Regis Resources Limited

Thank you for standing by and welcome to the Regis Resources Limited September quarterly update. All participants are in a listen-only mode. There will be a presentation followed by a question and answer session. If you wish to ask a question, you will need to press the star key followed by the number 1 on your telephone keypad. I would now like to hand the conference over to Mr Jim Beyer, Managing Director and CEO. Please go ahead.

Thanks, Darcy, and good morning, everyone. Or good afternoon for those on the east coast. Thanks for joining us on the September quarter update. I note the quarterly was released earlier today and I'll make occasional references to some of the diagrams and the figures. Pardon me. Well, it's clearly been a tough quarter for us. Mostly anticipated, but some unexpected items adding to our challenges. But firstly, on the area of safety, I'm very pleased to report our safety metric of lost time injury frequency rates continues to be better than the WA gold industry average. As we saw, the 12-month average moved down just very slightly. In fact, rounded it, held at 1.3. So very pleased with that. On COVID in general, to date we've had no confirmed cases in our business. Regis continues to maintain a range of measures and controls, management plans consistent with advice from state and federal health authorities. and commensurate with what we see as the community risk profile. I would say the company supports the ongoing vaccination rollout programs and sees this as a critical element of the long-term path out of this period of uncertainty and potential health risk. Albeit by doing so we are introducing some short-term risks associated with implementation and acceptance and more on COVID impacts a little bit later. So onto our operations. On the production front, the September quarter we hit about 102,000 ounces at an oil and sustaining cost of $1,521 an ounce Aussie. While the quarter was always expected to be soft due to activity schedules, we did see some unplanned short-term operational issues arise which made it a little bit weaker than expected. While planned scheduling of activity was always understood to impact on our production relative to the prior quarter, we saw increased labour turnover and the requirement to introduce less experienced operators and training also played into our performance and the time to fill. This clearly is a trend across the resources industry, with generally increasing demand for experienced operators, certainly exacerbated by the COVID-related restrictions on labour availability in WA. Looking a bit more at the parts of our business now, Duketon, as I said, was a weak quarter as expected. Mullart produced 14,185 ounces at a cost all in of $1,720 an ounce. We did see an increase in the milk throughput as proportion of softer oxide and transitional material was being fed was a helpful impact. However, this material was also a weakness in the quarter as we saw a short-term variation in actual grade to plan. as the ore was presented. And this variation was associated with mining through near-surface oxides, including laterite depletion zones in the Blenheim pit as we progressed towards fresher material, and this variation impacted on the feed. We had notoriously variable swings as we passed through these ingrades, either way, as we passed through these depletion zones. Now, the variability is expected to continue until the end of this current quarter, but once we're through it, we will see head grades lift and a subsequent increase in production coming out of the Mullard operation in the second half. At Rosemont production was down 24,243 ounces produced for the quarter all in sustaining cost of $18.68 an ounce. The underground pleasingly has settled in and is now continuing to deliver at its planned production rates. Development was strong and gives us confidence that we'll continue at this pace. Open pit performance at Rosemont on the other hand was adversely affected by some relatively minor geotechnical concerns that did require a delay in operations while catchment fences were put in to manage this risk. This work is now considered to be complete. Garden Well produced 34,646 ounces, all in sustaining around $1,400 Aussie an ounce. Again, impacts on this quarter. We did have a major mill shut where we changed out the mill motor and as a result of that we had some subsequent monitoring and adjustment before we could return to full production rates. We did also see some lower recoveries from the high grade zone coming out of Toohey's well. This area is known to be metallurgically more complex and it was more complex than our original testing indicated requiring more oxygen. We have added extra liquid oxygen capacity, or we are at the moment. In fact the bullet was delivered last week. It's being installed and we see that coming online in November to help get on top of this issue of lower recoveries, which will allow us to return to feeding that high grade material in at rates that we planned. Total material movement at Garden Well was down a bit as well, 13%, partly because we rescheduled equipment, reallocated some of it to Rosemont, but also we saw some COVID-related drop in equipment performance, specifically around the drill and blast area. To recover this performance, we mobilised additional personnel, but that took some time. as well as the equipment, earth moving drill and blast and some grade control equipment to get on top of this and they're operational from this month. As I said, labour restrictions also impacted on our surface haulage trucks. These are the trucks that bring the material in from the satellites in the high grade areas. Now maintenance personnel numbers in this area have increased as we've got on top of that and the driver labour shortage has been mitigated but certainly the turnover in this area has been amplified by COVID. The bottom line here is that COVID related issues are an area of ongoing exposure for us while these restrictions are still in place. At Tropicana, safety performance continued to be strong Production came in slightly above our expectations