Caledonia Mining Corporation Plc Common Shares

Good afternoon and welcome to the Q3 2025 results presentation for Caledonia Mining. Today we're joined by Mark Lehman, who's the CEO, and he's going to introduce the webinar and start his presentation. Mark, over to you.

Thank you. Thank you very much, Tilly. Shall we open the slide deck? I can't see the page. Move on to the forum. page, next page, there you go. And then the presenting team. So, yeah, I'm Mark Limmel, Casadania's Chief Executive, joined by Ross Gerrard, the CFO, who will run us through the financial numbers. James Mofara, the Chief Operating Officer, will talk to us about operations. Victor will say a few words about Bill Bowers, and Craig Harvey will talk to us about some of our exploration Can we just move to the next page? Okay, the first thing I'll point out is that, as you probably noticed, we no longer publish the standard sort of management discussion and analysis and the detailed financial statements. So I'm caught will produce what we've done this morning, which is like a truncated version. But I think that that's more than adequate for conveying the substance of what we're doing. But as we get into the presentation, first of all, we must recognise that we had a fatality during the quarter and we extend our condolences to the family and the congregation. lost his life. James will talk to us more about what we've done in the aftermath of that to comprehensively review our safety procedures and safety practices and what we're doing to strengthen our risk management and workforce protection. So James will go into that in some more detail. It was a solid process. blanket was just over 19,000 ounces and we sold just over 20,000 ounces and that was clearly we've clearly been helped by the rising gold price so the gold price is up 40% quarter on quarter comparable quarter to this quarter to just over three thousand four hundred dollars of profitability. So revenue up 52% to $71 million and EBITDA up 162% to $33 million. Ross will clearly provide more information on the financials. With respect to Bilbo's, as we say in the RNS, we expect to give an update as to where we are and where we're going with that imminently. So Victor is on hand to say something, but frankly, until we've imminently said something, there's not a great deal we can say at this stage. And then Craig will run us through the exploration programs at Blanket and Matapa, which we're advancing and which show addition to these results, we've this morning declared another quarterly dividend of 14 cents per share. So with that, can I hand over to James to run us through the operating results. James, over to you.

