Q2 2023 B2Gold Corp Earnings Call

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Pardon me everyone. Please remain on the line your conference will resume shortly ever.

Everyone. Please remain on the line your conference will resume shortly.

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Good day and thank you for standing by welcome to beat two golds second quarter earnings Conference call.

At this time all participants are in a listen only mode. After the speaker's presentation. There will be a question and answer session to ask a question. During the session you will need to press star one one on your telephone you will then hear an automated message advising your hand is raised to withdraw your question. Please press star one one.

Again, please be advised that today's conference is being recorded I would now like to hand, the conference over to your speaker today, Clive Johnson, President and CEO . Please go ahead.

Well, thank you operator apologies on behalf of the.

The phone service.

Technical issues, but theres, so we're a little bit late getting going.

Welcome to the.

Conference call to discuss the future Gold's second quarter 2020 financial results.

Another very strong quarter.

Highlighting the excellent performance of our operating team.

And we're very pleased with the results.

So it makes us feel very comfortable we're on track.

Our guidance for 2023 for the year granular guidance.

I'm going to pass on them like sentiments showed our CFO who's going to walk you through.

The level of what you probably already read what shows the details.

On the financial results that were going to have an update from the vital focusing a lot of them.

Project construction.

Things are going very very well there. So we were very we remain extremely strong financial position.

And the company that allows us some talk at a high level thought that to look at funding.

Along with our industry leading dividend.

And a very strong cash position.

To go into production.

Alright.

In the first quarter of 'twenty to 'twenty, five I want to deal with that.

It should just come up I guess since we put out a news release about kibali.

It's just the conversations or other potential due 2023 binding coatings.

What we put out there.

The news release, well, what we said in our grocery stores have just took hold of my normal continued reminds of Peach vibe from a KOL that Cardinal actually page six from a cardinal pitch receipt of an exploitation license for about charcoal.

We are hoping to start trucking worked out.

Nicole if you remember the Tacoma mill.

This area remains outstanding pending Finalization exploration license with Bam Tech on North terminal carrier remains outstanding pending Finalization of 12.

20th century mining code.

Hi.

What we neglected to say what all these actions from the MD&A, which is a more thorough analysis of the situation.

It goes into more detail.

Well, we see it in the MD&A on page 11, as the company along with other mining companies are engaged in discussions with the state of knowledge provided.

Post 2020 to Bodycote two at this point it remains a blue ocean.

Any new body code is not expected to impact the existing for coal mine operations, which will continue to be governed by the existing mining convention.

2012 body code.

Perhaps of the new 2020, so anybody call Coca Cola, which devices.

Yeah.

Sorry, I'll end it there so bottom line is what we're saying is that the.

Any proposed 2023.

Mining code.

So our understanding of recent consultation with government actually last week that governs confirming that they are just not just cold is not going to go back to previous existing culture that would be on Basel. The 2012 code and nobody can mention that covers that came up that dictates. The terms the ownership in 'twenty with ourselves and the government of Mali and also dictates your taxes.

So all of the details of that got us into trouble.

We expect this is applying to other gold miners and barley, as well who have solid outstanding cogent conventions from the past. So I just wanted to make sure people understand what we're talking about here. We built we remain convinced that the government of Mali.

For gold mining in the country.

Once people like ourselves as foreign investors to invest we have hopes of plans to expand to the Bali initially by trucking origin grad programs that tackle what other areas Jonathan difficult belt soft saprolite material into the mill.

We also have.

Conceptually, if I'm talking about or looking at a study that could involve building a second mill potentially if the economics work out all the other factors coming to bear with a new resource in the north et cetera. So that's what we've been talking about potential expansion.

It's really important to point out that if you look at the coal as a great success.

Many companies have been a great success for all stakeholders. So we invested over half a billion dollars U S. T bills for call. It a 100% it might be true gold.

20% so call it.

We've actually contributed $1 $2 billion of revenues to rally since it started production.

Andy.

So that calculation see people that have been.

The country of Bally as demonstrated by over 50% of the economic benefit.

So we took all the risk upfront.

They realized over 50% with the economic benefit.

It's been a great success. So we remain committed to looking at further opportunities as a valuable way.

He believes that the government.

So what we've heard remains committed to increasing go many of the countries. So when.

Somebody who comes out we will have some share further consultation with government to talk about how we can work with our partners the government to potentially expand production ethical. So I just wanted to re clarify that situation.

We probably should have been a little better job of explaining the Newsweek, which was about the financial results and an update on things. So at the end of the day I wanted to make sure we communicate with everyone that both the reality of the situation.

