Q2 2020 Golden Star Resources Ltd Earnings Call
To begin momentarily until that time your lines will once again be placed on the old. Thank you very much for your patience.
[music].
After the speakers presentation, there will be a question and answer session to ask a question. During the session. You will need you press star one on your telephone. Please be advised today's conference is being recorded if your where any further systems. Please press star zero I would now like to him the conference over to your speaker today My.
Stoner director of Investor Relations and business development. Thank you. Please go ahead Sir.
Thank you everyone for joining all Q2 results cool.
I'm just getting into the slide deck. If you could please note the disclaimer slide to the presentation.
On today's here in the cool wet called the presentation, it's already available on our website.
Today I'm joined by Andrew Right, you don't see.
Graeme crew on the.
Paul Thompson I'll see I thought on pizza for quite some discovery.
With that please go ahead difficulty Andrew.
Thank you very much Michael Hi, everybody and welcome again to the Golden Star Q2 results School.
On slide four and you can say don't overview, which I'm sure. Most of you are familiar with the our asset base second gone up.
We've been undertaking continue to undertake significant work both of our operating mines to unlock value.
Well so.
The focus has been successfully growing volumes I don't say better understanding what is a very significant.
Full body.
Yes, there is.
Optimizing the current mining area. So we can stabilize that business and then adding volume over time to get it to the point well, it's again a cash contributor.
That is all within a sustainable business model that.
Really makes a meaningful contribution both locally.
The communities around our assets as well as nationally in Guyana.
Moving on to slide five wins.
The view that right the second quarter results the.
We are now.
After market closed last night.
A fully kohlschreiber with good underlying improvement in the business Weve added cash to the balance sheet, we produced at.
The various different infrastructure type projects at Wassa, the set up to the along the time that continued to progress we've had good mining execution Val.
Hi style, we faced challenges in the cool with Kobe amongst them, but we continue to play some setting up the second mining level 17 level.
And you know dimension code, but that's who against the backdrop.
Substantial disruption globally to movement supply chains, and we've navigated our way through that and continue to do so.
Moving on to slide six which is really a.
Transformational.
Hmm and move the business, which we.
Communicated yesterday, which is the binding agreement we have reached the stage well publicized.
First the assets.
Really this transaction helps to.
Guarantee the future of that asset, which as everyone knows how it's been true.
Time, we've got a plan the time that around them.
I think puts them on a more stable lung sun setting with a focus investor coming in.
And then allows Golden Star post closing 30 quite because all of its energy resources and financial capability accelerating won't be doing at Wassa.
They acquire a about asset is a business called F. G.
With a team that's got some really strong experience in the sector.
In Africa, particularly in gone or is wells had gone is certainly a jurisdiction like we're targeting in order to startup business CEO, Glenn Baldwin, who my head of operations at gold fields.
And there's a real commitment I think on that side to.
Set up a business and use now we've done around at Bogoso across their foundation for that.
As you can say at the bottom of that slide on slide six we signed a definitive agreement.
And now there's a series of Deborah conditions, we got to satisfy it said that we can get to completion between targeted by the end of September September the set if you.
Moving on to.
Slide seven in times of the structure of the consideration of that transaction.
The several elements to that I think the.
Objective from our perspective was to ensure that we.
Upside exposure as that operation continues to turn around.
Potentially develops.
Uh huh.
The future.
Same time is staggering some of the payments, which will enable the incoming best that like this that resource supporting that turnaround.
So from the it's around $25 million of working capital.
Which will come off our balance sheets and stay with all the cypress down the new I'm not.
And completion on top of that 5 million Delta cash payment. So that's the initial $30 million.
Then in July 2023 of the 50 million build a payment in 20.
21.
$10 million numbers that normally around to them, but.
Then $15 million in July 2023, so all in the.
$30 million, a cash plus the $25 million of working capital So $55 million and then as a separate contingent payment. There you can see on the right and flight and flight, which really relates to the potential future development.
The refractory material, which was mine historically.
It's over a million off ounces of results I'm not something that you all told us they're going to take a closer look at so should that be develop.
As anything up to an additional 40 million pregnant a golden Star. So we think you know that's the right balance in terms of.
Allowing an enabling investment and ensuring that as that happens we have exposure to the success of that.
And all of that as I said leaves.
Golden Star then with its focus on developing Wassa and accelerating what we're doing well so.
In terms of slide I, just looking always better and our guidance for the year.
