Kitsault MRE Update

0:00 as folks are filtering into the room quite quickly, I will say good morning, good afternoon, or good evening, depending on where in the world you're signing in from today. I've got with me also in Beaver Creek, Colorado, Rick Vanun is a CEO of Kango Silver and Gold, Sean Kung, the company's president, and on site, Dave Lurmer, the company's rockstar and VP exploration, to run through the very exciting mineral resource estimate at the Kalt Valley project in British Columbia. Gentlemen, how's everything going?

0:25 >> Yeah, it's good. You know, Beaver Creek, this time of year is always beautiful. fall colors, nice crisp air, not a better place to be and everybody's excited. So, >> awesome. No, glad to hear it. here's how today's gonna work just for the folks in the room. I'm gonna do some really quick housekeeping, then we'll we'll get into the protein fast, I promise. I'm going to ask the gentlemen here some questions just based on the press release. but this is an open forum. Please do use the chat button at the bottom of the screen. I know several of you have already sent questions in over email. we'll get to those once I'm done prepared questions. but then I'll try to get to as many as I can in the chat. get them in early and I'll I'll likely get to them, but if for whatever reason I can't get to your question. I'll make sure the Contango Silver and Gold team gets them and is able to get back to you quickly using either your phone number or email found at registration. the only other thing I'll say is this event is being recorded and will be available for replay in the late afternoon Eastern time. it'll pop right in your inbox. Will also be available on Six's YouTube channel. But okay, let's get into the good stuff. I was very excited to read this press release. Rick, I'm going to start with you and then Sean, I want to kind of hear your perspective.

1:23 The headline number obviously a very exciting 93% increase in indicated resources to just shy of 90 million ounces silver equivalent. so before we get into how you got there which which I do want to do give us the big picture. What does this estimate tell investors about what contango actually owns in the golden triangle right now? >> A lot of silver. you know we when we combined companies we actually got booted out of the the Zilj and we we were not happy about that and so this is kind of a statement piece that says hey guys this is the largest silver resource in Canada don't forget about us >> and it's highrade silver it's you know it's it's close to 10 it's over 10 ounces of silver equivalent per ton and that equivalent is made up of gold it's not it's it's only 10% of the of the equivalent number is made up of base metals. So, this is a this is a precious metals silverbiased big high-grade silver deposit. So, it's like hey, we're coming we're coming back on the subject.

2:25 >> Exciting. Sean, I'll throw it to you. Obviously, you're very very familiar with the project. for your perspective on this, MA. >> Yeah. look, we're the project is located in what they call the Golden Triangle. there's been a lot of silver discovered up in the Golden Triangle and there's been a lot of silver produced up in the Golden Triangle. And so, you know, we've identified the largest silver resource in Canada, primary silver. Romeo, you highlighted the big increase in the indicated category and you expressed the silver equivalent. If we just look at the silver resource, we're talking 83 million ounces of high-grade primary 300 gram per ton silver and a million ounces of gold. so you know what this gives content is it gives us a high degree of confidence in you know a very very unique globally unique project and again and one thing I want to highlight here is we've got one of the largest land packages in that golden triangle and this resource only represents you know maybe 3% of that entire land package.

3:39 These deposits are open. you know, they've they've really, except for one exception, have not been drilled to a greater depth than 300 vertical meters. So, we're open at depth. We're open along strike. And the company this year in 2026 is in the midst of a 53,000 meter drill program that has not been incorporated into this estimate, but will be incorporated into the next one. And the last thing I'll say is when a company puts out a resource estimate, you've got to look at the data.

4:11 This resource estimate is built on almost half a million meters of drilling and almost 2,000 drill holes. So the amount of confidence we have in this resource is very high. >> Oh, appreciate that very much and thanks for both of you giving your perspective. But Dave, with respect to Sean and Rick, you are the star of today's show to some degree. you're the guy who signed off on these numbers. So, I'd love to start with the the language in the in the ME indicated versus inferred.

4:37 Obviously, we we talk about a lot on these kind of calls. In plain English, and keeping in mind, as far as I know, Rick has threatened to cut you off if you get too technical. what does it mean that 90 million ounces now sit in the indicated category? >> Yeah. Yeah. Plain English, you know, the difference is is basically indicated and inferred. It's just a level of confidence that you have in that estimate. If you start on the lower side, you know, the inferred resource, it's supported by drilling geologic evidence, but the drill spacing is generally a little wider. there's a little more uncertainty in that continuity, but that's how you build these things up. You believe the mineralization is there, but additional drilling is needed to tighten that geology and and the continuity through that. You take that to the next higher category, that indicated resource category. it has closer spacing stronger geological support and it gives you greater confidence that the amount the grade the shape and the continuity of that mineralization is there.

