Q4 2021 OceanaGold Corp Earnings Call
[music].
2021 fourth quarter results webcast and conference call at this time.
In a listen only mode, but following the presentation, we will conduct a question and answer session.
And if at any time during this call you'll be quiet needed assistance. Please press star zero for the operator.
Also note that this call is being recorded on Wednesday February 23rd at 530 P. M. Eastern time, and I would like to turn the conference over to Sabina shipping. Please go ahead.
Thank you very much good evening and good morning, welcome to Shannon Gold full year 2021 results webcast and conference call I Am <unk> director of Investor Relations for Oceana goal.
I'm joined today by Scott Sullivan, Chief operating officer and accuracy.
Scott Mcqueen Chief.
Financial Officer.
David Londono Executive General manager Haile operation.
Mid way Executive General manager, Philippines, and New Zealand, and San Francisco Key Senior Vice President corporate development.
Before we proceed note that references in this presentation adhere to international financial reporting standards and all financial figures are denominated in U S dollars unless otherwise stated.
Also note that the presentation contains forward looking statements, which by their very nature are subject to some degree of uncertainty there can be no assurances that our.
These statements will prove to be accurate as future results and events could differ materially.
I refer you to the disclaimers on the forward looking statements in our presentation.
I will turn this I will now turn the call over to Scott Sullivan to walk you through the key highlights of the quarter.
Thank you Savannah.
Good evening and good morning to all.
Today.
We have a lot to cover today, so all good things gotten right away with slide number three.
[music] delivering consistently on our commitments underpinning strategy to create long lasting value for shareholders.
Despite another year of uncertainty globally significant changes made throughout the course of 2021 shot on goal we.
We delivered what I would consider to be a successful year.
The fourth quarter of 2021, so the return of positive free cash flow on the back of record gold production at Haile and.
And our strong operating performance at <unk>.
We drink managed production in early November after more than two years.
In a state of operational readiness.
Having a diversified portfolio tied an important part in our performance during the quarter as the New Zealand operations underperformed against expectations. So much the year operationally and face external factors, including government restrictions related to COVID-19.
Subsequent to the quarter end, we announced the completion of the how technical review and we will cover some of the details that were lighter in this webcast.
Turning over to slide number four.
We pre released our production and costs in January and those figures are reflected here. We are pleased to have achieved our consolidated production and cost guidance at Highlander.
Exceeding their respective production guidance.
Consolidated gold production increased 20% over 2020, while our cash costs decreased 15% and all in sustaining costs decreased 2%.
2021 performance is a step in the right direction, we will look to build on this with you.
And going forward.
I will now turn over the presentation to Scott Mcqueen to walk you through the financial results.
Thank you Scott and Hello, everyone.
Over the next few slides I will cover the key highlights of our 2021 financial results.
As Scott just mentioned our fourth quarter performance was driven mainly by strong quarters at both <unk> and the DPA and we're very pleased to have the DPI back operating and we expect to continue to see the benefits that brings that portfolio as we ramp up the operation fully.
Over the full year revenue came in at just under 745 million.
4% shy of the company's record annual revenue, which we achieved in 2018.
745 million was also almost 50% above the previous year.
This strong increase primarily driven by record production at Haile and of course, the restarted the tpa.
Which included the sale of the preexisting copper gold concentrate inventory on hand during the third quarter of the year.
On the stronger revenue full year EBITDA increased over 150% to just under 330 million.
This result, also reflected a 70% year on year increase in EBITDA margins.
That's despite the dip you have idle capacity charges and cost impulse associated with COVID-19, operational interruptions, especially in New Zealand.
Adjusted net earnings came in at 141 million or <unk> 20 per share for the year, including four cents per share in the fourth quarter.
Compared to analysts' consensus of around one cents a share.
On an unadjusted basis. The final net result was a loss of just under $4 million. This included the previously announced noncash post tax net impairment charges approximately $110 million.
Included a post tax charge of $191 billion in relation to the higher operation.
Largely due to the updated life of mine cost and capital assumptions for the technical study.
This was partially offset by a post tax impairment reversal of 17 9 million to fully restate the carrying value of the DPA.
