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spk01: Good afternoon. My name is Ernest and I'll be your conference operator today. At this time, I would like to welcome everyone to the B2Golf First Quarter 2022 Financial Results Conference Call. All lines have been placed on mute to prevent any background noise. After the speaker's remarks, there will be a question and answer session. If you'd like to ask a question during this time, simply press star, then the number one on your telephone keypad. If you'd like to withdraw your question, please press star, then the number two. Thank you. Mr. Johnson, you may begin your conference.
spk06: Thanks, operator. Welcome everyone to the conference call today. As the operator said, we're here to talk about the first quarter results for 2022. The news release we put out is quite inclusive. We'll give you a little summary of some of the highlights of that, update you on a few things, and then we'll open up quite quickly here for your questions. pleased with the quarter uh we had a significant beat uh especially when versus our budget on operating cost all the sustaining costs and and uh earnings uh cash flow and earnings so um very good quarter and we can talk a little bit more about what that means in the context of of of going forward but we're very pleased with that and once again i think some many of you realize the challenges that the industry is facing in terms of you know inflationary pressures etc so we'll continue to remain committed to doing our thing and focusing on where we can, avoiding the full impact of higher costs where we can. We can talk about that a little bit more. In terms of the focus, obviously continue to be a profitable, responsible gold miners to go for. They're starting a strong financial position, as you know, with a tremendous cash balance, virtually no debt, and paying the highest dividend. I see Merit just came out today with even with their bonus dividend, they're still a behind us. I think we're at 3.8% yield today, which is the highest of the gold producers. But we're also very committed to continue to grow the company, so we want to find a balance between dividend and rewarding our shareholders for our great performance and their support, but also being able to continue to grow the company. We have great access to cash through a $600 million loan credit facility from our banks that has the ability to go to $800 million completely at the moment at this time. And just quickly looking forward to some of our priorities, and I'll pass it on to Mike. The priorities in terms of growth are we're closing in on a feasibility study at Gravelate, and we've talked about that. That's quite detailed in the news release. And where Anaconda is becoming a real focus for us, as you've seen, we're now able to talk about the new resource in Anaconda, not only in the satellite, but we're starting to get some very good So far, it's just 20 kilometers away from the Fricola mill. So we're going to start tracking more. Bill will update you on that. And then we have the potential for, we think, depending on exploration results, as they continue to be what we've seen, and it gets larger, the potential to build a second mill up in Anaconda. So it could become the Fricola complex, which we could have significant coal production from two mills in the not too distant future. Bill will touch on that and give you a little more color on that. Exploration has always been a big part of our world and a part of our success for We started this company in 2015 years ago, and we have some very exciting opportunities, not only around the existing mines, but we've had great success in turning inferred into indicated, finding new reserves, but also new targets in addition to existing targets, extended amount of properties. We've had a great success, track record of success of exploration of existing properties. We're still very global in our view and our belief that the cheapest ounces will always be the ones you find, so we have some exciting exploration projects and a budget of full budget of 65 this year, about 60 or 65% of that would be on brownfields exploration and the rest is to look at some grassroots targets. So exciting results came out today from Orion, our partner in Finland with the operator we've been doing the drilling and I think the guys who asked questions on that, sounds like the exploration group is pretty excited about early days but excited about the potential given the discovery that they've made and given our not only a proximity being right on the boundary, but the kind of results we're starting to see, so much more holes to come there. And we're drilling in interesting places like Uzbekistan and others, always looking for new discoveries. The M&A front, we will continue to look. We've looked at a couple things quite seriously in the recent time, but haven't been able to reach an agreement. So we continue to look. I think time is on our side in the sense of looking at getting the Gravelati study out and seeing if that's a go. Also getting out of focus over the next number of months. And maybe seeing our stock, which has been underperforming, seeing the share price start to come up as we continue to prove the value of the projects we have, our ability to operate them, and also as we unlock the value of our growth projects and potentially exploration. Thanks, Clive. Good morning, everyone.
