Q1 2021 B2Gold Corp Earnings Call

[music].

Good afternoon, My name is Jason and I will be your conference operator today at this time I would like to welcome everyone to the beach of Gold first quarter 2021 financial results conference call on.

All lines have been placed on mute to prevent any background noise. After the speakers' remarks, there will be a question and answer session. If you would like to ask a question. During this time simply press Star then the number one on your telephone keypad. If you would like to withdraw your question press. The pound key. Thank you I would now like to turn the call over to Clive Johnson.

The President and CEO. Mr. Johnson, you May begin your conference.

Thanks, Jason.

Welcome to the <unk>.

The call to discuss the financial results for the per.

First quarter two.

2021, the thanks for attending we had another very strong quarters youre going to hear from Mike surely hasn't been.

As we head on in the news release very good financial performance again, the driven by.

Strong operating performance of the mines, which allowed us the significant beat on the operating loss for the city cost and all of this isn't one of its still awareness is low.

During the COVID-19 sort of once again it speaks to the.

Two the tremendous leadership and the tremendous management and the employees we have on all of our sites everyone. On the same page, which was committed to continuing to remind you and COVID-19. If we could do it safely and responsibly with the great relationship the governments on the in the countries of the mine and I think we've.

We've learned a lot of trust there I think over time with the.

The cultural approach of we bring to the business of treating people with fairness respect and transparency I think that pays off at the time of crisis or the situation of COVID-19, because we established the mutual trust for the government of our employees on the company all willing to do the same thing.

For us to keep mining the do it safely and recognizing the impact of COVID-19 some of them.

Many steps we've talked about for two assistant the areas. We're in the office of COVID-19.

With all sorts of aspects of the launch, but I think it's been of great success.

The success or not.

The difficult scenario, where all of these kind of just one of the safety net so that's attractive to them.

Can can be continue the mining.

Pay taxes and keep the good paying jobs totaling the keep our communities the safest possible for them.

It's been a good thing for the for the industry I think we should pausing of going forward potentially in the in the mining space because I think post COVID-19. Many governance will look at who are the low performers, who what where the good business has to happen to your country during COVID-19 and I think you were sort.

Most of the minor it's not just of the others as well.

So the government should go up on that can be very positive.

In terms of the questions. So I'm just the generally we're going to read the results of the quarter and then we're going to talk a little bit of a grandma offhand is everyone. She was on the news release, we the delayed the completion of a final feasibility study on the grammar watching by we think globally about a year and the the economics of positive for the peacefully work that we've done so far.

But we feel there's a much better project, there or sorry of potentially better project. There wasn't the authorization for the drilling of other things that we can do so on the economics of a positive if we wanted to make it a better project and we're going to check the types of do that I think it's important to note that also we were gonna be looking at we had originally hoped to the potentially of boots on the ground on Sept.

Member of this year, if it was a positive development of decision.

That that was going to be some delay on that.

Anyway, because the the government had.

Was interested in our idea of jewellery settlement in stages instead of altogether of waiting two of my peers to all of you settled on the then start construction. So we've had conversations with the government where they've been interested in hearing more about the idea of but they did ask us to go and then do some public consultation understandably and all sorts of out of the government reviews for both of which will take some time. So we probably would have been looking at the six month delay.

The troops on the ground.

Regardless of the economics of it or whether you've had on constant from the students and that we're talking about a piece of it we started the year the delegation of detail as to what we think of why we think more drilling and some of the other things are important people talk about optimization of sometimes to perhaps I'm trying to gauge some some of the negative in this case, there's a number of things you'll hear from bill that we.

Defied.

And the project sometime ago that we thought were things we would like to of optimized school at the time, we were trying not to change the footprint because C. J on the pre feasibility study had.

And I.

Realize the construction permits should be of trying to stay within the bounds of about the bonus of about now we can open that up and look at the optimization into more of a bump up until we remain very positive on the project because of good conversations with each of our partner and we're looking to briefly to shorten the finalized.

Of budget over the next year on increasing the budget and budget and we should be able to the whole clean outs that soon but the.

The conversations we've had the we're on the same page. We're disappointed that we didn't have the robust economics, we saw the P. Eight.

The Bill will talk to some of the things that change, but they go through.

The other than ourselves.

Remain positive, but this can become a good out of something that could push it for us. So we'll go on to do all of that work I think it's really important to note as well of the government relations remains very good.

Okay and then.

Within the federal government, we had a meeting of the yesterday out of.

The call with the the representative of the Ministry of mines in Colombia, and they've been very supportive of error.

Wanted to hear that it's not going to happen to like way the very supportive of our desire to build the best project for everyone, including the Colombian people on the government as well so very supportive there on there's a lot of activity going to be happening as you'll hear on.

On the site in terms of working towards the settlement program all of our social programs for jewelry, there working with the government with small miners since a lot of good things are going to happen. In addition to the optimization to pretty much keep this project moving moving.

For it.

Well generally are Corporately I think there's just a touch on the strategy Beasley, we remain pretty much on the same page the strategy. We've been out for some time interest continue to optimize production loans that's around our sites.

So as we've seen.

We're going to continue to pursue our development opportunities, we'll see where we're going with those kind of law.

Okay.

Okay, I kind of and also looking at the potential for additional the pre.

Reduction of to call out from the Anaconda area as we announced on the news we are on.

Applied for an extension of the medical the license, which was part of the Anaconda with the government.

But we fulfilled all of the requirements on obligations to legally do that and we are we're in discussions with the government.

We speak about remedying the situation and we hope to have on a positive resolution of that.

But we will take whatever legal means we.

We have chosen if required.

Because we think legally we were you shouldn't have an award of the extension of the license. So we're working to we're working to eliminate any confusion on the I'd also working on the government on that.

It's an important project resident in fact, as you'll hear from Bill we had the planning to the plant we are planning to be trucking ore from.

In the corner on a kind of down to the <unk>.

Separately the work down to the for Cole of mill as early as early next year, obviously, that's subject to the get into the license issue sorted out and once again, we think there's tremendous potential net of conduct.

Not only for the saprolite, which we've seen the resource of about even the cross sell so far for much greater potential than the sharply and underneath of himself on the drilling or something so it's an important project for us and think it's a very important project to.

For the people on the government of until that's all of them.

The Holly as well and we're uniquely suited to.

Two of reduced from the two everyone's benefit given the proximity to the for call of them.

Other than that we're going to continue the focus on one other thing we've done extremely well, which is the exploration we've had great results around the rest of honestly if he wishes today, because we can usually of great results around the mines.

All the training resources into reserves of accretion violate that work continues on the Cisco on continues to go very well, but also with the board of exploration twice and being on the beach of bolt on.

We're very good at grassroots exploration is one of those balance sheets and we've got a very good exploration budget. This year of large budget, which I think should get the thing that if you look at the return on investment over.

The last three years or so I think somebody worked up of its about $19 on ounces are for the exploration spend to discover ounces of go on their cost of remarkably low so as I always say the cheapest ounces of smoking the ones.

Got you fine so Tom will talk about some of the exciting new grassroots projects that we're doing Adam touch on their balance sheets as well.

In addition, we're always looking at opportunities to grow out of M&A. It's been topic. These days you know we've said the people read that for us to go into that area would have to be something that we could find value for our shareholders on an accretive basis, not anticipating higher gold prices.

<unk> success, that's the discipline, we've had for decades and that will continue so we're looking for or what if anything would be of that change that sort of anything that's gonna be some of that we think there's an opportunity for us to judge show the value.

Well not like do you think of the way they need anymore on the few decent deposits that are out there.

Because we don't overpay and we did some of the heavy lifting before and the sense of building on Chicago.

The car and we'll go the bunch of calling on for call of whether it was very unpopular to be growing the hence the opportunity of the time being a contrarian, but we continue to look at things that make sense to ensure the value true from an acquisition point of view.

