Q1 2022 B2Gold Corp Earnings Call
Okay.
[music].
Yeah.
[music].
Good afternoon, My name is Dennis and I'll be your conference operator today at this time I would like to welcome everyone to the Beecher golf first quarter 2022 financial results conference call.
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'd like to ask a question. During this time simply press Star then the number one on your telephone keypad she'd like to withdraw your question. Please press Star then the number two thank you. Mr. Johnson you may begin your conference.
Thanks, operator.
Welcome everyone to the conference call today.
Operator, you talked about the first quarter results.
2022.
The news release, we put out is very closer.
We will give you a little summary of some of the hottest about update you on a few things.
Sure.
For your questions.
Pleased with the quarter, we had a significantly especially versus our budget on operating cost all in sustaining costs.
Earnings.
Shlomi.
Great quarter, and we can talk a little bit more about what that means in the context of <unk>.
Going forward, but we're very pleased with that and once again I think some many of you realize the challenges that the industry is facing.
Inflationary pressures et cetera. So we will continue to remain committed to doing our thing focusing hard on that will recur.
Sure.
According to the full impact of higher costs, where we can we can talk about that.
In terms of the <unk>.
Focus obviously continue to be profitable responsible.
Gold miners to go for a single for extraordinary strong financial position as you know with tremendous cash balance virtually no gaps.
The highest dividend.
Barrett just came out today with even with their bonus dividends are still.
Behind Us I think we're at three 8% yield today, which is the highest.
Who will producers.
But we're also very committed to continue to grow the company. So we want to find the balance between dividend and rewarding our shareholders.
Alright, great performance and their support.
And also being able to continue to grow the company great access to cash through 600 million.
That facility from our banks that has the ability to go to $800 million.
At this time.
Just quickly looking for some of our priorities.
Mike the priorities in terms of gross are we're closing in on the feasibility study itself.
At <unk>, Inc.
<unk> talked about that was quite detailed news release.
And Congress becomes a little more.
Focus for us as you've seen we're now able to talk about the new resource.
Condo not only the saprolite from just trying to get some brick house's proposed in the sulfides just 20 commerce way.
Prototypical mill, so we're going to start talking more below a picture of that.
We have the potential for at least six depending on exploration results as they continue to be what we've seen and it gets larger the potential to build a second mill up on that comment.
So it could be companies with complex, which we could have.
Gold production from Sandoz in not too distant future.
So that should give you a little more color on that expertise has always been a big part of our world in the part of our success for since we started this company in zero 15 years ago, and we have to do.
Very exciting opportunities not only of routing system buyers, we've had great success.
Sure.
<unk> two indicators finding new reserves, but also.
Well some new targets. In addition to see terms excuse me to buy apartments, you've got great success.
Our record of success of exploration of existing properties. It was all were still very global in our view on our beliefs that the cheapest ounces are always to be quantified. So we have some exciting exploration projects and on budget.
65.
This year about 60 or so.
Structure that would be up.
This exploration of the breast system grassroots targets. So some exciting results came out today from Orion our partner and the operator.
We've been doing that Julien.
I think the guys.
I'm asking questions on that.
Switch group is pretty excited about early days, we are excited about the potential given the discoveries made in given our not only our proximity.
Alright on the boundary, but the kind of results, we're starting to see just how much where else to come there and we're drilling in interesting places like spectra Shannon.
Always looking for new new discoveries the M&A front, we will continue to look.
Which leads to the company and it's quite seriously in the recent time, but haven't been able to reach an agreement.
So we continue to look.
Take times on our side in the sense of looking at getting the largest study of those senior Pepsico also getting added.
You'd focus over the next number of months.
It may be see our stock, which has been underperforming seamless share price start to.
To come up.
We continue to improve.
The value of the purchase we have our ability to offer the.
The market value.
Our growth projects and potentially exploration.
I appreciate it.
Okay.
Okay.
Operator, we get into.
But again all of that.
Yes.
Yes.
Yes.
Okay.
That was a series of solutions, okay. Okay. So ill pass it over to Mike now.
And if I could give you run through the financial results.
Okay.
Thanks, Glenn and good morning, everyone.
