Q2 2020 OceanaGold Corp Earnings Call
Ian.
Despite already flagging. This change it's important to mid point out that the current situation related to the cobot 19 virus remains fluid and may still have further impacts.
In this presentation. We will also discuss again the results of the Wahid District study Pete preliminary economic assessment.
According to the definition of a PPA. It is not intended to demonstrate viability, but rather study the potential viability of the Wahid district.
The PPA includes the inferred mineral resources that are considered to geologically speculative to have economic considerations apply to them in order to be categorized as mineral reserves further drilling evaluation and studies are required to provide any assurance of economic development case I refer you to the disclaimer.
He is on the forward looking statements in our presentation.
I will now turn the presentation over to Michael homes.
Thank you trend and good morning, good evening to wall.
Hi, everybody is staying healthy during this continued unprecedented talent.
And thanks for joining us today.
Moving on to slide three.
The second quarter was always expected to be our weakest quarter for production.
But the results also demonstrate the impact the global pandemic has had on that.
Business.
Although we originally believe we maintain our original guidance range, we've come to realize that the five way Cai I visited the cries had more of an impact in the context of the full year outlook than initially expected.
Our revised 2020 outlook reflects the direct impact on the second quarter production at my price.
As well as the flow on timing impacts to the mine grades in the fourth quarter.
As a result, we now expect consolidated gold production to range between 340, and 360000 ounces down from 360 to 390000 ounces.
Albeit at an improved all in sustaining costs, ranging between 1050 and $1100 per ounce sold down from 1075 to $1125 per ounce solved.
At math or underground, we develop nearly 1.5 kilometers which was higher than what we expected given the carpet lockdown.
Approximately 2900 made his of underground development have been completed year to date.
And while we are maintaining our full year production guidance range of 180 to 190000 ounces, while reducing outside all in sustaining cost range to 10 to 1020 to $1070 per ounce sold on the back of the lower forecasted sustaining capital spend.
How production and cost in the second quarter were broadly inline with expectations.
And despite record my rainfall.
Combined with the ongoing management of the kind of did not contain protocols productivity improvements continued with higher plant throughput increased material mill mined and lower unit costs.
We do however nights the continued trajectory of the kind of at 19 in the U.S. and South Carolina remains highly uncertain and prices ongoing risks.
At a total company level revenue and EBITDA decrease from the previous quarter due to allow gulzar volumes.
The key changes paying the completion of the mines typing at the current ore body at why in the first quarter.
And I quote a nice second quarter gold sales from Dico and lower than expected production from the price where coated had a material impact.
Our adjusted net loss of $42 million year to date and 31 million in the second quarter reflects the lower sales volume and revenue.
Our second quarter adjusted EPS result was negative five cents.
And while a weaker financial performance was expected the quarter was further impacted by the kibet restrictions at the price along with non cash financial adjustments, including losses on currency translation.
And our high tax expense.
Cash flow I. Appreciate it was nine cents either died excluding the first quarter Gol Presales and two cents in the second quarter, which is broadly in line with analysts consensus.
We continue to advance our exciting organic growth opportunities, we delivered a robust Wahid district preliminary economic assessment, a couple of weeks ago.
We continued to advance development of the fully penetrated math or underground.
We are on track for first production in the second quarter of 2021.
We continue to advance the other why he district opportunities, including WK pay through the permitting process.
At the price the Golden point underground study remains on track for completion in the third quarter.
Turning to slide four.
Safeguarding the health and wellbeing of our workforce remains a top priority for us.
And we are there when we have very strict protocols in place across the business.
With the rapid escalation in spread of kind of the darting bars. The beginning of the second quarter, we acted quickly to safeguard our workforce implementing very strict protocols at each of their operations and for at corporate staff, including workplace health screenings staggered shifts and rigorous claiming practices.
The high operation has had I positive kind of if not in cases of which three cases remain active and under corn today.
Jay to archive Addante protocols and while the 171 workers have had to self isolate for two weeks at some point since the beginning of March.
The New Zealand government flock, Dan Cataldo operations at my cries and halted capital along at matter underground at why he for five ways.