So I called out we expect it will continue to be a great success for all stakeholders.

With that I will pass it on.

So Mike just to hit the highlights of the financials and Bill will talk about.

One more point I'll make before I pass over I was.

Quoted out of context, a few weeks ago in an article that said that we were.

Pursuing more M&A.

At the end of the day, our strategy remains very very much the same as it's been for a while here, which is focused on our development projects, which includes the goose.

So people talk about also what was that.

We continue to be committed in building roads et cetera for the expansion of our trucking works. We're very convinced that we're very committed to a large exploration budget. The very large budget goes we're excited about the exploration upside there and other projects around the world, we're exploring including around existing mines. We are not anxious we're not pursuing actively pursuing M&A.

Not to go on another development project that we've never done that before we will not start doing it now trying to go to those at the same time. So I just wanted to get there on the record that we are always looking at what's out there in terms of are there avenues as production growth et cetera, we're not interested in it.

Stepping into demand would there be a problem by somebody else or whether it would be a further better projected build we're busy we're very committed and we're very focused part of our success is our ability to focus on one project.

So with that I'll pass it over right.

Hey, Thanks Clive.

I'll just touch briefly I think and there's also as clay mentioned I think the good quarter from the operations side internationally.

On the revenue side, we sold our 240000 ounces at a realized price of 1900 $69 an hour that's more than a dollar.

An ounce.

Higher than than we were in the same period last year benefiting from a good gold price, it's obviously bouncing around a bit recently, but it's still well above 90%.

Just a quick.

We look forward for the balance of the year, that's an estimate.

On the production side.

Again very much on budget.

Total production from our three operating mines and 246000 ounces at just almost exactly on budget and when you take in our share of calibers results, which is 24% share right now 263000 ounces right on budget overall solid one where it's not just there for coal it was little under for the period.

8000 ounces below budget at 152000 ounces are they there was a delay.

Excavator there.

Slightly lower production from phase two through.

Through our ability to access the pattern.

On a production mining we can actually do there, but we believe we will certainly get for colas targets for the year.

My body was a little over budget is 49000 ounces, so 5000 ounces higher than budget and they benefited from higher than budgeted mill feed grade and mill throughput and they know what you call. It was a couple thousand ounces over for just generally better than slightly better than budget on all factors. So overall right on budget.

263000 ounces in total production for the company.

Translating out on the cost side.

So $636 an ounce.

Overall, including our share of caliber $600, an ounce from our three mines.

So that both of those numbers were $335 $40 lower than budget overall, we did see some offsetting factors.

<unk> was $538 and I'll say it was actually a little higher than budget, which is a function of that lower than budgeted gold production.

Effectively.

On the fuel side, although we saw some offsets there so diesel was a little lower than budget. But then we also saw egfr were switching to a new venture forward source, hoping to switch then you went to each of those sources.

For 180, which is a little greener I think for our environmentally friendly so that's a little more expensive than what was budgeted.

MS body $817, an ounce, which is more than $200, an ounce lower than budget and it really benefited from lower fuel fuel costs, we were at 20% plus lower on the on both the seasonal nature for Atmos body <unk>.

Our Dakota was also to more than $200, an ounce lower than budgeted $611, an ounce period and it benefited both from the slightly higher production as I mentioned and also.

Lower fuel costs.

A significant lowers my body, but still lower and also a weaker Namibian dollar. So remember a high proportion of our cost and then maybe are denominated in the maybe a dollar so when the maybe weaker translates into lower U S dollars and we benefited from that.

When you look at the all in sustaining cost side.

Including everything our share of caliber 1200, $14 an ounce.

Oh It was it was a little over budget for the period and that's really a function of.

Overall, lower cash costs, but a higher capex.

Most exclusively based on timing, we were lower in the first quarter on a lot of Capex timing, we caught up in the second quarter, particularly on some of the mobile Pos across all the operations in some of the stripping costs. So overall level.

Higher than budget, but no change overall to our guidance for the year. So I'll just comment on that so I think as we reiterated in our MD&A.

The news release, we expect that our guidance is unchanged for the year annual guidance, though including our share of caliber somewhere between a failure in $1 60000 ounces or milling 80000 ounces for the year.

On the cost side no change to the cash cost operating guidance for the all in sustaining cost guidance, we did mention and as I mentioned in the remarks, we are benefiting from lower fuel costs as we go through both of them.

The first and second quarter. So we are watching that we'll watch that as we go through Q3, we still see the benefit of that rolling through them as bad in Namibia for the balance of that Q3, I think we will come back in and look at our guidance again, but right now we're maintaining our guidance as is.