So just Bryan briefly through the operating results and some of the key financial results that we reported for the quarter. Firstly on the revenue side revenue $366 million and that reflects the sale of 195000 ounces.
On an average realized price of <unk> thousand $874 per ounce.
Yes.
High gold price during the quarter and sales were about 7000 ounces higher than budget materially mirrors, the higher production that we saw in the quarter a budget.
Speaking of production the total consolidated production, including our share of calibers results was 209000 ounces and.
And we saw higher than budgeted production in each of our three mines.
<unk> was 102000 ounces, so just one slightly above budget.
Slightly above budget and that was mainly due to higher than budgeted processed grade offset by lower than budgeted processed tonnes.
And the processed tonnes valores.
Result of a reduction in the saprolite processed.
Because as a precautionary measure to protect yourself against some of these.
Potential supply chain problems that we saw rising in Mali for each was sanctions earlier in the quarter.
We prioritize the processing of higher pressure.
Higher grade fresh ore in the periods to reduce reagent consumption.
And.
That was a temporary measure I would say the sanctions continue there, but our supply chain was normalized and we built up regular levels of reagent that fuel at site now so.
As a result of that sounds like was reintroduced back into the circuit at the end of February and processing is ongoing as budgeted.
I'll remind you as well to call as gold production is expected to be significantly weighted to the second half of the year as we had guided when we put our budgeted numbers and thats that.
Because the second half is really when we reached the high grade portion of phase six and difficult and we have the new Cardinal.
Production stream fully online, but starting to cardinal.
From Cardinal started later last year, but we've got a fully online through the course of this year.
<unk> body 60000 ounces in the period up 6000 ounces had a bunch of some quite a beat there mainly due to higher processed grade.
In the period.
Great which is above budget.
Because we mined additional on budget higher grade areas within the planned mining areas and in addition as part.
As a function of.
Schumer haulage.
Periods and haulage optimization is related to the expansion of the tailings facility.
We were able to see increased mining rates at which contributed.
To the mining of higher than budgeted.
Higher grade ore in the period, but that's a temporary issue I think as we were working on the tailings the CSF, but that's also in the 6000 ounces beat in the period and North Dakota, 35000 ounces 2000 ounces over budget, that's really kind of the same story for us because youre seeing thats, usually slightly ahead of all factors.
Great.
<unk> and <unk>.
And again <unk> is scheduled to be weighted to the second half of the year like for Colette and Thats because thats when we get to the higher grade portion of phase III. The <unk> pit and also in the second half of the year is one that will shake underground mine really ramps up.
Can you just talk a bit about costs related to that production. So I'm talking to your cash costs. These are all on a per ounce produced basis. So consolidated cash costs for the Q was $699 that was almost a $100 $94 less than budget.
And that's.
Primarily a function of lower then stripping in some areas lower than budgeted fuel for Colette.
And.
Sure.
Higher than that was partially offset by higher than budgeted fuel costs at that net spotting on Chicago, So I'll touch on each of those individually.
So if a call at $624, perhaps produce that's 157 lower than budget.
And Thats.
That's primarily a function of slightly higher than budgeted production as I mentioned before and then lower than budgeted mining processing and St. John will costs and those costs were.
Lower than budget, largely due to lower than budgeted fuel prices realized in the period and just just to remind everyone that I think we've talked about on previous calls and in Mali. The fuel prices are set in advance by the state and therefore, you are always going to have some timing delay between.
Costs that you might see in the broader fuel market and at the pump and then what we realized in that site.
We also had lower than budgeted bonds, a few or consumables that we utilized in the period, because we process, we mined and processed lower overall tons and budgeted and mine tonnes were lower than budgeted due to again, a temporary change in mine sequencing to.
To accommodate that temporary change in saprolite processing.
A reminder to everyone as well on the power side, the solar plant for Colo, which we got up and running last year is running very nicely and actually over 20% of the power that we generated in the first quarter of 2022 with solar so that's been a great great investment I think it's.
For our current operations and as we look forward.
But his body.
Cash cost per ounce reduced $710 per ounce that was 50 $50 per ounce lower than budget and that was really again result of higher than budgeted production, partially offset by higher than budgeted mining and processing costs, which.
Again were driven by a little bit higher than budgeted diesel an HMO costs at Ms. Patty for the period.
