Wesdome Gold Mines Ltd.

Good morning and welcome to West Dome Goldmine's third quarter financial results conference call. I will now hand the call over to Heather Lacson to begin today's call.

Great. Thanks, operator. Good morning, everyone. As we get underway here, we'd just like to remind everyone that during this call, we'll discuss our business outlook and make forward-looking statements. These comments are based on our predictions and expectations as of today. Actual events or results could cause outcomes to differ materially due to a number of risks and uncertainties, including those mentioned in our detailed cautionary note contained in yesterday's press release and in the company's management discussion and analysis dated November 10, 2021. Both documents are available on our website and on CDAR. Please note that all figures discussed on this call are in Canadian dollars unless otherwise stated. The slides used for this presentation and a recording of this call are will be posted on the company's website. And now it's over to Lindsay Dunlop, Vice President of Investor Relations. Thanks, Heather.

Speaking on the call today will be Duncan Middlemiss, President and CEO. Good morning. Scott Gilbert, CFO.

Good morning.

Marc-Andre Pelletier, COO. Good morning. Mike Michaud, Vice President of Exploration. Good morning. And also on the call is Raj Gill, VP Corporate Development. Good morning. We will begin today with an operational review from Marc-André, followed by a financial review from Scott. Then we will proceed with an exploration update from Mike, and finally Duncan will conclude with a summary and outlook. Marc, please go ahead.

Thanks, Nancy. The Eagle River mine performed very well during the quarter, producing over 23,000 ounces at 13.4 grams per ton, despite some significant downtime for annual mill maintenance. and the installation of the new cone crusher. Here to date, the Eagle River Complex has produced 76,773 ounces, and we are very confident in hitting the mid to high point of the 92 to 105,000 ounces guidance range. We are very excited to begin the production from the Falcon 7 zone on 635-meter level. It provides a new high-grade mining horizon near 20 grams per ton and creates more flexibility in the mining plan for the future. Michi production came from the surface ore stockpile and will continue in the first half of 2022 until the depletion of the stockpile. At Kena, the production restart is going well with initial production from the mine's original structure, the lower-grade S50 zone, yielding 5,511 ounces. We started mining the first stop in the A zone in early Q4 and grade is reconciling with expectations. We expect to achieve yearly production guidance at Kena of 15 to 25,000 ounces. We will continue to ramp up production rates in 2022, achieving full commercial production rates in Q2 2022. Several construction works are ongoing at the mine, such as improvement work at the tailing management area, construction of a new base plant, and the installation of a new water treatment facility. We are very happy with the progress we have made so far on those particular projects. Now over to Scott for a financial review.

Thanks, Mark. At Eagle River, the year-to-date cash cost of $983 per ounce and AISC of $1406 per ounce Canadian are within our guidance ranges. The AISC at Kena of $1891 per ounce Canadian results from the low production levels as the mine is ramping up production. Due to a change in IFRS standards, all pre-commercial revenue and costs will be included in the income statement. Once commercial production is declared, AISC is expected to be in line with the costs in the PFS. West Dome generated $35.3 million in cash margin in Q3 2021, which includes $34.2 million from Eagle River. Despite the high cash costs at Kena, it also contributed $1.1 million of cash margin. Company-wide adjusted net income was $18.2 million, $0.13 per share. Free cash outflow was $9.1 million as we spent $41.1 million on capital, which included $27.5 million for the Kena restart. The bulk of the Kena CapEx spending will be finished in H1 2022. We ended the quarter with a cash balance of $69.5 million and are well positioned to fund all CAPEX programs and exploration activities at both Eagle River and Kena. The Kena Restart has been fully funded internally. Now over to you, Mike.

