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A flawed processing plant and some 鈥減oor decision making鈥� at TMAC鈥檚 Doris North gold site led to struggles meeting production expectations during the mine鈥檚 first two years of operation.

That鈥檚 a candid admission from Jason Neal, who became the company鈥檚 president and CEO in January 2018. Since taking over, Neal has overseen the retrofitting of the mine and the fine tuning of ore throughput and gold recoveries, getting both measures much closer to reaching stated objectives.

The improvements contributed to record gold production of 34,080 ounces at the Hope Bay property in the fourth quarter of 2018 and unparalleled revenues of $51.4 million.

鈥淲e鈥檝e made the big investments in the plant,鈥� Neal said. 鈥淲e鈥檙e happy with the progress we鈥檝e made for sure, but we鈥檙e not satisfied that we鈥檙e done yet.鈥�

In recapping TMAC鈥檚 accomplishments to date, Neal listed the establishment of infrastructure and a 300-person camp, assembling a team to achieve operational status and 鈥済reat relationships鈥� with the Kitikmeot communities and regulators.

鈥淚 really would have loved for us to be profitable as well, but we have a foundation that鈥檚 been formed,鈥� he said. 鈥淭he mistakes are sunk and now it鈥檚 a matter of moving forward in a profitable way.鈥�

In total, TMAC has spent close to $500 million at Hope Bay, Neal noted. That created a mountain of debt and Neal, who has a background as a mining investment banker, admitted he was concerned by the amount of money owed when he arrived. As of Dec. 31, 2018, TMAC had $166.7 million (Canadian) outstanding on its debt facility, down from $202.2 million in the third quarter.

The junior miner managed to raise $90 million through the markets in October, putting $57 million toward debt reduction and allotting some to exploration.

鈥淚t helped get us into a stronger position,鈥� Neal said. 鈥淚 would say we鈥檙e very prudent about paying down debt. We made another significant debt payment at the end of January that was scheduled, a bit more than $10 million Canadian was spent. If the operations perform as we鈥檙e expecting them to this year then we鈥檒l slowly work down the debt during the year. Ultimately, we want to get the balance sheet healthy because that鈥檚 what allows us to attract more capital for our next steps.鈥�

Revenues and royalties

Optimizing operations and profits will benefit not only shareholders but the Kitikmeot Inuit Association (KitIA), Neal said.

鈥淭he revenue comes in royalties so they (the KIA) would like to see us producing for as long as possible and producing in any one year as much as we can, responsibly, because that will drive the revenues,鈥� he said.

Paul Emingak, the KitIA鈥檚 executive director, said the organization is seeing TMAC鈥檚 progress in ramping up production and working toward profitability.

Neal also spoke of the support Inuit organizations, including the KIA, have shown in helping the company obtain regulatory permits.

鈥淚 think they鈥檝e seen us to be good citizens in getting the mine going in the first place,鈥� he said.

TMAC鈥檚 other major objective this year is exploration to expand upon the 4.8 million ounces of measured and indicated gold at its Doris, Boston and Madrid deposits.

TMAC is allocating $20 million for exploration in 2019, including $5 million for regional targets in hopes of expanding the known 20 years worth of gold toward the 50-year-plus goal. Total drilling will amount to 60,000 metres.

The junior miner has regulatory permits in hand for its Boston and Madrid North and South deposits.

There鈥檚 more underground zones at Doris North to be mined and Madrid North ore will be trucked seven kilometres on an already built road to Doris North for processing this year. TMAC also has permits for a 55-km road from Madrid to Boston, but that鈥檚 probably still a few years from construction, said Neal.

The Boston deposit has a resource of close to 1.5 million ounces, which is within about 350 metres of surface but there are drill holes going down close to a kilometre 鈥渉itting great grades,鈥� Neal said of the potential to add substantial quantities of gold.