K92 Mining Inc.

Thank you, operator, and thanks, everyone, for attending K92 Mining's second quarter 2022 conference call. We hope you and your families are doing well. In addition to myself, we have on the line John Lewins, Chief Executive Officer and Director, and Justin Blanchett, Chief Financial Officer. I would also like to remind everyone that after the remarks for management, the call will be followed by a Q&A session. As we will be making forward-looking statements during the call, please refer to the cautionary notes and risk disclosure in our MD&A. and slide two of the webcast presentation also please bear in mind that all dollar amounts mentioned in the conference call are united states dollars unless otherwise noted now i'll turn it over to john to provide you with an overview well thank you david welcome everyone

The second quarter, we took another step forward, delivering on multiple records, including record cash balance, record mine production, record mill throughput, while also achieving strong all-in sustaining and cash costs. This was the first quarter where we achieved throughput significantly above that stage two run rate, where we averaged 1196 tons per day against a stage two run rate of 1100 tons per day. Subsequent to the end of the quarter in July, the process plant actually achieved multiple new daily throughput records, which were substantially higher than the Stage 2a expansion run rate of 1370 tons per day. Importantly, these record throughputs were achieved without the installation of the new flotation cells, which will double our rougher capacity, which were only planned for the fourth quarter. And that really highlights the upside potential beyond even our Stage 2a design. Lastly, we continue to make significant progress in our organic growth through exploration, delivering a 10.8 million ounce gold equivalent maiden inferred resource at Blue Lake at a discovery cost of less than a dollar an ounce. We had high-grade drill results at Cora and Judd, and I'm pleased to report there are now four surface diamond rigs operating at Cora South, Judd South, with a fifth on the way. And in addition, we have the six diamond rigs operating underground. So we're really excited about the exploration and believe this is only the tip of the iceberg, both in relation to the high-grade vein systems, but also in relation to the porphyry targets. On the safety front, we recorded one lost time injury during the quarter. We remain proud to operate with one of the best safety records in the Australasian region. We have a strong focus on occupational health and safety and also continuously improving our safety systems. On the ESG front, I'm pleased to report that we recently completed multiple community projects, including refurbishment of the Kanantu Police Station, and refurbishment of the Kanantu High School Library. Other projects, including upgrading of community roads, various agricultural projects, training and education initiatives remain ongoing. While I was in Papua New Guinea last month, K92 received recognition for our industrial training program. K92 provides practical work experience to the largest number of mining engineers, metallurgy and geology university students of any mining company in PNG. Developing that workforce skills domestically is a major focus and we highlight that our workforce is one of the lowest percentages of expatriates of any mine in the country. The program is one of many community and social programs and I encourage you to read our sustainability report for more information. Our 2021 sustainability report is planned to be published shortly and we're very proud of the positive impacts that K92 has had in Papua New Guinea. Greenhouse gas emissions and climate change is another key focus for K92. I'm very pleased to announce that we've completed our 2021 greenhouse gas emissions inventory and TCFD gap analysis. The findings, in addition to our greenhouse gas emissions forecast, which is underway, will be a key tool in K92's emission targeting and goal setting going forward. 2021 greenhouse gas emissions inventory was completed by WSP consultants and shows that K92 delivers low carbon production with an emission intensity which is approximately 60% below the global gold sector average. The results also highlight a near-term opportunity to massively reduce our emissions. referring to the emissions build-up pie chart shown here. Upgrades to the grid for our direct power distribution from Yonki Dam and improvements to our distribution reliability can potentially reduce by almost two-thirds our combined Scope 1 and Scope 2 location-based emissions. And I'm pleased to report we're working in collaboration with P&G Power to upgrade this and that is actually already underway. This is expected to make a major positive impact towards reducing our emissions intensity. And most importantly, it's not long dated. The potential to realize this is over the next 12 to 24 months. Moving on to our operational performance, during the quarter we produced 26,085 ounces gold equivalent with 108,850 tons processed at a grade of 8.2 grams per ton. If we compare this to the Q2 2021 mill throughput, our mill throughput increased 44% and our production increased 59% respectively. A major positive continues to be the strong performance of the mill. In the second quarter, as I've noted, average mill throughput was 1196 tons per day, which is 9% above stage two run rate. In June, the plant achieved a record monthly average of 1251 tons per day. And in June, following the installation of our new TC1000 crusher, multiple daily records were achieved, including 1638 tons processed on July the 6th. 1642 on the 14th and 1609 on the 12th. As I've previously mentioned, what makes this even more impressive is that we have not yet installed the additional rougher flotation cells, which are the important part of that stage 2a expansion. In terms of our key operational quarterly physicals, Kenantu delivered record mill throughput, record mine material. Development also increased significantly, 19% quarter on quarter, and was the second highest quarterly development advance rate to date. Development was certainly impacted by COVID-19, and it remains a major near-term focus as we expand the mine and increase our near-term operational stop sequencing flexibility. I'm pleased to report that in June, near-record development advance was achieved, and with the new jumbo and loader recently arrived in country, we obviously see that continuing. Plans to add more equipment over the coming months are also underway. In terms of 2022, I think it's important to remind investors our guidance is based on the second half of the year being stronger than the first, driven primarily by increased throughput rates and also by higher grade stop rates from our stop sequencing. So this puts us now well positioned to achieve our production guidance of 115 to 140,000 ounces gold equivalent. So I'll now turn the call over to our Chief Financial Officer, Justin Blanchet, to discuss our financial results for the third quarter.