Thanks, Scott. At Eagle River, sill development is continuing at the Falcon Zone and to date has confirmed the high-grade nature of this zone and the continuity defined by the exploration drilling. In September, we released the initial set of SIL results, including 62-meter level that yielded 54 grams per ton over an average thickness of 2.1 meters over a strike length of 75 meters. This development will bring another high-grade mining front at a reserve grade of over 20 grams per ton, and production has already begun in Q4. The Falcon 7 zone confirms the potential of the surrounding volcanic rocks to host sizable deposits of urbanization. As such, the company is continuing to develop and explore the neighboring 311 west zone. To this end, we started the development on 355 meter level exploration drift located along the western margin of the mine to better explore the extension of the 311 zone and also the Falcon zones closer to surface. Also, surface drilling is ongoing with two drills, both east and west of the mine, to follow up on anomalous values returned from regional drilling program in 2020. At Kena, drilling continued to focus on the A zone and recently discovered footwall zone. Drilling has been slower than usual as a result of the industry-wide shortage of skilled drillers. However, we have since implemented measures in order to improve drilling performance going forward. The footwall zone is interpreted as several lenses of gold mineralization located within the 50-meter-wide corridor adjacent to the footwall of the A2 zone. The footwall zone runs parallel to the A zone and extends at least 300 meters and remains open laterally and down plunge. Recent drilling returned 20 grams over 9 meters of core length. Additionally, the recent drilling inside and outside of the current A-zone resource block model shows the potential to expand the current resource estimate, one hole returning 132 grams per tonne gold over 7 point metres of core length. As part of our efforts to increase exploration, we have also moved the diamond drill on to 33 major level on the east side of the Kena mine. This is to better explore a number of historic showings that remain underexplored. We are also pleased with initial surface exploration that returned over 1,500 grams per tonne over half a metre from the Presqu'ile zone. We have now extended the existing mineral resource in this area to a depth of over 300 metres from surface, and is now located only 400 metres away from existing mine infrastructure. The drilling in the Schake area discovered a new zone called Bourgogne, which is perpendicular to the general northwest-southeast trend. It consists of quartz veins with a similar north trend in orientation of the nearby Kina Deep A zones. Any near-mine resource has the potential to add additional mill feed. Over to you, Duncan.

Great. Thanks, Mike.

This is a very exciting time in the company's evolution from junior to intermediate gold producer. At Eagle River, we have our sights set on increasing our underground high-grade production in order to reach the mill capacity in the short term. So far this year, we have realized an average underground production rate of 650 tons per day of 13 plus gram material. In 2022, this will ramp up to just above 700 tons per day. The Falcon Zone, discovered just a few years ago outside the mine diorite, now has its first soap in production, where the reserve grade is almost 20 grams per ton. This area is not bottlenecked with production restrictions, and with additional Falcon soaps coming online throughout 2022, This will enhance our ability to gradually increase our annual mining rates. Beginning next year, with all production in Walla coming from the high-grade underground mine, we can expect production of over 100,000 ounces per year. With our construction and development progress at Kena, we can see a pathway to an additional 100,000 ounces plus per year. The execution of the plan laid out in our Kena pre-feasibility study is going well, And we view this technical report as a base case, with the football discovery not yet a part of the production scenario. I believe the de-risking the company with an additional high-grade underground gold mine in the Tier 1 jurisdiction is a remarkable event on our path to becoming Canada's next mid-tier gold producer. We have just now mined our first stope in the A Zone with very good results with regards to dilution control. The plan is to continue mining the A Zone with another four high-grade stoves to come prior to year-end. Our ramp-up with manpower and equipment is going well, and especially in a challenging and competitive environment. As stated earlier, we fully expect our unit cost to reduce at Kena, as we assume the production profile laid out in our PFS published in June of 2021. As a reminder, projected costs from the Kena PFS are cash cost per ounce of $471 per ounce Canadian and all in sustaining costs of $838 per ounce, not including expiration. I also want to personally thank our friend and colleague, Marc-Andre Pelletier, who was elected to depart Rustome for a CEO role. Marc joined the company in February of 2017 and has done a great job in optimizing Eagle River, to 100,000 ounces of annual production, and overseeing the exploration, development, technical studies, and now start-up at Kena amongst all of the additional duties he carried out over the past five years. I have personally worked with Mark off and on for nearly 13 years, and I can honestly say each day was a joy, as I always knew our operations were in capable hands. Bonne chance, mon ami.