Thank you very much, Mark. Good day to you all. It is Very sad that, I mean, in this quarter, we actually have to report a loss of life incident that occurred at our blanket mine. In this very quarter, one of the things that why it's not this tragic is we had seen quite a serious improvement in terms of our health and safety, you know, parameters, and that's in terms of, you know, lost time injuries, in terms of environmental conditions underground, ventilation conditions underground. We had seen an all-around improvement in accident-free days. We had seen quite a serious improvement. However, we still suffered this loss of life in which a gang leader who was in the process of conducting secondary blasting actually had a premature detonation and he lost his life. Secondary blasting operation is an operation where we break some of the bigger rocks that could have been generated during the time of primary blasting so that you can send them through into our hall passes and be in a position to take them out to surface. Immediately after this accident, we embarked on an investigation, thorough investigation and extensive investigation to determine the root causes of this accident. We had also reported, we reported also this to the government, who also actually conducted a thorough investigation on their own to determine these root causes and possible areas where we can see improvements. The investigation is complete now and action plans that we found out are currently being implemented to avoid any possible recurrence of these significant unwanted events. So one of the key issues that we still need to deal with is the issue of our employees and the higher risk appetite that we see within the operations. if you can just go to the next slide please and the next one in terms of the slides that are now showing i mean you will see that this depicted consistent delivery that we are now witnessing at blanket mine from the third quarter of 2024 to now you can see that the delivery has almost reached almost delivering at the same level. This is, you know, the recipe to good production and actually consistency. That's what the plant wants. The plant wants consistent delivery. This is what we're beginning to see. This has been brought about mainly by three issues, but there is obviously a lot more other issues behind this. And the first one is the introduction of the short interval control system that we see on the mining and the metallurgical side, where production is managed on a short interval control basis. have seen is that there's been a consistent tonnage throughput because now the plant can feed from the stockpile, and we are in a position to see consistent throughputs due to feeding from the stockpile. The third reason for this consistent performance that we see with the tonnage and steady-state performance is because with the improvement in development that we embarked on starting at the end of last year, and even carrying on with this year, we are seeing an improvement with regards to flexibility as we are opening up better and more areas for production underground. However, on the same top graph, you see that there is an unfavorable drop in the orange line, which is the grid line. The reason for the drop in the grid line is linked to the loss of life accident that we had on the 22nd of September, where were actually going on. You will see that this year also a negative impact in terms of our recovery which is on the graph below on the line on the graph below where the graph shows that the recovery also took a negative dip because of the grade that actually went down. The good news however is that the recovery for the year to date is still on plan and If you may, just turn to the next graph. The next, the table shows how our mining matrices were above plan for the quarter, which is actually showing a healthy production throughput throughout the whole quarter in terms of our turns broken, trimmed, hoisted, and most importantly, in terms of our development to generate new areas where we'll mine from. You will see that we work green in these areas, and it's very important to be healthy in all these areas. This is consistent production all around. Achieving development will also help us to make sure that our flexibility going forward is going to be better, and this will actually positively impact in terms of employee productivity. Color which is not green is the gray color, which we have already explained that some of the higher-grade areas, we had to stop them after the loss-of-life accident that we unfortunately suffered on the 22nd. And because of that, we actually see that the grade was at 3.04 grams per ton. However, if you can just carry on to the next table, we see that as blanket, we are on course to meet the increased guidance. uh... on these uh... you know Preservation, you will see that the tans milled are still about 7% ahead of our desired run rate for the year to date. Of importance, however, also is the issue with regards to the tail grade, which remains at 0.2 grams per tan, which is our plan, consistently very, very low, which is showing that our recovery within the plant has remained consistently very, very high. The ounces for the year to date is still, even in the end of the quarter, still 3,000 ounces ahead, clearly showing that blanket is on course to meeting the increased production guidance is given out to the market. If we can just go to the next graph, which shows that we are still securing the future. This production has not just been to meet today's need, but it's also securing the needs of tomorrow. You can see that in terms of our reserve generation, which was positive for the quarter, we have met today's production, but without destroying our ability to meet production targets within the future. So although our set-out goal at the beginning was simply not to deplete reserves, we, because of better production, better development, actually added reserve ounces as well in the quota due to better production. This is a healthy state to be in. If you can just go to the last one, which talks about our focus on productivity. You will see that blanket being a mine that has been in operation from 1904. Some of the areas are further and further from the shaft barrel and deeper as well. There is need for us to improve productivity and introduce technology within our mining space. We have seen that ourselves as mining, I mean we are price takers and the only area in which we can actually improve our competitiveness is if we can improve productivity. We have thus embarked on implementing technology in the mine so that we can better position ourselves to be more productive going forward. In this example, I've just given three of the areas that we have chosen to embark on, which is engineering areas, and one of them being introducing main carriages for man riding. This has got, you know, the improved impact in terms of face time so that people are on the face in good time and also so that people have got energy when they arrive on the face. So we have started to implement this within our working areas as a way of increasing productivity and dealing with increased costs that invariably come with an aging operation. And most importantly is the technology that we're improving. We are doing a lot of the work in-house. As a result, it's costing us less to actually implement this technology. We intend to continue to increase and implement this technology to both increase productivity

Thank you, James. Ross, do you want to run us through the finance, please?