spk04: So just run briefly through the operating results and some of the sort of key financial results that we've reported for the quarter. Firstly, on the revenue side, revenue of $366 million, and that reflects a sale of 195,000 ounces at an average realized price of $1,874 per ounce. So high gold price during the quarter, and sales were about 7,000 ounces higher than budget, which really mirrors the higher production that we saw in the quarter in the budget. Speaking of production, the total consolidated production, including our share of Calibre's results, was 209,000 ounces. And we saw a higher than budgeted production at each of our three mines. The coal was 102,000 ounces, so just 1,000 slightly above budget. That was mainly due to higher than budgeted process grade and offset by lower than budgeted process tons. And the process tons were lower, as I've a result of a reduction in the saprolite processed. And that was because as a precautionary measure to protect ourselves against some of the potential supply chain problems that we saw arising in Mali from ECOWAS sanctions earlier in the quarter, we prioritized processing a higher-grade fresh ore in the period to reduce reagent consumption. That was a temporary measure. I would say the sanctions continue there, but our supply chain was normalized, and we've built up regular levels of reagent and fuel at site now. So as a result of that, Saprite was reintroduced back into the circuit at the end of February, and processing is ongoing as budgeted. I'll remind you as well, Focola's gold production is expected to be 16%. of the year, as we had guided when we put out our budgeted numbers. And that's because the second half is really when we reached the high-grade portion of Phase 6 in the Focola pit, and we have the new Cardinal production stream fully online. That started Cardinal. Planning for Cardinal started later last year, but we got it fully online through the course of this year. Amos Batty, 60,000 ounces in the period. That was 6,000 ounces ahead of budget, so quite a beat there. mainly due to higher process grade in the period, grade which was above budget, because we mined additional unbudget higher grade areas within the plant mine areas. And in addition, as a function of shorter haulage periods and haulage optimizations related to the expansion of the tailings facility, we were able to see increased mining rates, which contributed significantly to the mining of higher-than-budgeted, higher-grade ore in the period. But that's a temporary issue, I think, as we were working on the tailings, the TSF. But that's also the 6,000-ounce beat in the period. And Ojikodo, 35,000 ounces, 2,000 ounces over budget. That's really kind of the same story for Ojikodo. It's usually slightly ahead of all factors, grade, recoveries, and mined ore. And again... Ojakota is scheduled to be weighted to the second half of the year like Focola, and that's because that's when we get to the higher grade portion, phase three of the Ojakota pit, and also in the second half of the year is when the Wolfshag underground mine really ramps up. Let's talk a bit about costs related to that production. I'm talking here cash costs. These are all on a per ounce produced basis. Consolidated cash costs for the Q were $699, so that was almost $100 $94 less than budget. And that's primarily a function of lower than stripping in some areas, lower than budgeted fuel at Focola. And that was partially offset by higher than budgeted fuel costs at Miss Batty and Ojikoto. So I'll touch on each of those now individually. So Focola is $624 per ounce produced. That's $157 lower than budget. And that's primarily a function of slightly higher than budgeted production, as I mentioned before, and then lower than budgeted mining, processing, and site general costs. And those costs were lower than budget, largely due to lower than budgeted fuel prices realized in the period. And just to remind everyone, and I think we've talked about it in previous calls, in Mali, the fuel prices are set in advance by the state, and therefore you're always going to have some timing delay between... costs that you might see in the broader fuel market and at the pump, and then what we realized in that site. We also had lower than budgeted volumes of fuel consumables that we utilized in the period because we mined and processed lower overall tons than budgeted. And mined tons were lower than budgeted due to, again, a temporary change in mine sequencing to accommodate that temporary change in saprolyte processing. Reminder to everyone as well on the power side, The solar plant of Focola, which we got up and running last year, is running very nicely. And actually over 20% of the power that we generated in the first quarter of 2022 was solar. So that's been a great investment, I think, for current operations and as we look forward. Ms. Batty, cash cost for us reduced $710 per ounce. That was $50 per ounce lower than budget. And that was really, again, a result of higher than budgeted production. partially offset by higher-than-budget mining and processing costs, which, again, were driven by a little bit higher-than-budgeted diesel and HFO costs at Misbadi for the period. In Ojikoto, cash costs pronounced reduced $770. That was $35 less than budget, slightly lower than budget, and again, a result of higher-than-budget production and budgeted operating costs that were pretty much in line with budget. And those operating costs, they saw some increase in fuel prices, but that was offset by a weaker Namibian dollar. If you might recall, last year we actually saw the Namibian dollar strengthen, so it actually increased our cost lately this period so far. We've seen the dollar weaken. We budgeted at $14.50, and the Namibian dollar is the U.S. dollar for the period, and we saw it come in somewhere over $15. So it's probably a benefit in the period of a couple of million bucks in foreign exchange