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Good morning. My name is Polly, and I will be your conference operator today. At this time, I would like to welcome everyone to the Copper Mountain Mining Corporation's Fourth Quarter 2020 Earnings Conference Call. [Operator Instructions] Please note that comments made today that are not of a historical factual nature may contain forward-looking statements. This information, by its nature, is subject to risks and uncertainties that may cause the statements' outcome to differ materially from actual outcome. Please refer to Slide 2 of today's presentation and Copper Mountain's fourth quarter 2020 management discussion and analysis for more information. I will now turn the call over to Mr. Gil Clausen, President and CEO of Copper Mountain Mining. Please go ahead, sir.
Thank you, operator. Good morning, everyone, and thank you for joining us. Starting on Slide 3. As you can see, I have with me Rod Shier, our Chief Financial Officer; and Don Strickland, Copper Mountain's Chief Operating Officer. I'll begin by providing a brief update and summary of the quarter, and Rod will speak to our financial results, followed by Don, who will provide a more detailed discussion on our operation. And then we'll wrap up with a project update and our outlook. Then we'll open the call to questions. Turning to Slide 4. We finished the year strong. As forecast, the fourth quarter was our strongest of the year, posting record production for copper, gold and silver. We saw our total annual production increase from last year, exceeding our guidance range. We also saw quarterly and annual unit cost reductions with 2020 all-in costs, or AIC, within our reduced guidance range. The primary driver of the production and cost was the higher grade we began to experience in the fourth quarter. Higher grades are expected to continue through 2021. Turning to Slide 5. The higher copper price, higher production and lower cost is allowing us to generate strong cash flow. Our financial metrics improved year-on-year across the board with our cash position materially increasing. Notably, our net debt-to-EBITDA has declined significantly year-on-year. We finished 2020 in a solid financial position with $86 million in cash. We were flexible and nimble in implementing a revised mine plan early in 2020, and we focused on minimizing our costs and maximizing margins without sacrificing our long-range plan. In May, we materially improved the economics and operating metrics at our Eva Copper Project with a bankable feasibility study. We extended Eva's mine life, increased its NPV and production while reducing costs. Then in late November, we announced an updated life of mine plan for the Copper Mountain Mine, which included a mill expansion to 65,000 tonnes per day, demonstrating basically an over 60% increase in NPV to around USD 1 billion based on $3.15 copper. In 2020, we focused on operational excellence and project optimization. We begin 2021 in a position of strength, and we'll continue to execute on our operational and growth plans. I'll now turn the call over to Rod, who will go into more detail on our financial results.
Thank you, Gil. Starting on Slide 7. As noted by Gil, the company had a very strong year, and the financial results and year-end cash position definitely show it. Revenue for the fourth quarter of 2020 was $106 million on the sale of nearly '19 million pounds of copper, approximately 7,200 ounces of gold and about 96,000 ounces of silver. Higher revenue was a result of higher copper and gold sales, although it should be noted that copper production during the quarter was approximately 4 million pounds higher than sales as a result of timing of shipments. The revenue associated with these pounds will be recognized in early Q1 2021. Increased revenue was also a result of higher metal prices, which averaged USD 3.35 per pound of copper and USD 1,867 per ounce of gold as compared to $2.67 per pound and $1,480 per ounce for the fourth quarter of 2019. Revenue for the full year of 2020 was $341 million on the sale of 73 million pounds of copper, approximately 26,000 ounces of gold and 323,000 ounces of silver as compared to revenue of $288 million for 2019. The 2020 revenue included a positive mark-to-market adjustment of $25 million for unsettled shipments at year-end, which is due to the increasing metal prices experienced during the year. Cost of sales for Q4 2020 was $59 million as compared to $72 million for Q4 2019. The decrease in cost of sales is attributable to the operational initiatives implemented at the mine that resulted in reduced haulage costs during the quarter. This, combined with higher copper production, had the effect of decreasing our unit cost, resulting in a gross profit of $52.8 million for the fourth quarter of 2020. This compares to a gross profit of $11.3 million for the fourth quarter of 2019. Cost of sales for the full year of 2020 was $237 million as compared to $263 million in 2019. The decrease in cost of sales for the year is also a result of the cost-saving initiatives implemented throughout the year, which allowed the company to realize a higher net margin than would otherwise have been achieved from just metal price increases alone. Turning to Slide 8. As you can see, this resulted in a gross profit of about $47.3 million and a net income of $28.5 million in Q4 2020, or $0.10 