with a full quarter of 28,915 ounces for an all-in sustaining of $1,204 an ounce. Boston Shaker Underground continued to deliver and lifting the feed grade to the mill by about 8%. In addition, the mill had a strong quarter increasing by 11% tonnes throughput on the prior quarter. Now part of this is because in the June quarter we had a large shutdown But this improvement is also a reflection of increased capacity that we've seen in that plan, driven by changes to the thickness circuit that was made in the June quarter, all of which is very pleasing. Overall gold production at Tropicana is travelling to plan. One aspect of Tropicana I did want to discuss was a dip in the performance of waste movement associated with the Havana cutback. Much like garden well really, off the back of inadequate DMV performance, specifically rig performance, and this was impacted by spare parts availability and shortage of skilled operators. Spare parts availability obviously impacting on availability of equipment, operators impacting on utilisation, and both of these are seen as being COVID related. Tightness in the supply chain, tightness in labour availability and time to fill. To date, actions to address the issues indicate that there will be limited impact on this year's production. However, this is an area of future production risk on timing and it's expected to continue while COVID restrictions impact on labour availability. I would say the time on site have been working very hard with the contractors to deal with these issues and certainly good progress is being made. Notwithstanding these short-term COVID-related risks, overall, We're seeing what we wanted to see from Tropicana and our guidance for Tropicana is maintained for the year. I reiterate Tropicana is a great addition to our portfolio and is providing some key strategic elements, not the least of which is the expansion in diversification on our existing production rate as reflected by its contribution both production and cash flow this quarter or last in the September quarter and clear potential future growth through life extension beyond current reserves. On the financials front, the September quarter, Regus sold just over 82,000 ounces for an average price of $2,170 an ounce. That's after adjustments for hedging. This generated a total operating cash flow of $93 million, 51 from Duketon and 42 from Tropicana. The reduction in operating cash flows relative to the prior quarter are really primarily driven by the reduction in ounces at Duketon. Now drawing against this cash generation was capital expenditure which saw an increase over the prior quarter. CapEx was approximately $77 million. 33 of deferred waste to Duketon in the open pits. About 11 was underground development at Rosemont but mostly at Garden Well and a bit over $5.5 million in plant and equipment. At Tropicana we spent $19 million and this is at 30% in deferred waste. Probably about three quarters of that was Havana cutback, the rest was Boston Shaker pit because it's still in operation. We also saw some capital development at Boston Shaker underground at $2.5 or $2.4 million, $2.7 in plant and equipment. Now this is a significant increase in the prior quarter of $47 million. but obviously what we're seeing now is three full months whereas the prior quarter we settled part way through the quarter and it wasn't a full quarter. Now in addition to the operating or the CapEx we saw other quite significant outflows during the quarter, $22 million in dividend payment, income tax of $21 million, expiration of 10 and 6 respectively and $7 million associated with some residual payments of the Tropicana deal. Now this resulted in our overall cash balance reducing from about $269 to $209 million at the end of the September quarter. Now figure 1 illustrates the inflows and outflows quite clearly quarter on quarter. While the September quarter was weak, as anticipated, we have maintained our full year guidance across the business. This is off the back of shifting mine grades that we're expecting, along with the actions that we've taken to address other pinch points that occurred during the September quarter. While maintaining this guidance, we do note further lockdowns in WA and border restrictions have the potential to cause more issues, which right now are clearly causing pressure on businesses including this extended period to fill vacancies and labour cost pressures. The potential impacts of the requirement for mandatory vaccine for mine workers in WA is specifically adding another potential level of personnel turnover and availability and that's quite real, although at this stage it's not clear exactly what that's going to cause and to what degree we're going to see any falling away if any of labour but it's certainly a risk. The situation remains fluid and we do what we can to monitor the potential impacts and take actions where appropriate. I'd also note that certainly we think in this quarter or it could be in the second half of the year the stamp duty associated with the Tropicana which we've now estimated to be down to $38 million is quite possible, although that's in the hands of government timing. Looking to the future, we see some really interesting opportunities continuing to materialise, particularly at Duketon. The Gardenwell South underground is progressing well. Our metres underground development has ramped up to 765 from 434 in the prior quarter. Figure 2, you can see where we've been adding that development in. And we've also just put an underground ring in to start the grade control drilling in the upper areas for targeting these first production zones. Just a reminder, this is about 1.85 million tonnes in the mining inventory, a grade of about 3.2 for circa 190,000 ounces. We are expecting to hit first ore later in this current quarter. I'd also note that the underground is open at depth. of the existing development, presenting with clear intercepts further at depth, presenting an exciting prospect for future life extension there, much like we're seeing at Rosemont as well. I think we're just getting started at both of those. This mine underground, the