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spk03: And please continue to stand by. We thank you for your patience. This conference has been recorded. Our participants, please stand by.
spk02: Your conference is ready to begin. Thank you all for joining us this morning. Before I turn the call over, I need to advise that certain statements made during this call today may contain forward-looking information and actual results could differ from the conclusions or projections in that forward-looking information, which include but are not limited to statements with respect to the estimation of mineral reserves and resources, the timing and amount of estimated future production, cost of production, capital expenditures, future metal prices, and the cost and timing of the development of new projects. For a complete discussion of the risks, uncertainties, and factors which may lead to the actual financial results and performance being different from the estimates contained in the forward-looking statements, please refer to Yamana's press release issued yesterday announcing second quarter 2022 results, as well as the management discussions and analysis for the same period and other regulatory filings in Canada and the United States. I would like to remind everyone that this conference call is being recorded and will be available for replay today at 12 p.m. Eastern Time. Replay information and the presentation slides accompanying this conference call and webcast are available on Yamuna's website at Yamuna.com. I will now turn the call over to Mr. Daniel Racine, the President and CEO. Please go ahead, sir.
spk00: Well, thank you, operator. Thank you all for joining us, and welcome to our second quarter 2022 conference call and webcast. Presenting with me today is Jason LeBlanc, our Senior VP Finance and Chief Financial Officer. Peter Moroney, our Executive Chairman, will also talk about the Goldfield Agreement. The rest of the senior management team is also available for the Q&A portion of the call. Peter is in transit, returning from meetings with South African shareholders, so we hope his connection remains adequate throughout the call. The health and safety of our employees always come first. Our total recordable injury rate was 0.81 for the first six months of 2022. And I would like to thank all our employees for remaining focused and committed to our safety values. Despite our excellent track record, this is something we are always working on improving and getting better at. The company continued to implement its climate action strategy during the quarter. including work on the analysis to support the conversion of approximately 50% of Cerro Moro's electricity requirement from diesel to wind power. This will help meet the greenhouse gas emission reduction required between now and 2030 to achieve the company's 1.5-degree Celsius science-based target and also reduce operating costs. expanded mineral reserves, and extend the mine life. Work also continues to progress on other climate action objectives, including advancing the evaluation of other operational projects to reduce greenhouse gas emissions and the estimation of our Scope 3 emissions. I'm very pleased with Yamana Names, one of Canada's best 50 corporate citizens by Corporate Night magazine for the second consecutive year. The company's ranking improved to 30th overall, and we remain the top-ranked Canadian mining company on the list. We are very proud of this exceptional recognition achieved by the dedication and hard work of our all employees and business partners. Further demonstrating our deep commitment to ESG excellence, earlier this week, Yamana's ESG rating, as determined by the MSCI, was upgraded to an A from BBB. The upgrade is the result of improvement in our corporate governance rating, which reflects our effort to further improve our corporate governance and management policies and practices. Yamana has a long history of prioritizing the health and safety of its people, protecting the environment and the community where we operate, and we are committed to continuing to improve our responsible development strategy. Turning now to our second quarter highlight, we continue our track record of operation excellence and produce over 232,000 ounces of gold, exceeding our plan for the quarter. The standout results were driven by Canadian Malartic, Cerro Moro, Jacobina and El Pinyon. Notably, Jacobina achieved record quarterly gold production. Silver production of nearly 2.36 million ounces was in line with plan, as Cerro Morro delivered strong results with increased mill feed from higher-grade zones. GEO production of nearly 261,000 ounces was in line with plan despite the gold-to-silver ratio being near an all-time high and significantly above budget. With the strong year-to-date performance, Yamana is well positioned to meet its annual guidance. As you know, during the quarter, Yamana entered into arrangement agreement with Goldfield. More information will be provided by