So that as an overview.

I'll pass it over to Mike on Who's going to get us some of the financial highlights.

<unk> discuss our financial position and then we'll be hearing from Bill and then the and then Tom.

Nobody like.

Thanks Cliff.

I think I can run through the results of the quarter fairly quickly. It was it was a good clean quarter on some some nice results. So just starting first day with revenues I, we had revenue of $362 million on.

On the sale of 257000 ounces and realized an average price of 700 or $791 an ounce on overall, we sold 14000 ounces more than we had originally budgeted and that's really a function of having higher production.

What you did in the quarter.

So the total production in the quarter on including our share of calibre.

Was the 221000 ounces basically 19000 ounces ahead of budget.

Total production from our three sites are operating mines was 206000 ounces, which was 18000 ounces ahead of budget.

So look on those individually of Corp. We produced 125000 ounces, which is about 8000 ounces.

Higher than budgeted.

Primarily a function of for cole of processing facilities.

Continuing to perform well.

We had.

Originally expanded for call of Mel to of notional.

Annual throughput rate of seven 5 million tonnes, we did budget 775 million tonnes.

For 2021 in the first quarter of 2021, we wish we had a quarterly record of almost $2 1 million tonnes or for an annualized rate of well above $8 million. So for all the mills are performing and we're seeing more.

Production as a result.

But his body was 58000 ounces some tough months of ahead of budget and that's a function mainly of higher than budgeted a mill recoveries.

We got the if you look at the the ore feed the was processed in the period, we had better recoveries from the high grade sulfide ore that we mined for main thing in the period.

And also better recoveries from the low grade stockpile debt.

Some of them.

Material, we went on through the mill and that was originally mined from Colorado, but both of them had better recoveries.

They know what Chicago on production was 23000 ounces 2000 lots of higher than budget and that was really just slightly better on all fronts processed tonnes grade and recoveries.

Looking at on the context of cash cost per ounce produced.

<unk> cash cost for instance, just for the quarter of $609 per ounce of those $54 lower than budget.

And from our three operating mines $581 per ounce and that was $60 less than budgeted.

And if you look at the the individual components for cole of $503 per ounce 55 less than budget.

And the the law of the the beat on budget on.

On in terms of cash cost per ounce is a function of a few things it's higher than budgeted production as I mentioned.

And lower than budget of mining and processing cost, we had lower maintenance cost at the mill in terms of.

Or I'm, sorry, low budget maintenance cost for the mining fleet and then we had lower budget processing cost at the mill, a higher mill throughput and lower cyanide use also.

To note are the new for coal power facility actually came on line in the quarter slightly earlier than we thought and we think that probably benefited cash cost by approximately $4 per ounce in the period against budget.

Masbate 608.

On the cash cost of $80 less on budget and that's almost exclusively on higher production in the period. We did have some savings on the mining cost, but it's mainly driven by higher production.

Chicago was 940 and that was $56 per ounce lower than budget and that again is primarily a function of the higher production.

Now turning to all in sustaining cost per.

<unk> sold consolidated including caliber of $932, an ounce, which was $146 lower than budget and if you look at our three operating mines. It was $919 per ounce of 159.

A dollar per ounce lower than budget.

And that's the function of a few things.

Obviously, the lower cash cost as described.

It's not going to go and also of the higher than budgeted ounces sold we produce more on sold more on that that that has a positive impact on the sort of fixed capital element. When you look at it in terms of on sustaining cost per ounce.

And also we had lower capex in the period, the that's mainly lower sustaining capital for its really the timing of them.

The fleet maintenance and rebuilt.

So that's really the those are really the primary drivers of the capital cost. We think are just timing on when picked over.

Of course later in the year just to give you the individual components of the all in cost for call of a 770 per.

So that was a 128 lower than budget. The Saudi was 18 to 190 for lower than budget on Chicago.

14, 75, which is which is the larger number but it is still $248 less of the budget just to reminder for for everyone on the line.

The the production from North Dakota was very significantly weighted to the second half of the year on the first half of the year, we're processing all of them.

Exclusively from stockpiles of site, while we continue to strip of the hydrocodone check pets and when we get into the those pits later in the year, especially the higher grade components of Volkswagen the second half of the year, we'll see that production level significantly increase.

Overall production wise cash.

The cash cost wise, we still think we're on an on target for our guidance for the year guidance is maintained.

And reminder of the significantly weighted to the second half of the euro of production for the first half.

Is between $3 19 for 15000 ounces in the second half of 580, 615000 ounces and that reflects.

Getting into that the.

On the battery grade material.

The second half of the year of both the core and the no in Chicago. The body is it's fairly consistent as it goes all the way through the year.

A couple of other comments on the operation of on Bill is going to give you. Some comments later, but just a couple of other thoughts the IDE for.

Sure.

What's not included in the budget of like guidance for for for Colo as any new material from the Cardinal area. We're currently looking at that now on what we can pull into 2021 mine plan, but that wasn't included in our budget our guidance on.

For call of solar I mentioned that that came on line.

We did I think we now manage the source of the remaining solar panels.

And get them on the way the site.

They were on the shelf of one point, where you can go through it. So it was kind of hopping. Unfortunately, that's resolved and so we're still on track to finish the solar plant by the.

The end of the second quarter.

But in the meantime, we did bring it online in the first part of it online earlier than expected.

Kind of couple of comments I think on really the income statement and good results nothing major to highlight the earnings for the for the period.

The $99 million earnings attributable to shareholders, the company and 91 million on <unk>.

<unk> per share and adjusted EPS was also on nine cents per share.

And she thinks of the highlight on the cash flow statement. So cash provided by operating activities was the $146 million.

That's pretty close to our budget and the and so we did have the peak as I mentioned on the on the cash cost side. So the <unk>.

Cost of our operations were lower but but the offsetting that we had some working capital movement is really related to the timing of that and certain tax payments that debt offset that so we ended up pretty much right on budget for the quarter for operating cash flow and assuming the gold price of <unk> thousand 800 for the full year. We're still on track, we think for that guided operating cash.

The number of somewhere around $630 million Approx.

Approximately $500 million that will come in the second half of the year.

As we get into that higher grade material.

The higher production higher sales and just to remind everyone that the second quarter's operating cash flow will be impacted by the payment of those outstanding 2020 tax liabilities, there's about $140 million worth of 2020 tax obligations that will be settled in the second quarter, the largest part of which is.

For for Colo, but $125 million of that total relates to either for Colette taxes of priority dividend payments, which of our triggered attacks on them all.

So have the addition of 140 will also have some other withholding tax payments will make for money that we're gonna pay remit up from sites of dividends to pull of the months of the cash up from sites.

Yeah.

A couple of things to highlight in the cash flow statement, our dividends to shareholders. During the quarter 42 million for U S per share I'm pretty comfortable of their dividend level right now.

Annualized that would be 170 million U S. We are paying one of the highest of what that yields right now on the gold sector.

And it's a it's a significant component of our 2021 free cash flows. So we will we will look on it again in the second half of the year, but as the Mitra I think we're pretty comfortable with that level of just now.

The only other a couple of items I'd highlight on the cash flow statement of investing activities, just under $60 million for the period, and that's about $18 million less than budget and and as I mentioned in the all in sustaining cost discussion some of the timing on capex for for mobile fleet and rebuilds.

Sites are we think that will reverse later in the year and on the non sustaining side. We were we went on the fairly significantly grabbed a lot of people was under $6 million, it's under budget, but.

We're continuing work on the feasibility study so we expect that will reverse and in fact as we noted in the news release. We are we are currently in discussions on HCA about increasing the feasibility study budget by approximately 34 million. So our share of the 17 million higher than we've currently budgeted and that would take us through to the end of or the end of.

The first quarter of 2022, when we expect to finish the feasibility study.

