i-80 Gold Corp. Q3 FY2024 Earnings Call

Good morning. My name is John, and I will be your conference operator today. At this time, I would like to welcome everyone to the i-80 Gold Corp. Q3 2024 Results Conference Call. All lines have been placed on mute to prevent any background noise. After the speakers' remarks, there will be a question-and-answer session. Thank you. Mr. Young, you may begin your conference.

Well, thank you, John, and welcome, everyone. Turning to Slide 2. I'd like to draw everyone's attention to our Safe Harbor language as we will be making forward-looking statements throughout today's presentation. Joining me on the call is our President and COO, Matt Gili; our CFO, Ryan Snow; and two new hires, Dave Savarie, our Senior Vice President, General Counsel; and Leily Omoumi, who is our new Vice President, Corporate Development and Strategy. Turning to Slide 3. Before we begin our formal remarks, I'd like to address today's share price reaction to our announcement. Internally, we expected the stock could trade down for a period as the market absorbed the new plan and the strategy moving forward. I think we would say internally that the market's overreacted. I think when you look at any company, there are three things to consider. The first is the quality of the people, and I'll tell you that this is a great team that I'm joining. As the press release indicated, we've added further bench strength that will address some of the issues we will discuss today, mainly the balance sheet. The quality of the asset base and the location are perfect. We have a new development plan that would see this company move to a mid-tier gold producer with Nevada production of 400,000 to 500,000 ounces per year. The capital intensity for these five projects is very low, and there is a lot of organic growth within the gold portfolio as well as in base metals. Regarding the balance sheet, it is fixable. It's something we'll work on with our current lenders and we've been in discussion with additional sources of capital, and we will resolve it while working to minimize dilution for shareholders. One of the things that Leily and the team will focus on is working with the market to understand what the NAV of this company is and could be. It will take three months to six months as we complete various studies, and we expect to have studies out for all five gold projects before the end of March. Investors will then see what the current value is and what the potential value of the asset base is. Then we will make decisions on the restructuring of the balance sheet that minimizes shareholder dilution. For the group coming in, we've done this in the past, where we had a great asset base and a poor share price. So we leveraged the balance sheet and executed, taking the stock from $3 to $15. We believe that we're going to create significant value and will fix the balance sheet while executing to become a mid-tier gold producer through the balance of the decade. With that, I'll turn to Slide 4, and commence the formal part of our call. Upon my arrival, we reviewed the strategic direction of the company. As a result, we've adopted a new development plan, presenting our view of the most effective strategy to generate free cash flow while progressing our earlier stage projects to provide a growth pipeline in the medium and long-term. During today's call, in addition to our regular quarterly operating and financial results review, we'll provide an update on the base metal joint venture discussions at Ruby Hill, discuss our recapitalization plans, and finally, touch on the organizational changes needed to achieve this plan. We're prioritizing our most advanced stage gold and silver projects with established resources and technical studies. Thus, exploration development work on base metal targets has been deferred to focus on projects with the fastest timeline to generate cash flow. Overall, given the company's balance sheet constraints and the additional capital required for the new development plan, all higher risk projects with lower certainty of economic viability have also been deferred until the balance sheet is in a stronger position and there's Board approval for allocating risk capital to these projects. To achieve this, we intend to pursue recapitalization, best supported by focusing on our advanced stage gold projects: Granite Creek, Archimedes Underground (previously Ruby Deeps), and the 426 Zone, as well as McCoy Cove. These projects are expected to have low capital intensity and a clear path to cash flow generation. What's new is the decision to accelerate permitting and development of the two large oxide open pit deposits, Granite Creek and Mineral Point. Mineral Point has the potential to become a large-scale heap leach mine, and a PEA is underway to complete it by the end of the first quarter. While the base metal opportunities at Ruby Hill could be significant, that project is at an earlier stage than our other gold projects within the i-80 Gold portfolio, and the timeline to cash flow generation is longer and undefined. Now, I'd like to turn the call over to our President and COO, Matt Gili, to present our development plan in more detail as well as our third quarter operating results.

