Caledonia Mining Corporation Plc Common Shares

Okay, ladies and gentlemen, welcome. Good afternoon. Welcome to this call to discuss Caledonia's results for the third quarter. In addition to the usual discussion of financial and operating results, we'll also discuss the preliminary results of the exploration program, the TARPA, which we published this morning. And I'll also make some brief comments regarding the progress at Bilbo's. I'm joined this afternoon by James Mufara. He's our Chief Operating Officer. He joined us in May. By Chester Goodburn, our CFO. And a new person, a new face I think to most of you will be Craig Harvey, who's our Vice President Technical Services, and he's responsible for our exploration activities, so he will say a few words about what we're doing at MATAPA. And then I'm joined by Victor Gapari, who's a director, and he will field questions relating to billboards and all the general environment in Zimbabwe. Before we get into the presentation, I just want to make a couple of observations. The first is that Caledonia is changing very rapidly. And that's reflected in the three announcements that we published this morning. First of all, we've got the financial operating results, which largely reflect the performance at Blanket. It's fair to say that production has stabilized from what was a difficult time in 2023, but we now need to address the issue of costs. And we are facing some stronger headwinds than normal, particularly in respect of higher electricity costs and labour costs and the effects of continued currency instability. We are accustomed to managing these risks and in the course of the presentation we'll set out some of the steps that we're already taking to address these areas and we'll also outline some other issues which at this stage it's too early to quantify the effect or indeed the timing when it will come into effect. So we've got the financial operating results relating to the effectively blanket We've got very encouraging results from Matapa, which reaffirms and reconfirms our strategy of investing in Zimbabwe to create a mid-tier Zimbabwe-focused Golpe Disa. I think that strategy is now being vindicated by what we're seeing at the top. And clearly we continue the dividend. The third press release this morning was the continuation of the dividend. We have attractive and competing calls on our capital across the business, but maintaining returns to shareholders remains a key part of our strategy. So with that, we'll get into the presentation. Let me just deal with that. So yes, we had a fatality at the mine in late September. James will talk a little bit more about that. Just under 19,000 ounces of gold were produced in the quarter. A little bit less than we did in the same quarter of 2023, but let's just note that was a record production quarter, so we're very comfortable with a production run rate of just under 19,000 ounces, and we remain on track to achieve the full year guidance of anything between 74 and 78,000 ounces. As I mentioned, encouraging results at MATAPA, which Craig will talk about in a moment. We've also announced the forthcoming sale of the solar plant. That's been operating slightly better than expected. We built it at a cost of about $14 million. We're selling it for just over $22 million. get the power that's generated from that solar project. So by no means using the benefit of getting that reliable power. And in addition, the new owner is now evaluating a second stage of that solar plant. So we can release the capital and use the capital elsewhere in our business. We mentioned the fact that we've declared another dividend of 14 cents. And we'll talk a bit more about Build Close, but we're continuing with the feasibility study, and we're making some progress now on funding options for that project. So moving on, I think... I think I've dealt with most of these things. I mentioned production, gold price benefiting from higher gold price, an average price in the quarter of over $2,400. That's resulted in improved revenue, improved gross profit. But the net profits attributed to the shareholders as Chester would outline, we then suffered the headwinds of continued foreign exchange losses and some of the unusual expenses which Chester would outline in due course. So I think with that we're going to move into the – yeah. So can I ask Craig – sorry, can I ask James to just run through the review of the operations of Blanket? James, could you do that?

Thank you very much, Mark. Good afternoon to you all. As Mark already alluded to, we regret to inform you that we lost one of our treasured employees, a JECAMA assistant, on the 21st of September. The said employee was in the process of installing support when this fall of ground actually occurred, fatally trapping him. Despite all our efforts with the rescue team to try and bring him out to surface and, you know, resuscitating, unfortunately, he succumbed to the injuries that he had suffered in this fall of ground. As an organization, Caledonia, we strongly believe in a culture of care and growth, and this is something that we treasure ourselves with. We also believe in total or real risk reduction all the time. And we believe in learning from the incidents that would have happened. We have given these families support and we've also supported the government with the investigation that they actually took out with regards to the employee that lost their life. Subsequent to the accident, we actually employed the services of DuPont or DSS plans to do a total diagnostic on our operations in order to see the whole of our value chain in regards to certain health. This work, we believe, will assist us in our quest for zero harm on our minds, which we believe and totally, entirely believe that is both a moral imperative and an operational imperative. On the production of of the quarter, I'm glad to announce that in terms of development, we actually came in 7% above, close to 7% above our plan for the quarter. This is good with regards to our future flexibility that we need, because the development is opening up our future possibilities of flexibility. In terms of terms, we're neck on neck with regards to what our plan was. However, we were set back because our grade was just around 4% below our plan for the quarter. This was as a result of a fall of ground that we had at the beginning of July in one of our stocks, Eroica, and we couldn't actually quickly and in time have the flexibility to replace this stock. As a result, we actually suffered this drop in our asset rate. We have ever since moved back into better stops to stabilize the grade, but it was a little bit too late to recover the quota at that moment. As a result of the grade drop that we had, we actually ended up with our ounces just on 6% or 9% below for the quota. The improvement that we see in the development and the achievements that we see with our targets at the moment will ensure that in the future, or isolate ourselves from incidents of inflexibility that hampered us in the previous quarter. Thank you, Mark.