I know in Chicago cash cost per ounce produced $770 that was $35 less than budget slightly lower than budget again, a result of higher than budget production and budgeted.
Operating costs were pretty much in line with budget.
Those operating costs, we saw some increase in fuel prices, but that was offset by a weaker Namibian dollar.
You might recall last year, we actually.
We saw maybe a dollar strengthened so it actually.
It increased our cross slightly this period, so far we've seen the dollar weakened we budgeted at $14 five.
And then maybe a dollar U S dollar for the period and we saw it come in somewhere over 15, so its probably a benefit in the period of a couple of million Bucks and foreign exchange gains.
So lets briefly at all.
It's really same store is the cash cost so consolidated all in sustaining cost, including our share of Calgary was that $1036 per ounce sold and that was $318 overall lower than budget.
So it's a function of those almost $100 last on the cash operating cost side and then also.
Higher than budgeted gold ounces sold as I mentioned earlier and lower sustaining capex. During the period, we were $33 million lower than budget on the Capex side.
And that part of that came from the temporary change in sequencing and for Kohl's, So we'd lower stripping in the period. We also had some lower stripping costs at <unk>.
<unk> in the period and then just the timing of some fleet.
Purchases and rebuilt so you put all those together, we were $33 million lower than budget for the period, but we think these are timing issues and we expect to see those reverse later in the year.
Just a couple of comments on guidance. So firstly just to remind everyone had mentioned earlier in this call we are weighted pretty substantially 40% in the first half 60% second half for production.
<unk> our production guidance that we were 8000 ounces ahead for the quarter.
We're still on our overall guidance for the year. So our consolidated guidance is 990000.
50000 ounces for the year.
We haven't changed our re guide on the cost side, we reiterate our annual cost guidance than we did we have seen is that.
Run through here, a very good first quarter, where we beat.
Budget on the costs and all in sustaining cost side and I think we can expect that that could benefit the first half of the year as well.
However on the other side, we are seeing some cost inflation.
Some fuel increases I've mentioned already.
And there is also the capex timing issues.
I mentioned as well so that we're going to see those reversed so I think we've seen some cost volatility in the market, we're going to continue to watch it and we'll look at it again for the in.
In the second quarter. So in the meantime, we've just maintained our annual cost guidance and also our annual production guidance.
A couple of general comments, maybe just on the operations as we just run through them. So we're still it's still a big focus in Mali in early February .
We put out an updated mineral resource estimate for the Cardinal zone. So in that we had indicated resources 430000 ounces and then when you have an updated inferred resource.
740000 ounces.
Also subsequent to the end of March we completed the acquisition of the <unk> permit and that allowed us to consolidate that whole land package from all the way up to protect the <unk>.
Are you a cohort.
Square kilometers.
And Anaconda remains a big focus we got 17 million as Craig mentioned on the exploration side 17 million budgeted on exploration for Anaconda.
For this year got a lot of five drill rigs on an active there.
In late March we put out an updated resource for Anaconda.
Reminder, to the Anaconda includes <unk> permit and the tango north permit.
And that resource had initial indicated.
Mineral resources of $1 1 million ounces and inferred resources of $2 3 million ounces. So.
A lot of upside in Mali.
We budgeted $33 million to start developing the Anaconda area and as potential I think with a view to phase one saprolite mining that could start as early as late this year.
Of that 80 to 100000 ounces per year to a production profile, which is in our budget right now.
Within our budget banana Com does not I think bill I'm going to talk about more about this after my comments and there is also a phase II scoping study that we're starting to look at we actually are going to look at.
Beyond just separately trucking to the school the mill, what we might do in terms of stand alone.
Got it.
And then at <unk>, we continue to develop the goldstrike underground mine. Our first development ore production is expected by the end of the first half 2022, and then as I said, we kind of move into full full tilt production there will check underground in the second half of the year.
Couple of comments on the income statements on the other operating results.
Just gains gains on derivative instruments, we reported $19 million.
And gains for the period that $13 million is that all relates to fuel $13 million was unrealized and $6 million was realized but just so that you've got it in your minds are fuel book, our hedge book at the end of the quarter was $29 million in the money.
About two thirds of that will benefit 2022, and we flow those through the all in sustaining cost number is it realized and then about one third will come into 2023.
