Q1 2020 Earnings Call
Thousand in 20 <unk> earnings Conference call.
I'd now like turn the call over to Mr., Clive Johnson, President and CEO you May proceed Mr. Johnson.
Thank you all there definitely want to the garbage call today to discuss the first quarter 2020 financial results for beat you Golden shoppers.
Just a few introductory words.
Well good like cinnamon, there's going to walk you through are the result of financial results go Lydalls Gonna come Onstream do filtration just give lumpy.
Trumpeting operationally and.
Kerrigan's going to come on and told you little bit about what we're doing exploration Jersey. You are we had an actual cool very strong quarter again.
Good.
Oh production gold revenue cash flows and record low cash operating costs.
$67.
So we're very happy with the quarter.
Obviously, we're in challenging times these days with the in the world might impact of the.
Well the corporate might change virus.
We continue to operate extremely well through the chime in I do like to tickets due impart to get jumping on.
There are jumping on the serious or sort of ours very early on in Vancouver, and oversight small she'd like to making sure because of the experience of our team that are great teams at the mine should have many years and years of experience and managing through good times and bad we've done a very good job and partly because of that we are maintaining.
Our guidance for 2020, well in terms of strategy going forward, it's gonna be very much the same first and foremost.
I hope to see if youve our people deserve it was our Paramount concern and always have dropped 30.
The others is to maximize continues relax measure.
Fuel gold production and looking into our pipeline for girls <unk>.
Bill about the expansion.
The so called the mill and the New fleet. That's just that's come on Green shoots coming out very successfully launch scheduled to meet the.
Expansion.
At the mill by this important well this year Oh, so when we look in the pipeline the opportunities narrow grammar watching which we'll talk about getting back on track their drilling and a feasibility studies. It looks the we'll we're looking for the first quarter 2000.
21, though the habit download bottle PK study.
We are low so of course in the pipeline seems like expiration, which Tom will talk a little bit about about looking to a 20 clubbers nor said that that should go up the other called area and then B T credible three which is fairly close to.
The the cause of itself the trickle deposit so.
That's really where we are strategically and the especially population or gotten generates tremendous for that constraint seeing or debt reduction continue.
No we're confident that's what our collections to double the dividend.
We just announced yesterday as well, we don't know pass it over to make cinnamon and deal should be an update as I said another at the end of it all we'll open up for questions or do you like.
Thanks, Mike.
The.
I can can you hear me okay.
Okay.
Yep.
Well as close as very gets recorded and I'm quite sure Records a result stuck with comments on.
Fortunately in the revenue side.
Revenue for the quarter was 380 million.
Orderly Rockwood on sales, it's running 39000 ounces and realized an average price of just on the 15 didn't like the books now.
Which considerably higher obviously, even the price we budgeted Virginia catch interesting.
Also contributing to the increase against budget was we had approximately 5% more ounces sold in the period than anticipated.
Moving to production production from continuing operations was 251000 ounces and that was 17000, which is hard to budget, mainly led by some color. If you I do not sure.
34% attributable sure.
Clubbers Nicaraguan production, that's 14000 ounces or total gold production was 265000 ounces, which is another quarterly production record for the company.
Coming to calibrate number we originally when we push towards production beliefs.
We had asked him to recalibrate production at 12000 ounces, but they subsequently issued their production results. So it was actually 14, so for 2000 ounces higher than than total production then released.
Three weeks ago.
Just a common somebody individual components of that support led the charge ethical had 164000 ounces, which was for 2000 ounces ahead of budget.
It's it's a change of the several factors it mainly to the higher than budgeted grade mine phase for the past. We also had some of the expansion fleet onsite early in the quarter and that their commission drillings, we had the benefit of that.
As the everyone's aware you know this is your Restitching expansion plan, which included optimization because designs in the mine plan and actually going after I agree.
In general than originally on the original feasibility study.
Point to no I think is that given what was going on in the world and the public related.
Risks that were being experienced a run the world, we decided to temporarily mine hardware do they slated for coal a pit.