Garden Well South, will be a valuable addition to our production portfolio. At McPhillomys, we continue to work with New South Wales DPIE in relation to permitting the project. The rate of progress, we are making progress but it is frustrating. Surprising at a time when new projects and the associated benefits that flow to regional and state economies are what we need coming out of this major COVID impacted economy. However, we do know that senior state representatives can see the clear value as well and are working to help move the project along. The Regents is continuing to work with a number of departments, DPIE planning, which is responsible for making the recommendation to the IPC. The department of MEG which is the mining exploration geoscience for working on aspects of our mining lease application. The feds are involved as well, the department of agriculture, water and environment are also a key part of the approvals that will continue to flow. As I said, progress has been made to close out outstanding elements of these approvals As we close in on getting a clear pathway for all the required approvals we do anticipate at this stage a recommendation with IPC, certainly potential in the first half of calendar 22. But at the end of the day we don't have guaranteed visibility on that timing and the actual timing of any decision is largely outside the company's immediate control. Garden well main underground. Now this is a new area. We have been talking about this in the past. Figure 3 shows this key initial zone of interest that's marked as a potential underground area. This is certainly taking shape as potential production zone. The mineralisation extends down plunge of the existing open pit, the garden well pit as you can see, and drilling results continue to firm up this high-grade plunging chute underneath the main pit. Some of the examples of intercepts, 9.6 metres at 4.4 grams, 10.8 at 2.3 grams, 24.5 metres at 3.2, 9.6 metres at 3.7. These are strong results and they're demonstrating the potential value that we're looking at of establishing an early access to this zone via a decline between Garden World South underground mine, the existing area, and the growing new area. You can see it on the diagram. where we've marked that conceptual decline. The key here is that the broadly spaced, while the drilling is broadly spaced in that area, the data collected from that drilling along with the open pit provides enough confidence that a potential small production area could deliver enough ounces to at least pay back the potential decline in establishments cost and may provide a modest return. So we're working on that at the moment to evaluate that potential. The real extra spicy sauce that comes from this decline is not only does it give us the access to this certainly quite significant garden wall main area, but it also allows us to follow up on the high-grade results that we've seen in this prospective area between the gardens of south and the main. And you can see that area clearly marked in the diagram, I think it's in Figure 3, as the under-drilled area with a couple of intercepts that we've got, we see there's great potential in this. So we're working to evaluate and hopefully we'll be in a position to make a decision on this in the current quarter. As you can see, this is clearly a production zone that reinforces the broader strategy at Duketon to use underground extensions from the open pits to stop the inevitable production decline from our pits. and maintain our production levels from these multiple underground sources. I would say we haven't included any update in this report of the Rosemont extensions but we're also seeing some of the extra opportunities there and it's also too as exciting with this new potential production zone to the south along with down plunge extensions that are crystallising. And what we will be doing is we'll provide more details on that and more generally our expiration update across the Duketon belt, Greenstone belt, in a couple of weeks' time when we provide the biannual expiration update to the market. In summary, the quarter was difficult. We experienced the variation in performance we were expecting, plus we experienced other operational variations, as I mentioned. This, along with the impacts of COVID that gathered a bit more steam in the form of turnover and time to fill roles, made it a challenging quarter. But in the quarter, we did make some progress on McPhilemys, albeit slow, but progress nonetheless in the formal approvals process. We're still confident there's a pathway to get our project approved. It's just taking time. Our first full quarter from Tropicana, which was delivered as planned, We made progress at the Gardenwell South underground project and that's clearly gathering momentum to be more than we thought. Excitement is certainly building around the Gardenwell main potential area as a whole new potential high-grade production zone. It's been a tough operating quarter for Regis and we and the WA industry in general, I think, and certainly resources. isn't out of the COVID woods yet, but at least we are on a planned path forward. Hopefully we'll see some clear air on this in the new year as the government strategies to open up borders gather traction and we can start to access and rely again on the very important element of our industry's workforce that comes from interstate. But despite the near-term challenges, the company's bones are solid and they're growing. That's just talking through some of these growth potential illustrates. If we look beyond a single quarter or two, we can still follow in our plan of growth and growing our life as a potential profitable business producing at a rate of half a million ounces a year with an oil and sustaining of under $1,000 US, almost 5 million ounces of reserves and over 10 million ounces of resources. So a challenging quarter. it's still clear we have a great future in front of us with more potential being opened up. Alright, so look on that note, I'll hand it back to Darcy and we will look to deal with any questions that people would like to ask. Thanks Darcy.

