Wallbridge Mining Company Limited (WM.TO) Earnings Call Transcript

Thank you for joining us this morning to discuss the results of the updated mineral resource estimate announced last night for our flagship Fenelon Gold project and the Martiniere Gold project, both located on the Detour-Fenelon Gold Trend as well as our exploration plans for 2023. I'm Sean Stokes, Corporate Secretary. Also on the call today from our team are Marz Kord, CEO; Brian Penny, CFO; Attila Péntek, VP Exploration; Victoria Vargas, Capital Markets Adviser. Before we begin the discussion of the updated mineral resource estimates and the 2023 exploration program, we'd like to remind you that some of the comments being made today may include forward-looking statements. I'd like to ask everyone to review the forward-looking statements disclosure provided in the news releases and in today's presentation. Please note that any financial details that we are presenting today are quoted in Canadian dollars, except where otherwise indicated. What management has completed in his presentation, we'll move to the Q&A session. Please send your questions by using the Q&A function located at the bottom of your Zoom screen. Finally, if you don't yet have a copy of the news releases or today's presentation, you can find them on our website at www.wallbridgemining.com. We'll now start the presentation.

Thanks, Sean. Good morning. I think it's important to mention a few things before we get into the review of the updated mineral resource estimate and plan for 2023. Yesterday's announcement is a result of our community efforts since the last mineral resource estimate in 2021. By designing a program that's focused on improving the mineral resources at Fenelon, and we're very proud of what we've accomplished so far. I'd like to thank everyone for their valuable hard work, our boys directors, management and staff. I also wish to thank our shareholders who have been patient with us. Additionally, our affect the community surrounding Fenelon for their support, especially our presentation partners of Waskaganish Washaw Sibi and Abitibiwinni. We're continuing to support our efforts in the development and advancement of our projects. It's a rare investment opportunity where our company owns and controls a large district scale underexplored prospective land package in a safe jurisdiction with great infrastructure. We're fortunate that our projects are located in Northwestern Quebec, a jurisdiction that embraces and supports meal exploration and mining and a deeply key of workforce and support from the local communities as well as the First Nation Partners. As to that, our land package of over 800 square kilometers spanning over 97 kilometers from the Ontario border. We're one of Canada's largest gold mines that Detour Lake mine is currently operating. And on this Wallbridge owns 2 long gold systems at Fenelon and Martiniere, where we focused on exploration efforts over the last few years and have delivered significant milestones. We've done this with our firm ESG principles in mind. We're proud to say that in the last couple of years, between 25% to 30% of our workforce is from the First Nation communities. And in August of last year, we signed a predevelopment agreement with the Cree Nation government and the key communities of Waskaganish and Washaw City, where we now have the support of our First Nation partners in advancing our projects along the diesel Fenelon Gold trend. Now Attila will provide more detail on the current narrow resource estimates. We've now delivered a mineral resource estimate of over 3 million ounces in the indicated category and about 2.4 million ounces in the inferred category. Our 2021 mineral resource estimate at Fenelon is the deposit has predominantly open payable deposits with the power to that as an underground minable. Such the media resource estimate at Fenelon contained a large deep open pits. After drilling additional holds post the 2021 mineral resource estimate, it was determined that Fenelon deposit is more amenable to an underground bulk mineable scenario. We perhaps some smaller shallow pits around the Gabon Area of 51. This really was due to the extent continue on the mineralization the thickness of the zone in our Tabasco-Cayenne and Area of 51. But more importantly, we also believe that an underground mineable deposits, as the advantages of potentially lower CapEx, a faster permitting time line and less service disturbance than a large open pit. As a result, our 2022 exploration program was designed to improve the quality of the resource with a view of the Fenelon deposit be predominantly an underground mineable, while also testing the expenses of those zones outside in the 2021 mineral resource estimate footprint. The results of that program was incorporated into this updated mineral resource estimate. We've achieved 84% and 85% increase in the mineral resource estimate grade of the inferred and indicated categories, respectively, while managing to add 17% and 11% in the total contained ounces, in the indicated and inferred, respectively. The drilling that we completed since the last mineral resource estimate at Martiniere has also significantly increased the size of that deposit. Now Martiniere is only 30 kilometers west of Fenelon. Any economic deposits there or within the Detour-Fenelon Gold Trend will be complementary to [indiscernible]. The 30 kilometers distance is within the trucking range of Fenelon with minimal impact on the operating costs using the sets mail approach. This would eliminate major capital requirements associated with certain stand-alone infrastructure at Martiniere or other deposits. I'll now ask of Attila Péntek, our VP Exploration, to discuss the updated mineral resource at Fenelon in more detail first and then at Martiniere.

