportunities in that space. Kensington, that's another good example. The BI program has been applied to the stockpiling and ore sorting to try and upgrade the ore before it goes into the plant. And so far, they've delivered $2,000,000 worth of sustainable improvements from that project and the continuing focus on that area.
They're just a couple of the examples of the projects that are going on across the whole organization at every site to drive efficiency, productivity, cost reduction or risk mitigations. Now I'd like to talk briefly about Rochester and specifically the fantastic expansion project that we have there. The Rochester improvement program is moving along very nicely and supporting our efforts to derisk the PAY 11 project. Effectively, we're using the heap leach pad Stage four and the existing HBGR crushing circuit as a full scale test pit to drive performance improvements in throughput and recoveries. And we're using short interval control to achieve that.
The process has to be balanced to optimize tons through the system and the particle size distribution at an optimal fraction to maximize the recovery of the metals. The focus is end to end, right from the main all the way through to the refinery. And we have a technical program. It's very robust, and it's you can see some of the elements of it on this slide where we're driving modeling, blasting, crushing, leaching and recovery. And all of those projects are contributing to improvements that give us assurance that when we put PAD VI on, it will perform as expected.
And once that PW11 project is complete and the new areas are ramped up, they're operating One aspect of that short interval control is the installation of another phase of interleft liners, Phase four, and this can be seen on the slide shown. It gives us visibility of control adjustments faster and continues to address the challenge that we have previously from dilution during the depth delay in the older areas of Part four. This strategy is working, and we'll show some results of that in a second. That new lane will be installed, the FIES four lane in the early part of 2021.
And that will happen before we exhaust the capacity of FIES' one, in the lift lane. So we can continue with that short interval control and have good visibility when we make changes. As we can see on this next slide here, the performance optimization is driving a sustained improvement in the current PADD IV operations. We can see that the PADD III is tailing off as it naturally should, and we're filling that gap with significant performance improvements from PADD IV. The team at Rochester are breaking all kinds of records for throughput and recovery, and they're just doing a fantastic job.
And you can see the profile there and have set and worked very well for that expansion and when we get into PADD six. We're building all of those lessons that we're learning into the construction, the commissioning and the operating strategy for PWA 11 and the Heatmage PADD six. Now let's take a look at the expected value that we're going to unlock at Rochester. If we take a look at this slide, you'll see the value generation and the returns expected, and that's summarized here, but that's described in detail in the technical report that we issued yesterday. You can find that on the website if you want to go and look for it, but let's discuss those numbers here right now.
It's a significant improvement in value when we consider that this technical report and the NAV of $634,000,000 is based on reserves only. The expansion project has given us a great improvement in free cash flow from Rochester, over $100,000,000 on average for the first ten years after post construction. This provides Core with a great foundation of sustained long term cash, and we can build on that with additional exploration at Rochester and at our other assets. We'll talk a little bit more on this for a few minutes when we cover the reserves and the resources update for Rochester. But first, I'll pass the presentation to Terry, and he'll cover some details on the Rochester expansion.
And we'll start this with a short video to give you a good visual of the site and the various elements of the project.
The core Rochester mine, located 28 miles east construction of Phase one of their plan of operations, Amendment No. 11, in early twenty twenty one. The project will consist of a new crushing circuit, heap leach pad, Merrell Crow processing plant and ancillary ancillary support facilities. Construction of the crusher corridor will begin with the excavation for the stockpile reclaimed feeders and tunnels, which will be constructed and backfilled. The primary crusher will accommodate dual 200 ton haul trucks dumping into the crusher at the same time and crushing 77,000 tons per day.
Control room in the primary crusher will control operation of the crushing circuit. Ore will be discharged to the coarse ore stockpile and then conveyed to the secondary crusher. The secondary crusher will utilize apron feeders, vibrating screens crushers. Ore will then be conveyed to the secondary stockpile and then to the tertiary crusher, which will utilize two HPGR crushers. As ore is conveyed from the tertiary crusher, lime will be added to the conveyor.
Ore will then be stored in the final product stockpile, which will feed the truck load out. The Merrill Crow process plant will use seven clarifiers, then remove dissolved oxygen in two Crow towers. Then zinc will be added to precipitate metals, which will then be filtered through four filter presses. Geomembrane will be deployed on the pad. Collection piping will then be deployed and then covered by overliner, which will be transported from the site's existing crushing circuit.
Before the new crushing circuit is energized, the Orianna Substation will be upgraded. The existing 60 kV power line will be replaced and upgraded to a 120 kV line, and the new Panama substation will be constructed just west of the new Merrill Crow building. The pad will be stacked with trucks loaded from the new truck load out. This expansion project allows Rochester to continue to operate well into the future.
Thanks, Mick, and good morning, everyone. Pleasure to be with you virtually today. I want to make two key points with respect to our expansion project at Rochester
to set the stage.
First, we are already in the execution phase of the project. But this has been years in the making, and we are entering the next two years well positioned to deliver. The second point I'll cover is that the project unlocks a lot of value for Rochester in a couple of simple ways: increased scale and silver recovery improvements. This first slide does a good job of highlighting the key infrastructure required for the expansion of Rochester. It's exciting for me to see this next chapter come to fruition.
Almost from the beginning of my time with Core, coming up on eight years ago, we've been thinking strategically about how to take advantage of such a large and growing resource base at Rochester. The answer has always been scale and trying to balance long term value versus near term capital outlay. I think the tech report does a great job of showcasing how we can create more margin per tonne by making the mine bigger and more efficient along with large crushing and leaching infrastructure. To achieve this step change in scale, we've worked from the mine all the way through to the leach pad and refinery. I'll highlight some of the things from three key parts of the project.