Okay. I think we'll move on to finance. Chester, can I ask you to run through these pages to finance, please?

Yes. Thank you, Mark. It's good to see our revenue up by 13.6%. That's 28% due to additional prices or higher prices that we've received. Role fees remain flat at 5% of revenue, and production costs have increased by 2.9%. So it's good to see the cost of bulbos coming down, and also the revenues of bulbos covering the whole week of costs for bulbos. Production costs at Blanket have increased, and as Marcus said, we've got some cost initiatives to improve on that, and we'll get to that in a bit. And then depreciation is decreased, and that's due to lower ounces. I was quite pleased to see the gross profit at an increase of $0.37 for the quarter. We look at the production costs. This is on a per-ounce sold basis. You can see that the wages and salaries have increased, and that should be due to additional aid counts that are employed at Blanket. as well as overtime that we spend. And we've got some initiatives to turn that around. Consumables increased, predominantly due to once-off repairs and maintenance that we've done in our engineering and metallurgical plants. And that shouldn't reoccur. So I'm not too concerned about consumables. Other than that repairs and maintenance charge, we can see that our prices are really good. And there's actually been a reduction, a slight reduction, variable consumable costs on a per-ounce basis. Electricity has increased the blankets, and that's due to higher maximum demand charges that we are receiving. If you exceed a certain demand charge, or let's say electricity load at the mine's grid, the utility will increase the rates that they charge, and that increases the cost that we see In addition, there's also a penalty if you have a low power factor that comes out of your grid, and that has also increased our electricity charges at Blanket Mine. But we've got some initiatives and some of them have already been, or is about a week away from being implemented. Online costs and administration at the mine has increased predominantly due to the replacement of costs due to the Volatility has been seen in the ZIG, and all the local suppliers have increased the cost, and you can see that effect a little bit. It's not a big increase in absolute terms. All those, I've spoken to that before. That's covered by the revenues and on a break-even basis. If we look at the waterfall of our Q3 23 and how that compares to our current online costs. So we've decreased the cost significantly at Bulwark Oxide, so it's good to see that turning around. Our power, labor, consumables, and other have increased, as said before. And we can see that our oil and sustaining costs also increased, and that's pretty much due to an increase in our share price that increases the share-based expense. So that's actually a good cost to see. as our investors would be happy with increased share price. We've revised our cost guidance to 2024. Our online cost guidance is now set at $950 to $1,050 per ounce. And all these same costs are set at $1,450 and $1,550 per ounce. And that's increased predominantly due to the labor and the power costs, which we'll come on to in a bit. So these are cost control initiatives. Firstly, power. We are about two weeks away of installing power factor correction equipment. That's expected to save approximately $1.3 million per annum. And that should take effect in 2025, the full 2025 being installed in a couple of weeks. We are planning to convert our central shaft winder from AC to DC. And the efficiency that you gain from a power use perspective will also decrease your cost by 1.2 million dollars. And that should be implemented within 2025, so you'll see the full effect of that coming in 2026, and part of it coming in 2025. What we've already done is to increase our waste payload, wasting speed, and improve the sequencing of our waste accidental shaft. That's helped us to increase efficiency in our operations, and that's already taken effect, so it's good to see that coming in place. And we also plan to replace equipment with more energy-efficient equipment, and that will come through in time. That's not something that you will see immediately taking effect, but we are looking at more energy-efficient equipment. Then from a solar plant perspective, we're looking to get an external quality to build a Phase II. We expect that to be approximately 8 megawatts. And the rate that it saves, it serves approximately $1.6 million. Now, this doesn't come with a capital cost for us. We'll just be buying the power from a third party and in turn save on our OPEX. Further, on salaries and wages, we reside under six people of a certain age and plus. Our cost of $2.1 million, that's included in other expenses, so it's not part of our OPEX, but it's expected to save our OPEX going forward by approximately $400,000. And also, in addition to that, it brings about some efficiencies that we could generate by modernizing mine. We're planning to do quite a few IT initiatives, and hopefully that helps with the implementation of that, too. We also plan to... implement a new biometric clocking system, and let's attract staff at the blanket mine. So we have best tracking of our staff movements, see where we can gain efficiencies in time studies, and better and more efficiently allocate our staff at blanket mine. In addition to this is the output thrusting and preauthorization of overtime, so also to allocate labor better to various areas and also track that, but also look at the overtime and make sure that this overtime gets pre-approved so we know why we're spending money on overtime. So we believe that could help quite a bit in helping to manage our staff members.