No wonder on the Capex side, we were about $5 million of during the quarter on exploration. That's just a function of timing of the game and we expect that to reverse.

Later in the year.

And so overall you know we finished the we finished Q1 for $512 million in the bank and 600 million Undrawn, we got the full amount of our revolving credit facility available on.

The drop in.

So we're in good shape back half of the waste liquidity wise and it was a good solid.

The production quarter and results quarter.

So even though those are the main things that I was going to highlight there. So thanks.

Thanks, Mike.

Yeah.

Bill over the use gives the overview of operations.

Overview of a bit about outlook for highlights from operations and what we're looking at going forward.

Yes sure. Thanks, Bob for you hear me Alright.

I do.

Yeah, Okay, well, thanks, a lot of the stuff certainly was the either handed out by client or by Mike maybe I can just provide a little more.

Color commentary to the to.

Two the actual operations if you look at.

You look at the overall, obviously, we're quite happy with how everybody did at all three operations for the quarter every site.

Exceeding its budget and we.

We really didn't see any any downsides as far as working forward into Q2 and into the second half of the year kind of go on mine by mine. If you look at the Cola.

Great quarter.

As far as development.

I think everyone's aware of we previously said that our budget was run at 775 million tonnes per annum, we put out on the press release that obviously the mill is running much better net we're still holding it at kind of what we're saying is 8 million plus but our life of mines are due here in the middle of the year. So we're going to take a good hard look at what we think that number is going.

Forward, we certainly believe that we've got some potential too.

Quite a bit of saprolite from both the Cardinal and from the mining code or the Anaconda area.

The discussing Cardinal specifically, we did receive our bulk sample approval. So we are right now out there starting to strip it and.

Or will be heading to the mill or already has started heading for the mill I think.

Or if not at the eminent.

So we certainly see going through the rest of Q2 and end of Q3, we will be developing that and of course as the.

Mike Insinuate or as discussed we see in 2022 on 2023 of the potential.

For additional ounces to come from Cardinal which are not in our current life of mine and the same the same story kind of holds true for <unk>.

From the operations perspective.

We're assuming that the current situation is resolved.

And we believe it when it gets resolved that we're going to see.

Truck saprolite and typical of the mill in 2022, and given the fact that we have of large.

Additional capacity for the mill.

Those numbers could be quite significant as far as changing the life of mind.

So once that's resolved I think in Q3, we're talking about coming out with what we wanted to do there and putting it into production in 2022, and it's also I think it's important to note while we're talking about.

Trucking typical we see that is like phase one of the project Tom's group continues to drill out there and we continue to have some success as far as looking at the hard rock and so once we once we get the phase one study is complete and get it all set up for trucking, we really wanted to take a hard look.

And is there the potential to put another mill up in that area and so that's kind of that will be the emphasis once we finished the trucking.

Study and get that all put to bed.

We'll move on to what is the trade off look like trucking versus putting the mill up there.

Quickly on the solar side of my Kid of hinted at it but solar plant is up and operating really well.

I think we've been publicly stating that we're kind of at 75% for <unk>.

<unk>, but the reality is were probably higher now we've seen.

Great great.

Returns on that solar as far as reducing our power cost and we believe the in Q2, we're going to finalize that and we will have the full benefit starting in Q3.

Going too.

Oh Jakarta.

What's your total once again had a really nice quarter.

No issues as far as mining or milling.

Right on schedule the.

The development is as Mike pointed out the key is the second half of the year.

The development for getting into Wolf share three remains on schedule, we don't see any issues there for for meeting our targets.

The underground remains well, it's a little bit behind we still see gold coming out as projected in Q1 of 2022. So overall no issues at all at <unk>.

Maybe one of the things to talk about is we are in the process of kind.

Connecting up our overhead power lines.

That facility of the power facility in North Dakota operates in Standalone configuration of its an island.

We believe by connecting to the overhead power line that.

That will be able to continue to reduce power cost are significantly throughout the rest of the life of mine.

By taking the off peak power prices, which I.

I saw something I think reduces almost four cents per kilowatt hour for those hours.

On the off peak hours.

Looking at.

Masbate Masbate once again, great quarter, that's the.

I continue to say that the project that is probably just day in and day out just performed as designed we continue to see.

Better.

Better recoveries and better grade at Masbate, as we say every quarter.

And that certainly that contributes towards the.

The over over production for the quarter. The rest of the year. There is it's kind of business as usual we are in the process of developing.

Another lift for our tailings that remains on schedule. So overall on the operational side everything completely as as the.

Advertising and as predicted.

Maybe talking a little bit of scribe asked a little bit about Graham of low day.

I think it's important to talk to start out talking about what the feasibility was trying to do it and really get our head around why why we've now talked about.

On the handcuffing, maybe the project design from what the pre feasibility was.

When we took over the project.

We agreed with Anglogold.

That we were going to basically hold the design and the reason why they stayed already pull the construction permits so the footprint had to be had to remain the same.

And we do basically ahead of just trying.

Optimize within within the existing footprint, what we found very early on is that there was a lot of things that we wanted to do and some of these things were quite significant things like.

Brita diverting rivers in a different direction.

Moving moving infrastructure facilities, taking a look at the tailings tailings pond.

And in order to do that we would we would have been required to open up the permit.

So we've decided to go ahead and.

Maintain the same footprint, but keep a log of where we were going and what we could change and so.

When the when the feasibility of was done I remember there was the one of the key things was.

The.

Upgrading the resource from inferred to indicated and that was very successful.

And then.

Updating the cost.

And that was all said and done we looked at it we said well. This project is positive we certainly think that there's a better project here and so we presented it to anglogold.

Anglo agreed with our concept and basically what we decided is that we were going to do some additional drilling because we thought there was some further potential for two to increase the resource up the indicated.

We were going to take a look at the engineering design as far as taking the handcuffs off and moving things around.

And we thought it was still critical because we do think this is the project and we do think this is something that the we can move for quite rapidly once we get what we are now considering kind of the.

Updated feasibility we wanted to make sure that the social aspects continue to move forward so things like resettlement.

We've been talking with Anglo and we've been talking to the government about how we can make sure of that that stays on track there we are the.

The Colombian government is in the process of formalizing some of artisanal mining within the within the region that the very positive development. So we wanted to continue to support that and we wanted to make sure. Some of the critical path items things like bringing the power line into the region.

Continue to move forward. So all of these things we put together was a packet for anglogold.

Conceptually they agree with the concept and we provided of budget to them. They are in the process of having a look at that we think very shortly we will continue to move this project forward we see.

The updated feasibility study coming out of the end of Q1 and.

Obviously, if it's positive we would mobilize shortly thereafter.

And I think I think it was quite the talk a little bit of it it's really important to remember.

The difference between our current or proposed new schedule on what the actual schedule was was not that different because when we talked about kind of doing the b two way when we were going to do concurrent resettlement. The government came back to us and ask for us to do some additional of stakeholder engagement and to have them of review of the results of that stake of engagement. So we saw the potential for six months.

In any case, so we're not really that far off of that schedule.

I'm talking moving maybe not of Chiacchia I'm not going to spend too much time on that.

As we've said and we continue the message we do believe by the end of Q2 the <unk>.

Also be out when we will be discussing that.

Clubs or anything else, what you want me to talk about.

Right.

Yeah.

Hello.

I was on mute.

Yeah. Thanks, Bill I think the good sorry, maybe for the for the interest of the.

People on the line, maybe you could talk a little bit about some of the some of the issues between the P E and the feasibility work on the study when it comes on next year will not be an updated piece of go to show that it will be the feasibility study. So that we've done to the piece of that he worked for us given us some economic indicators, but we have not completed the study.

And I think that's an important point, but can you maybe talk a little bit about some of the differences.

The between the P E and and what we're seeing now in the piece of moving work that we've done.