gains. Touch briefly on all-in, it's really the same story as the cash costs. So consolidated all-in sustaining costs, including our share of Calibre, was $1,036 per ounce sold, and that was $318 overall, lower than budget. And so it's a function of those almost $100 less on the cash operating cost side. And then also higher-than-budget gold ounces sold, as I mentioned earlier, and lower sustaining CapEx. During the period, we were $33 million lower than budget on the CapEx side, and part of that came from the temporary change in sequencing at Focola, so we had lower stripping in the period. We also had some lower stripping costs at Ojikoto in the period, and then just the timing of some fleet purchases and rebuilds. So you put all those together, we were $33 million lower than budget for the period, but we think these are timing issues, and we expect to see those reversed later in the year. Just a couple of comments on guidance. So firstly, just to remind everyone I've mentioned already in this call, we are weighted pretty substantially, 40% in the first half, 60% second half for production. We're maintaining our production guidance. We were 8,000 ounces ahead for the quarter. We're saying we're still on our overall guidance for the year, so our consolidated guidance is 990,000 to 1,050,000 ounces. We haven't changed our re-guider on the cost side. We reiterate our annual cost guidance. We have seen, as I've run through here, a very good first quarter where we beat budget on the cost and all in sustaining cost side. And I think we can expect that that could benefit the first half of the year as well. However, on the other side, we are seeing some cost inflation, particularly some fuel increases I've mentioned already. And there's also the CapEx timing issues that I mentioned as well. So we're going to see those reversed. So I think we're seeing some cost volatility in the market. We're going to continue to watch it, and we'll look at it again in the second quarter. So in the meantime, we've just maintained our annual cost guidance and also our annual production guidance. A couple of general comments maybe just on the operations as we've just run through them. So we're still a big focus in Mali. In early February, we put out an updated mineral resource estimate for the Cardinal Zone. So in that we had for indicated resources 430,000 ounces, and then we had an updated inferred resource of 740,000 ounces. Also subsequent to the end of March, we completed the acquisition of the Bacalobi permit, and that allowed us to consolidate that whole land package from Focola all the way up to Patanko, an area of over 200 square kilometers. And Anaconda remains a big focus. We've got $17 million, as Clive mentioned, on the exploration site. $17 million budgeted for an exploration for Anaconda for this year. We've got a lot of flight drill rigs on and active there. And then in late March, we put out an updated resource for Anaconda. A reminder to you that Anaconda includes the Manicoto Permit and the Patanko North Permit. And that resource had initially indicated... mineral resources of 1.1 million ounces, and inferred resources of 2.3 million ounces. So a lot of upside in Mali. We budgeted $33 million to start developing that Anaconda area, and that has potential, I think, with a view to Phase I saprolite mining that could start as early as late this year, could add 80,000 to 100,000 ounces per year to our production profile, which isn't in our budget right now. Cardinal is in our budget, but Anaconda is not. I think Bill is going to talk a bit more about this after my comments. And there's also a phase two scoping study that we're starting to look at. We're actually going to look at what, beyond just separately trucking to the Focola mill, what we might do in terms of standalone mill at Anaconda. Then at Ochocoto, we continue to develop the Wolfshag Underground Mine. First development ore production is expected by the end of the first half, 2022. And then, as I said, we kind of move into full tilt production there at Woolshag Underground in the second half of the year. A couple of comments on the income statements on the other operating results. Just gains on derivative instruments. We reported $19 million in gains for the period. That $13 million, that all relates to fuel. $13 million was unrealized and $6 million was realized. But just so that you've got it in your minds, our fuel book, our hedge book at the end of the quarter with $29 million in the money. So about two-thirds of that will benefit 2022. And we flow those benefits through the all-in, sustaining cost number, as I realized. And then about one-third will come in in 2023. And I'll comment as well. Historically, we've said for fuel, we'd hedge up to 50% of one year's needs and 25% of the next year's. We're not quite at those levels at the minute. We're about 35% of 2022's needs and about 17% of 2023. And that's because We are realizing a ban for those hedges, but with some of the fuel pricing that we've seen, it's higher. Not as keen to jump into the market and put new hedges on, but we're constantly watching it, and we'll jump in if we see a dip in prices or something that looks like a good opportunity. On a net income basis, $90 million net income for the period. That was EPS of $0.08 per share for a shareable shareholder's company. And then on an adjusted net income basis, $65 million or $0.06 per share. Let's talk a little bit about the cash flow. Again, solid cash flow generating period. A reminder as well, because we're saying we're weighted so much for the second half of the year, we definitely see the majority of our cash flow, the greater part of our cash flows come in the second half of 2022. But even with that said, cash from operating activities in the first quarter was $107 million or $0.10 per share. I know a bunch of the analysts look at it on operating cash flow before changes in working capital. So if you look at