Just before Chester goes on, so all those initiatives, some of them are very close to being implemented. Some of them will be implemented next year. We can quantify the benefits arising from those and we're pretty clear on the timing. Some of the things, replacing old equipment with more energy efficient equipment, of the biometric clocking system. At this stage, it's too early to quantify the benefits that we might reap, and also the timing thereof. But we should start to see some progress in terms of cost of production for early next year. So go on, Chester.

So the gross profit, as I said, it's going up by 37%. I'm very pleased with that. Net foreign exchange losses, that was quite significant. In the quarter, we incurred $3.1 million of foreign exchange losses. 800,000 of that would be inter-company foreign exchange losses that are not eliminated. That's also unrealized, and we don't expect that to realize. So I'm not too concerned about that. That's super strengthening of the RAND. So then what we see is $2.2 million worth of losses in Q3, in the devaluation of the ZEIP. We'll get down to detail on how we manage that. For the year, we suffered a total of $9.3 million worth of loss. That's significant for our business. We can no longer ignore that and say it's not a cost related to our business. We've seen this in every quarter. We've also not counted that back for our adjusted earnings to share. We look at this as quite a serious cost, and we try to mitigate the effects of devaluation currencies as far as we can. We'll get onto that in a moment. Under other, that's where we include the once-off $2.1 million of retirement fees, so that you won't see again. It won't be repeated. And the tax expense increased due to higher gross profits during the quarter. Here you can see the foreign exchange breakdown. for the nine months. And we've got the ZIG and the RTGS. Now, the ZIG is a new currency. The RTGS was abolished in 5 April 2024. And you can see that it was quite easy to see that we've got a very small cash and cash equivalence loss of about $2,000 when we had the ZIG. And that's it. How we manage that is to spend the ZIG. We try and spend it on efficiency. We do spend it on efficiency costs. to ensure that our cash gets converted to imagery that we can use at the mine, rather than keeping it in a dollar that could suffer the volatility that we've seen in this currency. In the first quarter, we had a conversion method where it locked up our cash, and that incurred $2 million worth of losses under RPGS. And other than those two, I'd say that the most significant line items that contribute to our foreign exchange would be the brilliant sales receivable and eventually the sales receivable. And the conversion and receipt of that cash is very much outside of our control as we receive our cash from Fidelity when they're ready to pay. So normally that happens in about 10 days, 10 to 14 days. But in that 10 to 14 days, there's a significant devaluation that likely seems to be You know, it's cool. It comes down to the potential bottom line in terms of losses.

Can I just make a point that people may not understand? There's no market for the – there's no properly traded liquid market for the Zimbabwe currency. The exchange rate, the official exchange rate, is just set by a committee, and it typically steps down, devalues in big steps. So case in point would be the devaluation of the ZIG. from about 13.7 to I think about 23, nearly 50% devaluation. That happened in a space of a few seconds. So it makes it very difficult. The magnitude and the speed of these devaluations makes it very difficult to manage. But there is no hedging mechanism and there's no exchange rate which allows you to move ahead of the curve.

I think that covers it. So the main mitigation to prevent volatility in the VIG and losses in the VIG is not to have any VIG as far as you can. So we try to spend that on expenditures. What I was also pleased about is the cash generation. That's before the capital changes. And again, we've got a quarter over $16 million for the quarter. If you see our 46 million that we've generated for nine months, that's more than double what we generated last year. And it's good to see that every quarter this year, our cash generation has been consistent. And it's been a lot higher than 2013. So it's good to see the shift turning around from 2013 to now. Good cash generation. We are spending some money on safety stock. to ensure that we've got sales available and bolster our production and not have any delays in terms of production. We don't want that, especially at the current gold prices. And we've also increased our prepayments for long-lead items, and that would be reflected in the capex that comes through Q4, predominantly, and about $1.4 million of that prepayments relate to the VIG, where we've made some prepayments by stock rather than all the cash. So... So that has significantly affected our cash flows, but not in a bad way. It helped us to ensure our production, get some safety spares, and also ensure that we don't suffer the evaluations. So it's just changed form. We expect that to turn around over the longer term. And it's good to see that safety equipment on the shelves. Other than that, That's well controlled. We still expect CapEx to come in at $30.8 million a blanket, so not any unexpected CapEx. There might be some that go over this next year, but the absolute number hasn't changed, and that shouldn't affect. So happy to see the cash generated again in this quarter.

