Generation Mining Limited (9GN.F) Earnings Call Transcript

Good afternoon, everyone, and welcome to the Generation Mining update on the highlights from 2023 and a preview of 2024. Joining me today are our Chair, Kerry Knoll; Jamie Levy, our President and CEO; and Drew Anwyll, our Chief Operating Officer. And with that, I'm going to turn the proceedings over to Jamie.

Thank you, Ann. Thank you all for joining. As we're all familiar, this presentation, we'll have some forward-looking statements. So if you can't read it here, please go to our website and you could read it in its entirety. But thank you for joining, and it's -- good afternoon or good morning, depending on where you are, and it's nice to be out here again. I know we've been a little quiet as of late. And we're not hiding. It's just been a tough sort of market. But markets like today where we see palladium up over $100 in copper up $0.10. Maybe we should have some more webinars here. Maybe it's hard doing that has created this uptick in the market. But thank you all for joining us. And as Anna mentioned, we would like to go back and give a little recap of what happened in 2023 and what's going to happen in 2024. And as always, Ann, Kerry, myself, are always here to answer questions from investors or other investors who are here. Half the time, it seems like we're answering questions from some people writing stuff in the chat rooms. So please call us and please don't believe what's in the chat rooms. We'll tell you some more entirety than what people might read. But we're very happy where we're at in this time right now. And we'll start off with the location map here. For those of you that don't know we're in the North Shore of Lake Superior, about 10 kilometers from the Town of Marathon, 30 kilometers from Timmins Hemlo camp. And one of the interesting things about having this location slide up here is we've all read in the news, so there's been some issues down in Panama with the first quantum mine. And then we've also read some issues. I'm sure we've read about in Colombia right now with the South32, nickel mine having some issues right now. So it's good to be in Ontario, Canada. We believe is the #1 jurisdiction in the world. It's great to be here, and we're happy to keep developing this project. So -- and the next slide, please. Again, just more of a location where we're at. I mentioned numerous times, infrastructure is great for being in Northern Ontario, Canada. We do have supportive first nation community of Biigtigong Nishnaabeg, a very supportive town of Marathon. Great to have the clean power, carbon-free nuclear from outside Toronto. It's great to have the highway. We're, again, very rare to get infrastructure like that in a mining project in Canada. Next slide. Just to go back, those of you that don't remember what we have, it's a very large resource. Over 4 million ounces of palladium, over 1 billion pounds of copper and 1.3 million ounces of platinum. As you can see, just underneath it, it would be a very large production per year of just over 165,000 ounces of palladium, 41 million pounds of copper and 38,000 ounces of platinum. So we don't like to look at it as what it would cost per pound in the ground. But if you're starting to look at copper or I think Kerry and I worked at it, it was around $0.02 a pound in the ground and palladium was around $15 an ounce. So it's very cheap relative to our market cap right now. We're not alone. We're not the only one that is underperforming right now. But we just like to take a note that is a substantial resource. Obviously, our reserves are a lot smaller than that in our feasibility study, but it's a very large project. Some of the highlights again from 2023. We did update our feasibility study for new capital numbers from some of the COVID escalating prices. We did get our mandate letters of senior secured of upwards of $400 million of -- from Societe Generale Export Development Corporation in Canada, EDC. And obviously, at the end of 2022, we closed in -- the 2022 was the Wheaton Precious stream of $240 million, which we've already drawn down of $40 million. Of note, at the end of 2022, we did get our EA environmental assessment from the joint review panel. So we're able to apply for our permits. We've already got the Phase 1 permits approved, which were not as easy as we anticipated. So a little bit longer, but we got them all completed from the closure plan to the species of risk permit to the permit to remove trees have all been there, and we're starting to receive our Phase 2 permit, which Drew will talk about later on the presentation. Other notes that we did do this year that are on the highlights here. I'm just thinking of right now, we did close the financing late last month which enabled us to have this cash position, which is very favorable for us and unlike some of our peers right now, we have just over $17 million in the bank, which is a great way to start the new year. We also do have some marketable securities of a company called Moon River, which we had this Davidson molybdenum project that we ended up selling to Moon River for $600,000 in cash about $9 million worth of stock at today's prices. So it's great to have this asset that was not getting any value on our balance sheet and now we're getting some valuable value on marketable securities. So it's a great finish to the year. And I think we did a great job last year in a very weak market. Next slide, please. And we're getting lots of phone calls and -- about how underperforming we are. This is just a chart and might not show up so well on there, but just us compared to Impala, which is I think the second largest platinum producer, and Sylvania, which is the largest platinum producer and ourselves and actually the price of palladium. As you can see, we've all pretty much gone down the same direction. We all went up at the beginning of 2021 and then we ended up going up again in December 2022. But we're all -- we've all fallen off together. We're all down 60%, 70%, 50%, somewhere in that range. If we could put in a few more charts, even the TSX venture, I believe it's down around 40%, 50% since the same timing. So misery doesn't like company. I'm a large shareholder as most people are on this phone and -- on this call as carried. But we're hoping that this last little sort of blip up in our stock will continue, and we could hopefully get some appreciation of our share price. So on that, next slide, please, Ann. And Kerry, I think you can take it away from here. Do you want to add anything in on that last slide before I jump over to?