that number, it's $152 million for the period or $0.14 per share. We've maintained our guidance on operating cash flow for the year. This is net operating cash flow, $625 million. And we have seen some higher prices that we realized in Q1, as I've talked about, in terms of selling price for gold. We're also seeing some slowdown in VAT recoveries at several sites, as you'd expect, as governments fight their way through the post-COVID period. So I think overall we've maintained our operating cash flow guidance at $625 million for the year. On the financing side, $42 million went out in dividends. This is a cue we've maintained our dividend at $0.04 U.S. per share, and as Clive said, that's providing one of the highest yields out there in the gold sector. Cash taxes, for those that are interested in such things, We haven't changed it. Clive will probably talk in detail about this because he loves talking about cash taxes. But it's going to be, we've maintained it at $290 million, same as we guided at the start of the year. And on the investing side, $77 million or $78 million cash outflow from investing, that's quite a bit lower. That's about almost $70 million under budget for the period. We're sustaining CapEx at $40 million, which was $33 million lower than budget for the reasons I mentioned earlier. Then on the non-sustaining side, we're about $35 million lower than budget. That related to the timing of fleet rebills, fleet purchases, underground development at Walsh Egg, just the timing of some of the payments related to that, and then some of the timing of exploration activities. But we do expect those to be timing issues, and we do expect to see them reverse later in the year. And Grand Malati, we continue to work towards getting a feasibility study done. We should know the results of that by the end of the second half. or the first half of the year with the feasibility study to come in Q3. And not left, as I said, very healthy cash position, $648 million at the end of the quarter with $600 million on drone and the revolver. And I think that concludes the comments I was going to make on the financial side.
spk06: Okay. Great summary. Thanks. What were the bills? We talked about a few operational updates that are actually particular to the
spk05: Yeah, I definitely wanted to spend just a little bit of time talking about the regional Mali development and what it all means. I think there's a lot of questions and maybe misunderstandings on what we've got going on there. So I'm going to kind of work my way through it, hopefully in a logical fashion, remembering that we have increased the mill to produce 9 million tons per annum, which really is kind of the basis of all the beginning stuff. So at 9 million tons per annum, we've always talked about our ability to process an additional 15% saprolite material. Currently, what is included in the FACOLA life of mine plan is only the FACOLA open pit and the cardinal deposit, the early cardinal deposit reserve. We have since then, as you know, freed up the Menincoto license, the Bentaco license, and consolidated by getting the Baccalauré license. So basically we have the entire belt from Focola all the way north to Bentaco north. What that allows us to do is to have some optionality in where we're going with this. We have previously announced, and we're discussing with the government right now, the potential to truck from Anaconda, which consists of Menacoto and Bentaco, or maybe potentially separating those and doing them individually. Both of those studies are complete. Both of those studies have environmental and social impact assessments ready to go. It's just a question now of which way we want to go. So we've also talked about the need to optimize the entire belt. So we additionally have a study going with Whittle Consultants where we're going to take a look at what is the best way to process or what is the most economic way to process or from all of the various sources. That study has been kicked off. That study will be done by the end of this year. So that also will play into our sequencing going forward. So what we're really talking about currently is the potential to have a phase one where we truck. I will tell you that, as Mike indicated, we have a budget, $33 million, to get that going. We have started ordering equipment. That's come through the profile right now. We're in the process of ordering equipment. I will tell you that we're in the process of designing the road from that area. We certainly believe that can be done by the end of this year. It's just a question of which is the best way to optimize it. And then on top of that, everyone is aware, I think, that we're looking at the potential to create a standalone complex up to the north to be kind of a regional mill. So in that particular case, we would be looking at can we consolidate some of our ore based on our existing resources and exploration success to create a second mill, maybe have something like a Focola complex in that area. So that also is being looked at. And I guess maybe the last thing that I think people forget about is that we do have the very real potential for underground in Focola. We have started studies, preliminary studies, looking at what happens down plunge of the Focola deposit to the north. While it's still open to the north, There is a resource there that we're starting to put a mine plan on, and there's no doubt that the economics, at least preliminary, look very good. So that study is also ongoing in 2022. So in short order, what do we have going on? We've got the phase one study, which will be delivered to the government shortly, a phase two study kind of at the scoping level to determine how big does the mill have to be. We're optimizing the entire district. That's due out by the end of the year. And at a scoping level, we're looking at underground. So those are all the things that are happening within the regional Mali development.