Thank you, John. And hello, everyone. During the second quarter, we had revenue of $37.4 million, a 5% increase from prior year. We sold 23,674 gold ounces at an average realized selling price of $1,783 per ounce. compared to 18,939 ounces at an average realized selling price of $1,754 per ounce in the prior year. As of June 30, 2022, there are 3,012 gold ounces in inventory, including both Concentrate and Dore, a decrease of 1,836 gold ounces when compared to March 31, due to timing of sales. Cost of sales was $23.2 million compared to $20.9 million in the prior year or $18.5 million compared to $15 million excluding non-cash items. Cost of sales is higher due to increased tons mined and processed in 2022 and an inflationary impact from both the COVID-19 pandemic and the war in Ukraine. The successful ramp-up of the Stage 2 expansion has allowed the company to achieve better economies of scale and lower unit costs, with mining activity increasing from 72,000 tons in Q2 prior year to 114,471 tons in Q2 2022. In Q2 2022, cash flow from operating activities before changes in working capital was $10.5 million compared to $15.2 million in the prior year. As of June 30, 2022, we had $81.7 million in cash and cash equivalents, while spending $10.7 million in expansion capital for the quarter and having our strongest working capital balance to date of $94 million. Subsequent to quarter end, the company completed a bought deal financing for gross proceeds of Canadian $50 million. The company has no debt on the balance sheet. As John mentioned, during the second quarter, the Kenantu Gold Operations produced 22,934 ounces of gold, 1,229,961 pounds of copper, and 25,224 ounces of silver or 26,085 ounces gold equivalent. We sold 23,674 ounces of gold, 1,349,816 pounds of copper and 27,033 ounces of silver. We incurred a cash cost of $617 and an all in sustaining costs of $893 per ounce gold, which was significantly below our realized gold selling price of $1,783 per ounce. When comparing to prior year, our cash costs decreased from $736 per ounce. The decrease in cash costs was primarily due to the successful ramp up of the 400K expansion, allowing the company to achieve better economies of scale and a 25% increase in the amount of gold ounces sold. It is important to note that after commissioning the Stage 2 plant expansion in late third quarter 2021, we have seen a significant compression in our total unit cost per ton processed. We continue to see downward pressure on costs via economies of scale as operations ramp up. I will now turn the call back to John to continue with the rest of the presentation.