Well, that's good. Thanks, Jamie. And Yes. So I'm going to talk a little bit about metal prices and where they've been and where they're going, at least where we think they should be going and also kind of the state of the market right now. And this is -- this is a graph that we took out of a Norilsk report. And for those of you who follow palladium would know that Norilsk is the largest producer in the world out of Russia, it produces about 40% of the mine palladium. They are also listed on the London Stock Exchange, and they put out these regular reports on palladium that are surprisingly candid and full of really interesting information. You should read them if you don't already subscribe. But this graph actually is very similar to one that we have actually prepared in-house. And what it does is it compares the all-in sustaining cost of producing palladium in all these different mines around the world. And interestingly, the average cost to produce an ounce of palladium is about the same as the average cost to produce an ounce of gold worldwide, which is around $1,200 to $1,250 per ounce. So that shows that at today's palladium price, literally, 2/3 of the mines in the world are losing money. And that can't obviously be sustained. So either the price of the metal has to come back up or some mines are going to close, which would probably in turn push the price of the metal up. The metal has been in deficit. It only goes here along the top there, back to 2018, but it -- actually going all the way back to 2012, there's been a deficit in palladium each year. And it's a bit opaque as to where the difference is made up. Some of it is made up from stockpiles and ETFs that were holding the metal. There's also been a much rumored selling by the Russian government, especially in the last 2 years since the war started. But what's interesting here is that the total supply and demand, how closely it is in balance. And the 2023 number, the 100,000 ounces is what was estimated earlier in the year, in the spring by Johnson Matthey and the 900,000 ounce deficit was updated just in the past couple of weeks by Norilsk. So if that deficit is true, then we do have to see a correction. But I'm going to talk a little bit going forward about why we think the price has been down to where it is. But as you can see, very, very closely balanced. And here it is 2023. Again, on the left there is the Johnson Matthey number, I believe, on the right there -- no, on the left is the number that was predicted earlier this year. Upgraded to 900,000 ounces and expect it to be 400,000 ounces in 2024. This is a real interesting one as to some explanation of what has happened to the price in the last 6 months. And look at those short positions coming in, that's 1 million ounces going short in a market that's only 10 million ounces and that's all in the past 6 months. So that's got to get covered. That's future buying. So -- and in fact, it's to the point where Norilsk is predicting the possibility of a short squeeze happening next year, which I -- that would be a messy market, but it is something that could happen. So the shorts have really been hammering it. And why are people shorting it? Well, there was so much talk about electric cars. Electric cars are going to devastate palladium. Well, you know what, with all the electric car sales in Europe and China and you're hearing about all the time, palladium demand was down 1% in 2023, 1%, that's it. Why is it only down 1%? Well, because another type of vehicle other than EV called the hybrid and there's plug-in hybrids and regular hybrids, they use more palladium than a regular car because they don't burn as hot. And so they have to put a little more palladium in each car. And so what that means is -- and hybrids are outselling EVs by more than double worldwide. So -- that is one of the things that has really made up some of the difference. Another thing that's made up some of the differences is the emissions regulations in Europe and China, especially and probably coming into the U.S. are requiring them to scrub out from 98% of the gases that they scrub out now to 99%, and that's going to take a little bit more palladium in each car, everywhere. Every internal combustion engine car in the world, including hybrids. So we've got increased loadings in each car. We've got hybrids wildly out selling electric vehicles. And in our opinion, hybrids are the only way that the world can really go. You know a hybrid car that is going 100 kilometers on a single charge before it has to switch to gasoline, they've shown in studies that 90% of the driving in that car is on electricity. So you can switch over to 90% electricity, and you don't have to have that big battery. You don't have to have the weight. You don't have to have the long charging cycle. You can plug it into a 110 and charge it overnight at home. So hybrids -- that's why hybrids are more popular. And as the hybrid range increases and then you don't have any range anxiety because you can still go to the gas station and fill up. Hybrids, we expect are going to be the way to go. And that's going to only be improving the outlook for palladium going forward. There's a couple of other issues battery electric vehicles have started to stall, you might have read about that. And then the last thing is even they're stalling -- even though there are still government incentives and those government incentives will be around for much longer. And just a little story. I was in a taxi in London a couple of weeks ago, and the taxi driver was telling me he had to find a new place to park his car because it was electric. And his parking garage would not allow him to park in there because of the weight of the car, and they're worried that if the garage fills up with electric cars, it's going to collapse. So that's another -- yet another issue that people haven't really thought about is where you're going to park these things. Go on to the next one, Ann. So this one just have a quick look. This is one company's forecast. If you look at the gray numbers there in the middle, those are the hybrids and you