So some of the factors behind that.

Yeah sure I mean, some of the some of the key ones.

Related to the resources I said it.

Obviously for for a 43, one on one feasibility study.

We can only use indicated and we did the.

The modeling all of the on Graham of low to rich.

And and and.

It didn't include the oxides of net.

The pit design itself has changed a little bit based on based on some geo tech issues related to the pit design, but the but the mining itself the mining rate in the in the mining.

Design remained exactly the same on the milling side, we believe that we have.

A more elegant and more efficient.

The milling process.

We have looked at it it certainly was cheaper we've included some additional.

The equipment that Werent there wasn't in the pre fees and that's just due to the level of detail.

The the tailings facility remained exactly the same.

Power overhead power lines come in.

Some of the key some of the key cost drivers which had changed.

You know things like the power cost was slightly different we had updated some of it some of the cost due to inflation.

And then one of the key ones as you talked about already is the resettlement. We wanted to move people out sooner instead of the the way that the way that the pre feasibility had the resettlement was it had a really long period.

Where you're headed to complete fully complete resettlement before you can start construction.

We were looking for concurrent Arizona the issue there currently is.

A river that flows right through where the existing pit or where the future pit would be.

There is a big tunnel on where they would have heard of debt. We think that there is the potential to make that would make that a better project.

Some of these issues.

So those of the key differences.

Okay. Thanks, I guess, just maybe on a from a strategic of the corporate point of view, we're quite well known for being.

Aggressive in beginning of seeding aggressively being reckless I always point out to people, but the in terms of the way we approach projects, we would do with the very safely and responsibly and the do it quite all of them Cook more cookie than some others on the industry May move I think this is the this is perhaps an example on some people recognize of the of our discipline that we have of project.

That has some pausing of economic indications of albeit not as robust as the months before but we took a look on it and so what sort of seem to do one of the best of familiar because we're famous for building quality projects based on quality work.

And the attractive economics. So that continues so this is an indication of perhaps just the anybody needed to know that I don't think they should've needed at the mill and given up the stupid and the jump of financial and corporate discipline, where we think we can make it up on the project and our partners and ourselves are prepared to believe for that concept as well as the trade spend some money to do it so at the end of the day.

The delay is appropriate.

To do a lot of really good work and then have a look at what comes out we're hoping we will have significant improvement.

From the economic indicators the causes of will not keep up the rest.

Threshold given the strength, we see so much upside where some of that upside potential and the work that we're going to be doing so.

So thanks, Thanks, Bill for that and I'd like to pass on the tongue Derik, another turn of a little bit of on some of the things he's excited about about our.

The large exploration budget.

Budget this year on some exciting new countries and targets for us.

And the client.

Hello, everybody.

As your as you know we have on an exploration budget. This year of some $66 million to be spent.

Not only on our main projects, but also and grassroots exploration of effecting the grassroots exploration we're looking at.

Just over $27 million just for you.

Comment on the exploration around the mines.

The mass body, we're continuing to drill on the pit edges in the deeper portions of the pits.

Where the pits get bigger with the.

The better gold prices that we're seeing now.

And Molly we're continuing to do exploration down plunge on the Cardinal.

It remains open and we're continuing to do exploration in the Anaconda area as that area of remains open in Namibia. Our exploration is almost exclusively focused right now on what we call. The OTG 20, Threes zone, which is about 100 meters away from a wall shake.

More on that later as the work continues on.

View that as a positive sign for them.

Throws your total.

And the grassroots exploration.

We're talking about.

The significant budget within that budget, we're talking about over 30000 meters of diamond and RC drilling on some of our newer targets mentioned.

Mentioned specifically.

Part with respect of Stan.

The scenario we've been looking at.

At the same because it kind of stays.

Yeah, a little bit but the.

For probably close to 15 years dating back to the been the days.

It's an area we had visited back debt and we continue to work on the relationships with government and geologists of that country and that led to us for a few years ago of being awarded some licenses in the country.

On the license we have.

Ah right near the three world class of ore bodies, Marin PAH, which is the everybody.

There's a large variety of numbers related to that but it basically the old world.

The gold mine at the over 2 million ounces of production per year, and then Theres two other 10 million ounces deposits of the living area.

Our work on the area of the Data's been trenching Auger drilling.

Some lab programs and were just about the start of 10000 meter RC program. This week and this will be called the Lady in the year with Diamond drilling.

This is an area of a world class deposits as of March.

<unk> seen a lot of exploration outside of the exploration of being done by.

On the local government called the mats.

We're very excited about this area.

In addition to that and then you have almost 8000 meters of diamond drill of planning on that property.

Currently.

Earnings with one of your 51% from the line that we're up we're getting close to having the.

70%.

On this project we're excited about the area is on the on strike with the new.

The new discovery called the car in the geology of the current.

<unk> on two onto our ground and we've had some.

Some decent golden armies in the inner.

And our overburden drilling in the til drilling and then also on some of our sales happening in certainly what's happening. So we're excited about the potential for that.

Of that hold something.

Something new this has come up on just recently.

We've been awarded licenses in Egypt, and the historic mining area.

Those licenses of just being papered right now so I don't have too much detail on on that at this time on we'll have more later, but it's an area. We've been again been focused on for several years.

Doing grassroots exploration of evaluating the potential of that area. So we are excited about it.

And then we'll continue doing grassroots exploration of the other targets.

The other areas of the world that hopefully will.

The available for more discussion on later on this year.

The question.

Thanks, Paul I appreciate it.

I think of operator, I think we're ready to.

Open it up for questions now.

Certainly at this time, if you would like to ask a question. Please press Star then the number one on your telephone keypad, we will pause for just a moment to compile the Q&A roster.

Your first question comes from the line of Tyler Langton from JP Morgan Your line is open.

Afternoon. Thanks for taking my question its just to start with the I guess Grandma I take I mean could you talk a little bit about you know to.

Kind of make the economics more attractive just you know the importance of either sort of increasing production at the project, we're kind of lowering operating cost or capital cost just trying to get a sense of.

And maybe kind of what's sort of the most important are the bigger focus.

Sure Bill.

Yeah sure. So certainly we see some potential for capital reductions.

That's one of the big ones are another one of the big ones relates to.

Increasing the ounces.

So that we can generate over the life of the project and this includes kind of a drilling program within the existing.

Design pit. The there was some are there were there were a few ounces left the within.

Within the existing pit, which where the.

In the inferred category and then just outside of outside of the proposed pit, which would be in the measured indicated and inferred category. So we see those two things really as some of the key.

The economic drivers and then, particularly if you look at the Capex as I said there are some mostly related to infrastructure projects, where we think we can bring the cost down things, where maybe maybe of the project has been going it's been designed for like 10 years, now where people kind of lose focus on if you had a blank sheet of paper could you optimize things and that also relates to.

Certainly the construct the ability of the project and so those are some of the things that we're looking at as far as the Opex. We don't see a lot of changes that between what we have now versus what would have a year from now.

Got you Okay. That's helpful and then.

Switching to the Colo with Cardinal I think maybe last quarter, you talked about out.

Of that mine potentially contributing I think 20 to 25000 ounces kind of in Q2 and that would be kind of the the main contribution for the year is that kind of still what you're thinking of I think maybe I heard some comments of talking about maybe contributing in Q2 and Q3 Sky provides for more color there that'd be great.

Yeah, I think what I said was hopefully what I said was 20 to 25000 ounces over 2021, starting in Q2 from the pulp from the bulk sample right. So we're talking about 20 25000 ounces out of that bulk sample, but I will say that it looks to me like where while we do not have of yet now I must stress that and I should also.

Stressed it.

That is an inferred resource.

That we see we see starting in really right now through the end of the year, we're going to start mining of card on so there is potential that it could be a little bit more on that.

Got it great. Thanks, so much.

Thanks.