Thank you, Justin. So for the exploration and growth section of the call, we'll begin with Conanta's production growth strategy. So the stage two expansion to 400,000 tons per annum was achieved in late third quarter of 2021. Throughput rates have now obviously exceeded that in the second quarter, and our Stage 2a expansion is currently well underway, increasing our throughput for the 25% to 500,000 tons per annum. We're also advancing the Stage 3a expansion, which increases throughput to 1.2 million tons per annum through the construction of a standalone new processing plant. Feasibility study also includes looking at a PEA case where having commissioned the new 1.2 million tons per annum plant, we will then bring the existing 2A plant back online and ramp our production up to fill both plants. Study is well advanced and we plan to announce them over the coming weeks. In terms of stage 2A, capital cost, as I think you recall, is low at $2.5 million, which is primarily for the ancillary equipment or the process plant. In terms of the underground, mining rates increases are achieved through accelerating the timing of some of the stage 2A sustaining capital. At the plant, filter press is operational. Additional TC1000 is installed and commissioned. Float tanks are planned for installation in the fourth quarter with commissioning in that fourth quarter as well. However, based on the strong performance of the plant today, we are still able to increase mine and processing throughput rates ahead of the delivery of those float tanks. And that's obviously been demonstrated what you've seen over the last couple of months. From the Stage 2a, we expect to see a meaningful boost in free cash flow generation, which will obviously further strengthen our ability to self-fund our growth. Also during the second quarter in April, we received our DORE export license from the Bank of Papua New Guinea. First gold DORE sales occurred during the quarter. Now, with this export license granted, our gravity circuit will be ramped up, and we expect to see an improvement in overall payabilities and recoveries. So while on site in July, I inspected the new TC1000 crusher, which was recently installed and being commissioned. Now the crusher was originally planned to operate in parallel with the existing TC1000 crusher. However, with the improved performance we've seen from the crusher over the last few months, we've actually installed it as a tertiary crusher with an ability to also act as a backup secondary crusher. Now the advantage of putting it in as a tertiary crusher is it now means we can deliver a finer product to the mill and that has the potential to further drive overall plant throughput even higher. Also, while on site, was able to see the underground tele-remote system in operation. It's one of the many examples of advanced technology we're investing in K92 Goldmine. And from the video, you can see it's an advanced system with LiDAR and drive mapping. Other examples on site include the jumbles with Autodrill. And we're also in the process of setting up our underground Wi-Fi system, which will enable detailed real-time tracking of our mobile plant and personnel. On the twin incline, the furthest incline has now advanced 1.4 kilometres by the end of July, and the performance of the development crew has been extremely strong over 2022, with the twin incline advance exceeding budget by about 38%. You may recall the twin incline has been oversized, capable of handling up to and perhaps beyond 5 million tonnes per annum with conveyors, enabling the infrastructure to meet expansions well beyond stage three. On exploration during the quarter, drilling was underway at Cora, Cora South, Judd and Judd South. In June, we announced high-grade underground drill results at Cora and Judd. At Cora, 54 holes were reported with highlights, including 5.9 meters true thickness at 23.18 gram per ton gold equivalent and 2.64 meters at 37.38 gram per ton gold equivalent. Judd also delivering some strong results during the quarter, 62 holes, including 8.8 meters true thickness at 61.17, 5.17 meters at true thickness at 18.83 gram per ton gold equivalent. We look at Kora, Kora size vein system and look at this long section. There are three key areas for our exploration. Area one. which is drilling core size from the surface. As you can see in the long section, there's been absolutely no previous drilling along about a kilometer of strike length. Only one hole has been reported today, and that was drilled by K92 in Q1. And that recorded potentially the most significant exploration result since the discovery hole way back in 2017. The second area is drilling core size from underground. And this is expected to provide information synergies with that surface program allowing us to extend that resource at depth. Area three, the second half of the year, we plan to drill what we refer to as Cora deeps and the northern strike extension of Cora from the twin incline. Drilling of the northern extension of Cora below Aruma Fimpa recently commenced from the twin incline. On the Judd South vein system, exploration program really follows a similar plan with the distinction that the exploration along the vein system is about three years behind Cora. If you recall, we made the discovery of high grade at Judd only in Q4 2020, whereas Cora North obviously was May 2017. Drilling at Judd South from surface is underway and drilling at Judd South from underground also recently commenced and a major portion of our underground rigs are focused on drilling Judd vein system. Again, on site in July, I visited our most southern underground drill rig, the rig initially drilling Judd south, but also then targeting Cora south. You may recall that our development underground sits between the Judd and Cora vein systems. So we're drilling off to the left here, so that will be drilling into Judd. The rig changed and drilling to the right, that would then be drilling Cora. Once we've finished our initial drilling program here, that rig will be pulled out and we're going to develop this another 100 to 150 meters to the south. And again, we'll commence more of our drilling of Cora South from underground. I'm also pleased to report that our fourth surface drill rig is operating at Cora South and Judd South, as shown on the image to the left. All drill rigs are delivering strong drill meters and plans are underway to bring in a fifth rig. Now, last week, we announced a major milestone. The Maiden Blue Lake Inferred Resource, 10.8 million ounces gold equivalent or 4.7 billion pounds copper equivalent. The resource is large, has a high-grade core, is open at depth, and is the fifth largest non-porphyry in Papua New Guinea. It was defined with under 17 kilometers of drilling and less than a dollar per ounce gold equivalent. Now the long section, you can see the resource has a defined high-grade potassic core with increasing grade tenor at depth. The porphyry environment appears to be relatively well preserved, limited erosion and little evidence of faulting, which you can see by the relatively high degree of symmetry in the section. Porphyry is open at depth and we believe there's a strong expansion potential through step-out drilling. From our exploration at Blue Lake, we've gained a tremendous amount of knowledge and plan to apply it to other targets within that prospective porphyry belt. You may recall in late 2021, we flew the mobile MT Advanced Geophysics, and this confirmed several of the known porphyry targets in addition to highlighting the potential for additional targets. And we note that in Papua New Guinea, porphyries tend to cluster, and there are five targets to find near Blue Lake. Now the work clearly shows that A1 is our number one porphyry target. It has very strong conductivity response while also being situated in a very prospective geological environment. Essentially it's believed to be the main heat source for the high-grade Cora, Judd, Maniapi, Atacompa deposits. Additionally, from field mapping, Blue Lake A1 and IANA are within the same large lithocamp, indicating the potential for additional porphyries in between. We plan to commence a comprehensive soil program imminently followed by a detailed drill program for A1. So with that, operator, we'd like to commence the Q&A session. Thank you.