spk06: Bill, maybe I think it's worth updating people a little bit. A lot of talk these days, we've discussed some of the inflationary pressures that the industry is seeing. But Mia, can you just talk a little bit and give us an update for the shareholders and the analysts on logistics and how we've been able to see our way through this obviously challenging time for the industry and how we see that going forward between sanctions in Mali and between other things, between the supply issues. Just maybe walk us through a little bit about that.
spk05: Yeah, so it's actually a pretty interesting history, if you think about it. So let's actually step back, because these were questions we were having in 21. We had the COVID-19 pandemic, and at that point, that really allowed us or really required us to take a look at all of our supply chain and figure out what was the best way forward. And so During that time, we looked at Plan A, Plan B, Plan C, Plan D, and really optimized our supply chains. Then, if you remember, there was a coup in Mali. That really didn't even impact us because we'd already kind of optimized. Then there came the sanctions in Mali, which kind of shut off some of our supply routes. But because we'd had a good look at could we bring stuff in through Guinea or through Mauritania, while it certainly made us pay attention to where things are coming from, it didn't really impact us. And then that might briefly hit upon it, when the sanctions came in, it was one of those things we had to have a good hard look at. And so we did assume the worst case that potentially we couldn't get something in a timely fashion. And so we did change our mining sequence in Q1 and the material we were milling. But we quickly realized that our success was that we were going to be able to bring everything in, so we went back to normal operations. And then the last one, which people talk about sometimes, is how is the war in Ukraine with Russia really impacting us? We used to get our explosives out of Russia. We're now getting those out of South Africa. So we're seeing that we've been able to adjust right down the line to all the various components that make up the supply chain. Well, I won't say that it is Flawless and seamless on the outside, it all looks great, but it is something that every day that we have to pay attention to.
spk06: Okay. Thanks, Bill. Before we go for questions, there may be a question on this, but I just wanted to cover a couple things off. The Mali situation, we continue to have excellent relations with the government locally and federally. Every government we've seen in Mali for decades and current government that we expect going forward understands the critical importance of gold mining in Mali and then foreign investment to accomplish that working with Mali and partners, whether it be private or government. Obviously, we're excited about the potential of Anaconda in the very short-term, trucking ore down to sapper the ore to increase production through the mill, and ultimately is there the potential for it. We're going to have just a little exploration to give us the results needed to, as Bill calls it, the Ficolo complex. You know, it has the potential to produce, wave your arms a bit, you know, approaching a million-ounce year from there, subject to further drilling and subject to building an additional mill. But that was a pretty exciting opportunity. So we're clearly happy in mining in Mali, and I think there's still a lot of misunderstanding about what that means. There's reasons why Rand Gold, and back in the day now Barrick, and many other companies have had great relationships in Mali. financing and gold mines and being responsible. We do some great community stuff, which is all detailed on our website. But it's a good place to be. Mali is a good country to be in gold mining, and that has not changed, and we do not anticipate that changing. So as the government reaches agreement about new elections within the next couple of years, getting it back to democratically elected government, we believe that Mali is going to be a good address to be. It still has the capability, as we've demonstrated, We're also giving an additional major gold deposits, world-class deposits, and we think we're moving on to another one here with Anaconda. I'll just remind people, when we acquired the McCullough project from Papiano, we did an excellent job of taking it to the first stage and into a feasibility study. We had 4 million ounces in total of resources. So clearly, we've more than doubled that, and we think we're really scratching the surface, literally almost up at Anaconda. So Maui's a good place to be. And we'll continue to champion Mali, as other companies will, and try to help people understand why we're there and why it's a great opportunity going forward, in addition to continue our geographical diversification with some of the things that we are doing elsewhere. Columbia, just want to touch on it in case there may be a question on this, but I'll give a little summary. Where we are, as we've said, and as you