Q1 2024 TRX Gold Corp Earnings Call
It's now my pleasure to introduce Kristina Lolli, Vice President Investor Relations with T. R Exco, Christina Florida yard.
Kristina Lolli: Thank you, Dave and welcome everyone Here at School Corporation first quarter 2020 quarter result presentation.
Kristina Lolli: As a reminder.
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Speaker Change: The conference that Ritchie, Thank you Christina.
Speaker Change: We've got a little bit of technical difficulties. This morning, So you're hearing us from actually Mike Stifle, you'll save me may be I'll call it across the table.
Mike Stifle: People speak and I hope everybody can hear it just fine.
Mike Stifle: So thank you for joining us.
Mike Stifle: For our first quarter 2024 results webcast.
Mike Stifle: We're in a very interesting point because.
Mike Stifle: Right now we can.
Mike Stifle: Both Andrea might go out in line with historic smell.
Mike Stifle: The new plant.
Mike Stifle: And when it's going to come online so.
Mike Stifle: We're <unk>.
Mike Stifle: Really getting through the crushing circuit.
Mike Stifle: That is now.
Think of around 60% to 65% built yourself habit lottery.
Speaker Change: Yeah, we're having a lot of rain. So we're hopeful that it will come online between the end of January early to mid February and it's all dependent on the weather.
Speaker Change: It's rained a lot more than anticipated this year and East Africa, particularly in Tanzania.
Speaker Change: So that is exciting and then and.
Speaker Change: And then at the same time, the ball mill components and stuff like that are under way, you're starting to get installed as well. So we're really excited for that because that enables us.
Speaker Change: Two really.
Speaker Change: What on the drill bit towards the back half of <unk>.
Speaker Change: Of the calendar year, given that the increase in cash flow should be should be coming through.
Speaker Change: Plant gets online.
Speaker Change: I'm really excited.
Speaker Change: It's a really exciting period.
Speaker Change: So without further Ado I'm obviously.
Speaker Change: As a public company I have to refer people to the cautionary note and referenced the back there there will be forward looking statements.
Speaker Change: This presentation and so I would ask our investors and any other people to go to a website to use gotcha.
Speaker Change: So underlying today, we have myself.
Speaker Change: <unk> Chief Executive Officer, Andrew is joining us from Tanzania.
Speaker Change: And.
Speaker Change: The orange shirt, we'd like to keep them in our hands.
Speaker Change: Much as possible.
Speaker Change: And then.
Speaker Change: Mike Here Who's next to me and Christina.
Speaker Change: For me as well.
So just starting off with some similar.
Speaker Change: So we make them in all presentation.
Speaker Change: For anybody who is new on this call will be our goal. We are a team of experienced leaders developing and rapidly developing a gold project in Tanzania, you have an operating plant that's been achieving high margin positive cash so we'll get into that.
Speaker Change: Few minutes and we have the special mining license. It has significantly significant news sky potential for new gold discoveries.
Speaker Change: An overview of our property the Twenty-twenty resource statement had 2 million ounces in the measured and indicated category.
Speaker Change: As it comes to surface, which enables us to do all of this 20 meters wide, we have straightforward metallurgy bright crush CIL, we're fully permitted under a special mining license. Our current license costs 22, and it's completely renewable till the end of the likes of deposit we've had of a processing plant has been online for.
Speaker Change: Just over a year at a thousand times per day that is consistently meeting production guidance, we have minimal environmental footprint, we recycled water. We have good talent management connected to the national power grid and as I mentioned before and I always brings a great smile to my face is the exploration potential around this property our business plan.
Speaker Change: And it has been that as the communicated is to grow production to increase cash flow to eventually increase exploration.
Speaker Change: Yeah.
Speaker Change: But one of the things that we've been very proud of and it starts to really show in the numbers and they start it will start in a really broad ways. We haven't done a capital raise and I believe in over two years now am I correct, yes. So when we originally got into the business as it is a lot of the historical investors are aware we.
Speaker Change: Had to recapitalize the business to do all the things that we're doing so in that when we look at the net equity cash that was raised over two years ago in around $23 $5 million and then we look at what we've invested into the property sets that are both by from that those races as well as well.
Speaker Change: The cash flow that's been generated by the asset the multiplier on equity now that was raised is around one seven times and world.
Speaker Change: Is it starting to prove out the business model is much different than it is.
Speaker Change: We're going to build as we go and increase that investment.
Speaker Change: The increased cash flow and you're seeing that in both the production numbers as well as adjusted EBITDA and cash flow from operation numbers. So in fiscal 2023, which was August we had sales of almost $38 million over $38 million with cash flow from operations of all of a sudden.
Speaker Change: And adjusted EBITDA.
Speaker Change: Around $14 billion. So we're starting to really see it in the financial results of the company's business plan working we've done this while controlling.
Speaker Change: G&A expense at the same time.
Speaker Change: Which is a.
Speaker Change: Which is great. So we've grown from.
