Full Year 2020 Golden Star Resources Ltd Earnings Call
Good morning, ladies and gentlemen, and welcome to the Golden Star Resources fourth quarter 2020 results conference call. At this time all lines are in a listen only mode. Following the presentation, we will conduct a question and answer session and put it.
Any time during this call you require assistance. Please press star zero for the operator. This call is being recorded on Thursday February 25 2021.
I'd now like to turn the conference over to you Andrew Wray. Please go ahead.
Thank you very much and good morning, and good afternoon, everybody welcome to Golden Star Q4, and.
Full year 2020 results call.
If I can draw your attention to slide two.
And on the presentation, you've got the disclaimer that which I would point out.
And moving on.
Slide three.
You can see.
I'm on today Micelle right.
Let's see.
Thompson and CFO and.
Mitch why so VP exploration.
Niches and Ghana, and I think the pretty big storm that hurt the <unk>.
And so bear with us the visit.
The background noise, but the the line will hold on.
So if we can move on to slide four please.
You can see there.
The really.
And if we look to.
2020, I think like any business anywhere of busy.
The year.
In the case.
Golden Star, we planned it to be a busy year and then clearly we had.
The additional challenges of data.
And with the pandemic.
For Us really 2020 was about repositioning the business and putting ourselves.
In a position where we can extract maximum value from what is the very exciting asset and wassa.
That meant that we sold August Cresta limited at the end of the Q3.
And we also addressed.
Several elements of our balance sheet to set us up to speed.
And to invest more heavily in.
And Wassa.
And as Paul will take us through that introduces a bit of complexity.
And the financial reporting and in terms of continuing and discontinued operations, so bear with us through that and the explanations.
And 2021 will then be a much cleaner year from reporting.
This is Adam.
And as I said now we focus on Wassa and <unk>.
A lot of milestones that will set out and we've got.
The <unk> work.
Work that we pretty much completed now and we're going to be reporting on that on Monday in more detail on that.
And set out.
How we see the longer term.
<unk> and the potential of.
A large ore body of large resource what's the growing mine production already so that will be part of the technical report will realize will release on Monday with an update on our reserve and resources and show what the reserve plan looks like and the.
And then beyond that.
Extensions at Wassa and contribute through the <unk>.
We move on to <unk>.
Slide five.
And five in the presentation that you can see left hand side of the page you've got the key metrics and Q4.
Which really demonstrate.
And that continues.
Grass at Wassa and <unk>.
Great and will take us through some of those operating metrics a little bit more and.
Total of the financial metrics I think it is important to remember that that was achieved in the <unk>.
Covid environment that we've been operating and we've negotiated that.
Pretty well I think some impacts on the business, but we minimize that.
And as we saw at Wassa.
The step back up and the grade and the.
Fourth quarter.
And some positive drilling results, both up and down debt that Mitch will talk a little bit of a pilot and the exploration section.
And the thing is the.
And so important.
And as we note the safety performance at Wassa and.
The improved.
During the year and compared to last year of the metrics showed the focus on safety translating through and that's something that will continue.
Can we go to slide six.
Please.
There you can see what we achieved in Q4 and the full year versus the guidance. So.
Good day.
Delivery of guidance there.
What pointing out.
The Wassa was slightly above about a percent sent in the half above.
The above the range.
Which was the function of royalties with the higher gold price clearly higher than we budgeted for the start of the year.
We did process the lower grade stockpiles, given that gave us good cash generation.
Obviously with that great the higher cost ounces, but still cash generative ounces.
And we reallocated the.
And I entirely to Wassa with the disc.
Close of the Presto, so with the.
Outflows, we had appropriate been pretty suddenly in the middle of the range and.
Q4 saw some acceleration of that.
Capex net of a catch up with one of two items.
<unk> got behind during the year of that were in the initial budget and we managed to catch those up and one of the two things we brought forward as well to take advantage.
The fact that we're able to execute on the latest during the quarter.
And does that pretty broad.
