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Edited Transcript of ASR.TO earnings conference call or presentation 30-Jul-19 9:00pm GMT

Q2 2019 Alacer Gold Corp Earnings Call

ENGLEWOOD Aug 1, 2019 (Thomson StreetEvents) -- Edited Transcript of Alacer Gold Corp earnings conference call or presentation Tuesday, July 30, 2019 at 9:00:00pm GMT

TEXT version of Transcript

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Corporate Participants

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* Lisa Maestas

Alacer Gold Corp. - Director of IR

* Mark E. Murchison

Alacer Gold Corp. - CFO

* Rodney P. Antal

Alacer Gold Corp. - President, CEO & Executive Director

* Stewart J. Beckman

Alacer Gold Corp. - COO

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Conference Call Participants

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* Daniel McConvey

Rossport Investments LLC - Founder & Portfolio Manager

* Michael Slifirski

Crédit Suisse AG, Research Division - MD

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Presentation

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Operator [1]

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Thank you for standing by. This is the conference operator. Welcome to the Alacer Gold Second Quarter 2019 Operating and Financial Results Conference Call. (Operator Instructions) And the conference is being recorded. (Operator Instructions)

I would now like to turn the conference over to Lisa Maestas, Director of Investor Relations of Alacer Gold. Please go ahead.

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Lisa Maestas, Alacer Gold Corp. - Director of IR [2]

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Thank you, Arielle. Welcome, everyone, and thank you for joining us today for Alacer Gold's Second Quarter 2019 Operating and Financial Results Conference Call. Joining me on the call are Rod Antal, our President and Chief Executive Officer; Stewart Beckman, our Chief Operating Officer; and Mark Murchison, our Chief Financial Officer. Alacer Gold is listed on the Toronto Stock Exchange as ASR and on the Australian Stock Exchange as AQG.

This conference call is available via webcast, and the link and slides to accompany our remarks can be found on our website at alacergold.com. All documents released today can be found on sedar.com and asx.com.au. This presentation includes endnotes, and this call will also include forward-looking information. Please refer to the forward-looking language and endnotes included at the end of our presentation. Additionally, all dollar amounts in this presentation are expressed in U.S. dollars and on 100% basis, unless otherwise noted. Following today's presentation, we will open up the call for a Q&A session.

I'd now like to turn the call over to Rod Antal, and if you could please turn to Slide 2.

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Rodney P. Antal, Alacer Gold Corp. - President, CEO & Executive Director [3]

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Well, thanks, Lisa, and thank you all for joining us, and welcome to the second quarter call. It's been a successful first half of the year as we deliver on a number of important milestones to well and truly establish our operations, which is generating significant and material free cash flow and setting the foundation to what we'll use to continue to grow. We've worked hard to put ourselves in this position, and it's an enviable one. So before we get into the operating and financial details for the quarter, I will take a minute to describe some of the progress we have made on the strategic front as we continue our march to grow.

You may or may not know that in August this year, we will celebrate our 10th year anniversary with our joint venture partner in Turkey, Lidya Mining. Our partnership is as strong as it has ever been, and we recently announced 2 strategic developments. Firstly, we sold our non-operating 50% interest in Gediktepe and now have an attractive NSR, which will allow us to maintain a low-risk, commensurate economic exposure to the project's success. This transaction allows our joint venture partner to accelerate the development of Gediktepe and will allow us to focus on other parts of the portfolio.

And second, and just as important, we have implemented modifications to our joint venture relationship with Lidya to streamline and enhance the efficiency of advancing our respective and growing exploration portfolios in Turkey. With this change, all exploration targets will be owned and operated on a 70-30 basis rather than the previous 50-50 structure and provides the party introducing the exploration target operatorship in the future. These are important changes and demonstrate the maturity of 10 years of working together in Turkey. It sets a new foundation for the future with the expectations that we can accelerate our exploration effort more efficiently than in the past. This has already begun, and we've been active in identifying and acquiring a number of new early-stage exploration properties around Turkey that we will provide an update on later this year.

So to summarize, our focus for the next 12 months is to identify opportunities to optimize our current operations that will maximize and improve the overall economic returns with an obvious particular focus on the sulfide plant. We have stepped up our exploration efforts, first, to deliver more oxide ounces in the next few years from a number of targets within the Çöpler pit and other targets close by; second is to continue to grow Ardich resource as well as establish its detailed development plans for the future; and third is to continue to bring to life some of the other exploration targets we have in the portfolio.