Thank you, Richard. The new development plan is focused on near-term cash flow generation while advancing a pipeline of growth. We're now focused on ramping up permitting and development of five gold deposits through the balance of the decade, including three underground mines, and accelerating the permitting and development of two large oxide open pit deposits, Granite Creek and Mineral Point. The Lone Tree Autoclave remains the centralized refractory ore processing facility in the new development plan. Management intends to continue its work towards completion of the refurbishment feasibility study next year. Following the completion of the study, a series of trade-off scenarios will compare full autoclave refurbishment with alternate toll milling and ore purchase agreement options that could potentially be available. Slide 6, Granite Creek is comprised of an underground mine, which is currently ramping up and expected to be in commercial production in 2026, and an open pit project that is in the permitting process. As mentioned, Granite Creek Underground is ramping up to commercial production. Mining rates and gold production for the quarter and nine months of 2024 were lower than planned due to increased groundwater ingress into the underground working areas, negatively impacting productivity and development advancement rates. To manage the higher water rates, the mine is adding pumping capacity, deepening an existing de-watering well, and reworking the de-watering system to allow for additional flow capacity in the water treatment facility on site. We expect that production and costs will continue to be negatively impacted until these measures are completed and groundwater flows return to manageable levels by the end of the third quarter of 2025. On a positive note, the ore control reconciliation on the bench level in both zones mined to-date has been positive. In the Ogee zone, where most mining has occurred, we've seen more tons, plus 40% better grade, plus 37%, equating to nearly 90% more ounces. On the first level of the South Pacific zone, we observed nearly a three-fold increase in tons at an expected rate for nearly three times more ounces. As a result, we feel confident that once we address the water issues, costs will decline and production will increase. This is also the asset we believe has the greatest exploration upside, given its location—less than 10 km from a world-class mine with over 25 million ounces discovered to date. The Granite Creek open pit is a relatively low capital intensity project, given it is a previously producing mine using heap leach processing. The mineral resource sits at over 1 million ounces at an average grade of approximately 1.4 grams per ton—making it one of the highest-grade oxide deposits in Nevada. The 2021 Pre-Feasibility Study envisioned heap leach or mill standard. We are updating the prior technical report and performing trade-off studies on heap leaching the entire deposit, building an oxide processing facility on-site, or utilizing existing processing infrastructure at other properties to handle higher-grade material while continuing to heap leach lower-grade material. This study is expected to be released by the end of 2025. We have begun the permitting process, and we expect it will take approximately three years, followed by 18 months of construction. The Ruby Hill Complex comprises the Archimedes Underground (formerly Ruby Deeps), Mineral Point oxide open pit project, and the Gold Hill oxide deposit. Additionally, the Ruby Hill Complex possesses significant base metal potential at the FAD project, Blackjack, and Hilltop. For the time being, base metal projects and the Gold Hill project have been deferred to prioritize the more advanced projects that offer a clearer and shorter pathway to generating free cash flow. Ryan will expand on the base metal JV later on the call. We expect permits for underground mining at Archimedes in Q1 of 2025, allowing us to begin development and achieve production by late 2026. Archimedes Underground is on track to be our second producing asset. While it has the lowest grade of our three underground mines, it has the most favorable mining conditions, which will allow us to mine using more efficient methods. As we develop the lower portion of the ore body, we will complete the required drilling to permit it over the next few years. We will have a PEA for Archimedes Underground by the end of Q1 2025. However, we anticipate we will not issue a feasibility study on the Archimedes Underground until the drilling program, targeted for 2027, is completed. Thus, we envision the Archimedes feasibility study being published in late 2027 or early 2028. Mineral Point has the potential to be our flagship mine. It hosts our largest gold and silver resource in the portfolio. Based on the internal scoping study, it has the potential to be a multi-hundred-thousand-ounce mine at solid costs. It will be our most expensive mine to build, but our expectation is that by the time we begin construction, targeted for 2030, we will have four producing gold mines generating significant cash flows to fund its development combined with project finance or corporate facilities. We expect to release a PEA in Q1 2025. Cove is our third underground mine. Like Granite Creek, grades are over 10 grams per ton, making it one of the highest-grade underground mines in North America. The mining conditions at Cove are better than Granite Creek, though perhaps not as favorable as Archimedes. The baseline work to advance our final permit application is proceeding on schedule. We expect to submit the final permits in mid-2025 and anticipate final approvals by the end of 2027. Construction is scheduled to take 18 months. The scope consists of de-watering and portal development with associated infrastructure. There are no planned processing facilities at Cove. An infill drill program is currently underway and should be completed in Q1 of 2025, allowing us to finalize the feasibility study for the mine in that year. I've already spoken to the pending feasibility study, which will optimize the value of the permitted autoclave at Lone Tree. We continue to realize value for the oxide material mined at Granite Creek through the existing ore purchase agreement while we pursue alternatives for processing our refractory material, either through extending our toll milling agreement or an alternate processing solution. The Lone Tree open pit project, however, continues to have various financial, technical, environmental, and social issues to be resolved. The project is expected to remain deferred for another decade. We believe new technologies and other solutions may become available in the future to unlock the value of this large open pit project. We mined over 53,000 tons of Granite Creek underground—nearly 50% more than Q3 of last year. The mining of processing-grade material, which is grade equal to or above 5 grams per ton, is largely in line with last year's production. An increase in the number of mining headings available allowed for comparable production despite the previous de-watering issues. The significant increase in oxide mineralized material mined, compared to 2023, is due to including oxide material grading between 2 and 5 grams per ton. This material is classified as incremental and transported to the Lone Tree facility for leaching on the heap leach pads at that site. For clarity, no stopes are planned at less than 5 grams per ton. The incremental material is encountered while developing the decline or while accessing between stope blocks. Development rates continue to ramp up compared to the same period in 2023 but are still not meeting our plan, again, due to water. A sharp reduction in exploration drilling footage reflects a large exploration drilling program in 2023 while shifting our strategy for exploration drilling from surface to underground in 2024. This shift has delayed our timing of drilling as we complete excavation of the underground drilling platform. I will now hand the call over to Ryan Snow to walk us through our financials.