First, the crushing plant. We plan to more than double our throughput rates with major upgrades across the board. Most notably, the primary crusher is a larger, more efficient gyratory versus the jaw crusher we currently operate. And the tertiary crushing stage will include two HPGRs. The crusher will also feature dust collection systems, improving our emissions, which is great for the environment.
The Meryl Crow plant we plan on constructing will have more solution capacity than our current plant, featuring significant technology upgrades to make this a safer, more efficient plant to operate. The Stage six leach pad is in a relatively flat place, which will make leach operations easier to manage than the valley fill pads we've historically operated. And the ongoing capital intensity around future heap leach pad expansions is much more efficient. We won't be talking about Stage VII for a long, long time. Looking at the next slide, the two pistons that drive the project value are scale, which I just described, driving our unit costs down substantially and second, higher and faster silver recoveries.
As Mick just described, there is a clear path to optimize operations at Rochester. And everything we learn from that optimization, we plan to onboard, helping ensure that this project delivers after we're through with construction. Now I'll talk about how we're feeling with respect to project cost and schedule as we look ahead to major construction over the next couple of years. Of course, Tom will cover our funding strategy later. We first started working with S and C Lavalin around two years ago.
During that time, we've gone from pre feasibility level engineering to about 80% detailed design. Together with SNC, we've completed a lot of good value added work, including reconfiguring and optimizing the project, completing geotechnical field investigations and generating designs that have stood up to the scrutiny from the Rochester operations team as well as several third party. On the next slide, we have a high level schedule for the project. As a reminder, we kicked off construction in August. The construction effort is now focused on clearing and grubbing the Stage 6 Leach Pad and establishing some project infrastructure to allow us to hit the ground running next year as our construction efforts ramp up.
Looking ahead, we'll complete mass excavations for the leach pad, crusher and Merrell Crow plant, followed by placement of liner and crushed over liner material later next year. Structural, mechanical and electrical areas of the crusher and Merrellcrow plant follow thereafter. The whole project should come alive in the 2020 as we commission the project and ramp up thereafter. Before I hand things over to Mick, I want to say how proud I am of our project team. While it's early days construction wise, there has been a ton of work to get to this point.
We feel we have all the elements needed to deliver the project safely and efficiently over the next couple of years. I'm looking forward to providing some updates down the road. Back over to you, Mick.
Thanks, Terry. Now let's take a look at the Rochester reserves and resources. It's clear the future is bright for Rochester. When we look at this step change growth in reserves, 58% in silver and 65% in gold, and equally exciting is the great pipeline of resources that are coming towards us with a strong and continued exploration program and some excellent performance in conversion. Hans will talk a little bit more in detail in his presentation later, but these spectacular results have been delivered across the company.
And this year, Rochester is one of the jewels in that crown. To finish, I'd like to refer to this next slide, and it shows that the Rochester project and the future operations are robust in these scenarios where prices might fall in the future. It also shows that Rochester is an amazing value generation engine if the prices hold where they are today. And then the project's just a wow if prices continue to rise in the near or long term future. With that, I'll hand the presentation back to Terry, and he'll talk about the exciting Silvertip project that we have.
Thanks. Terry?
Mitch laid out the company's company's strategy earlier: good assets in the right jurisdiction capable of generating strong cash flow. With what we are seeing in exploration and the technical wins we've had in our prefeasibility study, we're excited to share a more comprehensive update on Silvertip next year that will demonstrate all of those qualities. Turning to the goals and accomplishments of the prefeasibility study, we kicked this effort off earlier this year, shortly after our decision to suspend production. To focus the study team, we identified the reasons the operation wasn't successful. At the top of that list was ensuring that Silvertip two point zero would be designed with our employees' health and safety in mind.
We've come a long way over the last eight months. The operation we envision will be a simple, sustainable operation that can generate great cash flow for the company. To give everyone a little color on some of the engineering wins we've had, the mill will be a clean, easy to operate, state of the art facility consisting of modern equipment that will squeeze out all the silver, lead and zinc that we can. Our goal is to reduce lead exposures to our mill operators, making the mill a safer work environment. I'll get into mill and metallurgy performance shortly.
We optimized the mill expansion to deliver the best NPV possible, and we landed on seventeen fifty tonnes per day. This is nearly 2.5x higher than our best average mill throughput in 2019. And the mill has been designed with redundancy and flexibility, helping to ensure our availability will be high. We've identified a power generation solution that will significantly reduce our power costs. Previously, the operation was running on rental LNG units that were inefficient and expensive.
We intend to construct a vastly improved water treatment facility, which will keep us in compliance, and more importantly, it's the right thing to do for the environment. Now to discuss mill performance in a little more detail. The next slide shows the new process flowsheet. The additions to the flowsheet might seem subtle, but they are very significant in terms of the metallurgy performance. Not to turn this into a metallurgy discussion, but I will make a few key technical points.
The carbon pre float means that our lead and zinc circuits will be fouled with black sludge, improving our flotation performance. Carbon is a natural geological feature of the deposit. Next, the lead regrind mill will help us generate a higher lead concentrate grade. Finally, the lead zinc circuits will consist of new modern flotation cells and enough of them to facilitate the retention time we need to get great recoveries. On the next slide, you'll see how these flow sheet changes translate into projected recoveries.
As we look ahead, we are planning to build a comprehensive, integrated mining, metallurgy and production schedule that we are capable of delivering. So far from these great results, we are confident we should be able to generate concentrates that are commercially attractive. This met performance, along with higher throughput, translates into higher margin per tonne than the original sub-one thousand tonne per day configuration of the project. Layering in the exploration story, Silvertip has the potential to create a compelling investment opportunity for the company. Thinking back over the past ten months, our team has delivered on the original objectives.
In addition, the site conditions have had a lot of TLC. They've been far from idle, resetting the site and cleaning up a lot of the legacy issues. We're ready for a potential expansion, but understand there is still more work ahead of us. Looking ahead, we're taking a disciplined projects approach by moving from pre feasibility into a more comprehensive front end engineering and design phase. This next phase will focus on advancing engineering through detailed design to give us capital and schedule certainty.