Thank you, Mark, and thank you, James. My pleasure. Good afternoon, everybody. My pleasure to run through the financial results. As what James described, it's been a challenging quarter, but certainly well delivered. Excuse me. So if we can turn to the next slide, a quick overview of our financial results and a summary. You'll see gold sold is up 9% at 20,000 ounces against gold produced of just over 19,000 ounces. Solid quarter there. I will highlight that those gold produced ounces are the blanket ounces. There were some 437 ounces that was generated from billboards that we don't account on this table just in order to calculate our odd mine costs, etc. It's a very solid quarter. set of numbers in terms of ounces produced and sold. Just dropping down below that first line, you'll see the online costs, which were up 27% quarter on quarter. And that's driven by our sort of traditional elements of electricity, labour and consumables. That increase was incurred this quarter, as James has indicated. You know, there were additional volumes that were having to be processed and moved to compensate for some of those low grades. And importantly, the teams had to be shifted around because of the unfortunate incidents. So when we're comparing... Against those areas that were planned to be, or scheduled to be worked, there were a number of moving parts that obviously resulted in additional costs, but also additional volumes having to be moved, offset by that lower grade, which obviously came at a cost, and that has driven our online costs. Dropping down to our all-in sustaining costs for the quarter, you will see that they have equally moved up some 40%. and that's predominantly due to those on-mine costs that I've just mentioned, but also the higher gold prices impacted our royalties, and that's dropped down into the impact of our oil and sustaining. Overall, a really good result driven by that gold price that Mark had mentioned at $3,434 an ounce, which was a really pleasing result and has really benefited the and the results that we'll talk to you. So moving to the next slide, and we'll talk a little bit about the profit and loss. Happy to report another sort of quarterly revenue number of $71 million, which is back on those good ounces produced in all-time gold prices. You'll see that royalty number has similarly increased in line with those revenues, and those production costs were up, as I mentioned, in terms of additional volumes moved at a lower grade. Depreciation has largely been in line for the quarter, and I'm very pleased to report on those net foreign exchange losses, where we've continued to benefit from access to the willing buyer, willing seller market, and being able to deploy our ZIG component. And if you look in the nine months column, you'll see that we're just under $3 million compared to a $10 million type number for the same time last year. So we're really pleased with that result in terms of delivery in the income statement. Our corporate line items have increased, and that's due to a higher equity share-based payment valuation that was driven by the share price. but also a number of one-off expenses that you'll see in that year-to-date number in terms of some of the corporate team reshuffle. And then lower down, below the line, that tax expense is higher, and that's due to the good operational performance and the benefit of the gold price that – You must remember the solar sale that's been included in that number, and importantly from a cash flow perspective, includes the capital gain on that solar plant sale. So if we quickly move on to the next slide and talk about cash flows. The net cash inflow from operating activities was a very solid number, just a shade under $14 million for the quarter. impacted by some large negative working capital movements around $8 billion. Those are timing in terms of some investments in terms of consumables and then the traditional working capital movements in terms of ounces, gold sales, receivables and the like. Tax payments, as I've mentioned, included that $2 million in terms of cash outflows. But then lower down in terms of capital expenditure, we're largely on track for the year. We're not readjusting our forecast spend, and we've continued to invest and deploy money into our fixed-term deposits. So you'll see