Thank you. We will now begin the question and answer session. To join the question queue, you may press star then one on your telephone keypad. You will hear a tone acknowledging your request. If you're using a speakerphone, please pick up your handset before pressing any keys. To withdraw your question, please press star then two. We will pause for a moment as callers join the queue. The first question is from Obais Habib from Scotiabank. Please go ahead.

Thanks, operator. Hi, John and K92 team. John, great to see mining rates steadily picking up. So just on that, based on guidance, production in the second half is expected to be stronger in the second half. And also with the 2022 year-to-date oil sustaining costs of around $8.38 per ounce, the reiterated guidance implies ASIC of around $942 per ounce in the second half to meet the bottom end of our guidance. So John, are you just being conservative in regarding to the cost guidance, or is there a catch-up planned in the second half?

Oh, thanks, Vivek. Yes, I mean, the one area where we haven't done as well as we've wanted to is in our development. And as you know, we're looking to expand into the 2A, and then that's immediately rolling into what we call our Stage 3. So certainly the intent is that there will be a significant increase in the development that we're doing, which doesn't come into necessarily cash costs. It will come into your own sustaining cost.

Okay, sounds good. And just kind of moving into the elections in PNG, and maybe if you can give us some color on your expectation on timing of the mining lease renewal as well,

Okay, so in terms of the election, Basically, the incumbent government under Merapi was returned, so Pierre Merapi's party actually got the most number of seats in the election. As always, there was no one dominant party, so the new government is still a coalition, but it's a coalition led by the party of Pierre Merapi. PM James Merapi. Also, as we normally see in P&G, there was a high percentage of turnover of MPs, not quite 50%, which is the normal, a bit less than normal, but nevertheless a significant turnover in MPs. And that included our local member and the mining minister. So certainly there's been a number of changes around. The new government in terms of the ministries have not yet been announced. We expect them to be announced in the coming week. I'm actually heading into P&G this week, and that will be for meetings with our new local MP, our governor of the state, sorry, the province of Eastern Ireland's province, as well as with the new ministers as they are appointed. And then as the Chamber, we have a day where the Chamber of Mining and Oil and Gas, we go in and we give a briefing in Parliament to the new Parliament on the industry and what we're doing, et cetera, et cetera. So that will be occurring next week. um so it'll be uh back to business i think obviously for uh for the government and they've uh they've certainly flagged that uh oil and gas and mining are the two uh the two key industries for them and really are the driver for the economy recovering after after covet In terms of the renewal of our ML, we've put in the application to have that renewal done early. It's actually not due until October 24, but we're looking to have it renewed hopefully by the end of this year. And certainly that's our anticipation at this point in time is that we should get renewal by the end of the year. I met with the MD of the MRA a couple of weeks back when I was in country, and he certainly indicated that from their perspective, they're pushing our renewal along. And that was a realistic expectation.