Thank you. If you wish to ask a question, please press star 1 on your telephone and wait for your name to be announced. If you wish to cancel your request, please press star 2. If you're on a speakerphone, please pick up the handset to ask your question. Your first question comes from Peter O'Connor from Shaw & Partners. Please go ahead.

Hi, Jim. Hi, John. A couple mixed elements. You said first half calendar year 22, but in the release, if I read it correctly, it says first half FY22. Could you clarify the timing that you do expect or hope to get the approval?

Yeah, look, there's a very slim possibility in the first half, but realistically we think that even that would flow. Certainly IPC would flow into the first half.

OK. Working capital, the build of ounces at Tropicana you noted in the release, we're now expecting release of those?

Um... If you're talking about the build-up of ounces on hand that we've got, Peter, there's nothing special in there. It's just there's ounces on site at Tropicana, ounces on site at Duketon, ounces being upturned by the Mint.

You're talking about the gold on hand as part of our cash and gold balance? Yes. It's probably already gone. That usually goes within a couple of days, Peter. We don't tend to hold our gold stocks for long. Particularly during the first quarter and the third quarter, we sort of let that roll pretty well. But we'll push hard to get that all out the door at the end of the first half and second half because it's obviously more important then. But, yeah, that stuff just moves very quickly. Just timing.

Yeah, I just thought I'd call it out because you called it out as well. I wanted to ask. And, Jim, you go to Wilmaine. Fascinating. Just to understand what you're talking about, so the decline will be funded via potential ore that you'll pick up on the way from south through to the main area, is that how I understand your comments? And then the prize is at the end of that, which is the drilling you've done under the main pit at Gardiner North?

Yeah, look, the concept that we're pushing hard on, and we haven't approved it and finalised the work yet, but we had the option, you know, we could spend another year drilling out that area underneath Garden Well Main and prove it up to be arguably the same size and scale as the Garden Well South area. The drilling in that area is slow. There's some pretty hard shirts, slow and expensive. So we've taken a view on this to drill up enough confidence for a relatively small area that warrants and would pay for a decline across and make a modest margin on it. It doesn't need to be hundreds of thousands of ounces. By doing that, we can commit to the area earlier and we'll put a decline across, as you can see on that conceptual decline. Our objective would be to get to Garden Wall Main as quickly as we can. Once we're there, we can then start to open that area up as a production source and continue to drill out more of the ounces down plunge. So we're looking carefully as to where that decline would be to give us the right purchase and angle. But the added benefit that we get is that area in Figure 3 that's marked as being under-drilled. You can see some of the intercepts through there that just haven't been followed up. And clearly there's mineralisation there because it was mined out as part of the open pit. It just hasn't been drilled out much. So it gives us a platform to drill that as well. So we see that... And it's a similar strategy to the one that was followed at Tropicana where we've opened up Boston Shaker, found enough material underneath the old Tropicana pit to warrant a decline going across which is effectively an exploration decline that's paid for by the ounces that we'll get to when we get there and then we use that as a platform to drill off more material which by the way is proving to be a pretty appropriate strategy there as well. But that's the concept here, Pete. We prove up enough reserves, enough material to give us confidence. We're not wasting our money going out there. There's no potential for loss and a modest return and that will give us the platform to continue to grow production underneath Garden Wall Main, but the added benefit of opening up that new area, we don't need the area to have any ounces to justify it, but we certainly see that as being a very attractive exploration target as well.

Okay, so when you say a decision is possible during December quarter 21, is that likely to come out with the exploration update or is that a separate part of that? And when would a decline kick off towards this area if you've got the approval this quarter?

Yeah, look, we'd look to push that. It will be separate to the biannual expiration update. We'd be looking to do that sometime over the next two to four weeks. The decision on Garden Wall Main is still a bit further down the track and I'd like to think that we can get that done before the end of the year. If we did, I think... we've already, if the potential's there, it's a stub break off from the existing development and we can push on. So I don't think there'd be too much of a delay there. We just need to make sure that we're not drawing away unnecessary resources from the development program for the Gardenwell South, you know, things like ventilation and stuff. But that's all being looked at at the moment. But I, you know, we're not talking about a major delay waiting to get onto it.

Okay. Last quick one, figure two. You've got in green the underground development previous. You've got in red underground mining June quarter 21. Is that supposed to be September quarter 21? And if it's June quarter, where's the September quarter development on that slide?

Yeah, that's the September quarter.

OK, got it. Thanks.

Thank you. Your next question comes from David Coates from Bell Potter Securities. Please go ahead.

