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spk01: Good morning, ladies and gentlemen. Welcome to the Golden Star Resources second quarter 2021 results conference call. At this time, all lines are in a listen-only mode. Following the presentation, we will conduct a question and answer session. If at any time during this call you require immediate assistance, please press star zero for the operator. Today's call is being recorded on Thursday, July the 29th, 2021. And I would now like to turn the conference over to Mr. Michael Stoner, Director, Investor Relations and Business Development. Please go ahead.
spk08: Thank you, everyone, for joining our Q2 results call. Before I hand over to the team, please could you note the disclaimer on slide two? The presentation is already available on our website, so you can either follow on the webcast or with the PDF on the website. I'm joined today by Andrew Ray, our CEO, Graham Crewe, our COO, Paul Thompson, our CFO, and then Mitch Wassil, who heads our exploration efforts. And with that, if I could hand over to Andrew to commence the call, please.
spk09: Thank you very much, Michael. And good morning, good afternoon to everybody. If we move on to slide four and A quick reminder there of who we are, where we are, and also the updated plan that we put out earlier this year in terms of both the reserve plan plus the life of mine extension in the PEA, which takes us up to around 17-year mine life. And we'll talk through progress on that plan, the work that's ongoing, and where we believe we are in that respect. If we move on to the next slide, slide five, specifically on Q2 and performance in Q2. As you can see there, some of the numbers, as we highlighted a few weeks ago, below target, there have been one or two challenges come up during the quarter, which Graham will give a little bit more detail on, which we're making pretty good progress to resolving, which is good. At the same time, we've continued to strengthen the balance sheet, which Paul will go into a bit of detail on, and we're in a good position to continue investing in the business to deliver that plan that I referred to on the previous slide. On the next slide, specifically looking at the ongoing COVID situation, I think it was probably These set of results a year ago where we were showing the first quarter under COVID and I don't think anybody at the time thought we'd be here a year later in many ways in the same position, certainly as regards to COVID. There's been in Ghana another tick up in cases as we've seen in many other countries. So we're back to probably the sort of rates we were at in end of February going into early March. We've maintained all of our protocols, controls at site. Unfortunately, we've managed to really minimize any impact. Certainly, we've had no serious illness and no fatalities, which I think is the most important thing. And the business has had minimal impact, albeit we have seen in terms of logistics that getting people in and out of site, in and out of country is clearly difficult. a lot more complicated than it was, which has meant some skills are harder to get. And we've seen that in certain of the operational areas, which particularly has affected some of the development and meant that we've had to plan around that. So we're working with that. But fortunately, from a health perspective, minimal impact. On to the next slide, as I mentioned, we've had a number of challenges you can see reflected there. in the guidance. So our focus as we go through this year is resolving those challenges this year, continuing to invest for the longer term future of the business and really exiting this year into 2022 with the business back on track and where it expects to be.
spk11: And with that, I'll hand over to Graham. Thanks, Andrew.