Peter later on the call. While I won't spend too much time on the numbers on this slide, given that we pre-release our operating result, I do want to take the opportunity to comment on our operational staff and the excellent result achieved to date. Turning to the individual drivers of our performance, Canadian Malartic delivered a strong second quarter, which exceeded our plan. We are also continuing to advance the development of the Underground Odyssey project, which remains on budget and on schedule. The underground ramp is now at 380-metre vertical depth below surface and 2.3 kilometres of ramp completed to date. Shaft sinking is scheduled to begin in the fourth quarter of this year, and we are expecting first production from Odyssey South during the first quarter of 2023. We continue to see huge opportunities at Odyssey in the future. Exploration work has delivered promising results at East Goldie, extending mineralization to the east, as well as the Odyssey South internal zone, which demonstrates the potential to add mineral resources. Jacobina had a record quarter driven by higher ore-ton mine with production for 2022 on track to increase the ninth month for the ninth consecutive year. Underground mine development work continues to gain access to new mining panels. All in all, and together with the higher ore-ton mine, provides additional flexibility to the development of stockpiles supporting higher throughput expected from the ongoing phased expansion. This positive trend should continue as the Phase 2 expansion throughput objective was realized in July, establishing Jacobina's sustainable production profile at 230,000 ounces per year. Cerro Morro continued to benefit from access to additional mining phases, which supported the increase in mill feed coming from higher-grade underground ore, which accounts for over 80% of the now-stabilized throughput. At Cerro Morro, we are continuing to advance in parallel the scalable plant expansion study and potential heap leach project and are evaluating options for alternative sources of power, which include a connection to the grid and wind power. Increased mill field feed coming from higher-grade underground ore and improved recoveries contributed to step change in year-over-year production. This trend is expected to continue in 2022 with additional contribution of ore from ZOE. As planned, El Pinyon delivered solid gold production, results driven by access to higher gold grade. We expect that gold production will remain stable throughout the year, but a strong second half will account for approximately 60% of the silver production due to mine sequencing. One of the key strategies to increase value at El Pinyon is to establish additional mining sectors and increase mining flexibility. With exploration success, the objective at El Pinyon is to utilize the excess plant capacity and increase production. Minera Florida delivered production in line with plan and we expect annual results to be in line with the plan. Operational efficiencies remain an area of focus at Minera Florida and we have identified several new opportunities to increase recovery at the processing plant as we continue to work towards the plant study which is expected to allow for increased throughput in 2025 when it receives its permits. Yamana continues to advance strategic initiatives across its portfolio, and we were pleased with our partner Agnico Eagle to announce positive exploration results at Odyssey and Wazamak on Wednesday. These results further support the strategic outlook and the company's effort to meaningfully extend its sustainable production platform. Notable highlights at Odyssey include East Goldie exploration and infield drilling, which continues to highlight significant expansion potential. Recent drilling has extended the East Goldie deposit to the west by approximately 225 metres. and to the east and depth by approximately 500 metres to more than 1,700 metres from the current mineral resource outline. Shallow drilling at the East Goldie extension also extended the mineralised plain an additional 900 metre up dip from previously reported drilling. With 12 surface diamond drill active on East Goldie as well as four underground drills on Odyssey South, Ongoing drilling is expected to convert a significant portion of the 2021 year-end inferred mineral resources to indicated mineral resources for 2022 year-end reporting, and as well significantly expand inferred resources envelope. These new indicated resources will provide the basis for the updated technical study in 2023 that will allow definition of mineral reserve for Odyssey underground project over the next few years starting at the end of 2022. We are very excited about the generational mine life potential at Odyssey and the project represents one important step towards realizing the board approved Yamana 1.5 plan as it will establish a large sustainable annual gold production platform between 500 and 600,000 ounces on a 100% basis with a strategic