5:28 additionally it's at that indicated category is considered reliable enough just to start your meaningful engineering and economic evaluations at this level which we're moving forward to in the initial assessment. So when you look at that 90 million silver equivalent ounces in that indicated category that's a large portion of the project that is now defined at that higher level that that technical confidence that we have gives you a strong foundation of evaluating that future potential mining approaches processing options and and those different deposits on how they start to fit together in the development plan.

6:03 I will have to say at the end of the day this is a mineral resource. I got to throw on my QP hat. This is not a reserve. doesn't demonstrate economic viability, but it is significant improvements, you know, at this scale and confidence of the resource. it can help us maneuver into the next phase of the project. but without getting too too much more technical, I'll kind of leave it there. But I I could dive all day if we want on geostatistics and math on this, but I'll leave it there for any follow-up questions on it.

6:29 >> I I might have to do a separate section with just you, me, and the nerds in the audience for one of those. but I do have one question because a couple of sharp investors did ask over email. Inferred ounces did come down about 25% from the 2023 numbers. Walk us through why a smaller inferred inventory coming out of this remodel is a sign the estimate got better. Not that the ounces, you know, went somewhere. >> Nope. Absolutely fair question. That's an important question. I would caveat that by saying the first thing that I think is important is the objective of any mineral resource estimate is not to maximize your number of ounces but it's to produce the most accurate defensible representation of that mineralization supported by the available drilling. Now a lot of available drilling that went into this and the significant part of this you know reduction of the inferred ounces reflects a successful conversion from from the inferred into the indicated category. looking at that indicated silver equivalence, you know, we increased that by approximately 43 million ounces while the inferred decreased by 22 million ounces.

7:31 again, it's not a one for one conversion, but the overall movement into that that larger higher confidence resource is an extreme success for us. We also looked at the remodeling. When we talk about the data, the amount of data that went into this, we were able to apply tighter geological controls, better data, better understanding of the geology that's sitting in that mineralized bodies and we rebuilt these mineralized domains u and all the data that supports it behind it. In some areas, this brought the mineralization into the better defined shapes. And in other areas, this material that was previously extrapolated from the less drilling was a little too broad and it was no longer supported in this estimate. So the ounces didn't simply disappear. some of them moved to that higher confidence indicated category while others were refined removed from the reported inventory because the new model is what we consider more disciplined. and this is what a good mineral resource model does in an update. It should reflect the data that supports it and then rather than just preserving ounces and throwing everything in there, it maintains that that discipline approach of what's there.

8:38 >> Awesome. Appreciate it. one thing I wanted to ask, I'll address what I guess I'll call the elephant in the room. Perhaps not an a African elephant, but a modestsized Thai elephant. which is the timing of this Emory being released. I know I'd rather we discuss it here than have it take off in the comment section. The update landed a few months later than originally guided. Just curious, Rick, throw it to you first. Just from your perspective, what what happened there? Yeah, and I I'll let Dave expand on this, but there's two components to completing a mineral resource estimates just, you know, getting all the data coralled. And I think that was a bigger job than we anticipated because there are you know like nine individual deposits and they were in an old you know an older resource that was in older software and to transform that into you know modern leaprog system took longer than expected. that's one element and then the other element is just you know we're at the mercy of our QPS and and our other outside experts and they're busy and there's a lot of money being thrown at the exploration business in general and that just you know having to rely on a on a third party just you have to work at their time schedule.

9:56 So that's those are the two components that I think led to the longer time and they even probably give a you know some of the nitty >> yeah diving in that on the technical side you know it's not just an exercise but just adding new drill holes you know hitting F1 that I call it and letting the model cycle through there you know we look at most mineral resource updates that are out there as Rick kind of said they involve maybe one or two deposits this this one was an eight deposit upload each with its own kind of unique geology u mineralization you know down in there in historical data and modeling requirements. while we updated the detailed geology the interpretations we also migrated this into leaprog you know kind of the more modern technical aspects that we'll talk about all the mineralization domains are put in there inputs into the resource edge estimates but the largest timing factor that contributed to this was our specialist contractor. We needed to be able to set up the deposits and set up everything just right so we could factor in the in the data into it and it was just getting the base data set up was was very timeconuming. The guy is busy.