No. The idea was to supplement the ore stockpiles are just Justin taste, we ever find yourselves. How did you don't your stock problem scenario for the good news as we continue to run very well, that's a cool and cycle. The other sites like break through the quarter right through the initial impact sometimes I'm a.
Big builds going to conduct the in a bit more diplomat later after the financial up there.
Just moments mismatched, even study had 45000 ounces just just still beat budget by ourselves now says, but pretty much on budget.
And.
That was achieved even though we did lower than budgeted keep what it did well and lower mining activity than me, we budgeted we at higher than budgeted cost it puts us grade and recovery.
That's really a function of the timing of get again.
To Montana <unk>, we had we had budgeted to be in Montana away from the started the year Watson checking didnt, we didn't get in a until early twenties February 2020, I'm spending we focus more on me and we have better ore grade that are oxide ore tonnage and total replenish the main being on them as model.
Not resulted in higher than budget agreement.
Gross Dakota 42000 ounces 2000 ounces ahead of budget just it just a solid quarter, Georgia photo.
Higher than last year, not that's the US a function of us being and has made or in the world shaping the first quarter 2020, we didnt get into will shake last year until the second I figure.
So overall, a 251000 ounces from our three operating mines and 265000 totaling says there's several records for the company.
You talked a little bit about costs now so on a consolidated basis, a total costs from all operations, including.
Oh sure caliber $399 an ounce.
If you look at the cash bonds from our three operating mines that we control 367.
Dollars, an ounce and that's a record low consolidated cash cost of institutionally company.
I am honored brown, so that was $382 things.
Again, if you look at the dig into the components of that it was led by some color. So cool had a quarterly record low for each operation of $251 French produce for $286 price, so well below budget by approximately $40 names.
That's that's predominantly people that was due to higher gold production fight production and the same overall costs. That's a lower cost range I should comment maybe just one comment on fuel. That's good color. We have seen obviously the global fuel prices decline.
We didn't experience overall fuel price declines at some coal yet we're starting to see them come down now and sort of near some of that the wider crude price points, but just it's just simply anyway that is the in Mali. The government starts to place the snow Ah ones one Superman in advance and also in West Africa.
There's there's a certain fixed price components to fuel Joe has to be brought in monthly reporting their kids to car and then it shifts through one continuing over another borger into Molly and it. So it had so that's what components and bag that's for the past and the other thing that we do what you typically keep twod almost three months.
Fuel inventory on site and on hand, so we built up there was still inventories during the fourth quarter 2019, one cost a bit higher and we've been drawing those tax down in Q1 is we utilized up jewel.
So overall fuel cost didn't we didn't see expensed decline in fuel costs in in Mali for the quarter. You said they were slightly higher than budget, but we are starting to see that is fuel costs drop as we move forward.
The study cost around $722, an ounce again significantly under budget was just over 60 Bucks an ounce.
Favorably budget variances were a function and cost savings because of lower my 20, something what last question Wes waste stripping activity.
And also the temporary suspension of mining activities later in March when we had to shut down for a week or so I do to disruptions in the fuel supply cost like over 19.
As we announced that he had the we have the fleet up and running again very quickly interestingly shutdown, we didn't didn't see smelling operations only mining activity and you've Gotta go up Im wondering again very quickly and their minds open them again, though.
We also did she decided we saw lower than budgeted. She will close is axle unit prices the they flow through quicker to let's say.
And she totaled 441 Bucks, an ounce, which again $64 under budget margin you have production than budgeted. It really it says the lower costs are a function of lower fuel costs are both season, which it's all lower reagent costs and a weaker than budgeted the million dollar.
We saw the Iran plummet.
In in March and then maybe a dollar followed we probably in foreign exchange saving of somewhere around $2 million just for labor in much stoops about deploying.
The currency.
And just to comment on all in sustaining cost $721, an ounce consolidated 695 remarks, we operating mines and 721. If you include our sure our rest of miniature calendars cost.