know, we're completing a feasibility study. It'll be available in the third quarter. We're working closely with our partner, and then we'll go to Shanti. We're the operator, 50-50 joint venture. And I think we are, and I'm sure AHA is actually waiting the results of the study. We've done some significant work to see if we could drop the capital cost by doing some legitimate re-engineering, redesign. That seems to have had some success. The question is, what will inflation do to cost us some of the gains we might have made by lowering the capital cost? We'll have a better view of that over the next two months internally. And then both parties will look at it and decide if they want to participate and make a development decision to build a ground-launched mine which could produce 400,000 ounces of gold a year if it has the economics to support the capital cost expenditure. So we're in the same position of waiting to see the results of the study as our partner. And then there's different possibilities. If AGA decided they didn't want to participate, would we buy them out? Or would you bring another partner in if we wanted to go ahead? That'll all come, I think, become clear as we get into the third quarter. And we'll go about that. There has been some negative press come out, I guess, around another project in Columbia that the AGE has called Caborna. And they had been pursuing a permit there and had a few setbacks in terms of the government telling them to go back and do some more work, I guess, in terms of satisfying what the government pursued as they issued some of their requirements. I won't speak for AGE. But I'll just say that we think that the Gramalate situation is very different in terms of the location, the sensitivity of the location. We are in the right part of Antioquia, northern Antioquia, with a strong mining history, tremendous local support. We get asked all the time when we're down there by everyone, when are you going to start building this mine? So we believe that support will continue. There's an important election coming up here very shortly in Colombia. But we believe whichever government goes forward in Colombia, we believe they're going to have They didn't understand the importance of moving away from oil and gas and coal, and we think oil mining could be something that's beneficial to Colombia. So we'll see how that goes. At the end of the day now, our relationships are excellent. AGH has some good work on social programs there, and we've done a lot of good work as well on looking at relocation plans and things like that. Tremendous support. people who went in the Columbia. So I just want to get those points across. And now for questions.
spk01: Thank you, sir. Ladies and gentlemen, we now conduct the question and answer session. If you'd like to ask a question, press star, then the number one on your telephone keypad. If you'd like to withdraw your question, press star, too. If you're using a speakerphone, please lift your hands up before pressing any keys. One moment, please, for your first question. Your first question comes from Habib Obey with Scotiabank. Please go ahead.
spk03: Thanks, Operator. Hi, Clive and B2Gold. And, you know, congrats on a good quarter, especially on the cash costs and all the sustaining costs. So just starting off on that, you know, regarding the guidance for first half, you know, Q1, obviously, all the sustaining costs came in at $1,036. Guidance for the first half is around $1,250 to $1,290. Mike, you touched a bit on catching up on costs over the year. But are you being conservative on this guidance for H1, or are you expecting costs to be significantly higher in Q2, or these costs are going to be spread out throughout the year?
spk04: Well, overall, like I said, I think we can expect that we'll see the benefit. It was a very strong Q1, so we will see some of that roll into the first half for sure. I think we can expect that. But is it conservative to not re-guide the halfs? Probably, but like I said in my comments, the prices are quite volatile, and we are seeing quite a bit, especially in the all-in sustaining cost side. We're seeing some timing differences. We were quite a long ways under in Q1, so you've got to remember that when you look at that all-in cost for Q1. We expect to see that reverse. Don't know the exact timing of that yet through the year, so we just felt because of some of the volatility you see in operating costs, and particularly fuel, and then the timing of that cap exit. It was better just to maintain our guidance for the half as we have them and for the year overall. But yes, to answer your question, half one's probably still conservative by maintaining that guidance.
spk03: That's good. Thanks, Mike, for that. Just quickly switching gears to Anaconda, Bill, your team is looking to complete a PEA on Anaconda as a standalone. Several discussions have been in terms of Anaconda kind of becomes kind of within the Ficola complex. Now, within that, are you able to share infrastructure with Ficola in any way and possibly reduce capex to develop Anaconda?