11:02 it's it's busy out there. However, at the end of the day the benefit for this now for us is that we have this modern integrated geological resource model that really is designed you know for for efficiency in the future. as I've talked about it in in some of our other webinars, you know, we're looking at the technology and how we bring our data in and and get to this neartime solution. now that we have our models set up and our databases set up so we can run these models, we get this almost neartime resolution. This drilling comes in, factors in through the logging, gets populated into our database, and that gets pushed into our modeling stuff. So we can take a a quicker look of what each drill hole is doing to that resource almost in a near-time basis going forward, which ultimately will help guide our drilling as we go. at the end of the day, you know, with this next resource update, we'll still have to go through the formal resource and review, you know, the validation and the QP review of this, but this gives us a closer dedicated near-time resolution on what the models, how the models are behaving while we're drilling. So, I'm extremely excited about that. And while the update took a little longer, the work at has left us in such a strong position on a technical foundation that will be more efficient in the future. and these resource updates will be able to to to flow a lot smoother in the future.

12:22 >> No, appreciate that both of you. just some extra context is helpful. Shauna, I want to throw it to you for for a bit because I know you spent the better part of a decade building around this district before combining with Contango. Now, you know, you've got a good view at the first full remodel of the combined asset. Does this estimate meet the expectations you had when you agreed to put these companies together? >> it it does and and again, the you know, you've heard Dave on the call and and Rick and this is exactly what the Kitsalt Valley needed. It needed to be in the hands of a team that was looking to develop the project. And you know, I think as we look ahead at 2027, in addition to another estimate, we're looking ahead at an economic study, we're looking at road improvements, and we're looking to get the project back into production. You know, this was a DSO mine. It was a very famous mine, you know, Canada's third largest primary silver mine. you know, not only are the metal prices at a point where, you know, I think it's going to be very economic to move the project back into production, but we we now have enough size and scale. And this has been a process that started initially with the consolidation of the district, you know, bringing the home stake project into the Kitsel Valley and and then consolidating the heck land package that added 60,000 hectares of ground to giving us 100,000 hectares. And so we we've successfully consolidated you know everything from you know just at south of Red Mountain down to Alisarmm and yeah this and then again going back to your question around the merger that's the cash flow. So in addition to the technical expertise and the leadership here technically having that cash flow to fund those road improvements and to move the project back into production.

14:23 >> Awesome. one thing I wanted to note, as note as much as as asking a question, Sean, is the estimate was around at $53 silver and the metal is obviously spent most if not all the year trading well above that, including today. So, high-grade primary silver districts for people in the audience are genuinely very rare animals. This is a very unusual thing to to take place. So, from where you sit, what is this silver market we're seeing now and in my opinion likely to see continue in the future due to the strategic value of an asset like Kitsol?

14:54 Yeah, I I think you know Rick Rick said it earlier in his opening remarks about the company being pushed out of the SLJ. You know you know the last couple of news articles that's come out of contango have been coming out of the Kitsel Valley. You know the the big drill results which we had a a 10,000 gram meter interval. You know 165 grams of silver over 55 meters. you know that those drill results in addition to this mineral resource estimate is highlighting the silver in in the in the business. And again for investors there are 10 primary silver producers to choose from. And if you go through the list some of those companies only derive you know 28% of their revenue from silver. So as we look into the future, as we look out, you know, three, four years and as we look to be a 5 million ounce peranom silver producer, if if we take Romeo $50 and you know, if we assume, you know, maybe our costs are going to be somewhere around $20 an ounce, you know, that's $30 million of free cash flow for every million ounces we produce. Now if you want to take spot silver or you take where silver was trading in Q1, you know that's a very very robust project. And then what's complemented here is our ambitions for 200,000 ounces of gold production to complement the 5 million ounces of silver. It's a it's a very very robust business. And again, we're not dressing up a zinc mine or a lead mine you know with you know 30% silver credits here. 90% of the economics in the kits valley are precious metals and wi within those precious metals it's about 6040 silver to gold.

16:42 >> Kango really is kind of leveraged in every direction for a silver and gold bug which I I am one as a degenerate myself. one thing I want to talk about Dave and Sean already referenced this but the part that jumped out at me reading the release is none of the 2026 drilling 50,000 meters of it is in these numbers at all. so I guess my question is for people reading this MRE, what has this year's program been targeting and where could it move the needle when it rolls into the 27 update that we're expecting?

17:11 >> Yep, absolutely. It's an important point to look at because we we have to have a cut off date when you do a mineral resource estimate. So we had that cut off date early in the year. that's the data you use, you process that and that's what what gets our mineral resource estimate. the 2026 program, you know, with that 50,000 meters in excess obviously is not included in this, but the program focused on infill drilling to tighten up areas that we could kind of see through the MRE, but you can see before that step out drilling around the known deposits and testing several early stage targets through there. We look at some of our our press releases that we've had already this year at Torbert Northstar.