per share. Net income for Q4 2020 included a noncash unrealized foreign exchange gain of $13.9 million, which is primarily related to the company's U.S. dollar-denominated debt. This compares to a gain of only $5.5 million in Q4 2019. The gross profit for the year ended 2020 increased fourfold to $105 million as compared to a gross profit of $25 million for 2019. This was a direct result of the increased sales in metal prices experienced during the 2020 year. Net income for 2020 was $50 million as compared to a net loss of $26 million for the year ended 2019. For the fourth quarter of 2020, the company recorded EBITDA of $57 million. And after backing out the unrealized foreign exchange gain and the mark-to-mark adjustments for the quarter, adjusted EBITDA was approximately $34 million. For the year ended 2020, the company recorded EBITDA of $118 million as compared to $3.6 million for the prior year. Adjusted EBITDA was $88 million for the year ended 2020 as compared to $30 million for the year ended 2019. Again, the strong showing of EBITDA and adjusted EBITDA is directly attributable to increased sales, reduced cost of sales and higher metal prices experienced during the second half of the year. Cash flow from operations was $51 million for the fourth quarter of 2020 and $122 million for the full year. This strong result has allowed us to end the year with approximately $86 million in cash on-hand, an increase of $53 million over the prior year-end, definitely a strong year for the company. I will now turn the call over to Don.
Thanks, Rod. Starting on Slide #10. The mine continued solid execution of the plan, delivering quarterly performance above expectations. Ore supply for the quarter was about 75% from Phase number 3, with the remainder from Phase number 2. Phase number 3 is the source of the higher-grade ore mill during the quarter. Phase number 3 is planned to be the main ore supply throughout 2021, continuing to provide higher grade mill feed for the year. Approximately 65% of the 2021 mill feed will be from Phase number 3. Phase number 2 will supply about 25% of the 2021 mill feed. We have now started stripping Phase number 4, which is the next pushback located on the Northeast side of the main pit, as noted on this slide. It is on the offset side of the pit from Phase 3 and will further open up high-grade ore at the bottom of the pit. Phase 4 will provide about 10% of the mill feed in 2021 and will be the main ore supply in 2022. During the latter part of Q4, with the increase in copper price, we did increase our stripping to advance the 2021 mine plan. Also, during the quarter, we started construction to modify our main ramp to support the trolley assist installation, which is approximately 1 kilometer long and will run from the bottom of the main pit to the primary crusher. The Trolley Assist ramp section will support ore haul from the main pit and for New Ingerbelle over the life of mine. We are targeting to start commissioning our Trolley Assist trial in late 2021. Our objective is to reduce our GHGs by replacing diesel with electricity. For context, we will reduce haul truck fuel burn from about 400 liters per hour to about 30 liters per hour while operating on Trolley Assist. We expect to reduce our GHG emissions in excess of 100,000 tonnes of CO2 over the life of mine with the section of Trolley Assist. We also expect to significantly increase uphill haul age speeds with Trolley Assist, thereby reducing our overall truck hours. This trial will allow us to define the improvements in productivity and unit operating costs. Turning to Slide 11. The mill delivered record copper, gold and silver production during the quarter. This was a significant achievement with back-to-back monthly copper production records achieved in November and December. During the quarter, we did experience some oxide copper in the form of malachite, which is not recoverable in our sulfide flotation circuit. This resulted in slightly lowering our overall copper recovery for the quarter. This oxide is from historical underground collapsed stope zones that we mined through. This won't -- this impact won't be material going forward as only about 2% of the 2021 mill feed is planned from these old stope zones. And in these areas, our geologists have been conservative with projected grades. We have experienced positive reserve reconciliations that more than offset any impact of oxidation. The focus in the mill during the quarter was on adjusting to the significant increase in the mill feed grade, the associated higher copper production and a change in mineralogy from mainly [ chalcopyrite ] to a higher ratio of 4:9:4. We did slow the mill tonnage rate at times during the quarter to maximize recovery on slower kinetic bornite ore and adjust the operation of the copper concentrate filtering circuit to handle the approximately 30% increase in concentrate production from historical levels. We are presently investigating opportunities to adjust reagent mix and minor flow sheet changes to maximize throughput and recovery while processing the slower Kinetic Bornite ore. Turning to Slide #12. The mill expansion to 45,000 tonnes per day, which includes the installation of a third ball mill, is currently underway. The installation in ball mill 3 will increase throughput and achieve a finer grind to also improve overall metal recovery. Construction activities