She let's say at the halfway stage were tracking at a consolidated level, how do you all in line with the expectation.
We sat out within that was just slightly ahead of where we thought it would be probably stay a little bit behind what we guided for it. So we've made some small adjustments that to the composition, but effectively we haven't reduced valuable guidance, we could tighten the range as we go in.
For the second half of yeah.
And clearly.
The pestana sale closes in September and we'll update the for what that means for the balance of the year.
Moving on to slide nine.
Well, you can see that a little bit more detail out around the ranges.
Community Health and safety nets to the business has been.
These range from malaria initiative.
Hi rights of local procurement and eventually what about what folks being.
And I am I'm currently it is all gone I am because our ex Pat so back in that line countries.
Through to the Oh palms business that we've set up to how.
Remediating the claim some of our historic Platings and provide pretty significant likely employment. So.
A key element for us in maintaining strong relationships with ice community.
And then.
On slide 10 times the.
Hi, Good 19, Yeah, I think those relationships I mentioned that the pizza.
The response over the long now four to five months to the challenge we flight we faced from the global pandemic in our response to that and you know we worked very closely with our communities and <unk>. The government have gone it's been very supportive.
Yeah, we address the issue could you already had slight controls.
Sorry, pretty extensive education significant screening and testing protocols and site, we've now got PCR.
Or treat testing equipment in where we can test that each of our site, which is yeah.
Regarding Paul Thompson sons of the speed of testing identifying any issues.
As a company with contributed nationally.
Management and the board has contributed to health initiatives and health infrastructure and local communities.
No that say, obviously some impact is inevitable, we see not a press there.
And you know I think.
But he came to 19 remains a very real threat to our business as much as it out to pretty much any other business, but you know we put a comprehensive response into that.
Succeeded in continuing to operate in that environment.
So with that I'll hand, you back.
Hi, Graham to take its food from Slide 11, and 12 took about yes, it's a bit more detail.
Thanks, Andrew I'm moving out of it a slide 12.
Talk about wausau for a little bit.
If anyone needs and a reminder, think must've on the coal will be familiar with the scale of the Wassa system.
Definitely a solid quarter.
In the context of Kibet that Andrey talked about.
And and intensive projects continuing site.
Really solid quarter or production wise cost wise and also starting to progress the some of the longer term plans for wassa.
Without moving over to slots are saying the high school plant you can see the fidelity bought unless they are just the progress.
About 84% completion at the end of the quarter. So on track for completion into Q3 commissioning into Q4.
There was a this part of the yeah, there was and that the pandemic, we were little bit concerned about the supply chain and some of the equipment coming out of China, but have managed to maintain the critical path.
On that project.
Similarly, with the electrical upgrades, that's a key and I've left for the for the pipes plant, but also I got kind of blow them on.
Infrastructure.
Daddy's a little bit.
Risk associated with that just weve getting people into technical people into gone are the environment. So you don't we're working through a whether we can get some people in for the commissioning of that projects or Alternatively, I started doing some work on testing some.
On law and a body cameras and so I wanted to do that commissioning remotely.
Yes.
Living I've, a two slots for signs on the school cod.
As we mentioned just in terms of production volumes from underground.
I'm very strong quarter and full quarters in a right now above that 4000 tonnes a day.
Good strong production from the underground say, Matt again in the context, so enhance a screening protocols social distancing.
You know some concern about Oh supply lines at the beginning of the quarter about managed to hold all of those and as Andrew mentioned good support from the government capital there in terms of recognizing the mining industry is an essential industry.
For community.
In terms of in terms of the greatest sorry, I mean crudes frequent on court along as we moved into the more Central Park. So they should.
Badly on cotton on farm level, what 70 level.
A little bit on 620, sorry, moving to the central portions in saying that right normalize closer to the reserve grade.
Oh, sorry, we see continued the like rights Opportunistically with the low grade processing during the quarter and it was placed into say the recovery stay above 90 caught the same with that point that lawler dried material enough in the blend.
Oh, that's what you're saying.
The costs the unit costs, certainly benefiting from the productivity and ER and slight increase in Jay and I want to one of the impacts there with the.
Shipment changes, having going from commercial plots too.
To.
Charter flights.
The nice costs slightly.
Onto the Prestea moving on to Slide 17, I think again I think most people are familiar with the with the work that's going on there.
But another challenging quarter us specifically on 24 level.
But we've continued to what to set up 17 level for long hole Stoping later in the yet.
We did have some carve it impacts in Q2 at Prestea.