17:47 the drilling has confirmed mineralization and and some gaps between the two deposits. You know, at Wolf, we tested the the extensions of known mineralization, some of the deeper parts, plugs and holes in the middle of of Wolf, but also it's that newly recognized Torbit style mineralization that we've highlighted in that 4070 zone in previous, press releases. at Home State Maine and Homestake Silver, you know, the focus was really on kind of that gold rich centers of some of those. Can you pull out some of the gold rich centers on that area? When we combine all this together, the 2026 drilling broadly where we start to view the Dolly Varden southern area as more of an integrated mineralized complex instead of ind individual deposits, we're now pushing that drilling to show a little more of the continuity that geology structures through there and looking at this area as more of a complex than individual deposits that are sitting there. And this 2026 drilling should really help us better understand how these systems relate together and ultimately how we need to evaluate these in the future going forward. additionally we've overlaying a little additional geomedical work on here. we want to better understand the mineralization styles the potential processing characteristics through each of these.

18:59 but together the drilling, the geologic model and this network is going to allow us to tighten up our resource models which again we have a great foundation for this. So we'll be able to spin this around quickly in the next update and then tie into our future studies going forward of how we want to maneuver these as a complex and deposits going forward. >> Awesome. Thanks Dave. Appreciate that. I want to talk to Sean Rick you guys for a second about community relations.

19:24 Sean, I'll start with you. I know this project sits on Niska treaty lands the first modern treaty as I understand it in British Columbia. I know Dolly Varden worked alongside the nation for years obviously before the combination of the companies. how does that relationship shape the way KALD advances from here? >> Yeah, I was I was really blessed at Dolly we had directors and consultants that had had strong ties to the community over generations you know multiple generations. So the I inherited you know I was welcomed with you know really warm and greeting hands from Mishka and and that's not really unique because both Nishka and Tlan have had about a hundredyear history with mining companies you know and Rick can speak to his experience in in the district that goes back 20 years as well. but how my relationship evolved and and really you know the relationship that the Kitsel Valley project has with Nishka is is just a trusted partnership. You know we u we were part we are part of an alliance called the BC regional mining alliance where you know I'm I'm a director of the organization. So that's a partnership with government. It's a partnership with ISKA. It's a partnership with with companies like Contango and you know we work together to to inform each other as we're progressing. We really actually the organization was started to promote that BC is open for business. U mining is such a big part of the province. So that relationship for me has evolved.

20:58 and you know, whether it's private businesses that I've helped Nishka residents to start like Phil Clayton with Savage Pads or companies like Nations Royalty. So that's created Canada's largest indigenous owned public company. so the relationship is strong. They are supportive from the community level, grassroots community level to the executive. so very very strong and you know look the the Nishka are doing really big things in the province with LNG with ports and and mining has been a rich part of their history.

21:36 >> I appreciate that Sean and Rick u as Sean intimated you obviously have a lot of experience working in the region and with indigenous groups generally so curious to hear your perspective as well. Yeah, I mean to me it's all about the what mining gives back to the community is is is is good paying jobs not just jobs but jobs and training and opportunities to to take those skill sets frankly anywhere in the world. I remember in Alaska we at one of our projects guy started out as a as a driller's helper became the driller and then he he gave me a call from Chile and he was just having a ball working on working in Chile and he was he was going to come back home. But it so it it's the jobs are they're good paying jobs. They're local jobs. people in who live in Vancouver and Toronto and in in the cities don't really understand that that you know the the rural communities need need jobs. They're not not everybody's going to come to Vancouver and Toronto. So that's something that I think in you know in the BC context that's important for people to understand. On the flip side, the First Nations in the case of the Mishka and the Talan, they have their, you know, they have their businesses and so it's it's not hard for us to engage those businesses. They work hard. They they know the terrain. They know the climate. They they're it's it's their home. So they're, you know, they're not somebody from the south who comes up and goes, "Oh it's cold up here."

23:08 Yeah, no kidding. >> No, I appreciate that. It's good to know that the the communities have obviously very very long history with with mining. Rick, I wanted to talk about building what what what comes next because I know the valley has obviously as we've talked about today various times mining history including direct shipping ore operations. there's also road and power in the region already. but generally if you could sum it up what's there today and what are you planning to upgrade as part of this project? Yeah.

23:36 So, it's going to start with the the you know, incorporating the 50,000 meters of drilling that we did this year into the MRE. As as as Dave explained, you know, we've got the the model set up now, so it will go a lot faster. And I'm going to hold him to this by the way. We're all on camera here. I got witnesses. So, we, you know, we'll get the M out and then that's going to form the basis to complete an initial assessment or in Canadian Parliament, the preliminary economic assessment, PEA. that's going to give us a a guide to how we're thinking about developing this district and we know there's two centers of gravity of the district the silver rich part of the district which is Torbert Northstar Dolly Garden Wolf starting to see that connectivity between Dolly between Torbert and Northstar that's important from a mining standpoint because rather than having two tunnels I can have one and now this 470 zone which is kind of starting to connect Wolf with with the other center of gravity here at Torbert and Northstar that really makes the whole thing come together. So that's what's going to be incorporated in into the initial assessment. That'll be later in in 2027.