I will now open the call up for questions.

Thank you. And if you would like to ask a question, please press star 1 on your telephone keypad. Again, to ask a question, please press star 1. And our first question is from Don DeMarco of National Bank Finance. Your line is open.

Thank you, Operator, and good morning, team. First off, I'd like to congratulate Mark on his new role It's, you know, you've done a great job at restarting the Kena mill, increasing production at Eagle, and I wish you continued success. My question then is, when we look at your cost guidance for the year, and I think it's 980 to 1090, should we think of that as inclusive of the Kena pre-commercial production, or should we just wait until the, or should we exclude it and wait until Kena's into commercial production? before wrapping it into our cost averages.

Yeah, absolutely. Hey, Don, it's Duncan. No, absolutely, that is Eagle River ounces only. We were, you know, just the guidance we gave for Kena after it became sort of firmer with the PFS program during the year was 15,000 to 25,000 ounces. We feel very confident on that.

We did not provide cost guidance. I mean, this whole... Yeah. My favorite accounting standard is not IAS 16. I'll just let you know that. I mean, the fact that we, you know, no longer credit pre-production with revenue from those ounces and have to disclose what that would be on an all-in-sustaining cost is kind of misleading because obviously we're not really at a... I mean, we only sold 3,000 ounces also of quinoa.

So actually what was remarkable is we still made money on them, so... Yeah.

Yeah. Actually, it's not bad. I mean, that's actually not a bad AISC for your first quarter of production, and it was a low volume of ounces. So, yeah, we'll look forward to Q4 and Q1 and so on.

Yeah. Stressing pre-commercial, too. We have not declared commercial production. We really feel we're going to do that in the second quarter of 2022, Don, when the Pace Hill plant gets commissioned and we have sort of, I'd say, a steadier state in terms of production.

Okay. Okay. So for 2021 at Eagle, you're sort of approaching the top end of your production guidance. Next year, we can look forward to a higher throughput, 700 tons per day plus. Are there any indications what kind of throughput we might expect out of Kena for the first year?

Yeah, it's very much like the PFS.

High down, it's going to be between 450 to 500 tons per day, so very close, maybe slightly higher than the PFS.

Okay, good to hear. And so we're looking at the capex bend on Kena, and now that you're into first production and so on, should we throttle back our capex bend in Q4? Sure. Do you think you're through most of the CapEx budget in the Kena restart?

No, I don't think so, no. We'll still have good capital outlay, I'd say, in Q1 and Q2.

Of course, you know, proudly say we're organically funded. I mean, we've got $69 million in the bank and a line of credit, which I don't believe we'll ever touch. So that's fine.

Right, right. And the cash balance is actually up quarter over quarter. Okay, great. That's all for me. Thanks, guys. Great.

Thank you. And our next question is from Ralph Profetti of Aid Capital. Your line is open.

Okay, great. Thanks, operator. Good morning, Duncan, and best wishes and luck to Marc-Andre in the future. Duncan, I want to ask you about this 311 West, and I've been taking a look at it, and I'm just wondering how should we be thinking about it? You know, is this part of the story where we can start to connect the 7-Zone and the Falcon Zone? Or are we testing targets into the volcanics? And how far west are we going to be testing targets?

