Ann: Q3 2024 MD&A Report, page-2

p.p1 {margin: 0.0px 0.0px 0.0px 0.0px; font: 13.0px 'Helvetica Neue'; min-height: 15.0px}p.p2 {margin: 0.0px 0.0px 0.0px 0.0px; font: 13.0px 'Helvetica Neue'}At first, I wasn’t too keen on this quarter. Cash burn was a concern, grades were low, and recovery was bad. The 500TPD plant has been postponed (the size we needed to get past breakeven), and it seems more capital will be needed after we just got burned on the last CR.

However, the more I think, the more I feel like the company has bottomed.

Recovery is now above 80%, which is good. We are about one quarter ish away from the 500 zone, and the plant is now at 400 TPD. From here, if we can increase the grade to around 5 g/t, we can break even. At 8 g/t (which is very possible at the 500 zone), then we are cash positive. This quarter was also based on 2700 gold rather than the 3300 gold we are currently at.In some sense, I am glad we are slowing down the upgrade to 500 TPD. If we pushed it now, it would mean huge cash burn while we are only processing low-grade material. If we can get to a higher grade without a CR, we can be in a better position for a CR to upgrade the plant again. 300 TPD wasn’t going to get us there, but 400 TPD just might with slightly better grade.

400 tonnes at 5 g/T = 2000 g per day. X 80 days (should be more days this quarter as there is less downtime for upgrades) = 160,000 grams * 80% (recovery) = 128,000 grams / 31.1035 = 4115 ounces X 3300 (gold price) = 13,579,500.
Math might be wrong.

That’s breakeven when you consider the lower expenses, as this quarter won’t have any cost to improve the plant.At 8 g/T, it looks great.I am now bullish.