Your comments that some of the other operational bill is going to talk to some of them but.

Mr Cola regional development.

We've continued infrastructure development ever got the roads and we did have 80000 ounces for bed tackle production in our guidance for the overall for coal complex for the Euro is massively pipelines.

We don't see that coming through now in 'twenty, three we think that will roll into 'twenty four but we think we have enough optionality and the availability of water for.

<unk> generally that our guidance will remain unchanged, we will still meet guidance for call. It complex.

Ah Ah Goose Bill is going to talk to you we did put out a news release.

Updated our Capex estimate in the period that came in very close to what we said as we went through the acquisition itself.

So 800 million Canadian for the for the core construction of the plant and then about $90 million that for accelerated underground development, where we see that we can actually we can do more than was originally planned upfront and then we'll benefit from that in the first few years of operation that goes so we're still on track.

To break this out in Q1, 25, and our share of <unk> acquisition cost when you translate it into U S dollars after taking into account the spend it to be and already had its just over 400000 U S. That's where you expected to incur to complete the project.

Oh, Chicago continues on and just a reminder, as well there is a oh Jacobus shuffled ramped out of 'twenty for an open pit mining activity, which go to pit to conclude and twenty-five but then we will have ongoing production from goldstrike underground as well as stockpile.

Processing that that should take us right through into early 'twenty 'twenty 31 somewhere around there.

Ground will actually the sales process is ongoing no updates to update you with there is a present strategic investments you saw us look at that the most significant one in the current period and they put a great number today was snow wind so.

We invested 32 million therefore at nine 9% interest in <unk>.

That's part.

Part of the company's ongoing strikes you just like you saw us invest in Matador for nine 9% investment last year and then the other thing to highlight maybe on just projects that we did disclose 20 million more in exploration for the year were well over $80 million exploration budget for 2023 and that $20 million addition is exclusively for.

Back wherever the back River district, so both goose, so more work there and the George prospects there as well. So we're excited to get up there and see what else we can make for <unk>.

Couple of other comments on the results, though earnings overall.

<unk>.

Attributable to shareholders 80 million or.

<unk> per share adjusted earnings were <unk> $86 million or <unk> per share.

And then on the.

On the cash flow side, we have good operating and overall cash flow quarter $195 million.

Cash flow from operations or <unk> 16 per share. So we benefited like I said from a higher gold price production right on schedule.

Good good cash costs overall and add some working capital timing. So 195 billion is a good result on the financing side.

A couple of items to comment on there with the acquisition of the main item that impacted the certainly the balance sheet overall and.

In the quarter was the acquisition of <unk> as we brought in those projects onto balance sheet and in doing so we took the opportunity to extinguish.

Some of the existing.

Financial obligations that that Sabine it entered into as part of their financing package. So in total we spent $111 million, which included extinguishing the off take agreement that was there with a private equity firm and also to extinguish one third of the existing Gulfstream with Wheaton precious metals and we did that because we are in.

Effectively.

Royalties and we obviously really like the prospectively it grossed them backward, but generally so it makes sense to try and take those out upfront different cat. So we took that opportunity.

And on the dividend side, we've maintained our <unk> <unk> per share for the quarter. The dividend is higher this quarter overall in gross terms because of that extra 200 million plus shares that were issued as part of the Sabine acquisition and it's our goal to maintain that dividend going forward that level of dividend going forward as well as financing our capital obligations that we have.

Our various development prospects globally with more significantly that goes the prospect.

This project is currently underway.

We did finish the period with that great financial shape over half a billion dollars U.

U S and the bank and we still have an undrawn.

Revolving credit facility was 600 million, we added national back in for another $100 and over $700 million available on our line Undrawn.

$1 billion in the bank at the end of the quarter. So at 1.2 and sort of available right on hand liquidity and as we look forward.

Breaking gross online as we go through.

I think what we see is we were very comfortable in our ability to finance goes.

Keep paying the dividend as we see it and then also evaluating sort of the other capital needs that we have a ground under group. So I think we're in good shape financially there.

And with that I think the only other thing I'd add we'd like to give you an update on cash taxes. Each period for your models. So we did update the MD&A. There is an increased cash taxes, they're just over.

$250 million and Thats, because we budgeted at 1700 dollar go and now we're re forecast we've come out through the first half of the year over 1200, and we're forecasting $18 50, so so our new cash tax.

It is approximately $250 million just for your models.

And with that I'll hand, it back to clay.

