Caledonia Mining Corporation Plc Common Shares

Welcome to our Q1 results call for Michelle. In Caledonia, you've got Steve Curtis, our CEO, Mark Learmonth, our CFO, Donna Roots, our COO, Maurice Mason, our Vice President of Corporate Development, and then myself, Camilla Horsfall. I'm the Vice President of Investor Relations. So if you have any questions, please can you either just write them in the Q&A or raise your hand, and we will unmute you at the end of the presentation. So I'm now going to pass you over to Steve and Mark, and they're going to talk through the results.

Thanks, Camilla. Good afternoon, everybody. We are going to go through a presentation that's been prepared for the Q1 results. Camilla will share the screen. This presentation is obviously available on our website. And if we go through it quickly, you've always got an opportunity to go back and have a look later. So thank you once again for joining us. Obviously the disclaimer as usual, and you'll be very familiar with that. So. All right. We've got a mixture here of sort of a summary results and then financial results. I'm obviously going to ask Mark to do the financial results. You will have seen these results before because we announced production numbers at a particular time and we put out the MD&A and the Q1 results. So All of this should be familiar to you, but just to just to reemphasize the quality of the quarter production ounces, 40 percent up on the previous quarter, on the on the comparable quarter 2021. My apologies. Average gold price, nothing in our control there, but we were the beneficiaries of a higher gold price. which resulted in revenues 37% up, pleasingly gross profit 63% up, and EBITDA 49% up on the comparable quarter. Also, which Blanket is well known for, all in sustaining costs show a reduction of 7%. Management there continue to do a very good job in controlling costs, even as we ramp up production. And then profit attributable to shareholders up 30%. And adjusted earnings per share, and Mark will talk a little bit more about the adjustments to arrive at that number, 62.5 cents for the quarter. Remembering we pay 14 cents a quarter in terms of dividend. And therefore, you can see that the business is very cash generative, very profitable, and we are returning some of that to shareholders. Moving on to the next slide, our safety performance. We have had an excellent track record of safety, but as we've reported previously, we unfortunately had a fatality in February. And as ever, we send our condolences to the family and the colleagues of the deceased. This was a very unfortunate accident and all the necessary follow-up procedures have taken place. But the statistics of lost time injury frequency rate, nicely down. And we continue to be 100% focused on safety, especially as we get more and more people on the mine. and the higher level of activity, meaning that there are more blasts, there are more open areas, there's more tramming going on. So safety gets the requisite amount of time and attention. And now that COVID has subsided and we are able to be in closer proximity to each other, the Niansvi training program, excuse me, and education program that Dana runs at the mine, that is back and it's operational. And that's very, very important to reinforce safety, the disciplines, the culture. So it's important for you to know that Nyanswi is back in and running and we are working very hard on our safety performances. This is just a summary of many of the things that you probably are also familiar with. I've already spoken about the ounces. But importantly, the higher production is due to the increased tons. And that is critical for us to achieve our 80,000 ounces and an improved grade, which was over and above the average mine grade. But we are very happy that we are sticking to the mining plan. But you get some pleasant surprises and you get some unpleasant surprises in our business. And we are at the moment benefiting from higher grade and we're very happy with that. The central shaft continues to contribute. Although it's hoisting waste, that just frees up all the capacity at the number four shaft. And the reason why it's hoisting waste mainly is because there is a lot of development and connecting work between the various levels to the central shaft. and it is it is fast it's efficient we can move the waste into that area and we can then focus on the mining that can be brought with or can be brought up the number four shaft and at the moment to achieve the the tonnages that we we need to get 80 000 ounces we have we have pretty much got the capacity to achieve the 80,000 hours just using foreshaft. And as you can see, we've built up a significant stockpile because we're actually mining more than we are milling and crushing. And that is because we are in a phase of bringing a new what we call BM10, which is a new mill into the production process. So at the moment, we are not relaxing on the mining side and we're building up a stockpile. So at any point in time, if we have a bad day in some aspects, we've got capacity on surface. We continue to reiterate our guidance for 2022, 73,000 to 80,000 ounces. And the run rate that we have reported in the MDNA for April of nearly 6,800 ounces, If you extrapolate that out, that is just above 81,000 ounces. So we are very proud of a good first quarter and we are seeing it continue as we go into the second quarter. So hats off to our production team. They are really delivering and making the asset work that they've spent four or five years actually putting into operation. Okay, so we're getting into the financial numbers. So this is an appropriate time to hand over to Mark. So Mark, over to you. Thank you.