can see that going across from today, it really -- if this graph is correct, the consumption of palladium in cars is only going to increase because all of those gray ones need more palladium than a regular internal combustion engine, and those are going to increase. And if these numbers stay the same, so the electric car will be important, but hybrids will be more important. And that's our feeling as well in our company. So just -- and another few things. They're really looking at hydrogen storage in -- using palladium for hydrogen storage. Nornickel is given the Chinese researchers $100 million to look for ways to do that, to use more. Most of the research into hydrogen is used platinum because it was a lot cheaper. But now that palladium has come down, there's -- they're looking at new things that they can use it. And then there's other things like e-fuels that are in cars, and then they will need more palladium. I don't know if you've been following the e-fuel market, but they're actually creating fuel out of carbon oxide, it's expensive now, but it's another alternative where -- so you can keep internal combustion engines on the road and still have no carbon footprint. And there's a few other initiatives as well. There's also a company called Platinum Group Metals and their partners Anglo. And they have done some research into this Li-ion battery technology that uses palladium and lithium in a car battery with a much longer range. So that's another thing that could also hugely impact palladium. So it's not -- palladium is not just a one-trick pony. There's a bunch of other things happening in the palladium market. And then going to about supply going forward. So Norilsk announced earlier this year that they're going to be down 8% this year due to smelter maintenance. And that's maintenance is going to continue at least into the first half of next year. So that's a decline in production. Anglo has slashed next year's production by 500,000 ounces of PGMs, 1/3 of that is palladium. Sibanye's laid off workers in Montana. They're talking about 5,000 workers in South Africa, closing some of the shafts. Impala, the same in that chart that you saw on the cost of palladium. The one on the far right there was Impala's project in Ontario. It's over $2,000 an ounce. So these things can't continue. And the Chinese company that owns the Bakubung mine in South Africa has cut its workforce by 75%. And then another thing happening, there's elections in the spring in South Africa and ahead of an election, it's predicted that the power company, the state-owned power company will be much favoring households over industry when it comes to who gets the electricity. And that, of course, is going to impact South African production going into the -- certainly in the first half of next year. So you've got all this stuff happening that is going to reduce production and yet consumption is maintaining the same. And that's why we're predicting a good year. We were blindsided by palladium this year, as were Sibanye, as was Impala, as were most of the analysts. But it looks like it was -- the shorts oversold it, and it looks like it's ready to come back, especially in light of all these closures and cutbacks. So just talking now about our copper. So we have a really unusual thing for a palladium mine, and that's -- we have a big copper credit. And if we're wrong on palladium, if palladium doesn't come back, our problems can be fixed with copper because copper, if electric cars do take off or even hybrids take off more than they are now. We got a big copper shortage. We had 4 new copper mines come into production in the world in the last 18 months going into early next year. And we predicted if you -- even though we were wrong in the palladium price a year ago, I was saying look for copper to get weak because copper, we have all these new mines coming. But then after those 4 mines, there is really nothing in the world for the next 4 or 5 years. So I think we're going to see a sustained period of increases in copper prices due to the simply lack of new supply. And just looking at the supply now, of course, we -- everybody is talking about a big surplus this year due to those new mines coming in, but then guess what happened. Cobre Panama happened. Anglo slashed their guidance by 200,000 tons. Las Bambas keeps having strikes in Peru, cutting out further. Escondida, the biggest mine in the world, the grades keep going down and analysts have now switched their expectations to looking at a big deficit in 2024. Another reason we think copper is going to be strong next year. So we've got 2 metals. And if you just go back one slide there, Ann? Can you go back -- yes. Yes. So just look at the middle table there. What's interesting is that $5 copper in today's palladium price, we become a copper mine. More of our -- 45% of our revenue will be coming from copper compared to 41% from palladium. So we do have 2 ways to increase our revenue. And if either one of these metals take off, we're good to go. And these are just some of the quotes by some of the people in the know, and I love the one from Friedland on the top left that, he's big guy and whole deal, which he's done a great job on. But we need 8 new ones by 2030 to keep up the demand. 8 -- well, he started that Kamoa-Kakula in -- 1996, I believe, he acquired that property, and it's taken until now to get it going. So that's how long these things take. And these 8 new mines are not going to happen. So we're looking at a shortage in copper. And just to finish up then, some of these numbers have been mentioned earlier, but ours is a good-sized mine. 166,000 ounces of palladium a year, 38,000 of platinum and 41 million pounds of copper. This is a big mine. And you saw that table with all the different all-in sustaining costs. We would be on the very left-hand side of that table, $813 an ounce, and that -- there was only one or 2 mines that are around the $800 level. The rest of them were all higher and more than half of them were above $1,200 all-in sustaining costs. So we look good in the comparison to the rest of the palladium world.