Compliance with what we've set out and in fact.
We increased production guidance as you recall during the year of at Wassa. So.
Pleasing performance.
Moving on to slide seven.
The.
Outlook in 2021 and out focus that thing really comes back to what I was saying it's something what.
The rocks that continued growth and really that means putting the development in continuing to increase the development meters as we've done over the course of 2020.
And we're giving ourselves access to the material and flexibility to mine.
And also a lot of infill drilling that we want to improve the <unk>.
Influences, what we see already as well as.
Our knowledge base of what we're going to be mining, so a big step up and <unk>.
Both of those and also in exploration both.
And around the <unk> as well as more regionally, where we see significant opportunity and multiple targets.
To continue to potentially add results for water itself and.
And more broadly target new stand alone opportunities for us of the business.
So.
There's plenty there that keeps us busy in the context of <unk>.
Solid operating performance from Wassa, Youll see pretty similar metrics in 2021.
The.
'twenty 'twenty.
And that'll help in terms of cash generation.
That step up in investment and.
And we'll start to operate the paste plant as we go through Brian will provide a bit more detail on that and let a little bit to the cost, but gives us better mining flexibility.
So with that.
And over the.
Brian will take us through western a bit more detail grant.
Thanks Henry.
The move of it is slide nine.
Just just a bit of a recap of the scale of of Wassa with.
With the long section there.
You can see the current mining area of shine on that long section.
And as Andrew mentioned on on Monday, we will be coming out with the updated.
<unk> and reserve estimates.
But important Tonight and the day call on capacity at 4000 tonnes a day with we've done some more work on that with sort of shut and that I've of 2020 that that's achievable and then obviously with the.
The plant capacity is the kind of next mall Stein.
And that we're looking for at Wassa and.
And.
Mitchell talk about some of the exploration activities that we're able to focus on.
Through 2021.
And moving over to the next slide just the.
The characterize of the.
The quarter at Wassa as a solid quarter.
As Andrew mentioned safety and sustainability performance continues to be strong and our focus area for the team, especially.
And in a box of COVID-19.
So some good management controls the.
Yeah.
At Wassa.
Keeping the business running well for us.
Importantly, six quarters and O'reilly.
4000 tonnes plus per day.
And back off a little bit and Q4 compared to Q3, as we had some a little bit more high grade.
Coming through the plan and you can you can say that how that reflects and the great.
Recovery is still nice and stable.
And at Wassa as we've seen.
<unk>.
At the time.
Moving over to the.
The next slides.
Just in terms of unit costs.
Saying some of the ice.
Slightly lower volumes reflected in the in the <unk>.
Unit costs.
Sorry, Jay and I was starting to pick up a little bit of extra.
G and I with the.
With the sale of both side of prestige.
And as Andrew said, the soy oil and sustaining cost.
Pretty well along with our expectations when you normalize for some of the low grade material and the.
The additional royalty costs.
Moving on to the next slide across the slide 12, probably the the key highlights of me for the quarter at Wassa is really some of the infrastructure.
And we've talked about in previous quarters, but.
And really getting that to the.
To the shop and.
We completed construction of the price plant, where a little bit the line commissioning just with the.
And with travel restrictions et cetera, but we did get the.
November December we did get the commissioning engineers from.
From grants and say you say filters, so thats still the K two K.
Commission and grips on sort of.
That commissioning is progressing well and we in fact this wake with filling the first test.
Little bit the Honda original schedule box.
And part of really a high quality facility.
And that's been built 100% in country.
Without with a lot less ex.
External support than we had originally envisaged.
And probably just call aligning some of the sustainability benefits of of reusing the tailings material for backfill.
We will start to start to see more of that benefit of.
And our reducing the TSA of volume and footprint and obviously the reduction in greenhouse gas emissions.
And as compared to other backfill methods.
And just a reminder, there that the.
The capital cost.
And we managed to bring that in on the budget.
And you were saying earlier that we're looking at trade of $4 per ton this year, and that's really because of the ramp up.