24:44 and then obviously fitting fitting the home state part of the district into that as well, which is you know it's 5 kilometers north. It's separate. By the way, we haven't really drilled a lot between the two systems. So I'm pretty sure it's not dead there, but you know, more work to do there. But so it's an exciting stepwise. and so what it'll do is it'll give analysts and and investors a metric of saying here's what we think the value of this thing. We're it's going to have an NPV and an IRR and with this DSO model we think it's going to look really really good. So, that starts to, you know, form what the future looks like and and it's a it's a d-risking exercise in getting us to demonstrate to the market that, okay, we're, you know, we're at 60,000 ounces of production out of Mono, but we're going to get to 200,000 ounces of gold and 5 million ounces of silver. Here's the path and this is the kitsaw portion of the path.

25:41 >> No, I think that's great. Thank you. And certainly excited to see what what is between the zones. So, looking forward to more information there. but this leads into a question. every underground silver story gets eventually. I've had three texts about it since this event started. Not lying. It's already in the comments. It's been emailed in. People want to talk about the mill. so Rick, to the best of your ability, where's the mill? >> Yeah. So, I mean, we we we've said this before, working on a number of opportunities. we're we're not ready to talk about them yet. We're under confidentiality agreements, so we can't really talk about them. but I'm confident we're going to find the right solution to to for processing both Kitsalt and Johnson track and and one of those solutions might be permitting sort of building our own mill on an already permitted site. So those are all things that we're looking at.

26:28 We're not afraid of of building something. we just don't want to spend 10 years permitting it. That's the that's the that's the criteria. So, you know, we we can we can custom build a facility that works for all the things that we need it to do so long as it's we don't need to spend 10 years permitting it. So, that's the that's the important part of the criteria and what we're looking at these different options and evaluating.

26:53 >> Avoiding a decade is always nice in mining. so the we we've already gone over the schedule, but I think it's good to reiterate just once for for folks in the room. It's always good to say this kind of thing twice. the release lays out the two-stage roadmap. The initial assessment targeted for the first half of 27, then that multi-year push that you talked about towards prefees, but for investors in the room trying to actually mark their calendars, and I'm sure some of them do. I know I do.

27:17 what's the path from today's estimate to an actual mining study look like? It's as far as dates are in your head right now. I'd say first half of the year we'll have the resource the updated a new updated MRE and then we'll initiate the the study initial assessment study and that'll be completed before the end of the year. That's our objective. >> Great. Appreciate it. if you'll both indulge me. This is Sean and Rick. Dave I got some questions for you from the chat. I'd like to crystal ball gaze for a moment. So please please do indulge with me. the release uses the phrase one of the premier primary silver minds in the golden triangle. Obviously impressive claim for a neighborhood with some some pretty big names. I'd love if you could paint a picture for us if this plan works exactly as all of us in this room intend. What is Kital Valley five years from now? So looking pretty far into the future.

28:08 >> what is Kital Valley 5 years into the future? It's it's a district that is producing you know 5 million ounces of silver a million excuse me 100,000 ounces of gold. but I I think the key here is the ongoing exploration. that gap between homestake silver and wolf is about five kilometers. there is a paradicity within you know Rick this was a comment you know we we met around this time last year as we were thinking about putting the businesses together and you said something to me that really stuck.

28:49 I was focused on the paradicity of our distin distinct district right along our 15 kilometer trend. That paradicity is playing out on a much bigger scale as you pointed out a year ago. So the point here is there's been 150 million ounces of gold and 1.2 billion ounces of silver discovered outside of our property. We're in the southern end of that belt that's underexplored. And so when I look out five years you know, we have restored the district to, you know, where it was in the 1940s where for a decade long this was Canada's third largest primary silver mine. I think it'll be number one in the country for primary silver mines. You'll have the gold, but what really excites me is I'd love to see a lot of exploration drill rigs, you know, simultaneously out there drilling out this district, you know, continuing to feed it.

29:47 >> Awesome. Awesome. And Rick, I'll throw it to you for the same crystal ball gazer of a question. Five years is the goal. >> Yeah, I think we'll I in five years, I think we'll be thinking about producing 10 million ounces of silver. and I think I think we'll be successful in in exploring this the part of the property and this is still a very small part of the whole property, right? But just that that five kilometers between between Wolf and and Homestake Silver, that's that's that's where we're going to focus a lot of it.