Good. Thank you, Chester. Can I ask Craig to run us through the results, the MATAPA results, which again we announced this morning. Craig, can I leave you to do that, please?

Thanks, Mark. Good afternoon or good morning to everybody. So basically during 2024, Caledonia kicked off a first-pass, pretty widely spaced drilling program at MATAPA. As we can see on the map just to the right there, We have which shares a common boundary. So they're right next to one another. has three main trends. So we have, basically, the northern, central, and southern trend. These three trends, in total, are just over 9Ks in strike length. So it's a fairly expansive piece of ground. So for this year, what our focus was, it was to test the continuation of sulphide zones below the historic O-group oxide that was mined, typically during the 80s and 90s under Anglo-American. And so clearly, we have quite a bit of data from Anglo. you know, some old building databases, some underground working planes from previous operating as well. And then we wanted to trench across the Matata property to have a look for prospective new areas that might not have been found or had been looked over. So we had drilled just over about nine and a half thousand meters of drilling, a combination of diamond and reverse circulation drilling. That was from a total of 68 holes. The grade in general is very, very similar to Bobo's. So again, I've just got to stress that it's very widely spaced. It's about 150 to maybe 200 meters between drill holes. early days. The widths may be a little bit thinner than bulldoze. There's still a lot of work to actually be done. So, you know, just looking at the grades, I mean, those are six holes of, as I said, 68. In the press release, it'll be available on our website as well. The full details are there. You can have a look through all the holes. But something that sort of stuck out is that, yes, quite clearly, sulfides continue at depth at similar grades. But our great satisfaction is Caledonia has defined an area on the eastern portion of the Metapas central trend, and we call it Melpuzi. And so the foothold there, the NPZ RC number two, that's just one of the holes that is uh from there and so as you can quite clearly see you know pretty decent grade very very shallow sitting at 12 meters below surface and it does appear to be oxides right so oxide in the material and this is quite significant in the fact that The bulbous that we had apparently still has two oxide heat bleach processing plants. The closest, well, they're about the same. The one's 3.5 k's away. The other one's 3.2 k's far. So we have drilled some extra holes. They are in the tables in the press leaf. There are 15 holes that we actually drilled in. Sorry, nine holes drilled, six of which are gray. And of great interest is, of all of the intersections in the Mapuzi area, Eight of the 15 intersections that we actually report with GRADE are above 50 meters. So 50 meters and shallower. The average of those eight intersections is 4.21 grams per tonne. And so we can drop that to the high GRADE one of 10.95 and the average comes back at 2.6. So it's very, very exciting for us going forward into 2025 and 2026. Our focus is going to be on purely the Putsi area. We are pretty sure and pretty confident that the potential for near-term oxide mineralization is there. and clearly we'd like to get that into the bank. The second focus is going to be drilling on the Matapa North area, which is directly, basically, along the Borbos-Matapa shared boundary. And that is about a K and a half from the plot. So our focus is to get that into a mineral resource of some form or fashion, be it inferred, indicated, whatever it is, and then to focus on them and put the area. So I think going forward, we're very happy that we have proven up that the sulfides continue to get, and we will execute a standard link program To get that onto our books and then put it in the area, very, very exciting. Thanks Mark for any comments.

Okay, thank you Craig. Should we move on? Okay, just a few words about Build Over. We continue to do work on the Feasibility Study, so there's no update there. All the information you see on this slide is from stuff we previously published. We still remain on course to publish the feasibility study in the first quarter of next year. And for those of you who are familiar, the main focus of the work is to upgrade it from the existing PEA to a feasibility study is to upgrade the work that's been done on the tailings facility. Whilst that's going on, we're also now progressing our thoughts about funding. Clearly we had some internal thoughts when we bought Bill Bowers. We now have those validated by a specialist debt advisor and we're now in the process of beginning to engage with prospective funders. We're looking at what seems to be coming into three potential funding structures using various combinations and various permutations of senior debt and mezzanine debt. So we'll continue to flesh those out. And then in due course, very much in the hands of the speed at which the fund has moved, that in due course, we'd then be able to announce the senior lender and the debt arrangers. But I can't really give any indication as to how long that will be. But that's making good progress. Moving on. In terms of outlook, our immediate area of focus is to maintain production of about 75,000 ounces a year. As you've heard, we do need to pay closer attention to the cost, particularly electricity and labour. Some of the initiatives we've taken were able to quantify. Some of them at this stage we can't quantify and we can't put precise but we're beginning to make progress there. At Bilbo's, we expect to publish the feasibility study in the first quarter, and as I said, we are making progress on various funding options. And as Craig's just outlined to you, we've got exciting results at Matapa from three areas that were pre-known, and then from one new area which effectively we found, and we expect that exploration to continue maybe in a couple of years before we get to a But given its immediate proximity to Bilbo's, anything we find at Matapa should give rise to very substantial synergies as a combined Bilbo's-Matapa operation. So we've taken about half an hour to go through that. I mean, we can now open this out to questions. Camilla, do you want to share that?