We had some some positive cases and within the contact trice at that point in talking as thing had to be managed through the kind of health service. So at one stage. Yeah. We had about 60 avail under the on what cost caught up in contact pricing.
Which impacted our ability to the fell I get set up in some of the starts that sorry, let's talk us through that we focus the attention on continuing to get 17 level set up.
The other carve it impacting system equipment related to life someone with a small scale mining equipment I'm coming out of Europe.
Was delayed by a couple of months and and but did posted places that equipment wrought like in the quota.
And a couple of more robbing now early in Q3.
Moving on to slide I, saying scorecard, just I guess, reflecting the.
The production challenges on 24 level the tons and grade buys buys paying down there as we.
Continue to and experience modeling all Lawson dilution in NYSE Lodge, Alumax fives or on the positive we're able to set up.
The northern block all 24 level. So early in Q3, we started out for stuff first stopping of the the northern startups in in 24 level, which was an important mall Stein.
We also completed during the quarter, everyone be aware that weve paying money trees.
Lower grade oxide material.
As as we've gone through that was completed during the quarter and Ah you know, we're starting to see now the the processing plant reflect yeah, the recoveries et cetera, and in line with what we're saying from the underground mine.
And cost.
Reflective of bugs volumes volumes caught LOE, and <unk> and the unit costs, accordingly, but but what body that we continue to invest in equipment and development in particular in 17 level.
And with Oh.
Good to talk about a financial results.
Thank you Graham.
Yes, it's.
And just be mentioned, we've had a really solid quarter. So in terms of the financial results. They are I mean shows chat results actually so what we've seen is why so we've seen a great improving and and the ball games coming through there as well and then screams just said in terms of Prestea we're still.
Seeing they actually impact the turnaround and dose for the impact Okay cool.
In terms of that production.
You can see data that we have produced just over 60000 I'd say this quarter. We so I just over 52, almost 63 trials can I just in the quarter.
The reason for that discrepancies because at the change in the flight schedules associated with corporate 19. So.
Previously we to use commercial flights, but we had to go into private chakras. So it looks like discrepancy there in terms of when you actually get paid for products.
That will unwind as soon as you go back to commercial flight.
In terms of since what we realized through the price and an overall basis. Its average that 16 26.
Matt let can turn so the spot piece, which are which is at 17 Twain Pete and that actually decreased in terms of clinker totaling 16 26. It is the consequences of the streaming agreement we have no go.
He leaves onto slide 22.
You can see here.
Yeah sure net cash flow in terms of how did the cashes being generated in the quarter. So we started the cost with 49, sorry for $1.9 billion, some nine that increased to $45.1 million.
So you can really see the cash generation coming through.
So in terms of performance there yeah cash generation was $20.1 million, there, which was offset by the funding requirement at Prestea, which was $9.2 million.
Let me talk through the balance sheet as well during the quarter. So we've reduced our working capital by just under seven millions of 6.9 million and this is in addition to wall. We were able to do during Q1, which also reduce working cap to by 11 million.
On the points to know for the quarter would be that we have also paid or our finance principal in terms of the 5 million in relation to them Cory term learning that first payment principal.
If we look at the cash.
And our net debt position because that timing difference I mentioned earlier in terms of the sales profile had that sale actually happened, but then Nick Walker as opposed to be post quarter end.
Cash position with it being $40.9 million.
Our net debt, we did being 53.7.
It's important to note that at quarter end, the actual net debt position.
The 7.5.
And with that I'll pass over to teacher, who cover off the exploration and geology section.
Thanks pool and now on slide 24.
Okay. So.
Just a bit of an update on where we stand with expiration, we had a pretty quiet a Q2 with nice nice field activities Judy excited we suspended.
Our regional exploration part and just a during during at least sizes just to limit the amount of people traveling in an outside of the mine sites.
To to ensure that we maintained a protocols that time spent.
Assessing the exploration strategy in the context as a the <unk> the significant resource increase at Wassa and particularly in the third category during that was announced in the back end of Q1.
And Ah on the back of the you know the potential aggregate or the reviews that we've been taking on regional properties.
Despite this high Edison activities I guess, we plan and we still expect to complete the planned 2020 programs in the second half the year. The budgets maintained at 6.2 split said he thought at three and a half million to capitalize in two and a half million on Expensed and we expect the field activities to stop region.
Only on the high speed they projects from the beginning of August and we'll break commence drilling at Wassa.