Thanks, Matt, and good morning to our listeners. Yesterday, after the market close, the company reported our financial and operating results. The financial statements and MD&A for the three months and nine months ended September 30, 2024, can be found on our website. Highlights of our results include revenues in the quarter totaling $11.5 million, compared to $13.2 million in the comparative prior year period. This difference is due to lower volumes sold, partially offset by a higher gold price. Third quarter gold sales totaled 3,063 ounces at an average realized gold price of $2,422 per ounce, resulting in revenue of $7.4 million, compared to gold sales of 4,585 ounces at an average realized gold price of $1,895 per ounce, which generated $8.7 million in revenue in the third quarter of 2023. Additionally, during the third quarter, the company recorded mineralized material sales totaling 14,696 tons for revenue of $4.1 million, compared to mineralized material sales totaling 16,059 tons for revenue of $4.5 million in the comparative prior year period. The company recorded a loss per share of $0.10 for the quarter, a decrease from the $0.01 loss recorded in the comparative period a year ago. This change is primarily due to an expense recognized in the period of $10.3 million related to losses on derivative instruments and warrant revaluation compared to $21.5 million income for the same instruments in the comparative period. Costs of sales increased by $3.2 million compared to the third quarter of last year, mainly due to an inventory write-down at Granite Creek related to the increased costs from the water issues Matt described earlier. We ended the quarter with $21.8 million in cash, representing a decrease of $26 million from the end of the second quarter, primarily due to cash used in operations and capital expenditures, in addition to the 2,210 ounces delivered to Orion this quarter relating to deferred gold deliveries from the second quarter. During the third quarter, the company began using the previously announced at-the-market equity program to raise capital. In total, 11.5 million shares were issued for gross proceeds of $13.1 million. As for our recapitalization plan, as highlighted on Slide 16, as Matt and I outlined today, our first gold mine and only source of cash flow, Granite Creek, continues to ramp up. Given the water issues Matt described, we currently do not expect the mine to generate free cash flow until late in 2025 or early in 2026. As a result, we need to recapitalize our balance sheet. The company's ability to continue operating and execute its new development plan depends upon successfully restructuring current debt obligations and obtaining additional financing. While management has successfully raised funds in the past, there can be no assurance that it will be able to do so in the future. We envision a two-step recapitalization process that will include demonstrating a viable path to generating free cash flow and rescheduling or refinancing existing debt obligations. This plan will include finding a solution for our short-term commitments, including the deferral of the upcoming gold and silver deliveries to Orion scheduled for late December and early January. Discussions with Orion regarding this deferral have begun, and the company expects a positive outcome in the coming weeks. Phase 2 of the recapitalization plan involves working with our current partners as well as seeking new debt providers to restructure our existing debt and provide sufficient capital to execute the company's new development plan, with repayment terms aligned with the company's ability to service that debt. Management has initiated work on this topic, including discussions with existing and potential new partners, aiming to complete this process in the first quarter of 2025. As we discussed in the quarterly press release, we believe that a base metal-focused joint venture at Ruby Hill no longer makes sense in light of the new development plan. In November 2023, we entered into a non-binding letter of intent with a third-party to consider a joint venture for Ruby Hill, focusing on base metal exploration and development. It's important to note that the joint venture included not just deposits with base metal potential—namely Blackjack, Hilltop, and FAD—but also all gold and silver deposits at Ruby Hill. The proposed structure of the JV could have impacted the timing of advancing the existing gold deposits and the company's ability to restructure the balance sheet. After careful assessment of the joint venture's terms and economics, considering the potential value of the existing gold resources in a rising gold price environment, and factoring in the limited understanding of the base metal potential, i-80's Board and management have chosen to terminate discussions regarding the joint venture. We believe the base metal potential at Ruby Hill might ultimately be significant, and it is prudent to gain a clearer understanding of the upside potential before entering any joint venture deal. I will now turn the call back over to Richard Young, our CEO, to discuss the company's organizational structure and provide closing remarks.

