Latest / WTR Small-Cap Spotlight / Xali Gold (XGC): Reviving Pico Machay and Unlocking a New Gold Development Opportunity

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Xali Gold (XGC): Reviving Pico Machay and Unlocking a New Gold Development Opportunity · WTR Small-Cap Spotlight

• 0:00
  SPEAKER_01: Welcome to the WTR Small Cap Spotlight Podcast.
• 0:04
  SPEAKER_01: I'm your host, Tim Gerdeman, Vice Chair and Co-Founder and Chief Marketing Officer of Water Tower Research.
• 0:10
  SPEAKER_01: In today's episode, we are joined by Joanne Fries, president and CEO of Zali Gold, TSX Venture Exchange Ticker Symbol, XGC, and OTC ticker symbol, XGDF.
• 0:25
  SPEAKER_01: Zali Gold is a gold exploration and development company focused on advancing its flagship Pico Machai Gold Project in Peru.
• 0:34
  SPEAKER_01: The project benefits from substantial historical exploration, engineering work, including a historical gold resource and feasibility study, potentially providing a head start on the path toward development.
• 0:46
  SPEAKER_01: Today we'll discuss what differentiates Pico Machai from other junior gold projects and the company's plan to update its resource and economic studies, progress on permitting, and community engagement, and how the company intends to finance the project's advancement.
• 1:03
  SPEAKER_01: We will also look at the milestones ahead and what could make the next 12 to 18 months particularly interesting for the company.
• 1:10
  SPEAKER_01: Also joining is my WTR equity research colleague, Dmitri Selverstein.
• 1:15
  SPEAKER_01: Joanne and Dimitri, welcome and thanks for joining today.
• 1:18
  SPEAKER_00: Thank you very much for inviting me.
• 1:20
  SPEAKER_02: Thank you, Tim.
• 1:21
  SPEAKER_02: Great to be here.
• 1:22
  SPEAKER_01: Joanne, I'm going to kick things off by asking you to tell our audience a bit about your professional background in the mining industry and how you ultimately landed at Zali Gold.
• 1:32
  SPEAKER_01: And I would also ask for those who may not be familiar with the company, that you provide a high-level kind of 30,000-foot overview of the firm and its flagship project in Peru, please.
• 1:42
  SPEAKER_00: Okay.
• 1:43
  SPEAKER_00: Thank you very much.
• 1:44
  SPEAKER_00: I've been in the business for about 40 years.
• 1:46
  SPEAKER_00: I started in coal, then gold, then diamonds, then copper.
• 1:51
  SPEAKER_00: As an economic geologist, I would call it exploration geologist, but fine-tuning it to economic because you can explore for a lot of things, but they better be economic, otherwise, no one cares.
• 2:03
  SPEAKER_00: And I ended up in Peru in the 90s in an opportunity, initially because children were young and the family wanted to live there and there were good opportunities for work.
• 2:14
  SPEAKER_00: And I could manage that with two young children.
• 2:18
  SPEAKER_00: But there was an explosion of activity, exploration activity at that time, mid-90s.
• 2:25
  SPEAKER_00: And I ended up being the qualified person for a discovery that got sold to, well, in 13 months from when I started working for it, the company got sold to Barrett Gold for a billion Canadian dollars.
• 2:39
  SPEAKER_00: So the excitement was rampant.
• 2:42
  SPEAKER_00: And some financial financiers convinced me to start a company with the Peruvian geologist that had named that discovery after his daughter.
• 2:52
  SPEAKER_00: And we went, so we started a private company in Peru in 97.
• 2:55
  SPEAKER_00: Then I moved back to Canada to look for friends to help me take it public.
• 3:00
  SPEAKER_00: And um and then we we formed it was uh Candente Resource Corp with our focus on gold.
• 3:09
  SPEAKER_00: Along the way, we we realized gold exploration wasn't as easy to just find something that was as exciting as what had been sold for a billion dollars.
• 3:18
  SPEAKER_00: We tripped over basically a copper deposit that the government had up for sale, and we bought it for$75,000 in an auction.
• 3:27
  SPEAKER_00: It already had 11 drill holes, but it was considered uneconomic in that was in 2001.