we've got $18.5 million now sitting on fixed deposits, and they all sit offshore here in Jersey. So a really pleasing result year-to-date. You'll then see the $14.7 million worth of dividends that have been made year to date. It's split in terms of 6.6 for our NCIs and 8.1 for Caledonia shareholders, comprising of three quarterly dividends that have been paid in the nine months. And as Mark mentioned, we've declared our customary quarterly dividend of 14 cents per share earlier today. Importantly, we closed the period with $7.3 million of cash and cash equivalents at the end of the quarter. And if we want to move to the next slide, we'll see where those funds are held and also, importantly, from a liquidity position where we sit. So in terms of having cash on hand of $15.6 million, we've got those fixed-term deposits that I mentioned of $18.5 million, and then we've got some bullion on hand and gold sales receivables at the end of the quarter. But overall, including our bank facilities, we have a total liquidity of just over $44 million, which places us in a very healthy position and have the ability to deploy funds against some meaningful projects, which is very exciting. I know James has spoken about around cost initiatives, but I just wanted to turn to the next slide and I guess take a minute to look at our cost profile, which has been a ongoing team exercise. And I just wanted to highlight or take a minute to really look at our cost base against others. And we've been benchmarking our cost profile against our similar African peers, admittedly they in South Africa versus us in Zim. But looking at mine's that we compare to in terms of operating under conventional mining methods and also those mines operating underground mines and at depth, we're not out of line and actually compare quite favourably against similar mines. You can see those metrics in terms of depth and the tonnes milled per annum and also the human element, I guess the number of people that operate those mines. And our mines, as James indicated, really it's around where we're operating now. Blanket is a very different mine from five years ago, where 60% of its ore was really extracted from a depth of approximately 750 or 760 metres. And now we've got a big component of our ore coming up from a depth of over a kilometre. And so in terms of tonnes and tonne metres hoisted and all the metrics that we're looking at, this all comes at a cost. So those key components of both productivity but also our electricity costs and our tons of meters and additional loads that we're having to put on that electricity or the power requirement when operating at depth has a significant impact on our cost base when producing an ounce profile of around that 80,000 ounces per annum. And there are a number of initiatives that we've got on the go, as James has indicated, and we'll be hopeful that we'll be able to bring those to account and have a a meaningful impact on our cost base going forward, but it's unlikely that we will return to historical levels in terms of the cost profile when operating in a very much closer to the surface and lower volumes being used. So on that basis, you would have seen in the announcement this morning that we have updated our cost guidance for 2025. So if you move to the next slide, please. Whilst the gold production and the previously guided gold ranges in terms of ounces and capital expenditure were maintained, we have looked at our cost base and looked at the volume movements and what it's meant for how we exit the year in preparing our outlook for next year. And we've increased our guidance ranges, both online costs by increasing it to just over 10%, to a range of $1,150 to $1,250 per ounce. And equally on our all-in sustaining costs, we've increased it at 9.5% to a range of $1,850 to $1,950. And we believe that that is... very reasonable and considered outlook in terms of as we exit this year and conclude on the final quarter. So we're really excited. It is mining, and there have been some challenges, and I think the team has dealt with that very well. But as we sit today and as we look for outlook for 2025, we're really excited in terms of being able to deliver a really solid 2025. So with that, I'll end it back to Mark, and I think it's going to Craig to talk a bit about exploration.