<unk> as well historically, we've said for fuel, we hedge up to 50% of one year's needs and 25% in the next years.
We're not quite at those levels at the minute, we're about 35% of 2020 twos needs and about 17% of 2023 and that's because we are realizing the benefit of those hedges, but with some of the fuel pricing that we've seen it's higher.
It is keen to jump into the market, putting new hedges on so we're but we're constantly watching it.
And if we see like at different prices or something that looks like a good opportunity.
On a net income basis $90 million net income for the period that was EPS of <unk> <unk> per share.
Four attributable shareholders accompanying and then on adjusted net income base of $65 million or <unk> <unk> per share.
Yes.
Just talk a little bit, but the cash flow again.
Again solid cash flow generating period, a reminder, as well because we're saying we're weighted so much to the second half of the year, we definitely see that the majority of our cash flow the greater part of our cash flows come in the second half of 2022, but even with that said cash cash from operating activities.
In the first quarter was $107 million or <unk> 10 per share.
And just look at it.
Operating cash flow before changes in working capital. So if you look at that number.
<unk> $52 million for the period or <unk> 14 per share.
We maintained our guidance on operating cash flow for the year. This is net operating cash flow $625 million.
And we have seen some higher prices that we realized in Q1 as I've talked about in terms of selling price for gold, but we're also seeing some slowdown in VAT recoveries at several sites that you would expect.
As governments fight their way through the post Covid period. So I think overall, we've maintained our operating cash flow guidance at $625 on a year.
On the financing side $42 million went out in dividends to SKU, we have maintained our dividend at <unk> <unk> per share and as Craig said.
Providing one of the highest yields out there in the gold sector.
And our cash taxes for those that are interested in such things we haven't changed it climb we'll probably talk in detail about that you'll have to talk about cash taxes.
But it's going to be.
Maintained at the $290 million same as we guided at the start of the year.
And then on the investing side $77 million or 78 million cash outflow from investing that's quite a bit lower that's about almost $70 million under budget for the period.
We'd sustaining capex of $40 million, which was $33 million lower than budget for the reasons I mentioned earlier and on the non sustaining side grew about $35 million lower than budget.
That related to the timing of fleet rebuilds fleet purchases underground development that will shape, just the timing some of the payments related to that.
Some of the timing of exploration activities.
But we do expect those to be timing issues and we do expect to see them reverse later in the year.
And Grandma last year, we continue to work towards getting the feasibility study done.
I should know the results of that by the end of the second half.
The first half of the year, but the feasibility study to come in Q3.
And that left us as I said very healthy cash position of $648 million at the end of the quarter with $600 million Undrawn on the revolver.
And I think that concludes the comments that's going to make the financial segment.
Okay.
Okay.
Thanks.
Bill will talk about a few operational updates were actually predict sorry, particularly all of the.
On the content.
I definitely.
Wanted to spend just a little bit of time talking about.
The regional Molly development and what it all means I think theres a lot of questions and maybe misunderstanding on what we've got going on there. So I'm going to kind of work my way through it hopefully in a logical fashion remembering that we have increased the mill to produce 9 million tonnes per annum, which really is kind of the basis of all the beginning stop so at <unk>.
9 million tonnes per annum, we've always talked about our ability to process an additional 15%.
Saprolite material.
Currently.
What is included in the Cola life of mine plan is only let's call the open pit.
And the Cardinal.
Deposit the early part of the positive reserve.
He has since then as you know freed up the men in total.
License There've been Taco license and consolidated by getting the <unk> license. So basically we have the entire belt from for coal all the way north to.
Taco North.
That allows us to do is to have some optionality in where we're going with this.
We have previously announced and we are discussing with the government right now.
The potential to truck from Anaconda, which consists of <unk> taco or maybe potentially separating those and do them individually. Both of those studies are complete both of those studies have environmental and social impact assessment is ready to go. It's just a question now of which we want to go so well.
You also talked about the need to optimize the entire belt. So we additionally have a study going with a little consultants.
Going to take a look at what is the best way to process what is the.
Most economic way to process ore from all of the various sources that study has been kicked off that study will be done by the end of this year.
So that also will play into our sequencing going forward.
