SSR Mining Inc.

Hello, everyone, and welcome to SSR Mining's second quarter 2022 conference call. This call is being recorded. At this time, for opening remarks and introductions, I would like to turn the call over to Alex Huncheck from SSR Mining. Please go ahead.

Thank you, Operator, and hello, everyone. Thank you for joining SSR Mining's second quarter 2022 conference call, during which we'll provide an update on our business and a review of our financial performance. Our second quarter 2022 consolidated financial statements have been presented in accordance with U.S. GAAP. These financial statements have been filed on EDGAR, CDAR, the ASX, and are also available on our website. To accompany our call, there is an online webcast, and you will find the information to access the webcast in our news release relating to this call. Please note that all figures discussed during the call are in U.S. dollars unless otherwise indicated. Today's discussion will include forward-looking statements, so please read the disclosures in the relevant documents. Joining us on the call today are Rod Antle, President and CEO, Alison White, CFO, and Stu Beckman, COO. Now I will turn the call over to Rod for his opening remarks.

Thanks, Alex, and hello to you all, and thanks for joining us. I'd like to start by providing a brief summary of our positive first half results. The first half of 2022 demonstrated the continued resilience of our business in the face of supply chain constraints and inflationary pressures. as our consolidated production and cost metrics track well against our year-to-date targets. Our four operating assets produce 333,000 ounces of gold at an only sustaining cost of $11.77 per ounce, with solid margins and attributable net income of $126 million. Our financial strength drove us to continue our peer-leading capital return program. During the quarter, we announced a buyback program that enables us to repurchase up to 10.6 million shares. This together with our 40% dividend increase earlier this year resulted in year-to-date returns of nearly $100 million to shareholders, or equivalent to a 2.8% yield and growing. Despite the positive performance in the first half of the year and numerous strategic milestones, we are continuing to face increased cost pressures across the portfolio, especially in fuel, electricity, reagents and labour costs. While we have been successful in bucking the cost inflation trend over the past 18 months, we are seeing costs now outpace our mitigation efforts. As a result, we are reaffirming our production guidance, albeit at the bottom end of the guidance range, and we are revising our cost guidance higher for the year to reflect these macroeconomic pressures and the temporary suspension of CHIRPLA which we'll discuss during the presentation. So let's move on to slide four. And on this next slide I want to highlight our core values in relation to our ESG initiatives. The ESG is and has long been a core value and focus for the company as it underpins the success of our business. We released our fourth annual sustainability report in April which highlighted a number of achievements during 2021 and some of the new initiatives for the company During 2021, amongst other things, we progressed our efforts to establish a science-based action plan to support our commitment on net zero greenhouse gas emissions by 2050. In 2022, we'll continue to roll out our Integrated Safety Management System with full implementation expected this year. Furthermore, we'll complete third-party closure reviews across all our operating assets to ensure a positive post-mining future for our stakeholders and are also developing a water stewardship strategy, as we see, to continue to reduce our environmental footprint going forward. On to the next slide, which is number five. As we continue through 22, it is worth highlighting our impressive track record of execution. While the suspension of Sherpa has impacted our full-year projections, we're advancing opportunities to ensure the business exceeds the low end of production guidance. Looking towards the future, the key message is that we have established a baseline production platform where we see clear opportunity to deliver plus 700,000 ounces of gold production annually through 2030. The solid foundation coupled with the abundant growth targets being progressed across the portfolio means that this is just the baseline for the company to continue to build from. Moving on to slide six. On top of our track record of operational delivery, we've also established a proven history of discipline and accretive M&A, as well as project development. This includes the acquisition of Tiger Gold, which closed in the second quarter and expands our exploration platform in Saskatchewan. We also closed the sale of Pitoria in July And our non-core asset sale has now generated $245 million in proceeds over the last four quarters, more than two times the street consensus value ascribed to those assets. Given our track record of strong operations and project execution, as well as a robust balance sheet, we continue to thoughtfully evaluate strategic opportunities across the sector and will remain disciplined with respect to any future transactions. Over the last 18 months we have ensured our strong free cash flow generation is reflected in our capital returns program. To that effect we returned $191 million to shareholders in 2021, an effective 5% capital returns yield. Earlier this year we increased our base dividend by 40% which by itself is yielding 1.8% annually. Subsequently to the second quarter we announced a share buyback That permits the repurchase of 10.6 million shares and over the year-to-date period we've already returned nearly $70 million through that program. Combined with the two quarterly dividend payments year-to-date, our capital returns are already $100 million or a 2.8% yield. Overall, a combination of our strong operating results, the creative and strategic M&A initiatives of peer-leading capital return programs has driven significant outperformance for our shareholders, a trend we expect to continue with a multitude of catalysts over the coming six to 12 months. So on to the next slide to discuss the quarter. Just a few of the key points to consider relevant for the quarter. First half production of 333,000 ounces of gold at all interstating costs of $11.77 per ounce was in line with our internal budgets and guidance. However, on June 21st we had an incident at Chirple Heapleach resulting in a suspension of operations pending the completion of improvement initiatives. We have now completed these initiatives pending verification and inspection work by the regulators. After inspection and verification we will move towards the required approvals to restart the operations which is anticipated during the third quarter of 2022. will remain closely aligned with the regulators and will provide further updates as required. So with that, I'm going to turn the call over to Alison, who's going to discuss the financial performance in updated 2022 outlook on slide number nine.