Hans will talk about our exploration success shortly, but it's easy to appreciate that a longer mine life will help support an investment decision. Fortunately, our exploration results speak for themselves in this regard. Not to steal much of Hans' thunder, but we're particularly excited about the hits to the south, and we've recently restarted underground development to support additional drilling to follow-up on those intercepts. Our intent is to wrap the engineering exploration and overall plan for Silvertip into a technical report in the 2021. Around the same time, we'll go through an internal stage gate to understand how this potential investment fits in with all of our other priorities and really pressure test the project technically and financially.
Just to reiterate, we'll be taking a structured and disciplined approach to Silvertip and all of our investments in the company with our hurdle rate and ROIC objectives in mind. Tom will cover this in more detail later. Hopefully, we've given everyone a good sense of all the work completed thus far and what lies ahead for us to deliver on our goals. I'm looking forward to pulling back the curtain next year. Now I'll hand it over to Hans.
Thanks, Terry, and good morning, everyone. With the largest budget in the company's history now almost fully implemented, I have lots of great news to talk about. Today, I'll focus on three sites where we have added significant value with the drill bit in 2020. First, Rochester then Silvertip, British Columbia and then Crown, Southern Nevada. At the start of 2020, the Board approved the largest exploration in Coors history.
Our guidance range is between 50,000,000 and $60,000,000 Based on current forecast, we'll most likely hit the lowest part of guidance. Most importantly, we've just passed a new company record of over 700,000 feet drilled this year. And already, we are seeing significant potential for resource and reserve growth from this drilling, as demonstrated with the Rochester technical report. The Board of Directors, executive team and investment committee have been extremely supportive this year of exploration, and I thank them for their support and commitment. For the next three years, Kura will maintain a commitment to higher level of exploration, mainly on expensed resource growth, but with the hope of also some conversion and with some infill dedicated at certain sites.
At Kur, our exploration objectives are aligned with operations and finance to achieve the highest return on invested capital and also reduce operational risk. So grade, proximity to infrastructure are obviously important. The strategy has been demonstrated in 2020 with new discoveries at Rochester Silvertip and Crown, which I'll talk about today. As a review of the exploration progress throughout the year, the executive team meets once a week, the investment committee once a month, and then I do presentations to the Board about five times a year. All these meetings confirm our alignment with human resources and operations to make sure we're focused and we achieve our objectives for the year.
As Mitch mentioned, we have had a transformational year for Rochester across the board, including exploration. A brief history. Exploration at East Rochester began in 2014 when we initially drilled reverse circulation holes identified in an area identified under Leach Pads 1 And 2. Following the RC phase, we drilled one core hole that was a twin hole of our first RC hole, considered the discovery hole of the zone, and had some fantastic results. We published all these results in February 2936.
The RC hole had 1,300 feet averaging 1.11 ounce per tonne silver and 0.003 ounce per tonne gold, almost more than double the grade of the reserve at Rochester. That included a four ninety feet zone averaging 1.95 ounce per tonne silver and 0.005 ounce per tonne gold, significantly higher. The twin core hole, which I would consider actually the more accurate test of higher grade zones in the area, was very similar for the overall average grade of that 1,300 feet, but had some very high grade zones within it, including 118.6 feet of 2.78 ounce per tonne silver and 0.009 ounce per tonne gold and 179.1 feet of 4.75 ounce per tonne silver and 0.009 ounce per tonne gold. And within that zone, there was a 4.1 foot zone of 55.8 ounces per tonne silver. These are tremendous high grade zones, and we interpret these as being zones the old timers didn't get to in Rochester just because they're off to the East, they're probably underwater table.
And so the old timers mainly stayed over to the West where we now have our open pit. So that's the exploration upside in terms of grade for the future of Rochester. In 2020, as we found out Poy 11 is moving forward, we focused on grade improvements through the drilling at East Rochester that you see in this slide and on reserve growth beneath the water table in the pit. The site team led by exploration manager Richard Yancey has done an excellent job employing high precision directional core drilling technology. Because we didn't have confidence in the original holes under the leach pads over the last couple of years, this type of technology drives the core to flatten a bit more so we can cut across the ore zone to get an estimate of true thickness.
12 directional core holes were drilled and two conventional holes were drilled, as you can see on the slide here. Significant upside still exists. The zone remains open to the north and south. Note the higher grades in Hole 1010 on the slide, 195 feet of 2.35 ounce per tonne silver and 0.016 ounce per tonne gold. This is very similar to what we drilled in the twenty fourteen-twenty fifteen era.
So these higher grade zones do exist under East Rochester. It's very exciting. On the infill program, 46 RC holes were drilled into the main pit. Several of these holes actually demonstrated some upside, which was quite a surprise. And our idea was to try to just test beneath the water table.
Like the hole shown here, three thirty feet of one ounce per tonne silver and 0.004 ounce per tonne gold. That basically went below any of the prior models we had for the in pit drilling. As mentioned by Mitch earlier, reserves at Rochester grew in twenty twenty one hundred and ninety six million tons, mostly in the proven category. This is a 60% year over year growth in both silver and gold growth, the largest reserve conversion in Rochester's history. We've left some romance in the story.
Thanks to laboratory turnaround times, we have several holes in the lab that aren't included in this 2020 model and the tech report. So we expect to get those in over the next couple of months and incorporate those in the updated model in 2021. And more significantly, a wedge, the wedge over on East Rochester was left undrilled, simply because we couldn't flatten the holes enough to get under that leach pad. And you can see on the right side of the screen here of the slide that there's a significant amount of material that can be drilled once the leach pad is removed. Also in the pit, there are several now larger pink areas that can be infilled over the next year or two.