Around the beginning of September at this point and I guess the focus that the real shifting strategy is now to put the exploration group to step away from doing more infill drilling on the on the southern extension infill.
Eric.
Inferred area, sorry, and then I have to focus on other in mind anymore and targets at Wassa in that regard. So if you go to slide 25 on and just still Chiltern. Its grimes already mentioned the scale.
The the.
Left to right on the math on that well the section the long section that shine on the screen is doing a hot kilometers of length and and the bought on blocks of the model. It down at 1.4 kilometers debts. So you can say they the very large scale a system as the wassa raise the thoughtful and grain blocks on the left hand side at the mine data areas and the Guy.
Right walks in the neighborhood areas were 29, saying outside because really.
Going forward at this point.
Within the mine you see is to continue to drill that's a down into the inside results extension block.
Particularly in the upper levels, so that weekends as Brian mentioned, we can start to look at.
Outside the mine plan going forward.
At the same site and the exploration grades will step away from drilling more Hogan is inside results extension area start to look at down deep deep extensions of the mine. They shoot Leidos thing mom and apparently I also have you looking at parallel lies in the footwear and hanging wall and also starts to look at some of the.
Additional opportunities belies the older pits that were minds using the knowledge at least.
That we've pulled together from a understanding wassa the west the system better.
So I like that.
That's a.
That is targeting exercises are underway and we expect a you know I start to do some planning in the back end its Q3 and sense of what the programs is gonna be looking on a going forward for at 2021 in terms of name on in mine exploration.
Turning to slide 26, just sending out a little bit and the big or you look at the mats a instead on the left hand side. The Wasatch <unk> to four to label is the sepsis expression of the Wassa gold deposit shining that soil geochemical sampling.
Essentially what we're saying there is the wassa systems to an awful long doesn't strike extend you can see with the rise.
That's the case footprint of Wassa surface to D.. So I, just extended the underground drilling or that the southern extensions.
Well, we can say there is as they see parallel trends one we're calling the wassa card all expense.
And we can call lights are normally normally soul.
And then train which is further to the west which includes the second one to two one to three open pits that extends down through a normally two and three by size trains a nine kilometers and extent and I had a multi kilometer dialed in on ways on them.
Limited amount of drilling below 50 made as vertical and in a lot of cases all of them pad drilling that's been done there is no deeper than 25 made us.
Vertical depth.
And despite a we.
All of the anomalies of Shine a golden normalizing in the drilling but there is only a limited amount as I say drilling other than drilled on on the northern end of it normally want.
So I.
No I'd not only within the Wassa envelope and in in mine area do we have potential by within one to 10 kilometers of or the Wassa appliance.
On the mining license, we had a series of very significant anomalies that required strategy to be put around lies so we'll be looking at said in some detail during Q3 as well to make some plans on that.
Turning to slide 27, odd and just assuming outside U.S look up in the top right hand corner of them in the left hand on the left hand side, you'll see the Wassa license I was just talking about the Red stars. The Watts appliance, we had 85 kilometer hole right getting all the way down to the bottom Red Star, which his father Brown.
Which has a small resorts on is.
There's potential underground maybe sometime in the future, but not at this point, along that's a long that card or and all the way down to the types of Don I have no any kilometers we have certain 350 square kilometers of licenses in some sense with more than 30, a golden normally are already identified adult hoggatt sorry.
Identify.
He that around existing I'm old historically mind open pits.
On old previously defined are normally through all of the so that's 15 years of soil and older geochemistry.
The plan really and what we've been working through in Q2, and we'll continue to work through the remainder of this year is really to.
Identify the top targets, we then nice and and start to put together systematic programs just drill testing a lot of these targets.
And we're taking a little bit of a different approach in the strategy as Brian said in his presentation.
And as you've seen from the Wassa and al potential I think there's quite frankly within 10 kilometers of the Wassa had Frank the Wassa plot that has significant potential to essentially make the capacity of the current or the current capacity of the plot.
So the strategy, we starting to think about it is there opportunity for possible stand a line operation Bison and now the Gulf claim somewhere down along as felt looking at a one cents a million ounce ore body, that's capable of delivering maybe an ice and Theodore underground as you know to 100 150000 ounces year and then on top of that.
Adding a satellite see within some of these classes and that's the idea of putting the five and 10 kilometer circles around each of those losses. There is just to give people that ceiling to scale and what might be trackable and doesn't necessarily have to be truck that someone that is back to wassa.
So that's the that's it for me some exploration so it's an ethanol specs Andrew.