Thank you, Steve. So very briefly, revenue is up 36%. That's driven largely by a 28% increase in gold sales. And as Steve's already mentioned, a 6% higher gold price. Royalty stays fixed at 5% of revenues. Production costs, I've got a bit more detail on that in the next slide. So although the dollar value went up, there was actually a 17% reduction in online cost per ounce. And depreciation goes up substantially because don't forget, now that we've commissioned the central shaft, unfortunately, we've got to depreciate it. So that's gone up a bit. So, hence, gross profit up by 63% from 10.5 million to just under 17 million. G&A up from 1.6 million to 2.4. That's driven by a considerable increase in the quarterly charge for insurance. I've got some more information on how the G&A is made up here. and a slide or two, and also higher advisory expenses in the quarter. Net foreign exchange gain was just under a million dollars, and that reflects a considerable step up in the rate of devaluation of the RCGS dollar against the US dollar in the quarter. Then other $3 million, that includes $1.7 million of marked market costs on the various hedges, half a million dollars exploration and evaluation asset impairment. And that primarily relates to the decision to walk away from the Connemara North asset and about $400,000 of LTIP costs. And the LTIP cost was increased because our share price was quite strong in the quarter. So that's profit before tax up by 47%. The tax expense increased to $4.7 million. I've got some more information on that in a moment. But the tax, the income tax and the withholding tax, sorry, the income tax, the deferred tax on the underlying profits was relatively stable, but there was a higher withholding tax incurred as we moved more money around the group. Adjusted earnings per share increased from 51.6 cents to 62.5, and that excludes things like foreign exchange gains, deferred tax, and what have you. So a very creditable profit and loss performance. Let's move down, Camilla. A bit more information on production, which largely comprises wages and salaries, consumables and electricity. Wages and salaries increased quite substantially from 4.4 million to 5.9. But don't forget, we've had nearly a 24% increase in headcount at the mine. The mine employs about 2,000 people now as we've increased personnel levels to cater for the increased rate of production. And also don't forget that the comparable quarter, quarter one of 2021, was a very poor quarter. only 13,000 ounces. So there was no production bonus attributable to that quarter, whereas clearly in the first quarter of 2022, it being a good quarter, there was a 12% production bonus. So hence the increase in wages and salaries. Late last year, very late last year, we took the decision to pay our online workers entirely in US dollars. which has cut through a sort of an inflationary effect, which arises from the fact that although the local currency rate of inflation in Zimbabwe is extremely high, running about 100%, that's not reflected in the rate of devaluation of the local currency. And so what happens is if you're paying your workers in local currency and accepting the local inflation rate, once that higher value has been translated back into U.S. dollars, it shows a very substantial increase in dollar denominated costs. So we've cut through that by now paying our workers entirely in U.S. dollars. And we're seeing no appreciable increase. um inflation arising from that consumables up from 4.2 million to 5.1 that's 21 increase um partly that reflects the increase in tons mill but it is fair to say that during the quarter we did see price increases in most of the major imports being explosives drill steels and cyanide and it's fair to say that after the end of the quarter we've seen further price rises and i think i think um Along with all other producers, I think we must prepare ourselves for the higher input price environment. Although, as I hope you'll see from this discussion, that even if we are seeing inflation in consumables, that is for a relatively small component of our overall online cost base. So wages and salaries, we don't expect to see any significant inflation. And also electricity. We believe we've got the electricity costs well under control. Moving on to electricity then. Notwithstanding the higher production costs, electricity increased from 2.1 to 2.3 million and that's that's because late last year we we spent some money to install some more auto tap changes at um at number four shaft which means that in quarter one of this year we substantially reduced the amount of diesel that we used over the course of 2021 the amount of diesel we used increased from about 400 000 uh liters in the in the first quarter to about 1.1 million liters in the fourth quarter and in this quarter it dropped back to about 83 000 uh liters that are offset by obviously an increase in the in the price of diesel having so having seen that success uh we are now intending to um and also seeing a further deterioration in the in the quality of the grid power We are now intending to invest about three million more dollars to further protect ourselves from the grid to improve the quality of the grid supply we get and therefore substantially reduce the cost, the amount of diesel that we use and therefore reduce our overall electricity