Those will be reserve potential for reserve conversion in the future. That's not the whole story. For the future, we expect significant growth still at Rochester outside of the current pit. East Rochester remains open, both north and south. The East Packard, which would be on the same feeder fault as East Rochester, is just to the south in the image here, and that remains open and untested.
And then moving west all the way to Lincoln Hill, we've got several targets that are mainly gold that have been drilled in the past, but we'll just get going and start drilling those in 2021. I want to point out at Lincoln Hill, in our current resources and reserve statements, there's 600,000 ounces of gold and almost 20,000,000 ounces of silver in just resource. So we expect to see significant growth just beginning with that small resource over the next couple of years. When you look at our overall land package, we extend from East Rochester to Interstate 80. This is significant.
And what's interesting about this is most of the new stuff we acquired from Alio is gold rich. We've compiled geology, geophysics, geochemistry for the entire area and plan to do additional infill on geochemistry and geophysics. Drilling should begin in mid-twenty twenty one at Lincoln Hill Independence Hill, where we have a small acreage disturbance left in our initial five acre notice and then move to Gold Ridge later in the year. Q3, we expect a 200 acre disturbance approval from the BLM. With this 200 acres, we foresee lots of drilling over the next two to three years.
And future work will continue pushing west towards Wilco, where we've interpreted, based on geophysics and geology, two intrusive related gold systems that are buried under the historical pit areas. Even at Gold Ridge, I wanted to show the significance of the potential there. We barely began to understood the geology with our new compilation, And we found a significant number of good oxide gold intercepts from the database that was provided to us by Alio. In 2015, Ripatch drilled this area and they announced in January 2016, 18 of the 25 holes they had drilled had significant mineralization. This covers 1.4 miles of strike length north and south on a vertical fault that's got solidified limestone in it.
The best interval was 120 feet of 0.033 ounce per ton gold, so a very gold rich system. The structural style and alteration looks similar to Florida Canyon, which is currently being mined to the north. But we think there's some mineralization that's at depth posted in the Rochester formation that hasn't been drilled. And the Rochester formation is our typical host at both Rochester and Lincoln Hill. So significant upside still exists, and this is a story that will continue to evolve for the next couple of years.
Moving now to Silvertip. With the decision to review a much larger production scenario at seventeen fifty tonnes per day, our exploration program had to quickly switch to start testing the edges of the outer limits of mineralization. 2020 was the largest and most successful exploration program in the history of the project. The site team led by exploration manager, Ross Easterbrook, has been extremely successful. We had up to six rigs active throughout the year.
By the end of the year, we'll have over 200,000 feet drilled. They'll continue in early twenty twenty one with five rigs and then ramp up again in 2021 to six rigs. To give you a feel for the implications of the 2020 program, the slide demonstrates what we knew in 2019 is in the colored shapes. Those are the resource shapes for the different zones at Silvertip, and the infrastructure is shown as small black lines of the underground mine. Those were what we knew in early twenty nineteen.
At the 2020, we've we've now got mineralization that extends from the south to ridge to the north at the Silverknife zone. And moving to the next slide, you can see even more the impact of our drilling this year. The shapes in the blue are the discovery zone, and that was what we knew at the 2019. And now we have over 3.5 kilometers of mineralization defined with the drilling from 2020. We have four zones to drill as opposed to just the ones shown here in Discovery.
Cada Zone is a new one to the north. You can see the holes under the old camp and new camp. The Discovery Zone even has room for expansion to the south and north. Camp Creek Zone and Tour Ridge Zones are both new this year. In fact, the Camp Creek and Tour Ridge zones had no drilling prior to our program in 2020.
We think these are connected because the model is really simple. Massive sulfide is hosted in lower McDame limestone, and it's consistent from north to south. There are variations in the lead and zinc contents, but those variations are really a result of zoning more than the host rock. The upside potential for 2021 drilling is emphasized also in this section. You can see in the Camp Creek zone, the southernmost hole has significant thicknesses and grades and remains open to the south towards Tourer Ridge.
And at Tourer Ridge, we have significant thicknesses that remain open and no resource shade yet is put on the Tourer Ridge area. So you can see there's definitely upside once we get going again next year. Also, the infill program should get kicked off early twenty twenty one with a decline now being developed, as Terry mentioned in his piece. And once that decline is completed in Q1, we can drill from underground to drill Discovery South and Camp Creek. We expect to do some infill drilling at Discovery North in the winter and then also move to Camp Creek as snow starts to melt so that we get some likely conversion from those zones in q one and q two twenty twenty one.
Moving now to Southern Nevada where things have been heating up over the last couple of years. Since buying Northern Empire in late twenty eighteen, we've slowly turned our focus to the northern portion of our property. The North area appears to have the most potential growth based on our geologic analysis, Where in 2018, we were just kicking rocks with Corvus, they had some drill rigs turning. We hadn't gotten drilling yet. Today, see two rigs from Corvus.
We have drill rigs from Anglo up to the north of the Silicon project. Kinross is drilling their projects. And Bullfrog Gold is reputed to have three drill rigs turning at their project at the old Bullfrog Mine. So things are really heating up in Beiti. At Crown, our team led by John Schaff and Johanna Pedrosa began 2020 with a modest budget focused on near resource growth in the DAISY, SMA and Secret Pass areas, all three resource shapes we had inherited from Northern Empire.
After receiving assays from the second hole of the Seahorse program, where we had two thirty five feet of 0.05 ounce per tonne gold of oxide gold, all of our focus moved to the northern portion of the Crown project. Note the color of the water coming out at the drill rig in the picture in the lower left. That's, exactly coincident with the ore zone. So it made it really easy for us to to log the geologic logs knowing where the ore zone was. Two is considered a discovery hole by almost any metric.