That's fine. Can I just ask that you raise your hand if you have any questions?

People can type them, but the problem with typed questions is sometimes you may not get the nuanced answer that you're looking for. So you probably get a better quality of answer if you actually raise your hand and do it written. But of course, if you don't want to do that, we can manage.

The only question so far is about having the drawing on slide 14 available on the website. Yes, we can do that. It's open in the press release. There's a question here from Ian Jutland, so I'm just going to unmute you now. Ian, you should be able to speak. Hello? Can you hear me?

Yes. You can hear me? Yes. Okay, good. Right. Yes, I think I had a similar question last time around, but it's kind of you've highlighted it, I think, today. It's to do with the accounts where you obviously have the IAS EPSs and then you have your own adjusted. And you've touched on something I was going to talk about anyway, but when I look at your notes, the difference, I think that correct me if I'm wrong, but the main difference between the IAS, EPSs, and the adjusted ones are one FX, which clearly you've alighted on as being of concern. And I think the other factor was, I think, minority interests, which obviously takes up quite a large chunk of profit after taxes.

Well, Chas can answer that question, but I would, yeah, Chas, I'll leave you to answer that question.

In the first round of the NCI, we show what is EPS on a typical basis. And secondly, we don't deduct the ethics. The ethics that we do deduct would be the inter-company ethics that I spoke about. It's not that big, it's not the significant portion. The significant portion of latency is the zero.

So what's the main difference? What accounts for the main difference between the two?

If you look at adjusted aims to share, we take out non-controlled images, the deferred tax, and some foreign exchanges. We don't see a structural to our business. What we've done in the past was to remove the foreign exchange, because we have foreign exchange gains for, let's say, 2020, 2021, So we removed those profits from adjustings to share because we didn't feel that was part of our business and we didn't want to show a number without that. When we look at 2023 and 2024, we see large foreign exchange losses. And now for this year, because we've seen significant losses of about 9.3 million, we deducted the foreign exchange losses that pertains to the ZIM operation So we didn't count it back, and we adjusted it to share in CELP.

And you mentioned minority interests.

Yeah, so we want to show a number that's attributable profit to our business, so we count that back.

Perhaps I'm not understanding, but isn't that money paid out, which is a long-term thing?

No. When we adjust the foreign exchange movement, we only adjust it for our share of that foreign exchange movement. Clearly, those foreign exchange movements will encode a blanket. And so the minorities of blanket, they have to stand behind their share of that. I think that's the confusion. The calculation of earnings per share is based on attributable earnings per share. So that's after the NCI.

Right, okay, so really minority interest is then standing behind their share of the losses.

No, they have to, absolutely.

Oh, no, that's fine, that's fine. It just had a line minority interest, so I thought possibly you were just adding back their total.

So what we do, the adjustment for foreign exchange, the adjustment is further adjusted for the NCI components and the extent of any tax relief on the foreign exchange loss.

Gotcha. Okay. So it's effectively, yeah, the two words misled me to be thinking. Gotcha. Okay. Could I ask another question? Sure. It's to do with, I think you gave examples of putting in extra inventories to try to ensure that if you hit low grades, you're able to have flexibility, perhaps more faces to do the mining. I was just wondering if you could give me an example of how the extra inventories will help you

Hold on, the inventory, I think you were talking about development, and clearly we try to develop in as many areas as possible to give us the flexibility in the event that we have another event, such as happened at Eureka. The build-up of inventory is to make sure that if we've got enough backup stock in case, say, pumps fail, we put in some new pumping systems on the bottom level of the mine, on 34 level, If those pumps fail, that means that we end up with too much water at the bottom of the mine. Similarly, we're having to report spare parts to service the new tailings facility. And then in addition, we also increased our inventory to mean that we're spending, instead of holding ZIG cash, we spend ZIG cash and we buy whatever it is we can buy that we use in the business to minimize our foreign exchange exposure.

right okay i understand and i just one last question obviously it's interesting and quite exciting that you discovered oxides in in matava and i think you mentioned you know you're looking at a two-year horizon um for any sort of development so would that include um doing some shallow mining for taking out the oxides that you could yeah look if we can definitely we had a very unhappy experience in oxide mining

a couple of years ago, so we certainly don't want to repeat that. But if we can get our hands on relatively shallow oxides, we will do, and we can put it through the existing heat leach facilities and turn it to cash as quickly as we can. So if that's economically viable, we will do it, but we're not going to fall into the same, literally the same pitfall in early 2023. So yes, it makes sense, clearly, but on a prudent basis.

