Christian Milau, CEO,


"Having an Ontario project in our portfolio helps to diversify our business and reduce geopolitical risk."

Can you tell us more about the location of the Greenstone project and its history?

We acquired Greenstone in 2021 through our acquisition of Premier Gold. More than 4 million oz Au had been produced in the region between 1940 and 1970 from a number of underground mines, but Premier was the first to look at developing an open-pit mine. They had done a bunch of exploration and engineering work and published a study that showed a 5.5 million oz deposit with the potential of producing 400,000 oz/y for 14 years. That certainly caught our interest, as well as its unique location in Ontario, Canada, which is one of the world’s best mining jurisdictions. There’s lots of skilled labour in the region and the project is right on the rans-Canada Highway with excellent access to roads, power, support services and other infrastructure. Construction is underway now and Greenstone will be the third or fourth largest mine in Canada when it’s operating.

How has inflation impacted your plans for the project and how are your navigating these challenges?

Mines worldwide are feeling heightened inflationary pressures on input costs. As logistics costs and fuel prices increase around the world, we are seeing many mining companies' budgets increase by 20 - 30%. We adjusted our original capital estimate for Greenstone from US$1 billion to US$1.2 billion to account for these changes. We also included a contingency of 14% to account for external pressures and the potential for further inflation. Fortunately, we witnessed heightened inflation before we started construction so we were able to anticipate and factor those costs into our construction budget.

How would you rate the jurisdictions you operate in terms of ease of doing business?

No jurisdiction is void of political risks, but we’re very comfortable working in the Americas and in all four countries where our mines are located. We started operating in Brazil five years ago when the government was undergoing transition and our experience has been very positive. Regulations have been streamlined and more efficient under the new government. Eastern California, where our mines are located, has a long history of mining and we are the primary employer in the region, so local communities are generally excited about the prospect of more jobs and business opportunities. As the Biden administration increases taxes our margins in California will decrease a bit, but it’s still a great jurisdiction for mining.

We’ve certainly faced some challenges in Mexico, but we knew when we acquired the Mexico mines that it was a challenging jurisdiction and that’s one of the reasons we chose to acquire the Greenstone project in Ontario. Ontario is renowned for its support of mining investment and it’s a great place to do business. Having an Ontario project in our portfolio helps to diversify our business and reduce geopolitical risk.

What is your outlook for gold?

Last year was extraordinary, with gold rising so quickly from US$1,500 to its all-time high in August of US$2,067. If gold increases too rapidly, however, it creates fear factors and inflationary trends, so I prefer a slow gradual increase. The current price is reasonable and we can all make money at US$1,700-US$1,800 gold, but gold equity valuations in the market are quite depressed. The spotlight is on cryptocurrencies, cannabis and electric vehicles, while gold is being somewhat forgotten. This presents amazing investment opportunities, particularly with rising inflation which is reviving interest in gold to some extent.

As governments continue to print money, uncertainty is peaking and interest rates are negligible. This dynamic is not sustainable in the long term, which will push the gold price up further due to depreciation of currencies, while gold holds its value. Gold’s role as a store of value is only becoming more prominent. The new generation is not as excited about gold because it can’t make 200% returns in a month like bitcoin. In my opinion, however, gold is an exciting investment because it is safe and holds its value in the long-term. For our sector the key is to protect your margins and keep costs under control to benefit from the eventual gold price increase.