This became a geology stream. The discovery of Seahorse was based on a gravity survey that was done in late twenty nineteen and into early twenty twenty. It indicated a Horst block in the Paleozoics just below that area. So with the hole on top of the Horst block, we actually found mineralization in the upper volcanic rocks. Subsequent to the discovery at Seahorse, we have drilled over 43 holes from two platforms mainly.
Coincidentally, both of those platforms were right on top of the ore body. And with assays now back from '25 of those holes, we've begun building the geologic model based on geologic logs and photos and three core holes. The Seahorse ore body is oxidized, disseminated, epithermal gold only. It's a very distinct system from other things we've seen in the Crown Block and in in the, Sterling Mine in that the, geochemical signature is almost only gold. You can see the core there is bright red from oxidation of what was once sulfide.
The host rock is the Bullfrog, tertiary Bullfrog formation, which is a tough, it's the same post rock as at the Bullfrog Mine located 15 miles to the west where Barracken Lac mined almost 2,000,000 ounces of gold. It lies about 500 to five fifty feet deep and drops off to the north, west and east. Higher grades are found along faults, and we still don't have a good resolution on what those grades are because our platforms weren't optimized for cutting the faults perfectly. However, you can see Hole 26 on this slide has higher grades near the bottom where we do cut the fault. Some of the intervals we've seen from these faults are up to seven grams per ton.
In parallel with the discovery of the
Seahorse mineralization, we employed several geologists to do detailed geologic mapping and sampling. We collected some more geophysical data and did an integrated interpretation of the district. And it looks like everything points to the south. There's surface mineralization at Pipeline Gulch, TWA, and near Hole 4 that looks just like Seahorse. And we found also with this mineralization, we found gold on surface.
With an amended 300 acre plan of operation, Crown, we expect in early twenty twenty one to begin drilling south from those two platforms. And with two RC rigs now active, we'll add a third in January. And we have one core rig currently active over at Seabrook Pass. We'll also push north from the SNA resource and try to connect both these areas, Seahorse and SNA. I am very excited about this Seahorse discovery.
It has significant potential to grow, and it's exciting to watch Beatty become one of the most actively explored new areas in Nevada. This has been one of the most exciting years of my thirty five year career. And with these new discoveries from Silvertip, BC to Crown, Nevada, I can see that 2021 is going to be a very exciting year too. We have excellent upside potential in all six of our exploration projects from Silvertip to Palmarejo. Now let me turn it over to Tom Whelan, who will talk to you about plans to keep our drill rigs, mills and mines operating.
Tom, over to you.
Thanks, Hans, and hi, everyone. It's great to be with you all virtually. Time for the money slides. I'll take a few minutes to walk through our capital allocation framework, our guiding principles about maintaining a prudent balance sheet and present the three year financial outlook for the business. We're all very excited about the free cash flow outlook beginning in 2023.
Beginning with capital allocation, the $397,000,000 Rochester expansion, the $175,000,000 of exploration over the next three years and the potential restart at Silvertip are all examples of investment decisions that have gone or will need to go through our investment committee before we decide to allocate capital. The investment committee ensures the key risks associated with the capital requests are understood and mitigated to acceptable levels and that there is sufficient return above our cost of capital. The next slide provides a summary of our overall funding strategy. We are confident we can fund Rochester's expansion and these levels of exploration through our existing cash on hand, operating cash flow from our four operating mines and our existing debt capacity. Two of our critical balance sheet metrics are net debt to EBITDA and liquidity.
We are targeting to keep net debt to EBITDA below 2x and to maintain liquidity of at least $100,000,000 throughout the entire Rochester construction period. A key risk mitigation action we took as a company to achieve these targets was to put in place downside protection by hedging approximately 5035% for 2021 and 2022 gold production, respectively, during this period of capital intensity. This action has been well understood and well received from both our equity investors and our key creditors. Two additional signs of confidence in our business plan include: one, we've attracted an additional bank to join our revolving credit facility, which allowed us to expand our revolver capacity by $50,000,000 to a total of $300,000,000 Importantly, we plan to end 2020 with no borrowings against this facility. And secondly, we are teaming with our existing capital lease providers to fund approximately $50,000,000 of equipment required for POA eleven.
The next slide provides a three year forward looking estimate of four key metrics: production, operating cash flow, CapEx and free cash flow. We have used price assumptions that are below most recent analyst consensus prices to estimate these key financial metrics. This slide is a simple road map to the significant free cash flow generation we expect in 2023, highlighted by the increased gold and silver production post the Rochester expansion. In addition, by the 2023, we expect we will have significantly extended the mine lives at all four of our operating mines on the back of the $175,000,000 of exploration investment. It is important to note, our CapEx estimates exclude any Silvertip capital for the 2021 and 2022 as we continue to work to derisk and optimize the business case for a restart decision.
As mentioned, we intend to issue an updated technical report during the 2021. We are highly confident a significant portion of the additional capital required for Silvertip can be funded via an offtake financing. Depending on the outcome of the restart decision, 2023 free cash flow for the company could be even higher. Looking at the next slide, it should give you confidence that we can comfortably pay for our high return investments while maintaining a prudent leverage ratio and ensuring we maintain sufficient liquidity. Strong and flexible balance sheet will always be a top priority.
We've demonstrated a commitment to maintain a prudent balance sheet, and we expect to head into 2021 with a net debt to EBITDA ratio well below one. As you can see on the slide, our net debt to EBITDA ratio is expected to top out at 1.4x and that we plan to maintain liquidity of at least $175,000,000 during the three year period. Both measures are well inside our stated goals. We also plan to maintain our $100,000,000 ATM program in place as a last resort liquidity stop. Before turning it back to Mitch, I want to leave you with a final perspective.
Core is in a unique position in the sector to have these needle moving, shovel ready expansions and drill ready near mine exploration targets during this high price environment. We have happy homes for our capital right now and are confident in our ability to generate great returns for our shareholders. We look forward to the day in the next couple of years where we're going to the Board to recommend our first quarterly dividend. I'll now pass it back over to Mitch for closing remarks.