And from our point of view, our operating mines were $110, an ounce lower than budgeted and that's that's a function of the lower cash cost per ounce approximately $50 and then really the other component is a timing of capital expenditures, we didn't see some significant capital capital expenditure on.
Bridges at several of the sites.
And also slightly lower exploration costs than anticipated Jude.
The accessibility someplace later in March but for the year, we expect those sort of others and overall just to comment on Capex generally for the year, we were still budgeting the full capex that we've seen.
The total year, we haven't changed your guidance are catching it won't be there.
Let me tell me thing on overall guidance production guidance, we had guided I'm going to 955, so maybe guidance for the year and that includes our true culture caliber and 45.
50000 ounces 45000 50000 ounces.
And caliber announced late in March the big suspended operations in Nicaragua to actively managed show any covert 19 related issues, there and it's not really isnt clear at this point Wayne when I'm not ready now to meet come back up and running again.
However.
Given that were 14000 ounces ahead, I'd say 70000 ounces from our own minds after already in Q1.
We retain your consulting production guidance, such as we think will cover any shortfall that might kind of calendar is not able to get its operations up and running.
In the near term.
And on the cash costs and all in sustaining what's your mind <unk>.
We are continuing the same guidance for 15 before 55.
Dollars.
Branch cash Pos and Seveneighty, they 20, <unk> all in sustaining cost.
Couple of comments, maybe on on the operations overall, that's a cold expansion is going well and build I think after after the segment builds going to give you a bit more detail not so I'll leave it to them to give you the.
Overall picture also for coal solar we did we did announce that we were slowing down the solar we temporarily halted.
Yeah the activity there just to allow us to.
To better looking elsewhere on the covert related shift changes and people management, that's equivalent so that is temporarily suspended but.
We expect that once we started to gain will be able to have that up and running isn't completed within six months you've started again.
Or decoder just reminding the board has approved the developing them Wolfshag underground mats portable goldman's expected in Q3 2020.
Ah grammar Watsi those going to give me an update on where we are there, but just just to comment here that we had an obligation to sold 113.9 million in order to earn a way back to 50 50 in the joint venture and to maintain our position as manager and by the end of quarter. One we read so wanted to 12.7 million for almost back to that.
We've almost that you've got 13.9 million so funding amount, but ended the quarter.
And maybe just a general climbed to one fuel hedging we kinda two questions on that and Oh hedging. We've always had you'll hit was certainly for the last few years before the fuel hedging program.
Our goal is typically you have 60% of one one years usage hedged out and then 25% of the following 12 months.
Everybody hedges.
We ended the quarter, we had approximately 40% club or one year total hedged and 20% next 12 months, who subsequently subsequent to the quarter end you touched the updated that we put on more physicians and now we're we're up to our target 50 to 125 for them at 50% for the first year in 25 cents for the next.
We didn't have a.
We did put a bunch of hedges on we obviously started the year with someone play. So you will see on the income statement, there's an unrealized mark to market lots of 14 million image majority of that is fuel.
Some of those hedges that we put on.
In earlier periods, where it had played the decline, let's just overall because our hedging goal is to never be more than 50% I would never be silks results enough benefiting from fuel.
Contractual price declines.
Okay. Just couple of comments, maybe on the income statement, you see interest and finance expense a significantly or this year than last and that's a function of us having paid though 200 million in Dallas, you're going to be for this year.
We did announce.
Earlier in early April up we had as a preemptive merger drawn down 250 million on our revolver.
That's money that was purely for passionately about his money that you don't need.
Now for operations or we don't have intended for any other purpose right now it was just precaution given this sort of economic environment that we saw around the world.
And so we'll see.
And all that money was just reinvested.
Sitting there it is our intention overall is going to move through the year.
To keep monitoring that cash position and we expect to be probably in that cash positive position sometime later lingering this quarter and certainly have the ability at some point during the year to be able to repay that time, if we see that's on the economic environments and settled a little bit and and there's easier.
Movement of goods and services around the world.
Also comments on the currency comes after 63 million quite a big jump off from the prior year quarter 25, that's a function of more profitable operations, especially for Cola and much higher gold prices isn't there the primary driver for that.