Many thanks, Peter I'm, just before wrapping up on slide 20, I just the can what I mentioned on slide seven with respect the Bogoso Preston sale agreement the to the tiny follow on that slide the 10 million Cashcall human is twentytwenty, one not 2023 semi.
Michael will correct that the press release yesterday, Hans but one of the decline in it but just to make sure that people have understood that.
So in terms of Q2.
Set at the outset, a good quota for the business really driven by the woman or lesser and you put that plus the gold price together and you can see that to reflected in the financial metrics the pool run through.
The prototype and stuff so really put that mine on the stable long time, putting in an utterance for Golden Star.
One, but close then we've got the capacity to focus.
<unk>.
I said before an accelerating what is still very significant growth potential from wassa.
So I'll wrap up there huh.
To chase and full Couponites.
Certainly at this time, if you would like to ask your question I'll remind you. The please press Star then the number one on your telephone keypad.
Once again that is star then the number one on your telephone keypad.
We will pause for just a moment chicken barbecue in a roster.
Your first question comes from the line of Raj Ray from BMO capital markets. Your line is open.
Thank you operator, or good afternoon, Andrew and team first of all congrats on a announcement on the Prestea transaction I'm looking at Q2 of my first question is on the Wassa greater it was good to see the grade come up for close to the reserve grade.
Didn't give us some idea about how much confidence you have with respect to maintaining or.
Growing the grade from increasing the grade from here and Oh, how much flexibility have you looked within the limited the mine that's going to allow you to keep our.
Our stabilized the grid go going forward.
Yeah, all the questions Rob you want to get it just run through the mold and then I'll package them on the team around for the myself.
Okay.
Besides that the only question you have Roger do you have any other questions on the old also yeah I do have another question that around or.
Our around the mining cost.
Is it was $31 of time this quarter a is that the level do you expect to two for the mining costs to be ads and let the pace filled plant does become operational how much additional cost do you expect to add on top of the current mining cost them My third question.
The news around the our grade reconciliation now get now that you have done a lot of infill drilling How's your mill reconciled grade comparing with your reserve grade four important area that you were starting to mine now.
Perfect. Thanks, Raj I think that's nice N easy the the grain so I noted the ground to deal with those.
Right.
Get them Yep.
Yeah.
I just on on the right Yeah was pleasing to see Raj and I think I mentioned as we're going through.
Lot of that's driven by the areas, we will morning during the quarter.
I'm not going to promise you that we won't see any dips at wassa from here on it we've still got a bit of work to do to really.
Create that flexibility in the plan.
What we have progressed during the quarter is starting to work on what the longer time could look like at Wassa or not really it really involves accelerating development and Ah that's sort of buying from maybe three underground rigs to.
Callable seeks contingent on the fact, we can get the drilled platforms and get them drilling yeah. That's that's talking about starting to do some conversion in a blocks that three and four and that they shoot as well sorry.
Yes, so I think.
One of the things we're working on in that case, we've already been southern push the development.
Tracking the take on development much more closely and making sure that we're getting we are getting ahead of the plan and and the sought the slots and is doing well there.
Placing things out with a quarter would comply to class over the quarter.
Not just in terms of with scoping and producing problem, but also in terms of development compliance.
And development productivity, Yeah, we did think we'd cogs it coming in earlier.
In the quarter that we Mark sopp.
Tom development, Yeah, that's what we do have some ex Pat resource.
<unk> suffer from that over the quarter, but there was a little bit of a different the stock but with managed to.
To pull that back sorry.
Like pleasing.
Caught caught yet promise that we would have any any grade any quarters, where you've had there is we got them wanting some of that was lower.
Great areas, particularly on the periphery, but what we are progressing towards the thing I will tell you said you laid out why around that so we've got a bit a bet a mix of material, but from the core of the ore body and problem periphery.
The second question in terms of mining cost Yeah I think.
It's pretty fixed cost spice. It you know see days there is some variable costs in line with production, but you always see both in the morning cost and the processing costs pretty direct relationship between the tons that we get through buses size could tighten unit costs.
<unk>.
Maintaining that level and incrementally improving that level of production.
Should see that level of cost.
Hi.
Yeah that being said I think it <unk> you know a pleasantly surprised.
That you know what is the days, reflecting that relationship so I'm.
So assuming that we can kick that production right going that's where we should say the costs in terms of the highest.
They're talking about six to $7 per ton mall and additional cost went up high school comes in but of course, what we get that is roughly an extra sort of 30% to 40%.
