Good day and welcome to the Hycroft Q3 Results Call. Today's conference is being recorded. At this time, I would like to turn the conference over to Tracey Thom. Please go ahead, ma'am..

Thank you. Good morning and thank you for joining us. Today, we'll be discussing the business update and third quarter operating results that we issued in a press release this morning, which can be found on our website.

On or about November 11, 2021, we plan to file a 10-Q for the period ending September 30, 2021, which will include our financial disclosures for the third quarter. Please read the press release and listen to this call in conjunction with reviewing the form 10-Q which will contain additional disclosures.

Also, please note that some information provided during this call may include forward-looking statements that involve risks, uncertainties and assumptions.

Even if these restaurant certainties have been materialized or the assumptions proven correct, these results may differ materially from those expressed or implied by such forward looking statements. All statements other than statements of historical facts are statements that could be deemed forward-looking.

A discussion of some of the risks and uncertainties and assumptions will be set forth in more detail in our press releases and SEC filings, including the anticipated 10-Q. We assume no obligation and do not intend to update any such forward-looking statements. I'll now I'll turn the call over to Diane Garrett, President and CEO..

Thank you, Tracey. Appreciate that. Good morning, everyone. And thank you for participating today on our call to discuss the business and operating update for the third quarter of 2021.

I'm Diane Garrett, President and CEO of Hycroft Mining, and with me today are Stan Rideout, our Executive Vice President and Chief Financial Officer, and Tracey Thom, our Vice President and Corporate Communications and Investor Relations.

Once I deliver my initial comments on the news release that we issued today, we will then open the call for questions. And as a reminder, as Tracey just noted that we do intend to file our third quarter financial results on Form 10-Q after the market closes tomorrow, November 11.

This new management team has been in place at Hycroft for just over a year.

And while all of us joined this company and anticipation of quickly ramping up production to full scale commercial sulphide operations under the novel process, we identified and subsequently disclosed to the market a number of items that must be addressed before any application of this process could be successful, or economic on a commercial basis.

While we've been working diligently over the past many months performing the necessary review of that process, conducting additional test work which actually is ongoing and continuing and engaging three independent consultants with expertise in the field of laboratory testing and metallurgy to review and peer reviewed this work independently.

Our team is extremely conscientious about de-risking a project up front in order to mitigate execution risk as much as possible.

And a big part of that de-risking involved the ongoing variability and mineralogy work across all the domains of the Hycroft ore body because that is absolutely critical to any mining operation, and must be completed before commercial start-up begins. So today, we announced the following key items.

First of all, we are ceasing the mining operations at Hycroft mine effective immediately. This is why my eyes align, our general manager and Jack Henris, our COO are not on this call with us today as they are meeting with our team at site. However, we will continue processing metal inventory off the leach pads until it's no longer economic to do so.

But the operation was started back in 2019 mining of the rock sides and transition allowed the company to pre strip the overburden with some revenue offsets as they were working to expose commercial scale sulphide ore.

Through our de-risking of that novel process, there are a number of findings from our work that indicate capital costs will be materially higher for that process, operating costs will be significantly higher. We have noted that some of the ore is not amenable to this process, and that sub ore is likely to perform below what was previously expected.

So it does point based on what we now know the economics will be challenging for the novel process. They do know however, that the chemistry of this process works. But if the application on a large commercial scale at high cross will require more work will not be applicable to the entire deposit and also will be higher costs.

So with our change in focus from the Tuesday, cheap oxidation and leech to a milling operation, we have ample time to align the remaining pre-stripping of the oxide and transitions and have that coincide with the start-up of commercial scale sulphide operation.

Secondly, as we announced today, with respect to the technical studies that are currently underway and expected to be completed in the first quarter of 22, we have run a number of pit optimizations in order to analyze the input value of the ore body under various sulphide processing scenarios.

Without exception, the pressure oxidation or POX process generates significantly higher relative economic value at Hycroft. Moreover, that value is highly leveraged to even modest increases in gold and silver prices.

There were studies and test work in the past that also demonstrated milling with a viable option for Hycroft and while construction began by our predecessor company, there were a number of factors that precluded the implementation of a mill, including lower gold prices and financial struggles by that predecessor company at the time.

So we do know that milling works at Hycroft.. The Hycroft asset is truly world class.

I mean, I don't think anybody denies it is a significant mineral endowment with hundreds of millions of dollars in infrastructure that exists on the site today, the mile is permitted provide the heat bleach and the milling operation and is situated in one of the very best mining jurisdictions.

An asset like high Hycroft deserves the thoughtful care and attention to not be driven by market expectations or commodity prices, that to be looked at through the lens of what it is. It is in the top five largest primary gold projects in the world, with a significant silver component having the largest silver resource in the US.

And our task is to unlock and deliver that value to the shareholders in the best way possible. And how do we do that? From all of our analysis to date, we believe that the milling operation using the POCs process is the right approach, high craft or is very amenable to this process.