• 3:34
  SPEAKER_00: But we had high hopes of finding more or the world changing for copper, and both of those happened.
• 3:40
  SPEAKER_00: We ended up um spinning out so that we had Candente Copper and Candente Gold as separate public companies, focusing on different things.
• 3:49
  SPEAKER_00: Obviously, Candente Gold at that time had a uh historic producer from in Mexico.
• 3:56
  SPEAKER_00: And the gold comp the sorry, the copper company did get sold, which is always the goal, either get in production or sell your company, of course, for a profit.
• 4:04
  SPEAKER_00: Um, the copper got sold to Fortescue Metals out of Australia that closed in March of this year.
• 4:11
  SPEAKER_00: And the gold, we switched back in September 2024.
• 4:15
  SPEAKER_00: I started getting very frustrated with the the length of time and the insecurity for my investors in Mexico.
• 4:22
  SPEAKER_00: So I said, I've got to find a better gold project for this.
• 4:27
  SPEAKER_00: I could just, you know, everybody could feel there's a gold market coming.
• 4:31
  SPEAKER_00: And I wanted to have something that had a solid resource, but a lot of explosion potential, and of course, potential with the rising gold price.
• 4:38
  SPEAKER_00: And I managed to lock into Pico Machai.
• 4:40
  SPEAKER_00: It took me quite a while to excuse me, negotiate it, but I did, I did lock it up.
• 4:46
  SPEAKER_00: Um, we had exclusivity on it as of May 2025, and then just kept negotiating the final terms.
• 4:52
  SPEAKER_00: We didn't close until December 2025, December 24th.
• 4:56
  SPEAKER_00: But now we're off and running.
• 4:58
  SPEAKER_00: We've so we've been active for about eight months, and we're about to start drilling.
• 5:03
  SPEAKER_00: We're expecting, we should be putting in the final application, the FTA application, it's called for drilling permits, this week.
• 5:11
  SPEAKER_00: And the government has told us it's a 10-day turnaround.
• 5:14
  SPEAKER_00: So we've lined up our drillers already.
• 5:16
  SPEAKER_00: So we hope to be drilling by by early November.
• 5:20
  SPEAKER_01: That's great backstory.
• 5:21
  SPEAKER_01: Thanks for sharing.
• 5:22
  SPEAKER_01: And you sound like a very skilled negotiator.
• 5:24
  SPEAKER_01: So with that, I'll turn it over to Dimitri.
• 5:27
  SPEAKER_02: Thank you, Tim.
• 5:28
  SPEAKER_02: Uh and Joanne, yes, uh, thank you for giving us uh that uh overview of your background and the history of the company, how we came to be where we are.
• 5:36
  SPEAKER_02: Um, I'd like to spend a little time exploring what makes uh uh Pika Machai interesting, particularly in a market where investors, you know, as you know, have quite a few uh junior gold companies to choose from.
• 5:47
  SPEAKER_02: Um but unlike many of those projects, Pika Machai comes with a substantial amount of historical drilling.
• 5:53
  SPEAKER_02: You know, it's got engineering and metallurgical work that Tim mentioned, including a feasibility study completed, yes, you know, a few years ago, but that was also when the goal was at$700 an ounce, a fraction of today's price, and it was still found to be economical.
• 6:07
  SPEAKER_02: Could you walk us through the project's history and what attracted, you know, Zali to the opportunity you talked about sort of pivoting away from Mexico towards Peru.
• 6:15
  SPEAKER_02: But what do you believe differentiates this deposit and this resource from other undeveloped gold deposits?
• 6:22
  SPEAKER_00: Certainly, thank you.
• 6:26
  SPEAKER_00: Exactly what you you touched on, that the junior that owned it, did their several several groups did expiration from 97 till 2008, 2009, but the junior that owned it in 2008 planned to put in production on the back of their feasibility that they had done.
• 6:45
  SPEAKER_00: So it looked not just kind of okay, but pretty good at$700 gold.
• 6:51
  SPEAKER_00: They ended up getting bought out for another project they had in Argentina by a large company, Pan American Silver.
