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spk00: star zero on your phone keypad. Please note this conference is being recorded. I will now turn the conference over to your host, Jason Reed, CEO and President of Fortitude Gold. You may begin.
spk03: Great, thank you. Good morning, everyone, and thank you for joining Fortitude Gold Corp's 2023 year-end conference call. Following my comments and associated presentation for those who joined online, we will have a brief question and answer period. Joining me on the call today for the Q&A portion will be Mr. John LaBate, our Chief Financial Officer. Let me remind everyone that certain statements made on this call are not historical facts and are considered forward-looking statements. These statements are subject to numerous risks and uncertainties, as described in our annual report on our Form 10-K and other SEC filings. which could cause our actual results to differ materially from those expressed in or implied by our comments. Forward-looking statements in the earnings release that we issued yesterday, along with the comments on this call, are made only as of today, February 28, 2024, and we undertake no obligation to publicly update any of these forward-looking statements as actual events unfold. You can find a reconciliation of non-GAAP financial measures referred to in our remarks and our Form 10-K filed with the SEC for the year ended December 31st, 2023. In 2023, and for our third consecutive year, we met our annual production outlook. Year end results included net income of 17 million or 71 cents per share, 73.1 million net sales, 37,996 gold ounces produced, 12.5 million paid to shareholders in cash dividends, 41.2 million mine gross profit, 23 million cash from operating activities, 656 all-in sustaining cash costs, and 17.2 million exploration expenditures, a 49% increase over 2022. We achieved all of this while growing our cash balance by over $3 million to a near record cash position of 48.7 million. These results demonstrate 2023 was another great year. Operationally, we estimate 51,000 recoverable gold ounces on the heap leach pad at year end 2023. We continue to mine and stack lower grade civet cat portion of the Isabella pearl deposit on the heap while we await approval to mine the remaining higher grade oxide and oxide transitional gold ore deep in the pearl zone. Over 95% of the heap leach pads side slopes have yet to be leached, as well as the pad access area on the north end of the heap where the road and conveyors access the pad. These unleached areas are targeted to be brought into the leaching cell rotation in 2024. Obviously, the rest of the pad will continue to be leached again several times via rotational leaching as part of the normal course heap leach operation. We estimate to recover these ounces on the pad by residual leaching over the next three years and as a function of a heap leach's customary declining residual recovery curves. As we look to execute on our original plan to overlap mine operations and layer production while transitioning to our second mine, we remain ready to begin development of County Line upon receipt of regulatory approvals. Our plan is to mine the ore as an aggregate operation, hauling crushed ore to our nearby processing facility at Isabella Pearl. With minimal infrastructure to be built at County Line, we are optimizing the mining sequence to include early access to the highest grade ore possible in County Line pit with a phased mining approach. We look forward to being able to add additional new gold ounces from County Line to our Isabella Pearl heap leach pads for operational longevity. A record exploration budget was deployed in 2023, which focused on County Line, Golden Mile, the Isabella Pearl Trins Scarlet North area, and East Camp Douglas. All these properties returned high-grade gold intercepts reflected in the numerous press releases issued throughout the year. In addition to County Line and Golden Mile, Scarlett is building a critical mass where we are looking at optionality to bring this area into our existing Isabella Pearl mine plan boundary to more efficiently explore it and quantify an initial resource. With continued exploration success, we see the potential of Scarlett being the next mineable resource along our Isabella Pearl trend. with high-grade surface and near-surface gold intercepts just 700 meters from our existing process facility, and the low hurdle rate of having only to justify mining and a short haul distance for processing may provide additional future ore feed optionality and longevity. Early in 2024, we announced the acquisition of two additional gold properties along the Walker Lane Mineral Belt, the Dauntless and Intrepid properties. Both fit nicely into our portfolio of now eight Nevada properties, all with surface and near-surface high-grade gold. For an update on the Pearl Deep permit, we continue to be in regular contact with the BLM, and two weeks ago we were given the strongest indication yet that the permit could drop in at any time. As soon as we are granted regulatory approval, we plan to mine the Pearl Deep and blend that high-grade OR with the lower-grade civic CAT OR currently being stacked