mine life well into the 2040s. Importantly, only 47% of the current mineral resources are included in the 2021 mine plan. And as our exploration success has shown, we believe this potential for significantly higher production well into the future. Equally as important, the capital expenditure to achieve this is largely offset by pre-commercial production. Assuming the current gold price, 72% of the initial expansionary capital through 2028 will effectively be offset by pre-commercial production as we move into the upper part of the ore body starting in early 2023. The exploration success continued at our WASAMAC development project. Infield drilling results continue to confirm or exceed expected grade and width, highlighting the continuity and tenor of mineralization. Exploration drilling also delivered a positive step-out drill result from Wildcat South, where drill holes provided confirmation of the new mineralized plain, which remained open at depth and along straight. Additional exploration targets on the property, including the adjacent Franca, Arnfield, and Lac-Fortune properties, provide further upside. The positive infill and exploration drilling result to date provides support for an expanded production scenario within and adjacent to the known mineral envelope. We believe there is a potential for a strategic mine life of 10 to 15 years at 200 to 250,000 ounces of gold per year compared to the life of mine average of 169,000 ounces in the feasibility study at very attractive all-in sustaining costs. These explorations result together with Jacobinos reaching the phase 2 target throughout Tootput and the Wasamak bot sample approved by our board demonstrate that we are delivering step by step on the sensible growth and value creation laid out in our Yamana 1.5 plant. Our board approved Yamana 1.5 plant has identified a path to progressively increase production to 1.5 million gold equivalent ounces via a series of projects and optimization with very modest capital requirement and low capital intensity. This responsible growth is fully aligned with our capital allocation strategy, which balances the shareholder return, balance sheet, and low capital intensity growth. This low capital growth will strengthen our already leading free cash flow generation. It's also important to note that this responsible growth is underpinned by multiple low-risk, low-capital projects that have the ability to be mixed and matched to optimize free cash flow generation. Such flexibility allows us to rearrange, adjust, defer, or move forward projects at our discretion, thus having confidence in achieving our overall growth plan, while ensuring cash flow growth and growing shareholder return. And with that, I will now pass the call over to Jason, who can go over our quarterly result in more detail.
spk01: Thank you, Daniel, and good morning, everyone. Turning to our second quarter financial performance, our continued operational strength helped revenue reach $485.6 million, up over 11% from the same period last year. Gross margin, excluding DD&A, rose nearly 17% to $292.9 million, up from $250.9 million in the year earlier period. Earnings during the quarter were $72.1 million, or $0.07 per share, compared to a loss of $43.9 million, or $0.05 last year. But on an adjusted basis, earnings were $0.09 per share versus $0.08 per share last year. We delivered strong cash flows again in the quarter, with cash flows from operating activities before net change in working capital, at $195.9 million, up nearly 17% from the same period last year, while cash flows after working capital were $187.8 million during the quarter, compared with $153.5 million last year Q2. We also generated free cash flow before dividends and debt repayments of $53 million during the quarter, or up about $2 million from last year, despite about $30 million of higher capital spending as planned, primarily from the advancement of the Odyssey project. and we ended the quarter with cash and cash equivalents of $545.1 million, inclusive of $218.3 million available for use at the MARA project. As Daniel already noted, we expect free cash flow to increase quarter over quarter, with the strongest free cash flow generation anticipated in the second half of the year, and in particular during the fourth quarter, which is expected to result in cash balances steadily increasing throughout the year. Lastly, although inflation has been a headwind to our financial results, we have successfully mitigated the impact with our strong production and productivity initiatives at our operations. In addition to our ongoing procurement efforts and provisional inventory builds from earlier this year, we are confident we'll be able to continue this trend for the balance of the year. And with that, I will hand it back to Daniel for some final remarks.
spk00: Thanks, Jason. Before completing our presentation, as we have Peter on the call, Peratt, Peter, you can give a summary of the status of the Yamana Goldfield deal.