• 7:00
  SPEAKER_00: And Pan American basically they did a little bit of work on Pico Machai, but really decided it wasn't, you know, there where they should be focusing, probably mostly because of size.
• 7:09
  SPEAKER_00: So really it sat for all that time.
• 7:12
  SPEAKER_00: And they did have it up for sale, but the ticket was 18 million up front on signing, I should say.
• 7:21
  SPEAKER_00: And and you had to you had to buy that company everything, all the asset, like wasn't just an earn-in, a normal or a more normal uh mining structure deal.
• 7:31
  SPEAKER_00: So um we negotiated 15 million over five years.
• 7:37
  SPEAKER_00: Now we owe that, it's in promissory notes.
• 7:39
  SPEAKER_00: This is not an earn-in.
• 7:40
  SPEAKER_00: We do own the company.
• 7:42
  SPEAKER_00: But I I basically, through our work of due diligence, we're able to show that there were risks and we need to be de-risking so that our investors weren't putting up so much money right up front.
• 7:54
  SPEAKER_00: So that's really helped the plan there.
• 7:58
  SPEAKER_02: Understood.
• 7:59
  SPEAKER_02: So the historical work, you know, certainly gives the deposit something to build on in the project uh rather than having to start from scratch.
• 8:06
  SPEAKER_02: But of course, the difference between a historical resource and being able to report, you know, one under today's standards is not the same thing.
• 8:14
  SPEAKER_02: So let's talk about what it will take to get to an updated economic statement.
• 8:19
  SPEAKER_02: The project has, you know, historical gold resource over, I think over 700,000 ounces, if I remember correctly.
• 8:27
  SPEAKER_02: Uh, and you're preparing, as you mentioned, a drilling program.
• 8:30
  SPEAKER_02: So could you explain what needs to be done sort of after the drilling or concurrent with it to bring that historical resource into compliance with the current reporting standards?
• 8:40
  SPEAKER_02: And how do you see the potential to expand the resource through additional exploration?
• 8:45
  SPEAKER_02: Obviously, there is some definition of what's already been drilled, but you also mentioned there's some optionality on this being a much larger project over a lifetime.
• 8:53
  SPEAKER_00: Yep.
• 8:54
  SPEAKER_00: Certainly.
• 8:55
  SPEAKER_00: Um let me mention that the word historical and current are sometimes misleading.
• 9:02
  SPEAKER_00: So the standards that this became a resource in 2008 aren't that different than today.
• 9:11
  SPEAKER_00: The day before we closed our deal with Pan American Silver, the resource of, as you've said, 700,000 ounces, it's measured and indicated about 350 and then inferred.
• 9:23
  SPEAKER_00: I always have to give the two.
• 9:25
  SPEAKER_00: I'm not supposed to add them together by BC Securities Commission's rules.
• 9:29
  SPEAKER_00: In any event, um, the day before we closed our transaction, the resource was shown on Pan American's website as current and as actually part of their reserves.
• 9:42
  SPEAKER_00: But the day after, the day we bought it, it became historical.
• 9:47
  SPEAKER_00: So it's more a question of who's done the work than the actual quality of the work.
• 9:52
  SPEAKER_00: But in any event, so we now have this historical resource that we cannot give economic numbers on until we bring it current and then do a preliminary economic assessment.
• 10:04
  SPEAKER_00: So we're doing that.
• 10:06
  SPEAKER_00: Our drilling will start with only 2,000 meters of drilling, which is twinning 10% of the previous drilling.
• 10:13
  SPEAKER_00: And then we'll do a we'll do an actual extra thousand meters of drilling before we update the resource and bring it current.
• 10:20
  SPEAKER_00: Because we when we do the 10%, we'll be drilling exactly the way they drilled, however, it was.
• 10:42
  SPEAKER_00: The reason it could have more ounces is that it was drilled with RC drilling, which is reverse circulation.
• 10:48
  SPEAKER_00: And those are chips, just very tiny chips.
• 10:51
  SPEAKER_00: We'll be drilling with solid core.
• 10:52
  SPEAKER_00: So you always get a more reliable and number assay, but also when you have fine gold, as we do, it can wash down the hole with when it's grinding up the rock.