costs. So we feel that going forwards, we've got a very good handle. on the electricity cost. Work in progress just reflects the movement in gold in work in progress. And it also in this quarter reflects the buildup of the ore stockpile. I don't really think there's much more to explain in terms of production costs other than to say right at the bottom of the table, very pleased to see the online cost per ounce fall from $836 to $698 an ounce. Here we see the G&A. I think we should all recognise that as the world stumbles out of COVID, we are now going to see an increase in investor relations costs and travel costs as the activity levels return to normal. So that explains the increase in investor relations and travel. Advisory services, that increased quite significantly, and that relates to legal fees and also executive search fees relating to the replacement of several senior executives. And wages and salaries increased from just over a million to about 1.1 million. Again, that reflects increased headcount, mainly in Johannesburg. As the mines got bigger and more complex, we are now having to increase the complement of technical staff in Johannesburg. So people like rock engineers to a rock engineer to make sure the roof stays up and people to improve the quality of our mine planning. Shall we move on? So that just pulls together the, as I mentioned, the online cost falls from 836 to 698 and the all in sustaining cost falls from just over a thousand dollars an ounce to $968 an ounce. Taxation, the ability for external sort of viewers to see through the tax charge for the group in terms of underlying profitability, it's very, very difficult because the main elements of tax being Zimbabwe income tax and Zimbabwe deferred tax are calculated on the basis of local currency denominated accounts. whereas we report obviously in US dollar accounts. But safe to say that the main components of tax comprise income tax in Zimbabwe, about 2.9 million, and also deferred tax of just under 1.5 million. If you express that income tax plus deferred tax as a proportion of the overall PBT arising in Zimbabwe, it comes out at about 32%. of Zimbabwean tax. In the corresponding quarter, it was about 34%. So there is underlying stability in terms of the tax charge in respect of the underlying profitability. And then on top of that, we incur what I'd call tax leakage, being tax arising in South Africa on intercompany profits, and then also tax arising, withholding tax arising on the movement of funds from Zimbabwe to South Africa and from Zimbabwe to the UK. So that explains how the overall tax charge arises and what it is. Cashflow is very strong. Cashflow before working capital increased from 9.7 million to 13 and a half million. Working capital continued to increase somewhat in the quarter, clearly not as dramatically as in the first quarter of 2021, which was adversely affected by anomalies in the payment system. We are working hard to reduce the overall level of working capital in particularly inventory levels. And that's gonna be a continued area of focus for management. So net cash from operating activities was just over $10 million compared to, I'm going to say admittedly, a very anemic $2 million in the first quarter of 2021. Net investing continues to be high. We spent $10 million in the quarter, both at Centroshaft and on the solar project. And we do expect to have a very high rate of net investment in quarter two and into quarter three before it begins to taper off. But the cash position remains strong. And I think we've got some more information on cash on the next page, don't we? Later on, we have some information. The balance sheet, very strong. Obviously, non-current assets increased, driven by the rate of capital investment. Current assets, 35 million, cash and cash equivalents of 15.3. The non-controlling interest of 21 million, that reflects the 36% minority interest in blanket mine. And the non-current liabilities of 11.6, that's mainly deferred tax and closure provisions. Current liabilities, that's mainly trade and tax payables. which includes $4 million of derivative liabilities. This shows where the cash is. So here we show, for the last sort of few quarters or so, the cash split between Zimbabwe, South Africa, the UK. And you can see that at the end of the quarter, the end of March 2022, we apparently had $5.8 million in Zimbabwe, being a combination of US dollars and RTGS. Actually, of that $5.8 million, about $2.3 million was... was RTGS currency, which is ring-fenced against a 90-day letter of credit. So what happens is that of that $5.8 million, $2.3 million in RTGS will be taken out of our bank account in Zimbabwe, and a corresponding value in South Africa, Rands, will appear in Caledonia Mining South Africa in June. So that's a new mechanism that we put in place in the course of the year to enhance our ability to move RTGS into a hard currency, being rands, which we then use to procure assets and stuff for the mine. So in Zimbabwe, actually, we were modestly overdrawn at the end of the quarter in RTGS. So we are not building up a pile of local currency, which is either unusable or unremittable. And we work very hard to maintain that position. Shall we move on? Steve, do you want to talk about the solar project? Organa, do you want to talk about the solar project? You're on mute.