In that told was 47 million supposed to call. It 37 of it is for Atlantic and taxes.
And then 10 million a is the priority dividend. So that's the upset sourcing for Sun and trust, if the government Valley, Oh, and surgical operations and best reflected as a taxes through major though.
When it comes as no a few comments on Oh, sorry, maybe just a comment any P.S. too. So when you put all the results together and why we got to want to GAAP basis, We yes, seven cents, Chris you weren't on an adjusted EPS, taking on some of the lunch noncash items.
We came up to 10 cents for sure.
[noise] when the cashflow another another quarterly record to highlight a 269 or an operating type questions from operations on includes as well any working capital movements, but that equates to 21% 2021 cents for sure about Reinvestable.
A record operating cash flows and I should say as long as you.
What we saw and as a certainly later in the third and the third month or the last month for the quarter in March as individual countries were impacted by changes in airline schedules are international flights being canceled or for Ben.
It certainly gotten more difficult to ship go from sites, but we were successful at all or sites and being able to continue to do that using our own or shared charters with other companies when needed. So.
We've continued to be able to ship gold and also our refinery refiners, who run refinery in South Africa and novel Orange switching when they leave continued operations uninterrupted as well so we haven't at any overall issues and been able to ship told her on the final product and then having them to fulfill.
We've been able to take advantage of these high go crazy.
One other comment on the operating cash flow.
We guided through the year that we expected that 1500 dollar goals for the full year, we thought operating cash flows would be somewhere around 700 million. If we if we see goal. They were those right now around the 1700 dollar occur on smart for the balance of the year, we expect operating pass those to be somewhere north of 800.
The year.
Sure the comments just on on.
I'm items in the cash so so 25 million, we repaid on the revolver that was pre us do not preemptive draw up to 50 in early April and like you said is it wasn't always our intension to create helmet outstanding revolver that 200 million.
This year and we can we have for 25 drawn about preemptive drop again like we said, we do expect couldn't generate enough national that it that would be in cash that's positive territory.
By the end of the current quarter and certainly our goal would be tomorrow to listen hopefully paydown and paramount's about that later in the year.
Uh huh.
Gross.
Dividends to comment we did pay our second quarterly dividend of one cents for sure and started to be treated patients for seven dividend and quarterly dividend in the last quarter to one of them team at once and for sure. We repeated that the first quarter for cost of 10 million.
As Craig mentioned, we have announced that we're doubling.
Our quarterly dividend from 172 cents for sure U.S. and we expect.
[noise] declare the first two cents dividend later in June.
Cashman, but slow from investing activities. We spent 112 million on investing activity and I say said, we when I was discussing the all in.
<unk> for sure just any cost for sure. We have had some capex timing differences there were some capex. It wasn't okay that sites, mainly CMO infusystem overall, a good morning.
Restrict development.
And exactly and then they'd be the net impact connection. So we didnt, we didnt get those things done in Q1 is we'd originally budgeted, but we are expecting that they will happen later in the year. So really those concepts that are just timing differences to comment to that say.
As we mentioned in her news release, we entered into a deal with West African reserves, just the seller interest.
Well again deposit outflows three of them.
For total proceeds stuffs overtime of 45 million plus a small royalty.
And ER and what's I guess, we ended the period with 200, just under 208 million in cash and very healthy situation cash liquidity life's like I said and that.
Looking forward to continue strong operations from a bounce in here.
And I think that I'm going to fix these are the main items said, so I was flat in constant.
[laughter], that's right Bill can you give us a quick weren't going on.
What's happening in operations.
Yeah, how do you hear me, but I I like with paid netted out when I when he was talking.
Well, it's been static when we're talking but I'm just sort of started now but go ahead, you sound pretty pretty clear to me.
Okay. So.
Very quickly on the operations, Mike covered a lot of the stuff so I'm going to keep it relatively short.
I guess, the key takeaways that I want to speak about or our number one oh, we do continue to maintain guidance at all of our operating mines.
And our overall guidance for the year as Mike said and.