Speaker Change: In that period of time from around including Bob Grieve 30, 35 employees now coody contractors that Buck right to well over 500 people work keeping our G&A.
Speaker Change: Q1, 'twenty 'twenty four highlights Mike will get into this in a second so I'm not afraid to go so there's a very high level and we have positive operating cash flow again in this quarter, which is being reinvested in the Gulf projects, all completely invested almost $4 million as I mentioned earlier, we continue.
Speaker Change: Need to have prudent capital management, you're on a third consecutive mill expansion as of today, we have approximately three between a half million dollar to spend on that which we generated cash flow from operations. So that the sources.
Speaker Change: We continue to have strong gross profit margins.
Speaker Change: We expect those to ride this new plant comes online if gold prices stay at the same level.
Speaker Change: And we expect the new plant to come online towards the back half of the fiscal year and.
Speaker Change: Just prior to the end of the second quarter calendar year.
Speaker Change: And then thereafter as that cash flow comes online.
We will commence a much more of that drilling program and we're starting to plan. There now we caught up you know.
Speaker Change: Used part of the kickoff for drilling, but I want to slow down the plant expansion and it makes much more sense given the economies of scale.
Speaker Change: That we should achieve from the new plant.
Speaker Change: Really spend our capital on that plant. So we have a much more robust exploration program at the end of that plant. So that's really why we're doing the things like the sequential waters that we're doing it.
Speaker Change: And we continue to have a great safety record that bought great. We've again for the second time achieved a million work hours LTI free so kudos to everybody about Greek who are working safely.
Speaker Change: So now I'd like to hand, the presentation over to Mike as I said I'm going to push falling over so you won't hear too much for me on this and Mike will go through what the financial results.
Mike Stifle: Thank you Stephen and good morning, everybody. Thank you for joining us for our Q1 call. Today, you know Q1 was.
Mike Stifle: Was it a fairly steady state quarter relative to what you were seeing over the last three quarters.
Production with just under 5000 ounces.
Mike Stifle: Look at the Q2, three and four of last year that is consistent with the output we've been achieving a farmer that would be kind of a day plant operating at or.
Mike Stifle: Near capacity year over year production was down slightly.
Mike Stifle: Q1 of last year was the first quarter, where we were commercially operating.
And then to get it up and running what we have done would you prioritize a high grade oxide ore three gram plus material went through that mill to get it up and running for the first quarter.
Mike Stifle: With that said what you are seeing for Q1 of this year.
Mike Stifle: We put your head grade of about $2 six grams, a tonne, which is still well above the average grade of the deposit and very robust for our open pit operation.
Mike Stifle: What are you well would have also noted operationally as recoveries were partly impacted and had an impact on year over year production, we realized recovery rates of on average about 81%.
Mike Stifle: The the lower end of what we're seeing from our met studies.
Mike Stifle: Based on our current rock composition, which is which is roughly 50, 50 sulphide and oxide ore material that you've been putting through the mill as well as grind size of attention times that we've been realized through the through the plant.
Mike Stifle: As Steven touched on we're very very excited about.
Mike Stifle: Standard and enhanced crushing circuit that we expect to come online and then.
Speaker Change: Oh, that's really expected to improve the ability of the rock and the material and consequently expect it to improve recoveries as we head into the latter part of this year, yes, So Mike I'm, just gonna pause you first secretary.
Speaker Change: And explained that so.
In any mining operation, there's a balance between your recovery rate and your <unk> footprint.
What you do is you try to maximize cash flow from operations by Dallas and that so we know it.
Speaker Change: He is our ore sits in the tanks longer or has a higher retention time will get a higher recovery rate.
Speaker Change: You also know we grind it a lot finer, we'll get a much higher recovery rate and so that's winding up into the met studies that we have right now given the plant is a bottleneck versus the order we have available rebalanced.
Speaker Change: Recovery rate and throughput rates.
Speaker Change: In an attempt to maximize cash flow from operations given that we're in a buildup phase.
Speaker Change: Do you have a good handle on recovery rates in that and how it improved though when the new crushing circuit comes online. There's one of the reasons why we decided to go with the crushing circuit burst versus the Midland Circuit for the ball mill is the crushing circuit is the bottleneck in the current system.
Speaker Change: And in order to re opt to be able to mill more it even in the current system, we need to have the crushing circuit up and running first which provides in a much more consistent.
Speaker Change: Product to the mill to obtain a much more consistent grind size to increase those recovery rates through the milling process.
Speaker Change: Well thanks Peter.
Speaker Change: On the financial side, we sold just under 4900 ounces for the quarter. So effectively all of what we produce and that gave rise to revenues of over $9 million. So again, you can see the realized price in the screen gold prices are still at Lockheed and robust levels.
Speaker Change: We realized 1914 for the quarter, we've been selling well north of $2000 an ounce this quarter.
Speaker Change: So lots of upside potential while the gold price. Our gross profit was just under $4 million or 40% of Steven alluded to sort of continues to be a high margin operation.