spk03: I think we'll move straight across to slide number nine, just to give everyone a little bit of an update into the PACE backfill system. As Andrew mentioned in the guidance update, we spoke about this. So we had some delays to the commissioning, dating back to Q1, in fact. And then when we poured the first test soap, we had some of the quality assurance results come back. less than what we would have expected from the test work. So we've moved on to we're doing more test work now. The recent test results coming from the site, QAQC, are giving us some confidence to move to further another test boat in Q3, which will be happening in the next few weeks and from there we are planning that we should be able to recommence filling in Q4. At this stage we'll be going with a higher cement blend than we had originally planned just for that additional factor of safety and we'll continue the test work to optimise the mix design as that work moves through. So over the quarter some positive results from the testing and a clear path to restarting that plant. It is contingent on the second test stoat performing as expected, but that's the current plan to get back on track when it comes to the paste fill and mining secondary stoats from 2022. Moving across to the next slide, Andrew touched on some of the challenges here. The mining rate was down a little bit for the quarter. That's really in the quarter, really related to the development. We've put development into the slide this time just to talk about that a little bit more. And you can see the step up in development from 2019 through to 21. Q3 2020 is when we added some additional equipment And we were expecting to see that step up with COVID and some challenges around certainly expatriate operators, et cetera. That ramp up has been slower than we had planned for. And then going into H2, that's really the impetus for the re-guidance and not being able to mine the secondary stoves that we had in the plan. Although development is stepping up, it's a little bit behind. Pleasingly, over Q2, the development in June was much closer to the rate that we're looking for going forward. So we're seeing good progress with the development improvements at site. Production in line with the slightly lower volumes and grade on expectations. Moving across to the next slide, just looking at the costs, a little bit of a step up in costs, partly related to the relatively fixed cost base at WASA, although there's a little bit of cost increase coming through, certainly from Q2, Q3 last year, where we had some benefit of some power cost rebates, a little bit of cost inflation coming through And areas such as ground support. So as we're seeing the step up in development, a little bit more ground support coming through and some increased costs for transport, et cetera, and logistics. So just seeing a little bit of cost increase coming through. Processing costs, we're still producing from the low-grade stockpiles and we're seeing the benefit of that extra tonnage volume through the plant with the processing costs. On the OPEX and oil and sustaining costs, yes, up the trend in line with the production volumes. Importantly, we're continuing with the sustaining capital and the investment at WASA, which as we bring up the volumes, as we improve those productivities, we expect to see that start to improve. And with that, I'll hand over to Paul to talk about the financial results.
spk12: Thanks, Graham. Good morning, good afternoon, everyone. A contextualised Q2 is being a good quokka from a financial perspective, despite having slightly lower gold ounces sold at just under 38,000 ounces and those issues which Graham has just articulated. Just by way of note, the purposes of the comparison to Q2 2020 I just point out that this quarter had a really strong operational and financial performance. Part of the reason that we had a really good quarter from a financial perspective is due to the macro environment and strong gold price. So during Q2, the business realized an average spot price of just over $1,800 an ounce. So that was 1807 or 1709 post the impact of the royal gold stream. So the business continues to produce strong and robust EBITDA. That was $7.6 million for the quarter and an adjusted EBITDA of $26 million. So in terms of those adjustments from EBITDA to adjusted EBITDA, we had $18.4 million. So these comprise the following non-cash adjustments. So we had $700,000 for the fair value adjustments on the financial instruments. That was loss in hedges of $900,000, which was offset by the gain in the convertible debenture embedded derivatives of $200,000. These are obviously a function of the gold market and the share price movements during the quarter. The large item relates to $17.17 million of other expenses, which relates primarily to the expected credit loss adjustment for the FGR receivable, which we've documented in our press releases recently and also annotated the notes within the earnings released earlier. In terms of earnings per share, this is impacted primarily by the expected credit loss that I've just explained in respect of the 17.4 million adjustment. If you could go to slide 14, please, the balance sheet. So as Andrew was alluding to earlier, The balance sheet continues to be repositioned to provide a stronger, more robust base for the business. So recently we have restructured and upsized the Macquarie facility into an RCF, and that's actually provided additional liquidity to give the business a more appropriate debt structure as the business continues to grow and evolve. So with that, it's important to highlight that we have conservative debt-related ratios here. So just to put that into context in terms of what the restructuring apologies has actually done, if we cast our mind back to Q1 2020 with a net debt position of 65 million, and we now actually sit with a net debt position of 31 million. So this has been done against the backdrop of significant investment within the business. And in 2020 and 2021, it's something of the order of 100 million that's being invested. So that significant investment will actually benefit the business in the medium to long term, which is key in terms of this phase we're going through now. The key thing for us now in Q3 is the convertible debenture. So that's due to be deemed on August 15th. 2021, so in two, three weeks' time. So given the current share price, we're working on the assumption that this will be settled in cash, which is $51.5 million. So as you can see, we've got adequate cash to actually do that and to proceed with a normal level of cash within the business going forward. So as part of that refinancing with Macquarie, we actually put in place some attractive zero-cost callers in terms of the hedging program over the period from H221 to H1 2020 floor. So you can see that we've got a flat floor price of 1,600 an ounce with a ceiling of over 2,100. So this is a good range of pricing which actually helps preserve significant upside on the gold price whilst giving cost protection at a sensible level with respect to WAFSA's ongoing development. Turn to slide 15, please. Cash management is a key consideration for the business. So the business ended the quarter with a healthy cash balance of $72.7 million. The key points to note on this cash flow bridge for Q2 are as follows. So you can see from the first block, WASA's strong operational performance, and that actually generated over $11 million. So We're continuing with the capital investment program to underpin the future development of WASA. You can see there that we spent over $10 million on CAPEX. So we're continuing to invest in exploration as well. So there was 3.3 million spent during Q2. And with respect to the financing activities, the ATM proceeds were 5.2 million during the quarter, which were actually generated in April and May. And it's not actually been used since that. So just in summary, the cash position is approved again in Q2 2021, which facilitates continued investment into the business. So going forward, our focus will be on exploration and development. With that, if I could pass you over to Mitch, who's going to cover off exploration and geology. So I think Mitch will start on slide 17.