To date, we've had no confirmed cases of kind of at 19 at either side.
There are currently no restrictions in price across the country other than the borders remain close to farmers.
Zipcar remains in the state of operational readiness.
There are now confirmed cases of kind of 19 at site to died and where operating under the general community quarantine requirements.
Despite all these challenges as safety performance continues to improve resulting in the company's total recordable injury frequency right trending lower to 2.7 Permian elsewhere. This is a fantastic effort and the near record for the company.
Moving on to slide five.
We have operated a sustainable business for the past 30 years by applying robust iasci practices across our business and in June we launched at 2019 sustainability report that captures our commitment to responsible mining and is based on the globally recognized global reporting indeed.
Should the framework.
In 2019.
Under our new integrated managements.
[noise] system, we made significant progress in a few areas, including the review of our responsible mining policies.
The launch of a new policy around our engagement with government and Civil Society and the issuance of non statements of physician focused on social and environmental aspects.
We're extremely proud of our ability to discover ore bodies build projects upper right mind and rebuild type depleted volumes.
Our overall BSG performance has been recognized again by the major S.G. rating agencies and most recently, we maintained our eyes, writing with M.S.C. are putting us among the late he is cheap performers in the mining industry.
Moving on to high out onto slide seven.
How delivered continued improvements even despite the challenging conditions and I previously mentioned.
In my 30 years in the mining industry I've come to understand that mining carries many risks technical social and economic.
Firing on layering on a global pandemic has added even more complexity.
With that said I am pleased to see the while operations continued psyche performance improvement with the total recordable injury frequency rate significantly lower at 2.7 from 7.7 million hours worked a year ago.
Tribute this to the strong leadership, we put in place the operation.
And Jim and his team have been filled a strong safety culture with continuous employee engagement.
Despite these challenges where a meaningful portion of our workforce have been off with a two to kind of it not in protocols and the record rainfall and now my.
Hi, all has managed through this and delivered significant operation and operational improvements.
Title second quarter mining movements have nearly doubled year on year end increased 18% from last quarter.
Reflecting the ongoing improvement in mining productivity.
The excessive Brian did impact our ability to access high grade areas of the I can pits, which we now expect to mine this quarter.
All mining during the second quarter increase from the first quarter and the prior year with activities focused on all mining at Red Hills, and the pre stripping of white and the snake phase two OLED better phase one pits.
Hi, a mill throughputs in the quarter helped to deliver significant increase in production quarter on quarter.
This was partially offset by moderately lower grades.
We maintain gold recoveries to spot slight reduction in head grade, which reflects the continuous improvements to the fine grinding circuit.
Mining unit costs decreased 22% from the previous quarter and 43% over the prior year period processing unit cost per ton decreased 14% from the prior quarter and 70% from the previous year.
The reduction in unit costs reflects the increased mining productivity and prices plant improvements and enhancements.
We have maintained house gold production right range and we continue to expect to strong second half of the particularly in the fourth quarter.
As a reminder, the second half the year is expected to the two thirds of Hiles annual gold production at the corresponding lower all in sustaining cost.
In this second half, we will focus on increasing mining rights and we'll commission an additional four komatsu 730, a large haul trucks to support the mining operations.
Although we expect to see the lower.
Sustaining capital costs. This is offset by higher growth capital spend which is associated with progressing and additional lift on the tandem storage facility.
An additional weiss prospects to support the expanded bonding operations.
The original for he made a lift or the TSS is nearly complete and with the contractor on site. We are bringing for the next phase of the lift from 2021 to this year.
This will further support the expanding on operations, while managing the water balance on site.
Turning to slide eyes.
We recognize the weather has been a consistent same for us at how the reality is that the Carolinas continued to experience record excessive rainfall and although we effected in rhineman sitting in our budgets and gardens. It is available that we cannot predict and it does and will remain a factor of our operations until we've opened up markets and.
On down to hardrock.
I draw your attention to the slide where we are highlighting the enhancements we've made to the hell operation, which has yielded continuous improvements to productivity some costs.
In the month of my the thought recorded 12.5 inches of rain fall.