Level, where we can we can modify second reason that keeps us also gives us a bit more flexibility around the grade mix.
Reconciliations yet we've done we've done quite a bit of work during the quarter on reconciliations.
From my kind of sampling and and lab procedures point of view and also just looking at drill hole Spicing studies, and where it needs to be Todd or where it can be can be wasn't et cetera.
<unk>.
I think that this still again between the core of the ore body I think with pretty good day, when we start to get to the periphery and we get dies and sort of intersections of grade. That's why we still that's where we still see some reconciliation or we go you tend to address them at the guide a little be nice nice periphery area. So.
That's something that we have progressed during the quarter and as we as we go into the budget model for next year, all think there'll be some improvements in that.
Youre welcome so three questions.
Yeah, Yeah that.
That's good. Thank you. Thank you Graham.
Your next question comes from the line of HEICO you leave from it. She ran why your line is open.
Hey, guys. Thanks for taking my questions.
Can you really like yes wonderful thank you bye.
Just two quick ones for you I'm you mentioned the release to de increasing the gold price. So in Q2 results into higher royalty payments.
Government have gone all.
With the current covert pandemic, obviously, everyone is looking for source of revenue in the school that 19, something right now one might think that that would be a source of funds that they're looking at Q, just remind us what pricing you crime, we expect at the current gold price and.
If there has been any conversations with the government in regards to amending.
Your your agreement with them.
Okay and the other question Hi change on a given.
The other one I had was and then I assume your answer is gonna be no, but I I'm just going to quote you'll pursue a shale press release for a second tier you got in they're looking for other opportunities to further expand their business.
Just to confirm your you're not walking at any particular assets. It at this point in time, and we only got 5 million hard cash on the sale to this asset so I assume it's fair to say that Youre currently not looking at specific assets right.
Thanks Heiko.
Let me do with the basic questions on the first one in from the government payments I mean, you're absolutely right every single government and the loads on the fiscal pressure they've responded to kill you get 19, you know gone there has been actually very proactive.
What I would say is they have allowed the mining industry is a critical industry to continue working the mining industry contributed towards various different initiatives in country.
Pretty with the gold price going where it is it means not only the royalty payments but.
Tax contributions going up so you could just look at Wassa and you look good in terms of you know what we reported so far in the year and you know you put that into the second half the year and you full cost for.
Then between corporate tax royalties unloading let alone the all the tax and in direct contribution that's gonna be a 50 million dollar contribution to the government has gone to the huge is a very significant step up. So you know this natural step up with.
The gold price.
If any specific initiatives, we're not seeing anything the elections and gone or in December.
Yeah, as we pretty much any country in the world would be noise around the elections, but you know at this point in time no specific to occur around any changes to the fiscal regime and the study the industries.
Definition going to be making a much more significant contribution this year with gold price where it is.
On your second question with respect to future expansion of the business.
Yeah. This is part of our strategic objective you know it doesn't imply that.
We go from one day to the next and with buying assets, but suddenly it's part of a consideration now going forward, we got to close the oversight process I will first so having a hard work over the next to complete.
And then you know clearly the show can focus on Wassa, but you know we remain alive to opportunities well I think will be a much more attractive counterparty for anyone at that point in time in terms of cleaned up balance sheet and one cool very high quality assets. So.
Hopefully that answers the question and the first one as well, but let me know if not I cut.
No. It does thank you very much and Stacey.
Great. Thank you you too.
Your next question comes from the line of Rice items from C.I.B.C. Your line is open.
Hi, Good morning, Andrew and thing Thanks for taking my question.
Three questions like that.
Oh pitcher.
So firstly on the 40 million contingent payment.
Obviously, a pretty hard to say what the SGR team will do but you have any expectations on the potential timing of that for example would you expect the first tranche within five years.
Second question is also on Prestea.
So the timing of the presti. It transaction comes just a few months.
Before the long hole stoping was expected to ramp up and improve the operation.
Was there consideration to wait a few quarters and determine how successful the new mining method would be all from what you saw in the first started at high lot challenges.
Potential challenges with long hole stoping.
Oh the third question is the Raj follow up question.
Great to see the great.
Quarter over quarter at Wassa on the last conference call you highlighted that below grade stubs, what completed and at the time of the Q1 coal you were saying some high grade Oh come up the Dick one let's run if you could touch on the underground grade profile a month by month April May June and maybe what you've seen in July so far as well.
Thanks.