Thanks, Russ. Good evening and afternoon, everyone. This quarter, we produced over 159,000 gold equivalent ounces and over 333,000 gold equivalent ounces in the first half of the year. in line with our expectations for a back half-weighted production profile. As mentioned earlier, we revised our guidance for all-in sustaining costs to $1,230 to $1,290 per gold equivalent ounce and are targeting the lower end of our existing production guidance range. We are aggressively pursuing continuous improvement and cost management initiatives aiming to mitigate inflationary pressures where possible while also diligently working to ensure higher costs do not remain a permanent feature of the business moving forward. Gold equivalent sales of 167,000 ounces in the quarter drove revenue of $320 million. Attributable net income for the quarter was 58 million or 27 cents per diluted share and adjusted attributable net income was 67 million or 30 cents per diluted share. Second quarter operating cash flow was $33 million and first half operating cash flow was $95 million. First half free cash flow of $19 million was impacted by the timing of tax and royalty payments, capital expenditures, and working capital outlays as previously guided. Looking to the back half of the year, we expect a strong Q4 to influence free cash flow distribution with 80 to 90% of the forecasted second half free cash flow expected during Q4. On the right side of slide nine, I'd like to provide some commentary on our reported 30 cents in diluted earnings per share that is calculated based on the company's definition of adjusted attributable net income per share. Attributable net income of 27 cents per share was adjusted for foreign currency fluctuations during the quarter as the Argentinian peso and Turkish lira devalued against the U.S. dollar, along with minor adjustments for tax impacts and adjustments for the mark-to-market of our marketable security portfolio. Let's move on to slide 10 as we discuss the outlook for the remainder of the year. As you've now seen and heard from Rod, we have increased our 2022 cost guidance as a result of the Chirpler temporary suspension and the persistent and pervasive inflationary pressures across the business that I had also talked about in the first quarter call. While our production guidance remains unchanged, we expect to finish the year at the lower end of this range, again reflecting the temporary suspension at Scherpler. Our all-in sustaining cost guidance range is now $1,230 to $1,290 per ounce, And the largest drivers of our increased cost guidance include lower silver prices for the conversion of gold equivalent ounces, as well as lower production volumes and higher diesel, electricity, and reagent prices at all of our locations. We continue to focus on business improvement and cost savings initiatives that help limit the duration and impact some of these cost pressures. While some items, like higher wages, will remain with the business in coming years, we remain confident in our ability to deliver on our operating track record while incorporating cost improvement. Moving now to the second quarter results in more detail, on slide 11, we'll talk about SSR's financial position. At the end of the quarter, the company maintained a cash and cash equivalent balance of nearly 940 million, while net cash is nearly 640 million. With that strong cash position in mind, I would like to reiterate our priorities with respect to capital allocation within the business. First and foremost, we will continue to reinvest in growth, including our exceptionally high-return Artich and C2 projects, which will account for approximately $300 million in total growth capital through 2025. Next, we are committed to maintaining a robust balance sheet to weather volatility in the commodity price environment and ensure all of our capital commitments, debt servicing requirements, and base dividend payments are fully funded even in the event of a potential downturn in gold price. Third, we remain committed to capital returns as evidenced by the recent share repurchases totaling nearly $70 million during the year, an impressive total given the announcement of the 2022 buyback program was just over a month ago. This renewed buyback program further strengthens our capital returns, coupled with a 40% dividend increase announced earlier this year. Between the year-to-date buyback activities and an annualized dividend of $60 million, or 28 cents per share, this results in a minimum capital return of approximately 3.7% for the year. Most importantly, we continue to be disciplined in our approach, while ensuring our returns appropriately reflect our company's strong free cash flow generation. And with that I'll turn it over to Stu for an operational update.