on the pad. The BLM is the agency primarily overseeing this Pearl Deep permit modification. Over the course of this federal administration's tenure, we have witnessed firsthand what appears to be an understaffing of their BLM. And in my opinion, its hardworking employees appear overworked as some individuals are having to fill two separate job titles. While this administration readily spends billions and billions of dollars, including sending billions of dollars to other countries overseas, it unfortunately appears to be content to leave its BLM understaffed. It has been our experience that during the previous administration, the permit process was more efficient, even moving toward attempting to fast track the permitting processes. The exact opposite has been our experience thus far with this administration, which seems to be shared a shared experience with many other peer mining companies with operations in the US. While the exact timing of the BLM's permit is out of our hand, we are thinking outside the box. We have approached the Carson City BLM, as some other mining companies have done in their districts, offering to help fund additional Nevada BLM staff positions. We have received the BLM's Memorandum of Understanding in this regard. Their MOUs have been vetted by their lawyers and used in other districts like Battle Mountain and Winnemucca. MOU keeps everything in this regard at an arm's length transaction. If the Carson City BLM agrees, this could add to the local BLM team with a goal to alleviate some of their workload and permitting pressure. We are optimistic the BLM will add to their team either on our company's dime through the MOU, through additional federal funding, or ideally both. Our ability to execute our business plan is directly tied to our ability to acquire the needed permits in a timely manner. Given the most recent BLM feedback two weeks ago, I optimistically expect the Pearl Deep permit any day. Having said that, I would have thought by January or now by the end of February, it would have dropped in. And while we are seeing advancements on the county line permit recently, I had thought it too would have advanced farther and faster by now. The most recent feedback, which included a compliment on our county line plan of operations submission document, continues to provide us with the belief we will receive the permit subject to the NEPA process timing as well as we close in on the final phase of the county line permit review and approval. In addition, we also have another important permit in process with the BLM for our Golden Mile project. We plan to construct and operate an open pit heap leach operation to go the mile, where we can truck loaded carbon to our Isabella Pearl processing facility for final stripping and DORE production. Due to this feedback from the BLM two weeks ago, where we hear things are moving forward, yet we still don't have permits in hand, and with the unpredictability of permit timing, which is out of our control, we have chosen not to forecast a production outlook for 2024 until we have some of these key permits in hand. Of course, we will still be producing gold and generating cash flow, but providing an outlook without clarity on a few key permits would be unwise, especially county line, which is essential to layering our second mine production over our ongoing first mine production, which has always been contemplated as the plan to hold the production profile. In addition, we need our pearl deep permit in hand, not just hearing it's getting close, and we need to get a sense for county line construction timing before we can forecast an annual outlook. Until then, we continue to produce gold from the approximate 51,000 gold ounces on the heap leach pad at year end 2023, along with gold ounces being mined and stacked from Civic Cat portions and the Isabella Pearl deep when we get the permits. As we await key permits, looking forward into 2024, we expect to continue our investments in exploration and development activities across our exciting portfolio of 100% owned Nevada properties. With a very strong treasury and substantial capital already deployed acquiring equipment for County Line and Golden Mile, we target to develop both new mines with cash while avoiding shareholder dilution. We also remain committed to the shareholder dividend. Having planned for and accumulated a near record cash treasury, having no debt, and continued cash flow coming in from operations, we are in a very strong position from which to span the unknown permit timing bridge as we our second mine. With that, I would like to thank everyone for their time today on this conference call. And operator, if you can please open up the lines for any Q&A.
spk00: Thank you very much. We will now be conducting our question and answer session. If you would like to ask a question, please press star 1 on your phone keypad now. A confirmation tone will indicate that your line is in the question queue. You may press star 2 if you would like to remove your question from the queue. For anyone using speaker equipment, it might be necessary to pick up your handset before you press the keys. Please hold a moment or three poll for questions.