Thanks. That's a great call, John. Thank you.

The next question is from John DeMarco from National Bank Financial. Please go ahead.

Thank you, operator, and good morning, John and team. So I see that year-to-date, H1, you got 42% of the production guidance midpoint delivered, and you reiterated guidance, which is great. Yet the guidance range is somewhat wide. It's 115,000 to 140,000 ounces gold equivalent. Can you give us an indication about where you might expect to fall within that broad range?

Okay. Yeah, look, thanks for that, Don. Yeah, look, I mean, it is wide. It was deliberately wide basically because of all the uncertainties coming into the year, which included all of the impacts that we've seen from COVID. COVID, and quite a number of those are ongoing, as I think you'd be very aware from other companies. And that includes supply chain issues. We've continued to increase our stocks on site month by month. And in part, that's obviously because we're We're looking at our expansion of production, but it's also because we're trying to ameliorate against the issues of supply chain. And those can have an impact. And one of the areas that we've also flagged is in relation to a mobile plant where we've received additional mobile plant in loader, twin boom, jumbo, truck. But all of those were months later than the supplier had originally committed to. And so all of those have had an impact in terms of our ramp up, especially in the development area. And that in turn has also meant that we haven't had as much flexibility as we would like, for instance, in some of our stop scheduling. So these things can impact you, not necessarily in reducing perhaps the tons that you treat, and we're actually running a little bit ahead of the tons that we're going to treat, but certainly in terms of where you can mine and what have you. And so it's a combination of those things that really had us giving a relatively wide guidance. I would certainly say it will be a challenge to get to the top end of that guidance. And so we would certainly expect that we're more likely to be in the mid-range than we are to be above that.

Okay, great.

Which is sort of hedging it, I know.

Yeah, yeah. Okay, well, that's good. I mean, it sounds like directionally it's going to be higher than what you delivered in H1. And Q2, we saw grades just over 7 grams per ton. You hit a low-grade sequence at the end of the year. Encouraging to see you've got higher-grade stopes in the back half. What does this mean? I mean, does it mean going back to 9 or 10 grams per ton? We've seen that before in previous quarters.

Yeah. Certainly the mine schedule has us moving up to higher grades than we've had in the first half of the year. That's certainly our expectation.

Okay, we can leave it at that. And just as a final question, looking at Blue Lake, so you've only got 26 holes in this and yet you've got almost 11 million ounces. How many rigs are running on this and are you targeting the high grade potassic core at this point? Are you drilling below the list of caps? Seems like there's a number of targets. And are you increasing the priority of this target given the maiden inferred resource?

Currently, we actually have no rigs drilling at Blue Lake. We finished the program and then undertook the modeling exercise, the outcome of which you've seen using an independent consultant. At this point in time, we've got four rigs on surface. All of the four rigs are drilling in the in the Cora and Judd-Syth area, the first 500 meters of strike length along from the mining lease. And they're certainly scheduled to be in that area for the balance of the year. I'd make the point, however, that that area potentially includes some drilling at A1. So, you would have seen from the release that we put out, that effectively, our modeling suggests that Blue Lake, A1, and Several of the other porphyries are all sort of part of a swarm and certainly part of a lithocap. There's a lithocap that covers quite a number of those. The geological interpretation is that the A1 porphyry would be our number one target and that certainly is where we intend at this point in time to put our next drill holes in. We still see Blue Lake as having very significant potential at depth, and it's clearly open at depth, and that's been shown in the modeling. We think A1 has the potential to be more attractive. It certainly appears to be the heat source for Maniapi, Atacompa, Cora, Judd. And while the overall system clearly has a massive endowment in terms of metal, we're looking at that as perhaps being the core, if you like.

