Good day, and welcome to the Hycroft Q3 results call. Today's conference is being recorded. At this time, I would like to turn the conference over to Tracey Thom. Please go ahead.
Thank you. Good morning, and thank you for joining us. Today, we will be discussing the business update and third- quarter operating results that we issued in a press release this morning, which can be found on our website. On or about November 11, 2021, we plan to file a 10-Q for the period ending September 30, 2021, which will include our financial disclosures for the third quarter. Please read the press release and listen to this call in conjunction with reviewing the Form 10-Q, which will contain additional disclosures. Also, please note that some information provided during this call may include forward-looking statements that involve risks, uncertainties, and assumptions. Even if these risks or uncertainties have been materialized or the assumptions proven correct, these results may differ materially from those expressed or implied by such forward-looking statements.
All statements other than statements of historical fact or statements that could be deemed forward-looking. A discussion of some of the risks, uncertainties, and assumptions will be set forth in more detail in our press releases and SEC filings, including in the anticipated 10-Q. We assume no obligation and do not intend to update any such forward-looking statements. I'll now turn the call over to Diane Garrett, President and CEO.
Thank you, Tracey. Appreciate that. Good morning, everyone, and thank you for participating today on our call to discuss the business and operating update for the third quarter of 2021. I'm Diane Garrett, President and CEO of Hycroft Mining. With me today are Stan Rideout, our Executive Vice President and Chief Financial Officer, and Tracey Thom, our Vice President of Corporate Communications and Investor Relations. Once I deliver my initial comments on the news release that we issued today, we will then open the call for questions. As a reminder, as Tracey just noted, that we do intend to file our third quarter financial results on Form 10-Q after the market closes tomorrow, November 11. This new management team has been in place at Hycroft for just over a year.
While all of us joined this company in anticipation of quickly ramping up production to full-scale commercial sulfide operations under the novel process, we identified and subsequently disclosed to the market a number of items that must be addressed before any application of this process could be successful or economic on a commercial basis. While we've been working diligently over the past many months, performing the necessary review of that process, conducting additional test work, which actually is ongoing and continuing, and engaging three independent consultants with expertise in the field of laboratory testing and metallurgy to review and peer review this work independently. Our team is extremely conscientious about de-risking the project up front in order to mitigate execution risk as much as possible.
A big part of that de-risking involves the ongoing variability in mineralogy work across all the domains of the Hycroft ore body, because that is absolutely critical to any mining operation and must be completed before commercial startup begins. Today, we announced the following key items. First of all, we are ceasing the mining operations at Hycroft Mine effective immediately. This is why Mike Eiselein, our General Manager, and Jack Henris, our COO, are not on this call with us today, as they are meeting with our team at site. However, we will continue processing metal inventory off the leach pads until it's no longer economic to do so. When the operation was started out back in 2019, mining of the oxides and transition ore allowed the company to pre-strip the overburden with some revenue offsets as they were working to expose commercial- scale sulfide ore.
Through our de-risking of that novel process, there are a number of findings from our work that indicate capital costs will be materially higher for that process. Operating costs will be significantly higher. We have noted that some of the ore is not amenable to this process and that some ore is likely to perform below what was previously expected. At this point, based on what we now know, the economics will be challenging for the novel process. We do know, however, that the chemistry of this process works, but that the application on a large commercial scale at Hycroft will require more work, will not be applicable to the entire deposit, and also will be higher cost.
With our change in focus from the two-stage sulfide oxidation and leach to a milling operation, we have ample time to align the remaining pre-stripping of the oxide and transition, and have that coincide with the startup of commercial- scale sulfide operations. Secondly, as we announced today, with respect to the technical studies that are currently underway and expected to be completed in the first quarter of 2022, we have run a number of pit optimizations in order to analyze the in-pit value of the ore body under various sulfide processing scenarios. Without exception, the pressure oxidation or POX process generates significantly higher relative economic value at Hycroft. Moreover, that value is highly leveraged to even modest increases in gold and silver prices. There were studies and test work in the past that also demonstrated milling was a viable option for Hycroft.
While construction began by our predecessor company, there were a number of factors that precluded the implementation of a mill, including lower gold prices and financial struggles by that predecessor company at the time. We do know that milling works at Hycroft. The Hycroft asset is truly world-class. I mean, I don't think anybody denies it is a significant mineral endowment with hundreds of millions of dollars in infrastructure that exists on the site today. The mine is permitted for both the heap leach and the milling operation and is situated in one of the very best mining jurisdictions. An asset like Hycroft deserves the thoughtful care and attention to not be driven by market expectations or commodity prices, but to be looked at through the lens of what it is.
It is in the top 5 largest primary gold projects in the world with a significant silver component, having the largest silver resource in the U.S. Our task is to unlock and deliver that value to the shareholders in the best way possible. How do we do that? From all of our analysis to date, we believe that the milling operation using the POX process is the right approach. Hycroft ore is very amenable to this process, and with the higher recoveries from POX over all the other options we've reviewed, including the novel process, we believe that this is the right path for Hycroft. It is proven, it is reliable, and it has much less risk.