• 11:04
  SPEAKER_00: So that could be in any event, that the the process is to drill minimum 2,000, but we'll drill 3,000 meters to bring it current.
• 11:15
  SPEAKER_00: And at the same time, our engineering term team, and there's five people that we've named in news releases that are all on that team, and they're going to be the team for the updating the PEA or updating, it's really taking apart the old feasibility, making it into a PEA now.
• 11:32
  SPEAKER_00: And then when we move forward with all the other levels, which of course normal transition would be either pre-fees and then fees, probably fees will happen for us directly.
• 11:44
  SPEAKER_00: And then and then adding ounces.
• 11:47
  SPEAKER_00: So sorry, we get the resource current, then we can come out with public economic numbers on cash flow analyses, right?
• 11:54
  SPEAKER_00: Your NPV, your IRR, your CapEx, your sustaining capital.
• 11:59
  SPEAKER_00: Um, we already know it's a very low strip ratio.
• 12:02
  SPEAKER_00: Half of a lot of the ore body is an outcrop.
• 12:05
  SPEAKER_00: And I should say mineralization because again, without a current resource, I'm not supposed to use the word or in any event.
• 12:12
  SPEAKER_00: Trying to trying to watch myself here.
• 12:14
  SPEAKER_00: Um so it's very low strip ratio, which says, you know, inexpensive mining.
• 12:20
  SPEAKER_00: It's inexpensive mining based on the feasibility study, and we don't have any reason to believe what they had in their feasibility in 2008 doesn't apply today.
• 12:31
  SPEAKER_00: The only thing our engineers have come up with is that we would do an extra crushing cycle because they were going to do run of mine, which means really you just blast it and put it on the leech pad, but we would crush it somewhat because you get better, a little more expensive, but you get more better recovery, of course, and with gold being so high.
• 12:48
  SPEAKER_00: That's the only thing we've seen that that should change.
• 12:51
  SPEAKER_00: So we will do our own MET testing as well, but not for the PEA.
• 12:56
  SPEAKER_00: That would be for the feasibility.
• 12:58
  SPEAKER_02: Gotcha.
• 12:59
  SPEAKER_02: Okay, so that's very helpful context, particularly in understanding what a potential mining operation could look like.
• 13:05
  SPEAKER_02: You mentioned the lower, you know, lower cost because of the outcrop and obviously higher prices, so economics could look a lot better.
• 13:11
  SPEAKER_02: Now, you've uh still you know need to get a lot of work done as far as permitting the project.
• 13:16
  SPEAKER_02: You've recently completed an important public information workshop in Peru as part of the environmental approval process.
• 13:23
  SPEAKER_02: Uh could you explain how permitting works in Peru?
• 13:26
  SPEAKER_02: What approvals you already secured, and what remains outstanding, uh, both to begin the drilling and eventually to construct and operate a mine.
• 13:34
  SPEAKER_02: What kind of timeline do you envision for these next stages?
• 13:39
  SPEAKER_00: Sure.
• 13:40
  SPEAKER_00: And for everybody, the timeline is actually shown in our PowerPoint presentation on our website.
• 13:46
  SPEAKER_00: So we're seeing three to three and a half years to get into production.
• 13:50
  SPEAKER_00: Call it four if we need to.
• 13:53
  SPEAKER_00: Um, uh that's our goal, and that's our we've got all the components in there that are required.
• 13:58
  SPEAKER_00: The FTA is the drilling permit we've applied for, and that allows us 20 platforms.
• 14:03
  SPEAKER_00: From each platform, we can drill as many holes as we want.
• 14:07
  SPEAKER_00: So we've actually outlined up to 20,000 meters of drilling from those 20 platforms.
• 14:14
  SPEAKER_00: And they're within the area known of the resource, but also allow us to drill away from it and in different angles so that you can find more ounces if they're there.
• 14:25
  SPEAKER_00: So there are they are not just for proving up uh and bringing current, what's known.
• 14:30
  SPEAKER_00: It's also for exploration.
• 14:32
  SPEAKER_00: Not all the exploration we want.
