Release Date: November 13, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Amex Exploration Inc (AMXEF, Financial) reported a robust internal rate of return (IRR) of 59.5% pretax and 40.2% after tax at a gold price of $2000 per ounce.
- The project has a low all-in sustaining cost of $807 per ounce, with the first five years even lower at $739 per ounce.
- The mine plan includes a combination of open pit and underground mining, optimizing high-grade material extraction in the first half of production.
- The processing plant is designed to be a standalone operation with a proven and standard flow sheet, ensuring reliability and efficiency.
- The project demonstrates strong financial metrics with a payback period of 1.5 years pretax and 1.8 years after tax, highlighting quick capital recovery.
Negative Points
- The project requires a significant initial capital expenditure (CapEx) of $229 million Canadian, which could pose financial challenges.
- There is a 1.5% royalty on the project, which could impact overall profitability.
- The project is sensitive to fluctuations in the Canadian dollar and US dollar exchange rate, which could affect financial outcomes.
- The high-grade zones, while promising, still require further drilling to fully realize their potential, indicating ongoing exploration costs.
- Permitting and environmental approvals are still in progress, which could delay project timelines and add regulatory risks.
Q & A Highlights
Q: What Canadian dollar to US dollar exchange rate was assumed in the PEA?
A: Victor Cantore, President & CEO: We assumed a rate of $1.35, staying conservative, though it's currently around $1.39. We did not conduct a sensitivity analysis on the AISC and NPV regarding exchange rate fluctuations.
Q: Which firm completed the PEA study?
A: Jonathan Gagne, VP Project Development: Multiple consultants were involved. The mining group was Mine for all mining and economic aspects, BBA for processing, Alpha for infrastructure, and GoldMinds for the resource estimate.
Q: What is the current cash balance, and are there plans to raise additional funds for drilling?
A: Victor Cantore, President & CEO: We have enough funds to last until the end of 2025, with a current cash balance of $13.5 million in flow-through and $6.5 million recently raised in hard dollars.
Q: Is there a royalty on the project?
A: Victor Cantore, President & CEO: Yes, there is a 1.5% royalty on the project.
Q: Do you plan to go into production or sell the project?
A: Victor Cantore, President & CEO: Our focus is on de-risking the project and maximizing shareholder value. The decision will depend on what is best for shareholders.
Q: When will the full PEA report be available?
A: Aaron Stone, VP Exploration: The full report will be filed on SEDAR within the next 45 days, likely before the end of the year.
Q: Are the Denise and high-grade zones still open at depth?
A: Aaron Stone, VP Exploration: Yes, both zones remain open at depth. The deepest drill hole intercepted high-grade mineralization at 1.6 kilometers.
Q: What is the total CapEx for the ramp infrastructure?
A: Jonathan Gagne, VP Project Development: The CapEx for the ramp is included in the $229 million Canadian total, with specific costs for the ramp portion around $20 million.
Q: What is the plan for the VMS deposit?
A: Victor Cantore, President & CEO: The focus is on establishing a standalone gold mine. The VMS deposit, located four kilometers east, will be explored separately in the future.
Q: How are relations with the First Nation, and do you have all necessary permits?
A: Victor Cantore, President & CEO: Relations with the First Nation and the community are very good. We have permits for drilling and exploration, and are progressing with environmental permitting.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