Thanks, Greg.

Pass it over to Bill.

A high level update on the exciting progress we're making.

Goose construction sure. Thanks Scott.

I guess I wanted to start out with talking a little bit about the.

Really the key things for this project number one obviously.

We continue to maintain excellent relationships with the <unk> Association up and none of it.

We've had several stakeholder meetings over the course of the quarter introduce them to the B two philosophies and very positive outcomes.

I think everyone's aware this really more than anything this project.

Relies on logistics for success and if you look at the timeline, we've been very publicly stating that yes. In fact, we will try and maintain the existing timeline, which has us producing first gold in Q1 2020 by with that.

The logistics.

Overall, it just because it has gone excellent so far I think everyone's aware <unk> has their own logistics group procurement logistics group that.

Has done this before we did it in far East Russia.

And so they've jumped right in and really maintained the excellent progress that has already been done so far theres been a her program of C. 130 program, we brought in more than 60 loads for that for the summer season. This year all of the shipping and ordering has basically been completed now so things are on the both heading to.

Towards that metric marine lay down area.

Barges, which were stranded last year by Sabina had been picked up and they've arrived at the marine Marine lay down area. So overall as of today.

We see that the procurement logistics remains on schedule.

As part of the next phase we needed to come out and finished the phase one construction of the cap that was completed at the end of July . So we currently have.

More than a 130 beds will be going up to over 200 here over the next little bit and that allows us really to bring our full construction team on site.

So the construction team at least the first wave has arrived and just to remind everybody kind of what the scope is this year. This year. We've got it we've got kind of three major areas that we need to work on we've got the.

The mill of course, we've got the powerhouse and we've got a big workshop that we have to get done and really the scope for this year is to get the concrete and get the steel up and get it out whether it in so the concrete group has arrived on site. They are currently pouring concrete and I should add that originally we had in <unk>.

Heritage from Sabina kind of an EPC contract, which you know is not the typical <unk> model, the <unk> model or self perform.

We ended that relationship and we've now brought back the same group that really has made us successful for the last five projects as a write back on site and is in the process of pouring concrete so that is going very well.

And.

Actually so far that even the structural steel superintendents and supervisors have arrived on site, they're busy sorting steel with the intent of getting everything put together you can't on the ground and waiting for the concrete to be towards so we can move forward very quickly on that.

On the underground side, just looking at it one from a from an operational perspective that goes very well.

We have so far.

We've come down a couple of benches already remember the first open pit is going to be used has to be mined out for our tailings location. So that remains on schedule. The underground we've developed more than 1300 meters in that decline more than a 128 meters in Nevada raised in more than 374 meters and the access ramp.

So basically everything remains at or ahead of schedule and what's probably more interest you we talked about initially be.

<unk> acquired the project the potential to kind of front end front and some more ounces and so the engineering team here in Vancouver has been working with our site engineers.

And I am pretty happy to say without having the final detail details, but certainly we are looking at kind of in excess of 300000 ounces a year over the first five years of production, which I think is significantly more than what was in the feasibility study.

Along with that we've of course taken a first cut at what kind of the operational costs would be and I think we've already said it at least several times in the market, but what we're really talking about it we're talking about $1000, an ounce plus or minus right and they're remembering sorry, that's yes, and then the all in sustaining costs.

And.

Remembering that that is still preliminary but still some final work left to do.

<unk>.

Mike already talked about the costs that we are talking to right around $800 million Canadian plus an additional $90 million Canadian for Supercharging. The development of the underground and I guess, maybe I'd add with it I believe everyone's aware that theres, an analyst trip coming up I think the 26th of September where we'll be.

Introducing people to the work that we've done on site, but also the excellent management team that we have.

We brought all of our problems have been and also of course, our construction team.

Of course, showing our excellent progress and logistics that we've had to date.

Thanks, Bob.

Board meetings over the last couple of days of course to review the quarter present results.

A lot of discretionary presentation around.

Goose of what we're doing there and I think I can say the board takes great comfort in stride two.

We are doing there and the experience factor overachieve as Phil touched on.

This is what we do as we build our own mines and we have a history of doing your own merchandise schedule, where either they had and we feel very comfortable where we are today is bill <unk>.

Bill has highlighted and you'll see that those of you who make the trip up there theres a lot of companies have struggled with.

We're very aware about.

We believe that we can set a new standard here for.

How we do it whether it's northern Russia, our northern Canada. So we refer to the boards feeling very comfortable with the work that's been done that we inherited.

Good situations of speed that they can work and work at exploration feasibility.