• 14:34
  SPEAKER_00: That would be a bigger footprint, and that would take an additional drilling permit.
• 14:39
  SPEAKER_00: The FTA is the is the shortest timeline and smallest permit.
• 14:45
  SPEAKER_00: The next ones, and they're changing them right now, but they've been minimum sort of up to 20 platforms and up to 40 platforms and up to you know 200.
• 14:55
  SPEAKER_00: But I I can't I don't remember all the numbers that they've just changing some of those too.
• 14:59
  SPEAKER_00: But you go from an FDA to an EIA semi-detailed, which is more extensive environmental work because it's a bigger footprint, and that gives you, you know, more extensive drilling allowed.
• 15:14
  SPEAKER_00: Then you go to an EIA detailed, which is foreign operation.
• 15:19
  SPEAKER_00: Now we are already starting some of the components of the EIA detailed, and that would take minimum a year, it can be a year and a half for a larger project up two years.
• 15:31
  SPEAKER_00: I we've put in our timeline a year and a half.
• 15:34
  SPEAKER_00: And we've already put in a meteorological station because that's a really key component to have lots of data, and that will allow us to start gathering data now, but also comparing with other meteorological stations in around surrounding us so that you can have a comparative because the because the government does want to know what was the weather like five years ago or 10 years ago or all that.
• 15:59
  SPEAKER_00: And obviously, we we we do know to some degree, but we can't prove it.
• 16:03
  SPEAKER_00: So that's the longest lead time uh item, lead time item for the EIA detailed, and that's the key is getting that started.
• 16:13
  SPEAKER_00: And and they normally don't start officially until you're in feasibility, which is why we will be very eager to get beyond with the current resource and a PEA, then be getting launching on feasibility, and I've already got the team.
• 16:28
  SPEAKER_00: Although again, uh, with a historic resource, I'm not supposed to talk about feasibility because I'm not supposed to know I have anything economic already.
• 16:38
  SPEAKER_00: But based on history, it's it's looking pretty good.
• 16:41
  SPEAKER_02: Gotcha, gotcha.
• 16:42
  SPEAKER_02: All right.
• 16:43
  SPEAKER_02: Well, I mean, Peru is an established mining jurisdiction.
• 16:45
  SPEAKER_02: You mentioned, you know, mining has been going on there for a long time.
• 16:48
  SPEAKER_02: Uh, but navigating the regulatory process and coordinating with different levels of government can still be challenging, especially for smaller developers.
• 16:56
  SPEAKER_02: Um you've you're working with the Ministry of Energy and Mines and regional authorities in in the Pikamachai uh district as it advances.
• 17:04
  SPEAKER_02: How would you characterize government's uh uh engagement with the company?
• 17:08
  SPEAKER_02: And are there particular policies, platforms, or other ways of support that could help accelerate the project development when government is concerned?
• 17:20
  SPEAKER_00: Yeah, I'm very happy to say that and and and you asked about Mexico.
• 17:25
  SPEAKER_00: One of my problems in Mexico was not having cohesion of permitting rules and who who authorizes what and and timelines.
• 17:36
  SPEAKER_00: In Peru, it and and Peru has has varied depending upon who's in government, but they've never changed their mining laws to it to a degree where they they just weren't, you know, um positive on exploration and positive on development and mining and and not not not that they're not taking all the care.
• 17:58
  SPEAKER_00: And that was the best thing about the workshop that was just held is that it's the first time a lot of the people in the community uh expressed to us that they have ever had somebody from their own government coming in to tell them what are the rules, what are their protections, what are the steps.
• 18:17
  SPEAKER_00: And so we were all in the room, our our not myself personally, but my team, um, and and our environmental consultants, and then the government, so the the community could ask all the questions they needed to ask at any any one of us.
• 18:34
  SPEAKER_00: Um, so this government with Keiko Fuji Mori is back to supporting development, but making sure that everybody who has rights in the area and the the you know communities which are indigenous have special rights, all of those are protected.
• 18:52
  SPEAKER_00: But also Peru's gone through lots of uh rules and and and is very progressive on making sure it's has the highest standards of same as internationally, um, no longer allowing what were some bad mining practices in the past.