spk04: Thanks, Paul. Just on slide 17, as Paul mentioned there, just a general overview of the areas of focus for our exploration programs. We spent $3.3 million in this quarter. The exploration focused on mostly at Wausau, drilling the up and down dip mineralization from the known reserves. We were busy with five drill rigs overall, three at Wausau. We had one at Sabrissa East, which moved in toward the end of the quarter, and we have an air core rig that's been working on several areas. regional targets up and down the trend. As I mentioned, the focus is now going to be on the in-mine area and near-mine, which has been completed, and a little bit on the regional stuff on there. So let's move over to slide 18, take a look at an isometric view of the WASA deposit as it stands. Just what we're looking at here is a view looking towards the east, and the results we're looking at, everything in bold, is the Q2 results that we've had from the up-and-down dip drilling. And the smaller font there is the results we've received to date. What you're looking at here is in the red lines, so the red dotted circles are the areas where we're focusing our drilling on the infill. On the up dip, we're going to close in some spacing to follow up on some of the hits that we had in 2020, late in 2020. The 20 metres at 6.9 grams per tonne, we're going to be stepping 50 metres north and south of that, trying to prove that up into a resource hopefully by the end of the year. The material that's down-dipped is going to be tightened up to about 100-meter spacing just to follow up some of the down-dipped material that we hit below the main B-shoot trend. So a total for the quarter, we drilled roughly five holes in this area, totaling approximately 5,000 meters. So let's move on to slide 19, and I'll look a little bit more in detail on some of the sections and some of the hits that we've had. So on slide 19, what you'll see is the two intersections in hole 6 and hole 8, which actually intersected the 242 zone. which is of interest for us because this is part of the upper mining zone that we're looking at generating at Wausau. We recollect that we've gotten rid of the big open pit, and we're looking at mining the material from the open pit from the underground in two areas, and one of them being the 242 area. So this would be hopefully a different access that we'd have into there, and even wanting us to get into an underground scenario where we have got – a separate decline and everything going in after it. So that's going to be a focus of us for growing up in that area. The other interesting point on this section is intersected mineralization in hole 6 at depth approximately 160 meters below the B chute. Now what this really demonstrates is that mineralization does continue at depth below the B chute, and it opens up a whole new exploration for additional targets to be tested below the main B chute, below the current reserves. Moving on to slide 14, 20 is another section looking at the intersections of a hanging wall zone that was intercepted on in hole 7M and D1, a significant zone of about 17.3 meter approximately true width at about 4.8 grams per ton. This mineralization is open both long strike to the north and south, so that's part of the 100 meter infill drilling program that we're actually going to be looking at kicking off just now with three rigs at Lawson currently. Okay, let's move on to slide 21 on a more near-mine exploration program and what we've been doing with one of the rigs at Wausau. We've been testing several zones in and around outside the main zone itself, which is very big on the slide there, testing the Mideast and Deadman's Hill zones, which we know is another big soil closure. We've got an east-dipping limb in Deadman's Hill and a west-dipping limb in Mideast. The results that you're seeing off from the table to the right-hand side are within the limbs. And if you're familiar with the geology at Wausau, we find the concentrations in higher gold values usually associated with foreclosures. We know there's a large regional foreclosure here, much the same as we see at the main deposit between the B chute and the 242 zone. So we need to do some more work on the drilling that we've done so far to determine where this foreclosure is coming, whether to the north or south. Additionally, we've been drilling at the South Action Pin Pits, which is the sack pits off to the west, on the left-hand side of the picture there. And we've been going along a major structure there, intersecting broader zones of mineralization and through there. So we've intercepted the structure and some of the zones are a little bit more