Well, thank you, Ryan. To support our new development plan, as the company transitions into a developer and producer, our organizational structure and skill sets need to evolve. We envision becoming a mid-tier gold producer of between 400,000 and 500,000 ounces of gold per year by the early 2030s. The three most significant changes facing i-80 Gold today are: first, the increased emphasis on tactical skills to ramp up, permit, and construct five projects through the balance of the decade; second, the need to restructure and recapitalize the balance sheet in line with the new development plan; and third, the additional legal and reporting requirements of becoming a U.S. domestic issuer. To meet these growing and changing demands, the company has promoted four senior technical personnel and hired four new senior positions. We believe these organizational changes and new hires add the necessary experience and bench strength to further minimize execution risks associated with our new development plan. The cost of these changes is expected to be partially offset by reduced third-party consulting costs. On the operational front, the promotion of four senior technical personnel reflects the importance of these individuals in reducing our execution risks while ramping up, permitting, and constructing five mines over the decade. On the legal front, the hiring of Dave Savarie as our new Senior Vice President, General Counsel, will bring in-house industry-specific legal experience and improve our approach to compliance with governance and contractual commitments, while allowing us to reduce third-party legal costs. This addition will also relieve existing management of handling legal processes in this increasingly complex environment while adding strength to our execution of the new plan. In finance, we've appointed two senior financial roles, a VP of Treasury heading treasury and financing, Katerina Deluca, and a VP of Strategic Planning, Curtis Turner, who transitions from VP Finance to this new role. These positions are needed to manage the increased workload associated with balance sheet restructuring and debt reporting, while also enabling the new development plan's execution. The VP Finance function will be managed by incoming hire Cindy Tseo. Finally, Leily Omoumi is joining the team as Vice President of Corporate Development and Strategy, also overseeing Investor Relations. This position replaces outgoing VP of Corporate Development, Matt Gollat, who was instrumental in forming i-80 Gold since its inception in 2021. Mr. Gollat has agreed to remain as an advisor during the transition to focus on the new development plan. The new VP of Corporate Development will execute the new organization's vision, developing and maintaining the company's life of mine models and conveying the value of i-80 Gold to the market. Joining Leily will be Jim Mackay, who will work alongside her. All these new hires are individuals I have worked with previously, some for nearly 20 years, all of whom possess the skills and values that will complement our already strong team. I would like to turn the call back to John, our operator, so we can respond to listener questions.

Yes, sir. Thank you. Ladies and gentlemen, we will now begin the question-and-answer session. We'll now take the first question from Kent Whitaker from KP7 Investors. Your line is now open. Please go ahead.

Thank you. A couple of questions. Well, first off, congratulations on instilling some discipline in the company and actually developing a development plan. So I first of all appreciate that. It seems like the market has some questions about survivability, and I know you addressed your reaction to the market's reaction to your development plan. But could I just ask, as you come in and look over the balance sheet, what do you see as the key risks, not just on the balance sheet, but also on other obligations that you've got, and how over the next few months or quarters or years will you address those issues? Thank you.