spk06: Daniel, thank you very much. And as you can see from our second quarter results, our board of directors took a business-as-usual approach. This is a forum for, as you have adequately done, a discussion and promotion of Yamana's operational strength, financial performance, and prospects and opportunities. Our board felt that there were forums for discussion of the deal. This was a forum for discussion of the second quarter results. However, an important point is that the substance of the Goldfield-Yamana deal is Yamana and its value and its prospects. And in taking a business-as-usual approach, we are implicitly promoting the deal with further explanation of what we see as value and what Goldfield saw as that value in its diligence. As an update on the deal itself, we have begun an engagement with our and Goldfields shareholders. Some are aware that we were invited by Goldfields shareholders in South Africa to present our company to them. As mentioned earlier, I'm returning from that engagement and meetings, and it seems to us that those meetings and presentations, including also some in London and New York, have gone well both on substance and governance grounds. The value proposition and the industrial logic of the deal is in focus, and while shareholders are expressing an understanding of the deal and support, good governance principles tell us that it's critical that shareholders should want to see full detail, and that full detail is provided when we and Goldfields provide our information circulars. And for formal commitments and support, we certainly expect that that will be forthcoming once those circulars are present. Interestingly, our circular will provide context for the deal and background, which is typical. We will go into great detail on that background, not only on the deal, but more broadly. But similar to London Stock Exchange rules, Daniel, the Johannesburg Stock Exchange requires that we include evaluation on the company. And that valuation will demonstrate that the implied value in the offer is modest, and there is considerably more value in our company than what is on offer. Next steps include continued engagements with our and Goldfield shareholders, Goldfield's publication of its first half-year results in August, likely in late August, publication of information circulars in September, and shareholder votes in October. One final comment that I'll make before passing the call back to you. On operational synergies, we have been taking a responsible and almost literal view of these operational synergies and optimizations. We have identified several and are critically assessing the dollar value of these. However, they are substantial and more than support the deal terms. Some of the obvious ones are Saladas Norte, the acid in Chile that is in development by Goldfields, likely garnering more production based on a faster and better transition from development-staged operations, particularly with El Pinyon steering that transition, a possible fast-tracking of Phase IV Jacobina. Advancing a more aggressive exploration program on the Jacobina Greenstone Belt with Goldfields' generations of experience with paleoplaster deposits such as these, possible development and even optimizations of MARA, given Goldfield's experience, along with ours, in South America with development of large open-pit projects. Finally, and as we reported on Wednesday and as you mentioned earlier on the call, Daniel, Odyssey is bigger and better, and with the extension to the west and up-dip, as you mentioned, our and Goldfield's deep-shaft underground experience will look at how we can improve with the support of our partner at Canadian Malartic, fast track for a possible second shaft to the west. We will have more to say on these synergies and optimizations, likely before our information circulars, and we expect to be able to do that in time for the Denver Gold Forum in September. And with that, I'll pass it back to you, Daniel.
spk00: Thanks, Peter. This quarter further demonstrates our operational excellence that our America's focus portfolio is continuing to deliver as we progress towards the Yamana 1.5 plan in a financially prudent matter, with exploration optionality providing even greater upside. And with that, I will turn it back over to the operator for questions. Operator?
spk02: Yes, thank you. We will now take questions from the telephone lines. If you have a question and you're using a speakerphone, please lift your hands up before making your selection. If you have a question, please press star 1 on your device's keypad. You may cancel your question at any time by pressing star 2. So please press star 1 at this time if you have a question, and there will be a brief pause while participants register. We thank you for your patience. Our first question is from Anita Soni from CIBC World Markets. Please go ahead.
spk04: Hi, good morning, Peter, Daniel, and team. I just had a couple of questions. Peter, you sort of addressed it. Firstly, I was going to ask why the Wassamak update was with this release and perhaps not with the investor day that you had where you targeted the 1.5 million ounces and you kind of showed the market all of your projects on tap but didn't release this one. So was that not ready yet at the time, three months ago, and we had that investor day?
spk00: It wasn't ready, Anita. Yeah, we got the result from exploration after that. So we knew it was coming. We knew that the drill holes, we knew that we intersect the zones, but we didn't have all the information at that time.
spk04: Okay. And then the second question was with regards to shareholder engagement, and that's probably with a question for Peter on the Goldfields deal. Could you just give us a little bit more color in terms of what you're seeing with the investors that you meet with and the kinds of color and detail that you're giving them that's incremental to what you've put out there publicly?
spk06: Mostly, it is informational. There's nothing that is new other than, of course, what we publish as new information, similar to what you asked about Wasimak. But it's informational. In some respects, it shouldn't be startling to us that we feel that we are a company that should be well-known in market, but it's a big market and many people don't know the company. And so what I mean by informational is that what we're doing is we're educating the shareholders of Goldfields on what Yamana is all about. earlier that the substance of this deal is Yamana. What's being paid for it? Is there more value there? How do you recognize some of the synergies to which we've alluded? So mostly this is about engaging with these shareholders and presenting the company and giving an indication based on our experience and knowledge of the company of what the company is all about and that value proposition to which I referred. And I have to say that those meetings have gone well. certainly on some of the governance side, shareholders, principally in New York and in London, that have asked, how do we get to this point? I think that they've taken comfort on that. And on the substantive side, it certainly seemed to us, in particular based on sidebar discussions after these presentations, it seemed to us that it was a refresh, that those shareholders were becoming very comfortable with what Yamano was all about and the value proposition to which I referred.