spk03: Any live questions? We do have some email questions I'll start with. The first is from Ray Lieb. What is the grade of the Civic Cat deposit and when will it exhaust? There's multiple points in this, so I'll start there. The Civic Cat is part of the Isabella Pearl deposit, but that area that you're referencing in our initial resource is about 0.5 grams. Now, having said that, That was done on a, it's in more or less a box canyon, so we were limited on where we could drill. That was what our drilling indicated. Now, since then, we've gone in and mined down Isabella and the Pearl, which those benches have given us additional areas from which to drill. We did go in and drill a couple of holes for mine planning, and we hit a three-gram pocket higher up. outside of the resource. So I'm not saying that to allude that this is going to be a three gram. I'm giving you some color in Civic Cat in that we had some limited drilling in the area to come up with a small resource for that portion of the Isabella Pearl, but we do know there's mineral outside of it. We will not know the final grade till we mine it, but at this point, around 0.5 is what I would estimate. Again, we did hit that higher grade pocket, but we'll just have to see because that was outside of the resource. That pocket will be mined and put on the heap. All right, your second part of the question is, how many benches are there currently in the IP pit? That's a function of how far the oxide and transitional oxide go down. There are tens of thousands of ounces below us. that we know this mineral continues on as it turns into strictly sulfide, which we can't process. But we also know in the bottom of the pit is oxide yet to be mined. And we, as soon as we get our permit, we'll go mine it. But what we do not know, and nor will we know until we actually mine it, is how much of the transitional ore can we bring in to production. And we obviously will have a better data set when we go in and do blast hole drilling on a three by three grid as opposed to exploratory, you know, resource drill distances, which can be 25, 50 meters. So that'll give us a better indication to assay this on a tighter grid spacing to see what we can put on the heap. And you do a battery test, including pH, et cetera. We don't know. We expect to go down at least four benches, but if that transitional ore is amicable to leaching, we'll go down more than that. Now obviously we will be tied to the depth that they allow us to go, but we're going to see. But we know there's more ounces. We're going to get them as soon as we get the permit. Okay, and then your next part is how long will it take for regulatory approval to deliver ore to the Isabella Poor leach pad from County Line. Okay, County Line is an old small historic open pit. There's two small pits. We know they left a lot of high grade in the bottom of the pit because it's three to five grams we can sample it. We've done our exploration drilling and we've identified additional ore so we're going to make the main pit larger. There's also the smaller east pit that we need to do a lot of exploration on and continue to do so. but there's mineral there as well. So as far as accessing ore, we are working to optimize the mine plan to get into the bottom of the pit right away and access some of the highest grade early on. We can obviously access the east pit, which is lower grade, but we can access some old stockpiles there. So we will be able to, I believe, hit the ground running because we're not having to do a bunch of overburden removal to get ore immediately. The biggest thing is just getting the permit. We're ready to go. We've been chomping at the bit. And, you know, as soon as we get that, we'll be putting gold ore on the heap very soon. Okay. And then this, another question by Ray Lieb. So, will you send press releases when you receive regulatory approvals for mine construction? And Isabella Pearl, yeah, obviously County Line, yes. Likely Isabella Pearl Deep, yes. So do you expect to maintain the dividend at current level? Yes, we do. I don't have a crystal ball, but like I mentioned in my remarks, we are in one of the strongest positions we've ever been in as a company to weather the unknown gap of permitting bridge. And yeah, if we can do it, we will. we're highly motivated to. Obviously, as we always state, the dividends are not a guarantee, but I think our past dividend consistency and our historic commitment with our previous company shows we're very committed to pay a dividend, and we are still here. Do you expect to maintain last year's level of drilling? That would be great if we could, but obviously, if we're not getting these permits, we are going to conserve cash, so we may dial back. We had a record exploration year in which we went into new areas, found a lot of exciting areas of mineralization that we need to go develop into a resource. You know, just because you go out and drill and you have good indication that you have a potential deposit, you have to do a lot of work and a lot more drilling to pull it into a resource. It takes time. But the most important thing is, did you find those locations from which to go create resources? And the answer, in my opinion, is absolutely yes. I think just a review of our press releases show, whether it's Golden Mile, whether it's Scarlet, East Camp Douglas, we hit great areas over at East Camp Douglas. That's what you need if you're going to ultimately develop a resource. So our goal this year is to try to add to our resource, and I think we have the areas to do it. But will we hit a record this year? Probably not, as far as drilling. And then another write-in, Craig Hooper. In the case of permits, in the case permits are continuously delayed, how much more ore is currently available in Pearl How long can you continue normal operations? Are you considering any other options? I think I've kind of addressed some of these. Obviously, going back to my comments, going pearl deep, we don't know how many ounces are in that transitional. We really are going to have to assay it with the blast holes to check the pH to make sure it can go on the pad. We might have more. We might have less. We just don't know. On balance, we would have expected to stop mining this year everywhere, assuming we get our permits at Pearl, unless we go deep and there's more transitional, but we just won't know. Having said that, we have a lot of ounces on the pad. We're going to be generating cash flow for years to come, even if we didn't put another ounce on the pad, but we are putting more ounces. And then obviously when County Line drops in, we're going to put a lot more ounces. So Yeah, you know, we're going to be here, in my opinion, a long time. We have an excellent portfolio of properties and a lot of optionality. This also brings up Scarlett. Scarlett, to me, is the dark horse here that's developing, and I don't think enough people are focused on Scarlett. I think they will be over time, but Scarlett's just 700 meters away. It has surface gold and great intercepts already. Now, we're doing the five-acre BLM dance, five-acre permitting, NOI, notice of intent. And that really restricts us on where we can drill. If we had unfettered drilling access at Scarlet, I think we could develop a resource far faster. And so, as I mentioned in my comments, we hope to pull Scarlet area into the current mine plans boundary. And once we do that, that will open up a lot more land from which to drill and And so we don't have to do the five-acre dance where we can only disturb five acres and then we drill and then we have to go rehabilitate it before we get another five acres. That takes some time, let alone the time to get the NOI permit. Whereas if we can bring it into the mine plan, we'll have unfettered access to drill a larger portion, and I believe we can really add to Scarlett. Now, given the challenges all mining companies are seeing with permitting, a pretty solid chance of being able to add to near-term production would be to pull this into the existing mine plan where we're not permitting anything but another pit. So there's a lot of positives there, but we have a lot of optionality, and I think that optionality will pay off. Okay, operator, I know there's several more write-ins, but do we have anybody on the line so we don't have them hold too long?