So let's turn to Slide 3. And I just want to quickly discuss the midyear highlights before handing over to Mark and Stewart to discuss the details. Our outstanding safety record continues, working 947 days without a lost-time injury. Our operations delivered a solid start to the first half of the year with production of 189,000 ounces and normalized earnings of $0.14 per share. We continue to strengthen the balance sheet with a cash position of $125 million, and our net debt has reduced to $190 million at the end of June.

So with that, I'm going to turn the call over to Mark to provide an update on the financials, which start on Slide #4.

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Mark E. Murchison, Alacer Gold Corp. - CFO [4]

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Thanks, Rod, and hello, everyone. I'll focus my comments on the half year numbers. A reminder that the financial statements are impacted significantly by the declaration of commercial production for the sulfide plant on the 31st of May. Briefly, those implications are: for the period up to the declaration of commercial production, that is from 1 January this year to 31 May, gold sale proceeds from gold produced by the sulfide plant of approximately $80 million and the associated operating cash costs to operate the plant of approximately $30 million are capitalized to the sulfide plant construction costs as required by the accounting standards; for the period after the declaration of commercial production, that is from the 1st of June to the 30th of June, gold sales proceeds from gold produced from the sulfide plant of approximately $40 million and the associated operating cash costs of approximately $15 million are recognized in the profit and loss statement in the financials.

In the cash flow statement, the commercial production net cash inflow of approximately $50 million is reflected in the investing activities as a credit to the sulfide plant construction costs rather than in the operating activities. It is only the cash flow of approximately $25 million post commercial production that are reflected in the operating activities category. Going forward, revenues and operating costs will be recognized wholly in the P&L.

Summing it all up, from a simple cash perspective, the sulfide plant in the first half generated approximately $120 million of gold sales proceeds, incurred approximately $45 million of operating costs to derive an operating cash flow of approximately $75 million.

Moving on to some of the detail for the half year. 192,000 ounces of gold were sold, generating $252 million in proceeds. Consolidated all-in sustaining costs for the half were $692 per ounce. Operating cash flows of $60 million were generated for the first half as reflected in the cash flow statement. But as mentioned just before, this does not include the positive cash flow of approximately $50 million from the sulfide plant up to the declaration of commercial production.

Attributable net profit or earnings for the half was $8 million or $0.03 per share. However, included in the earnings is the impact of various unrealized noncash items. In order to provide an accurate picture of the underlying earnings of the corporation, we have provided a reconciliation of the attributable earnings per share of $0.03 to a normalized attributable earnings per share of $0.14 for the half on the right-hand side of the slide. The adjustments made are the non-cash impact of the Gediktepe sale, the unrealized noncash losses arising from the devaluation of the Turkish lira, incentive tax credits recognized from spend on eligible projects and unrealized noncash share-based compensation expense.

A couple of other items to note. On DD&A, the declaration of commercial production on the sulfide plant on 31 May triggers the start of depreciation on the plant. As a guide, we forecast DD&A going forward will be, for the oxide plant, around $150 per ounce of production; and on the sulfide plant, around $300 per ounce of production. In regard to tax, we expect the accounting effective tax rate going forward will normalize as the incentive tax credits generated will diminish with completion of the sulfide plant construction. In regard to the effective cash tax rate, we forecast the rate to be around 5% going forward after factoring in significant tax depreciation deductions from the sulfide plant and utilization of the incentive tax credits to offset tax payable.

Finally, and most importantly, cash. Underlying the earnings in the first half of the year are robust cash outcomes. We had unlevered cash generation of approximately $65 million and consolidated cash balance of $125 million at 30 June, leaving us with a net debt for the corporation as of 30 June of $190 million, a reduction of $54 million from the start of the year. And note that $20 million of cash proceeds received on the 1st of July from gold sales in June are not factored into these cash numbers.

I'll now hand the call over to Stew for an overview of the operations.

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Stewart J. Beckman, Alacer Gold Corp. - COO [5]

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Thank you, Mark. Before pushing into our performance metrics, I want to reiterate our commitment to health, safety, environment and the community. HSEC is the foundation of good, ethical and productive business performance. We continued our long-period LTI-free, now 31 months, which included the major construction and commissioning of the sulfide plant of more than 21 million hours LTI-free. We rolled out the first tranche of the project funding of over $500,000 for our new sustainability development program. A program such as this along with others aimed at training, developing and supporting the local community are an important part of maintaining a harmonious and engaged community with diverse livelihood options.