Over the long said thats sort of that sort of five to $7 range per ton.
And it's adding to the unit cost, but obviously much better oil recovery from the from the ore body.
Similarly with the.
With the power supply the.
And then you gents.
Power station and commission.
Commissioned early in Q1, so that's now up and running and where we're already starting to say the benefits of more stable.
And our supply.
The electrical upgrade I think we talked about in previous quarters. So that's.
That's really enabling us to focus on the next five years six years of development.
And with a good stable power supply.
And all side of the.
And the watering infrastructure is also.
And up and running as well so lots of good.
And.
Lots of good work.
The complete until really high standard and.
And our managed part of the time on sort side, probably the most pleasing thing about.
About 2020 for us at Wassa.
And with that I'll hand over to Paul to talk a little bit about the financial results.
Thank you Graham.
Yes, 2020 was a transformational year as Andrew has just said so this is reflected and the financial statements. So just as a quick recap in terms of the key events, we had the disposal of price tier.
And then classified as a discontinued operation.
Since all of which may continuing operation.
Secondly, we had the refinancing of the Macquarie credit facility.
And then the third major thing that happened from the actual perspective was maybe the Knickerbocker office the London So.
All of these things were done against the backdrop of of volatile macro economic environment and also of the challenges of COVID-19, and so I think overall, a good year and the good core come through the business.
So if we turn our attention to revenue.
I'm on slide 16.
The 2020, the Goodyear production, which benefited from the strength of the gold price.
And the average realized gold price and Q4 was cash.
And <unk> and 16 and 26 for the year.
There was a non cash adjustment and respect at the Royal Gold stream and the deferred revenue component thereof.
It takes into account the estimate the number of banks is expected to be the levered as part of the stream of agreement. So that's over the life of mine.
What's the number of ounces, increasing this result, and the reduction to the revenue of just under $8 million and the reduction to the finance cost of one 5 million aspect of the.
Reported numbers, but it is Keith could you just pointed out of these adjustments and noncash in nature.
Moving to the EBITDA the.
Major impact has obviously been the removal of the press there from the results.
The strong EBIT of <unk> from the continuing operations Wausau.
And of $28 5 billion demonstrates waxes and ability to generate cash.
So the sale of the business.
Yes.
Property of September resulted in the following so because of the discontinued the operations piece, so by and operating loss of $14 million the loss and sale of the sharply six 6 million net.
Cost of the losses incurred during Q4 and related to price.
And it makes it the $1 $7 million. So those are recognized in Q4. So those of the final costs associated with the overall disposal, which has been reflected in the Q3 results.
Moving to the adjusted EBITDA.
It was $2 5 million of cost realized in relation to the settlement of.
Hedge possessions.
And those were hedge positions in relation to Q2 and Q3 2020.
And then there's obviously the impact of the deferred revenue component of that the spoken of bags.
So earnings per share, it's a material step up.
The full year 2020 EPS of.
Three $5 per share demonstrates the underlying earnings capability of Wassa and the OXXO the increase and the realized gold price the.
So the discontinued operations on the other hand reflect the loss of some prestige thats the.
And 47% number that can be seen.
And the FY 'twenty and 'twenty call them next.
Next slide please Jack.
Sure.
<unk> 17 in terms of the balance sheet.
And it really has changed significantly when we compare of the year and 19 to year end of <unk>. So.
The transformation of the bank have enabled this to happen. So firstly the Macquarie launch the seventh Tvs restructure of the beginning of Q4 2020.
So in short the revised principal repayment profile.
And those payments have been rescheduled and pushed out and we've increased the principal resulting an additional liquidity of $35 million and the business.
The big thing that and the finance team is focusing on next year is the convertible debenture, which is due to be redeemed and August 15.
2021.
And so that should really be front of mind for us in the business.
So we ended the year.
With the healthy cash balance of 61 million.
The net debt position was $45 million.
So what's the underlying performance of Wassa and the business has the ability to generate strong cash flows, particularly in the higher gold price environment, So with the.