Thanks, Marz. Hi, everyone, and thanks for joining us. So let's look at the estimation parameters first that we're used to drive the cutoff rates as you can see in the table comparisons, most of the parameters and the methodology stayed the same as it was in 2021. The most significant change that I should point out is that we used higher open pit mining and processing costs due to the lower open pit component of this resource estimate. And that's reflected in the higher cutoff grades for the open pits resources, at Fenelon, it increased from 0.35 to 0.45 grams per tonne. And at Martiniere, it's changed from 0.4 to 0.55 grams per tonne. So Fenelon in terms of new data, we added approximately 125,000 meters of diamond drilling as well as 20,000 meters of infill sampling of historic drill core and our geology models became much more robust, in part also benefiting from the mapping and sampling, we have completed in the Area 51 underground exploration drift that we completed in early 2022. At Martiniere, while the 2021 resource was based entirely on historic data, the new resource now incorporates 30,000 meters of drilling that we completed since last summer. This was the first program done with oriented core drilling on this project, which gave us a much better understanding of the structural controls of the gold minimization. The Fenelon, as you can see on the side-by-side comparison of these long sections, we've made significant changes to the deposit configuration compared to 2021, which was the main resource estimate. Instead of the over 600-meter deep open pit, which you can see on the right-hand side, with this black line, we now have 96% of the mineral resource estimate contained in stope optimized underground bulk minable resources, which are reported at the base case, 1.5 grams per tonne gold cutoff green. Additionally, we now have 4 shallow open pits, which are centered around the Gabbro zones and Area 51. And those are reported at the mentioned 0.45 grams tonne gold. Here, you can see in these colors, the indicated resource, which makes up about 59% of the resource and in front of it as the inferred with some transparency, so you can see the indicated behind it. So how did we accomplish these improvements to the resource? So with the elimination of the deep open pit, we lost about -- we lost a total of just over 800,000 ounces of low-grade ounces that used to be aside the pit, which were above the 0.35 grams per tonne open pit cutoff grade, but below the 1.5 gram per tonne underground curate. So having lost to 800,000 ounces, we replaced those and we added more. So we replaced it with approximately 1.3 million ounces of higher-grade material in the above 1.5 gram per tonne cutoff rig. So these 1.5 million ounces not only came from the switch from open pit to underground scenario, but a large portion of it was added by our resource expansion drilling around and inside the 2021 mineral resource footprint. The main areas we've seen significant additions were near surface in the tobacco Cayenne areas. And then also in the Northwest of Area 51 along the -- and as well along the diorite, as you can see here, no resources, whereas we've added significant resources here. And then also in the opposite end, in the Southeast, along the diorite contact, as you've seen in recent press releases, we've seen very, very significant additions to the gold analyzation that were not there in 2021. And then, of course, we also added the Ripley zone, which none of that was part of the 2021 resource estimate. And now it's it became a satellite zone to Fenelon. One important graph that speaks to the overall quality of the deposit is the analysis per vertical meters. And this statistic is really meaningful when your deposit is compact in a fairly small area like Fenelon is. So most of the analysis are centered in -- are concentrated in an area of 1-by-1 kilometer area down to about 1 kilometer as you can see on this image here. So that means that it doesn't require extensive infrastructure going several kilometers to mine these ounces in the future. But regardless of the type of mining method, the analysis per vertical leaders both in the 2021 and the 2023 mineral resource estimates are very remarkable and validate the bulk mineability of the deposit. Into 2021, mineral resource estimate, the high-value allowances per vertical meters starting around 300, 400-meter vertical depth here. extended the open pit down to 600 meters like we discussed. After additional drilling after this resource estimate and based on the continuity and thicknesses of the zones, it became evident now that it would be much more beneficial to review the deposit as a predominant both mineable underground deposit, where it has the potential to deliver attractive economics with lower CapEx smaller footprint, faster permitting process than a large open pit. So we essentially now have more ounces in this new resource estimate at a higher grade. And in less tons of ore, as you can see from these black lines, we're in the open pit. There was a lot of tonnage whereas now much less tonnage is containing all those ounces. So the 2023 mineral resource estimate now demonstrates the high-quality bulk mineable underground deposits at an average of over 3,000 ounces per vertical meters for the entire deposit from surface down to 1,000 meters. And between 4,000 and 8,000 meters where the heart of the deposit is there's over 5,000 ounces per vertical meters. But let's look