Just recognizing the renewal of the FTAA and a successful restart and ramp up of operations across the fourth quarter.
More details on the highly technical study findings will be covered by debate later in the presentation.
Operating cash flow for the year increased 32% on the stronger EBITDA. However, this was partially offset by material working capital movements, mainly associated with the Gulf pre sales, which were closed out in July 2021.
At the end of the year, we had no hedging arrangements in place.
Adjusted cash flow per share after working capital movements for the year was 40.
Including 13 cents in the fourth quarter, which compared to analysts' consensus that's approximately eight cents.
Moving on to slide six and our capital expenditure for the year.
Consolidated capital expenditures for 2021 increased over 2020 as planned.
This included higher capitalized waste stripping cost of the build out of titles mining infrastructure.
The continued development of the Martha underground mine Wahid, which commenced continuous production in mid 2021.
Plus the development of Golden point underground at Mccray's Oleds.
Also I would say its first production in the fourth quarter of 2021.
In Q4 capital expenditures decreased quarter on quarter, mainly due to lower capitalized waste stripping and the delay and commencing development that the Highlander Grant this.
This was partially offset by an increase in general operating capital and exploration cross costs across the New Zealand operations.
Overall, our 2021 capital program fallout playing.
And that we successfully expanded exploration opportunities, while bringing to production to you underground mines in New Zealand. We also have laid the foundation for a third and you run the grandmother tile, which is planned to continue development in 2022.
Moving onto slide seven and the balance sheet.
For the fourth quarter Pleasingly, we moved back into a positive net cash flow, where we saw our net cash position increased $20 million.
As at the end of the cash balance stood at 133 million, while total title available liquidity was $163 million.
Net debt inclusive of equipment leases was approximately $238 million.
We have a sound balance sheet and we are positioned to deliver strong free cash flow over the next few years. This will allow us to pursue a balanced capital allocation plan.
And that allows us to fund investment in high margin value accretive growth opportunities, including the Highlander ground W. K P.
Eric you were upon that.
<unk> net debt and to provide distributions to shareholders.
I will now turn the presentation back to Scott Sullivan to discuss out 2022 guidance and three year outlook that underpins those play.
Thanks, Scott, let's move on to slide nine.
Two weeks ago, we were pleased to announce our 2022 guidance and three year outlook.
We view the future of this business as exciting with growing gold and copper production and increasing free cash flow generation.
We have high margin growth projects that we're advancing while improving on our operational performance.
In 2022, we expect gold production to increase between 25% to 35% over last year, while cash cost are expected to be slightly lower and all in sustaining costs slightly higher net of increased capitalized waste stripping.
The increase in cost year over year is a reflection of inflationary pressures and increased capitalized waste space.
Our increased gold production in 2022 is driven by the <unk>, which we expect will deliver almost four years with gold and copper production at first quartile unit costs, we expect to rebound in the New Zealand operations as Martha underground continues to ramp up on the <unk> returns to steady state operations.
These increases will help to offset our year on year decrease in production at <unk>, which as we previously as previously flagged reduced 2022 related to the delay in the SaaS final record of decision affecting access to higher grade ore.
Our capital investments this year and over the next few years is focused on opening new pits at Haile and <unk> crisis, which is driving the higher capitalized waste stripping.
Our gross investments related to the Haile underground continued development of panel two at <unk> ongoing development works at Golden point underground at the cries and further development of thoughts around the granite Wahid.
We will continue to invest in drilling, particularly at <unk>, where we have focused on resource conversion and resource model Derisking at Martha underground and a significant increase of spend at W. K P.
Wrapping up drilling activity to add even more value.
Let's move on to slide 10, and our three year outlook.
Over the next three years, we're expecting production growth at a compound annual growth rate of 15% from 2021 levels. Additionally.
Additionally, we will see a step change in copper production as the DPA ramps up to full production given metal process today. It's a good time to be a copper producer having that revenue stream in the business looking at 2020 for adult product is expected to significantly increase by 60% to 70% from 2021 levels.
Driven by hail.