And adjusted EBITDA that we talked about as well as a $3 million so the proxy for cash flow.
Speaker Change: In terms of cash costs, we recorded a cash cost of just over $1000 an ounce for the quarter.
Speaker Change: No that's above the full year guided range of two week and $900 an ounce, but this is largely in line with our expectations as we talked about on our year end call.
Speaker Change: As we touched on but our year end results.
Speaker Change: Our our yearend and in Q1 cash costs have been impacted in part by a higher fuel cost associated without having to run our generators to keep the mill operating at capacity, we want to do.
Speaker Change: Unfavorable and inconsistent to grid power.
Speaker Change: As we talked about on your own call and since then we've connected to a substation far closer to the site and in November.
Speaker Change: We expect the benefit things like processing costs as we head into the latter part of this year.
Speaker Change: We're now operating at roughly 80% big power versus 20% generated power. So we expect that cash cost number to improve over Q2, three and four and get back to that full year guidance number of two week and $900 an ounce.
Speaker Change: And I guess finally, Steven touched on it but yeah, we've effectively done what we said we were going to do is be prudent capital managers organically generated cash flow to invest in value accretive activities like those.
Speaker Change: We generated operating cash flow was over $5 million, we put almost 4 billion of it back into the operation and part two.
Speaker Change: That's expansion that Steven touched on relative growth things like our tailing storage facility to accommodate larger growth as well as put pieces of capital equipment in place to allow for that growth profile. We've got a strong robust balance sheet with tangible positive.
Speaker Change: Positive working capital well.
Speaker Change: So its ability to adapt to come here, yeah, So Mike I'd like to touch on what you mentioned around cash cost.
Second now.
Speaker Change: On the mining cost.
Speaker Change: We're very comfortable with where they are.
Speaker Change: And we think we can put that down a little bit lower but we're at those cash costs will start to come down.
Speaker Change: The processing.
Speaker Change: Cost per ton.
Speaker Change: And.
Speaker Change: The expanded plant doesn't incur any more fixed cost or not very little extra fixed costs. So you really have to get a lot more fixed cost absorption due to higher throughput rates and really we still have a relatively small plant.
Speaker Change: Skies of the scale of what buffer you can't beat and in order to get those costs down we need to continually.
Speaker Change: Expand.
Speaker Change: Have that overhead absorption and better cost absorption in the processing plant and that's really what's driving the higher cash cost is closer to flat versus mining.
Speaker Change: It's a good point Stephen I mean, the plant will have significant economies of scale exactly to your point, you're doubling your throughput from 1000 tonnes a day to 2000 tonnes a day without any additional overhead. So in principle you are processing cost of say $26 a ton that we reported in Q1 should roughly be happy as.
Speaker Change: As we get that plant expansion online so lots of efficiencies and economies of scale yeah exactly.
Speaker Change: So as we move on the 2000 tonne per day plant as I said I'm smiling given the progress that we're making here.
Speaker Change: You will see some pictures here of the new crushed.
Speaker Change: Crushing equipment is right outside I think D C. Our general manager by cone Crusher.
And then you see are a journey.
Speaker Change: Truck near our new jaw crusher, you'll see the expanded tailings facility. There isn't that are left to go on to that and then you'll start to see the conveyors being put in place in the concrete works and things like that you all noticed the soil pretty moist stuff as I mentioned earlier.
Speaker Change: Lots of rain in Tanzania.
Speaker Change: There's a lot more than normal, but we're managing through it and I and the team is continually constructing on site theyre going both on day shifts that night shifts at this point in time constructing our.
Speaker Change: Our new plant. So there's only so much labor capital available and that's one of the reasons, we need to do the crushing circuit first and then we'll move on to the grind eager to ball mill circuit in order to put it all together, we're pretty excited with what's going on our suppliers on the crushers is put in place a it won't be putting in place a.
Speaker Change: Critical spares and critical parts warehouse and Milan to pretty close to us.
Speaker Change: In order to reuse a lot of.
Speaker Change: Central and breakdowns and things of that nature, so that looks to be turning out to be a very very good relationship.
Speaker Change: And this is expected to drive a lot of cost savings and increased production and increased cash flow, which will hopefully end up bringing the value of this project through the exploration drill bit as well as an increased production profile overtime anything to add Andrew.
Speaker Change: We need to come off.
Speaker Change: Just sitting here marveling at how both of you are doing an amazing technical description.
Speaker Change: Thank you very very much.
Speaker Change: So students are the mood here is very very positive.
Sites have been here since the <unk> of January.
Speaker Change: The.
Speaker Change: Congress is I think you mentioned about 65% now on the crusher. The key thing there is we're gonna be crushing the sofa groups bottlenecks coupon home size.
Speaker Change: Well then greatly enhance what's progressing.
Speaker Change: In terms of our mills and Susan grind ability.
Speaker Change: So I think it was it was there any color I would like to have the geologists are keen to see the money.