Thanks, Bryce I'll take but to pump the grand for the third one.
Turning to the contingent.
Payment and timing of that.
And show, what it's impossible to say, but I think you know what I would say is that.
In the conversation because there are.
Clear attraction to them is the sulfide material and they've been very clear that they want to stop taking a look at that one.
Once they take the operation. So I think it is a priority fool them and obviously with the gold price you know even since we started talking to them.
Q3 months ago gold prices, a few hundred dollars higher so that probably focus is thinking, particularly around proven material, but pretty material that succeed gold price dependent. So you know I would've thought that will probably sharpen the focus a little bit and you know hopefully sooner rather than later.
But we're pretty put those payments inside the at any point that gets considered you know we've got some reasonable exposure to that.
Closed depressed I.
We've been considering some time the strategy and what we would do and I think you know as we progressed through the operational changes we've made US we've developed a more come here on the time plan, we've seen inbound interest the we engaged with.
You know, we still see 17 level that is being critical.
We prioritize development about that would actually during Q2 of them either show on the ground work has because of coated mine thing. So we prioritize bringing guns tritan basetwenty four level.
And that's still on track or the end of year.
And you know, we still believe that's going to get that operation the real step up it needs in terms of volume traditional high grade material to then calorie its cost placed and start to contribute so different reflection of how we see the asset I think it's more the strategic decision that we took the.
We want to focus upon power resources, we got on Wassa, because we believe will as a business the Ohio because there.
Then somebody else can focus their investment capacity Preston Boulder, So well you know, there's a clear kind of plan in place to get back on even keel by the end of year and that was the upside as we said it was sulfide until everything.
The grade at Wassa grain of pop on to you.
Thanks, Hey don't abroad.
Very well thanks.
Just on the Friday.
The profile over the quarter, we're reasonably flat the as as I think as we reported coming into Q2 week it sort of walk towards the end of Q1, Oh, we mined out some of at some of us periphery startups and becoming more into the central portions of the ore body, so that that swap.
It's going through in the grind size of the quota.
Coming into Q3, two and a little bit of a little bit of a cheap and great, but also sort of coming back in the second half of this month side. Yeah. It's a it's all about you know that the mix and starts at any at any given on I think you all talked about before but it's about.
Oh, the right probably fall at Wassa is about.
25% of all the startups that are above reserve grade and the rest is.
As a great down to capital I'm, sorry, you sort of relying on.
Wanting for sort of hard right startups.
But helping you maintain that cried average what with what we're doing and what was still I mean to do is like give ourselves flexibility in the schedule.
As we schedule that out to be able to.
And that much closer to reserve great quarter in quarter out.
As I said to Raj not quite ready to promise you know zero corridors.
Significantly below a reserve grade, but certainly making good progress down that strategy.
Yeah got it so for the short term planning engineers.
Focuses on a on a stable grade profile.
I'm trying to optimize the.
Yeah on and really what we've been working on it is schedule complete now you. Yeah, you know I thought it under the I'm on this I'm talking about this stuff doesn't quite work out of this happens you, but you've got to adjust the plan, but it.
It's really about yeah development compliance stocking compliance because at least then we have more predictable of like how do we know quite a log right quarter coming out because that's what the plan shows us rubbing or scratching my head hang on white watching the grades coming up now Oh hang on its because we have money they starts when they said when.
They to go out of it yet so I just just getting more you're actually part of the plan knives is to be more proactive with the scheduling.
Yeah got it maybe just one last follow up on that one and its related to development and.
Pushing that in front of the production profile whats how far in front is the development.
Heading that them you know you six month in front of the current production profile or whether that's sitting.
Yes, we brought with broken into the.
For 20 level, so we're where.
One and a bit levels ahead on yeah, but the you know because of.
The levels of lost a couple of years.
And you know that's not site with two years ahead in development like is what we've got a still getting that get footwall drugs in it we've got to get drilled platforms and get drilling as well.
I'm sorry, so we're in a better position that we would this call and 12 months ago, but still still don't have that development stock for drilling stock as far ahead, as we would market.
At this stage certainly certainly we've been talking about that tend to next years budget or see any increase in drill rigs next year with a valuable drill sought to be able to accelerate that one of the issues, we have because weve been.
Outperforming on tonnage we consume that.
Drillings talk.
A little bit quicker as well so we've got it would just go to address that in the plan.
Perfect. Thanks, but I appreciate the extra color.
Stay healthy and token.