Your next question comes from the line of Olivia.

Habib from Scotiabank Your line is open.

Thanks, Operator, hi, Clive and team congrats on a good quarter and thanks for taking my questions.

Thanks Louise.

The first couple of questions by the are.

Our on the granularity.

And then I guess I can direct for the bill you've already answered a lot of the questions I had zone.

The good overview on that front, but in regards to the additional I guess extended reach settlement just to make sure that I understand correctly was this due to additional footprint needs to be added or is this sort of sentiment all within the plans underway.

No. The obviously it was it was always even back in the AG a days.

There was a quite a big resettlement, which went along with it. We we certainly have provided now more detail around that and we're in the process of really working through our resettlement action plans of our wrap has been developed and the the difference really was as I said the there was a condition precedent for the construction permit which basically said you had the.

You had to do all of the resettlement. So everywhere in every region you hadn't moved everybody out and what we realized is that there was a big chunk of it.

We could do.

And then we can start construction on there were some people on the periphery that we could then deal with it as we got to that area and so that's that's really the difference but the of the.

Overall for seven months of basically the same there are some people that are saying that they're in there of some people stay on their out but in general the quantum is pretty close to the same.

Got it okay.

Thanks for that and just kind of.

Talking about the optimizations that I expected.

Is the plan basically to get closer of the economics shown on the P. Eight before doing the green light to the bulk of what I'm trying to ask is instead of point, where you would kind of walk away from that I'm looking at or.

Is this kind of weighted the point, where you would make a decision essentially of my problems.

Yeah, that's quite probably answer that from an engineering standpoint, I mean, all we want to do is we want to make sure that it's got the best economics possible and that that is the most easy for us to build.

Yeah I think.

We are going to spend excuse me on a lot of money in addition.

With our partner of ours.

With respect to the ingredient in the budget as we've talked about in the news release.

So we definitely youre doing that for the reason of the reason is because we think we're seeing enough indicators as bill says when do you get when you start taking of the handcuffs off of the engineering side of the design side.

Of things that we see significant potential to make of the project.

Debt, we would want to go forward. The so the economics today are positive I guess.

Some companies might use mechanisms like hedging of central to maybe look at making gross things better potentially but that's not where we are in the sense of we're looking at it from the technical point of view, saying, we think we can have more ounces. We think we can do all of the capital if you look at the.

All of sustaining cost based on the current economics from the season, where the work I think of it was somewhere around closer to the mid sevens. So the attraction of project from that perspective, Ken.

Just kind of you know the launching of the capital and add to that 15% of ours. So we wouldn't be.

The ourselves on the NGA.

Our companies I believe the can speak for them, but the leads that we are not the companies that would continue to pursue something if we thought we were sort of flogging the dead horse with just giving false hope.

We very much see an opportunity here to make this the project that we would want for development.

Perfect.

Thanks, Glenn and by then.

I have a more of a couple of more questions, but I'll, let other ask the questions and then jump back in the queue.

Okay. Thanks Louise.

Your next question comes from the line of Geordie Mark from Haywood Securities. Your line is open.

Thanks for the time today the cuda.

Maybe if I can expand on on some of the debentures question too.

No to the playbook.

Just.

In terms of the the change in budget is that largely drilling expense related unit.

In addition to the 18th of it wasn't because it really was already planned.

D C.

Yeah.

You want me to answer that question.

Yeah.

Yeah. So so jordy, the there's kind of three components there for sure.

Youre right. There is a big chunk of drilling, which goes along with that and I can let Tom or Brian kind of the.

Maybe give more clarity there, but there's also there's also the engineering component, which is which is more just the just the actual consulting and engineering aspect of it and then there's the social component of it like I said, we do want to push forward some of it some of the key social issues and so we have put some money in there for things like basically preventing.

So some sort of inflation happening with resettlement purchasing land packages now.

Making sure that we've got the right areas available for resettlement.

These types of things that also will pick up the chunk of the budget.

Yes.

Okay.

And then.

Also you mentioned of the Pearl on is there is that in terms of trying to bring that on line two.

Basically moved the project food all of the project shortening the food.

For the optimization.

Well, what we know is the power line is absolutely on the critical path, regardless of what happens right. So we've been in negotiations with the with a couple of power companies down there and of picked a group that we'd like to do the studies for us. So they have to go out now and do a full ESI a they have to do all of the engineering and basically they have the design design of the route on the <unk>.

Right and so they're talking about something like a 28, the 30 month scheduled to do that so we decided at this point the.

We're going to put a little bit of money at risk to get those studies going and so that's what that is.

Okay, that's excellent and in terms of the to stay on pattern because of just for color.

We call the two thirds solar panels is hitting beyond the owned capacity is that right moment of a nominal baseline at least an additional the additional with the flow into 'twenty clubs.

Panels in place Cheesecakes in the linear sort of.

The capacity increase there of your condos Smith with.

Battery storage sort of limitations day for delivering move out of into the group of yet.

So I'm Super bullish on this on I'm going to pass that one on the private genre Halle who's really.

Really more qualified to answer that.

Yeah.

Yeah, the well plan on trying to maximize our solar power usage or the 75% of Skus online right now so.

Because of.

The loss in panels for about 25% in the fire and theyre going to be.

On site very soon.

And then install we plan on having that in operation by the end of June or so so it would be up the 100% of capacity in the.

Hopefully increase we should be able to increase the amount of power solar power contribution from from that.

Does that cause of us.

Yes.

Okay. I was just wondering if theres going to be beyond the the original expectations given the pool.

Where we think we have a good shot at it.

We've been exceeding expectations, just with 75% capacity in operation So.

Hopefully, we'll be able to continue that the with the additional solar panel installations.

Okay, that's great.

If I can just one more on.

Moving over to Yucca obesity experience on on the solar power and looking at a two LNG. So the source the who.

What sort of zone.

The capacity you're thinking for for that power plant.

[noise] Dennis on trucks up.

Yeah the.

The power plant, we're looking at for Tiago.

B of combined LNG solar plant.

We're currently looking at of about 30 megawatt plant very similar to for Cola.

For that right now.

So the optimization when it kicked up a little bit, but it's in the hidden that magnitude.

Okay. Thank you for that.

I can go on for questions. Thank you.

Great. Thanks, sorry.

Your next question comes from the line of Josh Wolfson from RBC capital markets. Your line is open.

Thanks Bill.

Bill earlier on the call you mentioned that the Anaconda trucking steady was going to be continuing on this year could.

Could you clarify.

What the permitting challenges there.

Ah relate to and I guess, it sounds like you're still able to proceed with any condo or if not what's the sort of implications are.

In advancing that opportunity.

Yeah.

Cool.

Yeah, So I'll talk as I said so.

I think Clive was pretty clear that we're kind of working through what what our permitting issues are right now, but what we've always said it. It is the separate license right. So it would have to go through with the full permitting and we're working on those studies right now so obviously for permitting you would need in fully S. I E.

We're in the process of completing right now you would need some sort of a feasibility study.

And what we're calling out as kind of the phase one.

Aspect of of the Ana kind of project all of those it is our intent to kind of complete those in Q3, and then you would have to go on look at what the license conditions would be for actually bringing the project up how it would be for tolling. It through for Cola all of those things would need to be discussed. So that's why we're talking about really you're probably with the exception of maybe of Bulks.

You're probably not going to see any ounces that best case.

Probably in the second half of 2020 to be on truck.

And that just so I understand that those answers that would be produced.

The a minute total part of permits.

The issues there do not affect the ability to to truck the ore to typical low.

All of that stuff has to be resolved before we could do it for sure.

There's some there's another there's a few different licenses there, though there is there's been a call on there's other licensees that are not impacted by the current discussions going on one of the government about the medical on the license, so, but but yes, clearly when the when.

You should be very clear about that we need to resolve this issue with the government about our right to the two of the extension of the license kind of hoping to resolve that.