Speaker Change: But keeping them busy in terms of fine tuning the targets and is still having them get out in the balance sheet.
Speaker Change: School D S M L.
Around us.
Speaker Change: So I was just going to move to slide bar, where they can just continue on Andrew about why you should start to see the second half of the year.
Speaker Change: Alright.
Speaker Change: End of the year.
Speaker Change: Perhaps I should remind people of is obviously the SMB itself is in the red outline.
Uh huh.
Speaker Change: 16 square kilometers.
Speaker Change: Kilometers.
Speaker Change: The main zone itself there are rules of a random thing too.
Speaker Change: The Genesis spots, that's what were currently mining.
Speaker Change: We're currently in the process.
Speaker Change: Sourcing pumps to dewater, the south pits that'd be doable.
Speaker Change: Was it in short order was soft mining.
Speaker Change: Then in terms of the exploration.
A key thing for us now will be to drill that piece of ground between moving to the eastern poultry lost southern boundary rather it's an adjacent Chinese.
Speaker Change: Run operation.
Speaker Change: We have over three kilometers to go and test, but I'll just take a moment to Steven to just remind all listeners that we have.
Speaker Change: Had some great results right at the end of our last drilling campaign in the eastern Porphyry, obviously some of the better results 40 meters of extreme outcomes of Tom.
Speaker Change: Really do have to point out these are very short, which has several meters from surface will touch it.
Speaker Change: We the risks 167 meters below surface, and then about one and half Congresses southwest of that we have three leases running especially in terms of time.
Speaker Change: Onshore, indicating really shallow 43 reasons so ultimately.
Speaker Change: Oh from other drilling.
Speaker Change: It takes us.
Speaker Change: Of course as you get through that.
Speaker Change: But it's a great story got deposits hasn't changed Doug.
Speaker Change: It was supposed to the northeast of the mine to the southwest.
Speaker Change: This rule those weren't thought sort of small.
Speaker Change: Small scale operational simple minded, which is none of that is active.
Speaker Change: There's been a pickup.
Speaker Change: So it's a good thesis hasn't changed.
Speaker Change: Thanks Julien.
Julien: Excellent well, thank you Andrew for that so.
Julien: So as I get onto the next slide basically what we're doing on this slide is reiterating our business plan.
Julien: And reiterating production guidance around when that mill expansion should come on line and production guidance of 25 to 30000 ounces I remind that the run rate that's what we expect for full year.
Julien: With the thousands and then the expanded 2000 tonnes a day plant 2000 ton per day plant, obviously put its greater than that and we'll give the market guidance.
At the appropriate time for that the cash cost were reiterating our cash cost guidance to $900 an ounce.
Julien: And and what the increase in cash from the new plant will be used for.
Julien: The additional capital programs.
Julien: CSR ESG programs obviously.
Julien: We are operating we will have more employees.
Julien: The increase in the exploration and drilling focus are around the property.
Julien: So I always say, we have mindful ESG.
Julien: We work with the communities, we integrate our ESG into our operating cost profile, we hire a lot of local people a lot of local people and contractors things like that all other asset is starting to pay significant amounts of royalties and taxes as a result.
And we always keep a good eye on.
Julien: On making sure that people are happy as well as.
Julien: The schools medical facilities and such forth in vivo communities around us are continually improve it.
Julien: With regards to what to expect over the next three to four months.
Our met study in her geotextile desire coming to them.
Julien: So no surprises there so it will be coming in.
Julien: With regards to we are consistently and that will integrate into the <unk>.
Julien: A what I'll call a mine plan update.
Julien: You're looking at long term saving solutions.
Julien: Things of that nature.
Julien: We will come out with it.
Julien: At some point in time.
Julien: <unk> will detail a little bit more on what's known today and as well as what.
Julien: The exploration program for Tomorrow.
Julien: In order to give the market and investors a much more.
Guy and his business plan around halbach relief is going to roll out over time.
Julien: With regards to how markets have performed I don't think anybody on this call likes the current market. We are in a a higher interest rate environment and we have been in the last 10 plus years yourself.
Julien: That is expected to continue which means <unk>.
Julien: Capital is much more expensive also.
Julien: <unk>.
Julien: Alternatives that people have for investing are also different so we need to get out there to do something to get out there and tell our story. We are now a self funded growth story, which is good.
Julien: And our stock price, although we'd like to have it higher we always like to have a higher I think relative to peers.
Julien: She held in okay.
Julien: But certainly this is something that we are consistently on it and expect to see backlog some investor Relations program.
Julien: And on that note.
Julien: Here's some new pictures.
Julien: We're rapidly expanding.
Julien: Our self funded growth story.
Julien: And we are excited for what the futures as I explained about fleet, particularly at this plant expansion that comes online so I'd like to hand, it over to any questions.
Speaker Change: Thank you Steven.
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Speaker Change: Our first question is from Jake's accounts scheme with Alliance Global partners.