What we're really talking about is currently has the potential to have a phase one where we truck.
I'll tell you that.
As Mike indicated we had we have a budget $33 million to get that going we have started ordering equipment.
Come through.
The profile right now we're in the process of ordering equipment.
I will tell you that we are in the process of designing the road from that area. We certainly believe that can be dominated here. It's just a question of which is the best way to optimize it and then on top of that everyone is aware I think that we're looking at the potential to create a standalone complex.
Up to the north.
Kind of a regional mill.
Bill.
So in that particular case, we would be looking at can we.
Holiday some of some of our or based on our existing resources and exploration success to create a second mill.
Maybe have something Michael Cola complex in that area.
So.
That also is being looked at and I guess, maybe the last thing that.
I think people forget about is that we do have the very real potential for underground it for Colette.
We have started studies preliminary studies looking at what happens down plunge a difficult deposit north it while it's still open to the north there is a resource there that we are starting to put a mine plan on and there is no doubt that.
The economics at least preliminary look very good.
So that study is also ongoing in 2022, so in short order what do we have going on we've got the phase one study which will be.
We delivered to the government shortly a phase III study kind of at the scoping level to determine how big this is mel have to be we are optimizing the entire district.
By the end of the year and at a scoping level. We're looking at underground. So those are all the things that are happening within the regional Molly.
Element.
Bill maybe I think it's worth up to 80 people a little bit a lot of talking to states. We've discussed some of the inflationary pressures that the industry is seeing but can you just talk a little bit of give us an update.
Charles the analysts.
Logistics and how we've been able to see our way through this.
Obviously, a challenging time for the industry.
How can we see that going forward between sanctions as Molly.
Others into treatment supply issues.
Just maybe walk us through a little bit.
Yes. It is.
Actually a pretty interesting history, if you think about it so let's actually step back because these are questions. We were having in 'twenty. One we had that you had the COVID-19 pandemic and that at that point that really allowed us to really required us to take a look at all of our supply chain and figure out what was the best way forward and so during that time, we looked at plant.
Plan B plan C plan D and <unk>.
And really optimized our supply chain and then if you remember there was there was Kuwait Molly.
That really didn't even impact us because we had already we'd already kind of optimized that.
<unk>.
The sanctions in Mali, which kind of equalize shut off some of our supply routes, but because we've had a good look at could we bring stuff in through Guinea or throw Mauritania.
It has certainly made us pay attention to where things are coming from it didn't really impact us and then.
Mike briefly hit upon it when the sanctions came in.
It was one of the things we do.
We had to have a good hard look at and so we did assume the worst case that potentially if we couldnt get something in a timely fashion and so we did change our mining sequence at the in Q1.
And the material we are milling, but we quickly realized that our success was that we're going to be able to bring everything again. So we went back to normal operations and then the last one which people talk about sometimes is how's the warrant Ukraine with Russia really impacting us we.
We used to get our explosives at a ratio we're now getting those out of South Africa. So we're seeing that we've been able to adjust right down the line to <unk> to all the various.
Components that make up the supply chain, well I won't say that it is.
Flawless and seamless on the outside it all looks great, but it is something that every day that we have to pay attention to.
Okay.
Thanks Bill.
Before we open for questions and maybe a question on this but I just wanted to cover a couple of things off the Maui situation.
We continue to have excellent issues with the with the government locally and federally.
We've seen in Mali for decades.
Current government that we expect going forward to understand the critical importance of gold mining.
In Mali had that for a divestment to accomplish that working with.
Valeant partners, whether it be private or.
Yeah.
Obviously, we're excited about the potential within a very short term trucking ore down to separately were to increase production.
Through the mill and ultimately is the potential for.
Just exploration and give us the results.
Okay.
During the second mill is because of the trickle of complex.
It has the potential to produce wave your arms a bit.
Approaching us here from their subjects for the drilling of subject to the condition of those pretty exciting opportunity. So we're clearly.
Happy in mining in Mali, and I think there's some misunderstanding about what that means she uses where ramp Gould and back of the data Barrick and many of the companies who have great relationships in Mali financing an equivalent should be responsible we do some great community stuff wishes all details are on our.
Web site, but it's a good place to be probably is a good country to be in gold mining and that has not changed so we do not anticipate that changing so as the.