Which is significantly more than the period between September and December of 2009.
Despite this rifle than my rebound as much material for the month.
You did mine for the fourth quarter for the whole border of 2000 Ida.
At a mining costs of nearly half.
This is a testament to how well we adapted to mining in the heavy rain periods and changes we've made to mitigate the risks of weather.
Turning to slide nine in the cries during the first quarter the price operation reported one recordable injury.
It's the first of the year resulted in a total recordable injury frequency rate of 1.5 10 million elsewhere.
The operations continues to see a significant reduction in the number and severity of injuries as compared to last year.
And again on employed to considered effort by met high on site General manager and his team on the ground for straddling the strong safety culture.
In the second quarter Underprice produced approximately 28000 ounces of gold or.
Production was expected the performance was further impacted by the Cabot not any restrictions.
Over the five week locked down we were required to Qatar operations to make regulatory requirements, including the suspension of mining operations.
In operations were limited to hazard management activities exclusively and the processing plant was restricted to the minimum throughput capacity required to maintain the auto Clive.
Despite mounting a near record 5.2 million tons in my followed by a 4.5 million tons in June the five weeks is self sufficient in mining has adversely impacted our it looks for the year from a price.
The five week loss of mining will delay access to the high grade ore from the current I should know of size for which we were expecting would be the principal fade in the fourth quarter.
This material will now be mined in the first half of 2021.
Additionally, the suspension of mining activities required us to fade oxide materials from stockpiles, which we could not effectively sample, resulting in significantly lower than expected gold recoveries.
These challenges have culminated in the reduction in the expected gold production for the year and the result in higher all in sustaining costs.
We do continue to expect a fourth quarter to be at highest quarter of production at the lowest corresponding all in sustaining cost.
Moving on to slide 10, and why Hey.
Why he reported one recordable injury during the quarter, increasing its total recordable injury frequency rate to 5.3 from 4.2 million man.
We announced worked at the end of the first quarter.
The development of math or underground was temporary could tell cheated the kind of driller 19 related restrictions, which were lifted on the 27 of April.
At the end of the quarter. We completed 1342 made is a development, which was ahead of expectations.
As the year progresses, we expect development rights to continue to increase as shown on the chart and despite the five wake tired lot 19 locked in we remain on track for first production from the price underground in the second quarter of 2021.
Looking ahead, we expect to prices all from the narrowed by in mining in the tougher in the epic or insights to produce approximately I pass them ounces of gold production in the fourth quarter of this year.
Moving on to slide 11 to declare a focus and the decay is the lifting of the operational Restriking the mine and renewing the F T I.
We remain in dialogue with the appropriate government representatives at the national liver.
During the second quarter all levels of government in the Philippines were responding to the car that 19 pandemic.
Following the meeting with the present at the end of February a government working team was established to renewed DFT to review the F T I a renewal.
This time commencing work in March before temporarily pausing to focus on the covered crisis.
The government F T I working team Reengage from the renewal prices and following the completion of that with diary endorse the F. T I renewal to the office of the president at the end of the quota.
Currently our understanding is the FDI renewal remains with the office the precedent for approval.
Since the operations, where restrained in July 2019 objective has been to nine time as many of the operational workforce as possible for as long as possible to quickly and safely regime operations.
Following nearly 12 months of restraints, we made the difficult decision.
To begin that progressive temporary layoff prices in mid April.
Hi, approximately 500 over 750 direct workforce have thing temporary light off.
Underlie the code as the Philippines accompany contemporary layoff employees for no longer than six months.
At the end of that period, the company will either commenced the prices of termination or renewal of employment.
Decision to terminate or review.
Which massacre in mid October this year will be dependent on the lifting of restraints all the renewal of the F T I.
We're also engaged in open dialogue with local government units to address the continued blockade.
Of the access right by the anti mining activities.
The defeo is the significant source of jobs taxes and revenues that we believe will be crucial in contributing to the Philippines post nine Hain recovery.
I will now turn the presentation I'd to Scott Mclean to take you through our financial results. Thank you Scott.
Thank you model and Hello, everyone.