• 19:11
  SPEAKER_02: Well, that's that's encouraging to hear because obviously you don't want to continue the mistakes of the past.
• 19:16
  SPEAKER_02: So we've talked about the resources, the technical work that you guys are doing.
• 19:20
  SPEAKER_02: Uh we've touched on the permitting and the relationships we have with the government in Peru.
• 19:24
  SPEAKER_02: The other major piece of the puzzle, of course, is capital.
• 19:27
  SPEAKER_02: So let's discuss how you plan to advance uh the finances to the next stage.
• 19:33
  SPEAKER_02: Um, you know, advancing the gold project uh from exploration through feasibility um, you know, requires capital, a different size of capital.
• 19:40
  SPEAKER_02: Um so how are you thinking about Zali's capital requirements over the next, you know, you mentioned three to four years until you get into production, and what might the eventual financing structure look like in terms of you know, equity, debt, strategic partners, um, or other sources of capital?
• 19:59
  SPEAKER_00: Right, thank you.
• 20:00
  SPEAKER_00: Um first of all, we're we're working with equity right now, but we would love to get into longer term financing like and less dilute through debt through streaming or forward selling of gold, let's just call it that, which should be able to be get going once we're in feasibility and have a little more um more current numbers for you know for our capex and and the Mets metallurgy's the lot metallurgy has been done is is pretty darn extensive, but still we can always do more and we will be doing more.
• 20:40
  SPEAKER_00: So, with that underway uh and better understood, those would allow us to get into and and off-take agreements as well.
• 20:50
  SPEAKER_00: We're already talking to off-take people, they've approached us as early as last March.
• 20:55
  SPEAKER_00: Um, so there's lots of ways to raise money beside equity.
• 20:58
  SPEAKER_00: Equity will always be a portion of it, I would say.
• 21:01
  SPEAKER_00: As far as strategic partners, we are in discussions with a few groups, very interesting groups.
• 21:08
  SPEAKER_00: And um we wouldn't, we'll be very careful that they're not um taking over the project, taking over the company.
• 21:15
  SPEAKER_00: But on the other hand, um both being instrumental in their knowledge of Peru and knowledge of these kinds of deposits can really help a lot and just give investors a little bit of confidence that there's other people in the game that really know what they're doing in Peru or and in mining.
• 21:33
  SPEAKER_02: Absolutely.
• 21:34
  SPEAKER_02: Julian, uh, we've covered a bit, you know, quite a bit of ground here from what makes uh Pika Machai attractive uh to you know kind of where we stand in terms of development project and and uh and permitting.
• 21:46
  SPEAKER_02: And I think that gives our audience a much better understanding of both the optionality, opportunity, as well as the challenges ahead.
• 21:54
  SPEAKER_02: So before we finish, um I'd like to bring it all together and look at what comes next.
• 21:59
  SPEAKER_02: Um let me give You the floor for the last couple of minutes here.
• 22:02
  SPEAKER_02: Looking ahead over the next, let's say, 12 to 18 months, what are the most important milestones that investors should look for and be watching?
• 22:11
  SPEAKER_02: And why do you believe now is the particularly interesting time to take a closer look at Zali Gold?
• 22:17
  SPEAKER_00: Okay, thank you.
• 22:19
  SPEAKER_00: First of all, as soon as we get our drill permit and get started drilling, it'll take us, we expect it to take at least a month, probably six weeks to get the 3,000 meter drill meters drilled and bring the resource current.
• 22:35
  SPEAKER_00: I'm not sure how long that'll take.
• 22:37
  SPEAKER_00: Our our QP on um mining resource, he's a geologist, but resource work, um we'll be working on it, not the whole time, but as results are coming in, not just waiting until they're all there.
• 22:52
  SPEAKER_00: And and we are building a 3D model as well ourselves that that he'll work with to um to update the resource.
• 23:01
  SPEAKER_00: Then there'll be the PEA.
• 23:03
  SPEAKER_00: And as I say, we're working on the PEA concurrently with the resource.
• 23:08
  SPEAKER_00: Normally you would do your drilling.
• 23:11
  SPEAKER_00: Gee, do I have something economic?