at all of this in 3D, and I'm just going to switch to a different software. Just bear with me. I hope technology assist. Okay. You can all -- Marz could you confirm that you can see the -- okay. So we're looking at down at the deposit right now. This is a plan view and just showing the main geology, the most important rock types are this Jeremie Diorite and the Main Gabbro. And you can see the underground workings that exist currently on the project. In 2019, we completed the bulk sample here in the Gabbro zones. And then this year, as I already mentioned, we drove out an exploration drift into Area 51 to map and sample that and get to know it. So if we pull up the block models from last year, so this is -- you can see in the legend on the right-hand side. So we're looking at all the blocks that we're about 1.5 gram per tonne cutoff grade. And so you can see the whole deposit here that was reported in 2021. And just pulling up the open pit of that resource at the time. you can see not only is the pit very deep, 600 meters deep, but also a large footprint. It's a large part of the pit didn't contain actually resources. So we focused a lot of our drilling in that near surface area to add additional resources. So now if we look at a long section looking towards the north, just switching out here right now and removing the geology just to clean it up a little bit. So again, you can see the open pit in the 2021 resource estimate, extending down to 600 meters. So a lot of the higher grade material was actually contained inside that pit. And then the remaining high-grade material that was below it. That was the -- that's what made up the underground resource in the last resource estimate. So now if we compare this to this year's results is going to remove the open pit here. So this is the block model from this year. And if I toggle it back and forth, you can see a lot of areas where the whole deposit has just really bulked up. We've added a lot of additional resources. For example, if you focus in this upper area, the Northwest area that I already mentioned on the plans, you can see a lot of additional resources there. And then also here, depth in the Southeast, sort of down plunge area, we've seen really good resource additions. Now looking at all of this again in plan view, so you can appreciate the changes also looking down. So again, just to focus on some of these areas here where we have really nice high-grade material right near surface, new additions. And then also due to the infill sampling that we did, the infusate of historic core, we were able to add a lot of additional ounces even within the known footprint. A lot of resource additions are actually inside that footprint. So it's not all coming from extensions, but you can again see here the Southeast area, a lot of additions there. So looking at the open pits now. So we mentioned that there's 4 smaller open pits now. One is centered here on the Gabbro zones, I'm just going to remove last year's spot model and adding in the other open pits, which are all in the -- what we call the Area 51 zones. Again, you can see some of this really nice high-grade material right near surface that makes up the open pit component of the resource. Again, looking to the north just to get an appreciation of the depth of these pits. So right now, these 150 meters is the deepest part of this hit at the gallons. We already have an open pit there actually. That's where the portal is for the underground workings. So that would just be an additional pit there. And then here on the Area 51 pits, which are a little bit shallower, they're about 80 meters to 100 meter deep. And then if we pull up the -- these are the underground stope optimized bulk mining resources. So again, you can see sort of all the ounces being in a fairly compact area of 750 meters per kilometer. And if we look at this now in a cross-section looking north, this gives you a good appreciation for the thicknesses of these zones. You see a lot of these zones back together very close to get to each other and large thicknesses of these zones. So that's why this deposit is believed to be really amenable to bulk mining. And of course, the PEA, the preliminary economic assessment will give us the ultimate answers for that. And just to close off, let me just pull up the drill intersections. Just to emphasize that we really just to drill the deposit down to 1,000 meters. So this is where the resource ends. But we have one drill hole that extends further than that, another 500, 600 meters, and we hit exactly the same kind of geology, same kind of mineralization styles we actually hit the same dire same Gabbro, and there's about 17 grams per tonne or 4-meter intersection there as well. So it gives us really good indication that the resource will continue in the future. once we continue drilling at further depth. And then just to close off, in plan view, if we look at this again and just -- it's already speaking a little bit into what the plans are for 2023 we can see that most of these zones remain open, the diorite contact and some of the structures that control the gold mineralization like the Jeremie Fault, for example, but those will be some of the targets that we'll be following up in 2023. So I'll just move back to the presentation. And so Marz will -- will talk a bit now about what we mean on underground bulk mining and what kind of production scenarios we envisioned for the upcoming preliminary economic investment.