Speaker Change: Just account scheme.
Speaker Change: Let's continue.
Jake: Hey, guys. Thanks for taking my questions.
Speaker Change: Thank you Jake how are you.
Jake: Good good thanks.
Jake: So just just starting with recoveries and I think Mike touched a bit on them.
Jake: They are in the low <unk> this quarter and some of the work that youre doing to improve on them through network and an upgraded equipment.
Jake: Mike.
Mike Stifle: Are those improvements something we should expect this quarter or is that more of a second half of calendar 'twenty four.
Mike Stifle: Thanks.
Speaker Change: Yeah. So I think it's more of a second half hour well actually should be not second quarter, but third quarter is the grinding circuit.
Speaker Change: <unk> circuit comes online to get a much more consistent product going to the ball mills. So it is it is a balance with sulfide ore between throughput and cash flow and recoveries and so we're not seeing anything that gives us concern relative to the studies that have been done at <unk>.
Speaker Change: We do know that an inquiry.
Speaker Change: An increase in grind size, making the grind size.
Speaker Change: And.
Speaker Change: Longer retention times does increase recovery rates quite significantly.
Speaker Change: We put out the press release in August that had double their retention times and while we are currently.
Speaker Change: Experiencing to get the throughput through.
Speaker Change: And that had a much higher recovery rate as a result. So this is a complete balance we're not seeing anything that's concerning at this point in time that recoveries.
Speaker Change: That's right.
Speaker Change: Yeah.
Speaker Change: Okay. That's helpful.
Speaker Change: We're actually extra Jake before as the acting the way we thought it would so that's a real positive.
Speaker Change: It's very similar to the very initial metallurgical studies Steven.
Steven: Yeah, So just to remind our investors.
Steven: The very final days of the old crushing circuit to adhere to the test pumps and.
Steven: Ron I'm wondering into the sulfides as expenses.
Steven: And we're just weeks away quite literally from Honeywell nutrition, so it gets up and running.
Steven: As I mentioned earlier, we will have a very good product going into into the ball mills.
Steven: Just curios, how should all sorts of the Jake just to the podium Brian photographs Evercore Pascal Senior mine engineers sitting on top of the high grade zone the snow.
Steven: Into the sulfides to fuel visual appearance.
Speaker Change: Okay, and do you think you might be able to get it back up to the nineties Ranger or high Eighty's is that something that we should be expecting any color there would be helpful.
Speaker Change: Yeah, I think Jake.
Speaker Change: Yeah, I would say, we will get into the high 80 range theres ways to get it into the mid nineties.
Speaker Change: But what we do require capital to do that and we'll be evaluating that tradeoff studies at a further date. We've just grown so quickly we can't commit to that at this point in time, but certainly mid to high Eighty's.
<unk>.
Speaker Change: Makes sense, Okay, and then sort of in that vein on growth.
Speaker Change: With the completion of the most recent expansion coming to an end here.
Speaker Change: You've obviously got some options as far as how you parcel growth going forward.
Speaker Change: Just touch on sort of how you're viewing that in a couple of the routes that you're considering here, whether it's you know additional staged expansions or a single large expansion.
Speaker Change: And I guess, what what that decision ultimately hinges on.
Speaker Change: Yes, so as you rightfully said what are your options or processes. There. So that's not something that's determined didn't.
Speaker Change: At this point in time I would fully expect it will be a.
Speaker Change: Is there going to be.
Speaker Change: A larger expansion, which say another doubling because I think we could we could do that.
But the focus will be to step back at this point in time would that increase of cash flow and make those capital allocation decisions, what's best for the business between the exploration program as well as an expansion ultimate latest project needs to get to 100000 ounces plus for well over 10, plus years or even greater than that with exploration.
Speaker Change: Drill bit and Thats, our ultimate goal, there's various ways to get there and we will evaluate them. After this expansion.
Speaker Change: Okay very good that's all on my end thanks again.
Speaker Change: Thanks Jake.
Speaker Change: The next question is from Heiko with H C. Wainwright. Please go ahead.
Heiko: Hello, everyone. Thanks for taking my questions.
Heiko: Okay.
Heiko: What are you seeing with the 2000 tonne per day expansion.
Heiko: With labor assume it's not really any outside I'm pleased working on the expense you're right. It is really just your stuff.
Speaker Change: Yes, it's Paul.
Speaker Change: So it's all default at some of our staff and it's outside companies as well so like electrical for instance, you bring in an outside contract for that and some of the welding and things like that you'll bring some outside contractors yet so it's a combination of both our staff and contractors that we manage.
Speaker Change: Can you maybe give a bit of a breakdown of that.
Speaker Change: Andrew well, what's that roughly 50 50.
Speaker Change: During the construction phase, yes, because we were bringing in contracts as in terms of the civils.
Speaker Change: So, yes, I mean as you.
Speaker Change: Because as you mentioned.
Speaker Change: We didn't provide a lot of the if you like the nuts and bolts.