spk00: Yeah, we've got three questions in. The first one is coming from Mark Smith, who's a private investor. Mark, your line is live.
spk08: Hi, Jason. Good to speak to you. Of course, I've been with you. Mark, how are you? I'm good. I've been with you for quite a long while. I have kind of a hard question that I've never asked you, but I've always wondered, and that is this. We are two months into the first time ever Gold's been above $2,000 for the whole of the quarter so far. Generally then, how are the ounces that are reporting coming in generally? And that would be the first part of my question.
spk03: Okay, wait a second. You said we're currently two months into, you're talking about this year with gold price being above $2,000? Yes, correct.
spk08: And with this In the current situation the company is, I'm just wondering what your general feel is for how that gold stream is going from the pad as it is. You've got two months already, and I assume that you batch process your doorway. I was just wondering, how does it look for this current quarter?
spk03: Yeah, look, I'm hesitant to speak into an individual quarter. I've never done that. Yeah, I never asked you that. Well, no, I mean that gets a little tricky, right, where you're taking a snapshot. I will answer your question this way.
spk09: Yeah.
spk03: That it is clear that we expected to be mining that high-grade deep in the Pearl. Now, we all know until we get that permit, we can't. And so we're mining Civic Cat, which, as I just referenced, probably closer to 0.5. So we are putting less grade on. But we also have quite a, you know, 50,000 ounces. Now, it gets a little complicated in as much as when you initially leach your cell, you get a big charge out of that. But you have to go back and leach it and leach it and leach it over time, and it takes years to ultimately get that, and there's a declining recovery curve. Therein lies the difficulty of forecasting. That's why I'm not going to forecast. It's much easier to forecast when you're putting new ore on the patch. But I guess coming back to the heart of your question, we're going to experience a lower grade until we can put higher grade back on. So in that ultimately comes back to permitting. As I mentioned in my comments, the previous administration's permitting was far superior to the current administration. And let me just give you just a sense for our world. The previous administration's notice of intent to explore took two to three weeks to receive that notice of intent and to then be able to go drill. This is just drilling. Our most recent notice of intent at County Line with the current administration took three months. That should give everybody a sense of the challenges and it's hard to forecast when the previous administration would allow its BLM to push things in three weeks and this one's three months. That's just on drilling. So as I step back and I look at my peers who are everybody's waiting on permits, this is something I've mentioned on previous conference calls. This is something I actually referred to in my remarks of the Denver Goal Group where the mediator said you're not alone in permit waiting. It matters how you vote. So I'm going to just diverge here. You asked me a question I've never been asked. I'm going to make some comments I've never made before. And that is, if you are going to vote for this administration, I'm not sure why you're going to vote in any mining company. Because you're shooting yourself in the foot. It matters. It makes a difference. So, you know, we get tons of inbound calls. Why haven't you got your permits? And, you know, pretty aggressive people all upset on these permits. You know, I want to ask them, who'd you vote for? Because I have very little sympathy that you're all upset with me, yet I can't get an exploration drill NOI for three months where the previous administration was three weeks. It makes a difference. So had we been in the previous administration where we got our permits and we were able to execute our game plan, we did, and we succeeded in three years reaching our goals and targets. Now this new administration makes everything more challenging. So had we been under the previous administration, we would have gotten our pearl deep. We would have gotten our county line. None of us would be having this conversation. So that's my little soapbox, I guess. But it matters. It really does. And I guess I scratch my head going, you know, if you're not voting for if you're voting for this administration, you shouldn't be investing in resources because you're you're voting against your own interests.