Thank you. Good morning, Jim. Good morning, John. Yeah, tough quarter. I've mentioned across most of the boxes, I think, apart from safety, thankfully. But just in terms of, you know, geotechnical issues, some great issues, more shutdowns, all that kind of stuff, and labour and stuff, you know, also all kind of causing, you know, disruptions across the board. Yeah, some of those things, you know, seem like, you know, sort of delaying production as opposed to losing production, but, you know, some of those things might also end up in kind of lost production as well. But just sort of a sense of, you know, how over the balance of the year, what strategies you guys are putting in place to make up that delayed production, I suppose.

Yeah, so, for example, if you're looking at... at Rosemont Open Pit, where we had to hold up work to put in some catchment fences for some unstable ground. We're getting to the bottom, to the end of the Rosemont Pit in some areas, and as a result, it's very tight in the space. Therefore, if you get some loose rocks, It causes some things that you can deal with when you're much higher up in the sequence or you've got a much bigger floor. You can manage the risks differently, but we had to pull back and put the fences in and make sure that they were adequate before we went back in. Now, part of the reason that we're obviously in that space is we're getting towards the end of that pit and those areas. Really it's more of a medium term timing issue rather than lost production on that front because we've just had to shuffle our production around and that's basically consistent with some of the other areas as well, which is a key reason why we're still holding firm on our guidance with these issues. Apart from maybe some of the transitional recon we've had as we've passed through this transitional area up around Blenheim. The rest are all, you know, sort of timing. And even the transitional area, you know, the ounces that we've lost there, because it's a highly variable zone, it's quite possible it could swing the other way, which is what we tend to see over time. We're not banking on that, but that's always a possibility. But we just know that we've got to get through this ground and then we'll be in the high-grade area as planned. which we have more confidence of because our experience tells us that you get this variability. The bottom line is we have seen movement around. Some of it's resulted in us having to change our timing on when we feed material in. We're still confident that we're on top of those variations and that we can still come in within our guidance range at Duketon and obviously at at Tropicana as well because we've held our corporate guidance but the key there is our recovery at Duketon and we're still confident that we can come in on that in that range.

Alright thanks Jim. Just a question on Tropicana which you touched on. The fill and blast issues, It sounds like they're kind of, I guess, delaying the completion of that cutback and access to the oil that's underneath it. You said, I think, that FY22 production is okay, but it might delay perhaps production growth that you've been looking for in FY23. Is that kind of how I should interpret that?

Yeah, that's the potential. We think FY22, our current year, is still fine. Obviously, it's being monitored pretty carefully. We were up there last week looking at that and so we've got pretty new information there. Certainly the potential impacts of a slower cutback at Havana because that's a longer dated new production source has an impact on when that comes on. But again, there's actions underway there and a recovery plan to get back on top of that. At the moment, we're watching that very carefully. I guess to some extent, the unknown that's around is whether the COVID impacts will continue to cause a problem there. That's a bit of an unknown for us, but we know that the team on site and the contractor have been working to lift the performance, and we have seen that performance of the drilling fleet and the overall material movement lift significantly. lift back up to where we're needing it to go. It's not quite there yet, but it's on its way. So we're still watching that carefully and not ready to make too much of a call on that, negative impacts on that. It's just a risk that we're monitoring at the moment.

No worries. Thanks very much, Jim. Cheers.

Thank you. Your next question comes from Patrick Collier from Credit Suisse. Please go ahead.

Hi, Jim and John. Just two from me, please. First one, just on the elevated turnover, do you mind giving some sense of quantifying maybe what the turnover in the last quarter or so has looked like compared to the last year or two?

Yeah, sure. So the industry generally runs when things are normal, you know, I don't know, probably somewhere between 20%, 25%, maybe a little bit percent turnover. We've certainly seen... and some of our contractors have seen, and granted in some areas of the business, even in normal times, turnover can be much higher than that, but we've seen elements of maybe 40%, 50% turnover on an annualised basis in the last quarter in certain sections, not everywhere, but in certain areas. Truck drivers are hard to come by, surface truck drivers. And although we know that our mining contractor has always had a strategy of taking on and training greenhorns, so they always have an element there. They've got an excellent training program that they run to keep themselves fed with the right type of operators. But where we have seen in some of our other contracting areas, you know, surface haulage those truckies have been drawn off to other operations or other parts of the resources game, or they've just lost access to interstate drivers because the border restrictions have just made it virtually impossible to fill. So, yeah, normally we'd see turnover 20% to mid-25%, but we've seen that... that step up in certain areas of our business to 40 or 50%. And it's not just the turnover that's causing the issue. It's also the time to fill because skilled labour is scarce. And that means it just takes time to fill roles. They are being filled, but it's taking time. So that just adds to the issue.

Okay, sure. That's very clear. Thanks for the detail. And then just secondly on the drop in head grades at Mullart Well, are you able to give a sense of how much of that is from the lower grades through that transition area versus the processing of stockpiles?