The next useless cover around second quarter financial results and balance sheet.
Turning to slide 13, which includes a snapshot the balance it.
As shown on the slide as a 30 June <unk> cash balance was 148 million and now net debt stood at 107 human.
We have been actively managing at cash and liquidity position. Some time in response to the I'm going to be a suspension.
Include steps already taken in the third quarter to better align l. twentytwenty operating cash flow profile, but their capital investment plans.
These debts included the style about strategic equity interest in gold standard benches.
The export or the door right inventory from the beer.
The gold prepay arrangement executed in the third quarter and.
Wrote down of the funnel 50 million available on our revolving credit facility.
Tommy the steps in path reflected expectation of weaker performance through the first time.
Given as Michael pointed out to the their 2020 production is expected in the second half of the.
However, the fibroid, New Zealand's cobot, 19 restrictions, which impacted mccreight in particular made the second quarter, even more challenging.
However, with Mcright back to full operation and as we progressed through the balance of the we expect to see outperformed improved non degrade increase it both Harlem Craig with a full quarter remaining the strongest quarter of the.
Given the continued suspension of operations. It did we have and will continue to proactively manage the bouncy to meet the short term challenges we think.
While ensuring adequate funding capacity to deliver the company's high value growth projects on the optimal timeline.
Given.
The WRECO gold prices and strong future margins. They represent I would also add that we don't have any current plant and take the hedging.
Moving on to slide four thing and the financial results Center.
The quarter on quarter reduction in both revenue and EBITDA, along with the lower gold production and.
As already noted.
The results include lower than expected second quarter production, the mcrae, given the kind of in 19 restriction.
Other key second quarter changes included no styles from disappear or is the first quarter included the sale of the Doreen Dream.
Well the idling of processing of Wahid with 930 at Greenbrier completed in the first quarter.
Well he is of course scheduled to run a campaign in the fourth quarter to protest maritime who currently being mined football.
The overall second quarter result, with a net loss of 31 million. That's included an unrealized.
Gain of just under 7 million on the fair value as the remaining you deal and volatile hinges.
Approximately 59000 ounces remain on the its contract.
Second huh.
On an adjusted basis after excluding noncash unrealized gains and losses on hedging and asset write downs.
Revenue as a result, there it was largely.
Sometimes the loss of 32 million or negative thoughts since the ship.
Please standby all while we were connect Mr. Mcqueen.
Please go ahead Mr. Mclean.
Oh I'm sorry is that the line got cut off and not be taking me.
Mark down here in Victoria pretty seriously.
And I think I was just referring to the negative flows into the shekel diluted.
It is.
In which the first.
Resulting in adjusted negatives them and special fully diluted.
As noted earlier in the second quarter result was impacted by Recoded restrictions.
In the Zealand.
Also as Michael mentioned, the second quarter included several material non cash adjustments and adding to nearly a sense on eighth year, including unrealized movements related to currency conversions and related tax provision.
It currency impacts related to a material appreciation there, but the New Zealand Israeli lower exchange rates across the group.
It's also worth noting that we're not currently recognizing any potential income tax credits associated with the cost incurred in the summer thing.
And kind of video in the state of operational revenue.
As best Castlight summary of the bottom the solid operating cash flows for the quarter decreased 17 million.
It's compared to 121 million in first quarter, which included approximately 79 million related to the goal pretty good.
On an adjusted basis after removing working capital changes the operating cash flow per share for the second quarter two cents.
Fully diluted.
Nine cents on the today versus.
Nothing of the prior quarter investing cash flows included 23.7 million credit for prices on the sale of equity interest the second quarter actually flows so the slight reduction in capex.
This reduction from primarily reflects lower pre stripping.
Okay with restriction spending has been demonic five weeks in Mcrae.
As well as lower general operating capital.
Financing cash flow of approximately 4 million reflects the net proceeds received from refinancing recent museums equipment purchases, partially offset by ongoing periodic financially plan.
Turning to slide 15, which provides some additional data on our capital expenditure.
And then onto the top of the table already mentioned.
Capital expenditures decrease quarter on quarter to quarter around 9% to approximately 54 million.