While the capital that's required for the mill may be more than originally anticipated for the novel process, once you factor in the agglomeration circuit and the materials handling system, the on-off pads and solutions management systems, the expected economic return and reduced execution risk far outweigh that incremental capital requirement. Our focus going forward is solely on the POX pre-feasibility study. We also want to follow up on many of the areas that we've identified that are prospective for higher-grade ore with a targeted exploration drilling program. Many of the mines in Nevada started up as low-grade oxide heap leach operations, not unlike Hycroft did in its long history of heap leach operations. Ultimately, many of these mines have transitioned to underground mines when the feeder system to the near- surface low-grade ore was discovered through drilling.
It was postulated by many geologists that there were potential feeder systems for both gold and silver at Hycroft. However, the focus in the early 2010s and up until recently was on step-out drilling to expand the pit. It is well known that Hycroft has banded veins similar to other high-grade projects and mines in northern Nevada, and we have actually seen evidence of these banded veins as we mine through ore. In the southern part of our claims also, we found placer-style visible gold that has not been followed up on with drilling. In short, there was minimal effort and resources at Hycroft to follow up on these opportunities or to work to identify the feeders of this enormous system.
In September, we announced that we had conducted some limited exploration drilling to follow up on prospective higher-grade areas, and we encountered some noteworthy intercepts, which we disclosed to the market and can be found on our website. Of particular interest was a 52 m intercept in the Vortex Zone that returned 2.47 g per tonne gold and 25.5 g per tonne silver. This is some of the highest-grade gold intercepts we've seen at Hycroft, and it warrants additional attention. We invite you to look at our most recent presentation on our website, which details some of the target areas, that we've been reviewing and that we have identified, that we would like to follow up on with a drill program.
With respect to our stock price, in our opinion, it in no way reflects the value of this asset. By the way, many of us in management, and board are very engaged shareholders, and we're committed to realizing the value inherent in this asset. We can certainly appreciate the disappointment when we communicated that there was more work required to do at Hycroft before reaching commercial- scale sulfide operations. We also believe that the decisions to narrow our focus on the POX PFS and to cease mining to preserve our cash for the ongoing development program provide some level of comfort that this team is ready to take the right steps and is extremely capable and highly qualified in operational execution and in mitigating risk, which all translate into shareholder value.
Unrelated to Hycroft, we had two large shareholders who closed funds and were required to liquidate all holdings in those funds, which also held shares of Hycroft. For approximately four months, nearly 8 million shares of Hycroft were sold, which put significant pressure on our share price, and I think everybody's aware of that, of what we've seen over the last several months. We believe the future of Hycroft is compelling as we complete the POX PFS in the first quarter of next year and also engage in a robust exploration program designed to target these prospective higher-grade areas. This team has established a strong culture with a focus on safety and environmental compliance, and we continue to see incredible improvements in our TRIFR rate with another decrease to 0.41 at the end of September.
That's an 82% reduction over September of 2020. Very, very pleased with the focus on not only operational efficiencies and improvements, but definitely on the safety side, which is number one for us. Our cost control measures and improvements in these efficiencies will benefit the ongoing process at the leach pad and the Merrill-Crowe plant operation as we continue to leach material off the pad. We'll continue to provide periodic updates on the development of the POX PFS, and we look forward to presenting a path forward once that PFS is completed early in the new year. In closing, I am very grateful for this team and the amazing work that they've done in the past year. Going forward, I am confident that we can create a long-life mine that will benefit generations of miners.
With that, I would like to open it up to Q&A, and then I'll make some closing comments before we end the call today.
Thank you. If you would like to ask a question, please signal by pressing star one on your telephone keypad. If you are using a speakerphone, please make sure your mute function is turned off to allow your signal to reach our equipment. Again, press star one to ask a question. We'll pause for just a few moments to allow everyone an opportunity to signal for questions. I'm showing we have no questions in the queue at this time.
Okay. Thank you, operator. Well, that's amazing. We've either answered everybody's questions with our comments, 'cause we do have quite a number of people on the call today, and I wanna thank you all for joining us. If you would like to follow up, I think everybody's got our contact information that can be found on the press release. Please reach out to us, and we'd be more than happy to answer any questions you have. So, as I mentioned earlier, we are hard at work conducting all the necessary work to develop the best long-term plan for Hycroft. We really appreciate the support and patience of all of our shareholders and stakeholders as we look forward to delivering this plan that provides that value for our shareholders.
Before I say goodbye to everybody and let you get on with your day, I also wanna thank the entire team at the Hycroft Mine for their hard work, as we could not have made the significant improvements at site without their commitment and dedication to safety and operational improvement while at the same time navigating through the challenges of the novel process. I'd also like to thank Jack Henris for his guidance on the mining and Mr. David Kirsch for his leadership as Chairman of Hycroft. Thank you very much for joining us today, and, please do visit our website and reach out to us with any questions that you may have. Have a wonderful day, everybody. Thank you.
This concludes today's call. Thank you for your participation. You may now disconnect.