Spike here. The 311 parallels the 7-zone in the diorite, and then the Falcon 7-zone, of course, we know now that it joins with the old 7-zone in the mine. So right now, we've been having some pretty good success extending the 311 zone through the diorite into the volcanics, and we're testing this. We think it's going to be parallel to the the Falcon 7 zone as well. So this is why we're putting in that 355-meter level development in. First, it's going to be so we can drill off this new 311, what we call Falcon 311 zone right now, and also the 7 zone, and then we can use that development for mining later. But what I like about it is because now if we have two zones in the volcanics in that area that are up or higher elevations in the mine, that really debodels things at the bottom part of the mind. Also, that development, which is going to go about 500 meters west of the diorite, puts us out into the volcanic so we can drill more targets from there. And certainly, you know, we see the 8-zone extending out there, we see the 5-zone extending out there, and we've had some pretty good hits out there with the surface drilling already. We still have a lot more drilling to do, but I think that area looks really good to us, so we're going to definitely spend a lot of effort out there this year.

Okay, great. Yes, that's exactly what I was looking for. Okay, and should we, second question, should we expect the footwall zone in the year-end resource update? And would it be most correct to assume that you'll probably only be able to get 300 meters of down plunge extent into that estimate?

Yeah, that's, you know, this, we certainly, our goal is to get that. all of that 300 meters of full wall zone into a resource. I would say just because of the, you know, the slower drilling that's been done there, A, because, you know, we've had a shortage of some drillers, which we're kind of fixing that problem now. But it's also because it's steep and it's at a bad angle, you know, these long holes has slowed down the number of drill intersections as well. We certainly are planning to put in a new exploration drift into the footwall so we'll be able to drill it off and drill off its extension next year. But for the end of this year, we're going to certainly try to get all those ounces in, albeit inferred. We may not get them all, but certainly that's our goal. I mean, we like the zone. You know, we keep drilling into it and hitting gold there. So, you know, we're pretty happy to see how big it's going to get and then how we can then incorporate it into the mine plan. But, you know, a lot of that, you know, sort of the confident grades and tons there probably won't come until maybe next year after we've got, you know, the new waste development in the hanging wall so we can drill it off properly.

Yeah, that's excellent. Okay, thanks all.

Yeah, I think one of the issues we have here is because the ramp, you know, as it extends down deeper, we're going to get better and better drill platforms. And so really... Just alluding to what Mike said, I mean, it's definitely sort of a down dip drilling at a non-ideal angle.

You definitely want to get a lot more perpendicular to the zone to truly understand its characteristics. So I think that that footwell drift will go a long way to help us with that.

Thank you. And our next question is from Ryan Walker of Echelon Partners. Your line is open.

Hi, guys. Just back to the drilling. So, you know, you had fairly aggressive or very aggressive programs planned for both mines. Where would you say you are in the grand scheme of things relative to the initial goals? And then I guess what's in the hopper, essentially, for results? You have to come out there in the lab, and we've heard from, you know, everyone and their uncle that lab delays are pretty extensive right now.

Yeah, we're certainly... We've done well with surface drilling, I would say, over the last few months, both at Eagle and Kena. That's why we're able to extend Presque Isle and that new Borgo zone, so we're happy about that. Underground at Eagle, the drilling's coming back online. I would say that the aggressive plan we had for expiration this year, when the drilling meter started to fall short because of COVID and COVID, and whatnot, we kind of pulled in our horns and said let's get our, let's replace our ounces first that we're going to mine out this year. So we kind of cut back a little bit on the underground exploration that eagle. Certainly on the Kena side, it's been a bit of a challenge. We've certainly made some changes and, you know, we're going to continue to drill off that footwall zone there.

Okay, great. And then just in terms of is there stuff in the lab now that you know, we'll see over the next several weeks in the interim?

Yeah, we've had some results back from the Kenan football zone, so we might be making a release on that later, maybe before Christmas. Certainly we have some hits, too, at Eagle that we want to probably get out there within the next few weeks here as well. But, yeah, we do have some results coming, and I think with the slow part we went through in the summer with the drilling problems, I think that that's getting corrected now, so we'll have more steady news flow as we go forward here.

Great. Thanks. That's it for me. Great. Thanks, Ryan.

Thank you. And there are no further questions at this time. This concludes today's conference call. Thank you for participating. You may now disconnect.

Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. you Thank you. Thank you. Bye. Thank you.

Good morning and welcome to West Dome Goldmine's third quarter financial results conference call. I will now hand the call over to Heather Lacson to begin today's call.

Great. Thanks, operator. Good morning, everyone. As we get underway here, we'd just like to remind everyone that during this call, we'll discuss our business outlook and make forward-looking statements. These comments are based on our predictions and expectations as of today. Actual events or results could cause outcomes to differ materially due to a number of risks and uncertainties, including those mentioned in our detailed cautionary note contained in yesterday's press release and in the company's management discussion and analysis dated November 10, 2021. Both documents are available on our website and on CDAR. Please note that all figures discussed on this call are in Canadian dollars unless otherwise stated. The slides used for this presentation and a recording of this call are will be posted on the company's website. And now it's over to Lindsay Dunlop, Vice President of Investor Relations. Thanks, Heather.

Speaking on the call today will be Duncan Middlemiss, President and CEO.

Good morning.

Scott Gilbert, CFO.

Good morning.

Marc-Andre Pelletier, COO. Good morning. Mike Michaud, Vice President of Exploration. Good morning. And also on the call is Raj Gill, VP Corporate Development. Good morning. We will begin today with an operational review from Marc Andre, followed by a financial review from Scott. Then we will proceed with an exploration update from Mike, and finally Duncan will conclude with a summary and outlook. Marc, please go ahead.

Thanks, Nancy. The Eagle River mine performed very well during the quarter, producing over 23,000 ounces at 13.4 grams per ton, despite some significant downtime for annual mill maintenance. and the installation of the new cone crusher. Year to date, the Eagle River complex has produced 76,773 ounces, and we are very confident in hitting the mid to high point of the 92 to 105,000 ounces guidance range. We are very excited to begin the production from the Falcon 7 zone on 635-meter level. It provides a new high-grade mining horizon near 20 grams per ton and creates more flexibility in the mining plan for the future. Michi production came from the surface ore stockpile and will continue in the first half of 2022 until the depletion of the stockpile. At Kena, the production restart is going well with initial production from the mine's original structure, the lower-grade S50 zone, yielding 5,511 ounces. We started mining the first stop in the A zone in early Q4 and grade is reconciling with expectations. We expect to achieve yearly production guidance at Kena of 15 to 25,000 ounces. We will continue to ramp up production rates in 2022, achieving full commercial production rates in Q2 2022. Several construction works are ongoing at the mine, such as improvement work at the tailing management area, construction of a new base plant, and the installation of a new water treatment facility. We are very happy with the progress we have made so far on those particular projects. Now over to Scott for a financial review.

Thanks, Mark. At Eagle River, the year-to-date cash cost of $983 per ounce and AISC of $1406 per ounce Canadian are within our guidance ranges. The AISC at Kena of $1891 per ounce Canadian results from the low production levels as the mine is ramping up production. Due to a change in IFRS standards, all pre-commercial revenue and costs will be included in the income statement. Once commercial production is declared, AISC is expected to be in line with the costs in the PFS. West Elm generated $35.3 million in cash margin in Q3 2021, which includes $34.2 million from Eagle River. Despite the high cash costs at Kena, it also contributed $1.1 million of cash margin. Company-wide adjusted net income was $18.2 million, $0.13 per share. Free cash outflow was $9.1 million as we spent $41.1 million on capital, which included $27.5 million for the Kena restart. The bulk of the Kena CapEx spending will be finished in H1 2022. We ended the quarter with a cash balance of of $69.5 million and are well positioned to fund all CAPEX programs and exploration activities at both Eagle River and Kena. The Kena Restart has been fully funded internally. Now over to you, Mike.