gray, but we've still intercepted the structure. The five targets that are within the fall issues have currently been deferred till 2022. We are pursuing the permits and stuff for reentry into the fall issues, which is currently with the ministry. We move on to slide 22, which sort of covers the regional area towards the south, which is Huni Bitu and Denso concessions. We've been busy down there. We currently have a drill rig drilling below Sabriso East Pit, which was mined back in 2014. And that's where we are hitting targets towards the south on a projected plunge to the south there. We've been busy with the air core drilling. at Quahoo Hill, at Abbata, and also down at Nassau 2 and St. Croix. So those programs are initially wrapping up. We're mobilizing the ground geophysical crew to be coming in to do some follow-up geophysics and the combination of the geophysics and the aircraft building for some follow-up for next year. We've had some significant hits at Guadium, which is part of the Abbata concession, which was approximately... 20 meters at, I think it was around five grams per ton. These results are all summarized in the press release, and you can take a look at the regional air core results where we've had several hits of very wide spacing of the air flow going in, which is quite interesting. Okay, on that note, I'm going to hand it back to Andrew, who can wrap it up with us on this. So back to you, Andrew.
spk09: Excellent. Thanks very much, Mitch. So just to conclude on slide 23, As I said, over the quarter, we've had some challenges. I think at the same time, as you've just heard, we've continued to make some significant progress in the business. As Graham said, we're well on our way to resolving those operational issues that we've encountered and getting the operations back to where we expect them to be. I think that will strengthen the business longer term. We've continued to invest. And as Mitch was saying there, we've seen some really encouraging progress in the exploration activities over the front half of the year. At the same time, the focus has also been on the balance sheet. As Paul said, it's pretty impressive. We've halved our net debt since the start of last year, put a lot of money into the business at the same time, and we're well placed to deal with the convertible bond, which is one of the last pieces in getting ourselves properly stabilized and prepared for the longer term on a financial footing. And that'll allow us to continue the investment plan we outlined through the reserve and PEA plans and really set the business up for the longer term. So with that, I'll hand it back to Michelle, and we're happy to take any questions.
spk01: Thank you. Ladies and gentlemen, we will now begin the question and answer session. Should you have a question, please press the star followed by the one on your touchtone phone. You will hear a three-tone prompt acknowledging your request. Questions will be taken in the order they are received. Should you wish to withdraw your question, please press the star followed by the two. And if you are using a speakerphone, please lift the handset before pressing any keys. Your first question comes from Bryce Adams of CIBC. Please go ahead.
spk02: Good afternoon. I have a couple questions on the PACE test work and development rate. Firstly, on the PACE test work, what are the tests that are being completed in Australia that can't be done in-country? Is that compressive strength test in crush testing of cubes, or is there something much more involved with that?
spk09: Give us both the questions, Bryce, and then I guess they're probably both for Graeme, but then we can deal with them both together.
spk02: Yeah, that's a pretty good guess. These will probably go all to Graeme. So a follow-up on that one, I guess just a clarifying one was maybe a reminder about underground shotcrete at Wasser. There's no shotcrete underground from my memory. And then I'll move on to the development rates. I was just wondering if you could remind us on the number of jumbos underground, how many jumbo crews are working and the average development rates that they achieve per month. And then just building on that one, with the development of the 495 level, I think you said the level access is developed. I was just wondering where the faces were now. Is that in the footwell drive or have you started on any ore drives? what would be the total development meters for the entire 495 level? And is that indicative of other levels, or does the footprint increase slightly with the next level? I think that's what I've got now, but maybe there'll be something more that comes out of the answers.