spk08: Yeah, to be clear, I am not upset with you. You've proven time again your abilities, your planning capabilities, and your execution. No question about that. One other quick question. Anything on grid power?
spk03: Oh, my goodness. There's another bureaucratic issue. We should have been hooked to the grid power years ago.
spk08: Yeah.
spk03: And I think it's just another bureaucratic situation where – You know, we can only push so hard, and then we're at the whim of the regulators that decide this. So I think we'll ultimately get attached to the grid power. It would be nice to be attached to the grid power. We'd save money, but I'm no longer even guessing on timing because... It's kind of like waiting on our permits. We hear positive things, but then it never drops in. So when you hear positive things, you think, okay, well, let's plan, let's plan. But then you just hear another positive thing, but it doesn't drop in. So, yeah, when the power line drops in, great. But I am no longer focused on the power line. I mean, we obviously have everything in the queue and we're waiting on them. But it's just yet another touch point that it matters how you vote.
spk08: Once we get the permits, we'll just have to be happy with $600, $700, $800 all-in sustaining. That's it.
spk03: Yeah, you know, yeah, it is what it is. Look, we can only focus on what we can control, and we've set ourselves up for a lot of optionality to weather this. But if the current administration gets voted in again, it's going to be a very tough four more years. I'll tell you that right now.
spk08: Fair enough. Thanks, Jason.
spk03: Yep. Yep. Okay.
spk00: Thank you very much. Your next question is coming from Harvey Volan, who's a private investor. Harvey, your line is live.
spk03: Hi, Jason. Harvey, long time no speak. How are you?
spk05: Yes. Yes, indeed. I'm doing well. I have a question about the leech pad inventory entry on the balance sheet. You said in your report and also in the PR that there's 51,000 ounces on the leach pad. So I'm assuming that the leach pad inventory item, 30,533,000 relates to the 51,000. I'm curious about the formula to arrive at that 3533. Okay.
spk07: Okay, first of all, there's a lot more ounces than the 51 on the pad.
spk03: But you have to back out the recovery. So that's why we say 51,000 recoverable ounces. So I want to make that clear. But ask me your question again so I'm understanding it.
spk05: Okay. If there are 51,000 recoverable ounces, I assume that's an asset that's on the balance sheet. Okay.
spk03: Yeah, but you put it as, yeah, let me interrupt you real quick on that. You mark it at cost to mine it. You don't mark it as value as if you sold it.
spk07: Does that help?
spk05: So what is the formula for translating the number of ounces to the item that I see on the balance sheet, $30,533,000?
spk07: Yeah, I'm going to have Johnson here with me.
spk03: He's going to respond to you on this.
spk02: Yeah, Harvey, it's John. Good question. This was basically management's estimate of what would be leached of those 51,000 ounces over the next three years. And that really is the long and short of it. We have not done that type of reclassification of any inventories to non-current in the past. because the forecast production was always a very high percentage of the ounces on the pad, between 80% and 100%. Now that we're dealing with residual leaching of what's on the pad, and that constitutes the majority of what our production will be in the future, we determined it appropriate to go ahead and reclass a portion of those inventories to non-current. And Jason is correct that those inventories are carried at cost, not at market value. And our costs on the pad as of the end of the year was in the $900 plus per ounce, including non-cash costs. And just to put it in perspective, that 51,000 ounces is $100 million of sales value. So that's a lot of revenues that are going to be coming off in the next three years.
spk05: Yeah, exactly. That's why I was confused. So in addition to the leech pad inventories item, there's another inventory item on the balance sheet. What's that?
spk02: There are some stockpiles remaining, mostly low-grade stockpiles. That's another $3 million to $4 million. Got it.
spk05: Okay. Thanks. That helps.
spk02: Thank you.
spk00: Thank you very much. Okay.
spk02: Thanks, Harvey.
spk00: And your next question is coming from David Rothschild. He's also a private investor. David, your line is live.
spk04: Thank you for taking my question. First of all, I got in a little late on the call, so if you covered a couple of these things, I do apologize. In your earnings release yesterday, everything for year end, did you have the fourth quarter earnings per share versus last year's earnings per share? Everything was, you know, for a year to date on the report that I saw.
spk07: Yeah, I don't believe we broke out the fourth quarter.
spk02: Yeah, we don't report the fourth quarter, but for the fourth quarter of this year, we had earnings of about six cents per share.
spk07: Versus what last year? I don't have that right at hand.
spk04: Okay, that's fine. I don't know if you guys saw, but there was an article that was negative to you guys on seeking the alpha. Did you see that?