<unk> reaches agreement of up to a new elections.
The next couple of years.
Getting back to the government.
He believes that he is going to be a good average to be solicit capability as we've demonstrated.
Significant additional vehicle deposits.
Just deposits.
Another one here with avocado just to remind people when we acquired.
Difficult to project from happy owner did an excellent job of taking you through the first stage and into.
The feasibility study, we had 4 million ounces totaled.
Total resources so clearly.
But more than double that.
We think we're really scratching the surface of literally almost within a corner. So good place to be and we will continue to champion malleus, whether companies will try to.
How people understand why we are there and why it's a great opportunity going forward. In addition to continue our geographical Juris occasions. So the things that we are doing also in Colombia.
Such an up cases.
Maybe a question on this.
Get a little summary.
Where we are as we've said and as you know we are completing a feasibility study and will be available in the third quarter.
Closely with our partner and they will go to chassis, where the operator, a 50 50 joint venture and I think we are and I'm sure <unk> is anxiously awaiting the results of the study we've done some significant work to see if we can drop the capital cost by doing some legitimate reengineering and redesign it seems to have had some success. The question is what will actually should do.
222 <unk>.
Cost of some of the gains we might have made by lowering the capital cost will have a better view of that over the next two months internally and then both parties will look at it and.
Decide if they want to participate and make a development decision to build.
We've got a lot of demand, which could produce product as it is called.
For the year as the economics to support the capital cost expenditure.
So we're in the same position of waiting to see the results of the study is our partner and then theres different possibilities, whether BG decided they didn't want to participate we would we buy them out.
Or would you bring another partner in that if we wanted to go ahead, so that will all come out.
<unk>.
As we get into the third quarter.
There has been some neck.
Negative press come out I guess round another project in Colombia.
The Geos Cuba Donna.
And.
But they are pursuing a permit there and had a few setbacks in terms of the government.
Turning to go back and do some more work I guess in terms of satisfying what the government pursuit to see issues with some of their procurement cycle CPG, but I'll just say that we think that granted lots of situations are very different in terms of the location.
Institute location, we are in the right part of <unk>.
Patrick.
Start writing history tremendous local support we get asked all the time, we were down there by everyone. When you can start building. This mine. So we believe that support will continue there is an important election coming up here shortly of Colombia.
We believe whichever government goes forward of Colombia, we believe they are going to those data.
Understood the importance of moving away from oil and gas coal, we can go but it could be something that's beneficial to the to Columbia. So we'll see how that goes.
Right now our relationships are excellent.
HHS with good haircut Swisher programs there we've done a lot of good work as well.
The relocation plans things like that tremendous support.
Okay.
So what are the local population which is critical.
It would be the first significant.
Good morning.
So.
I just want to get those points across.
And now for questions.
Thank you, Sir ladies and gentlemen, we will now conduct the question and answer session. If you'd like to ask a question press star.
Number one your telephone keypad, if you'd like to withdraw your question <unk>.
Q2, using a speaker phone please lift the handset before pressing any keys.
One moment. Please for your first question. Your first question comes from <unk> <unk> with Scotiabank. Please go ahead.
Thanks, Operator, hi, Clive and B to go then.
Congrats on a good quarter.
Especially on the cash cost and all in sustaining costs.
So just starting off on that.
Regarding the guidance.
First half.
Q1, obviously.
<unk> costs came in at 36 guidance for the first half was around $12 50 to 290.
Mike you touched a bit on catching up on costs over the year, but are you being conservative on this guidance or for each one or are you expecting cost to be significantly higher in Q2, or these costs are going to be spread out throughout the year.
While overall base like you said I think we can expect that we'll see the benefit it was a very strong Q1. So we will see some of that roll into the first half for sure I think we can expect that but as a conservative to not re guide has probably.
But like I said in my comments, but prices are quite volatile.
And we are seeing quite a bit, especially in the all in sustaining cost side. We're seeing some timing differences we were quite a long ways under in Q1, So you've got to remember that when you look at that all in cost for Q1.
We expect to see that reverse don't know the exact timing of that yet through the year. So we just felt because of the some of the volatility you see in operating costs, and particularly fuel and then the timing of that Capex.