We do have a fair bit of capital to invest over the next few years related to capitalized stripping at Haile and the cries gross capital investments are related to high value initiatives, such as the higher underground and why he most exploration.
With increasing production, we expect unit cost to decrease in profit margins to improve we expect free cash flow generation to be meaningfully stronger over the next few years.
Free cash flow generation positions the company well to deliver on its high margin growth plans make discretionary debt repayments excuse me repayments and returned capital to shareholders at the board's discretion.
This is a key point, we want to emphasize to the market Oceana gold is returning to being a high free cash flow yielding company of course. This is the plan we've laid out and the onus is on us to execute and deliver on these plans.
I will now turn the presentation over to David way to briefly walk you through the Philippines, and New Zealand operations. Thank you David.
Thank you Scott Good day, everyone.
On slide number 11, as we've already it'll really it's great to have to get back into the portfolio and ramping up ahead of expectations.
We completed all maintenance and upgrade works in the third quarter.
And restarted the process plant with new will cease in early November .
In early two months of ramping up the operation, we produced about 15000 ounces of gold.
Seven 800 tons of copper.
So very pleasing restarts operations.
Underground mining continues to ramp up ahead of schedule.
As we draw closer to achieving the $1 6 million tonnes per annum underground mining rate.
We now expect to achieve this right in the second quarter.
And this is a major factor for why we believe we can deliver almost annualized production potential.
The process plant is currently running at a three and a half million tons per annum right.
And fifth with a blend of lower grade stockpiles.
Which is progressively being offset by the higher grade feed from Ami group.
We have approximately 23 million tonnes of stockpiled ore on surface.
Which we will continue to blend with underground ore to the duration of the mine life.
The relationships with the community continue to remain strong and.
And we are working well with local stakeholders from the dip here and neighboring communities to advance community development projects.
We also continue to work closely with government officials and COVID-19 vaccine programs.
As vaccination rates continue to increase force amongst our workforce, but also throughout the local communities.
We look forward to recommence in the exploration program at the shipyard.
Which is designed to test at depth extensions.
Allowing us to expand the mine life.
Given the ore body at the shipyard.
Open at depth.
Moving to slide number 12.
We are expecting an operational rebounded in the crisis of 2022.
Following a challenging 2021.
The ended on a high note.
The positive momentum we built in December of last year has continued into this year with better mine productivity, increasing grades and better recoveries.
In 2022, Mccray's is expected to produce between 140 and 155000 ounces of gold at an all in sustaining cost of billings of $4800 per ounce sold and cash costs of 800 to $900 per ounce sold.
The water production guidance range reflects uncertainty related to potential COVID-19 restrictions.
Production for the year is expected to be evenly distributed quarter on quarter.
We have smoothed out the production profile at the price of the next three years.
And have accelerated mourning of the phrases arpin pits as part of the optimized mine plan.
This means we have also accelerated the capitalized waste stripping to open your zones that we will mine over the next three years.
In the fourth quarter of 2021.
We process first of all from the Golden point underground, which was on schedule.
We will continue to develop and expand Golden point over the course of.
This year and next before we fully transitioned from Fraser's underground.
Under the leadership of Mike Fisher and the team.
The crisis is expected to be the steady operation. It has typically been and we will continue to seek out opportunities to grow margins and extend mine life beyond 2020.
Moving onto slide number 13 and why he.
The ramp up of mining rates at Martha underground continued to increase.
Our guidance reflects increased increasing gold production.
Although we fell short of our guidance range in 2021.
We do expect to double production this year and achieve steady state production of 90 to 100000 ounces of gold on average per year for Martha underground starting in 2023.
For the full year 2022 production at why he is expected to be stronger in the second half of the year.
Then in the first half with the fourth quarter expected to be the strongest quarter of production at a lower corresponding all in sustaining cost.
We achieved steady state underground development rates in the first quarter of last year.
It has since modestly increase these rights over the course of 2021.
We are looking at ways to further increase underground development rights as we bring additional starts online.
At steady state, we expect to be mining 15 to 25 types of months, depending on where we are in the mine sequence.
Our ability to increase the number of starts brought online and increased development will be enabled by the recently installed primary being phase.