Speaker Change: Operations.
Speaker Change: But I am sort of putting it together.
Speaker Change: Okay.
Speaker Change: Thank you ma'am.
Speaker Change: Yeah.
Speaker Change: Sorry to interrupt you Andrew is it fair to say that methodology and the approach we're taking to the fashion is similar to the first one which is it's not sort of an EPC managed project, we're managing it and how does that sort of.
Speaker Change: Outsourcing.
Trade does need to be.
Andrew: Yes, that's right what we've done is we've.
Speaker Change: So Jeff <unk>.
Speaker Change: Over here, if you like of the capital projects, we've hired a couple of projects manager at science, especially among those photographs with custom machine.
Speaker Change: We see that.
Speaker Change: So, but it also hydro the idea behind it is if you keep that core team and the plant involved in the construction as well and then there are specialized.
Speaker Change: Contractors than food away, but then you end up with the team.
Speaker Change: Science that can carry on.
Speaker Change: The projects.
Speaker Change: We're watching some more people do the work.
Speaker Change: Well, yes, so the.
Speaker Change: As long as it's really crucial is to have.
Speaker Change: You say smart people when it comes to have your electrical engineering.
Speaker Change: Want to have smart people, who really do use one of the best.
Speaker Change: The contract is an especially east Africa, most people I've ever worked with.
Speaker Change: CSI <unk> got to get that price.
Speaker Change: No fair enough.
Speaker Change: Speaking of staffing what do you think we'll see with labor costs for the remainder of the year. I mean are you seeing anything that you can maybe share with us in regards to the negotiations or just what youre seeing with turnover of that kind of stuff.
Speaker Change: Yes.
Speaker Change: Can you give us a student.
Speaker Change: Yeah I think.
Speaker Change: That question comes from more of a north American and European perspective of labor rate increases that we're seeing in our economies here, we're not seeing the same type of increases there as you would have seen it here in North America.
Speaker Change: Yes sure.
Speaker Change: Cost of inflation or inflation.
Speaker Change: In terms of there is approximately 5%.
Speaker Change: And.
Speaker Change: Yeah, we're not in.
Speaker Change: Negotiations.
Speaker Change: And you're going to get to.
Speaker Change: Not unlike other emerging jurisdictions, you are getting some currency depreciation of the ship, but not to the same extent as other jurisdictions.
Speaker Change: Correct.
Speaker Change: Our opinion, who lives in North America, I guess I'll, just ask questions to fit the mould. Thank you all very much and I'll get back in queue.
Speaker Change: Thank you very much thank you.
Speaker Change: Okay.
Speaker Change: The next question is from Robert Paulson with Paulson strategy, Chris. Please go ahead.
Robert Paulson: Hello, everybody.
Speaker Change: Hi, Robert.
Robert Paulson: I'd like to say congratulations to Stephen Andrew Michael Christine in the Trs team.
Robert Paulson: For transforming Trs <unk> been around a while and doing that.
Robert Paulson: That really needs to be done to grow and be more successful.
Robert Paulson: I appreciate the questions earlier about improvements growth expansion right all great questions, great answers and.
Robert Paulson: You know my curiosity, probably similar to many is with gold steady basically holding all time highest 2000, plus volatility is really strong as far as being minimal company's profitable cash flow positive strong profit margins solid team communities looking great central.
Robert Paulson: Banks, just keep increasing their exposure in de dollarization is under the way. My question really is is like it's more of like a personal question like what do you. What do you believe needs to happen for Trs to reflect all these great things that are going on like is there.
Robert Paulson: At an internal events.
Robert Paulson: Something going on for us with exploration or an external events or just wondering if you could elaborate a little bit yeah.
Speaker Change: I'd say, that's a very broad question and I'll try to get to.
Speaker Change: Down to a little bit more granularity, but thank you for your comments at the outset.
A turnaround at the company obviously as you mentioned the company has been around a long time I've been here just over three years and I would say.
Speaker Change: The way, we like to create here internally, but probably in the sixth or seventh inning of what we're trying to do here. The original part was the stabilized recapitalized reached.
Speaker Change: Stablish relationships and things like that.
Speaker Change: And get the company pointed into the right direction and then thereafter, we started to expand it so with regards to when will someone actually stand up and take notice of what we're doing I think is essentially your question.
Speaker Change: We were on the road a lot marketing.
Speaker Change: What I like to say is what I am seeing in current markets and I don't think youre going to disagree with it.
Speaker Change: Is a lot of companies will be out there doing a lot even more marketing than we are.
Speaker Change: You can't market your financial result.
Speaker Change: We don't have good financial results it doesn't matter how much America youre doing your stock price declines.
Speaker Change: And a lot more of it than what we've experienced over the last couple of years and so our focus has been really on turning around the operations and the increase in net cash flow and then taking that cash flow and putting it into the drill bit expanded resource profile to make this a very attractive mining project that creates cash flow.