Shortly.

Okay, and then looking at a kiosk at any update that's going to be coming out.

I guess, we won't have the updated grammar low to the numbers until early 2022 whats the potential.

<unk> for the team to look to advance that project in the second half of the here either in lieu of criminal okay, or even alongside of assuming kind of low tapers here next year.

Yeah. That's I mean, we haven't got two parts of that yet because of waiting to see the results of the the feasibility study on kiosk and just see where the at least the threshold for us to go forward.

We're going to know that by the other things up on the memory or do you have to of conceptually. If it was a positive development of Susan there. We could look at we've talked before about the potential for if they were both positive.

Graham on the and the jacket, we wanted to the about both of them, we talked about various possibilities one would be to sequence. The the construction team will never build too low buys at the same time for US one of our rules.

The key to our success for about one great team, but you can also look at potential uses of the team for sports initially, let's see here that's been on the launch of our Jack in the moving matching for the next one.

Whichever one you do it and then and then similarly, the the mill construction team when they complete the one projected moved from other so all of that of course is based on the.

The the final feasibility of scrambled.

Most of the feasibility study the updated feasibility study of the works out right now that will be the extent to be prepared to release of the middle ear of Jakob.

Understood.

And one sort of final one just in the language in the release.

The comments about Graham of low Te.

And the I guess, the expanded footprint that could require the permit modifications.

Does that not affect on the license, but that potentially affecting the implementation schedule.

Is that is that just for I guess the project as it why is the if it was advance here or desert the potential footprint change and the permitting changes.

The implementation schedule.

If it was advanced next year as well.

Billions of them yeah, yeah. It is it the.

The language, maybe it's not quite as clear as it could be so what we're really talking about the the way. It works in Grandma out there in Colombia is that the kind of have three levels of of permit modifications right. So there's this kind of insignificant and these are things like when the resolution of your topography gets better and your road has shifted just a little.

Right and the debt, there's no real kind of major social or environmental impact change and those those are kind of you do on the fly and then and then there's these minor modifications, where it might be where youre moving something around just a little bit.

And once again Theres no significant.

Environmental or social impacts or potentially positive of social or environmental impacts and those have had a small review process and you can kind of do those on the fly and so those of the things that we've always been talking about inside of the existing.

The permit we could do now what we're talking about is kind of as I said taken the handcuffs off of it and looking at what we're calling potentially major permit modifications, where youre actually taking structures and maybe moving moving them into a different valley or moving moving moving on road access road somewhere else, which have real impacts.

You have to be investigated so as we go along for the engineering process now we've got to start looking at.

Okay. This is this is really optimal this is how much money it could save US is it worth trying to get a permit modification to do that if it is then you start talking with the government what would it take as far as updating your impact assessment. So all of those things are now going to be in play as opposed to just saying.

Okay, we're going to keep it we're going to keep it to kind of ease.

The non consequential or miners now we're talking on let's talk about majors I don't like the the the phrase that we're that we're increasing the footprint because that's not necessarily the case with what we're actually doing is we're kind of modifying the footprint and in that modification, we may be changing that the the potential social or environmental impacts and those need to be evaluated.

Yeah.

Okay. That's a lot more color. Thank you.

It's important to note there we talked a bit about it earlier on but the relation of the Colombian government is very strong.

The strong Canada, Colombia, the relationship with the administrator of remains for the government. The government of very supportive of the responsible mining is an important part of.

The other economy. So we've always said of Gram, obviously on the great location in the mining just minutes, you'll get if you flew over.

People, who are of Columbia gas of Where's the best place to build the first larger the gold mines in the country, probably pick you would trigger on Malawi, absolutely tremendous local support the community and there is some disappointment because they felt the she's going to crank up pretty quickly, but you know once you get if we were successful of we're looking at doing this in the really important.

Most of the jobs and Theres a lots of people working there now of that continues all of that work continues as we talked about the settlement with the governor of small miners and other things so between ourselves and the G and there's been a lot of good work done here over the years since that's the important to note that on the on building lease.

With the local treatment under federal government on the all governments and Theres a lot of support for this project. So we think.

It makes a lot of sense of the government gets that and I think they're highly motivated to work with us the secret of of Lucky.

Because of the best approaches that can be enter into to get the built for them for.

All sorts of positive lesions for the economy local economy.

So the the.

The overall benefits to the government on the people of Columbia. So there's a lot of support for this program is really important to keep the other bucket.

Okay, and then sorry final question I know I'm, taking a lot of time here when you think about this.

<unk> changes and modifications in the footprint.

Are there permitting the elements that you are able to accelerate before that first quarter 2022.

Target day or does that sort of day, then start the permitting process for these modifications.

Yeah, well that's a that's a really good question and the answer is no.

We have to look at that that's really what really literally what we're doing right. Now you know as I said, it's just it's a huge trade off study in our mind on the the potential delays.

As far as permitting versus the potential economic benefits as Clive indicated and I said already we have a positive project now, but can we make it that much can we make it even better.

Those of the things that we're looking at what I will tell you as well you have to remember that the resettlement still kind of is done at critical path and so we're now working through that percent of an action plan and that's really going to push us out into Q1 2022 in any case and so how do you play around with that that's what we're looking at right now.

Okay. That's great. Thank you very much.

Thanks for questions.

Your next question comes from the line of Don Demarco from National Bank Financial Your line is open.

Thanks, a lot for taking my call day.

Just building about one of the last question there was mention of comparing Chiacchia the Grandma day.

I take this a bit further and is there a chance for some of the projects that Tom talked about to take priority over Graham Latte say on the next 12 months I mean, you've been in Egypt in Finland in your back of San for a few years now which of these projects as most of the Dan maybe even closest to the EBITDA.

Yes, no I think.

No I mean, we haven't been working on and leisure tourist Mecca sent for a couple of years always on some work in the spec for style of is relative you know this is pretty early stage stuff, where we've done some other drilling and things like that and some.

So we're doing some reverse circulation drilling in the.

Heading towards Diamond game, as well and for both scale. So they're all pretty early stage, they're really big attracted targets, but we don't want to or some other day there.

On stage.

So we're we're a long way away from talking about the PTA in any of these things, but where the elephant country of the circumstances for looking out in that students of all over there Tom the other day you wanted it covered on that further.

I think I think that's pretty accurately but we're still early we're still early on in the game.

As Clive says the user all elephant country targets, that's why we why we chosen but the.

I don't know that within the year well for sure not within the year, we're gonna be replacing the the.

On the other development projects with these.

Okay great.

Then the you know given the Grandma K N P vs. In the $500 million range at this point and obviously as you mentioned there is visibility for it to grow but.

Is this project perhaps of the magnitude now that's better suited to one owner and it may be if you believe in the pocket of maritime tend to increase the ownership.

What are your thoughts on that we know from your previous comments of angles likes the project as much as you did.

Yeah, I think that.

I can't speak for HCA, but the.

We've had lots of calls recently of course talking about the situation and be very transparent.

In the.

The joint venture.

From what they.

I took a look at our initiation of what we're saying we of course, one of their input into that so that will be coming out of shortly with the quarter and their thoughts on where the development projects, but.

We're both the supported it wasn't as robust as the economic stresses on the P. J, let's see the opportunity as we said the other times you can make that better in terms of the ownership.

I think that.

What I've heard is the D. G I spoke.

For the spend it just isn't a lot of money along with us to see if he can deal with those aren't the need to see if we can make it a bit of perfect. So I'd be surprised of where.

We wouldn't be considering changing of our ownership of the now with the best of all the money and time of et cetera, and believing in the path of where on the potential.

Once again the cause of asking that question in the quarter, which I think comes out.

The middle of May.

But the indications for based on so, let's just say the art.