Thanks, Scott. At Eagle River, sill development is continuing at the Falcon Zone and to date has confirmed the high-grade nature of this zone and the continuity defined by the exploration drilling. In September, we released the initial set of SIL results, including 62-meter level that yielded 54 grams per ton over an average thickness of 2.1 meters over a strike length of 75 meters. This development will bring another high-grade mining front at a reserve grade of over 20 grams per ton, and production has already begun in Q4. The Falcon 7 zone confirms the potential of the surrounding volcanic rocks to host sizable deposits of urbanization. As such, the company is continuing to develop and explore the neighboring 311 west zone. To this end, we started the development on 355-meter level exploration drift located along the western margin of the mine to better explore the extension of the 311 zone and also the Falcon zones closer to surface. Also, surface drilling is ongoing with two drills, both east and west of the mine, to follow up on anomalous values returned from regional drilling program in 2020. At Kena, drilling continued to focus on the A zone and recently discovered footwall zone. Drilling has been slower than usual as a result of the industry-wide shortage of skilled drillers. However, we have since implemented measures in order to improve drilling performance going forward. The footwall zone is interpreted as several lenses of gold mineralization located within the 50-meter-wide corridor adjacent to the footwall of the A2 zone. The footwall zone runs parallel to the A zone and extends at least 300 meters and remains open laterally and down plunge. Recent drilling returned 20 grams over 9 meters of core length. Additionally, the recent drilling inside and outside of the current A-Zone resource block model shows the potential to expand the current resource estimate, one hole returning 132 grams per tonne gold over 7 point metres of core length. As part of our efforts to increase exploration, we have also moved the diamond drill on to 33 major level on the east side of the Kena mine. This is to better explore a number of historic showings that remain underexplored. We are also pleased with initial surface exploration that returned over 1,500 grams per tonne over half a metre from the Presqu'ile zone. We have now extended the existing mineral resource in this area to a depth of over 300 metres from surface, and is now located only 400 metres away from existing mine infrastructure. The drilling in the Schake area discovered a new zone called Bourgogne, which is perpendicular to the general northwest-southeast trend. It consists of quartz veins with a similar north trend in orientation of the nearby Kina Deep A zones. Any near-mine resource has the potential to add additional mill feed. Over to you, Duncan.

Great.

Thanks, Mike. This is a very exciting time in the company's evolution from junior to intermediate gold producer. At Eagle River, we have our sights set on increasing our underground high-grade production in order to reach the mill capacity in the short term. So far this year, we have realized an average underground production rate of 650 tons per day of 13 plus gram material. In 2022, this will ramp up to just above 700 tons per day. The Falcon Zone, discovered just a few years ago outside the mine diorite, now has its first soap in production, where the reserve grade is almost 20 grams per ton. This area is not bottlenecked with production restrictions, and with additional Falcon soaps coming online throughout 2022, This will enhance our ability to gradually increase our annual mining rates. Beginning next year, with all production in Walla coming from the high-grade underground mine, we can expect production of over 100,000 ounces per year. With our construction and development progress at Kena, we can see a pathway to an additional 100,000 ounces plus per year. The execution of the plan laid out in our Kena pre-feasibility study is going well, And we view this technical report as a base case, with the football discovery not yet a part of the production scenario. I believe the de-risking the company with an additional high-grade underground gold mine in the Tier 1 jurisdiction is a remarkable event on our path to becoming Canada's next mid-tier gold producer. We have just now mined our first stope in the A Zone with very good results with regards to dilution control. The plan is to continue mining the A Zone with another four high-grade stoves to come prior to year-end. Our ramp-up with manpower and equipment is going well, and especially in a challenging and competitive environment. As stated earlier, we fully expect our unit cost to reduce at Kena, as we assume the production profile laid out in our PFS published in June of 2021. As a reminder, projected costs from the Kena PFS are cash cost per ounce of $471 per ounce Canadian and all in sustaining costs of $838 per ounce, not including expiration. I also want to personally thank our friend and colleague, Marc-Andre Pelche, who was elected to depart Rustome for a CEO role. Marc joined the company in February of 2017 and has done a great job in optimizing Eagle River, to 100,000 ounces of annual production, and overseeing the exploration, development, technical studies, and now start-up at Kena amongst all of the additional duties he carried out over the past five years. I have personally worked with Mark off and on for nearly 13 years, and I can honestly say each day was a joy, as I always knew our operations were in capable hands. Bonne chance, mon ami.