spk03: I'm aware of it, but yeah, go ahead. I'm always skeptical of somebody who writes under, that won't write under their own name. You know, there's plenty of people out there that'll put their name on what their opinions are, but when somebody has an animal after their name, it is what it is, as far as what they're willing to write under. But go ahead.
spk04: One of the points the guy was making was that when you do get these permits, the production on the new mines isn't going to be anywhere near on what you've been producing. And part of his gist was, well, when they start producing, it's going to be a lot lower rate and the dividend won't be sustainable. I'd like to get your comment on that.
spk03: Yeah, look, I'll speak to just what's always been the case, not somebody who anonymously writes a hit piece on us. We've all known that the Isabella Pearl is an absolutely exceptional deposit at multiple grams. All mining companies in the world would love to have what we have there. Now, most mines in Nevada chase 0.5 grams, okay? That's most mines, open pit mines, and they continue to do so. County line, which is our next one, is one gram. So it is an exceptional deposit above the norm as well. Is it as good as Isabella? No, and we've all known that from day one. But is it great? Absolutely. One gram gold open pit deposit is awesome. So we're going to generate a lot of cash flow off of that. We have one of the tightest capital structures as a producer in the space. Our dividend right now costs us $12 million a year. There's a really solid chance we hold that dividend. We are motivated. This company was spun out and created to pay dividends. So, sure, people, whether it's somebody who wants to do it anonymously and not have the guts to put their own name on their mud they want to spew, or people like yourself, David, that will call in and use their real name, which I respect, sure, everybody has their own opinion on it. But, look, as long as permits drop in, We have demonstrated we can execute on our game plan and our business plan, and I believe we will continue to do so. I will say this, that that same individual that won't use their own name, that hides behind that, has hit us with several other hit pieces that he or she was dramatically wrong on. So, again, be careful what you read, whether it's pro or con. You know, do your own research and... Yeah, that's my comment on that.
spk04: Okay. I always appreciate you guys have always been approachable by your investors. Have you guys or the board considered these prices of going in and buying back some stock at all?
spk03: Hang on a second. John had something to say.
spk02: David, you had asked about the comparable fourth quarter in 2022, and that was $0.16 a share. And again, that was based on a considerably higher sales volume. in 2022 in the fourth quarter than we recognize this year.
spk04: Okay.
spk03: Okay, thanks, John. Okay, your question, David, was will we consider buying back shares?
spk04: Yeah, have you considered buying back a few shares just to, you know, retire them?
spk03: It's possible. It's possible. We'll just see. That's a double, you know, everybody has their own take on that. And what I mean by that is at a previous company, we bought back shares, and I couldn't believe the amount of people that came back and said, you should never do that. You should just pay us more dividends. So, I mean, you can never make everybody happy. We never try. We're going to do what we think is best for the business and its longevity. But it does, David, get very attractive looking at the potential to buy more shares and retire them. I did make the mistake previously when we bought back shares, I didn't retire them. So then they floated and I had to mark the market those shares. And so if we bought them back, I would never do that again. I would buy them back and retire them immediately. But is it possible? Yeah.
spk04: Okay. I prefer the dividends, but I mean, obviously these are 10% yield is a good yield for gold mining stock. I guess the final question is, are there other nearby operating mines that that you guys could look at acquiring, or have you considered that, that are already operating that maybe could buy off and be into production right away with?
spk03: Yeah, there's not in our Walker Lane area. There used to be a couple that are no longer around. There's one nearby that they're trying to get up and running, but that particular property, I won't mention it by name and throw it under the bus, but it's broken everybody's pick who's ever tried to touch it, and we're not going to touch it. because I think it'd break our pick too. So that's not an option for us. You know, we're just going to keep our nose to the grindstone. We have an excellent property portfolio. We have excellent optionality. And our exploration program last year really paid off. I mean, to find Scarlet North, you know, all the mineral we're hitting up at East Camp Douglas, you know, we're looking at how soon can we put a resource on probably two areas up there. So You know, things take time. This industry takes time. But, you know, that great expiration year we had really set us in a good position, in my opinion, to add to resources and longevity. Okay.
spk04: Well, thanks for taking my question, Jason.