<unk> kicked off.

Construction in a difficult circumstances, a single asset company to be to be able to arrange financing and advanced the project. So as Bill said, we've combined our team with some very good people. So we know.

We're pleased with.

Sticking with the project Joe forces with Us so a lot of work's been done.

Okay.

With partners <unk> XR relationship there if you look at the history of future goal could be taken that culture of purchases by some transparency around the world and the key is to deliver the promises you make so we're very excited about what we can do working with the <unk> for US we've had some progress things like education health care and other areas in the door.

Its close with our partners so the other exciting thing.

So Peter knows this very well so it should be the shareholder noticed very well.

<unk> regard to direct think which is focusing on advancing this project. Therefore, they were not going to spend an awful lot of money to exploration globally.

I would like to at the end of the.

They did the right thing for the shareholders. So they got to go.

The largest exploration budget because of the fact that we're trying to build to finance buildings and my absolute focus of course. So we're very excited of exploration upside as I'm just going to pass over to Vic here quickly you could talk about how many rigs are outside of what our plan is for this year, we're exploring the Vancouver, the huge back river property as well as further looking at the extensions.

Goose and George to cause absorbed GP.

Thanks Claude.

I guess straight out of the gate.

We're active.

The Georgia project.

Basically the focus there with.

Due to.

Waiting for space to open up for the exploration team down at the <unk> project.

We've completed 12, both that we then have.

Okay.

Many of the results back yet, but thats that program has been.

<unk> completed.

The focus now with the.

Accessibility of accommodation down it goes for the exploration team is goose itself to remind you.

Five excellent deposits there.

They are all open downtime.

Does that.

Immediate.

Potential that to actually extend these resources down plunge.

Looking forward to that as Mike pointed out.

We had $20 million for the balance of this yet.

In the budget, which is.

To put it into context.

Sabina was spending around 5 million Canadian.

Annual exploration.

The 20.

$527 million.

Is five times that much in half the time. So there has been a very extensive.

Ramping up of exploration.

At the back group of project.

We have five rigs planned for surface drilling at <unk>.

At Goose itself.

And then as we get access to.

Underground drilling up possibilities.

Trapping in one or two rigs to that hopefully.

Early towards the end of this year or early next year.

So yes.

<unk>.

Very very active in terms of our exploration and ramping up very fast.

Thanks, Doug.

So we are in terms of early stage.

Great exhibition team Speedo, and therefore knows our strict of exploration has been a great job.

From a mix of the experience of those would be the charges exploration team and all their knowledge to projects. So thats another area, where we're combining forces to aggressively pursue the exploration opportunities that we see there.

I think with that operator, we'll open it up.

For questions.

Thank you.

A reminder to ask a question. Please press star one one on your telephone and wait for your name to be announced to withdraw. Your question. Please press star one one again, please standby, while we compile the Q&A roster.

Our first question comes from the line of Ralph <unk> from eight capital.

Thanks, operator.

Good morning, good afternoon, everyone Clive I appreciate.

Clarification on the moly situation, but I wanted to come back and maybe ask a question sort of in broad terms.

When you are engaged in discussions and the solicit your feedback.

Where have you think that the concentration should be in terms of given your input right where are there any specific issues that should take precedent and these discussions in your view.

Well I think the.

The discussions with the government ourselves and from what I've heard other fighting for investment companies successful and modeling is the fact that we're maintaining.

The importance of maintaining an attractive economic environment to go into a bit of investing.

As we've done in the past so thats, what we emphasize to cover that we always do this everywhere, we go and our conversations with government, which is find the balance there fair reasonable tax regime, which we feel we have.

We've had a cost scenario.

Obviously for a public company.

Part of part of the incentive of what we do is profitable, but I think so our conversations with government at all governance has always struck me about what is what is fair and equitable.

Maintains an attractive environment always have such a rich history of <unk>.

Yeah.

The governance for.

<unk> been there a while.

Longer than us now of course, Barrick, but they've been very <unk> been very good to work with they have changed the mining costs over time.

Two more reflect the reality of the kind of standards that we see worldwide. So I would say the 2012 code reflects will be considered viewers are fair and equitable environment for all stakeholders as I mention so that's kind of the focus when we talk to governments all around the world is satisfied that balance with the people of violation of course benefit from full production in the country of course of <unk>.

At the end of the day, what's the balance because they are not at this point time able to raise obviously billions of dollars as we have done to build something like for coal so thats the balance.

We've had successful conversations on the history of valuable producer I believe we believe going forward the government.