Well, it's probably a combination of both because when you go through the transition, if you're not getting the material that you want in terms of tonnes, then you go to your stockpile and you pull off your low-grade stockpile, which is what we've been doing The other issue as you go through the transition, sometimes you mine through it and you find the grades are better or you get more tonnes than you planned. Other times the grade's not as good. So what we experienced during the September quarter was that we didn't get the same number of tonnes and the grade that we did get was a little bit lower than what we were expecting. So we had to supplement the feed with more of the low grade. So we sort of you know, got the impacts from a couple of different sides. Exact proportions of that, I don't have the exact breakdown on that. Probably, you know, I reckon we probably lost 20% of our ounces associated with that from 10% to 20% of our ounces associated with that for the quarter in Mullart, but that's just an estimate.

Okay, that's great. Thanks very much.

Thank you. Your next question comes from Matthew Collings from Morgans. Please go ahead. Pardon me, Matthew, you may have yourself on mute.

Sorry, I was double muted. I've been cautious. I think everyone's ticked off most of the questions. Sorry, Jim and John. But garden, well, just a quick one on the tuis or comment that It notes feed grades and recoveries were lower as higher grade tuis came in. Was the grade down because that's a recovery challenge meant you put less tuis well ore in than expected or was the grade of the tuis ore lower and it was more complicated?

No, it was the former. So we've got some carbonaceous material in that tuis well feed and the grade is a good grade. But it required more oxygen to get the recoveries that we were planning on. So rather than fritter it all away we adjusted our schedules and fed low grade materials while we got additional oxygen capacity to help deal with it. So once that additional capacity is commissioned it should be running early in November. um we would we'll be able to we'll see recoveries lift and we'll also see the proportion of feed from Dewey's well increase which will deliver uh the better grade so the grades are fine from Dewey's we just backed off because we weren't getting the recovery and we didn't want to lose lose the ounces that's very clear on the on the COVID vaccinations but have you guys got a pretty good handle on

on the vaccination status of your staffing things as we get close to this 1 December deadline from the state government?

We've got a handle on it. You know, we keep driving to... You know, we've got a major program of educating people, collecting the data on how many people are vaccinated, you know, as with any population... A fair proportion, there's a bell curve here, a fair proportion are coming and telling us without asking. Others are telling us reluctantly. Others don't want to tell us until close to the date. The point that we're emphasising to our workforce is you need to get your first vaccine. If you haven't got it, you need to get your first vaccination now. Because if you wait until the 1st of December, there won't be enough time to get your second vaccination, which you have to have by the 31st of December. And that's our drive, making sure that people are getting that message. And, you know, I think generally we've seen, you know, as this... You know, quite frankly, people who decide not to vaccinate... And this is the concern sort of underlying around the industry, is generally are there people... Is there a reasonable chunk of people who... who decide that they don't want to be vaccinated, and obviously they're making a conscious decision to leave the industry in general. I think generally people, we all think that that number is very low, but pushing hard to get all those that may be reluctant but still resign themselves to doing it, we need to get them done quickly because they're at risk of not being available in early January because they just haven't they're not in a position to get the second vaccination yet, which will be frustrating if we get there. So we're just pushing hard with the communication. We know we've got over 50%, but capturing the data on people is a little bit more challenging. So we just drive it and keep requesting it and doing everything we can to make the vaccines available for people and telling them where they are and pushing and cajoling them where we need to. No worries. Thank you very much.

Thank you. Your next question comes from Daniel Morgan from Baron Joey. Please go ahead.

Hi Jim and Tim. I was wondering if you could just address a longer term question. Can you just reiterate how long you are looking to keep the open pits running? How long can they keep filling the mills? And, you know, where does the ore come from? And also with a particular... Also focus on the Duketon North mill. Thank you.

Yeah, well, look, our reserves that we have at Duketon are predominantly open pits. So we're not talking running out of open pits in a year or two. You know, our life there, albeit I think we've got a couple of years at Mullard of... or year and a half or so at the back end of low grade stockpiles being processed. But we've got a good solid four and a half to five and a half years of life in the operation and we'll continue to be feeding in open pit material. The key is that the undergrounds allow us to maintain our, because of the grades, that allows us to maintain our total gold production. I think it'll be quite a while yet before we're a pure underground producing operation. As far as I can see out into the five to seven year profile, we'll continue to be a combination of surface and underground feed. Probably that's really the way we would want to be. The undergrounds are great, but the pits give us the cornerstone, the base load of production. and the undergrounds of the cream on the top. So, you know, we don't see ourselves running out of open pit ore any time within the next, you know, anticipated life, which is five and a half of reserves of mining and seven processing.