Significantly impacted our operations.
It hasn't impacted significantly impact any of our operations.
Awful.
Be to go very very early on gotten in front of the pandemic early on in February we made the decision that we were going to.
Cease all necessary all unnecessary travel and.
Have a stay at stay at home order.
Please.
And that is that is healthy enough being successful in implementing our operational requirements just going through the operation.
Epic.
After Cola in Mali, Molly has has had a restriction on the country since the since the.
Beginning of April and they they they indicated that much.
So we've been we've been able to continue to operate.
And been able to continued received.
[noise] indicated we have expedited mining in phase for so we currently have a very large stockpile to get us through not only the second quarter, but also through the second half a year.
So we continue to maintain our guidance at 600000, a 620000 ounces for the year.
On the expansion.
The expansion it is kind of three parts if it's a full enterprise expansion on the mining side. The mining fleet was ordered in June of last year June of 2019.
And at the beginning of Q1 2020 ahead of the pandemic that mining fleet has been put into operation.
And as I already noted.
We've we've advanced see the mining rate and had a very large stockpile.
Support.
And from 6 million to seven to half billion tons per annum.
That expansion continues to be on schedule.
For for completion and commissioning at the end of Q3 2020.
In addition to that we talked about doing a double.
Tailings lift.
Head of the rainy season for 2020 that project is almost finished more than 90% complete now and we anticipate that.
Sure.
You're going to 2020 that'll give us capacity.
In the 2023, so that'll give us a couple of years too.
Designing and developing next live.
Additionally, as Mike indicated the solar plant.
Was put on hold that solar plant expansion was not required to support the expansion of the mill that expansion was designed to reduce costs.
And as Mike indicated one.
[noise] bring the solar group back in and we anticipate within six months, having the solar pet solar plant completing operational.
Yeah, Mike, but they so much but the in the Philippines.
Maintaining guidance of 200 210000 ounces for this year.
The the pandemic it has hit the Philippines quite hard with more than 9000 kit.
Well shut down.
Not only international travel, but but had to stay at home or stay at home order for the entire population.
That has been we reduced our lifted a little bit now itself.
Uh huh as they bring.
The economy backup the island of my but they is as it does not have any cases of covert 19 and so there.
That's a bringing our workers back from from their self warranty.
And getting back to full strength. Our plan is we're currently mining in both the main vein and but the Montana pit and mining at full strength. So we're not changing guidance here for this year as well.
And what's your Cotto, what's your go to.
Early on decided to too.
Isolate the country.
Uh huh.
The issues related to the population.
Our living living in.
In formal settlement with no power in the water.
So they went ahead and did a did that corn team for the.
City event took in that region as well as all of the coast region, where most of the population is located that has been very successful to date, there's less than 20 cases in Namibia reported.
And based on that at.
Last month.
If the government decided to start really start to release somebody restrictions and the corn team and so the otjikoto minus currently in the process of a of ramping back up to full production on the mining side.
So there once again, we maintained guidance for the year and.
And do not see any lapping issues related to covert 19.
At this time.
And just.
I'm a lumpy so Greg.
As.
We announced that when the pandemic broke out that.
We decided in consultation with both the community and the government.
Despite the fact that we were allowed to continue to operate we made the decision to.
Temporarily suspend exploration.
The process. There is we were supposed to complete a feasibility study by the end of Twentytwenty and then.
Make a decision in early 2021 with angle goal.
We publicly announced that that would be delayed until the end of Q1 2021 completion of the feasibility study.
So and that's due to the fact that we suspended the drilling but in the meantime, we have continued to develop a the feasibility study the metallurgy metallurgical testing has been ongoing Oh, we're getting ready to do some work.
With our with our feasibility engineer or our mill engineer.
And.
Mine the mining had been the binding design has been ongoing.
So on the engineering side, we continue.
On schedule.
And we anticipate within six months six months of us getting back up to full speed that we'll be able to.
They live in resource into the engineering group so.
Maybe sometime in the first quarter, maybe a little bit sooner, we're seeing what the schedule will be once when for drilling gets up and running.