Thanks, Ross Thanks Bye.
Our next question comes from a line of Dawn Demarco from National Bank Financial Your line is open.
Hi, Good morning, everyone, Hi, gentlemen, three quick questions I'll, just give them all to now first off how long do you expect to supplement the from stockpiles.
If you get in and if you give an indication of the stockpile, great and throughput that we could expect.
The second question looking at I think you've got 500000 ounces at reserves.
Could they be practically mind and if so what quarter I think rate is about 1.5 grams per tonne. So what throughput might we expect.
And then finally per stands had some cold it impacts what's the status of the cold that situation at Wassa.
Thanks, I'll hand over to you.
Thanks, Tom I think pretty ground as he is if you take a three to three of those <unk>.
Tom Yes, supplementary <unk> with some of the like right stocks from the Austin pits isn't.
Yeah.
250000 tons or thereabouts, reminding on I stopped Paul's and they get it could be but as scratching around exactly what's there.
I think we've sort of put that in the plan for the rest of this year it around a thousand comes but I.
And ER and it's sub one gram material.
So I.
Yeah, and it really opportunistic on the on the Gulf Ross in terms of the open pit, which is oh.
Really that's just where that's like hide it in relation to the underground infrastructure.
And the surface, yes infrastructure.
Supporting the underground mine.
Currently.
Like in the schedule.
I'm sorry, we've been looking a couple of options of how we can potentially bring that ford or potentially even.
From underground and bring value for that why.
That's work in progress.
But something that well look pretty closely at I'm sort of over the coming quarter and and see where we can.
Actually put that into the schedule.
The third question was on Prestea, sorry gone just remind me.
Oh, yes, it was just on a well.
Actually just given the book more clarity on.
Yeah. The open pit you said it sits where it's located in relation to the underground infrastructure how far.
Is it the underground infrastructure and then my third question just type agree with the status of the cold that situation at Wassa.
That's right sorry.
Uh huh to slight running my notes.
In in terms of the infrastructure, it's sort of bottoms out the <unk> bottoms out on some of the stoping areas in the areas of the bond side.
I'm very very close so we'd have to look pretty closely at that reserve.
Intensive cramped pelican things to be able to go ahead and bought it has not compete in the short time.
I'm sorry, yeah. So that's what we're looking at potentially some other options that we can we can bring nice yeltsin's forward into the plan. Obviously, if we don't from underground the a cut off grade would be higher.
But we could potentially doing so.
I'm sorry, you list you would let somebody else is to the cut off but you would you would bring us earlier in the plan.
In terms of it and private situation.
You have chrystia, we saw in the quarter. We saw initially be sold cases at UCLA.
Which I think impacted on the operations that gold fields, and talk or very close to a bogus I Patrick.
So we just sort of on on a watch at Prestea L. at Wassa is a little bit more remarks.
I'm sorry, there were sort of cases community transmission cases around prestea.
Earlier than what we saw around Wausau.
I'm, sorry, and and it was at that age in terms of management.
If any suspected case was paying manage ball I kind of health service, that's relax a little bit now, it's going to health service sort of rich that their capacity and I know, obviously Monte companies in particular, including us have ramped up their ability to be able to.
Help manage size those cases, sorry that was real lags in terms of testing getting test results back and.
Getting past that for contact crisis, we had some of that Paypal caught up in oscillation for up to four weeks, which is really.
Hopped on them and and impacted on what looked like at Prestea, we've moved on away, but outside of that protocols from that to the point, where as Andrew mentioned Weve got caught her on testing capability now and we've got in half screening.
Has sought so where I books as people come back from that break every single person coming back I sort of medical screen.
No.
Temperature testing oxygen saturation levels in block.
Full pushing that you know where where if you buy and have you been with anyone with systems et cetera.
And they were on goes through that people that come into the workplace. So now we have started to see some cases at wassa, but weve in.
Every case <unk>, one so far we've been <unk> Oster lifesize people before like them all to them on thoughts I. The contact trice has been much much more.
I'm sorry, yeah, but that's just just the timing of when that's occurred and and as the protocols are both [noise].
Okay. Thank you gentlemen, that's all from me.
I'd now like to turn the call to Andrew Ray for any closing comments.
Thank you Jason Thanks, very much everybody studying in today, we've got a colder today to get them with other calls, but you got Michaels contact details and any follow up questions. Please don't hesitate to give us school stay safe and speak soon.
That concludes today's conference call and webcast. Thank you for joining and have a wonderful day.
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