And just your questions on guidance, I mean, you reiterated guidance but you said that there's some risk to that emanating from the external environment, i.e., you know, COVID and this vaccine issue as well. Is there a... In your thinking, is there a time you're thinking about border reopenings that goes to your view? Or maybe another way of putting it is, you know, when do borders in WA need to open for you to meet your cost guidance? Or, you know, is that a risk if that's prolonged?

Yeah, well, how long is a piece of string? The reality is that we've seen these issues that we talk about at Duketon have been issues that we've struggled with and then got on top of at the Duketon operation. If the border closures remain in place for another half a year, I can't quite quantify, and it's There's a combination of issues here around COVID that I think we're all grappling with. One, in part, is the border closure. Before the borders closed, hundreds and hundreds of workers in the resources industry in WA were flown in from the east coast, particularly up in the big operations up north, and that's stopped. So clearly there's a labour shortfall. Our company's had a number of people that have actually moved as part of the COVID impacts, and they live here in WA. But all those that I think are willing and able to move have moved, not too many more. You know, we've now got not many, but we've had a couple of people leave in the last quarter that just said they can't... You know, the restrictions are just causing them too much life grief, so they've resigned and gone back to the east coast. Not huge numbers. But the piece that... You know, so I think if it doesn't... We're managing it... reasonably at the moment. The piece that I guess I'm trying to emphasise is there is a little bit of an unknown around as to what the implications will be when the two things, one, the mandatory element of vaccinations gets locked down. Exactly do we know how many people are going to basically resign themselves to not working in the resources industry? We'd like to think that that number is low and very low, but I guess we've got to see what happens there. The other element is what really will make a difference in general to manpower availability and the pressures that we're dealing with on things like labour rates as well will be when the board is eased. And the ability for our workforce to be as mobile as they were two years ago starts to come back. Now, there's clearly a path forward there. The state's working on vaccinations. But as we all can see, I think, and it's probably been expressed, we're not going to see much movement there until the new year. So exactly what that looks like. and the timing, I don't know. I mean, it's going to happen. You can see, you know, we know that it has to happen. It's the timing. And I guess what we're trying to do is just highlight the fact that it actually, it's just a risk to us and quite, you know, frankly, I would be surprised if there isn't people elsewhere. You know, everybody in the industry is just cognizant of the risks that we're, and the unknowns that have continued to float around and we head into in the near term with this mandated which, by the way, we support. We think it's important to protect our site and our people, particularly as borders open up. But it just, you know, you manage one risk and it creates another one that has to be managed as well.

And last question from me. I mean, I think this will be hard to answer, but I'd like to hear your perspectives on it. It's about the industry. And, you know, I think there's a thought that, you know, border reopenings for WA and the rest of the country and internationally would lead to a drop in this cost inflation that the industry is experiencing. Just wondering if potentially people on the East Coast and elsewhere may be reluctant to trust that these borders are going to be open and they can do FIFO operations and things like that going forward. Can I ask about your perspectives on that and what engagement you might have had with the government to see situation normalised in, say, I don't know, late 2022, or that may enable FIFO to begin, or is there a risk to it not normalising?

Oh, look, I think the... You know, there is engagement with government on this, clearly, at the representative element. Paul Everingham and the team at the CME, as well as AMEC, are... are doing a lot of work representing the industry on this front. What do I think is going to happen? What I'd like to think will happen is that whatever the definition of normality is, we return to it in the new year, in the first half of calendar 22. and the actions that are being taken around Australia and more globally but specifically within Australia starts to give us the confidence that the country can deal with this issue from a health management perspective and allows us to return to some semblance of normal operation in terms of intrastate mobility. you know, until that occurs, these pressures are going to be on us. So I'd like to think that that's going to be dealt with and managed in the new year, you know, in the first half of next year. But, you know, I'm not Nostradamus or a clairvoyant. So we just have to continue to engage. And, you know, I don't think that government authorities are oblivious to the issues. and we're just trying to manage this and everybody's just trying to manage it as best they can.

Thank you, Jim and Tim.

Thank you. Your next question comes from David Coates from Bell Potter Securities. Please go ahead.

G'day, guys. I had a follow-up, which is pretty much along those lines. I don't know if you have any additional comments you wanted to make about... industry lobbying or representation to the government on how much pressure is maybe being put on to open the borders up. But you've made a few comments on that already.

Yeah, I mean, it's happening, clearly, and there's good discussion. You know, I think there's good relationships that are being worked on there. We've just got to work our way through this period.

Thanks very much, guys.

Thank you. Your next question comes from Peter O'Connor from Shaw & Partners. Please go ahead.