Could you remind me what happened at Bilbo's? Because obviously you thought that you could do it there, but it didn't turn out to be.

It turns out that the stripping ratio was too high. So we will be able to access the remaining oxides at Bilbo's in due course as part of the broader sulfide package. But on a standalone basis, it just wasn't cost effective.

Carrying too much earth around.

Yeah.

Gotcha. Okay, so that's been very helpful. Thank you.

We do actually have some written questions, which are quite detailed. Can I try to address these written questions? Yeah, okay. The first question was, please explain the circumstances surrounding the fall of ground in Eroica. Craig or James, do you want to talk about what happened in Eroica, the fall of ground early in the third quarter?

Yeah. What happened was a very unfortunate instance where there was two structures that was very, you know, it was forming a host structure. Some of the people that understand this would remember. So it was forming a host structure, and in between, you would obviously form a wedge where our teams were supposed to proactively identify that pin this wedge and be in a position to carry on with work. Unfortunately, we did not do that time, actually. And as a result, when they were trying to put in support, they did unfortunately not put in temporary support. The risk was not perceived to the extent to which it was. And the fall of ground happened, unfortunately, when they were still there. And we lost the man.

Okay. And then the further question was the incident at number four shaft that disrupted hoisting. That was quite simply a piece of equipment was being lowered down the number four shaft. It broke loose. It fell down the shaft and caused some damage to the shaft infrastructure. And that lost us about, what, a week's worth of hoisting up number four shaft. Was that correct?

Yes, it was a week's worth of hoisting.

Yes, but that's now been resolved. There's a very detailed question about the, which I think Chester, I've asked Chester to deal with this. The difference between IFRS production costs on page 11 of 20.1 million and blankets production costs on page 12 of 19.3 million. Chester, are you able to address that easily or does that require an email to the questioner?

It might require email, but if I look at page 7, that's where production costs are shown on the slide, not page 11.

I don't know, actually, this is written, so I don't know if page 11 probably refers to the MD&A or something, or maybe the accounts. I don't know what documents have been referenced here.

19.3 million, I'm going to assume a few things, yeah? But if it doesn't answer, let's do it on email. 19.3% is the cost at blanket. We do incur some costs at a group level. It gets added to that. And you also get the bulwark costs.

So, Retabilia, please, if you send me your email address, and then I'll forward your email to Chester, and Chester will deal with this over email. It's a bit too detailed to go into on a call like this. The further question is the reallocated employee costs. into the Shared Services Centre. It's about $2.4 million for 2024. Those are costs that we will need to carry as we go forward with Bilbo. So yes, those will be recurring costs. So where we are at the moment is we're effectively building up a head office infrastructure to service not just Blanket and Caledonia as it currently stands, but Blanket plus Caledonia plus Bilbo as we will be in the future. And so we are in this uncomfortable period now until we get billboards up and running of carrying those costs. Now clearly when billboards are up and running, we do expect our all-interesting costs and our online costs to fall very, very substantially as we spread those shared services costs and the higher head office costs where there's substantially more production. So it will work its way out in a wash over the course of the next couple of years, but we need to have got billboards up and running Okay, so the other question was our funding in Zimbabwe, the facilities and working capital. Chas, did you want to talk about liquidity in Zimbabwe?

Yeah, so as we go forward, Mark mentioned, we've got some cost initiatives that should bring down our operating costs going forward, so that can increase the cash generation. the working capital outflows. We don't see that carrying on going forward. We just got the safe space to ensure that we don't have any delays in our production so we don't see that cash coming through or cash expense coming through, cash outflow. So yeah, our cash position should improve going forward. And for the short period of time when we've increased our unit fee, we will be utilizing the full facility before you end, but it should normalize going forward.

The point of those facilities is to use them, and I know that the blanket is very undergeared.

Maybe I could add to that. I mean, Mark did mention the solar plant that we're planning to sell for $22 million after CGT, which generates about $19 million. I think it's very profitable at these gold prices, so you should see an increase in the cash flows coming through in 2025. So all these factors will improve our cash flows going forward.

Well, then the final question was the ZIG, the adoption rate of the ZIG, and do locals, do locals involved with it still primarily contact in dollars? I guess the person who's best placed to answer that is Victor. Are you able to talk about these the general acceptance or non-acceptance of the ZIG in-country?