Well, that's a great question. First of all, it's Richard Young speaking. Myself and several newly joined team members have experience working under more challenging conditions in West Africa in terms of fundraising. Looking at the balance sheet, these are Nevada projects. They're much easier to manage, and there's a bigger pool of capital available than there was in West Africa. I think at the time we sold Teranga, we might have had $600 million in debt. Our consensus is that this is a fixable issue; the debt levels, compared to the cash flow generation of the assets today, are modest. The additional capital required for this new development plan is relatively modest when compared to other global projects. Orion remains a valued partner with a significant balance sheet throughout our capital structure and a long-term perspective on value. We'll work with them and other partners we've been discussing prior to our arrival. We are very comfortable that we will be able to put a recapitalization plan together over the next three to six months that addresses the mismatch between our current obligations and the business's cash flow generation.

Do you feel that Orion is part of the solution here or are they part of the problem?

They're part of the solution. I don't view them as part of the problem. To be fair to everyone, these projects took longer to develop than initially expected. The company has a solid handle on the processes and timelines. The base metal success brought substantial exploration achievement through this portfolio, causing strategic direction changes over the past few years. Ultimately, the asset base quality is evident, along with a pipeline of development that might extend for the next 15 to 20 years, likely unmatched by few other companies. We must decide which projects to prioritize to allocate capital most effectively, which the plan accomplishes. There’s no criticism aimed at the previous strategy or how the balance sheet was structured; our focus now is to collaborate with our proposed debt providers on what this plan entails and work with them to reschedule this debt to create the value shareholders expected.

Just one more follow-up and I'll pass the line. You have a tremendous portfolio of projects, and that is a testament to the exploration successes there. Is one option asset sales a consideration, you obviously have five or more projects with significant value. Is that part of the strategic thinking—considering asset sales or are you going to try to get through this without selling assets? Thank you. I'll pass it.

That's a fair question. Look, the Board and management are open to anything that creates shareholder value. Part of the issue is that the market, whether it’s on the buy or sell-side, does not have a clear view of the value of each of these assets. By the end of the first quarter, as we publish the PAs, the value of these assets will become clearer. Each asset individually has a value much higher than our current market cap, but solid synergies exist among three underground mines, and Matt could elaborate on that if needed. These two open pit mines also create immense value, and we see so much opportunity in all five gold projects together. We believe that the recapitalization and additional capital required is quite modest, and at this point, we don't think a buyer could offer fair value that would make sense to shareholders in the medium to long term. We're taking a long-term perspective with this plan, not focused on the short term. We believe we can solve the balance sheet issue. I hope that answers your question. We'll open up to the next one if there are any.

Yes, sir. Thank you. The next question comes from the line of Bryce Adams from CIBC Capital Markets. Your line is now open. Please go ahead.

Thanks, Richard and team, for taking my questions. The first one is five mines by 2030; that's quite a strong goal to set. Was there consideration to simplifying the development plan and focusing on fewer projects to reduce financial needs?

I'll let Matt respond. While we talk about developing five mines, four of these require very low technical and financial commitments. So can you share a bit more about the first four before we reach Mineral Point in terms of what's required, and perhaps indicate the costs?

Absolutely. Thanks for the question, Bryce. When considering the three underground mines—Granite Creek, Archimedes, and Cove—I really view those as one mine in summation. There are three portal mines emerging from existing open pits. In Nevada, most open pits come with at least one portal mine. As for the simplification of construction and ramping up these three underground portal mines, that process is quite straightforward. I’m not underestimating the challenges involved, but developing three underground portal mines in Nevada is a typical process. So while it sounds expansive, I see it as one task. The subsequent task is the Granite Creek open pit, which was already an open pit heap leach facility. We are currently permitting the next stage, essentially pushing back the existing open pit facility and establishing a new heap leach plant. Although a significant task, it’s a standard occurrence in Nevada. Thus, out of the three underground mines, the Granite Creek open pit is where we are focused first, with Mineral Point being large, as we recognize the lengthy process needed for technical studies, permitting, and construction. By the time we approach the construction of Mineral Point, we will already have three underground mines in production and the Granite Creek open pit well advanced. That’s how we envision the timeline.