Thanks, Kerry. And just before I pass it off to Drew here. [Operator Instructions]. And just before I hand it over to Drew, there's one other quote that we weren't able to get on there. But I think -- it's been said by Friedland but by numerous other people that over the next 27 years, the volume of copper needed to reach net-zero. We will have to double production of all the cumulative production over the past 3,000 years. So for 23 years, we'll need to double the production over the past 3,000 years. So we pretty much realized how important copper is and how important this project is because of the copper component of our deposit. So from here, Drew, you can take it over.

Yes. Thanks, Jamie. Thanks, Kerry. People are going to be asking what are we doing going ahead. Now I'll talk about on the engineering and costing side and Jamie you'll subsequently chat about the financing. So what we're doing right now is, as you folks remember earlier this year in March, we completed an updated technical report or an updated feasibility study. And that was really more than your average feasibility study. At that time where the prices were from 2002 and into 2003 before we published 82% of the plant costs were largely fixed. So we knew what those were. Now some of those have gone stale. So in this -- into Q1 next year and going forward, we want to make sure we keep the feasibility prices valid, consistent on top of things, so we know what they are. And frankly, we also have the opportunity to make some incremental optimizations, be that in some of the designs and advancing the engineering where we can, understanding the start of the project. And also, more importantly, we'll finish up the construction permit. Permitting in Canada in Ontario is a process, in air quotes, but our team has been doing exceptionally well in bringing them in. As Jamie mentioned, not all of them came in as quickly as we had anticipated. But frankly, it's -- we're meeting a lot of benchmarks. We're exceeding and coming in faster. And also, we have the opportunity. We talked a lot about copper. And I have a couple of slides. And in the new year, we can talk further and we'll communicate further about the exploration. Next slide, please. So in terms of the optimizations that I mentioned, we will look at the capital cost. We will look at where designs can be optimized. We have the opportunity now to look at alternative mine sequencing to see if we can target higher-grade domains, better in the short time frame. This is typically what operations would do in that phase coming up to production or preconstruction, and that's exactly what we'll do. We will advance the detailed engineering smartly. We want to manage our cost burn, but we certainly want to advance the engineering in addition to where we can optimize. And again, the timing of the spend will largely be driven by the timing and the opportunistic of the financing. Like I said, as Jamie will talk about in a couple of slides. So where are we with the permitting. As was mentioned upfront, we've broken the permitting into 3 phases. Phase 1 is really what would be necessary to start the early works as in tree harvesting, and we have all the regulatory approval to get started on that. Then the Phase 2 is really what's necessary to start the drill blast and the main part of the construction. And as you see from the technical side of that, all of the documents on the technical and supporting documents have been submitted, and we're in the final phase of discussions with the government. We may see some of them before the end of this year. But as you see, we flagged the bulk of them to come in, in the winter of 2024. And then the final phase, Phase 3, that's for a federal permit from ECCC, which is on the Schedule 2. We expect to have that in the first half. That isn't contingent on starting more of the first phase of construction, but it certainly is down the path. And you'll see subsequently when we start doing the construction, we'll also start applying for the operational permits. So all of the dozen or so permits here are all directly related to the construction phase. That being said, they're also linked to the operations phase. So the government and certainly, Ontario has done a good job to make this file a priority, understanding that we have 3 critical minerals in both Canada and Ontario. So both federal and provincial governments have been attentive to our files. Now let me chat quickly on the exploration. So as you folks know, the main area of interest for generation over the last 3 years has been the deposit itself, the main zone on W Horizon. That's the South pit, the North pit and the designs