It was it was better just to maintain our guidance for the half as we have them and for the year overall, but but yes in answer to your question half ones, probably still conservative but maintain.
Maintaining that guidance.
Sounds good thanks, Mike for that.
Just quickly switching gears to Anaconda.
Your team is looking to complete a BLA on Anaconda as a standalone.
Yes.
Several discussions have been in terms of.
And upon that kind of becomes.
Kind of within the quarter comp.
Complex now within that are you able to share infrastructure with pick all in any way and possibly reduce capex to develop content.
Yes for sure I mean, that's probably one of the things that I shouldn't talk about when you talk about capital cost per constructing an entire mill and infrastructure, you've really got to cut a lot of that out I mean, even if you look at things like right now we're looking at how do we how do we.
Align our regional tailings facility, because that's a big capital costs.
Caps or things you could expand the workshops can be shared.
All of that the warehouses, so really everything outside of outside of the mill, even the power rate remember that we've got that additional 30 was it 36 megawatts of solar power. There. So we've got extra capacity and we're looking at it right now which is one of the one of the things we didn't really I didn't emphasize but we just picked up that backlog will be property, which fits between the.
But not only is that a good exploration targets, that's an amazing opportunity for us to consolidate our infrastructure as I said things like talent facility wrote.
Solar plant, we needed that room to the east So theres a lot of good things really associated with that backlog and license.
Thanks for that Bill.
And my last question is for <unk>.
Hi.
In regards to development of grabbing okay.
Or potentially development ophthalmology.
Is that completely exclusive Paul building contact I mean, if you go forward with <unk> does that impact kind of contract and if you go forward with Anaconda does that impact got it okay.
Yes, good question.
And then Joe can help me here, but we don't think so we've always said, we're not going to try and build with our tremendous X.
Construction season, we're not going to try.
And bill to significant mindset mills at the same time, but if you look at the potential secrecy with timing of <unk> ago, and a lot of the.
Infrastructure.
As soon as we can.
Yes, we are perfect, but get the permit.
Reissued but some of the changes that we've made or update I suppose but if you look at the timing of all that we've looked at it quite closely of course, but we definitely will see an issue where the earthworks crews that would be doing the initial work at some electric velocity. If it's a go would then potentially be able to move up but this is also subject to of course.
The additional resources would justify potentially then a cargo into sulfides building. Another mill, we don't know how far off.
Now to look at that we may not be that far off in terms of the resource already in the kind of results we're seeing.
But first of all the priority there is to start trucking the saprolite down but.
If things go well, we hope well, we're trucking separately down for a number of years a couple of years, whether it's going to take to get the full permit to build a mill at a copper if appropriate we would be producing 200000 ounces year from from the <unk>.
Separately, while we build scale and they need to segue into the satellite and everything else goes through the new card, but if you look at the timing of that at <unk>, we see gradual ought to be.
The first thing out of the Saprolite, That's just road building exercise, which we do talk with essentially no brainer for us, but pretty much is when you look at what we've done not only in volume, but around the world, which was a road construction et cetera. So first step is really.
Pretty straightforward really enrolled we expect to hit the curves that by the end of the year as Phil said this multiple sources for ore to feed that for Columbia with saprolite material. So that the rest of industrial about forward a lot of drilling this year I'm, hoping by the end of this year, we will have a better idea of whether we think there's another mill is likely to be the way forward and then we'll start working on that permitting that so while we are doing.
That we could very well be.
Building a mill at Columbia, if appropriate at Carnival.
Lumpy. So we don't see a big a sequencing issue a problem because what youre talking about phase.
Phase two of that economy, being a new bill that would probably slot. It after a couple of I think what we see today.
Sure.
Perfect.
But for me guys. Thanks for taking my questions.
Excellent questions.
Thank you. Your next question comes from Geordie, Mark with Haywood Securities. Please go ahead.
Yes.
Total income was AC.
Very good question.
Maybe with the solar if I can.
An interesting topic.
20% of the power supply from solar.
Q1 does it warrant expansion of that plant given.
The obvious.
Tradeoffs.
Quick paybacks oil prices and the potential expansion.
And they come together.
You keep it at 36 megawatts alone.