Thank you Alison and as always I'll start with EHS&S. We saw an improvement in our injury rate in the quarter but it remains above where we want it to be and as always an area of considerable effort and focus. We were disappointed by the incident which caused the suspension at Sherpa and are working to review and reinforce our underlying systems and practices across the business. I'll talk a little more on Sherpa later. Safety and the care for our teams, communities and the environment are core values and we believe are also foundational to business performance. Moving on to slide 13 and we'll talk about Sherpa. As I noted on the Q1 call we completed our first scheduled major autoclave shutdown with re-bricking of the face courses of autoclave number 2 in early Q2. This is impressive performance from the autoclaves given we started them back in 2018. The planned maintenance shutdown took about 3 weeks to complete which along with lower mine grades resulted in a slightly softer and higher cost quarter. We delivered production of over 51,000 ounces at an all-in sustaining cost of $1,253 an ounce. We also continue to ramp up the flotation plant in the quarter. Overall performance is good, though we are still presenting more carbonate to the autoclose than we had hoped, meaning we are using more acid and lime. We are working to improve this carbonate split, including a collaboration with one of the Turkish universities. Obviously the restart of operations is an overhang for the business but I'm pleased to report that all of the improvement initiatives required by the Turkey Administrative Environment have been completed and we are awaiting verification and approval by the relevant authorities. Today we had a visit from the local directorate to inspect finalised work. Improved process control of the pump feeding the heap leach and improvements to the berms and runoff was completed. under the oversight of regulatory officials. The team has learned a lot from the incident and we remain in close contact with the regulators and are aiming to restart the operations at Cherfla within the quarter. On a more positive note, during the temporary suspension we have been able to bring forward much of the three-week maintenance of autoclave 1 that was previously planned for the fourth quarter, enabling a stronger close to the year once the Cherfla returns to full operations. With respect to our growth initiatives, we progress that the Chukmak Tepe Extension, or ARDECH, remains on track to deliver first production in 2023. We're also progressing the C2 project through PFS in 2022 and expect to release these results of this more optimised project to the market in 2023. We are excited by the potential of both of these high return, low capital cost projects. Moving on to slide 14 and we can talk about Merigold. Merigold delivered quarter-over-quarter improvement, though production timing continues to be impacted by the stacking of fine material from the north pits. Production of almost 46,000 ounces at an all-in sustaining cost of $1,558 an ounce was largely in line with expectations of back half-weighted production profile. Towards the end of the second quarter we began stacking higher grade material and we expect a significantly stronger production in half two, especially in the fourth quarter. We stacked 71,000 ounces in Q2 and of that 30,000 ounces just in June as a result of the higher grades. Permitting continued to advance at Valmy and we expect to receive the EA for the expanded Valmy pit in 2024. We advance work for the Marygold District Master Plan and expect to release this report to the market in 2023. We move to slide 15. Seavey had another fantastic quarter producing over 38,000 ounces at an all-in sustaining cost of $628 an ounce. Following the record first quarter, the mine produced a record first half production of of nearly 91,000 ounces at $611 an ounce. We are advancing exploration of the extension to the very high-grade zone that drove the first half out performance. The good news is that we think that we have more, but we don't expect that we'll be able to mine this area until 2023. However, we have accelerated development to access another high-grade area of the Santoy and accordingly we've increased the 2022 production guidance to 150,000 to 160,000 ounces, a phenomenal outcome for the asset and the team. I'll touch on the exploration work that continued in the quarter in a few moments, but would highlight the progress of the CB district master plan that we also expect to release in the first half of 2023, which John can start to present himself soon. There were some really exciting targets for future development that we're accelerating an attempt to include in this and the subsequent master plan documents. We've been drilling our Porky West target, which is showing promises potential open pit option for Seabee. If successful, this could provide a foundation to reframe the development pathway for Seabee. Please move to slide 16. Puna bounced back from a soft first quarter with production of nearly 2 million ounces of silver at an all in sustaining cost of $1,515.23 an ounce. Production is expected to increase in the back half of the year with better grades while costs continue to be impacted by high inflation in Argentina. Lastly before we turn it over for questions I want to jump to slide 17 and highlight some of the exploration initiatives that we progressed during the quarter. We progressed exploration programs across the business in the second quarter and are preparing to release the results of some of these efforts in the second half of this year. At Arditch, resource development and expansion drilling continues as we eye additional growth to the ore body that could further complement the production profile outlined in the CDMP21 earlier this year. Also in Turkey we have restarted drilling at the Copper Hill project which is our pure copper prospect in the Black Sea region. In Saskatchewan the team progressed definition drilling at the Shane Target which is just off the haul road between the mine and the processing plant. As I noted we are also very excited about Porky West and Main Target to the north west of the CB plant. where recent drilling and reinterpretation of existing resource modelling indicates the potential for an open pit target which could operate simultaneously with the underground operation in the future. Such an additional tonnage allows us to reimagine the operation such as the process plan expansion or upgrade and the potential for an all season road to the operation. In Nevada, exploration progressed both near mine and more regionally. Drilling is currently underway at Trenton Canyon and Buffalo Valley and near-pit drilling at New Millennium is showing encouraging results. We've now increased the rig count for exploration to six, illustrating the significant number of targets and the excitement for the asset. Some portion of the New Millennium drilling should be included in our annual resource update later this year. Lastly, at Puna we started drilling for the first time since 2018. The exploration team has identified a number of in-pit and near-mine targets that, if successful, could provide mine life extension opportunities. We plan to release exploration updates for Chirpela, which of course includes Arditch, Copper Hill, Seabig, Marigold and Puna by the end of the year. And we'll look to incorporate as much as possible of the extensions, the exploration success into the new technical reports at Cherfla CV and Merigold in 2023. Thank you very much and back to you Rod.