Yeah, thank you, Ross. So Craig, could you just talk us through the exploration at Matata and the blanket, please?

Thanks, Mark. I can do that for you. So I'll just, if you can go on to the next slide. So just very quickly, what we're doing at Matata, The budget for the year is just over 27,000 metres of drilling. At the end of Q3, we had done just under 20,000 metres. It's about 71-72% complete. We're expecting to complete the drilling campaign during Q4. I did mention, I think, in the last quarterly that there were some issues with the laboratories in Zimbabwe. That seems to have been sorted. We have caught up quite a number of assays. So I am expecting to have a maiden resource declaration for Matapa, specifically Matapa North, during H1 of 2026. If you could go on to the next slide then. So this is just, when I talk Matapa North, so I mean obviously it's those nice pretty coloured zones that you see on that map there, but that blue line, that represents the Bulbos, which is our current big project that everybody knows about, and the Matapa area. From Matapa to the Bulbos Boundary is literally 200 meters and it's another 250 meters to the Isabela South Pits. So quite clearly what we're doing at Matapa and Matapa North should in all aspects have an impact on the Bulbos project going further. So currently with all the drilling that we've done, we drilled and redefined some mineralized zones over a strike length of approximately 2500 meters. It remains open to the northeast. I still have some gaps between the historic old pits that we've got to do. Matapa North, its main thrust is sulfide mineral resources, below the current pits, down to a depth of about 200 metres. So all of this, once the drilling campaign is complete during this year, we'll take a month or two to get the assays in, and we'll have a maiden resource declaration from the Tarpon North early next year. If we go on to the next slide, some of the other drilling that we're doing, so this is about 500 metres south of the Tarpon North, It's the area that we call Mpudzi. We're finishing up our drilling campaign here, so we've drilled about a thousand meters on strike. It remains open probably for at least another thousand meters to the northeast. It's an area that hasn't been open pitted in the past, so this program is slightly different where we are focusing on the potential for oxides, clearly drilling some deeper holes to get an understanding of what the sulphide mineralization looks like, but this program will carry on in 2026 and we'll report drilling results as and when they all come in. If we could go on to the next slide and I'll take us through blanket quickly. So blanket, we've got the underground as we all know, we've also got the surface. So with the underground exploration drilling, it's all of the long hole drilling that we're doing, typically holes 250 meters to 450 meters deep. If we can go on to the next slide, I can then show you where the areas are that we're drilling. So to the south, or to the right of the slide that you see, so we've got ARS, which is AR South, we've got the Blanket Quartz Reef, which is BTR, and then all of the blanket ore bodies, and we've got seven of them. So you can see there 34 levels, you can see the little blue traces that are running there, so we're currently drilling below 34 level and a lot of our intersections are now on kind of the 36 level mark on the blanket or the blanket or all body side. Hot yearly drilling results, so probably at the end of this year we will publish a set of drilling results for Blanket. On the northern side, on the left hand side, you can see some longhole traces there. So that is Lima where we are now filling in the drilling below 22 and 34 level. We've drilled the one next to it, Royca, extensively and we've got 30 and 34 level that can quite easily develop north towards Lima and pick up that ore body and carry on mining like that as well. If you could go on to the next slide. So in the past quarter, in the previous quarter, Blanket started a surface exploration program. So for all the geologists out there, if they are in your island of call, a very simplified geological map showing kind of the host rocks that we're looking at. All the blue vertical lines are the trenches that we have done. So that was the start of the exploration activities. So the strike length of 600 meters, the trenches are approximately 200 meters long. And out of this we have identified an area, it's approximately It's approximately 50,000 square meters surface expression area that has got anomalous gold values. If you look carefully, you can see some colored bars that are next to the trench lines. I can't put values on there as yet. We haven't released anything to the market, but it gives an indication of mineralization in those trenches. So during Q3, we have instituted a reverse circulation drilling program spaced 25 by 25 meters apart, drilling to a depth of about 45 meters. And the intention of this is quite clearly if we have sources of ore that are probably amenable to heat bleaching, Blanket Mine will have access to hopefully an additional source of low-cost surface ounces that also do not require to take up capacity in our current plant environment and capacity there that we have. And so my last closing remark on the blanket exploration on surface is if you look at an aerial map of, for instance, bulldoze, it's covered with historical open pits. If you look at an aerial map of blanket, there are no open pits. And it's just really a function of the age of the mine. When Blanket first started, it went underground very, very quickly. But quite clearly, along our lease area, This should be the first of a couple that we would see like this. This program is expected to finish up late December, so kind of early Q1 of 2026. We should have a full exploration report on this as well. With that, I'd like to hand back to Mark. All done.

Thank you, Craig. At the outset, I had indicated that Victor would talk about billboards, but the fact of the matter is that, as I also said, we're about to provide a very detailed update on billboards imminently. for digging that slightly wrong. So in terms of outlook, we remain on track to achieve the increased production guidance for 2025. So we're about, notwithstanding a few headwinds in Q3, we're about 3,000 ounces ahead of where we expected to be at the beginning of the year, which is good. a good sense of the very encouraging drilling taking place at Blanket, both at depth and at the surface. Matapa, we're looking to convert the drilling into a maiden resource in the first half of next year, which should validate the acquisition of that asset some time ago. As I said, Bilbo's feasibility study news on that is imminent. And we continue to look try and get those costs down somewhat, but acknowledging that blanking is now a fundamentally different line to what it was five years ago, and we're not going to go back to the days of enjoying the days of gold, of producing gold at $850 an ounce. So with that, we can open it up to questions.

Thank you. If you would like to ask a question, please click on the raise hand function. We'll just pause for a few moments to allow you to raise your hands. And our first question comes from Nick Denham. I'm going to allow you to talk if you can unmute and go ahead.

Hello, Nick. Hi, guys. Awesome. Thank you very much. I have several questions, tidy up some details here. On the mining side, there's a lot more broken ore registering than actually hoisted. Could we have an explanation for that? And also from you, James, I think, what are immediately available oil reserves at the moment? I think you've got a sort of South African standard when you talk about that.

James, do you want to do that? Those questions?