Like I say it for me, it's really it's hit and Miss on what I'm, saying, because I can hear a bunch of background noise.
Youre exotic just for your cutting out of that are you done.
Yeah, I've got stuff. If there were granted you wanted me to.
Okay. No I think that's good don't think stepped in just one thing I would add the way that could match of the permanent but I think one of the keys whatever reasons first success and dealing with.
With little bit and and the.
Continuing so well under operations as is our relationships with our employees and government you know I think that we pride ourselves there when those on our culture and with respect and transparency in the maybe treat people and I think at times like this the easy mutual Trust Weve earned engaged with our employees and the government's which we work really comes to the forefront. So it's a great Corporation or.
Always has been amazing and a they watch works the unions and our employees water to keep working if they could be safe and the governments in the countries where in wanted those to keep working if we could be safe we have a hadn't occurred in the past or critic we're talking about political risk in the areas that we are in the world.
I understand that but I think it's important to point out that.
Where's your some positive things could be in countries that once you would be there and they want the tax revenue when they want the good jobs, if it could be safe and if you take care of the environment and if you're socially responsible I'm going to the right things and deliver the problems as you make so sort of the flipside of political risk. Sometimes is the fact could be centric world that you're very important part of the account.
To me and your important part socially and environmentally and what's happening and I think that's the case for B to go. So I think a lot of our success on the in their normal tribes just use out of our success in terms of crisis. The crisis management comes from a vast experience in doing this around the world for years, the customer relationships you ever people the government's where we are locally.
Do we trust us.
We build trust relationship both ways with them on our employees have a high level of trust the girls looking out for their interest. So I think those are some of the keys to our success now lets you could probably gives a quick update on what's happening in terms of exploration. You know we continue to successfully explore around our minds and they're looking for major discoveries. The cheapest ounces are always so once you find the we've done a lot about.
No that continues or would you talk.
Thank you type things and year over here, we all read.
Okay, well [laughter]. Okay. Because you are afternoon are good morning, everybody exploration or could be two as continued on that a at the mine sites that are not only must body in north Dakota through this time. He a lot of her grassroots exploration has been cut back to minimally.
It would work or none at all due to limitations created by Kobe, but we hope.
To get back going in some of those areas Oh later on in the summer.
In terms of a expiration to mass body, we've drilled 7000 meters at over 25000 meter program. So far the focus of the program has been on drilling a near the basic pits as as we see that it's had a great potential to get larger with a higher gold prices are continue iron ore prices so referrals.
Moving on the bottom mills, because there is.
Now to old your quota we've drilled 4000 meters are those 14000 budget. The focus in North Dakota was has been to drill down to one.
On 'em Wolfshag now as we're looking at the underground development coming into the area, we want to see what it looks like going down we've had success so far.
Turning to mineralization and now we want to get a better handle on grain with tighter space drilling well. So this is grassroots drilling.
The mine site on several other parallel that's because we see have potential.
But at a Cola exploration has continued entre these times.
So far this year, we've drilled a.
5000 meters.
Oh, sorry, 10000 meters, the diamond drilling over 24000 meters RC drilling.
Uh huh.
Cool area focus has been mainly on two areas Mumbai area to the north and there is really related parallel structures are down upon data and then we started to focus lot more Cardinal area. In fact, we're shifting our exploration focus for summer exploration focus.
To the Cardinal area currently or is it just a little bit west of.
For coal at that time within 500 meters are difficult to pet in fact.
That was originally planned for some waste area, we've had quite a bit of good success in that area and are starting to a decline of resource <unk> refocusing the drilling in that area with infield drilling in testing out where the edges of this is to see how big it can get that'll continue for the rest here, but we will continue with at least Oh, one or two.
Those are the Maberry also we also plan to start doing some met testing on the cardinal or and in the near future.
I have no other discussion or where do you plan.
[noise] they bring sorry, Okay, I think operator, we'll open it up for questions now.
Thank you as a reminder.