It's useful just a point in time.
The additional liquidity factors from 2021.
Which includes the following two of those.
10 million additional principal from the Macquarie facility available.
The receipt of the deferred consideration from ex GR.
And there is the ATM, which was put in place.
During 2020, but it's key to stress this hasn't been used to date.
In terms of protecting.
Our diet and site, we have zero cost protection collars in place.
On.
And these relate to the years 2021 and 2002, so each year is 43, seven and 50 anxious.
<unk> <unk> hundred and then ceilings and 'twenty one of.
$21 76, and 22 on 88 and 2022 so.
And my view this is a good range of pricing, which preserve significant upsides to the gold price.
<unk> and the rest of side given cost protection of sensible level, particularly in respect of watches ongoing development.
If we turn to the next slide Slide 18. This is where you can see.
And the balance sheet has really changed.
And so if the sale of price. There. So you can see that we have moved from negative net assets of the positive from the asset.
So the sale of the prestige has consulted and the removal.
Of quite a large negative working capital position as well as of the removal of the 51 million rehabilitation and liability.
So from Q4 onwards.
I'd say that the business since the turn to have a normal level of working capital.
What does this mean from a cash flow perspective, so if we turn to slide 19.
So as the consequence of Covid and key one and the combination of.
The ongoing price the business and the cash losses that were incurring manager and to preserve cash and be really disciplined around.
Cost and the for other opportunities to generate cash.
This is reflected in the.
The capital spend profile, which was skewed more towards <unk>, 2020, and particularly Q4.
And increase in the exploration and the capital costs, where it accelerates during that kind of including the TSS.
The second thing, which we thought was certain planned expenditures were deferred into each to 2022 the <unk>.
Some G&A cost and maintenance cost and then we had some working capital management procedures, which we were able to do in order to carefully manage the cash balance.
So in Q4 and the underlying earnings of the continuing business similar to Q3.
The higher items as grant just explained which is partly offset by slightly lower realized price.
So the key points to note on the cash rich cash flow forecast cash flow break the story for 2002 and here as follows so what's the generated $68 million.
One point to note is on the tax.
Cash paid in 2020 was $25 8 million as shown in the chart on slide 19, so the taxes paid quarterly.
And it's paid.
And it's paid and the fall and in quarter two of normally three of four days after the quarter and.
So as such the tax related to Q4 2020 was actually paid in early January 2021.
So if we had normalized and.
Included in the cash flow forecast and cash flow waterfall chart, sorry for 2020, the actual cash tax paid with the entirety of $7 million.
And the Selic rate.
And that's included in the financing activities and the cash consumed by via.
Prestige and 2020 was at $1 million.
So the cash outflow in Q4 2020.
A number of catch up Capex items as I mentioned for the total was $15 million.
And so in summary, 2020 was the very significant and important year for Golden Star and the balance sheet has been completely repositioned to help and facilitate the growth and wassa.
Try and get hangover.
And to go through the exploration geologist price and Mitsubishi and <unk>.
Thanks, Paul.
We're going to skip over the first slide here will go to slide 21.
Slide 21 is sort of an overview of the current holdings that we have now along the eastern side of the Ashanti belt.
And you can take a look there she was roughly half of about 352 square kilometers and 90 kilometer strike length, along and what I like to call. The eastern side of the Ashanti belt, which is relatively unexplored.
This year, our exploration guidance from the budget's going to be $15 million of work back into the drilling phase again.
Prior to what we've done from the previous years.
And yet while we ended up drilling the end up finding significant ounces, so I'm glad to be back into the cause of the saddle again and as they say and going forward with the drilling.
And.
And the programs and when you're looking at for 2021 that budget of $50 million is roughly split in two roughly 7 million being spent at wassa and $7 million of more regional targets from their seven or $8 million from there.
We're going to be testing and most of the targets and the around watch on.