We are also increasing the amount of resource definition drilling to address the continued negative reconciliation that has impact us impacted us since the beginning of the fourth quarter of 2021.
This drilling is focused on increasing our confidence in the resource model in areas that are under drew.
And to convert inferred resources to indicated.
Our guidance includes only indicated resources.
Reparation for the lodgment of a consent application for why he north project inclusive of the therapeutic program underground mine continued to progress with environmental assessments nearing completion.
Over the next few months, we will continue engagement with a broader group of stakeholders as part of that consulting process.
We expect to launch a formal consent gene application.
Both the regional and district Council's inclusive of stakeholder feedback in the first half of 2022.
The Council's will review the application invite public feedback and Zane referred the application to the environment Court.
After receipt environment Court will oversee preparation for hearing on the application, which we would expect to be held by mid 2023.
For this year, we're expecting to increase the investment in exploration, particularly at productivity Palmer.
Last year, we managed to drill less than 4000 meters of drilling productivity was impacted by the two week locked down in August .
A prolonged seasonal drought period.
The drilling we completed last year productivity program focused mainly on resource conversion of the east Graben vein with a step out hole chasing the extension of the east grabbing structure along strike to the southwest.
We extended mineralization of east graben vein by 20%.
And it remains open in multiple directions.
We are looking to permit a third drill rig to focus on extensional drilling at particular program to further increase the value of what we believe could be the crown jewel of the IC anecdote portfolio.
The productivity program, we have $10 million budgeted for exploration a significant increase to our investment there with previous years.
I will now hand over the presentation to David Londono to takes you through higher.
Okay. Thank you.
Good evening and good morning, everyone.
Moving on to slide 14.
2021 was a very strong year with record annual gold production and the implementation of operational changes that yielded.
Positive results and I expect seasonally container from Aes to come.
We have completed the highest technical review and I will spend some time today talking and walking.
Through the basic touch on this study, but also on additional opportunities that we're currently looking at.
DCF guidance reflects typical AMD in the SaaS final record of decision and all the associated earnings.
By this delay we are feeling very positive about the mine plan and that focused on delivering increased value going forward.
<unk> 2022 production profile is evenly weighted between the first and the second half however.
There are some fourth quarter production is expected to be materially higher than the <unk>.
Second and third quarters.
All in sustaining cost is expected corresponds with quarterly sales volumes and the highest in the second and third quarters.
Capital investments are also expected to be highest through second and third quarters.
Based on the company receiving the Sci SNS just to get a better mix in the first quarter as expected approximately 35 to 40 million.
The all in sustaining on $30 million to $35 million.
And growth capital.
Great.
Is consistent on receiving the ACI, yes would be a start of spend expected in the second quarter.
Moving on to slide 16.
The company now expects to receive the final record of decision and related permits.
In the first half of 'twenty two.
These statements relate to the expansion of the operating footprint to accommodate a waste of bias.
Braves discharge rates.
Why don't you meant plant as well as a retailer might have behaved on their guidance.
Engagement with a U S Army Corps of engineers and the.
South Carolina Department of Health and environmental control is strong and ongoing on a weekly basis.
<unk> also worked closely with local stakeholders, who are very supportive of what we are proposing.
Although we do not see any sharp stoppers and the process is complete as we await a final decision we have to implement workarounds to accommodate waste and water management, which is a driving factor for this <unk> yet output at why we have to stand out.
Why we have had standout local contact us.
The delay Ncis.
Has also led to higher cost associated with they really handling of waste and water management.
Upon receipt of the final decision on permits we expect costs to decrease and normalize over the course of the next.
Next 18 to 24 months.
Moving on to slide 16.
I will spend the next few minutes on that it's also the technical review.
Last year, we undertook a strategic and technical review over at Haile mine.
With a focus on maximizing the value of the asset piece.
These review of SaaS.
Planned getting using updated operating and capital cost based on historic data expected performance going forward and changes to our cost structure.
On slide 17.
And if I look at our production and all in sustaining cost profile through the end of the current mine life in 2034.
As you can see.