During the quarter, we had a third-party review of the operations, design and construction of our Tailings Storage Facility. Our TSF is a downstream rock fill construction, so a much lower risk design than other common tailings constructions methods. We have had a number of reviews through the construction and have full-time third-party QA/QC resources and processes on site, which includes more than one level of government oversight. The outcome of the third-party review completed in the quarter was positive. And I would point out that third-party reviews are just a normal part of our business and so will, of course, continue.

Now please move on to Slide 6, and we'll discuss the plant performance. Oxide performance continues to be outstanding, delivering 43,000 ounces of gold production and 51,000 contained ounces stacked. Production benefited from better than originally estimated recovery for blended ore program, the in-pit exploration success and some positive reconciliation. Processing of the Çakmaktepe ore started in February. The development of this, our first satellite mine, has been very successful without any nasty surprises or issues. In fact, we've mined about 40% more gold than we have scheduled. While this is wonderful, it begs the obvious questions of why and is there more.

We've learned a lot about the geology and gold deportment during the mining of Phase 1 of Çakmaktepe. We're also drilling a couple of new diamond holes to provide some extra information. Many of the original holes were drilled using reverse circulation drilling. Using all of this extra and updated data, we're reviewing our geological models. We need to understand if the reason for the positive reconciliation in Çakmaktepe today is more widespread. If so, some of the highest strip ratio areas that we have not yet scheduled into the mine plan may contain more gold, which would lower the strip ratio, which may, in turn, warrant these areas being scheduled into the nearer-term mine schedule. You might remember that Phase 1 of Çakmaktepe mining was focused on shallow high-grade ore within the permitted areas. We do have some other areas with deep ore that sit within the already permitted mining area, and it's at these areas that we are concentrating on.

The success of the programs to identify extra ore for processing in the oxide plant is evidenced by the fact that we've already processed about the same total number of tonnes of oxide ore as we had scheduled for the whole life of mine in the 2016 technical report. Additionally, we still have reserve material in hand along with excellent prospects for more oxide ore both in the pit and near mine. Our 2019 production estimate scheduled the inclusion of oxide ore from the Çöpler reserve, the Çakmaktepe reserve as well as ore that we have discovered through the Çöpler in-pit exploration program. Our in-pit exploration program continues as we aim to source more extra material to take advantage of our spare oxide plant capacity. We are continuing to drill exploration holes in the Çöpler mine.

A result of this wonderful problem of lots of extra oxide ore is that the heap leach capacity is steadily being filled. We are fast-tracking a very low-cost option to expand the heap leach by about 20 million to 25 million tonnes. Detailed engineering is almost complete. Full expansion to 20 million to 25 million tonnes requires amendment of the EIA. However, during our review of the engineering, we determined that we could squeeze in about 6 million tonnes of this capacity inside the existing EIA, that is we don't have to wait for the preparation and approval of the EIA amendment.

The engineering for this phase is practically complete, and we are starting to detail the work. Our target is to have 6 million tonnes capacity constructed and commissioned in 2020 so that even if we are wildly successful in our endeavors to scrounge more material out of the currently permitted mining areas in the short term, there will be no risk of running out of heap leach capacity. The larger expansion to the full 20 million to 25 million tonnes will be completed well in time to receive ore from the new mining areas such as Ardich or the Çöpler Saddle. We have also started work on the options for the development of even larger oxide processing capacity beyond the 20 million to 25 million tonnes.

Now please move on to Slide 7, and we can discuss the sulfide plant performance. Title of the slide says it well. Performance of the sulfide plant continues to improve, and we delivered more than 50% production increase compared to quarter 1. We had a shutdown of the plant at the beginning of the quarter during which we completed both schedule and some minor improvement work. After the shutdown, we've achieved greater plant stability and reliability. Ramp-up continues, and we are making minor modifications to tune and improve the performance and reliability. However, we still have not identified any major issues in the plant that require redesign or significant works.

The April shutdown was the first major autoclave shutdown. Ahead of the shutdown, we had not seen any deterioration in the performance or autoclave condition. The shutdown was slowly scheduled in order to give us some insight into the internal condition of the autoclave. Condition of the autoclave was outstanding with very little scale and almost no wear. The brick was in perfect condition in both the autoclave and flash vessels. The autoclave agitator blades had practically no wear on them. The condition of the autoclave indicates that we will be able to extend the cycle between major shutdowns. We had determined to defer the major shutdown for the other autoclave from this year into 2020. However, we will still undertake some shorter shutdowns to replace some of the severe service valves and some external pipe work. We have monitoring in place to ensure that we don't have a drop in performance or take any risks with our assets.