Home and on this a little bit better on the next few slides and I'm, just giving a brief overview here on this one so what we're looking for from milestones in 'twenty, one as the mineral reserve and resource that's been updated and as Andrew mentioned and we'll be releasing that on the first March which is Monday.
We're going to be doing some in mind targets testing in and around the current resource and reserve at Wassa and I'll show you some slides on that and some of the earlier results and we picked up and some of the drilling again in Q4.
More of regional testing of the targets and we've got down towards the south as well and I'll show you some more detail on that one.
Plus one and I'm quite excited about is we're gonna be drilling some oils underneath the some of the Denso pet so Bruce of weakness you've reached the west.
All of which we drilled and the past just to optimize <unk>.
And pitch and we do have the high high grade core and some of these pits and I think have some routes and them that I've never been tested before so we're looking forward to doing that drilling and as you'll notice on the on the bottom left hand corner. There is a joint venture that we have down there on the Bora concession, which has a good geological context, we'll be doing some initial testing on that as well so we'll flip over to the next.
Lineups of slide 22.
At the.
The wassa deposits one on the right hand side of the plan to you on the left hand side and isometric view looking towards the east and what you can see there and the greater than one five grams shallow and we're looking at and you'll see the two targets that we've got there and the uptick the extensions to the known mineralization on the down dip extension so.
These are targets that we're testing and sort of the near mine the <unk>.
And so we're not looking at the very deep at this point and time.
We're trying to define additional resources and reserves in the area, where we have immediate infrastructure. So if we do if we are successful in Australia and some of the results. We do have on there that are successful on that debt.
And could easily get it and they're drilled less often and be adding to the current reserve and resource base on that one so what I'll do is on the roughly show you. There's two sections there we'll be looking at.
And that's at $3 75 of which is an uptick of extension and one at 19 600, and so if you look at the slides you can refer to the new items on the talk because he roughly where we are within the ore body.
So on the first one we're looking at is on section.
19, $3 75, and that sort of up dip extension, we drilled two holes there.
The first of all was drilling and to more of an intrusive body that we intersected there with the lots of alteration, but not any significant intercepts on there the whole of interest that we're looking at the Arris walk three which was about 125 years.
Debt of the known mineralization that we've got the defined already with it and the resource and we intersect and the significant result, there as you can see this is an estimated.
Estimated true width, and we're looking at there of about 21 meters and about $6 nine grams per tonne. So again neither of holds and it will require a follow up because of our spacing that we're looking at between those wells is greater than 100 meters at this point and time.
All of that that we consider the success successful update the whole on the next one of them to show you is on $19 600 loss, which is sort of and that got to the ore body as we move that up towards the north and this was the deeper hole drilled down debt to cash mineralization below the extensive the resource which you can see on the slide are the.
Red outlined out of the same on the previous slide.
And what we found and this was we've intersected not only the main zone, which intersected the about 18 meters at three six grams per tonne, but we've also seen a continuation of the hanging wall zone.
And also the extension of the Footwall zone at depth of out with the two of intersection there of what the hanging wall zone being about four two meters at four seven grams per tonne and then the footwall zone, the seven five and three three.
Subsequently sent Sal we drove guest of all we have commenced the drilling of the the daughter hole and giving us roughly of 100 meter spacing. So we're again testing this mineralization further down debt.
And trying to get some volume and built out of that and that's really that the whole phase of the drilling at Wassa that were doing up dip and down debt. That's very course at this point. So we're doing 200 meter space fences and.
And we're testing roughly of 100 meters on up and down dip on those fences and approximately 10000 meters will be drilled in 2021. So this encompasses the results from 2020, and which is about 4000 liter. So at some successful so far and we'll probably have to be doing so until a follow up on that later on in 2021, Okay. So I'm going to go through.
The next slide which sort of summarizes the work that we're going to be doing on Wassa, which is slide 25. So we.
We have the.
The exploration focus and sort of twofold here, we're looking at as I show on previously the up and down dip extensions of mineralization.
As you can.
And see just on that slide is that it was kind of busy and but it shows the geochemistry overlaying with the geology overlaying with the geophysics.