As Keith let me the economy is driven in part to the pre submitted was typical production, but we believe they are going to see more successful development of core by Boeing.

Following.

Got you yeah. Thanks, I wanted to switch topics and come back to the.

The construction update that goes that was given last month and the move to.

The move to long haul.

Underground for arm wealth write down and I'm, just wondering does that move sort of stoping ore pass in all of this development.

One of the critical path items. The reason I ask is that that particular deposit on the Oleds have been our plan was at the front end of the mine plan and just wondering how sort of or sequencing by deposit happens now that youre sort of changing the mining method.

Yes, so youre actually like right in where we're at right now in the design. So I don't really want to comment I would maybe say give us another quarterback give us another quarter to really kind of come back and answer that correctly. We are looking at the sequencing and really a lot of it revolves around the crown pillar.

That needs to be mined out ahead of when you use that when you use the pet for tailings and so sequencing I don't think were ready to talk about exactly which one but certainly long haul stoping. It seems like the way to go for us that we can cut you out.

Just to be add to production profile.

Yes.

Yes.

Alright, Thanks, Bill Thanks Cliff.

Thanks, Rob.

Thank you one moment far next question.

Our next question comes from the line of <unk> Habib from Scotia Bank.

Thank you operator.

Okay.

Hi, <unk>.

Wanted to say congrats on another strong quarter and great to see development of goose progressing well.

A couple of questions from me.

Number one just on the sustaining cost.

Yes.

2023 seemed a bit light about high sustaining capex, yes.

The project came in at the beginning of the year at the same time that should we expect sustaining capital to subside going into 2024 or should we maintain the same kind of spend going into the next year.

I think you can see it come I think we guided that obeys when we put the budget out.

A chunk of sustaining capital some of its fleet, it's time to upgrade some of the fleet, but also deferred stripping was quite a big number as we put out in the budget. So there was significant stripping campaigns, both ethical lot of new faces and.

And then maybe a broad Chicago.

So obviously like to establish Chicago, that's winding down I guess by the by 25. So you Shouldnt expect the same level mine plans bump up and down a little bit, but generally speaking the last year and this year, we're happier stripping periods.

Got it.

And then thanks for the color on that and just moving on to color that.

Specifically the koala underground.

And maybe this question is for Bill.

Believe youre looking to release, a new mine plan at the end of <unk>.

That includes the plan on the underground but is there any update you can provide on what particular underground kind of looks like or how youre envisioning that.

Yes, I can provide an update kind of where we're at for sure. So you have to remember the Cola underground development more than anything was to really get down to the deposit and drill it off to an indicated resource grade so.

Well, we do have what I would say a conceptual mine plan on that.

What we really did was prepare development and got approval from the government to get the development down the face I will tell you that that development because it was a rather new concept in Mali, where you did exploration from underground.

A little longer so we were about a quarter behind but all indications are burn cut is onsite right now they are doing the development for us is that they will catch up and we will see that in Q1 2025. So.

I guess the.

The short answer is yes, it will be part of the update at the end of the year.

It will contain really the resource that you've already seen edit inferred level as it fits to the whole plan there won't be any update for that but it will be part of the year and update the comprehensive for Cola complex.

And basically I mean that I mean.

Is this.

Steady kind of kind of see if this is feasible or is this kind of already given the green light and we should start seeing some production from underground.

Underground.

In the near term.

In 2020 to 25 is when you'll see production out of the underground.

Got it okay. Thanks for that.

Just.

Moving on to the exploration program at Goose and George.

You guys mentioned drilling has commenced.

So when can we start expecting some results from the program and again is the priority.

All of this exploration program to kind of target near mine.

Exploration are you looking more to regionally as well.

Yeah.

Okay.

The target at this stage, we started as I said earlier at towards four.

Basically logistical reasons.

Thats the reasonable work that's been done to date the focus now will be at.

And there is a mix there.

As I indicated earlier.

Looking at the extensions of the known deposits that's the focus this year.

This also targeting particularly the crown pillar area and below that.

Do you actually provide more detailed info drilling.

To some extent.

To allow that planning.

Clearly.

The mining of that comm pillar within.

And within the timeframe so.

In terms of more regional work, both at Goose itself, and George will probably pick up on that.

Next year.

But certainly we've got a lot to do even on the extensions that we have of the existing deposits. So good results.

I'd say the timing of the results.

I guess because of the location.

The turnaround is not great on the assay. So we're looking at four to six weeks at least.

So having just.

Basically this week it goes.

We're looking at.

Probably another two months before we start seeing some of the results coming in.

Yes.