are progressing well. The new mill maintenance building is complete, structural and concrete demolition within the mill building is also complete, and the area is being excavated in preparation for installation of the mill foundation. We are on schedule for commissioning by the end of the third quarter of 2021. Turning to Slide 13. During the quarter, we continue to move forward with our ESG initiatives. As previously discussed, we are a member of the Mining Association of Canada, and we are committed to fully implementing the Towards Sustainable Mining, or TSM, standard. We're making excellent progress implementing the 8 protocols of TSM and exceeded our 2020 targeted AA rating on tailings management, safety and health and aboriginal and community outreach. We remain focused on achieving a minimum level of an A rating on the remaining protocols in 2021. We completed our annual reclamation work in Q4, achieving our program scale up to 25 hectares per year. Our commitment is to complete progressive reclamation at 25 hectares per year, and we continue to advance these designs in our life-of-mine plan. We also continue to move forward with our plans to significantly reduce our carbon intensity by over 50% during the next 5 to 7 years. Carbon intensity is measured in tonnes of CO2 output per tonne of copper produced. We'll achieve this goal through electrification and copper production increases. This is progressing well with our Trolley Assist plans discussed earlier, our ball mill number 3 project that is under construction and our 65,000 tonne per day study published in Q4. We are on track. The progress we're making is exciting, and we will continue to build on these plans in 2021. I now turn the call back to Gil.
Thanks, Don. So turning, please, to Slide 15. We have several very low-risk organic growth projects at Copper Mountain Mine. As Don mentioned, we have the ball mill 3 expansion project to increase throughput to 45,000 tonnes per day. That's currently underway. We also have the further expansion potential to 65,000 tonnes per day, which we announced new life-of-mine plan on November of last year. The life-of-mine plan builds on the 45000-tonne-per-day expansion as well as the integration of the New Ingerbelle pit. With the 65000-tonne-per-day mill expansion, Copper Mountain Mine's NPV increasing to about USD 1 billion as a result of higher production, lower costs and improved efficiencies. Copper equivalent production for the first 10 years of Copper Mountain increases to about 140 million pounds. This includes over 100 million pounds per year of copper and average gold production of about 60,000 ounces per year. When New Ingerbelle comes into production, along with this expansion, we will have substantial leverage to gold and silver, which better positions Copper Mountain over a lot of our peers. We expect to make -- and provide guidance on the 65000-tonne-per-day mill expansion and schedule by the end of this year, following the completion of the 45000-tonnes-per-year mill expansion. All of these projects that the Copper Mountain Mine are planned to be internally funded through the mine's cash flow. Turning to Slide 16. In addition to the Copper Mountain Mine, we also, of course, have another high-quality growth project Eva Copper Project. In May last year, we completed the bankable feasibility study that showed improved metrics across the board. Eva is a rare asset. It's one of the only projects in the world in a Tier 1 jurisdiction that has a long mine life and will produce over 100 million pounds of copper year and has below median cash cost and CapEx well below $500 million. And it's the only copper project in all of Australia and the Americas, North and South with these positive attributes. So low capital, low operating cost, material copper production and 20 of upside still remaining in expiration of the known satellite deposits. There's a lot of value and plenty of options for Eva, and we are currently assessing the best development strategy for Copper Mountain shareholders. In our view, Eva is a low-risk mine development, especially as copper prices continue to strengthen, and we believe it merits development and should be built. We expect to provide clarity on our plans for Eva no later than the next quarter. Continuing on Slide 17, we're set to deliver on exciting year in 2021. Production is planned to increase about 22% to the range of 85 million to 95 million pounds of copper. And all-in cost is targeted to remain low at between $1.80 to $2 per pound. The primary drivers are mining higher-grade ore from Phase 3 of the main pit and throughput and recovery increases later in the year. We had scheduled -- or we had rescheduled, rather, the mining of Pit #3 in March of last year to better match the higher grades with potential higher copper prices later in the year. And we started to really see the benefits of this decision in the fourth quarter through the significant cash flow margins we experienced. And as we complete the installation of the third ball mill in Q3 of this year, we will start to see those higher throughput and higher recoveries in the fourth quarter, with copper prices continuing at current levels. And with higher copper production and lower costs, we expect another strong financial year to set the foundation of our multi-tier growth plan. With that, I'd like to open up the call for questions.