spk09: Thanks, Bryce.
spk02: Yeah, Graham, I think it's over to you.
spk03: That's quite a list of questions. Bryce, how are you? So on the PACE test work, there's no... testing that can be done in Australia that can't be done at UMAT and Ghana and that's why we're working with both minefield services and UMAT where minefield services are valuable is they are paste experts and you know have worked with a lot of paste plants around the world so really that's about optimizing the mix design so we We'd always planned that there would be an opportunity to optimize the mix design down the track, alternative binders, et cetera. What we saw in the initial test work was a higher degradation of strength over time, and certainly at the, not lower, in the planned cement ranges, less so at the higher cement ranges. which is why we're going for a higher cement now. So really their role is about optimising the mix design and ensuring that our testing is consistent across the board. So that's the first question. Second question is on underground shotcrete. So we now have, as part of the case plan commissioning, we now have a batch plant on site. creating equipment for walls, barricades, et cetera. So that's now part of the WASA arsenal, if you like. No plans to use that for ground support at this point in time. Jumbos, so we have four frontline jumbos, and we're looking at 800-odd metres a month. Out of those four, frontline jumbos. And, you know, getting all of those manned up consistently with COVID, long rosters, et cetera, has been a challenge. And I think other people have suffered from that challenge. On the 495 development, 495 will be a relatively typical level. As we come down the plunge, what we see at Wasser is relatively consistent. At the moment, we're focusing on footwall drives. But from there, the ore development tends to be, certainly in the cross-coat areas, tends to be more just in time. So the primary focus in 295 is to get the footwall development in so that we can then develop scope accesses as we go.
spk02: Yeah, I think that's it. I guess coming out of that, it's interesting that you've got the Shock Creek fleet on site specifically for vent walls and barricades. Sounds like if you get the paste plant and the paste fill working properly and resolve strength issues, there may be an opportunity to do in-cycle ground support at a future date.
spk03: Certainly that's potential. It's not one that we've done a lot of work on. The capacity is built for doing barricades and walls, but it is potential down the track, especially as we get deeper. At the moment, WASA ground conditions are still good, as you've seen, and Split sets and mesh in most areas are pretty much what's required.
spk02: Yeah, copy that. Good luck with the second test. We'll be watching for updates. Thanks a lot.
spk11: Thanks, Bryce.
spk01: Your next question comes from Raj Ray of BMO Capital Markets. Please go ahead.
spk10: Thank you, operator. Good afternoon, Andrew and team. I have three questions, if I may. The first question is on the amount of open-pit stockpile feed you expect for the second half of the year. Q2 was significantly higher than what you had guided at the beginning of the year. Second question was a follow-up on the pace fill. With increased cement content, if you can give us some rough idea about how much cost increase you expect as a result of that. And my third question was on the balance sheet liquidity. Now, as you have mentioned, there doesn't seem to be any concern, and certainly I don't see any concern. But one of the questions I had was, with respect to the $30 million revolving credit facility, you do have a cash covenant where you need to maintain a minimum cash balance of $35 million to be able to draw down on that. So is that...
spk09: something that could cause a bit of a challenge so yeah that's those are the three questions for now thank you raj i think uh graham probably the first two for you then we'll pass to paul in terms of the macquarie facility yeah hi raj um on the open pit stockpiles we've we've got stockpiles that
spk03: that will last through to the end of the year, maybe a little bit into next year. We're sort of onto the 0.6 gram material now and in the harder to get to kind of areas. So we just took the, while the underground volumes were down a little bit and we were looking at the second half of the year, we took the opportunity to get some of that material through and bring that cash forward essentially. So We'll continue to do that over H2. Given our sloping's going to be a little bit restricted until we can get the paste fill going and the development far enough ahead, I think that'll form part of the strategy in H2 as well. In terms of the cement increase, it's a good question. So we guided at the start of the year the paste, adds about $5 to $7 per tonne mined through adding that post fill. Roughly half the cost is cement or binder cost and going with a higher cement percentage. So we say that $3 becomes, you know, we go from 6% average to 10% at least initially. that $3 of cement costs becomes $4.50 to use very round numbers. So about a 50% increase in the cement cost, which adds maybe $2.50 to $2 to that mining cost. But as I said, we'll continue to work on optimising that mix design. Alternative binders certainly form part of that. and some of that will be about getting the logistics in place for fly ash or whatever that alternative binder turns out to be, which will really help negate the strength degradation issue that we saw in the quality assurance work. Thanks, Ben. Hopefully that answers the two questions.