spk05: Yeah, for sure. I mean, that's probably one of the things that I should have talked about. When you talk about capital costs for constructing an entire mill and infrastructure, You've really got to cut a lot of that out. I mean, even if you look at things like right now we're looking at how do we align a regional tailings facility, you know, because that's a big capital cost. The camps are things you could expand. The workshops could be shared, you know, all of that, the warehouses. So really everything outside of the mill, even the power, right? Remember that we've got that additional 36 megawatts of solar power there So we've got extra capacity, and we're looking at it right now, which is one of the things we didn't really, I didn't emphasize, but we just picked up that Bacalobi property, which fits between the two. But not only is that a good exploration target, that's an amazing opportunity for us to consolidate our infrastructure. As I said, things like tailings facility, roads, solar plant, you know, we needed that room to the east. So there's a lot of good things really associated with that Bacalobi license.
spk03: Thanks a lot, Bill. And my last question is for Clive. I mean, in regards to development of Gramalote, you know, or potential development of Gramalote, is that completely exclusive of building Anaconda? I mean, if you go forward with Gramalote, does that impact Anaconda? And if you go forward with Anaconda, does that impact Gramalote?
spk06: Yeah, good question, Oves. Bill can help me here, but We don't think so. We've always said we're not going to try and build, with our tremendous construction team, we're not going to try and build two significant mines or mills at the same time. But if you look at the potential sequencing or timing, if Gramalati is to go, then a lot of the construction will start as soon as we can get, we have the permit, but get the permit reissued with some of the changes that we've made or updated, I suppose. But if you look at the timing of all that, and we've looked at it quite closely, of course, then We definitely wouldn't see an issue where the Earthworks crews that would be doing the initial work at something like Gramalati, if it's a goal, would then potentially be able to move on. But this is also subject to, of course, the additional results that would justify potentially an anaconda and the sulfide spilling on another mill. We don't know how far off we are. Now, to look at that, we may not be that far off in terms of the results already and the kind of results we're seeing. But first of all, the priority there is to start trucking the sap right down, but If things go to what we hope, then while we're tracking the saprolite down for a number of years, a couple of years, whatever it's going to take to get the full permit to build a mill at Anaconda, if appropriate, we would be producing 8,200,000 ounces a year from the saprolite. But while we build the mill, and then you just segue into the saprolite and everything else goes through the new mill at Anaconda. But if you look at the timing of that, if Gramolata is to go, we see Gramolata being not first ahead of the saprolite. That's just road building exercise, which we do. I'm not going to say it's a no-brainer for us, but it pretty much is when you look at what we've done, not only in Mali, but around the world in terms of road construction, et cetera. So the first step is really pretty straightforward, building a road. We expect to get the permit for that by the end of the year. And as Bill said, there's multiple sources for ore to feed the Fercola Mill with sample-like material. So then the rest of that story will unfold with a lot of drilling this year. I'm hoping by the end of this year, we'll have a better idea of whether we think that another mill is likely to be the way forward. And then we'll start working on that, permitting that. So while we're doing that, we could very well be building a mill at Columbia, if appropriate, at Gravelante. So we don't see it being a sequencing issue or problem, because what you're talking about, what we're talking about is the phase two of that economy being a new mill. That would probably slot in after Gravelante from what we see today.
spk03: Perfect. That's it for me, guys. Thanks for taking my questions.
spk06: Thanks, Savesh. Good questions.
spk01: Thank you. Your next question comes from Jordy Mark with Haywood Securities. Please go ahead.
spk07: Yeah, good morning all. And I'll follow on from Ovesu. That's a very good question there. Maybe with solar, if I can, because I think it's a very interesting topic. 20% of your power is supplied from solar. Does it warrant expansion of that plant, given the obvious demand? trade-offs or quick paybacks, oil prices and the potential expansion of Anaconda going forward, or would you keep it at 36 megawatts alone?
spk05: We're doing the studies right now, Jordy, for sure. We see absolutely the possibility to expand that solar plant. Remember, not only are we bumping up against what we do engineering-wise as far as production, but you also have these ESG components, which everyone is focusing on more and more. And the reality is that that is one that you can really get some bang for your buck because we know it makes sense. We know that there's financial payback on it, and it's a good story. It's actually the right thing to do there.