spk03: Hey, you're welcome, David. Okay. I'm going to go back to a couple of the written questions. Okay. That was already answered. All right, this is from James Hyman. Why not release your projections for 2024 based on not receiving any more permits in the BLM? Then if and when permits are issued, issue an update with good news. Here's why, James, and that's a good question. And I'm going to use my world view example of what we just experienced. We just nailed our production for the year. We came in mid-range. And everybody's impression is that we missed. We somehow missed our production. That's all I hear. Well, you were less. You were less. No, we were not less. We weren't even on the low end. And yet, the immediate knee-jerk reaction is that you guys missed your production. We 100% did not miss our production. So when the worldview of investors, when you put out an outlook and you actually hit the mid-range that they miss, when we're going in looking at permits that we need to then add county line, add production and forecast, can you imagine if we forecasted? There's a high probability we would miss. And, you know, even if we made it, we're going to get accused of missing like the case that just was. I mean, we had a great year. 2023 was an awesome year. Hitting mid-range production should be, it is a positive, but yet shareholders see it as a negative. So with that, of course, we're not going to do an outlook. We're going to continue to make money. We're going to continue to pay the dividend. We're going to continue to explore while we wait. Now, at some point, In that point, if this administration gets in another four years, we may not see another permit. I don't know. But, you know, this administration, the first day in office, he stopped for 90 days plus all permits, all resource permits, whether it was trees, cutting down trees, whether it was coal, whether it was oil and gas or mining. That was a shot across the bow. They're unfriendly, and they've done nothing but prove it since. So... I'm not going to give a forecast. We're not. So I understand that you say, well, why won't you just do that and update it? No. You know, we hit our production goals and still take a lot of pushback. But thanks for the question. Okay. Are there any more live questions? There's a lot of write-in ones, but we're getting long on time here.
spk00: Sure. We've got one other question come in. If you'd like me to put that forward for you. Yeah. It's from John Bear, who is with Ascend Wealth Advisors. John, your line is live.
spk06: Thank you. And thank you, Jason, for squeezing me in here. Yeah, John, how are you? I'm doing fine. Given, okay, so we know that you have these issues with the permitting. I'm going to assume that that goes along. It happens, whether it happens next week or next month. My question is, you've had very encouraging exploration results at East Camp Douglas, and as you know from previous conversations that we've had, that has always been, in my mind, a tremendous potential asset and could be really a game changer. So the question really boils down to, you're going to have to focus on bringing Golden Mile and County Line into production, hoping that you get the permits for that. How much further exploration work do you think you feel that you need to do based on the geological modeling that you are developing as you get your drill results? How much longer or much more exploration work do you think you need to be able to develop or come out with a good resource estimate that would then trigger, you know, further activity in evaluating a mine plan and pursuing, unfortunately, permits again. Could you address that?
spk03: For East Camp. No, absolutely, John. It's a great question. Look, East Camp is our home run potential. And, you know, for that exploration year of 2023, we knocked that out of the park. I mean, what results? We just hit the result recently that was an ounce. Yeah, it's a fantastic shot. What's awesome is the widths of high grade. So, John, it's a great question because it also speaks to our unique positioning in this mining space. If we were the normal... mining company, we would take five, 10 years probably to be able to move forward with that. Or if we didn't have facilities that were close by with this hub and spoke approach. So you wouldn't have the ability to say what I'm going to say in my answer. And that is, we, like I mentioned at Scarlett, only have to justify trucking and hauling ore to hit the hurdle rate for scarlet to become something. The same holds true for East camp. If we're looking at this as what's the minimum number of ounces we need to justify a production decision, because it would be great at that high of a grade where, and it obviously depends on what the ultimate, you know, or the initial resource or the second resource or whatever, whatever threshold that takes. But it would be great to haul that down the road to our processing facility. Because then you're not permitting another heap leach. You're not permitting another process. You're not permitting another ADR. You're leveraging what we already permitted, again, under the previous administration. So hopefully, with each camp, we're already running some metallurgical tests. We're looking at this going, can it be heap leached? If we can check all these boxes, the hurdle rate to make a development decision is much lower than if we just came in here from scratch, we didn't have nearby facilities, and we looked at this and go, okay, wow, that hurdle rate needs to justify tens and tens of millions of dollars of processing plants, of permit timing, of all these things. So I think we're in a really unique position, this hub and spoke, worked well for us in Mexico. It's working well here. It lowers that hurdle rate. It gives us better optionality. It gives us an opportunity like Scarlet where all we're going to be looking at is what's the minimum amount we need to mine a truck. Same thing at East Camp. I can't give you how many ounces that would be because I don't know yet, but that's the direction we're going, John, and that is putting ourselves in the position to move quicker than most anybody could in the industry that doesn't have the same hub and spoke approach. So, you know, we're doing a similar thing, we're trying to do a similar thing at Golden Mile. Having said that, at Golden Mile it's a little bit different because we do, it's far enough away, we do, in the metal research, we do have to take that to a carbon, we're gonna take it to a carbon and truck the carbon. So we'll just have to see. But, good question, and that's how we're looking at the world, is what's the minimum amount
spk06: Right, and what I was really kind of driving at is, I mean, I would consider 2024 as really a focus on trying to get County Line, Golden Mile, you know, up and running, again, assuming and hoping a fairly quick resolution on the permitting and focusing your efforts on that, as well as doing, you know, some exploratory drilling elsewhere. But... you know, would you consider it likely or is it reasonable to think that perhaps within a couple year, two year, three year time frame, given what you've seen thus far, and the, you know, if your geologic modeling does tend to play out with additional exploration activity at East Camp, that that could become an operational mine, say, in two to three years, three years, let's say. Is that a
spk03: Um, possibly, but probably, possibly, but probably not under this administration permitting. So, um, yeah, I mean, I can't imagine. Yeah.