Speaker Change: One is blue Sky upside.
Speaker Change: In time to do that I think.
Speaker Change: As you know in my former role as things happen very quickly.
Speaker Change: Mining code you can happened slower than you would like but you got to keep an eye on it and keep your eye on the long term price I think what's necessary here as the continually execute.
Speaker Change: Do as we say.
Speaker Change: We continue to increase those financial profile and those financial metrics, while at the same time growing the resource base I think.
Speaker Change: You know.
Speaker Change: The slow and steady approach that I just mentioned it is what you have to deal with the drum along and you hit 100 grams, a tonne at a drill bit because you're drilling more than great. That's always a catalyst in any mining project.
Speaker Change: Can't bank on it.
Speaker Change: Get out there and continually do what you do within that spoke to the business and then make sure that you have that optionality in your business plan. The spring. It if you can hit those goals.
Speaker Change: Does that makes sense.
Speaker Change: Yeah. It doesn't makes sense and then thank you.
Speaker Change: Four four.
Speaker Change: Respecting the question you.
Speaker Change: You guys are doing a wonderful job I think everybody can agree that the company now versus where it was a short time ago is a much different company.
Speaker Change: More grounded more opportunity clean financials like a lot of other things people are really looking for.
Speaker Change: In a marketplace, that's looking quite attractive.
Speaker Change: And my question really is as you guys have your fingers on the pulse.
Speaker Change: Key things that other people may not see it.
His intuition, saying, it's like we're just doing all the right things in the patients thing or.
Speaker Change: Are there things that we should be considering doing that we're not doing.
Speaker Change: Yeah, and then we have these discussions every day around okay. What's in our control what's outside of our control because that's one of the things you have to take into consideration when answering the question that you you just answered just asked and we believe that consistently increasing that financial profile.
Speaker Change: Now doing as you say being extremely prudent with capital.
There's a lot of these things you could speed up but is it added in the best interest of shareholders. So for instance, in making that decision. We could've just went out and raised equity last year and have the plant expansion come online.
Speaker Change: Nine months ago or six months ago.
Speaker Change: But is that in the best interest of the long term value for shareholders and so you have to keep that into consideration and we decided just to do it internally generated cash flow yeah. It takes a little bit more time, but the denominator now is not as great.
Speaker Change: And share count. So those are the sorts of things that we tried to get through and make capital allocation decisions on.
Speaker Change: Is getting the best value to shareholders over the medium to long term.
Speaker Change: Fair enough if you'd allow me to ask one more question kind of in line with what we were just discussing.
Speaker Change: Is there is there something that we could see in the future or something that's kind of close that.
Speaker Change: Like when we talk about obstacle wise is there anything that we can see that's in the way right now that would hold us back from from doing are being the things that we want to be doing.
Speaker Change: Yes, right now I don't think so.
Speaker Change: We built in a lot of redundancy on purpose into this business model branch into.
Speaker Change: At year end, we describe you know motor is going down and in August, but we had three bill ball mill. So production didn't go down and we were able to get through any shutdowns and things of that nature.
Speaker Change: The crushing circuit is very important and there is gonna be redundancy built into that crushing circuit as well because I go through with the team gave me every piece of equipment that can shut down the whole thing, 100% and make sure that that piece of equipment is on site.
Speaker Change: And so we go around and infill that.
Speaker Change: In the medium term I would say, we need to get a much better handle on tailings and we gotta go to handle on it but we need to build it out we need to come up with a longer term strategy at that that's the only thing that I can see that could really slow us down and we got a handle on it right now in order to enter.
We will have a study on the law at some point in time here soon on Merit and can really kick in also Stephen Delta, Yes, that's already kicked off filter presses to get to a dry stack. So we're out ahead of this stuff that we can see.
Speaker Change: Hey.
Speaker Change: What you're really asking is.
You know it's hard to predict is what can't you see that could trip you up.
Speaker Change: That one Eric that's right.
Eric: Yeah Yeah.
Eric: Yeah.
Eric: Trying to figure out.
Eric: Yes, yes, yes.
Eric: Dr known right and you get them and then they happen time to time, but we take a philosophy that you're building up redundancy and you should be okay.
Eric: Yes.
Eric: Yeah.
Speaker Change: Some comments.
Speaker Change: Restaurant, whilst we were prepared.
Speaker Change: Having the El Nino effect is really Tim heart pump is the pumps are keeping the pit dry.
Speaker Change: As Muhtar you get.
Speaker Change: But we're still mining we don't flooding deal.
Speaker Change: It's about where it's at.
Speaker Change: One thing that I always look at is okay save something were to happen.
Speaker Change: We have large stockpile on site.
Speaker Change: There was 12000 ounces, there now and stockpile.
Speaker Change: We need to get a much larger crushed stockpile, which will work on when we get the new crushing system up and running so I like that I like to think about okay. How do I build all those what I'll call internal insurance policies into the company.
Speaker Change: Okay.
Speaker Change: Yes.