Thanks, Tom. Just to quickly wrap up before we open it up for questions. I hope you've come away with a better appreciation for the caliber and alignment of our team and for each of these key messages shown here on this slide. Obviously, we've all been very busy, and the team is doing an incredible job. I hope a key takeaway for you is that Rochester is a real game changer for us and remains our top priority for all the right reasons.
It's a tremendous asset, a great project, and it has a lot of growth and value still to incorporate over time. Another big point we tried to make today is how our exploration investment is really paying off. We think it will continue to generate strong reserve and resource growth, lead to more new discoveries and further extend our mine lives. Rochester is a great example with year over year reserve increases of 65% for gold and 58% for silver, with a lot more to come over time, hopefully. We also wanted to make sure and provide you with a good update on SilverTick, which we hopefully accomplished.
The path forward there looks awfully attractive and would be additive to our future production and cash flow growth that Tom highlighted. Without question, that deposit is spectacular and well worth the effort. And with a proper flow sheet and processing plant running reliably at seventeen fifty tons a day, those grades can provide some real high margin cash flow over a potentially very long mine life. We think we're on an exciting path that can unlock a lot of value for our stockholders in a variety of ways in the near term, medium term and long term. And hopefully, today's presentation has made you feel the same way.
On behalf of the entire team, I want to thank you for participating in our twenty twenty Investor Day. Let's go ahead and turn to the Q and A. Okay. Been trying to keep up with the questions that have been submitted. Thank you for submitting them.
I'll I'll do my best here to I'll read the questions that have been submitted and either try and answer them myself or ask one of my colleagues who are now, I think, all situated in their offices to to chime in and help me answer answer the questions. Based on the number of questions that I've I've seen here, I think we'll be able to wrap this up in twenty or thirty minutes or so just for for planning purposes. So why don't we start off here? First question relates to COVID safety protocols at our different sites? Could we, if possible, quantify the cost impact?
And then on a related note, are we seeing any increases in insurance costs at our operations? I think for that one, I'll go ahead and Mick, can you answer that? And Em, feel free to chime in in terms of the protocols that we have in place at the sites and then Tom, if you could cover the insurance cost component of the question.
Yes, for sure. So for each of the sites, it's a little bit different, but we have an overall program. So we take Palmarejo for instance, which is a fly in, fly out site. It's government mandated that we have antibody tests before anybody accesses the site. So we do that in a layered system where we test people before the travel, we test people before they access the site.
And then any positives that we get, we then follow-up with a full PCR test. And that's been a very successful program. And so far we get quite a high number of antibody tests, but the reliability of that test is certainly not as robust as the PCR test. So when we get the PCR test back, then we apply quarantine requirements and contact tracing as needed if we have any positives. And so far that business continuity has been excellent.
We had the forty five day mandated shutdown earlier in the year, but since then we've managed to continue that operation successfully through the rest of the year. If we look at Kensington, for instance, there we run a protocol of PCR tests before anyone accesses the site, but we also have a quarantine period. Over time, what we've done, we've improved our quarantine management processes and testing to improve the quality and reliability of that to allow us to drive that quarantine So it started out at two weeks and then ten days, then down to seven days, and we're now at three days of quarantine requirements for Kensington before anyone accesses the site. And overall, that's been very successful as well.
There were two fly in fly out sites other than Silvertip, of course, were project where that's in Canada that's driven by the government mandate that we haven't been allowed to test on ourselves yet for that. So we have a very rigorous access protocol there, very rigorous travel protocol there. And so far that's been excellent, but haven't had any impacts at Silvertip. For Rochester, we do various tests, PCR antibody and antigen tests are coming to that site. And we do the same for Wharf where we use those three layers.
We had a very interesting feedback the other day, someone alightened us to an NFL team, which was pretty funny. But when we reflect on it, in fact, I think it's because we are a professional organization executing a very well structured and layered testing protocol and that's allowed us to have excellent business continuity. But at the end of the day, there's nothing more important than keeping our teams and our communities and their families safe. And I think what testing protocols are paying dividends there. I'll hand it over to Emily to comment on the team and any other aspects.
Emily, do you want to comment on that?
Sure. Echo really what you shared, Mick. I think you take a step back. Many companies have attacked us from different angles. And when it comes down to the costs, you really have to look at this as essentially at the end of this because it is going to end.
We feel like our dedicated employees that have had to come into work every single day, they will walk away feeling like we as a company have done everything to keep them safe. So, you know, you you heard me mention in in my segment, 16,000 tests. Mick just went through those tests, technology that we invested in, and then just, you know, the simplicity of coming together as a team to make sure we have a cohesive plan. So that's very high level. I'll turn it back to Mitch or Tom, if you want to talk about the costs specifically.
Tom, go ahead on cost impact of COVID and then also, the insurance, component of the question.
Sure. So, we think COVID costs are going to we had we've incurred about $10,000,000 through the first nine months of the year and probably another 3,000,000 to $5,000,000 here for the in the fourth quarter. So in that $15,000,000 range and $6,000,000 for next year, as Emily mentioned, we think it is going to end. As Steve questioned about the insurance market, the insurance market remains hard for a bunch of different reasons, including COVID. So I think it's fair to say we could expect to see 10% to 20% more on insurance costs.
Just to give a sense, though, I mean, our overall costs are in that $8,000,000 range. So it's not overly material, but I think, you know, as Nick has described, we're actively managing this risk pretty carefully, and I'm sure the insurers will recognize that and hopefully we'll end up in the lower end of that range.
Okay. Thanks. Thanks, Tom and Mick and Em. Tom, since you were just just talking, I'll I'll stick I'll stick with you. There was a question submitted about the three year ROIC incentive metric that we've introduced.