The production profile is variable hearing yet out however, my expectation is that our production profile will be led by demo as we gain additional operation.
Operational flexibility with higher grade ore feed from the underground.
The step change in production in 2024 is notable and related to operating the first one yes.
Underground production and mining the high grade zone in the open pits.
The underground reserves currently extend out to 2028.
We do believe that there is a significant opportunity to increase underground structures.
SaaS, which will contribute to a higher overall output, we lowered cost at Haile.
The average underground Gray these 3.7 grams.
Grams per tonne.
Both of 'em up video mind decreases from 2021 levels over the course of the next few years related to the on going delay in the <unk> process and the change to selective mining, where we will concentrate on quality versus volume as we grew up on these approach as we move forward with later stage cutbacks.
Better a snake, we expect mining rates to increase.
On slide 19.
On the processing and Franck multiples change in the new mine plan relative to the previous plan is a slight reduction in midfield rates.
The reality is that we have experienced hardware all of that originally expected unexpected up yoga ground or will be in hazard to meal effective.
Books.
As such we have assumed Memphis to top out at approximately 3.6 to 3.8 million tons per annum.
Although we are savvy not realistic target to keep each year, we continue to look for opportunities to push through <unk> without affecting prescious time, which affects recoveries.
An order of multiple b for answering our new plan is the restraining expectations with respect to gold recoveries.
Previously believe we've got cheaper to cover these rates in the mid eighties.
Is currently at the Shippable, we the highest have great and although the change made through the process plans have yielded positive results. We believed lack of mine average gold recoveries realistically at 81%.
Again, we will continue to look for opportunities to approval from these.
Moving on to slide 20.
And unit costs.
The company had previously made some aggressive assumptions somewhat keep count realistically achieving parents of unit costs and capital.
The reality is that the last few years of operations have proven proven to be challenging for.
The dating these might not a lower cost. This is related to factors experiments to the company, but also inefficiencies that we have the progress progressively address and we continued throughout the day's going forward.
The result is that we have now forecasting four units cost is based on what we believe we can achieve on a minimum.
All bumpy mining costs over the life of the mind aspect to average about 250 per tonne minds, where.
Respecting that are minding your costs with victories over time as we reduce costs over the next few years related so I need to re hundred waste due to the delay and bsba his decision.
Thrown aviation it'd cost relate to Greg control great Controllability.
Ah screen, today's mind utilization rates and reduce our maintenance costs, we will drive these costs lower and these I don't really reflect remount assumptions.
Beyond these changes we will continue per se cause of opportunities to operate more efficiently, which we would drive costs lowered.
A a slight of this later.
We're also expecting processing costs onside GMA costs to decrease progressively over the life of the mind.
Processing cause we remained somewhat elevated over the next few years related mainly to water management.
Once we have received the permits to be larger water to implant, we expect debated manager water levels up to three years.
The last time Mentation improvements were implemented last year have lift to higher throughput rates and includes mainly filmization and also decrease maintenance costs, which are contributors to the high energy costs experienced in the last few years.
Nine months to slide 21.
The previous estimates on Capitol embankment, who had more reflective about a higher unit costs have meat to manage the amount of waste, particularly.
Pack of potentially actually generate of waste and managing water levels that technical review results of an outfitter lined with our future capital needs.
One of the main drivers for the highest capital requirements compared to a previous plan. He saw the operation has been conducted over the past several years.
Talking about <unk> approach to he has assault in the highest dilution.
And waste generation, including pad waste as such we have Natalie exhausted.
The waste storage shelves, we have a request to build out of eastern on storage, which is part of the decision we continue to wait for.
We have some initiatives that we're looking at and designed to reduce the amount of waste we expect to generate.
Five ways, we expect to generate a decent returns for the should decrease our future capital requirements long beach in a few minutes.
Answer is like 22.
We'll spend the next few flights to walk you through the opportunity because I would have partially implemented or are in the process of implemented pay implementing okay.
It's almost be some obese opportunity to suggest blast coming station I could control drilling of or zones.
Only have be captured in the mine plan. We have just released however that is put it upside obese initiatives and other initiatives that would not capture him to my plan.