Shall I go straight into the video?

Yeah, Steve is on mute.

Sorry, let's get Donna to talk about the solar farm.

The solar farm is progressing quite well and we should see during July that we start commissioning and connecting to the mine and we hope to be up and running fully by the end of July, beginning of August. You will see as the video um as shown in progress that um the areas that we uh we're going to there you can see the preparation for the solar solar panels um in the beginning and then um currently we almost complete install all the solar panels being being installed you can see it's quite a vast area that was that that video is a few weeks old that's correct isn't it dana it's moved on quite a bit since then You can see the photograph there in the right-hand top corner. Almost completed the installation of the solar panels. And yeah, within the next couple of months, we will start using solar panel, which will help us quite a lot. I just want to remind everybody that these panels will be following the sun.

Yeah, so that they tilt, so that they follow the sun to improve their efficiency. Just a word on the dividend. We pay a dividend of 14 cents a quarter. We've increased the dividend quite substantially over the last few years, but now we've decided to hold it at 14 cents a share, given the high level of CapEx this year. And also, as we begin to position the company to... to invest in new projects of which Marley Green is probably the front runner. So the company is transitioning a little bit away from being a sort of one trick pony focused on blanket to actually now beginning to look at investing in new projects. And hence it's appropriate to, over time, to begin to accumulate some more cash so we can bring those projects forwards. So, Steve, we're finished.

Short and sweet. Very, very nice to talk to a great set of results. So thank you, Mark. There are a couple of questions that have been typed into the Q&A session. I'll ask the team just to have a look at those. And if anybody else wants to ask a question, please raise your hand and then Camilla will drive the system accordingly.

Shall I deal with the first one? Cash, increased dividends or pursue exploration. It's fair to say that over the last seven years or so, we've probably not done blanket the justice it deserves in terms of exploration expenditure. Exploration activities have historically been focused just going deeper and deeper and deeper. And in the last few years, we've just not had the flexibility underground to do that. So we do intend to resume that deep level exploration with a view to improving the confidence level of those existing inferred resources at depth, but also finding more material. This year, From memory, I think it's the back end of the year we were proposing to do 15,000 meters of drilling. Next year, 25,000 meters of drilling. But in addition to that, we also believe there's potential for drilling in the shallower areas of blanket, which have been historically people have just gone deeper. And we think there are some areas there that merit further attention. In addition, we feel that there's potential for exploration immediately outside the existing mining area. So that's to the north and to the south. And then also we'd like to begin to look at something called the banded ironstone formation, which is about 800 meters to a kilometer to the east of the current mining area. So there is actually quite a lot of exploration potential, our blanket itself, which I thought would cost probably two, $3 million a year. In addition to that, we are looking at Molly Green. At the moment, we're reevaluating old drill core with a view to improving the confidence level of the existing resource base, which is about 940,000 ounces at 1.9 grams a tonne. So we do intend to spend more money on exploration and it's going to be a balancing act between how much money we choose to retain in the business to fund those projects and how much we choose to divert back to shareholders. So that, well, when I say divert, that kind of implies it's not a useful use of the money. Clearly it is a useful use of the money. So it's a balancing act. At this stage, we're sort of pausing to let the fact pattern catch up with where we are. I think that's about the only answer I can give to that question, Alan.