You've been a great advocate for that. I think it's a wonderful metric, something that's more in our control and over time is going to lead to additional value creation. But can you talk a little bit more about the three year ROIC metric?
Sure. First of all, we'll have a bunch more disclosure in our year end proxy. But essentially, what we've done is we've set three year targets for each of the mines for return on invested capital based on our tier three plan that Mick referred to earlier. And so set ourselves some targets to achieve those returns. And again, the mechanism that we use to manage that and ensure that we're going to achieve those returns are these investment committees.
And you heard, you know, the three or the two big pieces of capital that went through that were, of course, Rochester and then Hans' exploration program. And so we feel like it's the right tool to use to test. And whenever people want to ask for capital and come to the treasury, they need to prove it to us that it's going to lead to a return and it's as simple as that.
Good. Thanks, Tom. I'm trying to bucket some of these questions into categories. There's a couple here on Nevada related. Mick, I'll ask you to handle the first one here in terms of could you clarify or talk a little bit about the planned investments in infrastructure that we're making at Rochester and down at Packard, Nevada Packard and how that will serve future expansion in the areas that we're targeting with our exploration?
Yes, for sure. So it's pretty brief really. We have already existing good infrastructure, good access and roads. As we do the PWA 11 project, though, we will upgrade some of that infrastructure. So the power into the site is already running through that upgrade process and that will be robust to cover all of those future needs.
From a roads perspective, when we've completed the construction phase of the project, we'll upgrade that access road coming into the site. And then one key thing that we find generally in Nevada, but in our main site area is the comms requirements to make sure that both we have safety covered from a communications perspective, but also the opportunity to develop the operation from an automation perspective and opportunities around making the business more efficient. And so we're also upgrading the communications infrastructure coming into the site using LTE and other technologies or that modern technologies to give us good dual redundancy so that we have safe operations, but also efficient operations that we can innovate within and expand the operations in the future. And as mentioned with Nevada Packard, but also into the Limerick Canyon and covering the existing operations. So overall, we're pretty comfortable and have a solid plan for infrastructure.
Good. Thanks. Thanks, Mick. The other Nevada question that I see here is down in the southern part of the state. How do we contemplate our footprint in Southern Nevada playing out over time, including when we start Sterling.
I'll take a crack at that, Hans. If there's anything that I don't touch on, feel free to chime in. But I think that, you know, our clearly, neighborhood has gotten very active, and it's a very exciting place to be down there around Beatty. I think what we need to do first and foremost is keep drilling and determine exactly what is the extent of the Seahorse discovery and what else can we do to further expand SNA, Secret Pass and DAISY. That becomes then collectively a pretty significant amount of resource.
And I think once we can have a better understanding of just what is the magnitude here, then I think we're in a better position to engage in some discussions with our neighbors because in the spirit of capital efficiency, we don't want to see multiple processing facilities or anything like that. We want to come up with a way that we can make the pie as big as possible for everyone and result in the best economics for all involved starting with us. And so let's keep drilling. You know, in 2021, Hans is going to have a a good chunk of of capital to deploy there primarily at Crown, and and then we can have a better sense of where we go go down there. In terms of sterling further to the south, like we've always said, since we acquired Northern Empire in 2018, that's a smaller, higher grade area.
Past producer could be put back into production probably for very minimal capital. But just given the other much larger, higher impact growth projects that we have, we don't want to necessarily rush ahead and put a small gold asset with a limited life into production down there at Sterling. For now, we'll continue to drill. We've been having some good results, some new discoveries. It seems much higher grade.
There's some underground potential there. There is the existing infrastructure. So that's an interesting, albeit smaller piece of the puzzle down there. But our focus is really to the north there That was really the enthusiasm that we had when we made that acquisition.
And of course, Seahorse wasn't even considered at that time. So we're having nothing but good news coming out of the northern part, and that's where the focus and the money will really go here in the in the near term. Hans, did I cover that okay, or did anything you wanna add? You might be on mute, Hans. Okay.
I'm assuming silence means you have nothing to add. A couple of Silvertip related questions. First one relates to permitting. What would the permitting process and timeline look like for this 1,750 ton scenario? I think, just at a very high level, what we would anticipate there is is kind of two two parallel path processes, one that relates to the mine restart and then one that relates to the mine proposed expansion.
But Terry, do you want to go into a little more detail on that?
Yeah. Thanks, Mitch. And it's a good question. The two permitting fronts that you just touched on really the first is a bunch of amendments that we would need to apply for existing permit that would cover things like our new power generation facility, our new water treatment facility, the mill expansion itself. And those would be really, as you mentioned, just to restart the mine.
Then the second would be a more broad joint amendment application that would facilitate both throughput increase with a TRSF expansion. And both of those we don't believe would trigger an EA. So that's a good thing from a timing perspective. And we feel good about our permitting prospects in BC. We've been able to develop really great relationships with the First Nations groups that are our partners on the project.
And obviously having spent a lot of time cleaning up the site this year, we've been able to really develop good relationships with the ministry and been able to get very close to them in terms of our future planning progress. And Bassi, who's on the line, has been leading a lot of that effort. So hope that answers the question.
Yes. Okay. Thanks. Sticking with Silvertip, the question around what would we like to see there from a reserve tonnage or mine life perspective at Silvertip. I can I'll take a crack at that one.
The the goal is to, in that forty three one zero one later next year that I mentioned, to have a 4,000,000 ton mineable resource supporting that that business case. I think that would be a five ish, five plus year initial mine life. But I think if there's anything that we've learned from Silvertip this year through the success that we've had from drilling is if we keep drilling, we're going to keep expanding that. And so we won't stop at four. I think the potential is to have a mine life there by the time we would restart Silvertip to be much longer than that initial 4,000,000 ton objective that we have for the second half of next year.