I will now open the call up for questions.

Thank you. And if you would like to ask a question, please press star 1 on your telephone keypad. Again, to ask a question, please press star 1. And our first question is from Don DeMarco of National Bank Finance. Your line is open.

Thank you, Operator, and good morning, team. First off, I'd like to congratulate Mark on his new role It's, you know, you've done a great job at restarting the Kena mill, increasing production at Eagle, and I wish you continued success. My question then is, when we look at your cost guidance for the year, and I think it's 980 to 1090, should we think of that as inclusive of the Kena pre-commercial production, or should we just wait until the, or should we exclude it and wait until Kena's into commercial production? before wrapping it into our cost averages.

Yeah, absolutely. Hey, Don, it's Duncan. No, absolutely, that is Eagle River ounces only. We were, you know, just the guidance we gave for Kena after it became sort of firmer with the PFS program during the year was 15,000 to 25,000 ounces.

We feel very confident on that. We did not provide cost guidance. I mean, this whole... Yeah. My favorite accounting standard is not IAS 16. I'll just let you know that. I mean, the fact that we, you know, no longer credit pre-production with revenue from those ounces and have to disclose what that would be on an all-in-sustaining cost is kind of misleading because, obviously, we're not really at a... I mean, we only sold 3,000 ounces also of Kena.

So, actually, what was remarkable is we still made money on them, so... Yeah.

Yeah. Actually, it's not bad. I mean, that's actually not a bad AISC for your first quarter of production, and it was a low volume of ounces. So, yeah, we'll look forward to Q4 and Q1 and so on.

Yeah. Stressing pre-commercial, too. We have not declared commercial production. We really feel we're going to do that in the second quarter of 2022, Don, when the Pace Hill plant gets commissioned and we have sort of, I'd say, a steadier state in terms of production.

Okay. Okay. So for 2021 at Eagle, you're sort of approaching the top end of your production guidance. Next year, we can look forward to a higher throughput, 700 tons per day plus. Are there any indications what kind of throughput we might expect out of Kena for the first year?

Yeah, it's very much like the PFS.

High down, it's going to be between 450 to 500 tons per day, so very close, maybe slightly higher than the PFS.

Okay, good to hear. And so we're looking at the capex bend on Kena, and now that you're into a first production zone, should we throttle back our capex bend in Q4? Sure. Do you think you're through most of the CapEx budget in the Kena restart?

No, I don't think so, no. We'll still have good capital outlay, I'd say, in Q1 and Q2.

Of course, you know, proudly say we're organically funded. I mean, we've got $69 million in the bank and a line of credit, which I don't believe we'll ever touch. So that's fine.

Right, right. And the cash balance is actually up quarter over quarter. Okay, great. That's all for me. Thanks, guys. Great.

Thank you. And our next question is from Ralph Profetti of Aid Capital. Your line is open.

Okay, great. Thanks, operator. Good morning, Duncan, and best wishes and luck to Marc-Andre in the future. Duncan, I want to ask you about this 311 West, and I've been taking a look at it, and I'm just wondering how should we be thinking about it? You know, is this part of the story where we can start to connect the Seven Zone and the Falcon Zone Or are we testing targets into the volcanics? And how far west are we going to be testing targets?