Yeah, thanks, Nick. Yeah, so obviously in this particular quarter, we broke more, but we had, I mean if you look at the year for instance, we are within the normal standard of plus or minus 2%, the difference between what we broke and what we wasted. uh but but in this particular quarter we had um we we broke slightly more and this is simply because of our wasting constraints the stoppages that we had with the with the loss of life in some of the areas um and we're late but you'll see that that will correct out uh this quarter um then uh in terms of uh the immediately available sort of uh first line we are still very i mean we're still quite low we're looking at um maybe at the moment you know two to three months we need to move that up with a little bit more development that that we that we need to to do uh with the flexibility we are happy that we are already over five percent above for the year and we are seeing we are actually mining we actually are putting back into our reserves so we should see a big correction within the next year and i think within the next um you know three to four years we should be in a position to to be maybe, you know, three to six months or better so that we can have better flexibility. Thank you.

Thanks. And here's a question which I always run off you, Russ. What are you expecting from dividends from Blanket this year? And will that bring that horizon up? for the end of the facilitation loans any closer than quarter one, which you spoke about last time? Obviously things have materially improved.

Yes, absolutely. So those loans basically will be paid off by the end of the year or January at the latest. So certainly earlier than originally talked about in terms of end of Q1 next year. And then, yes, in terms of planning for the remainder of the year, we're originally targeting – well, if I deal in cash, we were targeting a $50 million sort of cash balance to have been distributed and be sitting in Jersey by the end of the year. I think that's more likely to be between $40 and $42 million, that type of level, in terms of distributions that – comes through the chain. So we've had $45 million that have been distributed up from Blanket, both during the quarter and post in terms of dividends, and we continue to look to build our offshore bank account up closer to that $40 million mark.

Sorry, Ross, if you can just explain again, what is the quantum of dividends that Blanket will distribute over this year, given where things are at the moment? What will the total look like? Is that the number you mentioned?

Yes, so those are the numbers that we've already done, sort of 45 million, and depending on performance and the like, we're probably going to get between sort of 15 to 20 million additional distributions that happen within this remainder of the year. That's obviously impacted by timings in terms of when those dividends actually get declared and the distributions get distributed up the chain. So we've done 45. It'll probably be 60 to 70 million in terms of actual distributions that come up from Blanket.

Thank you. Thanks. That's all I have.

Thank you.

Thank you, Nick.

Thank you. Our next question comes from Joseph Parrish. if you can unmute and go ahead.

Hi, my question is mainly for Mark. So you've talked in the past about how your goal is to avoid further common shareholder dilution as you fund the growth of the business. And with the favorable gold prices in 2025, in a blanket, you're really starting to harvest some of the fruit of a blanket in the previous investments there. And so my question is, How much do you intend to retain cash to fund the future development projects and potentially other acquisitions in Zimbabwe, as opposed to increase the dividend? And effectively, if a common share is needed to be issued, again, raise your cost of capital in doing so, as I think in hindsight has been the case following the dividend increases with Blinkit.

Okay. I'm not sure I heard all of that correctly. The upshot is that there were several questions embedded in that. We're not looking at any further acquisitions in Zimbabwe. I think our plate is full, was the first thing to say. Secondly, we do have a very substantial capital investment program in the Billboards project, and that will become clearer imminently. dividend having said that our planning going forwards is to maintain the dividend now clearly we're not going to promise to maintain the dividend but um we don't see the dividend increasing and we we will do our level best to avoid reducing the dividend i think that's all i think those are the answers to the questions you raised is there anything i've not answered it's quite a complex question is there anything i've not answered

I think that gets to the meat of it, maybe just as a follow-up. If you were to have a general idea of when dividend increases would occur again, would it be after the current projects with Bilbo's and Etapa are substantially completed?

Well, it would be after Bilbo's is completed. Let's be very clear. We're doing Bilbo's not for fun. thereby increase our ability to pay dividends. That's entirely what we're about. I mean, we've been paying dividends now for, what, 12 years or so, and if you look at the If you look at the returns that we've generated for shareholders over the course of the last 10 years or so, I think it's a thousand percent return compared to gold going up threefold and the GDXJ going up fourfold. So we've substantially outperformed both gold and the GDXJ. But a major contribution to that has actually been the effect of those continuous dividend payments over the last 10 to 12 years. So paying a dividend is deeply embedded in our DNA. And I would hope that our past actions in terms of maintaining and then increasing the dividend should give shareholders a high degree of comfort that we're going into Bilbo's and other projects with a view to increasing the dividend. It's very important.