spk06: Yeah. We have no control over that at this point. And I, and I'm, and I'm in agreement with you on the, on the, on the holdup on, on all that kind of stuff. So we'll, we'll leave it at that.
spk03: We're not the only mining company. Yeah. We are not the only mining company waiting. I'm not going to use their name, but they're a larger mining company in Nevada, and they've been waiting a substantial amount of time for a modification to their existing operation. Again, that shouldn't be taking place, but it is what it is.
spk06: Right. One last quick comment, and that is simply previous online call-in. I would prefer, I know a lot of shareholders would love to have higher dividends and all that, but From my standpoint, I would rather see you get these mines online rather than buying shares back. I just think if you're looking longer term on it, getting these mines in production and developing some of the very exciting properties that you appear to have, that to me is where you ought to focus your cash efforts. That's all I'll say on that.
spk03: No, I appreciate that. Yeah, John, everybody has their own opinion on that, right?
spk06: I like the dividend. Yeah. No, I like the dividend.
spk03: That's fine. Hey, John, I do too. Yeah, I do too. Everybody has their own opinion. I have a couple shareholders email me on a regular basis. When are you going to buy back? Hey, this company buys back and all this, and yet I have others saying don't buy back. I love all the feedback, but ultimately we are going to do what we believe is best for the company. And we're not going to please everybody, but by the same token, it's always how we've operated and we'll continue to operate this way. But I appreciate your feedback on that.
spk06: Yeah, if you had four minds on production, that'd be a different story perhaps. But if you had four minds on production, the share price probably wouldn't be where it's at right now.
spk03: Yeah, I was going to say, four minds on production would be different, right? Well, very good.
spk06: We'll keep on going. Thank you. Appreciate you taking my call.
spk03: Thanks, John. I know there's a lot of other questions coming in, and just reach out to us. I'm going to get to one last written-in question, but there's a lot more after that, so I apologize if I didn't get to your question, but this conference call is going pretty long. You can reach out to us directly. Doug Hultgren asks, can you clarify if this is a personal Trump endorsement or a corporate endorsement? It's neither. It's neither, Don. It's all I'm saying is what are we, what have we experienced? And what we experienced under previous administration, forget about the name behind that. What we experienced is that past administration was actually trying to fast track permits. We got NOIs in two to three weeks. Fast forward. What is this administration? Forget about names associated with it. What are we experiencing with this one? We experienced First day in office, shot across all resource-producing bow, saying you get no permits. We sat on our hands waiting on permits for just drill permits. That was now fast forward, and there's not a lot of transparency on when permits are going to drop in. There's not a lot of push. All we see is under the current administration, again, forget about names. It's not about that. I'm not endorsing anybody. I'm not bashing on anybody. I'm looking at what this... shareholders need to hear as it relates to us trying to acquire our permits and when it takes three months to get an expiration permit something's wrong and that's what i'm saying and so maybe maybe i'm reading it wrong as far as who's doing it but the net effect is under this one that's what's happening so again i want to be clear i am not personally endorsing i'm not we're not corporate endorsing i'm giving you the facts on what we see as it relates to permitting. So, Don, hopefully that answers your question. Okay, well, again, thank you, everybody, for the questions. There's a lot more, but we're getting long on time. And feel free to reach out to Greg or myself, and we'll go from there. And also, be prepared to answer the question when you call and ask us one, who'd you vote for? Because it makes a difference. All right, thanks, everybody. We'll talk to you later.
spk00: Thank you very much. This does conclude today's conference. You may now disconnect your phone lines and have a wonderful day. Thank you for your participation.
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