Okay. Okay, John. Well, thanks so much for that additional call. I appreciate it. And good luck with the second half. That's all for me.

Thanks, John.

The next question is from Colvard Gill from TD Securities. Please go ahead.

Thank you, operator, and hello, John and team. I have a quick question here regarding the feasibility of the NPEA that you mentioned on today's call. Can you remind me if you're releasing both of those separately or concurrently?

OK, so the DFS on the 1.2 million ton per annum project incorporates within it a scenario where we are looking to expand production about two years in from when we first commissioned the 1.2 million ton. So the 1.2 million ton plant, we're looking at commissioning in the third quarter of 2024. And then we're looking to continue to expand our underground operations with the aim of bringing the existing Stage 2A plant back online in 2026. So you go 1.2 million tons in 2024, and then you step it up to about 1.7 million tons in 2026. And that is incorporated within a single report. So it'll all come out concurrently.

Okay, great. That was all for me. Thank you.

Thanks, Tom.

The next question is from Andrew Mikutuk from BMO Capital Markets. Please go ahead.

Yeah, I saw myself muted there. John, thanks for taking my questions. All kinds of good questions asked already. I just have one quick one to close my thoughts. This blue-legged resource obviously was a bit of a halo large resource, and you already stated that you're looking for the higher-grade feeders. Can you give us some sense of what you think, what kind of grades or maybe grades... linked with tonnages become material or maybe even more simply interesting to you to pursue?

Whoa. That's a toughie. The reality is that what we've seen at Blue Lake is certainly interesting to pursue. And if we had absolutely nothing else on the table, we'd be pursuing it with another drilling program commencing shortly. The reality is that we believe that Blue Lake offers, sorry, A1 offers a higher potential opportunity, I think would be the term. Certainly from our view, the amount of answers that have been shown in Blue Lake are certainly sufficient for us in terms of looking at a porphyry type development. However, in terms of grade, I think in the in the ideal world, if we were looking at something like something at A1, which is directly along strike from Cora and Judd would be looking, I think, for something around a gram plus in terms of upgrade gold equivalent. It's interesting. It's a one-to-one ratio. If you look at Wharfie Gold Prove, that's also a one-to-one ratio. Generally speaking, porphyries and PNG tend to have relatively high gold. I guess we're fairly bullish both on gold price and especially on copper price going forward. And we'd certainly be keen to see that sort of ratio continuing in anything we're looking at. But of course, as you know, I mean, it's a combination of grade and tons that drive commerciality. And what we do, what I believe we have shown is that this is a really large system. And it has shown already that it has a very significant endowment of metal. And we really haven't yet put a hole into what we would consider to be the core, if you like, of that whole system. So this is really, really early days in terms of porphyry exploration. As was stated, we've only drilled 26 holes so far. And several of those were just shallow holes, just trying to understand the initial geology. So it's really early days. I think it's incredibly exciting actually what our exploration people have already defined, bearing in mind that that despite the fact that there's been 30 years of exploration around quite a bit of this area, Blue Lake was a greenfield discovery by our own exploration people getting out on the ground. And yet it's only three kilometers from the mining lease. So huge potential still to be evaluated. It's going to take us many years. So yeah, we plan on being the biggest explorer in PNG for the foreseeable future, I think.

No, fair answer. Thank you, John. Thanks, Andrew.

Once again, if you have a question, please press star, then one. The next question is from Chris Thompson from PI Financial. Please go ahead.

Good morning, John. Good morning, K92 team. Thanks for taking my questions. A lot of good questions have been already asked. But just a quick one or two. John, could you just comment on assay turnaround? Any concerns there? I mean, obviously, you've got a whack load of drilling on the books being planned.