spk04: Okay, and then just one more. In terms of, I think, when you presented a couple of weeks ago and increased the, sorry, noted that you guys were going to be, they increased the dividend and noted that the GF Goldfields will be lifting in Canada. You mentioned something about, you know, other approaches and that information will be in the circle. I didn't follow up on that call, but I was wondering if you could provide a little bit more color about sort of the approaches that you've had and if anybody's approached you since this deal was announced.
spk06: Well, we would not be in a position to be able to say anything about that, Anita. What I would say is if you see our arrangement agreement, it contemplates what is the level of engagement that we have with this company, why we're committed to this deal. It also talks about, as is typical under governance principles with boards of directors, it talks about what would be and would not be superior proposals. But I think the more important point is the first part of your question. And in that first part of your question, it really goes back to, for our board of directors in 2020, I don't know if you would agree, but our board of directors came to the conclusion that while substance and quality will always matter. We're increasingly in a world where relevance comes from size. And so we looked at it from a number of different lenses. One is how can we grow organically? And you are aware, based on our 1.5 plan and what we announced at our investor day earlier this year, how we get to that 1.5 million ounces. Danielle discussed that on this call earlier. and how that number could also be larger as a result of what's in the portfolio. But we looked at a host of other things as well. What can we buy? What are the possible transactions where it is closer to business combinations of mergers of equals? And if we were to sell ourselves, who would be the interested parties and how would those deals make sense? So it was a broader engagement than only this one. This one was the one that was the bright, shining light for our board of directors, and understandably so, because of the level of experience that Goldfields has that's comparable to ours, the fact that we are a plug-and-play with this America's portfolio by comparison to the assets that they have, the nature of the geologies of their ore bodies and their mines by comparison to ours, and where we can get some synergies as a result of a combination of the two companies. And, of course, what the result is, and the result is not just the size of the company, but also the quality. And, again, I'm repeating things that we discussed on that call a few weeks ago, but it's not just that we've become a bigger company and amongst the super elites in our industry, but it's also that we have longer mine life, better free cash flow generation, better growth, although managed growth, as Danielle, you said, this is growth that comes at very low capital costs. and with a true value proposition because our market capitalizations combined is still well below those of the companies.
spk04: Okay. Thank you very much, and congratulations on a solid quarter and keeping costs under control in this inflationary environment.
spk00: Thank you, Anita.
spk02: Thank you. Next question is from Fahad Tariq from Credit Suisse. Please go ahead.
spk08: Hi, thanks for taking my questions. First on Wasimak, and I appreciate there's a lot of information that's been provided. Can you just remind on the ASIC commentary that it's likely to be below the feasibility study average of around $830 an ounce, and that the capex for the project is unchanged at $416 million? Can you just talk about how to think about that in relation to inflationary pressures? Has that been considered, or are there production offsets? I'm just trying to understand how that's factored in.
spk00: Thanks, Safad. Good question. Look, the guys are working on a constant basis to see on the cost, and then we have identified opportunities to reduce costs on some areas, and as you mentioned, we have pressure on other areas. We're looking at... you know, improving the recoveries, improving recoveries by one or two percent make a big difference. So this is on the cost side. We think our, and if we produce more ounces, the divider is higher. So this is why we're very confident that we're going to come with a revised feasibility study at some point with the success we have in exploration to reduce the oil and sustaining costs. It will be one of the best. And then maybe I'll pass it to Johan to compliment on my answer.
spk07: Thanks for the question. I just want to say, I mean, after Daniel was saying here that to support the bulk sample, we redid the cost analysis and mining sequence and all that. And for sure, we adjust slightly the cost, but we also find some cost saving initiative that's offsetting those costs. So overall, even by increasing throughput, we don't see additional, I would say, capex investments. in the processing plant and basically the underground still about the same because it's a wider, the stoves are really wide. We have some good results with infield drilling. We find a stove slightly bigger. So that support nicely, I mean, that increase of that new plant. So for now, I mean, considering the cost, I mean, we came up to about the same capex.