spk07: Okay, excellent. I mean, and maybe an extension on that one. How about maybe it's obviously you've got a facility at OG Coto, and you were, I believe, if I remember correctly, looking at potentially something at Masparte, but I'm not sure whether that's still on the cards.
spk05: Yeah, so let's handle the Ochocoto one first. The Ochocoto one, what we've actually identified there, because southern Africa has been so aggressive in putting on renewable energy, Namibia has really turned from a net consumer of power to a net generator of power. So what we're seeing now is that the power lines are delivering power at much, much cheaper costs than we had envisioned even when we designed the plant. So We have the ability now, and we're in the process of connecting to the overhead power line, which will once again reduce our costs. And once again, we get the ESG credit because that power is generating from the hydro plant, Rokana hydro plant up north, and solar power. So we're going to get some benefit from that. We don't know exactly how much, but what we see is on off times, off peak times, we'll generate off the power grid and save money that way. During the daylight hours, of course, we run off of solar power and very little actually on HFO going forward after kind of starting in Q3. And then the Philippines, of course, we're looking at it. That's one of those, if you've been there, you know that land is at a premium in the Philippines. So the question there is now where do you put it? Dennis is working with John Rahala really to identify areas, even things like is there potential of floating them in the tailing facility, the old waste dump area? All those areas are being looked at, but certainly we're having a hard, hard look at that.
spk07: Okay, great. Thanks. And maybe one more question there before falling into others. Maybe on Anaconda, again, in terms of if you can remind us what potential scales you would be looking at and considering in the PEA for future satellite facility or, you know, self-standing facilities. And then I'll leave it there. Thank you.
spk05: Yeah. I'm saying too preliminary to say right now, given the fact, I mean, we do know that we want to truck between a million and a million and a half in phase one. What phase two looks like, don't know. What I will tell you is that, you know, we started out at 4 million tons per annum at Focola. We're now at nine. And I remember the last time you asked me, can we go even more than that? So, you know, I would imagine it's probably something at four or less to start with, with the ability to expand.
spk07: Okay, great. Thank you.
spk01: Thanks, Jordi. Thank you. Your next question comes from Anita Soni with CIBC. Please go ahead.
spk02: Good afternoon. Thanks for taking my question. Similar question on FACOLA. I guess Jordi asked kind of what I was getting to in terms of the overall size of the standalone facility. I know you're saying it's too early, but I was hoping that I could get maybe just one more detail. When would you think that would start up if you're looking at something around the 4 million ton random mark?
spk05: Yeah, can I give you a bunch? I'm madly waving my hand and putting air quotes in the air right now, right, because we don't have any of that data. I mean, let's just think about this. So if we could do a, let's say we could do a preliminary study this year in the optimization and kind of a trade-off study and say that it looks like it's a go. And I know that there will probably be a resource out next year that we could then probably put a study on. So let's say it takes us six months to do the study. At the same time, we're ordering equipment. The equipment comes in two and a half years to build it. My math shows that it's kind of 2026.
spk02: And then a second question would be, in terms of overall, I guess we're always trying to figure this out, or at least I am, but Ficola proper, you know, without the Cardinal deposit and without the Anaconda deposit, what's kind of a baseline scenario of, you know, what we should expect out of that asset over the next five years?
spk05: Well, I think that information was put out in the PA. If you're talking about just Ficola proper, or sorry, the updated feasibility study, which happened in 2020, then you have to overlay Anaconda on top of that, and of course Cardinal, and the underground and the increase in milk throughput.
spk02: Okay. So if I go back to the 2020 PEA, that's a good starting base?
spk05: Yeah, it's not the PEA. It's actually a feasibility study, but yes.
spk02: Okay. All right. Thank you.
spk01: Thank you. There are no further questions at this time. Mr. Johnson, back over to you.
spk06: Okay. Thanks, everyone, for your time. And if there's other questions that occur to you, feel free to reach out to us. Randall Chatwin, and he'll put you on to the member of the executive team that would be the appropriate one to find the answers to your additional questions. So thank you for your time, and have a good day. Thanks, Operator. Sanes.
spk01: Ladies and gentlemen, this concludes your conference call for today. We thank you for participating and ask that you please disconnect your lines.
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