Do you Wanna be player in Colombia, the quite other projects to keep it on them et cetera, but they're pretty excited about so where they keep on watching what they've said to me is an important part of what the what they do on Colombia.

They were hoping to with us as operator to showcase for what we could do together so the Colombian government and we still hope to be true of to do that with your stomach the play as well.

Sure we don't view the ownership of opportunity of Kingdom free so should we consider that one.

And what I've seen so far I don't see the there's going to be of a willing seller.

We don't think will go forward for district.

Again, I can't speak for each other but that that's what.

We've been told from the COVID-19 usually.

Okay. Thanks for that and just finally, you guys had a strong development team who built for Cola finished at the KOL expansion with Gram of Lockheed the delayed is there any motivation to deploy your development team on to some type of an interim project.

Well, you know I can't do that.

You know I think we have some there are some areas within the company of the things that we're working on whether it be looking at.

Especially on the changes or other things like that where you might use some of the tumor sort of the senior team at the airport but.

I, where we're all kind of go in the car or something and build something because we have a tremendous construction team.

But we need to keep busy that's just not that's not the way to run this business in our opinion on where we have a great team and the team is I think the stimulus.

The together for so long or come back together by the way to put it so back on the beat the days of June the other than Coupal.

And then of course, the Kinross take over the some of the worst for Kim on for a period of time on as soon as they got the call to come back to the culture of the two and they vast majority came back so sick at all on sort of rock band in the way, where the kitchen time off the men and then the decides to do a lot of tour and some of the whole band gets back together or most of.

Of the band of other able to attract the other high quality people because of the and I think they really like the mutual respect and trust of our construction guys are really feel valued in the company as they are and and and.

The Big Love doing stuff for us so we.

If we find the right opportunity.

And the situation of of acquiring of deposit of of course, we'd be looking at that not to keep the team busy and I believe the team will be available when we're ready to go.

Get the band back together, but if we find something of course, there are any of the rule.

Okay.

Yeah, I would like to add on I, just look on what one thing that debt you know people don't realize clearly a lot of these guys.

On the construction.

The realm are very good at all of the civil type stuff and so some of these guys are.

Our deployed right now within at for Colo or maybe they're doing maybe they are doing a quick project at masbate, but they were actually working on the operational side.

One of the key secrets is as the this whole core team like the logistics team the procurement team the warehousing team those people sit down on our site and so right now they're at the goal of bringing up the next group, but we haven't lost them right, they're still there obviously the.

The exciting part of of.

Mine mine running as the construction aspect so everybody wants to go on construction of projects, but they understand that there's not a project that they will sit down and wait for the next one.

Okay. Okay. Thanks, so much of on thanks for your time debt.

Thanks, Bill for the exploration.

Your next question comes from the line of losses I Wonder from Bank of America of your line is open.

Hi, good morning, and good afternoon, and thank you for the update.

The.

A question on the obviously acknowledging the political risk management being the core competency for beach of gold.

Could location of grant of locate in kiosk of feature into.

Which you might ultimately prefer developing.

Sorry can you just say that again.

Yeah.

Could the location of the key Alka and Grandma low teen factor into which of the two projects you might have a preference to develop first.

Yeah, that's an interesting question.

I think the I'll go first year, but I think that we think they are both in good locations in the country that they're in.

Exactly.

Area with the sequence of the mine operations and the relatively corp, safer part of the country and the <unk>.

Sense of demo at the I think I touched on earlier the debt, whereas yoki of historic mining district local people understand that we worked hard to show them. What it would look like of what we're trying to do.

A lot of support there and then that's the relocations within Colombia for sure. So I would say no.

Somebody else can chime in here Bill Weber of that but.

I don't know I think the both of them devoted an attractive areas in the country and so I don't know the one would be decided over the other on that based on simple when you think about the yeah.

Yeah, no you're absolutely right Clive for sure I mean, we just like the good projects I will tell you most of the guys if I'm being honest from of construction standpoint, we've spent the last three or four years in West Africa builds on that project. So they like our new venue and of course, the fishing is much better in Colombia. So they do have a preference.

Thanks for the better.

Couple of examples.

[laughter].

Also on T I kind of clay you mentioned in the past debt.

It would be developed with our partner has there been any discussions in that direction.

No I think the key thing of course now is.

Get the feasibility and see what it looks like you know the alternatives have always been to bring a partner in so so so the absolute if we don't think it's for us or are we just don't want to take too much on the there's always other alternatives. So I think the keynote was going to be getting the results of the feasibility study. She if it meets our criteria. If not then if somebody else interested in potentially all of those options are still on the table, but.

It's hard to have those discussions when she really know the economics of the project.

Yes.

Sure.

And if I might ask of.

A question on the men in total permit.

The type of what's going on the ground. There has this third party that now has the license already started exploring and in follow up to that are you able to share with the who.

The third party is just in terms of like are they of junior of their local company are the major mining company.

Maybe you can share of that but if you could would be helpful.

Yeah, I think obviously, we're in the process and help them for some weeks of having extensive conversations over the government and then the weekend refueling.

We feel we've got some positive indicators from those discussions it's just it's a.

The small.

All of the <unk> company.

And frankly without a history of of.

Mining construction of expertise.

Our financial strength. So at the end of the day, we just feel that I do want to point out and I think I mentioned it earlier, but.

The history of volume globally, and it's been a spend of really good place the new business I mean, I've said this many many times if you go back to our.

The mine opening up in other years ago, and listen to the speech of the person at the time it.

It was tremendous in the government support which was really great and the mutual trust relationship. We delivered on the promises we made which we of this is what we tried to do always more transparent with the government of very respectful of really good relationships and I think the if you look at you know.

Dr. Mark Bristow and look at the wrangled experience and the other barrick experience he's arguing for decades and he got it right. You got there early on was contrarian in the paid off really well for the Randgold shows. He said, it's the same thing it's one of the better it's a really good company to work for the government. They understand the importance of more of combining for the economy.

Hugely important and never more than today when you look at.

The COVID-19 et cetera, and they are always on the other loss of one of its.

Not in the other many countries in the world, where you're actually of the mining convention as we do on Maui. The box on your taxes for you for the duration of your of your project the tax regime and you know back on the other day Wrangled had some pretty attractive tax deal on stewardship of the along the industry of the time, but think of things like FICA tax holidays relative to low royalties for the government never ever attempted to change the tax structure in those.

Mining convention. So I was wondering if you have interest are backed up and if you had the issues you end up in Paris.

The deal with them.

The governor of never sort of a garden there. So in this this new government.

We've had success on working with this new government.

Within the within the.

The Ministry of mines the SIB.

The servicer, who many of them on the same and then getting things like permits for bulk sample permits for other things. So this is one that we feel as we said on the news release, we feel we have the right to the extension of the of the medical relationship. The that's what should have happened and we're working through all.

For the government to to really show.

Our side of that story and that argument, we spent $27 million there.

And the they're really logical thing for medical on them for everyone, including the government. They will own 20 per cent of medical and owns 20% of for Colo the clear better thing for the best thing for the people of we believe of Mali.

And our shareholders and the government with the ownership is to see that and then of course or truck down the for cohort and we think we have of legal right to that license. So we will take we will working cooperatively with the government respectfully just too.

So all of the situation, but we will we will take the steps to defend our ratios required as we go through the person. So all of our hope was to resolve a true discussion and they'll get back to work we had a schedule of at least $8 million of work in the article in the area some of its ongoing until the new.

North of the amount of correlations were so good.

But this is an important part of the potential to three the further improve for Colo, but also is there. Another caller there we see a lot of potential there. So so yeah. The history of of Mali has been very good and I've been very.

Been very.

Strong on my mind.

View of saying the shareholders on people don't.

My father used the Sanofi Regeneron is the wrong don't get of life's about Africa or even the lifestyle.

The situations and where they are Molly.

Two centuries of gold money they get it the hips.