Clearly, the mill and the expansion activity around the processing plant is one has been one clear focus this year. The other is all about mine life. Do we have enough mine life, have confidence in that mine life to support an investment there to expand and restart? And that's a lead into the other question on Silvertip around capital. What do we expect at current the capital Silvertip to look like?
At this point, we don't have anything to say on that. Still work that's going on, work to do, and we'll have more to say on that next year as finalize some of that work and some of the trade off work going on, some of the optimization work that still needs to be done there. Let's see. And there's also, just sticking on Silvertip, a question. I think, Tom, you broke up for somebody when you're talking about what capital for Silvertip is in the three year plan.
And I think I have this right. You tell me if I do or don't, but it's their Silvertip Capital for the 2021 and then nothing else, given that's going to be likely decision point in the 2021 in terms of where we go. And so there's no capital and then there's no production or impact from Silvertip beyond that point. Is that right, Tom?
Yes. Yeah. We've we did in those numbers, though, we do have we'd have ongoing care payments that are included as well as additional exploration investment is still in are in those numbers, but no no capital for the restart.
Okay. Let's see. I now have sympathy for, like, those radio call in shows that are taking questions in in real time. This is a dynamic process here. There was a question about our Metalla investment and the monetization of that.
I can answer that pretty quickly, or at least I'll try. We sold Metalla a collection of royalties a few years ago and in exchange took back a large amount of Metalla shares as consideration. And to their credit, they have done a really tremendous job of creating value and building that business to a point where the return that we are sitting on there is really terrific. And for us, monetizing that and taking those proceeds and redeploying them into some of the priorities that we've talked about today is really where our head is on our Metalla investment. It's in no way a signal of what we think about Metalla or their prospects.
It's just simply a disciplined capital allocation decision that we've made there to crystallize that gain and then take the proceeds and redeploy into other high return investments that we have in the business. Let's see here. There's a question on back to Rochester. And what milestones should we be looking for regarding the Rochester development that should provide a higher level of confidence of meeting the overall schedule? Terry, I'll start, and then you I'll pass it over to you.
The one in my mind, we start major construction activities in January. Stage six leach pad, at least that phase one, should be completed third quarter of next year, and we'll start putting overliner on that pad in the fourth quarter of next year. So I look at 2021 as kind of the Stage six milestones and then 2022 as the big milestones relating to the crusher and Meryl Crow. But Terry, do you want to provide maybe a little more color to that question?
Sure. You covered the leach pad well, Mitch. On the crushing plant, this facility really needs to be built from the ground up. So the excavation, you could probably make it out in the video. That's where we're starting in Q1 this year.
So we'll be clearing the way for all of that infrastructure and we'll be pretty clear about how that civil work is really going as we progress through the year next year. And then as Mitch mentioned, in 'twenty two, we start to get our foundations and all of the steel and mechanical infrastructure in place for that facility. And it's really the same story for the Meryl Crow plant. It's going to lag a little bit behind the crushing facility in terms of timing, but it's really about clearing that area this year, getting some civils done and then all of the structural mechanical work will follow in 2022. And I think we'll have pretty good visibility around that for everybody as we progress.
Thanks.
Thanks, Terry. Tom, I'll come to you with this one here. Relating back to Silvertip again, how important is the potential for offtake agreements in your thinking on moving forward there? Can you take that one?
Good question. I mean, to me, it will be signing a long term offtake agreement with kind of a world class external party will be just yet another external sign of confidence and give give the market as well as us that confidence that this project is going to be here for a long, long time. So I think it's really critical. That's why we're working really hard on the all the steps on the PFS to get comfortable with what the ranges of both the lead and zinc concentrates are going to look like. So more to come on that here during 'twenty one.
Good. Thanks. Let's see. Last question that I show is back to Southern Nevada and Seahorse in terms of what is the potential of Seahorse and would we consider selling that as a way to help fund Rochester CapEx. I'll take that.
And then Hans, if you want chime in, feel free. But I think, hopefully, between what Hans has said and what I've said, you you get a sense of what we think the potential is there. You know, I'd like to think that, you know, on the
back
POA 11 and good free cash flow that sliding in a development of a new long life, low cost open pit heap leach gold operation in Southern Nevada, assuming it passes our return criteria, would be a great place to deploy some of that free cash flow. I think that the prospects and it's early days, but the prospects of that evolving and merging into truly a multimillion ounce district is very real. It just takes time and some drilling, and we're going to keep doing that. And I think we don't need to be considering a sale of something that could be such a key part of our future to help fund Rochester. I think the hopefully, Tom's overview of the funding plan there gives everybody a lot of confidence that between cash on hand, cash flow from all of our other mines, cash flow from Rochester and our debt capacity gives us, you know, more than ample liquidity to fund that important project.
So hopefully, answers that question. Hans, anything you want to add on that one? And Hans is having some mic issues. Okay. Well, I guess thirty minutes, and it's almost been thirty minutes.
So I wasn't too far off. So I think that'll wrap up the Q and A, and then that'll wrap up our virtual Investor Day. A different approach, doing everything virtually, but I hope you all found it efficient and and a good use of your time. I just want to thank you again for for taking the time today and this morning to hear hear us out on on everything that's going on with the company. Obviously, we're really excited about what's going on in Rochester.
The exploration program has been super successful, and we're going to continue pressing ahead on that. The early indications of Silvertip are encouraging, and we couldn't be more excited about the next three years. And I think that outlook does a good job of reflecting that. So with that, let's go ahead and wrap up. I just want to say happy holidays to everybody.
Thanks again for your time. Look forward to keeping you all updated on all these priorities and initiatives that we covered today throughout 2021. Probably like all of you, I'm really looking forward to turning the calendar to a new year, and we'll see what the new year holds. But thanks again. Happy holidays, and appreciate your time.
Bye.