During the autoclave shutdown, the second autoclave was off-line for a period for some unscheduled maintenance. During this time, oxide ore was treated through the sulfide plant, bypassing the pressure oxidation circuits. The oxide ore treated have lower recovered -- sorry, a lower recovery, and so lowered the overall gold recovery in April. Modifications were also completed to both the acidulation tanks, and they appear to be fully effective. Having both acidulation tanks operating to design and in-service made a big improvement to plant stability and improved both thickener and overall process performance. Once the plant was up and running after the shutdown, we took time to make sure that it was stable, performing to expectation and to evaluate the ramp-up to design. We are confident that the plant will ramp up to perform as promised, so in May, we declared commercial production.

Now please turn to Slide 8, and we can discuss Ardich. As Rod mentioned, Ardich is our highest-priority development project, and we released an updated resource in April. The indicated resource increased by close to 120% to over 600,000 ounces. The Ardich deposit is adjacent to Çakmaktepe and only 6 kilometers northeast of the Çöpler mine. As we did with Çakmaktepe, we are aiming to fast-track Ardich, leveraging off the existing infrastructure. We take a thorough and detailed approach to project development. Our project development teams are carefully detailing the work to ensure that we're doing everything that we can to fast-track access to the Ardich ore and that nothing is missed. As we get more fidelity on the development plans, we will start to share them with you. We have 4 drills on the project now trying to define the extent of the mineralization. We are currently drilling holes 151 through 154. The April resource included only the first 100 holes.

Access to the southeastern area was delayed by heavy weather, making construction of the access roads hazardous. The weather has improved. In fact, it's very hot now and dry like the rest of Europe, and we are now making big step-outs in the southeast. We currently have mineralized drill holes stretching well over a kilometer. It is an extremely exciting and prospective deposit, with the overall mineralized target extending more than 2 kilometers.

The more we drill and study the deposit, the more we understand it and its possible relationship to Çakmaktepe. This is an iterative process with improved understanding in geological models, helping to inform the next exploration targets and specific drill sites. Ardich is exciting because it has the potential to deliver near-term production gold based on a starter pit and processing in an expanded heap leach to Çöpler. Then, as the deposit continues to grow to its full potential, it will provide options to sustain the oxide gold production from the Çöpler District right through the medium and longer term. We will release an exploration update on Ardich in August to share some of the new drill results. We will also update the resource estimate in Q4. The updated resource in Q4 will, of course, be another interim resource as we will only be able to include areas with high-enough drill density. We are making big step-outs and so some of the areas will only have a couple of holes in them, and we'll have to wait for more drilling and subsequent resource updates to be included.

Now let's move on to Slide 9, and we can have a brief update on the rest of the exploration. Alacer holds a significant portfolio of highly prospective landholdings surrounding Çöpler and across Turkey. We take a very disciplined approach to exploration, which has led to a track record of success. We have ramped up the exploration effort around Çöpler, and the exploration team has about 180 people and 9 drill rigs working in the district. The district is extraordinarily prospective, and we are having to prioritize the exploration resources. We are moving the drills between the prospects depending on the changing priorities and in the less developed areas to give the geologists time for data interpretation and geological model development before committing the position of and drilling the next holes.

As I mentioned previously, we have 4 drills in Ardich and are making sure that Ardich gets priority. I also mentioned that we have temporarily moved one of the drills back to Çakmaktepe for a couple of holes. We have been drilling in-pit in the Çöpler Saddle. The Çöpler Saddle prospect has been prioritized because it extends from the existing mine area to the west, so it should be the easiest and fastest to develop when we are successful on identifying economic mineralization. We have also managed to get some holes into the Mavialtin Porphyry Belt, including Findiklidere and Mavidere. In addition to the Ardich exploration updates that I've already promised, we will have separate updates for the other Çöpler District prospects in Q3 and Q4 so that you can see why we are so excited about our portfolio.

In summary, both the operating and development teams have been amazingly successful. The sulfide plant continues to ramp up. The oxide plant production is delivering beyond what was previously defined with great prospects to extend oxide production in the near, medium and longer term. Additionally, we have great longer-term prospects in both the Çöpler District and regional Turkey, which are being thoroughly assessed and steadily advanced.

Now please turn to Slide 10, and I'll hand the presentation back to Rod for a wrap-up.