Thank you, Mark. Yeah, the increase in the DNO costs, that's not just particular to us. It seems to be reflective from the beginning of the COVID pandemic, looking across at American listed companies, but the whole market has gone nuts. And it is a huge cost. We used to pay $80,000 a year in premium. We're now paying just over a million. So that is that is very expensive. Joseph, the workforce, as Mark mentioned, is now being paid 100 percent in US dollars. So they are in the best situation to fund themselves against rising costs and the rising inflation in Zimbabwe. There's nothing more we can do to make their lives easier. They already paid above the unionized market rate, and we pay 100% in US dollars. So they are in a good space from a Zimbabwe perspective. But all of us are being affected by these rising food and fuel costs, and we'll just have to watch the space.

But it is fair to say that the complexity of the framework the exchange rate environment in Zimbabwe mustn't be underestimated. So as dollar earners, our workers presumably benefit from the informal exchange rate, which runs at a massive, massive premium, whichever way you want to look at it, to the official exchange rate. So their buying power in local currency is increasing very, very quickly indeed, which is probably, I would have thought, more than outweighing the effect of genuine food price inflation.

Mark, if I can just add that currently there's no complaints from the mine side. The fact that we are paying 100% compared to previously only paying 60%, the workforce is really in a good position. So they're not complaining, they're happy. And even with some increases we see, they're in a much better position than last year.

Yeah. I think Dana should talk about Molly Green. Yep, please.

Molly Green, what we found is that there is an inferred resource, and we've got enough information that by re-logging and having a look at a core that are available, that we can upgrade that into a... Improved resource. And what's the word I'm looking for?

Improving the confidence up to M&A.

Yeah, indicated resource. And we're busy with that work. It's about 80% complete. And then we will compile a new resource and report back to the market. But we are confident that we can actually upgrade the resource from effort to indicated resource.

I guess the idea then would be that with an increased confidence level, we would then proceed as quickly as we could to the feasibility study with a view to making some money out of the mine. The only thing I can add to that is it may be that that asset could be overtaken by another asset, which may be more attractive and therefore pushes Marley Green down the pecking order. We do continue to look at other assets in Zimbabwe.

Thanks, Mark. I think we've answered the next question in terms of the status of new mining projects. Our projects, new projects are brownfield. They are not mining projects at the moment. So I think Donna has answered that one already. um alan you ask if expiration reveals increased resource can plant increased capacity relatively easily you're obviously talking about at blanket um and uh blanket does have some spare capacity uh both in hoisting and in the the cil but uh we are we will We will manage that situation because in the ramp up process, we've got to get tons up to about 2,300 tons a day. We've got milling capacity at that rate once the new mill that is being installed is in operation. And we will have to then look at the cost of any incremental plant capacity. That is not the big money. So I'm sure if additional resources are found that are economic to get out of the ground, then the right to engineering decisions can be made. Otherwise, the other projects are not contiguous to Blanket. They'll be standalone.

I forget, how much is BM10? I thought it was about $800,000, wasn't it?

1.5 million.

Okay. But it's not a large amount of money and it's relatively quick in the ordinary environment to get these things.

I just want to add that if we need to add another mole, it will not be as much as the bore mole is concerned. We've got regrind moles and then we've got our rod moles. And the regrind mole that we added now It's actually added quite a lot of capacity. And we will in future, if we look at expanding, we will add our primary mills, which is the rot mills. And Mark, there you are correct. The last one we added was about $750,000. So it won't be as much as the re-grant mill. And it's modular. If we want to add another mill, yes, you're talking about $800,000 if we want to do that. And then if you want to add to the CRL tanks, that's roughly, we just, you know, with the mole currently, we're adding an extra tank, and that's about $200,000. So if we need to increase, you're looking at an extra tank, maybe an extra primary rod mole.