Question do we need to press star one on your telephone case, though we currently have yeah, Oh with a bad but Jordi Mark Kris Thompson, Josh Wolfson, Kerry Macquarie and Lawson Winder.
Who is it your main line and you're on the main line.
Hello.
Hello.
How about you what were open up for questions repeatable.
And your first question comes from a virus hobby.
Yeah.
I like can you hear me.
Sure of ours, you, obviously don't.
Good.
Okay I, everyone. A again just wanted to say congrats on a.
Good quarter, a and also congrats on being able to maintain your guidance doing beside Unprecedent times.
Look like just my first question is on the cooled off five how should we be looking at the call a in the second half in terms of production and cost I mean, you got a mill expansion kicking in in Q3 yards and then though Q3.
And you do you expect a this high grade.
It's four to continue into the second half as well.
Yes.
No I don't think so I'm going to pass it over to Bill.
Yeah, No Oh, they said basically the whole concept. This as we pulled ounces forward to make sure that we work that we had the ounces for Q3 Q4. So at this time, where we're not comfortable in saying that we're going to continue the great through Q3 in Q4 that wed like to say that work.
Beat guidance at this time until we know what's going to happen with the mill expansion.
Okay and until I mean, what I'm trying to asking is like I mean is that kind of show grapes backlog that you guys have one side that you guys can blend to win in through three in Q4 was it just continuing to go through phase four and then interest rates fight.
Oh, Yeah, there's a lot of a great stockpiling thing.
Okay. So just a just a moving on to must spotty, a though you know obviously the oxides. It must not a you know I think we've talked about in the past that there was supposed to ended and.
2017, and you guys have continued to mine excuse oxides into this quarter.
Are these transition and ounces that have turned into oxide.
Or or where we're not tested that is oxides and then you expect these oxide continue into the second half.
[noise], though there's a yeah. There's a question the day. The answer is yes. There are some transition oxides, which have turned into oxide, but a lot of it is is that we're fighting through surface dumps and some of the stock works from some of the old underground, which had been back filled with material. It's now can basically considered.
Sure.
And so.
I can't answer that you know going forward, if it's something that we continue to look at what I will tell you is that that somebody does come up as a surprise.
As upside and that we continue to hold our guidance.
Got it okay, Okay, guys I'll leave it up here and pass it onto others. Thank again [laughter] specialties.
Your next question comes from Jordi Mark.
Good day goes.
On the.
Yeah, maybe some.
We have since its held.
And the consensus cotton, though it's no idea.
Andreas you did mention I was like that it was way for more.
This is Phil I suddenly utilization.
[noise] quoted to you.
[noise] that Tom you kind of break it up there I think I got because you're scared about cardinal asking about Cardinal called me I'm coming up.
I I couldn't hear Georgia, very well, but in general Cardinal is is it is it's slightly different from.
From a couple its whole should within.
A combination of die rights and I guess, you called black channels.
And they are much guidance you know zones.
Multiple zones.
She made it very intense alteration disseminated snow flies, a little bit of copper and occasionally some of the visible gold.
They're different definitely different styles zone, there more shares on related however.
It's been pretty widespread drilled so far so we're still learning about it.
It was that your questions already I couldn't hear me very well.
Yeah that was thank you.
And maybe sort of tolling for for Bill in terms of.
The coal mining fleet and mining fleet capacity.
As you have today.
Any any thoughts in terms of changing materially capacity gold price, where it is changing the effective strip ratios stopped falling strategies given your.
Your bonding capacity that you instituted.
[noise] I didn't get that question at all.
Of course.
That's right Oh, yes, we have I might just brought these out now we can we can take.
Yeah, maybe you've got your bigger driver.
[noise] that's sector.
Operator.
Your next question comes from Chris Thompson.
Hi, good good morning, guys, congratulations on absolutely stellar quarter.
As I said, it's really good you guys are holding cost guidance through a through a tough period.
Just one question I guess it relates to the snake deposits, obviously within within reach of for color that can you give us a sense of where we sit by way of the testing of the economics of these deposits.
Well I guess how I.