[Operator Instructions] And your first question comes from the line of Orest Wowkodaw with Scotia Bank.
I'm just curious on -- you've got a lot of projects, obviously, on the goal, a lot of exciting growth ahead. Just wondering about sequencing everything. And when could we anticipate board approval for the Copper Mountain expansion to 65,000 tonnes a day. Is that likely going to come this year or not?
Orest, yes, we do -- we have -- I think, we have a natural sequence of development on these projects. And if you think about the work that has to be done in order to be able to develop this mine and do the expansion at the Copper Mountain Mine through 65,000 tonnes per day, we've got a -- as I said, we've got guidance coming next quarter on the development plans for Eva. And then we expect fully at the end of the year to provide guidance and the decision on the project schedule for the 65000-tonne-per-day expansion.Of course, we're focused right now on the 45,000 and getting that commissioned and completed in the third quarter. So if you think about a natural timing for these events, it would be I think, more sequential than overlapping. And the timing relative to 65,000 and Eva is going to be one that's going to be discussed at the Board level this year. And we'll provide full guidance on that schedule towards the end of the year.
Okay. And sorry, Gil, just so I understand, so are you suggesting then that either -- that you look at building either Eva or the 65000-tonne-a-day expansion, you wouldn't try to do both at the same time. Is that the right understanding?
So if you think about the workflow that needs to be done, as you may be aware, for the 65,000 tonne a day, we have an environmental permit that allows us to bill about 50,000 tonnes per day now. So with our 45000-tonne-per-day expansion, we have the ability to mill up to 50,000 tonnes per day. Then we have to apply for a permit amendment on the environmental permit to go to 65,000.So there's that aspect of workflow that needs to be done, complete the revision of our existing mining permit or license for Ingerbelle, which is within our operating permit, which we expect to achieve within the next 12 months or so. And if you start looking at that workflow and then the engineering required for 65,000 tonnes per day, you've got a time line that allows for a gap between the 45,000 and the 65,000 being implemented. And actually, within that gap, if you want to advance Eva, Eva is a permitted project with its engineering complete, we can move into basic engineering.So there's a window of opportunity to actually do these things in a rather sequential fashion that makes sense, which won't overtax, certainly won't over tax the balance sheet and the natural order of these projects.
I see. Okay. So ideally, they need sandwiching Eva between the 45,000-, the 65000-tonne expansion. Ideally?
We haven't made that decision yet, but it's logic. It's a very logical sequence.
Okay. And then just last question for me. Just on the great sequencing this year at Copper Mountain. Obviously, a big increase in grade there in the fourth quarter to 0.40. How do we -- how should we think about that grade profile this year from a quarterly basis? Like is it -- do you expect it to revert kind of back to where it was pre Q4 as it really is the first quarter? Or is it more of a gradual decrease?