Great, thanks Stuart and thanks Alison. Certainly as an industry we're facing significant external challenges in 2022 for which we remain vigilant and proactive to mitigate the impacts. We remain on track to deliver our full year production guidance and have a number of potentially positive catalysts ahead from the asset base. We look forward to the restart of operations at Sherpa and we'll keep the market updated with any further developments regarding the required approvals. Finally, I do want to welcome John Ebert to the executive team and Stuart's continued contribution to the business while we go through this planned transition of the senior leadership. So with that, Ariel, I'm going to hand it over to you for Q&A.

Thank you. We will now begin the question and answer session. To join the question queue, you may press star, then 1 on your telephone keypad. You will hear a tone acknowledging your request. If you are using a speakerphone, please pick up your handset before pressing any keys. To withdraw your question, please press star, then 2. We will pause for a moment as callers join the queue. Our first question comes from Cosmos Chu of CIBC. Please go ahead.

Thanks, Rod, Alison, Stu, and team for the presentation. Maybe my first questions are around Chirpler. To confirm or to clarify, Stu or Rod, it sounds like, you know, the inspector has now been on site. And is it Hazy or is she? And are you now just awaiting the receipt of the regulatory approvals?

So today, we finished the work over the weekend, and today we had the local inspector come out. There's a series of approvals that have to happen, and we'll also receive visits from the ANCRA inspectorate as well, and there's a bit of a process that we'll go through.

Gotcha. And after you've received all your approvals, Could you maybe outline or kind of give us a bit more detail in terms of how long it would take to get the autoclave and everything else sort of restarted again?

All up, it'll take us about four days to restart the autoclave from a cold start. Great.