30:17 There's a whole we keep going out and finding new things with the exploration team that that's out on the ground doing you know just reconnaissance work on a very large property. So yeah, I don't know what we're going to find over there but that's that's kind of gravy. we've got a lot of information in this structural corridor between Homestake and and Dolly Varden and we call it Dolly Varden area and the Homestake area. So just to distinguish the two, but you know we'll have we'll have the road infrastructure completed by then. we'll have we'll have selected the mill site and we'll have it'll be built and operating and it's going to be set up to handle all the all the different types of war that we're seeing. there's there's a variety of them, but they're all going to require flotation and sanitation. So that's the that's what we envision building and and having available not just for the things we have at Kitsel but John's a track as well. So >> and then that's the point I was going to make Romeo that represents 25% of the company you know that represents one of a total of four districts. So you know everything we just pointed out there should justify our current valuation. You should really multiply that by four to incorporate Johnson Trap, Lucky Shot, and and all the other ground that we have, including Mono and the many other districts that some of which we don't focus on and talk about because, you know, we we're focused and we've been disciplined on on how we're moving our portfolio forward.

31:52 >> No, appreciate it very much and thank you for letting me run through my questions. I'm going to do a combination of the live chat and then the email because a lot of questions came in, some of which we've covered. but if you feel I haven't gotten to it by the end of today's event, please do harass me in the comments. I'll try to get to as many as I can. First one I'll I'll throw to Dave. Actually, it's from Eric in the chat. Wants to know what areas were targeted for 2026 drilling and wants to know how many meters per area if you've got napkin math.

32:16 >> Yep. Off the top of my head. I'd have to look. There'll be a press release that divides up the the meters by area, but I I can tell you we basically targeted all of our prime areas in 2026. I mean, everywhere in the Dolly Barton region south. looking at all the little gaps holes in there where we could update the model seen through everywhere between Torbert, Northstar, Wolf, that 4070 area. All those were targeted again even in in the northern region in the home state step offs and home state main trying to connect some of the geological gaps in there and also testing some areas in between there. they were all tested this year.

32:52 >> Oh, awesome. A wide spread and a wide net to hit it hard and and the team's doing awesome out there. I mean, I'm just so phenomenally impressed with the executing team out there, our geologists, the drillers out there. Being able to execute this long safely with that production is just phenomenal. >> Yeah. I just point out we we had planned to drill 40,000 meters of drilling. And these guys have done such a awesome job that we're getting probably close to over 53,000 drilling. That's that's impressive. And we've done it safely and we've done it under budget.

33:22 >> You don't often see a 25% better than expected for drilling numbers. So, I've been folks in the audience that that's rarer than you might think. one thing I wanted to throw to you, Rick, there a couple questions about this and understanding you personally don't have the ability to open the straight of Hormuz yourself as much as I'm sure you'd like to. how is diesel price affecting silver and gold operations for contango and how long do you personally see diesel price up and rising for?

33:44 >> Yeah, it's a great question and it it's very on point. I mean, you know, clearly if if we're using a DSO model and so transportation is a significant part of the of that solution. I'll say for for Mono, we used a $100 barrel based oil diesel price for for pricing. So to date, we haven't really seen anything different from what it was in what was incorporated into the feasibility in terms of costs. Now I'll say we are seeing a significant that between this year and earlier this year, we're you know we're seeing diesel prices in at the pump or 650 or so in Fairbanks.

34:20 So, I I think we're going to see a creep upwards, in our transportation costs significantly. And, you know, because on the flip side, as a DSO mine, we don't have a lot of, we don't have a lot of cost of diesel uses at the mine site because we're not running big power plants. we're using grid power at Fort Knox. So, that's a bit of the offset. So, each of these projects is going to be a little little different.

34:47 So if we look at Johnson track, sorry, we look at Luxot for example, goes to Fort Knox, it goes on the train. So that's a dieselbased fuel. So it's going to be a little more expensive, but the train is, you know, a third the cost of of trucking. So I think we're still we're going to see cost creep. There's no question about that. I don't see that situation straightening itself out anytime soon. so I think we'll just incorporate that into our our guidance going forward. and but I don't think it's going to be a a dramatic increase in our overall and all in sustaining costs.

35:27 >> Great. Appreciate it. one just comment that came in over email during the event from a somebody who says they've been heavily invested for two years. Just says, "You guys check all the boxes. Good luck, but I don't think you'll need it." That was cute. So, I'll throw that out there. one person wants to know. one person wants to know, we've touched on this, but just to put it to you plainly, when do you think the road will be completed from Alice Arman closer to drill sites?