we have that are outlined in the feasibility study. Now the other things we're looking for, we've got a target-rich environment across the site. Part of the targets we have -- maybe, Ann, you can go to the next slide for me, and I'll talk about the goals for this program. We have raised -- with our recent financing, we raised $3 million of flow through. So what we're targeting and the goals for the 2024 program is to look for those copper-dominant prospects. And again, what are we looking for? We're looking for areas that are close to the current footprint that could easily fall into a future pit design or mill feed. So there's the targets we're looking at is biiwaabik, which is in Ojibwe, that means metal. So that's a prospect, not a resource yet, but it's just north and west of the existing main zone. What we've seen in the historical drilling is we're getting intersections in drill that's higher than the average grade of the main deposit. So we are targeting that. We'll understand that a little further. A little further to the West, we've got another target called Four Dams, which is a copper-dominant target. What we've seen there from historical drilling and surface expression is it has we have seen high-grade copper there and low PGMs, which is very different than the main deposit and incidentally, very similar to Sally. Sally is further to the West. So that's not something that would come into the production profile in the short term. But in the past, we've had extremely high-grade surface grabs -- surface samples that were -- that indicate extremely high grade, a lot of copper, a lot of PGMs. So again, a very interesting area. It's tough to get to. That's part of the challenge on this property. It's a good thing and a bad thing. We've got a lot of targets. And historically, our company and previous operating groups have been really targeting PGMs. So with -- as Kerry outlined, the future PGM, so we've got a bucket load of that in the main deposit. And what we're looking for is, hey, let's see what this property holds in terms of copper. So it's a very interesting -- it's not a huge program. Like I said, it's about $3 million. But we will look through all of the past work that's been done. We'll compile that. And what we also want to do is we want to get a third set of eyes on this, where historically, we've been looking for PGMs. We believe it's worthwhile to look for some new copper targets as well. So just a couple of sketches, and you'll probably see these coming ahead with subsequent news releases. So biiwaabik, this is a long section where we're looking east. So you see some of the drilling we've done historically. Some of that what we previously called the [indiscernible] zone, we were looking for some of the feeders to it on these lineation. So it's slightly north and west of the existing main zone. You can see it's largely an open pit target. It's at similar depth to the main deposit. So we're very interested in this. It's not at a resource level yet. You see some of the grades there, the copper equivalents, and certainly has some interest for us. Four Dams, it's a slightly smaller target but has the possibility for some high-grade massive sulfides in an ultramafic pipe. So this is slightly different. This is a different sort of deposit, different sort of genesis to the main deposit, but it's on the rim of the contact. So back in 2020, if I'm not mistaken, we had an MT target that was very interesting that we haven't fully tested yet. So we'll be nimble with this program and we want to see what exists here. But it is still an exploration program that we're looking for the high-grade potential copper. Thanks, Ann. And as you folks may recall, we do have a resource at Sally. The real estate, the topography out in the Sally area is pretty rugged. So last summer, we did do some boots on the ground prospecting. And what we see here is a few trenches that we want to expose later on in the summer. We'll expose that ground there. There's not a lot of overburden as you folks would remember across the site. So the challenge here is setting the equipment out there to do these trenches. We'll expose the area and will help inform ourselves of what the bedrock looks like on top of that existing resource. We don't plan to be drilling this target this year, but we certainly want to get a better view of some trenching. On this property, trenching has been hugely important for us and actually a very valuable exploration tool just because of the lack of overburden, makes it very efficient. You can expose a lot of ground that you get more insight than simply a drill hole. I think that's it, Ann. And over to you, Jamie?