spk10: Yeah, it does. Thanks.
spk09: Thanks, Craig. Paul, maybe, yeah, talk through the covenant, cash covenant.
spk12: Yeah. Thanks, Raj. It's a good question. There are two factors just to actually address this point. So we've got CP to draw down, which you quite rightly identified, 35 million. So we've been watching this very, very closely for obvious reasons. So yeah, we are very comfortable in terms of being able to get to that position. So we've got quite a bit of headroom there. I can't tell you exactly what it is, but suffice to say that there is sufficient headroom there to allow us to do that without any pressure. And then after that, we have the ongoing covenant in terms of the minimum cash position. So it then goes to $25 million in terms of the ongoing cash position we actually need to maintain at the minimum. Okay.
spk10: Thanks, Paul. Andrew, if I may, just a follow-up question. Probably this is for Mitch. I just wanted to, with your near mine exploration and regional exploration targets, given the drilling that's been done to date and what's remaining for the year, can we expect any initial resources on any of the targets or is it still too early to expect anything by the end of the year?
spk04: Raj, what we're doing right now is starting on the the infill programs themselves, it depends on drilling production, right? So we're looking at getting that stuff. We're going to kick off the resource estimation process in August. So what we have, depending on how many drill results we have, we'll be able to incorporate some of those drill holes into the actual updated resource models. But realistically, we probably won't have all of the holes in there. So a portion of it would be incorporated into the resource update for this model, but I think realistically we'll probably have more of that in the 22 updates.
spk10: Okay, and between the targets which you highlighted in the slides 21 and 22, which ones would you say are most prospective and most advanced?
spk04: Well, the ones that are most advanced at this point in time, we're looking at the, for the near-mind ones you're looking at, Raj, is that what you're looking at?
spk10: Yeah, near-mind and then the regional.
spk04: Yeah, I would say the most advanced ones is probably going to be the Mideast and Dead Man's Hill because we do have a lot of drilling that was done in the open pits in there. They're old historical open pits from there. So we have to sit back and sort of assess what's going on as far as the structure is concerned because it was very wide space. The drilling spacing at Mideast was over half a kilometre and Dead Man's Hill I think was a couple hundred metres in between drill fences there. So there's still a lot of room for further interpretation and then we're going to think out what we're going to have to do there for the next phase of the drilling on it But I would say that resource updates in those particular areas are probably at least a year out for now, depending on how long we hit it and what targets we come up with.
spk10: Okay, and then the regional stuff?
spk04: Regional stuff? Well, we've had some good hits already, but this is just, like I say, we're doing 400-meter spaced air core lines, so we're a ways away from that. We're going to run the IP and stuff over the better targets we've got there, and that will help guide us for the next phase of drilling. So we'll, depending on expenditures that we have for next year's budget for 2022, we'll be focusing obviously on the best targets, which is probably going to be the stuff at Quahog Hill and at Guadian. And Quahog Hill is important as well because it's already within the Denso mining lease. So you wouldn't be looking at permanent issues and stuff through there. It's already within a mining lease. So if we can accelerate that, that would be one of the prime targets to bring something on earlier than later. Or the other ones, you still have to look at drilling and the new permitting process and stuff that would have to go through. We shouldn't be successful.
spk11: Okay. Thanks, man. So that's it from me. Thanks, Andrew. Thanks very much, Raj.
