St Barbara Limited

standing by and welcome to the St Barbara FY22 Q4 June quarterly report. All participants are in listen only mode. There will be a question and answer session after the presentation. If you wish to ask a question you will need to press star key followed by the number one on your telephone keypad. I would now like to hand the conference over to Mr Craig Jetson, Managing Director and CEO. Please go ahead.

Thank you for that, and good morning, everybody, and thank you for joining us on Zimbabwe's quarter four June FY22 quarterly report briefing. I'm pleased to join you on this call from Perth, the land of the Wadjuk and the Noongar people. Please note the disclaimers on slide two. As always, I would like to begin by recognising the traditional landowners of the First Nations people on the lands of which Zimbabwe operates in Australia, Canada and Papua New Guinea and pay my respects to elders past, present and emerging. So moving on to safety, I always start with our safety performance. Safety remains our number one commitment right across the organisation. One of our key challenges continues to be absenteeism and mitigation of increasing COVID-19 in case numbers. This is placing pressure on our maintenance and daily operations, including all of our contractors. With a TRIFA for FY22 or 3.4, there has been a slight improvement year on year. However, our TRIFA for quarter four highlights the importance of not becoming complacent. And we all know that we have a lot of work to do in this space. In terms of our key achievements, it's pleasing to present our quarter four results. Production at all our operation has been sustained and normalized through proactive and effective management. We have reached both production and cost guidance at all sites for the year with a very strong financial final quarter and promising outlook and start to FY23. The performance of the last two quarters in particular demonstrate that our results are improving and are repeatable. I have now spent time on the ground across our business. After the hiatus of COVID, This is clearly helping the team deliver better outcomes in all jurisdictions, including Nova Scotia's permitting and First Nations relationships. For St Barbara, one of the most noticeable impacts of COVID on our business was the inability for the executive and technical experts, both internal and consultants, to spend time off the ground supporting our business. Turning to the numbers, group production as a solid result of 86,000 ounces of gold up 40% on last quarter. Our focus on reducing costs has contributed to a decrease in all in sustaining costs, been down 12% at $2,007 per ounce quarter on quarter. A stronger realized gold price combined with higher production has delivered a 25% increase in cash to $99 million. And to note, this is after spending $28 million on replacing the DSTP, St Berry being non-operational or adding gold production for at least six months, and funding for the $34 million of acquisitions such as Kin Mining and Nova Scotia Gold. We now have an aspirational target of $10 million in cost reductions through the consolidation of our corporate functions to Perth. We are announcing an inaugural oil resource of Old South Gwalior, which is adding a further $1.9 million tonnes of resource at 3.7 grams per tonne. This will add a further mining front and significantly shallower depths at Gwalior and help with more optionality at these lower depths. St Berry is under strategic review. It's pleasing that multiple parties are interested, which is a testament of the strong value of this operation and the sulphide project. This quarter results also highlight the value St Berry can add. Our organic approach and our strategic approach in developing the Leonora Province has given us the opportunity to think about Atlantic in a similar way with a holistic province plan approach. This thinking will drive organic and inorganic growth across the business continuity for many years, creating further value. Our province strategy is very visible and is working. The quarter results demonstrate this. Our strategy for Leonora has been to stabilise and then improve operations, do more development, fill the mill, while we progressed our Leonora Province Plan. Gold production for both quarter on quarter, year on year, in fact, is up 25%. For the quarter, this was due to our ability to access stopes previously blocked by the seismic event at Leonora in November 2021. For the year, this was driven by increased ore mill due to the management's decision to remove historical waste and opening up additional mine headings some 12 to 18 months ago. Ore mine for the quarter was slightly down, driven by the availability of maintainers and operators, primarily due to COVID. As slagged in the last quarter, productivity for four new jumbo drills has resulted in development is increasing by 26%. Looking back at the full year tonnes milled, for the last four years, this has seen an increase of 58% from 652,000 tonnes in FY19-20 to 1.1 million tonnes in FY22. This