Spike here. The 311 parallels the 7-zone in the diorite, and then the Falcon 7-zone, of course, we know now that it joins with the old 7-zone in the mine. So right now, we've been having some pretty good success extending the 311 zone through the diorite into the volcanics, and we're testing this. We think it's going to be parallel to the the Falcon 7 zone as well. So this is why we're putting in that 355-meter level development in. First, it's going to be so we can drill off this new 311, what we call Falcon 311 zone right now, and also the 7 zone, and then we can use that development for mining later. But what I like about it is because now if we have two zones in the volcanics in that area that are up higher elevations in the mine, That really debottles things, you know, at the bottom part of the mine. But also that development, which is going to go about 500 meters west of the diorite, puts us out into the volcanic so we can drill more targets from there. And certainly, you know, we see the eight zone extending out there. We see the five zone extending out there. and we had some pretty good hits out there with the surface drilling already. We still have a lot more drilling to do, but I think that area looks really good to us, so we're going to definitely spend a lot of effort out there this year.

Okay, great. Yes, that's exactly what I was looking for. Okay, and second question, should we expect a footwall zone in the year-end resource update then? would it be most correct to assume that you'll probably only be able to get 300 meters of down plunge extent into that estimate?

Yeah, that's, you know, we certainly, our goal is to get that. all of that 300 meters of full wall zone into a resource. I would say just because of the, you know, the slower drilling that's been done there, A, because, you know, we've had a shortage of some drillers, which we're kind of fixing that problem now. But it's also because it's steep and it's at a bad angle, you know, these long holes has slowed down the number of drill intersections as well. We certainly are planning to put in a new exploration drift into the footwall so we'll be able to drill it off and drill off its extension next year. But for the end of this year, We're going to certainly try to get all those ounces in, albeit inferred. We may not get them all, but certainly that's our goal. I mean, we like the zone. We keep drilling into it and hitting gold there, so we're pretty happy to see how big it's going to get and then how we can then incorporate it into the mine plan. You know, a lot of that, you know, sort of the confident grades and tons there probably won't come until maybe next year after we've got, you know, the new waste development in the hanging wall so we can drill it off properly.

Yeah, that's excellent. Okay, thanks all.

Yeah, I think one of the issues we have here is because the ramp, you know, as it extends down deeper, we're going to get better and better drill platforms, and so really... Just alluding to what Mike said, I mean, it's definitely sort of a down dip drilling at a non-ideal angle.

You definitely want to get a lot more perpendicular to the zone to truly understand its characteristics. So I think that that foot will drift a little long way to help us with that.

Thank you. And our next question is from Ryan Walker of Echelon Partners. Your line is open.

Hi, guys. Just back to the drilling. So, you know, you had fairly aggressive or very aggressive programs planned for both mines. Where would you say you are in the grand scheme of things relative to the initial goals? And then, I guess, what's in the hopper, essentially, for results yet to come out that are in the lab? And we've heard from, you know, everyone and their uncle that lab delays are pretty extensive right now.

Yeah, we're certainly... We've done well with surface drilling, I would say, over the last few months, both at Eagle and Kena. That's why we're able to extend Presque Isle and that new Borgo zone, so we're happy about that. Underground at Eagle, the drilling's coming back online. I would say that the aggressive plan we had for expiration this year, when the drilling meter started to fall short because of COVID and COVID-19, and whatnot, we kind of pulled in our horns and said, let's replace our ounces first that we're going to mine out this year. So we kind of cut back a little bit on the underground exploration of that eagle. Certainly on the Kena side, it's been a bit of a challenge. We've certainly made some changes, and we're going to continue to drill off that footwall zone there.

Okay, great. And then just in terms of is there stuff in the lab now that you know, we'll see over the next several weeks in the interim?

Yeah, we've had some results back from the Kenan football zone, so we might be making a release on that later, maybe before Christmas. Certainly we have some hits, too, at Eagle that we want to probably get out there within the next few weeks here as well. But, yeah, we do have some results coming, and I think with the slow part we went through in the summer with the drilling problems, I think that that's getting corrected now, so we'll have more steady news flow as we go forward here.

Great. Thanks. That's it for me. Great. Thanks, Ryan.

Thank you. And there are no further questions at this time. This concludes today's conference call. Thank you for participating. You may now disconnect.