Mining operations were previously three repeatedly driven by volume.
With the Hey, our body Biggio medically complex, we have changed the focus to ensure quality of dual of deals deliver to our closest plan will be implementing an absolute drilling program for today control and and if he has to come for a pack waste classification for this year, we plan on drilling 25.
<unk> meters.
R C rates and then wrap up this thing up to 50000 meters a year.
We have one of our main logging equipment in a backlog configuration that is most suitable to mind more selectively.
Okay of course would be designed to reduce all dilution and optimize optimize pathways that were required to deposit and especially line voice that is.
We have elected to continue mining demetre benches, and waste ideas five to 10 minute benches or in areas that are on the higher levels of debates.
And as we pushed down on veal competes with reduced been sightseeing or transitioning from five metre benches to 3.2 meters features.
As a result of these changes were expecting a significant reduction in dilution a much higher grades.
Both capturing the new mind plan to some extent with some upside potential.
These changes sugar salt and less wastes that is actually generator adjourn at 80 main me, which will decrease the capital of meats.
And if it does not big captive in this current plans.
Moving on to slide 23.
We have implemented changes to blast penile borazon seem built in peace to push throughputs rates of the process plants minimized blocked tubes in the primary crusher decreased planned maintenance costs and increase maybe realisation rates, we have realize the benefits of changing our blasting approach and do some.
Have been factor in the mining plan.
We will continue to afford that optimize black some in station and ozone towards the driver you similar benefits to what I just saw light while we would also increase mining utilisation rates.
One other than that we have not yet implemented these optimizing blasting in waves phones, which is something that we would focus on mixed.
And changing and changing the blast parameters patterns. The way songs, we expect to achieve better my productivity of the chocolates with the review there'll be a little more efficiency Dean on loading that we are allowed to pass to reduce hold cycles through better main roads of Pete Rose.
When we don't to a slight foot forward.
Industrial base already in that mindset activity through Greg controls viewing thats might've been sizing should reduce the amount of waste them pathways generation.
And on top of these we have gathered a significant amount of data over the past.
Few years on the ways that we generate on the potential to generate absolute growth payments. We have found that there is at concealed considerably amounts of material that have been label us back waist.
Does have a very low probability give me a civic.
Once we have completed.
This program and to engage to regulators to show the complete set of data with a request to modify the current plus FC classification of the acid generated waste.
Should <unk> be successful successful and the regulator of grant US. This modification then vehicle with salt and a significant reduction of bag waste have future capital needs.
Oh, I know to slide 25.
I covered somewhat being in Egypt, pips underway already implemented to drive improvements and efficiencies word processing and these benefits have already been captive in the mine plan of it on top of these benefits. We're working on how we can afford the bottleneck the process plant without any major capital investment.
The equipment is there and we are focused on making it all awards.
Fluid optimized from the kinetics of the plan to drive gold recoveries.
And how we can make slight tweaks to associate.
The improvement improvements to blessings of assaulting pushing throughput rates and advancing some of the heartbeat or zones that Lehman Zach meal.
Why not to slide 26.
The future of Hayley from the crowd I over the course of the past year.
We have a trailer fueled visa underground targets that is shown on dislike.
While we wait for the final.
Final decision and the parents that allows us to be able to go out we have proceeded with development of surface structure infrastructure, which were permitted jubilee in anticipation of receiving the revenues.
First show on the ground as the first deposit with mine and a module.
Major driver of future praetorship production increases.
We continued to see potential for extension proposed shoe recent really has confirmed this.
Once we get into the ground.
We will monarch massively unexceptional relog horseshoe is relative one kilometre Colorado between horseshoe on palomino testing the pulse both deposits and festive targets in between.
As you can see there is a lot of work to do our hey, However, I'm feeling very confident so they leave it on the mind Slam we have just released in Brooklyn, the traditional operating efficiencies circosta reductions, but I have a vision of Bobbio, which we believe exists service coverage of the of the gods.
I will now turn the presentation back to Scott Sutherland.
Thank you debates and team for your views.
I'll wrap up the webcast on slide 27.