Okay. So our assays are all done at an onsite laboratory, which is run by Intertech. So it's a contract laboratory. It is an accredited laboratory, but it is dedicated only to K92. Secondly, as part of the expansions that we've been doing on site for the last two and a half, three years, which I think some analysts are going to be able to see in October, that has included expanding the laboratory, the assay lab, where we're actually expanding sample prep, fire assay, etc etc and so generally speaking we're talking about just with some of our exploration you know maybe a week or two weeks to get to get turnaround simply because we've got ten weeks operating right now and and I'm happy to say that the the average meters that we're getting out of the weeks has been improving So, that's our, I guess, our one challenge. But yeah, we've moved to double shift, and as I say, we've expanded the laboratory so that we can keep our turnarounds down.

Great. Thanks, John. And then the final question, I guess, is on COVID. Is this maybe just a comment a little bit about COVID in the country at the moment? Any concerns in the future or is it just somewhat waning in severity?

Yeah, COVID. Well, right now... In April, we stopped doing our quarantining for nationals arriving on site. We'd already stopped it for certain, but we stopped it also for nationals in April. And apart from a couple of cases, very limited cases, we've had no COVID on site. No COVID on site. And we're still doing testing when people arrive and all the rest of it, and we're seeing almost nobody presenting with COVID at this point in time. During my last visit to P&G, which was just a couple of weeks back, just prior to DIGIS, There's almost no COVID present anywhere in the country. The last serious wave was the original Omicron wave, which came through in February, March, and that significantly impacted parts of the industry. It did impact us in terms of absenteeism. It didn't really impact us in terms of COVID onsite because we were still running quarantining at that point in time, so we were largely able to maintain a COVID-free site. Yeah, in terms of what does that mean going forward? Absolutely no idea. I think we continue to monitor it. This, what do they call it, BA4, BA5 hasn't really shown itself in PNG in any significant way whatsoever. And of course, PNG, you don't get that sort of, that winter environment where the suggestion appears to be. Certainly we've seen it in Australia in winter where we've had a pickup in COVID in Australia. And I believe that the concern is that they'll see it in the northern hemisphere in the coming winter. We don't really have a winter per se in PNG, so we don't have that additional sort of challenge. So right now, we're in a pretty good space in terms of COVID.

Great. Thank you, John. Congratulations. Thanks.

Thanks, Ian.

There are no further questions. I would like to turn the conference back over to John Lewin, CEO and Director, for any closing remarks.

Thank you for that. Well, thanks everyone for attending this and thanks for your questions today. For us, the second quarter, in many ways, has been the one that operationally we have been most satisfied with. why because when we look at the physicals that we've been able to achieve on site we've actually taken this operation beyond our stage two expansion and we're we're already halfway to achieving our stage 2a expansion even though we have not completed the installation of the the plant that we need in the process plant and we don't have all the mobile plant that we we're planning to have to be able to achieve that stage two way. And so from that perspective, this has been a really, really good quarter for us. The same time we've been able to ramp up our exploration and by the end of the quarter have 10 weeks on site and be pushing record meters in terms of our exploration as well. You add to that the ongoing capital work that's being done on site with the new workshop at the portal area, our twin incline being over 30% ahead of budget year to date. Expansion, as I mentioned, of the assay lab of the camp progressing strongly with the lifting of the tailings dam. A huge amount of work is happening at site. We're expanding our workforce. We've been able to attract really good quality people, both national and expat. And we're seeing the outputs of that and we're really pleased with where we are. But at the same time, we recognize we've got a heck of a long way to go, major expansion coming up. and covering so many areas. So I feel like we've achieved a lot, but we also feel that we've got a long, long way to go. And that's what makes it so exciting for us both operationally and from an exploration perspective, and we are looking forward to being able to once again host some analysts on site and enable some people to see firsthand what's been achieved over the last two very, very challenging years. So I'd like to acknowledge our operations team and our exploration team for the phenomenal work that they've been doing all during COVID. But this last quarter, I think our operations team and our exploration team have got to be extremely, extremely pleased with what they've achieved. And we're certainly very proud of what those people have achieved. Thanks to our team. Thanks to everyone for dialing in on this. And we look forward to the next quarter, as they say. Thanks very much. Bana.

This concludes today's conference call. You may disconnect your lines. Thank you for participating and have a pleasant day.