35:49 >> So, that's something we actually permitted this year. I think there's still permitting aspects of it, but we'll we expect to have the permitting done in time to build that, start building that road. it goes all the way up to Wolf. there's some gnarly parts of it, but but that's something we'll get built substantially built next year. What I mean, just to be clear on that, to support exploration. we're not looking to build it to support mining operations yet, but that that's that'll be a future expansion.

36:21 >> Great. Appreciate it. Richard from the chat wants to know, did you acquire all the underlying crown grants on the Kitsalt property? >> No, there's there's other bits and pieces throughout the Kitsalt property. I think I think Sean consolidated the the best parts and I think there are other things that are you know down the road might be interesting to come by but you know it's it's about valuation and and for us we've got a lot on our plate. We're we're plenty busy doing what we do and we've got great ground. you know we we want to stay focused. I think you know Sean mentioned that earlier. We're we're that's part of the reason we were able to get 50 thou 3,000 meters of drilling out of a 40,000 meter program is because we stay focused and we're gonna we're going to keep that that strategy.

37:07 >> Great. I got two questions that aren't a little off topic but still on contango's projects. one person wants to know what's up next at Lucky Shot. What should people mark in their calendars that project? >> Yeah. well Dave can never get away from doing MREs. So, that's what's next up for Lucky Shot. we we're still drilling, so there's still a lot a lot of drilling to do. I think we'll be drilling probably through, I don't know, Februaryish, something like that.

37:36 and then, you know, then it's up to the labs, couple of months for the labs to get the assays back. So, I'd say I would have liked to said first half or sorry, first quarter, but it's probably more like a first half, but you know, not late in the first half. I'm hoping we get all the assays back and as as Dave explained, you know, we we have the models all set up. So, it is just kind of dropping the new drill holes with assays and and adjusting the geology with the with the the new information.

38:04 and then with that information, then we're going to do a feasibility study. And I I'll say it's a DSO feasibility. I I refer to it as feasibility light because it's a mine plan, a transportation plan which is Sean is comp is says often is just putting rocks in a box and putting them you know hauling them to Fort Knox was that was the the moniker. So that's not challenging and u and then and then working out a deal with Fort Knox and they're they're they're they're eager to to receive this. They have a big mill. They have a big hungry mill.

38:38 We have Highgrade. So high grade always displaces low grade. So yeah so that's a next year the the the initial assessment will be completed by the end of the year. That's our objective. but again that's a that's sorry that's a feasibility study. Misspoke there. That's a feasibility study. and then we just start putting the development work in place. So that's that'll be a 28 timeline and and now we can start shipping or it'll be a ramp up because the development work will take time to get all the all the underground development work in place. But certainly by the end of 2028 we should be in production and I'd say 29 will be a full year of production and we're we're targeting 40 to 50,000 ounces of annual production.

39:21 We're targeting for the ME 400 to 500,000 ounces of resource. And then with our feasibility study, we'll subset and this is these are approximate numbers and and they're definitely forward-looking statements. You know, a quarter million ounces out of the four or 500,000 ounces that'll be reserve. They'll be well enough defined, measured, indicated to to demonstrate reserve quality. And that's and then we just every year we keep changing some of that resource into reserve. More drilling, more dense drilling, moving along. And but then you've got a a fiveyear m fiveyear rolling mine plan is producing 50,000 ounces of gold a year.

39:59 And I think over $und00 million of free cash flow at today's gold prices. >> Perfect. And speaking of production and cash flow, somebody wanted to know projected cash flow from MOO in 2027. so 2027's the banner year. This you know we always said in the mine plan 26 was going to be lean fewer ounces and at higher cost. We're doing a lot of stripping as we we transition from now the north pit to the main pit or south pit. so 27 we're we're guiding towards 75 to 80,000 ounces of production. This and this is our share of production. and cash costs. The the Kin Ross guidance is currently 1,300, but as you were talking about diesel prices and and things like that, we're going to probably guide more to like a $15 $1,600 level. we'll get as we get more information, we'll we'll we'll provide more guidance clarity on that, but from where we're sitting right now, that's kind of where we're seeing the all- in sustain or sorry, the the cash costs. And so, you know, today's gold price and we're unhedged now. So, you know, the hedge hedge demon's gone and, so all that goes to our our bottom line to advance all of our other projects. So, that should be in the neighborhood of today's gold price in the neighborhood of $200 million free cash flow.