As previously noted the decrease reflects lower pre stripping and general operating capital.
Actually offset by an increase in growth capital.
The decrease in general operating capital largely reflects lower spend that mcrae with the previous quarter, including equipment Burgess.
In the current quarter versus 7.8 million and on to name the price escalators.
10 million equipment finance facility services that back then.
Zulia offers superior terms depend upon it on that specific equipment.
It's pleasing to see the new excavators contributing to the regular mining right. The Jayson Mcrae in May.
Following eating your favorite restrictions in late April.
Growth capital increased 24% quarter on quarter.
In areas investments during the quarter, whereas the Hell expansion, which included the talent grow within additional peg storage capacity.
Ongoing development at the NAV and begun.
There are three major filings.
Well if the trial is expected to be created in the third quarter. This year.
Given the unprecedented levels of direct line receipts into any iden and again in recent months, the water levels and the currencies that materially above the model them out.
As such we've chosen to continue works to advance the second thought medalist residuals the next year to enhance Regal.
Well transitioning straight into that lift off at some potential cost benefits.
Doing so we are bringing owed approximately 50 million capital into the second half the 22 any previous lead planned for next year.
In addition, we expect him to spend an extra 10 million to continue its been very aggressively now.
Resulted in advance and 2021 increased short to medium term capacity.
Based on various other revisions to our plan a year to date spend right weapon expected 15 million reduction in sustaining capital mainly pre strip.
Consolidated 2020 capital spend is expected to remain within the previously guided ranges on a group basis.
We have ever provided some upside through like the changes.
On a turn back over the model to discuss.
The rest of the presentation. Thank you.
Thank you Scott and moving on to slide seven nine.
We are investing in these growth opportunities in each of them are different stages.
Beginning with the growth in the Americas, the Horseshoe underground represents the opportunity to add high grade ore to the existing hi, I'll open pit production profile.
Optimization of the project is currently underway, including an assessment of all the modeling scenarios.
I just feel versus submitted a rock to backfill and the development of the deposit from in either a top down or bottom up approach.
We expect to complete a feasibility level economic analysis of all morning scenarios by the end of the and total development. It is on track for 2021.
The company is in the final stage of the supplementary environmental impact statement permit process to further expand the whole operation and mine underground.
Hi, there being no objections by any stakeholder group to the Crs and at this stage the company anticipates a successful.
Record of decision and completion of the prices by year end.
In New Zealand the Golden point Underground study at my cries is advancing with an updated in our 43, one on one technical report expected to be completed by the end of third quarter.
Golden point is expected to replace the fries underground and extend them on loss of enterprise.
We expect in cries to be a major source of free cash flow generation for many years to come.
Turning on to slide Irene.
The more industry guidance Q2 weeks ago, we were pleased to announce the robust results of the preliminary.
Economic assessment of the why he district in New Zealand.
We have operated responsibly and use them for the past city is created significant value for shareholders and significant social economic benefits for the host country.
In fact, we're quite proud of our track record of successfully in responsibly exploring consenting developing operating and rehabilitating mines in country.
The components of the why he district study.
But them after undergrad, which is fully permitted and currently in development with first production expected in the second quarter of 2021.
The district also includes the Martha open pit size, five which is an additional cut back to the already permitted.
Math, right and pay price for.
Hey, the prices plant is a proposal for a small open pit cold Gladstone.
Approximately 10 kilometers away to the no from Hawaii prices plan is study Cakepay, a major discovery with a resource of 1.1 million ounces between 12 and 13 grants for Tom.
This is only based on 35000 made its a drilling.
So we'll be drilling there for at least the next decade.
Our base case, you losses $1500 per ounce long term goal price and under this scenario. The district produces over 2 million ounces of gold to the next 16 plus years at a competitive all in sustaining costs of $627 per ounce.
He asked attack net present value just Canada, 5% is 665 million.
Yes.
And the corresponding after tax IR artist, 51%. This is a compelling figure that falls well below our cost of capital.
At spot pricing is 750, an after tax AUR increases to 75%.
Moving on to slide 19.