significant increase in mill performance shows us delivering on our strategy to fill the mill through more effective management at Gwalior. The productivity increase is an operating strategy. It's not driven by capital. The Leonore problems plan is well underway. Our acquisition of Bardock certainly supports this. Bardock assets have been promptly assimilated into our business with Zorastrian on track for first production in the next 12 months. Management have identified a commissioning strategy that enables Bardock to be bought online six months earlier than initially thought. This strengthens our position to fill the mill much sooner. Under St Berry, St Berry has returned to full production and has had a great quarter. The year has been impacted by the DSTP replacement followed by the outback of COVID that everybody can remember in February of 2019. However, quarter four shows that we can still deliver. I have spent considerable time on the ground in St Berry The new ideas generated at the time with a highly motivated team there has led a better mine and mill productivity, better maintenance processes and better availability and equipment reliability is certainly improving. We have achieved higher levels of production in St. Barry. Roadblocks have been removed and the operation is delivering above expectation. This has been an enablement for senior management, consultants, technical experts, being on the ground for the first time in two years to help the site management team and the operational team. Management expects improvements that have been rolled out at Sinbury over this time to continue through to FY23 based on the quarter four results. In terms of the strategic review, discussions remain ongoing that are confidential, but I am pleased that there are multiple parties in the data room. This quarter results shows that where it is impossible to operate and how it is impossible to operate some berry and grow some berry. Looking at the SoFi project, this extends mine life by greater than 10 years as a strong NPV and creating enormous value. Notwithstanding, there have been price increases and scope changes. We'll still work through those issues. It's a strong project and attractive to many companies. In terms of Atlantic, access to high-grade oil was possible following removal of in-pit waste, which drove a 64% increase in gold production. I personally met with the Premier Tim Houston of Nova Scotia. Premier Houston has been supportive of a more collaborative approach. We are working together and have already dealt with some of the permitting backlogs. For example, we can now submit multiple permits at any one time. In this quarter, two delayed permits have already been approved, the ammonia treatment plant and the clay cutback. We are confident that the new approach will secure the tailings lift permit mid-August, delivering business continuity for the rest of this financial year. The approach we're taking in Canada flows on from the Leonora province plan strategy. The potential of our province approach in Western Australia has been recognised across the sector and will transfer well into an approach similar in Canada. The two extended trips I have made to Atlantic this year, I have been able to forge relationships not only with government, but also including the First Nations and the Premier himself. I'm heading off there again soon to continue building these relationships and looking forward to meeting with the Premier and the First Nations people once again. We are committed to the current plan at Atlantic. Lift the current tailings wall and providing tailings capacity for the rest of the financial year. Finish mining the two-court pit by the end of this calendar year. Process stockpile ore for the next two years while Beaver Dam is being permitted and constructed. Secure the in-pit tailing permit to enable tailings capacity for the remainder of the operations and also deliver the EIS approval for Beaver Dam in quarter four FY23. With COVID and other roadblocks, it's taken time, but we now have a pathway. I'm on the ground supporting the Atlantic team quite often, and this is delivering the outcomes that we need. Our problem plan strategy places Leonora as central to any consolidation in our view. Zimbabwe has the largest mineral resource and oil reserves in the Leonora region, near-term growth from Old South Gwalior, New mines such as Zorastia and Aphrodite with Zorastia in production within the next 12 months. We have a large landholding that grew significantly this year with the acquisition of BARDA which delivers on our province strategy. We also cash flow positive with $177 million from Leonora this year. We can fund our growth projects organically. Our focus on Gwalior and Leonora province is generating early rewards with expansion expansion of reserves and resources and extending St Barbara's footprint across the region. Our province plan thinking is seeing undeveloped opportunities in the region beginning to approach us for future development. That's very exciting. We have over 122 