41:20 >> Awesome. And I personally tend to believe that next year we'll see friendlier gold prices, but that's up for everybody viewing to decide. Dave, I got a question for you from the chat. Back to Kitsalt. Bruce wants to know, "What's the tallium, one of my favorite rare metals, content of the deposit?" Oh yes, I toarm is one of my favorite ones. it's pretty low when you look at it with respect to a deposit scale. I mean we look at just about every element, you know, not only at Dolly Garden, Homestake, Johnson, Lucky Shot, we we look at them all of 118 elements out there on the periodic table. And I might nerd out here slightly because I'm a geochemical super wizard and I really like this stuff. But out of those, you know, we generally do that 40 element, you know, package of it all. So, we're really casting that net out there and really trying to find those elements, you know, that fit in the deposit that potentially could be economic, you know, and I'll say that while they look initially pretty low, right now on a deposit scale, part of our next steps, those geometrical tests that that we're going to be doing is going to be about speciation. Are there some elements out there that could be concentrated and be economic? Those will be part of our studies going forward. So, I I would say, hey, let's ask this question again in a year and I'll have a better better understanding.

42:32 What's it at right now? >> Appreciate it. and Dave, I'll go to you next. this is to to sort of wrap up. So, this is an opportunity for everybody to give their last questions in the comments. I think I've covered everything through both my question and yours, but please let me know if I haven't. I do want to close on Kitsel because I know the hundreds of people in the room here today, for many of them, it's it's their their favorite project in the Contango suite. What are you most excited about for the valley for the rest of this year?

42:58 >> for me, for this year, I want to see the rest of those drill results. I want to see the data come in. I want to put them in this model. I want to show that the work that we did the team on the ground be able to do that 50,000 meters drilling getting put in there. All the support assets pulling together to get dumped into this model that we have put all this hard work into which you know we had lost some sleep over, but that's good. I want to be able to show what this is going forward, you know, once we get all this data going forward.

43:24 That's what I'm most excited about in the next couple months. >> Awesome. Appreciate. And Rick and Sean, I know Dave is an impossible act to follow, but I'll give you guys the same question. What are you most excited about for the end of the year at the Valley? Whoever would like to start. >> Sorry, just say the last part of the question. This the last sentence. >> Just what are you most excited about in Kits Valley for the rest of the year?

43:44 >> Well, for me, it's it goes beyond the Kits Valley. I'm sorry. I know the viewers might be tuning in for Kitsel Valley, but again, like I look at this from an investor standpoint. You know, we're here, we're calling in from Beaver Creek. You know, we've got probably 60 meetings on the books here, another 40 down at Denver. We're meeting with 100 people on books and probably 100 more in all the other events. And you know, when I think about these these 200 people that we're sitting in front of and the 2,000 choices they have when it comes to companies in Australia, you know, all throughout the world in the mining space, look, for our share structure, to our cash flow, to our pipeline, to our people, it's a must own stock, right? It's a, you know, and I think about the valuation. I think about the banner year in 27. I think about the surface results we got from Lucky Shot, the ongoing underground drilling, the fact that for $50 million of investment, we can start generating hund00 million a year. Like what other mining company can do that? and and so you think of all this and then you think about this is a business that every year has been going out and making a major M&A transaction to continue to grow. So that's what excites me. That's what gets me fired up. We got lots of catalysts and and really from what the company was, you know, a year ago to what it is today, it's totally dynamically different. No hedges, you know, two tier one assets.

45:16 you know, big cash flow. and and I agree with you, Romeo, we've we've gone through a nine-month correction. you know, I I think the lows are in and I think now now's the time to to pay some serious attention. >> Tend to agree. But Rick, I'll I'll give you the last word. Go for it. What are you most excited about? >> Yeah. I think I'm really excited about Lucky Shot because you know, it's the most advanced of our projects.

45:42 we're underground. We're drilling. We can put our hand on the vein. we can see visible gold in it. we're getting assays back that are monster monster assays, you know. Yep. 10 ounces of silver is really nice, but 10 ounces of gold is a lot nicer. So, the it's it's it's a good little deposit and it's it's not big. It's not flashy. but it's going to make a lot of money and I think we can get it there quickly and and and it's it's about execution. This year was about execution. We've executed. We've done more than we said we were going to get done with less with and we spent on budget. So, I'm I'm I'm really pleased about that. that just demonstrate that this team can work work together and get set its objectives and get them get them accomplished and I think we'll demonstrate that at Lucky Shot getting it to a a production decision by the end of next year.

46:35 >> Awesome. I'll conclude with one last comment from the chat. It says Sean, you picked a great team to go forward. so leave leave you on that note. I will say for folks who aren't at Beaver Creek, this is a very busy one. So I'll let the boys get back to their trillion and a half meetings over the next day and a half. gentlemen, have a great end of your day. Dave, thanks so much for joining us from site. Thank you to everybody who joined in the chat. if you do have extra questions, I'll make sure the team get back to you.