I guess I would say that Chris the where we're looking at the softer late you know there. So I was either I was not something that resource a little over grandmother separately, but just not gotten quite a bit bigger. It appears we are getting bigger and now we've been getting some very nice hits and the lower the leases you know when the so for those that member or conduct.
Right now we are waiting to see up because she has to be Frank. So I think we would be too too is this additional feed down the road for Coca Cola sometime in the mill was 20 kilometers away as you know or is this a standalone scenario. So we're really giving Tom the build the here at the time to aggressively drew.
All these these multiple targets we've seen in the sulfides now and find out one how big does a separate Geffen secondly are we looking at potentially significant deposit in the sulfide ore deposits in this whole foods as well so I would think that as we go through the end of the year and into next year, probably going to start getting a bit of a better handle I would you agree with you sit up here to say Tom.
Yes, hi that so that's pretty good.
If I could add to that.
[laughter], we've had multiple when it's done in the Salt life, It's certainly a mom, but we've now seen in these two very good looking continues zones of mineralization there have a shallow one.
We're working on Counterproposals and with the drilling that we're doing on satellite we continue to find other areas a satellite.
[laughter] I would say, it's still early stage and as I said.
They've given us the chance to try and figure out where it's going to how big it all goes going before I hand, it over time the resources to the engineers.
Great guys. Just one quick question, maybe just on Mezz Betty.
Give us a sense of sort of steady state run weights.
Split between maintain and Montana.
No.
[noise] steady state well if you were kind of change is that right now because you know originally we were projected to be into main or into Montana in February and now we've gotten in there now and so we're actually looking at that right now so I wouldn't want to come right out, let's say what I'd.
I think the statistic, what's gonna be for the rest of year until we get our revised mine plant up and running.
Okay got it thanks a lot.
It appears to exercise.
Your next question comes from Josh Wolfson.
[noise] [noise]. Thank you.
Just a quick question.
[noise] born here Josh line.
Yeah, I can you hear me.
You cut out a bit they'll go again.
Okay.
We seem to loss Josh.
Yes, Hello, everybody, let's say in Mclean here, obviously, having a tough time into line. If anyone has any questions that didn't get through please email directly to me and I'll I'll point, you to the right direction knows that people, who can answer that for you.
[noise] anymore Carson proper.
Your next question comes from Kerry Macquarie.
Hi can you guys hearing.
Yeah, I can hear care yeah. Okay. So maybe just another question on for color for Bill you know $251 in the quarter is there anything sort of unusual quarter that.
You should expect to reverse in later quarters, and then secondly, any color on the cost you know mining versus milling et cetera.
In terms of what you're seeing them you know productivity.
No.
And in terms or I know what is going costs.
Yeah, Yeah, well, so no I mean certainly.
We don't see anything as far as production I mean, we're basically a implement.
You know when we went a little bit faster on pace for and a little bit slower on phase five.
We see some of the capital expenditures that which were deferred in in Q1 I'd be pushed out I think that that might get our to comment on that that basically we're not.
Adjusting our capital costs down for the year, we're going to say exactly what they were going to stay on budget for that.
Okay, maybe I think the question joint he was trying to ask was in terms of the mining fleet pretty expansion at that now fully deployed and up and running.
I didn't get tech I didn't get but the question as I'm sorry.
He's asking for the money leadership is a fully believe running now the new money. Please.
Oh, Okay, no sorry, I am really struggling to here on the flying.
So the answer is no the phase one of the mining fleet is up and running.
Phase two is arriving at site right now, we actually literally within the last big Bend receiving.
The next the next batch of 60 forties and 79 trucks.
[noise] Jerry anything else.
I would now like to hand, the conference back over to Clive Johnson.
Okay, well, thanks, everybody I'm here, maybe you can talk to whoever is a ship this call up and see if so we can improve it next time reuse somebody else you can put him on the moon, we should be able to ever for new carbons cool. Okay. Thanks, everybody for a your participation.
Stacey having nice day.
[laughter].
[noise]. That's concludes todays conference call you may now disconnect.
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