Sounds good and thanks for the color on that one as well.

And just shifting gears to the situation and reject now because obviously it doesn't have any exposure in Asia, but maybe can you provide any color or thoughts on Magellan.

The impact to your current portfolio.

Well, obviously always watching what's happening there.

People that arent for our circumstance.

And not only we are working with the current government.

Government is popular the two a few years ago was a bluffer SKU there was dissatisfaction with widespread amongst the people would be covered up the day at the time.

I think if you talk to our people at Valeant that many people value the fuel.

The government of Mali has done some good things for the people of Mali. So I think there is some stability there they are heading into elections committed to elections next year. So sometime soon.

Estimates misinterprets or Misreads was heavily in each of these countries I'm not an expert.

And I really won't comment much about that at the end of the day remember, we're hoping to see continued.

Political stability and we believe we will see got it.

Ali.

The other countries with westar.

Yeah.

Okay. Thanks for that driving that that's it from me.

Thanks for taking my questions.

Thanks, guys.

Thank you one moment for our next question.

Our next question comes from the line of Don Demarco from National Bank financial.

Alright, Thank you operator, and good morning, good afternoon climbing team.

First question after the call on Bill you mentioned that there is or available to replace the 18000 ounces that would've otherwise been trucking.

With this replacement or be comparable in terms of.

Grade operating costs and Capex.

Could you or that would have been trucking.

The answer is yes shortly.

The short answer is yes, it will most likely come from a cargo or some of these some of the kind of extensions up for call. It so with it being closer than coming from methodical way it has to be at or better.

Overall cost that you would see a cardinal so you should model. It is the same.

Okay, and it seems like you've got some flexibility there with Cardinal Portland General.

If some of these trucking delays persist into Q1.

You also have the flexibility to replace what you might have otherwise tracked for a period of time.

Yes, I mean, we are remember we've always talked about the kind of flexibility. That's the beauty of having all those licenses and settlements getting set up the way we are to be able to mine for multiple pits, we still are projecting that.

In 2024, we will be trucking from the <unk> area right. That's still in our life of mine, so if that changes, which I cant imagine at this time that it would I mean, when we were just there meeting with the government.

Now that now that they've kind of gone through the review of their mining code and are trying to sort out what they're going to do with it. The technical guys are saying we need to start moving this stuff as board as fast as possible. So we absolutely see bring.

Bringing some regional stuff and in 2024% with gold mill.

Okay, and while we're talking about.

For colon Nowy you've been there firsthand with these negotiations how would you describe the sort of the tenor of the meetings.

So you have a long standing positive relationship with the government there.

<unk>.

Are you seeing based on what.

Your engagement there that should continue.

Absolutely I mean, what we've been saying over the last quarter, and which I just validated being down there for two weeks was that.

The Mali government considers btu kind of the poster child of what they want and mining there. So.

I didn't really hit on it but the reality is if some of this talk about changing the mining code is really bringing up some of the other people that are not under the 2012 code to kind of what we're doing right. So as far as we're concerned we continue to have a very good relationship and quite frankly, we expressed our concern.

One really the way that the discussions around the mining code have been happening and every one of the government officials I met was saying, we do not want to slow down mining in modeling it as a cornerstone for our economy.

Okay. That's good that's encouraging.

Then shifting to goose.

Gratulation and the progress so far and one of the items you guys did successfully completed the ice road without any incident.

And you actually create came up some creative ways to expedite development next year.

My question is have you looked at the cost and benefit of building a permanent road per site.

And if so what might that cost can benefit some of that could be.

Well I think that Sabina had looked at it there's never going to be at least in the short term or permanent I should never say never but the government and the key IAA up there do not want a permanent road into the site and so that would really require extensive extensive discussions what you can do is there is some <unk>.

Then you could actually put down some base.

Within your license area to shorten what the ice road would look like and but I don't think you'll ever see an all season road wrote in there.

Okay great.

Well that's interesting, but it seems like that's good for that thanks for that color.

<unk>.

Last question on that body, Okay, we see Mack Daddy benefiting from lower fuel prices.

There could be a guidance cost reduction.

Are the fuel cost running below budget at the other mines.

Yes.

Yes.

They are there also.

Maybe they are lower than they are not as much below budget as misguided and remember in Namibia.

A window sulfur HMO because now we're connected to the grid. So it's only really diesel cost that were exposed to fluctuations there and in Mali diesel is a bit lower but all of this new blend of <unk> is a little higher so kind of more neutral overall fuel costs with values. The one that has impacted the most.

All right now.

Okay.