And the little error middle of two five kilometers that you see on the right hand side there on the image of itself shows the extensive the underground workings right now so it shows you how much we've actually tested so far on the strike length on the one zone. There is two parallel zones. There. So there's lots of additional targets that we'll be doing follow up drilling on this year and that's going to be <unk>.
Moving roughly eight targets and we'll test all of those.
We have 27000 meters of RCM, and EDI and about 9000 meters.
Eric for drilling into the fall.
Following up with at Wassa, and so we're pretty excited about that and what this is going to do is give us.
Information and the one that you really guide exploration going forward and 2022 and subsequent years from yourself and then the main objection here is the main objective here is to define the material within 10 kilometers of the plant because.
And as Andrew rightfully pointed out and Greg and pointed out we have that excess capacity at the mill, which is roughly about seven four.
<unk> thousand tons per day and were currently going to be putting about 5000 tons per day through that so at the end of the balance sheet.
Our progress over to slide number 26 two.
26 sort of shows us more of the regional prospects that we're looking at so this is the.
The band, so and the picture really and HBV concessions down towards the south of Warsaw, which is approximately.
Church of what he would be 30 kilometers of <unk> 50, and father Brown at the extreme south of the 85 kilometers and those of you that are familiar with the Golden Star is a mining history. We have of haul road. The goes from the Wassa and yellow all the way down to father Brown and 85 kilometers down from there. So we have and access right through the center of this.
So on from that.
So yeah, it's exciting and we're testing roughly out of 11 out of the targets that we've defined and there each one of those stars that youre seeing over top of the geochemistry and there is representative of the target.
And we'll be testing of 11 of those targets this year and the whole idea with that is true.
Bringing these targets the level of confidence up into of drilling.
The drilling phase and so we've got it and then and exploration and sort of target the pyramid and we're trying to advance these targets through the pyramid and there and those programs involve of about 50000 meters of Evercore. We've got some IP surveys that we're doing and we've got roughly some follow up drilling of about 14000 meter of deeper RC and diamond drilling from there.
Okay, that's summarized as the expiration of and I'll pass it back over to Andrew to give us a wrap up.
Many thanks, Mitch and it's great to see that step up and activity and exploration of lot going on and.
And look forward to updating everybody as we go through the year.
Just moving on to slide 27, just the.
To finalize the presentation.
A lot has been accomplished in 2020, but really that laying the foundations now for <unk>.
What we do next on the.
The future development, particularly of what's the but also of some of those targets Mitch was referring to.
I Didnt showed the resilience and discipline in 2020 through the delivery during the pandemic and I think the important thing there and there'll be critical elements.
And we look to deliver on the longer term plans.
And critically we've also made major strides on the balance sheet in 'twenty and 'twenty, which.
It's been an area that's needed to be addressed for some time and.
As we go through the share with the settlement of the convertible debenture in August 2021 and really.
We set ourselves on a much more stable footing.
And as we go through the year, there's going to be a number of catalysts and the business and really that starts with the pea and.
We're putting out Monday next week, so with that.
And I'll hand, it on time.
Time, and we will take any questions that anybody has.
Thank you, ladies and gentlemen, and we will now begin the question and answer session should you have a question. Please press star followed by one on your Touchtone phone.
The here three ton prompt acknowledging the request and your questions will be pulled in the order of the received should you wish to decline from the polling process. Please press star followed by two.
Using a speaker phone please lift your handset before pressing and Keith My mom and for your first question.
Your first question comes from Don Demarco with National Bank Financial. Please go ahead.
Thanks for taking my call Hi, Andrew and team.
Maybe I'll just start off of the question about your underground mining fleet I think your fleet consists of 40 K ton trucks do you guys have intention to replace these with larger trucks and and if so.
How much would that increase the capacity of the single decline and what would be the timing.
Presumably the years.
Yes.
I'll, let Graeme give you the detail on that grant.
Yes, that's correct on say the plan is to as low as 40 ton.