Speaker Change: Thank you Sir.
Speaker Change: For.
Speaker Change: Yeah.
Speaker Change: Answering those questions I know, they're very surface, you've kind of questions.
Speaker Change: There are some of it around a while and our fans of what you and Andrew and Michael and the rest of the team are doing.
Speaker Change: We've been out in a while and we're certainly looking forward to what seems to be coming down the road. So.
Speaker Change: Maybe where we started was congratulations maybe that would be a great place for me to add congratulations and thank you.
Speaker Change: Yeah, So Robert I appreciate the support.
I'd like to hand, the meeting back over to Stephen Moloney, who will take US two questions submitted in writing.
Stephen Moloney: So the questions submitted in writing so we have one question here on.
Stephen Moloney: I think it's 22000 <unk> common slide for M&A opportunities timeline, so let's talk about add on the M&A for a second I think it's just more along the lines of what M&A opportunities are out there.
Stephen Moloney: So we're always consistently looking at M&A opportunities that would make sense for our shareholders and.
Stephen Moloney: As you are getting the fences, we don't really mind situations, where you've got to get in there a roll up your sleeves, maybe a little bit messy.
Stephen Moloney: Great value from it that would be similar to when I came into.
Stephen Moloney: Into this opportunity as well as a team so.
Stephen Moloney: We will evaluate things that that makes sense, what I would say is we're very.
Stephen Moloney: Prudent making sure we do not cannibalize the growth opportunities at <unk>.
Stephen Moloney: Cannibalize, the clean balance sheet and bring you on to stop that may upset that when we look at companies that.
Stephen Moloney: Typically are in trouble from an equity price perspective, and a market cap perspective, usually they have securities that rank ahead of equity on their balance sheets that are very problematic and that's very difficult to get out.
Stephen Moloney: Because what ends up happening is your business that comes out of their capitalized over time.
Stephen Moloney: And mining is very capital intensive business, so we will prudently evaluate opportunities but given.
Stephen Moloney: It has to make sense for our shareholders. It also can't can it also has to increase growth potential. These are the bok rate, which is about three pads a lot of growth potential.
So it has to have better growth potential shareholders about great guns.
Stephen Moloney: In order to make sense and thats difficult to find.
Stephen Moloney: And so that's how we evaluate M&A opportunities.
Just add to that briefly.
Stephen Moloney: The comment was around 2025 26.
Stephen Moloney: So obviously you've heard our focus for this upcoming year is getting a buck reached to the point, where its operating too.
Stephen Moloney: 2000 tonnes a day.
Stephen Moloney: Distantly and predictably and effectively running itself before we.
Stephen Moloney: I'll start venturing to deepen the strategic waters elsewhere, yeah, we'd like we have people approach us all the time seeing what we're doing about brief said can you comment help us, but then you start talking to equity holders of that and they're saying Oh. It's worth this is worked at and where Theyre yeah. Thank you, but no. Thank you.
Stephen Moloney: On lot of those opportunities.
Stephen Moloney: And the next the next question there is there any plans I definitely long growth again.
Additional mining mens cooperation small cap miners in next two or three years I think I just answered that question.
Speaker Change: Yeah, we will evaluate that.
Speaker Change: We've also look as we continuously evaluate growth profile about grief.
Speaker Change: Anthony is an interesting.
Speaker Change: Land scape and there are quite a few high grade smaller deposits around and there are other companies out there that do have hub and spoke model and I think that will be something that will be evaluated further over time. So we have bought Greek learn how to build roads, we have learned how to build plants.
Speaker Change: Very cost effectively so.
Speaker Change: There are growth profile opportunities that will start to as we get through this expansion, which is where our focus needs to be today that really looked at for a longer term strategy. I think there are certain people on our board that.
Speaker Change: We're very happy with the questions that been asked by investors today.
Speaker Change: And Steve maybe just to give a little bit of.
Speaker Change: When it comes down as you would expect from.
From our geological team.
We do like stone who's around us and what they're doing.
Speaker Change: Yes.
Speaker Change: We don't spend.
Speaker Change: What percentage of time on it but we will.
Speaker Change: Keep a very high level.
Speaker Change: Okay.
Speaker Change: So I think that's a good gaining that that's all the questions that are in the queue today.
Speaker Change: That's right would you like to give any concluding remarks before I conclude.
Speaker Change: Yeah, just one final remark I think we said it we're very excited for the future.
Speaker Change: We are moving through the business plan as anticipated looking forward to the increase in cash flow from.
This expanded plant and I can tell you Andrew geologists team or.
Speaker Change: No pun intended chomping at the bit.
Speaker Change: Yeah.
Speaker Change: Thank you eventually yes, that's true.
Speaker Change: Thank you good evening.
Speaker Change: This concludes the meeting you may disconnect. Thank you for participating and have a pleasant day.
Speaker Change: Thank you.
Speaker Change: The conference is no longer being recorded.
Speaker Change: [music].