• 23:13
  SPEAKER_00: Okay, let's do a resource model.
• 23:14
  SPEAKER_00: Okay, then let's see if it's economic.
• 23:17
  SPEAKER_00: But in our case, we're just updating.
• 23:19
  SPEAKER_00: So the resource work is resource drilling is underway, the engineers are on are underway already on what do they need to know since the feasibility was done in 2008, updating all those numbers, the costs.
• 23:35
  SPEAKER_00: And they'll have technically pretty much ready to go before the resource is even necessarily updated, but they'll be waiting for that, and then that would lock it in.
• 23:46
  SPEAKER_00: And very soon after we would be able to come out publicly with the numbers, you know, the cash flow numbers estimates.
• 23:53
  SPEAKER_00: Um having said all that, we uh there'll be there'll be basic, we're gonna base everything on the historical resource and what we know, and it's gonna be 8,000 tons per day operation.
• 24:07
  SPEAKER_00: Why?
• 24:08
  SPEAKER_00: Exactly the same as they said in 2008.
• 24:11
  SPEAKER_00: Because that'll allow us to produce them the most ounces possible per year with a leaching operation.
• 24:19
  SPEAKER_00: And that is the cheapest way to get gold out of the ground or to get produce gold and sell it.
• 24:25
  SPEAKER_00: And I don't see any reason to change that.
• 24:27
  SPEAKER_00: Now, at the same time that we're doing, you know, doing everything we need for those studies, because as I say, after the PEA, we'll keep it's just gonna be a strong, a current engineering program.
• 24:39
  SPEAKER_00: It's not do your PEA and sit back and look at it.
• 24:42
  SPEAKER_00: It's just gonna keep going, is my anticipation because I'm I can't imagine we'll have negative results based on what's known about the project.
• 24:50
  SPEAKER_00: So as that goes, then we're still we're getting really pushing that EIA detailed, as I said, and MAT testing and the few other geotechnical drilling.
• 25:00
  SPEAKER_00: At the same time, on the other arm, I uh sorry I have to use my arms, but you know, we're going two ways because the other way we're still drilling.
• 25:07
  SPEAKER_00: You know, I expect to be get the drilling done before Christmas that we need to update the resource, but then we'll be drilling all next year.
• 25:16
  SPEAKER_00: And right now we've lined up two drills.
• 25:18
  SPEAKER_00: We'll we'll add drills if we if we're that depends.
• 25:22
  SPEAKER_00: If your exploration is going well and you understand the numbers and everything and how things are going, if your assays are bottled up, the lab is bottled up, and you're not getting your assays fast enough, and you don't understand, then you'll slow it down.
• 25:34
  SPEAKER_00: But so it's not how fast can you drill?
• 25:36
  SPEAKER_00: It's how fast can you drill and consolidate all the data.
• 25:39
  SPEAKER_00: So, in any case, we're going to be exploring, we're going to be developing, and all at the same time.
• 25:45
  SPEAKER_00: Understood.
• 25:46
  SPEAKER_02: Understood, Joanne.
• 25:47
  SPEAKER_02: And yeah, thank you for that.
• 25:49
  SPEAKER_02: And uh, I'll turn the call over back to Tim.
• 25:52
  SPEAKER_01: Thanks, Dimitri.
• 25:53
  SPEAKER_01: Joanne, thanks so much for joining us today and giving us an update on what's happening with Zally Gold.
• 25:57
  SPEAKER_01: Best wishes as you head into the formal uh commercialization stage at some point.
• 26:02
  SPEAKER_01: And uh good to see you.
• 26:04
  SPEAKER_00: Okay, thank you very much.
• 26:07
  SPEAKER_01: Thank you for listening, and don't forget to subscribe, as well as visiting www.watertowerresearch.com to stay up to speed on the company's small cap written research reports, podcasts, fireside chats, industry specific symposiums, and conference schedules.
• 26:23
  SPEAKER_01: We will see you next time for another edition of the WTR Small Cap Spotlight Podcast.
• 26:28
  SPEAKER_01: Finally, a special thanks to the producer and editor of the podcast, Krista Fitzpatrick.