Wonderful, Max. Thanks for your answer.

Thank you. Our next question comes from Tate Sullivan. Please unmute and go ahead.

Hi, thank you. Big picture on Motapa. Sorry for the noise. Is any of the work that you have done on Motapa going to factor into the feasibility study for Bilbo's?

No, it's far too early. It will take a main resource at Motapa. I think that work at Matapa will take, Craig, what, three years, four years?

Yeah, I'd say a timeline of three or three to five.

Yeah, so if we were hoping to fold Matapa into Bilbo's at the get-go, that would introduce a delay of many years into the project, which I'm not sure my nerves would stand. So, look, if you think about the Bilbo's project, the first six years will be mining in the Isabella-McKay's area, and then the latter four years would be mining Booby, which is more remote. In the intervening period, that gives us plenty of time to at Matarpa, and then in due course to fold Matarpa into Bilbo's as the Isabella McCain material runs out. But at this stage, there'd be no benefit.

And then for Blanket, you mentioned in the press release a plan of scheduled engineering work on winders and shafts. I mean, and then storing and accumulating the ore for uninterrupted milling. Is this all planning for 2026 engineering work?

So I find your line is very poor. Could you kind of repeat the question because I couldn't pick up all of it?

You mentioned some scheduled engineering work on winders and shafts. Is that all planning for 2026?

James, correct me if I'm wrong, but I think it's that sort of relatively quiet period over the December, January 26, 27. James, is that correct?

Yes, it is correct, Mark. So it's 26, 27, we're going to have the ACDC convention, yeah.

Let's be clear, the whole point is to... The whole point is to have a stockpile so that we can see our way through that hiatus without interrupting production.

Thank you.

Thank you. There are no other raised hands. We'll just do one more. From Nick Dinnam. Allow me to talk. Please unmute and go ahead.

Yeah, sorry, I missed a question for Craig here. When, Craig, do you think you'll be in a position to do a reserve upgrade over at Blanket? And when would that result in a technical report summary?

Thanks. Thanks. Thanks, Nick. So we are currently busy with one. So during Q1, late Q1, we'll have a new technical report out. We'll have a revised capital. We'll have revised resources and obviously with the last one we'll have a revised reserve estimate as well. Thank you.

Thank you. We've got another question from Yuen Lo. Please unmute and go ahead.

Hello Yuen. Hi, everyone. Congratulations on the strong financial results. I've got a couple of questions, perhaps first for James. So in relation to the development that's been done, could you talk specifically to EROICA and BQR?

James?

Hi, Yuan. So Yuan, we... We obviously, now at the moment, I mean, in terms of the development, nothing has really changed in terms of EROICA and BQR. I mean, we are developing reserves in that area. We still have got crews also that are busy mining in that area. I wouldn't say off the top of my head could be around... Craig, maybe 15% of our production is coming from there. These are still high-grade areas. We're still seeing good values in Eroica and the PQR area. But we also had, you know, the loss of lack was also in PQR, for instance. But we are confident that with the development that we're doing at the moment, we should be able to open good reserves in the next two, three years, like we're saying. And we are accelerating development there, yeah.

Okay, on a related note, but this time directed to Craig. So the discoveries at Sheet, or in the vicinity of Sheet, are very interesting. I know you're focusing on the oxides for heat beach right now, but have you done any deeper holes? Does there appear to be an extension at depth to Sheet? Is it disseminated sulfides, or is it quads?

Yeah, thanks, thanks. So that surface exploration that I showed there sits, as I say, it's 250 meters east to the east of Sheet. When we extrapolated underground, because obviously we've got the whole plan of our underground workings, it appears as though this area hasn't been mined. So there's a potential for a previously unknown or unlined ore body to be sitting in the footfall of Sheep 250 metres to the east. So we're going to tackle the surface and in the meantime we have We are in the process of procuring slightly stronger, better electro-hydraulic rigs that we can draw from nine level from sheet drives that we have there to actually have a look if this does carry on down.