And then in terms of the planned maintenance, a bit of a silver lining, I guess, that you were able to push forward some of the schedule maintenance from the second half into, you know, the shutdown period. So to confirm, I guess, you know, previously you had scheduled about three weeks in terms of a planned shutdown in the second half. So those three weeks will no longer be necessary and that will help you in terms of making up for lost time when we talk about second half production. Is that correct?

Yeah, so we've done all the mechanical work on the autoclave, and we'll be able to push it out into next year to do the phase courses on the brakes.

And then on that too, as you said, you're re-braking the one autoclave next year. How long is that going to take in 2023? Are we talking about one week, a week and a half, or is it going to take the full three weeks?

It'll be the critical particles, so it'll be about two or three weeks.

Okay.

We don't do the whole autoclave, just part of it.

Okay, you open it up and see if everything's sort of okay and then go from there, I guess.

Yeah, there are certain regions that get more wear than others, and those are the ones that we've been redoing the phase course of. It was the same in the other autoclave.

Great. And then maybe switching gears a little bit on CV here. You know, good to see that I think you've brought up the guidance for the year, as you talked about, production guidance. You kind of mentioned that on the call in your prepared remarks as well. But, you know, the increase, is that you know, based on the fact that you've outperformed in Q1 and Q2, or is there some element to it whereby, you know, you're also depending on, you know, some kind of outperformance in the second half as well to hit those, the updated guidance, production guidance for CB?

Yeah, we've pulled forward a little bit of high rate, but it's within the reserves, so it's just part of the minor rescheduling.

I wouldn't say it's high risk.

Of course. And then one last question just to wrap things up. As you mentioned, you've had to up your cost guidance for the year a bit. I know you've kind of talked about that in your prepared remarks, but could you maybe talk about what had been factored in in terms of inflation in the previous guidance, what, you know, is now that you're factoring in? I want to ask, you know, given that, as we talked about, the composition for guidance is now a bit different. Tripler guidance has come down in terms of production. CB, you know, production has increased. So far, CB, Santoy, you know, the cost is a bit lower. So I would imagine that helped in terms of offsetting some of the inflationary pressure, but indeed inflation has still caused your guidance to go up. So did you put in quite a bit of conservatism into your cost guidance? Maybe just some comments on that.

So Cosmos, I'll take that one.

Hi Allison. Hi.

Good to hear from you today. So we did not put an additional factor into the inflation. We've seen a steady run rate through the course of the year where inflation has certainly outpaced what we had initially budgeted. And so we set our remainder of the year and our cost guidance based on what we've already seen come through this year. And to elaborate a little bit further as well, number of ounces that are increasing at CBR driving down some of the costs there. But overall, we're certainly seeing a track record of inflation increasing the cost base across the organization.

Great. Thanks again, Allison, Stu, and Rod, of course. And those are all the questions I have.

Thanks, Roz.

Our next question comes from Michael Ciperco of RBC Capital Markets. Please go ahead.

Thanks very much for taking my questions. And if I can try to push a little bit more on Chopler. Is there a schedule and planned visits in place? Should we be thinking days, weeks, or is it possible that the operation could be offline through the end of September, just depending on the government's schedule.

Yeah, look, Michael, I think we outlined it well in all the written documents as well as our opening remarks, and Stuart has elaborated a bit more in terms of just more physical activities on site here in the sort of last 72 hours. At this stage, we're built into our planning a start-up in quarter three, And based on what we know today, that's our best estimate.

Okay, copy. And then maybe following up as well on the previous question about cost and maybe cost beyond 22, can you elaborate on how you're seeing trends across your business? Are you seeing costs starting to stabilize? Are you seeing some stabilize, others decrease? continuing to trend higher? Any kind of visibility into what you're seeing?

Hey, Michael. We are definitely starting to see a little bit of, I would say, the peak on fuel, but we are not necessarily looking into, sorry, so we're definitely just past the peak on fuel. And as we look to the future, we are definitely seeing that there will be some sticky costs that we're experiencing now that will continue into next year. But with the rapid pace that we've seen the rate of inflation change over the past few months, we aren't necessarily positive of what that exact rate is going to be going forward, but we do expect that we will have some going into early next year.