Just to add to Matt's points, Bryce, the three underground mines are portals out of existing pits, while the Granite Creek open pit is a brownfield site. This means that the capital intensity of all four projects is low to bring them into production in our new plan.

Got it. That’s helpful. Maybe as a follow-on to that, it’s a little hard to see from the slides and from my recollection from visiting the site two years ago, but do you foresee any interaction between those open pit heap leach projects and undergrounds, or are they all distinctly independent of each other?

That’s another great question. At Cove and Archimedes, there is no interaction between the portals and any open pit mining plans. At Granite Creek, you will need to reconstruct those portals as part of the open pit mine development. The two pits will be staged such that, upon finishing the first pit, we will develop new underground portals from that pit to intersect your existing underground development. This process is all explicit in the PEA, and while it adds a level of complexity, it's all very manageable.

Okay. Thanks. Looking forward to the PEAs next year. All the best. Thanks for taking the questions.

Thanks, Bryce.

Thank you. The next question comes from the line of John Tumazos. Your line is now open. Please go ahead.

Richard, it’s good to be acquainted again. Thank you for taking my question. Traditionally, mines are built or reopened one by one, harvesting cash flow from the first project and moving on to the second. If the market gives you less cash than you want or insists on some simplification, would you consider prioritizing the Granite Creek oxide pit or one of the three underground gold refractory mines to resume first? People might misunderstand your presentation, thinking that the company wants to do everything simultaneously and secure all cash capital upfront, which may be frightening for investors.

I appreciate that, John, and this was a lot of information to process. We are currently ramping up Granite Creek and expect it to be generating free cash flow in the second half of next year. We'll begin construction of Archimedes Underground (formerly Ruby Hill Deeps) next. Both of these underground mines will ramp up and start generating free cash flow before any construction occurs at Cove or the Granite Creek open pit. Additionally, as Ryan mentioned, the capital requirements for those placements are modest. Based on our current recapitalization plan, we don't believe we need substantial additional capital to implement this plan. We've been conservative internally regarding operating parameters, gold prices, etc., and we believe we have some cushion. We expect much of the capital required as part of this plan could come from a debt instrument that minimizes dilution to shareholders while maximizing share NAV. That is our focus moving forward. We aim to get our refinancing plan executed in the first quarter and present shareholders with a comprehensive plan to satisfy our cash flow requirements.

Thank you for that explanation, Richard, and good luck.

Thank you. The next question comes from the line of José Cánovas from Global Income. Your line is now open. Please go ahead.

Hi, many thanks for the presentation and for taking my questions. I have three questions. First, you have consumed around $26 million during the third quarter. What should you expect in cash consumption for the fourth quarter?

José, thank you. As you can see from our financial statements, Granite Creek Underground has been generating negative cash flow due to the dewatering issue. We expect to continue consuming capital during the fourth quarter. We’ve placed all discretionary expenditures on hold until we’re done with the refinancing. We are working with Ryan to defer the upcoming gold and silver deliveries due in December and January, and we expect sufficient cash flow to navigate through the first quarter for a smooth recapitalization of the balance sheet.

Perfect. My second question is regarding the recapitalization plan. Could you provide more specifics about what would be the ideal structure for you to announce during the first quarter of 2025?

It's too early to discuss specifics, José, but as outlined in the press release and MD&A, we intend to match our debt obligations with our ability to meet them. We understand what that should look like but need to work with Orion and others to finalize the structure. We're not there yet; we’re just exploring various options.

Got it. Thank you. My final question is about your current debt structure. Does the current debt correlate with the assets?

Yes, it does. Ryan or David, would you like to address that?

Yes, some of our debt commitments, such as the gold prepaid arrangement with Orion, have securities attached to them, as do the silver stream and the outstanding convertible debentures which are secured by the Ruby Hill project.

José, did that answer your question?

Yes, it does. Finally, please confirm that you're quite confident you will be able to reach a deal and recapitalize this by the first quarter of 2025.

That's correct. Our rationale is the asset base's quality, location, and the low capital required to execute this plan. Support exists from both current and potential new lenders for assisting in this recapitalization while providing the additional financing needed to realize the plan.

Perfect. Thank you.

Thank you. The next question comes from the line of an unidentified analyst. Your line is now open. Please go ahead.