Thanks, Drew. And just to follow up with what Drew was saying about focusing on copper. The previous operators being Sibanye, and prior to that, Stillwater who acquired this project for Marathon PGM in 2010, very little exploration has been done. My guess would be 20,000, 25,000 meters. So it's a huge [indiscernible] it's a large property package of 220 square kilometers. There's a lot of work that needs to get done, and we plan on doing that over the next year and more just to look, as you could see by that pyramid, we do have lots of targets. I think there's over 16 different targets. And I'm sure there's a lot more targets. We're drilling some of these risky targets, part of that pyramid. So there is a lot more risky targets that we might choose to drill later on, but we have to do a little bit more work. This Jordy deposit as well is copper-rich that we're not planning on working on now, but we'd like to follow up on that as well. Anyways, going back to the Marathon mine financing? We could just -- we've already talked about this, but -- sorry, just to go back on the exploration, we plan on having an update, as Drew mentioned, whether it's another webinar or something early next year when we get our drill mobilized and we'll have our geologists and our exploration team discuss our potential upside to the Marathon project early next year. Sorry, so back to the Marathon Mine financing, as Drew mentioned earlier, our feasibility study, we updated our feasibility study with a CapEx of $1.1 billion. Some of the work we would like to do is to look at some of the projects that have been completed in our area, whether it be Magino, Cote Lake or the successful Greenstone, which is on budget on time to look at our costs as compared to their cost, maybe we could reduce some of our costs, maybe we increase some of the cost. But our hope is that we can look to optimize some of that capital going ahead. And again, Phase 1, which we've already completed with the stream of $240 million from Wheaton. Phase 2, we anticipate -- we're hoping to get some certainty from the banks by the end of this year. It looks like it's going to get pushed into 2024 about getting term sheets in definitive documents what the senior lenders will be able to provide to us. Phase 3, we started doing Phase 3 with a little financing we completed last year of $15 million. But obviously, we need some more money. So we could talk about some of the critical metals strategy money that's available from the federal and the provincial government of Ontario, also the private equity funds that are out there. But we're looking to move this project alone to have a fully financed project when the market allows us to raise that final money to have that going ahead decision a sanctioning event. Part of the government funding for those of you that don't follow like we do, there's a clean tech manufacturing, which is an investment tax credit of 30% on our processing plant. There's a company that's already put it into their study. That's -- we haven't done that yet, but that would be huge savings for us if we were able to use that 30% tax credit. I was supposed to be coming out by the end of this year with the federal government. So hopefully, we'll get some certainty or understanding whether our project being critical metals will be able to access that investment tax credit. There's also Canadian Infrastructure Bank, which is given -- it says $5 billion, but I believe it's just over $1.9 billion to critical metals projects like ourselves. We'd like to tap into that. And then there's another bucket of funds that critical metals, which is another branch of the infrastructure bank, but this is called CMIF, Critical Metals Infrastructure Bank, and this is another $1.5 billion that we're having calls with to find out if we could access some of that funding as well. And of note is the Ontario Infrastructure Bank is just earmarked to the $3 billion. We have no idea if it's for private companies or public companies like ours. But we're going to get some understanding from the provincial government in the next coming weeks, whether we can access some of that funding as well. So there's lots of money available. It's a question of whether our project is allowed or our company is allowed. And if it is, we're certainly going to be first in line because we're one of the few development projects that I know of critical metals in Ontario or in Canada that's developing and near construction decision. And we're supposed to be under 40 minutes. So I think we're here to answer some question and answers. Thank you for your time.