Yeah, but put all of that in the context of the fact this mine's making approximately a million dollars a week of operating cash flow.

Yeah. Will asks a question about concerns about increasing consumable costs and possible supply chain issues. Yeah, Will, we have to be cognizant of that. At the moment, we are not experiencing any supply chain issues, but we are experiencing certain consumable costs increases, explosives affected by the international change in pricing. So we are managing our working capital to the best of our ability. We're buying as intelligently as we can. But I think this is a fact of life and which is something that our procurement people have to watch very, very closely. We have the ability to check whether anybody is trying to take an opportunistic approach to these rising prices and trying to profit here. And we'll keep a very, very close eye on that. But yes, diesel, we're seeing diesel prices going up already quite significantly. And as Mark's already spoken,

we uh we do use quite a lot of diesel with our gen sets so the solar farm is very very important to us um i just want to add that what we also see is that steel the steel price as part of our capital projects and and some of because of what what's happening we see some delays not not uh big delays but you know uh delays of about a month or so that we see that um Long lead items that we ordered are delayed by because of the effect of the war. But we haven't seen severe increases yet, mainly diesel and steel and then some explosives.

On the question about supply chain, I don't know if Will intended this, but we were somewhat concerned about the extent to which our supply chain relied on bringing goods up from South Africa through Byte Bridge. And we were pleasantly surprised. Virtually everything for the solar project came through from the east, came through from the eastern border post through Mozambique. And that actually worked very well. And also we're beginning to explore whether we can bring in projects from the from the west through walrus bay so we're trying to create more flexibility to protect ourselves in the event that the south african border suffers from the same sorts of disruption has happened last year when there was the um the insurrection in south africa well it's fair to say most of our stuff does does still come through by bridge yeah yeah

Mark, maybe you want to just look at Joseph Parish's question on cash flows and new mining assets. Just below wills.

With all those reasons to prove it's operating cash flows are insufficient for the sale of... No, anything, anything, anything of any... I mean, Marley Green... A million ounces could possibly support a mine of, say, 50,000 ounces a year. That's going to cost about 60, $70 million. There's no way we could do that from our own internal cash resources. Even if you stop the dividend, that's not going to cover it enough. When we make any investment evaluation, we take into account the obviously the money that we expect to come from the project and any shares that we'd have to issue to fund the project. And at the moment, we believe if we didn't do anything, if we just ran blanket for cash, we'd be able to distribute, Morris, what's the number today? It's about 275, $275 a share.

Now, that would be leaving nothing in the till.

Yes, just run it. If we just ran this business for cash, we could distribute $2.75. When we evaluate new projects such as Marley Green, we need to be comfortable that taking everything into account, both the shares we'd need to issue to fund the capital program, we need to be confident that the amount of cash we could distribute per share, fully diluted, must be appreciably more than, say, $2.75. Otherwise, it's not worthwhile. It's just not worthwhile. So we do take that into account.

Mark, if I can take the question on the earlier, that one of these new projects could go into production, I would say that within the next two years, hopefully, we will start building a new mine. and then you know if it's two years start to build a mine then it will take about one and a half years um that you will start breaking even and start making money um so i would say within the next three and a half to four years you will start seeing a um a new mine looking after itself, but adding to production, I would say within the next three years, we can see a contribution from a new project adding to the answers.

So building on what Donna just said and just following on from what I said, that doesn't mean we would need to raise all the money for a new project by issuance of equity. Clearly, we'd expect to be able to raise some debt. And let's forget, let's not forget any new project. The sort of sine qua non for any new project will be that we can we can export the gold ourselves. And therefore that means that that project will be capable of debt funding. And then also we do expect to make some contribution to the cost through our own retained cash. So it's not as though we'd have to go to the equity markets for all of the required funding. And let's face it, if for whatever reason the equity markets are closed, for whatever reason, we just do the project more slowly just defer it and do it as we did at um as we did for central shaft just just do it by by um by phasing it so we reinvest the cash that we were generating ourselves

So thank you. Thank you to the team.