Thanks, Attila. What I'd like to focus on is the review of the underground resource through the lens of bulk minability. And here, let's take a quick look at some of the side-by-side comparisons our deposits against one of the analogs that we use, which is the Young-Davidson mine, currently operating by Alamos. On the left in the section, looking west, identifying the Tabasco-Cayenne and Area 51 zones. And as they convert that they create these large -- these large zones amenable to both mining and the center figure, the longitudinal section looking north shows the strike tenets. And we can see when viewing this longitudinal alongside Alamos' Young-Davidson operation, that below the shallow Fenelon open pits that we have, we have a significant underground resource that still open in all directions, as Attila just mentioned, but have very much similarity to that panel loss deposit. Now Young-Davidson has been mining for a few years. We recently increased from about 6,000 tonnes to close to 8,000 tonnes per day to a depth of about 1,500 meters. But as being operated at about 2.2 to 2.6 grams per tonne for the last 3 years, approximately generating between 180,000 to 200,000 ounces per year. Now this slide here shows some of the comparable deposits to Fenelon such as Agnico's Goldex, Yamana's Wasamac and Alamos' Young-Davidson. Now each of these comparable deposits have veins or zones ranging from copper meters to over 30 to 40 meters in thickness, again, very similar to the Fenelon and these are continuous as well. So making them really amenable to bulk mining. But importantly, 2 of these deposits are currently offering successfully. And the Yamana's new project purchased from Monarch is also planned to be in operation in a couple of years. Now the mineral resource estimates preceding a production decision with these projects were in the range of 2 to 3 grams per tonne with gold ounces of about 2 million to 3 million ounces. Now these producing deposits currently produce grades ranging from about 1.7 grams to about 2.3 grams per tonne. Their cash costs range from about USD 750 to USD 850 per ounce, and the all-in sustaining costs range from about USD 930 to about USD 1,070 per ounce. And the production rates are around 8,000 tonnes per day. Now all of the data that we have here is derived from the web side of those operations and also in the last 12 months. So this is sort of average over the last 12 months. Of course, Fenelon is still at the resource phase requires additional work, starting with our preliminary economic assessment conversion drilling and all our other studies. But encouragingly, the current neuro resource estimate that fell a lot is higher than the mineral resource estimates. In terms of grade, it's higher than those mineral resource estimates of these comparable deposits proceeding the production decision. Now Fenelon as it is current, still has a lot of room to grow, potentially down to 1,500 meters or more based on that one deep drill hole that we completed in 2021 and Attila just mentioned a few minutes ago. So continued efforts in exploration drilling will help us tell the whole story. I'll offer it back to Attila to talk about the Martiniere and our 2023 exploration plans.