million tonnes of ore to be processed containing 10.5 million ounces of gold. This represents decades of potential growth and sustainable production. all expandable at low cost. The hardest thing about gold mining is finding the gold, and we're certainly doing that, and we already have plenty of it, and it's growing. The first two mines to be developed in the near future is Zoroastrian and Aphrodite mines, which we acquired this financial year. DADOC assets have been promptly assimilated into our business. These two mines will not only fill the current 1.4 million tonne capacity but also assist in the expanded 2.1 mil capacity justification. This will lift the amount of material processed at the Leonora pram from 650,000 tonnes we did back in 2019-20 to 2.1 million tonnes by FY26 with minimal capital spend. Zoroastrian will be in production in 12 months time. This is six months ahead of our original schedule. We're expected to be delivering 300,000 tonnes per year on an average of three grams per tonne of our milk. The ore body is open in all directions. We have plans to commence drilling as soon as possible. We have been investigating the possibility of starting some of the resource extension drilling from the surface. Originally, we thought the old open pit would make this too difficult, but our technical team has done some great work and have found locations where we can safely set up set up surface drills and commenced this work early. Gwalior is almost 130 years old yet we're still finding new resources. The inaugural resource and the announcement today for Old Gwalior South adds a further 1.9 million tonnes of resources at an average grade of 3.7 grams per tonne. This is an area between 600 to 1,000 metres below surface, much shallower than the deeps that we're currently seeing ore transported today. Over the coming quarters we will continue to find the rest of the ore body that looks like it may extend to the surface. In the September quarter we are targeting the inaugural Tower Hill open pit reserve, followed up in the March 23 quarter with the inaugural Harbour Lights open pit ore reserve. Again, this is very exciting for us. We may have the largest ore reserves in the region already, but we are keen to continue to add to our high-quality portfolio. In terms of exploration, our exploration teams are keen to commence drilling on extensive land holdings which came with the Bardock acquisition. 25 priority targets have already been identified in these new areas. We are chasing high-grade deposits and have plans to drill 22,000 metres through FY23. In terms of plant expansion, I believe we are in an enviable position of being able to expand our processing plant at very low cost. With a modest investment, we will increase the processing capacity by up to 50%. And with improvements at Gwalior, the new lines in Zoroastria and Aphrodite will be in a position to immediately fill the mill. Established infrastructure with processing capacity available today at low cost future expansions significantly differentiates us from all the others in the province of where we operate. I think this table clearly articulates a central region of consolidation of where we are. Our current rate of processing would take us 87 years to process all the material. Accelerating the delivery of high quality resources that we have in our portfolio would deliver outstanding value to our shareholders. This quarter and the second half of FY22 demonstrate the transformation is underway. We are delivering on uplifts one and two, and three, which is our growth strategy. This quarterly performance is an indicator of our future and the Leonora Province plan maturing. Atlantic's potential to be transformed in a similar province approach and strategic review of some very underway will also create significant and deliver significant value to St Barbara. Our Leonora Province Plan demonstrates that we have the largest mineral resource and reserves in the Leonora region, continual near-term growth including Old South Gwalior, a new high-grade mine in Zoroastrian on tack to commence in production in the next 12 months, a large and exciting landholding we believe that offers the best opportunity to find high-grade additions to our leading portfolio, a low-cost mill expansion and the ability to fund these exciting projects and growth projects through our own cash flow. Production is up per ounce is stable. Cost per ounce is stable. Some work to do to improve our safety performance. All in all, a solid quarter that reveals our potential and confirms our ability to achieve it. So with that now, I will open up all the lines for questions that people may have and thank you for joining me. So open for questions.

Thank you. If you would like to ask a question, please press star 1 on your telephone and wait for your name to be announced. If you would like to cancel your request, please press star 2. If you are on a speakerphone, please pick up the handset to ask your question. Your first question comes from Reg Spencer of Canaccord. Please go ahead.