Cash-Flowing Gold Mine in Ontario, But Can They Get Costs Under Control? | Hemlo Mining CEO Interview

**Antonio** (0:00)
This video is sponsored by Terrahutton, who makes the invisible, investible. Today on the CEO BBQ, Gold Production in Ontario, together with Hemlo Mining Corp. But if you're short on time, subscribe to our free newsletter, and once a week, we'll send you a five-minute summary of all interviews we put out, resourcetalks.com for a free weekly newsletter. Now, although this company has not paid us for the production of this video, you should still understand that we are not financial advisors, and this is not intended as financial advice. It is a broad, general, and impersonal piece of information intended only for those who know and understand the risks of junior mining, of which there are many. Before moving on, read the company's official filings on SitterPlus.ca and do your own due diligence. Pause the screen and read all the disclaimers I've shown you because your capital is at risk. If this isn't clear, go to the last section of this video for a longer explanation of the risks and biases, and do not consume this content if you don't agree with everything said therein. Moving on, Hemlo's flagship asset is the namesake Hemlo Gold Mine. It's an operating gold complex in Bombay, which is in Northwestern Ontario, roughly 35 kilometers east of Marathon, and it's also on the TransCanada Highway. The underlying ore body is now classified as an orogenic gold deposit, and the mine has been producing for quite a while now. It's been in production since 1985, produced about 25 million ounces of gold, specifically from a couple of important areas. That's the Williams, the Golden Giant, and the David Bell. I'm bringing those up because they're important to know about and to understand because we're going to talk about them later on.
The numbers in the last or the latest mineral resource estimate are from the end of last year, and it contained almost 5 million ounces of measured and indicated resources at about a gram and a half plus a little under a million ounces of gold in fur at about 2.2 grams per ton. All of which on a 100% ownership basis, by the way.
That's also important to understand, or I'm emphasizing on it, because after accounting for Franco-Nevada's 50% net profits interest on the interlay claims, the attributable ounces here or the attributable resources, they dropped to 4.45 million ounces in M&I, and 733,000 ounces in fur.
The existing mine plan, which actually predates this resource estimate, outlined a 14-year mine life average, attributable production of about 138,000 ounces per year. Life of mine ASIC was estimated at 1,400 US. There's approximately 812 million US dollars of life of mine CAPEX, and an after-tax MPV5 of just over a billion US. Those economics do not include the financing impact of the Wheaton Gold Stream, but again, they're also on somewhat older resource. The company is currently working toward a newer one as well, which of course we'll talk about. Since the recent change in ownership, the work is now really less about building a mine than it is about changing how an old mine operates and determining how much more gold can be pulled into that mine plant. Hemlo is now running an owner-operated underground mine, adding 21 new pieces of mobile equipment, increasing lateral development and long-haul drilling, upgrading ventilation and parts of the processing plant, and also working toward an underground mining rate, or at least targeting an underground mining rate of roughly 4,800 TPD by the end of this year, by the end of 2026
At the same time, there's 10 drill rigs that are active on, and about 60,000 meters has been completed on a 130,000-meter drill program which is split between resource conversion, tighter space drilling of the near-term mine plan, as well as 30,000 meters is going to go, or is what they call, growth drilling outside of the existing resource footprint. All of which, of course, I'm hoping I can ask more about later on in the conversation. Now, for some of the numbers and a bit of the details, Hemlo is listed as HMMC on the Toronto Stock Exchange. That's the main board in Canada, where the average daily volume over the last three months has been about 575,000 units. 52-week high is $8.46, and a 52-week low is just $1.23.
With 296 million shares outstanding and a $2.44 billion market cap today, this is an $8.23 stock, so it's right up close to that 52-week high. But it's also very close to the all-time high for the stock. There are 4 million RSUs, DSUs, and PSUs, if you combine them together that are outstanding, as well as there's 8.5 million options. There's no warrants outstanding, but if you count all the dilutive securities together, there are about 4% of the outstanding 309 million shares on a fully dilutive basis. The last time they raised capital was in October of last year. It's also the financing that was concurrent with the acquisition of the Hemlo Mine, and that was done at $3 a share. How much money have they got right now?