I would suggest that we're going to see higher grades on average this year than we did last year. There's no question. I don't foresee a significant change in great profile over the average at Q3, Q4, something in that range. It's going to vary a little bit as we move through different areas of Pit 3. But Pit 3 has got stronger, Pit 3 -- or sorry, I should call it Phase number 3 has higher grades than the other areas of the pit in general. So I would expect that you're going to see relatively good -- great performance through the year, and you're going to see a significant increase in production in Q4 as the expansion comes in. So it's a little back weighted because of the expansion coming into play. But in general, there'll be minor grade variances throughout the year. So I think a pretty consistent year in terms of upgrade performance this year is our forecast.
Your next question comes from the line of Craig Hutchison with TD Bank.
Just a question on recoveries. I mean Don talked about it in the opening remarks [indiscernible] issues, but just so it's maybe clear for -- what should we be thinking in terms of recoveries sort of in the first half of the year before you get to the 45000-tonnes-per-day expansion? And then sort of what are you thinking once the 45000-tonne-a-day expansion is now complete?
Yes. Certainly, we expect to see recoveries in that 80% range for the year. And so plus or minus a couple of points. And then towards the end of the year, as the 45000-tonne-per-day expansion comes on, depending on the mineralogy, we expect sort of a 3% to 5% improvement in recovery. And so we expect to see recoveries moving into the low 80s, low to mid-80s and once it's -- the mill is fully commissioned.
Sorry, just to add on to that, Craig, I don't think we've changed anything that we had in our analysis of the 45000-tonne-a-day expansion before. It's really on average, if you look forward, a change from about 80% to 84% recovery with the finer grind. And it's, as Don pointed out, going to be mineralogically dependent. So the only impact that we can see on recovery is if we do get, as we did in the third quarter, a little bit of oxide, but you've got the higher grade. Some of that, it's been oxidized, will come in the form of malachite just goes right through the mill. So you're going to get it in your head grade, but it's going to go right through the mill. And because it's oxide. So it's -- it may have the effect of slightly decreasing the recovery in that area as that flows through the mill. But generally speaking, we've more than accommodated that with our great projections in those areas.
And your next question comes from the line of George Topping with Industrial Alliance.
See, could you give me more details on the activities and news flow that you plan for Eva through 2021?
Well, George, we've -- as we mentioned, we're -- we anticipate that we're going to be able to deliver to our Board and analysis of options for the development of Eva. And as we had previously discussed on calls and guidance, we said, look, we've been assessing -- partnering opportunities. We've been assessing go-alone project financing opportunities on Eva. And we've also been looking at other various forms of strategic initiatives with respect to expect to that -- with that project.But I would have to say that we will be in a position to be able to deliver a recommendation to our Board in the not-too-distant future, and I would expect that early next quarter or mid-next quarter, we should be able to provide clear guidance on our plans for the Eva project.
Okay. So no drilling or optimization studies between then and now. Is that fair to say?
No. We did a lot of work to get the feasibility study completed in 2020, the update done then. We've got about 16 years. There's plenty of work to be done on known-satellite deposits that need to have some of their -- some additional drilling on to -- but I think that, that's easily done at any time, certainly between now and construction or even at the beginning of the mine. The additional deposits that we're looking at in the area and that we're gearing up for exploration work this year are on looking -- basically, they're looking for the next mine in the portfolio. We've got that big land position as you are well aware in the Mount Isa inlier. And we're gearing up to do some exploration. And with the objective of looking at a discovery of another deposit of significance that could be another stand-alone operation.
Got it. And just a quick follow-up just for a matter of interest. The 50% reduction in carbon over the next 5 to 7 years is not being costed out to give us an idea of the CapEx that would be required to achieve that target.
Yes, George, we're certainly working through that. I would say, with Trolley, we've got a well-defined plan for this trial. And with the additional pit electrification, we're working through those studies right now. And what comes out of this stage at Trolley will certainly define the next 2 stages of Trolley that we've actually cost it or that we've designed. So for Trolley itself, we do -- we -- the first phase here, we -- the capital will be -- we've got some funding coming through from the government and -- to support that project. And so we expect the cost -- the project will be pretty much cost-neutral, I guess, over the next couple of years. And so that's what we're focused on, just defining exactly how much money we'll spend on Trolley. But this initial plan, I know this is a little bit vague, to be honest. But this initial plan is planned to be pretty much cost-neutral over the next 5 years.