Our team firmly believes the future. Those you have a goal is very broad we've implemented many initiatives over the past year to Rob to ship and focused the company to regain its fiber will position in the industry and we will continue to restructure and build capability in the business moving forward we.
Have a lot more work ahead of US. However, we have the talent and enthusiasm to do it including a new president and CEO General long two stops in just over a month.
We now have more realistic Mon plans that are designed to allow us to deliver on our commitments. We have high margin growth opportunities that we're investing in advancing and civil operating initiatives designed to draw a additional value.
As I mentioned earlier, we will be generating positive free cash flows which are expected to grow over the next few years.
This is a great position to be in and we are focused on delivering it.
I will now turn the call back over to Sabrina.
So much Scott.
Now going to turn the call over the logistics of the Q&A session to the operator. So we can please go ahead with the Q&A.
Q.
And gentlemen, if you would like to ask a question. Please press sauce.
Five one on your Touchtone phone.
III, Tom prompt acknowledging the requirement.
To withdraw your question please.
Five two.
And if you're using a speaker phone please lift the handset before pressing any key please.
Please go ahead and press Star one now if you have any questions.
And your first question will be from Adam Baker Global Mining research. Please go ahead.
Hi, good morning.
Perfect updated.
Quinn.
More real computer to really tap you got it.
Just one of them horseshoe underground other than the pundits what don't keep waiting for an underground submit.
Just checking to see two planning to mourn.
From the bottom up over these types.
So we only waited for the patterns, we have all the agreement.
Are there and we have the contact or already six.
Once we start we're going to develop on years that belongs to mind from the bottom up.
Sure.
Okay.
Just one of them.
So you got 23 million some footfalls.
Just wondering.
You're able to access the hi, Greg material, so that'll just mixed together and more March snowfall.
Debate, David way your best decision to answer that one I think.
You think it is is being blocked out and it is in general.
I moved to.
Preference meeting meeting Brian over the lower right and obviously, that's what we do but it was billed as.
It was months.
So it is pretty much.
Modulus Q.
Yeah sure.
And then what.
<unk> I'm just wondering if you could walk us through the issues with the regional model.
And the discrepancies that you're saying between the <unk> and the results model.
Just in the early starts that you've been saying the great.
<unk>.
These issues coming through the village and start so you're saying the great issues.
Within the starts around the old workings. Thanks.
So.
With a flick decried on that one type fabric.
Thanks, Thanks, Thanks, Adam for the question.
The variability really boils down geological complexity in great variability.
We are seeing is in the second order instructions and these include on mine veins.
And it's still early days, we still trying to increase.
We put in to understand variability in the different parts of the mind to your question, we're seeing it in different places.
And it's really the geological complexity.
In chicken little veins.
And short range variability.
Alright, so just cannot be more.
Yeah, so I'd like to get more results definition drilling made it too.
Model I guess, thanks got a personal.
Thanks.
Q.
Once again, ladies and gentlemen, please.
One if you have a question and.
And your next question will be from my pocket as National Bank. Please go ahead.
Hey, guys. Thanks for taking my question just a quick question on the Hill six permit I notice your guiding too.
<unk> in the first half of this year, but stock on February 9th here, indicating.
It's expected in the first quarter.
Is there any signs of slippage on that which is y U.
And we have extended the window of when you expect it.
So obviously, it's very.
Very long.
So.
While we have seen is that we have all the information that the government the Ncis acquires.
They've analyzed seemed reviewing everything they made a couple of comments.
A dog, we responding right now, but we don't see his leap, which part of them the first half.
Okay and does that additional quarter. If it came in Q2 does that.
Give you any kind of hiccups in the first half relative to what you've got it too.
And now 2022 mind plan easily say doesn't have any impact and we've been managing water in which better and also now so we don't see any hiccups into of 2022 mind plan.
Okay. That's it for me.
Thanks.
Thank you.
Once again please.
Please press star followed by one on your Touchtone phone. If you do have a question at this time.
Yes. This is sabina here an ice tea then we have a question can the Asap further reduced had hail I'm gonna, let divvied Lozano answer that.
So the question can we can we can we further reduced to a sick at hail, yes, we looking for multiple tonys to reduce it, particularly improving our productivity in moving their ways.