Thank you, Mark. At the moment, if you look at the global transactions in ZIM, what you find is that the US dollar is somewhere between 70% and 75% and moving up to probably somewhere between 75% and 80%. So approximately 20% to 30% of transactions in Zim are mainly in Zig. So there is a level of acceptance where you have to use it anyway. But for us, because we get some of that money in Zim dollars, in Zig like Chester said, we use it to pay taxes and buy some local consumables.

And I think the other trend in Zimbabwe is the extent to which people don't do banks anymore. Do you want to go back to the sort of debanking?

Yeah, a lot of Zimbabwe, to a large extent, also operates a cash economy. Because you find the general public, because most of the businesses have gone informal, because of unemployment, a lot of people are informal traders. Informal traders. So those transactions in that side of things is mostly cash. So you find most of those transactions actually use dollars rather than Zs.

Yeah. Yeah. OK. Right. That deals with those written questions. Any further questions come up?

Yes, there are. So Howard Venker wants to ask a question. How is your unmuted?

Are you ready?

Yes.

Oh, good. I have a few questions. Craig, you cited one hole in Mutapa. Did you say 1.5 meters or 5.0 meters? I'm not quite sure. You said 15 or 50 meters of some grade, and I didn't know which one you meant.

No, it's the fourth hole that's listed there. So it is at around 50 meters below surface. It's four meters down the whole intersection at a grade of 10.95.

Oh, I see. A 50 meters down hole. OK, I misunderstood.

No, no, no, no.

It is 50 meters below surface. One five below surface.

And the width is four meters. Got it, okay. And Chester, could you please explain, no, I'll rephrase that. Is a large increase in administrative expense attributable to expenses at Bilbo's and Metabo, or is that something else?

Yeah, if you look at our admin expenses, it's increased quarter on quarter, increased by approximately a million. Yeah. And so that's predominantly cost to do the feasibility study. So we've both put our forces there to complete that.

Okay. That's the point I was making earlier, which is that we can't just, over the course of the next few years, we've got to build up an owner's team to build this project and then run the project. And so we will be having costs at a head office level or a group level to build this project.

That's what I thought. I wanted to clarify that in my mind.

The other slight problem arising from those is those costs aren't actually tax deductible because they're not in a taxable entity. That's one of the reasons why our effective tax rate looks quite high because we've got costs sitting in areas that aren't making profit and therefore are not having tax deductions. Again, that will all wash out eventually once we've got billboards up and running.

You preempted my next question about taxes. Is the foreign exchange loss also tax deductible or not really? It's partial.

Yes, which is most of its real-life portion.

Okay. And you also said you're going to save $1.2 million of electrical expense compared to now. I think you meant compared to now. Does that mean that the financier owning the solar plant will actually save you another $1.2 million?

Yes, so the solar plant will save you $1.6 million. $1.6 million. $1.6 million. get somebody else to build that, so it would be a PPA that we enter, and the cost would be cheaper than, and that estimates based on a mixture of using Jamfix or the utility, so that's what we'll be saving to, instead of using the utility at a higher cost, we'll be using the solar plant at a cheaper cost, and that should save us about 1.6 million.

And is that also 1.6 million cheaper than what it is now, or cheaper than what the utility would charge?

Currently, you sell the We're reselling the plant, and we're going to generate cash for that. But this would be cheaper than that phase one. It's cheaper than what we pay at the moment. That's the point.

Oh, good. Oh, good. And second to last question, I don't know, a point. Chester, on your cash flow statement at the bottom, it looks as if you're ending balance is a negative 7.6 million. And I think you meant the cash outflow net was 7.6 million because you do have 7.2 million on your balance sheet. So the last label on that statement is a little misleading. You might want to clarify that. And Victor, finally, could you please tell me what inflation has been in the most recent month, maybe October in Zimbabwe, if you know?

Well, if you look at the U.S. dollar inflation, it was less than 1%. And the U.S. dollar inflation, the big inflation, if my memory serves me right, might have been around 6%, 7%. I think that's to my colleagues. Does any one of you remember?

No, I could find out. I could find out. I need to search it out a bit. I couldn't. I couldn't even hear the score.

Yeah. Victor, did you say 6% or 7% in ZIG or 1.6%?

No, no, no. I say the U.S. dollar inflation was less than 1% month-on-month, and the ZIG inflation was probably around 37%. I actually double-checked that before I confirmed.

That's okay. 3.7%, you said, right?

Yeah, no, don't hold me on that figure. Approximately, approximately. I have to double-check it and send it to you. Sure.

I just wanted to make sure I heard correctly.