Good stuff. Okay -- yes, go on.
George, just a couple of points on that. So we've been the, I think, pleased recipient of really significant support from the province of British Columbia and also BC Hydro through Powersmart initiatives. We're just straightening out our main haul road. There's no significant costs associated with that. As a matter of fact, we expect cost savings as we straighten out the main ramp to be able to accommodate a straight haul section on -- and put the power lines in on the main haul ramp up to the crusher.The fuel burn is significant, the fuel burn reduction is significant. So on a straight energy basis, we expect to save significantly in terms of those operating costs with respect to that segment of the haul. The capital we've been investing in new trucks as we replace our truck fleet with the -- our new Komatsu trucks that are equipped with the ability to put the pantographs on and utilize the electricity from the grid through the installation that we're planning this year.So there's really no additional capital costs associated with the retrofitting of trucks as we replace our truck fleets, which we're in the process of doing now as some of our older fleet ages out. We're replacing the Trolley-ready trucks, and there's really no significant increase in costs associated with that. So the real cost is in the construction of the lines itself on the ramp.And as Don pointed out, that's been well offset by support from the provincial government, who's also very interested in the outcome of this trial and the ability to be able to reduce GHG. So I think in the long run, we're going to see a very strong economic benefit from this initiative and not just the economic benefit, but of course, the environmental benefit, which we believe will be significant.
And your next question comes from the line of Pierre Vaillancourt with Haywood.
Yes, actually, George asked most of my questions concerning Eva. But I do want to clarify. I think last quarter, you discussed how a sale of the asset was a possibility. Is that still the case?
That was one of the options that we were looking at the time. And I think it's -- I guess, I would have to say that the sort of the copper prices run away from that strategy, so to speak, Pierre, I mean, just to give a preview look. I mean there are still interested parties for sure. But it's getting to the point here with the strengthening that we're seeing in the copper market. And -- but that's getting to be on of the less favorable alternatives, I would say, at this point in time.
Okay. And to what extent does your debt preclude you from taking this on? I mean are -- in other words, are you going to be -- do you feel that you'll need to have a partner in this? Or is this something you could do it alone?
Well, as you well know, Pierre, we've got some debt on our balance sheet. It's very friendly debt. A lot of it is related-party debt. But I think if we're going to be looking at the development of [ Eva ], you should be looking at a project finance. And that project finance, we would anticipate that on a, let's say, roughly, including an overrun facility, a USD 420 million project with an overrun facility would be something that could be geared to 60% or 65% or maybe even as high as 70%.In addition, we've got a secondary gold production there that could be the subject to a stream, which would leave, I think, a very manageable amount of equity required to be able to do that project. But I think to your point, we would look at the potential for doing -- we might look at the potential for doing a little bit of balance sheet restructuring between now and then, I think, to be able to ease and improve the cash flow up through the parent to be able to provide the ability to self-fund all these activities without having to significantly go into any sale of equity on our part to be able to deliver the projects.So those are the objectives that we're looking at and that we're working on. And we're working with the financial advisers right now to be able to put those kinds of plans together so that we can talk to our Board about the options, including partnering options in the second quarter and get that guidance clearly out to the market.
So -- but is the favored option to take it on yourself? Or as you say, in this copper environment? Is this something that you would ideally like to do yourself?
Well, I mean, look, I'm not going to prejudge for our Board of Directors. It's clearly their decision to make, but I have to say, everybody is very bullish about copper and our organic growth opportunities. So I think I'll just leave it at that for the time being.
Okay. And just a clarification on ores about timing, what -- I mean, in this environment, how soon do you think you could move on development here because for sitting on it for a while. And I think it's great take to see this move forward.