<unk>, we have a high stripping ratio and sites. So we need to become much better I am moving our waste and we are going to achieve that by improving the blast fragmentation.
And by improving that we can at some point in time, even parked equipments, which we've reduced.
Fuel consumption maintain and say at component of placement et cetera. So that's one way and then I'll also add a we're looking into how we.
Sign that context, loosing a contact of costs.
Reducing at contact doors on site.
That we use and making sure that.
That we improve our maintenance planning.
That we've become better right now we need to turn around and maintenance practices and that we definitely included those costs, which obviously it will improve I'd only sustaining costs.
Alright, Thank you very much to read.
Another question in the queue.
Get you excited about going to apologize I can't quite pronouncing it the W. K P prospect.
Craig.
David Please please answer.
Craig flow line August outlook, almost overly obviously from a value driver for the company.
Key and for and for New Zealand.
With the addition of jobs.
The launch the socio economic benefits the offsets that can be done.
From an environmental bond diversity water perspective, it's going to be a fantastic opportunity not only the company, but the country to to demonstrate how much value can be brought about modern responsible morning, and obviously, it's one of the.
At this at this stage.
Most positively in there.
Oil deposits.
Has been discovered in recent times, so very excited progress if you want to add to that.
Just on the geology.
Dave I think worth mentioning in from the audience is familiar with some of the the plans would put in previous press releases, but there are three main structures to strike or the EG veins now striking over a kilometer.
It had extremely good.
And and very good.
Greg.
Commonly just called Bonanza vein and we've been focused on just one of the shoes within the AG vein and the hanging in foot will explain there's still a lot more to explore.
Within the AG vein and then we also have economic with some grace in both T stream in the western bands. So.
All things considered there's still a lot of exploration to go there and we're really only.
Beginning of defining the true value.
Thanks Davina.
You have commented that the future of halos underground.
What gets you excited about this opportunity.
Craig or Devine, please answer electric answer that question.
Thanks, again to Minnesota with a hail underground.
When we.
Both the opportunity and pale we did relying too.
Underground opportunities and Horseshoe was the first one that we thought was the most compelling.
Obviously 16 2017, we do to drew program to show the.
Horseshoes economic can we still have ways to go to still a significant portion of inferred to convert in the lower portions of bullshit.
Since then with define.
Several other targets, including palomino, the horseshoe extension and some other early stage targets Aquarius.
PISCES.
Several of those have drill holes in them already 2021, we spend drilling and converting the upper portion of palomino in 2022.
The aim is to continue that to get all of palomino into indicators. So.
Currently we have a pipeline of projects, which we feel we will continue to create value at high on the underground.
And we've got one more.
We've been asked if you can please clarify the opportunities that we have laid out.
It clarify if the opportunities arguably doubted hail are opportunities above and beyond what was included in the work. We've already released in the study defeat lawn Dano. Please.
Yeah at least.
Opportunities like Thai man, Sean improve.
Improving blasting there on the waste material and the big one for us is the.
Reduction impact ways on how do we achieve that reduction we achieved better option two different ways.
First one is being more selective on better some clean on on the waste material.
And if we can besides that is green material that we can put it in closer Babe waves dumps.
And then we will reduce the amount I would say, let's say potentially escalated waste that we have to move.
Five there to maurie.
Areas, but at the same time.
We achieved what we expect to achieve with the government that we changed.
The classification of some of that waste.
Talking to.
Troy yellow to Green, then, we'll definitely one needs additional five waste storage areas in the future.
Thank you so much defeat operator are there any more questions in the queue.
Once again, a reminder to please press star one from the telephone keypad. If you have a question.
And currently we have no questions registered.
Thank you very much. Thank you everyone for joining us today that concludes our webcast in conference call. A replay will be available on our website later today on behalf of the management team and oceanic old I. Appreciate you joining us today and wish you a pleasant rest of the day bye for now.
Thank you ladies and gentlemen, this does indeed conclude your conference call and webcast for today. Once again, thank you for attending and at this time, we do ask that you. Please disconnect your lines.
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