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Rodney P. Antal, Alacer Gold Corp. - President, CEO & Executive Director [6]

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Well, thanks, Stew, and thank you, Mark. So to summarize, Stew just provided a pretty comprehensive update of our current operations and laid out the exciting exploration prospects that we are currently advancing. In addition to that, our balance sheet will continue to strengthen, and we have all the pieces that are in place to allow us to grow where the prospects are exciting and without boundaries. To that end, we have a number of planned market updates over the next 6 months that will allow you to track our progress.

And with that, I'd now like to open up the call for questions. Thank you, operator.

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Questions and Answers

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Operator [1]

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(Operator Instructions) Our first question comes from Michael Slifirski of Crédit Suisse.

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Michael Slifirski, Crédit Suisse AG, Research Division - MD [2]

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I've got a few, if I may, please. First of all, the table on Page 7, throughput rates, recovery rates, plant utilization, Stew, if I heard you correctly, you said April was low because oxide went through, and the oxide recovery was lower. Why is that? I thought the whole idea of the plant was to effectively convert sulfide to oxide and then get good recovery. So if you're putting through oxide, when I look at that 77%, the implication is that the oxide recovery -- the oxide-only recovery was significantly lower. What explains that, please?

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Stewart J. Beckman, Alacer Gold Corp. - COO [3]

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Yes. So we selected some ore that was higher in grade but a bit more refractory than some of the other sulfide grade. And the reason for wanting to put that through the plant opportunistically was that we would get higher recovery from it, but its overall recovery is lower. The reason for it being refractory, we're not -- we didn't do the test work on it.

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Michael Slifirski, Crédit Suisse AG, Research Division - MD [4]

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And so it's oxide ore that was refractory, sort of carbonaceous or something.

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Stewart J. Beckman, Alacer Gold Corp. - COO [5]

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Not carbonaceous. We don't have carbonaceous ore, but we do have some ores that are slightly more refractory.

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Michael Slifirski, Crédit Suisse AG, Research Division - MD [6]

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Okay. And I've forgotten actually the -- what your target numbers are. If I compare June numbers compared to what your ultimate targets are, can you just remind me what those 3 numbers would be? Throughput, recovery and plant utilization.

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Stewart J. Beckman, Alacer Gold Corp. - COO [7]

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The plant utilization on an ongoing basis is about 85%. The recovery, you can see as a function -- it's in the technical report. There's an algorithm in there. The recovery would be about 1% higher given the grade. It plateaus at about 9.6% (sic) [5% or 6%] . What was the other one, sorry?

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Michael Slifirski, Crédit Suisse AG, Research Division - MD [8]

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And throughput rate, the percentage rate.

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Stewart J. Beckman, Alacer Gold Corp. - COO [9]

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Oh, the percentage, it's a percentage of 100 -- so it's -- it'll be 100%. But normal throughput is to do the 120 tonne an hour. But I would say, with regards to the throughput, there's a number of reasons that, that is lower, one of which being that we did put some higher sulfide through in some periods, so in some periods like -- we were treating high-grade, high-sulfide ores. And so the throughput rate was 100% of design on a sulfide basis. Does that make sense to you?

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Michael Slifirski, Crédit Suisse AG, Research Division - MD [10]

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Yes, it does. Yes. Secondly, the restructure of the exploration JV from 50-50 to 70-30, to achieve that higher interest, is there any other sort of offsetting adjustment? Or is it -- just it looks like sort of a win to you, so I'm just trying to understand what the offset might be.

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Rodney P. Antal, Alacer Gold Corp. - President, CEO & Executive Director [11]

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It's not resetting the current portfolio, Michael, so don't get it confused about going back over what we already have in the existing joint venture. Its go-forward position is effective 1st of January of this year, so it impacts anything that either party brings into the exploration portfolios from that point. So it's a lot about we had a position before where it's 50-50, and it wasn't as effective or as efficient as it could have been. But it also is clearly and more importantly about operatorship on assets, which is very important as we look forward that anyone who introduces that exploration target has the unequivocal operatorship going forward so -- should that ever progress to that sort of stage. So it's a good outcome for both parties, frankly. And I think it just shows the maturity after 10 years of working together that we have been able to reconstruct and have a look at how it was previously done, is it the most efficient way that we use our time, and we came up with something that I think is good for both people.