Thanks, Marz. The Martiniere, the new resource now contains a total of just over 680,000 ounces in the indicated category and over 630,000 ounces in the inferred category, which represents significant increases in contained ounces and also improved grades compared to the 2021 mineral resource. So we really see tremendous potential at Martiniere and plan to spend $11 million on exploration there this year. So most of the resource additions came from extensions of non-zones along strike and depth. You can see again in these side-by-side comparisons, some of the resource additions along strike. But then very importantly, you can see how in the resources were isolated separated from each other and they had these smaller isolated open pits. And our focused drilling in the area in Between was now able to connect them. You can see the continuous continuity between the 2 trends, and now the open pits are able to connect. The deposit remains open in most directions and is largely untested below 400-, 500-meter vertical depth, as you can see also on these images. So we're far from the depth that we've drilled at Fenelon. Again, you can see the depth sticks. The deepest part of the resource is around 400 meters, and there's really not much drilling below that. So our recent drill results have shown that these shoots can be extended. So we will continue on larger step outs there. And we also opened up some new areas for expansion, like one of the last drill holes that we reported were in the East, we found 3 new zones in one of the last holes. Overall, the combined detailed Fenelon Gold Trend, result estimate now contains a total of 3.05 million ounces of indicated and 2.35 million ounces of inferred resources, both around 3 grams per tonne overall grade, which represent really significant increases, both in grades and also in contained analysis since the 2021 resource. Well, let's look at the plans now for 2023. Following up on the updated mineral resource estimates in anticipation of the upcoming preliminary economic assessment that final our 2023 program will be aimed at both expansion of loan gold deposits and making new discoveries on the rest of the -- under-explored land package. The largest portion, about half of the budget will be devoted to Martiniere, where we will be completing expansion drilling with large space step-outs on the Nova Gold trends and the or hosting environment to continue demonstrating the size potential of this deposit. We'll also start working on various technical studies such as metallurgy, geotechnical, raw characterization with the goal to bring this project up to the same level of advancement as stand-alone in order to include it in future economic sense. At the Fenelon deposit, which as we've seen, remains open laterally and at depth in multiple directions, we plan to drill around 15,000 meters, which is again focused mainly on large step-outs of the known gold zones and host environments as well as the important structures such as the Jeremie Fault and Sunday Lake Deformation Zone with the hopes of discovering additional extensions and new gold zones or satellite zones like we've seen at Ripley. For the remainder of the $36 million 2023 budget, will be devoted to regional exploration and the vicinity of the 2 loan gold deposits, testing from drill-ready targets and developing our pipeline of other grassroots exploration targets. Zooming into a couple of these areas. First, we're going to look at the eastern part of the land package. So you can see here the Fenelon deposit as a reference. So outside of the drilling that we've done at Salon at the Fenelon Gold system, there's very limited geologic information and historic drill testing on the Fenelon property itself and the neighboring Martiniere and Grasset properties. And there are several targets within a few kilometers of the deposit that showed geological and geophysical characteristics that are very favorable for the deposition of gold novation. And therefore, the 2023 program will drive some of those priority targets. So you can see with these boxes, some of the extensions of the wholesale docs and structures that are controlling gold realization. You can see with these gray dots, those of the drill holes that exist on the properties. Not all of them are time in drilling. Some of it is RC or other types of drilling. And you can see just going a kilometer or 2 away from the deposit and there's barely any drilling and basically about 20 kilometers strike length you had Grasset with but almost no drilling at all. Here on the Grasset Gold property, which is located east of Fenelon, we've been developing a very promising gold exploration target, which is a strong flexure in the Sunday Lake Deformation Zone, as you can see here. These flexures are generally very favorable areas. Fenelon is also sitting at one of these flexures. And there's a very folded statography and these are known to be excellent settings for gold deposition. So looking now at the Western part of the land package centered around the manner deposits. We again have a large number of prioritized exploration targets on the Martiniere property itself as well as the surrounding Casault and Harri properties. Some of these targets are again ready to be drilled and will be selected for drill testing this year and some others require a bit more grasses exploration to prepare them for future drill testing. An example of that is the Casault's East block, where we've flown a very detailed high-resolution magnetic survey this year, a drone magnetic survey which you can see as much better resolution as the regional mag. And that has really identified a significant secondary display of the Sunday Lake Deformation Zone, which appears to be associated somehow with the Lac du doigt deformation zone as well, which controls the Martiniere deposit and also some other showings in the area. So we've selected now this area here for a [indiscernible] program, which is sampling basal till along the structure, which will be completed in the first quarter of this year in the hopes of getting this ready for future drill testing of some of the prospective segments of the structure. And then finally, at Casault, the western block has already seen good results from our programs. In 2021, our Grasset drilling outlined the gold bearing environment. Some of these structures have shown to be gold bearing, and there are -- some of our gold intersections are up to almost 7 grams per tonne over 2 meters. So we'll be following up those results with some field work and some were due pesos. So I'll hand now back to Marz.