Hello, I'm glad to hear there is a plan in place, but unfortunately, a lot of damage has been done to shareholders. I have two questions. Why did the team have a pending joint venture for a year? It was in finalization, but resulted in nothing. My other question is, did you have any potential M&A deals that you declined throughout 2023 and 2024?

Thank you, Jonathan. I'm sorry for the current share price dissatisfaction. Our focus now is on a solid asset base and executing a plan that will enhance share value over time. The state of our asset base and ongoing plan should elevate our share price even with dilution. Now, I'll turn to Matt or Ryan to comment on M&A.

Regarding potential M&A deals declined, we always review proposals for M&A activity. During the year, we assessed many but ultimately determined they did not meet our objectives for delivering and realizing asset value. Regarding the JV, we considered the focus on JV terms versus the free cash flow generation from the base metals versus our gold assets in the near-term and made a corporate decision on that direction.

I'll add that as the joint venture was active, the gold price environment shifted significantly. This influenced our economic assessment of the property in general, and the JV specifically.

Okay, well, I wish you the best of luck. Thank you.

Thank you, Jonathan.

Thank you. We have a follow-up question from Bryce Adams. Your line is now open. Please go ahead.

Thanks again. One bonus question: Are the comments around the carrying value and the going concern simply a continuation of previous management's language, or is there anything new in that?

I'm sorry, can I clarify?

Yes, there’s nothing new.

When analyzing our balance sheet, we're ramping up an asset consuming capital, and we ended the quarter with $20 million. Consequently, we need to restructure the balance sheet. We’re aware of the requirements under both Canadian and U.S. regulations, highlighting our need to act to assure investors that a status quo will not suffice.

Understood. Just wanted to verify if anything had changed.

Thank you. We have a follow-up question from José Cánovas. Your lines are now open. Please go ahead.

Thank you for the follow-up question. I’m wondering, though it’s early to discuss the recapitalization plan, is a debt-to-equity conversion on the table or is that a last resort?

Our preference is to aim for the least dilution possible while successfully restructuring the debt. We have a high-quality asset base in Nevada with considerable debt capacity, which we believe will limit any dilution. As shareholders, we aim to issue the least stock possible moving forward. Our goal is to minimize dilution by strategically leveraging the balance sheet and executing effectively. We don't see a need to consider converting debt to equity right now.

Great. Many thanks.

Thank you. The question comes from William Siegel. Your line is now open. Please go ahead.

This is Bill Siegel. My question relates to the toll milling agreement. I was under the impression that the toll milling agreement for 1,000 tons a day wouldn’t expire until the new autoclave or the existing autoclave had been refurbished. Can you comment on that?

Yes, thank you, Bill. The toll milling agreement for the autoclave has an initial period of three years, which expired in October. There's language in it regarding extending that agreement, and there are other scenarios that could present better options for processing autoclave material in Northern Nevada. We're pursuing various options and analyzing scenarios that will maximize value. The existing toll milling agreement for the roaster is a 10-year term, and we are in approximately the fourth year of that term. That is unaffected by today's discussions.

So in summary, do you perceive the expiration of the toll milling agreement as contributing significantly to risk for i-80?

While a risk, I'm confident we will identify a beneficial solution through partnerships. It is indeed a risk, but I am optimistic about reaching a mutual, advantageous agreement.

Bill, to add, currently, about 25% of Granite Creek’s production is impacted by toll milling; the remaining 75% is sourced from other streams, including heap leaching and an oxide agreement. Approximately 25% of production will be influenced over the next 12 months, but we are making progress in discussions for a solution.

Thanks for that clarification, Richard. If sulfide material is encountered, we would store it in a lined storage facility as per our permits, maintaining site compliance.

Thank you. No further questions have come through. I'd like to hand back the call to Richard Young for closing remarks. Please go ahead, sir.

In closing, I want to reiterate that we seek patience from our current shareholders. Please allow us an opportunity to complete these five PAs and convey the market value of these assets. We'll proceed with the recapitalization plan focusing on minimizing dilution. We believe we have the right team in place, particularly the new hires with extensive experience in debt restructuring that we will undertake. We boast a superb asset base and location with a strong technical team, believing we can create the next mid-tier gold producer in North America. We hope investors will be patient and supportive over the next six months as we solidify that vision for everyone. Thank you.

Thank you, sir. This concludes our conference call for today. Thank you, everyone, for participating. You may now disconnect.