Okay, great. And then, In terms of mitigation and future mitigation, are you considering changes to your plans with respect to stockpiling, hedging, supply chains? I imagine you're looking at these things on an ongoing basis, but have you come to any conclusions about changing strategies going forward?

Michael, I think we're about to undertake our normal planning cycle as a business. We always look to improve our cost base either through supply chain opportunities. It could be continuous improvement, operational effectiveness, initiatives that we have. That's just normal cost for us. So we will build those into our planning cycle. But as Alison sort of mentioned, some of those costs sort of have definitely outpaced our the work that we'd already anticipated for 2022. So, you know, we'll wrap all that up in this next few months, and that will tell us, you know, where we net out.

Okay, and maybe last one, just back to Chopler and the Ardish startup next year. Should be improving costs. Can you expand a little bit about how you see costs at Schoeppler trending going forward with the addition of Arditch in 2023?

I think the best guide to what our expectations with Arditch was is the CDMP21 that we issued the technical report earlier in the year.

Okay. Okay. Great. Thanks very much. Appreciate the responses.

Thanks, Barbara.

Our next question comes from Oves Habib of Scotiabank. Please go ahead.

Hi, Lauren. Just a couple of questions from me. Maybe some of the questions I had regarding short-term restart as well as cost inflation, I guess, have been answered. So just, you know, maybe a follow-up on Arledge. Are there any permits or anything pending regarding any regulatory requirements to advance Arditch to production in 2023?

Yes, and the permits have always been the critical part for Arditch for us. So from a technical perspective, it's relatively easy. So far, all of the permits have been... and the progress towards those, because as with all mining projects, there's multiple permits required, have been moving in line a little bit faster than our schedule. So we're still on track for what we thought when we issued the technical report.

Perfect. And just then, moving on to the exploration front, I mean, you mentioned, obviously, there's a lot of programs all across Are you looking to come out with some exploration updates and then kind of resource updates and then kind of moving into these mine plans or these moss plans that you're looking to come out with in early 2022? Maybe if you can give a little bit of a color of that.

Yeah. So we'll issue exploration updates later this year for the projects and where we will, if provide details of the holes and the intercepts that we've received with those. We will then build those depending on how quickly it arrives, what drill density, which deposit it's in, whether it's part of an existing resource or a new resource. Some of those will be incorporated in our normal updates and then we build as much as we can into when we do the next technical reports. As has happened, for example, with Arditch over the years, we're continuing to explore Arditch. We'll get as many holes into this next iteration as we can, and we'll continue to drill that prospect going forward.

Okay, perfect. That's it for me. Again, thanks for taking my questions.

Thanks, Matt.

Our next question comes from Lawson Winder of Bank of America Securities. Please go ahead.

Hi, good evening, Rod, Allison, and Stu. Nice to hear from you both. Thanks for the update. Could I maybe ask about Chirpler one more time? I was curious, why not finish the maintenance at Chirpler now instead of pushing into 2023? So I'm referring to the relining of the second autoclave. Is that a function of your expectation that the restart could come kind of any moment?

Or is there something else? It has to do with we scheduled it for November and the bricks are just arriving. So we don't have enough bricks to do all the work. They are arriving over the next week. And if we're not up and running, at that time we will do some work. If not, we'll carry it across to next year.

Okay, excellent. And then just in light of the cost inflation, have you given any thought to potentially increasing the reserve gold price assumption for marigold and perhaps other assets?

We'll do that as normal costs when we come to do the technical reports and the reserves and reserve calculations later in the year.

Okay, do you guys normally do those? As we normally would do. You guys normally do that in November, is that right?

Yeah, we do it at the end of the year. Look, I don't think we haven't anticipated anything to answer your question at this stage, Lawson. We'll review it. We do the normal sort of market review and consensus pricing anyway. So it won't be driven arbitrarily by us just to raise the reserve price. I think that's your question. It will be just part of our normal course reserve reviews.

Okay. That's clear. And then maybe just a bit of a broader question. You mentioned M&A, and definitely valuations are quite historically low. Maybe could you just update us on your thinking in terms of geography, target metal mix, and development stage?