There's one more thing. I mean, I did see some comments somewhere to the effect that management should have put out some sort of guidance about a recent announcement from the Zimbabwe government relating to trying to clamp down on foreign exchange controls. So there was a, I think Bloomberg reported a a speech given by Manangagwa. It's fair to say that Manangagwa makes these speeches and announces big picture policy changes, but the detail invariably doesn't become clear for days, if not weeks, after that, when that speech has been then converted into practice guidance notes issued by the RBZ and all the relevant statutory instruments. So in respect of that particular report, change in policy all we believe it means is that our existing overdraft facilities at the mine have probably been cancelled so three million dollars of existing overdraft facilities have probably been cancelled although we're not currently in overdraft right now but we're confident that that's just a timing issue and we'll get those overdrafts reinstated not not that we actually need them particularly but just understand that that it's very difficult for us to respond quickly to those bloomberg reports because the underlying facts take quite some time to establish.

Yeah, Mark, and to support that, even now we are hearing that the gold sector will be exempt from those new announcements made by the president. But until we see it in a statutory instrument, which is the legal standing, we just have to keep talking to the relevant authorities. But as Mark says, it only becomes fact once the statutory instrument is published and then we adjust accordingly. But we've got our finger on the pulse. But Mark says, you know, we're in a position where we can paddle our own boat, which is very comfortable.

And again, having said that, it genuinely is fair to say that the various mechanisms that we use for moving money around the place have stabilized. And the system, although it's complex, works better than it has done for many a year. So we're finding it, I wouldn't say easy, but we're certainly finding it very manageable to work in this environment. And I think that reflects the fact that there seems to be just much more in the way of foreign exchange available in Zimbabwe.

Has the last question come in from Anthony Mitchell?

I don't know what TOC means.

Total operating cost, I think.

I don't know if you have seen that or can... Yeah, I have. Generally, open cost operations are much cheaper than underground because, first of all, your workforce is a lot smaller. You're talking about 300 people compared to where we are employing over 2,000 now. And so that's why you can operate and open cost mines can make money at one gram a ton to one and a half kilometer um and i don't know if that answer your um your question but uh normally uh additionally open cost mine can operate at about half the cost of a deep level government

We've got quite a lot of it. We use quite a lot of information from our technical consultants regarding a sort of ballpark capital costs and ballpark operating costs for companies. open cast and underground operations of a particular type. But clearly, before we make any investment decision, even if we are going to fund the thing through internal cash flow, therefore equity, internal equity, we would do a feasibility study to get better clarity on that.

I think the biggest advantage of a surface operation is that you can get it up and running very, very quickly. Normally, you can get it up and running and playing for itself within two years, where with underground mines, you don't know, 10 years if you're lucky, and then you start production. So it's a lot less risky.

The only problem with open pit operations, everyone can see your mistakes, whereas underground, they're hidden, eh? Yeah.

Are we finished? Yep. So that has answered all the questions. I see no more coming in. So, yeah, thank you to all the participants. Thank you to the team for answering. And we look forward to talking to you again. And we're very pleased to have been able to present the results of a very good quarter and giving you an indication that the central shaft investment is beginning to pay off. and therefore we're confident to reiterate our guidance uh between 73 and 80 000 ounces but as you see april is already indicating that the mine is performing extremely well so thank you thank you for participating and we look forward to talking to you all again

Well, on one last note, it's got to be said that this is this is Steve's final quarter reporting quarter as chief executive. He'll be stepping down at the end of the end of June. And on behalf of his colleagues, we'd like to thank him for all the work he's done since sort of late 2014 is we've rehabilitated the company. We've made some great progress and I'm very pleased that you're handing it over in a reasonable shape. Thank you very much. Well done.

Thank you, Mark. And I know the team is going to be successful going forward. And it's very, very pleasing that the succession work we have done is paying off. So the faces are going to be familiar to all of you. So you're in good hands. And I wish the team all the very, very best. So thank you all. Thank you, Mills.