The governments have always gotten the the we're looking for this government to continue the tradition for the Maui and cover child, which is all of the laws and other.

And seeing the importance of income money and future going on even the best friend of the country. So that's our that's our position today than we were having some construction of conversations around the one of them the hope to what some of the situation resolved.

Okay, Thanks, and I, just realized that the quarter past the hour. So I had one more of it I'll try and ask it really quick I think this is for Mike basically in January of you guys guided the much higher H, one unit cost and a Q1 came in well below the low end of what your guidance was it.

Is it fair then do you expect a very material increase and like all in sustaining cost in Q2.

Ah well on on the operating side, we just we did better rates.

Look at the the factors impacting the the battery of cash cost.

This quarter of there is there a better recoveries that we just didn't model right. So.

The we'll keep those for the benefit of those as we run through and then like lower input cost.

For Colette for things like the cyanide.

So again, we expect to keep the spending for that so I think some stuff will roll forward and just benefit overall you shouldn't just.

Push it all on the second half of the year of the guidance. We gave the second half of the year. We think is still good.

And then on the all in side.

Yeah. It was the benefit of those lower cost higher production, which we.

We think the amount for a lot higher production as we roll through the year and then some of it was that Capex of just timing. So you will see that.

What we don't spend each one we still expect the scrappage too. So so on the Capex side, yes, those cost will just roll over into the second half on the Opex side most of those benefits we should keep.

Yeah.

Okay. Thank you.

That's it for me guys. Thank you very much.

Thanks for the questions.

Your next question comes from the line of of carry Mccurry for mechanical or do your line is open.

Hey, good morning, everyone, maybe just one more question on Grandma Latte.

The all in sustaining cost for the 15% higher than the P. Eight how much of that is underlying cost inflation versus maybe just fewer ounces in the plan or is there some other factors driving that change.

Well just a build on Mike.

Yeah. So the.

Is it the the all in sustaining cost will be up a little bit because of the.

Some inflation for sure, particularly related to the I think I've mentioned labor.

Power and fuel prices versus what the PFS.

Yeah.

Yeah.

Is there any context, maybe on like what the dollar per ton of differences.

[laughter], maybe I can maybe I can dig that up for I don't have the right here at my fingertips.

Okay fair enough. Thank you.

Yeah.

Your next question comes from the line of Anita Soni from CIBC. Your line is open.

Hey, good morning, guys style of how jelen and sneaks in the question there.

I I only have one question left and that's with regards to like around the long time I know, it's the broad question, but can you give me an idea and the timing how long it takes for permit.

On the I'm not as familiar with Columbia.

Yeah, Yeah. So as I said, there's the kind of three levels and we've had some pretty in depth discussions with the government on these particular issues and so you're kind of looking as I said for the insignificant ones. Those are on the fly the minor ones might be kind of in that three to four month range for review and approval.

So I think it's six to nine months.

On on the majors from the time you submit.

Okay and the last question I know also very early stage, but as you think about of construction business decision on.

When you when you're looking at for a construction timeline on the thing.

Well I'll do I'll, just say you know we were always talking on that 30 to 36 month range I don't I can't think of any reason why that would change.

Thank you very much.

Your next question comes from the line of Jared Hoover from Morgan Stanley. Your line is open.

After all of the money you guys. Thanks for the call I know they've been the number of questions asked and I'm, a little too, but I just wanted to get two more in PS and other.

It seems from the from a lot of the commentary that the two main points that are going on the development and potentially better economics on those projects in the round.

Infrastructure and how you can move that in Boston, the optimize that and the other is potentially increasing the life of mine production, but if I look at the two puts the money is west of the Trinidad puts it looks to me like those on lower grade pits.

So if you have to bring it into the life of mine it seemed like it would automatically increase of cost. So is it more case of yes.

Yes, do you potentially bring that into the life of mine, but it's more case of your of few having to look at the recoveries on on that project and net potentially enhancing the.

The economics, if you could just check for that piece and then my second question is just around your partner Anglogold.

If for some reason it doesn't meet their particular the hurdle rate than they were.

Once the to be sellers of the project are there any mechanism that would allow them to all in the agreement within the grid to allow you to potentially be take the project up.

The full 50 per cent to all the good it would've been stage of sort of 10 2030.

So just if you could check for that that would be very helpful. Thank you.

So the second part of your second question of where you were saying.

I didn't quite get that the where you're asking whether we think the AGM would be amenable to us purchasing some of their interest in stages for the question.

And is there a mechanism for that.

Oh, yeah, Yeah, all of US, yes, the case of authentic.

One of the total for 50%.

Right, there's a mechanism reallocated all of the launch of the first of all of the balance of that whether it would be first the second part.

Yes.

The mechanism of the agreement, where if you make them.

The proposed development plan.

As operator and the G.

Hum.

None of the period of time I think it's 30 days of respond.

Both price will respond to deciding to fund out of the Beaumont plant, where there's the mechanism whereby you can purchase the other 50 per cent out of either party can based on fair market value based on the feasibility study.

The development decision would be based on in addition to other reason of provision with either party can go down to 30 per cent.

What's the mechanism for the.

So.

If he wants things all of the project would not have the full of 50%. So there is those mechanisms for the work on some of the agreement of.

Bill you want us for the first.

Yeah.

Yeah sure. So you you are correct.

Don't ask the Trinidad currently the resources or the lower grade and I guess internally at this point, we see those as.

Potential.

Out near the end of life of mine is kind of upside to extend the life of mine for sure it and that really wouldn't do a lot for your MPV, but what I was talking about when I was talking about drilling as we're talking within the Grandma. Okay Ridge area just outside of the existing design pit and.

Even outside of that in the measured indicated and inferred we see some potential to increase the NPV on the IRR.

Bringing inferred ounces into the indicated which of course, then allows us to put them in the 43 one on one.

And as far as the infrastructure that you're correct that was the other issue.

Yeah.

Perfect guys. Thank you very much.

Thanks for the Christmas.

Your final question comes from the line of Charles ROE of shareholder your line is open.

Thank you for taking the call.

Much of what I was going to ask about has to do with the.

The problem with malaria Molly.

The moly I guess, so that's been answered.

The only thing I would ask you to do is the.

I've been asking for a copy of your annual what do you call. It your annual information form.

And the last thing Ive got was the shareholder relationships you can put something in the mail to me of the Wii.

Week of April six I still haven't received it.

Just to remind you of shareholder people I'm still waiting.

For the UK annual nation for them.

Okay.

Sounds good.

No debt.

And I'm, obviously, following what's going on.

And the Mali, because so much of the company's interest you there, but again without the annual information reported.

Im kind of Winging I've got 40000 shares she was very small compared to the corporate people but.

So yeah.

No no that's super important to know, we pride ourselves on our transparency and delivering on what we promise. So obviously something slips through the cracks there. So it's very important Charles on you can send an email if you'd like to.

Ian Mcclain on the cleaning that'd be to go of Dot com or to me C. Johnson of the beech of grow Dot com and.

I will get out of it and make sure that you get that I'm not the by snail, mail of best buy them on a mechanism that gets the too.

The thanks for thanks for bringing it up and thanks for the supporters of true.

Okay.

Good luck to resolve here stay help thanks a lot.

Thank you appreciate it.

There are no further questions I now turn back over for closing comments.

Well I think we've heard a lot of ground here and thank you for your time and your interest in some very good and interesting questions.

I'm really pleased for the quarter, obviously and looking forward to another very good productive year.

Profitable production and the loss of all of this exploration and development opportunities that we see so.

Thanks for everybody for your time and obviously if you have follow up questions you can reach out to in the.

The claim to put you into the person you want to or if you know the person you want the answer but we can go directly so thanks for your time, everybody and the state.

Stay safe.

Thank you operator.

That concludes today's conference call you may now disconnect.

[music].