The flight stopped coming to the end of the.
The lock will start introducing 60 to on flight.
That will start this year.
And and near that.
That and your flight on sort of rolling over a couple of years.
Hmm.
This year with the with kind of ramping up the pace fill on that will enable us to ramp up the production right sort of over 'twenty and 'twenty one.
The key focus issue isn't really to push the capital development and get the day corn down a little bit further ahead of ourselves get some more levels in and that will as much as the trucking fleet that will enable.
The bit of an increase in production.
But the 60 ton slate itself is not is not the ideal AK too.
<unk> and that production right beyond 5000 tonnes per day.
Right, Okay, because 40 to 60, I mean that the 50% increase.
And it wouldn't be a commensurate increase from 5000 up to closer to the net.
The six or 7000 with it.
No I think by the day.
The other key will be the K will pay the availability of stopes and and keeping the stock of available stopes at any given time that gives you the blending.
Capability from a grade perspective gives.
<unk> gives you plan and flexibility from the tonnage perspective.
And and.
Having the always things available and then obviously the flight will.
Ill add a little bit but the.
The day client and then becomes of constraining pace because you.
You have to handle all the various bits of traffic and.
Drills, and jumbos and things rolling up and down the day call on as well so.
Something on.
And Andrew touched on the pay I something.
And we can point to some of those key.
<unk> parts of the longer term plan and that sort of shy of that roadmap.
And yes, we're looking forward of the P E and just shifting to exploration Mitch had talked about some of the regional targets.
If you do have success regionally what would that mean that you could potentially continue with just the single decline at LASA.
And we're looking for the P E and and maybe with regional successes of possibly might not implement some of the plans and the PGA which might include.
The different methods to increase mining rate.
Yeah.
I think on.
I'll give you my view on that.
The regional success displaces the expansion of the underground.
What's the given the the compelling argument for that I think what it potentially could open up too is and expansion of processing capacity I mean, not certainly.
All of the way I'd look at it if we are in the position where that's the I guess, what you call the quality problem to have the we've got near mine exploration success.
Daily that comes sooner rather than later, so we were able to fill the plant sooner rather than later.
Built sufficient material on the longer term basis than I think you look very carefully.
Does that justify and expansion of the plant and.
And then bigger overall production volume coming out of the asset other than the Graham if theres anything you want to set of at this point and on that.
No that's exactly.
The answer that I would've given that the opportunity is to really optimize wassa and then if theres more material without with the exploration then.
And that creates opportunity to expand the plant side.
Yes.
Completely agree.
Okay, Thanks for that and maybe just.
One of my last question was actually could you expand the mill above 7% of nameplate and it was mentioned at 7004 hundred and I know maybe this is preliminary but how.
How high could you take it and what would be the cost potentially.
I'll toss that one of the grant.
We've done some very high level thinking about that but grandmother and if there's anything else you wanted to say at this point.
No.
To say that.
And the plant we have one of them not any we haven't done the detailed work on that all of them and really the focus has been on how do we on.
And the capacity that we do have.
Well, we've had a quick look at things you know there is plenty of crushed.
Crushing capacity.
And so you might need to add some milling capacity or you might change to.
Semi autogenous grinding.
The.
Method or something but.
You know you've got a very good footprint.
You've got really good infrastructure the.
The.
The price spill of mindset.
Nearly all of the Wausau.
The generator tailings will be going back underground sorry, you've got you've got Kylie.
Tailings capacity longer time, sorry.
I think it would be.
You wouldn't be talking masses of capital to do an expansion, but the preliminary as you say.
Yeah, Okay, well, thanks, so much of that good luck.
That's all from me.
Thanks, Tom.
Thanks Dawn.
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Thank you very much and.
We'll be back Monday, where we've got obviously take you through a lot more detail on the P ice and I'm sure.
There'll be a lot more to talk about at that point in time, but does that give us a call. If there's anything else you want the guys who are in the meantime, thank you very much.
Thank you everybody.
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