So Pierre, I mean, look, we did do -- we have done a lot of work. We did some extra drilling and work on the project. And I think we created a lot of additional value. Certainly, our execution plan that we have now is very solid. As we move in to continue work here, we're moving into the basic and detailed engineering phase. We're not going to actually break ground on anything, whether it's this project or the 65000-tonne-a-day expansion project at Copper Mountain in TAL, our engineering is significantly advanced, probably to the level of about 80% engineered before we break ground. I mean there are certain scopes of work that we want to have fully defined with respect to project execution.So I mean these things are generally phased in terms of the staged investments you make on these projects and larger projects. But I think we are now more than ready to be able to kick that off. So really, the fundamental piece that we have to get resolved here is just to put the project financing and project components together that way, and then we'll be ready to make a firm decision on a start and give you a firm schedule as to when we believe we could be commissioning.
Okay. So how about project financing? And is that something you want to line up next quarter or what?
Well, we we're working on it. We've been working on it. We're -- we've -- as I said, we've retained advisers to work with us on it. And generally speaking, depending on the route you take, whether it is -- whether there's a component that's, let's say, a bond or there's a component that's traditional project debt financing. There's a different sort of timeline. And there's a different amount of work. I would suggest that traditional project financings would take anywhere from 6 to 8 months to complete from start to finish.
And your next question comes from the line of Stefan Ioannou with Cormark Securities.
Most of my questions have been answered. But just curious, I mean, obviously, handful with Eva and the 45,000 and 65000-tonne-a-day expansions. And also, at Copper Mountain you obviously, have a massive resource base beyond the current reserve. But just wondering, can we anticipate any sort of additional sort of deep exploration at Copper Mountain this year, like the sort of some of the success we saw in the fall at beneath New Ingerbelle? Or is it more focused on development stuff for this year?
Stefan, appreciate the question because we have a lot of exciting exploration opportunities at both, obviously, in Australia, which we already touched upon but specifically at Copper Mountain. Yes, you saw that really outstanding drill results we had later last year with respect to Ingerbelle. And we're putting together the program and we funded a program to do exploration at Ingerbelle this year just to really try and answer the questions about that gap between these big high-grade zones that we have below the existing reserve pit.So that work is going to be done this year. In addition, we also have a significant amount of upside exploration under the, what we call, the North pit. We've got an open deposit there, very good grades, very good gold grades as well. It's the one that's right beside the primary crusher basically. We're going to be putting in some deeper holes in that pit. And it's a really shallow pit anyway.So when I say deep holes, they're not that deep, but they're deeper than what we have. And we're going to test the gap between that pit and one of our other pits that we mined out, which was Virginia, where we believe there may be a strong geological connection. We're going to test that.So there's a lot of upside there. And also, in the Phase 3 area, Phase 4 area, just that whole east wall of the old Pit 3, that wall needs to be tested some more and the older audit, we know, extends at depth. So there's great opportunity at Copper Mountain first for significant resource enhancement there. From our perspective right now, at our existing mining rate, we've got about 30 years of reserves. And -- but what we want to be able to do is really get a strong determination as to where this resource potential is going and the sequencing, potential sequencing of these deposits in the long run.Right now, we see a lot of production coming out of Pit 3 and Pit 2, it will swing more heavily into Ingerbelle in a few years. But -- and then copper North is going to play in as well. So we need to do a little bit more deep work, understand the resource and the potential of these resources in terms of sequencing, and then we're going to start to do some infill drilling to -- once we've got a good sense of the direction, we're going to put the money into doing the infill drilling to convert to reserves.Because, look, seriously, right now, currently, right now, we have about 50 years of known resource that just requires some infill drilling. And so the potential of Copper Mountain here is just incredible.
Something beyond 65,000 tonnes a day eventually, who knows, right?
Who knows? Yes, yes. We still don't have a good sense for what's the optimal production rate at Copper Mountain. It could be up, it could be up there.
And at this time, there are no further audio questions. I'll now turn the call back over to Mr. Clausen for any closing remarks.
Thank you, operator. Just I want to thank everybody again, for joining the conference call. And once again, we're getting close to the end. So everybody, please stay healthy and look after yourselves. And we hope to see you all soon.
Ladies and gentlemen, this concludes today's conference call. Thank you for your participation. You may now disconnect.