Okay. Actually, yeah, no, I have the figure. Official U.S. dollar inflation was unchanged at 0.7% in October, while the ZIG inflation soared to 77.2% month-on-month after the Arab visit devalued the local unit at the end of September. Okay, thank you. This is a figure released by Zinstat.

All right, thanks, guys.

Mario, I just checked the cash flow. It seems right.

The cash flow is right. The label makes it appear as if your ending balance was a negative $7.6 million. And I think what you meant was the cash outflow was $7.6 million. Because cash on hand is $7.2.

Yeah, I'll send you an email with that, but it should be negative.

Because the balance sheet shows $7.2 million in actual cash. And the label on the cash flow statement makes it look negative.

Howard, have you got any more questions?

No. Camilla, thanks.

Mark, thanks. One more question from Nick Denham. Just hold on a sec. Nick, you're unmuted.

okay thank you very much okay um craig you're very interesting discovery um do you have a sense of how long the strike is on the undiscovered area on that yeah on that on that particular one from what we've uh outlined from our trenching it's about eight it's about 800 meters of strike and it's made up of two, possibly three zones of various widths. Okay, so having seen the aerial photo, the sapphire photos of the area, it looks fairly well-trodden that the area has been worked for extensive periods of time. So how many more, is it possible that there are many more undiscovered similar types of appearances in that area? Okay, so I'm going to be cautious with what I say, because obviously I know I'm not providing forward-looking statements as such, but Bulbos has quite a comprehensive set of EPOs, claims, and other patches of dirt in that immediate area. So we are busy putting all of the info together. Structural point of view, There's quite a number of, quite a bit of folding and shearing that takes place at the sort of northern end of the booby green, greenstone belt. And as we know, gold loves shears and bends and things like that. if you look at uh who our neighbors are or our closest um people and if you had as if you had a look on google earth you you would also notice further to the north is a couple of other historic pits um which if memory serves me correctly or if my eyeball is working it's part of the border's properties or very close to it. We have Loney Mine, which is sitting on a structure to the south of the top of it. It runs into the Bordeaux Holdings. And Loney Mine, I'm not going to quote a number because I'll probably get it wrong. I'll switch numbers around. It was a million ounce producer from what I understand. So I think the camp that we're in, and this might be a good term for it, is that you know, Bulbo's, Matapa, whatever, but it's probably that Bulbo's mining cap is going to become the future main for this area, because I really do think that there's a lot of exciting potential in this specific area. So, it's okay, coming back to Matapa, how much of Matapa have you covered systematically to find these possible outstanding oxide water deposits? You know, we... So we've covered about 60% of the area with trenches of what we want to do. I think it's now standing at just on 13,000 meters out of a budgeted total of 22,000 meters, I think. And so we've put a, you know, and I said that we have completed activities for 2024. So as we enter the rainy season, it just becomes very, very difficult. It becomes costly. We have to keep the trenches dry. So we'll pick up the remainder of the trenching activities and other surface activities from probably about the end of March and then run from March until the beginning of November of next year. OK. Thank you, Greg.

Thank you, Nick. There's one more question from Yuen Lo.

Hi, guys. Congratulations on the very interesting results from Motapa. Sorry, I joined late, so this may have been asked already. But have you done any test work yet on the Motapa Southside? I understand it's very early days, so probably not, but just curious.

Have we done any what work?

The test work. So at this stage we haven't done, but what I can say is that we have put sample material through our assay laboratory at Isabella, which is on the Bildner's property, specifically for bottle roll tests, and then those samples are hard or duplicated to be sent off for fire assays. And then obviously what that gives you is it gives you an indication of what the oxidation level is. So if you've got a fire assay of two grams per ton and a bottle roll of one gram per ton, it means that you can realistically, under oxide heat leach conditions, expect to get somewhere near the one gram per ton. So it's very early days so we have the oxides that we're going to have a look at and then as we go forward we also generate sample material for methodological testing on the sulfides at to see if they are amenable to the proposed bulldoze plot what's the depth of our weathering um is it just uh motapa central that you see oxide potential No. So, I mean, on Matapa North, Matapa Central, Matapa South, there have been historic oxide mining down to depths approaching somewhere between 30 and 40 metres. The weathering profile does change. It's not, you know, quite uniform. But I think, in general, you could look at a 20, possibly a 25-metre depth of weathering. OK. Thanks very much.

Okay. Are there any further questions? No, I think that's it.

Okay, just pause for, if anyone has any further questions, put your hand up now, we'll quickly send something. So I don't see anyone coming through. So thank you for your time this afternoon. And we will be doing the same thing again when we publish our full year results, which will be towards the back end of March next year.