And with the higher recoveries from POCs, over all the other options we've reviewed, including the novel process, we believe that this is the right path for Hycroft. It is proven, it is reliable, and it has much less risk. While the capital that's required for the mill may be more than originally anticipated for the novel process.

Once you factor in the agglomeration circuit and the materials handling system, the on/off pads and solutions management systems. The expected economic return and reduced execution risks far outweigh that incremental capital requirements. So our focus going forward is solely on the POCs pre-feasibility studies.

We also want to follow up on many of the areas that we've identified that are prospective for higher grade ore with the targeted exploration drilling program. Many of the mines in Nevada started up with low grade oxide heat bleach operations, not unlike Hycroft bid and a long history of heap leach operation.

Ultimately, many of these mines have transitioned to underground mines, when the feeder system to the near surface low grade ore was discovered through drilling. It was postulated by many geologists that there were potential feeder systems for both gold and silver at high cross.

However, the focus in the early 2010s, and up until recently was on step out drilling to expand the pit. It is well known that Hycroft has banded veins similar to other high grade projects and mines in Northern Nevada. And we have actually seen evidence of these banded veins as we mined through ore.

And the southern part of our claims also, we found placer style visible gold that has not been followed up on with drilling. It's short, there was minimal effort and resources at Hycroft to follow up on these opportunities or to work to identify the feeders of this enormous system.

In September, we announced that we had conducted some limited exploration drilling to follow up on prospective higher grade areas. And we encountered some noteworthy intercepts which we disclose to the marketing can be found on our website.

A particular interest was a 52 meter intercept in the vortex zone that returned 2.47 grams per tonne gold, and 25.5 grams per tonne silver. And this is some of the highest grade gold intercepts we've seen at Hycroft and it warrants additional attention.

We invite you to look at our most recent presentation on our website, which detail some of the target areas that we've been reviewing. And that we have identified that we would like to follow up on with the drill program. With respect to our stock price, no opinions, and sorry, and in our opinion, in no way reflects the value of this asset.

And by the way, many of us in management and board are very engaged shareholders and we're committed to realizing the value inherent in this asset. We can certainly appreciate the disappointment when we communicated that there was more work required to do at Hycroft before reaching commercial scale sulphide operations.

But we also believe that the decisions to narrow our focus on the PFS, and to cease mining to preserve our cash for the ongoing development programs provide some level of comfort that this team is ready to take the right steps and is extremely capable and highly qualified and operational execution and in mitigating risks, which all translate into shareholder value.

And related to Hycroft, we had two large shareholders who closed funds, and were required to liquidate all holdings in those funds, which also share - held shares of Hycroft. So for approximately four months, nearly 8 million shares of Hycroft are sold, which put significant pressure on our share price.

And I think everybody's aware of that of and what we've seen over the last several months. We believe the future of Hycroft is compelling as we complete POCs PFS in the first quarter of next year, and also engage in a robust exploration program designed to target these prospective higher grade areas.

This team has established a strong culture with a focus on safety and environmental compliance. And we continue to see incredible improvements in our tripper rate with another decrease of 0.41 at the end of September, and that's an 82% reduction over September of 2020.

So I'm very, very pleased with the focus on not only operational efficiencies and improvements, but definitely on the safety side, which is number one for us. Cost control measures and improvements in these efficiencies will benefit the ongoing process of the leach pads and Merrill-Crowe plant operation as we continue to leech material off the pad.

We'll continue to provide periodic updates on the development of the POX PFS, and we look forward to presenting a path forward once that PFS is completed early in the New Year. In closing, I am very grateful for this team and the amazing work that they've done in the past year.

Going forward, I am confident that we can create a long life mine that will benefit generations of miners. And so with that, I would like to open it up to Q&A. And then I'll make some closing comments before we end the call today..

Operator:.

Okay, thank you, operator. Well, that's amazing. We've either answered everybody's questions with our comments, because we do have quite a number of people on the call today. And I want to thank you all for joining us.

If you would like to follow up, I think everybody's got our contact information, it can be found on the press release, please reach out to us. And we'd be more than happy to answer any questions you have. So as I mentioned earlier, we are hard at work conducting all the necessary work to develop the best long term plan for Hycroft.

And we really appreciate the support and patience of all of our shareholders and stakeholders as we look forward to delivering this plan that provides that value for our shareholders. Before I say goodbye to everybody, I’d like to get on with your day. I also want to thank the entire team at the Hycroft mine for their hard work.

And we could not have made the significant improvements outside without their commitment and dedication to safety and operational improvement, while at the same time navigating through the challenges of the novel process. I'd also like to thank Jack Henris for his guidance on the mining and Mr. David Kirsch for his leadership of Chairman of Hycroft.

So thank you very much for joining us today. And please do visit our website and reach out to us with any questions that you may have. Have a wonderful day everybody. Thank you..

This concludes today's call. Thank you for your participation. You may now disconnect..