Thanks, Attila. As you heard, we're pleased with our achievements since the 2021 minerals results estimate. We strongly believe in the potential for expansion and discovery poorly at Fenelon and Martiniere but elsewhere on this extensive land package of controlling the Abitibi, which we feel is one of the industry's most promising and prospective. For the recap, we've demonstrated large growth systems, both at Fenelon and Martiniere with more than 3 million ounces in the indicated category and 2.4 million ounces in the inferred category. We're currently working on a preliminary economic assessment for Fenelon, which we expect to deliver in the second quarter of this year and demonstrate the value of Fenelon deposits. We see significant opportunities for growth not only at Fenelon which could be a much larger deposit but also at Martiniere, we will see future improvement in its size for open pitable as well as underground type resources. We have a large land package, which is dramatically under expo. In comparison to the southern belt between Baldor and Guarana, we see potential for multiple discoveries along this line package. We started this year with about $23 million in our treasury, as well as an approximately $4 million, which is expected in this quarter to be received from the Quebec government for the balance of our 2021 refundable tax credit. And the balance of that $36 million program is expected to be funded from other sources. I'll now open the meeting up to questions, and Sean Stokes will be reading those questions.

Thanks, Marz. First, an apology, I neglected to introduce a key team member, Bob MacDonald, our GM of Mining Operation and projects at the [indiscernible]. So the first question, Marz, is 2 parts. One is how is valves looking at the sequencing of the open pits and underground development. Second part is, does the new bulk mining scenario make use of the existing underground workings and in what capacity.

Sure. So it's very early to say until the preliminary economic assessment is completed. But the indications are that you have 3 or 4 small deposits typically in these its advantages to have some pit material, especially when you're ramping up your production, testing the mill and also potentially some of those open pits once were completed within the first 2, 3 years that we can be -- it can be used as a storage for the tailings or your racetrack. But again, all of those would be reviewed in the preliminary economic assessment at least in the preliminary stage. What was the second part, Sean. Sorry, I...

Does the bulk mining scenario make use of the existing underground workings and if so, in what capacity?

So the type of production profile that we're looking at today, as I mentioned in some of the analogs to Young-Davidson, the current mine working is only down to about a couple of hundred meters and potentially the material handling system we require additional infrastructure such as shafts or any other alternatives. But certainly, we want to maximize the existing infrastructure that's there, perhaps even in the early stages of the production. And so we will determine those again once through the review of the -- all of the mining applications in the polymer economic assessment.

Great. We've had a couple of questions about when drilling for this resource, the MREs was cut off and also when we expect to put out additional results.

Okay. Attila, perhaps you can answer this.

Yes. The cutoff date for the geologic model and the drilling data that's included here as early November. So we've -- when we designed the program last year, we fast-tracked all the drilling that was needed for the -- in support of this resource estimate to be completed in time. So by early November, we had most of the assays that we were looking forward to update this resource. But of course, with the size of our programs, there's always a large number of assays still in the system. So we continue to receive more assays and we'll continue to announce some more results from the from 2022 program. So...

Okay. As well continue with until -- so there's a question, Attila, asking what exploration areas excite you the most?

Well, I think, yes, it's the ones that I've shown on the map. It's going to be -- the next week, we'll spend a lot of time with the geos to try to get to a consensus of what the favorite targets are. But yes, there's certainly a lot of good targets that in the last 2, 3 years, we've focused so much on resource drawing and trying to keep growing the resource that now we're really looking forward to some of these bigger step outs and getting to test some of our ideas to get into some new discoveries. So -- yes, the list is kind of endless. The land package really had a lot of potential stuff. Yes.

Great. There's a question regarding funding for 2023 in terms of credit resources and plans to fulfill the drilling for them.