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Michael Slifirski, Crédit Suisse AG, Research Division - MD [12]

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Yes. Great. And then on to Ardich, I -- a little on numbers, Stew threw out at a rapid pace, so I got myself a little bit bamboozled. So I guess what I'd like to understand is the existing resource, what sort of strike length that's over, what length you've defined. I think that was a kilometer or so. And whether there's any tenor change between the drilling that defined the existing resource and perhaps the step-out holes, whether they're at the same tenor as what's in the existing resource.

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Stewart J. Beckman, Alacer Gold Corp. - COO [13]

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Yes. So we're going to issue an update to the drill holes in a couple of weeks, and so you'll be able to see those. So we've been doing both stepping out and we've also been filling in some of the gaps. So we have, as always, an exploration mix of fantastically wonderful holes and other holes, but all of our holes have been mineralized. We haven't had a non-mineralized hole yet.

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Michael Slifirski, Crédit Suisse AG, Research Division - MD [14]

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Right. And so it's a mining engineer's geological term is it, fantastically wonderful?

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Rodney P. Antal, Alacer Gold Corp. - President, CEO & Executive Director [15]

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Yes. It's a nice term to have, Michael, and even a good problem to have. I think just to answer your question, the original resource was about 500 meters thereabout. And then so we've now stepped out to what Stew said. The other thing just is -- another number was we're up to hole 150-ish from the original 100. So just to give you an idea of the number of holes that were drilled since last time.

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Stewart J. Beckman, Alacer Gold Corp. - COO [16]

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When we issue the release in a couple of weeks, it'll be up to probably Hole 135. Obviously, it takes time for us to process the holes and get through the QA/QC, so don't be expecting to go 150 holes when it comes out.

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Michael Slifirski, Crédit Suisse AG, Research Division - MD [17]

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Yes. Okay. And then finally, with Çakmaktepe, the positive reconciliation, just wanted to understand what that encompasses. That's simply more gold over the same volume. It's not that when you're mining a volume, you're seeing extension of mineralization where you didn't expect it.

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Stewart J. Beckman, Alacer Gold Corp. - COO [18]

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We had an increase of both grade and of volume.

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Operator [19]

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(Operator Instructions) Our next question comes from Daniel McConvey of Rossport Investments.

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Daniel McConvey, Rossport Investments LLC - Founder & Portfolio Manager [20]

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Congratulations on a great first half, a great startup and a great safety record. A few questions. One, forgive my pronunciation, but Gediktepe, the one you're selling for the NSR, is -- what is the plan for that by your partner? Is that -- is he -- are they gung ho in getting this developed?

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Rodney P. Antal, Alacer Gold Corp. - President, CEO & Executive Director [21]

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I think that would be an apt description, Dan, actually, gung ho. Certainly, from a perspective, where they're prioritizing it, it is clearly their priority now from their own portfolio, and they are moving along to advance the project.

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Daniel McConvey, Rossport Investments LLC - Founder & Portfolio Manager [22]

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Okay. There seems to be, just on the exploration side, a lot of focus not only on Ardich but on some other areas you talked about before. Is there any reason why -- this new 70-30 changed the partnership? I know it hasn't taken -- it's not affecting your current properties, but is -- I think you mentioned this in your preamble is it -- this has kind of helped step up the exploration and the drilling and the program that you have now envisioned for the rest of the year. Is that fair?

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Rodney P. Antal, Alacer Gold Corp. - President, CEO & Executive Director [23]

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Yes. Look, we didn't see any issues with the current structure of the portfolio from an ownership perspective. So ignoring that, what we were looking at more is about -- we've been together for a long period, and it was about are we working together as efficiently and as effectively as we can. We've got an outstanding exploration team within Alacer, some of who you've met. And similarly, our joint venture partner also has a very good exploration team in his employ as well. So we'll try to find a way that we could deploy all of that resource in a way that we didn't get in each other's way.

So it's as simple as just trying to say, maturity, where are we, what makes sense going forward, how do we more efficiently and effectively utilize the power of the joint venture relationship. And the 70-30 was sort of a comfortable position for us. It maintains the exclusivity that we have with our partner within Turkey. It provides us both an opportunity to participate in different targets as they mature through their life cycles. In the future, it will mean that our exploration teams are fully deployed. So it's as simple as that, Dan. I think ultimately, if we probably look back in a few years' time, I think that will be -- this will be a really telling moment for us, the sort of move forward at a more -- at a different pace, but it's a good outcome.

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Operator [24]

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This concludes the question-and-answer session and today's conference call. You may disconnect your lines. Thank you for participating, and have a pleasant day.