No I'll start maybe you could where we're doing the studies right now George for sure we see absolutely the possibility to expand that as solar plant remember not only not all are we bumping up against what are we do engineering wise as far as production, but you also have these ESG components, which everyone is focusing on more and more and the reality is is that that is.
Is one that you can really get some bang for your Buck because we know it makes sense, we know that there's financial payback on it and it's a good story, it's actually the right thing to do there.
Okay.
And then maybe an extension on that one.
Maybe it's obviously.
<unk> <unk>.
<unk> you.
I believe if I remember correctly looking at potentially something in that.
Not sure whether that's still on the lookout.
Yes, so, let's let's handle the <unk> first the <unk> one what we've actually identified there because southern Africa has been so aggressive in putting on.
<unk> energy.
And then maybe it has really turned from a net consumer of power to a net generator of power. So what we're seeing now is that our lines are delivering power much much cheaper cost than we had.
Envisioned even when we designed the plan so.
We have the ability now and we're in the process of connecting to the overhead power line, which will once again reduce our costs and once again, we get the ESG credit because that power is generating from the hydro plant real kind of hydro plant up north and solar power. So we're going to get some benefit from that we don't know exactly how much.
But what we see as an off times off peak times will generate off the power grid and save money that way during the daylight hours of course, a runoff of solar power and very little actually on Egfr going forward after kind of starting in Q3 and then.
The Philippines of course, we're looking at it that's one of those if you've been there you know that land is at a premium in the Philippines. Our questionnaire is now where do you put it Dennis is working with genre.
Really do identify areas, even things like <unk>.
Is there a potential floating in the tailings facility the old waste dump area. All of those areas are being looked at but certainly we are having a hard hard look at that.
Okay, great. Thanks, and maybe one more question.
Before folding into others.
Maybe on the Anaconda again in terms of if you can remind us what potential scale you would be looking at.
We are considering in the future.
So severity or you guys still stable.
And then I'll leave it there.
I'm, saying too preliminary to say right now given the fact I mean, we do.
You know that we want a truck between $1 million and $1 million or have in phase one with phase II looks like don't know what I will tell you is that.
We started out at 4 million tonnes per annum in for Colin.
We're now at 9% I remember last time, you asked me can we go even more than that.
So I would imagine, it's probably something at four or less to start with with the ability to expand.
Okay, great. Thank you.
Thanks drew.
Thank you. Your next question comes from Andy to Sony with CIBC. Please go ahead.
Good afternoon. Thanks for taking my question similar question on the Cola I guess, George you asked kind of what I was getting to in terms of what we're offering.
Our standalone facility.
Youre, saying its too early but I was hoping I could get maybe just one more detail where and when would you think that would start up.
If you were looking at something around $4 million from Panama.
Can I give you a bunch of it I'm madly waving my hands and putting air quotes in the air right now because we don't have any of that data.
Let's just think about.
If we could do a let's say we could do a preliminary study this year and then the optimization and kind of a trade off study and say that it looks like.
It's a go and I know that there are probably a resource out next year that we could then probably.
Put a study on so let's say, we it takes us six months six months study.
At the same time, we're ordering equipment the equipment comes in two and a half years to build it on my math shows that it's kind of 2026.
And then second question would be in terms of overall I guess, we're always trying to figure this out or at least I am thanks, Tim.
The call of proper without the Cardinal deposit and without the Anaconda deposit what's kind of a baseline scenario.
What we should expect out of that asset over the next five years.
I think that information was put out in the PGA, if youre talking about just a cola proper.
Sorry, the updated study which happened in 2020.
Then you have to overlay on top of that and of course, Cardinal and the underground and the increase in mill throughput.
Okay. So if I go back to the 2020 PGA, that's a good starting base.
Yes, it's not the PAA is actually a feasibility study, but yes.
Okay alright, thank you.
Thank you.
There are no further questions at this time, Mr. Johnson back over to you.
Okay. Thanks, everyone for.
Your time and if there's other questions that occur to you feel free to reach out to.
Randall Chatwin.
We hope that you onto the.
Member of the executive team that will do the appropriate work to find the answers to your additional question. So thanks for your time and.
Good day.
Thanks, operator.
Ladies and gentlemen, this concludes your conference call for today, we thank you for participating and ask that you. Please disconnect your lines.