Okay, that's great. Thank you very much.

Sorry, Ewan, does that finish it? Are you done? Yes, thank you very much. I can see we've got a typed question, which I think falls, I mean, Ross, can you pick it up at the bottom? It seems to really fall into your bailing weight. Can you see them?

Sorry, Mark, I haven't seen them now.

The first question is, what's effectively the downside gold price scenario, below which we couldn't sustain the dividend? So I think that's the first question. Are you able to answer that?

Yes, on that one, it would be sort of 1850 would be the low price or downside scenario in the short term that we've modelled on that side.

Okay, the second one refers to lease liabilities. I don't quite understand what the question is about lease liabilities. Cash use for payments of lease liabilities has been increasing year on year. What's the long-term capital allocation strategy for managing these increased leasing debt? I don't quite know what these liabilities were referring to.

Yeah, I'm not sure either in terms of the leases.

We're conspicuously ungeared. I mean, we do have some loan notes which initially were issued by the solar company. And then when we sold the solar company, we, Caledonia, deliberately took those loan notes over because we're interested in helping to further develop the emergence of a debt capital market in Zimbabwe and we're keen as a company to continue to build those relationships with high-quality Zimbabwean institutions, so we have those liabilities. Then the other liabilities are really of the nature of very short-term over-the-off facilities and as you can see we've pretty much repaid, we've allowed half of those to go during this quarter. So I'm not quite sure what the lease liabilities are.

Or it's probably related to some of the property leases and the new buildings and some of the signing of those leases. But again, not material in the total scheme.

Okay. Two further questions. First of all, what's the percentage tonnage being hoisted by number four? the percentage, I think for the whole of this year, the target is for about 62% to come up central shaft and the balance to come up number four shaft. And so I think the point that Ross was making is if you look at that in terms of ton metres, um in 2020 we hoisted 630 000 tons um from a depth of 760 meters so that's about 450 um ton million ton meters if you take if you if we're going to hoist 62 this year we're going to hoist about 830 000 tons if 62 of that's coming from that effectively increases the ton metres to about nearly 900 million. So we're using pretty much twice as much power to hoist, which is, I think, the point that Ross was trying to make. Then the second question is, was the pressure on production cost broad-based or unique to... No, the pressure on... Pressure and production costs have been across the board. So we're continuing to see increased labor costs, and that's a combination of overtime and, I've got to say, bonus payments based on production exceeding targets. In terms of trying to manage overtime, one of the things we're doing is we've introduced a clocking time attendance system. system which is allowing us now to get a better handle on as to how and why overtime is being incurred. One of the things we want to do going forwards is to try to improve the rostering and improve the way we use labour so that the workers get to and from their places of work much more quickly and therefore they're less tired and they also do less overtime. So I think that's the initiative on labour. On consumables I mean, about a third is what we call variable consumables, which is cyanide, drill steels, explosives, that sort of stuff. Over the course of the last five years, we've actually become more efficient across the board in terms of our usage of cyanide, explosives, drill steels, kilos per tonne milled. But in every case, we're finding that the unit cost is going up, particularly in the case of, say, rods, where the average increase per annum over the last five years has been about 12%, I think. So we are seeing costs generally going up. And then the third one would be, yes, that's labour, that's electricity, and that's consumables. Within consumables, the conspicuous factors be the cost of running the TMMs, both in terms of overtime and consumables. And that reflects the fact that some of these TMMs, that's the underground trackless equipment, is getting old. And we need to seriously now consider whether it's economic keeping and repairing old unreliable stuff or buying new stuff which is more reliable and less prone to breaking down. So I hope that then on top of the final point to that question, within the quarter we did incur some additional costs relating to repairing a ball mill, one of the big ball mills found. And whilst we could work around which it meant that we did incur some extra costs to fix that ball mill. But primarily the increase in costs, I guess, is structural, not specific. I hope that answers the question. Any further questions?

No further raise of hands. So over to you if any closing remarks.

Okay, look, thank you very much for joining us. I characterized the quarter as being a solid quarter. It creates a good foundation. And as we say, the real news flow is going to be the...