spk08: Okay, great. So would it be fair to say that, you know, by 2024, when maybe the production begins, There's productivity offsets you've mentioned, but it could be the case that maybe we're in a more normal cost inflation environment, right? Is it fair to say that you could even see potentially lower capex if things normalize?
spk00: Yeah, if they normalize, yes. But this is why I said and Yoad said we're working and looking constantly how we can improve. And at the end of the day, if costs normalize and they go back down to where they were before, And that means that the capex will be similar or even lower. And like Johan mentioned too, one of the big things we're finding is the flow sheet we have for the mill that we designed at 7,500 tonnes per day. And then, you know, we're going to process 7,000 tonnes per day. We see that even that mill can process a lot more tonnes. Jacobina is a good example. There's a 6,500 tonnes per day that we're running at 85 now. So, you know, by optimizing recoveries, by optimizing the flow sheet, reducing even in some areas some costs or changing equipment, this is how we arrive that now in today's world with today's cost of equipment and everything at the same capex. So it's possible by 2024 when we get the permit and go ahead with construction, then the cost will be similar or hopefully lower.
spk08: Okay, understood. And just maybe one question for Peter, not to belabor the point on the goldfields transaction, but are you finding this at a high level? Is there a different sentiment when you talk to the Amana shareholders versus the sentiment when you talk to goldfield shareholders? And are you finding different lines of questioning from each shareholder base? Thanks.
spk06: We've only begun to – the engagement with goldfield shareholders is a new thing for us. We've only recently begun that, literally over the course of the last two days and this past week. I would say that the engagement is similar to the extent that our shareholders are looking to learn a bit more about Goldfields, those at least that do not know or did not know the company. We're finding something very similar with the Goldfields shareholders as it relates to us. Our shareholders are not as interested in the question of what is being paid for Yamana and understand that legal field shareholders are more interested in that. The implied price when the deal was launched was $6.7 billion. And so they want comfort that that amount is not reflective of total value for the company. And the flip side of that is that the way that we've managed the growth of the company is... modular, as Danielle mentioned, can be sequenced, and the capital intensity is comparatively light. In other words, it doesn't impinge on our free cash flow, and there certainly is a tendency to focus on free cash flow, and not dissimilar to our shareholders and other shareholders, the importance of free cash flow and balancing between spending money on growth projects and cash returns to investors. And one interesting point that I think might resonate with you is one of the things that was not well understood is that consensus models, your model, others, is not taking fully into account all the value that's in your model. Our internal model certainly shows a net asset value that is substantially in excess of the net asset value that's in consensus. But one of the things that was comforting is that what is The implied price, that $6.7 billion to which I referred, which is roughly, let's say, $8.50 Canadian to $9 Canadian, is actually an average of the target prices of the analyst community that covers the company. And that's something that was not understood and resonated. So in other words, what Goldfield's saying and we've now punctuated is this was essentially a normalization, a bit of an equalization-type payment to reflect what is likely to come in the next few months and quarter and no longer than the next year. But implicit in that is that there's considerably more value, and this is where we highlight that greater value. So that's the distinction I think I'd make between the Yamana shareholders and what they've focused on and what we're now seeing as the focus of the Goldfield shareholders. That's very helpful. Thank you. Thanks.
spk02: Thank you. Please press star 1 at this time if you have a question. The next question is from Ralph Profiti from Age Capital. Please go ahead.
spk05: Good morning, Humanity. Thanks for taking my questions. Daniel, if I can start with you. Just some rough estimates in the context of the strategic life of 10 to 15 years at Wassam. That gets me to around sort of a 3 million ounce deposit in terms of the reserves required to support that conceptual plan, which is about 60% higher than where we are now. Is that the right way to think about deposit size in terms of growth potential, and how long do you think it will take you to get there?