Based on the payout Paipai results. The wind district has a strong free cash flow generation profile starting of course that half the resources used for the study are currently classified as and third.
This is way one of the opportunities exist for us in Hawaii District.
Our expectation is that through the drill bit we will convert resources and tissue expansions that appear to be significant opportunities for us at the matter underground nwk pay.
We haven't fully defined or delineated the resource math or underground and we continue to delay the WK pay will grow into a multi million ounce deposit.
This will take a considerable amount of time to prove up. However, we have initial results survivor of Union high grade ounces based on the 35000 meters of drilling today I just mentioned.
And as a reminder, since we acquired why he in 2015, we've increased the resources here from 500000 gold ounces to currently 2.5 million at a discovery cost of less than $20 per ounce.
Permitting in New Zealand represents by its an opportunity and a risk for us at Wahid with a new feeling economy heavily dependent on some sectors that were significantly impacted by the Cabot darting crosses the government has stated its intention to look to other sectors to kick start the economic recovery.
I have mentioned, removing the red type from the pending prices and that may allow more streamlined prices.
And vast could main earlier production.
Conversely, the permitting process mighty projected depending on whether decision goes to environmental calls and how long it size there.
The typical timeframe for decision by the environmental courts is 12 months, which is what we have conservatively ashamed as our base case.
It is important Tonight, the W.P. Carey pay.
And the other opportunities a shovel ready.
And we look forward to working with the government to bring these projects forward and deliver the significant social economic benefits the district opportunities will bring to the rural communities in the car Mandel.
Capital investment for the why he district is projected to be approximately $450 million spread over the next nine years, beginning with investments at the math or undergrad. This year that are expected to tighter in 2021.
Balance of the spend is stated from 2020 to 2020 EITE beginning with the commencement of the initial underground mine development WK pay and the infrastructure related to assessing the underground and ending with the spend related to the math or open pit development.
Hi mine plans have been built from first principles into a high level of detail for the pay money in Patrice I reflect.
But as you can see.
From the robust cash profile why he proves the brightest king and the district, even in its early stages continued to deliver more resources that consistently high grades and costs.
And supports the cost of development.
Moving on to slide 20 in in summary, although it has been disappointing to downgrade the outlook of enterprise. We're pleased to nine tying the outlook for the highest despite the challenging first half conditions.
We worked tirelessly to manage the near term receipt of the global pandemic, including safeguarding the health and safety of their workforce.
We will continue to proactively make decisions to support the business by adapting to the near term risks, while ensuring we advanced our long term growth initiatives in the optimal time timelines we have outlined.
We had a strong acid buys and we have what we believed to be one of the best growth probably pipelines in the industry, particularly at why.
We focused on what we can control and we have traditionally been a company that has delivered on its commitments and one that has generated strong returns and that is where we are planning to be again. This year as the progress is and we expect a stronger production in the second half.
We have a strong shareholder registering a group of very supportive shareholders.
That we value the support either this challenging 12 months, we recognize that has been a year of uncertainty, but our resolve to deliver consistent positive results remained strong.
Restarting the depuy is a top priority and we wish we had the timelines to provides the market, but unfortunately, we do not know when a decision will be night.
We continue to engage with all stakeholders and government agencies to renew DFT I. However, we also need to get on with their business, including advancing what we believe is one of the most robust growth projects in the gold industry at why Hey.
Achieving the results of the pay I delivered will be one of the matrix achievements of oceana adults city history.
Actually very much NASDAQ two cents.
Thank you Michael that concludes his formal presentation segment of the webcast I will now turn the webcast over to the moderator to facilitate acuity sessions.
Thank you.
Ladies and gentlemen, we will now begin the question and answer session.
Should you have a question. Please press star followed by one I didn't catch Thomson. Once you do you will hear a tweet on prompt acknowledging you request should you wish to withdraw your question simply press Star followed by two and if you are using a speaker phone. We do asset you. Please lift a handset before passing any keys.
Please go ahead and press Star one now if you do have a question.
And your first question will be somebody buys from JP Morgan. Please go ahead.
Hi, Good morning, good good evening, Thanks, Michael Thanks for the call or just on higher than that and they are the strong second half and particularly the they.