James, to clarify, the stamp duty comment you made in your opening remarks, what was the number and what was the timing?

38. And the timing was? The original estimate was 44, but we pulled it back to 38. We've submitted the necessary paperwork to the government. You know... The timing's in their hands. John, we think it could be this.

Yeah, that's right. I mean, the advice that we've had is it may be towards the end of this year, but like Jim said, the timing is really up to the government there. We've certainly done everything we need to do in the timeframe that we need to do.

And end of year, John, that's calendar?

Calendar, yeah.

Yeah, OK, got it. Jim, Tropicana, you talked on one of the earlier questions about you were on site there, I think you said just recently. How many times have you been on site? How many JV interactions have you had? And if you could sum it up in a word or a sentence, how's that going? And is it what you thought it would be or different?

So we've been up to site a couple of times, three times if you count the original BD view. But we've had multiple interactions locally here in town with the management team with Mike Ericsson and his team. I think the relationship's great, very open. I think we've certainly been asking a lot more questions and getting into some of the detail that they may not have had with their prior JV partners, but that's no surprise to them because we're new to the game and we're just pushing into things, but they've been very... understanding of that and quite cooperative. What they're doing and what Tropicana is looking like in relation to what we thought we were buying into, we're very pleased with what we've seen. There were no surprises on the downside that we've spotted. It's what we were You know, the potential for the long-term growth, which is really what Tropicana is about, you know, getting back to this 450,000, 500,000-ounce production for the next few years, that's underway. You know, as I said, the timing on that is really being driven hard by the team. So, you know, we're pretty... In terms of our... What we've seen from Tropicana, we're very happy with the relationship, very happy with the engagement operationally and life of mine planning and where the opportunities lie and the results that we're getting from the diamond drilling. All of that is consistent, if not a little bit better than what we're anticipating. So overall, we're very pleased with the deal that we've done. We're very pleased to have it in our portfolio. And, you know, we look forward to continuing to deliver as to what we were expecting.

Okay. Can I swing back to the vaccination because it's been a fascinating discussion and thank you very much for being so open with your thoughts and comments. So if I was to try and look at what are the critical dates, not just for you but as an industry, is December 1 looming vac state then January 1? Are they the two critical points where we have an oh shit moment and go... who's not coming back to work?

Well, they're the key dates. At the moment, there's a lot of detail in the government directive that we still need to see and understand, and that will clarify things like reasons for not getting vaccinated, although I think, understandably, we expect that to be pretty tight. But the first date that we're all working to is the 1st of December, by which time you must have had, if you're visiting or going to a work site, you must have had your first shop. And then the next key date is that by the end of the 31st of January, you must have had your second. It's obvious, as I said, that there's usually a little bit more information in the detail of the directives as to how that works, and we haven't seen that yet. But as I said, I understand that our groups with Warren Paul at CME and AMEC are both working with the government to try and... with the state to try and get that clarified so that we understand a bit more of the detail. But at the end of the day, you know, the way it's running at the moment, if somebody hasn't had their second vaccine shot by... the 1st of January, they won't be able to travel to a mine site in WA. Full stop.

So have you as a board had thoughts or discussions about mandating vaccinations as a business risk indication?

We don't have to, Peter. It is mandated. It's a requirement of government for anybody that's going to a mine site must be vaccinated. It's not an option.

But I was thinking more about your opportunity in the shorter term to make sure you were ahead of the curve. That was all.

Oh, well, yeah, but I mean, we could mandate it from tomorrow, but then there's the practicalities that everybody has to deal with. You can't say tomorrow morning from eight o'clock, everybody must have it because it takes time. It's becoming a lot easier to get your vaccination shot. There's no doubt about that. I think we were talking yesterday that when you go to Bunnings now and get your sausage, you'll be able to get your shot at the same time. So just make sure you get onions with the right thing. But, you know, you can't... So we've looked at it and said it's a mandated obligation from 1 December because that's what it is. It really wasn't a decision that the board had to make.

Okay, sorry, now I understand. Thank you very much. Yes, no worries.

Thank you. There are no further questions at this time. I'll now hand back to Mr Byer for closing remarks.

Alright, thanks Darcy and thanks everybody for joining us. Obviously a fair bit going on with this quarter but we're certainly looking forward to getting on top of things and as I've outlined in there, there's a couple of exciting opportunities for further growth if we look beyond the end of our nose and into next year and the future. There's certainly some great things that continue to come a little track for us. So, as always, if anybody's got any follow-ups, please drop us a line or give us a call and we'll be happy to, where we can, fill in any of the...answer any queries. Thanks, Darcy.

Thanks. Thank you. That does conclude our conference for today. Thank you for participating. You may now disconnect.