spk00: That's a good question. Ralph, you have it right. We have about 2 million ounces now on what we had, what we bought, and then when we did the But when we look at the drilling we're doing, Johan mentioned earlier that we're in-field drilling. What we have, we're finding water zones. And then sometime with better grades, we have the new discoveries. And we have what I mentioned before, we're going to start drilling on Parker, Artfield, and Black Fortune. And we can compliment. But so far, exploration is returning amazing results. We're in 2022. We have still half of the year to drill. next year and 2024. So we're pretty confident by the time we get the permit to go ahead, build a mine, put it into production, that we will reach that number quite easily. And then remember that we're in the process to ask for the permit to start the ramp. So we will develop that ramp starting next year for the next few years, get the mine ready for production when the mill will be and then we'll have the chance to drill from underground because everything stays open. It's open on all directions. It's open going deeper. It's not drilled deep, very deep, because it's drilled from surface, but it's still open on all directions, all the zones, and it's open east and west. And then we're finding new zones, so we don't think it will be a challenge to reach that. Johan?
spk07: Yeah, Ralph, maybe to add to that, I mean, we do have about 2 million ounces in our plan, and we have MI and inferred that can be transferred as well. We're talking about 400,000 to 500,000 ounces there. We also excluded some zone initially that's going to be put into production. Maybe we'll look at cut-and-fill, but different mining methods. And we also sterilized a big block around the old excavation that can be put into the plan as well. You also have to consider that based on the mining sequence that we have, we have four good years of 250,000 ounces per year with what we have. So it means that it gave up until 2030 to find those additional ounces and sustain that plan. So between now and 2030, I think we have plenty of time, I mean, to increase value to a project that we bought about no more than two years ago. So it's really promising. And we have to consider Francard and Macfortin that are close by that we're starting to explore. And we see really good news coming up on those two projects as well.
spk05: Okay, great. That's a good update. I do have a question for Peter. And Peter, I'm hoping you can help me to help us qualify the shareholder engagement as it pertains to the 75% thresholds for Goldfields, which in some circles is seen as a high hurdle rate. Is the goal, when it's all said and done, to reach a substantial portion of the shareholder base at the end of the day? Is that one of the main goals?
spk06: At this juncture, we're in the information communication stage. We have not asked any shareholders. Goldfields has not asked any of its shareholders yet. to indicate its support for the deal, and understandably, as I mentioned earlier, Ralph, shareholders would normally, from a governance point of view, want to make sure that they have checked all the boxes, and that includes looking at the disclosure in an information circular. That's very typical. And of course, related to that is the proxy advisory services, Glass Lewis and ISS, and their commentary on on one deal or another, and that would apply in this case as well. But I would say to you that my impression and our broader management impression is that the 75% hurdle has to be seen in the context of a 66 and two-thirds hurdle, which is of the shares that are represented at a meeting. So 75% is higher than 66 and two-thirds, but it's not It's more than incrementally higher, but it's not substantively higher as a hurdle. And I'd go further. I would say that if we look at the shareholder profile of Yamana and the shareholder profile of Goldfields, Goldfields has a greater concentration of shareholdings, which means that a smaller number of shareholders will be in a better position to be able to carry the vote, whereas we would have to outreach to more shareholders, in our case, to get to that lower threshold of the 66 and two-thirds. So on balance, we're not seeing the difficulty of 66 and two-thirds for us. But equally, we're not seeing the difficulty of 75% of the shares that would attend and would be represented by proxy at a meeting for them. And there are enough large shareholders, particularly those who take a longer-term view, who are going through that information-gathering stage who are learning about our company and about the value proposition and what's being created. And our impression is that ultimately those shareholders, I don't mean to be presumptuous, but ultimately those shareholders would be supportive of the deal. They take comfort in what we are saying because it underpins what Goldfields has been saying, which is that we've conducted, I'm speaking for them, but we've conducted seven months of diligence And this is what we've come up with. One more comment that I think is germane here is this requirement of a valuation. So we are required, similar to what we've done with the London Stock Exchange, we are required to provide a valuation in the proxy materials. And that valuation, I think, will give even more comfort to our shareholders and to the Goldfield shareholders that The offer price is not reflective of the true value of the company.
spk05: Yeah, much better understood. Thank you, Peter, and thank you, Daniel.
spk00: Thank you, Ralph.
spk02: Thank you. So we have no further questions at this time. So, Mr. Hassan, I will return the meeting back over to you.
spk00: Thanks, Operator. Thank you all for joining us today on our second quarter conference call and the webcast. Please take care and stay safe. Bye for now.
spk02: Thank you. Your conference has now ended. Please disconnect your lines at this time, and we thank you for your participation.
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