Even stronger December quarter can you, maybe just step me through some of the numbers. The I think it probably was previously given as they are material movements and dried up and maybe even just talk a little bit more about the risks to two to that coming on with a really what style.
Thanks.
Yeah, Thanks, very much for that label I will.
As we've always mentioned that sort of the the profile the bright probably fall at highlights or why second second half lighted with research. The answer is coming out in the second half we're expecting grades in the third quarter debate as sort of one point I to 1.9 grams per ton in the fourth quarter 2.5 to sort of 2.6.
Were continuing to improve with them material movements month on month quarter on quarter, and we're looking around that 25 million a million tons.
Movement for the so the fourth quarter, what I'll do is I'm sorry for the for the second half what all news all Oh handed over to Jim Whittaker and was there a general manager at how just to set through some of the the opportunities that we're saying in some of the actions. They were here. Thanks, Jim Ryan. Thanks.
Thank you Michael and thanks for the question, Yeah, obviously as we've gone through despite ongoing challenges.
With coded.
Manpower and also rainfall we've been managing to mine, one material quarter on quarter and going into right direction.
During the second quarter, yes, as you see many grass no. We did have some problems accessing higher grades.
We are expecting to the mills. So this material is now in front of us and will be attacking that through this quarter.
Some options that we have a we looked around plans that we get into led better hit a little bit earlier, and we looked at mine phase designs and redesign.
To get to high grade ore sooner and basically trying to move the total material to get your quicker.
And also based on the previous agreements who have come out too. We did recently this month mobilize for additional large komatsu seven three haul trucks that were originally in the plan for next year.
We were able to negotiate that would come out soon actually push those financial costs into 2021 and that will help us with not only tonnage, but also streamlined training and reduce our total mining unit cost per tonne. So those are just just a few the things that we're doing the focus is obviously really on the mining part.
And getting back to basics in in the drilling and shovel operation and also making use of the additional seven thirtys.
Yeah, great. Thanks, Thanks for any additional color and just thinking about the guide you know very hard rights in in that last quarter.
How do we think about that I'm pushing into calendar year 21, one would think must pay will have the guides falling back towards sort of the reserve guides fairly quickly.
And your thoughts are lighter, but yeah 2.5 back into one of my fold from.
What can you give them 20 $1.21.
Sure Yeah, right, so and so I'm sorry go ahead.
Yes.
No yeah, yeah, sorry, the grades will sort of continue into a it with the areas that we are into 2021 of the first half at 2021, and then I will drop in the yet.
The second half of side of the yeah.
Well sure baby different from US is you are those that have followed how will you know I seem to time will tell you a very wet side and in December with some really good grades in really good production and that that's really happened year on year.
Our next year, you'll see those hydride sort of go into a into the first half of 2021 with a with it because the mining sequence showing that the grades will be reduced in the second half for 2021.
Yep, Okay. Thank you and maybe some of these silly question. It's just the only a county on the the the price iOS life and Scott [noise].
The 48000 ounces at six thing pretty hard.
What happens to the other 300 Bucks do you get that or as a girl, who already board I get that [laughter].
I've used truck.
Good on mute.
Hello, Mr. Mcqueen could you please unmute your line.
Please standby.
So I can follow up later.
Yes, sorry, sorry.
We have others the gold already solved side, who say every time that the we'd I get the additional.
Yeah, that's great. Thanks, Thanks, Michael thinking excellent.
Thank you.
Do you have any further questions Sir.
Thanks, that's great. Thank you. Thank you.
As a reminder, ladies and gentlemen, if you do have any questions. Please press star followed by one are you touched Thompson.
And at this time it appears that we have no further questions registered I would like to turn the call back to Mr. pizzi.
Thank you operator that was easy that concludes our webcast and conference call. A replay will be available on our website later today on behalf of Michael Scott Smart, Jim and the rest of the team. Thank you for joining us bye for now.
Thank you ladies and gentlemen, this doesn't do you can just your conference call for today. Once again, thank you for attending and at this time, we do ask that you. Please disconnect your lines.
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