Okay, well that's all for me. Thanks, a lot. Thanks, a lot for that and good luck with Q3.

Thanks, Tom.

Thank you.

As a reminder to ask a question. Please press star one one on your telephone.

<unk> for your name to be announced to withdraw your question. Please press star one one again.

Our next question comes from the line of Anita Soni from CIBC World markets.

Hi, Good morning, guys and thanks for taking my questions.

Just following on Don's question about.

The fuel as I recall, and maybe maybe I'm thinking of that incorrectly, but it wasn't to you but is there a little bit of a lag in terms of the sort of your inventories and the effect that you have in terms of fuel pricing. So.

Question really being what could we see.

More of an effect going into next year.

Fuel prices come down.

There's probably two or three parts to that historically, we had disclosed there was a lagging in Mali, because the governments that fuel and what we'd seen certainly initially.

Over the last couple of years was they were they were much slower to react to change the fuel price than the underlying market price was.

In the Philippines, you see that.

Correlation impacting much more quickly for example.

So thats one the setting of the fuel price by the state and Molly does create a lag sometimes the other one to think about as you go forward is not in operation of the Goose theirs.

Short shipping season, so youre going to be shipping fuel and in large increments over the summer and that fuel is going to be used over the course of the year. So youre not going to see the same direct correlation with the market price there for goods jewelry, because it's going to be inventory to net used and so as we get near to goose coming into production, we will be able to give you more guidance on that.

As you know the quantity of fuel in the valuation of subscribe to it but.

Those are the two main timing differences I think you've got to think about government government pricing in Mali, and then the impact of Goose, having note the short shipping season, when it comes into operation.

Okay, and then just in terms of the.

Sort of cadence for the rest of the year and quarters.

Sure.

Running I think at about 50% already.

Where would you expect it to be slightly more back half weighted it.

At these assets or was it relatively even like we could just continue to.

All data.

It was relatively even but we did disclose in our Dakota. They were they had more but as you get into <unk>.

Walsh I underground and somewhat higher grade parts of the later, which go to open pit.

You get it was weighted like 60 40.

Second half to first half of the year, So youll see a slightly higher production with Jakarta, and pickles, The officer and Mr. Cola <unk>. So overall not really significant fluctuation on the total production from our sites.

And you would expect all else being equal that the cost of a tariff follow the opposite trends then I guess.

Historically, that's correct and like I said.

We havent re guided in half two.

After the first half, but we will come back and let you know where we think things are at just as we gauge fuel prices going through Q3.

Okay, and then lastly on the Goose project you mentioned that.

<unk> gotten rid of BCS EPC contract and move to your own.

Owner operated nothing fleet I guess.

Can you are there any costs associated with terminations of those contracts that we should be thinking about or is that already included within the budget.

Hi, Jeff.

Just announced a couple of weeks ago.

Yes, it sounds like the legal question.

But the cost the cost of termination was was nominal and you won't see an impact on the on the budget that was put out its factored in for sure Kevin greatly list.

Okay.

Well I look forward to going on I'm sorry.

Thank you at this time I would now like to turn the conference back over to Clive Johnson for closing remarks.

Okay. Thanks, operator, thanks for your good questions. So just a couple of things one thing I noticed that I forgot to mention a very important thing of that is that as part of our going forward. It goes backward, but we will be looking to of course maximize.

Employment and training other industrial and touch on that but that's a very important part of as we look at all of the countries were able I think everyone's aware of it we are well known for having very high deployment for vocals of the 98% range I think as a company. So here we are back again, but bringing the culture. It's a successful around the world to beach vocal coach back to Canada.

We can do a lot of good work there in terms of working with the community and training and deployment.

Sure.

As you pointed out.

We have a very good relationship with the new activities up there we have an agreement.

Assigned with them that was signed under Sabina, which does ask us to maximize kind of local hires and we've really taken that to heart.

With that we are well over.

I want to say, we're in double digits percentage already.

And hiring of the U S in <unk>.

That number is only going to only go up as we create job training programs and opportunities for them.

Yes.

Thanks, Rob we covered a lot of ground and thanks for your time any questions.

Any follow up questions.

I'll talk to Michael Macdonald.

We'll get the right individual to answer further questions. So thanks for your time and let's remember this is a really good quarter.

We just put out are reflective of I believe.

Well.

However, we are doing this company and are excited about we're excited about our growth prospects going forward.

So thank you very much.

Thank you. This concludes today's conference call. Thank you for participating you may now disconnect.

Okay.

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Okay.

Okay.

Yes.

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