Look, I mean, nothing's really changed in terms of – where we are and the types of opportunities that we would consider appropriate for SSR. I think the previous discussions that we've been very open about with the market about the jurisdictional mix, the rationale, the strategic drivers haven't changed in the current environment. But we're obviously going to be very cautious, like I've mentioned, in terms of anything that we look at or anything that comes in across the desk to ensure it sort of fits. We haven't changed any of the drivers. The market hasn't driven us to pick up speed or to slow down. Again, we do this as a matter of course. and are always sort of assessing different opportunities and permutations to ensure we don't miss something. But to this day, that's it.

Okay, sure. Great. Thank you for your comment today.

Good on you. Thank you.

Our next question comes from Levi Spry of UBS Australia. Please go ahead.

Hi guys, thanks for the call. Maybe just an exploration question. I might have missed it, but is there an exploration update due? This Porky caught my ear. How important is that? Can you take us through what you found there?

So Porky had been drilled previously. There has been, I guess when we've been exploring around the area, a real focus on looking at underground and our senior geologist had a look at it and had a thesis that perhaps would work as an open pit and we've been exploring that. So we've had some relatively wider but lower grade intercepts relatively close to surface seems that it has a reasonable extent. So we're pretty excited about it. We will daylight the data that we've got when we do a release before the end of this year.

Okay, thanks, Stu. So that's on all of the exploration, is it? I didn't notice much in today's.

Yeah, we're going to do them for each of the sites. So Chirpela, which will include Arditch and some other drilling that we've done within Chirpela. A number of the targets, that's Seabee, Merigold, which has the Buffalo Valley, Trenton Canyon and the work around the new millennium. I don't think we'll get anything in from Arpuna because we've literally just started poking holes in the ground there now.

Roger. Okay. Thank you. Thanks very much.

Our next question comes from Mike Parkin of National Bank. Please go ahead.

Hey guys, I may have missed this, but for CB, the talk about potentially back into high grades, higher than normal, is that kind of in the same area that you pulled the high grade pocket out of earlier this year that drove the really good Q1?

Yeah, so that high grade pocket hoping to get back into it straight away. It looks like it pinches out directly below where we are now but then opens up a level or so down and we're pretty excited about what it looks like below that. However, this year, so my expectation is that we'll get that in 2023. But we need to work out what we've actually got first. And the other area that we're going to is another area that's in reserve. We've jiggled the mine plan a bit to get us back there.

Is it kind of the same thing where just some infill work kind of highlights a little sweet spot in the mine plan?

The one that we're going to that we've got planned in this sits within the reserve. That's very high-grade pockets. It's outside the resource and reserve, and we're chasing it down.

Can you remind me, maybe this is better for that exploration update, but as you move south into the fissure property, I recall that the vein structure is prevalent at surface, discovered through a forest fire or something like that. Are you allocating to the south versus up near the hanging wall area? Do you have a lot of rigs evenly distributed or do you still see load hanging through more to the north and putting more of your focus there?

No, we've been drilling both areas. Obviously, the work that we've got in exploration within the mine is about pulling things in that are closer. and then the quantum of work we do, so most of the work close to convert to make sure that we can feed the plant, the medium term targets, you get a bit more work and then we're still testing these other areas. We're still pretty excited about fissure and we think that there's a good probability we're going to get something out of that. Immediately to the south of The thing that we find at Santo is that it seems to develop great and volume at depth. It gets better at depth. We've decided not to advance JOKER into resource development yet until we get some deeper holes and test the hypothesis that it will probably develop at depth.

Okay. Just with respect to the Turkey region, there's obviously a pretty Going through Europe, can you comment on any impact of regional forest fires? Are you guys kind of far away from anything that's active right now?

Look, there's been no impact for us, Mike, in and around the mine. So that's good news.

All right, excellent. Looking forward to that exploration update, guys. Thanks very much.

Good on you. Thank you.

This concludes the question and answer session. I'd like to turn the conference back over to Mr. Antle.

Great. Well, thanks, everyone. Thanks for joining us and look forward to next quarter and continue updates around Sherpa. Until then, goodbye.

This concludes our conference call. Please feel free to disconnect.