Ann, you're muted.

Apologies. It's like a [ seance. ] I've gone through the questions and put them in buckets or categories so that they'll be easy to answer. So gentlemen, first off, what criteria are being used to drive a sanctioning or go decision?

I think I'm asked trying to understand the question, but the sanctioning decision would come on a fully financed package. So we would need to have the remaining capital required to make that decision. So that's, as mentioned in that last slide, we're aiming to get that fully financed package out to the shareholders. And once we do, that's when we can make that sanctioning event. Anything to add on to that, Kerry?

No. I think that just other than to say the last thing you want to do is start a mine without having all of the money in place. You really want to have it all there before you start.

On the economics, what is your NPV at an 8% discount? And why are you using 6%? Or why did you use 6%?

6% was somewhat in between, obviously, 5% and 8%. 80% of our revenue being precious metal, which gets discounted at 5% and then the 25% being copper at those prices that we used in the feasibility study, if you did a weighted average, that would work out to 6%. So if you look at our sensitivities within our technical report, you could see what this project would be at a 5%, 6%, 8% or 10% as well. So they can do the sensitivities themselves. Sorry, Kerry, go ahead.

No, I just wanted to make that point.

And companies get further along, you lower the discount rate a lot of times and obviously being in Canada versus some, I don't know, some other countries, not in a first-world jurisdiction. Sometimes the discount rate goes a little bit higher. And thus being in Canada, the QB decided 6% was applicable.

So next question, what are the conditions that GenM needs to meet in order to draw additional funds from Wheaton?

Wheaton's money would come on a sanctioning event as well on construction decision. So we need to have the banking syndicate arranged, and then we'd have to have the remaining money to be spent before we draw down on the Wheaton money. So the Wheaton money would come in prior to the bank money, but we'd have to spend that first money before the Wheaton money is available for us.

And is additional streaming being considered?

I would say everything is being considered. That is not our first choice, but all would be considered at a higher price, streaming would be advantageous as well. But our first choice is not to stream any more metal. But we would look at all alternatives right now.

Okay. When will Generation Mining start harvesting trees?

As Kerry had mentioned before, the last thing you want to do is start a project and then not finish it. It would occur on a sanctioning event or when we knew we are close to a sanctioning event. So we have very good support from the Town of Marathon, the First Nation groups and from the government. The last thing I think we'd want to do is harvest a bunch of trees. Maybe some trees would be okay, but we like to have a fully financed package before we got into doing too much early works.

Okay. And when will Generation Mining start pulling ore out of the ground?

Drew, what was it? 20 -- 20 months, 24 months construction?

Yes. The construction phase from early works to completion is roughly 24 months. And that's part of the optimization that we'll do now. We are looking for opportunities to advance construction. We're looking on modular construction for some of the key parts of the plants with support of the OEMs. So as you know, it goes from the start to the end and what's the cheapest, best model to expedite that. So at this point in time, from a sanctioning decision at about 6 months for early works and preparation and then 24 months for construction and then 3 to 9 months to reach commercial production.

So a new question in and while you're at it Drew, could there be room to lower the all-in sustaining costs with the increase in market pricing for gold and silver credits?

I guess the simple answer is, it's 2 parts of the equation. So we certainly want to look at opportunities to lower the capital cost to allow for the ease of financing and support of the construction phase, but also any operation will live on margins. So whatever we can do to lower the operating costs and the equivalent of the all-in sustaining cost, we will certainly look at those things. So the simple answer is yes.

Okay. And while we're on the discussions of financing and sanctioning decisions, is a joint venture, an option and has that been discussed with any potential partners?

Joint ventures have been discussed. We did have a joint venture earlier with Sibanye, but we are looking for other joint ventures as well as part of our Phase, I think it was Phase 3 of our financing to help alleviate the final capital need for a sanctioning event.

So Drew, I'm going to bundle the next 2 questions, and they came in, in the -- in timing before you gave your exploration presentation, but do you expect to initiate any copper exploration next year? And can you give additional color on exploration on Sally, Jordy, et cetera? See -- I'll [indiscernible].

Yes. So if I didn't answer clearly, the answer is yes. We certainly want to look for copper. We've got a bunch of PGMs on site. And as we all know, copper is one of the critical minerals. So are we looking at Sally and Jordy? And the answer is yes. With the $3 million we raised, the access into both of those properties is a challenge. So again, like I said, the goal we have, we want to look for copper-dominant, which Sally and Jordy would both meet those at potentially higher grades. So yes, those meet the criteria. But we're also looking at lower risk targets that are more proximal to the main deposits, so the main pit. So biwaabik fits that one very well. Four Dams is within 4 kilometers. So should we have a great discovery there that -- and we have an operation, then that could certainly be trucked in. Jordy and Sally, those are the most advanced projects we have. We have resources on both of them. We would want to drill more. But frankly, I think there's more understanding we need on both those deposits. So we will get boots on the ground. Certainly at Sally -- and it's -- our exploration team is chomping at the bit to get into Jordy as well.

And Drew, if I could just add in. The challenge to Sally is the cost. So I just want to make sure it's a little bit more expensive to get up there to drill because it would be helicopter support versus road access that we have at Four Dams and biiwaabik, which is much easier to drill in the winter time with road access, and it would be a helicopter support in the winter.