spk05: Your next question comes from Jeremy Hoy of Canaccord. Please go ahead.
spk06: Hi, everyone. Thank you for taking my question. Most of my questions have been answered already, but just back to development quickly. I was wondering, you know, are you guys anticipating that 2022 production will be impacted at all at this point, or are you pretty comfortable that you guys will be able to catch up in H2? Thanks, Jeremy.
spk11: Maybe, Graham, do you want to touch on that? Yep, thanks. Thanks, Andrew. Thanks for the question, Jeremy.
spk03: I think the development is definitely a key to us building inventory and building flexibility, but the other key is getting the pace fill back online. So they're probably our two key operational projects at the moment over and above production because that's really what unlocks the value in 2022. So getting the pace fill operating online In Q4, it's about six months behind where we wanted it to be when we started commissioning the plant at the start of the year. But it should unlock a lot of that secondary soap material in 2022. So we're rejigging all of the schedules. So getting the development rates up, getting the pasteball back on track, those things should unlock 2022 pretty well.
spk09: Yeah, I mean, I think just to underline that, Jeremy, the work we've got underway, as Graham said, in development where we're starting to more consistently hit the rates that we targeted, some of the strength tests coming back out of the place fill is all aimed at containing those issues to 2021. So we exit the year with effectively resolved. We're going to obviously continue to optimize the pace. We're going to continue to target further increases in development rates, but that's to go beyond 2022, not to achieve what we set out in 2022.
spk11: Got it. Thank you very much. So, head and ends, those are both critical paths at this point. Yeah. Thank you. Thank you.
spk01: Your next question comes from Don DiMarco of National Bank. Please go ahead.
spk07: Well, thank you, operator. Hi, gentlemen. Good morning. I'm curious about what additional levers you have for improving the balance sheet in the event that they're needed. I think we're all feeling pretty comfortable with the converts coming up, the repayment next month. But are you done with the ATM? And what else could you draw upon if necessary? say, burn a little bit of cash in the back of the year and you need some additional buffer heading into 2022. Thanks, Don.
spk09: Maybe hand that over. I think there's a slide you want to refer to, Paul, that shows the liquidity available and just address specifically how we're looking at that.
spk12: Yeah, exactly. So, Don, on slide 14, you'll see that we've put in liquidity in terms of potential available liquidity. available to the business. So we've got the cash currently at 73. The remaining ATM capacity of 36 should we choose to draw that down. And then there's the 29 million, which is the net amount available in respect of the Macquarie RCS facility. So it gives us a number of options in terms of providing that additional liquidity going forward. There's also the fact of, you know, operating within a stronger gold price environment. So, you know, prevailing prices of, you know, 1,800 plus is actually obviously very beneficial to us.
spk09: Okay. Thank you. I think maybe, Don, just to underline that, you know, the way we look at it at the moment is on the basis of the plans we set out, we put a fair bit of detail out in the PEI even at lower gold prices than this, the business will fund those. I think, as Paul mentioned earlier, between last year and this year, it'll be the best part, 100 million capital put into the business. And we've also reduced the net debt by 50%. And going forward, we're going to start to see some of the benefits of getting the development in place where they need to be in terms of volume. So that's going to improve the cash generation out of the business, which will then fund incrementally step up in investment to deliver further increases in volume. So as we look at it, that's the business funds those from ongoing cash flows. And, you know, we'll use the Macquarie facility, but that's what we need short term to repay the convertibles. And then we'll fund on an ongoing basis investment into the business.
spk11: Okay. Thank you for that additional color. That's all for me. Thanks, Dylan. Thanks, Dylan.
spk01: Ladies and gentlemen, as a reminder, should you have a question, please press the star followed by the one.
spk05: Mr. Ray, there are no further questions at this time.
spk01: Please go ahead.
spk09: Thank you very much. Thank you, everyone, for your time. And if there is anything else you need, please let us know and we'll get back to you. And look forward to speaking again soon. Thank you.
spk01: Ladies and gentlemen, this concludes your conference call for today. We thank you for participating and ask that you please disconnect your lines.
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